<Page>

                                                                    EXHIBIT 10.5

**** Confidential treatment has been requested for portions of this contract.
The copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this
contract has been filed separately with the Securities and Exchange Commission.


                               CONTRACT NO. L0634

                           THIRD AMENDED AND RESTATED
                           SATELLITE PURCHASE CONTRACT
                              FOR IN-ORBIT DELIVERY


                                 BY AND BETWEEN

                             XM SATELLITE RADIO INC.

                                       AND

                  BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.



                                  MAY 15, 2001

<Page>
                                                                    CONFIDENTIAL


                           THIRD AMENDED AND RESTATED


                           SATELLITE PURCHASE CONTRACT


                              FOR IN-ORBIT DELIVERY



                                 BY AND BETWEEN


                             XM SATELLITE RADIO INC.


                                       AND


                  BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.





                               PROPRIETARY NOTICE





  THE ATTACHED CONTRACT AND THE INFORMATION CONTAINED THEREIN ARE CONFIDENTIAL
     AND PROPRIETARY TO XM SATELLITE RADIO INC. AND BOEING SATELLITE SYSTEMS
INTERNATIONAL, INC., AND SHALL NOT BE PUBLISHED OR DISCLOSED TO ANY THIRD PARTY
  WITHOUT THE EXPRESS WRITTEN CONSENT OF A DULY AUTHORIZED REPRESENTATIVE OF XM
      SATELLITE RADIO INC. AND BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.


<Page>



                                TABLE OF CONTENTS
                           THIRD AMENDED AND RESTATED
                SATELLITE PURCHASE CONTRACT FOR IN-ORBIT DELIVERY

TERMS AND CONDITIONS

EXHIBIT A -       SPACECRAFT PERFORMANCE SPECIFICIATIONS

EXHIBIT B -       STATEMENT OF WORK (FLOW)


EXHIBIT C -       PRODUCT ASSURANCE PLAN


EXHIBIT D -       TEST PLAN REQUIREMENTS [ON GROUND AND IN-ORBIT]


EXHIBIT E -       RADIATION ENVIRONMENT SPECIFICATIONS


EXHIBIT F -       LONG-LEAD ACTIVITIES AND ITEMS


EXHIBIT G -       PAYMENT PLAN AND TERMINATION LIABILITY AMOUNTS


                  EXHIBIT G-1 - PAYMENT PLAN FOR INTEREST ON IN-ORBIT
                    INCENTIVE AMOUNTS

                  EXHIBIT G-2 - GROUND SPARE SATELLITE PAYMENT PLAN,
                    TERMINATION LIABLITY AMOUNTS AND INCENTIVE AMOUNTS

                  EXHIBIT G-3 - 4TH AND 5TH OPTIONAL SATELLITES PAYMENT PLAN
                    AND TERMINATION LIABILITY AMOUNTS

EXHIBIT H -       INITIAL SATELLITE OPERATIONS PHASE AND CRITERIA FOR
                    FINAL HANDOVER STATEMENT OF WORK (SOW)

<Page>

                           THIRD AMENDED AND RESTATED
                SATELLITE PURCHASE CONTRACT FOR IN-ORBIT DELIVERY





                                 BY AND BETWEEN





                             XM SATELLITE RADIO INC.





                                       AND





                  BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.





                              TERMS AND CONDITIONS


<Page>

                       ATTACHMENTS, ANNEXES AND SCHEDULES


ATTACHMENTS AND ANNEXES


Attachment A                                Form of Request for Payment


Annex I to Attachment A                     Form of Contractor Certificate


Schedule I to Annex I to Attachment A       List of Exceptions


Schedule II to Annex I to Attachment A      List of Disputes


Attachment B                                Key Personnel


SCHEDULES


Schedule 19.3         Capitalization and Subsidiaries


Schedule 19.4         Litigation


Schedule 19.5         Title to Properties and Assets


Schedule 19.6         Financial Statements


Schedule 19.7         Certain Actions


Schedule 19.8         Disclosed Liabilities


<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.


                                TABLE OF CONTENTS
                              TERMS AND CONDITIONS

<Table>
<S>                                                                                                             <C>
1.    DEFINITIONS AND CONSTRUCTION................................................................................3

   1.1   CERTAIN DEFINITIONS......................................................................................3
   1.2   OTHER TERMS.............................................................................................14
   1.3   INTEGRATION AND CONSTRUCTION............................................................................14
   1.4   HEADINGS; NUMBER AND GENDER.............................................................................15

2.    SCOPE OF WORK..............................................................................................16

   2.1   GENERAL.................................................................................................16
   2.2   LONG-LEAD ACTIVITIES AND ITEMS..........................................................................16

3.    EFFECTIVE DATE OF CONTRACT (EDC); [***]....................................................................18

   3.1   EFFECTIVE DATE OF CONTRACT (EDC)........................................................................18
   3.2   CONTRACTOR WORK COMMITMENT..............................................................................18
   3.3   [***]; EXPIRATION THEREOF; REMEDIES.....................................................................19

4.    CONTRACT PRICE.............................................................................................21

   4.1   CONTRACT PRICE..........................................................................................21
   4.2   CHANGES IN CONTRACT PRICE...............................................................................22
   4.3   TAXES AND DUTIES........................................................................................22

5.    PAYMENT....................................................................................................23

   5.1   REQUESTS FOR PAYMENT AND INVOICES.......................................................................23
   5.2   PAYMENT.................................................................................................24
   5.3   DISPUTED AMOUNTS........................................................................................25
   5.4   SET OFF.................................................................................................27
   5.5   LATE PAYMENT............................................................................................27
   5.6   PAYMENTS CURRENT AT LAUNCH..............................................................................27
   5.7   SECURITY INTEREST.......................................................................................27

6.    ACCESS TO WORK.............................................................................................30

   6.1   FACILITIES..............................................................................................30
   6.2   OFFICE SPACE............................................................................................30
   6.3   SECURITY................................................................................................30
   6.4   DATA AND DOCUMENTATION..................................................................................31
   6.5   ELECTRONIC ACCESS.......................................................................................31
   6.6   MEETINGS AND REVIEWS....................................................................................32
   6.7   LAWS....................................................................................................32
   6.8   NO RELIEF...............................................................................................32
   6.9   MAJOR SUBCONTRACTS......................................................................................33
   6.10  CONSULTANT ACCESS.......................................................................................33

7.    DELIVERY AND DELIVERY INCENTIVES...........................................................................34

8.    INSPECTION AND FINAL ACCEPTANCE............................................................................37

   8.1   PRELIMINARY INSPECTIONS.................................................................................37
   8.2   SHIPMENT READINESS REVIEW...............................................................................37
   8.3   FLIGHT READINESS REVIEW.................................................................................39
   8.4   LAUNCH READINESS REVIEW.................................................................................40
   8.5   IN-ORBIT TESTING AND FINAL ACCEPTANCE OF SATELLITES.....................................................40
   8.6   FINAL ACCEPTANCE OF GROUND SPARE SATELLITE..............................................................41
   8.7   SATELLITE CONTROL SOFTWARE AND GROUND ENCRYPTORS........................................................41

                                       i

<Page>

   8.8   DYNAMIC SPACECRAFT SIMULATOR AND COMMUNICATIONS PAYLOAD SIMULATOR.......................................42
   8.9   DATA AND DOCUMENTATION..................................................................................42
   8.10  LAUNCH AND EARLY OPERATIONS (LEOP)......................................................................43
   8.11  RESERVED................................................................................................43
   8.12  TRAINING................................................................................................43

9.    TITLE AND RISK OF LOSS.....................................................................................44

   9.1   TRANSFER OF TITLE.......................................................................................44
   9.2   TRANSFER OF RISK OF LOSS................................................................................44

10.   LIQUIDATED DAMAGES FOR LATE DELIVERY.......................................................................45

   10.1     LIQUIDATED DAMAGES...................................................................................45
   10.2     REMEDY...............................................................................................46
   10.3     TERMINATION FOR UNEXCUSED DELAY......................................................................47

11.   EXCUSABLE DELAY............................................................................................48

   11.1     EXCUSABLE DELAY DEFINED..............................................................................48
   11.2     EQUITABLE ADJUSTMENTS................................................................................48
   11.3     MAXIMUM EXCUSABLE DELAY; TERMINATION.................................................................49

12.   IN-ORBIT PERFORMANCE INCENTIVE PAYMENTS....................................................................50

   12.1     TOTAL AMOUNT AT RISK.................................................................................50
   12.2     IN-ORBIT PERFORMANCE INCENTIVES......................................................................50
   12.3     CALCULATION AND EARNING OF INCENTIVE AMOUNTS.........................................................50
   12.4     DISPUTED PERFORMANCE.................................................................................52
   12.5     ROLL-OVER OF INCENTIVE AMOUNTS.......................................................................52
   12.6     PAYMENT AND INTEREST.................................................................................53
   12.7     INTEREST ON ROLL-OVER INCENTIVE AMOUNTS..............................................................54
   12.8     SECURITY FOR PERFORMANCE INCENTIVE PAYMENTS..........................................................55
   12.9     EXCLUSIVE REMEDY.....................................................................................56

13.   CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES AND OTHER DELIVERABLE ITEMS...................................57

   13.1     NOTICE OF DEFECTS....................................................................................57
   13.2     DUTY TO CORRECT......................................................................................57

14.   CHANGES IN SCOPE OF WORK...................................................................................59

   14.1     CHANGES REQUESTED BY CUSTOMER........................................................................59
   14.2     CHANGES REQUESTED BY CONTRACTOR......................................................................59
   14.3     PRICING OF CHANGES...................................................................................60
   14.4     STORAGE..............................................................................................60

15.   PERMITS AND LICENSES; COMPLIANCE WITH LAWS.................................................................63

   15.1     UNITED STATES PERMITS, LICENSES, AND LAWS............................................................63
   15.2     NON-UNITED STATES PERMITS, LICENSES, AND LAWS........................................................63
   15.3     REVIEW OF APPLICATIONS...............................................................................64
   15.4     CONTRACTOR VIOLATION OF LAW..........................................................................64

16.   SUBCONTRACTS...............................................................................................65

   16.1     MAJOR SUBCONTRACTS...................................................................................65
   16.2     SELECTION OR REPLACEMENT OF MAJOR SUBCONTRACTORS.....................................................65
   16.3     NO PRIVITY OF CONTRACT...............................................................................65
   16.4     SUBCONTRACTOR RELATIONS..............................................................................65

17.   PERSONNEL AND KEY PERSONNEL................................................................................67

                                       ii

<Page>

   17.1     PERSONNEL QUALIFICATIONS.............................................................................67
   17.2     KEY PERSONNEL POSITIONS..............................................................................67
   17.3     ASSIGNMENT OF KEY PERSONNEL..........................................................................67

18.   CONTRACTOR'S REPRESENTATIONS, COVENANTS, AND WARRANTIES....................................................69

   18.1     ORGANIZATION; GOOD STANDING AND QUALIFICATION........................................................69
   18.2     AUTHORIZATION........................................................................................69
   18.3     WARRANTIES FOR DELIVERABLE ITEMS.....................................................................69

19.   CUSTOMER'S REPRESENTATIONS, WARRANTIES AND COVENANTS.......................................................73

   19.1     ORGANIZATION; GOOD STANDING AND QUALIFICATION........................................................73
   19.2     AUTHORIZATION........................................................................................73
   19.3     CAPITALIZATION AND SUBSIDIARIES......................................................................73
   19.4     LITIGATION...........................................................................................73
   19.5     TITLE TO PROPERTIES AND ASSETS.......................................................................74
   19.6     FINANCIAL STATEMENTS.................................................................................74
   19.7     CERTAIN ACTIONS......................................................................................74
   19.8     UNDISCLOSED LIABILITIES..............................................................................74
   19.9     COMPLIANCE WITH OTHER INSTRUMENTS....................................................................75
   19.10    CUSTOMER'S FINANCIAL STRENGTH........................................................................75
   19.11    CROSS-DEFAULTS.......................................................................................75
   19.12    CODE.................................................................................................75
   19.13    INTELLECTUAL PROPERTY................................................................................76
   19.14    OTHER CONTRACTS......................................................................................76
   19.15    NON-MISLEADING STATEMENTS............................................................................76
   19.16    CONTROL OF CUSTOMER..................................................................................76
   19.17    CUSTOMER FINANCIAL COVENANT..........................................................................76

20.   INTELLECTUAL PROPERTY RIGHTS...............................................................................77

   20.1     OWNERSHIP OF IP AND IP RIGHTS........................................................................77
   20.2     LICENSE RIGHTS.......................................................................................77
   20.3     JOINT PROGRAM INVENTIONS.............................................................................78
   20.4     SURVIVAL OF INTELLECTUAL PROPERTY RIGHTS.............................................................79

21.   INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION.........................................................80

   21.1     CONTRACTOR INTELLECTUAL PROPERTY INDEMNIFICATION.....................................................80
   21.2     CUSTOMER INTELLECTUAL PROPERTY INDEMNIFICATION.......................................................80
   21.3     TOTAL LIABILITY......................................................................................81

22.   CONFIDENTIAL INFORMATION...................................................................................82

   22.1     CONFIDENTIALITY OBLIGATIONS..........................................................................82
   22.2     EXCEPTIONS...........................................................................................82
   22.3     NO LICENSE...........................................................................................83
   22.4     RETURN OF CONFIDENTIAL INFORMATION...................................................................83
   22.5     INCONSISTENT LEGENDS.................................................................................83
   22.6     SURVIVAL OF CONFIDENTIALITY OBLIGATIONS..............................................................83

23.   NON-COMPETITION OBLIGATION.................................................................................84


24.   INDEMNIFICATION............................................................................................85

   24.1     CONTRACTOR'S INDEMNIFICATION.........................................................................85
   24.2     CUSTOMER'S INDEMNIFICATION...........................................................................85
   24.3     CROSS-INDEMNIFICATION FOR INTER-PARTY WAIVER OF LIABILITY............................................86
   24.4     INDEMNIFICATION PROCEDURES...........................................................................86
   24.5     WAIVER OF SUBROGATION................................................................................87
   24.6     SURVIVAL OF INDEMNIFICATIONS.........................................................................87

                                      iii

<Page>

25.   INSURANCE..................................................................................................88

   25.1     GENERAL OBLIGATIONS..................................................................................88
   25.2     LAUNCH INSURANCE.....................................................................................88
   25.3     PREPARATION OF CLAIMS................................................................................89

26.   LIMITATIONS OF LIABILITY...................................................................................90


27.   DISPUTE RESOLUTION.........................................................................................92

   27.1     INFORMAL DISPUTE RESOLUTION..........................................................................92
   27.2     ARBITRATION..........................................................................................92
   27.3     LITIGATION...........................................................................................94

28.   LAUNCH SERVICES............................................................................................96

29.   CUSTOMER'S RESPONSIBILITIES...............................................................................101

30.   OPTIONS...................................................................................................103

   30.1     OPTIONS GRANTED.....................................................................................103
   30.2     OPTION TO DELAY FREQUENCY SPECIFICATION BEYOND TWO (2) MONTHS.......................................103
   30.3     GROUND SPARE SATELLITE..............................................................................103
   30.4     LAUNCH CAMPAIGN AND LEOP SERVICES FOR GROUND SPARE SATELLITE AND/OR 4TH AND 5TH OPTIONAL SATELLITES.103
   30.5     4TH AND 5TH OPTIONAL SATELLITES.....................................................................104
   30.6     [RESERVED]..........................................................................................105
   30.7     REFLECTORS FOR THE GROUND SPARE SATELLITE...........................................................105
   30.8     OPTIONAL LAUNCH VEHICLES............................................................................105
   30.9     CONTRACT ADJUSTMENTS................................................................................106

31.   FAILURE TO MAKE ADEQUATE PROGRESS.........................................................................107

32.   TERMINATION...............................................................................................108

   32.1     TERMINATION FOR CUSTOMER'S CONVENIENCE..............................................................108
   32.2     TERMINATION FOR CONTRACTOR'S DEFAULT................................................................110
   32.3     TERMINATION FOR CUSTOMER'S DEFAULT..................................................................112
   32.4     TERMINATION FOR EXCUSABLE DELAY.....................................................................115
   32.5     TIME OF THE ESSENCE.................................................................................116

33.   INTER-PARTY WAIVER OF LIABILITY...........................................................................117

34.   GENERAL...................................................................................................118

   34.1     ASSIGNMENT..........................................................................................118
   34.2     ENTIRE AGREEMENT....................................................................................118
   34.3     AMENDMENTS..........................................................................................119
   34.4     WAIVER OF BREACH OF CONTRACT........................................................................119
   34.5     SEVERABILITY........................................................................................119
   34.6     APPLICABLE LAW......................................................................................119
   34.7     NOTICES.............................................................................................119
   34.8     PARTIES NOT AGENTS..................................................................................120
   34.9     RELEASE OF INFORMATION..............................................................................120
   34.10    CALCULATION OF INTEREST.............................................................................121
   34.11    SURVIVAL............................................................................................121
   34.12    NO THIRD-PARTY BENEFICIARIES........................................................................122
   34.13    CONSENTS AND APPROVALS..............................................................................122
   34.14    LENDER REQUIREMENTS.................................................................................122
   34.15    COVENANT OF GOOD FAITH..............................................................................122

                                       iv

<Page>

   34.16    COUNTERPARTS........................................................................................123

35.   OTHER BUSINESS............................................................................................124
</Table>

                                       v


<Page>

                           THIRD AMENDED AND RESTATED
                SATELLITE PURCHASE CONTRACT FOR IN-ORBIT DELIVERY

         THIS THIRD AMENDED AND RESTATED SATELLITE PURCHASE CONTRACT (this
"Contract") is made and entered into as of the 15th day of May 2001, by and
between XM SATELLITE RADIO INC., a Delaware corporation with its principal
offices located at 1500 Eckington Place, NE, Washington, D.C. 20002 (formerly
named American Mobile Radio Corporation and hereinafter referred to as
"Customer"), and BOEING SATELLITE SYSTEMS INTERNATIONAL, INC., a Delaware
corporation with its principal offices located at 2260 E. Imperial Way, El
Segundo, California 90245, U.S.A. (formerly named Hughes Space and
Communications International, Inc. and hereinafter "Contractor"). As used in
this Contract, "Party" means either Customer or Contractor, as appropriate, and
"Parties" means Customer and Contractor.

         WHEREAS, Customer is implementing a Digital Audio Radio Satellite
("DARS") system designed to provide digital audio radio services to the
continental United States; AND

         WHEREAS, Customer anticipates providing the business referred to above
through two (2) geostationary satellites; AND

         WHEREAS, Contractor is a space technology company that designs,
manufactures, and integrates a range of space products, including satellites and
facilities for managing and controlling satellites; AND

         WHEREAS, the Parties have reached agreement on the terms and conditions
of procurement by Customer from Contractor of two Boeing 702 Satellites, to be
delivered in-orbit, and related items, services and activities, including
satellite control center equipment and software, launch services, and long-lead
items for a Ground Spare Satellite, and options to purchase other additional
equipment and services, including additional satellite(s), as set forth and
further defined in this Contract; AND

         WHEREAS, Customer and Contractor entered into a Satellite Purchase
Contract for In-Orbit Delivery dated March 20, 1998 (the "Original Satellite
Purchase Contract"), as amended by Amendment No. 1 dated May 6, 1998 and
Amendment No. 2 dated June 5, 1998, and as amended and restated by the Amended
and Restated Satellite Purchase Contract dated June 17, 1999 (the "First Amended
and Restated Satellite Purchase Contract"); AND

         WHEREAS, Customer and Contractor entered into the Second Amended and
Restated Satellite Purchase Contract dated July 21, 1999 (the "Second Amended
and Restated Satellite Purchase Contract"), as amended by Amendment No. 1 dated
January 17, 2001; AND

         WHEREAS, Contractor officially changed its name from Hughes Space and
Communications International, Inc. to Boeing Satellite Systems International,
Inc. on October 6, 2000, AND

         WHEREAS, the Parties have reached agreement on additional changes to
the Second

                                       1

<Page>

Amended and Restated Satellite Purchase Contract; AND

         WHEREAS, this document amends and restates the Second Amended and
Restated Satellite Purchase Contract and shall be the sole agreement between the
Parties as to the Work to be performed hereunder by Contractor.

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and intending to be legally bound hereby, the Parties agree as
follows:

                                       2

<Page>

1. DEFINITIONS AND CONSTRUCTION

         1.1 CERTAIN DEFINITIONS.

         In this Contract, the following terms shall have the meaning stated
hereunder:

         (a) "AFFILIATE" means, with respect to an entity, any other entity
Controlling or Controlled by or under common Control with such entity.

         (b) "AMENDMENT TO THIS CONTRACT" OR "AMENDMENT" means a written
agreement modifying the terms of this Contract in accordance with Article 34.3
(Amendments).

         (c) "APPROVAL" means written approval. This term is as defined, whether
or not capitalized in this Contract.

         (d) "ARP" or "AFTER RECEIPT OF PAYMENT" means July 7, 1999, the date
upon which Contractor received Program Calendar Payment No. 1 in the amount of
Sixty-Eight Million Dollars ($68,000,000).

         (e) "ASSOCIATES" means, with respect to an entity, its directors,
officers, employees agents, consultants, and assigns.

         (f) "AVAILABLE FOR SHIPMENT" means that a Spacecraft has successfully
passed all in-plant acceptance tests, has successfully undergone a Shipment
Readiness Review and has been declared ready to be shipped to the Designated
Launch Site.

         (g) "BACKGROUND INTELLECTUAL PROPERTY" means Intellectual Property
first made, developed, or created prior to the negotiation or performance of
this Contract and necessary to the use of any Deliverable Item.

         (h) "BACK-UP SATELLITE CONTROL CENTER" means Customer's back-up
satellite control center located at 1500 Eckington Place, NE, Washington, DC
20002.

         (i) "BUSINESS DAY" means any day other than the following: a Saturday,
Sunday, and any other day on which national banks are authorized to be closed in
New York City, New York.

         (j) "CALENDAR DAY" means any day.

         (k) "CALENDAR PAYMENT" means any of those payments listed as specific
calendar payments in Exhibit G (Payment Plan and Termination Liability Amounts).

         (l) "COMMUNICATIONS PAYLOAD SIMULATOR" means the equipment, software,
and interfaces required to simulate a single Time Division Multiplexed (TDM)
chain, pursuant to the requirements of Exhibit B (SOW).

         (m) "CONDUCT SPACECRAFT CRITICAL DESIGN REVIEW (SCDR)" means that ten
(10) Business Days prior to the date Contractor is ready to perform the SCDR,
Contractor shall

                                       3

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

provide to Customer (i) written notice that Contractor has completed all
necessary activities in order to proceed to SCDR, and (ii) the Design Review
Package, as further described in Exhibit B (SOW). Customer shall then have
five (5) Business Days upon receipt of such notice and Design Review Package
to review same and provide specific comments to Contractor. At the Spacecraft
Critical Design Review meeting, Contractor shall (i) identify, compile, and
maintain a uniform program listing of all action items through closure,
including identification of new items to be developed or items to be modified
in order to meet the requirements of this Contract, (ii) establish detailed
action plans to address and carry out all action items identified, including
timetables for performance and identification of responsible personnel, and
(iii) prepare and distribute SCDR minutes and action item assignments, all of
which demonstrate that each Spacecraft shall be Available for Shipment to the
Designated Launch Site no later than [***] (with respect to the first
Spacecraft) and [***] (with respect to the second Spacecraft).

         (n) "CONDUCT SPACECRAFT PRELIMINARY DESIGN REVIEW (SPDR)" means that
ten (10) Business Days prior to the date Contractor is ready to perform the
SPDR, Contractor shall provide to Customer (i) written notice that Contractor
has completed all necessary activities in order to proceed to SPDR and (ii)
the Design Review Package, as further described in Exhibit B (SOW). Customer
shall then have five (5) Business Days upon receipt of such notice and Design
Review Package, to review same and provide specific comments to Contractor.
At the Spacecraft Preliminary Design Review meeting, Contractor shall (i)
identify, compile, and maintain a uniform program listing of all action items
through closure, including identification of new items to be developed or
items to be modified in order to meet the requirements of this Contract, (ii)
establish detailed action plans to address and carry out all action items
identified, including timetables for performance and identification of
responsible personnel, and (iii) prepare and distribute SPDR minutes and
action item assignments, all of which demonstrate that each Spacecraft shall
be Available for Shipment to the Designated Launch Site at no later than [***]
(with respect to the first Spacecraft) and [***] (with respect to the second
Spacecraft).

         (o) "CONFIDENTIAL INFORMATION" means all information, of any nature and
in any form, whether written, oral or recorded or transmitted electronically or
by tape or other similar manner, regarding the business, finances, operations,
prospects, plans, or affairs of the Furnishing Party (including its Affiliates,
Subcontractors, or Consultants), and all data, processes, materials, and
software in source code and object code form, related documentation, and other
technical data that is confidential and embodies trade secrets and other
proprietary information of the Furnishing Party, which information is designated
in writing by the Furnishing Party as confidential, provided, however, that if
disclosed orally, such information must be confirmed and designated in writing
in summary form as confidential within thirty (30) Calendar Days of the time at
which oral disclosure took place. Confidential Information shall also include
Data and Documentation.

         (p) "CONSTRUCTIVE TOTAL LOSS" and "TOTAL LOSS" shall have the meaning
ascribed to them in the policy for Launch Insurance.


                                       4


<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (q) "CONSULTANT" means a person or organization retained by Customer to
provide Customer with technical advice and related services and identified by
Customer to Contractor as such in accordance with Article 6 (Access to Work).

         (r) "CONTRACT" OR "THIRD AMENDED AND RESTATED SATELLITE PURCHASE
CONTRACT" means the written instrument herein dated the day and year first
written above, including any Amendments made pursuant to Article 34.3
(Amendments), embodying the agreement between Contractor and Customer and
including the Terms and Conditions, Exhibits (and Appendices thereto),
Attachments, Annexes, and Schedules annexed hereto and made a part of this
Contract.

         (s) "CONTRACT PRICE" means the firm fixed price set forth in Article
4.1 (Contract Price).

         (t) "CONTROL" and its derivatives mean, with respect to an entity, the
legal, beneficial, or equitable ownership, directly or indirectly of fifty
percent (50%) or more of the capital stock (or other ownership interest if not a
corporation) of such entity ordinarily having voting rights or the power to
direct the management policies of such entity, whether through the ownership of
voting stock, by contract, or otherwise.

         (u) "CORRECTION PLAN" means a plan submitted by Contractor that details
the means by which Contractor shall correct a failure to make adequate progress
toward completion of any Work under this Contract in accordance with Article 31
(Failure to Make Adequate Progress).

         (v) "CUSTOMER COVERAGE AREA" means the United States.

         (w) "CURE PERIOD" shall have the meaning set forth in Article 3.3
([***]; Expiration Thereof; Remedies).

         (x) "CUSTOMER PERSONNEL" means Customer employees, Consultants or
representatives, or Customer's Consultants' employees.

         (y) "DATA AND DOCUMENTATION" means that data and documentation to be
supplied by Contractor pursuant to the requirements of Exhibit B (SOW) .

         (z) "DEFECT" means (i) with respect to any Deliverable Item, and any
and all components thereof, any material defect or nonconformance in design,
material or workmanship, or failure to perform in accordance with the
specifications and requirements set out or referred to in this Contract; (ii)
with respect to services, a failure to meet any material specification or
requirement set forth in this Contract or to conform to a high standard
consistent with industry practice; (iii) any material error, omission or
inconsistency in Data and Documentation, including specifications and drawings,
set forth in or required by this Contract; and (iv) with respect to Training, a
material procedural error.

         (aa) "DELIVERABLE ITEM" means the items listed in Table 7.1 of Article
7 (Delivery), and other items so identified in Exhibit B (Statement of Work) or
any Amendment to this Contract.

                                       5

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (bb) "DELIVER" OR "DELIVERY" OR "DELIVERED" means, with respect to a
Deliverable Item, delivery by Contractor of a Deliverable Item in accordance
with the requirements of this Contract.

         (cc) "DELIVERY DATE(S)" means, with respect to a Deliverable Item, the
delivery date set forth in Table 7.1 of Article 7 (Delivery), as such date may
be extended, as appropriate, to reflect all periods during which an Excusable
Delay exists or any similar extension of time as may be agreed to by the Parties
in accordance with Article 34.3 (Amendments).

         (dd) "DELIVERY SCHEDULE" means the schedule for Delivery of the Work as
set forth in Table 7.1 of Article 7 (Delivery).

         (ee) "DEMAND" means, in the context of Article 31 (Failure to Make
Adequate Progress), a demand made by Customer to Contractor for Contractor to
provide a Correction Plan in the event Contractor is failing to make adequate
progress in the performance of this Contract.

         (ff) "DESIGNATED LAUNCH SITE" means, with respect to a Satellite, the
Launch facility provided by the Launch Agency.

         (gg) "DISPUTE" has the meaning set forth in Article 27 (Dispute
Resolution).

         (hh) "DOLLARS" means United States Dollars.

         (ii) "DYNAMIC SPACECRAFT SIMULATOR" has the meaning ascribed to it in
Exhibit B (SOW).

         (jj) "EFFECTIVE DATE OF CONTRACT" OR "EDC" means March 23, 1998, the
date set forth in Article 3.1 (Effective Date of Contract (EDC)).

         (kk) "EXCUSABLE DELAY" has the meaning set forth in Article 11
(Excusable Delay).

         (ll) "EXHIBIT" OR "EXHIBITS" means any and all exhibits, and any
appendices thereto, to this Contract, which are attached hereto and incorporated
herein.

         (mm) "[***] PAYMENT" means that Milestone Payment that Customer
shall pay to Contractor on or before the final day of the [***], plus any
applicable Cure Period, as such payment is further described in Exhibit G
(Payment Plan and Termination Liability Amounts).

         (nn) "FINAL ACCEPTANCE" of a Deliverable Item has the meaning set forth
in Article 8 (Inspection and Final Acceptance).

         (oo) "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 Customer to fund the construction, delivery, or Launch
of the Satellites or the purchase of Long-Lead Items for the Ground Spare
Satellite.

                                       6

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (pp) "FINANCING ENTITY" means any entity (other than Contractor, or
parties related to Contractor, or competitors of Contractor), e.g., commercial
bank, merchant bank, investment bank, commercial finance organization,
corporation, or partnership, providing money on a full or partial debt basis to
Customer to fund the construction, Delivery, or Launch of the Satellites or
purchase of Long-Lead Items for an Ground Spare Satellite.

         (qq) "FIRST MILESTONE PAYMENT" means the first Milestone Payment
identified in Exhibit G (Payment Plan and Termination Liability Amounts),
equaling [***].

         (rr) "FINAL HANDOVER" means handover of the operations of a Satellite
from Contractor to Satellite Operator for Customer's use in accordance with the
requirements set forth in Exhibit H (Initial Satellite Operations Phase and
Criteria for Final Handover Statement of Work (SOW)).

         (ss) "FLIGHT READINESS REVIEW" OR "FRR" shall have the meaning ascribed
to it in Article 8.3 (Flight Readiness Review).

         (tt) "FOREGROUND INTELLECTUAL PROPERTY" means Intellectual Property
first made, developed, or created in connection with this Contract that is
embodied or reflected in this Contract, in any Amendment thereto, or in any
annexed Parts, and incorporated into or employed in the use of any Deliverable
Item.

         (uu) "FURNISHING PARTY" means the Party who furnishes Confidential
Information to the other Party.

         (vv) "GROUND ENCRYPTORS" shall refer to the command security hardware
to be Delivered to, and installed by Contractor in the Back-Up Satellite Control
Center in accordance with the requirements of Exhibit B (SOW).

         (ww) "GROUND SPARE SATELLITE" shall refer to the satellite that
Customer has purchased for on-ground Delivery.

         (xx) "INCENTIVE AMOUNT" means any amount required to be paid pursuant
to Article 12 (In-Orbit Performance Incentive Payments). (yy) "INCLUDING" and
its derivatives (such as "include" and "includes") shall mean including without
limitation. This term is as defined, whether or not capitalized in this
Contract.

         (zz) "INITIAL HANDOVER" shall have the meaning set forth in Article 8.5
(In-Orbit Testing and Final Acceptance of the Satellites).

         (aaa) "INITIAL SATELLITE OPERATIONS PHASE" means the period of time
commencing upon Initial Handover and ending upon Final Handover.

         (bbb) "IN-ORBIT TESTING" means the in-orbit tests and analyses
Contractor shall perform in accordance with Exhibit D (Test Plan Requirements).

                                       7

<Page>

         (ccc) "INSURERS" means those entities providing Launch and In-Orbit
Insurance.

         (ddd) "INTELLECTUAL PROPERTY" means all designs, methods, concepts,
layouts, software, inventions (whether or not patented or patentable),
processes, technical data and documentation, technical information and drawings,
and similar matter in which an Intellectual Property Right may subsist.

         (eee) "INTELLECTUAL PROPERTY RIGHTS" means all common law and statutory
proprietary rights, including patent, patent application, patent registration,
copyright, trademark, service mark, trade secret, mask work rights, moral
rights, data rights and similar rights existing from time to time under the
intellectual property Laws of the United States, any state or foreign
jurisdiction or international treaty regime.

         (fff) "INTENTIONAL IGNITION" means, with respect to a Satellite, the
meaning attributed to the term "Launch" in the Launch Agreement between
Contractor and Sea Launch; provided, however, where a Launch Vehicle other than
Sea Launch is used, the term "Intentional Ignition" shall have the meaning
attributed to it in the applicable Launch Agreement.

         (ggg) "LAUNCH" means, with respect to a Satellite, the meaning
attributed to it in the Launch Agreement between Contractor and Sea Launch,
i.e., the point in time when the electronic signal sent to command the opening
of any first stage propellant valves is received by the Launch Vehicle, as
verified by either the flow of propellant/oxidizer, or telemetry indicating that
the signal reached the propellant valve. A Launch is deemed not to have occurred
in the event of a Terminated Ignition.

         (hhh) "LAUNCH AGENCY" means the entity selected by Contractor to
perform Launch Services, which entity shall be Sea Launch, provided Customer
does not exercise its option to select an alternate Launch Agency as provided in
Article 28 (Launch Services) or paragraph (b) of Article 10.3 (Termination for
Unexcused Delay).

         (iii) "LAUNCH AGREEMENT" means any Subcontract between Contractor and a
Launch Agency to perform the Launch Services for one or both of the Satellites.

         (jjj) "LAUNCH CAMPAIGN" means, with respect to a Satellite, those
services provided by Contractor in support of each Launch mission prior to
Launch, including packing and shipping the Satellite in an environmentally
controlled container to the Designated Launch Site, procuring and maintaining
all-risk ground insurance up to, but not including, Launch (as required by
Article 25 (Insurance)), providing high-pressure injection of propellant into
the Satellite's fuel tanks, configuring the Satellite so as to render it Ready
for Launch, Launch Vehicle Interface Activities, and assisting the Launch Agency
in assuring the Satellite is properly integrated with the Launch Vehicle, all as
further defined in Exhibit B (SOW).

         (kkk) "LAUNCH DATE" means the specific day within the Launch Period or
Launch Slot on which a Launch shall occur.

         (lll) "LAUNCH AND IN-ORBIT INSURANCE" OR "LAUNCH INSURANCE" means, with
respect to a Satellite, insurance that covers the Satellite from the period
beginning at Launch and ending no sooner than the earlier of determination of
Terminated Ignition, Constructive Total


                                       8

<Page>

Loss, Total Loss or five (5) years after the date of Launch. Such insurance
shall cover Contractor's and its Subcontractors' operation of the Satellite.
Such insurance shall cover, with respect to such Satellite, all unpaid Milestone
Payments, the Incentive Amounts (except, in the case of Incentive Amounts, where
Customer elects to purchase an additional Satellite pursuant to Article 30
(Options)), and all interest required to be paid on the foregoing.

         (mmm) "LAUNCH AND EARLY OPERATIONS" or "LEOP" means, with respect to a
Satellite, those services provided by Contractor in support of each launch
mission after Launch and through Final Acceptance of the Pre-Eclipse Test Report
and Post-Eclipse Test Report, such as providing telemetry, tracking and control
to direct the Satellite into its Specified Orbital Location, positioning and
stabilizing the Satellite to hold its pointing position to the Earth, conducting
in-orbit tests (including payload In-Orbit Testing) and furnishing the
Pre-Eclipse Test Report and Post-Eclipse Test Report, pursuant to the
requirements of Exhibit B (SOW) and Exhibit D (Test Plan Requirements).

         (nnn) "LAUNCH PERIOD" means the three-month period from November 1,
2000 through February 1, 2001, with respect to the first Satellite, and the
three-month period from February 15, 2001 through May 15, 2001, with respect to
the second Satellite, during which such periods the Launch of each Satellite is
scheduled to occur.

         (ooo) "LAUNCH READINESS REVIEW" shall have the meaning ascribed to it
in Article 8.4 (Launch Readiness Review).

         (ppp) "LAUNCH SERVICES" means the Launch of a Launch Vehicle and
related services provided by a Launch Agency, including furnishing the Launch
Vehicles, launch support, and equipment and facilities, for the purpose of
launching the Satellites into orbit.

         (qqq) "LAUNCH SLOT" means, with respect to a Satellite, the thirty (30)
Calendar Day period within its applicable Launch Period or prior to such Launch
Period that is selected by Contractor and Customer, and mutually agreed upon by
Contractor and the Launch Agency on or before twelve (12) months prior to the
Launch Period for such Satellite, during which such thirty (30) Calendar Day
period the Launch of such Satellite is scheduled to occur.

         (rrr) "LAUNCH VEHICLE" means a launch vehicle provided by the Launch
Agency to Launch either of the Satellites, which Launch Vehicle shall be a Sea
Launch, or, in the event Customer exercises its option to select an alternate
Launch Vehicle for either or both Satellites, pursuant to Article 28 (Launch
Services), or in accordance with paragraph (b) of Article 10.3 (Termination for
Unexcused Delay), the Launch Vehicle shall be the alternate Launch Vehicle
selected by Customer.

         (sss) "LAUNCH VEHICLE INTERFACE ACTIVITIES" means, with respect to a
Satellite, those services to be provided by Contractor, prior to Launch, in
support of each Launch, including analysis support, interface drawing support,
and technical meeting support, required by the Launch Vehicle Agency, and launch
pad activity support, pursuant to the requirements of Exhibit B (SOW).

         (ttt) "LAW" OR "LAWS" means any laws, including rules, regulations,
codes, injunctions, judgments, orders, ordinances, decrees, rulings, and charges
thereunder, of any


                                       9

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

federal, state, local or municipal government of any country (and all agencies
thereof) having jurisdiction over any portion of the Work.

         (uuu) "LONDON INTER-BANK OFFER RATE" OR "LIBOR" means the rate per
annum shown, on the third (3rd) London Business Day preceding the day of
commencement of an interest calculation period, on page 3750 of the Dow Jones &
Company Telerate screen or any successor page as the composite offered rate for
London interbank deposits in an amount approximately equal to the amount on
which the interest is to be applied for a three-month period (the "Rate Base"),
as shown under the heading "USD" as of 11:00 a.m. (London Time); provided that
in the event no such rate is shown, LIBOR shall be the rate per annum (rounded
to the nearest 1/100th of one percent) based on the rates at which U.S. dollar
deposits approximately equal in principal amount to the Rate Base and for a
three-month period are displayed on page "LIBO" of the Reuters Monitor Money
Rates Service or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major banks as
of 11:00 a.m. (London time) (it being understood that if at least two such rates
appear on such page, the rate will be the arithmetic mean of such displayed
rates); provided that in the event fewer than two such rates are displayed, or
if no such rate is relevant, LIBOR shall be the rate per annum equal to the rate
offered by Credit Suisse, New York Branch, at approximately 11:00 a.m. (London
Time) to prime banks in the London interbank market on deposits in U.S. dollars
in an amount approximately equal in principal amount to the aggregate principal
balance of the Rate Base for a three-month period.

         (vvv) "LONG-LEAD ACTIVITIES" means those activities to be performed by
Contractor, a list of which is to be set forth in Exhibit F (Long-Lead
Activities and Items), in accordance with the requirements of Article 2.2
(Long-Lead Activities and Items).

         (www) "LONG-LEAD ITEMS" means the Satellite components, materials,
hardware, equipment and other related items that Contractor shall procure in
performance of the Long-Lead Activities.

         (xxx) "LOSSES" means all losses, liabilities, damages, royalty payments
and claims, and all related costs and expenses (including reasonable legal fees
and disbursements and costs of investigation, expert fees, litigation,
settlement, judgment, interest, and penalties).

         (yyy) "MAJOR CALENDAR PAYMENT" means, with respect to each
Satellite, the payment of [***] to be made by Customer to Contractor with
respect to each Launch Vehicle in accordance with paragraph (c)(1) of Article
5.1(Requests for Payment and Invoices) herein and Exhibit G (Payment Plan and
Termination Liability Amounts).

         (zzz) "MAJOR SUBCONTRACT" means a Subcontract related to the
performance of this Contract and valued at Two Million Five Hundred Thousand
Dollars ($2,500,000) or more.

         (aaaa) "MAJOR SUBCONTRACTOR" means a Subcontractor who is a party to a
Major Subcontract.

         (bbbb) "MATERIAL ADVERSE EFFECT" means any material adverse change in
(i) the legality, validity, or enforceability of this Contract or (ii) the
ability of Customer or Contractor to perform this Contract.


                                       10

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (cccc) "MILESTONE" means a portion of the definitive, measurable Work
upon completion of which a payment is to be made in accordance with Exhibit G
(Payment Plan and Termination Liability Amounts).

         (dddd) "MILESTONE PAYMENT" means any of those payments listed as
specific milestone payments in Exhibit G (Payment Plan and Termination Liability
Amounts).

         (eeee) "MISSION SUPPORT SERVICES"OR "MSS" means, with respect to a
Satellite, twenty-four (24) hour on-call Contractor support services for each
day of the actual operational lifetime of the Satellites (including operation of
the Satellite beyond the Orbital Design Life) delivered hereunder, as such
services are more fully described in Exhibit B (SOW).

         (ffff) [***] means the period of [***] Calendar Days commencing the
day after EDC.

         (gggg) "ORBITAL DESIGN LIFE" means, with respect to a Satellite, the
contracted for design and performance life of fifteen (15) years for each
Satellite, commencing upon Initial Handover.

         (hhhh) "PARTIAL LOSS" shall have the meaning ascribed to it in the
policy of Launch Insurance.

         (iiii) "PENDING" means, with respect to a legal action, lawsuit,
proceeding or investigation, an action, suit, proceeding, or investigation as to
which Customer has knowledge or received written notice.

         (jjjj) "POST-ECLIPSE TEST REPORT" means, with respect to a Satellite,
that so-named document that is a Deliverable Item under Exhibit B (SOW), the
requirements of which are set forth in Exhibit D (Test Plan Requirements).

         (kkkk) "PRE-ECLIPSE TEST REPORT" means, with respect to a Satellite,
that so-named document that is a Deliverable Item under Exhibit B (SOW), the
requirements of which are set forth in Exhibit D (Test Plan Requirements).

         (llll) "PRIMARY SATELLITE CONTROL CENTER" means Customer's Satellite
Operator's control facility located in Gloucester, Canada.

         (mmmm) "PROGRAM INVENTION" means any invention, discovery, or
improvement conceived of and first reduced to practice in the performance of the
Work under this Contract. Information relating to Program Inventions shall be
treated as proprietary information in accordance with the provisions of this
Contract.

         (nnnn) "PROPERLY OPERATED SATELLITE" means a Satellite which is being
monitored and commanded by Customer, Contractor and/or Satellite Operator in
accordance with the applicable Data and Documentation for operations (as such
Data and Documentation may be amended by the Parties) furnished by Contractor to
Customer under this Contract.

                                       11

<Page>

         (oooo) "QUARTERLY INCENTIVE PAYMENT AMOUNT" means, with respect to the
first and second Satellites (and the Ground Spare Satellite if it is used as a
replacement satellite and the incentives roll-over from either the first or
second Satellite), an amount equal to Two Hundred Eight Thousand Three Hundred
Thirty-Three Dollars and Thirty-Three Cents ($208,333.33) (that is, Twelve
Million Five Hundred Thousand Dollars ($12,500,000) divided by sixty (60)
representing 15 years x 4 quarters per year), as may be adjusted in accordance
with the terms of this Contract. If the Ground Spare Satellite is used as an
additional satellite, this means an amount equal to One Hundred Seventy Thousand
Dollars ($170,000.00) (that is Ten Million Two Hundred Thousand Dollars
($10,200,000.00) divided by sixty (60) representing 15 years x 4 quarters per
year), as may be adjusted in accordance with the terms of this Contract.

         (pppp) "READY FOR LAUNCH" means, with respect to a Satellite, the time
of successful completion by Contractor of the on-ground testing and delivery of
the on-ground preliminary checklist report, including successful completion of
launch site satellite testing and physical integration with the Launch Vehicle,
including Flight Readiness Review and Launch Readiness Review, in accordance
with Exhibit B (SOW) and Exhibit D (Test Plan Requirements), such that the only
activity remaining prior to Launch is the Launch countdown.

         (qqqq) "RECEIVING PARTY" means the Party who receives Confidential
Information from the Furnishing Party.

         (rrrr) "REQUEST FOR PAYMENT" means a request for payment from
Contractor in the form of Attachment A hereto.

         (ssss) "SATELLITE" means each of the three (3) Boeing 702 satellites to
be Delivered by Contractor to Customer pursuant to this Contract and that
conforms to all the requirements of this Contract, except where there is a
specific reference or term related to the Ground Spare Satellite, such reference
shall refer to the third Satellite and such specific reference or term shall
apply only to the Ground Spare Satellite.

         (tttt) "SATELLITE CONTROL CENTER(S)" means, collectively, the Primary
Satellite Control Center and Back-Up Satellite Control Center, and,
individually, the Primary Satellite Control Center or Back-Up Satellite Control
Center.

         (uuuu) "SATISFACTORILY OPERATING SATELLITE" means, with respect to a
Satellite, that such Satellite meets or exceeds the performance specifications
set forth in Exhibit A (Satellite Performance Specifications).

         (vvvv) "SATELLITE CONTROL SOFTWARE" means the software to be Delivered
to, and installed by Contractor in, the Primary Satellite Control Center and the
Back-Up Satellite Control Center in accordance with the requirements of Exhibit
B (SOW).

         (wwww) "SATELLITE OPERATOR" means Customer's designated operator of the
Satellites, namely Telesat Canada, also referred to herein as "TELESAT".

         (xxxx) "SHIPMENT READINESS REVIEW" shall have the meaning ascribed to
it in Article 8.2 (Shipment Readiness Review).


                                       12

<Page>

         (yyyy) "SIMILAR SATELLITE SYSTEM" means any digital audio broadcasting
satellite system in S-band, using an access mode to the satellite and a digital
format substantially as described in Exhibit A (Spacecraft Performance
Specifications).

         (zzzz) "SIMILAR SATELLITE SERVICE" means digital audio broadcasting
satellite service provided by a Similar Satellite System.

         (aaaaa) "SPACECRAFT" means Satellite.

         (bbbbb) "SPACECRAFT PERFORMANCE SPECIFICATIONS" means the technical
specifications set forth in Exhibit A (Spacecraft Performance Specifications),
as may be amended pursuant to this Contract.

         (ccccc) "SPECIFIED ORBITAL LOCATION" means, with respect to each
Satellite, the geostationary synchronous orbital location specified in Exhibit A
(Spacecraft Performance Specifications).

         (ddddd) "STATEMENT OF WORK" or "SOW" means the Work described in
Exhibit B to this Contract and to be provided by Contractor, as may be amended
pursuant to this Contract.

         (eeeee) "SUBCONTRACT" means a contract awarded by Contractor to a
Subcontractor or a contract awarded by a Subcontractor.

         (fffff) "SUBCONTRACTOR" means a person, firm, corporation, or business
entity that has been awarded a Subcontract.

         (ggggg) "TERMINATION LIABILITY AMOUNTS" means the amounts listed as
Termination Liability Amounts in Exhibit G (Payment Plan and Termination
Liability Amounts) and in Exhibit G-2 (Ground Spare Satellite Payment Plan,
Termination Liability Amounts and Incentive Amounts) of this Contract, as may be
amended pursuant to this Contract.

         (hhhhh) "TEST PLAN" means the test plans set forth in Exhibit D (Test
Plan Requirements), as may be amended pursuant to this Contract.

         (iiiii) "TEST REQUIREMENTS" means the test plans and test procedures
set forth in Exhibit D (Test Plan Requirements), as may be amended pursuant to
this Contract.

         (jjjjj) "TOTAL AMOUNT AT RISK" means a total firm-fixed sum of
Thirty-Five Million Two Hundred Thousand Dollars ($35,200,000.00) eligible to be
earned by Contractor as performance incentive payments (Twelve Million Five
Hundred Thousand Dollars ($12,500,000.00) per Satellite) for the first two
satellites and Ten Million Two Hundred Thousand Dollars ($10,200,000.00) for the
Ground Spare Satellite if the Ground Spare Satellite is used as an additional
Satellite pursuant to Article 12 (In-Orbit Performance Incentive Payments).Such
Total Amount at Risk will be adjusted in accordance with Article 12.1 (Total
Amount at Risk) and Article 12.5 (Roll-Over of Incentive Amounts) to reduce this
amount by $10,200,000.00 if the Ground Spare Satellite is used as a replacement
satellite for either the first or second Satellite.


                                       13

<Page>

         (kkkkk) "TERMINATED IGNITION" means that, following the time when the
electronic signal is sent to command the opening of any first stage propellant
valves, the first stage engines of the Launch Vehicle are shut down for any
reason before the hold down mechanism is released.

         (lllll) "TRAINING" means the training to be provided under this
Contract to Customer and Customer's Satellite Operator, including training for
operation of the Satellites in geostationary orbit, as more fully described in
Exhibit B (SOW).

         (mmmmm) "WORK" means all design, development, construction,
manufacturing, labor, services, and acts, including tests to be performed, and
any and all Deliverable Items, including the Satellites, Satellite Control
Software, Ground Encryptors, Dynamic Spacecraft Simulator, Communications
Payload Simulator, Long-Lead Activities and Items, Data and Documentation,
Launch Campaign, Launch Services, LEOP services, MSS, Training, and equipment,
materials, articles, matters, services, and things to be furnished and rights to
be transferred under this Contract, or any Subcontract entered into by
Contractor, all as further described in Exhibit B (SOW).

         1.2 OTHER TERMS.

         Other terms in this Contract are defined in the context in which they
are used and shall have the meanings there indicated.

         1.3 INTEGRATION AND CONSTRUCTION.

         The documents listed below in this Article 1.3 (Integration and
Construction), including any Exhibits, Attachments, Schedules, and Annexes, as
amended from time to time in accordance with Article 34.3 (Amendments),
constitute this Contract and shall be deemed to constitute one fully integrated
agreement between the Parties. In the event of any conflict or inconsistency
among the provisions of the various documents of this Contract, such conflict or
inconsistency shall be resolved by giving a descending level of precedence to
the documents in the order set forth below:

         (a)      Terms and Conditions

         (b)      Exhibit G - Payment Plan and Termination Liability Amounts

         (c)      Exhibit G-1 - Payment Plan for Interest on In-Orbit Incentive
                  Amounts

         (d)      Exhibit G-2 - Ground Spare Satellite Payment Plan, Termination
                  Liability Amounts and Incentive Amounts

         (e)      Exhibit G-3 - 4th and 5th Optional Satellites Payment Plan and
                  Termination Liability Amounts

         (f)      Exhibit B - Statement of Work (SOW)

         (g)      Exhibit A - Spacecraft Performance Specifications

                                       14

<Page>


         (h)      Exhibit D - Test Plan Requirements

         (i)      Exhibit C - Product Assurance Plan

         (j)      Exhibit E - Radiation Environment

         (k)      Exhibit F - Long-Lead Activities and Items

         (l)      Exhibit H - Initial Satellite Operations Phase and Criteria
                  for Final Handover Statement of Work (SOW).

         1.4 HEADINGS; NUMBER AND GENDER.

         The Article headings are for convenience of reference only and shall
not be considered in interpreting the text of this Contract. Words in the
singular include the plural and vice versa, and words imputing the masculine
gender include the feminine and neuter genders where the context so requires.

                                       15

<Page>

2. SCOPE OF WORK

         2.1 GENERAL.

         (a) In accordance with the requirements of this Contract, Contractor
shall sell and Customer shall purchase the Work.

         (b) Contractor shall furnish and perform the Work in accordance with
the provisions of this Contract and in the manner specified in the following
documents:

         (1)      Terms and Conditions

         (2)      Exhibit A         - Spacecraft Performance Specifications

         (3)      Exhibit B         -  Statement of Work (SOW)

         (4)      Exhibit C         -  Product Assurance Plan

         (5)      Exhibit D         -  Test Plan Requirements (On-Ground and
                                       In-Orbit)

         (6)      Exhibit E         -  Radiation Environment

         (7)      Exhibit F         -  Long-Lead Activities and Items

         (8)      Exhibit G         -  Payment Plan and Termination Liability
                                       Amounts

         (9)      Exhibit G-1       -  Payment Plan for Interest on In-Orbit
                                       Incentive Amounts

        (10)      Exhibit G-2       -  Ground Spare Satellite Payment Plan,
                                       Termination Liability Amounts and
                                       Incentive Amounts

        (11)      Exhibit G-3       -  3rd and 4th Optional Satellites Payment
                                       Plan and Termination Liability Amounts

        (12)      Exhibit H         -  Initial Satellite Operations Phase and
                                       Criteria for Final Handover SOW

         (c) Exhibits A, B, C, D, E, F, G, G-1, G-2, G-3 and H are attached to
and incorporated into these Terms and Conditions.

         2.2 LONG-LEAD ACTIVITIES AND ITEMS.

         The preliminary list of Long-Lead Items is attached to this Contract as
Exhibit F (Long-Lead Activities and Items). Contractor shall design the
Composite Reflector for the Ground Spare Satellite as part of this effort.

                                       16

<Page>

         2.3 INITIAL SATELLITE OPERATIONS PHASE

         Contractor shall operate the Satellite(s) from the Contractor's Mission
Control Center from Initial Handover during the Initial Satellite Operations
Phase until Final Handover in accordance with the requirements set forth in
Exhibit H (Initial Satellite Operations Phase and Criteria for Final Handover
SOW). This work shall be performed by Contractor without any increase to the
Contract Price. In the event that the software delivery requirements set forth
in Exhibit H are met for either of the first two Satellites prior to Initial
Handover, Contractor shall not be required to operate such Satellite and Initial
and Final Handover shall be deemed to be the same event.

                                       17

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

3. EFFECTIVE DATE OF CONTRACT (EDC); ONE HUNDRED TWENTY (120) DAY PERIOD

         3.1 EFFECTIVE DATE OF CONTRACT (EDC).

         This Contract shall be effective as of, and the effective date of this
Contract (the "Effective Date of Contract" or "EDC") shall be, March 23, 1998.

         3.2 CONTRACTOR WORK COMMITMENT.

         Beginning upon EDC and continuing for the term of the [***],
Contractor shall commence the Work in full compliance with the requirements
of this Contract and perform sufficient Work to maintain the Delivery Dates
for the Satellites. Such Work during the [***] shall be comprised of the
completion or provision, as the context indicates, of the following work
effort as may be more fully described in Exhibit B (SOW):

         (a) program kickoff meeting;

         (b) System Requirements Status Review and release of Satellite Payload
and Bus specifications;

         (c) release of performance specifications for: communications
receivers, IF processors, output combiner, TWTA, and frequency generator;

         (d) subcontract, or select vendor for, TWTA electronic power
converters;

         (e) mutually agree upon EIRP requirements and finalize Exhibit A
(Spacecraft Performance Specifications) (that is, close "TBRs," "TBSs," and
"TBDs");

         (f) detailed payload block diagram;

         (g) payload panel layout;

         (h) detailed mass budget;

         (i) detailed power budget;

         (j) top level propellant budgets for all potential alternate Launch
Vehicles;

         (k) preliminary field-of-view drawings for all sensors and all
antennas; and

         (l) preliminary list of Long-Lead Activities and Items for the Ground
Spare Satellite.


                                       18

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         3.3 [***]; EXPIRATION THEREOF; REMEDIES.

         (a) The [***] shall terminate upon the earlier of (i) receipt of the
[***] Payment (as more fully described in Exhibit G (Payment Plan and
Termination Liability Amounts)) by Contractor, or (ii) [***] Calendar Days
from EDC plus any applicable cure period not to exceed sixty (60) Calendar
Days (the "Cure Period"). Prior to expiration of the [***], Customer shall
provide Contractor with a status report of Customer's funding plans for the
first six (6) months of Milestone Payments under this Contract.

         (b) In the event Contractor has not received the [***] Payment on or
before the date of expiration of the [***] and Contractor has completed the
work effort required by Article 3.2 (Contractor Work Commitment) above, the
following shall apply during the Cure Period:

                  (1)      Contractor shall be entitled to stop Work;

                  (2)      the Delivery Schedule shall be adjusted on a
                           day-for-day basis, together with adjustments for
                           associated delays related to establishment of Launch
                           Periods and Launch Slots;

                  (3)      the Payment Plan set forth in Exhibit G (Payment Plan
                           and Termination Liability Amounts) shall be adjusted
                           in accordance with the revised Delivery Schedule; and

                  (4)      the Contract Price shall be increased by an aggregate
                           total of [***] during the Cure Period, on a daily pro
                           rata basis in accordance with the following table:

<Table>
<Caption>
                              ---------------------------------------------------------------------------------------
                                                                   TABLE 3.3(b)
                                                             CONTRACT PRICE INCREASES
                              ---------------------------------------------------------------------------------------
                              FOLLOWING [***]                                             INCREASE (USD)
                              (CURE PERIOD)
                              ---------------------------------------------------------------------------------------
<S>                                                                             <C>
                              1st 30 Calendar Days                                          $[***]
                                                                               (or daily pro-rated portion thereof
                                                                                    (daily rate of $[***]))
                              ---------------------------------------------------------------------------------------
                              2nd 30 Calendar Days                                         $[***]
                                                                               (or daily pro-rated portion thereof
                                                                                   (daily rate of $[***]))
                              ---------------------------------------------------------------------------------------
</Table>

         For example, if Contractor receives the [***] Payment on the
fortieth (40th) Calendar Day after expiration of the [***], the Contract
Price shall be increased by

                                       19

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

[***] (that is, $[***] for the first thirty (30) Calendar Days plus $[***]
for the ten (10) Calendar Days in excess of the first thirty (30) Calendar
Days ($[***] multiplied by 10 for the last ten (10) Calendar Days)).

         In the event the above Contract Price increases are incurred, the
Parties shall mutually agree to appropriate amendments to Exhibit G (Payment
Plan and Termination Liability Amounts).

         (c) In the event Contractor does not receive the [***] Payment on or
before the expiration of the Cure Period and Contractor has completed the
work specified in Article 3.2 (Contractor Work Commitment) above, the
following shall apply:

                  (1)      Contractor shall be entitled to retain the first
                           [***] Milestone Payments and the Calendar Payment for
                           Long-Lead Items made during such [***] in full;

                  (2)      With the exception of Contractor's Intellectual
                           Property, Contractor shall deliver to Customer all
                           inventory, technical documents and all work in
                           process relating to the Work developed or produced by
                           Contractor during the [***], provided that all
                           payments (other than the [***] Payment) have been
                           made by Customer; and

                  (3)      this Contract shall terminate and the Parties shall
                           have no further obligations to each other, except as
                           expressly set forth in Article 22 (Confidential
                           Information).


                                       20


<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

4. CONTRACT PRICE

         4.1 CONTRACT PRICE.

         (a) In accordance with this Contract, Customer shall pay Contractor
for the Work the Contract Price set forth in Table 4.1 below. The Contract
Price [***] shall be paid in accordance with Article 5 (Payment).

         (b) The total Contract Price is allocated as follows:

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------
                                                 TABLE 4.1

                                              CONTRACT PRICE
----------------------------------------------------------------------------------------------------------------
     ITEM                                                                                            (USD)
----------------------------------------------------------------------------------------------------------------
<S>                                                                                         <C>
      1.        1st and 2nd Satellites, including incentive amounts
                                                                                            $       [***]
----------------------------------------------------------------------------------------------------------------
      2.        Launch Services for the 1st and 2nd Satellites                              $       [***]
----------------------------------------------------------------------------------------------------------------
      3.        Communications Payload Simulator, Ground Encryptors, Satellite Control      $       [***]
                Software, and Dynamic Spacecraft Simulator
----------------------------------------------------------------------------------------------------------------
      4.        Long-Lead Activities and Items for Ground Spare Satellite                   $       [***]
----------------------------------------------------------------------------------------------------------------
      5.        Ground Spare Satellite Completion including Incentive Amounts if Satellite
                is used as an additional Satellite*                                         $       [***]
----------------------------------------------------------------------------------------------------------------
                CONTRACT PRICE                                                              $       [***]
----------------------------------------------------------------------------------------------------------------
</Table>

*The Contract Price for the Ground Spare Completion will be reduced by $[***]
if the Ground Spare Satellite is used as a replacement Satellite and
incentives will roll-over from the first or second Satellite in accordance
with Article 12.5.

         (c) In addition to the Deliverable Items identified in Table 4.1 above,
the Contract Price includes:

                  (1)      all related Training and Data and Documentation;

                  (2)      on-ground insurance covering the Work as required by
                           Article 25.1 (General Obligation);

                  (3)      transportation, including air shipment, to the Launch
                           Site and other related charges;

                  (4)      Launch Campaigns for the first and second Satellites;

                  (5)      LEOP for the first and second Satellites;

                  (6)      Mission Support Services for the first and second
                           Satellites;

                                       21

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                  (7)      pre-Launch deferred payments; and

                  (8)      Incentive Amounts.

                  (9)      Operations of the Satellites pursuant to Article 2.3
                           (Initial Satellite Operations Phase) hereof.

         (d) The Contract Price does not include:

                  (1)      Launch Insurance;

                  (2)      any interest on the pre-Launch deferred payments;

                  (3)      any interest on the Incentive Amounts;

                  (4)      Ground Software source code license;

                  (5)      Transportation costs to either a Medium-term storage
                           facility or a launch site, Storage costs, LEOP or
                           Mission Support Services for the Ground Spare
                           Satellite, and demonstrated compatibility with a
                           Launch Vehicle other than the baseline Sea Launch;
                           and

                  (6)      Any taxes, duties or other such fiscal burdens on
                           Software or equipment or any Deliverable Items
                           delivered to the Satellite Operator in Canada on
                           Customer's behalf.

         4.2 CHANGES IN CONTRACT PRICE.

         This is a firm-fixed price Contract. Except as otherwise expressly
provided in this Contract, the Contract Price is not subject to any escalation
or to any adjustment or revision.

         4.3 TAXES AND DUTIES.

         The Contract Price includes all applicable taxes and duties related
to the Work in effect as of the Effective Date of Contract, and thereafter,
including all taxes on the import of any Satellite, or component part
thereof, or any other component of the Work into any United States, French,
Chinese and/or Japanese jurisdictions, if applicable, for Launch or other
purpose, personal property taxes, imposts, sales, use, excise, value added,
and all other import and export taxes levied in connection with the
performance of the Work, wherever the Work is being carried out. The Contract
Price does not include any taxes or duties or other such fiscal burdens on
equipment, Software or other Deliverable Items delivered to the Satellite
Operator in Canada. Telesat Canada will be the importer of record for such
deliverable items and pay any such taxes, duties or other fiscal burdens in
accordance with the agreement between Customer and its Satellite Operator.
Nonetheless, if Contractor has to pay such taxes, duties or other such fiscal
burdens, Customer shall reimburse Contractor for such fiscal burdens, [***],
after receipt of an invoice from Contractor.

                                       22

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

5. PAYMENT.

         5.1 REQUESTS FOR PAYMENT AND INVOICES.

         (a) Customer shall make Milestone Payments, Major Calendar Payments and
other Calendar Payments to Contractor in accordance with the Payment Plan set
forth in Exhibit G (Payment Plan and Termination Liability Amounts) and Exhibit
G-2 (Ground Spare Satellite Payment Plan, Termination Liability Schedule and
Incentive Amounts).

         (b) With the exception of the First Milestone Payment, which shall
have been paid on or before EDC, and the [***] Payment, which shall be paid
to Contractor no later than the last day of the [***] or the last day of the
Cure Period, if any, as required by Article 3 (Effective Date of Contract
(EDC); [***]), each Milestone Payment shall be due upon Contractor completing
the applicable Milestone and submitting to Customer a Request for Payment,
accompanied by a certificate in the form of Annex I to Attachment A hereto
together with such supporting data as Contractor deems necessary or
appropriate. A Milestone shall not be regarded as completed, and no payment
shall be made, until all the Work relevant to that Milestone has been
completed and documented in accordance with applicable specifications and
procedures and all the relevant documentation and Training required under
this Contract for such Milestone has been provided to Customer.

         (c) With the exception of Program Calendar Payment No. 1, which shall
be paid on or before July 9, 1999, Contractor shall, with respect to each
Calendar Payment, provide Customer with a Request for Payment at least ten (10)
Calendar Days but no more than forty-five (45) Calendar Days in advance of the
date when such payment is required to be made by Customer pursuant to Exhibit G
(Payment Plan and Termination Liability Amounts); provided, however, each Major
Calendar Payment shall be subject to satisfaction by Contractor of the following
conditions precedent:

                  (1)      with respect to the Major Calendar Payment applicable
                           to the first Launch Vehicle, as specified in Exhibit
                           G (Payment Plan and Termination Liability Amounts),
                           Contractor will invoice Customer one hundred eighty
                           (180) Calendar Days prior to the date of the
                           scheduled Launch;

                  (2)      with respect to the Major Calendar Payment applicable
                           to the second Launch Vehicle, as specified in Exhibit
                           G (Payment Plan and Termination Liability Amounts),
                           Contractor will invoice Customer [***] Calendar Days
                           prior to the date of the scheduled Launch;

                  (3)      with each such invoice for a Major Calendar Payment,
                           Contractor shall provide certification that the
                           official Launch manifest, as established by the
                           Launch Agency, provides that the Launch Date for such
                           Launch Vehicle is no more than [***] Calendar Days
                           from the due date of the Major Calendar Payment for
                           the first launch and no more than [***] Calendar Days
                           from the due date of the relevant Major Calendar
                           Payment for the second Launch.


                                       23

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (d) Contractor shall telefax and airmail signed copies of each Request
for Payment, invoice and accompanying certificate and any supporting data to:

                  XM Satellite Radio Inc.
                  1500 Eckington Place, NE
                  Washington, DC   20002
                  Attention:  Mr. Heinz Stubblefield
                  Sr. Vice President and CFO
                  Fax Number:  202-380-4501

         5.2 PAYMENT.

         (a) MILESTONE PAYMENTS, MAJOR CALENDAR PAYMENTS AND OTHER CALENDAR
PAYMENTS.

                  (1)      Customer shall pay Contractor in full each Milestone
                           Payment, Major Calendar Payment, and other Calendar
                           Payments, as set forth in Exhibit G (Payment Plan and
                           Termination Liability Amounts) and Exhibit G-2
                           (Ground Spare Satellite Payment Plan, Termination
                           Liability Schedule and Incentive Amounts), within
                           thirty (30) Calendar Days after delivery, in
                           accordance with the procedures and upon satisfaction
                           of the conditions set forth in Article 5.1 (Requests
                           for Payment and Invoices), of a Request for Payment,
                           accompanied by a certificate in the form of Annex I
                           to Attachment A hereto, with respect to a Milestone
                           Payment, and of an invoice, with respect to any Major
                           Calendar Payment or other Calendar Payment, by wire
                           transfer to the following bank account:


                           Bank:        Bank of America


                           Address:     Concord, California, U.S.A.


                           Account No.: [***]

                  (2)      In no event shall the cumulative Milestone Payments
                           made to Contractor for the Work at any point in time
                           exceed the cumulative amounts specified up to that
                           point in time for Milestone Payments for the Work as
                           set forth in Exhibit G (Payment Plan and Termination
                           Liability Amounts), as may be modified from time to
                           time pursuant to Article 34.3 (Amendments).

                  (3)      In the event of early completion by Contractor of a
                           Milestone in advance of such Milestone completion
                           date as set forth in Exhibit G (Payment Plan and
                           Termination Liability Amounts), Customer shall not be
                           obligated to make the corresponding Milestone Payment
                           to Contractor in advance of the payment due date
                           therefore as set forth in Exhibit G.

                  (4)      Notwithstanding the foregoing, Customer, in its sole
                           discretion, may agree to make a partial payment to
                           Contractor for the partial completion of a Milestone
                           event.


                                       24

<Page>

                  (5)      Major Calendar Payments are to be made by Customer if
                           the conditions precedent thereto are met by
                           Contractor notwithstanding if Contractor is otherwise
                           in default of this Contract under Article 32.2
                           (Termination for Contractor's Default); the Parties
                           intend that Customer's remedy in such event is
                           termination of this Contract (in which case no
                           payments would be made) and not withholding of Major
                           Calendar Payments.

                  (6)      Except for disputed amounts under Article 5.3
                           (Disputed Amounts), all payments made by Customer to
                           Contractor prior to and including the Major Calendar
                           Payments and other Calendar Payments shall be deemed
                           fully earned by Contractor upon receipt of such
                           payments.

         (b) OTHER PAYMENTS. Except as otherwise expressly stated herein, all
other payments by Customer due Contractor shall be made by wire transfer to the
bank account identified in paragraph (a) above within thirty (30) Calendar Days
after receipt by Customer of a telefaxed Request for Payment (followed by an
airmailed original received by Customer within five (5) Calendar Days of receipt
of such telefaxed request).

         5.3 DISPUTED AMOUNTS.

         (a) If Customer does not agree that the Milestone associated with a
Request for Payment has been satisfactorily completed, Customer shall give
written notice to Contractor within ten (10) Calendar Days after receipt by
Customer of a Request for Payment. Upon receipt of such notice, the Parties'
respective Program Managers shall meet and use good faith efforts to resolve
such disagreement.

         (b) If the Parties' Program Managers fail to resolve such disagreement
within thirty (30) Calendar Days after receipt by Customer of the Request for
Payment, Customer shall deposit, subject to paragraph (d) below, within five (5)
Calendar Days after expiration of the aforementioned thirty (30) Calendar Day
period, all or a portion of the disputed Milestone Payment, in accordance with
Table 5.3 below, into a separate, interest-bearing account to be established by
Contractor at Contractor's commercial bank to hold solely and separately from
all other corporate funds ("In-House Escrow Account"), any such amounts that may
be disputed hereunder up to the limitations set forth in paragraph (c) below.

         (c) In no event shall any disputed amounts deposited into the In-House
Escrow Account exceed the limitations set out below in Table 5.3:

                                       25

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<Caption>
----------------------------------------------------------------------------------------------------------------------
                                                    TABLE 5.3
                  SCHEDULE OF DISPUTED AMOUNTS THAT MAY BE DEPOSITED IN THE IN-HOUSE ESCROW ACCOUNT
----------------------------------------------------------------------------------------------------------------------
           PERIOD IN WHICH DISPUTED AMOUNTS ARISE               LIMITATION ON DISPUTED AMOUNTS THAT MAY BE DEPOSITED
                                                                           IN THE IN-HOUSE ESCROW ACCOUNT
----------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>
EDC through the last day of the ninth (9th) month following                          $[***]
EDC
----------------------------------------------------------------------------------------------------------------------
The first day of the tenth (10th) month following EDC                                $[***]
through the last day of the eleventh (11th) month following
EDC
----------------------------------------------------------------------------------------------------------------------
The first day of the twelfth (12th) month following EDC to                           $[***]
the date of Launch of the second Satellite                                 (excluding Incentive Amounts)
----------------------------------------------------------------------------------------------------------------------
</Table>

         (d) To the extent, if any, the aggregate of disputed Milestone Payment
amounts exceeds the applicable limitation for the period in which the dispute
over the Milestone Payment arises, Customer shall pay to Contractor the excess
over the applicable limitation, pending resolution of the dispute in accordance
with the provisions of this Article 5.3 (Disputed Amounts).

         (e) The respective Chief Executive Officers of each Party shall meet to
resolve the dispute within five (5) Calendar Days after the aforementioned
thirty (30) Calendar Days following receipt by Customer of the Request for
Payment.

         (f) Withheld amounts shall remain in the In-House Escrow Account, or if
any amounts are paid to Contractor pursuant to paragraph (d) above, Contractor
shall retain such amounts, until the Chief Executive Officers resolve the
dispute relating to such disputed payments. In the event the Chief Executive
Officers cannot resolve such dispute, the Parties may, upon mutual agreement,
seek resolution of such dispute pursuant to Article 27.2 (Arbitration). In any
event, such unresolved dispute shall be referred to arbitration pursuant to
Article 27.2 (Arbitration) after six (6) months following the date upon which
such dispute was referred to the Chief Executive Officers. Contractor agrees
that prior to the resolution of any dispute, including any disputes ultimately
resolved in favor of Contractor, Contractor shall not remove or use any amounts
deposited in the In-House Escrow Account.

         (g) In the event it is determined by the Chief Executive Officers or
any arbitral tribunal that the payment deposited in the In-House Escrow Account
or any part thereof is due and payable to Contractor, Contractor may then
release that amount from such Account for Contractor's use and retain all
interest accrued thereon. In the event it is determined by the Chief Executive
Officers or any arbitral tribunal that the withheld payment or any part thereof
is due and payable to Customer, such amount shall be refunded to Customer within
five (5) Calendar Days after such determination, including, to the extent of the
Chief Executive Officers' determination, any amounts paid by Customer, under
paragraph (d) above, in excess of the limitation on disputed amounts otherwise
eligible to be placed in the In-House Escrow Account,


                                       26

<Page>

together with interest on the total thereof to be calculated in accordance with
Article 34.10 (Calculation of Interest).

         5.4 SET OFF.

         In the event one Party has not paid the second Party any amount that is
due and payable to the second Party under this 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 5.3 (Disputed Amounts) shall
not be considered eligible for setoff while the dispute is being resolved.

         5.5 LATE PAYMENT.

         (a) The Parties acknowledge and agree that, with respect to any
Milestone Payments, Major Calendar Payments, and other Calendar Payments,
Contractor may suffer damages as the result of any delayed receipt of such
payments and the rapid decrease, over time, of the value of the Work.
Accordingly, the Parties agree that time is of the essence in the receipt by
Contractor of Milestone Payments, Major Calendar Payments, and other Calendar
Payments, properly due Contractor, and, subject to Article 32.3 (Termination for
Customer's Default), Contractor may, upon a default in such payment by Customer,
immediately and without further notice to Customer, exercise all its rights and
remedies in accordance with the terms of this Contract.

         (b) For any payment under this Contract that is overdue, the Party
entitled to such payment shall also be entitled to interest on such payment for
each day the payment is overdue until the day payment is made, such interest to
be calculated in accordance with Article 34.10 (Calculation of Interest), unless
expressly provided otherwise in this Contract.

         5.6 PAYMENTS CURRENT AT LAUNCH.

         (a) With respect to any Milestone, Major Calendar Payment, or other
Calendar Payment, Contractor may suspend performance if Customer does not comply
with the provisions of Article 5.3 (Disputed Amounts).

         (b) Contractor shall not be required to proceed to Launch of a
Satellite unless (i) Customer is current on all payments due at that point in
time with respect to such Satellite, (ii) any and all disputes related to any
Milestone Payment and pertaining only to such Satellite to be Launched are
resolved, and (iii) any such Milestone Payment amount (related to such
Satellite) held in escrow pursuant to Article 5.3 (Disputed Amounts) is released
to Contractor, if it is ultimately determined that Contractor is entitled to
such payments.

         5.7 SECURITY INTEREST.

         (a) Customer hereby grants Contractor a first priority security
interest in any right, title, or interest Customer may have or be deemed to have
in the Work to secure Customer's obligations to Contractor under this Contract.
Customer shall have no interest in the Work, except as specifically provided in
this Article 5.7 (Security Interest) and in paragraph (c) of Article 32.2
(Termination for Contractor's Default).


                                       27

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (b) The Parties agree that, upon Contractor's reasonable request,
Customer shall sign and permit Contractor to file, for precautionary purposes,
appropriate Uniform Commercial Code financing statements or any similar document
having the same effect in foreign countries, reflecting Contractor's right,
title, and interest to the Deliverable Items prior to receipt of the Major
Calendar Payments, provided that Contractor, at its sole expense, shall be
responsible for preparing such financing statements and terminating such
financing statements as required by this Article 5.7 (Security Interest).

         (c) Contractor agrees to release and terminate its security interest,
and to terminate any related financing statements, in accordance with the
following:

                  (1)      Subject to Article 5.6 (Payments Current at Launch),
                           with respect to the first Satellite, Contractor's
                           security interest therein shall be released and
                           terminated upon Launch of the first Satellite;

                  (2)      Subject to Article 5.6 (Payments Current at Launch),
                           with respect to the second Satellite and all other
                           Deliverable Items under this Contract, Contractor's
                           security interest in the second Satellite and all
                           other Deliverable Items comprising the Work, shall be
                           released and terminated upon Launch of the second
                           Satellite;

                  (3)      with respect to the Ground Spare Satellite,
                           Contractor's security interest therein shall be
                           released and terminated upon payment of [***]
                           in deferred financing and any applicable interest
                           thereon or Launch (whichever occurs earlier); and

                  (4)      with respect to a Launch Vehicle, Contractor's
                           security interest therein shall be released and
                           terminated upon Contractor's receipt of the Major
                           Calendar Payment applicable to such Launch Vehicle.

         (d) Customer represents and warrants that, prior to release of
Contractor's security interest in accordance with this Article 5.7 (Security
Interest), Customer's assets do not and will not secure the liabilities of any
parent entity, or any other person or other entity.

         (e) The preceding representations and warranties of Customer apply
(i) with respect to the first Satellite, only prior to Launch of the first
Satellite; (ii) with respect to the second Satellite and all other
Deliverable Items, only prior to Launch of the second Satellite; and (iii)
with respect to the Ground Spare Satellite, only prior to payment of [***] in
deferred financing and any applicable interest thereon or Launch (whichever
occurs earlier). Such representations and warranties of Customer shall not
apply to any financing entered into by Customer or Customer's Affiliates to
obtain the funding for a Major Calendar Payment required pursuant to this
Contract which results in the Major Calendar Payment being made substantially
concurrently with such financing being obtained for such payment.

         5.8 PAYMENT AND DEFERRED FINANCING FOR THE GROUND SPARE SATELLITE.

                                       28

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (a) The price for the Ground Spare Satellite will be paid in accordance
with the payment plan attached hereto as Exhibit G-2 (Ground Spare Satellite
Payment Plan, and Termination Liability Amounts, and Incentive Amounts).

         (b) Contractor shall provide [***] of deferred financing payable in
quarterly installments of interest only, over five (5) years from the date
that the Ground Spare Satellite is Available for Shipment (no earlier than
[***]), with the principal of such amount to be paid at the end of such five
(5) year period. Contractor shall retain title to, and store (in accordance
with Article 14.4 (Storage)), the Ground Spare Satellite prior to Launch or
other disposition by Customer and repayment of principal by Customer. In the
event of a Launch or other disposition of the Ground Spare Satellite by
Customer, Customer shall either repay the outstanding principal balance prior
to Launch Readiness Review, or provide alternative security reasonably
acceptable to Contractor.

         (c) Such quarterly installments of interest shall be calculated at a
rate equal to [***] compounded annually, computed beginning on the date that
the Ground Spare Satellite is Available for Shipment to its Designated Launch
Site, and continuing for five (5) years or until repayment of the outstanding
principal.

                                       29


<Page>

6. ACCESS TO WORK

         6.1 FACILITIES.

         (a) Subject to Article 6.10 (Consultant Access), Contractor shall
provide Customer Personnel reasonable access to all Work (including
work-in-progress, documentation, and testing) at the facilities of Contractor
and the Subcontractors, during regular business hours, or such other times as
Work is being performed under this Contract, provided such access does not
unreasonably interfere with such Work and access to Work is coordinated through
Contractor's program office.

         (b) The Parties agree that Customer Personnel shall be provided fifteen
(15) non-escort permanent badges and twenty-five (25) escort permanent badges to
agreed work areas where the Work is being performed, subject to Customer
identifying such personnel to Contractor and such personnel satisfying
Contractor's normal security clearance requirements.

         (c) Contractor shall arrange with the Launch Agency(ies) for Customer
VIPs to attend the Launch of a Satellite, subject to any limitations of such
Launch Agency.

         6.2 OFFICE SPACE.

         Contractor shall provide office space and facilities at Contractor's
facilities for the accommodation of up to six (6) Customer Personnel. Contractor
shall make reasonable work space available for such Customer Personnel at
environmental test facilities (if located off site) and shall use reasonable
efforts to ensure that facilities are provided for up to two (2) such Customer
Personnel at other selected Major Subcontractors' plants on a temporary basis to
attend meetings or witness tests, except that (i) with respect to facilities at
a Designated Launch Site, Contractor shall use reasonable efforts to ensure that
office space facilities are provided for up to five (5) Customer Personnel and,
in the case of a Launch by Sea Launch, Contractor shall ensure that two (2)
Customer Personnel are entitled to a berth on a viewing boat for an extended
period of time prior to and during Launch and (ii) the facilities at the Payload
Subcontractor (Alcatel) shall be on a permanent basis. At a minimum, Contractor
shall provide desks, chairs, office supplies, local telephone service,
reasonable long distance telephone usage, car parking facilities, and access to
meeting rooms, copying machines and facsimile equipment, and, as available,
access to and use of video conferencing facilities at Contractor's facilities.
Customer shall reimburse Contractor for all long distance telecommunications
charges, whether incurred in connection with voice or facsimile transmission or
video conferencing.

         6.3 SECURITY.

         Customer Personnel visiting any facility of Contractor or a
Subcontractor (i) will abide by Contractor's security regulations and/or those
of its Subcontractors and any and all applicable Laws of the jurisdiction in
which a Contractor or Subcontractor facility is located, provided, however,
Customer Personnel are advised in writing of any such security regulations prior
to such visits; (ii) subject to Article 20 (Intellectual Property Rights) and
Article 22 (Confidential Information), will use any information received in
connection with the access provided hereunder only in the performance of this
Contract; and (iii) will not remove any documents,


                                       30

<Page>

materials, or other items from any facility of Contractor or its Subcontractors
(other than Data and Documentation and other documents delivered to Customer
Personnel for Customer's use and with no requirement to return to Contractor)
without the express written consent of Contractor's Program Manager.

         6.4 DATA AND DOCUMENTATION.

         (a) Customer Personnel will have reasonable access at the facilities of
Contractor and the Subcontractors, for evaluation and inspection purposes only,
to (i) Data and Documentation; (ii) Work-in-progress, technical and schedule
data and documentation relevant to the Work; (iii) drawings, circuit diagrams
and schematics, specifications, standards or process descriptions relevant to
the Work; and (iv) data and documentation provided to Contractor by its
Subcontractors relevant to the Work. To facilitate Customer's work in this
respect, Contractor will allow Customer Personnel reasonable access to all
indexes related to the materials set forth in this paragraph (a).

         (b) Subject to Article 6.3 (Security), where the materials described in
paragraph (a) are 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, Final Acceptance, or
operation of the Work, or any part thereof, and the components thereto,
Contractor will, subject to Article 22 (Confidential Information), make
available to Customer Personnel copies of such documentation on the reasonable
request of Customer Personnel at no charge to Customer.

         (c) All Data and Documentation shall be in the English language.

         (d) Any data provided by a Party to the other Party in electronic form
shall be embodied in, or in a form compatible with, commercially available
software.

         6.5 ELECTRONIC ACCESS.

         (a) With respect to electronically generated information, Contractor
will provide Customer with a copy of and/or electronic access (via the Internet,
Contractor e-mail, proprietary or otherwise, or as agreed upon) to such
information as is necessary to keep Customer advised, on a current basis, of
program issues, decisions, and problems. Contractor shall provide Customer
Personnel access to Contractor's electronic mail systems through the Internet,
such access to be at Customer's cost. If requested in writing by Customer,
Contractor shall establish secure data links between its and Customer's
facilities such that Customer has remote electronic access to those
project-related documents identified in Exhibit B (SOW); provided, however,
Contractor shall be required to provide such links for a high-data transfer rate
(such as for satellite telemetry) only on an as needed basis, with each Party
bearing the costs of establishing the link at its end.

         (b) Contractor will also provide Customer Personnel with "real time"
access to all measured data for the Work taken at Contractor's and/or
Subcontractors' facilities on a non-interference, no-cost basis.


                                       31

<Page>

         6.6 MEETINGS AND REVIEWS.

         (a) Customer Personnel shall be entitled to attend the meetings and
reviews (including meetings and reviews held by electronic means) of Contractor
and of Contractor with any Subcontractor(s) where such meetings and reviews (or
portions of such meetings and reviews) are related to Customer's project
schedule, management, engineering, design, manufacturing, integration, testing,
or Launch and shall have the right to participate in and make recommendations,
but not to control, give directions or assign actions, in all meetings and
reviews at the system, subsystem and unit level, as well as in internal program
reviews. Contractor shall (i) submit an agenda at least ten (10) Calendar Days
in advance of the meeting or review, (ii) take minutes, (iii) maintain an action
items list, and (iv) circulate the minutes and action items to Customer within
five (5) Calendar Days following the meeting or review.

         (b) In the event a meeting or review is convened at the facilities of
Contractor or a Subcontractor relating to the Work, Contractor shall, except as
otherwise provided in these Terms and Conditions of this Contract, provide
reasonable advance notice in writing to Customer (e.g., one week for regularly
scheduled meetings) and shall make reasonable and appropriate arrangements to
facilitate the entry of Customer Personnel to the meeting place.

         (c) Notwithstanding the foregoing, Customer and Contractor acknowledge
and agree that a large number of meetings, including impromptu meetings, will be
held during the normal course of performance of this Contract and that, in all
instances of meetings relating to this Contract, notice to Customer or
Customer's presence at all such meetings may not be practicable. Accordingly,
Contractor is not required to provide notice to Customer of such impromptu,
unscheduled, informal and otherwise casual meetings (informal meetings),
provided that Contractor shall supply to Customer within a reasonable time
following any such informal meeting, any material notes, decisions, actions
items or other such product of such informal meetings that would otherwise be
provided to Customer at meetings Customer would normally attend.

         6.7 LAWS.

         Contractor's obligations under this Article 6 (Access to Work) shall be
subject to any and all applicable Laws of any country, state, or territory
having jurisdiction over the Work, and to Contractor's standard security rules
and regulations; provided, however, Contractor shall use its best efforts to
ensure its internal security rules and regulations do not unduly restrict access
or viewing by Customer Personnel.

         6.8 NO RELIEF.

         The inspection, examination, observation, agreement to or approval,
waiver or deviation by Customer with respect to any design, drawing,
specification, or other documentation produced under this Contract shall not
relieve Contractor from fulfilling its contractual obligations or result in any
liability being imposed on Customer, unless and to the extent such waiver,
deviation, agreement, or approval specifically provides in writing for such
relief to Contractor or such imposition of liability on Customer.


                                       32

<Page>

         6.9 MAJOR SUBCONTRACTS.

         Contractor shall require that any Major Subcontract entered into
substantially concurrently with or following the execution of this Contract
include a provision substantially similar to this Article 6 (Access to Work) to
ensure Customer's rights under this Contract, but Contractor shall not be
required to amend any bulk procurement contract to include such provision.

         6.10 CONSULTANT ACCESS.

         Customer shall submit to Contractor the individual name(s) and
citizenship information pertaining to any proposed representatives or
Consultants who require access to any premises and/or any Contractor or
Subcontractor proprietary information, and Contractor shall have the right to
approve such access for such representatives or Consultants. Contractor shall
approve or disapprove of any such individual name(s) submitted by Customer for
such access within five (5) Business Days of Customer's submission except in the
case of submissions made during Contractor's end-of year Holiday shutdown, in
which case Contractor shall provide such approval or disapproval within ten (10)
Business Days. Such approval shall not be withheld by Contractor unless (i)
Contractor reasonably believes such representative or Consultant is employed by,
or is an Affiliate of a direct competitor of Contractor, or (ii) Contractor has
knowledge of incidents in which such representative or Consultant demonstrated
behavior or activity that, in Contractor's reasonable judgment, is incompatible
with Contractor's ability to achieve the objectives of this Contract. In the
event Contractor disapproves of a representative or Consultant proposed by
Customer, Contractor shall provide Customer with an explanation, which need not
be written, of its reasons for disapproval.

                                       33

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         7. DELIVERY AND DELIVERY INCENTIVES

         (a) Deliverable Items, as listed in Table 7.1 below, shall be Delivered
by Contractor to the destinations indicated, on or before the dates ("Delivery
Dates") specified in such Table, as such Delivery Dates may be adjusted in
accordance with this Contract.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------
                                    TABLE 7.1
                                DELIVERY SCHEDULE
-------------------------------------------------------------------------------------------------------------------
      DELIVERABLE ITEM                  DELIVERY DATE OR PERFORMANCE DATE      PLACE OF DELIVERY
-------------------------------------------------------------------------------------------------------------------
<S>                                     <C>                                    <C>
1.    1st Satellite, Launch             December 31, 2000*                     Specified Orbital Location for the
      Campaign, Launch Services,                                               Satellite, and other locations for
      and LEOP (1st Satellite to                                               the provision of services as
      Initial Handover)                                                        specified in Exhibit B (SOW)
-------------------------------------------------------------------------------------------------------------------
2.    Pre-Eclipse Test Report with      [***] following completion of          Customer's Facilities
      respect to the 1st Satellite       In-Orbit Testing
-------------------------------------------------------------------------------------------------------------------
3.    Post-Eclipse Test Report          [***] following the end of the         Customer's Facilities
      with respect to the 1st           first full eclipse period after
      Satellite                         Launch
-------------------------------------------------------------------------------------------------------------------
4.    2nd Satellite, Launch             April 11, 2001*                        Specified Orbital Location for the
      Campaign, Launch Services,                                               Satellite, and other locations for
      and LEOP (2nd Satellite to                                               the provision of services as
      Initial Handover)                                                        specified in Exhibit B (SOW)
-------------------------------------------------------------------------------------------------------------------
5.    Pre-Eclipse Test Report with      [***] following completion of          Customer's Facilities
      respect to the 2nd Satellite      In-Orbit Testing
-------------------------------------------------------------------------------------------------------------------
6.    Post-Eclipse Test Report          [***] following the end of the         Customer's Facilities
      with respect to the 2nd           first full eclipse period after
      Satellite                         Launch
-------------------------------------------------------------------------------------------------------------------
7.    Ground Spare Satellite            [***]                                  FOB Contractor's Facilities
-------------------------------------------------------------------------------------------------------------------

                                       34

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.


-------------------------------------------------------------------------------------------------------------------
                                    TABLE 7.1
                                DELIVERY SCHEDULE
-------------------------------------------------------------------------------------------------------------------
8.    Mission Support Services           [***]                                 Contractor's Facilities
-------------------------------------------------------------------------------------------------------------------
9.    a. Communications Payload          [***]                                 Customer's facilities in
      Simulator**                                                              Washington, DC
      b. Ground Encryptors
-------------------------------------------------------------------------------------------------------------------
10.   Satellite Control Software***      [***]                                 Customer's Primary and Back-Up
                                                                               Satellite Control Centers
-------------------------------------------------------------------------------------------------------------------
11.   Dynamic Spacecraft Simulator       [***]                                 Primary Satellite Control Center
      Software and Hardware
-------------------------------------------------------------------------------------------------------------------
12.   Training                          Per Exhibit B (SOW)                    Per Exhibit B (SOW)
-------------------------------------------------------------------------------------------------------------------
13.   Data & Documentation              Per Exhibit B (SOW)                    Per Exhibit B (SOW)
-------------------------------------------------------------------------------------------------------------------
</Table>

* Assumes (i) Customer makes Program Calendar Payment No.1 on or before July 9,
1999 and (ii) Customer makes timely payment in respect of Engineering Model
Reflector Work Nos. 1, 2 and 3 in accordance with Exhibit G (Payment Plan and
Termination Liability Amount).

** In case of a problem with the Satellite, the engineering models delivered
with the Communications Payload Simulator will be returned to Contractor, at
Contractor's cost, for investigation and testing.

*** If after final definition of the training program provided for in Exhibit
B of this Contract, Customer determines, in its reasonable discretion, that
the [***] time period available for on-site operator training at Customer's
facilities is not sufficient, Contractor agrees to install, at [***],
software that is the then current release of the Satellite Control Center
Software to be provided under this Contract in order to provide additional
time for such training.

         (b) Contractor understands and agrees that, with respect to the
Delivery Dates for all Deliverable Items, whether those items are set out in
this Contract or subsequent Amendments to this Contract, time is of the essence
under this Contract. Nothing in the foregoing sentence shall in any way modify
either the specific remedies for default specified elsewhere in this Contract,
including Article 10 (Liquidated Damages for Late Delivery), Article 32.2
(Termination for Contractor's Default), or Article 10.3 (Termination for
Unexcused Delay), or the specific dispute resolution requirements specified in
this Contract.

         (c) Packing and shipping shall be in accordance with standard
commercial practices of the aerospace industry and applicable Laws and shall be
effected in such a manner so as to ensure that the item reaches its destination
undamaged.

                                       35

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         (d) Contractor's obligation to Deliver the Work in accordance with
the Delivery Schedule set forth in Table 7.1 above is conditioned upon the
following occurring on or before July 9, 1999: (i) Contractor receives
Program Calendar Payment No. 1 in the amount of Sixty-Eight Million Dollars
($68,000,000) and (ii) Customer raises a minimum of [***] in financing.

         (e) If Contractor Launches both the first Satellite and the second
Satellite on or before December 31, 2000, Customer shall pay Contractor an
amount equal to Six Million Dollars ($6,000,000) (in addition to the Contract
Price) on or before thirty (30) Calendar Days after Launch of the second
Satellite.

                                       36


<Page>

8. INSPECTION AND FINAL ACCEPTANCE

         8.1 PRELIMINARY INSPECTIONS.

         Preliminary inspections of all Work may be made by Customer or its
designated representative at Contractor's or a Subcontractor's facility. All
such inspections shall be made in the presence of a representative of
Contractor. In the event Customer informs Contractor in writing of any Defects
in the Work, Contractor shall remedy such Defects pursuant to the procedures to
remedy Defects as set forth in Article 13 (Corrective Measures in Unlaunched
Satellites and Other Deliverable Items).

         8.2 SHIPMENT READINESS REVIEW.

         (a) Prior to shipment of each Satellite to the Designated Launch Site,
Contractor shall conduct a Shipment Readiness Review in accordance with the
requirements contained in Exhibit B (SOW) and Exhibit D (Test Plan Requirements)
at Contractor's plant. The Shipment Readiness Review shall consist of reviewing
the Satellite's ground test results in accordance with Exhibit D (Test Plan
Requirements). Contractor shall provide Customer at least fifteen (15) Business
Days advance written notice of the first Shipment Readiness Review for each
Satellite. Customer shall have the right to witness such review and the right to
either concur or not concur that the Satellite under review meets the
requirements of this Contract and is ready for shipment.

         (b) The Shipment Readiness Review shall verify:

                  (1)      the Satellite's ground testing has been completed in
                           accordance with Exhibit D ( Test Plan Requirements);
                           and

                  (2)      except as provided in paragraph (c) below, all
                           Defects have been corrected; and

                  (3)      the Satellite, ground support equipment for handling
                           and/or transporting the Satellite in preparation for
                           Launch, and supporting documentation are ready for
                           shipment based on an inspection of the Satellite and
                           such ground support equipment and an examination of
                           such supporting documentation.

         (c) It is the intent of the Parties that all Work that can be
accomplished at Contractor's facility will be completed prior to shipment to the
Designated Launch Site. Notwithstanding that intent, Contractor may, with
respect to certain limited Defects, conclude that such Defects can be
effectively remedied after shipment, in which case Contractor may, after receipt
of written approval from Customer, ship a Satellite to the Designated Launch
Site where such Defects shall be remedied.

         (d) Successful completion of the Shipment Readiness Review for each
Satellite shall arise upon the occurrence of any of the following:

                  (1)      The Shipment Readiness Review demonstrates compliance
                           in all respects with the provisions of paragraph (b)
                           above; Customer shall notify

                                       37

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                           Contractor of its acceptance of the Shipment
                           Readiness Review within a maximum of three (3)
                           Business Days following completion of such review; or

                  (2)      The Shipment Readiness Review complies in all
                           respects with paragraph (b) above, save for minor
                           non-conformances or discrepancies that have not been
                           corrected but which Contractor demonstrates to
                           Customer's satisfaction at the review have no adverse
                           effect upon the performance of the Satellite;
                           Customer shall notify Contractor of its acceptance of
                           the Shipment Readiness Review and the waiver of its
                           right to compel correction within three (3) Business
                           Days following completion.

         (e) If the Shipment Readiness Review reveals any Defects that require
correction, Customer shall, within three (3) Business Days after such review,
notify Contractor in writing of its rejection of the Shipment Readiness Review
and request correction of such Defects. Contractor shall, at its expense,
promptly correct the Defects referred to therein and, promptly following such
correction, shall notify Customer that the corrections have been made and shall
invite Customer to send Customer Personnel to attend an inspection at which they
will be entitled to verify such corrections have been satisfactorily made
(second round Shipment Readiness Review). Customer shall be given at least three
(3) Business Days written notice of such inspection. The provisions of this
Article 8.2 (Shipment Readiness Review) shall thereafter apply similarly to that
inspection as if that inspection was the original Shipment Readiness Review. In
the event of any disagreement between Customer and Contractor relating to the
second round Shipment Readiness Review, the Senior Executive Level
representatives of the Parties shall use best reasonable efforts promptly to
resolve such dispute.

         (f) In the event of any waiver by Customer of its right to compel
correction of a Defect, Contractor shall nevertheless provide Customer with a
written price proposal for the cost of correction of such Defect at the time of
waiver ("Baseline Correction Cost").

         (g) Notwithstanding anything to the contrary herein, Contractor
shall correct any Defects previously waived by Customer, if requested by
Customer and if time permits consistent with the Launch schedule. In such
event, Contractor and Customer agree that the cost of such correction shall
be shared as follows: Contractor shall be solely responsible for the cost of
correction of the previously waived Defect up to the Baseline Correction
Cost. If the cost of correction of the previously waived Defect exceeds the
Baseline Correction Cost, Contractor and Customer [***] above and beyond the
Baseline Correction Cost, up to a maximum aggregate increased cost amount of
[***]. Any cost of correction in excess of the Baseline Correction Cost [***],
shall be the sole responsibility of Customer.

         (h) Upon successful completion of the Shipment Readiness Review, such
Satellite shall be deemed to be Available for Shipment and shall be shipped to
its applicable Designated Launch Site.

                                       38

<Page>

         8.3 FLIGHT READINESS REVIEW.

         (a) Prior to integration of each Satellite with a Launch Vehicle at the
Designated Launch Site, a Flight Readiness Review (FRR) shall be conducted by
Contractor in accordance with Exhibit B (SOW) and Exhibit D (Test Plan
Requirements). Contractor shall give Customer at least five (5) Business Days
written notice of the FRR. The purpose of the FRR is for Contractor to confirm
that each Satellite is ready to be integrated with a Launch Vehicle. Prior to
integration of such Satellite with a Launch Vehicle, any Defects in such
Satellite or other equipment as may remain from the Shipment Readiness Review,
or resulting from shipment or otherwise discovered during Satellite launch
preparations, shall have been remedied pursuant to the procedures to remedy
Defects as set forth in Article 13 (Corrective Measures in Unlaunched Satellites
and Other Deliverable Items).

         (b) Successful completion of the FRR shall arise upon the occurrence of
any of the following:

                  (1)      The FRR demonstrates compliance in all respects with
                           the provisions of this Contract; Customer shall
                           notify Contractor in writing of its acceptance of the
                           FRR at the FRR; or

                  (2)      The FRR demonstrates compliance with the provisions
                           of this Contract, save for minor non-conformances or
                           discrepancies that have not been corrected but that
                           Contractor, at the review, demonstrates to Customer's
                           satisfaction have no adverse effect upon the
                           performance of the Satellite; Customer shall notify
                           Contractor in writing of its acceptance of the FRR
                           and the waiver of its right to compel correction at
                           the FRR.

         (c) If the FRR reveals any Defects that require correction, Customer
shall, at the FRR, notify Contractor in writing of its rejection of the FRR and
request correction of such Defects. Contractor shall, at its expense, correct
such Defects and, following such correction, shall notify Customer that the
corrections have taken place and invite Customer to send Customer Personnel to
attend an inspection to verify that such corrections have been satisfactorily
made (second round FRR). Customer shall be given at least three (3) Business
Days written notice of such inspection. Customer shall notify Contractor in
writing of its acceptance or rejection of the second round FRR at the second
round FRR. In the event of any disagreement between Customer and Contractor
relating to the second round FRR, the Senior Executive Level representatives of
the Parties shall use reasonable efforts promptly to resolve such dispute.

         (d) In the event of any waiver by Customer of its right to compel
correction of a Defect, Contractor shall nevertheless provide Customer with a
written price proposal for the cost of correction of such Defect at the time of
waiver ("Baseline Correction Cost").

         (e) Notwithstanding anything to the contrary herein, Contractor shall
correct any Defects previously waived by Customer, if requested by Customer and
if time permits consistent with the Launch schedule. In such event, Contractor
and Customer agree that the cost of such correction shall be shared as follows:
Contractor shall be solely responsible for the cost of


                                       39

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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

correction of the previously waived Defect up to the Baseline Correction
Cost. If the cost of correction of the previously waived Defect exceeds the
Baseline Correction Cost, Contractor and Customer [***] above and beyond the
Baseline Correction Cost, up to a maximum aggregate increased cost amount of
[***]. Any cost of correction in excess of the Baseline Correction Cost [***]
shall be the sole responsibility of Customer.

         (f) Upon successful completion of the FRR, the Satellite shall be
released by Customer for integration with the Launch Vehicle.

         8.4 LAUNCH READINESS REVIEW.

         In accordance with the provisions of Exhibit B (SOW), Contractor shall
support the Launch Agency during the Launch Agency's Launch Readiness Review. In
the event any Defect in the Satellite is discovered during the Launch Readiness
Review, Contractor shall correct such Defects in accordance with Article 13
(Corrective Measures in Unlaunched Satellites and Other Deliverable Items).

         8.5 IN-ORBIT TESTING AND FINAL ACCEPTANCE OF SATELLITES.

         (a) IN-ORBIT TESTING.

                  (1)      Upon arrival of each Launched Satellite at its
                           Specified Orbital Location, Contractor shall perform
                           tests and analyses on such Satellite in accordance
                           with the In-Orbit Test Plan, developed by Contractor
                           and approved by Customer, pursuant to the
                           requirements of Exhibit B (SOW) and Exhibit D (Test
                           Plan Requirements) to determine whether and to what
                           extent such Satellite meets the requirements set
                           forth in such In-Orbit Test Plan.

                  (2)      For each Satellite, promptly upon completion of
                           Pre-Eclipse In-Orbit Testing, Contractor shall
                           conduct an in-orbit acceptance review and provide a
                           documentation package setting forth the in-orbit test
                           data required by, and in a condition fully conforming
                           to, the requirements of Exhibit B (SOW) and Exhibit D
                           (Test Plan Requirements). "Initial Handover" of a
                           Satellite shall occur upon completion of Pre-Eclipse
                           In-Orbit Testing and provision of such In-Orbit
                           Acceptance Test Review documentation package.
                           Customer may begin commercial use of a Satellite upon
                           Initial Handover of such Satellite.

                  (3)      Subject to Article 8.10 (Launch and Early Operations
                           (LEOP)), promptly upon completion of Pre-Eclipse
                           In-Orbit Testing, but no later than sixty (60)
                           Calendar Days after Launch, Contractor shall furnish
                           Customer with the Pre-Eclipse Test Report in full
                           compliance with the requirements of this Contract.

                  (4)      Promptly upon completion of In-Orbit Testing and one
                           full eclipse period, Contractor shall furnish
                           Customer with the Post-Eclipse Test Report in full
                           compliance with the requirements of this Contract;
                           provided, however, in


                                       40

<Page>

                           the case of a Constructive Total Loss, Contractor may
                           so furnish such Post-Eclipse Test Report prior to one
                           full eclipse period.

         (b) FINAL ACCEPTANCE OF PRE-ECLIPSE AND POST-ECLIPSE TEST REPORTS AND
SATELLITES.

                  (1)      Final Acceptance of the Pre-Eclipse Test Report and
                           Post-Eclipse Test Report shall be in accordance with
                           the provisions of paragraph (c) of Article 8.9 (Data
                           and Documentation).

                  (2)      Except as provided in Article 14.4(h)(i) (Storage),
                           Final Acceptance of each Satellite shall occur upon
                           successful completion of In-Orbit Testing following
                           arrival of the Satellite at its Specified Orbital
                           Location and confirmed by Contractor providing to
                           Customer the Pre-Eclipse and Post-Eclipse Test
                           Reports in a condition fully conforming to the
                           provisions of this Contract.

         (c) In all circumstances in which a Satellite is a Constructive Total
Loss or Total Loss, Contractor shall have no further acceptance obligations with
respect to such Satellite, except to provide a loss investigation report.

         8.6 FINAL ACCEPTANCE OF GROUND SPARE SATELLITE.

         Final Acceptance of the Ground Spare Satellite, if the option to
purchase the Ground Spare Satellite is exercised pursuant to Article 30
(Options), shall occur when such Ground Spare Satellite is Available for
Shipment, unless, within a reasonable period of time (to permit Contractor to
conduct the necessary actions to support a Launch of the Ground Spare Satellite)
prior to the Available for Shipment date for the Ground Spare Satellite,
Customer notifies Contractor that it intends to launch the Ground Spare
Satellite. In such event, Final Acceptance of such Ground Spare Satellite shall
be determined in accordance with the appropriate provisions of this Contract or
as otherwise mutually agreed by the Parties.

         8.7 SATELLITE CONTROL SOFTWARE AND GROUND ENCRYPTORS.

         Final Acceptance of Satellite Control Software and Ground Encryptors
shall occur only upon (i) Contractor furnishing the Satellite Control Software
and Ground Encryptors at the places specified in Table 7.1 of Article 7
(Delivery), and (ii) completion of acceptance testing in accordance with Exhibit
B (SOW) and a Test Plan to be mutually developed by the Parties and approved by
Customer demonstrating the Satellite Control Software and Ground Encryptors are
furnished in a condition fully conforming to the provisions of this Contract.
The Satellite Control Software and Ground Encryptors shall be deemed to be in a
condition fully conforming to the provisions of this Contract unless rejected by
Customer in writing within fifteen (15) Business Days after Delivery of the
Satellite Control Software and Ground Encryptors. If the Satellite Control
Software and/or Ground Encryptors are unacceptable, Customer shall, within the
said fifteen (15) Business Days, notify Contractor in writing in which respects
the Satellite Control Software and Ground Encryptors contain any Defects.
Contractor shall promptly correct the Defects referred to therein and notify
Customer that the corrections have been made. The provisions of this Article 8.7
(Satellite Control Software and Ground Encryptors) shall thereafter apply to the
corrected Satellite Control Software and Ground Encryptors.


                                       41
<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         8.8 DYNAMIC SPACECRAFT SIMULATOR AND COMMUNICATIONS PAYLOAD SIMULATOR.


         Final Acceptance of each of the Dynamic Spacecraft Simulator and
Communications Payload Simulator ("Simulators") shall occur only upon (i)
Contractor furnishing the Simulators at the places specified in Table 7.1 of
Article 7 (Delivery) and (ii) completion of acceptance testing in accordance
with Exhibit B (SOW) and a Test Plan to be mutually developed by the Parties and
approved by Customer no later than [***] demonstrating each Simulator is
furnished in a condition fully conforming to the provisions of this Contract.
A Simulator shall be deemed to be in a condition fully conforming to the
provisions of this Contract unless rejected by Customer in writing within
fifteen (15) Business Days after receipt of said Simulator. If a Simulator is
unacceptable, Customer shall, within the said fifteen (15) Business Days,
notify Contractor in writing in which respects the Simulator contains any
Defects. Contractor shall promptly correct the Defects referred to therein
and notify Customer that the corrections have been made. The provisions of
this Article 8.8 (Dynamic Spacecraft Simulator and Communications Payload
Simulator) shall thereafter apply to the corrected Simulator.

         8.9 DATA AND DOCUMENTATION.

         (a) Final Acceptance of Data and Documentation, or any part thereof,
shall occur only when the Data and Documentation, or such part thereof, have
been furnished to Customer in a condition fully conforming to the provisions of
this Contract. Any Data and Documentation furnished to Customer shall be
accompanied by written notice from Contractor specifying that portion of the
Data and Documentation being furnished.

         (b) Data and Documentation, or any part thereof, other than Data and
Documentation that requires approval and acceptance by Customer in accordance
with (c) below, shall be deemed to be in a condition fully conforming to the
provisions of this Contract unless rejected by Customer in writing within
fifteen (15) Business Days after receipt of said Data and Documentation, or part
thereof. If such Data and Documentation, or part thereof, not requiring approval
and acceptance by Customer, are unacceptable, Customer shall, within the said
fifteen (15) Business Days, notify Contractor in writing in which respects the
Data and Documentation, or part thereof, contain any Defects. Contractor shall
promptly correct the Defects referred to therein and shall notify Customer that
the corrections have been made. The provisions of this Article 8.9 (Data and
Documentation) shall thereafter apply to the corrected Data and Documentation.

         (c) Final Acceptance of any Data and Documentation requiring approval
by Customer in accordance with Exhibit B (SOW) shall occur when such approval
has been granted by Customer in writing. Customer shall notify Contractor in
writing of its acceptance or rejection of such Data and Documentation within
fifteen (15) Business Days after receipt of such Data and Documentation by
Customer; 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 27 (Dispute Resolution).


                                       42

<Page>

         8.10 LAUNCH AND EARLY OPERATIONS (LEOP).

         Final Acceptance of LEOP services for each Satellite shall occur upon
Contractor furnishing to Customer LEOP services in accordance with the Delivery
Schedule and in a condition fully conforming to the provisions of this Contract,
including furnishing the Pre-Eclipse Test Report and Post-Eclipse Test Report in
accordance with Article 8.5 (In-Orbit Testing and Final Acceptance of
Satellites). LEOP services shall be deemed to be in a condition fully conforming
to the requirements of this Contract unless rejected by Customer in writing
within ten (10) Business Days after the date Customer has knowledge of the
non-conforming condition. If the LEOP services furnished are unacceptable,
Customer shall, within the said ten (10) Business Days, notify Contractor in
writing in which respects the LEOP services contain any Defects. Contractor
shall correct such Defects, to the extent possible, within fifteen (15) Calendar
Days of receipt of notice and shall notify Customer that the corrections have
been made. The provisions of this Article 8.10 (Launch and Early Operations
(LEOP)) shall thereafter apply to the corrected LEOP services.

         8.11 RESERVED.

         8.12 TRAINING.

         Final Acceptance and Delivery of Training, or any part thereof, shall
occur upon Contractor furnishing Training to Customer and its Satellite
Operator, or such part thereof, in accordance with the Delivery Schedule and in
a condition fully conforming to the provisions of this Contract. Any Training
furnished to Customer shall be accompanied by written notice from Contractor
specifying that portion of the Training being furnished. Training, or any part
thereof, shall be deemed to be in a condition fully conforming to the
requirements of this Contract unless rejected by Customer in writing within five
(5) Business Days after the date Customer has knowledge of the non-conforming
condition. If such Training or part thereof is unacceptable, Customer shall,
within the said five (5) Business Days, notify Contractor in writing in which
respects the Training, or part thereof, contains any Defects. Contractor shall
promptly correct such Defects and shall notify Customer that the corrections
have been made. The provisions of this Article 8.12 (Training) shall thereafter
apply to the corrected Training.

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9. TITLE AND RISK OF LOSS

         9.1 TRANSFER OF TITLE.

         Transfer of title, free and clear of all liens and encumbrances of any
kind, to each Deliverable Item (other than Satellites) shall pass to Customer at
Final Acceptance of such Deliverable Item. Transfer of title, free and clear of
all liens and encumbrances of any kind, to each Satellite shall pass to Customer
at the time of Initial Handover of such Satellite, or, in the event of a
Constructive Total Loss or Total Loss of such Satellite, at the time of such
Constructive Total Loss or Total Loss, or, in the event such Satellite is placed
in storage, as provided in Article 14.4 (Storage).

         9.2 TRANSFER OF RISK OF LOSS.

         Risk of loss or damage to each Deliverable Item shall pass to Customer
at Final Acceptance of such Deliverable Item; provided, however, risk of loss or
damage to each Satellite and its Launch Vehicle shall pass at Launch of such
Launch Vehicle; provided, however, (x) in the event of a Terminated Ignition for
a Satellite, risk of loss or damage for such Satellite and its Launch Vehicle
shall revert to Contractor upon such Terminated Ignition and shall again pass to
Customer upon the subsequent Launch of such Satellite and its Launch Vehicle,
and (y) in the event a Satellite is placed in Storage, risk of loss or damage to
such Satellite shall pass in accordance with Article 14.4 (Storage).


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requested with respect to the omitted portions.

10. LIQUIDATED DAMAGES FOR LATE DELIVERY.

         10.1 LIQUIDATED DAMAGES.

         (a) The Parties acknowledge and agree that failure to meet the Delivery
Dates specified in Article 7 (Delivery) will cause substantial financial loss or
damage being sustained by Customer. The Parties further acknowledge and agree
that the following liquidated damages are believed to represent a genuine
estimate of the loss that would be suffered by Customer by reason of any such
delay (which losses would be difficult or impossible to calculate with
certainty). The liquidated damages in this Article 10.1 (Liquidated Damages) are
in addition to the liquidated damages for delay in the launch of the Satellites
described in paragraph (e) of Article 28 (Launch Services).

         (b) In the event Contractor fails to Deliver the first or second
Satellite on or before the ninety-seventh (97th) Calendar Day following its
respective Delivery Date, as such date may be adjusted in accordance with this
Contract (the "Grace Period Expiration Date"), Contractor agrees to pay Customer
with respect to such Satellite, as liquidated damages and not as a penalty, the
following amounts for the period beginning on the first (1st) day following the
Grace Period Expiration Date and continuing for a period thereafter not to
exceed one hundred eighty (180) Calendar Days (the "Damages Period"):

                  (1)      [***] for each Calendar Day during the period
                           commencing on the first (1st) Calendar Day of the
                           Damages Period for such Satellite and continuing
                           through the one hundred twentieth (120th) Calendar
                           Day of the Damages Period;

                  (2)      [***] for each Calendar Day during the period
                           commencing on the one hundred twenty-first (121st)
                           Calendar Day of the Damages Period for such
                           Satellite and continuing through the one hundred
                           eightieth (180th) Calendar Day of the Damages
                           Period.

         (c) In the event Contractor fails to Deliver the Ground Spare Satellite
on or before [***] following the Delivery Date [***], as such date may be
adjusted in accordance with this Contract (the "Ground Spare Grace Period
Expiration Date"), Contractor agrees to pay Customer with respect to such
Satellite, as liquidated damages and not as a penalty, the following amounts
for the period beginning on the first (1st) day following the Ground Spare
Grace Period Expiration Date and continuing for a period thereafter not the
exceed [***] (the "Ground Spare Damages Period"):

                  (1)      If the Ground Spare Satellite is used as an
                           additional satellite, [***] for each Calendar Day
                           during the period commencing on the first (1st)
                           Calendar Day of the Ground Spare Damages Period
                           for such Satellite and continuing through [***] of
                           the Ground Spare Damages Period.

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                  (2)      If the Ground Spare Satellite is used as a
                           replacement Satellite, [***] for each Calendar
                           Day during the period commencing on the first (1st)
                           Calendar Day of the Ground Spare Damages Period for
                           such Satellite and continuing through [***] of the
                           Ground Spare Damages Period.

                  (3)      If the Ground Spare Satellite is used as an
                           additional Satellite, [***] for each Calendar Day
                           during the period commencing on [***] of
                           the Ground Spare Damages Period for such Satellite
                           and continuing through the one hundred eightieth
                           (180th) Calendar Day of the Ground Spare Damages
                           Period.

                  (4)      If the Ground Spare Satellite is used as a
                           replacement Satellite, [***] for each Calendar Day
                           during the period commencing on [***] of the Ground
                           Spare Damages Period for such Satellite and
                           continuing through [***] of the Ground Spare Damages
                           Period.

         (d) The total amount of liquidated damages for failure to meet the
Delivery Date for a Satellite (except the Ground Spare Satellite) shall not
exceed Eight Million Dollars ($8,000,000); the total aggregate amount of
liquidated damages for failure to meet the Delivery Dates of the first two
Satellites shall not exceed Sixteen Million Dollars ($16,000,000); and the total
amount of liquidated damages for failure to meet the Delivery Date for the
Ground Spare Satellite shall not exceed Six Million Five Hundred Thousand
Dollars ($6,500,000.00) if it is used as an additional satellite, or Six Million
Three Hundred Thousand Dollars ($6,300,000.00) if it is used as a replacement
satellite.

         (e) The liquidated damages amounts (daily and maximum amounts) set
forth in paragraphs (b), (c) and (d) above shall, at Customer's request, be
adjusted pro rata should the Satellite portion of the Contract Price be modified
pursuant to an Amendment to this Contract.

         (f) With regard to liquidated damages for late delivery of a Satellite
pursuant to this Article 10.1 (Liquidated Damages), a delay caused by a Launch
Agency shall be deemed a Contractor Excusable Delay for the first one hundred
eighty (180) Calendar Days of such delay; any Launch Agency delay after such one
hundred eighty (180) Calendar Days shall not be deemed an Excusable Delay for
the purposes of calculating Contractor's liquidated damages under this Article
10 (Liquidated Damages for Late Delivery).

         10.2 EXCLUSIVE REMEDY.

         Except as otherwise specifically provided in this Contract, the
liquidated damages provided in this Article 10 (Liquidated Damages for Late
Delivery) shall be the sole and exclusive remedy for late Delivery of a
Satellite and shall be in lieu of all monetary damages of


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any kind, provided Customer may terminate this Contract in accordance with
Article 32.2 (Termination for Contractor's Default).

         10.3 TERMINATION FOR UNEXCUSED DELAY.

         (a) In the event the Damages Period for any Satellite has expired and
the maximum total liquidated damages for such Satellite have been levied,
Customer may exercise its right to terminate this Contract, in whole or in part,
for cause pursuant to the provisions of Article 32.2 (Termination for
Contractor's Default), in which case Customer's rights shall be governed by the
provisions of that Article.

         (b) If, at [***], the Launch Agency has failed to
establish the Launch Slot for the first Satellite to begin no later than [***],
then Customer may exercise its right to terminate this Contract, in whole or
in part, for cause pursuant to Article 32.2 (Termination for Contractor's
Default), in which case, Customer's rights and obligations shall be governed
by such Article. The foregoing shall also apply if, with respect to the
second Satellite, at [***], the Launch Agency has failed to establish the
Launch Slot for the second Satellite to begin no later than [***]. Provided
Contractor is able to schedule Launch for each Satellite on another Launch
Vehicle prior to [***] as to the first Satellite and [***] as to the second
Satellite, Contractor shall, as agreed by Customer, schedule such Launch on
either an H-IIA or Long March 3B Launch Vehicle (at no additional cost to
Customer) or on another Launch Vehicle. If Launch is scheduled on a Launch
Vehicle other than an H-IIA or Long March 3B Launch Vehicle, Customer shall
pay the difference between the amount Customer is required to pay for the Sea
Launch Launch Vehicle and the cost of such other Launch Vehicle, including
Contractor's reasonable financing costs. In the event Customer, in accordance
with the provisions of this Contract, terminates the launch portion of this
Contract for either or both of the first Satellite and/or the second
Satellite, then (i) the Parties shall amend those portions of this Contract
related to such termination (e.g., transfer of title and risk of loss,
delivery schedule, acceptance, liquidated damages, termination liability and
this Article 10.3(b)) as appropriate to reflect an on-ground delivery of the
relevant Satellite, (ii) Contractor shall perform, without charge (except to
the extent included in the Contract Price), Launch Campaign, Mission Support
and LEOP Services for any launch services substituted by Customer for the
Launch Services terminated hereunder, provided, however, Customer shall pay
Contractor for those extra costs incurred by Contractor as a result of
providing Launch Campaign, Mission Support and LEOP Services to a location
other than one contemplated hereunder, (iii) Customer shall pay Contractor
for those extra costs incurred by Contractor as a result of shipping the
applicable Satellite to a launch site other than one contemplated hereunder,
and (iv) if requested by Customer, Contractor shall perform launch management
services for the substituted launch services at a price mutually agreed by
the Parties.

         (c) Liquidated damages shall not accrue for the late Delivery of any
portion of the Work after termination of this Contract for Contractor's default,
in accordance with its terms. Notwithstanding the foregoing, Customer's right to
terminate this Contract, as permitted by this Contract, due to Contractor's late
Delivery shall not prejudice Customer's right to collect those liquidated
damages that accrued to Customer prior to any such termination.


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11. EXCUSABLE DELAY

         11.1 EXCUSABLE DELAY DEFINED.

         (a) With respect to Contractor's performance of its obligations under
this Contract, an "Excusable Delay" shall be any delay in the performance of the
Work, in whole or in part, caused by an event that is beyond the reasonable
control of Contractor, its Subcontractors or their respective Affiliates,
including any acts of government in its sovereign capacity (including the
refusal, suspension, withdrawal, or non-renewal of export or import licenses
essential to the performance of the Contract); any acts of a Launch Agency
(deemed to be an Excusable Delay under paragraph (f) of Article 10.1 (Liquidated
Damages)); war (whether declared or undeclared), outbreak of national
hostilities, invasion or sabotage; fire, earthquake, flood, epidemic, explosion,
or quarantine restriction; strike or work slow down (other than at Contractor's
or a Subcontractor's facilities) not reasonably within Contractor's control;
freight embargoes; acts of God; or failure by Customer to meet its
responsibilities under this Contract where such Customer failure inhibits
Contractor's ability to satisfy its Delivery obligations under this Contract;
provided written notice is given to Customer, in writing, within ten (10)
Business Days after Contractor shall have first learned of the occurrence of
such an event. Notwithstanding the foregoing, failure by Contractor to provide
such notice shall not prevent such an event from qualifying as an Excusable
Delay provided Customer's Program Manager has actual notice of such event by
means of publicly and commonly available sources (e.g., national or global
coverage of major natural disaster) prior to Customer suffering any prejudice
from Contractor's failure to provide such notice. Such notice to be provided by
Contractor, as required by the preceding provisions, shall include a detailed
description of the portion of the Work known to be affected by such delay. In
all cases, Contractor shall use best reasonable efforts to avoid or minimize
and/or work around such delay through the implementation of any work-around
plans, alternate sources, or other means Contractor may utilize or expect to
utilize to minimize a delay in performance of the Work. Contractor shall also
provide Customer prompt written notice when the event constituting an Excusable
Delay appears to have ended.

         (b) In the event Customer disputes the Excusable Delay, Customer shall
inform 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 ten (10) Business Days of
Contractor's receipt of written notice from Customer, the dispute shall be
resolved pursuant to Article 27 (Dispute Resolution).

         11.2 EQUITABLE ADJUSTMENTS.

         (a) In the event of an Excusable Delay under Article 11.1 (Excusable
Delay Defined), there shall be an equitable adjustment to the Delivery Schedule
and Delivery Dates set forth in Table 7.1 of Article 7 (Delivery) (unless the
Excusable Delay is caused by Contractor's failure to provide Customer with the
assistance required by the third sentence of paragraph (a) of Article 25.2
(Launch Insurance)); provided, however, Contractor acknowledges and agrees that
the occurrence of an Excusable Delay shall not entitle Contractor to an increase
in the Contract Price unless the Excusable Delay is caused directly by
Customer's failure to meet its responsibilities under this Contract, including
those detailed in Article 29 (Customer's Responsibilities ), in which event
there shall be an equitable adjustment to the Contract Price only for
incremental


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costs incurred by Contractor as a result of such Excusable Delay, such
incremental costs to be invoiced to Customer in reasonable detail.

         (b) Any adjustment made pursuant to this Article 11.2 (Equitable
Adjustments) shall be formalized by the execution of an Amendment to this
Contract wherein such adjustments shall be recorded.

         (c) In the event of an adjustment in the Delivery Date of any Satellite
due solely to Excusable Delay, there shall be an adjustment in the Delivery Date
of any Satellite or Ground Spare Satellite, if ordered, subsequently to be
Delivered only to the extent such Delivery Date is impacted by the Excusable
Delay and only to the extent necessary to permit at least one hundred twenty
(120) Calendar Days between the Delivery of the subject Satellite and any
subsequent Satellite or Ground Spare Satellite, if ordered; provided, however,
in the event the Excusable Delay (of either the first or second Satellite) is
caused by a Launch Agency Delay, the Delivery Date for the Ground Spare
Satellite, if ordered, shall not be extended under this paragraph (c).

         (d) The occurrence of an Excusable Delay arising from any act or
omission of Customer as set forth herein shall not entitle Customer to an
adjustment in the payment schedule set forth in Exhibit G (Payment Plan and
Termination Liability Amounts).

         11.3 MAXIMUM EXCUSABLE DELAY; TERMINATION.

         (a) The maximum total amount of Excusable Delay (not including
Excusable Delay caused directly by Customer's failure to meet its
responsibilities under this Contract) shall be four hundred eighty-five (485)
Calendar Days.

         (b) Customer may terminate this Contract (in whole or in part as to the
following parts: first Satellite and related Launch Services, second Satellite
and related Launch Services, and Long-Lead Items), pursuant to Article 32.4
(Termination for Excusable Delay) if and when it becomes reasonably certain that
the aggregate of Excusable Delays (except those Excusable Delays caused directly
by Customer's failure to perform its responsibilities under this Contract) will
exceed four hundred eighty-five (485) Calendar Days.


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12. IN-ORBIT PERFORMANCE INCENTIVE PAYMENTS.

         12.1 TOTAL AMOUNT AT RISK.

         The Total Amount At Risk shall be placed at risk by Contractor against
failure of the Satellites to meet the criteria set forth or referenced in
Article 12.3 (Calculation and Earning of Incentive Amounts).

         12.2 IN-ORBIT PERFORMANCE INCENTIVES.

         Contractor represents that each Satellite will meet the criteria set
forth or referenced in Article 12.3 (Calculation and Earning of Incentive
Amounts) during the Orbital Design Life of each Satellite. To the extent any
Satellite satisfies the criteria set forth or referenced in Article 12.3
(Calculation and Earning of Incentive Amounts), Customer shall pay Contractor
Incentive Amounts, to be calculated as specified in Article 12.3 (Calculation
and Earning of Incentive Amounts). The total aggregate amount of incentives paid
by Customer to Contractor for any and all Satellites shall not exceed the Total
Amount At Risk, plus interest thereon calculated pursuant to Article 12.6(b) of
this Contract.

         12.3 CALCULATION AND EARNING OF INCENTIVE AMOUNTS.

         The Total Amount at Risk shall be earned by Contractor and paid by
Customer to Contractor in the manner and to the extent provided in this Article
12.3 (Calculation and Earning of Incentive Amounts) and paid by Contractor to
Customer in accordance with Article 12.6 (Payment and Interest).

         (a) ADJUSTMENTS IN INCENTIVE AMOUNTS.

                           [RESERVED.]

         (b) QUARTERLY INCENTIVE PAYMENT AMOUNTS.

                  (1)      For each Satellite during its Orbital Design Life, a
                           daily pro rata portion of the Quarterly Incentive
                           Payment Amount shall be earned by Contractor on a
                           daily basis during each calendar quarter for each day
                           that such Satellite is a Satisfactorily Operating
                           Satellite, provided that assessment and calculation
                           of performance shall be performed at the end of each
                           calendar month, and such earned portion of the
                           Quarterly Incentive Payment Amount shall be invoiced
                           on a quarterly-in-arrears basis, for, and as of the
                           last day of, each calendar quarter. Contractor shall
                           begin to earn Quarterly Incentive Payment Amounts
                           upon Initial Handover of the Satellite to Customer.

                  (2)      For purposes of this paragraph (b), to the extent
                           during any quarterly period a Satellite is not a
                           Satisfactorily Operating Satellite due to Customer's
                           or Satellite Operator's failure to operate a
                           Satellite as a Properly Operated Satellite,
                           Contractor's entitlement to payment of the


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                           Quarterly Incentive Payment Amount shall not be
                           affected. Any amounts earned by Contractor under this
                           paragraph (b) shall be paid by Customer to Contractor
                           in accordance with Article 12.6 (Payment and
                           Interest). However to the extent that a Satellite is
                           not a Satisfactorily Operating Satellite due to
                           Contractor's failure to operate such Satellite as a
                           Properly Operated Satellite, Contractor shall not
                           entitled to payment of that portion of the Quarterly
                           Incentive Payment Amount attributable to each day
                           such Satellite is not a Satisfactorily Operating
                           Satellite.

                  (3)      Notwithstanding the foregoing, [***] will result in
                           a negotiation as to whether Contractor shall earn
                           the entire daily pro rata portion of the Quarterly
                           Incentive Payment Amount or a portion thereof. In
                           the event [***], Contractor shall earn the daily
                           pro rata portion of the Quarterly Incentive
                           Payment Amount calculated in accordance with
                           paragraph (b)(1) of Article 12.3 (Calculation and
                           Earning of Incentive Amounts) above. [***], will
                           result in a negotiated reduction of Incentive
                           Amounts or such other equitable adjustment as may
                           be agreed to by the Parties. In arriving at an
                           equitable adjustment, factors to be considered
                           include: [***]. For example, (A) [***], Contractor
                           shall earn no portion of the daily pro rata
                           portion of the Quarterly Incentive Payment for
                           such day; (B) [***], the Parties shall negotiate
                           in good faith an adjustment to the daily pro rata
                           portion of the Quarterly Incentive Payment Amount
                           for that day; (C) [***], the Parties shall
                           negotiate in good faith an adjustment to the daily
                           pro rata portion of the Quarterly Incentive
                           Payment Amount that may be earned [***]; and (D)
                           [***], the Parties shall negotiate in good faith a
                           permanent adjustment to the daily pro rata portion
                           of the Quarterly Incentive Payment Amount.

                  (4)      In the event Customer continues to operate a
                           Satellite for commercial purposes beyond the Orbital
                           Design Life of such Satellite, Contractor shall be
                           entitled to earn, for each quarter beyond such
                           Orbital Design Life, a Quarterly Incentive Payment
                           Amount in accordance with this paragraph (4);
                           provided, however, in no event shall Contractor be
                           entitled to any Quarterly Incentive Payment Amount if
                           the cumulative Incentive Amounts, excluding interest,
                           earned by Contractor exceed the Total


                                       51

<Page>

                           Amount at Risk. Contractor shall not be entitled to
                           interest on any Incentive Amounts earned pursuant to
                           this paragraph (4).

         (c) CONSTRUCTIVE TOTAL LOSS.

                  (1)      In the event a Satellite is a Constructive Total Loss
                           after successful injection of the Satellite into its
                           specified orbit by the Launch Vehicle, Contractor
                           shall not be entitled to be paid Incentive Amounts
                           pursuant to this Article 12 (In-Orbit Performance
                           Incentive Payments) with respect to such Satellite.

         12.4 DISPUTED PERFORMANCE.

         In the event of a dispute as to the performance of a Launched
Satellite, Customer shall provide Contractor with such technical data, reports,
analyses, and records as are available to support Customer's determination and
Contractor shall be given thirty (30) Calendar Days to verify the data. If,
following such thirty (30) Calendar Day period, Contractor continues to disagree
with Customer's determination and is able to present evidence to the contrary,
then Customer shall consider such evidence and consult with Contractor. In the
event the Parties do not reach agreement, the Parties agree to have an
independent determination of the Satellite's technical status performed by a
mutually-acceptable technically-qualified third party. The costs incurred in
retaining the third party shall be shared equally between Contractor and
Customer. The Parties agree that before reference to such mutually-acceptable
technically-qualified third party, an informal forum between the Parties' Chief
Executive Officers shall take place to attempt resolution of said dispute. In
the event such efforts to resolve the dispute are unsuccessful, the Parties
shall proceed under Article 27.2 (Arbitration). The foregoing independent
determination may be used by either Party in any arbitration under Article 27.2
(Arbitration), but such determination shall not be binding upon the arbitrators.

         12.5 ROLL-OVER OF INCENTIVE AMOUNTS.

         (a) In the event the first Satellite Launched pursuant to this Contract
is a Constructive Total Loss or Total Loss for reasons not attributable to
Contractor, all Incentive Amounts applicable to such Satellite shall be eligible
to be earned by Contractor following the Launch and In-Orbit Testing of the
Ground Spare Satellite for each quarter during its Orbital Design Life that the
Ground Spare Satellite is a Satisfactorily Operating Satellite. Earning and
payment of such Incentive Amounts shall be in accordance with Article 12.3
(Calculation and Earning of Incentive Amounts), together with interest on such
Incentives Amounts calculated in accordance with Article 12.7 (Interest on
Roll-Over Incentive Amounts).

         (b) In the event the second Satellite Launched pursuant to this
Contract is a Constructive Total Loss or Total Loss for reasons not attributable
to Contractor, but the first Satellite Launched was not a Constructive Total
Loss or Total Loss, all Incentive Amounts applicable to such second Satellite
shall be eligible to be earned by Contractor following the Launch and In-Orbit
Testing of the Ground Spare Satellite for each quarter that the Ground Spare
Satellite is a Satisfactorily Operating Satellite. Payment of such Incentive
Amounts shall be in accordance with Article 12.3 (Calculation and Earning of
Incentive Amounts), together


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with interest on such Incentives Amounts calculated in accordance with Article
12.7 (Interest on Roll-Over Incentive Amounts).

         (c) In the event both the first and second Satellites Launched pursuant
to this Contract are Constructive Total Losses or Total Losses for reasons not
attributable to Contractor, then Contractor shall be eligible to earn the
Incentive Amounts applicable to the first Satellite in accordance with paragraph
(a) above, and with respect to the second Satellite, Contractor shall receive
payment from Customer of the total Incentive Amount applicable to such second
Satellite (that is, $12,500,000) within thirty (30) Calendar Days following
receipt by Customer of any applicable Launch Insurance proceeds therefor unless
Customer ordered an optional fourth Satellite (pursuant to Article 30 (Options))
prior to Launch of the second Satellite, in which case such Incentive Amounts
shall be rolled-over to such optional fourth Satellite. Earning and payment of
such amounts shall be in accordance with Article 12.3 (Calculation and Earning
of Incentive Amounts), together with interest on such amounts to be calculated
in accordance with Article 12.7 (Interest on Roll-Over Incentive Amounts).

         (d) In the event Customer has not ordered the Ground Spare Satellite or
an Optional Satellite prior to the Launch of a Satellite, Customer shall insure
the Incentive Amounts as part of the Launch Insurance purchased by Customer.

         12.6 PAYMENT AND INTEREST.

         (a) PAYMENT.

         Any payment required to be made by Customer to Contractor in respect of
a Satellite for a Quarterly Incentive Payment Amount shall be invoiced on a
quarterly-in-arrears basis and paid in accordance with Article 5.2 (Payment).

         (b) INTEREST.

                  (1)      Interest shall be paid on any Quarterly Incentive
                           Payment Amount with respect to a Satellite, such
                           interest to be calculated over the period
                           commencing upon Initial Handover of such Satellite
                           by Customer ("Quarterly Incentive Commencement
                           Date") and ending on the last day of the quarter
                           when the Quarterly Incentive Payment Amount is
                           invoiced, at a rate equal to [***] compounded
                           annually, as calculated in accordance with the
                           following formula: In = (Quarterly Incentive
                           Payment Amount earned during a quarter) * [(1+[***])
                           n*0.25 - 1], where "n" = quarter number = 1 to
                           60. For example, (A) if a Satellite meets the
                           criteria of a Satisfactorily Operating Satellite
                           during the entire first quarter following the
                           Quarterly Incentive Commencement Date for such
                           Satellite, Contractor shall be entitled to payment
                           of the Quarterly Incentive Payment Amount plus
                           interest on such amount from the Quarterly
                           Incentive Commencement Date to the last day of the
                           first quarter (that is, the Quarterly Incentive
                           Payment equals: $208,333 plus the quantity
                           $208,333 times the quantity [***], raised to the 1
                           times 0.25 power, minus 1) resulting in a
                           quarterly financing charge of [***], and a total
                           Quarterly

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                           Incentive Payment Amount of [***]; or (B) if the
                           Satellite meets the criteria of a Satisfactorily
                           Operating Satellite during the entire twenty-fifth
                           (25th) quarter following the Quarterly Incentive
                           Commencement Date for such Satellite, Contractor
                           shall be entitled to payment of the Quarterly
                           Incentive Payment Amount plus interest on such amount
                           from the Quarterly Incentive Commencement Date for
                           such Satellite to the last day of the twenty-fifth
                           (25th) quarter (that is, the Quarterly Incentive
                           Payment Amount equals: $208,333 plus the quantity
                           $208,333 times the quantity [***], raised to the
                           twenty-five (25) times 0.25 power, minus 1) resulting
                           in a quarterly financing charge of [***], and a
                           total Quarterly Incentive Payment Amount of [***].

                  (2)      Exhibit G-1 (Payment Plan for Interest on In-Obit
                           Incentive Amounts) sets forth an interest calculation
                           that assumes Contractor has earned all Quarterly
                           Incentive Payment Amounts. The actual Quarterly
                           Incentive Payment Amount earned by Contractor, and
                           the interest thereon, will be calculated in
                           accordance with this Article 12 (In-Orbit Performance
                           Incentive Payments).

         12.7 INTEREST ON ROLL-OVER INCENTIVE AMOUNTS.

         The Incentive Amounts rolled-over to the Ground Spare Satellite
pursuant to paragraphs (a) and/or (b) of Article 12.5 (Roll-Over of Incentive
Amounts) shall bear interest as calculated in accordance with this Article 12
(In-Orbit Performance Incentive Payments) from the date of declaration of
Constructive Total Loss or Total Loss and ending on the last day of the quarter
when the Quarterly Incentive Payment Amount is invoiced, as more fully provided
in paragraph (b) of Article 12.6 (Payment and Interest). Interest on rolled-over
Incentive Amounts shall be invoiced and paid on a quarterly-in-arrears basis.
For example, (a) if the first Quarterly Incentive Payment Amount is earned five
(5) quarters after Constructive Total Loss or Total Loss, the Quarterly
Incentive Payment Amount earned during each quarter (QIPA) plus interest thereon
(the sum equals QIPAn) is calculated as follows:

                        QIPAn  = QIPA * (1+ [***]) (n + x) * 0.25

                        where: n = quarter number = 1 to 60 commencing with
                        Quarterly Incentive Commence Date, and

                            x = number of days from Constructive Total Loss
                            or Total Loss to Quarterly Incentive Commencement
                            Date converted into quarters.

                        therefore, QIPA1 = $208,333 * (1 + [***]) (1 + 4) * 0.25

                                            = [***];

         (b) if the first Quarterly Incentive Payment Amount is earned five (5)
quarters and twenty (20) days after Constructive Total Loss or Total Loss, the
Quarterly Incentive Payment Amount earned during each quarter (QIPA) plus
interest thereon (the sum equals QIPAn) is calculated as follows:


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<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                        QIPAn  = QIPA * (1+ [***]) (n + x) * 0.25

                        where: n = quarter number = 1 to 60 commencing with
                        Quarterly Incentive Commence Date, and

                            x = number of days from Constructive Total Loss
                            or Total Loss to Quarterly Incentive Commencement
                            Date converted into quarters.

                     therefore, QIPA1 = $208,333 * (1 + [***]) (1 + 4.22) * 0.25

                                      = $[***].

         12.8 SECURITY FOR PERFORMANCE INCENTIVE PAYMENTS.

         (a) In the event Customer does not order the Ground Spare Satellite,
Contractor and Customer agree that, as assurance of the payment of Incentive
Amounts as such amounts may be earned by Contractor and become payable by
Customer, Customer must demonstrate to Contractor, no later than four (4)
months prior to the Launch of the first Satellite, that Customer has a
minimum of [***] in liquid assets (e.g., cash, cash equivalents and current
receivables), or, at Contractor's option, non-current assets (e.g., property,
plant, equipment) with a market value of at least [***] and a reasonable
expectation that such market value can be realized within one hundred eighty
(180) Calendar Days of a decision to liquidate. In the case of non-current
assets, Customer shall also grant to Contractor a perfected security interest
in such non-current assets, up to a maximum interest in the amount of [***],
and shall cause all appropriate documents and financial statements to be
filed in order to give effect to such security interest. Contractor's
perfected security interest in such non-current assets, if granted, shall be
released by Contractor if Customer performs its obligations with respect to
payment of all earned Incentive Amounts, including interest thereon, in
accordance with the terms of this Contract, for a period of twenty-four (24)
months commencing upon the date that the first Quarterly Incentive Payment
Amount is due with respect to the first Launched Satellite. In the event the
first Satellite is a Constructive Total Loss or Total Loss, the requirements
of this paragraph (a) shall apply to the second Satellite.

         (b) In the event Customer Launches the Ground Spare Satellite as an
additional Satellite (not a replacement) within a period of two (2) years
following the date upon which the first Quarterly Incentive Payment Amount is
due with respect to the first Launched Satellite, Customer shall demonstrate
to Contractor, no later than four (4) months prior to the Launch of the
Ground Spare Satellite, that Customer has a minimum of [***] in liquid assets
(e.g., cash, cash equivalents and current receivables), or, at Contractor's
option, non-current assets (e.g., property, plant, equipment) with a market
value of at least [***] and a reasonable expectation that such market value
can be realized within one hundred eighty (180) Calendar Days of a decision
to liquidate. In the case of non-current assets, Customer shall also grant to
Contractor a perfected security interest in such non-current assets, up to a
maximum interest in the amount of [***], and shall cause all appropriate
documents and financial statements to be filed in order to give effect to
such security interest. Contractor's perfected security interest in such
non-current assets, if

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<Page>

granted, shall be released by Contractor if Customer performs its obligations
with respect to payment of all earned Incentive Amounts, including interest
thereon, in accordance with the terms of this Contract, for a period of
twenty-four (24) months commencing upon the date that the first Quarterly
Incentive Payment Amount is due with respect to the first Launched Satellite.

         (c) Contractor expressly acknowledges and agrees that Customer shall
not be required, at any time, to provide a stand-by, irrevocable, or other form
of letter of credit, or any equivalent or external guarantees, in order to
secure Customer's payment obligations with respect to Incentive Amounts, as such
amounts are earned by Contractor.

         12.9 EXCLUSIVE REMEDY.

         The rights and remedies under this Article 12 (In-Orbit Performance
Incentive Payments) are exclusive for the failure of any Satellite after Launch
to meet the criteria set forth or referenced in Article 12.3 (Calculation and
Earning of Incentive Amounts) and in substitution of any other rights and
remedies either Party may have under this Contract or otherwise at law as a
result of such failure.

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<Page>

13. CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES AND OTHER DELIVERABLE ITEMS

         13.1 NOTICE OF DEFECTS.

         (a) Customer may notify Contractor in writing when it in good faith
reasonably demonstrates any Defect exists in any Deliverable Item or component
part thereof. In the event Contractor disagrees with Customer or Customer
Personnel as to the existence or nature of a Defect, Contractor shall so advise
Customer in writing. In such event, the Parties shall negotiate in good faith to
determine what Defect, if any, exists and any action required to remedy such
Defect. Except to the extent written waivers are made pursuant to the provisions
of Article 8 (Inspection and Final Acceptance), Customer's failure to notify
Contractor of any Defect shall not constitute a waiver of any rights of Customer
or obligations of Contractor under this Contract with respect to any such
Defects.

         (b) Contractor shall advise Customer as soon as practicable by
telephone and confirm in writing any event, circumstance, or development that
materially threatens the quality of any Deliverable Items or component parts
thereof, including any Satellite, or threatens the Delivery Dates established
therefor.

         (c) Without limiting the generality of the foregoing, if the data
available from any Launched Satellite or from other satellites of a similar
class shows that any Satellite contains a Defect, Contractor shall promptly
inform Customer of such Defect.

         13.2 DUTY TO CORRECT.

         (a) Without limiting the obligations of Contractor or the rights of
Customer under this Contract, prior to Launch of any Satellite or Delivery of
any other Deliverable Item, Contractor shall, at its expense, promptly correct
any Defect related to any Deliverable Item or component thereof that Contractor
or Customer discovers during the course of the Work or from other spacecraft of
a class similar to the satellites being built by Contractor, 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 Contractor to have any items containing a Defect returned at
Contractor's expense to Contractor's facility for Contractor to verify and
correct the Defect.

         (b) At Contractor's expense, Contractor shall use reasonable efforts to
correct any such Defect in any Launched Satellite delivered in-orbit hereunder,
to the greatest extent that such Defect may be corrected by on-ground means,
including transmission by Contractor of commands to such Satellite(s), to
eliminate or mitigate any adverse impact resulting from any such Defect, to
establish work-around solutions, or to otherwise resolve such Defect. Contractor
shall coordinate and consult with Customer concerning such on-ground resolution
of Defects in Launched Satellites.

         (c) Contractor shall fulfill the foregoing obligations at its own cost
and expense, including all costs arising from charges for packaging, shipping,
insurance, taxes, and other matters associated with the corrective measures,
unless it is reasonably determined after


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<Page>

investigation that Customer directly caused the Defect in question, in which
case Customer shall pay all such costs.

         (d) If Contractor fails to correct any Defect with respect to those
Satellites that have not been Launched or with respect to any other Deliverable
Item within a reasonable time after notification from Customer and after the
Parties have followed the provisions of Article 13.1 (Notice of Defects) above,
Customer may, by separate contract or otherwise, correct or replace such items
or services, and, unless it is reasonably determined after investigation that
Customer directly caused the Defect in question, Contractor shall pay to
Customer the reasonable cost of such correction or replacement. The amount
payable by Contractor shall be verified at Contractor's request by an
internationally recognized firm of accountants appointed by Contractor. The
costs of such verification shall be paid by Contractor. The verification of such
correction cost shall be without prejudice to the right of either Party in any
arbitration proceeding and shall not be binding upon the arbitrators.

         (e) Contractor acknowledges and agrees that it shall not be entitled to
payment for any additional costs incurred as a consequence of any Defect where
the Defect arises directly from Contractor's fault. If correction of any Defect
causes a delay in the Delivery of any Work, despite the efforts of Contractor to
correct the Defect, the provisions of Article 10 (Liquidated Damages for Late
Delivery) shall apply as appropriate in addition to the remedies in this Article
13 (Corrective Measures in Unlaunched Satellites and Other Deliverable Items)
and Article 31 (Failure to Make Adequate Progress).

         (f) After notification of a Defect to Contractor, Customer, in its sole
discretion, may elect in writing, pursuant to Article 34.4 (Waiver of Breach of
Contract), not to require correction or replacement of such items or services or
to waive the Defects noted for the Satellites that have not been Launched, if
any. In such event, Contractor shall promptly provide Customer with a written
price proposal for the cost of correction of such Defect at the time of waiver.

         (g) Subject to the provisions of any applicable Law, Contractor agrees
to enforce any manufacturer's warranty given to it in connection with any Work
to be provided under this Contract, and upon Customer's written request,
Contractor shall assign to Customer such warranty protection to correct any
defective Work not otherwise corrected by Contractor.


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<Page>

14. CHANGES IN SCOPE OF WORK

         14.1 CHANGES REQUESTED BY CUSTOMER.

         (a) Subject to paragraphs (b), (c), and (d) below, Customer shall be
entitled to direct, during the performance of this Contract, any change within
the general scope of this Contract, including any change that will add, delete,
or change the Work, affect the design of the Satellites, change the method of
shipping or packing, or the place or time of Delivery, or will affect any other
requirement of this Contract.

         (b) Any change directed by Customer as described in paragraph (a) above
shall be submitted in writing to Contractor. Contractor shall respond to such
directed change in writing to Customer within thirty (30) Calendar Days after
such directed change and shall include in such response the details of the
impact of such change on the Contract Price, Delivery Schedule, performance
specifications, or other terms of this Contract.

         (c) Customer shall notify Contractor in writing, within thirty (30)
Calendar Days after receipt of Contractor's response, whether or not Customer
agrees with and accepts Contractor's response. If Customer agrees with and
accepts Contractor's response, Contractor shall proceed with the performance of
this Contract as changed immediately upon the execution by both Parties of an
Amendment reflecting such changes.

         (d) If the Parties cannot agree on a reasonable price or revised
Delivery Schedule, performance specifications, or other item, as occasioned by
Customer's directed change, and Customer still desires the directed change,
Customer shall direct Contractor to proceed with the change and Customer shall
pay Contractor's proposed price and accept the revised Delivery Schedule or
performance specifications or other item pending any decision to the contrary
under Article 27 (Dispute Resolution). Contractor shall proceed with the Work as
changed and Customer may dispute the reasonableness of the proposed price,
revised Delivery Schedule, performance specification, or other item under
Article 27 (Dispute Resolution). In the event it is determined pursuant to such
dispute resolution or by the Parties' mutual written agreement that Customer is
entitled to a full or partial refund of amounts paid under this paragraph (d),
Customer shall be entitled to interest on such refunded amounts, such interest
running from the date of payment by Customer to the date of refund at the
interest rate set forth in Article 34.10 (Calculation of Interest).

         14.2 CHANGES REQUESTED BY CONTRACTOR.

         (a) Subject to paragraphs (b) and (c) below, Contractor may request,
during the performance of this Contract, any change within the general scope of
this Contract, including any change that will add or delete Work, affect the
design of the Satellites, change the method of shipping or packing, or the place
or time of Delivery, or will affect any other requirement of this Contract.

         (b) Any changes as described in paragraph (a) above requested by
Contractor shall be submitted in writing to Customer at least sixty (60)
Calendar Days prior to the proposed date of the change. If such Contractor
requested change causes an increase or decrease or other impact


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<Page>

in the Contract Price, Delivery Schedule, performance specifications, or other
terms of this Contract, Contractor shall submit, with such request, a written
proposal identifying such change and the impact thereof on the Contract Price,
Delivery Schedule, performance specifications, or other terms of this Contract.

         (c) Customer shall notify Contractor in writing, within thirty (30)
Calendar Days after receipt of the requested change proposal, whether or not
Customer agrees with and accepts such change and the price/schedule/performance
or other impact thereof. If Customer agrees with and accepts Contractor's
requested change and such impact thereof, Contractor shall proceed with the
performance of this Contract as changed and an Amendment to this Contract
reflecting the change proposal shall be executed by the Parties.

         14.3 PRICING OF CHANGES.

         When calculating the change in the Contract Price caused by changes in
the Work pursuant to this Article 14 (Changes in Scope of Work), such
calculation shall be consistent with Contractor's standard labor rates and
general administrative and overhead rates then in effect at the time of the
change.

         14.4 STORAGE.

         (a) Storage of a Satellite shall be for a period of either (A) no
longer than six (6) months ("Short Term Storage") or (B) more than six (6)
months but no longer than three (3) years ("Medium Term Storage"); Short Term
Storage shall be at Contractor's facilities and satisfy the requirements of the
storage plan to be developed by Contractor in accordance with Exhibit B (SOW).
Medium Term Storage will be at a mutually agreed-to facility, and such facility
shall be appropriate for the planned duration of storage.

         (b) In the event Contractor places a Satellite in storage, Contractor
shall pay for any associated costs and expenses of such storage, unless
Contractor places such Satellite in storage due to reasons attributable to
Customer.

         (c) In the event Contractor places a Satellite in storage due to
reasons attributable to Customer, Customer shall pay Contractor reasonable
storage costs, and any related costs that increase the Contract Price or extend
the Delivery Schedule shall be addressed in an Amendment pursuant to Article
14.1 (Changes Requested by Customer) above.

         (d) For a Satellite placed in storage, Customer shall pay Contractor
any Milestone Payment related to Shipment Readiness Review upon arrival of the
Satellite at the storage site.

         (e) In the event Contractor places a Satellite into storage pursuant to
this Article 14.4 (Storage) for reasons not attributable to Contractor for more
than twelve (12) months, Contractor shall be entitled to receive, and Customer
shall pay to Contractor, all payments due and owing, less all costs not incurred
with respect to the Launch Campaign, LEOP, In-Orbit Testing, and MSS for such
Satellite, but including the Incentive Amounts applicable to such Satellite. In
the event such Satellite is Launched, those Incentive Amounts previously paid by
Customer to Contractor shall be retained by Contractor, subject to the
following:


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                  (1)      Contractor shall earn such Incentive Amounts in
                           accordance with Article 12.3 (Calculation and Earning
                           of Incentive Amounts); and

                  (2)      any Incentive Amounts not earned by Contractor
                           pursuant to Article 12.3 (Calculation and Earning of
                           Incentive Amounts) shall be repaid by Contractor to
                           Customer as set forth below.

         Repayment by Contractor of any unearned Incentive Amounts under this
paragraph (e) shall be due thirty (30) Calendar Days after the date of receipt
by Contractor of a telefaxed invoice (which shall be followed by the airmailed
original) from Customer. Interest shall be paid (at the rate specified in
Article 34.10 (Calculation of Interest) on any amounts not paid when due.
Customer's invoice shall be accompanied by sufficient information to support
Customer's claim. Contractor shall be deemed to have accepted the invoice ten
(10) Business Days after receipt of Customer's invoice unless, within such time
period, Contractor notifies Customer of a dispute. Any disputes as to the
performance of a Launched Satellite shall be resolved in accordance with the
provisions of Article 12.4 (Disputed Performance). Contractor shall pay any
undisputed portion of an invoice.

         (f) In the event Contractor places any Satellite into storage under
this Article 14.4 (Storage) and such storage is required for reasons
attributable to Contractor, the warranty periods for such Satellite and its
batteries (and in the case of the first Satellite to be Delivered hereunder, the
Satellite Control Software, Ground Encryptors, Dynamic Satellite Simulator, and
Dynamic Spacecraft Simulator) under Article 18.3 (Warranties for Deliverable
Items) shall be extended on a day-for-day basis for the length of such storage
period.

         (g) In the event a Satellite has been in such storage for three (3)
years, or Customer decides prior to the end of such three (3) years not to
Launch such Satellite, the following shall apply:

                  (1)      Contractor shall be entitled to receive within thirty
                           (30) Calendar Days after the earlier of, receipt of
                           destorage notification from Customer or the end of
                           the three (3) year period, all payments due and
                           owing, not otherwise paid to Contractor pursuant to
                           paragraph (e) above, including Incentive Amounts,
                           less all costs not incurred with respect to the
                           Launch Campaign, LEOP, In-Orbit Testing, and MSS for
                           such Satellite; and

                  (2)      Contractor shall promptly Deliver to Customer, at
                           Customer's expense, such Satellite to a location
                           specified by Customer in the State of Florida or the
                           State of Delaware, or in such other location as may
                           be mutually agreed upon by the Parties. Customer's
                           expenses shall include any applicable state sales tax
                           for such storage.

         (h) Final Acceptance shall occur and title and risk of loss shall pass,
with respect to any Satellite placed in storage in accordance with this Article
14.4 (Storage) as follows: (i) if paragraph (g) applies, upon arrival of the
Satellite at the location specified by Customer, in which case, notwithstanding
Article 4.3 (Taxes and Duties) any and all taxes and duties in connection with
such delivery shall be borne and paid by Customer, or (ii) if the Satellite is
to be


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Launched, (x) risk of loss shall pass in accordance with Article 9.2 (Transfer
of Risk of Loss) and (y) title, free and clear of any liens and encumbrances
shall pass at Final Acceptance and Final Acceptance shall occur in accordance
with Article 8.5(b).

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<Page>

15. PERMITS AND LICENSES; COMPLIANCE WITH LAWS

         15.1 UNITED STATES PERMITS, LICENSES, AND LAWS.

         (a) Contractor shall, at its own expense, obtain all United States
Government approvals, permits, and licenses, including any required for export
from or import into the United States, as may be required for the performance of
the Work. Contractor shall use reasonable efforts to obtain the required export
licenses to directly deliver those Customer Deliverable Items to be delivered to
its Satellite Operator in Canada on Customer's behalf as required by Article 7
(Delivery) and to train and interface with the Satellite Operator; however, in
the event Contractor is unable to obtain or maintain such licenses, or such
licenses are issued and subsequently withdrawn, the Parties agree that
Contractor shall not be held liable or in breach of Contract or be terminated
for Excusable Delay pursuant to Article 11.3 (Maximum Excusable Delay;
Termination) and Article 32.4 (Termination for Excusable Delay) or for default
pursuant to Article 32.2 (Termination for Contractor's Default). In the event
that such licenses cannot be obtained or maintained, or are issued and
subsequently withdrawn, or if the granted authorization contains restrictions
which will compromise the anticipated cooperation arrangement, the Parties shall
determine how the Work can proceed on a different basis or if all or some of the
Work should be terminated for convenience pursuant to Article 32.1 (Termination
for Customer's Convenience). Customer agrees to cooperate with Contractor in
Contractor's efforts to obtain any such approvals, permits, or licenses. Upon
request by Customer for the purposes of Customer's compliance with U.S. export
control laws, Contractor shall communicate Customer's directions and requests
with respect to satellite operations to Satellite Operator, but only to the
extent such directions and requests are not prohibited under Contractor's
Technical Assistance Agreement with Satellite Operator.

         (b) Contractor shall, at its expense, perform the Work in accordance
with all applicable Laws of the United States and the conditions of all
applicable United States Government approvals, permits, or licenses.

         (c) Without limiting the generality of the foregoing, Contractor will
not, directly or indirectly, take any action that would cause Customer to be in
violation of U.S. anti-boycott laws under the U.S. Export Administration Act,
the U.S. Internal Revenue Code, or any regulation thereunder. In its performance
of this Contract, Contractor will not, directly or indirectly, make, offer, or
agree to make or offer any loan, gift, donation, or other payment, whether in
cash or in kind, for the benefit or at the direction of any candidate,
committee, political party, government or its subdivision, or any individual
elected, appointed, or otherwise designated as an employee or officer thereof,
for the purpose of influencing any act or decision of such entity or individual
or inducing such entity or individual to do or omit to do anything, in order to
obtain or retain business or other benefits except as may be expressly permitted
under the Foreign Corrupt Practices Act and the regulations promulgated
thereunder.

         15.2 NON-UNITED STATES PERMITS, LICENSES, AND LAWS.

         (a) Contractor shall, at its expense, obtain all non-United States
Government approvals, permits, and licenses, as may be required for the
performance of the Work, including those that may be required for Contractor to
perform the Work in compliance with the Laws of


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any country from which any Satellite shall be launched. Customer agrees to
cooperate with Contractor in Contractor's efforts to obtain any such non-United
States Government approvals, permits, or licenses.

         (b) Contractor shall, at its expense, perform the Work in accordance
with all applicable Laws of any country, state, territory, or jurisdiction, and
the conditions of all applicable non-United States Government approvals,
permits, or licenses.

         15.3 REVIEW OF APPLICATIONS.

         Contractor shall review with Customer any application Contractor makes
to any government department, agency, or entity for any approval, permit,
license, or agreement, as may be required for performance of the Work, prior to
submission of such application. Contractor shall provide Customer a minimum of
three (3) Business Days to review such application prior to submission to such
governmental entity, and Contractor shall in good faith consider any comments
and proposed revisions made by Customer for incorporation into such application.
Customer shall reasonably cooperate with Contractor in Contractor's efforts to
procure all such approvals, permits, licenses, and agreements.

         15.4 CONTRACTOR VIOLATION OF LAW.

         Customer shall not be responsible in any way for the consequences,
direct or indirect, of any violation by Contractor, its Subcontractors, or their
respective Affiliates or Associates of any Law or of any country whatsoever.

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16. SUBCONTRACTS

         16.1 MAJOR SUBCONTRACTS

         (a) Contractor has represented that in the performance of the Work
required by this Contract it will be necessary for Contractor or its
Subcontractors to enter into the Major Subcontracts with certain of the entities
identified in Exhibit D (Test Plan Requirements) hereto. Contractor shall select
the Major Subcontractors only from those entities approved by Customer and
listed in Exhibit D (Test Plan Requirements), and, to the extent permitted by
the Subcontractor agreement, Customer shall be provided with copies of the
technical content and a copy of the full text of any Major Subcontract
(excluding price and payment schedule) promptly upon execution thereof, and upon
Customer's request.

         (b) As of the Effective Date of Contract, the approved list of Major
Subcontractors is as specified in Exhibit D (Test Plan Requirements). Contractor
shall notify Customer promptly in writing upon selection of a Major
Subcontractor and upon any change in any Major Subcontractor, said change to be
only from the list of alternatives in Exhibit D (Test Plan Requirements).

         (c) Customer's acknowledgment or approval of any Major Subcontractor or
Subcontractor shall not relieve Contractor from any obligations or
responsibilities under this Contract.

         16.2 SELECTION OR REPLACEMENT OF MAJOR SUBCONTRACTORS.

         Contractor shall notify Customer if a Subcontractor identified in
Exhibit D (Test Plan Requirements) is substituted for another Major
Subcontractor on the list in Exhibit D (Test Plan Requirements); however,
Customer's approval of such termination or substitution shall not be required.
Subcontractors shall be selected based upon the offering of the best combination
of reliability, quality, price, and delivery time.

         16.3 NO PRIVITY OF CONTRACT.

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

         16.4 SUBCONTRACTOR RELATIONS.

         By appropriate written agreement, Contractor shall use commercially
reasonably efforts to require each Major Subcontractor, to the extent of the
Work to be performed by such Major Subcontractor, to be bound to Contractor by
the terms of this Contract and to assume toward


                                       65

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Contractor all the obligations and responsibilities that Contractor, by this
Contract, assumes toward Customer except to the extent otherwise provided in
Article 6.9 (Major Subcontracts).

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17. PERSONNEL AND KEY PERSONNEL

         17.1 PERSONNEL QUALIFICATIONS.

         Contractor shall assign properly qualified and experienced personnel to
the program contemplated under this Contract, and Contractor shall use best
reasonable efforts to retain such personnel on Customer's program for the
duration of such program.

         17.2 KEY PERSONNEL POSITIONS.

         Key personnel ("Key Personnel") shall be the personnel filling the
following or equivalent positions:

                  (1)      Contractor Program Manager;

                  (2)      Contract Manager;

                  (3)      Spacecraft Systems Engineer;

                  (4)      Payload Program Manager;

                  (5)      Payload Chief Systems Engineer;

                  (6)      Production, Integration and Test Manager;

                  (7)      Product Assurance Manager, provided that such Product
                           Assurance Manager shall not be engaged in more than
                           two (2) programs during the performance of this
                           Contract; and

                  (8)      Launch Services Manager.

         17.3 ASSIGNMENT OF KEY PERSONNEL.

         (a) Contractor will assign individuals from within Contractor's
organization to the Key Personnel positions to carry out the Work.

         (b) Key Personnel will be familiar with programs similar to Customer's
program.

         (c) Before assigning an individual to any Key Personnel positions,
whether as an initial assignment or a subsequent assignment, Contractor shall
notify Customer of the proposed assignment, shall introduce the individual to
appropriate Customer representatives and, upon request, provide such
representatives with the opportunity to interview the individual and shall
provide Customer with the individual's resume. If Customer in good faith objects
to the qualifications of the proposed individual within fifteen (15) Business
Days after being notified thereof, then Contractor agrees to discuss such
objections with Customer and resolve such concerns on a mutually agreeable basis
or; if unable to do so, to select another candidate acceptable to Customer. The
Key Personnel that have been approved as of the Effective Date of Contract are
listed in Attachment B (Key Personnel). Should the individuals filling the
positions


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of Key Personnel leave such positions for whatever reason, Contractor shall
follow the procedures set forth in this Article 17.3 (Assignment of Key
Personnel) to select replacement personnel.


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18. CONTRACTOR'S REPRESENTATIONS, COVENANTS, AND WARRANTIES

         18.1 ORGANIZATION; GOOD STANDING AND QUALIFICATION.

         Contractor represents and warrants that:

         (a) it is a corporation duly organized, validly existing and in good
standing under the Laws of Delaware;

         (b) it has all requisite power and authority to own and operate its
material properties and assets and to carry on its respective business as now
conducted in all material respects; and

         (c) it is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect.

         18.2 AUTHORIZATION.

         Contractor represents and warrants that:

         (a) it has all requisite corporate power and authority to enter into
this Contract and to carry out the transactions contemplated by this Contract;

         (b) the execution, delivery, and performance of this Contract and the
consummation of the transactions contemplated by this Contract have been duly
authorized by the requisite corporate action of Contractor and do not conflict
with any other agreement or obligation to which it is a party or which binds its
assets; and

         (c) this Contract is a valid and binding obligation of Contractor,
enforceable in accordance with its terms, except Contractor makes no
representation or warranty as to the enforceability of remedies due to
applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws
relating to or affecting the enforcement of creditor's rights or by reason of
general principles of equity.

         18.3 WARRANTIES FOR DELIVERABLE ITEMS.

         (a) SATELLITES.

         Contractor represents that each Satellite furnished under this Contract
shall be free from Defects other than Defects waived in writing by Customer.
This representation shall begin on the date of Initial Handover of a Satellite
and Customer's exclusive remedy for breach of this representation is set forth
in Article 12 (In-Orbit Performance Incentive Payments).

         (b) SATELLITE CONTROL SOFTWARE AND GROUND ENCRYPTORS.

         Contractor represents and warrants that the Satellite Control Software
and Ground Encryptors Delivered under this Contract shall be free from Defects
other than Defects waived in writing by Customer. This warranty shall begin on
the date of Final Acceptance of the respective Deliverable Item and run for one
(1) year.


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         (c) COMMUNICATIONS PAYLOAD SIMULATOR AND DYNAMIC SPACECRAFT SIMULATOR.

         Contractor represents and warrants that each of the Communications
Payload Simulator and Dynamic Spacecraft Simulator Delivered under this Contract
shall be free from Defects other than Defects waived in writing by Customer.
This warranty shall begin on the date of Final Acceptance of the respective
Deliverable Item and run for one (1) year.

         (d) DATA AND DOCUMENTATION.

         Contractor represents and warrants that the Data and Documentation to
be furnished hereunder shall be free from Defects. This warranty shall begin on
the date of Final Acceptance of the last portion of the Data and Documentation
to achieve Final Acceptance and run for a period of one (1) year. A Customer
claim under this warranty clause shall not affect the validity of Final
Acceptance.

         (e) BATTERIES.

         Contractor represents and warrants that the batteries to be furnished
hereunder shall be free from Defects. In the event any Satellite is required to
be placed in storage prior to its Launch, Contractor shall, upon removal of such
Satellite from storage, (i) test the batteries to ensure the batteries are free
from Defects, other than Defects waived in writing by Customer, and conform to
the applicable specifications and requirements set forth in Exhibit A (Satellite
Performance Specifications) and (ii) certify to Customer that the Batteries are
so conforming. This warranty shall begin on the date of cell activation and run
for a period of two (2) years or until Launch of the Satellite, whichever occurs
earlier.

         (f) SERVICES.

         Contractor represents and warrants it will perform the Work in
accordance with the highest professional standards of the commercial aerospace
and satellite communications industry practice for work similar in type, scope,
and complexity to the Work.

         (g) TITLE.

         Contractor represents and warrants it shall provide good and salable in
commerce title free and clear of any liens and encumbrances of any kind, at the
time title passes to Customer pursuant to Article 9 (Title and Risk of Loss).

         (h) INTELLECTUAL PROPERTY.

         Contractor represents and warrants that (i) it is either the owner of,
or authorized to use and incorporate, any Intellectual Property utilized or
incorporated in any Deliverable Item or the manufacture of any Deliverable Item;
(ii) Customer shall not be required to pay any license fees or royalties apart
from those included in the Contract Price for use of any Intellectual Property
utilized or incorporated in any Deliverable Item or the manufacture of any
Deliverable Item; and (iii) neither the Work nor any Intellectual Property
(other than Customer's Intellectual Property) utilized or incorporated in any
Deliverable Item or the manufacture of any Deliverable Item shall infringe any
Intellectual Property Right of any third party, provided that Contractor makes
no representations as to infringement with respect to (x) any software or item
that is used or

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combined with any other software or item or modified by an entity other than
Contractor or Subcontractor when the infringement would have not occurred but
for such combination, use, or modification, unless such combination, use or
modification was identified in Exhibit A (Technical Specifications), and (y) any
software or item made according to the written requests, instructions or
specifications of Customer to the extent the infringement arises from compliance
with such written requests, instructions or specifications. As of EDC,
Contractor is not aware of any claim or potential claim to the contrary by any
third party. This warranty shall begin upon Final Acceptance of the Work
embodying the subject Intellectual Property and continue for the operating life
of the Satellites and Long-Lead Items, and any optional Satellites which may be
provided hereunder.

         (i) CODE.

         Contractor represents and warrants that (i) it shall use commercially
reasonable efforts to ensure that no viruses or similar items are coded or
introduced into the Work; (ii) it shall not introduce into the Work any code
that would have the effect of disabling or otherwise shutting down all or any
portion of the Work; (iii) it shall not develop, or seek to gain access to the
Work through, any special programming devices or methods, including trapdoors or
backdoors, to bypass any Customer security measures protecting the Work; and
(iv) the operation of the Work shall not be affected by the change of date on or
after January 1, 2000. This warranty shall begin upon Final Acceptance of the
Work embodying the code at issue and continue for the operating life of the
Satellites and Ground Spare Satellite, and any optional Satellites which may be
provided hereunder.

         (j) REMEDIES.

                  (1)      Notwithstanding anything to the contrary herein,
                           Customer shall have the right at any time during the
                           period of the warranties set forth in this Article
                           18.3 (Warranties for Deliverable Items) to require
                           that any Work not conforming in any material respect
                           to this Contract be promptly corrected or replaced
                           (at Contractor's option and expense) with conforming
                           Work, subject to paragraph (g) of Article 8.2
                           (Shipment Readiness Review) and paragraph (e) of
                           Article 8.3 (Flight Readiness Review). If Contractor
                           fails or is unable to correct or replace such
                           defective Work within a reasonable period after
                           notification from Customer, Customer may then require
                           Contractor to repay such portion of the Contract
                           Price as is equitable under the circumstances in lieu
                           of repairing or replacing such defective Work.

                  (2)      During the operational lifetime of the Satellites,
                           Contractor shall provide the following for software
                           delivered under this Contract: with respect to
                           software for ground equipment delivered hereunder,
                           Contractor shall correct errors, including modifying
                           code and making operational modifications, in such
                           software as required for the Satellites to operate in
                           accordance with Exhibit A (Spacecraft Performance
                           Specifications) for the operating life of the
                           Satellites; and with respect to flight firmware and
                           software, Contractor shall, to the extent feasible,
                           correct such firmware


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                           and software as required for the Satellites to
                           operate in accordance with Exhibit A (Spacecraft
                           Performance Specifications) for the operational
                           lifetime of the Satellites. During the operational
                           lifetime of the Satellites, Contractor shall, in a
                           timely manner, provide access to engineering,
                           software and operations support personnel, including
                           and/or involving Contractor's Subcontractors and
                           vendors, where feasible, for the purpose of resolving
                           errors, problems, or issues relating to the ground
                           equipment, software, data, and operations products to
                           be Delivered pursuant to this Contract.

                  (3)      In the event Contractor, for whatever reason, fails
                           to perform its obligations under paragraph (2) above,
                           with respect to any flight or ground software
                           delivered under this Contract, which software
                           Contractor either owns or has rights in, Contractor
                           agrees to provide Customer access to the source code
                           and related documentation for such software so as to
                           enable Customer to perform tasks contemplated by
                           paragraph (2) above. With respect to other software
                           (that is, software that Contractor does not own or
                           have rights in), Contractor shall use its reasonable
                           best efforts to provide Customer with similar access
                           to source code and related documentation for such
                           software. Contractor shall ensure that all of
                           Contractor's source code for the flight firmware and
                           software and ground software is appropriately
                           maintained, stored, catalogued, and archived as
                           necessary to maintain such source code to object code
                           integrity.

         (k) SUBJECT TO ARTICLE 21.1 (CONTRACTOR INTELLECTUAL PROPERTY
INDEMNIFICATION), THE WARRANTIES SET FORTH IN THIS ARTICLE 18.3 (WARRANTIES FOR
DELIVERABLE ITEMS) ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY, AND THE REMEDY
PROVIDED IN PARAGRAPH (j) ABOVE AND ARTICLE 12 (IN-ORBIT PERFORMANCE INCENTIVE
PAYMENTS) ARE THE SOLE REMEDY FOR FAILURE BY CONTRACTOR TO COMPLY WITH
PARAGRAPHS (a) THROUGH (f), (h) AND (i) ABOVE AND TO FURNISH THE ITEMS REQUIRED
TO BE FURNISHED ABOVE FREE FROM MATERIAL DEFECTS IN MATERIAL OR WORKMANSHIP. ALL
OTHER WARRANTIES OR CONDITIONS IMPLIED BY ANY STATUTORY ENACTMENT OR RULE OF LAW
WHATSOEVER ARE EXPRESSLY EXCLUDED AND DISCLAIMED.


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19. CUSTOMER'S REPRESENTATIONS, WARRANTIES AND COVENANTS

         19.1 ORGANIZATION; GOOD STANDING AND QUALIFICATION.

         Customer represents and warrants that:

         (a) it is duly organized, validly existing and in good standing under
the Laws of the State of Delaware;

         (b) it has all requisite power and authority to own and operate its
material properties and assets and to carry on its respective business as now
conducted in all material respects; and

         (c) it is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect.

         19.2 AUTHORIZATION.

         Customer represents and warrants that:

         (a) it has all requisite corporate power and authority to enter into
this Contract and to carry out the transactions contemplated by this Contract;

         (b) the execution, delivery, and performance of this Contract and the
consummation of the transactions contemplated by this Contract have been duly
authorized by the requisite corporate action of Customer and do not conflict
with any other agreement or obligation to which it is a party or which binds its
assets; and

         (c) this Contract is a valid and binding obligation of Customer,
enforceable in accordance with its terms, except Customer makes no
representation or warranty as to the enforceability of remedies due to
applicable bankruptcy, insolvency, moratorium, reorganization, or similar laws
relating to or affecting the enforcement of creditor's rights or by reason of
general principles of equity. Notwithstanding the foregoing, in the event of
Customer's bankruptcy, insolvency, moratorium, reorganization, or equity
proceeding, Customer shall use its best efforts to have this Contract confirmed
according to its terms.

         19.3 CAPITALIZATION AND SUBSIDIARIES.

         As of the Effective Date of Contract, Customer does not presently own
or control, directly or indirectly, any interest in any other corporation,
partnership, association or other business entity or have any subsidiaries,
except those listed on Schedule 19.3 attached hereto.

         19.4 LITIGATION.

         As of the Effective Date of Contract, except as provided on Schedule
19.4 attached hereto, there are no actions, suits, or proceedings or
investigations Pending, or, to the knowledge of Customer, threatened against
Customer in an amount that would be considered material such that Customer would
be required to disclose if it were subject to the Securities and Exchange Act of
1934, as amended. In addition, Customer does not currently intend to initiate
such an action.

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         19.5 TITLE TO PROPERTIES AND ASSETS.

         Customer owns its material properties and assets, other than leased
properties, free and clear of all liens, charges, and encumbrances, except for
(i) such encumbrances and liens that arise in the ordinary course of business
and do not materially impair Customer's ownership or use of such property or
assets, (ii) liens created by this Contract, and (iii) liens listed on Schedule
19.5 attached hereto.

         19.6 FINANCIAL STATEMENTS.

         Customer has delivered to Contractor the unaudited consolidated
statements of operations, changes in shareholders' equity and cash flows for
1997 (the "Financial Statements") as set forth in Schedule 19.6. The Financial
Statements have been prepared in accordance with GAAP consistently applied and
present fairly in all material respects the consolidated financial condition,
cash flow, results of operations and changes in stockholders equity of Customer
and its subsidiaries for such periods. Except as disclosed in Schedule 19.6
attached hereto, from January 1, 1998 to the Effective Date of Contract, there
has not been (a) any material adverse change to the financial condition of
Customer or any of its subsidiaries, or (b) any damage, destruction, or loss,
whether or not covered by insurance, which has had a Material Adverse Effect.
Except as disclosed in the Financial Statements or in Schedule 19.6, as of the
Effective Date of Contract Customer is not a guarantor or indemnitor of any
material indebtedness of any other person, firm or corporation.

         19.7 CERTAIN ACTIONS.

         Except as set forth on Schedule 19.7 attached hereto, from January 1,
1998 to the Effective Date of Contract, Customer has not incurred any
indebtedness of Five Hundred Thousand Dollars ($500,000) or more, or sold,
exchanged, or otherwise disposed of any of its material assets or rights.

         19.8 UNDISCLOSED LIABILITIES.

         As of the Effective Date of Contract, except as set forth on Schedule
19.8 or on any other Schedule attached hereto, Customer is not subject to any
liabilities of any nature, whether absolute, contingent, or otherwise (whether
or not required to be accrued or disclosed under the accounting disclosure
standards applicable to Customer or under the Securities and Exchange Act of
1934, as amended) that have had or can reasonably be expected to have a Material
Adverse Effect, except to the extent set forth or provided in the Financial
Statements. Except as set forth in Schedule 19.8 or any other Schedule hereto,
all debts, liabilities, and obligations incurred by Customer, after the date of
the Financial Statements, were incurred in the ordinary course of business and
are in amounts less than Five Hundred Thousand Dollars ($500,000).

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         19.9 COMPLIANCE WITH OTHER INSTRUMENTS.

         As of the Effective Date of Contract, Customer is not in violation of
its Certificate of Incorporation or its By-Laws, or, to the knowledge of
Customer, in material default of any instrument, judgment, order, writ, decree,
oral or written contract, or other agreement to which it is a party or by which
it is bound or of any provision of federal, state, or local law, statute, rule,
or regulation applicable to Customer as of the Effective Date of Contract where
such violation or default will have a Material Adverse Effect. The execution,
delivery, and performance of this Contract and the consummation of the
transactions contemplated hereby will not (i) result in any such violation or be
in conflict with the Certificate of Incorporation or the By-Laws of Customer,
(ii) be in conflict with any instrument, judgment, order, writ, or decree, (iii)
be in conflict with any contract or other agreement or be an event that results
in the creation of any lien, charge, or encumbrance upon any material asset of
Customer other than as provided in this Contract, where such conflict or
creation would have a Material Adverse Effect, or (iv) cause Customer to violate
any federal, state, or local law, statute, rule, or regulation.

         19.10 CUSTOMER'S FINANCIAL STRENGTH.

         Contractor and Customer acknowledge and agree that Contractor, in
entering into this Contract, is relying on the separate existence and financial
strength of Customer alone and not of any Affiliate of Customer.

         19.11 CROSS-DEFAULTS.

         (a) Customer represents and warrants that, as of the Effective Date of
Contract, it is not a party to any Financing Agreements that contain a provision
that a default by any third party in such third party's obligations will be a
default under any of Customer's Financing Agreements where enforcement of such
provision is likely to have a material adverse effect on the ability of Customer
to make any payment required by this Contract or have a material adverse effect
on the security held by Contractor under this Contract.

         (b) Customer represents and warrants that, as of EDC, its assets do not
secure the liabilities of any person or entity other than Customer.

         (c) Customer agrees that it shall not agree to a provision in any
agreement that a default by any third party's obligations will be a default
under any of Customer's Financing Agreements or grant a security interest in its
assets to secure the obligations of any other parties.

         (d) Contractor shall have the power and authority to file financing
statements of public record giving third parties notice of the representations
and warranties of this Article 19.11 (Cross Defaults).

         19.12 CODE.

         Customer represents and warrants that (i) it shall use commercially
reasonable efforts to ensure that no viruses or similar items are coded or
introduced into the code it provides Contractor; and (ii) it shall not introduce
into any such provided code any code that would have


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the effect of disabling or otherwise shutting down all or any portion of the
Work. This warranty shall begin upon Final Acceptance of the Work embodying the
code at issue and continue for the operating life of the Satellites and the
Long-Lead Items.

         19.13 INTELLECTUAL PROPERTY.

         Customer represents and warrants that (i) it is either the owner of, or
authorized to use and incorporate, any Intellectual Property provided by
Customer (or others on behalf of Customer); (ii) Customer shall not require
Contractor to pay any license fees or royalties for the use of any Intellectual
Property of Customer; and (iii) Customer's Intellectual Property and/or any
modifications of Contractor's Intellectual Property by Customer (or any other
entity, other than Contractor or its Subcontractors, acting on behalf of
Customer) shall not infringe any Intellectual Property Right of any third party.
Customer is not aware of any claim to the contrary by any third party. This
warranty shall begin on the Effective Date of Contract and continue for the
operating life of the Satellites and the Long-Lead Items.

         19.14 OTHER CONTRACTS.

         Customer represents and warrants that, as of EDC, it has not entered
into an agreement to purchase goods and services similar to the goods and
services to be provided by Contractor hereunder.

         19.15 NON-MISLEADING STATEMENTS.

         As of EDC, this Contract (including the representations and warranties
in this Article 19 (Customer's Representations and Warranties) and the related
schedules) does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements, in light of the
circumstances under which they were made, not misleading.

         19.16 CONTROL OF CUSTOMER.

         Customer represents and warrants that Customer is not under the Control
of Contractor.

         19.17 CUSTOMER FINANCIAL COVENANT.

         Customer covenants that it will provide Contractor with financial
information as follows: until the time Customer becomes a public company,
monthly reports on Customer's anticipated available cash for the following
twelve (12) months; thereafter, quarterly status reports (concurrent with
quarterly filings required by the SEC) setting forth Customer's funding to date,
monthly funding plans through the Delivery Date for the second Satellite,
including identification of Customer's principal funding sources and Customer's
anticipated ability to pay its obligations under this Contract as they become
due. Customer shall provide additional information reasonably related to
Customer's anticipated ability to pay its obligations under this Contract as
they become due, as may be reasonably requested by Contractor.

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20. INTELLECTUAL PROPERTY RIGHTS

         20.1 OWNERSHIP OF IP AND IP RIGHTS.

         (a) Subject to the licenses set forth in Article 20.2 (License Rights),
all Background and Foreground Intellectual Property made, developed, or created
by Customer (or by others, other than Contractor or any Subcontractor, acting on
behalf of Customer), and all Intellectual Property Rights therein, shall be the
sole and exclusive property of Customer. The Parties agree the Statement of Work
and Spacecraft Performance Specifications are the Intellectual Property of
Customer.

         (b) Subject to the licenses set forth in Article 20.2 (License Rights),
all Background Intellectual Property and Foreground Intellectual Property made,
developed or created by Contractor (or its Subcontractors), and all Intellectual
Property Rights therein, shall be the sole and exclusive property of Contractor.

         20.2 LICENSE RIGHTS.

         (a) Subject to the terms and conditions stated herein, Contractor
grants to Customer a fully paid-up, irrevocable, perpetual, worldwide,
nonexclusive right and license to use and have used, for the sole and exclusive
purpose of operating and/or maintaining any Deliverable Item, all Background
Intellectual Property and Foreground Intellectual Property, including, to the
extent necessary for the limited purpose of this license, those associated
Intellectual Property Rights therein, owned by Contractor (and/or its
Subcontractors); provided, however, such license shall only be revocable in the
case of termination in accordance with paragraph (a)(1) or paragraph (a)(2) of
Article 32.3 (Termination for Customer's Default) for Customer's failure to make
payment, but only with respect to those Deliverable Items not paid for.

         (b) Subject to the terms and conditions stated herein, Customer grants
to Contractor a fully paid-up, irrevocable, perpetual, worldwide, non-exclusive
right and license to use and have used for the sole and exclusive purpose of
performing under this Contract, all Background Intellectual Property and
Foreground Intellectual Property, including, to the extent necessary for the
limited purpose of this license, those associated Intellectual Property Rights
therein, owned by Customer (or others acting on behalf of Customer, such as
Customer's Satellite Operator).

         (c) All object code, source code, and documentation Delivered
("Delivered Software") shall be protected as the Confidential Information of
Contractor or its licensor or Subcontractor pursuant to Article 22 (Confidential
Information). Delivered Software may only be used pursuant to the license
granted in paragraph (a) above and, in the case of the Dynamic Spacecraft
Simulator ("DSS"), on the computer hardware Delivered as the DSS Deliverable
Item or successors or back-ups to such hardware. Customer may reproduce the
delivered software for purposes of safe keeping (archives) or back-up, provided
all copyright notices and proprietary markings are reproduced.

         (d) The license described in paragraph (a) above shall be transferable
to the Financing Entities and, subject to Contractor's prior written approval,
any other entity.


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         (e) Contractor shall, unless otherwise authorized or directed in
writing by Customer, use reasonable best efforts to include in each Subcontract
hereunder a license rights clause pursuant to which each Subcontractor will
grant to Customer license rights in Intellectual Property developed by such
Subcontractor and associated Intellectual Property Rights to the same extent as
the license rights granted by Contractor in this Article 20.2 (License Rights).

         20.3 JOINT PROGRAM INVENTIONS.

         (a) Notwithstanding anything to the contrary herein, the following
shall apply to Program Inventions conceived jointly by one or more Associates of
each Party:

                  (1)      each Party shall have an equal, undivided one-half
                           interest in and to such joint Program Inventions, as
                           well as in and to patent applications and patents
                           thereon in all countries.

                  (2)      Contractor shall have the first right of election to
                           file patent applications in any country, and Customer
                           shall have a second right of election. Each Party in
                           turn shall make its election at the earliest
                           practicable time, and shall notify the other Party of
                           its decision.

                  (3)      The expenses for preparing, filing, and securing each
                           joint Program Invention patent application, and for
                           issuance of the respective patent shall be borne by
                           the Party that prepares and files the application.
                           The other Party shall furnish the filing Party with
                           all documents or other assistance that may be
                           necessary for the filing and prosecution of each
                           application. Where such joint Program Invention
                           application for a patent is filed by either Party in
                           a country that requires the payment of taxes,
                           annuities, maintenance fees or other charges on a
                           pending application or on an issued patent, the Party
                           that files the application shall, prior to filing,
                           request the other Party to indicate whether it will
                           agree to pay one-half of such taxes, annuities,
                           maintenance fees, or other changes. If within sixty
                           (60) Calendar Days of receiving such request, the
                           non-filing Party fails to assume in writing the
                           obligation to pay its proportionate share of such
                           taxes, annuities, maintenance fees, or other charges,
                           or if either Party subsequently fails to continue
                           such payments within sixty (60) Calendar Days of
                           demand, it shall forthwith relinquish to the other
                           Party, providing that said other Party continues such
                           payments, its interest in such application and patent
                           and the Program Invention disclosed therein, subject,
                           however, to retention of an irrevocable, fully
                           paid-up, non-exclusive, non-assignable license in
                           favor of the relinquishing Party, its parent, and any
                           subsidiary thereof to make, use, lease, and sell
                           apparatus and/or methods under said application and
                           patent.

         (b) Each owner of a jointly-owned patent application or patent
resulting therefrom shall, provided that it shall have fulfilled its obligation,
if any, to pay its share of taxes, annuities, maintenance fees, and other
charges on such pending application or patent, have the right to grant
non-exclusive licenses thereunder and to retain any consideration that it may
receive


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therefor without obligation to account therefor to the other Party. In
connection therewith, each of the Parties hereby consents to the granting of
such non-exclusive licenses by the other Party and also agrees not to assert any
claim with respect to the licensed application or patent against any licensee of
the Party thereunder during the term of any such license.

         20.4 SURVIVAL OF INTELLECTUAL PROPERTY RIGHTS.

         The provisions of this Article 20 (Intellectual Property Rights) shall
survive the termination or expiration of this Contract, except as expressly set
forth in Article 20.2(a) above.

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21. INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION

         21.1 CONTRACTOR INTELLECTUAL PROPERTY INDEMNIFICATION.

         (a) Subject to paragraph (a) of Article 21.2 (Customer's Intellectual
Property Indemnification) and the limitations set forth in paragraph (h) of
Article 18.3 (Warranties for Deliverable Items), Contractor shall indemnify,
defend, and hold harmless Customer from any and all Losses arising from, in
connection with, or based on any allegations made by third parties (including
Subcontractors of Contractor) that Customer's use of the Work, or any part
thereof infringes any third-party Intellectual Property Right, unless such
infringement would not have occurred but for Contractor following the written
requests, instructions, or specifications of Customer.

         (b) If the use of the Work or any part thereof is enjoined, Contractor
shall, at its option and expense, either procure for Customer the right to use
the Work or infringing part thereof, as the case may be, or substitute an
equivalent product reasonably acceptable to Customer, or modify the Work or
infringing part thereof to render them non-infringing without affecting their
utility or functionality. If Contractor determines that none of these
alternatives is reasonably available or feasible, Contractor shall meet with
Customer to address the matter and reach an equitable solution reasonably
acceptable to Customer.

         (c) Nothing in this Contract shall be construed as requiring Contractor
to defend a suit or pay damages or costs if either (i) the infringement claim or
judgment is based upon the use of any goods or services furnished in combination
with other goods or services not provided by Contractor, unless such combination
was identified in Exhibit A (Spacecraft Performance Specifications); (ii) the
infringement claim is based on the goods or services being used in other than
their specific operating environment as defined in Exhibit B (SOW); or (iii) the
infringement claim is based on Customer's modification of the Work or part
thereof in a manner not intended or reasonably foreseeable by Contractor.

         (d) Contractor's obligations under this Article 21.1 (Contractor
Intellectual Property Indemnification) shall be subject to Article 24.4
(Indemnification Procedures).

         21.2 CUSTOMER INTELLECTUAL PROPERTY INDEMNIFICATION.

         (a) Customer shall indemnify, defend, and hold harmless Contractor from
any and all Losses arising from, in connection with, or based on any allegations
made by third parties that the Work or any Deliverable Item or any part thereof
infringes any third-party Intellectual Property Right to the extent such
infringement is based on (i) any Intellectual Property provided by Customer (or
by others, other than Contractor or its Subcontractors, acting on behalf of
Customer); or (ii) any modification by Customer (or any entity, other than
Contractor or its Subcontractors, acting on behalf of Customer) of the Work or
any part thereof; or (iii) any written requests, specifications or instructions
provided by Customer to the extent the infringement arises from compliance with
such written requests, instructions or specifications.

         (b) Customer's obligations under this Article 21.2 (Customer
Intellectual Property Indemnification) shall be subject to Article 24.4
(Indemnification Procedures).

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         21.3 TOTAL LIABILITY.

         (a) In no event shall either Party's aggregate liability to the other
Party for intellectual property indemnification, defense, or any subsequent
award of damages in connection with one or multiple claims exceed Thirty Million
Dollars ($30,000,0000).

         (b) Neither Party shall be liable to the other Party for lost revenues,
profits or other indirect, incidental, special, or consequential damages arising
from any intellectual property infringement claims, except to the extent that
such damages are caused by a Party's willful or intentional acts.


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22. CONFIDENTIAL INFORMATION

         22.1 CONFIDENTIALITY OBLIGATIONS.

         (a) Any Confidential Information shall be maintained in strict
confidence by the Receiving Party. Except as provided in this Article 22
(Confidential Information), the Receiving Party shall not use, or disclose in
any manner to any third party, Confidential Information without the prior
express written consent of the Furnishing Party. The obligation of
confidentiality shall not be limited in time except to the extent that the
Receiving Party can establish one of the exceptions set forth in Article 22.2
(Exceptions) below by clear and convincing evidence.

         (b) Access to and use of Confidential Information shall be restricted
to those employees and persons within the Receiving Party's organization
(including its Consultants, attorneys, Subcontractors, shareholders, and
representatives), with a need to use such Confidential Information to perform
services specifically requested by one Party of the other, to fulfill the
purposes of this Contract. The Receiving Party's Consultants or Subcontractors
may be included within the meaning of "persons within the Receiving Party's
organization," provided that such persons have executed a non-disclosure or
confidentiality agreement no less stringent that this Article 22 (Confidential
Information). With respect to Contractor, access may be extended to certain
employees of The Boeing Company for the purposes stated herein. In addition, all
information provided is to be subject to the provisions of paragraph (c) below.

         (c) The Parties shall use the Confidential Information solely for the
purpose of developing, constructing, financing, Launching, and operating
Contractor-built Satellites for Customer's satellite digital audio radio
service.

         22.2 EXCEPTIONS.

         The obligations set forth in Article 22.1 (Confidentiality Obligations)
shall not apply to information that is:

         (a) Already known to or otherwise in the possession of the Receiving
Party at the time of receipt from the Furnishing Party and that was not so known
or received in violation of any confidentiality; or

         (b) Publicly available or otherwise in the public domain prior to
disclosure by the Receiving Party or becomes publicly available or otherwise in
the public domain after receipt by the Receiving Party without breach of this
Contract; or

         (c) Rightfully obtained by the Receiving Party from any third party
without restriction and without breach of any confidentiality obligation by such
third party; or

         (d) Developed by the Receiving Party independent of any disclosure
hereunder, as evidenced by written records; or


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         (e) Disclosed pursuant to the order of a court or administrative body
of competent jurisdiction or a government agency or required to be released
pursuant to Law or regulation, provided that the Receiving Party shall notify
the Furnishing Party prior to such disclosure and shall cooperate with the
Furnishing Party in the event the Furnishing Party elects to legally contest,
request confidential treatment, or otherwise avoid such disclosure.

         22.3 NO LICENSE.

         Except as expressly provided in this Contract, nothing in this Contract
shall be construed as granting the Receiving Party whether by implication,
estoppel, or otherwise, any license or any right to use any Confidential
Information received from the Furnishing Party, or use any patent, trademark, or
copyright now or hereafter owned or controlled by the Furnishing Party.

         22.4 RETURN OF CONFIDENTIAL INFORMATION.

         All Confidential Information disclosed pursuant to this Contract is
considered loaned for use solely in connection with this Contract. All
Confidential Information in tangible form of expression which has been disclosed
to or thereafter created, whether by copy or reproduction, by the Receiving
Party shall be and remain the property of the Furnishing Party. All such
Confidential Information and any and all copies and reproductions thereof shall,
within fifteen (15) Calendar Days of written request by the Furnishing Party, be
either promptly returned to the Furnishing Party or destroyed at the Furnishing
Party's direction. In the event of such requested destruction, the Receiving
Party shall provide to the Furnishing Party written certification of compliance
therewith within fifteen (15) Calendar Days of such written request.

         22.5 INCONSISTENT LEGENDS.

         This Article 22 (Confidential Information) shall control in lieu of and
notwithstanding any proprietary or restrictive legend or statements inconsistent
with this Article that may be printed on or associated with any particular
information disclosed pursuant to this Contract.

         22.6 SURVIVAL OF CONFIDENTIALITY OBLIGATIONS.

         The provisions of this Article 22 (Confidential Information) shall
survive the termination or expiration of this Contract for a period of four (4)
years following the date of termination or expiration of this Contract.


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***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

23. NON-COMPETITION OBLIGATION

         (a) Except with respect to WorldSpace, Inc. or WorldSpace International
Network, Inc. or Affiliates thereof, or with respect to DirecTV, Contractor
shall refrain, for a period of [***] from EDC, from the following:

                  (1)      directly or indirectly owning an equity interest of
                           five percent (5%) or more in an entity that develops
                           or operates a Similar Satellite System and/or
                           operating a Similar Satellite Service in any Customer
                           Coverage Area; and/or

                  (2)      providing a payload subsystem meant to be
                           incorporated in a Similar Satellite System within the
                           Customer Coverage Area. However, this shall not be
                           construed to restrict Contractor from selling or
                           providing goods at the equipment level and related
                           services to any third party.

         (b) In the event Customer exercises its options under Article 30
(Options) to purchase the Ground Spare Satellite and/or 4th and 5th Optional
Satellite(s) the Parties shall negotiate in good faith an extension to the
definition of "Customer Coverage Area" to account for the area covered by the
Ground Spare Satellite and/or such 4th and 5th Optional Satellite(s).


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24. INDEMNIFICATION

         24.1 CONTRACTOR'S INDEMNIFICATION.

         (a) Subject to the indemnification procedures set forth in Article 24.4
(Indemnification Procedures), Contractor shall indemnify, defend, and hold
harmless Customer and its Affiliates and their respective Associates from any
and all Losses arising from, in connection with, or based on any allegations
made by third parties (including Consultants and agents of Customer, Contractor,
or any Subcontractor but not any employee, officer, or director of Customer)
regarding any of the following:

                  (1)      injury to persons (including sickness or death) or
                           damage to real or tangible personal property,
                           resulting from any act or omission, negligent or
                           otherwise, of Contractor or its Subcontractors in the
                           performance of the Work;

                  (2)      any claims arising out of or related to occurrences
                           Contractor is required to insure against pursuant to
                           Article 25 (Insurance), to the extent of the amount
                           of the insurance required under such Article; or

                  (3)      Contractor's breach of its obligations under this
                           Contract.

         (b) Subject to the indemnification procedures set forth in Article 24.4
(Indemnification Procedures), Contractor shall indemnify, defend, and hold
harmless Customer as set forth in Article 18.3 (Warranties on Deliverable
Items), Article 21.1 (Contractor Intellectual Property Indemnification), this
Article 24.1(Contractor's Indemnification), Article 26 (Limitations of
Liability), Article 24.3 (Cross Indemnification for Inter-Party Waiver of
Liability), and as may be required pursuant to Article 33 (Inter-Party Waiver of
Liability).

         24.2 CUSTOMER'S INDEMNIFICATION.

         (a) Subject to the indemnification procedures set forth in Article 24.4
(Indemnification Procedures), Customer shall indemnify, defend, and hold
harmless Contractor and its Affiliates and their respective Associates from any
and all Losses arising from, in connection with, or based on any allegations
made by third parties (including Consultants and agents of Contractor, any
Subcontractor, or Customer but not any employee, officer, or director of
Contractor) regarding any of the following:

                  (1)      injury to persons (including sickness or death) or
                           damage to real or tangible personal property,
                           resulting from any act or omission, negligent or
                           otherwise, of Customer and its Consultants;

                  (2)      any claims arising out of or related to occurrences
                           Customer is required to insure against pursuant to
                           Article 25 (Insurance), to the extent of the amount
                           of the insurance required under such Article;

                  (3)      Customer's breach of its obligations under this
                           Contract; or


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                  (4)      any claims arising from Contractor's operation of the
                           Satellites except where such Losses results from
                           Contractor's (i) willful misconduct or gross
                           negligence, or (ii) acts(s) or omissions(s) that are
                           the basis of a denial or exclusion of coverage under
                           the Customer's Launch and In-Orbit Insurance Policy.

         (b) Subject to the indemnification procedures set forth in Article 24.4
(Indemnification Procedures), Customer shall indemnify Contractor as set forth
in Article 21.2 (Customer Intellectual Property Indemnification), this Article
24.2 (Customer's Indemnification), Article 24.3 (Cross Indemnification for
Inter-Party Waiver of Liability), Article 33 (Inter-Party Waiver of Liability)
as may be required.

         24.3 CROSS-INDEMNIFICATION FOR INTER-PARTY WAIVER OF LIABILITY.

         Each Party shall indemnify the other for, and hold it harmless from,
any liability, loss, or damage suffered by the other Party resulting from the
failure of such Party to comply with its obligations, if any, under Article 33
(Inter-Party Waiver of Liability) to waive or to cause its contractors and
Subcontractors at any tier (including suppliers of any kind) or any other entity
required by the Launch Agreement to make no claims under this Contract.

         24.4 INDEMNIFICATION PROCEDURES.

         (a) Promptly after receipt by any entity entitled to indemnification
under this Article 24 (Indemnification) of notice of the commencement or
threatened commencement of any civil, criminal, administrative, or investigative
action or proceeding involving a claim in respect of which the indemnified Party
will seek indemnification pursuant to this Article 24 (Indemnification), the
indemnified party shall notify the indemnifying Party of such claim in writing.
Failure to so notify the indemnifying Party shall not relieve the indemnifying
Party of its obligations under this Contract except to the extent it can
demonstrate that it was prejudiced by such failure. Within fifteen (15) Calendar
Days following receipt of written notice from the indemnified Party relating to
any claim, but no later than ten (10) Calendar Days before the date on which any
response to a complaint or summons is due, the indemnifying Party shall notify
the indemnified Party in writing if the indemnifying Party elects to assume
control of the defense or settlement of that claim (a "Notice of Election").

         (b) If the indemnifying Party delivers a Notice of Election relating to
any claim within the required notice period, so long as it is actively defending
such claim, the indemnifying Party shall be entitled to have sole control over
the defense and settlement of such claim; provided that (i) the indemnified
Party shall be entitled to participate in the defense of such claim and to
employ counsel at its own expense to assist in the handling of such claim; (ii)
where the indemnified Party is so represented, the indemnifying Party shall keep
the indemnified Party 's counsel informed of each step in the handling of any
such claim; (iii) the indemnified Party shall provide, at the indemnifying Party
's request and expense, such assistance and information as is available to the
indemnified Party for the defense and settlement of such claim; and (iv) the
indemnifying Party shall obtain the prior written approval of the indemnified
Party before entering into any settlement of such claim or ceasing to defend
against such claim. After the indemnifying Party has delivered a Notice of
Election relating to any claim in accordance with


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the preceding paragraph, the indemnifying Party shall not be liable to the
indemnified Party for any legal expenses incurred by the indemnified Party in
connection with the defense of that claim. In addition, the indemnifying Party
shall not be required to indemnify the indemnified Party for any amount paid or
payable by the indemnified Party in the settlement of any claim for which the
indemnifying Party has delivered a timely Notice of Election if such amount was
agreed to without the prior written consent of the indemnifying Party.

         (c) If the indemnifying Party does not deliver a Notice of Election
relating to any claim within the required notice period or fails to actively
defend such claim, the indemnified Party shall have the right to defend and/or
settle the claim in such manner as it may deem appropriate, at the cost and
expense of the indemnifying Party. Provided that the indemnified Party acts in
good faith, it may settle such claim on any terms it considers appropriate under
the circumstances without in any way affecting its right to be indemnified
hereunder. The indemnifying Party shall promptly reimburse the indemnified Party
for all such costs and expenses.

         24.5 WAIVER OF SUBROGATION.

         If a Party insures against any loss or damage it may suffer in respect
of which it is required to indemnify the other Party, its Affiliates and their
respective Associates pursuant to this Article 24 (Indemnification), it shall be
a condition that the insuring Party arrange for the insurer to waive its right
of subrogation against such other Party and such other Party's Affiliates and
their respective Associates. Each Party shall be entitled to require proof from
time to time that the other Party has complied with its obligations under this
Article 24.5 (Waiver of Subrogation). In the event a Party does not comply with
such obligations, the indemnities referred to in Articles 24.1 (Contractor's
Indemnification), 24.2 (Customer's Indemnification), and Article 24.3 (Cross
Indemnification for Inter-Party Waiver of Liability), as applicable, shall
extend to any claim that may be made by an insurer pursuant to an alleged right
of subrogation.

         24.6 SURVIVAL OF INDEMNIFICATIONS.

         The provisions of this Article 24 (Indemnification) shall survive the
termination or expiration of this Contract.


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<Page>

25. INSURANCE

         25.1 GENERAL OBLIGATIONS.

         (a) Contractor represents that it has procured and will maintain
insurance ("Ground Insurance") against all risks and loss or damage to such
Satellites, and to any and all components purchased for and intended to be
integrated into the Satellite, in an amount not less than the greater of (i) the
replacement value of, or (ii) the amounts paid by Customer with respect to, the
Satellite and components. Contractor shall also maintain public liability
insurance, insurance of employees, and comprehensive automobile insurance, all
in amounts adequate for its potential liabilities under this Contract. For each
Satellite, such insurance shall cover the period beginning at EDC up to the
moment of Launch, but not including Terminated Ignition and, in the event of a
Terminated Ignition, beginning at such Terminated Ignition up to, but not
including subsequent Launch; provided, however, in the event a Satellite is
placed in Storage pursuant to Article 14.4 (g), up to, but not including, the
time the Satellite arrives at the location specified by Customer pursuant to
subparagraph (h). In addition, Contractor shall require each of its
Subcontractors to provide and maintain insurance in amounts for their respective
potential liabilities. In addition, Contractor represents that it has procured
and will maintain at all times, from EDC through Final Acceptance, Ground
Insurance for all other Work.

         (b) Contractor shall provide a certificate of insurance certified by
Contractor's insurance broker, evidencing such insurance coverage to Customer at
Customer's request.

         (c) Contractor shall require its insurers to waive all rights of
subrogation against Customer. Customer shall be named as an additional insured
under Contractor's third-party liability coverages, and as a loss payee as
Customer's interests may appear with respect to property insurance.

         25.2 LAUNCH AND IN-ORBIT INSURANCE.

         (a) Customer shall be responsible for procuring Launch Insurance for
each Satellite and shall secure a binder for such insurance at least sixty (60)
Calendar Days before the applicable Launch Date for such Satellite. Contractor
shall be named as additional insured on such Launch and In-Orbit Insurance
policy to cover Contractor's and its Subcontractor's operation of each
Satellite; provided however that Contractor shall be liable for any Losses
suffered by Customer during the Initial Satellite Operations Phase resulting
from Contractor's (i) willful misconduct or gross negligence, or (ii) acts(s) or
omissions(s) that are the basis of a denial or exclusion of coverage under the
Customer's Launch and In-Orbit Insurance Policy. Customer shall require its
Insurers to waive all rights of subrogation against Contractor. Contractor
shall, at the written request of Customer, provide Customer with reasonable
assistance (such as providing required technical information) in Customer's
efforts to procure Launch Insurance, and support at Customer's meetings with
Insurers, if necessary.

         (b) Without limiting any other Contractor obligations under this
Article 25 (Insurance) and in order to comply with insurance requirements,
Contractor shall, as part of the Pre-Eclipse Test Report or Post-Eclipse Test
Report, specify the basis for Partial Loss, Constructive Total Loss or Total
Loss, the definition of which shall have been provided by


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Customer to Contractor. Notwithstanding Contractor's specifying such basis,
Customer shall make the final determination of whether a Partial Loss,
Constructive Total Loss or Total Loss has occurred.

         (c) Such notices of loss shall comply with the provisions of Article
34.7 (Notices), and the foregoing specified time for the provision of notice may
be shortened in compliance with the respective requirements of such Insurers.

         25.3 PREPARATION OF CLAIMS.

         (a) Each Party shall provide to the other Party any information that
may reasonably be required to prepare and present an insurance claim at the
other Party's written request.

         (b) The Parties warrant and covenant that they will not withhold from
each other any material information either has or will have concerning
anomalies, failures, or non-conformances with or deviations from the
requirements of this Contract, from EDC through Final Acceptance in respect of
any of the Satellites.

         (c) Upon written 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 of a Launch Insurance claim,
Contractor will permit and assist Customer to:

                  (1)      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

                  (2)      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

                  (3)      make available for inspection and copying all
                           information necessary to establish the basis of such
                           claim.

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26. LIMITATIONS OF LIABILITY

         (a) Contractor makes no warranty or agreement, express or implied, to
or for the benefit of any person or entity other than Customer concerning the
performance of the Satellites or any other matters relating to the Work.

         (b) THE PARTIES TO THIS CONTRACT EXPRESSLY RECOGNIZE THAT COMMERCIAL
SPACE VENTURES INVOLVE SUBSTANTIAL RISKS AND RECOGNIZE THE COMMERCIAL NEED TO
DEFINE, APPORTION, AND LIMIT CONTRACTUALLY ALL THE RISKS ASSOCIATED WITH THIS
COMMERCIAL SPACE VENTURE. THE PAYMENTS AND OTHER REMEDIES EXPRESSLY SET FORTH IN
THIS CONTRACT FULLY REFLECT THE PARTIES' NEGOTIATIONS, INTENTIONS, AND
BARGAINED-FOR ALLOCATION OF THE RISKS ASSOCIATED WITH COMMERCIAL SPACE VENTURES.

         (c) THE WARRANTY OBLIGATIONS OF CONTRACTOR AND THE REMEDIES AGAINST
CONTRACTOR THEREFOR THAT ARE EXPRESSLY SET FORTH OR REFERENCED IN ARTICLE 18
(CONTRACTOR'S REPRESENTATIONS, COVENANTS, AND WARRANTIES) ARE EXCLUSIVE AND ARE
IN SUBSTITUTION OF ANY OTHER WARRANTIES, EXPRESS OR IMPLIED (INCLUDING ANY
STATUTORY WARRANTIES SUCH AS IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE), WHICH ARE EXPRESSLY DISCLAIMED.

         (d) CUSTOMER'S SOLE AND EXCLUSIVE REMEDIES, AND CONTRACTOR'S SOLE
OBLIGATIONS FOR (I) ANY BREACH OF THIS CONTRACT, INCLUDING DELAY OR DEFAULT;
AND/OR (II) ANY DEFECT, NON-CONFORMANCE OR DEFICIENCY IN ANY WORK UNDER THIS
CONTRACT OR IN ANY INFORMATION, INSTRUCTIONS, SERVICES, OR OTHER CLAIMS
WHATSOEVER ARISING OUT OF OR RELATING TO THIS CONTRACT AND/OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER DENOMINATED AS CONTRACT, TORT, EQUITABLE,
STATUTORY, OR ANY OTHER TYPE OF CLAIM) ARE LIMITED TO THOSE SET FORTH IN
ARTICLES 10 (LIQUIDATED DAMAGES FOR LATE DELIVERY), 12 (IN-ORBIT PERFORMANCE
INCENTIVE PAYMENTS), 18 (CONTRACTOR'S REPRESENTATIONS, COVENANTS, AND
WARRANTIES), 21 (INTELLECTUAL PROPERTY INFRINGEMENT INDEMNIFICATION), 24
(INDEMNIFICATION), 25 (INSURANCE), AND 32 (TERMINATION) HEREOF AND ANY OTHER
REMEDIES SPECIFICALLY SET FORTH IN THIS CONTRACT; AND ALL OTHER REMEDIES OR
RECOURSE AGAINST CONTRACTOR OF ANY KIND ARE EXPRESSLY DISCLAIMED AND FOREVER
WAIVED BY CUSTOMER.

         (e) CONTRACTOR SHALL NOT, UNDER ANY CIRCUMSTANCES, UNDER ANY WARRANTY
(EXPRESS, IMPLIED, OR STATUTORY) OR UNDER ANY THEORY OF LIABILITY (INCLUDING
NEGLIGENCE, TORT, STRICT LIABILITY, CONTRACT, OR OTHER LEGAL OR EQUITABLE
THEORY) HAVE ANY LIABILITY TO CUSTOMER OR CUSTOMER'S CUSTOMERS FOR ANY SPECIAL,
CONSEQUENTIAL, AND/OR INCIDENTAL DAMAGES, WHETHER OR NOT FORESEEABLE, INCLUDING
LOST REVENUES OR PROFITS, COST OF CAPITAL, OR ANY OTHER FORM OF ECONOMIC


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LOSS RESULTING FROM ANY BREACH OF THIS CONTRACT OR WITH RESPECT TO ANY DEFECT,
NON-CONFORMANCE, OR DEFICIENCY IN ANY INFORMATION, INSTRUCTIONS, SERVICES, OR
OTHER THINGS PROVIDED PURSUANT TO THIS CONTRACT.

         (f) THE TOTAL LIABILITY OF CONTRACTOR 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 ARISING FROM OR
RELATING TO THIS CONTRACT, OR FROM THE PERFORMANCE OR BREACH THEREOF, SHALL NOT
EXCEED, EXCEPT AS OTHERWISE SET FORTH IN THIS CONTRACT, THE CONTRACT PRICE.
NOTWITHSTANDING THE FOREGOING, THE LIMITATIONS OF LIABILITY SET FORTH IN THIS
CONTRACT SHALL NOT APPLY TO CONTRACTOR, ITS AFFILIATES, ASSOCIATES, AND
SUBCONTRACTORS TO THE EXTENT A CLAIM OF ANY KIND RELATED TO OR ARISING OUT OF
THIS CONTRACT IS COVERED BY INSURANCE MAINTAINED BY CONTRACTOR, ITS AFFILIATES,
ASSOCIATES OR SUBCONTRACTORS.

         (g) The limitations of liability set forth herein shall also apply to
all Affiliates, Associates, and Subcontractors of Contractor to the same extent
as set forth herein with respect to Contractor.

         (h) Each Party shall have a duty to mitigate damages for which the
other Party is responsible.

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27. DISPUTE RESOLUTION

         Any dispute, claim, or controversy ("Dispute") between the Parties
arising out of or relating to this Contract, including but not limited to any
Dispute with respect to the interpretation, performance, termination, or breach
of this Contract or any provision thereof shall be resolved as provided in this
Article 27 (Dispute Resolution), provided, however, that (i) disputes as to
payments pursuant to Article 5.3 (Disputed Amounts) concerning whether a
Milestone has been reached and payments therefor have been earned by Contractor,
shall be resolved in accordance with the provisions of Article 5.3 (Disputed
Amounts) and Article 27.2 (Arbitration) and (ii) disputes as to the performance
of a Launched Satellite pursuant to Article 12.4 (Disputed Performance) shall be
resolved in accordance with the provisions of Article 12.4 (Disputed
Performance) and Article 27.2 (Arbitration). All other Disputes concerning
Milestones shall be resolved in accordance with this Article 27 (Dispute
Resolution).

         27.1 INFORMAL DISPUTE RESOLUTION.

         Subject to the provisions of Article 27.3 (Litigation), prior to or
concurrent with the initiation of formal dispute resolution procedures, the
Parties shall first attempt to resolve their Dispute informally, in a timely and
cost-effective manner, as follows:

         (a) If, during the course of the Work, a Party believes it has a
Dispute with the other Party, the disputing Party shall give written notice
thereof, which notice will describe the Dispute and may recommend corrective
action to be taken by the other Party. The Contractor Program Manager shall
promptly consult with the Customer Program Manager in an effort to reach an
agreement to resolve the Dispute.

         (b) In the event agreement cannot be reached within ten (10) Calendar
Days of receipt of written notice, either Party may request the Dispute be
escalated, and the respective positions of the Parties shall be forwarded to an
executive level higher than that under paragraph (a) above for resolution of the
Dispute.

         (c) In the event agreement cannot be reached under paragraphs (a) or
(b) above within a total of twenty (20) Calendar Days after receipt of the
written notice described in paragraph (a) above, either Party may request the
Dispute be escalated, and the respective positions of the Parties shall be
forwarded to the Chief Executive Officer (CEO) of each Party, and such
executives shall meet during such time to resolve the Dispute.

         (d) In the event agreement cannot be reached under paragraphs (a), (b)
or (c) above within a total of thirty (30) Calendar Days after receipt of the
written notice described in paragraph (a) above, either Party may proceed with
arbitration in accordance with Article 27.2 (Arbitration).

         27.2 ARBITRATION.

         Subject to the provisions of Article 27.3 (Litigation), any Dispute not
resolved under Article 27.1 (Informal Dispute Resolution) (except Intellectual
Property Disputes ), Article 5.3


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(Disputed Amounts), or Article 12.4 (Disputed Performance) shall be resolved by
mandatory and binding arbitration in accordance with the provisions of this
Article 27.2 (Arbitration).

         (a) The arbitration shall be conducted by a tribunal of three (3)
arbitrators (the "Tribunal"), each of whom shall have at least ten (10) years
experience in the aerospace and/or satellite telecommunications industry. Within
thirty (30) Calendar Days after the commencement of the arbitration, each Party
shall appoint one arbitrator, and those two arbitrators shall together appoint
the third neutral arbitrator.

         (b) Any controversy or claim arising out of this Contract, including
any Dispute, shall be determined by binding arbitration in accordance with the
Arbitration Rules of JAMS/Endispute (the "JAMS Arbitration Rules") then in
effect, except to the extent modified by this Article 27 (Dispute Resolution).

         (c) The Parties shall be permitted to take discovery, if and as needed,
by deposition upon oral examination, requests for production of documents and
things, and requests for entry upon land for inspection and other purposes, as
those discovery methods are described and defined in the Federal Rules of Civil
Procedure; provided, however, that any limitations in the Federal Rules on the
number, timing, or sequence of such discovery requests shall not apply. The
scope of permissible discovery shall generally be as described in the Federal
Rules of Civil Procedure, Rule 26(b)(1), but the Parties shall use their best
efforts to focus and limit their discovery in accordance with the nature of the
dispute and the need for expedited resolution. The arbitral tribunal may expand
or limit the scope of permissible discovery and establish the time period within
which discovery responses must be served.

         (d) Time is of the essence in the initiation and completion of the
arbitration. The arbitral hearing shall be commenced and conducted
expeditiously. Unless the Tribunal orders otherwise, the dispute should be
submitted to the Tribunal for decision within six (6) months after the
commencement of the arbitration, and the final award shall be rendered within
one (1) month thereafter. The Parties and the Tribunal shall use their best
efforts to comply with this schedule, and the Tribunal may impose any remedy it
deems just for any Party's effort to unnecessarily delay, complicate, or hinder
the proceedings.

         (e) The arbitration shall be held in Washington, D.C., USA, and shall
be conducted in the English language.

         (f) Any arbitration proceeding held pursuant to this Article 27
(Dispute Resolution) shall be governed by the JAMS Rules and the United States
Arbitration Act, 9 U.S.C. Sections 1 ET SEQ. Judgment upon the award rendered by
the Tribunal may be entered in any court having jurisdiction thereof. The
Tribunal shall apply the law of the State of New York, including the Uniform
Commercial Code (where and if applicable) as adopted by the State of New York.

         (g) Pending a decision by the Tribunal, each Party shall, unless
directed otherwise by the other Party in writing, fulfill all its obligations
under this Contract, including the obligation to take all steps necessary during
the pendency of the arbitration to ensure the Work will be Delivered within the
time stipulated or within such extended time as may be allowed under this
Contract, provided Customer shall continue to make payments therefore in
accordance with this


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Contract (including the dispute resolution provisions hereof), and further
provided that, if Customer fails to make such payments, Contractor may stop
Work.

         (h) The Tribunal's award may grant any remedy or relief that the
Tribunal deems just and equitable and within the scope of this Contract,
including specific performance or other equitable relief. Notwithstanding the
foregoing, the Tribunal shall have no power or authority to amend or disregard
any provision of this Article 27 (Dispute Resolution) or any other provision of
this Contract. The Tribunal also shall have no power or authority to award
punitive or exemplary damages to any Party.

         (i) The non-prevailing Party, as determined by the Tribunal, shall pay
the costs of the arbitration. In the event of an arbitration involving multiple
claims with different Parties prevailing on each claim, the Tribunal shall
apportion the costs of the arbitration (which shall not include Excluded Costs)
between or among the Parties in such manner as it deems reasonable, taking into
account the circumstances of the case, the nature of the claims, and the result
of the arbitration.

         (j) The Tribunal shall award pre-award interest on any sums due
(excluding damages) determined by the Tribunal to be owing from one Party to the
other under this Contract. Any award shall also provide that interest shall
continue to accrue after the date of the award until the amount awarded is paid
in full. Interest shall be calculated at the rate set forth in Article 34.10
(Calculation of Interest) for each day from forty-five (45) Calendar Days
following the date of loss or the date the arbitration was commenced, whichever
is earlier, until the date full payment is made.

         (k) Each Party shall bear the costs of its own legal representation,
witnesses produced by such Party, document production, and other discovery
expenses.

         27.3 LITIGATION.

         (a) Notwithstanding the provisions of Article 27.2 (Arbitration) above,
if the Dispute requires that immediate equitable relief or relief in aid of
arbitration be obtained, either Party shall have the right to bring suit solely
to obtain preliminary or temporary injunctive relief, including specific
performance, solely for Intellectual Property issues. However, the Parties
contractually agree that Customer shall not seek specific performance where
Contractor has not been paid in accordance with the provisions of this Contract.
Requests for permanent injunctive relief shall be arbitrated pursuant to Article
27.2 (Arbitration).

                  (1)      Any such suit shall be brought in a court of
                           competent jurisdiction in the State of New York,
                           provided, however, the exclusive venue for any action
                           brought in a New York state court shall be the
                           Supreme Court for New York County, and the Parties
                           hereby waive any objection to that venue. The Parties
                           hereby irrevocably consent to personal jurisdiction
                           in the state and federal courts in the State of New
                           York concerning any Dispute between the Parties. If,
                           for any reason, the state and federal courts of New
                           York do not have or refuse to exercise jurisdiction
                           over the Dispute, then litigation as permitted herein
                           may be brought in any court of competent


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                           jurisdiction in the State of Delaware, provided,
                           however, the exclusive venue for any action brought
                           in a Delaware state court shall be the Superior Court
                           of New Castle County, and the Parties hereby waive
                           any objection to that venue and the Parties hereby
                           irrevocably consent to personal jurisdiction in the
                           state and federal courts in the State of Delaware
                           concerning any dispute between the Parties. If, for
                           any reason, the state and federal courts of Delaware
                           do not have or refuse to exercise jurisdiction over
                           the Dispute, then litigation as permitted herein may
                           be brought in any court of competent jurisdiction in
                           the United States of America, or, if there is no such
                           court, in any other nation.

                  (2)      In the event a Party files a lawsuit pursuant to this
                           Article 27.3 (Litigation), the prevailing party shall
                           be entitled to an award of its costs and fees,
                           including reasonable attorney's fees, incurred with
                           respect to the lawsuit. The defendant in such
                           litigation shall be regarded as the prevailing party
                           if either the court denies the equitable relief
                           sought on the merits or the court otherwise decides
                           that equitable relief is not warranted or the matter
                           should be resolved by arbitration.

         (b) In the event an entity or person not subject to the provisions of
this Article 27 (Dispute Resolution) commences any litigation or proceeding
against any Party hereto in which the other Party hereto is an indispensable
party, the Party against which the litigation or proceeding is brought may join
or attempt to join the other Party in such litigation or proceeding
notwithstanding the provisions of Article 27.2 (Arbitration). For purposes of
this provision, the other Party is an indispensable party in the lawsuit or
proceeding if (i) in its absence complete relief could not be accorded among
those already a party to the lawsuit or proceeding; (ii) its absence may as a
practical matter impair or impede its ability to protect its interests relating
to the subject of the lawsuit or proceeding; or (iii) its absence may leave the
Party against which the litigation or proceeding is brought subject to a
substantial risk of incurring double, multiple, or otherwise inconsistent
obligations by reason of the interest of the other Party relating to the subject
of the lawsuit or proceeding.

         (c) Nothing in this Contract precludes a Party prevailing on any claim,
whether in arbitration or litigation, from initiating litigation in any
appropriate forum to enter or enforce a judgment based on the Tribunal's or
court's award on that claim.


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28. LAUNCH SERVICES

         (a) BASELINE LAUNCH VEHICLE.

         The baseline Launch Vehicle for the first and second Satellites to be
Delivered pursuant to this Contract shall be the Sea Launch Launch Vehicle.

         (b) ALTERNATE LAUNCH VEHICLES.

         In the event that there will be a delay in the schedule of either the
first or second Sea Launch Launch Vehicle, which delay will exceed six (6)
months beyond the last day of the applicable Launch Period, Customer may
exercise any one of the following options for alternate Launch Services subject
to the following conditions:

                  (1) Option 1

                           (i)      Customer may select an alternate Launch
                                    Vehicle(s) from Contractor's then existing
                                    inventory of, H-IIA, or Long March 3B Launch
                                    Vehicles, that, as of the date Customer
                                    exercises the option, have not been sold or
                                    otherwise assigned to other customers of
                                    Contractor, or to Contractor's own satellite
                                    programs (for example, DirecTV, Spaceway,
                                    PanAmSat).

                           (ii)     The price for alternate Launch Vehicles
                                    shall be the same as the price for the
                                    baseline Sea Launch Launch Vehicles.

                           (iii)    If Customer exercises this option, the
                                    payment plan in Exhibit G (Payment Plan and
                                    Termination Liability Amounts) shall be
                                    amended in accordance with Contractor's
                                    payment obligations in Contractor's various
                                    agreements with the Launch Agencies
                                    providing the alternate Launch Vehicles, and
                                    to provide that Customer shall make such
                                    amended payment(s) relating to the alternate
                                    Launch Vehicle(s) to Contractor at least
                                    thirty (30) Calendar Days in advance of
                                    Contractor's respective payment due date for
                                    such payment to such Launch Agency(ies). The
                                    Parties acknowledge and agree that any
                                    deferred or post-Launch payment terms
                                    pursuant to this Contract apply only to the
                                    baseline Launch Vehicles. Accordingly, and
                                    depending upon which alternate Launch
                                    Vehicle(s) is/are selected and when such
                                    selection is made, Customer may be obligated
                                    to make a substantial lump sum payment in
                                    order to bring current any retroactive
                                    Contractor progress or milestone payment
                                    obligation related to the alternative Launch
                                    Vehicle(s).


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                           (iv)     If Customer exercises this option, Customer
                                    shall pay Contractor an additional sum of
                                    [***] as consideration for Customer's
                                    selection of an alternate Launch Vehicle
                                    for each baseline Launch Vehicle. Such
                                    payment shall be made concurrent with the
                                    exercise of this option. Upon such
                                    payment, Customer shall have no further
                                    termination or other liability with
                                    respect to the specific Sea Launch Launch
                                    Vehicle abandoned by Customer.
                                    Notwithstanding the foregoing, in the
                                    event Customer terminates an alternate
                                    Launch Vehicle after Customer has
                                    exercised its option to select such
                                    alternate Launch Vehicle in accordance
                                    with this Article 28 (Launch Services),
                                    Customer's termination liabilities
                                    related to Launch Services, as defined
                                    herein and in Exhibit G (Payment Plan and
                                    Termination Liability Amounts), shall be
                                    applicable to the alternate Launch
                                    Vehicle.

                           (v)      Customer's option to select an alternate
                                    Launch Agency may be exercised by Customer
                                    at any time up to the last day of the
                                    [***] prior to the [***], or to the
                                    [***], as applicable. However, the Parties
                                    recognize that Contractor's inventory of
                                    Launch Vehicles will likely diminish as
                                    the respective Launch Periods approach,
                                    thereby reducing Customer's selection
                                    opportunities for alternate Launch
                                    Vehicles if such option is exercised
                                    later in the option period described
                                    herein.

                  (2) Option 2

                           (i)      Customer may select an alternate Launch
                                    Vehicle from other than Contractor's
                                    inventory of Launch Vehicles.

                           (ii)     If Customer exercises this option, Customer
                                    shall pay Contractor an additional sum of
                                    [***] as consideration for Customer's
                                    selection of an alternate Launch Vehicle
                                    outside of Contractor's inventory. This
                                    Option 2 Election Payment shall be made
                                    concurrent with the exercise of this
                                    option. In addition, the termination
                                    liability schedule for the abandoned Sea
                                    Launch vehicle shall be as follows: [***]
                                    as of March 23, 1998, increasing linearly
                                    on a daily basis to [***] after March 23,
                                    1998 until Launch minus Three (3) Months
                                    (L-3), and [***] after L-3.

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                                    Customer shall pay Contractor the full
                                    termination liability amount within thirty
                                    (30) Calendar Days after this Option 2 is
                                    exercised (less any payments previously
                                    made); or if Customer has previously made
                                    launch vehicle payments exceeding the
                                    termination liability amount, Customer's
                                    termination liability under this paragraph
                                    (ii) shall be offset and Contractor shall
                                    refund Customer launch vehicle payments made
                                    exceeding the termination liability amount
                                    within thirty (30) Calendar Days of
                                    Customer's exercise of this Option 3. Upon
                                    payment of any amount due under this
                                    paragraph (ii), or in the event no amount is
                                    due under this paragraph (ii), upon exercise
                                    of this Option 2, Customer shall have no
                                    further termination or other liability with
                                    respect to the specific Sea Launch abandoned
                                    by Customer.

                           (iii)    If Contractor sells the abandoned Sea Launch
                                    launch vehicle within [***] after exercise
                                    of this Option 2, Contractor shall pay
                                    Customer the amount recovered by
                                    Contractor up to the maximum of the
                                    termination liability amount paid by
                                    Customer pursuant to paragraph (ii), less
                                    Contractor's reasonable costs (including,
                                    but not limited to, re-programming costs,
                                    inventory carrying charges and
                                    unrecoverable costs) incurred in selling
                                    the abandoned launch vehicle.

                           (iv)     Customer may only exercise this option with
                                    respect to one Sea Launch and may not
                                    exercise Option 3 below if this option is
                                    exercised.

                  (3) Option 3

                           (i)      Customer may select an alternate Launch
                                    Vehicle from other than Contractor's
                                    inventory of Launch Vehicles.

                           (ii)     If Customer exercises this option, Customer
                                    shall pay Contractor an additional sum of
                                    [***] as consideration for Customer's
                                    selection of an alternate Launch Vehicle
                                    outside of Contractor's inventory
                                    concurrent with the exercise of this
                                    option. Notwithstanding the foregoing, if
                                    Customer has previously made launch
                                    vehicle payments exceeding the Option 3
                                    Election Payment, Customer's Option 3
                                    Election Payment shall be offset and
                                    Contractor shall refund Customer payments
                                    made exceeding the Option 3 Election
                                    Payment within thirty (30) Calendar Days
                                    of Customer's exercise of this Option 3.
                                    Upon payment of any amount due under this
                                    paragraph (ii), or in the event no amount
                                    is

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with the Securities and Exchange Commission. Confidential treatment has been
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                                    due under this paragraph (ii), upon exercise
                                    of this Option 3, Customer shall have no
                                    further termination or other liability with
                                    respect to the specific Sea Launch abandoned
                                    by Customer.

                           (iii)    Customer may only exercise this option with
                                    respect to one Sea Launch and may not
                                    exercise Option 2 above if this option is
                                    exercised.

         (c) In the event Customer exercises any of the options set forth in
paragraph (b) above, to select a Launch Vehicle other than the baseline Sea
Launch, the Parties will amend (i) the definitions of the terms "Intentional
Ignition" and "Launch" to conform to the definitions of such terms set forth in
the respective Launch Agreement for such alternate Launch Vehicle, as
appropriate, and (ii) Article 33 (Inter-Party Waiver of Liability) so as to
conform to the relevant requirements of the country or countries having
jurisdiction over the Launch. In addition, in the event Customer exercises
either Option 2 or Option 3 set forth in paragraph (b) above, (i) the Parties
shall negotiate in good faith whether delivery of the relevant Satellite shall
be an in-orbit or on-ground delivery under this Contract and in the event the
Parties determine it shall be an on-ground delivery, the Parties shall amend
those portions of this Contract related to such determination (e.g. transfer of
title and risk of loss, delivery schedule, acceptance, liquidated damages and
termination liability) as appropriate to reflect an on-ground delivery of the
relevant Satellite, (ii) Contractor shall perform, without charge (except to the
extent included in the Contract Price), Launch Campaign, Mission Support and
LEOP Services for any launch services substituted by Customer for the Launch
Services terminated hereunder, provided, however, Customer shall pay Contractor
for those extra costs incurred by Contractor as a result of providing Launch
Campaign, Mission Support and LEOP Services to a location other than one
contemplated hereunder, (iii) Customer shall pay Contractor for those extra
costs incurred by Contractor as a result of shipping the applicable Satellite to
a launch site other than one contemplated hereunder, and (iv) if requested by
Customer, Contractor shall perform launch management services for the
substituted launch services at a price mutually agreed by the Parties.

         (d) If a Satellite Launched on a Sea Launch Launch Vehicle is declared
a failure for any reason, within the first three hundred sixty-five (365)
Calendar Days after such failed Launch, Customer shall be entitled to a
replacement Launch on another Sea Launch Launch Vehicle for an identical
satellite, at the same price as the original Launch. The scheduling of such
replacement Launch shall have priority over other Launches on the Sea Launch
Launch Manifest, except for scientific missions which are time sensitive in
nature.

         (e) In the event a Launch fails to occur on or before the last day
of the applicable Launch Period, Contractor shall be liable to Customer for
liquidated damages for the late delivery of Launch Services in the aggregate
total amount of [***] for each Launch Vehicle, such liquidated damages to
accrue at the daily rate of [***], commencing upon the first (1st) Calendar
Day following the last day of the Launch Period, and continuing for a maximum
Launch Services damages period of sixty (60) Calendar Days. Notwithstanding
the foregoing, the Launch Services liquidated damages shall not affect any
liquidated damages

                                       99

<Page>

which may accrue for late Delivery of any Satellite. For the purpose of
determining these Launch Services liquidated damages as provided in this Article
28 (Launch Services), in no event shall delay attributable to a Launch Agency be
deemed an Excusable Delay.











                                      100

<Page>

29. CUSTOMER'S RESPONSIBILITIES

         (a) In addition to Customer's responsibilities identified in this
Contract, Customer shall also discharge those responsibilities, at no cost to
Contractor or to Subcontractors, as set forth in Exhibit B (Statement of Work)
and below.

         (b) Customer will provide beneficial access to Contractor and its
Affiliates and Subcontractors at each Satellite Control Center, on a timely
basis, as necessary to permit Contractor to perform its obligations with respect
to such Satellite Control Centers and related services.

         (c) In addition to, and without limiting the generality of, the
foregoing, Customer will be responsible for the following:

                  (1)      providing all civil works utilities and environmental
                           controls associated with any Satellite Control
                           Center; and

                  (2)      obtaining Launch and In-Orbit Insurance prior to
                           Launch. Customer shall provide Contractor a
                           certificate of such insurance coverage at
                           Contractor's request.

         (d) Customer shall provide written notification to Contractor as early
as practicable as to the identity and nationality of its employees and
Consultant(s) for whom access to Contractor's and Subcontractors' facilities are
required, and subsequent changes thereto, if any. It is recognized that certain
United States Government approvals may be required before such employees and
Consultant(s) have access to Work pursuant to the provisions of Article 6
(Access to Work).

         (e) Customer is responsible for obtaining the necessary Specified
Orbital Locations, frequency spectrum allocations and other approvals and
licenses to operate its DARS Satellite Program.

         (f) Customer shall make available the eleven meter Transfer Orbit
Services (TOS) Antenna at its Satellite Operator's facility for Contractor to
perform TOS services for all Satellites procured under this Contract.

         (g) Failure of Customer to discharge the responsibilities specified in
this Article 29 (Customer's Responsibilities) may result in an equitable
adjustment to the Delivery Schedule, Delivery Dates, and/or Contract Price as
specified in paragraph (a) of Article 11.2 (Equitable Adjustments).

         (h) Customer will make available, for Contractor's use, certain test
equipment and Customer facilities, as set forth in the Exhibit D (Test Plan
Requirements), as Contractor performs the In-Orbit Tests.


                                      101

<Page>


         (i) Upon mutual agreement, Customer will make available to Contractor
Customer's Satellite Operator's facilities for use by Contractor during LEOP
(including the use of Customer's baseband equipment, RF equipment and associated
facilities) as well as provide technical support to Contractor during LEOP as a
primary TT&C site in support of LEOP.

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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

30. OPTIONS

         30.1 OPTIONS GRANTED.

         Contractor hereby grants to Customer the options set forth in this
Article 30 (Options) to be exercised at Customer's sole discretion.

         30.2 OPTION TO DELAY FREQUENCY SPECIFICATION BEYOND TWO (2) MONTHS.

         (a) Customer shall select six (6) potential telemetry downlink
frequencies, as specified in Exhibit A (Spacecraft Performance Specifications),
within the first two (2) months following EDC for subsequent down-selection to
two (2) final telemetry downlink frequencies. If Customer makes a final
selection of the two (2) telemetry downlink frequencies within the first two (2)
months following EDC, there shall be no adjustment to the Contract Price.
However, should Customer fail to make such final selection of two (2) telemetry
downlink frequencies within the two (2) months following EDC, then Customer may
make the final selection of the two (2) telemetry downlink frequencies up to the
last day of the sixth (6th) month following EDC, provided that Customer shall
pay to Contractor an increase in the Contract Price of [***] upon notification
by Customer to Contractor of Customer's final selection.

         (b) In the event Customer fails to make such final selection of the
telemetry downlink frequencies provided in paragraph (a) above on or before the
last day of the sixth (6th) month after EDC, the Contract Price for such
Frequency Specification shall be adjusted in accordance with Article 14.1
(Changes Requested by Customer).

         30.3 RESERVED.

         30.4 LAUNCH CAMPAIGN AND LEOP SERVICES FOR GROUND SPARE SATELLITE
              AND/OR 4TH AND 5TH OPTIONAL SATELLITES.

         Contractor agrees to provide Customer, at Customer's request, Sea
Launch Launch Campaign and LEOP services for the Ground Spare Satellite and/or
the 4th and 5th Optional Satellites, if either or both of these options are
exercised by Customer.

         (a) OPTION PERIOD.

         Customer may order Sea Launch Launch Campaign and/or LEOP services for
the Ground Spare Satellite and the 4th and 5th Optional Satellites at any time
prior to [***] before the scheduled Launch Date for the applicable Ground Spare
Satellite and/or 4th and 5th Optional Satellites.

         (b) PRICE.

         The price for Sea Launch Launch Campaign and LEOP services for each of
the Ground Spare Satellite and 4th and 5th Optional Satellites, including taxes
and documentation, is [***], for each such Satellite ordered by Customer from
EDC through


                                      103

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requested with respect to the omitted portions.

September 22, 2000. Beginning on September 23, 2000, the price will escalate
at the rate of [***] per quarter for each quarter after September 23, 2000,
until the date the order is placed. The price and the price escalation
described in the preceding sentence, shall apply to orders placed for the Ground
Spare Satellite and the 4th and 5th Optional Satellites through the last day of
the [***] month following ARP.

         (c) PAYMENT.

         The price for each Sea Launch Launch Campaign and LEOP services (as
such price may be escalated in accordance with paragraph (b) above) for each of
the Ground Spare Satellite and the 4th and 5th Optional Satellites shall be paid
as follows:

                  (1)      Fifty percent (50%) of such price at the time
                           Customer places an order with Contractor for
                           completion of the Ground Spare Satellite or places an
                           order for the purchase of either or both of the 4th
                           and 5th Optional Satellites, as applicable; and

                  (2)      Fifty percent (50%) of such price on Final Acceptance
                           of the Ground Spare Satellite or the 4th and 5th
                           Optional Satellites, as applicable.

         30.5 4TH AND 5TH OPTIONAL SATELLITES.

         Contractor agrees to provide Customer with options to purchase up to
two (2) additional satellites ("4th and 5th Optional Satellites") to be
delivered on-ground, and of a design functionally identical to the Satellites.

         (a) OPTION PERIOD.

         Customer may exercise this option to order either or both of the 4th
and 5th Optional Satellites at any time through the last day of the [***]
following ARP. In the event of an Excusable Delay in accordance with Article 11
(Excusable Delay) or a Contractor unexcused delay, the Option Period shall
be extended day-for-day for the period of such delay.

         (b) DELIVERY.

         Contractor shall perform the work in connection with the 4th and 5th
Optional Satellites, if one or both are ordered, so the 4th and 5th Optional
Satellites are Available for Shipment within twenty-four (24) months after
order, or four (4) months after the Ground Spare Satellite is Available for
Shipment, if applicable, whichever is later. In the event that the 4th and 5th
Optional Satellites are ordered concurrently, delivery of the 5th Optional
Satellite shall be no earlier than four (4) months following Delivery of the 4th
Optional Satellite.

         (c) PRICE.

         The price for the 4th and 5th Optional Satellites is [***] for each
such Optional Satellite. When an order is placed by Customer during the period
beginning on September 23, 2000 through the last day of the [***] following
ARP, the price stated above shall be increased at a rate of [***]


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requested with respect to the omitted portions.

[***] per quarter for each quarter during such period until the date of
placement by Customer of such order. For example, if Customer places an order
for an optional Satellite on May 15, 2001, Customer shall pay the price
stated above, plus escalation computed for two calendar quarters. The price
for each of the 4th and 5th Optional Satellites includes design, manufacture,
testing, taxes, and ground insurance for each such Optional Satellite, up to
and including Shipment Readiness Review.

         (d) PAYMENT.

         The price for the 4th and 5th Optional Satellites shall be paid in
accordance with the payment plan set forth in Exhibit G-3 (4th and 5th Optional
Satellite Payment Plan and Termination Liability Amounts). In the event Customer
exercises the option to purchase a 4th and/or 5th Optional Satellite, the
applicable Milestone Payment Plan(s) therefor shall be mutually agreed by the
Parties at such time as the option to purchase the 4th and/or 5th Optional
Satellite is exercised.

         (e) CONTRACT ADJUSTMENTS.

         Contractor shall furnish the 4th and 5th Optional Satellites in
accordance with the provisions of the documents constituting this Contract.
Except as otherwise required by the terms and conditions of this Article 30.5
(4th and 5th Optional Satellites), the contract terms and conditions for such
Optional Satellite(s) will be identical to the Terms and Conditions of this
Contract, except that (i) liquidated damages for late delivery shall be [***]
for each such Optional Satellite, and (ii) the in-orbit performance incentive
payments shall be [***] for each such Optional Satellite, and (iii) such terms
shall include no other deferred payments unless mutually agreed by the Parties.

30.6     RESERVED.

30.7     RESERVED.

30.8     OPTIONAL LAUNCH VEHICLES.

         Subject to availability and in accordance with these Terms and
Conditions, except as expressly modified by this Article 30 (Options),
Contractor grants Customer an option to purchase an additional Sea Launch Launch
Vehicle and related services for the Launch of the Ground Spare Satellite or any
other Optional Spacecraft which may be purchased by Customer from Contractor
pursuant to this Contract, in accordance with the following Table 30.8.

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------
                                                             TABLE 30.8
                                         OPTIONAL LAUNCH VEHICLE - OPTION PERIODS AND PRICES
-------------------------------------------------------------------------------------------------------------
<S>                                                                      <C>
If ordered from:                                                         Price:
-------------------------------------------------------------------------------------------------------------
1.  EDC through March 22, 1999                                           [***]
-------------------------------------------------------------------------------------------------------------
2.  March 23, 1999 through March 22, 2001                                [***]
-------------------------------------------------------------------------------------------------------------
</Table>

                                      105

<Page>

         30.9 CONTRACT ADJUSTMENTS.

         Should Customer exercise any or all of the options described in this
Article 30 (Options), the Parties shall execute Amendment(s) as soon as is
reasonably possible after option exercise to incorporate the schedule
adjustments, price adjustments, payment schedule adjustments, and changes to the
Exhibits and other Terms and Conditions as made necessary by such exercise.
Except as otherwise provided in this Article 30 (Options), the terms of this
Contract shall apply to any such options.


                                      106

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31. FAILURE TO MAKE ADEQUATE PROGRESS

         If, at any time prior to Delivery of a Deliverable Item (but not
thereafter), Contractor has failed to make adequate progress toward the
completion of such Deliverable Item, including where such failure is due to the
Deliverable Item or any component thereof being damaged or destroyed where such
damage or destruction does not constitute an Excusable Delay, such that
Contractor, due to causes related to such Deliverable Item, will not be able to
Deliver the Deliverable Item by the applicable Delivery Date (as such date may
have been modified in accordance with this Contract) for such Deliverable Item,
then Customer shall be entitled to deliver to Contractor a Demand for correction
of the failure to make adequate progress. 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 may agree, Contractor shall submit to Customer a
Correction Plan (in the level of detail feasible within that timeframe) for
achieving Delivery not later than the one hundred fiftieth (150th) Calendar Day
following the originally scheduled Delivery Date. If such Correction Plan does
not reasonably correct or offset the effect of the failure so as to demonstrate
that Delivery of the Deliverable Item affected thereby can be achieved within
one hundred fifty (150) Calendar Days after the originally scheduled Delivery
Date, Customer may reject the Correction Plan, and Contractor shall revise the
Correction Plan so as to demonstrate that Delivery for the Deliverable Item
affected thereby can be achieved within one hundred fifty (150) Calendar Days
after the originally scheduled Delivery Date. Nothing herein shall be construed
to release Contractor from its obligation to make Liquidated Damages payments as
applicable in accordance with Article 10 (Liquidated Damages for Late Delivery).

                                      107

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32. TERMINATION

         32.1 TERMINATION FOR CUSTOMER'S CONVENIENCE.

         (a) Customer may, upon written notice to Contractor, at any time
terminate the Work, in whole or in part, in accordance with the terms set forth
below, and Contractor shall immediately cease Work in the manner and to the
extent specified below. Notwithstanding the foregoing, in no event shall there
be a termination for convenience by Customer under this Article 32.1
(Termination for Customer's Convenience) (i) with respect to any Satellite that
has been Launched, whether or not such Launch is successful and (ii) with
respect only to either or both Launch Vehicles, unless Customer has made the
Major Calendar Payment with respect to such Launch Vehicle or Launch Vehicles,
as applicable.

         (b) In the event of partial termination of the Work in accordance with
this Article 32.1 (Termination for Customer's Convenience), Customer's notice of
termination will specify the portion of the Work terminated, and the remaining
provisions of this Article 32.1 (Termination for Customer's Convenience) shall
apply to such terminated portion. All other portions of the Work shall continue
unaffected.

         (c) Upon receipt of a notice of termination, as provided in (a) above,
Contractor shall take the following actions:

                  (1)      stop Work under this Contract on the date and to the
                           extent specified in the notice of termination, except
                           those services that are specifically intended to be
                           provided in connection with a termination of this
                           Contract;

                  (2)      withhold delivery of any of the items to be supplied
                           hereunder until Contractor has received full payment
                           under this Article 32.1 (Termination for Customer's
                           Convenience);

                  (3)      place no further orders or subcontracts for
                           materials, services, or facilities to the extent they
                           relate to the performance of the Work terminated;

                  (4)      terminate orders and Subcontracts to the extent they
                           relate to the performance of the Work terminated;

                  (5)      settle all outstanding liabilities and all claims
                           arising out of such termination of orders and
                           Subcontracts for materials, services, or facilities;
                           and

                  (6)      take such action as may be reasonably necessary, or
                           as Customer may direct, for the protection and
                           preservation of the property related to this Contract
                           that is in the possession of Contractor or any
                           Subcontractor and in which Customer has or may
                           acquire an interest.

         (d) In the event of termination under this Article 32.1 (Termination
for Customer's Convenience) and provided the termination is not due to
Contractor's default under Article 32.2


                                      108

<Page>

(Termination for Contractor's Default), Contractor shall be entitled to payment
of an amount equal to the Termination Liability Amount specified in Exhibit G
(Payment Plan and Termination Liability Amounts) and Exhibit G-2 (Ground Spare
Satellite Payment Plan, Termination Liability Amounts and Incentive Amounts) for
the Ground Spare Satellite, and interest on any other payment not made when
required to be made hereunder, less the sum of all amounts received by
Contractor in cash or cash equivalent under this Contract. In no event shall the
amounts payable pursuant to this Article 32.1 (Termination for Customer's
Convenience) exceed the Contract Price. In the event of a termination of this
Contract in part, as permitted by the terms of this Contract, the Parties shall
negotiate an equitable termination liability amount to be paid to Contractor for
that portion of the Work so terminated.

         (e) Contractor shall submit an invoice to Customer in accordance with
paragraph (d) above within sixty (60) Calendar Days after the termination date,
which invoice shall specify the amount due to Contractor from Customer pursuant
to this Article 32.1 (Termination for Customer's Convenience). By notice in
writing received by Contractor no later than fifteen (15) Calendar Days after
receipt of Contractor's invoice pursuant to this Article 32.1 (Termination for
Customer's Convenience), Customer may dispute the amount of interest specified
in said invoice. In the event Customer does not so notify Contractor that it
disputes the interest in Contractor's invoice within fifteen (15) Calendar Days
after receipt thereof, Customer shall be deemed to have accepted such invoice.
Contractor shall be entitled to payment by Customer of undisputed amounts in
such invoice within fifteen (15) Calendar Days after Customer's receipt of the
invoice, and with respect to disputed interest amounts, ten (10) Calendar Days
after the resolution of such dispute. Payment of such amount by any Financing
Entity on behalf of Customer shall relieve Customer from its obligation to make
such payment.

         (f) Payment of the amount payable by Customer to Contractor pursuant to
paragraph (d) above shall constitute a total discharge of Customer's liabilities
to Contractor for termination pursuant to this Article 32.1 (Termination for
Customer's Convenience).

         (g) Upon completion of all payments in accordance with this Article
32.1 (Termination for Customer's Convenience), Customer may require Contractor
to transfer to Customer in the manner and to the extent directed by Customer,
title to and possession of any items comprising all or any part of the Work
terminated (including all Work-in-progress, parts and materials, and all
inventories and associated warranties), and Contractor shall, upon direction of
Customer, protect and preserve property at Customer's expense in the possession
of Contractor or its Subcontractors in which Customer has an interest and shall
facilitate access to and possession by Customer of items comprising all or part
of the Work terminated. Alternatively, Customer may request Contractor to make a
reasonable, good faith effort to sell such items and to remit any sales proceeds
to Customer less a deduction for costs of disposition reasonably incurred by
Contractor for such efforts. To the extent Contractor's compliance with this
paragraph (g) requires governmental approvals and Contractor cannot, with the
exercise of commercially reasonable efforts, procure such approvals, Contractor
shall be excused from performing its obligations under this paragraph (g).

         (h) If in Contractor's judgment it is feasible for Contractor to
utilize any items of terminated Work, it shall submit to Customer an offer to
acquire such items. If such offer is accepted, Contractor's termination invoice
shall be credited with the agreed acquisition price.


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requested with respect to the omitted portions.

         32.2 TERMINATION FOR CONTRACTOR'S DEFAULT.

         (a) Customer may terminate this Contract, in whole or in part, upon
service of written notice of default to Contractor at any time after the
occurrence of any of the following:

                  (1)      Subject to any schedule adjustments pursuant to
                           Article 11 (Excusable Delay), Contractor fails to
                           meet the following program Milestone events:

                           (i)      Conduct Spacecraft Preliminary Design Review
                                    (PDR) by [***];

                           (ii)     Conduct Spacecraft Critical Design Review
                                    (CDR) by [***];

                           (iii)    Mate Bus and Payload Module for the first
                                    Satellite by [***];

                           (iv)     first Spacecraft Available for Shipment to
                                    Launch site by [***];

                           (v)      Mate Bus and Payload Module for the second
                                    Satellite by [***];

                           (vi)     second Spacecraft Available for Shipment to
                                    Launch site by [***];

                           (vii)    Mate Bus and Payload Module for the Ground
                                    Spare Satellite by [***]; or

                           (viii)   Ground Spare Satellite Available for
                                    Shipment to Launch Site by [***].

                  (2)      A Satellite has not been Delivered on or before the
                           applicable Delivery Date (as may be extended in
                           accordance with this Contract) and all applicable
                           liquidated damages for late delivery that may accrue
                           to Customer's benefit for the late delivery of said
                           Satellite have been exhausted in accordance with
                           Article 10 (Liquidated Damages for Late Delivery);

                  (3)      If, with respect to the first Satellite, at [***],
                           the Launch Agency has failed to establish the
                           Launch Slot to begin no later than [***], or if,
                           with respect to the second Satellite, at ARP plus
                           ten (10) months, the Launch Agency has failed to
                           establish the Launch Slot to begin no later than
                           [***];

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requested with respect to the omitted portions.

                  (4)      Contractor commences a voluntary proceeding
                           concerning itself under any applicable bankruptcy,
                           insolvency, reorganization, adjustment of debt,
                           relief of debtors, or similar law ("Insolvency Law");
                           or any involuntary proceeding commences against
                           Contractor under an Insolvency Law and the petition
                           has not been dismissed within ninety (90) Calendar
                           Days after commencement of the proceeding; or a
                           receiver or custodian is appointed for or takes
                           charge of all or a substantial portion of the
                           property of Contractor and such custodian or receiver
                           has not been dismissed or discharged within sixty
                           (60) Calendar Days; or Contractor has taken action
                           toward the winding-up, dissolution, or liquidation of
                           Contractor or its business; or Contractor has been
                           adjudicated insolvent or bankrupt or an order for
                           relief or any other order approving a case or
                           proceeding under any Insolvency Law has been entered;
                           or Contractor has made a general assignment for the
                           benefit of creditors or becomes unable to pay its
                           debts generally as they become due. Should Contractor
                           become a debtor in any bankruptcy proceeding,
                           Contractor shall move to assume or reject this
                           Contract within forty-five (45) Calendar Days after
                           the entry of any order for relief; or

                  (5)      Contractor has purported to assign or transfer this
                           Contract in violation of the provisions of Article
                           34.1 (Assignment) and Contractor fails to cure such
                           unauthorized purported assignment or transfer within
                           thirty (30) Calendar Days after receiving written
                           notice from Customer of the unauthorized purported
                           assignment or transfer.

         (b) In the event Customer terminates this Contract pursuant to
paragraph (a), Customer shall be entitled to, subject to paragraph (d) below,
refund of all payments previously made to Contractor in cash under this Contract
and payment of any liquidated damages for delay levied pursuant to Article 10
(Liquidated Damages for Late Delivery) and, as damages, direct reasonable
re-procurement costs in excess of the Contract Price, such re-procurement costs
to be actually incurred and invoiced to Contractor in reasonable detail and not
to exceed [***]; provided, however, if Customer terminates this Contract
pursuant to paragraph (a)(2) above for late delivery and such late delivery
is caused by unexcused delay under Article 10.3 (Termination for Unexcused
Delay) on which liquidated damages have been levied, Customer shall not be
entitled to such re-procurement costs.

         (c) Upon Contractor's completion of all payments under paragraph (b)
above, Contractor shall be entitled to retain title to any and all Work,
Work-in-progress, parts or other material, inventories and any associated
warranties, and any subcontracted items Contractor has specifically produced,
acquired, or entered into in accordance with this Contract. Until Contractor has
paid to Customer the payments required under paragraph (b) above, Customer shall
have an interest in the Work, subject to Article 5.7 (Security Interest).

         (d) Customer shall submit an invoice to Contractor for the amounts
payable under paragraph (b) no later than one (1) year after the termination
date. The amounts payable by Contractor under paragraph (b) above shall be
verified at Contractor's request and expense by an internationally recognized
firm of accountants appointed by Contractor for that purpose subject


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to approval of Customer. Contractor's right to verification shall be without
prejudice to the rights of either Party under Article 27 (Dispute Resolution).
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 arbitral
tribunal. By notice in writing received by Customer no later than sixty (60)
Calendar Days after receipt of Customer's invoice pursuant to paragraph (b),
Contractor may dispute the amount of said invoice. In the event Contractor does
not so notify Customer that it disputes Customer's invoice, Contractor shall be
deemed to have accepted said invoice. Customer shall be entitled to payment of
such amount within fifteen (15) Calendar Days after Contractor's receipt of such
invoice or, in the event of dispute, ten (10) Calendar Days after the resolution
of such dispute.

         (e) Notwithstanding any other provision of this Article 32
(Termination), a termination for Contractor's default shall not relieve the
Parties of their obligations with respect to any Launched Satellite and there
will be no right of termination for default with respect to a Launched
Satellite.

         (f) In the event Customer terminates this Contract as provided in
paragraph (a), Contractor, if requested in writing by Customer, shall assign to
Customer or its designee, such Subcontracts as requested by Customer, to the
extent permitted by such Subcontracts.

         (g) If, after termination of this Contract under the provisions of
paragraph (a), it is determined by arbitration, pursuant to Article 27 (Dispute
Resolution), or admitted in writing by Customer, that Contractor was not in
default under the provisions of paragraph (a), or that any delay giving rise to
the default was excusable under the provisions of Article 11 (Excusable Delay),
such termination shall be considered a Termination for Convenience by Customer
and the provisions of Article 32.1 (Termination for Customer's Convenience)
shall apply.

         (h) Contractor's compliance with this Article 32.2 (Termination for
Contractor's Default) shall constitute Customer's sole and exclusive remedy in
the event of a termination for Contractor's default.

         32.3 TERMINATION FOR CUSTOMER'S DEFAULT.

         (a) Contractor may stop work or terminate this Contract in whole or in
part upon service of written notice of default to Customer at any time after the
occurrence of any of the following:

                  (1)      Subject to paragraph (2), if Contractor gives written
                           notice to Customer of default in the payment of any
                           amount, including Milestone Payments, Major Calendar
                           Payments, and other Calendar Payments, when such
                           amount shall have become due and payable; or

                  (2)      Customer fails to cause Contractor to be paid any
                           Milestone Payment amounts determined to be due and
                           payable under Article 5.3 (Disputed Amounts) within
                           the time period set forth in Article 5.3 (Disputed
                           Amounts); or

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                  (3)      Customer commences a voluntary proceeding concerning
                           itself under any applicable bankruptcy, insolvency,
                           reorganization, adjustment of debt, relief of debtors
                           or similar law ("Insolvency Law"); or any involuntary
                           proceeding commences against Customer under an
                           Insolvency Law and the petition has not been
                           dismissed within ninety (90) Calendar Days after
                           commencement of the proceeding; or a receiver or
                           custodian is appointed for or takes charge of all or
                           a substantial portion of the property of Customer and
                           such custodian or receiver has not been dismissed or
                           discharged within sixty (60) Calendar Days; or
                           Customer has taken action toward the winding-up,
                           dissolution, or liquidation of Customer or its
                           business; or Customer has been adjudicated insolvent
                           or bankrupt or an order for relief or any other order
                           approving a case or proceeding under any Insolvency
                           Law has been entered; or Customer has made a general
                           assignment for the benefit of creditors or becomes
                           unable to pay its debts generally as they become due.
                           Should Customer become a debtor in any bankruptcy
                           proceeding, Customer shall move to assume or reject
                           this Contract within forty-five (45) Calendar Days
                           after the entry of any order for relief; or

                  (4)      Customer has purported to assign or transfer this
                           Contract in violation of the provisions of Article
                           34.1 (Assignment) and Customer fails to cure such
                           unauthorized assignment or transfer within thirty
                           (30) Calendar Days after receiving written notice
                           from Contractor of such unauthorized purported
                           assignment or transfer by Customer; or

                  (5)      Customer fails to raise [***] in financing in
                           addition to the [***] required by Article 7(d) for a
                           total minimum of the [***] in financing within one
                           hundred eighty (180) Calendar Days after ARP.

         (b) Upon the occurrence of an event of default under paragraph (a)
above, and following the expiration of any applicable cure period, Contractor
shall have the following rights (in addition to termination):

                  (1)      Contractor may stop Work immediately under this
                           Contract and all obligations of Contractor shall
                           terminate hereunder;

                  (2)      Contractor may, at its sole option, terminate its
                           obligations to cause a Launch Vehicle to be provided
                           for the benefit of Customer, without terminating the
                           whole Contract; provided, however, if Contractor
                           terminates this Contract in part, Contractor may
                           terminate only the Launch Vehicle obligations
                           applicable to the portion of this Contract being so
                           terminated (by way of example, if Contractor
                           terminates this Contract in part with respect to the
                           first Satellite to be delivered, only the Launch
                           Vehicle obligations related to the Launch of the
                           first Satellite may be terminated);


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                  (3)      Contractor shall be entitled to retain possession and
                           title to the Work, and all items thereof, and all
                           payments received prior to such termination, unless
                           and until all payments due under the Contract as a
                           result of any termination by Contractor have been
                           received by Contractor in immediately available
                           funds;

                  (4)      Contractor may sell the Work, or items thereof to a
                           person other than Customer, provided the proceeds of
                           such sale of such Work are applied to off-set any
                           termination liability amounts due to Contractor by
                           Customer;

                  (5)      Contractor may withhold delivery of any of the items
                           to be supplied hereunder until Contractor has
                           received full payment under this Article 32.3
                           (Termination for Customer's Default);

                  (6)      Contractor shall place no further orders or
                           subcontracts for materials, services, or facilities
                           to the extent they relate to the performance of the
                           Work;

                  (7)      Contractor shall terminate orders and Subcontracts to
                           the extent they relate to the performance of the
                           Work;

                  (8)      Contractor shall settle all outstanding liabilities
                           and all claims arising out of such termination of
                           orders and Subcontracts for materials, services, or
                           facilities;

                  (9)      Contractor shall take such action as may be
                           reasonably necessary for the protection and
                           preservation of the property related to this Contract
                           that is in the possession of Contractor or any
                           Subcontractor and in which Customer has or may
                           acquire an interest; and

                  (10)     Should Customer become a debtor in any bankruptcy
                           proceeding, Customer shall move to assume or reject
                           this Contract within forty-five (45) Calendar Days
                           after the entry of any order for relief.

         (c) Nothing in this Article 32.3 (Termination for Customer's Default)
shall limit any rights (and associated remedies to enforce these rights) that
Contractor may have in the Work by virtue of its security interest (pursuant to
Article 5.7 (Security Interest)) in the Work and the Ground Spare Satellite, if
elected to be purchased pursuant to Article 30 (Options).

         (d) In the event Contractor terminates this Contract, in whole or in
part, as provided above, Contractor shall be entitled to payment of the amounts
specified in Article 32.1 (Termination for Customer's Convenience).

         (e) Contractor shall submit an invoice to Customer in accordance with
paragraph (d) above within sixty (60) Calendar Days after the termination date,
which invoice shall specify the amount due to Contractor from Customer pursuant
to this Article 32.3 (Termination for Customer's Default). By notice in writing
received by Contractor no later than fifteen (15) Calendar Days after receipt of
Contractor's invoice pursuant to this Article 32.3 (Termination for


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with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

Customer's Default), Customer may dispute the amount of any interest specified
in said invoice. In the event Customer does not so notify Contractor that it
disputes the interest in Contractor's invoice within fifteen (15) Calendar Days
after receipt thereof, Customer shall be deemed to have accepted such invoice.
Contractor shall be entitled to payment by Customer of undisputed amounts in
such invoice within fifteen (15) Calendar Days after receipt of the invoice, and
with respect to disputed interest amounts, ten (10) Calendar Days after
resolution of such dispute. Payment of such amount by any Financing Entity on
behalf of Customer shall relieve Customer from its obligation to make such
payment.

         (f) Payment of the amount payable by Customer pursuant to paragraph (c)
above shall constitute a total discharge of Customer's liabilities to Contractor
for termination pursuant to this Article 32.3 (Termination for Customer's
Default).

         (g) Upon completion of all payments to Contractor in accordance with
this Article 32.3 (Termination for Customer's Default), Customer may require
Contractor to transfer to Customer in the manner and to the extent directed by
Customer, title to and possession of any items comprising all or any part of the
Work terminated (including all Work-in-progress, parts and materials, all
inventories, and associated warranties), and Contractor shall, upon direction of
Customer, protect and preserve property at Customer's expense in the possession
of Contractor or its Subcontractors in which Customer has an interest and shall
facilitate access to and possession by Customer of items comprising all or part
of the Work terminated. Alternatively, Customer may request Contractor to make a
reasonable, good faith effort to sell such items and to remit any sales proceeds
to Customer less a deduction for costs of disposition reasonably incurred by
Contractor for such efforts on terms agreed to by the Parties at that time.

         (h) Except as specified in this Contract, Contractor shall not have the
right to terminate or suspend this Contract.

         32.4 TERMINATION FOR EXCUSABLE DELAY.

         (a) Customer may, upon written notice to Contractor, immediately
terminate this Contract, in whole or in part, if and when it becomes reasonably
certain that the aggregate of Excusable Delays (except those Excusable Delays
caused directly by Customer's failure to perform its responsibilities under this
Contract) will exceed four hundred eighty-five (485) Calendar Days.

         (b) In the event of termination under this Article 32.4 (Termination
for Excusable Delay), Customer shall be entitled to, subject to paragraph (c)
below, refund of all payments previously made to Contractor in cash or cash
equivalent under this Contract and payment of any liquidated damages, if any,
for delay levied pursuant to Article 10 (Liquidated Damages for Late Delivery),
less [***] of all such payments (excluding liquidated damages) (the "Refund
Reduction Amount"), which Refund Reduction Amount shall not exceed a total of
[***].

         (c) Upon completion of all payments to Customer in accordance with this
Article 32.4 (Termination for Excusable Delay), Contractor shall be entitled to
retain title to any and all Work, Work-in-progress, parts or other material,
inventories, and any associated warranties, and


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any subcontracted items Contractor has specifically produced, acquired, or
entered into in accordance with this Contract.

         (d) Customer shall submit an invoice to Contractor for the amounts
payable under this Article 32.4 (Termination for Excusable Delay) no later than
one (1) year after the termination date. By notice in writing received by
Customer no later than fifteen (15) Calendar Days after receipt of Customer's
invoice pursuant to this Article 32.4 (Termination for Excusable Delay),
Contractor may dispute the amount of said invoice. In the event Contractor does
not so notify Customer that it disputes Customer's invoice, Contractor shall be
deemed to have accepted said invoice. Customer shall be entitled to payment of
such amount within fifteen (15) Calendar Days after Contractor's receipt of such
invoice or, in the event of dispute, ten (10) Calendar Days after the resolution
of such dispute.

         (e) In the event it is determined by arbitration pursuant to Article 27
(Dispute Resolution) or by written agreement of the Parties that Customer
wrongfully terminated this Contract under this Article 32.4 (Termination for
Excusable Delay), such termination shall be considered a Termination for
Convenience by Customer and the provisions of Article 32.1 (Termination for
Customer's Convenience) shall apply.

         32.5 TIME OF THE ESSENCE.

         Time is of the essence in this Contract, including with respect to the
resolution of any disputes between the Parties under this Article 32
(Termination).

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33. INTER-PARTY WAIVER OF LIABILITY

         (a) Prior to commencement of Launch Services, each Party will provide
the other Party with evidence reasonably satisfactory to the other Party that it
has complied with the inter-party waiver of liability and related insurance and
indemnification provisions of any Launch Agreement, including any requirement to
obtain substantially similar waivers and/or indemnifications from other parties
such as entities conducting operations at the launch site, customers,
contractors, subcontractors at any tier, or the United States Government.

         (b) Notwithstanding any other term or provision contained in this
Contract, this Article 33 (Inter-Party Waiver of Liability) shall survive the
completion or termination of this Contract in any manner whatsoever.

         (c) The Parties will take such further actions as may be required to
implement the provisions of this Article 33 (Inter-Party Waiver of Liability),
including the execution of such agreements, waivers, and indemnifications as are
customarily used with respect to operations at the launch site and are
consistent with the provisions of this Article 33 (Inter-Party Waiver of
Liability).

         (d) For any Launch subject to the jurisdiction of the United States,
the Launch Agency shall procure and maintain such insurance as required by the
United States Department of Transportation for loss or damage to United States
Government property or for death, bodily injury or property damage or loss to
third parties in connection with the licensed Launch activities provided under
this Contract. For Launches not subject to the jurisdiction of the United
States, the Launch Agency shall procure and maintain such insurance as required
by the government having jurisdiction over such Launch.

         (e) The Launch Agency has executed agreements with various United
States Government agencies for the use of Government-owned property and
facilities relating to the production of launch vehicles and launch operations.
Customer agrees that it will comply with the United States Government's Laws as
they relate to Customer-furnished property and personnel, and those agreements
relating directly to the United States expendable launch vehicle program.
Contractor shall request the Launch Agency to furnish copies of such agreements
to Customer upon Customer's request.

         (f) Contractor shall require the Launch Agency to indemnify, defend and
hold harmless Contractor and Customer from third-party claims for bodily injury,
including death, property damage and losses, arising from or relating to any
Launch Services provided by the Launch Agency.

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34. GENERAL

         34.1 ASSIGNMENT.

         (a) Contractor shall not, without the prior written approval of
Customer and except on such terms and conditions as are determined in writing by
Customer, assign, mortgage, charge, or encumber this Contract or any part
thereof, any of its rights, duties, or obligations hereunder, or the Work to any
person or entity (except to its parent company or a wholly-owned direct or
indirect subsidiary company of Contractor, or any person or entity acquiring all
or substantially all the assets of Contractor (through merger, stock or asset
acquisition, recapitalization, or reorganization) where such merger,
acquisition, recapitalization, or reorganization does not adversely affect
Customer's rights under this Contract); provided, however, Customer shall
provide its approval, if in Customer's reasonable judgment, Customer's rights
under this Contract are not and would not be adversely affected thereby.

         (b) Customer shall not, without the prior written approval of
Contractor, assign, mortgage, charge, or encumber this Contract or any part
thereof, or merge with or into or sell all or substantially all its assets to
any other entity (except to its parent company or a wholly-owned direct or
indirect subsidiary company of Customer, or any person or entity acquiring all
or substantially all the assets of Customer (through merger, stock or asset
acquisition, recapitalization, or reorganization) where such merger,
acquisition, recapitalization, or reorganization does not adversely affect
Contractor's rights under this Contract); provided, however, Contractor shall
provide its approval, if in Contractor's reasonable judgment, Contractor's
rights under this Contract are not and would not be adversely affected thereby.

         (c) The assigning Party shall reimburse the other Party for all
reasonable expenses incurred by the other Party (and invoiced in reasonable
detail) in obtaining advice from its external financial and legal advisors
relating to the assigning Party's proposed assignment or transfer.

         (d) This Contract shall be binding on the Parties and their successors
and permitted assigns. Assignment of this Contract shall not relieve the
assigning Party of any of its obligations nor confer upon the assigning Party
any rights except as provided in this Contract.

         34.2 ENTIRE AGREEMENT.

         This Contract contains the entire agreement between the Parties
regarding the Work hereunder and supersedes all communications, negotiations,
and other agreements either written or oral, relating to the Work and made prior
to EDC, unless the same are expressly incorporated by reference into this
Contract. Further, this Third Amended and Restated Satellite Purchase Contract
supercedes the Original Satellite Purchase Contract, as amended, and the First
Amended and Restated Satellite Purchase Contract and the Second Amended and
Restated Satellite Purchase Contract, and this Third Amended and Restated
Satellite Purchase Contract constitutes the sole agreement between the Parties
as to the Work to be performed hereunder.


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requested with respect to the omitted portions.

         34.3 AMENDMENTS.

         This Contract, including any and all its Schedules, Attachments,
Annexes, Exhibits and Appendices thereto, may not be modified except by written
instrument of subsequent date signed by an officer of Contractor, or another
person designated in writing by any such officer to sign such an instrument and
a senior vice president of Customer, or another person designated in writing by
any such Customer senior vice president to sign such an instrument.

         34.4 WAIVER OF BREACH OF CONTRACT.

         A waiver of any provision or any breach of a provision of this Contract
shall not be binding upon either Party unless the waiver is in writing, signed
by a duly authorized representative of the Party to be bound, as applicable, and
such waiver shall not affect the rights of the Party not in breach with respect
to any other or future breach. No course of conduct by a Party shall constitute
a waiver of any provision or any breach of a provision of this Contract unless a
written waiver is executed in accordance with the provisions of this Article
34.4 (Waiver of Breach of Contract).

         34.5 SEVERABILITY.

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

         34.6 APPLICABLE LAW.

Except as provided in Article 27 (Dispute Resolution), this Contract and
performance under it shall be governed by, construed and enforced in accordance
with the Laws in force in the State of New York, without regard to conflict of
laws provisions thereof.

         34.7 NOTICES.

         (a) All notices, requests, demands, and determinations under this
Contract, including any required under Article 34.1 (Assignment), (other than
routine operational communications), shall be in writing and shall be deemed
duly given (i) when delivered by hand, (ii) two (2) Business Days after being
given to an express courier with a reliable system for tracking delivery, and
(iii) when sent by facsimile (confirmed by the specific individual to whom the
facsimile is transmitted) with a copy sent by another means specified in this
Article 34.7 (Notices), and addressed as follows:

         Customer:  XM Satellite Radio Inc.
                    1500 Eckington Place, NE
                    Washington, DC   20002

                    Attn: [***]
                    Facsimile [***]
                    Phone [***]

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         Contractor:    Boeing Satellite Systems  International, Inc.
                        Courier: 901 North Selby Street
                        El Segundo, CA 90245
                        Mail: P.O. Box 92919
                        Los Angeles, CA 90009
                        Tel. No.: [***]
                        Fax No.: [***]

                        Attention: [***]
                        Director, Commercial/International Business
                        Bldg W-S41, M/S A374

         (b) A Party may from time to time change its address or designee for
notification purposes by giving the other Party prior written notice of the new
address or designee and the date upon which it will be effective.

         34.8 PARTIES NOT AGENTS.

         (a) Contractor, in performing the Work hereunder, is acting as an
independent contractor, and Contractor has the sole right and obligation to
supervise, manage, contract, direct, procure, perform, or cause to be performed,
all Work to be performed by Contractor under this Contract.

         (b) None of the provisions of this Contract or of any of its Exhibits,
shall be construed to mean that either Party is appointed or is in any way
authorized to act as an agent of the other Party.

         34.9 RELEASE OF INFORMATION.

         (a) From and after the Effective Date of Contract, other than
disclosures required by Law or requirements of NASDAQ, the NYSE or any other
national securities exchange, any publicity, news releases, articles, brochures,
advertisements, prepared speeches, and other information releases regarding the
specific financial details of this Contract or proprietary information of the
other Party regarding the Work performed or to be performed hereunder shall be
mutually agreed upon in writing by Contractor and Customer within a reasonable
time prior to the release of such information. This obligation shall not apply
to Customer's statement or publication of Exhibit B (Statement of Work) or
Exhibit A (Spacecraft Performance Specifications) or parts thereof. This
obligation also shall not apply to information that is publicly available from
any Governmental agency or that is or otherwise becomes publicly available
without breach of this Contract. This Article 34.9 (Release of Information) also
shall not apply to internal publications or releases not intended for the public
at large.

         (b) Prior to any disclosure required by Law or requirements of NASDAQ,
the NYSE, or any other national securities exchange, the Party required to
disclose shall inform the other Party and shall consult with such Party
regarding its views as to which portions of such information it should seek to
have treated as confidential. In addition, prior to filing this Contract with
any Governmental or quasi-Governmental agency, Customer shall advise Contractor
of such filing and, as requested by Contractor, redact such terms that
Contractor


                                      120

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

reasonably determines to be confidential and that could put Contractor at a
competitive disadvantage if publicly disclosed, subject to the requirements
and/or approval of the Government and/or quasi-Governmental agency.

         34.10 CALCULATION OF INTEREST.

         Except as otherwise specified in this Contract, any interest due to
Contractor under this Contract shall be calculated at the annual rate equal to
the three (3) month London Interbank Offer Rate (LIBOR) for U.S. Dollars [***].
Except as otherwise specified in this Contract, any interest due to Customer
under this Contract shall be calculated at the annual rate equal to the three
(3) month LIBOR for U.S. Dollars [***].

         34.11 SURVIVAL.

         The following Articles, and the provisions contained therein, shall be
deemed to survive the termination (for any reason) or expiration of this
Contract, and, accordingly, such Articles shall remain applicable and
enforceable in accordance with their terms:

         (a) Article 1 (Definitions);

         (b) Article 9 (Title and Risk of Loss);

         (c) Article 10 (Liquidated Damages for Late Delivery);

         (d) Article 11 (Excusable Delay);

         (e) Article 12 (In-Orbit Performance Incentive Payments);

         (f) Article 18.3 (Warranties for Deliverable Items);

         (g) Article 20 (Intellectual Property Rights);

         (h) Article 21 (Intellectual Property Infringement Indemnification);

         (i) Article 22 (Confidential Information);

         (j) Article 23 (Non-Competition Obligation), provided that this
Contract is not terminated for Customer's convenience, pursuant to Article 32.1
(Termination for Customer's Convenience) or terminated for Customer's default,
pursuant to Article 32.3 (Termination for Customer's Default);

         (k) Article 24 (Indemnification);

         (l) Article 26 (Limitation of Liability);

         (m) Article 27 (Dispute Resolution);

         (n) Article 32 (Termination);


                                      121

<Page>

         (o) Article 33 (Inter-Party Waiver of Liability);

         (p) Article 34.6 (Applicable Law);

         (q) Article 34.10 (Calculation of Interest); and

         (r) Article 34.15 (Covenant of Good Faith).

         34.12 NO THIRD-PARTY BENEFICIARIES.

         This Contract is entered into solely between, and may be enforced only
by, Customer and Contractor and their permitted assigns, and this Contract shall
not be deemed to create any rights in third parties, including suppliers and
customers of a Party, or to create any obligations of a Party to any such third
parties.

         34.13 CONSENTS AND APPROVALS.

         Except where expressly provided as being in the sole discretion of a
Party, where agreement, approval, acceptance, consent, or similar action by
either Party is required under this Contract, such action shall not be
unreasonably delayed or withheld. An approval or consent given by a Party under
this Contract shall not relieve the other Party from responsibility for
complying with the requirements of this Contract, nor shall it be construed as a
waiver of any rights under this Contract, except as and to the extent otherwise
expressly provided in such approval or consent.

         34.14 LENDER REQUIREMENTS.

         (a) The Parties recognize this Contract may be financed through
external sources. Contractor shall provide to any Financing Entity any program
information or certification that such Financing Entity reasonably requires
(subject to confidentiality agreements governing such program information).

         (b) Contractor agrees to work cooperatively to negotiate and execute
such documents as may be reasonably required to implement such financing to the
extent such financing or document does not adversely affect Contractor's
interests under this Contract.

         (c) Contractor agrees to execute such documents as may be reasonably
required by any Financing Entity, including a contingent assignment of this
Contract to such Financing Entity, under terms reasonably acceptable to
Contractor and to agree to such modifications to this Contract as such Financing
Entity may reasonably require, provided Contractor's interests under this
Contract are not adversely affected.

         34.15 COVENANT OF GOOD FAITH.

         Each Party agrees that, in respective dealings with the other Party
under or in connection with this Contract, it shall act in good faith.


                                      122

<Page>

         34.16 COUNTERPARTS.

         This Contract may be executed in two (2) or more counterparts, which
taken together constitute one single contract between the Parties.

                                      123

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

         35. OTHER BUSINESS

         (a) [***].

         (b) [***].

         IN WITNESS WHEREOF, this Contract has been executed on behalf of
Customer by persons authorized to act on Customer's behalf, and has also been
executed on behalf of Contractor by persons authorized to act on Contractor's
behalf.


<Table>
<S>                                                            <C>
BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.                   XM SATELLITE RADIO INC.


By: _______________________________                            By: ___________________________________
              (Signature)                                                    (Signature)

Name:  ____________________________                            Name:  ________________________________

Title:  ___________________________                            Title:   ______________________________
                                                               .
Date  May 15, 2001                                             Date:   May 15, 2001
</Table>

                                      124

<Page>

                                  ATTACHMENT A

                           FORM OF REQUEST FOR PAYMENT


                                     [Date]

XM Satellite Radio Inc.
1500 Eckington Place, NE
Washington, DC 20002

ATTENTION:  Treasurer

         RE:      Terms and Conditions of the Third Amended and Restated
                  Satellite Purchase Contract for In-Orbit Delivery, dated as of
                  May 15, 2001 (as amended, supplemented or modified from time
                  to time, the "XM Satellite Purchase Contract"), between XM
                  SATELLITE RADIO INC. ("CUSTOMER") and BOEING SATELLITE SYSTEMS
                  INTERNATIONAL, INC. ("CONTRACTOR")


Ladies and Gentlemen:

This Request for Payment is delivered to XM pursuant to Article 5 (Payment) of
the XM Satellite Purchase Contract and constitutes Contractor's request for
payment in the amount of $_________ for Milestone Payment No. ________.
Very truly yours,

BOEING SATELLITE SYSTEMS  INTERNATIONAL, INC.
By:      _________________________________
Title:   _________________________________


                                      A-1

<Page>

                             ANNEX I TO ATTACHMENT A

                         FORM OF CONTRACTOR CERTIFICATE

REFERENCE: MILESTONE PAYMENT NO. _____


                                                                       [Date]

XM Satellite Radio Inc.
1500 Eckington Place, NE
Washington, DC 20002


ATTENTION: Treasurer

         RE:      Terms and Conditions of the Third Amended and Restated
                  Satellite Purchase Contract for In-orbit Delivery, dated as of
                  May 15, 2001 between XM SATELLITE RADIO INC. ("CUSTOMER") and
                  BOEING SATELLITE SYSTEMS INTERNATIONAL, INC. ("CONTRACTOR")
                  (as amended, supplemented or modified from time to time, the
                  "XM Satellite Purchase Contract")

Ladies and Gentlemen:

This Certificate is delivered to you pursuant to Article 5 (Payment) of the
Terms and Conditions of the XM Satellite Purchase Contract. Each capitalized
term used herein and not otherwise defined shall have the meaning assigned
thereto in the Terms and Conditions of the XM Satellite Purchase Contract.

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

1.       The XM Satellite Purchase 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 XM Satellite
         Purchase Contract or any other modification or amendment to the XM
         Satellite Purchase 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 reasonably be expected to
         cause the date of Final Acceptance of any Deliverable Item under the XM
         Satellite Purchase Contract to occur later than the Delivery Date
         therefor.

                                     A-I-1

<Page>

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 XM Satellite Purchase 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 Contractor
         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 may be defined in the
         Financing Agreements) on the Project (as may be defined in the
         Financing Agreements), the Collateral (as may be defined in the
         Financing Agreements) or on any other property in respect of the Work
         which has or will be performed under the Satellite Purchase Contract.

5.       a.       The amount contained in the Request for Payment delivered to
                  you concurrently herewith in accordance with the terms of
                  Article 5 (Payment) of the Terms and Conditions of the XM
                  Satellite Purchase 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 XM Satellite Purchase
                  Contract.
         c.       The Milestone to which Milestone Payment No. ____ relates has
                  been completed in accordance with the XM Satellite Purchase
                  Contract.

Very truly yours,
BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.
By:     _____________________________
Title:  _____________________________


                                     A-I-2

<Page>

                                  SCHEDULE I to

                             Annex I to Attachment A

LIST OF EXCEPTIONS:


AMENDMENTS TO XM SATELLITE PURCHASE CONTRACT:


EXCEPTIONS AFFECTING FINAL ACCEPTANCE DATE:


EXCEPTIONS AFFECTING CONTRACTOR'S PERFORMANCE:


                                      SI-1

<Page>

                                 SCHEDULE II to

                             Annex I to Attachment A

LIST OF DISPUTES:



                                     SII-1


<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

                                  ATTACHMENT B

                 KEY PERSONNEL AS OF EFFECTIVE DATE OF CONTRACT


[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

[***]                                              [***]

                                      B-1

<Page>

                                    SCHEDULES

                                       TO

                           THIRD AMENDED AND RESTATED

                           SATELLITE PURCHASE CONTRACT

                              FOR IN-ORBIT DELIVERY

                                 BY AND BETWEEN


                             XM SATELLITE RADIO INC.

                                       AND

                  BOEING SATELLITE SYSTEMS INTERNATIONAL, INC.


<Page>


                                  SCHEDULE 19.3

         Customer has no interest, direct or indirect, in any other entity.



<Page>

                                  SCHEDULE 19.4


         There are no actions, suits, proceedings or investigations pending or,
to the knowledge of Customer, threatened against Customer. There is, however, a
filing in Customer's Federal Communications Commission (FCC or Commission)
licensing docket which takes a position adverse to Customer.

         In re American Mobile Radio Corporation, Application for Authority to
         construct, Launch and Operate Two Satellites in the Satellite Digital
         Audio Radio Service, File No. 72-SAT-AMEND-97 et seq., Before the
         Federal Communications Commission.

         Application for Review, filed by Primosphere Limited Partnership
         (Primosphere) on November 17, 1997. This filing seeks review by the
         full Commission of the International Bureau's Order and Authorization
         released October 16, 1997 which: 1) authorized AMRC to launch and
         operate a satellite system in order to provide satellite digital audio
         radio service; and 2) denied Primosphere's petition to deny AMRC's
         application.

         Customer has no current intention to initiate any such action.

<Page>

                                  SCHEDULE 19.5


         There are no liens on Customer's material property and assets.


<Page>


                                  SCHEDULE 19.6


1997 UNAUDITED FINANCIAL STATEMENTS

SEE ATTACHED.


<Page>

                                  SCHEDULE 19.7


CERTAIN ACTIONS

SEE ATTACHED.


<Page>

                                  SCHEDULE 19.8

         UNDISCLOSED LIABILITIES

         THIRD AMENDED AND RESTATED SATELLITE PURCHASE CONTRACT FOR IN-ORBIT
DELIVERY BETWEEN XM SATELLITE RADIO INC. AND BOEING SATELLITE SYSTEMS
INTERNATIONAL, INC.




May 15, 2001

<Page>

[Logo of XM Satellite Radio Inc. Appears Here]

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

Exhibit A rev D

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


Spacecraft Performance Specifications

       Last Saved: January 13, 2001 1:05 PM

Document Number: XM-TBD-00001

                    DOCUMENT RELEASE APPROVALS

-------------------------------------------
Approved by                            Date

Derek de Bastos
Vice President,
XM Satellite Radio Inc.
-------------------------------------------
Approved by                            Date

Peter S. Lauenstein (Hughes Space and
Communications Company)

Program Manager: XM Spacecraft
-------------------------------------------

<Page>

***** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

                 [***** Pages 2-56 of Exhibit A]


<Page>

[XM SATELLITE RADIO LOGO]

                            XM Satellite Radio Inc.

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


         EXHIBIT B REV B

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


Statement of Work

      Last Saved: 15 January 2001

Document Number: XM-TBD-00002

                  DOCUMENT RELEASE APPROVALS

--------------------------------------------------------
                                            Date
Approved by

/s/ Derek de Bastos                          31 JAN 01

Derek de Bastos
Vice President, Space Segment
XM Satellite Radio Inc.
========================================================
Approved by                                 Date

/s/ Peter S. Lauenstein                       14 FEB 01

Peter S. Lauenstein (Hughes Space and
Communications Company)
Program Manager: XM Spacecraft
--------------------------------------------------------

<Page>

Revision Log

This log identifies those portions of this document that have been revised since
the original issue and the date of each revision.


<Table>
<Caption>
--------------------------------------------------------------------------------------------------------------------
  REV        AUTHORIZING            SUMMARY OF CHANGES TO PREVIOUS VERSION             DATE           APPROVAL
              DOCUMENT
--------------------------------------------------------------------------------------------------------------------
<S>          <C>             <C>                                                     <C>              <C>
   -                         Contract Version                                        3/13/1998
--------------------------------------------------------------------------------------------------------------------
   A                         Change AMRC to XM Satellite Radio Inc.                   7/14/99

                             Change signature approval block

                             Change Document number
--------------------------------------------------------------------------------------------------------------------
   B                         Change to incorporate completion of ground spare

                             Change to incorporate ground de-scope deleting
                             hardware

                             Change to reflect XM choice to have Telesat's
                             operate of the satellites

                             Change to incorporate approved CCN 020 for Dynamic
                             Spacecraft Simulator (DSS)

                             Change signature block on cover page
--------------------------------------------------------------------------------------------------------------------
</Table>

<Page>


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

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.


TABLE OF CONTENTS

<Table>
<S>                                                                                                              <C>
REVISION LOG......................................................................................................2


TABLE OF CONTENTS.................................................................................................3


TABLE OF FIGURES.................................................................................................11


TABLE OF TABLES..................................................................................................11


1  PURPOSE AND SCOPE.............................................................................................12


1.1  DOCUMENT ORGANIZATION.......................................................................................12


1.2  DEFINITION OF WORK TO BE PERFORMED..........................................................................12


1.3  APPLICABLE DOCUMENTS........................................................................................13


2  EQUIPMENT, DATA, AND SERVICES.................................................................................14


2.1  DELIVERABLE EQUIPMENT.......................................................................................14


    2.1.1    FLIGHT SPACECRAFT...................................................................................14


    2.1.2    [***]...............................................................................................14


    2.1.3    [***]...............................................................................................14


    2.1.4    SATELLITE CONTROL SOFTWARE [***]....................................................................15


    2.1.5    DELIVERY SCHEDULE...................................................................................15


2.2  TEST AND HANDLING EQUIPMENT.................................................................................15


2.3  SHIPPING AND STORAGE CONTAINERS.............................................................................15


2.4  DATA........................................................................................................16


2.5  SERVICES....................................................................................................16

</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   3 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<S>                                                                                                            <C>
    2.5.1    Launch Services.....................................................................................16


         2.5.1.1  Launch Operations Planning And Coordination....................................................16


         2.5.1.2  Launch Support Documentation...................................................................17


         2.5.1.3  Launch Site Operation Plan.....................................................................17


         2.5.1.4  Launch Site Operations.........................................................................17


         2.5.1.5  XM Launch Participation........................................................................18


    2.5.2    [***]...............................................................................................18


    2.5.3    COMPATIBILITY WITH THE [***]........................................................................18


    2.5.4    LEOP MISSION SERVICES...............................................................................18


    2.5.5    TRAINING............................................................................................18


    2.5.6    RESERVED............................................................................................20


    2.5.7    LAUNCH AND IN-ORBIT INSURANCE.......................................................................19


    2.5.8    MISSION SUPPORT SERVICES............................................................................19


2.6  DELIVERABLE DATA AND DOCUMENTATION..........................................................................19


2.7  VISIBILITY OF FAILURES/PROBLEMS ON OTHER PROGRAMS...........................................................20


3  QUALIFICATION, REVIEWS, AND ANALYSES..........................................................................21


3.1  EQUIPMENT QUALIFICATION.....................................................................................21


3.2  DESIGN REVIEWS..............................................................................................21


    3.2.1    SPACECRAFT PRELIMINARY DESIGN REVIEW (SPDR).........................................................21


    3.2.2    SPACECRAFT CRITICAL DESIGN REVIEW (SCDR)............................................................22


    3.2.3    CONDUCT OF DESIGN REVIEWS...........................................................................23

</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   4 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<S>                                                                                                            <C>
         3.2.3.1  Design review board............................................................................23


         3.2.3.2  Design Review Notification.....................................................................24


         3.2.3.3  Data package...................................................................................24


         3.2.3.4  Presentation materials.........................................................................24


         3.2.3.5  Minutes........................................................................................24


         3.2.3.6  Notification of Review Completion..............................................................24


    3.2.4    DESIGN REVIEWS BY SUBCONTRACTORS....................................................................25


3.3  OTHER REVIEWS...............................................................................................25


    3.3.1    UNIT ACCEPTANCE REVIEWS.............................................................................25


    3.3.2    SYSTEM TEST REVIEWS.................................................................................25


    3.3.3    SHIPMENT READINESS REVIEW (SRR).....................................................................26


    3.3.4    FLIGHT READINESS REVIEWS (FRR)/LAUNCH READINESS REVIEW (LRR)........................................26


    3.3.5    IN-ORBIT ACCEPTANCE TEST REVIEW (IOTR)..............................................................26


    3.3.6    MRR, TRR, AND TRB PARTICIPATION.....................................................................27


3.4  ANALYSES....................................................................................................27


    3.4.1    GENERAL DESIGN AND PERFORMANCE ANALYSES REQUIREMENTS................................................27


    3.4.2    [***] ANALYSIS......................................................................................27


    3.4.3    [***] ANALYSIS......................................................................................28


    3.4.4    [***] ANALYSIS......................................................................................28


    3.4.5    [***] ANALYSIS......................................................................................28


    3.4.6    [***] ANALYSIS......................................................................................28
</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   5 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<S>                                                                                                            <C>
    3.4.7    [***] ANALYSIS......................................................................................29


    3.4.8    [***] ANALYSIS......................................................................................30


    3.4.9    [***] ANALYSIS......................................................................................30


    3.4.10   [***] PERFORMANCE...................................................................................30


    3.4.11   [***] ANALYSES......................................................................................32


    3.4.12   ATTITUDE DETERMINATION AND CONTROL SUBSYSTEM ANALYSIS...............................................32


    3.4.13   [***] ANALYSES......................................................................................32


    3.4.14   [***] ANALYSIS......................................................................................32


    3.4.15   [***] ANALYSES......................................................................................34


    3.4.16   [***] ANALYSIS......................................................................................34


    3.4.17   [***] ANALYSIS......................................................................................34


4  PROGRAM MANAGEMENT REQUIREMENTS...............................................................................35


4.1  CONTRACTOR  MANAGEMENT ORGANIZATION.........................................................................35


4.2  PROGRAM CONTROL.............................................................................................35


4.3  CONFIGURATION CONTROL.......................................................................................35


4.4  XM MANAGEMENT ORGANIZATION..................................................................................35


4.5  XM/CONTRACTOR RELATIONS.....................................................................................36


4.6  MEETINGS....................................................................................................37


    4.6.1    CONTRACT KICKOFF MEETING............................................................................37


    4.6.2    INTERIM AND QUARTERLY PROGRESS MEETINGS.............................................................38


    4.6.3    SENIOR MANAGEMENT MEETINGS..........................................................................38
</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   6 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.


<Table>
<S>                                                                                                            <C>
    4.6.4    REVIEW MEETINGS.....................................................................................39


4.7  PROGRAM SCHEDULE NETWORKS...................................................................................39


4.8  PROGRAM MILESTONE PAYMENT STATUS............................................................................39


    4.8.1    SUBMITTED INVOICES..................................................................................39


    4.8.2    ANTICIPATED INVOICE SUBMITTALS......................................................................40


    4.8.3    MILESTONE PAYMENT STATUS GRAPHS.....................................................................40


    4.8.4    AUDITOR'S CERTIFICATION.............................................................................40


4.9  MANAGEMENT OF CONTRACT CHANGES..............................................................................40


    4.9.1    PRELIMINARY CHANGE ASSESSMENT.......................................................................41


    4.9.2    CONTRACT CHANGE NOTICE (CCN)........................................................................41


    4.9.3    REVIEW AND APPROVAL OF CONTRACT CHANGE NOTICE.......................................................42


    4.9.4    WAIVERS AND DEVIATIONS..............................................................................42


    4.9.5    REVIEW AND APPROVAL OF AN RDW.......................................................................43


5  PRODUCT ASSURANCE REQUIREMENTS................................................................................44


6  INFORMATION...................................................................................................45


6.1  ACCESS TO INFORMATION.......................................................................................45


6.2  RELEASE OF Command Radio Frequency and AdDress Code INFORMATION.............................................45


7  TRAINING AND OPERATION SUPPORT SERVICES.......................................................................46


7.1  VERIFICATION OF [***].......................................................................................46


7.2  TRAINING OF XM OPERATIONS PERSONNEL.........................................................................46


7.3  OPERATIONS SUPPORT SERVICES.................................................................................48

</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   7 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<S>                                                                                                            <C>
8  DATA AND DOCUMENTATION REQUIREMENTS...........................................................................47


8.1  LANGUAGE....................................................................................................47


8.2  UNITS AND DIMENSIONS........................................................................................47


8.3  NOMENCLATURE, ACRONYMS AND ABBREVIATIONS....................................................................47


8.4  DOCUMENT REFERENCE/IDENTIFICATION SYSTEM....................................................................48


8.5  CDRL ITEM DESCRIPTIONS......................................................................................48


    8.5.1    SPACECRAFT DELIVERY PLAN............................................................................48


    8.5.2    QUARTERLY PROGRAM PROGRESS REPORTS..................................................................48


    8.5.3    DESIGN REVIEW PACKAGE...............................................................................50


         8.5.3.1  Spacecraft preliminary design review data package..............................................50


         8.5.3.2  Critical design review data package............................................................52


    8.5.4    SPACECRAFT VALIDATION PLAN..........................................................................53


    8.5.5    OTHER TEST PLANS....................................................................................53


    8.5.6    SPACECRAFT STORAGE PLAN.............................................................................53


    8.5.7    SPACECRAFT SYSTEMS SUMMARY..........................................................................54


    8.5.8    [***]...............................................................................................54


    8.5.9    SPACECRAFT ASSEMBLY DRAWINGS AND CIRCUIT DIAGRAMS...................................................55


    8.5.10   FLIGHT SOFTWARE/FIRMWARE DOCUMENTATION..............................................................55


    8.5.11   [***]...............................................................................................56


         8.5.11.1   [***] contents...............................................................................56


         8.5.11.2   [***] contents...............................................................................57
</Table>

XM PROPRIETARY                         EXHIBIT B REV B                   8 0F 88

<Page>

***** Certain information on this page has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

<Table>
<S>                                                                                                            <C>
         8.5.11.3   Submission requirements......................................................................57


    8.5.12   SPACECRAFT OPERATIONS HANDBOOK......................................................................57


         8.5.12.1   [***]........................................................................................58


         8.5.12.2   [***]........................................................................................59


         8.5.12.3   [***]........................................................................................59


         8.5.12.4   [***]........................................................................................59


         8.5.12.5   [***]........................................................................................59


    8.5.13   SPACECRAFT [***]....................................................................................60


         8.5.13.1   [***]........................................................................................60


         8.5.13.2   [***]........................................................................................61


         8.5.13.3   Data Documentation and Delivery..............................................................62


    8.5.14   ANALYSIS............................................................................................62


8.6  DETAILED CDRL...............................................................................................63


    8.6.1    SUBMISSION CRITERIA DEFINITIONS:....................................................................63


         8.6.1.1  Approval.......................................................................................63


         8.6.1.2  Review.........................................................................................63


         8.6.1.3  Information....................................................................................63


APPENDIX 1 TO EXHIBIT B..........................................................................................64


1  DYNAMIC SPACECRAFT SIMULATOR (DSS)............................................................................65


2  DESIGN  REVIEWS...............................................................................................68


3  TEST REQUIREMENTS.............................................................................................69
</Table>

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<Page>

<Table>
<S>                                                                                                            <C>
4  DOCUMENTATION.................................................................................................70


5  TRAINING......................................................................................................71


6  WARRANTY......................................................................................................72


APPENDIX 2 TO EXHIBIT B..........................................................................................73


1  COMMUNICATIONS PAYLOAD SIMULATOR INTRODUCTION.................................................................74


2  GENERAL DESCRIPTION...........................................................................................75


3  CONSTRUCTION..................................................................................................76


4  SYSTEM VERIFICATION...........................................................................................77


5  WARRANTY......................................................................................................78


APPENDIX 3 TO EXHIBIT B..........................................................................................79


1  SCOPE 80


2  DELIVERABLE EQUIPMENT, SOFTWARE, AND SERVICES.................................................................81


2.1  Satellite Control Software and Ground Encryptors............................................................81


2.2  ALIGNMENT OF PRIMARY AND BACKUP FACILITIES..................................................................82


2.3  Test Equipment and Tools....................................................................................82


2.4  Reserved....................................................................................................86


2.5  Product Assurance Management................................................................................82


2.6  Test Program................................................................................................82


2.7  Customer furnished equipment and services...................................................................83


3  SCHEDULE......................................................................................................85


4  WARRANTY......................................................................................................86
</Table>

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<Table>
<S>                                                                                                              <C>
-------------------------------------------------------------------------------------------------------------------

 Table of Figures

              Figure 1: [***]....................................................................................74


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

Table of Tables

              Table 1: Meetings Conducted or Participated in by Contractor.......................................37


              Table 2 [***]................................................................................Attached


              Table 3: Satellite Control Software..........................................................Attached
</Table>


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1 PURPOSE AND SCOPE

1.1      DOCUMENT ORGANIZATION

              This Exhibit provides the Statement of Work (SOW) for the XM
              Spacecraft Contract. Sections 8.5 and 8.6 give the contract data
              and documentation requirements. Appendices 1, 2, and 3 describe
              various additional work which will be performed under this
              Contract.

1.2      DEFINITION OF WORK TO BE PERFORMED

              This Exhibit defines the work to be performed by the Contractor
              for the XM DARS Spacecraft program. This work includes deliverable
              equipment, hardware, services and documents. The Contractor shall
              complete this work in accordance with the Terms and Conditions of
              the Contract and the requirements specified herein.

              The Contractor shall be fully responsible for all tasks unless
              other wise stated. These tasks shall include the design,
              development, fabrication, and testing of two flight spacecraft.
              These spacecraft shall be designed, fabricated, and tested in
              accordance with the requirements given in Contract Exhibits A, C,
              D and E. The Contractor shall provide delivery of two spacecraft
              in-orbit, including transportation to the launch site, launch
              vehicle services (when launch vehicles are assigned to the
              program), launch support, Launch and Early Operations phase (LEOP)
              maneuvers and deployments, in-orbit test services, training on the
              operation of the satellites, and mission support services for
              the life of the satellites.

              The Contractor shall also procure long-lead items for a third
              spacecraft, and complete the third spacecraft and deliver it to
              storage as a ground spare, or launch it to replace a failed
              spacecraft.

              The Contractor shall provide documentation and data delivered in
              accordance with the Contract Data Requirements List (CDRL) given
              in section 8.6 DETAILED CDRL.

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              The Contractor shall design, manufacture, test, and deliver one
              Dynamic Spacecraft Simulator per Appendix 1 to this Exhibit.

              The Contractor shall design, manufacture, test and deliver one
              Communication Payload Simulator per Appendix 2 this Exhibit.

              The Contractor shall deliver, install and test of Spacecraft
              Control Software to the primary and back-up spacecraft control
              facilities and Ground Encryptors to the Customer's back-up
              spacecraft control facility per Appendix 3 to this Exhibit.

1.3      APPLICABLE DOCUMENTS

              The following documents shall be applicable to this Statement of
Work:

1.       Contract Instrument:       Terms and Conditions of the Contract.

2.       Exhibit A:        Spacecraft Performance Specifications

3.       Exhibit C:        Product Assurance Plan

4.       Exhibit D:        Test Plan Requirements

5.       Exhibit E:        Radiation Environment

6.       Exhibit F:        Long Lead Items

7.       Exhibit G:        Payment Plan and Termination Liability Amounts

8.       Launch vehicle Users manuals and Launch site safety rules

9.       ITU Regulation and reference documents


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2 EQUIPMENT, DATA, AND SERVICES

              The Contractor shall provide spacecraft equipment, related
              services, and data and documentation as specified in this section.

2.1      DELIVERABLE EQUIPMENT

2.1.1    FLIGHT SPACECRAFT

              The Contractor shall deliver two (2) flight Spacecraft meeting the
              performance requirements defined in Exhibit A, Spacecraft
              Performance Specifications. If ordered, an optional third
              spacecraft shall be furnished meeting the same performance
              requirements. The Spacecraft shall be designed, manufactured, and
              in-plant tested. Two of the Spacecraft, [***] shall be launched,
              in-orbit tested, and delivered to their respective Designated
              Orbital Positions, fully operational as defined in the Contract.
              The third (Spacecraft shall be delivered to storage.

2.1.2    DYNAMIC SPACECRAFT SIMULATOR:

              The Contractor shall deliver to the Customer's Primary Satellite
              Control Center at XM's satellite operator's, Telesat Canada
              (hereinafter referred to as "Telesat") facilities in Gloucester,
              Canada a Dynamic Spacecraft Simulator in accordance with Appendix
              1, which shall provide software simulation of the spacecraft
              operating in geostationary orbit.

2.1.3    PAYLOAD COMMUNICATIONS SIMULATOR

              The Contractor shall deliver to XM headquarters a Communications
              Payload Simulator in accordance with Appendix 2, which shall
              provide simulation of the communications channel performance.

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2.1.4    SATELLITE CONTROL SOFTWARE (PRIMARY AND BACKUP) AND GROUND ENCRYPTORS


              The Contractor shall deliver Satellite Control Software to the
              Customer's Primary Satellite Conrol Center facilitiy at Telesat
              and Backup Satellite Control Center at XM's Headquarters in
              accordance with Appendix 3. Each set of equipment shall provide
              for control of both XM satellites.

2.1.5    DELIVERY SCHEDULE


              The delivery schedule shall be as follows:

<Table>
<Caption>
-------------------------------------------------------------------------------------------------------------------

                           ITEM                                                      DELIVERY

-------------------------------------------------------------------------------------------------------------------
<S>                                                          <C>
[***]                                                        In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

[***]                                                        In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

Spare satellite (Option):                                    In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

Dynamic Spacecraft Simulator:                                In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

Communications Payload Simulator:                            In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

Satellite Control Software (Primary and Backup)              In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------

Ground Encryptors (Primary)                                  In accordance with the Contract Terms & Conditions
-------------------------------------------------------------------------------------------------------------------
</Table>

2.2      TEST AND HANDLING EQUIPMENT


              The Contractor shall provide for, in a timely manner, the
              necessary mechanical and electrical ground support equipment
              required for the assembly, handling and transportation, test, and
              launch. Test and handling equipment to be provided by the
              Contractor for the performance of work under the Contract is not
              deliverable.

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2.3      SHIPPING AND STORAGE CONTAINERS

              The Contractor shall make available, as necessary, shipping
              containers, which shall protect the spacecraft from damage during
              transportation. The Contractor shall make available, if necessary,
              storage containers which shall protect the spacecraft from damage
              during storage. Such shipping and storage containers shall remain
              the property of the Contractor.

2.4      DATA

              Documentation and data shall be delivered in accordance with the
              Contract Data Requirements List (CDRL) given in section 8.5 and
              8.6 herein.

2.5      SERVICES

2.5.1    LAUNCH SERVICES

              The Contractor shall acquire the designated launch vehicles and
              services that are fully compatible for the first two spacecraft
              ordered thatmeet all of the requirements of the Contract. These
              launch services shall include launch site operations planning and
              processing, planning, flight operations up to and including
              spacecraft separation from the Launch Vehicle and post flight
              operations. The Contractor shall transport these two (2)
              Spacecraft to the Designated Launch Site, and the transportation
              shall include loading, offloading, the use of suitable shipping
              containers, and transit insurance.

              The Contractor will contract directly with the Designated Launch
              Agency for Launch Support Services and will coordinate all matters
              relating to launch operations. XM shall be notified of and have
              access to all technical discussions and meetings with the
              Designated Launch Agency.

              The Contractor shall provide the services required for the launch
              of two spacecraft throughout the program.

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2.5.1.1  LAUNCH OPERATIONS PLANNING AND COORDINATION

              The Contractor shall provide technical support to all Designated
              Launch Agency coordination meetings as scheduled by the Designated
              Launch Agency, including all necessary supporting documentation
              and analyses, and attendance of qualified personnel at all
              meetings.

              Launch operations include launch site (range) operations, Launch
              Vehicle integration and flight operations.

2.5.1.2  LAUNCH SUPPORT DOCUMENTATION

              The Contractor shall provide all documentation required by the
              Designated Launch Agency to support launch site operations, flight
              operations, and safety certification, in accordance with the
              schedules specified by the Designated Launch Agency. The
              Contractor shall provide XM with copies of all technical
              documentation submitted to the Designated Launch Agency and
              provide copies of the technical documentation issued by the
              Designated Launch Agency

2.5.1.3  LAUNCH SITE OPERATION PLAN

              The Contractor shall provide a Launch Site Operations Plan
              detailing all activities required at the Designated Launch Site, a
              test procedure summary, and schedule. The launch site operations
              plan shall also provide a launch team organization/management
              chart that defines interfaces and responsibilities. This plan may
              include the facilities requirements summary.

2.5.1.4  LAUNCH SITE OPERATIONS

              The Contractor shall provide at the Designated Launch Site, the
              necessary personnel, support equipment and supplies, e.g.,
              propellants and spares, to assemble and check out the flight
              Spacecraft and establish its readiness for launch.

              The Contractor shall also provide transportation for all
              Contractor personnel and equipment to and from the Designated
              Launch Site, and accommodation and living expenses for the
              duration of the launch site operations

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              The Contractor shall provide the level of support required to
              perform integration operations in accordance with the standard
              Launch Vehicle activity schedule including multi-shift operations
              as required.

2.5.1.5  XM LAUNCH PARTICIPATION

              XM engineers may participate in the launch campaign and the
              Contractor shall make arrangements with the Designated Launch
              Agency for separate office accommodations and support for at least
              five (5) XM personnel.

              The Contractor shall arrange with the Designated Launch Agency for
              VIPs to attend the launch subject to the limitations of the
              Designated Launch Agency.

2.5.2    [***]

              The Contractor shall contract for the provision of [***] as needed
              to support the launch. The Contractor shall demonstrate the
              compatibility of the spacecraft design with this [***].

2.5.3    COMPATIBILITY WITH THE [***]

              The Contractor shall specify, with input from XM, the [***]

2.5.4    LEOP MISSION SERVICES

              The Contractor shall perform the Launch and Early Operations phase
              (LEOP) maneuvers, deployment of each satellite at its operating
              orbit location, and the in-orbit acceptance test (IOT). [***]

              The Contractor shall provide a qualified team and facilities for
              the conduct of LEOP services.

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2.5.5    TRAINING


              The Contractor shall verify the [***], provide XM and Telesat with
              training for operation of the XM satellites in geosynchronous
              orbit. The Contractor shall be responsible for all the necessary
              training activities and related operating procedures. Training
              shall be provided for operations staff including engineers and
              controllers, and shall cover all systems, documentation, and
              procedures. Training shall include Operational Qualification of
              engineers and controllers to perform daily operations and anomaly
              investigation.

2.5.6    RESERVED

2.5.7    LAUNCH AND IN-ORBIT INSURANCE


              All the necessary launch and in-orbit insurance services shall be
              procured by XM and shall cover Contractor's operation of the
              satellites. The scope of the Contractor effort in this regard
              shall be limited to providing the insurance agency with the
              support documentation required by the insurer, if any, and support
              for meetings with the insurers.

2.5.8    MISSION SUPPORT SERVICES

              Beginning with Handover of the last XM spacecraft and continuing
              for a period of at least 15 years, the Contractor shall provide
              on-call support to answer questions from XM's satellite operator,
              Telesat Canada, regarding the performance of any of the XM
              spacecraft, providing that these questions do not require
              extensive analysis. The Customer through its satellite operator,
              Telesat shall provide [***] for the Contractor to respond to these
              questions. If

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              responding to the Customer's or Telesat's questions would require
              extensive analysis, the Contractor shall provide an estimate of
              the extent of effort required, and the Customer shall either
              agree to pay for this additional analysis or shall withdraw the
              question.

2.6      DELIVERABLE DATA AND DOCUMENTATION

              XM shall have access as needed to all non-financial data,
              documentation, and information related to the Contract that is
              generated under this Contract by the Contractor and Subcontractors
              consistent with U.S. Government regulations. Certain specific
              items of information shall be produced and formally submitted to
              XM or to Telesat by the Contractor as specified in the CDRL and
              data item descriptions given in Section 8.5 and 8.6 herein.

2.7      VISIBILITY OF FAILURES/PROBLEMS ON OTHER PROGRAMS

              The Contractor shall provide XM with immediate and full visibility
              of all technical/programmatic aspects of failures and problems
              occurring at component (piece part), unit, subsystem, or system
              level on other programs, on ground or in orbit, that are relevant
              to the XM spacecraft, and of associated corrective actions. XM
              shall keep such information strictly confidential. The identities
              of other Customer programs do not need to be revealed to XM,
              either directly or by inference, except with the express
              permission of the respective Customers.


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3 QUALIFICATION, REVIEWS, AND ANALYSES

3.1      EQUIPMENT QUALIFICATION

              Prior to spacecraft delivery for launch, all flight equipment
              shall be fully qualified for all space flight environments to
              which it will be subjected as defined in Exhibits D and E.

3.2      DESIGN REVIEWS

              Preliminary Design Reviews (PDRs) and Critical Design Reviews
              (CDRs) shall be conducted at the spacecraft system level. Each
              design review shall be comprehensive, critical audit of the
              design. The design review program shall not only encompass a
              thorough review of new hardware designs and modified designs, but
              shall also take into account those existing qualified designs that
              will result in the achievement of the XM performance and
              environmental requirements.

              Without relieving the Contractor of its responsibilities for
              efforts under the Contract, the XM Project Manager will co-chair
              system level design reviews. The Contractor shall provide the
              logistics for these reviews, shall make the review presentations,
              and shall provide required documentation as described within the
              CDRL.

              The Contractor shall compile and maintain a uniform program
              listing of all action items. The status of these action items
              shall be tracked through closure.

3.2.1    SPACECRAFT PRELIMINARY DESIGN REVIEW (SPDR)

              The purpose of the SPDR is to allow XM and the Contractor to
              confirm the baseline concept, configuration, specifications, and
              preliminary design of spacecraft system. The design review package
              shall be submitted in accordance with the CDRL. XM shall have the
              right to approve the review including completion of the review,
              review meeting minutes, and Major Action Item responses.

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              The SPDR shall comprise a comprehensive review of the requirements
              for the spacecraft and their flowdown to the major subsystems,
              particularly the communications payload. Also to be covered, shall
              be the identification of new items to be developed or items to be
              modified in order to meet requirements of the Contract. A
              comparison of specified and expected performance for the
              communications payload (repeater and antennas) shall be reviewed.
              An analysis of [***] shall be presented. A [***] shall be
              reviewed.

              The Contractor shall review and present the requirements on the
              spacecraft control equipment (ground segment hardware and
              software) and shall describe the operations concept.

3.2.2    SPACECRAFT CRITICAL DESIGN REVIEW (SCDR)

              The purpose of the SCDR is to allow XM and the Contractor to
              confirm the adequacy of the spacecraft system design, system
              performance, and system test plans. XM shall have the right to
              approve the review including completion of the review, review
              meeting minutes, and Major Action Item responses.

              The SCDR shall comprise a comprehensive review of all new designs,
              and any major modified existing design. The spacecraft performance
              shall be reviewed to verify compliance with contractual design and
              performance requirements. Compliance data for existing designs
              presented at the SPDR shall not need to be presented at this
              review. Compliance shall include a presentation of predicted and
              measured performance compared to contractual requirements.
              [***] shall be documented.

              A preliminary version of the Mission Sequence of Events shall be
              presented at the review.

              Changes since SPDR and recommendations from product line problem
              review teams (if any) related to XM as well as the status of their
              implementation on XM spacecraft shall be presented.

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3.2.3    CONDUCT OF DESIGN REVIEWS

3.2.3.1  DESIGN REVIEW BOARD

              A qualified Contractor Program Systems Engineering Manager shall,
              along with the XM Program Manager, co-chair the Design Review
              Board. Board members designated by the two co-chairmen shall
              include representatives of Program Management, Systems
              Engineering, responsible engineering activities, Manufacturing,
              Product Assurance, XM representatives, and other technical
              specialists as required to provide a comprehensive appraisal of
              the spacecraft design. However, XM may elect not to provide
              representatives to the Design Review Boards.

              The Board shall make recommendations and ask questions. In
              addition, XM may submit recommendations and questions.

              When a review is scheduled, copies of the design review package
              shall be sent to each member of the review team who shall be
              responsible for:

              Studying the data package carefully prior to the design review
              meeting.

              Notifying the responsible engineer of major discrepancies or
              oversights discovered prior to the meeting.

              Attending the meeting fully prepared to discuss the assigned areas
              of responsibility.

              If required, submitting written recommendations for improving the
              design.

              All recommendations and questions shall be evaluated by the
              Contractor, and responses to all recommendations and questions
              submitted shall be provided. Responsibility for action items shall
              be assigned and a schedule for completion of such items shall be
              included in the design review report.

              Recommendations shall be converted into action items jointly by XM
              and the Contractor.

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3.2.3.2  DESIGN REVIEW NOTIFICATION

              Transmittal of data packages, including a detailed agenda, to XM
              and to the Design Review Board members shall constitute design
              review notification. The data packages and agenda shall be
              received at XM (ASPO and Headquarters), to Telesat for the ground
              segment, at least 10 full working days in advance of the scheduled
              review meeting.

3.2.3.3  DATA PACKAGE

              Data packages shall be prepared to support the design review
              presentations. The packages for the SPDR and the SCDR shall be
              structured to be stand-alone packages. However, detailed material
              (e.g., analyses provided as appendices) provided at the SPDR which
              has not changed at the SCDR need not be resubmitted. Detailed
              content shall comply with the requirements given the CDRL
              descriptions for SPDR and SCDR.

3.2.3.4  PRESENTATION MATERIALS

              Presentation materials used in the design reviews shall be
              distributed to the participants immediately before the start of
              each review. Presentation materials shall use updated data as
              applicable, but differences between the presentation and data
              packages shall be noted.

3.2.3.5  MINUTES

              Minutes shall include a list of attendees, Major Action items and
              other action items with and closure dates and assignments. Minutes
              shall be distributed to XM and all attendees within 5 working days
              after the meeting.

3.2.3.6  NOTIFICATION OF REVIEW COMPLETION

              A written response to design review recommendations and action
              items approved by the Design Review Chairman and the Program
              Manager shall constitute design review closeout. Each design
              review report shall be signed by the Design Review Board
              Co-Chairpersons and the Contractor Program Manager to signify
              concurrence

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              with Major Action Items. Action items that affect performance or
              testing of the hardware shall be closed out prior to the start of
              protoflight testing.

3.2.4    DESIGN REVIEWS BY SUBCONTRACTORS

              XM shall be invited to attend subcontractor design reviews for
              subcontracted equipment of a new and/or modified design. These
              subcontractor design reviews may be scheduled as a session of the
              system design review meetings at the Contractor's facilities or
              separately. This requirement shall not be imposed for existing
              design ("product line") equipment.

3.3      OTHER REVIEWS

              The Contractor shall conduct other reviews as outlined in this
              section. Notification of an upcoming review and all documentation
              pertinent to the review shall be submitted to XM at least 10
              working days prior to the review, unless provided otherwise in the
              Contract Terms and Conditions. Cognizant Contractor Engineering
              and management representatives shall attend review meetings. XM
              shall have the right to participate in all these reviews.

3.3.1    UNIT ACCEPTANCE REVIEWS

              The Contractor shall review the test data of all units prior to
              their being installed on the spacecraft. These unit reviews shall
              include failure report closures. Unit test data shall be made
              available for review by XM. However, such unit test data shall not
              be deliverable to XM. XM representatives shall have the right to
              participate in these reviews but may elect not to participate.

3.3.2    SYSTEM TEST REVIEWS

              Detailed test data reviews shall be held during the conduct of the
              system level test program, with participation by System Test,
              System Engineering, and XM representatives. The purpose of these
              reviews shall be to assure test data validity in a near real-time
              manner. There shall be pre-test and post-test reviews for each of
              the following test phases: [***]

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              [***]

              The pre-test reviews shall be held prior to each major test phase.
              These reviews shall verify test readiness.

              The post-test phase reviews shall be held immediately at the
              completion of each major test These reviews, conducted by Systems
              Engineering and Systems Test, will include a brief data overview,
              an anomaly list including cause and corrective action status, and
              open issues, if appropriate. The test phase review shall serve to
              assure that the appropriate [***] has been completed and that
              spacecraft status is understood prior to leaving a test facility
              or major configuration.

3.3.3    SHIPMENT READINESS REVIEW (SRR)

              This review shall be conducted at the completion of spacecraft
              ground acceptance testing and shall cover hardware status, test
              data, deviations, and waivers to performance specifications, and
              status of all other CDRL items. The review shall also include
              mission operation readiness and launch campaign planning.

3.3.4    FLIGHT READINESS REVIEWS (FRR)/LAUNCH READINESS REVIEW (LRR)

              The Contractor, upon completion of launch site functional testing
              shall conduct a satellite flight readiness review at the launch
              site. The review shall cover the flight readiness of all
              spacecraft subsystems and launch mission plans, and the launch
              agency readiness.

              A mission facilities readiness review shall be conducted at the
              Contractor plant. It shall address the readiness of the satellite
              mission control equipment, including the [***].

              The Contractor shall support any required Launch Readiness Review
              in order to demonstrate that the spacecraft meets launch vehicle
              Contractor requirements for launch.


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3.3.5    IN-ORBIT ACCEPTANCE TEST REVIEW (IOTR)

              At the completion of the spacecraft in-orbit testing, a spacecraft
              acceptance review shall be conducted by the Contractor where
              hardware status, in-orbit test data, anomalies, and comparison
              with predicted performance shall be formally presented for
              transfer of ownership of the spacecraft to XM.

3.3.6    MRR, TRR, AND TRB PARTICIPATION

              XM shall have the right to participate to all the Manufacturing
              Readiness Review (MRR), Test Readiness Review (TRR), and Test
              Review Board (TRB) organized for B, C, D, and E category equipment
              (as defined in Exhibit D) per Exhibit C.

3.4      ANALYSES

              The Contractor shall perform any analyses deemed necessary to
              demonstrate compliance with Contract requirements or to
              substantiate the integrity of the spacecraft delivered under this
              Contract. All analyses shall be consistent with requirements of
              other applicable Contract exhibits.

              The Contractor may use, where relevant, results of valid and
              applicable analyses already performed for similar spacecraft or
              equipment and properly updated for this Contract. The Contractor's
              existing valid, and applicable computer/mathematical models and
              analytical/design tools used for similar spacecraft or equipment
              may also be used to perform the analyses defined herein.

3.4.1    GENERAL DESIGN AND PERFORMANCE ANALYSES REQUIREMENTS

              The Contractor shall perform all design, analytical test, and
              other efforts necessary to demonstrate that the spacecraft
              complies with the requirements of Exhibit A; that physical
              parameters are properly understood, managed, and accounted for;
              and that the spacecraft design is technically sound taking into
              account all earth and space flight environments to which the
              spacecraft or any of its component elements potentially can be
              exposed. These efforts shall consider all relevant functional,
              performance, interface, and environmental requirements, as well as
              interactions between the analyses and the test verifications of
              Exhibit D shall be taken into

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              account. The format and submittal of analyses and studies shall
              be in accordance with the CDRL.

3.4.2    [***] ANALYSIS

              The Contractor shall perform a [***] analysis which shall include
              a detailed listing of the [***] and included in the Mission
              Analysis.

3.4.3    [***] ANALYSIS


              A [***] analysis shall be performed and shall consider all
              critical phases of spacecraft life including, at least, [***].
              The analysis shall also address [***].

3.4.4    [***] ANALYSIS


              An analysis shall be performed for the various [***]. This
              analysis shall include the [***]. The analysis shall address
              the [***] shall be performed.

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3.4.5    [***] ANALYSIS

              The Contractor shall perform [***] analysis, taking into account
              [***]. Analyses shall be based on [***].

3.4.6    [***] ANALYSIS

              The Contractor shall analyze the [***] of the spacecraft for all
              phases of the mission. The analysis shall be based on each
              required launch vehicle's performance [***], and shall take into
              account all significant factors.

              The Contractor shall provide details of the [***] shall be
              provided.

3.4.7    [***] ANALYSIS

              A [***] analysis shall be provided which shall [***]. The [***]
              analysis shall take into account variables available to the
              Contractor and shall include the [***].

              The analysis shall also include but not be limited to:

              [***]

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              [***]

              Based on the [***] analyses, the Contractor shall provide the
              [***].

3.4.8    [***] ANALYSIS

              The Contractor shall demonstrate by analysis that the [***].

3.4.9    [***] ANALYSIS

              An analysis shall be performed which shall demonstrate that the
              spacecraft design:

              [***]

3.4.10    [***] PERFORMANCE

              The Contractor shall analyze the performance of the [***]

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[***]

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[***]

3.4.11    [***] ANALYSES

              The Contractor shall perform all analyses necessary to verify that
              [***].

3.4.12    [***] ANALYSIS


              An analysis and simulation of [***] shall be performed. This
              analysis shall demonstrate that the [***]. The analysis shall
              identify all [***] analysis shall be performed to show that the
              [***] during all phases of the mission.

3.4.13    [***] ANALYSES


              A complete and comprehensive [***] analysis shall be performed
              in which all [***]

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              [***]

              The Contractor shall provide to the launch agency [***] with
              supporting documentation as needed for [***].

3.4.14    [***] ANALYSIS

              Analyses of the [***], are investigated. All [***] used in these
              analyses shall be [***] unless otherwise agreed to by XM. [***]

              The following shall be included in the [***] analyses:

              [***]

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              [***]

3.4.15    [***] ASSEMBLIES ANALYSES

              All [***] shall be analyzed. Analyses shall include:

              [***]

3.4.16   [***] ANALYSIS


              The Contractor shall perform an [***] analysis.

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3.4.17   [***] ANALYSIS


              The Contractor shall perform an analysis of [***] modes.


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4 PROGRAMMING MANAGEMENT REQUIREMENTS

4.1      CONTRACTOR MANAGEMENT ORGANIZATION

              The Contractor shall ensure that the personnel and facilities
              necessary for the performance of the Contract are assigned and
              made available at the time and places necessary to meet the
              performance and schedule established by this Contract.

4.2      PROGRAM CONTROL

              The Contractor shall establish and apply a program control system
              that provides for monitoring of all program activities and clearly
              identifies all milestones, completion and delivery dates, design
              reviews, and critical paths. This system shall cover the total
              period from the Effective Date of Contract (EDC) to the completion
              of the PFM/FM2 in orbit test activities.

4.3      CONFIGURATION CONTROL

               The configuration control plan shall be provided

4.4      XM MANAGEMENT ORGANIZATION

              The XM Spacecraft Program Office (ASPO), will be the primary
              technical point of contact between the Contractor and XM for
              technical management of this Contract. Telesat will be the primary
              point of contact for operation of the satellites.

              XM shall designate a Spacecraft Program Manager who will be
              responsible for ensuring that all technical and programmatic
              requirements of the spacecraft program are satisfied and will have
              the authority (and may delegate authority) to approve for XM on
              Design Review Boards on which XM is a member and on technical and
              related programmatic documentation matters.

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              An XM Contracts Officer will be identified who is responsible for
              conducting Contract negotiations, Contract administration, and all
              modifications to the spacecraft program (including waivers,
              deviations, and Contract Change Notices).

4.5      XM/CONTRACTOR RELATIONS

              At Contract award, the Contractor shall obtain promptly the
              government approvals required to provide access to XM personnel to
              non-financial information relating to the Contract. This access
              shall be consistent with United States Government regulations
              governing access to technical data. In addition to formal contact
              and communication between XM and the Contractor, the Contractor's
              Program Management Office (CPMO) shall arrange for cooperative,
              open, and unimpeded informal contact and communication between
              ASPO personnel and their counterparts in the Contractor's
              organization. Technical facilities, data, and information used by
              the Contractor for the program shall be open to inspection and
              evaluation by XM representatives at all reasonable times and
              subject to the regulations noted above. XM shall have access by
              use of permanent badges to all involved facilities and all work in
              process and to technical and status reviews. The Contractor shall
              provide XM with immediate and full visibility of all
              technical/programmatic aspects of failures and problems occurring
              at component (piece part), unit, subsystem, or system level and of
              associated corrective actions. All relevant system level test data
              shall be available for XM to review at any time after the data is
              taken.

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4.6      MEETINGS

<Table>
<Caption>
                                  TABLE 1: MEETINGS CONDUCTED OR PARTICIPATED IN BY CONTRACTOR

              ------------------------------------------------------------------------------------------------------
                               MEETING                         DATE OR FREQUENCY                    PLACE
              ------------------------------------------------------------------------------------------------------
<S>                                                      <C>                              <C>
                Contract Kickoff Meeting                           [***]                  Contractor's facility
              ------------------------------------------------------------------------------------------------------
                Interim Progress Meeting                           [***]                  Contractor's facility
              ------------------------------------------------------------------------------------------------------
                Quarterly Progress Meeting                         [***]                  Contractor's facility
              ------------------------------------------------------------------------------------------------------
                Senior Management Meetings                         [***]                  Contractor's facility
              ------------------------------------------------------------------------------------------------------
                Progress Meeting with  Major                       [***]                  SubContractor facilities
                SubContractors (for new and
                modified design equipment)
              ------------------------------------------------------------------------------------------------------
                Unit Acceptance Reviews                            [***]                  Contractor's/
                                                                                          subContractors
                                                                                          facilities as appropriate
              ------------------------------------------------------------------------------------------------------
                Design Review Meetings                             [***]                  Contractor's/
                                                                                          subContractors
                                                                                          facilities as appropriate
              ------------------------------------------------------------------------------------------------------
                Shipment Readiness Review                          [***]                  Contractor's facility
              ------------------------------------------------------------------------------------------------------
                Flight Readiness Review                            [***]                  Launch site
              ------------------------------------------------------------------------------------------------------
                Launch and Mission                                 [***]                  As appropriate
                Readiness Review
              ------------------------------------------------------------------------------------------------------
                Meetings with launch                               [***]                  As appropriate
                services agency
              ------------------------------------------------------------------------------------------------------
                Opportunity Meetings                               [***]                  As appropriate
              ------------------------------------------------------------------------------------------------------
                In-orbit Acceptance                                [***]                  Contractor facility
                Test Review
              ------------------------------------------------------------------------------------------------------
</Table>

4.6.1    CONTRACT KICKOFF MEETING


              Within [***] after the effective Date of Contract, the
              Contractor shall conduct a contract kickoff meeting. The purpose
              of this meeting is to confirm the spacecraft technical definition
              and configuration and program requirements subsequent to contract
              negotiations. An additional purpose is to discuss and define the
              details of implementing cooperative working procedures and
              arrangements between ASPO and the Contractor. The topics shall
              include the following:

              1.   Formal communication requirements and formats;

              2.   Contractor's organizational charts with specific names of
                   all key individuals;

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              3.   Arrangements for ASPO access to facilities, documentation,
                   work in progress, and informal, technical discussions;

              4.   The Contractor team organization

              5.   System/subsystem-level budgets reflecting the performance
                   commitments and predictions provided by the Contractor prior
                   to contract award and demonstrating the ability of the
                   proposed design to meet all Exhibit A performance
                   requirements; and

              6.   System and subsystem-level schedules.

4.6.2    INTERIM AND QUARTERLY PROGRESS MEETINGS

              The Contractor shall organize and conduct, under the chairmanship
              of a Program Management Office (PMO) member, regular technical and
              program meetings at which XM representatives (and Telesat, as
              necessary) will participate. The purpose of these meetings shall
              be to review overall program status, schedules, planning, major
              technical problem areas, and any contractual/financial issues and
              any proposed Contract changes, and to discuss and mutually agree
              upon appropriate courses of action for maintaining the integrity
              of the program. The Interim progress meetings shall normally be
              less formal than the Quarterly progress meetings.

4.6.3    SENIOR MANAGEMENT MEETINGS

              Senior Management Meetings shall be conducted at [***]
              intervals between the Contractor and XM senior management to
              discuss the Contractor's progress and related matters. The venue
              of these meetings shall normally be the Contractor's facilities.

              The ASPO Program Manager and the PMO Program Manager may jointly
              prepare the presentation for this meeting based on the agenda
              identified by the senior management staffs of both organizations.

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4.6.4    REVIEW MEETINGS

              The Contractor shall conduct reviews as specified in Section 3 of
              this Exhibit. The Contractor shall be responsible for the reviews.

              The PMO shall be responsible for ensuring the timely completion of
              Action Items and for tracking and reporting their status. A review
              shall be considered CONDUCTED when the review chairperson issued
              the minutes and XM has reviewed the minutes. At the conclusion of
              the review, a set of Major Action Items will be mutually agreed
              to. A review shall not be considered COMPLETED until after all
              Major Action Items taken at the review meeting have been closed
              and the Notification of Review Completion has been approved by XM.
              Design Review Action Items may be closed to later phase actions
              and/or plans (e.g. during test) at the mutual agreement of the
              Contractor and Customer. Review Minutes, Action Item Responses,
              and Notification of Review of Completion submittals shall be in
              accordance with the CDRL.

4.7      PROGRAM SCHEDULE NETWORKS

              The Contractor shall conduct program schedule monitoring and
              analysis in accordance with the Contractor's standard practices
              and procedures. The Contractor shall provide XM with program
              activity networks and schedule charts from those schedule
              activities to assist in the forecasting of and preparation for
              critical program events (reviews and quarterly program meetings),
              as well as for progress evaluation.

4.8      PROGRAM MILESTONE PAYMENT STATUS

              The Contractor shall monitor and present to XM in the Quarterly
              Progress Reports, tables and graphs of the actual and anticipated
              invoice submittals of contract payment milestones as described
              below:

4.8.1    SUBMITTED INVOICES

              1.   Milestone identification number

              2.   Milestone description

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              3.   Value

              4.   Amount approved

              5.   Invoice date

4.8.2    ANTICIPATED INVOICE SUBMITTALS

              The Contractor shall present a table of anticipated milestone
              invoice submittals for a period of one year from the month of
              issue of the table. The table shall contain at least the following
              columns:

              1.   Milestone identification number;

              2.   Milestone description;

              3.   Value;

              4.   Anticipated (realistic) invoice date as shown on current
                   program schedule.

4.8.3    MILESTONE PAYMENT STATUS GRAPHS

              The Contractor shall present a graph of cumulative milestone
              values over the entire program duration, indicating the Milestone
              Payment Plan amounts, and the cumulative amounts approved to
              dates.

4.8.4    AUDITOR'S CERTIFICATION

              The Contractor shall have its CFO certify to XM annually that no
              improper payment has been made to any XM official in connection
              with this Contract. Social functions and providing key XM
              officials with a desktop mock-up of the XM spacecraft shall be
              considered an acceptable courtesy.

4.9      MANAGEMENT OF CONTRACT CHANGES

              The Contractor shall establish and maintain a system for managing
              the following types of changes to the XM Contract:

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              1.   Change to Technical Requirements

              2.   Change to the Scope of Work (additions or deletions); and

              3.   Change to the Delivery Requirements (schedule).

4.9.1    PRELIMINARY CHANGE ASSESSMENT

              As an answer to an XM draft change request, prior to formal
              request for change, the Contractor shall provide to XM a
              preliminary change assessment, which includes the following:

              1.   A brief description of the change;

              2.   rough order of magnitude (ROM) of the cost impact of the
                   change;

              3.   estimated schedule impact; and

              4.   other special programmatic considerations, including time
                   required for a response. XM will evaluate the preliminary
                   change assessment and advise the Contractor whether to
                   proceed with a detailed proposal.

4.9.2    CONTRACT CHANGE NOTICE (CCN)

              Any contract change raised by the Contractor, either on its own
              initiative or at XM's request, shall be submitted to XM for
              approval in a timely manner in accordance with the Contract. A
              Contract Change Notice form shall be used which shall include the
              following information:

              1.   A unique reference number;

              2.   Date of submittal;

              3.   Identification of organization requesting the change, as
                   well as description and justification for the change;

              4.   A detailed description of the envisaged tasks in the form of
                   a brief statement of work;

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              5.   A statement of schedule impact;

              6.   Price breakdown in a mutually acceptable format;

              7.   Suggested contract language revisions as applicable; and

              8.   Proposed implementation date.

4.9.3    REVIEW AND APPROVAL OF CONTRACT CHANGE NOTICE

              XM will notify the Contractor of its acceptance or rejection of a
              CCN in accordance with the Contact Terms and Conditions. Whenever
              the proposed CCN implementation date is deemed critical, XM shall
              be so notified, and a specific early response date requested of XM
              by the Contractor.

              If the Contractor implements a change prior to obtaining XM
              approval, this shall be at the Contractor's own risk.

4.9.4    WAIVERS AND DEVIATIONS

              If, during the execution of the Contract, the Contractor desires
              to depart from the requirements in the Contract for a specific
              item or a limited number of items, a Request for Deviation/Waiver
              (RDW) shall be submitted. Such requests shall comply with the
              definition of Deviations and Waivers specified herein below.

              An RDW shall contain at least the information defined as follows:

              1.   A unique RDW reference number

              2.   Title or subject of RDW

              3.   Affected equipment item name

              4.   Affected equipment item part number

              5.   Affected requirement at all levels under Contractor
                   responsibility

              6.   Description of the waiver or deviation requested

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              7.   Purpose or justification for request

              8.   Date of issue; and

              9.   Schedule impact, if any.

              Waiver and deviation are defined in Exhibit C.

4.9.5    REVIEW AND APPROVAL OF AN RDW

              XM shall make its best efforts to notify the Contractor of its
              acceptance or rejection of the RDW within ten (10) working days of
              its receipt. If the reason for its rejection is lack of adequate
              supporting documentation (or other evidence), the Contractor will
              be informed within ten (10) days of receipt.


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5    PRODUCT ASSURANCE REQUIREMENTS

              The Contractor shall establish and implement a Product Assurance
              Program in accordance with the requirements defined in Exhibit C.










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6      INFORMATION

6.1      ACCESS TO INFORMATION

              XM shall have access, consistent with United States Government
              regulations and individually signed Protection of Proprietary
              Rights agreements, to any information generated on the program or
              other technical data needed to resolve technical issues associated
              with the program. Implementation of such access may be through
              meetings, technical documents or through other methods by mutual
              agreement.

6.2      RELEASE OF COMMAND RADIO FREQUENCY AND ADDRESS CODE INFORMATION

              The Contractor shall consider and treat all assigned command radio
              frequencies and command address codes used for the spacecraft
              under this Contract and all on-orbit performance date as
              proprietary to XM. All such proprietary information shall not be
              released to third parties without XM's prior approval in
              accordance with the Contract Terms and Conditions.

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7      TRAINING AND OPERATION SUPPORT SERVICES

7.1      VERIFICATION OF [***]

              The Contractor shall support a test, not to exceed [***], to
              verify [***] and the spacecraft during the Integrated System
              Test of the first flight spacecraft.

7.2      TRAINING OF XM OPERATIONS PERSONNEL

              The Contractor shall prepare and present a comprehensive training
              course for XM and Telesat satellite operations staff.

              The first part of the course shall cover [***]. This part shall be
              conducted at Contractor's facility.

              The second part of the course shall consist of a [***] prior to
              the launch of the first spacecraft, but may instead be combined
              in part or in whole with the [***] training described in
              Appendix 1. Each day of the course shall consist of two
              three-hour sessions. This part of the course shall be given at
              the Telesat's facility, and shall utilize subsystem specialists
              as instructors. Reasonable questions not answered during the
              course shall be responded to within one week in writing.

              The training material shall be submitted to XM and Telesat as
              noted in the CDRL list.

              Each training session shall be video taped, and one copy of the
              videos shall be presented at the conclusion of training.

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7.3      RESERVED

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8      DATA AND DOCUMENTATION REQUIREMENTS

              The specific items of information which shall be produced and
              formally submitted to XM by the Contractor are specified herein.

8.1      LANGUAGE

              All deliverable documentation shall be written in the English
              language.

8.2      UNITS AND DIMENSIONS

              Unless otherwise specified, the international system (SI) of units
              and dimensions shall be used in deliverable program documentation,
              however, if the Contractor desires, documentation may contain dual
              units in the format SI (English). SI units shall be used for
              deliverable spacecraft level and unit top assembly level,
              documents and drawings except as follows:

              1.   American Standard fasteners may be used;

              2.   Launch vehicle interface information will be as defined by
                   the launch vehicle supplier; and

              3.   Drawings for existing units or components for which the
                   existing drawings are in English units.

              4.   Existing analyses and documents

8.3      NOMENCLATURE, ACRONYMS AND ABBREVIATIONS

              The nomenclature and terminology used to define all hardware,
              software, and data items shall be consistent throughout the
              program. The Contractor shall provide a list of acronyms and
              abbreviations used in the program documentation, along with their
              meanings.

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8.4      DOCUMENT REFERENCE/IDENTIFICATION SYSTEM

              All contract deliverable documents submitted to XM shall contain
              in the headings at least the following:

              1.   Date of issue;

              2.   Subject of document;

              3.   Author or issuing authority;

              4.   Program unique reference identifier and other identifier;
                   and

              5.   Contract Documentation Requirements List (CDRL) item number.

8.5      CDRL ITEM DESCRIPTIONS

              The requirements for those CDRL items, which have specific
              requirements for their contents, are described below. Documents
              not described below may be provided in accordance with the
              Contractor's standard contents and formats.

8.5.1    SPACECRAFT DELIVERY PLAN

              The general Spacecraft Delivery Plan shall be applicable to the
              selected launch vehicles. This plan shall define the activities
              necessary to prepare the spacecraft and associated support
              equipment for shipment, the general logistical details of the
              shipment itself, the implementation of monitoring equipment to
              record the environment of the spacecraft and critical support
              equipment during shipment, and a general definition of any support
              required to be provided by the applicable launch vehicle
              Contractors once the spacecraft and associated equipment arrive at
              the launch site.

8.5.2    QUARTERLY PROGRAM PROGRESS REPORTS

              The Quarterly Program Progress Report is an executive summary of
              the program status showing accomplishments against progress plan
              milestones and highlighting significant events and problems in the
              schedule. This document shall provide the

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              minimum amount of material necessary for tracking the program and
              shall be provided in a form which highlights critical changes to
              the elements defined with in this section. A structure which
              minimizes the repetition of material from quarter-to-quarter
              shall be used.

              For the key system budgets (noted below) and the [***]
              achievable with each launch vehicle changes from the previous
              report shall be highlighted and documented, and an action plan for
              correcting any predicted specifications non-compliance shall be
              presented.

              The report shall contain at least the following:

              1.   A detailed status of critical performance or schedule issues
                   and of corrective actions undertaken.

              2.   General descriptions of progress accomplished during the
                   quarter at unit, subsystem, and spacecraft system level.

              3.   A description of progress accomplished during the quarter by
                   each major subContractor; and an updated list of all major
                   subContractors.

              4.   Schedule overview, in bar chart form, showing the dates of
                   the subsystem and system reviews and the dates of their
                   delivery and their evolution.

              5.   Summary descriptions of any significant changes to the
                   Contract in terms of design, performance, schedule or work
                   distribution requirements. This shall include a status
                   summary of Requests for Waiver/Deviation and Contract Change
                   Notices.

              6.   List of milestones reached during the quarter and to date,
                   and of milestones forecast to be completed for the next
                   period.

              7.   [***] Summary containing:

                   [***]

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                   [***]

              8.   [***] Budget containing:

                   [***]

                   [***]

              9.   [***] Summary for the duration of the nominal mission for
                   the selected launch vehicle. The estimated [***] shall also
                   be defined in each case.

              10.  A review of the Product Assurance program including a
                   summary of the past quarter's significant accomplishments,
                   problems, parts procurement shortages, failures and
                   solutions, program status, subContractor and supplier
                   status, trends, and statistics. Additionally, the plan for
                   the next quarter shall be summarized.

8.5.3    DESIGN REVIEW PACKAGE

              As a minimum, each review package shall include adequate pertinent
              information, supporting design and performance data and any
              analytical studies that fully describe the spacecraft various
              hardware subsystems and systems performance and capability for
              satisfying the performance requirements. All packages shall
              contain a [***] to the documentation within the package.

8.5.3.1  SPACECRAFT PRELIMINARY DESIGN REVIEW DATA PACKAGE

              As a minimum, the following topics/items shall be addressed in the
              Spacecraft Preliminary Design Review (SPDR) data package:

              1.   Agenda with date, time and location of the design review
                   meeting;

              2.   Program organization and management description;

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              3.   Program master schedule including identification of critical
                   path items, availability of facilities and resources, and
                   any potential problem areas;

              4.   Summary of [***];

              5.   [***];

              6.   The satellite design analysis including a summary
                   description of spacecraft and subsystems;

              7.   Performance predictions and statement of compliance to
                   contractual requirements;

                   a)   Satellite final specifications, including applicable
                        documents and the [***]

                   b)   Subsystem preliminary specifications

              8.   Summary of [***];

              9.   [***]

              10.  [***]

              11.  [***]

              12.  [***]

              13.  [***]

              14.  [***]

              15.  [***]; and

              16.  A preliminary release of analyses and of the reliability
                   evaluation.

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8.5.3.2  CRITICAL DESIGN REVIEW DATA PACKAGE

              As a minimum, the following data shall be provided in the Critical
              Design Review data package:

              1.   Agenda with date, time, and location of the design review
                   meeting;

              2.   Updates to Program organization and management description;

              3.   Final subsystem specifications

              4.   Program master schedule including identification of critical
                   path items, availability of facilities and resources, and
                   any potential problem areas;

              5.   Summary of [***]

              6.   Changes since PDR

              7.   Summary description of spacecraft and subsystems;

                   [***]

              8.   Update of Performance predictions and Statement of
                   Compliance.

              9.   Program Test Plan and supporting documentation;

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              10.  [***]

              11.  [***]

              12.  Systems safety and hazard considerations:

              13.  [***]

              14.  [***]; and

              15.  Updated releases of analyses and of the reliability
                   evaluation.

8.5.4    SPACECRAFT VALIDATION PLAN

              The Contractor shall conduct test activities as specified in
              Exhibit D to verify the compliance of the equipment with Exhibit
              A. This document shall be maintained to be consistent with any
              changes to Exhibits A and D made during the program.

8.5.5    OTHER TEST PLANS

              The Contractor shall develop the other test plans as listed in
              Table 2 Contract Data Requirements List. These other test plans
              include a [***], and a SCC Test Plan. These test plans shall
              describe the verification and testing activities to be performed
              on the hardware and software delivered in accordance with
              Appendix 1, 2, and 3 of this document.

8.5.6    SPACECRAFT STORAGE PLAN

              The Contractor shall develop a Spacecraft Storage Plan which shall
              describe the equipment and methods used to store the spacecraft,
              including descriptions of storage containers, facilities,
              provisions for environmental monitoring and control during
              storage, tasks to be performed before placing the spacecraft in
              storage, tasks performed periodically during the storage period,
              and tasks to be performed when removing a spacecraft from storage.

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              The Spacecraft Storage Plan shall cover all necessary tasks for a
              period of storage up to [***]. The Spacecraft Storage Plan
              shall clearly distinguish between tasks performed for short-term
              storage (less than [***]), and tasks performed for medium term
              storage. If testing of the spacecraft is required upon removal
              from storage, the appropriate tests shall be described.

8.5.7    SPACECRAFT SYSTEMS SUMMARY

              The main objective of this document is to provide a top-level
              understanding of the spacecraft design, performance, and operation
              to XM staff not routinely associated with the XM Spacecraft
              Program Office (ASPO), and not receiving the subsystem and system
              design review packages.

              The spacecraft system summary shall contain general descriptions
              of the spacecraft equipment and performance, overall configuration
              drawings, and functional diagrams of major assemblies and
              subsystems. Current versions of the [***] shall be presented.
              Each revision may be provided as a stand-alone document or a set
              of change pages, as mutually agreed between the Contractor and
              Customer.

8.5.8    [***]

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     56 OF 88

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              [***]

8.5.9    SPACECRAFT ASSEMBLY DRAWINGS AND CIRCUIT DIAGRAMS


              A Complete set of spacecraft level assembly drawings and
              electrical circuit diagrams (from top level down to subsystem
              level) shall be provided [***]. These documents shall be
              available for reference at CDR and updates shall be made
              available when released. Unit level drawings and schematics,
              shall be made available for Customer review subject to U.S.
              Government regulations.

              During the program, all released drawings for spacecraft produced
              under this Contract shall be available for XM review as soon as
              each drawing is released.

8.5.10    FLIGHT SOFTWARE/FIRMWARE DOCUMENTATION

              The Contractor's warranty of satisfactory in-orbit performance
              assumes that XM shall not modify the flight software.
              Documentation deliverables for XM specific software/flight
              firmware shall include the following:

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     57 OF 88

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              [***]

8.5.11   [***]

              The Contractor shall [***]. For each database, the Contractor
              shall create and maintain documentation providing detailed
              information on the structure and interpretation of the database.

8.5.11.1 [***] CONTENTS

              The [***] Database shall contain [***], and [***].

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     58 OF 88

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8.5.11.2 [***] CONTENTS

              The [***] databases shall contain [***]

8.5.11.3 SUBMISSION REQUIREMENTS

              The [***] databases shall be controlled by revision number and
              shall be maintained to accurately reflect the configuration of the
              spacecraft during testing and until shipment. XM shall be notified
              whenever the databases are revised.

              The [***] databases shall be released in a preliminary form at
              least [***]. Subsequently, the databases may be revised as
              necessary; however, XM shall be notified at each revision and
              copies shall be delivered electronically. The final revision
              effective for each spacecraft shall be delivered at the Shipment
              Readiness Review.

8.5.12    SPACECRAFT OPERATIONS HANDBOOK

              This document shall include the satellite operational procedures
              recommended by the Contractor for use by XM and/or Telesat in all
              modes of operation from end of in-orbit acceptance test until
              satellite end-of-life. This handbook shall be designed for
              inclusion of supplemental information relating to changes in
              satellite design and operation and shall include the following
              information:

XM PROPRIETARY                     EXHIBIT B REV B                     59 OF 88

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              [***]

              This data shall include, but shall not be limited to, the
              following:

8.5.12.1 [***]

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     60 OF 88

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              [***]

8.5.12.2 [***]

              [***]

8.5.12.3 [***]

              [***]

8.5.12.4 [***]

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     61 OF 88

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8.5.12.5 [***]

              [***]

8.5.13    SPACECRAFT [***]

              A complete set of [***] shall be provided to XM. [***] to be used
              as a reference by XM and/or spacecraft operations personnel.

              [***]

8.5.13.1 [***]

              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     62 OF 88

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              [***]











XM PROPRIETARY                     EXHIBIT B REV B                     63 OF 88

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8.5.13.2 [***]

              [***]

8.5.13.3 DATA DOCUMENTATION AND DELIVERY

              In general, unit data shall be provided to XM at least [***]
              before the spacecraft launch date. As a minimum, the following
              data shall be provided [***] before the launch date:

              [***]

              All other data shall be delivered to XM at least [***]
              prior to the launch of the spacecraft.

8.5.14   ANALYSIS

              Analyses reports shall include:

              1.   Statement of the objectives of the analysis and outline of
                   the methodology.

              2.   Definitions of all symbols used in equations and statement
                   of all assumed boundary conditions and values of
                   constraints.

XM PROPRIETARY                     EXHIBIT B REV B                     64 OF 88


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              3.   References, if appropriate, to reduce the amount of
                   explanatory texts, or indication of sources of common
                   equations, algorithms, etc.

              4.   Methodology and/or listing of computer analyses.

              5.   Sufficient information to allow XM to verify the adequacy
                   and accuracy of the analyses.

              The reports shall be updated when new information becomes
              available during the Contract period, and shall adequately
              describe any differences.

8.6      DETAILED CDRL

              The listing of data items to be submitted and their corresponding
              submittal requirements are given in Table 2 attached hereto.
              Submission requirements given in days after or before an event
              shall be defined at full working days. Submission requirements
              given in weeks or months shall be defined as calendar weeks or
              months. All submission dates refer to date of receipt at the
              specified destination. Electronic submissions shall not be
              considered acceptable unless they are submitted in a format which
              the Customer can access using commercial off-the-shelf software.

8.6.1    SUBMISSION CRITERIA DEFINITIONS:

8.6.1.1  APPROVAL

              Approval indicates that XM must provide a written indication that
              the submission is acceptable before any work which directly
              depends on the submission is begun. All deficiencies in the
              submission which are noted by XM must be resolved.

8.6.1.2  REVIEW

              Review indicates that XM has the opportunity to review and comment
              on the submission, and Customer's reasonable comments will be
              incorporated by the Contractor. Work may proceed in parallel to
              the review activity

8.6.1.3  INFORMATION

              Information indicates that the submission is provided to aid the
              Customer in understanding.

XM PROPRIETARY                     EXHIBIT B REV B                     65 OF 88

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APPENDIX 1 TO EXHIBIT B
[***] REQUIREMENTS

NOTE: REVISED PER APPROVED CCN 021

AND NEW CHANGES TO REFLECT DELIVERY TO TELESAT ARE ITALICIZED

XM PROPRIETARY                     EXHIBIT B REV B                     66 OF 88

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              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     67 OF 88

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              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     68 OF 88

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              [***]

XM PROPRIETARY                     EXHIBIT B REV B                     69 OF 88

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2      DESIGN REVIEWS

              The Contractor shall conduct [***] reviews of the Spacecraft
              Simulator. All [***] shall be held at the Contractor's facility.
              A Preliminary Design Review (PDR) a Critical Design Review (CDR),
              a Pre Shipment Review (PSR) shall be held before shipment of the
              simulator to Telesat

              The PDR shall cover [***]. The CDR shall cover [***]. The
              PSR shall cover [***].

XM PROPRIETARY                     EXHIBIT B REV B                     70 OF 88

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3      TEST REQUIREMENTS

              Tests of the [***] shall be performed. [***]. The final
              acceptance test (FAT) shall consist of [***].

XM PROPRIETARY                     EXHIBIT B REV B                     71 OF 88

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4      DOCUMENTATION

              Simulator documentation shall be delivered in accordance with the
              CDRL. The following documentation shall be required:

                  1.   PDR and CDR data packages;

                  2.   PDR and CDR reports, including minutes and action items;

                  3.   simulator user's manual;

                  4.   monthly progress reports; and

                  5.   Final Acceptance Test results.

              The following data shall be supplied with the simulator:

                  [***]


XM PROPRIETARY                     EXHIBIT B REV B                     72 OF 88

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5      TRAINING

              The Contractor shall conduct a comprehensive training course to
              instruct up to ten (10) TELESAT STAFF in the operation of the
              simulator. The course shall be conducted at the TELESAT'S facility
              AFTER shipment of the simulator to TELESAT and shall combine
              classroom instruction with hands-on training. The student material
              for the training course shall include, but not be limited to, the
              simulator user's manual, and class handouts.

XM PROPRIETARY                     EXHIBIT B REV B                     73 OF 88

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6 WARRANTY

              The Contractor shall warranty for [***] the DSS except for the
              work station hardware, operating system software, and peripheral
              units. The warranty period shall start in accordance with the
              Terms and Conditions of the Contract.

              As a minimum, the warranty shall cover 1) analysis of simulator
              anomaly reports issued by XM and sent to the Contractor, 2)
              software corrections including modifications and tests , 3)
              updates of documentation and of the configuration item data list,
              and 4) generation and delivery of applicable new software
              releases.

              All commercially available elements of the work station including
              work station hardware, its operating system software/firmware, and
              peripheral unit hardware and software/firmware shall be covered by
              their manufactures' standard warranties which shall be extended by
              the Contractor until the units are accepted by and installed at
              TELESAT. The Contractor shall provide for the transfer of these
              manufacturers' warranties to XM.

              XM at its option, may continue those warranty coverages outside
              of the scope of the Contract.

XM PROPRIETARY                     EXHIBIT B REV B                     74 OF 88

<Page>

APPENDIX 2 TO EXHIBIT B
COMMUNICATIONS PAYLOAD SIMULATOR

XM PROPRIETARY                     EXHIBIT B REV B                     75 OF 88

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1 COMMUNICATIONS PAYLOAD SIMULATOR INTRODUCTION

              The Contractor shall provide a Communications Payload Simulator
              which is capable of providing a [***]

XM PROPRIETARY                     EXHIBIT B REV B                     76 OF 88

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2      GENERAL DESCRIPTION

              [***]


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3      CONSTRUCTION

              [***]


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4      SYSTEM VERIFICATION

              [***]


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5      WARRANTY

              The Contractor shall warranty for [***] the Communications
              Payload Simulator. The warranty period shall start in accordance
              with the Terms and Conditions of the Contract.

              All commercially available elements (e.g. workstations) of the
              simulator shall be covered by their manufactures' standard
              warranties which shall be extended by the Contractor until the
              units are accepted by and installed at XM. The Contractor shall
              provide for the transfer of these manufacturers' warranties to XM.

              XM at its option, may continue those warranty coverages outside
              of the scope of the Contract.


XM PROPRIETARY                     EXHIBIT B REV B                     80 OF 88

<Page>

APPENDIX 3 TO EXHIBIT B
STATEMENT OF WORK FOR THE PRIMARY AND BACKUP SATELLITE CONTROL SOFTWARE
AND GROUND ENCRYPTORS







XM PROPRIETARY                     EXHIBIT B REV B                     81 OF 88

<Page>

1 SCOPE

              This document defines the work to be performed by the Contractor
              for the Satellite Control Software for the Customer at the Primary
              Spacecraft Control Center at Telesat's facilities in Ottawa,
              Ontario, Canada (hereinafter referred to as "Primary") and the
              Back-up Spacecraft Control Center at the Customer's facilties in
              Washington D.C (hereinafter referred to as "Back-up"), and for
              Ground Encryptors at the Back-up facility. Such work shall include
              the provision of equipment, software, services and documents and
              execution of project management tasks. The Contractor shall
              complete this work in accordance with the terms of the Contract
              and the requirements specified herein.

              The Contractor shall be responsible for certain activities which
              are necessary to achieve a successful operation of the Customer's
              two satellites. These tasks shall include the design, development,
              procurement, fabrication, testing, documentation, delivery and
              installation of Satellite Control Software and Ground Encryptors.

              More specifically, Contractor shall perform the following
              activities, after the successful completion of factory acceptance
              testing:

               1.   Transportation of Ground Encryptors to the Backup satellite
                    control center.

               2.   Installation and integration of the supplied Software into
                    the Primary and Back-up facilties.

               3.   Coordination with Customer regarding facility requirements
                    and access.

               4.   Preparation of plans, procedures and reports.

               5.   Conduct the Site Acceptance Tests (SAT) and test reviews at
                    the Primary and Back-up facilities, as appropriate to the
                    deliverable item.


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2 DELIVERABLE EQUIPMENT, SOFTWARE, AND SERVICES

2.1      SATELLITE CONTROL SOFTWARE AND GROUND ENCRYPTORS

              The Contractor shall furnish the Customer [***]

XM PROPRIETARY                     EXHIBIT B REV B                     83 OF 88

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2.2      ALIGNMENT OF PRIMARY AND BACKUP FACILITIES

              The backup center shall be automatically aligned with the primary
              center with respect to [***].

2.3      TEST EQUIPMENT AND TOOLS

              The Contractor shall provide test equipment and tools, that are
              not provided by Customer, necessary to install and complete SAT.
              Such test equipment and tools shall remain the property of the
              Contractor.

2.4      RESERVED

2.5      PRODUCT ASSURANCE MANAGEMENT

              The Contractor shall perform product assurance in accordance with
              the Contractor's internal standards for commercial practices.

2.6      TEST PROGRAM

              The Satellite Control Software and Ground Encryptors shall be
              tested and the results reviewed in accordance with the program
              Ground System Test Plan.

              The acceptance tests of the Satellite Control Software and Ground
              Encryptors shall be conducted as described below:

              [***]

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              [***]

2.7      CUSTOMER FURNISHED EQUIPMENT AND SERVICES

              The Customer shall provide beneficial access to the Customer's
              Primary and Back-up satellite control centers for the purposes of
              installation and test of the Contractor-provided Satellite Control
              Software and Ground Encryptors. The Customer shall provide [***]

XM PROPRIETARY                     EXHIBIT B REV B                     85 OF 88

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              [***]




XM PROPRIETARY                     EXHIBIT B REV B                     86 OF 88

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3    SCHEDULE

              The Satellite Control Software and Ground Encryptors installation,
              and testing for both Primary and Backup Satellite Control Centers
              shall be performed in accordance with the Contract Terms and
              Conditions.



XM PROPRIETARY                     EXHIBIT B REV B                     87 OF 88

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4     WARRANTY

              The warranty with respect to the Ground Encryptors shall begin in
              accordance with the Terms and Conditions of the Contract and shall
              run for a period of [***] thereafter. At any time during this
              period the Contractor shall promptly correct noncompliant
              performance. Contractor shall also provide software maintenance
              for the life of the satellite to fix identified bugs. Site
              acceptance testing will be deemed complete when SATs have been
              performed, results have been reviewed in the Final Acceptance
              Review, a disposition plan developed and agreed to by the
              Purchaser for any remaining non-compliance's. Warranty service
              costs will be the responsibility of the Contractor.


XM PROPRIETARY                     EXHIBIT B REV B                     88 OF 88

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[Logo of XM Satellite Radio Inc. Appears Here]


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

Exhibit C Rev A

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

Product Assurance Plan

-------------------------------------------
Approved by                            Date

John R. Wormington
Vice President,
XM Satellite Radio Inc.
-------------------------------------------
Approved by                            Date

Peter S. Lauenstein (Hughes Space and
Communications Company)

Program Manager: XM Spacecraft
-------------------------------------------

<Page>

***** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

                 [*** Pages 2-81 of Exhibit C]


<Page>


[Logo of XM Satellite Radio Inc. Appears Here]


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

Exhibit D Rev C

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


Test Plan Requirements

       Last Saved: January 15, 2001 2:24 PM

Document Number: XM-TBD-00004

                   DOCUMENT RELEASE APPROVALS

-------------------------------------------
Approved by                            Date

John R. Wormington
Senior Vice President,
XM Satellite Radio Inc.
-------------------------------------------
Approved by                            Date

Peter S. Lauenstein (Hughes Space and
Communications Company)

Program Manager: XM Spacecraft
-------------------------------------------

<Page>

***** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.

                 [*** Pages 2-80 of Exhibit D]


<Page>

[Logo of XM Satellite Radio Inc. Appears Here]


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

Exhibit E

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


XM Satellite Radio Spacecraft
Radiation Environment Specifications

       Last Saved: July 14, 1999 4:29 PM

Document Number: XM-TBD-00005

                   DOCUMENT RELEASE APPROVALS

-------------------------------------------
Approved by                            Date

John R. Wormington
Senior Vice President,
XM Satellite Radio Inc.
-------------------------------------------
Approved by                            Date

Peter S. Lauenstein (Hughes Space and
Communications Company)

Program Manager: XM Spacecraft
-------------------------------------------


<Page>

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

Revision Log

This log identifies those portions of this document which have been revised
since the original issue and the date of each revision.

<Table>
<Caption>

   Rev          Authorizing              Summary of Changes to Previous Version
                 Document
<S>           <C>                     <C>
                                        Contract Version
-------------------------------------------------------------------------------------------
A                                       Change AMRC to XM
                                        New Coversheet (with new signature block and new
                                        logo)

</Table>

<Page>

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requested with respect to the omitted portions.

<Table>
<Caption>

Table of Contents

<S>                    <C>                                    <C>
1                       INTRODUCTION.........................  4
2                       [***]................................  5
2.1                     [***]................................  5
2.2                     [***]................................  6
2.3                     [***]................................  6
2.4                     [***]................................  6
2.5                     [***]................................  7
3                       [***]................................  8

Table of Tables
         Table 1:       [***]................................  5
         Table 5:       [***]................................  6
</Table>

<Page>

1 INTRODUCTION

    This Exhibit specifies the minimum radiation environment to be used for
    the XM spacecraft design.

<Page>

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

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                            [*** Pages 5-8]

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[Logo of XM Satellite Radio Inc. Appears Here]


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

Exhibit F

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


Long Lead Items and Activities for Ground Spare Spacecraft


<Page>

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

***** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.


<Page>

[Logo of XM Satellite Radio Inc. Appears Here]


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

Exhibit G Rev D

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


PFM and FM1 Payment Plans and
Termination Liability Schedules

-------------------------------------------
Approved by                            Date

Heinz Stubblefield
Senior Vice President and
Chief Financial Officer,
XM Satellite Radio Inc.
-------------------------------------------
Approved by                            Date

Peter S. Lauenstein (Hughes Space and
Communications Company)

Program Manager: XM Spacecraft
-------------------------------------------


<Page>



***** Confidential treatment has been requested for this ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.



                     [*** Pages 2-20 of Exhibit G]


<Page>

                                      EXHIBIT H
                                      XM 1 AND 2
      INITIAL SATELLITE OPERATIONS PHASE AND CRITERIA FOR FINAL HANDOVER
                                   STATEMENT OF WORK

**** Confidential treatment has been requested for the ENTIRE exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this
exhibit has been filed separately with the Securities and Exchange Commission.

[***Pages 1-7 of Exhibit H]