COMMERCIAL-IN-CONFIDENCE







                               ORION 2 SPACECRAFT


                                PURCHASE CONTRACT




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                      ORION 2 SPACECRAFT PURCHASE CONTRACT



                                    PART 1(A)



                      ORION 2 PRICING, TERMS AND CONDITIONS


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                                                  TABLE OF CONTENTS



WHEREAS........................................................................1

DEFINITIONS....................................................................1

1. ORION 2 CONTRACT...........................................................11

2. ENTIRE AGREEMENT, EFFECTIVE DATE...........................................12

3. SCOPE OF THE WORK..........................................................12

4. RESERVED...................................................................13

5. CONTRACT PRICE.............................................................14

6. PAYMENT....................................................................15

7. ACCESS TO WORK.............................................................19

8. DELIVERABLE ITEMS AND DELIVERY DATES.......................................22

9. FINAL ACCEPTANCE...........................................................23

10. TRANSFER OF TITLE AND ASSUMPTION OF RISK..................................28

11. ORION 2 SPACECRAFT DELIVERY INCENTIVE AND LATE
DELIVERY LIQUIDATED DAMAGES...................................................28

12. EXTENSIONS FOR EXCUSABLE DELAYS...........................................29

13. CORRECTION OF DEFECTS.....................................................31

14. DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY
AND  INTER-PARTY WAIVER OF LIABILITY..........................................34

15. ORION 2 SPACECRAFT IN-ORBIT PERFORMANCE WARRANTY..........................36

16. SUBCONTRACTS..............................................................40

                                        i

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17. INDEMNIFICATION...........................................................41

18. INSURANCE.................................................................43

19. REPLACEMENT SATELLITE.....................................................46

20. TERMINATION FOR CONVENIENCE...............................................49

21. REMEDIES FOR DEFAULT......................................................50

22. TERMINATION IN SPECIAL CASES..............................................55

23. PUBLICATION OF INFORMATION................................................56

24. CONFIDENTIALITY AND NONDISCLOSURE
OF PROPRIETARY  INFORMATION...................................................57

25. LICENSE RIGHTS............................................................59

26. PATENTS, TRADEMARKS AND COPYRIGHTS........................................60

27. ORION 2 CONTRACT AMENDMENTS...............................................61

28. GOVERNMENTAL APPROVALS....................................................62

29. RESPONSIBILITY FOR THE CONTRACT...........................................63

30. DISPUTE RESOLUTION........................................................64

31. CONTRACT MANAGEMENT.......................................................66

32. SECURITY INTEREST AND FINANCIAL INFORMATION...............................67

33. ASSIGNMENT................................................................67

34. NOTICES AND DOCUMENTATION.................................................68

35. SEVERABILITY AND WAIVER...................................................70

36. COMPLIANCE WITH THE LAW, PERMITS AND LICENSES.............................70

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37. APPLICABLE LAW; SUBMISSION TO JURISDICTION; APPOINTMENT OF
AGENT FOR ACCEPTANCE OF SERVICE; INTERPRETATION AND   LANGUAGE................71

38. SURVIVAL..................................................................72

39. KEY PERSONNEL.............................................................72

40. PROGRESS REPORTS..........................................................73

41. LAUNCH VEHICLE AGENCY.....................................................73

42. GUARANTEE OF CONTRACTOR OBLIGATIONS.......................................74

43. INTEREST..................................................................75

44. COUNTERPARTS..............................................................75


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                            COMMERCIAL-IN-CONFIDENCE

                      ORION 2 SPACECRAFT PURCHASE CONTRACT

                 PART 1(A) ORION 2 PRICING, TERMS and CONDITIONS


THIS ORION 2 SPACECRAFT  PURCHASE  CONTRACT  (referred to herein as the "ORION 2
Contract")  is made as of the 29th day of January  1997,  between  INTERNATIONAL
PRIVATE SATELLITE PARTNERS, L.P., d/b/a ORION ATLANTIC, L.P., a Delaware limited
partnership  with its  principal  offices  located at 2440  Research  Boulevard,
Rockville,   Maryland  20850,  United  States  of  America  (hereinafter  called
"ORION"),  and MATRA MARCONI SPACE UK LIMITED,  a company organized and existing
under the Laws of  England  and Wales with its  registered  office at The Grove,
Warren Lane,  Stanmore,  Middlesex,  HA7 4LY,  ENGLAND  (hereinafter  called the
"Contractor").


WHEREAS


A.       The  primary  object of ORION is the  carrying  on of the  business  of
         providing a telecommunications system by the use of space satellites.

B.       ORION  anticipates  providing  the  business  referred  to in recital A
         through the ORION satellite ("ORIONSAT") system.

C.       The ORION 2  Spacecraft  to be  constructed  pursuant  to this  ORION 2
         Contract is intended to form part of the space  segment of the ORIONSAT
         system.

D.       ORION and the Contractor  have agreed that the Contractor  will perform
         the work as  defined  below and that ORION will pay for the Work on the
         terms and conditions set out in this Agreement.


NOW, THEREFORE,  in consideration of the above premises and the mutual covenants
and agreements contained herein, the parties hereto (hereinafter, the "Parties")
agree as follows:



DEFINITIONS


"Advance Funding"                             means the funding requirements for
                                              Long-Lead  Items  related  to  the
                                              Replacement   Satellite,   as  set
                                              forth in Article 19.2 hereof.

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"Affiliate"                                   means, with respect to any entity,
                                              any  other   entity   Controlling,
                                              Controlled   by  or  under  common
                                              Control with such entity.

"Aggregate                                    Predicted  Transponder Life" means
                                              the    sum   of   the    Predicted
                                              Transponder Life of each and every
                                              Serviceable  Transponder  embodied
                                              in the Launched ORION 2 Spacecraft
                                              and represents a projection of the
                                              revenue-earning  capacity  of  the
                                              Launched ORION 2 Spacecraft.

"Amendment to the ORION 2 Contract"           means    a    written    agreement
                                              modifying  the  ORION 2  Contract,
                                              which   agreement   is  signed  on
                                              behalf  of ORION by its  President
                                              (or another  person  designated by
                                              the  President  in writing to sign
                                              such  agreement)  and on behalf of
                                              the   Contractor   by   both   its
                                              respective  Contracts  Manager and
                                              Project    Manager,    and   which
                                              agreement expressly states that it
                                              is an  "Amendment  to the  ORION 2
                                              Contract."

"Business Day"                                means  any  day  other   than  the
                                              following:  a Saturday,  Sunday or
                                              other  day  on  which   banks  are
                                              authorized  to be  closed  in  the
                                              State  of  New  York  or   London,
                                              England.

"Calendar Day"                                means any day.

"Constructive Total Loss"                     means, with respect to the ORION 2
                                              Spacecraft,  that  either  of  the
                                              following   conditions  (A  or  B)
                                              applies:  (A)  (i)  the  Aggregate
                                              Predicted Transponder Life is less
                                              than   __________________________,
                                              or (ii) fewer than _______________
                                              downlink      Transponders     are
                                              Serviceable Transponders, or (iii)
                                              fewer  than____________   downlink
                                              Transponders  with  ______  at the
                                              ________ GHz frequency and _______
                                              at  either  of the  two  frequency
                                              ranges of  _________  or _________
                                              GHz  frequency   are   Serviceable
                                              Transponders; or (B) (i) the ORION
                                              2  Spacecraft  fails to  arrive at
                                              its designated orbital location or
                                              the  Contractor  fails to  deliver
                                              the  In-Orbit   Acceptance  Report
                                              within  one   hundred  and  eighty
                                              (180)  Calendar Days after Launch,
                                              or (ii) the ORION 2 Spacecraft  is
                                              completely    destroyed    or   is
                                              otherwise  rendered  incapable  of
                                              operation.

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"Consultant"                                  means   any   third    party   (i)
                                              authorized  by  ORION  to  provide
                                              technical and program  support and
                                              assistance in connection  with the
                                              performance   of   the   ORION   2
                                              Contract,   or  (ii)  which  is  a
                                              representative of or consultant to
                                              any Financing Entity.

"Contract Price"                              means the firm fixed  price of Two
                                              Hundred  Million,   Eight  Hundred
                                              Thirty      Thousand       Dollars
                                              ($200,830,000)   as  such  may  be
                                              adjusted  in  accordance  with the
                                              terms of the ORION 2 Contract.

"Control," "Controlling," or "Controlled"     means  with  regard to any  entity
                                              the legal, beneficial or equitable
                                              ownership, directly or indirectly,
                                              of fifty  (50)  percent or more of
                                              the   capital   stock   (or  other
                                              ownership   interest,   if  not  a
                                              corporation)    of   such   entity
                                              ordinarily having voting rights.

"Correction Plan"                             means  a  plan  submitted  by  the
                                              Contractor  which  details how the
                                              Contractor  shall  correct  (i)  a
                                              failure to make adequate  progress
                                              towards  completion of any Work or
                                              (ii) a default or breach under the
                                              ORION  2  Contract  in  accordance
                                              with Article 21.

"Data and  Documentation"                     means that data and  documentation
                                              to be supplied  by the  Contractor
                                              to   ORION    pursuant    to   the
                                              requirements    of    Part    2(A)
                                              (Statement   of   Work)   and   as
                                              specified  in Part  2(B)  (ORION 2
                                              Contract             Documentation
                                              Requirements List).

"Defect"                                      means (i) with regard to the ORION
                                              2  Spacecraft  and all  components
                                              thereof,  any  defect  in  design,
                                              material   or   workmanship,    or
                                              failure to  perform in  accordance
                                              with   the    specifications   and
                                              requirements  set out or  referred
                                              to in the ORION 2 Contract and the
                                              Data and  Documentation  delivered
                                              from time to time  under the ORION
                                              2  Contract  which  ORION  or  its
                                              Consultant reasonably believes may
                                              adversely   affect   the  ORION  2
                                              Spacecraft performance;  (ii) with
                                              regard to  services,  a failure to
                                              conform   to   a   high   standard
                                              consistent with industry practice;
                                              and (iii) with  regard to Data and
                                              Documentation,  a failure  to meet
                                              any specifications or requirements


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                                              set forth in the ORION 2 Contract.

"Deliverable Item"                            means the ORION 2  Spacecraft  and
                                              Data and  Documentation  and other
                                              items so  identified in subsequent
                                              amendments    to   the   ORION   2
                                              Contract.    Where   the   context
                                              permits,  as used  herein the term
                                              "Deliverable  Items" shall include
                                              and refer not only to the whole of
                                              the items listed in Article 8, but
                                              also every component part thereof.

"Delivery"                                    shall have the meaning ascribed to
                                              it in Article 8.1.

"Delivery Dates"                              means  those  dates  set  forth in
                                              Article 8.1.

"Demand"                                      means,  in the  context of Article
                                              21 hereof,  a demand by ORION made
                                              of   the    Contractor   for   the
                                              Contractor to provide a Correction
                                              Plan  in  the   event   that   the
                                              Contractor   is  failing  to  make
                                              adequate     progress    in    the
                                              performance   of   the   ORION   2
                                              Contract   or  is  in  default  or
                                              breach.

"Dollars"                                     shall mean United States Dollars.

"Excusable Delay"                             shall have the meaning ascribed to
                                              it in Article 12.

"F1 Contract"                                 means  the  Second   Amended   and
                                              Restated Purchase Contract for the
                                              F1   Spacecraft    between   Orion
                                              Atlantic,   L.P.   and  MMS  Space
                                              Systems Limited (formerly known as
                                              British  Aerospace  Space  Systems
                                              Limited),  as  assignee of British
                                              Aerospace  Public Limited Company,
                                              dated  26   September   1991,   as
                                              amended.

"Final Acceptance"                            shall have the meaning ascribed to
                                              it in Article 9.

"Financing Agreements"                        means  any and all  documents  and
                                              agreements    evidencing    and/or
                                              securing monies provided on a full
                                              or  partial   debt  basis  by  any
                                              Financing  Entity to ORION to fund
                                              the  construction  and delivery of
                                              the  ORION  2  Spacecraft  and the
                                              purchase of Long-Lead Items.

"Financing Entity"                            means any entity  (other  than the
                                              Contractor  or parties  related to
                                              the Contractor),  e.g., commercial

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                                              bank,  merchant  bank,  investment
                                              bank,      commercial      finance
                                              organization,    corporation,   or
                                              partnership,  providing money on a
                                              full  or  partial  debt  basis  to
                                              ORION to fund the construction and
                                              delivery of the ORION 2 Spacecraft
                                              and purchase of Long-Lead Items.

"Initial Incentive Amount"                    means
                                              _____________________________
                                              __________________________________
                                              of the Total  Amount  at Risk,  as
                                              may be adjusted in accordance with
                                              the terms of the ORION 2 Contract.

"In-Orbit Acceptance Requirements"            means that document  which is Part
                                              3(D) of the ORION 2 Contract.

"In-Orbit                                     Acceptance  Test Plan"  means that
                                              document  which  is a  Deliverable
                                              Item  under  Part  2(B)  (ORION  2
                                              Contract             Documentation
                                              Requirements    List)    and    as
                                              described  in Part 3(D)  (In-Orbit
                                              Commissioning  and Acceptance Test
                                              Requirements)   of  the   ORION  2
                                              Contract.

"In-Orbit Acceptance Test Report" or          means  that  document  which  is a
"In-Orbit Acceptance Report"                  Deliverable  Item  under Part 2(B)
                                              (ORION  2  Contract  Documentation
                                              Requirements    List)    and    as
                                              described in Parts 2(A) (Statement
                                              of  Work)   and   3(D)   (In-Orbit
                                              Commissioning  and Acceptance Test
                                              Requirements)   of  the   ORION  2
                                              Contract.

"In-Orbit Performance Warranty"               shall   mean   the    Contractor's
                                              warranty as to the  performance of
                                              the ORION 2  Spacecraft  following
                                              Final Acceptance.

"In-Orbit Performance Warranty Period"        shall have the meaning ascribed to
                                              it in Article 15.2.

"Insurers"                                    means  those  entities   providing
                                              Launch Insurance.

"Intentional Ignition"                        means,  with respect to the Launch
                                              Vehicle,  the point in time during
                                              the    launch    countdown    when
                                              initiation  of the gas  generators
                                              igniters firing command and firing
                                              of  any  of  the  gas   generators
                                              igniters occurs.

"Key Personnel"                               shall have the meaning ascribed to
                                              it in Article 39.

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"Launch"                                      means    Intentional     Ignition,
                                              followed  by  (i)  release  of the
                                              Launch  Vehicle  from the launcher
                                              hold down  restraints for purposes
                                              of    lift-off,    or    (ii)    a
                                              Constructive Total Loss.

"Launch Agreement"                            means the  agreement  between  the
                                              Contractor  and the Launch Vehicle
                                              Agency to  perform  the  Launch of
                                              the ORION 2 Spacecraft.

"Launch Damaged Transponders"                 shall have the meaning ascribed to
                                              it in Article 15.2.2.

"Launch Date"                                 means the calendar date within the
                                              Launch  Period  during  which  the
                                              Launch is scheduled to occur.

"Launch Insurance" means insurance            which    covers    the   ORION   2
                                              Spacecraft    from   the    period
                                              beginning at Intentional  Ignition
                                              and  ending  no  sooner  than  one
                                              hundred eighty (180) Calendar Days
                                              following Launch.

"Launch Period"                               means   the   period  1  May  1999
                                              through  31  July  1999,  as  such
                                              period   may   be    adjusted   by
                                              agreement of the  Parties,  during
                                              which the Launch is  scheduled  to
                                              occur.

"Launch Services"                             shall      mean     the     launch
                                              campaign/transportation,    launch
                                              services,   mission  planning  and
                                              launch/early    operations   phase
                                              services   as  more   particularly
                                              described  in  Section  7 of  Part
                                              2(A).

"Launch Slot"                                 means  the  30 day  period  during
                                              which the Launch is  scheduled  to
                                              occur as set  forth in the  Launch
                                              Agreement,  which  period  will be
                                              determined  within  seven  days of
                                              the   Launch   Vehicle    Agency's
                                              receipt of Progress Payment No. 6.

"Launch Vehicle"                              means  an  Atlas   IIAS   Standard
                                              launch  vehicle  system (with such
                                              customization  as  may  be  agreed
                                              separately   between   the  Launch
                                              Vehicle    Agency    and    ORION)
                                              consisting of an Atlas lower stage
                                              and Centaur upper stage  connected
                                              by  an  interstage  adapter,   the
                                              payload  fairing,  and the payload
                                              adapter with separation system.

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"Launch Vehicle Agency"                       means  Lockheed   Martin  or  such
                                              other Subcontractor as is selected
                                              to supply the Launch  Vehicle  for
                                              the ORION 2 Spacecraft.

"Launched ORION 2 Spacecraft"                 means the ORION 2 Spacecraft after
                                              its Launch.

"Long-Lead Items"                             means those  satellite  components
                                              purchased   by   the    Contractor
                                              pursuant to Article 19.

"Major Subcontract"                           means a Subcontract  which is of a
                                              value exceeding Two Million,  Five
                                              Hundred      Thousand      Dollars
                                              ($2,500,000  ) or of importance or
                                              critical  in nature to the overall
                                              program (e.g.,  a Subcontract  for
                                              major    or    critical     units,
                                              subsystems   or  other   items  or
                                              services).

"Maneuver Lifetime"                           shall have the meaning ascribed to
                                              it in Article 3.4.

"Milestone"                                   means  completion  of a portion of
                                              the Work with  respect  to which a
                                              payment   is   to   be   made   in
                                              accordance   with  the   Milestone
                                              Payment Plan  incorporated in Part
                                              1(B)  (ORION 2  Payment  Plans and
                                              Termination  Liability Amounts) of
                                              the ORION 2 Contract.

"Milestone Payments"                          means  those  payments  listed  as
                                              Milestone  Payments  in Part  1(B)
                                              (ORION   2   Payment   Plans   and
                                              Termination  Liability Amounts) of
                                              the ORION 2 Contract.

"Mission Specific Hardware and Software"      means those items of hardware  and
                                              software  described  in Section 10
                                              of Part 2(A)  (Statement  of Work)
                                              of the ORION 2 Contract.

"Monthly Amount"                              means the  difference  between the
                                              Total   Amount  at  Risk  and  the
                                              Initial   Incentive  Amount  which
                                              difference  is divided  into sixty
                                              (60) equal  monthly  amounts  each
                                              having  a  value  of  ------------
                                              ----------------------------------
                                              __________________________, as may
                                              be adjusted in accordance with the
                                              terms of the ORION 2 Contract.

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"NPD" or "Notice to Proceed Date"             means February 28, 1997.

"Option"                                      means  ORION's  option to purchase
                                              the   ORION  2   Spacecraft   from
                                              Contractor,   which   option   was
                                              granted  by  Contractor  to  ORION
                                              under  Section  2  of  the  Option
                                              Agreement.

"Option Agreement"                            means  the  Amended  and  Restated
                                              Option  Agreement  for Purchase of
                                              ORION 2 Spacecraft, dated the date
                                              first written above, between ORION
                                              and Contractor.

"ORION 2 Spacecraft"                          means   the    satellite   to   be
                                              constructed and delivered to ORION
                                              as  part  of  the   Work   and  as
                                              identified in Part 2(A) (Statement
                                              of Work) of the ORION 2 Contract.

"Other Users"                                 shall have the  meaning  set forth
                                              in Article 14.4.1.

"Partial Loss"                                shall have the meaning ascribed to
                                              it in Article 9.2.2.

"Predicted Transponder Life"                  means the period of time, measured
                                              in years, over which a Serviceable
                                              Transponder   can   be   operated,
                                              commencing   from   the   date  of
                                              Delivery    of    the     In-Orbit
                                              Acceptance Report,  this period of
                                              time being equal to  whichever  is
                                              the shortest of:

                                              (i) thirteen (13) years, or

                                              (ii)   the   ORION  2   Spacecraft
                                              predicted      propellant     life
                                              calculated  in   accordance   with
                                              Section 5 of Part  3(D)  (In-Orbit
                                              Commissioning  and Acceptance Test
                                              Requirements)   of  the   ORION  2
                                              Contract, or

                                              (iii)  the  period  of  time  over
                                              which  there  is  predicted  to be
                                              sufficient  solar  array  power to
                                              operate      such      Serviceable
                                              Transponder   co-extensively  with
                                              all       other        Serviceable
                                              Transponders,     calculated    in
                                              accordance  with Section 5 of Part
                                              3(D) (In-Orbit  Commissioning  and
                                              Acceptance Test  Requirements)  of
                                              the ORION 2 Contract.

"Primary Transponder"                         means  a  Transponder   where  the
                                              communication

<PAGE>
                                              signals  are  received   from  and
                                              transmitted to the ground.

"Progress Payments"                           means  those  payments  listed  as
                                              Progress  Payments  in  Part  1(B)
                                              (ORION   2   Payment   Plans   and
                                              Termination Liability Amounts).

"Replacement Satellite"                       shall have the meaning ascribed to
                                              it in Article 19.

"Request for Payment"                         means a request for payment in the
                                              form of Annex A hereto.

"Revenue"                                     means  all  amounts   received  by
                                              ORION    with    respect   to   an
                                              individual  Primary   Transponder,
                                              whether  as a result  of its sale,
                                              lease,     license     or    other
                                              disposition,  it being  understood
                                              that,  if  said  amounts  are  not
                                              received    in    equal    monthly
                                              installments,   the  total  amount
                                              received  or  to  be  received  by
                                              ORION shall be deemed  received in
                                              equal  monthly  installments  over
                                              the  remainder  of  the  Predicted
                                              Transponder     Life    of    such
                                              Transponder.

"Satisfactorily Operating Primary             means a Primary  Transponder which
Transponder"                                  is  capable  of  meeting  (i)  the
                                              requirements of Part 3(A) (ORION 2
                                              Spacecraft         Specifications)
                                              regarding   Primary    Transponder
                                              performance  and (ii) the  Primary
                                              Transponder   Test    Requirements
                                              defined  in  Part  3(D)  (In-Orbit
                                              Commissioning  and Acceptance Test
                                              Requirements).

"Senior Executive"                            means    each   of   the    senior
                                              executives designated from time to
                                              time in  writing,  by ORION and by
                                              the Contractor,  respectively,  to
                                              be their  representatives  for the
                                              purposes  of  dispute   resolution
                                              under the ORION 2 Contract.

"Serviceable Transponder"                     means a Primary  Transponder which
                                              meets the requirements therefor as
                                              set  forth  in  Section  5 of Part
                                              3(D) (In-Orbit  Commissioning  and
                                              Acceptance Test  Requirements)  of
                                              the  ORION  2   Contract   and  is
                                              determined,  pursuant  to  Section
                                              5.2  thereof,  to  be  capable  of
                                              operation in accordance  with such
                                              requirements   during  periods  of
                                              eclipse.  In the  event  that  the
                                              Launched  ORION 2  Spacecraft  has


<PAGE>

                                              insufficient   energy  to  operate
                                              thirty      (30)       Serviceable
                                              Transponders  in  eclipse,   those
                                              specific  Transponders,   if  any,
                                              which     failed    the    testing
                                              requirements  of  Section  5.2  of
                                              Part  3(D),  will  not be  counted
                                              twice  in  determining  the  total
                                              number  of  Transponders  that are
                                              not Serviceable Transponders.

"Subcontract"                                 means a  contract  awarded  by the
                                              Contractor to a Subcontractor or a
                                              contract      awarded     by     a
                                              subcontractor  at any tier for the
                                              performance  of any  of  the  Work
                                              specified in the ORION 2 Contract.

"Subcontractor"                               means a person or company  awarded
                                              a Subcontract.

"Termination Liability  Amounts"              means   the   amounts   listed  as
                                              Termination  Liability  Amounts in
                                              Part 1(B)  (ORION 2 Payment  Plans
                                              and Termination Liability Amounts)
                                              of the ORION 2 Contract.

"Total Amount  at  Risk"                      means  a  firm  fixed  sum  of Ten
                                              Million,    Two   Hundred    Forty
                                              Thousand Dollars ($10,240,000).

"Transponder"                                 means an  individual  transmission
                                              channel   of   defined   bandwidth
                                              providing  a  path,  inclusive  of
                                              amplification,           frequency
                                              translation      and     frequency
                                              channelization,   from  a  receive
                                              antenna with defined  coverage and
                                              polarization to a transmit antenna
                                              also  with  defined  coverage  and
                                              polarization.

"Work"                                        means   the   whole  of  the  work
                                              described in Part 2(A)  (Statement
                                              of  Work)  and  elsewhere  in  the
                                              ORION 2  Contract  and,  where the
                                              context so  permits  or  requires,
                                              "Work"  includes any part or parts
                                              of the Work. The Work includes all
                                              elements and phases of  delivering
                                              the operational ORION 2 Spacecraft
                                              in-orbit     from    design    and
                                              manufacture   through  to  Launch,
                                              Launch   Services   and   in-orbit
                                              testing,    including,   but   not
                                              limited  to,   provision   of  all
                                              necessary       equipment      and
                                              documentation   related   thereto,
                                              including Deliverable Items.

Note: The satellites(s) (one or more) referred to herein are variously described
as the "spacecraft" or the "satellite(s)".

<PAGE>

1.       ORION 2 CONTRACT

1.1

The documents listed in this Article, as amended from time to time in accordance
with Article 27 herein, constitute the ORION 2 Contract:
<TABLE>
<CAPTION>

                                                                                                  Issue No.
         <S>                <C>                                                                   <C>
         Part 1(A):         ORION 2 Pricing, Terms and Conditions                                 Issue 1
         Part 1(B):         ORION 2 Payment Plans and Termination Liability Amounts               Issue 1
         Part 2(A):         ORION 2 Statement of Work                                             Issue 3
         Part 3(A):         ORION 2 Spacecraft Specifications                                     Issue 3
         Part 3(D):         ORION 2 In-Orbit Commissioning and Acceptance Test Requirements       Issue 3
         Part 3(C):         ORION 2 Spacecraft On-Ground Test Requirements                        Issue 4
         Part 2(B):         ORION 2 Contract Documentation Requirements List                      Issue 2
         Part 3(B):         ORION 2 Spacecraft Product Assurance Requirements                     Issue 4
         Part 4:             Replacement Satellite Long-Lead Items                                Issue 3
         Annex A:           ORION 2 Request for Payment and Contractor's Certificates             Issue 1
         Appendix I:        Form of Contractor Certificate                                        Issue 1
         Annex B:           Launch Agreement Inter-Party Waiver of Liability Provision            Issue 1
</TABLE>


1.2

Notwithstanding anything herein to the contrary, the documents listed in Article
1.1 above shall be deemed to constitute one fully integrated  agreement  between
the Parties.  Should there be any ambiguity,  discrepancy or inconsistency among
any  of the  documents  constituting  the  ORION  2  Contract,  such  ambiguity,
discrepancy  or  inconsistency  shall  be  resolved  according  to the  order of
precedence in which the documents are listed in Article 1.1. Unless specifically
indicated

<PAGE>

otherwise herein,  all Article and Paragraph  references in this Part 1(A) shall
be deemed to be to Part 1(A).

1.3

In the event the  Parties are unable to resolve any  ambiguity,  discrepancy  or
inconsistency  which affects the Work, ORION shall direct the Contractor and the
Contractor shall follow such direction as to the  interpretation  to be followed
in carrying out the Work. If the Contractor disputes ORION's  interpretation and
such  interpretation  results in delay and/or increased cost and/or risks,  such
dispute shall be handled by the procedures set forth in Article 30.


2.       ENTIRE AGREEMENT, EFFECTIVE DATE

2.1

This  ORION 2  Contract  constitutes  the  sole  agreement  as to the Work to be
performed  hereunder  by the  Contractor  and  supersedes  all prior  agreements
relating  thereto  other than the Option  Agreement,  which shall  survive until
ORION  exercises the Option granted  thereunder.  The Parties further agree that
this  ORION 2  Contract  does  not  supersede  the F1  Contract  (including  all
amendments thereto) and the F1 Contract shall not be integrated herewith.

2.2

On the date ORION exercises the Option,  the ORION 2 Purchase  Contract shall be
fully  effective  and shall be deemed to have been in full force and effect from
the date upon which Contractor  receives Option  Installment  Payment 1under the
Option Agreement.


3.       SCOPE OF THE WORK

3.1

The Contractor  shall furnish the Work in accordance  with the provisions of the
documents which constitute the ORION 2 Contract. In the performance of the Work,
the Contractor  shall supply all personnel,  materials and facilities  necessary
therefor.

3.2

ORION  shall  specify  the  final  beam  coverage  for one  (1) of the  transmit
(Tx)/receive(Rx)  coverages no later than NPD and for a second Tx/Rx coverage no
later than three (3) months after NPD.  ORION shall also,  no later than two (2)
months after NPD,  specify the final  transponder  beam  connectivities.  If all
finalized  beam  coverages  are  consistent  with  what is  achievable  with the
proposed antenna aperture sizes meeting the requirements of Part 3(A), price and
delivery  schedule  shall  remain  unchanged.   If  all  finalized   transponder
connectivities are

<PAGE>

consistent  with the  proposed  switching  and  filtering  hardware  meeting the
requirements of Part 3(A), price and delivery schedule shall remain unchanged.

3.3

Prior to NPD,  the  Contractor  shall  present a thermal  design  approach  with
supporting data and analysis (at the  communications  panel level),  which shall
demonstrate to the reasonable  satisfaction of ORION that the ORION 2 Spacecraft
will be designed in full compliance  with the  requirements of Section 8 of Part
3(A) regarding the thermal control subsystem.

3.4

Prior to NPD, the Contractor shall demonstrate that the ORION 2 Spacecraft has a
realistically  calculated  forty (40) kg dry mass  margin  adequate  to meet the
specified  contract  performance   requirements,   including  maneuver  lifetime
("Maneuver Lifetime") as set forth in Section 2.1 of Part 3(A).

3.5

The Launch Vehicle Agency is obligated under the Launch Agreement to deliver the
Launch  Vehicle with a contract  level of  performance  of seven  thousand,  six
hundred  (7,600)  pounds of payload  systems mass to a reference  geosynchronous
transfer  orbit.  The Parties  have  discussed  with the Launch  Vehicle  Agency
methods  of  enhancing  the   performance   of  the  Launch   Vehicle  by  using
_______________________________,  which will increase the delivery capability of
the Launch Vehicle by approximately  one hundred seventy (170) pounds of payload
systems  mass  to  a  reference   geosynchronous  transfer  orbit  (the  "Launch
Enhancements").  The ORION 2  Spacecraft  Maneuver  Lifetime  is based  upon the
availability of the Launch Enhancements.  Notwithstanding any other provision of
this ORION 2  Contract,  if the Launch  Vehicle  Agency does not make the Launch
Enhancements  available,  the Maneuver  Lifetime  shall be reduced to twelve and
seven tenths (12.7) years. In such case,  ORION and the Contractor shall use all
commercially  reasonable  efforts to cause the Maneuver Lifetime to be increased
to thirteen (13) years and the Parties agree to amend such number in the ORION 2
Contract to the extent of such increase.  If the Launch Vehicle Agency  provides
to the Contractor  other Launch Vehicle  improvements  in addition to the Launch
Enhancements,  then seventy percent (70%) of any increased  payload systems mass
achieved due to such Launch Vehicle  improvements shall be allocated to ORION to
increase the Maneuver  Lifetime  and thirty  percent  (30%) of the same shall be
allocated to the Contractor to increase the Contractor's mass margin.

4.       RESERVED

<PAGE>

5.       CONTRACT PRICE

5.1

For the full,  satisfactory and timely performance of the Work by the Contractor
in accordance  with the provisions of the ORION 2 Contract,  ORION shall pay the
Contractor  the  Contract  Price,  which  includes all taxes  applicable  at NPD
including personal property taxes, imposts and duties wherever the Work is being
carried out but excludes  interest due under Article  6.1.2.  The Contract Price
shall be paid in accordance with Article 6 below.  Except as otherwise expressly
provided  in the ORION 2  Contract,  the  Contract  Price is not  subject to any
escalation,  or to any  adjustment  or  revision  by reason of the  actual  cost
incurred by the Contractor in the performance of the ORION 2 Contract.

The Contract Price shall comprise the following elements,  including any related
training and documentation:
<TABLE>
<CAPTION>

      Item                                 Description                                      Amounts $
<S>                <C>                                                          <C>
------------------ ------------------------------------------------------------ ----------------------------------

       1.                   ORION 2 Spacecraft
       2.                   Launch Vehicle

       3.                   Launch Services

------------------ ------------------------------------------------------------ ----------------------------------

                            CONTRACT PRICE TOTAL                                       $200,830,000
------------------ ------------------------------------------------------------ ----------------------------------
</TABLE>

5.2     Variations in Contract Price

The Contract Price is subject to increase with the mutual consent of the Parties
if the Contractor does not receive Option Installment Payment 2 under the Option
Agreement on or prior to April 30, 1997.

<PAGE>

6.       PAYMENT

6.1.1    Payments

The ORION 2 Contract shall be paid as follows:

(a)      Progress  Payments.  ORION shall make  Progress  Payments to the Launch
         Vehicle Agency in accordance  with the Progress  Payment Plan specified
         in Part 1(B) as adjusted by Articles 5 and/or 27 hereof.  Each Progress
         Payment  shall  be  payable  by the  Contractor  submitting  to ORION a
         Request  for  Payment  accompanied  by a  certificate  in the  form  of
         Appendix I to Annex A hereto.

(b)      Milestone Payments.

         (i)      ORION  shall make  Milestone  Payments  to the  Contractor  in
                  accordance  with the Milestone  Payment Plan specified in Part
                  1(B)  as  adjusted  by  Articles  5  and/or  27  hereof.  Each
                  Milestone   Payment   shall  be  payable  by  the   Contractor
                  submitting  to ORION a Request  for Payment  accompanied  by a
                  certificate  in the  form of  Appendix  I to  Annex  A  hereto
                  together with such  supporting  data as the  Contractor  deems
                  necessary or appropriate. A Milestone shall not be regarded as
                  completed until all of the Work relevant to that Milestone has
                  been  completed and documented in accordance  with  applicable
                  specifications  and procedures and relevant  documentation and
                  training   required  under  the  ORION  2  Contract  for  such
                  Milestone  have  been  provided  to  ORION.  The  Contractor's
                  failure to achieve any  Milestone in the sequence set forth in
                  Part 1(B) shall not limit the Contractor's rights to claim and
                  be paid other Milestone  Payments when the relevant  Milestone
                  is achieved.

         (ii)     In no event shall the  cumulative  Milestone  Payments made to
                  the Contractor  for the ORION 2 Spacecraft or Launch  Services
                  at any point in time exceed the cumulative  amounts  specified
                  up to that point in time for Milestone  Payments for the ORION
                  2 Spacecraft  or Launch  Services as set forth in Part 1(B) as
                  it may be modified from time to time.

(c)      Credit for Payments.  All Option Installment  Payments  (Spacecraft and
         Launch  Vehicle)  that the  Contractor  or the  Launch  Vehicle  Agency
         receives from ORION under the Option Agreement shall be applied against
         Milestone Payments and Progress Payments,  respectively. The Contractor
         shall apply the  $1,000,000  paid to the Launch Vehicle Agency prior to
         the date of the Option Agreement against Progress Payments.

 (d)              Delivery to ORION.  Each Request for Payment and  accompanying
                  certificate  shall be telefaxed to ORION followed by airmailed
                  signed copies.

<PAGE>

6.1.2    Payments by ORION


ORION  shall pay each  Milestone  Payment  and  Progress  Payment in full within
thirty  (30)  Calendar  Days after the  delivery  of a Request  for  Payment (in
accordance  with the procedures set forth in Article 6.1.1) into the appropriate
bank accounts set forth in Article 6.1.3.

Where the thirty (30)  Calendar  Days  allowed for payment  after  delivery of a
Request  for Payment for a  Milestone  or Progress  Payment  causes a payment to
become due on a non-Business Day, such payment shall be due on the next Business
Day.

Contractor  shall be entitled to the  interest  earned on any  properly  due but
unpaid  amount for each  Calendar  Day after the date any  Progress or Milestone
Payment is due;  Contractor  shall be paid any  interest to which it is entitled
within ten (10)  Calendar Days of the  determination  that such interest is due;
and interest shall be calculated in accordance with Article 43.

Any  amounts  payable to the Launch  Vehicle  Agency  shall be paid  directly by
ORION.


<PAGE>



6.1.3    Procedures

Payment  shall be made in  accordance  with  Articles  6.1.1 and 6.1.2  into the
following bank accounts:

In the case of the Contractor:

         Account name:          MATRA MARCONI SPACE UK LIMITED

         Account number:

         Bank name:             Midland Bank Plc

         Sort code:

         Bank address:          16 King Street
                                Covent Garden
                                London
                                England


In the case of ORION:

         Account name:          IPSP Receipt Account

         Account number:

         Bank name:             The Chase Manhattan Bank, N.A.

         Sort code:

         Bank address:          4 Chase MetroTech Center
                                Brooklyn, New York 11245
                                United States of America



<PAGE>


In the case of the Launch Vehicle Agency:

         Account name:          Lockheed Martin Commercial Launch Services, Inc.

         Account number:

         Bank name:             Citibank N.A.

         ABA number:

         Bank address:          One Penn's Way
                                New Castle
                                Delaware 19720
                                United States of America

Any  payment  shall be deemed to have been made when  credit  for the  amount is
established in the above bank accounts.  Each Party shall notify the other Party
in writing within ten (10) Calendar Days of a change to the above bank accounts.

6.2      Dispute

In a written  notice (which may be a telefax  followed by an  originally  signed
copy)  received by the  Contractor no later than twenty (20) Business Days after
receipt by ORION of a Request for Payment in connection with a Milestone Payment
or other payment under Article 6.4, ORION may dispute  timely  completion of the
Milestone associated with such Milestone Payment or other payments. In the event
there is such a dispute,  ORION shall  nonetheless pay the Milestone  Payment in
accordance with Article 6.1.2 without waiving any of its rights. In the event it
is  determined,  either by  agreement  of the  Parties or by dispute  resolution
pursuant to Article 30 hereof,  that the  Milestone  with  respect to which such
notice shall have been timely  received was not  completed as of the date of the
Request  for  Payment,  ORION  shall be  entitled  to the  interest  at the rate
specified  in Article 43 earned on the  disputed  amount for each  Calendar  Day
after the date  such  Milestone  Payment  was paid  until the day the  Milestone
associated therewith is completed.  ORION shall be paid any interest to which it
is  entitled  within  ten (10)  Calendar  Days of the  determination  that  such
interest is due. Interest shall be calculated in accordance with Article 43.

6.3      Other Payments

Except as otherwise  expressly stated herein, all other payments by ORION to the
Contractor  shall be made in accordance with the procedures set forth in Article
6.1.3 within  thirty (30)  Calendar  Days after  receipt by ORION of a telefaxed
invoice. This invoice will be followed by an airmailed original and one copy.

<PAGE>

6.4      Setoff

In the event  that one Party has not paid the second  Party any amount  which is
due and  payable to the second  Party  under the ORION 2  Contract,  such second
Party shall have the right to set off such amount  against  payments  due to the
first Party, provided any amount in dispute pursuant to Article 6.2 shall not be
considered due and payable while the dispute is being resolved.

6.5

If (a) the  Contractor  fails to make the  Spacecraft  available  to the  Launch
Vehicle Agency in sufficient time for the Launch to occur on or prior to 31 July
1999 and such failure is due to any reason other than the  Contractor's  failure
to perform the Work in accordance  with Part 2(A) or other than Excusable  Delay
(but not Excusable Delay caused by ORION's failure to meet its  responsibilities
under the Orion 2 Contract,  including Article 18.5, its invalid exercise of its
rights under Article 13, or its exercise of its rights under Article 41), or (b)
the Launch  Agreement  is  terminated  pursuant to Article 41, then the Contract
Price shall be increased by any additional amount required by the Launch Vehicle
Agency to perform the Launch.


7.       ACCESS TO WORK

7.1

ORION and the Consultants  shall have reasonable  access (upon reasonable notice
to the Contractor from ORION,  but no less than  forty-eight  (48) hours) to any
premises  of  the  Contractor  or  Major   Subcontractors,   or  other  selected
Subcontractors on an "as needed" basis for short durations,  where Work is being
performed and may observe all of the Work, as well as any associated  facilities
and documentation, during regular business hours, or such other times as Work is
being  performed  under  the  ORION  2  Contract.  ORION  shall  justify  to the
Contractor why such access to other selected  Subcontractors  is needed but such
access shall not be unreasonably withheld.  ORION and the Consultants shall also
be entitled to attend all  meetings  and  reviews of the  Contractor  and of the
Contractor  with  Subcontractors  related to project  schedule  and  management,
engineering,  design,  manufacturing,  integration  and  testing  and  Launch as
reasonably  necessary  and  with  the  prior  approval  of the  Contractor.  The
Contractor shall provide ORION and the Consultants  reasonable assistance in the
performance of such  inspections.  The Parties agree that  non-escort  permanent
badges to agreed work areas where ORION  activities are being performed shall be
made  available  to all ORION  representatives  subject  to  adequate  notice of
personnel details being provided to the Contractor and security  clearance being
granted.

7.2

The Contractor  shall provide office space and facilities for the  accommodation
of up to six (6)  representatives  (plus a secretary)  employed by ORION (or its
Consultants) at the Contractor's plants and at environmental test facilities (if
located off site) and shall ensure that such space and  facilities  are provided
at the repeater Subcontractors' plant for up to three (3) representatives and

<PAGE>

at other selected Subcontractors' plants on a temporary basis to attend meetings
or witness  tests.  Provision  for up to four (4)  engineers  (plus a secretary)
shall be made at the Launch site facility.  At a minimum,  the Contractor  shall
provide desks,  chairs,  normal office supplies,  local telephone  service (long
distance  telephone  usage to be charged to ORION),  car parking  facilities and
access to meeting rooms, copying machines and facsimile equipment, and access to
and use of video conferencing facilities, if any, at the Contractor's plants (in
this  connection,  Contractor will take reasonable  measures to facilitate video
conferencing  between  Contractor's  plants and ORION's  premises,  provided the
video  conferencing  facilities of both Parties are  fundamentally  compatible).
ORION shall make ORION space segment capacity for video  conferencing  available
without charge.

7.3

The  Contractor  shall  require  that  any  Subcontract   contains  a  provision
substantially similar to this Article 7 to ensure ORION's rights under the ORION
2 Contract, except that ORION's access to the Launch Vehicle Agency's facilities
shall be controlled by the Launch Vehicle Agency.

7.4

ORION  and  its  Consultants  will  have  reasonable  access  to  any  drawings,
specifications,  standards or process  descriptions  which are  available to the
Contractor and relevant to the ORION 2 Spacecraft and Data and  Documentation to
be Delivered under the ORION 2 Contract. If an electronic mail system is used by
the Contractor to distribute  documentation,  access to ORION representatives is
to be approved by the Contractor.  The Contractor  will make  available,  to the
extent permitted under Article 24, copies of such documentation, at no charge to
ORION,  on the  reasonable  request  of ORION or ORION's  Consultant  where such
documentation   is   necessary   for   evaluation   of   designs,    performance
considerations,  assessment  of test  plans  and test  results  or for any other
purpose  connected  with  the  design,  qualification,  testing,  Launch,  Final
Acceptance  or operation of the ORION 2 Spacecraft  components.  The  Contractor
will  allow  ORION or its  Consultants  reasonable  access to all  drawings  and
document indices to facilitate their work in this respect.  The Contractor shall
establish  data links  between  its and ORION's  facilities  such that ORION has
remote electronic  access to those project related documents  identified in Part
2(B).  ORION shall make space segment  capacity  required for such remote access
available  without  charge.  The  Contractor  will  also  provide  ORION and its
Consultants  with  "real  time"  access  to  all  measured  data  taken  at  the
Contractor's  and  Subcontractors'  facilities on a  non-interference  basis. In
addition,  ORION shall have access to those project related  documents which are
of the type to which  ORION  had  access  during  the  implementation  of the F1
Contract.

7.5

In exercising its rights under the ORION 2 Contract,  ORION and the  Consultants
shall be subject to Governmental security requirements of the Contractor and its
Subcontractors and the Contractor shall use its best efforts to ensure that such
security  requirements do not unduly

<PAGE>

restrict  access  or  viewing  by ORION  subject  to  adequate  notice  of ORION
personnel  details  being  provided  to the  Contractor.  Access by ORION or any
Consultant  to  Subcontractor   facilities  shall  be  coordinated  through  the
Contractor.

7.6

In the event a meeting is  convened  at the  Contractor's  or a  Subcontractor's
plant,  the Contractor shall provide  reasonable  advance notice to ORION (e.g.,
one week for regularly scheduled  meetings) and make the necessary  arrangements
to facilitate the entry of ORION or its Consultants to the meeting place subject
to adequate notice of ORION personnel details being provided to the Contractor.

7.7

Subject to Article 27 hereof,  the  inspection,  examination,  agreement  to, or
approval,  waiver or deviation by ORION (other than in  accordance  with Article
27) with regard to any design,  drawing,  specification  or other  documentation
produced  under the ORION 2  Contract  shall not  relieve  the  Contractor  from
fulfilling its contractual  obligations or result in any liability being imposed
on ORION.

7.8

ORION shall have the right to participate in and make  recommendations,  but not
to control,  give  directions or assign  actions,  in all review meetings at the
system,  subsystem and critical  component levels, as well as test review board,
manufacturing review board and failure review board meetings.  The Parties agree
to work cooperatively in resolving issues that arise at the various review board
meetings    and,    where   ORION   has   an   objection   to   a    recommended
resolution/implementation,   the  Parties  agree  to  discuss  it  at  a  senior
management  level  (ORION's  Senior Vice  President,  Engineering  and Satellite
Operations and Contractor's  Director of Civil Communications  Satellites) prior
to implementation, but the final decision concerning implementation shall remain
with the Contractor who shall provide ORION with a written  explanation  for its
decision.

<PAGE>

8.       DELIVERABLE ITEMS AND DELIVERY DATES

8.1

"Delivery"  shall be deemed to have occurred for each  Deliverable Item upon its
Final  Acceptance  by ORION.  The Parties  acknowledge  that the Delivery of the
ORION 2 Spacecraft  is to be in orbit.  Subject to this Article and Articles 12,
18.5 and 27, the Parties  agree that the Delivery  Dates for  Deliverable  Items
under the ORION 2 Contract (depending on the final  configuration  selected) are
as follows:

<TABLE>
<CAPTION>
<S>      <C>                                               <C>
Item     Description                                       Delivery Date
1.       Delivery of ORION 2 Spacecraft in Orbit           28.25 months after NPD (provided a Launch
                                                           Slot is available in such timeframe)
2.       Data and Documentation                            As specified in Section 9.2.1 of Part
                                                           1(A), Part 2(A), Part 2(B) and Part 3(D)
3.       Mission Specific Hardware and Software            As specified in Section 10 of Part 2(A)

-------- ------------------------------------------------- -------------------------------------------
</TABLE>

The Parties will negotiate in good faith reasonable  adjustments in the Delivery
Date for the ORION 2  Spacecraft  upon the  addition,  elimination  or technical
complication or  simplification  of other ORION 2 Spacecraft items prior to NPD,
to the extent such additions,  eliminations  and/or  technical  complications or
simplifications are, singly or in the aggregate, material (i.e., more than minor
in effect on cost, schedule and/or performance).

If at NPD there is less than twenty-eight and three quarters (28.75) months from
NPD to the last possible day of the Launch Period,  then the Parties  shall,  in
good faith, negotiate a revised delivery schedule with the Launch Vehicle Agency
(or, if necessary,  with a different launch vehicle provider) such that there is
at least a two (2) month margin in the schedule  (which  schedule is  twenty-six
and three quarters (26.75) months to Launch) and the Parties shall enter into an
Amendment of the ORION 2 Contract  reflecting any resultant  changes in schedule
and Contract Price.

If (a) the  Contractor  fails to make the  Spacecraft  available  to the  Launch
Vehicle Agency in sufficient time for the Launch to occur on or prior to 31 July
1999 and such failure is due to Excusable  Delay or (b) the Launch  Agreement is
terminated  pursuant to Article 41, then the

<PAGE>

Delivery  schedule  shall be  amended  to  reflect  an  in-orbit  Delivery  Date
occurring six (6) weeks  (forty-two  (42) Calendar Days) after the actual launch
date of the Orion 2 Spacecraft.

For the avoidance of doubt, the Parties recognize and agree that in the event of
a Constructive Total Loss of the ORION 2 Spacecraft, the Delivery Dates provided
in Article 8 hereof shall,  in respect of the ORION 2 Spacecraft and its related
Data and  Documentation  not  already  delivered,  be  extinguished  and have no
further effect.

8.2

The Contractor  understands  and agrees that, with respect to the Delivery Dates
for all  Deliverable  Items,  whether  those  items  are set out in the  ORION 2
Contract or in  subsequent  Amendments  to the ORION 2 Contract,  time is of the
essence under the ORION 2 Contract.  Nothing in the foregoing  sentence shall in
any way modify either the specific remedies for default  specified  elsewhere in
the ORION 2 Contract,  including but not limited to Articles 11.2 and 21, or the
specific dispute resolution requirements specified in the ORION 2 Contract.

8.3

The Contractor,  if requested to do so by ORION,  agrees to construct and launch
an additional satellite, the Replacement Satellite, in accordance with the terms
set forth in Article 19.

8.4

On time schedules to be mutually agreed to in writing, ORION will make available
to the Contractor fully operational  in-orbit test equipment  equivalent to that
used on the F1 Spacecraft as specified in Part 2(A) and facilities (Mt.  Jackson
and Fucino) for use in meeting the  requirements  of Part 3(D).  Contractor will
make  available  (but not deliver)  additional  test  equipment,  as  reasonably
necessary,  for  in-orbit  testing  of the  American  coverage  beam in order to
satisfy the requirements of Part 3(D).


9.       FINAL ACCEPTANCE

9.1      Data and Documentation

9.1.1

 "Final  Acceptance" (and therefore,  Delivery) of Data and Documentation  shall
occur only when:

(i)      the Contractor has fulfilled the ORION 2 Contract  requirements for the
         Data and Documentation; and

(ii)     the Data and Documentation has been delivered at the place specified in
         the ORION 2 Contract in a condition fully  conforming to the provisions
         of the ORION 2 Contract.

<PAGE>

Data and  Documentation,  other  than  Data  and  Documentation  which  requires
approval and acceptance by ORION in accordance with Article 9.1.2 hereof,  shall
be deemed to have achieved Final Acceptance  unless rejected by ORION in writing
within ten (10) Business Days after  receipt of said Data and  Documentation  by
ORION.

If Data and  Documentation  not  requiring  approval and  acceptance by ORION is
unacceptable,  ORION shall,  within the said ten (10) Business Days,  notify the
Contractor  in  writing  in  which  respects  the  Data  and   Documentation  is
unacceptable.  Any  Data and  Documentation  that is  considered  by ORION to be
unacceptable with respect to which ORION has so notified the Contractor as being
unacceptable,  shall be  deemed  under  the  ORION 2  Contract  not to have been
Delivered unless and until the Defects that resulted in such rejection have been
remedied or  demonstrated  not to exist pursuant to  verification  procedures in
accordance  with the ORION 2 Contract and the Data and  Documentation  is at the
specified  delivery  location in accordance with the ORION 2 Contract  whereupon
ORION shall accept the Data and  Documentation  in writing and Final  Acceptance
shall occur.

9.1.2

Final Acceptance of any Data and  Documentation  requiring  approval by ORION in
accordance  with Part 2(B) shall occur when such  approval  has been  granted by
ORION in writing.  ORION shall  respond under this Article 9.1.2 within ten (10)
Business Days after  receipt of such Data and  Documentation  by ORION;  failing
such response,  the Parties shall be deemed forthwith to be in dispute and their
rights shall be  determined  in  accordance  with the  provisions  of Article 30
hereof.

9.1.3

The provisions of this Article 9.1 shall not apply to the Final  Acceptance of a
Launched  ORION 2 Spacecraft  or to the In-Orbit  Acceptance  Report.  The Final
Acceptance  of the Launched  ORION 2 Spacecraft  and of the In-Orbit  Acceptance
Report essential thereto shall be governed by Article 9.2.

9.2      Launched ORION 2 Spacecraft

9.2.1

Upon arrival at its designated orbital location, the Contractor will perform the
tests and analyses as set forth in Part 3(D) for the Launched ORION 2 Spacecraft
to determine the Aggregate  Predicted  Transponder  Life of the Launched ORION 2
Spacecraft.

The results of such tests and analyses will be furnished to ORION in an In-Orbit
Acceptance Report prepared by the Contractor for the Launched ORION 2 Spacecraft
in accordance with Part 2(A), Part 2(B) and Part 3(D). Unless the Launched ORION
2 Spacecraft is a Constructive  Total Loss,  Delivery and Final  Acceptance will
take  place  upon  receipt by ORION of the  In-Orbit  Acceptance  Report in full
compliance with Part 2(A), Part 2(B) and Part 3(D).

<PAGE>

(a)      In respect of the  Launched  ORION 2  Spacecraft  (if it arrives at its
         designated orbital location):

         (i)      Within one hundred and eighty  (180) days after  Launch of the
                  ORION 2 Spacecraft,  the Contractor shall furnish to ORION the
                  In-Orbit  Acceptance Report in full compliance with Part 2(A),
                  Part 2(B) and Part 3(D) in  respect  of the  Launched  ORION 2
                  Spacecraft.

         (ii)     Unless ORION shall respond to such In-Orbit  Acceptance Report
                  within thirty (30) Calendar  Days after  receipt  thereof,  or
                  such other  period of time  acceptable  to both  Parties,  the
                  Report shall be deemed acceptable.

         (iii)    If ORION's  response  under Article  9.2.2(a)(ii)  contains an
                  objection  to such  In-Orbit  Acceptance  Report,  the Parties
                  shall be deemed  forthwith  to be in dispute and their  rights
                  shall be  determined  in  accordance  with the  provisions  of
                  Article 30 hereof.

         (iv)     The existence of a dispute  shall not affect Final  Acceptance
                  set forth above;  unless,  under the procedures in Article 30,
                  it is ultimately  determined that the Launched Spacecraft is a
                  Constructive  Total Loss.  If the Launched  ORION 2 Spacecraft
                  fails to arrive at its designated  orbital location in time to
                  complete  in-orbit  testing  and  provision  of  the  In-Orbit
                  Acceptance Report within one hundred and eighty (180) Calendar
                  Days after  Launch,  the ORION 2 Spacecraft  shall be deemed a
                  Constructive Total Loss.

(b)      Without limiting any other Contractor  obligations under this Article 9
         and in order to comply with insurance requirements,  within thirty (30)
         Calendar Days following  receipt of information that one or more of the
         following  circumstances  exist,  the Contractor  shall provide written
         notice of loss to ORION and to all insurers under  applicable  policies
         (provided that the Contractor  shall have no obligation to provide such
         notice to the Launch  Insurance  insurer unless ORION  identifies  such
         insurer to the Contractor) specifying in such notice:

         (i)      The basis  for a Partial  Loss or a  Constructive  Total  Loss
                  under Articles 9.2.2 or 9.2.3, respectively; or

         (ii)     within any of the provisions of Article 9.2.3; or

         (iii)    The  Parties  are  deemed  to be in  dispute  under any of the
                  provisions of Article 9.2.1(a) or Article 9.2.3.

         Such  notice of loss shall  comply  with the  provisions  of Article 34
         hereof,  and the foregoing  specified  time for the provision of notice
         may be shortened in compliance with the respective requirements of such
         insurers.

<PAGE>

9.2.2

         A  Partial  Loss  shall  occur  in  respect  of the  Launched  ORION  2
         Spacecraft, if the In-Orbit Acceptance Report accurately confirms

         (a)      that   the   Aggregate    Predicted    Transponder   Life   is
                  ________________________ ____________ years or less but (i) is
                  _______________________   years   or   higher,   and  (ii)  at
                  least_________________  downlink  Transponders  with ______ at
                  the _________ GHz frequency and _________ at either of the two
                  frequency  ranges of _________ or _________  GHz frequency are
                  Serviceable  Transponders,  and (iii) at least_______ American
                  downlink Transponders are Serviceable  Transponders,  then the
                  ORION  2  Spacecraft   will  be  deemed  to  have   sufficient
                  revenue-earning  capacity to form an economically  viable part
                  of the space  segment of the  ORIONSAT  system.  In such case,
                  ORION must accept the ORION 2 Spacecraft; and/or;

          (b)     that the ORION 2  Spacecraft  has fewer  than_______  American
                  downlink Transponders which are Serviceable Transponders.

9.2.3

Notwithstanding  any  other  provisions  of  this  Article  9,  if the  ORION  2
Spacecraft is a Constructive  Total Loss pursuant to item B of the definition of
such term,  the  Contractor  shall furnish ORION with written  notice of loss in
respect of the Launched  ORION 2  Spacecraft.  Such notice shall be furnished to
ORION promptly upon the Contractor's concluding from information available to it
that such Constructive  Total Loss has occurred.  In no circumstance  shall such
notice of loss be  furnished  to ORION later than one  hundred and eighty  (180)
Calendar Days after Launch of the ORION 2 Spacecraft.

If the  Contractor  fails to provide ORION with the notice of loss in respect of
the Launched  ORION 2 Spacecraft  specified  under this Article 9.2.3 within the
respective times specified herein,  or if ORION rejects the Contractor's  notice
of loss, the Parties shall be deemed forthwith to be in dispute and their rights
shall be determined in accordance with the provisions of Article 30 hereof.

In all  circumstances  Final  Acceptance  shall be deemed to have  occurred upon
Constructive  Total Loss. In the event of Constructive Total Loss the provisions
of Article 15 shall not apply.

9.2.4

In the  event  of a  dispute  as to the  performance  of the  Launched  ORION  2
Spacecraft,  the Parties agree to have an independent determination of the ORION
2 Spacecraft  technical  status performed by a mutually  acceptable  technically
qualified third party.  The costs incurred in retaining the third party shall be
shared equally  between the Contractor and ORION.  The Parties agree that before
reference to such  mutually-acceptable  technically-qualified  third  party,  an
informal  forum  between   Contractor's  Senior  Executive  and  ORION's  Senior
Executive shall take

<PAGE>

place to attempt a resolution of said dispute. In the event that such efforts to
resolve the dispute have been  unsuccessful,  the Parties  shall  proceed  under
Article 30 hereof. The foregoing independent determination may be used by either
Party in any arbitration under Article 30 hereof, but such  determination  shall
not be binding upon the arbitrators.

9.2.5

In addition,  the following provisions shall be applicable to the implementation
of this Article 9.2:

(a)      Warranty

         The Parties  hereto  warrant and represent  that they will not withhold
         from each other any of the material  information they have or will have
         concerning anomalies,  failures and deviations from the requirements of
         the ORION 2 Contract,  from NPD through Intentional Ignition in respect
         of the ORION 2 Spacecraft.

(b)      Access to Technical Information

         Upon  request of a Party,  the other  Party will  respond or permit the
         first Party to respond to any  insurers in relation to all specific and
         reasonable questions relating to design, test, quality control,  launch
         and orbital information.  In addition, in the event a Party notifies or
         is notified by the other Party of an  occurrence  which may be expected
         to result in a Partial  Loss or  Constructive  Total  Loss  under  this
         Article  9.2,  such other  Party will permit and assist the first Party
         to:

         (i)      conduct  review  sessions  with  a  competent   representative
                  selected  by the  insurers  to  discuss  any  continued  issue
                  relating to such occurrence, including information conveyed to
                  either Party; and

         (ii)     use its best  efforts  to secure the  insurers'  access to all
                  information  used in or resulting  from any  investigation  or
                  review of the cause or effects of such occurrence; and

         (iii)    make  available  for  inspection  and copying all  information
                  necessary  to  establish  the  scope  of such  occurrence  and
                  verifying  the  accounting  methods  employed  to compute  any
                  refund payment obligated thereby.

9.2.6

If either  Party at any time after  Launch but prior to Final  Acceptance  has a
reasonable  basis for  concluding  that Final  Acceptance  will not be  achieved
within the time limits  provided for in this Article 9 and the other Party fails
to agree with that conclusion within thirty (30) Calendar Days of notice, either
Party shall have the right to proceed under Article 30.

<PAGE>

9.2.7

Notwithstanding  that title to each Deliverable Item remains with the Contractor
until Final Acceptance,  the Contractor shall have no liability under this ORION
2 Contract  for a Partial  Loss or a  Constructive  Total  Loss;  however,  this
Article  9.2.7 shall have no effect on the rights of the Parties  under  Article
11.2 and 15.


10.      TRANSFER OF TITLE AND ASSUMPTION OF RISK

10.1

Transfer of title, free and clear of all liens and encumbrances of any kind, and
risk of loss or damage to each  Deliverable  Item  shall  pass to ORION at Final
Acceptance,  provided, however, risk of loss or damage to the ORION 2 Spacecraft
shall pass to ORION at Intentional Ignition.

10.2

In the event of a Constructive Total Loss, title free and clear of all liens and
encumbrances  of any  kind  shall  pass to  ORION.  In such  event,  at  ORION's
direction,  Contractor  shall  surrender  the  ORION 2  Spacecraft  to  insurers
obligated to cover such loss.


11.      ORION 2 SPACECRAFT  DELIVERY  INCENTIVE  AND LATE  DELIVERY  LIQUIDATED
         DAMAGES

11.1  Delivery Incentive

ORION  acknowledges  and  agrees  that the  Delivery  of the ORION 2  Spacecraft
earlier than the Delivery  Dates  determined  under Article 8 may be the sole or
partial cause of financial  gain being  sustained by ORION.  In the event of the
Delivery of the ORION 2 Spacecraft earlier than the applicable  Delivery Date as
it may be adjusted  pursuant  to  Articles  8, 12, 18.5 and/or 27 hereof,  ORION
agrees  to pay  the  Contractor  within  thirty  (30)  Calendar  Days  of  Final
Acceptance as an incentive the sum of Twenty-Five Thousand Dollars ($25,000) per
Calendar Day for each day that Delivery of the ORION 2 Spacecraft occurs earlier
than the Delivery Date for the ORION 2 Spacecraft,  provided, however, that such
payments  may be  delayed  until such time as  payment  is  permitted  under any
Financing Agreement.

11.2  Late Delivery Liquidated Damages

The  Contractor  acknowledges  and  agrees  that  failure  to meet  the  ORION 2
Spacecraft  Delivery  Date  may be the  sole or  partial  cause  of  substantial
financial loss or damage being  sustained by ORION,  due to the cost of carrying
any ORION external financing,  cost of alternative means of providing service to
customers and loss of  continuity of service.  In the event that the Delivery of
the ORION 2 Spacecraft is later than the  applicable  Delivery Date as set forth
in Article  8.1 (and  notwithstanding  Article  9.2) and where such delay is not
subject to an extension of time pursuant

<PAGE>

to Articles 8, 12, 18.5 and/or Article 27 hereof,  the Contractor  agrees to pay
to ORION,  as  liquidated  damages  and not as a penalty for each  Calendar  Day
during the period of such delay from and including the ___________  Calendar Day
of lateness up to and  including  the____  ____________________  Calendar Day of
lateness  (the  "Liquidated  Damages  Period")  as  follows:   (i)  the  sum  of
_____________________________________________  for  each  Calendar  Day in  such
Liquidated Damages Period during which the Contractor has not achieved Milestone
15 (lateness to run from ___________ months and ____________ after NPD) and (ii)
the sum of _________________________ per day for each other Calendar Day in such
Liquidated Damages Period. The total amount of liquidated damages payable by the
Contractor  shall not exceed the sum of Eleven  Million,  Eight  Hundred  Twelve
Thousand, Five Hundred Dollars ($11,812,500).

Liquidated damages may not be levied on the ORION 2 Spacecraft after termination
in  accordance  with this ORION 2 Contract or after the ORION 2  Spacecraft  has
been declared a Constructive  Total Loss in accordance  with Article 9 but ORION
shall have the right to collect those  liquidated  damages that have  previously
accrued.

11.3

ORION  shall have the right to offset any  liquidated  damages  owed to it under
this Article against any amounts due the Contractor under the ORION 2 Contract.

11.4

Except as provided under the  provisions of Article 21, the  liquidated  damages
provided in this Article shall be ORION's  exclusive remedy for late Delivery of
the ORION 2 Spacecraft and shall be in lieu of all other damages under the ORION
2 Contract,  or at law. This provision in no way limits  ORION's  remedies under
Article 22 for insolvency or bankruptcy of the Contractor.


12.      EXTENSIONS FOR EXCUSABLE DELAYS

12.1

The Contractor shall be entitled to extensions of time beyond the Delivery Dates
determined under Article 8 only in accordance with the following provisions, and
the  provisions of Articles 8, 18.5 and 27 and any other  specific  provision of
the ORION 2 Contract  providing for extensions of time beyond the Delivery Dates
set forth in Article 8.1.

<PAGE>

12.2

12.2.1 RESERVED

12.2.2

Any delay in the  performance of the Work caused by an event which is beyond the
reasonable  control of the  Contractor or its  Subcontractors,  such as, but not
limited to, any civil commotion,  invasion,  hostilities,  sabotage, earthquake,
fire, flood,  explosion,  governmental  regulations or controls,  labor strikes,
work  stoppages  or slow  downs (but  excluding  any such  labor  strikes,  work
stoppages or slow downs occurring at the facilities of the Contractor  and/or at
any or all of the  facilities  of the Launch  Vehicle  Agency,  NEC, or COMDEV),
freight  embargoes,  or acts of God, and which delay could not have been avoided
by  the  Contractor  or a  Subcontractor  through  the  exercise  of  reasonable
foresight or reasonable  precautions,  and which cannot be  circumvented  by the
Contractor or a Subcontractor through use of its reasonable efforts to establish
work-around  plans or other  means,  or delay caused by failure by ORION to meet
its responsibilities  (including an invalid exercise of its rights under Article
13) under the ORION 2 Contract or exercise by ORION of its rights under Articles
18.5 or 41 shall  constitute  "Excusable  Delay" if notice  thereof  is given to
ORION, in writing, within ten (10) Business Days after the Contractor shall have
first learned of the  occurrence  of such an event.  Such notice shall include a
detailed  description  of the portion of the Work known to be affected by such a
delay, as well as details of any work-around  plans,  alternate sources or other
means the  Contractor  expects to utilize to minimize a delay in  performance of
the  Work.  Notice  must  also be  given  to ORION  in  writing  when the  event
constituting an Excusable Delay appears to have ended.  Without prejudice to the
foregoing,  any  postponement  of the Launch of the ORION 2 Spacecraft  which is
announced by the Launch Vehicle Agency more than one (1) calendar month prior to
the Launch  Date  shall  constitute  an event of  "Excusable  Delay"  within the
meaning of this  Article  12,  provided  that the maximum  total  amount of such
Excusable Delay shall be twelve (12) months.  Notwithstanding the foregoing, any
postponement of the ORION 2 Spacecraft  scheduled  Delivery Date due to a launch
failure  within  sixty (60)  Calendar  Days prior to the Launch Date or a Launch
postponement due to bad weather or a launch vehicle accident occurring proximate
to the Launch Date shall  constitute  an event of  "Excusable  Delay" within the
meaning of this  Article 12 if notice  thereof is given to ORION,  in writing as
soon as practicable but in no event later than seven (7) Calendar Days after the
Contractor  shall  have  first  learned  of the  occurrence  of such  an  event,
provided,  however,  that the maximum total amount of such Excusable Delay shall
be twelve (12) months.

The  Contractor  shall be entitled to such  extensions of time as are reasonable
for the Excusable Delay. In the event ORION disputes the Excusable Delay,  ORION
must inform the  Contractor  in writing  within ten (10)  Business Days from the
date of receipt of written notice of the event  constituting  an Excusable Delay
and, if the Parties have not resolved the dispute  within the ten (10)  Business
Days of the Contractor's receipt of written notice from ORION, the dispute shall
be resolved pursuant to Article 30. Without  prejudice to the foregoing,  if any
Excusable  Delays other than Excusable  Delays resulting from ORION's failure to
meet its  responsibilities  (including  an invalid  exercise of its rights under
Article 13) under the Orion 2  Contract,  or its

<PAGE>

exercise of its rights under Article 41 or resulting  from Article  18.5,  exist
for a cumulative  period of time exceeding  eighteen (18) calendar  months,  the
Contractor  agrees to pay to ORION, as liquidated  damages and not as a penalty,
such reasonable  interest costs as ORION actually incurs in relation to any debt
financing of the ORION 2 Spacecraft  directly as a consequence of such Excusable
Delay. The  Contractor's  liability to pay such interest costs to ORION shall be
calculated  as, and shall be  limited  to,  the  amount of such  interest  costs
incurred by ORION  between (i) the first (1st)  Calendar  Day of the  nineteenth
(19th)  calendar month of such Excusable Delay and (ii) the last Calendar Day of
such  Excusable  Delay  or the  date of  termination  of the  ORION 2  Contract,
whichever is the earlier. ORION shall be required to provide reasonable evidence
to the Contractor of it having reasonably incurred such interest costs.

12.3

Any  extension of time granted  under this Article  shall be  formalized  by the
execution of an Amendment to the ORION 2 Contract wherein  adjustments  shall be
recorded with respect to the new Delivery  Dates for the  Deliverable  Items set
forth in Article 8, the dates set forth in Article 41 and the delivery dates set
forth in Article  19.1 and  modifications  made as  appropriate  to the  Advance
Funding  schedule  of  payments  set  forth in  Article  19.2 and the Part  1(B)
Milestone  Payment  Schedule,  and Progress  Payment  Schedule,  and Termination
Liability Amounts Schedule. The Contractor acknowledges and understands that the
occurrence of an Excusable Delay shall not entitle the Contractor to an increase
in the Contract Price unless the Excusable  Delay is caused  directly by ORION's
failure to meet its  responsibilities  under the ORION 2 Contract or by exercise
by ORION of its rights under Article 41 or resulting from Article 18.5, in which
event there shall be an equitable adjustment to the Contract Price.


13.      CORRECTION OF DEFECTS

13.1

ORION shall notify the  Contractor in writing when it believes any Defect exists
in the ORION 2  Spacecraft,  the  services  or the Data and  Documentation.  The
Contractor  may from time to time advise ORION in writing that it disagrees with
ORION or ORION's  Consultant as to the existence or nature of a Defect.  In such
event,  the  Parties  shall  negotiate  in good faith to  determine  what Defect
exists, if any, and any action required to remedy such Defect.

13.2

Without  limiting the obligations of the Contractor or the rights of ORION under
the  provisions  of the  ORION  2  Contract,  prior  to  Launch  of the  ORION 2
Spacecraft  the  Contractor  shall,  at its  expense,  use its best  efforts  to
promptly  correct any Defect related to the ORION 2 Spacecraft which it or ORION
discovers during the course of the Work, and notwithstanding  that a payment may
have been made in respect thereof, and regardless of prior reviews, inspections,
approvals  or  acceptances.  This  provision  is  subject  to the  right  of the
Contractor to have any items  containing

<PAGE>

a Defect returned at the Contractor's  expense to the Contractor's  facility for
the  Contractor  to verify the  non-conformance  and to correct the Defect.  All
transportation costs such as packaging, shipping and insurance, shall be paid by
the Contractor,  except that if it is reasonably  determined after investigation
that ORION or its Consultants  directly caused the Defects in question,  or that
the item is in conformance  with  applicable  specifications  and  requirements,
ORION will reimburse the Contractor for the  above-described  costs and will pay
all costs associated with the shipment to and from the Contractor's facility. If
the Contractor  fails to so correct such Defects within a reasonable  time after
notification  from ORION and after the Parties have  followed the  provisions of
Article 13.1 above (including agreement on the existence of such Defect),  ORION
may,  by  separate  contract  or  otherwise,  correct or  replace  such items or
services, and, unless it is reasonably determined after investigation that ORION
directly  caused  the  Defect in  question,  or that the item or  service  is in
conformance with applicable specifications or requirements, the Contractor shall
pay to ORION the reasonable cost of such  correction or replacement.  The amount
payable by the Contractor  shall be verified at the  Contractor's  request by an
internationally recognized firm of accountants appointed by the Contractor, such
appointment  to be approved by ORION and such  approval  not to be  unreasonably
withheld  or  delayed.  The  costs  of such  verification  shall  be paid by the
Contractor  and shall be without  prejudice to the right of either Party to seek
arbitration  under  Article  30. The report of such  accountants  may be used by
either  Party in any  arbitration  proceeding  but shall not be binding upon the
arbitrators.  In such event, the Contractor,  if required by ORION, but pursuant
to the  arrangement  set forth in this Article 13.2,  shall  promptly repay such
portion of the Contract Price as is equitable in the  circumstances.  The amount
paid to ORION to correct  such Defect may be offset  against any payments due to
the Contractor by ORION under this ORION 2 Contract.

13.3

Without  limiting the obligations of the Contractor or the rights of ORION under
other  provisions  of the  ORION 2  Contract,  if the  data  available  from the
Launched ORION 2 Spacecraft or from other spacecraft of a similar class which is
being  built by the  Contractor  shows  that the ORION 2  Spacecraft  contains a
Defect,  the  Contractor  shall inform ORION of such Defect and shall,  promptly
upon the request of ORION, use its best efforts to take  appropriate  corrective
measures with respect to the Replacement  Satellite,  if any, which has not been
Launched so as to satisfactorily  eliminate from such Replacement Satellite such
Defects. The Contractor shall fulfill the foregoing  obligations at its own cost
and expense,  including all costs arising from charges for shipping,  insurance,
taxes  and  other  matters  associated  with  the  corrective  measures.  If the
Contractor  fails  to  take  such  corrective  measures  with  respect  to  such
Replacement  Satellite  which has not been Launched,  within a reasonable  time,
ORION may have any or all such Defects  corrected  through other means, in which
event the Contractor  shall make such  Replacement  Satellite which has not been
Launched and its component  parts  thereof  available as required and shall pay,
subject to the verification procedures set forth in Article 13.2, all reasonable
costs of such corrective measures.

<PAGE>

In the event ORION makes such  corrections,  ORION may offset the amount paid to
have the Defects  corrected  against any  payments due the  Contractor  by ORION
under this ORION 2 Contract.

13.4

Without  limiting the obligations of the Contractor or the rights of ORION under
other  provisions of the ORION 2 Contract,  if the data  available  from another
spacecraft  of a  similar  class  that is being  built or has been  launched  by
Contractor shows that the ORION 2 Spacecraft  contains a Defect,  the Contractor
shall inform ORION of such Defect and shall, promptly upon the request of ORION,
use its best efforts  prior to Launch to take  appropriate  corrective  measures
with respect to the ORION 2 Spacecraft so as to  satisfactorily  eliminate  such
Defect from the ORION 2 Spacecraft.  The Contractor  shall fulfill the foregoing
obligations  at its own cost and  expense,  including  all  costs  arising  from
charges for shipping,  insurance,  taxes, and other matters  associated with the
corrective  measures.  If the Contractor fails to take such corrective  measures
with respect to the ORION 2 Spacecraft  within a reasonable  time after  request
from ORION,  ORION may by separate contract or otherwise,  have all such Defects
corrected and the Contractor shall pay,  subject to the verification  procedures
set forth in Article 13.2, all reasonable costs of such corrective measures.

In the event ORION makes such  corrections,  ORION may offset the amount paid to
have the Defects  corrected  against any payments due the Contractor  from ORION
under this ORION 2 Contract.

13.5

Subject to Article 12, the Contractor  acknowledges and agrees that it shall not
be entitled to payment for any additional costs incurred as a consequence of any
Defect.  In addition to ORION's  rights under  Article 21, if  correction of any
Defect  causes a delay in the  Delivery of the ORION 2  Spacecraft,  despite the
best efforts of the Contractor to correct the Defect,  the provisions of Article
11.2 and Article 12, relating to liquidated damages, shall apply, as appropriate
in addition to the remedies in this Article 13.

13.6

After notification of a Defect to the Contractor,  the Parties may jointly elect
in writing,  pursuant to Article 27, not to require correction or replacement of
such  items or  services  or to waive  the  Defects  noted  for the  Replacement
Satellite, if any, which has not been Launched. In such event the Contractor, if
required by ORION but pursuant to the  arrangements  set forth in Article  13.2,
shall  repay  such  portion  of  the  Contract  Price  as is  equitable  in  the
circumstances.

13.7

Subject to the  provisions  of any  applicable  law,  the  Contractor  agrees to
enforce any  manufacturer's  warranty given to it in connection with any Work to
be provided under the ORION 2 Contract and the Contractor  shall assign to ORION
warranty protection or pledge to

<PAGE>

ORION any  proceeds  therefrom  in respect  of that Work and other  items as are
given to the Contractor by the manufacturers or service providers.

13.8

Notwithstanding  any other  provision  of the ORION 2 Contract,  the  Contractor
shall advise ORION  immediately  by telephone  and confirm in writing any event,
circumstance or development which materially  threatens the quality of the ORION
2  Spacecraft  or  component  part  thereof as well as any  services or Data and
Documentation to be provided hereunder or the Delivery Dates established.

13.9

For any Defect  which does not  adversely  affect the form,  fit,  useful  life,
reliability or function (i.e.,  operational  performance) of a Transponder,  the
Contractor  and ORION agree to  negotiate a  reasonable  resolution,  subject to
approval by any Financing  Entity,  which may not require  repair of the Defect,
but which may  require  reasonable  compensation  to ORION.  If the  Parties are
unable to reach an agreed  resolution  within  five (5)  Business  Days of ORION
receiving  notice  of the  Defect  from  the  Contractor  ("Notice  Date"),  the
Contractor  shall have the right to elevate  the  negotiations  to  Contractor's
Senior  Executive and to ORION's Senior  Executive.  Any  resolution  reached by
ORION's Senior  Executive and  Contractor's  Senior  Executive may be subject to
approval by the Financing Entities. In the event the Parties are unable to reach
an agreed  resolution or achieve approval of any Financing Entity within fifteen
(15)  Business  Days of the  Notice  Date,  ORION  shall  thereafter  be able to
exercise all of its rights under this Article 13.


14.      DISCLAIMER OF WARRANTIES, LIMITATION OF LIABILITY AND
         INTER-PARTY WAIVER OF LIABILITY

14.1

EXCEPT AS SPECIFICALLY PROVIDED IN THE ORION 2 CONTRACT, THE CONTRACTOR MAKES NO
WARRANTIES,  EXPRESS OR  IMPLIED,  WITH  RESPECT TO THE ORION 2 CONTRACT  OR THE
PERFORMANCE  OF THE  CONTRACTOR  HEREUNDER OR THE  EQUIPMENT  OR WORK  FURNISHED
HEREUNDER,  WHETHER  ARISING  UNDER LAW OR AT EQUITY.  ANY  IMPLIED  WARRANTY OF
MERCHANTABILITY OR FITNESS IS EXCLUDED, THE EXPRESS WARRANTIES OF THE CONTRACTOR
CONTAINED IN THE ORION 2 CONTRACT BEING EXCLUSIVE.

14.2

EXCEPT AS OTHERWISE  PROVIDED IN THE ORION 2 CONTRACT,  IN NO EVENT SHALL EITHER
PARTY OR A PARTY'S AFFILIATES AND ITS AND THEIR SUBCONTRACTORS AND ITS AND THEIR
OFFICERS,  EMPLOYEES AND AGENTS, BE LIABLE,  IN CONTRACT,  IN TORT, OR OTHERWISE
FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY NATURE ARISING AT ANY TIME OR
FROM ANY CAUSE WHATSOEVER,  INCLUDING SPECIFICALLY BUT WITHOUT LIMITATION,  LOSS
OF PROFITS OR REVENUE,  LOSS OF FULL OR PARTIAL USE OF ANY EQUIPMENT,  LOSSES BY
REASON OF OPERATION OF ANY

<PAGE>

DELIVERABLE ITEM AT LESS THAN CAPACITY,  DELAYS,  COST OF REPLACEMENTS,  COST OF
CAPITAL, LOSS OF GOODWILL, CLAIMS OF CUSTOMERS, OR OTHER SUCH DAMAGES.

14.3

THE TOTAL  LIABILITY  OF EITHER PARTY TO THE OTHER WITH RESPECT TO ALL CLAIMS OF
ANY KIND, INCLUDING WITHOUT LIMITATION  LIQUIDATED DAMAGES,  WHETHER AS A RESULT
OF BREACH OF CONTRACT,  WARRANTY,  STRICT  LIABILITY OR  OTHERWISE,  AND WHETHER
ARISING BEFORE OR AFTER DELIVERY OF ANY DELIVERABLE  ITEM, FOR ANY LOSS FROM THE
ORION 2 CONTRACT, OR FROM THE PERFORMANCE OR BREACH THEREOF, SHALL BE LIMITED TO
THE  REMEDIES SET FORTH IN THE ORION 2 CONTRACT AND SHALL IN NO EVENT EXCEED THE
CONTRACT PRICE TOTAL.

14.4

14.4.1

All  operations at the launch site pursuant to this Agreement will be subject to
a  no-fault,   no-subrogation   inter-party  waiver  of  liability  under  terms
substantially similar to those set forth in Article 15.2 of the Launch Agreement
attached  hereto  as Annex B.  Prior to  commencement  of Launch  Services,  the
Contractor  will provide ORION with evidence  reasonably  satisfactory  to ORION
that each other entity ("Other  Users")  concurrently  conducting  operations at
such  launch  site,  including  the Launch  Vehicle  Agency,  has agreed to such
inter-party waiver of liability.

14.4.2

If either Party contracts or subcontracts with a third party to provide services
that  necessitate  the  Contractor's or  Subcontractor's  presence on the launch
site,  then such  Party  will also  ensure  that such  third  party  agrees to a
no-fault,  no-subrogation  inter-party  waiver of liability  and  indemnity  for
damages it sustains,  identical to the Parties'  respective  undertakings  under
this Article 14.4 and Annex B.

14.4.3

In the event that either ORION or the  Contractor  fails to obtain the aforesaid
inter-party waiver of liability and indemnity from their respective  contractors
or subcontractors, then such Party shall indemnify and hold the other Party, the
Other  Users  of  launch   services  and  their   respective   contractors   and
subcontractors  harmless from claims brought by such Party's subcontractors with
respect to matters that  otherwise  would have been  covered by the  inter-party
waiver of liability.

14.4.4

Notwithstanding  any other term or  provision  contained in the  Contract,  this
Article  14.4  shall  survive  the  completion  or  termination  of this ORION 2
Contract in any manner whatsoever.

<PAGE>

14.4.5

The Parties will take such further  actions as may be required to implement  the
provisions of this Article 14.4,  including the execution of such agreements and
waivers as are  customarily  used with respect to  operations at the launch site
and are consistent with the provisions of this Article 14.4.


15.      ORION 2 SPACECRAFT IN-ORBIT PERFORMANCE WARRANTY

15.1     Total Amount at Risk

The Total  Amount at Risk  shall be  placed  at risk by the  Contractor  against
failure  by the  ORION 2  Spacecraft's  Transponders  to meet the  criteria  for
Satisfactorily  Operating  Primary  Transponders as set forth in Article 15.3.1.
The Total Amount at Risk shall be adjusted pro rata should the Contract Price be
modified  pursuant to Article 5.2 or  otherwise  modified by an Amendment to the
ORION 2 Contract.

15.2     In-Orbit Performance Warranty

15.2.1

The  Contractor  warrants that the ORION 2 Spacecraft  will provide  thirty (30)
Satisfactorily  Operating Primary Transponders at and after its Final Acceptance
pursuant to Article 9 hereof for a period of five (5) years  commencing upon the
date of its Final Acceptance (the "In-Orbit  Performance  Warranty Period").  To
the extent that the ORION 2  Spacecraft  fails to provide said  capability,  the
Contractor  shall pay ORION as damages  liquidated in their amounts and not as a
penalty,  an amount which shall be calculated as specified below up to the Total
Amount at Risk.

15.2.2

Upon Final Acceptance,  as defined in Article 9 hereof, the Total Amount at Risk
shall be earned and retained by the  Contractor  in the manner and to the extent
provided hereunder:

(a)      The Initial  Incentive Amount and the Monthly Amounts shall be adjusted
         pro rata should the Contract Price be modified  pursuant to Article 5.2
         or otherwise modified following the agreement between the Parties of an
         Amendment to the ORION 2 Contract pursuant to Article 27 hereof.

(b)      The  Initial  Incentive  Amount  shall be earned  and  retained  by the
         Contractor if, and only if, at Final Acceptance, the ORION 2 Spacecraft
         has________   Satisfactorily   Operating  Primary  Transponders  and  a
         propellant  lifetime as calculated  in accordance  with Part 3(D) of at
         least the Maneuver Lifetime  less________ year. Contractor shall not be
         liable for damages  under this Article  15.2.2(b)  where its failure to
         meet such  propellant  lifetime  requirement is due to a malfunction of
         the Launch Vehicle  operation or where its failure to meet the ________
         Satisfactorily  Operating Transponder  requirement is due to the

<PAGE>

         Launch  environment  exceeding  the ORION 2 Spacecraft  on-ground  test
         requirements as specified in Part 3(C).

(c)      The Monthly Amount corresponding and assigned to each calendar month of
         operation  during the  In-Orbit  Performance  Warranty  Period shall be
         earned  and  retained  by the  Contractor  according  to the  number of
         Satisfactorily   Operating  Primary  Transponders  which  the  ORION  2
         Spacecraft has, as provided in Table 15.2 hereof.  Contractor shall not
         be liable for damages under this Article 15.2.2(c) to the extent of the
         number of Transponders  ("Launch-Damaged  Transponders") that, at Final
         Acceptance,  are not Satisfactorily  Operating  Transponders due to the
         Launch  environment  exceeding  the ORION 2 Spacecraft  on-ground  test
         requirements as specified in Part 3(C); in such case,  Table 15.2 shall
         be  adjusted  by  decreasing  the  number of  Satisfactorily  Operating
         Transponders  required to earn each specified proportion of the Monthly
         Amount by the number of Launch-Damaged Transponders.

                                                    TABLE 15.2
<TABLE>
<CAPTION>

            Number of Satisfactorily Operating                      Proportion of Monthly Amount Earned (%)
                   Primary Transponders
<S>                                                         <C>
----------------------------------------------------------- ---------------------------------------------------------











                                                                                       0
----------------------------------------------------------- ---------------------------------------------------------
</TABLE>

(d)      In the event  that the  Initial  Incentive  Amount  shall not have been
         earned by the Contractor,  as specified in  subparagraph  (b) above, or
         any of the Monthly Amounts are not earned by the Contractor  during the
         relevant time period,  as specified in  subparagraph  (c) above,  those
         amounts (as  appropriate)  shall be repaid by the  Contractor to ORION.
         Payment  shall be due  thirty  (30)  Calendar  Days  after  the date of
         receipt  by the  Contractor  of a  telefaxed  invoice  (which  shall be
         followed by the airmailed original plus one copy) from ORION;  interest
         shall be paid (at the rate  specified in Article 43) on any amounts not
         paid when due.  Invoices  shall be  accompanied  by sufficient  data to
         support  ORION's claim.  ORION may offset any such payments not made by
         the

<PAGE>

         Contractor  against  any  outstanding  balance  due  under  the ORION 2
         Contract.  The Contractor  shall be deemed to have accepted the invoice
         ten (10) Business Days after receipt of the invoice unless, within such
         time period,  it notifies ORION of a dispute.  The Contractor shall pay
         any undisputed part of an invoice.

15.3     Satisfactorily Operating Primary Transponder

15.3.1

If a Primary  Transponder  does not satisfy the requirements of a Satisfactorily
Operating Primary Transponder, but ORION nevertheless elects to use such Primary
Transponder for Revenue-earning purposes, then, where the Revenue (or equivalent
consideration)  received  by  ORION  for  such  Primary  Transponder  in any one
calendar monthly period is less than the Monthly Amount at Risk for such Primary
Transponder,  the Contractor  shall, in the succeeding month, pay the difference
between the said Monthly Amount at Risk for such Primary Transponder and ORION's
actual monthly Transponder Revenue for such calendar monthly period. In no event
shall any one monthly payment by the Contractor under this Article 15.3.1 exceed
the Monthly  Amount at Risk for such  Primary  Transponder.  In the event that a
Primary  Transponder is determined not to be a Satisfactorily  Operating Primary
Transponder  but is later used for  Revenue-earning  purposes,  ORION  agrees to
advise the Contractor within seven (7) Business Days after commencing such use.

15.3.2

For the purposes of this Article,  in determining  whether a Primary Transponder
is a Satisfactorily  Operating Primary  Transponder no account shall be taken of
any period of unavailability:

(a)      attributable  to ORION 2  Spacecraft  maintenance  activities,  station
         keeping  maneuvers,  payload  reconfiguration  for business purposes or
         station change maneuvers; or

(b)      less than one one-hundredth percent (0.01%) outage per month; or

(c)      attributable  to  communications  link fading due to  external  causes,
         including but not limited to weather; or

(d)      arising directly or indirectly as a consequence of any negligent act or
         omission  of  ORION  or  any  of its  agents,  assignees,  Consultants,
         employees, or customers; or

(e)      attributable to earth station sun blinding.

<PAGE>

15.4

15.4.1

All  measurements,  computations  and analyses,  for the purpose of  determining
whether a Primary Transponder is a Satisfactorily  Operating Primary Transponder
shall be performed by ORION or its  Consultants,  provided  that the  Contractor
may,  at its  expense,  assist  in  determining  the  nature  of  anomalies  and
corrective  measures.  The Contractor  shall for this purpose be given access to
any data collected by ORION.

15.4.2

If ORION desires, following Final Acceptance, to make any changes to the ORION 2
Spacecraft's  in-orbit procedures,  ORION shall notify the Contractor in writing
of same and the  Contractor  shall  have  the  right to  approve  such  proposed
changes. The Contractor shall not unreasonably  withhold such approval and shall
work  with  ORION in good  faith  to  evaluate  the  proposed  changes  within a
reasonable time period.  Notwithstanding  Article 27.3 hereof, if the Contractor
reasonably concludes that in determining whether to approve the proposed changes
to the said in-orbit  procedures it will incur a cost in excess of Five Thousand
Dollars ($5,000), the Contractor shall promptly inform ORION within fifteen (15)
Calendar Days as to the estimated cost and a reasonable time for completion.  If
ORION requests the Contractor to make such  determination,  the Contractor shall
immediately  commence  work and shall be  entitled to claim and shall be paid by
ORION all such reasonable costs plus a profit of ten percent (10%). In addition,
if ORION proceeds with a change in the in-orbit procedures without  Contractor's
approval or the Contractor  reasonably  considers  that a proposed  change after
approval would adversely  affect the ORION 2 Spacecraft's  operational  ability,
characteristics,  lifetime,  propellant, power or station keeping abilities, the
Parties  shall  enter  good  faith  negotiations  to  determine  what  equitable
consideration in lieu of potential or actual lost In-Orbit  Performance Warranty
payments shall be provided to the Contractor.

15.5

The rights and remedies  under this Article are exclusive for the failure of the
ORION 2 Spacecraft  and/or its Primary  Transponders  after Final  Acceptance to
meet the criteria for a  Satisfactorily  Operating  Primary  Transponder  and in
substitution  of any  other  rights  and  remedies  ORION  has under the ORION 2
Contract or otherwise at law as a result of such failure.

<PAGE>

16.      SUBCONTRACTS

16.1

The Contractor has  represented  that in the performance of the Work required by
the  ORION  2  Contract,  it  will  be  necessary  for  the  Contractor  or  its
Subcontractors  to enter into the following Major  Subcontracts.  The Contractor
shall select the Major Subcontractors and ORION shall be provided with copies of
the  technical  content  of all Major  Subcontracts  and with a copy of the full
Launch Agreement promptly upon execution thereof.
Initially, the Major Subcontractors are as provided below:
<TABLE>
<CAPTION>
<S>                                   <C>                           <C>

------------------------------------- ----------------------------- -------------------------------------------------
Name of Major Subcontractor           Location                      Description of Work
------------------------------------- ----------------------------- -------------------------------------------------
Lockheed Martin                       USA                           Launch Vehicle
NEC                                   Japan                         KU Band Transponders
COMDEV                                Canada                        Multiplexers, Switching
__________*                           __________                    Antennas
Fokker                                Netherlands                   Solar Array
__________*                           __________                    Propellant Tank
__________*                           __________                    Battery
__________*                           __________                    Apogee Kick Motor



*Contractor shall comply
with Article 16.2 in selection
of these Major Subcontractors
------------------------------------- ----------------------------- -------------------------------------------------
</TABLE>


16.2

In the event that the Contractor or a  Subcontractor  selects or has a necessity
to terminate any Major  Subcontract  or substitute  Subcontractors  on any Major
Subcontract,  the  Contractor  shall  consult with ORION and discuss any and all
such actions prior to implementation.  Subject to Article 16.3, ORION shall have
no right of prior approval of Contractor's actions.

<PAGE>

16.3

In the event that the  Contractor  has a necessity to  terminate  or  substitute
Lockheed  Martin,  or NEC or COMDEV,  Limited the Contractor shall first consult
with and obtain the  approval of ORION.  If ORION does not approve  such actions
and the  Contractor  deems such actions to be necessary to meet its  performance
obligations under the ORION 2 Contract, then the Contractor may take such action
without ORION's approval.

16.4

In the event that the  Contractor  or a  Subcontractor  which has been awarded a
Major Subcontract has reason to waive, or to agree to, a deviation in any of the
technical  requirements  of any Major  Subcontract  which  will cause a material
impact on the  technical  parameters  of the ORION 2 Spacecraft  as set forth in
Part 3(A),  such  variations  shall be handled in accordance  with Part 3(B) and
shall  require a formal  Amendment to this ORION 2 Contract  pursuant to Article
27.

16.5

Nothing in the ORION 2 Contract  shall be construed as creating any  contractual
relationship  between  ORION  and any  Subcontractor.  The  Contractor  is fully
responsible  to ORION for the acts and  omissions of  Subcontractors  and of all
persons  used by the  Contractor  or a  Subcontractor  in  connection  with  the
performance  of  the  Work  under  the  ORION  2  Contract.  Any  failure  by  a
Subcontractor  to meet its obligations to the Contractor  shall not constitute a
basis for Excusable  Delay,  except as provided in Article 12 hereof,  and shall
not relieve the Contractor from meeting any of its obligations under the ORION 2
Contract.


17.      INDEMNIFICATION

17.1

The  Contractor  shall  indemnify  and  hold  ORION,  its  officers,  employees,
Consultants,  and assignees ("ORION  Associates")  harmless from and against any
and all losses,  damages,  liabilities or demands  (including  reasonable  legal
fees)  arising out of suits or claims  brought by third  parties,  including the
employees and Consultants of ORION, the Contractor,  and its Subcontractors,  on
account of damage to  property  and injury to persons  (including  sickness  and
death),   resulting   from  any  act  or  omission  of  the  Contractor  or  its
Subcontractors  in the  performance of the Work, or an act or omission of ORION,
occurring at any installation of the Contractor or any Subcontractor, and at its
expense  shall  defend  any  suits or other  proceedings  brought  against  said
indemnitees,   on  account  thereof,  and  shall  pay  all  expenses  (including
reasonable  legal fees) and satisfy  all  judgments  which may be incurred by or
rendered  against them, or any of them, in connection  therewith;  provided that
ORION notifies the Contractor  within ten (10) Business Days, in writing,  after
ORION  management has actual notice of any such suit or a written threat of such
suit within twenty (20)  Business Days of such claim and permits the  Contractor
to  answer  the  claim or suit and  defend  the same and  gives  the  Contractor

<PAGE>

authority and such  assistance  and  information as is available to ORION or the
defense of such claim or suit,  and  provided  further that ORION does not by an
act  (including  any admission or  acknowledgment  or omission)  prejudice  such
defense.  Any such assistance or information  which is furnished by ORION at the
written  request of the Contractor is to be at the  Contractor's  expense.  With
regard to suits or claims brought by or on behalf of employees or Consultants of
ORION, Contractor's  indemnification  obligations shall be limited to the amount
of  insurance  required  to  be  maintained  by  Contractor  under  Article  18.
Notwithstanding  the  foregoing,  in no  event  shall  the  Contractor  have any
indemnification liability regarding any claims or suits of any ORION customers.

17.2

ORION shall have a reciprocal  obligation  to indemnify  the  Contractor  to the
extent  described in Article 17.1,  except that such obligation  shall not apply
with  respect  to  claims  for acts or  omissions  of  ORION or its  Consultants
occurring at any installation of the Contractor or any Subcontractor.

17.3

If the  Contractor  insures  against any loss or damage which the Contractor may
suffer in respect of which the  Contractor is required to indemnify  ORION or an
ORION  Associate  pursuant to Article  17.1,  it shall be a  condition  that the
Contractor  arrange  for the insurer to waive its right of  subrogation  against
ORION and every ORION  Associate.  ORION shall be entitled to require proof from
time to time that the  Contractor has complied with its  obligations  under this
Article. In the event that the Contractor does not comply with such obligations,
the indemnity referred to in Article 17.1 shall extend to any claim which may be
made by an insurer pursuant to an alleged right of subrogation.

17.4

In respect to every  insurance  referred to in Article 18, the Contractor  shall
provide  documentary  evidence (which may be the insurance policies  themselves)
that ORION's insurable interest has been noted by the Contractor's insurers.

17.5

Without  prejudice  to ORION's  rights  under  Article 26,  ORION shall hold the
Contractor  harmless  from and  against  any suit or  claims  which may arise in
connection  with the use,  operation,  performance,  nonperformance,  failure or
degradation  of the  ORION 2  Spacecraft  after  Final  Acceptance  or for other
Deliverable  Items after Delivery,  provided that the Contractor  notifies ORION
within ten (10) Business  Days in writing  after it receives  notice of any such
suit or within  twenty (20)  Business  Days of such claim and  permits  ORION to
answer the claim or suit and defend the same and gives ORION  authority and such
assistance and  information as is available to the Contractor for the defense of
such claim or suit, and provided  further that the

<PAGE>

Contractor  does not by an act  (including  any admission or  acknowledgment  or
omission)  prejudice such defense.  Any such assistance or information  which is
furnished by the Contractor at the written  request of ORION is to be at ORION's
expense. The foregoing shall not be deemed to release the Contractor from any of
its obligations under Articles 9, 15 and 26 hereof.


18.      INSURANCE

18.1     Insurance of the Work

18.1.1

Before the Contractor commences the Work, the Contractor shall have an insurance
policy  covering the ORION 2 Spacecraft and all component  parts thereof and all
materials  of  whatever  nature  used  or to be  used  in  completing  the  Work
(collectively,  the "Loss  Items")  against all risks,  loss or damage  prior to
Intentional  Ignition (including coverage against damage or loss caused by earth
movement, flood, boiler, turbine and machinery accidents) subject to normal "All
Risks Policy" exclusions.  ORION and any Financing Entity shall be named as loss
payee,  but only in  relation  to all risks,  loss or damage to the Loss  Items.
ORION,  and each  Financing  Entity,  if any, shall be named insured on any such
policy in relation to all risks,  loss or damage to the Loss Items.  The details
of the insurer and the  relevant  extracts of the policy  shall be  submitted to
ORION.

18.1.2

All items  shall be insured for a sum not less than their  replacement  value or
their price under the ORION 2 Contract, whichever is the greater. Such insurance
coverage  shall be maintained by the  Contractor up to the point of  Intentional
Ignition  of the ORION 2  Spacecraft  ordered by ORION  pursuant  to the ORION 2
Contract and shall provide (1) coverage for removal of debris,  and insuring the
structures,  machines,  equipment,  facilities,  fixtures  and other  properties
constituting a part of the project, (2) transit coverage, including ocean marine
coverage (unless insured by the supplier),  and (3) off-site  coverage  covering
any key equipment,  and (4) off-site coverage covering any property or equipment
not stored on the  construction  sites.  The  deductible  for all such insurance
shall not exceed Two Hundred Fifty Thousand Dollars ($250,000).

18.1.3

The  insurance of the Work as required by this Article 18,  whether  effected by
the Contractor or ORION,  shall not limit, bar or otherwise affect the liability
and  obligation  of  the  Contractor  to  complete  the  Work  and  Deliver  the
Deliverable  Items in  accordance  with the ORION 2 Contract.  The  Contractor's
insurers  shall  waive all rights of  subrogation  against  ORION save those for
which ORION indemnifies the Contractor pursuant to Article 17.2 hereof.

<PAGE>

18.1.4

The  Contractor  agrees to assign to any  Financing  Entity the  proceeds of the
Contractor's  "All Risks Policy" with regard to any damage incurred on the ORION
2  Spacecraft  where such  damage  would  result in an  Excusable  Delay  which,
together with previous  Excusable  Delays  resulting  from damage covered by the
Contractor's  "All Risks Policy," would be greater than one hundred eighty (180)
Calendar Days.

18.2     Public Liability Insurance

18.2.1

Before the Contractor  commences the Work,  the  Contractor  shall have a Public
Liability  Policy of insurance.  The policy shall cover the  Contractor  and all
Subcontractors  employed  from  time  to  time  in  relation  to  the  Work  and
performance  of the ORION 2 Contract for their  respective  rights and interests
and cover their liabilities to third parties.

18.2.2

The  Contractor's  insurers shall waive all rights of subrogation  against ORION
save those for which ORION  indemnifies the Contractor  pursuant to Article 17.2
hereof.

18.2.3

The Public  Liability  Policy of insurance  shall be for an amount not less than
One Hundred Million Dollars  ($100,000,000) in respect of any one occurrence and
shall be effected with reputable insurers.  The policy shall be maintained until
all  Work  pursuant  to the  ORION  2  Contract,  including  remedial  work,  is
Delivered.  Such insurance shall not contain any exclusion which denies coverage
for third party  injuries to persons or damage to property of others arising out
of preparation of maps,  plans,  designs,  specifications  or the performance of
inspection  services  or  out of  any  other  services  to be  performed  by the
Contractor under the ORION 2 Contract.

18.2.4

ORION and the Financing  Entity, if any, shall be named as named insured on such
Public Liability insurance policy.

18.3     Insurance of Employees

18.3.1

Before  commencing the Work, the Contractor  shall insure against  liability for
death or injury to  persons  employed  by the  Contractor,  including  liability
imposed by statute and at common law.

<PAGE>

The insurance  coverage shall be for an amount in the greater of (i) Ten Million
Dollars  ($10,000,000) or (ii) as required by law, and shall be maintained until
all  Work  pursuant  to the  ORION  2  Contract,  including  remedial  work,  is
Delivered.  The Contractor shall ensure that all Subcontracts  contain a similar
provision.

18.3.2

The  Contractor's  insurers shall waive all rights of subrogation  against ORION
save those for which ORION  indemnifies the Contractor  pursuant to Article 17.2
hereof.

18.4     Comprehensive Automobile Liability

18.4.1

Before commencing the Work, the Contractor shall self-insure or Contractor shall
insure against  liability for claims of personal injury (including bodily injury
and death) and property damage covering all owned,  leased,  non-owned and hired
vehicles used at any of the  Contractor's  facilities in the  performance of the
Contractor's  obligations  under the ORION 2 Contract in an insurance amount not
less than Five Million Dollars  ($5,000,000)  per occurrence for combined bodily
injury and property damage.

18.4.2

The  Contractor's  insurers shall waive all rights of subrogation  against ORION
save those for which ORION  indemnifies the Contractor  pursuant to Article 17.2
hereof.

18.5     Launch Insurance

ORION shall have the  responsibility  to procure  Launch  Insurance.  Failure to
secure a binder for Launch  Insurance  by sixty (60) days before the Launch Date
shall be deemed an Excusable Delay,  which Excusable Delay shall extend from the
sixtieth  (60th) day before the Launch Date until the date such  insurance is so
secured and written verification thereof is provided to the Contractor.

18.6     Inspection and Provisions of Insurance Policies

18.6.1

Before the Contractor  commences the Work, and whenever  requested in writing by
ORION,  the  Contractor  shall produce  evidence that the insurance  required by
Articles  18.1,  18.2,  18.3 and 18.4 has been effected or is being  maintained.
Contractor  shall provide ORION with copies of all required  insurance  policies
and shall provide  ORION with written  notice no later than thirty (30) Calendar
Days before the expiration date of each such policy.

<PAGE>

18.6.2

If, after being requested in writing by ORION to do so, the Contractor  fails to
produce  evidence of compliance with the insurance  obligations  within fourteen
(14)  Calendar  Days,  ORION may effect and maintain the  insurance  and pay the
premiums.  The amount paid shall be a debt due from  Contractor to ORION and may
be offset against any payments due the Contractor by ORION.

18.6.3

The Contractor  shall,  as soon as  practicable,  inform ORION in writing of any
occurrence that may give rise to a claim under a policy of insurance required by
Articles  18.1,  18.2,  18.3,  18.4 or 18.5 and shall  keep  ORION  informed  of
subsequent  developments  concerning the claim. The Contractor shall ensure that
Subcontractors  similarly  inform  ORION of any  such  occurrences  through  the
Contractor.  Each Party shall provide to the other Party any  information  which
may reasonably be required to prepare and present an insurance claim.


19.      REPLACEMENT SATELLITE


19.1

The  Contractor  agrees  to  provide  an  additional   satellite   ("Replacement
Satellite")  delivered in-orbit no later than twenty-one and one quarter (21.25)
months  after  receipt  of an order  from  ORION  (but in no case  earlier  than
thirty-four  and one quarter  (34.25)  months  after NPD).  Orion may place such
order at any time during the performance of the ORION 2 Contract but in no event
earlier than seven (7) months after receipt by the  Contractor of the applicable
Total  Advance  Funding in Article 19.2 or later than sixty (60)  Calendar  Days
after the ORION 2  Spacecraft  is  determined  to be a  Constructive  Total Loss
(should that event occur).  The in-orbit  delivery dates shall be conditioned on
ORION  having  ordered  and  simultaneously  paid for the  Long-Lead  Items (and
associated work) set forth in Article 19.2 by the dates set forth therein.


<PAGE>

19.2

The Contractor  agrees to deliver the Replacement  Satellite on the schedule set
forth in  Article  19.1  provided  ORION  makes the  following  Advance  Funding
payments for Long-Lead Items on the schedule set forth below:

Fixed Charge at NPD --____________________________________________________

Replacement Satellite                               Total Advance Funding
Order Period                   Variable Charge      (Fixed and Variable Charges)
---------------------          ---------------      ----------------------------
ORION 2 NPD
ORION 2 NPD + 6  months
ORION 2 NPD + 12  months
ORION 2 NPD + 18 months
ORION 2 NPD + 21 months

19.3

The Contractor  shall furnish the  Replacement  Satellite in accordance with the
provisions  of the documents  which  constitute  the ORION 2 Contract,  with the
dates therein adjusted (if necessary) for the later timeframe of the Replacement
Satellite, and with the spacecraft test program revised as follows:

               Deletion of Sine Vibration Test (except Test in the  thrust-axis)
               Deletion of EMC Test  (however,  the ESD Test is to be performed)
               Deletion  of  Separation  Shock  Test   Rescheduling  of  adapter
               fit/fail check to Launch Site
                   Reduction  of Thermal  Vacuum Test to one balance  phase only
               Reduction  in  levels/durations  from  "Protoflight"  to  "Flight
               Acceptance"

19.4

The firm  fixed  price for the  Replacement  Satellite  ("Replacement  Satellite
Price"),  assuming  an order had been placed by ORION on or before 1 March 1997,
is as follows:

(a)      In U.S. Dollars --The firm fixed price is _____________________________
         _________________________________________________________, or


<PAGE>

(b)       The sum of the following currency amounts:

                           US$
                           GB(pound)
                           Yen
                           D Fl
                           Fr F
                           DM

After1 March 1997, upon request of ORION,  Contractor shall provide ORION with a
firm fixed price in U.S. dollars for the Replacement Satellite at least ten (10)
Calendar  Days prior to the time of order of the  Replacement  Satellite,  which
firm fixed price  shall  exceed the firm fixed price set forth in (a) above only
to the extent of currency fluctuations  subsequent to1 March 1997; in any event,
the   price   in   U.S.   dollars   shall   not   exceed________________________
____________________________________________________________________   excluding
the inflation adjustment described in the second succeeding paragraph.

At the  time of order of the  Replacement  Satellite,  ORION  shall  advise  the
Contractor  which  of the  above  pricing  approaches  (U.S.  dollars  or sum of
currencies) it selects.

Where ORION orders the Replacement  Satellite after 1 March 1997, the prices set
forth in this Article 19.4 shall be increased by a monthly  inflation  factor of
one-third  of one  percent  (0.33%)  from March 1997 to the month in which ORION
places the Replacement Satellite Order.

The Replacement  Satellite Price set forth in this Article 19.4 shall be reduced
by the amount of any Advance  Funding  payments made by ORION under Article 19.2
hereof.

The  Replacement  Satellite  Payment  Plan  and  Termination  Schedule  shall be
negotiated   between  the  Parties  prior  to  ORION  ordering  the  Replacement
Satellite;  the Payment Plan shall match Contractor's actual expenditure profile
so as to avoid prepayments and financing costs.

Selection of the launch vehicle and launch  services  contractor will be made by
ORION  (with  the  concurrence  of  Contractor)  in  sufficient  time to  permit
Replacement  Satellite  delivery on the schedule set forth in Article 19.1.  The
prices  for both such  items  will be  identified  and  agreed as a part of such
process.

ORION shall provide for launch insurance for the Replacement Satellite.


<PAGE>

Except as otherwise required by the terms of this Article 19, contract terms for
the Replacement  Satellite will be identical to the ORION 2 Contract,  with risk
elements  (e.g.,  liquidated  damages for late  delivery  and  warranty  payback
incentives) adjusted to the change in price from the ORION 2 Spacecraft so as to
represent the same percentage risk.

19.5

Where the Advance Funding for the Replacement  Satellite has been paid by ORION,
but ORION fails to order the Replacement  Satellite by the time required in this
Article  19,  the  option  for the  Replacement  Satellite  shall no  longer  be
effective and  Contractor  shall  deliver to ORION,  within thirty (30) Calendar
Days of the expiration date of the option, the Long-Lead Items set forth in Part
4, said Long-Lead items to be mutually agreed to by the Parties no later than 15
May 1997.


20.      TERMINATION FOR CONVENIENCE

20.1.1

ORION may, by notice in writing,  and without giving any reason or showing cause
therefor,  at any time prior to Launch of the ORION 2 Spacecraft,  terminate the
ORION 2 Contract  with respect to the Work in its  entirety  and the  Contractor
shall  immediately  cease  Work  accordingly,  and shall  similarly  direct  its
Subcontractors.

20.1.2

In the event of such termination under this Article, ORION shall be obligated to
pay  (i) to the  Contractor  an  amount  equal  to  the  sum of the  Termination
Liability Amounts for the ORION 2 Spacecraft and Launch Services as specified in
Part  1(B)  corresponding  to the  month in which  termination  occurs  less the
greater of the Advance  Payment or the sum of the  Milestone  Payments  actually
received  by the  Contractor,  provided  that,  where such  amount is a negative
number,  the  Contractor  shall pay such amount  promptly to ORION within twenty
(20) Calendar Days; and (ii) to the Launch Vehicle Agency an amount equal to the
Termination  Liability  Amount for the Launch  Vehicle as specified in Part 1(B)
corresponding to the month in which Termination occurs less any Progress Payment
actually received by the Launch Vehicle Agency.

<PAGE>

The Contractor  shall submit an invoice to ORION within sixty (60) Calendar Days
after the termination date which shall specify the amounts due to the Contractor
and the Launch Vehicle Agency from ORION pursuant to this Article 20.1.2 and the
Contractor  and the Launch  Vehicle  Agency  shall  immediately  be  entitled to
payment  by  ORION  of  such  amounts  immediately  thereafter.  Payment  by the
Financing  Entities  of such  amount to the  Contractor  and the Launch  Vehicle
Agency shall relieve ORION from its obligation to make such payments.

20.2

The amount  payable by ORION to the  Contractor  pursuant to Article  20.1 shall
constitute  a total  discharge  of ORION's  liabilities  to the  Contractor  for
termination pursuant to this Article 20.

20.3

If the ORION 2 Contract  is  terminated  as  provided  in this  Article and full
payment made in accordance with Articles 20.1,  ORION may require the Contractor
to transfer to ORION, in the manner and to the extent  directed by ORION,  title
to and possession of any items comprising all or any part of the Work terminated
(including,  without limitation, all Work-in-progress and all inventories),  and
the Contractor  shall,  upon the direction and at the expense of ORION,  protect
and preserve property in the possession of the Contractor or its  Subcontractors
in which ORION has an interest and shall facilitate  access to and possession by
ORION of items comprising all or any part of the Work so terminated.

If ORION so requests or ORION has not taken delivery of property in which it has
an interest  within sixty (60) Calendar Days after  termination,  or such longer
period as is agreed between the Parties, the Contractor shall make a reasonable,
good faith  effort to sell such items and to remit any sales  proceeds to ORION,
less a deduction for costs of disposition reasonably incurred by the Contractor.


21.      REMEDIES FOR DEFAULT

21.1

(a)      If, at any time prior to Intentional Ignition in respect of the ORION 2
         Spacecraft  (but not  thereafter),  the  Contractor  has failed to make
         adequate  progress  toward the completion of the ORION 2 Spacecraft and
         such  failure  does not  result  from  Excusable  Delay,  such that the
         Contractor,  due to  causes  related  to the  ORION 2  Spacecraft,  and
         regardless of the status of the Launch Vehicle (or associated  services
         provided by the Launch Vehicle Agency),  will not be able to Launch the
         ORION 2 Spacecraft by ninety (90) Calendar Days after the Delivery Date
         (as such date may have been  modified  in  accordance  with the ORION 2
         Contract),  then ORION shall be entitled to deliver to the Contractor a
         Demand for  correction of the failure  within thirty (30) Calendar Days
         after  ORION  learns of such  failure.  Such  Demand  shall  state full
         details of the failure.  Within ten (10) Calendar Days after receipt of
         the Demand,  or such longer time as the Parties  agree,  the Contractor
         shall submit to ORION a Correction Plan for achieving Final  Acceptance
         not later than two hundred and seventy  (270)  Calendar  Days after the
         Delivery Date  provided that no Correction  Plan shall ever result in a
         change to a Delivery Date as specified in Article 8, unless the Parties
         agree in accordance  with Article 27. If the  Correction  Plan does not
         reasonably  correct  or  offset  the  effect  of the  failure  so as to
         demonstrate  that Final  Acceptance  can be achieved not later than two
         hundred and seventy  (270)  Calendar

<PAGE>

         Days after the ORION 2 Spacecraft  Delivery Date,  ORION may reject the
         Correction  Plan within  thirty (30) Calendar  Days after  receipt,  in
         which  case the  Parties  shall  negotiate  in good  faith to develop a
         Correction Plan which will be  satisfactory  to both Parties.  If ORION
         does not reject the  Correction  Plan within  thirty (30) Calendar Days
         after  receipt,  the  ORION 2  Contract  shall be  deemed  modified  in
         accordance  with the  Correction  Plan and the failure  shall be deemed
         cured so long as Contractor  complies with the terms of such Correction
         Plan.

(b)      If, in addition to the Contractor's  failure to make adequate  progress
         toward completion of the ORION 2 Spacecraft due to the causes set forth
         in (a) above,  the  Contractor  is  experiencing  any delays other than
         Excusable  Delays such that the  Contractor  will not be able to Launch
         the ORION 2  Spacecraft  in order to achieve  Final  Acceptance  within
         three  hundred  sixty-five  (365)  Calendar  Days  after  the  ORION  2
         Spacecraft  Delivery Date (as may have been modified in accordance with
         this ORION 2 Contract),  then ORION shall be entitled to deliver to the
         Contractor a Demand for  correction  of the failure  within thirty (30)
         Calendar  Days after ORION  learns of such  failure.  Such Demand shall
         state full details of the failure.  Within ten (10) Calendar Days after
         receipt of the Demand,  or such longer time as the Parties  agree,  the
         Contractor  shall submit to ORION a Correction Plan for achieving Final
         Acceptance not later than three hundred and  sixty-five  (365) Calendar
         Days  after the  ORION 2  Spacecraft  Delivery  Date  provided  that no
         Correction  Plan  shall ever  result in a change to a Delivery  Date as
         specified  in Article 8, unless the Parties  agree in  accordance  with
         Article  27. If the  Correction  Plan does not  reasonably  correct  or
         offset  the  effect of the  failure  so as to  demonstrate  that  Final
         Acceptance  can be achieved not later than three hundred and sixty-five
         (365) Calendar Days after the ORION 2 Spacecraft  Delivery Date,  ORION
         may reject the  Correction  Plan within thirty (30) Calendar Days after
         receipt,  in which case the Parties  shall  negotiate  in good faith to
         develop a Correction  Plan which will be  satisfactory to both Parties.
         If ORION  does not  reject  the  Correction  Plan  within  thirty  (30)
         Calendar  Days  after  receipt,  the ORION 2  Contract  shall be deemed
         modified in accordance  with the Correction  Plan and the failure shall
         be deemed cured so long as  Contractor  complies with the terms of such
         Correction Plan.

21.2

In the event  (i) the  Contractor  does not  submit a  Correction  Plan to ORION
within ten (10)  Calendar  Days after  receipt of a Demand,  or (ii) the Parties
cannot develop a Correction Plan which reasonably corrects or offsets the effect
of the failure,  or which otherwise is satisfactory to both Contractor and ORION
within twenty (20) Calendar  Days after the  rejection of the  Correction  Plan,
ORION may, as its sole  remedy,  elect one of the  remedies set forth in Article
21.3 below,  and the Contractor  shall forthwith  notify ORION of completed Work
and all Work-in-progress  relating to the ORION 2 Spacecraft in respect of which
ORION  exercises  its rights  under this  Article.  ORION shall elect one of the
remedies specified in Article 21.3 (i) within forty (40) Calendar Days after the
Contractor's receipt of a Demand, if the Contractor

<PAGE>

fails to submit a Correction  Plan,  or (ii) within  thirty (30)  Calendar  Days
after  the  deadline  for  the  Parties'  joint  development  of a  satisfactory
Correction Plan.

21.3     ORION's remedies as referenced in Article 21.2 are as follows:

(a)      ORION may  terminate  the ORION 2 Contract  with respect to the ORION 2
         Spacecraft  and may cause the ORION 2  Spacecraft  to be  completed  by
         another  party,  and as total  damages (in  addition to any  applicable
         liquidated  damages  for delay  levied  pursuant  to  Article 11 and/or
         Article 12 up to the date of termination) may charge the Contractor for
         any  reasonable  increased  cost  incurred in  connection  therewith in
         excess of the Contract Price; provided that the Contractor's  liability
         under  this  paragraph  shall not exceed the  Contract  Price  (without
         regard  to  any  payments  made  to  the  Contractor  to  the  date  of
         termination). The amount payable by the Contractor shall be verified at
         the Contractor's  request and expense by an internationally  recognized
         firm of  accountants  appointed  by the  Contractor  for  that  purpose
         subject to  approval of ORION,  such  approval  not to be  unreasonably
         withheld  or delayed.  A demand for any such excess  costs must be made
         within one (1) year after the termination and must be paid within sixty
         (60)  Calendar  Days of receipt of such  verification.  In the event of
         election by ORION under this paragraph,  the Contractor  shall complete
         the Launch Vehicle and Launch Services  portion of the ORION 2 Contract
         (as it may need to be amended as a consequence of ORION's election) and
         shall be liable for any reasonable  additional costs over and above the
         Contract Price for those Launch Vehicle and Launch Services so affected
         as set forth in  Article  5, as  adjusted.  The  Contractor's  right to
         verification  shall be without  prejudice to the rights of either Party
         under Article 30. The report issued by the  accountants  may be used by
         either Party during any arbitration  proceedings,  but the report shall
         not be binding on the  arbitrator(s).  By notice in writing received by
         ORION no later than sixty (60)  Calendar  Days after receipt of ORION's
         invoice  pursuant to this Article 21.3,  the Contractor may dispute the
         amount of said invoice.  In the event that the  Contractor  does not so
         notify ORION that it disputes ORION's invoice,  the Contractor shall be
         deemed to have accepted said invoice; or

(b)      ORION  may  terminate  the  ORION 2  Contract,  and in  which  case the
         Contractor shall pay ORION (i) all amounts  previously paid by ORION to
         the Contractor and (ii) applicable  liquidated damages for delay levied
         pursuant to Article 11 and/or Article 12 up to the date of termination.
         Title to the ORION 2  Spacecraft  shall  vest or  remain  vested in the
         Contractor.

21.4

The remedies  provided in Article 21.3 are exclusive and in substitution for any
other  rights and  remedies  under the ORION 2 Contract or  otherwise  at law or
equity with respect to such defaults.  No termination  rights shall be available
to ORION in respect of the ORION 2 Spacecraft after the same has been Launched.

<PAGE>

21.5

If the  Contractor  refuses or fails to observe or perform any material  duty or
obligation in the ORION 2 Contract, except those obligations covered in Articles
21.1 through 21.3 and other  obligations of the Contractor for which  particular
remedies are  specified  elsewhere  in the ORION 2 Contract as being  exclusive,
then ORION  shall be  entitled  to deliver to the  Contractor  a Demand  that it
correct the breach  within thirty (30)  Calendar  Days.  Such Demand shall state
fully the details of the breach.  Within ten (10) Calendar Days after receipt of
the  Demand,  or such longer time as the Parties  agree,  the  Contractor  shall
submit  to ORION a formal  Correction  Plan.  If the  Correction  Plan  does not
reasonably correct or offset the effect of the breach in a timely manner,  ORION
may reject the  Correction  Plan within thirty (30) Calendar Days after receipt,
in which case the Parties shall  negotiate in good faith to develop a Correction
Plan which will be  satisfactory  to both Parties.  If ORION does not reject the
Correction  Plan within  thirty (30) Calendar  Days after  receipt,  the ORION 2
Contract shall be deemed modified in accordance with the Correction Plan and the
breach shall be deemed cured so long as  Contractor  complies  with the terms of
such Correction  Plan. In the event the Contractor  fails to submit a Correction
Plan or the Parties cannot develop a Correction Plan which  reasonably  corrects
or offsets the effect of the breach in a timely  manner,  or which  otherwise is
satisfactory to both Contractor and ORION within twenty (20) Calendar Days after
the Demand,  ORION shall be entitled to any remedies available at law or equity,
subject to Article 14.2 hereof and pursuant to the provisions of Article 30.

21.6     Contractor's Right to Terminate

21.6.1

(a)      The  Contractor  shall be entitled to terminate the ORION 2 Contract in
         whole or, where severable,  in part, if Contractor gives written notice
         to ORION of the  following  event  and ORION  fails to cure such  event
         within thirty (30) Calendar Days after  receiving such written  notice:
         default in the payment of any Progress Payment or Milestone  Payment or
         Termination  Liability  Amount  when the same shall have become due and
         payable.

(b)      The  Contractor  shall be entitled to terminate the ORION 2 Contract by
         giving written notice to ORION where insurance proceeds are paid to any
         Financing Entity pursuant to Article 18.1.4 (All-Risk  Insurance),  and
         such  proceeds are not paid over to the  Contractor  within thirty (30)
         Calendar Days of receipt by any Financing Entity.

(c)      Except as specified in the ORION 2 Contract,  the Contractor  shall not
         have the right to terminate or suspend the ORION 2 Contract.

<PAGE>

21.6.2

In the event of such termination,  the Contractor shall be entitled forthwith to
take any or all of the following actions:

(a)      treat the ORION 2 Contract as  terminated as to any or all of the items
         then   undelivered  or  services   unperformed  and  cease  or  suspend
         manufacture of any of the items to be supplied hereunder;

(b)      withhold  delivery of any of the items to be supplied  hereunder  until
         the  Contractor has received full payment under this Article and retain
         all sums then paid on account thereof;

(c)      cease or suspend  performance  of any of the services to be provided to
         ORION hereunder,  except those services which are specifically intended
         to be  provided  in  connection  with  a  termination  of the  ORION  2
         Contract; and

(d)      take payment of an amount equal to the Termination Liability Amount for
         the ORION 2  Spacecraft  for the  calendar  month  next  following  the
         calendar month in which the date of termination occurs, less the sum of
         the  Milestone  and  Progress   Payments   actually   received  by  the
         Contractor,  provided that, where such amount is a negative number, the
         Contractor  shall refund such amount  promptly to ORION  within  twenty
         (20) Calendar Days.  Where the  Contractor is owed money by ORION,  the
         Contractor  shall submit an invoice to ORION within sixty (60) Calendar
         Days after the  termination  date which shall specify the amount due to
         the  Contractor  from  ORION  pursuant  to this  Article  21.6  and the
         Contractor  shall  immediately  be  entitled  to full  payment by ORION
         immediately thereafter.  Payment by any Financing Entity of such amount
         to the Contractor  shall relieve ORION from its obligation to make such
         payment.

         To the  extent  that full  payment  has been made  therefor,  ORION may
         require  the  Contractor  to transfer to ORION in the manner and to the
         extent  directed  by  ORION,  title  to and  possession  of  any  items
         comprising all or any part of the Work terminated  (including,  without
         limitation,   all  Work-in-progress  and  all  inventories),   and  the
         Contractor  shall,  upon  direction  of  ORION,  protect  and  preserve
         property at ORION's  expense in the possession of the Contractor or its
         Subcontractors  in which  ORION has an  interest  and shall  facilitate
         access to and  possession by ORION of items  comprising  all or part of
         the Work terminated. Alternatively, ORION may request the Contractor to
         make a  reasonable,  good faith  effort to sell such items and to remit
         any sales  proceeds to ORION less a deduction for costs of  disposition
         reasonably incurred by the Contractor for such efforts.

21.7

In all  instances,  the Party  terminating or claiming other remedies shall take
all  reasonable  steps  available  to it to mitigate any claim which it may have
against the defaulting Party.

<PAGE>

21.8

Except  in the case of a default  under  Article  21.6.1,  Article  22.1(a)  and
Article  22.3(a),  prior to either Party  exercising  its right to terminate the
ORION 2 Contract  under this  Article,  the Parties  agree that  ORION's  Senior
Executive and the Contractor's  Senior  Executive,  and if mutually  agreed,  an
independent  third party, will meet within fifteen (15) Calendar Days of receipt
of  written  notice of the  dispute  by one  Party to the other  Party to try to
resolve the said  dispute.  If ORION's  Senior  Executive  and the  Contractor's
Senior Executive cannot agree on an appropriate  resolution of the dispute, then
the Parties shall resolve  their  dispute in accordance  with the  provisions of
Article 30.

21.9

Nothing in this Article 21 shall affect  ORION's  rights to  liquidated  damages
under Articles 11 or 12 hereof.


22.      TERMINATION IN SPECIAL CASES

22.1     The  Contractor  shall be  deemed  to be in  default  under the ORION 2
         Contract if:

(a)      it  is  declared   insolvent  or  bankrupt  by  a  court  of  competent
         jurisdiction,  is  the  subject  of  any  proceedings  related  to  its
         liquidation,  insolvency  or for the  appointment  of a receiver  or an
         administrative  receiver; or makes an assignment for the benefit of its
         creditors or

<PAGE>

         enters into an agreement for the composition, extension or readjustment
         of all or substantially all of its obligations; or

(b)      the  Contractor  has  resorted to  fraudulent  or corrupt  practices in
         connection with its securing or implementing of the ORION 2 Contract.

22.2

If the  Contractor  is in  default  pursuant  to  Article  22.1,  then ORION may
terminate  the ORION 2 Contract in  accordance  with the  provisions  of Article
21.3.

22.3

ORION shall be deemed to be in default under the ORION 2 Contract if:

(a)      it  is  declared   insolvent  or  bankrupt  by  a  court  of  competent
         jurisdiction,  is  the  subject  of  any  proceedings  related  to  its
         liquidation,  insolvency  or for the  appointment  of a receiver  or an
         administrative receiver, makes an assignment for the benefit of all its
         creditors or enters into an agreement for the composition, extension or
         readjustment of all or substantially all of its obligations; or

(b)      it has resorted to fraudulent or corrupt  practices in connection  with
         its securing or implementing of the ORION 2 Contract.

22.4

If ORION is in  default  pursuant  to  Article  22.3,  then the  Contractor  may
terminate  the ORION 2 Contract in  accordance  with the  provisions  of Article
21.6.


23.      PUBLICATION OF INFORMATION

23.1

Neither  the  Contractor,  nor ORION nor any of their  independent  consultants,
officers,  employees,  agents,  contractors,  Subcontractors or assignees, shall
publish any material (including articles,  films, brochures,  advertisements and
photographs),  or authorize  other persons to publish such material,  or deliver
speeches  about the Work without the prior written  approval of the other Party,
which approval shall not be unreasonably  withheld.  This  obligation  shall not
apply  to  ORION's  statement  or  publication  of  any  sort  relating  to  the
performance specifications or Statement of Work, which are intellectual property
of ORION and may be published as ORION so determines. The above obligation shall
also not apply to information which is publicly  available from any Governmental
agencies or which is or otherwise  becomes publicly  available without breach of
this  Agreement.  Notwithstanding  the foregoing,  the  Contractor,  ORION,  and
Subcontractors  may  make  (i) any  filings  that  the  Contractor,  ORION  or a
Subcontractor considers advisable or necessary under applicable securities laws,
including the Securities Act of 1933, as amended, the Securities Exchange Act of
1934, as amended,  the rules  applicable to the National  Market System,  or the
securities  laws  applicable to public  companies in the Republic of France (the
"French  Securities  Laws"), and the Parties shall comply with the provisions of
Article 24.5 with respect thereto, (ii) such other filings as may be required to
be made by any governmental agency or any administrative or judicial body before
which an action affecting the Contractor,  ORION, a Subcontractor,  any of their
Affiliates or the ORION 2 Spacecraft is pending, and (iii) such other filings as
may be required by applicable law.

23.2

The application  for approval to publish any material or deliver  speeches about
the Work shall be submitted to the other Party in writing and shall include full
particulars  of any  intended  publication.  Upon  receipt of the other  Party's
agreement in principle to the proposed  publication,  the applicant shall submit
for final  approval by the other Party any  material to be published in the form
and context in which it is intended to be used. The other Party may then approve
or decline

<PAGE>

to approve publication in whole or in part of the material and at its discretion
may specify a time for publication.


24.      CONFIDENTIALITY AND NONDISCLOSURE OF PROPRIETARY
         INFORMATION

24.1

During the  course of  performance  of the ORION 2 Contract  each Party may have
access to or receive information from the other, such as information  concerning
inventions,  techniques,  processes,  devices, discoveries and improvements,  or
regarding administrative,  marketing, financial or manufacturing activities. All
such  information,   including  any  materials  or  documents   containing  such
information,   whether  disclosed  orally  or  otherwise,  shall  be  considered
proprietary and confidential  information of the disclosing Party  ("Proprietary
Information").

24.2

(a)      For the purpose of this Article 24, "Proprietary Information" shall not
         include any information which the receiving Party can establish to have
         (i) become publicly known without breach of the ORION 2 Contract;  (ii)
         been given to the receiving Party by a third party who is not obligated
         to maintain confidentiality;  (iii) been independently developed by the
         receiving Party without reference to the Proprietary Information of the
         other, as established by documentary  evidence;  or (iv) been developed
         by the  receiving  Party  prior to the date of  receipt  from the other
         Party, as established by documentary evidence.

(b)      The  Contractor  agrees that it will not,  for the period  specified in
         Article  24.3(a),  disclose details of the Work to be provided to ORION
         hereunder,  to the extent that such  disclosure  would reveal  specific
         performance  information  regarding the ORIONSAT system and the ORION 2
         Spacecraft  or any other  information  which  would  materially  affect
         ORION's  commercial  interest  or the  commercial  use of the  ORIONSAT
         System  without the prior  written  consent of ORION which shall not be
         unreasonably  withheld.  Notwithstanding  the  foregoing,  the  Parties
         expressly agree that the Contractor shall have the  unrestricted  right
         at any time to use and to supply to third parties services or equipment
         similar or identical to any Work provided hereunder.

(c)      ORION  agrees  that it will not,  for the period  specified  in Article
         24.3(a),  disclose  Proprietary  Information  of the  Contractor to the
         extent  that  such  disclosure  would  reveal  information  to a direct
         competitor  of  the  Contractor  which  would  materially   affect  the
         commercial  interests  of the  Contractor  without  the  prior  written
         consent of the  Contractor  which shall not be  unreasonably  withheld.
         Contractor  agrees that for  purposes of this  Article 24, in the event
         that  TELESAT  and/or  COMSAT are engaged as  Consultants  to

<PAGE>

         ORION for  purposes of the ORION 2  Contract,  they shall not be deemed
         direct competitors to the Contractor.

24.3

(a)      Both during and for a period of three (3) years  after the  termination
         or  expiration  of the ORION 2 Contract,  each Party agrees to preserve
         and protect the  confidentiality of the Proprietary  Information of the
         other and all physical  forms  thereof,  whether  disclosed  before the
         ORION 2 Contract is signed or afterward.  Neither Party shall  disclose
         or disseminate Proprietary Information of the other to any third party,
         including employees,  independent consultants, or Subcontractors unless
         such party has (i) a need to know the  Proprietary  Information for the
         purpose of establishing, maintaining, operating, financing or marketing
         the ORIONSAT system, and (ii) has executed an agreement  obligating the
         party to maintain the  confidentiality  of the Proprietary  Information
         and limiting the use of the  Proprietary  Information to  establishing,
         maintaining,  operating,  financing or marketing  the ORIONSAT  system.
         Neither Party shall use  Proprietary  Information  of the other for its
         own  benefit  or  for  the  benefit  of  any  third  party,  except  as
         specifically  provided  under the terms and  conditions  of the ORION 2
         Contract.

(b)      The  foregoing  shall not  affect any right of ORION in respect of Data
         and  Documentation  provided  for under the ORION 2 Contract  nor shall
         either Party be prevented from using the general know-how and abilities
         gained during the  performance  of the ORION 2 Contract for any purpose
         whatsoever.

24.4

(a)      Either  Party  shall  be  entitled  to  make  copies  of any  documents
         containing  Proprietary  Information  under the  terms  and  conditions
         outlined above.

(b)      ORION shall have the right at any time to remove,  obliterate or ignore
         any   proprietary/confidential   legend   placed   on   any   Data   or
         Documentation,  or  other  information  furnished  under  the  ORION  2
         Contract by the Contractor  where the legend is not in accordance  with
         the  ORION 2  Contract  but only  after  notice to the  Contractor  and
         reasonable opportunity for the Contractor to defend such legend.

24.5

Notwithstanding the foregoing, the Contractor, ORION and Subcontractors may make
(i) any  filings  that the  Contractor,  or ORION or a  Subcontractor  considers
advisable  or  necessary  under  applicable   securities  laws,   including  the
Securities  Act of 1933,  as amended,  the  Securities  Exchange Act of 1934, as
amended,  the rules applicable to the National Market System,  or the securities
laws  applicable  to public  companies  in the  Republic of France (the  "French
Securities Laws"),  (ii) such other filings as may be required to be made by any
governmental  agency or any  administrative  or judicial  body  before  which an
action  affecting  the  Contractor,   ORION,  a

<PAGE>

Subcontractor, any of their Affiliates, or the ORION 2 Spacecraft is pending and
(iii) such other filings as may be required by applicable  law.  Prior to making
any  filings  containing  Proprietary   Information  of  the  other  Party,  the
disclosing Party shall provide the other Party reasonable  advance notice of the
filing and cooperate with such other Party in obtaining  confidential  treatment
for such  Proprietary  Information.  In  addition,  if  ORION or the  Contractor
desires for any information to be contained  within such a filing to be accorded
confidential  treatment and not disclosed to the public, it shall so indicate to
the other Party and such other Party shall  cooperate with the disclosing  Party
in obtaining confidential treatment for such information.


25.      LICENSE RIGHTS
25.1

Except  as set  forth  in  Article  25.5,  the  Contractor  grants  to  ORION an
irrevocable, non-exclusive license to use and have used throughout the world any
software, and any invention covered by any patent, now or hereafter owned by the
Contractor,  or for which the  Contractor  has or may acquire the right to grant
such a license,  which software and/or invention is directly incorporated in any
Deliverable  Item or directly  employed in the use of any Deliverable Item under
the ORION 2 Contract. Such license shall:

(a)      be deemed to be fully  paid-up for the purposes of the ORION 2 Contract
         including use,  redesign or  modification  of any items delivered under
         the ORION 2 Contract; and

(b)      be on reasonable terms and conditions for other purposes.

Such license shall be transferable to the Financing Entities and, subject to the
Contractor's  approval,  any other entity,  such approval not to be unreasonably
withheld.

25.2

The Contractor shall, unless otherwise  authorized or directed by ORION, include
in each  Subcontract  hereunder a license  rights clause  pursuant to which each
Subcontractor  will  grant  rights  to ORION to the same  extent  as the  rights
granted by the Contractor in Article 25.1.

25.3

This  Article  shall  not be  construed  as  limiting  any  rights  of  ORION or
obligations of the Contractor under the ORION 2 Contract, including specifically
the  right  of  ORION,  without  payment  of  additional   compensation  to  the
Contractor, to use, have used, deliver, lease, sell or otherwise dispose of, any
item or any part thereof, required to be delivered under the ORION 2 Contract.

<PAGE>

25.4

The Contractor  grants to ORION a non-exclusive  license to use the Contractor's
thermal  propellant  gauging  software  program (the "Software  Program") on the
terms set out hereunder:

(a)      such  license  shall be for the use of ORION and  ORION's  Consultants,
         advisors and agents in support of ORION's internal business and for use
         upon equipment notified in writing to the Contractor.

(b)      ORION  shall  not,   without  the  express  written   approval  of  the
         Contractor,  modify,  enhance,  copy,  download or reverse engineer the
         Software Program;  provided,  however, ORION shall be permitted to copy
         the Software Program for archival or disaster recovery purposes.

(c)      ORION shall not assign, transfer, sell, lease, sub-license or otherwise
         deal in the Software Program;  provided,  however, the license shall be
         transferable  to the Financing  Entities with the prior written consent
         of the Contractor,  which consent shall not be unreasonably withheld or
         delayed.


26.      PATENTS, TRADEMARKS AND COPYRIGHTS

26.1

The  Contractor,  at its own  expense,  shall  defend  ORION  and its  officers,
employees,  agents,  consultants and  Subcontractors  and assignees  against any
claim or suit based on an  allegation  that the  manufacture  of any item in the
performance  of the  ORION 2  Contract,  or the  use,  lease or sale of any item
delivered or to be delivered  under the ORION 2 Contract,  infringes any letters
patent,  trademarks,  copyrights or other proprietary rights of any third party,
and shall pay any royalties  and other costs  related to the  settlement of such
claim or suit and the costs and damages,  including attorneys' fees, incurred as
the result of any such claim or suit;  provided that (i) ORION promptly notifies
the  Contractor  in writing  within ten (10)  Calendar Days of any such claim or
suit,  (ii)  permits the  Contractor  to answer the claim or suit and defend the
same,  (iii) gives the Contractor  authority and such assistance and information
as is  available  to ORION for the defense of such claim or suit,  and  provided
further  that  ORION  does  not  by  any  act   (including   any   admission  or
acknowledgment  or omission)  prejudice  such  defense.  Any such  assistance or
information which is furnished by ORION at the written request of the Contractor
is to be at the Contractor's expense.

26.2

If the manufacture of any item in the performance of the ORION 2 Contract or the
use,  lease or sale of any item  delivered or to be delivered  under the ORION 2
Contract,  is enjoined  as a result of a suit based on a claim of  infringement,
the Contractor shall resolve the matter so that the item

<PAGE>

is  no  longer   subject  to  such   injunction  or  replace  the  item  with  a
functionally-equivalent, non-infringing item satisfactory to ORION.

26.3

ORION neither  represents  nor warrants that the  performance of any Work or the
manufacture,  use, lease or sale of any Deliverable Item will be free from third
party claims of infringement of any patents or other proprietary rights.


27.      ORION 2 CONTRACT AMENDMENTS

27.1

Except as otherwise  specifically  provided,  the ORION 2 Contract  shall not be
modified  except by an  Amendment  to the ORION 2 Contract.  No purchase  order,
acknowledgment,  quotation or other similar document issued by either Party with
respect to the  subject  matter of the ORION 2 Contract  shall be deemed to be a
part of the ORION 2 Contract  or to modify the ORION 2 Contract  in any  respect
relating to the Work. No oral agreement or conversation with any officer,  agent
or employee of ORION or the Contractor,  either before or after execution of the
ORION 2  Contract  shall  affect  or  modify  any of the  terms  or  obligations
contained in the ORION 2 Contract.

27.2

At any time prior to  completion  and Delivery of all the Work under the ORION 2
Contract,  ORION may, in writing,  vary the Work with respect to the  unlaunched
ORION 2 Spacecraft within the general scope of the ORION 2 Contract. If any such
variation causes an increase or decrease in the cost of, or in the time required
for the performance of the ORION 2 Contract,  a change in the  specifications of
any Deliverable Item, or a change in the Aggregate  Predicted  Transponder Life,
the  Parties  shall  negotiate  in good  faith an  equitable  adjustment  to the
Contract Price or any other terms affected by such variation, or to the Delivery
Dates, or the  specifications,  which shall be formalized in an Amendment to the
ORION 2 Contract.  The Contractor shall not implement such variation,  and ORION
shall not be liable for any change in Contract  Price or Delivery Dates pursuant
to such  variation,  until and unless the Parties  have  entered  into a written
Amendment to the ORION 2 Contract.  Should  ORION  decide not to  implement  any
proposed  variation  of the  Work it  will  pay the  Contractor  its  reasonable
preparation costs in evaluating the same.

27.3

At any time prior to Delivery  of all the Work under the ORION 2  Contract,  the
Contractor  may, in writing,  request a variation of the Work within the general
scope  of the  ORION 2  Contract.  If  ORION  agrees  with  the  request  of the
Contractor  for variation of the Work and such  variation

<PAGE>

causes an increase or decrease in the cost of, or in the time  required for, the
performance of the ORION 2 Contract,  or a change in the  specifications  of any
Deliverable  Item,  the  Parties  shall  negotiate  in good  faith an  equitable
adjustment to the Contract Price or any other terms affected, or Delivery Dates,
or the specifications,  which shall be formalized in an Amendment to the ORION 2
Contract. The Contractor shall not implement such variation, and ORION shall not
be liable for any change in Contract  Price or Delivery  Dates  pursuant to such
variation,  until and unless the Parties  have  entered into an Amendment to the
ORION 2 Contract.

27.4

At any time prior to Delivery  of all the Work under the ORION 2  Contract,  the
Contractor  may,  in  writing,  request  to  rearrange  the  Milestone  Payments
contained in Part 1(B) in order to reflect the current program status.  Any such
requested  change shall not become  effective  until and unless the Parties have
entered into an Amendment to the ORION 2 Contract which implements the requested
change.


28.      GOVERNMENTAL APPROVALS

Notwithstanding  any  other  Article  in  the  ORION  2  Contract,  the  Parties
understand and agree that certain restrictions, including those placed on access
to  Contractor's  and  Subcontractor's   plants  and  the  use,  sale  or  other
disposition of technical data,  and/or Work delivered under the ORION 2 Contract
may be imposed  by any  Government  which has  jurisdiction  over the Work.  The
Parties at all times,  both before and after completion of the ORION 2 Contract,
agree to be and remain bound by any such Government  requirements  pertaining to
the  technical  data or Work and  shall  cooperate  in  obtaining  all  required
consents and approvals.

ORION shall be given an opportunity to comment on any  application to the United
States Government by the Contractor prior to submission of such application. The
Contractor shall in good faith consider any comments made by ORION.


<PAGE>

29.      RESPONSIBILITY FOR THE CONTRACT

29.1

The  Contractor,  by  having  submitting  a tender  to  perform  the Work and by
executing the ORION 2 Contract, shall be deemed:

(a)      to have satisfied itself as to:

         (i)      all the  conditions  and  circumstances  which may  affect the
                  Contract Price, as defined in Article 5; and

         (ii)     the feasibility of the Work to be performed in accordance with
                  the terms and conditions of the ORION 2 Contract;

(b)      to warrant that it has the necessary skills, facilities and capacity to
         perform the Work in  accordance  with the terms and  conditions  of the
         ORION 2 Contract.

29.2

The Contractor  acknowledges  that it has fixed the Contract Price  according to
its own view and  assessment of all relevant  matters and no  additional  costs,
except as  otherwise  expressly  provided  for in the ORION 2 Contract,  will be
charged over and above the Contract Price.

29.3

The Parties  acknowledge  that they have  thoroughly  examined  all parts of the
ORION 2 Contract, and agree that they are complete,  consistent and accurate. If
the Contractor decides,  during the performance of the Work, that any portion of
the  ORION  2  Contract  is  inaccurate  or   incomplete,   or  that  there  are
inconsistencies,  it shall notify ORION in writing  specifying full  particulars
and request  resolution  before  proceeding  with the Work in  question.  If the
Contractor  proceeds before  obtaining such a resolution,  it does so at its own
risk and expense, and whether or not the course it has chosen is satisfactory to
ORION,  it  shall  be  entitled  to no  increase  in the  Contract  Price or any
extension of the Delivery Dates set out in Article 8. If the Contractor proceeds
with  the  Work  before  obtaining  resolution  of  any  inaccuracy,  incomplete
information  or  inconsistency  and the  course of action it has  pursued is not
chosen by ORION,  it shall,  upon request by ORION,  promptly at its own expense
follow the course of action  directed by ORION and make all  readjustments  that
may be required.

<PAGE>

29.4

ORION shall within twenty (20) Calendar Days after written  notification  by the
Contractor  pursuant to Article 29.3 provide a response  and  resolution  of the
issues raised by the Contractor.

29.5

The  Contractor  covenants  that it will  cooperate  fully  with,  and  will use
reasonable  efforts to ensure the full cooperation of, all  Subcontractors  with
ORION in doing all things reasonably necessary to achieve the due performance of
the ORION 2 Contract.


30.      DISPUTE RESOLUTION

30.1

If any dispute arises out of or in connection  with this ORION 2 Contract or the
breach  thereof,  including but not limited to any failure to reach agreement on
price,  schedule  or  performance,  any claim for  breach  of  contract  and any
question regarding its existence, validity or termination, such dispute shall be
finally  settled by  arbitration  in  accordance  with this Article 30. Prior to
commencing  arbitration  with  respect to any  dispute,  either Party shall give
written  notice to the  other of its  position  and  reasons  therefore  and may
recommend  corrective  action.  In the event  that  mutual  agreement  cannot be
reached  within ten (10)  Calendar  Days after  receipt of such notice,  or such
other  period  as may be  specified  in the  ORION 2  Contract,  the  respective
positions of the Parties shall be forwarded to ORION's Senior  Executive and the
Contractor's  Senior  Executive,  for discussion and an attempt shall be made by
these persons to reach mutual agreement within a further ten (10) Calendar Days.
To increase the probability of an expeditious resolution of the dispute, ORION's
Senior Executive and Contractor's  Senior Executive may meet during the ten (10)
Calendar  Day period  and have each side  present  its  position  and  reasoning
directly to them at such meeting.

30.2

If mutual  agreement is not reached through the above process,  either Party may
refer such dispute for final  determination to an arbitration  tribunal convened
in accordance with the terms of Articles 30.3 and 30.4.

30.3

The  arbitration  tribunal  shall  consist  of three  (3)  arbitrators,  one (1)
arbitrator to be appointed by ORION,  one (1)  arbitrator by the  Contractor and
the third arbitrator to be appointed by the former two (2) arbitrators; provided
that if a Party fails to appoint an  arbitrator  within the time  stipulated  in
Article 30.8,  the other Party having  appointed an  arbitrator,  such appointee
shall be the sole arbitrator.

<PAGE>

30.4

Except as  otherwise  provided  herein,  the  arbitration  shall be conducted in
accordance with and subject to the rules of the American Arbitration Association
("AAA"),   including  the  AAA's  Supplementary   Procedures  for  International
Commercial  Arbitration  and shall be held in Washington,  District of Columbia,
USA. The Parties may be represented by persons of their choice.

30.5

The applicable law governing this  arbitration  proceeding  shall be exclusively
the United States Arbitration Act, 9 U.S.C., Section 1 et seq.

30.6

Except as provided in this Article 30.6 with respect to  enforcement of arbitral
awards, neither Party shall be entitled to maintain any action at law or suit in
equity in respect to matters  covered by this Article 30; the exclusive means of
resolving  all such matters shall be the  arbitration  process set forth in this
Article 30. The award of the arbitral tribunal shall be final and binding on the
Parties  hereto,  and,  upon  application  duly  made  to a court  of  competent
jurisdiction by a Party hereto, judgment thereon shall be entered in such court.

30.7

Pending a decision  by the  arbitrators  as  referred  to in this  Article,  the
Contractor shall, unless directed otherwise by ORION in writing,  fulfill all of
its obligations  under the ORION 2 Contract,  including,  if and so far as it is
reasonably  practicable,  the  obligation  to take  steps  necessary  during the
arbitration  proceedings  to ensure that the Work will be  Delivered  within the
time stipulated or within such extended time as may be allowed under the ORION 2
Contract,  provided  always ORION shall  continue to make payments  therefore in
accordance with the ORION 2 Contract.

30.8

The  following  time  limits  shall be  observed  in respect to any  arbitration
referred to in this Article:

(a)      either  Party may demand  arbitration  in  writing  after the period of
         twenty (20) Calendar  Days referred to in Article 30.1 has expired,  or
         such other time period as may be specified in the ORION 2 Contract;

(b)      each Party shall  appoint its  arbitrator  within  twenty (20) Calendar
         Days of receipt of the AAA acknowledgment of a demand for arbitration;

<PAGE>

(c)      the two appointed arbitrators shall appoint a third arbitrator within a
         further  twenty (20) Calendar Days from the time  stipulated in Article
         30.8(b) (unless the two arbitrators agree to an extension not to exceed
         an additional twenty (20) Calendar Days); and

(d)      any  decision by an  arbitrator(s)  referred to in Article 30.2 or 30.3
         shall  be made  within  six (6)  months  from the date on which a Party
         demands arbitration or within such extended period as the arbitrator(s)
         may allow.

30.9

The fees and expenses of the arbitrator(s) and AAA administrative fees and costs
shall be borne  equally by the  Parties.  Each Party shall bear the costs of its
own legal representation,  witnesses produced by such Party, document production
and other discovery expenses.

30.10

In the case of any  dispute  pursuant  to  Article  9  hereof,  the  arbitration
tribunal  shall  award  prejudgment  interest on any amount  which the  tribunal
determines is owing from one Party to the other,  such interest to be calculated
at an annual rate equal to the Prime Rate then in effect for each  Calendar  Day
from  forty-five  (45) Calendar Days following the date of loss or from the date
of the filing for  arbitration,  whichever is the  earlier,  until the date full
payment is made.


31.      CONTRACT MANAGEMENT

31.1     In General

The Contractor  shall conduct  meetings,  reviews and analyses and shall prepare
and deliver reports and documentation as provided in Part 2(A).

31.2     Approvals and Acceptances

No approval,  acceptance,  waivers or  deviations  prior to Final  Acceptance by
ORION of any  action  or item  under  the ORION 2  Contract  shall  waive any of
ORION's  contractual  rights with regard to Final  Acceptance of any Deliverable
Item.

31.3     ORION 2 Contract Monitoring

31.3.1

During the  performance of the ORION 2 Contract,  the Contractor and ORION shall
each designate a person to be its Contract Program  Manager,  whose duties shall
be to  monitor  the  Work  and to act as  liaisons  between  the  Parties.  Such
monitoring by ORION shall not relieve the

<PAGE>

Contractor from performing the ORION 2 Contract in accordance with its terms and
shall not in any way detract from the  Contractor's  position as an  independent
contractor.

31.3.2

Any Consultant who performs services on behalf of ORION shall have access to the
Work and data and may witness tests in the same manner as ORION,  as provided in
Article 7. ORION's Consultants shall execute non-disclosure  agreements with the
Parties and, as necessary, with Subcontractors.

31.3.3

ORION's  Consultants  shall have no  authority to change any part of the ORION 2
Contract, or to direct the Contractor or to bind ORION. Any changes to the ORION
2  Contract  shall be made only in  accordance  with  Article  27,  but  ORION's
Consultants  may participate in discussions  regarding such changes.  Any action
taken by the Contractor prior to the resolution of any such question shall be at
the Contractor's own risk and expense.


32.      SECURITY INTEREST AND FINANCIAL INFORMATION

The  Contractor  agrees to  cooperate  with ORION and  endeavor in good faith to
provide  security  interests  in the Work after ORION  exercises  the Option and
periodic financial reports concerning the Contractor's financial status, if such
are required by any Financing  Entity,  and to negotiate in good faith the terms
upon which such security interests are to be provided and the  content/frequency
of such financial reports.


33.      ASSIGNMENT

33.1

The Contractor shall not, without the prior written approval of ORION and except
on such terms and  conditions  as are  determined  in writing by ORION,  assign,
mortgage,  charge or encumber the ORION 2 Contract or any part  thereof,  any of
its rights, duties, or obligations thereunder, the Work or any monies payable or
to become payable under the ORION 2 Contract,  to any person, except to a parent
or a wholly-owned  direct or indirect  subsidiary company of the Contractor,  or
for the purpose of corporate merger, recapitalization or reconstruction.

33.2

The  Parties  recognize  that this  ORION 2  Contract  may be  financed  through
external sources.  The Contractor agrees to work  cooperatively to negotiate and
execute such documents as may be reasonably required to implement such financing
(other than any document  requiring the  subordination  or delay of any payments
required to be paid  hereunder)  and agrees ORION shall

<PAGE>

have the right to assign its  rights,  duties or  obligations  under the ORION 2
Contract  to ORION  Network  Systems,  Inc.,  any ORION  subsidiary,  and to any
Financing Entity, subject to prior notice to the Contractor.

33.3

Provided that the Contractor's rights under the ORION 2 Contract,  including the
ability to perform the Work, in the Contractor's  reasonable  judgment,  are not
and would not be  adversely  affected,  the  Contractor  shall not  withhold its
approval  to any  assignment,  mortgage,  charge  or  encumbrance  of any of the
rights, duties or obligations of ORION under the ORION 2 Contract.

33.4

Assignment of this ORION 2 Contract shall not relieve the assigning Party of any
of its  obligations  nor confer upon the  assigning  Party any rights  except as
provided in the ORION 2 Contract.


34.      NOTICES AND DOCUMENTATION

34.1

Any notice or other communication  required or permitted pursuant to the ORION 2
Contract  including  invoices shall be  sufficiently  given if given in writing,
delivered  personally or by pre-paid  registered  air mail,  or by telex,  or by
facsimile to the following address:


<PAGE>

In the case of ORION:

         ORION SATELLITE CORPORATION
         2440 Research Boulevard
         Suite 400
         Rockville, Maryland  20850
         United States of America

         For  the  attention  of  Dr.  Denis  Curtin,   Senior  Vice  President,
Engineering and Satellite Operations,  for technical,  management and commercial
matters and
         Richard H. Shay,  Vice  President  of Corporate  and Legal  Affairs for
contract matters

                  or such other  persons at such  address as ORION may from time
                  to time direct in writing for specific purposes.

with a copy to:

         Shaw, Pittman, Potts & Trowbridge
         2300 N Street, N.W.
         Washington,  DC  20037
         United States of America

         For the  attention  of Jane  Sullivan  Roberts for notices  relating to
matters under Articles 6, 9, 15 and 21.

In the case of Contractor:

         MATRA MARCONI SPACE UK LIMITED
         Gunnels Wood Road
         Stevenage, Hertfordshire SG1 2AS
         England

         For the attention of Mr. A Haigh,  ORION Project  Manager for technical
or management matters
         For the attention of Mr. Arthur Blick, Commercial Manager


34.2

A notice  given  either by certified  mail,  or by confirmed  facsimile or telex
followed the same day by the  original  document via  certified  mail,  shall be
deemed to be a notice in writing  for the  purpose  of the ORION 2 Contract  and
shall be deemed to have been given upon receipt by the sender of the answer-back
code of the recipient at the conclusion of the telex or by the actual receipt of
the letter or of the  facsimile  confirmed  by its  answer-back  code,  provided
transmission

<PAGE>

is completed  during normal business hours on a Business Day in the place of the
addressee  and if it is not so completed  then upon the  commencement  of normal
business  hours on the next  Business  Day in the place of the  addressee  after
transmission is completed.

34.3

The Contractor  agrees that any communication or notice required or permitted to
be given by ORION to the  Contractor  which is given by the  Program  Manager or
Contracts Manager or has, prior to the execution of the ORION 2 Contract been so
given, shall be deemed to have been given by ORION.

34.4

Without  affecting the  provisions  of Article 34.2,  the Parties agree that all
correspondence  on contract  matters  shall,  if sent by confirmed  facsimile or
telex, be followed, as soon as reasonably  practicable after the sending of such
correspondence, by the original document via first-class mail.


35.      SEVERABILITY AND WAIVER

35.1

In the event any one or more of the  provisions  of the ORION 2 Contract  shall,
for any reason, be held to be invalid or unenforceable, the remaining provisions
of the ORION 2 Contract  shall be unimpaired,  and the invalid or  unenforceable
provision shall be replaced by a mutually acceptable enforceable provision which
comes  closest  to the  intention  of the  Parties  underlying  the  invalid  or
unenforceable provision.

35.2

A waiver of any breach of a provision  hereof  shall not be binding  upon either
Party  unless  the  waiver is in writing  and such  waiver  shall not affect the
rights of the Party not in breach with respect to any other or future breach.


36.      COMPLIANCE WITH THE LAW, PERMITS AND LICENSES

36.1

The Contractor  shall, at its own expense,  comply with the  requirements of any
laws of any  place  in  which  any  part of the  Work is to be done and with the
lawful  requirements  of  public,  municipal  and other  authorities  in any way
affecting or applicable to any Work.

<PAGE>

36.2

The Contractor shall at its own expense obtain any permits, licenses,  approvals
or certificates,  including any required for import or export, necessary for the
performance of the Work under the ORION 2 Contract. The Contractor shall, at its
own  expense,  perform  the  Work  in  accordance  with  the  conditions  of any
applicable permits or licenses,  approvals or certificates.  ORION agrees to use
its best  efforts in assisting  the  Contractor  to obtain any of the  documents
referred to above which are issued by a United States authority.

36.3

ORION  shall  not be  responsible  in any way for the  consequences,  direct  or
indirect,  of any violation by the  Contractor or its  Subcontractors,  or their
officers,  employees,  agents or  servants  of any law of a country in which the
Work is performed, or of any country whatsoever.


37.      APPLICABLE LAW; SUBMISSION TO JURISDICTION; APPOINTMENT OF
         AGENT FOR ACCEPTANCE OF SERVICE; INTERPRETATION AND
         LANGUAGE

37.1

Except as  provided  in  Article  30.5  hereof,  the ORION 2  Contract  shall be
governed  by and  interpreted  in  accordance  with  the  laws of the  State  of
Maryland,  United  States of  America,  without  regard to the  conflict of laws
provisions thereof.

37.2

The Contractor appoints Powell,  Goldstein,  Frazer & Murphy,  attention J. Gail
Bancroft, 1001 Pennsylvania Avenue, N.W., Washington,  D.C. 20004, United States
of  America  as its agent for  acceptance  of  service  of process in the United
States.  Contractor shall notify ORION promptly in writing of the appointment by
Contractor of a new agent or of a change in the agent's address.

37.3

In the ORION 2 Contract unless the context otherwise requires:

i)       words of any gender include any other gender;

ii)      the singular includes the plural and vice versa;

iii)     "person" includes a reference to a partnership, firm, or any other body
         of  persons,   company  or   organization   whether   incorporated   or
         unincorporated.

<PAGE>

37.4

Any heading to this ORION 2 Contract  shall not be used in the  construction  or
interpretation of the ORION 2 Contract.

37.5

All  communications  between the Parties to the ORION 2 Contract shall be in the
English language.

37.6

Any  reference to  liquidation  damages means agreed  liquidated or  ascertained
damages and not a penalty.


38.      SURVIVAL

Any  provision  of the ORION 2 Contract  which can be  reasonably  construed  to
survive the  expiration or  termination  of the ORION 2 Contract for any reason,
including but not limited to the indemnification and confidentiality obligations
set forth herein,  shall survive such  expiration or  termination of the ORION 2
Contract.


39.      KEY PERSONNEL

39.1

The Contractor will assign properly  qualified and experienced  personnel to the
program  contemplated  under the ORION 2  Contract.  Personnel  assigned  to the
following positions shall be considered "Key Personnel":

a)       The Contractor's Project Manager
b)       The Contractor's Contracts Manager
c)       The Contractor's PA Manager
d)       The Contractor's Resident Manager at NEC
e)       The Contractor's Engineering Manager
f)       The NEC Project Manager
g)       The Contractor's AIT Manager

ORION shall have the right to approve the Contractor's Project Manager and NEC's
Project  Manager which approval shall not be  unreasonably  withheld or delayed.
Other Key Personnel shall not be assigned to other duties without the Contractor
giving prior written notice to and consulting with ORION.

<PAGE>

The  Contractor  shall provide a chart to ORION of the Program Key Personnel and
shall keep such chart current.

39.2

Subject to ORION's  right to approve the selection of the  Contractor's  Project
Manager pursuant to Article 39.1, in the event that an employee  included in the
list of Key Personnel  becomes  unavailable for work under the ORION 2 Contract,
the  Contractor  shall  replace  him by a  person  of  substantially  equivalent
qualifications and abilities.


40.      PROGRESS REPORTS

40.1

The  Contractor  shall  render such  reports as to the  progress of the Work and
attend such  meetings  with ORION as specified in Part 2(A)  (Statement of Work)
and Part 2(B) (Contract Documentation Requirements List).


41.      LAUNCH VEHICLE AGENCY

41.1

41.1.1 The  Contractor  hereby  agrees that ORION shall have the right to direct
the  Contractor  to terminate  the Launch  Agreement at any time,  in which case
ORION shall be liable for the termination  charges  specified in the termination
liability  schedule set forth in Table 21.6 of the Launch Agreement and attached
hereto as Annex C.

41.1.2.  The Contractor  hereby agrees that ORION shall have the right to direct
the Contractor to terminate the Launch Agreement,  in whole or, where severable,
in part and for ORION to receive  directly from the Launch Vehicle Agency a full
refund of all amounts previously paid by ORION (excluding  postponement fees and
retanking  charges) (or where the Launch Vehicle Agency provides such amounts to
the  Contractor,  the  Contractor  shall pay over such  amounts to ORION with no
right of offset) where there has been more than three hundred  sixty-five  (365)
cumulative Calendar Days of Launch postponement by the Launch Vehicle Agency. In
the event that, as a result of ORION  exercising such right,  there is any delay
in the performance of the Work,  such delay shall  constitute an Excusable Delay
and the  provisions of Article 12 hereof shall be  applicable.  ORION's right to
direct the  Contractor to terminate  the Launch  Agreement is  conditional  upon
receipt of the  Contractor's  written  notification of a Launch  postponement or
upon the  occurrence  of a single or  cumulative  delays by the  Launch  Vehicle
Agency which exceed three hundred  sixty-five  (365) Calendar  Days.  ORION must
direct the Contractor to terminate  within sixty (60) Calendar Days of the first
of the two events  above or must waive its right to direct  the  termination  of
that Launch  under this Article  unless  further  delayed by the Launch  Vehicle
Agency.

<PAGE>

41.2

The Launch Vehicle Agency shall provide such insurance as required by the United
States  Department  of  Transportation  for  loss or  damage  to  United  States
Government  property  resulting from  activities to be carried out in connection
with Launches to be provided under the ORION 2 Contract. In consideration of and
conditioned upon a reciprocal waiver by the United States Government, both ORION
and the Contractor agree to waive any claim against the United States Government
or its agencies for any property damage or loss they sustain or for any personal
injury  to,  death of, or any  property  damage or loss  sustained  by their own
employees.

41.3

The Launch  Vehicle  Agency has executed  agreements  with various United States
Government agencies for use of Government-owned property and facilities relating
to the production of launch vehicles and launch operations at Cape Canaveral Air
Station  (CCAS) in  Florida.  ORION  agrees  that it will comply with the United
States  Government's  laws and  regulations  as they  relate to  ORION-furnished
property and personnel,  and those  agreements  relating  directly to the United
States expendable launch vehicle program. The Contractor will request the Launch
Vehicle  Agency to  furnish  copies of such  agreements  to ORION  upon  ORION's
request.  ORION will  indemnify the  Contractor  for any ORION  violation of the
laws,  regulations  or agreements as specified  herein.  In  furtherance  of the
foregoing,  the Parties shall, before Launch,  execute and deliver the Agreement
for Waiver of Claims and Assumption of Responsibility, the execution of which is
required by the United  States  Department of  Transportation  as a condition of
granting the  Contractor's  license to conduct launch  activities and launch the
ORION 2 Spacecraft.

41.4

On or  before  the  last  day of  the  twenty-second  (22nd)  month  after  NPD,
Contractor,  acting  upon the  advice  and  with the  consent  of  ORION,  shall
cooperate in good faith with the Launch Vehicle Agency to finalize the selection
of a Launch Date within the Launch  Slot.  The Parties  recognize  that,  if the
Contractor  and the Launch  Vehicle  Agency cannot  mutually agree upon a Launch
Date, the Launch Vehicle Agency may select the Launch Date,  taking into account
all  available  launch  opportunities  and  the  Contractor's  requirements  and
interests.


42.      GUARANTEE OF CONTRACTOR OBLIGATIONS

The  Contractor  shall  provide an  unconditional  corporate  guarantee by Matra
Marconi Space NV and, if required,  other  entities  acceptable to any Financing
Entity, in respect of its obligations under the ORION 2 Contract.

<PAGE>

43.      INTEREST

Any interest due under the ORION 2 Contract  shall be  calculated  in accordance
with LIBOR plus three percent (3%).

44.      COUNTERPARTS


This Agreement may be executed in a number of counterparts,  each of which shall
be  deemed  an  original  and all of  which  shall  constitute  one and the same
instrument.




IN WITNESS WHEREOF,  the President of ORION SATELLITE  CORPORATION,  the General
Partner of International  Private Satellite  Partners,  L.P., has hereto set his
hand for and on behalf of International Private Satellite Partners, L.P., on the
29th day of January 1997,


and a Director of MATRA MARCONI SPACE UK LIMITED has hereto set his hand for and
on behalf of MATRA MARCONI SPACE UK LIMITED on the 28th day of January 1997.


INTERNATIONAL PRIVATE SATELLITE             MATRA MARCONI SPACE UK LIMITED
PARTNERS, L.P.

By:  Orion Satellite Corporation, its General Partner

By                                          By
  ---------------------------------           ---------------------------------
   W. Neil Bauer, President and CEO               Armand Carlier, Chairman




<PAGE>

                                     Annex A


                           FORM OF REQUEST FOR PAYMENT
                 (Terms of this Form will be revised to conform
              to the requirements of the ORION 2 Credit Agreement)



[Date]


ORION SATELLITE CORPORATION
2440 Research Boulevard
Suite 400
Rockville, Maryland  20850
United States of America

Attention:  [                      ]


         RE:      Part 1(A) ORION 2 Spacecraft  Purchase  Contract,  dated as of
                  [...] (as amended, supplemented or modified from time to time,
                  the  "ORION  2  Contract"),   between   INTERNATIONAL  PRIVATE
                  SATELLITE PARTNERS, L.P., d/b/a ORION ATLANTIC, L.P. ("ORION")
                  and MATRA MARCONI SPACE UK LIMITED (the "Contractor")


Ladies and Gentlemen:


This  Request for  Payment is  delivered  to ORION  pursuant to Article 6 of the
ORION 2 Contract and  constitutes  the  Contractor's  request for payment in the
amount of $ [...] for Milestone  Payment No. ________,  and Progress Payment No.
__________.

Very truly yours,


MATRA MARCONI SPACE UK LIMITED



By:
Title:


<PAGE>

                              Appendix I to Annex A

                         Form of Contractor Certificate
                 (Terms of this Form will be revised to conform
              to the requirements of the ORION 2 Credit Agreement)


Reference:        Milestones Payment No. _____
                  Progress Payment No. _____



                                                    ________________ ____, 19___


         RE:      ORION  2  Spacecraft  Purchase  Contract,  with  International
                  Private Satellite  Partners,  L.P. d/b/a Orion Atlantic,  L.P.
                  (as amended,  supplemented or modified and in effect from time
                  to time the "ORION 2 Contract")

ORION SATELLITE CORPORATION
2440 Research Boulevard
Suite 400
Rockville, Maryland  20850
United States of America

Attention:  [                      ]

Ladies and Gentlemen:

This  Certificate  is delivered to you in connection  with the ORION 2 Contract.
Each  capitalized  term used  herein and not  otherwise  defined  shall have the
meaning assigned thereto in the ORION 2 Contract.

We hereby certify, after due inquiry, that, as of the date hereof:

1.       The ORION 2  Contract  is in full  force and  effect  and except as set
         forth in  Schedule  I hereto,  has not been  amended,  supplemented  or
         otherwise modified,  and attached hereto are true, correct and complete
         copies  of all  Amendments  to  the  ORION  2  Contract  or  any  other
         modification  or  amendment  to the  ORION 2  Contract  not  heretofore
         delivered to the Financing Entity.

2.       Except as set forth in Schedule I hereto, we are not aware of any event
         that  has   occurred   or  failed   to  occur   which   occurrence   or
         non-occurrence,  as the case may be,  could

<PAGE>

         reasonably  be  expected to cause the date of Final  Acceptance  of the
         ORION 2 Spacecraft to occur later than the Delivery Date therefor.

3.       Except as set forth in Schedule I hereto,  no event or condition exists
         that  permits or  requires  us to  cancel,  suspend  or  terminate  our
         performance  under the ORION 2 Contract  or that  could  excuse us from
         liability for non-performance thereunder.

4.       Except with respect to amounts that are the subject of a dispute  (such
         amounts and such  disputes  being  described  in  reasonable  detail in
         Schedule II hereto),  all amounts due and owing to us have been paid in
         full  through  the  date  of  the  immediately  preceding  Construction
         Certificate  and are not overdue.  To the extent payment to us has been
         or will be made as  specified  in this  and the  immediately  preceding
         Contractor  Certificates,  there  are  and  will  be no  mechanics'  or
         materialsmen's   liens  except  Permitted  Liens  (as  defined  in  the
         Financing  Agreements)  on the  Project  (as  defined in the  Financing
         Agreements), the Collateral (as defined in the Financing Agreements) or
         on any  other  property  in  respect  of the work  which has or will be
         performed under the ORION 2 Contract.

5.       a.       The amount  contained in the Request for Payment  delivered to
                  you  concurrently  herewith  in  accordance  with the terms of
                  Article  6.1.1(b)  of the ORION 2 Contract  represents  monies
                  owed to us in respect of Milestone Payment No. _____.

         b.       The amount  referred to in paragraph (a) above was computed in
                  accordance with the terms of the ORION 2 Contract.

         c.       The Milestone to which Milestone  Payment No. ____ relates has
                  been completed in accordance with the ORION 2 Contract.*

6.       a.       The  amount  of  the  Request  for  Payment  delivered  to you
                  concurrently  herewith in  accordance  with the  provisions of
                  Article  6.1.1(a)  of the ORION 2 Contract  represents  monies
                  owed to us in respect of Progress Payment No. ____.

         b.       The amount  referred to in paragraph (a) above was computed in
                  accordance with the ORION 2 Contract.*



<PAGE>



7.      An amount of $_________ is due to us and  represents  monies owed to us
         in respect of the principal  amounts due and payable on the outstanding
         Note.*


Very truly yours,

MATRA MARCONI SPACE UK LIMITED


By:
Title:

*        Include when relevant


<PAGE>




                                                                   SCHEDULE I to

                                                           Appendix I to Annex A


List of Exceptions:

Amendments to ORION 2 Spacecraft Purchase Contract:





Exceptions Affecting Final Acceptance Date:





Exceptions Affecting Contractor's Performance:


<PAGE>




                                                                  SCHEDULE II to

                                                           Appendix I to Annex A


List of Disputes:




<PAGE>




                                     ANNEX B


INTER-PARTY WAIVER OF LIABILITY PROVISIONS IN LAUNCH AGREEMENT

<PAGE>





                      LAUNCH AGREEMENT TERMINATION CHARGES



<PAGE>



                            COMMERCIAL-IN-CONFIDENCE


      ---------------------------------------------------------------------



                      ORION 2 SPACECRAFT PURCHASE CONTRACT



                                    PART 1(B)



                            ORION 2 PAYMENT PLANS AND
                          TERMINATION LIABILITY AMOUNTS


      ---------------------------------------------------------------------



<PAGE>



15 January 1997                      CONFIDENTIAL                        Issue 4




                                    CONTENTS
                                    --------



Section           Description  Page No.
-------           -----------  --------

1.                Progress Payment Plan                                     2

2.                Milestone Payment Plans                                   4

3.                Termination Liability Amounts                             7
























<PAGE>

15 January 1997                      CONFIDENTIAL                        Issue 4







                                 ORION SATELLITE
                                  CORPORATION


                                    PART 2(A)

                            ORION 2 STATEMENT OF WORK


                                    Issue: 3
                               Dated: 28 June 1996










Signed:           Date:
On behalf of ORION Satellite Corporation




Signed:           Date:
On behalf of Matra Marconi Space UK Limited




<PAGE>
15 January 1997                      CONFIDENTIAL                        Issue 4


                                TABLE OF CONTENTS

1.   INTRODUCTION..............................................................1

     1.1   Scope...............................................................1
     1.2   Responsibilities....................................................1

2. EQUIPMENT, DOCUMENTATION, AND SERVICES......................................2

     2.1   Introduction........................................................2
     2.2   Deliverable Equipment...............................................3
           2.2.1  Flight Spacecraft............................................3
           2.2.2  Mission Specific Hardware and Software.......................3
           2.2.3  Optional Networking Transponders.............................3
           2.2.4  Optional Spacecraft Dynamic Simulator........................3
     2.3   Deliverable Documentation...........................................4
     2.4   Services............................................................4
           2.4.1  Launch Support Services......................................4
           2.4.2  Launch Services..............................................5
           2.4.3  Reserved.....................................................5
           2.4.4  Mission Support Services.....................................5
           2.4.5  Operations Training..........................................5

3.   PROGRAM MANAGEMENT........................................................6

     3.1   Introduction........................................................6
           3.1.1  Scope........................................................6
           3.1.2  Responsibilities.............................................6
           3.1.3  Program Management Plan......................................7
     3.2   Program Management Interface........................................8
     3.3   Documentation and Data Management...................................8
           3.3.1  General......................................................8
           3.3.2  Documentation Center.........................................9
           3.3.3  Data Management Plan.........................................9
           3.3.4  Documentation Submission Criteria............................9
           3.3.5  Revision and Maintenance of Documentation....................9
           3.3.6  Monthly Documentation Status Report..........................9
     3.4   Meetings............................................................9
           3.4.1
     Inaugural Meeting.........................................................9
           3.4.2  Progress Meetings...........................................10
           3.4.3  Senior Management Meetings..................................10
           3.4.4  Quarterly Progress Meetings.................................10


<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4


           3.4.5  Subcontractor Progress Meetings and Other Meetings..........10
           3.4.6  Agenda Co-ordination Procedure..............................11
           3.4.7  Minutes.....................................................11
     3.5   Reviews............................................................11
     3.6   Action Item Control................................................12
     3.7   Management of Contract Changes.....................................12
     3.8   Program Planning and Status Information............................12
           3.8.1  Hardware Matrix ............................................12
           3.8.2  Qualification Status List...................................13
           3.8.3  Critical Items List.........................................13
           3.8.4  Program Schedules ..........................................13
           3.8.5  Program Progress Report.....................................14
           3.8.6  Executive Summary...........................................15
     3.9   Program Monitoring and Notification Requirements...................15
           3.9.1  ORION Representatives.......................................15
           3.9.2  Office Accommodation and Facilities.........................16
           3.9.3  Attendance at Meetings......................................16
           3.9.4  Access to Documentation.....................................16
           3.9.5  ORION Presence During Development, Qualification, and
                  Acceptance Tests............................................16
           3.9.6  Notification Requirements...................................17
           3.9.7  Material Review Board (MRB) and Failure Review
                  Board (FRB).................................................17

4.   DESIGN ACTIVITIES18

     4.1   General............................................................18
     4.2   Design Reviews.....................................................18
     4.3   Design Analyses and Study Reports..................................18
           4.3.1  Analyses at Spacecraft System Level.........................19
           4.3.1.1    Spacecraft Failure Analysis.............................19
           4.3.1.2    Dynamic Analysis........................................19
           4.3.1.3    Antenna Pointing Error Analysis.........................20
           4.3.1.4    Propellant Budget Analysis..............................21
           4.3.1.5    Mass Properties Analysis................................21
           4.3.1.6    Power Budget Analysis...................................21
           4.3.1.7    Mission Analysis........................................22
           4.3.1.8    Electromagnetic Compatibility (EMC) Analysis............22
           4.3.1.9    Environmental Effects Analysis..........................23
           4.3.1.10   Worst Case Performance Analysis.........................24
           4.3.1.11   Autonomous Commands Analysis............................24
           4.3.2      Subsystem Level Analyses................................24
           4.3.2.1    Communications Subsystem Analysis.......................25
           4.3.2.2    Telemetry, Tracking, and Command (TT&C) Subsystem
                      Analysis................................................28




<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4

           4.3.2.3    Attitude and Orbit Control Subsystem (AOCS) Analysis....29
           4.3.2.4    Propulsion Subsystem Analysis...........................30
           4.3.2.5    Power Subsystem Analysis................................30
           4.3.2.6    Thermal Subsystem Analysis..............................31
           4.3.2.7    Structure Analysis......................................32

5.  PRODUCT ASSURANCE.........................................................33

     5.1   Product Assurance Requirements.....................................33
     5.2   Quality Assurance Tasks............................................33

6.   MANUFACTURING, ASSEMBLY, INTEGRATION AND TEST............................35

     6.1   General............................................................35
     6.2   Test Plan..........................................................35
     6.3   Test Procedures, Data, and Reports.................................36
           6.3.1  Unit and Subsystem Test Procedures and Reports..............36
           6.3.2  Spacecraft Test Procedures and Reports......................37
           6.3.3  Test Data...................................................37
           6.3.4  Spacecraft Log Book.........................................38
     6.4   Test Reviews.......................................................38
     6.5   Preshipment Review.................................................39
     6.6   System and Major Subsystems Integration and Test Notification......39
     6.7   Failure  Notification..............................................39
     6.8   Electrical and Mechanical Ground Support Equipment (EGSE/MGSE).....40
     6.9   Test Equipment Requirements........................................40
     6.10  Software Requirements..............................................40
     6.11  Delivery of Drawings and Engineering Control Documents
           for Spacecraft Operation and In-Orbit Control......................40
     6.12  Secure Command System and Certification............................41

7.   LAUNCH AND MISSION SUPPORT SERVICES......................................42

     7.1   Scope..............................................................42
     7.2   Launch Vehicle Compatibility.......................................42
     7.3   Launch Support Services............................................42
           7.3.1  Spacecraft Preparation at the Launch Sites..................43
           7.3.2  Spacecraft Propellant and Pressurant........................43
           7.3.3  Support of Meetings and Reviews.............................43
     7.4   Safety.............................................................43
     7.5   Launch Services....................................................44




<PAGE>
15 January 1997                        CONFIDENTIAL                      Issue 4


     7.6   Mission Support....................................................44
           7.6.1  Scope ......................................................44
           7.6.2  Mission Support Activities..................................45
           7.6.2.1    Preparation and Definition of Mission Support Documents.45
           7.6.2.2    World-Wide Ground Segment...............................48
           7.6.2.3    Mission Support Procedures and Sequence of Events.......49
           7.6.2.4    Spacecraft/ORION SCS Compatibility......................49
           7.6.2.5    In-Orbit Test Plan and Procedure........................50
           7.6.2.6    Mission Reviews.........................................50
           7.6.2.7    Training ...............................................51
           7.6.2.7.1  Classroom Training......................................51
           7.6.2.7.2  On the Job Training.....................................52
           7.6.2.7.3  Course Materials........................................53
           7.6.2.8    Real-Time Mission Operations............................53
           7.6.2.9    Post-Mission Review.....................................53
           7.6.2.10   In-Orbit Testing and Test Report........................54
           7.6.2.11   Spacecraft Acceptance Review............................54
           7.6.2.12   Spacecraft Operational Support..........................54


8.   SHIPPING AND  TRANSPORTATION.............................................55

     8.1   Shipping  and Transportation  Plan.................................55
     8.2   Spacecraft Shipment ...............................................55

9.   OPTIONS
     9.1   Networking Transponders............................................56
     9.2   Spacecraft Dynamic Simulator Software..............................56

10.  MISSION SPECIFIC HARDWARE AND SOFTWARE ..................................57

     10.1  Command Generators.................................................57
     10.2  Propulsion Model...................................................57
     10.3  Propellant Gauging.................................................57
     10.4  Sensor Blinding Prediction Model...................................57



<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4




                                 ORION SATELLITE
                                  CORPORATION


                                    PART 2(B)

                                ORION 2 CONTRACT
                           DOCUMENTATION REQUIREMENTS
                                   LIST (CDRL)



                                    Issue: 2
                               Dated: 28 June 1996







   Signed:        Date:
   On behalf of ORION Satellite Corporation




   Signed:        Date:
   On behalf of Matra Marconi Space UK Limited



<PAGE>



15 January 1997                        CONFIDENTIAL                      Issue 4



                           ORION SATELLITE CORPORATION


                                    PART 3(A)

                        ORION 2 SPACECRAFT SPECIFICATIONS



                                     Issue:3
                               Dated: 28 June 1996









Signed:            Date:
On Behalf of ORION Satellite Corporation




Signed:            Date:
On Behalf of Matra Marconi Space UK Limited



<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4


                                TABLE OF CONTENTS

1. INTRODUCTION................................................................
      1.1 Scope and Purpose....................................................
      1.2 Description of the ORION 2 Spacecraft................................
      1.3 General Requirements.................................................1
2. SPACECRAFT SYSTEM CHARACTERISTICS...........................................3
      2.1 Life.................................................................3
               2.1.1 Manoeuver Life............................................3
               2.1.2 Orbital Life..............................................3
      2.2 Launch Configuration.................................................3
      2.3  Spacecraft Reliability and Quality Assurance
               Requirements....................................................3
      2.5 General Spacecraft Design Considerations.............................6
               2.5.1 Configuration.............................................6
               2.5.2 Maintainability, Interchangeability, and
                       Accessibility...........................................6
               2.5.3 Mechanical Design Criteria for Units and Assemblies.......7
               2.5.4 Thermal Design Criteria for Units and
                       Assemblies..............................................7
               2.5.5 Design Criteria for Electronic Units and Onboard
                       Software................................................7
               2.5.6 Use of Connectors.........................................8
               2.5.7 Spacecraft Testing Via the Telemetry System...............8
               2.5.8 Hard-line Connections for Communications and
                      TT&C Subsystem Testing...................................8
               2.5.9 Insulation of Conductors..................................8
               2.5.10 Radiation Environment....................................9
               2.5.11 Design Considerations Associated with Charging
                       Phenomena...............................................9
               2.5.12 Zero-g Testing..........................................11
               2.5.13 Operation Following Storage.............................11
               2.5.14 Launch Windows and Mission Profile Constraints..........11
               2.5.15 Telemetry Transmitters Status During Launch.............12
               2.5.16 Helium Pressurant Venting (if applicable)...............12
               2.5.17 Orbit Control Maneuvers.................................12
               2.5.18 Operation in Inclined Orbit.............................12
               2.5.19 Attitude Control Failure Mode Recovery and Continued
                       Operation..............................................12
      2.6 Definition of Coordinate Axes and Attitude Angles...................13
      2.7 Antenna Beam Pointing Accuracy......................................13
      2.8 Minimum Performance and Defect Criteria.............................15
3.0 COMMUNICATIONS SUBSYSTEM..................................................16





<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4


      3.1 General.............................................................16
               3.1.1 Definitions..............................................16
               3.1.2 Conditions for Specification.............................19
               3.1.3 Primary Transmission Modes...............................20
      3.2 Coverage............................................................20
               3.2.1 Coverage Regions.........................................20
               3.2.2 Beams....................................................22
      3.3 Polarization........................................................27
               3.3.1 Orthogonality............................................27
               3.3.2 Receive Beam Isolation...................................28
               3.3.3 Transmit Beam Isolation..................................28
      3.4 Capacity............................................................30
      3.5 Frequency Plan......................................................31
      3.6 Communications Subsystem and Antenna Beam Interconnectivity.........33
               3.6.1 Communications Subsystem Configuration...................33
               3.6.2 Antenna Beam Interconnectivity...........................33
      3.7 Input Characteristics...............................................34
               3.7.1 Receive Sensitivity (G/T)................................34
               3.7.2 Gain and Level Control...................................37
               3.7.2.1  Fixed Gain Mode.......................................37
               3.7.2.2  Automatic Level Control Mode..........................37
               3.7.3  Transponder Gain........................................38
               3.7.3.1  FG Mode...............................................38
               3.7.3.2  ALC Mode..............................................38
               3.7.4 Drive Conditions.........................................38
               3.7.4.1 Overdrive Capability...................................38
               3.7.4.2 Overdrive Damage Limit.................................39
               3.7.4.3 Pulsed Transient Response..............................39
               3.7.5 Receive Rejection........................................39
               3.7.6 Linearity of the Common Receive Section..................40
               3.7.7 Interference from Command Carrier........................40
      3.8 Output Characteristics..............................................41
               3.8.1 Effective Isotropic Radiated Power (EIRP)................41
               3.8.2 Spurious Outputs.........................................45
               3.8.3 Spurious Modulation......................................46
               3.8.4 AM/AM Transfer...........................................46
               3.8.5 AM/FM Transfer...........................................48
               3.8.5.1 Continuous Mode........................................48
               3.8.5.2 Pulsed Level...........................................48
               3.8.6 Passive Intermodulation..................................48
               3.8.7 Multipaction Requirements................................48
      3.9 Transfer Characteristics............................................48
               3.9.1 Gain Versus Frequency....................................49
               3.9.2 Gain Slope...............................................51


<PAGE>
15 January 1997                        CONFIDENTIAL                      Issue 4


               3.9.3 Group Delay Versus Frequency.............................51
               3.9.4 Group Delay Slope........................................53
               3.9.5 Group Delay Stability....................................53
               3.9.6 Group Delay Ripple.......................................53
               3.9.7 Phase Linearity and AM/PM Conversion Coefficient.........53
               3.9.8 AM/PM Transfer Coefficient...............................54
               3.9.9 Amplitude Linearity......................................54
               3.9.10 Frequency Stability.....................................55
               3.9.11 Out-Of-Band Response....................................55
      3.10 Cessation of Emissions.............................................56
      3.11 Traffic Routing....................................................56
      3.12 Redundancy.........................................................57
      3.13 Power Amplifiers...................................................57
      3.13.1 Linearized TWTAs.................................................57
               3.13.2 TWTA Auto-Restart Capability............................57
      3.14 TT&C Interface.....................................................58
               3.14.1 Command Requirements....................................58
               3.14.2 Telemetry Requirements..................................58
4.0 TELEMETRY, TRACKING, AND COMMAND (TT&C)...................................64
      4.1 Telemetry...........................................................64
               4.1.1 Functional Requirements..................................64
               4.1.1.1 Purpose................................................64
               4.1.1.2 Function...............................................65
               4.1.1.3 Operation..............................................65
               4.1.1.4 Interaction with the Communications Subsystem..........65
               4.1.1.5 Redundancy.............................................65
               4.1.1.6 Interfaces.............................................66
               4.1.1.6.1 All Subsystems.......................................66
               4.1.1.6.2 Communications Subsystem.............................67
               4.1.1.6.3 Telemetry, Tracking and Command Subsystem............67
               4.1.1.6.4 Attitude and Orbit Control Subsystem.................68
               4.1.1.6.5 Propulsion Subsystem.................................69
               4.1.1.6.6 Power Subsystem......................................69
               4.1.1.6.7 Thermal Subsystem....................................70
               4.1.1.6.8 Deployment and Pointing Mechanisms...................70
               4.1.1.7 Accuracy...............................................71
               4.1.1.8 Data Channel Dynamic Range.............................71
               4.1.1.9 Spare Capacity.........................................72
               4.1.2 RF Parameters............................................72
      4.2 Command.............................................................73
               4.2.1  Functional Requirements.................................73




<PAGE>
15 January 1997                        CONFIDENTIAL                      Issue 4

               4.2.1.1 Purpose................................................73
               4.2.1.2 Function...............................................73
               4.2.1.3 Operation..............................................73
               4.2.1.4 Isolation..............................................73
               4.2.1.5 Redundancy.............................................74
               4.2.1.6 Interfaces.............................................74
               4.2.1.7 System Test Considerations.............................74
               4.2.1.8 Spare Capacity.........................................75
               4.2.2 RF Parameters............................................75
               4.2.3 Baseband Characteristics.................................75
               4.2.3.1 Error Prevention and Detection.........................76
               4.2.3.2 Command Security.......................................76
               4.2.3.3 Command Acceptance Probability.........................77
      4.3 Ranging.............................................................77
               4.3.1 Functional Requirement...................................77
               4.3.1.1 Purpose................................................77
               4.3.1.2 Function...............................................77
               4.3.1.3 Operation..............................................78
               4.3.1.4 Isolation..............................................78
               4.3.2 Performance Requirements.................................78
5. ATTITUDE AND ORBIT CONTROL SUBSYSTEM (AOCS)................................79
      5.1 Functional Description..............................................79
      5.2 Subsystem Performance and Design Requirements.......................79
               5.2.1 Attitude Determination...................................79
               5.2.1.1 Transfer Orbit.........................................79
               5.2.1.2 Synchronous Orbit......................................80
               5.2.2 Attitude Control.........................................80
               5.2.2.1 Parking Orbit (If Applicable)..........................80
               5.2.2.2 Transfer Orbit.........................................80
               5.2.2.3 Transfer to Geosynchronous Orbit and Initial
                       Acquisition............................................80
               5.2.2.4 On Orbit Control and Antenna Pointing Mode.............80
               5.2.3 Reacquisition............................................81
               5.2.4 Ground Control...........................................81
               5.2.4.1 Ground Control Command Capability......................81
               5.2.5 Safe Modes...............................................81
               5.2.6 Special Features.........................................82
               5.2.6.1 Antenna Pattern Measurement Capability.................82
               5.2.6.2 Control Bias Capability................................82
               5.2.6.3 AOCS Switching.........................................82
               5.2.6.4 Control Electronics Fault Protection...................82
               5.2.6.5 Dynamic Stability......................................83
               5.2.7 Subsystem Configuration and Interfaces...................83
               5.2.7.1 Redundancy.............................................83
               5.2.7.2 TT&C Interfaces........................................83



<PAGE>
15 January 1997                        CONFIDENTIAL                      Issue 4


               5.2.7.3 Propulsion Interfaces..................................83
6. PROPULSION SUBSYSTEM.......................................................84
      6.1 Functional Description..............................................84
      6.2 Design Requirements.................................................84
      6.3 Redundancy..........................................................86
      6.4 Maneuver Life and Propellant Loading................................87
               6.4.1 General Requirements.....................................87
               6.4.2 Propellant Budgeting Methodology.........................87
               6.4.2.1 Actual Hardware Performance Test Data..................87
               6.4.2.2 Inefficiencies of Operation............................88
               6.4.2.3 Inflight Performance...................................88
               6.4.2.4 Specific Maneuver Requirements.........................88
      6.5 TT&C Interfaces.....................................................89
7. POWER SUBSYSTEM............................................................90
      7.1 Functional Description..............................................90
      7.2 General Requirements................................................90
      7.3 Energy Generation...................................................91
               7.3.1 Solar Cells..............................................91
               7.3.2 Power Output.............................................91
               7.3.3 Power Transfer Assembly..................................91
      7.4 Energy Storage......................................................92
               7.4.1 Batteries................................................92
               7.4.2 Battery Charge Management................................92
               7.4.3 Cell Failure.............................................93
               7.4.4 Battery Removal and Storage..............................93
      7.5 Power Conditioning and Control......................................93
               7.5.1 Bus Configuration........................................93
               7.5.2 Failure Modes and Shutdown Sequence......................94
               7.5.3 Bus Undervoltage and Overvoltage.........................95
               7.5.4 Interaction Between the Communications and Power
                     Subsystems...............................................95
      7.6 TT&C Interfaces.....................................................95
8. THERMAL CONTROL SUBSYSTEM..................................................96
      8.1 Functional Description..............................................96
      8.2 Performance Requirements............................................96
      8.3 Subsystem Design Requirements.......................................97
                  8.3.1 Instrumentation.......................................98
                  8.3.2 Materials.............................................98
                  8.3.3 Venting...............................................98
                  8.3.4 Grounding.............................................99




<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4

                  8.3.5 Multi-Layer Insulating Blanket (MLI)..................99
                  8.3.6 Contamination Control.................................99
      8.4 TT&C  Interfaces...................................................100
9. STRUCTURE SUBSYSTEM.......................................................101
      9.1 Functional Description.............................................101
      9.2 Performance Requirements...........................................101
      9.3 Design Requirements................................................101
10 MECHANISMS................................................................103
      10.1 Design Requirements...............................................103
      10.2 TT&C Interfaces...................................................104
11. PYROTECHNIC AND ELECTROEXPLOSIVE DEVICES.................................105

Attachment:
Annex A  Radiation Environment Specification, Issue C, 13 October 1995














<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4







                                    PART 3(A)
                                     ANNEX A

                       RADIATION ENVIRONMENT SPECIFICATION

                     'REDLINED' AND AMENDED 10 OCTOBER 1995


                     'REDLINED' AND AMENDED 13 OCTOBER 1995
                     =======================================


















<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4


                                TABLE OF CONTENTS

1.    INTRODUCTION.............................................................1

2.   SYNCHRONOUS ORBIT CONDITIONS..............................................1
      2.1 Electrons............................................................1
      2.2 Protons..............................................................2
      2.3 Alpha Particles......................................................2
      2.4 Cosmic Ray Radiation.................................................3
      2.5 Ultraviolet Radiation................................................4
      2.6 Plasma...............................................................4
      2.7 Micrometeroids.......................................................5

3.   TRANSFER ORBIT CONDITIONS.................................................5
      3.1     Transfer Orbit Electron Flux Values..............................5
      3.2     Transfer Orbit Proton Flux Values................................5













<PAGE>

15 January 1997                        CONFIDENTIAL                      Issue 4






                                 ORION SATELLITE
                                  CORPORATION


                                    PART 3(B)

                               ORION 2 SPACECRAFT
                                PRODUCT ASSURANCE
                                  REQUIREMENTS


                                    Issue: 4
                             Dated: 15 January 1997








   Signed:        Date:
   On behalf of ORION Satellite Corporation




   Signed:        Date:
   On behalf of Matra Marconi Space UK Limited




      Part 3(B) ORION 2 Spacecraft Product Assurance Requirements page xvii

<PAGE>



                                  CONFIDENTIAL

28 June 1996                                                             Issue 3





                                TABLE OF CONTENTS

1.   INTRODUCTION..............................................................1

      1.1     Scope............................................................1
      1.2     Product Assurance Objectives.....................................1

2.   PRODUCT ASSURANCE REQUIREMENTS............................................3

      2.1     Product Assurance Plan...........................................3
      2.2     Organization and Management......................................3
      2.3     Reporting........................................................3
      2.4     Non-Conformance..................................................4
      2.5     Contract Change Management.......................................4
               2.5.1   Change Classification...................................4
               2.5.2   Preliminary Change Assessment...........................5
               2.5.3   Change Request (CR).....................................5
               2.5.4   Contract Change Notice (CCN)............................6
               2.5.5   Review and Approval of a Change.........................7
               2.5.6   Change Review Board.....................................7
               2.5.7   Implementation of a Change by the Contractor............8
               2.5.8   Directed Changes........................................8
               2.5.9   Go Ahead Procedure......................................8
               2.5.10  CR/CCN Log..............................................9
               2.5.11  Waivers and Deviations..................................9

3.   REVIEWS AND AUDITS.......................................................11

      3.1     Design Reviews..................................................11
               3.1.1   Review Chairperson and Review Board....................12
               3.1.2   Review Notification....................................12
               3.1.3   Data Packages..........................................12
               3.1.4   Review Procedures......................................12
               3.1.5   Review Summary.........................................13
               3.1.6   Review Completion......................................13
               3.1.7   Subsystem and Unit Design Reviews......................13
               3.1.7.1 Unit and Subsystem Preliminary Design Reviews..........14
               3.1.7.2 Unit and Subsystem Critical Design Reviews.............14
               3.1.7.3 Communications Subsystem Final Design Review...........15
               3.1.7.4 Unit Qualification Design Review.......................15
               3.1.8   Spacecraft System Design Reviews.......................15
               3.1.8.1 System Preliminary Design Review.......................16
               3.1.8.2 System Critical Design Review..........................16




<PAGE>
                                  CONFIDENTIAL

28 June 1996                                                             Issue 3

               3.1.8.3 System Final Design Review.............................16
      3.2     Test Reviews....................................................17
      3.3     Preshipment Review..............................................17
      3.4     Further Reviews and Inspections.................................18
      3.5     Design Review Documentation.....................................19
      3.6     Test Review Documentation.......................................19
      3.7     Program Audits..................................................20
      3.8     ORION Right of Access...........................................20

4.   SUBCONTRACTOR AND SUPPLIER MANAGEMENT....................................21

      4.1     Subcontractor/Supplier Product Assurance Plan...................21
      4.2     Requirements....................................................21
      4.3     Reviews and Controls............................................21

5.   RELIABILITY ASSURANCE....................................................22

      5.1     Reliability Analysis............................................22
      5.2     Parts Derating and Stress Analysis..............................23
      5.3     Failure Modes, Effects, and Criticality Analyses................23
      5.4     Worst-Case Analysis (WCA).......................................24
      5.5     Critical Items Control..........................................25
      5.6     Design Verification Matrix (DVM)................................26
      5.7     Qualification Status List (QSL).................................26

6.   QUALITY ASSURANCE........................................................27

      6.1     Quality Assurance...............................................27
      6.2     Procurement and Fabrication.....................................27
      6.3     Test and Inspection.............................................27
      6.4     Workmanship Standards...........................................28
      6.5     Quality Records and Traceability................................28
      6.6     Non-Conformance Control.........................................28
               6.6.1   Non-Conformance Reporting..............................29
               6.6.2   Non-Conformance/Failure Review and Disposition.........29
               6.6.3   Failure Analysis and Corrective Action.................29

7.   PARTS PROCUREMENT........................................................30

      7.1     Parts Procurement and Control...................................30
      7.2     Organization and Responsibilities...............................30
      7.3     Selection and Application.......................................30
      7.4     Quality Provisions..............................................31
      7.5     Radiation.......................................................32
      7.6     Lot Transfer....................................................32



<PAGE>

                                  CONFIDENTIAL

28 June 1996                                                             Issue 3


      7.7     Traceability....................................................32
      7.8     Hybrids, MCMs, Battery Cells, TWTs, and Magnetics...............32
      7.9     Traveling Wave Tube Amplifiers..................................33
      7.10     Parts Documentation............................................34

8.   MATERIALS AND PROCESSES..................................................35

      8.1     Materials and Process Control...................................35
      8.2     Organization....................................................35
      8.3     Critical Materials and Processes................................35
      8.4     Materials and Process Selection.................................35
      8.5     Materials and Process Documentation.............................36

9.   SOFTWARE QUALITY ASSURANCE...............................................37

      9.1     Software Quality Assurance Plan.................................37
      9.2     Software Development............................................37
      9.3     Configuration Control...........................................37
      9.4     Verification and Acceptance Testing.............................37
      9.5     Non-Conformance Control.........................................38

10.  CONFIGURATION MANAGEMENT.................................................39

      10.1     Configuration Management.......................................39
      10.2     Configuration Identification and Control.......................39
      10.3     Change Control.................................................40
      10.4     Configuration Verification.....................................40
      10.5     Configuration Status Accounting and Documentation..............40

11.  SAFETY...................................................................41

      11.1     General........................................................41
      11.2     Hazardous Conditions...........................................41
      11.3     Safety and Hazard Analyses.....................................41

12.  Launch Vehicle...........................................................42

      12.1     Introduction...................................................42
      12.2     Reporting......................................................42
      12.3     Reviews........................................................42
            12.3.1  Mission Specific Preliminary Design Review(PDR)...........42



<PAGE>

                                  CONFIDENTIAL

28 June 1996                                                             Issue 3



            12.3.2  Mission Specific Critical Design Review (CDR).............42
            12.3.3  System Review.............................................42
            12.3.4  Pre Shipment Review.......................................43
            12.3.5  Review Summary and Action Items...........................43
      12.4     Launch Readiness Review........................................43




APPENDIX 1  REVIEW ITEM DISCREPANCY FORM......................................44
APPENDIX 2  CHANGE REQUEST FORM...............................................45
APPENDIX 3  CONTRACT CHANGE NOTICE FORM.......................................46
APPENDIX 4  REQUEST FOR DEVIATION/WAIVER FORM.................................47
APPENDIX 5  NON-CONFORMANCE REPORT FORM.......................................48












<PAGE>


                                  CONFIDENTIAL

28 June 1996                                                             Issue 3



                           ORION SATELLITE CORPORATION


                                    PART 3(C)

                          ORION 2 SPACECRAFT ON-GROUND
                                TEST REQUIREMENTS


                                    Issue: 4
                             Dated: 15 January 1997










Signed:                  Date:
On behalf of ORION Satellite Corporation




Signed:                  Date:
On Behalf of Matra Marconi Space UK Limited



<PAGE>
                                  CONFIDENTIAL

28 June 1996                                                             Issue 3


                               TABLE OF CONTENTS

1.   INTRODUCTION..............................................................1

2.   GENERAL COMMENTS..........................................................2

      2.1 Test Philosophy......................................................2
      2.2 Definitions..........................................................3
      2.3 Test Requirements....................................................4
               2.3.1 General...................................................5
               2.3.2 Test Equipment and Test Facility Requirements.............6
               2.3.3 Zero-G Testing............................................6
               2.3.4 Acceptance Tests..........................................7
               2.3.5 Protoflight Tests.........................................7
               2.3.6 Qualification Tests.......................................
      2.4 WITNESSING OF TESTS..................................................8
      2.5 TEST DATA............................................................9
      2.6 TEST REVIEWS.........................................................9
      2.7 DOCUMENTATION........................................................9
      2.8 ORGANIZATION.........................................................9

3.   UNIT, SUBSYSTEM AND SPACECRAFT TEST PROGRAM .............................10

      3.1 EQUIPMENT CATEGORIZATION............................................
      3.2 TEST PROGRAM OVERVIEW...............................................10

4.   PROTOFLIGHT TESTS........................................................25

      4.1 Unit Protoflight Tests..............................................25
      4.2 Subsystem Protoflight Tests.........................................31
               4.2.1 Repeater Subsystem.......................................31
               4.2.2 Antenna Subsystem........................................32
               4.2.3 Telemetry, Tracking, and Command (TT&C) Subsystem........
               4.2.4 AOCS Subsystem Protoflight Dynamic Test
               4.2.5 Propulsion Subsystem.....................................36
               4.2.6 Power Subsystem..........................................36
               4.2.6.1 Solar Array............................................36
               4.2.6.2 Battery Assembly.......................................39
               4.2.7 Structure Subsystem Protoflight Test.....................39
               4.2.8 Thermal Subsystem Protoflight Test.......................37
      4.3 Spacecraft Protoflight Test.........................................38
               4.3.1 Integration Tests........................................38


<PAGE>
                                  CONFIDENTIAL

28 June 1996                                                             Issue 3

               4.3.2  Integrated System Test..................................38
               4.3.3  Electro Magnetic Compatibility (EMC) Test...............40
               4.3.4  RF Health Check.........................................40
               4.3.5  Electro Static Discharge (ESD) Test.....................41
               4.3.6  Spacecraft Alignment Test...............................43
               4.3.7  Sinusoidal Vibration....................................42
               4.3.8  Post-Sinusoidal Vibration Functional Tests..............42
               4.3.9  Acoustic Vibration Test.................................44
               4.3.10 Post-Acoustic Vibration Functional Tests................44
               4.3.11 Shock and Deployment Tests..............................44
               4.3.12 Post-Launch Environment Performance Test................45
               4.3.13 Thermal Balance/Thermal Vacuum Test.....................45
               4.3.14 Final Performance Test..................................47
               4.3.15 RF Range Test...........................................45
               4.3.16 Spacecraft Mass Properties Measurements.................46

5.   FLIGHT ACCEPTANCE TESTS..................................................54

      5.1 Unit Acceptance Tests...............................................54
               5.1.1 PIM......................................................55
               5.1.2  Power Handling MP and GP................................55
      5.2 Subsystem Acceptance Tests..........................................55
               5.2.1 Antenna Subsystem........................................56
               5.2.2 Attitude and Orbit Control Subsystem (AOCS)..............56
               5.2.3 Power Subsystem..........................................56
               5.2.4 Structure Subsystem Acceptance Tests.....................56
               5.2.5 Thermal Subsystem........................................57
               5.2.6 Platform Harness.........................................57
      5.3 Spacecraft Acceptance Test..........................................56

6.   LIFE TESTS...............................................................59

7.   DEVELOPMENT AND QUALIFICATION TEST.......................................60

      7.1 Communications Subsystem Tests......................................60
               7.1.1 Antenna Unit and Subsystem Test..........................60
               7.1.2 Repeater Units...........................................61
      7.2 Structure Subsystem Tests...........................................61
               7.2.1 Structure Static Test....................................61
      7.3 AOCS Subsystem Qualification Tests..................................61
               7.3.1 AOCS Subsystem Dynamic Tests.............................61
               7.3.2 Liquid Slosh Test........................................61
      7.4 Propulsion Subsystem Qualification Tests............................61
               7.4.1 General..................................................62
               7.4.2 Thrusters................................................62


<PAGE>
                                  CONFIDENTIAL

28 June 1996                                                             Issue 3


               7.4.3 Liquid Apogee/Perigee Engines............................63
               7.4.4 Propellant Tank..........................................62
               7.4.5 Subsystem Verification Test..............................63
      7.5 Thermal Subsystem...................................................63
               7.5.1 Thermal Surfaces.........................................64
               7.5.2 Heat Pipes...............................................64
      7.6 Mechanisms..........................................................65

8.   INTERFACE COMPATIBILITY TESTS............................................65

      8.1 Ground Control System Compatibility.................................66
      8.2 Launch Vehicle Compatibility........................................66

9.   LAUNCH PREPARATION TEST..................................................67

      9.1 General.............................................................67
      9.2 Launch Site Functional Test.........................................67
      9.3 Launch Preparation Functional Tests.................................68
      9.4 Post-Encapsulation and Launch Pad Tests.............................69

10.   DESIGN VERIFICATION MATRICES (DVM)......................................70

      10.1 Design Verification................................................69

11.   TEST CONFIGURATION MATRICES.............................................87

      11.1 Introduction.......................................................87
      11.2 Repeater Test Configurations.......................................87
               11.2.1 Overall Guidelines......................................87
               11.2.2 Subsystem Level.........................................88
               11.2.3 Spacecraft Level........................................88
               11.2.4 RF Link Calibrations....................................89
               11.2.5 Performance Parameters..................................89
      11.3 Antenna Test Configurations........................................90
               11.3.1 Unit/Subsystem Level....................................90
               11.3.2 Spacecraft Level........................................91



<PAGE>

                                  CONFIDENTIAL

28 June 1996                                                             Issue 3







                           ORION SATELLITE CORPORATION



                                    PART 3(D)


                         ORION 2 IN-ORBIT COMMISSIONING
                                       AND
                          ACCEPTANCE TEST REQUIREMENTS



                                    Issue: 3
                               Dated: 28 June 1996










     Signed:               Date:
     On behalf of ORION Satellite Corporation



     Signed:               Date:
     On behalf of Matra Marconi Space UK Limited




<PAGE>

28 June 1996                                                             Issue 3


                                    PART 3(D)

                             IN-ORBIT COMMISSIONING
                                       AND
                          ACCEPTANCE TEST REQUIREMENTS



                                    CONTENTS


     NO.                                                                   PAGE

     1.  SCOPE............................................................ 1

     2.  DEFINITIONS...................................................... 1

     3.  INTRODUCTION..................................................... 2

     4.  COMMISSIONING.................................................... 4

         4.1    Commissioning Activities.................................. 4
         4.2    Documentation............................................. 5

     5.  ACCEPTANCE TESTING............................................... 6

         5.1    Aggregate Predicted Transponder Life...................... 6
         5.2    Transponder Acceptance Tests.............................. 8
         5.3    Determination of other Spacecraft Parameters............. 12
         5.4    Documentation............................................ 15

     6.  POST ACCEPTANCE TRANSPONDER TESTING............................. 18

     ANNEX A    GROUND TEST FACILITY CONCEPT............................. 20

     ANNEX B    COMMISSIONING ACTIVITIES................................. 23

     ANNEX C    TRANSPONDER PERFORMANCE TESTS............................ 30