<PAGE>


                                CONTRACT NO. 104274-B

                         DIRECT BROADCAST SATELLITE CONTRACT

                                       BETWEEN

                             LOCKHEED MARTIN CORPORATION

                                         AND

                  UNITED STATES SATELLITE BROADCASTING COMPANY, INC.

                                 TERMS AND CONDITIONS






                                  PROPRIETARY NOTICE

THIS DOCUMENT AND THE INFORMATION CONTAINED HEREIN ARE PROPRIETARY TO USSB AND
LOCKHEED MARTIN CORPORATION AND ARE TO BE USED BY THE RECIPIENT SOLELY FOR THE
PURPOSES OF USSB'S CONTRACT WITH LOCKHEED MARTIN CORPORATION.

<PAGE>

                                  TABLE OF CONTENTS

ARTICLE                                                                     PAGE

Article 1. Definitions                                                         1
Article 2. Scope of Work                                                       2
Article 3. Price                                                               3
Article 4. Deliverable Items and Delivery Schedule                             5
Article 5. Progress and Milestone Payments                                     5
Article 6. In-Orbit Incentive Payments                                         7
Article 7. Spacecraft On-Orbit Flight Operation Services                      15
Article 8. Deficiencies Noted in Launched Spacecraft                          18
Article 9. Options for Backup Spacecraft, On-Orbit Spacecraft Delivery        18
Article 10. Price Reduction for Late Delivery                                 20
Article 11. Access to Work in Progress and Data                               21
Article 12. Title and Assumption of Risk                                      21
Article 13. Inspection and Final Acceptance                                   22
Article 14. Indemnification                                                   24
Article 15. USSB's Right to Terminate                                         26
Article 16. Changes                                                           27
Article 17. Taxes and Duties                                                  28
Article 18. Excusable Delays                                                  28
Article 19. Termination for Default                                           29
Article 20. Assignment                                                        31
Article 21. Arbitration                                                       31
Article 22. Rights in Data                                                    33
Article 23. Public Release of Information                                     33
Article 24. Patent Indemnity                                                  34
Article 25. Warranty                                                          36
Article 26. Notices, Reports and Documentation Deliverables                   37
Article 27. Storage                                                           38
Article 28. Applicable Law                                                    39
Article 29. Additional Representations, Warranties and Covenants of
            the Parties                                                       39
Article 30. Responsibility for Design, Drawings and Specifications            40
Article 31. Disclosure and Use of Proprietary Information                     40
Article 32. Integration                                                       42
Article 33. Permits and Licenses                                              42
Article 34. Contractor Provided Office Space                                  43


<PAGE>

                            TABLE OF CONTENTS (CONTINUED)

ARTICLE                                                                     PAGE

Article 35. Interparty Waiver of Liability                                    44
Article 36. Launch Vehicle Designation                                        44
Article 37. Miscellaneous Provisions                                          44
Article 38. Limitation of Liability                                           45


                                         iii

<PAGE>

                                 TERMS AND CONDITIONS

THIS CONTRACT is entered into this 31st day of December, 1996, by and between
Lockheed Martin Corporation, a corporation organized and existing under the laws
of the State of Maryland acting through Lockheed Martin Telecommunications
(hereinafter referred to as "Contractor") having a place of business at 1272
Borregas Avenue, Sunnyvale, CA 94089-1310, and United States Satellite
Broadcasting Company, Inc. (hereinafter referred to as "USSB"), a corporation
organized and existing under the laws of the State of Minnesota with offices at
3415 University Avenue, St. Paul, Minnesota 55114.

    WITNESSETH THAT:

    In consideration of the mutual covenants set forth herein, the Parties
    agree as follows:

ARTICLE 1.    DEFINITIONS

A.  In this Contract and its Attachments and Exhibits, unless otherwise
    specifically defined within the context of individual Articles, the
    following terms shall have the meanings stated hereunder:

    1.   ACCEPTANCE TESTING - Any system level testing carried out in
         accordance with the terms of, or in the performance of, this Contract
         whether through a factory acceptance test under the Comprehensive Test
         Plan or In-Orbit Testing as defined in Exhibit C.

    2.   COMPREHENSIVE TEST PLAN - The overall plan used for testing the
         Spacecraft, incorporated as Exhibit C to this Contract.

    3.   CONTRACT - This Contract, including its Amendments and Modifications,
         and the Exhibits attached to and incorporated into it.

    4.   DATA AND DOCUMENTATION - The written information to be delivered by
         Contractor to USSB in accordance with Exhibit B, Table 1 of this
         Contract.

    5.   EFFECTIVE DATE OF CONTRACT OR EDC - The effective date of this
         Contract as defined in Article 37 of this Contract.

    6.   INTENTIONAL IGNITION - The Parties agree to amend this Contract no
         later than the date launch risk insurance is obtained in order to
         incorporate the definition of Intentional Ignition contained in the
         Launch Vehicle services contract for the Launch Vehicle


                                          1

<PAGE>

         selected pursuant to Article 36, which definition shall also be
         incorporated into  the launch risk insurance policy.

    7.   LAUNCH VEHICLE - The launch vehicle selected  by USSB under the Launch
         Vehicle services contract for the launching of the Spacecraft
         purchased hereunder.

    8.   LAUNCH AND MISSION OPERATIONS SERVICES - The services provided by
         Contractor and purchased by USSB under this Contract in accordance
         with Article 2, and as defined in Exhibit B.

    9.   ON-ORBIT FLIGHT OPERATIONS SERVICES - The telemetry, tracking and
         control services provided by Contractor and purchased by USSB under
         this Contract in accordance with the terms of Article 7, and as
         defined in Exhibit B, paragraph 15.

    10.  PARTIES - Collectively means USSB and the Contractor. "Party"
         individually means USSB or the Contractor as the case may be.

    11.  PRODUCT ASSURANCE PLAN - The quality assurance plan set forth in
         Exhibit D to this Contract.

    12.  SPACECRAFT - The satellite purchased by USSB with the attributes set
         out in Exhibit A. For purposes of this Contract, the term "Spacecraft"
         is synonymous with the term "Satellite."

    13.  WORK - The design, manufacture, construction, test, and delivery of
         the Spacecraft, performance of the Launch and Mission Operations
         Services and delivery of the Data and Documentation.

ARTICLE 2.    SCOPE OF WORK

The Contractor shall provide or cause to be provided all personnel, material,
services and facilities necessary to design, construct, test, and shall deliver
one (1) Spacecraft, perform the Launch and Mission Operation Services, perform
(subject to Article 7) the On-Orbit Flight Operations Services, and provide Data
and Documentation in accordance with all the provisions of this Contract,
including the Exhibits listed below which are attached hereto and hereby made a
part of this Contract:

    Exhibit A      Spacecraft Performance Specification, dated 31 December 1996
    Exhibit B      Statement of Work, dated 31 December 1996


                                          2

<PAGE>

    Exhibit C      Comprehensive Test Plan, dated 31 December 1996
    Exhibit D      Product Assurance Plan, dated 31 December 1996

The Work shall be performed in accordance with and shall conform to Exhibits A,
B, C and D.  In the event of a conflict between this Contract and the
above-listed Exhibits, the following order of precedence shall apply in
resolving such conflict:

    1 - The Terms and Conditions specified in the Articles of this Contract
    2 - Exhibit B - Statement of Work
    3 - Exhibit A - Spacecraft Performance Specification
    4 - Exhibit C - Comprehensive Test Plan
    5 - Exhibit D - Product Assurance Plan

ARTICLE 3.  PRICE

A.  For the full, satisfactory, and timely performance of the Work by the
    Contractor in accordance with all the provisions of this Contract, USSB
    shall pay the Contractor the Total Contract Price set out below, as such
    price may be adjusted in accordance with the provisions of this Contract.
    Except as otherwise provided herein, the Total Contract Price includes all
    transportation and related charges for delivery of the Spacecraft to the
    designated launch site.

B.  Without limiting the obligation of the Contractor to fully perform all the
    Work in accordance with all the provisions of this Contract, it is
    understood that the Total Contract Price is comprised of the following
    items:

    ITEM     QTY.            DESCRIPTION                        PRICE

     1.       1     Spacecraft as defined in Exhibit A

     2.     1 Lot   Launch and Mission Operation Services
                    as defined in Exhibit B

     3.     1 Lot   On-Orbit Flight Operations Services

     4.     1 Lot   Data and Documentation as defined in
                    Exhibit B, Table 1

     5.       --    In-Orbit Incentive Payments

                                       Total Contract Price:
                                       ---------------------

                                          3

<PAGE>

C.  The price for Item 1 of paragraph B is for launch of the Spacecraft on an
    Ariane Launch Vehicle. The price for Item 1, paragraph B will be
    conclusively determined and mutually agreed upon after USSB designates the
    Launch Vehicle in accordance with Article 36.

D.  The price for Item 3 of paragraph B is subject to Article 7, and is also
    subject to an annual escalation under Article 7, paragraph D.

E.  Payment of the price for Item 5 of paragraph B shall be made in accordance
    with Article 6.

F.  On or before February 1, 1997, USSB may request Contractor to provide
    information to USSB regarding a change in the Spacecraft's payload
    configuration to consist of twenty-eight (28) spot beams and 63W TWTAs
    without adjusting the Spacecraft delivery date of twenty-five and one-half
    (25.5) months after EDC.  Upon such request, Contractor shall undertake a
    study effort regarding the implementation plan for the spot beam design for
    such payload configuration (to be performed at Contractor's sole expense),
    and Contractor will propose price, performance specifications and payment
    terms for this requested change as soon as practicable but not later than
    fifteen (15) working days following USSB's request.  The Parties
    understand and agree that, in order to not cause a delay to the Spacecraft
    delivery date, the Parties must agree upon the price, performance
    specifications and payment terms for this requested change no later than
    March 1, 1997.

G.  The Spacecraft shall be shipped at Contractor's expense to the designated
    launch site or to a storage site designated by USSB.  In the event that
    USSB selects a Launch Vehicle that results in a shipment of the Spacecraft
    to a launch site other than Kourou, French Guiana (for launch on an Ariane
    Launch Vehicle) or to a storage site outside the United States, the Total
    Contract Price and the delivery schedule specified in Article 4 shall be
    equitably adjusted.

H.  The prices specified above do not include any costs for security services
    for Spacecraft at the designated launch site. Should the U.S. Government,
    or any other government entity having legal or regulatory launch
    responsibility, require Contractor to provide such security services,
    Contractor shall promptly notify USSB to that effect and USSB shall
    reimburse Contractor for all costs incurred in providing such services, and
    a reasonable profit, within thirty (30) days of receipt of Contractor's
    invoice therefor.


                                          4

<PAGE>

ARTICLE 4.    DELIVERABLE ITEMS AND DELIVERY SCHEDULE

A.  The Spacecraft, Launch and Mission Operations Services, On-Orbit Flight
    Operations Services (subject to Article 7) and Data and Documentation to be
    provided by Contractor under this Contract shall be delivered to USSB in
    accordance with the following schedule.  The Parties agree that the
    following are deliverable items under this Contract:

   ITEM            DESCRIPTION                             DELIVERY DATE

    l.   Spacecraft                                   Twenty-five and one-half
                                                      (25.5) months after EDC

    2.   Launch and Mission Operations Services       As required per Exhibit B

    3.   Data and Documentation                       As required per Exhibit B

    4.   On-Orbit Flight Operations Services          As required per Exhibit B
         (subject to Article 7)

B.  Except with respect to the Spacecraft, delivery shall be deemed to have
    occurred when all the Contract requirements for a deliverable item have
    been satisfactorily fulfilled and the deliverable item has arrived at the
    specified delivery location in a condition fully conforming to the
    provisions of this Contract and, if required by this Contract, has been
    satisfactorily installed at that location.

C.  With respect to a Spacecraft delivered for launch, delivery shall occur at
    the designated launch site upon Contractor's completion of the Launch
    Readiness Review ("LRR") for the Spacecraft and the results of the LRR
    demonstrate that the Spacecraft meets the performance specifications for
    such Spacecraft.  With respect to a Spacecraft delivered to storage,
    delivery shall occur at the Contractor's facility upon Contractor's
    completion of the Pre-Shipment Review ("PSR") for the Spacecraft, and the
    results of the PSR demonstrate that the Spacecraft meets the performance
    specifications for such Spacecraft.

ARTICLE 5.    PROGRESS AND MILESTONE PAYMENTS

A.  Subject to the provisions of paragraph B. of this Article, payments shall
    be made by USSB to Contractor on a monthly basis in accordance with the
    following "Progress Payment Plan."  Payment invoices submitted by the
    Contractor under this plan that comply with the terms of this Contract
    shall be paid by USSB to the Contractor within thirty (30) days of the date
    of invoice. However, no invoice shall be dated earlier than the last day of
    the month to which it applies, and all invoices shall be promptly delivered
    to USSB.  USSB acknowledges and agrees that all payments made represent
    compensation for Work


                                          5

<PAGE>

    performed by Contractor and therefore are not refundable under any
    circumstances except in accordance with the terms of this Contract. In no
    event shall USSB be required to make Progress Payments in excess of the
    payments set forth in the Progress Payment Plan or earlier than the payment
    dates set forth below.

                                PROGRESS PAYMENT PLAN

  PAYMENT                         MONTHLY TOTAL         CUMULATIVE TOTAL
  NUMBER      DATE             ($ IN U.S. MILLIONS)   ($ IN U.S. MILLIONS)
    1         12/31/96
    2         January - '97
    3         February
    4         March
    5         April
    6         May
    7         June
    8         July
    9         August
    10        September
    11        October
    12        November
    13        December
    14        January - '98
    15        February
    16        March
    17        April
    18        May
    19        June
    20        July
    21        August
    22        September
    23        October
    24        11/30/98

B.  The Progress Payment Plan set forth herein is based on Contractor's
    successful, satisfactory, and timely achievement of each milestone set
    forth below. In the event that the Contractor does not achieve a particular
    milestone on or before the date set forth below, the value assigned to that
    milestone shall be deducted from the corresponding month's progress
    payments and any subsequent month's progress payment (but only to the
    extent necessary


                                          6

<PAGE>

    to fully deduct the amount of the uncompleted milestone), and this amount
    shall be payable when the milestone is successfully and satisfactorily
    achieved. Except as specified in the previous sentence, failure to achieve
    a milestone shall not affect any subsequent monthly progress payments.

                               PAYMENT MILESTONE TABLE

                                                            DUE DATE
MILESTONE                                                   (MONTHS       VALUE
  NUMBER           MILESTONE DESCRIPTION                   AFTER EDC)     ($US)

    1     System PDR Held                                      4.0

    2     Structure Subcontract Issued                         7.5

    3     Provide Launch Vehicle services contractor          10.0
          with Spacecraft Preliminary Dynamic Model 

    4     System Critical Design Review Held                  12.5

    5     90% of System CDR Action Items Completed            13.5

    6     Spacecraft Structure Received                       15.0
          (core module/payload panels)

    7     Spacecraft TWTAs Received                           15.5

    8     Spacecraft Antenna Tests Complete                   18.0

    9     Satisfactory Completion of Pre-Shipment             24.0
          Review

C.  Unless otherwise directed in writing by Contractor, all amounts due
    Contractor shall be paid by USSB in United States Dollars and remitted by
    electronic funds transfer to:

    Citibank N.A.
    ABA #021000089
    Lockheed Martin
    Valley Forge Collection Center
    A/C #40678043

ARTICLE 6.    IN-ORBIT INCENTIVE PAYMENTS

A.  In addition to the payments specified in Article 5, USSB will pay the
    Contractor incentive payments for the in-orbit performance of the
    Spacecraft as set forth herein.


                                          7

<PAGE>

B.  For the purposes of this Article, only the four (4) CONUS communications
    channels will be considered and the following definitions shall apply:

    (1)  Successfully Operating Spacecraft -- A Successfully Operating
         Spacecraft is a Spacecraft: (i) that has been Successfully Injected;
         (ii) for which each communications channel is a Successfully Operating
         Communications Channel; and (iii) that has sufficient stationkeeping
         propellant and solar array power to maintain operation for a period of
         fifteen (15) years or 5,479 days (the "Performance Time Period"),
         commencing on the day when the Spacecraft has been positioned in the
         specified orbital slot and has completed in-orbit testing as specified
         in Exhibit C.

    (2)  Successfully Operating Communications Channel -- A Successfully
         Operating Communications Channel is a communications channel which:

         a.   allowing reasonable and agreed tolerances for measurement
              purposes, meets or exceeds the performance specifications
              described in Exhibit A relating to communications RF signals; or

         b.   while not in compliance with the performance parameters of
              Exhibit A, has no measurable reduction in its communications
              capabilities or is capable of being used by USSB for its intended
              commercial communications purposes in the same manner and to the
              same extent as a communications channel described in paragraph
              B.(2)a. above.

         For the purpose of this definition, a communications channel which
         meets the above criteria and which is being used as an in-orbit spare
         or is turned off at USSB's direction shall be regarded as a
         Successfully Operating Communications Channel. Any communications
         channel failure which is or could be corrected by switching to a
         redundant communications channel immediately after the failure is
         discovered shall be deemed to be a Successfully Operating
         Communications Channel.

    (3)  Successfully Injected -- The Spacecraft shall be deemed to have been
         Successfully Injected if, after Intentional Ignition:

         a.   at the time of separation from the Launch Vehicle, the transfer
              orbit perigee altitude error, apogee altitude error, inclination
              error, argument of perigee error, Spacecraft attitude, and
              Spacecraft spin are within or equal to +/-3 sigma limits of


                                          8

<PAGE>

              their specified values; and

         b.   the Launch Vehicle has not, during the launch, diminished in any
              way the operating integrity of the Spacecraft, demonstrable
              through available telemetry or other applicable data; and the
              Spacecraft has not suffered damage as a consequence of causes
              which the Contractor can reasonably demonstrate are not the fault
              of or beyond the reasonable control of Contractor.

         Notwithstanding that the transfer orbit does not meet all of the
         criteria stated in paragraph B.(3)a. above, the Spacecraft shall be
         deemed to have been Successfully Injected if the Spacecraft has
         nevertheless been positioned in its orbital slot as defined in Exhibit
         A, the Spacecraft otherwise performs in accordance with the
         requirements of this Contract, and the then remaining calculated
         operation time period is equal to or greater than the Performance Time
         Period specified in paragraph B.(1) above.

    (4)  Inoperative Communications Channel -- An Inoperative Communications
         Channel is a communications channel which, upon completion of in-orbit
         testing of the Spacecraft, has communications performance degraded to
         such an extent as to preclude its use by USSB for its intended
         commercial communications purposes.  Notwithstanding the foregoing, if
         the communications channel is capable of carrying at least 25% of its
         traffic capacity based upon the parameters specified in Exhibit A, and
         USSB uses or is capable of using such communications channel for its
         intended commercial communications purposes (which purpose shall be
         reasonably documented and reasonably demonstrable prior to the
         occurrence of the inoperability), such use shall be conclusive
         evidence that the communications channel is  not an Inoperative
         Communications Channel.

    (5)  Degraded Communications Channel -- A Degraded Communications Channel
         is a communications channel which is not an Inoperative Communications
         Channel, but which is incapable of actually being operated to the
         levels of communications performance set forth in Exhibit A due to the
         degradation of the communications channel itself.  Notwithstanding the
         foregoing, if the communications channel is capable of carrying at
         least 25% of its traffic capacity based upon the parameters specified
         in Exhibit A, and USSB uses or is capable of using such Degraded
         Communications Channel for its intended commercial communications
         purposes (which purpose shall be reasonably documented and reasonably
         demonstrable


                                          9

<PAGE>

         prior to the occurrence of the degredation), such use will be deemed
         conclusive evidence of at least partial operation.

    (6)  Day -- A Day is any twenty-four (24) hour period from midnight to
         midnight, Greenwich mean time.

C.  In-Orbit Incentive Payments

    (1)  Commencing thirty (30) days after the date that the Spacecraft has
         been positioned in the specified orbital slot and has completed
         in-orbit testing as specified in Exhibit C, USSB will make one hundred
         eighty (180) monthly incentive payments to Contractor in the amount of
         ______________________________________  per month if the Spacecraft is
         either: (i) a Successfully Operating Spacecraft; or (ii) is not
         Successfully Injected.  In the event that the Spacecraft is not
         Successfully Injected, Contractor shall issue an invoice for the
         present value of the total monthly incentive payments and shall attach
         to Contractor's invoice a written rationale demonstrating that the
         cause of the Spacecraft's failure to become Successfully Injected was
         not attributable to Contractor. The per annum rate used to discount
         the incentive payments will be the Prime Rate published in the Wall
         Street Journal on the date it is determined that the Spacecraft was
         not Successfully Injected.  Notwithstanding the foregoing, in the
         event that the Spacecraft fails to become Successfully Injected due to
         the fault of the Contractor, USSB shall not be obligated to make
         incentive payments hereunder.

    (2)  The monthly incentive payments set forth in paragraph C.(1) above
         shall be subject to reduction as set forth below if the Spacecraft,
         which would otherwise be a Successfully Operating Spacecraft, has one
         or more Inoperative Communications Channel(s), one or more Degraded
         Communications Channel(s), and/or its calculated operational time
         period is less than the Performance Time Period.  The amount of the
         reduction of the monthly incentive payments shall be determined as
         follows:

         a.   For an Inoperative Communications Channel, the monthly incentive
              payment shall be reduced by an amount equal to the daily value of
              U.S. $_________ per Inoperative Communications Channel,
              multiplied by the number of days during the month that the
              channel was inoperative; provided, however that such reduction
              shall not exceed the total amount included in the monthly payment
              that would be paid if such communications channel were a
              Successfully Operating Communications Channel.  Notwithstanding
              the above and subject to paragraph


                                          10

<PAGE>

              D hereof, should the number of Inoperative Communications
              Channels exceed (25%) of the total number of communications
              channels on the Spacecraft, excluding any Inoperative
              Communications Channels that are or could be corrected by
              switching to a redundant communications channel, USSB shall be
              relieved of its obligation to make monthly incentive payments for
              in-orbit performance of the Spacecraft.

         b.   For a Degraded Communications Channel, USSB and Contractor shall
              negotiate and agree upon an equitable reduction in the amount of
              the monthly incentive payment. However, in no event shall there
              be a reduction for Degraded Communications Channels that are or
              could be corrected by switching to a redundant communications
              channel, and in no event shall such reduction exceed the daily
              value specified in paragraph C.(2)a. above, multiplied by the
              number of days during the month for which the subject
              communications channel was degraded.

         c.   In the event the calculated operation time period of the
              Spacecraft is less than the Performance Time Period, all monthly
              incentive payments shall be reduced by multiplying the amount of
              the monthly incentive payment by a fraction equal to the
              calculated operation time period over the Performance Time
              Period.  Notwithstanding the foregoing, in the event the actual
              operation time period of the Spacecraft exceeds the calculated
              time period, the total amount of incentive payments payable
              hereunder shall be equitably adjusted to reflect such actual
              operation time period.

         d.   Notwithstanding the above and subject to subparagraph D. hereof,
              if the combination of Inoperative Communications Channels and
              Degraded Communication Channels is such that the total
              communications performance level of the four (4) CONUS channels
              of the Spacecraft is less than fifty percent (50%) of the total
              communications performance level of the four (4) CONUS channels
              on the Spacecraft as specified in Exhibit A, then USSB shall be
              relieved of its obligation to make monthly incentive payments for
              in-orbit performance of the Spacecraft.

D.  Inoperative Communications Channel or a Degraded Communications Channel
    becomes operational at a higher performance level


                                          11

<PAGE>

    (1)  If an Inoperative Communications Channel or a Degraded Communications
         Channel becomes operational at a higher performance level (e.g., an
         Inoperative Communications Channel becomes a Degraded Communications
         Channel, or a Degraded Communications Channel becomes a Successfully
         Operating Communications Channel), then, unless the communications
         channel has been inoperative or degraded for more than one (1) year,
         Contractor shall thereafter be paid an amount corresponding to the
         communications channel's higher performance level, as defined above,
         commencing on the date on which the Inoperative Communications Channel
         or Degraded Communications Channel begins to perform at such higher
         level. If the communications channel has been inoperative or degraded
         for more than one (1) year, Contractor shall be paid an amount
         corresponding to the communications channel's higher performance level
         only if USSB uses the communications channel for its intended
         commercial communications purposes as described in subparagraphs B.(4)
         and B.(5) above.

    (2)  If USSB has been relieved of the obligation to make monthly incentive
         payments under subparagraphs C.(2)a. or C.(2)d. for less than one (1)
         year, USSB shall begin making or shall resume making monthly incentive
         payments in accordance with this Article 6 if, prior to the end of
         such one (1) year period both: (i) such higher performance operation
         causes the number of Inoperative Communications Channels to be less
         than or equal to twenty-five percent (25%) of the total number of
         communications channels, including communications channels which are
         or could be corrected by switching to a redundant communications
         channel; and (ii) the combination of Inoperative Communications
         Channels and Degraded Communications Channels is such that the total
         communications performance level of the four (4) CONUS channels on the
         Spacecraft is equal to or greater than fifty percent (50%) of the
         total communications performance level of the four (4) CONUS channels
         on the Spacecraft, as specified in Exhibit A, including communications
         channels which are or could be corrected by switching to a redundant
         communications channel. If USSB has been relieved of the obligation to
         make monthly incentive payments under subparagraphs C.(2)a. or C.(2)d.
         for more than one (1) year, Contractor shall thereafter be paid an
         amount corresponding to the communications channel's higher
         performance level, as discussed in this subparagraph D.(2), only if
         USSB uses the communications channel for its intended commercial
         communications purposes as described in subparagraphs B.(4) and B.(5)


                                          12

<PAGE>

         above.

E.  The Spacecraft will be deemed to be properly operated if it is operated by
    the Contractor or its subcontractors or it is monitored and commanded in
    accordance with the directives and instructions in the Contractor furnished
    Satellite operating procedures.  If it is determined that the failure of
    any communications channel(s) to maintain successful operation, as defined
    in paragraph B.(2) above, has occurred as a direct result of the improper
    actions or inactions of USSB or its Satellite operations personnel, other
    than Contractor personnel or Contractor's  subcontractor personnel, the
    total amount of the incentive payments for in-orbit operation relating to
    such communications channel shall be deemed to have been earned by
    Contractor and shall be due and payable each and every month by USSB.

F.  For the purpose of this Article, USSB and Contractor shall jointly
    determine responsibility for failures which occur. If the Parties are
    unable to reach a satisfactory determination between themselves, the matter
    shall be resolved in accordance with the provisions of the Article hereof
    entitled "Arbitration". All measurements, computations, and analyses for
    the purposes of determining whether any communications channel is operating
    satisfactorily will be performed by USSB, using measurement techniques
    agreed to by Contractor. Contractor shall be given access to the resulting
    data.

G.  In the event of a delay caused by USSB such that the Spacecraft is not
    launched within one hundred and five (105) days after final acceptance,
    Contractor shall deliver the Spacecraft to storage at USSB's expense in
    accordance with Article 27 of this Contract.  In addition, Contractor shall
    be entitled to receive non-refundable incentive payments under this Article
    6 as follows:

    (1)  Commencing on the one hundred sixth (106th) day and continuing on a
         monthly basis thereafter until the earlier of Intentional Ignition, or
         twenty-four (24) months, USSB will pay Contractor
         __________________________________ per month (for a total sum of
         _________________________________________.

    (2)  Within thirty (30) days after the end of the twenty-four (24) month
         period specified in subparagraph G.(1), if Intentional Ignition has
         not occurred, USSB will pay Contractor the sum of
         ____________________________________________.

    (3)  Notwithstanding the provisions of subparagraphs G.(1) and G.(2) above,
         in the event that the Spacecraft is launched at any time after the one
         hundred and five (105) day


                                          13

<PAGE>

         period stated above, in-orbit incentive payments shall be paid during
         the Performance Time Period of the Spacecraft in accordance with the
         terms of this Article 6; provided, however, that the amount of each
         monthly incentive payment shall be re-calculated by subtracting from
         the sum of ________________________________ the amount of any
         incentive payments made by USSB to Contractor under this paragraph G,
         and the difference shall be divided into one hundred eighty (180)
         equal monthly payments.

    (4)  In the event that the Spacecraft is never launched, after USSB has
         paid the Contractor the incentive payments in subparagraphs G.(1) and
         G.(2) above, USSB shall have no obligation to make further incentive
         payments to Contractor.

H.  In the event of a delay caused by unavailability of the Launch Vehicle,
    acts of any governmental agency or court which affect the launch of the
    Spacecraft, or excusable delays specified in the launch services contract,
    such that the Spacecraft is not launched within eight (8) months after
    Pre-Shipment Review (PSR) but no earlier than September 1, 1999,
    Contractor shall deliver the Spacecraft to storage in accordance with
    Article 27 of this Contract. In the event the Spacecraft was delivered to
    the designated launch site, USSB shall pay the shipping expense upon any
    subsequent delivery to a storage facility and the shipping expense to
    deliver the Spacecraft from the storage facility to the designated launch
    site.  In addition, Contractor shall be entitled to receive non-refundable
    incentive payments under this Article 6 as follows:

    (1)  Commencing on the date that is eight (8) months after PSR but no
         earlier than September 1, 1999  and continuing on a monthly basis
         thereafter until the earlier of Intentional Ignition, or twenty-four
         (24) months, USSB will pay Contractor ________________________________
         per month (for a total sum of _______________________________________.

    (2)  Within thirty (30) days after the end of the twenty-four (24) month
         period specified in subparagraph H.(1), if Intentional Ignition has
         not occurred, USSB will pay Contractor the sum of
         ________________________________________________.

    (3)  Notwithstanding the provisions of subparagraphs H.(1) and H.(2) above,
         in the event that the Spacecraft is launched at any time after USSB
         begins making incentive payments under this paragraph H, in-orbit
         incentive payments shall be paid during the Performance Time Period of
         the Spacecraft in accordance with the terms of this


                                          14

<PAGE>

         Article 6; provided, however, that the amount of each monthly
         incentive payment shall be re-calculated by subtracting from the sum
         of  ________________________________ the amount of any incentive
         payments made by USSB to Contractor under this paragraph H, and the
         difference shall be divided into one hundred eighty (180) equal
         monthly payments.

    (4)  In the event that the Spacecraft is never launched, after USSB has
         paid the Contractor the incentive payments in subparagraphs H.(1) and
         H.(2) above, USSB shall have no obligation to make further incentive
         payments to Contractor.

I.  Contractor shall have the right to file Uniform Commercial Code financing
    statements at any time during the term of this Contract to perfect a
    security interest in the Spacecraft to secure USSB's obligation to pay
    incentive payments due Contractor under this Contract.  In the event
    Contractor exercises the right to file Uniform Commercial Code financing
    statements, USSB agrees to execute any financing statement, amended
    financing statements, continuation statements or other documents from time
    to time which are deemed reasonably necessary by Contractor to create,
    perfect, confirm or validate a security interest in the incentive payments
    Any security interest in the incentive payments shall be subordinate to any
    other security interest or lien granted by USSB to lenders or other parties
    and Contractor agrees to execute and deliver to USSB any and all such
    documents reasonably requested by USSB to evidence such subordination.

J.  Subsequent to Intentional Ignition, except in the event of gross negligence
    or willful misconduct of Contractor, this Article 6 is the sole and
    exclusive remedy and the sole and exclusive liability of Contractor in the
    event the Spacecraft fails to perform in accordance with the specifications
    stated in this Contract. In the event of gross negligence or willful
    misconduct by Contractor, Contractor's total liability to USSB under this
    Article 6 shall not exceed in the aggregate the sum of the amount of any
    remedy provided to USSB under this Article 6 plus
    ____________________________________.

ARTICLE 7.    SPACECRAFT ON-ORBIT FLIGHT OPERATION SERVICES

A.  Subject to paragraph B below, Contractor shall provide or cause to be
    provided all personnel, material, services, and facilities necessary to
    perform and shall perform, or cause to be performed, telemetry, tracking
    and control of the Spacecraft delivered under this Contract for the entire
    duration of the Performance Time Period. Such services are to be provided
    in accordance with Exhibit B.


                                          15

<PAGE>

B.  The Parties agree to negotiate appropriate revisions to the Articles and
    Exhibits of this Contract or to enter a Spacecraft On-Orbit Flight
    Operations services contract which will then be applicable to the
    Spacecraft On-Orbit Flight Operations Services.  Such revisions will be
    consistent with this Article 7.  If such revisions are not agreed to by the
    Parties, as evidenced by a signed modification to this Contract or similar
    written agreement, within ninety (90) days after EDC, or within such other
    time as the Parties may agree to in writing, the Contractor shall not be
    obligated to provide Spacecraft On-Orbit Flight Operation Services under
    this Contract, and USSB shall not be obligated to make any of the payments
    for Spacecraft On-Orbit Flight Operation Services specified below in
    paragraph C.

C.  Subject to paragraph B above, payments for the Spacecraft On-Orbit Flight
    Operation Services shall be made as follows:

    (1)  USSB shall make a non refundable payment of _________________________
         to Contractor for equipment that is required to provide the services
         stated in this Article 7.  This amount shall be paid in twelve (12)
         equal monthly installments, with the first installment due twelve (12)
         months after EDC and continue monthly thereafter.  All right, title,
         and interest in and to such equipment shall pass to USSB upon receipt
         of payment in full for such equipment by the Contractor.

    (2)  USSB shall pay Contractor the sum of _________________________________
         per year for fifteen (15) years (concurrent with the Performance Time
         Period of the Spacecraft) or until USSB terminates the contract for
         Spacecraft On-Orbit Flight Operations Services.  Payments shall be
         made in twelve (12) equal monthly installments, with the first
         installment due thirty (30) days after the completion of in-orbit
         testing of the Spacecraft.

D.  The price for Spacecraft On-Orbit Flight Operations Services shall be
    subject to an annual economic price adjustment for each year of services.
    The base period upon which an economic price adjustment will be calculated,
    if any, shall be the first twelve (12) month period of the Performance Time
    Period of the Spacecraft.  The payment for the first twelve (12) months of
    Spacecraft On-Orbit Flight Operation Services shall be
    _________________________________________ and shall be adjusted in
    accordance with this Article annually during the remaining fourteen (14)
    years of the Performance Time Period.  The calculation of the annual
    economic price adjustment shall be performed by the Contractor in
    accordance with the following criteria:


                                          16

<PAGE>

    (1)  The standard of measurement for determining whether there shall be an
         economic price adjustment is AHE3762NS, published by the U.S.
         Department of Labor, Bureau of  Labor Statistics (hereinafter the
         "Index").  A "Factor," based upon the Index, shall be calculated as
         follows:  Factor = Index for December of each subsequent year after
         1998 (AHE3762NS) divided by the Index (AHE3762NS) for the month of
         December for the immediately preceding year.

    (2)  If the Factor is less than or equal to 1.03, no economic price
         adjustment shall be made for the subsequent twelve (12) month period.
         If the Factor is greater than 1.03, then an economic price adjustment
         shall be made in accordance with subparagraph D.(4) below.

    (3)  The amount of the economic price adjustment is calculated by
         multiplying the amount that the Factor exceeds 1.03 by the total
         amount of the payments made for Spacecraft On-Orbit Flight Operation
         Services during the preceding twelve (12) month period.  For example,
         as noted above, the amount for the first twelve (12) month period is
         _____________________________________________.  Thus, if the Factor
         computed in January 2000 equals 1.06, then the economic price
         adjustment is the product of _______________________________
         multiplied by 0.03 which equals ____________________________________.

    (4)  If an economic price adjustment is required under subparagraph D.(3)
         above, one twelfth (1/12th) of the amount of such adjustment shall
         then be added to each monthly payment for Spacecraft On-Orbit Flight
         Operation Services made by USSB during the preceding twelve (12) month
         period.  The sum of these amounts shall then constitute the total
         monthly payment amount for Spacecraft On-Orbit Flight Operation
         Services for the next twelve (12) month period.

    (5)  The economic price adjustment calculations for each twelve (12) month
         period shall be made by the Contractor on or before January 31 of the
         following year.  A copy of the economic price adjustment calculations
         shall be provided to USSB for review and comment.

E.  Payments due the Contractor, if any, shall be paid by USSB within thirty
    (30) days of receipt of the Contractor's invoice therefor.  If applicable,
    such invoice will include a copy of the economic price adjustment
    calculations performed by the Contractor on which such


                                          17

<PAGE>

    invoice is based.

F.  In the event that the U.S. Department of Labor, Bureau of Labor Statistics
    discontinues publication of the index specified in this Article 7, the
    Parties shall agree upon an appropriate substitute for the discontinued
    index.  In the event that the U.S. Department of Labor, Bureau of Labor
    Statistics significantly changes its method of calculating the index, the
    Parties shall agree to an appropriate adjustment to put the economic price
    adjustment on a comparable basis with the index calculated before the
    change.

ARTICLE 8.    DEFICIENCIES NOTED IN LAUNCHED SPACECRAFT

Without limiting the obligations of the Contractor under other provisions of
this Contract, if the data available from a launched A2100 spacecraft shows that
the Spacecraft does not or will not meet all the requirements of Exhibit A to
this Contract at any time during the period of the Spacecraft's in-orbit design
lifetime, the Contractor shall, promptly notify USSB of such deficiencies,
recommend appropriate corrective measures (if any) and upon the request of USSB,
take appropriate corrective measures with respect to any unlaunched spacecraft
to be delivered to USSB under this Contract so as to satisfactorily eliminate
from such spacecraft all the deficiencies attributable to the Contractor noted
in such spacecraft. The Contractor shall fulfill the foregoing obligations at
its sole cost and expense, including all costs arising from charges for
shipping, insurance, taxes, and other matters associated with the corrective
measures. If the Contractor fails to remedy any or all such deficiencies, USSB
may have such deficiencies remedied through other means in which event the
Contractor shall pay the reasonable costs of so remedying such deficiencies.

ARTICLE 9.    OPTIONS FOR BACKUP SPACECRAFT, ON-ORBIT SPACECRAFT DELIVERY

A.  Option For Backup Spacecraft

    (1)  USSB shall have the unilateral right to exercise an option for
         delivery of the items specified below for the applicable price set
         forth below. USSB may exercise such option  by providing written
         notice to be received by Contractor not later than the applicable
         option exercise date specified herein. Any such notice shall make
         reference to this Article 9 and clearly state that  the option is
         being exercised.


                                          18

<PAGE>


QUANTITY    PRODUCT               OPTION EXERCISE               DELIVERY 
          DESCRIPTION                  DATE          PRICE($)     DATE

1       backup spacecraft          No Later Than 6     TBD       6 Months
        ("Backup Spacecraft")      Months After                  After Delivery
        identical to the           EDC                           of the
        Spacecraft specified in                                  Spacecraft
        Article 2, paragraph B

1 Lot   Launch and Mission         N/A                 NSP       As Required
        Operation Services for                                   by Exhibit B
        Backup Spacecraft as                           (not
        specified in Article 2,                      separately
        Subparagraph B.2                               priced)

    Total Option Price:

    (2)  In the event USSB exercises this  option, the Parties hereby agree
         that USSB shall make an initial payment in the amount of [TBD]% of the
         Total Option Price concurrent with USSB's issuance of its notice of
         option exercise.  The balance of the payments shall be made to
         Contractor based upon a mutually established schedule which is
         consistent with: (i) the Progress Payment Plan for the Spacecraft; and
         (ii) incentive payments  payable as set forth in Article 6 amounting
         to [TBD]% of the Total Option Price.

    (3)  Except for appropriate revisions to Articles 3, 4, 5, 6, 7, 10, 15 and
         27 the Parties recognize and agree that the Articles and Exhibits of
         this Contract shall apply to the Backup Spacecraft that is the subject
         of the option stated herein.

    (4)  All prices and payment percentages contained in this Article 9 which
         are listed herein as "TBD" shall be mutually agreed upon by the
         Parties no later than two (2) months after EDC.  Should the Parties
         fail to reach mutual agreement on the "TBD" prices, payment
         percentages, and appropriate revisions to the terms and conditions of
         this Contract stated in this Article 9 by the Option Exercise Date,
         this option shall become null and void.

B.  Option for In-Orbit Spacecraft Delivery

    (1)  Subject to subparagraph B.(2) below, USSB shall have the unilateral
         right to exercise an option for the in-orbit delivery of the
         Spacecraft described in Article 2, paragraph


                                          19

<PAGE>

         B, Item 1. Such option must be exercised by providing written notice
         to the Contractor within ninety (90) days of EDC.

    (2)  This option is expressly contingent upon the occurrence of the
         following events, all of which must be completed prior to the option
         exercise date in order for USSB to be able to exercise this option:
         (a) USSB must enter into a contract with a Launch Vehicle services
         contractor for a compatible Launch Vehicle; (b) Contractor must review
         and provide written approval of the terms of such Launch Vehicle
         services contract (which approval shall not be unreasonably withheld
         or delayed); (c) USSB must assign its rights under the Launch Vehicle
         services contract to Contractor and Contractor shall assume the
         obligations thereunder; (d) such assignment must be reviewed and
         approved in writing by both the Launch Vehicle services contractor and
         the Contractor prior to such assignment; and (e) the Parties shall
         mutually agree upon all revisions to the Articles and Exhibits of this
         Contract that are appropriate or necessary, including the Total
         Contract Price and delivery schedule. In particular, the Total
         Contract Price shall be amended to provide for the cost of launch risk
         insurance, which shall be stated as an indicative rate for USSB's
         planning purposes only.  The firm, fixed price for such insurance will
         be finalized at the time the insurance premium rate and market
         capacity are known.  Upon finalization of the cost of insurance, this
         Contract shall be further modified as necessary to reflect the final
         price associated with such insurance.  Contractor will use reasonable
         efforts to place insurance, subject to market capacity, sufficient to
         cover the Spacecraft (including incentive payments), the launch
         services, and the cost of the launch risk insurance, beginning at
         Intentional Ignition of the Launch Vehicle and ending one hundred
         eighty (180) days thereafter.

ARTICLE 10.   PRICE REDUCTION FOR LATE DELIVERY

A.  The Parties agree that time is of the essence, and late delivery of the
    Spacecraft may cause USSB to incur costs including, but without limitation,
    the Launch Vehicle services contractor's postponement fees and USSB's  loss
    of revenue. The Parties agree that the actual damages incurred will be
    difficult to assess and, in lieu thereof, have agreed to liquidated
    damages. To compensate USSB for late delivery of the Spacecraft, the
    liquidated damages specified in paragraph B below have been agreed as
    reasonable compensation for late delivery of the Spacecraft.

B.  In the event that the Spacecraft is not delivered on the date of delivery
    specified in Article 4 of this Contract, as extended by the number of days
    of excusable delay to which


                                          20

<PAGE>

    Contractor is entitled in accordance with Article 18, the Total Contract
    Price of this Contract shall be reduced at the rate of U.S. $_________  for
    each week's delay from week one (1) up to week thirteen (13) and by U.S.
    $__________ for each week's delay from week fourteen (14) to week
    twenty-eight (28) or until the maximum amount of _______________ of
    cumulative liquidated damages is reached. These weekly rates shall apply to
    each full week (seven (7) calendar days) of delay, no provision for
    reduction shall be made for partial week delays.  However, if Contractor's
    late delivery of the Spacecraft does not cause a delay in the launch of the
    Spacecraft, as determined by the Launch Vehicle services contractor's
    launch manifest, no liquidated damages shall be due or payable by the
    Contractor.  In addition to the foregoing, in the event that this Contract
    is terminated by USSB for default under Article 19 prior to the end of the
    period that liquidated damages are payable hereunder, no liquidated damages
    shall be due or payable after the date of such termination.

C.  Any amounts due in accordance with this Article shall be paid within thirty
    (30) days of receipt of USSB's invoice therefor.  USSB's invoice shall not
    be submitted until USSB reasonably determines that liquidated damages are
    due and payable under this Contract.

ARTICLE 11.   ACCESS TO WORK IN PROGRESS AND DATA

A.  All work in progress under this Contract and technical and schedule Data
    and Documentation related to the Contract effort of the Contractor,
    including all design and test data, are subject to continuous examination,
    evaluation, and inspection by USSB or its designated representative
    acceptable to the Contractor at any reasonable hour during the period of
    performance of this Contract. Thereafter, for the Performance Time Period,
    Contractor agrees to maintain and retain technical documentation related to
    the Work such as assembly drawings, parts lists, schematics, and as-built
    documentation folders, and to make such technical documentation available
    to USSB for purposes of Spacecraft performance evaluation and fault
    isolation.

B.  All information obtained as a result of the foregoing shall be Proprietary
    Information  to the extent required under  the provisions of Article 31
    hereof entitled "Disclosure and Use of Proprietary Information."

ARTICLE 12.   TITLE AND ASSUMPTION OF RISK

A.  Title and risk of loss or damage to the Spacecraft shall pass to USSB at
    Intentional Ignition


                                          21

<PAGE>

    or placement of the Spacecraft into storage subsequent to final acceptance,
    whichever occurs first.

B.  Except as provided in paragraph E. below, title to deliverable copies of
    Data and Documentation specified in Table 1 of Exhibit B shall pass to USSB
    at the time of Final Acceptance of Data and Documentation in accordance
    with the terms of the Article hereof titled Inspection and Final
    Acceptance.

C.  USSB agrees to cause its insurer(s) to waive all rights of subrogation
    against Contractor and Contractor's directors, officers, agents, servants,
    affiliates, subcontractors and employees. Contractor agrees to cause its
    insurer(s) to waive all rights of subrogation against USSB and USSB's
    directors, officers, agents, servants, affiliates, subcontractors and
    employees.

D.  Title to Spacecraft-unique test and handling equipment (not deliverable
    under this Contract) for use in connection with inspection of the
    Spacecraft at the launch site and ground system-unique test and handling
    equipment (not deliverable under this Contract) used at USSB's designated
    installation site(s) shall remain with Contractor.

E.  Notwithstanding any other provision herein, the ownership and title to all
    works of authorship and to copyrights, and in computer programs and related
    Data and Documentation, delivered to USSB by Contractor in accordance with
    this Contract shall remain in Contractor or its licensor. Contractor shall
    grant USSB a paid up non-exclusive, non-transferable license to use
    (including "to duplicate") solely for operation of USSB's Spacecraft, the
    copies of computer programs and related Data and Documentation specified in
    the Contract and required for the operation of the Spacecraft deliverable
    under this Contract.  Such non-exclusive license may be assigned to a third
    party that is not a competitor of the Contractor by USSB, and such third
    party shall have the right to further assign such license to another third
    party that is not a competitor of Contractor; provided, however, that in
    each case assignment shall be contingent upon the prior written consent of
    Contractor, which consent shall not be unreasonably withheld or delayed.
    Any purported assignment made in violation of this paragraph E shall be
    null and void and of no legal effect.

ARTICLE 13.   INSPECTION AND FINAL ACCEPTANCE

A.  Preliminary inspections of the Work may be made by USSB or its designated
    representative reasonably acceptable to the Contractor at either the
    Contractor's or a


                                          22

<PAGE>

    subcontractor's plant, as the case may be. All such inspections shall be in
    the company of the Contractor's representative. USSB may inform the
    Contractor in writing of any particulars in which USSB observes that the
    Work being performed under this Contract does not meet the requirements of
    this Contract, and the Contractor shall remedy such defects.

B.  FINAL ACCEPTANCE

    (1)  Final acceptance of a Spacecraft delivered to the designated launch
         site for the purpose of launch shall occur at the designated launch
         site when the Spacecraft has successfully completed the Launch
         Readiness Review ("LRR") in accordance with Exhibit A.  Final
         acceptance of a Spacecraft delivered to storage in accordance with
         Article 27 shall occur at the Contractor's facility when the
         Spacecraft has successfully completed the Spacecraft system level
         Acceptance Tests in accordance with Exhibit C.  Successful completion
         of such testing shall be documented in the Pre-Shipment Review ("PSR")
         specified in Exhibit B.  Within five (5) working days of completion of
         the LRR or the PSR, as the case may be, USSB shall either notify
         Contractor in writing of final acceptance of the Spacecraft or notify
         Contractor in writing of those particulars in which the Spacecraft
         does not meet the requirements of this Contract.  Upon remedy of such
         particulars so that the Spacecraft meets the requirements of this
         Contract or in the event USSB does not notify Contractor in writing
         within said five (5) working day period, USSB's final acceptance of
         the Spacecraft shall be deemed to have occurred.  In the case of a
         Spacecraft delivered to the designated launch site for the purpose of
         launch, in no event shall the Spacecraft be launched until the
         Spacecraft has been finally accepted by USSB.

    (2)  Final acceptance of Launch and Mission Operations Services as
         specified in Exhibit B, shall be deemed to occur after successful
         completion of performance of such  services. Contractor shall provide
         written notification to USSB upon successful completion of performance
         of these services, together with applicable supporting documents, if
         any. Within ten (10) working days of receipt of such notification,
         USSB shall either notify Contractor in writing of final acceptance of
         the services or shall notify Contractor in writing of those
         particulars in which the services did not meet the requirements of
         this Contract. Upon remedy of such particulars to meet the
         requirements of this Contract, or in the event USSB does not notify
         Contractor in writing within said ten (10) working day period, USSB's
         final acceptance of the


                                          23

<PAGE>

         services shall be deemed to have occurred.

    (3)  Final acceptance of deliverable Data and Documentation shall occur
         upon USSB's receipt and acceptance of the Data and Documentation set
         forth in Table 1 of Exhibit B. Within fifteen (15) working days of
         USSB's receipt of such Data and Documentation, USSB shall either
         notify Contractor in writing of its final acceptance of the Data and
         Documentation or shall notify Contractor in writing of those
         particulars in which the Data and Documentation do not meet the
         requirements of this Contract. Upon remedy of such particulars to meet
         the requirements of this Contract or in the event USSB does not notify
         Contractor in writing within said fifteen (15) working day period,
         USSB's final acceptance of the Data and Documentation shall be deemed
         to have occurred.

C.  Remedy of any particulars referred to in paragraphs A and B of this Article
    shall be accomplished by the Contractor, at its expense, promptly upon
    receipt of notice thereof.  If the Contractor fails to remedy any or all
    such particulars, USSB may have such particulars remedied through other
    means, in which event the Contractor shall pay the reasonable costs of so
    remedying such particulars.

ARTICLE 14.   INDEMNIFICATION

A.  Subject to the terms of Articles 24, 35 and 38 of this Contract, each Party
    shall indemnify and hold the other Party and its directors, officers,
    agents, servants, affiliates and employees, or any of them, harmless from
    any claims, loss, damage, liability or expense (including reasonable court
    cost and attorneys' fees) including, without limitation, damage to any
    property, private or public, and injuries to persons, including death,
    arising out of or resulting from any act or omission of the Indemnifying
    Party and/or the Indemnifying Party's directors, officers, agents,
    representatives, contractors, affiliates and employees related to the Work
    performed or such Party's performance hereunder. The Indemnifying Party, at
    its expense shall be entitled to control and shall assume the defense of
    any suits or other proceedings brought against the Indemnified Party and/or
    its directors, officers, agents representatives, contractors, affiliates,
    and employees, or any of them on account thereof, and shall pay all
    expenses and satisfy all judgments which may be incurred by or rendered
    against any or all of them in connection therewith. Subject to paragraph D
    of this Article 14, the Indemnifying Party shall have the right to settle
    any claim or litigation against which it indemnifies hereunder.


                                          24

<PAGE>

B.  To the extent permitted by law, USSB agrees to incorporate an express
    release of all claims, liabilities, losses and damages against the
    Contractor in USSB's contracts with its customers in order to minimize the
    possibility of the assertion of claims by USSB's customers against the
    Contractor.  In the event that USSB fails to incorporate such a release to
    the extent permitted by law in its contracts with its customers, and,
    subject to Articles 35 and 38 of this Contract, USSB shall indemnify and
    hold harmless Contractor (to include its directors, officers, agents,
    servants, affiliates and employees and its subcontractors) from such
    claims, liabilities, losses and damages sustained or claimed by such
    customers arising after Intentional Ignition in connection with the
    Spacecraft.

C.  The Party which is entitled to indemnification (the "Indemnified Party")
    shall given written notice to the other to provide indemnification (the
    "Indemnifying Party") promptly after the Indemnified Party has knowledge of
    any claim as to which indemnity may be sought. The written notice shall
    specify, in reasonable detail, the nature of any such claim giving rise to
    the right of indemnification. The failure of the Indemnified Party to give
    notice as provided herein shall not relieve the Indemnifying Party of its
    obligations, unless such failure hindered the defense of such claim and, in
    such event, shall relieve the Indemnifying Party only to the ascertainable
    extent of the material hindrance.

D.  No Indemnifying Party, in the defense of any claim or litigation, shall,
    except with the consent of the Indemnified Party (which shall not be
    unreasonably withheld), consent to the entry of any judgment or enter into
    a settlement which does not include, as an unconditional term thereof, the
    giving by the claimant or plaintiff to such Indemnified Party a release
    from all liability with respect to such claim or litigation. No Indemnified
    Party shall consent to the entry of a judgment or enter into any settlement
    with respect to a claim or litigation for which the Indemnified Party is
    seeking indemnification hereunder, without prior written consent of the
    Indemnifying Party (which shall not be unreasonably withheld). Each
    Indemnified Party shall furnish information regarding itself or the claim
    in question as the Indemnifying Party may reasonably request in writing and
    shall be reasonably required in connection with such claim or litigation
    resulting therefrom. If the Indemnifying Party, after written notice from
    the Indemnified Party, fails to take timely action to defend the same, the
    Indemnified Party shall have the right to defend the claim or litigation by
    counsel of its own choosing, but at the cost and expense of the
    Indemnifying Party.


                                          25

<PAGE>

ARTICLE 15.   USSB's RIGHT TO TERMINATE

A.  USSB, by written notice to the Contractor, may terminate this Contract in
    whole, or in part, for its convenience at any time prior to Pre-shipment
    Review ("PSR") of the Spacecraft. In event of such termination of the
    Contract by USSB, it is agreed that the termination charges shall be as set
    forth below.  In addition, in event of such termination of the Contract by
    USSB, it is agreed that, if the Spacecraft is subsequently launched, the
    Contractor: (i) shall provide, subject to a mutually acceptable agreement
    (taking into account the amount for any launch and mission operations paid
    by USSB prior to the date of termination), launch and mission operations
    services for the Spacecraft; and (ii) shall be entitled to receive
    incentive payments in accordance with the terms of Article 6 only if this
    Contract is terminated by USSB for its convenience following completion of
    System Critical Design Review, and if the Spacecraft is launched.
    Notwithstanding the provisions of paragraph A. (ii) above, in the event
    that USSB terminates this Contract for its convenience prior to the System
    Critical Design Review and this Contract is subsequently reinstated and the
    Spacecraft is then launched, Contractor shall be entitled to receive
    incentive payments in accordance with Article 6 herein.

                                 TERMINATION SCHEDULE

                                   MONTHLY TOTAL             CUMULATIVE TOTAL
              DATE              ($ IN US MILLIONS)L         ($ IN US MILLIONS)

         January 31-1997
         February 28
         March 31
         April 30
         May 31
         June 30
         July 31
         August 31
         September 30
         October 31
         November 30
         December 31
         January 31-1998
         February 28
         March 31
         April 30


                                          26

<PAGE>

         May 31
         June 30
         July 31
         August 31
         September 30
         October 31
         November 30
         December 31

B.  In the event of such a termination, all Work in progress, including but not
    limited to, inventory, equipment, purchased items, Data and Documentation,
    and other property designed, constructed or obtained by Contractor or
    generated under this Contract with respect to the terminated Work and which
    would have been deliverable if this Contract has not been terminated shall
    become the property of USSB. The Contractor shall take such action as may
    be necessary, or as USSB may direct, for the protection and preservation of
    such inventory in the possession of the Contractor.

C.  In the event that USSB's right to terminate the Contract as defined in this
    Article 15 should stand in the way of USSB's meeting the due diligence
    requirement as set forth by the Federal Communications Commission, then
    USSB may, at its sole option, declare this Article 15 to be null and void.

ARTICLE 16.   CHANGES

From time to time between award and prior to final acceptance of all Work under
this Contract USSB may, by issuing written change orders, make changes within
the general scope of this Contract in drawings, designs, specifications, method
of shipment or packing, or time or place of delivery, require additional Work or
direct the omission of Work. If any such change causes an increase or decrease
in the cost of or the time required for the performance of this Contract, an
equitable adjustment shall be made in the price, or delivery date or schedule,
or both, and any other affected provisions hereof, and this Contract shall be
modified in writing accordingly. Any claim by the Contractor for adjustment
under this Article  shall be deemed waived unless asserted in writing within
thirty (30) days from the date of receipt by the Contractor of the change order.
The amount of the claim shall be stated when it is submitted, or at a later
date, not to exceed sixty (60) days from the date for assertion of the claim. If
the cost of supplies or materials made obsolete or excess as a result of a
change is included in the Contractor's claim for adjustment, USSB shall have the
right to prescribe the manner of disposition of such supplies or materials. All
changes and equitable adjustments pursuant to this Article  shall be subject to


                                          27

<PAGE>

negotiation between and approval by both parties prior to inception of any such
change, which approval shall not be unreasonably withheld.

ARTICLE 17.   TAXES AND DUTIES

A.  All non-U.S. taxes, duties, assessments and fees, including tariffs, that
    are imposed as the results of  the importation into any non-U.S.
    jurisdiction of any portion of the Work  shall be paid by USSB, or if paid
    by Contractor, shall be reimbursed to Contractor by USSB immediately upon
    notification that Contractor has paid any such taxes, duties, assessments
    and fees.

B.  Contractor shall be responsible for payment of all U.S. taxes as part of
    the Contract Price in Article 2.

C.  Portions of the Work  may include some imported goods. Notwithstanding the
    above, in the event any portion of the Work  and its included imported
    goods are not exported in a timely manner (not more than three (3) years
    after EDC) due to USSB's actions or inactions, any duties, taxes, and
    penalties arising therefrom will be USSB's responsibility. Contractor shall
    pay such duties, taxes and penalties, the payment of which is required by
    law, and USSB agrees to reimburse Contractor for such payments within
    thirty (30) days of receipt of Contractor's invoice.

D.  USSB shall be responsible for all applicable duties and taxes, including
    sales taxes, resulting from storage of the Spacecraft.

E.  Each Party agrees to cooperate with the other Party to minimize the amount
    or  impact of any taxes that may be applicable to the Work under this
    Contract.

ARTICLE 18.   EXCUSABLE DELAYS

A.  Acts of God, acts of the public enemy, acts of USSB, acts of any government
    in its sovereign capacity (including government priorities, allocations,
    regulations or orders affecting material, facilities or completed
    spacecraft), changes in the launch specifications in effect on the
    effective date of this Contract, fires, earthquakes, unusually severe
    weather, floods, epidemics, quarantine restrictions, excusable delays
    specified in USSB's contract with the launch services contractor, freight
    embargoes, labor difficulties, unavailability of the Launch Vehicle, and
    any other cause beyond the reasonable control and without the fault or
    negligence of Contractor or its subcontractors which in every case
    unavoidably prevent the performance of the Work in accordance with the
    schedule specified herein,


                                          28

<PAGE>

    shall constitute an excusable delay if written notice thereof is given to
    USSB within fifteen (15) days after such event shall have occurred. In
    event of delay resulting from any of the above causes, the delivery dates
    shall be extended accordingly. Any unexcused default by Contractor's
    subcontractors shall not constitute an excusable delay.

B.  In the event that an event of excusable delay exceeds or is reasonably
    expected to exceed ninety (90) days, USSB shall have the right to an
    equitable adjustment of the Progress Payment and Milestone Event payment
    due dates specified in Article 5 and the Termination Schedule stated in
    Article 15.

ARTICLE 19.   TERMINATION FOR DEFAULT

A.  USSB may, by timely written Notice of Default sent by registered or
    certified mail to Contractor, terminate this Contract or any part thereof
    if: (1) final acceptance of the Spacecraft fails to occur on or before a
    date that permits the Spacecraft to be launched within the launch period
    established by the Launch Vehicle services contractor's launch manifest,
    which date shall in no event be earlier than twenty-six (26) months after
    EDC;  or (2) Contractor fails to perform any other material requirement of
    this Contract prior to Intentional Ignition within the time period
    specified herein.

B.  With respect to paragraph A.(1) of this Article 19, USSB agrees to use
    commercially reasonable efforts to establish the first day of the launch
    period for the Launch Vehicle at twenty-six (26) months after EDC.  USSB
    shall notify Contractor in writing of its launch accommodations upon
    execution of the launch vehicle services contract.  In addition, prior to
    USSB issuance of a Notice of Default under paragraph A.(2) of this Article
    19, USSB shall send a written Cure Notice to Contractor specifying the
    Contract particulars for which USSB considers the Contractor to be in
    default and providing Contractor a period of thirty (30) days (or such
    longer period as USSB may authorize within the Cure Notice) for Contractor
    to respond to USSB in writing as to (1) the corrective actions taken or to
    be taken to remedy the alleged default condition, or (2) why Contractor
    does not consider itself to be in a default condition.  USSB shall give
    reasonable consideration to Contractor's response to USSB's Cure Notice
    prior to USSB's issuance of a Notice of Default under this Article.
    Notwithstanding the foregoing, no Notice of Default shall be required to be
    sent under paragraph A.(1) of this Article 19.

C.  To the extent the Contract is terminated under this Article, USSB may
    demand either that: (1) all partially completed items be delivered and that
    Contractor pay to USSB all costs


                                          29

<PAGE>

    reasonably incurred by USSB through the one (1) year period following the
    scheduled delivery date (as adjusted by excusable delays) to have such
    items completed by other responsible contractors (with whom Contractor
    shall provide reasonable cooperation), to the extent such costs exceed the
    total amount which USSB would have had to pay Contractor for such items had
    Contractor completed the Contract as required (excluding any incentive
    payments); or (2) subject to paragraph E of this Article 19, all payments
    made to Contractor by USSB shall be returned, in which case all right,
    title and interest in and to the Work shall remain with, or be reconveyed
    to, the Contractor.

D.  If this Contract is terminated as provided in this Article and USSB does
    not elect to have all payments returned under paragraph C.(2) of this
    Article 19, Contractor shall:

    (1)  be paid the Contract price (excluding any incentive payments) for all
         Work delivered and accepted prior to such termination; and

    (2)  protect and preserve property in the possession of Contractor in which
         USSB has an interest.

E.  After Intentional Ignition, this Article shall not affect payment to
    Contractor of any payment which would otherwise be due under the terms of
    Articles 6 and 7.

F.  This Article shall be the sole remedy to which USSB is entitled in the
    event of Contractor's default under this Article 19, and Contractor shall
    have no liability for special, indirect, incidental, punitive or
    consequential damages, including lost profits or lost revenues.

G.  In the event USSB terminates Contractor for default under the provisions of
    this Article and it is subsequently determined that Contractor was not in
    default, said termination shall be deemed to have been issued pursuant to
    Article 15.

H.  If USSB fails to perform any obligation which it is required to perform
    pursuant to this Contract, Contractor may issue a written Cure Notice to
    USSB specifying the Contract particulars for which Contractor considers
    USSB to be in default and providing USSB a period of thirty (30) days (or
    such longer period as Contractor may authorize within the Cure Notice) for
    USSB to correct such failure to perform. If such failure is not corrected
    by USSB within this period Contractor may stop work on this Contract and
    consider this Contract to be terminated pursuant to Article 15.


                                          30

<PAGE>

ARTICLE 20.   ASSIGNMENT

Neither Party shall assign or delegate this Contract or any of its rights,
duties, or obligations hereunder to any other person without the prior express
written approval of the other Party, which consent shall not be unreasonably
withheld or delayed.  Nothing contained in this Article shall restrict
Contractor from subcontracting work or procuring parts, materials, equipment or
services in the ordinary course of performance of this Contract. This assignment
restriction shall not apply in the event of assignment by USSB or Contractor to
any successor corporation, subsidiary or affiliate provided thirty (30) days
advance notice is given to the other Party and the assignor remains obligated
under this Contract.

ARTICLE 21.   ARBITRATION

A.  Except for disputes involving claims of specific performance or injunctive
    relief, any dispute or disagreement arising between the Parties in
    connection with the interpretation of any Article or provision of this
    Contract, or the compliance or non-compliance therewith, or the validity or
    enforceability thereof, or any other dispute related to this Contract which
    is not settled to the mutual satisfaction of the Parties within thirty (30)
    days (or such longer period as may be mutually agreed upon) from the date
    that either Party informs the other, in writing, that such dispute or
    disagreement exists, shall be settled by arbitration in accordance with the
    Commercial Arbitration Rules of the American Arbitration Association, in
    effect on the date that such notice is given. Arbitration shall be held in
    San Francisco, California, U.S.A. or at another location mutually agreed to
    by the Parties.

B.  The arbitration shall be determined by a panel of no more than three (3)
    arbitrators who have the qualifications and experience described in
    paragraph C. below, and the arbitrators shall be selected in accordance
    with the procedures in paragraph D. below. The arbitrators shall base any
    award on the terms of this Contract, the applicable law and judicial
    precedent, and shall accompany such award with a written explanation of the
    reasons therefor. Judgment upon the award rendered by the arbitrators may
    be entered in any court having jurisdiction thereof. The relief that may be
    awarded by the arbitrators under any arbitration arising from this Contract
    may not exceed actual compensatory damages. In no event may the arbitrators
    award special, incidental, indirect, consequential or punitive damages
    except as otherwise provided in Article 6.J. hereof.

C.  Every person recommended to serve as an arbitrator hereunder shall be
    qualified by education, experience, and training to pass on the particular
    controversies in dispute, and shall have had experience as an arbitrator
    and at least fifteen (15) years experience with


                                          31

<PAGE>

    expertise in interpreting contracts in the field or fields of law involved
    in the subject controversy. The arbitrators selected shall be fair and
    impartial and shall have no financial or personal interest in the Parties
    or outcome of the matter to be decided.

D.  Either Party demanding arbitration of a controversy shall, in writing,
    specify the matter to be submitted to  arbitration and, simultaneously,
    choose and nominate an individual meeting the qualifications set forth in
    paragraph C. to act as an arbitrator.  Thereupon, within fifteen (15) days
    after receipt of such written notice, the other Party shall, in writing,
    choose and nominate a second arbitrator meeting the qualifications set
    forth in paragraph C.  The two arbitrators so chosen shall promptly meet
    and endeavor to resolve the question in dispute and, if they agree upon
    such determination, the determination so made shall be reduced to writing
    and signed by both arbitrators.

    If, within ten (10) working days,  such two arbitrators fail to agree, they
    shall promptly select a third arbitrator, giving written notice to both
    Parties of their choice and fixing a time and place at which both Parties
    may appear and be heard with respect to the controversy at hand.  In the
    event the two arbitrators fail to agree upon a third arbitrator within a
    period of seven (7) days, or if, for any other reason, there is a lapse in
    the naming of an arbitrator or arbitrators, or in the filling of a vacancy,
    or in the event of failure or refusal of any arbitrator(s) to attend to or
    fulfill his or their dutires, then upon application by either Party to the
    controversy, an arbitrator or arbitrators shall be named by the American
    Arbitration Association in accordance with its rules.

E.  Each Party shall, upon the written request of the other Party, provide the
    other with copies of documents relevant to the issues raised by any claim,
    counterclaim or defense and shall be entitled to request interrogatories
    and take a reasonable number of depositions as are relevant to the matters
    under arbitration. Other discovery may be ordered by the arbitrators to the
    extent the arbitrators deem additional discovery appropriate, and any
    dispute regarding discovery, including disputes as to the need therefor or
    the relevance or scope thereof, shall be determined by the arbitrators,
    which determination shall be conclusive.

F.  In the event that the dispute is resolved by a three-person arbitration
    panel, , the arbitration shall take place at a single hearing before the
    arbitrators.  The arbitrators shall select such time and place for the
    hearing after appointment, provided that the time scheduled for the hearing
    shall not be later than forty-five (45) business days after the date of the
    appointment of the last arbitrator appointed. The arbitrators shall give
    written notice of the scheduled hearing to each Party at least thirty (30)
    business days prior the date so fixed.


                                          32

<PAGE>

    Prior to the scheduled hearing date, the Parties and the arbitrators shall
    agree on procedures to be used in connection with the arbitration except as
    they may conflict with the specific provisions of this paragraph. To the
    extent the Parties and the arbitrators cannot agree upon procedures,
    arbitration shall be conducted in accordance with the AAA Rules. At the
    hearing, each of the Parties shall submit its position, together with such
    testimony and evidence as each Party may see fit, with respect to the
    controversy at issue. Such testimony or evidence may be oral or written.
    The formal rules of evidence applicable to judicial proceedings will not
    govern the arbitration proceeding. After the hearing, each Party shall have
    the right to submit such written summary of its own submissions and
    positions as it deems appropriate, and written comments upon the
    submissions and positions of the other Party. The arbitrators shall affix
    an appropriate time table for such written comments and submissions. Said
    arbitrators shall hear and determine the matters presented for decisions,
    shall consider all testimony, evidence, submissions, and comments provided,
    giving such weight to each as the arbitrators may deem appropriate; and the
    arbitrators shall render a decision thereon no later than thirty (30) days
    after the date affixed for written comments and submissions.

G.  All expenses and fees of the arbitrators and expenses for hearing
    facilities, stenographers and other expenses of the arbitrators shall be
    borne equally by both Parties.

ARTICLE 22.   RIGHTS IN DATA

Except as provided in Article 12 of this Contract, and subject to Articles 31
and 33 hereof, USSB shall have the right to use, duplicate and disclose the Data
and Documentation furnished hereunder for the purpose of inspecting and
operating the Spacecraft furnished hereunder. USSB shall have the right to make
copies of any written material furnished as part of the Data and Documentation
that is copyrighted and to use such copies for the performance of this Contract
and for operation of the Spacecraft furnished hereunder without payment of
additional compensation to Contractor.

ARTICLE 23.   PUBLIC RELEASE OF INFORMATION

Within a reasonable time prior to the release of news releases, articles,
brochures, advertisements, prepared speeches, and other information releases to
the public, concerning the work performed or to be performed hereunder, by the
Contractor, or a subcontractor of any tier, or an .employee or consultant of
either, the Contractor shall request the written approval of USSB concerning the
content and timing of such release, and such approval shall not be unreasonably


                                          33

<PAGE>

denied or delayed. If such approval is not granted, the requested release shall
not be made.

ARTICLE 24.   PATENT INDEMNITY

A.  Contractor agrees, at its own expense (including attorneys fees and costs),
    to defend or at its sole option to settle, and USSB agrees that the
    Contractor has the right to defend, or at its option to settle, any claim,
    suit or proceeding ("Claims") brought against USSB alleging infringement of
    any United States, Mexico, or Canada patent, copyright, trademark or trade
    secret (hereinafter "Intellectual Property") by any Spacecraft or any
    deliverable supplied by the Contractor to USSB under this Contract
    ("deliverable").  Contractor shall have the option to settle any such Claim
    on behalf of USSB only if Contractor pays and satisfies fully at its sole
    expense all amounts and undertakings required under such settlement.  The
    Contractor agrees to pay and satisfy any final judgment entered in a U.S.
    Court or a court or agency of competent jurisdiction in Canada or Mexico
    against USSB on any such Claim, without regard to any limitation imposed by
    Article 38.  USSB agrees that the Contractor at its sole option shall be
    relieved of the foregoing obligations unless USSB notifies the Contractor
    promptly in writing of any such Claim, and at the Contractor's expense,
    gives the Contractor proper and full information and assistance as is
    reasonably available to USSB for the purpose of settling and/or defending
    any Claim.

B.  If any deliverable furnished by the Contractor to USSB becomes, or in the
    opinion of the Contractor may become, the subject of any Claim for
    infringement of any United States, Mexico, or Canada Intellectual Property
    rights, or in the event of an adjudication that such deliverable infringes
    any United States, Mexico, or Canada Intellectual Property right or in
    connection with the settlement thereof, or if the use, lease or sale as
    appropriate of such deliverable is enjoined, the Contractor may, at its
    option and its expense: (1) procure for USSB such Intellectual Property
    rights as are necessary to use, lease or sell, as appropriate, such
    deliverable(s); or (2) replace such infringing deliverable(s) or parts
    thereof; or (3) modify such deliverable(s); or (4) remove such
    deliverable(s) or parts thereof and replace such deliverables or parts
    thereof with a noninfringing deliverable or part.  Contractor may exercise
    any of the aforementioned options with respect to a Successfully Operating
    Spacecraft ; provided that the exercise of such option: (a) does not
    materially impair or interfere with the operation of the Spacecraft; and
    (b) does not result in the Spacecraft failing to meet the performance
    specifications of this Contract.  In all such cases, USSB and Contractor
    shall cooperate to minimize the impact to USSB's use or  operation of the
    Spacecraft and Contractor shall use all comercially practicable efforts to
    avoid or minimize any period during which the Spacecraft's operations are
    diminished.  Notwithstanding the


                                          34

<PAGE>

    foregoing, nothing in this paragraph B. shall relieve Contractor from
    performing the Work in accordance with the terms of this Contract.

C.  With respect to the Spacecraft only, in the event that Contractor is unable
    to resolve any Claim for infringement of any United States, Mexico, or
    Canada Intellectual Property rights brought against USSB and USSB is
    permanently enjoined from using the Spacecraft and all appeals of an
    infringement Claim  have been fully exhausted, then Contractor agrees to
    undertake one of the following:

    (1)  PRIOR TO INTENTIONAL IGNITION.  Contractor will: (a) return to USSB
         all Progress Payments and other amounts which have been received from
         USSB under this Contract (in which case Contractor shall retain all
         rights, title and interest in the Spacecraft); (b) pay USSB (after
         USSB has taken all reasonable mitigation measures) all costs, if any,
         that USSB must pay or has paid for launch services (less any refunds
         received by USSB from the Launch Vehicle services contractor), and,
         upon such payment, USSB shall assign the launch vehicle services
         contract to the Contractor; and (c) pay to USSB a lump sum payment of
         _____________________________________________________________.

    (2)  AFTER INTENTIONAL IGNITION.  For a  Successfully Operating Spacecraft
         Contractor will: (i) provide USSB with a replacement spacecraft and
         the title thereto, as soon as commercially practicable  with
         substantially the same performance characteristics as described in
         Exhibit A, but with the infringing part(s) replaced with a
         non-infringing part or parts; and (ii) provide launch and mission
         operations and data and documentation substantially the same as
         provided in this Contract; (iii) provide launch services and launch
         risk insurance for the replacement spacecraft; provided, however, that
         the Contractor shall have no other or further liability to USSB for an
         infringing Spacecraft as a result of Contractor's replacement of the
         Spacecraft under this subparagraph C.(2).  Furthermore, if Contractor
         is required to provide a replacement spacecraft under this
         subparagraph C.(2), USSB shall transfer all right, title and interest
         in and to the infringing  Spacecraft to Contractor and transfer all
         right, title and interest in and to the replacement spacecraft at the
         end of any remaining portion of the Performance Time Period for the
         Spacecraft or the estimated time period of performance of the
         infringing Spacecraft, whichever is longer (which period shall be
         extended for such period of time, if any, that USSB has been enjoined
         from using the Spacecraft for its intended communications


                                          35

<PAGE>

         purposes).

D.  The Contractor shall have no liability for any infringement arising from:
    (i) the combination of such deliverable with any other item  not furnished
    to USSB by the Contractor, or (ii) the modification of such deliverable
    unless such modification was made by the Contractor, or (iii) the use of
    such deliverable in practicing any process that is not practiced in its
    entirety by such deliverable and/or any other deliverables provided by
    Contractor.  USSB shall hold the Contractor harmless against any expense,
    judgment or loss for infringement of any United States patents or
    trademarks which results from the Contractor's compliance with USSB's
    specific designs, specifications (other than performance specifications) or
    instructions other than those contained in the Exhibits to this Contract.

E.  The Contractor shall not be liable for any costs or expenses incurred
    without the Contractor's written authorization, and subject to paragraphs
    C. (1) and C. (2) above, in no event shall the Contractor's total liability
    to USSB under, or as a result of compliance with the provisions of this
    Article 24 exceed the total damages USSB may be required to pay by order of
    a United States court for the allegedly infringing Spacecraft or
    deliverable, plus applicable attorneys fees and costs.

F.  By this Contract, Contractor shall not convey any license by implication,
    estoppel or otherwise, under any proprietary or patent rights of the
    Contractor, to practice any process with such deliverable unless such
    process is practiced in its entirety by such deliverable or by the
    combination of such deliverable with any other product or part furnished by
    Contractor.

ARTICLE 25.   WARRANTY

A.  Contractor warrants to USSB that the Spacecraft sold hereunder will, at the
    time of final acceptance pursuant to Article 13 of this Contract, be free
    from defects in material and workmanship and will comply with the
    requirements of the Spacecraft Performance Specification, Exhibit A. This
    warranty shall extend for a period of one (1) year from the date of final
    acceptance of the Spacecraft by USSB or until Intentional Ignition of the
    primary Launch Vehicle, whichever is earlier.

B.  USSB shall have the right at any time during the warranty period to require
    that Contractor, at Contractor's expense, correct or replace, at
    Contractor's option, any non-conforming, defective, or deficient Spacecraft
    component with a conforming component which


                                          36

<PAGE>

    complies with the Spacecraft Performance Specification. The provisions of
    this warranty shall apply to the corrected or replacement component for the
    unexpired portion of the time period set forth in paragraph A. above.

C.  Contractor warrants that each item of Data and Documentation will be
    accurate at the time of its final acceptance pursuant to paragraph B.3 of
    Article 13 of this Contract. Contractor undertakes during a one (1) year
    period following each such final acceptance, to provide corrections to the
    item of Data and Documentation to USSB (free of charge) as and when
    Contractor becomes aware of such inaccuracies that materially affect the
    operation of the Spacecraft.

D.  If an excusable delay event occurs subsequent to final acceptance of the
    Spacecraft but prior to Intentional Ignition, the warranty period shall be
    extended on a day-for-day basis until such event is no longer considered an
    excusable delay. However, such period of extension shall not exceed six (6)
    months in the event of an excusable delay under Article 18 and eight (8)
    months in the event of an excusable delay under Article 6.H.  USSB may
    issue a change order to extend the warranty beyond such eight (8) month
    period in accordance with Article 16.

E.  The foregoing warranty shall constitute the sole remedy of USSB and the
    sole liability of Contractor for any non-conforming, defective, or
    deficient item delivered under this Contract.

F.  THIS WARRANTY IS IN LIEU OF ALL OTHER WARRANTIES, WHETHER STATUTORY,
    EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
    MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST
    INFRINGEMENT. CONTRACTOR SHALL HAVE NO OTHER LIABILITY UNDER THIS ARTICLE
    25, WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL
    OR EQUITABLE THEORY OR OTHERWISE, INCLUDING, WITHOUT LIMITATION, ANY
    LIABILITY FOR SPECIAL, PUNITIVE, INCIDENTAL, INDIRECT, OR CONSEQUENTIAL
    DAMAGES, OR FOR LOST PROFIT OR REVENUES.

ARTICLE 26.   NOTICES, REPORTS AND DOCUMENTATION DELIVERABLES

All notices, reports and technical documentation required to be provided to USSB
or the Contractor under this Contract shall be sent to USSB or the Contractor as
described below and


                                          37

<PAGE>

shall be effective upon receipt.

USSB                                   CONTRACTOR

United States Satellite Broadcasting   Lockheed Martin Telecommunications
Company, Inc.                          Building 551
3415 University Avenue                 1272 Borregas Ave.
St. Paul, Minnesota  55114             Sunnyvale, CA  94089-1310

Attention:    Philip Lucachick         Attention:     David Keslow
Telephone:    612-642-4586             Telephone:     408-543-3416
Facsimile:    612-642-4365             Facsimile:     408-543-3404

ARTICLE 27.   STORAGE

A.  USSB may elect to have the Contractor deliver, or Contractor may be
    required under Article 6 (paragraph G. or H.) hereof to deliver, the
    Spacecraft purchased under this Contract to a USSB-provided storage
    location within the Continental United States.  In such event, Contractor
    shall be paid incentive payments in accordance with the terms of Article 6
    (paragraph G. or H., as applicable) and title and risk of loss or damage to
    the Spacecraft shall pass to USSB as set forth in Article 12 at the time of
    delivery of the Spacecraft to the storage site.

B.  Subsequent to the delivery of the Spacecraft to a storage site, USSB may
    direct the Contractor to remove the Spacecraft from storage for the purpose
    of launch. If so directed, the Contractor shall transport the Spacecraft to
    the launch site and shall perform the pre-launch, launch and post-launch
    services specified in this Contract at the Contractor's expense in
    accordance with Exhibit B.

C.  If, in the course of removing the Spacecraft from storage and shipping it
    to the designated launch site, the Contractor is required to perform
    refurbishment of the Spacecraft or any testing that is outside of the scope
    of this Contract prior to shipment of the Spacecraft, then the terms and
    conditions of this Contract will be adjusted pursuant to Article 16.

D.  The Contractor shall assume the risk of loss or damage to the Spacecraft
    from the time the Spacecraft leaves the Contractor's facility until
    delivery to the storage site and again from the time the Contractor takes
    possession of the Spacecraft at the storage location for the purposes of
    delivery to the designated launch site, until Intentional Ignition.


                                          38

<PAGE>

ARTICLE 28.   APPLICABLE LAW

This Contract shall be interpreted, construed, and governed by the laws of the
State of New York, exclusive of its choice of law rules.

ARTICLE 29.   ADDITIONAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
              PARTIES

A.  Contractor's Representatives, Warranties and Covenants. Contractor hereby
    represents, warrants and covenants to USSB as follows:

    (1)  As of the EDC date, the execution, delivery and performance by
         Contractor of this Contract has been duly authorized by all requisite
         corporate action and will not violate any applicable provisions of law
         or any order of any court or any agency of government and will not
         conflict with or result in the breach under any agreement applicable
         to Contractor.

    (2)  As of the EDC date, Contractor has not employed or authorized anyone
         to represent it as a broker or finder in connection with this
         Contract.

    (3)  Contractor will deliver to USSB good and clear marketable title to the
         Spacecraft delivered under the Contract free of all liens,
         encumbrances and adverse claims of title, and Contractor has the right
         to convey the rights specified in Article 12.E. with respect to the
         Data and Documentation.

    (4)  In connection with performance of the Work and delivery of the
         Spacecraft, Data and Documentation and Launch and Mission Operation
         Services, Contractor shall comply with all applicable laws,
         regulations, or orders of any governmental entity.

    (5)  Contractor shall deliver to USSB a Spacecraft that: (i) conforms in
         all material respects to the requirements of this Contract and is
         substantially similar, in all material respects, with series A2100
         spacecraft Contractor provides to its other customers; and (ii)
         complies with all engineering standards applicable to Lockheed Martin
         commercial communications satellites in effect at the time of
         construction.

    (6)  As of the EDC date, to the best of Contractor's knowledge, no Exhibit
         to this Contract contains any material inaccuracies.

    (7)  At any time during Contractor's performance of this Contract, if USSB
         reasonably believes that it has reason to inquire concerning
         Contractor's ability to perform its


                                          39

<PAGE>

         obligation hereunder, upon written requests by USSB, Contractor agrees
         to provide USSB with written assurances of Contractor's continued
         ability to perform its obligations hereunder.  Contractor shall
         provide any such assurances together with relevant information
         requested by USSB to support such assurances within ten (10) business
         days following Contractor's receipt of USSB's written request.

B.  USSB's Representations, Warranties and Covenants. USSB hereby represents,
    warrants and covenants to Contractor as follows:

    (1)  As of the EDC date, the execution, delivery and performance by USSB of
         this Contract has been duly authorized by all requisite corporate
         action and will not violate any applicable provisions of law or any
         order of any agency of government and will not conflict with or result
         in the breach under any agreement applicable to USSB.

    (2)  As of the EDC date, USSB has not employed or authorized anyone to
         represent it as a broker or finder in connection with this Contract.

ARTICLE 30.   RESPONSIBILITY FOR DESIGN, DRAWINGS AND SPECIFICATIONS

The review or granting of any approvals by USSB, or the failure of USSB to
inform Contractor of any deficiencies in the Work or to review or grant any
approvals, shall not affect the responsibility of the Contractor for the design
or for the correctness of drawings and specifications, for the performance of
the Spacecraft, or for any other obligation of the Contractor under this
Contract.

ARTICLE 31.   DISCLOSURE AND USE OF PROPRIETARY INFORMATION

A.  If documents supplied by one Party to the other are marked with a
    proprietary legend, the receiving Party shall take all reasonable steps to
    ensure that the documents and contents of such documents are not disclosed
    to any person other than a person employed or engaged by the receiving
    Party, whether under subcontract or otherwise, for the performance of this
    Contract. Whenever the receiving Party makes copies of such proprietary
    documents for performance of work covered by this Contract and such copy is
    not marked as proprietary, the receiving Party shall mark each such copy as
    proprietary to the disclosing Party.

B.  Any disclosure to any person permitted under paragraph A above shall be
    made in confidence and shall extend only so far as may be necessary for the
    purposes of this Contract. Any such disclosure to a person other than an
    employee or attorney residing in


                                          40

<PAGE>

    the U.S. of the receiving Party shall be made pursuant to a written
    confidential disclosure agreement or with prior written approval of the
    disclosing Party.

C.  Except with the written consent of the disclosing Party, the receiving
    Party shall not make use of any document mentioned in paragraph A above
    other than for the purposes of this Contract.

D.  The obligations and restrictions imposed by this Article shall not apply to
    information which:

    (1)  is or becomes available to the public from a source other than the
         receiving Party before or during the period of this Agreement;

    (2)  is authorized for release in writing by the disclosing Party;

    (3)  is lawfully obtained by the receiving Party without restriction from a
         third Party;

    (4)  is known by the receiving Party prior to such disclosure;

    (5)  is, at any time, developed by the receiving Party completely
         independently of any disclosure or disclosures from the disclosing
         Party;

    (6)  is reasonably necessary to support a patent application, the subject
         matter of which belongs to the receiving Party and which the receiving
         Party discloses to an appropriate Patent Agent or Patent Office and/or
         court of any country in pursuance thereof; or

    (7)  is, with respect to USSB, reasonably necessary to support applications
         to be filed with the Federal Communications Commission in connection
         with USSB's DBS program.

E.  Neither Party shall be liable for the inadvertent or accidental disclosure
    of such information marked as proprietary if such failure to mark or
    disclosure occurs despite the practice of exercising the same degree of
    care as the receiving Party normally takes to preserve and safeguard its
    own proprietary information, but at least reasonable care.

F.  Neither Party shall be liable for the disclosure of any technical
    information of the other Party pursuant to any legally enforceable
    requirement of any Government, or any court, agency or department thereof.


                                          41

<PAGE>

G.  No license, under any patent, is granted or implied by merely conveying
    data or information under this Contract.

H.  Any proprietary disclosure to either Party, if made orally, or visually,
    shall be so identified at the time of disclosure and shall be confirmed in
    writing within fifteen (l5) days by the disclosing Party and identified as
    proprietary information, if the disclosing Party wishes to keep such
    information proprietary under this Contract. Neither Party shall be liable
    for the disclosure of proprietary information made prior to the
    identification of such information as proprietary.

I.  The obligations of this Article shall be effective for a period of seven
    (7) years from the date of the disclosure.

ARTICLE 32.   INTEGRATION

This Contract embodies the whole agreement between the Parties. There are no
promises, terms, conditions, or obligations other than those contained herein;
and this Contract shall supersede all previous proposals, communications,
representations, or agreements either verbal or written, between the Parties
hereto. This Contract shall not be changed, modified, amended, extended,
terminated, waived, or discharged, except by an instrument in writing signed by
the Parties hereto.

ARTICLE 33.   PERMITS AND LICENSES

A.  This Contract is subject to all applicable U.S. laws and regulations
    relating to the export of Spacecraft, services and/or Data and
    Documentation deliverable hereunder and other technical data and equipment
    being furnished pursuant to or to be utilized in connection with this
    Contract (hereinafter in this Article referred to as "Export Licensed
    Items") and to all applicable laws and regulations of the country or
    countries to which Export Licensed Items are exported or are sought to be
    exported.

B.  Contractor shall use reasonable efforts to obtain U.S. Government approvals
    and licenses necessary for export of any Export Licensed Items.  USSB is
    responsible to provide Contractor, upon Contractor's request, with all
    available and necessary information to enable Contractor to apply for such
    approvals and licenses.

C.  If, within a reasonable time, the U.S. Government fails to grant a required
    approval or license to Contractor to export any Export Licensed Items or
    revokes or suspends such an approval or license subsequent to its grant, or
    grants such a license or approval subject to


                                          42

<PAGE>

    conditions, this Contract shall, nevertheless, remain in full force and
    effect.  In the event of such U.S. Government action or inaction,
    deliveries and acceptance of the Spacecraft, services and Data and
    Documentation to be furnished by Contractor shall be made at locations
    within the continental U.S. as agreed upon between the Parties.  Such U.S.
    Government action or inaction shall not otherwise modify in any way the
    rights and obligations of the Parties under this Contract except to relieve
    Contractor of any obligations which cannot be performed without such an
    approval or license. In such event, the Export Licensed Items ready for
    delivery will be placed in storage at USSB's expense and USSB shall pay
    Contractor all payments due under the Contract for such Export Licensed
    Items, including the Spacecraft Initial Incentive Payment, less the price
    of services related to such Export Licensed Items but not performed due to
    such storage.

D.  If, within a reasonable time, any foreign country or countries to which
    such Export Licensed Items are sought to be exported fails to grant a
    required approval or license, or suspends or revokes a required approval or
    license subsequent to its grant, or grants a license subject to conditions,
    or if any foreign country or countries to which such Export Licensed Items
    are exported fails to grant an approval or license to utilize the Export
    Licensed Items for the purpose(s) for which exported, this Contract shall,
    nevertheless, remain in full force and effect.  In the event of such
    foreign country's or countries' action or inaction, deliveries and
    acceptance of the Spacecraft, services and Data and Documentation to be
    furnished by Contractor shall be made at locations within the continental
    U.S. as agreed upon between the Parties.  Such foreign government's action
    or inaction shall not otherwise modify in any way the rights and
    obligations of the Parties under this Contract except to relieve Contractor
    of any obligations which cannot be performed without such an approval or
    license.  In such event, the Export Licensed Items ready for delivery will
    be placed in storage at USSB's expense and USSB shall pay Contractor all
    payments due under the Contract for such Export Licensed Items, including
    the Initial Incentive Payment, less the price of services related to such
    Export Licensed Items but not performed due to such storage.

ARTICLE 34.   CONTRACTOR PROVIDED OFFICE SPACE

Upon request by USSB, at any time through the Pre-Shipment Review of the
Spacecraft, the Contractor shall provide to USSB personnel or their designees a
suitably furnished and equipped private office, with an area of not less than
one hundred fifty (150) square feet, at the Contractor's facilities.


                                          43

<PAGE>

ARTICLE 35.   INTERPARTY WAIVER OF LIABILITY

USSB and Contractor agree to amend this Contract Article to incorporate
appropriate flowdown requirements of USSB's launch contract with the Launch
Vehicle services contractor for launch and associated services regarding damage
to persons or property involved in launch operations. Such amendment shall be
accomplished prior to the launch of any Spacecraft delivered under this
Contract.

ARTICLE 36.   LAUNCH VEHICLE DESIGNATION

A.  USSB is required to obtain Launch Vehicle services for the purpose of
    successfully launching the Spacecraft deliverable under this Contract and
    to provide all launch support services not otherwise specifically required
    to be provided by Contractor hereunder.

B.  The Parties recognize that USSB must designate, as the Launch Vehicle for
    launch of the Spacecraft, a Launch Vehicle that is compatible with the
    Spacecraft.  USSB shall notify Contractor in writing of USSB's Launch
    Vehicle designation no later than three (3) months after EDC.  USSB's delay
    in providing Contractor such notification of its Launch Vehicle designation
    or any subsequent USSB-directed change in the designated Launch Vehicle may
    constitute a basis for an equitable adjustment in the price and delivery
    schedule of this Contract.

ARTICLE 37.   MISCELLANEOUS PROVISIONS

A.  CONTRACT EFFECTIVITY - The Effective Date of this Contract [EDC] is
    December 31, 1996

B.  LANGUAGE - This Contract and all Data and Documentation, reports and other
    written materials, and all communications between the Parties pursuant to
    performance of this Contract, shall be in the English language.

C.  UNITS OF MEASURE - Contractor's standard measurement units shall be used
    for drawings and technical documents supplied to either Party by the other
    pursuant to performance of this Contract.

D.  ENFORCEMENT OF REMEDIES - Unless expressly stated to the contrary within a
    specific Article, all rights and remedies hereunder shall be cumulative and
    may be exercised singly or concurrently. Failure by either Party to enforce
    any of its rights under this Contract shall not be deemed a waiver of
    future enforcement of such rights or any other rights hereunder.


                                          44

<PAGE>

E.  SEVERABILITY OF PROVISIONS - If any provision of this Contract is found to
    be invalid or unenforceable, it shall not affect any other provision of
    this Contract, and the invalid or unenforceable provision shall be replaced
    with a provision consistent with the original intent of the Parties.

F.  SURVIVING ARTICLES - The following Articles shall survive the completion,
    expiration or termination of this Contract: Article 6, In-Orbit Incentive
    Payments; Article 14, Indemnification; Article 15, USSB's Right to
    Terminate; Article 17, Taxes and Duties;  Article 21, Arbitration; Article
    22, Rights in Data; Article 24, Patent Indemnity; Article 25, Warranty;
    Article 26, Notices, Report and Documentation Deliverables; Article 28,
    Applicable Law Article 31, Disclosure and Use of Proprietary Information;
    Article 33, Permits and Licenses; Article 35, Interparty Waiver of
    Liability; and Article 38, Limitation of Liability.

ARTICLE 38.   LIMITATION OF LIABILITY

Except as expressly provided in Article 24 and Article 6.J, in no event shall
either Party or their respective officers, employees, agents, consultants, or
subcontractors be liable in contract, tort, or otherwise, for special,
incidental, punitive, indirect, or consequential damages, including, but not
limited to, lost profits or revenues.

This Contract may be executed in one or more counterparts all of which
constitute one and the same agreement.

IN WITNESS WHEREOF, the Parties hereto have executed this Contract.

                                       LOCKHEED MARTIN CORPORATION

                                       By:   /s/ Russell T. McFall
                                             ----------------------------------
                                       Name: Russell T. McFall
                                             ----------------------------------
                                       Title: President
                                             ----------------------------------
                                             Lockheed Martin Telecommunications

                                       UNITED STATES SATELLITE
                                       BROADCASTING COMPANY, INC.

                                       By:   /s/ Stanley S. Hubbard
                                             ----------------------------------


                                          45

<PAGE>

                                       Name:  Stanley S. Hubbard
                                             ----------------------------------
                                       Title: Chairman
                                             ----------------------------------


                                          46