ing of fraud or malfeasance or a willful misrepresentation of a material fact, this agreement shall not, for the purposes of the act, be reopened as to the matters agreed upon, and shall not be modified by any offcer, employee, or agent of the United States, and this agreement and any determination made in accordance herewith shall not be annulled, modified, set aside or disregarded in any suit, action or proceeding.

ART. 9. Waiver of claims. The Contractor waives any and all claims against the United States or a contractor or subcontractor which, if realized, would constitute income subject to renegotiation under the Act for the fiscal year under review; provided, however, that this wavier shall not extend to or be deemed to include (1) claims reported by the Contractor in this renegotiation and (2) claims for reimbursement for costs not reported by the Contractor in this renegotiation.

In the event that the Contractor shall receive payment or credit for any claim waived in this article 9, the Contractor agrees that the amount of such payment or credit shall be deemed to be additional profits to be eliminated pursuant to the act, and the Contractor agrees to pay to the Government an amount equal to the difference between the amount of such additional profits and the amount of the tax credit, if any, provided by section 1481 of the Internal Revenue Code of 1954.

ART. 10. Interest. The Contractor agrees to pay to the Government interest at the rate of four (4%) per centum per annum upon any unpaid portion of the amount to be paid pursuant to the provisions of article 4, article 5, or article 9 hereof, which said interest shall accrue and be payable from and after the due date of such unpaid portion and shall continue until payment thereof.

or "a sole proprietor" or "a sole proprietor, doing business under the firm name of --".

(b) Variations for clearance agreement. In a clearance agreement, articles 3, 4, 5, 9, 10, and 11 should be deleted in their entirety and article 1 should be varied to read as follows:

As a result of renegotiation pursuant to the Renegotiation Act of 1951, as amended or supplemented (hereinafter referred to as "the act"), the Government and the Contractor hereby determine and agree that the Contractor realized no profits during its fiscal year ended (herein

after referred to as "the fiscal year under review") from contracts and subcontracts subject to the act which should be eliminated pursuant to the act.

(c) Variation in article 1 ("floor" provision). If the amount of excessive profits to be refunded is limited by the provisions of section 105 (f) (1) or (2) of the act, delete article 5 in its entirety and the period at the end of article 1, and add the following to article 1:

... but for the limitation set forth in section 105 (f) (1) [105 (f) (2)] of the act. In view of such limitation, the Government and the Contractor determine and agree that the sum of ($------) dollars represents the amount of profits which should be eliminated pursuant to the act.

(d) Variations in article 3 (tax credit). (1) If the Contractor has not filed its Federal income or income and excess profits tax returns, or has filed

such returns but has not included in income reported therein the profits to be eliminated, article 3 (a) should be varied to read as follows:

(a) The amount of profits agreed in article 1 hereof to be eliminated not having been included in income in the Federal income tax return (or income and excess profits tax returns) of the Contractor for the fiscal year under review, the taxes of the Contractor for the fiscal year under review payable under the Internal Revenue Code are not decreased in any amount by reason of the application of section 1481 of the Internal Revenue Code of 1954 and no amount will be allowed under said section 1481 as a credit against the amount of profits agreed in article 1 hereof to be eliminated. In the event, however, that Federal income or excess profits taxes shall be assessed upon the amount of profits agreed in article 1 hereof to be eliminated, or any part thereof, there shall be allowed to the Contractor the credit, if any, to which the Contractor shall be entitled under section 1481 of the Internal Revenue Code of 1954 with respect to such profits.

(2) When the Contractor has included in income as reported in its tax returns less than all of the profits to be eliminated, article 3 (a) should be varied to read as follows:

(a) The Contractor represents that of the profits agreed in article 1 hereof to be eliminated, only the sum of

($------) dollars was included in income in the Federal income tax return (or income and excess profits tax returns) of the Contractor for the fiscal year under review and that the Contractor has applied or will apply within fifteen (15) days after the date that this agreement is executed by the Contractor for a computation by the Internal Revenue Service, based upon the assessments made to the date of such computation, of the amount by which the taxes of the Contractor for the fiscal year under review payable under the Internal Revenue Code are decreased by reason of the application of section 1481 of the Internal Revenue Code of 1954. The amount, if any, so computed

will be allowed as a credit against the amount of profits agreed in article 1 hereof to be eliminated. In the event, however, that Federal income or excess profits taxes shall be assessed upon that portion of the profits agreed in article 1 hereof to be eliminated which was excluded from income in the Federal income tax return (or income and excess profits tax returns) of the Contractor for the fiscal year under review, there shall be allowed to the Contractor the credit, if any, to which the Contractor shall be entitled under section 1481 of the Internal Revenue Code of 1954 with respect to such profits.

(3) In the case of a partnership, since the tax credit applicable against the amount of profits to be eliminated is the aggregate of the credits to which the partners are severally entitled, article 3 should be varied to read as follows:

(a) Each of the partners comprising the Contractor represents that his proportionate share of the profits, the amount of which is agreed in article 1 hereof to be eliminated, was included in his income for his taxable year in which the fiscal year under review ended in computing his total tax in his Federal income tax return for said taxable year. Each of such partners has applied or will apply within fifteen (15) days after the date that this agreement is executed by him for a computation by the Internal Revenue Service, based upon the assessments made to the date of such computation, of the amount by which his taxes for said taxable year under the Internal Revenue Code are decreased by reason of the application of section 1481 of the Internal Revenue Code of 1954. The aggregate of the amounts, if any, so computed shall be allowed as a credit against the amount of profits agreed in article 1 hereof to be eliminated.

(b) In the event that any additional excessive profits are eliminated pursuant to the provisions of article 5 or article 9 hereof, there shall be allowed, as a credit against such additional profits, the aggregate of the amounts, if any, to which the partners comprising the Contractor shall be severally entitled under section 1481 of the Internal Revenue Code of 1954 with respect to such additional profits.

When the above variation is used, the last sentence of article 4 (a) should also be varied to read as follows (and a corresponding change made in article 4 (b)):

Such payment shall be made within forty (40) days after the date of this agreement, except that if each of the partners comprising the Contractor shall have applied for a tax credit computation from the Internal Revenue Service within the time provided in article 3 (a) hereof, then such payment shall be made within forty (40) days after

the date of this agreement or within thirty (30) days after the date of receipt of the last such computation by the partner who requested the same, whichever is later.

(4) If the amount of the tax credit has been ascertained before the agreement is drawn, article 3 (a) should be varied to read as follows:

(a) The Contractor represents that the profits agreed in article 1 hereof to be eliminated were included in income in the Federal income tax return (or income and excess profits tax returns) of the Contractor for the fiscal year under review. The amount by which the taxes of the Contractor for the fiscal year under review payable under the Internal Revenue Code are decreased by reason of the application of section 1481 of the Internal Revenue Code of 1954 has been computed by the Internal Revenue Service, based upon the assessments made to the date of such computation, to be the sum of ($------) dollars. Such amount will be allowed as a credit against the amount of profits agreed in article 1 hereof to be eliminated.

When the above variation is used, Article 4 (a) should also be varied to read as follows:

(a) The Contractor agrees to pay to the Government the sum of ($------) dollars, representing the difference between the amount of profits agreed in article 1 hereof to be eliminated and the amount of the tax credit referred to in article 3 (a) hereof. Such payment shall be made within forty (40) days after the date of this agreement.

(e) Variations in article 4 (installment terms). (1) When the agreement provides for the payment of a refund of excessive profits in installments, article 4 (a) should be varied to read as follows:

ART. 4. Terms of payment. (a) The Contractor agrees to pay to the Government an aggregate amount equal to the difference between the amount of profits agreed in article 1 hereof to be eliminated and the amount of the tax credit, if any, referred to in article 3 (a) hereof, as follows:

(1) An amount equal to one-fourth (4) of such difference, on or before

(Date)

or, if the Contractor shall have applied for a tax credit computation from the Internal Revenue Service within the time provided in article 3 (a) hereof, then on or before or within thirty

(Repeat same date) (30) days after the date of receipt by the Contractor of such computation, whichever is later;

(2) An amount equal to one-fourth (4) of such difference, on or before

(Date)

or the due date of the payment provided in subparagraph (1) above, whichever is later: (8) An amount equal to one-fourth (4) of such difference, on or before

(Date)

or the due date of the payment provided in subparagraph (1) above, whichever is later;

and

(4) The full amount of the balance remaining of such difference, on or before ------, or the due date of the pay

(Date) ment provided in subparagraph (1) above, whichever is later.

In the event of a default continuing for twenty (20) days in the payment of any installment required to be paid pursuant to this paragraph (a) of article 4 hereof, all unpaid installments hereunder may at the option of the Government be declared, and thereupon shall become, immediately due and payable.

(2) If the amount of the tax credit has been ascertained before the agreement is drawn, article 4 (a), as varied in accordance with subparagraph (1) of this paragraph, should be further varied by eliminating the words "if any" from the first sentence thereof and by eliminating the alternative provision for payment in each subparagraph thereof.

(f) Variation in article 10 (interest). When an agreement provides for installment payments in the manner set forth in paragraph (e) (1) of this section, and the due date of one or more installments is more than two years after the close of the fiscal year to which the renegotiation relates, the period at the end of article 10 should be changed to a semicolon and should be followed by the following proviso (see § 1461.2 (b) (2) of this subchapter):

• Provided, however, That interest at said rate upon the amounts to be paid pursuant to the provisions of paragraphs (a) (2), (3), and (4) of said article 4 hereof shall accrue and be payable from the due date of the payment provided in paragraph (a) (1) of said article 4 hereof, or from whichever

(Date 2 years after f/y close)

is later, and shall continue until payment thereof.

(g) Special provisions relating to pending price revision. (1) The form of clause referred to in § 1457.5 (d) (4) of this subchapter, for use in a refund agreement when aggregate net downward price revision is anticipated, is as follows:

ARTICLE. Special provision relating to pending price revision. The Contractor represents that, pursuant to price adjust

ment provisions in each of the renegotiable contracts set forth in part 1 of schedule A attached 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 adustment 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 renegotiaable 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

gate 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 execessive, 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:

ARTICLE -. 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 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.

(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 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 Government to the Contractor pursuant to the price adjustment provisions aforesaid, allocable to the fiscal year under review, exceeds the aggregate liability of the Contractor to the Government pursuant thereto by amount greater than said sum of

an

(Repeat amount last above stated) dollars, the Contractor agrees that the difference between the amount of such excess and 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.

(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 sub