ML20072H736

Deposition of M Haimowitz on 810422 in New York,Ny.Pp 1-145

ML20072H736
Person / Time
Site:	Crane
Issue date:	04/22/1981
From:	Haimowitz M GENERAL PUBLIC UTILITIES CORP.
To:
References
TASK-04, TASK-4, TASK-GB NUDOCS 8306290706
Download: ML20072H736 (146)

Text

{{#Wiki_filter:- I Q, hd UNITED STATES DISTRICT COURT j SOUTHERN DISTRICT OF NEh YORK v i(l , /* t _x .R GENERAL PUBLIC UTILITIES CORFORATION, JERSEY CENTRAL POWER & LIGHT COMPANY, METROPOLITAN EDISON COMPANY and PENNSYLVANIA CLECTRIC COMPANY, Plaintiffs, CIVIL ACTIC NO. 80 CIV. -against-1683 (R.O.) THE BABCOCK & WILCOX COMPANY and J. RAY McDERMOTT & CO., INC., Defendants. 4 ~x Deposition o f Plaintif f GENERAL PUBLIC UTILITIES CORPORATION by MILTON HAIMOWITZ, taken by Defendants, pursuant l to notice, at the offices of Davis, Polk 2 & Wardwell, Esgs., One Chase Manhattan Plaza, New York, New York, on Wednesday, !j April 22, 1981, at 9:40 o' clock in the i l forenoon, before Charles Shapiro, a i i i l Certified Shorthand Reporter and Notary DOYLE REPORTING, INC. CERTIFIED STENOTYPE REPORTERS 369 LExtNGToM AVENUC -A NEW Yose x. N.Y. 10017 h 0 TE'""oNe 212 - as7-s22o l T

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l 2 1 Public within and for the State of New York.

3 s 4 1 5 5 f { 6 App e a ra nc e s-i I 7 KAY, SCHOLER, FIERMAN, HAYS & HANDLER, ESQS. l Attorneys for Plaintiffs ] 8 425 Park Avenue l New York, New York 9 1 i By: DAVID KLINGSBERG, ESQ. 10 -and-PATRICIA HENNESSY, ESQ., 11 of Counsel j i 12 I I I t 13 DAVIS, POLK & WARDWELL, ESQS. l l b 14 Attorneys for Defendants [ One Chase Manhattan Plaza 15 New York, New York i i 6 i-IG By: ROBERT F.

W13E, JR.,

ESQ. j -and-i 17 RICHARD PU, ESQ., i, I -l 18 of Counsel l 19 l i 20 l .} r l t l 1 [ 23 ,I l 24 i* i r c j ..i

- ~.. t 'l 1 3 .- j 2 IT IS HEREBY STIPULATED AND AGREED .r - 3 by and between the attorneys for the 4 respective parties hereto that the sealing, I-5 tiling and certification of the within. i I 6 deposition be, and the same hereby are, I waived; that the transcript may be signed 8 before any Notary Public with the same force 9 and effect as if signed.before the Court. 1-10 IT IS FURTHER STIPULATED AND AGREED 11 that all objections, except as to the form f i i 12 of the question, are reserved to the time 13 of trial. l 14 i 15 4. I, 1 16 i 17 M I-L T ON HAI M OW I T Z, having i I8 been first duly sworn by the Notary Public, 4 i-19 was examined and testified as follows: !j t - 20 EXAMINATION BY MR. WISE i 1 21 j g Q Mr. Haimowitz, will you state your. i 22 full name and residence address for the record? 23 A My name is Milton Haimowitz. 'I reside at 47 L Court in New Milfo;d,.New Jersey. i i l -24. I Deitz lt I (])' Are you currently employed? 25 g l I 4 .~v.. m

1 Ho!mowitz 4 j I 2 A Yes. 3 Q By whom are you employed? l 4 A I am employed by GPU Service Corporation. i I 5 Q what is your current position with 6 that company? 7 A 'I am presently a Director of Contracts, 8 Policies and Procedures. 9 MR. WISE: Mr. Haimowitz, your counsel 10 has produced here this morning a one-page., 11 summary of education and job history which I s T +2 l 12 would like to have marked as Defendants' g s s s 13 Exhibit 23 for identification. 14 (One-page summary of the education and i s 15 job history of Milton Haimowitz was marked i i 16 Defendants' Exhibit No. 23 for identification l I l 17 as of this date.) { ~ i 18 BY MR. WISE: I l s 19 Q Mr. Haimowitz, have you'see'n Exhibit 20 23 before? i i f o -,' 21 A Yes. f l s ,4 22 Q Did you preparesit? A 23 l A No. l 24 Q Who prepared it? I h 25 A Counsel. Q f c -I j-a N { .N'

% aw.m.; ~ m. m-I t-1 Haimowitz 5 i l 1 1 2 Q Did you give counsel the information f'\\ d 3 which went into the exhibit? l f i 4 A Yes. 5 Q Is it correct to the best of your 6 current knowledge and belief? l I 7 A 'It is correct to the best of my current j 8 knowledge. I 9 Q The exhibit indicates that you 10 graduated from City College of New York in 1953. 11 What did you do between 1953 and 19567 i 1 12 A I served as a member of the Armed Forces, j l 13 Q What branch? ) A U.S. Army. 14 2.: l 15 ~ Q Were you assigned to any particular unit { !6 within the Army? [ e I \\ ' \\ '17 'A Yes. w y w lr 18' Q What unit? t-1 19 A The Army Security Agency. l 4 2n Q While you were in the Army, did you have 21 " any responsibility for reviewing, negotiating, or b-) + _22 executing contracts on behalf of the Government? ~~ j- ~Y 3 23. l A No. i ' -.5 i 24 l Q Would it be correct as indicated on I j l 25 this exhibit, in 1956 you went to work for a company './ '. ( e t l i I L; l t i N,. ~ t -t {. t,, )

r-- ._.._ a - y 1. Hainowitz 6 + i I 2 called OCCO Manufacturing Corporation? g, f ( 3 A That is correct. 4 Q What were your responsibilities as 5 Administrative Assistant to the President of that 6 company? l 7 A As the Administrative Assistant to the 8 President, I had certain procurement responsibilities 9 and I would review certain contracts that we had 10 with other companies, 11 I also did some f in a n ci:21 and cost data l 12 and general correspondence, f f f 13 Q What business was OCCO Manufacturing l 14 Corporation in? l l 15 A OCCO is a manufacturer of electromechanical !~ IG components. 1 i 17 Q What applications were those components. i j 18 manufactured for? I 19 A I believe that the majority of the components i 20 were manufactured for early missile systems. 21 Q Where is OCCO Manufacturing Corporation g 22 located? Is that South Hackensack, New Jersey? 23 l A OCCO Manufacturing. Corporation was located in i i .f f South Hackensack~, New Jersey. 24 53 (_j - 25 Q Did your duties and responsibilities i-i i f.

~ _--n...,- ... -.. = N. I Hainowitz 7 l l t i 2 with that company include the review, negotiation, f ) (s or execution of contracts between OCCO and the 3 1 Government? 4 5 A No. fi Q Did OCCO have any contracts with the 7 Government, to your knowledge? 8 A Yes. 9 Q Did you ever have cause to see those 10 contracts? 11 A Yes. i 12 Q Did you become familiar with them? l 13 A Yes. 14 Q Who was res.*onsible for administering l 15 OCCO's contracts with the Government? I am not so i 1 16 much interested in the man's name as his title l' 17 and his relationship to your job position. I 18 A The administration of the contracts was under 19 i my jurisdiction and also under the jurisdiction of 5 20 the President of the company, Peter Occopinti. l 21 Q Who was responsible at OCCO for the 22 review, negotiation, and execution of contracts 23 between OCCO and the Government? \\ 24 A Peter Occopinti. k) 25 Q With what branch of the Government 3_s l -) i I L i 1 -w

h .1 Hainowitz 8 1 2 were the contracts entered into? I f () 3 A I believe the United States Army. 4 Q To your knowledge, were those 5 contracts negotiated or were they presented on a G standard form? 7 A 'I don't think I follow the question. 8 Q Do you know whether the Army used a 9 standard form contract in its business relationships 10 with OCCO? 11 A I believe so. 12 Q Did OCCO have a standard form contract i 13 for its procurement from other companies? l () 14 A It had a purchase order form. 4 15 Q How many pages was that form? l l IG A One. ?. l 17 Q Did you ever personally participate l 18 in the negotiation of a contract longer than the 19 simple purchase order form while you were at OCCO? l-20 A I don't believe so. t 21 Q Your resume indicates that you attended . 22 Fairleigh Dickenson University and received a I 23 . certificate ~ in 1967. i 24 l When did that course of study begin? r t i f^ 25 i A I believe it was in June of 1967. \\_>)- .i I i i a L:

g. I -l Haimowitz 9 l l 2 Q That is when the course of study O 3 began? 4 A Yes. 5 Q How long did it last? i G A I believe six weeks. I 7 Q What subjects were covered in that 8 course? 9 A I remember one session was on cost and price 10 analysis. i 11 (Recess) 12 MR. WISE: Off the record. i I 13 (Discussion off the record.) ( l 14 BY MR. WISE: 15 Q The question that was pending before Ifi we broke for coffee, was whether you recall any of the i j,1 17 other areas covered in your course at Fairleigh 18 Dickenson; in particular I would like to know is whether there were any it ssons or courses given in I i (,' 20 the area of who would bear the risk of loss under t' g 21 a contract or similar sorts of subjects as' opposed l 22 to pricing-type studies. 23 A I can't recall that ever having been discussed-i 24 i at.the course that we are talking about. 1 i h~T

I i N. /J 25 1

Q Did that course cover insurance? l 6 i + ,i j

.m-.----., ~.a am;..-,.. ~,, _.m l i i I Haimowitz 10 j 2 A I don't believe so. k 3 Q Your resume indicates that you went 4 to work for Blass Antenna Electronics Corporation 5 in Leonia, New Jersey in August of 1967. 6 was that your next employment after I 7 OCCO? 8 A Yes. 9 Q what business was Blass Antenna in? 10 A Blass Antenna manufactured ECM equipment for 11 sale to the Government. 12 Q You will have to explain to me what 13 ECM equipment is. 'm ,(J 14 A ECM stands for electronic countermeasurec. I i 15 Q What were your duties and ? 16 responsibilities with that company? i 17 A At Blass Antenna, I wat a Contracts f 18 Administrator. 1 19 Q What did you do in that post? i 20 A In that post, I administered contracts which. ( .'I 21 we had with the Government, and also the subcontracts ! g l 22 that we had with suppliers to us. l 23 i Q Were you at a'll responsible for the i ~ i review and negotiation or execution of those 24 4 l n\\ l contracts? l 25 i 6 i j '.

Jb=>. l Haimowitz 11 j i 2 A No, that would not include -- that was not /~h '(s) 3 my responsibility at Blass. f l 1 Q Who did thae at Blass? 5 A The review and negotiations were conducted I 6 with -- by the Director of Contracts and the 7 compahy President. The execution was done by the 8 company President. 9 Q Am I correct, then, that in your 10 position at Blass, the contract would have already 11 been executed prior to the time your responsibilities, I 12 for it would begin? l 13 A That is correct. ) 14 Q Did you ever have any occasion, while i e 15 you were at Blass, to consult with others concerning i 16 the interpretation of terms contained in contracts 1 i f 17 that had already been entered into? ? 1 i 18 A Yes. 'l 19 Q Did those conversations ever concern j 20 any clauses in contracts which clauses related to I i ) 21 insurance? 22 A I don't remember any. 23 Q Did those discussions ever relate to ) i u 24 contract clauses regarding indemnification? l t 1 5'~l - 45 A I don't believe so. .V i l 1 i s J

y 1 1 1 ] Haimowitz 12 l il. 2 Q Did any of those discussions ever I 3 relate to contract clauses. involving property 4 damage? I 5 A No. G Q Your resume indicates that your-next 7 employment was at ITT beginning in 1969. l 8 Was there anything between Blass 9 Antenna and ITT? 10 A No. 11 Q What particular unit within ITT did you l-12 go to work for in 19697 13 A I went to work for the Avionics Division 14 located in Nutley, New Jersey, 15 Q What business was the Avionics [ 16 Division in? 17 A The Avionics Division was a manufacturer of 18 goods, material and equipment for various Government [l I-19 l agencies. 20 Q Were these goods, material and equipment 3 i 21 for military use? 22 A We would call it fo Deoartment of Defense 23 needs. 3 24 _ j Q What was the title of your position I 25 with ITT in~1969? + 3 h

%L -a- , ~...... _ _ t 1 Haiuowitz 13 l 1: t i I-2 A Senior Contracts Administrator. i l 3 l Q Did that title change at any point t i 4 during your tenure with ITT? 5 A Yes. l i 6. Q What other titles did you hold while i i I 7 you were with that company? 7 s 8 A A supervisor, contracts. 9 Q When did yot. asrume that position? 10 A I believe in 1974 or '75. No, '74. 11 Q. Did you have any other positions with 12 ITT7 l l l 13 A No. I r k. 14-Q In either of the two positions you j l 15 have named, did you have any responsibility for the l 16 review, negotiation or execution of contracts? I i 17 A Yes. [ 18 Q What responsibility did you have? i-19 A I had a review responsibility and a 20 negotiation responsibility. l 21 Q Did you have that responsibility when f-22 you were a Senior Contracts Administrator? 23 i A Yes. I 21 Q With what organizations d'id the ITT [~l i ,\\~/ 25 l Avionics Division enter into contracts for which you t, I f l. J

. n __ _ i'~ 1 Haimowitz 14 l.. 2 2 were the responsible reviewer and negotiator? I') 3 A I believe with the Department of the Navy. 'b> 4 Q Any other organizations that you can I i 5 recall? G 'A No. I~ 7 'Q Did the Department of the Navy have any f 8 standard form contracts which they used in the areas 9 in which you dealt with them? 10 A Yes. 11 Q What were those standard form of 12 contracts? Did they have any title or name? 5 t 13 A Yes. They were -- depending upon the type ,'s-14 of contract, there were a standard set of terms and 15 conditions that would go along with every proposal i l t 16 or solicitation. l 4 f 17 Q Do you know whether there was any l i 18 title or name for that standard set.of conditions? 1 19 A No, I don't remember any. .i 20 Q Did you familiarize yourself with 21 those terms and conditions at the time? m I i 22 A To some degree. i 93 Q Do you. recall whether those terms-and i 24 conditions contained any clauses relahdng to I t i i, .r-l 25 insurance? d I f I .n 4 i. c-

I I Haimowitz 15 i i 2 A I don't recall insurance.

1. 'T l

l 3 Q Do you recall whether those terms ~ 4 and conditions contained any clauses relating to i 5 property damage? I 6 A I don't recall. i 7 Q Do you recall whether these terms and i I 8 conditions had any provision with respect.to l l 9 consequential damages? k 10 A No. I 11 Q You don't recall one way or the l 12 other or -- l l 13 A I don't recall. l I r~s k~ 14 Q Your resume indicates you left ITT t 15 in 1975 and I am inferring that you then went to i IG work for GPU Service Corp. l E 17 Would that be correct? i, 18 A Your inference is correct. 19 Q What caused you to leave ITT in 1975? 20 A In late 1974, I became a widower and felt, i 21 at that point, I wanted more of a challenge. - g 22 Caneequently, I was offered or at least solicited 23 I positions in industries that I though would give l 24 j me that challenge. ~ ' - :r '3 .Why did you solicit, if you did, GPU A_j 25 l Q s l t q i. l

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-~ i I Haimowitz 16 i I 2 Service Corp.? (l l ~-) 3 A In response to an ad and an interview, I I 4 felt it was a very large challenge for a man 5 experienced in contracts. I 6 Q Whom did you see at GPU Service when* { l 7 you went looking for a job? 8 A When I went looking for a job? 9 Q You said you' responded to an ad. 10 A Yes. 11 Q When you responded to the ad, who I 12 did you first speak with at CPU Service? l f.- 13 A Fred Glickman. i l' / 14 Q When was this? 15 A In 1974, the last quarter of the year. l lli Q For what job position were you i i 17 applying at that time? l l 18 A I don't believe there was a specific job } I lb i with a title that I was applying to at that time. 4 20 Q Do you recall.what Mr. Glickman had i 21 to say about what your duties and responsibilities g 22 would be in the event you were hired? 23 A Mr. Glickman describ'ed the opportunities l i ~ 24 available in a new department at that time. Mr. () 25 Glickman also was able to show me a job challenge j 4 i i

%~ l 1 Haicowitz 17 l 2 that would exist in any one of a number of areas ^ (T ~# 3 which I felt I would have the qualifications to i l 4 fill, but during the interview process I can't 5 recall a specific job with a title. i G Q What did Mr.'Glickman say about the l' 7 new department? 8 A Mr. Glickman thought it had a tremendouse 9 purpose, need, and would result in tangible 1 10 benefits to the corporation. Il Q Did he describe what functions.the 12 new department would perform? 13 A I believe so. / 14 Q What did he say? 15 A I remember discussions on the need for IG negotiations for many, many claims of existing /!- 17 contracts. I remember the need for administration i 18 by experienced contract professionals of existing i 19 contracts, and I also remember discussing the need i r i I 20 for professionals to underta'.e negotiations of 1-g 21 contracts, and.I believe we discussed less of a l 22. reliance on the utilization of architect engineers and construction managers to do the contracting 23 1 j l' for GPU Public Service Comapny and its operating l 24 - () 25 companies. I l i 1 r

j l I Haimowitz 17A l l i f f I i 2 Q Was there any discussion at that time l l 3 of your legal training? 4 A Yes. (continued on next page) 5 t 6 I 7 8 9 4 10 t 11 12 4 4 13 i I 15 t 16 l 17

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%~ wa -.-......- a w- -~ lb/1 1 Haimowitz 18 i 2 Q Did Mr. Glickman indicate any (3 t'j. 3 Particular need for someone to fill these slots 4 that had a background ir law? 5 A No, I don't recall that being a prequisite. G Q Your resume indicates that you were 7 at Seton Hall Law School and the date is given 8 of June 1972. 9 Was that when you began or when you 10 received your degree? 11 A That is the date on which I received the 12 degree. 13 Q Why had you gone to law school? ,m ) ^(~# 14 A I had been working at ITT in the contracts 15 area, I enjoyed very much the entire area of I 16 contracts and I then decided to enroll as an t 17 evening student at the Seton Hall Law School to 4 l 18 grow professionally, i 19 Q When did you begin your course of 20 studies at Seton Hall? 21 A September 1967. g 22 Q Did you become a member of'the Bar a 23 in any state? r ~ 24 A Yes. f) \\./ : 25 - LQ In what~sta'.e d2d you first become a i ..i

--__.n [. 1 Haimowitz 19 2 member of the Bar? 3,) 3 A New Jersey. 4 Q What year? 5 A 1972. 6 Q Have you since become a member of 7 the Bar in any other state? 8 A No. 9 Q Do you belong to any professional 10 organizations? 11 A No. 12 Q Have you ever belonged to any 13-professional legal organizations? ) 14 A Yes. 15 Q Which organizations? 16 A I was a member of the New Jersey Bar f 17 Association for one year and I think I was given -l 18 free membership to the American Bar Association 19 for six months. 20 Q Have you ever participated in any 21 sections or committees in either the New Jersey 22 Bar Associa, tion or the American Bar Association?- 23 A No. '24 Q Any.other Bar'AssociationJ 25 A No. i i 0

O l' 1 Haimowitz 2 Q Have you ever taken any courses ! (~'\\ lD 3 offered by the Practicing-Law Institute? I P i. 4 A No. 5 Q Have you ever taken any courses 6 offered by any other organization which might be 7 described as continuing legal education? First 8 o f all, are you familiar with the term " continuing 9 ' legal education"? 10 A Yes. 11 Q Have you taken any courses that might 12 come under that heading? f 13 A I don't believe that I have taken any 14 courses that would come under the heading of i 15 continuing legal education. 16 Q Have you taken any courses at any i 17 institution since your graduation from Seton Hall 18 in 19727 i' 19 A No. 1 20 Q Have you taken any' courses offered t 21 by any professional group or organization since 22 1972? .23 A Yes. 1 24 Q What courses have you taken?. . 3 25 A I attended a three-day. seminar in l [v - a a e i.

~, Wii.s u_._.. I Haimowitz 21 2 Washington, D.C. where the main topic was ('). 3 construction contracts claims and disputes. 4 Q Do you recall who offered that course? i 5 A An organization with headquarters in 6 Connecticut. 7 Q You don't rt.membsr the name of that 8 organization? 9 A No, I don't. 10 Q Were there any other courses that you 11 have taken? 12 A No. 13 Q While you were in, law school, did you 14 concentrate your studies in any particular area 15 of the law? 16 A No. i l 17 Q Since 1971 have you subscribed to j. 18 any professional publications? 19 A No. l l., 20 Q When did you actually work with GPU i l 21 Service? I,- } i i 22 A January 2nd, 1975. 23 Q What was your' title at that time? 24 A Manager of Contracts, Co ns truc t'lo n. i p .,() 25 Q What were your duties and r

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1 22 1 Haimowitz 2 responsibilities in that position? ! tm.() 3 A In that position I had primary responsibility 4 to familiarize myself with existing construction 5 contracts and to partake in the review and 6 negotiation and settlement of major claims on 7 GPUSC run projects. 8 Q Anything else? 9 A I had the same responsibilities and duties 10 with respect to other contracts since we have 11 not yet staffed fully to divide the load so I i 12 would say that I guess I would work on a priority 13 type basis. (f 14 Q When you say "other contracts," you 15 mean contracts other thea strictly for 1 16 construction? i 17 A Yes. I i 18 Q I am a little confused on your resume. i 19 You have got three lines under the heading for 20 GPU Service Corp. Now, the first line indicates l 21 that from 1975 to the present you were a Director i ) t 22 of Contracts and then there are two succeeding o- [ 23 lines with two different. descriptions, one is l 24' Manager _of Contracts Construction, which l M'T 25' indicates for which you have indicated the iQ-r -l i l l 4

23 1 Haimowitz 2 period 1975 through 1979 and the second is o()g 3 policies and procedures from 1979 to the present. l l 4 Could you explain what the i 5 relationship of those three different positions G is? 7 A Yes. 8 MR. KLINGSBERG: If I could interject, 9 I see there is a typographical error, it 10 should read -- or, rather, an error in the 11 spacing, it should read GPU Service 12 Corporation, Parsippany, New Jersey 1975 13 to present, Director of Contracts Policies () 14 and Procedures '79 to present, Manager of 15 Contracts Ccnstruction, '75 to '79, 16 in other words the '75 to present should be I' 17 on the top line. l 18 -MR. WISE: All right. That clarifies i 19 it. 20 BY MR. WISE: 21 Q I take it you remained in your position g i 22 as Manager of Contracts, Construction until 1979, i 23 is that true? i 24 A That is correct. (^) 25 Q At what time in 1979 did your position N./ L

n. 24 'l Haimowitz 2 change? A' I believe the official change took place in 3 4 late September or early October. 5 Q was the change connected with the 6 creation of GPU Nuclear? 7 A

• No, I don't believe so.

8 Q I take it you-do not work for GPU 9 Nuclear? 10 A That is correct. Well, let me clarify that, 11 if I~may. I am not employed by GPU Nuclear. 12 Q Do you do work for that company? 13 A I have done some work on their behalf. I 14 Q What are your current responsibilities t 15 as a Director of Contractrs, Policies and 4. 16 Procedures at GPU Service? .f 17 A As a Director of Contracts, Policies and l. 18 Procedures, I still have responsibility for major 19 negotiations of new contracts or major negotiations 20 with respect to claim resolution of existing i l 21 contracts. I have a responsibility of an overview I i 22 and coordination with our various Contracts 23 Departments at the operating companies to' review 34 some of their major procurements, to implement -- ) 25 not to implement, but.to insure awareness by l r l t; l ,I

L 2- -u.....m.. 1 Haimowitz' 25 2 these individuals of changing developments which ,f 5 ') 3 could impact contracting and to help them in 4 the procedures, implementation of procedures 5 that they would have to utilize. G Q How do you keep yourself aware of 7 developments in the contracting area? 8 A I have discussions with GPUSC's counsel 9 on some, I am also on. distribution to -- from 10 the technical people who may be awarelof changing 11 regulations or changing requirements. 12 Q Do you read any publications or news-13 letters of any type with respect to contracting 14 generally? 15 A No. 16 Q Do you attempt to keep yourself l 17 informed of the developments in the law such as >1 l 18 decisions by courts? t 19 A No. i '! l l 20 Q You said you have discussions with 21 GPUSC counsel. } 22 Who is that? 23 A My discussions are generally with Mr. I I 24 -Jesse Meer. ~ .,) 25 Q Going back to when you began with I l e i .e

1 Haimowitz 26. ~ 2 GPU Service, after you came with the company ) 3 did you take any steps to famil'iarize yourself 4 'with the existing contracts.that'GPU or its 5 operating subsidiaries had w th third parties? 6 A Yes. 7

• Q

-What did you do in that regard? 8-A I would review the existing contracts 9 we faced with Claims to check on the validity of .10 the claim,- also I would review the existing , 11 centracts to see what changes and benefits we 12 could accrue in new contracts. 13 Q How did you obtain copies of contracts f) 14 you wished'to review at that time? 15 A-I would have copias o'f those contracts ji j 16 brought from what we call a project control-area. 1 j j 17 where contracts on each of the existing projects t 18 were maintained. j-i - 19 Q How would you know where the project' 20 . control area was located-for any particular project? 1-21 A I believe it was in one area subdivided by q 22 the various-projects. I would ask the project i 23 manager to send up a-copy.of a specific contract I l 24' for a specific-project.- ) ~ 25 .Q Was this' area located in'Parsippany?. e i.- i, .t:

1 Haimowitz 27 2 A Yes. 4(~/) 3 Q Taking as a for instance the Three m 4 Mile Island nuclear station, was there a project 1 5 area for that project located in Parsippany? l 6 A There was a project file area for that 7 particular project. 8 Q Who had custody of that? 9 A I don't know what you mean by custody. 'l 10 Q If you wanted something relating to the 11 Three Mile Island project, a particular contract, 12 for instance, what person would you contact in 13 order to get a copy of that? gs) 14 A I believe there were three file girls L 15 or girls working in that area who had responsibility 16 for filing and generally I would ask them or i 17 have the project manager ask for the contract to 18 be brought up. 19 Q So it would be the project manager for 20 the Three Mile Island station? 21 A Yes, or who he may delegate. 22 Q Did you aver have occasion to review 4 23 during this initial peri >d immediately after you 24 came to work for GPU Service' copies of contracts I(~'[ 25 between Babcock & Wilcox and GPU or any of its %J i A

w. s.....

_ _e- - - - - --- -, I Haimowitz 28 2 operating subsidiaries? A ~ 3 THE WITNESS: Could I have that 4 question repeated. 5 (Record read.) 6 A I don't believe so. 7 Q When was the first time, to your recollection, that you recall ever reviewing an 8 9 agreement either proposed or existing between 10 Babcock & Wilcox on the one hand and GPU or 11 any of its subsidiaries on the other? 12 A I believe in 1976. 13 Q What was the occasion for your 14 reviewing a contract at that time? 15 A A massive claim had been filed by B&W 16 under one of these contracts. 17 Q Do you remember which one? I '18 A Yes. It was the' Jersey Central /B&W 3 19 contract for the NSSS. 20 Q At TMI-27 l 21 A At TMI-2. 22 Q After first coming with GPU Service, 23 did you do anything to familiarize yourself with-24 the existing policies and procedures %s they y~, (,) 25 related to contracting? i I

1 Hainowitz 29 2 A Yes. s 3 Q What did you do? 4 A The existing policies and procedures, which 5 included the document that is called the PORD, G 1ed me to believe that perhaps more of a review 7 and a management awareness should be made known 8 prior to the' execution of.a' contract by the 9 Service Corporation or the affiliates of GPU. 10 (continued on following page.) 11 [ 12 13 14 15 i i j 16 f 17 i 18 i 19-y 20 l f I .s=*# 21 g i 22 L l 23 c, f 'f' I - -j. r a -. ~.. .. 4 -____.,.s

l hil I Heitowitz 30 i 2 Q What led you to that conclusion? ph. A Reviewing the PORD.- 3 3 Q Which PORD? l 1 5 A The TMI-2 PORD. l 6 ', l-l Q What led you to review that particular 5-e 1 q' 'I 7 one? r S' '"A At that/ point in ctime, I believe that the s " action)was takin'g place at TMI-2. n D caost i i

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10 C Did,your duties and responsibilities i,- ,,/ 11 'dtifing tae period 1975 thr.ough 1979 include both r. 12 nuclear stations and fossil' stations? 1 'o i i 13 A Yes. / s,,/ l i , -(j 14 Q, r-. Aside from the review of the PORD, I . p. n 15 did you' review anything else"in order to familiarize .i yourself dith the policies a!.d procedures at GPU 16 f ,3 i 17 -[ Seivice concerning contracting? 4 4,: ~ Il 18 / A Yes., e i .l i ~ i I/ - 19 Q' What else did you do? ' 20"'. A I reviewed a filing made with the then, I , 1 ,i, r c /'g u'e s s,f F PC. /,) ,g o 3 / I l ,/ Q ',What is the FPC? oo u ~ A I believe that is the. Federal Power _. Commission -23 / a t that time. l 24 t 1-(, G 25 i Q What filin,g'was that that you reviewed? i '/ 1, / / 1 V# n-l /~ t / -I .r, n 2 r

% e( 2m. l ?. j ' ' s 2 'l' Haimowitz 31 l s m i i 2-A It is a filing made by the operating i i 3 companies which, in. essence, describes, in general, T -4. the-procurement policies and practices of the .,z ?. x< s 5 operating company. g ,s 6-Q Did you reach a'ny conclusions after a\\ 7 reviewing that filing? r s 1 + 8 'THE WITNESS: Could you repeat thbt 9 question? 't i 10 (Record read) \\ 'N 1 11 A No. s 12 Q Did you do anything else to familiarize *j 't s 13 yourself with policies a.ad p: ocedures?' 1 il[ i \\ i1 14 A I don't recall. N' {,. 4 1 15 Q Did you have any discussions with-Mr. 4 ~;- s(. - s l;. ll; Glickman concerning policies and procedures as they 'j ',

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17 related to-contracts? i .\\ I 18 A Yes. 3 -{ \\ - ~ ~ 19 Q What' conversations-did.you have with l 3 o s l 4 '20 him on that subject? s t 21 A We both felt the need to implement within l j g f 22 the-system a policy which ould'compeh or man >date t . \\s !i 1 .certain. reviews prior'to bompanies with'in the 23 ,le'I i, j L' 23 l system making commitments. -] - g-s [ Q Was there anythi,ng' that formed a basis, ~ 25 L a x t g g i N 4 w N { i.. s U q _o i t.; t ..s _._;. ).

d[%.N Y h l i Heimowitz 32 ~3-r j ). <?. I 2 for your feeling that that should be done? /' 3 A Yes. 1 d Q What was it that formed a basis for (- l 1 your feeling? 5., l 6 A It would appear to be a prudent, I guess, i 7 management responsibility and it certainly would ~ T[8 appear prudent for a corporation, for the various 9 functions within a corporation, to know when a 10 commitment is being made and what that commitment, i 11 how itswould impact the corporation, if any, from 12 a financial point of view. 13 MR. KLINGSBERG: Whenever you reach a 14 convenient point. 15 MR. WISE: We can take a break right i l lli now. 17 (tecess) i 6 l 18 MR. WISE: Where were we? d' 19 (Question and answer read) 20 BY MR. WISE: g 21 Q Did you and Mr. Glickman discuss at 22 that time any past instances of contract i i 23 l administration or contract execution that you cw t 24 felt shodhd have received review by hfgher i authorities within the company? { .(_, 25 l I i 4q m. t- . [- - 6_ - - s h-(

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l l

4 1 Hainowitz 33 l q i ,f 2-A I' don't recall, rs i ) 3 Q Do you recall whether there was j l i 4 anything specific in your discussion with Mr. 5 Glickman other than the general desire that you i f 6 have stated to pursue prudent management i, I 7 practices? i '8 In other words, did you discuss any 9 specifics with Mr. Glickman during this 10 conversation or was your conversation limited to 11 a general discussion of the future? i 12 A I believe it was a general discussion of { 13 the future. }r. L 14 Q Prior to coming to GPU Service, had 15 you ever had any experience with contracts in the i l i ' j 16 utility industry? 17 A No. 18 Q Upon coming to GPU Service, did you i i 19 I do anything to familiarize yourself with utility l 20 contracts generally? I I g 21 A I don't recall. 22 Q Upon coming to GPU Service, did you 23 l attempt to locate or review any standard terms and. i t i 24 l conditions that might exist for utility contracts? I i i f f ( A I don't believe so. l 25 i i 1. a f I

.-n - 5-I Haimowitz 34 1 2 Q Did you at any time attempt to put ?v\\ 3 together standard terms and conditions for use i I 4 within GPU? t 5 A Yes. 6 Q When did you first attempt to do i l 7 that? 8 A I believe in 1976. 9 Q What led to that effort? 10 A We felt a need to develop at least certain i f Il provisions that should be in all of our contracts 12 which would give us the necessary protections and 13 that every contract should contain such provisions. (~T ~ 'I 14 Q You say "We felt." 15 Who do you include within that "we"? 16 A I include Mr. Glickman and I include the j i i 17 managers of contracts at the various operating 18 companies. I I 19 Q What was done in this regard by you? I 20 A I held meetings with my counterparts at the 21 operating companies and we had general discussions g 22 on at least those terms that we felt should be i 23 mandatory in every contract. l' ; i 24 Q Who were your counterparts at that i > (~Y l s_) 25 l time in 1976 at the operating companies? l h f-

-n-_.- .... ~. _ ~ _ l l 1 Haicowitz 35 l + 4 I i i i 2 A A Mr. Carl Brooks was the Manager of Contracts /*N .. k l 3 at Jersey Central. Mr. John Mazella was a Manager 4 of Contracts at Metropolitan Edison, and I believe 5 O. J. Bennett was the Manager of Contracts in that .6 time frame at Pennsylvania Electric Company. 7 Q Did anyone else participate in these 8 meetings? ~ I 9 A Yes. 10 Q Who else? 11 A Mr. Lou Russo. 12 Q Who was Mr. Lou Russo? i 13 A That is two names, Lou Russo. 14 Lou Russo is a Manager of Contracts 15 for owner-furnished equipment at the Service j 16 Company. 'l 17 Q Is Mr. Russo a. lawyer, if you know? ( l 18 A He is not a lawyer. i 19 Q. Do you know whether Mr. Brooks, Mr. 20 Mazella, or Mr. Bennett are lawyers? i I t l i 21 A. I believe John Mazella is a lawyer. Carl 22 Brooks is not an attorney, nor -- nor was O. J. I 23 l Bennett. j ~ l 24 l Q To whom did Mr. Mazella r'eport at that () 25 time, if you.know? /

.- -..-...:. ~. 1 Haimowitz' 36 r i i 2 A I think he reported to Jim Hulsebus. -(y 3 Q Was Mr. Hulsebus employed by Met Ed? .] 4 A At that time. 5 Q Do you know what his position was? 6 A Acting Director of Materials Management. 7 Q Do you know whether Mr. Wilson in 8 1976 had anything to do with contracting at 9 Met Ed, that is John Wilson? 10 A I don't know. 11 Q Have you ever met Mr. Wilson? 12 A Yes. I 13 Q Do you know what his position was with { 40 11 Met Ed in 1976? 15 A I believe he was an attorney in~the Legal i 16 Department. I i 17 Q Do you know-what the relationship 18 between-the Legal Depart *1ent for which Mr.-Wilson a i 19 worked was with the department that Mr. Mazella 20 worked for back in 19767 l 4.: 21 A I don't know. { 22 Q During your experience from 1975 to 23 1979, did Mr. Wilson ever' participate'in the ) 1 I t review, negotiation or execution of contracts by-24 i the Metropolitan Edison Company? i.- A 25 I 1 L: f, ' t h , ~- . ~_ r ,m.- - ~. - _,. _.

u ~~~, il Haimowitz' 37 i 2 A I don't know. I N 3-Q During the period 1975 through 1979, ud 4 were you aware of who was responsible for the 5 review, negotiation and execution of contracts at 6 the operating subsidiaries? 7-A Yes. 8 Q During that period, who was responsible 9 for the review, negotiation and execution of 10 contracts.for the Metropolitan Edison Company? 11 A John Mazella had that responsibility for the 12 period that he served as the Manager of Contracts. 13 Q Do you know approximately what period li( ) 14 Mr. Mazella served in that capacity? 15 A I believe from 1976 through 1979. 16 Q Do you know ~who preceded Mr. Mazella i I 17 in that position? } 18 A I do not. i 10 Q Do you know who was responsible for l 20 the review, negotiation and execution'of contracts l 21 during 1975 and 1976 up to the time that Mr. 22 Mazella assumed that responsibility? 23 A No. j i 24 Q Do you know whether-the M_etropolitan i 25 i Edison' Company entered into any. contracts during i I e ~ l p - I l.

_ =. h--~~..*~w__.~_,,, f. I Haimowitz 38 2 1975 and 1976 up to the time that Mr..Mazella took /~ 3 over his responsibilities? 4 THE WITNESS: Could you read back that I 5 question, please? i f 6 (Record read) 7 A I don't recall. I 8 Q At the time you joined GPU Service, 9 did you make any inquiries to find out who had 10 responsibility at the operating companies for 11 review, negotiation and execution of contracts? 12 A I don't recall. 13 Q In your discussions with Mr. Glickman j-v 14 concerning the need to implement a system to 15 mandate review before the operating companies I i its could undertake commitments,=did you and Mr. I 17 Glickman discuss at all what had been the practice t }i 18 at operating companies in that regard? 19 A I have a problem with that question. 20 Q Let me back up and just. simply put it I, ) 21 to.you this way, Mr. Haimowitz: I understand from 22 your testimony that after Mr. Mazella came to Met i 23 -Ed in 1976.he was the in ividual at Met Ed who 24 l had primary responsibility for review and \\ ('~'\\ '~# 25 i negotiation'of contracts on Met Ed's behalf. iI 1 -e

o -~w .n....- 3 l l Ha.mowftz-39 e ). f-i 2 What I want to know is what information l' /~'\\ l \\~/' 3 you had as to who was doing that function prior to f 4 the time that Mr. Mazella came into that post in 5 1976. G A I have no information or remembrance of who 7 performed that function. 8 Q Do you have any information today as I 9 to any practice or procedures that were followed 10 at Metropolitan Edison Company regarding contracting 11 prior to Mr. Mazella coming on board with that I I 12 company in 19767 13 A No. 14 Q When you came to GPU Service in 1975, 15 did you do anything to familiarize yourself with I 1(i any trade practices or customs within the industry f 17 that might exist? i 18 A No. 19 Q Did you ever do anything in that l i 20 regard? l 21 A No. 22 Q Do you have any knowledge today as 23 to any trade practices or customs within the e 24 utility industry generally concerning contracting? (). 5 25 A No. 1 l l i i 1

m. m, [ I- ~ '4 0 i j .1 Haimowitz 2 . Q At the time you came to GPU Service, ( 3 did you do anything to familiarize yourself with i 4 any policies that might exist concerning insurance 5 for property. damage? 6 MR. KLINGSBERG: Policies? 7 MR. WISE: I'm sorry, " policies" is 8 a poor word in that particular c o n t o::t. 9 Q Anything existing internal 10 MR. WISE: Let me withdraw it. It 11 will be easier to rephrase it another way. 12 Q At the time you came to GPU Service, 13 did you do anything to familiarize yourself with the 14 insurance coverages that GPU or its subsidiaries I 15 maintained? i i i 16 A No. 17 Q Have you ever done anything to I j 18 familiarize yourself with GPU insurance coverages? 1 19 And by GPU, I am including the operating 20 subsidiaries. t 21 THE WITNESS: Could that question be 22 repeated, please? l (Record read). 23 f l 24 A No. [~). 25 4 Q Are you familiar today with what j -x_- i a t l

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1 Hainowitz-41 4

.2 coverages GPU or its subsidiaries have? 3 A No. 4 Q Are you familiar with the nuclear 1 S property damage insurance coverage that GPU or i 1 l 6-its operating subsidiaries hr.ve? L 7 A Yes. j 8 Q When did you.first gain familiarity 9 with that particular type of insurance?- 10 A After the TMI-2 accident. - 11 Q What did you learn about it at that 12 time? i 13 A I learned that in our new contracts we had 14 to be very careful since there was no assurance 1 l 15 that we could give this particular coverage to l l 16 - contractors performing work at Three Mile Island. i 17 MR. KLINGSBERG: Can I have that l! 18 question and answer back, please? ? 19 (Record' read) I I 90 THE WITNESS: Can I add? 21 A In those instances where they would request g 22 it from us. I 23 Q How did you learn that? i l 24 A-From our Manager of Insurance. I F Q Who was'that? f, ) 25 I L I i s'

L , m.. e i 1 Haicowitz 42 { i l [ ~; 2 A Harry Gerety, i' 3 Q What did he say on that subject? I. 4 A He alerted me to the fact that the property i 1 5 damage insurance may not be attainable. j G Q Is that the end of your answer? 7 A Yes. 8 Q He said it might not be obtainable at 9 all? 10 A Yes. 11 Q And that would mean that GPU might 12 not have any coverage itself? 13 A That is correct. l (~} x_/ i 14 Q Do you know whether that property j i 15 damage insurance has, in fact, been obtained since i 16 the accident? l I 17 A No. 18 Q Other than what you just testified to, l 19 have you had any other occasion to become familiar 20 with the property damage insurance coverage that ) 21 GPU maintains? 22 A No. 23 Q Have you had any responsibility for i 24 the administration of the claims that GPU may have j ,_ s i Il l made or been making with respect to the accident 25 q l / Il

3 1 I Haimowitz 43 f i i 2 at Three Mile Island, that is the claims under the ) 3 insurance policies? 4 A No. S Q Is that something handled by Mr. 6 Gerety, to your knowledge? 7 A I believe so. 8 Q Upon coming to GPU Service, did you 9 make any attempt to familiarize yourself with the 10 terms and conditions applicable to contracts for 11 nuclear facilities as opposed to contracts for 12 fossil facilities? 13 A No. () 14 Q Did you ever become aware at any 15 time that there were terms and conditions applicable i 16 to nuclear facilities that were not applicable to ,I II fossil facilities? IO A Yes. 19 Q When did you first become aware of i i l 20 that? i - l 21 A I believe I first became aware of that at the I 22 time of a change in regulations with respect to t 23 10 CFR.21 which mandated its appearance in 24 I contracts which are safety related or.provided for t. i i in our nuclear contracts. 25 i safety-related items ('/) l .i -w l l -w- ~ ,w-

l I Hainowitz 44 1 f 2 Q Do you know about when that was? r') b 3 A No. l Q How did that come to your attention? -5 A I was alerted by a member of our Quality 6 Assurance and Safety Department that a new 7 regulation or a changed regulation mandated the 8 reporting of any incident of a safety-related 9 item. 10 Based upon that, we alerted all of the 11 cognizant managers of contracts to be aware of this 12 and to utilize it in their particular contracts 13 that have relevance to this regulation. I I 14 Q Was any standard contract term l; 15 drafted for use within the GPU organization? I t 16 A I believe I drafted a provision and i l 17 recommended its insertion in nuclear contracts when 18 applicable. 19 Q Was the t e rs.~ limited to 10 CFR.21 or l l n i 20 were other subjects covered in the draft terms that l 21 you prepared? 22 A The term that I am referring to is strictly l 23 related to 10 CFR.21. 24 Q Did you ever draft any og,her I f recommended terms and conditions that would be } 25 t n l}' ~ ---n e

q-i i I Haimowitz 45 l 4 l 2 applicable to a nuclear facility? J 3 A I don't believe so. 4 Q Specifically, did you ever draft any 5 terms or conditions coverning indemnification for l 6' a nuclear facility or at nuclear facilities? f i 7 A 'No. I 8 Q Did you ever draft any terms or 9 conditions regarding consequential damages as 10 they related to nuclear facilities? I 11 A No. 12 Q Did you ever draft any terms or i 13 conditions relating to property damage at nuclear O (_) 14 facilities? 1 l 15 A No. { 16 Q Following the accident at Three Mile ~ 17 Island, were you ever asked to participate in any i' 18 internal investigation conducted within GPU i 19 regarding the accident? I 20 A No. f g 21 Q Do you know whether GPU or any'of its 22 operating subsidiaries conducted any internal investigation with respect to.the accident? 23 i' i 34 A I don't know. ~ f ') 25 i Q Were you ever asked to supply papers + l j .s/ i i l 1 .I A. 4.

m ....w~._ i 1 'Haimowitz 46 l l 3 2 or documents to anyone investigating the Three ( J' s 3 Mile Island accident? 4 A Yes. 5 Q When were you asked to do that? l 6 A I believe sometime in 1979. 7 Q What were you asked to do? 8 A I received a request to attempt to locate 9 any files regarding the selection of B&W for a 10 contract award of the nuclear steam supply system 11 for TMI-2. 12 Q What did you do in response to that 13 request? O 14 A I forwarded the request to our Corporate l 15 Secretary. 16 Q From whom had the request come? h I 17 A I believe it was for the Presidential I 18 Commission investigating the accident. i 19 Q Did they contact you directly? [ 20 A No. t ) 21 Q Who contacted you? 22 A I believe John Wilson. l-I 23 l Q What did you do in response to Mr. 24 l Wilson's~ request? I, I '[N ,I j ! %s 25 e A I consulted with our Corporate Secretary. j l l t ') i i I

m m.~.- _.z. ~ -- l i 1 Hai nowi tz 47 l l I 2 Q What happened? (3 NJ 3 A She was able to locate documents, I think, 4 from minutes of Board meetings which I then f f 5 transmitted.to John Wilson. i l 6 Q Let me show you what has been marked l 7 as Defendants' Exhibit 6 for identification, which i 8 is a memorandum. It appears to be a memorandum 9 from you to Mr. Wilson dated July 23, 1979. 10 (Handing document to the witness) 11 Ih) y.o u recognize Exhibit 67 i l 12 A Yes. 13 Q Did you write that? i 14 A Yes. I 15 Q Attached to the memorandum are the 16 materials which appear to be described in it. I j 17 Will you take a look, briefly, at those following f 18 materials. 19 Are those'the materials that you l I 20 transmitted with your memorandum to Mr. Wilson? 'f 21 A It would appear to be. ) 22 Q You have no rea,on to believe they 23 are not? 3 i A I have no reason to believe they are not. 24' j l 25 l Q Were those the only materials that j 4.- i i i l 1 n i

~..; w. =.. .w,-v= q... ..w. 7 I Haimowitz 48 i 2-were located in response to Mr. Wilson's request? I\\#' 3 A Yes. Q Were there other materials that you 5 determined were not required to be sent to Mr. (; Wilson? 7 A No. 8 Q Did you participate in the Corporate. 9 Secretary's search for resporsive materials? 10 A No. 11 Q To the best of your knowledge, are 12 the materials attached to the memorandum and i 13 included within Exhibit 6 the only materials that A 14 the Corporate Secretary was'able to find that were l 15 responsive to the request by Mr. Wilson? l l j 16 A To the best of my knowledge, the answer is l j l'7 yes. i 18 Q Do you know of any other files' maintained, .I t j 19 within GPU or any of its operating subsidiaries 20 that bear upon the reasons why B&W was selected _as 21 the NSSS supplier for Three Mile Island 1 or Three I I i i 22 Mile Island 27 l I 23 A I have no knowledge of that. 9 f[ 24 Q Following the accident,have you done 25 anything to review the contracting policies and l t l, 1-i 1. ~ e

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l~ ~ 1 Haimowitz 49 I [ ~ 2 procedures at GPU and its operating companies I 3 specifically.in light of the accident? 4 A No. 5 Q Since the accident, to your knowledge, G has anyone reviewed the contractual protection i l I 7 afforded to GPU under its contracts at nuclear 8 8 stations? 9 THE WITNESS: Could.that question 10 be repeated, please? 11 (Record read) 12 MR. KLINGSBERG: You mean in the 13 company? i. ) 14 MR. WISE: Within the company, yes. j 15 A contracts continually ~ undergo review. Each 16 contract is reviewed, you know, on its own for its t-1 i 17 merits and in that' review the liabilities-or the i 18 protections are continually reviewed. I 19 MR. KLINGSBERG: I don't think that I t I 20 was the question. 'I f 21 .Can we have the question back, please? l 22 (Record read) .'i-l . 23 BY.MR. WISE: - 24 l Q Have you and Mr. Glickman.had any i s I

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l 25 occasion to discuss whether changes-should be- ) 1 I' l .i e

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, - ~ 1 1 Haizowitz 50 i -2 sought in the terms and conditions in future 3 contracts in order to afford protection to GPU { 4 in the event of a nuclear accident? l 5 A I recall no such conversations. j i 6 Q Have you had any discussions with anyone [ I i 7 concerning the need for protection for GPU in future l 8 contracts regarding nuclear stations? 9 MR. KLINGSBERG: Other than counsel 10 in the course of seeking legal advice, you Il can answer that. 12 A I am not aware of any. 13 Q To your knowledge, has GPU Service j Q-l \\ 14 . sought legal advice conc.rniry protection in the i 15 event of a nuclear accident? l 16 MR. KLINGSBERG: I will object to the i 17 question. I8 MR. WISE: Are you invoking the ,i 19 attorney-client privilege? 20 MR. KLINGSBERG: Yes. i i e 21 MR. WISE: We had reserved during Mr. I L i 22 Glickman's deposition the question of the i i 23 extent.of the privilege. I don't.know i l ~ 24 whether you have reached a conclusion and i i t I [')T ' t y_ 25 l this represents an ongoing policy or whether l l t l l

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7 [ l Haimowitz 51 l 1 I i 1 2 you are simply wanting to preserve the 3 reservation you made the last time. 1 MR. KLINGSBERG: Well, let's go off 5 the record. G (Discussion off the record.) i 7 MR. WISE: While off the record, we 8 discussed the attorney-client objection and 9 based on our discussion, I will withdraw the 10 last question. Il BY MR. WISE: 12 Q Has GPU Service, to your knowledge, 13-entered into any contracts with Babcock & Wilcox ) 14 since the Three Mile Island accident? l l 15 A Yes. l I l IG Q What contracts did it enter into? I -)i 17 A The Service Company entered into a master 18 services agreement with B&W to provide services on -l t a task basis at Three Mile. Island Unit No. 2. 19 \\ 20 MR. KLINGSBERG: I just want to note 21 for the record that I think there is some' i O 22 kind of an agreement, terms of which I cannot i 23 repeat verbatim, which indicates that.these e l 24 post-accident contracts will not have any I' i /~T 25' i effect on the issues ~ in the' current V 1 1;- ~

k_ _... y 5 1 Haimowitz 52 2 litigation, but whatever objection we would i l a q, / 3 l have to relevance based on that I assume i f 4 can be preserved for trial. 5 MR. WISE: I am not familiar with that. i l ii Is that an agreement that, to your knowledge, l l. 7 'is between the companies or was that an I 8 agreement that was made with Mr. Fiske or i l' 9 someone from our office? 10 MR. KLINGSBERG: That was an agreement I 11 between the companies. 12 MR. WISE: It may have occurred prior 13 to the time we got into the case. I am not l l r~m l ( ) 14 familiar with it, but subject to whatever 15 agreement may exist, let me proceed with t t 16 l that line of questioning, and I will have to l 17 find out whether there is and check with I 18 our own people. 19 MR. KLINGSBERG: I will be happy to If 20 get you a copy of it. I think it is a 21 letter agreement. l 22 MR. WISE: Yes, and what the extent of that agreement was. 23 l 24 BY MR. WISE: 1 l ^] 25 Q Mr. Haimowitz, did you personally f f

m..s 3m f t i I l' Haimowitz 53 i i participate in the post-accident master services I {%) contract with B&W, the negotiation of it? y A Yes. ,3 I Q Who else participated in that? 5 I l A George Kulynych from B&W. I don't recall 6 the names of the other B&W participants. 7 Q What agreements, to your knowledge, g were reached concerning the post-accident contract g between B&W and GPU regarding its use in any 10 potential lawsuit? y, A The execution of that contract was predicated 12 upon an agreement that this matter or any other or (~J) subsequent matters would not be used by either s 14 I party with respect to the Three Mile Island la. accident. j g f i Q Did you participate in the negotiation 1 f that agreement? 18 l 5 i g l A Yes. l Q Who else participated in the 1 negotiation of that? l 21 i ) A George Kulynych of B&W and some other B&W personnel whose names I don't recall. l' g Q To-the best of your knowladge, was i that embodied in some writing? O. 23 (i 1 i t i- ~

-w.._-,. i -1 Haimowitz 54

)

A Yes. ( ) kJ Q What type of a writing? 3 4 A In a letter forwaried to B&W which said j 5 that the execution of the agreement would be 6 . predicated upon that. I 'Q Did B&W acknowledge that letter in 7 I 8 any way in writing? I 9 A I believe so, but it was the intent of the 10 Parties during all the negotiations that that would 11 be, you know, the rules followed. 12 Q Are you familiar with something called l l 13 the LOSA at GPU Service? l r~\\ (-) 14 A Yes. I 15 Q When did you first become familiar 16 with that procedure? l l 17 A In 1975. [ 18 Q What were the circumstances under i' 19 which you came to know of it? I A I Participated in the review of that document 20 i i gg prior to its publication. f' ) I 22 Q Did you help draft it? 23 A Yes. i I' j 34 Q Under the LOSA, what was-your role, .l [) 25 l Personally, with respect to contracts negotiated .i i i 9,'

y-r- 'l-Haimowitz. 55 2 by the operating subsidiaries? t 3 A-My role consisted of acting in a review 4 -capacity for certain of the' operating company I 5 contracts that. required an overview by GPUSC. 6 Q Would that include service contracts -- l i 7 A Yes. 8 Q -- where it was not possible to 'O determine what the total' dollar value of a particular 4 10 contract, long-term contract, I should say, would 11 be, how was it determined under the LOSA whether 12 your review'was necessary? 13 A The LOSA policy does not. require a review -14 if no firm commitment is made. i 15 From a courtesy point of~ view, I may j l 16 be given the opportunity to review such, what you 17 call long-term contracts. -[ 18 Q Do you recall whether during the i. 19 period 1975 to 1979 whether by reason of requirement 1 [ 20 under the LOSA or by reason of courtesy you were 21 given the opportunity to review any contracts g 22 between Metropolitan Ediaon and Babcock & Wilcox? f "23 l A Yes. l l' l Q How many such occasions ob you recall? 24 i l ( A I recall one occasion. f ( ). 25 l l

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i 1 Heimowitz 56 I I 2 Q when was that? b \\/ 3-A I believe in 1977. 4 Q Do you recall any occasion in 1975 5 when you were asked to review a training contract, G proposed training contract, between B&W and Met Ed? 7 A 'I don't recall that review. 8 Q When you did exercise a review function, 9 whether again by reason cf LOSA requirement or by 10 reason of courtesy, what did your review include? 11 A The review generally included assurance that 12 the documentation accompanying the commitment be l 13 complete and a review of-the terms and conditions 14 which would be authorized in the commitment. 15 Q What documentation was required in t i IG order for it to be complete as you used that+ term? i 17 A The documentation should consist of the i, 18 comparison of bids or l'f sole source a justification } 19 of the sole source. It should include to some degree i 20 an analysis of the costs if the procurement was 1 e 21 sole source and should have a summary of the 22 pro, posed transaction which would~ set forth the l 23 i relevant facts of the transaction under~ review. Q Was there any format that.such a 24 i i l.(j 25 summary was supposed to follow within the GPU l l h

m _, I Haimowitz 57 i 1 2 system? O 3 A I am not clear on that question. 4 Q Both you and Mr. Glickman have 5 mentioned a summary of the proposed transaction 6 in connection with the review process. 7 My question is 'hether the contents 8 of the summary were ever defined within GPU or 9 was the writer of the summary pretty much free to 10 write whatever format he thought was appropriate? 11 A There was no specified format. 12 Q Were there any particular items that 13 were expected by those within GPU to be included l i r-) k-14 in the summary such as an evaluation of the risk l 15 of lost or something of that nature? I } IG A There was no firm requirements or specificity 17 in any of the formats. l { 18 Q Do you recall ever reviewing any 19 summaries that included discussion of the risk i l 20 for loss in the event of a nuclear accident? i 21 A I don't recall any such summarization. i I 22 Q Who usually prepared the summaries i 23 I with respect to contracts by the operating i 24 subsidiaries which were submitted to 7bu for I 25 review? And I am not seeking, necessarily, the () I i i i .1

wum acs.., .. a.. a. _ - e I t f 1 Haimowitz 58 2 name of the man, but the particular title or ? T 3 position that would be responsible for doing that. 4 A Generally, the cognizant contracts 5 administrator or negotiator would furnish that. i 6 Q Would that be someone like Mr. Mazella 7 for Met Ed or would it be someone on the business 8 side? 9 A I don't understand that. 10 Q Mr. Mazella, as I understand it, is 11 an attorney in the Contracts Department or whatever t 12 the appropriate title is at Met E d. Presumably with I i 13 respect to each of-these contracts, there were j n l \\' "1 also operating people whc. were familiar with the 14 I 15 technical side of it, i j i I My qu[stion 16 now is would the summary 17 be prepared by somebody such as Mr. Mazella, who j 1 18 was a lawyer and in the Contracts Department, or i 19 would it be prepared by someone on the technical I i 20 side who'was going to use the goods or services t ./ 21 that the contract covered. -23 A It was prepared by a member of the Contracts 23 Department. I I i -_c 24 l Q Do:pou recall whether thal -I t l k 25 l documentation, tha t.c yo'u{'h ave just outlined, was i. _,-/ l - / t ,j

...a f -L t i Hcicowitz 59 j i i 2 complete for the 1977 contract with B&W that you i (, 3 recall? s 4 A I don't recall it all the documentation was f 5 available with that package. j ,s f: G Q Did you have any practice in 1977 7 ,regarding what would happen if a contract was 8 submitted for your review without complete 9 documentation? 10 A Yes. 11 Q What was your practice? 12 A In general, I commitnicate with the forwarder i l 13 of the package and either insured that the 14 documentation was available or that it be prepared 15 for his own records. i l 16 Q Do you have any recollection of doing i i 17 that with respect to the'1977 B&W contract? 18 A I don't recall anything about the ).- ~ .. L t 19 documentation. 1 m f i 00 Q Did you maintain a file with respect s t 21 to contracts that were submitted No you for review? l' h l 22 A I did not maintain"such a file. ( 23 Q What was your practice' for maintaining 1 l 24 files of contracts entered into by the, operating j i: 4 s l'$ - 25 subsidiaries, if you had any practice at dil? [, i s '. 3 q l t b i if 5 g i 4 4 ) -{ ' N,* s 1 _s j k j L.

h==~ m 1 Heimowitz 60 - y 2 A We kept no copies of those contracts in our -A v (f files in Parsippany. 3 l 4 Q What would you do with the papers l 5 once you had reviewed a proposed agreement? Would i i G you. throw them out or send them back to the l l. y operating subsidiary or what? d A The contract would be returned to the 9 operating facility with a review sheet evidencing 10 that it had gone through the normal review cycle 11 as required by LOSA. L2 Q During the period 1975 through 1979, l3 where would the contract documentation be kept l s [~) N'" i .x_/ -14 i' _for contracts entered into by Metropolitan Edison? ) .i t 15 A I have no way of knowing the answer to that. x-Q If you wanted to get your hands on i 1G i 17 whatever documentation there was surrounding the k 18 1977 B&W contract that Met Ed entered into, [4 i ( 10 y where would you go to get it? Would you go to j I f 20 Reading or Parsippany or Three Mile Island or I i c 21 where?; ). t 22 A I would call somebody at the Met,ropolitan i 23 Edison Contracts Department and ask for the i 3 24 appropriate documentation. s ~ i I )s 25 Q So that to the best of your knowledge, s, i ( t.

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._._......_.e--- 1 Haluowitz 61 l 2 the documentation for Met Ed contracts should be f) V 3 found in Reading? 4 A I don't know if ti.at's what I said. I 5 don't specifically or -- or know where that 6 documentation would be kept. I do know if I needed 7 something, I would call the Met Ed people. 8 Q In any event, you would expect them 9 to knew where it was kept? .t 10 A Yes. 11 Q You also said that your review would 12 cover the terms and conditions to be used in 13 the contract. /" 14 Would you look at all of the terms 15 .and conditions? 16 A No. 17 Q What terms and conditions was it your 18 practice to concentrate on? 1 -) 19 A I would concentrate on the termination for l 20 convenience, a suspension of work, a force 21 majeure provision, a changes article, warranty } 22 and other significant terms and conditions. ,l 23 Q Which other t'erms and conditions did ~ 24 you consider significant?' - ) 25 A They vary,by type af contract.

1 Haimowitz 62 2 Q Let's take a contract of the type f( 3 that Met Ed entered into with D&W in 1977 4 involving a nuclear facility. 5 MR. KLINGSBERG: I think it's not G fair to examine the witness on the terms 7 of a specific contract without showing him 8 the contract. 9 MR. WISE: I think we can do that. 10 I don't have any objection to showing him 11 the 1977 contract and I think he is familiar 12 with it and he sajd it varied by type of 13 contract, and I was just trying to define a () 14 type of contract g en eitally. If that j 15 doesn't help him answer the question, I will i 16 ask another question. l 17 MR. KLINGSBERG If the witness can i i 18 answer the question, that's fine, but if l 19 the witness feels that in order to fairly 20 and completely answer a question relating i 21 to a specific contract, he ought to look at I l ' 22 the contract and I think he ought to be 23 allowed to do that., 24 MR. WISE: My question do.psn't relate h-s 25 to the specific contract. Let me rephrase b

L 1 Haimowitz 63 2 it. p) 3 BY MR. WISE: q, 4 Q You have listed, as I wrote them 5 'down, five types of terms that you concentrated 6 on, and you said that there were other terms 7 that you concentrated on that varied by the type i 8 of contract. 9 Giving you as a type of contract a 10 service contract relati..g te a nuclear facility, 11 what other terms and conditions would you consider 12 significant in such a contract? 13 A I really think it would be more appropriate () 14 because every type of service contract can 15 differ, that if a document were shown to me and i 16 I can go through that document, I then think I i 17 would be more able to give you those provisions, 18 not all contracts have the same terms and condi-19 tions. 20 Q We will come to the specific contracts 21 fairly soon. 22 Let me ask you this, though: In 23 general, did you consider it part of your review i 24 to check on the exposure of GPU to lq,ss in the i 25 event of an accident causing damage at the -) 5/ i 1 ) i b

-- = 1 Haimowitz 64 2 facility? . (~'% - 3, / 3 THE WITNESS: Could I have that 4 question repeated. 5 (Record read.) 6 A It could be a relevant clause. 7 Q What factors would determine whether 8 it was relevant or not? 9 JL The type of contract, what provision, if 10 any, was in the contract, but certainly if it 11 appeared in there or discussions about such a 12 provision, it would be looked at. 13 Q What purpose would you have in looking 14 at such a provision if one appeared in the 15 contract? 1 16 A If one appeared in the contract, it could 1

• 17 be significant as a -- as a term and condition.

.18 Q Did you ever attampt to evaluate 1 19 whether GPU would be exposed to loss-in the event i 1. 20 of a nuclear accident in connection with-your l I 21 review of any contract? l' I 22 A Yes. l: 23 Q-Was any such contract a contract l l C l 24 regarding a nuclear facility? l l' (h-)/ - .25 (Continued on following page.) L. i h n

. _. -.~.-, -... ~ 1 Holcowitz 65 2 A Yes. k-) 3 Q Such contracts regarding the Three 4 Mile Island nuclear station? 5 A Yes. G Q Did you review contracts for any 7 other nuclear stations? 8 A Yes. 9 Q My understanding is that GPU and 10 its operating subsidiaries, and I can't tell you 11 which owns which, but that they also operate 12 a facility at Oyster Creek, is that correct? 13 A Yes. (m (_) 14 Q And that's a nuclear facility? i 15 A Yes. i 16 Q And it's also my understanding that 17 there were negotiations sometime in the 1970's 1 i 18 about a proposed nuclear facility at Forked River. 1 19 Are you familiar'with that? 20 A Yes. 21 Q-Did you have any participation in I 22 those discussions or negotiations? 23 A Yes. 24 Q Are you aware that a contract was L /T 25_ entered into with Combustion Engineering for bJ i

i Haimowitz 66 2 the supply of a nuclear steam supply system at that n -( ) 3 proposed facility? v 4 A Yes. -5 Q Did you ever have any opportunity G to review that contract? 7 A Yes. 8 Q Did you have an opportunity to review 9 any contacts regarding a facility at Saxton, 10 Pennsylvania? 11 A No. 12 Q Do you know whether GPU or any of 13 its operating subsidiaries ever maintained a (~) 14 nuclear facility near Saxton, Pennsylvania? %j 15 A Yes. j 16 Q Did they? i 17 A Yes. l 18 Q How did you come - to know of that? 19 A I met the President of the Saxton Corporation l 20 who was a Project Manager within GPU. .21 Q Do you know when that facility was I 22 closed? 23 A~ No. 24 Q Did you'ever review any pre-existing 25 contracts regarding that nuclear station? ' k.d _ t

1 Haimowitz 67 2-A Which nuclear station? () 3 Q saxton? 4 A No. 5 Q Do you know who the nuclear steam 6 system supplier was for that facility? 7 'A No. 8 Q Do you know whether the contract with 9 Combustion Engineering relating to Forked River 10 had any provisions regarding who would bear the 11 risk of loss in the event of a nuclear accident 12 at that facility? 13 A I have no knowledge of that provision. ) 14 Q Did you ever have any discussions with 15 anyone concerning who would bear the risk of 16 loss in the event of a nuclear accident at Forked l I 17 River under the contract that GPU entered into i 1 l 18 with Combustion Engineering? I i' f 19 MR. KLINGSBERG: Again, I assume that il-20 means within the company? I 21 MR. WISE: Anywhare. I want to know I 22 whether this witness has ever discussed i [. with anyone risk of loss as it related to 23 24 the contract with Combustion Engineering for . 1 .3 - 25 Forked River. 7 A-) 1 t i I 1 y 1 1

~, % ~ u.. -.- - I Heimowitz-68 2 MR. KLINGSBERG: I will instruct the k/ 3 witness to answer that other than in regard m 4 to discussions with counsel in the course 5 of seeking legal a?vice. 6 MR. WISE: I will accept that 7 limitation. 8 A No. 9 Q Do you know whether any of the contracts 10 that you reviewed regarding the provision of 11 goods or services at GPU's Oyster Creek facility 12 contained clauses regarding the risk of loss in 13 the event of a nuclear accident at that facility? ry sg/ 14 MR. KLINGSBERG Can I have that 15 question read back, please. j 16 (Record read.) l 17 A I don't recall. I 18 Q Do you recall reviewing any contacts I 19 between 1975 and 1978 regarding the provision of 20 goods and services for the Oyster Creek facility? i 21 A Yes. I 22 Q What contract or contracts were 23 those? 24 A I believe I reviewed a contract.with Riggs-25 Distler, who would provide certain' construction L t l L .._ =

..: ua.. - _

- w --- w -- -~ ~. 1 -Haimowitz 69 2 management services during an outage for Jersey 3 Central. 4 Q Were there any other contracts that 5 you can recall regardin, the t facility? 6 A Yes. .7 Q What contract was that? 8 A A contract with General Electric. I 9-MR. KLINGSBERG: Off the record. 10 (Discussion off the record.) 11 (whereupon, at 12:45 p.m., a lunch 12 recess was taken.) 13 n ?( 14 i 15 -i i 16 1 17 18 i 19 20 21' 22 i 23 5 J.' i. 24 l i(O 25 - \\.) - I-i n

.. __ _...... ~ 1-70 2 APTERNOON SESSION 3 1:54 p.m. 4 000 5 M I L T O N HAI M OW I T Z having 6 been previously duly sworn, resumed and 7 testified further as follows: 8 MR. WISE: Will you please repeat the 9 last question and answer. 10-(Record read.) 11 EXAMINATION (Continued) 12 BY MR. WISE: 13 Q Do you recall tha goods or services () 14 that were to be covered by that contract? 15 A I believe so. 16 Q What were they? j 17 A General Electric was to provide certain l~ i 18 or to assume certain maintenance responsibilities I 19 at the Oyster Creek plant during a forthcoming I l 20 outage. I 21 Q 'Did that contract contain any clauses t 22 covering the risk of loss in the event of a 23 nuclear accident? i 24. A I don't remember. i \\ l..',.)'Y 25 Q Did that contract contain any clauses I

m 1 Haimowitz 71 2 regarding insurance for property damage? (') 3 A I don't remember, v 4 Q Are you familiar with the Price 5 Anderson Act? G A Yes. 7 Q How did you gain your familiarity 8 with it? 9 A I believe in discussions with our Manager 10 of Insurance. 11 Q Have you ever discussed it in the 12 context of any particular contract negotiation? 13 A Yes. 14 Q When was the first time that you can 15 recall that that particular question came up 'I 16 in contact negotiations? I f 17 A About the time that I was made aware of I 18 litigation with respect to the validity of the I 19 Act. l 20 Q Do you recall about when that was? i 21 A I believe in 1977 or thereabouts. 22 Q What came to your attention concerning 23 the validity of the Act?, i 24 A It was mentioned to me that thq. legality of i 25 the Act or a portion thereof was being determined u3 .i i-i i-

u me ~_. -. 1 Haimowitz 72 2 by the Supreme Court. 7(_/ 3 Q Y u testified that this was in 4 connection with a contract negotiation. 5 What contract was under negotiation 6 at that time? 7 A I don't believe I testified that that was 8 in a contract negotiation. 9 Q I am sorry, I may have misunderstood 10 you. 11 I had asked you the question earlier 12 whether you had ever discussed Price Anderson 13 in the context of negotiation over any particular f^) ( 14 contract. 15 Do you recall that ever being a [ 16 subject of discussion with respect to a specific 17 contract? 18 A I don't remembmer a specific contract. i 19 Q You don't recall ever personally 20 being involved in a negotiation over a term 21 concerning Price Anderson coverage? 22 A I do recall that. 23 Q What instance was that? 24 A That was in a contract that we had with i l! [~) 25 Stone & Webster. %). -f l::

1 Haimowitz 73 2 Q What was the subject of that contract? (_s) 3 A We were interested in contracting with 4 Stone & Webster for them to provide construction 5 management services on our behalf at Forked 6 River. 7 Q When was that? 4 8 A I believe in 1976 or early '77. 9 Q What discussion occurred concerning 10 Price Anderson coverage? 11 A Stone & Webster requested indemnification, t 12 in fact, required indemnification under the 13 Price Anderson Act and also insisted that if p) 4 14 Price Anderson was deemed invalid or was not 15 available, that the owners of Forked River would 16 have to provide replacement insurance of a similar 1 17 nature. 18 Q When did this request or bargaining 19 position on behalf of Stone & Webster come to your i 20 attention? i' 21 A During negotiations. 22, Q What, if anything, did you say in ? 23 response.to their - reques t.? I

• i 24 A

We -- i l ' ! ~' / 25 MR. KLINGSBERG: I don't know what the (_)' J l i!'

..._.w. y - --- = I Haimowitz 74 2 fact is, but I don't think it's been 3 established that Mr. Haimowitz was in 4 negotiations when somebody from Stone & 5 Webster said this to him. Maybe that is 6 so, but it is not in the record yet. 7 MR. WISE: I thought that was the 8 import of my previous question when I asked 9 how the issue came up. i 10 MR. KLINGSBERG: All right. 11 BY MR. WISE: 12 Q How did the issue come up since ~' 13 your counsel has raised it? Is it something ) 14 that somebody brought to you from within GPU 15 or were you present at a negotiating session? 16 A It was during a meeting with the Stone & ? 17 Webster people that the issue came up. 18 Q And you werr there? 19 A I was at that meeting. 20 Q What did you or anyone else on the b i' 21 GPU side of-the table have to say in response l 22 on that issue, either at that meeting or after i 23 you had a chance to consider it?- ' 24 A I agreed to defer that until a iater date. m['.] 25 Q Following the meeting at which Stone & }' i

--4_.-m.-- m ,..,m. -e- %.cw 1 Haimowitz 75 2 Webster brought it up, did you have any discussionr. 3 with anybody within GPU concerning their request? 4 A Yes. 5 Q Who did you have such discussions G with? 7 A With our Manager of Insurance. 8 Q That would be Mr. Geroty? 9 A That is Harry Gerety. 10 Q And what did you say to him and what 11 did he say to you on that subject? 12 A In our joint review of that provision we P 13 believed that we could not and would not comply !( ) 14 with the provision that Stone & Webster insisted i 15 upon. i 16 Q Did you dis;uss it with anyone else 5 17 within GPU? 18 A No. 19 Q What happened next on this issue? 20 A We attempted to modify the provision that i 21 Stone & Webster had submitted to us. 22 Q How did you attempt to do so? 23 A By changing the words of their proposed >l 24 provision. l 25 Q Did you resubmit anything to them [] - us 1 i ) i l i + 1

-1 Haicowitz 76 2 such as a letter or a new draft? 3 A I believe so. l 4 Q Wha t happened then? 5 A After a period of time in negotiations p l G' Stone & Webster withdrew its request that we 7 guarantee to them replacement insurance of the 8 type that was available under the Price Anderson l' 9 Act. 10 Q Was.anything at all said in the 11 contract concerning what would happen in the 12 event Price Anderson coverage were to lapse? 13 A Yes. 14 Q What was said? i 15 A We would use reasonable efforts to maintain i, 16 such insurance provided that it'could be obtained L 17 at reasonable rates or words to that effect. i 18 MR. KLINGSBERG: The best evidence is 19 obviously the contract itself. l i 20 MR. WISE: We don't have that here i 21-

today, h

22 MR. KLINGSBERG: I am just_ thinking 23 of the trial. i, 24 BY.MR. WISE: .y[D 25 Q Do you recall,any.other instance in i -1 4

1 Haimowit: 77 2 which the subject of Price Anderson insurance 3 coverage arose in connection with a specific 4 contract? 5 A I don't recall any. G Q Have you ever made a review of the 7 Price Anderson'Act to determine the limits of its 8 coverage? 9 A No. i 10 Q Do you know whether anyone else at 11 GPU has? 12 A I don't personally know of anyone that 13 has. () 14 Q Have you ever seen any written report 'i 15 or analysis of the Price Anderson Act coverage? i j 16 MR. KLINGSBERG: Excluding here any 17 opinions of counsel which constitute legal 18 advice. 19 MR. WISE: I would like to press i 20 that question on an all-inclusive basis 21 if his answer is 3 is, and it turns out 22 something was received,from counsel, of !(, 23 course you may wish to invoke the ~i 24 attorney-client privilege but L.do think v[~T 25 on this one that we are entitled to find out i i[ i '1' I'

% emm o .x _1 1 Heimowitz 78 2 whether or not an opinion has been received ,(" n the subject. I think most courts hold 3 4 that we are entitled to at least to discover 5 the identity of an opinion, the date it 6 was written and from whom and to whom, so 7 there can be a determination as to whether 8 that document has to l'e produced. 9 MR. KLINGSBERG: Again, as we discussed 10 before, I think with sufficient limitations 11 on what the subject matter is so that you 12 are not defeating the privilege by revealing 13 the nature of the advice. .b Pu-14 MR. WISE: All I am asking now is 15 whether or not he has ever seen anything i j 16 in writing discussing the coverage of the 17 Price Anderson-Act. 18 MR. KLINGSBERG: You can answer yes 1 19 or no. 20 A No. 21 Q Do you ever recall having a discussion 22 with anyone else at GPU concerning the exposure 23 of GPU or the operating subsidiaries to loss 1 24 in the event of a nuclear accident in connection L/ 25 with a. specific contract that had been submitted t

m wea___.. ..u 1 Haimowitz 79 2 for your review? 'd 3 A I don't recall. 4 Q You don't know one way or the other 5 whether you ever did the t? 6 A I have no recall on the answer to your 7 question. 8 Q Have you ever written any document 9 in which you discussed the exposure of GPU or 10 an operating subsidiary to loss in the event of 11 a nuclear accident in connection with any 12 contract under your review? 13 A No. (~)m L 14 Q Have you ever seen any writing 15 containing an analysis of the exposure to GPU i l i 16 or an operating subsidiary in the event of a 17 nuclear accident in connection with any specific 18 contract? 19 A No. l 20 Q Have you ever had any discussions 21 with anyone within GPU concerning consequential 22 damages in connection with any specific contract? 23 A Yes. t 24 Q When was the first such fnstance ) 25 that you can recall having such a discussion? O i i i

1 Haimowitz 80-2 A I don't remember the first incident. Q Could you relate for us what instances 3 4 you do recall? MR. KLINGSBERG: If any. 5 MR. WISE: If any. 6 If there were reviews of contracts both A 7 8 with our operating company Managers and with the service company Managers of Contracts, 9 10 ' discussions on consequential damages do take 11 place. }l 12 Q Can you now recall any specific 13 instance where such a discussion took place? h 14 A Yes. 15 Q What instances can you recall? 16 A I recall instances where, in our discussions l g7 of consequential damages where we agree that r 4 i i t 18 if a vendor or a supplier insists adamantly.on F .an exclusion of consequential' damages that they gg ( 20_ be extremely limited to what the consequential II 21 damages entail. k 22 Q Do you remember any instances in l - 23 which you had discussions,with anybody at Met.Ed l ~ 24 concerning consequential damages? l 25 A I recall a_ Met-Ed' contracts representative i !',.'_T)

1 Heimowitz 81 2 being at a meeting with others in which the () 3 consequential damages were discussed. 4 Q' .Who was the representative? 5 A I believe it may have been John Mazella. 6 Q Where-was the meeting held? 7 A 3ither at Jersey Central or at Parsippany. 8 Q When was this? 9 A It was during a meeting of the Contracts 10 Managers. 11 Q Who else was there? 12 A I believe a representative from Jersey 13 central, that would have been Carl Brooks, and [, 14 Probably a representative from the Pennsylvania L o 15 Electric Company. l 16 Q What was the purpose of getting i 17 those Contracts Managers together? ( 18 A On a quarterly basis we would hold meetings ~ I 19 in which we would discuss topics that are relevant 20 to matters of contracts. 21 Q When did those quarterly meetings, 22 begin? 23 A I believe they commenced in 1976. j 24 Q How long did they continu,e? l l I"T 25 A The last one, I believe, was held at the c

s 1 3

1 1 .j-n:<

- =-- -., _ _,.....m._ _ - - -- 1 Haimowitz 82 2 day of the TMI-2 accident. r rm (l 3 Q Have they been discontinued? 4 A They were. 5 Q Why? G A. The pressing nature of the work precluded 7 four br as many as five managers getting 8 together. 9 Q Did anyone keep notes at these 4 10 meetings? 11 A I don't believe so, i 12 Q Was there an agenda for the meetings? 13 A Yes. 4 p) A 14 Q Who prepared the agenda? m 15 A I did. I-l 16 Q Did you keep copies of the agenda 17 that you prepared? 18 A ~ I don't remember. 19 Q Did-you mai:.tair any files with 20 respect to these quarterly meetings? l I 21 A No. 22 Q Was any report prepared after the 23 meetings -- j l i 24 A No. l l r[ -') 25 Q --discussing what had gone on? ~ i

%My-

.. u u.

.

l 1 Haimowitz 83 1 2 A No. 3 Q Were any written materials used on 1 a regular basis at these meetings? 5 A I don't believe so. 6 Q Were any written materials prepared i 7 by any of the representatives from the operating 8 companies following the meetings and as a result 9 of the meetings? 10 A I wouldn't know. 11 Q How long would these meetings 12 normally last? 13 A Between one and two days. 'v 14 Q Have you made a search to determine 15 whether or not you have copies of the agenda? 'f 16 A No. 17 Q What would be discussed during these 18 meetings? 19 MR. KLINGSBERG: You mean what was 20 discussed? i 21 Q what was typically discussed? I 22. MR. KLINGSBERG: If anything was 23 typical. t 24 A A portion of the meeting was' relegated to [',) 23 i problems ana recommenaea solutions, a topic of, i i-i 1-b l

%, _ a........_~ -=~- I li a i m o w i t z - 84 2 discussion.that I can recall had to do with (~h V 3 the uses of various typra of contracts, another 4 topic I recall consisted of an analysis of an 5 overhead in cost reimbursable type contracts 6 and what those elements should be broken down, 7 we also would discuss negotiation techniques, 8 that we, each of us have found successful. 9 Q Was there any discussion during i 10 those quarterly meetings of insurance coverage? 11 A No. i 12 Q Of consequential damages? 13 A Yes. .0 ^ 14 Q What was the discussion that you can 15 recall of consequential damages? IG A As I testified earlier that in that specific l 17 or that particular time we discussed that if a 18 vendor was adamant and insisting on an exclusion ij 19 of consequential damages, that we should be very l 20 specific in the provision in limiting it to those g damages of a consequential nature. 21 22 Q Who brought that topic up? l ~ 23 A I don't remember. t i t 24 Q Do you know whet'ler it was on the 25 agenda? < r , :s P.g 'i 1. .o .l.

. _ - =... 1 Hainoritz 85 2 A I do not believe it was a specific agenda 3 item. 3 Q Do you recall how long that topic was 5 discussed? 6 A No, I don't. 7 'Q Do you remember whether any particular 8 contract was at issue at the time that that topic 9 was discussed? 10 A No. 11 Q What was said at the meeting concerning 12 what the effect was of failing to limit the items 13 that would be considered consequential damages? ( 5s 14 MR. KLINGSBERG: If anything. P ] 15 MR. WISE: If anything. ( 16 A Nothing was said concerning that particular 17 thing, about failing. l t 18 Q At any of the quarterly meetings, i 19 was there ever any discussion of indemnity 20 provisions? 21 A I don't recall any such discussions. 22 Q At any of the quarterly meetings, was i ~ 23 there ever a discussion of limitation on remedies l r 24 for braach of warranty? ~ l) 25 l A Yes. 4 4 I

w- _m... !/- 1 Itaimowitz 86 2. 2 Q Do'you recall which meeting that 3 occurred at.or,:the approximate time frame? i 4 A I can't r'o ca ll, you know, the meeting 5 that that took place. 6 Q Was that something that was on the' 7 agenda? 8 A It was not an agerda topic. 9 Q what do you recall of that discussion? 10 A In our get-togethers we had mentioned that 11 many contractors seek to put limitations on the { 12 remedies available in the event of a breach of 13 warranty. 14 Q Was anything else said other than s 15 that statement of fact? I <j i 10 , A' .Yes. 17 Q What else was said? 18 A We di3 cussed negotiation methods and 1 l 19 techniques in which to attempt to attain the i 20 best possible remedies and what kind of, you r. 21-know, techniques and explanations one can utilize i 22-1n:. face-to-face negotiations to better-the 1 4 --g- /< 23

t warranty thaty.a'vandor, you know, wants to i

4 'f g 24 / Aimit. 25 l lb In other words, it was an area that s 1 L /.., 1 - o c .I 3 j

w-_,-...~---- "s s \\1 l + ,) s o 1 Haimowitz 87 1 2 we felt should be given proper attention in O 3 negotiations of contracts. 4 Q During this discussion, was any s 5 mention made of this desire by contractors to 6 limit warranties coming up particularly in the 7 nuclear field? 8 A I don't recall. l. ^ D Q Do you recall any discussion either i s 10 at that meeting or at any other meetihg 11 concerning provisions for decontamination expenses 12 in the event of an accident at a nuclear plant? r 13 A No. = .q 14 Q Did you ever at any time either in 15 these meetings or at any other time personally s 16 give consideration to who would bear the expenses - l i 17 of decontamination in the event of a nuclear i 18 accident in connection with your review of any I '19 specific contract that came before you? 20 A I don't remember in the review of contracts t 21 that came before me. g N 22 Q Do you remember it in some other i t l' 23 connection? l + 't 4 A-It's been our position,"in our negotiations,, l 24 i 4 (n.) 25 .to try very hard-to have decontdmination expenses ( q. -N' i d. f. ) 7 ? t v r--

q 1 Haimowitz-88 v. 1 4 l .- ( 4 i ,.[,% ,2 borne by a supplier or a contractor. 3 We continue to press that. position .t +,; ,4 very strongly. l'* 5 Q 'Have you ever been successful in s )"A G getting a contractor or a supplier to agree to ( i s' j-

y-

,31-7 that?. 8 A We have been successful in not having 9 not having it specified that the owner will bear 10' those costs. ? \\ 'll Q In-reviewing contracts for' goods or ,i 12 services to be-provided at a nuclear facility, aIy-13 ' was it your practice to review the contract to 14 see'what it provided wit'.4.re pect to t la. decontamination expenses in the event of an ,l "i 1G accident?- 1 { 17' MR. KLINGSBERG: May I hear that 18 back, please. _4 19 (Record read.) i .i + ljl 20 -A I'w$uldlike to answer that the same way l'I L: 21 I answered, I think the last time, certain provisions l' i -l .i 22 were brought up,-depending.upon the type of i s u; 23 . contract) the importance of a clause would', you } .a ;

-L 24 ~

know, be. relevant to when you are'revttwing a i. 25 I particular contract. < p_ - 1 6-k _9 f.! lf kk _ ,i -e

1 Haimowitz 89 2 Q You may have misunderstood my question b s,/ 3 and I admit it was inartfully phrased. 4 What I am trying to establish is 5 whether or not during the period 1975 through 6 1979 as you carried out your responsibilities 7 'and reviewed contracts that came to you, did you 8 look for or have in mind as you did that 9 decontamination expenses as something that was 10 of concern to you with respect to contracts 11 affecting GPU's nuclear facilities? 12 A I don't believe it was a concern, because 13 of all of the contracts that I have reviewed in ) 14 that time frame, a very limited number had a 15 ' provision which required the owner to reimburse { 16 the contractor for decontamination expenses, if i 17 it, in the rare instances we did see 6ne, we would l-18 either call the Contracts Manager or make the l I 19 assumption that this is a result of hard 20 negotiation. Our overview was not to critique 21 and. review the contract. Our overview only 22 required comments that we thought were relevant 23 and may not have been included in the original 24 negotiations. E') 25 Q-To your knowledge, did Metropolitan k

-/._.... .l l-Halcowitz 90 2 -Edison Company ever have a special set of terms o 3 and conditions for nuclear contracts? 1 A To my knowledge, I don't believe so. 5 .g During the quarterly meetings, was 6 there ever a discussion of property damage waiver 4 7 clauses? 8 A I don't recall any ruch discussions having i 9 come up. 10 Q Do you ever recall having any I 11 discussions with anyone in connection with any 12 specific contract you were revieweing concerning 13 property damage waiver clauses? 14 THE WITNESS: Could I have that i 15 question repeated, please. 16 (Record read.) 17 A I believe I answered that previously, in r i 18 the affirmative. i 19 Q I don't thirA I asked that og particular question before, but I could be i t r 21 mistaken. c l f 22 A I think you asked me about'the property l I : i' 33 damage and the ability of GPU 'to - grant property i L, l 24-l damage, a waiver, and my concern was that our ! i i ( 25 insurance may not have covered that, I believe 4 ij f 1 i w {'._ 1^ '

• i

1 Haimowitz 91 ?. L 2 in the morning session we had discussed that. L p/ (_ 3 Q I think that related to something 4 else. 5 A Then I misinterpreted. 6 Q I am asking now whether in your 7 experience any potential vendor, supplier, to GPU l 8 or any operating company ever requested that 9 the contract specifically include a waiver by 10 GPU of any right to proceed for property damage? 11 A All right, now, may I have that question 12 back because I think it's a totally different 13 question that you asked before. May I have the k_)) f 1 14 question back, please. l 15 (Record read.) 16 Q Presented or claim property damages? 17 A The answer is no. I 18 Q My question is did such a request i 19 or that type of request ever become the subject l l 20 of a discussion at one of these quarterly t L 21 meetings? 22 A-The answer is no. 23 Q Going back to the instance where t 24 someone did make such a request, what" instance I' ,b-) 25 was that? 'i i....

-~ 1 1 Haimowitz 92 2 A I am familiar with GE, General Electric, n 'k i s/J 3 continually requiring such a waiver as a <t condition of doing business iith GPU and its 5 subsidiaries. 6 Q Did GPU ever accede to that 7 requi'rement? 8 A Reluctantly, yes. 9 Q Do you know whether Combustion 10 Engineering required a property damage waiver 11 in its contract relating to Forked River? i 12 A I don't know. 13 Q Do you know whether there was any qA./ 14 provision in the Combustion Engineering contract 15 regarding Forked River covering who would bear i j 16 the risk of loss to property in the event of a P 17 nuclear accident? 18 A No, I do not. 19 Q Do you know whether there was any i 20 limitation on whatever warranties may have i existed in the contract between Combustion 31 22 Engineering and GPU relating to Forked River? 23 A I don't know. 24 Q You weren't part of any discussions ,() 25 on those-subjects, that'is,. imitation of 1 -) i t

h' 1-Haimowitz 93 J 2 warranty, property damage waiver, anything of A 3 that. nature, between GPU and-Combustion Engineering 4 or-within GPU? 5 A No. 6 .Q who handled that contract'for GPU 7 Service? ) 8 A GPU Service is not a party to that 9 contract. 't 10 Q Was.GPU Service involved in the 11 review and negotiation of that contract? 12 A I can't answer that. i 13 Q You don't have any. idea one way or i i 14 the other?~ 15 A well, the contract is dated, I believe, 4 I i 16 1969. I was not.at GPU then. 17 Q Do you have any knowledge as to who i e 18 negotiated that contract? f 19 A I have no knowledge of who negotiated that '.i

b 20 contract.

j-21 Q Who was a party to it on the GPU i t 22 side? i - 23 A The contract was executed by Jersey. l + 24 i Central. I i i t l' - 25 l Q JCP&L? l

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--34 2

"^ - - - -... -. - ~.... - ~ ~ 1 Haimowitz 93-A 2 A Could I ask for a break? g_ N] 3 g sure. 4 A Thank you. 5 (Recess.) 6 (Continued on following page.) 7 8 9 10 11 12 13 l 14 15 1 i 16 i 17 4 18 l 19 l j 20 21 1 22 i I e l ~ I' 94 I ( ) k'd 25 i e i

h I hd1 1 Heimowitz 94 2 BY MR. WISE: I t \\ >) t 3 Q Mr. Haimowitz, during the break or i 4 following the break, your counsel indicated that you 5 wished to make a further statement regarding the l G quarterly meetings that. vere held with the contract j 7 managers. 8 A That is correct. l 9 I stated previously that the last t 10 meeting was held lat the time or the date of the 11 accident. I now recall that we had a subsequent [2 meeting in the middle of 1980 in which the managers t 13 of contracts were invited, and we had a meeting at ib - sms 14 Parsippany. i l 15 Q What was the subject of that meeting? IG A The prime concern at that meeting was cash i i 17 conservation methods. i 18 Q Nothing, I take it, was discussed-at I ( 19 that time concerning property damages or fI f-20 consequential damages? j-1 21 A That is correct, nothing of that nature'was 22 discussed. I 23 Q What was your practice during the period i l 24 1975 through '79 with regard to following up on i i -i i i (') 25 whatever comments you had as a result of a review i 4 x._/ e .,i i.

h 2 1 Haimowitz 95 2 of a contract that was submitted to you by an fT(/ 3 operating subsidiary? 4 THE WITNESS: Could you repeat that 5 question, please? 6 (Record read) 7 A I had no specific practice. i 8 Q Was there any procedure at GPU for 9 what you were supposed to do once you had completed 10 your review of a contract? 11 A No. 12 Q Did you ever make written comments 13 back to the operating subsidiary? .( ) 14 A Yes. i 15 Q What percentage of the cases, roughly, i j IG would you make written comments? Was that an i I 17 unusual thing or in almost all cases or very rarely, i 18 or I will take almost any characterization you wish 19 to put on it. l ~f 20 A It would be difficult for me to come up with 1 21 any proportion. { I 22 Q What else might you do besides making a written comment? 23' l I i 24 A I would call the cognizant manager or contracts l i l -1 t

_~ ~ - ' au.. -... . - ;_ = -_. '3 1 Haimowitz 96 2 Q Would you ever take the matter to l I 3 higher authorities within GPU, such as Mr. 4 Glickman or someone else? 5 A Mr. Glickman would be made aware in 6 appropriate instances of my comments. 7 Q When would you have considered it 8 appropriate to make Mr. Glickman aware of your 9 comments? 10 A On those comments which required Mr. 11 Glickman's review. 12 Q This would se u? der the LOSA? 13 A That is correct, f 14 Q I asked you before about whether you i t I 15 had seen any standard terms and conditions for t 1 -{ IG nuclear contracts that 11e t - Ed might have. i 17 Let me show you now what was marked 18 during Mr. Glickman's deposition as Exhibit 22, i-i i 19 which purports to be a copy of general terms and l i 90 conditions for construction contracts for 3 ,i i i ' 21 Metropolitan Edison Company, and ask if you have i 22 ever seen this document before (handing documen,t 23 to the witness). 24 A Yes. l, (:t_,) 25 Q When was the first time you have seen l 4 i 1 I I I. l i

w -- .1 Haimowitz-97 4 jr* ' 2 that? l 3 A I believe, yesterday. 4 Q Would you turn to the special nuclear 5 conditions of sale which appear at page 6185, as 6 marked in the lower lefthand corner, and continue 7 thereafter. That page is titled "Special Nuclear 8 Conditions of Sale." 9 Would you look specifically at those i 10 provisions and tell us whether you have ever seen 11 them before, (handing document to the witness) and 12 I mean before yesterday. 13 MR. KLINGSBERG: This is part of the A Pw) 14 same exhibit? i l 15 MR.' WISE: Yes, that is part of the l Iti same-exhibit, I should point out for the 17 record. He conceivablyTmay have seen this i 18 separated from the rest of the exhibit at j I i 19_ some time. j i i 20 MR. KLINGSB4RG: Do you understand f 21 the question? i 22 THE WITNESS: No. ,/ 23 MR. KLINGSBERG: You don't understand? l' \\ I THE WITNESS: First, I aw going to read f 24' l t (. l - )' 25 it and then I will ask for the question to be I l i ,.F ~

wa~g l-5' l - Haimowitz 98 '2 repeated. p ' 3 MR. KLINGSBERG: O.K. b 'I MR. WISE: Off the record, Mr. 5 Haimowitz. 6 (Discussion off the record.) 7 MR. KLINGSBERG: Just-so we can save 8 time, the question is not whether you saw a i 9 particular clause someplace in a particular I i 10 contract..The question is whether you saw II this particular part of the document as a I 12 separate document apart from the entire 13 document which you said you never saw before 14 yesterday. l 15 A I don't recall. j 16 Q Let me next show you Exhibit 19,. 17 previously marked, which is a contract that does 18 not appear to have been executed and does not ~ 19 appear to have the name of the contractor filled . -i 20 in. It does, however, purport to be prepared i 21 sometime in 1978 according'to the first line of j [' 22 this document; and, in addition, appears to involve r l' l t Metropolitan Edison as.well as the other'two 23 1 4 L4 24 operating subsidiaries. - l. 1 (l 25 Let me ask you if you have ever seen-N .1 !1 i

nn-6 1 Haimowitz 99 2 this particular draft before today (handing document (~J \\ \\ i i 3 to the witness). 4 A And the question? i 5 Q Have you ever seen that before? 6 A Yes. } 7 Q When'did you see that? I 8 A Yesterday. 9 Q Have you ever seen it before 10 yesterday? 11 A No. I 12 Q Let me direct your attention to the l l 13 second page of the draft; it is actually the A ^~') 14 third page of the exhibit. At the top of the page, i i 15 there is a list of documents which are referred to l 16 on the preceding pages, the contract documents; and i ) I i l 17 then included as item 2,.something referred to as 18 " Metropolitan Edison, General Terms and Conditions j i i 19 for Service Con' tracts." i 20 Have you ever heard of such an item? l t l t i 21 A No. l l 22 Q You have never seen any contracts 23 submitted to you for your' review by Metropolitan I f 94 l Edison which made reference to such a set of terms ~ 25 - and conditions? l .I i i l I

%-u -_. _ " '~~ ~ " 7 l Haimowitz 100 2 A I don't recall making reference to these . g- .-Q 3 (indicating). 4 Q Let me show you Exhibit 20 previously 5 marked, which appears to be a contract between 6 Metropolitan Edison and Burkey Construction Company 3 '7 dated January 27, 1978, and I will ask you if you 18 have ever seen this particular contract before i E 9 (handing document to the witness). 10 THE WITNESS: Could you repeat the 11 question, please? 12 (Record read) t 13 A Yes. 14 Q When did you first see that one?. t l-15 A Yesterday. f i. 16 Q Never before that? 17 A I have no recollection of having seen this 18 before that. <q 19 Q Referring to the cover page, there is i 20 a list of signature lines beginning with " Prepared -21 by" and following " Review by, approved by," and a j i 99 second Approved by" lint. The copies are very r l 1 i 23 l poor, and I'recogn'ize the signatures are hard to l! l

i 24 l

make out. l l Are you able, based upon your 25 ' l l,~ f -j "j l' i i 4 .4- + ..m+-- ,,.%v-- y-4 e m,-,ww-,y,--,y-y ,3 -r. ...w

..8 1 Haimowitz 101 2' experience and knowledge of the company, to decipher ~ 3 any of those signatures for us? 4 A I can't decipher any of these names. 1 1 5 Q Are you familiar with Mr. Maze 11a's 6 signature?. 7 A I don't believe I can qualify as being 8 familiar with his signature. 9 Q Let me next show you a contract 10 previously marked as Exhibi'. 21, which appears to 11 be a master services agreement between GPU Service 12 Corporation and the operating subsidiaries on the 13 one hand, and Gilbert Associates on the other, and 14 ask if you have ever seen that document before 15 (handing document to the witness). .t 16 By "before," I think we will define it 17 as something other than yesterday. 18 A Your question? l. l 19 Q Have you ever seen it before? And I i I t - will exclude yesterday from "before." og !~ i 21 A Yes. l 22 Q' When did you first see that particular i i j 23 i document? t .[. l 94 A I believe in 1977. ~ ]) 25 Q How did-it come to your attention? e a .j ' s

I 9 1 Heimowitz 102 2 A We had undertaken negotiations with Gilbert A() Associates to enter into a master services agreement 3 l with Gilbert Associates. ,g f Q To what facility did that relate? 5 may I look at the A It would have related g document? 7 g A Sure. MR. KLINGSBERG: Take your time and 9 look at the document as much as you like. 10 MR. WISE: Off the record. lg I (Discussion off the record.) 12 A The intent was to have it relate to every 13 b g,_j g,g possible facility within the GPU system. I 15 Q Would that have included the Three l \\ Mile Island nuclear facility? l 16 A It would have. 17 18 Q What was your participation in the review and negotiation of this particular contract? 19 I 4 i A I participated in the negotiation of the f 20 terms and conditions of this draft. gg I 22 Q You say a " draft." i Was there actually a contract executed 23 i. i at some point? j 24 i l A No. ) 25 l l i

l I ,Haimowitz 103 10 p_ l 2 Q For what reason did'the negotiations !.Gs 3 cease? I 4 A We could not recommend acceptance of an .5-agreement of this nature, a proposed agreement with 6 the terms and conditions contained therein. i 7 Q Which terms'and conditions did you 8 find objectionable? D A May I? (Indicating) I 10 Q Certainly. II A Article VIII entitled " Warranty; Remedy," i 12 Article IX entitled " Damages," Article XII that 13 is the provision entitled " Assignment and .e E ( ~ 14 Subcontracts" -- Article XXIV entitled " Nuclear i i 15 Indemnity." l i

XXV, 16 We had a problem with Article 17 paragraph C.

Those are some of the disagreements 18 that we had with Gilbert during the so-called i-19 negotiations. principal disagreements? I 20 Q Were they the i 21 MR. KLINGSBERG: I object to the form 22 of the question. 23 MR. WISS: I will take my chances with. i + ~ 94 l it. i ) 25 Q Were they the principal disagreements?- t

~ ~ 11 1 Haimowitz 104 2 A I don't remember. 3 Q What was your problem with the 4 " Warranty; Remedy"? 5 MR. KLINGSBERG: Well, you now have i 6 got the contract, I think. I i 7 MR. WISE: Yes. You can have it 8 back (handing document to the witness). 9 MR. KLINGSBERG: Take your time. 10 A We felt that the warranty was very broad as 11 far as the exclusions are concerned. 12 Q Are you say'ng the warranty or 13 the " Warranty; Remedy"? 14 A The warranty was broad with respect to the 1 l 15 exclusions. They wanted everything excluded. i IG The remedy was extremely limited. 17 Q What was the remedy as you understood [ 18 it in that draft? i ^1 19 A That the consultant would reperform " services l i 20 to the extent necessary to correct the fault 1 21 therein." 22 Q What did you understand that to limit l i 23 i the consultant's obligati6n to? I t 24 A I believe that the words indicated that the j-l < k. )g 25 i servlces of the consultant's personnel would be 1 1 k (79

i

x_._-.-._._ 12_ l Haimowitz 105 1 I 'l reperformed. 3 Q And you objected to that becuase you 4 thought it was too limited? 5 A Yes. G Q Was there anything else about the 7 " Warranty; Remedy" clause that you objected to? 8 A Excuse me? 9 THE WITNESS: The question again. 10 Q Was there anything else in that 11 particular clause that you objected to? You have 12 told us what some of your objections were. I want l 13 to know if there was anything else about that 14 clause that you found objectionable. 15 A I have to read it all over. t Ifi The clause seeks to limit claims 17 arising out of negligence, and then there are 18 words "...or from any other cause whatsoever." I 1 . 19 would have no idea what that means. t 20 Q-Did you understand-that draft p 21 provision would preclude GPU from seeking damages 22 beyond the reperformance of the services in the i 23 event of a breach of warranty? I 1 24 A I don't think I gave it'a thought. 4 s A,) 25 f Q Did you come to any understanding with l 1 I i 1 i 1 4 .~x..

13 I Haimowitz 106 2 respect to your work on this particular contract (O L/ 3 as to what the extent of GPU's remedies would be 4 for breach of warranty under this particular 5 clause? fi A I don't remember coming to any total 7 concl'usions. 8 Q You did come to the conclusion that 9 it was objectionable as phrased? 10 A I did. 11 Q The basis of your objection was that 12 GPU did not have enough protection in the event of 13 breach of warranty, is that correct? (m (,,) - 14 A I don't believe that is correct. i l 15 Q What was the basis of your objection? i 16 A I believe it was an attempt by the consultant l 17 to shield himself from total protection. s 18 MR. WISE: Joul+' you read that back, l 19 please? l 20 (Record read) f 21 THE WITNESS: I'm sorry, that word ] from total " remedies." 22 should be from total i 23 It was his it was his attempt. j l r l BY MR. WISE: 24 f >(-h ') Q His attempt to do what, just so I have i 25 l i 1 I .) i r ,j. (.-

L u,_ i 1 Haimowitz 107 l -m 2 it clear? \\ y 3 A To mitigate. Well, he envisioned that the 4 wordc, as written, would give very little warranty 1 5 relief -- very little warranty protection to the l l 6 owner. 7 Q GPU? 8 A Yes. 9 Q Did you understand it that way? 10 A I think that was his position with the words 11 as written. 12 Q My question is what you understood i, 13 this language to do. l ,e kJ \\ ~ 14 MR. KLINGSBERG: Well, which language? j l 15 We have been all through the language. We I I 16 have been dealing with something that runs i I 17 two pages. The witness has testified at some I 18 length about it, and now you are going back I l 19 and asking, I think, a very broad-scale f I 20 question which either has been covered or is i 21 too broad. 22 MR. WISE: We are dealing with one r i 23 l specific term which is Article 8. t 24 l MR. KLINGSBERG: No, we are not; we j [' j v i i 25 i are dealing with tve whole provision that runs l i ] .i i

L 1 Haimowitz 108 2 for at least a page. 3 MR. WISE: It is one provision which 4 is the " Warranty; Remedy." That is all we I 5 are discussing now. 6 MR. KLINGSBERG: That is correct. 7 Right. I mean there is a whole lot to it. 8 I don't think you can just talk about it as 9 "it" and the witness has gone through it in 10 great detail and given you line by line, 11 practically, what it was that he found 12 objectionable. Now you are asking him some 13 kind of broad question to sum it all up, which t'~ 1 14 may not be possible. 15 MR. WISE: I am afraid, Mr. Klingsberg, I i 16 that as we get into some o f these specific l 17 clauses, we will have to go into them in i ,l 18 quite some detail. I 19 MR. KLINGSBERG: I have no objection l 20 to the detail. I have an objection to the l I ) 21 broad birth, i 22 BY MR. WISE: 23 Q If your cou sel will permit me, I just l l l and we will want to ask one more question on this r 24 .c s ( ) 25 go on to another article. l s i i i

I Haicowitz 109 2 What was your understanding of what l this clause would permit GPU to do in the event 3 4 of a breach of the warranty? 5 MR. KLINGSBERG: I think that question j f l 6 has been asked and answered. If you want to I 'ask it again -- 7 I 8 MR. WISE: I think we went through the 9 specific provisions and that question was t 10 discussed with restect to certain parts of 11 this. warranty that the witness cited to. 12 I just want to make sure that I 13 understand his total position with respect 14 to the limitation on warranty as provided I i 15 in Article VIII of this agreement or draft i l l 16 agreemant. I want to know what his 17 understanding of that language was. 18 MR. KLINGSBERG: I think he has 19 stated that, but if you want it again it is i, 20 0.K. j f 1-l 21 BY MR. WISE: .l i 22 Q The question, Mr. Haimowitz, is what r 23 was your understanding of GPU's remedies under the i l-i 24 l language in Article VIII of the draft-agreement. i L ) 25 MR. KLINGSBERG: Assuming he had such 6 i i l 1 -i ~

1 Haimowitz 110 2 an understanding. ss 3 BY MR. WISE: 4 Q Assuming that you understood what you 5 have before you. (i A As I stated before, I didn't give that 7 thought, but I gave thought to what the consultant i 8 thought his liability was. 9 Q Your testimony is that based upon what i 10' the consultant thought his liability was, you 11 were not willing to go along on this particular 12 clause? 4 13 A That is correct. 1. (,, 14 Q Would you turn now to Article IX. ) 15 What was it about that clause that you-16 found objectionable? i i i 17 A On line 3, the word "special," the word l i 18 " indirect," "any" next to the word " nature," and 4 l 19 "any nature," the exclusion from -- the exclusion j .) i. 20 of damages in the event of a consultant's i ! 21 negligence, " cost of purchasing or generating l l 22 replacement electricity; damages arising from delay l i 23 in constructions" are ths.immediate things that come to mind. l [ 24 l 1 25 Q What did you find objectionable about 1~ 1 i g If p. y ..+----.; w w w

i f I I Haimowitz 111 l i 1 2 the word "special"? 3 A I didn't know what that meant. 4 Q Did you make any attempt to find out 5 what it meant? 6 A I believe I did. i 7 Q What did you do to try and find out? 8 A I requested clarification from the people with l' 9 whom I was negotiating with. 10 Q What did they say? 11 A I don't recall, but it appeared to be more t 12 than consequential. 13 Q What do you understand to be included O LJ 14 within the term " consequential"? f [ 15 MR.,KLINGSBERG: Wait a second. What i ,i ,j 16 does he understand now today? 17 MR. WISE: No, I will restrict it to 18 the time that he was negotiating this and he l 19 just used that word, and I want to find out 'i l 20 what he means wt.en he uses it. i ) 21 MR. KLINGSBERG: Wait a second, the 22 term was used in Article IX. j f I 23 MR. WISE: I"am not concerned about I' l' fI 24' l Article IX. The witness just gave an answer l 25 in which he used the term " consequential" I li i \\

~~~;. 2..,~. _. n. _ I Haimowitz 112 '2 as a way of saying that special was something l') 3 .more than consequential. 4 I want to have now the witness' 5 definition of the word as he just used it. 6 MR. KLINGSBERG: But he used it in 7 the context of thin particular negotiation t 8 in this particular con'..ract. 9 MR. WISE: That's fine. I want to 10 know what he just meant when he used that 11 word. 12 MR. KLINGSBERG: All right. I3 THE WITNESS: Can I have read back to M 4/ 14 me what aspect I used the word " consequential"? t 't 15 l (Record read) l l IG BY MR. WISE: 17 Q My question now is, what did you mean e I 18 j by " consequential" as you just used that term? I 19 A As I used that term, the word " consequential" i e i 20 meant totally and wholly outside of the realm which t 21 is totally unrelated to what the damages, you know -- g 22 to what I am trying to give you a good 23 def.inition. Give me a second and let me try to 24 l think. ~ ) 25 Q Take your time, i ? I 1,

%.a. ,I m f l' V Haimowitz 113 j s t 7 A Consequentially would be those that are (~\\ ~ 3 totally out of the range of foreseeability in the s 'l 4 event o f damage. s 5 6-Q That is youl understanding as you just J G used that ~ term today, is that correct? 7 MR. KLINGSSERG: That is what he said. i 8 'MR. WISE: I just want to make sure 7 l 9 that it is clear on the record what it is he 1 10 ,has just defined. 11 BY MR. WISE: 12 Q Is'that what you just defined? 13 A Yes. .,,if' T'- 14 Q About how many contracts would you 15 estimate you have seen'since coming to GPU Service i I ,l IG in 1975? i 17 A Hundreds. 18 Q How many times would you estimate you I 19 have seen a contract with a consequential damages i 20 clause in it since you came to GPU Service? I i l ) 21 A I can't give you -- l I 22 Q Is it something that is fhirly common? l' I' 23 1 A I wouldn't characterize that as a fair i t. l I ~ 94 i statement. s l' - ("s ~ g,) 25 j Q Do you think you have seen more than a l l F I j l i t I

n ~ -___,, ~ 1 _7 1 Heinowitz 114 2 dozen of them since you came to GPU Service? 3 A I believe so. N 4 Q More than 507 I. 5 A I don't know. 6 Q During your experience before ysu came 7 to GPU Service, had you ever seen a cont'ract clause t 8 concerning consequential damages? '7 9 A I don't believe so. p. 4 J I 10 Q Do you know whether any of the 11 Government standard contracts contain el uses wiet,s 12 respect to consequential dimages? u, 13 A I don't believe so 6 O 14 Q What did youifind objectionable about: 4 i 15 the word " indirect"? N j s j ( i l 16 A I didn't think it was appropriately defined.i 17 I didn't know what that Lord meant. 18 Q Did you make any effort to find out +e 19 what was meant by that? { q-s i I-20 A Yes. I ( ) 21 Q What happened? .\\ l 22 A I don't believe that ths negotiator of this I 23 contract ever was able to*yefine it to our j i i i 24 l satisfaction. s n i U 25 Q What did you find objectionable about N,-. ? I 4 l a

• i i

t

L. -.-.~., _.. _. "a== - - - -- l l 1 lininowitz 115 I 2 l the mention of replacement power in the damages l / L,J 3 clause? 4 A I believe that that is a direct, or at least I f 5 a damage that should be one of a direct nature. I 6 Q You did not feel that that was 7 included within the term " consequential" as you 8 understood it at the time? D A I didn't believe that that qualifies as a 10 consequential damage. 11 Q Did you ever have any discussions with 12 any of the executives at GPU or any of the operating ! !3 subsidiarios concerning what they understood to be g4 consequential damages as that term may be used 11 within the utility industry? 15 i 4 l i 16 A No. 17 Q You never discussed that with anyone I j 18 on the executive side of GPU or any of the operating 19 subsidiaries? i 20 A No. l 21 Q Do you have any knowledge today as to 22 whether or not a consequential damages clause or f 23 clauses c1C customarily used in the utility i ~ 24 l industry? / 25 l THb WITNESS: Could you repeat the q q' i s l. f 5

- +.ia.. , w -- I Halmowitz 116 l l 2 question? 3 (Record read) 4 A The answer to that is no. 5 Q You don't have any knowledge one way 6 or.the other? 7 A That's correct. 8 Q Have you ever attempted to find out 9 whether such clause was customarily used? 10 A No. 11 Q Have you ever attended any industry t 12 gatherings of any sort at which there was discussion 13 of terms and conditions as used in contracts to 14 which utilities were parties? e I 15 A No. l j l l l 16 Q Have you ever had any discussions with 17 your counterparts at other utilities about terms 18 and conditions? 19 A No. i. I I I 20 Q Have you ever had any discussions with i + l 21 any other utilities concerning consequential 22 damages and the meaning of such a term? 23 A No. i e ~ 24 j Q EDo you know whether there is any 25 industry custom and practice with respect ' to - t ,l',

q- - m I Haimowitz 117 l l l 2 consequential damages? O l 3 A No. 1 l Q Do you know whether there is any 5 practice as to whether or not the costs of l 6 replacement power are considered an element of l 7 consequential damages? I 8 A No. h 9 Q Have you ever had any discussions with 10 anyone within or without GPU concerning whether 11 there exists an industry practice with respect to 12 what is included under " Consequential Damages"? 13 MR. KLINGSBERG: Ever? I 14 MR. WISE: Ever. 'f 15 A I don't remember. I IG (continued en next page) l 17 18 i 19 + g t l 20 I 21 22 i 23 i 24 ~ 25 I j 5 x I+: -,7 w w

r;~ - -..g-l 1 Haimowitz 118 2 Q Other than whatever studies you I, may have had in your las schsol training and 3 .I whatever your reading of the language may be in a 5 Particular contract, do you have any source of G information as to what consequential damages 7 inclu'de or don't include? 3 - 8 THE WITNESS: May I have that i D question repeated, please, i 10 (Record read.) 11 MR. KLINGSBERG: I object to the form 12 of the question. I don't know what you 13 mean by " source of information." I mean b %_j 1.s the man has 25 years of contract negotiating l 15 experience. Is that a source of i IG information? j l 17 MR. WISE: I am now focusing on I t l 18 something very special here, Mr. Klingsberg, l 19 and that's the consequential damages clause l-I o0 as used in the utilities industry. i. 21 MR. KLINGSBERG: You mean the 22 consequential damages, you sound like there I i 23 is one consequential damage clause used in ll i I [ 24 every contract infche -;tility industry. i f' 25 j MR. WISE: I think we will be able 'd' ~ .s i l b a k-

L____. -- ~....._..,_. 4-1 Haimcwitz 119 2 to establish that consequential damages 3 is a frequently discussed topic in the 4 utility indus try but be that as it may -- 5 MR. KLINGSBERG: I am not going to o debate that, but you said "the clause." 7 We already have in the record probably 20 8 different kinds of clauses dealing with 9 that. e I 10 MR. WISE: Putting aside for the 11 moment the specific language that a 12 particular clause may use and whatever 13 arguments we may offer what that includes, i /~'g ds/ 14 certainly the subject of consequential I 15 damages generically is something that I 1G think everyone at this table is familiar 17 with, I don't think we need to spar over 18 that. ~! 19 .I obviously don't intend to mean 20 and it would be silly to say that all 21 clauses are the sane in all utility 22 contracts. 23 I am sure you recognize what I am i 24 talking about when I speak of a consequential 1 )_ 25 damage clause. What I am now trying to 1 b

'c~,,, m - - - = - - -, - - - 1 Hainowitz 120 2 determine is what this witness' understanding ,~~ k-) f consequential damages is and what basis i 3 4 he has fo r that understanding and I have-5 asked a number of questions as to who he (; talked to and the answer to all those 7 questions has been that he didn't talk to i 8 this person or tha t person. 9 MR. KLINGSBERG: Or I don't recall. 1 10 MR. WISE: Or I don't recall. 11 MR. KLINGSBERG: Right. f 12 MR. WISE: And I am now trying to 13 establish what Mr. Haimowitz' understanding 0 14 of the term " consequential damages" is rl 15 and on what he bases that understanding. i i 16 I think I have already asked the i 17 question what his understanding is and we 18 have his definition. I am now trying to l 19 determine from what source he came to have j l. 20 that definition. 21 Let me ask the question that way, e 22 maybe that's the fastest way to get at it. 23 BY MR. WISE: l 24 Q What is the source of youm 25 understanding of consequential damages? \\M i I Ll_/ _ _ - _, _ _ _ _ - - - - _.

i Haim3witz 121 2 A It's based on many years of negotiating, k-) it's reviewing different sorts of provisions 3 l 4 which talk about consequential damages and it's 5 been an understanding that I have had and g shared by, with others, witFin the department on 7 the issue of damages of a consequential nature. 8' Q When you say that you have had and g shared with others in the department, who else I i 10 have you discussed this with within the department? 11 A I had mentioned previously that the issue of 12 consequential damages came up during a Manager 13 of Contracts-meeting attended by, I believe, Lou 14 Russo, and I may have { 15 Q You discussed the others who were (i i 16 there, you don't need to repeat that. i 17 Are there any other discussions that 18 you can recall which you would cite as a source 19 of your understanding of the meaning of consequential, l l 20 damages? l I l 21 A I may have had discussions with counsel i 22 on that topic. l l 23 Q You don't recall any now? t' 24 l A I don't recall any. t f'T 25 MR. KLINGSBERG: Is this a good time F f-L . i: I5t. Lr

--.. w.a.as a I I Haimowitz 2 for a two-minute break? 13 $-) 3 MR. WISE: Sure, we will take one 4 more break and we will go to 4:30, 5 MR. KLINGSBERG: Sure. Let's take a (; short one. 7 (Recess.) 8 MR. WISE: Will you please repeat the j 9 last question and answer. t 10 (Record read.) 11 BY MR. WISE: 12 Q I believe you also objected to the 13 portion of Article IX stating "(regardless 14 whether such damages arise f rom consultant's i 15 negligence, breach of warranty, breach of contract j i l t ~ 1(1 or other act, error or onission or from any other 17 cause whatsoever)," I believe you mentioned that l 18 last phrase that you objected to, is that correct? .' l 19 A I don't think so. I think I objected to i I l' 90 the entire portion of the clause which starts with I 21 the beginning of the parentheses and ends.with L 22 "any other cause whatsoever." 23 Q What was your. reason for objecting i h 94 l to that? i ! l ) 25 A It appeared an attempt by the consultant l ~ l I l i e i

IL - ~ ~ ~ ~ -... _..,, i 123 1 l Haimowitz l to at least attempt to put under an umbrella the I 2 f i l 3 most wide-ranging or possibly -- any particular i ' s-4 act whatsoever, I think that was a blatant or an 5 attempt by this consultant just to totally be (; harmless and totally free from any damages 7 whatsoever. 8 Q Or at least the damages that were 9 described in this particular clause? 10 A Well, that's one issue, but from the 11 clauses, too, he is putti.g in everything. 12 Q Would you turn now to Article XXIV 13 which is labeled " Nuclear Indemnity." (% a _ d' 14 Did you have any objection to the 15 provisions of Subsection A of that article? i 16 A Subparagraph 5 on page 14 is certainly one l 17 that is objectionable. 1 18 Q You had no objection to subparagraph 1 i 19 of Section A? 20 A well, let me do it in sequence. l 21 I didn't know if we could comply with i 22 a portion of 3. t l 23 Q No, let's just take paragraph 1. j i 24 A Oh, 1. L k, / Q You didn't have any objection to l 25 i i

1 Hainowitz '124 2 doing that, did you? 3 A I don't recall. 4 Q Do you know what that paragraph 1 is 5 about? 6 A Yes. I believe I do. 7 Q What is that about? I 8 A That would be the reference to the 3 g Price Anderson Act. 10 Q Do you know whether it is required 11 that you have such an indemnification in order to 12 operate a nuclear facility? 13 A I believe so. ,r^g (_j 14 Q So I take it GPU didn't have any 15 objection to giving that indemnification? 4 16 A I don't recall. 17 Q How about paragraph 2? Did you have i i 18 any objection to what that paragraph required 19 GPU to do? I .l 20 A I don't believe I had any objection to i 21 that. i 22 Q Do you know what that paragraph is l l 23 I about? 24 A I believe so. i f f'_}. Q' What is it about? 25 s o; i ~! 1L

li 1 Hairowitz l 2 A I believe this is the insurance or the ,in 3 nuclear liability insurance from the pools that 4 are available to owners of nuclear facilities, t 5 Q Do you know what that covers? 6 A I don't believe so. 7 Q Do you know how much the insurance 8 is? 9 MR. KLINGSBERG: When? 10 MR. WISE: Let's take it as of the 11 time in 1978 that this was being discussed. 12 I don't think it has been changed. 13 MR. KLINGSBERG: I know it-has been i 14 changed from time to time. 15 A I think it has been changed. i l 1(i Q Let's take it in 1978. 17 MR. KLINGSBERG: When in 1978? 18 MR. WISE: Mr. Klingsberg -- l 19 MR. KLINGSBERG: Well, I mean this I 20 has changed from time to time. i 21 MR. WISE: All right. I won't hold it i 22 for any. change that may have occurred during i i t 23 l the year 1978. i i 24 BY MR. WISE: l 25 Q Do you have any idea at any time I' p 1.

c. -

yw - ,,; s - ~ _ - - - = ~- LI .-126 1 Haimowitz 2 between 1975 and 1979 what the amount of the 3 insurance coverage was uuder the Price Anderson 4 Act? 5 A I believe that the total indemnity or 6 liability insurance under 1 and 2 was something I 7 like $565 million. i 8 Q But you don't know what types of loss I 9 that 560 some-odd million dollars worth of 4 10 protection covered? l A No, I don't. 11 12 Q Are you at all familiar with the I 13 exclusions from Price Anderson coverage? O' V 14 A No, I am not. t t I j 15 Q Looking now at paragraph 3, do you e i lii know what that paragraph is about? 17 A I believe so. 18 Q What does that provide? I 19 A That -is to insure that the consultant is 20 identified and named as an insured under the t 21 insurance policies from NELIA or MAELU, and the t 22 'second portion of that clause requires us to r i 23 secure, maintain any and all' amendatory { i, i f,l'. t 24 l endorsements which increase the protection , l,n t i ~ () 25 l afforded under the insurance-policies under I;; I I e ,t j I i .J- +, r.

6 ' ll 1 'Haimewitz 127 l l l' 9 this section so that as more reactors came on i '( 3 line the coverage increased under this 2 4 and decreased under 1. 5 Q You didn't have any objection to G that on behalf of GPU, did you? 7 A I don't remember, i 8 Q Do you know whether on behalf of GPU 9 you ever objected to putting a supplier or vendor 10 on the Price Anderson protection? 11 A I don't recall. 12 Q Ever doing that? i; 13 A I don't recall havin,g any -- making any f) 14 objections when requested to put them under the 15 policy. l IG Q Looking at paragraph'4, do you t 17 know what that is about? 18 A Yes. [ l 19 Q What does that provide? i { 20 A That provision would request us to also l l I 21 obtain and hold property -- property damage i 22 insurance and to arrange for the carrier or l 4 -23 carriers to waive any and all rights o f recovery l l 1 24 l in subrogation which they may have against the ) l l fg 25-consultant arising out of any loss, et cetera, V I I 1

a w. _ _.. _. - ~ - - - i 5 l Haimowitz. 128 2 et cetera. - g.., t 1 U-3 Q Do you know whether GPU carries 4 nuclear property damage insurance or did at the 5 time? G A I believe at the time that there was nuclear 7 prope'rty insurance. l 8 Q And you understood that that was 9 something separate from the .? rice Anderson .i 10 coverage? 11 A I believe so. 12 Q Do you know whether the nuclear 13 property damage coverage overlapped the Price f~) V 14 Anderson, in other words, that they both covered f 15 the same things or did they cover different things? i IG A I don't know. 17 Q Did you ever ask anybody? j 18 A I believe I discussed it with the Manager l 19 of Insurance. i +il 20 Q What did he tell you? l + 21 A I don't remember. I a 22 Q In negotiating this particular draft l l agreement, did it ever occur to you to find out i 23 i 24 l further information as to what the difference was ~ 25 between the nuclear property damage insurance i I Li. i

Q ^

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i. I 1 Haimowitz 129 2 and the Price Anderson coverage? 3 A Yes. 4 Q And that was your conversation with 5 Mr. Gerety? G A No, sir. 7 Q What did you do to try and find i 8 out? l 9 A At first a negotiation takes place between 10 negotiators and we attempt to come up with an 11 acceptable draft, a draft that we would feel I-12 from a contract point of view contains certain 13 safeguards. 14 Then that draft, after it has reached I 15 all of the concessions that we could possibly IG get, is sent for further review. 17 This article in its entirety would i 18 have been reviewed by the Manager of Insurance. I t i 19 Q All I am trying to do now is establish 20 whether during the negotiations, before it went i 21 to the Manager of Insurance, the extent of your l l 22 understanding of the insurance scheme that was l l 23 i available for nuclear facilities, that's the 24 point of this line of questioning, and what I am f, ~) 25 trying to. establish is whether or not you a J { y-- + - - - - 4 m

c- _ L 1 Haimowitz 130 k. 2' understood as the negotiations progressed what l 3 the relationship of these various clauses were 4 to one another. Now, my question is, to what 5 extent did you get information or have 6 information as to the difference between the 7 nuclsar property damage insurance which is covered j-8- in paragraph 4 of this article and the Price l 9 Anderson indemnification which is covered in the l i 10 first three paragraphs of this article? 11 A I don't recall having any information at 12 the time that we were' negotiating changes to-13 these provisions from the Insurance Department. r. / 14 Q Who had the altimate responsibility in -l 15 your mind for assuring that somebody at GPU 1 I i i 16 understood these various clauses and understood 17 the differences between the types of insurances 18 that they discussed and the coverages that they 19 provided?

i' l

20 A That would be the Contracts function when I i 'l L 21 it had an agreement which was ready to be reviewed. Y i 1 22 That would be a responsib'ility of the Contracts -j. l 23 Department. r_ 24 l Q. That would be your department? .i }L 25 : A Yes. ~ l' .i 'l {f i E

l i 1 Haimowitz 131 l l 2 l Q Did you ever enter into any agreements l l ' () 3 that contained insurance, nuclear insurance, 1 conditions similar to those in this draft 5 agreement which I understand was never entered (; into? 7 MR. KLINGSBERG: Well, I object to 8 that. 9 MR. WISE: I will withdraw that. We 10 will come back to it. 11 MR. KLINGSBERG: All right. 12 MR. WISE: it is not going away for 13 good. There is an easier way to get at it. () 14 MR. KLINGSBERG: Right. 15 BY MR. WISE: 16 Q Let me now ask you to look at page 14 l 17 of this agreement and subsection B of Article 18 XXIV, which is " Limitation of Liability; I i i 19 Indemnity." I Did you have any objection to that 20 21 Particular provision? f I 22 A Yes. 23 1 Q What was your. objection to it? 24 l A It appeared to me that the cons 31 tant i l }} 25 l attempted to have negligent acts excluded from i I 'l i L.

L ___ i ) 1 Haimowitz 132 2 any -- from bearing any responsibility for () n gligent acts. 3 .g Q Was that your only objection? A I didn't understand the word " indirectly," 5 g and I also was concerned about the 1 indemnification and holding the consultant 7 8 harmless notwithstanding the point that he p 9 could have, or at least he could have been 10 negligent. 11 Q Under your understanding of this 12 clause at the time that you had your objections, 13 would it have absolved the consultant for (~'/ ) 14 liability for damage to GPU's property on site s-1 ( 15 in the event of a nuclear accident? 1 i 16 MR. KLINGSBERG: I think we better 17 have that again. ~ 18 (Record read.) i 19 MR. KLINGSBERG: First of all, I am 20 not sure what you mear by absolved, and, f I 21 second of all, you don't state what the + i ) I i 22 cause was of the accident, so I will' object i to the form of the question. 23 l I 24 l MR. WISE: I will repPras,e the i 25 question. i i t g + ,I t-

yt o. I Hcimowitz 133 i 2 BY MR. WISE: 3 Q Under your understanding of this 1 clause, would it have absolved -- and by 5 " absolved" I mean made free from liability -- ti the consultant for damages to on-site property 7 resuiting from an accident regardless of the 8 consultant's negligence? 6 9 MR. KLINGSBERG: Well, that 10 Q Was that your understanding of the 11 clause? 12 MR. KLINGSBERG: That becomes even 13 more well, you ar,e taking a clause that 14 reads one way and changing a word here i i I 15 and there. I think that's awfully tricky. i i l 16 MR. WISE: I want to find out what i } l 17 the witness' underataniing of this clause I 18-

was, f

19 MR. KLINGSBERG: Ask him, if he has i i I 20 an understanding, and if he does, what it i I 21 is. Just don't take the clause and change 22 a word here and there. I don't think.that t 23 j is quite fair.- 8 1 i 24 MR. WISE: I think I.will" stand on my h~') ' 25 i question. You have your objection to the l %s-1 l 1 I i J^

A_. j 1 Haimowitz 134 l i l 2 form. If the witness could answer it, 3 I w uld like to have an answer. 4 MR. KLINGSB)RG: Do you want to have 1 5 the question again? l l 6 TIIE WITNESS: Please. 7 (Record read.) 8 MR. KLINGSBERG: You can answer, if you 9 can. 10 A I have difficulty with that question. 11 (Continued on following page.) 12 l 13 l .O i i i 15 i l I I l l 16 l I 17 18 l i 4 I i 19 l i i 20 l l 22 23 i 24 ha h 4 a i L.

L I Haimowitz 135 hd1 i i 2 Q Let me make it more simple for you. 3 You read this clause at the time, I 4 take it? 5 A That is correct. G Q And you had an objection to it? I 7 A 'yes. 8 Q And you stated that one of your 9 objections was that the consultant was attempting i 10 to absolve himself from certain liabilities, is 11 that correct? 12 A The consultant was attempting to absolve 13 himself, right, from certain liabilities. That is. r .( 14 correct. { 15 Q What liabilities did you understand j I I j 16 the consultant was attempting to absolve himself 17 from? 18 A I would imagine damage to his property on or I 19 off site. I 20 Q To his property? I ) 21 A Its property. 4 22 Q In other words, you did not interpret 23 this clause to refer to any. property that GPU might 24 own on site? You thought this meant that he was 25 l trying to absolve himself from liability to himself I l. I ~l .i

I 2 'l Haimowitz 136 2 from damage to his own property? b A/ MR. KLINGSBERG: Could we limit to 3 4 to one question at a time? i 1 You asked a question, and then the 5 i 6 witness starts to think about it, and then f 7 you ask another question. Which question do 8 we have? 9 BY MR. WISE: I 10 Q The. original question is what ti liabilities, Mr. Haimowitz, did you feel that the 12 consultant was attempting to absolve himself of by 13 way of this clause? 14 - A I can interpret it to be damage to property 15 on or off site belonging to the consultant. 1 l l l lii Q That is what you thought this meant? 1 17 MR. KLINGSBERG: The question is not 18 what l ~ 19 MR. WISE: Yes, it is, Mr. Klingsberg; a t 'f 20 yes, it is. It really is. l 'i ) 21 MR. KLINGSBERG: You don't know what 22 I am going to say. I MR. WISE: All right. 23 y t 24 MR. KLINGSBERG: The witness said "I j ) 25 can interpret" and I want-to make sure the 1 l i l l 1 i

L_.. 3 1 Heinowitz 137 i l 2 witness understands your question which is l 1 ' 'N l l t 3 you are not, as I understand it, requesting s .I for his current interpretation; you are I 5 asking for what he recalls was in his mind i I G at the time when he made this objection, is 7 that correct? 8 MR. WISE: That is correct. 9 MR. KLINGSBERG: O.K. 10 BY MR. WISE: 11 Q That was what was in your mind at the 12 time you had this objection. You were afraid that 13 the consultant was going to absolve himself from i s f a l 1J 14 liability to himself for damage to his own property? i 15 A I don't believe that was the question you 16 originally asked. 17 My concern was that the consultant l 18 tried to exclude or absolve himself from his 19 negligent acts. That was the original question i 20 and that was the answer, I was concerned i I 21 notwithstanding negligence. l I 22 I believe then you subsequently asked i 23 me to interpret the provision as written and then i 24 you asked a couple of questions conce nning that, L 25 and I have attempted to interpret that provision j i' i f f 5

l 4 l 4 1 -- Hainowitz 138 1 I l 2 with an answer that apparently upset you. 3 Q I don't'mean to be upset. I am 4 trying to get at your understanding of that clause 5 at the time of the negotiations that were talking G place with respect to this draft agreement. 7 Do you understand that part of my 8 question? I am not asking for your interpretation I 9 today. 10 Let.me just take this in pieces. 11 This is difficult and it is important. 12 You understand that I am asking for l 13 your interpretation at the t'ime of the negotiation? 14 Can we have that understanding between us? I 15 A Yes. 1 i [ 16 MR. KLINGSBERG: We can have any 17 understanding you want. 18 MR. WISE: We are going to be here for 19 a while. 1

i..

Ij-20 MR. KLINGSBERG: Not too long, f l l ) 21 BY MR. WISE: l 23 Q Now, at the time that this negotiation was taking place, you had.an objection to this I l 23 J l i l 24 clause, correct? I 25 l- .A-That is correct. 1 {'

15~ .1 Haicowitz 139 l L 9 Q You-understood the clause at:the !,( ) 3 time, I take it? 4 A I believe so. 5 Q Did you understand the clause to I G absolve the consultant of liability for certain 7 types.of damages under certain conditions? 8 A Yes. 9 Q Now, I want to focus on the types of t 10 damages that you understood the consultant to be 11 attempting to absolve himself from, and my ~ 12_ question is, whether within those. types of damages 13 was included damage to on si;e property in the () 14 event of a nuclear accident, on site property 15 belonging to GPU or its operating subsidiaries. j 4 I 16 A I don't remember in 1977 what anybody or, rl-I am not sure of what the consultant 17 at least, 18 thought that he was excluding himself. 19 I do state that the problem that i 20 I had with the provision as written were the i 91 -terms "notwithstanding negligence on the part of ll' ~' l 22 the consultant" and-what we attempted to exclude l 23 from the subparagraph B were the words i a 24 "notwithstanding negligence." ~ t-25 i And then, of course, the others h 1 u

gn, l l l 6 1 Heinowitz 140 i i 2 the other portions toward the end. I 3 Q Why did you want to exclude the l 4 words "notwithstanding negligence"? 5 A It would appear unreasonable to ask or to 6 indemnify or to hold harmless somebody for a 7 negligent act. 8 Q If that phrase, "nothwithstanding 9 negligence on the part of the consultant," had 10 been removed during negotiations, as you sought, I 11 would the clause have then been acceptable to i 12 CPU or to you? i l 13 MR. KLINGSBERG: Now, I object to that. D 14 That is hypothetical. I mean that is really 1 15 getting far afield. 1 l l 16 MR. WISE: I am just trying to find 17 out whether that was his only objection to 18 the clause or whether he had other objections. I 1 19 MR. KLINGSBERG: Then I think you should l1 i 20 ask that question. i l ) 21 BY MR. WISE: 22 Q Was that your only objection to the o 't-23 clause or did you have other objections? F 24 i MR. KLINGSBERG: I think*he already b-i- s ( w) 25 l testified. [ i I, i i i il

/ I Hainowitz 141 \\ 2 MR.' WISE: Mr. Klingsberg, I have a n/ s 3 suspicion that you are trying to obstruct 4 this examination at this point. I I 5 MR. KLINGSBERG: I am not trying to G obstruct it at all. I shall cite you 7 nhapter and verse if you want to in Mr. Fiske's, 8 and your defense of depositions in regard to 0 hypothetical questions. 10 I have no objection to your asking 11 what his objections were. .He has already 12 t'estified about it. If you want to go J 13 through it again, we will go through it again. (. 14 BY MR.- WISE: j-15 Q Let me ask you this question, Mr. j l 16 Haimowitz: At the time you were negotiating this 17 ' agreement, did you have any objection to 18 indemnifying the consultant.or losses, claims, I 10 damages, expenser. or liabilities resulting from a i + s I i i i 20 nuclear reaction, radioactivity and contamination 4 ) 21 instances other than where the consultant had been 3 22

• negligent?,

,A 23 A I.believe, with the. exclusion of the term ll 'i 24 l " negligent," I would have recommended -that i l' ,i, f] 25 provision subject to,.you know, further reviews. l \\ t i 'f.l i. l s e Y j ei.; \\ ,1

L.. i f I Heimowitz 142 l i l l' 2 Q Was it your understanding at the time l - Y 3 that that clause would have prohibited GPU from b 4 seeking to recover for loss of on site property 6 5 in situations, recover from ohe consultant, in .I l (i situations other than where the concultant was s I 7 negli' gent? l 8 MR. KLINGSBERG:

Well, 9

THE WITNESS: I am confused. 1 10 MR. KLINGSBERG: Which clause are you 11 talking about now? Are you. talking about 12 the whole article now again, or are you 1 13 talking about the one, the first sentence or l x Im) 14 the second sentence? s j l 15 MR. WISE: I asked him whether he i Iti would have an objection,tand' he said if the i 17 clause concerning negligence,had been 4 4 18 removed, he would have recommen'ded that the I i 19 MR. Kf E fj$ BERG: You were talking 20 then ab 6 .b in.lemnity clause, not about ^ 21 the firg2 part of it. } 22 MR. WISE: Let's restrict it to 23 indemnity, if that' helps. 24 i BY MR. WISE: l + 25 Q Are you able to answer the question? l e i i l s s 's ?

(___--m ] Hai: owitz 143 1- \\ f; ' y s' % s i ? 2 MR. KLINGSBERG: What is the question. f s f) ~~ y y MR. WISE: O.K., we will go back. 3 BY MR. WISE: 5-Q Mr. Haimowitz, was it your t I 6 understanding'of this clause that -- 9 i 7 MR. KLINGSBERG: Which clause is 8 ."this clause"? D MR. WISE: Section B, taken as a 10 whole. >t1 MR. KLINGSBERG: The whole B7 12 MR. WISE: R i g h t'. .i N \\ L: ..' 13 BY MR. WISE: Q3 4 ". < g4 Q Was it your understanding at the time s 13 that this clause, as written and submitted by the I i 16 consultant, would have prevented GPU from recovering I 17 from the consultant for damage to GPU's on site 18 property in the' event of a nuclear accident? Did ~l 10 you have that understanding at the time? - 'l ' i 20 A, I don't believe I could state that I had l g 31 that understanding at that time. l 'l' (continued on next page) 22 i 'l I 23 j l i 24 i a s l', -1 1 I 4 k. s .t !\\ .g t

s.

57

L 1' Haimowitz-143A MR. KLINGSBERG: This is'a-good time. It is about 5-minutes past. 3 MR. WISE: Sure. .g (Time noted: 4:40 p.m.) 5-6 i 7 MILTON HAIMOWITZ .l 8. d Subscribed and sworn.to 9 ,-) 10 before me this day .Il of 1981. 12 i f 13 f 14 1 15 !~ i. l' l Iti 17 '18 l-I I' 20 i f i l . ) 21 o.>. I + -) '.I 23 l t t 24 j 'l:) D. 2s .j' .,~!-

j-.

i r

L __. _ - -- _ _ _m l e 111 1 b 2 g E R T I F_ 1 g A T_ E ~3. STATE OF NEW YORK )

ss.:

4 COUNTY OF NEW YORK ) 5 6 I, CH ARr "' SHAPIRo, CSR a 7 Notary Public within and for the State of New York, 8 do hereby certify that the foregoing deposition 'O of MILTON HAIMoWITZ Was taken Defore 10 me on wodnesday, April 22, 1981 11 That the said witness was duly sworn 12 before the commencement of him testimony and 13 that the within' transcript is a true record of said 14 testimony; 15 That I am not connected by blood or i 16 marriage with any of the parties herein nor f-II interested directly or indirectly in the matter in I 18 controversy, nor am I in the employ of any of the ~!. ID counsel. i 20 IN WITNESS WHERi 'F, I have hereunto set-my hand this A h day of f\\PR(L 198_1. 21 22 M 24 CHARLES % PIRo, CSR g._s-' 5

~~ April 22, 1981 145 I N D E X O WITNESS PAGE Milton Haimowitz 3 EXHIBITS DEFENDANTS' FOR IDENT. 23 One-page summary of the education and job history of Milton Haimowitz. 4 1 1 I M}}