hereto and hereby made a part hereof, the Contractor anticipates that it will be required to pay to the Government various amounts allocable to the fiscal year under review and estimated to aggregate the sum of ($------------) Dollars; that, pursuant to price adjustment provisions in each of the renegotiable contracts set forth in Part 2 of Schedule A hereof, the Contractor anticipates that it will receive from the Government various amounts allocable to the fiscal year under review and estimated to aggregate the sum of

($------------) Dollars; and that the Contractor has therefore set up a liability reserve in the amount of -----------) Dollars, which said amount has been allowed to the Contractor as a reduction of renegotiable income for the fiscal year under review. In the event that it is finally determined that the aggregate liability of the Contractor to the Government pursuant to the price adjustment provisions in said contracts, allocable to the fiscal year under review, exceeds the aggregate liability of the Government to the Contractor pursuant thereto by an amount less than the amount of such reserve, the Contractor agrees that the difference between the amount of such excess and the amount of such reserve shall be deemed to be additional profits to be eliminated pursuant to the Act, and the Contractor agrees that it will pay to the Government an amount equal to the difference between the amount of any such additional profits and the amount of the tax credit, if any, provided by section 1481 of the Internal Revenue Code of 1954. Any such payment shall be made within thirty (30) days after the amount of such additional profits has been determined, except that if the Contractor shall have applied for a tax credit computation within fifteen (15) days after such date, then such payment shall be made within thirty (30) days after the amount of such additional profits has been determined or within thirty (30) days after the Contractor receives the tax credit computation from the Internal Revenue Service, whichever is later.

(2) In a clearance agreement, when aggregate net downward price revision is anticipated, substitute the following for the second sentence in the form of clause set forth in subparagraph (1) of this paragraph (see § 1457.5 (d) (2) of this subchapter):

It has been determined that the Contractor may realize additional profits not exceeding the sum of

(Margin to clearance level) Dollars without incurring any liability for excessive profits for the fiscal year under review. In the event that it is finally determined that the aggregate liability of the Contractor to the Government pursuant to the price adjustment provisions aforesaid, allocable to the fiscal year under review, exceeds the aggregate liability of the Government to the Contractor pursuant thereto, and if such net liability of the Contractor to the Government is less than the amount of the reserve hereinabove described, the difference between such two

amounts shall represent the unused portion of the reserve, and the Contractor agrees that the amount by which the unused portion of the reserve exceeds said sum of ($—-------)

(Repeat amount last above stated) Dollars shall be deemed to be additional profits to be eliminated pursuant to the Act, after being reduced by the sum of Dollars representing the taxes measured by income, other than Federal taxes, which are attributable to the portion of the profits of the Contractor which is not excessive, and the Contractor agrees that it will pay to the Government an amount equal to the difference between the amount of any such additional profits as so adjusted and the amount of the tax credit, if any, provided by section 1481 of the Internal Revenue Code of 1954.

(3) The form of clause to be used in a refund agreement when aggregate net upward price revision is anticipated, is as follows:

ART. Special provision relating to pending price revision.-The Contractor represents that, pursuant to price adjustment provisions in each of the renegotiable contracts set forth in Schedule A attached hereto and hereby made a part hereof, the Contractor anticipates that it will be required to pay to the Government, or that it will receive from the Government, various amounts allocable to the fiscal year under review. In the event that it is finally determined that the aggregate liability of the Government to the Contractor pursuant to the price adjustment provisions in said contracts, allocable to the fiscal year under review, exceeds the aggregate liability of the Contractor to the Government pursuant thereto, the Contractor agrees that the amount of such excess shall be deemed to be additional profits to be eliminated pursuant to the Act, and the Contractor agrees that it will pay to the Government an amount equal to the difference be tween the amount of any such additional profits and the amount of the tax credit, if any, provided by section 1481 of the Internal Revenue Code of 1954. Any such payment shall be made within thirty (30) days after the amount of such additional profits has been determined, except that if the Contractor shall have applied for a tax credit computation within fifteen (15) days after such date, then such payment shall be made within thirty (30) days after the amount of such additional profits has been determined or within thirty '(30) days after the Contractor receives the tax credit computation from the Internal Revenue Service, whichever is later.

(4) In a clearance agreement, when aggregate net upward price revision is anticipated, substitute the following for the second sentence in the form of clause set forth in subparagraph (3) of this paragraph (see § 1457.5 (d) (2) of this subchapter):

It has been determined that the Contractor may realize additional profits not exceeding the sum of

(Margin to clearance level)

Dollars representing the taxes measured by income, other than Federal taxes, which are attributable to the portion of the profits of the Contractor which is not excessive, and the Contractor agrees that it will pay to the Government an amount equal to the difference between the amount of any such additional profits as so adjusted and the amount of the tax credit, if any, provided by section 1481 of the Internal Revenue Code of 1954.

(h) Special provision for merger, consolidation, bankruptcy, etc.-When an agreement is made with a party other than the party whose receipts or accruals are the subject of the renegotiation, the contracting party should be designated as the contractor; article 1 should be renumbered article 2; and a new article 1 should be inserted describing the legal relationship between the contractor and such other party (the latter to be referred to therein as "the Predecessor Contractor" or otherwise appropriately designated). For example, if, as the result of a formal corporate merger or consolidation after the close of the fiscal year under review, in accordance with State law or otherwise, the predecessor contractor has been dissolved and the contractor has succeeded to all of its rights and liabilities, a provision in substantially the following form may be used:

ARTICLE 1. Transfer to Contractor.-The Contractor represents that on or about

the Contractor acquired all of the assets, and assumed all of the liabilities, of ---

a corporation organized under the laws of the State of (hereinafter re

ferred to as "the Predecessor Contractor"). When the contractor is the executor or administrator of a deceased individual proprietor, the latter should be designated in article 1 as "the decreased" and the article should set forth the date of his death and the date of appointment

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of the contractor as his personal representative. Similar information should be set forth when the agreement is made with a trustee in bankruptcy, an assignee, or other legal representative.

(i) Special provisions for consolidated renegotiation. When an agreement is made with an affiliated or related group which has been renegotiated on a consolidated basis, the agreement should be made with the agent of the group designated in accordance with section 1464.7(b) of this subchapter and should be varied as follows after the designation of the contracting parties:

Whereas :

A. The Contractor and the following other corporations [persons] (hereinafter collectively referred to as "the Group") constitute and qualify as an "affiliated [related] group" in accordance with the provisions of Part 1464 of the Renegotiation Board Regulations under the Renegotiation Act of 1951, as amended or supplemented (hereinafter referred to as "the Act").

B. Pursuant to said regulations, the Group has requested and has been accorded consolidated renegotiation for the fiscal year ended

[for the respective fiscal years set forth in Exhibit B attached hereto and hereby made a part hereof] (hereinafter referred to as "the fiscal year [years] under review").

C. Pursuant to said regulations, the Group has designated the Contractor as the agent of the Group and has authorized the Contractor as such agent to represent all members of the Group in all respects in connection with the consolidated renegotiation of the Group for the fiscal year [years] under review.

Now, therefore, the parties hereto agree as follows: ARTICLE 1. Application of agreement to the Group.The Contractor agrees that all representations, warranties and agreements made herein by the Contractor are made for and on behalf of itself and all other members of the Group and shall be applicable to itself and each other member of the Group, and that each other member of the Group shall be bound by such representations, warranties and agreements as fully as if such member were named herein as the Contractor and had executed this agreement for itself.

ART. 2. Profits to be eliminated.-As a result of renegotiation pursuant to the Act, the Government and the Contractor hereby determine and agree that of the profits derived by the Group during the fiscal year [years] under review from contracts and subcontracts subject to the Act, the sum of

The agreement should then continue in customary form, the words "the Contractor" being changed to "the Group" or "the respective members of the Group," or otherwise, as required. An additional article 12 should be included, reading as follows:

ART. 12. Joint and several liability.—The members of the Group shall be jointly and severally liable for the payment of any and all amounts payable pursuant to this agreement.

Exhibit B should contain a list of the members of the consolidated group and should set forth the following information with respect to each: (a) Name, (b) state of incorporation, (c) principal office, (d) allocable portion, if any, of the profits to be eliminated [insert "None" when applicable].

1498.3 Execution of renegotiation agreement by contractor.-(a) Corporate contractor. (1) The execution of a renegotiation agreement by a corporate contractor must be accompanied by a certified resolution of its Board of Directors (or other body) authorizing such execution. The adoption and form of the resolution, and the execution of the certificate, must comply with the formalities required by any State laws involved.

(2) The resolution itself should state: (i) That the agreement is being entered into pursuant to the Renegotiation Act of 1951;

(ii) The amount of profits to be eliminated and the fiscal year for which they are to be eliminated;

(iii) The title of the corporate officer who is being authorized to execute the agreement on behalf of the corporation; and

(iv) The title of the corporate officer authorized to attest the execution and to affix the corporate seal.

(3) The certificate should state:

(i) The name and capacity of the officer signing the certificate;

(ii) The body adopting the resolution (Board of Directors or authorized executive committee or similar body);

(iii) The date of the meeting;

(iv) That a quorum was present throughout the meeting;

(v) That the resolution was duly adopted; (vi) If the particular agreement is specifically referred to in the resolution, that the agreement to which the certified resolution is

attached is the same as that referred to in the resolution; and

(vii) That the resolution has not been modified or rescinded and that it is in full force and effect.

(4) If the resolution is adopted by a committee or similar body (other than the Board of Directors), the certificate must also include satisfactory evidence of the authority of such body to act.

(5) Any resolution and certificate complying with the requirements of this paragraph will be acceptable to the Board. The resolution and certificate may, but need not, be in the following suggested form:

was present and acting throughout, the following resolution was duly adopted, and that said resolution has not since been modified or rescinded and is now in full force and effect:

Resolved: That the proposed agreement between the Corporation and The Renegotiation Board to be entered into pursuant to the Renegotiation Act of 1951, as amended, providing for the elimination of excessive profits of the Corporation in the amount of $‒‒‒‒‒‒‒‒‒‒ from contracts and subcontracts subject to said Act for the fiscal year of the Corporation ended be and hereby is approved; and that --. the be and hereby is authorized and directed, on behalf of the Corporation, to execute and deliver such agreement in the form presented to this meeting and that the --Secretary of the Corporation, be and hereby is authorized to attest such execution and affix the seal of the Corporation to said agreement when so executed.

ment or court order or provision of law (as when the agreement is executed on behalf of a corporation in dissolution, or an estate or trust, or when the authority derives from a power-ofattorney), such authority should be supported by proper evidence thereof.

(c) Authority to vary.

The Board or the Regional Board conducting the renegotiation may authorize departures from the requirements of this section.

1498.4 Letter transmitting renegotiation agreement to contractor.-(a) Corporation and sole proprietorship.*

(Date)

Gentlemen: Enclosed are five copies of a proposed renegotiation agreement covering your fiscal year ended

Four copies of the agreement should be executed and returned. The fifth carbon copy may be retained for your files. Your corporate seal should be affixed to each executed copy of the agreement, and each executed copy should be accompanied by a certified resolution of your Board of Directors. For your guidance there is enclosed a suggested form of certified resolution. However, any other resolution which complies with the requirements of § 1498.3 of the Renegotiation Board regulations will be satisfactory. Each copy of Exhibit A attached to the agreement should be initialed in the space provided therefor. The date of your execution of the agreement should be inserted in the space provided therefor on the signature page. The date of execution on behalf of the Government, which will be the date of the agreement, will be inserted by this office.

For your guidance and use, there is also enclosed á form of letter to be addressed by you to the Director of Internal Revenue pursuant to Article 3 (a) of the agreement. This letter will enable you to obtain the amount of the tax credit allowable under section 1481 of the Internal Revenue Code of 1954. A copy of your letter to the Director, showing the date of actual mailing thereof, should be forwarded to this office.

After execution of the agreement on behalf of the Government, one fully executed copy will be returned to you for your files.

Your prompt attention to this matter will be appreciated.

(Date)

Gentlemen: Enclosed are five copies of a proposed renegotiation agreement covering your fiscal year ended

Four copies of the agreement should be executed by each of the partners and returned to this office. Each copy of Exhibit A attached to the agreement should be initialed by at least one of the partners, in the space provided therefor. The date of your execution of the agreement should be inserted in the space provided therefor on the signature page. The date of execution on behalf of the Government, which will be the date of the agreement, will be inserted by this office.

For your guidance and use, there is also enclosed a form of letter to be addressed by each of the partners to the Director of Internal Revenue pursuant to Article 3 (a) of the agreement. This letter will enable each partner to obtain the amount of the tax credit allowable under Section 1481 of the Internal Revenue Code of 1954. A copy of the letter sent by each partner, showing the date of actual mailing thereof, should be forwarded to this office.

After execution of the agreement on behalf of the Government, one fully executed copy will be returned to you for your files.

Your prompt attention to this matter will be appreciated.

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Notice is hereby given that at a meeting held on this Regional Board made a final recommendation that you realized excessive profits in the amount of $------- for your fiscal year ended This action of the Regional Board completes its processing of the case and constitutes the recommendation which it has forwarded to The Renegotiation Board for final determination.

You have heretofore advised that you are willing to enter into an agreement for the elimination of such excessive profits. Enclosed herewith are five copies of a proposed renegotiation agreement for this purpose.

(2) The penultimate paragraph in each such form will be deleted in its entirety and the following inserted in lieu thereof:

If The Renegotiation Board advises that it is in accord with the determination set forth in the enclosed agreement, the agreement will be executed on behalf of the Government and one fully executed copy will be returned to you for your files.

A certified (or photostatic) copy of the return (s) as filed for such taxable year is enclosed for your use in computing the amount of credit. Attached thereto is a statement, signed by (if a corporation, insert: a responsible official of) the undersigned taxpayer, certifying that such copy is a true and complete copy of the return(s) as signed (insert if applicable: except that schedules not pertinent to the tax credit computation are omitted. If you require copies of schedules or other papers attached to the return(s) as filed, they will be furnished upon request).

Please forward your reply (original and three copies) directly to the Director, Office of Administration, The Renegotiation Board, Washington 25, D. C., and one signed copy to the undersigned.

Certified (or photostatic) copies of the partnership return for the year in question and of my individual return in which was included my distributive portion of the excessive profits to be eliminated are enclosed for your use in computing the amount of credit. Attached to each such return is a statement, signed by the undersigned, certifying that such copy is a true and complete copy of the return as signed (insert if applicable: except that schedules not pertinent to the tax credit computation are omitted. If you require copies of schedules or other papers attached to the returns as filed, they will be furnished upon request). Please forward your reply (original and three copies) directly to the Director, Office of Administration, The Renegotiation Board, Washington 25, D. C., and one signed copy to the undersigned.

Very truly yours,

NOTE TO CONTRACTOR: When the letter of each partner in this form is sent to the Director of Internal Revenue, the date of actual mailing should be indicated on the copy transmitted to the Regional Board. If the original return or, if amended, the latest amended return of the partnership or of the requesting partner for the taxable year involved has been filed more than one year before the date of the letter, such return need not be submitted and the second paragraph of the letter may be omitted or appropriately varied.

1498.6 Clearance notice.-(a) Class B case.

NOTICE OF CLEARANCE AFTER ASSIGNMENT

Whereas :

------

A. A financial statement was heretofore filed with The Renegotiation Board pursuant to the Renegotiation Act of 1951, as amended (hereinafter referred to as "the Act"), by a corporation organized and existing under the laws of the State of (hereinafter referred to as "the Contractor"), with respect to the fiscal year of the Con tractor ended (hereinafter referred to

as "the fiscal year under review”).

B. The Contractor has submitted financial and other data pertaining to its operations for the fiscal year under review and has represented such data to contain a true and correct statement of all amounts received or accrued and paid or incurred during the fiscal year under review with respect to contracts and subcontracts subject to renegotiation pursuant to the

Act.

C. Due consideration has been given to such data in accordance with the Act and the Renegotiation Board Regulations promulgated pursuant thereto. D. An assignment was heretofore made to the Regional Renegotiation Board to conduct renegotiation proceedings with the Contractor pur