December 10, 1997

                                    AGREEMENT

                                     between

                          THE OFFICE OF NAVAL RESEARCH

                                       and

                    SPACE TECHNOLOGY DEVELOPMENT CORPORATION
                        2111 WILSON BOULEVARD, SUITE 700
                               ARLINGTON, VA 22201

                                  Agreement for

                          NAVY EARTHMAP OBSERVER (NEMO)

Agreement No.:  N00014-98-3-0001
Total Amount of Agreement:  $128,900,994.00
Total Estimated Government Funding of the Agreement:  $55,413,647.00
Total Estimated Recipient Funding of the Agreement: $73,487,347.00
Funds Obligated:  $15,000,000.00
Authority:  10 U.S.C. 2371
Effective Date: 11 December 1997
Procurement Request Number: 97PR08562-00
Line of Appropriation: SEE ATTACHED FINANCIAL ACCOUNTING DATA SHEET
CAGE Code:  1CBS0

This Other  Transaction  hereinafter  referred to as the  "Agreement" is entered
into  between  the  Office of Naval  Research  (the  Federal  Awarding  agency),
hereinafter  called "ONR" or the "Government"  and Space Technology  Development
Corporation,  hereinafter referred to as "STDC" or the "Recipient",  pursuant to
and under U.S. Federal Law.

FOR THE                                 FOR THE UNITED STATES
SPACE TECHNOLOGY DEVELOPMENT CORP.      OF AMERICA
                                        OFFICE OF NAVAL RESEARCH

/s/ Paul C. Setze        12/11/97       /s/ Dennis E. Padilla    12/11/97
Signautre                Date           Signature                Date

Paul C. Setze                           Dennis E. Padilla, ONR 25
Typed Name                              Typed Name

Chief Executive Officer                 Director Contract & Grant Award Div.
Title                                   Title

Agreement N00014-98-3-0001                                  December 10, 1997

<PAGE>
                               TABLE OF CONTENTS


                                                                           Page
TABLE OF CONTENTS                                                           2
ARTICLE 1.   INTRODUCTION AND PURPOSE                                       3
ARTICLE 2.   TERM                                                           4
ARTICLE 3.   STATEMENT OF WORK                                              5
ARTICLE 4.   DESIGNATED GOVERNMENT OFFICIALS                                5
ARTICLE 5.   PROGRAM MANAGEMENT                                             6
ARTICLE 6.   ADMINISTRATION AND ACCOUNTING PROCEDURES                       9
ARTICLE 7.   FISCAL MANAGEMENT                                              10
ARTICLE 8.   DATA RIGHTS                                                    12
ARTICLE 9.   TASKING AND OPERATION                                          17
ARTICLE 10.  PATENTS                                                        20
ARTICLE 11.  FOREIGN ACCESS TO TECHNOLOGY                                   22
ARTICLE 12.  LIABILITY                                                      23
ARTICLE 13.  USE OF TECHNICAL FACILITIES                                    25
ARTICLE 14.  PROPERTY MANAGEMENT                                            25
ARTICLE 15.  SECURITY                                                       26
ARTICLE 16.  REPORTING REQUIREMENTS                                         26
ARTICLE 17.  MODIFICATIONS                                                  27
ARTICLE 18.  NOTICES                                                        27
ARTICLE 19.  WAIVER OF RIGHTS                                               27
ARTICLE 20.  SEVERABILITY                                                   27
ARTICLE 21.  SUSPENSION AND TERMINATION                                     28
ARTICLE 22.  FORCE MAJEURE                                                  28
ARTICLE 23.  CLAIMS, DISPUTES, AND APPEALS                                  28
ARTICLE 24.  ASSIGNMENT OF CLAIMS                                           30
ARTICLE 25.  GOVERNING LAW / ORDER OF PRECEDENCE / REGISTRATION             30
ARTICLE 26.  ENTIRE AGREEMENT                                               30
ARTICLE 27.  CERTIFICATIONS                                                 31
ARTICLE 28.  NONDISCRIMINATION                                              31
ARTICLE 29.  ORASIS                                                         31

ATTACHMENTS
         1.       Statement of Work
         2.       Schedule of Payments and Payable Milestones
         3.       Reporting Requirements
         4.       Financial Accounting Data Sheet

<PAGE>

                                    AGREEMENT
                                       FOR
                          NAVY EARTHMAP OBSERVER (NEMO)
                                      WITH
                    SPACE TECHNOLOGY DEVELOPMENT CORPORATION


ARTICLE 1.  INTRODUCTION AND PURPOSE

         1.1. Background

                1.1.1.   Government Vision

         The    government    believes    that    understanding    the   complex
interrelationships  between the different  parts of the global  environment is a
fundamental  element of a national  security  strategy  which  includes  diverse
military missions as well as economic  prosperity.  Hyperspectral remote sensing
is a powerful tool for  characterizing  the environment,  but its full potential
cannot be realized until an imagery  database exists to support  development and
validation of algorithms to extract the myriad kinds of information contained in
a  hyperspectral  image.  Acquiring  such a database by means of  aircraft-based
systems would be a lengthy and prohibitively expensive process.

         NEMO, by merging Navy-developed  technology and expertise with industry
capability, will put into space a satellite-based  hyperspectral sensor with the
areal  coverage  and  sensitivity  required  to  gather  synoptic  imagery  over
thousands of  square-kilometers  of land and/or sea. During its planned lifetime
the NEMO  satellite will map most of the earth's  surface  including much of the
littoral,  and will acquire  sufficient  repeat imagery over selected regions to
allow information  extraction  algorithms to be validated over the full range of
geographic and environmental conditions.

         The  government's  key  purpose  is to enable  science  and  technology
investigations  leading to robust  applications  for both government  (including
military in particular)  and commercial  uses. A  closely-related  but secondary
purpose,  arising from the  recognition  that  government's  needs for satellite
imagery will increasingly be satisfied by commercial  sources, is to demonstrate
to government users the value of hyperspectral  data from a commercially  viable
satellite system for mission related purposes.

                1.1.2.    Corporate Vision

         STDC's  partners  believe in the future of  satellite  imaging  and its
viability  - both as a  commercial  enterprise  and,  in the case of NEMO,  as a
significant  asset for the Navy in  carrying  out its  mission  in the  littoral
regions of the world.

         NEMO will develop, demonstrate, and refine new technology that augments
and enhances  traditional  remote sensing  techniques.  NEMO enables  commercial
industry  to  leverage  ongoing  Navy  Dual-Use   Applications  to  provide  new
Hyperspectral  Imagery (HSI) data products  supporting  validated military needs
that increase the performance of military  systems,  while decreasing  operation
and support costs.

<PAGE>

         STDC and its team of commercial  partners and NRL have as a key purpose
the  transformation of years of market analysis,  Navy-developed  technology and
expertise,  and  corporate  experience  in the  commercial  satellite  and  data
analysis  markets  into  a  business  capable  of  supporting  new  markets  for
moderate-to-high  resolution HSI and  panchromatic  data collected by satellite.
STDC will offer its imagery and  derivative  earth  information  products to the
global commercial marketplace.

         Finally,  the  partnering  of NRL  and  industry  shows  that  dual-use
research  and  development  is  practical,  and  that  the  leveraging  of these
initiatives can develop militarily useful and commercially viable technologies.

         1.2.   Scope

         STDC, with the help of several private and Governmental  organizations,
shall perform research and development program, including test and qualification
for the successful  launch of one NEMO satellite and the  acquisition of coastal
and other image data of interest to the Government.  The effort shall be carried
out in accordance  with the Statement of Work  incorporated in this Agreement as
Attachment 1. STDC shall submit or otherwise provide all documentation  required
by Attachment 3, Reporting Requirements.

         1.3.    Goals/Objectives

                    1.3.1.  The  goals  of  this  Agreement  are to  enable  the
successful  launch of a NEMO  satellite  and the  acquisition  of image  data of
interest to the Government. A further goal is to be the basis for a commercially
viable  enterprise  that will  continue  to  provide  certain  image data to the
Government for the life of the satellite.

            1.3.2.  The Government  will have  continuous  involvement  with the
Recipient.  The  Government  will also  obtain  access to  research  results and
certain  rights in data and  patents  pursuant to Articles 8 and 10. ONR and the
Recipient  are bound to each  other by a duty of good  faith  and best  research
effort in achieving the goals of the Recipient and ONR. This Agreement  reflects
the collaborative documents identified as "Teaming Agreements", between STDC and
its  subcontractors;  and any  subsequent  agreements  between  STDC and NRL for
performance of work under this Other Transaction and "ORASIS License  Agreement"
between STDC and NRL.

           1.3.3. This Agreement is an "other transaction" pursuant to 10 U.S.C.
ss. 2371. The Parties agree that the principal  purpose of this Agreement is for
the  Government  to support and  stimulate  STDC to provide its best  efforts in
development of a commercially  viable  space-based image acquisition  system and
not for the acquisition of property or services for the direct benefit or use of
the  Government.  The Federal  Acquisition  Regulation  (FAR) and  Department of
Defense FAR Supplement  (DFARS) apply only as  specifically  referenced  herein.
This Agreement is not a procurement  contract or grant agreement for purposes of
FAR Subpart  31.205-18.  This  Agreement  is not intended to be, nor shall it be
construed as, by implication  or otherwise,  a  partnership,  a corporation,  or
other business organization.

ARTICLE 2.  TERM

<PAGE>

         The term of this  Agreement  shall  be from the date of this  Agreement
through 30 September 2005 or for the useful life of the satellite,  whichever is
longer.  If an  extension  to the period of  performance  of this  Agreement  is
desired,  the Recipient  will submit a request in writing,  in  accordance  with
Article  16,  Modifications,  to the Grants  Officer.  If the  request is for an
extension of six months or more, the Recipient shall include a revised  estimate
of how funds will be used during the extension.  An extension of time shall not,
of itself, entitle the Recipient to additional funds.

ARTICLE 3.  STATEMENT OF WORK

          The work shall be conducted in general accordance with the Recipient's
proposal  entitled  "Propsal for Navy EarthMap  Observer  (NEMO)" dated 15 April
1997,  which  is  incorporated  herein  by  reference,  and in  accordance  with
Attachment  1  entitled  "Statement  of  Work".  The  Statement  of  Work  is  a
description  of the tasks that must be  performed  by the  Recipient in the NEMO
Program and a statement of the specific  responsibilities  of each member of the
NEMO  team.  The  Statement  of Work is  incorporated  as  Attachment  1 to this
Agreement.

ARTICLE 4.  DESIGNATED GOVERNMENT OFFICIALS

           4.1.  The Grants Office will be:

                  Office of Naval Research
                  Ballston Tower One
                  800 North Quincy Street
                  Arlington, VA 22217-5660
                  Grants Officer: Brian Glance, (703) 696-2596

         4.2.  The Grants Administration Office will be:

                  DCMC Atlanta               DODAAC: S1103A
                  ATTN: DCMDE-GAOG
                  805 Walker Street, Suite 1
                  Marietta, GA 30060-2789
                  ACO/AGO: Stacy Strickland 770-590-2055

         4.3. The Government Audit Agency will be:

                  Defense Contract Audit Agency
                  Rosslyn Branch Office
                  6800 Versar Center, Suite 329 3rd Flr
                  Springfield, VA 22151-4147
                  Branch Manager: Charles J. Hays, II 703-325-9542

         4.4.  The Payment Office will be:

                  DFAS Columbus Center      DODAAC: SC1020
                  DFAS/CO-JSA/Southeast
                  P.O. Box 182225

<PAGE>

                  Columbus, OH 43218-2225

ARTICLE 5.        PROGRAM  MANAGEMENT

         5.0      Scope

                  STDC and its  industrial  partners,  in  partnership  with the
Naval Research  Laboratory,  shall perform research and  development,  including
test and  qualification  for the successful launch of one NEMO satellite and the
acquisition  of image data of interest to the Parties.  Technical  management of
this  Agreement  will be the  responsibility  of  ONR.  The  Program  management
structure  consists of a Program Office where the STDC and NRL Program  Managers
direct and manage all NEMO  activities.  These  individuals  are responsible for
decisions on technical,  science,  and business issues.  STDC, as the Recipient,
will manage the execution of this award and the business  relationships  of each
of its industry  partners.  STDC has delegated the day-to-day  program execution
and  systems-engineering  of the  developmental  phase of the  Program (up until
sixty days after  launch) to the NRL. All of these  efforts shall be carried out
in  accordance  with the  Statement of Work  incorporated  in this  Agreement as
Attachment 1. STDC shall submit or otherwise provide all documentation  required
by Attachment 3, Reporting Requirements.

         5.1      The Principal Managers

                5.1.1. Recipient-Space Technology Development Corporation (STDC)

         STDC is the  Recipient  and will manage the execution of the DUAP award
and  the  business  relationship  of  each  of its  industry  partners  and,  in
conjunction with NRL, will direct and manage all NEMO activities. Paul C. Setze,
Chief Executive Officer of STDC, will serve as the Program Coordinator (PC). His
address is:

         Paul C. Setze, Chief Executive Officer
         Space Technology Development Corporation
         2111 Wilson Boulevard, Suite 700
         Arlington, VA  22201
         Phone: 703-351-5056

                5.1.2.   Government - The Office of Naval Research (ONR)

         Technical  management of this Agreement will be the  responsibility  of
ONR. The Agreement  Technical  Manager (ATM) will be responsible  for the review
and verification of the Payable  Milestones,  the Annual Program Plan, and shall
have  continuous  interaction  to  cause  effective  collaboration  between  the
Government and the Recipient. Dr. James M. McDonald of ONR will serve as ATM.
His address is:

         Dr. James M. McDonald, ONR 32SP
         Office of Naval Research

<PAGE>

         Ballston Tower One
         800 North Quincy Street
         Arlington, VA  22217-5660
         Phone 703-696-4531

                  5.1.3  Government - The Naval Research Laboratory (NRL)

          The Naval Research  Laboratory is the Government  partner with STDC in
the  NEMO  Program,   and  will  provide   day-to-day   program   execution  and
systems-engineering  of the Program up until sixty days after  launch  including
the implementation of the Statement of Work,  coordination of the Annual Program
Plan, and mission success.  The NEMO Program  Technical Manager (PTM) is the NRL
Program Manager and, in conjunction with the PC, will direct and manage all NEMO
activities. Mr. Thomas L. Wilson, Jr. will serve as the PTM. His address is:

         Thomas L. Wilson, Jr., Code 8030.1
         Naval Research Laboratory
         4555 Overlook Avenue SW
         Washington, DC 20375-5355
         Phone: 202-767-0518

         5.2      Management Committee

                  5.2.1 The Program Office shall organize a Management Committee
that will advise it on both technical and  non-technical  matters related to the
NEMO Program.  The Management Committee shall consist of one representative from
each of the NEMO team members, and will be co-chaired by the PC and PTM.

                  5.2.2 The PC and PTM will  jointly  make  decisions on matters
that come before the  Management  Committee.  These  decisions  will balance the
programmatic, technical, financial, and schedule aspects of the Program.

                  5.2.3 The Management  Committee shall meet  regularly,  and at
least  quarterly.   The  Management  Committee  shall  notify  the  ATM  of  the
established meeting schedule and, in the event of changes to the schedule, shall
notify all participants and the ATM at least 30 days prior to the next scheduled
meeting.

         5.3   Management and Program Structure

                  5.3.1   Technical  and  program   management  of  the  program
established  under this Agreement shall be  accomplished  through the management
structures and processes detailed in this Article.

                  5.3.2 The PTM will have the  responsibility for the day-to-day
execution of the Program.  Also, the PTM will be responsible  for the Government
portion of the Program.

<PAGE>

                  5.3.3  The PC will  have  responsibility  for  the  commercial
portion of the program and for the programmatic  aspects of STDC's subcontracts.
In  addition,  the  PC  shall  be  responsible  for  reporting,  financial,  and
administrative matters. The PC will provide a copy of such documents to the PTM.

                  5.3.4 A Senior  Review  Board (SRB) will be  established;  its
membership  will  comprise the senior  leadership  of the NRL's Naval Center for
Space  Technology (NRL Codes 8000,  8100, 8200) and other experts as appropriate
to issues  under  consideration.  Either  the PC or PTM may  convene  the SRB to
conduct a review of any major  decision.  The SRB's decisions shall be guided by
considerations of NEMO program mission success and program costs.  Additionally,
the SRB will review issues on which the PC and PTM cannot reach agreement.

                  5.3.5  The  following  decisions  of the  Program  Office  are
subject to the review and approval of the ATM:

                  (a) Changes to any Teaming  Agreements  between STDC and other
parties if such changes  substantially  alter the relationship of the parties as
originally agreed upon when the Agreement was executed;

                  (b)  Changes to, or  elimination  of, any  Government  funding
allocation to any Participant as technically and/or financially justified;

                  (c)   Technical and/or funding revisions to the Agreement; and

                  (d) Addition/deletion of participants.

In reviewing decisions presented for approval, the ATM will consider inputs from
the Program Office (including  individual inputs from the PC and PTM in the case
of disagreements between them) and any recommendation from the SRB. In the event
that the Program Office  disagrees with decisions of the ATM, the matter will be
referred to the CNR for a final decision.

                  5.3.6  The  ATM  shall  participate  in  the  meetings  of the
Management  Committee.   Other  Government  personnel  may  participate  in  the
technical  portion of these  meetings  with the consent of the  Program  Office.
Participation  by the ATM in such  meetings  shall not be a  substitute  for any
required  Government  approvals set forth in this Agreement.  All such approvals
must be provided in writing by the designated Government approving official.

                  5.3.7 Annual  Program Plans,  as described  below in Paragraph
5.4.2., shall be submitted to the Agreement Technical Manager.

                  5.3.8 During the term of the  Agreement,  it may be determined
that a change in the  Statement of Work and/or the Payable  Milestones  would be
beneficial  to  program  objectives.   Any  recommendations  for  modifications,
including  justifications to support any changes to the Statement of Work and/or
the Payable Milestones, shall be documented in a letter and submitted to the ATM
with a copy to the Grants Officer.  This  documentation  letter shall detail the
technical,  chronological,  and financial impact of the proposed modification to
the research  program.  The Government is not obligated to pay for additional or
revised Payable  Milestones until the Payable  Milestones  Schedule  (Attachment
Number 2) is  revised  by the  Grants  Officer  through a  modification  of this
Agreement.

<PAGE>

                  5.3.9 For minor or administrative  matters, the Grants Officer
may issue  unilateral  modifications  (e.g.,  changes  in the  paying  office or
appropriation   data,  changes  in  Government   personnel  or  other  personnel
identified in the Agreement, etc.) for which no signature is required of the PC.

         5.4.  Program Management Planning Process

                  An Annual  Program Plan will be prepared by the Program Office
with  inputs  from and review by the  Management  Committee,  the Senior  Review
Board,  and the ATM.  The Plan will  contain the  detailed  schedule of research
activities  and Payable  Milestones.  The Annual  Program Plan will  consolidate
quarterly adjustments in the research schedule, including revisions/modification
to payable milestones.

                  5.4.1.  Initial  Program Plan:  The Program Office will follow
the initial program plan that is contained in the Statement of Work  (Attachment
Number 1), and the  Schedule of  Payments  and  Payable  Milestones  (Attachment
Number 2).

                  5.4.2.  Annual  Program Plan: The principal  program  planning
document is the Annual  Program Plan.  The Annual Program Plan shall be prepared
during the first  quarter  of each  Agreement  year.  The  Annual  Program  Plan
provides a detailed  schedule of  activities,  commits the  Recipient to use its
best  efforts  to  meet  specific  performance  objectives,   includes  forecast
expenditures and describes the Payable Milestones.  The Annual Program Plan will
consolidate    all    prior    adjustments    in   the    schedule,    including
revisions/modifications to the Payable Milestones.

                  5.4.3.  The Annual Program Plan will be presented and reviewed
at an annual review  concurrent  with the appropriate  quarterly  meeting of the
Management Committee. In the event that the Payable Milestones are not achieved,
the Program  Office  shall  provide to the ATM an  "Adjustment  Action  Plan" in
writing not later than fifteen (15) days following the relevant  milestone date.
The Program  Office will document the  accomplishment  of Payable  Milestones in
accordance with  Attachment 2. For any additional or revised Payable  Milestones
that are recommended either in an "Adjustment Action Plan" or the Annual Program
Plan, the Program Coordinator shall supply appropriate written  documentation as
reasonably directed by the Agreement  Technical Manager.  The documentation will
describe  the  effort,  provide for  targets,  and  provide  Payable  Milestones
forecasts.

ARTICLE 6.   ADMINISTRATION AND ACCOUNTING PROCEDURES

         6.1.  Administration

         The Recipient shall  implement  administrative  procedures,  accounting
procedures  and  financial  management  systems in  accordance  with  Section 21
Standards for Financial  Management  Systems - of OMB Circular  A-110,  "Uniform
Administrative  Requirements  for Grants and  Agreements  with  Institutions  of
Higher Learning Education, Hospitals, and Other Non-Profit Organizations," dated
93 Nov 19. For the purpose of this Agreement,  the term "allowable expenditures"
refers only to those expenditures  considered to be allowable in accordance with

<PAGE>

the Federal Acquisition Regulation Part 31, Contract Cost Principles, as regards
for-profit,  commercial businesses.  As appropriate,  the terms "contractor" and
"contract"  in the  FAR  provision  shall  be  read as  "Recipient"  and  "Other
Transaction",  respectively.  Further,  the  allowability  of  any  expenditures
incurred in the  performance of any subaward  conducted on a  cost-reimbursement
basis  shall be subject  to those  Federal  cost  principles  applicable  to the
particular  type of organization  concerned.  For the purposes of Article 6, any
subsequent  agreements  between STDC and NRL for  performance of work under this
Other  Transaction  and the ORASIS  License  Agreement  between STDC and NRL are
separate  agreements from a contract,  grant,  cooperative  agreement,  or other
transaction.

         6.2.  Accounting System

         The Recipient  shall  maintain an established  accounting  system which
complies  with  generally   accepted   accounting   principles,   and  with  the
requirements of this Agreement. Appropriate arrangements must have been made for
receiving,  distributing and accounting for Federal funds.  This paragraph shall
not be construed  as requiring  the  Recipient  to establish  any other  systems
extending  beyond its current  systems to account for costs in  accordance  with
generally accepted accounting principles.

         6.3   Applicability

         Federal entities shall not be subject to the provisions of Article 6.

         6.4   Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements), regardless of tier.

ARTICLE 7.   FISCAL MANAGEMENT

         This section  provides  for the  obligation  and payment of  Government
Funds as well as audit procedures.

         7.1.  Allocation of Recipient Funds

                  7.1.1.  Obligation

                            7.1.1.1.  The  total  amount  of this  Agreement  is
$128,900,994.00.

                            7.1.1.2.  The total estimated  Recipient funding is
$73,487,347.00.  The Recipient's funding base consists of a combination of cash
and in-kind contributions.

                            7.1.1.3.  The  total  estimated  Government  funding
is  $55,413,647.00.  Federal  funds in the  amount of $15,000,000.00 are hereby
made available and obligated as set forth on Attachment 4.

<PAGE>

                            7.1.1.4.  By signing this  Agreement,  the Recipient
agrees to comply with the requirements of paragraph (b) of Section ___.22 of OMB
Circular  A-110 dated  November 29, 1993 as regards the advanced  payment of any
funds to the Recipient.

         7.2.  Matching

                  7.2.1.  The  Recipient  contributions  for the purpose of cost
matching  may  consist  of both  cash and  in-kind  contributions.  All  in-kind
contributions must comply with Section ___.23 of OMB Circular A-110. When actual
cost  information  is not  available,  valuation of the services of  volunteers,
employed  by  organizations  other  than the  Recipients,  shall be  established
according to the procedure set forth in OMB Circular A-110, by using the average
Recipient  in-house cost of engineering  labor and overheads of the  appropriate
business unit.  Also, for purposes of this Agreement,  the sum of matching funds
may include up to 10% in  contributed  intellectual  property  rights,  patents,
trade  secrets  and  other   non-federal   source   intangible   property.   All
contributions of intellectual property rights shall be valued in accordance with
generally accepted  valuation  techniques and will in no event exceed the market
value of the property at the time of their donation.  Independent appraisers who
regularly determine the value of intellectual  property rights shall be utilized
to determine the value of all  intellectual  property  rights to be contributed.
The  Recipient  funds  to be used as the  basis  for the  matching  requirements
expressly  exclude any and all funds used to meet matching  requirements for any
other federal grant, agreement or other assistance arrangement.

                  7.2.2.  The  Government  and the  Recipient  estimate that the
Statement  of Work of  this  Agreement  can  only be  accomplished  with a total
aggregate resource contribution of $128,900,994.00,  which contributions will be
allocated  and expended as detailed in  subarticles  7.2.2.1.  and 7.2.2.2.  The
Recipient  intends and, by entering  into this  Agreement,  undertakes  to cause
their  contributions  to be provided as detailed  in  Attachment  2.  Failure of
either  party to provide  its  contribution  may result in  termination  of this
Agreement,  in accordance  with Article 21,  Suspension  and  Termination,  or a
proportional reduction in funding.

                            7.2.2.1.  A  contribution  of  $113,606,167.00  will
be made by Government  and Recipient  from the effective  date of this agreement
through 30 September 2000 or sixty (60) days after launch of the NEMO satellite,
whichever  is  later.  The cost  share  ratio  shall be  $55,413,647.00  for the
Government ( 48.8%) to $58,192,520.00 for the Recipient (51.2%).

                            7.2.2.2  A  contribution  of  $15,294,827.00  will
be made by the Recipient from I October 2000 or the sixty-first (61st) day after
launch  (whichever is latest)  through 30 September  2005.  One hundred  percent
(100%) of the costs shall be borne by the  Recipient in the event the  satellite
continues to operate beyond 30 September 2005.

         7.3.  Restrictions on Use of Government Funds

         Government Funds provided under this Agreement must be allocated by the
Recipient  exclusively for the execution and operation of the Statement of Work.
Government funds shall not be utilized to support the Recipient's  operations or
administration unrelated to the this Agreement.

         7.4.  Payments

<PAGE>

         Upon award of this  Agreement,  the Recipient will submit a request for
an advance payment. Thereafter, STDC will submit monthly invoices and include an
expenditure  report  for each  Payable  Milestone  accomplished  for  payment in
accordance  with the  Schedule of Payments and Payable  Milestones  set forth in
Attachment 2 and the  procedures of Article 7. Both the Schedule of Payments and
the Funding  Schedule set forth in  Attachments  2 and 4,  respectively,  may be
revised or updated in accordance with Article 5. The Recipient shall submit four
copies of each invoice to the Agreement  Technical Manager identified in Article
5.1.2 to be certified and forwarded for payment to the Payment  Office listed in
Article 4.4.

         7.5.   Unexpended Funds and Earned Interest

                  7.5.1.  At the end of 30  September  2000 or sixty  (60)  days
after launch,  whichever is later, any unexpended  balances of funds provided by
the  Government  under this  Agreement  shall be remitted to the Office of Naval
Research at the address given in Article 4.2., Grants Administration  Office, by
check made payable to the Office of Naval Research.

                  7.5.2. Any interest earned by Agreement funds on deposit shall
be remitted  annually to the  Department of Health and Human  Services,  Payment
Management System, P.O. Box 6021, Rockville,  MD 20852, by check made payable to
the Department of Health and Human Services.

         7.6.  Limitation of Funds

         In no case  shall the  Government's  financial  obligation  exceed  the
amount obligated to this Agreement as set forth in paragraph 7.1.1.3. above.

         7.7.  Audit Procedures

         The Recipient  shall ensure that an audit of all activities  under this
Agreement  shall be conducted  annually in accordance  with the  procedures  set
forth in OMB Circular A-133, March 1990 and the following subparagraphs. Federal
entities are not subject to this provision.

                  7.7.1.  Selection of Auditors. An independent auditor,  herein
defined as a public  accountant  or  government  auditor who meets the standards
specified in the  Government  Auditing  Standards  developed by the  Comptroller
General of the United States  covering  financial  audits,  must annually review
Recipient expenditures.

                  7.7.2. Scope of Audit and Audit Objectives. The Audit shall be
conducted by an  independent  auditor in  accordance  with  Government  Auditing
Standards  developed by the  Comptroller  General of the United States  covering
financial  audits.  The  Auditor  shall  determine  whether:  (1) The  financial
statements  of the  Recipient  present  fairly its  financial  position  and the
results of its  operations  in accordance  with  generally  accepted  accounting
principles;  (2) The  Recipient  has an internal  control  structure  to provide
reasonable  assurance  that it is managing  Federal  awards in  compliance  with
applicable laws and regulations,  and has in place adequate controls that ensure
compliance  with the laws and  regulations  that could have a material impact on
the  financial  statements;  (3)  The  Recipient  has  complied  with  laws  and
regulations  that  may  have a  direct  and  material  effect  on its  financial
statement  amounts  and on each major  Federal  program;  (4) The  Recipient  is

<PAGE>

operating in compliance  with its established  policies and procedures;  and (5)
The Recipient has complied with all requirements of this Agreement.

ARTICLE 8.  DATA RIGHTS

Rights in Technical Data (including Computer Software)

         8.1.     Definitions

         "Government  purpose"  means any  activity  in which the United  States
Government is a party,  including  cooperative  agreements with international or
multi-national defense organizations, or sales or transfers by the United States
Government to foreign governments or non-commercial  international organizations
for  distribution  only  within  such  foreign  governments  and  organizations.
Government  purposes  include  competitive  procurement,  but do not include the
rights  to use,  modify,  reproduce,  release,  perform,  display,  or  disclose
technical data for commercial  purposes or authorize others to do so. Government
purpose does not include dissemination,  sale, with or without compensation,  or
other means of  distribution  to the general  public of imagery data or products
that use or are  derived  from  imagery  data  without the  permission  of STDC.
Government   purpose   does  include  the   documentation   of  the  results  of
government-funded   science  and  technology  projects  through  publication  as
articles  in  peer-reviewed  scientific  journals,  technical  reports  or other
print-based   media;  such   documentation  may  contain  a  limited  number  of
illustrations  selected  to avoid  harm to STDC's  commercial  interests,  using
actual  imagery  or based  on  imagery  data,  as well as  description  of image
processing algorithms.

         "Government purpose rights" means the rights to use, modify, reproduce,
release,  perform,  display,  or disclose  technical  data within the Government
without  restriction;  and  release  or  disclose  technical  data  outside  the
Government and authorize  persons to whom release or disclosure has been made to
use, modify,  reproduce,  release, perform, display, or disclose that data for a
Government purpose.

         "Imagery  Data" means subject  technical  data generated as a result of
the imaging operations of a spacecraft after it is on orbit.

         "Non-imagery data" means all subject technical data that is not imagery
data.

         "Non-subject  technical data" means all technical data produced outside
of this Agreement.

         "Proprietary Information" means imagery data which is copyrighted by
STDC.

         "Subject technical data" means all technical data first produced in the
performance of work under this Agreement.

         "Technical data" means recorded information,  regardless of the form or
method of the  recording,  of a scientific or technical  nature  (including  all
forms of  computer  software,  programs  and  documentation).  The term does not
include computer software or data incidental to contract administration, such as
financial  or  management  information.  Technical  data is divided into subject

<PAGE>

technical data and non-subject technical data. Subject technical data is further
divided into imagery data and non-imagery data.

         "Unlimited  rights" means rights to use,  modify,  reproduce,  release,
perform, display, or disclose technical data in whole or in part, in any manner,
and for any purpose whatsoever, and to have or authorize others to do so.

         8.2.     Government Rights in Subject Technical Data and Copyright

                  8.2.1.  Unlimited rights.  The Government shall have unlimited
rights in non-imagery data.

                  8.2.2.  Government  purpose rights.  The Government shall have
government  purpose  rights for a seven-year  period in imagery data  commencing
upon the  date of the  imaging  operation  generating  the  imagery  data.  Upon
expiration of the seven-year  period the Government  shall have unlimited rights
in the imagery data.  STDC gives the Government  permission to use, or have used
by others who are subject to the use and  non-disclosure  agreement of paragraph
8.8,   imagery   data  and   products   derived   from  the  imagery   data  for
Government-funded  science and technology projects,  and to document the results
of such projects  through  publication of articles in  peer-reviewed  scientific
journals,  technical reports or other print-based  media; such documentation may
contain  a limited  number of  illustrations  selected  to avoid  harm to STDC's
commercial interests,  using actual imagery or based on imagery data, as well as
description of image processing algorithms.

                  8.2.3.   Copyright   license.   STDC  grants  a  nonexclusive,
nontransferable,  irrevocable,  royalty-free  copyright  license  throughout the
world in the exclusive  rights in  copyrighted  works of  authorship  (17 U.S.C.
Section  106)  prepared  pursuant  to  this  Agreement  to  the  Government  for
government purposes.

         8.3.     Government Rights in Non-Subject Technical Data

                  Only  for  the  purpose  of  executing  this  Agreement,   the
Government  shall  have the  right to use  non-subject  technical  data  that is
furnished  under this  Agreement;  provided  that the  Government  does not have
greater rights in the non-subject  technical data from other contracts,  grants,
or agreements.

         8.4.     STDC Rights in Technical Data and Copyright

                  8.4.1.  STDC has the exclusive right to use for any commercial
purpose,  including  the  right to  license  others,  imagery  data in which the
Government has obtained  government  purpose rights under this Agreement  during
the time period specified in paragraph 8.2.2 of this article.

                  8.4.2.  STDC may copyright works of authorship  prepared under
this Agreement that may be copyrighted under Title 17, U.S. Code.

<PAGE>

                  8.4.3.  All rights not granted to the  Government in technical
data, whether subject data or non-subject data, are retained by STDC.

         8.5.     Release From Liability

         STDC agrees to release the Government from liability for any release or
disclosure of technical  data made in  accordance  with Article 8.8. and to seek
relief  solely from the party who has  improperly  used,  modified,  reproduced,
released,  performed,  displayed, or disclosed STDC data marked with restrictive
legends.  If an  agency  of  the  Government  releases  technical  data  not  in
accordance  with Article 8.8., or if an agency uses the data in an  unauthorized
manner, and if STDC notifies the Grants Officer of such release or use including
factual  evidence to support  such release or use,  then future  requests to the
Navy from the agency  which  released or used such imagery data may be denied by
the Navy after  consultation with STDC. In the event the Grants Officer and STDC
cannot reach an agreement on the denial, the unresolved issue will be decided by
the Chief of Naval Research.

         8.6.     General Marking Instructions

         STDC shall  conspicuously  and legibly mark the following legend on all
imagery data delivered to the Government.

                                (Start of legend)

                       WARNING -- PROPRIETARY IMAGERY DATA
                         FOR GOVERNMENT PURPOSE USE ONLY
                     ACCESS, RELEASE and USE are RESTRICTED

         Agreement No. N00014-98-3-0001
         Space Technology Development Corporation
         2111 Wilson Boulevard, Suite 700
         Arlington, VA 22201
         Expiration Date_______________

         The Government's  rights are restricted by the Rights in Technical Data
         clause  contained  in the  above-identified  Agreement.  Do not release
         outside  Government or to  non-Government  employees without the signed
         non-disclosure agreement required in the above-identified Agreement. No
         restrictions   apply  after  the  expiration  date  shown  above.   Any
         reproduction  of  proprietary  imagery data or portions  thereof marked
         with this legend must also reproduce the markings. Not releasable under
         FOIA, 5 U.S.C. 552 (b)(4).  Information  protected by 18 U.S.C. 1905. A
         copy of the  non-disclosure  agreement is attached hereto or a copy can
         be found on the enclosed disk under the file name "NDA".

         Imagery Data Copyright by Space Technology Development Corp.,
                             xxxx (year, e.g. 2001)

                                 (End of legend)

         8.7.     Lower Tier Agreements

<PAGE>

         Whenever any technical data is to be obtained from a  subcontractor  or
supplier for delivery to the  Government  under this  Agreement,  STDC shall use
this same  article  in the  subcontract  or other  contractual  instrument,  and
require its subcontractors or suppliers to do so, without alteration,  except to
identify the parties.

         8.8.     Use and Non-Disclosure Agreement

         The Government shall not release or disclose technical data in which it
has  government  purpose  rights  unless the intended  recipient  has signed the
following non-disclosure agreement:

                   (Start of Use and Non-Disclosure Agreement)


                            USE AND NON-DISCLOSURE AGREEMENT

The undersigned,  _____(Insert Name)_______, an authorized representative of the
__________(Insert  Company  Name)________,  (which is hereinafter referred to as
the "Requestor") requests the Government to provide the Requestor with technical
data or  computer  software  (hereinafter  referred  to as  "Data") in which the
Government  has  Government  Purpose  Rights.  Those Data are  identified  in an
attachment to this Agreement.

         "Government  purpose"  means any  activity  in which the United  States
Government is a party,  including  cooperative  agreements with international or
multi-national defense organizations, or sales or transfers by the United States
Government to foreign governments or non-commercial  international organizations
for  distribution  only  within  such  foreign  governments  and  organizations.
Government  purposes  include  competitive  procurement,  but do not include the
rights  to use,  modify,  reproduce,  release,  perform,  display,  or  disclose
technical data for commercial  purposes or authorize others to do so. Government
purpose does not include dissemination,  sale, with or without compensation,  or
other means of  distribution  to the general  public of imagery data or products
that use or are  derived  from  imagery  data  without the  permission  of STDC.
Government   purpose   does  include  the   documentation   of  the  results  of
government-funded   science  and  technology  projects  through  publication  as
articles  in  peer-reviewed  scientific  journals,  technical  reports  or other
print-based   media;  such   documentation  may  contain  a  limited  number  of
illustrations  selected  to avoid  harm to STDC's  commercial  interests,  using
actual  imagery  or based  on  imagery  data,  as well as  description  of image
processing algorithms.

         In  consideration  for receiving such Data, the Requestor agrees to use
the Data strictly in accordance  with this  Agreement:  (1) The Requestor  shall
use, modify, reproduce,  release, perform, display, or disclose Data marked with
government  purpose rights only for government  purposes and shall not do so for
any commercial purpose.  The Requestor shall not release,  perform,  display, or
disclose these Data,  without the express written permission of Space Technology
Development Corp., to any person other than its subcontractors or suppliers,  or
prospective subcontractors or suppliers, who require these Data to submit offers
for, or perform,  contracts with the Requestor.  The Requestor shall require its
subcontractors or suppliers, or prospective subcontractors or suppliers, to sign
a use and nondisclosure agreement prior to disclosing or releasing these Data to
such  persons.  Such  agreement  must  be  consistent  with  the  terms  of this
Agreement.

<PAGE>

(2) The Requestor agrees to adopt or establish operating procedures and physical
security  measures  designed to protect these Data from  inadvertent  release or
disclosure to  unauthorized  third parties.  (3) The Requestor  agrees to accept
these Data "as is" without any Government  representation  as to suitability for
intended  use or  warranty  whatsoever.  This  disclaimer  does not  affect  any
obligation  the  Government  may have regarding Data specified in a contract for
the performance of that contract. (4) The Requestor may enter into any agreement
directly with STDC with respect to the use, modification, reproduction, release,
performance,  display,  or disclosure of these Data. (5) The Requestor agrees to
indemnify and hold harmless the Government, its agents, and employees from every
claim or liability,  including attorneys fees, court costs, and expenses arising
out of, or in any way  related  to,  the  misuse or  unauthorized  modification,
reproduction, release, performance, display, or disclosure of Data received from
the Government with  restrictive  legends by the Requestor or any person to whom
the Requestor has released or disclosed the Data. (6) The Requestor is executing
this  Agreement for the benefit of STDC.  STDC is a third party  beneficiary  of
this  Agreement who, in addition to any other rights it may have, is intended to
have the rights of direct  action  against the  Requestor or any other person to
whom the  Requestor has released or disclosed the Data, to seek damages from any
breach  of this  Agreement  or to  otherwise  enforce  this  Agreement.  (7) The
Requestor  agrees  to  destroy  these  Data,  and all  copies of the Data in its
possession,  no later than 30 days after the date shown in paragraph (8) of this
Agreement,  to have all persons to whom it released the Data do so by that date,
and to notify STDC that the Data have been  destroyed.  (8) This Agreement shall
be effective for the period  commencing with the  Requestor's  execution of this
Agreement and ending upon ______(Insert Date)______.  The obligations imposed by
this Agreement shall survive the expiration or termination of the Agreement.

Requestor's Business Name ____________________________
By ___________________________________________________ Authorized Representative
Date
Representative's Typed Name _______________________ and Title __________________

                       Original to be provided to STDC at:

                    Space Technology Development Corporation
                        2111 Wilson Boulevard, Suite 700
                               Arlington VA 22201

                    Copy to be provided to the Government at:

                    Associate Counsel (Intellectual Property)
                                 Attn: ONR/OOCC
                               Ballston Tower One
                             800 North Quincy Street
                             Arlington VA 22217-5660

                    (End of use and non-disclosure agreement)
<PAGE>

ARTICLE 9.   TASKING and OPERATION

         9.1.  Definitions

                  9.1.1. "Target". A continuous strip of the earth's surface, up
to 30km wide and up to 200km long,  which the NEMO  satellite has been tasked to
image;  in the case of  continuous  imaging of a strip  greater than 200km long,
each  200km  or  fraction   thereof  is  considered  to  be  a  single   Target.
Additionally, a fixed point in space shall be considered a Target.

                  9.1.2. "Tasking".  Instructions to the NEMO satellite to carry
out required actions during a tasking cycle,  primarily the imaging of specified
Targets on the earth's surface but including also the imaging of fixed points in
space.  Tasking will be transmitted  from the earth to the satellite once during
each Tasking Cycle.  Tasking will provide all the information  necessary for the
satellite to acquire desired  imagery during a Tasking Cycle,  including but not
necessarily limited to: imager on-off times; satellite attitude (pitch, roll and
nodding ratio) during  imaging;  imager  channels to be recorded;  on-board data
processing instructions; and data file management/downlink instructions.

                  9.1.3.   "Tasking   Cycle".   The   period  of  time   between
transmissions  of  updated  tasking  from  the  ground,  during  which  the NEMO
satellite is autonomously executing its tasking.  Normally, a Tasking Cycle will
be twenty-four hours in length.

                  9.1.4. "Tasking Planning Cycle". The period of time over which
tasking  is  planned  in  advance  of a Tasking  Cycle.  This  period of time is
normally one week.

                  9.1.5.  "System Health Tasking".  Tasking determined necessary
to evaluate and/or maintain the performance of the NEMO system.

                  9.1.6.  "Navy  Tasking".  Tasking  that  results  from  Target
imaging requests by the Navy. There are two categories of Navy tasking:

                            9.1.6.1.  "Navy  Special Tasking". Tasking that must
be fulfilled during a specified window of time in order to coordinate with other
scheduled events. There are two subcategories of Navy Special Tasking:

                    9.1.6.1.1. "Navy Special Tasking Type I".
Tasking of Targets  within a region defined by a 4355km  diameter  circle on the
earth's  surface,  centered on an arbitrarily  designated  point,  at any or all
opportunities during a specified period no more than two weeks in length. At all
times when Navy Special Tasking Type I is in effect and the satellite is capable
of imaging  Targets in the  designated  region,  Navy has the right to  exercise
complete  command and tasking  control over the NEMO  spacecraft,  including the
ability  to  command  downlinking  of data into the  designated  area  using any
channel available on the spacecraft. (If Special Tasking Type I is in effect but
Navy  elects not to exercise  its rights  during a given  pass,  normal  tasking
priorities will apply.)

<PAGE>

                   9.1.6.1.2. "Navy Special Tasking Type II".
Tasking  of  images in a region  consisting  of up to three  contiguous  Targets
(i.e.,  a region  up to 90km  wide and up to  200km  long) at every  opportunity
during a specified period no more than two weeks in length.  (If Special Tasking
Type II is in effect but Navy elects not to image  during a given  pass,  normal
tasking priorities will apply.)

                            9.1.6.2.  "Navy  Routine  Tasking".  Tasking  of a
single Target (on earth or in space) once during a Tasking  Cycle.  Navy Routine
Tasking is defined to include the  highest  listed  Targets on the Navy  Tasking
list,  adding to no more than 25% of the imaging  capacity  (per 24 hour period)
remaining in the Tasking Cycle after System Health and any Navy Special  Tasking
requirements  have been addressed.  Calculation of imaging  capacity will assume
that the IOBP is compressing  imagery at its then-current  rated capacity.  Navy
will make available to STDC any of its allotted 25% which exceeds its needs.

                  9.1.7.  "STDC  Tasking".  Tasking  that  results  from  Target
imaging  requests by STDC. STDC Tasking is defined to include the highest listed
Targets  on the STDC  Tasking  List,  adding to no more than 75% of the  imaging
capacity (per 24 hour period) remaining in the Tasking Cycle after System Health
and any Navy Special Tasking  requirements  have been addressed.  Calculation of
imaging  capacity  will  assume  that the  IOBP is  compressing  imagery  at its
then-current  rated  capacity.  STDC will make  available to the Navy any of its
allotted 75% which is in excess of its needs.

                  9.1.8.  "STDC Time  Sensitive  Tasking".  Tasking  required to
capture a  time-perishable  event such as an oil  spill,  natural  disaster,  or
similar occurrence.

         9.2.  Tasking Priority

         Navy and STDC will independently  prepare lists of Targets to be imaged
during each Tasking Cycle,  then prepare a merged Tasking for the NEMO Satellite
according to the following  priorities,  subject to the limitations of 9.2.1 and
9.2.2:

         System Health Tasking

         Navy Special Tasking

         Navy Routine Tasking

         STDC Tasking

                  9.2.1  Limitation  on Navy  Special  Tasking.  Navy may invoke
Special Tasking a maximum of 6 times during a 12 month period,  of which no more
than 4 times in a 12 month  period may be of Type I, and Navy must  provide STDC
15 days' advance warning before Special Tasking begins.  During a period of time
equal to the requested  Special  Tasking  period and before the Special  Tasking
begins,  STDC Tasking will take priority over any Navy Tasking in the designated
Special Tasking region.

                  9.2.2 Limitation on Navy Routine Tasking. Navy Routine Tasking
will have priority over all STDC Tasking, with the following exceptions:

<PAGE>

                            9.2.2.1.  During a period of time equal to a
requested  Special Tasking period and before the Special  Tasking  begins,  STDC
Tasking  will take  priority  over any Navy  Tasking in the  designated  Special
Tasking region.

                            9.2.2.2. STDC Tasking will have higher priority than
Navy Routine  Tasking for those  Targets which were tasked but not imaged during
the  preceding 8 days for Targets at greater  than 20deg  latitude or during the
preceding 15 days for Targets at less than 20deg latitude.

                            9.2.2.3.  When a commercial order has been placed
for STDC Time Sensitive Imagery, Navy Routine Tasking will not preclude STDC for
more  than one  imaging  opportunity  to fill  that  order,  nor will  STDC Time
Sensitive  Tasking  preclude a Navy  Routine  Tasking  for more than one imaging
opportunity.

         9.3.  Embargo on Navy-Tasked Imagery and Related Information

         The Navy  can  require,  on an  exception  basis,  that  STDC  will not
distribute specified image data to anyone other than Navy for up to 180 days. At
any time during the embargo  period Navy may require that STDC delete  specified
embargoed image data and all references to it from its files and archives.

         In no instance shall STDC reveal Navy tasking  information  without the
written, prior consent of the Navy.

         9.4.  Data Processing

         The Navy will  receive a copy of all imagery  data.  All  imagery  data
provided to the Navy by STDC will normally  have been  processed to Level 1B. In
addition,  the Navy will, however,  have the right to request unprocessed (Level
0) data, either compressed or uncompressed, from the spacecraft.

         9.5.  National Crisis

         STDC will  comply  with all  regulations  imposed by the United  States
government regarding operations of a satellite during times of national crisis.

         9.6.     Lower Tier Agreements

         Whenever any imagery  data is to be obtained  from a  subcontractor  or
supplier for delivery to the  Government  under this  Agreement,  STDC shall use
this Article 9 in the subcontract or other contractual  instrument,  and require
its subcontractors or suppliers to do so, without alteration, except to identify
the parties.

ARTICLE 10.   PATENTS

         10.1.  Definitions

                  10.1.1  "Invention"  means any invention or discovery which is
or may be patentable or otherwise  protected under Title 35 of the United States
Code.

<PAGE>

                  10.1.2   "Subject"   invention  means  any  invention  of  the
recipient  conceived or first actually reduced to practice in the performance of
work under this agreement.

                  10.1.3 "Made" when used in relation to any invention means the
conception or first actual reduction to practice of such invention.

         10.2.  Allocation of Principal Rights

                  10.2.1 The  recipient  retains the entire  right,  title,  and
interest  throughout  the world to each subject  invention.  With respect to any
subject invention in which the recipient  retains title, the Federal  government
is hereby granted a nonexclusive, nontransferable,  irrevocable, paid-up license
to practice or have  practiced for or on behalf of the United States the subject
invention  throughout  the  world.  The  recipient  agrees to execute or to have
executed and  promptly  deliver to the Office of Naval  Research a  confirmatory
instrument  necessary to establish or confirm the license  rights the Government
has throughout the world in those subject  inventions to which the recipient has
title.

                  10.2.2 If the recipient does not either file promptly a patent
application  or intend to protect the subject  invention  as a trade secret with
appropriate  confidentiality  statements,  the  recipient  agrees to assign  the
entire right, title, and interest throughout the world to each subject invention
to the Government, when requested by the Office of Naval Research. If such title
is  assigned  to the  Government,  the  recipient  will  retain  a  nonexclusive
royalty-free license throughout the world in the assigned subject invention. The
recipient's license extends to its domestic  subsidiary and affiliates,  if any,
within the  corporate  structure of which the  recipient is a party and includes
the right to grant sublicenses of the same scope to the extent the recipient was
legally obligated to do so at the time the agreement was awarded. The license is
transferable  only with the approval of the Office of Naval Research except when
transferred to the successor of that part of the  recipient's  business to which
the invention pertains.

         10.3.  Invention Disclosure

                  10.3.1 The Recipient will identify each subject invention, the
inventor(s), and this agreement under which the invention was made to the Office
of Naval  Research  within two months after the inventor  discloses  the subject
invention in writing to recipient personnel responsible for patent matters.

                  10.3.2   The   Recipient   agrees  to   include,   within  the
specification  of any United States patent  applications  and any patent issuing
thereon covering a subject invention,  the following statement,  "This invention
was made with government  support under (identify this agreement) awarded by the
Office of Naval Research. The government has license rights in the invention."

         10.4.  Subcontracts

<PAGE>

         The Recipient will include this Article 10. PATENTS,  suitably modified
to identify the parties, in all subcontracts or lower tier agreements (exclusive
of teaming agreements),  regardless of tier, for experimental,  developmental or
research  work.  Subject to the  Government  obtaining  the license  rights in a
subject invention  provided by this clause,  the recipient and the subcontractor
may mutually  agree to the allocation of title and license rights to the subject
invention.  The  provisions of this article  shall not apply to agreements  with
federal entities.

         10.5.  Preference for United States Industry

         The Recipient agrees that neither it nor any assignee will grant to any
person the exclusive  right to use or sell any subject  inventions in the United
States  unless  such  person  agrees  that any  products  embodying  the subject
invention  or  produced  through  the  use  of the  subject  invention  will  be
manufactured  substantially in the United States.  However, in individual cases,
the  requirement  for such an  agreement  may be waived  by the  Office of Naval
Research  upon a showing by the recipient or its assignee  that  reasonable  but
unsuccessful  efforts  have  been made to grant  licenses  on  similar  terms to
potential  licensees  that would be likely to manufacture  substantially  in the
United  States  or that  under the  circumstances  domestic  manufacture  is not
commercially feasible.

ARTICLE 11.  FOREIGN ACCESS TO TECHNOLOGY

         Note:  This Article shall remain in effect during the term of the
Agreement and for two (2) years thereafter.

         11.1.  Definitions

                  11.1.1.   "Foreign  Firm  or  Institution"  means  a  firm  or
institution  organized  or existing  under the laws of a country  other than the
United States, its territories, or possessions.  The term includes, for purposes
of this Agreement,  any agency or instrumentality of a foreign  government;  and
firms,  institutions or business  organizations which are owned or substantially
controlled by foreign governments, firms, institutions, or individuals.

                  11.1.2.  "Know-How" means all information  including,  but not
limited to  discoveries,  formulas,  materials,  inventions,  processes,  ideas,
approaches,  concepts, techniques,  methods, software, programs,  documentation,
procedures,   firmware,  hardware,  technical  data,  specifications,   devices,
apparatus and machines.

                  11.1.3. "Technology" means discoveries,  innovations, Know-How
and  inventions,   whether  patentable  or  not,  including  computer  software,
recognized under U.S. law as intellectual creations to which rights of ownership
accrue,  including,  but not limited to, patents, trade secrets,  maskworks, and
copyrights developed under this Agreement.

         11.2.  General

         The Parties agree that research findings and technology developments in
NEMO  technology  may  constitute  a  significant  enhancement  to the  national
defense, and to the economic vitality of the United States. Accordingly,  access
to important  technology  developments  under this Agreement by Foreign Firms or
Institutions  must be carefully  controlled.  The controls  contemplated in this
Article are in addition  to, and are not  intended to change or  supersede,  the
provisions of the  International  Traffic in Arms Regulation (22 CFR Part 121 et
seq.), the DoD Industrial Security Regulation (DoD 5220.22-R) and the Department
of Commerce Export Regulation (15 CFR Part 770 et seq.)

<PAGE>

         11.3.  Restrictions on Sale or Transfer of Technology to Foreign Firms
or Institutions

                  11.3.1. In order to promote the national security interests of
the United States and to effectuate  the policies that underlie the  regulations
cited above,  the  procedures  stated in  subparagraphs  2, 3, and 4 below shall
apply to any transfer of Technology.  For purposes of this paragraph, a transfer
includes a sale of the company, and sales or licensing of Technology.
Transfers do not include:

                  (a)  sales of products, images or components, or
                  (b) licenses of software or documentation  related to sales of
products or components, or
                  (c)  transfer  to  foreign   subsidiaries   of  the  Recipient
                  participants  for purposes  related to this Agreement,  or (d)
                  transfer which provides access to Technology to a Foreign Firm
                  or Institution which is an approved source of
supply or source for the conduct of research under this Agreement  provided that
such  transfer  shall  be  limited  to  that  necessary  to  allow  the  firm or
institution to perform its approved role under this Agreement.

                  11.3.2.  The  Recipient  shall  provide  timely  notice to the
Government of any proposed transfers from the Recipient of Technology  developed
with Government  funding under this Agreement to Foreign Firms or  Institutions.
If the Government  determines that the transfer may have adverse consequences to
the  national  security  interests  of the United  States,  the  Recipient,  its
vendors,  and the Government shall jointly endeavor to find  alternatives to the
proposed transfer which obviate or mitigate  potential  adverse  consequences of
the  transfer  but  which  provide  substantially  equivalent  benefits  to  the
Recipient.

                  11.3.3.  In any event,  the Recipient  shall  provide  written
notice to the  Agreement  Technical  Manager and Grants  Officer of any proposed
transfer to a foreign  firm or  institution  at least sixty (60)  calendar  days
prior to the proposed date of transfer.  Such notice shall cite this Article and
shall state  specifically what is to be transferred and the general terms of the
transfer. Within thirty (30) calendar days of receipt of the Recipient's written
notification,  the Grants Officer shall advise the Recipient whether it consents
to the proposed transfer. In cases where the Government does not concur or sixty
(60) calendar days after receipt and the  Government  provides no decision,  the
Recipient may utilize the  procedures  under Article 22, Claims,  Disputes,  and
Appeals. No transfer shall take place until a decision is rendered.

                  11.3.4.  Except as provided in subparagraph 1 above and in the
event the transfer of Technology to Foreign Firms or Institutions is approved by
the Government,  the Recipient shall (a) refund to the Government funds paid for
the  development  of the  Technology  and  (b)  negotiate  a  license  with  the
Government  to  the  Technology  under  terms  that  are  reasonable  under  the
circumstances.

         11.4.  Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements),  regardless of tier, for experimental,  developmental,  or research
work.

<PAGE>

ARTICLE 12.  LIABILITY

         12.1.  Hold Harmless

         The  Recipient  agrees to  indemnify  and hold  harmless and defend the
Government,  its  employees  and agents,  against any  liability or loss for any
claim made by an employee or agent of the Recipient, or persons claiming through
them, for death,  injury,  loss or damage to their person or property arising in
connection  with the  Agreement,  except to the extent that such death,  injury,
loss or damage arises from the negligence of the Government or its employees.

         12.2.  Other Liability

         The Government shall not be liable to the Recipient whether directly or
by way of  contribution  or indemnity  for any claim made by any person or other
entity for personal injury or death, or for property damage or loss,  arising in
any way from this Agreement,  including, but not limited to, the later use, sale
or other disposition of research and technical developments, whether contributed
by either  party,  pursuant  to this  Agreement,  except as  provided  under the
Federal  Tort  Claims Act (28 U.S.C.  2671 et seq.) or other  Federal  law where
sovereign immunity has been waived. The Recipient shall indemnify the Government
against all such claims or proceedings  and shall hold the  Government  harmless
for any resulting  liabilities and lawsuits provided the Recipient is reasonably
notified of such claims and proceedings.

         12.3.  Infringement

         The Recipient  agrees not to hold the U.S.  Government  responsible for
any and all  patent  infringement  cases  which  may arise  under  any  research
projects  conducted  under this  Agreement.  In addition,  the  Recipient  shall
indemnify  the  government  against  all  claims and  proceedings  for actual or
alleged direct or contributory  infringement of, or inducement to infringe,  any
US or foreign patent,  trademark,  or copyright arising under this agreement and
the Recipient shall hold the government harmless from any resulting  liabilities
and losses  provided  the  Recipient is  reasonably  notified of such claims and
proceedings.

         12.4.  Environmental Liability

         The Recipient is solely  responsible for achieving  compliance with all
environmental laws, including the preparation and submission of all licenses and
permit applications required under Federal, State, or local laws or regulations.
The  Recipient  shall not name the United  States,  the  Department  of the Navy
(DON), or any other Government agency,  instrumentality or employee as an owner,
operator or in any other capacity on any license or permit application  required
under  environmental  laws  unless  written  consent is first  obtained  from an
authorized  agent of the  Federal  agency or  instrumentality  to be named.  The
Recipient  shall not accept  issuance of any permit or license which purports to
impose upon the United States, DON, or any Government agency, instrumentality or
employee any obligation or liability for any operations or activities covered by
such permit or license  except upon prior  written  consent  from an  authorized
agent of the Federal agency or instrumentality to be named. The Recipient agrees
to hold harmless, indemnify and defend the United States, DON, and employees and

<PAGE>

instrumentalities thereof from and against any and all liability,  cost, claims,
fines, penalties and suits of any kind for injury to or death of any persons and
for loss or damage to any property,  including natural  resources,  occurring in
connection  with, or in any way incident to the release of any  contaminant,  or
any noncompliance  with any Federal,  State, or local laws or regulations.  This
responsibility to hold harmless,  indemnify,  and defend the United States shall
exist even if the release or  noncompliance  is  discovered  after the date this
agreement expires.

         12.5  Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements), regardless of tier.

ARTICLE 13  USE OF TECHNICAL FACILITIES

         To the  maximum  extent  practical,  the  Recipient  agrees  to use the
technical reference facilities of the Defense Technical Information Center, 8725
John J. Kingman  Road,  STE 0944,  Ft.  Belvoir,  VA  22060-6218,  and all other
sources,  whether  the United  States  government  or  private,  for  purpose of
surveying existing knowledge and avoiding needless duplication of scientific and
engineering effort.

         13.1.    Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements), regardless of tier.

ARTICLE 14.  PROPERTY MANAGEMENT

         14.1.  Standards

         In  accordance  with DoD  Grant  and  Agreement  Regulations  (DoDGARs)
3210.6-R,  Appendix C, the  Recipient  shall manage its  acquired and  furnished
property in  accordance  with the guidance  promulgated  at 32 CFR 34.20 through
34.25.  This  section  of the  DoDGARs  sets  forth  uniform  standards  for the
management,  use,  and  disposition  of  Recipient  acquired  and/or  government
furnished tangible property.

         14.2.  Prior Approval to Purchase Equipment with Federal Funds

         In accordance with applicable cost  principles,  with the express prior
written approval of the Grants Officer,  the Recipient may purchase equipment in
whole or in part with  Federal  funds under this  Agreement.  Prior  approval to
purchase  equipment  listed  in  the  Recipient's  original  cost  proposal  and
statement of work is provided by the execution of this Agreement.

         14.3.  Title to Acquired Tangible Property

         Commercial organizations purchasing approved capital equipment or other
tangible property shall receive  contingent title to such property in accordance
with  DoDGARs (32 CFR 34.21) and shall  maintain,  transfer  and dispose of such

<PAGE>

property  in  accordance  with that  regulation.  Title to  furnished  equipment
identified as federally owned shall remain vested with the Federal Government.

         14.4.   Annual and Final Reporting of Federally Owned Equipment

         Recipients  shall  annually  submit an  inventory  of  federally  owned
property in their custody,  which was acquired or used under this agreement,  to
the cognizant Grants  Administration  Office  identified in the Agreement and to
any  identified  property  administrator.  A  final  inventory  of  all  capital
equipment acquired with federal funds and all federally-owned property is due by
the Agreement  expiration  date.  It is to be submitted to the cognizant  Grants
Administration  Office for  purposes of Agreement  closeout  and final  property
disposition and records reconciliation.

 ARTICLE 15.  SECURITY

         15.1.  The  Recipient's  personnel  will not have access to  classified
United  States  Government   information  under  this  Agreement.   If  security
restrictions  should  happen  to  apply  to  certain  aspects  of  the  proposed
Agreement,  the Grants  Officer will inform the Recipient.  The Recipient  shall
promptly  notify the Grants Officer if information is developed  which might, if
disclosed, affect the national security adversely.  Written concurrence from the
Grants Officer must be obtained prior to disclosure of such information.  Do not
discuss the information over the telephone.

         15.2.  The parties agree to confer and consult with each other prior to
publication  or other  public  disclosure  of the  results  of work  under  this
Agreement  to  ensure  that no  classified,  proprietary  information,  military
critical  technology  or other  controlled  information  is  released.  Prior to
submitting a manuscript for  publication or before any other public  disclosure,
each party will offer the other party ample  opportunity to review such proposed
publication or disclosure,  to submit  objections,  and to file applications for
letters patent in a timely manner.

         15.3. Controlled  Information.  The parties understand that information
and  materials  provided  pursuant to or resulting  from this  agreement  may be
export controlled,  classified,  or unclassified sensitive and protected by law,
executive order or regulation. Each party is responsible for compliance with all
applicable laws and regulations. Nothing in this agreement shall be construed to
permit any disclosure in violation of those restrictions.

         15.4.    Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements), regardless of tier.

ARTICLE 16. REPORTING REQUIREMENTS

         16.1.  The Recipient  shall submit reports as set forth in Attachment 3
to this Agreement.

<PAGE>

         16.2.  All reports and  correspondence  submitted  under this Agreement
shall include the Agreement Number. A copy of the letter of transmittal shall be
provided  to the  Grants  Office  and  the  Grants  Administration  Office.  The
addresses are set forth in Article 4, Designated Government  Officials,  of this
Agreement. The complete addresses for other data Recipients are as follows:

         Data Rights and Intellectual Property Issues:

                  Associate Counsel (Intellectual Property)
                  Attn:  ONR/00CC
                  Office of Naval Research
                  Ballston Tower One
                  800 North Quincy Street
                  Arlington, VA 22217-5660

         16.3     Lower Tier Agreements

         The Recipient shall include this Article, suitably modified to identify
the Parties, in all subcontracts or lower tier agreements  (exclusive of teaming
agreements), regardless of tier.

ARTICLE 17.  MODIFICATIONS

         17.1. Any party, to this Agreement, who wishes to modify this Agreement
shall,  upon  reasonable  notice of the proposed  modification  to all signatory
parties  in  accordance  with  Article  18,  confer in good faith with the other
parties  to  determine   the   desirability   of  the   proposed   modification.
Modifications  shall not be effective until a written  modification is signed by
the Agreement signatories (or their successors).

         17.2. Administrative  modifications may be unilaterally executed by the
Grants Officer (see 5.3.1.5 above).

ARTICLE 18.   NOTICES

         All notices and prior approvals  required hereunder shall be in writing
and shall be addressed to the parties identified on the Agreement cover page and
in Article 4, Designated  Government Officials . Notices shall be effective when
received,  not when sent. If sent certified or registered mail, postage prepaid,
return  receipt  requested,  notice  shall be  effective  on the date the return
receipt  shows the notice was  accepted,  refused,  or  returned  undeliverable.
Notices can be sent by facsimile  transmission  or electronic  mail (e-mail) but
shall be  effective  only if the  sender can  produce  documentary  evidence  to
establish that the addressee actually received the notice.

ARTICLE 19.  WAIVER OF RIGHTS

         Any waiver of any  requirement  contained in this agreement shall be by
mutual  agreement of the  parties.  Any waiver shall be reduced to writing and a

<PAGE>

copy of the waiver  shall be  provided  to each  party.  Failure to insist  upon
performance  of any of the terms and  conditions of the  agreement  shall not be
deemed a waiver of any rights by any party.

ARTICLE 20.  SEVERABILITY

         If any clause, article, provision, or section of this Agreement is held
to be illegal or invalid by any court,  the invalidity of such clause,  article,
provision,  or section shall not affect any of the remaining clauses,  articles,
provisions,  or  sections  hereof  and this  Agreement  shall be  construed  and
enforced as if such illegal or invalid clause, provision or section had not been
contained herein.

ARTICLE 21.  SUSPENSION AND TERMINATION

         21.1.  Suspension.

         Upon the Grants Officer's determination that the Recipient is unable to
comply with the terms and conditions of this  Agreement,  the Grants Officer may
suspend the award or  performance  of this  Agreement.  The Grants Officer shall
notify the  Recipient  that the  agreement  will be suspended and shall give the
Recipient  thirty  days to provide  evidence  of  compliance  with the terms and
conditions of this Agreement.  If the Grants Officer determines that substantial
evidence of compliance has not been provided, the Grants Officer will direct the
Recipient  to  suspend  further  expenditures  of  government  funds  under this
Agreement.

         21.2.  Termination.

                  21.2.1. This agreement may be terminated in whole on in part:

                            (a)  By  the  Grants   Officer   if  the   Recipient
materially fails to comply with the terms and conditions of
this agreement;

                            (b) By the Grants  Officer  with the  consent of the
Recipient,   in  which  case  the  parties  shall  agree  upon  the  termination
conditions,   including  the  effective   date  and,  in  the  case  of  partial
termination, the portion to be terminated; or

                            (c) By mutual  agreement  of the Grants  Officer and
the Recipient once the satellite has been launched.

                  21.2.2.  In the event that the Grants  Officer  terminates the
agreement,  in accordance with paragraphs  21.2.1.  (a) or (b) above, the Grants
Officer  shall  notify  the  Recipient  in writing  of the  termination  and its
effective date.

ARTICLE 22.  FORCE MAJEURE

<PAGE>

         Neither  party shall be in breach of this  Agreement for any failure to
perform caused by any event beyond its reasonable  control and not caused by the
fault or  negligence  of that  party.  In the event such a force  majeure  event
occurs,  the party unable to perform  shall  promptly  notify the other party in
accordance  with Article 18,  Notices,  above,  and shall in good faith continue
performance to the extent reasonably possible.

ARTICLE 23.  CLAIMS, DISPUTES, AND APPEALS

         23.1.  Recipient Claims

         The Recipient  shall submit claims arising out of this Agreement to the
Grants  Officer in writing for  decision.  Claims  shall  specify the nature and
basis for the relief requested, and shall include all data and relevant facts in
support of the claim.

         23.2.  DOD Component Claims

         Claims by a DOD Component shall be the subject of a written decision by
the Grants Officer.

         23.3.  Alternative Dispute Resolution (ADR)

         The  parties  shall  endeavor to agree upon an ADR  technique  (such as
discussions,  mediation,  or mini-trial) appropriate to resolve any dispute, and
they shall use ADR to the maximum

extent practicable.

         23.4.  Grants officer decisions

                  23.4.1. Within 60 calendar days of receipt of a written claim,
the Grants Officer shall:
                  (a) Prepare a written decision,  which shall include the basis
for the  decision,  the relevant  facts on which the decision is based,  and the
identity and address of the cognizant Grant Appeal Authority; or
                  (b) Notify the  Recipient of a date when the decision  will be
rendered.  The notice shall address why  additional  time is needed and what, if
any,  additional  information  is required from the Recipient to adjudicate  the
claim.

                  23.4.2.  The  Grants  Officer's  decision  is  final,   unless
appealed.  In the event of an appeal,  the  parties  shall  endeavor  to use ADR
procedures to the maximum extent practicable.

         23.5.  Formal Administrative Appeals

                  23.5.1. Grant Appeal Authority.  The Executive Director of the
Acquisition  Department  is ONR's  Grant  Appeal  Authority  to  decide  formal,
administrative appeals under this Agreement. If the Executive Director is unable
to serve in this capacity, the Deputy Chief of Naval Research shall so serve.

<PAGE>

                  23.5.2.  The Recipient may appeal a Grants Officer's  decision
within 90 calendar days of receiving the decision by filing a written  notice of
appeal with the Grant Appeals Authority and the Grants Officer.

                  23.5.3.  If the parties  elect to use ADR,  the  Recipient  is
permitted an additional 60 calendar days to file the written notice of appeal in
(b), above.

                  23.5.4. Appeal File. Within 30 calendar days of receipt of the
notice of appeal, the Grants Officer shall forward to the Grant Appeal Authority
and the Recipient the appeal file,  which shall include  copies of all documents
relevant to the appeal.  The Recipient may supplement  the file with  additional
documents  it deems  relevant.  Either  party  may  supplement  the file  with a
memorandum  in support  of its  position,  and the Grant  Appeal  Authority  may
request additional information from the parties.

                  23.5.5  Decision.  The appeal  shall be decided  solely on the
basis of the  written  record,  unless  the Grant  Appeal  Authority  decides to
conduct  fact-finding  or an oral  hearing on the appeal.  Any  fact-finding  or
hearing shall be conducted  using  procedures  that the Grants Appeal  Authority
deems appropriate.

                  23.5.6.  Representation.  The Recipient may be  represented by
counsel or any other  designated  representative  in any claim,  appeal,  or ADR
proceeding  brought pursuant to this section,  as long as the  representative is
not otherwise prohibited by law or regulation from appearing before ONR.

         23.6.  Non-exclusivity of remedies

         Nothing in this section is intended to limit the  Recipient's  right to
any remedy under the law.

ARTICLE 24. ASSIGNMENT OF CLAIMS

         24.1.  Pursuant to the  provisions  of the  Assignment of Claims Act of
1940,  as  amended,  31 U.S.C.  203, 41 U.S.C.  15,  claims for monies due or to
become  due the  Recipient  from the  Government  under  this  agreement  may be
assigned to a bank, trust company, or other financial institution, including any
such Federal  institution.  Any such assignment or re-assignment shall cover all
amounts payable under this agreement and not already paid, and shall not be made
to more than one party as agent or trustee for two or more parties participating
in such financing.  All assignment and re-assignment final decisions are subject
to review and approval by the cognizant awarding Grants Administration Officer.

         24.2. Copies of this agreement, or any plans, specifications,  or other
similar document relating to work under this agreement,  if marked "TOP SECRET",
"SECRET",  "CONFIDENTIAL",  or "U.S. GOVERNMENT USE ONLY" shall not be furnished
to any assignee of any claim arising under this agreement,  or to any person not
entitled to receive the same,  without the prior  written  authorization  of the
Grants Officer.

ARTICLE 25.  GOVERNING LAW / ORDER OF PRECEDENCE / REGISTRATION

<PAGE>

         25.1 STDC shall obtain a U.S.  registration  for the NEMO spacecraft in
accordance with the  "Convention on Registration of Objects  Launched into Outer
Space,"  (Done at New York January 14, 1975;  entered into force  September  15,
1976) on or before the NEMO Pre-Ship Review (PSR).

         25.2.  This agreement  shall be enforced and  interpreted in accordance
with applicable  federal laws and  regulations,  directives,  circulars or other
guidance. Federal laws and regulations shall govern in the event of any conflict
with the provisions of this agreement.

ARTICLE 26. ENTIRE AGREEMENT

         This Agreement with  Attachments 1, 2, 3, and 4 constitutes  the entire
agreement  between  the  parties   concerning  the  subject  matter  hereof  and
supersedes any prior understanding or written or oral agreement relative to said
matter.

ARTICLE 27.  CERTIFICATIONS

         The following Certifications, which have been executed by the Recipient
prior to award of this  Agreement and are on file with the issuing  office,  are
hereby incorporated herein by reference:  (1) Certification Regarding Debarment,
Suspension, and Other Responsibility Matters - Primary Covered Transactions,  32
CFR Part 25, Appendix A; (2) Certification Regarding Lobbying,  Appendix A to 32
CFR Part 28; and (3) Certification  Regarding Drug-Free Workplace  requirements,
Alternate I or II as appropriate, Appendix C to 32 CFR Part 25.

ARTICLE 28.  NONDISCRIMINATION

         By signing this agreement or accepting funds under this agreement,  the
Recipient  assures  that  it  will  comply  with  applicable  provisions  of the
following national policies prohibiting discrimination:

         (a) On the basis of race color, or national origin,  in Title VI of the
Civil  Rights Act of 1964 (42 U.S.C.  2000d,  et seq.),  as  implemented  by DoD
regulations at 32 CFR part 195.

         (b) On the basis of race, color, religion,  sex, or national origin, in
Executive  Order  11246 (3 CFR,  1964-1965  Comp.  p. 339),  as  implemented  by
Department of Labor regulations at 41 CFR part 60.

         (c) On the  basis of sex or  blindness,  in  Title IX of the  Education
Amendments of 1972 (20 U.S.C. 1681, et seq.)

         (d) On the  basis  of age,  in the Age  Discrimination  Act of 1975 (42
U.S.C. 6101, et seq.), as implemented by Department of Health and Human Services
regulations at 45 CFR part 90.

         (e) On the basis of handicap,  in Section 504 of the Rehabilitation Act
of 1973 (29 U.S.C. 794), as implemented by Department of Justice  regulations at
28 CFR part 41 and DoD regulations at 32 CFR part 56.

<PAGE>

ARTICLE 29.  ORASIS

         29.1. The ORASIS License Agreement must be signed within six (6) months
of the  effective  date of this  Agreement.  Failure to have a  mutually  signed
license  agreement is an adequate basis for the Grants Officer to terminate this
Agreement under Article 21.2.1. TERMINATION.

         29.2. To assure a satisfactory level of perfromance,  use of any system
other than  ORASIS in the  performance  of work under  this  Agreement,  must be
specifically approved by the Agreement Technical Manager.

                                END OF AGREEMENT
<PAGE>

                                                                December 1, 1997

ATTACHMENT 1.  STATEMENT OF WORK

OVERVIEW OF THE PROGRAM

The  objective  of the NEMO  Program  is to  develop  and fly a  satellite-borne
hyperspectral  earth-imaging (HSI) system and to collect and process the imagery
data to meet  government  science and technology  requirements  as well as those
from the  commercial  sector.  The program is designed to meet the unique  naval
requirements  for worldwide  environmental  littoral data and to meet commercial
requirements  by providing  data that will be useful to several  segments of the
earth imaging market including petroleum and mineral  exploration,  agriculture,
and environmental assessment and remediation.

The NEMO  satellite  will be launched in the second  quarter  calendar 2000. The
NEMO  sensors will collect  earth and ocean  imagery data in 210 spectral  bands
over the entire  visible-near  infrared (VNIR),  0.4 um to 1.0 um, and shortwave
infrared  (SWIR),  1.0  um  to  2.5  um,  bandpass.   The  system  will  have  a
signal-to-noise  ratio of greater  than 200:1 in the VNIR and greater than 100:1
in the SWIR. These  characteristics  make the NEMO design particularly  suitable
for collecting  imagery of the dark ocean,  which typically has a reflectance of
less than 5%. The  resultant  imagery  will have a  geolocation  accuracy  of 30
meters,  without ground reference controls. The collected images will enable the
science and technology  evaluation of phenomenology in the littoral environment.
The images will address  critical science and technology needs of the government
and  of  the  scientific  and  commercial   imaging   communities  by  providing
hyperspectral imagery with moderate spatial resolution.

THE NEMO SYSTEM

Technical Approach
The technical approach incorporates advanced technologies (hyperspectral imagery
(HSI) sensing, advanced real-time processing algorithms,  and real-time on-board
gigaflop  parallel  processing)  with  commercially   available  spacecraft  bus
technology to achieve a low-cost,  high-performance mission. Mission development
is  scheduled  for 36 months  for a year  2000  launch  and up to five  years of
operation. The primary features and design approach for the NEMO sensor payload,
spacecraft (S/C), and mission operations are as follows:

Sensors (WBS 3.0): The NEMO sensor imaging payload (SIP) consists of two imaging
instruments  and support  electronics:  the coastal ocean  imaging  spectrometer
(COIS) and a coregistered  panchromatic  imaging camera (PIC), which incorporate
state-of-the-art  designs and component  technology for improved performance and
reliability.  The NEMO  design will  employ two high  performance,  unobstructed
off-axis  telescope  designs  for the COIS and  PIC.  The COIS  will use a basic
prism-grating-prism  spectrometer (PGP) design with two separate 1024X1024 focal
plane arrays for the VNIR and SWIR spectra capture.  The aperture of the COIS is

<PAGE>

12 cm. The two arrays are  co-aligned and image a 30 km swath on the ground from
a satellite altitude of 605 km with a ground sample distance (GSD) resolution of
60 meters for continuous imaging or 30 meters using ground motion  compensation.
The PIC uses an all refractive  telescope design with an aperture of 14.5 cm. to
simultaneously  image the 30 km swath and produces a panchromatic  image (0.5 um
to 0.7 um wavelength range) at a 5 meter GSD. The PIC and COIS are coregistered,
permitting  the images from the two sensors to be fused during  processing.  The
resulting    image   has   most   of   the    usefulness    of   data   from   a
high-spatial-resolution  HSI system, but with significant savings in cost, mass,
and quantity of data.

ORASIS (WBS 2.0, 4.0): NEMO employs NRL's Optical  Real-time  Adaptive  Spectral
Identification System1 (ORASIS), an automated and end-to-end HSI data processing
system. ORASIS is unique and, like the hyperspectral sensor itself,  critical to
the viability of the program.  Developing and demonstrating ORASIS technology in
space  is  a  key  Science  and  Technology  (S&T)  objective  of  NEMO.  ORASIS
significantly  reduces the amount of data that NEMO must transmit to the ground.
Further, ORASIS contains a unique, automated, and adaptive signature recognition
capability, providing increased efficiency in data set analysis. It is important
to note  that  while  ORASIS  is  fully  automated,  it is also  computationally
intensive,  requiring the satellite to have an on-board  processor with gigaflop
capability.  A  significant  NEMO S&T  goal is the  development  of the  imagery
on-board   processor  (IOBP)  for  real-time  ORASIS  processing   on-board  the
spacecraft.

Spacecraft (WBS 5.0): NEMO is based on Space  Systems/Loral's  (SS/L's) low-cost
bus developed for Globalstar2,  a satellite-based,  wireless  telecommunications
system. The Globalstar constellation consists of 56 satellites. The satellite is
three-axis stabilized and consists of a trapezoidal main body and two deployable
solar arrays.  The  off-the-shelf  satellite bus mass is about 450 kg,  provides
over 1,500 watts of power at the end of its life, and is designed to operate for
a minimum of 7 1/2 years.  Use of this satellite for NEMO presents an innovative
technical approach with long-term payoffs for the remote sensing community.
Modifications to the bus include the following:

         |X|  Removing the communication deck and replacing it with NEMO's
              sensor payload deck

         |X|  Adding a 48-Gbit solid state data recorder (SSDR) and payload data
              control electronics

---------------
1.  Patent pending by the NRL.


2   Globalstar is a trademark of Loral QUALCOMM Satellite Services,
    Incorporated.  (C)Globalstar L.P. 1996. All Rights Reserved.

<PAGE>

         |X|  Adding an improved attitude control system, including new on-board
              processing electronics (OBPE)


         |X|  Modifying the spacecraft's power distribution system


         |X|  Adding a high-rate  downlink  transmitter to transmit payload data
              and telemetry, tracking, and control (T, T & C) information to the
              ground and an S-band  receiver to receive  tasking and operational
              instructions from the ground.

Mission  Operations (WBS 8.0):  NEMO's  sun-synchronous  polar orbit crosses the
equator  at the same time each orbit  (10:30  a.m.) to ensure  consistent  image
quality and minimal  cloud  cover.  Additionally,  regular  (7-day)  revisits to
selected  sites allow  long-term  environmental  feature  monitoring  and change
analysis.  NEMO collects  imagery in its ascending  orbit,  stores the resulting
data in its on-board  SSDR,  and downlinks the  information  to a central ground
station at 150 Mbps,  thereby  allowing global  collection of HSI data. Data are
transferred  to a facility in the  Washington,  D.C.,  area for  processing  and
archiving. This same facility provides satellite tasking, image processing,  and
data  archiving  using  a  sophisticated   distributed  computing   environment.
High-speed   processors  and  advanced  software  algorithms  provide  automated
processing of thousands of images to a standard data product  within a few hours
of collection.

RESPONSIBILITIES OF THE PARTNERS AND SUPPLIERS

The NEMO Program  involves  industry and government  parties actively engaged in
spacecraft  development,  launch and operation,  ground systems  development and
operation,  and the  processing of imagery data.  Space  Technology  Development
Corporation  (STDC) and its partners and  suppliers  will carry out the program.
The  partners and  suppliers  are the Naval  Research  Laboratory  (NRL),  Space
Systems/Loral (SS/L),  AlliedSignal  Technical Services Company (ATSC),  Applied
Coherent Technologies (ACT), and Science Applications  International Corporation
(SAIC).

The specific tasks that must be performed in the NEMO program are listed in this
Statement of Work,  and the specific  organizations  that will perform each task
are identified.  As the Recipient,  STDC will manage the execution of this award
and the  business  relationships  of  each  of its  industry  partners  and,  in
conjunction with the NRL, will direct and manage all NEMO  activities.  STDC has
delegated  the  day-to-day  program  execution  and systems  engineering  of the
developmental phase of the Program (up until 60 days after launch) to the NRL.

Table  1-1  summarizes  the  roles of each  participant  by the  Work  Breakdown
Structure, broken down as necessary for visibility into important areas.

<PAGE>

      WBS           DESCRIPTION                                  SOURCE
     NUMBER

      1.0           System Engineering/Program Management        STDC, NRL
      2.0           Science and Algorithms
                       ORASIS                                    NRL
                       Radiance Calibration/Atmospheric
                         Correction                              NRL
                       Collateral Navy R&D Algorithms            NRL
      3.0           HSI Sensors
                       SWIR Camera                               SAIC, NRL
                       VNIR Camera                               SAIC, NRL
                       SWIR/VNIR Telescope                       SAIC, NRL
                       Panchromatic Camera                       SAIC, NRL
                       Optical Bench                             NRL
      4.0           IOBP                                         NRL
      5.0           Spacecraft Bus
                       Spacecraft                                SS/L, NRL
                       Electrical System Mods                    NRL, STDC, SS/L
                       Mechanical System Mods                    NRL, SS/L
                       Heat Pipes for Deck                       STDC, NRL
                       Star Tracker Cameras                      STDC, NRL
                       Inertial Reference Units                  STDC, NRL
                       X-band Hi-rate transmitter                STDC, NRL
                       S-band Low-rate transmitter               STDC, NRL
                       Solid State Recorder                      STDC, NRL
      6.0           Launch and Launch Systems                    SS/L
      7.0           Ground Systems                               ATSC
      8.0           Mission Operations & Data Analysis           STDC, ACT,
                                                                 ATSC, NRL
Table 1-1.  Participant Roles by WBS

GENERAL MANAGEMENT OF THE PROGRAM (WBS 1.0)
The policies and  practices  with respect to the  management  of the program and
with respect to the Parties  (STDC,  NRL, and ONR) are described in Article 5 of
this Agreement.

The  organizations  that will be  "performers" in the NEMO project are STDC, the
NRL, and the four additional  members of the NEMO team. As indicated above, they
are SS/L,  ATSC, SAIC, and ACT. The work to be accomplished by the performers is
described below. In addition, other performers may be added to the NEMO team.

<PAGE>
STDC  and  NRL  will  manage  the  project,  utilizing  a  Management  Committee
comprising one member from each of the  commercial and government  partners plus
the Agreement  Technical  Manager (ATM). In conjunction  with the NRL, STDC will
provide for technical  and  configuration  management,  product  assurance,  and
safety during the planning, design, and assembly phases of the program.

STDC,  in  conjunction  with the NRL, will provide all internal  management  and
planning to meet the performance,  schedule,  technical,  and cost objectives of
the program.  STDC will coordinate the activities of the  participants  and will
provide the information to meet the reporting  requirements of the ONR. STDC and
NRL will plan and conduct Quarterly Program Review meetings with ONR's ATM.

STDC and the NRL will  conduct  formal  meetings  at critical  junctures  in the
program,  including a Systems  Requirements  Review,  Preliminary Design Review,
Critical Design Review, Test Readiness Review, and Mission Readiness Review.

Throughout  the program  STDC and NRL will hold weekly  management  meetings and
bi-weekly  technical  meetings.  The purpose of these meetings will be to ensure
accountability   for   program   status;   to   indicate   trends   in   program
accomplishments; to control changes in the program; and to manage costs.

SPECIFIC DUTIES

STDC WILL:

         |X|  Manage the NEMO program in conjunction with the NRL and coordinate
              the work of all the performers.  STDC will have responsibility for
              the  commercial  portion of the program  and for the  programmatic
              aspects of STDC's subcontracts.  In some cases, STDC will select a
              vendor in  consultation  with the NRL and act as purchasing  agent
              for the item to be procured. (WBS 1.0)

         |X|  Be responsible for reporting, financial, and administrative
              matters.  (WBS 1.0)

         |X|  Provide star trackers for the spacecraft.  (WBS 5.0)

         |X|  Provide the software system for the processing of imagery data for
              commercial products.  (WBS 8.0)

         |X|  Make preparations for the establishment of the EarthMap  business.
              STDC  also  will   discuss  with  ONR/NRL  the  plans  for  future
              satellites and the missions that those satellites may carry out on
              behalf of the Navy. (Outside the scope of this Agreement.)
<PAGE>

         |X|  Provide  post-launch  operation of the  satellite,  including  the
              generation of STDC tasking orders to be forwarded to ATSC. Provide
              the ONR ATM with a list of requested and completed tasking weekly.
              (WBS 7.0, 8.0)

THE NRL WILL:

         |X|  Provide  day-to-day  program execution and systems  engineering to
              the program up until 60 days after launch.  NRL will implement the
              Statement of Work,  will  coordinate the Annual Program Plan, will
              be responsible for the government portion of the program, and will
              be responsible for mission success. (WBS 1.0)

         |X|  Provide systems engineering for the spacecraft, including the
              integration of the components into the spacecraft and the
              integration of the spacecraft into the launch vehicle.
              (WBS 1.0, 3.0, 4.0, 5.0)

         |X|  Design and, in some cases, develop spacecraft components that will
              be necessary for NEMO's remote-sensing mission.  (WBS 4.0, 5.0)

         |X|  Modify the spacecraft and install and integrate those components,
              including the payload deck and the camera that are specific to the
              NEMO mission.  (WBS 5.0)

         |X|  Perform integration and test of the payload deck with the
              spacecraft. (WBS 5.0)

         |X|  Prepare the spacecraft for integration with the launch vehicle and
              supervise the integration. (WBS 1.0, 5.0)

         |X|  Support the launch and direct the operation of the  spacecraft
              for a period  of time  that will  include  placement  in orbit and
              initial maintenance of the orbit, but will not exceed two months.
              (WBS 1.0, 8.0)

         |X|  Provide the ORASIS software system for the processing and
              compression of imagery data, and provide the on-board processor
              hardware (IOBP)for on-board imagery data processing.(WBS 2.0, 4.0)

         |X|  Provide the COIS instrument calibration algorithms, and modify
              existing atmospheric correction Algorithms for the processing and
              analysis of the NEMO instrument data.  Incorporate additional
              Navy oceanographic algorithms, from collateral Navy R&D work, to
              produce processed oceanographic products such as: diffuse
              attenuation coefficient, surface reflectance, colored dissolved
              organic matter, chlorophyll content, suspended sediment, bottom
              reflectance, and bathmetry. These product algorithms will be drawn
              from the literature and from ongoing work currently funded under
              other ONR/NRL core projects.  The algorithms provided will be
              validated prior to launch using data collected as part of the
              ONR/NRL core Spectral Signatures ARI and the ONR CoBOP and HyCODE
              programs, and with NEMO during the first 60 days after launch.
              Each algorithm will have a Theoretical Basis Document describing
              the physical basis for the algorithm, the documented code and a
              demonstration of its accuracy using the validation data sets.
              (WBS 2.0)

<PAGE>

         |X|  Integrate some of the programs that the Navy will use to develop
              applications for hyperspectral imagery from NEMO.  (WBS 2.0, 8.0)

         |X|  Design some of the science experiments that will be performed by
              NEMO, including the collection and analysis of hyperspectral data
              and the extraction of information from the data. (WBS 2.0, 8.0)

         |X|  Design and incorporate into the NEMO spacecraft a pre-configured
              interface to permit the integration of an additional Navy payload.
              Provide a baseline description of a nominal pre-configured
              interface to STDC by the time of the CDR.  (WBS 1.0, 5.0)

         |X|  During the operational phase, support the operation of the
              satellite as necessary, and serve as the coordinator of Government
              requests for imagery.  (WBS 1.0, 8.0)

SS/L WILL:

         |X|  Provide, at a reduced cost, a standard Globalstar spacecraft to be
              modified for use as the NEMO spacecraft.  (WBS 5.0)

         |X|  Support all of the activities of the NRL that are related to the
              modification of the spacecraft and its integration with the launch
              vehicle, and provide launch services and the launch itself.  (WBS
              5.0, 6.0)

ATSC WILL:

         |X|  Bear primary  responsibility  for all operations of the spacecraft
              beginning  sixty days after  launch and for its health and welfare
              in orbit, and provide mission planning, tasking services, and data
              collection on the ground. (WBS 7.0)

         |X|  Establish a spacecraft operations center from which the spacecraft
              will be operated.  The center will be located in the area of
              Washington, D.C.  (WBS 7.0)

         |X|  Establish  ground  stations to transmit  commands to the satellite
              and to collect the imagery  data that will be  transmitted  by the
              satellite.  One  ground  station  will be  located  in  Fairbanks,
              Alaska,  and will be  operable  at the time of launch.  The second
              ground  station,   at  a   yet-to-be-selected   northern  European
              location,  will be in operation six months after launch. (WBS 7.0)
              (When  imaging   operations   begin,  STDC  will  provide  tasking
              instructions  to  ATSC  based  on its  own  requirements  and  the
              requirements of the Navy.)
<PAGE>

ACT WILL:

         |X|  Develop/provide  software for the  processing of imagery data to
              level 1B and  algorithms  for geolocation, fusing, and  mosaicing
              of the imagery. (WBS 8.0)

         |X|  Develop archival and computational systems for the processing,
              archiving, and distribution of imagery data from NEMO. (WBS 8.0)

         |X|  Distribute imagery data to the Navy (NRL) in an electronic
              medium. (WBS 8.0)

SAIC WILL:

         |X|  Provide the hyperspectral and panchromatic sensors. (WBS 3.0)

         |X|  Help the NRL integrate the sensor package with the spacecraft.
              (WBS 3.0)

CRITICAL MILESTONES
There are twelve critical milestones in the NEMO program:
         a.       Systems Requirements Review
         b.       Preliminary Design Review
         c.       Critical Design Review
         d.       Confirmation of the design of the IOBP
         e.       Demonstration of ORASIS operation with the IOBP
         f.       Spacecraft bus delivered to NRL
         g.       Sensor delivery to NRL for integration
         h.       Test Readiness Review
         i.       Mission Readiness Review
         j.       Shipment of satellite to launch site
         k.       Launch
         l.       Demonstration of spacecraft operation and data quality

PHASES OF THE PROGRAM
The NEMO  Program  will be  accomplished  in six phases,  some of which will run
concurrently.  The first five  phases  define the entire  program  from  concept
development  through launch and initial  operation of the spacecraft,  including
initial data acquisition and preliminary analysis of the data. Phase VI provides
for the continuing operation of the spacecraft after the initial 60-day checkout
period.

The phases of the program are:

<PAGE>
         Phase I.      Concept and Preliminary Design
         Phase II.     Detailed Design and Development of Software and Hardware
         Phase III.    Hardware Fabrication and Acquisition, and Development of
                       Facilities
         Phase IV.     Delivery of Flight Hardware and Software, and Integration
                       and Test
         Phase V.      Launch Vehicle Integration, Launch, Initial Flight
                       Operations, and Data Collection and Processing
         Phase VI.     Continuing Flight Operations, and Data Collection and
                       Processing


TASKS TO BE PERFORMED IN EACH PHASE

Phase I.  Concept and Preliminary Design
The NEMO  program is  defined by a  statement  of the  objectives,  leading to a
systematic definition of the payload and sensor requirements. The result will be
a clear  definition of the performance and functional  requirements for the NEMO
sensor  system.  The  payload  definition  will  permit the  development  of the
requirements for the spacecraft bus architecture.

Activities during Phase I will concentrate on analyzing trade-offs in the design
of the NEMO  sensors,  the ORASIS  algorithm,  and  spacecraft  bus  subsystems.
Efforts will include evaluating selected breadboards, algorithm verification and
validation, and extensive performance modeling. Preliminary design, tolerancing,
and error budgets will be derived.  Also,  Phase I will include initial planning
for the  spacecraft  development  and for  launch  vehicle  and  ground  segment
activities. Phase I will conclude with the Preliminary Design Review.

Phase II. Detailed Design and Development of Software and Hardware
During Phase II the concepts and preliminary  designs  developed  during Phase I
will be  completed.  The work  will  include  all  drawings  and  specifications
necessary to purchase or fabricate the payload and spacecraft  hardware required
to modify and integrate  the  spacecraft.  Included  will be the sensor  system,
solid state data  recorder,  imaging  on-board  processor,  flight  electronics,
spacecraft modifications, and other hardware that may be identified during Phase
I.

Phase  II also  will  be used to  design  the  integration  requirements  of the
spacecraft  including the launch vehicle and ground segment. The Critical Design
Review (CDR) will be conducted during this phase.

Fabrication,  integration and test of the sensors and  electronics  brassboards,
including  calibration and functional testing,  will be accomplished during this
phase.

Documentation  such  as  system  specifications,   detailed  drawings,  assembly
drawings,  and  integration  and test plans and  procedures  will be  finalized.
Continued development of the ground system, facilities, and system software will
be performed.

<PAGE>

The science and algorithm effort performed during this phase will concentrate on
refining the ORASIS algorithm for on-board use on the NEMO spacecraft to provide
data  compression,  which will permit extended area coverage.  Compression  with
ORASIS  permits  several  different  compression  options  that affect the total
information loss and the compression ratio.  Utilizing airborne sensor data that
closely  approximates the performance of the COIS sensor, a comparative analysis
of the compression options will be performed.  During this phase the development
of other algorithms for the processing and analysis of the data will continue.

This effort involves the evaluation of several science  algorithms that are used
for hyperspectral analysis product generation.  These algorithms will be applied
to scenes  compressed at different ratios to examine the impact of the algorithm
on data loss. The core algorithms of ORASIS that are used for the  determination
of the  endmembers  will be optimized to produce more accurate  endmembers.  The
improved algorithms will be incorporated in the flight software and tested.

Work will also  continue  on  developing  ORASIS to run on the IOBP and with the
sensor  systems.  On each of the IOBP systems  ORASIS will be ported to, and run
through various tests to determine processing performance and ORASIS development
needs.  Lessons  learned from the ORASIS  testing on the prototype  IOBP will be
applied to the  development of the IOBP  brassboard,  which will begin following
the completion of the prototype. ORASIS upgrades and extensions required to meet
science and processing  requirements will be under continued  development during
this process.

Scaling studies on the performance and timing of the ORASIS software for several
types of terrain will continue. Airborne data using several scenes over coastal,
urban, and land regions will be used for the scaling studies.


Phase III.  Hardware Fabrication and Acquisition, and Development of Facilities
Phase III is devoted to the  placing of orders for the  acquisition  of hardware
necessary to build the NEMO  spacecraft,  for the  integration of the spacecraft
systems,  for the integration of the spacecraft with the launch vehicle, and for
the ground support equipment necessary to complete the program.

For critical items such as the sensor system,  periodic  program reviews will be
held with the vendor to assure that  progress is being made in  accordance  with
the agreed-upon development and fabrication plan, and to assure that performance
requirement specifications are being met.

Procurement  and  fabrication of long-lead  hardware items will begin as soon as
specifications  and  designs are  complete,  in some  instances  even before the
completion of Phase I. Some assembly of parts will begin  immediately  after the
Critical Design Review.  Modifications  to the spacecraft bus will begin as soon
as it is delivered to the NRL.

<PAGE>

Phase IV.  Delivery of Flight Hardware and Software, and Integration and Test
When the critical  design is  established  and all subsystems are fabricated and
integrated,  final  spacecraft  integration  and testing will be performed.  The
Phase IV  activities  include the  delivery of flight  hardware  and  mechanical
integration  of the flight  hardware  with the  spacecraft,  followed by full-up
performance and environmental  testing. The integrated spacecraft will be tested
with the ground  systems to verify  equipment  and  software  functionality  and
compatibility with the spacecraft. At the completion of payload integration with
the spacecraft bus and at the completion of system-level testing, the integrated
NEMO  spacecraft  assembly will be shipped to the launch site for processing and
integration with the launch vehicle.

Also, Phase IV includes ground segment integration.

Phase V. Launch Vehicle Integration, Launch, Initial Flight Operations, and Data
Collection and Processing In Phase V, the complete integrated spacecraft will be
delivered to the launch site and will be integrated  with the launch vehicle and
fueled.  Complete  checkout of the  spacecraft  and the launch  vehicle  will be
followed by the launch and placement of the spacecraft into orbit.

After  launch,   mission  operations  activities  will  be  performed  from  the
Spacecraft  Operations  Center  established by ATSC. During the first sixty days
after launch, orbit will be confirmed and command and control functions, payload
operation, and communications between the ground station and the spacecraft will
be verified.

During this sixty days the first imaging data will be collected and processed to
level 1B and entered into the archive.  Proper  operation of the data collection
and data processing and archiving systems will be confirmed.

Phase VI.  Continuing Flight Operations, and Data Collection and Processing
Phase VI will provide for the  continuing  operation of the  spacecraft and will
provide for the  collection,  processing  through level 1B, and archiving of the
imaging data through the life of the satellite. STDC and its industrial partners
will be  responsible  for the  continuing  operation of the  spacecraft and will
provide data to the Navy in accordance with the tasking  instructions  described
in Article 9 of this Agreement.

NRL will support the operation of the satellite as  necessary,  receive  imagery
requests from government agency sources,  prioritize the government requests and
forward them to STDC,  receive the imagery data from  STDC/ACT,  and  distribute
imagery data to  requestors.  NRL will  implement any decision to terminate data
access for government  agencies that are found not in compliance  with the terms
of Article 8 of this Agreement.