2. Cessation of Work and Notification to Immediate Subcontractors. (a) You shall stop all work, make no further shipments, and place no further orders in connection with the contract, except (1) to the extent necessary to perform any portion thereof not terminated by this Notice, or (2) to the extent that you may wish to retain and continue any work in process or other materials for your own account, or (3) to the extent the Contracting Officer authorizes you to continue work in process for reasons of safety, or to clear [or avoid damage to] equipment or to avoid immediate complete spoilage of work in process having a definite commercial value, or otherwise to prevent undue loss to the Government. [If you believe the authorization referred to in paragraph 2(a) (3) is necessary or advisable, you shall immediately notify the Contracting Officer by telephone or personal conference and obtain instructions.] You shall keep adequate records of your compliance with this paragraph 2(a) showing (i) the date you received your Notice of Termination, (ii) the effective date of such termination, and (iii) the extent or completion of performance on such effective date.

(b) You shall give notice of termination to each of your immediate subcontractors (including suppliers) who will be affected by the termination of your contract. In such notice you shall (1) give him the number of your contract with the Government; (2) state that it has been terminated (or terminated in part, if that is the case) for the convenience of the Government; (3) give him the name and address of the Contracting Officer; (4) instruct him to stop all work, to make no further shipments, to place no more orders, and to terminate all subcontracts under this contract with you (subject to the same exceptions stated in paragraph 2(a)); (5) direct him to submit his settlement proposal promptly in order to expedite settlement; and (6) request him to give similar notice and instructions to his immediate subcontractors.

(c) You shall notify the Contracting Officer of the number of articles completed under the contract and still on hand, and arrange with him for their delivery or other disposal.

(d) You shall forthwith transfer title to the Government and deliver in accordance with any instructions of the Contracting Officer, all items of termination inventory (including subcontractor termination inventory which under the terms of the subcontract or purchase order concerned you have the right to take over) of the following types or classes: [Insert proper identification or "none".]

(e) You shall notify the Contracting Officer of any pending legal proceedings which relate to any subcontracts or purchase orders under the terminated contract or which have resulted in or which are intended to result in a lien or encumbrance on any termination inventory other than termination inventory you propose and are authorized to purchase, retain, or dispose of. The Contracting Officer shall also be promptly notified of any such proceedings brought after receipt of this Notice.

(f) You shall submit your settlement proposal and take such other action as may be required by the Contracting Officer or under the termination clause contained in your contract.

3. Termination Inventory. In connection with settlement of your claim it will be necessary to establish that all your termination inventory and that of your subcontractors has been properly accounted for. For detailed information, see Subpart 1-8.5 of the Federal Procurement Regulations (41 CFR 1-8.5).

4. Completed End Items. Subject to § 1-8.306 of the Federal Procurement Regulations (41 CFR 1-8.306), you will invoice acceptable completed end items under the contract in the usual way and not include them in your settlement proposal.

5. Patents. Your attention is called to any provisions of the contract which may require you to make a disclosure of, and to deliver to the Government instruments of license or assignment respecting, all inventions, discoveries, and patent applications made by you in the performance of the contract. You are urged to forward such disclosures and instruments of license or assignment to the Contracting Officer promptly, inasmuch as these contractual obligations must be complied with before execution of the final settlement agreement. This paragraph may be disregarded if the contract contains no such patent provisions.