As stated in sub-paragraph 3D of this Agreement, the claims between the two Governments listed in this Appendix are among those settled by this Agreement and appropriate allowances have been made therefor in computing the net amount due from the Netherlands Government to the United States Government under sub-paragraph 1A of this Agreement.

I. Claims of the Netherlands Government

As used in this Agreement the term „large U.S. 7 (c) ships” means the ships listed in Schedule 1 hereto attached, and the term „small U S. 7 (c) ships” means the ships listed in Schedule 2 hereto attached. All these ships were originally among those chartered by the British Minister of War Transport from the Netherlands Government pursuant to the „Memorandum of Arrangement Regarding Netherlands East Indies Shipping. 5th June 1942.” and allocated to the United States Government. They were the ships later removed from that arrangement, with the concurrence of the United Kingdom Government, by an exchange of notes between the Netherlands Embassy at Washington and the United States Department of State dated June 6, 1945 and July 31, 1945, and they were severally operated by the Netherlands Government for the United States Government in conformity with that exchange of notes for the whole of the 7 (c) period (as defined below) or from the beginning of the 7 (c) period until they were allocated during the 7 (c) period to the United Kingdom Government. The designation „7(c)”derives from the application to these ships of paragraph 7 (c) (second sentence) of the Agreement on Principles Having Reference to the Co-ordinated Control of Merchant Shipping, signed in London on August 5, 1944.

The term „7(c) period” means, as used in this Agreement, in respect of the large U. S. 7(c) ships and the small U. S. 7(c) ships, the period from midnight May 23, 1945 until the date of redelivery in each case to the Netherlands Government, or until March 2, 1946, whichever was the earlier.

As used in this Agreement the term „June 5 Memorandum” means the above mentioned Memorandum of June 5, 1942. 28

A. The following claims of the Netherlands Government against the United States Government in connection with the large U. S. 7(c) ships are among those settled by this Agreement:

1. Services and supplies for the large U. S. 7(c) ships during the 7(c) period.

2.

(a) Reconditioning and reconversion of the ships listed in Part A of Schedule 1 hereto attached, and

(b) reconversion, as distinguished from reconditioning, of the ships listed in Part B of Schedule 1 hereto attached.

(i) The contribution of the United States Government toward vessel expenses during the respective periods of reconditioning reconversion, forming part of the allowance for the claims set forth in clauses 2(a) and 2(b) immediately above, has been computed on the basic bareboat rate under the June 5 Memorandum and respective time estimates for reconditioning/reconversion provided by the Netherlands Government.

(ii) The allowance made by the United States Government for the replacement of furniture has been computed on the basis of the articles named in the respective off-survey reports, and on the basis of the cost of procurement and installation of the furniture at the respective ports of reconversion.

(iii) The allowance made by the United States Government in respect of reconversion has been made, inter alia, on the basis of removing and making good in the way thereof fittings added during the conversion of the ships, and takes account of an allowance made by the Netherlands Government to the United States Government for equipment of the United States Government left aboard. Such equipment becomes the property of the Netherlands Government.

(iv) The allowance made by the United States Government with respect to reconditioning includes war risk insurance damage to the ships listed in Part A of Schedule 1 hereto attached, in so far as such damage was incurred during the 7(c) period.

3. Costs of medical departments maintained by the Netherlands Government in the United States with respect to the large U. S. 7(c) ships during the 7(c) period.

4. Services as Accounting Line (agency services) for the large U. S. 7(c) ships with respect to the 7(c) period.

B. The following claims of the Netherlands Government against the United States Government in connection with the small U. S. 7(c) ships are among those settled by this Agreement:

1. Services and supplies for the small U. S. 7(c) ships while they were severally operated by the Netherlands Government for the United States Government during the 7(c) period.

2. Reconversion and reconditioning of the small U. S. 7(c) ships. The claim put forward by the Netherlands Government and the allowance therefor made by the United States Government have been restricted to expenses of reconversion and reconditioning attributable to the use of the ships by the United States Government during the 7(c) period and have been computed on a pro-rata basis on figures submitted by the Netherlands Government covering the over-all reconversion-reconditioning expenses arising from the date of delivery of the vessels under their basic charterparties in 1942. This claim is without prejudice to claims for additional reconversion/reconditioning expenses under the basic charterparties.

3. Services as Accounting Line (agency services) for the small U. S. 7(c) ships with respect to the period while they were severally operated by the Netherlands Government for the United States Government during the 7(c) period.

C. The following further shipping claims of the Netherlands Government against the United States Government are among those settled by this Agreement:

1. A portion of the costs (not paid by the United States Navy) of arming certain Netherlands ships chartered pursuant to the June 5 Memorandum and allocated to the United States Government.

2. 80 % payable in dollars, of the hire increase on ships chartered pursuant to the June 5 Memorandum (the hire increase being one shilling per deadweight ton per month from July 1, 1944 until redelivery and (due to the waiver of off-hire insurance) sixpence per deadweight ton per month from July 1, 1944 to December 31, 1944). The allowance made by the United States Government in respect of this claim is accepted by the Netherlands Government in satisfaction of its claim under the June 5 Memorandum for 80 %, payable in dollars, of such hire increase.

3. Dollar expenditures for free Netherlands ships in United States ports between August 21, 1941 and September 30, 1945 of a type eligible for lend-lease.

4. Charter hire in the amount of $ 180,000 under „bareboat out-time charter back” chartering arrangements (claim withdrawn in consideration of the withdrawal by the United States Government of its claim for reduction of charter hire under such arrangements).

II. Claims of the United States Government

A. The following claims of the United States Government against the Netherlands Government are among those settled by this Agreement:

1. Equipment of the United States Government left aboard the large U. S. 7 (c.) ships, as stated in sub-paragraph IA2 (Hi) of this Appendix.

2. Dollar amounts due for retroactive reverse lend-lease under the exchange of letters between E. C. Zimmerman, Chairman of the Netherlands Purchasing Commission, and Charles Denby, Special Assistant for Reciprocal Aid, Foreign Economic Administration, dated September 20 and 26, 1944.