3.

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

portion of the Subcontract and for the termination and settlement of

lower-tier subcontracts thereunder, together with reasonable storage,
treasportation, and other costs incurred in connection with the pxrotection or disposition of the property allocable to this Subcontract.
The total sum to be paid to the Subcontractor under 1 and 2 above shall
not exceed the total Subcontract price as reduced by the amount of payments otherwise made and as Further reduced by the Subcontract price of
work not’ terminated. Except for normal spoilage and except to the extent

that the Contractor or the Government shall have otherwise expressly

assumed the risk of loss, there shall be excluded from the amounts
‘payable to the Subcontractor under 1 and 2(a) above the fair value as
determined by the Contractor of property which is destroyed, lost,
stolen, or damaged so as to become undeliverable to the Contractor or
to a purchaser pursuant Co paragraph Db 7.

£.

The obligation of the Contractor to make any payments under this Arcicle

shall be subject to deductions with respect to: 1) all unliquidated advance
or other payments on account theretofore made to the Subcontractor applicable to the terminated portion of this Subcontract; 2) any claim which
the Contractor may have against the Subcontractor, in connection with
this Subcontract; and 3) the agreed price for, or the proceeds of sale of,
any materials, supplies, or other things retuined by the Subcontractor or
_ sold,

and not otherwise recovered by or credited to the Contractor.

g.

If the termination hereunder be partial, prior to the settlement of the
terminated portion of this Subcontract, the Subcontractor may file with the
Contractor a request in writing that an equitable adjustment be made in the
pvice or prices specified in the Subcontract for the work in connection
with the continved portion not terminated by the Notice of Termination, and
the appropriate equitable adjustment shall be made in such price or prices.

h.

The Contractor may, from time to time, under such terms and conditions as
he may prescribe, make partial payments and payments on account against
costs incurred by the Subcontractor with respect to the terminated portion

of the Subcontract, whenever in the opinion of the Contractor the aygregate

of such payments shall be within the amount to which the Subcontractor will
be entitled nereunder. T£ the total of such payments is in excess of the
amount finally agreed upon or determined to be due under this Article, such

excess shall be payable by the Subcontractor to the Contractor upon demand,

together with interest computed at the rate of 6 percent per annum, For the
period from the date such excess payment is received by the Subcontractor

to the date on which such excess is repaid: PROVIDED, however, that no

interest shall be charged with respect to any such excess payment attributable

to a reduction in

the Subcontractor’s claim by reason of retention

or other disposition of termination inventory uatil ten days after the
date of such retention or disposition, or such later date as determined by
the Contractor by reason of the circumstances -

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