(a) The performance of this Agreement may be terminated by the United States Government in accordance with this section, in whole, or from time to time in part, whenever the Contracting Officer shall determine that such termination is in the best interest of the United States Government.

(b) The performance of this Agreement may be terminated by Her Majesty's Government, in whole, or from time to time in part, whenever Her Majesty's Government shall determine that the overriding defence needs of Her Majesty's Government necessitate such termination.

(c) Termination by either Government shall be effected by delivery to the other Government of a written notice of termination specifying the extent to which performance of this Agreement is terminated and the date upon which such termination becomes effective.

(d) After receipt of the notice of termination, and except as otherwise agreed between the two Governments, Her Majesty's Government shall (i) terminate subcontracts to the extent that they relate to this Agreement or the part thereof so terminated; (ii) place no further subcontracts related to this Agreement or the part thereof so terminated; (iii) settle all outstanding liabilities and all claims arising out of such termination of subcontracts; (iv) assign to the United States Government, in the manner, at the times, and to the extent requested by the Contracting Officer any outstanding right, title and interest of Her Majesty's Government under the subcontracts so terminated; (v) transfer title and deliver to the United States Government, in the manner and at the times requested by the Contracting Officer (except in so far as the same or any part thereof may be retained by Her Majesty's Government, sold to third parties or otherwise disposed of in accordance with this Agreement), against payment to be provided for in the settlement amendment referred to in paragraphs (e) and (f) below, (A) the fabricated or unfabricated parts, work in process, completed work, supplies and other material produced as a part of, or acquired in connection with the performance of this Agreement of the part thereof terminated by the notice of termination, including the performance terminated under related subcontracts, and (B) the completed or partially completed plans, drawings, information and other property which, if the Agreement had been completed, would have been required to be furnished to the United States Government; (vi) use their good offices to sell or to assist the United States Government in selling in the

manner at the times, to the extent, and at the price or prices authorised by the contracting Officer, any property of the types referred to in this paragraph, provided, however, that Her Majesty's Government may acquire any such property under the conditions prescribed by and at a price or prices authorised by the Contracting Officer, any property of the that the proceeds of any such sale or acquisition shall be applied in reduction of any payments to be made by the United States Government to Her Majesty's Government under this Agreement or shall otherwise be credited to the price or cost of the supplies or services covered by this Agreement or paid in such other manner as may be agreed between Her Majesty's Government and the Contracting Officer; (vii) complete performance of such part of the Agreement as shall not have been terminated by the notice of termination; and (viii) take such action as may be necessary, or as the Contracting Officer may reasonably require, for the protection and preservation of the property in which the United States Government has or may acquire an interest under this paragraph.

(e) Her Majesty's Government shall submit to the Contracting Officer their termination claim as soon as possible after receipt of notice of termination. Her Majesty's Government and the Contracting Officer shall agree upon the amounts to be paid to Her Majesty's Government by reason of the total or partial termination of this Agreement pursuant to this section. This Agreement shall be amended accordingly and Her Majesty's Government shall be paid the agreed amount. (f) The amendment settling this Agreement in the event of termination ("settlement amendment") shall be effected under the guidance of sound principles of commercial cost accounting. Except as provided in paragraphs (j) and (k) of this section such amendment shall provide for reimbursement to Her Majesty's Government of the costs reasonably incurred by Her Majesty's Government in the performance of the terminated Agreement or the terminated part thereof or in settlement of terminated subcontracts. Such amendment shall also provide for payment to Her Majesty's Government for any property transferred to the United States Government, being property of the types referred to in subparagraph (v) of paragraph (d) above. Nevertheless the settlement amendment may provide, wholly or partly, for payment of such other sums in lieu of actual costs as may be determined by negotiation between the parties to be fair compensation for the terminated Agreement or the terminated part thereof. (g) In effecting the settlement amendment under subparagraph

(f) hereto, costs shall be considered to include the following: (i) The costs incurred in the performance of the termi

nated Agreement or the terminated part thereof, including initial costs and preparatory expenses allocable thereto, but exclusive of any costs attributable to completed supplies paid or to be paid for at the Agreement price.

(ii) The cost of settling and paying claims arising out of the termination of subcontracts or orders, as provided in paragraph (d) (iii) above, which are properly chargeable to the terminated Agreement or the terminated part thereof (exclusive of amounts paid or payable on account of supplies or materials delivered or services furnished by subcontractors or vendors prior to the effective date of the notice of termination, which amounts shall be included in the costs payable under (i) above).

(iii) The reasonable costs of settlement, including accounting legal, clerical and other expenses reasonably necessary for the preparation of settlement claims and supporting data with respect to the terminated Agreement or the terminated part thereof, and for the termination and settlement of subcontracts thereunder, together with reasonable storage, transportation and other costs incurred in connection with the protection or disposition of property allocable to this Agreement.

(h) If the termination hereunder be partial, prior to the settlement of the terminated part of this Agreement, Her Majesty's Government may file with the Contracting Officer a request in writing for an equitable adjustment of the price or prices specified in this Agreement relating to the continued part of this Agreement (i.e., the part not terminated by the notice of termination), and such equitable adjustment as may be agreed upon shall be made in such price or prices.

(i) The total amounts to be paid by the United States Government under this section shall not exceed the total Agreement price, as reduced by the amount of payments otherwise made or otherwise required to be made under this Agreement. (j) If this Agreement is terminated in whole or in part by Her Majesty's Government pursuant to paragraph (b) of this section (relating to the overriding defence needs of Her Majesty's Government) the termination shall be without cost to the United States Government and without liability of either Government to the other, except that Her Majesty's

Government shall be liable for the repayment of any advance or progress payments made to Her Majesty's Government to the extent that they are not compensated by the price of goods delivered or services performed in accordance with this Agreement provided that the parties hereto may agree upon the transfer to the United States Government of any or all of the property of the types referred to in paragraph (d) (v) above, in which event the United States Government will pay to Her Majesty's Government (i) the price provided in this Agreement for items completed in accordance with the Agreement requirements, and (ii) a price mutually agreed upon for other items.

(k) Upon notification to the United States Government by Her Majesty's Government that Her Majesty's Government are precluded from performing this Agreement in accordance with its terms and conditions due to circumstances beyond their control, the two Governments will consult with a view toward negotiating an amendment of this Agreement. If the two Governments cannot agree to an amendment extending the time of performance or otherwise modifying this Agreement so as to enable Her Majesty's Government to perform it, the United States Government may terminate this Agreement by reason of the inability of Her Majesty's Government to perform it. The provisions of paragraphs (f) and (g) of this section shall not be applicable to termination under this paragraph (k); however, the two Governments will consult with a view to reaching an equitable adjustment of the costs and expenses to be borne by the respective Governments; it being understood, nevertheless, that such equitable adjustment may, depending upon the circumstances of a particular case, consist of a settlement without cost to the United States Government. The parties hereto may agree upon the transfer to the United States Government of any or all of the property of the types referred to in subparagraph (d) (v) above, in which event the United States Government will pay to Her Majesty's Government the price provided in this Agreement for completed items and the price mutually agreed upon for other items.

8. Taxes

(a) The Agreement prices, including the prices in subcontracts hereunder, do not include any tax or duty which the United States Government and Her Majesty's Government have agreed shall not be applicable to expenditures in the United Kingdom by the United States Government, or any other tax or duty not applicable to this Agreement under the laws of

the United Kingdom. If any such tax or duty has been included in the Agreement price, through error or otherwise, the Agreement price shall be correspondingly reduced. (b) If, after the Agreement date, the United States Government and Her Majesty's Government shall agree that any tax or duty included in the Agreement prices shall not be applicable to expenditures in the United Kingdom by the United States Government, the Agreement prices shall be reduced accordingly.

9. Subcontracting

(a) Her Majesty's Government undertake that in any subcontract made in connection with this Agreement they will employ the same procurement methods and procedures as they employ in contracting for their own requirements.

(b) Her Majesty's Government agree to indemnify and save harmless the United States Government against all claims and suits of whatsoever nature arising under or incidental to the performance of this Agreement by any subcontractor against Her Majesty's Government or the United States Government. 10. Payments.

(a) Her Majesty's Government shall be paid, upon the submission of properly certified invoices or vouchers, price(s) as prescribed in this Agreement for supplies delivered and accepted, or services performed and accepted, less any payments already made on account of supplies or services as provided in (b) hereof. A certificate of receipt by a representative of the Secretary or the Contracting Officer authorised to sign such a receipt shall be accepted as sufficient evidence of delivery. (b) Her Majesty's Government may issue invoices to the Contracting Officer at quarterly intervals covering reimbursement for deliveries accepted during that quarter in connection with this Agreement, except as otherwise provided elsewhere in this Agreement.

(c) Payment will be due one month from date of invoice.

(d) The foregoing does not preclude possible arrangements for special payments in particular cases.

11. United States Officials Not to Benefit

No member of or delegate to the Congress of the United States, or resident commissioner of the United States, shall be admitted to any share or part of this Agreement, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this Agreement if made with a corporation for its general benefit.