Exhibit 10.37


 Information contained herein, marked with [***], is being filed pursuant to a
                      request for confidential treatment.



                              FIXED PRICE CONTRACT

                                     BETWEEN

                       HUGHES COMMUNICATIONS GALAXY, INC.

                                       AND

                      HUGHES SPACE & COMMUNICATIONS COMPANY

                                       FOR

                                 GALAXY XI HS702

                 SPACECRAFT, RELATED SERVICES AND DOCUMENTATION



                             CONTRACT No. 96-HCG-002


<PAGE>


                                TABLE OF CONTENTS


                                                                           PAGE



ARTICLE 1.  EXHIBITS AND INCORPORATIONS.......................................2


ARTICLE 2.  ORDER OF PRECEDENCE...............................................3


ARTICLE 3.  SPACECRAFT, DOCUMENTATION AND RELATED SERVICES....................4


ARTICLE 4.  DELIVERABLES AND SCHEDULE.........................................6


ARTICLE 5.  PRICE.............................................................9


ARTICLE 6.  PAYMENTS.........................................................10


ARTICLE 7.  SPACECRAFT LAUNCH DATE...........................................14


ARTICLE 8.  BUYER-FURNISHED ITEMS............................................16


ARTICLE 9.  INSPECTION AND ACCEPTANCE........................................19


ARTICLE 10. ACCESS TO WORK IN PROCESS........................................20


ARTICLE 11. TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY.................21


ARTICLE 12. EXCUSABLE DELAYS.................................................23


ARTICLE 13. AMENDMENTS.......................................................24


ARTICLE 14. TITLE AND RISK OF LOSS...........................................25


ARTICLE 15. SPACECRAFT WARRANTY..............................................28


ARTICLE 16. INDEMNIFICATION..................................................30


ARTICLE 17. SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE.......31


ARTICLE 18. PATENT/COPYRIGHT INDEMNITY.......................................32


ARTICLE 19. RIGHTS IN INVENTIONS.............................................34


ARTICLE 20. INTELLECTUAL PROPERTY RIGHTS.....................................36


ARTICLE 21. FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE...............37


ARTICLE 22. PUBLIC RELEASE OF INFORMATION....................................39


                                      (i)
<PAGE>

ARTICLE 23. TAXES............................................................40


ARTICLE 24. GOVERNING LAW....................................................41


ARTICLE 25. TITLES...........................................................42


ARTICLE 26. NOTICES AND AUTHORIZED REPRESENTATIVES...........................43


ARTICLE 27. INTEGRATION......................................................44


ARTICLE 28. CHANGES..........................................................45


ARTICLE 29. EFFECTS OF STORAGE ON BATTERIES..................................48


ARTICLE 30. INTER-PARTY WAIVER OF LIABILITY..................................49


ARTICLE 31. SPACECRAFT STORAGE...............................................50


ARTICLE 32. DISPUTES.........................................................51


ARTICLE 33. ASSIGNMENT.......................................................54


ARTICLE 34. LIMITATION OF LIABILITY..........................................56


ARTICLE 35. EFFECTIVE DATE OF CONTRACT.......................................57













                                      (ii)
<PAGE>


THIS CONTRACT is entered into on the 7th day of May, 1997, by and between
HUGHES COMMUNICATIONS GALAXY, INC. (herein called "Buyer" or "HCG"), a
California corporation having a place of business at 1500 Hughes Way, Long
Beach, California 90810 and HUGHES SPACE AND COMMUNICATIONS COMPANY (herein
called "Contractor," "Seller" or "HSC"), a Delaware corporation having a place
of business at 909 North Sepulveda Boulevard, El Segundo, California 90245.





                                  WITNESSETH:





         WHEREAS, HCG desires to purchase, and Contractor desires to provide
communications Spacecraft, Documentation, and Related Services as hereinafter
specified, and the Parties desire to define the terms and conditions under which
the same shall be furnished,

         NOW, THEREFORE, the Parties hereto agree as follows:




                                       1
<PAGE>



ARTICLE 1.                 EXHIBITS AND INCORPORATIONS


    The following documents are hereby incorporated and made a part of this
    Contract with the same force and effect as though set forth herein:


    1.1   Exhibit A - Galaxy XI Statement of Work - executed on April 30, 1997.


    1.2   Exhibit B - Galaxy XI Spacecraft Specification - executed on
          December 19, 1996.


    1.3   Exhibit C - Galaxy XI Spacecraft Integration Test Plan - executed on
          April 30, 1997.


    1.4   Exhibit D - Galaxy XI Product Assurance Plan - executed on
          April 30, 1997.


    1.5   Exhibit E - Certain Documentation - executed on April 30, 1997.


    1.6   Exhibit F - Certain Software and/or Documentation - executed on
          April 30, 1997.




                                       2
<PAGE>



ARTICLE 2.                 ORDER OF PRECEDENCE


         In the event of any conflict or inconsistency among the provisions of
         this document and the exhibits attached and incorporated into this
         Contract, such conflict or inconsistency shall be resolved by giving
         precedence to this document, and then to the attached and incorporated
         exhibits in the order listed in Article 1 herein, entitled "Exhibits
         and Incorporations."


                                       3
<PAGE>



ARTICLE 3.                 SPACECRAFT, DOCUMENTATION AND RELATED
                           SERVICES ("DELIVERABLES")


         HCG shall purchase from Contractor and Contractor shall sell and
furnish the following:


         3.1      Contractor shall provide the necessary personnel, material,
                  services and facilities to design, fabricate, test and deliver
                  as required and perform work in accordance with the
                  requirements of Exhibits A, B, C and D hereto, one (1) HS702
                  type Spacecraft for Galaxy Flight XI (hereinafter referred to
                  as "Spacecraft"), Documentation and Related Services (as
                  defined in Article 4).


         3.2      All materials and services specified in Exhibit A, entitled
                  "Galaxy XI Statement of Work," shall meet the requirements of
                  Exhibit B, entitled "Galaxy XI Spacecraft Specification."


         3.3      If Contractor has not made delivery [***] or if, prior to the
                  Launch Date, [***] Buyer at its election may:


                  [***]  


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.

                                       4
<PAGE>


                  Any such election shall be made by Buyer in writing. In either
                  case (a) or (b) above, [***]


3.4               [***] in accordance with: (i) current directives and
                  instructions in the Hughes Spacecraft Operators Handbook,
                  utilized at either Buyer's Operations Control Center (OCC) or
                  Contractor's Mission Control Center (MCC); and (ii) any other
                  Documentation utilized, including that Documentation which
                  takes into consideration the unique or special characteristics
                  of the contracted Spacecraft. [***] Contractor has
                  responsibility and liability for the Mission Control Center.
                  Buyer has responsibility and liability for the Operations
                  Control Center and its associated ground station(s).


         3.5      The Spacecraft, Documentation and Related Services described
                  above shall be delivered to HCG at the indicated locations on
                  the dates set forth in Article 4 entitled, "Deliverables and
                  Schedule" herein.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       5
<PAGE>



ARTICLE 4.                 DELIVERABLES AND SCHEDULE


         4.1      The following deliverables to be furnished under this Contract
                  shall be furnished at the designated location(s) on or before
                  the dates specified below:

<TABLE>
<CAPTION>

-----------------------------------------------------------------------------------------------------------
                                                                        Integration Delivery Location and
                                             Date of Delivery                   Performance Place
          Deliverable(s)                      or Performance
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
<S>                                 <C>                                <C>
                                                                       o Sea Launch, L.P. Facilities,
1.   One Spacecraft ("Spacecraft")  Forty-five (45) days prior to        Port of Long Beach, California
                                    Launch(1)                              (the
                                                                         "Integration Facility")
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------
                                                                       o Sea Launch, L.P. Facilities,
2.   Launch Support, Mission        In Accordance with Exhibit A         Port of Long Beach, California
     Operations and In-Orbit                                             (the "Integration Facility")
     Testing ("Related Services")                                        then vicinity of Kiritimati,
                                                                         "Christmas Islands", (the
                                                                         "Launch Site")
                                                                       o Filmore, California
                                                                       o Castle Rock, Colorado
                                                                       o El Segundo, California
-----------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------

3.   Documentation                  In Accordance with Exhibit A       1500 Hughes Way
     ("Documentation")                                                 Long Beach, California
-----------------------------------------------------------------------------------------------------------
</TABLE>

1   Launch Period is 01 June - 01 September 1998



         4.2      The Contractor will arrange transportation required for Items
                  1, 2 and 3 above. With respect to Deliverable Items 1 and 2,
                  liability is allocated as follows:


                      The Launch Vehicle Provider for this Galaxy XI Launch is
                      Sea Launch, L.P. The Galaxy XI Spacecraft will be mated
                      with the Sea Launch Zenit Vehicle (the "Vehicle") at the
                      Sea Launch, L.P. facilities, Port of Long Beach (the
                      "Integration Facility"). Under the Amended and Restated
                      Launch Services Agreement dated 17 January 1997 by and
                      between Hughes Space and Communications International,
                      Inc. and Hughes Communications Galaxy , Inc., which
                      allocates one (1) Sea Launch Limited Partnership Sea
                      Launch Service to Buyer, the mated Spacecraft, associated
                      equipment and HSC personnel necessary to assist in the
                      monitoring and control of the Spacecraft will be
                      transported by the Sea

                                       6
<PAGE>

                      Launch, L.P. Command Ship (the "Ship") from the
                      Integration Facility to the Launch Site in the vicinity of
                      the Christmas Islands (the "Launch Site"). HSC may also
                      utilize the Ship at Sea Launch L.P.'s expense for the
                      transportation of other related HSC personnel when
                      accommodations are available and such accommodations do
                      not interfere with other Sea Launch, L.P. commitments for
                      the Galaxy XI Launch.


                      4.2.1         If the Spacecraft fails to conform to the
                                    warranty provisions set forth in Article 15
                                    and: (i) the mated Spacecraft requires
                                    testing, maintenance, replacement and/or
                                    corrective actions at the Launch Site or
                                    (ii) return to the Integration Facility
                                    and/or the El Segundo Plantsite is necessary
                                    to accomplish such actions, HSC shall have
                                    responsibility and liability as follows:


                                    4.2.1.1      If Spacecraft warranty actions
                                                 can be performed at the Launch
                                                 Site, HSC shall be responsible
                                                 and liable for [***] to the 
                                                 warranty provisions of this 
                                                 Contract.
                                                 

                                    4.2.1.2      If return of the Spacecraft to
                                                 the Integration Facility and/or
                                                 Plantsite is necessary for such
                                                 warranty actions, HSC shall be
                                                 liable to Buyer in [***]


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       7
<PAGE>


                                                 [***]


         4.3      [***] shall be responsible for obtaining and maintaining:
                  (i) all U.S. Government export licenses to enable export of
                  the Spacecraft, related test and support equipment to the
                  Launch Site and (ii) all authorizations required for the
                  performance of this Contract.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       8
<PAGE>



ARTICLE 5.                 PRICE

         5.1      The total price (the "Contract Price") for Contractor to
                  provide the Spacecraft, Documentation and Related Services as
                  defined in Article 3 herein is [***]

         5.2      Buyer shall pay Contractor the Contract Price stated in
                  Paragraph 5.1 above in accordance with Article 6, Paragraphs
                  6.2 and 6.3 of this Contract.

         5.3      Notwithstanding the foregoing, in the event that any Exhibit F
                  Certain Software and/or Documentation is delayed beyond the
                  delivery date (the "Liquidated Damages Date") identified in
                  this Exhibit, Buyer unless it otherwise agrees, and so
                  notifies Contractor, is excused from its duty to remit to
                  Contractor [***] required by Paragraph 6.3 upon timely
                  delivery of all Exhibit F Software and/or Documentation.
                  Thereafter, the Contract Price shall mean [***] Buyer and
                  Contractor agree that this Liquidated Damages sum is a
                  reasonable pre-estimate of actual loss and free of any
                  penalty. Contractor's maximum liability under this Paragraph
                  is [***].


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       9
<PAGE>



ARTICLE 6.                 PAYMENTS


         6.1      Pursuant to the terms set forth in this Article 6, and subject
                  to HCG's rights, defenses and remedies as expressly stated in
                  this Agreement, HCG shall pay to Contractor the Contract Price
                  as stated in Article 5 herein for the Spacecraft,
                  Documentation, and Related Services under this Contract.


         6.2      Invoices shall be prepared and submitted by Contractor in a
                  form reasonably acceptable to Buyer. Payments to Contractor
                  shall be made in accordance with the payment plan specified in
                  subparagraph 6.3 below:



                                       10
<PAGE>
                                     [***]

[***] Filed separately with the Commission pursuant to a request for
confidential treatment.

                                       11
<PAGE>


         6.4      Payment Schedule Revision: The payment plan established in
                  Paragraph 6.3 above is based upon a launch period between 01
                  June - 01 September 1998. If the Launch Period established in
                  accordance with Article 7, Paragraph 7.1.2 is later than
                  September 1998, the payment plan in Paragraph 6.3 of this
                  Article shall be revised by mutual agreement of the Parties to
                  reflect the established Launch Period.


         6.5      HSC shall not be obligated to deliver the Spacecraft to the
                  Launch Site if there are any outstanding Delinquent Payments
                  owed by HCG to HSC under this contract one month prior to
                  shipment of the Spacecraft from the HSC facility. "Delinquent
                  Payments" are defined as those payments not received by HSC
                  within thirty (30) days of the dates due as defined in
                  Paragraph 6.5.2 below. Once HCG has paid HSC for any
                  "Delinquent Payments" and any interest accrued in accordance
                  with Paragraph 6.7 below, HSC shall use its reasonable best
                  efforts to ship the Spacecraft to the Launch Site so as to
                  enable launch on the scheduled Launch Date and in any event to
                  make shipment as soon as practicable and no later than sixteen
                  (16) weeks after payment by HCG of such Delinquent Payments.
                  HCG will be responsible for and will pay to HSC any reasonable
                  costs and [***] profit on such costs that HSC may incur as a
                  result of a delay in delivery due to HCG's Delinquent
                  Payments. Notwithstanding the foregoing, this Section 6.5
                  shall not relieve Contractor of its obligation to deliver the
                  Spacecraft, and no "Delinquent Payment" shall be deemed to
                  have occurred, due to any non-payment by HCG on account of an
                  alleged breach by Contractor or other dispute as to such
                  payment. In such event, HCG shall, within thirty (30) days of
                  the date such payment is due, pay the full amount of such
                  payment into an interest-bearing escrow account to be
                  established at Bank of America, Concord, California. Upon
                  settlement of the dispute as to such payment and alleged
                  breach in accordance with Article 32, the Party entitled to
                  the amount in escrow shall receive such amount together with
                  all accrued interest thereon and the other Party shall pay all
                  costs and fees associated with the escrow of such amount.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.

                                       12
<PAGE>

         6.6      Invoice


                  6.6.1    Invoices submitted to HCG for payment shall contain a
                           cross-reference to the Contract number and the date
                           specified in the Paragraph 6.3 Payment Plan.
                           Contractor shall submit one (1) original invoice in
                           each instance to:


                           Hughes Communications Galaxy, Inc.
                           P.O. Box 9712
                           Bldg. A01/4B462
                           Los Angeles, CA 90810-9928
                           Fax: (310) 525-5140
                           Attention: Accounts Payable - Tony Walden


                  6.6.2    Invoice amounts, as specified in Paragraph 6.3,
                           provide for billings to be submitted by the 15th day
                           of each month and shall be paid by HCG within thirty
                           (30) days upon receipt of the invoice by HCG.


         6.7      Late Payments


                  In the event of a failure by the Buyer or the Contractor to
                  make a payment required pursuant to this Contract, the
                  delinquent Party shall pay interest at the rate of [***] on
                  the overdue amount for the number of days that the payment is
                  overdue, commencing on the date payment is due and terminating
                  on the date the overdue amount is paid in full.
                  Notwithstanding the foregoing, this Section 6.7 shall not
                  apply to any payment made into escrow in accordance with
                  Section 28.4.




[***] Filed separately with the Commission pursuant to a request for
confidential treatment.



                                       13
<PAGE>



ARTICLE 7.                 SPACECRAFT LAUNCH DATE


         7.1      This Contract is written on the basis that one (1) Spacecraft
                  supplied hereunder will be Launched on a Sea Launch (Zenit)
                  vehicle within the Launch Period set forth below and within
                  which a slot, date and window shall be established in
                  accordance with Paragraphs 7.1.1, 7.1.2, and 7.1.3 below:



                  Spacecraft     Launch Vehicle          Launch Period
                  ----------     --------------          -------------
                  Galaxy XI        Sea Launch      01 June-01 September 1998
                                    (Zenit)



                  7.1.1    Launch Slot Definition. A thirty (30) day period of
                           time within a Launch Period during which the Launch
                           will occur. The Launch Slot within the Launch Period
                           shall be established by the Parties not later than
                           one (1) year prior to the first day of the applicable
                           Launch Period and once established, shall become an
                           express term of this Contract.


                  7.1.2    Launch Date Definition. The calendar date within the
                           Launch Slot during which a Launch will occur. The
                           Launch Date within the Launch Slot shall be
                           established by the Parties no later than six (6)
                           months prior to the first day of the applicable
                           Launch Slot and once established, shall become an
                           express term of this Contract.


                  7.1.3    Launch Window Definition. A daily period of time
                           within the Launch Date during which the Launch can
                           occur and meet mission requirements. The Launch
                           Window shall be established by the Parties no later
                           than forty-five (45) days prior to the Launch Date
                           and once established, shall become an express term of
                           this Contract.



                                       14
<PAGE>


         7.2      The Contract Price set forth in Paragraph 5.1 includes
                  Contractor furnished launch support services, post launch
                  support services, in-orbit test support services, and post
                  title transfer monitoring and command of the Spacecraft if
                  Buyer invokes the remedial provisions of Article 3, Paragraph
                  3.3. The Contract Price set forth in Paragraph 5.1 assumes the
                  launch of the Spacecraft on a Sea Launch vehicle within
                  forty-five (45) calendar days after delivery of the Spacecraft
                  to the Port of Long Beach, California (Integration Facility).


         7.3      No less than sixteen (16) weeks prior to the launch date,
                  Buyer shall order Contractor by notice in writing to commence
                  launch campaign preparations including, but not limited to,
                  reserving transportation of the Spacecraft and related
                  equipment for shipment to the Sea Launch L.P. Integration
                  Facility.


         7.4      If the Spacecraft launch date defined in Paragraph 7.1 is
                  postponed for any reason other than the sole fault of
                  Contractor, excluding any postponement due to an Excusable
                  Delay as defined in Article 12, the Parties shall negotiate in
                  good faith to determine an equitable adjustment to the price
                  and affected terms of this Contract, if any. If the cost of
                  supplies or materials made obsolete or excess as a result of a
                  such postponement is included in the equitable adjustment, HCG
                  shall have the right to prescribe the manner of disposition of
                  such supplies or materials. Costs included in the equitable
                  adjustment shall include but not be limited to: support
                  personnel standby; extra travel expenses; transport
                  termination or rescheduling fees; a profit rate of [***].


         7.5      Notwithstanding the foregoing, if the Spacecraft Launch Date
                  defined in Paragraph 7.1 is postponed by either Party due to
                  an Excusable Delay, as defined in Paragraph 12.1 herein, the
                  terms of Article 12 herein shall govern such postponement.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       15
<PAGE>



ARTICLE 8.                 BUYER-FURNISHED ITEMS


         8.1      The following facilities, equipment, and services shall be
                  furnished by HCG at no cost to Contractor, in a timely manner,
                  so as to enable Contractor to perform the work herein in
                  accordance with the Spacecraft Launch Dates as described in
                  Article 7 of this Contract.

                  1)       Facilities (buildings, power, phones and data lines)
                           and enumerated services: (i) transportation of the
                           Spacecraft, Contractor related test equipment and
                           personnel within the Launch Site and between the
                           Integration Facility (Port of Long Beach) and the
                           Launch Site (vicinity of Christmas Islands) unless
                           Article 4, Paragraph 4.2.1 conditions apply (ii)
                           storage of the Spacecraft and related test equipment
                           for all force majeure events and/or launch vehicle
                           delays (iii) fueling (iv) photographs and (v)
                           interface hardware at the Launch Site.

                  2)       Reservation and procurement of the launch services
                           and associated services.

                  Contractor will provide preliminary requirements of Item 1
                  above to Buyer no later than 6 months after EDC to assist
                  Buyer's compliance with this Article. Prior to Buyer's
                  execution of a Launch Services Contract with the Launch
                  Services provider, Contractor will be allowed to review the
                  list of basic and optional service which Buyer shall procure.

                  In the event that the Buyer-Furnished Items set forth above
                  are not suitable for the intended purpose or are not provided
                  in a timely manner, excluding any excusable delay as defined
                  in Article 12 herein, then HCG shall be liable to Contractor
                  for all applicable costs which shall include but not be
                  limited to: procurement or rental of suitable substitutes for
                  such Buyer Furnished Items at no higher than market prices;
                  with title and possession of all such procured items reverting
                  to Buyer after Contractor's use under this Agreement; support
                  personnel standby; extra travel expenses; transport
                  termination or rescheduling fees; and
                  installation/de-installation of communication links to the
                  Launch Site and a profit rate of [***].


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       16
<PAGE>

         8.2      Contractor shall maintain a system to ensure the adequate
                  control and protection of HCG's Property. For the purposes of
                  this Article, HCG Property shall be defined as any item which
                  HCG provides to the Contractor or directs Contractor to
                  maintain in storage or an inventory account under this
                  Contract. Upon receipt of notification from HCG, the
                  Contractor shall complete and return within fifteen (15)
                  working days a Property System Certification describing the
                  system that will be used to control HCG's Property.
                  Additionally, HCG's representative may, at its option and at
                  no additional cost to HCG, conduct surveillance at a
                  reasonable time of the Contractor's Property Control System as
                  HCG deems necessary to assure compliance with the terms and
                  conditions of this Article.

         8.3      Contractor shall, commencing with its receipt and during its
                  custody or the use of any HCG's Property, accomplish the
                  following:

                  A.       Establish and maintain inventory records and make
                           such records available for review upon HCG's request;

                  B.       Provide the necessary precautions to guard against
                           damage from handling and deterioration during
                           storage;

                  C.       Perform periodic inspection to assure adequacy of
                           storage conditions; and

                  D.       Ensure that HCG's Property is used only for
                           performing this Contract, unless otherwise provided
                           in this Article or approved by the cognizant
                           contracting officer.

         8.4      Contractor shall not modify, add-on, or replace any HCG
                  Property without HCG's prior written authorization. Contractor
                  shall immediately report to HCG's contract representative the
                  loss of any HCG Property or any such property found damaged,
                  malfunctioning, or otherwise unsuitable for use. The
                  Contractor shall determine and report the probable cause and
                  necessity for withholding such property from use.

         8.5      Upon termination or completion of this Contract, and upon
                  request by HCG, the Contractor shall perform a physical
                  inventory, adequate for accountability and disposition
                  purposes, of all HCG's Property applicable


                                       17
<PAGE>

                  to such terminated or completed agreement and shall cause its
                  subcontractors and suppliers at every tier to do likewise.


                                       18
<PAGE>



ARTICLE 9.                 INSPECTION AND ACCEPTANCE


         9.1      Inspection of all Hardware, documentation and Contractor's
                  services provided hereunder shall take place in accordance
                  with the terms of Article 10, entitled "Access to Work in
                  Process," herein.

         9.2      Preliminary Acceptance of the Spacecraft shall occur when all
                  in-plant tests required to be performed by Contractor for the
                  Hardware have been completed and the Contractor has
                  demonstrated at the pre-ship review that the Hardware meets
                  the requirements of this Contract, at which time HCG shall
                  accept the Hardware on a Preliminary basis in writing within
                  five (5) business days subject to completion of Launch
                  Integration Facility and/or Launch Site tests specified in
                  Exhibit C, Galaxy XI Spacecraft Integration Test Plan. If the
                  Hardware is unacceptable, Contractor shall promptly and at its
                  expense, rectify the unsatisfactory Hardware and resubmit the
                  Hardware for acceptance by HCG as provided above. In either
                  case, the Hardware shall be deemed accepted upon failure of
                  HCG to notify Contractor in writing within the above five (5)
                  business days that it is accepted, rejected or that in HCG's
                  opinion further corrective action must be taken by the
                  Contractor.

         9.3      Final Acceptance of the Spacecraft shall occur upon the
                  earliest of i) the completion of In-orbit Testing in
                  accordance with Exhibit A, ii) fifty (50) days after
                  Intentional Ignition (as defined in Article 15, Paragraph 15.2
                  of this Contract) or iii) immediately before a Partial
                  Failure, Total Failure or Total Constructive Failure (as each
                  such term is defined in the applicable Hughes Communications
                  Galaxy Launch Insurance Contract or successor contract), which
                  occurs at or after Intentional Ignition. HCG shall have access
                  to Launch Integration Facility and/or Launch Site test results
                  during the launch campaign in accordance with the provisions
                  of Article 10, Paragraph 10.1 "Access to Work in Process."

         9.4      With respect to deliverable Hardware which HCG orders
                  Contractor to store, the Hardware shall be stored at a
                  location to be negotiated and Final Acceptance shall occur at
                  the end of the [***] warranty period as set forth in
                  Article 15 herein, entitled "Spacecraft Warranty," or such
                  other event mutually agreed upon between the Parties.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       19
<PAGE>



ARTICLE 10.                ACCESS TO WORK IN PROCESS


         10.1       Contractor shall afford HCG access to work in progress being
                    performed at Contractor's plants and at the Launch
                    Integration Facility and/or Launch Site pursuant to this
                    Contract, including technical data, documentation, and
                    hardware, at reasonable times during the period of Contract
                    performance, provided such access does not unreasonably
                    interfere with such work or require the disclosure of
                    Contractor's proprietary information to third Parties and
                    subject to (i) HSC's Security Procedures and (ii) U.S. or
                    Foreign Government Regulations.


         10.2       To the extent that the Contractor's major subcontracts
                    permit, Contractor shall afford HCG access to work being
                    performed pursuant to this Contract in subcontractor's
                    plants in the company of Contractor's representatives.


                    Contractor shall exert reasonable effort in subcontracting
                    to obtain permission for HCG access to those major
                    subcontractors' plants. Major subcontracts are defined as
                    those subcontracts in excess of [***].


           10.3     HCG shall have the right to witness on a non-interference
                    basis all system and subsystem tests scheduled by Contractor
                    in connection with the performance of work under this
                    Contract. If the system or subsystem tests are performed by
                    a subcontractor of HSC, HSC shall take all reasonable steps
                    to secure HCG's access to the subcontractor's facility or
                    facilities. HCG's right to witness testing shall be on a
                    non-interference basis with the subcontractor's activities
                    and subject to (i) any subcontractor security procedures and
                    (ii) U.S. or Foreign Government Regulations.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       20
<PAGE>



ARTICLE 11.                TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY


         11.1       Subject to provisions of Article 3 entitled "Spacecraft,
                    Documentation and Related Services," Article 5 entitled
                    "Price" and Article 12 entitled "Excusable Delays," Buyer
                    may issue a written notice of default to Contractor if: (i)
                    Contractor fails [***] as confirmed in writing by the
                    Contractor's and Buyer's Senior Executives and such failure
                    may result in a delay in delivery of more than [***]; or
                    (ii) the delivery of the Spacecraft or Contractor's
                    performance of any material obligation under the Contract
                    has been delayed due to the primary fault of the Contractor
                    for more than [***]. Subsequent to the issuance of said
                    notice, the Buyer may terminate this Contract and thereafter
                    elect remedies as identified in Paragraph 11.2 below.


         11.2       If Buyer terminates this Contract, in whole or in part, as
                    provided in Paragraph 11.1 herein, Buyer, at its sole
                    option, shall either: (i) take title to all deliverable
                    hardware, all hardware in process which ultimately would
                    have been deliverable by Contractor and all drawings and
                    data produced by Contractor, the cost of which has been
                    charged or becomes chargeable to any work terminated plus
                    all reasonable reprocurement costs up to a maximum amount
                    of: (a) [***] in the event of a termination of this Contract
                    solely with respect to Documentation and/or Related Services
                    or (b) [***] with respect to a termination of the entire
                    Contract or (ii) receive a refund of all payments submitted
                    to Contractor by the Buyer for performance of this Contract
                    for the portion terminated by Buyer, and Contractor shall
                    retain title and possession to all terminated Hardware which
                    ultimately would have been deliverable by Contractor.
                    Contractor shall continue the performance of this Contract
                    to the extent not terminated under the provisions of this
                    Article.


         11.3       Notwithstanding the other provisions of this Article, there
                    will be no termination for default after Intentional
                    Ignition of the Launch Vehicle.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       21
<PAGE>

         11.4       If, after termination of this Contract under the provisions
                    of this Article, it is determined for any reason that
                    Contractor was not in default under the provisions of this
                    Article, or that the default was excusable under the
                    provision of Article 12 entitled "Excusable Delays," then
                    the Contractor shall be entitled to be paid for its actual
                    reasonable costs plus [***] profit, less amounts previously
                    paid by the Buyer and upon making payment in full, the Buyer
                    shall take title to all tangible work in process inventories
                    generated under the Contract. For purposes of this Paragraph
                    11.4, Contractor's "actual reasonable costs" shall mean all
                    costs expended by Contractor for all work done under this
                    Contract up to the date of termination, settlements with
                    subcontractors for work performed prior to termination, and
                    Contractor's reasonable costs related to termination which
                    would otherwise not have been incurred.


         11.5       Except as otherwise provided in the Contract, the rights and
                    remedies of the Parties provided in this Article shall be in
                    lieu of any other rights and remedies provided by law or in
                    equity in the event Contractor or Buyer fails to meet its
                    obligations under this Contract. Buyer shall have no other
                    rights or remedies for late delivery of the Spacecraft,
                    Documentation and Related Services under this Contract
                    except for those rights and remedies expressly provided for
                    in this Contract.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       22
<PAGE>



ARTICLE 12.                EXCUSABLE DELAYS


         12.1       If either Party or a subcontractor of either Party is
                    delayed by act of God, or of the public enemy, fire, flood,
                    earthquake, epidemic, quarantine restriction, strike,
                    walkout, freight embargo, or any other event which is beyond
                    their control or does not arise from the acts or omissions
                    of either Party or its respective subcontractors, said delay
                    shall constitute an excusable delay ("Force Majeure
                    Events"). In the event of an excusable delay, there shall be
                    an equitable adjustment to the time of delivery and/or
                    performance stated in this Contract. The affected Party
                    shall give notice in writing to the other Party within 10
                    working days that an excusable delay condition exists after
                    learning of such delay. Such notification shall include the
                    cause of the excusable delay, the expected length of the
                    excusable delay, and alternate plans to mitigate the effect
                    of the excusable delay.


         12.2       If the affected Party, as defined in Paragraph 12.1 above,
                    requests or experiences, on a cumulative basis, excusable
                    delay(s) greater than [***], the Parties shall
                    enter into good faith negotiations to develop a mutual
                    course of action and/or an equitable adjustment to the
                    affected terms of this Agreement.


          12.3      Notwithstanding the foregoing, if the Launch Date defined in
                    Paragraph 7.1 herein is delayed due to a Force Majeure event
                    affecting either Party or a subcontractor thereof at any
                    point in time after the shipment of the Spacecraft to the
                    Launch Site has occurred, HCG shall reimburse Contractor for
                    all reasonable expenses incurred as a result, including
                    without limitation expenses for: support personnel standby;
                    extra travel expenses; transport termination or rescheduling
                    fees; and installation/de-installation of communication
                    links to the Launch Site.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       23
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ARTICLE 13.                AMENDMENTS


         The terms and provisions of this Contract shall not be amended or
         modified without specific written provision to that effect, signed by
         the Authorized Representative(s) of both Parties. These Authorized
         Representative(s) are identified in Article 26, "Notices and Authorized
         Representative(s)." No oral statement of any person shall in any manner
         or degree modify or otherwise affect the terms and provisions of this
         Contract.




                                       24
<PAGE>



ARTICLE 14.                TITLE AND RISK OF LOSS


         14.1     Title and risk of loss or damage in respect of all items to be
                  delivered under this Contract shall pass from Contractor to
                  HCG as follows:


                  14.1.1            Risk of loss of the Spacecraft and title
                                    shall pass from Contractor to HCG upon the
                                    earliest of: (i) the completion of In-orbit
                                    Testing in accordance with Exhibit A, (ii)
                                    fifty (50) days after Intentional Ignition
                                    (as defined in Article 15, Paragraph 15.2 of
                                    this contract) or (iii) immediately before a
                                    Partial Failure, Total Failure or Total
                                    Constructive Failure (as each such term is
                                    defined in the applicable Hughes
                                    Communications Galaxy Launch Insurance
                                    Contract or successor contract) which occurs
                                    at or after Intentional Ignition.


                  14.1.2            In respect to the Spacecraft which HCG
                                    directs Contractor to store, title and risk
                                    of loss shall remain with the Contractor
                                    until Final Acceptance as specified in
                                    Article 9.4 herein.


                  14.1.3            Notwithstanding Paragraph 14.1.2 above, upon
                                    removal of the Spacecraft from storage, the
                                    Contractor shall not assume risk of loss
                                    relative to a Battery which HCG directs
                                    Contractor to replace after the five-year
                                    storage period which disqualifies the
                                    battery for a 15-year mission. In that
                                    event, Article 29 herein entitled "Effects
                                    of Storage on Batteries," shall apply.


                  14.1.4            "Risk of Loss" for purposes of this Article
                                    14 is limited to the responsibility and
                                    liability for a Partial Failure, Total
                                    Failure or Total Constructive Failure (as
                                    each such term is as defined in the
                                    applicable Hughes Communications Galaxy
                                    Launch Insurance Contract or successor
                                    contract). Responsibility and liability for
                                    the Spacecraft prior to intentional ignition
                                    is with the Contractor.


                                       25
<PAGE>

         14.2     In the event of damage to or destruction of Hardware when
                  Contractor shall have risk of loss, Contractor shall repair or
                  replace (at Contractor's option) said Hardware. The Buyer
                  shall participate in the decision to repair or replace said
                  Hardware and the provisions of Article 15 shall apply.


         14.3     Insurance Provided By Contractor. The Contractor shall, at its
                  own expense, provide and maintain the following insurance:


                  14.3.1     "All Risk" Insurance


                             (i) The Policy for "All Risks" insurance shall
                             insure the Contractor and name Buyer as additional
                             insured and Loss Payee as their interest may
                             appear.


                             (ii) The insurance shall cover the Spacecraft while
                             in or about the Contractor's and subcontractors'
                             plants, while at other premises which may be used
                             or operated by the Contractor for construction or
                             storage purposes, while in transit, or while at the
                             Designated Launch Site until Intentional Ignition,
                             or while Spacecraft is stored by the Contractor at
                             HCG's direction until Final Acceptance as specified
                             in Article 9.4.


                             (iii) Such insurance shall be sufficient to cover
                             the full replacement value or selling price of the
                             Spacecraft and may be issued with deductibles, for
                             which losses shall be borne by the Contractor.


                             (iv) This "All Risk" insurance shall be in force
                             from the time of the Effective Date of this
                             Contract and shall continue in effect until
                             Contractor's liabilities have expired at
                             intentional ignition.


                                       26
<PAGE>

                  14.3.2     Third Party Liability Insurance


                             (i) The Policy(s) for Third Party Liability
                             insurance shall be written on forms the Buyer may
                             review and shall include Buyer as additional
                             insured.


                             (ii) This Third Party Liability insurance shall be
                             in force from the time of the Effective Date of
                             this Contract and shall continue in effect until
                             Contractor's liabilities have expired at
                             intentional ignition.


                             (iii) The Policy(s) may be issued with deductibles,
                             for which losses shall be borne by the Contractor.


         14.4     General Insurance Requirements


                             (i) The Contractor shall, upon request, provide to
                             the Buyer certificates of the Insurance Policy(s)
                             issued by an agent of the Contractor's Insurer(s)
                             for coverage which the Contractor is required to
                             provide pursuant to the provisions of these
                             Articles.


                             (ii) All Policies of insurance to be provided and
                             maintained pursuant to these Articles shall require
                             the insurer(s) or its authorized agent(s) to give
                             each insured not less than thirty (30) days prior
                             written notice in the event of cancellation or any
                             proposed material change in such policies, except
                             for ten (10) days prior written notice in the event
                             of cancellation due to non-payment of premium.


                             (iii) The Contractor may also acquire and maintain,
                             at its own expense, other insurance for amounts and
                             perils, and upon such terms, conditions and
                             deductibles as it may deem advisable or necessary
                             to cover any loss or damage to persons or property
                             that may occur as a result of the performance of
                             this Contract.



                                       27
<PAGE>

ARTICLE 15.                SPACECRAFT WARRANTY


         15.1     Contractor warrants that the Spacecraft, upon successful
                  completion of Spacecraft in plant Tests pursuant to Article 9
                  herein, shall be free from any defects in material or
                  workmanship and shall conform to the applicable specifications
                  and drawings, as evidenced by the acceptance criteria in
                  Exhibits A-D herein.


         15.2     This warranty shall start from the date of Preliminary
                  Acceptance of the Spacecraft as stated in Article 9 herein,
                  entitled "Inspection and Acceptance," and continue for a
                  period of [***], or until the Intentional Ignition (defined
                  herein as the "Intentional Ignition of any rocket motor on the
                  first stage of the launch vehicle") of the applicable launch
                  vehicle, whichever is earlier. [***] ("Warranty Time Period").
                  Contractor shall not be liable in Contract or in Tort for any
                  incidental, special, contingent, or consequential damages.


         15.3     HCG shall have the right at any time during the Warranty Time
                  Period to reject any goods not conforming to this warranty and
                  require that Contractor, at its expense, correct or replace
                  (at Contractor's option) such goods with conforming goods. If
                  any time during the Warranty Time Period Contractor fails to
                  correct or replace such defective goods and fails to initiate
                  reasonable efforts to correct or replace such defective goods
                  within a reasonable period after written notification and
                  authorization from HCG, HCG may then, by contract or
                  otherwise, correct or replace such defective goods and
                  equitably adjust the price.


         15.4     Except as otherwise expressly agreed upon in this Contract,
                  Contractor shall have no liability, or responsibility in
                  Contract or in Tort with respect to the Spacecraft after
                  Intentional Ignition (as defined in Paragraph 15.2) of the
                  launch vehicle.

[***] Filed separately with the Commission pursuant to a request for
confidential treatment.



                                       28
<PAGE>

         15.5     THE ABOVE WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
                  OR IMPLIED, INCLUDING FITNESS FOR PARTICULAR PURPOSE OR
                  MERCHANTABILITY AND THE REMEDY PROVIDED HEREIN IS THE SOLE
                  REMEDY FOR FAILURE BY CONTRACTOR TO FURNISH THE SPACECRAFT
                  THAT IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP
                  AS SET FORTH IN PARAGRAPH 15.1 ABOVE. ALL OTHER WARRANTIES OR
                  CONDITIONS IMPLIED BY ANY OTHER STATUTORY ENACTMENT OR RULE OF
                  LAW WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED.
                  CONTRACTOR AND ITS SUBCONTRACTORS SHALL HAVE NO LIABILITY IN
                  CONTRACT OR IN TORT (INCLUDING NEGLIGENCE) OR IN ANY OTHER
                  MANNER WHATSOEVER FOR THE SPACECRAFT AFTER INTENTIONAL
                  IGNITION OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT.


         15.6     Any limitations on warranties, liability or requests for
                  indemnification from liability for the malfunction of
                  delivered items which are imposed upon the Contractor by its
                  various equipment suppliers shall be passed on directly to
                  Buyer provided, however, nothing therein shall decrease or
                  invalidate the rights of the Buyer during, or the length of,
                  the Warranty Time Period as stated in this Article.




                                       29
<PAGE>



ARTICLE 16.                INDEMNIFICATION


         16.1       Each Party shall indemnify and hold the other and/or all its
                    officers, agents, servants, subsidiaries, affiliates, parent
                    companies and employees, or any of them, harmless from any
                    liability or expense in connection herewith on account of
                    damage to property (excepting other Spacecraft in flight)
                    and injuries, including death, to all persons including but
                    not limited to employees of the Parties, and their
                    subcontractors, and of all other persons performing any part
                    of the work hereunder, arising from any occurrence caused by
                    an negligent act or omission of the indemnifying Party or
                    its subcontractors, or any of them in connection with the
                    work to be performed by such Party under this Contract. The
                    indemnifying Party shall have the right, but not the
                    obligation, to participate in any legal or other proceedings
                    concerning claims for which it is indemnifying under this
                    Article 16 and to direct the defense of such claims.
                    However, with respect to such legal or other proceedings,
                    the indemnifying Party shall pay all expenses (including
                    attorneys fees incurred by the indemnified Party in
                    connection with such legal or other proceedings) and satisfy
                    all judgments, costs or other awards which may be incurred
                    by or rendered against the indemnified Party. The
                    indemnifying Party shall not settle any such claim, legal or
                    other proceeding without first giving thirty (30) days prior
                    written notice of the Terms and Conditions of such
                    settlement and obtaining the consent of the indemnified
                    Party, which consent shall not be unreasonably withheld or
                    delayed.


         16.2       Notwithstanding the foregoing, neither the Contractor nor
                    its subcontractors shall have any liability in Contract or
                    in Tort, for damages to or caused by the Spacecraft after
                    Intentional Ignition (as defined in Paragraph 15.2), and
                    Buyer shall obtain waivers of subrogation rights from
                    Buyer's insurers against Contractor, and affiliates and
                    subcontractors of Contractor.




                                       30
<PAGE>



ARTICLE 17.                SPACECRAFT NOT LAUNCHED WITHIN SIX
                           MONTHS AFTER ACCEPTANCE


         17.1       If the Spacecraft is not launched within six (6) months
                    after its Preliminary Acceptance per Article 9, entitled
                    "Inspection and Acceptance," and is subsequently ordered to
                    be launched within [***] following its Preliminary
                    Acceptance, it is agreed that such Spacecraft shall be
                    returned at Contractor's option at Contractor's expense, to
                    Contractor's facility for inspection and refurbishment. Any
                    inspection and refurbishment undertaken by Contractor to
                    meet the requirements of Article 15 entitled, "Spacecraft
                    Warranty," shall be at Contractor's expense, including
                    Spacecraft transit insurance.


         17.2       If the Spacecraft is not launched within six (6) months
                    after its Preliminary Acceptance and is subsequently ordered
                    to be launched later than [***] following its Preliminary
                    Acceptance, it is agreed that such Spacecraft shall be
                    returned, at HCG's expense, to Contractor's facility for
                    inspection and refurbishment. An equitable adjustment to
                    Contract price for such inspection and refurbishment, to
                    include a [***] profit component shall be negotiated by the
                    Parties unless the fact that the launch is scheduled for
                    later than [***] is due to Contractor's negligent acts or
                    omissions.


         17.3       If the Spacecraft is returned to Contractor's facility for
                    inspection and refurbishment per the terms of Paragraph 17.2
                    above, all charges to return such Spacecraft to the Launch
                    Site shall be borne by HCG.


         17.4       If the Spacecraft has not been launched within [***] after
                    its preliminary Acceptance, neither Party shall be further
                    obligated to the other with respect to such Spacecraft.
                    Disposition of such Spacecraft shall be at the option of HCG
                    with costs of such disposition to be borne by HCG.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       31
<PAGE>



ARTICLE 18.                PATENT/COPYRIGHT INDEMNITY


         18.1       Contractor shall indemnify and hold HCG harmless against any
                    liability or expense as a result of claims, actions, or
                    proceedings against HCG alleging the infringement of any
                    trademarks, United States Copyright or mask work, United
                    States Letters Patent, any other intellectual property
                    rights, by any article fabricated by Contractor and
                    delivered to HCG pursuant to this Contract as set forth
                    below.


         18.2       Contractor agrees to defend at its own expense any claim,
                    action, proceeding or request for royalty payments or any
                    claim for equitable relief or damages against HCG, its
                    officers, employees, agents, or subsidiaries based on an
                    allegation that the manufacture of any item under this
                    Contract or the use, lease, or sale thereof infringes any
                    United States Letters Patent trademark, United States
                    Copyright or mask work or any other intellectual property
                    right, and to pay any royalties and other costs related to
                    the settlement of such claim, action, proceeding or request
                    and to pay the costs and damages, including reasonable
                    attorney's fees finally awarded as the result of any claim,
                    action or proceeding based on such request, provided that
                    Contractor is given prompt written notice of such request or
                    claim by HCG and given authority and such assistance and
                    information as is available to HCG for resisting such
                    request or for the defense of such claim, action or
                    proceeding. Any such assistance or information which is
                    furnished by HCG at the written request of Contractor is to
                    be at Contractor's expense.


         18.3       In the event that, as a result of any such claim, action,
                    proceeding or request: a) prior to delivery, the manufacture
                    of any item is enjoined; or b) after delivery, the use,
                    lease or sale thereof is enjoined, Contractor agrees to
                    utilize its best effort to either: (1) negotiate a license
                    or other agreement with plaintiff so that such item is no
                    longer infringing; or (2) modify such item suitably or
                    substitute a suitable item therefore, which modified or
                    substituted item is not subject to such injunction, and to
                    extend the provisions of this Article thereto. In the event
                    that neither of the foregoing alternatives is suitably
                    accomplished by Contractor, Contractor shall be



                                       32
<PAGE>

                    liable to HCG for HCG's additional costs and damages arising
                    as a result of such injunction; provided however, that in no
                    event shall Contractor's entire liability under this Article
                    exceed [***]. The existence of one or more claims, actions,
                    proceedings or lawsuits shall not extend such amount.


         18.4       The foregoing indemnity shall not apply to any infringement
                    resulting from a modification or addition, by other than
                    Contractor, to an item after delivery.


         18.5       If the infringement results from the compliance by
                    Contractor with the Buyer's directed designs, specifications
                    or instructions, the Buyer will defend or settle, at its
                    expense, any such suit against the Contractor.


         18.6       The foregoing constitutes the Parties' entire obligation
                    with respect to claims for infringement.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


                                       33
<PAGE>



ARTICLE 19.                RIGHTS IN INVENTIONS


         19.1       As used in this Contract, "Program Invention" shall mean any
                    invention, discovery or improvement conceived of and first
                    reduced to practice in the performance of Work under this
                    Contract. Information relating to Inventions shall be
                    treated as proprietary information in accordance with the
                    provisions of this Contract. Rights to inventions conceived
                    solely by Contractor or its employees shall vest completely
                    with Contractor.


         19.2       Contractor shall be the owner of all Program Inventions
                    invented solely by Contractor. Contractor grants Buyer a
                    royalty-free, nonexclusive license in Program Inventions to
                    use Program Inventions solely for the purposes of
                    maintenance and operation of the Spacecraft and delivered
                    Equipment. Contractor agrees that it will not revoke such
                    license if Buyer is in compliance with the terms of the
                    license.


                    19.3.1       In the case of joint Inventions, that is,
                                 inventions conceived jointly by one or more
                                 employees of both Parties hereto, each Party
                                 shall have an equal, undivided one-half
                                 interest in and to such joint Inventions, as
                                 well as in and to patent applications and
                                 patents thereon in all countries.

                    19.3.2       In the case of such joint Inventions,
                                 Contractor shall have the first right of
                                 election to file patent applications in any
                                 country, and Buyer shall have a second right of
                                 election. Each Party in turn shall make its
                                 election at the earliest practicable time, and
                                 shall notify the other Party of its decision.

                    19.3.3       The expenses for preparing, filing and securing
                                 each joint Invention patent application, and
                                 for issuance of the respective patent shall be
                                 borne by the Party which prepares and files the
                                 application. The other Party shall furnish the
                                 filing Party with all documents or other
                                 assistance that may be necessary for the filing
                                 and prosecution of each application. Where such
                                 joint Invention application for patent is filed
                                 by either Party in a


                                       34
<PAGE>

                                 country which requires the payment of taxes,
                                 annuities, maintenance fees or other charges on
                                 a pending application or on an issued patent,
                                 the Party which files the application shall,
                                 prior to filing, request the other Party to
                                 indicate whether it will agree to pay one-half
                                 of such taxes, annuities, maintenance fees or
                                 other charges. If within sixty (60) days of
                                 receiving such request, the non-filing Party
                                 fails to assume in writing the obligation to
                                 pay its proportionate share of such taxes,
                                 annuities, maintenance fees or other charges,
                                 or if either Party subsequently fails to
                                 continue such payments within sixty (60) days
                                 of demand, it shall forthwith relinquish to the
                                 other Party, providing that said other Party
                                 continues such payments, its interest in such
                                 application and patent and the Invention
                                 disclosed therein, subject, however, to
                                 retention of a paid-up, non-exclusive,
                                 non-assignable license in favor of the
                                 relinquishing Party, its parent, and any
                                 subsidiary thereof to make, use, lease and sell
                                 apparatus and/or methods under said application
                                 and patent.

         19.4       Each owner of a jointly-owned patent application or patent
                    resulting therefrom shall, provided that it shall have
                    fulfilled its obligation, if any, to pay its share of taxes,
                    annuities, maintenance fees and other charges on such
                    pending application or patent, have the right to grant
                    non-exclusive licenses thereunder and to retain any
                    consideration that it may receive therefor without
                    obligation to account therefor to the other Party. In
                    connection therewith, each of the Parties hereby consents to
                    the granting of such non-exclusive licenses by the other
                    Party and also agrees not to assert any claim with respect
                    to the licensed application or patent against any licensee
                    of the other Party thereunder during the term of any such
                    license.

         19.5       No sale or lease hereunder shall convey any license by
                    implication, estoppel or otherwise, under any proprietary or
                    patent rights of Contractor, to practice any process with
                    such product or part, or, for the combination of such
                    product or part with any other product or part.



                                       35
<PAGE>



ARTICLE 20.                INTELLECTUAL PROPERTY RIGHTS


         Except as provided in Article 19, neither Party shall acquire any
         rights with respect to any patent, trademark, trade secret, or any
         other intellectual property developed or used by the other Party in the
         performance of this Contract.




                                       36
<PAGE>



ARTICLE 21.                FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE


         Proprietary Information shall mean any data and information received by
         one Party from the other Party, which is identified as proprietary in
         accordance with either of the following methods: (i) if in writing, it
         shall be marked by the disclosing Party with an appropriate proprietary
         legend, or (ii) if disclosed orally, it shall be presented by the
         disclosing Party as Proprietary at the time of disclosure and shall be
         confirmed by the disclosing Party as Proprietary Information in writing
         within fifteen (15) days of its initial oral disclosure.

         21.1     The receiving Party agrees to protect such data and
                  information with the same degree of care which the receiving
                  Party uses to protect its own confidential data and
                  information;


         21.2     The receiving Party shall not disclose or have disclosed to
                  third Parties, in any manner or form, or otherwise publish
                  such data and information so long as it remains proprietary
                  without the explicit authorization of the other Party;


         21.3     The receiving Party agrees that it shall use such data and
                  information solely in connection with the performance of work
                  under this Contract, unless otherwise explicitly authorized by
                  or on behalf of the other Party with the designation of
                  specific data and information and use;


         21.4     The foregoing obligations with regard to such data and
                  information shall exist unless and until such time as:


                  21.4.1     Such data and information are to the receiving
                             Party or otherwise publicly available prior to its
                             receipt by the receiving Party without the default
                             of the receiving Party; or


                  21.4.2     Such data and information have been lawfully
                             disclosed to the receiving Party by a third Party
                             which has the right to disclose such data; or


                                       37
<PAGE>

                  21.4.3     Such data and information are shown by written
                             record to have been independently developed by the
                             receiving Party; or


                  21.4.4     Such data and information are otherwise available
                             in the public domain without breach of this
                             Contract by the receiving Party; or


                  21.4.5     Such data and information are disclosed by or with
                             the permission of the disclosing Party to a Third
                             Party without restriction; or


                  21.4.6     Such data and information are released for
                             disclosure in writing by or with the permission of
                             the disclosing Party.


         21.5     Providing HCG shall obtain from its customer(s), a
                  nondisclosure agreement at least as restrictive as this
                  Article 21 and furnishes a copy thereof to Contractor, HCG may
                  disclose any proprietary information to its customer(s) which
                  shall be necessary for HCG and its affiliates to meet its
                  contractual commitments with its customer(s).


         21.6     Any copyrighted material belonging to a Party to this Contract
                  may be copied by the other Party as necessary to enable the
                  receiving Party to perform its obligations under this
                  Contract, provided always that the copyright legend is
                  retained on the material.




                                       38
<PAGE>



ARTICLE 22.                PUBLIC RELEASE OF INFORMATION


         Neither Party shall issue news releases, articles, brochures,
         advertisements, prepared speeches, and other information releases
         concerning the work performed or to be performed under this Contract by
         Contractor or its subcontractors, or any employee or consultant of
         either, without first obtaining the prior written approval of the other
         Party concerning the content and timing of such release which approval
         shall not be unreasonably withheld. The initiating Party shall provide
         such releases to the other Party for review within a reasonable time
         prior to the desired release date.




                                       39
<PAGE>



ARTICLE 23.                TAXES


         23.1     The price which shall be paid by HCG for the Spacecraft,
                  Documentation and Related Services provided under this
                  Contract does not include any state or local sales or use
                  taxes, or fees or other taxes against real or personal
                  property, however designated, which may be levied or assessed
                  against Contractor. With respect to such taxes, HCG shall
                  either furnish Contractor with an appropriate exemption
                  certificate applicable thereto or pay Contractor, upon timely
                  presentation of invoices therefor, such amounts thereof as
                  Contractor may by law be required to collect or pay. HCG shall
                  be responsible for the payment of all personal property taxes,
                  if any, with regard to goods which are levied upon subsequent
                  to the date of delivery to HCG. HCG shall be responsible for
                  any inventory taxes, state taxes or any other taxes that are
                  assessed to Contractor as a result of storage of the
                  Spacecraft in accordance with Article 31. HSC shall be
                  relieved of responsibility for any taxes and/or port fees
                  associated with the Sea Launch Zenit Vehicle except as
                  provided by Article 4 , Paragraph 4.2.1.2 of this Contract.


         23.2     In the event Contractor in the performance of this Contract is
                  required to pay customs, import duties, value-added or sales
                  taxes, commercial card fees, port fees, harbor maintenance
                  tax, other charges, or taxes, or fees, (collectively,
                  "Assessments") however designated (except for (i) any
                  Assessment based on Contractor's income and (ii) any
                  Assessment incurred as a result of or associated with
                  Contractor's manufacture of the Spacecraft), then HCG will
                  reimburse Contractor for such Assessments within thirty (30)
                  days of written notification by Contractor of payment;
                  provided, however that, Contractor shall use its reasonable
                  best efforts to obtain waivers, exemptions and/or relief from
                  such Assessments when practicable, and HCG shall not be
                  required to pay any Assessment to the extent any such waiver,
                  exemption or relief is pending or has been obtained.
                  Notification shall then be supported by an invoice and
                  attachment(s) evidencing such payment having been made by
                  Contractor.




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<PAGE>



ARTICLE 24.                GOVERNING LAW


         This Contract shall be deemed made in the State of California and shall
         be construed in accordance with the laws of the State of California.




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<PAGE>



ARTICLE 25.                TITLES


         Titles given to the Articles herein are inserted only for convenience
         and are in no way to be construed as part of this Contract or as a
         limitation of the scope of the particular article to which the title
         refers.




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<PAGE>



ARTICLE 26.                NOTICES AND AUTHORIZED REPRESENTATIVES


         Any notice or request required or desired to be given or made hereunder
         shall be in writing and shall be effective if delivered in person or
         sent by mail or by facsimile as indicated below:


         1.       Hughes Communications Galaxy Inc.
                  P.O. Box 9712
                  Bldg. A01, M/S 4A467
                  Long Beach, California  90810-9928

                   Attention:       TBD, Contracts Manager
                          cc:       TBD, Director, Systems Engineering &
                                    Technology

                  Authorized Representative(s):      [TBD]

         2.       Hughes Space and Communications Company
                  Post Office Box 92919, Airport Station
                  Bldg. S41, M/S A374
                  Los Angeles, California  90009

                   Attention:        Samuel C. Tricoli, Contracts Manager
                          cc:        Arthur W. Ackerman, Jr., Program Manager

                  Authorized Representative(s):      [TBD]


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<PAGE>



ARTICLE 27.                INTEGRATION


         This document, with Exhibits, constitutes the entire understanding
         between the Parties with respect to the subject matter of this
         Agreement and supersedes all previous oral and/or written negotiations,
         commitments, and understandings of the Parties.




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<PAGE>



ARTICLE 28.                CHANGES


         28.1     Any changes requested by Contractor during the performance of
                  this Contract, within the general scope of this Contract,
                  which will add or delete Work, stop Work, affect the design of
                  the Spacecraft, change the method of shipment or packing, or
                  the place or time of delivery, or will affect any other
                  requirement of this Contract, shall be submitted in writing
                  ("Change Proposal") to Buyer sixty (60) days prior to the
                  proposed effective date of the change. If such Contractor
                  requested change causes an increase or decrease in the total
                  price or other terms of this Contract, Contractor shall submit
                  a proposal to Buyer detailing the impact of such change.


         28.2     Buyer shall notify Contractor in writing within thirty (30)
                  days after receipt of the requested change and price
                  adjustment, if any, whether or not it agrees with and accepts
                  such Change Proposal. If Buyer agrees with and accepts the
                  Contractor requested Change Proposal, Contractor shall proceed
                  with the performance of the Contract as changed, or in the
                  case of a Stop Work Order, suspend the performance of this
                  Contract, and an amendment to the Contract reflecting the
                  Change Proposal shall be incorporated into the Contract. If
                  Buyer does not agree with the Contractor requested Change
                  Proposal, the Parties shall attempt to reach agreement on such
                  Change Proposal. If the Parties are unable to agree on the
                  requested change and price adjustment, then the Parties shall
                  proceed with the performance of this Agreement, as unchanged.
                  In the event the Parties are able to reach agreement on the
                  change, but not on the price adjustment component, then the
                  Parties shall elevate such dispute to the Senior Executives of
                  the respective companies for resolution. If resolution can not
                  be achieved within a reasonable period of time under the
                  circumstances, Buyer may make a qualified acceptance of the
                  Change Proposal, accepting all matters other than price, and
                  issue of price shall be submitted for resolution by
                  arbitration in accordance with the provisions of Paragraph
                  32.2 hereof. Pending such resolution of the price issue, the
                  Parties shall perform their obligations under the Contract, or
                  in the case of a Stop Work Order, suspend their obligations,
                  as if the Change Proposal had been accepted; provided,
                  however, that Buyer shall pay any disputed amount of the price
                  adjustment



                                       45
<PAGE>

                  into an escrow account in accordance with Paragraph 28.4
                  hereof on the date such amount would have been due and payable
                  had the Change Proposal been accepted, or if the Change
                  Proposal could result in a downward adjustment in the Contract
                  Price in excess of the amount remaining to be paid by the
                  Buyer, Contractor shall deposit the disputed amount of such
                  excess into an escrow account in accordance with Paragraph
                  28.4 hereof. The final change price adjustment achieved either
                  by the Parties, or through an arbitration award shall be paid
                  in accordance with the payment plan agreed by the Parties or,
                  if applicable, by the Arbitrator.


         28.3     Buyer may submit to Contractor in writing (a "Change Order
                  Request") detailing any changes requested by Buyer during the
                  performance of this Contract, within the general scope of the
                  Contract, which will add or delete Work, stop Work, affect the
                  design of the Spacecraft, change the method of shipment or
                  packing, or the place or time of delivery, or will affect any
                  other requirement of this Contract. Contractor shall respond
                  to such Change Order Request in writing to Buyer within thirty
                  (30) days after such request. If Contractor determines that
                  the change requested by Buyer is feasible and can be made at
                  no additional cost and with no associated delays, then
                  Contractor shall so notify, Buyer and Contractor shall
                  commence implementing such change. If the Contractor
                  determines otherwise, then, Contractor shall submit to Buyer,
                  a proposal detailing the impact of such change and the price
                  adjustment, if any, (the "Change Order Offer"). Buyer shall
                  notify Contractor in writing, within thirty (30) days after
                  receipt of Contractor's Change Order Offer, whether or not it
                  agrees with and accepts Contractor's Change Order Offer. If
                  Buyer agrees with and accepts Contractor's Change Order Offer,
                  Contractor shall immediately proceed with the performance of
                  this Contract as changed, or in the case of a Stop Work Order,
                  suspend the performance of this Contract, and an amendment to
                  the Contract reflecting such change shall be incorporated into
                  the Contract. If Buyer does not agree with the Contractor's
                  Change Order Offer, the Parties shall attempt to reach
                  agreement on such Change Order Offer. In the event the Parties
                  are able to reach agreement on the change, but not on the
                  price adjustment component, then the Parties shall elevate
                  such dispute to the Senior Executives of the respective
                  companies for resolution. If resolution can not be achieved
                  within a reasonable period of time under




                                       46
<PAGE>

                  the circumstances, Buyer may make a qualified acceptance of
                  the Change Order Offer, accepting all matters other than
                  price, and the issue of price shall be submitted for
                  resolution by arbitration in accordance with the provisions of
                  Paragraph 32.2 hereof. Pending such resolution of the price
                  issue, the Parties shall perform their obligations under the
                  Contract, or in the case of a Stop Work Order, suspend their
                  obligations, as if the Change Order Offer had been accepted;
                  provided however, that the Buyer shall pay any disputed amount
                  of the price adjustment into an escrow account in accordance
                  with Paragraph 28.4 hereof on the date such amount would have
                  been due and payable had the Change Order Offer been accepted,
                  or if the Change Order Request could result in a downward
                  adjustment in the Contract Price in excess of the amount
                  remaining to be paid by Buyer, Contractor shall deposit the
                  disputed amount of such excess into an escrow account in
                  accordance with Paragraph 28.4 hereof. The dispute shall then
                  be resolved by arbitration under the provisions of Article 32,
                  entitled "Disputes." The final change price adjustment
                  achieved either by the Parties, or through an arbitration
                  award shall be paid in accordance with the payment plan agreed
                  by the Parties or, if applicable, by the Arbitrator.


         28.4     Escrow Provisions - Disputed Amounts


                  Disputed amounts with respect to any change under this Article
                  28 shall be paid into an interest bearing escrow account to be
                  established at Bank of America, Concord, California. Upon
                  settlement of the dispute as to such payment and alleged
                  breach in accordance with Article 32, the Party entitled to
                  the amount or part thereof in escrow, shall receive such
                  amount together with all accrued interest thereon and the
                  other Party shall pay all costs and fees associated with the
                  escrow of said amount. The placement of disputed amounts into
                  an escrow account shall not relieve either Party of its
                  remaining obligations under this contract.




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<PAGE>



ARTICLE 29.                EFFECTS OF STORAGE ON BATTERIES


         For Spacecraft batteries to provide the required minimum fifteen (15)
         years of in-orbit services per Exhibit B, Galaxy XI Spacecraft
         Specification, it is understood that launch must occur within three (3)
         years from the date of activation of the first battery cell. In the
         event Buyer directs Contractor to store any deliverable Spacecraft and
         the period of such storage causes a launch later than three (3) years
         from the date of activation of that Spacecraft's first battery cell,
         and HCG upon its election to either: (i) install replacement batteries
         or (ii) recondition batteries, so directs Contractor, HCG shall pay
         Contractor its costs plus a [***] profit rate. In either case (i) or
         (ii), the batteries shall meet a fifteen (15) year in-orbit service
         requirement.


[***] Filed separately with the Commission pursuant to a request for
confidential treatment.


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<PAGE>



ARTICLE 30.                INTER-PARTY WAIVER OF LIABILITY


         30.1     Prior to the time HCG and the Contractor enter the premises at
                  the Launch Site, they each agree that they will not make a
                  claim against each other for an event that occurs at the
                  Launch Site premises involving damage to, loss of, or loss of
                  use of their property or the property of others in their
                  possession, caused by the fault or negligence of the other
                  Party to this Contract, or otherwise caused by any defect in
                  any product manufactured or sold by the other Party to this
                  Contract. Such claims are waived and each Party will bear its
                  own losses. HCG will include a comparable clause in each of
                  its contracts with vendors, subcontractors or customers for
                  services or benefits expected as a result of the launch or
                  orbiting of this Galaxy Spacecraft. Such comparable clause
                  shall include a requirement to flow the clause down to
                  lower-tier contractors.


         30.2     Notwithstanding any other provisions of this Contract, prior
                  to the time any Party, associated with the Galaxy XI launch
                  activities at the Launch Site, shall enter the premises at the
                  Launch Site, such Parties shall be required to sign an
                  Inter-Party Waiver of Liability consistent with that between
                  HCG and the Contractor as incorporated herein under Paragraph
                  30.1 of this provision or other similar agreement as may be
                  required by the launch agency. Each Party shall have the
                  responsibility to assure that all the Parties associated with
                  the launch of Galaxy XI Spacecraft (for which they have
                  control or privity of Contract with hereunder) have executed
                  said Inter-Party Waiver of Liability.




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<PAGE>



ARTICLE 31.                SPACECRAFT STORAGE


         31.1     Buyer may, at its option, order Contractor to store, in
                  accordance with the provisions of Exhibit B Galaxy X
                  Spacecraft Specification, the deliverable Spacecraft
                  (including separate storage of Batteries, if needed) for a
                  period of up to two (2) years from the date of their delivery
                  to Buyer. HCG shall provide written notice to the Contractor
                  not later than six (6) months prior to the scheduled delivery
                  of said Spacecraft. Contractor's price for providing storage
                  shall be provided to Buyer in accordance with Article 29,
                  "Changes," (and such price shall be deemed a "Change Proposal"
                  for purposes of Article 29) within 30 days after receipt of
                  Buyer's notice to store such Spacecraft and Contractor shall
                  provide storage facilities. If such storage facilities are
                  unavailable, Contractor and Buyer shall hold discussions to
                  determine a mutually agreed storage arrangement.


         31.2     Six (6) months prior to a stored Spacecraft's scheduled launch
                  date, Buyer shall, by notice in writing, order the Contractor
                  to remove said Spacecraft from storage and ship it to a Launch
                  Site designated by Buyer. The cost for storage and additional
                  transportation costs exceeding that required to transport the
                  Spacecraft to the Port of Long Beach (Integration Facility)
                  point specified herein, shall be borne by Buyer. These will be
                  in addition to any charges which become the obligation of the
                  Buyer per Article 17 herein entitled "Spacecraft Not Launched
                  Within Six Months After Acceptance."




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<PAGE>



ARTICLE 32.                DISPUTES


         32.1     Disputes


                  32.1.1     In the event any dispute arises between the
                             Contractor and the Buyer relating to this Contract,
                             either Party may give written notice to the other
                             of its objections and reasons therefore. The
                             Contractor and Buyer shall consult in an effort to
                             reach a mutual agreement to resolve such dispute.
                             In the event a mutual agreement cannot be reached
                             within fifteen (15) days after receipt of this
                             notice, the respective positions of the Parties
                             shall be forwarded to Contractor and Buyer's
                             respective Executive Offices for discussions and
                             they shall attempt to reach a mutual agreement to
                             resolve such dispute within another fifteen (15)
                             day period.


         32.2     Arbitration of Disputes


                  32.2.1     Grounds for Arbitration and Notice Requirement. Any
                             dispute, disagreement, controversy or claim arising
                             out of or relating to this Contract or the
                             interpretation thereof or any arrangements relating
                             thereto, or the validity or enforceability thereof,
                             or contemplated therein or the breach, termination
                             or invalidity thereof which is not settled to the
                             mutual satisfaction of the Parties in accordance
                             with Paragraph 32.1 above, then it shall be settled
                             exclusively and finally by binding arbitration,
                             after written notice by either Party. Arbitration
                             of such disputes in accordance with this Article 32
                             shall be the Parties' exclusive remedy.


                  32.2.2     Administration and Rules. Arbitration proceedings
                             in connection with the Agreement shall be
                             administered by the American Arbitration
                             Association in accordance with its then in effect
                             Commercial Arbitration Rules, together with any
                             relevant supplemental rules including but not
                             limited to its Supplementary Procedures for Large,
                             Complex Disputes, as modified by the terms and
                             conditions of the Agreement. With respect to the


                                       51
<PAGE>

                             selection of arbitrators, arbitration proceedings
                             in connection with this Agreement shall be
                             conducted before a panel of three (3) arbitrators.
                             Within fifteen (15) days after the commencement of
                             arbitration, each Party shall select from a list of
                             qualified persons one person to serve as an
                             arbitrator on the panel, and within ten (10) days
                             of their selection, the two arbitrators shall
                             select a third arbitrator who is listed as an
                             active member of the American Arbitration
                             Association at the time that arbitration
                             proceedings commence. If the two arbitrators
                             selected by the respective Parties are unable or
                             fail to agree upon the third arbitrator in the
                             allotted time, then the third arbitrator shall be
                             selected by the American Arbitration Association.


                  32.2.3     Place of Arbitration. The place of arbitration
                             shall be in Los Angeles, California, U.S.A.


                  32.2.4     Discovery. The arbitrators shall have the
                             discretion to order a pre-hearing exchange of
                             information by the Parties, including without
                             limitation, production of requested documents,
                             exchange of summaries of testimony of proposed
                             witnesses, and examination by deposition of the
                             Parties.


                  32.2.5     Award and Judgment. The arbitrators shall have no
                             authority to award punitive damages, and may not,
                             in any event, make any ruling, finding or award
                             that does not conform to the terms and conditions
                             of this Agreement. Subject to the foregoing, the
                             Parties agree that the judgment of the arbitrators
                             shall be final and binding upon the Parties and
                             that the judgment upon the award rendered by the
                             arbitrators may be entered in any court having
                             jurisdiction thereof.

                  32.2.6     Confidentiality. No Party or arbitrator may
                             disclose the existence, content, or results of any
                             arbitration proceedings in connections with this
                             Agreement without prior written consent of all
                             Parties to the arbitration proceeding.


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<PAGE>

                  32.2.7     Fee and Expenses. All fees and expenses of any
                             arbitration proceedings in connection with this
                             Agreement shall be borne by the losing Party.
                             However, each Party shall bear the expense of its
                             own counsel, experts, witnesses, and preparation
                             and presentation of evidence.


                  32.2.8     Performance. Contractor and Seller shall continue
                             with performance under this Agreement during any
                             disagreement, negotiation, or arbitration.




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<PAGE>



ARTICLE 33.                ASSIGNMENT


33.1     Neither Party shall assign, or transfer this Contract or any of its
         rights, duties or obligations thereunder to any person or entity, in
         whole or part without the prior written consent of the other Party
         except that either Party may assign or transfer any of its rights,
         duties or obligations under this Contract, either in whole or in part,
         to its parent company, subsidiary or affiliate(1) in which the
         assigning Party has a controlling interest thereof. In addition,
         notwithstanding anything in this Article 33 to the contrary, the
         consent of Contractor shall not be required for, and Paragraph 33.2
         shall not apply to, any assignment of this Contract from HCG to
         Magellan International, Inc. (which currently contemplates changing its
         name to PanAmSat Corporation), or an affiliate thereof, in connection
         with the consummation of the transactions contemplated by that certain
         Agreement and Plan of Reorganization dated as of September 20, 1996 by
         and among Buyer, Magellan International, Inc., Pan Am Sat Corporation
         and certain affiliates of Buyer.

         Neither Party shall unreasonably withhold consent to any assignment or
         transfer providing that the requesting Party can demonstrate to the
         other Party's satisfaction that:

         (1)      its successor or assignee possesses the financial resources to
                  fulfill the obligations of this Contract; and

         (2)      any such assignment or transfer shall not jeopardize any data
                  rights or competitive position, or violate laws related to
                  export or technology transfer, or otherwise increase the other
                  Party's risks or obligations.

         If the requesting Party cannot so demonstrate, both Parties agree to
         negotiate in good faith suitable modifications and new provisions to
         this Contract which would mitigate the above risks and/or bring this
         Contract into conformance with applicable laws.

(1) Affiliate: An "affiliate" of, or a person "affiliated" with, a specified
    person, is a person that directly, or indirectly through one or more
    intermediaries, controls, or is controlled by, or is under common control
    with, the person specified.


                                       54
<PAGE>

33.2     The Parties agree that in the event that the ownership or control of
         HCG or HSC is changed, the Parties reserve the right to negotiate in
         good faith suitable modifications and new provisions to this Contract
         which would mitigate any additional risks, financial or otherwise,
         which may be brought about by such change in ownership or control.

33.3     This Contract shall be binding upon the Parties hereto and their
         successors and permitted assigns.



                                       55
<PAGE>



ARTICLE 34.                LIMITATION OF LIABILITY


34.1     The Parties to this Contract expressly recognize that commercial space
         ventures involve substantial risks and recognize the commercial need to
         define, apportion and limit contractually such risks associated with
         this commercial space venture. The payments and other remedies
         expressly set forth in this Contract fully reflect the Parties'
         negotiations, intentions and bargained-for allocation of such risks
         associated with commercial space ventures.

34.2     In no event shall the Parties be liable for any direct, indirect,
         incidental, special, contingent or consequential damages (including,
         but not limited to, lost revenues or profits), except as expressly
         provided for in this Agreement. This Article shall survive the
         expiration or termination of this Contract for whatever cause.



                                       56
<PAGE>



ARTICLE 35.                EFFECTIVE DATE OF CONTRACT


The effective date of this Contract No. 96-HCG-002 shall be 7th, May 1997.






IN WITNESS WHEREOF, the Parties hereto have executed this Contract No.
96-HCG-002 to become effective upon the date specified in this Article 35,
herein entitled, "Effective Date of Contract."


HUGHES SPACE & COMMUNICATIONS COMPANY


SIGNATURE:  /s/ Arthur W. Ackerman Jr.
            --------------------------

NAME:       ARTHUR W. ACKERMAN JR.
            --------------------------

TITLE:      GALAXY XI PROGRAM MANAGER
            --------------------------

DATE:       5/7/97
            --------------------------


HUGHES COMMUNICATIONS GALAXY, INC.


SIGNATURE:  /s/ Faye Deborah Siskel
            --------------------------

NAME:       Faye Deborah Siskel
            --------------------------

TITLE:      Hughes Communications Galaxy, Inc. Contracts
            --------------------------

DATE:       May 7, 1997
            --------------------------



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