MEMORANDUM OF UNDERSTANDING

BETWEEN

THE DEPARTMENT OF DEFENSE

OF THE UNITED STATES OF AMERICA

AND

THE DEPARTMENT OF DEFENCE OF AUSTRALIA

CONCERNING COOPERATION IN THE

P-8A POSEIDON SPIRAL 1 DEVELOPMENT

PROGRAM

Certified to be itrue copy:

Phil WheelerInternational Agreements NegotiatorNavy International Programs Office

TABLE OF CONTENTS

INTRODUCTIONSECTION IDEFINITIONS AND ACRONYMS 6

SECTION IIOBJECTIVES 12

SECTION IIISCOPE OF WORK 14

SECTION IVMANAGEMENT (ORGANIZATION AND RESPONSIBILITY) 16

SECTION VFINANCIAL PROVISIONS 21

SECTION VICONTRACTING PROVISIONS 25

SECTION VIIINDUSTRIAL PARTICIPATION 29

SECTION VIIIPROJECT EQUIPMENT 30

SECTION IXDISCLOSURE AND USE OF PROJECT INFORMATION 32

SECTION XCONTROLLED UNCLASSIFIED INFORMATION 41

SECTION XIVISITS TO ESTABLISHMENTS 43

SECTION XIISECURITY 44

SECTION XIIITHIRD PARTY SALES AND TRANSFERS 47

SECTION XIVLIABILITY AND CLAIMS 51

SECTION XVPARTICIPATION OF ADDITIONAL NATIONS 52

SECTION XVICUSTOMS DUTIES, TAXES, AND SIMILAR CHARGES 53

SECTION XVIISETTLEMENT OF DISPUTES 54

SECTION XVIIIAMENDMENT, TERMINATION, ENTRY INTO EFFECT, AND DURATION 55

ANNEX ASYSTEM REQUIREMENTS AND AUSTRALIAN OPERATIONAL REQUIREMENTS58

ANNEX BJOINT PROJECT OFFICE ORGANIZATION 60

ANNEX CINVENTORY OF PROJECT EQUIPMENT EXCHANGES 61

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ANNEX DCOOPERATIVE PROJECT PERSONNEL 62

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INTRODUCTION

The Department of Defense of the United States of America (U.S.DoD) and the Department of Defence of Australia (ADOD)hereinafter referred to as the "Participants":

Recognizing the Exchange of Notes Constituting an Agreementbetween the Government of the United States of America and theGovernment of Australia Concerning Certain Mutual DefenceCommitments done at Sydney on December 1, 1995 (the ChapeauAgreement) will apply to this Memorandum of Understanding (MOU);

Recognizing the Agreement Concerning Security Measures for theProtection of Classified Information between the Governments ofAustralia and the United States of America, which entered intoforce November 7, 2002 (Security Agreement);

Recognizing the Implementing Arrangement between the Departmentof Defence of Australia and the Department of Defense of theUnited States of America concerning Industrial Security, whichentered into force February 8, 2007 (Security Arrangement);

Having a common interest in defense;

Recognizing the benefits to be obtained from standardization,rationalization, and interoperability of military equipments;

Desiring to improve their mutual conventional defensecapabilities through the application of emerging technology;

Having a mutual need for the development of the maritime systemsto satisfy common operational requirements;

Having independently conducted studies, research, exploratorydevelopment, and testing of the applications of varioustechnologies, recognize the benefits of cooperation in themaritime domain;

Having established numerous data exchange agreements for theexchange of Information concerning all aspects of the maritimedomain;

Recognizing the importance of cooperation between theParticipants' research and development organizations andindustries, and seeking to reduce barriers to that cooperation;and

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Desiring to cooperate on the P-8A Poseidon Spiral 1 aircraft,missions systems, and associated ground systems with a view tosubsequent cooperation in production, support, and follow-ondevelopment;

Have reached the following understandings:

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SECTION I

DEFINITIONS AND ACRONYMS

The Participants have jointly decided upon the followingdefinitions and acronyms for terms used in this MOU:

Baseline P-8APoseidon

The P-8A weapon system as developed duringthe P-8A System Development andDemonstration phase, which involves themodification and airworthiness certificationof an existing commercial aircraft, anddelivered for all production lots precedingthe introduction of capability developedduring Spiral 1. The P-8A weapon systemincludes the air vehicle, mission systems,training, sustainment plans, supportingequipment and technologies, anddevelopmental and operational testingleading to Initial Operating Capability.

Classified Official Information that requiresInformation protection in the interests of national

security and is so designated by theapplication of a security classificationmarking. This Information may be in oral,visual, magnetic, or documentary form or inthe form of equipment or technology.

Contract

Contracting

Any mutually binding legal relationshipunder national laws that obligates aContractor to furnish supplies or services,and obligates one or both of theParticipants to pay for them.

The obtaining of supplies or services byContract from sources outside thegovernmental organizations of theParticipants. Contracting includes adescription (but not determination) ofsupplies and services required, solicitationand selection of sources, preparation andaward of Contracts, and all phases ofContract administration.

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Contracting Agency The entity within the governmentalorganization of a Participant that hasauthority to enter into, administer, orterminate Contracts.

Contracting Officer A person representing a Contracting Agencyof a Participant who has the authority toenter into, administer, or terminateContracts.

Contractor Any entity awarded a Contract by aParticipant's Contracting Agency.

Contractor Support Persons specifically identified as providingPersonnel administrative, managerial, scientific, or

technical support services to a Participantunder a support Contract.

Controlled Unclassified Information to which access orUnclassified distribution limitations have been appliedInformation in accordance with applicable national laws

or regulations. It could includeInformation that has been declassified butremains controlled.

Cooperative Project Military members or civilian employees of aPersonnel (CPP) Parent Participant assigned to the Joint

Project Office (JPO) or a facility of theother Participant who perform managerial,engineering, technical, administrative,Contracting, logistics, financial, planning,or other functions in furtherance of theProject.

Defense Purposes Manufacture or other use in any part of theworld by or for the armed forces of eitherParticipant.

DON Department of the Navy

Designated Security The security authority designated byAuthority (DSA) national authorities to be responsible for

the coordination and implementation ofnational industrial security aspects of thisMOU.

Financial Cost The maximum amount to which the financial

Ceiling contributions that one or both Participantsmay contribute to this MOU without the priorwritten approval of the Participants.

Financial Costs Project costs met with monetarycontributions.

Financial Management A document that describes the estimatedProcedures Document schedule, handling, and auditing of monetary(FMPD) contributions for the Project in which one

Participant contracts on behalf of the otherParticipant or on behalf of bothParticipants to fulfill the objectives ofthe Project.

Host Participant The Participant whose nation serves as thelocation of the JPO.

Information Knowledge that can be communicated by anymeans, regardless of form or type,including, but not limited to, that of ascientific, technical, business, orfinancial nature, and also includingphotographs, reports, manuals, threat data,experimental data, test data, computersoftware, designs, specifications,processes, techniques, inventions, drawings,technical writings, sound recordings,pictorial representations, and othergraphical presentations, whether in magnetictape, computer memory, or any other form,and whether or not subject to IntellectualProperty rights.

Initial Operational That date when the first unit or units of aCapability (IOC) system are fielded, have completed testing,

and are determined to be ready fordeployment and operational field support.

IntellectualProperty

In accordance with the World TradeOrganization Agreement on Trade-relatedAspects of Intellectual Property Rights ofApril 15, 1994, all copyright and relatedrights, all rights in relation to inventions(including Patent rights), all rights inregistered and unregistered trademarks(including service marks), registered andunregistered designs, undisclosed

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Information (including trade secrets andknow-how), layout designs of integratedcircuits, and geographical indications, andany other rights resulting from creativeactivity in the industrial, scientific,literary, and artistic fields.

JPO Joint Project Office

MMA Maritime Multimission Aircraft: This is thesuperseded nomenclature for the P-8APoseidon aircraft.

Non-financial Costs Project costs met with non-monetarycontributions.

P-8A Poseidon The acquisition strategy and subsequentSpiral 1 development and testing efforts to provideDevelopment capability upgrades for the baseline P-8A.

Parent Participant The Participant that sends its CPP to theJPO or facility located in the nation of theother Participant.

Participant

Patent

A signatory to this MOU represented by itsmilitary and civilian personnel.Contractors and Contractor Support Personnelwill not be representatives of a Participantunder this MOU.

Grant by any Government or a regional officeacting for more than one Government of theright to exclude others from making, using,importing, selling, or offering to sell aninvention. The term refers to any and allpatents including, but not limited to,patents of implementation, improvement oraddition, petty patents, utility models,appearance design patents, registereddesigns, and inventor certificates or likestatutory protection, as well as divisions,reissues, continuations, renewals, andextensions of any of these.

Project The system development and demonstration of

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Project BackgroundInformation

Project Equipment

the P - 8A Poseidon Spiral 1 as set out inSection II (Objectives) and Section III(Scope of Work).

Information not generated in the performanceof the Project.

Any material, equipment, end item,subsystem, component, Special Tooling, ortest equipment jointly acquired or providedfor use in the Project.

Project Foreground Information generated in the performance ofInformation the Project.

Project Information Any Information provided to, generated in,or used in the Project.

Project Invention Any invention in any field of technology,provided it is new, involves an inventivestep, is capable of industrial application,and is formulated or made (conceived or"first actually reduced to practice") in thecourse of work performed under a Project.The term "first actually reduced topractice" means the first demonstration,sufficient to establish to one skilled inthe art to which the invention pertains, ofthe operability of an invention for itsintended purpose and in its intendedenvironment.

Project Plan A document that provides a description ofthe Project, including as necessary thedetailed scope of work, deliveryrequirements, and milestones.

PSI

Project Security Instruction

ProspectiveContractor

Any entity that seeks to enter into aContract to be awarded by a Participant'sContracting Agency and that, in the case ofa solicitation involving the release ofexport-controlled Information, is eligibleto receive such Information.

Special Tooling Jigs, dies, fixtures, molds, patterns,

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tapes, gauges, other equipment andmanufacturing aids, and all components ofthese items that are of such a specializednature that without substantial modificationor alteration their use is limited to thedevelopment or production of particularsupplies or parts thereof or to theperformance of particular services andexcluding material, special test equipment,facilities (except foundations and similarimprovements necessary for installingSpecial Tooling), general or special machinetools, or similar capital items.

Spiral 1 The term Spiral 1 has been replaced by P-8APoseidon Spiral 1.

System Development The purpose of the SDD phase is to develop aand Demonstration system or an increment of capability; reduce(SDD) integration and manufacturing risk; ensure

operational supportability with particularattention to reducing the logisticsfootprint; implement human systemsintegration (HSI); design for producibility;ensure affordability and the protection ofcritical program information (CPI) byimplementing appropriate techniques such asanti-tamper; and demonstrate systemintegration, interoperability, safety, andutility. SDD has two major efforts: SystemIntegration and System Demonstration.

Third Party A government other than the Government of aParticipant and any person or other entitywhose government is not the Government of aParticipant.

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SECTION II

OBJECTIVES

2.1 The objectives of this Project are to:

2.1.1 Complete the development and detailed system designfor capability upgrades to the Baseline P-8APoseidon airframe, mission system, and relatedsupport systems to meet the U.S. DoD operational,performance, and interoperability requirements, asspecified in paragraph 2.1. of Annex A (SystemRequirements and Australian OperationalRequirements);

2.1.2 Develop and design variations from the Baseline P-8APoseidon airframe and mission system to meetAustralian operational requirements as defined inAnnex A (System Requirements and AustralianOperational Requirements) and as agreed to by the P-8A Poseidon Spiral 1 Steering Committee (SC) andfunded additionally by ADOD;

2.1.3. Develop and implement management and controlprocesses to ensure the Participants receive bestvalue within the Financial Cost Ceiling;

2.1.4. Produce test articles to support Developmental Testand Evaluation (DT&E) and Operational Test andEvaluation (OT&E) programs for the Spiral 1capability upgrades developed per paragraph 2.1.1.and 2.1.2. of this MOU;

2.1.5. Develop integrated logistics support and trainingsystems necessary to support DT&E and OT&E of theSpiral 1 Systems and to enable transition toproduction and subsequent fielding of operationalsquadrons for the Participants;

2.1.6. Conduct development and operational testing of P-8APoseidon Spiral 1 and Australian operationalrequirements capabilities as set out in paragraphs2.1.1. and 2.1.2. of this MOU;

2.1.7. Conduct cooperative studies and discussion offollow-on efforts, directed toward the cooperative

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production, support, and incremental development onthe P-8A system, training systems, and supportingequipment and technologies; and

2.1.8. Promote and encourage greater maritime surveillanceinteroperability between the Participants' mannedand unmanned systems, trainers, and associatedsupport systems.

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SECTION III

SCOPE OF WORK

3.1. Conduct technical, cost, risk, and logistics analysis ofproposed technologies; evaluate system requirements throughcost/performance trade-off analysis; provide technical andmanagement support for the development of P-8A Spiral 1acquisition documentation; and provide engineering andmanagement of technical development effort.

3.2. Design, develop, fabricate, integrate, demonstrate,validate, and test hardware and software that providescapability upgrades to the Baseline P-8A Poseidon to meet U.S.DoD and ADOD operational requirements and performancespecifications, and ensure the prime Contractor fulfills itsobligations under any Contract related to cooperative efforts bythe Participants, both shared and unique. Candidate capabilityupgrades are outlined in Annex A (System Requirements andAustralian Operational Requirements). Such efforts willexploit, to the maximum extent practicable, concepts andtechnology maturation demonstrations and modeling and simulationand analysis capabilities. This will include, but is notlimited to, the following tasks:

3.2.1. Verify and certify the completeness of the designand development process, leading to developmentaltesting and the operational assessment of thecapability upgrades for the Baseline P-8APoseidon aircraft;

3.2.2. Develop and provide test articles, groundstations, and system integration laboratories tosupport integration, developmental test, anddemonstration activities of joint capabilityupgrades;

32.3. Participate in development test planning andtesting, and operational test planning as part ofthe P-8A Poseidon Spiral 1 integrated test team;

3.2.4. Evaluate and conduct performance analysis fordevelopment and testing of P-8A PoseidonAustralian operational requirements;

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3.2.5. Develop and implement a program management systemthat uses integrated product and processdevelopment, earned value management, technicalperformance measures, and risk managementtracking systems as management tools to providecost, schedule, and performance Information.

3.2.6. Participate in program reviews.

3.2.7. Participate in P-8A Poseidon program roadmapdiscussions, planning efforts, and reviews todetermine future requirements, capabilities, anddevelopment efforts.

3.2.8. Participate in P-8A Poseidon production planningto consider ADOD requirements in production lineallocations, on the assumption that the ADOD willparticipate in the P-8A Poseidon production,support, and follow-on development MOU.

3.3. The U.S. DoD will make its best efforts to provide the ADODsufficient Project Background Information to make an informeddecision to proceed into a cooperative production, sustainment,and follow-on development arrangement. Such Project BackgroundInformation may include cost, performance, risk, schedule,sustainment and support concepts, and life cycle ownership costsand risks Information. Additionally, the U.S. DoD will providesufficient insight into the Baseline P-8A Poseidon airworthinesscertification to enable recognition of the U.S. DoD-grantedcertifications by the ADOD.

3.4. As reflected in Annex A (System Requirements and AustralianOperational Requirements), the U.S. DoD will make its bestefforts to facilitate ADOD development and testing of the ADODintegrated ground environment, including the provision ofappropriate Project Background Information relating to P-8Asystem interfaces, and if necessary, Contracting on behalf ofADOD in support of both ADOD and its industry capabilitypartner, on a not-to-interfere basis with Project goals,schedules, or Contracting. In the event that U.S. DoD agenciesrequire funding in order to accomplish tasks in support of ADODintegrated ground environment/P-8A interface efforts, the FMPDand Project Plan will set out funding mechanisms and schedulesin order that these tasks can be performed in a timely andefficient manner.

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SECTION IV

MANAGEMENT (ORGANIZATION AND RESPONSIBILITY)

4.1. This Project will be directed and administered on behalfof the Participants by an organization consisting of a SteeringCommittee (SC) and a Joint Project Office (JPO) headed by aProject Manager (PM). Each Participant will provide a DeputyProject Manager (DPM). The SC will exercise authority over thePM, in accordance with this MOU. The PM will have primaryresponsibility for effective implementation, efficientmanagement, and direction of the Project in accordance with thisMOU. The DPMs will manage the day-to-day implementation of theProject in accordance with the Project Plan and this MOU.

4.2. The SC will consist of a representative designated by eachParticipant. The SC will meet annually with additional meetingsheld at the request of either representative. Each meeting ofthe SC will be chaired by the representative of the Participanthosting the meeting. Decisions of the SC will be madeunanimously. Decisions of the SC will be formally documentedand signed by both SC members. In the event that the SC isunable to reach a timely decision on an issue, each SCrepresentative will refer the issue to his higher authority forresolution. In the meantime the approved Project Plan willcontinue to be implemented without interruption under thedirection of the PM while the issue is being resolved by higherauthority.

4.3. The SC will be responsible for:

4.3.1. Exercising executive-level oversight of theProject.

4.3.2. Reviewing progress in meeting system requirementsas specified in Annex A (System Requirements andAustralian Operational Requirements) of this MOU.

4.3.3. Approving the Project Plan prepared and submittedby the PM, as assisted by the DPMs, in accordancewith subparagraph 4.6.2. of this Section, and anyrevisions thereto, and reviewing the technicalprogress of the Project against the Project Plan.The Project Plan will include, but not be limitedto, the following elements:

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4.3.3.1. Detailed scope of work andcorresponding work schedule, asappropriate.

4.3.3.2. References to applicable acquisitionapproval processes and documents.

4.3.4. Approving the FMPD and any changes to the FMPD asdeveloped by the DPMs and proposed by the PM.

4.3.5. Reviewing the financial status of the Project toensure compliance with the provisions of SectionV (Financial Provisions) of this MOU and theFMPD.

4.3.6. Resolving issues brought forth by the PM.

4.3.7. Reviewing and forwarding to the Participants forapproval recommended amendments to this MOU inaccordance with Section XVIII (Amendment,Termination, Entry into Effect, and Duration) ofthis MOU.

4.3.8. Approving amendments to Annexes A, B, and C ofthis MOU consistent with Section XVIII(Amendment, Termination, Entry into Effect, andDuration) of this MOU.

4.3.9. Employing its best efforts to resolve, inconsultation with the export control authoritiesof the Participant concerned, any export controlissues identified by the DPMs and raised by thePM in accordance with subparagraph 4.6.10. ofthis section or raised by a Participant's SCrepresentative in accordance with subparagraph9.1.2.4. of Section IX (Disclosure and Use ofProject Information) of this MOU.

4.3.10. Providing recommendations to the Participants forthe addition of new Participants in accordancewith Section XV (Participation of AdditionalNations) of this MOO.

4.3.11. Monitoring Third Party sales and transfersauthorized in accordance with Section XIII (ThirdParty Sales and Transfers) of this MOU.

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4.3.12. Reviewing the annual status report prepared bythe DPMs and submitted by the PM.

4.3.13. Approving plans to manage and control thetransfer of Project Equipment provided by eitherParticipant to support the execution of theProject in accordance with Section VIII (ProjectEquipment).

4.3.14. Approving plans for the disposal of jointlyacquired Project Equipment under this MOU inaccordance with Section VIII (Project Equipment).

4.3.15. Issuing written decisions regarding sole sourcecontracting for Australian operationalrequirements in accordance with paragraph 6.8. ofthis MOU.

4.4. The JPO will be established at Naval Air Systems Command,Naval Air Station Patuxent River, Maryland to manage theProject. The Program Executive Officer Air Anti-Submarine,Assault, and Special Mission programs (PEO(A)), as the U.S. DoDSC representative, will appoint the U.S. PM. As head of theJPO, the U.S. PM will be responsible for overseeing the overallprogress of the Project and the efforts of the DPMs, who willassist the PM with implementing this MOU and providing day-to-day management of the Project.

4.5. The Participants will each provide national representationto the JPO by designating a Deputy Project Manager (DPM). Asdepicted in Annex B (Joint Project Office Organization) to thisMOU, each DPM will report to the PM heading the JPO.

4.6. The PM will be responsible for:

4.6.1. Managing the cost, schedule, performancerequirements, technical, security, and financialaspects of the Project described in this MOU inconsultation with the DPMs, including any issuesregarding Australian operational requirements.

4.6.2. Submitting the Project Plan developed by the DPMsand the responsible Contracting Officer and anynecessary revisions thereto, as described insubparagraph 4.3.3. of this Section; for SCapproval and, in consultation with the DPMs,

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implementing the plan and any revisions approvedby the SC.

4.6.3. Executing the financial aspects of the Project inaccordance with Section V (Financial Provisions)of this MOU and the FMPD.

4.6.4. Referring issues to the SC that cannot beresolved by the PM.

4.6.5. Developing and recommending amendments to thisMOU and Annexes to the SC.

4.6.6. In conjunction with the DPMs, developing andimplementing SC-approved plans to manage andcontrol the transfer of Project Equipmentprovided by either Participant in accordance withSection VIII (Project Equipment).

4.6.7. In conjunction with the DPMs, developing andforwarding to the SC a Project SecurityInstruction (PSI) and a Classification Guide forthe Project within three months after MOUsignature, and implementing them upon finalapproval.

4.6.8. Forwarding recommendations to the SC for theaddition of new Participants in accordance withSection XV (Participation of Additional Nations)of this MOU.

4.6.9. Monitoring export control arrangements requiredto implement this MOU and, if applicable,referring immediately to the SC any exportcontrol issues that could adversely affect theimplementation of this MOU.

4.6.10. Providing an annual status report to the SC.

4.6.11. Exercising configuration management in accordancewith the Project Plan.

4.6.12. Exercising software management in accordance withthe Project Plan.

4.6.13. Appointing a Project security officer.

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4.6.14. Submitting to the SC for approval an FMPDprepared by the DPMs.

4.7. A DPM from both Participants will be assigned to the JPO.The primary responsibility of the DPM is to assist the PM withthe following duties:

4.7.1. Providing recommendations to the PM for Projectdirection, schedule, and budget.

4.7.2. Referring issues to the PM that cannot beresolved within the JPO.

4.7.3. Assisting the PM in developing the Project Plan,FMPD, PSI, and other related documents.

4.7.4. Reviewing and providing inputs regarding P-8ASpiral 1 Contract strategies, P-8A Spiral 1requests for proposals, P-8A Spiral 1 Contractsand modifications, at the discretion of theContracting Officer.

4.7.5. Participating in and providing inputs to Projectstrategy and management meetings and Projectreviews.

4.7.6. Assisting the PM in preparing the annual statusreport to the SC.

4.7.7. Assisting the PM in developing and implementingSC-approved plans to manage and control thetransfer of Project Equipment and for thedisposal of jointly acquired Project Equipment.

4.8. The Australian DPM will also be responsible for:

4.8.1. Exercising administrative management of theAustralian CPPs assigned to the Project.

4.8.2. Providing ADOD representation within the JPO onall matters relating to the Project.

4.8.3. Performing other tasks as may be assigned by thePM consistent with the position description.

4.8.4. Informing the Australian SC representative ofProject status and progress.

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SECTION V

FINANCIAL PROVISIONS

5.1. The Participants estimate that the performance of theresponsibilities under this MOU will not cost more than aFinancial Cost Ceiling of $225.672 million Then Year (TY) U.S.dollars. The U.S. dollar will be the reference currency for theProject, and the Project fiscal year will be the U.S. fiscalyear. The Financial Cost Ceiling may be changed only upon themutual written consent of the Participants. The Participantswill use their best efforts to perform, or to have performed,the work specified in Section III (Scope of Work) of this MOUand fulfill all of their responsibilities under this MOU withinthe Financial Cost Ceiling. If at any time the PM has reason tobelieve that the Financial Cost Ceiling of the Project will beexceeded, the PM will promptly notify the SC and will set fortha new estimate of the Financial Cost Ceiling of the Projecttogether with supporting documentation. The SC will advise thePM as to what action should be taken.

5.2. Each Participant will contribute its equitable share ofthe full Financial Costs and Non-financial Costs of the Project,including overhead costs, administrative costs, and costs ofclaims, and will receive an equitable share of the results ofthe Project.

5.3. The full Financial Costs and Non-financial Costs of theProject will be shared as follows:

U.S. DoD Financial

ADOD Financial

Total Financial

U.S. DoD Non-financial

ADOD Non-financial

Total Non-Financial

$165.672 million TY U.S.

$ 60.000 million TY U.S.

$225.672 million TY U.S.

$296.100 million TY U.S.

$ 23.340 million TY U.S.

$319.440 million TY U.S.

5.4. Participation in the Project will include both financialand non-financial contributions to support Project efforts.Values have been mutually determined for Project non-financialcontributions.

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5.5. Participation in the Project will also include financialand non-financial contributions for JPO administration andassociated support services including, but not limited to, JPOcosts of travel incurred in support of Project efforts, JPOtraining costs, Contract award, Contract administration, officespace, security services, information technology services,communications services, and supplies.

5.6. In addition to the shared costs of JPO administration andassociated support services costs described in paragraph 5.5. ofthis Section, the cost of personnel in the JPO will be borne asfollows:

5.6.1. The Host Participant will bear the costs of allpay and allowances of Host Participant personnelin the JPO.

5.6.2. The Parent Participant will bear the followingCooperative Project Personnel (CPP)-relatedcosts:

5.6.2.1. All pay and allowances of CPP assignedto the JPO.

5.6.2.2 Transportation of CPP, CPP dependents,and their personal property to the JPOlocation prior to commencement of theCPP assignment in the JPO, and returntransportation of the foregoing fromthe JPO location upon completion ortermination of the CPP assignment.

5.6.2.3 Compensation for loss of, or damage to,the personal - property of CPP or CPPdependents, subject to the laws andregulations of the Parent Participant'sGovernment.

5.7. The sum of the Participants' Project financialcontributions equals the Financial Cost Ceiling for the Projectreflected in this Section of the MOU.

5.8. The following costs will be borne entirely by theParticipant incurring the costs or on whose behalf the costs areincurred:

5.8.1. Costs associated with national representation atmeetings by non -JPO members.

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5.8.2. Costs associated with any unique nationalrequirements identified by a Participant.

5.8.3. Any other costs not expressly stated as sharedcosts or any costs that are outside the scope ofthis MOU.

5.9. If the U.S. DoD decides subsequently that it wishes to useProject Information generated in performance of an Australianoperational requirement, or to acquire any item that resultsfrom an Australian operational requirement, the U.S. DoD willmake equitable arrangements with the ADOD (as determined by theSC) for the U.S. DoD share of the costs of those efforts inaccordance with paragraph 5.2. of this Section.

5.10. The PM, as assisted by the DPMs, will be responsible forestablishing the detailed financial management procedures underwhich the Project will operate. These procedures, which must bein accord with the national accounting and audit requirements ofthe Participants, will be detailed in the FMPD prepared by theDPMs and submitted by the PM for approval by the SC. EachParticipant will fund the Project in accordance with theestimated schedule of financial contributions contained in theFMPD, which will be consistent with paragraph 5.11. of thisSection.

5.11. A Participant will promptly notify the other Participantif available funds are not adequate to fulfill itsresponsibilities under this MOU. If a Participant notifies theother Participant that it is terminating or reducing its fundingfor this Project, both Participants will immediately consult,with a view toward continuation on a modified basis.

5.12. The Participants recognize that it may become necessaryfor one Participant to incur contractual or otherresponsibilities for the benefit of the other Participant, orboth of the Participants prior to receipt of the otherParticipant's funds. In such event, the other Participant willmake such funds available in such amounts and at such times asrequired by the Contract or other responsibility and will payany damages and costs that may accrue from the performance orcancellation of the Contract or other responsibility in advanceof the time such payments, damages, or costs are due.

5.13. Each Participant will, consistent with its national laws,regulations, and policies, provide to the other Participant the

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Information and assistance described in paragraphs 5.14. and5.15. of this Section.

5.14. The U.S. DoD will be responsible for the audit of theprocurement activities for which it is responsible under theProject in accordance with its national practices. The U.S. DoDwill use its best efforts to perform any audits requested by theADOD and agreed to by the U.S. DoD.

5.15. The U.S. DoD will be responsible for the internal auditregarding administration of the other Participant's Projectfunds in accordance with U.S. national practices. The U.S. DoDwill promptly make audit reports of such funds available to theother Participant. Upon the mutual consent of the U.S. DoD andthe ADOD, auditors will be permitted to assist the U.S. DoD onany audit elements required to satisfactorily perform the audit.In addition, if ADOD or its auditors need to obtain or toinspect specific Project Information in order to fulfill itsnational obligations, the U.S. DoD will arrange for access tosuch specific Information at mutually determined times andlocations.

5.16. On any future sale by the U.S. DoD to the ADOD of the P-8APoseidon Spiral 1, the U.S. DoD will exclude from the price ofthe P-8A Poseidon specific U.S. DoD research and developmentcosts incurred for P-8A Poseidon Spiral 1 efforts, provided thatthe ADOD does not terminate their participation in this MOU.

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SECTION VI

CONTRACTING PROVISIONS

6.1. The U.S. DoD (acting through the Department of the Navy)will be primarily responsible for Contracting for this Projectin accordance with U.S. laws, regulations, and procedures. TheADOD may perform Contracting for its unique nationalrequirements, or may, upon request, Contract to meet Projectrequirements. In the event that the ADOD contracts for eitherits own unique national requirements, or Project requirements,such Contracting will be in accordance with Australian laws,regulations, and procedures. The Contracting Officer is theexclusive source for providing contractual direction andinstructions to Contractors.

6.2. The PM and DPMs will cooperate, as requested, with theContracting Officers in the areas of Contract procedures,Contract negotiation, evaluation of offers, Contract award, andContract modifications. The PM and DPMs will review statementsof work prior to the development of solicitations to ensure thatthey are in accordance with this MOU. The Contracting Officerwill keep the PM and DPMs advised of all significantdevelopments associated with award and performance of Contracts,and will keep the PM and DPMs advised of all financialarrangements with Contractors.

6.3. The Contracting Officer will use best efforts to obtainthe rights to use and disclose Project Information required bySection IX (Disclosure and Use of Project Information) of thisMOU. The Contracting Officer will insert into prospectiveContracts (and require it's Contractors to insert insubcontracts) suitable provisions to satisfy the requirements ofthis MOU, including Section IX (Disclosure and Use of ProjectInformation), Section X (Controlled Unclassified Information),Section XII (Security), Section XIII (Third Party Sales andTransfers), and Section XVIII (Amendment, Termination, Entryinto Effect, and Duration) of this MOU, including the exportcontrol provisions in accordance with this MOU, in particularparagraphs 6.4. and 6.5. of this Section. During theContracting process, the Contracting Officer will adviseProspective Contractors of their responsibility to notifyimmediately the Contracting Agency, before Contract award, ifthey are subject to any license or agreement that will restricttheir freedom to disclose Information or permit its use. TheContracting Officer will also advise Prospective Contractors to

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employ their best efforts not to enter into any new agreement orarrangement that will result in restrictions.

6.4. Each Participant will legally bind its Contractors to arequirement that the Contractor will not retransfer or otherwiseuse export-controlled Information furnished by the otherParticipant for any purpose other than the purposes authorizedunder this MOU. The Contractor will also be legally bound notto retransfer the export-controlled Information to anotherContractor or subcontractor unless that Contractor orsubcontractor has been legally bound to limit use of theInformation to the purposes authorized under this MOU. Export-controlled Information furnished by one Participant under thisMOU may only be retransferred by the other Participant to itsContractors if the legal arrangements required by this paragraphhave been established.

6.5. Each Participant will legally bind its ProspectiveContractors to a requirement that the Prospective Contractorwill not retransfer or otherwise use export-controlledInformation furnished by the other Participant for any purposeother than responding to a solicitation issued in furtherance ofthe purposes authorized under this MOU. Prospective Contractorswill not be authorized use for any other purpose if they are notawarded a Contract. The Prospective Contractors will also belegally bound not to retransfer the export-controlledInformation to a prospective subcontractor unless thatprospective subcontractor has been legally bound to limit use ofthe export-controlled Information for the purpose of respondingto the solicitation. Export-controlled Information furnished byone Participant under this MOU may only be retransferred by theother Participant to its Prospective Contractors if the legalarrangements required by this paragraph have been established.Upon request by the furnishing Participant, the receivingParticipant will identify its Prospective Contractors andprospective subcontractors receiving such export-controlledInformation.

6.6. In the event the Contracting Officer is unable to secureadequate rights to use and disclose Project Information asrequired by Section IX (Disclosure and Use of ProjectInformation) of this MOU, or is notified by Contractors orProspective Contractors of any restrictions on the disclosureand use of Information, the matter will be referred to the SCfor resolution.

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6.7. The Contracting Officer will immediately advise the PM ofany cost growth, schedule change, or performance problems of anyContractor for which the Contracting Officer is responsible.The Contracting Officer will act in the best interest of bothParticipants in Contract administration decisions.

6.8. Upon mutual consent, consistent with Section II(Objectives) of this MOU, a Participant may contract for theunique national requirements of the other Participant. TheU.S. DoD will provide the ADOD with insight into subcontractingrelated to Australian operational requirements via IPTparticipation, attendance at Program Management Reviews, and DPMparticipation in the Contract administration process. At therequest of the ADOD and as reflected in a written SC decision,in relation to a Contract or subcontract for ADOD operationalrequirements, the Contracting Officer may place the Contract orrequire the Contractor to place the subcontract with a supplierspecified by ADOD.

6.9. When Contracting on behalf of the other Participant fornational operational requirements, the Contracting Participantwill investigate in a timely manner concerns that a Contractoris not meeting contractual requirements. The DPMs will workwith the Contracting Officer and the PM to determine anappropriate course of action if a Contractor is not meetingcontractual requirements.

6.10. The personnel of a Participant whose national operationalrequirements are included in a Contract may participate in theContract administration (including acceptance procedures) ofthat Contract to the extent authorized in writing by theContracting Officer regarding those national operationalrequirements.

6.11. A Participant whose national operational requirements areincluded in a Contract may request cost and pricing data inrelation to those national operational requirements in thatContract. Unless it is subject to the Intellectual Propertyrights of a Contractor or subcontractor, the Participant will beprovided such cost and pricing data, at the discretion of theContracting Officer. If requested, the Contracting Officer willuse best efforts to obtain the written consent of the Contractoror subcontractor to provide such data to the Participant inrelation to those national operational requirements. TheParticipants understand that such data cannot be provided if theContractor or subcontractor does not provide written consent.

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6.12. The DPMs may provide written recommendations to the awardfee board, in accordance with the applicable ContractingAgency's process and procedures regarding the level ofContractor achievement related to their articles and servicesthat have been placed on Contract. At the discretion of theContracting Officer, the DPM of a Participant may be a member ofan award fee board when the award fee under discussion relatesto the national operational requirements of that Participant.

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SECTION VII

INDUSTRIAL PARTICIPATION

7.1. Sources from both nations will be permitted to bid onProject work that is not being performed by the primeContractor. Additionally, each Participant will encourage itsContractors to provide competitive opportunities to sources fromthe other nation to participate in the work of the Project,provided that such participation does not affect the Projectadversely, and is consistent with high technical merit,reasonable cost, and the need to achieve the timely, economical,and efficient execution of the Project. The U.S. DoD will makeits best efforts to facilitate timely export controlauthorizations to allow Australian industry to compete foropportunities in the Project.

7.2. No requirement will be imposed by either Participant forwork sharing or other industrial or commercial compensation inconnection with this MOU that is not in accordance with thisMOU.

7.3. The Participants will encourage timely notification ofContracting and subcontracting opportunities for the Project.

7.4. The Participants acknowledge that, subject to theContracting Participant's laws and regulations and to thesubmission of best value offers, industries that are in theParticipants' nations and that were awarded subcontracts insupport of the Project will be better positioned for and thusnormally be awarded subcontracts for follow-on production,support, and future development efforts.

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SECTION VIII

PROJECT EQUIPMENT

8.1. Each Participant may provide Project Equipment identifiedas being necessary for executing the MOU to the otherParticipant. Project Equipment will remain the property of theproviding Participant. A list of all Project Equipment providedby one Participant to the other Participant will be developedand maintained by the PM with the assistance of the DPMs,submitted by the PM to the SC for approval, and incorporatedinto Annex C (Inventory of Project Equipment Exchanges) inaccordance with Section IV (Management (Organization andResponsibility)) of this MOU prior to such transfers.

8.2. The receiving Participant will maintain any such ProjectEquipment in good order, repair, and operable condition. Unlessthe providing Participant has authorized the Project Equipmentto be expended or otherwise consumed without reimbursement tothe providing Participant, the receiving Participant will returnthe Project Equipment to the providing Participant in as goodcondition as received, normal wear and tear excepted, or returnthe Project Equipment and pay the cost to restore it. If theProject Equipment is damaged beyond economical repair, thereceiving Participant will return the Project Equipment to theproviding Participant (unless otherwise specified in writing bythe providing Participant) and pay the replacement valuespecified in Annex C (Inventory of Project Equipment Exchanges),which will be computed pursuant to the providing Participant'snational laws and regulations. If the Project Equipment is lostwhile in the custody of the receiving Participant, the receivingParticipant will issue a certificate of loss to the providingParticipant and pay the replacement value specified in Annex C(Inventory of Project Equipment Exchanges) to this MOU.

8.3. The providing Participant will deliver Project Equipmentto the receiving Participant at a mutually determined location.Possession of the Project Equipment will pass from the providingParticipant to the receiving Participant at the time of receiptof the Project Equipment. Any further transportation is theresponsibility of the receiving Participant.

8.4. All Project Equipment that is transferred will be used bythe receiving Participant only for the purposes of carrying outthis MOU, unless otherwise consented to in writing by theproviding Participant. In addition, in accordance with Section

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XIII (Third Party Sales and Transfers) of this MOU, ProjectEquipment will not be re-transferred or sold to a Third Partywithout the prior written consent of the providing Participant.

8.5. Project Equipment transferred to one Participant underthis MOU will be returned to the providing Participant prior tothe termination or expiration of this MOU.

8.6. Any Project Equipment that is jointly acquired on behalfof both Participants for use under this MOU will be disposed ofduring this Project or when the Project ceases, as determined bythe SC.

8.7. Disposal of jointly acquired equipment may include atransfer of the interest of one Participant in such ProjectEquipment to the other Participant, or the sale of such ProjectEquipment to a Third Party in accordance with Section XIII(Third Party Sales and Transfers) of this MOU. The Participantswill share the consideration from jointly acquired ProjectEquipment transferred or sold to a Third Party in the same ratioas costs are shared under this MOU.

8.8. Liability for loss of or damage to a P-8A aircraft used indevelopment or test of shared requirements in the Project willbe shared in accordance with the ratio of the Participants'shared Financial and Non-financial Costs.

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SECTION IX

DISCLOSURE AND USE OF PROJECT INFORMATION

9.1. General

9.1.1. Both Participants recognize that successfulcollaboration depends on full and prompt exchangeof Information necessary for carrying out thisProject. The Participants intend to acquiresufficient Project Information and rights to usesuch Information to enable the successfulaccomplishment of the Project as defined inSection III (Scope of Work). The nature andamount of Project Information to be acquired willbe consistent with the objectives stated inSection II (Objectives) and Section III (Scope ofWork) of this MOU.

9.1.2. The following export control provisions willapply to the transfer of Project Information:

9.1.2.1.

9.1.2.2.

9.1.2.3.

Transfer of Project Information will beconsistent with the furnishingParticipant's applicable export controllaws and regulations.

Unless otherwise restricted by dulyauthorized officials of the furnishingParticipant at the time of transfer tothe other Participant, all export-controlled Information furnished by oneParticipant to the other Participantmay be retransferred to the otherParticipant's Contractors,subcontractors, ProspectiveContractors, and prospectivesubcontractors, subject to therequirements of paragraphs 6.4. and6.5. of Section VI (ContractingProvisions) of this MOU.

Export-controlled Information may befurnished by Contractors,subcontractors, ProspectiveContractors, and prospective

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9.1.2.4.

subcontractors of one Participant'snation to the Contractors,subcontractors, ProspectiveContractors, and prospectivesubcontractors of the otherParticipant's nation pursuant to thisMOU, subject to the conditionsestablished in licenses or otherapprovals issued by the Government ofthe former Participant in accordancewith its applicable export control lawsand regulations.

If a Participant finds it necessary toexercise a restriction on theretransfer of export-controlledInformation as set out in subparagraph9.1.2.2. of this Section, it willpromptly inform the other Participant'srepresentative. If a restriction isthen exercised and the affectedParticipant objects, that Participant'sSC representative will promptly notifythe other Participant's SCrepresentative and they willimmediately consult in order to discussways to resolve such issues or mitigateany adverse effects.

9.1.3. Notwithstanding any other provision in thisSection, disclosure of Project Information willbe in accordance with the Participants'respective national disclosure policies. TheParticipants will use their best efforts tomaximize disclosure of Project Information underthis MOU within national disclosure policies andin accordance with the applicable securitybilateral agreements and arrangements.

9.2. Government Project Foreground Information

9.2.1. Disclosure: All Project Foreground Informationgenerated by a Participant's military or civilianemployees (hereinafter referred to as "GovernmentProject Foreground Information") will bedisclosed promptly and without charge to theother Participant.

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9.2.2. Use: Each Participant may use all GovernmentProject Foreground Information without charge forDefense Purposes. The Participant generatingGovernment Project Foreground Information willalso retain its rights of use thereto. Any saleor other transfer to a Third Party will besubject to the provisions of Section XIII (ThirdParty Sales and Transfers) of this MOU.

9.3. Government Project Background Information

9.3.1. Disclosure: Each Participant, upon request, willdisclose to the other Participant any relevantGovernment Project Background Informationgenerated by its military or civilian employees,provided that:

9.3.1.1. Such Government Project BackgroundInformation is necessary to theProject, with the Participant inpossession of the Informationdetermining whether it is "necessaryto" the Project.

9.3.1.2. Such Government Project BackgroundInformation may be made available onlyif the rights of holders ofIntellectual Property rights are notinfringed.

9.3.1.3. Disclosure of such Government ProjectBackground Information is consistentwith national disclosure policies andregulations of the furnishingParticipant.

9.3.1.4. Any disclosure or transfer of suchGovernment Project BackgroundInformation to Contractors isconsistent with the furnishingParticipant's export control laws andregulations.

9.3.2. Use: Government Project Background Informationfurnished by one Participant to the requestingParticipant may be used without charge by or for

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the requesting Participant for Project purposes.However, subject to Intellectual Property rightsheld by entities other than the Participants,such Government Project Background Informationmay be used for Defense Purposes by therequesting Participant, without charge, when suchInformation is necessary for the use of ProjectForeground Information. The furnishingParticipant, in consultation with the otherParticipant, will determine whether theGovernment Project Background Information isnecessary for the use of Project ForegroundInformation. The furnishing Participant willretain all its rights with respect to suchGovernment Project Background Information.

9.4. Contractor Project Foreground Information

9.4.1. Disclosure: Project Foreground Informationgenerated and delivered by Contractors(hereinafter referred to as "ContractorForeground Information") will be disclosedwithout charge to both Participants.

9.4.2. Use: Each Participant may use or have usedwithout charge for Defense Purposes allContractor Project Foreground Informationgenerated and delivered by Contractors of theParticipants. The Participant whose Contractorsgenerate and deliver Contractor ProjectForeground Information will also retain all itsrights of use thereto in accordance with theapplicable Contracts. Any sale or other transferto a Third Party of Contractor Project ForegroundInformation will be subject to the provisions ofSection XIII (Third Party Sales and Transfers) ofthis MOU.

9.5. Contractor Project Background Information

9.5.1. Disclosure: A Contracting Participant will makeavailable to the other Participant promptly andwithout charge all Contractor Project BackgroundInformation generated by Contractors that isdelivered under Contracts awarded in accordancewith this MOU. Any other Project BackgroundInformation that is generated by Contractors and

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that is in the possession of one Participant willbe made available promptly and without charge tothe other Participant, upon its request, providedthe following conditions are met:

9.5.1.1. Such Contractor Project BackgroundInformation is necessary to theProject, with the Participant inpossession of the Informationdetermining, after consultation withthe requesting Participant, whether itis "necessary to" the Project.

9.5.1.2. Such Contractor Project BackgroundInformation may be made available onlyif the rights of holders ofIntellectual Property rights are notinfringed.

9.5.1.3. Disclosure of such Contractor ProjectBackground Information is consistentwith national disclosure policies andregulations of the furnishingParticipant.

9.5.1.4. Any disclosure or transfer of suchContractor Project BackgroundInformation to Contractors isconsistent with the furnishingParticipant's export control laws andregulations.

9.5.2. Use: Any Contractor Project BackgroundInformation furnished by one Participant'sContractors and disclosed to a requestingParticipant may be used without charge by therequesting Participant for Project purposes,subject to any restrictions by holders ofIntellectual Property rights other than theParticipants; also, when necessary for the use ofProject Foreground Information, such otherContractor Project Background Information may beused by the requesting Participant for DefensePurposes, subject to such fair and reasonableterms as may be necessary to be arranged with theContractor. The furnishing Participant, inconsultation with the requesting Participant,

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will determine whether such other ContractorProject Background Information is necessary forthe use of Project Foreground Information. Thefurnishing Participant will retain all its rightswith respect to Contractor Project BackgroundInformation.

9.6. Notwithstanding paragraphs 9.2., 9.4., and 9.5. of thisSection, if an effort under this MOU is for the nationaloperational requirements of the ADOD, and in order to carry outeffective Project management, the U.S. DoD will receive, and mayuse or have used, for Project purposes, all Project ForegroundInformation generated under this MOU for the nationaloperational requirements of the ADOD. The U.S. DoD will alsoreceive all Contractor Project Background Information deliveredunder Contracts awarded for the national operationalrequirements of the ADOD, and may use or have used thatInformation for Project purposes, subject to any restrictions byholders of Intellectual Property rights.

9.7. Alternative Uses of Project Information

9.7.1. Any Project Background Information provided byone Participant will be used by the otherParticipant only for the purposes set forth inthis MOU, unless otherwise consented to inwriting by the providing Participant.

9.7.2. The prior written consent of the U.S. DoD will berequired for the use of Project ForegroundInformation by the ADOD for purposes other thanthose set out in this MOU.

9.8. Proprietary Project Information

9.8.1. All Project Information that is subject todisclosure and use restrictions with respect toIntellectual Property rights will be identifiedand marked, and it will be handled as ControlledUnclassified Information or as ClassifiedInformation, depending on its securityclassification.

9.8.2. The PSI will contain provisions regardingcommunication of Project Information when suchProject Information is subject to IntellectualProperty rights.

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9.9. Patents

9.9.1. Each Participant will include in all itsContracts for the Project a provision governingthe disposition of rights in regard to ProjectInventions and Patent rights relating theretothat either:

9.9.1.1. Provides that the Participant will holdtitle to all such Project Inventionstogether with the right to make Patentapplications for the same, free ofencumbrance from the Contractorconcerned; or

9.9.1.2. Provides that the Contractor will holdtitle (or may elect to retain title)for such Project Inventions togetherwith the right to make Patentapplications for the same, whilesecuring for the Participants a licensefor the Project Inventions, and anyPatents thereto, on terms in compliancewith the provisions of subparagraph9.9.2. of this Section.

9.9.2. In the event that a Contractor owns title (orelects to retain title) to any Project Invention,the Contracting Participant will secure for theother Participant non-exclusive, irrevocable,royalty-free licenses under all Patents securedfor that invention, to practice or have practicedthe patented Project Invention throughout theworld for Defense Purposes.

9.9.3. The provisions of subparagraphs 9.9.4. through9.9.7. below will apply in regard to Patentrights for all Project Inventions made by theParticipants' military or civilian employees,including those within Government-ownedfacilities, and for all Project Inventions madeby Contractors for which the ContractingParticipant holds title or is entitled to acquiretitle.

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9.9.4. When a Participant has or can secure the right tofile a Patent application with regard to aProject Invention, that Participant will consultwith the other Participant regarding the filingof such Patent application. The Participant thathas or receives title to such Project Inventionwill, in other countries, file, cause to befiled, or provide the other Participant with theopportunity to file on behalf of the Participantholding title, Patent applications covering thatProject Invention. A Participant willimmediately notify other Participant that aPatent application has been filed. If aParticipant, having filed or caused to be filed aPatent application, abandons prosecution of theapplication or ceases maintaining the Patentgranted or issued on the application, thatParticipant will notify the other Participant ofthat decision and permit the other Participant tocontinue the prosecution or maintain the Patentas the case may be.

9.9.5. Each, Participant will be furnished with copies ofPatent applications filed and Patents grantedwith regard to Project Inventions.

9.9.6. Each Participant will grant to the otherParticipant a non-exclusive, irrevocable,royalty-free license under its Patents forProject Inventions, to practice or have praCticedthe Project Invention throughout the world forDefense Purposes.

9.9.7. Patent applications to be filed under this MOUwhich contain Classified Information will beprotected and safeguarded in accordance with therequirements contained in the Agreement betweenthe United States and Australia regardingInterchange of Patent Rights and TechnicalInformation for Defense Purposes: Filing ofClassified Patent Applications, dated October 2,1961.

9.10. Each Participant will notify the other Participant ofany Intellectual Property infringement claims brought againstthat Participant arising in the course of work performedunder the Project on behalf of the other Participant.

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Insofar as possible, the other applicable Participant willprovide Information available to it that may assist indefending such claims. Each Participant will be responsiblefor handling such Intellectual Property infringement claimsbrought against it, and will consult with the otherParticipant during the handling, and prior to any settlement,of such claims. The Participants will share the costs ofresolving such Intellectual Property infringement claims inproportion to their financial and non-financial contributionsfor that work specified in Section V (Financial Provisions)of this MOU.

9.11. The Participants will, as permitted by their nationallaws, regulations, and practices, give their authorizationand consent for all use and manufacture in the course of workperformed under the Project of any invention covered byPatent, or as determined to be necessary for work under theProject, authorization and consent for non-commercialcopyright, granted or otherwise provided by their respectivecountries.

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SECTION X

CONTROLLED UNCLASSIFIED INFORMATION

10.1. Except as otherwise provided in this MOU or as authorizedin writing by the originating Participant, ControlledUnclassified Information provided or generated pursuant to thisMOU will be controlled as follows:

10.1.1. Such Information will be used only for thepurposes authorized for use of ProjectInformation as specified in Section IX(Disclosure and Use of Project Information) ofthis MOU.

10.1.2. Access to such Information will be limited topersonnel whose access is necessary for thepermitted use under subparagraph 10.1.1., andwill be subject to the provisions of Section XIII(Third Party Sales and Transfers) of this MOU.

10.1.3. Each Participant will take all appropriate lawfulsteps available to it, including nationalclassification, to keep such Information freefrom further disclosure (including requests underany legislative provisions), except as providedin subparagraph 10.1.2. of this Section, unlessthe originating Participant consents to suchdisclosure. In the event of unauthorizeddisclosure, or if it becomes probable that theInformation may have to be further disclosedunder any legislative provision, immediatenotification will be given to the originatingParticipant.

10.2. To assist in providing the appropriate controls, theoriginating Participant will ensure that Controlled UnclassifiedInformation is appropriately marked to ensure its "inconfidence" nature. The Participants' export-controlledInformation will be marked in accordance with the applicableParticipant's export control markings as documented in the PSI.The Participants will also decide, in advance and in writing, onthe markings to be placed on any other types of ControlledUnclassified Information and describe such markings in the PSI.

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10.3. Controlled Unclassified Information provided or generatedpursuant to this MOU will be handled in a manner that ensurescontrol as provided for in paragraph 10.1. of this Section.

10.4. Prior to authorizing the release of ControlledUnclassified Information to Contractors, the Participants willensure the Contractors are legally bound to control suchInformation in accordance with the provisions of this Section.

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SECTION XI

VISITS TO ESTABLISHMENTS

11.1. Each Participant will permit visits to its Governmentestablishments, agencies and laboratories, and Contractorindustrial facilities by employees of the other Participant orby employees of the other Participant's Contractors, providedthat the visit is authorized by both Participants and theemployees have any necessary and appropriate security clearancesand a need-to-know.

11.2. All visiting personnel will be required to comply withsecurity regulations of the hosting Participant. AnyInformation disclosed or made available to visitors will betreated as if supplied to the Participant sponsoring thevisiting personnel, and will be subject to the provisions ofthis MOU.

11.3. Requests for visits by personnel of one Participant to afacility of the other Participant will be coordinated throughofficial channels, and will conform to the established visitprocedures of the hosting Participant. Requests for visits willbear the name of the Project.

11.4. Lists of personnel of each Participant required to visit,on a continuing basis, facilities of the other Participant willbe submitted through official channels in accordance withrecurring international visit procedures.

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SECTION XII

SECURITY

12.1. All Classified Information provided or generated pursuantto this MOU will be stored, handled, transmitted, andsafeguarded in accordance with the Agreement concerning SecurityMeasures for the Protection of Classified Information, betweenAustralia and the United States, which entered into force onNovember 7, 2002. The ADOD DSA is the Head, Defence SecurityAuthority.

12.2. Classified Information will be transferred only throughofficial Government-to-Government channels or through channelsapproved by the Designated Security Authorities (DSAs) of theParticipants. Such Classified Information will bear the levelof classification and denote the country of origin, theprovisions of release, and the fact that the Information relatesto this MOU.

12.3. Each Participant will take all appropriate lawful stepsavailable to it to ensure that Classified Information providedor generated pursuant to this MOU is protected from furtherdisclosure, except as permitted by paragraph 12.8. of thisSection, unless the other Participant consents to suchdisclosure. Accordingly, each Participant will ensure that therecipient:

12.3.1. Will not release the Classified Information toany government, national, organization, orother entity of a Third Party without the priorwritten consent of the originating Participantin accordance with the procedures detailed inSection XIII (Third Party Sales and Transfers)of this MOU.

12.3.2. Will not use the Classified Information forother than the purposes provided for in thisMOU.

12.3.3. Will comply with any distribution and accessrestrictions on Classified Information that isprovided under this MOU.

12.4. The Participants will investigate all cases in which itis known or where there are grounds for suspecting that

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Classified Information provided or generated pursuant to thisMOU has been lost or disclosed to unauthorized persons. EachParticipant also will promptly and fully inform the otherParticipant of the details of any such occurrence, and of thefinal results of the investigation and of the corrective actiontaken to preclude recurrence.

12.5. The PM will prepare a PSI and a Classification Guide (CG)for the Project. The PSI and the CG will describe the methodsby which Project Information will be classified, marked, used,transmitted, and safeguarded, and will require that markings forall export-controlled Classified Information will include theapplicable export control markings identified in the PSI inaccordance with paragraph 10.2. of Section X (ControlledUnclassified Information) of this MOU. The PSI and CG will bedeveloped by the PM within three months after this MOU entersinto effect. The PSI and CG will be reviewed and forwarded tothe Participants' DSAs for approval and will be applicable toall.Government and Contractor personnel participating in theProject. The CG will be subject to regular review and revisionwith the aim of downgrading the classification whenever this isappropriate. The PSI and the CG will be approved by theappropriate DSA prior to the transfer of any ClassifiedInformation or Controlled Unclassified Information.

12.6. The DSA or their designees of the Participant that awardsa classified Contract will assume responsibility foradministering security measures within its territory for theprotection of the Classified Information, in accordance with itslaws and regulations. Prior to the release to a Contractor,Prospective Contractor, or subcontractor of any ClassifiedInformation received under this MOU, the DSAs will:

12.6.1. Ensure that such Contractor, ProspectiveContractor or subcontractor (and theirfacilities) have the capability to protect theClassified Information adequately.

12.6.2. Grant a security clearance to the facilities,if appropriate.

12.6.3. Grant a security clearance for all personnelwith duties that require access to ClassifiedInformation, if appropriate.

12.6.4. Ensure that all persons having access to theClassified Information are informed of their

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responsibilities to protect the ClassifiedInformation in accordance with nationalsecurity laws and regulations and theprovisions of this MOU.

12.6.5. Carry out periodic security inspections ofcleared facilities to ensure that theClassified Information is properly protected.

12.6.6. Ensure that access to the ClassifiedInformation is limited to those persons whohave a need-to-know for purposes of the MOU.

12.7. Contractors, Prospective Contractors, or subcontractorsthat are determined by DSAs to be under financial,administrative, policy, or management control of nationals orentities of a Third Party, may participate in a Contract orsubcontract requiring access to Classified Information providedor generated pursuant to this MOU only when enforceable measuresare in effect to ensure that nationals or other entities of aThird Party will not have access to Classified Information. Ifenforceable measures are not in effect to preclude access bynationals or other entities of a Third Party, the otherParticipant will be consulted for approval prior to permittingsuch access.

12.8. For any facility in which Classified Information is to beused, the responsible Participant or Contractor will approve theappointment of a person or persons to exercise effectively theresponsibilities for safeguarding at such facility theInformation pertaining to this MOU. These officials will beresponsible for limiting access to Classified Informationinvolved in this MOU to those persons who have been properlyapproved for access and have a need-to-know.

12.9. Each Participant will ensure that access to theClassified Information is limited to those persons who possessrequisite security clearances and have a specific need foraccess to the Classified Information in order to participate inthe Project.

12.10. Information provided or generated pursuant to this MOUmay be classified as high as Secret. The existence of this MOUis Unclassified and the contents are Unclassified.

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SECTION XIII

THIRD PARTY SALES AND TRANSFERS

13.1. Subject to paragraph 13.3. of this Section, the U.S. DoDwill retain the right to sell, transfer title to, disclose, ortransfer possession of Foreground Information, jointly acquiredProject Equipment, or any item produced either wholly or in partfrom Foreground Information to Third Parties. The U.S. DoD willnot sell, transfer title to, disclose, or transfer possession ofProject Foreground Information, jointly acquired ProjectEquipment, or any item produced either wholly or in part fromProject Foreground Information to Third Parties without priorconsultation with the other Participant through the SC.Furthermore, the U.S. DoD will not permit any such sale,disclosure, or transfer by others, including by the owner of theitem, without prior consultation with the other Participant.The U.S. DoD recognizes that sales, disclosures, or othertransfers described in this paragraph will only be made if thegovernment of the intended recipient consents in writing that itwill:

13.1.1. Not retransfer, or permit the furtherretransfer of, any equipment or informationprovided; and

13.1.2. Use, or permit the use of, the equipment orinformation provided only for the purposes forwhich such equipment or information isfurnished.

13.2. The ADOD will not sell, transfer title to, disclose, ortransfer possession of Project Foreground Information, jointlyacquired Project Equipment, or any item produced either whollyor in part from Project Foreground Information to any ThirdParty without the prior written consent of the U.S Government.Furthermore, the ADOD will not permit any such sale, disclosure,or transfer by others, including the owner of the item, withoutthe prior written consent of the U.S Government. The ADODrecognizes that such sales, disclosures, or other transfers willnot be authorized by the U.S. Government unless the governmentof the intended recipient confirms in writing with the U.S. DoDthat it will:

13.2.1. Not retransfer, or permit the further retransferof, any equipment or Information provided.

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13.2.2. Use, or permit the use of, the equipment orInformation provided only for the purposes forwhich such equipment or Information isfurnished.

13.3. In the case of Project Foreground Information that isfunded wholly by ADOD for its national operational requirements,or any item that is produced from such Project ForegroundInformation, the U.S. DoD will not sell, transfer title to,disclose, or transfer possession of such Project ForegroundInformation or any item produced from such Project ForegroundInformation to any Third Party without the prior written consentof the ADOD. Furthermore, the U.S. DoD will not permit any suchsale, disclosure, or transfer, including by the owner of theitem, without the prior written consent of the ADOD. The U.S.DoD recognizes that sales, disclosures, or other transfersdescribed in this paragraph will be made only if the Governmentof the intended recipient consents in writing that it will:

13.3.1. Not retransfer or permit the further retransferof any equipment or Information provided; and

13.3.2. Use, or permit the use of the equipment orInformation provided only for the purposes forwhich such equipment or Information isfurnished.

13.4. A Participant will not sell, transfer title to, disclose,or transfer possession of Project Background Information orProject Equipment provided by the other Participant to any ThirdParty without the prior written consent of the Government of theParticipant that provided such equipment or Information. Theproviding Participant's Government will be solely responsiblefor authorizing such transfers and, as applicable, specifyingthe method and provisions for implementing such transfers.

13.5. Consent to Third Party sales and transfers of ProjectForeground Information, jointly acquired Project Equipment, orany item produced either wholly or in part from ProjectForeground Information will be subject to foreign policyconsiderations, national security considerations, and nationallaws, regulations, and policies. A Participant Government'sapproval of the other Participant' Government's proposed sale ortransfer to a Third Party will take into account its willingnessto sell or transfer such equipment or Information to the sameThird Party.

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13.6. Sales and other transfers by a Participant or a Contractorto Third Parties of equipment developed in this Project mayattract a levy to be shared between the U.S. DoD and the ADOD inaccordance with their contributions to funding the developmentof that equipment in accordance with the following provisionsand the procedures contained in the FMPD:

13.6.1. Prior to any such sale or other transfer, theamount of any levy and procedures for assessingand distributing such levy will be mutuallydetermined by the Participants consistent withthe laws and regulations of each Participant,using a pro rata recovery method to be specifiedin the FMPD and as described in paragraph 13.6.2.of this Section.

13.6.2 The PM, in consultation with U.S. DoDauthorities, will determine the total qualifyingnon-recurring costs for research and developmentand production of the equipment proposed for saleor transfer. The research, development, andproduction non-recurring costs of such equipmentmust exceed $50 million U.S. to qualify for levycollection by one Participant or its Contractorsfor the other Participant. Qualifying non-recurring costs for levy collection will bedetermined in accordance with U.S. laws and U.S.DoD regulations concerning recoupment of non-recurring costs. Once qualifying non-recurringcosts have been determined for the equipmentproposed for sale or transfer, the PM will dividethose total costs by the total projectedproduction of that equipment, based on theprojected procurement quantities of theParticipants and Third Parties. Upon SCapproval, the resulting figure will constitutethe levy that may be assessed for the equipmentproposed for sale or transfer. EachParticipant's share of that levy will becalculated by multiplying the levy by the ratioof the Participant's total qualifying non-recurring costs for research and development andproduction of the equipment to all of theParticipants' total qualifying non-recurringcosts for research and development and productionof the equipment.

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13.7. Levies for the equipment addressed in paragraphs 13.6. ofthis Section will be collected for both Participants inaccordance with this Section, but in no event will leviescontinue to be collected for a Participant after thatParticipant's total qualifying non-recurring costs for thatequipment have been recouped. The U.S. DoD will be responsiblefor collecting levies on behalf of both Participants and willreimburse the ADOD based on the levies calculated in accordancewith this Section. The U.S. DoD will bear that responsibilityeven if the U.S. DoD decides to reduce or waive its share of thelevies in accordance with paragraph 13.8. of this Section.

13.8. A Participant may reduce or waive the assessment of itsshare of a levy on any Third Party sale or transfer.

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SECTION XIV

LIABILITY AND CLAIMS

14.1. Claims arising under this MOU will be dealt with underparagraph 1 of the Chapeau Agreement. Any costs, includingcosts of claims, to be shared under paragraph 1.b)ii. of theChapeau Agreement will be shared in accordance with the ratio ofthe Participants' shared Financial and Non-financial Costs.

14.2. The Contracting Participant will not indemnify Contractorsagainst liability for claims by any other persons.

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SECTION XV

PARTICIPATION OF ADDITIONAL NATIONS

15.1. It is recognized that other national defenseorganizations may wish to join the Project.

15.2. The U.S. DoD will consult with the ADOD prior toconducting discussions with potential additional Participants.The Participants will discuss the arrangements under whichanother Participant might join, including the furnishing ofreleasable Project Information for evaluation prior to joining.If the disclosure of Project Information is necessary to conductdiscussions, such disclosure will be in accordance with SectionIX (Disclosure and Use of Project Information), Section X(Controlled Unclassified Information), and Section XIII (ThirdParty Sales and Transfers) of this MOU.

15.3. The Participants will jointly formulate the provisionsunder which additional Participants might join. The addition ofnew Participants to the Project will require amendment of thisMOU by the Participants.

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SECTION XVI

CUSTOMS DUTIES, TAXES, AND SIMILAR CHARGES

16.1. Customs duties, import and export taxes, and similarcharges will be administered in accordance with eachParticipant's respective laws and regulations. Insofar asexisting national laws and regulations permit, the Participantswill endeavor to ensure that such readily identifiable customsduties, import and export taxes, and similar charges, as well asquantitative or other restrictions on imports and exports, arenot imposed in connection with work carried out under thisProject.

16.2. Each Participant will use its best efforts to ensure thatcustoms duties, import and export taxes, and similar charges areadministered in a manner favorable to the efficient andeconomical conduct of the work of this Project. If any suchcustoms duties, import and export taxes, or similar charges arelevied, the Participant in whose country they are levied willbear such costs over and above that Participant's shared costsof the Project.

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SECTION XVII

SETTLEMENT OF DISPUTES

17.1. Disputes between the Participants arising under orrelating to this MOU will be resolved only by consultationbetween the Participants and will not be referred to a nationalcourt, an international tribunal, or to any other person orentity for settlement.

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SECTION XVIII

AMENDMENT, TERMINATION, ENTRY INTO EFFECT, AND DURATION

18.1. All activities of the Participants under this MOU will becarried out in accordance with their respective national lawsand regulations, including their respective export control lawsand regulations. The responsibilities of the Participants willbe subject to the availability of funds for such purposes.

18.2. In the event of a conflict between a Section of this MOUand any Annex to this MOU, the MOU will control.

18.3. Except as otherwise provided, this MOU may be amended bythe mutual written consent of the Participants. Annexes A, B,and C of this MOU may be amended by the written approval of theSC, provided that any such amendment is consistent with thesections of this MOO.

18.4. This MOU may be terminated at any time upon the writtenconsent of the Participants. In the event both Participantsconsent to terminate this MOU, the Participants will consultprior to the date of termination to ensure termination in themost economical and equitable manner.

18.5. Either Participant may terminate this MOU upon 90 dayswritten notification to the other Participant of its intent toterminate. Such notice will be the subject of immediateconsultation by the SC to decide upon the appropriate course ofaction to conclude the activities under this MOU. In the eventof such termination, the following rules apply:

18.5.1. The Participant terminating this MOU willcontinue participation, financial or otherwise,up to the effective date of termination.

18.5.2. Except as to Contracts awarded on behalf ofboth Participants, each Participant will beresponsible for its own Project-related costsassociated with termination of the Project.For Contracts awarded on behalf of bothParticipants, the Participant terminating thisMOU will pay all Contract modification ortermination costs that would not otherwise havebeen incurred but for the decision toterminate; in no event, however, will a

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18.5.3.

18.5.4.

18.5.5.

terminating Participant's total financialcontribution, including Contract terminationcosts, exceed that Participant's total share ofthe Financial Cost Ceiling for financialcontributions as established in Section V(Financial Provisions) of this MOU.

Each Participant will be responsible for itsown Project-related costs associated withtermination of the Project.

All Project Information and rights thereinreceived under the provisions of this MOU priorto the termination of this MOU will be retainedby the Participants, subject to the provisionsof this MOU.

If requested by the other Participant, theterminating Participant may continue toadminister the Project Contract(s) that itawarded on behalf of the other Participant on areimbursable basis.

18.6. The respective benefits and responsibilities of theParticipants regarding Section VIII (Project Equipment), SectionIX (Disclosure and Use of Project Information), Section X(Controlled Unclassified Information), Section XII (Security),Section XIII (Third Party Sales and Transfers), Section XIV(Liability and Claims), and this Section XVIII (Amendment,Termination, Entry into Effect, and Duration) of this MOU willcontinue to apply notwithstanding termination or expiration ofthis MOU.

18.7. This MOU, which consists of eighteen (18) Sections, andfour (4) Annexes, will enter into effect upon signature by bothParticipants and will remain in effect for 8 (eight) years. Itmay be extended by written concurrence of the Participants.

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FOR THE DEPA' AP NT OF DEFENCEOF AUSTRALI

The foregoing represents the understandings reached between theDepartment of Defense of the United States of America and theDepartment of Defence of Australia

Signed, in duplicate, in the English language.

FOR THE DEPARTMENT OF DEFENSEOF THE UNITED STATES OFAMERICA

Signature

SeAd J. stAc_KLEXName

A5d (R"I A)Title

3 APR II- Zoo)Date

PNTAGoAQ'Location

S ature

4 i/tee-AAP/II 41/".114eddiJC

Name

A frmei ifis .0Title

/7 d,t/cDate

6^/8€7e/ZA r/Z_A 4

Location

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ANNEX A

SYSTEM REQUIREMENTS AND AUSTRALIAN OPERATIONAL REQUIREMENTS

1. General Description of P-8A Poseidon Spiral 1 OperationalRequirement.

The P-8A Poseidon program was initiated in response to the JointRequirements Oversight Council (JROC) validated Mission NeedsStatement (MNS), "Broad Area Maritime and Littoral ArmedIntelligence, Surveillance and Reconnaissance," and therequirements for the program are defined in the MMA OperationalRequirements Document (ORD)/ Capability Development Document(CDD), validated and approved by JROC on December 8, 2003.Subsequently, the acquisition plan approved for the P-8A wasbased on procurement of a baseline capability and includeddesign, development testing and production of a capability tomeet ORD/CDD requirements. An evolutionary acquisition strategyconsisting of incremental capability improvements that willretain cost-wise effectiveness for winning major combatoperations through 2020 was also approved in the acquisitionplan. The plan stated the baseline capability in initialproduction P-8A aircraft will be updated using "Spirals" todesign develop operational capability to meet emerging threats.The improved capability developed during the incrementalimprovement programs will be forward and back fitted to insurethe operational capability of the P-8A weapon system continuesto meet operational requirements.

Operational requirements for the first increment of capabilityimprovements have been identified and be developed and baselinedin Spiral 1. The DON Spiral 1 core objectives shall be thebaseline requirements for the cooperative project and are listedin paragraph 2.1. below. The Australian operationalrequirements variations from this content of Spiral 1 will beconsidered provided funds are supplied by ADOD, and thevariations do not unacceptably degrade existing systemperformance or negatively affect incorporation of DON Spiral 1requirements or impact Spiral 1 delivery schedules. The currentlist of Australian operational requirements for considerationare listed in paragraph 2.2. The capabilities in paragraph 2.1.and 2.2. will be evaluated by the Participants and combined intoa consolidated final list. The Project will include a detailedanalysis of the critical technologies, technology maturity,technical risk, and a cost assessment required to incorporatethe proposed capabilities.

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2. Capabilities Required.

2.1. Candidate DON capabilities (Spiral 1 Priority): In orderto pace the threat, the Participants have concluded that thecapability improvements listed below are first priority forSpiral 1 development. These capability improvements include,but are not limited to:

Advanced Extended Echo Ranging SystemAutomatic Identification SystemAcoustic Rapid Commercial-Off-The-Shelf InsertionIntegrated Broadcast ServicesCapability upgrades to the Tactical Support Center

2.2. Candidate Australian Operational Requirements:

The ADOD has identified the following capability improvements aspossible Australian operational requirements.

Integration of MU90 torpedoIntegration of Harpoon Block II or IIIIntegration of Joint Air to Surface Standoff Missile(JASSM)JASSM-MI Link 16 mid-course guidanceRadar Auto TrackRadar Ground Moving Target IndicatorEO/IR upgrades (Rangefinder, Designator)6th Crew StationBarra sonobuoy integrationAir Launched Rescue Craft

2.3. Australian Integrated Ground Environment (IGE) andIndustry Capability Partner (ICP):

The ADOD has identified an Australian operational requirement tointegrate a variety of national systems with both P-8A and BroadArea Maritime Surveillance (BAMS) Unnmanned Aerial System (UAS)ground elements. The ADOD has designated an ICP who will beunder Contract to the ADOD to provide the IGE and associatedelements in order to accomplish this integration effort. TheU.S. DoD will assist the ADOD and the ICP on a not-to-interferebasis with Project goals, schedules, and Contracting, in orderto facilitate and assist in the accomplishment of this effort interms of anticipated P-8A system interfaces with the IGE. Ifnecessary, the ADOD can request that the U.S. DoD Contract onits behalf in order to accomplish elements of these efforts.

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ANNEX B

JOINT PROJECT OFFICE ORGANIZATION

1. Staffing for the JPO will be as shown below.

Project Management

Project Steering CommitteeUSN Representative: PEO(A)

ADoD Representative

P-8A Program Manager (USN)PMA-290

P -8A IPT Lead (USN)PMA-290 M

P -8A Spiral 1 ProjectUSN Project Manager

USN Deputy Project Manager/RAAF Deputy Project Manager

JPO Staff

Mission Systems Aircraft Systems Interoperability Weapons Product Support Training

TABLE B-1

The ADOD may assign up to three CPP (a DPM and two IPT members).The Steering Committee and the Project Manager will have theresponsibilities regarding CPP as set out in Annex D(Cooperative Project Personnel).

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ANNEX C

INVENTORY OF PROJECT EQUIPMENT EXCHANGES

NOMENCLATURE PART NO./MODEL NO.

REPLACEMENTVALUE

RECEIVINGPARTICIPANT

DATETRANSFERRED

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ANNEX D

COOPERATIVE PROJECT PERSONNEL

1.0. Purpose and Scope

1.1. This Annex establishes the provisions that will govern theconduct of Cooperative Project Personnel (CPP). The ParentParticipant will assign military members or civilian employeesto the JPO in accordance with Section IV (Management(Organization and Responsibility)), Annex B (Joint ProjectOffice Organization), and this Annex. CPP must be able toperform all the responsibilities assigned to them under thisMOU. Commencement of assignments will be subject to anyrequirements that may be imposed by the Host Participant or itsGovernment regarding acceptance of CPP, such as, but not limitedto, visas and visit request documentation. The SC willdetermine the length of tour for the positions at the time ofinitial assignment.

1.2. CPP will be assigned to the JPO for Project work and willreport to their designated JPO supervisor regarding that work.The PM will be responsible for the creation of a documentdescribing the duties of each CPP position, which will besubject to approval by the SC. CPP will not act as liaisonofficers on behalf of the Parent Participant. CPP may act fromtime to time on behalf of their respective SC member if thelatter so authorizes in writing.

1.3. CPP will not be assigned to command or other positionsthat would require them to exercise responsibilities that arereserved by law or regulation to an officer or employee of theHost Participant's Government.

2.0. Security

2.1. The SC will establish the maximum level of securityclearance required, if any, to permit CPP to have access toClassified Information and facilities in which ClassifiedInformation is used in accordance with the Project SecurityInstruction (PSI) and Classification Guide (CG). Access toClassified Information and facilities in which ClassifiedInformation is used will be consistent with, and limited by,Section II (Objectives) and Section III (Scope of Work) of thisMOU and will be kept to the minimum required to accomplish thework assignments.

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2.2. The Parent Participant will file visit requests for theCPP through prescribed channels in compliance with the HostParticipant's procedures. As part of the visit requestprocedures, the Parent Participant will cause securityassurances to be filed, through the Parent Participant'sgovernment's embassy located in the Host Participant's countryspecifying the security clearances for the CPP being assigned.

2.3. The Host Participant and Parent Participant will use theirbest efforts to ensure that CPP assigned to the JPO are awareof, and comply with, applicable laws and regulations as well asthe requirements of Section X (Controlled UnclassifiedInformation), Section XI (Visits to Establishments), Section XII(Security), and paragraph 18.6. of Section XVIII (Amendment,Termination, Entry into Effect, and Duration) of this MOU andthe provisions of the PSI and CG. Prior to commencing assignedduties, CPP will, if required by the Host ParticipantGovernment's laws, regulations, policies, or procedures, sign acertification concerning the conditions and responsibilities ofCPP.

2.4. CPP will at all times be required to comply with thesecurity and export control laws, regulations, and procedures ofthe Host Participant's Government. Any violation of securityprocedures by CPP during their assignment will be reported tothe Parent Participant for appropriate action. CPP committingsignificant violations of security and export control laws,regulations, or procedures during their assignments will bewithdrawn from the Project with a view toward appropriateadministrative or disciplinary action by their ParentParticipant.

2.5. All Classified Information made available to CPP will beconsidered as Classified Information furnished to the ParentParticipant, and will be subject to all provisions andsafeguards provided for in Section XII (Security), the PSI, andCG.

2.6. CPP will not have personal custody of ClassifiedInformation or Controlled Unclassified Information unlessapproved by the Host Participant and as authorized by the ParentParticipant. They will be granted access to such Information inaccordance with Section X (Controlled Unclassified Information),Section XII (Security) of this MOU, and the PSI during normalduty hours at the JPO and when access is necessary to performProject work.

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2.7. CPP assigned to the JPO will not serve as a conduitbetween the Host Participant and Parent Participant for requestsand/or transmission of Classified Information or ControlledUnclassified Information unless specifically authorized in thePSI.

3.0. Technical and Administrative Matters

3.1. Consistent with the Host Participant's government laws andregulations, and subject to applicable multilateral or bilateralagreements or arrangements, CPP will be subject to the samerestrictions, conditions, and privileges as Host Participantpersonnel of comparable rank and in comparable assignments.Further, to the extent authorized by the Host ParticipantGovernment's laws and regulations, and any applicablemultilateral or bilateral agreements or arrangements, CPP andtheir authorized dependents will be accorded:

3.1.1 Exemption from any Host Participant's Governmenttax upon income received from the ParentParticipant; and

3.1.2 Exemption from any Host Participant's Governmentcustoms and import duties or similar chargeslevied on items entering the country for theirofficial or personal use, including theirbaggage, household effects, and private motorvehicles.

3.2. On arrival, CPP will be provided briefings arranged by theJPO about applicable laws, orders, regulations, and customs andthe need to comply with them. CPP will also be providedbriefings arranged by JPO regarding entitlements, privileges, andobligations such as:

3.2.1. Any medical and dental care that may be providedto CPP and their dependents at Host Participantmedical facilities, subject to the requirementsof applicable laws and regulations, includingreimbursement requirements.

3.2.2. Purchasing and patronage privileges at militarycommissaries, exchanges, theaters, and clubs forCPP and their dependents, subject to therequirements of applicable laws and regulations.

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3.2.3. The Host Participant will provide, if available,housing and messing facilities for CPP and theirdependents on the same basis and priority as forits own personnel. CPP will pay messing andhousing charges to the same extent as HostParticipant personnel. At locations wherefacilities are not provided by the HostParticipant for its own personnel, the ParentParticipant will make suitable arrangements forits CPP.

3.2.4. Responsibility of CPP and their accompanyingdependents to obtain motor vehicle liabilityinsurance coverage in accordance with the lawsand regulations applicable in the area where theyare residing. In case of claims involving theuse of private motor vehicles by CPP, therecourse will be against such insurance.

3.3. The PM, through the JPO, will, in consultation with theCPP, establish standard operating procedures for CPP in thefollowing areas:

3.3.1. Working hours, including holiday schedules.

3.3.2. Leave authorization, consistent to the extentpossible with the military and civilian personnelregulations and practices of the Host Participantand Parent Participant.

3.3.3. Dress regulations, consistent to the extentpossible with the military and civilian personnelregulations and practices of the Host Participantand Parent Participant.

3.3.4. Performance evaluations, recognizing that suchevaluations will be rendered in accordance withthe Parent Participant's military or civilianpersonnel regulations and practices.

3.4. CPP committing an offense under the laws of the Governmentof the Host Participant or Parent Participant may be withdrawnfrom this Project with a view toward further administrative ordisciplinary action by the Parent Participant. Disciplinaryaction, however, will not be taken by the Host Participantagainst CPP, nor will the CPP exercise disciplinary powers overthe Host Participant's personnel. In accordance with Host

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Participant Government's laws and regulations, the HostParticipant will assist the Parent Participant in carrying outinvestigations of offenses involving CPP.

3.5. During their JPO assignment, CPP will not be placed in thefollowing duty status or environments unless mutually decided bythe SC:

3.5.1. Areas of political sensitivity where theirpresence may jeopardize the interests of eitherthe Host Participant or Parent Participant, orwhere, in the normal course of their duty, theymay become involved in activities that mayembarrass either Participant.

3.5.2. Deployments in non-direct hostility situations,such as UN peacekeeping or multi-nationaloperations, or third countries.

3.5.3. Duty assignments in which direct hostilities arelikely. Should a JPO to which CPP are assignedbecome involved in hostilities unexpectedly, CPPassigned to that JPO will not be involved in thehostilities. Any such CPP approved by the SC forinvolvement in hostilities will be given specificguidance as to the conditions under which theassignment will be carried out by the appropriateauthorities of the Host Participant and ParentParticipant.

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