ARTICLE X-TARIFF INFORMATION

1. A copy of any Comsat tariff or amended tariff for the services furnished hereunder shall be furnished promptly to the contracting officer. At the time of filing of any application or tariff seeking the establishment of, or change in, rates and charges for services, Comsat shall notify the contracting officer thereof and shall furnish a copy of the application or tariff. Comsat shall also furnish a copy of all information, material, and data developed or prepared in support of or in connection with such application tariff. The foregoing requirements shall apply to applications or tariffs pending on the effective date of this agreement.

2. Comsat agrees that any application or tariff filed in connection with the services furnished hereunder shall not be inconsistent with the terms and conditions applicable to such services which are contained in this agreement.

ARTICLE XI-TERMINATION

1. NASA may terminate this agreement, in whole or in part, for the convenience of the Government, in accordance with the provisions of this article, whenever NASA shall determine that such termination is in the best interests of the Government. For the purposes of this article, the phrase "termination in part" means termination of all services from either the Atlantic Ocean area satellite or the Pacific Ocean area satellite.

2. Termination under this article shall be effected by delivery of a written notice of termination, which shall specify the extent to which NASA's requirements for services hereunder are being terminated, and the date upon which such termination shall become effective. If such notice of termination is delivered during a period of war or national emergency declared by the Congress of the United States, or is delivered prior to the date on which services are made available hereunder, the effective date of termination specified may be immediate. Other than during a period of war or national emergency declared by the Congress of the United States, if such notice of termination is delivered on or after the date services have been made available, in whole or in part, hereunder, as defined in paragraph 1 of this article, the effective date of termination specified shall not be earlier than 30 days from the date the services being terminated were made available, or earlier than 14 days from the date of the notice of termination, whichever is later; Provided, That this notice provision shall not apply to the notice of termination delivered pursuant to article VII hereof. Unless NASA requests otherwise, Comsat agrees that it will use its best efforts to mitigate expenses incident to the furnishing of services between the date a notice of termination is delivered and its effective date.

3. (a) If the effective date of termination is prior to the date services are made available hereunder, Comsat shall, upon receipt of the notice of termination, and to the extent directed by NASA (i) discontinue the placing of orders for the facilities and equipment required to furnish the services; (ii) cancel promptly, and, with the approval or ratification of the contracting officer, to the extent he may require such approval or ratification, settle existing contracts, orders, and commitments of Comsat, in accordance with the settlement terms, if any, of such contracts, orders, and commitments, and to the extent they are chargeable to this agreement or to the termination portion thereof; and (iii) notify the contracting officer in writing of its election to retain at cost, without the concurrence of the contracting officer, any facilities and equipment required to furnish the terminated portion of the services to which it has obtained or may obtain title; and/or make written request to the contracting officer to retain any such facilities and equipment upon other terms; and/or use its best efforts to sell or otherwise dispose of, in the manner, at the time; to the extent, and at the price or prices directed or authorized by the contracting officer, any other such facilities and equipment: Provided, That Comsat shall not be required to extend credit to any purchaser of such facilities or equipment.

1

n

(b) Upon termination under this paragraph, NASA shall be liable for and shall pay Comsat the direct and indirect nonrecoverable costs which ba incurred by Comsat, or for which Comsat is or may become liable, in connection with the procurement and establishment of the facilities and equipment required to furnish the terminated portion of the services, but in no event shall NASA be liable in an amount exceeding $15,873,653. For purposes of this subparagraph, the term "nonrecoverable costs" shall mean the total direct and indirect costs incurred by Comsat, as referred to above, less the net salvage value of any

facilities and equipment to which Comsat has obtained or can obtain title under approved settlement of its contracts, orders, and commitments; the term "net salvage value" shall mean

(i) For facilities and equipment which Comsat elects by written notice to the contracting officer to retain at cost, the total cost thereof;

(ii) For facilities and equipment which Comsat elects to retain upon other terms, as prescribed or approved by the contracting officer in writing, the price or prices approved by the contracting officer;

(iii) For facilities and equipment sold by Comsat as directed or authorized by the contracting officer, the net amount or amounts realized from such sale; and

(iv) For facilities and equipment disposed of otherwise than by sale, the net amount or amounts, if any, realized from such disposition.

4. If the effective date of termination is on or after the date services have been made available, either in the Atlantic Ocean area or in the Pacific Ocean area, or in both areas, hereunder, NASA shall be liable for and shall pay Comsat an amount equal to the amount that NASA would be required to pay for the services which have been made available, during the full period of service provided for under article VI hereof, notwithstanding the termination of this Agree ment, less an amount equal to the sum of

(i) All payments made or which are payable by NASA prior to the effeetive date of termination;

(ii) All payments that NASA will be required to make during the term of this agreement for services not terminated;

(iii) Any payments (less amounts representing Comsat's return on investment, and the amount allowed for taxes) which Comsat receives from the sale of circuits using the units of satellite utilization which became available to Comsat as a result of the termination by NASA : Provided, That any sale of such circuits by Comsat subsequent to the effective date of the termination by NASA shall be deemed not to be a sale of circuits from units of satellite utilization which became available to Comsat as a result of the termination by NASA unless, at the time of such sale, the capacity of the satellite or satellites affected by such termination was being utilized to the maximum extent it could have been utilized for furnishing circuits to persons or entities other than NASA at the same time as the services furnished pursuant to article II hereof were being furnished to NASA, it being understood that Comsat shall use its best efforts to effect such sale of circuits but shall not incur any liability if it fails to effect such sale.

(iv) Any of Comsat's costs of operation and maintenance which are eliminated as a result of the termination or notice of termination.

(v) Amounts representing the return that Comsat would have received on Comsat's capital investment, and the amount allowed for taxes, which NASA would have been required to pay during the remaining portion of the full period of service provided for under article VI hereof.

5 (a) Comsat shall submit its claim or claims for termination charges in ac cordance with this article in the shortest practical time, it being recognized and agreed that Comsat may not be in a position to submit all of its claims at the same time. NASA shall make provisional payments of the amounts claimed within 30 days. If, and to the extent termination costs are to be determined pursuant to paragraph 3 of this article, Comsat will submit its final claim here under as soon as possible. If, and to the extent termination costs are to be determined pursuant to paragraph 4 of this article, Comsat will submit its final claim hereunder after the close of the full period of service provided for under article VI hereof. NASA will pay or otherwise settle the final claim as promptly as possi ble. All claims submitted hereunder shall be supported by sufficient evidence to support the amount claimed. Any disagreements between the parties which are not resolved to the mutual satisfaction of the parties shall be settled in accordance with article XXII hereof, entitled "Disputes."

(b) Comsat's final claim will provide for a credit in favor of NASA for payments previously made to Comsat, pursuant to paragraph 3(b) of this article, for "nonrecoverable costs" of the items of facilities and equipment, to the extent Comsat recovers such costs from others during the period prior to the date of submission of the final claim. The final claim will also provide a credit in favor of NASA, to the extent not previously provided, for additional payments, if any. received by Comsat from the sale of circuits pursuant to paragraph 4(iii) of this article.

ARTICLE XXII-DEFAULT

NASA may, by written notice of default to Comsat, also terminate this agreement, in whole or in part, without any liability to Comsat, if Comsat fails to make the services available in either the Atlantic Ocean area or the Pacific Ocean area, or in both areas, by April 1, 1967, or by such later date as may have been approved by the contracting officer. For purposes of this article, termination "in part" means termination of all service from either the Atlantic Ocean area satellite, or the Pacific Ocean area satellite. NASA agrees, however, that the exercise of the right of termination under this article shall be subject to the following conditions:

1. If Comsat has made services available in either the Atlantic or the Pacific Ocean area by April 1, 1967, or by such later date as may have been approved by the contracting officer, NASA will not exercise its right of termination hereunder with respect to those services.

2. If the reason for Comsat's failure to make services available, in either the Atlantic or the Pacific Ocean area, or in both areas, by April 1, 1967, or by such later date as may have been approved by the contracting officer, is that NASA has postponed or rescheduled a scheduled launching or launchings of an Intelsat II spacecraft for a cause not attributable to Comsat's lack of readiness for such a launching, NASA will not exercise its right of termination hereunder for an additional amount of time, beyond April 1, 1967, or beyond such later date as may have been approved by the contracting officer, which is equal to the period of delay that is attributable to the postponement or rescheduling of a scheduled launching or launchings.

3. If the reason for Comsat's failure to make services available, in either the Atlantic or Pacific Ocean area, or in both areas, by April 1, 1967, or by such later date as may have been approved by the contracting officer, is that there has been more than one unsuccessful attempt by NASA to inject an Intelsat II spacecraft into a satisfactory transfer orbit, NASA will not exercise its right of termination hereunder for an additional amount of time, beyond April 1, 1967, or beyond such later date as may have been approved by the contracting officer, which is equal to the period of delay that is attributable to the second and subsequent unsuccessful attempts. For purposes of this provision, the term "unsuccessful attempt" shall be deemed to include also a scheduled launching which does not occur because of a launch vehicle malfunction occurring prior to the time of launching.

ARTICLE XIII-ALLOWANCE FOR INTERRUPTIONS

1. In connection with the furnishing of services under this agreement, Comsat shall make no allowance for interruptions of less than 30 minutes to any or all of the channels being furnished for NASA use in either the Atlantic or Pacific Ocean areas. Otherwise, except as provided in paragraph 2 below, interruptions of 30 minutes or more to any or all of such channels, which are not due to the negligence of the Government or the failure of facilities or equipment provided and operated by the Government, shall be credited to NASA in an amount equal to the monthly charge for all such channels in the area involved, in half-hour multiples for each half-hour or major fraction thereof of interruption. For the purpose of computing such credit, a month will be considered to have 30 days. 2. If an interruption of 30 minutes or more occurs with respect to some but not all of the channels being furnished for NASA use in an area, NASA shall have the option either of treating such interruption as an interruption to all the channels in that area, and not using any of the channels which remain available for service, or of continuing to use any or all of such remaining channels during the period of interruption. In the event NASA continues to use any or all of such remaining channels, the interruption allowance will be reduced proportionately for the number of channels used by NASA. For purposes of this paragraph, each teletypewriter grade channel will be considered as one-half an equivalent voice grade channel.

ARTICLE XIV-TESTING AND ADJUSTING

Comsat may, upon suitable notice and at reasonable times, make such tests and adjustments as may be necessary to maintain the services in satisfactory operating condition. No interruption allowance will be made to NASA for the time such tests and adjustments are made, provided NASA has been notified in advance and has agreed to the proposed interruption.

67-906-6653

ARTICLE XV-LIABILITY FOR DAMAGES

Comsat shall not be liable for any loss suffered by NASA through any failure of, or error in, communication by means of any of the said services, equipment. and facilities, however caused, whether or not by any action or default on the part of Comsat, its officers, servants, or agents.

ARTICLE XVI-TRANSMISSION OF LIBEL, SLANDER, OR MATERIAL INFRINGING

COPYRIGHTS

In the use of the services provided hereunder NASA agrees not to transmit or permit to be transmitted any material, information or communication which is libelous or slanderous or which infringes any valid copyright. NASA agrees to defend on behalf of Comsat any suit involving a claim of libel, slander or copyright infringement, based on the use of the services furnished under this agreement.

ARTICLE XVII-USE OF NASA FACILITIES OR EQUIPMENT

The characteristics of any facilities or equipment used by NASA in connection with the services furnished hereunder shall be such that their use does not interfere with the effective operation of the satellite communications system.

ARTICLE XVIII-PERMITS AND LICENSES

Comsat agrees to use its best efforts to procure all necessary permits and licenses required to furnish the services hereunder.

ARTICLE XIX-AUDIT AND RECORDS

1. Comsat shall maintain books, records, documents, and other evidence, and accounting procedures and practices, sufficient to reflect properly the direct and indirect costs, including books, records, documents, and papers of Comsat which furnish the basis for (i) charges of applicable filed tariffs or for (ii) nontariff items being provided under this agreement. The foregoing constitute "records" for the purposes of this article.

2. Comsat's records shall be subject at all reasonable times to inspection by the contracting officer or his authorized representative.

ARTICLE XX-EXAMINATION OF RECORDS

Comsat agrees that the Comptroller General of the United States, or any of his duly authorized representatives shall, until the expiration of 3 years after final payment under this agreement, have access to and the right to examine any directly pertinent books, documents, papers, and records of Comsat involving transactions relating to this agreement. This obligation is in addition to the FCC regulatory requirements regarding retention of records.

ARTICLE XXI-OBLIGATION OF FUNDS

For purposes of Government fiscal procedures, no funds are obligated by this agreement. Funds will be obligated by communications service authorizations issued pursuant to the terms of this agreement, or, in the event the agreement is terminated pursuant to article XI hereof, by the issuance of the notice of termination.

ARTICLE XXII-DISPUTES

1. Except as otherwise provided in this agreement, any dispute concerning a question of fact arising hereunder, which is not disposed of by agreement shall be decided by the contracting officer, who shall reduce his decision to writing and mail or otherwise furnish a copy thereof to Comsat. The decision of the contracting officer shall be final and conclusive, unless, within 30 days from the date of receipt of such decision, Comsat mails or otherwise furnishes to the contracting officer a written appeal addressed to the Administrator. The decision of the Administrator or his duly authorized representative for the determination of such appeals shall be final and conclusive unless determined by a court of competent jurisdiction to have been fraudulent or capricious, or arbitrary, or so grossly erroneous as necessarily to imply bad faith, or not supported by substantial evidence. In connection with any appeal proceeding under this article, Comsat shall be afforded an opportunity to be heard and to offer evidence

in support of its appeal. Pending final decision of the dispute herein, Comsat shall proceed diligently with performance of the agreement, in accordance with the decision of the contracting officer.

2. This "disputes" article does not preclude consideration of law questions in connection with decisions provided for in paragraph 1 above; Provided, That nothing in this agreement shall be construed as making final the decision of any administrative official, representative, or Board on a question of law.

3. The provisions of paragraph 1 above shall not apply to disputes which are subject to the jurisdiction of the Federal Communications Commission, and such provisions shall be subject to the requirements of applicable law with respect to the rendition of communications services and the collection of tariff charges.

ARTICLE XXIII-OFFICIALS NOT TO BENEFIT

No member of or delegate to Congress, or Resident Commissioner, shall be admitted to any share or part of this agreement, or to any benefit that may arise therefrom; but this provision shall not be construed to extend to this agreement if made with a corporation for its general benefit.

ARTICLE XXIV-COVENANT AGAINST CONTINGENT FEES

Comsat warrants that no person or selling agency has been employed or retained to solicit or secure this agreement upon an agreement or understanding for a commission, percentage, brokerage, or contingent fee, excepting bona fide employees or bona fide established commercial or selling agencies maintained by Comsat for the purpose of securing business. For breach or violation of this warranty, the Government shall have the right to annul this agreement without liability on its part, or in its discretion, to deduct from the amounts becoming payable hereunder, or to recover otherwise, the full amount of such commission, percentage, brokerage, or contingent fee.

ARTICLE XXV-SMALL BUSINESS SUBCONTRACTING PROGRAM

Comsat represents and agrees that it has established and will conduct a small business subcontracting program in accordance with the regulations of the Federal Communications Commission.

ARTICLE XXVI-NOTICE TO THE GOVERNMENT OF LABOR DISPUTES

Whenever Comsat has knowledge that any actual or potential labor dispute is delaying or threatens to delay the timely performance of this agreement, it shall immediately give notice thereof, including all relevant information with respect thereto, to the contracting officer.

ARTICLE XXVI-SECURITY REQUIREMENTS

1. The provisions of this article shall apply to the extent that performance of this agreement involves access to information classified "confidential" or higher. 2. NASA shall notify Comsat of the security classification of this agreement and its appendix, and of any subsequent revisions in such security classification, by the use of a security requirements checklist (DD Form 254), or other written notification.

3. Comsat agrees to execute, if it has not already done so, a security agreement (DD Form 441) with the Government, represented by the military department assigned security cognizance over its facilties. To the extent the Government has indicated, as of the date of this agreement, or thereafter indicates a security classification under this agreement as provided in paragraph 2 above, Comsat shall safeguard all classified elements of this agreement and shall provide and maintain a system of security controls within its own organization in accordance with the requirements of—

(a) the security agreement (DD Form 441), including the Department of Defense Industrial Security Manual for Safeguarding Classified Information in effect on the date of this agreement, and any modification to the security agreement for the purpose of adapting the manual to Comsat's business; and

(b) any amendments to said manual made after the date of this agreement, noticle of which has been furnished to Comsat by the security office of the military department assigned security cognizance over the facility.