Exhibit 10.51










                              FIXED PRICE CONTRACT

                                     BETWEEN

                      PANAMSAT INTERNATIONAL SYSTEMS, INC.

                                       AND

                      HUGHES SPACE & COMMUNICATIONS COMPANY

                                       FOR

                                 PAS 6B HS601HP

                 SPACECRAFT, RELATED SERVICES AND DOCUMENTATION



                             CONTRACT No. 98-PAS-001


<PAGE>


                               TABLE OF CONTENTS


                                                                          PAGE


ARTICLE 1.       EXHIBITS AND INCORPORATIONS.................................3


ARTICLE 2.       ORDER OF PRECEDENCE.........................................4


ARTICLE 3.       SPACECRAFT, DOCUMENTATION AND RELATED SERVICES..............5


ARTICLE 4.       DELIVERABLES AND SCHEDULE...................................8


ARTICLE 5.       PRICE......................................................10


ARTICLE 6.       PAYMENTS...................................................13


ARTICLE 7.       SPACECRAFT LAUNCH DATE.....................................32


ARTICLE 8.       BUYER-FURNISHED ITEMS......................................34


ARTICLE 9.       INSPECTION AND ACCEPTANCE..................................37


ARTICLE 10.      ACCESS TO WORK IN PROCESS..................................39


ARTICLE 11.      TERMINATION FOR DEFAULT; LIMITATION OF LIABILITY...........40


ARTICLE 12.      EXCUSABLE DELAYS...........................................43


ARTICLE 13.      AMENDMENTS.................................................46


ARTICLE 14.      TERMINATION FOR CONVENIENCE................................47


ARTICLE 15.      TITLE AND RISK OF LOSS.....................................51


ARTICLE 16.      SPACECRAFT WARRANTY........................................55


ARTICLE 17.      INDEMNIFICATION............................................57


ARTICLE 18.      SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER 
                    ACCEPTANCE..............................................59


ARTICLE 19.      PATENT/COPYRIGHT INDEMNITY.................................61


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ARTICLE 20.      RIGHTS IN INVENTIONS.......................................63


ARTICLE 21.      INTELLECTUAL PROPERTY RIGHTS...............................66


ARTICLE 22.      FURNISHED DATA AND INFORMATION, DISCLOSURE AND USE.........67


ARTICLE 23.      PUBLIC RELEASE OF INFORMATION..............................70


ARTICLE 24.      TAXES......................................................71


ARTICLE 25.      GOVERNING LAW..............................................72


ARTICLE 26.      TITLES.....................................................73


ARTICLE 27.      NOTICES AND AUTHORIZED REPRESENTATIVES.....................74


ARTICLE 28.      INTEGRATION................................................76


ARTICLE 29.      CHANGES....................................................77


ARTICLE 30.      EFFECTS OF STORAGE ON BATTERIES............................83


ARTICLE 31.      INTER-PARTY WAIVER OF LIABILITY............................84


ARTICLE 32.      SPACECRAFT STORAGE.........................................85


ARTICLE 33.      DISPUTES...................................................86


ARTICLE 34.      ASSIGNMENT.................................................89


ARTICLE 35.      LIMITATION OF LIABILITY....................................91


ARTICLE 36.      NO THIRD PARTY AGREEMENT...................................92


ARTICLE 37       LIQUIDATED DAMAGES FOR LATE SHIPMENT.......................94


ARTICLE 38       CORRECTIVE MEASURES; OPERATIONAL DEFICIENCIES..............95


ARTICLE 39       REPLACEMENT SPACECRAFT.....................................97


ARTICLE 40       INDEX OF DEFINED TERMS.....................................99


ARTICLE 41       EFFECTIVE DATE OF CONTRACT................................102


<PAGE>


This FIXED PRICE CONTRACT (the "Contract") is entered into as of the 9th day of
March, 1998, by and between PANAMSAT INTERNATIONAL SYSTEMS, INC. (herein called
"Buyer"), a Delaware corporation having a place of business at One Pickwick
Plaza, Greenwich, Connecticut 06830, and HUGHES SPACE AND COMMUNICATIONS COMPANY
(herein called "Contractor"), a Delaware corporation having a place of business
at 909 North Sepulveda Boulevard, El Segundo, California 90245.




                                   WITNESSETH:




         WHEREAS, PanAmSat Corporation (a Delaware corporation and the parent
company of Buyer) and Contractor are party to that certain letter agreement
dated December 24, 1997, as supplemented by that certain supplemental letter
agreement dated February 9, 1997 (as so supplemented, the "Letter Agreement"),
pursuant to which, in exchange for payment of consideration by PanAmSat
Corporation, Contractor undertook to proceed with certain preliminary design,
procurement and manufacturing efforts for a proposed PAS 6B spacecraft to
support the launch date specified therein;

         WHEREAS, such proposed PAS 6B spacecraft would be built from a
spacecraft already under construction by Contractor for a third party, and
Contractor has reached agreement with such third party to terminate the
agreement for construction and delivery of such other spacecraft; and

         WHEREAS, the Parties now desire to enter into this Contract for Buyer
to purchase and Contractor to manufacture, deliver and perform (as applicable)
the PAS 6B Spacecraft, Documentation and Related Services as provided and
defined herein below;


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         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Parties hereby agree as follows:


                                       2


<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 - PAS 6B Statement of Work - dated February 1998.


         1.2      Exhibit B - PAS 6B Spacecraft Specification - dated February
                  1998.


         1.3      Exhibit C - PAS 6B Spacecraft Integration Test Plan - dated
                  February 1998.


         1.4      Exhibit D - PAS 6B Product Assurance Plan - dated February
                  1998.


         1.5      Exhibit E - Certain Documentation - dated February 1998.


         1.6      Exhibit F - Maximum Termination Liability - dated February
                  1998.


         1.7      Exhibit G - [****************] - dated February 1998.


         1.8      Exhibit H - PAS 6C Payment Plan - dated March 1998.


         1.9      Exhibit I - Sample Incentives Obligations Payment Schedule -
                  dated March 1998.


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


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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."


                                       4


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


         3.1      Contractor shall sell and provide, and Buyer shall purchase,
                  the items and services referred to in Section 4.1. Contractor
                  shall provide the necessary personnel, material, services and
                  facilities to design, fabricate, test and deliver one (1) HS
                  601HP type Spacecraft for PAS 6B (hereinafter referred to as
                  "PAS 6B" or the "Spacecraft"), Documentation and Related
                  Services (as defined in Article 4) in accordance with the
                  provisions of this Contract and in the manner specified under
                  Exhibits A, B, C and D hereto.


         3.2      All materials and services specified in Exhibit A, "PAS 6B
                  Statement of Work," shall meet the requirements of Exhibit B,
                  entitled "PAS 6B 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 
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                           *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************
                           *****************************************************
                           **************]


                  Any such election shall be made by Buyer in writing. [********
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  *****]


         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      Spacecraft, Documentation and Related Services described above
                  shall be 


[***]     Filed separately with the Commission pursuant to a request for 
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                  delivered to Buyer at the indicated locations on the dates set
                  forth in Article 4 entitled, "Deliverables and Schedule"
                  herein.


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         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:


-------------------------------------------------------------------------------
                          Date of Shipment,           Location of Shipment,
                              Delivery                    Delivery or
                          or Performance                  Performance
  Deliverable(s)
-------------------------------------------------------------------------------
                                                      o Shipped from Contrac-
1.  One PAS 6B           Shipment on September          tor's facility.
    Spacecraft           29, 1998 ("Shipment Date")   o Delivery Site at
                         to support Launch Date of      Ariane facility,
                         October 20, 1998*              Kourou, French
                                                        Guyana (subject
                                                        to change pursuant
                                                        to Paragraph 4.2.)
-------------------------------------------------------------------------------
                                                      o Performance Site to be
2.  Launch Support,      In Accordance with             determined pursuant to
    Mission Operations   Exhibit A                      Paragraph 4.2.
    and In-Orbit                                      o Fillmore, California
    Testing ("Related Services")                      o Castle Rock, Colorado
                                                      o El Segundo, California
-------------------------------------------------------------------------------

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

    *Contractor agrees to ship the Spacecraft from its facility on or
           before such Shipment Date in order to support the launch of
           the Spacecraft on the Launch Date in accordance with the
           requirements of this Contract and the Exhibits hereto. [*************
           *********************************************************************
           **************************************************************]
           

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


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         4.2      Designation of Launch Vehicle.


                  4.2.1    The initial launch vehicle (the "Launch Vehicle")
                           designation for the Spacecraft is an Ariane launch
                           vehicle. Buyer may change the designation of the
                           Spacecraft's Launch Vehicle at any time on or before
                           [********] months prior to the scheduled Launch Date
                           for the Spacecraft, in which event the Contract Price
                           shall be increased or decreased by the applicable
                           amount specified in Paragraph 5.3. If, subsequent to
                           the date that is [********] months prior to such
                           Launch Date, Buyer requests a change in the Launch
                           Vehicle or Approved Storage Facility for the
                           Spacecraft, such request shall be dealt with as a
                           Change Order Request of Buyer under Article 29.


                  4.2.2    Buyer shall pay the costs of delivering the
                           Spacecraft to the Launch Site, which costs are
                           included in the Contract Price.


         4.3      Contractor 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.


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ARTICLE 5.              PRICE

         5.1      The total price (the "Contract Price") for Contractor to
                  provide the Spacecraft, Documentation and Related Services
                  shall be [**********************************************]

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

         5.3      The Contract Price stated in Paragraph 5.1 is contingent upon
                  the utilization of the Launch Vehicle initially designated for
                  the Spacecraft in Paragraph 4.2.1. If Buyer changes the
                  designated Launch Vehicle for the Spacecraft in accordance
                  with Paragraph 4.2.1 (as opposed to Article 29), the Contract
                  Price shall be adjusted in accordance with the following
                  table:


                                   Table 5.3.1

                          Adjustment to Contract Price

               --------------------------------------------------
                    Launch Vehicle               Adjustment
               --------------------------------------------------
                      Delta III                  [********]
               --------------------------------------------------
                    Atlas IIAS/AR                [********]
               --------------------------------------------------
                       Proton                   [*********]
               --------------------------------------------------


         5.4      Any adjustment to the Contract Price under Paragraph 5.3 shall
                  be allocated pro rata over the entire Payment Plan for such
                  Spacecraft (including In-Orbit Performance Incentive
                  Obligations). Adjustments allocated to payments already made
                  shall be promptly paid by Buyer or refunded by Contractor, as
                  the case may be.


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


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         5.5      Buyer agrees to pay to Contractor a delivery incentive (the
                  "Delivery Incentive") as follows:

                              (i) Buyer shall pay to Contractor an additional
                         amount of [**************************************] in
                         the event that [***************************************
                         *******************************************************
                         *******************************************************
                         *******************************************************
                         *******************************************************
                         *******************************************************
                         ***************]

                              (ii) In addition to any amount in clause (i)
                         above, Buyer shall pay an additional amount equal to
                         [******************************************************
                         *******************************************] up to a
                         maximum amount in this clause (ii) of [****************
                         *********************] and a maximum total Delivery
                         Incentive under clauses (i) and (ii) of ***************
                         ******************************]

                  Contractor shall submit an invoice for any Delivery Incentive
                  after such amount is earned, and Buyer shall pay such Delivery
                  Incentive within thirty (30) days of receipt by Buyer of such
                  invoice. [****************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **************************************************************
                  **********] Notwithstanding anything herein to the contrary,
                  in the event that Contractor [********************************
                  **************************************************************
                  **************************************************************
                  **********] in achieving any part of the Delivery Incentive
                  provided by this Paragraph, Contractor [*********************
                  ***********************


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


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                  ***************************************************]


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


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ARTICLE 6.           PAYMENTS

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


         6.2      Invoices shall be prepared and submitted by Contractor for
                  each Spacecraft in a form reasonably acceptable to Buyer.
                  Payments to Contractor for each Spacecraft shall be made
                  according to the following payment plans:



                                   [**********]
                         [*****************************]

     ----------------------------------------------------------------------
                                     [*************]    [****************]
                 [*****]                  [**]                [**]
     ----------------------------------------------------------------------
           [**************]              [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
                [****]                   [****]              [****]
     ----------------------------------------------------------------------
         [********************
               *******]                  [****]              [****]
     ----------------------------------------------------------------------
       

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


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        [************************
        **********************]          [****]              [****]
     ----------------------------------------------------------------------
         [********************
           ***************]              [****]              [****]
     ----------------------------------------------------------------------
         [*******************
       ************************]         [****]              [****]
     ----------------------------------------------------------------------


        (1)  [*****************************************************************
             ******************************************************************
             ******************************************************************
             ******************************************************************
             ********]


        (2)  [*******************************************]


6.3      Incentives Obligations.

         6.3.1    The following definitions are applicable to this Section 6.3:

                  6.3.1.1  "Specified Operation Lifetime" means fifteen (15) 
                              years.

                  6.3.1.2  "Successfully Operating Payload". The
                                    Spacecraft shall be equipped with one or
                                    more Payloads, as specified in Exhibit B.
                                    Each Payload shall be deemed to be
                                    Successfully Operating if at least that
                                    number of Transponders that is one more than
                                    one-half of the total number of Transponders
                                    within such Payload are Successfully
                                    Operating Transponders (as defined below).


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

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                  6.3.1.3  "Successfully Operating Transponder". A
                                    Successfully Operating Transponder is a
                                    Transponder which meets either or both of
                                    the following two criteria:

                           (a)      The Transponder meets or exceeds the
                                    performance specifications set forth in
                                    Exhibit B. For the avoidance of doubt, if
                                    the Spacecraft is placed into inclined
                                    orbit, then the Transponders shall be deemed
                                    not to meet the criteria stated in this
                                    Paragraph 6.3.1.3(a) at such time as the
                                    Spacecraft would have ceased to have a
                                    Useful Commercial Life, (as mutually
                                    determined by the Parties) had it not been
                                    placed in such an orbit.

                           (b)      The Transponder, while not meeting or
                                    exceeding the performance specifications,
                                    provides Buyer with no material loss in its
                                    commercial value.

                                    A Transponder shall also be deemed to be a
                                    Successfully Operating Transponder if it
                                    meets the performance specifications through
                                    use of any redundant or spare equipment not
                                    already in use by another Transponder.

                  6.3.1.4  "Useful Commercial Life". The Useful
                                    Commercial Life of a Spacecraft means the
                                    period beginning on the Commencement Date
                                    and ending on the earlier to occur of (i)
                                    the date on which there is just sufficient
                                    fuel remaining on board the Spacecraft only
                                    to eject the Spacecraft from its
                                    geostationary orbital location or (ii) the
                                    date on which at least one-half of the
                                    Transponders on each Payload are not
                                    Successfully Operating Transponders.


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                  6.3.1.5  "Successfully  Injected  Spacecraft".  The  Launched
                                    Spacecraft shall be deemed to be a Success-
                                    fully Injected Spacecraft if:

                           (a)      The transfer orbit/spacecraft attitude meets
                                    the following required criteria:

                                    (1) Perigee altitude error is less than or
                                    equal to +/-3 sigma;

                                    (2) Apogee Altitude error is less than or
                                    equal to +/-3 sigma;

                                    (3) Inclination error is less than or equal
                                    to +/-3 sigma;

                                    (4) Argument of perigee error is less than
                                    or equal to +/-3 sigma; and

                                    (5) The Spacecraft has been separated with
                                    attitude rate errors of less than or equal
                                    to +/-3 sigma and

                           (b)      The Spacecraft has not suffered physical
                                    damage which resulted from Launch Vehicle
                                    malfunction.

                            The calculated amount of Useful Commercial Life (the
                            "Calculated Operational Lifetime") shall be mutually
                            determined by Buyer and Contractor, based on
                            standard engineering practices, using measured
                            actuals of the Spacecraft, existing at the time of
                            the operational hand-off of the Spacecraft to
                            Contractor from the Launch Vehicle provider. If the
                            attained transfer orbit/Spacecraft 


                                       16


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                            attitude does not meet the criteria stated in this
                            Section, but the Calculated Operational Lifetime is
                            greater than or equal to the Specified Operational
                            Lifetime for the Spacecraft, then the Spacecraft
                            shall be deemed to have been a Successfully Injected
                            Spacecraft. If, on the other hand, the attained
                            transfer orbit/Spacecraft attitude does not meet the
                            criteria stated above, and the Calculated
                            Operational Lifetime is less than the Specified
                            Operational Lifetime, then the Spacecraft shall be
                            deemed not be a Successfully Injected Spacecraft. If
                            Buyer and Contractor cannot agree on the Calculated
                            Operational Lifetime, then the Parties shall resolve
                            such disagreement in acceptance with the dispute
                            resolution procedures set forth in Article 33.
                            During such dispute resolution procedure, Buyer
                            shall commence all payments under Section 6.3.2 to
                            Contractor based on Contractor's calculation of such
                            Calculated Operational Lifetime, except only the
                            disputed amount(s) which shall be paid by Buyer in
                            escrow as set forth in Section 29.4, and the
                            prevailing party shall be entitled to interest as
                            provided therein.

                           6.3.1.6     "Incentives Interest Rate". The
                                            Incentives Interest Rate shall be
                                            the lesser of (i) the prime rate of
                                            Chase Manhattan, New York, as
                                            calculated on the first business day
                                            of each month for which interest is
                                            calculated plus [******************
                                            ***********************************]
                                            or 9ii0 [***************************
                                            *********************]

                           6.3.1.7     "Commencement Date". The
                                            Commencement Date shall be the date
                                            on which Buyer receives written
                                            certification from Contractor that,
                                            based upon the 


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                                            results of completed in-orbit
                                            performance tests, at least one
                                            Payload is a Successfully Operating
                                            Payload.

                  6.3.2    Buyer shall pay to Contractor the Incentives
                           Obligations and the Change Order Profit Component (if
                           applicable), as follows:

                           6.3.2.1  Incentives Obligations and Change
                                            Order Profit Component. Subject to
                                            Section 6.3.2.3 through 6.3.2.6,
                                            Buyer shall be obligated to pay to
                                            Contractor the Incentives Obligation
                                            and any Change Order Profit
                                            Component (if applicable), as
                                            follows: Buyer shall pay Contractor
                                            an equal monthly payment that, when
                                            calculated on a net present value
                                            basis to the Commencement Date using
                                            the Incentives Interest Rate, equals
                                            the total amount of Incentives
                                            Obligations plus Change Order Profit
                                            Component due hereunder. For
                                            example, if the Spacecraft is a
                                            Successfully Injected Spacecraft and
                                            on the Commencement Date all
                                            Transponders on the Spacecraft are
                                            and continue to be Successfully
                                            Operating Transponders for fifteen
                                            (15) years, assuming the maximum [**
                                            ******************************] for
                                            the entire period, the monthly
                                            Incentives Obligations payment would
                                            be [**************] (the "Nominal
                                            Payment"). If the Incentives
                                            Interest Rate is less than [***
                                            **********************] for any
                                            given month, the Incentives
                                            Obligations payment will be less
                                            than the Nominal Payment. In such
                                            circumstances, the 


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


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                                            amount of each month's payment will
                                            be calculated on a net present value
                                            basis to the date of the last
                                            month's payment using the remaining
                                            unpaid principal as the new
                                            principal, the Incentives Interest
                                            Rate, and a term equal to the number
                                            of months remaining in the
                                            Incentives period. The Parties shall
                                            agree in writing upon an appropriate
                                            allocation of the portion of the
                                            Incentive Obligations which shall be
                                            payable for each Payload on the
                                            Spacecraft. The Incentives
                                            Obligations, identified above, shall
                                            be payable in 180 equal and
                                            consecutive monthly installments
                                            over a fifteen (15) year life of the
                                            Spacecraft, except as may be
                                            adjusted as set forth herein. Except
                                            as provided in Paragraph 6.3.4, the
                                            first installment of each Incentives
                                            Obligations shall be paid on the
                                            Spacecraft's Commencement Date. A
                                            sample schedule matrix showing
                                            Incentives Obligations payments for
                                            fifteen years, assuming fully
                                            successful operation, and with
                                            varying hypothetical interests rates
                                            will be attached to this Contract as
                                            Exhibit I.



The foregoing notwithstanding:

                           (a)      If the Spacecraft is not a Successfully
                                    Injected Spacecraft pursuant to Section
                                    6.3.1.4 but is successfully placed into its
                                    on-station orbit by Hughes during the
                                    "Transfer Period" 


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                                    (defined as the period from separation of
                                    the Launch Vehicle through on-station
                                    acquisition) then, subject to Section
                                    6.3.2.3, Buyer shall pay the Incentives
                                    Obligations for the Spacecraft in equal and
                                    consecutive monthly installments over a
                                    period of the Spacecraft's On Station
                                    Operational Lifetime (defined at Section
                                    6.3.2.1(b)).

                           (b)      If the Spacecraft is Successfully Injected,
                                    but is not successfully placed into its
                                    on-station orbit by Contractor during the
                                    Transfer Period, then the total amount of
                                    the Incentives Obligations for the
                                    Spacecraft shall be multiplied by a
                                    percentile equal to (i) the On-Station
                                    Operational Lifetime divided by (ii) the
                                    Calculated Operational Lifetime, which
                                    percentile shall, in no event, be greater
                                    than one. Subject to Section 6.3.2.3, Buyer
                                    shall pay such Incentives Obligations for
                                    the Spacecraft in equal and consecutive
                                    monthly installments over a period of the
                                    Spacecraft's On-Station Operational
                                    Lifetime. The "On Station Operational
                                    Lifetime" shall be mutually determined by
                                    Buyer and Contractor, based on standard
                                    engineering practices, using measured
                                    actuals of the Spacecraft, existing at the
                                    end of the Transfer Period. However, should
                                    the Spacecraft continue to operate
                                    successfully beyond the On-Station
                                    Operational Lifetime, Contractor will
                                    continue to earn Incentives Obligations at
                                    the same monthly rate up to the Specified
                                    Operational Lifetime.

                           (c)      Finally, if the Spacecraft is not a
                                    Successfully Injected Spacecraft and, in
                                    addition, is not successfully placed into
                                    its on-station orbit during the Transfer
                                    Period, then the total 


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                                    amount of the Incentives Obligations shall
                                    be multiplied by the sum of (A)(i) the
                                    Specified Operational Lifetime, plus (ii)
                                    the On-Station Operational Lifetime, minus
                                    (iii) the Calculated Operational Lifetime,
                                    divided by (B) the Specified Operational
                                    Lifetime, which percentile shall, in no
                                    event, be greater than one. Subject to
                                    Section 6.3.2.3, Buyer shall pay such
                                    Incentives Obligations for the Spacecraft in
                                    equal and consecutive monthly installments
                                    over a period of the Spacecraft's On-Station
                                    Operational Lifetime.

                                    For purposes of any provision of this
                                    Contract, if the Incentives Obligations or
                                    related payment periods are to be
                                    recalculated, the monthly installments due
                                    shall be recalculated to reflect the imputed
                                    interest element that is reflected in the
                                    payment plans specified above.

                           6.3.2.2  Notwithstanding the foregoing, if at any
                                    time Buyer continues to utilize for
                                    revenue-producing purposes any Transponder
                                    that is not a Successfully Operating
                                    Transponder, then Buyer shall pay a pro
                                    rated amount of the Incentives Obligation
                                    attributable to such Transponder that is
                                    proportionate to the partial benefit that
                                    Buyer derives from such Transponder (the
                                    "Partial Incentive Payment"), all as
                                    mutually agreed upon by the Parties in good
                                    faith.

                           6.3.2.3  Except for any Change Order Profit Component
                                    (which is non-contingent), payment of any
                                    Incentives Obligation shall be contingent
                                    upon the Transponders being Successfully
                                    Operating Transponders, as set forth herein,
                                    

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                                    on the applicable Payload and shall be
                                    pro-rated, therefore, on a Transponder
                                    equivalent-by-Transponder equivalent basis
                                    over the duration of the applicable term of
                                    such Obligation; provided, however, that
                                    beginning on the date, if any, that any one
                                    or more of the Payloads are no longer a
                                    Successfully Operating Payload, as and when
                                    ascertained pursuant to in Section 6.3.2.4
                                    (the "Degraded Payload"), then Buyer's
                                    then-remaining Incentives Obligations for
                                    such Payload(s) (exclusive of any Change
                                    Order Profit Component, as applicable) shall
                                    be deemed extinguished.

                           6.3.2.4  Whether any Transponder is not Successfully
                                    Operating shall be mutually determined by
                                    Buyer and Contractor, based on relevant
                                    technical data, reports and analyses, and
                                    each Party will make available to the other
                                    Party for its review, upon reasonable
                                    request, all data used in making such
                                    determination. If Contractor disagrees with
                                    such determination, then the Parties shall
                                    resolve such disagreement in accordance with
                                    the dispute resolution procedure set forth
                                    in Article 33.

                           6.3.2.5  If the Spacecraft has not been, or is not
                                    being, Properly Operated by the Buyer, and
                                    any Transponders thereof are not
                                    Successfully Operating Transponders, then
                                    the Transponders of the Spacecraft which
                                    were Successfully Operating prior to such
                                    improper operation of the Spacecraft shall
                                    be deemed to be Successfully Operating
                                    Transponders for purposes of Contractor's
                                    entitlement to payment of any applicable
                                    Incentives Obligations for such period as
                                    such Transponders would have reasonably been
                                    

                                       22


<PAGE>


                                    predicted to continue to be Successfully
                                    Operating had the Spacecraft and transponder
                                    thereon been Properly Operated by Buyer;
                                    provided, however, that if the failure is
                                    the result of a defect in the deliverable
                                    software or if Buyer demonstrates that the
                                    failure of any Transponder to be
                                    Successfully Operating was not caused
                                    primarily, directly or indirectly, by any
                                    act or omission of Buyer, its agents,
                                    Subcontractors, Consultants or
                                    representatives of any kind, then the
                                    foregoing provision shall not apply with
                                    respect to such Transponder.

                           6.3.2.6  Buyer may prepay any portion of the
                                    Incentives Obligations or the Change Order
                                    Profit Component pursuant to the schedule
                                    matrix attached as Exhibit 6.3.2.1. Any
                                    remaining Incentives Obligations so prepaid
                                    shall be subject to refund by Contractor to
                                    Buyer, in any instance and to the extent
                                    that Buyer's obligation to make such
                                    payments is relieved pursuant to this
                                    Article 6, as outlined in the last sentence
                                    of Section 6.3.4.1 hereof.

                  6.3.3     "Spacecraft Retirement Payment". At any time
                            following the Spacecraft's Delivery, Buyer may, at
                            its option, cease to utilize the Spacecraft for any
                            purpose; provided, however, that if Buyer does cease
                            using the Spacecraft (or if the Spacecraft is
                            rendered a total loss by virtue of Buyer's failure
                            to Properly Operate the Spacecraft), then, upon the
                            exercise date of such option or the declaration of
                            the Spacecraft as a total loss as applicable, all
                            remaining Incentives Obligations payments for any
                            Transponder (and any Change Order Profit Component,
                            if applicable) (subject to the provisions of Section
                            6.3.2.3 through 6.3.2.5) shall become 


                                       23


<PAGE>


                            immediately due and payable, all relative to the
                            Spacecraft; and Buyer shall pay to Contractor such
                            amounts, in immediately available funds, along with
                            the outstanding balance of principal and accrued
                            interest on any other outstanding payment
                            obligations with respect to the Spacecraft, if any,
                            as of such date. In determining the amount of
                            principal and interest due, present value analysis
                            discounted at the Incentives Interest Rate per annum
                            shall be done for any scheduled payment stream
                            previously created by the Parties hereunder.
                            Notwithstanding the foregoing, Buyer shall have the
                            right to cease using the Spacecraft and remove it
                            from its orbital location at any time following the
                            expiration of the Spacecraft's Useful Commercial
                            Life, without payment of such Spacecraft Retirement
                            Payment.

                  6.3.4 Incentive Obligations and Launch Delay

                           6.3.4.1     If the Spacecraft has not been launched
                                       by the 121st day after Delivery of the
                                       Spacecraft, then, except as set forth in
                                       Paragraph 6.3.4.2, the first of the equal
                                       and consecutive monthly installment
                                       payments for Incentive Obligations on the
                                       Spacecraft shall be due and payable and
                                       the fifteen year period shall be deemed
                                       to have begun for purposes of this
                                       Paragraph 6.3 and such payments shall
                                       commence (the "Pre-Launch Incentive
                                       Payments"). If upon the Commencement Date
                                       or at any time thereafter, any
                                       Transponder ceases to be a successfully
                                       Operating Transponder or a Payload
                                       becomes a Degraded Payload, then
                                       Contractor shall deliver to Buyer a
                                       refund (without interest) of that portion
                                       of the Pre-Launch Incentive Payment
                                       


                                       24


<PAGE>


                                       attributable to such Transponder or
                                       Payload, taking into account the amount
                                       of such time such Transponder or Payload
                                       met the performance specifications, and
                                       Buyer's subsequent Incentives Obligations
                                       shall be reduced thereafter on a pro rata
                                       basis; provided, if applicable, Buyer
                                       shall receive a credit to the extent of
                                       any Pre-Launch Incentive Payments, to be
                                       applied as an offset against Buyer's
                                       consecutive monthly installment payments
                                       for the Incentives Obligations otherwise
                                       due and payable for the months
                                       immediately following the Commencement
                                       Date.

                           6.3.4.2     Subject to the second sentence below, if
                                       on or before the 121st day following the
                                       Satellite's Delivery Date, the Satellite
                                       has not been Launched, then the first of
                                       the equal and consecutive monthly
                                       installments payments for the Incentives
                                       Obligations on the Spacecraft shall be
                                       due and payable on the earlier to occur
                                       of the Spacecraft's Commencement Date or
                                       the 241st day following such Spacecraft's
                                       Date of Delivery (except that interest on
                                       such Incentives Obligations shall begin
                                       to accrue on the 121st day following the
                                       Delivery Date, as such date may be
                                       modified herein). If, however, the
                                       Spacecraft has not been Launched due
                                       primarily to (1) Contractor's Fault after
                                       Delivery or (2) Contractor's failure to
                                       timely meet the Spacecraft's scheduled
                                       Delivery Date (where such failure in
                                       Delivery is not caused by a Buyer's
                                       Delay) (or a combination of clauses (1)
                                       and (2) immediately above) then the first
                                       of the equal and consecutive monthly
                                       installments of the 


                                       25


<PAGE>


                                       Incentives Obligations on the Spacecraft
                                       shall be due and payable on, and interest
                                       shall not accrue until, the Causation
                                       Date. If upon Spacecraft Commencement, or
                                       at any time thereafter, any Transponder
                                       on the Spacecraft (which has been subject
                                       to a Launch delay under this Paragraph
                                       6.3.4.2) ceases to be a Successfully
                                       Operating Transponder or a Payload
                                       becomes a Degraded Payload, then
                                       Contractor shall deliver to Buyer a
                                       refund (without interest) of that portion
                                       of the Pre-Launch Incentives Payments
                                       attributable to such Transponder or
                                       Payload, taking into account the amount
                                       of time such Transponder or Payload met
                                       the performance specifications, and
                                       Buyer's subsequent Incentives Obligation
                                       for the affected Payload on the
                                       Spacecraft shall be reduced thereafter on
                                       a pro rata basis; provided, however, that
                                       Buyer shall receive a credit to the
                                       extent of any Pre-Launch Incentive
                                       Payments, such credit to be applied as an
                                       offset against Buyer's consecutive
                                       monthly installment payments for the
                                       Incentives Obligations otherwise due and
                                       payable for the months immediately
                                       following the Commencement Date.

                           6.3.4.3     If, for any reason other than primarily
                                       Contractor's Fault, the Spacecraft has
                                       not been Launched within 24 months
                                       following the Spacecraft's Delivery Date,
                                       then the full amount of the Incentives
                                       Obligations (and any Change Order Profit
                                       Component, if applicable) (including
                                       principal and accrued interest, if any)
                                       shall become immediately due and payable
                                       upon the last day 


                                       26


<PAGE>


                                       of such 24th month. If, however, the
                                       Spacecraft is subsequently Launched
                                       within 54 months of the Delivery Date and
                                       any Transponder of the Spacecraft ceases
                                       to be a Successfully Operating
                                       Transponder or a Payload becomes a
                                       Degraded Payload, then Buyer shall be
                                       entitled to a proportionate refund
                                       (without interest) for any Incentives
                                       Obligations (and any Change Order Profit,
                                       if applicable) paid for such Transponder
                                       or Payload, taking into account the
                                       amount of time such Transponder or
                                       Payload met the performance
                                       specifications. If, for any reason, the
                                       Spacecraft has not been Launched prior to
                                       the third anniversary of the Delivery
                                       Date (the "Third Anniversary"), then
                                       Buyer shall have an option (the
                                       "LOPS/MOPS Option"), exercisable in
                                       writing received by Contractor on or
                                       before the Third Anniversary, to extend
                                       its right to utilize the Related Services
                                       for the Spacecraft to the fifth
                                       anniversary of the Delivery Date (the
                                       "Extension Period"). If Buyer does not
                                       timely exercise the LOPS/MOPS Option,
                                       then Contractor shall credit any unused
                                       portion of the Baseline Launch Costs for
                                       the Spacecraft against any due and unpaid
                                       payment obligations of Customer under
                                       this Contract (the "LOPS/MOPS Refund").
                                       If Buyer timely exercises the LOPS/MOPS
                                       Option, then the price associated with
                                       the Related Services (pursuant to
                                       Paragraph 6.3) for the Spacecraft during
                                       the Extension Period, shall be increased
                                       by a [****************************]
                                       beginning on the Third Anniversary. Buyer
                                       shall be obligated to pay such Escalation
                                       Amount within 30 days of receipt


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                                       of invoice from Contractor. In any case,
                                       Contractor's obligation to provide such
                                       services shall terminate on the date
                                       which is fifty-four (54) months (or as
                                       early as thirty-six (36) months) from the
                                       Delivery Date for the Spacecraft. If
                                       Contractor's obligation to provide Launch
                                       and Mission Operations Services is
                                       terminated under the immediately
                                       preceding sentence, then Buyer shall
                                       receive a LOPS/MOPS Credit or LOPS/MOPS
                                       Refund, as applicable.

                           6.3.4.4     If, for any reason, other than
                                       Contractor's Fault, a launch failure
                                       occurs between the time of Launch and the
                                       Commencement Date (or if no Commencement
                                       occurs), then the full amount of the
                                       Incentives Obligations (and any Change
                                       Order Profit Component, if applicable)
                                       (the "Recoverable Amount(s)") shall
                                       become immediately due and payable upon
                                       the date of such launch failure.
                                       Contractor shall be entitled to obtain
                                       payment of such Recoverable Amounts from
                                       the proceeds of the launch insurance
                                       obtained by Buyer and shall be entitled
                                       to a priority in obtaining such proceeds
                                       over Buyer and all other parties or
                                       claims; provided, however, that nothing
                                       herein shall relieve Buyer of its
                                       obligations to pay to Contractor all such
                                       Recoverable Amounts, as set forth herein.
                                       During the six (6) months immediately
                                       following such launch failure, Buyer
                                       shall use best reasonable efforts to
                                       obtain the proceeds of its launch
                                       insurance to pay Contractor the
                                       Recoverable Amounts, hereunder. Provided
                                       further, however, that if Contractor does
                                       not receive all such Recoverable 


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<PAGE>


                                       Amounts from the proceeds of Buyer's
                                       launch insurance within such six (6)
                                       month period, then Buyer shall be
                                       obligated immediately to compensate
                                       Contractor for, and Contractor may also
                                       look to Buyer directly for satisfaction
                                       of, all such Recoverable Amounts. For
                                       purposes of this Paragraph 6.3.4.4,
                                       "Launch" shall mean, with respect to an
                                       Ariane IV Launch Vehicle, the ignition of
                                       the first stage engines of the Launch
                                       Vehicle, if said ignition is followed by
                                       opening of the table clamps with
                                       consequent release of such Launch
                                       Vehicle.


         6.4      Contractor shall not be obligated to deliver the Spacecraft to
                  the Launch Site if there are any outstanding Delinquent
                  Payments owed by Buyer to Contractor with respect to such
                  Spacecraft under this contract one month prior to shipment of
                  such Spacecraft from the Contractor facility. "Delinquent
                  Payments" are defined as those payments not received by
                  Contractor within thirty (30) days of the dates due as defined
                  in Paragraphs 6.2.1 and 6.2.2 above. Once Buyer has paid
                  Contractor for any "Delinquent Payments" and any interest
                  accrued in accordance with Paragraph 6.6 below, Contractor
                  shall use its reasonable best efforts to ship such 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 Buyer of such Delinquent Payments. Buyer will be
                  responsible for and will pay to Contractor any reasonable
                  costs and [***] profit on such costs that Contractor may incur
                  as a result of a delay in delivery due to Buyer's Delinquent
                  Payments. Notwithstanding the foregoing, this Section 6.4
                  shall not relieve Contractor of its obligation to deliver a
                  Spacecraft, and no "Delinquent Payment" shall be deemed to
                  have occurred, due to any non-


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                  payment by Buyer on account of an alleged breach by Contractor
                  or other dispute as to such payment. In such event, Buyer
                  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 33, 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.


         6.5      Invoice


                  6.5.1    Invoices submitted to Buyer for payment shall contain
                           a cross-reference to the Contract number and the date
                           specified in the Payment Plan of Paragraphs 6.3.1.
                           Contractor shall submit one (1) original invoice for
                           the Spacecraft in each instance to:


                           PanAmSat Corporation
                           One Pickwick Plaza
                           Greenwich, CT 06830
                           Fax: (203)622-6664
                           Attention:   Robert Bednarek, Senior Vice President
                                           and Chief Technology Officer
                           cc:          Stephen G. Salem, Senior Counsel
                                        Marty Wolff


                  6.5.2    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 Buyer within
                           thirty (30) days upon receipt of the invoice by
                           Buyer.


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<PAGE>




         6.6      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
                  6.6 shall not apply to any payment made into escrow in
                  accordance with Section 29.4.


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ARTICLE 7.        SPACECRAFT LAUNCH DATE


                  7.1.1    "Launch Date" Defined. The calendar date during which
                           a Launch will occur. The Launch Date shall be
                           notified by Buyer to Contractor 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. As of the Effective
                           Date of this Contract, the Launch Date shall be
                           October 20, 1998, subject to change in accordance
                           with this Article 7.


                  7.1.2    "Launch Window" Defined. A period of time within the
                           Launch Date during which a Launch can occur and meet
                           mission requirements. The Launch Window shall be
                           established by notified by Buyer to Contractor no
                           later than forty-five (45) days prior to the Launch
                           Date and once established, shall become an express
                           term of this Contract.


                  7.1.3    Adjustment of dates. The time periods as delineated
                           in Sections 7.1.1 and 7.1.2 shall be adjusted to
                           reflect applicable launch provider contracts,
                           consistent with ordinary practices of such providers
                           as familiar to the Parties.


         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.


         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.


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<PAGE>


         7.4      If a Spacecraft Launch Date 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, Buyer 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 and a profit rate of [********************]


          7.5     Notwithstanding the foregoing, if a Spacecraft Launch Date 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.


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<PAGE>


ARTICLE 8.        BUYER-FURNISHED ITEMS


8.1      The following facilities, equipment, and services ("Buyer-Furnished
         Items") shall be furnished by Buyer at no cost to Contractor, in a
         timely manner, so as to enable Contractor to perform the work described
         herein.


                  1)       Facilities (buildings, power, phones and data lines)
                           and enumerated services: (i) transportation of a
                           Spacecraft, Contractor related test equipment and
                           personnel within the Launch Site; (ii) storage of a
                           Spacecraft and related test equipment for all force
                           majeure events (which prevent Buyer from supplying
                           Buyer-Furnished Items) and/or launch vehicle delays;
                           (iii) fueling; (iv) photographs; (v) interface
                           hardware at the Launch Site; and (vi) earth station
                           facilities for IOT including appropriate RF
                           facilities, but not specialized test equipment.

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


                  Contractor will provide preliminary requirements of Item 1
                  above to Buyer no later than two (2) months after the
                  Effective Date of this Contract to assist Buyer's compliance
                  with this Article, which shall be consistent with what
                  Contractor has generally required Buyer to secure for previous
                  launches with the same launch provider. Subject to the
                  confidentiality requirements of the applicable agreements,
                  Contractor will be allowed to review the list of basic and
                  optional service which Buyer has procured in Buyer's
                  contract(s) for launch services.


                  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 


                                       34


<PAGE>



                  any excusable delay as defined in Article 12 herein, then
                  Buyer 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 Contract; 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 [*******************] In the
                  event that the Buyer-Furnished Items are not suitable for the
                  intended purpose or are not provided in a timely manner and
                  the Contractor must procure or rent suitable substitutes, and
                  the foregoing process has materially affected Contractor's
                  ability to ship the Spacecraft on or prior to the Shipment
                  Date, the parties agree to adjust the Shipment Date to account
                  for any delay resulting from the non-suitability or non-timely
                  provision of such Buyer-Furnished Items.

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


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                  use of any Buyer's Property, accomplish the following:

                  A.       Establish and maintain inventory records and make
                           such records available for review upon Buyer'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 Buyer'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 Buyer
                  Property without Buyer's prior written authorization.
                  Contractor shall immediately report to Buyer's contract
                  representative the loss of any Buyer 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 Buyer, the Contractor shall perform a physical
                  inventory, adequate for accountability and disposition
                  purposes, of all Buyer's Property applicable to such
                  terminated or completed agreement and shall cause its
                  subcontractors and suppliers at every tier to do likewise.


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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 and
                  contract deliverables meet the requirements of this Contract,
                  at which time Buyer 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, 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 Buyer as
                  provided above. In either case, the Hardware shall be deemed
                  accepted upon failure of Buyer to notify Contractor in writing
                  within the above five (5) business days that it is accepted,
                  rejected or that in Buyer's opinion further corrective action
                  must be taken by the Contractor. In the event that Buyer has
                  not given Preliminary Acceptance of the Spacecraft, Contractor
                  shall not ship the Spacecraft from Contractor's facility
                  without Buyer's prior written consent.

         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 16, Paragraph 16.2
                  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 Launch Insurance
                  Contract or successor contract), which occurs at or after
                  


                                       37


<PAGE>



                  Intentional Ignition. Buyer 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 Buyer 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 16 herein, entitled "Spacecraft Warranty," or such
                  other event mutually agreed upon between the Parties.



         9.5      Non-Conforming Products.



                           9.5.1    If (i) the Spacecraft does not meet its
                                    weight requirements and (ii) Buyer will be
                                    required to pay for additional weight from
                                    the launch provider in order to achieve the
                                    Specified Operational Lifetime without
                                    delaying the placing of the Spacecraft in
                                    its orbital location by more than fifteen
                                    (15) additional days, then Contractor shall
                                    reimburse Buyer for such additional payments
                                    up to [********]



                           9.5.2    Any Preliminary Acceptance or Final
                                    Acceptance by Buyer of a Spacecraft that
                                    does not conform to the requirements of this
                                    Contract (whether or not related to weight)
                                    shall not affect the Parties rights and
                                    obligations under Paragraph 6.3 ("Incentive
                                    Obligations") with respect to the Spacecraft
                                    or other deliverable that does not perform
                                    to the specifications of this Contract.


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ARTICLE 10.                ACCESS TO WORK IN PROCESS


         10.1       Contractor shall afford Buyer 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) Contractor'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 Buyer access to work being
                    performed pursuant to this Contract in subcontractor's
                    plants in the company of Contractor's representatives.


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


           10.3     Buyer 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 Contractor, Contractor shall take all
                    reasonable steps to secure Buyer's access to the
                    subcontractor's facility or facilities. Buyer'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.


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<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 launch of more than [**************
                    ****]; or (ii) Contractor fails to ship the Spacecraft on or
                    before the Shipment Date other than due to the primary fault
                    of Buyer or a Force Majeure Event and such failure to ship
                    results in a delay of launch of the Spacecraft of more than
                    {*************] days. Subsequent to the issuance of said
                    notice, the Buyer may terminate this Contract in whole and
                    thereafter elect remedies as identified in Paragraph 11.2
                    below. [****************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    **********]


         11.2       If Buyer terminates this Contract 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
                    which ultimately would have been deliverable 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 [*******************************];
                    or (ii) receive a refund of all payments submitted to
                    Contractor by the Buyer for performance of 


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


                                       40


<PAGE>


                    this Contract for the portion terminated by Buyer, plus
                    [***********************************************************
                    ************************************************************
                    ************************************************************
                    ***********************************] and Contractor shall
                    retain title and possession to all terminated Hardware which
                    ultimately would have been deliverable by Contractor.


         11.3       Except as expressly provided in Paragraph 11.4, there will
                    be no termination for default after Intentional Ignition of
                    the Launch Vehicle for the Spacecraft.


         11.4       In the event that the delivery of the Certain Documentation
                    listed on Exhibit E is delayed (other than due to the
                    primary fault of Buyer or Force Majeure Event) for more than
                    [**********************************************************]
                    Buyer may issue a written notice of default to Contractor
                    and may thereafter terminate the Contract in part as to such
                    Certain Documentation only. If Buyer elects to terminate
                    this Contract in part as to such Certain Documentation, then
                    Buyer shall be relieved of payment of [*********************
                    ************************************************************
                    ************] (or any such amount already paid shall be
                    refunded), and Contractor shall pay Buyer an additional
                    [*********] for reprocurement costs.


         11.5       If, after termination of this Contract (or portion thereof)
                    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," the rights and obligations of the
                    Parties shall be the same as if notice of termination had
                    been issued pursuant to Article 14, entitled "Termination
                    for Convenience," or pursuant to Article 12, Paragraph 


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


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<PAGE>


                    12.4, as the case may be.


         11.6       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.

         11.7       In the event Buyer elects the remedy set forth in clause
                    (ii) of Paragraph 11.2, Contractor shall pay such amount as
                    follows: [****************************] of the total amount
                    to be paid by Contractor pursuant to such clause shall be
                    paid within thirty (30) days of the effective date of
                    termination; and (b) the remaining [********************] of
                    the total amount to be paid by Contractor pursuant to such
                    clause shall be paid upon the first to occur of (I) [*******
                    ***************************************************] or (II)
                    [***********************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ***************************************]


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


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<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 [**********] days, 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 Contract.


         12.3       Notwithstanding the foregoing, if the Launch Date for the
                    Spacecraft defined in Paragraph 7.1 herein is delayed due to
                    a Force Majeure event affecting Buyer's ability to furnish
                    any item to be supplied by it under Article 8 hereof, Buyer
                    shall reimburse Contractor for all reasonable expenses
                    incurred as a result, including without limitation expenses
                    for: support personnel standby; extra travel expenses; and
                    transport termination or rescheduling fees.


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


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<PAGE>


         12.4       Notwithstanding anything herein to the contrary, in the
                    event that a Force Majeure Event occurs and Contractor's
                    performance of its obligations as to the Spacecraft is
                    delayed or prevented for a period of [**************] or
                    longer, then Buyer shall have the right to either: (i)
                    terminate this Contract with respect to the Spacecraft upon
                    thirty (30) days written notice or (ii) [******************]
                    ************************************************************
                    ****************] The period of such delay shall be measured
                    from the initial occurrence of such Force Majeure Event or
                    Contractor fault (whichever occurred first). Notwithstanding
                    the foregoing, Buyer agrees that [**************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    *****************]

         12.5       In the event of a termination under clause (i) of Paragraph
                    12.4, Buyer shall be entitled to a refund equal to [********
                    ************************************************************
                    *******************************************************] and
                    Contractor shall retain title to all Deliverables produced
                    by Contractor under this Contract with respect to the
                    Spacecraft. For purposes of this Section 12.4, [************
                    ************************************************************
                    ************************************************************
                    ************************************************************
                    ******************]

         12.6       In the event of [********************************] under
                    clause (ii) of 


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


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<PAGE>


                    Paragraph 12.4, the price (including any
                    profit component) [***************************] shall be 
                    paid as follows:

                         [******************************************************
                              **************************************************
                              **************]

                        [*******************************************************
                              **************************************************
                              **************************************************
                              ******************************]

                       [********************************************************
                              **************************************************
                              **************************************************
                              **************************************************
                              **************]

                        [*******************************************************
                              **************************************************
                              **************************************************
                              **********************]

                   Buyer and Contractor agree to negotiate in good faith the
                   schedule for delivery of the Spacecraft [**********].


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


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<PAGE>


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 27, "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.


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<PAGE>


ARTICLE 14.                TERMINATION FOR CONVENIENCE


         14.1     Buyer may terminate all or any portion of the work to be
                  performed pursuant to this Contract upon five (5) days written
                  notice to Contractor. Buyer shall pay Contractor, in the event
                  of such termination, termination liability equaling all Costs
                  (as defined in Paragraph 14.5 below) expended by Contractor
                  for all work done up to the date of termination on the
                  terminated portion of the Contract, settlements with
                  subcontractors for work performed prior to termination on the
                  terminated portion of the Contract, and Contractor's
                  reasonable costs related to termination which would not
                  otherwise have been incurred plus a [****] profit for the
                  applicable termination costs and charges, but in no event more
                  than the maximum termination liability that is set forth in
                  Exhibit F hereto, as of date of termination, less amounts
                  previously paid by Buyer to Contractor pursuant to the Payment
                  Article; provided that the Parties agree that Exhibit F sets
                  forth the maximum termination liability if the entire Contract
                  is terminated under this Article 14, and that the maximum
                  termination liability shall be pro rated appropriately in the
                  event of a termination under this Article 14 of less than all
                  of the work to be performed by Contractor. Buyer's termination
                  liability shall also include Costs incurred by Contractor for
                  the parts of the Base Spacecraft incorporated into the PAS 6B
                  Spacecraft, but shall exclude any amounts retained or received
                  by Contractor (whether for Costs, profits or otherwise) in
                  connection with the termination of its agreement with a third
                  party for the construction and delivery of the Base
                  Spacecraft. Buyer shall pay the unpaid balance of such
                  termination liability within thirty (30) days of Buyer's
                  receipt of certification of Contractor's costs. In the event
                  that Buyer has paid to Contractor any amount in excess of such
                  termination liability, then Contractor shall refund such
                  excess amount to Buyer within 


[***]     Filed separately with the Commission pursuant to a request for 
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<PAGE>


                  thirty (30) days of certification of costs. In no event shall
                  the termination liability exceed either the Contract price
                  defined in Article 5 herein or the amount specified in Exhibit
                  F.


         14.2     In the event of termination by Buyer hereunder, and upon
                  payment in full of all amount due (if any) under 14.1 above
                  (or, if any amount is in dispute, payment of such amount into
                  escrow in the manner set forth in Paragraph 6.4), all tangible
                  work in process inventories generated under this Contract,
                  with respect to the terminated work, shall become the property
                  of Buyer. Buyer shall direct disposition of such property
                  within sixty (60) days from date of termination (which
                  disposition may include requesting Contractor to undertake
                  mitigation efforts in accordance with Paragraph 14.4 below) or
                  such other date as agreed to by the Parties. Final acceptance
                  and transfer of title for all tangible work in process
                  inventories to be delivered to the Buyer in the event of
                  termination shall be the subject of separate negotiations
                  between Buyer and Contractor and shall be subject to
                  applicable U.S. Government Export Regulations. The expense of
                  disposition shall be borne by Buyer.



         14.3     In the event of partial termination, the Contract Price shall
                  be adjusted accordingly.



         14.4     At Buyer's request, Contractor shall use reasonable best
                  efforts to identify an alternate use (i.e. sale to third
                  Parties and/or internal utilization) for any Hardware affected
                  by a termination under this Article 14, the Contractor shall
                  submit a proposal to Buyer, which, at a minimum, defines (i)
                  the applicable Hardware, (ii) the intended use of the
                  Hardware, (iii) the original acquisition cost/value of the
                  applicable Hardware, as available, and (iv) the sale/transfer
                  payment(s) to be received by Buyer. Contractor 


                                       48


<PAGE>


                  shall use its reasonable best efforts to obtain fair market
                  value for the applicable Hardware. Buyer, at its sole option,
                  may accept or reject the proposal submitted by Contractor. In
                  the event that Buyer accepts the proposal submitted by
                  Contractor, payment by Contractor to Buyer of the agreed upon
                  payment value shall occur within thirty (30) days of the
                  sale/transfer of the applicable Hardware, or such other
                  payment period as mutually accepted between the Parties. If
                  the Contractor's proposal is rejected by Buyer, if Contractor
                  is unable to find any alternative use within two (2) years of
                  being requested to do so or if Buyer so directs, then Title to
                  the applicable Hardware shall be vested as stated in Paragraph
                  14.2 above.



                  14.5 As used in this Article 14, Contractor's "Costs" shall
                  mean costs actually incurred by Contractor in performing its
                  obligations hereunder (including G&A costs not to exceed
                  [*****************] of such costs), all such costs to be
                  determined in accordance with Contractor's normal accounting
                  practices. Contractor shall provide to Buyer an invoice
                  certified by the Chief Financial Officer of the company
                  stating Contractor claim for costs properly includes only the
                  costs specified in this paragraph. In the event Buyer desires
                  independent verification of claim, Buyer may request to have
                  independent certified public accountants (CPA) audit costs
                  incurred by Contractor and report to the Parties. The CPA to
                  perform such audit shall be selected by Buyer, subject to the
                  approval of Contractor, which approval shall not be
                  unreasonably withheld (and in any event shall not be withheld
                  if Buyer selects a "Big Six" accounting firm). Such audit
                  shall be at Buyer's expense unless such audit shows
                  Contractor's costs to have been overstated (in which event
                  Contractor shall bear the audit expense). Such audit shall
                  constitute a final determination of actual costs
                  notwithstanding the provision of Article 33; provided that, if
                  the costs


[***]     Filed separately with the Commission pursuant to a request for 
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                                       49


<PAGE>


                  determined by such report exceed the amount of Contractor's
                  termination claim, Buyer shall only be obliged to pay the
                  amount of Contractor's termination claim.



         14.6     Contractor shall use its reasonable best efforts to include in
                  its subcontracts for work hereunder on terms that will enable
                  Contractor to terminate such subcontracts in a manner
                  consistent with this Article 14.


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<PAGE>


ARTICLE 15.            TITLE AND RISK OF LOSS


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


                  15.1.1            Risk of loss of the Spacecraft and title
                                    shall pass from Contractor to Buyer 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 Launch Insurance
                                    Contract or successor contract) which occurs
                                    at or after Intentional Ignition.


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


                  15.1.3            Notwithstanding Paragraph 15.1.2 above, upon
                                    removal of the Spacecraft from storage, the
                                    Contractor shall not assume risk of loss
                                    relative to a Battery which Buyer directs
                                    Contractor to replace after the five-year
                                    storage period which disqualifies the
                                    battery for a 15-year mission. In that
                                    event, Article 30 herein entitled "Effects
                                    of Storage on Batteries," shall apply.


                  15.1.4            "Risk of Loss" for purposes of this Article
                                    15 is limited to the responsibility and
                                    liability for a Partial Failure, Total
                                    Failure or Total Constructive Failure (as
                                    each such term is 


                                       51


<PAGE>



                                    as defined in the applicable Launch
                                    Insurance Contract or successor contract).
                                    Responsibility and liability for the
                                    Spacecraft prior to intentional ignition is
                                    with the Contractor.

         15.2     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 16 shall apply.


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


                  15.3.1     "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
                             Buyer'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.


                                       52


<PAGE>


                             (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.


                  15.3.2     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.


         15.4     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-


                                       53


<PAGE>


                             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.


                                       54


<PAGE>


ARTICLE 16.                SPACECRAFT WARRANTY


         16.1     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.


         16.2     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.


         16.3     Buyer 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 Buyer, Buyer may then, by
                  contract or otherwise, correct or replace such defective goods
                  and equitably adjust the price.


[***]     Filed separately with the Commission pursuant to a request for 
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<PAGE>


         16.4     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 16.2) of the
                  Launch Vehicle.


         16.5     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 A SPACECRAFT THAT
                  IS FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP AS
                  SET FORTH IN PARAGRAPH 16.1 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 A SPACECRAFT AFTER INTENTIONAL IGNITION
                  OTHER THAN AS EXPRESSLY PROVIDED IN THIS CONTRACT.


         16.6     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.


                                       56


<PAGE>




ARTICLE 17.                INDEMNIFICATION


         17.1       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 17 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.


         17.2       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 16.2), and
                    Buyer shall obtain waivers of 


                                       57


<PAGE>


                    subrogation rights from Buyer's insurers against Contractor,
                    and affiliates and subcontractors of Contractor.


                                       58


<PAGE>


ARTICLE 18.          SPACECRAFT NOT LAUNCHED WITHIN SIX MONTHS AFTER ACCEPTANCE


         18.1       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 the 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 16 entitled, "Spacecraft
                    Warranty," shall be at Contractor's expense, including
                    Spacecraft transit insurance.


         18.2       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 the Spacecraft
                    shall be returned, at Buyer'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.


         18.3       If the Spacecraft is returned to Contractor's facility for
                    inspection and refurbishment per the terms of Paragraph 18.2
                    above, all charges to return the Spacecraft to the Launch
                    Site shall be borne by Buyer.


         18.4       If the Spacecraft has not been launched within [**********
                    ****] after its preliminary Acceptance, neither Party shall
                    be further obligated to the other with respect to the
                    Spacecraft. Disposition of the Spacecraft shall 


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<PAGE>


                    be at the option of Buyer with costs of such disposition to
                    be borne by Buyer.


                                       60


<PAGE>




ARTICLE 19.                PATENT/COPYRIGHT INDEMNITY


         19.1       Contractor shall indemnify and hold Buyer harmless against
                    any liability or expense as a result of claims, actions, or
                    proceedings against Buyer 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 Buyer pursuant to this Contract as set forth
                    below.


         19.2       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 Buyer, 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 Buyer and given authority and such assistance and
                    information as is available to Buyer for resisting such
                    request or for the defense of such claim, action or
                    proceeding. Any such assistance or information which is
                    furnished by Buyer at the written request of Contractor is
                    to be at Contractor's expense.


         19.3       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 


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                    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 liable to
                    Buyer for Buyer'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 [****************************************] for
                    each Spacecraft. The existence of one or more claims,
                    actions, proceedings or lawsuits shall not extend such
                    amount.


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


         19.5       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.


         19.6       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.


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ARTICLE 20.                RIGHTS IN INVENTIONS


         20.1       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.


         20.2       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.


                    20.3.1       In the case of joint Program 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 Program
                                 Inventions, as well as in and to patent
                                 applications and patents thereon in all
                                 countries.

                    20.3.2       In the case of such joint Program 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.


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                    20.3.3       The expenses for preparing, filing and securing
                                 each joint Program 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 Program
                                 Invention application for patent is filed by
                                 either Party in a 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.

         20.4       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 


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                    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.

         20.5       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.


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ARTICLE 21.                INTELLECTUAL PROPERTY RIGHTS


         Except as provided in Article 20, 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.


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ARTICLE 22.                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.

         22.1     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;


         22.2     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 or
                  except as otherwise permitted in this Article 22;


         22.3     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;


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


                  22.4.1     Such data and information are to the receiving
                             Party or otherwise publicly available prior to its
                             receipt by the receiving Party 


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                             without the default of the receiving Party; or


                  22.4.2     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


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


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


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


                  22.4.6     Such data and information that a Party may be
                             required by law or government regulation or order
                             to disclose.


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


         22.5     Providing Buyer shall obtain from the recipient a
                  nondisclosure agreement at least as restrictive as this
                  Article 22, Buyer may disclose any proprietary information on
                  a need to know basis to its customer(s), contractors,
                  insurers, agents, counsel and actual or prospective lenders,
                  investors, or successors in interest.


         22.6     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 


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                  copyright legend is retained on the material.


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ARTICLE 23.                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, which contains new information not previously disclosed as
         permitted under the Contract, 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 and
         the other Party shall be required to respond within said time period.


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ARTICLE 24.                TAXES


         24.1     The price which shall be paid by Buyer for Spacecraft,
                  Documentation and Related Services [******************
                  *****************] any U.S. (federal, state or local) sales or
                  use taxes, or fees or other U.S. taxes against real or
                  personal property, however designated, which may be levied or
                  assessed against Contractor. Buyer 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 Buyer. Buyer shall be responsible for any
                  inventory taxes, state taxes or any other taxes that are
                  assessed to Contractor as a result of storage of a Spacecraft
                  in accordance with Article 32.


         24.2     In the event Contractor in the performance of this Contract is
                  required to pay non-U.S. 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 a Spacecraft), then Buyer will
                  reimburse Contractor for such Assessments within thirty (30)
                  days of written notification by Contractor of payment;
                  provided, however that, Contractor shall used its reasonable
                  best efforts to obtain waivers, exemptions and/or relief from
                  such Assessments when practicable, and Buyer 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.


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


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ARTICLE 25.                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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ARTICLE 26.                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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ARTICLE 27.                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.       PanAmSat International Systems, Inc.
                  One Pickwick Plaza
                  Greenwich, Connecticut 06830

                  Attention:        Robert Bednarek, Senior Vice President and
                                               Chief Technology Officer
                          cc:       Stephen G. Salem, Senior Counsel
                          and
                          cc:       Phil Rubin
                                    Jim Frownfelter
                                    Rubin & Associates
                                    1350 Connecticut Avenue, Suite 610
                                    Washington, DC 20036

                  Authorized Representative(s):   Frederick Landman,
                                                  President and Chief Executive
                                                  Officer

                                                  Robert Bednarek,
                                                  Senior Vice President and
                                                  Chief Technology Officer

         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


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<PAGE>



                          cc:        Bernie Bienstock, Program Manager

                  Authorized Representative(s):    Harold McDonnell
                                                   Vice President

         or in each case as a Party may direct by notice to the other Party in
         accordance with this Article 27.


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ARTICLE 28.                INTEGRATION


         This document, with Exhibits, constitutes the entire understanding
         between the Parties with respect to the subject matter of this Contract
         and supersedes all previous oral and/or written negotiations,
         commitments, and understandings of the Parties (and/or their
         affiliates), including without limitation that certain Letter Agreement
         dated as of December 24, 1997, as supplemented by the supplemental
         letter agreement thereto dated February 9, 1998.


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ARTICLE 29.                CHANGES


         Subject to Paragraphs 4.2.1 and 5.3 and Article 38:


         29.1     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 [********] 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.


         29.2     Buyer shall notify Contractor in writing within ten (10) days
                  after receipt of the requested change and price adjustment
                  (downward or upward), 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 Contract, 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 


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


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<PAGE>


                  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
                  adjustment, and the issue of price adjustment shall be
                  submitted for resolution by arbitration in accordance with the
                  provisions of Paragraph 33.2 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 into an escrow account
                  in accordance with Paragraph 29.4 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 29.4 hereof.


         29.3     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 [***
                  ****] 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 (downward or upward), if 


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


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                  any, (the "Change Order Offer"). Buyer shall notify Contractor
                  in writing, within ten (10) 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 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 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 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 33.2 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 29.4 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 29.4 hereof. The
                  dispute shall then be resolved by arbitration under the
                  provisions of Article 33, entitled "Disputes."


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         29.4     Escrow Provisions - Disputed Amounts


                  Disputed amounts with respect to any change under this Article
                  29 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 33, 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.


         29.5     Determination of Price Adjustment  of Change


                  The Parties agree that the change order price adjustment
                  (downward or upward) for any change shall be equal to the sum
                  of (i) the "Change Order Cost" plus (ii) the "Change Order
                  Profit Component". The "Change Order Cost" shall mean those
                  additional or reduced recurring and non-recurring costs to
                  Contractor to implement such change (or which are not required
                  to be implemented), as determined in accordance with
                  Contractor's normal accounting practices, including those
                  general and administrative costs ("G&A Costs") of such change,
                  as determined in accordance with Contractor's normal
                  accounting practices, [*********************************] of
                  Contractor's costs for such change. The "Change Order Profit
                  Component" shall be equal to [**********************] of the
                  Change Order Cost. The Total Change Order Cost shall be
                  payable in accordance with the payment plan agreed by the
                  Parties or, if applicable, by the Arbitrator. Unless otherwise
                  agreed by the Parties, the Change Order Profit Component shall
                  be payable in equal monthly installments at the same time as
                  the monthly installments of Incentives Obligations; provided,


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


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                  however, that payment of the Change Order Profit Component
                  shall not be conditioned upon performance of the Spacecraft or
                  any component thereof.


         29.6     If Contractor makes any improvements to the generic HS-601HP
                  Spacecraft design, then Contractor shall provide reports to
                  Buyer concerning such improvements. Buyer may request that any
                  improvement to the HS-601HP Spacecraft design reported to
                  Buyer be incorporated into the Spacecraft, and such
                  improvements shall be considered a Change and shall be dealt
                  with in accordance with the Change Order process in this
                  Article 29. The foregoing shall not apply to any changes to
                  the generic HS-601HP Spacecraft design, to correct or mitigate
                  the impact of anomalies with respect to such design, made by
                  Contractor on its own accord or as necessary in Contractor's
                  reasonable engineering judgment, which changes shall not
                  relieve Contractor of its obligations to meet the technical
                  specifications for the Spacecraft, as set forth in Exhibit B,
                  hereto. Contractor shall notify Buyer on a periodic basis or
                  as requested by Buyer from time to time of any anomalies with
                  respect to such HS-601HP Spacecraft design.


         29.7     The Change Order Price shall be allocated and payable as
                  follows: The Change Order Profit Component shall be an
                  independent payment obligation not contingent upon performance
                  of the Spacecraft and shall be payable at the same time as the
                  monthly installments of the Incentives Obligations for the
                  Spacecraft as set forth in Paragraph 6.3.4 and, in any case,
                  the then-remaining Change Order Profit Component for the
                  Spacecraft shall be paid in full with the last Incentives
                  Obligations Payment. The Total Change Order Cost shall be
                  payable as agreed by the Parties.


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         29.8     To the extent that (i) any change agreed under this Article 29
                  deletes any Hardware already produced by Contractor, then the
                  provisions of Paragraphs 14.2 and 14.4 shall apply to the
                  disposition of such Hardware.


         29.9     The Spacecraft shall be designed to support the Launch Vehicle
                  interface requirements issued by the Launch Vehicle provider
                  (as to Ariane, Proton, Delta and Atlas launch vehicles)
                  existing at the time of the date required of any change in
                  Launch Vehicle designation under Paragraph 4.2.1. If there are
                  any changes to such interface requirements thereafter, then
                  any such change shall be deemed to be a Change Order Request
                  by Buyer, and the Change Order process set forth in Section
                  29.3 shall apply.


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 ARTICLE 30.               EFFECTS OF STORAGE ON BATTERIES


         For Spacecraft batteries to provide the required minimum fifteen (15)
         years of in-orbit services per Exhibit B, 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 Buyer upon its election to either:
         (i) install replacement batteries or (ii) recondition batteries, so
         directs Contractor, Buyer 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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ARTICLE 31.                INTER-PARTY WAIVER OF LIABILITY


         31.1     Prior to the time Buyer and the Contractor enter the Launch
                  Integration Facility and/or Launch Site, they each agree that
                  they will not make a claim against each other for an event
                  that occurs at the Launch Integration Facility and/or 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.
                  Buyer 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 the Spacecraft. Such comparable clause shall
                  include a requirement to flow the clause down to lower-tier
                  contractors.


         31.2     Notwithstanding any other provisions of this Contract, prior
                  to the time any Party, associated with launch activities at
                  the Launch Integration Facility and/or Launch Site, shall
                  enter the Launch Integration Facility and/or Launch Site, such
                  Parties shall be required to sign an Inter-Party Waiver of
                  Liability consistent with that between Buyer and the
                  Contractor as incorporated herein under Paragraph 31.1 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 the
                  Spacecraft (for which they have control or privity of Contract
                  with hereunder) have executed said Inter-Party Waiver of
                  Liability.


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ARTICLE 32.                SPACECRAFT STORAGE


         32.1     Buyer may, at its option, order Contractor to store, in
                  accordance with the provisions of Exhibit B 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. Buyer shall
                  provide written notice to the Contractor not later than six
                  (6) months prior to the scheduled delivery of the 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 the 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.


         32.2     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.


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ARTICLE 33.                DISPUTES


         33.1     Disputes


                  33.1.1     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.


         33.2     Arbitration of Disputes


                  33.2.1     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 33.1 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 33
                             shall be the Parties' exclusive remedy.


                                       86


<PAGE>


                  33.2.2     Administration and Rules. Arbitration proceedings
                             in connection with the Contract 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 Contract. With respect to the
                             selection of arbitrators, arbitration proceedings
                             in connection with this Contract 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.


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


                  33.2.4     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.


                  33.2.5     Award and Judgment. The arbitrators shall have no
                             authority to 


                                       87


<PAGE>


                             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
                             Contract. 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.

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


                  33.2.7     Fee and Expenses. All fees and expenses of any
                             arbitration proceedings in connection with this
                             Contract 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.


                  33.2.8     Performance. Contractor and Buyer shall continue
                             with performance under this Contract during any
                             disagreement, negotiation, or arbitration.


                                       88


<PAGE>


ARTICLE 34.                ASSIGNMENT


34.1     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 addition,
         notwithstanding anything in this Article 34 to the contrary, the
         consent of Contractor shall not be required for, and Paragraph 34.2
         shall not apply to any assignment by Buyer of its rights, duties and/or
         obligations hereunder as security for any indebtedness of Buyer or its
         subsidiaries or affiliates.

         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 


                                       89


<PAGE>


         that directly, or indirectly through one or more intermediaries,
         controls, or is controlled by, or is under common control with, the
         person specified.

34.2     The Parties agree that in the event that the ownership or control of
         Buyer or Contractor 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.

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


                                       90


<PAGE>


ARTICLE 35.                LIMITATION OF LIABILITY


35.1     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.

35.2     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 Contract. This Article shall survive the
         expiration or termination of this Contract for whatever cause.


                                       91


<PAGE>


ARTICLE 36.       NO THIRD PARTY AGREEMENT OR RIGHTS

36.1     Contractor represents and warrants that: (i) Contractor has terminated
         the agreement between Contractor and a third party for construction and
         delivery of the spacecraft (the "Base Spacecraft") from which PAS 6B
         will now be built; and (ii) neither Contractor nor such third party
         have any continuing rights or obligations with respect to PAS 6B or the
         Base Spacecraft (or otherwise arising under such terminated agreement).
         Contractor agrees to indemnify Buyer for, and hold Buyer harmless from,
         any and all liability, loss, claim or damage to which Buyer or its
         affiliates (or any director, officer, employee or agent of Buyer or one
         of its affiliates) may become subject, arising from any claim by such
         third party or any breach of the representations and warranties made by
         Contractor in this Article 36.

36.2     The provisions of this Contract are for the benefit of only the parties
         hereto, and no third party may seek to enforce, or benefit from, the
         terms and conditions of this Contract, other than as expressly provided
         in the immediately following sentence. The parties agree and
         acknowledge that (i) the first two sentences of Paragraph 14.4, and
         Contractor's obligation to make payment to Buyer in the event that
         Buyer accepts Contractor's proposal as provided in such Paragraph 14.4,
         are for the benefit of Buyer and of Buyer's customers NetSat ServiAos
         Ltda. ("NetSat") and Multi-Country Partners GP ("Multi-Country") and
         (ii) each of NetSat and Multi-Country shall have the right to enforce,
         as a third party beneficiary, the obligations of Contractor under the
         first two sentences of Paragraph 14.4, and Contractor's obligation to
         make payment to Buyer in the event that Buyer accepts Contractor's
         proposal as provided in such Paragraph 14.4, directly against
         Contractor, either in an action brought solely by such party or in a
         joint action with each other and/or with Buyer.


                                       92


<PAGE>


36.3     This Article 36 shall survive delivery of the Spacecraft and the
         Documentation, the performance of the Related Services and any
         termination of this Contract.


                                       93


<PAGE>


ARTICLE 37.                LIQUIDATED DAMAGES FOR LATE PERFORMANCE



37.1     In the event that the launch of the Spacecraft is delayed due to the
         fault of Contractor (and/or Contractor's subcontractors or suppliers)
         or the Spacecraft is not shipped on or prior to the Shipment Date in
         accordance with the requirements of this Contract and the Exhibits
         hereto, Contractor shall pay to Buyer liquidated damages as follows:


                  37.1.1   For [************************] of delay, Contractor
                           shall [**************************]



                  37.1.2   For the next [**************] of delay, Contractor
                           shall [**********************************************
                           *****************************************************
                           ******************************]



37.2     Contractor shall pay to Buyer the liquidated damages owed pursuant to
         Paragraphs 37.1 within thirty (30) days of invoice from Buyer.



37.3     The Parties understand and agree that the liquidated damages provided
         under this Article 37 shall be in lieu of all other remedies of any
         kind except for Buyer's rights and remedies under Articles 11 and 14.
         The amounts presented in Paragraph 37.1 shall constitute liquidated
         damages for such late shipment and shall not constitute a penalty. The
         Parties acknowledge and agree that such liquidated damages are believed
         to represent a genuine estimate of the losses that would be suffered by
         reason of any such delay (which losses would be difficult or impossible
         to calculate with certainty).


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


                                       94


<PAGE>


ARTICLE 38.                CORRECTIVE MEASURES; OPERATIONAL   DEFICIENCIES



38.1     Without limiting the obligations of Contractor under other provisions
         of this Contract, if the data available from another satellite
         manufactured or under manufacture or design by Contractor (a
         "Contractor Satellite") indicates that there is or may be a material
         deficiency in the design or manufacture of such Contractor Satellite
         which, in the reasonable opinion of Contractor, will or may adversely
         affect the Spacecraft produced under this Contract, or the operations
         of such Spacecraft, then Contractor shall notify Buyer of such any such
         material deficiency. Contractor shall promptly take appropriate
         corrective measures, at Contractor's expense, with respect to the
         Spacecraft so as to satisfactorily eliminate from such Spacecraft prior
         to its shipment all the material deficiencies discovered in Contractor
         Satellite(s), subject to the provisions of Paragraph 38.5.



38.2     In the event that the corrective measures performed pursuant to this
         Article 38 cause a delay, then: (i) Contractor shall [*****************
         ****************************] in accordance with Paragraph 4.1; (ii)
         the time periods provided in Paragraph 5.5 and 37.1 [***************
         ********] and (iii) Buyer and Contractor shall discuss the impact (if
         any) to the construction and delivery of the Spacecraft.



38.3     If Contractor, in performing corrective measures in accordance with
         this Article 38, replaces any equipment or part determined to be
         deficient, such deficient equipment or part shall remain or become the
         property of Contractor.



38.4     Contractor shall disclose to Buyer sufficient technical and operational
         information regarding a material deficiency [*******************
         *********] to enable Buyer to make an informed decision regarding the
         taking of corrective measures. 


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


                                       95


<PAGE>


         Notwithstanding the foregoing, Contractor shall not be obligated by
         this Article 38 to disclose the identity (or any identifying
         information) of any such satellite, or the owners or customers of such
         Contractor Satellite, on which a material deficiency is discovered.



38.5     Contractor shall be obligated to notify Buyer if Contractor proposes to
         resolve technical deficiencies (arising during the design and/or
         manufacturing process of the Spacecraft) through the imposition of
         operational constraints. The Parties agree promptly to enter into good
         faith negotiations to resolve any such deficiency and, if appropriate,
         agree to adjust equitably the Contract Price and/or schedule, subject
         to Paragraph 38.2. In the event that the Parties cannot reach an
         agreement within five (5) business days as to the resolution of such
         deficiency or its adjustment (if any) to Contract Price and/or
         schedule, then the unresolved issues shall be submitted to the
         Contractor's and Buyer's senior executives for resolution. If such
         senior executives cannot reach agreement within ten (10) business days
         thereafter, then the remaining unresolved issues shall be submitted for
         resolution by arbitration pursuant to Paragraph 33.2.


                                       96


<PAGE>


ARTICLE 39.                REPLACEMENT SPACECRAFT



39.1     Buyer shall have the right to purchase a replacement spacecraft ("PAS
         6C") for PAS 6B in the event that PAS 6B suffers a launch failure
         (including any total or constructive total loss that occurs prior to
         the placement of PAS 6B into commercial operations). PAS 6C shall have
         substantially the same configuration and performance of PAS 6B. If
         Buyer orders PAS 6C, the price for such spacecraft (and its Related
         Services and Documentation) shall [*******************************
         ***********************] which shall include as a baseline launch on an
         Ariane Launch Vehicle, and Contractor shall construct and deliver PAS
         6C and Documentation, and shall perform the required Related Services,
         to support a launch of PAS 6C within twelve (12) months from written
         direction from Buyer for the order of PAS 6C. Except as expressly
         specified in this Article, the terms and conditions of this Contract
         shall apply in context to PAS 6C if ordered under this Article. PAS 6C
         may be ordered at any time through one hundred twenty (120) days after
         the launch of PAS 6B. Attached as Exhibit H hereto is a payment plan
         for PAS 6C based upon a price of [*************]



39.2     In order to have the right to order PAS 6C in accordance with Paragraph
         39.1, Buyer shall direct Contractor to purchase long lead items for PAS
         6C by written notice to Contractor no later than April 20, 1998;
         provided, that if, prior to April 20, 1998, the Launch Date has been
         revised from October 20, 1998 in accordance with the terms of this
         Contract, then such written notice shall be required no later than six
         (6) months prior to such revised Launch Date. If Buyer provides such
         written notice, then Contractor shall purchase long lead items and take
         such other steps as may be required to enable Contractor to have PAS 6C
         ready to be launched within twelve (12) months of the PAS 6B launch
         failure. The price for the long lead items shall be [**************
         **********************] payable 


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


                                       97


<PAGE>


         in accordance with the following payment schedule:


                                  [***********]

                      [**********************************]

               --------------------------------------------------
                                                      [*****]
                              [****]                [**********]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------
                                [*]                     [***]
               --------------------------------------------------



39.3     If Buyer has purchased long lead items in accordance with Paragraph
         39.2, then, within one hundred twenty (120) days of the successful
         launch of PAS 6B, Buyer shall direct disposition of such long lead
         items either: (a) to build PAS 6C at the same price for launch within
         twelve (12) months of such direction; or (b) direct the disposition of
         such long lead items pursuant to Paragraphs 14.2 and 14.5.


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


                                       98


<PAGE>


ARTICLE 40.                INDEX OF DEFINED TERMS



         Each of the following capitalized terms has the meaning ascribed to
         such term in the applicable Paragraph.


           ----------------------------------------------------------
                    Defined Terms                  Paragraph
           ----------------------------------------------------------
                      Affiliate                       34
           ----------------------------------------------------------
                     Assessments                      24.2
           ----------------------------------------------------------
                Authorized Representations            27
           ----------------------------------------------------------
                 Base Spacecraft                      36
           ----------------------------------------------------------
                      Buyer                        Introduction
           ----------------------------------------------------------
              Buyer-Furnished Item                    8.1
           ----------------------------------------------------------
               Calculated Operational                 6.3.1.5
                    Lifetime
           ----------------------------------------------------------
              Certain Documentation                 Exhibit E
           ----------------------------------------------------------
                Change Order Cost                     29.5
           ----------------------------------------------------------
               Change Order Offer                     29.3
           ----------------------------------------------------------
               Change Order Profit Component          29.5
           ----------------------------------------------------------
                 Change Order Request                 29.3
           ----------------------------------------------------------
                  Change Proposal                     29.1
           ----------------------------------------------------------
                       Contract                   Introduction
           ----------------------------------------------------------
                    Contract Price                    5.1
           ----------------------------------------------------------
                      Contractor                  Introduction
           ----------------------------------------------------------
               Contractor Satellite                   38.1
           ----------------------------------------------------------
                         Costs                        14.5
           ----------------------------------------------------------
                   Degraded Payload                   6.3.2.3
           ----------------------------------------------------------
                  Delinquent Payments                 6.4
           ----------------------------------------------------------
                     

                                       99


<PAGE>


           ----------------------------------------------------------
                     Deliverables                      3
           ----------------------------------------------------------
                     Documentation                     4.1
           ----------------------------------------------------------
                     Effective Date                    39
           ----------------------------------------------------------
                     Extension Period                  6.3.4.3
           ----------------------------------------------------------
                         G&A Costs                     29.5
           ----------------------------------------------------------
                      Holdback Amount                  12.5
           ----------------------------------------------------------
                 Incentives Interest Rate              6.3.2.2
           ----------------------------------------------------------
                   Intentional Ignition                16.2
           ----------------------------------------------------------
                        Launch Date                    7.1.1
           ----------------------------------------------------------
                      Launch Vehicle                   4.2.1
           ----------------------------------------------------------
                       Launch Window                   7.1.2
           ----------------------------------------------------------
                     Letter Agreement                 Recitals
           ----------------------------------------------------------
                     LOPS/MOPS Option                  6.3.4.3
           ----------------------------------------------------------
                     LOPS/MOPS Refund                  6.3.4.3
           ----------------------------------------------------------
                            MCC                        3.3(a)
           ----------------------------------------------------------
                            OCC                        3.3(b)
           ----------------------------------------------------------
                          PAS 6B                       3.1
           ----------------------------------------------------------
               Pre-Launch Incentive Payments           6.3.4.1
           ----------------------------------------------------------
                     Program Invention                 20.1
           ----------------------------------------------------------
                     Properly Operated                 3.4
           ----------------------------------------------------------
                    Recoverable Amount                 6.3.4.4
           ----------------------------------------------------------
                     Related Services                  4.1
           ----------------------------------------------------------
                       Risk of Loss                    15.1.4
           ----------------------------------------------------------
                       Shipment Date                   4.1
           ----------------------------------------------------------
                        Spacecraft                     3.1
           ----------------------------------------------------------
               

                                       100


<PAGE>


           ----------------------------------------------------------
              Spacecraft Retirement Payment            6.3.3
           ----------------------------------------------------------
                   Specified Operational               6.3.1.1
                    Lifetime
           ----------------------------------------------------------
                   Successfully Injected               6.3.1.5
                    Spacecraft
           ----------------------------------------------------------
                  Successfully Operating               6.3.1.2
                    Payload
           ----------------------------------------------------------
                  Successfully Operating               6.3.1.3
                   Transponder
           ----------------------------------------------------------
                   Third Anniversary                   6.3.4.3
           ----------------------------------------------------------
                  Useful Commercial Life               6.3.1.4
           ----------------------------------------------------------
                   Warranty Time Period                16.2
           ----------------------------------------------------------


                                       101


<PAGE>


ARTICLE 41.                EFFECTIVE DATE OF CONTRACT


The "Effective Date" of this Amended and Restated Contract No. 98-PAS-001 shall
be 9 March 1998.


                                       102


<PAGE>


IN WITNESS WHEREOF, the Parties hereto have executed this Amended and Restated
Contract No. 98-PAS-001 to become effective upon the date specified in Article
39, herein entitled, "Effective Date of Contract."


HUGHES SPACE & COMMUNICATIONS COMPANY


SIGNATURE:  /s/ Michael J. Houterman
          ---------------------------------

NAME:   Michael J. Houterman
     --------------------------------------

TITLE:        VP  HSC
      -------------------------------------

DATE:    March 9, 1998
     --------------------------------------




PANAMSAT INTERNATIONAL SYSTEMS, INC.


SIGNATURE:   /s/ Frederick Landman
          ---------------------------------

NAME:     Frederick Landman
     --------------------------------------

TITLE: President & Chief Executive Officer
      -------------------------------------

DATE:    March 9, 1998
     --------------------------------------