EXECUTION COPY




                      AGREEMENT AND PLAN OF REORGANIZATION


                                      among


                          HUGHES COMMUNICATIONS, INC.,


                       HUGHES COMMUNICATIONS GALAXY, INC.,


                 HUGHES COMMUNICATIONS SATELLITE SERVICES, INC.,


                      HUGHES COMMUNICATIONS SERVICES, INC.,


                  HUGHES COMMUNICATIONS CARRIER SERVICES, INC.,


                       HUGHES COMMUNICATIONS JAPAN, INC.,


                          MAGELLAN INTERNATIONAL, INC.


                                       and


                              PANAMSAT CORPORATION




                               September 20, 1996

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                                    ARTICLE I
                              THE ASSET CONTRIBUTION.......................  3

1.1   Contribution of the Galaxy Business..................................  3
1.2   Exclusion of Certain Assets and Liabilities..........................  4
1.3   Issuance of Shares of Newco Common Stock.............................  4
1.4   Conveyancing and Assumption Documents................................  4

                                   ARTICLE II
                                   THE MERGER .............................  5

2.1   Organization of the Merger Subsidiary................................  5
2.2   The Merger...........................................................  5
2.3   Directors............................................................  6
2.4   Officers.............................................................  6
2.5   Certificate of Incorporation and Bylaws..............................  6
2.6   Name.................................................................  6
2.7   Actions of Newco.....................................................  6

                                   ARTICLE III
                                   THE CLOSING.............................  6

                                   ARTICLE IV
                       EFFECT OF THE MERGER ON SECURITIES
                              OF PAS AND MERGER SUB........................  6

4.1   Merger Sub Stock.....................................................  6
4.2   Conversion of PAS Shares.............................................  7
4.3   Elections by Holders of Shares.......................................  9
4.4   Proration............................................................ 11
4.5   Dividends, Fractional Shares, Etc.................................... 12
4.6   Certain Additional Prorations........................................ 13

                                   ARTICLE V
                     REPRESENTATIONS AND WARRANTIES OF PAS................. 13

5.1   Organization, Standing and Power..................................... 13
5.2   Capital Structure.................................................... 14
5.3   Authority; No Violations; Consents and Approvals..................... 15
5.4   SEC Documents........................................................ 17
5.5   Information Supplied................................................. 18
5.6   Compliance with Laws................................................. 18
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5.7   Litigation........................................................... 20
5.8   Taxes................................................................ 20
5.9   Employees and Agents; Benefit Plans.................................. 21
5.10  Absence of Certain Changes or Events................................. 25
5.11  Opinion of Financial Advisors........................................ 26
5.12  Insurance............................................................ 27
5.13  Intellectual Property................................................ 27
5.14  Environmental Matters................................................ 28
5.15  Investment Banking Fees and Commissions.............................. 29
5.16  Material Contracts................................................... 29
5.17  Personal Property.................................................... 31
5.18  Real Property........................................................ 31
5.19  Certain Assets and Agreements........................................ 32
      (a) Ground Stations.................................................. 32
      (b) Satellites and Transponders...................................... 33
      (c) Tracking, Telemetry and Control Equipment........................ 33
      (d) ITU Frequency Registration....................................... 33
      (e) Satellite Coordination........................................... 33
5.20  IGO Determinations................................................... 34

                                   ARTICLE VI
                        REPRESENTATIONS AND WARRANTIES OF
                               THE HUGHES PARTIES.......................... 34

6.1   Organization, Standing and Power..................................... 34
6.2   Capital Structure.................................................... 34
6.3   Authority; No Violations; Consents and Approvals..................... 35
6.4   Galaxy Financial Statements.......................................... 37
6.5   Information Supplied................................................. 37
6.6   Compliance with Laws................................................. 37
6.7   Litigation........................................................... 40
6.8   Taxes................................................................ 40
6.9   Employees and Agents; Benefit Plans.................................. 40
6.10  Absence of Certain Changes or Events................................. 44
6.11  Insurance............................................................ 46
6.12  Intellectual Property................................................ 46
6.13  Environmental Matters................................................ 47
6.14  Investment Banking Fees and Commissions.............................. 47
6.15  Material Contracts................................................... 47
6.16  Personal Property.................................................... 49
6.17  Real Property........................................................ 49
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6.18  Certain Assets and Agreements........................................ 50
      (a) Ground Stations.................................................. 50
      (b) Satellites and Transponders...................................... 50
      (c) Tracking, Telemetry and Control Equipment........................ 51
      (d) ITU Frequency Registration....................................... 51
      (e) Satellite Coordination........................................... 51
6.19  IGO Determinations................................................... 51

                                   ARTICLE VII
                                    COVENANTS.............................. 52

7.1   Interim Operations of PAS............................................ 52
      (a) Ordinary Course.................................................. 52
      (b) Dividends; Changes in Capital Stock.............................. 52
      (c) Issuance of Securities........................................... 52
      (d) Governing Documents.............................................. 53
      (e) No Solicitation.................................................. 53
      (f) No Spacecraft Acquisitions, Investments or Capital Expenditures.. 54
      (g) No Dispositions.................................................. 54
      (h) No Dissolution, Etc.............................................. 55
      (i) Other Actions.................................................... 55
      (j) Certain Employee Matters......................................... 55
      (k) Indebtedness..................................................... 55
      (l) Agreements....................................................... 56
      (m) Accounting....................................................... 56
      (n) Payment of Claims................................................ 56
      (o) Waivers and Payments............................................. 56
      (p) Insurance........................................................ 56
      (q) Affiliate Transactions........................................... 56
      (r) PAS Permits...................................................... 57
      (s) Construction Permits and Applications............................ 57
      (t) Interference..................................................... 57
      (u)    No Restrictive Agreements..................................... 57
      (v) Certain Other Agreements......................................... 58
7.2   Interim Operations of the Galaxy Business............................ 58
      (a) Ordinary Course.................................................. 58
      (b) Dividends; Changes in Capital Stock.............................. 58
      (c) Issuance of Securities........................................... 58
      (d) Governing Documents.............................................. 59
      (e) No Spacecraft Acquisitions, Investments or Capital Expenditures.. 59
      (f) No Dispositions.................................................. 59
      (g) No Dissolution, Etc.............................................. 59
      (h) Other Actions.................................................... 59
      (i) Certain Employee Matters......................................... 59
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      (j) Indebtedness..................................................... 60
      (k) Agreements....................................................... 60
      (l) Accounting....................................................... 60
      (m) Payment of Claims................................................ 60
      (n) Waivers and Payments............................................. 61
      (o) Insurance........................................................ 61
      (p) Affiliate Transactions........................................... 61
      (q) Galaxy Permits................................................... 61
      (r) Construction Permits and Applications. ...........................62
      (s) Interference..................................................... 62
      (t) No Restrictive Agreements ....................................... 62
      (u)    Additional Property .......................................... 62
      (v)    Certain Other Agreements ..................................... 63
7.3   Interim Operations of Newco.......................................... 63
7.4   Control of Galaxy and PAS............................................ 64
7.5   Registration Statement and Proxy Statement/Prospectus................ 64
7.6   PAS Stockholders' Meeting............................................ 65
7.7   Access to Information................................................ 65
7.8   Confidentiality...................................................... 66
      (a) Preservation of Confidentiality.................................. 66
      (b) Property Right in Confidential Information....................... 66
      (c) Termination of Agreement......................................... 67
7.9   Legal Conditions, Filings and Consents............................... 67
7.10  Indemnification and Insurance for Directors and Officers............. 69
7.11  Indemnification for Excluded and Contributed Liabilities............. 70
7.12  Notices of Certain Events............................................ 72
7.13  Publicity............................................................ 73
7.14  Rule 145 Affiliates.................................................. 73
7.15  Supplemental Disclosure Schedules.................................... 73
7.16  Newco Employee Benefits Arrangements................................. 74
      (a)    Replacement of Retirement Plan ............................... 74
      (b)    Replacement of Savings Plan................................... 75
      (c)    Newco Stock Options........................................... 76
      (d)    Retiree Medical Benefits...................................... 77
      (e)    PAS ERISA Plans and PAS Benefit Arrangements.................. 77
      (f)    HCI Indemnification........................................... 77
      (g)    PAS Indemnification........................................... 77
7.17  Further Action....................................................... 77
7.18  Documentation of Intercompany Agreements............................. 78
7.19  Listing Application.................................................. 78
7.20  Leveraged Lease Guarantee............................................ 78
7.21  Disposition of Assets................................................ 78
7.22  Related Agreements................................................... 78
7.23  Standstill Restriction............................................... 78
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7.24  Capital Expenditures and the Closed System for Cash Managent......... 79


                                  ARTICLE VIII
                                   CONDITIONS.............................. 79

8.1   Conditions to Each Party's Obligation to Effect the Asset Contribution,
        the Univisa Contribution and the Merger............................ 79
      (a) No Order......................................................... 80
      (b) Stockholder Approval............................................. 80
      (c) HSR Act.......................................................... 80
      (d) FCC Consents..................................................... 80
      (e) Other Satellite Approvals........................................ 81
      (f) Other Approvals.................................................. 81
      (g) Registration Statement........................................... 81
      (h) Related Agreements............................................... 81
      (i) Listing Application.............................................. 82
8.2   Additional Conditions to Obligations of PAS.......................... 82
      (a)    Representations and Warranties................................ 82
      (b) Performance of Obligations....................................... 82
      (c) Material Adverse Change.......................................... 82
8.3   Additional Conditions to Obligations of the Hughes Parties........... 83
      (a) Representations and Warranties................................... 83
      (b) Performance of Obligations....................................... 83
      (c) Material Adverse Change.......................................... 83
      (d) Termination of Options........................................... 83
      (e)    Termination of DTH Equity Obligations......................... 83
      (f)    Resignation of PAS Directors.................................. 84

                                   ARTICLE IX
                            TERMINATION AND AMENDMENT...................... 84

9.1   Termination.......................................................... 84
9.2   Effect of Termination................................................ 85
9.3   Termination Fee. .................................................... 85
9.4   Amendment............................................................ 86
9.5   Extension; Waiver.................................................... 86

                                    ARTICLE X
                                GENERAL PROVISIONS......................... 86

10.1  Nonsurvival of Representations, Warranties and Agreements............ 86
10.2  Expenses............................................................. 87
10.3  Notices.............................................................. 87
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10.4  Interpretation....................................................... 88
10.5  Entire Agreement; No Third-Party Beneficiaries; Rights of Ownership.. 88
10.6  Assignment........................................................... 89
10.7  Governing Law........................................................ 89
10.8  Severability......................................................... 89
10.9  Injunctive Relief.................................................... 89
10.10 Attorneys' Fees...................................................... 89
10.11 Cumulative Remedies ................................................. 89
10.12 Counterparts......................................................... 90

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                                    SCHEDULES
                                    ---------

Other than Schedule 1.1, each of the following Schedules are omitted pursuant
to Item 601(b)(2) of Regulation S-K.  The Company agrees to furnish to the 
Commission supplementally a copy of any omitted Schedule upon request by the
Commission.


Schedule 1.1          Excluded Assets
Schedule 5.2          PAS Capital Structure
Schedule 5.3(b)       PAS Violations
Schedule 5.3(c)       PAS Consents and Approvals
Schedule 5.6(a)       PAS Violations of Law
Schedule 5.6(b)       PAS Permits
Schedule 5.6(c)       PAS Political Environment and Violations of Certain Laws
Schedule 5.7          PAS Litigation
Schedule 5.8          PAS Taxes
Schedule 5.9(a)       PAS Employees
Schedule 5.9(b)       PAS Compliance w/Employment & Labor Laws
Schedule 5.9(c)       PAS ERISA Plans and Benefit Arrangements
Schedule 5.9(d)       PAS Compliance w/ERISA Plans and Benefit Arrangements
Schedule 5.9(e)       PAS Retirement Benefits
Schedule 5.9(f)       PAS Undelivered Employee Documents
Schedule 5.9(g)       Effects of Agreement on PAS Employee Arrangements
Schedule 5.9(h)       PAS ERISA Plan & Benefits Arrangement Suits
Schedule 5.9(i)       PAS Liability for Insurance Policies Covering ERISA Plans
Schedule 5.9(j)       Contributions to PAS ERISA Plans
Schedule 5.9(k)       PAS Employee Lawsuits
Schedule 5.9(l)       PAS Employee Loans
Schedule 5.9(m)       PAS Occupational Health & Safety Compliance
Schedule 5.9(n)       PAS Worker's Compensation Assessments
Schedule 5.9(o)       Deductibility of PAS Employee Payments
Schedule 5.9(p)       PAS Excess Parachute Payments
Schedule 5.10         PAS Absence of Changes or Events
Schedule 5.12         PAS Insurance
Schedule 5.13         PAS Intellectual Property
Schedule 5.14(b)      PAS Notices of Environmental Violations
Schedule 5.14(c)      PAS Obligations Under Environmental Laws
Schedule 5.14(d)      Other PAS Environmental Matters
Schedule 5.16(a)      PAS Material Contracts
Schedule 5.16(b)      PAS Restrictive Contracts
Schedule 5.16(c)      PAS Backlog
Schedule 5.17         PAS Personal Property Liens
Schedule 5.18(a)      PAS Owned Real Property
Schedule 5.18(b)      PAS Leased Real Property
Schedule 5.18(d)      Third Party Possession of PAS Property
Schedule 5.19(a)      PAS Ground Stations
Schedule 5.19(b)      PAS Satellites and Transponders
Schedule 5.19(c)      PAS Tracking, Telemetry and Control Equipment
Schedule 5.19(d)      PAS ITU Frequency Registration
Schedule 5.19(e)      PAS Satellite Coordination
Schedule 5.20         PAS IGO Determinations
<PAGE>
Schedule 6.2        Galaxy Capital Structure
Schedule 6.3(b)     Galaxy Violations
Schedule 6.3(c)     Galaxy Consents and Approvals
Schedule 6.4        Galaxy Financial Statements
Schedule 6.6(a)     Galaxy Violations of Law
Schedule 6.6(b)     Galaxy Permits
Schedule 6.6(c)     Galaxy Political Environment and Violations of Certain Laws
Schedule 6.7        Galaxy Litigation
Schedule 6.8        Galaxy Taxes
Schedule 6.9(a)     Galaxy Employees
Schedule 6.9(b)     Galaxy Compliance w/Employment & Labor Laws
Schedule 6.9(c)     Galaxy ERISA Plan and Benefit Arrangements
Schedule 6.9(d)     Galaxy Compliance w/ERISA Plans and Benefit Arrangements
Schedule 6.9(e)     Galaxy Retirement Benefits
Schedule 6.9(f)     Galaxy Undelivered Employee Documents
Schedule 6.9(g)     Effects of Agreement on Galaxy Employee Arrangements
Schedule 6.9(h)     Galaxy ERISA Plan & Benefits Arrangement Suits
Schedule 6.9(i)     Galaxy Liability for Insurance Policies Covering ERISA Plans
Schedule 6.9(j)     Contribution to Galaxy ERISA Plans
Schedule 6.9(k)     Galaxy Employee Lawsuits
Schedule 6.9(l)     Galaxy Employee Loans
Schedule 6.9(m)     Galaxy Occupational Health & Safety Compliance
Schedule 6.9(n)     Galaxy Worker's Compensation Assessments
Schedule 6.9(o)     Deductibility of Galaxy Employee Payments
Schedule 6.9(p)     Galaxy Excess Parachute Payments
Schedule 6.10       Galaxy Absence of Changes or Events
Schedule 6.11       Galaxy Satellite Insurance Policy
Schedule 6.12       Galaxy Intellectual Property
Schedule 6.13(a)    Galaxy Notices of Environmental Violations
Schedule 6.13(b)    Other Galaxy Environmental Matters
Schedule 6.13(c)    Galaxy Obligations Under Environmental Laws
Schedule 6.15(a)    Galaxy Material Contracts
Schedule 6.15(b)    Galaxy Restrictive Contracts
Schedule 6.15(c)    Galaxy Backlog
Schedule 6.16       Galaxy Personal Property Liens
Schedule 6.17(a)    Galaxy Owned Real Property
Schedule 6.17(b)    Galaxy Leased Real Property
Schedule 6.17(d)    Third Party Possession of Galaxy Property
Schedule 6.18(a)    Galaxy Ground Stations
Schedule 6.18(b)    Galaxy Satellites and Transponders
Schedule 6.18(c)    Galaxy Tracking, Telemetry and Control Equipment
Schedule 6.18(d)    Galaxy ITU Frequency Registration
Schedule 6.18(e)    Galaxy Satellite Coordination
Schedule 6.19       Galaxy IGO Determinations
Schedule 7.1(c)     PAS Issuance of Securities
Schedule 7.1(f)     PAS Acquisitions and Capital Expenditures
Schedule 7.1(j)     Certain PAS Employee Matters
<PAGE>
Schedule 7.1(k)       PAS Indebtedness
Schedule 7.2(c)       Galaxy Issuance of Securities
Schedule 7.2(e)       Galaxy Acquisitions and Capital Expenditures
Schedule 7.2(i)       Certain Galaxy Employee Matters
Schedule 7.2(j)       Galaxy Indebtedness
Schedule 7.2(p)       Galaxy Affiliate Transactions

<PAGE>
                        DEFINITION CROSS-REFERENCE TABLE

TERM                                                               SECTION
----                                                               -------

Acquisition Proposal                                               7.1(e)
affiliate                                                          7.23
Affiliate                                                          5.6(b)
Agreement                                                          Preamble
Allocation Determination                                           4.3(d)
Asset Contribution                                                 Recital A
Assurance Agreement                                                Recital C
Bankruptcy Exception                                               5.3(a)
Capital Expenditures for Satellites Under Construction             7.24
Cash Cap                                                           4.4(b)
Cash Election                                                      4.2(a)(iii)
CERCLA                                                             5.14(a)(i)
Class A Common Stock                                               Recital D
Class B Common Stock                                               Recital E
Closed System                                                      7.24
Closing                                                            Article III
Closing Date                                                       Article III
Code                                                               Recital B
Confidentiality Agreement                                          7.7(b)
Contributed Entities                                               1.1
DGCL                                                               2.1
Disinterested Director                                             7.23
Dissenting Shares                                                  4.2(d)
DTH Option Purchase Agreement                                      Recital F
DTH Services                                                       7.1(f)
Effective Time                                                     2.2(b)
Election Deadline                                                  4.3(d)
Election Form                                                      4.3(c)
Environmental Law                                                  5.14(a)(i)
ERISA                                                              5.9(c)(i)
Exchange Act                                                       4.2(e)
Exchange Agent                                                     4.3(b)
Exchange Fund                                                      4.3(b)
Excluded Assets                                                    1.1
Excluded Liabilities                                               1.2
FCC Consent Application                                            7.9(c)
FCC Rules                                                          7.1(t)
Final Order                                                        8.1(d)
GAAP                                                               1.1
Galaxy                                                             Preamble
Galaxy Assets                                                      1.1
Galaxy Backlog                                                     6.15(c)
Galaxy Balance Sheet                                               6.4
Galaxy Benefit Arrangement                                         6.9(c)(ii)
<PAGE>
TERM                                                               SECTION
----                                                               -------

Galaxy Benefit Employees                                           6.9(c)(i)
Galaxy Business                                                    1.1
Galaxy Data                                                        6.18(b)
Galaxy Employees                                                   6.9(a)
Galaxy ERISA Plans                                                 6.9(c)(i)
Galaxy Financial Statements                                        6.4
Galaxy Ground Stations                                             6.18(a)
Galaxy Intellectual Property                                       6.12
Galaxy Leased Real Property                                        6.17(b)
Galaxy Liabilities                                                 1.1
Galaxy Owned Real Property                                         6.17(a)
Galaxy Permits                                                     6.6(b)
Galaxy Satellite                                                   6.18(b)
Galaxy Violation                                                   6.3(b)
Government Entity                                                  5.3(a)
Hazardous Materials                                                5.14(a)(ii)
HCCS                                                               Preamble
HCI                                                                Preamble
HCJ                                                                Preamble
HCS                                                                Preamble
HCSS                                                               Preamble
HE                                                                 Recital C
HE Retirement Plan                                                 7.16(a)(i)
HE Savings Plan                                                    7.16(b)(i)
HSR Act                                                            5.3(c)
Hughes Indemnified Party                                           7.11(b)
Hughes Parties                                                     Recital C
Hughes Party                                                       Recital C
IGO Determinations                                                 5.20
Income Tax Agreement                                               Recital C
Indemnified Liabilities                                            7.10(b)
Indemnified Party                                                  7.11(c)
Indemnified Person                                                 7.10(b)
Indemnified Persons                                                7.10(b)
Indemnifying Party                                                 7.11(c)
Interim Period                                                     7.4
Joint Committee                                                    7.16(c)
Law                                                                5.6(a)
Letter of Transmittal                                              4.3(c)
Liabilities                                                        7.11(a)
Liens                                                              5.17
material adverse effect                                            5.1
Material Contract                                                  5.16(a)
Maximum Cash Amount                                                4.4(a)
Merger                                                             Recital A
Merger Agreement                                                   2.2
<PAGE>
TERM                                                               SECTION
----                                                               -------

Merger Consideration                                               4.2(a)
Merger Sub                                                         2.1
Newco                                                              Preamble
Newco Certificates                                                 4.3(b)
Newco Common Stock                                                 1.3
Newco Indemnified Party                                            7.11(a)
Newco Retirement Plan                                              7.16(a)(ii)
Newco Savings Plan                                                 7.16(b)(ii)
Option Consideration                                               4.2(e)
Options                                                            4.2(e)
PAS                                                                Preamble
PAS Affiliates                                                     7.14
PAS Backlog                                                        5.16(c)
PAS Balance Sheet                                                  5.17
PAS Benefit Arrangement                                            5.9(c)(ii)
PAS Common Stock                                                   2.5
PAS Data                                                           5.19(b)
PAS Employees                                                      5.9(c)(i)
PAS ERISA Plans                                                    5.9(c)(i)
PAS Ground Stations                                                5.19(a)
PAS Intellectual Property                                          5.13
PAS Leased Real Property                                           5.18(b)
PAS Owned Real Property                                            5.18(a)
PAS Permits                                                        5.6(b)
PAS Preferred Stock                                                5.2
PAS Satellite                                                      5.19(b)
PAS Savings Plan                                                   7.16(b)(i)
PAS SEC Documents                                                  5.4
PAS Stockholder Approval                                           5.3(c)
PAS Violation                                                      5.3(b)
PAS Voting Debt                                                    5.2
PBGC                                                               7.16(a)(v)
Permits                                                            5.6(a)
Permitted Lien                                                     5.17(ii)
Person                                                             7.1(e)
Principal Stockholders                                             Recital D
Principal Stockholders Agreement                                   Recital D
Proceeds                                                           7.21
Prorated Cash Amount                                               4.4(b)
Prorated Stock Amount                                              4.4(c)
Proxy Statement/Prospectus                                         7.5
Registration Rights Agreement                                      Recital G
Registration Statement                                             7.5
Related Agreements                                                 7.9(a)
Release                                                            5.14(a)(iii)
Remedial Action                                                    5.14(a)(iv)
<PAGE>
TERM                                                               SECTION
----                                                               -------

Reorganization                                                     Recital A
Requested Cash Amount                                              4.4(b)
Requested Stock Amount                                             4.4(c)
S Company                                                          Recital A
SEC                                                                5.2
Securities Act                                                     4.5(b)
Share Certificate                                                  4.2(b)
Shares                                                             4.2(a)
Significant Subsidiary                                             7.1(h)
SPOT Difference                                                    4.6
Standard Cash Consideration                                        4.2(a)(i)
Standard Consideration                                             4.2(a)(i)
Standard Election                                                  4.2(a)(i)
Stock Consideration                                                4.2(a)(ii)
Stock Election                                                     4.2(a)(ii)
Stockholder Agreement                                              Recital H
Stock Option Plans                                                 4.2(e)
Subsidiary                                                         2.2(a)
Superior Acquisition Proposal                                      7.1(e)
tax, taxes and taxable                                             5.8
Televisa                                                           Recital F
Termination Fee                                                    9.3
Transferred Retirement Plan Participants                           7.16(a)(i)
Transferred Savings Plan Participants                              7.16(b)(i)
Univisa                                                            Recital A
Univisa Contribution                                               Recital A
Univisa Contribution Agreement                                     Recital E


<PAGE>
                      AGREEMENT AND PLAN OF REORGANIZATION


                  This AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement"),
dated September 20, 1996, is entered into by and among HUGHES COMMUNICATIONS,
INC., a California corporation ("HCI"), HUGHES COMMUNICATIONS GALAXY, INC., a
California corporation ("Galaxy"), HUGHES COMMUNICATIONS SATELLITE SERVICES,
INC., a California corporation ("HCSS"), HUGHES COMMUNICATIONS SERVICES, INC., a
California corporation ("HCS"), HUGHES COMMUNICATIONS CARRIER SERVICES, INC., a
California corporation ("HCCS"), HUGHES COMMUNICATIONS JAPAN, INC., a California
corporation ("HCJ"), MAGELLAN INTERNATIONAL, INC., a Delaware corporation
("Newco") and PANAMSAT CORPORATION, a Delaware corporation ("PAS").

                                    RECITALS

                  A. The respective Boards of Directors of each of the parties
have approved, and deem it advisable and in the best interests of their
respective companies and stockholders to consummate the reorganization provided
for herein (the "Reorganization"), pursuant to which Newco will acquire the
Galaxy Business (as defined in Section 1.1) and the business of PAS by (i) HCI
causing the contribution of assets and liabilities comprising the Galaxy
Business to Newco in exchange for shares of common stock of Newco (the "Asset
Contribution"), (ii) Satellite Company, L.L.C., a Nevada limited liability
company ("S Company"), contributing its capital stock of Univisa, Inc., a
Delaware corporation ("Univisa"), to Newco in exchange for shares of common
stock of Newco and/or cash (the "Univisa Contribution") and (iii) a subsidiary
of Newco merging with and into PAS (the "Merger").

                  B. For federal income tax purposes, it is intended that the
Asset Contribution, the Univisa Contribution and the Merger together qualify as
an exchange under the provisions of Section 351 of the United States Internal
Revenue Code of 1986, as amended (the "Code").

                  C. As a condition and inducement to PAS to enter into this
Agreement (and effect the transactions contemplated hereby) and S Company to
enter into the Univisa Contribution Agreement (as defined in Recital E) and
effect the transactions contemplated thereby, (i) concurrently with the
execution and delivery hereof, Hughes Electronics Corporation, a Delaware
corporation ("HE"), is executing and delivering the Assurance Agreement in the
form attached hereto as Exhibit A (the "Assurance Agreement"), pursuant to which
HE will (a) on or before the Closing Date (as defined in Article III), loan or
cause to be loaned to Newco and/or one or more subsidiaries of Newco (other than
PAS, Univisa, Merger Sub (as defined in Section 2.1) or any of their respective
direct or indirect subsidiaries) sufficient cash funds to pay the cash
consideration payable upon consummation of the Univisa Contribution and the
Merger, (b) cause its subsidiaries to contribute all of the assets and
liabilities comprising the Galaxy Business to Newco and (c) cause HCI, Galaxy,
HCSS, HCS, HCCS and HCJ (each, a "Hughes Party," and collectively, the "Hughes
<PAGE>
Parties") to continue to conduct the Galaxy Business in the ordinary course and
to perform their respective obligations under this Agreement and (ii) on or
before the Closing Date, HE and Newco will enter into an Income Tax
Indemnification and Allocation Agreement (the "Income Tax Agreement") in the
form attached hereto as Exhibit B.

                  D. As a condition and inducement to Galaxy to enter into this
Agreement (and effect the transactions contemplated hereby), concurrently with
the execution and delivery hereof, all of the beneficial and record holders of
PAS' Class A Common Stock, par value $.01 per share ("Class A Common Stock"),
and S Company, the sole stockholder of Univisa (the holders of Class A Common
Stock and S Company together, the "Principal Stockholders"), are entering into a
stockholders agreement in the form attached hereto as Exhibit C (the "Principal
Stockholders Agreement"), pursuant to which, among other things, the Principal
Stockholders have agreed to vote or cause to be voted the shares of PAS owned
directly or indirectly by such stockholders as of the date of this Agreement in
favor of the transactions contemplated hereby.

                  E. Newco will, immediately prior to the Merger, acquire the
stock of Univisa, which indirectly owns all of the shares of PAS' Class B Common
Stock, par value $.01 per share ("Class B Common Stock"), by exchanging with S
Company all of the outstanding capital stock of Univisa for shares of common
stock of Newco and/or cash, pursuant to the terms of the Stock Contribution and
Exchange Agreement in the form attached hereto as Exhibit D (the "Univisa
Contribution Agreement").

                  F. Concurrently with the execution and delivery hereof, PAS,
Grupo Televisa, S.A., a corporation (Sociedad Anonima) organized under the laws
of Mexico ("Televisa"), and S Company are entering into a purchase and sale
agreement in the form attached hereto as Exhibit E (the "DTH Option Purchase
Agreement"), pursuant to which one of Televisa, a designee or Televisa or S
Company, immediately following the Univisa Contribution, will purchase all of
PAS' rights in the DTH Option (as defined in the DTH Option Purchase Agreement).

                  G. Concurrently with the consummation of the Asset
Contribution, the Univisa Contribution and the Merger, the Principal
Stockholders, HCI and Newco will enter into a Registration Rights Agreement in
the form attached hereto as Exhibit F (the "Registration Rights Agreement")
pursuant to which, among other things, each of the Principal Stockholders and
HCI will have certain registration rights with respect to its shares of Newco
Common Stock.

                  H. Concurrently with the consummation of the Asset
Contribution, the Univisa Contribution and the Merger, Newco, HCI and the
Principal Stockholders will enter into a stockholder agreement in the form
attached hereto as Exhibit G (the "Stockholder Agreement").

                  I. HCI, Galaxy, HCSS, HCS, HCCS, HCJ, Newco and PAS desire to
make certain representations, warranties, covenants and agreements in connection
with the transactions contemplated hereby.
<PAGE>
                                    AGREEMENT

                  In consideration of the foregoing and the mutual promises
herein and for other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:

                                   ARTICLE I
                             THE ASSET CONTRIBUTION

               1.1 Contribution of the Galaxy Business. Subject to the terms and
conditions of this Agreement, at the Closing (as defined in Article III), HCI
shall cause (a) any and all of the assets, properties, interests and rights
owned, leased or used in the Galaxy Business, of every kind and description,
whether located in Galaxy, HCSS, HCS, HCCS or HCJ (collectively, the
"Contributed Entities") or their respective Affiliates (as defined in Section
5.6(b)), including, without limitation, (i) the Galaxy Permits (as defined in
Section 6.6(b)) set forth on Schedule 6.6(b), (ii) the Galaxy Intellectual
Property (as defined in Section 6.12) set forth on Schedule 6.12, (iii) all
Material Contracts (as defined in Section 5.16) relating to the Galaxy Business
set forth on Schedule 6.15, (iv) the Galaxy Owned Real Property and Galaxy
Leased Real Property (as such terms are defined in Section 6.17) set forth on
Schedules 6.17(a) and 6.17(b), respectively, (v) the Galaxy Ground Stations (as
defined in Section 6.18(a)) owned by any of the Contributed Entities, (vi) the
Galaxy Satellites (as defined in Section 6.18(b)) set forth on Schedule 6.18(b),
including all rights to any orbital slots or satellites under construction,
(vii) machinery, equipment, furniture and fixtures located at any of the Galaxy
Owned Real Property or Galaxy Leased Real Property facilities, (viii) all
prepaid expenses, prepaid royalties, advances and deposits, (ix) insurance
policies, premiums or proceeds, including, without limitation, launch and in
orbit insurance as set forth on Schedule 6.11, (x) all rights in and to
indemnity claims relating to the Galaxy Assets and the Galaxy Liabilities (as
hereafter defined), (xi) all records, files and customer lists of the Galaxy
Business, (xii) all accounts receivable, (xiii) all choses in action and other
claims relating to the Galaxy Business, (xiv) all cash and cash equivalents
related to the Galaxy Business, (xv) all other assets included on the Galaxy
Balance Sheet (as defined in Section 6.4) and (xvi) all assets related to the
Galaxy Business created after the date of the Galaxy Balance Sheet, but
specifically excluding certain categories of assets held by Galaxy, HCSS, HCS
and HCCS which are described on Schedule 1.1 (the "Excluded Assets") (all of the
assets, properties, interests and rights used in the Galaxy Business, other than
the Excluded Assets, being referred to herein as the "Galaxy Assets"), and (b)
all direct and indirect liabilities, debts, obligations, commitments, expenses,
claims, deficiencies, guaranties or endorsements of any nature, whether
absolute, accrued, contingent or otherwise, known or unknown, matured or
unmatured, arising out of, in connection with or relating to, the Galaxy
Business, including, without limitation, (i) liabilities included on the Galaxy
Balance Sheet, (ii) liabilities of the type described on the Galaxy Balance
Sheet incurred or recognized since June 30, 1996, but specifically excluding (1)
intercompany indebtedness other than related to the purchase or sale of products
and services to or from Affiliates in the ordinary course of business or
permitted to be paid from the Closed System (as defined in Section 7.24) or
otherwise under this Agreement, and (2) indebtedness for borrowed money incurred
other than in accordance with the terms of this Agreement, (iii) liabilities
arising from the Galaxy Business and not required by generally accepted
accounting practices ("GAAP") to be included on the Galaxy Balance Sheet, (iv)
<PAGE>
liabilities related to the Galaxy Employees or any Galaxy ERISA Plan or Galaxy
Benefit Arrangement, unless otherwise excluded by HCI, in which case HCI shall
provide PAS with notice of its intent to exclude such liability no later than 30
days before the Effective Time (as defined in Section 2.2(b)), and (v)
liabilities incurred under any contract assumed by Newco (collectively, the
"Galaxy Liabilities"), in each case to be transferred, conveyed, assigned and
delivered or assumed by Newco. Notwithstanding the foregoing, the parties
expressly understand and agree that the Galaxy Liabilities shall not include
liabilities arising as a result of the reorganization of the Galaxy Business
that will occur prior to the Closing or as a result of the contribution of the
Galaxy Business to Newco that will occur at the Closing. In order to effect the
foregoing transfer, conveyance, assignment, delivery and assumption, without
limitation, at the Closing: (x) Galaxy and HCSS shall convey, transfer, assign
and deliver to Newco all right, title and interest in and to the Galaxy Assets
owned by them, and (y) HCI shall convey, transfer, assign and deliver to Newco
all of HCI's right, title and interest in and to all of the issued and
outstanding shares of common stock of HCS, HCCS and HCJ. For purposes of this
Agreement, the term "Galaxy Business" means the business of HE or any of HE's
Affiliates existing on the Closing Date relating to (i) the sale or lease of, or
the provision of satellite services via, transponder capacity on satellites
operating in geostationary earth orbit in the C-band, Ka-band and Ku-band
frequencies for the transmission of video, audio and data signals; and (ii) the
provision of telemetry, tracking and control services for such satellites and
for other satellites operating in geostationary earth orbit in the C-band,
Ka-band, Ku-band, L-band and UHF-band frequencies or other frequency bands that
may be utilized in the future; but in each case excluding the sale or lease of
transponder capacity and telemetry, tracking and control services provided on or
for any satellite that has both (x) multiple (six or more) receive and transmit
beams and (y) an on-board satellite payload processor which can switch uplink
signals in one beam to a downlink signal in one of multiple beams.

               1.2 Exclusion of Certain Assets and Liabilities. Immediately
prior to the transactions contemplated in Section 1.1, each of HCS, HCCS and HCJ
shall convey, transfer, assign and deliver to one or more entities controlled by
HE (that are not Contributed Entities) all of the right, title and interest of
HCS, HCCS and HCJ in and to Excluded Assets owned by them and all direct and
indirect liabilities, debts, obligations, commitments, expenses, claims,
deficiencies, guaranties or endorsements of any nature, whether absolute,
accrued, contingent or otherwise, known or unknown, matured or unmatured,
arising out of or connected with the Excluded Assets (the "Excluded
Liabilities").

               1.3 Issuance of Shares of Newco Common Stock. As consideration
for the Asset Contribution, Newco shall, at the Closing, issue and deliver to
HCI, Galaxy and HCSS, in such proportion as HCI shall determine, an aggregate of
one hundred six million six hundred twenty two thousand eight hundred seven
(106,622,807) shares of common stock, par value $.01 per share, of Newco ("Newco
Common Stock").

               1.4 Conveyancing and Assumption Documents. HCI, HCSS and Galaxy
shall, prior to the Closing, enter into all deeds, bills of sale, assignments,
instruments of assumption and other instruments, and obtain all third party and
regulatory consents, in each case necessary to consummate the transactions
<PAGE>
contemplated by this Article I to enable Newco to operate the Galaxy Business in
the manner such business was operated by HCI prior to the Closing Date hereof;
provided that all such instruments shall be in form and substance, and shall be
executed and delivered in a manner, reasonably satisfactory to HCI, Newco and
PAS.

                                   ARTICLE II
                                   THE MERGER

               2.1 Organization of the Merger Subsidiary. As promptly as
practicable following the execution of this Agreement, Newco shall cause PAS
Merger Corp. ("Merger Sub") to be organized as a corporation under the Delaware
General Corporation Law (the "DGCL") for the sole purpose of effectuating the
Merger. The Certificate of Incorporation and Bylaws of Merger Sub shall be in
such forms as shall be determined by Newco in consultation with PAS as soon as
practicable following the execution of this Agreement. The authorized capital
stock of Merger Sub shall initially consist of 100 shares of common stock, par
value $.01 per share, which shall be issued to Newco at a price of $1.00 per
share. As promptly as practicable following the execution of this Agreement (but
in no event later than thirty (30) days prior to the Closing Date), Newco shall
designate, in consultation with PAS, the initial directors and officers of
Merger Sub.

               2.2 The Merger. Pursuant to a Plan of Merger, in a form to be
mutually agreed upon by HCI and PAS (the "Merger Agreement"), upon the terms and
subject to the conditions set forth in this Agreement and in the Merger
Agreement, at the Closing, Merger Sub shall be merged with and into PAS in
accordance with the applicable provisions of the DGCL. PAS shall be the
surviving corporation in the Merger and shall continue its corporate existence
under the DGCL. As a result of the Merger and the Univisa Contribution, Newco
shall own, directly and indirectly, all of the common stock of PAS. The effects
and consequences of the Merger shall be as set forth herein and in the Merger
Agreement.

                  (a) As used in this Agreement, the term "Subsidiary," with
respect to any party, means any corporation, partnership, joint venture, other
legal entity or organization, whether incorporated or unincorporated, of which:
(i) such party or any other Subsidiary of such party is a general partner; (ii)
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation, partnership, joint venture,
other legal entity or organization is held by such party or by any one or more
of its Subsidiaries, or by such party and any one or more of its Subsidiaries;
or (iii) more than 50% of all classes of equity securities is, directly or
indirectly, owned or controlled by such party or by any one or more of its
Subsidiaries, or by such party and any one or more of its Subsidiaries.

                  (b) As used in this Agreement, the term "Effective Time" shall
mean the time and date which is (i) the later of the date and time of the filing
of the certificate of merger relating to the Merger with the Secretary of State
of the State of Delaware (or such other date and time as may be specified in
such certificate as may be permitted by law) or (ii) such other time and date as
HCI, Newco and PAS may agree.
<PAGE>
               2.3 Directors. The directors of Merger Sub immediately prior to
the Effective Time shall be the directors of the surviving corporation in the
Merger as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable law.

               2.4 Officers. The officers of Merger Sub immediately prior to the
Effective Time shall be the officers of the surviving corporation in the Merger
as of the Effective Time and until their successors are duly appointed or
elected in accordance with applicable law.

               2.5 Certificate of Incorporation and Bylaws. The Certificate of
Incorporation and Bylaws of PAS in effect at the Effective Time shall be the
Certificate of Incorporation and Bylaws of the surviving corporation in the
Merger until duly amended in accordance with the terms thereof and the DGCL;
provided, that the Certificate of Incorporation of PAS shall be amended,
effective prior to the Univisa Contribution, to provide that, notwithstanding
the Univisa Contribution and the Merger, shares of Class A Common Stock, Class B
Common Stock and PAS's Common Stock, par value $.01 per share (the "PAS Common
Stock") shall retain all rights, privilegCertificate of Incorporation and
Bylaws. The Certificate of Incorporation and Bylaws of PAS in effect at the
Effective Time shall be the Certificate of Incorporation and Bylaws of the
surviving corporation in the Merger until duly amended in accordance with the
terms thereof and the DGCL; provided, that the Certificate of Incorporation of
PAS shall be amended, effective prior to the Univisa Contribution, to provide
that, notwithstanding the Univisa Contribution and the Merger, shares of Class A
Common Stock, Class B Common Stock and PAS's Common Stock, par value $.01 per
share (the "PAS Common Stock") shall retain all rights, privileges and powers
currently possessed by shares of such classes of stock.

               2.6 Name. At the Effective Time, Newco will change its corporate
name to "PanAmSat Corporation" and PAS shall change its corporate name to a new
name specified by Newco.

               2.7 Actions of Newco. Newco shall (a) execute the Merger
Agreement as the sole stockholder of Merger Sub, (b) cause the directors and
officers of Merger Sub to take such steps as may be necessary or appropriate to
complete the organization of Merger Sub and to approve the Merger Agreement and
(c) cause Merger Sub to perform its obligations under this Agreement and the
Merger Agreement.

                                   ARTICLE III
                                   THE CLOSING

                  Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Article
IX, the closing of the Asset Contribution, the Univisa Contribution and the
Merger shall take place at 10:00 a.m., New York time, on the seventh business
day following satisfaction or waiver of the conditions set forth in Article VIII
(the "Closing Date"), at the offices of Chadbourne & Parke LLP, New York City,
unless another date, time or place is agreed to in writing by the parties hereto
and the parties to the Univisa Contribution Agreement (the "Closing").


                                   ARTICLE IV
                       EFFECT OF THE MERGER ON SECURITIES
                              OF PAS AND MERGER SUB

                  4.1 Merger Sub Stock. At the Effective Time, the shares of the
common stock of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into and shall become (i) the number of shares of Class A
<PAGE>
Common Stock of the surviving corporation in the Merger that is equal to the
number of shares of, and having terms identical in all respects to, Class A
Common Stock outstanding immediately prior to the Merger and (ii) the number of
shares of Common Stock of the surviving corporation in the Merger that is equal
to the number of shares of, and having terms identical in all respects to, PAS
Common Stock outstanding immediately prior to the Merger.

                  4.2 Conversion of PAS Shares.

                         (a) Except as otherwise provided in Section 4.4 and
subject to Sections 4.2(c) and 4.2(d), at the Effective Time, each issued and
outstanding share, other than any share owned by Newco or any Subsidiary of
Newco, of PAS Common Stock and Class A Common Stock (collectively, the "Shares")
shall be converted into, at the election of the holder thereof, one of the
following (as may be adjusted pursuant to Sections 4.4 and 4.6, the "Merger
Consideration"):

                              (i) for each such Share with respect to which an
         election to receive a combination of Newco Common Stock and cash has
         been effectively made and not revoked or lost pursuant to Sections
         4.3(c), (d) and (e) (a "Standard Election"), the right to receive (x)
         an amount in cash equal to one-half of the Standard Cash Consideration
         plus (y) one-half (0.5) share of Newco Common Stock (collectively, the
         "Standard Consideration"). The "Standard Cash Consideration" means an
         amount in cash equal to thirty dollars ($30.00), provided that, if the
         Closing shall not have occurred on or prior to the first anniversary of
         this Agreement, the Standard Cash Consideration shall be increased at a
         rate equal to 9% per annum from and including the first anniversary
         date to but excluding the Closing Date; or

                              (ii) for each such Share with respect to which an
         election to receive solely Newco Common Stock has been effectively made
         and not revoked or lost pursuant to Sections 4.3(c), (d) and (e) (a
         "Stock Election"), the right to receive one (1) share of Newco Common
         Stock (the "Stock Consideration"); or

                              (iii) for each such Share with respect to which an
         election to receive solely cash has been effectively made and not
         revoked or lost pursuant to Sections 4.3(c), (d) and (e) (a "Cash
         Election"), the right to receive the Standard Cash Consideration.

                         (b) As a result of the Merger and without any action on
the part of the holder thereof, at the Effective Time, (i) all Shares held by
any person other than Newco (or any Subsidiary of Newco) shall cease to be
outstanding and shall be cancelled and retired and shall cease to exist, and
each such holder of Shares shall thereafter cease to have any rights with
respect to such Shares, except the right to receive, without interest, the
Merger Consideration and cash in lieu of fractional shares of Newco Common Stock
in accordance with Section 4.5(c) upon the surrender of a certificate
representing such Shares (a "Share Certificate") and (ii) all outstanding shares
of Class B Common Stock shall continue to be indirectly held by Univisa.
<PAGE>
                         (c) Notwithstanding anything contained in this Section
4.2 to the contrary, each Share issued and held in PAS' treasury immediately
prior to the Effective Time shall, by virtue of the Merger, cease to be
outstanding and shall be cancelled and retired without payment of any
consideration therefor.

                         (d) Notwithstanding anything in this Section 4.2 to the
contrary, Shares which are issued and outstanding immediately prior to the
Effective Time and which are held by stockholders who have not voted such shares
in favor of the Merger and who shall have properly exercised their rights of
appraisal for such shares in the manner provided by the DGCL (the "Dissenting
Shares") shall be deemed to have made a Cash Election for purposes of Section
4.4, but shall not be converted into or be exchangeable for the right to receive
the Merger Consideration, unless and until such holder shall have failed to
perfect or shall have effectively withdrawn or lost his right to appraisal and
payment, as the case may be. If such holder shall have so failed to perfect or
shall have effectively withdrawn or lost such right, his shares shall thereupon
be deemed to have been converted into and to have become exchangeable for, at
the Effective Time, the right to receive the Standard Consideration, without any
interest thereon. PAS shall give Newco prompt notice of any Dissenting Shares
(and shall also give Newco prompt notice of any withdrawals of such demands for
appraisal rights) and Newco shall have the right to direct all negotiations and
proceedings with respect to any such demands. Neither PAS nor the corporation
surviving the Merger shall, except with the prior written consent of Newco,
voluntarily make any payment with respect to, or settle or offer to settle, any
such demand for appraisal rights.

                         (e) At the Effective Time, each holder of a
then-outstanding option to purchase Shares under PAS' Long-Term Stock Investment
Plan and the Option Agreements between PAS and certain of its executive officers
and other employees (collectively, the "Stock Option Plans"), whether or not
then exercisable (the "Options"), shall, in settlement thereof, receive for each
Share subject to such Option an amount (subject to any applicable withholding
tax) in cash equal to the difference between (i) the Standard Cash Consideration
and (ii) the per Share exercise price of such Option to the extent such
difference is a positive number (such amount being hereinafter referred to as,
the "Option Consideration"); provided, however, that with respect to any person
subject to Section 16(b) of the Securities Exchange Act of 1934, as amended,
(the "Exchange Act"), any such amount shall be paid as soon as practicable after
the first date payment can be made without liability to such person under
Section 16(b) of the Exchange Act. Upon receipt of the Option Consideration, the
Option shall be canceled. The surrender of an Option to PAS in exchange for the
Option Consideration shall be deemed a release of any and all rights the holder
had or may have had in respect of such Option. Prior to the Effective Time, PAS
shall obtain all necessary consents or releases from holders of Options under
the Stock Option Plans and take all such other lawful action as may be necessary
to give effect to the transactions contemplated by this Section 4.2(e) (except
for any such action that may require the approval of PAS' stockholders). Except
as otherwise agreed to by the parties, (i) the Stock Option Plans shall
terminate as of the Effective Time and the provisions in any other plan, program
or arrangement providing for the issuance or grant of any other interest in
respect of the capital stock of PAS or any Subsidiary thereof, shall be canceled
as of the Effective Time, and (ii) PAS shall assure that following the Effective
Time no participant in the Stock Option Plans or other plans, programs or
arrangements shall have any right thereunder to acquire equity securities of
<PAGE>
PAS, the corporation surviving the Merger or any Subsidiary thereof and to
terminate all such plans.


                  4.3 Elections by Holders of Shares.

                         (a) Each person who, at the Effective Time, is a record
holder of Shares (other than holders of Shares to be cancelled as set forth in
Section 4.2(c) or Dissenting Shares) shall have the right to submit an Election
Form (as defined in Section 4.3(c)) specifying the number of Shares that such
person desires to have converted into the right to receive Newco Common Stock
and cash pursuant to the Standard Election, the number of Shares that such
person desires to have converted into the right to receive Newco Common Stock
pursuant to a Stock Election and the number of Shares that such person desires
to have converted into the right to receive cash pursuant to a Cash Election.

                         (b) Promptly after the Allocation Determination (as
defined in Section 4.3(d)), Newco shall deposit (or cause to be deposited) with
a bank or trust company to be designated by HCI and reasonably acceptable to PAS
(the "Exchange Agent"), for the benefit of the holders of Shares and S Company,
for exchange in accordance with this Article IV and the Univisa Contribution
Agreement, (i) cash in the amount sufficient to pay the aggregate cash portion
of the Merger Consideration and the consideration payable in the Univisa
Contribution and (ii) certificates representing the shares of Newco Common Stock
("Newco Certificates") for exchange in accordance with this Article IV and the
Univisa Contribution Agreement (the cash and shares deposited pursuant to
clauses (i) and (ii) being hereinafter referred to as the "Exchange Fund").
Newco Common Stock into which Shares shall be converted pursuant to the Merger
shall be deemed to have been issued at the Effective Time.

                         (c) As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail to each holder of record of Shares
immediately prior to the Effective Time (excluding any Shares which will be
cancelled pursuant to Section 4.2(c) or Dissenting Shares) (A) a letter of
transmittal (the "Letter of Transmittal") (which shall specify that delivery
shall be effected, and risk of loss and title to Share Certificates shall pass,
only upon delivery of such Share Certificates to the Exchange Agent and shall be
in such form and have such other provisions as Newco shall specify), (B)
instructions for use in effecting the surrender of Share Certificates in
exchange for the Merger Consideration with respect to the Shares formerly
represented thereby, and (C) an election form (the "Election Form") providing
for such holders to make the Standard Election, the Stock Election or the Cash
Election. As of the Election Deadline (as defined in Section 4.3(d)), all
holders of Shares immediately prior to the Effective Time that shall not have
submitted to the Exchange Agent or shall have properly revoked an effective,
properly completed Election Form shall be deemed to have made a Standard
Election.

                         (d) Any Standard Election, Stock Election or Cash
Election shall have been validly made only if the Exchange Agent shall have
received by 5:00 p.m. New York time on a date (the "Election Deadline") to be
mutually agreed upon by HCI, Newco and PAS, an Election Form properly completed
and executed (with the signature or signatures thereof guaranteed to the extent
required by the Election Form) by such holder accompanied by such holder's Share
<PAGE>
Certificates, or by an appropriate guarantee of delivery of such Share
Certificates from a member of any registered national securities exchange or of
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company in the United States as set forth in such Election Form. Any
holder of Shares who has made an election by submitting an Election Form to the
Exchange Agent may, at any time prior to the Election Deadline, change such
holder's election by submitting a revised Election Form, properly completed and
signed that is received by the Exchange Agent prior to the Election Deadline.
Any holder of PAS Common Stock may at any time prior to the Election Deadline
revoke his election and withdraw his Share Certificates deposited with the
Exchange Agent by written notice to the Exchange Agent received by the close of
business on the day prior to the Election Deadline. As soon as practicable after
the Election Deadline, the Exchange Agent shall determine the allocation of the
cash portion of the Merger Consideration and the stock portion of the Merger
Consideration and shall notify Newco of its determination (the "Allocation
Determination").

                         (e) Upon surrender of a Share Certificate for
cancellation to the Exchange Agent, together with the Letter of Transmittal duly
executed, and such other documents as Newco or the Exchange Agent shall
reasonably request, the holder of such Share Certificate shall be entitled to
receive promptly after the Allocation Determination in exchange therefor (A) a
certified or bank cashier's check in the amount equal to the cash, if any, which
such holder has the right to receive pursuant to the provisions of this Article
IV (including any cash in lieu of fractional shares of Newco Common Stock
pursuant to Section 4.5(c)), and (B) a Newco Certificate representing that
number of shares of Newco Common Stock, if any, which such holder has the right
to receive pursuant to this Article IV (in each case less the amount of any
required withholding taxes), and the Share Certificate so surrendered shall
forthwith be cancelled. Until surrendered as contemplated by this Section
4.3(e), each Share Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive the Merger Consideration with
respect to the Shares formerly represented thereby.

                         (f) Newco shall have the right to make reasonable
rules, not inconsistent with the terms of this Agreement, governing the validity
of the Election Forms, the manner and extent to which Standard Elections, Stock
Elections or Cash Elections are to be taken into account in making the
determinations prescribed by Section 4.4, the issuance and delivery of
certificates for Newco Common Stock into which Shares are converted in the
Merger, and the payment of cash for Shares converted into the right to receive
cash in the Merger.

                         (g) Notwithstanding the foregoing provisions of this
Section 4.3, the parties hereto may decide to distribute Election Forms to PAS'
stockholders and require that holders making such elections respond prior to the
Merger, upon such additional terms and conditions as may be agreed to by the
parties.
<PAGE>
                  4.4 Proration.

                         (a) As is more fully set forth below and except as may
be paid pursuant to Section 4.5 or otherwise in respect of Dissenting Shares,
the aggregate amount of cash to be paid in the Merger and in the Univisa
Contribution (other than the cash payment of $225 million provided for in the
last sentence of Section 1.2(a) of the Univisa Contribution Agreement) shall not
exceed the product of (x) one-half (1/2) of the Standard Cash Consideration and
(y) the aggregate number of shares of PAS Common Stock, Class A Common Stock and
Class B Common Stock issued and outstanding immediately prior to the Effective
Time (such product, the "Maximum Cash Amount").

                         (b) In the event that the sum of the aggregate amount
of cash represented by the Cash Elections hereunder (including Cash Elections
deemed to have been made with respect to Dissenting Shares) and under the
Univisa Contribution Agreement received by the Exchange Agent (such sum, the
"Requested Cash Amount") exceeds the Maximum Cash Amount minus the aggregate
amount of cash payable on account of all Standard Elections made or deemed to
have been made hereunder or under the Univisa Contribution Agreement (such
difference, the "Cash Cap"), each holder making (or deemed to make) a Cash
Election hereunder or under the Univisa Contribution Agreement shall receive,
for each Share or Value Unit (as such term is defined in the Univisa
Contribution Agreement), as the case may be, with respect to which a Cash
Election has been made (or is deemed to have been made) hereunder or under the
Univisa Contribution Agreement, (x) cash in an amount equal to the Prorated Cash
Amount and (y) a number of shares of Newco Common Stock equal to a fraction, the
numerator of which is equal to the Standard Cash Consideration minus the
Prorated Cash Amount and the denominator of which is the Standard Cash
Consideration. The term "Prorated Cash Amount" means the greater of (i) one-half
(1/2) of the Standard Cash Consideration and (ii) the product of the Standard
Cash Consideration and a fraction, the numerator of which is the Cash Cap and
the denominator of which is the Requested Cash Amount.

                         (c) The aggregate number of shares of Newco Common
Stock that may be issued pursuant to Stock Elections hereunder and under the
Univisa Contribution Agreement is not subject to any maximum. In the event that
the Requested Cash Amount is less than the Cash Cap, each holder making a Stock
Election hereunder or under the Univisa Contribution Agreement shall receive, at
the option of Newco, for each Share or Value Unit, as the case may be, with
respect to which a Stock Election has been made hereunder or under the Univisa
Contribution Agreement, (x) not more than the Stock Consideration and not less
than a number of shares of Newco Common Stock equal to a fraction the numerator
of which is the Requested Stock Amount minus the difference between the Cash Cap
and the Requested Cash Amount, and the denominator of which is the Requested
Stock Amount (such whole or fractional share, the "Prorated Stock Amount") and
(y) cash in an amount equal to the product of (A) the Standard Cash
Consideration and (B) one minus the Prorated Stock Amount. The term "Requested
Stock Amount" means the product of the aggregate number of shares of Newco
Common Stock represented by Stock Elections hereunder or under the Univisa
Contribution Agreement received by the Exchange Agent and the Standard Cash
Consideration.
<PAGE>
                  4.5 Dividends, Fractional Shares, Etc.

                         (a) Notwithstanding any other provisions of this
Agreement, no dividends or other distributions declared after the Effective Time
on Newco Common Stock shall be paid with respect to any Shares which, prior to
the Effective Time, were represented by a Share Certificate until such Share
Certificate is surrendered for exchange as provided herein. Subject to the
effect of applicable Laws (as defined in Section 5.6(a)), following surrender of
any such Share Certificate, there shall be paid to the holder of the Newco
Certificates issued in exchange therefor, without interest, (i) at the time of
such surrender, the amount of dividends or other distributions with a record
date after the Effective Time theretofore payable with respect to such whole
shares of Newco Common Stock and not paid, less the amount of any withholding
taxes which may be required thereon, and (ii) at the appropriate payment date,
the amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such whole shares of Newco Common Stock, less the amount
of any withholding taxes which may be required thereon.

                         (b) At or after the Effective Time, there shall be no
transfers on the stock transfer books of PAS of the Share Certificates which
were outstanding immediately prior to the Effective Time. If, after the
Effective Time, certificates formerly representing any such Shares are presented
to the surviving corporation in the Merger, they shall be cancelled and
exchanged for certificates for the consideration, if any, deliverable in respect
thereof pursuant to this Agreement in accordance with the procedures set forth
in this Article IV. Share Certificates surrendered for exchange by any person
constituting an "affiliate" of PAS for purposes of Rule 145(c) under the
Securities Act of 1933, as amended (the "Securities Act"), shall not be
exchanged until Newco has received a written agreement from such person as
provided in Section 7.14.

                         (c) No fractional shares of Newco Common Stock shall be
issued pursuant to the Merger or the Univisa Contribution. In lieu of the
issuance of any fractional share of Newco Common Stock pursuant to the Merger or
the Univisa Contribution, cash adjustments will be paid to holders in respect of
any fractional share of Newco Common Stock that would otherwise be issuable, and
the amount of such cash adjustment shall be equal to the product of such
fractional amount and the Standard Cash Consideration.

                         (d) Any portion of the Exchange Fund (including the
proceeds of any investments thereof and any shares of Newco Common Stock) that
remains unclaimed by the former stockholders of PAS six months after the
Effective Time shall be delivered to Newco. Any former stockholder of PAS who
has not theretofore complied with this Article IV shall thereafter look only to
Newco for payment of the consideration payable on account of the Univisa
Contribution or the Merger, as the case may be, cash in lieu of fractional
shares and unpaid dividends and distributions on the Newco Common Stock
deliverable in respect of each share such stockholder holds as determined
pursuant to this Agreement, in each case without any interest thereon.

                         (e) None of HCI, its Affiliates, PAS, Newco, the
Exchange Agent or any other person shall be liable to any former holder of
Shares or shares of Class B Common Stock for any amount properly delivered to a
<PAGE>
public official pursuant to applicable abandoned property, escheat or similar
laws.

                         (f) In the event that any Share Certificate shall have
been lost, stolen or destroyed, upon the making of an affidavit of that fact by
the person claiming such Share Certificate to be lost, stolen or destroyed and,
if required by Newco, the posting by such person of a bond in such reasonable
amount as Newco may direct as indemnity against any claim that may be made
against it with respect to such Share Certificate, the Exchange Agent will issue
in exchange for such lost, stolen or destroyed Share Certificate the applicable
Merger Consideration, cash in lieu of fractional shares, and unpaid dividends
and distributions on Shares as provided in this Section 4.5, deliverable in
respect thereof pursuant to this Agreement.

                  4.6 Certain Additional Prorations. In the event that the
aggregate number of shares of Newco Common Stock for which Value Units were to
be exchanged pursuant to Section 1.2(a) of the Univisa Contribution Agreement
would otherwise be less than seven million five hundred thousand (7,500,000)
(after giving effect to any prorations pursuant to Section 4.4, if applicable),
then notwithstanding anything to the contrary contained in this Agreement or in
the Univisa Contribution Agreement, (i) a number of Value Units equal to seven
million five hundred thousand (7,500,000) minus the aggregate number of shares
of Newco Common Stock for which Value Units would otherwise be exchanged
pursuant to Section 1.2(a) of the Univisa Contribution Agreement (after giving
effect to any prorations pursuant to Section 4.4, if applicable) (such
difference, the "SPOT Difference") shall be exchanged for Newco Common Stock
(after giving effect to any prorations pursuant to Section 4.4, if applicable),
(ii) the aggregate amount of cash for which Value Units were otherwise to be
exchanged pursuant to Section 1.2(a) of the Univisa Contribution Agreement
(after giving effect to any prorations pursuant to Section 4.4, if applicable)
shall be reduced by an amount equal to the product of the SPOT Difference and
the Standard Cash Consideration, and (iii) the aggregate number of Shares with
respect to which Cash Elections or Stock Elections were made hereunder shall be
adjusted in accordance with Section 4.4, if applicable, giving effect (a) first,
to the Shares as to which a Cash Election was made but which were to be
converted into the right to receive shares of Newco Common Stock in lieu of cash
in accordance with Section 4.4(b), and (b) second, to all other Shares as to
which a Stock Election was made.


                                   ARTICLE V
                     REPRESENTATIONS AND WARRANTIES OF PAS

                  PAS represents and warrants to each of the Hughes Parties as
follows:

                  5.1 Organization, Standing and Power. Each of PAS and its
Subsidiaries is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation, has all
requisite corporate power and authority necessary to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified, and in good standing to own, lease and operate its properties and to
conduct business in each jurisdiction, domestic and foreign, in which the
business it is conducting, or the operation, ownership or leasing of its
properties, makes such qualification necessary, other than in such jurisdictions
<PAGE>
where the failure to so qualify or be in good standing is not likely to have a
material adverse effect on PAS and its Subsidiaries, taken as a whole. PAS and
each of its Subsidiaries has heretofore made available to HCI true, complete and
correct copies of its Certificate of Incorporation and Bylaws as currently in
effect together with all amendments thereto. No resolution has been adopted to
amend any of such Certificates of Incorporation or Bylaws except as expressly
called for by this Agreement. None of PAS or its Subsidiaries (i) has been
dissolved, adopted resolutions to dissolve or acted in any way to accomplish,
request or approve such dissolution, (ii) is a party to any merger or (iii) has
been declared bankrupt, and, to PAS' knowledge, no action or request is pending
to declare it bankrupt. PAS has made available to HCI minute books for each of
PAS and its Subsidiaries which contain complete and accurate records in all
material respects of all meetings, or consents in lieu thereof, of the
stockholders and the Board of Directors (including committees thereof) of each
such entity since its date of formation. As used in this Agreement, any
reference to any event, change or effect having a "material adverse effect" on
any person or entity means (i) such event, change or effect, individually or in
the aggregate with other events, changes, or effects, is materially adverse to
the financial condition, business, results of operations, assets, liabilities,
properties or prospects of such person or entity and (ii) such event, change or
effect, individually, or in the aggregate with other events, changes or effects,
would impair the right or ability of the parties hereto and thereto to
consummate the transactions contemplated hereby and by the Related Agreements
(as defined in Section 7.9).

                  5.2 Capital Structure. As of the date hereof, the authorized
capital stock of PAS consists of 100,000,000 shares of Class A Common Stock,
100,000,000 shares of Class B Common Stock, 400,000,000 shares of PAS Common
Stock and 20,000,000 shares of Preferred Stock, $.01 par value per share ("PAS
Preferred Stock"). At the close of business on September 1, 1996: (i) 40,459,432
shares of Class A Common Stock, 40,459,431 shares of Class B Common Stock,
19,081,137 shares of PAS Common Stock and 311,132.777 shares of PAS Preferred
Stock were issued and outstanding, 1,065,225 shares of PAS Common Stock were
reserved for issuance pursuant to currently outstanding options pursuant to the
Stock Option Plans, and, except for the issuance of shares of PAS Common Stock
pursuant to the exercise of the Options and except as set forth on Schedule 5.2,
there are no employment, executive termination or similar agreements providing
for the issuance of any shares of Class A Common Stock, Class B Common Stock,
PAS Common Stock or PAS Preferred Stock; (ii) no shares of Class A Common Stock,
Class B Common Stock, PAS Common Stock or PAS Preferred Stock were held by PAS
or any of its Subsidiaries; and (iii) except as set forth on Schedule 5.2, no
bonds, debentures, notes or other instruments or evidence of indebtedness having
the right to vote (or convertible into, or exercisable or exchangeable for,
securities having the right to vote) on any matters on which stockholders of PAS
may vote ("PAS Voting Debt") were issued or outstanding. All outstanding shares
of the capital stock of PAS and the outstanding capital stock of each of PAS'
Subsidiaries and all such shares which may be issued upon the exercise of
outstanding options and warrants are validly issued, fully paid and
nonassessable and no such shares are subject to preemptive or other similar
rights. Except as set forth on Schedule 5.2, all outstanding shares of capital
stock of PAS' Subsidiaries are owned by PAS or a direct or indirect wholly-owned
Subsidiary of PAS, free and clear of all liens, charges, encumbrances, claims
and options of any nature. Except as set forth on Schedule 5.2, neither PAS nor
<PAGE>
any of PAS' Subsidiaries (i) beneficially owns any capital shares or has any
other record or beneficial equity or other ownership or interest in any
corporation, partnership, joint venture, association or other entity or business
enterprise or (ii) has any commitment to contribute to the capital of, make
loans to, or share the losses of any person or entity (other than any of PAS or
any of its Subsidiaries). Except as set forth in this Section 5.2 and except for
changes since September 1, 1996 resulting from the exercise of stock options
granted pursuant to the Stock Option Plans, there are outstanding: (i) no shares
of capital stock, PAS Voting Debt or other voting securities of PAS authorized,
issued or outstanding; (ii) no securities of PAS or any Subsidiary of PAS
convertible into, or exchangeable or exercisable for, shares of capital stock,
PAS Voting Debt or other voting securities of PAS or any Subsidiary of PAS; and
(iii) no options, warrants, calls, rights (including preemptive rights),
commitments or agreements to which PAS or any Subsidiary of PAS is a party or by
which it is bound, in any case obligating PAS or any Subsidiary of PAS to issue,
deliver, sell, purchase, redeem or acquire, or cause to be issued, delivered,
sold, purchased, redeemed or acquired, additional shares of capital stock of PAS
or any PAS Voting Debt or other voting securities of PAS or of any Subsidiary of
PAS, or obligating PAS or any Subsidiary of PAS to grant, extend or enter into
any such option, warrant, call, right, convertible security, commitment or
agreement. Since September 1, 1996, PAS has not (i) granted any options,
warrants or rights to purchase shares of capital stock of PAS or (ii) amended or
repriced any Option or the Stock Option Plans, and set forth on Schedule 5.2 is
a list of all outstanding options, warrants and rights to purchase shares of
capital stock of PAS and the exercise prices relating thereto. Except as set
forth on Schedule 5.2, there are not as of the date hereof and there will not be
at the Effective Time any stockholder agreements, voting trusts or other
agreements or understandings to which PAS or any of its Subsidiaries is a party
or by which any such entity is bound relating to the voting of any shares of the
capital stock of PAS or any of its Subsidiaries. Except as set forth on Schedule
5.2, there are no restrictions on PAS to vote the stock of any of its
Subsidiaries. Except as granted in connection with the transactions contemplated
by this Agreement, no person has any rights to cause PAS or its Subsidiaries to
register with the United States Securities and Exchange Commission (the "SEC")
any securities of PAS or any of its Subsidiaries.

                  5.3 Authority; No Violations; Consents and Approvals.

                         (a) PAS has all requisite corporate power and authority
to execute and deliver this Agreement and the Related Agreements to which it is
a party and to perform its obligations hereunder and thereunder and to effect
the transactions contemplated hereby and thereby, and subject to PAS Stockholder
Approval (as defined in Section 5.3(c)), to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the Related Agreements to which PAS is a party and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of PAS, subject, if required with respect
to consummation of the Merger, to PAS Stockholder Approval. Each of this
Agreement and the Related Agreements to which PAS is a party has been duly
executed and delivered by PAS and, subject, if required with respect to
consummation of the Merger, to PAS Stockholder Approval, and assuming that each
of this Agreement and the Related Agreements to which PAS is a party constitutes
the valid and binding agreement of the other parties thereto, and subject to
obtaining all necessary approvals by Government Entities, constitutes a valid
<PAGE>
and binding obligation of PAS enforceable in accordance with its terms except
that the enforcement hereby may be limited by (a) bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
"principles of equity" (regardless of whether enforceability is considered in a
proceeding at law or in equity) (the foregoing exception, the "Bankruptcy
Exception"). For purposes of this Agreement, the term "Government Entity" means
any legislative, executive, judicial, regulatory or other governmental or
quasi-governmental authority, instrumentality or body, whether domestic or
foreign, local, state, federal or other, including, without limitation, any
administrative agency, commission or court.

                         (b) The execution, delivery and performance by PAS of
each of this Agreement and the Related Agreements to which PAS is a party does
not, and the consummation by PAS of the transactions contemplated hereby and
thereby will not, (x) conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) which is likely to have a
material adverse effect on PAS and its Subsidiaries, taken as a whole, or give
rise to a right of termination, cancellation or acceleration of any obligation
or the loss of a material benefit, or the creation of a material lien, pledge,
security interest or other encumbrance on assets or property, or right of first
refusal with respect to any material asset or property (any such conflict,
violation, default, right of termination, cancellation or acceleration, loss,
creation or right of first refusal, a "PAS Violation"), under or pursuant to any
provision of the respective Certificate of Incorporation or Bylaws of PAS or
equivalent constituent document of any of its Subsidiaries or, (y) except as to
which requisite waivers or consents have been obtained and, except as set forth
on Schedule 5.3(b) hereto and assuming the consents, approvals, authorizations
or permits and filings or notifications referred to in paragraph (c) of this
Section 5.3 are duly and timely obtained or made and, if required, PAS
Stockholder Approval is obtained, result in any PAS Violation of any Material
Contract, PAS ERISA Plan (as defined in Section 5.9(c)(i)), PAS Benefit
Arrangement (as defined in Section 5.9(c)(ii)), PAS Permit (as defined in
Section 5.6(b)), or Law applicable to PAS or any of its Subsidiaries or any of
their respective properties or assets; provided, however, that nothing in this
Section 5.3 will be deemed to constitute a representation or warranty by PAS as
to any antitrust law or requirement. The Board of Directors of PAS has taken all
actions necessary under the DGCL, including approving the transactions
contemplated by this Agreement and the Related Agreements, to ensure that
Section 203 of the DGCL and the provisions of any other state takeover laws do
not, and will not, apply to the transactions contemplated hereby and thereby. No
vote of the holders of the PAS Preferred Stock is required to consummate the
Asset Contribution, the Univisa Contribution, the Merger or any of the other
transactions contemplated hereby.

                         (c) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any
Government Entity, is required by or with respect to PAS or any of its
Subsidiaries in connection with the execution and delivery by PAS of any of this
Agreement or the Related Agreements to which PAS is a party or the consummation
by PAS of the transactions contemplated hereby and thereby, which if not
obtained or made is likely to have a material adverse effect on PAS' ability to
consummate the transactions contemplated hereby and thereby, except for: (A) the
filing of a premerger notification and report form by PAS under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules
<PAGE>
and regulations thereunder (the "HSR Act") and the expiration or termination of
the applicable waiting period thereunder; (B) the filing with the SEC of (x) the
Proxy Statement/Prospectus and related Registration Statement (as such terms are
defined in Section 7.5) relating to a meeting of the holders of shares of common
stock of PAS to adopt this Agreement (the "PAS Stockholder Approval") and (y)
such reports under and such other compliance with the Exchange Act and the rules
and regulations thereunder, as may be required in connection with this Agreement
and the Related Agreements to which PAS is a party and the transactions
contemplated hereby and thereby; (C) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware; (D) such filings and
approvals as may be required by any applicable state securities, "blue sky" or
takeover laws; (E) such filings and approvals as may be required by any foreign
premerger notification Laws; (F) such consents, approvals, orders,
authorizations and filings required under any environmental, health or safety
law; (G) the filing with the FCC of (x) the applications and waiver requests
described in Section 7.9(c), (y) any requisite post Closing amendments to
pending FCC applications filed by PAS and its Subsidiaries, reflecting (subject
to FCC consent and consummation) the Asset Contribution, the Univisa
Contribution and the Merger, and (z) associated filings with the FCC that do not
require the FCC's consent or approval; and (H) such other consents, approvals,
orders, authorizations, registrations, declarations, filings, notices and
Permits (as defined in Section 5.6(a)) set forth on Schedule 5.3(c).

                  5.4 SEC Documents. PAS has made available to HCI a true and
complete copy of each form, report, schedule, registration statement and
definitive proxy statement filed by PAS with the SEC since July 29, 1993 and
prior to the date of this Agreement (the "PAS SEC Documents"), which are all the
documents (other than preliminary material) that PAS was required to file with
the SEC since such date. As of their respective dates, or, if required to be
amended, as of the date of the last such amendment, (i) the PAS SEC Documents
complied in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such PAS SEC Documents, and (ii) none of the PAS SEC
Documents contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Each of the financial statements of PAS included in the PAS SEC
Documents have been prepared from, and are in accordance with, the books and
records of PAS and/or its consolidated Subsidiaries, comply in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto, were prepared in accordance
with GAAP applied on a consistent basis during the periods involved (except as
may be indicated in the notes thereto) and present fairly, in all material
respects, in accordance with applicable requirements of GAAP, the consolidated
financial position of PAS and its consolidated Subsidiaries as of their
respective dates and the consolidated results of operations and the consolidated
cash flows of PAS and its consolidated Subsidiaries for the periods presented
therein. No Subsidiary of PAS is required to file any form, report or other
document with the SEC. The books and all other financial records of PAS and each
of its Subsidiaries are complete and correct in all material respects.
<PAGE>
                  5.5 Information Supplied. The Proxy Statement/Prospectus (as
defined in Section 7.5), or any amendment thereof or supplement thereto, will
not, on the date it is first mailed to PAS' stockholders or at the time of PAS'
stockholders meeting, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they are
made, not misleading; provided, however, that no representation is made by PAS
with respect to statements made therein based on information supplied by any
Hughes Party for inclusion in the Proxy Statement/Prospectus. The information
supplied by PAS for inclusion in each Registration Statement (as defined in
Section 7.5) will not, on the date it is first filed with the SEC and as of the
date it becomes effective, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. Subject to the proviso set forth in the second
preceding sentence, the Proxy Statement/Prospectus, will comply as to form, in
all material respects, with the provisions of the Exchange Act and the rules and
regulations thereunder.

                  5.6 Compliance with Laws.

                         (a) Except as disclosed on Schedule 5.6(a) or the PAS
SEC Documents, the businesses of PAS and its Subsidiaries are not being
conducted in violation of any Law the violation of which is likely to have a
material adverse effect on PAS or any of its Subsidiaries. Except as disclosed
on Schedule 5.6(a), no material investigation or review by any Government Entity
with respect to PAS, any of its Subsidiaries or their respective businesses is
pending or, to the best knowledge of PAS, threatened and PAS has not received
any written citation or notification alleging any violation of any Law or Permit
the continuing violation of which is likely to have a material adverse effect on
PAS or any of its Subsidiaries. As used in this Agreement, the term "Law" means
any applicable domestic or foreign, federal, state or local laws, statutes,
regulations, rules, codes, ordinances, orders and governmental licenses,
franchises, permits and governmental authorizations enacted, adopted, issued or
promulgated by any Government Entity (including, without limitation, to the
extent applicable, those pertaining to communications, broadcasting, consumer
protection, building, zoning, environmental and occupational safety and health
requirements and all requirements of the Communications Act of 1934, as amended,
or any successor statute, and the rules and regulations of the FCC promulgated
thereunder) or common law. As used in this Agreement, the term "Permits" means
all permits (including conditional use permits), licenses, franchises,
approvals, certificates, concessions, privileges, immunities, consents or other
authorizations issued or authorized by any Government Entity.

                         (b) Set forth on Schedule 5.6(b) is a true and complete
list of all Permits issued to or held by PAS or any of its Subsidiaries (as
amended or modified), except for Permits which are immaterial to the assets or
business of PAS or any of its Subsidiaries (collectively, the "PAS Permits");
provided, however, that notwithstanding the foregoing materiality threshold,
Schedule 5.6(b) lists (i) all Permits issued by the FCC to PAS or any of its
Subsidiaries, (ii) all Permits, whether or not issued by the FCC, authorizing
the construction, launch or operation of the PAS Satellites or the PAS Ground
Stations (other than Permits granted or issued by local or municipal Government
Entities, such as building permits, local occupancy permits or zoning
regulations, which are not material to PAS and its Subsidiaries, taken as a
<PAGE>
whole), and (iii) all Permits issued to PAS or any of its Subsidiaries by
Government Entities that regulate broadcasting or communications, authorizing
any of PAS or its Subsidiaries to provide broadcasting or communications
services. Schedule 5.6(b) also sets forth a true and complete list of all
pending applications for Permits that would be PAS Permits if issued or granted
and all pending applications by PAS or its Subsidiaries for modification,
extension or renewal of PAS Permits. The PAS Permits are all of the Permits
required to be issued to or held by PAS or its Subsidiaries in order to allow
PAS and its Subsidiaries to own or lease their respective assets and to lawfully
conduct their respective businesses, including, without limitation, the
construction, launch and operation of, and transmitting to and from, each of the
PAS Satellites and the PAS Ground Stations (as such terms are defined in Section
5.19(a)) and the provision of broadcasting or communications services, except
where the failure to possess any such Permit is not likely to have a material
adverse effect on PAS and its Subsidiaries, taken as a whole. Notwithstanding
the generality of the preceding paragraph, except as set forth on Schedule
5.6(b), each of PAS and its Subsidiaries has fulfilled and complied in all
material respects with its obligations under each of the PAS Permits owned, held
or possessed by it, and no event has occurred or condition or state of facts
exists which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any PAS Permit and which permits or, after
notice or lapse of time or both, would permit revocation or termination of any
such PAS Permit, and neither PAS nor any of its Subsidiaries has received or has
knowledge of any written notice of cancellation or default or of any dispute
concerning any such PAS Permit, or of any such event, condition or state of
facts where the effect thereof would be material to PAS and its Subsidiaries,
taken as a whole. Each of the PAS Permits is validly held by the entities listed
on Schedule 5.6(b), is in full force and effect in all material respects, is
free and clear of all Liens (other than Permitted Liens), is unimpaired by acts
or omission of PAS or its employees, partners or Affiliates, will expire on the
date shown on Schedule 5.6(b), is valid for the balance of its current term, and
is not subject to any restriction or condition that limits in any material
respect the full operation of PAS' business as now operated. Except as set forth
on Schedule 5.6(b) and for rulemaking proceedings affecting the satellite
industry in general, no complaints, proceedings or applications are pending, or
to PAS' best knowledge, threatened, at the FCC or any other Government Entity,
that would result in the revocation, forfeiture, adverse modification,
non-renewal or suspension of any of the PAS Permits, the denial of any pending
application by PAS or its Affiliates for a Permit or a modification, extension
or renewal thereof, the issuance against PAS of any cease and desist order, or
the imposition of any administrative actions by the FCC or any other Government
Entity with respect to the PAS Permits, or that would adversely affect the
ability of the corporation surviving the Merger to continue to operate the
business of PAS and its Subsidiaries as currently operated by such parties.
Except as set forth on Schedule 5.6(b), PAS has not received any complaint that
any of the PAS Satellites or the PAS Ground Stations is causing objectionable
interference to the transmissions or reception of any other radio communications
facility, and to PAS' best knowledge, no other radio communications facility is
causing objectionable interference to the transmissions from or the receipt of
signals by any PAS Satellite or PAS Ground Station. Except as set forth on
Schedule 5.6(b), none of the PAS Permits that has been issued prior to the date
hereof is the subject of any pending renewal application; no renewal of any PAS
Permit issued by the FCC would constitute a major environmental action under the
FCC Rules excluding the impact of the FCC's new RF radiation rules adopted by
the FCC in ET Docket No. 93-62 on August 1, 1996; and PAS is not aware of any
<PAGE>
reason why the PAS Permits will not be renewed in the ordinary course or why any
of the PAS Permits might be revoked. PAS knows of the existence of no fact that,
under present Law, would disqualify PAS from consummating the Merger within the
time contemplated herein. Except as set forth on Schedule 5.6(b), all
information contained in any pending application by PAS or any of its
Subsidiaries for a Permit or modification, extension, or renewal of a PAS Permit
is true, correct and complete in all material respects. Except as set forth on
Schedule 5.6(b), PAS has duly filed or caused to be filed with the FCC all
required material reports, statements, documents, registrations, filings or
submissions with respect to the operations of the business of PAS and its
Subsidiaries, the PAS Permits issued by the FCC, PAS' and its Subsidiaries'
ownership of their assets and the pending applications by PAS or any of its
Subsidiaries for Permits or for modification, extension or renewal of PAS
Permits. All such filings complied in all material respects with Laws when made
and no deficiencies have been asserted with respect to any such filings. Except
for rulemaking proceedings affecting the satellite industry in general, no
judgment, decree, order or notice of violation has been issued by the FCC (or
other Government Entity) which permits or contemplates revocation, modification
or termination of any of the PAS Permits or which would result in any material
impairment of any rights thereunder. As used in this Agreement, the term
"Affiliate" means with respect to any person or entity, any person or entity
which directly or indirectly controls, is controlled by or is under common
control with such person or entity; provided, however, that "Affiliate" with
respect to any person or entity shall also include any person or entity of which
the first person or entity directly or indirectly owns ten percent (10%) or more
of the common equity and shall, in the case of each Hughes Party, include HE,
but exclude any person controlling HE and any person under common control with
HE but not itself controlled by HE.

                         (c) Except as set forth on Schedule 5.6(c), neither
PAS, its Subsidiaries or Affiliates, nor any of their respective employees, are
officials or officers of any Government Entity or any political party, and
neither PAS nor any of its Subsidiaries or Affiliates has taken, is taking or
will take, or has allowed or will allow on its behalf to be taken, any action
which would have violated or would violate the United States Foreign Corrupt
Practices Act of 1977, the U.S. Export Administration Act, as amended, or any
Laws to which such party or person is subject, relating in each case to payments
for the purpose of influencing an act or decision of a Government Entity or
government official; provided, however, that nothing in this sentence shall be
deemed to subject any party or person to any Law to which such party or person
would not otherwise be subject. Each of PAS and its Subsidiaries is in material
compliance with all domestic and foreign laws restricting or regulating the
export of technology to foreign countries.

                  5.7 Litigation. Except as disclosed on Schedule 5.7 or in the
PAS SEC Documents, there is no suit, action or proceeding pending or, to PAS'
knowledge, threatened against or affecting PAS or any of its Subsidiaries, nor
is there any written judgment, decree, injunction, rule or order of any
Government Entity or arbitrator outstanding against PAS or any of its
Subsidiaries.

                  5.8 Taxes. Each of PAS and its Subsidiaries has timely filed
or has obtained timely extensions for all tax returns required to be filed by
such party completely and accurately in all material respects and has timely
<PAGE>
paid (or PAS has paid on behalf of any such Subsidiary), or has established an
adequate reserve for the payment of, all material taxes which are required to be
paid in respect of the taxable period reflected in such returns or for periods
since the most recent date on which a return was filed. All taxes shown to be
due on the tax returns that have been filed by PAS and each of its Subsidiaries
have been timely paid. Except as provided on Schedule 5.8, neither PAS nor any
of its Subsidiaries has waived any statute of limitations in respect of taxes of
PAS or any of its Subsidiaries. Except as provided on Schedule 5.8, none of the
tax returns filed by PAS or any of its Subsidiaries has been examined by any
taxing authority, and no audit, action, proceeding or assessment is pending or
threatened by any taxing authority against PAS or any of its Subsidiaries where
such audit, proceeding or assessment is likely to have a material adverse effect
on PAS and its Subsidiaries, taken as a whole. All material taxes which PAS or
any of its Subsidiaries is required by law to withhold or to collect for payment
have been duly withheld and collected, and have been paid or accrued, reserved
against and entered on the books of PAS. There are no material liens for taxes
(other than for current taxes not yet due and payable) on the assets of PAS or
any of its Subsidiaries. PAS has previously delivered or made available to HCI
true and complete copies of its federal income tax returns for each of the
fiscal years ended December 31, 1992 through December 31, 1995. Except as set
forth on Schedule 5.8 or as provided herein, neither PAS nor any of its
Subsidiaries is a party to or bound by any agreement providing for the
allocation or sharing of taxes with any entity which is not, either directly or
indirectly, a Subsidiary of PAS. Neither PAS nor any of its Subsidiaries has
filed or is required to file a consent pursuant to or agreed to the application
of Section 341(f) of the Code. PAS is not a "United States real property holding
corporation" as defined in Section 897(c)(2) of the Code during the applicable
period specified in Section 897(c)(1)(A)(ii) of the Code. For the purpose of
this Agreement, the term "tax" (and, with correlative meaning, the terms "taxes"
and "taxable") shall include all federal, state, local and foreign income,
profits, franchise, gross receipts, payroll, sales, employment, use, property,
withholding, excise and other taxes, duties or assessments of any nature
whatsoever, together with all interest, penalties and additions imposed with
respect to such amounts.

                  5.9 Employees and Agents; Benefit Plans.

                         (a) Schedule 5.9(a) contains a complete and accurate
list of all employees of PAS and its Subsidiaries, whether active or inactive,
indicating thereon the direct entity by whom such employee is employed and the
employee's job title. PAS also shall provide on Schedule 5.9(a) as to each such
employee, the position held, the length of service, employee loans, stock
options, annual salary, incentive bonuses, international and other allowances
and PAS' cost of dental, health (other than retiree health), life and long-term
disability insurance. Except as set forth on Schedule 5.9(a), no employee of PAS
or any of its Subsidiaries is represented by any union, or covered by any
collective bargaining or similar agreement in connection with their employment
at PAS, nor is any such employee covered by a written agreement of employment in
connection with their employment at PAS, or to PAS' knowledge, any oral
employment agreement, which cannot be terminated at will by PAS or one of its
Subsidiaries or which provides for severance pay or other compensation,
including stock option rights and deferred compensation arrangements, upon
termination of employment or upon change of control of PAS or any of its
<PAGE>
Subsidiaries. Except as listed and described on Schedule 5.9(a), neither PAS nor
any of its Subsidiaries is a party to any collective bargaining or other similar
labor agreement, including any such agreement which provides for or may give
rise to any liability or obligation for any severance or termination pay or
which will be the subject of renegotiation by virtue of the consummation of the
transactions contemplated by this Agreement, and to PAS' knowledge, no labor
organization has filed a petition to become the collective bargaining
representative with respect to PAS or any of its Subsidiaries.

                         (b) Except as set forth on Schedule 5.9(b), PAS and
each of its Subsidiaries have complied in all material respects with all
applicable employment and labor laws, including but not limited to those
relating to wages, hours, collective bargaining, discrimination, plant closing
notices, and the payment of social security and similar taxes, and are not
liable for any arrears of wages or any material penalties for failure to comply
with any of the foregoing. There are no lawsuits, governmental proceedings,
arbitration proceedings or written claims pending or, to PAS' knowledge,
threatened between PAS or any of its Subsidiaries and any of their employees, or
any labor union or labor organization representing or purporting to represent
any of their employees. To PAS' knowledge, there are no union organizing or
election activities involving any non-union employees of PAS or any of its
Subsidiaries which have occurred since December 31, 1993 or threatened as of the
date hereof.

                         (c) Schedule 5.9(c) sets forth a true and complete list
of all of the following, true, correct and complete copies of which have been
delivered to or made available to HCI:

                              (i) each "employee benefit plan," as defined in
         Section 3(3) of the Employee Retirement Income Security Act of 1974, as
         amended ("ERISA"), (the "PAS ERISA Plans") maintained, contributed to
         or required to be contributed to by PAS or any of its Subsidiaries, or
         under which PAS or any of its Subsidiaries could incur any liability,
         for the benefit of current, former and retired employees of PAS or any
         of its Subsidiaries ("PAS Employees") or any beneficiaries or
         dependents of any PAS Employees, except for foreign plans to which PAS
         is required to contribute pursuant to the law(s) of any foreign
         country;

                              (ii) each other plan, program, policy, contract,
         agreement or arrangement providing for bonuses, pensions, deferred
         compensation, stock or stock related awards, severance pay, salary
         continuation or similar benefits, hospitalization, medical, dental or
         disability benefits, life insurance or other employee benefits, or
         compensation to or for any PAS Employee or members of any PAS
         Employee's families (other than directors and officers' liability
         policies), whether or not insured or funded (a "PAS Benefit
         Arrangement").

                         (d) Except as set forth on Schedule 5.9(d), and except
where such failure is not likely to have a material adverse effect on PAS and
its Subsidiaries, taken as a whole, each PAS ERISA Plan and PAS Benefit
Arrangement has been established and maintained in all material respects in
accordance with its terms and in material compliance with all Laws. PAS has
listed on Schedule 5.9(d) all exceptions, without regard to whether such
<PAGE>
exceptions are likely to have a material adverse effect on PAS and its
Subsidiaries, taken as a whole, to this Section 5.9(d), of which PAS has actual
knowledge.

                         (e) Except as set forth on Schedule 5.9(e), neither PAS
nor any of its Subsidiaries have represented, promised or contracted (whether in
oral or written form) to any current or former PAS Employee (either individually
or to PAS Employees as a group) that such current or former PAS Employee(s)
would be provided with life insurance or employee health or welfare plan
benefits upon their retirement or termination of employment (except as may be
required by statute), except where such representation, promise or contract is
not likely to have a material adverse effect on PAS and its Subsidiaries, taken
as a whole. PAS has listed on Schedule 5.9(e) all exceptions, without regard to
whether such exceptions are likely to have a material adverse effect on PAS and
its Subsidiaries, taken as a whole, to this Section 5.9(e) of which PAS has
actual knowledge.

                         (f) Except as set forth on Schedule 5.9(f), PAS has
delivered or made available to HCI true and complete copies of all PAS ERISA
Plans, all related trust agreements, the latest summary plan descriptions, the
latest Internal Revenue Service determination letter and application therefor
for each plan which is intended to be qualified under Section 401(a) of the
Code, and all PAS Benefit Arrangements and employment severance agreements
pursuant to plans which PAS or any of its Subsidiaries has or may have any
liability. Any document listed on Schedule 5.9(f) shall be delivered by PAS to
HE within 30 days after execution of this Agreement.

                         (g) Except as set forth on Schedule 5.9(g), neither the
execution or delivery of this Agreement or the Related Agreements nor the
consummation of the transactions contemplated hereby or thereby (either alone or
together with any additional or subsequent events), shall constitute an event
under any PAS ERISA Plan, PAS Benefit Arrangement, loan or individual agreement
or contract that may result in any payment (whether of severance pay or
otherwise), restriction, or limitation upon the assets of any PAS ERISA Plan or
PAS Benefit Arrangement, acceleration of payment or vesting, increase in
benefits or compensation, or required funding with respect to any PAS Employee
or any of its subsidiaries or the forgiveness of any loan or other commitment of
any PAS Employee.

                         (h) Except as set forth on Schedule 5.9(h), there are
no pending, or, to PAS' knowledge, threatened actions or suits by or on behalf
of any PAS ERISA Plans or PAS Benefit Arrangements, by any PAS Employee or
beneficiary covered under any such PAS ERISA Plan or PAS Benefit Arrangement, or
otherwise involving any such plan or arrangement (other than routine claims for
benefits), except to the extent that such pending or threatened actions or suits
are not likely to have a material adverse effect on PAS and its Subsidiaries,
taken as a whole.

                         (i) Except as set forth on Schedule 5.9(i), with
respect to each PAS ERISA Plan that is funded wholly or partially through an
insurance policy, there is no liability of PAS or any of its Subsidiaries under
any such insurance policy or ancillary agreement with respect to such insurance
policy in the nature of a retroactive rate adjustment, loss sharing arrangement
or other actual or contingent liability arising wholly or partially out of
<PAGE>
events occurring prior to the Effective Time which is likely to have a material
adverse effect on PAS and its Subsidiaries, taken as a whole.

                         (j) Except as set forth on Schedule 5.9(j), all
employee contributions to PAS ERISA Plans to the date hereof have been properly
withheld by PAS and each of its Subsidiaries, all contributions required to be
made to each such plan by PAS and each of its Subsidiaries (including employee
contributions and compensation deferrals and employer matching or other
contributions) have been made on a timely basis or will be made on a timely
basis and all of such contributions have been or will be fully paid into the
funding arrangements for the respective PAS ERISA Plan, except where such
failure is not likely to have a material adverse effect on PAS and its
Subsidiaries, taken as a whole.

                         (k) Except as set forth on Schedule 5.9(k), to PAS'
knowledge, there are no pending lawsuits, governmental proceedings, arbitration
proceedings or written claims by PAS Employees against PAS or any of its
Subsidiaries or any of its PAS Employees, nor is PAS aware of any such pending
lawsuits, governmental proceedings, arbitration proceedings or written claims of
any PAS Employee pursuant to any applicable Law relating to employees, including
human rights legislation, labor standards legislation, occupational health and
safety legislation, worker's compensation legislation or any other
employment-related legislation.

                         (l) Schedule 5.9(l) sets forth a complete and accurate
list of any and all loans of any nature whatsoever (other than routine travel
advances) made by PAS or any of its Subsidiaries to any current or former PAS
Employee or any affiliate of any such current or former employee.

                         (m) PAS and each of its Subsidiaries is and has been,
and PAS' business is and has been, in compliance with all occupational health
and safety rules and regulations of applicable Law, except for noncompliance
that is not likely to have a material adverse effect on PAS and its
Subsidiaries, taken as a whole. PAS has listed on Schedule 5.9(m) all
exceptions, without regard to whether such exceptions would have a material
adverse effect on PAS and its Subsidiaries, taken as a whole, to this Section
5.9(m) of which PAS has actual knowledge.

                         (n) Except as set forth on Schedule 5.9(n), there are
no currently pending notices of assessment, or any other communications related
thereto which PAS or any of its Subsidiaries have received from any workers'
compensation board or similar authorities in any jurisdictions where PAS'
business is carried on and there are no assessments which are unpaid, except for
assessments and other communications that are not likely to have a material
adverse effect on PAS and its Subsidiaries, taken as a whole. PAS has listed on
Schedule 5.9(n) all exceptions, without regard to whether such exceptions are
likely to have a material adverse effect on PAS and its Subsidiaries, taken as a
whole, to this Section 5.9(n) of which PAS has actual knowledge.

                         (o) Except as set forth on Schedule 5.9(o), the
deductibility of any amount paid or payable to any PAS Employee will not be
disallowed by the application of Section 162(m) of the Code.
<PAGE>
                         (p) Except as set forth on Schedule 5.9(p), there are
no employment, severance or termination agreements, other compensation
arrangements, agreements or plans currently in effect which provide for the
payment of any amount (whether in cash, property, the vesting of property or
other benefit, right or enhancement) in connection with any of the transactions
contemplated by this Agreement or the Related Agreements to any employee,
officer, shareholder or director of PAS or any of its Subsidiaries who is a
"disqualified individual" (as such term is defined in Section 280G(c) of the
Code) that would be characterized as an "excess parachute payment" (as such term
is defined in Section 280G(b) of the Code).

                         (q) It is the position of PAS that Section C of each
Agreement listed in number 12 of Schedule 5.9(c) means that, if a material
change (as defined in such agreement) should occur, the executive covered by
such agreement shall be entitled to no less than the aggregate employee welfare
benefits that such executive and such executive's dependents would have received
under the provisions of the benefit arrangements, policies or practices of PAS
in effect immediately prior to a material change, at no increased cost or
expense to the executive and such executive's dependents, in the aggregate.

                  5.10 Absence of Certain Changes or Events. Since June 30, 1996
to the date hereof and except as otherwise disclosed on Schedule 5.10 or as
contemplated by this Agreement:

                         (a) each of PAS and its Subsidiaries has (i) conducted
its business only in the usual and ordinary course, (ii) operated its business
substantially in accordance with past practices, (iii) attempted to preserve its
business and assets intact and (iv) attempted to preserve the goodwill of its
business' suppliers, customers, distributors and others having business with it;

                         (b) there has not been any material adverse change in
the condition (physical, financial or otherwise) of the assets and liabilities
of PAS and its Subsidiaries, taken as a whole, other than usual and ordinary
change which occurs in the normal course of usage;

                         (c) there has not been any damage, destruction, loss or
claim (whether or not covered by insurance) that has had a material adverse
effect on PAS and its Subsidiaries, taken as a whole;

                         (d) neither PAS nor any of its Subsidiaries has,
directly or indirectly, declared, ordered, paid, made or set apart or resolved
to pay (i) any sum or property as a dividend or other distribution on account of
any capital thereof or (ii) any redemption, retirement, purchase or acquisition,
direct or indirect, of any capital or securities thereof;

                         (e) there has not been any change in any method of
accounting or accounting practice or procedure by PAS or any of its Subsidiaries
except for any such change after the date hereof required by GAAP or the SEC;
<PAGE>
                         (f) neither PAS nor any of its Subsidiaries has
mortgaged, pledged or subjected to any material Lien (other than Permitted Liens
(as defined in Section 5.17)) any of its material properties or assets, tangible
or intangible;

                         (g) neither PAS nor any of its Subsidiaries has
acquired or disposed of any material assets or properties in any transaction
with any of their Affiliates or any of their Affiliate's officers, directors,
shareholders or monthly salaried employees on terms that are more favorable than
arms' length or, except in the ordinary course of business, acquired or disposed
of any assets or properties of material value in any transaction with any other
person or entity;

                         (h) there has not been any material transaction or
commitment made, or any contract or other agreement entered into, by PAS or any
of its Subsidiaries relating to its assets or business (including the
acquisition or disposition of any assets) or any relinquishment by PAS or any of
its Subsidiaries of any material contract, property or other right, other than
transactions and commitments in the ordinary course of business and those
contemplated by this Agreement and the Related Agreements;

                         (i) neither PAS nor any of its Subsidiaries has
forgiven or cancelled any material debts or claims, or waived in any material
respect any rights without having received fair consideration therefor;

                         (j) there has not been any amendment of any term of any
outstanding indebtedness in excess of $50,000,000 in the aggregate or security
of PAS or any of its Subsidiaries;

                         (k) there has not been any loan, advance or capital
contribution to or investment (other than cash balances of PAS or any of its
Subsidiaries in money market or other short term investment accounts) to any
person or entity in excess of $5,000,000 in the aggregate, other than loans,
advances or capital contributions or investments made in the ordinary course of
business;

                         (l) neither PAS nor any of its Subsidiaries has
incurred any other material liabilities or obligations or given any guarantee
(whether absolute, accrued, contingent or otherwise), other than liabilities
incurred or guarantees given in the ordinary course of business; and

                         (m) neither PAS nor any of its Subsidiaries has
adversely modified, terminated, waived, transferred, permitted to lapse, or
failed to preserve any PAS Permit issued by the FCC, any PAS Permit relating to
the construction, launch or operation of the PAS Satellites or PAS Ground
Stations, or any PAS Permit authorizing the provision of broadcasting or
communications services in such a manner as is likely to have a material adverse
effect on the assets or business of PAS and its Subsidiaries, taken as a whole.

                  5.11 Opinion of Financial Advisors. Morgan Stanley & Co.
Incorporated has delivered to the Board of Directors of PAS its opinion that, as
of the date hereof, the consideration payable in connection with the Univisa
Contribution and the Merger to be received by the holders of shares of common
<PAGE>
stock of PAS is fair, from a financial point of view, to such holders. Salomon
Brothers Inc has delivered to the Board of Directors of PAS its opinion that the
consideration to be paid for the DTH Option represents fair value from a
financial point of view.

                  5.12 Insurance. Each of PAS and its Subsidiaries maintains
reasonably adequate insurance with respect to its properties and business
against loss or damage of the kinds customarily insured against by corporations
of established reputation engaged in the same or similar businesses and
similarly situated, of such types and in such amounts as are customarily carried
under similar circumstances by such other corporations, and, except as set forth
on Schedule 5.12, in the case of any PAS Satellite (as defined in Section
5.19(b)) which is currently in orbit, PAS carries in-orbit insurance in an
amount required by the indentures to which it is a party. A description of all
launch and in-orbit satellite insurance policies is set forth on Schedule 5.12.

                  5.13 Intellectual Property. Schedule 5.13 sets forth a listing
and description of all material domestic, foreign, common law, registered and
pending applications for patents, trademarks, service marks, logos, slogans,
designs, copyrights, trade names, and all material licenses running to or from
PAS or any of its Subsidiaries relating to PAS' or any of its Subsidiaries'
businesses or owned by PAS or any of its Subsidiaries. Unless expressly set
forth otherwise on Schedule 5.13, PAS and its Subsidiaries own (or where
indicated on Schedule 5.13, have a right to use), free and clear of any liens,
security interests, encumbrances or claims of others, all patents, trademarks,
service marks, logos, slogans, designs, copyrights, trade names, design
registrations, and other intellectual property listed on Schedule 5.13 and any
trade secrets, know-how, confidential information, material computer programs
(including any source code), documentation, engineering and technical drawings,
processes, methodologies, trade dress, and technology utilized in or incidental
to the businesses of PAS and its Subsidiaries (all of the foregoing items
collectively referred to as the "PAS Intellectual Property"). Except as set
forth on Schedule 5.13, (a) no proceedings are pending or, to PAS' knowledge,
threatened in writing, which challenge the validity of the ownership by PAS
and/or its Subsidiaries of the PAS Intellectual Property; (b) PAS has no
knowledge of any infringement or infringing use of any of the PAS Intellectual
Property or licenses by any person or entity, and PAS and its Subsidiaries have,
and as of the Closing Date will have, good and valid title to all of the PAS
Intellectual Property that is owned by PAS or any of its Subsidiaries and their
licenses and other rights to use will be adequate for conducting the businesses
of PAS and its Subsidiaries and enforceable in accordance with their terms; (c)
to PAS' knowledge, no infringement of any material intellectual property right
or other proprietary right of any third party has occurred or will result in any
way from the conduct of the business of PAS and its Subsidiaries by PAS or any
of its Subsidiaries or from the signing and execution of this Agreement or the
Related Agreements or the consummation of any or all of the transactions
contemplated hereby or thereby, and no written claim has been made by any third
party based upon an allegation of any such infringement; (d) the PAS
Intellectual Property is valid and in full force and effect and no aspect
thereof is subject to any outstanding order, ruling, decree, judgment or
stipulation by or with any court, arbitrator or administrative agency; and (e)
there are no restrictions on the direct or indirect transfer of any license, or
any interest therein, held by PAS or any if its Subsidiaries in respect of the
PAS Intellectual Property.
<PAGE>
                  5.14 Environmental Matters.

                         (a) For purposes of this Agreement:

                              (i) "Environmental Law" means all applicable
         foreign, domestic, federal, state or local laws, statutes, regulations,
         rules, codes, ordinances, or common law enacted, adopted, issued or
         promulgated by any Government Entity, orders and permits which relate
         to the protection of human health or the environment, including,
         without limitation all such Environmental Laws regulating Releases or
         threatened Releases of any Hazardous Materials, the Comprehensive
         Environmental Response, Compensation, and Liability Act ("CERCLA") (42
         U.S.C. ss.ss. 9601, et seq.), the Hazardous Materials Transportation
         Act (49 U.S.C. ss.ss. 1801, et seq.), the Resource Conservation and
         Recovery Act (42 U.S.C. ss.ss. 6901, et seq.), the Clean Water Act (33
         U.S.C. ss.ss. 1251, et seq.), the Clean Air Act (33 U.S.C. ss.ss. 7401,
         et seq.), the Toxic Substances Control Act (15 U.S.C. ss.ss.7401, et
         seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7
         U.S.C. ss.ss. 136, et seq.), and the Occupational Safety and Health Act
         (29 U.S.C. ss. 651, et seq.), each as amended, and the regulations
         promulgated pursuant thereto, and any common law and any such
         applicable state or local statutes, and the regulations promulgated
         pursuant thereto, as such laws are in effect on the date hereof;

                              (ii) "Hazardous Materials" means (i) any
         substance, material or waste which is regulated under applicable
         Environmental Laws, including, without limitation, any material or
         substance which is defined as a "hazardous waste," "hazardous
         material," "hazardous substance," "extremely hazardous waste" or
         "restricted hazardous waste," "contaminant," "toxic waste" or "toxic
         substance" under any provision of Environmental Law; (ii) any oil,
         petroleum, petroleum fraction or petroleum derived substance; (iii) any
         radioactive materials; (iv) asbestos in any form; (v) urea
         formaldehyde; (vi) polychlorinated biphenyls; (vii) pesticides; or
         (viii) radon.

                              (iii) "Release" means any release, spill,
         effluent, emission, leaking, pumping, injection, deposit, disposal,
         discharge, dispersal, leaching or migration into the environment,
         including, without limitation, the movement of Hazardous Materials
         through or in the air, soil, surface water, or groundwater; and

                              (iv) "Remedial Action" means all actions,
         including, without limitation, any capital expenditures, required by a
         Government Entity or required under any Environmental Law, to (i) clean
         up, remove or treat any Hazardous Materials or other substance in the
         indoor or outdoor environment; (ii) prevent the Release or threat of
         Release, or minimize the further Release of any Hazardous Material so
         it does not endanger or threaten to endanger the public health or
         welfare of the environment; or (iii) perform pre-remedial studies and
         investigations or post-remedial monitoring and care pertaining or
         relating to a Release.

                         (b) The operations of PAS and its Subsidiaries are in
substantial compliance with all Environmental Laws. Except as set forth on
Schedule 5.14(b), neither PAS nor any of its Subsidiaries has received any
<PAGE>
written notice with respect to any of its assets of any material violation of
any Environmental Law.

                         (c) Except as set forth on Schedule 5.14(c), there are
no conditions associated with PAS' assets, the operation of its business or PAS'
owned or, to PAS' knowledge, leased real property as currently operated that
would under applicable Environmental Law require or could reasonably be expected
to require PAS or any of its Subsidiaries to (i) undertake any action that would
materially impair the ability of PAS' business to use PAS' material owned and
leased real property as currently operated or PAS' material assets as currently
used, (ii) incur material expenditures or (iii) undertake remedial obligations
at any real property that is owned, operated or leased by PAS or that is
adjacent to real property owned, operated or leased by PAS, in each case which
would cost individually in excess of $1.0 million.

                         (d) Except as set forth on Schedule 5.14(d), as of the
date hereof, PAS and its Subsidiaries are not subject to any outstanding orders,
agreements or contracts with any Government Entity or other person respecting
(i) violations of Environmental Laws, (ii) Remedial Action or (iii) any Release
or threatened Release of a Hazardous Material, in either case which could be
expected to have a material adverse effect on PAS and its Subsidiaries, taken as
a whole.

                  5.15 Investment Banking Fees and Commissions. Except for
Morgan Stanley & Co. Incorporated and Salomon Brothers Inc (copies of whose
engagement letters with PAS have been furnished to HCI), no person or entity is
entitled to receive from PAS or any of its Subsidiaries or any of their
directors, officers or employees any investment banking, brokerage or finder's
fee or fees for financial consulting or other advisory services in connection
with this Agreement or the transactions contemplated hereby based upon
arrangements made by or on behalf of PAS, nor is any person or entity (including
stockholders of PAS) entitled to receive reimbursement from PAS or any of its
Subsidiaries for any such services or any legal fees and expenses.

                  5.16 Material Contracts.

                         (a) PAS has provided or made available to HCI or its
independent auditors and/or legal counsel (i) true and complete copies of all
written Material Contracts, or (ii) with respect to such Material Contracts that
have not been reduced to writing, a written description thereof, each of which
is listed on Schedule 5.16(a). Except as set forth on Schedule 5.16(a), neither
PAS nor any of its Subsidiaries has received any notice or has any knowledge
that any other party is, in default in any respect under any such Material
Contract, other than payment defaults under transponder lease agreements which
are not more than 90 days past due. Except as set forth on Schedule 5.16(a),
each of the Material Contracts of PAS and its Subsidiaries is in full force and
effect and constitutes a valid, legal and binding agreement of the parties
thereto, enforceable in accordance with its terms except for the Bankruptcy
Exception. As used in this Agreement, the term "Material Contract" means, as to
any person or entity, all written contracts, agreements, commitments,
arrangements, leases (including with respect to personal property), policies and
other instruments to which it or any of its Subsidiaries is a party or by which
it or any such Subsidiary is bound which, when assuming that all options to
<PAGE>
renew or extend are exercised, (x) require payments to be made in excess of
$1,000,000 per year for goods and/or services, or (y) do not by their terms
expire and are not subject to termination within six months from the date of the
execution and delivery thereof and require payments to be made in excess of
$5,000,000 individually.

                         (b) Except as set forth on Schedule 5.16(b), neither
PAS nor its Subsidiaries is a party, as of the date hereof, to any contract,
agreement, commitment, arrangement, lease (including with respect to personal
property), policy or other instrument that is not subject to termination by PAS
upon less than six months written notice to the other party thereto which
materially restricts or limits the right of PAS or any of its Subsidiaries or
which would, on or after the Closing Date, materially restrict or limit Newco's
or any of its Affiliates' right to conduct its business or compete, including
without limitation, any restriction on its ability to sell, lease or otherwise
provide services from available transponder capacity to any person or entity for
any purpose at any orbital location and in any frequency band, any geographical,
market segment, product line or other industry limitation, or any exclusive or
sole supply or vendor arrangement or agreement. Nothing in this Section 5.16(b)
shall preclude or require disclosure on Schedule 5.16(b) of most favored nations
provisions, options for additional services or capacity, rights of negotiation,
or similar provisions agreed to in the ordinary course of business (including,
without limitation, of the kind set forth in the agreements referenced on
Schedule 5.16(a)).

                         (c) As of June 30, 1996, the contracts, agreements,
commitments, arrangements, leases (including with respect to personal property)
that represent obligations of third parties to make payments to PAS in exchange
for the sale or lease of transponder capacity, have an aggregate stated amount
of unpaid payments owing to PAS of $3,026,000,000 over the remaining stated term
of such contracts, after allowance for doubtful accounts or other allowances or
deductions known as of such date which are ordinary and customary in the conduct
of PAS' business (the "PAS Backlog"). The PAS Backlog represents amounts that,
assuming the due performance by each party of its obligations under each
contract and the occurrence of no event that would permit termination of a
contract without liability to the terminating party, will be due for, and will
arise out of, bona fide sales and delivery of goods, performance of services and
other business transactions, unless the underlying contract thereto is properly
terminated in accordance with the terms thereof. Except as set forth on Schedule
5.16(c), there are no refunds, discounts or other adjustments payable by PAS
with respect to any portion of the PAS Backlog, and to the knowledge of PAS,
there are no defenses, rights of setoff, counterclaims, assignments,
restrictions, encumbrances, or conditions enforceable by any third parties on or
affecting any portion of the PAS Backlog. Except as set forth on Schedule
5.16(c), neither PAS nor any of its Subsidiaries is, or has received any notice
or has any knowledge that any other party is, in default in any material respect
under any contract representing any portion of the PAS Backlog, other than (i)
payment defaults under transponder lease agreements which are not more than 90
days past due and (ii) defaults or terminations under transponder lease
agreements that are promptly replaced by contracts providing for reasonably
equivalent or superior backlog payments.
<PAGE>
                  5.17 Personal Property. PAS and/or its Subsidiaries have good
and valid title to all personal property and assets (whether tangible or
intangible) reflected on the consolidated balance sheet of PAS and its
Subsidiaries as of December 31, 1995 (the "PAS Balance Sheet") or acquired after
December 31, 1995, except for property and assets sold since December 31, 1995
in the ordinary course of business and except for satellite systems under
development, with respect to which title will not be taken, other than as
provided in the applicable contract therefor; provided, that except as disclosed
on Schedule 5.17, there are no Liens with respect to any satellites under
development. Except as set forth on Schedule 5.17, none of such properties or
assets (whether real or personal) is subject to any mortgage, life interest,
lien, pledge, charge, security interest, fiduciary assignment, hypothecation or
title retention agreement relating to such properties or assets (collectively,
"Liens"), except:

                              (i) Liens disclosed on the PAS Balance Sheet; or

                              (ii) (a) Liens for taxes and other governmental
         charges and assessments arising in the ordinary course of business and
         in amounts comparable to the amounts of such Liens in prior years,
         which are not yet due and payable or, provided that an appropriate
         reserve has been established by the related person or entity, a Lien
         the amount or validity of which is being contested in good faith by
         appropriate proceedings, (b) Liens of landlords and Liens of carriers,
         warehousemen, mechanics and materialmen and other like Liens arising in
         the ordinary course of business for sums not yet due and payable and in
         amounts comparable to the amounts of such Liens in past years, and (c)
         Liens or imperfections on property which, individually or collectively,
         as to a party or any of its Subsidiaries, are not material in amount or
         do not materially detract from the value of or materially impair the
         existing use of the property affected by such Lien or imperfection
         (each, a "Permitted Lien").

                  5.18 Real Property.

                         (a) Schedule 5.18(a) sets forth a complete description
of all real property owned by PAS or any of its Subsidiaries (the "PAS Owned
Real Property"), together with a description of such ownership and the identity
of the entity that owns such property. PAS has good and valid title to the PAS
Owned Real Property and otherwise owns the PAS Owned Real Property free and
clear of all liens, security interests, claims and other charges and
encumbrances, except for (i) Permitted Liens and (ii) encumbrances, if any,
which do not materially impair the existing use of the property.

                         (b) Schedule 5.18(b) sets forth a list of all of the
land, buildings and other real property leased or sub-leased by PAS or any of
its Subsidiaries (the "PAS Leased Real Property"). PAS or one its Subsidiaries
has a good and valid leasehold interest in and right to peaceful quiet
possession as against each landlord with respect to each PAS Leased Real
Property. True and complete copies of all leases of the PAS Leased Real Property
have been made available for review to HCI. Such leases are in full force and
effect according to their terms, constitute the legal, valid and binding
obligations of PAS and/or its Subsidiaries party thereto and, to PAS' knowledge,
such leases have not been amended or modified except as disclosed in writing to
HCI. Neither PAS nor any of its Subsidiaries is in material default with respect
<PAGE>
to any of the leases of the PAS Leased Real Property, nor has any event occurred
which with the passage of time, the giving of notice, or both, would constitute
an event of default or otherwise would place PAS or any of its Subsidiaries in
material default under any of such leases; neither PAS nor any of its
Subsidiaries has received any notice of any such default or event; and, to PAS'
knowledge, no landlord is in default under any of such leases, and no event has
occurred which with the passage of time, the giving of notice, or both, would
constitute an event of default or otherwise place any landlord in default
thereunder.

                         (c) The PAS Owned Real Property and the PAS Leased Real
Property, together with facilities furnished under contract with others,
comprise substantially all of the real estate used in, or necessary to conduct,
PAS' business, and such use and occupancy is in conformance in all material
respects with all applicable laws, rules and regulations, including but not
limited to, applicable zoning, subdivision and other land use rules and
regulations, the violation of which is likely to have a material adverse effect
on PAS and its Subsidiaries, taken as a whole.

                         (d) To PAS' knowledge, other than PAS or any of its
Subsidiaries, there are no parties in possession of any portion of the PAS
Leased Real Property or the PAS Owned Real Property, whether as lessees or
sublessees thereof, or tenants at sufferance, trespassers or otherwise, except
as disclosed on Schedule 5.18(d). The location, construction, occupancy,
operation or use of the PAS Owned Real Property and, to the best knowledge of
PAS, the PAS Leased Real Property (including the buildings, improvements,
fixtures and equipment located thereon) do not contravene any laws, rules or
regulations, or any restrictive covenant or deed restriction (recorded or
otherwise), or any PAS Permit, affecting any of such property the contravention
of which is likely to have a material adverse effect on PAS and its
Subsidiaries, taken as a whole. There are no pending or, to the best knowledge
of PAS, threatened condemnation proceedings with respect to any PAS Leased Real
Property, lease, or the PAS Owned Real Property, or litigation or administrative
actions relating thereto. All buildings, improvements, fixtures and equipment
used in connection with PAS' business are located on the PAS Owned Real Property
and the PAS Leased Real Property and do not encroach on any adjoining property,
and, to the best knowledge of PAS, no buildings or improvements encroach upon
the PAS Owned Real Property or the PAS Leased Real Property which is likely to
have a material adverse effect on PAS and its Subsidiaries, taken as a whole.

                  5.19 Certain Assets and Agreements.

                         (a) Ground Stations. Each ground station, including,
without limitation, the related broadcasting facility assets (consisting of
land, building, fixtures, improvements and telemetry, tracking and control
equipment) that is owned or leased by PAS or any of its Subsidiaries in
connection with PAS' business is listed on Schedule 5.19(a) (the "PAS Ground
Stations"). Except as otherwise set forth on Schedule 5.19(a) with respect to
each such ground station, the improvements thereto and all components used in
connection therewith, including, without limitation, transmission/reception
systems and programming and data broadcasting systems, if any, (i) are in good
operating condition and repair and are suitable for their intended purposes and
(ii) are supported by a back-up, fuel-powered electricity generator capable of
generating power sufficient to meet the requirements of the operations conducted
at the ground station. The transmission/reception systems and programming and
data broadcasting systems at each such ground station have the redundancies that
are set forth on Schedule 5.19(a).

                         (b) Satellites and Transponders. Set forth on Schedule
5.19(b) are the following: (i) a complete and accurate list, by orbital
location, of each satellite and transponder thereon owned by PAS or any of its
Subsidiaries in connection with PAS' or any of its Subsidiaries' business (each
a "PAS Satellite"), (ii) a true and correct copy of a satellite loading chart
listing each transponder on each PAS Satellite, along with the type of
transponder (C-band, Ku-band or other) and the customer or group of related
customers that have leased or purchased capacity on such transponder and the
amount of such capacity, and (iii) the most recent "Health Status Report,"
summarizing all spacecraft related incidents and anomalies known to PAS as well
as the current status, to the best knowledge of PAS, of the subsystems on the
PAS Satellites (power, telemetry and command, reaction control, communications
and antenna). For each PAS Satellite, true, correct and complete copies of the
foregoing will be delivered or made available to HCI (all such data, records,
tapes, information, lists and reports are collectively referred to herein as the
"PAS Data") prior to the Closing Date. Such PAS Data represent, to the best
knowledge of PAS, all relevant and material information relating to the
operating condition and repair of the PAS Satellites, and the fuel life
expectancies of the PAS Satellites. The information contained in the PAS Data
is, to the best knowledge of PAS, accurate and complete records (except as to
only those informational gaps disclosed to HCI) of the subject matters covered
therein; however, PAS makes no representation or warranty as to the accuracy of
any conclusion expressed as to fuel life expectancies of the PAS Satellites.
Such PAS Satellites are to the best of PAS' knowledge, subject to the Health
Status Reports, in good condition. Except as specifically provided herein, PAS
makes no representations or warranties, express or implied, with respect to the
PAS Satellites.

                         (c) Tracking, Telemetry and Control Equipment. Except
as otherwise set forth on Schedule 5.19(c), to the best of PAS' knowledge, the
tracking, telemetry and control equipment (on the ground) used by third party
contractors to provide tracking, telemetry and control services related to each
PAS Satellite is (i) in good operating condition and repair, ordinary wear and
tear excepted, and (ii) not in need of maintenance or repairs except for
ordinary, routine maintenance and repairs.

                         (d) ITU Frequency Registration. Schedule 5.19(d)
contains a summary, by orbital location, of the status of frequency registration
at the International Telecommunications Union, of each PAS Satellite, including
the identity of the sponsoring administration and the frequency bands covered.

                         (e) Satellite Coordination. Except as set forth on
Schedule 5.19(e), to the best knowledge of PAS, no person or entity has asserted
that it has rights to operate a spacecraft in a manner that would result in
interference with respect to any PAS Satellite or any Satellite for which PAS
has applied for a Permit. Except as set forth on Schedule 5.19(e), PAS is not
aware of any asserted dispute with respect to PAS' continued ability to utilize
any PAS Satellite substantially in the manner that such PAS Satellite has been
<PAGE>
used in connection with the business of PAS and its Subsidiaries to date.
Schedule 5.19(e) also contains a list of all satellite coordination agreements
to which PAS or its Subsidiaries or Affiliates is a party, a summary of all
operational or technical limitations set forth therein, and a summary of all
coordination discussions with other persons or entities, domestic or foreign,
with regard to the PAS Satellites or any Satellite for which PAS has applied for
a Permit in which PAS or its Subsidiaries or Affiliates has been engaged in the
past three years.

                  5.20 IGO Determinations. Schedule 5.20 contains a list of all
consultations and similar arrangements that have been effectuated with INTELSAT,
EUTELSAT and other similar intergovernmental entities, including without
limitation all Article XIV(c) and XIV(d) consultations under the INTELSAT
Agreements (collectively the "IGO Determinations") with respect to the PAS
Satellites that are needed to operate the business of PAS or any of its
Subsidiaries as they are now being conducted. Except as set forth on Schedule
5.20, PAS is not aware of any difficulties in obtaining any other IGO
Determinations with respect to the PAS Satellites or any Satellite for which PAS
has applied for a Permit.


                                   ARTICLE VI
                       REPRESENTATIONS AND WARRANTIES OF
                               THE HUGHES PARTIES

                  Each Hughes Party and Newco represent and warrant to PAS as
follows:

                  6.1 Organization, Standing and Power. Each of the Hughes
Parties is a corporation duly organized, validly existing and in good standing
under the laws of its respective jurisdiction of incorporation, has all
requisite corporate power and authority necessary to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified, and in good standing to own, lease and operate its properties and to
conduct its business relating to the Galaxy Business in each jurisdiction,
domestic and foreign, in which the operation of the Galaxy Business, or the
operation, ownership or leasing of the assets necessary to operate the Galaxy
Business, makes such qualification necessary, other than in such jurisdictions
where the failure to so qualify or be in good standing is not likely to have a
material adverse effect on the Galaxy Business. Each of the Hughes Parties have
heretofore made available to PAS true, complete and correct copies of its
Certificate of Incorporation and Bylaws as currently in effect together with all
amendments thereto. No resolution has been adopted to amend any of such
Certificates of Incorporation or Bylaws except as expressly called for by this
Agreement. None of the Hughes Parties (i) has been dissolved, adopted
resolutions to dissolve or acted in any way to accomplish, request or approve
such dissolution, (ii) is a party to any merger or (iii) has been declared
bankrupt, and, to such entity's knowledge, no action or request is pending to
declare it bankrupt. The Hughes Parties have made available to PAS minute books
for each of the Hughes Parties which contain complete and accurate records in
all material respects of all meetings, or consents in lieu thereof, of the
stockholders and the Board of Directors (including committees thereof) of each
such entity since its date of formation.

                  6.2 Capital Structure. As of the date hereof, all of the
issued and outstanding shares of capital stock of the Contributed Entities and
Newco are validly issued, fully paid and nonassessable, are not subject to
<PAGE>
preemptive or other similar rights, and are owned by HCI free and clear of all
liens, charges, encumbrances, claims and options of any nature. Except as set
forth on Schedule 6.2, none of the Contributed Entities (i) beneficially owns
any capital shares or has any other record or beneficial equity or other
ownership or interest in any corporation, partnership, joint venture,
association or other entity or business enterprise or (ii) has any commitment to
contribute to the capital of, make loans to, or share the losses of any person
or entity (other than any of the Contributed Entities). Except as set forth in
this Section 6.2, there are outstanding: (i) no shares of capital stock, or
bonds, debentures, notes or other instruments or evidence of indebtedness having
the right to vote (or convertible into, or exchangeable for, securities having
the right to vote), or other voting securities of any Contributed Entity or
Newco authorized, issued or outstanding; (ii) no securities of any Contributed
Entity or Newco are convertible into, or exchangeable or exercisable for, shares
of capital stock, or other voting securities of the Contributed Entities or
Newco; and (iii) no options, warrants, calls, rights (including preemptive
rights), commitments or agreements to which any Contributed Entity or Newco is a
party or by which it is bound, in any case obligating any Contributed Entity or
Newco to issue, deliver, sell, purchase, redeem or acquire, or cause to be
issued, delivered, sold, purchased, redeemed or acquired, additional shares of
capital stock or other voting securities of any Contributed Entity or Newco, or
obligating any Contributed Entity or Newco to grant, extend or enter into any
such option, warrant, call, right, convertible security, commitment or
agreement. None of the Contributed Entities nor Newco has granted any options,
warrants or rights to purchase any capital stock of any Contributed Entity.
Except as set forth on Schedule 6.2, there are not as of the date hereof, and
there will not be at the Effective Time, any stockholder agreements, voting
trusts or other agreements or understandings to which any Contributed Entity or
Newco is a party or by which it is bound relating to the voting of any shares of
the capital stock of any Contributed Entity or Newco. There are no restrictions
on HCI to vote the stock of any of the Contributed Entities. Except as provided
for herein, no person has any rights to cause any Contributed Entity or Newco to
register with the SEC any securities of any Contributed Entity or Newco.

                  6.3 Authority; No Violations; Consents and Approvals.

                         (a) Each of the Hughes Parties has all requisite
corporate power and authority to execute and deliver this Agreement and the
Related Agreements to which it is a party and to perform its obligations
hereunder and thereunder and to effect the transactions contemplated hereby and
thereby. The execution, delivery and performance of this Agreement and the
Related Agreements to which a Hughes Party is a party and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of each such entity. Each of this
Agreement and the Related Agreements to which a Hughes Party is a party has been
duly executed and delivered by such Hughes Party and assuming that each of this
Agreement and the Related Agreements to which a Hughes Party is a party
constitutes the valid and binding agreement of the other parties thereto, and
subject to obtaining all necessary approvals by Government Entities, constitutes
a valid and binding obligation of such Hughes Party enforceable in accordance
with its terms except that the enforcement hereby may be limited by the
Bankruptcy Exception.
<PAGE>
                         (b) The execution, delivery and performance by the
Hughes Parties of each of this Agreement and the Related Agreements to which a
Hughes Party is a party does not, and the consummation by the Hughes Parties of
the transactions contemplated hereby and thereby will not, (x) conflict with or
result in any violation of, or default (with or without notice or lapse of time,
or both) which is likely to have a material adverse effect on the Galaxy
Business, or give rise to a right of termination, cancellation or acceleration
of any obligation or the loss of a material benefit, or the creation of a
material lien, pledge, security interest or other encumbrance on assets or
property, or right of first refusal with respect to any material asset or
property (any such conflict, violation, default, right of termination,
cancellation or acceleration, loss, creation or right of first refusal, a
"Galaxy Violation"), under or pursuant to any provision of the respective
Certificate of Incorporation or Bylaws of such entity or equivalent constituent
document of any of its Subsidiaries or, (y) except as to which requisite waivers
or consents have been obtained and, except as set forth on Schedule 6.3(b)
hereto and assuming the consents, approvals, authorizations or permits and
filings or notifications referred to in paragraph (c) of this Section 6.3 are
duly and timely obtained or made, result in any Galaxy Violation of any Material
Contract, Galaxy ERISA Plan (as defined in Section 6.9(c)(i)), Galaxy Benefit
Arrangement (as defined in Section 6.9(c)(ii)), Galaxy Permit (as defined in
Section 6.6(b)), or Law applicable to such entity or the Galaxy Business;
provided, however, that nothing in this Section 6.3 will be deemed to constitute
a representation or warranty by any Hughes Party as to any antitrust law or
requirement.

                         (c) No consent, approval, order or authorization of, or
registration, declaration or filing with, notice to, or permit from any
Government Entity is required by or with respect to any Hughes Party in
connection with the execution and delivery by a Hughes Party of any of this
Agreement or the Related Agreements to which such Hughes Party is a party or the
consummation by any Hughes Party of the transactions contemplated hereby and
thereby, which if not obtained or made is likely to have a material adverse
effect on such Hughes Party's ability to consummate the transactions
contemplated hereby and thereby, except for: (A) the filing of a premerger
notification and report form by the applicable Hughes Party under the HSR Act
and the expiration or termination of the applicable waiting period thereunder;
(B) the filing with the SEC of (x) the Registration Statement (as defined in
Section 7.5), and (y) such reports under and such other compliance with the
Exchange Act and the rules and regulations thereunder, as may be required in
connection with this Agreement and the Related Agreements to which a Hughes
Party is a party and the transactions contemplated hereby and thereby; (C) such
filings and approvals as may be required by any applicable state securities,
"blue sky" or takeover laws; (D) such filings and approvals as may be required
by any foreign pre-merger notification Laws; (E) such consents, approvals,
orders, authorizations and filings required under any environmental, health or
safety law; (F) the filing with the FCC of (x) the applications and waiver
requests described in Section 7.9(c), (y) any requisite post Closing amendments
to pending FCC applications filed by the Hughes Parties, reflecting (subject to
FCC consent and consummation) the Asset Contribution, the Univisa Contribution
and the Merger, and (z) associated filings with the FCC that do not require the
FCC's consent or approval; and (G) such other consents, approvals, orders,
authorizations, registrations, declarations, filings, notices and Permits set
forth on Schedule 6.3(c).
<PAGE>
                  6.4 Galaxy Financial Statements. Attached as Schedule 6.4 are
audited consolidated balance sheets relating to the Galaxy Business as of
December 31, 1994 and December 31, 1995 and an unaudited consolidated balance
sheet as of June 30, 1996 (the "Galaxy Balance Sheet") and the related audited
consolidated statements of operations for the two fiscal years ended December
31, 1995 and the unaudited consolidated statements of operations for the six
month period ended June 30, 1996 (such financial statements being hereinafter
referred to collectively as the "Galaxy Financial Statements"). The Galaxy
Financial Statements have been prepared from, and are in accordance with, the
books and records of the Galaxy Business, were prepared in accordance with GAAP
applied on a consistent basis during the periods involved (except as may be
indicated therein and, with respect to the unaudited financial statements,
subject to normal year end adjustments which Galaxy's management believes would
not be material in amount or effect) and present fairly, in all material
respects, in accordance with applicable requirements of GAAP, the consolidated
financial position of the Galaxy Business as of their respective dates and the
consolidated results of operations of the Galaxy Business for the periods
presented therein. The books and all other financial records of the Galaxy
Business are complete and correct in all material respects. As of June 30, 1996,
the Contributed Entities have made capital expenditures for "satellites under
construction" of at least $175 million, all of which represents capital
expenditures incurred in the ordinary course of business and consistent with
prudent business practices and all rights to which are being transferred to
Newco hereby.

                  6.5 Information Supplied. The Registration Statement (as
defined in Section 7.5), or any amendment thereof or supplement thereto, will
not, on the date it is first filed with the SEC and on the date it becomes
effective contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading; provided, however, that no representation is made by any of the
Hughes Parties with respect to statements made therein based on information
supplied by PAS for inclusion in each Registration Statement. The information
supplied by any of the Hughes Parties for inclusion in the Proxy
Statement/Prospectus will not, on the date it is first mailed to the holders of
the shares of common stock of PAS or at the time of PAS' stockholder's meeting
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. Subject to the proviso set forth in the second preceding sentence,
the Proxy Statement/Prospectus, will comply as to form, in all material
respects, with the provisions of the Exchange Act and the rules and regulations
thereunder.

                  6.6 Compliance with Laws.

                         (a) Except as set forth on Schedule 6.6(a), the Galaxy
Business is not being conducted in violation of any Law the violation of which
is likely to have a material adverse effect on the Galaxy Business. Except as
disclosed on Schedule 6.6(a), no material investigation or review by any
Government Entity with respect to any of the Contributed Entities or the Galaxy
Business is pending or, to the best knowledge of any of the Hughes Parties,
threatened and none of the Hughes Parties has received any written citation or
<PAGE>
notification alleging any violation of any Law or Permit the continuing
violation of which is likely to have a material adverse effect on the Galaxy
Business.

                         (b) Set forth on Schedule 6.6(b) is a true and complete
list of all Permits issued to or held by any of the Hughes Parties with respect
to the Galaxy Business (as amended or modified), except for Permits which are
immaterial to the Galaxy Business (collectively, the "Galaxy Permits");
provided, however, that notwithstanding the foregoing materiality threshold,
Schedule 6.6(b) lists (i) all Permits issued by the FCC to any of the Hughes
Parties relating to the Galaxy Business, (ii) all Permits, whether or not issued
by the FCC, authorizing the construction, launch or operation of the Galaxy
Satellites or the Galaxy Ground Stations (other than Permits granted or issued
by local or municipal Government Entities, such as building permits, local
occupancy permits or zoning regulations, which are not material to the Galaxy
Business), and (iii) all Permits issued to the Hughes Parties (relating to the
Galaxy Business) by Government Entities that regulate broadcasting or
communications, authorizing any of the Contributed Entities to provide
broadcasting or communications services relating to the Galaxy Business.
Schedule 6.6(b) also sets forth a true and complete list of all pending
applications for Permits that would be Galaxy Permits if issued or granted and
all pending applications by any of the Hughes Parties for modification,
extension or renewal of Galaxy Permits. The Galaxy Permits are all of the
Permits required to be issued to or held by any of the Contributing Entities in
order to allow the Contributed Entities to own or lease their respective assets
relating to the Galaxy Business and to lawfully conduct the Galaxy Business,
including, without limitation, the construction, launch and operation of, and
transmitting to and from, each of the Galaxy Satellites and the Galaxy Ground
Stations (as such terms are defined in Section 6.18(a)), and the provision of
broadcasting or communications services, except where the failure to possess any
such Permit is not likely to have a material adverse effect on the Galaxy
Business. Notwithstanding the generality of the preceding paragraph, except as
set forth on Schedule 6.6(b), each of the Hughes Parties has fulfilled and
complied in all material respects with its obligations under each of the Galaxy
Permits owned, held or possessed by it, and no event has occurred or condition
or state of facts exists which constitutes or, after notice or lapse of time or
both, would constitute a breach or default under any Galaxy Permit and which
permits or, after notice or lapse of time or both, would permit revocation or
termination of any such Galaxy Permit, and no Hughes Party has received or has
knowledge of any written notice of cancellation or default or of any dispute
concerning any such Galaxy Permit, or of any such event, condition or state of
facts where the effect thereof would be material to the Galaxy Business. Each of
the Galaxy Permits is validly held by the entities listed on Schedule 6.6(b), is
in full force and effect in all material respects, is free and clear of all
Liens (other than Permitted Liens), is unimpaired by acts or omission of any
Hughes Party or their respective employees, partners or Affiliates, will expire
on the date shown on Schedule 6.6(b), is valid for the balance of its current
term, and, except as set forth on Schedule 6.6(b), is not subject to any
restriction or condition that limits in any material respect the full operation
of the Galaxy Business as now operated. Except as set forth on Schedule 6.6(b)
and for rulemaking proceedings affecting the satellite industry in general, no
complaints, proceedings or applications are pending, or to the Contributed
Entities' best knowledge, threatened, at the FCC or any other Government Entity,
that would result in the revocation, forfeiture, adverse modification,
non-renewal or suspension of any of the Galaxy Permits, the denial of any
pending application by any Hughes Party for a Permit in connection with the
<PAGE>
Galaxy Business or a modification, extension or renewal thereof, the issuance
against any Hughes Party of any cease and desist order with respect to the
Galaxy Business, or the imposition of any administrative actions by the FCC or
any other Government Entity with respect to the Galaxy Permits, or that would
adversely affect the ability of Newco after the Asset Contribution to continue
to operate the Galaxy Business as currently operated by the Contributed
Entities. Except as set forth on Schedule 6.6(b), none of the Hughes Parties has
received any complaint that any of the Galaxy Satellites or the Galaxy Ground
Stations is causing objectionable interference to the transmissions or reception
of any other radio communications facility, and to the best knowledge of such
entity, no other radio communications facility is causing objectionable
interference to the transmissions from or the receipt of signals by any Galaxy
Satellite or Galaxy Ground Station. Except as set forth on Schedule 6.6(b), none
of the Galaxy Permits that has been issued prior to the date hereof is the
subject of any pending renewal application; no renewal of any Galaxy Permit
issued by the FCC would constitute a major environmental action under the FCC
Rules excluding the impact of the FCC's new RF radiation rules adopted by the
FCC in ET Docket No. 93-62 on August 1, 1996; and none of the Hughes Parties is
aware of any reason why the Galaxy Permits will not be renewed in the ordinary
course or why any of the Galaxy Permits might be revoked. None of the Hughes
Parties knows of the existence of any fact that, under present Law, would
disqualify Galaxy from consummating the Asset Contribution within the time
contemplated herein. Except as set forth on Schedule 6.6(b), all information
contained in any pending application by a Hughes Party for a Permit in
connection with the Galaxy Business or modification, extension, or renewal of a
Galaxy Permit is true, correct and complete in all material respects. Except as
set forth on Schedule 6.6(b), each of the Hughes Parties have duly filed or
caused to be filed with the FCC all required material reports, statements,
documents, registrations, filings or submissions with respect to the operations
of the Galaxy Business, the Galaxy Permits issued by the FCC, the Hughes
Parties' ownership of their assets in connection with the Galaxy Business and
the pending applications by any of the Hughes Parties for Permits or for
modification, extension or renewal of Galaxy Permits. All such filings complied
in all material respects with Laws when made and no deficiencies have been
asserted with respect to any such filings. Except for rulemaking proceedings
affecting the satellite industry in general, no judgment, decree, order or
notice of violation has been issued by the FCC (or other Government Entity)
which permits or contemplates revocation, modification or termination of any of
the Galaxy Permits or which would result in any material impairment of any
rights thereunder.

                         (c) Except as set forth on Schedule 6.6(c), none of the
Hughes Parties, nor any of their Subsidiaries or Affiliates, nor any of their
respective employees, are officials or officers of any Government Entity or any
political party, and none of the Contributed Entities, nor any of their
Subsidiaries or Affiliates has taken, is taking or will take, or has allowed or
will allow on its behalf to be taken, any action which would have violated or
would violate the United States Foreign Corrupt Practices Act of 1977, the U.S.
Export Administration Act, as amended, or any Laws to which such party or person
is subject, relating in each case to payments for the purpose of influencing an
act or decision of a Government Entity or government official; provided,
however, that nothing in this sentence shall be deemed to subject any party or
person to any Law to which such party or person would not otherwise be subject.
<PAGE>
With respect to the Galaxy Business, each of the Hughes Parties is in material
compliance with all domestic and foreign laws restricting or regulating the
export of technology to foreign countries.

                  6.7 Litigation. Except as disclosed on Schedule 6.7, there is
no suit, action or proceeding pending or, to the knowledge of any of the Hughes
Parties, threatened against any of the Contributed Entities or affecting the
Galaxy Business, nor is there any written judgment, decree, injunction, rule or
order of any Government Entity or arbitrator outstanding against any Contributed
Entity in respect of the Galaxy Business.

                  6.8 Taxes. Each of the Contributed Entities has timely filed
or has obtained timely extensions for all tax returns required to be filed by
such party completely and accurately in all material respects and has timely
paid (or such entity's parent has paid), or has established an adequate reserve
for the payment of, all material taxes which are required to be paid in respect
of the taxable period reflected in such returns or for periods since the most
recent date on which a return was filed. All taxes shown to be due on the tax
returns that have been filed by the Contributed Entities have been timely paid.
Except as provided on Schedule 6.8, none of the Contributed Entities has waived
any statute of limitations in respect of taxes of such entity. Except as
provided on Schedule 6.8, none of the tax returns filed by the Contributed
Entities has been examined by any taxing authority, and no audit, action,
proceeding or assessment is pending or threatened by any taxing authority
against the Contributed Entities where such audit, proceeding or assessment is
likely to have a material adverse effect on the Galaxy Business. All material
taxes which any of the Contributed Entities is required by law to withhold or to
collect for payment with respect to the Galaxy Business have been duly withheld
and collected, and have been paid or accrued, reserved against and entered on
the books of such entity. There are no material liens for taxes (other than for
current taxes not yet due and payable) on the assets of any of the Contributed
Entities relating to the Galaxy Business. The Contributed Entities have
previously delivered or made available to PAS true and complete copies of their
federal income tax returns for each of the fiscal years ended December 31, 1992
through December 31, 1995. Except as set forth on Schedule 6.8 or as provided
herein, none of the Contributed Entities is a party to or bound by any agreement
providing for the allocation or sharing of taxes with any entity which is not,
either directly or indirectly, a Contributed Entity. None of the Contributed
Entities has filed or is required to file a consent pursuant to or agreed to the
application of Section 341(f) of the Code. None of the Contributed Entities is a
"United States real property holding corporation" as defined in Section
897(c)(2) of the Code during the applicable period specified in Section
897(c)(1)(A)(ii) of the Code.

                  6.9 Employees and Agents; Benefit Plans.

                         (a) Schedule 6.9(a) contains a complete and accurate
list of all employees of the Contributed Entities who work primarily in the
Galaxy Business (the "Galaxy Employees"), whether active or inactive, indicating
thereon the direct entity by whom such employee is employed and the employee's
job title. Upon the completion of the Asset Contribution, each of the Galaxy
Employees, to the extent still employed in connection with the Galaxy Business,
will become an employee of Newco or one of its wholly-owned Subsidiaries. HCI
also shall provide on Schedule 6.9(a) or on a separate schedule that HE shall
deliver to PAS within 20 days after the execution of this Agreement, a list that
<PAGE>
specifically identifies all employees that were listed on the list provided for
in the first sentence of this subsection and who shall be employed by the Newco
as of the Effective Time showing for each, the position held, the length of
service, employee loans, stock options, annual salary, incentive bonuses,
international and other allowances and the Contributed Entities' cost of dental,
health (other than retiree health), life and long-term disability insurance.
Except as set forth on Schedule 6.9(a), no Galaxy Employee is represented by any
union, or covered by any collective bargaining or similar agreement in
connection with their employment at any Contributed Entity, nor is any such
employee covered by a written agreement of employment in connection with their
employment at any Contributed Entity, or to the knowledge of the Contributed
Entities, any oral employment agreement, which cannot be terminated at will by
any of the Contributed Entities or which provides for severance pay or other
compensation, including stock option rights and deferred compensation
arrangements, upon termination of employment or upon change of control of the
Contributed Entities. Except as listed and described on Schedule 6.9(a), none of
the Contributed Entities is a party to any collective bargaining or other
similar labor agreement, including any such agreement which provides for or may
give rise to any liability or obligation for any severance or termination pay or
which will be the subject of renegotiation by virtue of the consummation of the
transactions contemplated by this Agreement, and to each Hughes Party's
knowledge, no labor organization has filed a petition to become the collective
bargaining representative with respect to any of the Contributed Entities.

                         (b) Except as set forth on Schedule 6.9(b), the
Contributed Entities have complied in all material respects with all applicable
employment and labor laws with respect to the Galaxy Employees, including but
not limited to those relating to wages, hours, collective bargaining,
discrimination, plant closing notices, and the payment of social security and
similar taxes, and are not liable for any arrears of wages or any material
penalties for failure to comply with any of the foregoing. There are no
lawsuits, governmental proceedings, arbitration proceedings or written claims
pending or, to the Contributed Entities' knowledge, threatened between the
Contributed Entities and any of the Galaxy Employees, or any labor union or
labor organization representing or purporting to represent any of the Galaxy
Employees. To the Contributed Entities' knowledge, there are no union organizing
or election activities involving any non-union Galaxy Employees which have
occurred since December 31, 1993 or threatened as of the date hereof.

                         (c) Schedule 6.9(c) sets forth a true and complete list
of all of the following, true, correct and complete copies of which have been
delivered to or made available to PAS:

                              (i) each "employee benefit plan," as defined in
         Section 3(3) of ERISA, (the "Galaxy ERISA Plans") maintained,
         contributed to or required to be contributed to by the Galaxy Business,
         or under which the Galaxy Business could incur any liability, for the
         benefit of current, former and retired employees of the Contributed
         Entities ("Galaxy Benefit Employees") or any beneficiaries or
         dependents of any Galaxy Benefit Employees, except for foreign plans to
         which the Contributed Entities are required to contribute pursuant to
         the law(s) of any foreign country;
<PAGE>
                              (ii) each other plan, program, policy, contract,
         agreement or arrangement providing for bonuses, pensions, deferred
         compensation, stock or stock related awards, severance pay, salary
         continuation or similar benefits, hospitalization, medical, dental or
         disability benefits, life insurance or other employee benefits, or
         compensation to or for any Galaxy Benefit Employee or members of any
         Galaxy Benefit Employee's families (other than directors and officers'
         liability policies), whether or not insured or funded (a "Galaxy
         Benefit Arrangement").

                         (d) Except as set forth on Schedule 6.9(d), and except
where such failure is not likely to have a material adverse effect on the Galaxy
Business, each Galaxy ERISA Plan and Galaxy Benefit Arrangement has been
established and maintained in all material respects in accordance with its terms
and in material compliance with all Laws. HCI has listed on Schedule 6.9(d) all
exceptions, without regard to whether such exceptions are likely to have a
material adverse effect on the Galaxy's Business, to this Section 6.9(d) of
which HCI or any of the Contributed Entities have actual knowledge.

                         (e) Except as set forth on Schedule 6.9(e), none of the
Contributed Entities have represented, promised or contracted (whether in oral
or written form) to any current or former Galaxy Benefit Employee (either
individually or to Galaxy Benefit Employees as a group) that such current or
former Galaxy Benefit Employee(s) would be provided with life insurance or
employee health or welfare plan benefits upon their retirement or termination of
employment (except as may be required by statute), except where such
representation, promise or contract is not likely to have a material adverse
effect on the Galaxy Business. HCI has listed on Schedule 6.9(e) all exceptions,
without regard to whether such exceptions are likely to have a material adverse
effect on the Galaxy Business, to this Section 6.9(e) of which HCI or any of the
Contributed Entities have actual knowledge.

                         (f) Except as set forth on Schedule 6.9(f), HCI has
delivered or made available to PAS true and complete copies of all Galaxy ERISA
Plans, all related trust agreements, the latest summary plan descriptions, the
latest Internal Revenue Service determination letter and application therefor
for each plan which is intended to be qualified under Section 401(a) of the
Code, and all Galaxy Benefit Arrangements and employment severance agreements
pursuant to plans which the Galaxy Business has or may have any liability.

                         (g) Except as set forth on Schedule 6.9(g), neither the
execution or delivery of this Agreement or the Related Agreements nor the
consummation of the transactions contemplated hereby or thereby (either alone or
together with any additional or subsequent events), shall constitute an event
under any Galaxy ERISA Plan, Galaxy Benefit Arrangement, loan or individual
agreement or contract that may result in any payment (whether of severance pay
or otherwise), restriction, or limitation upon the assets of any Galaxy ERISA
Plan or Galaxy Benefit Arrangement, acceleration of payment or vesting, increase
in benefits or compensation, or required funding with respect to any Galaxy
Benefit Employee or any of its subsidiaries or the forgiveness of any loan or
other commitment of any Galaxy Benefit Employee.
<PAGE>
                         (h) Except as set forth on Schedule 6.9(h), there are
no pending, or, to the Contributed Entities' knowledge, threatened material
actions or suits by or on behalf of any Galaxy ERISA Plans or Galaxy Benefit
Arrangements, by any Galaxy Benefit Employee or beneficiary covered under any
such Galaxy ERISA Plan or Galaxy Benefit Arrangement, or otherwise involving any
such plan or arrangement (other than routine claims for benefits), except to the
extent that such pending or threatened actions or suits are not likely to have a
material adverse effect on the Galaxy Business.

                         (i) Except as set forth on Schedule 6.9(i), with
respect to each Galaxy ERISA Plan that is funded wholly or partially through an
insurance policy, there is no liability of the Galaxy Business under any such
insurance policy or ancillary agreement with respect to such insurance policy in
the nature of a retroactive rate adjustment, loss sharing arrangement or other
actual or contingent liability arising wholly or partially out of events
occurring prior to the Effective Time which is likely to have a material adverse
effect on the Galaxy Business.

                         (j) Except as set forth on Schedule 6.9(j), all
employee contributions to Galaxy ERISA Plans to the date hereof have been
properly withheld by the Galaxy Business, all contributions required to be made
to each such plan by the Galaxy Business (including employee contributions and
compensation deferrals and employer matching or other contributions) have been
made on a timely basis or will be made on a timely basis and all of such
contributions have been or will be fully paid into the funding arrangements for
the respective Galaxy ERISA Plan, except where such failure is not likely to
have a material adverse effect on the Galaxy Business.

                         (k) Except as set forth on Schedule 6.9(k), to the
Contributed Entities' knowledge, there are no pending lawsuits, governmental
proceedings, arbitration proceedings or written claims by Galaxy Benefit
Employees against the Galaxy Business or any of its Galaxy Benefit Employees,
nor are any of the Contributed Entities aware of any such pending lawsuits,
governmental proceedings, arbitration proceedings or written claims of any
Galaxy Benefit Employee pursuant to any applicable Law relating to employees,
including human rights legislation, labor standards legislation, occupational
health and safety legislation, worker's compensation legislation or any other
employment-related legislation.

                         (l) Schedule 6.9(l) sets forth a complete and accurate
list of any and all loans of any nature whatsoever (other than routine travel
advances) made by the Galaxy Business to any current or former Galaxy Benefit
Employee or any affiliate of any such current or former employee.

                         (m) The Galaxy Business is and has been in compliance
with all occupational health and safety rules and regulations of applicable Law,
except for noncompliance that is not likely to have a material adverse effect on
the Galaxy Business. HCI has listed on Schedule 6.9(m) all exceptions, without
regard to whether such exceptions would have a material adverse effect on the
Galaxy Business, to this Section 6.9(m) of which HCI or any of the Contributed
Entities have actual knowledge.
<PAGE>
                         (n) Except as set forth on Schedule 6.9(n), there are
no currently pending notices of assessment, or any other communications related
thereto which any Contributed Entity has received from any workers' compensation
board or similar authorities in any jurisdictions where the Galaxy Business is
carried on and there are no assessments which are unpaid, except for assessments
and other communications that are not likely to have a material adverse effect
on the Galaxy Business. HCI has listed on Schedule 6.9(n) all exceptions,
without regard to whether such exceptions are likely to have a material adverse
effect on the Galaxy Business, to this Section 6.9(n), of which HCI or any of
the Contributed Entities have actual knowledge.

                         (o) Except as set forth on Schedule 6.9(o), the
deductibility of any amount paid or payable to any Galaxy Benefit Employee will
not be disallowed by the application of Section 162(m) of the Code.

                         (p) Except as set forth on Schedule 6.9(p), there are
no employment, severance or termination agreements, other compensation
arrangements, agreements or plans currently in effect relating to the Galaxy
Business which provide for the payment of any amount (whether in cash, property,
the vesting of property or other benefit, right or enhancement) in connection
with any of the transactions contemplated by this Agreement or the Related
Agreements to any employee, officer, shareholder or director of the Galaxy
Business who is a "disqualified individual" (as such term is defined in Section
280G(c) of the Code) that would be characterized as an "excess parachute
payment" (as such term is defined in Section 280G(b) of the Code).

                  6.10 Absence of Certain Changes or Events. Since June 30, 1996
to the date hereof and except as otherwise disclosed on Schedule 6.10 or as
contemplated by this Agreement:

                         (a) each of the Contributed Entities has (i) conducted
its business related to the Galaxy Business only in the usual and ordinary
course, (ii) operated its business related to the Galaxy Business substantially
in accordance with past practices, (iii) attempted to preserve its business and
assets related to the Galaxy Business intact and (iv) attempted to preserve the
goodwill of its suppliers, customers, distributors and others having business
with it in respect of the Galaxy Business;

                         (b) there has not been any material adverse change in
the condition (physical, financial or otherwise) of the assets and liabilities
comprising the Galaxy Business other than usual and ordinary change which occurs
in the normal course of usage;

                         (c) there has not been any damage, destruction, loss or
claim (whether or not covered by insurance) that has had a material adverse
effect on the Galaxy Business;

                         (d) none of the Contributed Entities has, in connection
with the Galaxy Business, directly or indirectly, declared, ordered, paid, made
or set apart or resolved to pay (i) any sum or property as a dividend or other
distribution on account of any capital thereof or (ii) any redemption,
<PAGE>
retirement, purchase or acquisition, direct or indirect, of any capital or
securities thereof;

                         (e) there has not been any change in any method of
accounting or accounting practice or procedure by any of the Contributed
Entities with respect to the Galaxy Business except for any such change after
the date hereof required by GAAP;

                         (f) none of the Contributed Entities has mortgaged,
pledged or subjected to any material Lien (other than Permitted Liens) any of
its material properties or assets, tangible or intangible in each case related
to the Galaxy Business;

                         (g) none of the Contributed Entities has acquired or
disposed of any material assets or properties related to the Galaxy Business in
any transaction with any of its Affiliates or any of its Affiliate's officers,
directors, shareholders or monthly salaried employees on terms that are more
favorable than arms' length or, except in the ordinary course of business,
acquired or disposed of any assets or properties of material value in any
transaction with any other person or entity;

                         (h) there has not been any material transaction or
commitment made, or any contract or other agreement entered into, by any of the
Contributed Entities relating to the Galaxy Business (including the acquisition
or disposition of any assets) or any relinquishment by any of the Contributed
Entities of any material contract, property or other right, other than
transactions and commitments in the ordinary course of business and those
contemplated by this Agreement and the Related Agreements;

                         (i) none of the Contributed Entities has forgiven or
cancelled any material debts or claims, or waived in any material respect any
rights without having received fair consideration therefor, in each case related
to the Galaxy Business;

                         (j) there has not been any amendment of any term of any
outstanding indebtedness in excess of $50,000,000 in the aggregate or security
of any of the Contributed Entities in respect of the Galaxy Business;

                         (k) there has not been any loan, advance or capital
contribution to or investment (other than cash balances of the Contributed
Entities in money market or other short term investment accounts) to any person
or entity related to the Galaxy Business in excess of $5,000,000 in the
aggregate, other than loans, advances or capital contributions or investments
made in the ordinary course of business;

                         (l) none of the Contributed Entities has incurred any
other material liabilities or obligations or given any guarantee (whether
absolute, accrued, contingent or otherwise), other than liabilities incurred or
guarantees given in the ordinary course of business, in each case in respect of
the Galaxy Business; and

                         (m) none of the Contributed Entities nor any of their
Subsidiaries have adversely modified, terminated, waived, transferred, permitted
to lapse, or failed to preserve any Galaxy Permit issued by the FCC, any Galaxy
Permit relating to the construction, launch or operation of the Galaxy
<PAGE>
Satellites or Galaxy Ground Stations, or any Galaxy Permit authorizing the
provision of broadcasting or communications services in such a manner as is
likely to have a material adverse effect on the Galaxy Business or the assets
related thereto.

                  6.11 Insurance. Each of the Contributed Entities maintains
reasonably adequate insurance with respect to its properties and business
related to the Galaxy Business against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the same or
similar businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by such other corporations.
A description of all launch and in-orbit satellite insurance policies is set
forth on Schedule 6.11.

                  6.12 Intellectual Property. Schedule 6.12 sets forth a listing
and description of all material domestic, foreign, common law, registered and
pending applications for patents, trademarks, service marks, logos, slogans,
designs, copyrights, trade names, and all material licenses running to or from
the Contributed Entities relating to the Galaxy Business. Unless expressly set
forth otherwise on Schedule 6.12, the Contributed Entities own (or where
indicated on Schedule 6.12 have a right to use), free and clear of any liens,
security interests, encumbrances or claims of others, all patents, trademarks,
service marks, logos, slogans, designs, copyrights, trade names, design
registrations, and other intellectual property listed on Schedule 6.12 and any
trade secrets, know-how, confidential information, material computer programs
(including any source code), documentation, engineering and technical drawings,
processes, methodologies, trade dress, and technology utilized in or incidental
to the Galaxy Business (all of the foregoing items collectively referred to as
the "Galaxy Intellectual Property"). Except as set forth on Schedule 6.12, (a)
no proceedings are pending or, to the knowledge of the Hughes Parties,
threatened in writing, which challenge the validity of the ownership by the
Contributed Entities of the Galaxy Intellectual Property; (b) none of the Hughes
Parties has any knowledge of any infringement or infringing use of any of the
Galaxy Intellectual Property or licenses by any person or entity, and the
Contributed Entities have, and as of the Closing Date Newco will have, good and
valid title to all the Galaxy Intellectual Property that is owned by the
Contributed Entities, and their licenses and other rights to use will be
adequate for conducting the Galaxy Business and enforceable in accordance with
their terms; (c) to the Contributed Entities' knowledge, no infringement of any
material intellectual property right or other proprietary right of any third
party has occurred or will result in any way from the conduct of the Galaxy
Business or from the signing and execution of this Agreement or the Related
Agreements or the consummation of any or all of the transactions contemplated
hereby or thereby, and no written claim has been made by any third party based
upon an allegation of any such infringement; (d) the Galaxy Intellectual
Property is valid and in full force and effect and no aspect thereof is subject
to any outstanding order, ruling, decree, judgment or stipulation by or with any
court, arbitrator or administrative agency; and (e) there are no restrictions on
the direct or indirect transfer of any license, or any interest therein, held by
the Galaxy Business in respect of the Galaxy Intellectual Property.
<PAGE>
                  6.13 Environmental Matters.

                         (a) The operations of each of the Contributed Entities
relating to the Galaxy Businesses are in substantial compliance with all
Environmental Laws with respect to its conduct of the Galaxy Business. Except as
set forth on Schedule 6.13(a), none of the Contributed Entities have received
any written notice with respect to any of its assets of any material violation
of any Environmental Law with respect to the Galaxy Business.

                         (b) Except as set forth on Schedule 6.13(b), there are
no conditions associated with assets of the Galaxy Business, the operation of
the Galaxy Business or owned or, to each Contributed Entity's Knowledge, leased
real property that relate to the Galaxy Business as currently operated that
would under applicable Environmental Law require or could reasonably be expected
to require any of the Contributed Entities to (i) undertake any action that
would materially impair the ability of such entity to use the material owned and
leased real property that relate to the Galaxy Business as currently operated or
the material assets of the Galaxy Business as currently used, (ii) incur
material expenditures or (iii) undertake remedial obligations at any real
property that is owned, operated or leased by any of the Contributed Entities or
that is adjacent to real property owned, operated or leased by such entity in
connection with the Galaxy Business which would cost individually in excess of
$1.0 million.

                         (c) Except as set forth on Schedule 6.13(c), as of the
date hereof, none of the Contributed Entities is subject to any outstanding
orders, agreements or contracts with any Government Entity or other person
respecting (i) violations of Environmental Laws, (ii) Remedial Action or (iii)
any Release or threatened Release of a Hazardous Material, in either case which
could be expected to have a material adverse effect on the Galaxy Business.

                  6.14 Investment Banking Fees and Commissions. Except for
Greenhill & Co., LLC and Donaldson, Lufkin & Jenrette Securities Corporation
(copies of whose engagement letters with HE have been furnished to PAS), no
person or entity is entitled to receive from the Hughes Parties or any of their
Subsidiaries or any of their directors, officers or employees any investment
banking, brokerage or finder's fee or fees for financial consulting or other
advisory services in connection with this Agreement or the transactions
contemplated hereby based upon arrangements made by or on behalf of the Hughes
Parties, nor is any person or entity entitled to receive reimbursement from the
Hughes Parties or any of their Subsidiaries for any such services or any legal
fees and expenses.

                  6.15 Material Contracts.

                         (a) HCI has provided or made available to PAS or its
independent auditors and/or legal counsel (i) true and complete copies of all
written Material Contracts relating to the Galaxy Business, or (ii) with respect
to such Material Contracts that have not been reduced to writing, a written
description thereof, each of which is listed on Schedule 6.15(a). Except as set
forth on Schedule 6.15(a), none of the Contributed Entities has received any
notice or has any knowledge that any other party is, in default in any respect
under any such Material Contract, other than payment defaults under transponder
<PAGE>
lease agreements which are not more than 90 days past due. Each of the Material
Contracts relating to the Galaxy Business is in full force and effect and
constitutes a valid, legal and binding agreement of the parties thereto,
enforceable in accordance with its terms except for the Bankruptcy Exception.

                         (b) Except as set forth on Schedule 6.15(b), none of
the Hughes Parties is a party, as of the date hereof, to any contract,
agreement, commitment, arrangement, lease (including with respect to personal
property), policy or other instrument that is not subject to termination by such
Hughes Party upon less than six months written notice to the other party thereto
which materially restricts or limits the right of any Hughes Party or, which
would, on or after the Closing Date, materially restrict or limit Newco's or any
of its Affiliates' right to conduct its business or compete, including without
limitation, any restriction on its ability to sell, lease or otherwise provide
services from available transponder capacity to any person or entity for any
purpose at any orbital location and in any frequency band, any geographical,
market segment, product line or other industry limitation, or any exclusive or
sole supply or vendor arrangement or agreement. Nothing in this Section 6.15(b)
shall preclude or require disclosure on Schedule 6.15(b) of most favored nations
provisions, options for additional services or capacity, rights of negotiation,
or similar provisions agreed to in the ordinary course of business (including,
without limitation, of the kind set forth in the agreements referenced on
Schedule 6.15(a)).

                         (c) As of June 30, 1996, the contracts, agreements,
commitments, arrangements, leases (including with respect to personal property)
that represent obligations of third parties to make payments to any Hughes Party
in exchange for the sale or lease of transponder capacity, have an aggregate
stated amount of unpaid payments owing to the Hughes Parties of $3,394,000,000
over the remaining stated term of such contracts, after allowance for doubtful
accounts or other allowances or deductions known as of such date which are
ordinary and customary in the conduct of the Galaxy Business (the "Galaxy
Backlog"). The Galaxy Backlog represents amounts that, assuming the due
performance by each party of its obligations under each contract and the
occurrence of no event that would permit termination of a contract without
liability to the terminating party, will be due for, and will arise out of, bona
fide sales and delivery of goods, performance of services and other business
transactions, unless the underlying contract thereto is properly terminated in
accordance with the terms thereof. Except as set forth on Schedule 6.15(c),
there are no refunds, discounts or other adjustments payable by any Hughes Party
with respect to any portion of the Galaxy Backlog, and to the knowledge of
Galaxy, there are no defenses, rights of setoff, counterclaims, assignments,
restrictions, encumbrances, or conditions enforceable by any third parties on or
affecting any portion of the Galaxy Backlog. Except as set forth on Schedule
6.15(c), none of the Hughes Parties is, or has received any notice or has any
knowledge that any other party is, in default in any material respect under any
contract representing any portion of the Galaxy Backlog, other than (i) payment
defaults under transponder lease agreements which are not more than 90 days past
due (ii) defaults under contracts representing the Galaxy Backlog that do not
have a stated backlog in excess of $500,000 in the aggregate for the stated
contract term, and (iii) defaults or terminations under transponder lease
agreements that are promptly replaced by contracts providing for reasonably
equivalent or superior backlog payments.
<PAGE>
                  6.16 Personal Property. The Contributed Entities have, and
immediately after the Closing Newco will have, good and valid title to all
personal property and assets (whether tangible or intangible) related to the
Galaxy Business reflected on the consolidated balance sheet of the Galaxy
Business as of June 30, 1996 or acquired after June 30, 1996, except for
property and assets sold since June 30, 1996 in the ordinary course of business
and except for satellite systems under development by the Galaxy Business, with
respect to which title will not be taken, other than as provided in the
applicable contract therefor provided that except as disclosed on Schedule 6.16
there are no material Liens with respect to any satellites under development.
Except as set forth on Schedule 6.16, none of such properties or assets (whether
real or personal) is subject to any Liens, except:

                      (i)       Liens disclosed on the Galaxy Balance Sheet; or

                      (ii)      any Permitted Liens.


                  6.17 Real Property.

                         (a) Schedule 6.17(a) sets forth a complete description
of all real property owned by the Contributed Entities that relate to the Galaxy
Business (the "Galaxy Owned Real Property"), together with a description of such
ownership and the identity of the entity that owns such property. The
Contributed Entities have good and valid title to the Galaxy Owned Real Property
and otherwise own the Galaxy Owned Real Property free and clear of all liens,
security interests, claims and other charges and encumbrances, except for (i)
Permitted Liens and (ii) encumbrances, if any, which do not materially impair
the existing use of the property.

                         (b) Schedule 6.17(b) sets forth a list of all of the
land, buildings and other real property leased or sub-leased by the Contributed
Entities in connection with the Galaxy Business (the "Galaxy Leased Real
Property"). The Contributed Entities have a good and valid leasehold interest in
and right to peaceful quiet possession as against each landlord with respect to
each Galaxy Leased Real Property. True and complete copies of all leases of the
Galaxy Leased Real Property have been made available for review to PAS. Such
leases are in full force and effect according to their terms, constitute the
legal, valid and binding obligations of the Contributed Entity that is a party
thereto and, to the Contributed Entities' knowledge, such leases have not been
amended or modified except as disclosed in writing to PAS. None of the
Contributed Entities is in material default with respect to any of the leases of
the Galaxy Leased Real Property, nor has any event occurred which with the
passage of time, the giving of notice, or both, would constitute an event of
default or otherwise would place such Contributed Entity in material default
under any of such leases; none of the Contributed Entities have received any
notice of any such default or event; and, to the Contributed Entities'
knowledge, no landlord is in default under any of such leases, and no event has
occurred which with the passage of time, the giving of notice, or both, would
constitute an event of default or otherwise place any landlord in default
thereunder.

                         (c) The Galaxy Owned Real Property and the Galaxy
Leased Real Property, together with facilities furnished under contract with
others, comprise substantially all of the real estate used in, or necessary to
conduct, the Galaxy Business, and such use and occupancy is in conformance in
<PAGE>
all material respects with all applicable laws, rules and regulations, including
but not limited to, applicable zoning, subdivision and other land use rules and
regulations, the violation of which is likely to have a material adverse effect
on the Galaxy Business.

                         (d) To the Contributed Entities' knowledge, other than
the Contributed Entities, there are no parties in possession of any portion of
the Galaxy Leased Real Property or the Galaxy Owned Real Property, whether as
lessees or sublessees thereof, or tenants at sufferance, trespassers or
otherwise, except as disclosed on Schedule 6.17(d). The location, construction,
occupancy, operation or use of the Galaxy Owned Real Property and, to the best
knowledge of the Contributed Entities, the Galaxy Leased Real Property
(including the buildings, improvements, fixtures and equipment located thereon)
do not contravene any laws, rules or regulations, or any restrictive covenant or
deed restriction (recorded or otherwise), or any Galaxy Permit, affecting any of
such property the contravention of which is likely to have a material adverse
effect on the Galaxy Business. There are no pending or, to the best knowledge of
the Contributed Entities, threatened condemnation proceedings with respect to
any Galaxy Leased Real Property, lease, or the Galaxy Owned Real Property, or
litigation or administrative actions relating thereto. All buildings,
improvements, fixtures and equipment used in connection with the Galaxy Business
are located on the Galaxy Owned Real Property and the Galaxy Leased Real
Property and do not encroach on any adjoining property, and, to the best
knowledge of the Hughes Parties, no buildings or improvements encroach upon the
Galaxy Owned Real Property or the Galaxy Leased Real Property which is likely to
have a material adverse effect on the Galaxy Business.

                 6.18 Certain Assets and Agreements.

                         (a) Ground Stations. Each ground station, including,
without limitation, the related broadcasting facility assets (consisting of
land, building, fixtures, improvements and telemetry, tracking and control
equipment) that is owned or leased by any of the Contributed Entities in
connection with the Galaxy Business is listed on Schedule 6.18(a) (the "Galaxy
Ground Stations"). Except as otherwise set forth on Schedule 6.18(a), with
respect to each such ground station, the improvements thereto and all components
used in connection therewith, including, without limitation,
transmission/reception systems and programming and data broadcasting systems, if
any, (i) are in good operating condition and repair and are suitable for their
intended purposes and (ii) are supported by a back-up, fuel-powered electricity
generator capable of generating power sufficient to meet the requirements of the
operations conducted at the ground station. The transmission/reception systems
and programming and data broadcasting systems at each such ground station have
the redundancies that are set forth on Schedule 6.18(a).

                         (b) Satellites and Transponders. Set forth on Schedule
6.18(b) are the following: (i) a complete and accurate list, by orbital
location, of each satellite and transponder thereon owned or leased in
connection with the Galaxy Business (each a "Galaxy Satellite"), (ii) a true and
correct copy of a satellite loading chart listing each transponder on each
Galaxy Satellite, along with the type of transponder (C-band, Ku-band or other)
and the customer or group of related customers that have leased or purchased
capacity on such transponder and the amount of such capacity, (iii) the most
<PAGE>
recent "Health Status Report," summarizing all spacecraft related incidents and
anomalies known to the Galaxy Business as well as the current status, to the
best knowledge of the Contributed Entities, of the subsystems on the Galaxy
Satellites (power, telemetry and command, reaction control, communications and
antenna), and (iv) a list of all satellites under construction, all satellites
that have been constructed but not launched, including describing the status of
launch insurance, the coverage thereunder and the premium to be paid in
connection therewith. For each Galaxy Satellite, true, correct and complete
copies of the foregoing will be delivered or made available to PAS (all such
data, records, tapes, information, lists and reports are collectively referred
to herein as the "Galaxy Data") prior to the Closing Date. Such Galaxy Data
represent, to the best knowledge of the Contributed Entities, all relevant and
material information relating to the operating condition and repair of the
Galaxy Satellites, and the fuel life expectancies of the Galaxy Satellites. The
information contained in the Galaxy Data is, to the best knowledge of the
Contributed Entities, accurate and complete records (except as to only those
informational gaps disclosed to PAS) of the subject matters covered therein;
however, such parties make no representation or warranty as to the accuracy of
any conclusion expressed as to fuel life expectancies of the Galaxy Satellites.
Such Galaxy Satellites are to the best knowledge of each of the Hughes Parties,
subject to the Health Status Reports, in good condition. Except as specifically
provided herein, no representation or warranty, express or implied, is made with
respect to the Galaxy Satellites.

                         (c) Tracking, Telemetry and Control Equipment. Except
as otherwise set forth on Schedule 6.18(c), to the best knowledge of the
Contributed Entities, the tracking, telemetry and control equipment (on the
ground) used by third party contractors to provide tracking, telemetry and
control services related to each Galaxy Satellite is (i) in good operating
condition and repair, ordinary wear and tear excepted, and (ii) not in need of
maintenance or repairs except for ordinary, routine maintenance and repairs.

                         (d) ITU Frequency Registration. Schedule 6.18(d)
contains a summary, by orbital location, of the status of frequency registration
at the International Telecommunications Union, of each Galaxy Satellite,
including the identity of the sponsoring administration and the frequency bands
covered.

                         (e) Satellite Coordination. Except as set forth on
Schedule 6.18(e), to the best knowledge of the Contributed Entities, no person
or entity has asserted that it has rights to operate a spacecraft in a manner
that would result in interference with respect to any Galaxy Satellite or any
Satellite to be used in connection with the Galaxy Business for which a
Contributed Entity has applied for a Permit. Except as set forth on Schedule
6.18(e), none of the Contributed Entities is aware of any asserted dispute with
respect to such entity's continued ability to utilize any Galaxy Satellite
substantially in the manner that such Galaxy Satellite has been used in
connection with the Galaxy Business to date. Schedule 6.18(e) also contains a
list of all satellite coordination agreements to which any of the Contributed
Entities or their Affiliates is a party, a summary of all operational or
technical limitations set forth therein and a summary of all coordination
discussions with other persons or entities, domestic or foreign, with regard to
the Galaxy Satellites or any Satellite to be used in connection with the Galaxy
Business for which a Contributed Entity has applied for a Permit in which any of
<PAGE>
the Contributed Entities or their Affiliates has been engaged in the past three
years.

                  6.19 IGO Determinations. Schedule 6.19 contains a list of all
IGO Determinations with respect to the Galaxy Satellites that are needed to
operate Galaxy Business as it is now being conducted. Except as set forth on
Schedule 6.19, none of the Contributed Entities is aware of any difficulties in
obtaining any other IGO Determinations with respect to the Galaxy Satellites or
any Satellite to be used in connection with the Galaxy Business for which a
Contributed Entity has applied for a Permit.

                                  ARTICLE VII
                                   COVENANTS

                  7.1 Interim Operations of PAS. Except as expressly
contemplated or permitted by this Agreement or any of the Related Agreements, or
to the extent that HCI shall otherwise consent in writing, during the period
from the date of this Agreement and continuing until the Closing Date, PAS
agrees as to PAS and its Subsidiaries that:

                         (a) Ordinary Course. PAS and its Subsidiaries shall
carry on their businesses in the usual, regular and ordinary course in
substantially the same manner as heretofore conducted, and shall use
commercially reasonable efforts and, to the extent necessary to conduct normal
operations, cause each of its Subsidiaries to use commercially reasonable
efforts to preserve intact its present business organizations, to keep available
the services of its current officers and employees and to preserve its
relationships with customers, suppliers and others having business dealings with
it to the end that its goodwill and ongoing business shall not be impaired in
any material respect at the Closing Date. For the avoidance of doubt, it is
understood that, subject to the limitations on investment, disposition and
incurrence of indebtedness in subsections (f), (g) and (k) below, the pursuit of
and consummation by PAS of strategic partnerships, joint ventures, acquisitions
and similar activities and investments shall be considered to be in the
"ordinary course" for PAS if, in each case, such activities and investments are
ancillary to the sale or lease of, or the provision of service or capacity via,
transponders by PAS.

                         (b) Dividends; Changes in Capital Stock. PAS shall not,
and shall not permit any of its Subsidiaries to: (i) declare, set aside or pay
any dividends on or make other distributions (whether in cash, securities or
property or any combination thereof) in respect of any class or series of its
capital stock, except for non-cash dividends in respect of PAS Preferred Stock,
or cash dividends or distributions paid on or with respect to the capital stock
of a wholly owned Subsidiary; (ii) split, combine, subdivide or reclassify any
of its capital stock or issue or authorize or propose the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock; or (iii) repurchase, redeem or otherwise acquire, or permit any
Subsidiary to purchase or otherwise acquire, any shares of the capital stock or
other securities of PAS or any of its Affiliates.

                         (c) Issuance of Securities. Other than as provided or
allowed herein and except as set forth on Schedule 7.1(c) or pursuant to the
exercise of Options, PAS shall not, and shall not permit any of its Subsidiaries
<PAGE>
to, issue, pledge or sell, or authorize the issuance, pledge or sale of
additional shares of capital stock of any class, or securities convertible into
capital stock of any class, or any rights, warrants or options to acquire any
convertible securities or capital stock, or any other securities in respect of,
in lieu of, or in substitution for, shares of common stock outstanding on the
date hereof or (ii) amend, waive or otherwise modify any of the terms of any
option, warrant or stock option plan of it or any of its Subsidiaries.

                         (d) Governing Documents. PAS shall not, and shall not
permit any of its Subsidiaries to, amend or propose to amend their respective
Certificates of Incorporation or Bylaws.

                         (e) No Solicitation. From the date hereof through the
Closing Date or the earlier termination of this Agreement, PAS shall not, and
shall not permit any of its Subsidiaries, or any of its or their officers,
directors, employees, representatives, agents or Affiliates (including, without
limitation, any investment banker, attorney or accountant retained by PAS or any
of its Subsidiaries) to, directly or indirectly, enter into, solicit, initiate
or continue any discussions or negotiations with, or encourage or respond to any
inquiries or proposals by, or participate in any negotiations with, or provide
any information to, or otherwise cooperate in any other way with, any
corporation, partnership, person or other entity or group (each, a "Person")
(other than HCI, Galaxy or any of their Affiliates or representatives),
concerning any offer or proposal which constitutes or is reasonably likely to
lead to any Acquisition Proposal; provided that the Board of Directors of PAS
may, in the event of an unsolicited Acquisition Proposal, engage in negotiations
or discussions with, or provide information or data to, any Person relating to
an Acquisition Proposal if (x) the Acquisition Proposal is a bona fide
fully-financed written offer submitted to PAS' Board of Directors and such Board
of Directors, after consulting with a nationally recognized investment bank,
determines that such Acquisition Proposal is economically superior to the
transactions contemplated by this Agreement and the Related Agreements (a
"Superior Acquisition Proposal"), and (y) PAS' Board of Directors determines,
after having received the written opinion of outside legal counsel to PAS, that
the failure to engage in such negotiations or discussions or provide such
information would result in a breach of the fiduciary duties of the Board of
Directors of PAS under applicable law. Then, in such event, the Board of
Directors may withdraw or modify its approval or recommendation of the Merger or
this Agreement, approve or recommend the Superior Acquisition Proposal or
terminate this Agreement pursuant to Section 9.1(g) hereof. HCI shall have the
right to match any such Superior Acquisition Proposal, and have such matching
proposal immediately accepted by PAS, for five (5) business days after HCI is
informed of the necessary determinations in clauses (x) and (y) of the preceding
sentence with respect to such Superior Acquisition Proposal. Any information
furnished to any Person in connection with an Acquisition Proposal shall be
provided pursuant to a confidentiality agreement in customary form on terms not
more favorable to such Person than the terms contained in the Confidentiality
Agreement (as defined in Section 7.6). Subject to all of the foregoing
requirements, PAS will immediately notify HCI orally and in writing if any
discussions or negotiations are sought to be initiated, any inquiry or proposal
is made, or any information is requested by any Person with respect to any
Acquisition Proposal or which could lead to an Acquisition Proposal and
immediately notify HCI of all material terms of any proposal which it may
receive in respect of any such Acquisition Proposal, including the identity of
<PAGE>
the Person making the Acquisition Proposal or the request for information, if
known, and thereafter shall inform HCI on a timely, ongoing basis of the status
and content of any discussions or negotiations with such a third party,
including immediately reporting any material changes to the terms and conditions
thereof. PAS shall, and shall cause its Subsidiaries and Affiliates, and will
use its best efforts to ensure their respective officers, directors, employees,
investment bankers, attorneys, accountants and other agents to, immediately
cease and cause to be terminated all discussions and negotiations that have
taken place prior to the date hereof, if any, with any Persons conducted
heretofore with respect to any Acquisition Proposal. As used in this Agreement,
"Acquisition Proposal" shall mean any of the following (other than the
transactions contemplated hereunder) involving PAS or any of its Subsidiaries:
(i) any merger, consolidation, share exchange, recapitalization, business
combination, or other similar transaction; (ii) any sale, lease exchange,
mortgage, pledge, transfer or other disposition of 10% or more of the assets of
PAS and its Subsidiaries, taken as a whole, in a single transaction or series of
transactions; (iii) any tender offer or exchange for or other purchase of 10% or
more of the outstanding shares of the capital stock of PAS or the filing of a
registration statement under the Securities Act in connection therewith; or (iv)
any public announcement of a proposal, plan or intention to do any of the
foregoing. Nothing contained in this Section 7.1(e) shall prohibit PAS or its
Board of Directors from taking and disclosing to its stockholders a position
with respect to a tender offer by a third party pursuant to Rules 14d-9 and
14e-2(a) promulgated under the Exchange Act or making such disclosure as may be
required by applicable law.

                         (f) No Spacecraft Acquisitions, Investments or Capital
Expenditures. Except as listed on Schedule 7.1(f), PAS shall not, and shall not
permit any of its Subsidiaries to (i) acquire or agree to acquire any satellite
or other spacecraft which PAS has not, on the date of this Agreement, previously
agreed in writing to acquire, or (ii) make one or more investments or capital
expenditures exceeding $35,000,000 in the aggregate in any twelve month period
for all such investments or expenditures that occur from the date hereof;
provided, however, that PAS may (A) replace any satellite lost in a launch or in
orbit, (B) continue capital programs now underway as described on Schedule
7.1(f), plus additional expenses solely for change orders of up to 10% of the
progress payments on each satellite remaining to be paid as of the date hereof,
and (C) purchase such terrestrial equipment as necessary to supply customers in
the ordinary course in connection with leases of transponder capacity by such
customers. Notwithstanding the foregoing, PAS shall not, and shall not permit
any of its Subsidiaries to provide financing for, make any additional investment
in, or make any capital expenditure for the benefit of, any business engaged in
DTH Services unless such financing, investment or expenditure is ancillary to
the sale or lease of, or other provision of service or capacity via,
transponders. As used in this Agreement, "DTH Services" means any video, audio,
data or other information services provided by satellite and intended for direct
reception by the general public.

                         (g) No Dispositions. Other than as contemplated hereby
and other than dispositions in the ordinary course of business consistent with
past practice which are not material in the aggregate to PAS and its
Subsidiaries, taken as a whole, PAS shall not, and shall not permit any of its
Subsidiaries to, sell, pledge, lease, dispose of, encumber or otherwise
authorize the sale, disposition, grant, encumbrance, lease (whether such lease
is an operating or capital lease) of any of its assets.
<PAGE>
                         (h) No Dissolution, Etc. Except as otherwise permitted
or contemplated by this Agreement, PAS shall not authorize, recommend, propose
or announce an intention to adopt a plan of complete or partial liquidation or
dissolution of PAS or any of its Significant Subsidiaries. As used in this
Agreement, the term "Significant Subsidiary" has the meaning assigned to it in
Regulation S-X under the Exchange Act.

                         (i) Other Actions. PAS will not voluntarily take, and
will not permit any of its Subsidiaries voluntarily to take or agree or commit
voluntarily to take, any action that results in any of PAS' representations or
warranties hereunder being untrue in any material respect or in any of PAS'
covenants hereunder or any other conditions to the Asset Contribution, the
Univisa Contribution or the Merger not being satisfied in all material respects.
Notwithstanding the foregoing, no action permitted by this Section 7.1 or
contemplated by this Agreement shall be construed to have caused a breach of a
representation or warranty contained herein.

                         (j) Certain Employee Matters. Except as described on
Schedule 7.1(j), PAS and its Subsidiaries shall not: (A) grant any increases in
the compensation or fringe benefits of any of its directors, officers, or key
employees; (B) pay or agree to pay any pension, retirement allowance, severance,
termination or other employee benefit not required or contemplated by any of the
existing PAS ERISA Plans or PAS Benefit Arrangements as in effect on the date
hereof to any such director, officer or key employee, whether past or present;
(C) other than with respect to new hires consistent with past practice enter
into any new, or materially amend any existing, employment or severance or
termination agreement with any such director, officer or key employee; or (D)
establish, adopt, enter into, or amend any collective bargaining, bonus, profit
sharing, thrift, compensation, stock option, restricted stock, pension,
retirement, savings, welfare, deferred compensation, employment, termination,
severance or other employee benefit plan, agreement, trust, fund, policy or
arrangement for the benefit or welfare of any directors, officers or current or
former employees, except in each case (i) to the extent required by applicable
law or regulation, (ii) pursuant to collective bargaining agreements as in
effect on the date of this Agreement, (iii) for cash bonuses in lieu of options
not to exceed $5,000,000 in the aggregate, (iv) normal bonuses and normal
increases to officers and key employees consistent with past practice or other
agreements which PAS believes are necessary for the continued conduct of PAS'
business in the ordinary course, or (v) for amendments to PAS ERISA Plan(s) or
PAS Benefits Arrangement(s) which have been disclosed to HCI prior to the
execution of this Agreement or which would not materially increase the cost of
benefits to PAS and its Subsidiaries, taken as a whole, in the aggregate.

                         (k) Indebtedness. Except as set forth on Schedule
7.1(k), and except for borrowing in the ordinary course of business consistent
with past practices under its existing credit facilities or arrangements, PAS
shall not, and shall not permit any of its Subsidiaries to, assume, incur or
pre-pay any indebtedness for borrowed money or guarantee any such indebtedness
or issue or sell any debt securities or warrants or rights to acquire any debt
securities of such party or any of its Subsidiaries or guarantee any debt
securities of others or enter into any lease other than in the ordinary course
(whether such lease is an operating or capital lease), or create any mortgages,
liens, security interests or other encumbrances on the property of PAS or any of
its Subsidiaries in connection with any indebtedness thereof, or enter into any
<PAGE>
"keep well" or other agreement or arrangement to maintain the financial
condition of another person; provided that PAS may enter into any such "keep
well" agreement or arrangement if the payment of the full amount of the
obligation represented by such agreement could then be made as an investment
under Section 7.1(f).

                         (l) Agreements. Except as permitted by Section 7.1(f)
or as otherwise contemplated by this Agreement, PAS shall not, and shall not
permit any of its Subsidiaries to, enter into, materially modify, rescind,
terminate, waive, release or otherwise amend any of the terms or provisions of
any Material Contract, other than in the ordinary course of business consistent
with past practice.

                         (m) Accounting. PAS shall not, and shall not permit any
of its Subsidiaries to, take any action, other than in the ordinary course of
business, consistent with past practice or as required by the SEC or by law, to
effect any material change in any of its current accounting policies, procedures
and practices.

                         (n) Payment of Claims. PAS shall not, and shall not
permit any of its Subsidiaries to, pay, discharge or satisfy any material
claims, liabilities or obligations (absolute, accrued, asserted, unasserted,
contingent or otherwise), other than such payment, discharge or satisfaction in
the ordinary course of business and consistent with past practice.

                         (o) Waivers and Payments. PAS shall not, and shall not
permit any of its Subsidiaries to, other than in the ordinary course of business
and consistent with past practice, waive any rights of substantial value or make
any payment, direct or indirect, of any material liability before the same comes
due in accordance with its terms, except to the extent (and only to the extent)
to which PAS receives fair value in exchange for such waiver or payment.

                         (p) Insurance. PAS shall not and shall not permit any
of its Subsidiaries to, fail to maintain its existing insurance coverage of all
types in effect or, in the event any such coverage shall be terminated or lapse,
to the extent available at reasonable cost, procure substantially similar
substitute insurance policies which in all material respects are in at least
such amounts and against such risks as are currently covered by such policies.
Notwithstanding the foregoing, PAS shall not renew any spacecraft insurance
policy other than at the best available rate after competitive bidding.

                         (q) Affiliate Transactions. PAS shall not, and shall
not permit any of its Subsidiaries to, engage in any transaction with, or enter
into any agreement, arrangement, or understanding with, directly or indirectly,
any of such entity's affiliates (as defined in Rule 12(b)-2 under the Exchange
Act) which involves the transfer of consideration or has a financial impact on
such entity, other than pursuant to such agreements, arrangements, or
understandings (i) existing on the date of this Agreement (all of which such
agreements are considered to be Material Contracts for purposes of Section
5.16), (ii) which are done on terms that the Board of Directors of PAS
determines in good faith to be equal to, or more favorable to PAS, than the
terms that PAS would be able to obtain from third parties in similar
<PAGE>
transactions and/or for similar goods or services or (iii) which are permitted
by Section 7.1(o) hereof including PAS and any of its Subsidiaries.

                         (r) PAS Permits. PermExcept for Permits which lapse or
expire due to ordinary course changes in the business of PAS, PAS shall not
surrender, allow to expire or be terminated, modify adversely, forfeit, or fail
to renew or extend under regular terms any of the PAS Permits issued by the FCC
(other than those related to PAS Ground Stations) or give the FCC or other
Government Entity with jurisdiction any grounds to institute any proceeding for
the revocation, suspension, or adverse modification of any PAS Permit issued by
the FCC. Should the FCC or other Government Entity with jurisdiction institute
any proceedings for the suspension, revocation or adverse modification of any of
such PAS Permits, PAS shall use commercially reasonable efforts to promptly
contest such proceedings and to seek to have such proceedings terminated in a
manner that is favorable to PAS.

                         (s) Construction Permits and Applications. PAS will use
commercially reasonable efforts to maintain each FCC construction Permit (if
any) listed on Schedule 5.6 in effect until the applicable construction projects
are complete and will not, by act or omission, cause, or fail to use
commercially reasonable efforts to avoid having, any pending FCC application
listed on Schedule 5.6 to be dismissed or denied, except where (i) the loss of
such Permit or pending application would not have a material adverse effect on
PAS and its Subsidiaries, taken as a whole or (ii) the maintenance of any such
Permit would require an expenditure which would be in violation of subsection
(f) above.

                         (t) Interference.rferPAS shall use commercially
reasonable efforts to protect the transmissions to and from the PAS Satellites
and the PAS Ground Stations from interference from other radio communications
facilities (existing or proposed), to the extent that such interference is
prohibited by FCC Rules or inconsistent with rights accorded the PAS Satellites
under the ITU's Radio Regulations and shall promptly notify HCI of any actual or
threatened interference. As used in this Agreement, "FCC Rules" means,
collectively, the Communications Act of 1934, as amended, or any successor
statute, and the rules, regulations, orders and policies of the FCC promulgated
thereunder.

                         (u) No Restrictive Agreements. Neither PAS nor any of
its Subsidiaries shall enter into any contract, agreement, commitment,
arrangement, lease (including with respect to personal property), policy or
other instrument that (i) does not expire by the later of one (1) year after the
date hereof or six (6) months after the Closing or (ii) is not subject to
termination by PAS upon less than six months written notice to the other party
thereto, which in either case materially restricts or limits PAS' or such
Subsidiary's right to conduct its business or compete, including, without
limitation, any restriction on its ability to sell, lease or otherwise provide
services from available transponder capacity to any person or entity for any
purpose at any orbital location and in any frequency band, any geographical
market segment, product line or other industry limitation, or any exclusive or
sole supply or vendor arrangement or agreement. Nothing in this Section 7.1(u)
shall preclude or require PAS or any of its Subsidiaries from entering into
agreements containing most favored nation provisions, options for additional
services or capacity, rights of negotiation, or similar provisions, in each case
in the ordinary course of business.
<PAGE>
                         (v) Certain Other Agreements. PAS shall not, and shall
not permit any of its Subsidiaries to, enter into any contract, commitment or
arrangement, whether written or oral, to do any of the acts prohibited by this
Section 7.1 or to authorize, recommend, propose or announce an intention to do
the same. Notwithstanding the foregoing, PAS may enter into an agreement with
the landlord of the part of the PAS Leased Property located in Greenwich,
Connecticut to increase the square footage of such leased space by approximately
9,000 square feet on commercially reasonable terms and conditions, and PAS may
enter into the lease agreement described on Schedule 5.18(d) on commercially
reasonable terms and conditions.

                  7.2 Interim Operations of the Galaxy Business. Except as
expressly contemplated or permitted by this Agreement or any of the Related
Agreements, or to the extent that PAS shall otherwise consent in writing, during
the period from the date of this Agreement and continuing until the Closing
Date, HCI and Galaxy agree as to the Galaxy Business that:

                         (a) Ordinary Course. HCI shall cause each of the
Contributed Entities to carry on the Galaxy Business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted and to
use commercially reasonable efforts, to the extent necessary to conduct normal
operations, to preserve intact its present business organizations, to keep
available the services of its current officers and Galaxy Employees and to
preserve its relationships with customers, suppliers and others having business
dealings with it to the end that its goodwill and ongoing business shall not be
impaired in any material respect at the Closing Date. For the avoidance of
doubt, it is understood that, subject to the limitations on investment,
dispositions and incurrence of indebtedness in subsections (f), (g) and (k)
below, the pursuit of and consummation by the Contributed Entities of strategic
partnerships, joint ventures, acquisitions and similar activities and
investments shall be considered to be in the "ordinary course" for the
Contributed Entities if, in each case, such activities and investments are
ancillary to the sale or lease of, or the provision of service or capacity via,
transponders by the Contributed Entities.

                         (b) Dividends; Changes in Capital Stock. None of the
Contributed Entities shall: (i) declare, set aside or pay any dividends on or
make other distributions (whether in cash, securities or property or any
combination thereof) in respect of any class or series of its capital stock,
except for non-cash dividends in respect of preferred stock, or cash dividends
or distributions paid on or with respect to the capital stock of a wholly owned
Subsidiary; (ii) split, combine, subdivide or reclassify any of its capital
stock or issue or authorize or propose the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital stock; or
(iii) repurchase, redeem or otherwise acquire, or permit any Subsidiary to
purchase or otherwise acquire, any shares of the capital stock or other
securities of HCI or any of its Affiliates.

                         (c) Issuance of Securities. Other than as provided or
allowed herein and except as set forth on Schedule 7.2(c) or pursuant to the
exercise of Options, none of the Contributed Entities shall issue, pledge or
sell, or authorize the issuance, pledge or sale of additional shares of capital
<PAGE>
stock of any class, or securities convertible into capital stock of any class,
or any rights, warrants or options to acquire any convertible securities or
capital stock, or any other securities in respect of, in lieu of, or in
substitution for, shares of common stock outstanding on the date hereof or (ii)
amend, waive or otherwise modify any of the terms of any option, warrant or
stock option plan of it. Except as otherwise contemplated hereby, HCI will make
no transfer of the capital stock of any of the Contributed Entities, whether to
an Affiliate or otherwise.

                         (d) Governing Documents. None of the Contributed
Entities shall amend or propose to amend their respective Certificates or
Articles of Incorporation or Bylaws.

                         (e) No Spacecraft Acquisitions, Investments or Capital
Expenditures. Except as listed on Schedule 7.2(e), none of the Contributed
Entities shall (i) acquire or agree to acquire any satellite or other spacecraft
which a Contributed Entity has not, on the date of this Agreement, previously
agreed in writing to acquire, or (ii) except as required pursuant to Section
7.24, make one or more investments or capital expenditures exceeding $35,000,000
in the aggregate in any twelve month period for all such investments or
expenditures that occur from the date hereof; provided, however, that any
Contributed Entity may replace any satellite lost in a launch or in orbit.

                         (f) No Dispositions. Other than as contemplated hereby
and other than dispositions in the ordinary course of business consistent with
past practice which are not material in the aggregate to the Galaxy Business,
HCI shall not, and shall not permit any of its Subsidiaries to, sell, pledge,
lease, dispose of, encumber or otherwise authorize the sale, disposition, grant,
encumbrance, lease (whether such lease is an operating or capital lease) of any
of the assets related to the Galaxy Business.

                         (g) No Dissolution, Etc. Except as otherwise permitted
or contemplated by this Agreement, HCI shall not authorize, recommend, propose
or announce an intention to adopt a plan of complete or partial liquidation or
dissolution of any of HCI or any of the Contributed Entities.

                         (h) Other Actions. None of the Hughes Parties will
voluntarily take, or permit any of their Subsidiaries voluntarily to take or
agree or commit voluntarily to take, any action that results in any of the
Hughes Parties' representations or warranties hereunder being untrue in any
material respect or in any of the Hughes Parties' covenants hereunder or any
other conditions to the Asset Contribution, the Univisa Contribution or the
Merger not being satisfied in all material respects. Notwithstanding the
foregoing, no action permitted by this Section 7.2 or contemplated by this
Agreement shall be construed to have caused a breach of a representation or
warranty contained herein.

                         (i) Certain Employee Matters. Except as described on
Schedule 7.2(i), HCI shall not permit any of the Contributed Entities or any of
their Subsidiaries to: (A) grant any increases in the compensation or fringe
benefits of any of its directors, officers, or key employees; (B) pay or agree
to pay any pension, retirement allowance, severance, termination or other
employee benefit not required or contemplated by any of the existing Galaxy
ERISA Plans or Galaxy Benefit Arrangements as in effect on the date hereof to
<PAGE>
any such director, officer or key employee, whether past or present; (C) other
than with respect to new hires consistent with past practice enter into any new,
or materially amend any existing, employment or severance or termination
agreement with any such director, officer or key employee; or (D) establish,
adopt, enter into, or amend any collective bargaining, bonus, profit sharing,
thrift, compensation, stock option, restricted stock, pension, retirement,
savings, welfare, deferred compensation, employment, termination, severance or
other employee benefit plan, agreement, trust, fund, policy or arrangement for
the benefit or welfare of any directors, officers or current or former
employees, except in each case (i) to the extent required by applicable law or
regulation, (ii) pursuant to collective bargaining agreements as in effect on
the date of this Agreement, (iii) for normal increases and bonuses to officers
and key employees consistent with past practice or other agreements which HCI
believes are necessary for the continued conduct of the Galaxy Business in the
ordinary course, or (iv) for amendments to Galaxy ERISA Plan(s) or Galaxy
Benefit Arrangement(s) which have been disclosed to PAS prior to the execution
of this Agreement or which would not materially increase the cost of benefits to
the Galaxy Business, in the aggregate.

                         (j) Indebtedness. Except (i) as set forth on Schedule
7.2(j) and (ii) as incurred, guaranteed or created in connection with financing
the transactions contemplated hereby, HCI shall not permit any of the
Contributed Entities or any of their Subsidiaries to assume, incur or pre-pay
any indebtedness for borrowed money or guarantee any such indebtedness or issue
or sell any debt securities or warrants or rights to acquire any debt securities
of such party or any of its Subsidiaries or guarantee any debt securities of
others or enter into any lease other than in the ordinary course (whether such
lease is an operating or capital lease), or create any mortgages, liens,
security interests or other encumbrances on the property of the Galaxy Business
in connection with any indebtedness thereof, or enter into any "keep well" or
other agreement or arrangement to maintain the financial condition of another
person; provided that any of the Contributed Entities may enter into any such
"keep well" agreement or arrangement if the payment of the full amount of the
obligation represented by such agreement could then be made under Section
7.2(e).

                         (k) Agreements. Except as permitted by Section 7.2(e)
or as otherwise contemplated by this Agreement, HCI shall not permit any of the
Contributed Entities or any of their Subsidiaries to enter into, materially
modify, rescind, terminate, waive, release or otherwise amend any of the terms
or provisions of any Material Contract, other than in the ordinary course of
business consistent with past practice.

                         (l) Accounting. HCI shall not permit any of the
Contributed Entities or any of their Subsidiaries to take any action, other than
in the ordinary course of business, consistent with past practice or as required
by the SEC or by law, to effect any material change in any of its current
accounting policies, procedures and practices.

                         (m) Payment of Claims. HCI shall not permit any of the
Contributed Entities or any of their Subsidiaries to pay, discharge or satisfy
any material claims, liabilities or obligations (absolute, accrued, asserted,
unasserted, contingent or otherwise), other than such payment, discharge or
satisfaction in the ordinary course of business and consistent with past
practice.
<PAGE>
                         (n) Waivers and Payments. HCI shall not permit any of
the Contributed Entities or any of their Subsidiaries to, other than in the
ordinary course of business and consistent with past practice, waive any rights
of substantial value or make any payment, direct or indirect, of any material
liability before the same comes due in accordance with its terms, except to the
extent (and only to the extent) to which HCI or any of the Contributed Entities
receives equivalent value in exchange for such waiver or payment.

                         (o) Insurance. HCI shall not permit any of the
Contributed Entities or any of their Subsidiaries to fail to maintain its
existing insurance coverage of all types in effect with respect to the Galaxy
Business or, in the event any such coverage shall be terminated or lapse, to the
extent available at reasonable cost, procure substantially similar substitute
insurance policies which in all material respects are in at least such amounts
and against such risks as are currently covered by such policies.
Notwithstanding the foregoing, HCI shall not permit any of the Contributed
Entities to renew any spacecraft insurance policy other than at the best
available rate after competitive bidding.

                         (p) Affiliate Transactions. Except as set forth on
Schedule 7.2(p), HCI shall not permit any of the Contributed Entities or any of
their Subsidiaries to engage in any transaction with, or enter into any
agreement, arrangement, or understanding relating to the Galaxy Business with,
directly or indirectly, any of such entity's affiliates (as defined in Rule
12(b)-2 under the Exchange Act) which involves the transfer of consideration or
has a financial impact on such entity, other than pursuant to such agreements,
arrangements, or understandings (i) existing on the date of this Agreement (all
of which such agreements are considered to be Material Contracts for purposes of
Section 6.15) (ii) which are done on terms that the Board of Directors of the
relevant Contributed Entity determines in good faith to be equal to, or more
favorable to such Contributed Entity, than the terms such entity would be able
to obtain from third parties in similar transactions and/or for similar goods or
services or (iii) which are permitted by Section 7.2(n) hereof involving HCI or
any of the Contributed Entities and any of their respective Subsidiaries.

                         (q) Galaxy Permits. Except for (i) Permits listed on
Schedule 6.6(b) which are indicated on such schedule to be subject to
termination by the FCC upon the launch of another satellite into the location
where certain Galaxy Satellites now are operating, and (ii) Permits which lapse
or expire due to ordinary course changes in the Galaxy Business, HCI shall not
permit any of the Contributed Entities or any of their Subsidiaries to
surrender, allow to expire or be terminated, modify adversely, forfeit, or fail
to renew or extend under regular terms any of the Galaxy Permits issued by the
FCC (other than those related to Galaxy Ground Stations), or give the FCC or
other Government Entity with jurisdiction any grounds to institute any
proceeding for the revocation, suspension, or adverse modification of any Galaxy
Permit issued by the FCC. Should the FCC or other Government Entity with
jurisdiction institute any proceedings for the suspension, revocation or adverse
modification of any such Galaxy Permits, HCI shall cause the Contributed Entity
to use commercially reasonable efforts to promptly contest such proceedings and
to seek to have such proceedings terminated in a manner that is favorable to
such entities.
<PAGE>
                         (r) Construction Permits and Applications. HCI shall
cause the Contributed Entity to use commercially reasonable efforts to maintain
each FCC construction Permit (if any) listed on Schedule 6.6(b) in effect until
the applicable construction projects are complete and will use commercially
reasonable efforts to avoid having any pending FCC application listed on
Schedule 6.6(b) be dismissed or denied, except where (i) the loss of such Permit
or pending application would not have a material adverse effect on the Galaxy
Business or (ii) the maintenance of any such Permit would require an expenditure
which would be in violation of subsection (e) above; provided, however, that
Galaxy may, prior to or in connection with the Closing, amend the applications
currently pending before the FCC for the Galaxy/Spaceway system in order to (i)
make HCI or one of its Affiliates the applicant for Ka-band satellites at the
following orbital locations: 49(Degree)W, 99(Degree)W, 101(Degree)W,
25(Degree)E, 54(Degree)E, 101(Degree)E, 111(Degree)E and 164(Degree)E, and (ii)
make Newco the applicant for the rest of the BSS and Ka-band satellites sought
in such application.

                         (s) Interference. HCI shall cause the Contributed
Entities to use their commercially reasonable efforts to protect the
transmissions to and from the Galaxy Satellites and the Galaxy Ground Stations
from interference from other radio communications facilities (existing or
proposed), to the extent that such interference is prohibited by FCC Rules or
inconsistent with rights accorded the Galaxy Satellites under the ITU's Radio
Regulations and shall promptly notify PAS of any actual or threatened
interference.

                         (t) No Restrictive Agreements. None of the Contributed
Entities shall enter into any contract, agreement, commitment, arrangement,
lease (including with respect to personal property), policy or other instrument
that (i) does not expire by the later of one (1) year after the date hereof or
six (6) months after the Closing or (ii) is not subject to termination by such
entity upon less than six months written notice to the other party thereto,
which in either case materially restricts or limits such entity's ability to
conduct its business or compete, including, without limitation, any restriction
on its right to sell, lease or otherwise provide services from available
transponder capacity to any person or entity for any purpose at any orbital
location and in any frequency band, any geographical, market segment, product
line or other industry limitation, or any exclusive or sole supply or vendor
arrangement or agreement. Nothing in this Section 7.2(t) shall preclude or
require any Contributed Entity from entering into agreements containing most
favored nation provisions, options for additional services or capacity, rights
of negotiation, or similar provisions, in each case in the ordinary course of
business.

                         (u) Additional Property. HCI shall cause one of the
Contributed Entities to acquire a leasehold interest, for a term of at least 30
years and otherwise on commercially reasonable terms and conditions, in and to
the real property on which are located the ground station and other improvements
currently owned by HCSS located off of East Garton Road in Castle Rock,
Colorado. In addition, such lease shall provide that any domestic or
international satellite arc shall not be blocked by any improvement or structure
on any adjoining land owned or controlled by HCSS, its successors and assigns.
HCI shall cause one of the Contributed Entities to continue to negotiate, on
commercially reasonable terms, for the acquisition of the fee interest of Texaco
Exploration and Production, Inc. in and to approximately 752 acres located off
Telegraph Road in Fillmore, California. In connection with the above mentioned
acquisitions, PAS and its counsel shall be delivered copies of any draft
<PAGE>
agreements and, from time to time, shall be advised of the status of these
matters. HCSS shall use best efforts (not involving the payment of money) to
obtain customary non-disturbance agreements from the superior lessors of the
lease described in item #2 of Schedule 6.17(b). Notwithstanding the foregoing,
HCSS may enter into the lease agreement described on Schedule 6.17(d) on
commercially reasonable terms and conditions.

                         (v) Certain Other Agreements. HCI shall not and shall
not permit any of the Contributed Entities or any of their Subsidiaries to enter
into any contract, commitment or arrangement, whether written or oral, to do any
of the acts prohibited by this Section 7.2 or to authorize, recommend, propose
or announce an intention to do the same.

                 7.3 Interim Operations of Newco.

                         (a) Except as contemplated by this Agreement, or with
the prior written consent of PAS, during the period from the date of this
Agreement to the Closing Date, Newco will conduct no operations and will
preserve intact its business organization. Without limiting the generality of
the foregoing and except as otherwise contemplated by this Agreement or in
connection with the financing of the cash portion of the consideration payable
in the Univisa Contribution and the Merger or the refinancing of indebtedness of
Newco, Galaxy or PAS, Newco will not, prior to the Closing Date, without the
prior written consent of PAS:

                              (i) adopt any amendment to its Certificate of
Incorporation or Bylaws; provided, that on or prior to the Closing Newco shall
amend its Certificate of Incorporation in form and substance reasonably
satisfactory to PAS, to provide for the protections set forth in Section 9.4(b)
herein;

                              (ii) issue, pledge or sell, or authorize the
issuance, pledge or sale of additional shares of capital stock of any class, or
securities convertible into capital stock of any class, or any rights, warrants
or options to acquire any convertible securities or capital stock, or any other
securities in respect of, in lieu of, or in substitution for, shares of common
stock outstanding on the date hereof;

                              (iii) declare, set aside or pay any dividend or
other distribution (whether in cash, securities or property or any combination
thereof) in respect of any class or series of its capital stock;

                              (iv) authorize, recommend, propose or announce an
intention to adopt a plan of complete or partial liquidation or dissolution;

                              (v) take, or agree to commit to take, any action
that would make any representation or warranty contained in Article VI hereof
inaccurate in any respect at, or as of any time prior to, the Closing Date; or

                              (vi) enter into a contract, commitment or
arrangement to do any of the foregoing, or to authorize, recommend, propose or
announce an intention to do any of the foregoing.
<PAGE>
                  7.4 Control of Galaxy and PAS. During the period from the date
of this Agreement and continuing until the Closing Date (the "Interim Period"),
control of the operations of PAS and its Subsidiaries shall remain with PAS and
control of the Galaxy Business shall remain with HCI and the Contributed
Entities. HCI agrees that neither it nor any of its Subsidiaries shall control,
direct, supervise, or attempt to control, direct or supervise, the operations of
PAS during this period. Likewise, the parties agree that neither PAS nor any of
its Subsidiaries shall control, direct, supervise, or attempt to control, direct
or supervise, the operations of the Galaxy Business during the Interim Period.
Notwithstanding anything in this Agreement to the contrary, no action shall be
taken hereunder constituting an assignment or transfer of control of an FCC
license, permit, authorization or application requiring the prior consent or
approval of the FCC without first obtaining such consent or approval.

                  7.5 Registration Statement and Proxy Statement/Prospectus.
Promptly following the date of this Agreement, HCI, Galaxy, Newco and PAS shall
cooperate and prepare, and PAS shall file with the SEC, the proxy statement with
respect to the meeting of the stockholders of PAS in connection with the PAS
Merger (the "Proxy Statement/Prospectus"), and HCI shall cause Newco to file
with the SEC one or more Registration Statements on appropriate forms under the
Securities Act and the Exchange Act with respect to the securities of Newco
issuable in connection with the Merger or in connection with the financing of
the cash portion of the consideration payable in the Univisa Contribution and
the Merger or the refinancing of indebtedness of Newco, the Contributed Entities
or PAS (each, a "Registration Statement"). The Proxy Statement/Prospectus will
be included in the Registration Statement filed with respect to the shares of
Newco Common Stock issuable in connection with the Merger. The respective
parties will cause the Proxy Statement/Prospectus and each Registration
Statement to comply as to form in all material respects with the applicable
provisions of the Securities Act, the Exchange Act and the rules and regulations
thereunder. Newco shall use commercially reasonable efforts, and each of the
Contributed Entities and PAS will cooperate with Newco, to have each
Registration Statement declared effective by the SEC as promptly as practicable
and to keep each Registration Statement effective as long as is necessary to
consummate the transactions contemplated hereunder. The respective parties
shall, as promptly as practicable, provide copies of any written comments
received from the SEC with respect to the Proxy Statement/Prospectus and/or each
Registration Statement to each other and advise each other of any verbal
comments with respect thereto received from the SEC. Newco shall use
commercially reasonable efforts to obtain, prior to the effective date of each
Registration Statement, all necessary state securities law or "blue sky" permits
or approvals required to carry out the transactions contemplated by such
Registration Statement and will pay all expenses incident thereto. Newco agrees
that the Proxy Statement/Prospectus and each amendment or supplement thereto at
the time of mailing thereof and at the time of the meeting of stockholders of
PAS, or, in the case of a Registration Statement and each amendment or
supplement thereto, at the time it is filed and becomes effective, will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided,
however, that the foregoing shall not apply to the extent that any such untrue
statement of a material fact or omission to state a material fact was made by
Newco in reliance upon and in conformity with written information concerning PAS
furnished to Newco by PAS, specifically for use in the Proxy
Statement/Prospectus. PAS agrees that the written information concerning PAS
<PAGE>
provided by it for inclusion in the Proxy Statement/Prospectus and each
amendment or supplement thereto, at the time of mailing thereof and at the time
of the meeting of stockholders of PAS, or, in the case of written information
concerning PAS provided by PAS for inclusion in a Registration Statement or any
amendment or supplement thereto, at the time it is filed and becomes effective,
will not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. No amendment or supplement to the Proxy Statement/Prospectus will be
made by PAS or Newco without the approval of the other parties hereto, which
shall not be unreasonably withheld. Newco will advise PAS, promptly after it
receives notice thereof, of the time when a Registration Statement has become
effective or any supplement or amendment has been filed, the issuance of any
stop order, the suspension of the qualification of the Newco Common Stock
issuable in connection with the transactions contemplated hereby for offering or
sale in any jurisdiction, or any request by the SEC for amendment of the Proxy
Statement/Prospectus or a Registration Statement or comments thereon and
responses thereto or requests by the SEC for additional information.

                  7.6 PAS Stockholders' Meeting. PAS will, as soon as
practicable following the date of this Agreement, take all action necessary in
accordance with applicable law and its Certificate of Incorporation and Bylaws
to promptly call, give notice of, convene and hold a PAS stockholders meeting
for the purpose of voting on this Agreement and the transactions contemplated
hereby. The Board of Directors of PAS shall, subject to its fiduciary duties,
recommend this Agreement's approval by its stockholders and PAS shall take all
lawful reasonable action to solicit such approval, including, without
limitation, timely mailing of the Proxy Statement/Prospectus, subject to the
provisions of Section 7.1(e); provided, however, that nothing in this sentence
shall modify or eliminate PAS' absolute obligations in the prior sentence.

                  7.7 Access to Information.

                         (a) Each party (but as to the Hughes Parties, only in
connection with the Galaxy Business) shall (and shall cause each of its
Subsidiaries to) afford to the officers, employees, accountants, counsel,
financing sources and other representatives of each other party reasonable
access, during normal business hours during the period prior to the Closing
Date, to all its properties, books, contracts, commitments and records and those
of its Subsidiaries (including any tax returns or other tax related information
pertaining to the party providing such information and its Subsidiaries) and,
during such period, each party shall (and shall cause each of its Subsidiaries
to) (but as to the Hughes Parties, only in connection with the Galaxy Business)
furnish promptly to each other party (i) a copy of each report, schedule,
registration statement and other document filed or received by such party or any
such Subsidiary during such period pursuant to requirements of federal
securities laws and (ii) all other information concerning the business,
properties and personnel of such party or any such Subsidiary as any other party
may reasonably request (including any tax returns or other tax related
information pertaining to any party or its Subsidiaries, as the case may be);
provided that, as to competitively sensitive information such as pricing or
<PAGE>
customer specific information, each party shall make such sensitive information
available only to the other parties' advisers, lawyers and accountants (who
shall maintain the confidentiality of such information consistent with the past
practices of the parties to this Agreement) but not to the other parties, and,
with respect to information protected by the attorney-client privilege, neither
party shall be obligated to make such information available to the other party
or its representatives. Each party agrees that it will not, and will cause its
representatives not to, use any information obtained pursuant to this Section
7.7 for any purpose unrelated to the consummation of the transactions
contemplated by this Agreement.

                         (b) A Confidentiality Agreement, dated as of July 19,
1996 between PAS and HE (the "Confidentiality Agreement"), shall apply with
respect to information furnished thereunder or hereunder and any other
activities contemplated thereby.

                 7.8 Confidentiality.

                         (a) Preservation of Confidentiality Preservation of
Confidentiality. In connection with the negotiation of this Agreement, the
preparation for the consummation of the transactions contemplated hereby and the
performance of obligations hereunder, each party acknowledges that it will have
access to confidential information relating to the other parties. The parties
shall treat such information as confidential, preserve the confidentiality
thereof and not disclose such information, except to their respective advisors
and consultants in connection with the transactions contemplated hereby. Each of
the parties agrees to maintain in confidence, and not to disclose to any third
party, any ideas, methods, developments, inventions, improvements and business
plans and information which are the confidential information of any other party.
If, however, confidential information is disclosed, the disclosing party shall
immediately notify each of the other parties in writing and take all steps
required to prevent further disclosure.

                         (b) Property Right in Confidential Information Property
Right in Confidential Information. Until the Closing Date, all confidential
information shall remain the property of the party who originally possessed such
information. In the event of the termination of this Agreement for any reason
whatsoever, each party shall return to the other parties all documents, work
papers and other material (including all copies thereof) obtained from such
parties in connection with the transactions contemplated hereby and will use
commercially reasonable efforts, including, without limitation, instructing its
employees and others who have had access to such information, to keep
confidential and not to use any such information, unless such information is
now, or is hereafter disclosed, through no act or omission of such party, in any
manner making it available to the general public. If any party is required by
any Law or order to disclose any confidential information, it shall provide the
other parties with prompt notice of such request so that such other parties may
seek an appropriate protective order or other appropriate remedy and/or waive
compliance with the provisions of this Agreement. If, in the absence of a
protective order or other remedy or the receipt of such a waiver, a party is
nonetheless compelled by Law or order to disclose confidential information, then
such party may disclose that portion of the confidential information which such
Law or order requires to be disclosed, provided that such party uses its
reasonable efforts to preserve the confidentiality of the information, whereupon
such disclosure shall not constitute a breach of this Agreement.
<PAGE>
                         (c) Termination of Agreement Termination of Agreement.
Subject to any Law, each party hereto shall, and shall cause their Subsidiaries,
Affiliates and representatives who obtain such information to, hold in
confidence all such non-public information until such time as such information
is otherwise publicly available, and, if this Agreement is terminated and if so
requested by another party, each party and its Affiliates will, and will cause
their Subsidiaries, Affiliates and representatives who obtain such information
to, deliver to such other party all documents, work papers and other material
(including copies extracts and summaries thereof) obtained by or on behalf of
any of them directly or indirectly as a result of this Agreement or in
connection herewith, whether so obtained before or after the execution hereof.

                 7.9 Legal Conditions, Filings and Consents.

                         (a) Each of the Hughes Parties and PAS will (i)
cooperate with one another in determining whether any actions or filings are
required in connection with obtaining any Government Entity approvals required
to consummate the transactions contemplated by this Agreement and the Univisa
Contribution Agreement (together with the "Collateral Agreements" thereunder),
the Principal Stockholders Agreement, the Newco Stockholders Agreement, the
Registration Rights Agreement, the Assurance Agreement, the Income Tax
Indemnification and Allocation Agreement and the DTH Option Purchase Agreement
(together, the "Related Agreements") (including, without limitation, furnishing
all information required under the HSR Act), (ii) cooperate with one another in
determining whether any actions, consents, approvals or waivers are required to
be obtained from any corporate or equivalent governing body of any party, any of
their Subsidiaries, or any stockholder of the foregoing, or whether any actions,
consents, approvals or waivers are required to be obtained from any third
parties, such as parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and the Related
Agreements, (iii) endeavor in good faith to take all such actions or make any
such filings, furnish information required in connection therewith, and seek in
a timely manner to obtain any such actions, consents, approvals or waivers and
(iv) promptly cooperate with and furnish information to each other in connection
with any such requirements imposed upon any of them or any of their Subsidiaries
in connection with the Univisa Share Contribution and the Merger and the other
transactions contemplated by this Agreement and the Related Agreements. Without
limiting the generality or effect of the foregoing, each of the Hughes Parties
and PAS will, and will cause its Subsidiaries to, take all commercially
reasonable actions necessary to obtain (and will cooperate with each other in
obtaining) in a timely manner any consent, authorization, order or approval of,
or any exemption by, any Government Entity or other public or private third
party, required to be obtained or made by such entity in connection with the
Asset Contribution, the Univisa Contribution, the Merger, this Agreement, any
Related Agreement or the taking of any action contemplated hereby or thereby.
Notwithstanding the foregoing, none of the parties shall be obligated hereby to
enter into any consent decree or settlement agreement in order to resolve any
such action.

                         (b) Without limiting the generality of the foregoing,
each party will, and each such party will cause their respective Subsidiaries
to, diligently take or cooperate in the taking of all steps reasonably necessary
or desirable and proper to prosecute expeditiously all requisite applications of
<PAGE>
HCI, the Contributed Entities and PAS to the FCC and all similar foreign
agencies seeking their consent to the transactions contemplated by this
Agreement and to obtain a determination by the FCC that the grant of the
applications made by HCI, the Contributed Entities and/or PAS to the FCC
including those described in Section 7.9(c) below will serve the public
interest, convenience and necessity. Each party will use commercially reasonable
efforts to resolve such objections, if any, which may be asserted with respect
to the transactions contemplated hereby and by all Related Agreements under any
law. In the event an administrative proceeding or suit is instituted challenging
the transactions contemplated hereby, each party will use commercially
reasonable efforts to resist or resolve such proceeding or suit consistent with
the terms of this Agreement. Each party will use commercially reasonable efforts
to take such action as may be required (i) by any Government Entity in order to
resolve such objections as it may have to the transactions contemplated hereby
or (ii) by any federal or state court of the United States, in any suit brought
by a private party or Government Entity challenging the transactions
contemplated hereby, in order to avoid the entry of any order which has the
effect of preventing the consummation of the transactions contemplated hereby on
terms consistent with the terms of this Agreement to take any action that is
likely to have a material adverse effect on it.

                         (c) Within fifteen (15) days after the date hereof, the
parties will file one or more requisite applications with the FCC requesting its
written consent to the transactions contemplated by this Agreement
(collectively, the "FCC Consent Application"). To the extent that any pending
applications for Permits have not been granted by the Closing Date, PAS, HCI or
a Contributed Entity, as the case may be, will immediately after closing, file
all necessary documents with the FCC or equivalent agencies to amend those
pending applications to reflect the consummation of the Asset Contribution, the
Univisa Contribution and the Merger. In addition, to the extent that the Asset
Contribution, the Univisa Contribution and the Merger will result in a change in
ownership or control of an applicant for a Galaxy FCC Permit or a PAS FCC Permit
that requires, under FCC Rules, that a major amendment be filed by that
applicant after the Closing Date, within fifteen (15) days after the date
hereof, HCI, a Contributed Entity or PAS, as appropriate, will file or cause to
be filed by one of its Affiliates all appropriate documents requesting that the
FCC exempt such a major amendment from any applicable "cut off" date and will
also file such requests for any other required waivers of the FCC's rules and
policies as to which the parties may agree. HCI, the Contributed Entities and
PAS shall coordinate with each other prior to making any filings contemplated by
this Section 7.9(c).

                         (d) If and to the extent that any lease, license,
contract, commitment or other agreement, including, without limitation,
transponder lease agreements, which would otherwise be included within the
definition of "Galaxy Assets," or any claim, right or benefit arising thereunder
or resulting therefrom, is not capable of being transferred or conveyed to Newco
in the Asset Contribution without the approval, consent or waiver of the other
party thereto, and such approval, consent or waiver has not been obtained prior
to the Closing, or if such transfer or conveyance would constitute a breach
thereof, Galaxy or HCSS, as the case may be, shall hold such asset for the
exclusive benefit of PAS and shall either obtain such consent or approval or
provide PAS with the rights and benefits of the affected lease, license,
contract, commitment, or other agreement for the term of such lease, license,
<PAGE>
contract, commitment or other agreement; provided that PAS shall assume the
obligations and burdens thereunder.

                 7.10 Indemnification and Insurance for Directors and Officers.

                         (a) From and after the Closing Date all rights to
indemnification now existing in favor of individuals who at or prior to the
Closing Date were directors or officers of any of the Contributed Entities,
Newco or PAS or any of their respective Subsidiaries as set forth in their
respective organizational documents shall survive the Asset Contribution, the
Univisa Contribution and the Merger with respect to matters existing or
occurring at or prior to the Closing Date and shall continue in full force and
effect for a period of five years following the Closing Date.

                         (b) Each of HCI, the Contributed Entities, Newco and
PAS shall, and from and after the Closing Date, Newco shall indemnify, defend
and hold harmless each person who is now, or has been at any time prior to the
date hereof or who becomes prior to the Closing Date, an officer or director of
HCI, any Contributed Entity, Newco or PAS or any of their respective
Subsidiaries (each individually an "Indemnified Person" and, collectively, the
"Indemnified Persons") against all losses, claims, damages, costs, expenses
(including attorneys' fees and expenses), liabilities or judgments or amounts
that are paid in settlement with the approval of the Indemnified Person (which
approval shall not be unreasonably withheld) as a result of or in connection
with any threatened or actual claim, action, suit, proceeding or investigation
based in whole or in part on or arising in whole or in part out of the fact that
such person is or was a director or officer of HCI, any Contributed Entity,
Newco or PAS or any of their respective Subsidiaries or out of or in connection
with activities in such capacity, whether pertaining to any matter existing or
occurring at or prior to the Closing Date and whether asserted or claimed prior
to, or at or after, the Closing Date ("Indemnified Liabilities"), including all
Indemnified Liabilities based in whole or in part on, or arising in whole or in
part out of, or pertaining to this Agreement or the transactions contemplated
hereby, in each case to the full extent a corporation is permitted under the
corporate law of the state in which it is incorporated to indemnify any such
person and, without limiting the generality or effect of the foregoing, to the
fullest extent provided in the respective organizational documents of HCI, the
Contributed Entities, Newco and PAS and their respective Subsidiaries as in
effect on the date hereof. Newco will pay expenses in advance of the final
disposition of any such action or proceeding to each Indemnified Person to the
fullest extent permitted by law and, without limiting the generality or effect
of the foregoing, to the fullest extent provided in the respective
organizational documents of HCI, the Contributed Entities, Newco and PAS and
their respective Subsidiaries as in effect on the date hereof. Without limiting
the generality or effect of the foregoing, in the event any such claim, action,
suit, proceeding or investigation is brought against any Indemnified Persons
(whether arising before or after the Closing Date), (i) the Indemnified Persons
may retain counsel reasonably satisfactory to HCI or PAS, or from and after the
Closing, Newco, and HCI or PAS shall, or from and after the Closing, Newco
shall, pay all fees and expenses of such counsel for the Indemnified Persons
promptly as statements therefore are received and (ii) HCI or PAS shall, or from
and after the Closing, Newco shall use all reasonable efforts to assist in the
vigorous defense of any such matter, provided that none of HCI or PAS, or from
and after the Closing, Newco shall be liable for any settlement effected without
<PAGE>
its prior written consent, which consent shall not unreasonably be withheld. Any
Indemnified Party wishing to claim indemnification under this Section 7.10, upon
learning of any such claim, action, suit, proceeding or investigation, shall
notify HCI or PAS, or from and after the Closing, Newco (but the failure so to
notify shall not relieve a party from any liability which it may have under this
Section 7.10 except and only to the extent such failure materially prejudices
such party), and shall deliver to HCI or PAS, or from and after the Closing,
Newco, any undertaking contemplated or required by the corporate law of its
state in which it is incorporated. The Indemnified Persons as a group may retain
only one law firm to represent them with respect to each such matter unless
there is, in the opinion of counsel to an Indemnified Person, under applicable
standards of professional conduct, a conflict on any significant issue between
the positions of any two or more Indemnified Persons or unless different
defenses may exist. Each of HCI, the Contributed Entities, Newco and PAS agrees
that all rights to indemnification, including provisions relating to advances of
expenses incurred in defense of any action or suit, existing in favor of the
Indemnified Persons with respect to matters occurring through the Closing Date,
shall survive the Asset Contribution, the Univisa Contribution and the Merger
and shall continue in full force and effect for a period of not less than four
years from the Closing Date; provided, however, that all rights to
indemnification in respect of any Indemnified Liabilities asserted or made
within such period shall continue until the disposition of such Indemnified
Liabilities.

                         (c) For a period of five years after the Closing Date,
Newco will maintain in effect or replace with equivalent policies of directors'
and officers' liability insurance as maintained by HCI, the Contributed
Entities, Newco or PAS, as the case may be, and their respective Subsidiaries
with respect to matters arising before the Closing Date, provided that Newco
shall not be required to pay an annual premium for such insurance in excess of
175% of the last annual premium paid by HCI, a Contributed Entity, Newco or PAS,
as the case may be, prior to the date hereof, but in such case shall purchase as
much coverage as possible for such amount.

                         (d) The provisions of this Section 7.10 are intended to
be for the benefit of, and shall be enforceable by, each Indemnified Person, his
or her heirs and personal representatives and shall be binding on HCI, each
Contributed Entity, Newco, PAS and on all successors and assigns thereof. In the
event that Newco or any of its successors or assigns (i) reorganizes or
consolidates with or merges into any other person and is not the resulting,
continuing or surviving corporation or entity in such consolidation or merger or
(ii) liquidates, dissolves or transfers all or substantially all of its
properties and assets to any person, then, and in each such case, proper
provision will be made so that the successors and assigns of such surviving
corporations assume the obligations set forth in this Section 7.10.

                 7.11 Indemnification for Excluded and Contributed Liabilities.

                         (a) HCI agrees to indemnify, defend and hold harmless
Newco and each of its Subsidiaries and their respective successors-in-interest
against any losses, claims, damages or liabilities, joint or several, arising
out of or in connection with any loss, claim, damage or liability against or
pertaining to any Hughes Party and/or their Affiliates (other than Newco and its
Subsidiaries) other than the Galaxy Liabilities, and HCI shall reimburse Newco,
<PAGE>
each such Subsidiary and each such successor-in-interest (each, a "Newco
Indemnified Party") for any legal or any other expenses reasonably incurred by
any of them in connection with investigating or defending any such loss, claim,
damage or liability.

                         (b) Newco agrees to indemnify, defend and hold harmless
each of HCI and Galaxy and their Subsidiaries after the Closing, and their
respective successors-in-interest against any losses, claims, damages or
liabilities, joint or several, arising out of or in connection with the Galaxy
Liabilities assumed by Newco pursuant to the terms hereof, and Newco shall
reimburse HCI or Galaxy, as the case may be, and each of their Subsidiaries and
each such successor-in-interest (each, a "Hughes Indemnified Party") for any
legal or any other expenses reasonably incurred by any of them in connection
with investigating or defending any such loss, claim, damage, liability or
action.

                         (c) Whenever any claim shall arise for indemnification
under this Section 7.11, the Newco Indemnified Party or the Hughes Indemnified
Party, as the case may be (in either case, an "Indemnified Party"), shall
promptly notify the other party providing such indemnification (an "Indemnifying
Party") in writing of such claim and, when known, the facts constituting the
basis for such claim (in reasonable detail). Failure by any Indemnified Party to
so notify the Indemnifying Party shall not relieve such Indemnifying Party of
any liability hereunder except to the extent that such failure materially
prejudices such Indemnifying Party.

                         (d) After the notice required by Section 7.11(c), if
the Indemnifying Party undertakes to defend any such claim, then the
Indemnifying Party shall be entitled, if it so elects, to take control of the
defense and investigation with respect to such claim and to employ and engage
attorneys of its own choice to handle and defend the same, at the Indemnifying
Party's cost, risk and expense, upon written notice to the Indemnified Party of
such election, which notice acknowledges such Indemnifying Party's obligation to
provide indemnification hereunder. The Indemnifying Party shall not settle any
third-party claim that is the subject of indemnification without the written
consent of the Indemnified Party, which consent shall not be unreasonably
withheld; provided, however, that the Indemnifying Party may settle a claim
without the Indemnified Party's consent if such settlement (i) makes no
admission or acknowledgement of liability or culpability with respect to such
Indemnified Party, (ii) includes a complete release of the Indemnified Party and
(iii) does not require the Indemnified Party to make any payment or forego or
take any action. The Indemnified Party shall cooperate in all reasonable
respects with the Indemnifying Party and its attorneys in the investigation,
trial and defense of any lawsuit or action with respect to such claim and any
appeal arising therefrom (including the filing in the Indemnified Party's name
of appropriate cross-claims and counterclaims). The Indemnified Party may, at
its own cost, participate in any investigation, trial and defense of such
lawsuit or action controlled by the Indemnifying Party and any appeal arising
therefrom.

                         (e) If, after receipt of a claim notice pursuant to
Section 7.11(c), the Indemnifying Party does not undertake to defend any such
claim, the Indemnified Party may, but shall have no obligation to, contest any
lawsuit or action with respect to such claim and the Indemnifying Party shall be
bound by the result obtained with respect thereto by the Indemnified Party
(including, without limitation, the settlement thereof without the consent of
<PAGE>
the Indemnifying Party). If there are one or more legal defenses available to
the Indemnified Party that conflict with those available to the Indemnifying
Party, the Indemnified Party shall have the right at the expense of the
Indemnifying Party to assume the defense of the lawsuit or action; provided,
however, that the Indemnified Party may not settle such lawsuit or action
without the consent of the Indemnifying Party, which consent shall not be
unreasonably withheld.

                         (f) At any time after the commencement of defense of
any lawsuit or action, the Indemnifying Party may request the Indemnified Party
to agree in writing to the abandonment of such contest or to the payment or
compromise by the Indemnifying Party of such claim, whereupon such action shall
be taken unless the Indemnified Party determines that the contest should be
continued and so notifies the Indemnifying Party in writing within 15 days of
receipt of such request from the Indemnifying Party. If the Indemnified Party
determines that the contest should be continued, the Indemnifying Party shall be
liable hereunder only to the extent of the lesser of (i) the amount which the
other party(ies) to the contested claim had agreed to accept in payment or
compromise as of the time the Indemnifying Party made its request therefor to
the Indemnified Party or (ii) such amount for which the Indemnifying Party may
be liable with respect to such claim by reason of the provisions hereof.

                 7.12 Notices of Certain Events.

                         HCI and PAS shall promptly notify each other of:

                              (i) any notice or other communication from any
         person alleging that the consent of such person is or may be required
         in connection with the transactions contemplated by this Agreement;

                              (ii) any notice or other communication from any
         Government Entity in connection with the transactions contemplated by
         this Agreement;

                              (iii) any actions, suits, claims, investigations
         or proceedings commenced or, to the actual knowledge of the executive
         officers of the notifying party, threatened against, relating to or
         involving or otherwise affecting such party or any of its Subsidiaries;

                              (iv) an administrative or other order or
         notification relating to any material violation or claimed violation of
         Law;

                              (v) any facts of which it becomes aware relating
         to it that would cause the FCC to withhold or adversely determine any
         consent or ruling that the parties will be seeking pursuant to Section
         7.9(c) hereof;

                              (vi) the occurrence or non-occurrence of any event
         the occurrence or non-occurrence of which would cause any
         representation or warranty contained in this Agreement to be untrue or
         inaccurate in any material respect at or prior to the Closing Date;
<PAGE>
                              (vii) any facts of which it becomes aware with
         respect to any spacecraft related incidents or anomalies in connection
         with any Galaxy Satellite or any PAS Satellite; and

                              (viii) any material failure of any party to comply
         with or satisfy any covenant, condition or agreement to be complied
         with or satisfied by it hereunder;

provided, however, that the delivery of any notice pursuant to this Section 7.12
shall not limit or otherwise affect the remedies available hereunder to the
party receiving such notice.

                  7.13 Publicity. So long as this Agreement is in effect, the
parties will consult with each other and will mutually agree prior to the
issuance of any press release or public announcement pertaining to this
Agreement or the Related Agreements or the transactions contemplated hereby or
thereby, including the Merger and the Asset Contribution, and shall not issue
any such press release or make any such public announcement or permit any of
their Subsidiaries to do the same prior to such consultation and agreement,
except as may be required by applicable law or by obligations pursuant to any
listing agreement with a national securities exchange (including the Nasdaq
National Market), in which case the party proposing to issue such press release
or make such public announcement shall use reasonable efforts to consult in good
faith with the other party before issuing any such press release or making any
such public announcement, except for the FCC filings and HSR filings
contemplated herein.

                  7.14 Rule 145 Affiliates. At least 30 days prior to the
Closing Date, PAS shall deliver to Galaxy a letter identifying, to the best of
PAS' knowledge, all persons who PAS expects will be, at the time of PAS'
stockholder's meeting to consider the transactions contemplated by this
Agreement, deemed to be "affiliates" of PAS for purposes of Rule 145 under the
Securities Act ("PAS Affiliates"). PAS shall use its reasonable best efforts to
cause each person or entity who is identified as a PAS Affiliate to deliver to
HCI on or prior to the Closing Date an agreement substantially in the form of
Exhibit H to this Agreement.

                  7.15 Supplemental Disclosure Schedules. Each of HCI, Galaxy
and PAS shall supplement their respective Schedules delivered in connection with
this Agreement as of the Closing Date to the extent necessary to reflect matters
permitted by, or consented to by, the other parties under this Agreement. In
addition, from time to time prior to the Effective Time, each of HCI and PAS
will promptly deliver to the other parties such amended or supplemental
Schedules as may be necessary to make the Schedules accurate and complete in all
material respects as of the Closing Date; provided, however, that updating the
information contained on the Schedules shall not be deemed an amendment of this
Agreement unless the new information added to any such schedule reflects changes
or actions taken since the date of this Agreement that are permitted under
Section 7.1 (with respect to PAS) and Section 7.2 (with respect to Galaxy). If
not deemed an amendment, such supplement shall not have any effect for the
purpose of determining the satisfaction of the conditions set forth in Article
VIII of this Agreement.
<PAGE>
                  7.16 Newco Employee Benefits Arrangements.

                         (a)      Replacement of Retirement Plan.

                              (i) The accrued benefits and liabilities, and
assets attributable to such accrued benefits and liabilities, under the HE
Non-Bargaining Retirement Plan, and the trust related thereto (the "HE
Retirement Plan"), of participants in such plan who are actively employed by the
Galaxy Business immediately prior to the Effective Time, who have not retired
under the HE Retirement Plan as of the Effective Time and who become employees
of Newco effective as of the Effective Time or within 90 days thereafter (the
"Transferred Retirement Plan Participants") shall, unless otherwise agreed to by
PAS and HE, be transferred to a new trust under a separate plan established by
Newco for the Transferred Retirement Plan Participants and other Newco
employees, as hereinafter set forth. Newco shall, with the cooperation of HE,
use its best efforts to accomplish the transfer of the foregoing assets and
liabilities.

                              (ii) Effective as of the Effective Time, Newco
shall, unless otherwise agreed to by PAS and HE, establish a separate plan (the
"Newco Retirement Plan") which shall be qualified under Section 401(a) of the
Code and a trust related thereto which shall be exempt from taxation under
Section 501(a) of the Code. The Newco Retirement Plan shall be a defined benefit
cash balance plan, or other type of retirement plan agreed to by PAS and HE. To
the extent permitted by applicable law, credit for past service with the Galaxy
Business or PAS prior to the Effective Time shall be given under the Newco
Retirement Plan for the purposes of vesting and eligibility to participate. The
Newco Retirement Plan shall, unless otherwise agreed to by PAS and HE, contain
provisions for future contributions at a rate of 3 - 3 1/2% of the compensation
of the participating Newco employees after the Effective Time.

                              (iii) The transfer of assets and liabilities from
the HE Retirement Plan to the Newco Retirement Plan shall be conditioned upon
the receipt of requisite governmental approvals. Newco shall submit to the
Internal Revenue Service a request for a determination letter as to the tax
qualification and exempt status of the Newco Retirement Plan. Upon receipt by
Newco and HE of such determination letter, or an opinion of counsel reasonably
acceptable to HE and PAS, that the Newco Retirement Plan is tax qualified and
exempt, HE and Newco shall file promptly with the Internal Revenue Service any
required notice on Forms 5310-A regarding the transfer of assets and liabilities
relating to the Transferred Retirement Plan Participants from the HE Retirement
Plan to the Newco Retirement Plan. After proper notice has been given on Forms
5310-A without receiving an adverse response from the appropriate governmental
agencies, the assets of the HE Retirement Plan transferable to such Newco
Retirement Plan as provided herein shall be so transferred, but in no event
later than 90 days after the Forms 5310-A have been filed with the Internal
Revenue Service.

                              (iv) No assets and liabilities shall be
transferred unless the requirements of Section 414(l) of the Code are met with
respect to the transfer. Assets to be transferred from the HE Retirement Plan to
the Newco Retirement Plan shall be in cash. After the transfer of assets and
liabilities, the payment of benefits accrued under the HE Retirement Plan prior
<PAGE>
to the Effective Time and payable to the Transferred Retirement Plan
Participants shall be the sole responsibility of Newco.

                              (v) The amount of plan assets to be transferred
from the HE Retirement Plan to the Newco Retirement Plan shall be an amount
determined by subtracting (B) from (A), where (A) as of the Effective Time
equals the actuarially computed present value of all accrued benefits
attributable to the Transferred Pension Plan Participants, determined on an
ongoing plan basis employing the same actuarial assumptions as were used in
determining plan funding for the most recently completed plan year, and where
(B) is any benefit payment attributable to accrued benefits to be transferred to
and assumed under the Newco Retirement Plan, made after the Effective Time and
prior to the transfer of plan assets and accompanying liabilities. The
transferred assets shall exclude any receivable contributions. The amount of
assets transferred in connection with the foregoing accrued benefits and
liabilities shall not be less than the assets necessary to fund the accrued
benefits and liabilities that would be transferred using the appropriate plan
termination assumptions of the Pension Benefit Guaranty Corporation ("PBGC")
under Section 414(l) of the Code.

                              (vi) The amount of the accrued benefits and
liabilities and assets attributable thereto to be transferred from the HE
Retirement Plan to the Newco Retirement Plan in accordance with this Section
7.3(b) shall be jointly determined by actuaries selected by Newco and HE. In the
event of dispute between the actuaries selected by Newco and HE as to whether
the actuarial calculations so determined are calculated in accordance with this
Section 7.3(b), Newco and HE shall jointly select a third actuarial firm of
national repute to review the calculation and the determination of the third
actuarial firm shall be final and binding. In the event that Newco and HE are
unable to select a third actuarial firm, an arbitrator shall appoint a third
actuarial firm to make such determination, which appointment and determination
shall be final and binding upon HE and Newco. Such arbitrator shall be appointed
in accordance with the Commercial Arbitration Rules of the Los Angeles,
California office of the American Arbitration Association. Newco shall pay the
cost of the Newco's actuaries, HE shall pay the cost of HE's actuaries and, to
the extent necessary, the cost of the third actuarial firm and arbitrator shall
be shared equally between Newco and HE.

                         (b) Replacement of Savings Plan.

                              (i) The accounts and account balances and
liabilities under the HE Salaried Employees' Thrift and Savings Plan and the
trust related thereto (the "HE Savings Plan") and the Advantage Benefits
Consultants Inc. Regional Prototype Defined Contribution Plan and Trust (the
"PAS Savings Plan") of active participants of such plans who become employees of
Newco as of the Effective Time or within 90 days thereafter and former
participants of the PAS Savings Plan, including without limitation retired
participants and former participants entitled to deferred vested benefits and
beneficiaries thereof under the PAS Savings Plan ("Transferred Savings Plan
Participants"), shall, unless otherwise agreed to by PAS and HE, be transferred
to a new trust under a separate plan established by Newco for the Transferred
Savings Plan Participants and other Newco employees effective as of the
Effective Time, either in a direct trust-to-trust transfer or in participant
directed rollover distributions as hereinafter set forth. Newco shall, with the
<PAGE>
cooperation of HE, use its best efforts to accomplish the transfer of the
foregoing assets and liabilities.

                              (ii) Effective as of the Effective Time, Newco
shall establish a defined contribution pension plan (the "Newco Savings Plan")
which shall be qualified under Sections 401(a) and (k) of the Code and a trust
related thereto which shall be exempt from taxation under Section 501(a) of the
Code. The Newco Savings Plan shall contain provisions comparable to and no less
favorable in the aggregate than the HE Savings Plan (other than the investment
in GMH stock and matching contribution features) and, subject to applicable law,
shall, unless otherwise agreed to by PAS and HE, provide for employer matching
contributions at a rate of 4% of compensation, which may, in the discretion of
Newco, be made in common stock of Newco, if the stock of Newco is publicly
traded. To the extent permitted by applicable law, credit for past service with
PAS and the Galaxy Business prior to the Effective Time shall be given under the
Newco Savings Plan for the purposes of vesting and eligibility to participate.

                              (iii) The transfer of assets and liabilities from
the HE Savings Plan and the PAS Savings Plan to the Newco Savings Plan shall be
conditioned upon the receipt of requisite governmental approvals. Newco shall
submit to the Internal Revenue Service a request for a determination letter as
to the tax qualification and exempt status of the Newco Savings Plan. Upon
receipt by Newco and HE of a determination letter from the Internal Revenue
Service, or an opinion of counsel reasonably acceptable to HE and PAS, that the
Newco Savings Plan is qualified under Section 401(a) and (k) of the Code, the
assets of the PAS Savings Plan and HE Savings Plan that are transferable to the
Newco Savings Plan as provided herein shall be so transferred, but in no event
later than 90 days after receipt by Newco and HE of such determination letter,
whichever occurs later.

                              (iv) No assets and liabilities shall be
transferred in a direct trust-to-trust transfer unless the requirements of
Section 414(l) of the Code are met with respect to the transfer. After the
transfer of assets and liabilities, the payment of benefits to the Transferred
Savings Plan Participants accrued under the HE Savings Plan and PAS Savings Plan
shall be the sole responsibility of Newco.

                         (c) Newco Stock Options. Newco shall provide stock
options to certain employees from and after the time that Newco's stock is
publicly held. As soon as practicable after execution of the Merger Agreement, a
committee shall be established which shall be composed of representatives of PAS
and HCI (the "Joint Committee"). The Joint Committee shall make recommendations
to the Board of Directors of Newco with regard to such stock options including,
but not limited to, the following: (i) the form of stock option offered, which
may be incentive stock options, nonqualified stock options, or a combination
thereof; (ii) eligibility requirements to receive such stock options; (iii)
vesting requirements; (iv) term of the stock options; (v) exercise price; and
(vi) the maximum number of shares to be offered through stock options, if
required by law. The Joint Committee shall make such recommendations, and take
all other actions necessary to carry out the requirements of this provision, by
the Effective Time. Any stock options issued by Newco shall be registered with
the applicable governmental agencies and shall comply with all applicable
securities laws. The Board of Directors of Newco shall act upon such
recommendations and, if necessary, obtain stockholder approval for the issuance
<PAGE>
of Newco stock pursuant to the options described herein.

                         (d) Retiree Medical Benefits. As soon as practicable
after the Effective Time, HCI or one of its Affiliates shall pay to all Galaxy
Employees who are being transferred to Newco, who have not retired under a
Galaxy retiree medical plan and who would be entitled to receive medical
benefits upon retirement under a Galaxy ERISA Plan (as defined in Section
6.9(c)(i)) or any other plan or policy maintained by the Galaxy Business, HCI or
one of its Affiliates, an amount of cash to be determined by HCI, after
consultation with PAS, but in no case shall such cash amount paid to each
employee be less than the cash amount to which the employee is legally entitled,
if any.

                         (e) PAS ERISA Plans and PAS Benefits Arrangements.
Prior to the Effective Time, PAS shall take all actions which are reasonably
necessary or appropriate to correct any material defects with respect to the
compliance of each PAS ERISA Plan and PAS Benefit Arrangement with all Laws,
including any actions which are reasonably necessary or appropriate to qualify
any PAS ERISA Plan that is intended to be tax qualified under Section 401(a) of
the Code.

                         (f) HCI Indemnification. HCI agrees to indemnify,
defend and hold harmless Newco and each of its Subsidiaries and their respective
successor(s)-in-interest against any losses, claims, damages or liabilities,
joint or several, arising from the Galaxy Business' participation in a
controlled group, as defined in Section 414(b), (c), (m), and (o) of the Code,
prior to the Effective Time except with respect to any losses, claims, damages
or liabilities relating to the Galaxy Employees, who will be employed by Newco
as of the Effective Time, the Galaxy ERISA Plans or the Galaxy Benefit
Arrangements.

                         (g) PAS Indemnification. PAS agrees to indemnify,
defend and hold harmless Newco and each of its Subsidiaries and their respective
successor(s)-in-interest against any losses, claims, damages or liabilities,
joint or several, arising from PAS' participation in a controlled group as
defined in Section 414(b), (c), (m) and (o) of the Code prior to the Effective
Time except with respect to any losses, claims, damages or liabilities relating
to PAS' employees who will be employed by Newco as of the Effective Time, the
PAS ERISA Plans or the PAS Benefit Arrangements.

                  7.17 Further Action. Each party hereto shall, subject to the
fulfillment at or before the Closing Date of each of the conditions of
performance set forth herein or the waiver thereof, perform such further acts
and execute such documents as may be reasonably required to effect the
transactions contemplated by this Agreement. Without limiting the generality of
the foregoing, if the consummation period for consummating the Asset
Contribution, the Univisa Contribution and the Merger pursuant to consents
granted by the FCC expires prior to the date established for the Closing Date,
then each party will use its commercially reasonable efforts to obtain one or
more extensions of the effectiveness of such consents so as to permit the
consummation of the transactions contemplated by this Agreement in accordance
with this Agreement. Each party hereto also agrees to cooperate with the other
parties hereto in connection with communicating with Government Entities in
<PAGE>
connection with obtaining approvals of such entity required to effectuate the
transactions contemplated hereby.

                  7.18 Documentation of Intercompany Agreements. On or prior to
the Closing Date, each Contributed Entity shall enter into written agreements to
document all previously undocumented arrangements with Affiliates of the
Contributed Entities for material goods or services provided to the Galaxy
Business, which new agreements shall be in form reasonably satisfactory to PAS
and in substance consistent with the description of such arrangements set forth
on Schedule 6.15.

                  7.19 Listing Application. Following execution of the
Agreement, Newco shall prepare and submit to the New York Stock Exchange or the
Nasdaq National Market a listing application covering the shares of Newco Common
Stock issuable in the Asset Contribution and the Merger, and shall use
reasonable efforts to obtain, prior to the Closing Date, approval for the
listing of such Newco Common Stock, subject to official notice of issuance.

                  7.20 Leveraged Lease Guarantee. Promptly following the
Closing, Newco shall enter into a customary agreement to pay and indemnify HE
for obligations arising under existing guarantees provided by HE of leveraged
leases of transponders used in the Galaxy Business.

                  7.21 Disposition of Assets. During the period from the date of
this Agreement and continuing until the Closing Date, HCI shall cause all
proceeds from any source with respect to the disposition (whether voluntary or
involuntary) of any asset or group of assets disposed of in related transactions
valued in excess of $60,000 (other than for satellites under construction)
included in the Galaxy Business (net of (i) all taxes that are paid prior to the
Closing as a result of such disposition if the Contributed Entity owning such
asset or assets was a stand-alone company, (ii) any liabilities related to such
asset or assets to the extent they no longer remain with the Galaxy Business and
were not already netted from the proceeds of such disposition, and (iii) any and
all reasonable transaction expenses (except normal recurring and operating
expenses of the Galaxy Business) related to such disposition) to be separately
identified and retained within the Closed System (as defined in Section 7.24)
(the "Proceeds").

                  7.22 Related Agreements. Each of the Parties to this Agreement
shall, and shall cause each of its Subsidiaries to, enter into and take all
actions necessary to consummate the transactions contemplated by each of the
Related Agreements to which it is a party, subject in each case to the terms and
conditions of each such Related Agreement.

                  7.23 Standstill Restriction. For five years following the
Closing, none of the Hughes Parties or their affiliates shall acquire, or come
to hold, beneficially or otherwise, whether by purchase, exchange or otherwise,
individually or in the aggregate more than eighty-one percent (81%) of the
outstanding equity interests in Newco, except (i) pursuant to a merger which is
approved by the holders of majority of the shares of Newco Common Stock not
owned directly or indirectly by HE or any of its affiliates, (ii) pursuant to a
tender offer recommended by the Disinterested Directors of Newco and second-step
<PAGE>
merger which offers the same per share consideration to all holders of Newco
Common Stock and in which more than half the outstanding Newco Common Stock not
owned by HCI and its affiliates at the inception of the transaction is either
tendered or voted in favor of the transaction, and (iii) except pursuant to such
other transaction as shall provide for parity of treatment of holders of Newco
Common Stock and is approved by the holders of a majority of the shares of
Common Stock not owned by HCI and its affiliates and by a majority of the
Disinterested Directors of Newco. As used in this Agreement, "Disinterested
Director" means a director of Newco that is not an existing or retired employee
of Newco or any of its affiliates. As used in this Section 7.23, "affiliate"
shall have the meaning set forth in Rule 12b-2 under the Securities Exchange Act
of 1934, as amended.

                  7.24 Capital Expenditures and the Closed System for Cash
Management. Commencing as of July 1, 1996, HE will cause the Galaxy Business to
operate as a separate stand-alone entity with respect to all aspects of its cash
management including retention of the cash receipts and proceeds from all
sources of the business together with the payment of all necessary operating
expenses of the business (excluding non-cash outlays for expenses such as
depreciation and amortization) and capital outlays (including those expenses and
capital outlays that are directly attributable to the business but which may,
for convenience purposes, be paid by HE and redistributed to the Galaxy
Business). The Galaxy Business will also be responsible for the payment of all
properly allocated costs of the Galaxy Business, including its allocated share
of corporate and sector "General & Administrative" costs consistent with the
past accounting practices of the Galaxy Business. The Galaxy Business will
compute an income tax provision for the taxable earnings of the business in
accordance with GAAP and will provide for the appropriate income taxes of the
business including the determination and recognition of necessary deferred tax
amounts (which deferred tax amounts may not be deducted as cash expenses). The
aforementioned practices will constitute a "Closed System" of cash management.
It is explicitly understood that HCI will be required to use cash proceeds
retained in the business (other than Proceeds which may not be used for such
purpose and which shall be part of the "Galaxy Assets" at the Closing) to fund
additions to its "Capital Expenditures for Satellites Under Construction"
accounts. For purposes of this Agreement, "Capital Expenditures for Satellites
Under Construction" shall include manufacturing, launch and launch insurance,
progress payments and capitalized interest amounts. HCI, with the assistance of
HE, will continue to manage and pursue its capital expenditures program for the
construction and development of satellites during the period from July 1, 1996
through the Closing as it deems necessary in the ordinary course of its business
and consistent with prudent business practices. To the extent that additions to
HCI's "Capital Expenditures for Satellites Under Construction" accounts as
determined on a consistent basis and in accordance with GAAP and HCI's
historical accounting practices and procedures, during the period from July 1,
1996 through the Closing of the Merger do not equal or exceed $575 million in
the aggregate, HE shall be obligated to make up any difference in cash at the
Closing.

                                  ARTICLE VIII
                                   CONDITIONS

                  8.1 Conditions to Each Party's Obligation to Effect the Asset
Contribution, the Univisa Contribution and thConditions to Each Party's
<PAGE>
Obligation to Effect the Asset Contribution, the Univisa Contribution and the
Merger. The respective obligations of each party to effect the Asset
Contribution, the Univisa Contribution and the Merger shall be subject to the
satisfaction on or prior to the Closing Date (or, if permissible, waiver by the
party for whose benefit such conditions exist) of the following conditions:

                         (a) No Order. No Government Entity shall have enacted,
issued, promulgated, enforced or entered any statute, rule, regulation or order
(whether temporary, preliminary or permanent) which is in effect and which
materially restricts, prevents or prohibits consummation of the transactions
contemplated by this Agreement or any of the Related Agreements; provided,
however, that the parties shall use their commercially reasonable efforts to
cause any such decree, judgment, injunction or other order to be vacated or
lifted.

                         (b) Stockholder Approval. This Agreement and the
transactions contemplated hereby shall have been approved in the manner required
by applicable law or by the applicable regulations of any stock exchange or
other regulatory body, as the case may be, of the holders of the issued and
outstanding shares of common stock of PAS.

                         (c) HSR Act. Any waiting period applicable to the
consummation of the transactions contemplated hereby under the HSR Act shall
have expired or been terminated, and no action shall have been instituted by the
Department of Justice or the Federal Trade Commission challenging or seeking to
enjoin the consummation of the transactions contemplated hereby, which action
shall not have been withdrawn by the party instituting such action or dismissed
or terminated pursuant to a final, non-appealable judgment of a United States
federal court.

                         (d) FCC Consents. (i) The FCC shall have granted by
Final Order the FCC Consent Application, without conditions, qualifications or
other restrictions that are likely to have a material adverse effect immediately
after the Closing Date, on Newco or any of its Subsidiaries (other than the loss
of pending applications at the FCC for Permits), whether imposed by the FCC or
any other Government Entity; and (ii) except for Permits which lapse, expire or
are terminated due to ordinary course changes in the business of PAS and the
Galaxy Business, as the case may be, except as otherwise contemplated by this
Agreement, each of the PAS Permits and the Galaxy Permits issued by the FCC
shall be in full force and effect, unimpaired by any acts or omissions of
Galaxy, PAS or their officers, directors, employees or agents. As used in this
Agreement, the term "Final Order" means an order, action or decision of a
Government Entity that has not been reversed, stayed or enjoined and as to which
the time to appeal, petition for certiorari or seek reargument or rehearing or
administrative reconsideration or review has expired and as to which no appeal,
reargument, petition for certiorari or rehearing or petition for reconsideration
or application for review is pending or as to which any right to appeal,
reargue, petition for certiorari or rehearing or reconsideration or review has
been waived in writing by each party having such a right or, if any appeal,
reargument, petition for certiorari or rehearing or reconsideration or review
thereof has been sought, the order or judgment of the court or agency has been
affirmed by the highest court (or the administrative entity or body) to which
the order was appealed or from which the argument or rehearing or
reconsideration or review was sought, or certiorari has been denied, and the
time to take any further appeal or to seek certiorari or further reargument or
rehearing, or reconsideration or review, has expired. Notwithstanding the
<PAGE>
foregoing, HCI shall have the unilateral right within 60 days after public
notice of such order, action or decision by the FCC to elect to waive this
condition if HCI determines, in its sole discretion, that any pending appeal is
not likely to have a material adverse effect on Newco and its Subsidiaries,
taken as a whole, following the Asset Contribution, the Univisa Contribution and
the Merger; provided that, if HCI fails to waive this condition within such
60-day period, then either party shall have the right to terminate this
Agreement.

                         (e) Other Satellite Approvals. Each Government Entity
other than the FCC that has issued to PAS or any of its Subsidiaries (i) any
Permit with respect to the operation of or transmission to or from a PAS
Satellite or a ground station that communicates with a PAS Satellite (ii) any
Permit with respect to the provision of broadcasting or communications services
shall have, where required by applicable Law, approved the transfer of control
or assignment, as applicable, of all such Permits as a result of the Merger
without any material qualifications, restrictions or limitations and such
approval shall have become a Final Order. Each Government Entity that has issued
to any of the Contributed Entities (i) any Permit with respect to the operation
of or transmission to or from a Galaxy Satellite or a ground station that
communicates with a Galaxy Satellite, or (ii) any Permit with respect to the
provision of broadcasting or communications services shall have, where required
by applicable Law, approved the transfer of control or assignment, as
applicable, of all such permits as a result of the Asset Contribution without
any material qualifications, restrictions or limitations and such approval shall
have become a Final Order.

                         (f) Other Approvals. All other approvals or orders by
Government Entities required to be obtained, and all filings, notices or
declarations required to be made before any Government Entity (other than the
FCC), by any party prior to the consummation of the transactions contemplated
hereunder shall have been obtained from, and made with, all required Government
Entities except for such authorizations, consents, waivers, orders, approvals,
filings, notices or declarations, the failure to obtain or make which would not
be likely to have a material adverse effect at or after the Closing Date, on
Newco or any of its Subsidiaries.

                         (g) Registration Statement. The Registration Statement
with respect to the shares of Newco Common Stock issuable in connection with the
Merger shall have become effective and shall be effective at the Effective Time,
and no stop order suspending effectiveness of such Registration Statement shall
have been issued, no action, suit, proceeding or investigation by the SEC to
suspend the effectiveness thereof shall have been initiated and be continuing,
or, to the knowledge of HCI or PAS, threatened, and all necessary approvals
under state securities laws relating to the issuance or trading of the shares of
Newco Common Stock to be issued in connection with the Merger shall have been
received.

                         (h) Related Agreements. Each of the Related Agreements
shall have been executed, delivered and, to the extent required to be performed
by such agreements on or prior to the Closing Date, performed (or capable of
being performed concurrently with consummation of the transactions contemplated
hereby) by the parties thereto.
<PAGE>
                         (i) Listing Application. The shares of Newco Common
Stock issuable in the Merger shall have been approved, upon official notice of
issuance, for listing on either the New York Stock Exchange or the Nasdaq
National Market.

                  8.2 Additional Conditions to Obligations of PAS. The
obligation of PAS to effect the transactions contemplated hereby is subject to
the satisfaction of the following conditions, any or all of which may be waived
in whole or in part by PAS:

                         (a) Representations and Warranties. Each of the
representations and warranties of the Hughes Parties set forth in this Agreement
shall be true and correct in all material respects (without regard to any
materiality limitations contained in any such representation or warranty, except
that, subject to the next sentence below, the representation of HCI set forth in
the last sentence of Section 6.4 shall be true and correct in all respects) as
of the date of this Agreement (except to the extent such representations and
warranties speak as of an earlier date or have been amended pursuant to Section
7.15 and, other than with respect to the representation of HCI set forth in the
last sentence of Section 6.4, except for inaccuracies or omissions having or
reasonably likely to have, individually or in the aggregate, an economic impact
or consequence (or diminution in value) on the Galaxy Business of less than
$50,000,000. A breach of the last sentence of Section 6.4 shall not be
considered a failure of this condition precedent, provided any deficiency is
cured by the Closing Date. PAS shall have received certificates of each of the
Chief Executive Officer and the Chief Financial Officer of HCI to that effect.

                         (b) Performance of Obligations. Each of the Hughes
Parties and HE shall have performed in all material respects (other than the
obligations of the Hughes Parties and HE pursuant to Sections 7.21 and 7.24,
which shall be performed as agreed herein without regard to materiality) all
obligations required to be performed by it under this Agreement and the Related
Agreements to which it is a party on or before the Closing Date. PAS shall have
received certificates of the Chief Executive Officer and Chief Financial Officer
of HCI to that effect. Notwithstanding the foregoing, the obligations of PAS to
effect the transactions contemplated by this Agreement shall not be relieved by
the failure of any of the foregoing conditions if such failure is the result,
directly or indirectly, of any breach by PAS of any of its material obligations
under this Agreement.

                         (c) Material Adverse Change. Since the date of this
Agreement, there shall have been no change, occurrence or circumstance (or
series of changes, occurrences or circumstances) in the business, operations,
properties, assets, condition (financial or otherwise) or the results of
operations or prospects of the assets of the Galaxy Business having or
reasonably likely to have, individually or in the aggregate, an adverse economic
impact or consequence (including diminution in value) of more than $200,000,000.
Notwithstanding the foregoing, for purposes of this Section 8.2(c) none of the
following shall be deemed to be a "change," "occurrence" or "circumstance": (i)
the loss, denial or dismissal of any pending application for a Galaxy Permit
that has been filed with the FCC or (ii) a loss, to the extent caused by or
related to (A) a mere delay in the receipt of revenue, as opposed to the
cancellation or modification of a contract, and the consequent loss of revenue
related to such delay or (B) the launch or in-orbit failure of any Galaxy
Satellite, to the extent such loss is covered by insurance.
<PAGE>
                  8.3 Additional Conditions to Obligations of the Hughes
Parties. The obligations of the Hughes Parties to effect the transactions
contemplated hereby are subject to the satisfaction of the following conditions,
any or all of which may be waived in whole or in part by HCI:

                         (a) Representations and Warranties. Each of the
representations and warranties of PAS set forth in this Agreement shall be true
and correct in all material respects (without regard to any materiality
limitations contained in any such representation or warranty) as of the date of
this Agreement (except to the extent such representations and warranties speak
as of an earlier date or have been amended pursuant to Section 7.15), except for
inaccuracies or omissions having or reasonably likely to have, individually or
in the aggregate, an economic impact or consequence (or diminution in value) on
PAS and its Subsidiaries taken as a whole of less than $50,000,000. HCI shall
have received certificates of the Chief Financial Officer and Chief Executive
Officer of PAS to that effect.

                         (b) Performance of Obligations. PAS shall have
performed in all material respects all obligations required to be performed by
it under this Agreement and the Related Agreements to which it is a party on or
before the Closing Date. HCI shall have received certificates of the Chief
Executive Officer and Chief Financial Officer of PAS to that effect.
Notwithstanding the foregoing, the obligations of HCI to effect the transactions
contemplated by this Agreement shall not be relieved by the failure of any of
the foregoing conditions if such failure is the result, directly or indirectly,
of any breach by any Hughes Party of any of their material obligations under
this Agreement.

                         (c) Material Adverse Change. Since the date of this
Agreement, there shall have been no change, occurrence or circumstance (or
series of changes, occurrences or circumstances) in the business, operations,
properties, assets, condition (financial or otherwise) or the results of
operations or prospects of the assets of PAS having or reasonably likely to
have, individually or in the aggregate, an adverse economic impact or
consequence (including diminution in value) of more than $200,000,000.
Notwithstanding the foregoing, for purposes of this Section 8.3(c) none of the
following shall be deemed to be a "change," "occurrence" or "circumstance": (i)
the loss, denial or dismissal of any pending application for a PAS Permit that
has been filed with the FCC or (ii) a loss, to the extent caused by or related
to (A) a mere delay in the receipt of revenue, as opposed to the cancellation or
modification of a contract, and the consequent loss of revenue related to such
delay or (B) the launch or in-orbit failure of any PAS Satellite, to the extent
such loss is covered by insurance.

                         (d) Termination of Options. PAS shall have delivered to
HCI written evidence of the agreement by each holder of Options to terminate
such Options on or before the Effective Time.

                         (e) Termination of DTH Equity Obligations. PAS shall
have delivered to HCI evidence satisfactory to HCI that PAS will, as of the
Closing Date, terminate all of its obligations under that certain Memorandum of
Understanding, dated as of March 27, 1995, between PAS and Televisa, and the
oral agreement between such parties regarding an equity interest in a DTH
venture in the Iberian Peninsula.
<PAGE>
                         (f) Resignation of PAS Directors. PAS shall have
delivered to HCI a letter of resignation from each person that is a director of
PAS immediately prior to the Closing, which resignation shall be effective as of
the Effective Time.

                                   ARTICLE IX
                           TERMINATION AND AMENDMENT

                  9.1 Termination. This Agreement may be terminated and the
Asset Contribution, the Univisa Contribution and the Merger may be abandoned at
any time prior to the Closing Date, whether before or after stockholder approval
of the Merger:

                         (a) by mutual written consent of HCI and PAS or by
mutual actions of their respective Boards of Directors;

                         (b) by either PAS or HCI, so long as such party is not
in breach of its obligations hereunder, if the Asset Contribution, the Univisa
Contribution and the Merger shall not have been consummated on or before that
date which is fifteen (15) months from the date of this Agreement; provided,
however, that the right to terminate this Agreement under this Section 9.1(b)
shall not be available to HCI or PAS if failure to fulfill any obligation under
this Agreement by a Hughes Party (in the case of HCI) or PAS (in the case of
PAS) has been the cause of or resulted in the failure of either the Asset
Contribution, the Univisa Contribution or the Merger to occur on or before such
date, but the non-breaching party of the Hughes Parties or PAS that desires to
proceed with the transactions contemplated hereby shall consummate such
transactions as promptly as practicable;

                         (c) by either PAS or HCI upon a breach of any
representation, warranty, covenant or agreement on the part of PAS (with respect
to HCI) or a Hughes Party (with respect to PAS) contained in this Agreement; or
if any representation or warranty of PAS (with respect to HCI) or a Hughes Party
(with respect to PAS) shall have become inaccurate or incomplete, in any case
such that the conditions set forth in Sections 8.2 or 8.3, as the case may be,
would be incapable of being satisfied on the Closing Date; provided, that in any
case, a willful or reckless breach shall be deemed to cause such conditions to
be incapable of being satisfied for purposes of this Section 9.1;

                         (d) by either HCI or PAS if any injunction or order of
a court or other competent authority preventing the consummation of any of the
Asset Contribution, the Univisa Contribution or the Merger shall have become
permanent, final and non-appealable;

                         (e) By either of PAS or HCI, if this Agreement and the
Merger shall fail to receive the requisite vote for approval and adoption by the
stockholders of PAS;

                         (f) By HCI, if (i) the Board of Directors of PAS shall
withdraw, modify or change its recommendation of this Agreement in a manner
adverse to any of the Hughes Parties or shall have resolved to do any of the
foregoing, (ii) the Board of Directors of PAS shall have recommended to the
stockholders of PAS any Acquisition Proposal or (iii) a tender offer or exchange
offer for 15% or more of the outstanding shares of PAS Common Stock is
<PAGE>
commenced, and the Board of Directors of PAS recommends that the holders of such
stock tender their shares in such tender or exchange offer; or

                         (g) By PAS' Board of Directors if, in the exercise of
its good faith judgment as to fiduciary duties owed to its stockholders imposed
by law, and, provided that PAS' Board of Directors shall have complied with each
of the requirements set forth in Section 7.1(e), PAS' Board of Directors adopts
a Superior Acquisition Proposal.

                  9.2 Effect of Termination. In the event of termination of this
Agreement by HCI or PAS as provided in Section 9.1, (a) written notice thereof
shall forthwith be given to the other parties specifying the provision hereof
pursuant to which such termination is made and (b) this Agreement shall
forthwith become void and there shall be no liability or obligation on the part
of any party or their respective Subsidiaries, Affiliates, officers, directors
or stockholders except to the extent that such termination results from the
willful or reckless breach by any party hereto of any of its representations or
warranties, or of any of its covenants or agreements, in each case, as set forth
in this Agreement. The last sentence of Section 7.7(a) and the provisions of
Sections 7.8 and 9.3 shall survive any termination of this Agreement, unless
otherwise agreed by HCI and PAS. Moreover, in the event of termination of this
Agreement pursuant to Sections 9.1(c), 9.1(f) or 9.1(g), nothing herein shall
prejudice the ability of the terminating party (with respect to a termination
pursuant to Section 9.1(c)) or HCI (with respect to a termination pursuant to
Section 9.1(f) or 9.1(g)) from seeking damages from any other party for any
willful breach of this Agreement, including, without limitation, attorney's
fees, and the right to pursue any remedy at law or in equity.

                  9.3 Termination Fee. PAS agrees that if this Agreement shall
be terminated pursuant to (i) Section 9.1(b) hereof at any time when (a) an
Acquisition Proposal shall have been made by a third party but shall not have
been rejected by PAS and (b) PAS or any of its Subsidiaries or PAS' stockholders
shall thereafter consummate or agree to consummate a transaction which would
constitute an Acquisition Proposal with any person within twelve (12) months
from the date of such termination, (ii) Section 9.1(e) (with respect to the
failure to obtain the requisite vote by the stockholders of PAS) and there shall
have been made and not withdrawn or rejected an Acquisition Proposal, (iii)
Section 9.1(f), or (iv) Section 9.1(g), then in any such event PAS shall pay to
HCI an amount equal to $80,000,000 (the "Termination Fee"), payable (x) in the
case of termination under clause (i) above upon signing of a definitive
agreement relating to such Acquisition Proposal referred to in clause (i) of
this Section 9.3, or, if no such agreement is executed, then at the closing (and
as a condition to the Closing) of such Acquisition Proposal, and (y) within one
business day of termination of this Agreement upon any termination of this
Agreement described in clauses (ii), (iii), or (iv) above. In any case in which
a Termination Fee is payable by PAS under this Section 9.3, PAS also shall
assume and pay or reimburse HCI for all reasonable fees and expenses incurred by
HCI and its Affiliates (including the fees and expenses of their counsel,
accountants, financial advisors and funding sources) which are specifically
related to the matters contemplated by this Agreement and the Related
Agreements, but not to exceed $7,500,000 in the aggregate, payable concurrently
with the payment of the Termination Fee. PAS acknowledges that the agreements
contained in this Section 9.3 hereof are an integral part of the transactions
contemplated by this Agreement. Accordingly, if PAS shall fail to pay when due
<PAGE>
any amounts which shall become due under Section 9.3 hereof, PAS shall in
addition hereto pay to HCI all costs and expenses (including fees and
disbursements of counsel) incurred in collecting such overdue amounts, together
with interest on such overdue amounts from the date such payment was required to
be made until the date such payment is received at a rate per annum equal to the
"reference rate" as announced from time to time by Bank of America NT&SA. Any
payment required to be made pursuant to Section 9.3 shall be made when due by
wire transfer of immediately available funds to an account designed by HCI.

                  9.4 Amendment.

                         (a) Subject to applicable law, this Agreement may be
amended, modified or supplemented only by written agreement of the parties at
any time prior to the Effective Date with respect to any of the terms contained
herein; provided, however, that, after this Agreement is adopted by PAS'
stockholders, no such amendment or modification shall reduce the amount or
change the form of consideration to be delivered to the holders of Shares or
adversely affect the rights of such holders of Shares without the consent of
PAS' stockholders duly obtained. In addition, HCI agrees not to amend, modify or
terminate any of the Univisa Contribution Agreement, the Collateral Trust
Agreement or the Pledge and Security Agreement without the prior written
approval of PAS.

                         (b) In the enforcement, interpretation or amendment of
any provisions herein or under the Related Agreements by Newco affecting the
rights and obligations of HE or its Affiliates following the Closing, Newco
shall be represented by a committee of the Board of Directors of Newco comprised
solely of Disinterested Directors.

                  9.5 Extension; Waiver. At any time prior to the Effective
Time, and subject to applicable law, the parties hereto, by action taken or
authorized by their respective Boards of Directors, may, to the extent legally
allowed: (i) extend the time for the performance of any of the obligations or
other acts of the other parties hereto; (ii) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto; and (iii) waive compliance with any of the agreements or
conditions contained herein. Any agreement on the part of a party hereto to any
such extension or waiver shall be valid only if set forth in a written
instrument signed on behalf of such party. The failure of any party hereto to
assert any of its rights hereunder shall not constitute a waiver of such rights.


                                   ARTICLE X
                               GENERAL PROVISIONS

                  10.1 Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and agreements in
this Agreement or in any instrument delivered pursuant to this Agreement shall
survive the Effective Time, except for the agreements contained in Sections 7.10
and 7.11 hereof and for those other covenants and agreements specifically
requiring performance following the Closing. The Confidentiality Agreement shall
survive the execution and delivery of this Agreement, and the provisions of the
<PAGE>
Confidentiality Agreement shall apply to all information and material delivered
by any party hereunder.

                  10.2 Expenses. Whether or not the Asset Contribution, the
Univisa Contribution and the Merger are consummated, all costs and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses except as expressly
provided herein and except that (a) the filing fees in connection with the HSR
Act filing, (b) the filing fees in connection with the filing of the Proxy
Statement/Prospectus and the Registration Statements with the SEC, (c) the
filing fees in connection with necessary applications to the FCC and similar
foreign agencies, (d) the expenses incurred in connection with printing and
mailing the Registration Statement and the Proxy Statement/Prospectus and (e)
fees and expenses related to any expert consultants (excluding attorneys and
accountants) retained in connection with or related to any of the applications
or filings otherwise contemplated by this Section 10.2, shall be shared equally
by the Hughes Parties, on the one hand, and PAS, on the other hand.

                  10.3 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:

                   (a)      if to any of the Hughes Parties, to:

                            Hughes Electronics Corporation
                            7200 Hughes Terrace
                            Los Angeles, California  90045
                            Attention:  Kenneth N. Heintz
                            Telephone:  (310) 568-7600
                            Telecopy:  (310) 568-6774

                            and

                            Hughes Electronics Corporation
                            7200 Hughes Terrace
                            Los Angeles, California  90045
                            Attention:  Robert Hall
                            Telephone:  (310) 568-7600
                            Telecopy:  (310) 568-7834
<PAGE>
                           with a copy to:

                            Latham & Watkins
                            633 West Fifth Street, Suite 4000
                            Los Angeles, California 90071
                            Attention:  Bruce R. Lederman, Esq.
                            Telephone:  (213) 485-1234
                            Telecopy:  (213) 891-8763

                   (b)      if to PAS, to:

                            PanAmSat Corporation
                            One Pickwick Plaza
                            Greenwich, Connecticut  06830
                            Attention:  Frederick A. Landman
                            Telephone:  (203) 622-6664
                            Telecopy:  (203) 622-9163

                           with a copy to:

                            Chadbourne & Parke LLP
                            30 Rockefeller Plaza
                            New York, New York 10112
                            Attention:  Dennis J. Friedman, Esq.
                            Telephone:  (212) 408-5200
                            Telecopy:  (212) 541-5369

                  10.4 Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Whenever the word "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation." The phrase "made available" in this
Agreement shall mean that the information referred to has been made available if
requested by the party to whom such information is to be made available. This
Agreement shall not be construed for or against either party by reason of the
authorship or alleged authorship of any provision hereof or by reason of the
status of the respective parties. 

                  10.5 Entire Agreement; No Third-Party Beneficiaries; Rights of
Ownership. This Agreement (together with the Related Agreements and any other
documents and instruments referred to herein, including exhibits and schedules)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and, except as provided in Section 7.10 (which is intended
to be for the benefit of the persons referred to therein and their
beneficiaries, and may be enforced by them as third-party beneficiaries), is not
intended to confer upon any person other than the parties hereto any rights or
remedies hereunder.
<PAGE>
                  10.6 Assignment. Neither this Agreement nor any of the rights,
interests, obligations hereunder shall be assigned by either of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other party. Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of and be enforceable by the parties
and their respective successors and assigns.

                  10.7 Governing Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware (without reference to the choice of law provisions),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.

                  10.8 Severability. Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby, unless the foregoing inconsistent action or the failure to
take an action constitutes a material breach of this Agreement or makes the
Agreement impossible to perform, in which case this Agreement shall terminate
pursuant to Article IX hereof. Upon any such holding that any provision of this
Agreement is null, void or unenforceable, the parties will negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated by this Agreement are consummated to the extent
possible. Except as otherwise contemplated by this Agreement, to the extent that
a party hereto took an action inconsistent herewith or failed to take action
consistent herewith or required hereby pursuant to an order or judgment of a
court or other competent authority, such party shall incur no liability or
obligation unless such party did not in good faith seek to resist or object to
the imposition or entering of such order or judgment.

                  10.9 Injunctive Relief. The parties acknowledge that it will
be impossible to measure in money the damages that would be suffered if the
parties fail to comply with any of the obligations herein imposed on them and
that in the event of any such failure, an aggrieved person or entity will be
irreparably damaged and will not have an adequate remedy at law. Any such person
or entity shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.

                  10.10 Attorneys' Fees. If any party to this Agreement brings
an action to enforce its rights under this Agreement, the prevailing party shall
be entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.

                  10.11 Cumulative Remedies. All rights and remedies of either
party hereto are cumulative of each other and of every other right or remedy
such party may otherwise have at law or in equity, and the exercise of one or
<PAGE>
more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.

                  10.12 Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same instrument
and shall become effective when executed and delivered by each of the parties.

<PAGE>
 
 EXECUTION COPY
 

                  IN WITNESS WHEREOF, the parties hereto have caused this
Agreement and Plan of Reorganization to be signed by their respective officers
thereunto duly authorized, all as of the date first written above.

                                              HUGHES COMMUNICATIONS, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              HUGHES COMMUNICATIONS
                                              GALAXY, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              HUGHES COMMUNICATIONS
                                              SATELLITE SERVICES, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              HUGHES COMMUNICATIONS
                                              SERVICES, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              HUGHES COMMUNICATIONS
                                              CARRIER SERVICES, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              HUGHES COMMUNICATIONS
                                              JAPAN, INC.

                                              By: /s/ Jerald F. Farrell
                                                 -----------------------------
                                                  Jerald F. Farrell
                                                  President


                                              MAGELLAN INTERNATIONAL, INC.

                                              By: /s/ Charles H. Noski
                                                 -----------------------------
                                                  Charles H. Noski
                                                  President


                                              PANAMSAT CORPORATION

                                              By: /s/ Frederick A. Landman
                                                 -----------------------------
                                                  Frederick A. Landman
                                                  President




<PAGE>




                                 
                                       

                                    EXHIBIT A

                               Assurance Agreement



<PAGE>
EXHIBIT A
---------

                               ASSURANCE AGREEMENT


                  This ASSURANCE AGREEMENT (this "Agreement"), dated September
20, 1996, is entered into by and between HUGHES ELECTRONICS CORPORATION, a
Delaware corporation ("HE"), PANAMSAT CORPORATION, a Delaware corporation
("PAS"), SATELLITE COMPANY, LLC, a Nevada limited liability company ("S
Company") and MAGELLAN INTERNATIONAL, INC., a Delaware corporation ("Newco").

                                    RECITALS

         A. Concurrently with the execution and delivery hereof, (i) PAS is
entering into an Agreement and Plan of Reorganization (the "Reorganization
Agreement") with Hughes Communications, Inc., a California corporation ("HCI"),
Hughes Communications Galaxy, Inc., a California corporation ("Galaxy"), Hughes
Communications Satellite Services, Inc., a California corporation ("HCSS"),
Hughes Communications Services, Inc., a California corporation ("HCS"), Hughes
Communications Carrier Services, Inc., a California corporation ("HCCS"), Hughes
Communications Japan, Inc., a California corporation ("HCJ"), and Newco, and
(ii) S Company is entering into a share exchange agreement (the "Univisa
Contribution Agreement") with Newco, pursuant to which agreements Newco will
acquire (i) the existing businesses of certain subsidiaries of HCI that together
comprise the Galaxy Business (as defined in the Reorganization Agreement) and
(ii) the business of PAS.


         B. As a condition and inducement to PAS to enter into the
Reorganization Agreement (and effect the transactions contemplated thereby) and
S Company to enter into the Univisa Contribution Agreement (and effect the
transactions contemplated thereby) HE has agreed to enter into this Agreement
and perform its obligations contemplated hereby.

         C. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Reorganization Agreement.


                                    AGREEMENT

                  In consideration of the foregoing and the mutual promises
contained herein and in the Reorganization Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

         1. Provision or Arrangement of Financing. On or before the Closing
Date, HE will loan or arrange for one or more persons or entities that are not
affiliated with either PAS or HE (each such person or entity, an "Unaffiliated
Person") to loan to Newco and/or to one or more Subsidiaries of Newco (other
than PAS, Univisa, Merger Sub or any of their respective direct or indirect
Subsidiaries) one billion seven hundred twenty-five million dollars
($1,725,000,000), plus interest required under the Reorganization Agreement,
which loan shall be funded on the Closing Date or as needed by Newco to pay the
cash required by Newco to consummate the Univisa Contribution (including Newco's
repurchase of shares of Newco Common Stock contemplated thereby) and the Merger;
provided, however, that (i) HE's obligation to make or arrange any such loan or
loans shall be conditioned upon satisfaction of all conditions to Closing
contained in Sections 8.1 and 8.3 of the Reorganization Agreement; and (ii) if
any such loan or loans are provided by an Unaffiliated Person, HE shall not be
obligated to provide any form of guarantee or other credit enhancement in
support of any such loan or loans provided by one or more Unaffiliated Persons.
In the event HE makes any such loan or loans to Newco, the terms of such loan or
loans shall be commercially reasonable as determined by Chase Manhattan Bank,
Bank of America NT&SA and a third bank, if necessary to decide matters upon
which such banks have failed to agree, chosen by such two banking institutions.

         2. Contribution of Galaxy Business. Subject to the terms and conditions
set forth in the Reorganization Agreement, HE shall cause its Subsidiaries to
take all actions necessary for Newco to own, upon consummation of the
transactions contemplated by the Reorganization Agreement, all right, title and
interest in and to the assets necessary to conduct the Galaxy Business, together
with the Galaxy Liabilities. HE represents and warrants that (i) the Galaxy
Employees are all of the employees who work primarily in the Galaxy Business,
(ii) the Galaxy Assets are all of the assets used in the Galaxy Business and
(iii) the Galaxy Business is conducted entirely through and by HCI and its
subsidiaries, Galaxy, HCSS, HCS, HCCS and HCJ.

         3. Operation of Galaxy Business in Ordinary Course. Subject to the
terms and conditions set forth in the Reorganization Agreement, HE shall cause
its Subsidiaries to continue to operate the Galaxy Business in a manner
consistent with the operation of the Galaxy Business prior to the date hereof.

         4. Performance Obligations. Subject to the terms and conditions set
forth in the Reorganization Agreement, HE shall cause its Subsidiaries,
including HCI, Galaxy, HCSS, HCS, HCCS, HCJ and Newco, to perform their
respective obligations under the Reorganization Agreement and the Related
Agreements. Within 45 days after the Closing Date, Newco shall provide HE with a
reasonably detailed statement regarding compliance by HCI and its Affiliates
with the funding requirements of the Reorganization Agreement, which statement
shall be accompanied by a request for payment of any funding deficiency or an
acknowledgment of any reimbursement of any overfunding that is owed. Promptly
following the giving of such notice, HE or Newco, as the case may be, shall make
the payment set forth in such notice. Without limiting the foregoing, HE agrees
that where in the Reorganization Agreement or the Related Agreements it is
stated that HE or its Affiliates will take or refrain from taking certain
actions, HE will, or will cause its relevant Affiliate to, take or refrain from
taking such action, as required by the pertinent provision.

         5. Leveraged Lease Guaranty. Subsequent to the Closing Date, HE shall
continue to guaranty leveraged leases of transponders used in the Galaxy
Business entered into prior to the date of this Agreement.

         6. Cross License of Intellectual Property. Prior to the Closing, HE
shall, and shall cause its Subsidiaries to, enter into negotiations with
representatives of PAS with the intent of executing and delivering at Closing a
non-exclusive, royalty-free, perpetual Cross License Agreement, with standard
terms and conditions mutually acceptable to HCI and PAS, whereby Newco shall
have the right to use any HE Licensed Intellectual Property that was used in the
Galaxy Business on or before the Closing and HE shall have the right to use any
Galaxy Licensed Intellectual Property that was used in the Hughes Electronics
businesses on or before the Closing. As used in this Agreement, the phrase "HE
Licensed Intellectual Property" shall refer to all domestic, foreign, common
law, registered and pending applications for patents, copyrights, trade secrets,
know-how, confidential information, computer programs (including any source
code), documentation, engineering and technical drawings, processes,
methodologies, and technology (excluding any Intellectual Property owned and
developed by Galaxy) of HE and its Affiliates that was used in the Galaxy
Business on or before Closing. As used in this Agreement, the phrase "Galaxy
Licensed Intellectual Property" shall mean all Newco owned domestic, foreign,
common law, registered and pending applications for patents, copyrights, trade
secrets, know-how, confidential information, computer programs (including any
source code), documentation, engineering and technical drawings, processes,
methodologies, and technology that are conveyed to Newco pursuant to Section 1.1
of the Reorganization Agreement.


         7. Miscellaneous.

         (a) Termination. This Agreement and all obligations contained hereunder
shall terminate upon the date on which the Reorganization Agreement is
terminated; provided that HE shall remain liable for its obligations hereunder
if the termination of the Reorganization Agreement is pursuant to Section 9.1(c)
thereof.

         (b) Expenses. All costs and expenses incurred in connection with this
Agreement and transactions contemplated hereby shall be paid by the party
incurring such expenses.

         (c) Interpretation. Headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word "include," "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation." This Agreement shall not be construed for or
against either party by reason of the authorship or alleged authorship of any
provision hereof or by reason of the status of the respective parties.

         (d) Entire Agreement; No Third-Party Beneficiaries. This Agreement
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.

         (e) Assignment. Neither this Agreement nor any of the rights, interests
or obligations hereunder shall be assigned by any of the parties hereto whether
by operation of law or otherwise without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon
and for the benefit of and be enforceable by the parties and their respective
successors and assigns.

         (f) Governing Law. This Agreement shall be construed, interpreted and
the rights of the parties determined in accordance with the laws of the State of
Delaware (without reference to the choice of law provisions), except with
respect to matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this Agreement, and as to
those matters the law of the jurisdiction under which the respective entity
derives its powers shall govern.

         (g) Severability. Each party agrees that, should any court or other
competent authority hold any provision of this Agreement or part hereof to be
null, void or unenforceable, or order any party to take any action inconsistent
herewith or not to take an action consistent herewith or required hereby, the
validity, legality and enforceability of the remaining provisions and
obligations contained or set forth herein shall not in any way be affected or
impaired thereby. Upon any such holding that any provision of this Agreement is
null, void or unenforceable, the parties will negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
by this Agreement are consummated to the extent possible. Except as otherwise
contemplated by this Agreement, to the extent that a party hereto took an action
inconsistent herewith or failed to take action consistent herewith or required
hereby pursuant to an order or judgment of a court or other competent authority,
such party shall incur no liability or obligation unless such party did not in
good faith seek to resist or object to the imposition or entering of such order
or judgment.

         (h) Injunctive Relief. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.

         (i) Attorneys' Fees. If any party to this Agreement brings an action to
enforce its rights under this Agreement, the prevailing party shall be entitled
to recover its costs and expenses, including without limitation reasonable
attorneys' fees, incurred in connection with such action, including any appeal
of such action.

         (j) Cumulative Remedies. All rights and remedies of either party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.

         (k) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.

         (l) Amendments, Waivers, Etc.

               (i) This Agreement may not be amended, changed, supplemented,
waived or otherwise modified or terminated, except upon the execution and
delivery of a written agreement executed by the parties hereto.

               (ii) In the enforcement, interpretation or amendment of any
provisions herein by Newco affecting the rights and obligations of HE or its
Affiliates following the Closing, Newco shall be represented by a subcommittee
of the Board of Directors of Newco comprised solely of Disinterested Directors.

               (iii) HE hereby agrees that no failure or delay by PAS, S Company
or Newco, as the case may be, in exercising any right or remedy that any may
have hereunder shall operate as a waiver of such right or remedy. HE hereby
waives notice or demand of performance in the acceptance of its obligations
hereunder. HE agrees that PAS, S Company or Newco may at any time, without
notice to or consent of HE, and without in any manner affecting the liability of
HE hereunder, amend, extend, modify, supplement or waive any term or condition
of the Reorganization Agreement, and HE shall be bound by, and this Agreement
shall automatically extend to the Reorganization Agreement as so amended,
extended, modified, supplemented or waived without any action required by HE.
The liability and obligations of HE hereunder shall be primary, direct and
absolute and HE hereby waives any right to require that resort be had against
any other person.

<PAGE>
                  IN WITNESS WHEREOF, the parties have executed this Assurance
Agreement as of the date first written above.


                                           HUGHES ELECTRONICS CORPORATION

                                       By: 
                                          --------------------------------
                                           Charles H. Noski
                                           Senior Vice President and
                                           Chief Financial Officer



                                           PANAMSAT CORPORATION

                                       By:
                                          -------------------------------
                                           Frederick A. Landman
                                           President



                                           MAGELLAN INTERNATIONAL, INC.

                                       By:
                                          -------------------------------
                                           Charles H. Noski
                                           President



                                           SATELLITE COMPANY, LLC

                                       By:
                                          -------------------------------
                                      Name:
                                     Title:




<PAGE>





                                   EXHIBIT B


              Income Tax Indemnification and Allocation Agreement




<PAGE>
               INCOME TAX INDEMNIFICATION AND ALLOCATION AGREEMENT

                  This AGREEMENT (this "Agreement"), dated as of __________ __,
199_, is entered into by and between HUGHES ELECTRONICS CORPORATION, a Delaware
corporation ("HE"), and MAGELLAN INTERNATIONAL, INC., a Delaware corporation
("Newco").

                                    RECITALS

                  A. HE, HCI, Galaxy, HCSS, HCS, HCCS, HCJ, PAS and Newco are
parties to an Agreement and Plan of Reorganization dated as of September 20,
1996 (the "Reorganization Agreement"), pursuant to which (i) each of Galaxy and
HCSS will transfer certain of their assets, liabilities, business and operations
to Newco, (ii) HCI will transfer all of the stock of each of HCS, HCCS and HCJ
to Newco, and (iii) the common and Class A stockholders of PAS and S Company
will transfer, directly and indirectly, all of their stock in PAS to Newco.

                  B. The foregoing transfers pursuant to the Reorganization
Agreement are intended to comprise an integrated transaction subject to Section
351 of the Internal Revenue Code of 1986, as amended (the "Code").

                  C. General Motors Corporation ("GM") is the common parent of
an affiliated group of corporations within the meaning of Section 1504(a) of the
Code (the "GM Group"), which, upon consummation of the Reorganization, will
include HE, HCI, Galaxy and HCSS.

                  D. Upon consummation of the Reorganization Agreement, Newco
will be the common parent of a separate affiliated group of corporations within
the meaning of Section 1504(a) of the Code (the "Newco Group"), which will
include HCS, HCCS, HCJ, Univisa, Univisa Satellite Holdings, Inc., PAS and the
subsidiaries of PAS.

                  E. HE has agreed to indemnify and hold harmless the Newco
Group against all federal, state and local income tax liabilities of Galaxy,
HCSS, HCS, HCCS and HCJ for taxable years and other periods ending on or before,
or including, the Closing Date, on the terms provided herein.

                  F. After the Closing Date, the parties will not treat the
operations of HE and its subsidiaries as being unitary, for state and local
income tax reporting purposes, with those of Newco and its subsidiaries, except
as determined by HE, in its reasonable judgment, based on applicable state or
local law, or as required by a state or local tax authority.

                                    AGREEMENT

                  In consideration of the foregoing and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, HE and Newco, intending to be legally
bound, agree as follows:

                                    Article 1

                                   Definitions

                  1.01 For purposes of this Agreement, the following terms shall
have the meanings ascribed to them below:

                  "Accounting Firm" -- Deloitte & Touche, LLP.

                  "Affected Newco Group Member(s)" -- with respect to an Overlap
Group, the member or members of the Newco Group included therein.

                  "Closing Date" -- the date on which the Reorganization
Agreement is consummated.

                  "Disaffiliation Year" -- as to any member of the Newco Group,
a taxable year or other period in which such member is not included in an
Overlap Group after having been so included.

                  "Dispute Notice" -- as defined in Section 2.2(f) hereof.

                  "Galaxy" -- Hughes Communications Galaxy, Inc.

                  "GM Group" -- as defined in the introductory paragraphs
hereof.

                  "HCCS" -- Hughes Communications Carrier Services, Inc.

                  "HCI" -- Hughes Communications, Inc.

                  "HCJ" -- Hughes Communications Japan, Inc.

                  "HCS" -- Hughes Communications Services, Inc.

                  "HCSS" -- Hughes Communications Satellite Services, Inc.

                  "HE Federal Adjustment" -- any adjustment to federal Income
Tax liability, whether initiated by the Internal Revenue Service or by taxpayer,
through a claim for refund or otherwise, to any item of income, gain, loss,
expense, deduction or credit of Galaxy, HCSS, HCS, HCCS or HCJ included in a
consolidated federal income tax return of the GM Group for any taxable year
ending on or before the Closing Date, which adjustment has become final, whether
by judicial decision, settlement, closing agreement or otherwise.

                  "HE State Adjustment" -- any adjustment to state Income Tax
liability by a state or local tax authority or by taxpayer, through a claim for
refund or otherwise, to any item of income, gain, loss, expense, deduction or
credit of Galaxy, HCSS, HCS, HCCS or HCJ included in a consolidated or combined
state or local income tax return of the GM Group or any component thereof, or in
a separate state or local income tax return, for any taxable year or period
ending on or before, or including, the Closing Date, which adjustment has become
final, whether by judicial decision, settlement, closing agreement or otherwise.

                  "HE Subsidiaries" -- as defined in Section 4.01.

                  "Income Taxes" -- for purposes of this agreement, taxes
imposed by any federal, state, local or other taxing authority of or in the
United States which are on, based upon, measured by, or with respect to (A) net
or gross income of the taxpayer or (B) multiple bases (including, but not
limited to, corporate franchise, doing business or occupation Taxes) if one or
more of the bases upon which such Tax may be based upon, measured by, or
calculated with respect to, is described in clause (A) above.

                  "Newco Group" -- as defined in the introductory paragraphs
hereof.

                  "Newco Overlap Tax or Refund" -- with respect to a taxable
year (or other period) of an Overlap Group, the hypothetical consolidated,
combined or separate state or local income tax liability or rights to refunds
for such taxable year or other period of the Affected Newco Group Members,
calculated as if such Affected Newco Group Members were a separate group of
corporations filing a consolidated or combined return (or, in the case of a
single member, a separate return) in accordance with applicable state or local
law for all taxable periods. The Newco Overlap Tax shall be determined annually,
with respect to each Overlap Group, in accordance with the following principles:

                           (1) loss and credit carryovers of the Affected Newco
         Group Members for taxable years ending after the Closing Date, shall be
         taken into account, to the extent permitted by applicable state or
         local law (on the hypothetical basis referred to in the first sentence
         of this paragraph), whether or not such carryovers were taken into
         account in computing the Overlap Group Tax Liability for a preceding
         taxable year; provided, however, that to the extent that such
         carryovers were taken into account in computing the Overlap Group Tax
         Liability for a preceding taxable year, this provision shall be applied
         as if there were no applicable limitation on the number of years to
         which the applicable losses or credits may be carried;

                           (2) for purposes of clause (1), the first taxable
         year ending after the Closing Date shall be deemed to have commenced on
         the day after the Closing Date, based, to the extent practicable, on an
         interim closing of the books of the GM Group members included in the
         Overlap Group, in accordance with the principles of Treasury Regulation
         Section 1.1502-76, as if separate returns had been filed for the HE
         Subsidiaries for such Pre-Closing Tax Period and all prior taxable
         periods;

                           (3) items of income, gain, loss, expense, deduction
         and credit of the Affected Newco Group Members shall be determined
         based on the elections and methods of computation specified by HE and
         used in the Overlap Group's consolidated or combined state or local
         income tax return for the taxable year.

                  "Overlap Group" -- as defined in the definition of "Parent."

                  "Overlap Group Tax Liability" -- with respect to an Overlap
Group, the consolidated or combined state or local income tax liability of such
Overlap Group, as determined under applicable state or local law, for any
taxable year for which such Overlap Group files or is required to file a
consolidated or combined state or local income tax return.

                  "Parent" -- GM or such other corporation which shall be the
parent of, or which shall be responsible for filing a consolidated or combined
state or local income tax return for, a group of corporations that includes at
least one member of the GM Group and at least one member of the Newco Group
("Overlap Group"). It is understood that both the identity of the Parent of an
Overlap Group and the membership of an Overlap Group may differ from one
jurisdiction to another.

                  "Separate Federal Income Tax Liability" -- for any taxable
year or other period, the federal income tax liability of the Newco Group,
calculated on a consolidated basis.

                  "Separate State or Local Tax Liability" -- for any taxable
year or other period and for each applicable state or local jurisdiction, the
state or local income tax liability of the Newco Group or any member or members
thereof, calculated on a separate, consolidated or combined basis, as
applicable.

                  "Surviving NOL" -- as defined in Section 3.06(c) hereof.

                  "Tax Changes" -- as defined in Section 2.02(b) hereof.

                  "With (Without) Calculation" -- as defined in Section 2.02(c)
hereof.


                                    Article 2

                                    Indemnity

                  2.01 By HE. (a) Subject to Section 2.02 hereof, HE shall be
responsible for and shall indemnify and hold harmless the Newco Group against,
and shall be entitled to any refund of, Income Taxes (including interest,
penalties and other additions) of each of Newco, Galaxy, HCSS, HCS, HCCS and HCJ
for all taxable years or other periods ending on or before, or including (for
the portion of the taxable year ending at the close of business on), the Closing
Date, including, without limitation, Income Taxes of the HE Subsidiaries
relating to or arising out of the transfers by them pursuant to the
Reorganization Agreement. HE shall also indemnify and hold harmless the Newco
Group for all taxable years (or other periods) against any liability (as a
result of Treasury Regulation Section 1.1502-6(a) or otherwise) for Income Taxes
imposed with respect to HE or any other person (other than the HE Subsidiaries)
which is or has ever been affiliated with HE or the HE Subsidiaries, or with
whom HE or the HE Subsidiaries otherwise joins or has ever joined (or is or has
ever been required to join) in filing any consolidated, combined or unitary tax
return, prior to the Closing).

                  (b) Transfer taxes (such as license fees, registration fees,
stamp duties, documentation fees, sales taxes, property taxes and other similar
taxes or charges, together with any penalties, fines or interest thereon or
other additions thereto, but not including Income Taxes) applicable to the
transfers by HCI and the HE Subsidiaries pursuant to the Reorganization
Agreement shall be for the account of HE. HE shall indemnify and hold harmless
Newco and the other members of the Newco Group from and against all liability
for such transfer taxes.

                  2.02     Tax Benefits and Detriments

                  (a) If an HE Federal Adjustment or an HE State Adjustment
results in a tax benefit or detriment (as described below) to the Newco Group or
any member thereof, Newco will pay the amount of such tax benefit to HE, or HE
will pay the amount of such tax detriment to Newco, as such tax benefit or
detriment is realized, as hereinafter provided.

                  (b) HE will notify Newco promptly of any HE Federal Adjustment
and any HE State Adjustment that may result in a tax benefit or detriment to the
Newco Group or any member thereof. Each such notification (a "Change Notice")
shall be in writing and shall explain with reasonable specificity the change or
changes ("Tax Changes") to: (i) the federal income tax attributes of the
affected member or members of the Newco Group to be reflected in the
consolidated federal income tax returns, including amended returns with respect
to prior years, to be filed by the Newco Group; and (ii) the state and local
income tax attributes of the affected member or members of the Newco Group to be
reflected in the consolidated, combined or separate state and local income tax
returns, including amended returns with respect to prior years, to be filed by
the Newco Group or any member or members thereof.

                  (c) With respect to each taxable year ending after the Closing
Date, Newco will calculate the Separate Federal Income Tax Liability of the
Newco Group, first, by taking into account, to the extent permitted by
applicable law, all Tax Changes, as described in all current and prior year
Change Notices (the "With Calculation"); and, second, by disregarding all such
Tax Changes (the "Without Calculation"). If the Newco Group's Separate Federal
Income Tax Liability under the With Calculation exceeds its Separate Federal
Income Tax Liability under the Without Calculation, HE shall pay the amount of
such excess to Newco. If the Newco Group's Separate Federal Income Tax Liability
under the Without Calculation exceeds its Separate Federal Income Tax Liability
under the With Calculation, Newco shall pay the amount of such excess to HE.

                  (d) With respect to each taxable year ending after the Closing
Date, Newco will calculate, for each applicable state and local jurisdiction,
the Separate State or Local Tax Liability of the Newco Group or the members
thereof, on a consolidated, combined or separate basis, as applicable, first, by
taking into account, to the extent permitted by applicable law, all Tax Changes,
as described in all current and prior year Change Notices (the "With
Calculation"); and, second, by disregarding all such Tax Changes (the "Without
Calculation"). If the Newco Group's Separate State or Local Tax Liability under
the With Calculation exceeds its Separate State or Local Tax Liability under the
Without Calculation, HE shall pay the amount of such excess to Newco. If the
Newco Group's Separate State or Local Tax Liability under the Without
Calculation exceeds its Separate State or Local Tax Liability under the With
Calculation, Newco shall pay the amount of such excess to HE.

                  (e) All calculations and payments required pursuant to this
Section 2.02 with respect to a taxable year shall be made by the due date
(including extensions) of Newco's consolidated federal income tax return for
such year. Newco shall, at least 60 days before such due date, deliver to HE,
for its review, work papers setting forth with reasonable specificity the With
and Without Calculations and the Tax Changes taken into account for purposes of
such Calculations.

                  (f) If HE wishes to dispute any With and Without Calculations,
it shall deliver to Newco, within 30 days after receipt of Newco's work papers,
a notice ("Dispute Notice") specifying in recordable detail those items as to
which HE disagrees, the reasons for disagreement and its proposed adjustments to
the With and Without Calculations. If a Dispute Notice is delivered, HE and
Newco shall use their reasonable best efforts to reach agreement on the disputed
items or amounts. If HE and Newco cannot reach agreement within 10 days of the
delivery of a Dispute Notice, the disputed items will be submitted to the
Accounting Firm for determination, as provided herein. The Accounting Firm shall
deliver to HE and Newco, as promptly as practicable, a written report setting
forth its determination of the disputed items, which determination shall be
final, conclusive and binding on the parties and shall not be subject to appeal
to any court or tribunal. HE and Newco shall each bear its own expenses in
connection with the preparation of work papers, the issuance of Dispute Notices
and the submission of disputes to the Accounting Firm, except that the fees and
expenses of the Accounting Firm shall be shared equally by HE and Newco.


                                   Article 3

                 State and Local Income Taxes of Overlap Groups

                  3.01 Applications. This Article 3 shall be applicable only to
the extent that HE determines, in its reasonable judgment, based on applicable
state or local law, or a state or local tax authority requires, that state or
local income tax returns should be filed with respect to an Overlap Group. The
sole obligations and rights to refunds of the Newco Group in respect of state
and local Income Taxes of an Overlap Group is as provided in this Article 3.

                  3.02 Estimated Tax Payments. Not less than fifteen (15)
business days prior to the date on which Parent is required to make payments of
estimated tax on behalf of an Overlap Group (including payments of tax due with
a request for an extension to file), Newco shall submit to HE a calculation of
the separate estimated tax liability of the Affected Newco Group Members,
determined based on the Newco Overlap Tax (with respect to such Overlap Group)
for the taxable year in question. Newco shall pay the amount so calculated to HE
not later than the due date of Parent's estimated tax payment. Newco shall also
remit to HE the amount of any interest, penalties or other additions to tax
which would have been due on such estimated payment, if Newco had made such
payment directly to the applicable tax authority.

                  3.03 Payment of Separate Group Tax Liability. For each taxable
year (or other period) of an Overlap Group, Newco, on behalf of the Affected
Newco Group Members, shall prepare and deliver to HE, within four months after
the end of the taxable year, a calculation of the Newco Overlap Tax (with
respect to such Overlap Group) for such taxable year (or other period). Not
later than the filing due date (including extensions) for the Overlap Group for
such taxable year, (a) Newco shall pay to HE the excess, if any, of the Newco
Overlap Tax for such taxable year (or applicable portion thereof) over the
estimated tax payments previously made by Newco to HE in respect thereof,
together with any interest, penalties or other additions to tax which would have
been due if Newco had made such payment directly to the applicable tax
authority, or (b) HE shall pay to Newco an amount equal to the excess, if any,
of such estimated tax payments previously made by Newco over such Newco Overlap
Tax, or (c) HE shall pay to Newco the amount of the Newco Overlap Refund for
such taxable year (or component thereof), if any, together with any interest
thereon which would have been receivable if Newco had received such refund
directly from the applicable taxing authority plus the amount of any estimated
tax payments previously made by Newco for such taxable year (or portion
thereof).

                  3.04 Subsequent Adjustments. If the Overlap Group Tax
Liability of an Overlap Group (or any item entering into the computation
thereof) is adjusted by a state or local tax authority, then, as such
adjustments become final, by judicial decision, settlement, closing agreement or
otherwise, the Newco Overlap Tax (with respect to such Overlap Group) shall be
recomputed to the extent necessary to reflect such adjustments, and Newco shall
pay to HE any increase, or HE shall pay to Newco any decrease, in the Newco
Overlap Tax. Any such payment shall be due not later than (i) five business days
before the due date for any additional payment of tax by the Parent, (ii) five
business days after the receipt of a refund by any member of the Overlap Group
or (iii) five business days after the adjustment in question becomes final, if
such adjustment does not result in a payment of additional tax or receipt of a
refund. Newco shall also pay to HE any interest, penalties or additions to tax
which would have been due, if Newco had made such payment directly to the
applicable tax authority. The parties recognize that the Overlap Group Tax
Liability of an Overlap Group and the Newco Overlap Tax may be recomputed under
this Section 3.04 or Section 3.05 hereof more than once.

                  3.05 Other Recomputations. If an adjustment to the Overlap
Group Tax Liability of an Overlap Group, or to the related Newco Overlap Tax, is
not provided for in Section 3.04 hereof (such as a recomputation of amounts due
hereunder to reflect a carryback item or an erroneous calculation), then either
HE or Newco, as the case may be, shall make a payment to the other in such
amount and at such time as shall be determined in accordance with the principles
of Section 3.04 hereof.

                  3.06 Termination of Overlap Group. If an Overlap Group is
terminated:

                  (a) HE and Newco shall consult with and provide each other
with such information as may relate to the prior inclusion of members of either
Group in the Overlap Group.

                  (b) Unless otherwise consented to by the Parent, neither the
Newco Group nor any member thereof shall elect to carry back to a taxable year
of an Overlap Group any losses or other tax attributes incurred in a
Disaffiliation Year, unless otherwise required by law.

                  (c) If net operating loss carryovers generated by an Affected
Newco Group Member while included in an Overlap Group have not been used, prior
to the first Disaffiliation Year, in calculating the related Newco Overlap Tax
and have not expired, but rather have been used by the GM Group in a
Disaffiliation Year or have otherwise been retained by the GM Group (the
"Surviving NOL"), HE shall pay to Newco the amount, if any, by which, for a
Disaffiliation Year, the state or local income tax liability of such Affected
Newco Group Members would be reduced if the Surviving NOL (net of any portion
hereof taken into account under this Section 3.06(c) in a prior Disaffiliation
Year), were an available net operating loss carryforward to such Disaffiliation
Year (subject to the expiration thereof or to any limitation on the use thereof
under applicable state or local law). HE shall pay such amount to Newco not
later than the date on which Newco is required to satisfy such state or local
income tax liability for such Disaffiliation Year.

                  3.07 Disputes. If HE or Newco disputes any calculation of any
tax liability or required payment under this Article 3, such dispute shall be
finally resolved by the Accounting Firm using the dispute resolution procedures
set forth in Article 2 hereof.


                                    Article 4

                            Miscellaneous Provisions

                  4.01 Preparation and Filing of Tax Returns. HE shall prepare
and timely file or shall cause to be prepared and timely filed all Federal,
state and local Income Tax returns in respect of Galaxy, HCSS, HCS, HCCS and HCJ
(the "HE Subsidiaries"), their assets or activities that (i) are required to be
filed on or before the Closing Date or (ii) are required to be filed after the
Closing Date and (A) are includable in the Income Tax returns of the GM Group or
(B) are with respect to Income Taxes and are required to be filed on a separate
tax return basis for any taxable year (or period thereof) ending on or before
the Closing Date. Newco shall prepare or cause to be prepared and shall file or
cause to be filed all other tax returns required of HCS, HCCS and HCJ, or in
respect of their assets or activities (or the assets and activities of Galaxy
and HCSS transferred to Newco). Any such tax returns filed after the date of
this Agreement shall be prepared on a basis consistent with the last previous
such tax returns filed in respect of the HE Subsidiaries, unless HE or Newco, as
the case may be, concludes that there is no reasonable basis for such position.

                  4.02 Tax Sharing Agreements. From and after the Closing Date,
neither the Newco Group nor any member thereof shall be a party to or have any
liability under any tax sharing agreement or arrangement, other than this
Agreement, with any member of the GM Group.

                  4.03 Carryforwards and Carrybacks. Newco shall cause HCS, HCCS
and HCJ to elect, where permitted by law, to carry forward any net operating
loss, charitable contribution or other item arising after the Closing Date that
could, in the absence of such an election, be carried back to a taxable period
of the GM Group ending on or before the Closing Date in which HCS, HCCS and HCJ
were included in a consolidated tax return of the GM Group. Newco, on its own
behalf and on behalf of its affiliates, hereby waives any right to use or apply
any net operating loss, charitable contribution or other item (other than any
net capital loss, foreign tax credit or research and development credit which
are not permitted by law to be carried forward) of HCS, HCCS and HCJ for any tax
year ending on any date following the Closing Date to any period of HCS, HCCS,
and HCJ ending on or before the Closing Date and reserves the right to use or
apply any such net capital loss, foreign tax credit or research and development
credit of HCS, HCCS, and HCJ for any tax year ending on any date following the
Closing Date to any period of HCS, HCCS or HCJ ending on or before the Closing
Date, provided, however, that if any such net capital loss, foreign tax credit
or research and development credit shall be carried back to any such period,
Newco shall indemnify HE and its affiliates (other than HCS, HCCS and HCJ) for
all reasonable costs and expenses incurred by HE or any of such affiliates in
filing such claims or in connection with any audit of such claims.

                  4.04 Refunds. HE shall be entitled to retain, or receive
immediate payment from Newco or any of its subsidiaries or affiliates (including
HCS, HCCS and HCJ) of, any refund or credit with respect to Income Taxes
(including, without limitation, refunds and credits arising by reason of amended
tax returns filed after the Closing Date or otherwise) with respect to any tax
period ending on or before the Closing Date relating to the HE Subsidiaries;
provided, however, that (i) Newco, HCS, HCCS and HCJ shall be entitled to
retain, or receive immediate payment from HE of, any such refund or credit to
the extent that such refund or credit arises as a result of the use or
application (as provided in Section 4.03) of any net capital loss, foreign tax
credit or research and development credit of HCS, HCCS or HCJ for any tax year
ending on any date following the Closing Date to any period of HCS, HCCS or HCJ
ending on or before the Closing Date and (ii) to the extent that HE or any of
its affiliates (other than HCS, HCCS and HCJ) would, but for the carryback by
HCS, HCCS or HCJ of any such net capital loss, foreign tax credit or research
and development credit, be entitled to a refund or credit in respect of any net
capital loss, foreign tax credit or research and development credit of HE or any
of HE's affiliates (other than HCS, HCCS and HCJ), HE shall be entitled to
receive immediate payment from Newco of the amount of any such amount to the
extent Newco has previously received a refund or credit from a carryback to HE's
return. Newco and HCS, HCCS and HCJ shall be entitled to retain, or receive
immediate payment from HE of, any refund or credit with respect to Income Taxes
with respect to any taxable period beginning after the Closing Date relating to
HCS, HCCS and HCJ.

                  4.05 Method of Payment. Unless the parties otherwise agree,
all payments by a party pursuant to this Agreement shall be made by wire
transfer to a bank account designated from time to time by the other party. The
paying party shall also provide a notice of payment to the recipient.

                  4.06 Interest. If any payment hereunder is not timely paid,
interest shall accrue on the unpaid amount at the applicable federal, state or
local rate, as the case may be, for deficiencies. A payment will be deemed to be
timely paid only if actually received by the payee on or before the due date
thereof.

                  4.07     Cooperation; Document Retention; Confidentiality.

                  (a) Upon the reasonable request, HE and Newco shall promptly
provide (and shall cause their respective subsidiaries to provide) the
requesting party with such cooperation and assistance, documents and other
information, without charge, as may be necessary or reasonably helpful in
connection with (i) the preparation and filing of any original or amended tax
return, (ii) the conduct of any audit or other examination or any judicial or
administrative proceeding involving to any extent taxes or tax returns within
the scope of this Agreement, or (iii) the verification by a party of an amount
payable hereunder to, or receivable hereunder from, another party. Such
cooperation and assistance shall include, without limitation: the provision on
demand of books, records, documentation or other information relating to any
relevant tax return; the execution of any document that may be necessary or
reasonably helpful in connection with the filing of any tax return by GM, Newco
or any member of the GM Group or Newco Group, or in connection with any audit,
proceeding, suit or action of the type generally referred to in the preceding
sentence, including, without limitation, the execution of powers of attorney and
extensions of applicable statutes of limitations; the prompt and timely filing
of appropriate claims for refund; and the use of reasonable best efforts to
obtain any documentation from a governmental authority or a third party that may
be necessary or helpful in connection with the foregoing. Each party shall make
its employees and facilities available on a mutually convenient basis to
facilitate such cooperation.

                  (b) HE and Newco shall retain or cause to be retained all tax
returns, and all books, records, schedules, workpapers and other documents
relating thereto, until the expiration of all applicable statutes of limitations
(including any waivers or extensions thereof). The parties hereto shall notify
each other in writing of any waivers, extensions or expirations of applicable
statutes of limitations, and shall provide at least thirty (30) days prior
written notice of any intended destruction of the documents referred to in the
preceding sentence. A party giving such a notification shall not dispose of any
of the foregoing materials without first obtaining the written approval (which
may not be unreasonably withheld) of the notified party.

                  (c) Except as required by law or with the prior written
consent of the other party, all tax returns, documents, schedules, workpapers
and similar items made available under this Section 4.03 or otherwise pursuant
to this Agreement, and all information contained in any of the foregoing shall
be kept confidential by the parties hereto and their representatives, shall not
be disclosed to any other person or entity and shall be used only for the
purposes provided herein.

                  4.08 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
parties hereto, but no assignment (other than an assignment by HE of its rights
and obligations hereunder to another member of the GM Group to which HE shall
have assigned all of its right, title and interest in and to the Newco capital
stock then owned by HE or a subsidiary thereof) shall relieve any party's
obligations hereunder without the written consent of the other party.

                  4.09 Interpretation. Whenever reference in this Agreement is
made to a Section, such reference shall be to a Section hereof unless otherwise
indicated. The headings contained herein are for purposes of reference only and
shall not in any way affect the meaning and interpretation of this Agreement.
Whenever the words "include," "includes" or "including" are used herein, they
shall be deemed to be followed by the words "without limitation." This Agreement
shall not be construed for or against any party by reason of the authorship or
alleged authorship of any provision hereof or by reason of the status of the
respective parties.

                  4.10 Entire Understanding. This Agreement sets forth the
entire understanding of the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended without the written consent of each of
the parties hereto.

                  4.11 Conflict of Law. The validity, interpretation and
performance of this Agreement shall be controlled by and construed under the
laws of the State of Delaware (without reference to the choice of law
provisions).

                  4.12 Notices. All notices, requests, demands, statements,
bills and other communications under this Agreement shall be in writing and
shall be deemed to have been duly given when received, if personally delivered;
when transmitted, if transmitted by telecopy; the day after it is sent, if sent
for next day delivery to a domestic address by a recognized overnight delivery
service; and upon receipt, if sent by certified or registered mail, return
receipt requested. In each case, notice shall be sent:

                           (a)      To Hughes:

                                    Director, Taxes
                                    Hughes Electronics Corporation
                                    7200 Hughes Terrace
                                    P.O. Box 45066
                                    Los Angeles, California  90045-0066
                                    Telecopy:  (310) 568-7096

                           (b)      To Newco:

                                    Robert Hall
                                    Hughes Electronics Corporation
                                    7200 Hughes Terrace
                                    Los Angeles, California  90045-0066
                                    Telecopy:  (310) 568-7834

                                    and

                                    Kenneth N. Heintz
                                    Hughes Electronics Corporation
                                    7200 Hughes Terrace
                                    Los Angeles, California  90045-0066
                                    Telecopy:  (310) 568-6774

                  4.13 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

                  4.14 Disputes. To the extent not otherwise provided herein,
any dispute between the parties shall be finally resolved by the Accounting Firm
using the dispute resolution procedures set forth in Article 2 hereof.

                  4.15 Effective Date. This Agreement shall be effective as of
the Closing Date.

<PAGE>
                  EXECUTION COPY IN WITNESS WHEREOF, the parties have executed
this Income Tax Indemnification and Allocation Agreement as of the day and year
first above written.

                                          HUGHES ELECTRONICS CORPORATION

                                       By: /s/ Charles H. Noski
                                          --------------------------------
                                          Charles H. Noski
                                          Senior Vice President and
                                          Chief Financial Officer



                                          MAGELLAN INTERNATIONAL, INC.

                                       By: /s/ Charles H. Noski
                                          --------------------------------
                                          Charles H. Noski
                                          President

<PAGE>


                                    EXHIBIT C

                        Principal Stockholders Agreement






<PAGE>
                        PRINCIPAL STOCKHOLDERS AGREEMENT


                  This PRINCIPAL STOCKHOLDERS AGREEMENT (this "Agreement"),
dated September 20, 1996, is entered into by and among HUGHES COMMUNICATIONS,
INC., a California corporation ("HCI"), HUGHES COMMUNICATIONS GALAXY, INC., a
California corporation ("Galaxy"), SATELLITE COMPANY, L.L.C., a Nevada limited
liability company ("S Company"), UNIVISA SATELLITE HOLDINGS, INC., a Delaware
corporation which owns all of the outstanding Class B Common Stock of Panamsat
Corporation (the "Class B Holder"), the holders of Class A Common Stock of
Panamsat Corporation (the "Class A Holders"), and the Trustees of that certain
Voting Trust of certain holders of Class A Common Stock of Panamsat Corporation
(the "Class A Trustee," and together with S Company, the Class B Holder, and the
Class A Holders, the "Stockholders").

                                    RECITALS

                  A. Immediately prior to the execution of this Agreement,
Galaxy, HCI and Panamsat Corporation have entered into an Agreement and Plan of
Reorganization (as such agreement may hereafter be amended from time to time,
the "Reorganization Agreement"), and HCI, Galaxy, S Company and Grupo Televisa,
S.A. have entered into a Stock Contribution and Exchange Agreement (as such
agreement may hereafter be amended from time to time, the "Univisa Contribution
Agreement").

                  B. As an inducement and a condition to entering into the
Reorganization Agreement and the Univisa Contribution Agreement, HCI and Galaxy
have required that the Stockholders agree, and the Stockholders have agreed, to
enter into this Agreement.

                                    AGREEMENT

                  In consideration of the foregoing and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:

                           1. Certain Definitions. Capitalized terms used and
not defined herein have the respective meanings ascribed to them in the
Reorganization Agreement. For purposes of this Agreement:

                           "Beneficially Own" or "Beneficial Ownership" with
respect to any securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the Exchange Act),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person shall include securities
Beneficially Owned by all other Persons with whom such Person would constitute a
"group" within the meaning of Section 13(d) of the Exchange Act.
<PAGE>
                           "Common Stock" shall mean at any time the Class A
Common Stock, par value $.01 per share, the Class B Common Stock, $.01 per
share, and the Common Stock, par value $ .01 per share, of Panamsat Corporation.

                           "Existing Shares" shall mean the shares of Common
Stock owned by the Stockholders on the date hereof.

                           "Permitted Transfer" means a sale, transfer,
assignment or other disposition to a Permitted Transferee.

                           "Permitted Transferee" means, as to the Class A
Holders, any other Class A Holder and any person who is (A) the spouse or former
spouse of, or any lineal descendent of, or any spouse of such lineal descendant
of, or the grandparent, parent, brother or sister of, or spouse of such brother
or sister of, a Class A Holder or Permitted Transferee; (B) upon the death of
any Class A Holder or any Permitted Transferee of such person, the executors of
the estate of such Class A Holder or such Permitted Transferee, and any of such
Class A Holder's or such Permitted Transferee's heirs, testamentary trustees,
devisees, or legatees; (C) any trust principally for the benefit of one or more
of the foregoing Class A Holders or Permitted Transferees; (D) upon the
disability of any Class A Holder or Permitted Transferee, any guardian or
conservator of such Class A Holder or such Permitted Transferee; or (E) any
corporation, partnership or other entity if all of the beneficial ownership is
held by Class A Holders or Permitted Transferees; provided that in each case
such transferee assumes and agrees to perform and becomes a party to this
Agreement, agrees not to make an Acquisition Proposal, and agrees not to dissent
in the Merger, all on terms reasonably acceptable to HCI and Galaxy, and
provided further that as a result of any such transfer no Class A Common Stock
is converted into Common Stock, par value $ .01 per share, of Panamsat
Corporation. For purposes of this Agreement, when a Permitted Transferee has
acquired Shares in accordance herewith, such person shall be deemed a
"Stockholder" hereunder.

                           "Person" shall mean an individual, corporation,
limited liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity.

                           "Shares" shall mean the Existing Shares and any
shares of Common Stock acquired by any Stockholder in any capacity after the
date hereof and prior to the termination of this Agreement. "Shares" shall
include Shares acquired upon the exercise of options, warrants or rights, the
conversion or exchange of convertible or exchangeable securities, or by means of
purchase, dividend, distribution, gift, bequest, inheritance or as a successor
in interest in any capacity or otherwise. In the event of a stock dividend or
distribution, or any change in the Common Stock by reason of any stock dividend,
split-up, recapitalization, reclassification, combination, exchange of shares or
the like, the term "Shares" shall be deemed to refer to and include the Shares
as well as all such stock dividends and distributions and any shares into which
or for which any or all of the Shares may be changed, reclassified or exchanged
and appropriate adjustments shall be made to the terms and provisions of this
Agreement. "Shares" shall also include voting trust certificates issued in
respect of any Shares. Notwithstanding the foregoing, "Shares" shall not include
Common Stock issued upon exercise of Panamsat Corporation employee options
covering up to 200,000 shares, which options are outstanding on the date hereof.
<PAGE>
          2.        Voting of Shares; No Inconsistent Agreements.

                           (a) Each Stockholder hereby severally and not jointly
and solely with respect to the Shares held of record or Beneficially Owned by
such Stockholder, agrees that during the period commencing on the date hereof
and continuing until the termination of this Agreement in accordance with its
terms, at any meeting (whether annual or special and whether or not an adjourned
or postponed meeting) of the holders of Common Stock, however called, or in
connection with any written consent of the holders of Common Stock, such
Stockholder shall vote (or cause to be voted) the shares of Common Stock held of
record or Beneficially Owned by such Stockholder (i) in favor of the Merger, the
execution, delivery and performance of the Reorganization Agreement and the
approval and adoption of the terms thereof and each of the other actions
contemplated by the Reorganization Agreement and this Agreement and any actions
required in furtherance thereof and hereof (the "Subject Transactions"); (ii)
against any Acquisition Proposal and against any action or agreement that would
result in a breach in any respect of any covenant, representation or warranty or
any other obligation or agreement under the Reorganization Agreement or the
Univisa Contribution Agreement or this Agreement; and (iii) except as otherwise
agreed to in writing in advance by HCI and Galaxy, and regardless of the status
of the Merger and the transactions contemplated by this Agreement, the
Reorganization Agreement, or the Univisa Contribution Agreement, against the
following actions (other than pursuant to the terms of this Agreement, the
Reorganization Agreement, or the Univisa Contribution Agreement): (A) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving Panamsat Corporation or any of its Subsidiaries;
(B) any sale, lease or transfer by Panamsat Corporation of a material amount of
assets (including stock) of Panamsat Corporation or any of its Subsidiaries, or
a reorganization, restructuring, recapitalization, special dividend, dissolution
or liquidation of Panamsat Corporation or any of its Subsidiaries; or (C)(1) any
change in a majority of the persons who constitute the board of directors of
Panamsat Corporation or any of its Subsidiaries; (2) any change in the present
capitalization of Panamsat Corporation or any of its Subsidiaries including any
proposal to sell a substantial equity interest in Panamsat Corporation or any of
its Subsidiaries; (3) any amendment of Panamsat Corporation or any of its
Subsidiaries' charters or By-laws; (4) any other change in Panamsat Corporation
or any of its Subsidiaries' corporate structure or business; or (5) any other
action which, in the case of each of the matters referred to in clauses (C)(1),
(2), (3) or (4), is intended, or could reasonably be expected, to impede,
interfere with, delay, postpone, or materially adversely affect the Merger and
the transactions contemplated by this Agreement, the Reorganization Agreement
and the Univisa Contribution Agreement.

                           (b) Each Stockholder severally and not jointly agrees
that it shall not enter into any agreement or understanding with any Person the
effect of which would be inconsistent with or violative of the provisions and
agreements contained herein, including in this Section 2. Further, each
Stockholder severally and not jointly agrees that it will, if the Board of
Directors of Panamsat Corporation fails or refuses (other than as a result of
breach by HCI or any of its Affiliates of the Reorganization Agreement or
because HCI and its Affiliates will not or cannot satisfy the conditions
<PAGE>
precedent thereto) to submit the Subject Transactions to Panamsat Corporation
stockholders, vote all Shares held of record or Beneficially Owned by it to (i)
call or cause to be called a special meeting of stockholders of Panamsat
Corporation (or effect a written consent) to remove the directors of Panamsat
Corporation who have so failed or refused, or to increase the size of the Board
of Directors and elect a majority of new directors who will submit the Subject
Transactions to the stockholders of Panamsat Corporation for a vote, and (ii)
use its reasonable efforts to effect such removal and replacement, or increase
and election, and the submission of the Subject Transactions to the stockholders
of Panamsat Corporation; and (iii), at any time after initial approval by the
stockholders of Panamsat Corporation of the Subject Transactions, if so
requested by HCI, to approve all or any actions incident to the Subject
Transactions or the other matters referred to in this Section 2 by stockholder
written consent.

            3.        Other Stockholder Covenants.

                           (a) Restriction on Transfer; Proxies and
Non-interference. From the date hereof through the Closing Date or the earlier
termination of this Agreement in accordance with its terms, and except for
Permitted Transfers or as expressly permitted herein or by the Reorganization
Agreement or the Univisa Contribution Agreement in connection with the
transactions contemplated hereby and thereby, each Stockholder severally and not
jointly agrees that it shall not directly or indirectly:

                                (i) offer for sale, sell, transfer, tender,
pledge, encumber, assign or otherwise dispose of, or enter into any contract,
option or other arrangement or understanding with respect to, or consent to the
offer for sale, sale, transfer, tender, pledge, encumbrance, assignment or other
disposition of (collectively, "transfer"), any or all of the Shares or any
interest therein; provided that nothing in this Agreement shall in any manner
restrict the ability of the Stockholders to pledge or encumber any Shares in
connection with one or more bona fide loans or advances to such Stockholder by
one or more institutional lenders, but only if and so long as (A) each such
lender expressly (on behalf of itself and any transferee of the collateral)
assumes and agrees to perform and becomes a party to this Agreement, agrees not
to make an Acquisition Proposal, and agrees not to dissent in the Merger, which
agreement shall be on terms reasonably acceptable to HCI and Galaxy, (B) as a
result of such pledge or encumbrance the subject Shares are not converted into
Common Stock, par value $ .01 per share, of Panamsat Corporation, and (C), in
the event of any foreclosure or other sale or retention of Shares by such a
lender, the subject Shares are so converted (a loan or advance meeting such
requirements being herein called a "Loan");

                                (ii) grant any proxies or powers of attorney,
deposit the Shares into a voting trust or enter into a voting agreement with
respect to the Shares; provided that nothing in this Agreement shall in any
manner restrict the ability of any Stockholder to enter into any voting
agreement in connection with any Loan which is operative only upon default under
such Loan and is not inconsistent with this Agreement; or

                                (iii) take any action that would make any
representation or warranty of such Stockholder contained herein untrue or
incorrect or would result in a breach by such Stockholder of its obligations
<PAGE>
under this Agreement or a breach by Panamsat Corporation of its obligations
under the Reorganization Agreement.

Notwithstanding the foregoing, at any time or times prior to the Closing S
Company (and, indirectly, the Class B Holder), on the one hand, and the Class A
Holders as a group, on the other hand, and their respective Permitted
Transferees, shall each have the right to sell, directly or indirectly, up to an
aggregate of 2,500,000 Shares (i.e., up to an aggregate of 5,000,000 Shares
collectively); provided that, by mutual agreement between S Company and the
Class A Holders, the foregoing Share amounts may be increased to up to 5,000,000
Shares each (i.e., up to an aggregate of 10,000,000 Shares, collectively).
Except for Shares converted to Common Stock, par value $ .01 per share, of
Panamsat Corporation and sold in a registered public offering or pursuant to
Rule 144 under the Securities Act (which shall upon such sale cease to be
subject to this Agreement), Shares transferred pursuant to the next preceding
sentence may be transferred only if the Shares upon transfer are converted to
Common Stock, par value $ .01 per share, of Panamsat Corporation, and, on terms
reasonably acceptable to HCI and Galaxy, the transferee assumes and agrees to
perform and becomes a party to this Agreement, agrees not to make an Acquisition
Proposal, and not to dissent in the Merger. Notwithstanding any of the
foregoing, no transfer of Shares may be made during a period of up to 30 days
prior to the Closing commencing on such date as HCI shall notify the
Stockholders to cease transfers pursuant to this sentence.

                           (b) No Solicitation.

                                (i) From the date hereof through the Closing
Date or the earlier termination of this Agreement in accordance with its terms,
each Stockholder severally and not jointly agrees that it shall not, and shall
not permit any of its Subsidiaries, or any of its or their officers, directors,
employees, representatives, agents or Affiliates (including, without limitation,
any investment banker, attorney or accountant retained by any Stockholder) to,
directly or indirectly, enter into, solicit, initiate or continue any
discussions or negotiations with, or encourage or respond to any inquiries or
proposals by, or participate in any negotiations with, or provide any
information to, or otherwise cooperate in any other way with, any Person or
group, other than HCI, Galaxy and their Affiliates, concerning any Acquisition
Proposal. Each Stockholder severally and not jointly agrees that it will
immediately notify HCI and Galaxy if any discussions or negotiations are sought
to be initiated, any inquiry or proposal is made, or any information is
requested with respect to any Acquisition Proposal, and notify HCI and Galaxy of
the terms of any proposal which it may receive in respect of any such
Acquisition Proposal, including the identity of the prospective purchaser or
soliciting party if known.

                                (ii) Each Stockholder severally and not jointly
further agrees to use its best efforts as a stockholder to cause Panamsat
Corporation not to, directly or indirectly, solicit, initiate, seek, or
encourage (including by way of furnishing information or assistance), or take
other action to facilitate, any inquiries or the making of any proposal which
constitutes or may reasonably be expected to lead to, an Acquisition Proposal.
<PAGE>
                                (iii) The provisions of this Section 3(b) shall
not prohibit any director of Panamsat Corporation from taking actions in his
capacity as such which are permitted or required under the Reorganization
Agreement.

                           (c) Reliance. Each Stockholder understands and
acknowledges that HCI and Galaxy are entering into the Reorganization Agreement
and the Univisa Contribution Agreement in reliance upon each Stockholder's
execution and delivery of this Agreement.

                           (d) Further Assurances. From time to time, at HCI or
Galaxy's request and without further consideration, each Stockholder severally
and not jointly agrees that it shall execute and deliver such additional
documents and take all such further lawful action as may be necessary or
desirable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement. Without
limitation, each Class A Holder which is a party thereto and the Class A Trustee
agrees severally and not jointly that it will cause the Voting Trust Agreement
dated as of February 28, 1995 to be amended to the extent required (if any) to
permit each and all of them to enter into and perform this Agreement.

                           (e) Stockholder Termination Fee. In the event that
the Reorganization Agreement is terminated in circumstances under which the
Termination Fee is payable by Panamsat Corporation to HCI pursuant to Section
9.3 of the Reorganization Agreement, and any Acquisition Proposal is
consummated, then each Stockholder shall pay to HCI one business day after
determination of an amount (the "Stockholder Termination Fee") equal to the
product of (x) the number of Shares Beneficially Owned by such Stockholder on
the date hereof (as set forth on Exhibit A hereto), multiplied by (y) the excess
of (i) the per share value of consideration paid or payable in consequence of
consummation of the Acquisition Proposal (with the value of any non-cash
consideration being determined by agreement of HCI and such Stockholder) over
(ii) $30. In the event that the consideration paid or payable in consequence of
consummation of the Acquisition Proposal: (i) consists solely of cash, then the
Stockholder Termination Fee shall be payable solely in cash, or (ii) consists of
cash and other non-cash property, or solely non-cash property, then the
Stockholder Termination Fee shall be payable in cash and such non-cash property
in the same proportion as the cash bears to the value of the non-cash property
issued or issuable in consequence of consummation of the Acquisition Proposal
(as such value is determined above).

                  If HCI and such Stockholder fail to agree promptly on the
value of such non-cash consideration, then the parties shall appoint an
independent investment banking firm reasonably acceptable to HCI and such
Stockholder to act as arbitrator (the "Arbitrator"). Upon the selection of the
Arbitrator, HCI on the one hand and such Stockholder on the other shall deliver
to the Arbitrator and to each other their last and final offer concurrently in
writing (the "Certified Offers"). The Certified Offers shall list one amount
which the submitting party asserts is the appropriate valuation of such non-cash
consideration as of the date of submittal. The Arbitrator's sole role shall be
to select which one of the two Certified Offers most closely approximates the
valuation the Arbitrator would have determined for such non-cash consideration,
taking into account current market valuations of any publicly traded securities
which constitute such non-cash consideration. The Arbitrator shall notify the
parties of such determination. The determination of the Arbitrator shall be
binding on the parties. All costs and expenses of the Arbitrator shall be borne
by the parties whose Certified Offer is not selected.
<PAGE>
                  Each Stockholder acknowledges that the agreements contained in
this Section 3(e) are an integral part of the transactions contemplated by this
Agreement and the Reorganization Agreement. Accordingly, if the Stockholder
shall fail to pay when due any amounts which shall become due under Section 3(e)
hereof, the Stockholder shall in addition hereto pay to HCI all costs and
expenses (including fees and disbursements of counsel) incurred in collecting
such overdue amounts, together with interest on such overdue amounts from the
date such payment was required to be made until the date such payment is
received at a rate per annum equal to the "reference rate" as announced from
time to time by Bank of America, NT&SA. Any payment required to be made pursuant
to this Section 3(e) shall be made when due by wire transfer of immediately
available funds to an account designated by HCI.

                      4. Representations and Warranties of Stockholders.
Each Stockholder hereby severally and not jointly (and solely with respect to
itself and the Shares held of record or Beneficially Owned by such Stockholder)
represents and warrants to HCI and Galaxy as follows:

                           (a) Ownership of Shares. Such Stockholder is the
record and/or Beneficial Owner of the Existing Shares set forth on Exhibit A
hereto. On the date hereof, the Existing Shares constitute all of the Shares
owned of record or Beneficially Owned by such Stockholder. With respect to the
number of shares set forth opposite such Stockholder's name on Exhibit A hereto,
and with the exceptions noted thereon, such Stockholder has sole voting power
and sole power to issue instructions with respect to the matters set forth in
Sections 2 and 3 hereof, sole power of disposition, sole power of conversion,
sole power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Agreement, in each case with respect to all of the
Existing Shares with no limitations, qualifications or restrictions on such
rights, subject to applicable securities laws and the terms of this Agreement.
The execution and delivery of this Agreement does not cause an automatic
conversion of the Shares.

                           (b) Due Authorization. Such Stockholder is, as
applicable, duly organized, validly existing and in good standing under the laws
of its jurisdiction of organization, and has all requisite capacity, power and
authority to execute and deliver this Agreement and perform its obligations
hereunder. The execution and delivery by such Stockholder of this Agreement and
the performance by such Stockholder of its obligations hereunder have been duly
and validly authorized by such Stockholder and no other proceedings on the part
of the such Stockholder are necessary to authorize the execution, delivery or
performance of this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly and validly executed and
delivered by such Stockholder and constitutes a valid and binding agreement
enforceable against such Stockholder in accordance with its terms except to the
extent (i) such enforcement may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors rights and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought.
<PAGE>
                           (c) No Conflicts. Except for filings, authorizations,
consents and approvals contemplated by the Reorganization Agreement or the
Univisa Contribution Agreement and necessary for the consummation of the
transactions contemplated hereby and thereby, no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by such Stockholder
and the consummation by such Stockholder of the transactions contemplated hereby
and (ii) none of the execution and delivery of this Agreement by such
Stockholder, the consummation by such Stockholder of the transactions
contemplated hereby or compliance by such Stockholder with any of the provisions
hereof shall (A) conflict with or result in any breach of the organizational
documents of such Stockholder, (B) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Stockholder is a party or by which such
Stockholder or any of its properties or assets may be bound, or (C) violate any
order, writ, injunction, decree, judgment, statute, rule or regulation
applicable to such Stockholder or any of its properties or assets.

                           (d) No Encumbrances. Except as set forth on Exhibit
A, the Shares and the certificates representing such Shares are now, and at all
times during the term hereof, will be, held by such Stockholder, or by a
nominee, custodian or trust for the benefit of such Stockholder, free and clear
of all liens, claims, security interests, proxies, voting trusts or agreements,
understandings or arrangements or any other encumbrances whatsoever, except for
any such arising hereunder.

                           (e) No Finder's Fees. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial adviser's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
such Stockholder.

                     5. Representations and Warranties of HCI and Galaxy.
HCI and Galaxy jointly and severally represent and warrant to the Stockholders
as follows:

                           (a) Organization. Each of HCI and Galaxy is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, and has all requisite corporate power or other
power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by HCI and Galaxy of this
Agreement and the performance by HCI and Galaxy of their obligations hereunder
have been duly and validly authorized by their respective Board of Directors
and, except as contemplated by the Reorganization Agreement, no other corporate
proceedings on the part of HCI or Galaxy are necessary to authorize the
execution, delivery or performance of this Agreement or the consummation of the
transactions contemplated hereby.

                           (b) Agreement. This Agreement has been duly and
validly executed and delivered by HCI and Galaxy and constitutes a valid and
binding agreement of HCI and Galaxy enforceable against HCI and Galaxy in
accordance with its terms, except that (i) such enforcement may be subject to
<PAGE>
applicable bankruptcy, insolvency, or other similar laws, now or hereafter in
effect, affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought.

                           (c) No Conflicts. Except for filings, authorizations,
consents, and approvals contemplated by the Reorganization Agreement or the
Univisa Contribution Agreement and necessary for the consummation of the
transactions contemplated hereby and thereby, (i) no filing with, and no permit,
authorization, consent or approval of, any state or federal public body or
authority is necessary for the execution of this Agreement by HCI and Galaxy and
the consummation by HCI and Galaxy of the transactions contemplated hereby, and
(ii) none of the execution and delivery of this Agreement by HCI and Galaxy, the
consummation by HCI and Galaxy of the transaction contemplated hereby or
compliance by HCI and Galaxy with any of the provisions hereof shall (A)
conflict with or result in any breach of the charter or bylaws of HCI or Galaxy,
(B) result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third-party right of
termination, cancellation, material modifications or acceleration) under any of
the terms, conditions or provisions of any note, loan agreement, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which HCI or Galaxy is a party
or by which HCI or Galaxy of their respective properties or assets may be bound,
or (C) violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to HCI or Galaxy or their respective properties or assets.

                     6. Legend.

                           (a) Each Stockholder severally and not jointly agrees
with, and covenants to, HCI and Galaxy that such Stockholder shall not request
that Panamsat Corporation register the transfer (by book-entry or otherwise) of
any certificate or uncertificated interest representing any of the Shares,
unless such transfer is in compliance with this Agreement.

                           (b) Each Stockholder severally and not jointly agrees
that it shall promptly after the date hereof surrender to Galaxy all
certificates representing the Shares held by such Stockholder, and Galaxy shall
place the following legend on such certificates, which legend, except as
otherwise expressly provided in this Agreement, shall remain on such
certificates until the earliest of a sale thereof in a registered public
offering or pursuant to Rule 144 under the Securities Act or the termination of
this Agreement:

        "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT,
        DATED AS OF SEPTEMBER 20, 1996 AMONG CERTAIN STOCKHOLDERS, HUGHES
        COMMUNICATIONS, INC. AND HUGHES COMMUNICATIONS GALAXY, INC. THE SHARES
        ARE SUBJECT TO RESTRICTIONS ON TRANSFER OR ENCUMBRANCE AND VOTING. A
        COPY OF THIS AGREEMENT IS AVAILABLE AT THE PRINCIPAL OFFICE OF THE
        COMPANY."
<PAGE>
                     7. Termination. Subject to the next two sentences,
this Agreement shall terminate upon the earliest of (i) the Closing Date, (ii)
termination of the Reorganization Agreement in accordance with its terms, or
(iii) termination of the Univisa Contribution Agreement in accordance with its
terms; provided that the provisions of Section 3(e) and of Section 10 shall
survive any termination of this Agreement, and provided further that no such
termination shall relieve any party of liability for a breach hereof prior to
termination. If the Reorganization Agreement is terminated and a termination fee
is payable pursuant to Section 9.3 thereof, at the election of HCI and Galaxy,
this Agreement shall not terminate and the Stockholders will vote their Shares
as provided in Section 2(a). In any event, this Agreement shall terminate no
later than twenty-four (24) months after the date hereof. Any approval, adoption
or consent by any Stockholder pursuant to Section 3(a) shall be null and void ab
initio if the Reorganization Plan or the Univisa Contribution Agreement is
terminated other than pursuant to or as a result of Section 9.3 of the
Reorganization Agreement.

                      8. Confidentiality and Public Announcements. The
parties recognize that successful consummation of the transactions contemplated
by this Agreement may be dependent upon confidentiality with respect to the
matters referred to herein. In this connection, pending public disclosure
thereof, each of the parties hereto severally and not jointly agrees not to
disclose or discuss such matters with anyone not a party to this Agreement
(other than its counsel, advisors, corporate parents and Affiliates) without the
prior written consent of the other parties hereto, except for filings required
pursuant to the Exchange Act and the rules and regulations thereunder or
disclosures its counsel advises are necessary in order to fulfill its
obligations imposed by law or the requirements of any securities exchange. At
all times during the term of this Agreement, the parties hereto will consult
with each other before issuing or making any reports, statements or releases to
the public with respect to this Agreement or the transactions contemplated
hereby and will use good faith efforts to agree on the text of public reports,
statements or releases. For purposes of this Section, any consultation or
consent required of HCI or Galaxy may be obtained from either, and any
consultation or consent required from the Stockholders may be obtained from (x)
in respect of Class A Holders and the Class A Trustee, Mary Anselmo, and (y) in
respect of the Class B Holder and S Company, Lawrence Dam.

                      9. Voting Agreement. Each of HCI and Galaxy agrees
that it shall vote (or cause to be voted) all shares of Common Stock with
respect to which HCI or Galaxy has voting power in favor of the Merger, the
execution and delivery of the Reorganization Agreement and the Univisa
Contribution Agreement and the approval and adoption of the terms thereof and
each of the other actions contemplated by the Reorganization Agreement and the
Univisa Contribution Agreement and any action required in furtherance thereof.
<PAGE>
                      10. General Provisions.

                           (a) Nonsurvival of Representations, Warranties and
Agreements. Except as provided in Section 7, none of the representations,
warranties, covenants and agreements in this Agreement shall survive the Closing
Date.

                           (b) Expenses. Whether or not the transactions
contemplated hereby are consummated, all costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses, except as otherwise specifically
noted herein or in the Reorganization Agreement.

                           (c) Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:

                           (i) if to HCI or Galaxy, to:

                                    Hughes Communications, Inc.
                                    1500 Hughes Way
                                    Long Beach, CA  90810-9928
                                    Attention:  Jerald F. Farrell, President
                                    Telephone:       (310) 525-5010
                                    Telecopy:        (310) 525-5015

       with copies to:

                                    Latham & Watkins
                                    633 West Fifth Street, Suite 4000
                                    Los Angeles, California 90071
                                    Attention:  Bruce R. Lederman, Esq.
                                    Telephone:       (213) 485-1234
                                    Telecopy:        (213) 891-8763

                           (ii) if to the Stockholders, to the respective
addresses and with the copies set forth on Exhibit A.

                           (d) Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". This Agreement shall not be construed for or
<PAGE>
against either party by reason of the authorship or alleged authorship of any
provision hereof or by reason of the status of the respective parties. All terms
defined in this Agreement in the singular shall have comparable meanings when
used in the plural, and vice versa, unless otherwise specified.

                           (e) Entire Agreement; No Third-Party Beneficiaries.
This Agreement constitutes the entire agreement and supersedes all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof and is not intended to confer upon any
person other than the parties hereto any rights or remedies hereunder.

                           (f) Assignment. Except in connection with Permitted
Transfers or as permitted in Section 3(a), neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned (whether by
operation of law or otherwise) by any Stockholder without the consent of HCI and
Galaxy, or by HCI or Galaxy without the consent of the Stockholders holding 66_%
of the Shares subject to this Agreement. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.

                           (g) Governing Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware (without reference to the choice of law provisions),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.

                           (h) Severability. Each party agrees that, should any
court or other competent authority hold any provision of this Agreement or part
hereof to be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby. Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible. Except as
otherwise contemplated by this Agreement, to the extent that a party hereto took
an action inconsistent herewith or failed to take action consistent herewith or
required hereby pursuant to an order or judgment of a court or other competent
authority, such party shall incur no liability or obligation unless such party
did not in good faith seek to resist or object to the imposition or entering of
such order or judgment.

                           (i) Injunctive Relief. The parties acknowledge that
it will be impossible to measure in money the damages that would be suffered if
the parties fail to comply with any of the obligations herein imposed on them
and that in the event of any such failure, an aggrieved person or entity will be
irreparably damaged and will not have an adequate remedy at law. Any such person
or entity shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.
<PAGE>
                           (j) Attorneys' Fees. If any party to this Agreement
brings an action to enforce its rights under this Agreement, the prevailing
party shall be entitled to recover its costs and expenses, including without
limitation reasonable attorneys' fees, incurred in connection with such action,
including any appeal of such action.

                           (k) Cumulative Remedies. All rights and remedies of
either party hereto are cumulative of each other and of every other right or
remedy such party may otherwise have at law or in equity, and the exercise of
one or more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.

                           (l) Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when executed and delivered by each of the
parties.

                           (m) Amendments, Waivers, Etc. This Agreement may not
be amended, changed, supplemented, waived or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto.

                           (n) Binding Agreement. Each Stockholder agrees that
this Agreement and the obligations hereunder shall attach to the Shares and,
except as permitted in Section 3(a), shall be binding upon any person or entity
to which legal or Beneficial Ownership of such shares shall pass, whether by
operation of law or otherwise, including, without limitation, such Stockholder's
heirs, distributees, guardians, administrators, executors, legal
representatives, or successors or other transferees (for value or otherwise) and
any other successors in interest. Notwithstanding any transfer of Shares, except
as provided in Section 3(a), the transferor shall remain liable for the
performance of all obligations under this Agreement of the transferor.

                           (o) Obligations of the Stockholders. The liabilities
and obligations of each Stockholder under any provision of this Agreement are
several and not joint and apply solely to such Stockholder and to the Shares
held of record or Beneficially Owned by such Stockholder. No Stockholder shall
have any liability or obligation under this Agreement for any act, omission or
breach by any other Stockholder.

                           (p) Service of Process. Each of the parties hereto
irrevocably consents to the service of any process, pleading, notices or other
papers by the mailing of copies thereof by registered, certified or first class
mail, postage prepaid, to such party at such party's address set forth herein,
or by any other method provided or permitted under Delaware law. Additionally,
each party hereby appoints RL&F Service Corp., One Rodney Square, Wilmington,
Delaware 19801 as agent for service of process in Delaware.

                           (i) Consent and Jurisdiction. Each party irrevocably
and unconditionally agrees and consents that any suit, action or other legal
proceeding arising out of or related to this Agreement shall be brought and
heard in New Castle County, State of Delaware and each party irrevocably
consents to personal jurisdiction in any and all tribunals in said County.
<PAGE>
                  IN WITNESS WHEREOF, the parties have executed this Principal
Stockholders Agreement as of the date first written above.

                                     HUGHES COMMUNICATIONS, INC.

                                     By: /s/ Jerald F. Farrell
                                        ---------------------------
                                        Jerald F. Farrell
                                        President


                                     HUGHES COMMUNICATIONS GALAXY, INC.

                                     By: /s/ Jerald F. Farrell
                                        ---------------------------
                                        Jerald F. Farrell
                                        President


                                     SATELLITE COMPANY, L.L.C.

                                     By: /s/ Guillermo Canedo White
                                        ---------------------------
                                        Guillermo Canedo White
                                        Authorized Signatory


                                     UNIVISA SATELLITE HOLDINGS, INC.

                                     By: /s/ Lawrence W. Dam
                                        ---------------------------
                                        Lawrence W. Dam
                                        President


<PAGE>
                              CLASS A STOCKHOLDERS


               /s/ Mary Anselmo
      -------------------------------------------------------------------------
      Name:    Mary Anselmo, individually, and as a trustee of the Article VII
               Trust created by the RENE ANSELMO REVOCABLE TRUST DATED JUNE 10,
               1994 and as a successor trustee under the Voting Trust Agreement
               dated as of February 28, 1995 and as a trustee of the RAYCE
               ANSELMO TRUST DATED DECEMBER 23, 1991


               /s/ Frederick A, Landman
      -------------------------------------------------------------------------
      Name:    Frederick A. Landman, individually and as a trustee of the
               Article VII Trust created by the RENE ANSELMO REVOCABLE TRUST
               DATED JUNE 10, 1994 and as a successor trustee under the Voting
               Trust Agreement dated as of February 28, 1995


               /s/ Lourdes Saralegui
      -------------------------------------------------------------------------
      Name:    Lourdes Saralegui, individually and as a trustee of the Article
               VII Trust created by the RENE ANSELMO REVOCABLE TRUST DATED JUNE
               10, 1994 and as a successor trustee under the Voting Trust
               Agreement dated as of February 28, 1995


               /s/ Pier Landman
      -------------------------------------------------------------------------
      Name:    Pier Landman, individually and as the sole trustee of the CHLOE
               LANDMAN TRUST DATED JUNE 10, 1988 and the sole trustee of the
               RISSA LANDMAN TRUST DATED JUNE 10, 1988


               /s/ Edward J. Landau
      -------------------------------------------------------------------------
      Name:    Edward J. Landau, as co-trustee of the FREDERICK A. LANDMAN
               IRREVOCABLE TRUST DATED DECEMBER 22, 1995


               /s/ Patrick J. Costello
      -------------------------------------------------------------------------
      Name:    Patrick J. Costello, as co-trustee of the FREDERICK A. LANDMAN
               IRREVOCABLE TRUST DATED DECEMBER 22, 1995


               /s/ Reverge Anselmo
      -------------------------------------------------------------------------
      Name:    Reverge Anselmo, individually




<PAGE>


                                    Exhibit A
                       to Principal Stockholders Agreement
--------------------------------------------------------------------------------
                                                NUMBER OF SHARES
                                    ............................................
NAME AND ADDRESS FOR NOTICE         CLASS A           CLASS B           COMMON 
                                   OF RECORD         OF RECORD        OF RECORD
                                  BENEFICIARY       BENEFICIARY      BENEFICIARY
--------------------------------------------------------------------------------
HCI
Galaxy
Satellite Company, L.L.C.
Univisa Satellite Holdings, Inc.
Mary Anselmo
Mary Anselmo, as Trustee
Reverge Anselmo
Reverge Anselmo, as Trustee
Patrick Costello, Trustee
Edward J. Landau, Trustee
Frederick A. Landman
Frederick A. Landman, as Trustee
Pier Landman, Trustee

               TOTAL                 0.00             0.00                 0.00


                                   Encumbrances:
                                  Notice Copies:

Note A:

                  All of the Shares listed opposite the names of the Class A
Holders above are subject to the provisions of a Voting Trust Agreement dated as
of February 28, 1995 among the Class A Holders, a copy of which has been made
available to HCI and Galaxy, and are owned of record by the Class A Trustees. In
addition, ___________________ has the sole dispositive power over the Shares
listed opposite the Article VII Trust created by the ____________ Revocable
Trust dated June 10, 1994 and the Shares listed opposite their name above.

<PAGE>





                                    EXHIBIT D

                         Univisa Contribution Agreement





                  See Exhibit 2.4 to Form 10-Q filed herewith.

<PAGE>






                                    EXHIBIT E

                          DTH Option Purchase Agreement





                See Exhibit 10.13.1 to Form 10-Q filed herewith.


<PAGE>







                                    EXHIBIT F

                          Registration Rights Agreement


<PAGE>
EXHIBIT F
---------
                                                     
                          REGISTRATION RIGHTS AGREEMENT


                  This REGISTRATION RIGHTS AGREEMENT (this "Agreement"), dated
as of _________________, 199__, is entered into by and among MAGELLAN
INTERNATIONAL, INC., a Delaware corporation (the "Company"), and the persons
listed on the signature page hereof (the "Stockholders").

                                    RECITALS

                           A. The Company and the Stockholders desire to enter
into this Agreement for the purpose of granting to the Stockholders certain
rights with respect to registering under the Securities Act of 1933, as amended,
shares of Common Stock, par value $.01 per share, of the Company.

                           B. The Common Stock is being acquired by the
Stockholders pursuant to the transactions (the "Transactions") contemplated by
the Agreement and Plan of Reorganization, dated as of September 20, 1996, among
Panamsat Corporation, Hughes Communications, Inc., and the Company, among others
(the "Plan of Reorganization"), and the Stock Contribution and Exchange
Agreement, dated as of September 20, 1996, among Satellite Company, L.L.C.,
Hughes Communications, Inc., and the Company, among others (the "Exchange
Agreement").

                           C. The Stockholders are also parties to a Stockholder
Agreement of even date (the "Stockholder Agreement").

                                    AGREEMENT

                  In consideration of the Recitals and mutual promises contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties, intending to be legally bound,
hereby agree as follows:

                           1. Definitions. As used in this Agreement, the
following terms shall have the following meanings:

                  "Advice" shall have the meaning set forth in Section 5 hereof.

                  "Affiliate" means, with respect to any specified person, any
other person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified person. For the purposes of this
definition, "control" when used with respect to any specified person, means the
power to direct the management and policies of such person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.

                  "Business Day" means any day that is not a Saturday, a Sunday
or a legal holiday on which banking institutions in the State of New York are
not required to be open.

                  "Capital Stock" means, with respect to any person, any and all
shares, interests, participations or other equivalents (however designated) of
corporate stock issued by such person, including each class of common stock and
preferred stock of such person.

                  "Class A Holder" means a Holder whose Common Stock was
received in the Transactions in respect of the Class A Common Stock of Panamsat
Corporation.

                  "Class B Holder" means a Holder whose Common Stock was
received in the Transactions pursuant to the Exchange Agreement.

                  "Common Stock" means the Common Stock, par value $0.01 per
share, of the Company issued to any Holder named on the signature pages hereof
in the Transactions or any other shares of capital stock or other securities of
the Company into which such shares of Common Stock shall be reclassified or
changed, including, by reason of a merger, consolidation, reorganization or
recapitalization. If the Common Stock has been so reclassified or changed, or if
the Company pays a dividend or makes a distribution on the Common Stock in
shares of capital stock or subdivides (or combines) its outstanding shares of
Common Stock into a greater (or smaller) number of shares of Common Stock, a
share of Common Stock shall be deemed to be such number of shares of stock and
amount of other securities to which a holder of a share of Common Stock
outstanding immediately prior to such change, reclassification, exchange,
dividend, distribution, subdivision or combination would be entitled.

          "Company" shall have the meaning set forth in the heading hereof.

          "Delay Period" shall have the meaning set forth in Section 2(d)
hereof.

          "Demand Notice" shall have the meaning set forth in Section 2(a)
hereof.

          "Demand Registration" shall have the meaning set forth in Section 2(b)
hereof.

          "Effectiveness Period" shall have the meaning set forth in Section
2(d) hereof.

          "Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.

          "Hold Back Period" shall have the meaning set forth in Section 4
hereof.

          "Holder" means a person who owns Registrable Shares and is either (i)
a Stockholder or (ii) a Permitted Transferee.

          "Inclusion Notice" shall have the meaning set forth in Section 2(a).

          "Hughes Communications, Inc. Holder" means Hughes Communications, Inc.
and any Holder whose Common Stock was issued to Hughes Communications, Inc. in
the Transactions.

          "Interruption Period" shall have the meaning set forth in Section 5
hereof.

          "Permitted Assignee" means a Holder who acquires (a) more than $ 15
million in value of Common Stock at the date of transfer from a Holder, or (b)
Common Stock from a Holder in a transfer in which consent to assignment of this
Agreement is granted pursuant to Section 10(e), in either case in a transfer
exempt pursuant to Rule "4(1-1/2)" (or any similar private transfer exemption),
provided that in each case the transferee assumes and agrees to perform and
becomes a party to this Agreement.

          "Permitted Transferees" means, as to any Hughes Communications, Inc.
Holder, any controlled Affiliate of GM or any Permitted Transferee; as to S
Company, Grupo Televisa, S.A., any controlled Affiliate of Grupo Televisa, S.A.,
or any Permitted Transferee; and as to the Class A Holders, (A) any other Class
A Holder, (B) any person who is the spouse or former spouse of, or any lineal
descendent of, or any spouse of such lineal descendant of, or the grandparent,
parent, brother or sister of, or spouse of such brother or sister of, a Class A
Holder or Permitted Transferee of such person; (C) upon the death of any Class A
Holder or any Permitted Transferee of such person, the executors of the estate
of such Class A Holder or Permitted Transferee, any of such Class A Holder's or
such Permitted Transferee's heirs, testamentary trustees, devisees, or legatees;
(D) any trust principally for the benefit of one or more of the foregoing Class
A Holders or Permitted Transferees; (E) upon the disability of any Class A
Holder or Permitted Transferee, any guardian or conservator of such Class A
Holder or Permitted Transferee; or (F) any corporation, partnership or other
entity if all of the beneficial ownership is held by Class A Holders or any
Permitted Transferees; and as to any Stockholders, any person who is a Permitted
Assignee; provided that in each case such transferee assumes and agrees to
perform and becomes a party to this Agreement.

          "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.

          "Piggyback Registration" shall have the meaning set forth in Section 3
hereof.

          "Prospectus" means the prospectus included in any Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Registrable Shares covered by such Registration Statement and all other
amendments and supplements to such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such prospectus.

          "Registrable Shares" means shares of Common Stock unless (i) they have
been effectively registered under Section 5 of the Securities Act and disposed
of pursuant to an effective Registration Statement, or (ii) all of such Common
Stock of a Holder can be freely sold and transferred without restriction under
Rule 144 or Rule 145 under the Securities Act or any successor rule such that,
after any such transfer referred to in this clause (ii), such securities may be
freely transferred without restriction under the Securities Act. Notwithstanding
the foregoing, any shares of Common Stock held by a Stockholder shall be
"Registrable Shares" until such Stockholder ceases to own at least 1% of the
then outstanding Common Stock, $ .01 par value, of the Company. Further, no
Holder who is not a Stockholder shall be deemed to own Registrable Shares after
five years from the date hereof.

          "Registration" means registration under the Securities Act of an
offering of Registrable Shares pursuant to a Demand Registration or a Piggyback
Registration.

          "Registration Period" means, as to any Holder, the period beginning on
the date hereof and ending on the date when such Holder no longer owns any
Registrable Shares.

          "Registration Statement" means any registration statement under the
Securities Act of the Company that covers any of the Registrable Shares pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration statement, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by
reference or deemed to be incorporated by reference in such registration
statement.

          "SEC" means the Securities and Exchange Commission.

          "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

          "Shelf Registration" shall have the meaning set forth in Section 2(b)
hereof.

          "Stockholder Agreement" shall have the meaning set forth in Recital C.

          "Transactions" shall have the meaning set forth in Recital B.

          "Underwritten Registration or Underwritten Offering" means a
registration under the Securities Act in which securities of the Company are
sold to an underwriter for reoffering to the public.

                     2.  Demand Registration.

                     (a) Subject to the last sentence of this Section 2(a), any
Holder shall have the right during the Registration Period, by written notice
(the "Demand Notice") given to the Company, to request the Company to register
under and in accordance with the provisions of the Securities Act all or any
portion of the Registrable Shares designated by such Holders; provided, however,
that the aggregate value (at the respective dates of such notices) of
Registrable Shares requested to be registered pursuant to any Demand Notice and
pursuant to any related Inclusion Notices received pursuant to the following
sentence shall be at least $ 100 million. Upon receipt of any such Demand
Notice, the Company shall promptly notify all other Holders of the receipt of
such Demand Notice and allow them the opportunity to include Registrable Shares
held by them in the proposed registration by submitting their own written notice
to the Company requesting inclusion of a specified number of such Holders'
Registrable Securities (the "Inclusion Notice"). In connection with any Demand
Registration in which more than one Holder participates, in the event that such
Demand Registration involves an underwritten offering and the managing
underwriter or underwriters participating in such offering advise in writing the
Holders of Registrable Shares to be included in such offering that the total
number of Registrable Shares to be included in such offering exceeds the amount
that can be sold in (or during the time of) such offering without delaying or
jeopardizing the success of such offering (including the price per share of the
Registrable Shares to be sold), then the amount of Registrable Shares to be
offered for the account of such Holders shall be reduced pro rata on the basis
of the number of Registrable Shares to be registered by each such Holder;
provided if the registration of Registrable Shares held by Mary Anselmo is
necessary in connection with any payment of estate taxes by her estate, such
registration by the estate of Mary Anselmo shall have priority over any
registration of Registrable Shares by a Class B Holder or any Holder who
acquired such securities directly or indirectly from or through a Class B
Holder. The Class A Holders as a group and the Class B Holders as a group shall
each be entitled to three Demand Registrations pursuant to this Section 2;
Hughes Communications, Inc. shall be entitled to six Demand Registrations
pursuant to this Section 2; if any such Demand Registration does not become
effective or is not maintained for a period (whether or not continuous) of at
least 180 days (or such shorter period as shall terminate when all the
Registrable Shares covered by such Demand Registration (other than any shares
reserved for issuance upon exercise of the underwriters' overallotment option)
have been sold pursuant thereto), the affected Holders will be entitled to an
addition Demand Registration pursuant hereto. It is agreed that the registration
of Registrable Shares pursuant to an Inclusion Notice shall not be deemed to be
a Demand Registration. Nothing in this Section 2(a) shall limit any rights
pursuant to Section 3 hereof. Nothing in this Agreement shall limit the rights
and obligations of the parties under the Stockholder Agreement, including
pursuant to Sections 2(a) and 2(b) thereof. Notwithstanding anything herein to
the contrary, the exercise of each Demand Registration under this Section 2(a)
by the Class A Holders shall require the approval of the Class A Holders, and
their Permitted Transferees, owning a majority of the Registrable Shares then
owned by all Class A Holders and their Permitted Transferees.

                     (b) The Company, within 45 days of the date on which the
Company receives a Demand Notice given by Holders in accordance with Section
2(a) hereof, shall file with the SEC, and the Company shall thereafter use
commercially reasonable efforts to cause to be declared effective, a
Registration Statement on the appropriate form for the registration and sale, in
accordance with the intended method or methods of distribution, of the total
number of Registrable Shares specified by the Holders in such Demand Notice,
which may include a "shelf" registration (a "Shelf Registration") pursuant to
Rule 415 under the Securities Act (a "Demand Registration").

                     (c) The Company shall use commercially reasonable efforts
to cause the Registration Statement to be declared effective and to keep each
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of the Registrable Shares covered thereby (i) in the
case of a Registration that is not a Shelf Registration, for a period of 90 days
from the date on which the SEC declares such Registration Statement effective
and (ii) in the case of a Shelf Registration, for a period of 180 days from the
date on which the SEC declares such Registration Statement effective, in either
case (x) until all the Registrable Shares covered by such Registration Statement
(other than any shares reserved for issuance upon exercise of the underwriters'
overallotment option) have been sold pursuant to such Registration Statement,
and (y) as such period may be extended pursuant to this Section 2.

                     (d) The Company shall be entitled to postpone the filing of
any Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 2, or suspend the use of any effective
Registration Statement under this Section 2, for a reasonable period of time,
but not in excess of 90 days (a "Delay Period"), if the chief executive officer
or chief financial officer of the Company determines that in such executive
officer's reasonable judgment and good faith the registration and distribution
of the Registrable Shares covered or to be covered by such Registration
Statement would materially interfere with any pending material financing,
acquisition or corporate reorganization or other material corporate development
involving the Company or any of its subsidiaries or would require premature
disclosure thereof and promptly gives the Holders written notice of such
determination, containing a general statement of the reasons for such
postponement and an approximation of the period of the anticipated delay;
provided, however, that (i) the aggregate number of days included in all Delay
Periods during any consecutive 12 months shall not exceed the aggregate of (x)
120 days minus (y) the number of days occurring during all Hold Back Periods and
Interruption Periods during such consecutive 12 months and (ii) a period of at
least 60 days shall elapse between the termination of any Delay Period, Hold
Back Period or Interruption Period and the commencement of the immediately
succeeding Delay Period. If the Company shall so postpone the filing of a
Registration Statement, the Holders of Registrable Shares to be registered shall
have the right to withdraw the request for registration by giving written notice
from the Holders of a majority of the Registrable Shares that were to be
registered to the Company within 45 days after receipt of the notice of
postponement or, if earlier, the termination of such Delay Period (and, in the
event of such withdrawal, such request shall not be counted for purposes of
determining the number of requests for registration to which the Holders of
Registrable Shares are entitled pursuant to this Section 2). The time period for
which the Company is required to maintain the effectiveness of any Registration
Statement shall be extended by the aggregate number of days of all Delay
Periods, all Hold Back Periods and all Interruption Periods occurring during
such Registration and such period and any extension thereof is hereinafter
referred to as the "Effectiveness Period." The Company shall not be entitled to
initiate a Delay Period unless it shall (A) to the extent permitted by
agreements with other security holders of the Company, concurrently prohibit
sales by such other security holders under registration statements covering
securities held by such other security holders and (B) in accordance with the
Company's policies from time to time in effect, forbid purchases and sales in
the open market by senior executives of the Company.

                     (e) The Company shall not include any securities that are
not Registrable Shares in any Registration Statement filed pursuant to this
Section 2 without the prior written consent of (i) the Class A Holders of a
majority in number of the Registrable Shares held by Class A Holders covered by
such Registration Statement, and (ii) the Class B Holder(s) of a majority in
number of the Registrable Shares held by such Class B Holders covered by such
Registration Statement, and (iii) Hughes Communications, Inc. Holders with
respect to Registrable Shares held by such Hughes Communications, Inc. Holders
covered by such Registration Statement.

                     (f) Holders of a majority in number of the Registrable
Shares to be included in a Registration Statement pursuant to this Section 2
may, at any time prior to the effective date of the Registration Statement
relating to such Registration, revoke such request by providing a written notice
to the Company revoking such request. The Holders of Registrable Shares who
revoke such request shall reimburse the Company for all its out-of-pocket
expenses incurred in the preparation, filing and processing of the Registration
Statement; provided, however, that, if such revocation was pursuant to Section
2(d) (for a postponement) or was based on the Company's failure to comply in any
material respect with its obligations hereunder, such reimbursement shall not be
required, and such registration shall not count against the maximum number of
Demand Registrations to which the applicable Holders are entitled under Section
2(a). In addition, if pursuant to the terms of this Section 2(f), the Holders
reimburse the Company for its out of pocket expenses incurred in the
preparation, filing and processing of any Registration Statement requested, and
subsequently revoked by such Holder(s), such registration shall not count
against the maximum number of Demand Registrations to which the applicable
Holder(s) are entitled under Section 2(a).

                      3.        Piggyback Registration.

                     (a) Right to Piggyback. If at any time during the
Registration Period the Company proposes to file a registration statement under
the Securities Act with respect to a public offering of securities of the same
type as the Registrable Shares pursuant to a firm commitment underwritten
offering solely for cash for its own account (other than a registration
statement (i) on Form S-8 or any successor forms thereto, or (ii) filed solely
in connection with a dividend reinvestment plan or employee benefit plan of the
Company or its Affiliates) or for the account of any holder of securities of the
same type as the Registrable Shares (to the extent that the Company has the
right to include Registrable Shares in any registration statement to be filed by
the Company on behalf of such holder), then the Company shall give written
notice of such proposed filing to the Holders at least 15 days before the
anticipated effective date. Such notice shall offer the Holders the opportunity
to register such amount of Registrable Shares as they may request (a "Piggyback
Registration"). Subject to Section 3(b) hereof, the Company shall include in
each such Piggyback Registration all Registrable Shares with respect to which
the Company has received written requests for inclusion therein within 10 days
after notice has been given to the Holders. Each Holder shall be permitted to
withdraw all or any portion of the Registrable Shares of such Holder from a
Piggyback Registration at any time prior to the effective date of such Piggyback
Registration; provided, however, that if such withdrawal occurs after the filing
of the Registration Statement with respect to such Piggyback Registration, the
withdrawing Holders shall reimburse the Company for the portion of the
registration expenses payable with respect to the Registrable Shares so
withdrawn.

                     (b) Priority on Piggyback Registrations. The Company shall
permit the Holders to include all such Registrable Shares on-the-same terms and
conditions as any similar securities, if any, of the Company included therein.
Notwithstanding the foregoing, if the Company or the managing underwriter or
underwriters participating in such offering advise the Holders in writing that
the total amount of securities requested to be included in such Piggyback
Registration exceeds the amount which can be sold in (or during the time of)
such offering without delaying or jeopardizing the success of the offering
(including the price per share of the securities to be sold), then the amount of
securities to be offered for the account of the Holders and other holders of
securities who have piggyback registration rights with respect thereto shall be
reduced (to zero if necessary) pro rata on the basis of the number of common
stock equivalents requested to be registered by each such Holder or holder
participating in such offering.

                     (c) Right to Abandon. Nothing in this Section 3 shall
create any liability on the part of the Company to the Holders if the Company in
its sole discretion should decide not to file a registration statement proposed
to be filed pursuant to Section 3(a) hereof or to withdraw such registration
statement subsequent to its filing and prior to the later of its effectiveness
or the release of the Registrable Shares for public offering by the managing
underwriter, in the case of an underwritten public offering, regardless of any
action whatsoever that a Holder may have taken, whether as a result of the
issuance by the Company of any notice hereunder or otherwise.

                4. Holdback Agreement. If (i) the Company shall file a
registration statement with respect to the Common Stock or similar securities or
securities convertible into, or exchangeable or exercisable for, such securities
and (ii) the Company (in the case of a nonunderwritten public offering by the
Company pursuant to such registration statement) advises the Holders in writing
that a public sale or distribution of Registrable Shares would materially
adversely affect such offering or the managing underwriter or underwriters (in
the case of an underwritten public offering by the Company pursuant to such
registration statement) advises the Company in writing (in which case the
Company shall notify the Holders) that a public sale or distribution of
Registrable Shares would have material adverse impact on such offering, then
each Holder shall, to the extent not inconsistent with applicable law, refrain
from effecting any public sale or distribution of Registrable Shares during the
10 days prior to the effective date of such registration statement and until the
earliest of (A) the abandonment of such offering, (B) 90 days from the effective
date of such registration statement and (C) if such offering is an underwritten
offering, the termination of any "hold back" period obtained by the underwriter
or underwriters in such offering from the Company in connection therewith (each
such period, a "Hold Back Period").

                5. Registration Procedures. In connection with the
registration obligations of the Company pursuant to and in accordance with
Sections 2 and 3 hereof (and subject to Sections 2 and 3 hereof), the Company
shall use commercially reasonable efforts to effect such registration to permit
the sale of such Registrable Shares in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible (but subject to Sections 2 and 3 hereof):

                     (a) At least ten (10) business days before filing a
Registration Statement or prospectus or any amendments or supplements thereto,
furnish to the Holders who are participating in such Registration Statement and
the underwriters, if any, copies of all such documents proposed to be filed,
which documents will be subject to the review of such Holders and such
underwriters (and their respective counsel), and, in the case of a Demand
Registration, the Company will not file any Registration Statement or amendment
thereto or any prospectus or any supplement thereof to which the Registering
Holders or the underwriters, if any, shall reasonably object;

                     (b) prepare and file with the SEC a Registration Statement
for the sale of the Registrable Shares on any form for which the Company then
qualifies or which counsel for the Company shall deem appropriate in accordance
with such Holders' intended method or methods of distribution thereof, subject
to Section 2(b) hereof, and, subject to the Company's right to terminate or
abandon a registration pursuant to Section 3(c) hereof, use commercially
reasonable efforts to cause such Registration Statement to become effective and
remain effective as provided herein;

                     (c) prepare and file with the SEC such amendments
(including post-effective amendments) to such Registration Statement, and such
supplements to the related Prospectus, as may be required by the rules,
regulations or instructions applicable to the Securities Act during the
applicable period in accordance with the intended methods of disposition
specified by the Holders of the Registrable Shares covered by such Registration
Statement, make generally available earnings statements satisfying the
provisions of Section 11(a) of the Securities Act (provided that the Company
shall be deemed to have complied with this clause if it has complied with Rule
158 under the Securities Act), and cause the related Prospectus as so
supplemented to be filed pursuant to Rule 424 under the Securities Act;
provided, however, that before filing a Registration Statement or Prospectus, or
any amendments or supplements thereto (other than reports required to be filed
by it under the Exchange Act), the Company shall furnish to the Holders of
Registrable Shares covered by such Registration Statement and their counsel for
review and comment, copies of all documents required to be filed;

                     (d) notify the Holders of any Registrable Shares covered by
such Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding such Holders,
(iii) of the issuance by the SEC of any stop order suspending the effectiveness
of such Registration Statement or the initiation of any proceedings for that
purpose, (iv) of the receipt by the Company of any notification with respect to
the suspension of the qualification or exemption from qualification of any of
the Registrable Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose, and (v) of the happening of any
event that requires the making of any changes in such Registration Statement,
Prospectus or documents incorporated or deemed to be incorporated therein by
reference so that they will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading:

                     (e) use commercially reasonable efforts to obtain the
withdrawal of any order suspending the effectiveness of such Registration
Statement, or the lifting of any suspension of the qualification or exemption
from qualification of any Registrable Shares for sale in any jurisdiction in the
United States;

                     (f) furnish to the Holder of any Registrable Shares covered
by such Registration Statement, each counsel for such Holders and each managing
underwriter, if any, without charge, one conformed copy of such Registration
Statement, as declared effective by the SEC, and of each post-effective
amendment thereto, in each case including financial statements and schedules and
all exhibits and reports incorporated or deemed to be incorporated therein by
reference; and deliver, without charge, such number of copies of the preliminary
prospectus, any amended preliminary prospectus, each final Prospectus and any
post-effective amendment or supplement thereto, as such Holder may reasonably
request in order to facilitate the disposition of the Registrable Shares of such
Holder covered by such Registration Statement in conformity with the
requirements of the Securities Act;

                     (g) prior to any public offering of Registrable Shares
covered by such Registration Statement, use commercially reasonable efforts to
register or qualify such Registrable Shares for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Holders of such
Registrable Shares shall reasonably request in writing; provided, however, that
the Company shall in no event be required to qualify generally to do business as
a foreign corporation or as a dealer in any jurisdiction where it is not at the
time so qualified or to execute or file a general consent to service of process
in any such jurisdiction where it has not theretofore done so or to take any
action that would subject it to general service of process or taxation in any
such jurisdiction where it is not then subject;

                     (h) upon the occurrence of any event contemplated by
paragraph 5(d)(v) above, prepare a supplement or post-effective amendment to
such Registration Statement or the related Prospectus or any document
incorporated or deemed to be incorporated therein by reference and file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Shares being sold thereunder (including upon the termination of
any Delay Period), such Prospectus will not contain an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading;

                     (i) use commercially reasonable efforts to cause all
Registrable Shares covered by such Registration Statement to be listed on each
securities exchange or automated interdealer quotation system, if any, on which
similar securities issued by the Company are then listed or quoted;

                     (j) use commercially reasonable efforts to comply with all
applicable rules and regulations of the SEC and any securities exchange or
regulatory body;

                     (k) on or before the effective date of such Registration
Statement, provide the transfer agent of the Company for the Registrable Shares
with printed certificates for the Registrable Shares covered by such
Registration Statement which are in a form eligible for deposit with The
Depository Trust Company;

                     (l) if such offering is an underwritten offering, make
available for inspection by any Holder of Registrable Shares included in such
Registration Statement, any underwriter participating in any offering pursuant
to such Registration Statement, and any attorney, accountant or other agent
retained by any such Holder or underwriter (collectively, the "Inspectors"),
such financial and other records and other information, pertinent corporate
documents and properties of any of the Company and its subsidiaries and
affiliates (collectively, the "Records"), as shall be reasonably necessary to
enable them to exercise their due diligence responsibilities; provided, however,
that the Records that the Company determines, in good faith, to be confidential
and which it notifies the Inspector in writing are confidential shall not be
disclosed to any Inspector unless such Inspector signs a confidentiality
agreement reasonably satisfactory to the Company, which agreement shall permit
the disclosure of such Records in such Registration Statement or the related
Prospectus if either (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement or (ii) the
release of such Records is ordered pursuant to a subpoena or other order from a
court of competent jurisdiction; provided however, that (A) any decision
regarding the disclosure of information pursuant to subclause (i) shall be made
only after consultation with counsel for the applicable Inspectors and the
Company and (B) with respect to any release of Records pursuant to subclause
(ii), each Holder of Registrable Shares agrees that it shall, promptly after
learning that disclosure of such Records is sought in a court having
jurisdiction, give notice to the Company so that the Company, at the Company's
expense, may undertake appropriate action to prevent disclosure of such Records;
and

                     (m) if such offering is an underwritten offering, enter
into such agreements (including an underwriting agreement in form, scope and
substance as is customary in underwritten offerings) and take all such other
appropriate and reasonable actions requested by the Holders of a majority of the
Registrable Shares being sold in connection therewith (including those
reasonably requested by the managing underwriters) in order to expedite or
facilitate the disposition of such Registrable Shares, and in such connection,
(i) use commercially reasonable efforts to obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managing underwriters and
counsel to the Holders of the Registrable Shares being sold), addressed to each
selling Holder of Registrable Shares covered by such Registration Statement and
each of the underwriters as to the matters customarily covered in opinions
requested in underwritten offerings and such other matters may be reasonably
requested by such counsel and underwriters, (ii) use commercially reasonable
efforts to obtain "cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and, if necessary, any
other independent certified public accountants of any subsidiary of the Company
or of any business acquired by the Company for which financial statements and
financial data are, or are required to be, included in the Registration
Statement), addressed to each selling Holder of Registrable Shares covered by
the Registration Statement (unless such accountants shall be prohibited from so
addressing such letters by applicable standards of the accounting profession)
and each of the underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in connection
with underwritten offerings (iii) if requested and if an underwriting agreement
is entered into, provide indemnification provisions and procedures substantially
to the effect set forth in Section 8 hereof with respect to all parties to be
indemnified pursuant to said Section. The above shall be done at each closing
under such underwriting or similar agreement, or as and to the extent required
thereunder. In addition, the Company agrees (i) not to effect any public sale or
distribution of its Common Stock, par value $.01 per share, or any securities
convertible into or exchangeable or exercisable for such securities, during the
10 days prior to the effective date of any underwritten Demand or Piggyback
Registration and until the earliest of (A) the abandonment of such offering, or
(B) the termination of any "hold back" period reasonably requested by the
underwriters (with exceptions for issuances pursuant to outstanding options,
warrants, and convertible or exchangeable securities, pursuant to employee and
dividend reinvestment plans, and such other exceptions as are customary or
agreed with the managing underwriter).

                     The Company may require each Holder of Registrable Shares
covered by a Registration Statement to furnish such information regarding such
Holder and such Holder's intended method of disposition of such Registrable
Shares as it may from time to time reasonably request in writing. If any such
information is not furnished within a reasonable period of time after receipt of
such request, the Company may exclude such Holder's Registrable Shares from such
Registration Statement.

                     Each Holder of Registrable Shares covered by a Registration
Statement agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5(d)(ii), 5(d)(iii),
5(d)(iv) or 5(d)(v) hereof, that such Holder shall forthwith discontinue
disposition of any Registrable Shares covered by such Registration Statement or
the related Prospectus until receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 5(h) hereof, or until such Holder is
advised in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and has received copies of any amended or
supplemented Prospectus or any additional or supplemental filings which are
incorporated, or deemed to be incorporated, by reference in such Prospectus
(such period during which disposition is discontinued being an "Interruption
Period") and, if requested by the Company, the Holder shall deliver to the
Company (at the expense of the Company) all copies then in its possession, other
than permanent file copies then in such holder's possession, of the Prospectus
covering such Registrable Shares at the time of receipt of such request.

                     Each Holder of Registrable Shares covered by a Registration
Statement further agrees not to utilize any material other than the applicable
current preliminary prospectus or Prospectus in connection with the offering of
such Registrable Shares.

                6. Registration Expenses. Whether or not any Registration
Statement is filed or becomes effective, the Company shall pay all costs, fees
and expenses incident to the Company's performance of or compliance with this
Agreement, including (i) all registration and filing fees, including NASD filing
fees, (ii) all fees and expenses of compliance with securities or Blue Sky laws,
including reasonable fees and disbursements of counsel in connection therewith,
(iii) printing expenses (including expenses of printing certificates for
Registrable Shares and of printing preliminary and final prospectuses if the
printing of prospectuses is requested by the Holders or the managing
underwriter, if any), (iv) messenger, telephone and delivery expenses, (v) fees
and disbursements of counsel for the Company, (vi) fees and disbursements of all
independent certified public accountants of the Company (including expense of
any "cold comfort" letters required in connection with this Agreement) and all
other persons retained by the Company in connection with this Agreement and the
Registration Statement, and (vii) all other costs, fees and expenses incident to
the Company's performance or compliance with this Agreement. Notwithstanding the
foregoing, the fees and expenses of any persons retained by any Holder,
including counsel for such Holders, and any discounts, commissions or brokers'
fees or fees of similar securities industry professionals and any transfer taxes
relating to the disposition of the Registrable Shares by a Holder, will be
payable by such Holder and the Company will have no obligation to pay any such
amounts.

                7. Underwriting Requirements.

                     (a) Subject to Section 7(b) hereof, any Holder giving a
Demand Notice shall have the right, by written notice, to request that any
Demand Registration provide for an underwritten offering.

                     (b) In the case of any underwritten offering pursuant to a
Demand Registration, the Holders of a majority of the Registrable Shares covered
by the Demand Notice to be disposed of in connection therewith shall select the
institution or institutions that shall manage or lead such offering, which
institution or institutions shall be reasonably satisfactory to the Company. In
the case of any underwritten offering pursuant to a Piggyback Registration, the
Company shall select the institution or institutions that shall manage or lead
such offering.

                8. Indemnification.

                     (a) Indemnification by the Company. The Company shall,
without limitation as to time, indemnify and hold harmless, to the full extent
permitted by law, each Holder of Registrable Shares whose Registrable Shares are
covered by a Registration Statement or Prospectus, the officers, directors and
agents and employees of each of them, each Person who controls each such Holder
(within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act) and the officers, directors, agents and employees of each such
controlling person, to the fullest extent lawful, from and against any and all
losses, claims, damages, liabilities, judgment, costs (including, without
limitation, costs of preparation and reasonable attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or based upon any untrue
or alleged untrue statement of a material fact contained in such Registration
Statement or Prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or based upon any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by or on behalf of such Holder
expressly for use therein or by any underwriter in a Demand Registration;
provided, however, that the Company shall not be liable to any such Holder to
the extent that any such Losses arise out of or are based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any preliminary prospectus if (i) having previously been furnished by or on
behalf of the Company with copies of the Prospectus, such Holder failed to send
or deliver a copy of the Prospectus with or prior to the delivery of written
confirmation of the sale of Registrable Shares by such Holder to the person
asserting the claim from which such Losses arise and (ii) the Prospectus would
have corrected in all material respects such untrue statement or alleged untrue
statement or such omission or alleged omission; and provided further, however,
that the Company shall not be liable in any such case to the extent that any
such Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission in the Prospectus, if (x) such untrue
statement or alleged untrue statement, omission or alleged omission is corrected
in all material respects in an amendment or supplement to the Prospectus and (y)
having previously been furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, prior to or currently
with the sale of Registrable Shares. In connection with any Underwritten
Offering, the Company will also indemnify underwriters, selling brokers, dealer
managers and similar securities industry professionals participating in the
distribution, their officers and directors and each Person who controls such
Persons (within the meaning of Section 15 of the Securities Act) to the same
extent as provided above with respect to Indemnification of Holders of
Registrable Shares, or on such other terms as are reasonable and customary and
requested by the managing underwriter.

                     (b) Indemnification by Holder of Registrable Shares. In
connection with any Registration Statement in which a Holder is participating,
such Holder shall furnish to the Company in writing such information as the
Company reasonably requests for use in connection with such Registration
Statement or the related Prospectus and agrees to indemnify, to the full extent
permitted by law, the Company, its directors, officers, agents or employees,
each Person who controls the Company (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act) and the directors, officers,
agents or employees of such controlling Persons, from and against all Losses
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in such Registration Statement or the related Prospectus
or any amendment or supplement thereto, or any preliminary prospectus, or
arising out of or based upon any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue or alleged
untrue statement or omission or alleged omission is based upon any information
so furnished in writing by or on behalf of such Holder to the Company expressly
for use in such Registration Statement or Prospectus.

                     (c) If any Person shall be entitled to indemnity hereunder
(an "Indemnified Party"), indemnified party shall give prompt notice to the
party from which such indemnity is sought (the "Indemnifying Party") of any
claim or of the commencement of any proceeding with respect to indemnitee party
seeks indemnification or contribution pursuant hereto; provided, however, that
the delay or failure to so notify the indemnifying party shall not relieve the
indemnifying party from any obligation or liability except to the extent that
the indemnifying party has been prejudiced by such delay or failure. The
indemnifying party shall have the right, exercisable by giving written notice to
an indemnified party promptly after the receipt of written notice from such
indemnified party of such claim or proceeding, to assume, at the indemnifying
party's expense, the defense of any such claim or proceeding, with counsel
reasonably satisfactory to such indemnified party; provided, however, that (i)
an indemnified party shall have the right to employ separate counsel in any such
claim or proceeding and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (1) the indemnifying party agrees to pay such fees and expenses; (2) the
indemnifying party fails promptly to assume the defense of such claim or
proceeding or fails to employ counsel reasonably satisfactory to such
indemnified party; or (3) the named parties to any proceeding (including
impleaded parties) include both such indemnified party and the indemnifying
party, and such indemnified party shall have been advised by counsel that there
may be one or more legal defenses available to it that are inconsistent with
those available to the indemnifying party or that a conflict of interest is
likely to exist among such indemnified party and any other indemnified parties
(in which case the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party); and (ii) subject to
clause (3) above, the indemnifying party shall not, in connection with any one
such claim or proceeding or separate but substantially similar or related claims
or proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one firm of attorneys (together with appropriate local counsel) at any time for
all of the indemnified parties, or for fees and expenses that are not
reasonable. Whether or not such defense is assumed by the indemnifying party,
such indemnified party shall not be subject to any liability for any settlement
made without its consent. The indemnifying party shall not consent to entry of
any judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release, in form and substance reasonably satisfactory to
the indemnified party, from all liability in respect of such claim or litigation
for which such indemnified party would be entitled to indemnification hereunder.

                     (d) Contribution. If the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any Losses
(other than in accordance with its terms), then each applicable indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of the
indemnifying party, on the one hand, and such indemnified party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such indemnifying party, on the one hand, and indemnified party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such indemnifying party or indemnified
party, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the this Section
8(d). Notwithstanding the provision of this Section 8(d), an indemnifying party
that is a Holder shall not be required to contribute any amount which is in
excess of the amount by which the total proceeds received by such Holder from
the sale of the Registrable Shares sold by such Holder (net of all underwriting
discounts and commissions) exceeds the amount of any damages that such
indemnifying party has otherwise been required to pay by reason of such untrue
or alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

                9. Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will timely file the reports required to be filed by
it under the Securities Act or the Exchange Act (including but not limited to
the reports under Sections 13 and 15(d) of the Exchange Act referred to in
subparagraph (c)(1) of Rule 144 adopted by the SEC under the Securities Act) and
the rules and regulations adopted by the SEC thereunder (or if the Company is
not required to file such reports, the Company will, upon the request of any
Holder of Registrable Shares, make publicly available other information), and
will take such further action as any Holder of Registrable Shares may reasonably
request, all to the extent required from time to time to enable such Holder of
Registrable Shares to sell Registrable Shares within the exemption provided by
(i) Rule 144 under the Securities Act, as such Rule may be amended from time to
time, or (ii) any similar rule or regulation hereafter adopted by the SEC. Upon
the request of any Holder of Registrable Shares, the Company will deliver to
such Holder a written statement as to whether it has complied with such
requirements.

                10. Miscellaneous.

                     (a) Termination. This Agreement and the obligations of the
Company and the Holders hereunder (other than Section 8 hereof) shall terminate
on the first date on which no Registrable Shares remain outstanding.

                     All notices, requests, demands and other communications
which are required or may be given under this Agreement shall be in writing and
shall be deemed to have been duly given when received if personally delivered;
when transmitted if transmitted by telecopy, electronic or digital transmission
method; the day after it is sent, if sent for next day delivery to a domestic
address by recognized overnight delivery service (e.g., Federal Express); and
upon receipt, if sent by certified or registered mail, return receipt requested.
In each case notice shall be sent to: [to come]

                     Interpretation. When a reference is made in this Agreement
to Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. Headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the word "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation". This Agreement shall not be construed for or against either party
by reason of the authorship or alleged authorship of any provision hereof or by
reason of the status of the respective parties. All terms defined in this
Agreement in the singular shall have the same comparable meanings when used in
the plural and vice versa, unless otherwise specified.

                     Entire Agreement; No Third-Party Beneficiaries. This
Agreement constitutes the entire agreement and supersedes all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof and is not intended to confer upon any person other than
the parties hereto any rights or remedies hereunder.

                     Assignment. Neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned (whether by operation of
law or otherwise) by any Holder without the consent of the Company, or by the
Company without the consent of Holders of at least a majority in number of the
Registrable Shares then outstanding provided that any Holder can assign its
rights hereunder to a Permitted Transferee or Permitted Assignee of $15 million
or more in value of Common Stock without the consent of the Company. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the parties and their respective successors and
assigns. In no event shall any transferee of Common Stock be entitled, solely as
a result of such transfer, to any of the benefits of this Agreement or to
enforce the same.

                     (f) Governing Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Delaware (without reference to the choice of law provisions),
except with respect to matters of law concerning the internal corporate affairs
of any corporate entity which is a party to or the subject of this Agreement,
and as to those matters the law of the jurisdiction under which the respective
entity derives its powers shall govern.

                     Severability. Each party agrees that, should any court or
other competent authority hold any provision of this Agreement or part hereof to
be null, void or unenforceable, or order any party to take any action
inconsistent herewith or not to take an action consistent herewith or required
hereby, the validity, legality and enforceability of the remaining provisions
and obligations contained or set forth herein shall not in any way be affected
or impaired thereby. Upon any such holding that any provision of this Agreement
is null, void or unenforceable, the parties will negotiate in good faith to
modify this Agreement so as to effect the original intent of the parties as
closely as possible in an acceptable manner to the end that the transactions
contemplated by this Agreement are consummated to the extent possible. Except as
otherwise contemplated by this Agreement, to the extent that a party hereto took
an action inconsistent herewith or failed to take action consistent herewith or
required hereby pursuant to an order or judgment of a court or other competent
authority, such party shall incur no liability or obligation unless such party
did not in good faith seek to resist or object to the imposition or entering of
such order or judgment.

                     Injunctive Relief. The parties acknowledge that it will be
impossible to measure in money the damages that would be suffered if the parties
fail to comply with any of the obligations herein imposed on them and that in
the event of any such failure, an aggrieved person or entity will be irreparably
damaged and will not have an adequate remedy at law. Any such person or entity
shall, therefore, be entitled to injunctive relief, including specific
performance, to enforce such obligations, and if any action should be brought in
equity to enforce any of the provisions of this Agreement, none of the parties
shall raise the defense that there is an adequate remedy at law.

                     Attorneys' Fees. If any party to this Agreement brings an
action to enforce its rights under this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including without limitation
reasonable attorneys' fees, incurred in connection with such action, including
any appeal of such action.

                     Cumulative Remedies. All rights and remedies of any party
hereto are cumulative of each other and of every other right or remedy such
party may otherwise have at law or in equity, and the exercise of one or more
rights or remedies shall not prejudice or impair the concurrent or subsequent
exercise of other rights or remedies.

                     Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be considered one and the same instrument and
shall become effective when executed and delivered by each of the parties.

                     (l) Amendments and Waivers. Except as otherwise provided
herein, the provisions of this Agreement may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of at least a majority in number of the Registrable Shares then outstanding, or
the Holders have obtained the written consent of the Company.

                     (m) Other Agreements. Without the approval of Holders
owning at least two-thirds in interest of each of the Hughes Communications,
Inc. Holders, the Class A Holders, and the Class B Holders of the Registrable
Shares, the Company shall not enter into any registration rights agreement
ranking pari passu or senior to this Agreement.
<PAGE>
                  IN WITNESS WHEREOF, the parties have executed this
Registration Rights Agreement as of the date first above written.



                                            MAGELLAN INTERNATIONAL, INC.

                                            By:
                                               -----------------------------
                                               Charles H. Noski
                                               President


                                            STOCKHOLDERS

                                            HUGHES COMMUNICATIONS, INC.

                                            By:
                                               -----------------------------
                                               Jerald F. Farrell
                                               President


                                            SATELLITE COMPANY, L.L.C.

                                            By:
                                               -----------------------------
                                                Member

<PAGE>


                              CLASS A STOCKHOLDERS



   Name:        Mary Anselmo, individually, and as a trustee of the Article VII
                Trust created by the RENE ANSELMO REVOCABLE TRUST DATED JUNE 10,
                1994 and as a successor trustee under the Voting Trust Agreement
                dated as of February 28, 1995 and as a trustee of the RAYCE
                ANSELMO TRUST DATED DECEMBER 23, 1991



   Name:        Frederick  A.  Landman,  individually  and as a trustee of
                the  Article  VII  Trust   created  by  the  RENE  ANSELMO
                REVOCABLE  TRUST  DATED JUNE 10,  1994 and as a  successor
                trustee  under  the  Voting  Trust  Agreement  dated as of
                February 28, 1995



   Name:        Lourdes  Saralegui,  individually  and as a trustee of the
                Article VII Trust  created by the RENE  ANSELMO  REVOCABLE
                TRUST  DATED  JUNE  10,  1994 and as a  successor  trustee
                under the  Voting  Trust  Agreement  dated as of  February
                28, 1995



   Name:        Pier  Landman,  individually  and as the sole  trustee  of
                the CHLOE  LANDMAN  TRUST DATED JUNE 10, 1988 and the sole
                trustee of the RISSA LANDMAN TRUST DATED JUNE 10, 1988



   Name:        Edward  J.  Landau,  as  co-trustee  of the  FREDERICK  A.
                LANDMAN IRREVOCABLE TRUST DATED DECEMBER 22, 1995


   Name:        Patrick J.  Costello,  as  co-trustee  of the FREDERICK A.
                LANDMAN IRREVOCABLE TRUST DATED DECEMBER 22, 1995



   Name:        Reverge Anselmo, individually

<PAGE>







                                    EXHIBIT G

                              Stockholder Agreement



<PAGE>
EXHIBIT G
---------
                                                                          
                              STOCKHOLDER AGREEMENT


                  This STOCKHOLDER AGREEMENT (this "Agreement"), dated as of
_________ __, 199__, is entered into by and among MAGELLAN INTERNATIONAL, INC.,
a Delaware corporation ("Holding Company" or the "Company"), HUGHES
COMMUNICATIONS, INC., a California corporation ("HCI"), the Class A Holders
listed on the signature page hereof (the "Class A Holders"), and SATELLITE
COMPANY, L.L.C., a Nevada limited liability company ("S Company").

                                    RECITALS

                  A. Pursuant to that certain Agreement and Plan of
Reorganization by and among Panamsat Corporation, HCI and Hughes Communications
Galaxy, Inc. and certain other subsidiaries of HCI (as such agreement may be
hereafter amended from time to time, the "Reorganization Agreement"), HCI has
organized Holding Company to acquire Hughes Communications Galaxy, Inc. and
cause a subsidiary of Holding Company to merge with and into Panamsat
Corporation in each case upon the terms and conditions set forth in the
Reorganization Agreement.

                  B. Pursuant to that certain Stock Contribution and Exchange
Agreement by and among HCI, Hughes Communications Galaxy, Inc., S Company and
Grupo Televisa, S.A. (as such agreement may be hereafter amended from time to
time, the "Univisa Contribution Agreement"), HCI and Hughes Communications
Galaxy, Inc. have agreed to cause Holding Company to acquire from S Company all
of the outstanding shares of capital stock of Univisa, Inc., a Delaware
corporation which indirectly owns all of the shares of Class B Common Stock, par
value $.01 per share, of Panamsat Corporation.

                  C. Pursuant to the Reorganization Agreement and the Univisa
Contribution Agreement, each of Panamsat Corporation and Hughes Communications
Galaxy, Inc. will become subsidiaries of Holding Company, and HCI, the Class A
Holders and S Company will become stockholders of Holding Company.

                  D. The parties desire to enter into this Agreement to regulate
certain aspects of their relationships with regard to each other and Holding
Company.

                                    AGREEMENT

                  In consideration of the foregoing and the mutual promises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto, intending to be
legally bound thereby, agree as follows:

                  1. Certain Defined Terms. Capitalized terms used and not
defined herein have the respective meanings ascribed to them in the
Reorganization Agreement. For purposes of this Agreement:

                  "Affiliate" means with respect to any person or entity (i) any
other person or entity directly or indirectly controlling or controlled by or
under direct or indirect common control with that person or entity, (ii) any
spouse, immediate family member or other relative who has the same principal
residence of any person (in the case of an individual), (iii) any trust in which
any person or entity has a beneficial interest and (iv) any corporation or other
organization of which any such persons or entities described in clause (i) or
(ii) above collectively own more than 50% of the equity of such entity.

                  "Closed Periods" means the total of (a) the number of days
prior to Closing during which PanAmSat Corporation Common Stock could not be
sold as a result of notices given by HCI pursuant to the last sentence of
Section 3(a) of the Principal Stockholders Agreement, and (b) any Delay Periods,
Hold Back Periods or Interruption Periods (each as defined in the Registration
Rights Agreement) which occur after the Commencement Date (as defined in Section
2(b)(i)) and result in a delay or suspension of a Demand Registration or a
Piggyback Registration (as defined in the Registration Rights Agreement) by the
Minority Stockholders or their Permitted Transferees.

                  "Ending Date" means the date when restrictions on the ability
of HCI and its Affiliates to sell or transfer Shares under Section 2(b) end.
That date shall be the earliest of (a) a Termination Event or (b) twelve (12)
months after the Commencement Date plus Closed Periods, if any.

                  "Exempt Transfer" means any transfer of Shares by HCI or its
Affiliates to any of its or their Affiliates (other than the Company or any of
its Subsidiaries).

                  "Holding Company Common Stock" means the common stock, $.01
par value, of Holding Company.

                  "HCI Sale" means any sale, exchange or other disposition by
HCI or its Affiliates of Shares, other than an Exempt Transfer or a sale of
Shares pursuant to a registration statement under the Securities Act, which at
the time of determination represent more than 5% of the outstanding Holding
Company Common Stock. "HCI Sale" shall not include, in the case of Holding
Company or any of its Subsidiaries, any sale of Holding Company Common Stock.
Nothing in this Agreement shall limit any rights the Stockholders may have to
participate in any such offering under the Registration Rights Agreements, nor
shall the definition "HCI Sale" limit the restrictions contained in Section 2(b)
in any way.

                  "HCI Total Sale" means, as of any date of determination, the
sale, exchange or other disposition by HCI and each of its Affiliates other than
in an Exempt Transfer of 100% of their Shares.

                  "Low Ownership Event" means, as of any date of determination,
any sale, exchange or other disposition of Shares by the Minority Stockholders
which causes the Minority Stockholders to beneficially own, in the aggregate,
less than the Requisite Level.

                  "Minority Stockholders" means, each of the Class A Holders, S
Company and their respective Permitted Transferees, which collectively shall be
the "Minority Stockholders".

                  "Permitted Transfers" means a sale, transfer or assignment or
other disposition to a Permitted Transferee.

                  "Permitted Transferees" means, as to HCI, any transferee in an
Exempt Transfer or any Permitted Transferee; as to S Company, Grupo Televisa,
S.A., any controlled Affiliate of Grupo Televisa, S.A., or any Permitted
Transferee; as to the Class A Holders, (A) any other Class A Holder, (B) any
person who is the spouse or former spouse of, or any lineal descendent of, or
any spouse of such lineal descendant of, or the grandparent, parent, brother or
sister of, or spouse of such brother or sister of, a Class A Holder or Permitted
Transferee of such person; (C) upon the death of any Class A Holder or any
Permitted Transferee of such person, the executors of the estate of such Class A
Holder or Permitted Transferee, any of such Class A Holder's or such Permitted
Transferee's heirs, testamentary trustees, devisees, or legatees; (D) any trust
principally for the benefit of one or more of the foregoing Class A Holders or
Permitted Transferees; (E) upon the disability of any Class A Holder or
Permitted Transferee, any guardian or conservator of such Class A Holder or
Permitted Transferee; or (F) any corporation, partnership or other entity if all
of the beneficial ownership is held by Class A Holders or any Permitted
Transferees; and as to any Stockholders, any person to whom a transfer may be
made pursuant to the provisions of Section 8(e); provided that in each of the
foregoing cases such transferee assumes and agrees to perform and becomes a
party to this Agreement.

                  "Registration Rights Agreement" means the agreement of that
                   -------------------------------
name of even date among the parties.

                  "Requisite Level" means 5% or more of the number of shares of
Holding Company Common Stock outstanding immediately after the consummation of
the transactions contemplated by the Reorganization Agreement and the Univisa
Contribution Agreement and prior to any further issuances for refinancing or
other purposes, as such total number is adjusted to reflect stock splits,
combinations, stock dividends, recapitalizations, reclassifications, and similar
transactions.

                  "Shares" means the shares of Holding Company Common Stock
owned by the Stockholders at the time of determination.

                  "Stockholders" means, collectively, HCI, and its Affiliates
who own Shares, the Class A Holders, S Company, and their respective Permitted
Transferees, each of which shall individually be a "Stockholder".

                  "Termination Event" means a Low Ownership Event or an HCI
Total Sale.

                  2. Certain Restrictions on the Purchase and Sale of Shares.

                           (a) Take-Along Right. HCI on behalf of itself and its
Affiliates hereby agrees:

                              (i) With respect to any proposed HCI Sale, each
Minority Stockholder (each a "Take-Along Stockholder"), shall have the right
(the "Take-Along Right") to join in such sale and to sell a number of whole
Shares equal to the number derived by multiplying the total number of Shares
proposed to be transferred by a fraction, the numerator of which is the total
number of Shares owned by such Take-Along Stockholder and the denominator of
which is the total number of Shares owned by HCI and its Affiliates and all
Take-Along Stockholders proposing to so join.

                              (ii) Any Shares purchased from Take-Along
Stockholders pursuant to this Section 2(a) shall be paid for at the same price
per Share and (to the extent applicable) upon the same terms and conditions as
such proposed transfer by HCI and its Affiliates.

                              (iii) HCI shall (on its own behalf and on behalf
of any of its Affiliates effecting an HCI Sale), not less than 30 days prior to
such proposed HCI Sale, notify each Take-Along Stockholder in writing of such
HCI Sale (the "Sale Notice"). Such notice shall: (A) state the number of Shares
proposed to be transferred, (B) identify the proposed purchaser(s), (C) state
the proposed amount and form of consideration and terms and conditions of
payment, and (D) confirm that each proposed purchaser has been informed of the
Take-Along Right provided for in this Section 2(a) and has agreed to purchase
Shares in accordance with the terms thereof.

                              (iv) The Take-Along Right may be exercised by any
Take-Along Stockholder by delivery of a written notice to HCI proposing to sell
Shares (the "Take-Along Notice") within 30 days following the Sale Notice, which
Take-Along Notice shall state the amount of Shares that such Take-Along
Stockholder proposes to include in such transfer. If no Take-Along Notice is
received during such 30-day period, HCI and its Affiliates shall have the right,
for a 30-day period after the expiration of such 30-day period, to transfer the
Shares specified in the Sale Notice on terms and conditions no more favorable
than those stated in such notice.

                              (v) In the event that a purchaser refuses to
purchase Shares from the Take-Along Stockholders on the same terms and
conditions as specified in the Sale Notice, then HCI and its Affiliates shall
not sell any Shares to that purchaser in the HCI Sale.

                          (b)      Certain Sale Restrictions.

                              (i) Neither HCI nor its Affiliates may, directly
or indirectly, issue, sell, exchange or otherwise dispose of, or offer or agree,
directly or indirectly, to issue, sell, exchange or otherwise dispose (including
through purchase by the Company or any of its Affiliates) of Shares or common
equity of the Company or any of its Subsidiaries, or any interest therein, or
securities convertible into or exercisable or exchangeable for Shares or such
common equity interests, or offer or enter into any contract, option or other
arrangement or understanding to effect any such transactions, during the period
(A) beginning on the Closing and (B) ending on the Ending Date, provided,
however, that restrictions on sales by the Company shall not commence (the
"Commencement Date") until the earlier of (x) the first anniversary of the
Closing (eighteen months following the Closing in the event the Minority
Stockholders or their Affiliates sell more than five million Panamsat Shares
(other than to Permitted Transferees) between the date of the Reorganization
Agreement and the Closing) and (y) the date the Company shall notify the
Minority Stockholders that it has completed the refinancing of up to $1.5
billion of indebtedness incurred by the Company in connection with the
transactions contemplated by the Reorganization Agreement and the Univisa
Contribution Agreement (it being agreed that the exemption from the restriction
on sales by the Company pursuant to this clause shall only apply to sales, the
net proceeds of which are entirely used to refinance such indebtedness); and
provided further that the foregoing restrictions shall not apply to reasonable
issuances by the Company for employee plans, in acquisitions from
non-Affiliates, pursuant to a dividend reinvestment plan, or upon exercise or
conversion of previously issued options, warrants or convertible securities.

                              (ii) Each of the Minority Stockholders agrees
severally and not jointly and solely with respect to itself and the Shares owned
beneficially or of record by it, not to offer, sell or transfer the Shares, or
any interest therein, or securities convertible into Shares, or offer or enter
into any contract, option or other arrangement or understanding to effect any
sale or transfer of Shares or interests therein or securities convertible into
or exercisable or exchangeable for Shares, to any person that is not a Permitted
Transferee, after the Closing and prior to the Commencement Date.
Notwithstanding the foregoing, Minority Stockholders may offer and sell or
transfer Shares, or interests therein, or securities convertible into or
exercisable or exchangeable for Shares, to persons other than Permitted
Transferees in private transactions with the consent of HCI, which consent will
be granted if, in HCI's reasonable judgment, such transfer will not materially
and adversely affect Holding Company's financing plans or on the price of or
demand for Holding Company Common Stock, and the purchaser provides assurances
satisfactory to HCI that it will not prior to the Commencement Date sell any of
such Shares at a time or with an effect which may materially and adversely
affect such financing plans of Holding Company or the price of or demand for
Holding Company Common Stock. Further notwithstanding the foregoing, the
Minority Stockholders may pledge their Shares as collateral for a bona fide
loan, provided that the lender, on terms reasonably acceptable to HCI and the
Company, agrees that upon liquidation of such collateral the lender or any
transferee will assume and agree to perform this Agreement or, if requested by
HCI or the Company, waive all rights under this Agreement.

                              (c) Standstill Right. HCI agrees that HCI and its
Affiliates shall not acquire or come to hold beneficially or otherwise, whether
by purchase, exchange or otherwise, more than 81% of the outstanding common
equity interests in Holding Company, except (i) pursuant to a merger which is
approved by the holders of a majority of the shares of Holding Company Common
Stock not owned by HCI and its Affiliates, (ii) pursuant to a tender offer
recommended by a majority of the Disinterested Directors of the Holding Company
and second-step merger which offers the same per share consideration to all
holders of Holding Company Common Stock and in which more than half the
outstanding Holding Company Common Stock not owned by HCI and its Affiliates at
the inception of the transaction is either tendered or voted in favor of the
transaction, and (iii) except pursuant to such other transaction as shall
provide for parity of treatment of holders of Holding Company Common Stock and
is approved by the holders of a majority of the shares of Holding Company Common
Stock not owned by HCI and its Affiliates and by a majority of the Disinterested
Directors of Holding Company.

                  3.          Governance and Business Operations.

                              (a) Board of Directors. The Stockholders, on
behalf of themselves and their Affiliates and Permitted Transferees, hereby
agree to take all necessary action (including, without limitation, voting the
Common Stock of the Company beneficially owned by them, calling special meetings
of stockholders of the Company and executing and delivering written consents)
such that the Board of Directors of the Company shall consist of ten (10)
members designated as herein provided. HCI shall designate all members of the
Board of Directors not designated by the Minority Stockholders. For so long as
Mr. Frederick A. Landman is Chief Executive Office of the Company, he shall be
one of HCI's designees. The Minority Stockholders shall be entitled to initially
designate two (2) directors of the Company, one (1) of whom may be designated by
the Class A Holders and one (1) of whom may be designated by S Company. For so
long as the Class A Holders and their Permitted Transferees, as a group (the "A
Group"), beneficially own a number of Shares which is greater than the number of
shares comprising 4% of the outstanding Common Stock of the Company immediately
after the consummation of the transactions contemplated by the Reorganization
Agreement and the Univisa Contribution Agreement and prior to any further
issuances for refinancing or other purposes (as such Shares may be adjusted to
reflect stock splits, combinations, stock dividends, recapitalizations,
reclassifications, and similar transactions, the "Director Minimum Shares"), at
each subsequent meeting of stockholders of the Company (or action by consent in
lieu thereof), the A Group shall be entitled to designate one director, to be
selected by a majority vote of the Shares beneficially owned by the A Group. For
so long as S Company and its Permitted Transferees, as a group (the "B Group"),
beneficially own a number of Shares greater than the Director Minimum Shares, at
each subsequent meeting of stockholders of the Company (or action by consent in
lieu thereof), the B Group shall be entitled to designate one director, to be
selected by a majority vote of the Shares benefically owned by the B Group.

                              (b) Transactions with Affiliates. HCI and its
Affiliates (other than the Company and its Subsidiaries) shall not propose or
approve any loan, advance or guarantee to, from, or for the benefit of, or sell,
lease, transfer or otherwise dispose of any of their properties or assets to, or
for the benefit of, or purchase or lease any property or assets from, or enter
into or amend any contract, agreement or understanding with, Holding Company or
any Subsidiary of Holding Company, except on terms that are no less favorable to
Holding Company or such Subsidiary than those (including, without limitation,
prices) ordinarily entered into in comparable transactions by HCI or the
relevant Affiliate on an arms' length basis with an unrelated party. All
material transactions (and all other transactions which the Chief Executive
Officer of the Holding Company may designate) between HCI and its Affiliates on
the one hand, and Holding Company or its Subsidiaries on the other, shall be
reviewed by a committee comprised of Disinterested Directors, and approval of
such transactions by such committee shall be conclusive evidence of compliance
with the provisions of this Section 3(b). Upon such approval, unless required by
such directors after due consideration, Holding Company or such Subsidiaries may
enter into and perform the approved transactions with HCI and its Affiliates
without competitive bidding or other special procedures.

                 (c)      HE Covenant Not to Compete.  HCI agrees:

                              (i) Until the fifth anniversary after the Closing
Date, HE and any entity owned 50% or more by HE (excluding Holding Company and
its Subsidiaries) (the "Committing Companies") shall not compete with Holding
Company or any of its Subsidiaries after the Closing in the "Galaxy Business"
(as defined below) in any geographic area except as allowed under subsection
(iii) below.

                              (ii) As used herein, the "Galaxy Business" shall
mean: (A) the sale or lease of, or the provision of satellite services via,
transponder capacity on satellites operating in geostationary earth orbit in the
C-band, Ka-band and Ku-band frequencies for the transmission of video, audio and
data signals; and (B) the provision of telemetry, tracking and control services
for such satellites and for other satellites operating in geostationary earth
orbit in the C-band, Ka-band, Ku-band, L-band and UHF-band frequencies or other
frequency bands that may be utilized in the future; but in each case excluding
the sale or lease of transponder capacity and telemetry, tracking and control
services provided on or for any satellite that has both (x) multiple (six or
more) receive and transmit beams and (y) an on-board satellite payload processor
which can switch uplink signals in one beam to a downlink signal in one of
multiple beams.

                              (iii) The Committing Companies shall not be
restricted from conducting any business that falls within the following
categories (the "Exclusivity Exceptions"):

                              (A) All aspects of the direct-to-home satellite
business, whether done through Galaxy Latin America, DIRECTV International,
Inc., DIRECTV USA or any other entity owned 50% or more by HE including, but not
limited to, (x) the provision of services directly to consumers via satellite;
(y) the sale or lease of transponders or channels therein to third parties
engaging in the direct-to-home satellite business in which any of the Committed
Companies is involved (whether by ownership of an interest in a satellite or any
part of the capacity thereof or in any related or associated business), whether
in the FSS or BSS bands; and (z) the provision of programming to cable head
ends, which in each of cases (y) and (z) is ancillary to any direct-to-home
satellite business in which the Committing Companies have an interest; provided
that if there is excess capacity available on a satellite used primarily in the
direct-to-home satellite business, the sale or lease of such excess capacity
shall not be precluded by the foregoing restriction;

                              (B) All aspects of value added services, i.e., the
sale of business services which include the provision of transponder capacity
that is ancillary to the provision of such services by the Committing Companies
including, but not limited to, shared hub VSAT business or DIRECPC or distance
learning or any similar type of services that may now or in the future be
provided or developed by HE or any of its Affiliates (other than Holding Company
and its Subsidiaries);

                              (C) All aspects of the business of providing
satellite or transponder capacity or portions thereof of any type or kind to the
United States government, or any department or agency thereof;

                              (D) The provision by the Committing Companies of
project financing, or the acceptance by any of them of a minority equity
position in any other satellite operating or service company, as part of a
satellite sale;

                              (E) All aspects of the business of manufacturing
and selling or leasing satellites in their entirety, other than the sale or
lease of individual transponders or portions thereof (except with respect to
such sale or lease of transponders as otherwise provided for in this Section
(iii)); and

                              (F) As part of the acquisition of a third party
where the competing business is not a substantial part of such acquired business
provided that such competing business shall be disposed of in a commercially
reasonable manner as soon as commercially reasonable after such acquisition.

                              (iv) The parties acknowledge that the Galaxy
Business does not include, and the Committing Companies are retaining, the
following: all aspects of the business of providing mobile satellite services
and all aspects of the satellite-based business commonly referred to by HE as
the "Spaceway" business.

                              (d) Holding Company's Covenant Not to Compete.
Holding Company and its controlled Affiliates shall not engage in any aspect of
the direct broadcast satellite business other than through the sale or lease of
transponders or channels therein or the provision of transponder services and
the provision of other value added services ancillary thereto to third parties
engaged in the direct broadcast satellite business, provided that Holding
Company and its Subsidiaries shall not be precluded from providing project
financing to such third parties or the acceptance of a minority equity position
in a third party in connection with the sale or lease of transponders or
channels therein or the provision of transponder services. For so long as Grupo
Televisa, S.A. and its controlled Affiliates own any Holding Company Common
Stock, neither Holding Company nor any of its controlled Affiliates will own an
equity interest in a direct-to-home enterprise offering predominantly Spanish
language programming in the Americas or the Iberian Peninsula.

                              (e) First Offer Rights. In the event that Holding
Company determines to launch a satellite with the following frequencies: Ku BSS
frequencies (11.7 - 12.5 Ghz in Region 1, 12.2 - 12.7 Ghz in Region 2 and 11.7 -
12.2 Ghz in Region 3) (the "BSS Band") into any of the following orbital slots
as such orbital slots may be modified in the FCC authorization process, the ITU
registration process, or in the course of frequency coordination with other
systems: East Longitude: 36(Degree), 40(Degree), 48(Degree), 54(Degree),
101(Degree), 124.5(Degree), 132(Degree), 149(Degree), 164(Degree) and
173(Degree); and West Longitude: 49(Degree) and 67(Degree) (the "BSS
Satellites"), the Company shall give HE or its designated Subsidiaries (referred
to herein as the "HE Designee") notice of such determination and the HE Designee
shall have the opportunity (the "First Opportunity") to enter into a full life
service agreement with respect to some or all, but not less than half of the
available capacity in the BSS Band on the applicable BSS Satellite, of the BSS
transponders (the "BSS Transponders") on the first BSS Satellite that the
Company intends to place into each such slot on terms and conditions to be
negotiated in good faith and consistent with normal business practice. The
negotiation period with respect to capacity on each such BSS Satellite shall be
for three months (the "Negotiation Period"). The Negotiation Period may be
initiated by either party on notice to the other at any time within the time
period set forth below. Applied separately to each BSS Satellite, the
Negotiation Period shall begin on the date on which the Company notifies the HE
Designee of a firm commitment to construct a BSS Satellite; and shall commence
not more than thirty months prior to the proposed launch of the BSS Satellite
and end not later than fifteen (15) months prior to the date that the BSS
Satellite is scheduled to be launched. If negotiations are not initiated by
either party by such date or successfully concluded with a binding service
agreement within the Negotiation Period, unless HE has given Company a final
offer (as defined below), neither party shall have any further obligation
pursuant to this Section 3(e), with respect to the BSS Satellite in question.
The conclusion or failure to conclude such an agreement as to one orbital slot
shall not, however, affect the parties' rights and obligations hereunder as to
the remaining BSS Satellites for other orbital slots referenced in this Section,
if still extant.

                  At any time prior to the end of the applicable negotiation
period specified above, HE shall have the right to make to the Company HE's
"best and final offer" (a "Final Offer") of the price at which it is willing to
enter into an end of life service agreement for a stated number of BSS
Transponders on the BSS Satellite, which must be on terms and conditions that
are otherwise acceptable to the Company.

                  If HE makes the Final Offer, for as long as it is held open
(i.e., that it may be accepted by the Company without HE's subsequent right to
withdraw it), the Company will not, without first offering HE the opportunity to
do so, enter into a purchase or long term transponder service agreement for the
same number or fewer BSS Band transponders than proposed by HE at a lower price
per BSS Transponder (which, for the purposes of comparison, will be calculated
on a net present value basis as determined by the Company, but notified to HE so
that HE may make an adjustment in its offer to reflect this net present value)
than the price stated in the Final Offer. The Company may condition its offer to
HE on HE's acceptance of such other price, quantity, length of term and other
terms and conditions that the Company would offer a third party at the time (the
"Revised Offer"). HE shall have ten (10) days to accept the Company's Revised
Offer or it shall be deemed to have been rejected. For the avoidance of doubt,
the previous sentence shall not apply to the Company's acceptance of the Final
Offer, as to which no further acceptance or rejection by HE is required or
permitted. The Company shall also notify HE at such time as the Company lowers
its price for long term transponder agreements on the applicable BSS satellite
for the number of transponders and for the service terms which had been included
in the Final Offer, which notice shall be given not fewer than ten (10) business
days before the reduced price is offered to any third party, during which period
HE will have the right to accept such revised offer. As used in this Section
3(e), "Company" or "Holding Company" includes its Subsidiaries or any of them.

                              4. Representations and Warranties of Minority
Stockholders. Each Minority Stockholder hereby severally and not jointly (and
solely with respect to itself and the Shares owned of record or beneficially by
such Stockholder) represents and warrants to HCI and the Company as follows:


                              (a) Ownership of Shares. Such Minority Stockholder
is the record and beneficial owner of the Shares set forth on Exhibit A hereto,
and such shares constitute all of the Shares owned of record or beneficially by
such Minority Stockholder. With respect to the number of shares set forth
opposite such Minority Stockholder's name on Exhibit A hereto, and with the
exceptions noted thereon, such Minority Stockholder has sole voting power and
sole power to issue instructions with respect to the matters set forth in
Sections 2 and 3 hereof, sole power of disposition, sole power of conversion,
sole power to demand appraisal rights and sole power to agree to all of the
matters set forth in this Agreement, in each case with no limitations,
qualifications or restrictions on such rights, subject to applicable securities
laws and the terms of this Agreement.

                              (b) Due Authorization. Such Minority Stockholder
is, as applicable, duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and has all requisite capacity,
power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by such Minority Stockholder
of this Agreement and the performance by such Minority Stockholder of its
obligations hereunder have been duly and validly authorized by such Minority
Stockholder and no other proceedings on the part of such Minority Stockholder
are necessary to authorize the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by such Minority
Stockholder and constitutes a valid and binding agreement enforceable against
such Stockholder in accordance with its terms except to the extent (i) such
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors rights and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought.

                              (c) No Conflicts. Except for filings,
authorizations, consents and approvals as contemplated by the Reorganization
Agreement or the Univisa Contribution Agreement and necessary for the
consummation of the transactions contemplated thereby which have been obtained,
(i) no filing with, and no permit, authorization, consent or approval of, any
state or federal public body or authority is necessary for the execution of this
Agreement by such Minority Stockholder and the consummation by such Minority
Stockholder of the transactions contemplated hereby and (ii) none of the
execution and delivery of this Agreement by such Minority Stockholder, the
consummation by such Minority Stockholder of the transactions contemplated
hereby or compliance by such Minority Stockholder with any of the provisions
hereof shall (A) conflict with or result in any breach of the organizational
documents of such Minority Stockholder, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Minority Stockholder is a party or by which
such Minority Stockholder or any of its properties or assets may be bound, or
(C) violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to such Minority Stockholder or any of its properties or
assets.

                              5. Representations and Warranties of HCI. The
Company and HCI jointly and severally represent and warrant to each Minority
Stockholder as follows:

                              (a) Organization. Each such corporation is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has all requisite corporate power or
other power and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery by such corporation of this
Agreement and the performance by such corporation of its obligations hereunder
have been duly and validly authorized by all necessary corporate action of such
corporation.

                              (b) Agreement. This Agreement has been duly and
validly executed and delivered by such corporation and constitutes a valid and
binding agreement of such corporation enforceable against it in accordance with
its terms, except that (i) such enforcement may be subject to applicable
bankruptcy, insolvency, or other similar laws, now or hereafter in effect,
affecting creditors' rights generally, and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceedings therefor may be brought.

                              (c) No Conflicts. Except for filings,
authorizations, consents, and approvals as contemplated by the Reorganization
Agreement or the Univisa Contribution Agreement and necessary for the
consummation of the transactions contemplated thereby which have been obtained,
(i) no filing with, and no permit, authorization, consent or approval of, any
state or federal public body or authority is necessary for the execution of this
Agreement by such corporation and the consummation by such corporation of the
transactions contemplated hereby, and (ii) none of the execution and delivery of
this Agreement by such corporation, the consummation by such corporation of the
transaction contemplated hereby or compliance by such corporation with any of
the provisions hereof shall (A) conflict with or result in any breach of the
charter or bylaws of such corporation, (B) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third-party right of termination, cancellation, material
modifications or acceleration) under any of the terms, conditions or provisions
of any note, loan agreement, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such corporation is a party or by which such
corporation of its properties or assets may be bound, or (C) violate any order,
writ, injunction, decree, judgment, statute, rule or regulation applicable to
such corporation or its properties or assets.

                           6.        Legend.

                              (a) Each Stockholder severally and not jointly
agrees that it will not request Holding Company to register the transfer (by
book-entry or otherwise) of any certificate or uncertificated interest
representing any of the Shares, unless such transfer is made in compliance with
this Agreement.

                              (b) Each Stockholder severally and not jointly
agrees that it shall promptly after the date hereof surrender to Holding Company
all certificates representing the Shares held by such Stockholder, and Holding
Company shall place the following legend on such certificates, which legend
shall remain on such certificates until the sale of such Shares to a person who
is not a Stockholder or the termination of this Agreement, whichever is earlier:

 "THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN AGREEMENT,  DATED
 AS OF _________  __, 199__  BETWEEN  STOCKHOLDERS  AND THE COMPANY.  THE SHARES
 ARE SUBJECT TO  RESTRICTIONS  ON TRANSFER AND VOTING.  A COPY OF SUCH AGREEMENT
 IS AVAILABLE AT THE PRINCIPAL OFFICE OF THE COMPANY."

                              7. Term of Agreement. This Agreement has been
entered into in connection with the transactions contemplated by the
Reorganization Agreement described in Recital A and the Univisa Contribution
Agreement described in Recital B and shall become effective upon the Closing.
This Agreement shall terminate upon the earlier of (i) five years from the
Closing Date, or (ii) the occurrence of a Termination Event. Notwithstanding the
foregoing, the provisions of Sections 2(c) (Standstill), 3(b) (Transactions with
Affiliates), 3(c) and (d) (covenants not to compete), 3(e) (first offer), and 8
(miscellaneous) shall terminate five years after the Closing Date.

                              8. Miscellaneous.

                              (a) Expenses. All costs and expenses incurred in
connection with this Agreement and the transactions contemplated hereby shall be
paid by the party incurring such expenses.

                              (b) Notices. All notices, requests, demands and
other communications which are required or may be given under this Agreement
shall be in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if sent for next day
delivery to a domestic address by recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to: [to come].

                              Interpretation. When a reference is made in this
Agreement to Sections, such reference shall be to a Section of this Agreement
unless otherwise indicated. Headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Whenever the word "include", "includes" or
"including" are used in this Agreement, they shall be deemed to be followed by
the words "without limitation". This Agreement shall not be construed for or
against either party by reason of the authorship or alleged authorship of any
provision hereof or by reason of the status of the respective parties. All terms
defined in this Agreement in the singular shall have comparable meanings when
used in the plural, and vice versa, unless otherwise specified.

                              (d) Entire Agreement; No Third-Party
Beneficiaries. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, among the
parties with respect to the subject matter hereof and is not intended to confer
upon any person other than the parties hereto any rights or remedies hereunder.

                              (e) Assignment. Except to a Permitted Transferee,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned (whether by operation of law or otherwise) by any Minority
Stockholder without the consent of HCI or by HCI or its Affiliates without the
consent of Minority Stockholders holding 66_% of the Shares held by Minority
Stockholders, which consent may be granted or withheld in such party's
discretion. Subject to the preceding sentence, this Agreement will be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns. No person who is not a Stockholder or
Permitted Transferee who acquires Shares shall have any rights under this
Agreement except to the extent that the assignment thereof has been approved as
required by Section 8(e), nor any obligations hereunder except to the extent
expressly assumed.

                              (f) Governing Law. This Agreement shall be
construed, interpreted and the rights of the parties determined in accordance
with the laws of the State of Delaware (without reference to the choice of law
provisions), except with respect to matters of law concerning the internal
corporate affairs of any corporate entity which is a party to or the subject of
this Agreement, and as to those matters the law of the jurisdiction under which
the respective entity derives its powers shall govern.

                              (g) Severability. Each party agrees that, should
any court or other competent authority hold any provision of this Agreement or
part hereof to be null, void or unenforceable, or order any party to take any
action inconsistent herewith or not to take an action consistent herewith or
required hereby, the validity, legality and enforceability of the remaining
provisions and obligations contained or set forth herein shall not in any way be
affected or impaired thereby. Upon any such holding that any provision of this
Agreement is null, void or unenforceable, the parties will negotiate in good
faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated by this Agreement are consummated to the extent
possible. Except as otherwise contemplated by this Agreement, to the extent that
a party hereto took an action inconsistent herewith or failed to take action
consistent herewith or required hereby pursuant to an order or judgment of a
court or other competent authority, such party shall incur no liability or
obligation unless such party did not in good faith seek to resist or object to
the imposition or entering of such order or judgment.

                              (h) Injunctive Relief. The parties acknowledge
that it will be impossible to measure in money the damages that would be
suffered if the parties fail to comply with any of the obligations herein
imposed on them and that in the event of any such failure, an aggrieved person
or entity will be irreparably damaged and will not have an adequate remedy at
law. Any such person or entity shall, therefore, be entitled to injunctive
relief, including specific performance, to enforce such obligations, and if any
action should be brought in equity to enforce any of the provisions of this
Agreement, none of the parties shall raise the defense that there is an adequate
remedy at law.

                              (i) Attorneys' Fees. If any party to this
Agreement brings an action to enforce its rights under this Agreement, the
prevailing party shall be entitled to recover its costs and expenses, including
without limitation reasonable attorneys' fees, incurred in connection with such
action, including any appeal of such action.

                              (j) Cumulative Remedies. All rights and remedies
of either party hereto are cumulative of each other and of every other right or
remedy such party may otherwise have at law or in equity, and the exercise of
one or more rights or remedies shall not prejudice or impair the concurrent or
subsequent exercise of other rights or remedies.

                              (k) Counterparts. This Agreement may be executed
in two or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when executed and delivered by each of the
parties.

                              (l) Amendments, Waivers, Etc. This Agreement may
not be amended, changed, supplemented, or otherwise modified or terminated,
except upon the execution and delivery of a written agreement executed by the
parties hereto; provided that performance hereof by any Minority Stockholder may
be waived by HCI and performance hereof by HCI, its Affiliates or the Company
may be waived by Minority Stockholders holding 66 2/3 % of the Shares held by
Minority Stockholders.

                              (m) Obligations of Stockholders. The liabilities
and obligations of each Stockholder under any provision of this Agreement are
several and not joint and apply solely to such Stockholder and to the Shares
held of record or beneficially owned by such Stockholder. No Stockholder shall
have any liability or obligation under this Agreement for any act, omission or
breach by any other Stockholder.

                              (n) Service of Process. Each of the parties hereto
irrevocably consents to the service of any process, pleading, notices or other
papers by the mailing of copies thereof by registered, certified or first class
mail, postage prepaid, to such party at such party's address set forth herein,
or by any other method provided or permitted under Delaware law. Additionally,
each party hereby appoints RL&F Service Corp., One Rodney Square, Wilmington,
Delaware 19810, as agent for service of process in Delaware.

                              (o) Consent and Jurisdiction. Each party
irrevocably and unconditionally agrees and consents that any suit, action or
other legal proceeding arising out of or related to this Agreement shall be
brought and heard in New Castle County, State of Delaware, and each party
irrevocably consents to personal jurisdiction in any and all tribunals in said
County.


<PAGE>
                IN WITNESS WHEREOF, the parties have executed this Stockholder
Agreement as of the date first above written.

                                        MAGELLAN INTERNATIONAL, INC.

                                        By:
                                           -----------------------------
                                                 Charles H. Noski
                                                 President



                                        HUGHES COMMUNICATIONS, INC.

                                        By:
                                           -----------------------------
                                                 Jerald F. Farrell
                                                 President



                                        SATELLITE COMPANY, L.L.C.

                                        By:
                                           -----------------------------
                                                 Guillermo Canedo White
                                                 Authorized Signatory


<PAGE>
                              CLASS A STOCKHOLDERS




    Name:       Mary Anselmo, individually and as a trustee of the Article VII
                Trust created by the RENE ANSELMO REVOCABLE TRUST DATED JUNE 10,
                1994 and as a successor trustee under the Voting Trust Agreement
                dated as of February 28, 1995 and as a trustee of the RAYCE
                ANSELMO TRUST DATED DECEMBER 23, 1991





    Name:       Frederick A. Landman, individually and as a trustee of the
                Article VII Trust created by the RENE ANSELMO REVOCABLE TRUST
                DATED JUNE 10, 1994 and as a successor trustee under the Voting
                Trust Agreement dated as of February 28, 1995





    Name:       Lourdes Saralegui, individually and as a trustee of the Article
                VII Trust created by the RENE ANSELMO REVOCABLE TRUST DATED JUNE
                10, 1994 and as a successor trustee under the Voting Trust
                Agreement dated as of February 28, 1995




    Name:       Pier Landman, individually and as the sole trustee of the CHLOE
                LANDMAN TRUST DATED JUNE 10, 1988 and the sole trustee of the
                RISSA LANDMAN TRUST DATED JUNE 10, 1988




    Name:       Edward J. Landau, as co-trustee of the FREDERICK A. LANDMAN
                IRREVOCABLE TRUST DATED DECEMBER 22, 1995




    Name:       Patrick J. Costello, as co-trustee of the FREDERICK A. LANDMAN
                IRREVOCABLE TRUST DATED DECEMBER 22, 1995



    Name:       Reverge Anselmo, individually


<PAGE>
                                    EXHIBIT A
                             Stockholders Agreement

--------- ----------------------------------------------------------------------
                                         NUMBER OF SHARES OF COMMON STOCK
                                       ------------------------------------
NAME AND ADDRESS FOR NOTICE             OF RECORD                BENEFICIALLY
--------------------------------------------------------------------------------
HCI
GALAXY
SATELLITE COMPANY, L.L.C.
Univisa Satellite Holdings, Inc.
Mary Anselmo
Mary Anselmo, as Trustee
Reverge Anselmo
Reverge Anselmo, as Trustee
Patrick Costello, Trustee
Edward J. Landau, Trustee
Frederick A. Landman
Frederick A. Landman, as Trustee
Pier Landman, Trustee

TOTAL                                     0.00                      0.00


                               Encumbrances:
                              Notice Copies:


Note A:
         All of the Shares listed opposite the names of the Class A Holders
above are subject to the provisions of a Voting Trust Agreement dated as of
February 28, 1995 among the Class A Holders, a copy of which has been made
available to HCI and Cosmo, and are owned of record by the Class A Trustees. In
addition, has the sole dispositive power over the Shares listed opposite the
Article VII Trust created by the Revocable Trust dated June 10, 1994 and the
Shares listed opposite their name above.

<PAGE>

                                      1.1-3

                                  Schedule 1.1

                                 EXCLUDED ASSETS

1.   Spaceway Business

     a.       All rights under Contracts primarily related to the Spaceway
              Business, including Contracts with partners or potential partners
              or investors, local operators or system developers and Contracts
              related to the provision of office space, equipment, furniture,
              administrative and maintenance services. "Spaceway Business" means
              the business of HCI and its subsidiaries to construct and maintain
              a global or regional network of satellites that have processor
              payloads and multiple spot beams. "Contracts" means any agreement,
              contract, lease, note, loan, evidence of indebtedness, purchase,
              order, letter of credit, indenture, security or pledge agreement,
              franchise agreement, undertaking, practice, covenant not to
              compete, employment agreement, license, instrument, obligation or
              commitment to which a person is a party or is bound, whether oral
              or written.

     b.       All employees employed primarily in connection with the Spaceway
              Business.

     c.       All Galaxy Intellectual Property primarily related to or generated
              by the Spaceway Business.

     d.       All Permits held or applied for primarily in connection with
              the Spaceway Business, including, without limitation,
              applications filed with the Federal Communications Commission
              for Ka-band satellites at the following orbital locations:
              49(Degree)W, 99(Degree)W, 101(Degree)W, 25(Degree)E,
              54(Degree)E, 101(Degree)E, 111(Degree)E and 164(Degree)E.

     e.       All furniture, office equipment and other assets related primarily
              to the Spaceway Business.

     f.       All other information and documentation related primarily to the
              Spaceway Business.

2.   Mobile Business

     a.       All rights under Contracts (to which one or more of Galaxy,
              HCSS, HCS, HCCS and HCJ is or are a party or parties) that are
              related to primarily the Mobile Business, including Contracts
              with partners or potential partners, local operators, system
              developers and Contracts related to the provision of office
              space, equipment, furniture, administrative and maintenance
              services. "Mobile Business" means the business presently being
              developed by HCI and its subsidiaries primarily to provide
              mobile telecommunications services through satellite delivery.

     b.       All employees employed primarily in connection with the Mobile
              Business.

     c.       All Galaxy Intellectual Property related primarily to or generated
              by the Mobile Business.

     d.       All Permits held or applied for primarily in connection with the
              Mobile Business.

     e.       All furniture, office equipment and other assets related primarily
              to the Mobile Business.

     f.       All other information and documentation related primarily to the
              Mobile Business.

3.   American Mobile Satellite Corporation ("AMSC")

     a.       All capital stock or warrants, options or other rights to acquire
              capital stock held by HCI or any of its Subsidiaries of AMSC.

     b.       All rights under Contracts (to which one or more of Galaxy, HCSS,
              HCS, HCCS and HCJ is or are a party or parties) that are related
              primarily to the oversight or financing of AMSC, including
              Contracts related to office space, equipment, furniture,
              administrative and maintenance services.

     c.       All employees employed primarily to oversee AMSC.

     d.       All Galaxy Intellectual Property related primarily to or generated
              by AMSC.

     e.       All other information and documentation related primarily to AMSC.

4.   ICO Global Communications ("ICO")

     a.       All capital stock or warrants, options or other rights to acquire
              capital stock held by HCI or any of its Subsidiaries of ICO.

     b.       All rights under Contracts (to which one or more of Galaxy, HCSS,
              HCS, HCCS and HCJ is or are a party or parties) that are related
              primarily to the oversight or financing of ICO or entered into
              with ICO, including Contracts related to office space, equipment,
              furniture, administrative and maintenance services.

     c.       All employees employed primarily to oversee ICO.

     d.       All Galaxy Intellectual Property related primarily to or generated
              by HCI or any of its Subsidiaries related to ICO.

     e.       All other information and documentation related primarily to ICO.

5.   Litigation

     a.       All rights of Galaxy, HCSS, HCS, HCCS and HCJ in connection with
              the lawsuit known as Hughes Communications Galaxy, Inc. v. United
              States of America, Case No. 91-1032C.

6.   Insurance policies - All insurance policies except those listed on 
     Schedule 6.11.

7.   Real Estate

     a.       Castle Rock Land: Castle Rock, Colorado

     b.       Schiller Park Asset: Schiller Park, Illinois

     c.       California Broadcast Center (Building and Land): Long Beach,
              California