Document:

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                                                                   EXHIBIT 10.29

              CONFIDENTIALITY AND INTELLECTUAL PROPERTY AGREEMENT

       THIS AGREEMENT sets forth the understandings between you and TELECT, INC.
("Telect") concerning your treatment of confidential and proprietary information
and concerning any inventions you may make in connection with your employment by
Telect.

RECITALS

       A.     Telect and its subsidiaries are engaged in a business which is
              highly dependent upon confidential technology and know-how, and
              which is uniquely vulnerable to harmful disclosures of
              confidential information by employees and former employees;

       B.     Telect requires certain undertakings from you as a condition to
              (i) Telect's engagement of you as an employee or (ii) Telect's
              continuation of your employment and grant to you of options to
              purchase Telect's common stock;

       C.     You acknowledge that either item (i) or item (ii) of Recital B
              constitutes adequate consideration for your undertakings pursuant
              to this Agreement.

AGREEMENT

1. Definitions. For purposes of this Agreement, the terms below shall have the
following meanings:

              (a) "Proprietary Information" shall mean information not publicly
known, whether or not in writing, related to the business activities of Telect
or its subsidiaries, including, but not limited to, technical and scientific
information, manufacturing information, research information, financial
information, marketing information, employee lists, customer lists, and business
plans. Proprietary Information shall also include, but not be limited to,
confidential information about third parties for which Telect or its
subsidiaries has a nondisclosure obligation of any kind.

              (b) "Invention" shall mean any discovery, design, improvement,
method, process, new concept or new idea, of any nature, whether or not
patentable or copyrightable, whether or not reduced to practice, whether
conceived or discovered individually or jointly with others, and whether or not
related to your scope of employment by or duties to Telect or its subsidiaries.

       2. Proprietary Information.

              (a) Unless you have received the prior written consent of Telect:

                     (1) You shall not at any time during or after your
employment with Telect, directly or indirectly disclose any Proprietary
Information except to another employee of Telect or its subsidiaries whose
responsibilities require knowledge of the Proprietary Information; you shall
also not discuss or mention Proprietary Information in circumstances where such
discussion or mention could possibly be overheard by unauthorized persons; and

                     (2) You shall not reproduce or publish or make any direct
or indirect use of any Proprietary Information, except for purposes directly
related to your duties on behalf of Telect or its subsidiaries.

                     (3) You shall exercise the utmost care to protect the
secrecy of the Proprietary Information and shall maintain and protect all
Proprietary Information while in your

<PAGE>   2

possession and implement adequate safeguards to ensure that unauthorized persons
do not have access to the Proprietary Information.

              (b) Upon termination of your status as an employee of Telect, you
shall deliver to Telect all originals and copies in your control or possession
of documents, objects, designs, drawings, photographs, or written information
which describe, depict, or contain any Proprietary Information. You agree that
the product of any services performed by you in the course of your employment or
engagement by Telect, including, but not limited to, Proprietary Information,
shall be the property of Telect.

       3. Inventions

              (a) Employee's Rights In Inventions.

                     (i)    Previous Employee Inventions. In the space provided
                            below, or on a separate sheet attached to this
                            Agreement, you may list all Inventions: (a) that you
                            made prior to your employment with Telect; and (b)
                            that you claim belong to you or that you claim an
                            interest in; and (c) that relate to Telect's or its
                            subsidiaries' businesses or proposed businesses and
                            products; and (d) in which you wish to retain all
                            claimed ownership rights ("Employee Inventions"). If
                            you have not listed any Employee Inventions, you
                            acknowledge and agree that no such Employee
                            Inventions exist. You understand that your listing
                            of any Employee Invention(s) here does not
                            constitute an acknowledgement by Telect or any of
                            its subsidiaries of your ownership of such Employee
                            Invention(s).

                     Employee Inventions:

                                                   Identifying Number or
                     Title         Date             Brief Description

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

                     ____ (Check as applicable) You have attached a separate
                     sheet listing Employee Inventions.

                     (ii)   Future Employee Inventions. Telect acknowledges and
                            agrees, as provided by applicable state law, that
                            any Inventions: (a) that you develop entirely on
                            your own time; and (b) that you ---- develop without
                            using Telect's or its subsidiaries' equipment,
                            supplies, facilities, or trade secret information;
                            and (c) that --- do not result from any work
                            performed by you for Telect or its subsidiaries; and
                            (d) that do not directly relate at the time --- of
                            conception or reduction to practice to the business
                            of Telect or its subsidiaries, or actual or
                            demonstrably anticipated research or development of
                            Telect or its subsidiaries, will be owned entirely
                            by you, even if developed by you during the time
                            period in which you are employed by Telect.

<PAGE>   3

              (b) Telect's Rights In Inventions.

                     (i) Disclosure. You agree to make full written disclosure
promptly to Telect of any and all Inventions that you develop during or as the
result of your employment at Telect.

                     (ii) Assignment of Inventions to Telect. You agree that all
Inventions that: (a) have been or are developed using the equipment, supplies,
facilities or Proprietary Information of Telect or its subsidiaries, (b) have
resulted from or have been or are suggested by work performed by you for Telect
or its subsidiaries, or (c) which have been or are conceived or reduced to
practice during your employment at Telect and which directly relate to the
business, or actual or demonstrably anticipated research or development of
Telect or its subsidiaries ("Telect Inventions"), will be the sole and exclusive
property of Telect, and you will and hereby do assign all your right, title and
interest in such Telect Inventions to Telect.

                     (iii) Assignment of Moral Rights to Telect. In addition,
you hereby transfer and assign "moral" rights that you may have in any Telect
Invention(s) under any copyright or other law, whether U.S. or foreign. You
agree to waive and never to assert any such "moral" rights in Telect Inventions
during or after the termination of your employment with Telect. You agree that
Telect, its subsidiaries and licensees are not required to designate you as the
author of any Telect Inventions when distributed. You also agree that Telect
retains sole discretion with regard to how and for what purposes, if any, such
Telect Invention(s) are used.

              (c) Protection of Telect Inventions.

                     You agree (at Telect's expense) to assist Telect or any of
its applicable subsidiaries in every proper way to obtain and to help Telect or
any of its applicable subsidiaries enforce patents, copyrights, and other legal
protections for Telect Inventions in any and all countries. You agree to
promptly execute any documents that Telect may reasonably request for use in
obtaining or enforcing such patents, copyrights and other legal protections. You
acknowledge that all original works of authorship that have been or are made by
you (solely or jointly with others) within the scope of your employment at
Telect, and that are protectable by copyrights, are "works made for hire," as
that term is defined in the United States Copyright Act (17 U.S.C. Section 101).
To the extent any work does not constitute a work made for hire, you agree to
assign all rights, title, and interest in any copyright pertaining thereto.

       4. Prior Employment. You understand that Telect is not employing you to
obtain any information which is the property of any previous employer or any
others for whom you have performed services. You agree to not, in performing
services for Telect or its subsidiaries, make use of information which is the
property of and/or confidential information of any employer or other person or
entity for whom you have performed services. You represent and warrant that you
are not currently subject to any contractual or other secrecy restriction which
would prevent or materially limit you from carrying out your duties for Telect
or its subsidiaries. In the event that you seek new employment, you agree to
notify each new employer, prior to accepting your employment, of the existence
of this Agreement. You agree to indemnify and hold Telect and its subsidiaries,
officers, directors, employees and agents harmless from any loss, liability or
damage arising out of the inaccuracy of the foregoing representation and
warranty.

       5. Notice of Unauthorized Disclosure. You agree to immediately notify
Telect of any actual or potential misuse, misappropriation or unauthorized
disclosure of Proprietary Information or violation of this Agreement by any
current or former employee of Telect or any third party that may come to your
attention.

       6. Assignment. Telect may assign all rights and obligations under this
Agreement.

<PAGE>   4

       7. Equitable Relief. You acknowledge that any violation by you of any of
the provisions of this Agreement may cause Telect and its subsidiaries
irreparable injury. You therefore agree that Telect shall be entitled, in
addition to any remedies it may have under this Agreement or at law, to
injunctive and other equitable relief to prevent or curtail any breach of this
Agreement by you.

       8. No Waiver. No waiver of any of the terms or provisions of this
Agreement shall be valid unless in writing and signed by the party against which
the enforcement of such waiver is sought, nor shall any waiver or failure to
enforce any right hereunder be deemed to be a waiver of the same or any other
right in any other instance.

       9. Enforcement Costs. In any action to enforce its rights hereunder, the
prevailing party shall be reimbursed by the other for its costs of enforcement,
including, without limitation, reasonable attorney's fees and costs of appeal.

       10. Governing Law. Telect and you intend that this Agreement be governed
by and enforced to the greatest extent permitted by the laws of the State of
Washington. If any provisions of this Agreement, on their face or as applied to
any person or circumstance, are or become unenforceable to any extent, the
remainder of this Agreement and the application of such provisions to other
persons, circumstances or extents, will not be affected and will continue in
force.

       11. Amendments. All amendments of this Agreement shall be made in writing
and signed by the parties. No oral amendment shall be binding on the parties.

       12. Entire Agreement; Survival. This Agreement is intended to be the
parties' complete expression of the terms of their agreement with respect to the
subject matters addressed herein. Any prior agreements, understandings or
statements, oral or written, with respect to such subject matters are superseded
hereby and fully merged herein. This Agreement is not intended to be and shall
not constitute an employment contract. Telect shall have no obligation
whatsoever to continue to employ you at any time. You agree that your
obligations hereunder shall survive any termination of your employment,
regardless of the reason, or lack thereof, for such termination, or the amount
of any compensation received in connection therewith.

       13. NO CHANGE TO AT WILL STATUS. NOTHING CONTAINED IN THIS AGREEMENT
ALTERS THE AT WILL STATUS OF YOUR EMPLOYMENT WITH TELECT, INC.

<PAGE>   5

       IN WITNESS WHEREOF, the parties hereby execute this Confidentiality and
Intellectual Property Agreement as of the date set forth next to the parties'
signatures.

TELECT:                                 EMPLOYEE:
TELECT, INC.                            ----------------------------------------

By:                                     Print name:
   -----------------------------                   -----------------------------

Its:                                    Date:
    ----------------------------             -----------------------------------

Date:                                   Address:
     ---------------------------                --------------------------------
                                                --------------------------------
                                                --------------------------------<PAGE>   1
                                                    31 August 2000 - Amendment 7
Satellite Contract                              Contract Number: ICOO/95-1002/NR
--------------------------------------------------------------------------------

================================================================================

                      COMPOSITE COMPILED SATELLITE CONTRACT

                                     BETWEEN

               HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC.

                                       AND

                 I-CO GLOBAL COMMUNICATIONS (OPERATIONS) LIMITED

                           DATED AS OF 3 OCTOBER 1995

================================================================================

                        CONTRACT NUMBER: ICOO/95-1002/NR

                                     Page 1
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                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                Page No.
<S>                                                                             <C>
ARTICLE 1      DEFINITION.......................................................   5
ARTICLE 2      SCOPE OF WORK....................................................  12
ARTICLE 3      DELIVERY SCHEDULE................................................  14
ARTICLE 4      CONTRACT PRICE, PAYMENT AND ADJUSTMENTS..........................  17
ARTICLE 5      SATELLITE PERFORMANCE PAYMENTS; * INCENTIVES; * INCENTIVES.......  23
ARTICLE 6      RESERVED.........................................................  44
ARTICLE 7      PERMITS AND LICENSES: GOVERNMENT APPROVALS.......................  45
ARTICLE 8      ACCEPTANCE.......................................................  47
ARTICLE 9      TITLE AND RISK OF LOSS...........................................  54
ARTICLE 10     FORCE MAJEURE....................................................  57
ARTICLE 11     CONSEQUENCES OF LATE DELIVERY....................................  58
ARTICLE 12     ACCESS TO WORK IN PROGRESS AND DATA..............................  64
ARTICLE 13     INDEMNIFICATION..................................................  66
ARTICLE 14     WARRANTY.........................................................  68
ARTICLE 15     SATELLITE NOT LAUNCHED AFTER AVAILABLE FOR SHIPMENT DATE.........  70
ARTICLE 16     TAXES AND DUTIES.................................................  72
ARTICLE 17     TERMINATION......................................................  74
ARTICLE 18     DATA RIGHTS......................................................  85
ARTICLE 19     INTELLECTUAL PROPERTY INDEMNITY..................................  87
ARTICLE 20     RIGHTS IN INVENTIONS.............................................  89
ARTICLE 21     CONFIDENTIALITY..................................................  92
ARTICLE 22     INTERPRETATION...................................................  96
ARTICLE 23     PUBLICITY........................................................  99
ARTICLE 24     NOTICES.......................................................... 100
ARTICLE 25     INTEGRATION...................................................... 102
ARTICLE 26     ASSIGNMENT....................................................... 103
ARTICLE 27     SEVERABILITY..................................................... 105
ARTICLE 28     CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES..................... 106
ARTICLE 29     I-COGC'S RESPONSIBILITIES........................................ 107
ARTICLE 30     DISPUTES AND ARBITRATION......................................... 110
ARTICLE 31     MISSION OPERATIONS AND LAUNCH SUPPORT............................ 111
ARTICLE 32     STORAGE.......................................................... 112
ARTICLE 33     OPTIONS.......................................................... 113
ARTICLE 34     LIMITATION OF LIABILITY.......................................... 120
ARTICLE 35     MISCELLANEOUS.................................................... 122
ARTICLE 36     MAJOR SUBCONTRACTORS............................................. 126
ARTICLE 37     SPECIAL PROVISION APPLICABLE TO SATELLITE F15.................... 127
ARTICLE 38     ADDITIONAL SATELLITES OF THE SAME GENERATION AND DESIGN.......... 130
ARTICLE 39     FINALIZATION OF RADAR SPECIFICATION AND MODIFICATION............. 131
</TABLE>

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                     Page 2
<PAGE>   3

<TABLE>
<S>                                                                             <C>
ARTICLE 40     RESERVED......................................................... 134
ARTICLE 41     SPACE SEGMENT SUPPORT TO SEIT.................................... 135
</TABLE>

THIS COMPOSITE COMPILED CONTRACT is effective as of the third day of October,
1995,

BETWEEN:

I-CO GLOBAL COMMUNICATIONS (OPERATIONS) LIMITED, a company incorporated in the
Cayman Islands as an Exempted Company having its registered office at the
Huntlaw Building, PO Box 1350, Fort Street, Georgetown, Grand Cayman, Cayman
Islands (hereinafter referred to as "I-COGC") and

HUGHES SPACE AND COMMUNICATIONS INTERNATIONAL, INC., a company incorporated
under the laws of the State of Delaware, USA, with a place of business in El
Segundo, California, (hereinafter referred to as "Hughes").

WHEREAS, I-COGC desires to procure fifteen Satellites delivered on the ground to
designated launch sites, together with delivery of an engineering model (EM)
payload, an integrated TT&C ground segment and additional hardware and services
for launch preparations, mission operations and post-launch commissioning and
test as part of a fixed and mobile satellite communications system subject to
the terms and conditions hereof; and

WHEREAS, Hughes desires to supply the same in accordance with the terms and
conditions hereof; and

WHEREAS, the Parties to this Contract acknowledge that certain delivery
requirements under this composite compiled contract have already been met.

                                     Page 3
<PAGE>   4

WHEREAS, the Parties have entered into a separate but interrelated launch
services supply and management contract ;and

WHEREAS, this Contract has been amended by Amendment 1 dated 26 June 1996,
Amendment 2 dated 9 September 1996, Amendment 3 dated 6 April 1998, Amendment 4
dated 21 January 1998, Satellite Variation Agreement to the Contract on 11 March
1998, Amendment 5 dated 7 August 1998, and Amendment 6 dated 7 August 1998, the
terms and conditions of all such amendments having been incorporated in this
composite compiled Contract.

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

                                     Page 4
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ARTICLE 1      DEFINITIONS

In this Contract, unless the context otherwise requires, the following terms
shall have the meaning stated hereunder:

A.      "ACCEPTANCE TEST PLAN" means the test plan which is incorporated herein
        and made a part of this Contract and is EXHIBIT D to this Contract.

B.      "Affiliate" means, with respect to a Party, any subsidiary or holding
        company (as determined by the Companies Act 1985 of Great Britain) at
        any tier of such Party.

C.      "Associate" means any individuals or legal entities, organized under
        public or private law, who shall, directly or indirectly, on behalf of
        or at the direction of either Party to this Contract fulfill any of the
        obligations undertaken by such Party in this Contract including, but
        without limitation, the Affiliates, Subcontractors, Consultants,
        employees, officers, directors or agents of each of them and of each of
        the Parties.

D.      "ATP" means the contract made between the Parties as of 05 July 1995
        entitled "Preparatory Phase of Inmarsat-P Space Segment".

E.      "Available for Shipment" means that the Satellite, Engineering Model
        Payload or Satellite Control Equipment and other relevant Work has
        successfully passed all in-plant acceptance tests, has undergone a
        Pre-Shipment Review (if applicable) and has been agreed ready to be
        shipped.

F.      "Business Day" means a day on which I-COGC or Hughes (as appropriate for
        affected Party) is open for business, excluding Saturdays, Sundays and
        public holidays.

                                     Page 5
<PAGE>   6

G.      "Consultant(s)" means a person or organization identified to Hughes,
        which person is retained by I-COGC to provide I-COGC with technical
        advice and/or management services.

H.      "Contract" means this written instrument embodying the agreement between
        Hughes and I-COGC, including the EXHIBITS annexed hereto and made a part
        of this Contract, as may be varied in accordance with the provisions of
        this Contract.

I.      "Contract Price" means the total amount expressed in this Contract
        ARTICLE 4, CONTRACT PRICE, PAYMENT AND ADJUSTMENTS, as may be varied in
        accordance with the provisions of this Contract.

J.      "Day" means a continuous 24-hour period commencing at 2400 Midnight
        (Greenwich Mean Time).

K.      "Delivery" shall have the meaning ascribed to it in ARTICLE 3, DELIVERY
        SCHEDULE.

L.      "Delivery Date" means in respect of a Satellite or GCE that Delivery
        date specified in ARTICLE 3, DELIVERY SCHEDULE, taking into account the
        number of Days of Excusable Delay, if any, within the meaning of ARTICLE
        10, FORCE MAJEURE, or otherwise excused by the terms of this Contract

M.      "Delivery Schedule" means the timetable for Delivery set forth in
        ARTICLE 3, DELIVERY SCHEDULE.

N.      "Designated Launch Site" means the launch facility provided by the
        applicable Launch Services Provider.

                                     Page 6
<PAGE>   7

0.      "Documentation" means documentation to be delivered under this Contract,
        as more fully described in EXHIBIT A, STATEMENT OF WORK.

P.      "Effective Date of Contract (EDC)" means the last date that this
        Contract was duly signed by both Parties.

P1.     "Employment Cost Index" or "ECI" means the U.S. Department of Labor
        Employment Cost Index for wages & salaries - professional, specialty,
        and technical workers and is published by the U.S. Department of Labor,
        Bureau of Labor Statistics.

P2.     "Engineering Model Payload" means that which is defined in EXHIBIT A,
        STATEMENT OF WORK.

Q.      "Excusable Delay" shall have the meaning ascribed to it in ARTICLE 10,
        FORCE MAJEURE.

R.      "Ground Control Equipment (GCE)" means Ground TT&C hardware and software
        services to support telemetry, tracking, command and spacecraft control
        monitoring equipment being manufactured and delivered under this
        Contract as part of the Work, as more particularly described in EXHIBIT
        A, STATEMENT OF WORK.

S.      "I-CO Program" means the program to establish a system for fixed and
        mobile communications, data, and ancillary services using the Satellites
        and any earth stations operating at any time in conjunction therewith.
        The term "Inmarsat P" as used in the Exhibits and as applied to various
        elements of this program shall have the same meaning as "I-CO".

                                     Page 7
<PAGE>   8

T.      "I-COSL" means ICO Services Limited. I-COSL has been appointed a
        Consultant and has been given authority under an agreement with I-COGC
        to manage this Contract on behalf of I-COGC. All notices, instructions
        or consultations which are given or engaged in by I-COSL in the
        performance of its management and consultancy functions in relation to
        this Contract shall be deemed, pursuant to the aforesaid agreement, to
        have been given by I-COGC and shall be binding on I-COGC.
        Notwithstanding the foregoing, I-COSL is not authorized to vary the
        terms of this Contract in any manner whatsoever unless and to the extent
        that the I-COGC authorized representative referred to in ARTICLE 24,
        NOTICES, advises Hughes in writing to the contrary.

U.      "Intentional Ignition" means the intentional ignition of any first stage
        motor of the Launch Vehicle by the Launch Services Provider or, for
        Atlas Launch Services, the point in time during the launch countdown
        when initiation of the gas generator ignitors firing command and firing
        of any of the gas generator ignitors occurs.

V.      "Launch Attempt" or "Launch" means the point in time when there is
        Intentional Ignition.

W.      "Launch Operations Services for Satellites" means the services provided
        by Hughes in support of the launch mission as defined in EXHIBIT A,
        STATEMENT OF WORK.

X.      "Launch Readiness Review" shall have the meaning ascribed to it in
        ARTICLE 8.4.

Y.      "Launch Services" means the services which the applicable Launch
        Services Provider provides under its Launch Services agreement.

Z.      "Launch Services Provider" means the organization(s) which Hughes has
        contracted with under the proposed interrelated contract referred to in
        the Recitals to perform Launch

                                     Page 8
<PAGE>   9

        Services, including furnishing the Launch Vehicle, launch support,
        equipment and facilities for the purpose of launching the Satellites
        into orbit.

AA.     "Launch Vehicle" means a vehicle provided by the applicable Launch
        Services Provider by which a Satellite is to be launched into orbit.

BB.     "Less than Satisfactorily Operating Satellite" means a Satellite which
        exhibits Less than Satisfactory Operation

CC.     "Less than Satisfactory Operation" means that not all performance
        parameters for a Satellite meet the requirements of EXHIBIT B, SATELLITE
        TECHNICAL SPECIFICATION.

DD.     "Major Subcontractor" shall have the meaning ascribed to it in ARTICLE
        36, MAJOR SUBCONTRACTORS.

EE.     "Month" means a calendar month.

FF.     "Navigation Payload" means that element of the Satellite payload which
        provides navigation services in accordance with EXHIBIT B, SATELLITE
        TECHNICAL SPECIFICATION, and which is separable from the Work as
        described in ARTICLE 6, NAVIGATION PAYLOAD.

GG.     "Operational Lifetime" means the twelve year (4383 Day) performance
        period of the Satellite. This performance period commences on the day
        when the Satellite is positioned at its Specified Orbit and completion
        of in-orbit testing, or forty-five (45) Days after Launch, whichever is
        earlier. The term "Service Life" shall have the same meaning.

                                     Page 9
<PAGE>   10

HH.     "Party" or "Parties" means an entity or all entities, according to the
        context, which has or have signed this Contract.

II.     "Payload Control System (PCS)" means the integrated suite of hardware,
        software, and operations products that collectively will be used to
        support normal, on-station, ICO payload traffic control operations. The
        PCS will provide data to assist in operations relating to satellite
        diagnostics, calibration, payload trending, and short-term storage. PCS
        will also assist IOT and satellite failure investigation efforts as
        required.

JJ.     "Performance Commencement Date (PCD)" means 05 July 1995 being the date
        of the signature of the ATP.

KK.     "Pre-Shipment Review" shall have the meaning ascribed to it in ARTICLE
        8, ACCEPTANCE.

LL.     "PRODUCT ASSURANCE PLAN" means the PRODUCT ASSURANCE PLAN which is
        incorporated herein and made a part of this Contract and is EXHIBIT C to
        this Contract.

MM.     "PCS System Requirement Review (SRR)" shall have the meaning ascribed to
        it in Article 5.2.5 of EXHIBIT A, STATEMENT OF WORK.

NN.     "Satellite" means the satellite(s) to be provided to I-COGC as part of
        the Work as defined below (including the firm and exercised optional
        satellites). The term "Spacecraft" shall be interchangeable with the
        term "Satellite" and has the same meaning.

OO.     "Satisfactorily Operating Satellite" means a Satellite which exhibits
        Satisfactory Operation

                                    Page 10
<PAGE>   11

PP.     "Satisfactory Operation" means that all performance parameters for a
        Satellite meet the requirements of EXHIBIT B, SATELLITE TECHNICAL
        SPECIFICATION.

QQ.     "Service Life" shall have the same meaning as "Operational Lifetime".

RR.     "Spacecraft Operating Procedures" means the written directives and
        instructions for operating the Satellite as described in EXHIBIT A,
        STATEMENT OF WORK.

SS.     "Specified Orbit"" means, with respect to a Satellite, the intermediate
        circular orbit plane and spacing specified in accordance with EXHIBIT B,
        TECHNICAL SPECIFICATION.

TT.     "STATEMENT OF WORK" or "SOW" means the STATEMENT OF WORK which is
        incorporated herein and made a part of this Contract and is EXHIBIT A to
        this Contract.

UU.     "Subcontractor" means a person, firm, corporation, consultant or
        business entity which has been awarded a subcontract by Hughes, to
        provide a portion of the Work covered by this Contract.

VV.     "Successfully Launched Satellite" means that the elements of the
        Specified Orbit established by the Launch Vehicle and the orientation
        and time of separation are within three (3) sigma limits of the Launch
        Vehicle performance as established in the interface control document or
        equivalent, and the Satellite has not suffered damage caused by any
        failure or malfunction of the Launch Vehicle.

WW.     "Work" means all labor, services, acts (including tests to be
        performed), items, materials, articles, data, documentation, equipment,
        matters and things to be furnished, and rights to be transferred under
        this Contract.

                                    Page 11
<PAGE>   12

The ARTICLE and ARTICLE headings are for convenience of reference only and shall
not be considered in interpreting this Contract. Where the context so requires,
words importing the masculine gender include the feminine and neuter genders
where the context so requires. The Recitals of this Contract are descriptive
only and shall not create or affect obligations of the Parties.

                                    Page 12
<PAGE>   13

ARTICLE 2      SCOPE OF WORK

2.1     In accordance with the terms and conditions of this Contract, Hughes
        shall sell, and I-COGC shall purchase the Work (including fifteen (15)
        Satellites) and Hughes shall furnish and perform all elements of the
        Work for the purposes of such sale. Hughes shall furnish and perform the
        Work in accordance with the provisions of this Contract and shall
        perform the Work to the extent and in the manner specified in the
        following documents, which are attached hereto and made a part of this
        Contract:

<TABLE>
<CAPTION>
      Document                                                                     Date
<S>                                                                            <C>
      EXHIBIT A - STATEMENT OF WORK                                            24 Aug 2000
      EXHIBIT B - SATELLITE TECHNICAL SPECIFICATION                            25 Aug 2000
      EXHIBIT C - PRODUCT ASSURANCE PLAN                                       25 Aug 2000
      EXHIBIT D - ACCEPTANCE TEST PLAN                                         24 Aug 2000
      EXHIBIT E - GCE IMPLEMENTATION AND TEST PLAN                              3 Oct 1995
      EXHIBIT F - GCE TECHNICAL SPECIFICATION                                   3 Oct 1995
      EXHIBIT G - GCE PRODUCT ASSURANCE PLAN                                    3 Oct 1995
      EXHIBIT H - MILESTONE PAYMENT PLAN                                       24 Aug 2000
      EXHIBIT I -  I-COGC GUARANTEE                                             3 Oct 1995
      EXHIBIT J - HUGHES GUARANTEE                                              3 Oct 1995
      EXHIBIT K - PCS TECHNICAL SPECIFICATION AND TEST PLAN                    10 Dec 1997
</TABLE>

2.2     In the event of any inconsistency among or between the parts of this
        Contract, such inconsistency shall be resolved by giving precedence in
        the order of the parts as set forth below:

                                    Page 13
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                                    Page 14
<PAGE>   15

        A.     CONTRACT ARTICLES
        B.     STATEMENT OF WORK (EXHIBIT A)
        C.     SATELLITE TECHNICAL SPECIFICATION (EXHIBIT B)
        D.     ACCEPTANCE TEST PLAN (EXHIBIT D)
        E.     PRODUCT ASSURANCE PLAN (EXHIBIT C)
        F.     GCE TECHNICAL SPECIFICATION (EXHIBIT F)
        G      GCE IMPLEMENTATION AND TEST PLAN (EXHIBIT E)
        H.     GCE PRODUCT ASSURANCE PLAN (EXHIBIT G)
        I.     MILESTONE PAYMENT PLAN (EXHIBIT H)
        J.     I-COGC GUARANTEE (EXHIBIT I)
        K.     HUGHES GUARANTEE (EXHIBIT J)
        L.     PCS TECHNICAL SPECIFICATION AND TEST PLAN (EXHIBIT K)

2.3     The ATP is hereby subsumed and incorporated into this Contract as if it
        had formed a part of this Contract ab initio. For the avoidance of
        doubt, monies paid by I-COGC under the ATP   *   are deemed to
        have been paid on account of the total Contract Price and Hughes' share
        of the cost of the ATP is included in the Contract Price.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 15
<PAGE>   16

ARTICLE 3      DELIVERY SCHEDULE

3.1     The following goods and services forming part of the Work to be provided
        under this Contract shall be delivered on or before the dates specified
        below.

<TABLE>
<CAPTION>
Item                     Delivery/Performance Date               Place of Delivery
------------------------------------------------------------------------------------
<S>                      <C>                                  <C>
1.   Satellite F1               5 Oct 1998                    Designated Launch Site

2.   Satellite F2               18 Jan 2002                   Designated Launch Site

3.   Satellite F3               15 Feb 2002                   Designated Launch Site

4.   Satellite F4               15 Mar 2002                   Designated Launch Site

5    Satellite F5               12 Apr 2002                   Designated Launch Site

6.   Satellite F6               17 May 2002                   Designated Launch Site

7.   Satellite F7               14 Jun 2002                   Designated Launch Site

8.   Satellite F8               12 Jul 2002                   Designated Launch Site

9.   Satellite F9               16 Aug 2002                   Designated Launch Site

10.  Satellite F10              13 Sep 2002                   Designated Launch Site

11.  Satellite F11              11 Oct 2002                   Designated Launch Site

12.  Satellite F12              8 Nov 2002                    Designated Launch Site

13.  Satellite F13              3 Jan 2003                    Designated Launch Site

14.  Satellite F14              16 Feb 2003                   Designated Launch Site

15.  Satellite F15              1 Apr 2003                    Designated Launch Site

16.  Ground Control             5 Jun 1998                    per SOW
     Equipment (GCE)

17.  Initial Satellite          Per EXHIBIT A                 I-COGC Satellite Control
     Mission Operations                                       Center and SAN Sites
     and In-Orbit
     Testing Services
</TABLE>

                                    Page 16
<PAGE>   17

<TABLE>
<S>                      <C>                          <C>
18.  Launch Site                Per EXHIBIT A         Designated Launch Site
     Operations Services

19.  Training                   Per EXHIBIT A         EL Segundo, California and SCC

20.  Documentation              Per EXHIBIT A         EL Segundo, California

21.  Engineering Model            05 Jul 1997         El Segundo California*
      Payload

22.  Payload Control              28 Nov 1998         El Segundo, California, SCC,
      System                                            and SANs per SOW
</TABLE>

Notes:

* Hughes is acting as custodian of and will maintain and upgrade the Engineering
  Model Payload, as provided in the Statement of Work.

3.2     Delivery of a Satellite shall be deemed to have occurred upon arrival of
        the Satellite at the Designated Launch Site subject to a visual
        inspection by I-COGC to ensure that there is no apparent physical loss
        or damage in transit and that the Satellite is available for
        commencement of the launch campaign and subject also to the provisions
        of ARTICLE 8.6, and where applicable, ARTICLE 11.4.

3.3     Delivery of items 16 and 22 of ARTICLE 3.1 shall take place upon Final
        Acceptance pursuant to the provisions of ARTICLE 8, ACCEPTANCE.
        Deliverable Documentation which requires I-COGC approval shall not be
        deemed to be delivered and accepted until such approval is received from
        I-COGC.

3.4     Delivery of all other items of Work shall be deemed to have occurred
        upon arrival of the item at the place of delivery or upon completion of
        the service as the case may be.

                                    Page 17
<PAGE>   18

3.5     For a Satellite having been determined Available for Shipment and placed
        into storage in accordance with ARTICLE 32, STORAGE, or ARTICLE 33,
        OPTIONS, Delivery shall be deemed to have occurred upon arrival of the
        Satellite at the storage location.

                                    Page 18
<PAGE>   19

3.6     Packing and shipping will be in accordance with EXHIBIT A, STATEMENT OF
        WORK.

                                    Page 19
<PAGE>   20

ARTICLE 4      CONTRACT PRICE, PAYMENT AND ADJUSTMENTS

4.1     CONTRACT PRICE AND PAYMENT

        The Contract Price for the construction portion of this Contract
        (totaling * ), together with the maximum potential incentives (Satellite
        Performance Incentives, * Incentives, * Incentives, * Incentives, and
        the * Incentive Payments) (totaling * ), is (US) two billion two hundred
        and thirteen million eight hundred and ninety-five thousand six hundred
        ninety dollars (US$2,213,895,690) as shown below. I-COGC shall pay the
        Contract Price to Hughes in accordance with the terms set forth below
        and in the Payment Schedule of EXHIBIT H, MILESTONE PAYMENT PLAN, and
        ARTICLE 5, SATELLITE PERFORMANCE PAYMENTS.

                              Construction Portion

<TABLE>
<CAPTION>
        Item                                               Price (US$)
<S>                                                      <C>
        *                                                        *
        *                                                       *
        *                                                       *
        *                                                       *
        *                                                       *
            Subtotal Construction Price                         *
</TABLE>

        * Does not include Launch Operations or Mission Operations Services, the
          price of which is determined in accordance with Article 31.
       ** The Contract Price for F15 is subject to escalation if placed in
          call-up status as provided in Article 37.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 20
<PAGE>   21

                               Incentives Portion

<TABLE>
<S>                                                      <C>

                                                               *
                                                               *
                                                               *
                                                               *
                               *                               *
                                                               *
                                                               *
                                                               *
                                                               *
                                                               *
        Subtotal Incentives Price                              *

        Contract Price (Construction + Incentives)       2,213,895,690
</TABLE>

4.2     I-COGC shall pay each milestone amount identified in EXHIBIT H,
        MILESTONE PAYMENT PLAN by the end of the relevant Hughes fiscal quarter
        if the invoice and certification from Hughes for that particular
        milestone event has been completed and received at least fifteen (15)
        Days prior to the end of Hughes fiscal quarter. Hughes will identify on
        each invoice the specific day in March, June, September or December that
        coincides with the end of Hughes fiscal quarter. For the avoidance of
        doubt, no invoice may be submitted unless the relevant milestone has
        been completed. In the event I-COGC determines that the requirements for
        such milestone event have not been fulfilled, and if I-COGC gives notice
        to Hughes of such non-fulfillment within five (5) Business Days after
        receipt of Hughes' invoice and certification, the applicable payment may
        be delayed until fifteen (15) Days after I-COGC has determined that the

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 21
<PAGE>   22

        requirements for such milestone event have been fulfilled. For the
        purpose of this ARTICLE 4.2, receipt by I-COGC of an invoice and of
        Hughes' certification shall occur upon receipt of a copy thereof by the
        authorized on-site representative referred to in ARTICLE 4.3.

4.3     The invoices will separately identify any applicable taxes and duties
        and shall be addressed to I-COGC at the following address:

                                    Page 22
<PAGE>   23

               I-CO Global Communications (Operations) Limited
               Huntlaw Building
               P.O. Box 1350
               Fort Street
               Georgetown, Grand Cayman
               Cayman Islands

        but submitted both via an internationally recognized air courier and via
        telefax to:

               I-CO  Services Limited
               1 Queen Caroline Street
               Hammersmith, London W6 9BN
               United Kingdom
               Attention:   Contract Administrator (Space Segment)
               Fax #44-208-600-1199

        and with a copy given by hand to an authorized on-site representative of
        I-COGC at the Hughes' facility.

4.4     Amounts payable are to be remitted by telegraphic transfer to a bank to
        be advised in writing by Hughes.

4.5     Should Hughes fulfill the requirements for a particular payment
        milestone prior to the date specified in EXHIBIT H, MILESTONE PAYMENT
        PLAN, Hughes shall have the right to invoice and receive payment early
        for that milestone provided that:

        1. Hughes has not received a cumulative payment amount in excess of the
           total amount of the milestone payments scheduled for that calendar
           date, and

                                    Page 23
<PAGE>   24

        2. I-COGC agrees at its sole discretion that the early fulfillment of
           the milestone event significantly facilitates the timely performance
           of the Work under the Contract.

4.6     Hughes shall have no right to obtain partial payments for milestone
        events that are not completed but Hughes may, from time to time, request
        partial payment for a partially completed milestone, and if I-COGC (at
        I-COGC's sole discretion) determines such partial payment to be
        appropriate under the circumstances, then Hughes shall be entitled to
        submit an invoice. Such partial payment shall be made by I-COGC within
        fifteen (15) Days after the date of receipt of the invoice to which it
        relates. The remainder of the milestone payment shall be paid in
        accordance with ARTICLE 4.2.

4.7     With respect to any other amounts payable under the Contract, the Party
        entitled to payment shall make a written demand for, or shall submit an
        invoice if so requested by the payor, after such entitlement becomes
        established, and the payor shall make payment within thirty (30) Days
        after receipt of a valid written demand or valid invoice unless the
        Contract specifies to the contrary.

4.8     Within 15 Days of EDC, I-COGC shall provide a parent company guarantee
        of I-COGC's obligations substantially in the form set forth in EXHIBIT
        I, I-COGC GUARANTEE.

4.9     Within 15 Days of EDC, Hughes shall provide a parent company guarantee
        of Hughes' obligations substantially in the form set forth in EXHIBIT J,
        HUGHES GUARANTEE.

4.10    No dispute with respect to the payment of any amount under this Contract
        shall relieve the disputing Party of its obligation to pay all other
        amounts due and owing under this Contract. All disputed amounts, unless
        otherwise specified in the Contract, shall be paid

                                    Page 24
<PAGE>   25

        into an interest-bearing escrow account at Bank of America, Concord,
        California, Account No. (to be established later), within fifteen (15)
        Days after receipt of invoice. After the dispute is settled, the Party
        entitled to the amount or part thereof in escrow shall receive such
        amount together with all interest thereon and the costs and fees
        associated with such escrow account shall be paid by each Party in
        inverse proportion to the amounts received by each Party.

4.11    The Contract Price for Satellites F1-F12 includes all Launch Operations
        and Mission Operations Services. The Contract Price for F2-F12 Launch
        Operations and Mission Operations Services is based upon seven (7)
        Florida and four (4) Russia Launches (as shown in the table below).
        Should I-COGC direct a change(s) to this Launch site allocation, and
        such change is not the result of late Delivery of the Satellite(s), and
        such change has a material effect on the reasonably expected costs of
        such Launch Operations and Mission Operations Services, then the
        Contract Price will be adjusted (up or down) by the amount of such
        Launch Operations and Mission Operations Services increase or decrease
        in expected costs in accordance with ARTICLE 22.3.C.

        For reference purposes, the designated Launch sites and sequence are as
        follows:

<TABLE>
<CAPTION>
        Satellite     Designated Launch Site
        ---------     ----------------------
<S>                   <C>
          F2                 Florida
          F3                 Florida
          F4                 Florida
          F5                 Florida
          F6                 Kazakhstan
          F7                 Kazakhstan
          F8                 Florida
          F9                 Florida
          F10                Kazakhstan
          F11                Kazakhstan
          F12                Florida
</TABLE>

                                    Page 25
<PAGE>   26

ARTICLE 5      SATELLITE PERFORMANCE PAYMENTS; * INCENTIVES; * INCENTIVES

5.1     For Satisfactory Operation of the F1-F12 Satellites delivered under this
        Contract over their Operational Lifetime, Hughes shall, in addition to
        the amounts paid as specified in EXHIBIT H, MILESTONE PAYMENT PLAN, be
        entitled to payments in the amount of   *   for each Satellite.

        For Satisfactory Operation of the F13-F15 Satellites delivered under
        this Contract over their Operational Lifetime, Hughes shall, in addition
        to the amounts paid as specified in Exhibit H, MILESTONE PAYMENT PLAN,
        be entitled to payments in the amount of   *   for each satellite.

        The foregoing incentives for F1-F15 are referred to herein as the
        "Satellite Performance Incentives." No Satellite Performance Incentives
        will be owing with respect to any Satellite that is terminated pursuant
        to ARTICLE 17.

5.2     The first (US)   *   of potential liquidated damages for late delivery
        pursuant to ARTICLE 11, CONSEQUENCES OF LATE DELIVERY which are not
        incurred, (or such lesser amount which is actually available), shall be
        used to establish a performance refund pool (the "Refund Pool"). This
        pool represents an amount of additional Hughes' liability which shall be
        treated as if I-COGC had elected payment refund and had paid the Refund
        Pool as part of the Satellite Performance Incentives at the time of
        Launch, save that for this amount the Operational Lifetime of the
        Satellite shall be deemed to be nine (9) Months and earned accordingly

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 26
<PAGE>   27

        on a linear basis over that period. This amount shall be apportioned
        equally over the 12 Satellites being delivered under this Contract. The
        foregoing amount is not an incentive that will be payable by I-COGC but
        instead is a Hughes liability that, if not extinguished by Satisfactory
        Operation of the 12 Satellites, will be paid by Hughes to I-COGC (or, at
        I-COGC's option, offset against any I-COGC payments to be made to
        Hughes).

5.3     Payment of these amounts shall be made on the basis of either payment
        refund or payment over time. Election of the basis of payment shall be
        made by I-COGC for each Satellite prior to the Available for Shipment
        date. Regardless of the manner of payment, incentives, or if applicable
        the balance of Satellite Performance Incentives not forfeited under
        ARTICLE 5.6 and/or 5.8 for each individual Satellite are earned linearly
        on a daily basis over the Operational Lifetime of the Satellite. Earned
        incentives are no longer subject to reduction for Less than Satisfactory
        Operation.

        A.     If payment refund is selected, then the total amount of
               incentives due to Hughes on each Satellite as determined in
               ARTICLE 5.6 shall be invoiceable by I-COGC after successful
               completion of in-orbit tests or 45 Days after Launch, whichever
               is earlier.

        B.     If payment over time is selected, then each Satellite shall start
               earning incentives commencing either forty five (45) Days after
               the launch date or upon successful completion of in-orbit tests,
               whichever is earlier. At the end of the first Month subsequent to
               such commencement date, Hughes shall invoice I-COGC for the
               partial Month's incentives earned during that Month. Thereafter,
               invoices shall be submitted at the end of each calendar Month for
               the next one hundred forty four (144) Months. The final invoice
               shall be for the outstanding balance of earned Satellite
               Performance Incentives for that Satellite which have not yet been
               paid.

                                    Page 27
<PAGE>   28

               The amount of each payment invoiced (save in respect of a partial
               Month) shall be one one-hundred-forty-fourth (1/144) of the total
               amount for each Satellite stated in ARTICLE 5.1, reduced by any
               percentage reduction calculated under this ARTICLE for Less than
               Satisfactory Operation, and increased by the compounded interest
               rate at a composite LIBOR + 3% starting from successful
               completion of in-orbit tests or forty-five (45) Days after
               Launch, whichever is earlier. When payments are being made on
               multiple Satellites, the invoices shall be aggregated and
               submitted for payment at the end of each calendar month. I-COGC
               shall pay each amount with fifteen (15) Days after receipt of the
               invoice. Whenever the term "interest" is used in this ARTICLE 5,
               the interest rate associated with said "interest" shall be LIBOR
               + 3%, compounded monthly, unless otherwise stated.

5.4     In the event that a Satellite is placed in storage, then the payment
        provisions of this ARTICLE shall be modified as follows:

        A.     If the Satellite is stored for I-COGC convenience for a period
               exceeding 3 Months, then the Satellite Performance Incentive
               payments for that Satellite shall be handled as follows:

               1.     If payment refund is selected, then the full amount of the
                      Satellite Performance Incentives for that Satellite is due
                      and invoiceable in full 3 Months after the Delivery of the
                      Satellite.

               2.     If payment over time is selected, then calculation of the
                      compound interest rate applied to each payment (when
                      finally made) shall start 3

                                    Page 28
<PAGE>   29

                      Months after Delivery of the Satellite, regardless of the
                      time when the in-orbit tests are actually completed.

               3.     For avoidance of doubt, when such stored Satellite is
                      removed from storage and launched, then the full amount of
                      the Satellite Performance Incentives must still be earned
                      (or forfeited) in accordance with the other provisions of
                      this ARTICLE 5.

        B.     In the event that the Satellite is placed into storage for
               reasons other than for I-COGC convenience (including but not
               limited to late Delivery of the Satellite or launch delays) then
               the provisions of ARTICLE 5.4.A shall not apply and no payment or
               escalation, as appropriate, shall be due or apply until
               completion of in-orbit tests or 45 Days after Launch, whichever
               is the earlier.

        C.     Notwithstanding the above, if such stored Satellite is not
               removed from storage within five (5) years after entry into
               storage for purposes of Launch, then all Satellite Performance
               Incentives for said Satellite shall be deemed to have been earned
               in full. If payment over time was selected, then the full amount
               of the Satellite Performance Incentives shall be immediately due
               and payable together with escalation thereon provided that
               storage was for I-COGC's convenience as provided for in ARTICLE
               5.4.A.

5.5     In the event that a Satellite is launched but is not a Successfully
        Launched Satellite, then the full amount of the incentives for that
        Satellite shall be immediately due and payable by I-COGC in full within
        3 Business Days after receipt of the corresponding insurance proceeds
        but in no event later than 30 days after such launch.

                                    Page 29
<PAGE>   30

        A.     Notwithstanding the above, if a failure to achieve the Specified
               Orbit can be remedied by utilization of the Satellite propulsion
               system such that the Satellite can be placed into the Specified
               Orbit, then the Satellite shall be treated as a Successfully
               Launched Satellite only for purposes of this ARTICLE with the
               proviso that the Operational Lifetime shall be recalculated based
               on the amount of propellants remaining at the beginning of the
               Operational Lifetime. Such Satellite Performance Incentives will
               be linearly earned over that resultant lifetime.

        B.     If it is later proven that the Satellite failed to achieve the
               status of a Successfully Launched Satellite because the Launch
               Vehicle was destroyed or damaged by the Satellite, then the
               Satellite Performance Incentives payment on that Satellite will
               be refunded by Hughes, together with interest at LIBOR + 3%.

5.6     A Successfully Launched Satellite shall immediately be subjected to a
        series of in-orbit tests as specified in EXHIBIT D, ACCEPTANCE TEST
        PLAN. The results of these tests shall be used by I-COGC to determine
        the status of the Satellite as either exhibiting Satisfactory Operation,
        or Less than Satisfactory Operation.

        If election of the basis of Satellite Performance Incentive payments
        made by I-COGC pursuant to ARTICLE 5.3 was payment refund, then:

        A.     If the Satellite was determined to be a Satisfactorily Operating
               Satellite, then I-COGC shall pay to Hughes under the terms of
               ARTICLE 5.3.A above, the full amount of Satellite Performance
               Incentives for the Satellite as stated in ARTICLE 5.1.

                                    Page 30
<PAGE>   31

        B.     If the Satellite was determined to be a Less than Satisfactorily
               Operating Satellite, then I-COGC shall determine the amount of
               reduction in the Satellite Performance Incentives stated in
               ARTICLE 5.1 and ARTICLE 5.2 (if any) in accordance with the other
               provisions of ARTICLE 5.8. The balance of said Satellite
               Performance Incentives shall be deemed available to be earned as
               described in other sections of this ARTICLE. The resultant
               amounts shall be paid to Hughes by I-COGC in the case of
               Satellite Performance Incentives referred to in ARTICLE 5.1 under
               the terms of ARTICLE 5.3.A and by Hughes to I-COGC in the case of
               Satellite Performance Incentives referred to in ARTICLE 5.2. If
               Hughes disputes I-COGC's determination, then this dispute shall
               be resolved pursuant to ARTICLE 30, DISPUTES AND ARBITRATION.

        If election of the basis of performance payments made by I-COGC pursuant
        to ARTICLE 5.3 was payment over time, then:

        C.     If the Satellite was determined to be a Satisfactorily Operating
               Satellite, then the full amount of Satellite Performance
               Incentives for the Satellite as stated in ARTICLE 5.1 shall be
               deemed available to be earned and paid as described in other
               sections of this ARTICLE.

        D.     If the Satellite was determined to be a Less than Satisfactorily
               Operating Satellite, then I-COGC shall determine the amount of
               reduction in the Satellite Performance Incentives stated in
               ARTICLE 5.1, in accordance with the other provisions of ARTICLE
               5.8. The balance of said Satellite Performance Incentives shall
               be deemed available to be earned and paid as described in other
               sections of this ARTICLE. If Hughes disputes I-COGC's
               determination, then this dispute shall be resolved pursuant to
               ARTICLE 30, DISPUTES AND ARBITRATION.

                                    Page 31
<PAGE>   32

5.7     To the extent that any failure to maintain Satisfactory Operation is
        caused by 1) a failure of I-COGC to operate or have operated the
        Satellite in accordance with the written directives and instructions
        furnished to I-COGC in the Spacecraft Operating Procedures and any
        applicable service notes for the Satellites, such having been furnished
        under this Contract and not being such as to prevent I-COGC from
        achieving Satisfactory Operation, save that this exclusion shall not
        apply to operation by Hughes; or 2) radio interference by third parties
        (over and above that for which the Satellite is specified), then Hughes'
        entitlement to Satellite Performance Incentives shall not be affected,
        provided that Hughes shall have the burden of proving such causation.

5.8     During periods of time that a Satellite does not provide the performance
        specified in EXHIBIT B, SATELLITE TECHNICAL SPECIFICATION but I-COGC
        elects to continue using the Satellite for communications services, a
        reduction in the Satellite Performance Incentives not previously
        forfeited under ARTICLE 5.6 or this ARTICLE will be calculated as set
        forth below in this ARTICLE 5.8 and in ARTICLE 5.9. If payment refund
        was elected, then the reduction in the incentive amount shall be due and
        payable by Hughes to I-COGC at such time as the amount of reduction is
        agreed between the Parties, save that if the reduction is determined at
        the time of the initial in-orbit tests, then said reduction shall be
        subtracted from the payment due Hughes at completion of said tests. If
        payment over time was elected, then the percentage reduction shall apply
        to all remaining Satellite Performance Incentive payments for that
        Satellite, and no reduction shall apply to payments already made.

         A.    I-COGC will determine the effective loss of capacity (number of
               communications circuits) or availability (link margin available
               to initiate and maintain a communications circuit).

                                    Page 32
<PAGE>   33

         B.    Capacity will be determined by inspecting the non-conforming
               specified parameter(s) and calculating the effective loss of
               S-band or C-band EIRP.

                      If the Satellite continues to support the full design
                      capacity, (assuming availability is unaffected)   *   of
                      Satellite Performance Incentives will be earned.

                      If the effective EIRP is reduced by 3 dB relative to that
                      available from a Satellite which meets the performance in
                      EXHIBIT B, SATELLITE TECHNICAL SPECIFICATION, Satellite
                      Performance Incentive earnings reduce to   *   .

               Partial Satellite Performance Incentives will be earned for
               effective degradations between 0 dB and -3 dB according to the
               following linear scale:

<TABLE>
<CAPTION>
                   S-band or C-Band
               EIRP Degradation, dBW      % Capacity      Incentives Earned
               ------------------------------------------------------------
               <S>                        <C>             <C>
                            0                  *                  *
                           -1                  *                  *
                           -2                  *                  *
                           -3                  *                  *
</TABLE>

        C.     Availability will be determined by inspecting the non-conforming
               specified parameter(s) and calculating the effective loss of
               S-band G/T.

                   If the Satellite continues to support the full availability,
                   (assuming capacity is unaffected), then   *   of Satellite
                   Performance Incentives will be earned.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 33
<PAGE>   34

                   If the effective S-band G/T is reduced by 3 dB relative to
                   that available from a Satellite that meets the performance in
                   EXHIBIT B, SATELLITE TECHNICAL SPECIFICATION then Satellite
                   Performance Incentive earnings reduce to   *   .

               Partial Satellite Performance Incentives will be earned for
               effective degradations between 0 dB and -3 dB according to the
               following scale:

<TABLE>
<CAPTION>
                   S-Band G/T Degradation, dB  Incentives Earned
                   --------------------------  -----------------
                   <S>                         <C>
                               0                       *
                              -1                       *
                              -2                       *
                              -3                       *
</TABLE>

        D.     The Parties acknowledge that capacity or availability loss may
               also result from out-of-specification performance of other
               parameters due to loss of usable bandwidth, or inability to use
               EIRP or G/T at full efficiency. These effects are difficult to
               determine a priori. I-COGC will perform appropriate analyses to
               compute the impact on capacity or availability if and when such
               specific non-conformances occur.

        E.     Earned incentives will be based on the lower of the degraded
               capacity as calculated per paragraph (B) above, or degraded
               availability as calculated per paragraph (C), taking into account
               the factors under paragraph (D) above.

        F.     Where performance can be fully restored by a one time switch to
               redundant equipment, full Satellite Performance Incentive
               earnings apply.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 34
<PAGE>   35

        G.     In the case of the S-band antennas, where antenna element
               redundancy is not required, a graceful performance loss is
               expected if individual element paths fail or do not perform to
               specification. If performance loss is solely due to loss of an
               element path, then full Satellite Performance Incentives will be
               earned provided seven (7) or less elements fail or cease to
               achieve specified performance.

               If more than seven (7) elements fail or cease to achieve
               specified performance, then the capacity and availability
               calculations discussed above shall be made. The reference for the
               EIRP and G/T reductions shall be the level of performance
               specified in EXHIBIT B, SATELLITE TECHNICAL SPECIFICATION less
               the 0.7 dBW EIRP and 0.4 dB G/T reductions associated with loss
               of elements as permitted in EXHIBIT B, SATELLITE TECHNICAL
               SPECIFICATION.

        H.     I-COGC will determine the extent of non-conforming specification
               parameters for the purpose of incentive calculations based on a
               combination of:

                            i.     In-orbit performance measurements using the
                                   I-COGC in-orbit test facilities
                            ii.    The on-board self test facility
                            iii.   Antenna pattern computations based on element
                                   excitation coefficients.

               I-COGC will not seek to lower Satellite Performance Incentive
               payments for performance reduction resulting from a
               non-conformance with a specification, to the extent such
               non-conformance is within the measurement uncertainties of the
               in-orbit test results.

                                    Page 35
<PAGE>   36

               I-COGC will grant to Hughes access to all in-orbit performance
               and/or diagnostic data available to allow Hughes to perform an
               independent assessment of degraded performance.

        I.     Notwithstanding the above determinations, if performance is
               degraded below 50% capacity or availability but I-COGC at its
               sole discretion elects to use the Satellite for revenue-bearing
               purposes, the Parties will negotiate an equitable incentive plan.

5.9     Outages due to intermittent equipment operation or faulty
        hardware/software design (for example, ESD induced switchoffs, passive
        intermodulation, attitude control loop failures) shall result in loss of
        Satellite Performance Incentives equated to disruption of services, not
        time to recover outage. For outages which are less than one day in
        duration, the loss of Satellite Performance Incentives for each such
        outage in a twelve month period beginning at the commencement or
        anniversary of Operational Lifetime ("Operational Year") shall be as
        follows, where the incentives lost will be that amount which would have
        been otherwise earned in the time period stated:

                                    Page 36
<PAGE>   37

<TABLE>
<CAPTION>
           Outage       Lost Incentives
           ------       ---------------
           <S>          <C>
           First              *
           Second             *
           Third              *
           Fourth             *
           Fifth        I-COGC may declare the Satellite a total loss per
                        ARTICLE 5.10
</TABLE>

        For the first outage in an Operational Year which is longer than one day
        in duration, the loss of incentives shall be one calendar month for each
        week or fraction thereof that the Satellite is out of service during
        said outage. Upon occurrence of the second such outage in an Operational
        Year, or if any outage cannot be rectified within one Month, then I-COGC
        may declare the Satellite as a total loss pursuant to ARTICLE 5.10. For
        the purpose of this ARTICLE 5.9, outages will not result in a reduction
        in the Satellite Performance Incentives due Hughes if:

        1) The outage(s) occurs on a spare Satellite, or

        2) The outage(s) occurs on a Satellite prior to the commencement of
           commercial service on that Satellite and the outage(s) do not impact
           system test and/or pre-commercial service trials.

5.10    I-COGC shall have the right to claim a total loss if repeated outages
        result in the Satellite failing to offer a satisfactory service and
        results in I-COGC withdrawing the Satellite from operational service. If
        I-COGC uses said Satellite for experiments or testing in lieu of
        operational service, no Satellite Performance Incentives shall be due to
        Hughes for said usage. If I-COGC elects to use the Satellite for a
        degraded service a partial incentive payment shall be negotiated.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 37
<PAGE>   38

5.11    If I-COGC has to make investment in additional ground segment staffing
        or facilities (hardware or software) to keep a Less than Satisfactorily
        Operating Satellite in operational service, the cost of the additional
        investment will be deducted from Hughes' unearned incentives for that
        Satellite if payment over time has been selected by I-COGC, or Hughes
        will pay I-COGC the corresponding cost (not to exceed the unearned
        incentives for that Satellite) if payment refund has been selected by
        I-COGC.

5.12    If at any time after Satellite Performance Incentives are reduced by
        this ARTICLE the performance of a Satellite improves, the incentives
        will be adjusted to the percentage applicable to the new performance
        level adjusted for the incentive provisions of ARTICLE 5.11, if
        applicable. I-COGC will test each Satellite placed out of service
        quarterly to determine if such Satellite's performance level has
        improved.

5.13    Hughes shall have the opportunity to re-earn all partial Satellite
        Performance Incentives lost, not to exceed   *   , during the
        first twelve (12) operational years of each Satellite, including any
        performance refund amounts paid by Hughes to I-COGC under ARTICLE 5.2,
        if a Satellite(s) is (are) providing revenue generating communications
        services in accordance with this ARTICLE during the 13th and 14th
        operational years. (For the purpose of this ARTICLE, in-orbit spares
        shall be considered to be providing revenue generating communication
        services.) However, if a Satellite is declared a total loss, then only
        the incentives lost prior to total loss declaration are re-earnable. The
        re-earnable amount will be the amount of incentives lost prorated by the
        number of operational days for that Satellite divided by four thousand
        three hundred and eighty (4,380). An extended life Satellite Performance
        Incentive pool will be established. At no time shall the extended life
        performance pool amount be less than zero. All re-earnable lost
        Satellite Performance Incentives will be added to this pool, it being
        understood that the said pool be notional only and shall not require
        I-COGC to segregate any monies for this purpose. The extended life
        Satellite Performance Incentive value for each Satellite

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 38
<PAGE>   39

        will be determined by dividing the total number of operational
        Satellites in their first twelve operational years (and still providing
        revenue generating communications services in accordance with this
        ARTICLE) into the total value of the extended life performance pool at
        that time. However, such extended life Satellite Performance Incentives
        shall not exceed   *   per year for each Satellite.

        The amount of each Satellite's extended life Satellite Performance
        Incentives will be determined at the completion of each Satellite's 12th
        operational year. No additional lost Satellite Performance Incentives
        will be added to, or deleted from, a Satellite's extended life
        performance pool once that Satellite is operating in its extended life
        period. The value of each Satellite's extended life Satellite
        Performance Incentive will be evaluated in accordance with this ARTICLE
        and earned linearly over the 13th and 14th operational years. All
        extended life Satellite Performance Incentives shall only be earned by
        Hughes if the Satellite(s) is providing revenue generating
        communications services in accordance with this ARTICLE which, for the
        avoidance of doubt, shall not include use for test or experimental
        purposes.

        Payment of these extended life Satellite Performance Incentive amounts
        shall be made on the basis of either payment refund or payment over time
        with interest in accordance with Article 5.3 of this Contract, except
        that the interest rate is calculated at LIBOR, at the time the
        incentives and any associated interest are lost.

5.14    In addition to the Satellite Performance Incentives specified in ARTICLE
        5.1 above for Satisfactory Operation of the F13-F15 Satellites over
        their Operational Lifetime, Hughes shall, in addition to the amounts
        paid as specified in Exhibit H, MILESTONE PAYMENT PLAN, be entitled to
        payments in the amount of   *   for each Satellite (the * Incentive
        Payments") for the satisfactory operation of the   *    on board the
        F13-F15 Satellites.   *

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 39
<PAGE>   40
        * The amounts specified above are independent of one another and will
        only be paid if the * on board such Satellite operates satisfactorily.
        Determination of satisfactory operation of the   *    will be based upon
        the * performance verification procedure specified in ARTICLE 5.18
        below. If any of the prior delivered Satellites (F2-F12) is not
        demonstrating on-orbit satisfactory operation of the * operation (up to
        a maximum of three complete failures of such Satellites, no * Incentive
        Payments being payable if such F2-F12 failures exceed three), then the
        maximum amount payable for each of the F13-F15 Satellites will be
        reduced by the such maximum amount multiplied by a fraction, the
        numerator of which is the number of such prior delivered Satellites not
        demonstrating on-orbit satisfactory operation and the denominator of
        which is 11. For the purposes of this paragraph, a "complete failure"
        shall be deemed to have occurred when the * the point at which the
        incentives earned will have reached zero percent (0%) under the table in
        Section 5.18.

        The * Incentive Payments will be payable six (6) months after
        Launch.

        If I-COGC directs that any of the F13-F15 Satellites be placed into
        storage and such storage continues for six or more months, the amount of
        the * Incentive Payments (reduced as described above in the
        event any of the F2-F12 Satellites are not demonstrating successful
        on-orbit * operation), will be payable six months
        after placement into storage. If, after successful launch of the
        previously stored (F13-F15) Satellite(s), the Satellite does not
        demonstrate successful * operation on-orbit, the
        * Incentive Payments received by

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 40
<PAGE>   41

        Hughes for that Satellite shall be immediately refunded to I-COGC with
        interest from the date of payment at LIBOR + 3%, compounded monthly.

        In the event that any of the F13-F15 Satellites is launched but is not a
        Successfully Launched Satellite, then the full amount of the   *
        Incentive Payments for that Satellite(s) shall be due and payable by
        I-COGC six months after the launch. If any of the F13 through F14
        Satellites are terminated for I-COGC's convenience as specified in
        ARTICLE 17 TERMINATION, then in addition to I-COGC's obligations under
        ARTICLE 17, the   *   Incentive Payments (reduced as described above in
        the event any of the F2-F12 Satellites are not demonstrating successful
        on-orbit   *   operation) for the terminated Satellite(s) shall be due
        and payable by I-COGC on the then current nominal Delivery Date for the
        F13 and/or F14 Satellite(s). In the event, that any of the eleven (11)
        F2-F12 Satellites were terminated for I-COGC's convenience prior to
        I-COGC's termination of F13 and/or F14, I-COGC's   *   Incentive Payment
        shall be reduced by 1/11th for each terminated F2-F12 Satellite. No
        interest is to accrue on the *     Incentive Payments payable by I-COGC.

5.15    * incentives (the "  *   Incentives") totaling   *   will be paid by
        I-COGC to Hughes after completion of   *   events to be mutually agreed
        upon by the Parties no later than 30 Days after the completion of the
        System Preliminary Design Review (PDR). The target will be approximately
        20%, 40% and 40% in 2001, 2002 and 2003, respectively. If Hughes and
        I-COGC have not mutually agreed upon the definition of   *   events
        within 30 Days after the completion of PDR as provided above, the
        dispute resolution process specified in ARTICLE 30, DISPUTES AND
        ARBITRATION, will apply.

        Notwithstanding any other provision in this Contract, the foregoing
          *   Incentives will not be payable unless and until the
        corresponding   *

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 41
<PAGE>   42
        event has occurred (regardless of the reasons for any failure of such
        event to occur).  *   I-COGC will use its commercially best efforts to
        negotiate with each of its key suppliers system incentives generally
        tied to the same events and proportionately similar in amount as
        incentives for Hughes in order to maximize alignment of interest and
        avoid gaming by individual suppliers at the expense of other companies.
        No interest will accrue on the   *   Incentives payable by I-COGC.

5.16    Integrated   *   incentives (the "   *  Incentives") totaling   *   will
        be defined by the Parties and paid by I-COGC to Hughes in accordance
        with a performance formula and definition of   *   parameters to be
        mutually agreed upon by the Parties no later than 30 Days after the
        completion of the System Preliminary Design Review (PDR). Formula
        variables will include, for example, system capacity and quality of
        service parameters measured over applicable time periods    *   . The
        target appropriation for the integrated   *   incentives will be
        approximately 80% divided approximately equally for performance periods
        expected to occur in calendar years 2003, 2004, 2005, and 2006, with the
        remaining 20% divided approximately equally for performance periods
        events expected to occur in calendar years 2007 through 2014.
        Notwithstanding any other provision in this Contract, the

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 42
<PAGE>   43
        foregoing * Incentives will not be payable unless and until the
        corresponding * has occurred (regardless of the reasons for any failure
        of such performance to occur). No interest will accrue on the *
        Incentives payable by I-COGC. In the event that Hughes and I-COGC have
        not mutually agreed to the definition of * parameters within 30 Days
        after the completion of the PDR as provided above, the dispute
        resolution process specified in ARTICLE 30, DISPUTES AND ARBITRATION,
        will apply.

5.17    * incentives (the * Incentives") totaling   *   are included in the
        price specified in ARTICLE 4. * The incentive amounts specified above
        are independent of one another and will be paid in accordance with the
        following criteria. These incentives will be conditioned upon full
        demonstration of * performance on the first * Satellite (including all
        affected unit design and unit manufacturers) and will be payable within
        fifteen (15) Days after I-COGC's determination that the requirements for
        each of the following events has occurred: 25% on successful completion
        of unit test (including all affected unit designs and unit
        manufacturers); 25% on successful completion of spacecraft test
        (including all affected unit designs and unit manufacturers); and 50% on
        successful verification as set forth in ARTICLE 5.18 after six months
        on-orbit for the first in-orbit * Satellite (including all affected unit
        designs and unit manufacturers). No interest will accrue on these *
        incentives.

5.18    The Satellite * will be tested in accordance with the test methodology
        as described in Section 6.7 of EXHIBIT D. For purposes of
        accountability, Hughes will supply specific procedures to measure the
        performance described below. I-

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 43
<PAGE>   44
        COGC will be responsible for procuring and making available the
        `cooperative emitter', generating the operating plan, and obtaining the
        permits, licenses, and authority to operate the "cooperative emitter"
        used as a source for the test. In addition, I-COGC shall obtain and
        disclose calibration data for the source so that the validity of the
        test results can be established. If a calibrated, suitable source is not
        available to provide the ability to verify spacecraft performance
        in-orbit, then a modified test approach shall be mutually agreed between
        the Parties within six (6) Months after Launch of the first * Satellite.
        Based upon the results of the testing, the  *  Performance
        Incentives shall be paid in accordance with the following criteria:

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 44
<PAGE>   45

                              * Incentive Criteria

        Given a cooperative S-band interference source on the ground with an
        uplink EIRP of no more than * at the edge of coverage (no more than *
        incident flux density at the Satellite), within * and a signal bandwidth
        between *, partial * incentives shall be earned according to the
        following formula:

<TABLE>
<CAPTION>
        S-band G/T degradation relative to
        Exhibit B Table 3.4.3-1 Specification                Incentives Earned
        -------------------------------------                -----------------
<S>                                                          <C>
        degradation (less than or equal to) 4 dB                     *
        degradation (greater than) 4 dB                              *
        degradation (greater than) 4.5 dB                            *
        degradation (greater than) 5 dB                              *
</TABLE>

        The intent of this formula is to devise a simple quantitative metric
        (averaged over at least 10 seconds of integration time) to capture the
        gross noise floor changes due to all * including spurious and harmonic
        products.

                              * Incentive Criteria

        The * performance shall be measured in accordance with Section 6.7 of
        EXHIBIT D to verify that the * function properly executes and that the
        equivalent G/T disturbance duration (based on * plus measurement margin
        due to the in-orbit environment) is within 20% of the specified time in
        EXHIBIT B Table 3.5.14-1. Measurement margin shall be mutually agreed at
        the time of the * CDR. If * occurs and the disturbance duration is
        verified, then the * incentives will be paid to Hughes.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 45
<PAGE>   46
        If the in-orbit performance of a Satellite suggests that the *
        modifications are not operating correctly, and no * in-orbit testing has
        yet been performed on the Satellite, then Hughes agrees to perform
        appropriate in-orbit testing to verify the performance of the *
        modification.

5.19    Hughes agrees not to insure against the risk of losing (or, in the case
        of the Refund Pool, paying) any of the incentives (including, without
        limitation, the Satellite Performance Incentives, the Refund Pool, the *
        in this ARTICLE (including such incentives as may be applicable to F15
        or any of the optional Satellites).

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 46
<PAGE>   47

ARTICLE 6      RESERVED

                                    Page 47
<PAGE>   48

ARTICLE 7      PERMITS AND LICENSES:  GOVERNMENT APPROVALS

7.1     Hughes shall, at its own expense, secure all Government permits,
        licenses, approvals and consents as may be required for the performance
        of the Work under this Contract. Hughes shall perform the Work in
        accordance with the conditions thereof. I-COGC shall, make commercially
        reasonable efforts to provide to Hughes in a timely manner all
        applicable updating information related to the ownership and control of
        the "new" ICO to include foreign and domestic ownership, corporate
        structure, members of the board, and governance. Hughes and I-COGC agree
        to develop a process for working together to resolve all licensing
        issues in a manner and on a schedule that is consistent with the
        scheduled delivery dates. Such process will include periodic meetings to
        review program export status, consultation with I-COGC prior to
        submission of new or materially-amended export licenses, and, as
        applicable, provision to I-COGC of copies of export licenses and
        subsequent provisos.

        In addition, I-COGC will be responsible for the cost of any new license
        requirements that results from a change to the Contract requested or
        directed by I-COGC, whereas Hughes will be responsible for the cost of
        any license modifications/updates not resulting from a change to the
        Contract requested or directed by I-COGC.

        If I-COGC directs that Hughes relocate the Hughes-provided TT&C
        equipment currently at the I-COGC's SAN site in India to another
        location, I-COGC agrees to reimburse Hughes on a cost reimbursement
        basis for all reasonable costs incurred, including a ten percent (10%)
        fee.

7.2     Notwithstanding this or any other ARTICLE in this Contract, the Parties
        understand and agree that certain restrictions are placed on access to
        Hughes' plant and the use of technical data and hardware delivered under
        this Contract with relation to the approvals

                                    Page 48
<PAGE>   49

        Hughes must obtain from the U.S. Government. As a result, the Parties
        agree that such access and the actual delivery of any technical data
        will be under a separate agreement which shall require prior U.S.
        Government approval. Hughes shall prepare said agreement and, in
        consultation with I-COGC, shall request U.S. Government approval.
        Request for U.S. Government approvals shall be sufficiently
        comprehensive to allow Hughes to fulfill all of its obligations
        hereunder including but not limited to the rights of access and
        inspection granted to I-COGC and its Consultants under this Contract.

7.3     The hardware ("hardware products") furnished under this Contract will be
        authorized by the U.S. Government for export only to I-COGC or to the
        Designated Launch Site for Launch into space or in the case of GCE to
        the installation sites. The products may not be resold, diverted,
        transferred, trans-shipped or otherwise be disposed of in any other
        country, either in their original form or after being incorporated
        through an intermediate process into other end items without the prior
        written approval of the U.S. Government. Additionally, transferring
        registration or control to any other person or business entity of the
        products furnished under this Contract is considered an export and as
        such also requires prior written approval from the U.S. Government.
        I-COGC represents and warrants that the ultimate end use of the products
        is for telecommunications services.

7.4     I-COGC is responsible for obtaining all Governmental licenses and
        permits, approvals and consents as may be required for the importation
        of the Work (other than the Satellite(s)) to the applicable delivery
        location (including those which are required for GCE and PCS
        installation), or relating to the use or operation of the Work following
        delivery, including the Satellite(s), GCE, PCS and other related items.

7.5     The obligations contained in this ARTICLE 7 shall survive expiration or
        termination of this Contract for whatever cause.

                                    Page 49
<PAGE>   50

ARTICLE 8      ACCEPTANCE

8.1     Final Acceptance of any Satellite shall only arise following the
        occurrence of each of the following events:

        A.     Preliminary acceptance (following successful completion of the
               Pre-Shipment Review); and

        B.     Successful completion of the Launch Readiness Review, following
               Delivery of the Satellite to the Designated Launch Site.

8.2     No Satellite shall be delivered either to a Designated Launch Site or
        into Storage until preliminary acceptance of that Satellite, whereupon
        the Satellite shall be Available for Shipment.

8.3     The procedure for effecting a Pre-Shipment Review shall be as follows:

        A.     Hughes shall conduct a Pre-Shipment Review at its premises prior
               to dispatch of any Satellite from its premises;

        B.     The Pre-Shipment Review shall verify that:

               1.     The Satellite protoflight or acceptance testing has been
                      satisfactorily completed in accordance with
                      EXHIBIT D, ACCEPTANCE TEST PLAN;

               2.     All discrepancies or non-conformances have been corrected
                      or dispositioned;

                                    Page 50
<PAGE>   51

               3.     The Satellite, ground support equipment, and supporting
                      documentation as specified in EXHIBIT A, STATEMENT OF
                      WORK, and EXHIBIT B, SATELLITE TECHNICAL SPECIFICATION,
                      are ready for shipment based on an inspection of the
                      Satellite and examination of the data package. A
                      Pre-Shipment Review cannot be deemed completed until all
                      documentation relating to such review has been delivered.

        C.     At least fifteen (15) Business Days written notice of the date of
               the Pre-Shipment Review shall be given by Hughes to I-COGC;

        D.     I-COGC shall have the right to send representatives to attend the
               Pre-Shipment Review;

        E.     Preliminary acceptance shall arise upon the occurrence of any of
               the following:

               1.     The Pre-Shipment Review complies in all respects with the
                      provisions of ARTICLE 8.3.B, and I-COGC notifies Hughes of
                      their acceptance of the Pre-Shipment Review within 5
                      Business Days following successful completion. Failure of
                      I-COGC to so notify Hughes shall be deemed to constitute
                      acceptance of said review; or

               2.     The Pre-Shipment Review complies in all respects with
                      ARTICLE 8.3B save for minor non-conformances that have not
                      been corrected or dispositioned which Hughes demonstrates
                      at the review to I-COGC's reasonable satisfaction have no
                      adverse affect upon the capability of the Satellite to
                      perform its on-orbit mission throughout its Operational
                      Lifetime, and I-COGC notifies Hughes of their acceptance
                      of the Pre-Shipment Review within 5 Business Days
                      following successful

                                    Page 51
<PAGE>   52

                      completion. Failure of I-COGC to so notify Hughes shall be
                      deemed to constitute acceptance of said review; or

               3.     If the Pre-Shipment Review contains non-conformances which
                      require correction, within five (5) Business Days after
                      the said review, I-COGC shall request correction of
                      non-conforming conditions affecting the Satellite in
                      writing ("PSR Correction Notice"). Hughes shall promptly
                      correct the non-conforming conditions referred to therein
                      and, promptly following such correction, shall notify
                      I-COGC that the corrections have taken place and shall
                      invite I-COGC to send representatives to attend an
                      inspection at which they will be entitled to verify that
                      such corrections have been satisfactorily made. The
                      provisions of this ARTICLE 8.3 shall thereafter apply
                      mutatis mutandis to that inspection as if that inspection
                      was the original Pre-Shipment Review.

8.4     Prior to integration of any Satellite with the Launch Vehicle at the
        Designated Launch Site, a Launch Readiness Review (LRR) shall be jointly
        conducted by Hughes and I-COGC. Hughes shall give I-COGC 15 days notice
        of shipment of the Satellite to the Designated Launch Site and I-COGC
        shall have the right to send representatives to attend the LRR. The
        purpose of the LRR is to confirm:

        A.     The Satellite is ready for Launch. Any defects or
               non-conformances as may remain from the Pre-Shipment Review
               (which I-COGC has agreed may be corrected at the Designated
               Launch Site), or resulting from shipment or otherwise discovered
               during Satellite launch preparations shall have been
               satisfactorily corrected or dispositioned in the reasonable
               opinion of I-COGC;

        B.     The TT&C Ground Control is ready to support launch and in-orbit
               operations of the Satellite. Readiness consists of prior Final
               Acceptance of the GCE, and the

                                    Page 52
<PAGE>   53

               preparedness of the GCE and the mission operations team to
               support launch and in-orbit operations; and

        C.     The Launch Vehicle is ready for Launch.

        Upon successful completion of the LRR, the Satellite shall be released
        by I-COGC for Launch Vehicle integration.

8.5     Final Acceptance shall arise upon the occurrence of any of the
        following:

        A.     The LRR demonstrates compliance in all respects with the
               provisions of ARTICLE 8.4.A (and 8.4.B for Satellite F1), and
               I-COGC notifies Hughes of their acceptance of the LRR within 5
               Business Days following its successful completion. Failure of
               I-COGC to notify Hughes shall be deemed to constitute acceptance
               of said review; or

        B.     The LRR demonstrates compliance in all respects with ARTICLE 8.4A
               (and 8.4B for Satellite F1) save for minor non-conformances that
               have not been corrected or dispositioned which Hughes
               demonstrates at the review to I-COGC's reasonable satisfaction
               have no adverse affect upon the capability of the Satellite to
               perform its on-orbit mission throughout its Operational Lifetime,
               and I-COGC notifies Hughes of their acceptance of the LRR within
               5 Business Days following its successful completion. Failure of
               I-COGC to notify Hughes shall be deemed to constitute acceptance
               of said review; or

        C.     If the LRR contains non-conformances which require correction,
               within five (5) Business Days after the said review I-COGC shall
               request correction of non-conforming conditions affecting the
               Satellite in writing ("LRR Correction Notice"). Hughes shall
               promptly correct the non-conforming conditions referred to
               therein

                                    Page 53
<PAGE>   54

               and, promptly following such correction, shall notify I-COGC that
               the corrections have taken place and shall invite I-COGC to send
               representatives to attend an inspection at which they will be
               entitled to verify that such corrections have been satisfactorily
               made. The provisions of this ARTICLE 8.4 shall thereafter apply
               mutatis mutandis to that inspection as if that inspection was the
               original Launch Readiness Review.

8.6     For the purposes of ARTICLES 3.2 and 11, CONSEQUENCES OF LATE DELIVERY,
        in the event that I-COGC serve a valid LRR Correction Notice upon
        Hughes:

        A.     Delivery of the relevant Satellite shall be deemed to have
               occurred only upon Final Acceptance; and

        B.     for the purposes of calculating any amounts payable pursuant to
               ARTICLE 11, CONSEQUENCES OF LATE DELIVERY:

               1.     No account shall be taken of the period from actual
                      physical arrival of the relevant Satellite at its
                      Designated Launch Site, subject to a visual inspection by
                      I-COGC to ensure that there is no apparent physical loss
                      or damage and that the Satellite is available for
                      commencement of the launch campaign, until (and including)
                      the date of a valid LRR Correction Notice relating to that
                      Satellite; and

               2.     the obligation to pay liquidated damages shall terminate
                      on the Day that Final Acceptance of that Satellite occurs.

8.7     Prior to shipment of the GCE to the sites selected by I-COGC Hughes
        shall conduct a Pre-Shipment Review at the Hughes plant. The
        Pre-Shipment Review shall be

                                    Page 54
<PAGE>   55

        conducted in accordance with EXHIBIT A, STATEMENT OF WORK. Hughes shall
        provide I-COGC fifteen (15) Business Days notice of the Pre-Shipment
        Review.

        8.7.1  I-COGC shall direct Hughes to ship the GCE to the selected
               site(s) upon successful completion of the Pre-Shipment Review.
               The Pre-Shipment Review shall be deemed complete and preliminary
               acceptance occurs when the Parties agree that:

               A.     factory acceptance testing in accordance with EXHIBIT E,
                      GCE IMPLEMENTATION AND TEST PLAN, is complete;

               B.     all open actions have been closed or a closure plan agreed
                      by I-COGC;

               C.     all non-conformances have been corrected or dispositioned.

        8.7.2  I-COGC shall not withhold its preliminary acceptance of the GCE
               for minor non-conformances which Hughes demonstrates to I-COGC's
               reasonable satisfaction have no adverse effect upon the operation
               of the GCE in accordance with EXHIBIT F, GCE TECHNICAL
               SPECIFICATION.

8.8     Final Acceptance of the GCE shall occur upon successful completion of
        installation and checkout of the SCC at its installation site, TT&C
        equipment at the SAN site, an acceptance test of the complete GCE
        system, and closure of all action items from the Pre-Shipment Review.
        Provided however if there is a delay in installation and checkout due to
        unavailability of hardware or facilities not the responsibility of
        Hughes, and in particular if the beneficial occupancy dates for the SCC
        and SAN in accordance with the table in ARTICLE 29.1.A are not met by
        I-COGC, then there shall be a day for day adjustment to the Delivery
        Date for the GCE and I-COGC shall be responsible for any reasonable
        costs directly related to the delay.

                                    Page 55
<PAGE>   56

8.9     Final Acceptance of the Engineering Model Payload shall occur upon
        successful completion of the testing specified in the Engineering Model
        Payload Test Plan of EXHIBIT D, ACCEPTANCE TEST PLAN.

8.10    Final Acceptance of the Software Simulator (DSS) shall occur upon
        completion of the testing specified in EXHIBIT E, GCE IMPLEMENTATION AND
        TEST PLAN

8.11    No approvals given by I-COGC in respect of the Work, whether at any
        design review or other meetings or in respect of any testing or any
        documentation, or any concurrence with or acceptance of Hughes' actions
        in the performance of the Work, shall release or be deemed to release
        Hughes from its obligations to deliver Work in accordance with the
        requirements of the Contract.

8.12    If during any monitoring, review or inspection of Work in progress
        I-COGC discovers that any of the Work does not conform to the
        requirements of the Contract, then I-COGC shall so inform Hughes and
        Hughes will promptly respond with a corrective action plan to rectify or
        otherwise disposition said non-conformance. Hughes shall not be relieved
        from any contractual obligations should I-COGC fail to detect any such
        non-conformances.

        Should a dispute arise as to whether Work does or does not conform with
        the requirements of the Contract, or whether the plan for corrective
        action is adequate, then, unless otherwise agreed, the dispute shall be
        resolved in accordance with ARTICLE 30, DISPUTES AND ARBITRATION.

8.13    Final Acceptance of the Payload Control System shall occur upon
        successful completion of SAT as described in EXHIBIT K, PCS TECHNICAL
        SPECIFICATION AND TEST PLAN. I-COGC shall not withhold its acceptance of
        the PCS for minor

                                    Page 56
<PAGE>   57

        nonconformances which Hughes demonstrates to I-COGC's reasonable
        satisfaction to have no adverse effect upon the operation of the PCS in
        accordance with EXHIBIT K, PCS TECHNICAL SPECIFICATION AND TEST PLAN.

                                    Page 57
<PAGE>   58

ARTICLE 9      TITLE AND RISK OF LOSS

9.1     Title and risk of loss or damage to the Satellites to be delivered under
        this Contract shall pass from Hughes to I-COGC at the time of Launch of
        that Satellite(s) or upon expiration of the warranty period, whichever
        occurs earlier.

9.2     Notwithstanding the above, in the event that there is a Launch Attempt
        by the Launch Services Provider for any Satellite(s) such that the
        Launch Vehicle is shut-down and the launch activity is thereby
        terminated prior to lift-off, Hughes agrees to re-acquire risk of loss
        or damage for the affected Satellite, until the Intentional Ignition of
        the Launch Vehicle for the re-launch of that Satellite, subject to the
        following conditions:

        A.     Such transfer of risk of loss or damage back to Hughes from
               I-COGC shall not occur until the launch pad has been declared
               safe by the Launch Services Provider.

        B.     Such risk of loss or damage coverage then assumed by Hughes shall
               cover ground risks only which occur after the launch pad has been
               declared safe and prior to Intentional Ignition of the Launch
               Vehicle used for the re-launch of the Satellite. I-COGC shall
               then re-acquire risk of loss or damage for the affected Satellite
               at Intentional Ignition of the Launch Vehicle used for the
               re-launch.

        C.     Any damage sustained by the affected Satellite from the period of
               Intentional Ignition up to and including the point in time when
               the launch pad has been declared safe, shall be the sole
               responsibility of I-COGC.

                                    Page 58
<PAGE>   59

        D.     Any and all additional costs and expenses necessarily incurred by
               Hughes associated with this re-acquiring of risk of loss or
               damage, including but not limited to de-mating the Satellite from
               the Launch Vehicle, defueling operations, inspection and testing,
               refurbishment, storage, transportation, and additional launch
               operations effort for the re-launch of the Satellite, shall be
               the sole responsibility of I-COGC. Hughes shall use its
               reasonable endeavors taking into account all the circumstances to
               mitigate any such additional costs and expenses.

        E.     Additionally, in the event that Hughes' insurance capacity limit
               for the relevant launch site would be exceeded by the addition of
               an affected Satellite, I-COGC shall be responsible for Hughes'
               consequent additional insurance premium required to provide
               adequate coverage for that Satellite.

9.3     Not later than forty-five (45) Days before Launch of a Satellite, I-COGC
        shall request and Hughes shall provide a report within fifteen (15) Days
        of the insurance situation pertaining to the relevant Designated Launch
        Site. If such report indicates that Hughes believes that its insurance
        capacity limits will or may be exceeded for the relevant Designated
        Launch Site then the Parties will discuss the appropriate options. If
        requested by I-COGC, Hughes will use its reasonable efforts to obtain
        additional insurance capacity at I-COGC's cost. If Hughes cannot obtain
        the said additional coverage, then I-COGC will bear risk of loss or
        damage to the Satellite to the extent not covered by Hughes' existing
        insurance until and unless the Satellite is put into storage in
        accordance with ARTICLE 32, STORAGE or ARTICLE 33, OPTIONS.

9.4     In relation to that affected Satellite, in the event that the Launch
        Vehicle is shutdown again and the launch activities are thereby
        terminated prior to lift off, Hughes agrees to re-acquire risk for the
        affected Satellite, until the Intentional Ignition of the Launch

                                    Page 59
<PAGE>   60

        Vehicle for the re-launch of that Satellite, subject to the conditions
        set out in paragraphs A) to E) of ARTICLE 9.2 and also ARTICLE 9.3 (both
        of which shall apply mutatis mutandis to any subsequent attempted
        re-launch).

9.5     Title to and risk of loss or damage to all items to be delivered under
        this Contract other than Satellites and Documentation, shall pass from
        Hughes to I-COGC at the time of Final Acceptance by I-COGC in accordance
        with ARTICLE 8, ACCEPTANCE save for title to the GCE which shall pass
        from Hughes to ICO GLOBAL COMMUNICATIONS HOLDINGS B.V. at the time of
        Final Acceptance by I-COGC of the GCE in accordance with ARTICLE 8.8.

9.6     Title and risk of loss to all Documentation shall pass to I-COGC at the
        time of Delivery, save that intellectual property rights in
        Documentation shall be dealt with in accordance with the provisions of
        ARTICLE 18, DATA RIGHTS.

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<PAGE>   61

ARTICLE 10     FORCE MAJEURE

Notwithstanding any other provisions of this Contract, in the event Hughes or
its Associates performing Work under the Contract are delayed by act of God, or
of the public enemy, fire, flood, epidemic, quarantine restriction, or lockout,
strike, walkout, (other than those solely affecting Hughes' or its Associates'
workforce) or freight embargo, acts of Government, including but not limited to
the Government of the United States, (including the refusal, suspension,
withdrawal, or non-renewal of export or import licenses essential to the
performance of the Contract not caused by Hughes or its Associates) whether in
its sovereign or contractual capacity, or any other event which is beyond the
reasonable control and without the fault or negligence of Hughes and its
Associates performing any part of the Work, then such event shall constitute an
"Excusable Delay". In the event of an Excusable Delay, there shall be an
equitable adjustment to the time for the performance of the affected obligations
under this Contract provided that Hughes informs I-COGC immediately of the
occurrence of the event giving rise to the Excusable Delay and provides I-COGC
within seven (7) Business Days of the date of such notice with a detailed
description of the performance affected by such event as well as such Hughes'
plans for minimizing the effects of such event upon the performance of its
obligations under the Contract. In all cases Hughes shall use reasonable efforts
to avoid or minimize such delay.

In the event the Excusable Delay condition continues beyond six (6) Months,
I-COGC shall have the right to terminate the Contract in accordance with ARTICLE
17.1, TERMINATION FOR I-COGC'S CONVENIENCE, except that there shall be no
payment to Hughes for lost profit on the uncompleted Work.

                                    Page 61
<PAGE>   62

ARTICLE 11     CONSEQUENCES OF LATE DELIVERY

11.1    A.     In the event that the second Satellite (F2) to be delivered for
               Launch or placement into storage hereunder is not delivered on or
               before its Delivery Date, then, on the     *       Day after such
               scheduled Delivery Date, Hughes shall pay I-COGC   *   . Starting
               with the    *    Day after such scheduled Delivery Date, for
               a period not to exceed         *         Days, Hughes
               shall pay I-COGC   *   for each Day the second Satellite (F2) is
               late, up to a maximum cumulative total for F2 of   *   .

        B.     In the event the fifth Satellite (F5) to be delivered for Launch
               or placement into storage hereunder is not delivered on or before
               its Delivery Date, then, on the      *      Day after such
               scheduled Delivery Date, Hughes shall pay I-COGC   *   . Starting
               with the      *     Day after such scheduled Delivery, for a
               period not to exceed         *         Days, Hughes
               shall pay I-COGC   *   for each Day the fifth Satellite (F5) is
               late, up to a maximum cumulative total for F5 of   *   .

        C.     In the event that the eighth through twelfth Satellites (F8
               through F12) to be delivered for Launch or placement into storage
               hereunder are not delivered on or before their respective
               Delivery Dates, then, commencing on the Day after such scheduled
               Delivery Date, for a period not to exceed two hundred and seventy

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                   Page 62

<PAGE>   63
               (270) Days, Hughes shall pay   *   for each Day the eighth,
               ninth, tenth, eleventh, or twelfth Satellite (F8-F12) is late, up
               to a maximum amount of   *   each and a maximum cumulative total
               of   *   for all five (5) Satellites.

        D.     If a           *            entered into by the Parties and
               Hughes is in the       *        , then system delivery liquidated
               damages in the amount of * will be allocated to events and
               criteria to be defined and mutually agreed to by the Parties by
               the execution of such  * contract (and, if the Parties are unable
               to agree, the dispute resolution process specified in Article 30,
               Disputes an Arbitration will apply). If such     *    contract is
               entered into, liquidated damages provided in Article 11.1.B will
               be reduced proportionately from   *   to   *   . Notwithstanding
               any other provision in this Contract, the foregoing system
               delivery liquidated damages will be payable if the corresponding
               system delivery event has not occurred (regardless of the reasons
               for any failure of such event to occur).        *

        E.     In the event the thirteenth through fourteenth Satellites
               (F13-F14) to be delivered for Launch or placement into storage
               hereunder are not delivered on or before

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 63
<PAGE>   64
               their respective Delivery Dates, then, on the   *   Day after
               such scheduled Delivery Date, Hughes shall pay I-COGC   * for
               each F13 through F14 Satellite that is late. Starting with the
               *   Day after such scheduled Delivery, for a period not to exceed
               *   , Hughes shall pay I-COGC   *   for each Day the F13 through
               F14 Satellites are late, up to a maximum amount of   *   each and
               a maximum cumulative total of   *   for both Satellites.

        F.     In the event the F15 Satellite to be delivered for Launch or
               placement into storage hereunder is not delivered on or before
               its respective Delivery Date, then, commencing on the *  Day
               after such scheduled Delivery Date, for a period not to exceed
               one hundred and fifty (150) Days, Hughes shall pay   * for each
               Day the fifteen Satellite (F15) is late, up to a maximum amount
               of   *   .

        G.     In the event that any of the F16 through F20 Satellites are
               procured under ARTICLE 33 OPTIONS by I-COGC to be delivered for
               Launch or placement into storage hereunder and is not delivered
               on or before its Delivery Date, then, commencing on the *  Day
               after such scheduled Delivery Date, for a period not to exceed
               *   Days, Hughes shall pay   *   for each Day that any of the F16
               through F20 Satellites are late, up to a maximum amount of   *
               per

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 64
<PAGE>   65
               Satellite and a cumulative maximum total of   *   for all five
               Satellites.

               Therefore, the maximum aggregate liquidated damages payments
               under this ARTICLE 11 shall never exceed   *   for the firm
               Satellites; and, an additional   *   if all OPTION Satellites are
               exercised, for a cumulative maximum aggregate total liquidated
               damages of ONE HUNDRED THIRTEEN MILLION FOUR HUNDRED THOUSAND US
               dollars (US$113,400,000).

               Notwithstanding the above, if such late Delivery of the eighth
               through twelfth Satellites (F8-F12) does not cause the relevant
               Launch to be later than 3.5 Months after the Delivery Date, then
               any amounts paid by Hughes to I-COGC in respect of the affected
               Satellite(s) shall be refunded to Hughes within fifteen (15) Days
               of Launch.

               If any of the eighth through twelfth Satellites (F8-F12) is
               delivered into storage for I-COGC's convenience on a date which
               is less than 2.5 Months after the Delivery Date, then any amounts
               paid by Hughes to I-COGC in respect of the affected Satellite(s)
               shall be refunded to Hughes within forty-five (45) Days of
               placement into storage.

11.2    As used in this Contract, the designations of Satellite F1 through F12
        shall be considered for reference purposes only. For purposes of
        assessment of liquidated damages, each Satellite delivered shall be
        designated the numerical designation relative to the actual Delivery
        Date, i.e., if the Satellite F4 is actually the second Satellite

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 65
<PAGE>   66

        delivered to the Designated Launch Site or storage it would be deemed F2
        even though its reference designation was F4. Hughes is entitled to
        Deliver any Satellite in any order regardless of reference designation
        provided that each Satellite complies with the applicable Delivery Date.
        If the Satellite designated for protoflight testing (nominally the first
        Satellite through environmental test) is not the first Satellite to be
        delivered, then such protoflight testing shall be successfully completed
        before any Satellite may be launched.

11.3    If a Satellite is put into storage because the Launch is delayed for
        other than I-COGC's convenience, then Hughes shall bear all related
        costs of such storage, including but not limited to actual storage
        costs, program stretch out costs, post-storage retest costs, and any
        costs relating to deployment of crews and/or Satellite shipment, until
        such time as the Satellite and Launch Vehicle are ready for a Launch.

11.4    Notwithstanding anything to the contrary, Delivery of the first
        Satellite will not be deemed to have occurred until Final Acceptance of
        the GCE has occurred. Additionally, Delivery of the second Satellite
        cannot occur prior to Delivery of the first Satellite. However, if
        payments for late delivery are incurred through this ARTICLE 11.4 solely
        due to late Final Acceptance of the GCE, then account shall be taken of
        any adjustments to the GCE Delivery Date.

11.5    The Parties agree and declare that any payments for late delivery
        payable in accordance with this ARTICLE 11 and where applicable subject
        to ARTICLE 8.6, shall constitute full and final settlement (and shall
        therefore be in lieu of all other claims for damages, actual or
        consequential or otherwise) for all claims howsoever arising resulting
        from the late delivery of any Satellite, other than as provided in
        ARTICLE 17, TERMINATION, and ARTICLE 11.3 and the amount payable in
        accordance with this ARTICLE 11 shall constitute liquidated damages
        which the Parties believe and declare,

                                    Page 66
<PAGE>   67

        represent a genuine pre-estimate of all losses suffered by reason of any
        such late delivery and are not, therefore, penalties.

11.6    I-COGC may elect to set off any amounts then due and payable by I-COGC
        under this Contract against any amounts payable by Hughes to I-COGC
        pursuant to this ARTICLE. In the event I-COGC alternatively elects to
        have Hughes make payment under this ARTICLE such payment shall be due
        within 30 Days of receipt by Hughes of a valid invoice from I-COGC. For
        billing purposes to Hughes, I-COGC shall aggregate amounts owed on a
        monthly basis.

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ARTICLE 12     ACCESS TO WORK IN PROGRESS AND DATA

12.1    Hughes shall provide I-COGC and its Consultant(s) reasonable access to
        all Work, related data and documentation being performed under this
        Contract (including observation of tests in accordance with the
        requirements of EXHIBIT D, ACCEPTANCE TEST PLAN), such that I-COGC may
        fully and effectively monitor the progress of the Work and its
        compliance with the requirements of this Contract at Hughes' facilities
        provided that such access does not unreasonably interfere with such Work
        and access to Work is coordinated with the Hughes Program Manager or
        designated alternative(s). Hughes may, at its reasonable discretion,
        deny access to persons who are employed by or affiliated with a company
        manufacturing satellites or major subsystems for satellites. Such access
        shall be in compliance with Hughes' security requirements, and United
        States law. I-COGC and its Consultant(s) shall also be afforded such
        access to the Major Subcontractors' facilities pursuant to ARTICLE 36,
        MAJOR SUBCONTRACTORS and also Subcontractors' facilities to the extent
        that Hughes is permitted to provide such access, subject to I-COGC
        providing sufficient notice to Hughes so as to assure that if desired by
        the Hughes Program Manager, Hughes personnel can accompany I-COGC and
        its Consultant(s) on any such visit.

12.2    I-COGC and/or its Consultant(s) visiting Hughes facilities (a) will
        abide by Hughes' security regulations and applicable US Government
        regulations; and (b) will not use or disclose except as provided in
        ARTICLE 18, DATA RIGHTS, ARTICLE 20, RIGHTS IN INVENTIONS, and ARTICLE
        21, CONFIDENTIALITY to a third party any information received in
        connection with the access provided hereunder.

12.3    For purposes of access, I-COSL and ICO-Teledesic Global Limited, their
        respective Affiliates and successors of the foregoing shall be
        considered the same as I-COGC.

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<PAGE>   69

12.4    I-COGC shall be provided adequate office space so as to accommodate the
        I-COGC on-site monitoring team (approximately ten people) as is more
        particularly described in EXHIBIT A, STATEMENT OF WORK.

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ARTICLE 13     INDEMNIFICATION

13.1    Each Party shall indemnify and hold harmless the other Party and its
        Associates, (or any of them) from any loss, damage, liability or
        expense, resulting from damage to all property and personal injury,
        including death, arising out of or based upon any occurrence prior to
        arrival at the Designated Launch Site to the extent caused by a
        negligent act or omission of the indemnifying Party or its Associates in
        the performance of the Work and at the indemnifying Party's expense
        shall defend any suits or other proceedings brought against the
        indemnified Party and/or its Associates (or any of them) on account
        thereof, and satisfy all judgements which may be incurred by or rendered
        against them, or any of them, in connection therewith.

13.2    Notwithstanding the foregoing, each Party ("the Indemnifying Party")
        will indemnify the other Party for any loss or damage to the
        Indemnifying Party's property or death or personal injury to the
        Indemnifying Party's personnel whilst on the premises of either Party
        provided however that the first US$100,000 of any such loss, damage,
        death or personal injury shall be dealt with in accordance with ARTICLE
        13.1.

13.3    Prior to the time that either Party or its Associates enter the
        Designated Launch Site, (and as a precondition of such entry) each Party
        shall ensure that they and their respective relevant Associates shall
        sign a no-fault, no-subrogation inter-party waiver of liability
        consistent with that between the Launch Services Provider and Hughes.

13.4    In the event that either I-COGC or Hughes fails to obtain the aforesaid
        inter-party waiver of liability from their respective Associates, then
        I-COGC and Hughes shall indemnify and hold each other harmless from
        claims brought by the other Party or its Associates for damage to any
        such persons'

                                    Page 70
<PAGE>   71

        property or injury to, or death of, any such persons' employees in
        connection with launch operations at the Designated Launch Site. For
        these purposes, Hughes or its Affiliates or any of its subcontractors or
        employees or agents performing work under the interelated contract for
        Launch Services referred to in the Recitals shall not be deemed to be an
        Associate of I-COGC for the purposes of this Contract.

13.5.   Notwithstanding any other provision of this Contract, but without
        prejudice to any indemnities or insurance coverage as may be provided by
        Launch Services Providers under the interrelated contract for Launch
        Services referred to in the Recitals, I-COGC shall indemnify and hold
        harmless Hughes and its Associates from any liabilities, losses and
        damages including but not limited to those based on negligence,
        including any costs, expenses and damages whatsoever incurred by Hughes
        in defending, or assisting I-COGC in its defense, against any and all
        third party claims, including but not limited to, I-COGC's customer(s)
        or an agency of any Government with whom I-COGC shall have any
        obligation related to the Satellites, arising after Launch Attempt of a
        Satellite, and I-COGC shall obtain waivers of subrogation rights against
        Hughes and its Associates from I-COGC's insurers if any.

        This indemnity shall not apply to Hughes or its Associates to the extent
        that they make a claim against I-COGC as a direct or indirect customer
        of I-COGC and shall not apply to any intellectual property-related
        claims, which are instead intended to be the subject of Article 19,
        Intellectual property Indemnity.

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ARTICLE 14     WARRANTY

14.1    Notwithstanding any prior inspection or acceptance, Hughes warrants in
        respect of the Work that all equipment (including, but not limited to,
        the Satellite) shall be free from defects in materials or workmanship
        and all services shall be performed in a professional and workmanlike
        manner consistent with generally accepted custom and practice in the
        industry and further that all equipment and services shall conform to
        the specifications and other technical requirements of the Contract.

14.2    I-COGC shall have the right at any time during the period of this
        warranty to require that any Work not conforming to the above warranty
        be promptly corrected or replaced (at Hughes' option after taking into
        account any of the representations by I-COGC and at Hughes' expense)
        with conforming Work. If Hughes fails to correct or replace such
        defective Work within a reasonable period after notification from
        I-COGC, I-COGC may elect, in lieu of its other rights and remedies, to
        require Hughes to repay such portion of the Contract Price and/or make
        such modifications to the performance incentive scheme as are equitable
        under the circumstances in lieu of repairing or replacing such defective
        Work.

14.3    This warranty with respect to a Satellite, (but excluding any Satellite
        batteries) shall begin upon Final Acceptance of the Satellite and shall
        run for a period of five (5) years, or until Launch, whichever is
        earlier.

14.4    The Satellite batteries are warranted for 36 Months after cell
        activation. This Satellite battery warranty may be extended to 54 Months
        by resetting the battery precharge, as long as direction is received
        from I-COGC to perform this reset no later than 30 Months after
        activation.

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<PAGE>   73

14.5    With respect to GCE, Software Simulator (DSS), and Engineering Model
        Payload, this warranty shall begin upon Final Acceptance and shall run
        for a period of two years therefrom.

14.6    For the avoidance of doubt, nothing herein shall limit Hughes'
        obligations as stated in ARTICLE 28, CORRECTIVE MEASURES IN UNLAUNCHED
        SATELLITES nor limit I-COGC's rights to be repaid monies pursuant to
        ARTICLE 5, SATELLITE PERFORMANCE PAYMENTS.

14.7    With respect to the PCS, this warranty shall begin upon Final Acceptance
        and shall run for a period of one year therefrom; except for the PCS
        baseband equipment which shall have a ten (10) month warranty period.

                                    Page 73
<PAGE>   74

ARTICLE 15     SATELLITE NOT LAUNCHED AFTER AVAILABLE FOR SHIPMENT DATE

15.1    A Satellite which is not shipped to the Designated Launch Site following
        agreement that the Satellite is Available for Shipment shall be stored
        by Hughes pursuant to ARTICLE 32, STORAGE or ARTICLE 33, OPTIONS.

        Upon receipt by Hughes of a written request from I-COGC at least six (6)
        Months prior to the applicable rescheduled launch date, Hughes shall
        remove the Satellite from storage and based upon an on-site inspection,
        ship it to either the Designated Launch Site or the Hughes facility for
        inspection, test and refurbishment if required. If Hughes receives less
        than six Months notice of a re-scheduled launch date, it shall
        nevertheless use its commercially reasonable efforts to meet I-COGC's
        schedule requirements. The Parties will determine which destination is
        more appropriate under the then existing circumstances. All the costs of
        any such inspection, test and refurbishment shall be included in the
        prices for storage in ARTICLE 32, STORAGE or ARTICLE 33, OPTIONS.

15.2    If a Satellite has not been launched within five (5) years after its
        Available for Shipment date and Hughes is otherwise not in default,
        Hughes shall be entitled to receive all payments which are due and
        owing, any Satellite Performance Incentive payments not yet due shall be
        deemed earned and owed, and Hughes shall be entitled to retain without
        obligation all payments previously made with respect to that Satellite.
        Neither Party shall have any further obligations to the other Party
        under this Contract with respect to that Satellite, provided that I-COGC
        and Hughes have met their obligations under this Contract with respect
        to that Satellite, and I-COGC shall have title to the Satellite.
        Disposition of the Satellite shall be at the option of I-COGC, subject
        to U.S.

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<PAGE>   75

        Government export controls, with such costs to be borne by I-COGC.
        Hughes shall have no liability in the event an export license is not
        issued for the benefit of I-COGC. In this event, Hughes shall assist
        I-COGC by using its reasonable endeavors in locating an alternative
        buyer for the affected Satellite for which an export license may be
        obtained.

15.3    If the Satellite is not launched within one hundred eighty (180) Days
        from its Available for Shipment date other than due to the fault of
        Hughes or due to Excusable Delay, Final Acceptance will be deemed to
        have occurred at such time.

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ARTICLE 16     TAXES AND DUTIES

16.1    Hughes shall be responsible for all United States federal and state
        taxes which are levied upon Hughes or its Affiliates in connection with
        the Work, excluding any sales tax on property or services delivered to
        I-COGC.

16.2    Hughes shall also be responsible for all non-U.S. taxes assessed upon
        Hughes or its Affiliates except any future non-U.S. income tax, value
        added tax, sales tax, personal, withholding or business tax, or goods
        and services tax, duties, or other governmental assessments which are
        levied on Hughes or its Affiliates in connection with the Work related
        to the launching of the Satellite(s) from the Designated Launch Site(s)
        and except for all present and future taxes etc. as aforesaid for Work
        related to installation, checkout and testing of the GCE and PCS at the
        selected installation site(s).

        However, should any such taxes be the result of an incremental increase
        in any pre-existing Hughes tax obligation, I-COGC shall be responsible
        only for such incremental increase. Further, should Hughes utilize an
        Affiliate to perform Work at the Designated Launch Site or at the
        selected installation site, then I-COGC shall not be responsible for any
        taxes which would not have been levied on Hughes if Hughes had performed
        said Work.

        Should any taxes paid or reimbursed by I-COGC under the Contract
        eventually be subject to tax equalization by reimbursement to Hughes
        from a governmental entity or otherwise, Hughes shall repay I-COGC an
        equivalent amount.

        I-COGC shall not be liable for any personal taxation incurred by
        employees of Hughes or its Affiliates, but shall pay to Hughes an amount
        equal to the additional compensation

                                    Page 76
<PAGE>   77

        paid by Hughes or its Affiliates to such employees as compensation for
        such incremental taxes incurred by such employees as part of its normal
        compensation package for employees while performing Work at the
        Designated Launch Site or selected installation site. Provided further
        that I-COGC shall not be responsible for any element of said
        compensation package in respect of the Designated Launch Site, except to
        the extent it is increased to take account of future taxation.

16.3    Hughes shall consult with I-COGC or its designated Consultant(s) on any
        taxes or duties which may be the responsibility of and payable by I-COGC
        under ARTICLE 16.1 and 16.2 above. In the event any of the items in
        ARTICLE 16.1 and 16.2 above, for which I-COGC is responsible, are levied
        upon Hughes or its Affiliates, or employees, Hughes shall immediately
        notify I-COGC of such requirement. I-COGC, within fifteen (15) Business
        Days of receipt of such notification from Hughes, shall either have the
        charges waived or pay the charges to Hughes. For those items in ARTICLE
        16.1 and 16.2 that Hughes is required by law to pay immediately, I-COGC
        shall reimburse Hughes the full amount of the charges in a manner which
        leaves Hughes net of all such charges within fifteen (15) Days of
        I-COGC's receipt of Hughes' valid invoice. The reimbursement request
        will be accompanied by evidence of the amount and purpose of such
        payments.

        In any event, provided Hughes or its Affiliates have appropriate legal
        standing, I-COGC may direct Hughes to file any appropriate protests or
        appeals with the applicable governmental agency. I-COGC agrees to
        reimburse Hughes for all costs incurred as a result of such protest or
        appeal and also for any resultant taxes that Hughes is required to pay.

16.4    For the avoidance of doubt, I-COGC is not responsible for any taxes,
        fees, or duties as they relate to any Work performed by Subcontractors
        of Hughes.

                                    Page 77
<PAGE>   78

16.5    This ARTICLE shall survive the expiration, completion, or termination of
        this Contract.

                                    Page 78
<PAGE>   79

ARTICLE 17     TERMINATION

17.1    Termination for I-COGC's Convenience

A.      I-COGC may, upon written notice to Hughes, at any time terminate in
        whole or in part the Work with respect to this Contract in accordance
        with the terms set forth below, and Hughes shall immediately cease Work
        in the manner and to the extent specified. Notwithstanding the
        foregoing, in no event shall there be a Termination for Convenience for
        a Satellite after said Satellite has been launched.

B.      Upon receipt of a notice of termination, as provided in ARTICLE 17.1.A
        above, Hughes shall take the following actions:

        1.     stop Work under this Contract on the date and to the extent
               specified in the notice of termination;

        2.     place no further orders, subcontracts for materials, services, or
               facilities, except as may be necessary for completion of such
               portion of the Work as is not terminated;

        3.     terminate orders and subcontracts to the extent that they relate
               to the performance of Work terminated by the notice of
               termination;

        4.     settle all outstanding liabilities and all claims arising out of
               such termination or orders, subcontracts for materials, services,
               or facilities;

        5.     take such action as may be necessary, or as I-COGC may direct,
               for the protection and preservation of the property related to
               this Contract which is in the possession of Hughes or any
               Subcontractor and in which I-COGC has or may acquire an interest.

                                    Page 79
<PAGE>   80

C.      Within ninety (90) Days or longer (as determined by Hughes) after
        determination by Hughes of the cost of all Work terminated, Hughes shall
        submit to I-COGC its termination claim consisting of the costs of all
        Work done up to the date of termination, including pre-payments which
        are non-refundable to Hughes, and including the settlement and other
        costs connected with the termination. Settlements with the Major
        Subcontractors identified in ARTICLE 36, MAJOR SUBCONTRACTORS and such
        other subcontractors having a subcontract hereunder with a value
        exceeding U.S.$30,000,000, shall be made with the approval of I-COGC
        with such approvals not to be unreasonably withheld or unduly delayed.
        The term "costs" as used herein includes but is not limited to direct
        costs and indirect costs (including general and administrative expense),
        which have been posted to Hughes' books of account in accordance with
        the standard accounting practice for commercial contracts, consistently
        applied. In addition to these incurred costs, such termination claim
        shall include, and I-COGC shall be obligated to pay, a profit of nine
        percent (9%) on such costs. I-COGC shall also pay 1.8% profit on the
        uncompleted Work which is terminated. The termination claim shall give
        credit for all amounts already paid by I-COGC to Hughes in respect of
        the terminated Work. In no event shall a termination settlement
        (including such credit for amounts already paid by I-COGC) exceed the
        Contract Price inclusive of performance incentives.

D.      Each termination claim shall be accompanied by a certificate signed by
        the Controller of Hughes stating that the claim properly includes the
        costs incurred by Hughes in connection with the Work terminated. In the
        event I-COGC desires independent verification of the claim, it may
        request to have Hughes' independent Certified Public Accountants (CPA)
        audit the costs incurred by Hughes and report to the Parties. Such audit
        shall be subject to ARTICLE 30, DISPUTES AND ARBITRATION, save that, if
        the costs determined by such report exceed the amount of Hughes'
        termination claim, I-COGC shall only be obliged to pay the amount of
        Hughes' termination claim.

                                    Page 80
<PAGE>   81

E.      I-COGC shall within thirty (30) Days pay to Hughes for any termination
        for convenience hereunder the amount claimed by Hughes unless I-COGC
        requests verification by Hughes' independent CPA. In the event
        verification is requested, I-COGC shall place the amount claimed by
        Hughes into an interest-bearing escrow account at Bank of America,
        Concord, California, within thirty (30) Days after receipt of a valid
        invoice. Within thirty (30) Days after an agreed resolution of the
        dispute or resolution in accordance with ARTICLE 30, DISPUTES AND
        ARBITRATION I-COGC shall cause to be released from such escrow account,
        such amount agreed due or determined due to Hughes in accordance with
        ARTICLE 30, DISPUTES AND ARBITRATION together with interest on such
        amount; and the costs and fees of such escrow account shall be borne by
        each Party in inverse proportion to the amounts received by each party.
        I-COGC shall be responsible for all non-Hughes costs associated with any
        audit of Hughes' termination claim, unless such audit determines a
        discrepancy in I-COGC's favor in excess of five (5) percent or more of
        the total claim value; in this latter case Hughes shall bear said audit
        costs.

F.      Title to all items of Work, which would have been incorporated into a
        deliverable item under this Contract, and which are in progress before
        the giving of notice under ARTICLE 17.1.A above, shall, upon payment in
        full of all amounts due hereunder, vest in I-COGC, and Hughes shall
        deliver, FOB Hughes plant El Segundo, California, subject to US Export
        Regulations for which Hughes has no liability in the event of failure to
        obtain stated export authorizations (other than due to Hughes' fault or
        negligence), all such items to I-COGC who shall remove such items. All
        such items of Work which are under the custody or control of Hughes
        shall until delivery to I-COGC be insured by Hughes at its cost and risk
        therein shall pass to I-COGC on such delivery.

G.      If in Hughes' sole judgment it is feasible for Hughes to utilize any
        items of terminated Work, it shall submit to I-COGC an offer to acquire
        such items. If such offer is accepted, Hughes' termination claim shall
        be credited with the agreed acquisition price. Hughes

                                    Page 81
<PAGE>   82

        shall have no obligation to use any of the Work in any other project or
        for any other customer and any decision to do so shall be made at
        Hughes' sole discretion.

H.      Hughes shall place subcontracts for Major Subcontractors, and shall use
        reasonable efforts for other Subcontractors, to place subcontracts on
        terms that will enable Hughes to terminate in a manner consistent with
        this ARTICLE.

I.      Upon a partial termination, Hughes may equitably reprice the Work not
        terminated and the Contract Price shall be adjusted accordingly. For
        purposes of this ARTICLE, the word "equitably" shall mean that the
        repricing must be based upon, and that Hughes can demonstrate to I-COGC,
        that the partial termination for convenience caused such price increase
        and that the repricing reflects the actual increased prices. Two
        examples, among many potential situations, where repricing would be
        deemed to be equitable under this ARTICLE are; (1) where certain
        non-recurring costs have been spread over a certain number of Satellites
        and that number had now been decreased through termination, the
        repricing would respread the non-recurring over the lesser number of
        Satellites remaining; and (2) the prices of certain Subcontractors'
        goods and services have been increased to Hughes on a per unit basis
        retroactively based on the decreased quantity buy.

                                    Page 82
<PAGE>   83

17.2    Termination for Hughes' Default

A.      I-COGC may issue a written notice of default (the "Default Notice") to
        Hughes if:

        1.     Subject to the prior operation of the provisions of ARTICLE 11,
               CONSEQUENCES OF LATE DELIVERY as modified by ARTICLE 17.2.A(3),
               hereof, any of the following Satellite(s) is not delivered by a
               date which is nine (9) Months after the date specified in ARTICLE
               3, DELIVERY SCHEDULE, as such date may be adjusted by ARTICLE 10,
               FORCE MAJEURE, or as otherwise mutually agreed for such
               Satellite(s):

                      (a)  F2

                      (b)  F7

                      (c)  F8, F9, F10, F11, F12, F13, F14, F15 and, if
                           exercised, any of F16-F20; or

        2.     Hughes shall (A) commence a voluntary case under the US
               Bankruptcy Code (as now or hereafter in effect) (the "Code"); (B)
               file a petition seeking to take advantage of any other laws,
               domestic or foreign, relating to bankruptcy, insolvency,
               reorganization, winding up or composition or adjustment of debts;
               (C) consent to or fail to contest in a timely and appropriate
               manner any petition filed against it in an involuntary case under
               the Code or other laws or such a case shall not have been
               dismissed or stayed within thirty (30) days of the filing of the
               petition commencing the same; (D) apply for, or consent to, or
               fail to contest in a timely and appropriate manner, the
               appointment of, or the taking of possession by, a receiver,
               custodian, trustee, liquidator or the like of itself or of a
               substantial part of its assets, domestic or foreign; (E) admit in
               writing its inability to pay, or generally not be paying its
               debts (other than those that are the subject of a bona fide
               disputes) as they become due; (F) make a general assignment for
               the benefit of creditors; or (G) Hughes or the Hughes Parent
               Company sells,

                                    Page 83
<PAGE>   84

               transfers or otherwise disposes of all or substantially all of
               its assets (other than for full consideration) and as a result
               the Parent Company Guarantee provided by Hughes is prejudiced
               and adequate security, in a form reasonably acceptable to
               I-COGC, is not additionally provided; or (H) take any action for
               the purpose of effecting any of the foregoing; or (I) a case or
               other proceeding shall be commenced against Hughes in any court
               of competent jurisdiction seeking (i) relief under the Code or
               under any other laws, domestic or foreign, relating to
               bankruptcy, insolvency, reorganization, winding up or adjustment
               of debts; or (ii) the appointment of a trustee, receiver,
               custodian, liquidator or the like of Hughes or of all or any
               substantial part of its assets, domestic or foreign and such
               case or proceeding shall continue undismissed or unstayed for a
               period of 30 days, or an order granting the relief request in
               such case or proceeding (including, but not limited to, an order
               for relief under the Code) shall be entered;

        3.     Notwithstanding the provisions of ARTICLE 11, CONSEQUENCES OF
               LATE DELIVERY, it is demonstrable by I-COGC that Hughes will be
               unable to deliver any of the following Satellites F2, F7, F8, F9,
               F10, F11, F12, F13, F14, or F15 or, if exercised, any of F16-F20
               by a date which is nine Months after the relevant date specified
               in ARTICLE 3, DELIVERY SCHEDULE, as such date may be adjusted by
               ARTICLE 10, FORCE MAJEURE, or as otherwise agreed by the Parties.
               The determination of Hughes ability to deliver any Satellite
               within the applicable time period will be subject to dispute in
               accordance with ARTICLE 30, DISPUTE AND ARBITRATION.

B.      I-COGC's service of a Default Notice on Hughes shall operate to
        terminate this Contract forthwith in whole or in part with respect to
        the Work which is in default under ARTICLE 17.2.A, as I-COGC shall
        elect. In the event I-COGC terminates this Contract, or any part
        thereof, as provided in ARTICLE 17.2.A, then the Contract Price stated
        in ARTICLE 4.1 will be adjusted downward as follows:

                                    Page 84
<PAGE>   85

        1.     If the Contract is terminated in whole, then all payments made to
               Hughes under this Contract are immediately refundable and no
               further payments will be due to Hughes.

        2.     If the Contract is terminated in part, then the total Contract
               Price shall be reduced by the price of the Work terminated. That
               price shall be (a) for all Work other than Satellites F8-F12, the
               price determined by I-COGC. Such determination shall be subject
               to dispute in accordance with ARTICLE 30, DISPUTES AND
               ARBITRATION; and (b) for any of Satellites F8-F12, as per the
               following tables:

<TABLE>
<CAPTION>
                                    Contract Price Reduction
                             Item(s) Terminated       Per Satellite
                             --------------------------------------
                             <S>                      <C>
                             Satellite F8                   *
                             Satellites F9-F12              *
</TABLE>

               Within 30 Days of receipt of the aformentioned termination
               notice, Hughes shall refund to I-COGC the difference, if any,
               between the revised total Contract Price and the total amount of
               the payments received by Hughes under the Contract.

               In addition to the Contract Price reduction and refund described
               above, I-COGC shall be entitled, at its option, to either:

               1.     receive a payment of its excess direct costs of
                      reprocurement of the terminated Work to materially similar
                      specifications up to a maximum amount of forty percent
                      (40%) of the price of the terminated Work; or

               2.     receive, if I-COGC elects not to reprocure, payment of
                      interest on the amount refunded at LIBOR. Under a full
                      termination, interest shall be calculated on each payment
                      made by I-COGC from the date of payment to the date of the
                      termination. Under a partial termination, such interest

                * Confidential Treatment Requested and the Redacted Material has
                been separately filed with the Commission.

                                    Page 85
<PAGE>   86

                      shall be calculated as if the amount refunded for each
                      Satellite terminated hereunder had been paid to Hughes in
                      a lump sum on a date sixteen (16) Months before the
                      Delivery Date specified for that Satellite in ARTICLE 3,
                      DELIVERY SCHEDULE, as such date may be adjusted by ARTICLE
                      10, FORCE MAJEURE, or as otherwise mutually agreed for
                      such Satellite(s) provided always that interest shall not
                      be payable in respect of the refund for of any launched
                      Satellites which are terminated.

C.      In the event I-COGC terminates this Contract as provided in ARTICLE
        17.2.B, then, with the exception of launched Satellites, Hughes shall be
        entitled to retain title to any and all terminated Work, work in
        progress, parts, material, or other items used in the performance of
        this Contract, together with any associated warranties, and any
        subcontracted items which Hughes has specifically produced or acquired
        or entered into in accordance with this Contract.

D.      If, after termination of this Contract under the provisions of this
        ARTICLE 17.2, it is determined by arbitration or admitted in writing by
        I-COGC that Hughes was not in default under the provisions of this
        ARTICLE, or that the default was excusable under the provision of
        ARTICLE 10, FORCE MAJEURE, such termination shall be considered a
        termination for convenience of I-COGC and Hughes shall be paid in
        accordance with the calculations set forth in ARTICLE 17.1 hereof.

E.      The rights and remedies provided to I-COGC under this ARTICLE 17.2 shall
        be exclusive and in lieu of any other rights and remedies under this
        Contract or otherwise provided by law or in equity in relation to the
        termination of this Contract for Hughes' default of its obligations to
        perform the Work.

F.      Should I-COGC terminate the Contract after one or more Satellite(s) have
        been launched, and notwithstanding that I-COGC is refunded monies paid
        for such Satellite(s), then I-COGC shall retain title to such launched
        Satellite(s) which have been

                                    Page 86
<PAGE>   87

        terminated provided always that any net profits derived by I-COGC from
        such Satellite(s) shall be shared between Hughes and I-COGC in
        proportion to the monies refunded by Hughes in respect of the
        Satellite(s) and the monies expended by I-COGC for launch and insurance
        costs (as adjusted to take account of interest at LIBOR from the date of
        payment by I-COGC to the date of termination) until such time as Hughes'
        refund of monies has been defrayed.

G.      Prior to Delivery of F7, I-COGC may terminate previously delivered
        Satellites under this ARTICLE 17.2B and be repaid monies in respect
        thereof, but after Delivery of F7, delivered Satellites may not be
        terminated, and I-COGC shall not be entitled to be repaid monies in
        respect thereof.

H.      Notwithstanding the other provisions of this ARTICLE, a termination for
        Hughes' default shall not relieve the Parties of their obligations with
        respect to previously delivered Satellites which have not been
        terminated.

17.3    Termination for Default of I-COGC

A.      Hughes may terminate this Contract in whole upon written notice to
        I-COGC at any time after the occurrence of any of the following:

        1.     Failure of I-COGC to make any payment validly due to Hughes
               hereunder when due, provided such failure is not cured within a
               period of thirty (30) Days following receipt of written notice
               thereof from Hughes.

         2.    I-COGC passes a resolution for winding-up or a petition is
               presented for I-COGC's winding-up (unless such resolution or
               petition for winding up is pursuant to a scheme of corporate
               reconstruction or amalgamation and there is no adverse effect on
               the payment obligations to Hughes hereunder) and, unless granted,
               is not dismissed within thirty (30) Days from presentation; or
               I-COGC

                                    Page 87
<PAGE>   88

               becomes unable to pay its debts as they become due; or a receiver
               is appointed over all or a substantial part of I-COGC's assets
               and the appointment is not discharged within thirty (30) Days; or
               I-COGC or I-COGC's Parent Company sells, transfers, or otherwise
               disposes of all or the greater part of its assets (other than for
               full consideration) and as a result the Parent Company Guarantee
               provided by I-COGC is prejudiced and adequate security in a form
               reasonably acceptable to Hughes is not additionally provided.

B.      If a termination occurs under ARTICLE 17.3.A above, the termination will
        be treated as if a Termination for I-COGC's Convenience (ARTICLE 17.1)
        except that Hughes shall have the following additional rights:

        1.     I-COGC shall pay to Hughes the amounts specified in ARTICLE
               17.1.C, except that I-COGC shall pay three and six-tenths percent
               (3.6%) profit on the uncompleted Work.

        2.     Hughes shall have the right to immediately stop any Work, the
               delivery of which has not been completed.

        3.     For launched Satellites, all unpaid a) Satellite Performance
               Incentives Payments, b)   *   Incentive Payments, and c)
               Incentives   *   under ARTICLE 5, shall be deemed earned and
               immediately due and payable to Hughes. Such payments shall be
               calculated using the presumption that all Satellites would have
               continued to operate at the performance level in effect on the
               date preceding the date of termination, or if such termination
               occurred prior to establishing such level, then Satisfactory
               Operation shall be presumed.

C.      The rights and remedies provided to Hughes under this ARTICLE 17.3 shall
        be exclusive and in lieu of any other rights and remedies under this
        Contract or otherwise

                                    Page 88
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        provided by law or in equity in relation to the termination of this
        Contract for I-COGC's default of its obligations under this Contract.

                                    Page 89
<PAGE>   90

ARTICLE 18     DATA RIGHTS

18.1    Subject to the provisions of ARTICLE 21, CONFIDENTIALITY and ARTICLE 7,
        PERMITS AND LICENSES: GOVERNMENT APPROVALS, I-COGC shall have the
        royalty-free, world-wide, non-exclusive right to use and to have used by
        others:

        A.     the data delivered by Documentation under the Contract or data
               generated under the Contract for the I-CO Program; and

        B.     any other data furnished under the Contract required for the
               purposes of using, maintaining, operating, modifying and
               repairing the Work.

        I-COGC shall also have the right to make copies of the Documentation for
        its own use or for third parties granted rights to use under this
        ARTICLE; provided, however, that if any of the written Documentation is
        copyrighted by Hughes, Hughes does hereby grant to I-COGC a
        royalty-free, non-exclusive right and license under Hughes' copyrights
        to make such copies for the I-CO Program. With respect to all written
        Documentation that is copyrighted, I-COGC shall apply the appropriate
        copyright notice to all copies made thereof. All rights to Documentation
        not owned by Hughes or to which Hughes has no transmissible right of use
        now or hereafter are limited to the extent of Hughes' rights and
        interests therein.

                                    Page 90
<PAGE>   91

18.2    Notwithstanding any other provision hereof, the ownership and title to
        copyrights in computer programs, and their related Documentation,
        delivered to I-COGC by Hughes in accordance with this Contract shall
        remain in Hughes or its licensor. Hughes shall grant to I-COGC a paid-up
        non-exclusive non-transferable license solely for the I-CO Program to
        use and to have used by others and make additional copies of the
        deliverable computer programs and related documentation specified in the
        Contract and required for the I-CO Program.

18.3    Hughes agrees to grant to I-COGC, only for the subsequent generation
        follow-on programs for fixed and mobile communications, data, and
        ancillary services, a royalty-free license to make, have made, and use
        any component or invention developed primarily under this Contract. This
        license grant shall not apply to any component or invention developed
        before this Contract, or developed primarily with Hughes Internal
        Research and Development funds. Furthermore, this license does not
        include any rights to any drawings, schematics, manufacturing
        documentation or any other documentation of any kind, except that Hughes
        will provide a top level summary description which shall include the
        nature, purpose, operation and general physical characteristics of such
        component or invention.

                                    Page 91
<PAGE>   92

ARTICLE 19     INTELLECTUAL PROPERTY INDEMNITY

19.1    Hughes agrees to indemnify and defend at its own expense any claims,
        actions, or proceedings or request for royalty payments or any claims
        for equitable relief or damages against I-COGC based on an allegation
        that the manufacture of the Work under this Contract or the use, lease,
        or sale thereof infringes any intellectual property rights including,
        but not limited to, Letters Patent or trade mark, or any copyright, in
        the U.S. or place of manufacture or delivery of the Work where such
        infringement directly results solely from the manufacture, use, lease,
        or sale of the Work. In such event, Hughes agrees to pay any royalties
        and other costs related to the settlement of such request and to pay the
        costs and damages, including reasonable legal fees, finally awarded as
        the result of any suit based on such claim, provided that Hughes is
        given prompt written notice of such request or claims by I-COGC and
        given authority and such assistance and information as is available to
        I-COGC for resisting such request or for the defense of such claim. Any
        such assistance or information which is furnished by I-COGC at the
        written request of Hughes is to be at Hughes' expense. In no event shall
        Hughes' entire liability under this ARTICLE exceed ONE HUNDRED MILLION
        US Dollars (US$100,000,000.00) and the existence of one or more claims
        or lawsuits shall not extend this amount. Nothing in this Contract shall
        be construed as requiring Hughes to defend a suit or pay royalties,
        costs or damages if the infringement claim is based upon the
        manufacture, use, lease, or sale of any Work that has been modified,
        altered or used in combination with other components or systems to the
        extent the infringement would not have occurred but for such
        modification, alteration or combined use. If the use of any Work is
        enjoined in said suit, Hughes shall at its option and with the
        limitation of liability for damages stated above use best efforts to
        procure for I-COGC the right to use the Work or modify (such
        modification to comply with the requirements of the Contract) the same
        to render them non-infringing. Hughes shall have no liability or
        responsibility for incidental, special, or

                                    Page 92
<PAGE>   93

        consequential damages incurred by I-COGC save and insofar they are
        included in any claim by a third party for which I-COGC is indemnified
        under this ARTICLE 19.1.

19.2    I-COGC agrees to indemnify and defend at its own expense any claims,
        actions, or proceedings or request for royalty payments or any claims
        for equitable relief or damages against Hughes based on an allegation
        that the Satellite(s) being a component of a larger system, mandated by
        I-COGC requirements such as, for example, a Satellite constellation or
        multiple Satellite configuration, or the use, lease, or sale thereof
        infringes any intellectual property rights including, but not limited to
        Letters Patent or trade mark, or any copyright in the U.S. or place of
        manufacture or delivery of the Work, and to pay any royalties and other
        costs related to the settlement of such request and to pay the costs and
        damages, including reasonable legal fees, finally awarded as the result
        of any suit based on such claim, provided that I-COGC is given prompt
        written notice of such request or claims by Hughes and given authority
        and such assistance and information as is available to Hughes for
        resisting such request or for the defense of such claim. Any such
        assistance or information which is furnished by Hughes at the written
        request of I-COGC is to be at I-COGC's expense. In no event shall
        I-COGC's entire liability under this ARTICLE exceed ONE HUNDRED MILLION
        US Dollars (US$100,000,000.00) and the existence of one or more claims
        or lawsuits shall not extend this amount, and in no event shall I-COGC
        be liable for incidental, special, or consequential damages incurred by
        Hughes save and insofar they are included in any claim by a third party
        for which Hughes is indemnified under this ARTICLE 19.2.

19.3    Hughes agrees to provide reasonable internal assistance to I-COGC
        regarding certain patent claims made by TRW. Should Hughes decide to
        solicit external assistance relative to these claims, Hughes shall
        notify I-COGC for purposes of reaching agreement on the expected budget
        and expenditures for the above stated external assistance. After the

                                    Page 93
<PAGE>   94

        notification and upon I-COGC agreement, I-COGC shall reimburse Hughes
        for such external costs.

                                    Page 94
<PAGE>   95

ARTICLE 20     RIGHTS IN INVENTIONS

20.1    As used in this Contract, "Invention" shall mean any invention,
        discovery or improvement conceived in the performance of Work under this
        Contract. Information relating to Inventions shall be treated as
        confidential information in accordance with the provisions of this
        Contract.

20.2    In the case of joint Inventions, that is, Inventions conceived jointly
        by one or more employees of both Parties hereto, the following shall
        apply:

        A.     Each Party shall have an equal, undivided one-half interest in
               and to such joint Inventions, as well as in and to patent
               applications and patents thereon in all countries.

        B.     In the case of such joint Inventions, Hughes shall have the first
               right of election to file patent applications in any country, and
               I-COGC 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. All filings shall
               be in the joint names of both Parties.

        C.     The expenses for preparing, filing and securing each joint
               Invention application, and for issuance of the respective patent
               shall be borne by the Party which 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
               Invention application for a patent is filed by either Party in a
               country which requires the payment of taxes, annuities or
               maintenance fees on a pending application or on an issued patent,
               the

                                    Page 95
<PAGE>   96

               Party which 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 or maintenance fees. If within
               sixty (60) 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 or maintenance
               fees, or if either Party subsequently fails to continue such
               payments within sixty (60) Days of demand, it shall forthwith
               relinquish to the other Party, providing that said other Party
               continues such payments, its share of the title to such
               application and patent, subject, however, to retention of a
               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.

20.3    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 or maintenance fees on such
        pending application or patent, have the right to grant non-exclusive
        licenses thereunder and to retain any consideration that it may receive
        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 other Party thereunder during the
        term of any such license.

20.4    Sole inventions conceived of solely or jointly by one or more employees
        of Hughes shall be the exclusive property of Hughes and sole inventions
        conceived of solely or jointly by one or more employees of I-COGC shall
        be the exclusive property of I-COGC.

20.5    For the avoidance of doubt, nothing herein shall or be deemed to grant
        to either Party any license or right of use to intellectual property
        rights owned or created by third parties.

                                    Page 96
<PAGE>   97

        Without limiting the foregoing, the Parties recognize that no such
        rights as are owned or created by a customer for the navigation payload
        are intended to be included under this Article 20.

                                    Page 97
<PAGE>   98

ARTICLE 21     CONFIDENTIALITY

21.1    The Parties may provide or exchange proprietary information during the
        performance of the Work, in oral or written form, which may include
        specifications, drawings, sketches, models, samples, computer programs,
        reports, data, techniques, designs, codes, documentation, and financial,
        statistical or other technical information ("proprietary information")
        essential to the objectives of this Contract. All disclosures will be
        treated as proprietary in accordance with this ARTICLE 21 if marked as
        "Proprietary" by the Party (or in accordance with ARTICLE 21.11, by the
        Hughes Subcontractor, if applicable) making the disclosure at the time
        of disclosure.

21.2    Subject to the provisions of ARTICLE 21.3 below, the Party receiving the
        proprietary information of the other Party shall maintain such
        information in confidence and shall not use such information except as
        expressly authorized by this Contract. Each Party agrees to use the same
        care and discretion to avoid unauthorized disclosure, publication or
        dissemination of the other's proprietary information and the
        unauthorized use thereof as the receiving Party uses with respect to
        similar information of its own, but in no event, less than reasonable
        care. Should it become legally necessary for either Party to disclose
        certain of the other's proprietary information to a third party (such as
        licensing or regulatory activities, or for filing with and reporting to
        government agencies, stock exchanges, securities market systems and
        similar bodies), it shall be disclosed only to the extent required by
        law and after a three (3) Business Day prior written notification to the
        other Party (or to Subcontractor, if applicable, in accordance with
        ARTICLE 21.11) of the requirement for disclosure.

21.3    The obligations of confidentiality and restrictions on use specified in
        this ARTICLE shall not apply to any information that:

                                    Page 98
<PAGE>   99

        A.     is already in the possession of the receiving Party without
               obligation of confidentiality at the time of disclosure;

        B.     is independently developed by the receiving Party or any of its
               Affiliates or subcontractors prior to disclosure as evidenced by
               appropriate documents;

        C.     is or becomes publicly available without breach of this Contract
               and without the fault of the receiving Party;

        D.     except as provided in ARTICLE 21.11, is lawfully and rightfully
               received by the receiving Party from a third party; or

        E.     is released for public disclosure by the disclosing Party.

        Specific information shall not be deemed to be available to the public
        or in possession of the receiving Party merely because it is embraced by
        more general information so available or in the receiving Party's
        possession.

21.4    Hughes shall take best efforts necessary, including the appropriate
        contractual provisions in subcontracts, to ensure the confidentiality of
        all proprietary information of I-COGC which may be disclosed to
        Subcontractors.

        I-COGC shall take best efforts necessary, including the appropriate
        contractual provision in consulting agreements, to ensure the
        confidentiality of all proprietary information of Hughes which may be
        disclosed to Consultants.

                                    Page 99
<PAGE>   100

21.5    Except as otherwise provided in this Contract including but not limited
        to ARTICLE 18, DATA RIGHTS herein, the receiving Party agrees that: (i)
        any proprietary information disclosed hereunder shall be used by the
        receiving Party solely for the purpose of performing its functions in
        connection with the Parties' relationship with respect to the Work; (ii)
        it will not use the proprietary information disclosed hereunder for any
        other purpose; and (iii) it will not distribute, disclose or disseminate
        to anyone such proprietary information of the disclosing Party, except
        that either Party may disclose to its own employees or subcontractors on
        a need-to-know basis, provided that such employees and subcontractors
        have agreed in advance and in writing to protect proprietary information
        in accordance with terms consistent with that provided herein; and
        further except that either Party may disclose proprietary information to
        a third party with the consent of the disclosing Party, which consent
        will not be given unless such third party executes a proprietary data
        protection agreement with terms consistent with the requirements herein
        prior to receiving such proprietary information.

21.6    The Parties will specify individuals in writing as the point for
        receiving proprietary information exchanged between the Parties pursuant
        to this Contract.

21.7    Hughes shall maintain EXHIBIT B, SATELLITE TECHNICAL SPECIFICATIONS in
        strict confidence in accordance with this ARTICLE 21 as if it is
        proprietary information.

21.8    The confidentiality obligations in this ARTICLE 21 shall survive
        expiration or termination of this Contract for whatever cause.

21.9    Nothing herein shall require a Party to disclose proprietary information
        to another.

21.10   The obligations imposed by this ARTICLE 21 shall be limited in time only
        by the events listed in ARTICLE 21.3, A through E.

                                    Page 100
<PAGE>   101

21.11   I-COGC may, upon the request of I-COGC, have access to proprietary
        information of a Subcontractor with respect to its performance of the
        Work hereunder. Either Hughes may, at the request of I-COGC, disclose
        proprietary information of its Subcontractor to I-COGC or Hughes may
        request that its Subcontractor discloses its proprietary information
        directly to I-COGC. I-COGC agrees to treat such proprietary information
        of such Subcontractor, whether disclosed to I-COGC directly by such
        Subcontractor or indirectly by Hughes, in accordance with the terms of
        this ARTICLE 21 for the benefit of such Subcontractor.

21.12   Except as otherwise provided in ARTICLE 7, PERMITS AND LICENSES:
        GOVERNMENT APPROVALS, on a need-to-know basis:

        (i)    each Party shall have the right to disclose proprietary
               information of the other, subject to non-disclosure agreements
               having terms and conditions comparable to those herein, to
               Teledesic and persons and entities under common control with
               Teledesic and to The Boeing Company and persons and entities
               under common control with Boeing; and

        (ii)   I-COGC shall have the right to disclose the proprietary
               information of Contractor, subject to non-disclosure agreements
               having terms and conditions comparable to those herein, to actual
               and potential investors, service providers, lenders, insurers and
               other financing advisors and analysts; provided that the
               disclosed information is limited to top-level satellite
               information (e.g., block diagrams), status and schedule
               information, and performance information. Any other disclosures
               of proprietary information shall require the prior consent of
               Contractor (not to be unreasonably withheld), which, if not
               denied within two Business Days of notice to the designee
               identified in ARTICLE 24 NOTICES of a request to disclose such
               information, shall be deemed to have been granted.

                                    Page 101
<PAGE>   102

ARTICLE 22     INTERPRETATION

22.1    Applicable Law

        This Contract, and any performance related thereto shall be interpreted
        and construed, governed and enforced in accordance with the Laws of
        England; it being understood that the UN Convention on the International
        Sale of Goods shall not be applicable.

22.2    Amendments

        The Contract may not be modified except by written amendment signed by
        duly authorized representatives of both Parties.

        For the purpose of administration of this Contract, including
        amendments, any communication between I-COGC and Hughes shall be
        enforceable and binding upon the Parties only if signed by the
        appropriate responsible authorized representatives.

22.3    Changes Requested by Hughes or I-COGC

        A.     Any changes requested by Hughes during the performance of this
               Contract, within the general scope of this Contract, which will
               or may add or delete Work, affect the design of the Satellite, or
               place or time of delivery, or will affect or may affect any other
               requirement of this Contract, shall be submitted in writing to
               I-COGC within an acceptable time period prior to the proposed
               date of the change. Such submittal shall allow I-COGC a
               reasonable period of time to evaluate Hughes' requested change.
               If such Hughes' requested change causes an increase or decrease
               in the total Contract Price, Hughes shall submit a proposal to
               I-COGC.

                                    Page 102
<PAGE>   103

        B.     I-COGC shall notify Hughes in writing within thirty (30) Days
               after receipt of the requested change and price adjustment, if
               any, whether or not it agrees with and accepts such change. If
               I-COGC agrees with and accepts the Hughes' requested change,
               Hughes shall proceed with the performance of the Contract as
               changed and an amendment to the Contract reflecting such change,
               and price adjustment, if any, shall be issued. If I-COGC does not
               agree with such Hughes' requested change, the Parties shall
               attempt to reach agreement on such change. In the event the
               Parties are unable to reach agreement on such change, or price
               adjustment, if any, or both, Hughes shall proceed with the
               performance of the Contract, as unchanged.

        C.     For any changes requested by I-COGC during the performance of
               this Contract, within the general scope of the Contract, which
               will or may add or delete Work, affect the design of the
               Satellite, change the method of shipment or packing, or place or
               time of delivery, or will affect any other requirement of this
               Contract, Hughes shall respond to that request in writing to
               I-COGC within thirty (30) Days after such request. If such I-COGC
               requested change causes an increase or decrease in the total
               Contract Price, Hughes shall submit to I-COGC, at the time the
               response to the requested change is submitted, the details of
               such increase or decrease. I-COGC shall notify Hughes in writing,
               within a reasonable time after receipt of Hughes' response,
               whether or not it agrees with and accepts Hughes' response. If
               I-COGC agrees with and accepts Hughes' response, Hughes shall
               proceed with the performance of the Contract as changed and an
               amendment to the Contract reflecting such change, and price
               adjustment, if any, shall be incorporated into the Contract. In
               the event the Parties are unable to reach agreement on such
               change, or price adjustment, if any, or both, I-COGC may direct
               Hughes to perform the said change, pending resolution of such
               dispute

                                    Page 103
<PAGE>   104

               subject to I-COGC paying any undisputed amounts to Hughes and
               any disputed amounts into escrow at such time as they would have
               been paid under Hughes' response. The mechanism for escrow shall
               be as set forth in ARTICLE 4.11, save that in calculating
               amounts due from escrow, account shall be taken of the proposed
               milestones for payment of the disputed change. If I-COGC does
               not direct such change, then Hughes shall proceed with the
               performance of the Contract as unchanged.

        D.     If requested, Hughes shall provide I-COGC with the basic
               rationale and methodology used in developing a proposal pursuant
               to this ARTICLE 22.3 to the same level of detail in respect of
               Hughes' costs for this change proposal as were granted to I-COGC
               in respect of the prices set forth in Hughes' original proposal
               for this Contract, so as to demonstrate that the prices of the
               proposal are fair and reasonable.

                                    Page 104
<PAGE>   105

ARTICLE 23     PUBLICITY

Each Party shall obtain the prior written approval of the other Party, which
approval shall not be unreasonably withheld or delayed, concerning the content
and timing of news releases, articles, brochures, advertisements, prepared
speeches and other information releases concerning the Work performed or to be
performed hereunder, within a reasonable time prior to the release of such
information. For the avoidance of doubt, Hughes shall be allowed to publicize
the award of the Contract and the general capabilities of the Satellites,
subject to the approval process stated above.

                                    Page 105
<PAGE>   106

ARTICLE 24     NOTICES

        All notices, demands or other communications required or permitted to be
        given or made hereunder shall be in writing and delivered personally or
        sent by prepaid first class post, or by telex, telefax or cable
        addressed to the intended recipient thereof at its address set out below
        or to such other address or telex or telefax number as either Party may
        from time to time duly notify the others.

        A. In respect of I-COGC, to: ICO Global Communications (Operations) Ltd.
                                       c/o I-CO Services Limited
                                       1 Queen Caroline Street
                                       Hammersmith, London W6 9BN
                                       United Kingdom
                                       Telephone:     44 (208) 600-1203
                                       Facsimile:     44 (208) 600-0775
                                       Attention:     Paul Regulinski

                                  cc: Space Segment Contracts Administrator
                                      ICO Program Office
                                      Hughes Space and Communications
                                      MS: SC/S10/S354
                                      PO Box 92919
                                      Los Angeles, CA. 90009
                                      Phone:       (310) 364-9407
                                      Facsimile:   (310) 364-9495

        B. In respect of Hughes, to: Hughes Space & Communications
           International, Inc.
                                    Bldg. S10, M/S S350,
                                    Post Office Box 92919 Airport Station
                                    Los Angeles, California 90009
                                    Telephone:  (310) 364-5729
                                    Facsimile:  (310) 364-7990
                                    Attention:  Dennis R. Beeson
                                                Manager, Contracts

                                    Page 106
<PAGE>   107

        Any notice or other document if served by post, shall be deemed to have
        been served at the expiration of 7 Days after the time when the letter
        containing the same was posted, and in proving such service it shall be
        sufficient to prove that the letter containing the notice or document
        was properly addressed, stamped and posted. A notice sent by telex,
        telefax or cable is deemed to have been served: (1) two hours after
        dispatch, if dispatched on a Business Day before 3:00 PM; or (2) in any
        other case, at 10:00 AM on the Business Day after the date of dispatch.
        Here a Business Day means a Business Day in the city or other location
        to which the notice is sent, and the times mentioned are those in that
        location.

                                    Page 107
<PAGE>   108

ARTICLE 25     INTEGRATION

        This Contract, together with the EXHIBITS, contains the entire agreement
        between the Parties relating to the subject matter hereof. All prior
        understandings, representations and warranties (including those
        contained in sales, promotional and/or marketing materials) by and
        between the Parties, written or oral, which may be related to the
        subject matter hereof in any way, are superseded by this Contract.

                                    Page 108
<PAGE>   109

ARTICLE 26     ASSIGNMENT

26.1    Hughes shall not assign, novate or transfer this Contract or any of its
        rights, duties or obligations thereunder to any person or entity, in
        whole or part without the prior written consent of I-COGC (which
        approval shall not be unreasonably withheld or unduly delayed) except
        that Hughes may assign or transfer this Contract, and its duties and
        obligations thereunder either in whole or in part, to any Hughes
        Affiliate which is not engaged in business competitive to I-COGC
        provided always that Hughes shall remain liable with respect to
        performance of all duties and obligations set forth in this Contract,
        including compliance with all applicable laws and regulations and
        provided further that the Parent Company Guarantee referred to in
        ARTICLE 4.10 hereof remains in full force and effect.

26.2    I-COGC has the right to assign, novate or transfer this Contract, or any
        of its rights, duties or obligations hereunder to any I-COGC Affilliate
        or to a third party financing the Satellites provided that no such
        assignment, novation or transfer shall have a material adverse effect on
        a material obligation of I-COGC including, but not limited to, payment
        obligations to Hughes under this Contract.

        In those cases where an assignment, novation or transfer of this
        Contract by I-COGC shall in I-COGC's reasonable opinion create a
        material adverse effect on a material obligation of I-COGC under this
        Contract, I-COGC shall obtain the prior written consent of Hughes,
        (which approval shall not be unreasonably withheld or unduly delayed) to
        any such assignment, novation or transfer providing that I-COGC can
        demonstrate to Hughes' reasonable satisfaction that:

        (1)    its successor or assignee posesses the financial resources to
               fulfill all  I-COGC's obligations under this Contract; and

                                    Page 109
<PAGE>   110

        (2)    any such assignment, novation or transfer shall not jeopardize
               Hughes data rights or be in favor of a competing satellite
               manufacturer, or violate U.S. laws related to export or
               technology transfer.

        If I-COGC cannot so demonstrate, Hughes agrees to negotiate in good
        faith suitable modifications and new provisions to this Contract which
        would mitigate the above risks.

26.3    I-COGC shall give fifteen (15) Business Days prior notice to Hughes of
        any assignment, novation or transfer and brief details explaining the
        proposed transaction.

26.4    This Contract shall be binding upon the Parties hereto and their
        successors and permitted assigns.

                                    Page 110
<PAGE>   111

ARTICLE 27     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.

                                    Page 111
<PAGE>   112

ARTICLE 28     CORRECTIVE MEASURES IN UNLAUNCHED SATELLITES

28.1    Without limiting the obligations of Hughes under other provisions of
        this Contract, if the data available from the Satellites delivered
        hereunder or any HS-601 satellite shows that there is a material
        deficiency in the design or manufacture of such satellite which, in the
        reasonable opinion of Hughes, based on the data available could
        adversely affect the Satellites produced under this Contract, Hughes
        shall notify I-COGC of any such material deficiency coming to Hughes'
        attention and shall, promptly upon written request of I-COGC, take
        appropriate corrective measures to the Work, at its own expense, with
        respect to all unlaunched Satellites so as to satisfactorily eliminate
        from each unlaunched Satellite all such material deficiencies discovered
        in such satellites.

28.2    In the event that corrective measures taken pursuant to this ARTICLE
        cause a delay, there shall be an equitable adjustment to the time for
        performance of the affected Work.

28.3    If Hughes, in accordance with this ARTICLE, replaces any equipment or
        any part which was determined to be deficient, such deficient equipment
        or part shall remain or become the property of Hughes.

28.4    Nothing in this ARTICLE requires Hughes to disclose in-orbit data from
        satellites owned by others.

                                    Page 112
<PAGE>   113

ARTICLE 29     I-COGC'S RESPONSIBILITIES

29.1    The responsibilities of I-COGC, which will be discharged at no cost to
        Hughes are contained in or are to be identified in EXHIBIT A, STATEMENT
        OF WORK, and as set forth below:

        A.     Beneficial access shall be furnished to all necessary facilities
               (buildings, power, phones, etc.), services, and interface
               hardware at the ground station sites so as to enable Hughes to
               install and test the deliverable equipment in accordance with
               EXHIBIT A, STATEMENT OF WORK, EXHIBIT E, GCE IMPLEMENTATION AND
               TEST PLAN, and EXHIBIT K, PCS TECHNICAL SPECIFICATION AND TEST
               PLAN. All installation and checkout of I-COGC-provided SCC, NMC,
               and SAN equipment which is necessary to allow completion of
               Hughes' tasks (which includes installation, local checkout and
               system checkout) shall also be completed by I-COGC prior to these
               dates. The schedule for this access is as follows: (For the PCS,
               I-COGC shall identify the SAN site locations by name at least
               sixty (60) days prior to the dates specified below.)

<TABLE>
<CAPTION>
                                 GCE*                              PCS*
                                 ----                              ----
<S>                   <C>             <C>           <C>                  <C>
                      SCC Site 1       5 Dec 97     SCC Site 1             5 Aug 98
                      SCC Site 2      19 Jan 98     SCC Site 2             5 Aug 98
                      SAN Site 1       2 Jan 98     Brewster, WA., USA    1 July 98
                      SAN Site 2      16 Jan 98     SAN Site 2           17 July 98
                      SAN Site 3      13 Feb 98     SAN Site 3             5 Aug 98
                      SAN Site 4      27 Feb 98     SAN Site 4            17 Aug 98
                      SAN Site 5      13 Mar 98     SAN Site 5            31 Aug 98
                      SAN Site 6      27 Mar 98     SAN Site 6            14 Sep 98
</TABLE>

               * Access to the Chhattarpur, India, SAN site was previously
                 granted. I-

                                    Page 113
<PAGE>   114

                 COGC may designate another SAN site to be utilized in lieu of
                 the Indian SAN site. At I-COGC's direction, and in compliance
                 with any required US Government authorizations, Hughes will
                 relocate and install the GCE at such new site. Hughes will be
                 compensated for any such relocation pursuant to Article 7.1
                 herein.

        B.     Pursuant to the Convention on Registration of Objects Launched
               into Outer Space (TIAS 8480), I-COGC shall be responsible for
               registration of any and all Satellites launched. In addition
               I-COGC shall be responsible for obtaining any license required
               for radio telecommunications with any and all Satellites after
               separation from the Launch Vehicle.

        C.     I-COGC shall, if it obtains launch insurance, include within its
               policy terms waivers of subrogation rights against Hughes and its
               Associates.

        D.     I-COGC shall provide the final ICDs which will describe all
               necessary information required for the PCS to function properly
               with external systems. The specifications in the PCS interface
               control documents shall be mutually agreed upon by I-COGC and
               Hughes by the time of the PCS CDR.

29.2    In the event that I-COGC procures the Launch Services for any of the
        Satellites delivered hereunder (other than those Launch Services
        procured through Hughes), then I-COGC and their Launch Service
        Provider(s) shall have the following additional responsibilities as
        applicable:

        A.     Launch Vehicle(s) and Launch Services, together with standard
               support equipment and interface documentation for all Satellites.

                                    Page 114
<PAGE>   115

        B.     Coupled loads and coupled thermal analyses data relating to the
               Launch Vehicle furnished to Hughes no later than twelve (12)
               Months after PCD or four (4) Months after receipt of coupled
               loads and thermal models from Hughes, whichever is later.

        C.     All separation hardware and the flight adapter for a fit check of
               the flight adapter delivered to Hughes' plant in El Segundo
               within eighteen (18) Months after PCD.

        D.     Beneficial access shall be furnished to all necessary facilities
               (buildings, power, phones, data lines, etc.), services
               (transportation, storage, fueling, photo, x-ray special test
               facility, etc.), and interface hardware at the Designated Launch
               Site.

29.3    In the event that the above I-COGC furnished facilities, equipment or
        services are not suitable for the intended purpose and/or are not timely
        provided, and Hughes is delayed as a result thereof, then Hughes shall
        be given an equitable adjustment to the delivery schedule for the
        affected Work and any reasonable costs directly resulting therefrom plus
        a reasonable profit.

                                    Page 115
<PAGE>   116

ARTICLE 30     DISPUTES AND ARBITRATION

30.1    If, during the course of performance hereunder, a dispute arises between
        I-COGC and Hughes as to the rights or obligations of either Party under
        this Contract, either Party may give written notice of its objections
        and the reasons therefor ("Dispute Notice") and may recommend corrective
        action. Hughes' Program Manager shall consult with I-COGC's authorized
        senior program management representative in an effort to reach a mutual
        agreement to overcome such objections. In the event mutual agreement
        cannot be reached within five (5) Business Days of such notice, the
        respective positions of the Parties shall be forwarded to I-COGC's Chief
        Executive and Hughes' President, for discussion and an attempt to reach
        mutual agreement.

30.2    If mutual agreement cannot be reached within fifteen (15) Business Days
        of the Dispute Notice such dispute may be referred on the application of
        either Party for final determination to an arbitration tribunal convened
        by the London Court of International Arbitration which shall be
        conducted by three arbitrators in the English language.

30.3    The place of arbitration shall be London, England.

30.4    The award rendered by the arbitration tribunal shall be binding on both
        Parties, and shall be enforceable by any court of competent
        jurisdiction. The cost of arbitration, including the fees and expenses
        of the arbitrators, will be shared equally by the Parties, unless the
        award otherwise provides. Each Party shall bear the cost of preparing
        and presenting its own case, unless the award otherwise provides.

30.5    Notwithstanding anything else contained herein, the Parties agree that
        time is of the essence with regard to the time limits imposed by this
        ARTICLE 30 in resolving such dispute.

                                    Page 116
<PAGE>   117

ARTICLE 31      MISSION OPERATIONS AND LAUNCH SUPPORT

The Contract Price identified in ARTICLE 4 includes all required Satellite
launch support and mission operations for the F1 through F12 Satellites. If
requested by I-COGC, Hughes will provide the required Satellite launch support
and mission operations for the F13 through F15 Satellites and for any of the
optional F16 through F20 Satellites, if exercised by I-COGC.

With respect to the F13 through F20 Satellites, if any of the Atlas IIAS, Delta
III, Sea Launch Zenit 3SL, or Proton D-1e launchers is utilized and the mission
operations are provided from the Backup Control Center (BCC) located in the El
Segundo, California, area, the following firm fixed pricing shall apply in 2000
year dollars and subject to escalation from 1 January 2001 until the date of
option exercise at an escalation amount equal to the greater of the   *  .

            Mission Operations:   *
            Launch Support:       *

            Launch Support:       *

The above pricing is based upon a nominal minimum separation of   *  between
Launches (following the previous launched Satellite).

In accordance with ARTICLE 22.3 "Changes Requested by Hughes or I-COGC", Hughes
agrees to prepare a contract change proposal in response to a request by I-COGC
to provide mission operations and launch support for a different launch vehicle
other than the Atlas IIAS, Zenith 3SL, Delta III or Proton D-1e launch vehicles.

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                    Page 117
<PAGE>   118

                                    Page 118
<PAGE>   119

ARTICLE 32     STORAGE

If I-COGC requests for its convenience that Hughes deliver a Satellite or
Satellites into storage, Hughes agrees that it will store up to two (2)
Satellites at any one time for up to a period of 6 Months for each Satellite.
Such storage shall be at no additional cost to I-COGC if storage occurs at
Hughes' premises in El Segundo, and Hughes will exercise reasonable efforts to
effect storage on said premises. If storage occurs at a place other than Hughes
premises, I-COGC's sole storage expense shall be the cost of transit to and from
the storage location.

                                    Page 119
<PAGE>   120

ARTICLE 33  OPTIONS

33.1    Hughes hereby grants to I-COGC the below listed options to be exercised
        at I-COGC's sole discretion in accordance with the terms specified for
        each option.

A.      Additional Satellites F16 through F20

        I-COGC may direct Hughes via exercise of this option to manufacture,
        test, and deliver ("Build") Satellites F16 through F20 (i.e., from one
        to five additional Satellites) for the prices and on the Delivery Dates
        indicated below, which price(s) shall be in addition to the prices shown
        in ARTICLE 4.1 hereof. Delivery, for the purpose of this ARTICLE 33,
        shall mean Delivery at the Designated Launch Site. These Satellites
        shall be procured sequentially in order of option exercise (F16-F20).
        I-COGC will designate whether the Satellite is to undergo launch
        processing or be placed into storage no later than six months prior to
        scheduled Delivery.

        Unless otherwise indicated in this Contract, all other relevant ARTICLES
        and EXHIBITS of this Contract shall apply to the order of a 16th, 17th,
        18th, 19th, and 20th Satellites, mutatis mutandis, including the  *  .

        Satellite Offer Terms:

               1.   I-COGC may exercise the following F16 Satellite option on or
                    before 31 December 2004, and the specified firm fixed
                    pricing and Delivery criteria will apply:

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                    Page 120
<PAGE>   121

                    F16:
                       *
                       *

                                             *
                       *

                       *

                    * Construction pricing in 2000 year dollars and subject to
                    escalation from 1 January 2001 until the date of option
                    exercise at an escalation amount equal to the greater of the
                    *

                    F16 Delivery Date:  30 Months after option exercise

                    In the event I-COGC elects to proceed with a long lead
                    authorization for F16 (in lieu of a full option exercise),
                    Delivery will occur within twenty-four Months after the F16
                    full-build authorization is received (assuming this
                    full-build authorization is received six months or more
                    after the long lead authorization is received, but in any
                    event, no later than 31 December 2004). Long lead
                    authorization is defined as the receipt by Hughes of
                    I-COGC's payment for F16's long lead parts. The long lead
                    price for F16 is   *   with such pricing in 2000
                    year dollars and subject to escalation from 1 January 2001
                    until the date of option exercise at an escalation amount
                    equal to the greater of the *.

               2.   Should I-COGC proceed with the full-build authorization
                    prior to 31 December 2004, then the long lead price will be
                    credited against the F16 Satellite price. In the event that
                    Hughes does not receive the full-build authorization prior
                    to 31 December 2004 and Hughes subsequently elects to use
                    any of the long lead parts on other programs, Hughes will
                    reimburse I-COGC for the cost of such long lead parts. If
                    I-COGC notifies Hughes

               * Confidential Treatment Requested and the Redacted Material has
                 been separately filed with the Commission.

                                    Page 121
<PAGE>   122

                    prior to 31 December 2004 that I-COGC desires to defer the
                    continuation of the F16 full-build, Hughes will provide a
                    proposal to I-COGC for such deferment under ARTICLE 22.3.
                    The intent is to provide schedule and cost adjustments for
                    completion of the Satellite, taking into account any useable
                    residual material that may have been previously procured
                    under the F16 long lead authorization.

               3.   In addition to the F16 Satellite option specified above,
                    I-COGC may exercise options for up to four additional
                    Satellites (F17-F20) any time prior to 31 December 2004. A
                    firm fixed price of   *   for construction and   *   for
                    Satellite Performance Incentives) each shall apply to these
                    Satellites with such pricing in 2000 year dollars and
                    subject to escalation from 1 January 2001 until the date of
                    option exercise at an escalation amount equal to the greater
                    of the  *   . Delivery will occur thirty (30) Months after
                    I-COGC's option exercise is received.

               4.   The above F16-F20 Satellite option pricing includes the
                       *    as delineated in the EXHIBIT B SATELLITE TECHNICAL
                    SPECIFICATION.

               5.   Deliveries are anticipated to be nominally no closer than
                       *   .

               6.   The payment schedule for the optional Satellites will be
                    based upon mutually agreed to milestones and amounts to be
                    determined by the Parties upon option exercise. Consequences
                    for late Delivery of the F16-F20 optional Satellites are
                    addressed in ARTICLE 11.1.G.

               * Confidential Treatment Requested and the Redacted Material has
                 been separately filed with the Commission.

                                    Page 122
<PAGE>   123

               7.   I-COGC may procure the Launch Services for the optional
                    Satellites independently from Hughes or under the
                    interrelated Launch Services Contract between I-COGC and
                    Hughes.

B.  Long Term Storage  (F2 through F12 Satellites)

        In addition to the storage provisions of ARTICLE 32, STORAGE, if I-COGC
        requests for its convenience that Hughes deliver any of the F2 through
        F12 Satellites into storage at Hughes' facility, Hughes will provide
        long term storage (not to exceed 60 Months) for a price of   *   in
        accordance with the following pricing and terms:

        1.     Placement of Satellite into storage price:   *   .
               (Price includes but is not limited to the following
               non-deliverable items and services: storage tent, support cart,
               unique systems test support equipment and cables, Satellite
               disassembly and battery storage, Satellite transport to storage
               location and setup and use of remote telemetry, command and power
               checkout equipment.)

        2.     Monthly storage price: no charge

        3.     Post storage (removal) price:   *   . (Price includes
               but is not limited to the following non-deliverable items and
               services: removal of Satellite from storage tent, Satellite
               re-assembly, flight re-finalization, cleaning, post-storage
               testing (same as launch site functional tests) and subsystem
               tests and checkout, and also includes multiple transportation of
               Satellite, equipment and crew if required.)

        Long Term Storage Offer Terms (F2 through F12 Satellites):

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 123
<PAGE>   124

               1.     The specified prices are in January 1995 U.S. dollars.
                      Actual prices will be increased at an annual rate of five
                      (5) per cent compounded monthly from 1 January 1995.

               2.     The placement into storage price shall be invoiced upon
                      completion of placement into storage. The removal from
                      storage price shall be invoiced upon completion of all
                      activities and testing associated with removal from
                      storage. The escalation referred to in term 1 above shall
                      be applied individually to these invoices.

C.      Long Term Storage  (F13 through F20 Satellites)

        In addition to the storage provisions of ARTICLE 32, STORAGE, if I-COGC
        directs Hughes to deliver any of the F13-F20 Satellites into storage at
        Hughes' facility, Hughes will provide long term storage (not to exceed
        60 Months) in accordance with the following terms:

        1.     Placement of Satellite into storage price:   *   each,
               subject to escalation from 1 January 2001 until the date of
               placement into storage at an annual rate of five percent (5%)
               compounded monthly. Price includes the following non-deliverable
               items and services: storage location, support cart, unique
               systems test support equipment and cables, Satellite disassembly
               and battery storage, Satellite transport to storage location and
               setup and use of remote telemetry, command and power checkout
               equipment.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 124
<PAGE>   125

        2.     Annual storage price:   *   per year, or amortized fraction
               thereof, for each stored Satellite. These prices are subject to
               escalation from 1 January 2001 at an annual rate of five percent
               (5%) compounded monthly.

        3.     Post storage (removal) price:   *   each. Price includes
               the following non-deliverable items and services: removal of
               Satellite from storage location, Satellite re-assembly, flight
               re-finalization, cleaning, post-storage testing (same as launch
               site functional tests), subsystem tests and checkout, and
               transportation of Satellite, equipment and crew if required. This
               price is subject to escalation from 1 January 2001 at an annual
               rate of five percent (5%) compounded monthly. This price does not
               include the post storage thermal stress test (TST). In the event
               I-COGC requests additional testing, Hughes agrees to provide a
               price proposal for such testing.

D.      Additional Satellite Batteries

        Relative to the F2 through F12 Satellites, I-COGC may direct Hughes at
        any time prior to 5 September 2005 to provide replacement Satellite
        batteries at a price of   *   each plus escalation from 5 September 2000
        at an annual rate of 5%, compounded monthly. Delivery of the Satellite
        batteries shall be no later than 18 Months after receipt of order. In
        the event I-COGC requests replacement batteries for any of the F13
        through F20 Satellites, Hughes agrees to provide a price proposal in
        accordance with ARTICLE 22.3 for such batteries.

E.      Battery Precharge Reset

        Should I-COGC desire to extend an F2-F12 Satellite's battery warranty
        beyond 36 Months after activation to a total battery warranty of 54
        Months, I-COGC may direct Hughes at any time prior to thirty (30) Months
        after activation or six (6) Months prior to the Satellite's planned
        completion date, whichever is earlier, to reset the precharge on an
        F2-F12

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 125
<PAGE>   126

        Satellite battery for   *   each. In addition, I-COGC may direct
        Hughes to reset the precharge on additional Satellite batteries (beyond
        F12) prior to thirty (30) Months after activation, but in any event no
        later than six (6) Months prior to the Satellite's planned completion
        date, for   *   each, subject to escalation from 1 January 2001 at
        an annual rate of five percent (5%) compounded monthly.

33.2    Any modifications, agreed subsequent to the date of this Contract, to
        any item above shall, upon written request of I-COGC, be incorporated
        subject to a mutually agreed adjustment to the price of the relevant
        item.

33.3    Exercise of any option in this  ARTICLE 33 shall be accomplished in
        writing in accordance with ARTICLE 24, NOTICES.

33.4    Should I-COGC exercise any or all of the options described above, the
        Parties shall amend the Contract as soon as is reasonably possible after
        option exercise to incorporate the changes to the Contract which are
        made necessary by such exercise.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 126
<PAGE>   127

ARTICLE 34     LIMITATION OF LIABILITY

34.1    Hughes makes no warranty, express or implied, to any person or entity
        other than I-COGC concerning the Satellites, the Ground TT&C Hardware or
        the performance of the I-CO Program, and I-COGC shall defend and
        indemnify the Hughes from any claims made by any third party against
        Hughes arising from any misrepresentation by I-COGC or any of its
        Affiliates to any third party in connection with this Contract.

34.2    The Parties to this Contract expressly recognize that the I-CO Program
        is a commercial space venture and as such, it involves substantial
        risks. Therefore, the Parties recognize the commercial need to define,
        apportion and limit contractually all of the risks associated with this
        commercial space venture.

        THE WARRANTIES, OBLIGATIONS AND LIABILITIES OF HUGHES AND REMEDIES
        AGAINST HUGHES WHICH ARE EXPRESSLY SET OUT IN THIS CONTRACT ARE
        EXCLUSIVE. ALL OTHER REPRESENTATIONS, WARRANTIES, CONDITIONS AND
        ASSURANCES, EXPRESS OR IMPLIED, AND WHETHER STATUTORY OR OTHERWISE, ARE
        HEREBY EXPRESSLY EXCLUDED (SAVE FOR ANY LIABILITY FOR FRAUDULENT
        MISREPRESENTATION). WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
        THERE ARE EXCLUDED IN PARTICULAR ANY OTHER WARRANTIES AND CONDITIONS AS
        TO SATISFACTORY QUALITY, MERCHANTABILITY, FITNESS FOR ANY PARTICULAR,
        PURPOSE AND AS TO DESCRIPTION AND/OR PERFORMANCE AS REGARDS THE I-CO
        PROGRAM INCLUDING, WITHOUT LIMITATION, THE SATELLITES AND GROUND TT&C
        HARDWARE TO BE PROVIDED BY HUGHES HEREUNDER. WITHOUT PREJUDICE TO THE
        FOREGOING, THE PROVISIONS OF THIS ARTICLE 34.2 SHALL APPLY WITH RESPECT
        TO ANY BREACH OF THIS CONTRACT FOR WHICH THERE IS A STATED REMEDY,
        INCLUDING DELAY OR DEFAULT, AND WITH RESPECT TO ANY DEFECT

                                    Page 127
<PAGE>   128

        NON-CONFORMANCE OR DEFICIENCY IN ANY PRODUCT DELIVERED UNDER THIS
        CONTRACT OR IN ANY INFORMATION, INSTRUCTIONS, SERVICES OR OTHER THINGS
        PROVIDED PURSUANT TO THIS CONTRACT.

34.3    Notwithstanding the foregoing, the Parties shall not have any liability
        to the other Party for any special, collateral, punitive, exemplary,
        consequential, indirect and/or incidental damages (including but not
        limited to, lost profit or revenues, loss of goodwill, loss of savings,
        loss of use, interruptions of business or for any other form of economic
        loss).

34.4    The provisions of this ARTICLE 34 shall survive the termination or
        expiration of this Contract for whatever reason or cause.

                                    Page 128
<PAGE>   129

ARTICLE 35     MISCELLANEOUS

35.1    Regulatory Support

        Hughes agrees that it will, if so requested by I-COGC, render at Hughes'
        own cost reasonable assistance to I-COGC in relation to the obtaining of
        regulatory and governmental approvals for the successful implementation
        in the United States of America of mobile satellite communications
        services by I-COGC or its Affiliates or its or their major service
        providers. Such assistance shall normally be provided from the internal
        resources of Hughes Telecommunications and Space Company of which Hughes
        is a subsidiary and shall not, unless otherwise agreed, require Hughes
        to provide assistance of its external consultants or advisors. Hughes
        and I-COGC acknowledge that, for the avoidance of doubt, the provision
        of regulatory support by Hughes or its Affiliates to American Mobile
        Satellite Corporation and its subsidiaries shall not constitute a breach
        of Hughes' obligations under this ARTICLE 35.1.

35.2    Cancellation for Non-Allocation of Frequencies

        I-COGC may terminate the Contract for its convenience under ARTICLE 17,
        TERMINATION, if WRC 95 does not advance the availability of the 2GHz
        band, or does not allocate the feeder link for the space segment, or if
        as a result of WRC 95, it appears that the allocation of frequencies
        will be sufficiently delayed so as to jeopardize the I-CO Program
        provided however I-COGC may terminate the Contract for these reasons by
        written notice to Hughes between 1 December 1995 and 31 March 1996 as if
        for Force Majeure (ARTICLE 10), (except that the six (6) month duration
        requirement will be waived), if written notice is given to Hughes
        between 1 December 1995 and 31 March 1996.

                                    Page 129
<PAGE>   130

35.3    Insurance

        Hughes agrees to provide All Risks Insurance for the Satellites (to
        their full replacement value) at no additional cost to I-COGC and will
        provide evidence of such insurance if so requested by I-COGC. With
        regard to risk insurance for damage caused by earthquake, Hughes will
        provide coverage up to the limits and premiums which are commercially
        feasible.

35.4    Excess Mass

        Should a Satellite(s) exceed the launch mass specified in EXHIBIT B,
        SATELLITE TECHNICAL SPECIFICATION, Hughes agrees to bear any resultant
        increased launch and other associated costs incurred by I-COGC ("Mass
        Cost Increase") resulting from such mass increase, provided that if
        I-COGC directs that Hughes utilize the services of a specific Launch
        Services Provider where Hughes is otherwise able to procure Launch
        Services which meet the mass capability requirements from an alternative
        Launch Services Provider at a lower Mass Cost Increase, and where such
        alternative Launch Services are of a comparable heritage and reliability
        and meet the key schedule and other requirements of (a) this Contract,
        (b) the interrelated Launch Services Contract referred to in the
        Recitals, and (c) the I-CO Program, then I-COGC shall bear the
        difference between the Mass Cost Increase with the said Hughes suggested
        alternative Launch Services Provider and the Mass Cost Increase with the
        Launch Services Provider directed by I-COGC. The Parties agree to
        consult with one another in order to minimize such costs, subject to
        schedule and other requirements of the I-CO Program.

                                    Page 130
<PAGE>   131

35.5    Key Personnel

        Hughes agrees that the following individuals are necessary for the
        successful completion of the Work to be performed under this Contract
        and shall not be removed from the performance of the Work without the
        consent of I-COGC, which consent shall not be unreasonably withheld. In
        the event that these personnel become unavailable for any reason and
        consent is given, Hughes shall select suitable replacement personnel who
        possess comparable levels of experience, qualifications and ability.
        Notwithstanding its role in approving key personnel and their
        replacements, I-COGC shall have no supervisory control over their work,
        and nothing in this ARTICLE shall relieve Hughes of any of its
        obligations under this Contract, or of its responsibility for any acts
        or omissions of its personnel.

<TABLE>
<CAPTION>
                  Name                       Title
                  ----                       -----
                  <S>                        <C>
                  K. Reiley                  ICO Program Director
                  T. Lamb                    ICO Space Segment Program Director
                  W. Scanlon                 Tropo IPT Leader
</TABLE>

35.6    Disclaimer of Agency

        None of the provisions of this Contract shall be construed to mean that
        either Party hereto is appointed or is in any way authorized to act as
        an agent of the other Party. This Contract does constitute, create, give
        effect to, or otherwise recognize a joint venture, partnership or formal
        business organization of any kind, and the rights and obligations of the
        Parties shall be limited to those expressly set forth herein.

                                    Page 131
<PAGE>   132

35.7    Waiver of Breach of Contract

        A waiver of any breach of a provision hereof shall not be binding upon
        either Party unless the waiver is in writing and such waiver shall not
        affect the rights of the Party not in breach with respect to any other
        or future breach. No failure or delay by any Party or time or indulgence
        given by it in or before exercising any remedy or right under or in
        relation to this Contract shall operate as a waiver of the same nor
        shall any single or partial exercise of any remedy or right preclude any
        further exercise of the same or the exercise of any other remedy or
        right.

35.8    Term of Contract

        This Contract shall be in full force and effect as long as either Party
        is or may be required to perform any obligation pursuant to this
        Contract.

35.9    Language

        With respect to all correspondence relating to this Contract and to all
        material, including labels and markings of equipment, submitted by
        Hughes hereunder, the English language shall be used. Controlling
        language for this Contract shall therefore be the English language.

                                    Page 132
<PAGE>   133

ARTICLE 36     MAJOR SUBCONTRACTORS

The following companies are identified as potential Major Subcontractors under
this Contract:

               Saab Ericsson Space AB
               NEC Corporation
               Mitsubishi Electric Corporation

In addition, any Subcontractor with a subcontract in excess of $US30,000,000
will be deemed to be a Major Subcontractor under this ARTICLE 36.

Hughes shall incorporate the substance of ARTICLE 12, ACCESS TO WORK IN PROGRESS
AND DATA and ARTICLE 18, DATA RIGHTS, into all subcontracts with Major
Subcontractors, and shall use reasonable efforts to incorporate the same into
all subcontracts between Hughes and any Subcontractor performing Work pursuant
to this Contract.

                                    Page 133
<PAGE>   134

ARTICLE 37     SPECIAL PROVISION APPLICABLE TO SATELLITE F15

The following special (additional) terms apply to the F15 Satellite:

37.1    Hughes agrees to defer all F15 invoices and I-COGC will not be required
        to make any F15 payments until 1 February 2002.

37.2    I-COGC may place the manufacture of F15 on hold in accordance with the
        following:

        A.     Should I-COGC elect to place F15 on hold as of   *   ,
               Hughes will store the F15 parts and material until 31 December
                  *   and invoice I-COGC for   *   in accordance with ARTICLE
               37.1. Should I-COGC provide a restart notice directing Hughes to
               proceed with the manufacture of F15 prior to   *   ,
               Hughes will complete and Deliver F15 within   *   of
               receiving I-COGC's F15 restart notice. Upon restart of F15, the
               Parties will agree on an equitable adjustment of billing
               milestones associated with F15 over the remaining Delivery
               schedule. The remaining   *   of the price of F15 will be subject
               to escalation during the hold period at an escalation amount
               equal to the greater of the   *   .

        B.     Should I-COGC elect to place F15 on hold as of   *   ,
               Hughes will store the F15 parts and material until   *   , and

               invoice I-COGC for   *   in accordance with ARTICLE 37.1, if
               applicable. Should I-COGC provide a restart notice directing
               Hughes to proceed with the manufacture of F15 prior to   *   ,
               Hughes will complete and Deliver F15 within   *   of receiving
               I-COGC's F15 restart notice. Should I-COGC provide a restart
               notice directing Hughes to proceed with the manufacture of F15
               after   *

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 134
<PAGE>   135
                    *    , but prior to    *     , Hughes will complete and
                Deliver F15 within     *     of receiving I-COGC's F15 restart
                notice. Upon restart of F15 the Parties will agree on an
                equitable adjustment of billing milestones associated with F15
                over the remaining Delivery schedule. The remaining   *   of
                the price of F15 will be subject to escalation during the hold
                period at an escalation amount equal to the greater of the
                    *    .

        C.     In the event I-COGC elects to terminate F15 for convenience prior
               to   *    , the provisions of ARTICLE 17.1 shall apply, except
               that (i) no F15 termination payment will be due to Hughes until
                  *    , and (ii) in no event will I-COGC's termination
               settlement exceed the following:

<TABLE>
<CAPTION>
                                 Termination               Termination Liability
                                    Date                      (US$ Million)
                              ------------------           ---------------------
<S>                           <C>                          <C>
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
                                     *                              *
</TABLE>

        D.     Should I-COGC proceed with the full-build authorization prior to
                  *    , then the long lead price will be credited against the
               F15 Satellite price. In

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 135
<PAGE>   136

               the event that Hughes does not receive the full-build
               authorization prior to    *     and Hughes subsequently
               elects to use any of the long lead parts on other programs,
               Hughes will reimburse I-COGC for the cost of such long lead
               parts. If I-COGC notifies Hughes prior to    *      that
               I-COGC desires to defer the continuation of the F15 full-build,
               Hughes will provide a proposal to I-COGC for such deferment
               under ARTICLE 22.3. The intent is to provide schedule and cost
               adjustments for completion of the Satellite, taking into account
               any useable residual material that may have been previously
               procured under the F15 production authorization.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 136

<PAGE>   137

ARTICLE 38     ADDITIONAL SATELLITES OF THE SAME GENERATION AND DESIGN

I-COGC agrees that Hughes will be the sole source for any additional Satellites
(including ground spares) procured by I-COGC, or any of its Affiliates, if such
satellites are of both the same current generation and design as the Satellites
delivered hereunder, but only if such additional satellites are ordered by
I-COGC or any of its Affiliates prior to the earlier of (i) 1 January 2004 or
(ii) the order of the F16 Satellite. Notwithstanding the foregoing, Hughes
agrees that, prior to such date, any of I-COGC and its Affiliates is entitled to
take delivery of any satellites that are either of a different generation or of
a different design from the Satellites delivered hereunder, including any
Satellite operating wholly or significantly in the Ka-Band.

                                    Page 137
<PAGE>   138

ARTICLE 39     FINALIZATION OF RADAR SPECIFICATION AND MODIFICATION

39.1    Hughes and I-COGC acknowledge that radar systems exist in the I-COGC
        frequency allocation. Hughes' design approach, as defined under Exhibit
        B (the "Radar Design"), is intended to mitigate the impact of radar
        systems on the Satellites when illuminated by radar pulses having a
        radar pulse duration, magnitude, and repetition as defined by I-COGC.

39.2    The Parties agree to conduct further analysis to characterize the
        performance of the Radar Design. Therefore, the Parties agree to proceed
        as follows:

        39.2.1 Hughes will perform an analysis (the "Hughes Study") to verify
               the disturbance duration of a satellite with the Radar Design
               that is illuminated by a radar pulse as defined by I-COGC. The
               analysis and results of the Hughes Study will be completed and
               presented to I-COGC on or before *. At the same time the analysis
               and results are presented to I-COGC, Hughes will provide a radar
               pulse disturbance duration commitment and, if accepted by I-COGC,
               the specification will be amended to incorporate the radar pulse
               disturbance duration commitment. If the analysis, results and
               radar pulse disturbance duration commitment are not presented to
               I-COGC on or before *, then Hughes shall continue to perform all
               its obligations under the Contract (including all work necessary
               to maintain the schedule), and *

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                    Page 138
<PAGE>   139

        39.2.2 I-COGC shall conduct an analysis in parallel with the Hughes
               Study to characterize the system impacts of radar pulse
               disturbance duration. The results of such analysis shall be
               presented to Hughes no later than September 21, 2000.

39.3    Within seven (7) Days from the receipt of the analysis and results of
        the Hughes Study and commitment to a radar pulse disturbance duration,
        I-COGC will provide written notification directing Hughes to do one of
        the following:

        39.3.1  Implement the specification (as amended to include the radar
                pulse disturbance duration commitment) resulting from the Hughes
                Study with no change to the Contract price, schedule, or terms;
                or

        39.3.2  Prepare a contract change proposal in accordance with Article
                22.3(B), Changes Requested by Hughes or I-COGC, to change the
                design approach to mitigation of radar pulses or to conduct
                further analysis and testing of the Radar Design. Such new
                design or further analysis and testing shall be completed and
                presented to I-COGC no later than forty-five (45) days after
                receiving such written notification from I-COGC. After receiving
                the results of such new design or further analysis and testing,
                I-COCG shall have the right to exercise the same options as set
                forth in this ARTICLE 39.3.1, 39.3.3, and 39.3.4, or the Parties
                will mutually agree on further studies or other actions; or,

        39.3.3. Terminate the Contract for Convenience. Such termination shall
                be subject to Article 17.1, Termination for I-COGC's
                Convenience, * or,

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                    Page 139
<PAGE>   140
        39.3.4. Terminate   *   for Convenience. Such termination shall be
                subject to ARTICLE 17.1, TERMINATION FOR I-COGC'S CONVENIENCE, *
                and all termination liability under such article will in no
                event exceed   *   (the "   *     Termination Liability"). If *
                is terminated for convenience, the January 25th Memorandum of
                Agreement (as amended) between the Parties, the Stipulation and
                Agreement between the Parties dated 1 December 1999 (as
                amended), the Stipulation and Order regarding Cure Payment and
                Terms and Conditions of Assumption of Contract with Hughes Space
                and Communications International, Inc. dated 3 May 2000, and
                this Contract       *      will continue in full force and
                effect as if    *     had never been entered into.

39.4    In the event that I-COGC's written notification required under Article
        39.3. above is received after the seven (7) Day requirement, the
              *     Termination Liability shall increase as reasonably required
        to maintain the Delivery schedule.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 140
<PAGE>   141

ARTICLE 40     RESERVED

                                    Page 141
<PAGE>   142

ARTICLE 41     SPACE SEGMENT SUPPORT TO SEIT

41.1    This Article sets forth the terms under which Hughes, as the ICO Program
        Space Segment provider, will support the ICO Program System Engineering,
        Integration, and Test (SEIT) efforts. Hughes shall provide a nominal
        level of effort consisting of six (6) engineers for a period of three
        years commencing 25 August 2000 to provide Space Segment technical
        support to SEIT and assist in evaluating Space Segment impacts arising
        from the revision of the ICO Program Ground Segment. This effort will be
        supplemented, as required, by limited managerial and administrative
        support to assure that proper attention is applied to the SEIT support
        effort by the scientific support team. Hughes will consult with I-COGC
        concerning the assignment of key team members prior to being assigned to
        the space segment support to SEIT effort. The Hughes team may include
        selected vendor or subcontracted effort, as appropriate, to ensure
        timely completion of required tasks. Hughes will furnish to I-COGC on a
        quarterly basis a description of the work in process and a summary of
        Hughes' financial expenditures to date versus current I-COGC funding,
        including a budgetary forecast of anticipated expenditures for future
        work. Hughes and I-COGC will mutually agree on the planned tasking and
        estimated staffing levels on a quarterly basis.

41.2    Hughes will provide such support and perform such tasks as I-COGC may
        request from time to time. Without limiting the foregoing, Hughes
        support to the SEIT effort may include, without limitation, the
        following:

        (a)    Performance of detailed system level integration planning and
               testing with the first and subsequent spacecraft launches.

        (b)    Support to system level analyses, integration planning and
               testing for the spacecraft, PCS and GCE systems interface to the
               ICO system.

                                    Page 142
<PAGE>   143

        (c)    Participation in trade-offs as the system gets further designed
               and integrated.

        (d)    Support to system test bed changes and additions.

        (e)    Review and provide assessment of new requirement flowdown.

        (f)    Support of Operations.

        (g)    Provide on the job training.

41.3    Estimated Support to SEIT Price

        The estimated funding required for the support to SEIT effort is
        ( * over three years).

(b)     All Hughes' support to SEIT effort will be performed on a cost
        reimbursement basis, to include a * fixed fee.

41.4    Invoices and Payment

        (a)    Hughes will submit invoices to I-COGC on a quarterly basis. Each
               invoice will reflect the labor and non-labor costs incurred
               during the previous quarter. Hughes will make a good faith effort
               to notify I-COGC if Hughes expenditures appear to be materially
               inconsistent with the budgeted forecast. Labor and non-labor
               costs shall be invoiced at a price that includes applicable
               burden(s), plus * fixed fee.

        (b)    I-COGC shall pay each invoice within fifteen (15) Days after
               receipt of invoice. Invoices shall include a certification from
               Hughes stating that the invoiced amount reflects an accurate
               account of the charges incurred while performing the support to
               SEIT effort under this Contract for the previous quarter.

        * Confidential Treatment Requested and the Redacted Material has been
          separately filed with the Commission.

                                    Page 143
<PAGE>   144

                                    Page 144

<PAGE>   145
                                                     24 August 2000- Amendment 7

                         CONTRACT NUMBER ICOO/95-1002/NR

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

                                    EXHIBIT A

                                STATEMENT OF WORK

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

                                 24 AUGUST 2000

<PAGE>   146

Exhibit A Statement of Work                          24 August 2000- Amendment 7
  Satellite Contract                           Contract Number:  ICOO/95-1002/NR
--------------------------------------------------------------------------------

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                      <C>
1. Summary................................................................................1

2. Deliverable Equipment, Documentation and Services......................................2

        2.1 Flight Spacecraft.............................................................2

        2.2 Ground Control Equipment (GCE) System.........................................2

        2.3 Engineering Model Payload.....................................................5

        2.4 Deliverable Documentation.....................................................7

               2.4.1 General..............................................................7

               2.4.2 Contract Documentation Requirements List (CDRL)......................8

               2.4.3 CDRL "Information", "Review" and "Approval Definitions"..............8

        2.5 Additional Deliverable Services and Equipment.................................8

               2.5.1 LVI and Launch Support Activities....................................8

               2.5.2 TT&C Compatibility Tests.............................................8

               2.5.3 On-Orbit Commissioning and Testing...................................9

               2.5.4 Mission Operations and Support.......................................9

               2.5.5 Training............................................................10

               2.5.6 Initial Operational and Maintenance Support.........................11

               2.5.7 Communications Network Support......................................11

               2.5.8 Spacecraft Shipment and Storage.....................................11

               2.5.9 GCE Post Delivery Support and Spares................................13

               2.5.10 Radar Emitter Study................................................14

               2.5.11 Additional Racks for CFE Equipment.................................14

               2.5.12 Remote IOT Operations..............................................14

               2.5.13 PCS Modem Compatibility Test.......................................14

               2.5.14 PCS Post Delivery Support and Spares...............................16

        2.6 Payload Control System (PCS).................................................16

3. Program Management....................................................................18

        3.1 Program Management Plan......................................................18

        3.2 Documentation and Data Management............................................18
</TABLE>

                                       i
<PAGE>   147

<TABLE>
<S>                                                                                      <C>
        3.3 Progress and Technical Meetings..............................................18

               3.3.1 Weekly Progress Meetings............................................18

               3.3.2 Quarterly Progress Meetings.........................................19

        3.4 Action Item Control..........................................................19

        3.5 Progress Reports.............................................................19

        3.6 Milestone and Invoice Payment Status and Forecast............................19

        3.7 Customer Residents...........................................................20

               3.7.1 Office Accommodations and Facilities................................20

               3.7.2 Attendance at Technical Reviews and Tests...........................21

        3.8 Spacecraft Scroll............................................................21

        3.9 Program Planning Networks and Schedule Charts................................21

4. Product Assurance Activities..........................................................22

        4.1 General......................................................................22

        4.2 Qualification Matrix.........................................................22

        4.3 Systems Safety...............................................................22

        4.4 Requests for Deviation/Waiver................................................22

        4.5 PA Documentation.............................................................23

5. Design, Manufacturing, and Test Reviews...............................................23

        5.1 General......................................................................23

               5.1.1 Conduct of Reviews..................................................24

               5.1.2 Review Data Packages................................................25

               5.1.3 Completion of Review................................................25

        5.2 Spacecraft, Communications Payload and GCE Design Reviews....................25

               5.2.1 General.............................................................25

               5.2.2 Preliminary Design Reviews..........................................26

               5.2.3 Critical Design Reviews.............................................26

               5.2.4 System Final Design Review..........................................26

               5.2.5 PCS System Requirement..............................................27
</TABLE>

                                       ii
<PAGE>   148

<TABLE>
<S>                                                                                      <C>
        5.3 Subsystem Level Design Reviews...............................................27

               5.3.1 General.............................................................27

               5.3.2 Preliminary.........................................................27

               5.3.3 Critical............................................................28

        5.4 Equipment Level Design Reviews...............................................28

               5.4.1 General.............................................................28

               5.4.2 Preliminary.........................................................29

               5.4.3 Critical............................................................29

        5.5 Flight Software Reviews......................................................29

               5.5.1 General.............................................................29

               5.5.2 Preliminary.........................................................29

               5.5.3 Critical............................................................29

               5.5.4 Code................................................................30

               5.5.5 Flight PROM Burn-In.................................................31

        5.6 Manufacturing Readiness Reviews..............................................31

        5.7 Test Reviews.................................................................31

               5.7.1 General.............................................................31

               5.7.2 Test Readiness......................................................32

               5.7.3 Test Review Board...................................................32

        5.8 Pre-Shipment Review..........................................................32

        5.9 Launch Readiness Review......................................................32

Appendix A: Contract Documents Requirements List (CDRL)
</TABLE>

                                      iii
<PAGE>   149

EXHIBIT A: STATEMENT OF WORK

1.      SUMMARY

        This Statement of Work (SOW) defines the work to be performed by Hughes
        Space and Communications, International, Inc. (HSCI), referred to
        hereafter as the Contractor, in implementation of the Space Segment
        under contract with ICO Global Communications (Operations) Limited,
        referred to hereafter as the Customer.

        The Contractor shall design, develop, manufacture, test and deliver the
        following equipment.

        a) Fifteen (15) Spacecraft delivered to Designated Launch Sites. The
        first spacecraft (ICO F1) delivered shall not include the Tropo/Radar
        modification. ICO F2 to F15 shall be configured to include the
        Tropo/Radar modification.

        b) A compatible, fully integrated and operational Spacecraft Ground
        Control Equipment (GCE) system delivered to facilities designated and
        provided by the Customer. The GCE includes central control computer
        systems located at a Customer provided primary satellite control center
        (SCC), a back-up satellite control center (BCC) located at Contractor's
        facility in El Segundo, California, and remotely located TT&C baseband
        and interface equipment installed at 6 Customer TT&C SAN sites. The GCE
        shall operate up to twelve (12) satellites (expansion of the design to
        14 satellites shall also be possible). The deliverables also includes 2
        dynamic software simulators (DSS) with host computer hardware located
        and interfaced at the SCC and BCC, and two in-orbit test (IOT) systems,
        one primary and one back-up spare, located in Chhattarpur, India and
        Brewster, Washington USA. Only one of the IOT systems can be operated at
        any one time. Contractor agrees to relocate the BCC to a site in Japan
        or other comparable location to be designated by Customer at a later
        date.

        c) An Engineering Model (EM) communications payload and associated
        support equipment as set forth in herein.

        d) A Payload Control System (PCS) to support traffic related
        configurations of the ICO payload. The PCS will be comprised of an
        integrated suite of hardware, software, and operations products that
        collectively will be used to support normal, on-station, ICO payload
        traffic control operations for up to twelve (12) satellites. It shall be
        possible to extend the number of supported satellites to 24 with
        additional hardware and software. The PCS will provide data to assist in
        operations relating to satellite diagnostics, calibration, payload
        trending, and short-term storage. PCS will also assist IOT and satellite
        failure investigation efforts as required.

                                     page 1
<PAGE>   150

        The above equipment shall be delivered by the dates defined in the
        Spacecraft Contract. The SOW also defines associated documentation and
        services including: training, launch vehicle interface and preparation,
        mission operations and post-launch commissioning, testing and support.

                                     page 2
<PAGE>   151

2.      DELIVERABLE EQUIPMENT, DOCUMENTATION AND SERVICES

2.1     FLIGHT SPACECRAFT

        The Contractor shall deliver fifteen (15) complete spacecraft fulfilling
        all requirements of the Contract, compatible with the required launch
        vehicles and including propellants, and airborne support equipment as
        applicable.

        The first spacecraft to be delivered, called the protoflight model,
        shall be subjected to a series of qualification tests using protoflight
        levels, as specified in Exhibit-D, entitled Acceptance Test Plan. The
        first spacecraft configured with the Tropo/Radar modification shall be
        subject to a series of protoflight tests as specified in Exhibit D, to
        validate the Tropo/Radar design and its consequences to the overall
        payload and spacecraft design.

2.2     GROUND CONTROL EQUIPMENT (GCE) SYSTEM

        The fully operational GCE system shall comprise:

        -      Two (2) satellite control centers, comprising one primary center
               (SCC) and one backup center (BCC). The BCC will initially be
               located at Contractor's facility in El Segundo, California. At
               Customer's request, Contractor will relocate the BCC to a site in
               Japan or another comparable location selected by Customer.
               Interface equipment at the SCC and BCC will allow interfaces for
               communication with at least six (6) TT&C out-station facilities.
               The GCE shall operate up to twelve (12) satellites (expansion of
               the design to 14 satellites shall also be possible.)

        -      Six (6) SAN sites equipped with TT&C equipment, switching,
               ranging and baseband equipment adequate to control three (3)
               satellites through five (5) antennas at each SAN site.

        -      Two (2) Dynamic Software Simulators (DSS), one located at each of
               the satellite control centers.

        -      Two (2) In-Orbit Test (IOT) systems, one primary and one back-up
               spare, located at two of the TT&C/SAN sites. One in Brewster,
               Washington USA, the other in Chhattarpur, India.

        To facilitate operator training, one satellite control center and it's
        associated DSS shall be installed and operational four months prior to
        overall GCE acceptance.

        The Customer shall provide:

        -      Facilities for installation at the primary center as well as at
               the backup center in Japan or at another comparable location
               determined by Customer

        -      SAN site availability at six (6) designated sites to allow
               installation of TT&C out-station equipment

        -      Communications links

        -      Six (6) SAN sites suitably located to support near continuous TC,
               ranging and TM control of at least 12 satellites during early
               launch operations of F1 onwards through to in-service operations
               of the complete constellation

                                     page 3
<PAGE>   152

        The Contractor shall ensure that the hardware and software deliverables
        are adequate to cover in-orbit operations, for example, normal
        in-service operations concurrent with a dual launch operations mission
        and intensive monitoring of at least one "anomalous" satellite.

        The Customer shall provide communication links between all facilities.
        The Contractor's equipment shall interface with these links for all
        necessary site to site communications. Interfaces with these links and
        with all other customer furnished equipment shall be defined in
        interface control specifications called up in the CDRL. Responsibility
        for control of these specifications (Items G1, G2, and G3 of the CDRL)
        was transferred to the Customer on 1 July 1996.

        In addition to the software required to control satellites, the
        Contractor shall supply a SAN antenna control facility (as part of an
        Automatic Planning and Control System) which, based on satellite
        measured ephemeris data, will manage and control SAN antenna/satellite
        link acquisitions at the six (6) TT&C SAN sites equipped with 5 antennas
        per site. (Note, this will take account of antennas removed from service
        for maintenance and will also assume that autonomous SAN antenna
        satellite autotracking will occur after satellite acquisition). Recovery
        algorithms for reacquisition if loss of levels occurs is also required.
        Coupled with this SAN antenna management, selection of TT&C sites for
        continuous real time telemetry collection and TC routing will be
        included.

        In-Orbit Test (IOT) hardware and software shall be delivered to two (2)
        of the TT&C SAN sites. This equipment shall be installed, commissioned
        and acceptance tested at the SAN site following facility pre-acceptance
        at the factory. The IOT equipment shall offer local and remote (from SCC
        and BCC) control capabilities and shall be capable of verifying correct
        satellite performance of all major communications, TT&C rf and SRMS rf
        unit parameters in accordance with Contract Exhibit F (GCE Technical
        Specifications).

        Two sets of DSS hardware and software shall be delivered, installed and
        acceptance tested, one at each SCC site in accordance with the
        specification. The DSS shall be interfaced with the SCC such that flight
        operations procedures and training can be performed at the SCC using the
        DSS to emulate the satellite. Correct operations of real time safety
        related procedures (e.g.: ACS normal and anomalous operations) is a
        paramount requirement. The spacecraft bus operation should be fully
        simulated. Payload redundancy management and processor configuration
        through the TT&C subsystem should be emulated. The simulator does not
        have to emulate Resource Management Operations.

        The Customer shall provide prepared facilities for the installation of
        the GCE at the satellite control centers and TT&C SAN sites. This
        includes all reasonable services necessary for installation, test and
        commissioning of the GCE. It shall include all interfaces to customer
        furnished equipment and suitable facilities for physical installation
        such as power, air conditioning, cable trays, and appropriate security
        provisions for encryption hardware. Specific details shall be defined in
        CDRL interface control and facility documents to be jointly agreed.

                                     page 4
<PAGE>   153

        Details of the GCE system implementation and test are defined in Exhibit
        E of the Contract. Specific test plans for DSS and IOT equipment
        subsystems shall be jointly agreed.

        During spacecraft upgrade for the Tropo/Radar modification, the BCC,
        located at the Contractor's facility in El Segundo, California shall be
        maintained. Periodic maintenance by Contractor's system administrators
        shall be conducted to insure equipment health.

2.3     ENGINEERING MODEL PAYLOAD

        The Engineering Model Communications Payload (EM Payload) shall be a
        deliverable item. Contractor will act as custodian of the EM Payload for
        Customer and will maintain the EM Payload to ensure that it is at all
        times in "operational condition" at Contractor's facilities in El
        Segundo, CA until one year after delivery of the F12 spacecraft (at
        which time Customer will either take custody of the EM Payload subject
        to US Government approval, or will mutually agree with Contractor on
        such other disposition of the EM Payload). "Operational condition" is
        defined as ready for use by Customer or its designee within two weeks
        notification. Only one configuration of the EM Payload will be
        maintained by Contractor, and such configuration will be updated to
        reflect any changes from tropo/radar or other satellite modifications.
        The Contractor is permitted to store the EM Payload in appropriate
        facilities provided the EM Payload can be assembled and ready for use
        within two weeks.

        Basic control and support equipment for the EM Payload shall be provided
        by the Contractor. Interface and test equipment for the EM Payload to be
        used in "Ground System Trials" with development SAN and User Terminal
        (UT) equipment shall be the responsibility of the Customer. The precise
        definition of interfaces shall be mutually agreed and documented in an
        interface control document. The Contractor, upon Customer request, shall
        also provide options for these "Ground Systems Trials" to be conducted
        at the Contractors facilities and to provide appropriate Contractor
        support.

        The Customer plans to use the EM Payload for network and traffic
        development trials including development of the Resource Management and
        HPSMS operations.

        The EM Payload shall incorporate at least the following hardware:

        -      Full S-band forward and return antennas including all radiating
               elements and filters

        -      S-band and IF electronics for 32 forward and return chains

        -      One forward (internally complete) payload processor, (processing
               half the antenna elements) and one equivalent return processor

        -      Two chains (one for each polarization) of C-band feeder
               electronics using commercial equivalent construction

        -      Brassboard payload control processor (not built to EQM standards)

        -      Non-flight mounting and support

                                     page 5
<PAGE>   154

        -      Frequency reference generator/distribution

        -      Test emulators, which shall be delivered with the payload, will
               be used for the following:

               -    Spacecraft telemetry and command interfaces

               -    Spacecraft control processors interface with payload control
                    processor

               -    Power supplies

        The EM Payload shall provide a fully functional path, forward and
        return, between C-band feeder test couplers and S-band antenna aperture.
        Low gain commercial construction C-band antennas (e.g.: C-band horn)
        shall be provided for radiated coupling to SAN antennas.

        All equipment on the EM Payload shall be built to an Engineering
        Qualification Model standard (EQM), unless otherwise stated. EQM unit
        equipment shall be designed and fabricated with the objective of being
        identical in electrical and mechanical design, physical layout and
        construction to a flight model unit, including any functional redundancy
        within the unit, but generic equivalents to flight standard parts may be
        used and, where applicable, non-flight materials.

        An exception to this is the C-band feeder equipment which may be
        commercial equivalent construction.

        EQM equipment shall be tested to full qualification levels in the case
        of first article units, and to flight acceptance procedures for later
        units in the EM program. In the case of new equipment produced in
        relatively large quantities, testing on later units shall be performed
        with the objective of verifying the flight production test equipment
        hardware, procedures, and software.

        Where possible, the subsystem panel level testing shall be performed
        with the intended flight procedures, but with additional performance
        testing to verify the payload design.

        The EM Payload shall undergo a complete set of performance tests as
        described in Exhibit D, Acceptance Test Plan

        As well as verifying the basic proof of design of the payload, the EM
        Payload shall also verify the proof of concept of the S-band antenna
        calibration and diagnostic facility.

        The EM Payload shall be upgraded to verify proof of design of the
        Tropo/Radar modification. The Tropo/Radar upgrade shall incorporate at
        least:

        -      S-band return path, 8 element chains, configured for the
               Tropo/Radar modification.

        -      One return processor configured for the Tropo/Radar modification.

                                     page 6
<PAGE>   155

        -      One return BCA element slice configured for the Tropo/Radar
               modification.

        -      Frequency reference generator/distribution configured for the
               Tropo/Radar modification.

        -      All remaining, non-redundant hardware incorporated on the payload
               as a consequence of the Tropo/Radar modification.

        All new EM Payload equipment shall be EQM or flight quality to satisfy
        payload development objectives. If mutually agreed to by the Customer
        and Contractor, the use of brass-board equipment may be authorized.

2.4     DELIVERABLE DOCUMENTATION

2.4.1   GENERAL

        All deliverable documentation shall be written in the English language,
        and all deliverable top level and operational documentation and drawings
        dealing with interfaces shall use the international system of units
        (SI). Drawings for fabrication of equipment except for interfaces are
        exempt from using SI units.

        Documentation shall be delivered to the office or the Customer's
        resident manager unless specified otherwise.

2.4.2   CONTRACT DOCUMENTATION REQUIREMENTS LIST (CDRL)

        The documents which require submittal to the Customer are listed in the
        CDRL in Appendix A. Items G1, G2, and G3 are no longer the Contractor's
        responsibility but the Contractor will review changes to those documents
        as required. As required, the Contractor shall update relevant documents
        to reflect changes to engineering design and analyses due to the
        Tropo/Radar modification.

2.4.3   CDRL "INFORMATION", "REVIEW" AND "APPROVAL" DEFINITIONS

        Documents supplied for "Information" require no responding action by the
        Customer.

        Documents supplied for "Review" require a Customer response on their
        acceptability in a timely manner as required to permit continuous
        program progress. Lack of Customer response shall be deemed as
        acceptance.

        Documents supplied for "Approval" must be explicitly approved by the
        Customer. This shall normally take the form of a Customer signature on
        the document approval page. This approval shall be determined by the
        Customer as required to permit continuous program progress.

                                     page 7
<PAGE>   156

2.5     ADDITIONAL DELIVERABLE SERVICES AND EQUIPMENT

        The Contractor shall supply the following additional services and
        equipment:

2.5.1   LAUNCH VEHICLE INTERFACES AND LAUNCH SUPPORT ACTIVITIES

        The Contractor shall perform all the launch vehicle technical interface
        design and interface activities required by the launch service agencies
        and all other activities required to ensure compatibility with the
        launch vehicles in this Contract. The Contractor shall also be
        responsible for transportation of the spacecraft to the launch sites.
        The Contractor shall perform all launch site operations required for
        post shipment checkout and launch preparations. The integration and test
        activities at the launch site shall be as described in Exhibit D
        Acceptance Test Plan.

2.5.2   TT&C COMPATIBILITY TESTS

        During the system level test program, the Contractor shall link the PF1
        spacecraft to the BCC and a suitable set of TT&C commands and telemetry
        parameters agreed to by the Customer shall be exercised to verify
        compatibility. If significant design changes occur after F1 spacecraft
        launch, the next spacecraft implementing the changes shall undergo a
        "delta" compatibility test. The Tropo/Radar modification does not
        involve any changes to the TT&C subsystem or GCE and, consequently, a
        "delta" compatibility test shall not be required for the Tropo/Radar
        test program.

2.5.3   ON-ORBIT COMMISSIONING AND TESTING

        The Contractor shall perform the on-orbit post launch operations,
        through the completion of in-orbit test activities for each spacecraft
        on behalf of the Customer. The commissioning and test activities are
        described in the Acceptance Test Plan (Exhibit D).

        The IOT program shall enable spacecraft to be tested ready for service
        within 6 weeks after arrival on station in the case of the first two
        successful launches, and within 1 month after arrival on station for the
        remainder of the spacecraft.

2.5.4   MISSION OPERATIONS AND SUPPORT

        The Contractor shall perform the following mission and support
        activities for the Customer:

        -      Preparation of the Operations and Mission Manuals.

        -      Satellite Recommended Operating Procedures (ROPs). This document
               shall contain detailed recommended operating procedures,
               operating constraints, a mission description, and satellite
               operating configurations for prelaunch,

                                     page 8
<PAGE>   157

               launch, deployments and on-station operations. Command callouts
               and expected telemetry responses shall be included.

        -      Preparation, including validation, of Flight Operating Procedures
               and appropriate GCE automated procedures.

        -      Preparation and performance of mission operations during launch,
               early orbit operations, initial commissioning and all activities
               leading up to and including in-orbit acceptance testing of each
               spacecraft.

        As needed, manuals and procedures regarding mission operations and
        support will be updated or developed to support operations of spacecraft
        configured with the Tropo/Radar modifications. Hand-over of the
        spacecraft to Customer operations staff shall occur after successful
        completion of the in-orbit test program.

2.5.5   TRAINING

        The Contractor shall develop and conduct a training program that shall
        provide customer personnel the knowledge and skills necessary to operate
        the spacecraft independently throughout its on-station lifetime. The
        training program shall include classroom and structured on-the-job (OJT)
        training, and training will be conducted at the BCC located at the
        Contractor's facility. If updated training is required due to changes in
        satellite operations, the Contractor shall provide such training at the
        Customer's SCC. A complete training program, appropriate for initial
        training, training of replacement staff, and on-going replacement
        training, shall be provided, including student guides, transparencies,
        instructor notes and training video tapes (of the Spacecraft Subsystem
        course). The Dynamic Satellite Simulator (DSS) shall be used extensively
        throughout the training program to provide realistic experience in
        routine and contingency spacecraft operations. The training shall
        utilize appropriate spacecraft and GCE operating instructions (OIs) and
        procedures (PROCs) to be provided by the Contractor. The training
        program, combined with the Contractor's initial operations support
        program, shall ensure that the Customer staff achieve a safe, efficient
        transition to independent operations.

        Individualized training program tracks shall be provided for satellite
        engineers; orbital analysts; satellite controllers; and ground equipment
        and software specialists and technicians.

        The Contractor shall prepare and deliver, at the time of the PDR, a
        detailed training plan for Customer approval. This plan shall describe
        the specific content of courses and other training activities, as well
        as the schedule, the facilities required for each activity, and other
        details of the training program. The training program shall cover the
        spacecraft and all Contractor furnished equipment and software including
        the DSS, IOT equipment system, SCC and SAN GCE.

                                     page 9
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        The Contractor shall also supply appropriate training and associated
        operations and maintenance procedures for the EM Payload upon delivery.

        The Contractor shall supply appropriate training for the PCS at the
        Hughes Facilities in El Segundo, California and/or other Subcontractor
        facilities as needed. The training will be limited to two classes with
        up to 10 students for each class. Each class will not exceed 15 days.

2.5.6   INITIAL OPERATIONAL AND MAINTENANCE SUPPORT

        For a twelve (12) month period after the first successful launch, the
        Contractor shall supply 24 hour operational support with Contractor
        staff present at the SCC, and/or on immediate local on-call support. The
        local support shall be supported by 24 hour telephone on-call detailed
        operational support from the Contractor's satellite manufacturer's
        facility.

        The Contractor shall also supply:

        -      On-call technical support to the spacecraft control center for
               satellite operations through the entire life of the spacecraft
               constellation.

        -      On-call technical support and maintenance of the GCE through the
               entire life of the spacecraft constellation, per section 2.5.9.

        -      On-call technical support and maintenance of the PCS through the
               entire life of the spacecraft constellation, per section 2.5.14.

        -      The contractor shall supply operational support plans or these
               activities.

2.5.7   COMMUNICATIONS NETWORK SUPPORT

        The Contractor shall support development and validation of the overall
        communications system. This support shall be provided by attending
        appropriate technical interface meetings and by working with SANs and
        handset providers under the Customer's guidance and direction, to help
        assure the integrity and satisfactory operation of the integrated
        system.

2.5.8   SPACECRAFT SHIPMENT AND STORAGE

        The Contractor shall be responsible for shipping the spacecraft to the
        launch sites.

        The Contractor shall provide short and long term storage as stipulated
        in the basic Contract.

        The Contractor shall provide detailed shipment and storage plans for
        customer approval.

        The Contractor shall provide storage for partially integrated spacecraft
        during the period of the Tropo/Radar modifications.

                                    page 10
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2.5.9   GCE POST DELIVERY SUPPORT AND SPARES

        In accordance with a ground control operating philosophy approved by the
        Customer, the Contractor shall recommend GCE system sparing ground rules
        and a specific recommended spares list. Spares will be procured
        separately. Post warranty maintenance support shall be provided on a
        time and materials cost basis.

2.5.10  RADAR EMITTER STUDY

        The Contractor shall perform a radar emitter study consisting of the
        following tasks:

<TABLE>
<CAPTION>
        Task   Description                                                            Due Date
        ----   -----------                                                            --------
<S>            <C>                                                                    <C>
        1.       a.   Update prior environmental analysis over 1900 to 2100 MHz
                      using template of S-band receive payload characteristics.       12/20/96
                 b.   Evaluate data bases and incorporate all
                      potential radar down to the equivalent
                      of 1 W at passband for all frequencies
                      (peacetime scenario).
                 c.   Create cumulative vs. orbit time graph.
                 d.   Identify other hot spots.
                 e.   Identify which part of frequency band (lower or higher)
                      has worse interference

        2.     Re-evaluate S-band utilization factors for non-peacetime scenario
               and incorporate into simulation model.                                 2/15/97

        3.     Assuming the availability of appropriate data:                         5/15/97
                 a.   Redo Task 1 adding communications systems for EIRPs
                      greater than 10 dBW (equivalent at passband).
                 b.   Find maximum aggregate levels for each 5 MHz segment of
                      1965-2035 MHz.
                 c.   Identify troposcatter fixed station locations, power,
                      directivity in the 100 MHz passband.
</TABLE>

2.5.11  ADDITIONAL RACKS FOR CFE EQUIPMENT

        The Contractor shall provide a spare rack for CFE equipment at the SCC,
        BCC, and the six (6) TT&C SAN sites (a total of eight spare racks).

2.5.12  REMOTE IOT OPERATIONS

        The Contractor shall provide for the dedicated capability for remote IOT
        operations at both the BCC and the SCC.

                                    page 11
<PAGE>   160

2.5.13  PCS MODEM COMPATIBILITY TEST

        The Contractor shall perform a PCS modem to payload modem check via
        system test equipment. The Contractor is not required to include the PCS
        L-band IF up and down converters or Customer equipment from the SANs.
        Successful completion of PCS modem compatibility test will be limited to
        what is required to confirm the compatibility of the modems and the
        correctness of the command and TM structure.

2.5.14  PCS POST DELIVERY SUPPORT AND SPARES

        In accordance with a ground control operating philosophy approved by the
        Customer, the Contractor shall recommend PCS system sparing ground rules
        and a specific recommended spares list. Spares will be procured
        separately. Post warranty maintenance support shall be provided on a
        time and materials cost basis.

        The Contractor shall provide one PCS engineer to participate in the
        ICONET system integration activity for a six (6) month period to be
        completed no later than 1 December 2002.

2.6     PAYLOAD CONTROL SYSTEM (PCS)

        The PCS equipment will consist of the following:

        -      Six (6) sets of Remote PCS elements, one (1) element installed at
               the following six (6) ICO PCS SANs:

                    -   Brewster, Washington, USA

                    -   Chhattarpur, India

                    -   Brisbane, Australia

                    -   Longovillo, Chile

                    -   Usingen, Germany

                    -   Hartebeesthoek, South Africa

        -      One (1) redundant Central PCS element installed at the Backup SCC
               in El Segundo, CA.

        -      One (1) redundant Central PCS element installed at the Primary
               SCC in London, England.

        -      One (1) non-redundant Display PCS element installed at the
               Primary SCC in London, England.

        -      One (1) non-redundant Display PCS element installed at the Backup
               SCC in El Segundo, CA.

        The Customer shall provide:

        -      Facilities for installation at the two SCCs

        -      SAN site availability at six (6) designated sites to allow
               installation of PCS equipment

        -      Communication links

                                    page 12
<PAGE>   161

        -      Six (6) SAN sites suitably located to support near continuous
               telemetry and command of 12 satellites during early launch
               operations of F1 onwards through to in-service operations of the
               complete constellation.

        The Customer shall provide communications links between all facilities.
        The Contractor's equipment shall interface with these links for all
        necessary site to site communications. Interfaces with these links and
        with all other Customer furnished equipment shall be defined in the
        interface control document described in the Contract's General
        Provisions, Article 29.1 paragraph D.

        The Customer shall provide prepared facilities for the installation of
        the PCS at the satellite control centers, and the PCS SAN sites (the
        same sites used for the TT&C GCE equipment). This includes all
        reasonable services necessary for installation, test and commissioning
        of the PCS. It shall include all interfaces to Customer furnished
        equipment and suitable facilities for physical installation such as
        power, air conditioning, and cable trays. ICO shall make available
        integration support personnel to the Contractor for the purpose of PCS
        installation and test. Post installation, proper maintenance, security,
        and operation will be provided by the Customer. Specific details shall
        be defined in the interface control document described in the Contract's
        General Provisions, Article 29.1 paragraph D.

        The PCS shall support traffic related configurations of the ICO payload.
        The PCS will be comprised of an integrated suite of hardware, software,
        and operations products that collectively will be used to support
        normal, on-station, ICO payload traffic control operations. The PCS will
        provide data to assist in operations relating to satellite diagnostics,
        calibration, payload trending, and short-term storage. PCS will also
        assist IOT and satellite failure investigation efforts as required. It
        is assumed that the PCS system will not interface to the GCE system
        except for a network connection. It is also assumed that the PCS system
        will not perform HPN commanding or interface to the HPN system.

        Relocation services for the PCS elements shall be provided by Contractor
        on a time and materials cost basis, except that costs associated with
        the transportation of the Backup SCC PCS equipment from El Segundo, CA.
        to Japan or to another comparable location selected by Customer shall be
        borne by Contractor.

                                    page 13
<PAGE>   162

3.      PROGRAM MANAGEMENT

        This section defines the program management and reporting activities to
        be performed by the Contractor in execution of the Contract.

        Central to definition of these activities is the assumption that the
        Customer will have an on-site resident team co-located with the
        Contractor program office. This team should be given full program
        visibility and accessibility; and have a highly interactive and largely
        informal real time interface with the Contractor.

3.1     PROGRAM MANAGEMENT PLAN

        The Contractor's management of the program shall comply with the
        requirements defined in the Program Management Plan to be agreed with
        the Customer as required by the CDRL in Appendix A.

3.2     DOCUMENTATION AND DATA MANAGEMENT

        The Contractor shall establish and maintain a centralized documentation
        system to facilitate reduction in delivered paperwork, and implement a
        method of configuration management and control which provides ready
        access of documentation to the resident Customer team. The Contractor
        shall implement, on the Program, automated processes wherever available
        as part of the Hughes IT systems subject to the Corporate security
        guidelines.

        The system shall provide to the Customer the same access and up-to-date
        Program information provided to the Contractor's program staff subject
        to the Corporate security guidelines.

        Full documentation access shall be provided to the Customer resident
        team up to and including in-orbit commissioning of the last delivered
        satellite.

        After departure of the Customer resident team, the Contractor shall
        continue to provide reasonable access to all documentation and data
        which may be needed for in-orbit operations of the spacecraft, including
        detailed anomaly investigation and recovery.

3.3     PROGRESS AND TECHNICAL MEETINGS

3.3.1   WEEKLY PROGRESS MEETINGS

        The resident team shall be invited to the project's regular (weekly)
        progress and technical meetings. These meetings should follow normal
        Contractor practices, but allow Customer participation. This shall
        include subcontractor meetings where applicable, and shall include
        subcontractor progress or technical status

                                    page 14
<PAGE>   163

        reviews requested by the Customer. The frequency of progress meetings
        shall be adjusted as necessary.

3.3.2   QUARTERLY PROGRESS MEETINGS

        Progress meetings shall be held by Customer request at approximately
        quarterly intervals and will consist of plenary sessions, which will
        afford Customer non- resident staff a periodic review of the complete
        status of the program. The Quarterly Progress Meeting can be in lieu of
        any weekly progress meeting and can be combined with major design
        reviews.

3.4     ACTION ITEM CONTROL

        To facilitate closure of action items raised at major design reviews or
        similar meetings, an action item status list shall be maintained and
        reviewed at regular intervals in weekly meetings with the objective of
        ensuring closure dates are achieved.

3.5     PROGRESS REPORTS

        A weekly progress report (one or two pages suitable for transmission to
        the Customer's offices in London) shall be provided to the Customer
        resident office. This summary shall highlight schedule status and
        significant issues or achievements in the past week. The frequency of
        this report will be reviewed and adjusted, as appropriate, through the
        course of the program.

        A detailed monthly progress report shall also be provided to the
        Customer resident office. The format of the report shall be jointly
        agreed between the Contractor and Customer and shall be adjusted over
        the life of the program to appropriately emphasize the evolution of the
        program from design through manufacture, test, delivery and
        commissioning.

        In preparing these reports, it is intended that maximum use be made of
        the Contractor's format for internal status reporting to senior
        management.

3.6     MILESTONE AND INVOICE PAYMENT STATUS AND FORECAST

        -      The Contractor shall present one copy of the monthly status of
               invoices and payments relating to the Contract. The status of
               invoices and payments may be combined in one report, but should
               contain:

        -      milestone identification number and description;

        -      nominal milestone due date;

        -      milestone amount in US dollars;

        -      invoice date and invoice number;

        -      amount of approved payment;

        -      cumulative payment up to the month of issue of the report;

                                    page 15
<PAGE>   164

        -      a monthly forecast of anticipated milestone accomplishments for a
               period of one year form the month of issue of the report; and

        -      the forecast shall include the anticipated completion dates of
               future milestones, as well as of late milestones, if applicable.

3.7     CUSTOMER RESIDENTS

3.7.1   OFFICE ACCOMMODATIONS AND FACILITIES

        The Contractor will provide office space for up to ten Customer
        residents at the spacecraft contractors facility. This includes
        furnished walled offices for three senior managers and up to seven
        individual furnished module offices for other Customer residents. These
        offices will be co-located in the same facility with the Contractor
        Program team. On-site open parking will also be provided. The Customer
        residents will have available a turnaround office for visiting team
        members, a conference room, fax, reproduction machine, refrigerator,
        microwave, coffee and documentation storage facilities. The Contractor
        shall provide access to bulk printing facilities if required. All
        offices and modules will be wired for PC (personal computer) hookup,
        connected to the on-site local server and able to transmit over the
        international network. The on-site senior staff will be connected to the
        phone intercom system. All phones shall have direct dial long distance
        calling capability. All facility security services, cleaning and
        maintenance will be provided by the Contractor. All Customer residents
        will be covered by the Contractor liability insurance policy. The
        Customer will provide its own on-site secretarial support.

        The Contractor offers to the Customer's residents the same information
        systems service used by the Contractor, assessed on a pro rata cost
        basis. This service includes all necessary client (PC) hardware,
        software, maintenance; and all information system infrastructure
        capabilities, including communications, server disc storage and back-up
        and network printing. The information system services provided by the
        Contractor shall be compliant with the International Traffic in Arms
        Regulations (ITAR).

        If the Customer chooses to purchase their own PCs, the Contractor will
        connect the PC to the network as long as the purchased hardware and
        software is compatible with the existing information system
        infrastructure. The required compatibility will be defined by the
        Contractor. The Customer will then be responsible for their own PC
        maintenance, and will be required to upgrade their hardware and software
        as necessary to maintain compatibility with the Contractor information
        system infrastructure. The Customer will also be charged for their pro
        rata costs of the information systems infrastructure.

        The Contractor will invoice the Customer monthly for their prior month's
        long distance calls and information systems and data processing service
        costs. Payments will be due and payable to the Contractor within 30 days
        of the invoice date.

                                    page 16
<PAGE>   165

        The Contractor shall, upon customer request, also provide options for
        suitable office accommodation and facilities for Customer residents at
        Major Subcontractors, and at the Contractors GCE facility.

        The Contractor shall arrange and provide access passes for the Customer
        resident team, for the program duration, which enables free access to
        all relevant areas.

3.7.2   ATTENDANCE AT TECHNICAL REVIEWS AND TESTS

        Customer resident representatives shall be afforded the opportunity to
        participate in regular progress meetings between the Contractor and his
        subcontractors, as well as other meetings on technical and schedule
        matters. Customer resident staff or visiting representatives may witness
        development, qualification and acceptance tests at unit, panel or
        subsystem level and at system level at the Contractor's and
        subcontractors' premises; they shall have access to all test results and
        shall be free to participate in the preparations for tests and the test
        evaluation. The tests which are of interest to the Customer are
        essentially those which verify performance requirement and those
        development tests which are used to demonstrate qualification validity
        at equipment, panel, subsystem and system level.

3.8     SPACECRAFT SCROLL

        A hardware matrix shall be prepared for all spacecraft control items
        showing designation, quantities, and utilization.

3.9     PROGRAM PLANNING NETWORKS AND SCHEDULE CHARTS

        The Contractor shall provide appropriate planning networks, summary and
        detailed schedule charts to assist in the planning and preparation of
        critical program events and for progress evaluation.

                                    page 17
<PAGE>   166

4.      PRODUCT ASSURANCE ACTIVITIES

4.1     GENERAL

        The Contractor shall establish and implement a Product Assurance (PA)
        program in accordance with the requirements defined in Exhibit C for
        Spacecraft related work and Exhibit G for GCE related work. The Product
        Assurance Plans describe the tasks, policies, controls and procedures
        which will be implemented at Contractor, subcontractor and supplier
        levels to ensure that program objectives are successfully met. These
        Plans, together with the Statement of Work, identify the principal areas
        of Customer involvement in the product assurance program.

4.2     QUALIFICATION MATRIX

        The Contractor shall prepare a document that summarizes, for each
        control item, the test requirements, and the manner by which a qualified
        status compliant with the program requirements is achieved. The report
        shall provide references to the appropriate build specifications and
        test data packages. It shall also include information for all equipment
        already qualified on other programs including evidence of heritage,
        qualification tests performed, summary test results and a summary
        comparison with the Contract requirements. The report will be maintained
        current until the completion of all unit, and subsystem qualification
        tests. The report shall be updated to reflect the qualification status
        of hardware designed or upgraded for the Tropo/Radar modification.

4.3     SYSTEMS SAFETY

        The Contractor shall demonstrate compliance with the safety requirements
        of the agencies responsible for the designated launch vehicles by
        implementing the required design controls and test programs which will
        be followed throughout the Contract. System safety and hazard analyses
        and compliance data which demonstrate compliance with the requirements
        of the applicable launch agency shall be provided in support of each
        spacecraft. System safety activities, analyses and reviews shall comply
        with the requirements of Exhibit C Section 7 of the Product Assurance
        Plan. A specific Launch Site Safety Plan and associated documentation
        shall be prepared to meet Launch site and range safety requirements and
        constraints of the launch agency. As needed, system safety plans and
        documentation shall be updated to reflect design changes due to the
        Tropo/Radar modification.

4.4     REQUESTS FOR DEVIATION/WAIVER

        Requests for Deviation/Waiver shall be promptly submitted to the
        Customer for approval whenever a departure from requirements is
        preplanned or whenever a non-conformance to Customer controlled
        requirements is recommended for acceptance without rectification.

                                    page 18
<PAGE>   167

4.5     PRODUCT ASSURANCE DOCUMENTATION

        The Contractor shall prepare the Product Assurance documents and
        analyses which are identified in the Contract Data Requirements List,
        Appendix-A of this SOW, and detailed in the Product Assurance Plan.

                                    page 19
<PAGE>   168

5.      DESIGN, MANUFACTURING AND TEST REVIEWS

5.1     GENERAL

        The Contractor shall conduct or support a series of reviews to be
        performed during the program concerning the status of the development of
        the spacecraft hardware, software, ground support equipment and
        services; the reviews are occasions where the responsible parties for
        each item under review formally concur about its status.

        The following reviews shall be conducted by the Contractor.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
                                                                   Manufact-                                    Launch
                                 Prelimin-    Critical   Final     uring Test    Read-      Test      Pre       Read-
                                 ary Design   Design     Design    Readiness     iness      Review    Ship      iness
                                 Review       Review     Review    Review        Review     Board     Review    Review
                                 (PDR)        (CDR)      (FDR)     (MRR)         (TRR)      (TRB)     (PSR)     (LRR)
-------------------------------------------------------------------------------------------------------------------------
<S>                              <C>          <C>        <C>       <C>           <C>        <C>       <C>       <C>
SPACECRAFT
   -  Equipment (Unit) Level       [X]         [X]                  [X]1,2        [X]2       [X]2
   -  Bus Subsystem level          [X]         [X]                                [X]2       [X]2
   -  Flight Software              [X]         [X]                                [X]3       [X]3
   -  Communications Payload       [X]         [X]
   -  Spacecraft                   [X]         [X]        [X]                                [X]       [X]       [X]
      System
TROPO/RADAR MODIFICATION
-  Equipment (Unit) Level          [X]4        [X]4                 [X]1,2        [X]2       [X]2
-  Communications Payload          [X]4        [X]4                               [X]2
-  Spacecraft System               [X]4        [X]4                               [X]2       [X]       [X]       [X]
GCE SYSTEM                         [X]         [X]
   -  Equipment                    [X]         [X]
   -  Subsystem                    [X]         [X]                                           [X]
   -  System                       [X]         [X]                                           [X]       [X]       [X]
PCS SYSTEM                         [X]         [X]                                           [X]2      [X]
-------------------------------------------------------------------------------------------------------------------------
</TABLE>

1       First article only

2       Informal review except for key equipment

3       Based on Software Qualification Test (SQT)

4       Delta review only for tropo/radar impacts

5.1.1   CONDUCT OF REVIEWS

        Equipment and subsystem level design reviews may be "informal" using
        working documentation in place of presentation documentation or other
        material

                                    page 20
<PAGE>   169

        specifically prepared for the review. Equipment reviews may be merged
        with subsystem reviews, particularly for "heritage" equipment.
        Similarly, bus subsystem reviews may be merged with the spacecraft
        system reviews.

        In general, the Preliminary Design Reviews are reviews to determine the
        flow-down of specification requirements, hence, the System Review should
        precede the Subsystem and Equipment Reviews. The Critical Design Reviews
        are intended to verify designs meet requirements, hence, the Equipment
        and Subsystem Reviews should precede the Communications Payload and
        Spacecraft System Reviews.

        The Communications Payload and Spacecraft System Reviews represent major
        program milestones and hence, require a more formal presentation
        approach. These reviews will be arranged by the Contractor, co-chaired
        by the Contractor and Customer representatives and the outcome of the
        review will be in the form of a summary report prepared by the Customer
        and agreed by the Contractor.

5.1.2   REVIEW DATA PACKAGES

        The typical documentation required to support design reviews is listed
        in the CDRL in Appendix-A. A specific list of analyses and supporting
        documentation shall be jointly agreed 1 month in advance of each review.
        For equipment and subsystem and software reviews, data packages shall be
        delivered two (2) weeks prior to the review. For the Communications
        Payload, Spacecraft System and GCE Reviews, data packages shall be
        delivered four (4) weeks prior to the review. The Customer and his
        consultants will review the data packages and prepare action items to be
        presented prior to or at the review.

5.1.3   COMPLETION OF A REVIEW

        A review shall be considered complete when an Action Item Closure Plan
        is agreed between the Contractor and the Customer. In very exceptional
        circumstances, a review may be sufficiently incomplete to warrant, in
        the opinion of the Customer, a reconvening of the review at a later
        date. The review shall only be considered complete after the follow up
        review is successfully held and completed with an Action Item Closure
        Plan.

        At the completion of each critical design review, the appropriate design
        shall be frozen and placed under formal change control.

5.2     SPACECRAFT SYSTEM, COMMUNICATIONS PAYLOAD, PCS, AND GCE DESIGN REVIEWS

5.2.1   GENERAL

        The Contractor shall be responsible for arranging and conducting
        preliminary and critical design reviews at these levels.

                                    page 21
<PAGE>   170

        Except for the System Preliminary Design Review, the Contractor shall
        not hold a system design review until the corresponding design reviews
        for all subsystems have been completed.

5.2.2   PRELIMINARY DESIGN REVIEWS

        The purpose of Preliminary Design Reviews (PDR) is to allow the
        Contractor to satisfy the Customer formally on the baseline concept,
        configuration and design of the spacecraft. They shall include a
        Specification Requirements Review where the Contractor's system level
        specifications shall be reviewed by the Customer; subsequent changes to
        these specifications shall be subject to Customer approval, in those
        cases where Contract requirements are affected.

        PDRs shall establish the compatibility of external and internal
        interfaces and the compliance of the design with Contract requirements.
        The Spacecraft System PDR shall establish the compatibility of the
        spacecraft with the launch vehicles, as specified in Exhibit B, and with
        the GCE System.

        All system level budgets shall be reviewed at PDRs. The selected design
        concept and its feasibility shall be presented, together with the
        trade-off analyses performed in the design selection process.
        Partitioning of system requirements into subsystem and equipment
        requirements must be provided at the reviews. Completion of these PDRs
        shall establish the initial design baseline and permits the detailed
        design to proceed with minimum risk of major changes being required
        later.

5.2.3   CRITICAL DESIGN REVIEWS

        At Critical Design Reviews (CDR), the Contractor shall formally satisfy
        the Customer on the final design of the spacecraft when the detail
        design is complete. These CDRs shall verify the compatibility of
        subsystem/system interfaces and the compliance of the final spacecraft
        design with the design and performance established at the equivalent
        PDRs, based on available engineering model tests, design studies and
        analyses. The reviews further establish the adequacy of plans and
        preparations for integration, test and operation of the system.

5.2.4   SYSTEM FINAL DESIGN REVIEW

        At the System Final Design Review (FDR), the Contractor shall formally
        satisfy the Customer on the readiness of the Protoflight Model
        Spacecraft for system level testing. The System FDR shall verify
        conformance of the spacecraft system to Contract requirements, based on
        design studies and analyses, and based on the results of all
        qualification or protoflight tests at equipment and subsystem levels,
        including failure reports and their analyses. The System FDR shall
        establish the completeness and adequacy of the flight model acceptance
        test plan, procedures and operations documentation. Any differences
        between the "as-built" status of the spacecraft at FDR and the
        "as-designed" status

                                    page 22
<PAGE>   171

        declared at the CDR shall be explained and justified. All analyses shall
        be updated to reflect the "as-built" design. The system FDR shall
        precede protoflight testing of the first spacecraft.

5.2.5   PCS SYSTEM REQUIREMENT REVIEW

        The purpose of the PCS System Requirement Review (SRR) is to review the
        final requirements for the Payload Control System with the Customer. The
        SRR will address the technical specifications, architecture, and
        external interfaces for the PCS. The focus of the SRR will be to review
        the functional requirements and interfaces and not the detailed design
        of the PCS. At the conclusion of the SRR, the PCS requirements and
        functional requirements for external interfaces shall be considered
        final. The SRR shall be conducted at the Hughes Facilities in El
        Segundo, California.

5.3     SUBSYSTEM LEVEL DESIGN REVIEWS

5.3.1   GENERAL

        The Contractor shall be responsible for arranging and conducting
        Preliminary and Critical Design Reviews at subsystem level. Each design
        review held for a particular subsystem shall represent the completion of
        a stage in the overall development and qualification process of that
        subsystem and shall act as decision milestone before proceeding to the
        next phase. The Contractor shall not hold a critical design review for a
        subsystem until its preliminary design review has been completed and all
        actions have been closed.

        With the exception of the PDR, subsystem design review shall not be
        considered completed until all equipment in that subsystem have
        completed their corresponding design review. This exception shall also
        apply to equipment level reviews of subcontractor "plug compatible"
        designs to be used in later flight spacecraft.

5.3.2   SUBSYSTEM PRELIMINARY DESIGN REVIEWS

        At Subsystem Preliminary Design Reviews (PDR), the Contractor shall
        satisfy the Customer on the baseline concept, configuration,
        specification and design of that item. At the PDR, all subsystem level
        specifications shall be reviewed by the Customer and placed under formal
        configuration control. The credibility of the proposed design concept
        and its ability to satisfy the requirements placed on it shall also be
        formally reviewed. Completion of the PDR shall permit the detailed
        design to proceed with a minimum risk of major changes being required
        later.

5.3.3   SUBSYSTEM CRITICAL DESIGN REVIEWS

        At Subsystem Critical Design Reviews (CDR), the Contractor shall satisfy
        the Customer on the adequacy of the subsystem design and performance
        based on

                                    page 23
<PAGE>   172

        available engineering model tests, design studies and analyses, and on
        the adequacy of the subsystems qualification and acceptance test plans.
        Unless otherwise agreed by the Customer, the qualification tests of any
        subsystem shall not start before completion of the corresponding CDR.

5.4     EQUIPMENT LEVEL DESIGN REVIEWS

5.4.1   GENERAL

        The Contractor shall be responsible for arranging and conducting
        preliminary and critical design reviews at equipment level. Design
        reviews at equipment level may be conducted as working reviews in which
        the Contractor's staff and Customer's representatives together with the
        equipment manufacturer's staff work jointly on the review material until
        it is in a satisfactory state and it becomes the formally accepted
        review package.

5.4.2   EQUIPMENT PRELIMINARY DESIGN REVIEWS

        The purpose of an Equipment Preliminary Design Reviews (PDR) shall be to
        allow the supplier responsible for the item under review formally to
        satisfy the Customer on the baseline concept, configuration,
        specification and design of that item. The PDR shall include a
        Specifications Requirement Review, at which specifications for the
        equipment and in particular the "flow-down" of higher level requirements
        shall be reviewed. The credibility of the proposed design concept and
        its ability to satisfy the requirements placed on it shall also be
        reviewed. Equipment PDR's shall not be held until the corresponding
        Subsystem PDR has been completed. Completion of the PDR shall permit the
        detailed design to proceed with a minimum risk of major changes being
        required later.

5.4.3   EQUIPMENT CRITICAL DESIGN REVIEWS

        At Equipment Critical Design Reviews (CDR) the supplier shall satisfy
        the Customer on the adequacy of the item's design and performance based
        on engineering model tests, design studies and analyses and on the
        item's qualification and acceptance test plans. The Contractor shall not
        hold a Critical Design Review for equipment until its Preliminary Design
        Review has been completed, and all actions have been closed. Unless
        otherwise agreed by the Customer, the assembly of flight equipment shall
        not start before completion of the corresponding CDR.

5.5     FLIGHT SOFTWARE REVIEWS

5.5.1   GENERAL

        The Flight Software Reviews shall conform with the requirements of the
        Software Development Plan (SDP) and shall be agreed with the Customer.

                                    page 24
<PAGE>   173

        The overall review criteria which apply to any subsystem as defined in
        this document shall apply to all software reviews, in addition to the
        specific requirements defined in the MIL-STD documents.

        At the Flight Software Reviews, the Contractor shall demonstrate that
        all requirements, including development, testing and documentation
        requirements, have been met for all parts of the software, including
        third party software (e.g., operating systems) and software already
        developed by the Contractor on other programs.

5.5.2   FLIGHT SOFTWARE PRELIMINARY DESIGN REVIEW

        The purpose of the Flight Software Preliminary Design Reviews (PDR)
        shall be to allow the Contractor to satisfy the Customer on the baseline
        concept, configuration, specification and design of the flight software

        The PDR shall include a Specifications Requirement Review, at which
        specifications for the Flight Software and in particular the "flow-down"
        of higher level requirements shall be reviewed in detail.

        The credibility of the proposed design concept and its ability to
        satisfy the requirements placed on it shall also be formally reviewed.

        Completion of the PDR shall permit the detailed design of the Flight
        Software to proceed with a minimum risk of major changes being required
        later.

5.5.3   FLIGHT SOFTWARE CRITICAL DESIGN REVIEW

        At the Flight Software Critical Design Reviews (CDR) the Contractor
        shall satisfy the Customer on the adequacy of the software design and
        performance based on development tests, design studies and analyses.

        At the Flight Software CDR the Contractor shall formally satisfy the
        Prime Contractor and Customer on the adequacy of the item's
        qualification and acceptance test plans.

        The Contractor shall not hold a Critical Design Review for the Flight
        Software until its Preliminary Design Review has been completed and all
        actions have been closed. The CDR shall precede release of requirements
        for code generation.

        At the completion of the Flight Software CDR, the baseline design shall
        be frozen and the data package updated to reflect all agreed changes;
        subsequent changes to the design and/or documents included in the CDR
        data package shall be subject to the Customer approval.

                                    page 25
<PAGE>   174

        For the purpose of configuration management flight software design
        reviews may be held on a computer software unit (CSU) basis.

5.5.4   SOFTWARE CODE REVIEWS

        At the Software Code Reviews, the Contractor shall "walk through" the
        code in order to allow the Customer to ascertain that the code as
        designed will meet all the specified requirements.

5.5.5   FLIGHT PROM BURN-IN

        Burn-in of software into flight PROM's shall not proceed without
        Customer approval. Sufficient flight software qualification testing
        (FQT), shall be completed prior to burn-in to minimize the risk of
        flight RAM patches being required.

5.6     MANUFACTURING READINESS REVIEWS

        A working level Manufacturing Readiness Review (MRR) shall be held for
        units to be mutually agreed with the Customer. These shall normally only
        be held for first article builds.

        The MRR shall address the following:

        -      confirmation that all development work has been completed;

        -      confirmation that all parts, materials and processes have been
               approved;

        -      readiness of formally released drawing sets including workmanship
               standards and procedures;

        -      confirmation that all manufacturing facilities have been
               identified and approved; and

        -      acceptibility of manufacturing flow documentation, which shall
               show all activities in their proper call-up procedures and
               processes as required and shall identify critical operations and
               all mandarory and key inspection points in which the customer may
               elect to participate, on a non interference basis.

        -      The Contractor shall ensure that all subsequent changes to the
               manufacturing documentation are reviewed and controlled in
               compliance with the Contractor's documentation control procedure
               described in the Program Management Plan.

5.7     TEST REVIEWS

5.7.1   GENERAL

        In general, working level test reviews shall be organized by the
        Contractor before and after each test. Exceptions may be agreed with the
        Customer for large volume equipments, where alternative review
        approaches may be substituted.

                                    page 26
<PAGE>   175

        It is intended that these reviews be conducted in the normal course of
        work, making use of the Contractor's standard processes, procedures, and
        data display to the maximum extent practicable.

5.7.2   TEST READINESS REVIEWS

        The purpose of the Test Readiness Reviews is to assess the readiness of
        the spacecraft panel, subsystem or equipment to be tested, as well as
        the readiness of the test environment to support the testing. This
        applies to acceptance, protoflight or qualification tests. For the
        protoflight spacecraft, the TRR shall not to be held before the system
        Final Design Review.

5.7.3   TEST REVIEW BOARD

        A more formal Test Review Board (TRB) shall convene following major test
        phases of key equipment, panel, subsystem and system level testing for
        the purpose of examining the adequacy of the test results, and to define
        the actions required in response to any discrepancies encountered during
        the test.

5.8     PRE-SHIPMENT REVIEW

        Each spacecraft shall undergo a pre-shipment review (PSR) in accordance
        with Article 8 of the Contract. A pre-shipment review shall also be held
        for the GCE following FAT.

        An End Item Data Package (EIDP) consisting of the following data shall
        be provided for the review:

        -      "As-built" configuration

        -      Reconciliation of "as-built" vs "as designed" configuration

        -      Summary of "open items"

        -      Copies of Non-conformance Reports, Failure Reports, Waivers and
               deviations available on request

        -      Mate/Demate logs and Installation/Removal logs available for
               review

        -      Test data compliance matrix

5.9     LAUNCH READINESS REVIEW

        Prior to integration of the spacecraft to the Launch Vehicle, a Launch
        Readiness Review (LRR) shall be held in accordance with Article 8 of the
        Contract. The LRR shall also address the readiness of the GCE system to
        support launch and subsequent operations.

                                    page 27
<PAGE>   176
Exhibit A  Statement of Work                       24 August 2000 -  Amendment 7
Satellite Contract                              Contract Number: ICOO/95-1002/NR

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       MANAGEMENT DOCUMENTS

<TABLE>
<CAPTION>
                                                                                             NO OF
  NO.             ITEM               SUBMISSION REQUIREMENT           SUBMISSION CRITERIA   COPIES               COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S>    <C>                        <C>                            <C>                        <C>     <C>
M1     Program Management Plan    At EDC, and whenever updated   Approved at EDC              10    Including organizational charts
       (PMP)                                                                                        and IPT structure
M2     Spares Plan                System PDR                     Approval                     10    Update to PMP
M3     Shipping, Transportation   System PDR                     Approval                     10    Included in PMP
       and Storage Plan
M4     Review Action Item         Within one week of review      Approval                     10
       Closure Plan               meeting
M5     Action Item Responses      In accordance with action      Review or approval, as       10
                                  due date                       applicable
M6     Weekly Progress Report     Weekly                         Information                  10
M7     Monthly Program Progress   Monthly, each progress         Information                  15    Including:
       Reports                    report, or on request                                             Action Item Status List
                                                                                                    Summary Program Schedule
                                                                                                    Critical Equipment Schedule
                                                                                                    Analysis
                                                                                                    Milestone and Invoice Payment
                                                                                                    Status
                                                                                                    Milestone Payment Forecast
M8     Contract Change Notice     As required, or within 30      Approval                      3
       (CCN)                      days of receipt of a Change
                                  Request (CR)
M9     Spacecraft Scroll          At EDC                         Approved at EDC              10    Included in PMP
M10    Training Plan              PDR and whenever updated       Approval
M11    Mission Operations Plan    Preliminary at EDC and         Approved at CDR              25
                                  whenever updated
M12    Detailed Program Schedules Upon request                   Information                  --
M13    System Interface Schedules Upon request                   Information                  --    Includes Customer/Contractor key
                                                                                                    interface schedule milestone
</TABLE>

                                       1
<PAGE>   177

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       MANAGEMENT DOCUMENTS (CONTD.)

<TABLE>
<CAPTION>
                                                                                            NO OF
  NO.             ITEM               SUBMISSION REQUIREMENT           SUBMISSION CRITERIA   COPIES                COMMENTS
------------------------------------------------------------------------------------------------------------------------------------
<S>    <C>                        <C>                            <C>                        <C>      <C>
M14    Communication Network      At PDR                         Approval                     10
       Support Plan
M15    Life Time Support Plan     At EDC,and whenever updated    Review                       10
</TABLE>

                                       2
<PAGE>   178

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       ENGINEERING DOCUMENTS

<TABLE>
<CAPTION>
                                            SUBMISSION                                 NO OF
  NO.                ITEM                  REQUIREMENT        SUBMISSION CRITERIA      COPIES      COMMENTS            REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                              <C>                    <C>                      <C>       <C>                   <C>
E1    Subsystem Specifications         Appropriate design     Review                     10
                                       review data
                                       packages and
                                       whenever updated
E2    Equipment Specifications         Appropriate design     Review                     10
                                       review data
                                       packages and
                                       whenever updated
E3    Design Review Data Package       Appropriate design     Review                     10
                                       review data
                                       packages and
                                       whenever updated
E4    Stress, Fracture and Dynamic     Appropriate design     Review                     10
      Analysis                         review data
                                       packages and
                                       whenever updated
E5    Antenna Pointing Error Analysis  Appropriate design     Review                     10
                                       review data
                                       packages and
                                       whenever updated
E6    Antenna Pointing Error Budget    Appropriate design     Review                     10      Summary in MPR
                                       review data
                                       packages and
                                       whenever updated
E7    Propellant Budget Analysis       Appropriate design     Review                     10      Summary in MPR
                                       review data
                                       packages and
                                       whenever updated
E8    Mass Properties Analysis         Appropriate design     Review                     10      Summary in MPR
                                       review data
                                       packages and
                                       whenever updated
E9    DC Power Budget Analysis         Appropriate design     Review                     10      Summary in MPR
                                       review data
                                       packages and
                                       whenever updated
E10   Mission Analysis                 Appropriate design     Review                     10
                                       review data
                                       packages and
                                       whenever updated
</TABLE>

                                       3
<PAGE>   179

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       ENGINEERING DOCUMENTS (CONTD.)

<TABLE>
<CAPTION>
                                                                                  NO OF
  NO.            ITEM            SUBMISSION REQUIREMENT    SUBMISSION CRITERIA    COPIES           COMMENTS            REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                        <C>                      <C>                     <C>       <C>                   <C>
E11   Electromagnetic            Appropriate design       Review                    10
      Compatibility (EMC)        review data packages
      Analyses                   and whenever updated
E12   Radiation Effect Analyses  Appropriate design       Review                    10
                                 review data packages
                                 and whenever updated
E13   Spacecraft Charging        Appropriate design       Review                    10
      Analysis                   review data packages
                                 and whenever updated
E14   Spacecraft Contamination   Appropriate design       Review                    10
      Analysis                   review data packages
                                 and whenever updated
E15   Spacecraft Venting         Appropriate design       Review                    10
      Analysis                   review data packages
                                 and whenever updated
E16   Communications Subsystem   Appropriate design       Review                    10
      Analyses                   review data packages
                                 and whenever updated
E17   Telemetry, Telecommand     Appropriate design       Review                    10
      and Ranging Subsystem      review data packages
      Analyses                   and whenever updated
E18   Thermal Control Subsystem  Appropriate design       Review                    10
      Analyses                   review data packages
                                 and whenever updated
E19   Structure Subsystem        Appropriate design       Review                    10
      Analysis                   review data packages
                                 and whenever updated
E20   Electrical Power           Appropriate design       Review                    10
      Subsystem Analysis         review data packages
                                 and whenever updated
</TABLE>

                                       4
<PAGE>   180

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       ENGINEERING DOCUMENTS (CONTD.)

<TABLE>
<CAPTION>
                                                                                   NO OF
  NO.            ITEM            SUBMISSION REQUIREMENT    SUBMISSION CRITERIA     COPIES          COMMENTS          REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                        <C>                      <C>                      <C>     <C>                       <C>
E21   Attitude Determination &   Appropriate design       Review                     10
      Control Subsystem Analysis review data packages
                                 and whenever updated
E22   Propulsion Subsystem       Appropriate design       Review                     10
      Analysis                   review data packages
                                 and whenever updated
E23   Mechanisms Analysis        Appropriate design       Review                     10
                                 review data packages
                                 and whenever updated
E24   EGSE and MGSE Analyses     Appropriate design       Review                     10
                                 review data packages
                                 and whenever updated
E25   Worst Case Analysis        Appropriate design       Review                     10
                                 review data packages
                                 and whenever updated
E26   System Summary             Preliminary at EDC,      Review                     25    Spacecraft including GCE
                                 System Review design                                      interfaces
                                 reviews and whenever
                                 updated
E27   Recommended Operating      Outline at PDR, first    Review                     25    Including mission and
      Procedures                 issue at CDR, final at                                    on-station operations
                                 FDR
E28a  Spacecraft-Ground          Appropriate design       Draft at EDC + 2 mos       25
      Interface Control          review data packages     Preliminary at PDR
      Document: TT&C             and whenever updated     Final at CDR
      Interfaces
E28b  Spacecraft-Ground          Appropriate design       Draft at EDC + 2 mos       25
      Interface Control          review data packages     Preliminary at PDR
      Document:  Payload         and whenever updated     Final at CDR
      Control Interfaces
</TABLE>

                                       5
<PAGE>   181

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       ENGINEERING DOCUMENTS (CONTD.)

<TABLE>
<CAPTION>
                                                                               NO OF
  NO.           ITEM           SUBMISSION REQUIREMENT     SUBMISSION CRITERIA  COPIES         COMMENTS              REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                      <C>                      <C>                    <C>       <C>                        <C>
E29   Fracture Control Plan    Appropriate design       Review                    5
                               review data packages
                               and whenever updated
E30   Spacecraft Interface     Appropriate design       Review                    25     Parfitt type diagrams
      Schematics               review data packages
                               and whenever updated
E31   Detailed unit level      Appropriate design       Review                    10
      design description       review data packages
                               and whenever updated
E32   Training Course for      1 month before course    Review                    25
      Spacecraft Operations
      Personnel
E33   EM Payload O&M Manual    At EM payload delivery   Review                    3
E34   EM Payload ICD           At spacecraft PDR        Approval                  10
E35   Spacecraft On-station    Draft at FDR             Review                    15     Including associated
      and Mission Procedures   First issue at PSR                                        automated GCE based
                               Final at LRR                                              procedures and software
E36   Operating Instructions   First issue at SAT       Review                    15     Including nominal and
      (OIs)                    Final at S/C handover                                     contingency
E37   Operating Procedures     First issue at SAT       Review                    15     Including nominal and
      (PROCs)                  Final at S/C handover                                     contingency
E38   Satellite Data Book      First issue at PSR       Review                    15     One for each spacecraft
                               Final at S/C handover
E39   Satellite Telemetry,     Draft at PDR             Review                    15
      Command Lists            First issue at CDR
                               Updates as needed
E40   Design Verification      Draft at System PDR      Review                    10
      Matrix                   First issue at System
                               CDR
</TABLE>

                                       6
<PAGE>   182

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       SPACECRAFT TEST DOCUMENTS

<TABLE>
<CAPTION>
                                                                   SUBMISSION     NO OF
  NO.            ITEM               SUBMISSION REQUIREMENT          CRITERIA      COPIES            COMMENTS           REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                        <C>                             <C>              <C>      <C>                         <C>
T1    Equipment and Subsystem    2 weeks before start of         Review             2
      Test Procedures            testing
T2    Equipment Test             At working reviews              Review             2      Customer will have
      Data/Reports                                                                         access to all testing
                                                                                           in progress and real
                                                                                           time test results
T3    Panel and Subsystem Test   At test review boards           Review             5      Customer will have
      Data/Reports                                                                         access to all testing
                                                                                           in progress and real
                                                                                           time test results
T4    Spacecraft Test Procedures Preliminary 30 days before      Review
                                 CDR
                                 Final 30 days before FDR
T5    Spacecraft Test            At test review boards           Review             5
      Data/Reports
T6    EGSE/MGSE Design           Appropriate design review       Review             5
      Descriptions               data packages and whenever
                                 updated
T7    Launch Operation and       Detailed report, within 1       Review             5
      Deployment and IOT Report  month
                                 Summary report within 1 week
T8    System/Bus IOT Test        First issue, 1 month before     Review             5
      Procedures                 rehearsals                      Review
                                 Final, 1 month before launch
T9    Spacecraft Payload IOT     Initial at IOT system           Review             --
      Procedures                 installation                                              Including associated
                                 Update at launch - 1 month                                applications software
                                 Final at completion of IOT
</TABLE>

                                       7
<PAGE>   183

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       - GCE SYSTEM SPECIFIC DOCUMENTS

<TABLE>
<CAPTION>
  NO.              ITEM               SUBMISSION REQUIREMENT             SUBMISSION CRITERIA  NO OF COPIES         COMMENTS
        ---------------------------------------------------------------------------------------------------------------------------
<S>     <C>                        <C>                                  <C>                   <C>           <C>
G1      Facilities Requirements    N/A                                  N/A                        10
        Document*
G2      TT&C Ground to NMC         N/A                                  N/A                        10
        Interface Control
        Document (ICD)*
G3      TT&C Ground to SAN         N/A                                  N/A                        10
        Interface Control
        Document*
G4      Ground System Design       PDR, CDR                             Approval                   10       Final at CDR
        Specification
G5      In-Orbit Test Subsystem    PDR, CDR                             Approval                   10
        Design Specification
G6      PDR and CDR Data Packages  PDR, CDR                             Review                     10
G7      PDR and CDR Minutes        PDR, CDR                             Review                     10
G8      FAT and SAT Test           1 month before test                  Review                     10
        Procedures
G9      FAT and SAT Test Reports   Summary report, 1 week after test    Review                     10
                                   Detailed report, 1 month after test
G10     Site Installation Plan     2 months before installation         Approval                   10
G11     Interconnect Drawings      PDR, CDR, FAT                        Review                     10
G12     As-Built Drawings          FAT                                  Review                     10
G13     Ground Software Manuals    CDR, SAT                             Review                     10       Outline at CDR
G14     COTS Software Vendor       CDR, FAT                             Review                     10
        Supplied Manuals
G15     Ground Equipment Vendor    CDR, FAT                             Review                     10
        Supplied Manuals
G16     Hughes Ground Equipment    CDR, SAT                             Review                     10       Outline at CDR
        O&M Manuals
</TABLE>

* No longer a Contract Deliverable Document (Customer has assumed
responsiblility for these Documents)

                                       8
<PAGE>   184

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       GCE SYSTEM SPECIFIC DOCUMENTS (CONTD.)

<TABLE>
<CAPTION>
                                                                                          NO OF
  NO.              ITEM               SUBMISSION REQUIREMENT        SUBMISSION CRITERIA   COPIES            COMMENTS
------------------------------------------------------------------------------------------------------------------------------
<S>     <C>                        <C>                             <C>                    <C>      <C>
G17     System O&M Manuals         CDR, SAT                        Review                   10     Outline at CDR
G18     Ground System Training     1 month before course           Review                   25     Includes all equipment
        Course                                                                                     hardware and software
G19     Recommend GCE Spares List  PDR                             Review                   10
G20     Operations Concept         PDR                             Information              10
G21     DSS Test Plan              Draft PDR                       Approval                  5     Final at CDR
G22     IOT Subsystem Test Plan    Draft PDR                       Approval                  5     Final at CDR
</TABLE>

                                       9
<PAGE>   185

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       PRODUCT ASSURANCE

<TABLE>
<CAPTION>
                                                                                    NO OF
  NO.            ITEM              SUBMISSION REQUIREMENT      SUBMISSION CRITERIA  COPIES             COMMENTS           REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                       <C>                           <C>                   <C>      <C>                          <C>
P1    Product Assurance Plan    By CCN, as required           Approval                10     Basic document approved
                                                                                             at EDC
P2    Audit Results             Upon request                  Information              1     Available on request
P3    Subcontractor             30 days EDC                   Review                   2     Resubmit as revised
      Requirements Matrix
P4    Subtier PA Plans          As received                   Review                   1     Provide to on-site
                                                                                             Customer Office
P5    Failure Status            Monthly                       Information             --     Included in progress
                                                                                             reports
P6    PA Status Reports         Monthly                       Information             --     Included in progress
                                                                                             reports
P7    Key Inspection Points     At MRR                        Review                   1     Provide to on-site
                                                                                             Customer Office
P8    Non-conformance Reports   As issued                     Review                   1     Provide to on-site
                                                                                             Customer Office
P9    Software Quality Plan     60 days EDC                   Approval                10
P10   Reliability Analysis      30 days before design review  Review                  10     Include in design review
                                                                                             Package
P11   Failure Rate Data         30 days prior to design       Review                   1     Customer concurrence
                                review
P12   Parts Derating Analysis   30 days before CDR/FDR        Review                  10     Include in design review
                                                                                             Package
P13   Parts Derating Exceptions As issued to PMPCB            Approval                 1     Provide to on-site
                                                                                             Customer Office
P14   Derating Exceptions List  30 days prior to CDR/FDR      Review                  10     Include in design review
                                                                                             Package
P15   FMECA                     30 days prior to design       Review                  10     Include in design review
                                review                                                       Package
P16   Single Point Failure List 30 days prior to design       Approval                10     Include in design review
                                review                                                       Package
</TABLE>

                                       10
<PAGE>   186

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       PRODUCT ASSURANCE (CONTD.)

<TABLE>
<CAPTION>
                                                                                      NO OF
  NO.            ITEM              SUBMISSION REQUIREMENT      SUBMISSION CRITERIA   COPIES              COMMENTS         REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                       <C>                           <C>                    <C>      <C>                         <C>
P17   Wearout Analysis          30 days prior to design       Review                   10     Include in design review
                                review                                                        Package
P18   Critical Items List       30 days prior to design       Review                   10     Include in design review
                                review                                                        Package
P19   Failure Notification      Within 24 hours of reported   Information               1     E-Mail or hard copy to
                                failure                                                       on-site Customer Office
P20   Failure Reports           As issued; within 7 days of   Review                    1     Provide to on-site
                                notification                                                  Customer Office
P21   Failure Analysis Reports  As issued; within 7 days      Review                    2     Provide to on-site
                                completion                                                    Customer Office
P22   Failure Review Board      As issued                     Information               1     Provide to on-site
      Minutes                                                                                 Customer Office
P23   Authorized Parts Lists    As issued                     Review                    5     Provide to on-site
                                                                                              Customer Office
P24   Summary Parts Lists       As issued                     Information               1     Available for design
                                                                                              review
P25   Authorized Materials &    As issued                     Review                    5     Provide to on-site
      Processes List                                                                          Customer Office
P26   Parts & Materials         As issued                     Review                    1     Concurrence at PMPCB
      Approval Requests
P27   System Safety Program     30 days prior to PDR          Information               5     Provide as revised
      Tasks
P28   System Safety Compliance  30 days prior to Safety       Review                    5
      Data and Hazard Analysis  Reviews
P29   Launch Site Safety Plan   6 months prior to launch      Review                    5
P30   Qualification Status      Draft at PDR                  Review                   10     Resubmit as revised
      Reports
P31   Flight Hardware IT        As hardware is delivered      Information              10     Contains hardware summary
      Delivery Notices                                                                        data
</TABLE>

                                       11
<PAGE>   187

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       PRODUCT ASSURANCE (CONTD.)

<TABLE>
<CAPTION>
                                                                                NO OF
  NO.            ITEM           SUBMISSION REQUIREMENT    SUBMISSION CRITERIA   COPIES             COMMENTS             REFERENCE
------------------------------------------------------------------------------------------------------------------------------------
<S>   <C>                    <C>                         <C>                    <C>      <C>                            <C>
P32   Requests for           As issued                   Approval                  2
      Deviation/Waiver
P33   Eng Change Notices     As issued                   Information               1     Review at program level CRB
P34   Specification Tree     As issued                   Information               5
</TABLE>

DRL Notes 1) The number of copies to be supplied may be reduced if electronic
document transfers are used.

                                       12
<PAGE>   188

           APPENDIX A: CONTRACT DOCUMENTATION REQUIREMENT LIST (CDRL)
                       PCS SYSTEM SPECIFIC DOCUMENTS

<TABLE>
<CAPTION>
   NO.              ITEM                     SUBMISSION REQUIREMENT       SUBMISSION CRITERIA   NO OF COPIES        COMMENTS
          --------------------------------------------------------------------------------------------------------------------------
<S>       <C>                             <C>                             <C>                   <C>                 <C>
PCS 1     PDR and CDR Data Packages       PDR, CDR                        Review                     10
PCS 2     PDR and CDR Minutes             PDR, CDR                        Review                     10
PCS 3     Detailed PCS Equipment Scroll   CDR                             Review                     10
PCS 4     Interconnect Drawings           Preliminary: CDR                Review                     10
                                          Final: FAT
PCS 5     Recommend PCS Spares List       CDR                             Information                10
PCS 6     PCS Test Plan                   CDR                             Review                     10
PCS 7     FAT and SAT Test Procedures     1 month before test             Review                     10
PCS 8     FAT and SAT Test Reports        Summary report, 1 week after    Review                     10
                                          test
                                          Detailed report, 1 month
                                          after test
PCS 9     COTS Software Vendor             SAT                            Information                10
          Supplied Manuals
PCS 10    Ground Equipment vendor         Preliminary: SAT                Information                10
          and/or O&M Manuals              Final: SAT + 40 WD
PCS 11    PCS User Manual                 Preliminary: SAT                Information                10
                                          Final: SAT + 40 WD
PCS 12    PCS Training Materials          At training class               Information                20
</TABLE>

                                       13
<PAGE>   189

Exhibit B Satellite Technical Specification         25 August 2000 - Amendment 7
Satellite Contract                             Contract Number:  ICOO/95-1002/NR

                        CONTRACT NUMBER ICOO/95-1002/NR

    ------------------------------------------------------------------------
                                    EXHIBIT B
                               SATELLITE TECHNICAL
                                  SPECIFICATION
    ------------------------------------------------------------------------

                                 25 AUGUST 2000

<PAGE>   190

                                TABLE OF CONTENTS

<TABLE>
<S>                                                                                   <C>
    ACRONYMS                                                                            XV

    1.   INTRODUCTION                                                                    1

    2.   SPACECRAFT SYSTEM REQUIREMENTS                                                  1

         2.1     General                                                                 1

         2.2     Orbital Requirements                                                    1
                 2.2.1    Orbit Definition                                               1
                 2.2.2    Orbital Life                                                   2
                 2.2.3    Orbit Acquisition and Reconfiguration                          2

         2.3     Launch Requirements                                                     3
                 2.3.1    Launch Vehicles                                                3
                 2.3.2    Launch Vehicle Users' Manual                                   3
                 2.3.3    Launch Mass                                                    3
                 2.3.4    Airborne Support Equipment                                     3
                 2.3.5    Launch Windows                                                 3

         2.4     Definition of Coordinate Axes, Attitude Angles and Torques              4
                 2.4.1    Spacecraft Axes                                                4
                 2.4.2    Attitude Angles                                                4
                 2.4.3    Torques                                                        4

         2.5     Antenna Beam Pointing Accuracy                                          5
                 2.5.1    Functional Requirements                                        5
                 2.5.2    Design Requirements                                            5

         2.6     Spacecraft Reliability Requirements                                     6
                 2.6.1    General                                                        6
                 2.6.2    Spacecraft Services                                            6
                 2.6.3    Reliability                                                    6
                 2.6.4    Outages                                                        6
                 2.6.5    Single Point Failures                                          7
                 2.6.6    Safe Modes                                                     7
                 2.6.7    Software Reliability                                           8
                 2.6.8    Safe Disposal                                                  8
                 2.6.9    Space Debris                                                   8

         2.7     Radiation Environment                                                   8

         2.8     Operational Requirements                                                8
                 2.8.1    Spacecraft Autonomy                                            8
                 2.8.2    Automatic Functions                                            9

    3.   COMMUNICATIONS SUBSYSTEM                                                       10

         3.1     General                                                                10

         3.2     Overall Communications Payload Characteristics                         11
                 3.2.1    General                                                       11
</TABLE>

                                       ii
<PAGE>   191

<TABLE>
<S>                                                                                    <C>
                 3.2.2    Transponder Characteristics                                   11
                 3.2.3    Frequency Bands                                               12

         3.3     Antenna Coverage                                                       14
                 3.3.1    S-band Coverage                                               14
                 3.3.2    S-band Beam Congruence                                        15
                 3.3.3    S-band Beam Polarisation Axial Ratio                          15
                 3.3.4    S-band Beam Isolation                                         16
                 3.3.5    C-band Coverage                                               17
                 3.3.6    C-band Polarisation Axial Ratio                               17

         3.4     EIRP and G/T Performance                                               18
                 3.4.1    S-band EIRP Requirements                                      18
                 3.4.2    S-band EIRP Flexibility                                       20
                 3.4.3    S-band G/T Requirements                                       20
                 3.4.4    C-band EIRP Requirements                                      21
                 3.4.5    C-band G/T Requirements                                       22

         3.5     Payload Performance                                                    23
                 3.5.1    Intermodulation Product                                       23
                 3.5.2    Transponder Channelisation                                    24
                 3.5.3    C-to-C Transponder Channelisation                             28
                 3.5.4    HP-SMS Transponder Channelisation                             28
                 3.5.5    Signal Dynamics                                               29
                 3.5.6    Transmission Channel Gain Requirements                        32
                 3.5.7    Frequency Accuracy                                            34
                 3.5.8    Phase Linearity                                               34
                 3.5.9    Phase Noise                                                   35
                 3.5.10   In-band and Close-to-Band Spurious Emissions                  36
                 3.5.11   Self Interference Criterion                                   36
                 3.5.12   Out-of-Band Emissions                                         36
                 3.5.13   Out-of-Band Response                                          37
                 3.5.14    Overload Capability                                          38
                 3.5.15   Multi-Carrier Operational and Test Condition                  41

         3.6     Payload Resource Management System                                     41
                 3.6.1    Resource Management Functions                                 41
                 3.6.2    Resource Management System Communications Links               45

         3.7     HP-SMS Management System                                               46
                 3.7.1    HP-SMS Management Functions                                   46
                 3.7.2    HP-SMS Management System Command Link                         49

         3.8     On-board Test and Correction                                           49
                 3.8.1    DRA Chain Autonomous Calibration                              49
                 3.8.2    DRA Chain Diagnostics                                         50
                 3.8.3    Channeliser/Beamforming Diagnostics                           50
                 3.8.4    Health and Status Information                                 50

         3.9     Interface Requirements                                                 50
                 3.9.1    Main Power Bus                                                50
                 3.9.2    Telecommand Requirements                                      50
</TABLE>

                                       iii
<PAGE>   192

<TABLE>
<S>                                                                                    <C>
                 3.9.3    Telemetry Requirements                                        51

         3.10    Reliability Requirements                                               51
                 3.10.1   Reliability Approach                                          51

    4.   TELEMETRY, TRACKING AND COMMAND SUBSYSTEM                                      52

         4.1     Functional Description                                                 52

         4.2     Radio Frequency Requirements                                           52
                 4.2.1    General Requirements                                          52
                 4.2.2    Downlink                                                      52
                 4.2.3    Uplink                                                        54
                 4.2.4    Antenna Requirements                                          55

         4.3     Telemetry Subsystem                                                    56
                 4.3.1    General Requirements                                          56
                 4.3.2    Telemetry Baseband Requirements                               57
                 4.3.3    Telemetry Format - General Requirements                       57
                 4.3.4    "Normal Mode" Telemetry Format                                58
                 4.3.5    "Dwell Mode" Telemetry Format                                 58
                 4.3.6    Spare Capacity                                                59

         4.4     Command Subsystem                                                      59
                 4.4.1    General Requirements                                          59
                 4.4.2    Telecommand Baseband Parameters                               61
                 4.4.3    Command Link Performance                                      61
                 4.4.4    Command Security                                              61
                 4.4.5    Command Message Format                                        62
                 4.4.6    Command Execution                                             62
                 4.4.7    Time-tagged Command Facility                                  62
                 4.4.8    Spare Capacity                                                63

         4.5     Ranging                                                                63
                 4.5.1    Functional Requirements                                       63
                 4.5.2    Performance Requirements                                      64

         4.6     Interface Requirements                                                 64
                 4.6.1    General                                                       64
                 4.6.2    Main Power Bus                                                64
                 4.6.3    Telecommand Requirements                                      64
                 4.6.4    Telemetry Requirements                                        64
                 4.6.5    TT&C Ground-to-Spacecraft Interface                           65

    5.   ATTITUDE AND ORBIT CONTROL SUBSYSTEM (AOCS)                                    67

         5.1     Functional Description                                                 67

         5.2     Attitude Determination                                                 67
                 5.2.1    General                                                       67
                 5.2.2    Operational Orbit                                             67

         5.3     Attitude and Orbit Control                                             67
                 5.3.1    General                                                       67
</TABLE>

                                       iv
<PAGE>   193

<TABLE>
<S>                                                                                    <C>
                 5.3.2    Operational Orbit                                             67
                 5.3.3    Design Margins                                                68
                 5.3.4    Control Bias Capability                                       68
                 5.3.5    Unit and Reference Switching                                  68

         5.4     Fault Protection                                                       69
                 5.4.1    Redundancy                                                    69
                 5.4.2    Automatic Failure Detection & Switching                       69
                 5.4.3    Safe Modes                                                    70
                 5.4.4    Reacquisition                                                 71

         5.5     Interface Requirements                                                 71
                 5.5.1    Propulsion Interfaces                                         71
                 5.5.2    Main Power Bus                                                71
                 5.5.3    Telecommand Requirements                                      71
                 5.5.4    Telemetry Requirements                                        72
                 5.5.5    Mechanical                                                    73

    6.   PROPULSION SUBSYSTEM                                                           74

         6.1     Functional Description                                                 74

         6.2     Functional Requirements                                                74
                 6.2.1    Liquid Propellant Subsystems                                  74
                 6.2.2    Liquid Propellant Storage & Feed Components                   75
                 6.2.3    Liquid Propellant Thrusters                                   76
                 6.2.4    Redundancy                                                    77

         6.3     Propellant Budgets                                                     78
                 6.3.1    General                                                       78
                 6.3.2    Liquid Propellants                                            78
                 6.3.3    Budgeting Methodology                                         78

         6.4     Subsystem Interfaces                                                   80
                 6.4.1    AOCS                                                          80
                 6.4.2    Main Power Bus                                                80
                 6.4.3    Telemetry Requirements                                        80
                 6.4.4    Telecommand Requirements                                      81
                 6.4.5    Thermal                                                       81

    7.   ELECTRICAL POWER SUBSYSTEM                                                     82

         7.1     Functional Description                                                 82

         7.2     Functional Requirements                                                82
                 7.2.1    Power Budget                                                  82

         7.3     Solar Array                                                            83
                 7.3.1    Array Capability                                              83
                 7.3.2    Array Drive and Power Transfer Assembly                       83

         7.4     Battery                                                                84
                 7.4.1    Battery Configuration                                         84
                 7.4.2    Battery Capacity                                              84
</TABLE>

                                       v
<PAGE>   194

<TABLE>
<S>                                                                                    <C>
                 7.4.3    Battery Charge Management                                     84
                 7.4.4    Battery Storage                                               85

         7.5     Power Conditioning                                                     85
                 7.5.1    General                                                       85
                 7.5.2    Main Bus Ripple                                               85

         7.6     Power Distribution and Protection                                      86
                 7.6.1    General                                                       86
                 7.6.2    Automatic Loadshed Facility                                   86

         7.7     Interface Requirements                                                 87
                 7.7.1    Telecommand Requirements                                      87
                 7.7.2    Telemetry Requirements                                        87

    8.   THERMAL CONTROL SUBSYSTEM                                                      88

         8.1     Functional Description                                                 88

         8.2     Subsystem Performance Requirements                                     88
                 8.2.1    General                                                       88
                 8.2.2    Analytical Margins                                            89

         8.3     Subsystem Design Requirements                                          89
                 8.3.1    General                                                       89
                 8.3.2    Analysis                                                      90
                 8.3.3    Implementation                                                90

         8.4     Interface Requirements                                                 90
                 8.4.1    Main Power Bus                                                90
                 8.4.2    Telecommand Requirements                                      90
                 8.4.3    Telemetry Requirements                                        90

    9.   STRUCTURE SUBSYSTEM                                                            92

         9.1     Functional Description                                                 92

         9.2     Subsystem Performance Requirements                                     92

         9.3     Subsystem Design Requirements                                          92
                 9.3.1    Load Conditions                                               92
                 9.3.2    Load Factors and Safety Margins                               92
                 9.3.3    Composites and Bonded Structures                              94
                 9.3.4    Fracture Control                                              94
                 9.3.5    Materials                                                     94

    10.  MECHANISMS                                                                     95

         10.1    Functional Description                                                 95

         10.2    Design Requirements                                                    95
                 10.2.1   General                                                       95
                 10.2.2   Design Margins                                                95
                 10.2.3   Lifetime                                                      95
                 10.2.4   Deployment Mechanisms                                         96
</TABLE>

                                       vi
<PAGE>   195

<TABLE>
<S>                                                                                   <C>
                 10.2.5   Bearings                                                      96

         10.3    Interface Requirements                                                 96
                 10.3.1   Main Power Bus                                                96
                 10.3.2   Telecommand Requirements                                      96
                 10.3.3   Telemetry Requirements                                        97

    11.  PYROTECHNIC SUBSYSTEM                                                          98

         11.1    Functional Description                                                 98

         11.2    Design Requirements                                                    98
                 11.2.1   Redundancy                                                    98
                 11.2.2   Initiators                                                    98
                 11.2.3   Actuators                                                     98
                 11.2.4   Firing Circuits                                               98

         11.3    Interface Requirements                                                 99
                 11.3.1   Main Power Bus                                                99
                 11.3.2   Telecommand Requirements                                      99
                 11.3.3   Telemetry Requirements                                        99

    12.  SPACECRAFT DESIGN REQUIREMENTS                                                100

         12.1    General                                                               100
                 12.1.1   Configuration                                                100
                 12.1.2   Maintainability, Interchangeability and Accessibility        100
                 12.1.3   Zero-g Testing                                               101
                 12.1.4   Contamination Control                                        101
                 12.1.5   Operation Following Storage                                  102

         12.2    Reliability Design                                                    102
                 12.2.1   General                                                      102
                 12.2.2   Reliability Analysis                                         102
                 12.2.3   Failure Mode, Effects and Criticality Analysis (FMECA)       103
                 12.2.4   Contingency Analysis                                         103
                 12.2.5   Software & Firmware Reliability                              103
                 12.2.6   Reliability Modelling                                        104
                 12.2.7   Redundancy                                                   104

         12.3    Mechanical Design Requirements                                        105
                 12.3.1   Requirements for Units and Assemblies                        105

         12.4    Thermal Design Requirements                                           105
                 12.4.1   Requirements for Units and Assemblies                        105

         12.5    General Electrical Design Requirements                                106
                 12.5.1   Worst Case Analysis                                          106
                 12.5.2   Electrical Grounding Scheme                                  106
                 12.5.3   Main Bus Power Interfaces                                    107
                 12.5.4   Secondary Power Distribution                                 107
                 12.5.5   Signal Interfaces                                            107
                 12.5.6   Testability                                                  108
</TABLE>

                                      vii
<PAGE>   196

<TABLE>
<S>                                                                                   <C>
                 12.5.7   Use of Connectors                                            108
                 12.5.8   Harness Design                                               109
                 12.5.9   Spacecraft-Level Test Connections                            109

         12.6    Design Criteria for Microprocessor Systems                            110
                 12.6.1   Software Design Requirements                                 110
                 12.6.2   Software Telemetry                                           111
                 12.6.3   Hardware                                                     111
                 12.6.4   Fault Management                                             112
                 12.6.5   Self-Test Mode                                               112

         12.7    Radiation Design Requirements                                         112
                 12.7.1   Total Dose                                                   112
                 12.7.2   Single Event Phenomena - Single and Multiple Upsets          113
                 12.7.3   Electrostatic Charging                                       113

         12.8    General Telecommand and Telemetry Requirements                        114
                 12.8.1   Telecommand                                                  115
                 12.8.2   Telemetry                                                    115

    13.  QUALITY ASSURANCE PROVISIONS                                                  118

         13.1    Quality Assurance Requirements                                        118
                 13.1.1   General                                                      118
                 13.1.2   Quality Systems                                              118

         13.2    Component Parts                                                       118
                 13.2.1   General                                                      118
                 13.2.2   Radiation Sensitivity                                        118
                 13.2.3   Custom Devices                                               118
                 13.2.4   Travelling Wave Tube Amplifiers                              119

         13.3    Materials and Processes                                               119
                 13.3.1   General                                                      119
                 13.3.2   Materials                                                    119
                 13.3.3   Processes                                                    120

         13.4    Limited-life Items                                                    120

         13.5    Producibility                                                         121

    A.  APPENDICES                                                                     A-1

    1.   APPENDIX 1  RESERVED                                                          A-2

    2.   APPENDIX 2 -RADIATION ENVIRONMENT SPECIFICATION                               A-3

         2.1     ICO Orbit Radiation Environment                                       A-3
                 2.1.1    Geomagnetically Trapped Radiation                            A-3
                 2.1.2    Energetic Solar Particles                                    A-4
                 2.1.3    Environment Interactions                                     A-5
                 2.1.4    Transient Environments                                       A-8
                 2.1.5    Single Event Effects Radiation Environment                   A-8
                 2.1.6    Solar Spectral Irradiance                                   A-17
</TABLE>

                                      viii
<PAGE>   197

<TABLE>
<S>                                                                                  <C>
                 2.1.7    Spacecraft Charging                                         A-18

    3.   APPENDIX 3 -DYNAMIC SPACECRAFT SIMULATOR SPECIFICATION                       A-20
                 3.1      Functional Description                                      A-20

         3.2     Functional Requirements                                              A-20
                 3.2.1    General                                                     A-20
                 3.2.2    Scope of Simulation                                         A-21
                 3.2.3    Performance Requirements                                    A-21

         3.3     Design Requirements                                                  A-22
                 3.3.1    Language                                                    A-22
                 3.3.2    User Interface                                              A-22
                 3.3.3    Maintainability                                             A-22

         3.4     Environment Model Requirements                                       A-23
                 3.4.1    Rotational Dynamics                                         A-23
                 3.4.2    Translational Dynamics                                      A-23
                 3.4.3    Models of Elements Sensed by the Spacecraft                 A-24
                 3.4.4    Models Affecting Spacecraft Behaviour                       A-24

         3.5     Satellite Model Requirements                                         A-24
                 3.5.1    Electrical Power Subsystem (EPS)                            A-24
                 3.5.2    AOCS                                                        A-25
                 3.5.3    Telemetry, Tracking and Command Subsystem                   A-26
                 3.5.4    Thermal Control Subsystem (TCS)                             A-27
                 3.5.5    Communications Subsystem                                    A-27
                 3.5.6    Pyrotechnic Subsystem Model                                 A-28
                 3.5.7    Flight Software Subsystem Model                             A-28

         3.6     Simulator Control                                                    A-28
                 3.6.1    General                                                     A-28
                 3.6.2    Initialisation                                              A-28
                 3.6.3    Run Mode                                                    A-29
                 3.6.4    Pausing the Simulation                                      A-30
                 3.6.5    Exiting the Simulation                                      A-30

         3.7     Simulator Monitoring                                                 A-30
                 3.7.1    Trace Groups                                                A-30
                 3.7.2    Diagnostics                                                 A-31
                 3.7.3    Simulation Log                                              A-31
                 3.7.4    Other Printouts                                             A-31

    4.   APPENDIX 4 -RADIATION DOSE MONITOR                                           A-32

         4.1     Functional Description                                               A-32

         4.2     Functional Requirements                                              A-32
                 4.2.1    General                                                     A-32
                 4.2.2    Main Power Bus                                              A-32
                 4.2.3    Telecommand Requirements                                    A-32
                 4.2.4    Telemetry Requirements                                      A-32
</TABLE>

                                       ix
<PAGE>   198

<TABLE>
<S>                                                                                  <C>
                 4.2.5    Redundancy                                                  A-33
                 4.2.6    Quality Assurance                                           A-33

         4.3     Performance Requirements                                             A-33
                 4.3.1    General                                                     A-33
</TABLE>

                                        x
<PAGE>   199
Exhibit C Product Assurance Plan                    25 August 2000 - Amendment 7
Satellite Contract                                  Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

----------------------------------------------------------
TITLE                           NUMBER           REV
              ICO
     Product Assurance Plan                       A           [HUGHES LOGO]
           Exhibit C
                               CAGE CODE     TOTAL PAGES
                                 9E831            61
--------------------------------------------------------------------------------

                         HUGHES PROPRIETARY INFORMATION

                 Source: Hughes Space and Communications Company

       This document contains proprietary information and, except with written
       permission of Hughes Space and Communications Company, such information
       shall not be published or disclosed to others, or used for any purpose
       and the document shall not be copied in whole or in part.

       COPYRIGHT (C) 1999 - HUGHES ELECTRONICS CORPORATION - UNPUBLISHED WORK -
       ALL RIGHTS RESERVED

--------------------------------------------------------------------------------
                                    APPROVALS
--------------------------------------------------------------------------------
                          DATE                                          DATE

S. Merrell                          S. Schmidt
Revised by                          Payload System Engineering
--------------------------------------------------------------------------------

                                    T. Lamb
                                    Product Manager
--------------------------------------------------------------------------------

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

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

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

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

<PAGE>   200

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 PAGE
<S>   <C>                                                                                                        <C>
1.    BASIC PROVISIONS............................................................................................1-1
      1.1    Basic Provisions.....................................................................................1-1
             1.1.1           Program Content......................................................................1-1
      1.2    Program Functions....................................................................................1-1
      1.3    Applicable Documents and Guidelines..................................................................1-1

2.    ORGANIZATION AND MANAGEMENT.................................................................................2-1
      2.1    Basic Provisions.....................................................................................2-1
      2.2    Management Responsibility............................................................................2-1
             2.2.1           Reliability Engineering..............................................................2-1
             2.2.2           Parts, Materials, and Processes......................................................2-1
             2.2.3           Quality Assurance....................................................................2-2
             2.2.4           Subcontractor PA Program Control.....................................................2-2
      2.3    Reviews..............................................................................................2-2
      2.4    Audits...............................................................................................2-3
      2.5    Documentation........................................................................................2-3
      2.6    Subcontractor/Supplier PA Programs...................................................................2-3
             2.6.1           Basic Provisions.....................................................................2-3
             2.6.2           High Reliability Parts Suppliers.....................................................2-4
             2.6.3           Materials and Fabricated Item Suppliers..............................................2-4
             2.6.4           Major Subcontractors.................................................................2-4
      2.7    Progress Reporting...................................................................................2-4
      2.8    Customer Interface...................................................................................2-5
             2.8.1           Involvement in and Access to Program Activities......................................2-5
             2.8.2           Involvement in Review Board Proceedings..............................................2-5

3.    QUALITY ASSURANCE...........................................................................................3-1
      3.1    Basic Provisions.....................................................................................3-1
      3.2    Function Administration..............................................................................3-1
             3.2.1           Responsibilities.....................................................................3-1
             3.2.2           Tasks................................................................................3-2
             3.2.3           Audits...............................................................................3-2
      3.3    Procurement Controls.................................................................................3-2
             3.3.1           Responsibility.......................................................................3-2
             3.3.2           Subcontractor/Supplier Evaluation....................................................3-3
             3.3.3           Procurement Document Requirements....................................................3-3
             3.3.4           Source Surveillance/Inspection.......................................................3-3
             3.3.5           Receiving Inspection.................................................................3-3
      3.4    Manufacturing Controls...............................................................................3-3
             3.4.1           Fabrication and Assembly Operations..................................................3-3
             3.4.2           Stores Control.......................................................................3-4
             3.4.3           Process Control......................................................................3-4
             3.4.4           Process and Personnel Certification..................................................3-4
             3.4.5           Workmanship Standards................................................................3-4
             3.4.6           Cleanliness and Contamination Control................................................3-5
             3.4.7           Configuration Control................................................................3-5
             3.4.8           Electrostatic Discharge Control......................................................3-5
      3.5    Testing and Inspection...............................................................................3-5
             3.5.1           In-Process Inspections...............................................................3-5
             3.5.2           Final Test and Inspection............................................................3-6
             3.5.3           Subsystem/Vehicle Assembly Inspection and Records....................................3-6
             3.5.4           Test Participation...................................................................3-6
      3.6    Nonconforming Article and Material Control...........................................................3-7
</TABLE>

                                       i
<PAGE>   201

<TABLE>
<CAPTION>
                                                                                                                 PAGE
<S>   <C>                                                                                                        <C>
             3.6.1           Material Review Action and Control...................................................3-7
             3.6.2           Nonconformance Definitions and Classifications.......................................3-8
             3.6.3           Corrective Action....................................................................3-8
             3.6.4           Subcontractor Material Review........................................................3-9
             3.6.5           Database.............................................................................3-9
      3.7    Measurement Processes and Calibration................................................................3-9
             3.7.1           Basic System.........................................................................3-9
             3.7.2           Calibration Controls.................................................................3-9
             3.7.3           Remedial and Preventive Action......................................................3-10
             3.7.4           Subcontractor Controls..............................................................3-10
      3.8    History Records and Traceability....................................................................3-10
             3.8.1           History Records.....................................................................3-10
             3.8.2           Photographs.........................................................................3-10
             3.8.3           Traceability........................................................................3-11
      3.9    Stamp Controls......................................................................................3-11
      3.10   Sampling Plans, Statistical Planning, and Analysis..................................................3-11
      3.11   Handling and Shipping...............................................................................3-11
             3.11.1          Handling............................................................................3-11
             3.11.2          Shipping............................................................................3-12
             3.11.3          Transportation......................................................................3-12
      3.12   Software Quality Assurance..........................................................................3-12
      3.13   Launch Site Activities..............................................................................3-13

4.    RELIABILITY ENGINEERING....................................................................................4-1
      4.1    Basic Provisions....................................................................................4-1
      4.2    Function Administration.............................................................................4-1
             4.2.1           Responsibilities....................................................................4-1
             4.2.2           Tasks...............................................................................4-1
      4.3    Reliability Assessments.............................................................................4-2
             4.3.1           Spacecraft Design Reliability.......................................................4-2
             4.3.2           Analyses............................................................................4-2
             4.3.3           Part Application Derating...........................................................4-3
             4.3.4           Failure Modes, Effects, and Criticality Analysis....................................4-4
             4.3.5           Single Point Failures...............................................................4-4
             4.3.6           Wearout Analysis....................................................................4-4
             4.3.7           Worst Case Analysis.................................................................4-5
             4.3.8           Critical Items List.................................................................4-5
      4.4    Failure Reporting and Corrective Action.............................................................4-5
             4.4.1           Basic Provisions....................................................................4-5
             4.4.2           Failure Definition and Documentation................................................4-6
             4.4.3           Failure Analysis....................................................................4-6
             4.4.4           Failure Review Board................................................................4-7
             4.4.5           Subcontractor Failure Reporting.....................................................4-7

5.    PARTS, MATERIALS, AND PROCESSES CONTROL....................................................................5-1
      5.1    Basic Provisions....................................................................................5-1
      5.2    Function Administration.............................................................................5-1
      5.3    Program Requirements................................................................................5-1
             5.3.1           Authorized Lists....................................................................5-1
             5.3.2           Selection...........................................................................5-1
             5.3.3           Parts and Materials Application Review..............................................5-3
             5.3.4           Materials and Processes Specifications..............................................5-3
             5.3.5           Parts Specifications................................................................5-4
             5.3.6           Parts and Materials Qualification...................................................5-4
             5.3.7           Parts and Materials Transfer........................................................5-4
      5.4    Parts Screening and Acceptance......................................................................5-5
             5.4.1           Basic Provisions....................................................................5-5
</TABLE>

                                       ii
<PAGE>   202

<TABLE>
<CAPTION>
                                                                                                                 PAGE
<S>   <C>                                                                                                        <C>
             5.4.2           Internal Visual Inspection..........................................................5-5
             5.4.3           Environmental Screening and Conditioning............................................5-5
             5.4.4           Burn-in.............................................................................5-6
             5.4.5           Destructive Physical Analysis.......................................................5-6
             5.4.6           Radiation...........................................................................5-7
      5.5    PM&P Qualification Status List......................................................................5-7
      5.6    Parts and Materials Handling and Storage............................................................5-7
      5.7    Part Quality Levels for Qualification Hardware......................................................5-7
      5.8    Subcontractor PMP Program Control...................................................................5-7

6.    CONFIGURATION MANAGEMENT...................................................................................6-1
      6.1    Basic Provisions....................................................................................6-1
      6.2    Function Administration.............................................................................6-1
             6.2.1           Responsibilities....................................................................6-1
             6.2.2           Tasks...............................................................................6-2
      6.3    Activities..........................................................................................6-2
             6.3.1           Configuration Identification........................................................6-2
             6.3.2           Configuration Control...............................................................6-3
             6.3.3           Configuration Status Accounting.....................................................6-4
             6.3.4           Subcontractor Configuration Management..............................................6-5
             6.3.5           Engineering Documentation Control...................................................6-5

7.    SYSTEM SAFETY PROGRAM PLAN.................................................................................7-1
      7.1    Basic Provisions....................................................................................7-1
      7.2    Responsibilities....................................................................................7-1
             7.2.1           Program Manager.....................................................................7-1
             7.2.2           System Safety Engineer..............................................................7-1
             7.2.3           External System Safety Interfaces...................................................7-1
      7.3    System Safety Tasks.................................................................................7-2
      7.4    Organizational Roles................................................................................7-2
             7.4.1           Engineering.........................................................................7-2
             7.4.2           System Operations...................................................................7-2
             7.4.3           Safety, Health and Environmental Affairs (SHEA......................................7-3
             7.4.4           Product Assurance...................................................................7-3
             7.4.5           Quality Assurance...................................................................7-3
      7.5    Scope of System Safety Program......................................................................7-3
      7.6    Applicable Documents................................................................................7-3
      7.7    Integration and Coordination of Delegated Activities................................................7-4
      7.8    Hazard Control Order of Precedence..................................................................7-4
      7.9    Hazard Analysis.....................................................................................7-4
             7.9.1           Preliminary Hazard Analysis (PHA)...................................................7-4
             7.9.2           Subsystem and System Hazard Analysis (S&SHA)........................................7-5
      7.10   Verification and Documentation of Requirements Compliance...........................................7-5
      7.11   Deliverable Documentation...........................................................................7-5
      7.12   Non-Deliverable Data................................................................................7-5
      7.13   Procedure Review and Approval.......................................................................7-5
      7.14   Test and Operational Safety.........................................................................7-5
      7.15   Training............................................................................................7-6
      7.16   Audit Program.......................................................................................7-6
</TABLE>

                                      iii
<PAGE>   203

                                 LIST OF FIGURES

<TABLE>
<CAPTION>
                                                                                                PAGE
<S>          <C>                                                                                <C>
FIGURE 2-1.  PROGRAM PRODUCT ASSURANCE MANAGEMENT REPORTING......................................2-7

FIGURE 2-2.  PROGRAM PRODUCT ASSURANCE MANAGER'S STAFF...........................................2-7

FIGURE 3-1.  QUALITY ASSURANCE INTERFACES.......................................................3-13

FIGURE 4-1.  FAILURE MANAGEMENT SYSTEM...........................................................4-8

FIGURE 6-1.  PROGRAM CONFIGURATION AND DATA MANAGEMENT OPERATIONS................................6-6

FIGURE 6-2.  CUSTOMER/HUGHES/SUBCONTRACTOR INTERFACES............................................6-6

FIGURE 6-3.  PROGRAM CMO FUNCTIONAL RESPONSIBILITIES.............................................6-7
</TABLE>

                                       iv
<PAGE>   204

                                 LIST OF TABLES

<TABLE>
<CAPTION>
                                                                                                PAGE
<S>        <C>                                                                                  <C>
TABLE 1-1  APPLICABLE DOCUMENTS..................................................................1-2

TABLE 1-2  APPLICABLE HUGHES MANUALS AND PROCEDURES..............................................1-3

TABLE 2-1  REVIEW BOARDS.........................................................................2-6

TABLE 2-2.  CUSTOMER INVOLVEMENT IN REVIEW BOARD PROCEEDINGS.....................................2-7

TABLE 3-1,  FLIGHT HARDWARE MATERIAL REVIEW AUTHORITY...........................................3-14

TABLE 4-1.  RELIABILITY ENGINEERING TASK RESPONSIBILITIES........................................4-8

TABLE 5-1.  HIGH RELIABILITY PARTS SCREENING MATRIX1 (PAGE 1 OF 2)...............................5-8

TABLE 5-1.  HIGH RELIABILITY PARTS SCREENING MATRIX (Page 2 of 2)................................5-9
</TABLE>

                                       v
<PAGE>   205

1.      BASIC PROVISIONS

1.1     BASIC PROVISIONS

1.1.1   PROGRAM CONTENT

        Hughes shall conduct, from program inception to delivery of each
        spacecraft, a product assurance effort compliant with the provisions of
        this plan, which shall constitute the master planning and requirements
        document for the spacecraft product assurance program. This effort shall
        comprise, in addition to a program of quality assurance activities that
        includes software control activities, programs of reliability
        engineering; parts, materials, and processes control; configuration
        management; and system safety assurance activities. Responsibility
        within Hughes for ensuring the application of these disciplines shall be
        assigned as prescribed by Hughes' management directives.

1.2     PROGRAM FUNCTIONS

        The primary functions of the spacecraft product assurance program shall
be to:

        1.      Ensure the effective and timely implementation (one consistent
                with the program master phasing schedule) of the tasks
                prescribed by this plan.

        2.      Define and implement the product assurance tasks and controls
                required in the design, manufacture, testing, storage, delivery,
                and launch of the spacecraft to ensure accomplishment of the
                mission objectives.

        3.      Ensure the implementation of a reliable design based upon proven
                design practices.

        4.      Ensure proper selection, application, evaluation, and control of
                parts, materials, and processes.

        5.      Provide full integration of product assurance requirements and
                controls throughout the program and ensure continuous compliance
                by conducting appropriate audits and inspections.

        6.      Ensure early and prompt detection and reporting of actual or
                potential deficiencies, marginal quality, and trends or
                conditions that could result in unsatisfactory performance, and
                ensure that prompt and effective action is taken to correct such
                conditions.

        7.      Provide regular program status reports to program management.

1.3     APPLICABLE DOCUMENTS AND GUIDELINES

        Existing product line documents and guidelines shall be used to the
        maximum extent possible to preclude duplication of effort and ensure
        consistent application of sound practices. The documents listed in Table
        1-1 shall be considered a part of this plan to the extent described.
        Unless otherwise noted, the latest issues of the documents cited in
        Table 1-1 shall be the applicable documents.

        The guidelines cited in Table 1-2 shall govern the implementation of the
        provisions of this plan. These guidelines shall be periodically revised
        to the extent necessary to reflect the latest Hughes practices and shall
        be available for review upon customer request.

                                      1-1
<PAGE>   206

                         TABLE 1-1 APPLICABLE DOCUMENTS

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
  Document No.                              Title                                              Contents
-------------------------------------------------------------------------------------------------------------------------------
<S>                         <C>                                                 <C>
Hughes
     SCG PS 22010           Protection of Electrostatic Discharge (ESD)         Established requirements for processing of
                            Sensitive Devices and Assemblies                    static sensitive devices and assemblies

     SCG PS 32023           Space Equipment Electrical Assembly and             Establishes workmanship standards for
                            Soldering                                           soldering

     APL ICO 1              Approved Parts List for the ICO Program             Documents the list of parts approved by
                                                                                the program PMPCB

     AMPL                   Approved Materials and Processes List for           Documents the list of materials and
                            the ICO Program                                     processes approved by the PMPCB

     PA9000                 Product Assurance Requirements                      Specifies product assurance requirements
                            Specification                                       for subcontactors

Standards
     ANSI/ASQC Z1.4         Sampling Procedures and Tables for                  Prescribes procedures for statistical
                            Inspection Attributes                               sampling of materials to specified levels of
                                                                                quality

     ANSI/ASTM              Total Mass Loss of Collected Volatile               Provides testing requirements of materials
     E 595-84               Condensable Materials from Outgassing               in vacuum environment
                            in a Vacuum Environment

     ANSI/NCSL Z540-1       Calibration Laboratories and Measuring and          Provides general requirements for
                            Test Equipment - General Requirements               calibration activities

     MIL-HDBK-217           Reliability Predictions of Electronic               Provides failure rate data and
                            Equipment                                           methodology for performing reliability
                                                                                predictions

     MIL-M-38510            Microcircuits, General Specification for            Provides general technical requirements for
                                                                                microcircuits (heritage parts)

     MIL-PRF-38534          Hybrid Microcircuits, General Specification for     Provides general technical requirements
                                                                                for hybrids

     MIL-PRF-38535          Integrated Circuits (Microcircuits)                 Provides general requirements for
                            Manufacturing, General Specification for            microcircuits

     MIL-PRF-19500          Semiconductor Devices, General                      Provides general technical requirements
                            Specification for                                   for semiconductors

     MIL-S-19500            Semiconductor Devices, General                      Provides general technical requirements
                            Specification for                                   for semiconductors (heritage parts)

    MIL-STD-1547            Electronic Parts & Materials Requirements for       Establishes requirements for electronics
                            Space and Launch Vehicles                           parts and materials

     MFSC-SPEC-522          Design Criteria for Controlling                     Establishes design requirements for stress
                            Stress Corrosion Cracking                           corrosion cracking
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      1-2
<PAGE>   207

                           TABLE 1-2 APPLICABLE HUGHES
                             MANUALS AND PROCEDURES

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------
          Guideline                                                  Contents
----------------------------------------------------------------------------------------------------------------------
<S>                                      <C>
Engineering

   Worst Case Circuit Analysis           Establishes minimum worst case circuit analysis requirements

   Stress Derating Analysis              Establishes minimum electronic component electrical derating analysis
                                         requirements

   Numerical Reliability Analysis        Establishes minimum reliability analysis requirements and approved failure
                                         rates

   Failure Mode and Effects Analysis     Establishes procedures for conducting failure modes and effects analysis

   Component Data Book                   Presents part stress derating, radiation design criteria, and part
                                         degradation data for designers

   Drafting Standards Manual             Establishes engineering requirements for drawings

   Shelf Life Manual                     Establishes shelf life and recertification requirements for life limited
                                         materials

Product Assurance

   Subcontractor Requirements            Defines requirements that selectively apply to subcontractors

   Program Authorized Parts List         Lists program authorized parts and requirements

   Program Authorized Materials          Lists program authorized materials and processes
   and Processes List

   Program Quality Requirements          Designates applicable program quality requirements

   Failure Reporting and Corrective      Describes requirements and responsibilities for reporting analysis,
   Action                                corrective action, closeout of problems, and failures occurring during test
                                         of equipment
   Hughes Quality Manual                 Documents quality practices and procedures implemented by major
                                         organizations through quality instructions

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

                                      1-3
<PAGE>   208

2.      ORGANIZATION AND MANAGEMENT

2.1     BASIC PROVISIONS

        The satellite product assurance program prescribed by this plan shall be
        managed, and responsibilities for implementing its various elements
        shall be distributed, as described herein.

2.2     MANAGEMENT RESPONSIBILITY

        A program product assurance manager vested with the authority delegated
        that office by the Hughes Space and Communications Company (HSC) Product
        Assurance support staff shall be assigned to the HSC program office and
        report directly to the program manager. As an integral member of both
        the program management team and the Product Assurance support staff, he
        shall have the direct, independent, and unimpeded access to top HSC
        management shown in Figure 2-1. It shall be his responsibility to
        implement management procedures and establish command media requirements
        that ensure that product assurance disciplines are effectively utilized
        in the design, procurement, manufacturing, and test activities. His
        authority shall derive from Hughes management directives that establish
        responsibilities and guidelines for implementation of the product
        assurance discipline. The program product assurance manager is a
        designated key person who shall be dedicated full-time to the program.

        The program product assurance manager's staff shall include the
        specialist personnel identified in Figure 2-2, as required to ensure
        that program product assurance requirements are appropriately
        implemented. The program product assurance manager shall participate in
        program engineering and management meetings and reviews to the extent
        required to maintain cognizance of the overall progress of the program.
        He shall be responsible for ensuring immediate attention to and
        resolution of any situation that appears to jeopardize the achievement
        of product assurance objectives or fulfillment of the requirements of
        this plan, and shall have the authority to suspend, until a satisfactory
        resolution is achieved, any activities related to such a situation.

        Product assurance program tasks shall be functionally distributed.
        Personnel skilled in the appropriate product assurance disciplines
        (hardware/software quality assurance, reliability,
        parts/materials/processes, etc.) are assigned to program tasks.

        Program product assurance requirements shall be communicated to
        performing organizations through the issuance of command media and
        statements of work. Compliance with the requirements of this plan shall
        be ensured by maintaining a comprehensive program of regularly scheduled
        program product assurance coordination meetings, ongoing task reviews,
        audits, and program control board activities.

        Personnel assignments shall be tailored to ensure achievement of the
        program milestones and satisfactory completion of each product assurance
        program task. The program PA functions shall have the responsibilities
        and interfaces with other organizations described below.

2.2.1   RELIABILITY ENGINEERING

        Reliability disciplines shall be used in the design, procurement,
        manufacturing, and test activities. The reliability engineering function
        shall report to the program product assurance manager. Reliability
        assessment tasks shall be performed jointly by systems engineering,
        design engineering, and staff reliability specialists. Staff specialists
        shall assist the design activities in the evaluation and documentation
        of the design reliability assessments required by this plan. Reliability
        assessment results shall be presented at design reviews. The failure
        reporting system shall be managed by the program product assurance
        manager. Specialists in failure reporting shall be assigned to implement
        the failure reporting requirements.

2.2.2   PARTS, MATERIALS, AND PROCESSES

                                      2-1
<PAGE>   209

        Program product assurance and engineering personnel shall be jointly
        responsible for managing parts, materials, and processes activities. The
        design engineer shall bear primary responsibility for the selection,
        application, specification, and qualification of parts, materials, and
        processes. Specialists with expertise in the application, specification,
        and qualification of parts, materials, and processes shall provide
        support as required. The performing organizations shall ensure that the
        program PA manager is cognizant of the status of these activities.

        A program Parts, Materials, and Processes Control Board shall review all
        requests for new parts, materials, and processes to be used on the
        program and issue the program authorized parts and materials lists. A
        senior specialist representing the program product assurance manager
        shall schedule PMPCB meetings and follow action items to completion. His
        responsibility shall include monitoring and auditing parts operations to
        ensure continued compliance with program parts requirements.

2.2.3   QUALITY ASSURANCE

        The program PA manager shall be responsible for communicating program
        quality requirements to performing organizations and for ensuring
        compliance. QA personnel in each performing operations shall implement
        the QA requirements of this plan using appropriate quality practices,
        instructions, and procedures. Responsibility for product conformance to
        drawings and standards shall be delegated to the cognizant product
        operations QA organizations.

        A product assurance engineer reporting to the program product assurance
        manager shall act as the principal interface with the performing quality
        assurance organizations. It shall be the responsibility of the product
        assurance engineer to monitor and audit the quality operations in
        sufficient depth to ensure continued compliance with program
        requirements.

2.2.4   SUBCONTRACTOR PA PROGRAM CONTROL

        The program product assurance manager shall review subcontractor
        specifications and statements of work for communication of appropriate
        requirements. Subcontractor documents shall be reviewed to ensure that
        contractual and performance commitments are met. Quality assurance
        surveillance personnel shall support this activity by performing audits
        and inspections to ensure compliance with requirements. Subcontractor
        evaluation and approval shall be performed as a coordinated effort
        between subcontract product assurance and the responsible product
        operations quality organization. The practices of any subcontractor or
        supplier who is a new source of procurement shall be audited.

        Hughes shall perform on-site audits, upon award of contract to major
        subcontractors and critical item suppliers. Audits shall be conducted
        for any subcontractor or supplier who is a new source of procurement or
        who has not been surveyed or audited within twelve months of the date of
        contract award. Supplier and subcontractor survey and audit results
        shall be available, on site, for review by the Customer representative.
        The customer product assurance representative shall be invited to
        participate in scheduled audits. Post award audits by the customer
        product assurance representative will be scheduled and conducted when
        requested.

2.3     REVIEWS

        The program product assurance manager shall recommend procedural changes
        that facilitate the implementation of the product assurance program
        wherever, in his judgement, objectives are in danger of not being met.
        He shall take prompt action to alert responsible task managers of
        deficiencies detected and follow through as necessary to ensure
        corrective measures are implemented. Program product assurance personnel
        shall participate in program reviews as noted in Table 2-1 and as
        described throughout this plan.

                                      2-2
<PAGE>   210

2.4     AUDITS

        Systematic audits of systems, procedures, and operations designed to
        implement Hughes practices and program requirements shall be conducted
        in accordance with Hughes' command media. Product assurance personnel
        assigned to the program shall ensure that program PA requirements are
        being met by regularly reviewing and auditing hardware and associated
        documentation to verify compliance with QA and engineering requirements.
        Performing operations shall be audited to establish compliance with
        command media and contractual requirements. The results of audits shall
        be documented and reported to higher management, together with
        recommendations for correction of noted deficiencies. Management action
        shall be taken, and follow-up reviews shall be held, to ensure that
        adequate corrections are implemented. Hughes audit results shall be made
        available to the customer for review, on site, upon request.

        The customer may independently audit the effectiveness and
        implementation of Hughes' product assurance program in the event of
        persistent problems. All such audits shall be coordinated with Hughes'
        program product assurance manager for purposes of scheduling and
        coordination. The results of Customer audits shall be documented and
        made available to program product assurance management for corrective
        action. The customer shall be notified of any corrective actions taken.
        Audits at subcontractor or vendor facilities shall include Hughes
        product assurance representatives as observers. The customer shall
        notify Hughes at least 7 working days in advance of a planned visit to a
        subcontractor facility.

2.5     DOCUMENTATION

        Program Control Documentation shall be an integral part of the
        activities and tasks performed under this plan. It shall be prepared
        throughout the program and made available for approval, review, or
        information in accordance with contract requirements. Product assurance
        documentation generated under the contract shall be identified as being
        program unique and shall be maintained in and retrievable from the
        program data bank system. All program related documentation shall be
        subject to on site review by the customer representative.

        Documents at the manufacturing level not normally submitted through
        program management review process shall be subject to review under the
        cognizant quality operation to assure appropriate incorporation of
        program quality requirements.

2.6     SUBCONTRACTOR/SUPPLIER PA PROGRAMS

2.6.1   BASIC PROVISIONS

        The program product assurance manager shall ensure that program
        procurement documentation includes applicable program product assurance
        requirements. He shall accomplish this objective by issuing command
        media that communicate program product assurance requirements and by
        reviewing, and exercising approval authority over the release of,
        specifications and statements of work issued to major subcontractors.
        Subcontractor and major supplier requirements shall include the
        provision for prime customer access and participation in progress
        reviews, review boards, and control boards. Work in progress, data, and
        documentation generated for the program, including design,
        manufacturing, test, and quality assurance documentation, shall be
        subject to examination, evaluation, and inspection by Hughes and
        Customer representatives. This shall include the right to monitor
        compliance to the provisions of the approved plans and procurement
        specifications, and to perform hardware inspections/audits.

        Subcontractors and major suppliers of spacecraft equipments shall be
        required to meet the requirements of PA9000, Product Assurance
        Requirements Specification. Hughes product assurance shall prepare a
        Requirements Matrix which stipulates the flowdown of all product
        assurance requirements to all suppliers and subcontractors of spacecraft
        equipments. The Requirements Matrix shall be subject to formal review by
        the customer to assure conformance to customer requirements.

                                      2-3
<PAGE>   211

        The product assurance requirements to be imposed on vendors and
        suppliers shall be communicated to each responsible quality assurance
        organization, and each such organization shall be directly responsible
        for ensuring compliance of delivered articles to applicable procurement
        requirements.

2.6.2   HIGH RELIABILITY PARTS SUPPLIERS

        The PMPCB shall be responsible for ensuring that high reliability parts
        meet the requirements of this plan and shall interface directly with the
        responsible operationS to establish appropriate requirements for source
        surveillance and receiving inspection and test. The responsible quality
        assurance organization shall make assignments to perform inspections and
        monitor supplier activities to ensure compliance. The PMPCB shall be
        responsible for final resolution of problems which involve conformance
        of high reliability parts to program requirements.

2.6.3   MATERIALS AND FABRICATED ITEM SUPPLIERS

        Each product operation shall be responsible for ensuring that procured
        materials and fabricated items receive adequate quality assurance
        support to allow implementation of applicable program requirements.
        Supplier performance shall be audited to establish and maintain an
        acceptable vendor quality rating for the item procured. Source
        inspections and/or receiving inspections shall be performed to the
        degree necessary to ensure that critical drawing and specification
        requirements are met.

2.6.4   MAJOR SUBCONTRACTORS

        Each major subcontractor shall be required to maintain a well defined
        program of product assurance controls during the design, development,
        procurement, fabrication, inspection, testing, handling, storage, and
        shipment of spacecraft hardware. Major subcontractors shall be required
        to implement program plans consistent with the basic requirements of
        this plan. Requirements appropriate to the item being procured shall be
        defined jointly by the program product assurance manager, the
        responsible engineering activity, and the responsible quality assurance
        manager.

        Each subcontractor plan shall be reviewed and approved by the cognizant
        quality assurance manager and the program product assurance manager to
        ensure compliance with program requirements. Source engineers shall
        perform surveillance of subcontractor operations to identify potential
        problems for resolution and report status to the program office.
        Documentation requirements shall be controlled by specific subcontractor
        data requirements lists (SCDRLs). Survey results shall be evaluated and,
        where appropriate, used during follow-up audits of subcontractors to
        ensure proper action. Major subcontractors shall be required to make
        their plans available to Hughes personnel on-site for review.
        Subcontractor and major supplier plans shall be made available, on site,
        for review by customer representatives through the Hughes program
        product assurance manager.

2.7     PROGRESS REPORTING

        Product assurance program status shall be regularly reported to program
        management. Reports shall include status of reliability assessments;
        failure reports filed and corrective actions taken; the status of parts,
        materials, and processes activities; problems; and any other significant
        information regarding the progress of the product assurance program and
        its implementation. Product assurance status shall be reported to the
        customer.

        The Hughes program product assurance manager shall conduct regular
        product assurance reviews of internal, major supplier, and subcontractor
        operations to monitor and document progress of the product assurance
        program. Product assurance program status reviews, as a minimum, shall
        be held monthly. Meeting frequency shall be subject to change by mutual
        agreement of the customer representative and the Hughes program product
        assurance manager consistent with task progress. An agenda shall be
        issued prior to each meeting and minutes

                                      2-4
<PAGE>   212

        issued with assigned action items and expected completion dates. The
        customer product assurance representative shall be invited to
        participate in these reviews.

2.8     CUSTOMER INTERFACE

2.8.1   INVOLVEMENT IN AND ACCESS TO PROGRAM ACTIVITIES

        Customer product assurance representatives shall have access to program
        product assurance activities and related program documentation. Access
        to subcontractor or supplier facilities, documentation, and operations
        shall also be facilitated. The customer may request direct surveillance
        of supplier or subcontractor activities at any time. The customer
        representative shall give reasonable notice prior to any requested
        audit, inspection, or evaluation.

        Facilities, equipment, and assistance adequate to accommodate resident
        customer product assurance representatives shall be provided. Access to
        subcontractor and supplier facilities and related program documentation
        shall be coordinated through the program product assurance manager.

        All information, documentation, reports and other data to be transferred
        to the customer must be within the scope of existing export licenses or
        exemptions.

2.8.2   INVOLVEMENT IN REVIEW BOARD PROCEEDINGS

        Customer product assurance representatives shall be invited to attend
        review board meetings convened in accordance with the provisions of this
        plan and shall receive timely notification of the scheduling of such
        meetings. The degree of their involvement in board proceedings shall
        extend to the activities and functions cited in Table 2-2. This table
        does not supersede any review or approval right cited elsewhere in this
        plan or in the contract. The customer product assurance representative
        shall be invited to participate in program progress reviews and those
        review and control boards conducted at major suppliers and
        subcontractors.

                                      2-5
<PAGE>   213

                             TABLE 2-1 REVIEW BOARDS

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
        Type                                         Composition                                   Function
-----------------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                                                   <C>
Design Review Board                  -  Program systems engineering manager (SEM)          Chairman
                                     -  Product assurance representative                   Support
                                     -  Responsible engineering activity (REA)             Present review data
                                     -  Responsible manufacturing activity (RMA)           Support
                                     -  Specialists (thermal control, stress, etc)         Support (as requested)
Parts Control Board (PCB)            -  Program PA manager                                 Chairman
                                     -  PA parts specialist                                Alternate chairman
                                     -  Responsible design engineer                        Presents request for review
                                     -  Technology engineer                                Support (as requested)
Materials and Processes              -  Program PA manager                                 Chairman
Control Board (MPCB)                 -  PA M&P specialist                                  Alternate chairman
                                     -  REA                                                Presents request for review
                                     -  Technology engineer                                Support (as requested)
Change Review Board (CRB)            -  SEM                                                Chairman
                                     -  Program configuration control representative       Support
                                     -  Product assurance representative                   Support
                                     -  REA                                                Defines change, etc
                                     -  RMA                                                Support
Material Review Board                -  Program PA manager                                 Chairman
(MRB) (contract specified            -  Quality assurance                                  Support
requirements)                        -  REA                                                Defines requests
                                     -  Specialists (thermal control, stress, etc)         Support
Failure Review Board                 -  Program PA manager                                 Chairman
                                     -  Reliability engineer/P.A. Engineer                 Support
                                     -  Failure report (FR) specialist                     Presents reports for review
                                     -  Cognizant system/subsystem engineer                Support
                                     -  REA                                                Support
                                     -  Specialists                                        Support (as requested)
Test Review Board                    -  SEM                                                Chairman
(subsystem/system)                   -  Cognizant task manager                             Presents required information/data
                                     -  Product assurance representative                   Support
                                     -  Quality assurance representative                   Support
                                     -  RMA                                                Support
Shipment Readiness Review Board      -  SEM                                                Chairman
                                     -  Spacecraft manager                                 Presents required information/data
                                     -  Program manager                                    Support
                                     -  Program PA manager                                 Support
                                     -  Quality assurance representative                   Support
                                     -  RMA                                                Support
                                     -  Systems test director                              Support
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

NOTE:  Refer to Table 2-2 for customer participation.

                                      2-6
<PAGE>   214

                       TABLE 2-2. CUSTOMER INVOLVEMENT IN
                            REVIEW BOARD PROCEEDINGS

                                  [FLOW CHART]

           FIGURE 2-1. PROGRAM PRODUCT ASSURANCE MANAGEMENT REPORTING

                                  [FLOW CHART]

              FIGURE 2-2. PROGRAM PRODUCT ASSURANCE MANAGER'S STAFF

                                      2-7
<PAGE>   215

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
           Board                                              Activity/Function
--------------------------------------------------------------------------------------------------------------------
<S>                                        <C>
Parts Control Board                        Participation in discussion; recommendation of action taken

Materials and Processes Control            Participation in discussion; recommendation of action taken
Board

Change Review Board                        Participation in discussion; recommendation of action taken; customer
                                           will have approval rights for all changes that affect contractual
                                           requirements

Material Review Board                      Participation in discussion of quality and design/ manufacturing related
                                           issues

Failure Review Board                       Participation in discussion; recommendation of action taken

Manufacturing Readiness Review Board       Participation in discussion; recommendation of action taken

Design Review Board                        Design Review Board member; participation in discussion; ask formal
                                           questions

Test Review Board                          Participation in discussion; recommendation of action taken

Shipment Readiness Review                  Participation in discussion; recommendation of action taken
--------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      2-8
<PAGE>   216

3.      QUALITY ASSURANCE

3.1     BASIC PROVISIONS

        Hughes shall conduct a comprehensive program of quality assurance
        activities that ensure that quality is built into the hardware produced
        on the program. The program quality assurance function shall establish
        and ensure the proper use of systems that facilitate the close teamwork
        between engineering, manufacturing, and quality assurance personnel that
        is necessary to successful implementation of the quality assurance
        program. The customer shall have the option to actively monitor the
        contractors quality assurance effort on a day to day basis and to
        perform inspections when requested on a non-interference basis. This
        activity shall be coordinated through the program product assurance
        manager.

3.2     FUNCTION ADMINISTRATION

3.2.1   RESPONSIBILITIES

        The program quality assurance effort shall be administered within the
        framework of the organizational relationships shown in Figure 3-1, in
        which each Hughes product operations includes a quality assurance
        function whose manager reports to the product operations unit leader and
        is responsible for 1) ensuring that product assurance requirements
        relating to equipment within the product line are met and 2) that
        applicable quality assurance requirements are communicated to suppliers
        and subcontractors.

        The managers of these quality assurance functions shall ensure
        conformance of program items to applicable product assurance
        requirements by conducting the necessary inspections and audits. Quality
        assurance personnel shall perform the inspections/audits required to
        verify that hardware and associated documentation meet the workmanship
        and quality provisions of this plan from initial procurement through
        delivery of flight hardware. Each quality assurance organization shall
        be required to review, assess, and report the status of the quality
        program at scheduled operations reviews.

        The independent line of reporting shown (dotted) in Figure 3-1 shall be
        established between each quality assurance manager and HSC Product
        Assurance. The PA support staff shall have approval authority over all
        quality assurance management appointments and quality practices. The
        program product assurance manager, in the functional reporting
        relationship he maintains to both HSC Product Assurance and to the
        program office, shall issue appropriate requirements of this plan to
        each performing product line organization and conduct follow-up audits
        to ensure compliance.

        Program product assurance management, jointly with product operations
        quality representatives, shall coordinate the communication of
        contractual requirements to the engineering, procurement, and
        manufacturing functions early in the program design phase and clarify
        the intent of these requirements where and as necessary. Their
        activities shall include the issuance of the directives, instructions,
        procedures, and specifications needed to properly implement program
        requirements internally and at suppliers and major subcontractors.

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3.2.2   TASKS

        Quality assurance tasks shall be planned and scheduled to support the
        procurement, manufacturing, and test activities. These tasks shall be
        designed to ensure conformance of the hardware to drawing and
        specification requirements. Quality assurance tasks shall include:

                1.      Implementing the contractual program quality assurance
                        requirements of this plan.

                2.      Ensuring that supplier surveys and procurement document
                        reviews are conducted.

                3.      Ensuring source surveillance and inspection activities.

                4.      Ensuring that receiving inspection on incoming supplies
                        and articles are performed, as applicable.

                5.      Ensuring maintenance of manufacturing and stores
                        controls.

                6.      Ensuring in-process, assembly, and final inspections as
                        required by manufacturing planning documentation or
                        specific inspection procedures are performed.

                7.      Controlling nonconforming supplies and material review
                        activities, including the assignment of authorized
                        personnel.

                8.      Monitoring and surveillance of test activities.

                9.      Ensuring the use of calibrated measuring and test
                        equipment.

                10.     Ensuring the maintenance of quality disciplines
                        throughout the integration and testing of subsystem
                        hardware and of the spacecraft.

                11.     Ensuring launch site activities are performed as
                        governed by the launch site operations plan and as
                        augmented by requirements established during the joint
                        review meetings.

        Quality assurance tasks shall be planned and scheduled to support the
        procurement, manufacturing, and test activities. These tasks shall be
        designed to ensure conformance of the hardware to drawing and
        specification requirements. Quality assurance tasks shall include:

3.2.3   AUDITS

        The product operations quality assurance organizations shall conduct
        audits of the adequacy of the quality assurance system and its related
        procedures and inspection instructions and report the results of these
        audits to leadership, to the HSC Product Assurance support staff
        leadership, and to program product assurance management. These reports
        shall include identification of deficiencies and corrective action
        responsibilities and a schedule for completion. Deficiencies shall be
        evaluated for hardware impact, and open actions shall be tracked to
        ensure that they are accomplished in a timely and proper manner.

3.3     PROCUREMENT CONTROLS

3.3.1   RESPONSIBILITY

        Product operations quality assurance personnel shall be responsible for
        ensuring that materials and articles procured for this program conform
        to engineering requirements.

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3.3.2   SUBCONTRACTOR/SUPPLIER EVALUATION

        Subcontractors and suppliers shall be evaluated and approved in
        accordance with Hughes' requirements for quality and management systems
        and facilities capabilities prior to procurement award. Surveys of
        facilities and of quality assurance and management systems shall be
        conducted. Each supplier shall be approved on the basis of his ability
        to meet requirements. Approved suppliers shall be listed in Hughes'
        vendor information system. Supplier or subcontractor surveys concerning
        hardware shall be available on-site for customer review.

3.3.3   PROCUREMENT DOCUMENT REQUIREMENTS

        The program product assurance manager, in cooperation with each of the
        quality assurance managers, shall establish the minimum product
        assurance requirements for procured items. These requirements shall be
        imposed in accordance with established quality procedures. Quality
        assurance, or personnel certified by quality assurance, shall audit
        procurement documents to ensure program requirements are included.
        Procurement shall be made from sources approved by HSC Product
        Assurance. Approved sources shall be identified on one or more of the
        following documents: Hughes' vendor information system; the program
        approved parts list; the PROGRAM approved materials and processes list;
        or the applicable component or material specification.

3.3.4   SOURCE SURVEILLANCE/INSPECTION

        The cognizant quality assurance managers, in cooperation with the
        program product assurance manager, shall establish mandatory source
        inspection and surveillance requirements for the procurement of items
        from major subcontractors. Source inspection requirements for other
        procured items will be imposed when the required inspections can be more
        effectively accomplished at the supplier's facilities than at Hughes to
        verify conformance to requirements. Itinerant or resident source
        surveillance shall be employed as necessary to control the reliability
        and quality of the flight equipment.

3.3.5   RECEIVING INSPECTION

        Parts and materials shall be inspected upon receipt or at the supplier's
        facilities to ensure compliance with the requirements of technical
        documents and purchase orders. The amount of inspection or testing
        performed upon receipt shall be determined by the type of product, its
        end use, the amount of source inspection performed by Hughes, and the
        supplier's history. Emphasis shall be placed on verifying the
        conformance to specification of those characteristics whose
        nonconformance may not be detectable during subsequent inspections and
        testing. Results of inspections and/or tests shall be recorded on
        quality history records.

3.4     MANUFACTURING CONTROLS

3.4.1   FABRICATION AND ASSEMBLY OPERATIONS

        Articles and materials shall be controlled at all times to ensure that
        inspection status is maintained and not compromised. Established
        controls shall include adequate handling and packaging of items during
        all operations. Quality records maintained for in-process materials and
        articles shall identify the item and indicate its inspection,
        fabrication, and configuration status. The completed articles shall be
        identified in accordance with engineering requirements. A final
        inspection and review of documentation shall be performed to ensure that
        all required operations and inspections have been satisfactorily
        completed.

        Fabrication, assembly, and rework operations shall be performed in
        accordance with planning documentation based on engineering technical
        requirements and prepared by the responsible engineering/manufacturing
        activities. Assembly planning documentation shall be screened to

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        ensure that the inspections prescribed therein are adequate to ensure
        product compliance with engineering requirements. Screening shall be
        performed by quality assurance personnel or by authorized planning
        screeners. Prescreened master planning documentation may be used.

        Approval of planning documentation by quality assurance or other
        certified personnel shall be indicated by the application of an
        appropriate stamp or signature. Quality assurance personnel shall
        conduct scheduled audits of the fabrication and assembly areas and
        planning documents to ensure that operations are performed in accordance
        with established practices.

3.4.2   STORES CONTROL

        Parts and materials used in flight items shall be issued from controlled
        stores. Stores controls shall include maintenance of traceability,
        limited shelf life material control, and handling of items sensitive to
        contamination or to electrostatic discharge. An inspection status that
        indicates acceptability and includes the required traceability
        information shall be used to provide evidence of acceptance and
        traceability for high reliability parts, materials, bulk parts and
        materials, or assemblies entering a controlled stores. Limited shelf
        life items shall be stored in appropriate controlled environments.
        Quality assurance personnel shall ensure utilization of life-limited
        items within the constraints specified by engineering requirements.
        Periodic storeroom surveys by quality assurance personnel shall ensure
        that adequate measures are taken to protect the product and retain
        traceability. Discrepant articles and materials shall be suspended and
        dispositioned by material review action.

3.4.3   PROCESS CONTROL

        Process control requirements and quality assurance provisions shall be
        contained in specifications referenced in engineering drawings and on
        manufacturing planning documents. When complex processes require
        detailed work instructions for their implementation, laboratory or
        manufacturing engineering instructions shall be generated. Manufacturing
        activities shall implement the requirements, and quality assurance
        operations shall ensure satisfactory implementation and compliance.
        Records shall indicate the results of inspections and process
        verifications. Where processes must be conducted in special
        environments, process controls shall include means for maintaining and
        measuring the required environment.

3.4.4   PROCESS AND PERSONNEL CERTIFICATION

        Quality assurance personnel shall ensure that processes are approved,
        that equipment operating parameters are satisfactory, that personnel are
        certified when required, and that area controls are established as
        specified. Special processes shall be monitored to ensure that process
        steps, temperatures, immersion times, solutions, equipment, personnel
        qualifications, etc, are as specified in the process document. Logs
        shall be maintained, as required, in the area of process performance and
        shall be monitored by quality assurance personnel. Items resulting from
        discrepant processes shall be subject to material review action. Records
        of personnel and equipment certification shall be maintained.

3.4.5   WORKMANSHIP STANDARDS

        Standards of workmanship shall be specified in engineering drawings by
        reference to Hughes, industry, or government documents that establish
        engineering requirements and quality assurance provisions, including
        workmanship criteria. Planning documents shall reference applicable
        workmanship criteria. Acceptance criteria shall be as specified in
        Hughes standards. Quality assurance personnel shall validate that
        hardware is fabricated and assembled in accordance with the applicable
        workmanship requirements specified in engineering and planning
        documents. Solder workmanship criteria shall be those defined by Hughes'
        process documents, which reflect the requirements of SCG PS32023 for
        soldered electrical connections.

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3.4.6   CLEANLINESS AND CONTAMINATION CONTROL

        Special requirements for hardware cleanliness levels shall be referenced
        in engineering drawings. These requirements shall be met by maintaining
        controlled area environments and workmanship standards established to
        control hardware contamination. Quality assurance personnel shall
        perform periodic surveys and inspections to ensure compliance with these
        requirements. Responsible personnel shall be notified in writing of any
        conditions not in compliance with stated requirements and shall be
        required to implement corrective action when so notified. Flight items
        exposed to conditions not meeting specified environmental/cleanliness
        requirements shall be dispositioned through appropriate material review
        action.

3.4.7   CONFIGURATION CONTROL

        Quality assurance personnel shall support the configuration control
        system during assembly and test by:

                1.      Inspecting hardware against engineering requirements and
                        documentation.

                2.      Administering the material review activities for
                        processing of minor waivers.

                3.      Verifying that items of equipment are marked in
                        accordance with engineering requirements.

                4.      Verifying that items procured from subcontractors and
                        suppliers comply with the applicable engineering
                        requirements.

                5.      Maintaining and issuing flight inspection status for
                        items conforming to engineering requirements.

        The manufacturing planner and responsible engineering activity shall
        ensure that the as-built configuration is compliant with the as-designed
        configuration. Configuration audits conducted by the program
        configuration management office shall validate compliance.

3.4.8   ELECTROSTATIC DISCHARGE CONTROL

        Hughes process specification SCG PS 22010 will be used in controlling
        electrostatic discharge, compliant to the guidelines of military
        standards. Requirements will be flowed down to subcontractors and
        suppliers. This process will establish the requirements for the
        protection of static sensitive devices and static sensitive assemblies
        from damage or degradation due to exposure to static fields, discharges,
        and voltage transients. Personnel will complete a static awareness
        certification program.

3.5     TESTING AND INSPECTION

3.5.1   IN-PROCESS INSPECTIONS

        In-process inspections shall be performed at preselected points during
        the fabrication, processing, and assembly operations to provide positive
        verification of product compliance with requirements. Such inspections
        shall be documented on the manufacturing planning or other applicable
        history records. Mandatory inspections shall be performed prior to any
        operation that obscures inspectable characteristics. Crimped, soldered,
        and welded electrical connections shall be inspected to established
        criteria before these connections are covered by subsequent operations.
        Key inspection points shall be identified at manufacturing readiness
        reviews and incorporated into manufacturing planning documents. The
        customer may elect to participate in selected key inspections. The
        contractor task manager shall provide for coordination and timely
        notification wherever the customer has exercised the option to
        participate. Requests for participation shall be coordinated with the
        program product assurance manager.

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        Critical dimensions of machined parts shall be inspected, if they have
        not previously been inspected, when such dimensions are identified on
        drawings. The tooling used for inspection and product acceptance shall
        be inspected and controlled.

3.5.2   FINAL TEST AND INSPECTION

        A final inspection of completed units and articles to be delivered to
        flight stores or spacecraft integration shall be performed to ensure
        that each item conforms to requirements. Quality assurance personnel
        shall review open documentation for completeness to ensure that work
        sequences have been satisfactorily completed and that all
        nonconformances have been resolved. Accepted items shall be identified
        and appropriately controlled and protected prior to release for storage
        or shipment.

        After completion of final tests and inspections, any replacement of
        parts, rework, or other modification of the hardware configuration shall
        necessitate a reinspection and retest to the extent determined necessary
        by the REA and cognizant quality assurance personnel and the customer.

3.5.3   SUBSYSTEM/VEHICLE ASSEMBLY INSPECTION AND RECORDS

        Quality assurance or certified personnel shall perform in-process
        inspections during structural buildup, integration, unit installation,
        and test. Inspection milestones shall include pre- and post-test
        inspections for each environmental exposure. Final acceptance inspection
        shall be performed following the test program to confirm compliance with
        requirements and specifications.

        Hughes shall prepare and maintain records (logs) during the integration
        and test program. These records shall comprise at least the following
        documentation:

                1.      Configuration Summary--An installation and removal log
                        used to record the installation and removal history of
                        control items on the spacecraft. Each entry shall
                        include the subsystem or assembly identification, serial
                        number, flight weight, and location.

                2.      Systems Test Log--A chronological record of the test
                        history maintained by the spacecraft manager.

                3.      Mate/Demate Log--A record of connector mate/demate
                        operations during spacecraft integration and tests.

                4.      Parameter measurements--Test data recorded during
                        spacecraft test program.

                5.      Planning documentation--Records that identify the
                        assembly and inspection operations performed, including
                        approved repairs and modifications and the "as-built"
                        configuration.

3.5.4   TEST PARTICIPATION

        Control item (unit) acceptance tests shall be conducted in accordance
        with an approved test procedure to determine functional compliance.
        Subsystem and spacecraft level tests shall be performed in accordance
        with the approved test plan and its associated detailed test procedures.
        Test procedures shall indicate the parameters to be tested, the
        equipment to be used, the environment in which the test is to be
        conducted, and the acceptance criteria. Recorded test data and/or
        computer reduced data shall become part of the required documentation
        for record retention and shall constitute evidence of conformance to
        requirements.

        Test area surveillance shall be imposed at all levels of qualification
        and acceptance testing as a minimum. The test area surveillance activity
        shall be accomplished by auditing test operations in progress to ensure
        that

                1.      Items are properly identified and handled.

                2.      Test procedures are available and being followed.

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                3.      Test equipment is calibrated.

                4.      Test data and discrepancies are recorded.

                5.      Failure reports are initiated, if failures occur.

                6.      Test results are within the specified limits.

        On an audit basis, this effort, in conjunction with other quality
        assurance activities, shall be of sufficient scope to ensure that
        delivered flight articles conform to requirements.

3.6     NONCONFORMING ARTICLE AND MATERIAL CONTROL

3.6.1   MATERIAL REVIEW ACTION AND CONTROL

        The identity and inspection status of all nonconforming items shall be
        documented on the appropriate quality history record or process anomaly
        report at the point of discovery. The purpose of material review action
        shall be to disposition nonconformances.

        Material review action shall determine whether the departure is due to
        hardware or documentation discrepancies. All review and closure actions
        shall be documented in accordance with existing Contractor quality
        assurance practices.

        Material review actions shall be final, requiring no further action.
        Items dispositioned as acceptable shall be processed thereafter as
        conforming items. The material review members and allowable dispositions
        shall be those cited in Table 3-1.

        Quality assurance personnel shall maintain a list of quality and
        engineering representatives authorized to perform material review
        actions. This list shall be available in all program areas that support
        material review actions. Members may call upon other Hughes personnel,
        such as reliability, stress, and thermal personnel, to act in an
        advisory capacity.

        The system shall ensure that all nonconformances detected by Hughes
        and/or its subcontractor are fully documented. Program related process
        anomaly reports entered into the Hughes electronic database shall be
        accessible by the customer for review. Nonconformance reports submitted
        for formal MRB action shall be provided to the customer when raised.

3.6.1.1 PRELIMINARY REVIEW

        An initial review is conducted upon the discovery of a nonconformance.
        Workmanship errors and minor out of tolerance situations which can be
        reworked to specification conditions are dispositioned by authorized
        personnel through this preliminary review process. Preliminary review
        nonconformances are processed by any material review activity (MRA)
        certified personnel. Engineering and/or manufacturing input may be
        solicited for this action. During preliminary review, it shall be
        determined whether 1) a nonconforming item can be made to conform by
        rework or standard repair, if such has been previously authorized by the
        Material Review Board (MRB); 2) the item should be scrapped (low cost
        items only); or 3) the item must be submitted for higher level material
        review action.

3.6.1.2 ENGINEERING DISPOSITION

        Any discrepancy, deficiency, or defect in fabricated piece parts below
        the assembly level (including microwave integrated circuit [MIC]
        carriers, substrates, and modules) may be dispositioned by engineering
        disposition. This is a material review action performed by engineering
        personnel responsible for the nonconforming item. The responsible
        engineer shall determine the disposition from both an engineering and a
        quality point of view, and may solicit the advice of other expert
        personnel. Nonconformance dispositions shall be documented on the

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        appropriate records/traveler for the item(s). Quality assurance
        personnel shall conduct regular audits to ensure that appropriate
        dispositions are made.

3.6.1.3 ENGINEERING REVIEW

        Engineering review action shall apply to all nonconformances not
        dispositioned by preliminary review, engineering disposition, or MRB
        action. It shall be performed jointly by the responsible quality
        assurance and engineering personnel who shall determine the
        acceptability of nonconforming items submitted for review. The
        responsible engineer shall document and justify the disposition. The
        quality assurance representative shall signify concurrence with the
        disposition on the material review documentation.

3.6.1.4 MATERIAL REVIEW BOARD

        A formal MRB shall be established to review and disposition
        nonconforming material or hardware which cannot be dispositioned under
        lower level material review authority. The MRB consists of
        representatives from quality assurance, engineering, Customer
        representatives and/or program product assurance. The quality assurance
        member of the MRB shall pursue all nonconforming material actions until
        disposition and closeout are complete. MRB action shall be required for
        the following:

                1.      Any nonconforming item referred to the MRB for final
                        disposition (as any may be).

                2.      Any item found discrepant after its integration into the
                        spacecraft structure (subsystem integration) when the
                        disposition is use-as-is, repair, downgrade, or scrap.

                3.      Initial review and approval of standard repair
                        instructions (SRIs).

3.6.2   NONCONFORMANCE DEFINITIONS AND CLASSIFICATIONS

        The following terms, definitions, and classifications shall apply:

                1.      Nonconforming material--Any item, part, or product with
                        one or more characteristics that depart from the
                        requirements of the contract, specification, drawing, or
                        other approved product description. Functional
                        nonconformances must be processed through the failure
                        reporting system.

                2.      Minor nonconformance--A departure from the requirements
                        specified in the approved product description that does
                        not adversely affect contractual spacecraft performance.
                        Material nonconformances are processed through material
                        review action.

                3.      Major nonconformance--A departure from contractual
                        spacecraft performance that cannot be eliminated by
                        authorized material review actions or reduced to a minor
                        nonconformance by repair. Major nonconformances are
                        processed by submitting a request for deviation/waiver
                        to the Customer for approval.

3.6.3   CORRECTIVE ACTION

        Quality assurance personnel shall ensure that prompt action is taken to
        resolve nonconformances. Nonconformance documentation shall include
        cause and corrective action, when it is beneficial to the program.
        Defect data from manufacturing records compiled into a database shall be
        used to determine quality trends and the need for corrective action.
        Causes and recommended corrective actions shall be investigated by
        corrective action boards (CABs). Nonconformance data shall be reviewed
        for trends, corrective action assignments shall be made, and follow-up
        actions shall be taken. Management shall be kept informed of progress
        and completion of corrective action assignments through regularly
        published reports. Corrective action is taken in accordance with Hughes
        policy as defined in the quality assurance procedures.

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        Action taken to correct minor nonconformances shall not be required
        unless such action is beneficial to the program. It shall not normally
        be taken if:

                1.      The operation is monitored and discrepancies do not
                        exceed the established limits.

                2.      A discrepant item/operation has been discontinued or
                        modified because of a design change.

                3.      Items are no longer being manufactured.

                4.      An assignable cause cannot be determined.

3.6.4   SUBCONTRACTOR MATERIAL REVIEW

        Hughes may delegate limited material review authority to selected
        subcontractors of complex articles. Subcontractors considered for
        material review authority shall be required to submit written plans for
        material review to Hughes for approval prior to implementation. Material
        review requirements for documentation, segregation, review, corrective
        action, and reporting need not be identical but shall be consistent with
        those described in this plan.

3.6.5   DATABASE

        Hughes shall establish and maintain a database of failures and
        inspection nonconformances occurring at the unit and subsystem levels.
        The database shall serve as an effective means of retrieval of data to
        support status reporting, trend analysis, failure assessments, and the
        effectiveness of the nonconformance material control operation.

3.7     MEASUREMENT PROCESSES AND CALIBRATION

3.7.1   BASIC SYSTEM

        Hughes' approved and documented metrology system shall be used to
        control measurement processes. This system provides for the selection,
        approval, calibration, maintenance, and control of inspection and test
        measuring equipment in accordance with ANSI/NCSL Z540-1.

        Hughes shall be responsible for maintaining the required calibration and
        measurement standards and for providing traceability to approved primary
        or secondary reference standards. Inspection and test measuring
        equipment used to establish acceptance of flight articles through
        quantitative measurements shall be periodically calibrated in a manner
        that ensures conformance to requirements.

        Local control points within each operations shall maintain a mandatory
        recall system that ensures adequate periodic calibration of equipment.
        The recall system shall provide adequate follow-up for reporting and/or
        servicing of delinquent items.

3.7.2   CALIBRATION CONTROLS

        Unique labels or codes that identify and cite the last and the next
        calibration dates shall be affixed to measuring and test equipment.
        Intervals for calibration shall depend on use, accuracy, type, and other
        conditions that affect measurement control. Calibration intervals shall
        be established for each model or type of equipment. Items not used for
        quantitative measurements shall not require calibration or indication of
        calibration status. When a piece of equipment's accuracy is verified by
        another piece of equipment that is fully calibrated, an NCR (no
        calibration required) sticker shall be used in its identification.

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        If the calibration period of an article of test equipment has expired, a
        limited extension of its period may be authorized by the cognizant
        quality assurance organization.

3.7.3   REMEDIAL AND PREVENTIVE ACTION

        A data feedback system shall be employed to advise the using activity
        and responsible quality organizations when test equipment is determined
        to be risk defective (marginal or inaccurate) at the time of periodic
        calibration. Engineering personnel shall determine whether such
        measuring and test equipment has affected the quality of measurements
        and initiate appropriate corrective action. Quality assurance personnel
        shall conduct audits to verify that measuring and test equipment is
        calibrated and properly maintained.

3.7.4   SUBCONTRACTOR CONTROLS

        The requirements for measuring and inspection equipment control shall be
        implemented through the quality requirements invoked in procurement,
        quality, or engineering documents. Such requirements shall be consistent
        with the requirements of this plan.

3.8     HISTORY RECORDS AND TRACEABILITY

3.8.1   HISTORY RECORDS

        The following records establish the procurement, manufacturing,
        inspection, and test histories for flight articles and provide the
        historical documentation for each item:

                1.      Procurement packages.

                2.      Material certifications.

                3.      Fabrication quality records.

                4.      Kit requisitions with traceability data.

                5.      Quality control history records.

                6.      Manufacturing and assembly planning documents.

                7.      Drawings.

                8.      Inspection and test documents.

                9.      Test data sheets.

                10.     Material review actions/deviations/waivers.

                11.     Test anomaly reports/process anomaly.

                12.     Configuration summary lists.

        Documentation accompanying flight hardware shall indicate the inspection
        status. The results of inspections and tests, discrepancies, statements
        of rework accomplished, and the acceptance of operations shall be
        entered on the quality history records and authenticated by the
        appropriate inspection stamp, test stamp, or signature. History records
        shall be maintained by Hughes to support internal selloff and spacecraft
        selloff to the customer.

3.8.2   PHOTOGRAPHS

        Closeout photographs shall be taken as required of assemblies and units
        in their final configuration prior to installation of covers.

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3.8.3   TRACEABILITY

        Hughes' traceability system shall ensure the capability to correlate
        historical records during procurement, assembly, and test. It shall
        permit the tracing of the quality histories of assemblies, components,
        and parts to the procurement document and shall provide for 1)
        cross-referencing of traceability information to assembly documentation
        and 2) the storage of the accumulated history and data. All flight
        electronic piece parts shall be traceable to the date code and
        manufacturer's inspection lot. Carbon composition resistors from
        Allen-Bradley and mechanical feed-throughs are traceable only to the
        supplier. Die, packages, and substrates used in custom hybrids and MIC
        modules shall be traceable to their production lot. Materials used in
        the hardware shall be traceable to manufacturer and batch number or lot
        number. Standard hardware, such as nuts, screws, washers, etc, procured
        to military standards need not be traceable.

        The traceability system shall use Hughes assigned traceability numbers.
        Quality assurance shall be responsible for ensuring initial traceability
        of parts and materials so that configuration status can be related to
        source data. Quality assurance personnel shall be responsible for
        auditing the traceability system to ensure that hardware configuration
        and quality history are maintained during the manufacturing and test
        cycle.

3.9     STAMP CONTROLS

        Hughes' standard system shall be used to control inspection stamps or
        signatures used to signify acceptance of flight items or documentation.
        These controls include the issuance, maintenance, and recall of
        inspection stamps to qualified personnel authorized to use them within
        the product quality assurance functions. Stamp possession shall be
        verified periodically by cognizant quality assurance management
        personnel. Signature authority shall be identifiable through published
        lists released through the authorizing quality organization.

3.10    SAMPLING PLANS, STATISTICAL PLANNING, AND ANALYSIS

        Hughes' sampling plans shall be used when inspections or tests are
        destructive or when inherent characteristics or noncritical application
        indicate that a reduction in inspection or testing can be achieved.
        ANSI/ASQC Z1.4 shall be used as applicable.

        The degree and quantity of required inspections and tests shall be
        determined by review and analysis of previous inspection and test
        results. Rejected lots and resubmitted lots shall be
        screened/re-inspected at a sampling level that is higher than that
        prescribed by the original plan.

3.11    HANDLING AND SHIPPING

3.11.1  HANDLING

        Engineering drawings, procedures, and program instructions shall define
        requirements for the preservation, packaging, handling, storage, and
        shipping of articles and materials. These requirements shall be
        incorporated in work authorizations, planning documents, operating
        procedures, and engineering drawings.

        Fabricated parts and subassemblies shall be placed in kits, containers,
        or protective bags. Units shall remain in their protective containers
        until installation. Adequacy of the packaging, handling, and storage
        shall be audited by quality assurance personnel.

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3.11.2  SHIPPING

        Articles shipped shall be accompanied by technical and shipping
        documents required by the contract. Items shipped shall be subject to
        Hughes' final packaging and shipping inspection requirements. The
        spacecraft shall be packaged in containers that protect the hardware
        during shipment to the launch site.

3.11.3  TRANSPORTATION

        The Spacecraft quality assurance representative shall monitor the
        spacecraft packaging process and perform inspections to ensure that the
        spacecraft is packaged in accordance with the applicable packaging and
        handling procedures. As part of this process, these people shall ensure
        that all environment control equipment and monitors are in place and
        functioning.

        Spacecraft shall be safely instrumented, packaged for shipment, handled,
        transported, and checked in-route in accordance with the provisions of
        Hughes' standard spacecraft transportation plan.

3.12    SOFTWARE QUALITY ASSURANCE

        The following software development and control procedures shall be
        implemented by the responsible task managers through Software Quality
        Assurance (SQA) personnel:

                1.      A SQA program plan addressing the mechanism of
                        verification and validation of software requirements in
                        the deliverable products, as well as the in-process
                        evaluations and other SQA tasks.

                2.      A mechanism to assure that applicable software quality
                        requirements are flowed down to subcontractors.

                3.      A review of software documentation for adherence to
                        engineering requirements from a quality perspective.

                4.      A review of the software configuration management system
                        to ensure proper management of changes to software and
                        its related technical documentation.

                5.      A review of software test plans, procedures, and
                        instructions, and witnessing the subsequent testing
                        process itself for compliance to contractual
                        requirements.

                6.      A verification that contract qualification requirements
                        are performed in accordance with the previous phase's
                        specifications, including certification of the
                        validation process via documented objective evidence.
                        The procedure shall include a method for verifying the
                        product in terms of storage, handling, packing, marking,
                        and delivery, to prevent damage, loss, deterioration,
                        degradation, or substitution of the product.

                7.      A SQA documentation system to record objective evidence
                        and traceability trail to SQA activities.

                8.      A software corrective action and trend analysis program
                        to span the breath of the software life cycle process,
                        where the findings and concerns are documented and
                        corrective action taken to avoid repetitive failures.

        Hughes shall prepare and submit a software quality plan applicable to
        all firmware and deliverable software for customer approval. This plan
        shall identify the tasks to be performed, systems, and procedures to be
        used, and quality assurance evaluation methodology to be employed
        throughout the firmware and software development and test process.
        Configuration control of firmware and deliverable software shall be
        maintained after the baseline configuration is established.

                                      3-12
<PAGE>   228

3.13    LAUNCH SITE ACTIVITIES

        The Spacecraft quality assurance representatives shall be present at the
        launch site to monitor all launch site activities to ensure that product
        assurance and quality assurance requirements are complied with
        throughout this period.

        These quality assurance representatives shall be a key member of the
        launch team and attend coordination and planning meetings throughout the
        launch campaign.

        These quality assurance representatives shall maintain the required
        quality records and perform the necessary inspections and surveillance
        during receipt, test, final assembly, and installation of the spacecraft
        onto the launch vehicle. Spacecraft storage and assembly areas,
        equipment calibration, and adherence to safety and cleanliness
        procedures shall be monitored. The quality assurance representative
        shall also be responsible for conducting failure and material review
        activities at the launch site, coordinating the activities with the
        program product assurance manager, and for interfacing with the customer
        launch site representative on quality related issues.

                                  [FLOW CHART]

                    FIGURE 3-1. QUALITY ASSURANCE INTERFACES

                                      3-13
<PAGE>   229

                       TABLE 3-1, FLIGHT HARDWARE MATERIAL
                                REVIEW AUTHORITY

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------------------------
  Function              Members                                                Disposition
------------------------------------------------------------------------------------------------------------------------
<S>                    <C>                        <C>
Preliminary            Quality                    Rework/complete to drawing or specification requirements (i.e.,
review                 Assurance                  resolder, replace, rewire)

                                                  Low cost scrap

                                                  Authorized standard repair

                                                  Submit to engineering review or Material Review Board

Engineering            Engineering                Use as is--minor nonconformances
disposition
                                                  Rework/complete to drawing or specification requirements (i.e.,
                                                  resolder, replace, rewire)

                                                  Scrap--unfit for use or uneconomically repairable

                                                  Return to supplier

                                                  Authorized standard repair

                                                  Submit to engineering review or Material Review

                                                  Downgrade to nonflight

Engineering            Quality                    Rework/complete to engineering drawing and specification
review                 Assurance                  requirements
                       Engineering
                                                  Return to supplier

                                                  Downgrade to nonflight

                                                  Rework to Material Review Board approved repair instructions

                                                  Use as is--minor nonconformances

                                                  Scrap--obviously unfit for use or uneconomically repairable

                                                  Submit to Material Review Board

Material Review        Quality                    Rework/complete to engineering drawing and specification
Board                  Assurance                  requirements
                       Engineering
                                                  Return to supplier

                       Program Product            Repair (includes initial approval of standard repair)
                       Assurance
                                                  Use as is (includes dropped or stressed hardware)
                       Customer
                                                  Upgrade to flight status

                                                  Downgrade to nonflight

                                                  Scrap--hardware declared unfit to use

                                                  Submit to the customer for deviation or waiver approval
------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      3-14
<PAGE>   230

4.      RELIABILITY ENGINEERING

4.1     BASIC PROVISIONS

        Hughes shall conduct a program of reliability engineering activities
        that ensures that the reliability requirements of the satellite
        technical specification are met during all program phases. The baseline
        analysis documentation for existing designs shall be those provided to
        the customer as Exhibit A deliverables. The activity during the design
        and development process of new and modified designs shall consist
        primarily of determining hardware reliability and lifetime
        characteristics by performing analyses of these designs, participating
        in design reviews, and updating spacecraft reliability assessments.
        Existing analyses shall be reviewed to the extent necessary to assure
        that the impact of the modifications being implemented do not invalidate
        the conditions of these heritage analyses.

        Activity during the flight hardware manufacturing phase shall consist
        primarily of identifying, analyzing, reporting, and correcting failures.

4.2     FUNCTION ADMINISTRATION

4.2.1   RESPONSIBILITIES

        Reliability engineering specialists assigned to the program and
        reporting to the program product assurance manager shall be responsible
        for ensuring that reliability disciplines are effectively applied in the
        design, manufacturing, and test activities. Completion of reliability
        assessment tasks shall be a joint responsibility of the assigned
        reliability engineering specialists and responsible engineering
        personnel. Reliability engineering specialists shall perform subsystem
        and system level analyses. They shall provide expertise in methodology
        and documentation of unit level reliability assessments.

        Responsibility for performing program reliability engineering tasks
        shall be distributed as shown in Table 4-1. The program reliability
        engineer shall maintain cognizance of the status of the reliability
        assessment program by convening and attending meetings at which reports
        are given by the reliability specialists. These specialists shall work
        in concert with the program product assurance manager to maintain
        contact with customer consultants and to satisfy contractual
        requirements pertaining to the failure reporting system.

4.2.2   TASKS

        Reliability engineering specialists assigned to the program product
        assurance manager, working in close coordination with the responsible
        engineering activities, shall be responsible for:

                1.      Preparing requirements for and assisting responsible
                        engineering design activities with system, subsystem,
                        unit, and component level reliability tasks.

                2.      Establishing reliability models, apportionments, and
                        assessments of reliability with recommendations for
                        design improvements.

                3.      Supporting engineering evaluation and documentation of
                        parts application derating and failure modes, effects,
                        and criticality analysis of hardware.

                4.      Participating in design reviews.

                5.      Ensuring that failures occurring during the hardware
                        test program are adequately documented, analyzed,
                        evaluated, reported, and presented to the program
                        Failure Review Board (FRB) for closure.

                6.      Defining reliability requirements for procurement
                        specifications, statements of work, and other
                        subcontractor documentation.

                7.      Maintaining a direct interface with the program product
                        assurance manager to ensure compliance with program
                        requirements.

                                      4-1
<PAGE>   231

4.3     RELIABILITY ASSESSMENTS

4.3.1   SPACECRAFT DESIGN RELIABILITY

        Assessments of the reliability of existing designs shall be based, to
        the extent possible, on existing documentation to preclude duplication
        of analyses and reporting efforts. These existing analyses shall be
        reviewed by the assigned reliability engineering personnel to verify
        that the environmental and electrical stress conditions cited in them
        continue to be valid for the program. This reliability assessment data
        shall be summarized at the appropriate design review.

        Equipment that has previously been qualified, but which requires
        significant design modification to meet program requirements, shall be
        analyzed in sufficient detail to ensure that

                1.      The new or significantly modified design is executed in
                        accordance with the current design requirements.

                2.      The design modifications do not introduce overstress
                        conditions or failure modes in the unmodified portions
                        of the equipment.

        The reliability assessments for new hardware shall be performed and
        documented to ensure conformance to the requirements cited herein.
        Reliability analyses shall be made during the design and development
        program as necessary to identify potential problem areas and to support
        tradeoff analyses; to evaluate alternative design approaches; and to
        assess the reliability margin and confidence in achieving the system
        reliability requirements. Reliability assessments and evaluations shall
        be presented at appropriate design reviews to confirm compliance with
        requirements.

4.3.1.1 REQUIREMENTS

        The spacecraft design shall meet the reliability and lifetime
        requirements specified in the system performance specification.

4.3.1.2 APPORTIONMENT

        The reliability requirement shall be apportioned to each unit and
        subsystem to establish target reliability values. The reliability
        apportionment, when compared to predicted reliability, shall be used to
        measure achievement of the reliability objective.

4.3.2   ANALYSES

        Reliability analyses shall be performed concurrent with the design
        process to provide analytical evidence of spacecraft design compliance
        with the specified reliability requirements. Reliability predictions
        shall employ parts count, temperature estimate, and derating methods
        using mathematical models for the equipment under consideration derived
        from the mission success criteria. The mathematical treatment utilized
        in the reliability analyses shall be presented in sufficient detail to
        make the analysis techniques clear.

        Initial reliability predictions for equipment with new or significantly
        modified designs shall be based upon complexity, operational and
        functional considerations, and parts count data, using the best
        available stress and temperature estimates to establish part failure
        rates. Such factors as redundancy and duty cycles shall be considered.
        The probability that the system will operate within specified limits at
        given points in time shall be computed for the mission profile.

        A final reliability prediction shall be made when the equipment design
        is firm and sufficient data are available to enable a comprehensive
        assessment of the design reliability to be made. The final reliability
        analyses shall consider electrical stress deratings, predicted operating
        temperatures, redundancy, and equipment operating cycles. Each
        reliability analysis shall include

                                      4-2
<PAGE>   232

        a statement of the mission success criteria, equipment duty cycles,
        stress analyses, mission times or cycles, and environmental factors
        considered. Existing reliability analysis results shall be utilized when
        appropriate.

4.3.2.1 FAILURE RATES

        The failure rate data used, as well as the applicable environmental and
        application stress factors, shall be based on the mutually agreed
        revision of MIL-HDBK-217 for parts contained in the authorized parts
        list. Where experience has indicated that modification of MIL-HDBK-217
        failure rates for satellite applications is appropriate, such modified
        failure rates shall be incorporated in applicable engineering
        procedures. Parts or items for which representative failure rates are
        not listed shall be taken from the best available source of data and
        justified in the analyses documentation. Historical failure data
        relevant to the spacecraft design shall be made available to the
        customer product assurance representative for on-site review upon
        request. Failure rates and source data other than MIL-HDBK-217 shall be
        subject to customer review and concurrence. Failure rates assigned to
        ASICs and MCMs also require customer concurrence. Failure rates used for
        supplier equipments shall be based upon approved source data which shall
        be consistent with the data used throughout the spacecraft design
        evaluation process.

        Parts in an "on" state shall be considered to exhibit an "active"
        failure rate; parts in an "off" state shall be considered to exhibit a
        "dormant" failure rate. Dormant adjustment factors shall be generally
        specified as 10% of active failure rates. Failure rate data shall be
        included in the reliability documentation.

4.3.2.2 ANALYSIS RESULTS

        Reliability shall present the spacecraft reliability assessment at
        system PDR and CDR. Assessments for new and modified designs shall be
        presented at the unit level PDR and CDR. The System PDR data package
        shall include results from existing designs and preliminary results for
        new designs. Reliability shall update the PDR data package and provide
        the final detailed results on new designs, and modified designs at CDR.

4.3.3   PART APPLICATION DERATING

        Part application derating requirements are those defined for specific
        part types and stress levels in Contractor's engineering derating policy
        for parts applied under "preferred" and "acceptable" regions of
        temperature and electrical stresses. Part application in areas of high
        reliability risk are identified in the policy as "restricted" regions.
        The implementation of this derating policy in the design process shall
        be monitored by the program reliability engineering specialists.

        Parts application derating analyses shall be prepared for new and
        significantly modified designs to indicate actual stress and the
        relative derating of each part. This analysis shall establish that the
        required steady state derating levels of applied voltage, current,
        temperature, and power dissipation have not been exceeded. The results
        of steady state stress derating analyses shall be used as an input for
        the final reliability predictions. Worst case transient conditions shall
        be considered in the derating analyses to ensure that no part is
        overstressed. Undervoltage-overvoltage conditions during ground testing
        shall be included in stress analyses to ensure design adequacy.

        The use of parts in "approval required" regions shall require review and
        approval by the program Parts and Materials Control Board (PMPCB).
        Justification for approval shall include verification that reliability
        is not compromised and that the part is not overstressed in either
        steady state or transient operation. The unit engineer shall be required
        to reduce the application stress by appropriate redesign or by choice of
        an alternative part for those exceptions not approved by the PMPCB. The
        parts derating criteria shall be available to the customer for on-site
        review. Deviations from derating criteria shall be submitted to the
        program PMPCB.

                                      4-3
<PAGE>   233

        Parts derating and stress analyses need not be conducted on any
        electronic equipment that has been previously designed and qualified to
        environments and stress levels compliant with the requirements for this
        mission. Evidence of adequate design derating margin shall be derived
        from existing derating analysis documentation and subsequent unit
        modification data. It shall be verified by the assigned reliability
        engineering specialist. The parts derating criteria shall be available
        for on-site review by Customer representatives, upon request. The
        criteria shall be consistent with the requirements of MIL-STD-1547. Any
        deviations from this requirement shall be identified and submitted to
        the customer for review. Exceptions to the derating policy shall be
        identified, documented and submitted to the customer product assurance
        representative for approval.

4.3.4   FAILURE MODES, EFFECTS, AND CRITICALITY ANALYSIS

        Failure modes, effects, and criticality analyses (FMECAs) shall be
        conducted to evaluate the spacecraft bus and payload designs in
        conjunction with design reviews. The primary function of these analyses
        shall be to identify critical failure modes in the design and mitigate
        the susceptibility of the spacecraft to such failures or their effects.
        A significant further function shall be to identify, document, and
        eliminate single point failures insofar as is practical.

        All single point failures identified in the FMECA shall be listed as
        part of the critical items list. FMECAs shall be updated prior to each
        design review to reflect latest design changes or available data. When
        major design changes after the system CDR are determined to
        significantly affect system FMECA data, the FMECA shall be revised to
        show the latest design assessment.

        The FMECAs shall establish functional unit level failure modes. The
        FMECAs shall be performed to the unit interface level or when necessary
        down to internal redundancy. Details of single point failures,
        catastrophic failures, and failures that will result in degraded
        performance and outages shall be identified. The FMECAs shall also
        include a study of circuit elements sensitive to single event upsets and
        possible effects on spacecraft performance. The impact upon performance
        of the propagation of failure modes through units, subsystems, and
        interfaces shall be assessed. The system level FMECA shall consider also
        the effects of various subsystem failure modes on the performance of the
        system and on mission success and the incorporation of fault isolation
        provisions where they may be appropriate.

4.3.5   SINGLE POINT FAILURES

        The FMECAs shall identify single point failures in the design at the
        unit and higher levels of assembly. A single point failure shall be
        defined as the failure of any nonredundant single element that causes
        failure of the spacecraft mission.

        The spacecraft shall be designed such that the total probability of
        occurrence of single point failures during the spacecraft mission is
        minimized. The implementation of redundancy shall be considered when a
        function is deemed critical or when a single point failure mode exists
        that cannot be practically eliminated within the design and performance
        constraints. Each identified single point failure shall be included in a
        list, along with supporting rationale, and presented at design reviews.
        The baseline lists shall be Tables 11, 12 and 13 of the Systems
        Reliability Analysis Report, RA80447-H00-001, dated June 1999.

4.3.6   WEAROUT ANALYSIS

        The reliability analyses shall include an evaluation of designs subject
        to degradation or wearout. Where possible, the life dependent
        mechanism(s) shall be identified, and test data shall be used to
        determine margin for achievement of the mission lifetime requirements.
        The evaluation shall also consider such factors as deterioration
        mechanisms, outgassing of materials, processing, storage, and aging
        effects. Operational limitations and controls or methods used in the
        design and manufacture of the hardware to preclude degradation during
        the mission shall be considered.

                                      4-4
<PAGE>   234

        The baseline list shall be Table 14 of the Systems Reliability Analysis
        Report, RA80447-H00-001, dated June 1999.

4.3.7   WORST CASE ANALYSIS

        A worst case analysis shall be performed at the unit level to determine
        critical parameter performance effects due to tolerance, aging,
        electrostatic discharge (ESD) effects, temperature, and radiation
        exposure under worst case parameter limits. Standard Contractor's
        Engineering Procedures for performance of worst case analysis shall be
        invoked on electronic equipment.

        The worst case analysis shall consider the adequacy of the performance
        margins in electronic circuits, optics, and mechanical and
        electromechanical items, and shall assess the adequacy of stress
        derating of the design as applicable. Critical parameters to be
        considered in the analysis shall be identified by the responsible
        engineering activity (REA). Parameters shall be set at worst case limits
        and worst case environmental stresses for the parameter or operation
        being evaluated. These analyses may be demonstrated analytically,
        through engineering designated tests, or through a combination thereof.

        Worst case analyses shall be developed for new units as part of the
        design process and the required design review documentation. Maximum
        operating stresses shall be based on worst case environment and
        parameter variations with operating modes and bus extremes, including
        transient conditions such as post-eclipse, turn-on, and turn-off. As
        part of the worst case analysis, the possible effects of soft errors
        (upsets) in digital logic devices shall be evaluated and methods
        identified for the prevention of occurrence.

4.3.8   CRITICAL ITEMS LIST

        The baseline list shall be Table 15 of the Systems Reliability Analysis
        Report, RA80447-H00-001, dated June 1999. This list shall be the
        baseline reference for monitoring the status and progress of each
        critical item identified. Controls for procuring, manufacturing,
        inspecting, testing, and handling critical items shall be specified in
        the specifications and procedures concerning such items.

        Critical items identification shall be a task of the spacecraft
        reliability analysis prescribed by Section 4.3.1 of this plan. New Items
        determined by such analysis to be 1) nonredundant major elements or
        items with single point failures; 2) major items not previously
        qualified; 3) life limited items shall be considered critical items; or
        4) process sensitive items. Other items which, during the progress of
        the program, are found to be of significant risk, shall be added to the
        list. Items that, as a result of design change or for other reason, are
        no longer considered critical may be deleted from the list.

        A critical items data file shall be maintained by reliability
        engineering specialists and made available for review.

4.4     FAILURE REPORTING AND CORRECTIVE ACTION

4.4.1   BASIC PROVISIONS

        Customer product assurance representatives or their designated
        alternates shall be notified of functional failures that occur in
        qualification and acceptance testing of equipment at the unit,
        subsystem, or system level within 24 hours of the receipt by a Hughes
        program PA failure control point of notice of such failure. Notification
        shall be effected through e-mail and/or through submittal of a copy of
        the initial report.

                                      4-5
<PAGE>   235

        A formal, controlled failure reporting, analysis, and corrective action
        system shall be implemented. This system shall be designed to maximize
        product reliability and quality through effective analysis and feedback
        of failure data during the test program.

        The program product assurance manager shall be responsible for the
        failure activities, including overseeing the functioning system as
        defined herein to ensure that failure reporting is compliant with the
        provisions of this plan. Overall responsibility for implementing the
        system rests with the reliability engineer. The failure reporting task
        is performed as a joint activity between the program assigned
        reliability specialists and the cognizant engineering activities. The
        basic failure management system is illustrated in Figure 4-1.

        The program product assurance manager shall provide for the coordination
        of the failure reporting activities, including overseeing the
        functioning system to ensure that:

                1)      Failures are correctly documented and analyzed.

                2)      Failures are adequately reviewed and proper corrective
                        action is taken.

                3)      Failures are closed by Failure Review Board (FRB)
                        action.

                4)      Failure data are disseminated to responsible personnel
                        by the program office.

                5)      Failure trends are identified.

        Test anomaly reports shall be required on failures that occur during
        unit, subsystem, or spacecraft level qualification, protoflight, or
        flight acceptance testing and on-orbit satellite anomaly. A formal
        review of each failure shall be conducted by a program established FRB.
        Reporting and reviewing failures shall be consistent with Contractor
        established policies and instructions. Verified failures shall be
        subjected to analysis to determine cause, mechanisms, and corrective
        action. Failures attributed to hi-rel parts shall be reported at any
        level of test and copies of reports provided to the customer. The
        customer shall be invited to participate in the FRBs which address
        failure of hi-rel parts.

4.4.2   FAILURE DEFINITION AND DOCUMENTATION

        A failure shall be defined as the occurrence of anomalous performance
        resulting from any condition causing the article of equipment under test
        to deviate from the performance specified as acceptable by the satellite
        system specification and/or the applicable test procedure. All failures
        shall be documented in a report containing at least the following
        information:

                1.      The name of the program on which the failure occurred
                        and the number of the contract under which work on that
                        program is conducted.

                2.      The date of failure occurrence, the test phase during
                        which the article under test failed, and the environment
                        in which the test was being conducted.

                3.      The symptoms by which the failure was identified (the
                        conditions observed as opposed to those expected).

                4.      The identity, in terms of part name, part number, and
                        part serial number, of the failed item.

                5.      The results of the failure analyses conducted and the
                        nature of the rework/retest action taken in response.

                6.      The part number, date code, part type, and reference
                        designator of any high reliability part removed as a
                        result of the failure.

                7.      An indication of whether the failure of the part or item
                        in question constitutes a primary or a secondary
                        failure.

                8.      The identified cause of the failure; the data and
                        reasoning that led to its identification as the cause;
                        and the substance of the corrective action taken.

4.4.3   FAILURE ANALYSIS

                                      4-6
<PAGE>   236

        Failure analysis is initiated at the site of failure, and considers
        physical conditions prior to failure, sequence of the test being
        performed, and symptoms at the time of failure. Evaluation of each
        failure shall be documented in detail by engineering on the test anomaly
        report form, using continuation sheets and attachments as required.

        Detailed analyses of failed parts shall be performed when deemed
        necessary by the responsible engineer, the reliability engineering
        specialist, or the FRB. Part failure analyses results shall be submitted
        to the FRB as part of the failure closeout documentation.

        Any failure occurring after qualification of a given unit may justify
        revision of the design or fabrication/control procedures. Design
        modifications shall be incorporated into all flight units.

        Potential overstress of other components shall be considered as part of
        the failure investigation to ensure that no other items were damaged by
        the failure. Analysis results shall be included as part of the failure
        report documentation.

        Generic or lot related problems detected as a result of either part or
        material failure analyses performed on active contractor programs or
        when received through an industry alert bulletin, shall be disseminated
        via the contractor's alert bulletin system. These alerts shall be
        reviewed by appropriate contractor functions to verify and purge suspect
        items.

        Existing data processing systems shall be used to review and analyze
        failure data for trends and to determine when corrective action is
        required. Failure trend data shall be made available to the customer for
        review.

4.4.4   FAILURE REVIEW BOARD

        The contractor shall convene and conduct periodic FRB meetings to review
        reported failures and to determine actions to be taken to investigate,
        follow-up, and close out failures. The program product assurance manager
        or his designee shall chair the FRB. Other members shall include the
        responsible unit or subsystem engineer, system engineer, customer and
        reliability engineer. Specialist support shall be provided as necessary
        to adequately present and review the failures under consideration. A
        failure report shall be closed when the FRB has agreed to closure. As
        chairman, the program product assurance manager shall ensure that:

                1.      Failure reports are timely, accurate, and complete.

                2.      Open reports are reviewed regularly and closure plans
                        are developed and executed.

                3.      Causes of failures are determined and proper analysis
                        has been conducted.

                4.      Effective corrective action is being taken.

                5.      Each Test Anomaly report and failure analysis report is
                        reviewed and accepted.

                6.      Closeout actions are completed.

4.4.5   SUBCONTRACTOR FAILURE REPORTING

        Selected subcontractors shall be required to implement a failure
        reporting system in support of the contractor's system. Subcontractor
        failure report forms may be used to report failures and corrective
        action when approved by the contractor. When failures occur during
        acceptance testing, the subcontractor shall be required to notify the
        contractor within 24 hours. An initial copy of a failure report, if not
        submitted as part of the 24 hour notification, must be submitted to the
        contractor within 5 working days after occurrence of failure. The
        documentation, investigation, analysis, and closeout of failures shall
        meet the same basic requirements as are prescribed for the contractor
        herein. Subcontractor failure reports and closeout actions shall be
        reviewed by the program FRB.

                                      4-7
<PAGE>   237

                                  [FLOW CHART]

                      FIGURE 4-1. FAILURE MANAGEMENT SYSTEM

                     TABLE 4-1. RELIABILITY ENGINEERING TASK
                                RESPONSIBILITIES

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------
                                                           Responsibility
                                       ----------------------------------------------------------
        Task                                 Primary                            Support
-------------------------------------------------------------------------------------------------
<S>                                    <C>                                <C>
Reliability apportionment              Reliability engineer
System reliability analysis            Reliability engineer               Systems engineer
Unit reliability analysis              Reliability engineer               Unit engineer
Part application derating              Unit engineer                      Reliability engineer
Worst case analysis                    Unit engineer                      Reliability engineer
Systems FMECA                          Reliability engineer               System engineer
Subsystem FMECA                        Subsystem engineer                 Reliability engineer
Interface/unit FMECA                   Unit engineer                      Reliability engineer
Single point failures                  Reliability engineer               Unit/systems engineers
Wearout analysis                       Unit engineer                      Reliability engineer
Unit maintainability                   Unit engineer                      Reliability engineer
-------------------------------------------------------------------------------------------------
</TABLE>

                                      4-8
<PAGE>   238

5.      PARTS, MATERIALS, AND PROCESSES CONTROL

5.1     BASIC PROVISIONS

        Hughes shall establish and maintain on the program, a comprehensive
        program of activities for controlling the specification, selection,
        approval, application, qualification, screening, and acceptance of all
        parts, materials, and processes to be used in flight hardware.

5.2     FUNCTION ADMINISTRATION

        The program product assurance manager shall establish and maintain
        appropriate controls over all parts, materials, and processes used on
        the program. The required controls shall be implemented through the
        program Parts, Materials, and Processes Control Board (PMPCB), which
        shall be chaired by the program product assurance manager or his
        designee. This board shall approve or disapprove the use of all new
        parts, materials, and processes considered for use on the program. The
        PMPCB shall ensure compliance of all parts, materials, and processes
        with both technical and quality requirements and shall require maximum
        standardization with minimum use of nonstandard parts, materials, and
        processes. It shall also oversee the review of discrepancies that result
        from destructive physical analyses of part samples and determine actions
        to be taken, but may delegate routine dispositive actions to responsible
        personnel.

        PMPCB membership shall include the program product assurance manager,
        customer designated parts and materials engineers, a representative of
        logistics management, and the responsible engineering authority (REA).
        Technical specialists shall assist the PMPCB in the evaluation of new
        items and provide support in the selection, specification, and
        qualification of new parts, materials, and processes, as required.
        Approval by the PMPCB chairman of a part, material, or process shall
        constitute authority for its use in the flight hardware.

5.3     PROGRAM REQUIREMENTS

5.3.1   AUTHORIZED LISTS

        Product assurance shall maintain a program authorized parts list (APL)
        designated as ICO1 and the ICO authorized materials and processes list
        (AMPL) which identify those items approved by the PMPCB for use on the
        program. New items shall be placed on the appropriate list following
        PMPCB approval. The program APL shall reference for each part cited the
        latest approved version of the applicable procurement specification. The
        program AMPL, which shall be considered the baseline declared materials
        and processes list, shall similarly reference for each item the latest
        approved version of the applicable procurement specification.

        The program APL (ICO1) shall be used as the basis for parts selection
        and shall be submitted to the customer for review. Parts not contained
        in ICO1 shall be selected first from the Hughes Preferred Parts List
        (HSCPPL) and then from other sources and standards which conform the
        selection criteria of this plan. Subsequent changes shall be reviewed by
        the customer representative as part of the PMPCB activity. Minutes of
        the PMPCB will provide evidence of approved changes between issuance of
        updates. Revised and updated versions of the APL shall be made available
        to the customer for review as issued.

5.3.2   SELECTION

        Each design activity shall be responsible for selecting the parts,
        materials, and processes used in implementing the element of the
        spacecraft design over which it has cognizance. Its selection shall be
        based on demonstrated performance, including qualification and
        reliability histories and/or flight performance. Special emphasis shall
        be placed on the control of special parts and state-of-

                                      5-1
<PAGE>   239

        the art parts and on control of critical processes, including
        metallurgical and chemical bonding, plating, and coating and surface
        treatment processes.

        All parts used in flight hardware shall have been either 1) qualified to
        Hughes specified space application requirements imposed on previous high
        reliability space programs or 2) approved by the PMPCB. Parts approved
        for use but having no history of use on space projects shall be
        considered nonstandard. The PMPCB shall maintain a list of all
        nonstandard parts used. This list shall include a qualification
        completion date and other data ensuring traceability. Requests for PMPCB
        approval to use nonstandard parts in flight hardware shall include
        technical justification for their use. Requests for the use of
        nonstandard parts that are approved by the PMPCB shall be available to
        the customer representative on site. All requests for the use of
        non-standard parts which do not conform to the selection, screening, and
        burn-in requirements of this plan shall be subject to approval by the
        customer parts representative.

        It shall be the responsibility of the cognizant engineering authority
        and the PMPCB to determine whether a particular need can be filled by an
        already approved item or whether a new item must be added to the list of
        those authorized for the program. Such decisions shall be made in the
        interest of minimizing the number of parts of different types used,
        ensuring the early determination of a need for parts evaluation and
        additional specifications, and providing the timely information required
        for procurement.

        HSC shall use S-level and other categories of parts, ensuring in all
        cases that end-item reliability and mission life requirements are
        satisfied. HSC shall select military specification parts from QPL/QML
        suppliers. Qualified microcircuits procured to MIL-PRF-38535 Class V or
        MIL-M-38510, Class S requirements and qualified semiconductors procured
        to MIL-PRF-19500 JAN S or MIL-S 19500, JAN S requirements may be used
        without additional screening and burn-in. Hybrids shall be procured to
        MIL-PRF-38534, Class K or equivalent, without additional screening.

        When qualified S-level microcircuits and semiconductors are not
        available, parts shall be procured and up-screened to S-level screening
        and burn-in requirements. Exceptions may be approved by the customer
        parts representative. The Hughes HSP parts specifications, quality level
        "S" or "H," implement appropriate high reliability screening, burn-in
        requirements which are also acceptable and preferred procurement
        standards. ASICs and hybrids shall be treated as non-standard parts and
        multi-chip modules (MCMs) as assemblies. The PMPCB shall review and
        approve the qualification, screening, burn-in, DPA, test, acceptance,
        and process control requirements of these non-standard items which shall
        be added to an appropriate section of the APL when approved.

        Parts shown on the summary parts lists (SPLs) for each assembly
        contained in the PDM system shall be considered the declared parts in
        the design and shall constitute the basic program declared parts list.
        The SPLs shall be used as the basic source for declared parts
        information and provided to the customer for review prior to the design
        reviews.

        Space quality level passive parts (Class S) and established reliability
        (ER) military specification parts (QPL listed) qualified to the lowest
        available failure rate, R or S, are acceptable and preferred.

        QPL listed JANTXV diodes of double slug construction may be used when
        upscreened to a procurement specification that specifies 100% upgrade
        screening tests to Class S requirements. These are considered as
        non-standard parts requiring PMPCB approval and customer concurrence.

        Electronic parts may be procured to the ESA SCC standards: SCCG Class B
        for active devices and SCCG Class C for passive devices as a minimum.
        ESA parts shall have a current qualified status and shall be referenced
        in the latest ESA QPL. Lot qualification testing shall be performed as
        required by the ESA specification system.

                                      5-2
<PAGE>   240

        Materials and processes considered acceptable and preferred for use
        shall be those listed in the program AMPL. Any additional materials and
        processes required shall be selected from the following, in order of
        preference:

                1.      Established government and industry standards.

                2.      Hughes' basic materials and processes selection list.

        The list of materials authorized by the PMPCB shall be issued as the
        program AMPL. Requests for the inclusion of other materials and
        processes shall be submitted to the PMPCB by the responsible engineering
        authorities for review and approval.

        Parts, materials, and processes specified by the detailed engineering
        drawings and support documentation shall be entered on the appropriate
        list prior to their use in flight equipment. The program AMPL shall
        include items approved by Hughes for major subcontractors' use.

5.3.2.1 PROHIBITED MATERIALS

        The following materials shall be generally prohibited from use in
        mechanical or high reliability electronic devices:

                1)      Pure Tin plating used in electronic applications.

                2)      Cadmium and Zinc plating and Silver brazing alloys
                        containing Cadmium and Zinc.

                3)      Brass containing Zinc used in a vacuum environment above
                        121 degrees C, unless plated with an approved material.

        Use on an application-specific, case-by-case basis, shall be allowed
        only with prior approval by the PMPCB.

5.3.3   PARTS AND MATERIALS APPLICATION REVIEW

        Hughes shall conduct a thorough application review to verify proper
        application of parts and materials in the system design. This
        requirement for parts shall be met by performing the part application
        derating analyses prescribed in Section 4 of this plan. Materials and
        processes application shall be in accordance with the best current
        practice in the space industry. Application review shall address
        corrosion prevention, structural adequacy and integrity, and minimum
        susceptibility to environmental factors prior to, during, and after
        launch.

        Materials and processes specialists shall support the design activities
        during design definition. This support shall include consultation in the
        selection and application of materials and processes, specification
        preparation and control, and testing of materials. The materials and
        processes selected shall be identified, and appropriate application
        notes included, on the detailed design drawings. Application review
        shall be accomplished by an audit of the design drawings by materials
        and processes specialists. Drawings shall be audited for designation and
        application of materials and processes and for compliance with the
        program AMPL. Results of the audit shall be documented and shall provide
        for correction of deficiencies or discrepancies noted. The status of all
        audits performed shall be reported to program management as part of the
        regular reporting activity. The PMPCB shall be notified of the results
        of materials and processes application review audits to ensure program
        requirements are met.

5.3.4   MATERIALS AND PROCESSES SPECIFICATIONS

        All materials and processes used shall be defined and controlled by
        engineering drawings, specifications, or standards. Hughes shall use
        government, industry, and internal specification systems, as
        appropriate. Hughes' materials and processes specifications shall
        specify

                                      5-3
<PAGE>   241

        engineering requirements and quality assurance provisions, along with
        appropriate accept/reject criteria.

        All materials shall meet the stress corrosion cracking requirements as
        documented in MSFC-SPEC-522C for stress corrosion. All nonmetallic
        material used in the satellite shall be reviewed by the PMPCB for
        conformance to the outgassing requirements of ANSI/ASTM E595.

5.3.5   PARTS SPECIFICATIONS

        Electronic and electromechanical parts intended for use in flight
        hardware shall be procured to controlled specifications
        (Hughes/government/industry standards) or source control drawings. These
        specifications or drawings shall identify the parts; state the
        applicable physical, electrical, and environmental requirements; and
        note the quality assurance provisions controlling the manufacture and
        acceptance of the parts.

5.3.6   PARTS AND MATERIALS QUALIFICATION

        The PMPCB shall be responsible for ensuring that all parts and materials
        used in flight hardware are qualified. Those parts, materials, and
        processes qualified in the authorized lists for this program shall be
        considered qualified. A new part or material shall be considered
        qualified when sufficient evidence exists to show that it meets the
        requirements of its intended application. For new parts and materials
        for which adequate qualification data are not available, Hughes shall
        design and conduct qualification tests to confirm their ability to meet
        specified requirements. The cognizant engineering activity shall be
        responsible for developing, with the appropriate specialists, the
        qualification plans required. Requalification shall be conducted where
        necessary to ensure control over changes after initial qualification
        approval. One or more of the following methods, in combination, may be
        used to establish qualification:

                1)      Initial selection using applicable federal and military
                        specifications from qualified lists

                2)      Previous spaceflight experience

                3)      Qualification by similarity to a qualified generic part
                        or family

                4)      Test reports provided by the government, Hughes, a
                        subcontractor, or other responsible agency

                5)      Supplier tests or certification

                6)      Qualification testing

        Qualification approval of new parts, materials, and processes shall
        include an evaluation of supporting data and testing of critical
        parameters where it is necessary to confirm the data. Final
        qualification approval of new materials and processes may be based upon
        successful completion of applicable unit and/or system level tests.

        The PMPCB shall review the basis for qualification of new items,
        determine the need for additional tests, and certify approval upon
        satisfactory completion of the qualification process. Plans for specific
        qualification tests shall be submitted to the PMPCB for review.

        A plan for qualification testing of new materials and processes
        determined to require testing to qualify for use on the program shall be
        submitted to the PMPCB.

5.3.7   PARTS AND MATERIALS TRANSFER

        Parts and material inventory transfers shall be reviewed by the PMPCB or
        its designee for compliance with requirements where the potential exists
        for a transfer to the program of parts that may not meet contract
        requirements. Parts and material from specific programs, designated by
        the board, that conform to program requirements may be transferred with
        approval of the

                                      5-4
<PAGE>   242

        responsible engineering authority. Deviations from burn-in requirements
        may be granted on an individual basis when justified by appropriate data
        and approved by the PMPCB.

        The PMPCB shall establish a recertification program commensurate with
        the generic part type. Recertified parts which are found to not be
        within specified tolerances or which show a parameter drift variance
        such that use of such parts will jeopardize mission performance life
        shall not be used.

        Parts exceeding five years from date of manufacture to installation in
        equipment shall be considered for recertification by the PMPCB. The
        parts failure history, DPA history and industry alerts shall be reviewed
        and a recommendation made to the PMPCB. Concurrence with the
        recommendations by the Customer parts representative is required. Lot
        traceability of recertified parts shall be maintained.

5.4     PARTS SCREENING AND ACCEPTANCE

5.4.1   BASIC PROVISIONS

        Electrical and electromechanical parts shall be screened and accepted
        against the criteria contained in Hughes' procurement specifications.
        Parts screening requirements shall be those cited in Table 5-1. The
        tests and inspections specified may vary in accordance with the detailed
        requirements of the individual part type specifications. Parts screening
        and functional testing shall be performed on 100% of the parts as
        specified herein, either by the supplier or by another approved
        facility.

        Microwave assemblies on ceramic substrates which include sealed
        transistors or diodes shall not be considered parts and shall not be
        subjected to the tests of Table 5-1. All parts used in these assemblies
        shall, however, be subject to the screening tests cited for the
        applicable device in the table. Microwave assemblies utilizing chip
        components shall be subjected to appropriate screening tests as deemed
        necessary by the responsible engineer and PMPCB.

5.4.2   INTERNAL VISUAL INSPECTION

        A detailed internal visual inspection (pre-encapsulation) for
        contamination and construction anomalies shall be required for parts
        with hollow cavity type packages. For lidded devices such as
        microcircuits, the pre-encapsulation visual inspection shall be
        performed at a level of magnification that allows detection of such
        defects as inadequate bonds, smeared metallization, and particulate
        contamination. Devices such as glass diodes and sapphire lidded
        transistors shall be inspected following lidding, under the
        magnification needed to disclose internal contamination.

5.4.3   ENVIRONMENTAL SCREENING AND CONDITIONING

        Part screening and conditioning shall include the following tests, as
        applicable, to the specific part types listed in Table 5-1:

                1)      High temperature reverse bias--A high temperature
                        reverse bias test shall be specified on selected
                        transistors susceptible to surface leakage effects.
                        Post-test measurements shall be performed, and parts
                        exceeding the specified limits shall be rejected.
                        Parameters shall be defined in the procurement
                        specification and shall include leakage current.

                2)      High temperature storage--High temperature conditioning
                        at the maximum specified storage temperature of the part
                        shall be required for semiconductors and microcircuit
                        devices. Temperature accelerated high temperature
                        storage in accordance with military standard procedures
                        may be used.

                                      5-5
<PAGE>   243

                3)      Temperature testing--Temperature cycling or thermal
                        shock shall be specified as a prescreening test for
                        detection of mechanical construction defects in parts.
                        The number of cycles and temperature extremes shall be
                        those specified in the applicable specification for each
                        generic part type, as a minimum.

                4)      Acceleration--Acceleration in a direction perpendicular
                        to the bond surface shall be required on semiconductors
                        and microcircuits. The acceleration level selected shall
                        be one ensuring adequate internal bonding.

                5)      Particle impact noise detection test--This test shall be
                        applied as a parts screening test to detect the presence
                        of loose particles in hollow, unpassivated, cavity type
                        packages. It shall be performed either at the vendor's
                        facility or at Hughes' during incoming inspection in
                        accordance with Contractor approved procedures. It shall
                        not be performed on part types that have transparent
                        (sapphire) windows or which are susceptible to internal
                        damage as a result of the test. Parts exhibiting
                        anomalies during this test shall be rejected.

                6)      Seal test--A fine and gross leak test shall be performed
                        on all hermetically sealed components to the applicable
                        military standard.

                7)      X-ray inspection--X-ray inspection for defects shall be
                        required on selected part types. Inspection shall be
                        made with the assistance of image magnification, through
                        photographic enlargement, projection, or examination
                        through a microscope. X-ray testing shall not be
                        performed on part types susceptible to damage (e.g., MOS
                        devices). Visual examination may be substituted for
                        X-ray when conditions allow inspection by this method
                        (e.g., when glass diodes have been examined prior to
                        painting, or when devices have transparent windows).

5.4.4   BURN-IN

        All electronic parts shall be subjected to the burn-in tests of Table
        5-1 after the applicable prescreening tests. The minimum burn-in hours
        and stress conditions for each part type shall be as shown in the table.
        Parts specifications shall specify the lot acceptance criteria
        appropriate to each part type and the percent defectives allowable
        (PDA). Primary parameters (Group A) shall be measured by the supplier.
        Critical parameters shall be measured and recorded before burn-in and at
        completion of burn-in. Parameter readings shall be analyzed for
        conformance to specification limits, and performance stability shall be
        determined where applicable.

        Hughes may elect to extend the burn-in period to enhance the stability
        of parameters and the reliability of lots failing PDA. Deviations from
        these requirements may be granted on an individual basis when justified
        by appropriate data and approved by the PMPCB. Parts inventory transfers
        shall be reviewed by the PMPCB or its designee for compliance with Table
        5-1 requirements; any exceptions shall require the approval of the
        program product assurance manager.

5.4.5   DESTRUCTIVE PHYSICAL ANALYSIS

        Hughes shall perform a lot sample construction analysis for those
        generic part families indicated in Table 5-1. Destructive physical
        analysis procedures shall define the methods of inspecting part design,
        construction, materials, and workmanship, and the accept/reject
        criteria. Samples shall be evaluated by external and internal
        examination to verify lot integrity and conformance to requirements. The
        degree of analysis performed shall be based on experience with the
        supplier and generic part type. Metallization integrity, bond strength,
        and die attach strength shall be confirmed on semiconductors and
        microcircuits. The specific types and sample sizes of parts requiring
        construction analysis shall be as defined in the program APL by the
        PMPCB. Anomalies and discrepancies noted during destructive physical
        analyses shall be reviewed and dispositioned by technical specialists
        designated by the PMPCB. Analyses results shall be made available to the
        customer for review, upon request.

                                      5-6
<PAGE>   244

5.4.6   RADIATION

        Parts shall be selected which can survive the radiation environment for
        the proposed system design and the specified mission time while still
        permitting the units in which they are installed to meet their
        performance specification. Lot acceptance radiation testing shall be
        required for parts which experience has shown to have significant
        lot-to-lot parameter variations due to radiation exposure. These parts
        shall be tested to ensure they meet the design criteria for the expected
        mission radiation level. Requirements to test these and other part types
        shall be identified by the PMPCB and specified in the program APL.
        Verification of the results of supplier conducted testing of radiation
        hardened parts may be substituted for the performance of lot acceptance
        radiation tests.

5.5     PM&P QUALIFICATION STATUS LIST

        The qualification status of electronic parts shall be identified in the
        program APL published by the program product assurance manager. The
        qualification status of new materials and processes shall be reported in
        the PMPCB minutes.

5.6     PARTS AND MATERIALS HANDLING AND STORAGE

        Parts and materials shall be handled and stored in accordance with
        requirements for a high reliability space program. Parts and materials
        for deliverable hardware shall be placed in program designated bonded
        stores or work-in-process stores. Appropriate packaging and
        electrostatic discharge control measures shall be taken to protect
        critical parts and materials during handling. Fabricated parts and
        subassemblies shall be placed in kits, containers, or protective bags.
        Completed units issued to the spacecraft shall remain in their
        protective containers until installation. The adequacy of the packaging,
        handling, and storage procedures and measures taken shall be confirmed
        by quality assurance audits.

5.7     PART QUALITY LEVELS FOR QUALIFICATION HARDWARE

        Qualification hardware shall use the same parts as flight equipment,
        except that the product assurance, part screening, and burn-in
        requirements may be relaxed. The minimum requirements implemented shall
        ensure that neither performance nor test results are compromised. Relief
        from specific requirements may be granted in the interest of
        facilitating the early acquisition of qualification test results.

5.8     SUBCONTRACTOR PMP PROGRAM CONTROL

        The parts, materials, and processes requirements defined herein shall be
        imposed by Hughes on its subcontractors. Off-the-shelf assemblies shall
        be reviewed to ensure acceptable parts and material selection. The
        program product assurance manager shall ensure that these requirements
        are implemented by his subcontractors through review of instructions,
        specifications, and statements of work referenced in procurement
        documents. Subcontractor parts, materials, and processes operations
        shall be reviewed and/or subject to audit to ensure compliance with
        subcontract requirements.

                                      5-7
<PAGE>   245

                        TABLE 5-1. HIGH RELIABILITY PARTS
                       SCREENING MATRIX(1) (PAGE 1 OF 2)

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------
                                                    Thermal                   Particle
                           Internal                  Shock/                    Impact
                            Visual   Temperature  Temperature                  Noise
 Type of Device           Inspection   Storage     Cycling(7)  Acceleration    Test(5)
---------------------------------------------------------------------------------------
<S>                       <C>        <C>          <C>         <C>             <C>
Semiconductors

Diode(14)                     X          X           X             X

Transistors(12)              X(10)       X           X            X(3)            X

Active dies(21)

Microwave + GaAs             X(10)       X           X             X              X
FET

Integrated circuit            X          X           X             X              X
(digital linearizer +
MMIC)

ASIC                          X                      X

Hybrids (standard)            x          X           x            X(4)            x

Capacitors (fixed)

Ceramic                                              x

Glass(15)                                            x

Mica, high voltage

Plastic (film)

Solid tantalum                                       x

Nonsolid tantalum                                    x

Feedthrough                                          x

Chip (ceramic)                                       x

Chip (glass)                                         x

Temperature                                          x
compensating

Filters, EMI                  x                      x

Resistors

Carbon
composition

Film                                                 x

Wirewound, power                                     x

Wirewound, precise                                   x
---------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                                         Destructive            Minimum Burn-In,
                           Seal                            Physical              Typical Test
 Type of Device            Tests        X-ray             Analysis(19)            Conditions
----------------------------------------------------------------------------------------------------------------
<S>                        <C>          <C>              <C>                <C>
Semiconductors

Diode(14)                   X             X(2)                 X            240 hr, 100% rated power

Transistors(12)             X             X(11)                X            240 hr, 100% rated power

Active dies(21)

Microwave + GaAs            X             X(11)                X            240 hr, 100% rated power
FET

Integrated circuit          X              X                   X            240 hr, 100% rated power
(digital linearizer +
MMIC)

ASIC                        X                                 X(20)         240 hr, +125 (degrees) C

Hybrids (standard)          X              x                   X            240 hr, 100% rated power

Capacitors (fixed)

Ceramic                                    x                   X            96 hr, 200% rated voltage,
                                                                            125 (degrees) C

Glass(15)                   X                                               50 hr, 150 Vdc, +85 (degrees) C

Mica, high voltage                        x(6)                              96 hr, 120% rated voltage,
                                                                            +85 (degrees) C

Plastic (film)                             X                                48 hr, 140% rated voltage,
                                                                            +85 (degrees) C

Solid tantalum              X              x                   X            96 hr, 100% rated voltage,
                                                                            +85 (degrees) C

Nonsolid tantalum           X                                  X            96 hr, 100% rated voltage,
                                                                            +85 (degrees) C

Feedthrough                                x                   X            96 hr, 100% rated voltage,
                                                                            +85 (degrees) C

Chip (ceramic)                                                 X            96 hr, 100% rated low voltage,
                                                                            +125 (degrees) C

Chip (glass)                                                                96 hr, 100% rated voltage,
                                                                            +125 (degrees) C

Temperature                                                    X            96 hr, 200% rated voltage,
compensating                                                                +85 (degrees) C

Filters, EMI                X              x                   X            96 hr, rated voltage

Resistors

Carbon                                                                      No testing required
composition

Film                       X(6)                                             96 hr, rated power, +125 (degrees) C

Wirewound, power                           x                                96 hr(8), rated power, +125 (degrees) C

Wirewound, precise                         x                                96 hr, rated power, +125 (degrees) C
-------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      5-8
<PAGE>   246

                   TABLE 5-1. HIGH RELIABILITY PARTS SCREENING
                              MATRIX (PAGE 2 OF 2)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                                 Thermal                                Particle
                              Internal                            Shock/                                 Impact
                               Visual         Temperature       Temperature                              Noise
 Type of Device              Inspection         Storage         Cycling(7)         Acceleration         Test(5)
-----------------------------------------------------------------------------------------------------------------
<S>                          <C>              <C>               <C>                 <C>                 <C>
Networks                                                            x

Chip                                                                x

Magnetics                                                           x

RF coils,                                                           x
unencapsulated(17)
Crystal                           x                                x(13)

SAW filter                        x                                 x                     X

Relays, dc                        x                                 x                                     x(6)

RF switches                       x                                 x

Thermistors                                                         x

Fuses                             x                                 x
---------------------------------------------- --------------------------------------------------- --------------
</TABLE>

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
                                                          Destructive               Minimum Burn-In,
                               Seal                         Physical                  Typical Test
 Type of Device                Tests          X-ray        Analysis(19)                Conditions
-----------------------------------------------------------------------------------------------------------------
<S>                            <C>            <C>         <C>                 <C>
Networks                                        x               X             96 hr, +125 (degrees) C

Chip                                                                          96 hr, temperature soak

Magnetics                                      x(6)                           96 hr(8)

RF coils,                                                                     96 hr, ac pulse at +125 (degrees) C
unencapsulated(17)
Crystal                          X                              X             720 hr +65 degrees C to +85
                                                                              degreesC(18)

SAW filter                                      x               X             240 hr, rated temperature

Relays, dc                       X                              X             5000 operations

RF switches                                                                   Number of operations specified in
                                                                              individual specification

Thermistors                                     x                             168 hr1(16)

Fuses                            X             x(2)             X             168 hr, 50% rated at +85 (degrees) C
----------------------------------------- ---------------------------------- -------------------------------------

</TABLE>

NOTES:

        1)      Detail part specifications will denote explicit requirements.

        2)      Internal visual inspection may be substituted for X-ray for
                glass bodied diodes and fuses.

        3)      TO5 or smaller devices with aluminum bond wires are exempt.

        4)      Mechanical shock may be substituted for acceleration.

        5)      Not required for devices with surface protected elements or for
                non-cavity devices.

        6)      When required in the specification.

        7)      Thermal shock or temperature cycling as required per detail part
                specification.

        8)      Temperature cycling or thermal shock per Hughes specs may be
                substituted for burn-in.

        9)      Temperature cycling and vibration per acceptance test procedure.

        10)     Postcap inspection on devices with sapphire windows.

        11)     X-ray not required on devices with sapphire windows.

        12)     High temperature reverse bias as required by individual
                transistor specifications.

        13)     Crystals used in LO circuit applications shall have 50 thermal
                cycles from at least -55 (degrees) C to +85 (degrees) C; other
                crystals shall have minimum of 25 thermal cycles.

        14)     Does not include beam lead diodes, which are screened at
                assembly level.

        15)     Burn-in shall be at 4 times rated voltage <300 Vdc; and 1500 Vdc
                for >300 Vdc capacitors.

        16)     Negative Tc thermistors stored at rated temperature; positive Tc
                thermistors burn-in 1.5 times rated power at 25 (degrees) C.

        17)     Unencapsulated RF coils do not require burn-in but will have
                unit assembly screening.

        18)     720 hours of high temperature aging for crystals at +65
                (degrees) C or higher; time may be reduced to 360 hours if
                parameters stay within 1/2 tolerances; after aging and thermal
                cycling, crystal frequency shall be monitored over its specified
                operation range to verify its stability.

        19)     Destructive physical analysis sample quantity is 3 pieces,
                unless otherwise specified by prime contractor PMPCB.

        20)     Pre-cap evaluation in lieu of DPA.

        21)     Element evaluation per procurement specification/document.

                                      5-9
<PAGE>   247

6.      CONFIGURATION MANAGEMENT

6.1     BASIC PROVISIONS

        Hughes shall establish and maintain a configuration management system
        that ensures compliance with 1) company configuration management (CM)
        directives and practices and 2) the provisions of this plan. The
        policies defined in Hughes' Space and Communications Company (HSC)
        manuals shall govern the program CM effort. Program unique requirements
        specified by the Customer shall be defined in program instructions
        (PIs). These PIs, when approved by the program manager, shall be binding
        on all organizations supporting the program.

6.2     FUNCTION ADMINISTRATION

6.2.1   RESPONSIBILITIES

        The program manager shall be responsible for ensuring that all
        contractual requirements relating to configuration management are
        adequately defined for and understood by affected program personnel. The
        program manager shall delegate responsibility for administering the
        execution of CM tasks to the leader of the Hughes HSC Configuration and
        Data Management Operations (CDMO), the focal point for the integration,
        implementation, and administration of CM functions on Hughes HSC
        administered programs. CDMO is responsible for configuration
        identification, control, and accounting and functions within the
        framework of the organizational relationships shown in Figure 6-1.

        The leader of CDMO shall delegate responsibility for defining and
        implementing the procedures required to execute program CM tasks to a
        member of the CDMO organization whom he designates program configuration
        management operations (CMO) leader. The PCMO shall report to the CDMO
        leader on the status of the tasks he is charged with executing.

        The Hughes HSC Contracts organization shall relay communications on
        contractual matters between Hughes' program management and the customer.
        Similarly, an assigned subcontracts administrator (SCA) shall relay
        communications on contractual matters between Hughes' program management
        and program subcontractors. The PCMO shall work with an assigned
        contract administrator or subcontracts administrator to ensure the
        receipt and delivery of all communications and monitor the status of
        subcontract configuration requirements, as shown in Figure 6-2.

        The configuration management schedule shall be phased to be compatible
        with the program master schedule. Detailed configuration milestones
        shall be identified and submitted to the Customer after publication of
        the program master phasing schedule. Changes to the master schedule
        shall necessitate corresponding changes in the detailed configuration
        management milestones.

                                      6-1
<PAGE>   248

6.2.2   TASKS

        The planning, development, administration, implementation, and
        monitoring of program configuration management policies shall be
        distributed between the PCMO and performing organizations as follows:

        The PCMO shall:

                1)      Prepare management plans and program instructions
                        associated with configuration management.

                2)      Support design reviews.

                3)      Provide administrative personnel for receiving,
                        recording, analyzing, and processing proposed changes
                        through the appropriate change control activities.

                4)      Establish formats for numbering assignment.

                5)      Monitors release procedures for engineering
                        documentation (drawings, specifications, engineering
                        orders, requests for deviation/waiver, engineering
                        change requests, etc).

                6)      Verify as-designed vs as-built hardware status.

                7)      Acts as change control board secretary.

                8)      Audit the compliance of major subcontractors with CM
                        requirements.

                9)      Receive as-built configuration data from product
                        operations

                10)     Audit compliance of product operations with CM
                        requirements.

        The performing organizations shall:

                1)      Prepare engineering, planning, and as-built
                        configuration data.

                2)      Resolve the difference between the as-designed and
                        as-built configurations.

                3)      Release engineering data and documentation.

                4)      Support the processing of proposed changes.

                5)      Implement program-management-flowed-down requirements.

                6)      Implement approved changes

6.3     ACTIVITIES

        The program configuration management function shall comprise the
        activities described below and shown in Figure 6-3.

6.3.1   CONFIGURATION IDENTIFICATION

        All configuration identification documentation shall be released and
        maintained in the Product Data Management (PDM) system.

6.3.1.1 BASELINE IDENTIFICATION

        Hughes shall establish allocated and product baselines to facilitate
        tracking of changes to configuration items.

6.3.1.2 CONFIGURATION ITEMS DEFINITION

        A configuration item shall be understood to be an item changes to which
        can be and are tracked against an established baseline and to be
        synonymous with "control item."

6.3.1.3 SPECIFICATIONS AND DRAWINGS IDENTIFICATION

                                      6-2
<PAGE>   249

        Configuration identification shall be maintained by the generation and
        issuance of specifications, standards, and drawings that define the
        spacecraft and its equipment. The PCMO shall assign a unique block of
        configuration identification numbers to be issued to program
        specifications, procedures, and drawings. Each control item shall be
        assigned a unique identification number. Previously released drawings of
        proven designs, standard specifications, and common hardware may retain
        previously assigned numbers. New drawings and associated lists shall
        conform to HSC engineering standards and procedures and to HSC Drafting
        Room Standards Manual.

        Subcontractor or vendor items shall be identified by the manufacturer's
        part number or by the assigned contractor part number. The initial
        configuration identification shall be established by specifications that
        define the technical requirements from the system level down to the
        subsystem and control item level.

        Hardware shall be identified in accordance with the applicable drawing.
        Markings shall consist of, minimally, part numbers and serial numbers.
        Serial numbers shall be assigned to all control items, to items
        containing high reliability parts, and to items requiring traceability
        of test data. Hughes' Drafting Standards Manual, which defines types and
        grades of drawings and specifies conventions, shall be the guide for the
        preparation of drawings.

6.3.1.4 SPECIFICATION TREE

        The PCMO shall prepare a specification tree listing the spacecraft
        specification and subordinate specifications. The spacecraft
        specification shall be the basis of agreement between Hughes and the
        customer on the statement of technical requirements. Subtier
        specifications shall be the basis of agreement between the program
        office and the responsible engineering activities (REAs) with respect to
        technical requirements.

        All specifications shall be prepared, approved, and released in
        accordance with command media and the appropriate program instructions.
        Maintenance after release shall be effected by specification change
        notices (SCNs). Both the specifications and SCNs shall be released
        through the Product Data Management System (PDM).

6.3.1.5 MASTER INDEX

        A master index (MI) of contract deliverable control items shall be
        prepared. This MI shall define the control items in terms of drawing
        number, indenture level, and quantity required for next assembly. It
        shall, when approved by the program manager, become an internal baseline
        configuration document. The MI shall be maintained by normal change
        control procedures.

6.3.1.6 COMPUTER SOFTWARE CONFIGURATION IDENTIFICATION

        The development of computer software configuration identification (CSCI)
        software shall be managed by systems engineering. Software configuration
        management shall be under the direction of the program office and meet
        the requirements of applicable Hughes command media. The PCMO shall
        monitor the software configuration process.

6.3.1.7 FIRMWARE CONFIGURATION MANAGEMENT

        Firmware baseline design shall be established and controlled by the
        subsystem engineering activity during the development process. The REA
        shall be responsible for engineering configuration release and control
        and for keeping the status of the hardware. The PCMO shall monitor the
        firmware configuration process.

6.3.2   CONFIGURATION CONTROL

                                      6-3
<PAGE>   250

        Configuration change control shall begin with the establishment of the
        allocated baseline. Changes to the baseline configuration shall be
        processed through the REA or PCMO. This process shall involve the
        uniform and systematic origination, analysis, preparation, review,
        approval, authorization, and release of engineering changes.

        The change control system shall be based on a precisely defined
        classification of changes. Change classification shall be the primary
        means of indicating how a change shall be processed. The process of
        configuration control defined in succeeding paragraphs shall apply
        equally to hardware, software, and firmware.

6.3.2.1 CHANGE CLASSIFICATION

        To ensure that the extent of analysis and approval action required to
        implement a proposed engineering change is consonant with the nature,
        magnitude, and effect of the change, engineering changes shall be
        classified Class I or II as defined in Hughes' command media. Class I
        changes which are major nonconformances affecting contract end item
        requirements shall require customer approval prior to implementation.

6.3.2.2 REQUESTS FOR DEVIATIONS/WAIVERS (RDWS)

        It shall be possible, by means of requests for deviations/waivers
        (RDWs), to depart from the requirements specified in engineering
        documents without altering the documents. Deviations must be authorized
        prior to hardware manufacture. Waivers shall be requested for
        nonconformances found during or after manufacture. Both deviations and
        waivers shall be documented on the RDW form. Minor waivers shall be
        processed by Material Review action. Deviations and/or waivers that
        affect contractual stipulations shall require customer concurrence for
        approval.

        Requests for deviations and waivers shall be classified and approved in
        the same manner as engineering change proposals. RDWs shall not be used
        to circumvent the normal change or material review procedures.

6.3.2.3 ENGINEERING CHANGE PROCESSING

        The PCMO shall be responsible for coordinating proposed changes through
        the change control process. The REA and his control point shall be
        responsible for processing all engineering changes from the point of
        origination through the required approval or rejection.

6.3.2.4 CHANGE CONTROL BOARD

        A program Change Control Board (CCB) shall review and disposition
        (approve or reject) all proposed Class I and Class II changes as well as
        those SCNs for unit level and above specifications routed to it by the
        REA and PCMO. The program manager, or his designee, shall chair the CCB.
        The CCB secretary shall be a member of the PCMO. Board members shall
        include representatives of program management, product assurance,
        customer, systems engineering, component engineering, manufacturing
        engineering, and other activities, as required, to review the proposed
        change. The CCB shall review changes to each item at the conclusion of
        its design phase. The design phase of each unit of prototype flight
        model hardware shall be considered to extend from the time of initiation
        of the contract until one of the following occurs:

                1)      The design is qualified for flight use.

                2)      An acceptance flight unit is delivered to spacecraft
                        integration.

                3)      The program manager signifies completion of the design
                        phase.

6.3.3   CONFIGURATION STATUS ACCOUNTING

        The PCMO shall maintain configuration indices and issue configuration
        reports. Records of the hardware configuration (as-built) shall be
        compared to the released (as-designed) configuration.

                                      6-4
<PAGE>   251

        The as-designed configuration shall be derived from released engineering
        documentation. An as-designed report shall be maintained and updated as
        changes are approved. The PCMO shall act in conjunction with the
        engineering, manufacturing, and other organizations, as required, to
        resolve identified differences between the as-designed and as-built
        configurations.

        An as-built configuration index shall be prepared by the PCMO for each
        deliverable system at the control item level. Each control item shall be
        identified in terms of location, part number, and serial number. The
        index shall be initially prepared at the start of control item
        integration and maintained through completion of integration and test
        activities.

        The PCMO shall be responsible for auditing the software configuration
        process and the firmware configuration process.

6.3.4   SUBCONTRACTOR CONFIGURATION MANAGEMENT

        Subcontractors shall be required to participate in the configuration
        management program by establishing a configuration management system
        that ensures that:

                1)      The as-built configuration reflects the released design
                        data.

                2)      Data are maintained to show the status of hardware at
                        all times.

                3)      Change incorporation is verified.

                4)      Configuration interfaces are in accordance with the
                        design requirements.

                5)      The conformity of the as-built configuration to the
                        as-designed configuration is verified.

        To ensure compliance, Hughes' configuration management requirements
        shall be specifically identified and issued to subcontractors with the
        subcontract statements of work.

        When subcontractors desire to implement a change after the establishment
        of a Hughes approved baseline, they shall be required to submit an
        engineering change proposal (ECP) to Hughes for disposition. They shall
        also be required to submit requests for deviations/waivers wherever they
        desire to make changes without altering documentation. Such requests
        shall be processed by the Contractor's REA/PCMO. Subcontractors shall be
        notified of acceptance or rejection of their requests by the program
        subcontract administrator.

6.3.5   ENGINEERING DOCUMENTATION CONTROL

6.3.5.1 ENGINEERING RELEASES AND RECORDS

        Use of the Product Data Management system shall be mandatory. Initial
        release may be accomplished by the REA in cooperation with Document
        Control Center (DCC) or Engineering Data Control (EDC) personnel.

        Program management may authorize the REA to designate EDC or an
        appropriate DCC as the control point for the recording, maintenance,
        storage, retrieval, microfilming, reproduction, release, and controlled
        distribution of engineering documentation. Release of the drawings and
        specifications shall constitute establishment of the as-designed
        configuration of the hardware/software.

                                      6-5
<PAGE>   252

                                  [FLOW CHART]

        FIGURE 6-1. PROGRAM CONFIGURATION AND DATA MANAGEMENT OPERATIONS

                                  [FLOW CHART]

              FIGURE 6-2. CUSTOMER/HUGHES/SUBCONTRACTOR INTERFACES

                                      6-6
<PAGE>   253

                                  [FLOW CHART]

               FIGURE 6-3. PROGRAM CMO FUNCTIONAL RESPONSIBILITIES

                                      6-7
<PAGE>   254

7.      SYSTEM SAFETY PROGRAM PLAN

7.1     BASIC PROVISIONS

        This plan establishes the System Safety Program Plan (SSPP) describing
        the tasks and activities that will be performed and the documentation
        that will be prepared to effectively satisfy Hughes, customer, launch
        site, launch vehicle and other system safety requirements.

        A system safety task schedule shall be provided to the customer.

7.2     RESPONSIBILITIES

7.2.1   PROGRAM MANAGER

        The ultimate responsibility for system safety resides with the specific
        Program Manager who is responsible for ensuring that the system safety
        program operates in accordance with the SSPP. The Program Manager will
        be given sufficient data to make safety critical decisions affecting
        level of risk, cost, or schedule. Review and approval of the safety
        submissions will ensure program management is cognizant of the final
        resolution of all such issues.

7.2.2   SYSTEM SAFETY ENGINEER

        System Safety is assigned as an integral part of Systems Engineering.
        The manager of Launch Systems Engineering and Operations is responsible
        for assigning a Program Responsible System Safety Engineer to perform
        system safety activities in accordance with the requirements of the
        contract, launch site and Hughes command media. The designated System
        Safety Engineer is responsible for implementation of the system safety
        program including hazard analyses, hazard control implementation, safety
        coordination, documentation and approvals and has access to the Program
        Manager on matters affecting the safety of equipment and personnel. The
        System Safety Engineer also interfaces with the program System
        Engineering Manager and Launch Services/Mission Manager, who in turn
        report to the program office. The System Safety Engineer also interfaces
        with the Product Assurance Manager.

        Within Hughes, System Safety interfaces with all required disciplines to
        coordinate the implementation of applicable system safety requirements.

7.2.3   EXTERNAL SYSTEM SAFETY INTERFACES

        In all cases the System Safety Engineer will work closely with the
        Launch Services Subcontractor, or equivalent, and Launch Site Safety
        Organization. The specific interface is dependent upon the selected
        launch vehicle and the launch vehicle procuring organization. In most
        cases the LVI/Safety engineer will provide this interface role and
        responsibility, especially for recurrent HSC product lines. In some
        cases, where appropriate, a System Safety Core Engineer may be assigned
        to a specific program.

                                      7-1
<PAGE>   255

7.3     SYSTEM SAFETY TASKS

        System Safety performs hazard analyses, ensures implementation of hazard
        controls, interprets safety requirements, provides verification of
        hazard control implementation, supports design and other program
        reviews, produces safety documentation and provides continuing technical
        consultation on safety related issues. Specific tasks of the System
        Safety program include, but are not limited to, the following:

                1)      Provide safety management and conduct a system safety
                        program.

                2)      Hazard analysis and hazard control implementation for
                        the spacecraft, GSE, ground operations and facilities.

                3)      Coordination of safety critical launch vehicle design
                        and operational interfaces with the Launch Services
                        Subcontractor.

                4)      Coordination of system safety issues with the Launch
                        Site Safety Organization.

                5)      Documentation of compliance with Launch Site Safety
                        Organization system safety requirements.

                6)      Review and approval of hazardous procedures and test
                        plans.

                7)      Definition and implementation of required facility and
                        operational safety training. 7.4 ORGANIZATIONAL ROLES

        In addition to System Safety, many organizations are involved in the
        overall safety program. The roles and responsibilities of the
        organizations include, but are not limited to the following:

7.4.1   ENGINEERING

        The Systems Engineering Manager, System Engineers, LVI Engineer, and
        REAs, in cooperation with the System Safety Engineer, are responsible
        for ensuring the following:

                1)      Appropriate system safety requirements and derived
                        requirements are incorporated into the system and
                        subsystem level specifications, control documents and
                        procedures.

                2)      Safety related engineering changes, deviations, waivers
                        and Material Review Board (MRB) actions receive
                        appropriate System Safety review and approval.

                3)      Safety critical procedures receive appropriate System
                        Safety review and approval.

7.4.2   SYSTEM OPERATIONS

        In cooperation with the System Safety Engineer and the Safety, Health
        and Environmental Affairs (SHEA) representative, are responsible for
        ensuring the following:

                1)      Test and ground support equipment receives appropriate
                        system safety assessment review and approval to
                        safeguard personnel and Hughes high value products.

                2)      All hazardous operations are accomplished in accordance
                        with procedures coordinated and approved by system
                        safety. Previous safety assessments result in procedural
                        hazard controls.

                3)      Assisting in the development and implementation of
                        facility and operational safety training for
                        test/operational personnel and supervisors.

                                      7-2
<PAGE>   256

7.4.3   SAFETY, HEALTH AND ENVIRONMENTAL AFFAIRS (SHEA

        SHEA is responsible for ensuring adherence with company and governmental
        occupational health and safety requirements. SHEA and System Safety will
        closely coordinate their efforts to ensure coverage of all program
        safety issues without duplication of effort.

7.4.4   PRODUCT ASSURANCE

        Product Assurance is responsible for assuring product integrity and high
        reliability.

7.4.5   QUALITY ASSURANCE

        Quality Assurance is responsible for verifying that hardware, equipment
        and operations conform with program requirements.

7.5     SCOPE OF SYSTEM SAFETY PROGRAM

        System Safety tasks, activities, and documentation apply to, but are not
        limited to, safety program management, spacecraft design, ground support
        equipment (GSE) design, spacecraft ground processing operations and
        launch activities. The system safety program is structured to achieve,
        as a minimum, the following:

                -       Provide the organization, personnel and resources to
                        effectively satisfy applicable system safety
                        requirements.

                -       Assign specific responsibilities for all program system
                        safety tasks to ensure compliance with applicable system
                        safety requirements.

                -       Define and coordinate spacecraft program system safety
                        requirements, compliance and approvals with the
                        designated Launch Services Subcontractor and appropriate
                        Launch Site Safety Organization(s).

                -       Ensure that safety critical elements of the spacecraft
                        design, GSE design, launch vehicle interfaces, ground
                        processing operations and launch activities are analyzed
                        to identify hazards that could result in personnel
                        injury or system damage.

                -       Verify all identified hazards have been eliminated,
                        controlled or accepted such that program risk to
                        personnel and hardware is minimized.

                -       Document compliance with program system safety
                        requirements as required by program unique contract and
                        launch site requirements.

                -       Provide safety review of procedures and supervision of
                        factory, payload processing facility and launch site
                        hazardous operations.

                -       Ensure adequate safety training is developed and
                        implemented for factory, payload processing facility and
                        launch site hazardous operations.

                -       Adapt the system safety program to a more streamlined
                        but adequate system safety process when recurrent HSC
                        products are used for multiple programs and several
                        customers. This specific safety process is referred to
                        as the generic spacecraft safety process and is already
                        in place with the launch site Range Safety
                        organizations. This process takes advantage of previous
                        system safety assessments and safety
                        certifications/approvals with respect to safety
                        deliverables and data submitted and on file with the
                        appropriate launch site agencies.

7.6     APPLICABLE DOCUMENTS

        The current editions of the following documents are applicable to all
        Hughes spacecraft programs:

        -       Hughes Space and Communications Company Practice 5-0-7, System
                Safety

        The current edition of the applicable launch site documents shall apply.

                                      7-3
<PAGE>   257

7.7     INTEGRATION AND COORDINATION OF DELEGATED ACTIVITIES

        The system safety program will not duplicate other program analyses but
        may utilize data produced by them. Other analyses and reports that may
        be applicable to safety include, but are not limited to, stress
        analysis, thermal analysis, electromagnetic interference (EMI), etc.
        This data will be reviewed and used, as appropriate, by System Safety to
        assist in the identification of all potential hazards and hazard
        controls. Likewise, when appropriate, System Safety personnel will
        provide feedback to ensure that supporting organizations are aware of
        applicable safety issues and requirements.

7.8     HAZARD CONTROL ORDER OF PRECEDENCE

        Hazard controls shall be implemented in the following order of
        precedence:

                1)      Design to minimize hazards (design for minimum risk).

                2)      Incorporate safety devices, such as barriers or
                        inhibiting mechanisms to reduce risk (failure
                        tolerance).

                3)      Provide warning devices when the existence or occurrence
                        of a hazard cannot be eliminated.

                4)      Develop procedures and training to reduce risk where it
                        is impractical to eliminate the hazard through design,
                        reduce risk using safety devices, or reduce risk by
                        providing warning devices.

7.9     HAZARD ANALYSIS

        System Safety analyses identify hazards associated with the spacecraft
        design, ground support equipment (GSE) design, spacecraft ground
        processing operations and launch activities. The results of these hazard
        analyses are documented in the appropriate launch site safety
        documentation as determined by the selected launch vehicle. To the
        greatest extent possible, existing hazard analyses will be utilized for
        previously proven flight hardware, GSE and operations. For proven
        spacecraft buses, existing hazard analyses will be supplemented, as
        required, with hazard analyses of new and modified subsystems and
        incorporated in the applicable safety documentation. Maximum usage of
        the generic safety data process will be made as already permitted by and
        accepted by the particular launch site Range Safety organizations.

        Hazard analysis involves the performance of a Preliminary Hazard
        Analysis (PHA) and a System & Subsystem Hazard Analysis (S&SHA) covering
        the following:

                1)      Spacecraft and GSE design

                2)      Design of interfaces with the launch vehicle

                3)      Handling and transportation of the spacecraft

                4)      Ground operations

                5)      Pre-launch testing and interface with the launch vehicle

        The PHA and S&SHA are not deliverable documents; however, the results of
        the PHA and S&SHA will form the basis of the appropriate deliverable
        safety documentation as determined by launch vehicle/launch site
        requirements.

7.9.1   PRELIMINARY HAZARD ANALYSIS (PHA)

        The PHA is the initial effort in the iterative system safety analysis
        program. The objective of the PHA is to identify hazards to provide a
        basis for system safety program efforts. The primary objectives of the
        PHA are as follows:

                1)      Identify all significant hazards in preliminary terms
                        including hazard causes

                2)      Identify, in preliminary terms, the requirements for
                        hazard controls

                                      7-4
<PAGE>   258

                3)      Initial identification of any operational constraints

7.9.2   SUBSYSTEM AND SYSTEM HAZARD ANALYSIS (S&SHA)

        To provide a comprehensive evaluation of the risk being assumed, a
        subsystem and system level hazard analysis will be performed. The S&SHA
        will identify accident risk and establish design criteria and
        operational constraints to eliminate or control hazards to an acceptable
        level. The analysis will consider spacecraft design, interface design,
        and operations including handling, transportation, testing, assembly,
        check-out and launch site processing operations. Also software safety
        issues or questions may be addressed.

7.10    VERIFICATION AND DOCUMENTATION OF REQUIREMENTS COMPLIANCE

        The data collected from the hazard analysis will be documented in the
        appropriate safety documentation submissions as determined by the launch
        vehicle selection coupled with the specific launch site requirements.
        The closure/approval of the final submission will provide verification
        that all safety critical issues are positively closed. Where
        appropriate, closure/approval will be referenced to design analysis,
        qualification/acceptance test reports, approved procedures, etc., which
        demonstrate proper application of system safety requirements. The safety
        documentation submission, in its final form, is the certification of
        compliance with all program system safety requirements. The final
        approved safety documentation submission will provide traceability that
        all required hazard control actions have been taken and approved by the
        System Safety Engineer, Program Manager and Launch Site Safety
        Organization. Data submissions, where authorized, will maximize the
        generic spacecraft approval process that is already in-place, i.e.,
        changes only in the form of supplements.

7.11    DELIVERABLE DOCUMENTATION

        Deliverable safety documentation is determined by the selected launch
        vehicle and the associated Launch Site Safety Organization requirements.
        Additional deliverable documentation requirements are determined by the
        specific program unique contract requirements.

7.12    NON-DELIVERABLE DATA

        Any non-deliverable system safety data including the SSPP, additional
        hazard analyses, correspondence, notes, etc., may be requested through
        the specific program office or as part of a specific program contract
        requirement, when specified. This would also apply to a customer request
        for a specific program-unique SSPP to be prepared.

7.13    PROCEDURE REVIEW AND APPROVAL

        All factory, payload processing facility and launch site procedures
        shall be reviewed by the system safety engineer and labeled as either
        hazardous or non-hazardous. Hazardous procedures require System Safety
        approval prior to their release and implementation.

7.14    TEST AND OPERATIONAL SAFETY

        System Safety is responsible for defining the test and operational
        safety program. Implementation of the test and operational safety
        program is shared among several organizations.

        System Safety will participate in factory and launch site hazardous test
        and operational planning in conjunction with SHEA. Hazardous test and
        operational procedures will be reviewed and hazardous tests/operations
        will be monitored to ensure incorporation of appropriate hazard
        controls. Pre-test/operation functions will include the following:

                1)      Establishment of training and operational requirements
                        for personnel and equipment safety.

                2)      Analysis, review and approval of hazardous
                        test/operation objectives and procedures for compliance
                        with safety requirements and incorporation of
                        appropriate hazard

                                      7-5
<PAGE>   259
                        controls. Specific programs may attach to this generic
                        SSPP a specific launch site schedule and a specific
                        spacecraft launch site processing flow.

                3)      Monitoring of selected hazardous tests/operations using
                        the safety provisions of approved procedures and Hughes
                        standard practices as checklists to ensure compliance
                        with established safety criteria.

                4)      Assistance in the development of a safety briefing that
                        will be presented by the test conductor prior to the
                        start of each hazardous test/operation. The briefing
                        will consist of the hazards associated with the
                        operation, required hazard controls and emergency
                        back-out procedures to follow in the case of an
                        accident.

        Hazardous procedures that will be used at the launch site require the
        approval of the System Safety Engineer and Launch Site Safety
        Organization (depending on launch vehicle) prior to implementation.
        Deviations from approved safety controls during procedures will require
        reassessment of the test/operation procedure and signature approval by
        the System Safety Engineer or his designee prior to implementation.

7.15    TRAINING

        System Safety will interface with SHEA , HSC technical organizations,
        and Systems Operations to ensure that adequate safety training is
        developed and implemented for factory, payload processing facility and
        launch site hazardous operations. Systems Operations maintains employee
        training records and certifications for all required training.

        Safety training for factory operations is the responsibility of Hughes
        Systems Operations and Safety Health and Environmental Affairs (SHEA).

        Safety training required by the Launch Site Safety Organization will be
        coordinated through the Launch Services Subcontractor. For launch sites
        where safety administration is insufficient or nonexistent, the Hughes
        prepared Facility and Operational Safety Program (FOSP) has been
        developed to provide safety training and awareness for operational
        personnel and supervisors. FOSP training encompasses the following:

                1)      Hazards related to spacecraft launch site processing
                        facilities and operations.

                2)      Hazard controls, operational constraints and protective
                        equipment necessary to mitigate spacecraft facility and
                        operational hazards.

                3)      Emergency and contingency procedures that may be
                        required during spacecraft processing operations.

7.16    AUDIT PROGRAM

        System safety audits will be accomplished consistent with Hughes command
        media and any program unique requirements.

        System safety engineering and management have the responsibility for
        performing periodic system safety functional audits on programs and
        subcontractor program areas to measure the thoroughness and
        effectiveness of system safety program implementation. Specific program
        reviews along with safety technical interchange meetings, also
        contribute to this process.

        System Safety will assess the progress and accomplishment of planned
        system safety tasks against the SSPP by means of informal audits. These
        informal audits will include subcontractor safety efforts in addition to
        the internal safety tasks. The results of these audits will be reported
        to program and line management to alert them of safety program
        developments that may require decisions with respect to changes in plans
        or schedules. These informal audits can occur through the implementation
        of the concurrent engineering process including the integrated product
        development (IPD) activities.

                                      7-6

<PAGE>   260

Exhibit D Acceptance Test Plan                      25 August 2000 - Amendment 7
Satellite Contract                              Contract Number: ICOO/95-1002/NR

                        CONTRACT NUMBER ICOO/95-1002/NR

                                    EXHIBIT D
                              ACCEPTANCE TEST PLAN

                                 24 AUGUST 2000

<PAGE>   261

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                        PAGE
                                                                                                        ----
<S>    <C>                                                                                              <C>
1.     INTRODUCTION.................................................................................... 1-2

       1.1     PLAN SCOPE.............................................................................. 1-2

       1.2     INTEGRATED TEST PLAN FLOW............................................................... 1-2

2.     DEVELOPMENT TEST PROGRAM........................................................................ 2-2

       2.1     PAYLOAD DEVELOPMENT TEST PROGRAM........................................................ 2-2

       2.2     BUS DEVELOPMENT TEST PROGRAM............................................................ 2-3

               2.2.1   ACS Development Hardware Interface Test......................................... 2-3

               2.2.2   Software Test................................................................... 2-4

               2.2.3   Methodology and Approach........................................................ 2-4

               2.2.4   Software Requirements Definition and Analysis................................... 2-5

               2.2.5   Software Preliminary Design..................................................... 2-5

               2.2.6   Software Detailed Design........................................................ 2-6

               2.2.7   Coding and Unit Testing......................................................... 2-6

               2.2.8   CSU Integration and Test........................................................ 2-6

               2.2.9   Design Verification Test........................................................ 2-6

               2.2.10  Formal Qualification Test....................................................... 2-6

3.     UNIT LEVEL PROTOFLIGHT AND ACCEPTANCE TESTING................................................... 3-2

       3.1     UNIT PROTOFLIGHT TESTING REQUIREMENTS................................................... 3-2

       3.2     UNIT ACCEPTANCE TESTING REQUIREMENTS.................................................... 3-3

       3.3     TEST PHASES............................................................................. 3-3

               3.3.1   Initial (Reference) Unit Performance Test (UPT 1)............................... 3-3

               3.3.2   Vibrational Stress Test......................................................... 3-3

               3.3.3   Second (Post vibration) Unit Performance Test (UPT 2)........................... 3-4

               3.3.4   Rapid Depressurization Tests.................................................... 3-4

               3.3.5   Thermal-vacuum/Thermal Cycling Tests............................................ 3-4

               3.3.6   Final Unit Performance Test (UPT 3)............................................. 3-4

       3.4     TESTS................................................................................... 3-5

               3.4.1   Mechanisms...................................................................... 3-5

               3.4.2   Electrical Power Subsystem Units................................................ 3-6

               3.4.3   Attitude Control Subsystem Units................................................ 3-13

               3.4.4   Propulsion Subsystem Units...................................................... 3-19

               3.4.5   Digital T&C Units............................................................... 3-24

               3.4.6   Telemetry and Command Subsystem RF Units........................................ 3-27

               3.4.7   Communications Subsystem Units.................................................. 3-29

               3.4.8   Digital Processor............................................................... 3-44

</TABLE>

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<PAGE>   262

<TABLE>
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4.     SUBSYSTEM AND SYSTEM LEVEL PROTOFLIGHT AND ACCEPTANCE TESTING................................... 4-2

       4.1     SUBSYSTEM AND SYSTEM PROTOFLIGHT TESTING REQUIREMENTS................................... 4-2

       4.2     SUBSYSTEM AND SYSTEM CLASSICAL AND FUNCTIONAL ACCEPTANCE TESTING REQUIREMENTS........... 4-3

       4.3     TEST PHASES............................................................................. 4-4

               4.3.1   Subsystem Testing............................................................... 4-4

               4.3.2   System Testing.................................................................. 4-5

       4.4     TESTS................................................................................... 4-8

               4.4.1   Mechanisms...................................................................... 4-8

               4.4.2   Electrical Power Subsystem...................................................... 4-11

               4.4.3   Attitude Control Subsystem...................................................... 4-14

               4.4.4   Propulsion Subsystem............................................................ 4-17

               4.4.5   T&C Subsystem Digital Equipment................................................. 4-19

               4.4.6   T&C Subsystem RF Equipment...................................................... 4-21

               4.4.7   Forward Payload Panel........................................................... 4-23

               4.4.8   Transmit Antenna/SSPA Panel..................................................... 4-24

               4.4.9   Return Payload Panel............................................................ 4-25

               4.4.10  Transmit Passive Antenna........................................................ 4-26

               4.4.11  Receive Passive Antenna......................................................... 4-27

               4.4.12  Receive Antenna/LNA Panel....................................................... 4-28

               4.4.13  Intermediate Panel.............................................................. 4-29

               4.4.14  Communications Subsystem........................................................ 4-30

5.     IN-ORBIT TESTING................................................................................ 5-2

       5.1     OVERVIEW................................................................................ 5-2

       5.2     TESTS................................................................................... 5-3

               5.2.1   Electrical Power Subsystem...................................................... 5-3

               5.2.2   Attitude Control Subsystem...................................................... 5-3

               5.2.3   Communications Subsystem........................................................ 5-4

               5.2.4   Telemetry and Command Subsystem................................................. 5-6

               5.2.5   RF Telemetry and Command Subsystem.............................................. 5-6

6.   TROPO TEST PROGRAM................................................................................ 6-1

       6.1     Plan Scope and Test Program Philosophy.................................................. 6-1

       6.2     Payload Development Test Program........................................................ 6-1

       6.3     Tropo Unit Protoflight Testing Requirements............................................. 6-5

       6.4     Tropo Unit Acceptance Testing Requirements.............................................. 6-5

       6.5     Tropo Modification Return and Receive Panel Test Plan................................... 6-5

       6.6     Tropo Modification System Level Test Plan............................................... 6-5

</TABLE>

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<PAGE>   263

                                 LIST OF FIGURES

<TABLE>
<CAPTION>
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                                                                                                        ----
       <S>     <C>                                                                                      <C>
       2-1     EM Payload Integration and Verification Plan............................................ 2-8

       2-3     Transmit EM Antenna Integration and Test................................................ 2-10

       2-4     Receive EM Antenna Integration and Test................................................. 2-11

       2-5     Digital Processor EM Unit Test Flow..................................................... 2-12

       2-6     Hughes Software Development Process Overview............................................ 2-13

       4-1     Bus Module Protoflight and Acceptance Integration and Test Flow......................... 2-31

       4-2     Forward Transponder Panel Protoflight and Acceptance Flow............................... 4-32

       4-3     Return Transponder Panel Protoflight and Acceptance Integration and Test Flow........... 4-33

       4-4     SSPA Panel Protoflight and Acceptance Integration and Test Flow......................... 4-34

       4-5     Transmit Antenna Module Protoflight and Acceptance Assembly and Test Flow............... 4-35

       4-6     Receive Antenna Module Protoflight and Acceptance Assembly and Test Flow................ 4-37

       4-7     System Test Flow (F1, F2)............................................................... 4-39

       4-8     Functional Acceptance Test Flow (F3 - F12).............................................. 4-38

       6-1     Return and Receive Panel test Flows Prior To Tropo To Tropo Mod Retrofit................ 6-6

       6-2     Tropo System Level Test Flow............................................................ 6-7

</TABLE>

                                 LIST OF TABLES

<TABLE>
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       <S>     <C>                                                                                      <C>
       1-1     Test Phase Description and Test Objectives for ICO Integrated Test Plan................. 1-4

       2-1     Engineering Model Hardware Complement................................................... 2-14

       2-2     EM Baseline Test Program*............................................................... 2-15

       3-1     Cumulative Number of Unit Thermal Cycles at Ambient Pressure............................ 3-47

       3-2     Cumulative Number of Unit Thermal Cycles at Vacuum Pressure............................. 3-48

       3-3     Total Number of Unit Thermal Cycles for Ambient and Vacuum Pressure..................... 3-50

       6-1     Tropo Engineering Model Hardware Complement............................................. 6-3

       6-2     Tropo Engineering Model Payload Tests................................................... 6-4
</TABLE>

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<PAGE>   264
                        CONTRACT NUMBER ICOO/95-1002/NR

                                   EXHIBIT E

                               GCE IMPLEMENTATION

                                 AND TEST PLAN

                                 3 OCTOBER 1995

     I-CO GLOBAL                                 HUGHES SPACE AND
     COMMUNICATIONS                              COMMUNICATIONS
     (OPERATIONS) LIMITED                        INTERNATIONAL, INC.

     -----------------------------               -------------------------------
     Olof Lundberg                               Donald L. Cromer
     Chief Executive Officer                     Chief Executive Officer
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                                                    Contract No. ICOO/95-1002/NR
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                               TABLE OF Contents

1. OVERVIEW                                                                    1

     1.1 Scope                                                                 1

     1.2 Purpose                                                               1

     1.3 Testing Philosophy                                                    1
          1.3.1 Test Director                                                  1

2. APPLICABLE DOCUMENTS                                                        3

3. TEST PROCESS                                                                4

     3.1 Test Readiness Reviews                                                4

     3.2 Test Procedures                                                       4

     3.3 Post Test Data Review                                                 5

     3.4 Test Reports                                                          5

     3.5 Test Anomalies                                                        5

     3.6 Quality Assurance                                                     5

4. REQUIREMENTS FLOWDOWN                                                       7

     4.1 Verification Methods                                                  7

     4.2 Integration & Test Flow                                               7
          4.2.1 Burn-in Tests                                                  7
          4.2.2 Subsystem                                                      8
          4.2.3 Subsystem Sell-Off                                             9
          4.2.4 System Integration and Checkout                                9
          4.2.5 Fat Test Readiness Review                                      9
          4.2.6 FAT                                                            9
          4.2.7 Preshipment Review (PSR)                                      10
          4.2.8 Pack and Ship                                                 10
          4.2.9 Site Installation                                             10
          4.2.10 SAT Readiness Review                                         10

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

                                       i
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GCE Implementation and Test Plan                                       Exhibit E
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                               TABLE OF CONTENTS

          4.2.11 SAT                                                          11

          4.2.12 Final Review                                                 11

          4.2.13 Subsystem Test Notebooks/Informal Test Procedures            11

          4.2.14 System Test Notebook                                         11

5. TEST IDENTIFICATION                                                        13

     5.1 UNIT TESTS                                                           13

     5.2 SUBSYSTEM TESTS                                                      14

          5.2.1 AC Power Test                                                 14

          5.2.2 Baseband and Subsystem Test                                   14

     5.2.2.1 Telemetry Test                                                   14

     5.2.2.2 Command Test                                                     14

     5.2.2.3 T&C IF Ranging Calibration Test                                  14

     5.2.2.4 Patch Panels Test                                                15

     5.2.2.5 IF Matrix Switching Test                                         15

     5.2.2.6 Baseband to satellite T&C Subsystem Compatibility test           15

          5.2.3 RF Subsystem                                                  15

          5.2.4 Antenna Subsystem                                             15

          5.2.5 Computer Subsystem Tests                                      15

     5.2.5.1 On-line Software Tests                                           16

     5.2.5.2 Status and Control Software                                      16

     5.2.5.3 Off-line Software Tests                                          16

      5.2.5.3.1 Orbital Analysis Software Test                                16

     5.2.5.4 Spacecraft Health & Performance Analysis Software Test           17

          5.2.6 Inter-site Data Communications Interface (DCI)                17

          5.2.7 Dynamic Satellite Simulator (DSS) Test                        17

          5.2.8 IOT Subsystem Test                                            17

     5.3 FACTORY ACCEPTANCE TEST (FAT)                                        18

          5.3.1 FAT System Configuration                                      18

          5.3.2 Computer Checkout                                             18

          5.3.3 Telemetry Processing                                          18

     5.3.3.1 PCM Data Test.                                                   19

     5.3.3.2 Data Archiving                                                   19

          5.3.4 Transmission of Satellite Commands.                           19

     5.3.4.1 Hazardous Satellite Commanding                                   19

                                       ii
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________________________________________________________________________________
<TABLE>
<CAPTION>
                               TABLE OF Contents
<S>                                                                 <C>
          5.3.5 Ranging                                                     20
     5.3.5.1 T&C IF Range Calibration Test                                  20
          5.3.6 Computer Subsystem and Software                             20
     5.3.6.1 Computer to Timing Interface Test                              20
     5.3.6.2 On-line software Tests                                         20
     5.3.6.3 Off-line software Tests                                        20
     5.3.6.4 Status and Control Software Tests                              20
          5.3.7 Inter-Site Data Communications Interface (DCI)              19
     5.3.7.1 SCC & BCC Communications to SAN TT&C sites                     19
          5.3.8 IOT subsystem test                                          19
          5.3.9 Ground TT&C Equipment system loading and stress test.       19

     5.4 SITE ACCEPTANCE TEST                                               20
          5.4.1 Site Integration and Checkout                               20
     5.4.1.1 SAT System Configuration                                       20
     5.4.1.2 Computer Checkout                                              20
     5.4.1.3 Telemetry Processing                                           20
          5.4.1.3.1 PCM Data Test.                                          20
          5.4.1.3.2 Data Archiving                                          21
     5.4.1.4 Transmission of Satellite Commands.                            21
          5.4.1.4.1 Hazardous Satellite Commanding                          21
     5.4.1.5 Ranging                                                        21
          5.4.1.5.1 T&C IF Range Calibration Test                           21
     5.4.1.6 Antenna Monitoring                                             22
     5.4.1.7 Computer Subsystem and Software                                22
          5.4.1.7.1 Computer to Timing Interface Test                       22
          5.4.1.7.2 On-line software Tests                                  22
          5.4.1.7.3 Off-line software Tests                                 22
          5.4.1.7.4 Status and Control Software Tests                       22
     5.4.1.8 Inter-Site Data Communications Interface (DCI)                 23
          5.4.1.8.1 SCC & BCC Communications to SAN TT&C sites              23
     5.4.1.9 Dynamic Satellite Simulator (DSS)                              23
     5.4.1.10 IOT Subsystem Test                                            23
          5.4.2 Overall System Performance Demonstration                    23
     5.5 FINAL ACCEPTANCE REVIEW                                            23
     5.6 SATELLITE TO SCC COMPATIBILITY TEST                                23

ACRONYMS                                                            APPENDIX A
</TABLE>
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GCE Implementation and Test Plan                                       Exhibit E
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

1.   OVERVIEW

1.1  SCOPE

     This document defines the implementation and test (I&T) plan that will be
     utilized to verify the INMARSAT-P ground system equipment compliance with
     the specifications of the contract. It identifies the verification methods
     that shall be conducted in each phase of testing: unit testing, subsystem
     testing, factory acceptance test (FAT), and site acceptance test (SAT).

1.2  PURPOSE

     The purpose of this I&T plan is to provide a process for the coordinated
     and systematic verification of the requirements as recorded in the
     INMARSAT-P GROUND CONTROL EQUIPMENT SPECIFICATION. This plan documents the
     steps required to develop, integrate, install and test the INMARSAT-P
     Ground equipment and software from the design baselines through final
     installation and acceptance testing.

1.3  TESTING PHILOSOPHY

     A progressive test philosophy shall be implemented to verify performance
     specifications early in the integration process, without repeated testing.
     For example, unit testing of the telemetry and command units will validate
     the majority of baseband performance specifications, which will not be
     retested as the system is integrated. Rather, at each subsequent level of
     integration, new interfaces will be tested as will end-to-end
     functionality. This test plan approach is intended to provide confidence in
     system operability without unnecessary repeat testing.

     The test program shall be directed by the program manager, and tests shall
     be conducted, to the extent appropriate, by subsystem vendors or Hughes
     responsible engineering activities (REAs). Formal tests may be witnessed by
     I-CO representatives.

--------------------------------------------------------------------------------
                                       1
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GCE Implementation and Test Plan                                       Exhibit E
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1.3.1     TEST DIRECTOR

          A designated Test Director (TD) is responsible for coordinating all
          integration activities. The TD's specific responsibilities include:

          - Tracking each integration checkout activity
          - Ensuring successful completion of each activity
          - Tracking Problem Report Forms (PRFs)
          - Maintaining a system notebook
          - Prioritizing activities
          - Reporting daily (or as required) status
          - Chairing the Test Readiness Review (TRR)

2.        APPLICABLE DOCUMENTS

          TITLE

          1.  INMARSAT-P Ground Control Equipment Specification

          2.  On-line Software Test Procedures

          3.  Off-line Software Test Procedures

          4.  Status & Control Software Test Procedure

          5.  Factory Acceptance Test Procedure

          6.  Site Acceptance Test Procedure

          7.  DSS Test Plan

          8.  DSS Test Procedures

          9.  DSS System Requirements Document

          10. T&C Simulator Users Guide

          11. INMARSAT-P GCE Product Assurance Plan

          12. INMARSAT-P Ground to Satellite ICD.

          13. Verification Cross Reference Index (VCRI)

                                       2
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                                                                       Exhibit E
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3.        TEST PROCESS

          The formal test program is conducted in the two phases: factory
          acceptance test (FAT), and site acceptance test (SAT). Additionally,
          unit, vendor, and subsystem tests are conducted on an informal basis
          to standard test procedures.

          The following steps illustrate the test process whether formal (SAT,
          FAT) or informal subsystem level.

          1. Test Readiness Review (TRR) - Verify that all necessary
          preparation has been accomplished.

          2. Test Execution - Test procedures are executed - problem report
          forms (PRFs) and software discrepancy reports (SDRs) are generated.

          3. Post Test Review - Results are reviewed, problem report forms
          (PRFs) and software discrepancy reports (SDRs) are reviewed.

          4. Action Item Closure - Any open PRFs and SDRs are worked off.

3.1       Test Readiness Reviews

          Internal informal I&T reviews shall be conducted by REAs prior to
          starting subsystem tests. The program manager or his designee, shall
          conduct a formal review to verify that all the testing requirements
          (for FAT and SAT) are addressed prior to the test start. I-CO shall be
          notified at least 5 business days in advance of formal review. Test
          approval will be granted only after review of the following items:

          1. Compliance with the test program requirements

          2. Configuration status of test and handling procedures

          3. Calibration validity of test equipment

          4. Configuration of test software

          5. Configuration of hardware

          6. Availability of test facilities

                                       3
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--------------------------------------------------------------------------------

          7. Closure of action items that impact on the test

3.2       TEST PROCEDURES

          FAT and SAT test procedures shall be prepared in accordance with the
          verification cross reference index (VCRI) and submitted to I-CO 30
          days prior to a test. These procedures will allow the authorized
          personnel to perform the test in a organized, controlled manner. Test
          procedures shall identify:

          1. The scope of the test

          2. The test sequence (step-by-step)

          3. The test equipment configuration

          4. Pass/fail criteria and associated measured parameter ranges

3.3       POST TEST DATA REVIEW

          The project manager or Hughes subsystem REA shall conduct a post test
          data review. Post test data reviews shall be scheduled at a time
          mutually agreed upon between I-CO and Hughes as soon as possible after
          test completion. Test results data for subsystem testing, FAT, and SAT
          shall be submitted to I-CO within 30 days after test completion.
          During the review, the program manager or his designee, shall assign
          action items to resolve any discrepancies found in test data. Post
          test data review meeting minutes and action items shall be submitted
          to I-CO within five business days after the review meeting.

3.4       TEST REPORTS

          Test reports shall be submitted to I-CO within 1 month of completion
          of the FAT and SAT. Each test report shall comprise the applicable
          test procedure, with completed test data forms, a test discrepancy
          list (PRFs and SDRs), and notice of actions taken to clear test
          discrepancies. Test reports shall be delivered per the statement of
          work.

--------------------------------------------------------------------------------
                                       4

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GCE Implementation and Test Plan                                Exhibit E
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--------------------------------------------------------------------------

3.5       TEST ANOMALIES

          Informal PRFs and SDRs or other approved means such as log sheets or
          action item lists will be used internally by the REA to track
          anomalies at the subsystem level. Any anomaly resolutions involving
          changes to the hardware configuration must be documented in the work
          orders. Upon subsystem sell-off to the system level, any open
          subsystem problem reports will be transferred to formal system PRFs.

          Formal PRFs will be tracked as single, consecutive numbered list by
          project system engineering and quality assurance personnel and will be
          visible to both project management and the customer. Any issues of
          concern to the customer will be recorded on a lien list. All PRFs
          resulting from this list will be generated by Hughes personnel to
          ensure adequate information for problem resolution and closure. Any
          customer issues occurring after the final review will fall under
          warranty support provisions.

3.6       QUALITY ASSURANCE

          The HISD Product Assurance Plan listed in section 2, Applicable
          Documents, shall be followed. Standard engineering processes,
          practices, and procedures shall be used from design and development
          through integration and test. Configuration management practices
          shall be employed for control of hardware/software deliverables as
          well as test equipment. All formal PRFs will be tracked on one
          consecutively numbered list. Waivers and deviations are required for
          all non-conformance. Minor non-conformance after final site sell-off
          shall be tracked by an action item list with follow-up responsibility
          to project management.

          Software configuration management refers to the process of capturing
          a software baseline, performing software builds (i.e. compiling
          baseline versions of code, capturing databases, system logicals,
          etc.), and placing the software baseline into a controlled operations
          directory.

          Configuration management will be performed by software quality
          assurance personnel or their designee. Code changes in response to
          informal problem reports would require no justification or approval
          for

----------------------------------------------------------------------------
                                       5

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

     implementation into the official build. Code changes in response to formal
     PRFs would require the concurrence of the software system engineer and/or
     test director prior to implementation into the official build.
     Configuration changes will be documented in the test procedure. Changes
     requiring retests will be coordinated with the software system engineer
     and/or test director.

     Starting with FAT, software backups will occur at least once a week (if not
     daily). At a minimum, CM builds will be performed before software subsystem
     tests in L.A. and/or Denver, before the FAT dry run in Denver, before FAT
     in Denver, before SAT dry run and SAT at the customer's sites. Disk image
     backups will be performed after the software tests in LA and/or Denver,
     after FAT in Denver, and after SAT at the customer's sites. The baseline
     plan includes no quality assurance personnel support on site.

4.   REQUIREMENTS FLOWDOWN

     The requirements of the INMARSAT-P TT&C INFRASTRUCTURE SPECIFICATION will
     be translated into the Specification Flowdown and Verification Cross
     Reference Index (VCRI) matrix. This matrix maps the translation of the
     contract requirements to the system specification, flows down the
     requirements to the subsystem level, and provides a first cut of the test
     methods and phases under which each requirement shall be validated. The
     VCRI will be in a constantly changing state throughout the duration of the
     program. Prior to any acceptance testing the VCRI shall be updated and sent
     to the customer for review. A final version of the VCRI shall be
     incorporated in the Test Results package at the end of the program.

4.1  VERIFICATION METHODS

     Requirements are verified by one or more of the following methods:

     1. By Design: A statement of intent to comply by fulfillment of the
     detailed requirements provided elsewhere.

     2. Inspection: Visual checks of the completed item.

--------------------------------------------------------------------------------
                                       6
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-------------------------------------------------------------------------------

               3. Analysis: A paper proof that the requirement has been
               satisfied, either by mathematical analysis or similarity to
               other qualification testing.

               4. Demonstration: A controlled experiment in which the function
               is exercised and the qualitative characteristics are observed and
               recorded.

               5. Test: A controlled experiment in which the parametric
               characteristics of a function are measured or otherwise
               quantified.

4.2            INTEGRATION & TEST FLOW

               Figure 1 indicates the flow of the I&T program, showing the
               buildup from detailed unit and vendor tests through the
               individual subsystem tests and on to the factory and site
               acceptance tests. The locations where the various tests are
               performed are also indicated. All reviews will be attended by the
               appropriate responsible engineering activities (REA's), system
               engineering and quality assurance.

4.2.1          BURN-IN TESTS

               Hughes will not perform a formal burn-in of all delivered items.
               Hughes will, in general, leave the units powered on during the
               integration and testing phases at the factory to identify any
               infant mortality failures. In addition, some vendors do perform a
               formal burn-in test of their commercial units prior to delivery
               to Hughes.

4.2.2          SUBSYSTEM

               Hardware development will be controlled by work orders.

               Software development will be controlled by configuration
               management and process control procedures. Individual software
               REAs are responsible for implementing these procedures.

               Informal I&T reviews will be held prior to the beginning of
               subsystem test. REAs are responsible for coordinating all
               required test equipment/resources required for test.

                                       7

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

                             [SUBSYSTEM FLOW CHART]

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

                  FIGURE 1: INTEGRATION AND TEST FLOW DIAGRAM

--------------------------------------------------------------------------------
                                       8

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                                                                       Exhibit E
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

          Informal PRFs and software SDRs or other approved means such as log
          sheets or action items lists will be used internally by the REA to
          track anomalies. Any anomalies involving changes to the hardware
          configuration must be documented in the work orders.

          A software baseline will be established through configuration
          management control.

          Subsystem tests will use informal test notebooks and procedures. The
          organization of the test notebook is described later in this section.
          Test results will be recorded. Test equipment
          configuration/calibration information will be recorded.

4.2.3     SUBSYSTEM SELL-OFF

          Hardware/software tests results will be reviewed.

          Hardware work orders/PRFs will be closed. Open issues will be
          transferred to a system level work order or formal system level PRF.
          Waivers/deviations will be reviewed.

          Subsystem software SDRs and PRFs will be closed. Open SDRs and PRFs
          will be transferred to formal system level PRFs. Waivers/deviations
          will be reviewed.

          Software system disk image backup will be performed.

4.2.4     SYSTEM INTEGRATION AND CHECKOUT

          Hardware deliverable equipment will be recalibrated to ensure a firm
          baseline for FAT.

          Hardware and software subsystems will be fully integrated. A dry run
          of the FAT procedure will occur.

          A CM build will be performed to establish a controlled software
          baseline for the beginning of the FAT.

4.2.5     FAT TEST READINESS REVIEW

          A Physical Configuration Audit (PCA) will be held to determine the
          exact hardware configuration.

--------------------------------------------------------------------------------
                                       9

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GCE Implementation and Test Plan                                       Exhibit E
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          Software configuration management control baselines will be reviewed.

          PRFs will be reviewed.

          Waivers / deviations will be reviewed.

4.2.6     FAT

          The FAT procedures will be executed. The results will be recorded.
          Test equipment configuration/calibration information will be recorded.
          Formal PRFs will be generated to document all anomalies.

4.2.7     PRESHIPMENT REVIEW (PSR)

          FAT results will be reviewed. A FAT report will be provided.
          Information to be included in the test reports was provided in
          section 3.4.

          System level work order/PRFs will be closed. Waivers/deviations will
          be reviewed. Open issues may require rework/retest prior to shipment.
          A plan for closure of these open issues will be presented.

          Results on updates to the PCA or software configuration management
          baselines will be provided. A software disk image backup will be
          performed.

          Site installation plans will be reviewed.

4.2.8     PACK AND SHIP

          Packing invoice/inventory of all deliverable and temporary equipment
          shall be performed by planning aided by manufacturing/engineering. Any
          dis-integration of equipment will be coordinated with REA.

4.2.9     SITE INSTALLATION

          Hardware and software subsystems shipped from Denver will be fully
          reintegrated at each of the customer's sites. Interfaces with the
          customer furnished RF equipment and antennas subsystem will be
          connected to the system. At the completion of the hardware integration
          at each of the SAN TT&C sites, a "dry-run" of the SAT procedures will
          be conducted to verify the hardware and software.

                                       10
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GCE Implementation and Test Plan
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          installation and the interfaces with the Data Communications Equipment
          for that site.

          CDRL documentation "library" will be established. The CDRLs will be
          maintained by Hughes until completion of SAT. Prior to the final
          review, the CDRLs will be inventoried and sold-off to I-CO.

          PRFs will be utilized to document all anomalies.

          A CM build will be performed to establish a controlled software
          baseline for the beginning of SAT.

4.2.10    SAT READINESS REVIEW

          Actions taken to close system level work orders/PRFs from FAT and
          those remaining open shall be reviewed. Waivers/deviations will be
          reviewed. Open issues may require rework/retest prior to SAT.

          Status/updates to the physical configuration audit or software
          configuration management baselines will be provided.

          Configuration status of the SAT procedure shall be reviewed. Test
          equipment configuration and calibration validity shall be reviewed.

4.2.11    SAT

          The SAT procedures will be executed. Test results will be recorded.
          Test equipment configuration/calibration information will be recorded.
          Formal PRFs will be utilized to document all anomalies.

4.2.12    FINAL REVIEW

          SAT results will be reviewed. A SAT report will be provided.

          Any system level work orders/PRFs that are still open will be closed,
          liens against system and plans to address them shall be generated.
          Waivers/deviations will be reviewed.

          Final results or updates to the PCA or software configuration
          management baselines will be provided. A software system disk image
          backup will be performed.

                                       11
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           All CDRL documentation due at the completion of SAT will be provided.

           The system VCRI will be reviewed with the customer to verify all
           system requirements have been satisfied.

4.2.13     SUBSYSTEM TEST NOTEBOOKS/INFORMAL TEST PROCEDURES

           Subsystem test notebooks or informal test procedures shall include:

           1. Inspections / analyses

           2. Demonstration / test outline

           3. Test data sheets / plots

           4. Test equipment configuration

           5. Informal PRFs / SDRs (or action item list)

4.2.14     SYSTEM TEST NOTEBOOK

           The system test notebook shall include:

           1. System Specification

           2. System I&T Plan

           3. System Test Outline

           4. System Test Procedures

           5. System test log

           6. PRFs

           7. Customer lien list

           8. Waivers or deviations

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5.        TEST IDENTIFICATION

5.1       UNIT TESTS

          The Hughes-built units shall be tested at the Hughes facility in
          Denver, Colorado. Standard Hughes test procedures shall be used.

          Testing of units from other vendors (non-Hughes) shall be tested per
          each vendor's standard practice.

          Software units shall be tested at the Hughes facilities in Denver,
          Colorado, or El Segundo, California. Standard Hughes test procedures
          shall be used.

5.2       SUBSYSTEM TESTS

          The subsystem tests shall be directed by the Hughes REA upon
          conclusion of subsystem integration. The tests shall be conducted at
          the Hughes facilities in Denver or El Segundo, depending upon origin
          of the equipment or software. The subsystem tests shall verify that
          the various subsystems are performing to specification and are ready
          for systems integration.

          Tests results are recorded in test notebooks. Test anomalies are
          recorded on informal report forms. Material deficiencies are
          recorded in the work orders.

5.2.1     AC POWER TEST

          The AC power test shall verify that the proper AC voltage is being
          distributed to each rack. It shall also verify the operation of the ac
          power distribution panel in each rack and ensure that all AC power
          strips in each rack are wired properly.

5.2.2     BASEBAND SUBSYSTEM TEST

          The baseband subsystem tests shall use the telemetry and command (T&C)
          simulator as a  data source and shall demonstrate that the baseband
          units are properly cabled and functioning. These units include the
          remote telemetry & command units, IF Matrix Switch and associated
          cabling. The local controller (PC) shall be used to control the remote
          units for this test

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5.2.2.1   TELEMETRY TEST

          The telemetry test shall demonstrate that the remote telemetry
          hardware performs the functions necessary to recover pulse code
          modulation (PCM) using 70 MHz telemetry from the T&C simulator. The
          functions required for PCM consist of receiver tuning, phase
          demodulation, phase shift keyed (PSK) demodulation, bit
          synchronization, and frame synchronization. This test shall be
          demonstrated for on-line and backup hardware by appropriate patching.

5.2.2.2   COMMAND TEST

5.2.2.3   The command test shall demonstrate command operations of the remote
          command hardware and FM modulator. The command tone output of the
          command unit shall be verified using both an oscilloscope and the T&C
          simulator. The FM modulator 70 MHz output modulation shall be verified
          after adjusting frequency deviation in the operate mode. This test
          shall be demonstrated for on-line and backup command hardware. NOTE:
          The Command Encryptor/Decryptor is interfaced to the computer
          subsystem and will be tested during the computer subsystem tests and
          at the Factory Acceptance Test.

5.2.2.4   T&C IF RANGING CALIBRATION TEST

          The 70 MHz range monitor output of the FM modulator shall be connected
          to the telemetry unit input and the FM modulator shall be set to the
          calibrate mode for reduced deviation. The FM modulator 70 MHz output
          shall be verified for proper modulation after adjusting frequency
          deviation in the calibrate mode and it shall be demonstrated that
          proper phase delay measurements are made for each of the four range
          tones. This test shall be demonstrated for on-line and backup
          telemetry & command hardware.

5.2.2.5   PATCH PANELS TEST

          The baseband subsystem patch panel test shall verify assigned signals
          at the patch panels in the baseband rack.

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5.2.2.6   IF MATRIX SWITCHING TEST

          The baseband subsystem IF Matrix switching will be tested to verify
          all signal paths into the remote telemetry & command units.

5.2.2.7   BASEBAND TO SATELLITE T&C SUBSYSTEM COMPATIBILITY TEST

          A test shall be conducted with a deliverable Baseband unit and the F1
          satellite T&C subsystem to verify compatibility in all baseband
          functions.

5.2.3     RF SUBSYSTEM

          The RF subsystem equipment is all customer furnished equipment. No
          subsystem testing will be conducted by Hughes.

5.2.4     ANTENNA SUBSYSTEM

          The Antenna subsystem equipment is all customer furnished equipment.
          No subsystem testing will be conducted by Hughes.

5.2.5     COMPUTER SUBSYSTEM TESTS

          The computer subsystem integrator determines and documents the
          environment/configuration and coordinates the efforts of the software
          REs to install and integrate the computer software. The computer
          equipment/configuration shall be as close to the final deliverable
          configuration as possible. Once the computer system integrator agrees
          that the software has been successfully integrated, a controlled
          baseline of the computer system and software will be built/installed.
          Problems encountered during subsystem testing are documented on Hughes
          internal SDRs and/or PRFs. Test results will be documented in
          subsystem test notebooks as defined in section 4.2.2.

5.2.5.1   ON-LINE SOFTWARE TESTS

          The On-line software tests will demonstrate the ability to process
          telemetry, command and ranging operator requests and data. Telemetry &
          command hardware, as well as a T&C Simulator will be available to
          support this testing. Functions such as telemetry history,

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             event logging, displays and the interpretive command language will
             also be demonstrated.

5.2.5.2      STATUS AND CONTROL SOFTWARE

             The status & control tests shall demonstrate the ability of the
             workstation software to produce graphic control screens and
             communicate with key hardware items (e.g., remote telemetry &
             command units). Status & control interfaces to the customer
             furnished equipment (CFE) (refer to 5.2.3 and 5.2.4) will be tested
             utilizing an emulator and CFE provided test units.

5.2.5.3      OFF-LINE SOFTWARE TESTS

5.2.5.3.1    ORBITAL ANALYSIS SOFTWARE TEST

             The following orbital analysis functions shall be demonstrated in
             interactive and batch mode, where appropriate. Pregenerated data
             files shall be used as input. All operator input shall be specified
             in the test procedure. The test results shall be compared to actual
             satellite data where available, otherwise they shall be compared to
             previously validated output data. The following is a list of
             typical functions that will be demonstrated:

             - User Interface/HMI
             - Database Utilities
             Orbit Estimation Attitude Estimation Ephemeris Prediction
             - Eclipse Prediction
             - Station Keeping Maneuver Planning
             - Sun and moon interference prediction
             - Attitude Sensor Predictions & Calibration

5.2.5.4      SPACECRAFT HEALTH & PERFORMANCE ANALYSIS SOFTWARE TEST

             The analysis software tests shall demonstrate the ability to access
             spacecraft history files to extract data for tabular and graphical
             reports.

5.2.6        INTER-SITE DATA COMMUNICATIONS INTERFACE (DCI)

             The Inter-site Data Communications Interface Subsystem test will
             verify that the Hughes furnished Network interface equipment can
             process each of the signal types at the appropriate data rates.
             Software configurations for the equipment will be established,
             verified

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

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          and documented. Inter-site communications tests, to include CFE
          Communications equipment, will be performed on site during SAT.

5.2.7     DYNAMIC SATELLITE SIMULATOR (DSS) TEST

          The DSS is tested at the subsystem level in El Segundo, California. It
          has its own test plan and requirements (refer to applicable documents
          in Section 2). Final acceptance and sell-off of the DSS will be
          performed at the FAT and at site during the Site Acceptance test.

5.2.8     IOT SUBSYSTEM TEST

          A subsystem test of the IOT system will verify proper operation and
          integration of the IOT Test equipment, computers, test software and
          test applications software/procedures.

5.3       FACTORY ACCEPTANCE TEST (FAT)

          The Test Director (TD) is responsible for FAT execution and for
          collection of test results. The system FAT shall be conducted at
          Denver, and shall be witnessed by I-CO. The emphasis of FAT is to
          verify successful integration of On-line software functions and the
          subsystem to subsystem interfaces. The FAT shall verify, within the
          constraints posed by the factory environment, that the integrated
          system is performing to specifications and is ready for installation
          at the site.

          At the conclusion of FAT testing, the test data, PRFs and notes are
          collected into a FAT test results report. The preshipment review shall
          be held in conjunction with the test FAT data review. Upon successful
          completion of the FAT the equipment shall be packed, shipped and
          installed at the appropriate site.

5.3.1     FAT SYSTEM CONFIGURATION

          The remote telemetry & command equipment, and computer On-line
          software subsystem interfaces shall be established to the extent
          possible in the factory environment. The Data Communications
          Interfaces between the SCC and BCC computer equipment to each of the
          SAN site's remote telemetry & command equipment will be
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          connected using direct connect test cables. T&C simulators shall be
          utilized to provide a simulated spacecraft T&C interface to each of
          the baseband systems. The T&C simulator receives command generator
          tone outputs and decodes clear text commands. The T&C simulator also
          generates and provides simulated PCM or Bi-phase modulated telemetry
          inputs to the telemetry units. For more details about the T&C
          simulator refer to T&C Simulator Users Guide, reference section 2
          applicable documents.

5.3.2     COMPUTER CHECKOUT

          The computer checkout tests shall demonstrate that the computers are
          operationally ready to host the On-line software.

          Each computer shall be boot loaded with the On-line software. The
          operator shall log on to the control terminal and exercise the
          interactive commands and display functions to demonstrate the
          operational readiness of the On-line software.

          A selected set of commands shall be entered to demonstrate the ability
          to receive and process operator instructions. The message logger file
          shall be examined to verify the ability to log operator actions. The
          message logger file shall be examined at the end of the test to verify
          the ability to log system activity and alarm messages.

          The On-line software shall be initiated to verify the presence of
          On-line software database files.

5.3.3     TELEMETRY PROCESSING

          The functionality of the On-line software and the remote telemetry &
          command subsystem interfaces shall be tested by supplying a simulated
          spacecraft command reception and telemetry response to the baseband
          subsystem. The following tests shall be performed to demonstrate
          decommutation, conversion, and display of telemetry data from a given
          encoder.

5.3.3.1   PCM DATA TEST.

          T&C simulated PCM data received by each of the remote telemetry
          units, shall be processed and displayed by the associated real time
          software.

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________________________________________________________________________________

          It shall be verified that the correct remote telemetry receiver/decom
          module is receiving the PCM data signal and can lock to it.

          Decommutation of PCM telemetry data shall be verified by observation
          of minor frame count and time on the workstation display.

          Conversion of raw data to engineering units shall be verified by
          observation of selected parameters on the workstation display.

          Limit checking of PCM telemetry data shall be verified by modifying
          the alarm limits of selected parameters and observing the resulting
          alarm messages.

5.3.3.2   DATA ARCHIVING

          PCM data from the T&C simulator shall be received by the remote
          telemetry units, processed and displayed by software. The satellite
          attitude data shall be extracted from the PCM data and sent to the
          satellite acquisition task to be placed in the archive queue. The
          data queue display on the orbital operations workstation shall be
          used to confirm the reception of archive data.

5.3.4     TRANSMISSION OF SATELLITE COMMANDS.

          The commanding software functions that provide for the transmission,
          verification, and execution of commands in various modes shall be
          demonstrated. Both clear and encrypted modes will be tested, which
          will also verify the interface to the Command Encryptor/Decryptor.

          Several commands shall be transmitted to the T&C simulator, verified,
          and executed. Command transmission shall be visually confirmed by the
          displays on the workstation, and T&C simulator.

          Additional commands shall be issued to verify the ability of the
          software to update memorized LRVs.

5.3.4.1   HAZARDOUS SATELLITE COMMANDING

          Hazardous commands shall be issued to demonstrate the ability of the
          software to screen (i.e. inhibit) commands.

________________________________________________________________________________
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5.3.5     RANGING

5.3.5.1   The ranging software functions which provide for calibration and
          computation of range points shall be demonstrated.

5.3.5.2   T&C IF RANGE CALIBRATION TEST

          The functionality of the IF T&C range calibration test has been done
          at the subsystem level. The emphasis at FAT is the integration of the
          real-time software. The software shall configure the baseband system
          for T&C IF range calibration. As defined in subsystem testing the
          deviation of the FM modulator will be reduced and the output signal
          power level shall be reduced (i.e., calibration mode). The IF ranging
          calibration shall be initiated and the phase counts shall be displayed
          and stored.

5.3.6     COMPUTER SUBSYSTEM AND SOFTWARE

          The computer subsystem and software tests shall include a test which
          shall verify the consistency of essential operational databases in
          each server. A concurrent test will be performed which shall verify
          the operational capacity of computers under the operational conditions
          such as simultaneous commanding, On-line/Off-line telemetry processing
          and analysis. This test will establish a typical configuration of
          system users and it will demonstrate that normal operations can be
          sustained.

5.3.6.1   COMPUTER TO TIMING INTERFACE TEST

          The timing test shall demonstrate the capabilities of the timing
          equipment. The time code generator shall be set to the correct date
          and time and proper updating of the display shall be verified. The
          computers shall be commanded to read time from the time code
          generator, and correct reception shall be verified.

5.3.6.2   ON-LINE SOFTWARE TESTS

          The On-line software will have been tested and sold off during the
          subsystem test phase. Selected On-line software functions will be
          demonstrated to verify the proper installation of the software and

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          associated databases. This software will be used extensively
          throughout the SAT to verify the end to end functionality of the
          entire system.

5.3.6.3   OFF-LINE SOFTWARE TESTS

          The Off-line software will have been tested and sold off during the
          subsystem test phase. Selected Off-line software functions will be
          demonstrated to verify the proper installation of the software and
          associated databases.

5.3.6.4   STATUS AND CONTROL SOFTWARE TESTS

          The selected ground status and control software functions which
          provide control and monitoring of ground station shall be
          demonstrated. The following software functions shall be demonstrated:

          1. Monitoring and controlling of selected equipment via TT&C computer
          display screen

          2. Monitoring and controlling of selected equipment via workstation
          graphic displays

          Each control parameter shall be set to desired states via the TT&C
          control screen. The observed change in the target baseband or RF
          equipment is reported. The change in the status parameter displayed on
          the screen shall also be observed. For those status parameters that
          cannot be altered from the computer, desired status shall be manually
          induced and the resulting status display shall be observed.

          NOTE: The status and control functions for the CFE are tested against
          an emulator during subsystem tests. Due to the fact that this
          equipment is not available during the FAT, these status and control
          tests will be deferred to the SAT.

5.3.7     INTER-SITE DATA COMMUNICATIONS INTERFACE (DCI)

5.3.7.1   SCC & BCC COMMUNICATIONS TO SAN TT&C SITES

          Proper operation of the inter-site Data Communications Interfaces will
          be verified as part of the computer software tests. These tests
          demonstrate the ability to transfer traffic between the SCC and BCC
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          sites to and from the remote telemetry & command equipment located at
          each of the SAN TT&C sites. This traffic will include telemetry,
          command and ranging data, along with equipment status & control.

5.3.8     IOT SUBSYSTEM TEST

          The IOT Subsystem Test of the FAT will verify that the IOT hardware
          and software meets the subsystem requirements and also verify proper
          system performance when interfaced with the SCC computers and TT&C
          software.

5.3.9     GROUND TT&C EQUIPMENT SYSTEM LOADING AND STRESS TEST.

          A demonstration shall be conducted to verify that the worst case
          computational load environment can be processed within the specified
          margins for the complete GCE system. This will include simultaneous
          control and status of the six simulated remote site RF/antennae
          equipment sets, processing data from twelve simulated satellites. The
          data transfer of backup data to the BCC and BCC control and status
          switchover shall also be demonstrated.

5.4       SITE ACCEPTANCE TEST

          The SAT shall be directed by a test conductor at the conclusion of
          site installation. These tests shall be conducted at the appropriate
          facilities and shall be witnessed by I-CO. The emphasis of SAT is to
          verify:

          1. The Hughes provided equipment was not damaged in shipment and is
          properly installed.

          2. Verify interfaces between the Hughes ground system equipment and
          the customer provided facilities.

          3. Demonstrate that the complete ground control system functions as
          an integrated entity.

          4. Demonstrate compatibility of the ground control system with the
          INMARSAT-P spacecraft.

          5. Verify the system interfaces that were not physically possible to
          test during FAT (specifically the CFE RF and Antenna equipment.
--------------------------------------------------------------------------------
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5.4.1          SITE INTEGRATION AND CHECKOUT

5.4.1.1        SAT SYSTEM CONFIGURATION

               All the delivered equipment and racks shall be installed in their
               appropriate sites. The customer furnished equipment that was not
               available at FAT, such as the RF and antenna subsystems, will be
               interfaced to the system according to the system design drawings.
               The network interface equipment will be connected to the customer
               furnished communications lines.

5.4.1.2        COMPUTER CHECKOUT

               The system computers shall be brought up with On-line software
               and some high level integrity checks shall be performed to verify
               that equipment damage during shipping has not occurred and that
               the system computer connectivity has been re-established. The
               usage of the system computers throughout the remaining SAT test
               shall add additional confidence.

5.4.1.3        TELEMETRY PROCESSING

               The functionality of the On-line software and the remote
               telemetry & command subsystem interfaces shall be tested by
               supplying a simulated spacecraft command reception and telemetry
               response to each of the baseband subsystems utilizing the T&C
               simulators. The following tests shall be performed to demonstrate
               decommutation, conversion, and display of telemetry data from a
               given encoder.

5.4.1.3.1      PCM DATA TEST

               T&C simulated PCM data received by each of the remote telemetry
               units shall be processed and displayed by the associated On-line
               software.

               It shall be verified that the correct telemetry receiver/decom
               module is receiving the PCM data signal and can lock to it.

               Decommutation of PCM telemetry data shall be verified by
               observation of minor frame count and time on the workstation
               display.

________________________________________________________________________________
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              Conversion of raw data to engineering units shall be verified by
              observation of selected parameters on the workstation display.

              Limit checking of PCM telemetry data shall be verified by
              modifying the alarm limits of selected parameters and observing
              the resulting alarm messages.

5.4.1.3.2     DATA ARCHIVING

              PCM data from the T&C simulator shall be received by the remote
              telemetry units, processed and displayed by software. The
              satellite attitude data shall be extracted from the PCM data and
              sent to the satellite acquisition task to be placed in the archive
              queue. The data queue display on the orbital operations
              workstation shall be used to confirm the reception of archive
              data.

5.4.1.4       TRANSMISSION OF SATELLITE COMMANDS.

              The commanding software functions that provide for the
              transmission, verification, and execution of commands in various
              modes shall be demonstrated. Both clear and encrypted commands
              will be tested.

              Several commands shall be transmitted to the T&C simulator,
              verified, and executed. Command transmission shall be visually
              confirmed by the displays on the workstation, and T&C simulator.

              Additional commands shall be issued to verify the ability of the
              software to update memorized parameters.

5.4.1.4.1     HAZARDOUS SATELLITE COMMANDING

              Hazardous commands shall be issued to demonstrate the ability of
              the software to screen (i.e., inhibit) commands.

5.4.1.5       RANGING

              The ranging software functions which provide for calibration and
              computation of range points shall be demonstrated.

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5.4.1.5.1    T&C IF RANGE CALIBRATION TEST

             The functionality of the IF T&C range calibration test has been
             done at the subsystem level. The emphasis at FAT is the integration
             of the On-line software interfaces. The software shall configure
             the baseband system for T&C IF range calibration. As defined in
             subsystem testing the deviation of the FM modulator will be reduced
             and the output signal power level shall be reduced (i.e.,
             calibration mode). The IF ranging calibration shall be initiated
             and the phase counts shall be displayed and stored.

5.4.1.6      ANTENNA MONITORING

             The antenna control software to antenna subsystem interfaces, that
             provide for monitoring of the antenna positions and status shall be
             demonstrated.

5.4.1.7      COMPUTER SUBSYSTEM AND SOFTWARE

             The computer subsystem and software tests shall include a test
             which shall verify the consistency of essential operational
             databases in each server. A concurrent test will be performed which
             shall verify the operational capacity of computers under the
             operational conditions such as simultaneous commanding,
             On-line/Off-line telemetry processing and analysis. This test will
             establish a typical configuration of system users and it will
             demonstrate that normal operations can be sustained.

5.4.1.7.1    COMPUTER TO TIMING INTERFACE TEST

             The timing test shall demonstrate the capabilities of the timing
             equipment. The time code generator shall be set to the correct date
             and time and proper updating of the display shall be verified. The
             computers shall be commanded to read time from the time code
             generator, and correct reception shall be verified.

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5.4.1.7.2      ON-LINE SOFTWARE TESTS

               The On-line software will have been tested and sold off during
               the subsystem test phase. Selected On-line software functions
               will be demonstrated to verify the proper installation of the
               software and associated databases. This software will be used
               extensively throughout the SAT to verify the end to end
               functionality of the entire system.

5.4.1.7.3      OFF-LINE SOFTWARE TESTS

               The Off-line software will have been tested and sold off during
               the subsystem test phase. Selected Off-line software functions
               will be demonstrated to verify the proper installation of the
               software and associated databases.

5.4.1.7.4      STATUS AND CONTROL SOFTWARE TESTS

               The selected ground status and control software functions which
               provide control and monitoring of ground station shall be
               demonstrated. The following software functions shall be
               demonstrated:

               1. Monitoring and controlling of selected equipment via TT&C
               computer display screen

               2. Monitoring and controlling of selected equipment via
               workstation graphic displays

               Each control parameter shall be set to desired states via the
               TT&C control screen. The observed change in the target baseband
               or RF equipment is reported. The change in the status parameter
               displayed on the screen shall also be observed. For those status
               parameters that cannot be altered from the computer, desired
               status shall be manually induced and the resulting status display
               shall be observed.

               These tests will include status & control of the CFE RF and
               Antenna equipment.

5.4.1.8        INTER-SITE DATA COMMUNICATIONS INTERFACE (DCI)

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5.4.1.8.1      SCC & BCC COMMUNICATIONS TO SAN TT&C SITES

               Proper operation of the inter-site Data Communications Interfaces
               will be verified as part of the computer software tests. These
               tests demonstrate the ability to transfer traffic between the SCC
               and BCC sites to and from the remote telemetry & command
               equipment located at each of the SAN TT&C sites. This traffic
               will include telemetry, command and ranging data, along with
               equipment status & control.

5.4.1.9        DYNAMIC SATELLITE SIMULATOR (DSS)

               The DSS is used to simulate the detailed functioning of the
               satellite and its interfaces for the SAT testing.

5.4.1.10       IOT SUBSYSTEM TEST

               This will be rerun of the IOT FAT test to verify proper
               installation of the IOT system in the selected SAN site and
               proper performance over the communication network with the SCC.

5.4.2          OVERALL SYSTEM PERFORMANCE DEMONSTRATION

               This will be in essence a rerun of the System Loading and Stress
               Test in Section 5.3.9 of this document. This will include
               simultaneous control and status of the six remote site
               RF/antennae equipment sets, processing data from twelve simulated
               satellites at the remote sites. The data transfer of backup data
               to the BCC and BCC control and status switchover shall also be
               demonstrated.

5.5            FINAL ACCEPTANCE REVIEW
               -----------------------

               A final acceptance review shall be conducted at the completion
               of SAT.

5.6            SATELLITE TO SCC COMPATIBILITY TEST
               -----------------------------------

               A Satellite to SCC compatibility test shall be conducted with the
               F1 satellite (in the El Segundo factory) via a communication link
               with the SCC.

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ACRONYMS
--------

           CDRL - Contract Data Requirements

           CM     Configuration Management

           FAT    Factory Acceptance Test

           HISD   Hughes Information Systems Division.

           PCA    Physical Configuration Audit

           PRF    Problem Report Form

           SAT    Site Acceptance Test

           SDR    Software Discrepancy Report

           VCRI   Verification Cross Reference Index

--------------------------------------------------------------------------------
                                       1
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                        CONTRACT NUMBER ICOO/95-1002/NR

                     -------------------------------------
                                   EXHIBIT F
                                 GCE TECHNICAL
                                 SPECIFICATION
                     -------------------------------------

                                 3 OCTOBER 1995

I-CO GLOBAL                                            HUGHES SPACE AND
COMMUNICATIONS                                         COMMUNICATIONS
(OPERATIONS) LIMITED                                   INTERNATIONAL, INC.

-----------------------                                ------------------------
Olof Lundberg                                          Donald L. Cromer
Chief Executive Officer                                Chief Executive Officer
<PAGE>   297
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR

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

2. REFERENCED DOCUMENTS......................................................  1

3. SYSTEM AND SEGMENT DESCRIPTION............................................  1

     3.1 SYSTEM OVERVIEW                                                       1

     3.2 GROUND CONTROL EQUIPMENT (GCE) OVERVIEW                               1

4. (INTENTIONALLY LEFT BLANK)................................................  6

5. ALLOCATION OF REQUIREMENTS................................................  6

     5.1 GENERAL                                                               6

          5.1.1 General Requirements.........................................  6

     5.2 REMOTE TT&C EQUIPMENT                                                 6

          5.2.1 Functional Description.......................................  6

          5.2.2 General......................................................  7

          5.2.3 Baseband Unit................................................ 10

          5.2.4 Ground Equipment Control and Status Interface................ 11

          5.2.5 Switching.................................................... 11

          5.2.6 Data Processing Equipment.................................... 11

          5.2.7 Communication and Multiplexing Equipment..................... 11

          5.2.8 T&C Simulator................................................ 11

          5.2.9 External Interface requirements.............................. 12

     5.3 SATELLITE CONTROL CENTER/BACKUP CONTROL CENTER EQUIPMENT             12

          5.3.1 Functional Description....................................... 12

          5.3.2 Requirements................................................. 12

     5.4 OFF-LINE SOFTWARE                                                    17

          5.4.1 Functional Description....................................... 17

          5.4.2 Processing Requirements...................................... 18
<PAGE>   298
GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR

<TABLE>
<S>  <C>    <C>                                                                   <C>
     5.4.3   Attitude Processing..................................................  18
     5.4.4   Orbit................................................................  20
     5.4.5   Injection............................................................  21
     5.4.6   Maneuver.............................................................  22
     5.4.7   Orbit Keeping........................................................  23
     5.4.8   Propellant Budgeting.................................................  24
     5.4.9   Long term Planning...................................................  24
     5.4.10  Evaluation...........................................................  25
     5.4.11  Planning & Scheduling................................................  25
     5.4.12  Visualization tools..................................................  27

5.5 On-line software (Satellite Telemetry & Command)                                27
     5.5.1   Functional Description...............................................  27
     5.5.2   General..............................................................  27
     5.5.3   Satellite Telemetry Processing.......................................  28
     5.5.4   Satellite Command Processing.........................................  29
     5.5.5   ON-LINE HMI (controls & displays)....................................  30

5.6 Ground System Status and Control (GSC)                                          32
     5.6.1   Functional Description...............................................  32
     5.6.2   GSC Processing Requirements..........................................  32

5.7 Simulation                                                                      34

5.8 IOT Subsystem                                                                   34
     5.8.1   Functional Description...............................................  34
     5.8.2   General requirements.................................................  34
     5.8.3   Test equipment.......................................................  34
     5.8.4   Payload IOT requirements.............................................  35

5.9 Database                                                                        36
     5.9.1   Description..........................................................  37
     5.9.2   Satellite command database...........................................  37
</TABLE>
<PAGE>   299
GCE Technical Specification                                 Exhibit F
                                         Contract No. ICOO/95-1002/NR

          5.9.3 Satellite telemetry database:.......................37
          5.9.4 Satellite database..................................37
          5.9.5 Command procedures (PROCs)..........................38

     5.10 QUALITY                                                   38

     5.11 DESIGN AND CONSTRUCTION                                   38

          5.11.1 Hardware...........................................38
          5.11.2 Software...........................................38

<PAGE>   300
GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR

LIST OF TBD'S, TBR'S, TBS'S
---------------------------

TBR's
-----

none

<PAGE>   301
GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

1.        SCOPE

          This document defines the functional, performance, and design
          requirements for the INMARSAT-P Ground Control Equipment (GCE) of the
          INMARSAT-P mobile satellite system.

2.        REFERENCED DOCUMENTS

2.1       Interface Requirements Specification
          ------------------------------------

2.2       Exhibit B Appendix 3- DSS Specifications
          ----------------------------------------

2.3       Exhibit G GCE Product Assurance Plan
          ------------------------------------

3.        SYSTEM AND SEGMENT DESCRIPTION

3.1       SYSTEM OVERVIEW
          ---------------

          The INMARSAT-P mission is to provide world wide coverage for hand
          held or on-vehicle cellular communication devices. The INMARSAT-P
          satellite system consists of ten to twelve satellites in intermediate
          circular earth orbit with a Semi Major Axis of 10,700 km which
          provides an orbital period of 6 hours. There are two orbit planes
          with five to six satellites per plane. The planes are inclined at 45
          degrees and -45 degrees. The operational satellites are equally
          spaced within the orbit plane and phased with the satellites in the
          other plane to provide continuous visibility of the whole Earth.

          The GCE consists of the primary Satellite Control Center (SCC), the
          Backup Control Center (BCC), and Remote TT&C baseband equipment at
          selected Satellite Access Node (SAN) sites. The GCE missions are:

          - to support launch, deployment, and In Orbit Testing (IOT)
          - to monitor and maintain the health of the satellite
          - to maintain attitude, orbit, power, etc. within the needs of the
            Communication payloads.

          There are 12 (or more) Satellite Access Node (SAN) remote sites
          containing five antennas, RF equipment and baseband equipment

                                       1
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

          required to process the communication traffic and to control the
          communication payload. Six to eight of these sites will be used for
          the TT&C mission via inclusion of three dedicated baseband equipment
          strings at each site. The TT&C SAN sites are connected to the SCC and
          BCC via communication lines. All SAN sites are also connected to the
          Network Management Center (NMC) which can control and status all the
          sites. The SCC and BCC are connected via a communication network.

3.2       GROUND CONTROL EQUIPMENT (GCE) OVERVIEW

          The purpose of the GCE is to provide hardware and software for an
          integrated planning, execution, and evaluation system to interact with
          the SAN sites, antenna and RF equipment, and TT&C baseband components
          to accomplish C-band contacts with the INMARSAT-P satellites for
          continuous monitoring. The GCE also provides simulation capabilities
          for launch and training related activities. The GCE supports vehicle
          state of health, data analysis, simulation for anomaly analysis and
          resolution, command planning and verification and exercise and
          rehearsal support.

          The GCE consists of SCC, BCC, communication network between the SCC
          and BCC, communication lines to the SAN sites, and the remote baseband
          equipment at the SAN sites. Six of the 12 SAN sites will be used for
          TT&C. The 6 SAN sites provide continuous monitoring capability for the
          12 satellites. When a contact is planned, the SCC will predict which
          SAN site is to be used and send pointing data. During contact, the SCC
          will select the pointing data for each antenna, send command uploads,
          and receive telemetry via the communication line.

--------------------------------------------------------------------------------
                                       2
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR

                             [12 REMOTE SAN SITES]

                  [GRAPHIC CONTAINING THE FOLLOWING CALL-OUTS]

                        Network Management Centre (NMC)

                                  TT&C Segment

                        Backup Spacecraft Control Centre

                        Spacecraft Control Centre (SCC)

                           FIGURE 1 - SYSTEM OVERVIEW

--------------------------------------------------------------------------------
                                                                            3

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR

                                  TT&C SEGMENT

                  [GRAPHIC CONTAINING THE FOLLOWING CALL-OUT]

                              NETWORK MGMT. CENTER

                  FIGURE 2 - GROUND CONTROL EQUIPMENT OVERVIEW

--------------------------------------------------------------------------------
                                                                          4

<PAGE>   305
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR

                         [CHART  FIGURE 3 - GCE SCC SOFTWARE]

________________________________________________________________________________
                                                                               5
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

4.        (INTENTIONALLY LEFT BLANK)

5.        ALLOCATION OF REQUIREMENTS

5.1       GENERAL

          The contractor shall deliver TT&C Ground Control Equipment including
          hardware, software, and procedures, that successfully supports
          performance of the appropriate overall INMARSAT-P spacecraft control
          functions. For the GCE the overriding purpose is that the
          requirements contained in this specification will result in the
          contractor delivering a GCE system that allows the customer to
          operate the fleet of satellites over the life of the mission. This
          includes:

          -  Injection, on-orbit acceptance, and final orbit operations
          -  Satellite on station O&M operations up to and including the full
             12 satellite fleet
          -  Satellite anomaly investigation capability
          -  Ground equipment O&M
          -  Training exercises

________________________________________________________________________________
                                       6

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________
<TABLE>
<CAPTION>
<S>            <C>
5.1.1          GENERAL REQUIREMENTS

5.1.1.1        Maximum number of satellites = twelve

5.1.1.2        Number of remote sites = six

5.1.1.3        Maximum number of antenna/site = five

5.1.1.4        All equipment provided as part of the GCE shall be able to
               operate with 120v, 60Hz or 220/240v, 50Hz

5.1.1.5        The overall system shall be capable of easy expansion to seven
               or eight remote sites.

5.1.1.6        The initial system shall be capable of operation with two
               simultaneous DSS's.

5.1.1.7        Expansion of the design to 14 satellites shall also be possible.

5.1.1.8        The computers and baseband unit switching and patching shall
               allow for a high degree of operational flexibility and
               convenience.

5.1.1.9        Specifically, cables, switches and patches will be unambiguously
               labeled and highlighted.

5.1.1.10       The complete system shall be provided with reasonable safeguards
               to prevent unauthorized access.

5.1.1.11       Operational concept reviews shall be held during the design phase
               with the goal of demonstrating adequate system automation so that
               two controllers can operate the complete constellation.

5.1.1.12       Operational software shall be designed in general for easy change
               and maintenance for such items as differences between S/C,
               commonality between sites, and adding two more satellites to the
               system.

5.1.2          During hardware and software selection, vendors shall be
               evaluated and selected with due consideration for their service
               and maintenance capability in all expected GCE system worldwide
               geographic sites.
</TABLE>
________________________________________________________________________________
                                       7
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.2       REMOTE TT&C EQUIPMENT

5.2.1     FUNCTIONAL DESCRIPTION

          The remote TT&C equipment consists primarily of baseband units,
          communication and network equipment, and a front end IF switch. The
          baseband units receive, demod, synch, buffer, and transfer the
          telemetry data over the communications network to the SCC. Commands
          are received from the SCC, buffered, the command tones are generated
          and output to the IF interface. In addition, ranging tones can be
          generated and output to the command IF interface and received back on
          the telemetry link. The phase difference is determined and the data is
          timetagged and transferred to the SCC. The IF switch can be remotely
          controlled from the SCC to permit selecting the appropriate
          antenna/satellite to interface to a particular baseband unit. All
          three baseband units can be used simultaneously for satellite data
          processing.

5.2.2     GENERAL

5.2.2.1   One TT&C Group at each TT&C site.

5.2.2.2   Three simultaneous baseband channels per TT&C group

5.2.2.3   No single point failure shall cause the loss of more than one baseband
          function.

5.2.2.4   The system design shall allow manual commanding (clear mode) from the
          remote sites.

--------------------------------------------------------------------------------
                                       8
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

                      [TT&C SITE FUNCTIONAL BLOCK DIAGRAM]

                        FIGURE 4 - REMOTE SITE EQUIPMENT

--------------------------------------------------------------------------------
                                       9
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GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

                        INTERFACE IDENTIFICATION DIAGRAM

                       FIGURE 5 - REMOTE SITE INTERFACES

--------------------------------------------------------------------------------
                                       10
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.2.3         BASEBAND UNIT

5.2.3.1       Functional Description

5.2.3.2       Command Generation

5.2.3.2.1     Command buffer

5.2.3.2.2     Support Frequency Shift Key (FSK) Return to Zero (RZ) format
              commanding for the I-COGC satellites.

--------------------------------------------------------------------------------
                                       11

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.2.3.2.3     Frequency Modulate (FM) the baseband command tones onto a 70 Mhz
              nominal IF output.

5.2.3.3       Downlink/Telemetry

5.2.3.3.1     Receive two telemetry streams at a nominal 70 Mhz IF.

5.2.3.3.2     Phase demodulate range tones and/or telemetry subcarriers.

5.2.3.3.3     Provide subcarrier demodulation for Phase Shift Key (PSK) Pulse
              Code Modulation (PCM) telemetry data.

5.2.3.3.3.1   Bit synch

5.2.3.3.4     Frame synchronize, time tag, and buffer the telemetry data.

5.2.3.3.4.1   Output the telemetry frame to the communication interface.

5.2.3.4       Ranging

5.2.3.4.1     Generate Ranging tones.

5.2.3.4.2     Measure range delay to an accuracy of 15 meters random and bias.

5.2.3.4.3     Perform range calibration measurements.

5.2.3.4.4     Time stamp range value to an accuracy of +/-1 Millisecond.

5.2.3.5       CONTROL & STATUS (BASEBAND UNIT)

5.2.3.5.1     Command generator

5.2.3.5.2     Range Tone Processor

5.2.3.5.3     frame synchs

5.2.3.5.4     Baseband unit level

--------------------------------------------------------------------------------
                                       15

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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------
5.2.4     GROUND EQUIPMENT CONTROL AND STATUS INTERFACE

Note: these interfaces have been replaced with a single network interface
defined in Section 5.2.9.

5.2.5       SWITCHING

5.2.5.1     Simultaneously connect up to 3 sets of baseband equipment strings to
            selected IF interfaces of six total (5 antenna plus T&C Simulator).

5.2.6       DATA PROCESSING EQUIPMENT

5.2.6.1     Provide computer resources for remote control of the Baseband
            strings.

5.2.7       COMMUNICATION AND MULTIPLEXING EQUIPMENT

5.2.7.1.1   Provide a local area network for control, status, and data
            (telemetry, command, and ranging) transfer to/from the baseband
            units, IF switch, simulators, and remote data processing equipment.

5.2.7.1.2   Provide a local area network interface to the antenna & RF control &
            status network.

5.2.8       T & C SIMULATOR

5.2.8.1     Functional description

            The T&C simulator is used to verify proper functioning of the
            baseband can generate a simulated PCM telemetry stream and also
            process the command tones back to the digital level.

5.2.8.2     General requirements

5.2.8.2.1   Model the ICOG-C satellite telemetry and command functions as
            necessary to test the baseband units.

5.2.8.3     Model the PCM telemetry

5.2.8.3.1   Convert the digital telemetry output of the computer to NRZ-L PCM IF
            output.

--------------------------------------------------------------------------------
                                       16
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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.2.8.4        Command signal processing

5.2.8.4.1      Demodulate and convert the command IF input signal to a digital
               command data input to the computer

5.2.8.5        Range tone processing

5.2.8.5.1      Input range tones and output the data on the phase modulated
               telemetry IF output.

5.2.8.6        Telemetry and command digital processing

5.2.8.6.1      Generate a 1 or 4kbit telemetry stream with satellite ID, frame
               synch patterns, and stored telemetry frames.

5.2.8.6.2      Accept clear commands, decode, and store for display

5.2.8.6.3      Accept secure commands and store for display.

5.2.8.7        Control and status

5.2.8.7.1      Permit direct operator control of telemetry data generation
               including on/off, rates, frame synch patterns, and modes.

5.2.8.7.2      Display modes, telemetry data, and received commands.

5.2.9          EXTERNAL INTERFACE REQUIREMENTS

               Refer to the INMARSAT-P Interface Requirements Spec for details.

5.2.9.1        SCC/BCC Communication Interface

5.2.9.1.1      Communication links with the SCC.

5.2.9.1.2      Communication links with the BCC.

5.2.9.2        Antenna and RF Equipment Interface

5.2.9.2.1      This shall be a local area network to local area network
               interface.

--------------------------------------------------------------------------------
                                       17
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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.2.9.3        Baseband data interface

5.2.9.3.1      Downconverted telemetry/ranging signal at a nominal IF of 70Mhz
               from each antenna/RF set.

5.2.9.3.2      Modulated command/ranging signal at a nominal IF of 70 Mhz to
               each antenna/RF set.

5.3            SATELLITE CONTROL CENTER/BACKUP CONTROL CENTER EQUIPMENT

5.3.1          FUNCTIONAL DESCRIPTION

               The SCC/BCC Equipment includes the necessary COTS data
               processing hardware and both COTS and contractor software to
               support the INMARSAT Mission. In particular, this equipment will
               support users of on-line, off-line and simulation software in
               operational, maintenance, test, and development activities. This
               equipment includes the network, network interconnect devices
               (e.g., hubs and routers), intelligent workstations (user and
               server platforms), peripheral devices (i.e., terminal servers and
               printers), and Software (i.e., Operating Systems, Networking
               Protocols, and Development Environment Support Tools).

5.3.2          REQUIREMENTS

5.3.2.1        General

5.3.2.1.1      Requirements are the same for the BCC as the SCC unless otherwise
               noted.

5.3.2.2        System Availability

5.3.2.2.1      No single point failure shall prevent the capability (exclusive
               of switchover time) to process 12 simultaneous satellite contacts
               and control the supporting hardware.

5.3.2.2.2      It shall be possible to switchover processing (telemetry and
               command) to a backup processing string in less than 5 minutes.

5.3.2.2.3      It shall be possible to warm transition the Satellite Control
               Center (SCC) functionality to the BCC within 30 minutes.

--------------------------------------------------------------------------------
                                       18

<PAGE>   316
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.3.2.2.4      A hot transition shall be possible in less than 10 minutes. This
               transition shall be as seamless as possible.

5.3.2.2.6      In the event of an uncontrolled failure or switch-off, it shall
               be possible to re-establish full operation within 30 minutes.

5.3.2.2.4      Provide the capability to transmit operational data from the SCC
               to the BCC in a timely fashion in order to support the BCC's
               ability to assume responsibility for on-line operations.

--------------------------------------------------------------------------------
                                       19
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

                      [SCC HARDWARE CONFIGURATION GRAPHIC]

________________________________________________________________________________
                                       20
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GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.3.2.3      Processing Capacity

5.3.2.3.1    Provide capacity to process up to 12 live simultaneous commanding
             and telemetry contacts plus a simulated (DSS) contact (with two
             telemetry streams per contact).

5.3.2.3.2    Provide capacity for control and status of up to 6 remote TT&C
             sites within a single computer platform.

5.3.2.3.3    Provide capacity to support launch, IOT, routine operations, backup
             operations, maintenance, and training exercise activities
             simultaneously.

5.3.2.3.4    At CDR, processing load on individual computer platforms shall not
             exceed 50% of capacity of each processor.

5.3.2.3.5    At CDR, memory consumption on individual computer platforms shall
             not exceed 50% of capacity.

5.3.2.4      Displays/HMI

5.3.2.4.1    Provide 21 interactive terminals.

5.3.2.4.2    Provide capacity to support a maximum of 20 added interactive
             terminals.

5.3.2.4.3    Provide capability to capture and print workstation screen on user
             request.

5.3.2.4.4    Provide capability to support printing requirements of all
             operational and maintenance users.

5.3.2.5      Network Requirements

5.3.2.5.1    The network shall interface with the communication equipment
             connected to the remote TT&C sites and transfer data, status and
             control information between user workstations and the communication
             equipment.

--------------------------------------------------------------------------------
                                       21

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GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.3.2.5.2    The network shall interface with the communication equipment
             connected to the BCC and provide remote logging capability, support
             time and command data transfers, and support software and database
             transfers.

5.3.2.5.3    The network shall interface with the communication equipment
             connected to the NMC and provide remote logging capability, support
             time and command data.

5.3.2.5.4    Overall traffic load on the internal system LAN shall be no greater
             than 50% of total capacity of the system.

5.3.2.5.5    Management traffic on the internal system LAN shall be less than 5%
             of the total network capacity.

5.3.2.5.6    The network shall provide a distributed time source which is
             accessible via the network.

5.3.2.6      ON-LINE STORAGE REQUIREMENTS

             At CDR, on-line storage shall:

5.3.2.6.1    consume a maximum of 50% of total on-line storage capacity

5.3.2.6.2    accommodate a minimum of 12 full orbit satellite databases

5.3.2.6.3    accommodate storage of raw vehicle telemetry for 7 days

5.3.2.6.4    accommodate storage of processed vehicle telemetry (decommutated,
             derived, and software parameters) for 7 days

5.3.2.6.5    accommodate storage of vehicle trend data for 12 years

5.3.2.6.6    accommodate storage of operational history logs for 7 days

5.3.2.6.7    accommodate storage of test and training databases.

5.3.2.7      Archival Requirements

5.3.2.7.1    Provide archival capability for all raw vehicle telemetry,
             processed vehicle telemetry, vehicle telemetry trend data, and
             operational log data.

--------------------------------------------------------------------------------
                                       22

<PAGE>   320
GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

5.3.2.7.2   Provide an archival data management software capability.

5.3.2.7.3   Mass storage archival access shall be reviewed at PDR.

5.3.2.8     SYSTEM SOFTWARE (COTS)

5.3.2.8.1   Operating System shall be POSIX compliant.

5.3.2.8.2   User Interface / Window Manager

5.3.2.8.3   Network Communication

5.3.2.8.4   Compilers as necessary to maintain system.

5.3.2.8.5   Debugging tools.

5.3.2.8.6   Configuration Management Tools.

5.3.2.8.7   Database Management System (DBMS).

5.3.2.8.8   Data Archival System.

5.3.2.8.9   System and Network Management.

5.3.2.8.10  System Administration and Management Tools.

5.3.2.8.11  Network Administration and Management Tools.

5.3.2.9     INTERCOM SYSTEM

5.3.2.9.1   A multichannel intercom system with 20 stations total distributed
            between the BCC/SCC and the six TT&C sites.

5.3.2.9.2   The system shall support a minimum of 6 voice nets and interface
            with the local PABX.

5.3.2.9.3   Each of the 20 stations shall be provided with professional quality
            headsets.

5.3.2.10    SCC/BCC Equipment External Interfaces

5.3.2.10.1  Interface to Remote Sites (refer to TT&C Segment Interface spec).

-----------------------------------------------------------------------------
                                       23
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

5.3.2.10.2   Interface to BCC (refer to Interface Requirements Spec)

5.3.2.10.3   Interface to NMC (refer to Interface Requirements Spec)

5.4          OFF-LINE SOFTWARE

5.4.1        FUNCTIONAL DESCRIPTION

             The Off-line software is made up of several subfunctions. The
             Attitude Processing subfunction supports the maintenance of
             calibration coefficients and sensor predictions for the sun
             sensors, earth sensors, hemispherical resonating gyro, and torque
             mechanisms. The Orbit Processing subfunction calculates state
             vectors, propagates ephemeris, and calculates orbit events. The
             Injection subfunction is used to calculate optimum orbit maneuvers
             to place the spacecraft on station after they have been injected
             into the orbit by the launch vehicle. The Orbit Keeping subfunction
             calculates orbit adjust maneuvers to maintain the spacecraft in the
             circular orbit with the correct inclination and eccentricity. It
             also is used to assure that the spacecraft are maintained in
             correct phasing with respect to each other for optimum coverage.
             The Maneuver subfunction generates maneuvers using a model of the
             thrusters and thruster configuration to minimize use of fuel. It
             also generates a PROC which is used by On-line to perform the
             maneuver. The Planning subfunction is used for mission support. It
             generates a contact plan used by On-line for automated contact and
             monitoring. Also, the planning subfunction is used for predicting
             propellant usage and planning for optimum life expectancy.

5.4.2        PROCESSING REQUIREMENTS

5.4.2.1      General

5.4.2.1.1    All functional inputs shall be accepted from the keyboard and
             mouse

             The capability to obtain functional inputs from the following
             services shall be provided

5.4.2.1.2    static default inputs

5.4.2.1.3    current mission defaults

________________________________________________________________________________
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.4.2.1.4      user modification of default inputs at any time prior to
               execution

5.4.2.1.5      Database definable range checking of input values at time of
               input shall be provided.

5.4.2.1.6      The capability to save input profile for future use shall be
               provided.

5.4.2.1.7      Foreground and background job processing.

5.4.2.1.8      The capability to abort a job anytime shall be provided.

5.4.2.1.9      The capability to concurrently process jobs for multiple
               vehicles shall be provided.

5.4.2.1.10     The process shall notify the operator of processing.

5.4.2.1.11     The option shall be provided to save display results in a file.

5.4.3          ATTITUDE PROCESSING

5.4.3.1        Functional Description

               The Attitude processing subfunction is responsible for
               calculating and maintaining attitude calibration coefficients and
               calculating predicts. The prediction process is used to generate
               sensor predicts based on a sun nadir steering orbit and the
               ephemeris of the sun and earth. Attitude calibration function
               determines the calibration coefficients based on telemetry data
               and the predicted sensor values.

5.4.3.2        Attitude Prediction/modeling

5.4.3.2.1      Three axis control shall be modeled based on a Sun/nadir AOCS
               system.

5.4.3.2.2      Momentum control shall be modeled.

5.4.3.2.3      Omni antenna visibility predicts shall be modeled.

5.4.3.2.4      Sun Sensor(s) shall be modeled.

5.4.3.2.5      Earth Sensor(s) shall be modeled.
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5.4.3.2.6      Solar panels and their relationship to the Sun shall be modeled.

5.4.3.2.7      Earth and sun out of view of respective sensors times shall be
               calculated.

5.4.3.2.8      Sun or moon intrusion into field of view of earth sensors shall
               be modeled.

5.4.3.2.9      Attitude prediction shall be accurate such that it shall be
               possible to predict at all times the absolute location on the
               surface of the earth of each of the payload spot beams, to an
               accuracy corresponding to a halfcone angle, as seen from the
               spacecraft, of less than 0.4 degrees (3 sigma) during normal mode
               operations for a prediction interval of 48 hours.

5.4.3.2.10     Appropriate provisions shall be made allowing recovery from S/C
               safe mode within a reasonable amount of time.

5.4.3.3        Attitude estimation/calibration

5.4.3.3.1      Calibration values shall be calculated as necessary to meet the
               prediction requirement of 5.4.3.2.9 above.

5.4.3.3.2      Earth Sensor.

5.4.3.3.3      Sun sensor.

5.4.3.3.4      Hemispherical Resonating Gyro.

5.4.3.3.5      Magnetic torque.

5.4.3.4        Attitude Processing HMI requirements.

5.4.3.4.1      The user shall be permitted to select measurement data.

5.4.3.4.2      Processing shall use only data from active sensors.

5.4.3.4.3      The user shall be permitted to specify de-weighting coefficients.

5.4.3.4.4      Display initial user inputs, intermediate results, and final
               results as alphanumeric displays.
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                                       26
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                                                    Contract No. ICOO/95-1002/NR
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5.4.4          Orbit

5.4.4.1        Functional Description

               The Orbit processing subfunction is responsible for the
               calculation of state vectors and the propagation of ephemeris and
               events. Tracking data, range data, user inputs and orbit history
               are used in the calculations. A covariance analysis capability is
               provided to aid in analyzing and calibrating the process. The
               orbit propagation process generates ephemeris data for each
               vehicle and also calculates various user selected events during
               the propagation. The events which are predicted include rise and
               set times and station visibilities, crossing times for chosen
               latitudes, and eclipse events.

5.4.4.2        Orbit Determination Requirements

5.4.4.2.1      The orbit state shall be calculated from any combination of real
               time generated track and range data.

5.4.4.2.2      Orbit determination shall provide the accuracy necessary to meet
               orbit propagation performance requirements.

5.4.4.2.3      Estimate orbit parameters.

5.4.4.2.4      Estimate drag parameters.

5.4.4.2.5      Estimate duration and instantaneous maneuver parameters.

5.4.4.2.6      Estimate out-gassing.

5.4.4.2.7      Estimate solar and microwave radiation.

5.4.4.2.8      Estimate covariance.

5.4.4.2.9      Compute station rise and set accounting for constraints and time.

5.4.4.2.10     Eclipse events shall be predicted.

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GCE Technical Specification                                            Exhibit F
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5.4.4.3        Orbit Propagation and Event Generation.

5.4.4.3.1      The capability shall be provided to propagate the vehicle orbit
               state vector forward and backward to user specified times,
               accounting for maneuvers.

5.4.4.3.2      Accuracy of the propagated orbit shall meet the pointing accuracy
               requirement of the ground antenna for satellite tracking and link
               acquisition specified in requirement 5.6.2.2.5 of this
               specification.

5.4.4.3.3      Accuracy of the propagated orbit shall meet attitude
               prediction/calibration accuracy requirements as defined in
               section 5.4.3 of this specification.

5.4.4.3.4      Accuracy of the propagated orbit shall meet the orbit station
               keeping accuracy requirements defined in section 5.4.7 of this
               specification.

5.4.4.3.5      Simulated track measurement data (range, az, el, range rate) for
               user specified state vectors and sites shall be generated.

5.4.4.4        Covariance Analysis

5.4.4.4.1      Covariance analysis capability shall be provided.

5.4.4.5        Orbit Processing HMI

5.4.4.5.1      The user shall be able to edit track measurement data.

5.4.4.5.2      The user shall have the capability to input an initial state
               vector for orbit determination and propagation.

5.4.4.5.3      The user shall have the capability to input start and stop times
               for propagation.

5.4.4.5.4      Display propagated orbit states.

5.4.4.5.5      Display events analysis results.

5.4.4.5.6      Display track measurements data.

5.4.4.5.7      Display estimated parameters.

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GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR

5.4.5          INJECTION

5.4.5.1        Functional Description

               The Injection process is used during pre launch activities to
               design an injection sequence which minimizes the use of fuel and
               places the satellite on station in the time supplied by the user.
               The Injection process models the vehicle attitude during
               injection and calculates events such as eclipse times, station
               visibilities and sensor predicts. The user supplies an initial
               guess and the process iteratively optimizes the sequence based
               upon vehicle and station constraints.

5.4.5.2        Injection Processing Requirements

5.4.5.2.1      None.

5.4.6          MANEUVER

5.4.6.1        Functional Description

               The Maneuver processing subfunction calculates, evaluates, and
               verifies maneuver sequences. It also generates a maneuver
               sequence PROC used by On-line to execute the maneuver. The
               maneuvers modeled by this process include orbit delta velocity
               changes, such as delta eccentricity, delta phasing, and delta
               inclination changes. The vehicle thruster control system model is
               used to produce a maneuver sequence which will minimize the use
               of fuel. The sequence is evaluated and verified against vehicle
               constraints. When the maneuver sequence is verified, a maneuver
               PROC is generated for use by On-line to generate a command
               sequence which is uplinked to the satellite for execution.

5.4.6.2        Maneuver Planning and Prediction

5.4.6.2.1      Maneuvers shall be planned to accomplish a user specified orbital
               adjust delta velocity.

                                       29
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.4.6.2.2     The reaction control system shall be modeled including thruster
              orientation, changing thruster impulse, changes to tank pressure,
              tank temperatures, and propellant use from each tank.

5.4.6.2.3     A Maneuver time shall be computed to satisfy specified secondary
              effects on orbital parameters.

5.4.6.2.4     The process shall check for eclipse of, or solar/lunar intruding
              into the trigger references and attitude limit check sensors.

5.4.6.2.5     The orbit keeping maneuver shall be designed such that it is
              possible to predict at all times the absolute location on the
              surface of the earth of each of the payload spot beams to an
              accuracy to a halfcone angle, as seen from the spacecraft, of less
              than 0.45 degrees (3 sigma) during thruster maneuvers.

5.4.6.3       Maneuver Command Generation

5.4.6.3.1     The maneuver command inputs for the real time shall be generated.

5.4.6.4       Maneuver Processing HMI

5.4.6.4.1     For maneuver planning and maneuver prediction the user shall be
              allowed to enter maneuver attitude and orbit.

5.4.6.4.1     For maneuver planning and maneuver prediction the user shall be
              allowed to enter maneuver attitude and orbit.

5.4.6.4.2     For maneuver planning and maneuver prediction the user shall be
              allowed to enter maneuver ignition time, maneuver midpoint, or
              maneuver window.

5.4.6.4.3     For maneuver planning and maneuver prediction the user shall be
              allowed to enter vehicle constraints.

5.4.6.4.4     For maneuver planning and maneuver prediction the user shall be
              allowed to enter pulse widths.

5.4.6.4.5     For maneuver planning and maneuver prediction the user shall be
              allowed to enter propellant system configuration.

5.4.6.4.6     For maneuver planning and maneuver prediction the user shall be
              allowed to enter use of either a finite-burn or impulsive-burn
              model.

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5.4.6.4.7     The user shall be allowed to enter direction of desired secondary
              orbit effects or to minimize change in specified orbital
              parameters.

5.4.6.4.8     The center of mass shall be displayed.

5.4.6.4.9     The maneuver delta covariance matrix shall be displayed.

5.4.6.4.10    The Inertia values shall be displayed.

5.4.6.4.11    Total vehicle mass shall be displayed.

5.4.6.4.12    Display premaneuver, postmaneuver and delta orbital elements

5.4.6.4.13    Display premaneuver, postmaneuver and delta mass properties

5.4.6.4.14    Display delta velocity.

5.4.6.4.15    Display maneuver propellant usage for a single event.

5.4.6.4.16    Display constraint violation.

5.4.7         ORBIT KEEPING

5.4.7.1       Functional Description

              The Orbit Keeping subfunction generates orbit changes to keep the
              vehicle within a tolerance value and phasing value with respect to
              the other vehicles in the orbit plane.

5.4.7.2       Orbit Keeping Requirements

5.4.7.2.1     An orbit keeping maneuver strategy shall be generated based on
              user inputs to achieve a user specified drift rate.

5.4.7.2.2     Maintain specified longitudinal limits for a maximum time span or
              user specified time span of a shorter duration.

5.4.7.2.3     The process shall compute an orbit keeping maneuver strategy.

5.4.7.2.4     The process shall compute an orbit keeping maneuver strategy to
              maintain inclination of 45 degrees +/-0.5 degrees.

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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

5.4.7.2.5   The process shall compute an orbit keeping maneuver strategy which
            will maintain the inclinations of spacecraft in a given plane to
            within +/- 0.05 degrees of each other.

5.4.7.2.6   The process shall compute an orbit keeping maneuver strategy which
            maintains the RAAN of the two orbital planes separated by 180
            degrees +/- 0.5 degrees.

5.4.7.2.7   The process shall compute an orbit keeping maneuver strategy which
            maintains the RAAN of the spacecraft in a given plane to within +/-
            0.1 degree.

5.4.7.2.8   The process shall compute an orbit keeping maneuver strategy which
            maintains the phase offset between active in-plane spacecraft to
            within +/- 0.5 degrees.

5.4.7.2.9  The process shall compute an orbit keeping maneuver strategy which
            maintains the phase offset between equivalent spacecraft in the two
            planes to 0 degrees +/- 0.5 degrees. As a spacecraft passes through
            the ascending node of one plane, the equivalent spacecraft is
            passing through the ascending node of the other plane.

5.4.7.2.10  The process shall compute an orbit keeping maneuver strategy to
            maintain the required altitude +/- 40 km.

5.4.7.2.11  Maneuvers shall be timed to minimize any loss of traffic-carrying
            capacity.

5.4.7.3     Orbit Keeping HMI

5.4.7.3.1   The user shall have the capability to input start and stop times
            for propagation and orbit keeping goals and constraints.

5.4.7.3.2   Display propagated orbit states and maneuver strategy.

5.4.7.3.3   Display analysis results.

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

5.4.8        PROPELLANT BUDGETING

5.4.8.1      Functional Description

5.4.8.2      Requirements

5.4.8.2.1    A capability to track fuel usage and predicted fuel usage versus
             budgets for each satellite shall be provided.

5.4.9        LONG TERM PLANNING

5.4.9.1      Functional Description

             Long Term Planning is used to aid the planner is developing a long
             term orbit keeping strategy and in predicting the usage of
             propellant over the 12 year life of the satellites. The process
             uses an orbit propagator to propagate the satellite orbits over a
             12 year life and predict events such as eclipses and their start
             and stop times. The planner uses the results to predict when orbit
             keeping maneuvers should be executed and the amount of fuel used
             over the life of the satellite.

5.4.9.2      Long Term Propagation

5.4.9.2.1    Propagate vehicle orbit for a period up to 10 years incorporating
             the orbit keeping plan maneuvers.

5.4.9.3      Reference Data Generation

5.4.9.3.1    Calculate delta velocity required.

5.4.9.3.2    Predict earth and lunar eclipse events.

5.4.9.3.3    Predict start and end day for each earth and lunar eclipse season
             for 10 years, while accounting for orbit keeping plan.

5.4.9.3.4    Calculate maximum earth and lunar eclipse duration for each
             eclipse season.

5.4.9.3.5    Calculate earth and lunar eclipse duration profile for an entire
             eclipse season.

________________________________________________________________________________
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                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR
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5.4.10        EVALUATION

5.4.10.1      Functional Description

5.4.10.2      Evaluation Processing Requirements

5.4.10.2.1    Process stored raw and processed telemetry data created by on-line
              and generate statistics data for user-specified time span and
              LRVs.

5.4.10.2.2    LRV statistics include minimum value, maximum value, average
              value, and standard deviation.

5.4.11        PLANNING & SCHEDULING

5.4.11.1      Functional description

              The Scheduling function is a workstation based software function
              that will provide automatic generation of a contact schedule for
              up to 12 satellites and necessary ground resources. A contact plan
              containing ground and satellite commanding and ranging activities
              can be produced. This contact plan can contain text describing
              required procedures for each activity.

5.4.11.2      General requirements

5.4.11.2.1    The automation level of the software shall be sufficient such that
              one day shift analyst can perform the scheduling function.

5.4.11.3      Activity needs schedule

5.4.11.3.1    An "activity needs schedule" can be automatically generated based
              on a modifiable set of periodic activities and manually entered
              activities for each satellite.

5.4.11.4      Satellite/remote site visibility

5.4.11.4.1    A schedule of ground site/satellite visibility can be generated
              automatically based on orbit states and site locations and
              constraints.

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                                       34

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                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR
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5.4.11.5     Resource availability

5.4.11.5.1   Resource availability (antennas, RF, baseband units, etc) as a
             function of time may be input and maintained.

5.4.11.6     Contact scheduling

5.4.11.6.1   Contact activities may be manually entered and checked for
             visibility and resource availability.

5.4.11.6.2   Contact priorities may be entered as a function of satellite and/or
             contact activity type.

5.4.11.6.3   Contact schedules may be automatically generated based on the
             activity needs schedule, visibilities, resource availability,
             priorities, and locked in contact activities.

5.4.11.6.4   Automatic scheduling shall schedule contacts with the most
             restrictive resource availability first in order to ensure near
             optimum resource utilization.

5.4.11.6.5   Activities may be manually "locked in" such that they will not be
             moved by an automatic contact scheduling or rescheduling.

5.4.11.6.6   An automatic scheduling execution for 12 satellites and 6 sites
             over 24 hours shall not take more than 120 seconds.

5.4.11.7     Contact plans

5.4.11.7.1   Contact plans may be produced by automatically and/or manually
             attaching text procedures associated with the scheduled activities
             to the contact schedule.

5.4.11.7.2   The activities plan(s) may be output to the on-line satellite and
             ground control functions for display and execution.

5.4.11.8     Controls and Displays

5.4.11.8.1   Displays of satellites versus ground site visibilities and
             scheduled contacts.

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                                       35

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
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5.4.11.8.2     Displays of ground sites versus satellite visibilities and
               scheduled contacts

5.4.11.8.3     Display of resource availability schedule.

5.4.11.8.4     Display of "activity needs Schedule".

5.4.11.8.5     Display of contact schedule and associated activity plans
               selectable by ground site or satellite

5.4.12         VISUALIZATION TOOLS

5.4.12.1.1     A capability to provide three dimensional display of INMARSAT-P
               satellites and system shall be provided at the SCC and BCC.

5.5            ON-LINE SOFTWARE (SATELLITE TELEMETRY & COMMAND)
               -----------------------------------------------

5.5.1          FUNCTIONAL DESCRIPTION

               The On-line software is an interconnected set of functions that
               execute in near real time to process telemetry, format and output
               commands and display data.

5.5.2          GENERAL

5.5.2.1        General Requirements

5.5.2.1.1      Perform concurrent contact activities for up to 12 vehicles plus
               a Dynamic Satellite Simulation.

5.5.2.1.2      Support multiple operational databases per vehicle (operational
               and test).

5.5.2.1.3      Recover from a ground segment anomaly or failure recognized by an
               operator and restore processing to a pre-anomaly state within 5
               minutes.

5.5.2.1.4      Notify operator of processing errors during execution.

5.5.2.1.5      Trap processing errors and continue processing without
               interruption.

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                                       36
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                                                    Contract No. ICOO/95-1002/NR
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5.5.2.1.6      Permit starting and terminating a contact at any time.

5.5.2.1.7      Complete contact initiation within one minute including restoring
               execution data from previous contacts.

5.5.2.1.8      Select its processing time reference among operational site or
               Operator modifiable simulation time.

5.5.2.1.9      Store and access all history files and databases without
               prohibiting access to other applications.

5.5.3          SATELLITE TELEMETRY PROCESSING

5.5.3.1        Functional description

5.5.3.2        General requirements

5.5.3.2.1      Select appropriate data input streams based on the selected
               satellite.

5.5.3.2.2      Process up to two telemetry streams per satellite.

5.5.3.2.3      Automatically detect and respond to telemetry format switches.

5.5.3.2.4      Automatically store telemetry processing state periodically.

5.5.3.2.5      Restore the telemetry processing end state at the start of a new
               contact.

5.5.3.2.6      Provide a stored raw telemetry playback mode.

5.5.3.3        Input

5.5.3.3.1      Receive Raw telemetry from the remote processing.

5.5.3.3.2      Input raw telemetry from the raw telemetry file.

5.5.3.4        Decommutate

5.5.3.4.1      Decommutate the normal mode telemetry into raw Last Reported
               Values (LRV'S).

5.5.3.4.2      Decommutate dwell mode telemetry into raw LRV's.

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

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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.5.3.4.3      Decommutate On-board Processor Memory readouts.

5.5.3.5        Engineering unit conversion

5.5.3.5.1      Convert discrete data values into ASCII string based LRV values
               or range.

5.5.3.5.2      Convert analog and 1750a serial data into Engineering units.

5.5.3.6        Monitoring

5.5.3.6.1      Compare discrete data against static or command predict data.

5.5.3.6.2      Compare analog and serial data types to upper and lower limits.

5.5.3.6.3      Compare ram dump to ram image

5.5.3.7        Alarm generation

5.5.3.7.1      Out of limit conditions shall generate alarms if enabled.

5.5.3.7.2      Alarms messages shall contain alarm description and associated
               values and time.

5.5.3.7.2      Global and selective alarm enable and disable shall be provided.

5.5.3.8        Output

5.5.3.8.1      Output processed data to mass storage

5.5.3.8.2      Output raw telemetry to mass storage

                                       38
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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

5.5.4       Satellite Command Processing

5.5.4.1     Functional description

            The command processing function formats the details of satellite
            command, passes the command to encryption processor for encryption,
            and then transfers the command to the communication interface for
            transmission at the remote site.

5.5.4.2     Command formatting

5.5.4.2.1   Convert the engineering unit command inputs from the HMI to the
            satellite binary command structure

5.5.4.2.2   Append routing addresses as necessary based on the desired
            subsystem or unit.

5.5.4.3     Command encryption

5.5.4.3.1   Encrypt the command if in secure mode.

5.5.4.4     Command Verification

5.5.4.4.1   When in VERIFY MODE, verify command received properly prior to
            execution.

5.5.4.4.2   Predict telemetry response for use in limit checking (reference
            5.5.3.6.1).

5.5.4.5     On-board processor command support

5.5.4.5.1   Convert ground time tags to on-board processor clock counts

5.5.4.5.2   Predict time tagged execution and generate alert messages to
            operators.

5.5.4.5.3   Support RAM memory uploads and update ground ram images.

--------------------------------------------------------------------------
                                       39
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GCE Technical Specification
                                                                       Exhibit F
                                                    Contract No. ICOO/95-1002/NR

5.5.4.6    Output

5.5.4.6.1  Direct formatted command output to appropriate comm and baseband unit
           for the selected satellite.

5.5.4.7    Pseudo Telemetry prediction

5.5.4.7.1  Predict telemetry for devices that do not have telemetered data.

5.5.5      ON-LINE HMI (controls & displays)

5.5.5.1    Functional description

           The On-line Human Machine Interface (HMI) provides the displays of
           satellite data and messages such as alarms and notifications. In
           addition the HMI processes mouse and keyboard input to select
           displays and to control the processing including command generation.

5.5.5.2    General requirements

5.5.5.2.1  Alarm monitoring for up to 12 satellites simultaneously at one HMI
           position.

5.5.5.2.2  Control all functions and modes of execution

5.5.5.2.3  Display and data entry shall be in SI units.

5.5.5.3    Control

5.5.5.3.1  A keyboard language for accomplishing functional tasks.

5.5.5.3.2  Current LRV values as commanded input magnitudes.

5.5.5.3.3  Database defined range checking of command input values as time of
           input.

5.5.5.3.4  A scripting PROC capability to perform valid operation functions or
           sets of functions.

5.5.5.3.5  Ability to edit command request sequences before sending

                                       40
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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

5.5.5.4         Command PROC capability provides:

5.5.5.4.1       Conditional branching based on LRV or input values

5.5.5.4.2       Acceptance of numeric, character, or LRV input values

5.5.5.4.3       Arithmetic, Boolean, and functional computation with a library
                of common constants and math functions

5.5.5.4.4       Iteration

5.5.5.4.5       Non-recursive calling of other PROCs.

5.5.5.4.6       Initiation, suspension and abort of PROC processing.

5.5.5.4.7       Operator input prompts.

5.5.5.4.8       Resumption of PROC reprocessing from location within PROC.

5.5.5.4.9       Execution one step at time.

5.5.5.5         Display Capabilities.

5.5.5.5.1       Alphanumeric display of all values related to an LRV.

5.5.5.5.2       Text file display capability provides scroll left/right
                continuous scroll up/down.

5.5.5.5.3       Command history display provides:

5.5.5.5.4       Operator action history display

5.5.5.5.5       Alarm History display of alarms, time tags, source, associated
                values.

5.5.5.5.6       LRV history display provides time order display of converted or
                raw values and time.

5.5.5.5.7       Plots of any LRV Vs time.

5.5.5.5.8       Plots of up to 8 LRVs from dwell telemetry.

5.5.5.5.9       Block diagrams with color coded status tied to current LRVs.

                                       41
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GCE Technical Specification                                           Exhibit F
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

5.5.5.5.10     Display time tagged on-board processor commands including
               scheduled time of execution.

5.5.5.5.11     Display "contact plans" produced by the scheduling function.

5.6            GROUND SYSTEM STATUS AND CONTROL (GSC)

5.6.1          FUNCTIONAL DESCRIPTION

               The Ground Status and Control (GSC) function provides status and
               control of ground station hardware, including baseband equipment,
               RF equipment, antenna control equipment, communication switching
               devices, and redundancy witching devices. GSC provides a
               graphical user interface allowing the operator to status and
               control the ground equipment. It also allows the spacecraft
               real-time software processes to status and control the ground
               equipment via inter-process communication.

5.6.2          GSC PROCESSING REQUIREMENTS

5.6.2.1        General

5.6.2.1.1      The capability to process configuration and status requests for
               up to 12 On-line processes shall be provided.

5.6.2.1.2      All errors, alarms, and messages shall be logged.

5.6.2.1.3      Up to 18 total baseband units at six Remote TT&C sites shall be
               controlled and statused.

5.6.2.1.4      Up to 30 total RF equipment sets at six Remote TT&C sites shall
               be controlled and statused

5.6.2.1.5      Up to 30 total Antenna Control Units (ACU's) at six remote TT&C
               sites shall be controlled and statused.

5.6.2.1.6      Automatic and semi-automatic control based on the data in the
               "contact plan" shall be provided.

                                       42
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GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________
5.6.2.2        Equipment Control

5.6.2.2.1      Control the communication equipment to the remote sites

5.6.2.2.2      Control the baseband unit functions.

5.6.2.2.3      Control the antenna control units including selection of the
               pointing data for the selected satellite.

5.6.2.2.4      Control the RF equipment at the remote sites.

5.6.2.2.5      Antenna pointing data shall be downloaded to Antenna Control
               units with an accuracy of 1/2 beamwidth.

5.6.2.2.6      Select downconverter frequency based on satellite selection.

5.6.2.2.7      Control Ranging process of the baseband units and input range
               data.

5.6.2.2.8      Predict status response from units for status checking.

5.6.2.3        Status

5.6.2.3.1      Status from all ground equipment shall be collected at a periodic
               interval.

5.6.2.3.2      High level summary status shall be calculated for display from
               the corresponding intermediate-level devices.

5.6.2.3.3      High level system device requests shall be translated into low
               level hardware controls.

5.6.2.3.4      Limit checks shall be performed on status values and alarms
               generated for out of limit values.

5.6.2.4        HMI

5.6.2.4.1      All inputs from the user shall be entered via the keyboard or the
               mouse.

5.6.2.4.2      The user shall be able to configure and re-configure ground
               equipment from the HMI
________________________________________________________________________________
                                       43
<PAGE>   341
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.6.2.4.3      The user shall be able to input satellite versus antenna
               selection.

5.6.2.4.4      Equipment diagrams shall be displayed with color coded statuses.

5.6.2.4.5      Alarms shall be displayed.

5.6.2.4.6      System diagrams shall be displayed

5.6.2.4.7      Contact plan shall be displayed.

5.6.2.5        Interfaces

5.6.2.5.1      Configuration and status requests with the On-line software.

5.6.2.5.2      Control and status interfaces with the Baseband units.

5.6.2.5.3      Control and status interfaces with the RF and antenna control
               equipment.

5.6.2.5.4      Contact plan produced by the scheduling activity.

5.7            SIMULATION

(refer to the DSS requirements Appendix of Schedule 1 Part A Technical
specifications and operational requirements)

--------------------------------------------------------------------------------
                                       44
<PAGE>   342
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.8       IOT SUBSYSTEM

5.8.1     FUNCTIONAL DESCRIPTION

          The IOT system will be used to verify that the communications and TT&C
          systems function in orbit as specified by the Technical Specifications
          and Operations Requirements Document. The IOT system shall be used to
          verify the proper configuration and positioning of the communications
          antenna coverage patterns and the key communications subsystems
          parameters including gain, EIRP, pass band frequency response,
          transmission gains, routing functions, transmission quality, G/T and
          frequency accuracy. TT&C subsystem RF equipment operation will be
          verified by measurement of such parameters as telemetry carrier
          frequency, telemetry EIRP, telemetry modulation index and command
          sensitivity.

5.8.2     GENERAL REQUIREMENTS

5.8.2.1   One IOT system will be delivered and installed at a remote TT&C/SAN
          site.

5.8.3     TEST EQUIPMENT

5.8.3.1   T&C performance measurements

5.8.3.1.1 Telemetry carrier frequency

5.8.3.1.2 Telemetry EIRP

5.8.3.1.3 Telemetry modulation index

5.8.3.1.4 Command sensitivity

5.8.3.1.5 Inband spurious signals

5.8.3.1.6 Out of band spurious signals

5.8.3.1.7 Antenna gain variation

--------------------------------------------------------------------------------
                                       45
<PAGE>   343
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.8.3.2       T&C performance verifications

5.8.3.2.1     EIRP minimums

5.8.3.2.2     Frequency stability

5.8.3.2.3     Inband spurious performance

5.8.3.2.4     Out of band spurious performance

5.8.3.2.5     Modulation index

5.8.3.2.6     Performance at minimum specified input power flux density

5.8.3.2.7     Signal rejection performance

5.8.3.2.8     Antenna gain variation is within maximums specified

5.8.3.2.9     Measurements will require post collection corrections to
              compensate for range variation and doppler.

5.8.4         Payload IOT requirements

5.8.4.1       Payload performance measurements

5.8.4.1.1     Transponder Gain

5.8.4.1.2     EIRP

5.8.4.1.3     Frequency response

5.8.4.1.4     Linearity

5.8.4.1.5     Spurious signals

5.8.4.1.6     Channel to beam routing functions

5.8.4.2       Payload Performance determinations

5.8.4.2.1     Antenna pointing accuracy within 0.3 degrees.

5.8.4.2.2     Antenna beam yaw rate less than or equal 0.02 degrees/sec

--------------------------------------------------------------------------------
                                       46

<PAGE>   344
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

5.8.4.2.3    G/T of forward transponders

5.8.4.2.4    Beam congruence within 0.3 degree

5.8.4.2.5    Axial ratio <2 dB

5.8.4.2.6    Cell frequency reuse isolation

5.8.4.2.7    EIRP

5.8.4.2.8    G/T return transponder (multibeam)

5.8.4.2.9    Input flux density

5.8.4.2.10   Gain transfer

5.8.4.2.11   Peak to peak gain over 3 MHz, channel bandwidth and 25 KHz

5.8.4.2.12   Gain steps

5.8.4.2.13   Frequency translation accuracy and frequency stability

5.8.4.2.14   Inband spurious emission

5.8.4.2.15   Out of band emission

5.8.4.2.16   Measurements will require post collection corrections to
             compensate for range variation and doppler.

5.8.4.3      Controls and displays

5.8.4.3.1    Provide Controls and displays as necessary to conduct above tests
             and process results.

5.8.4.3.2    Provide data reduction, trend evaluation, and data presentation
             formats (plots, etc) for easy interpretation.

5.8.4.3.2    Computer and COT's resources

5.8.4.3.3    Provide computers, mass storage, printers, and display equipment
             as necessary to conduct above tests.

________________________________________________________________________________
                                       47
<PAGE>   345
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.8.4.4   External interfaces

          (refer to the INMARSAT-P GCE Interface Requirements Specification for
details of external interfaces)

5.8.4.4.1 IOT interface with a SAN will allow C band signal injection, signal
monitoring, power measurements at the transmitter.

                                       48
<PAGE>   346
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.9       DATABASE

5.9.1     DESCRIPTION

          The following set of data files represents the data required to
          operate the GCE in addition to the previously specified hardware and
          software. The data includes satellite command and telemetry (formats,
          conversions, limits, etc), ground, orbit, attitude, maneuver, and
          system information. In addition, procedures in computer executable
          format (PROC's) to perform satellite and ground configuration
          functions are also provided.

5.9.2     SATELLITE COMMAND DATABASE:

5.9.2.1   command constraints

5.9.2.2   command verification parameters

5.9.2.3   command authentication methods and data

5.9.2.4   command build and transmission authorization criteria

5.9.2.5   command formats

5.9.2.6   description text for each command type

5.9.3     Satellite telemetry database:

5.9.3.1   Frame synchronization data

5.9.3.2   decomm tables

5.9.3.3   measure and conversion coefficients

5.9.3.4   default values

5.9.3.5   On-board processor memory address-parameter data

5.9.3.6   On-board processor memory images

5.9.4     SATELLITE DATABASE

                                       49
<PAGE>   347
GCE Technical Specification                                            Exhibit F
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

5.9.4.1.1      mass properties

5.9.4.1.2      fuel loads

5.9.4.1.3      Thruster data

5.9.4.1.4      Sensor calibration/thermal data

5.9.4.1.5      AOCS models, gains,

5.9.5          Command procedures (PROCs)

5.9.5.1        Satellite operation and IOT

5.9.5.2        Payload Operation and IOT

5.9.5.3        Ground Operation

5.10           QUALITY

               (refer to the INMARSAT-P Ground Control Equipment Product
               Assurance Plan

5.11           DESIGN AND CONSTRUCTION

5.11.1         HARDWARE

               (refer to the INMARSAT-P Ground Control Equipment Product
               Assurance Plan

5.11.2         SOFTWARE

               (refer to the INMARSAT-P Ground Control Equipment Product
               Assurance Plan

5.11.2.1       POSIX compliant code is a design goal.
--------------------------------------------------------------------------------
                                       50
<PAGE>   348
                        CONTRACT NUMBER ICOO/95-1002/NR

--------------------------------------------------------------------------------
                                   EXHIBIT G
                                  GCE PRODUCT
                                 ASSURANCE PLAN
--------------------------------------------------------------------------------

                                 3 OCTOBER 1995

I-CO GLOBAL                                              HUGHES SPACE AND
COMMUNICATIONS                                           COMMUNICATIONS
(OPERATIONS) LIMITED                                     INTERNATIONAL, INC.

------------------------                                 -----------------------
Olof Lundberg                                            Donald L. Cromer
Chief Executive Officer                                  Chief Executive Officer
<PAGE>   349
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                               TABLE OF CONTENTS

Foreword...................................................................... v

1.0 BASIC PROVISIONS.......................................................... 1

  1.1   Program Content....................................................... 1

  1.2   Program Functions..................................................... 1

  1.3   Applicable Documents.................................................. 1

  1.3.1 Government Documents.................................................. 2

  1.3.2 HISD Documents........................................................ 2

2.0 ORGANIZATION AND MANAGEMENT............................................... 2

  2.1 Introduction............................................................ 2

  2.2 Management Responsibility............................................... 3

      2.2.1 Reliability Engineering........................................... 3

      2.2.2 Parts, Materials, and Processes Assurance......................... 3

      2.2.3 Quality Assurance................................................. 3

      2.2.4 Subcontractor Product Assurance................................... 3

      2.2.5 Standard Commercial Test Equipment................................ 4

  2.3 Reviews................................................................. 4

--------------------------------------------------------------------------------
                                       i
<PAGE>   350
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (CONT'D)

<TABLE>
<CAPTION>
<S>  <C>                                                                     <C>
2.4  Audits...............................................................     4
  2.5  Documentation......................................................     4
  2.6  Major Subcontractor Controls.......................................     4
  2.7  Customer Interface.................................................     5
3.0  RELIABILITY PROGRAM..................................................     5
  3.1  Basic Provisions...................................................     5
  3.2  Organization and Management........................................     5
  3.3  Reliability Engineering Assessments................................     6
       3.3.1 Reliability of the Customers Equipment.......................     6
       3.3.2 Analyses.....................................................     6
  3.4  Problem Reporting and Corrective Action............................     6
       3.4.1 Basic Provisions.............................................     6
       3.4.2 Problem Definition and Documentation.........................     6
       3.4.3 Problem Analysis.............................................     7
4.0  QUALITY ASSURANCE PROGRAM............................................     7
  4.1  Basic Provisions...................................................     7
</TABLE>

--------------------------------------------------------------------------------
                                       ii
<PAGE>   351
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (CONT'D)

<TABLE>
<CAPTION>
<S>  <C>                                                                     <C>
4.2  Organization and Management..........................................     7
     4.2.1 Responsibility.................................................     7
     4.2.2 Program Requirements...........................................     7
     4.2.3 Audits/Review..................................................     9
4.3  Procurement Controls.................................................     9
     4.3.1 Responsibility.................................................     9
     4.3.2 Subcontractor/Supplier Evaluation..............................     9
     4.3.3 Procurement Document Review....................................    10
     4.3.4 Source Surveillance/Inspection.................................    10
     4.3.5 Receiving Inspection and Test..................................    10
4.4  Manufacturing Controls...............................................    10
     4.4.1 Fabrication and Assembly Operations............................    10
     4.4.2 Stores Control.................................................    11
     4.4.3 Process Controls...............................................    11
     4.4.4 Process and Personnel Certification............................    11
     4.4.5 Workmanship Standards..........................................    11
     4.4.6 Hardware Configuration Control.................................    12
</TABLE>
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                                      iii
<PAGE>   352
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (Cont'd)

<TABLE>
<CAPTION>
<S>  <C>                                                                     <C>
4.5  Testing and Inspection................................................   12
     4.5.1 In-process Inspection...........................................   12
     4.5.2 Final Test and Inspection.......................................   13
     4.5.3 Test Participation..............................................   13
     4.5.4 Site Installation and Acceptance................................   14
4.6  Nonconforming Article and Material Control............................   14
     4.6.1 Material Review Action and Control..............................   14
     4.6.2 Nonconformance Definitions and Classifications..................   15
     4.6.3 Corrective Action...............................................   16
     4.6.4 Subcontractor Material Review...................................   16
4.7  Measurement Processes and Calibration.................................   17
     4.7.1 Basic System....................................................   17
     4.7.2 Calibration Controls............................................   17
     4.7.3 Subcontractor Controls..........................................   17
4.8  Records and Traceability..............................................   18
     4.8.1 Records.........................................................   18
     4.8.2 Traceability....................................................   18
</TABLE>

--------------------------------------------------------------------------------
                                       iv
<PAGE>   353
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (CONT'D)

     4.9  Inspection and Status Control...................................... 19

     4.10 Packaging, Handling, and Transportation............................ 19

5.0  SOFTWARE QUALITY ASSURANCE.............................................. 19

     5.1  Introduction....................................................... 19

     5.2  Organization and Resources......................................... 20

          5.2.1  Organization................................................ 20

          5.2.2  Personnel................................................... 20

          5.2.3  Other Resources............................................. 20

          5.2.4  Schedule.................................................... 20

     5.3  SQA Program Procedures, Tools, and Records......................... 20

          5.3.1  Procedures.................................................. 21

                 5.3.1.1  Software Quality Planning.......................... 21

                 5.3.1.2  Program Documentation.............................. 21

                 5.3.1.3  Software Quality System Evaluation................. 22

                 5.3.1.4  Software Quality Process Evaluation................ 22

                 5.3.1.5  Software Product Evaluations....................... 22

________________________________________________________________________________
                                       v
<PAGE>   354
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

                           TABLE OF CONTENTS (CONT'D)

          5.3.1.6   Corrective Action.....................................23

          5.3.1.7   Management Reporting..................................24

          5.3.1.8   Certification and Acceptance..........................24

          5.3.1.9   Software Testing......................................25

          5.3.1.10  Reviews and Audits....................................25

          5.3.1.11  Non-Deliverable Software..............................26

          5.3.1.12  Customer Interface....................................26

          5.3.1.13  Tools.................................................26

     5.4  Software Quality Records........................................26

     5.5  Subcontractor/Supplier..........................................26

6.0  PARTS, MATERIALS, AND PROCESSES PROGRAM..............................27

     6.1  Basic Provisions................................................27

     6.2  Parts Selection and Specification...............................27

     6.3  Parts and Materials Handling and Storage........................27

     6.4  Subcontractor Control...........................................27

7.0 CONFIGURATION AND DATA MANAGEMENT.....................................28

----------------------------------------------------------------------------
                                       vi

<PAGE>   355
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (CONT'D)
<TABLE>
<CAPTION>
<S>                                                                       <C>
7.1 Basic Provisions ..................................................... 28

7.2 Management and Organization .......................................... 28

7.3 Configuration Management ............................................. 28

     7.3.1 Configuration Identification .................................. 28

     7.3.2 Configuration Control ......................................... 29

          7.3.2.1 Engineering Change Classification ...................... 29

          7.3.2.2 Requests for Deviations/Waiver ......................... 29

     7.3.3 Configuration Control Board (CCB) ............................. 29

     7.3.4 Configuration Status Accounting and Verification .............. 30

7.4 Data Management ...................................................... 30

     7.4.1 Contract Data Requirements .................................... 30

     7.4.2 Data Control .................................................. 30

     7.4.3 Library ....................................................... 31

7.5 Subcontractor Configuration and Data Management ...................... 31

     7.5.1 Configuration Management ...................................... 31

     7.5.2 Data Management ............................................... 31
</TABLE>
________________________________________________________________________________
                                      vii
<PAGE>   356
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract No. ICOO/95-1002/NR

                           TABLE OF CONTENTS (CONT'D)

8.0  DEFINITIONS............................................................ 31

9.0  ACRONYMS............................................................... 32

                               FIGURES AND TABLES

Figure 1.      Problem Report Form..........................................  8

Table 1.       Hardware Material Review Authority........................... 16

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                                      viii
<PAGE>   357
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

                                    FOREWORD

          This document, the HITC product assurance plan, is a Hughes standard
          plan tailored to meet program requirements. Under its provisions,
          HITC, the Contractor, is fundamentally responsible to the Customer
          for ensuring that all product assurance requirements are met. Product
          Assurance and Quality Assurance requirements will flow down to the
          performing organizations and major subcontractors through the program
          product assurance office. The program office Product Assurance
          function will actively audit and oversee HITC development activities
          and major subcontractors to achieve a cohesive approach to the
          program product assurance processes.

          The baseline design of typical ground support equipment consists of
          readily available, commercially procured equipment wherever
          practical. The equipment selected will evolve from previous programs
          and designs, and will be of proven quality and reliability.
          Activities described in this plan, on a selected basis, such as any
          design analyses, or parts and material selection, are applicable only
          to HITC noble design hardware. As with the procured equipment, the
          designed hardware will be of commercial quality standards. The
          software selected will also evolve from previous programs and will be
          modified or enhanced to meet the program-unique provisions. Design
          standards and controls will be implemented and verified in accordance
          with HITC directives. Specific requirements of the program will be
          incorporated into existing systems and procedures to the extent
          required.

          Performance, product assurance screening, and acceptance criteria
          will flow down via engineering specifications, work authorization
          documents, and program quality requirements issued by the program
          office.

--------------------------------------------------------------------------------
                                       ix
<PAGE>   358
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR
________________________________________________________________________________

1.           BASIC PROVISIONS

1.1          PROGRAM CONTENT

             HITC will conduct, from program inception to installation and
             acceptance of the program equipment, a product assurance effort
             compliant with the provisions of this plan, which will constitute
             the master planning and requirements document for the product
             assurance program. This program comprises hardware and software
             control activities; a reliability assurance program; a parts,
             material, and processes control program; and a configuration and
             data management program. Responsibility within HITC's organization
             for ensuring the application of these disciplines will be assigned
             as prescribed by HITC' management directives.

1.2          PROGRAM FUNCTIONS

             The primary functions of the HITC Product Assurance (PA) program
             will be to:
             1)  Ensure the effective and timely implementation (consistent
                 with the program master phasing schedule) of the tasks
                 prescribed by this plan.
             2)  Define and implement the product assurance tasks and controls
                 required in the design, manufacture, code, installation, and
                 sell-off, and to ensure accomplishment of the mission
                 objectives.
             3)  Ensure early and prompt detection and reporting of actual or
                 potential deficiencies, marginal quality, and trends or
                 conditions that could result in unsatisfactory performance or
                 product quality. Ensure that prompt and effective action is
                 taken to correct such conditions.
             4)  Provide flow-down of program PA requirements to subcontractors
                 and suppliers. Ensure compliance through surveys,
                 surveillance, and source sell-off.
             5)  Provide regular program status reports to program management.

________________________________________________________________________________
                                       1

<PAGE>   359
GCE Produce Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

1.3          REFERENCED DOCUMENTS

             HISD existing policy, manuals, and operating procedures and
             instructions will be used to the maximum extent possible to ensure
             consistent application of sound practices. Program specific
             requirements will be addressed within program instructions. The
             documents, listed below form a part of this Quality Assurance
             Program.

1.3.1        GOVERNMENT DOCUMENTS

             MIL-1-45208A          Inspection System Requirements

             MIL-STD-45662A        Calibration Systems Requirements

             MIL-STD-454M          Workmanship Standards for Electronic
                                   Equipment

             NHB 5300.4 (3a-1)     NASA Hand Book for Soldering

1.3.2        HISD DOCUMENTS

             These manuals and procedures will be revised and updated as
             necessary to reflect the latest processes.

             Manual 605            HISD Division Instructions

             Manual 614            HISD Quality Manual

             SCGPS 32032           Basic Hand Soldering

             SCGPS 22053           Solderless Wrapped Connections

             SCGPS 22093           Hand Crimped Connection

             SCGWI 1.12.04         Handling of Static Sensitive Devices

             SGS OEFIs             Satellite Ground Systems Operating Element
                                   Functional Instructions

--------------------------------------------------------------------------------
                                       2

<PAGE>   360
GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

2.           ORGANIZATION AND MANAGEMENT

2.1          INTRODUCTION

             The product assurance program prescribed by this plan will be
             managed, and responsibilities for implementing its various elements
             will be distributed, as described herein.

             As an integral member of both the Program Management team and the
             contracting organization's Product Assurance department, the
             Product Assurance manager will have direct, independent, unimpeded
             access to program and HISD management.

2.2          MANAGEMENT RESPONSIBILITY

             The Product Assurance manager will ensure that product assurance
             disciplines are effectively utilized in HITC designed hardware,
             software, procured equipment, and installation activities through
             implementation of management procedures.

             Personnel assignments will be tailored to ensure achievement of the
             program milestones and satisfactory completion of each product
             assurance task. Responsibilities and interfaces with other
             organization elements are described below.

2.2.1        RELIABILITY ENGINEERING

             Reliability disciplines will be used in design, procurement,
             manufacturing, and test activities, and an appropriate level of
             analysis will be selected for each program. Reliability engineering
             is a function of Systems Engineering. The systems engineer will be
             responsible for reporting progress to the program office. Results
             of a reliability assessment will be presented at Technical
             Interchange Meetings (TIMs). A problem reporting system will be
             managed by product assurance personnel.

2.2.2        PARTS, MATERIALS, AND PROCESSES ASSURANCE

             HITC's product assurance and engineering personnel will be jointly
             responsible for managing parts, materials, and processes. The
             design engineer will bear primary responsibility for the selection,
             application,

--------------------------------------------------------------------------------
                                       3

<PAGE>   361
GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          specification, and qualification of parts, materials, and processes.
          The performing organizations will maintain records as appropriate to
          document their involvement.

2.2.3     QUALITY ASSURANCE

          The Product Assurance manager will be responsible for communicating
          the quality requirements to performing organizations and for ensuring
          their compliance. Performing organizations will implement the quality
          assurance requirements of this plan using appropriate quality
          practices, instructions, and procedures.

2.2.4     SUBCONTRACTOR PRODUCT ASSURANCE

          The Product Assurance manager will review subcontractor procurement
          specifications and statements of work for communication of appropriate
          requirements. Subcontractor evaluation and approval will be performed
          as a coordinated effort among Product Assurance, Systems Engineering,
          and the Materiel departments.

2.2.5     STANDARD COMMERCIAL TEST EQUIPMENT

          Standard commercial test equipment procured for integration with
          Contractor-designed hardware for the program will be subject to count
          and damage acceptance inspection. Functional acceptance will be
          performed as required by routing it through our local calibration
          laboratory.

2.3       REVIEWS

          The Product Assurance manager will provide periodic product assurance
          program reviews to assess program progress and status. The Customer
          will be invited to participate in these reviews.

          Minutes including action items will be published within 5 working days
          of the review. Minutes will be furnished to all attendees and to the
          Customer Product Assurance (PA) representative.

--------------------------------------------------------------------------------
                                       4
<PAGE>   362
GCE Product Assurance Plan                                           Exhibit G
                                                  Contract No. ICOO/95-1002/NR

2.4         AUDITS
            ------

            Systematic audits of systems, procedures, and operations designed to
            implement HITC practices and program requirements will be conducted
            in accordance with HITC's existing directives. Program office
            product assurance personnel will ensure that product assurance
            requirements are being met by regularly reviewing and auditing
            hardware, software, and its associated documentation. The results
            of audits will be reported to associated program management,
            together with recommendations for correction of noted deficiencies.
            Management action will be taken, and follow-up reviews held, to
            ensure that adequate corrections are implemented.

2.5         DOCUMENTATION
            -------------

            Product assurance documentation generated under the contract will
            be identified as being program unique and will be maintained and
            retrievable from the local data bank.

2.6         MAJOR SUBCONTRACTOR CONTROLS
            ----------------------------

            Major subcontractors will be required to maintain a well-defined
            program of product assurance controls during the design,
            development, procurement, fabrication, inspection, testing,
            handling, storage, and shipment of deliverable hardware. Major
            subcontractors will be required to implement program plans
            consistent with the basic requirements of this plan. Requirements
            appropriate to the items being procured will be defined jointly by
            the product assurance manager and the responsible engineer.
            Documentation requirements will be controlled by specific
            subcontractor data requirements lists (SDRLS).

            Surveillance of subcontractor operations will be performed to
            identify potential problems for resolution and the status of those
            problems will be given to the program office. Survey results will
            be evaluated and, where appropriate, utilized during follow-up
            audits of the subcontractor to ensure proper action.

----------------------------------------------------------------------------
                                       5

<PAGE>   363
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

2.7       CUSTOMER INTERFACE

          Customer product assurance representatives will have access to
          evaluate those facilities, operations and activities which implement
          Inmarsat P requirements for hardware and software. Access will include
          program related documentation. The Customer will receive timely
          notification of progress review and coordination meetings and will be
          invited to attend.

3.        RELIABILITY PROGRAM

3.1       BASIC PROVISIONS

          HITC will conduct a program of reliability assurance activities for
          contractor-designed hardware to ensure that the reliability
          requirements of the technical specification are met during all phases
          of the program. The activity during the design and development process
          will consist primarily of determining hardware reliability,
          maintainability, life-time characteristics, and of participating in
          design reviews. Emphasis during the hardware manufacturing and test
          phases will be primarily directed towards managing the failure
          reporting, analysis, and corrective action systems.

          COTS hardware reliability, maintainability, life-time characteristics
          will provided by the manufacturer, if available.

3.2       ORGANIZATION AND MANAGEMENT

          Systems Engineering personnel assigned to the program will be
          responsible for ensuring that reliability disciplines are effectively
          utilized in the design, manufacturing, and test activities. Completion
          of reliability assessment tasks and associated documentation will be a
          joint responsibility of Systems Engineering and the responsible Design
          Engineer. Systems Engineering will perform subsystem and system level
          analyses.

          Systems Engineering will maintain cognizance of the status of the
          reliability assessment program by direct coordination and/or by
          requiring meetings at which the reliability program status is
          presented.

________________________________________________________________________________
                                       6

<PAGE>   364
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          Results of the reliability assessment of MTTR and availability will be
          presented at design reviews.

3.3       RELIABILITY ENGINEERING ASSESSMENTS

3.3.1     RELIABILITY OF THE CUSTOMER'S EQUIPMENT

          The reliability assessment of designs will be based on existing
          documentation to the greatest extent possible to preclude duplication
          of analyses and reporting. These existing analyses will be reviewed by
          the assigned Systems Engineering personnel to verify that the
          environment and electrical stress conditions cited are valid for the
          program. These reliability assessment data will be summarized at the
          appropriate Technical Interchange Meeting (TIM).

3.3.2     ANALYSES

          The analyses will constitute evidence of compliance with the
          requirements and will establish criteria for the selection of
          components and redundancy. The mathematical method used will be
          presented in sufficient detail to make the analysis techniques clear.
          Predictions will be performed as part of the design process to provide
          assurance that the program will meet its availability success
          criteria. Predictions will employ the manufacturer's predictions for
          commercial equipment or parts count methods, based on the mathematical
          model of the equipment under consideration and derived from the
          success criteria, failure mode evaluation, and mean time to
          repair/replace (MTTR) data.

          Analyses will ensure balanced availability of the system's elements
          consistent with the objectives. The predictions will be based upon
          similar equipment reliability, complexity, operational and functional
          considerations, parts count data, and MTTR.

3.4       PROBLEM REPORTING AND CORRECTIVE ACTION

3.4.1     BASIC PROVISIONS

          A formal, controlled problem reporting, analysis, and corrective
          action system will be implemented. This system will be designed to
          maximize product reliability and quality through effective analysis
          and feedback of problems during the formal testing of subsystems and
          system test.

--------------------------------------------------------------------------------
                                       7
<PAGE>   365
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------

          Product Assurance has the overall responsibility for implementing the
          corrective action system.

3.4.2     PROBLEM DEFINITION AND DOCUMENTATION

          A problem is defined as the occurrence of anomalous performance
          resulting from any condition causing the article under test to deviate
          from the performance specified as acceptable by the system
          specification and the applicable test procedure. Problems will be
          documented on a Problem Report Form (PRF), such as that presented in
          Figure 1.

3.4.3     PROBLEM ANALYSIS

          Problem analysis considers physical conditions prior to failure,
          sequence of the test being performed, and symptoms at the time of
          occurrence. Evaluation of each problem will be documented in detail by
          the responsible engineer on the Problem Report Form.

4.        QUALITY ASSURANCE PROGRAM

4.1       BASIC PROVISIONS

          HITC will conduct a comprehensive program of quality assurance
          activities that ensure that quality is built into the product. The
          quality assurance function will establish and ensure the proper use of
          systems that facilitate the close teamwork between engineering,
          manufacturing, material, and quality assurance personnel that is
          necessary to implement the quality assurance program successfully.

4.2       Organization and Management

4.2.1     RESPONSIBILITY

          The quality assurance effort will be administered in accordance with
          HITC's requirements early in the contract phase. These activities
          include issuance of necessary directives, instructions, procedures,
          and specifications to properly implement program requirements into
          the internal organization and extending into supplier and major
          subcontractor organizations.

                                       8
<PAGE>   366
GCE Product Assurance                                                 Exhibit G
                                                   Contract No. ICOO/95-1002/NR
-------------------------------------------------------------------------------
4.2.2     PROGRAM REQUIREMENTS

          HITC's Quality Assurance organization will have the responsibility for
          ensuring conformance to program specifications and requirements.
          Quality Assurance will:

          1.   Assure implementation of program quality requirements throughout
               contractual performance at HITC and its subcontractors.

          2.   Perform supplier surveys, procurement document review, and source
               surveillance and inspection as required to ensure conformance to
               specified requirements.

          3.   Perform receiving inspection and test incoming supplies as
               required.

                                       9
<PAGE>   367
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

             LAST MODIFICATION     /    /                  PRF NO.
________________________________________________________________________________

                              PROBLEM REPORT FORM
________________________________________________________________________________

TITLE __________________________________________________________________________

PRIORITY ( ) __________________________ STATUS (    ) __________________________

PROJECT _______________________________ CLASSIFIED ___________ YES __________ NO

DATE OCCURRED ___________________ TIME _________________ REPT

BY _____________________________________

IMPACT ___________ DELIVERABLE? (Y/N) _______ CHANGE CLASS __________

PHONE NO. _____________________________

________________________________________________________________________________

TYPE ____

HW _____ SW ______ FW _____ DOC _______ PROC _______

TRACKING FAILED ITEM _______________________________

REV/VERSION ________________________________________

CI/COMPUTER ID _____________________________________

OS/LEVEL ___________________________________________

LOC/TAPE NO. _______________________________________

TEST PHASE _________________________________________

REFERENCE DOCUMENTS

IDC ___________________________________

ECR ___________________________________

RQMT __________________________________

OTHER _________________________________

FROM __________________________________

TO ____________________________________

DISPOSITION

CEL ___________ SSEL _____________

GML ______________________________

ROOT _____________________________

OTHER ____________________________

DISPOSITION RE ___________________

HOURS ____________________________

                                       10
<PAGE>   368
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

|------------------------------------------------------------------------------|
|PROBLEM                                                                       |
|                                                                              |
|DESCRIPTION                                                                   |
|           -------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|-----------------------------------                                           |
|                                                                              |
|ACTION                                                                        |
|                                                                              |
|REQUIRED                                                                      |
|       -----------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|-----------------------------------                                           |
|                                                                              |
|HISTORY                                                                       |
|      ------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|-----------------------------------                                           |
|                                                                              |
|FINAL                                                                         |
|                                                                              |
|DISPOSITION                                                                   |
|           -------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|------------------------------------------------------------------------------|
|                                                                              |
|-----------------------------------                                           |
|                                                                              |
|------------------------------------------------------------------------------|
|DUE DATE                   CPC/UNIT                MODULE/SUBSYSTEM           |
|                                                                              |
|-----------------          -----------------       -------------------------  |
|------------------------------------------------------------------------------|
|VERSION FIXED              CMO APPROVED            Q.A. APPROVED              |
|                                                                              |
|-----------------          -----------------       -------------------------  |
|                                                                              |
|CLOSED BY                  DATE CLOSED             FINAL APPROVAL             |
|                                                                              |
|-----------------          -----------------       -------------------------  |
|------------------------------------------------------------------------------|
                         FIGURE 1. PROBLEM REPORT FORM

--------------------------------------------------------------------------------
                                       11
<PAGE>   369
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          4.   Perform in-process, assembly, and final inspection.

          5.   Control non-conforming supplies.

          6.   Assure calibration of all measuring and test equipment used for
               deliverable hardware acceptance.

          7.   Provide surveillance, as necessary, for the testing of
               deliverables.

          8.   Supply Engineering with quality data through the Vendor
               Information System (VIS).

          9.   Maintain records of and identify trends in incoming inspection.

          10.  Support consent-to-ship meetings as required.

          11.  Ensure that only calibrated test equipment is being used during
               testing activities.

          12.  Ensure that technicians are current in the special process
               required to carry out their tasks sufficiently.

          4.2.3     AUDITS/REVIEW

            Audits of the quality procedures, inspections, tests, process
            controls, and certifications for contractual conformance will be
            performed during the program as part of the regular Contractor
            quality systems audits. These audits are performed on both a random
            and scheduled basis by Quality Assurance. Program audit results will
            be reported to program management and will include required
            corrective action and follow-up.

4.3         PROCUREMENT CONTROLS

4.3.1       RESPONSIBILITY

            Quality Assurance will assure that the adequacy and quality of
            materials, articles, and services procured for the program conform
            to engineering requirements.

--------------------------------------------------------------------------------
                                       12
<PAGE>   370
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          Purchased equipment (including computer hardware for which the
          equipment manufacturer provides maintenance and repair support) will
          be procured to commercial quality assurance standards.

4.3.2     SUBCONTRACTOR/SUPPLIER EVALUATION

          HITC will have an established system to evaluate and document each
          prospective supplier or subcontractor. A list will be maintained of
          suppliers who have been approved. Approval will require review of
          supplier facilities and quality management systems If subcontractors
          or suppliers required on the program do not appear on the approved
          supplier list, a supplier survey will be scheduled. Approval to
          proceed with procurement must be approved by the product assurance
          manager, until such supplier appears on the approved supplier list.

4.3.3     PROCUREMENT DOCUMENT REVIEW

          Standard supplier quality requirements to be referenced on procurement
          documents will be used wherever possible. Quality requirements
          peculiar to the program will be included in the program directive
          issued to the quality assurance personnel performing the procurement
          document review.

4.3.4     SOURCE SURVEILLANCE/INSPECTION

          Quality Assurance will impose source inspection or surveillance on
          suppliers when the required verification for conformance can be more
          effectively accomplished at the supplier's facilities. Source
          surveillance is not required on procured articles.

4.3.5     RECEIVING INSPECTION AND TEST

          Parts and materials will be inspected as required upon receipt to
          ensure that requirements of the technical documents and purchase
          orders are met. The amount of inspection or test will be determined by
          the type of product, its end use, the amount of source inspection and
          supplier history. Results of inspections and tests will be recorded on
          quality records.

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

                                       13

<PAGE>   371
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          Non conforming items detected during receiving inspection and test
          will be segregated and submitted for material review action.

4.4       MANUFACTURING CONTROLS
          ----------------------

4.4.1     FABRICATION AND ASSEMBLY OPERATIONS

          Material and assemblies will be controlled at all times to ensure that
          inspection status is maintained and hardware quality is not
          compromised. Established controls will include adequate handling and
          packaging of items during all operations. Quality records maintained
          for in-process materials and assemblies will identify the item and
          indicate its inspection, fabrication, and configuration status. The
          completed articles will be identified in accordance with engineering
          requirements. A final inspection and review of documentation will be
          performed to ensure that all required operations and inspections have
          been satisfactorily completed.

          Fabrication, assembly, and rework operations will be performed in
          accordance with work order documentation based on engineering
          requirements. Assembly work order documentation will be screened to
          ensure that the inspections prescribed are adequate to ensure product
          compliance with engineering requirements.

          Approval of work order documentation by Quality Assurance will be
          indicated by the application of an appropriate stamp or signature.
          Quality Assurance personnel will conduct audits of the fabrication and
          assembly areas and planning documents to ensure that operations are
          performed in accordance with established practices.

4.4.2     STORES CONTROL

          Parts and materials will be issued from controlled stores. Stores
          control will include maintenance of traceability, limited shelf life
          material control, and handling of items sensitive to contamination or
          to electrostatic discharge. A status tag or label that indicates
          acceptability and includes the required traceability information will
          be used to provide evidence of acceptance and traceability for parts,
          materials, or assemblies entering a controlled stores status. Periodic
          storeroom surveys by quality assurance personnel will ensure that

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

                                       14

<PAGE>   372
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          adequate measures are taken to protect the product and retain
          traceability.

4.4.3     PROCESS CONTROLS

          Process control requirements and quality assurance provisions will be
          contained in specifications referenced in engineering drawings and on
          manufacturing planning documents. Records will indicate the results of
          inspections and process verifications.

4.4.4     PROCESS AND PERSONNEL CERTIFICATION

          Quality Assurance personnel ensure that processes are approved, that
          equipment operating parameters are satisfactory, that personnel are
          certified when required, and that are controls are established as
          specified.

4.4.5     WORKMANSHIP STANDARDS

          Standards of workmanship will be specified in engineering drawings by
          reference to Contractor, industry, or government documents that
          establish engineering requirements and quality assurance provisions,
          including workmanship criteria. Acceptance criteria will be as
          specified in HITC's standards. Hardware fabricated or assembled will
          be inspected in accordance with the applicable workmanship
          requirements specified in engineering and planning documents. Solder
          workmanship criteria will be defined by contractor process documents
          that reflect the requirements of NHB 5300.4 (3A-1) for soldered
          electrical connections.

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

                                       15

<PAGE>   373
GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

4.4.6        HARDWARE CONFIGURATION CONTROL

             Quality Assurance personnel will support the configuration control
             system during assembly and test by:

             1)  Inspecting hardware against engineering requirements and
                 documentation.
             2)  Administering the material review activities for processing
                 minor waivers.
             3)  Verifying that items of equipment are marked in accordance
                 with engineering requirements.
             4)  Maintaining and issuing status tags/labels for items
                 conforming with engineering requirements.
             5)  Problem Report Forms (PRF) are initiated as required.

--------------------------------------------------------------------------------
                                       16

<PAGE>   374
GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

             After completion of final test and inspections, any replacement or
             parts, rework, or other modifications of the hardware configuration
             will necessitate a reinspection and retest to the extent determined
             necessary by the RE and QA personnel.

             A Physical Configuration Audit (PCA) of deliverable hardware will
             be performed prior to delivery. The PCA will consist of formal
             examination of the "as-built" configuration list of an end item
             assembly against its "as-designed" configuration list on file with
             Configuration Management (CM).

             A Functional Configuration Audit (FCA) will be formal examination
             of test data for functional characteristics of an end item assembly
             to verify that the item has achieved the performance directed in
             its associated specification document using a Specification
             Compliance Matrix (SCM).

             A pre-shipment review will be performed for purposes of verifying
             that the deliverable hardware, software, and related documentation
             is complete and ready to ship. This review will include a PCA and
             FCA of each Hardware Configuration Item (HWCI).

4.5          TESTING AND INSPECTION

4.5.1        IN-PROCESS INSPECTION

             In-process inspections will be performed at preselected points
             during fabrication and assembly operations to verify product
             compliance with requirements. Such inspections will be documented
             on the assembly work orders. Crimped, soldered, and welded
             electrical connections will be inspected to established criteria
             before these connections are covered by subsequent operations.

4.5.2        FACTORY ACCEPTANCE TEST AND INSPECTION

             Test procedures will be specified by the Engineering Team/test
             activity and released prior to final acceptance tests of
             deliverable hardware. These procedures will include descriptions of
             the tests and test conditions and will reflect performance
             parameters listed in the appropriate specification.

--------------------------------------------------------------------------------
                                       17

<PAGE>   375
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

             After completion of tests and inspections, any replacement of
             parts, rework, or other modifications of the hardware
             configuration will necessitate a reinspection and retest to the
             extent determined necessary by the responsible engineer and
             cognizant quality assurance personnel.

             A final inspection and test of deliverable hardware will be
             performed to ensure its readiness for delivery. The Customer will
             be invited to observe.

             A preshipment review will be performed for purposes of verifying
             that the deliverable hardware, software, and related documentation
             is complete and ready to ship. Customer participation and
             concurrence is required.

4.5.3        TEST PARTICIPATION

             Acceptance tests will be conducted in accordance with an approved
             test procedure to determine functional compliance. Subsystem level
             tests will be performed in accordance with the approved test plan
             and its associated, detailed test procedures. Recorded test data
             and/or computer reduced data will become part of the required
             documentation for record retention and will constitute evidence of
             conformance with requirements. Records should be kept at a minimum
             for the life of the contract.

             The program product assurance function, along with program
             management, will specify a level of test coverage that ensures
             that significant elements of the test activities are monitored.
             Test area surveillance will be imposed at all levels of
             qualification and acceptance testing. The test area surveillance
             activity will be accomplished by auditing test operations in
             progress to ensure that:

             1)  Items are properly identified and handled.
             2)  Test procedures are released and being followed.
             3)  Test equipment is calibrated.
             4)  Test data and discrepancies are recorded.
             5)  Problem reports are initiated, if problems occur.
             6)  Test results are within the specified limits.

________________________________________________________________________________
                                       18
<PAGE>   376
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          On an audit basis, this effort, in conjunction with other quality
          assurance activities, will be of sufficient scope to ensure that
          delivered articles conform to requirements.

4.5.4     SITE INSTALLATION AND ACCEPTANCE TEST

          The installation, test, and acceptance at the site constitutes final
          acceptance and is subject to Customer concurrence of the test results.
          This data becomes part of the system acceptance documentation.

          Hardware Quality Assurance (HQA) will perform an identification, count
          and damage assessment on all equipment arriving for Site
          Installation. They will ensure that the equipment is properly
          installed according to Engineering drawings and will support the
          testing and verification process using approved and properly released
          test procedures. They will ensure any discrepancies/concerns are
          documented using the Problem Report Form System and follow-up to
          ensure appropriate closure.

4.6       NONCONFORMING ARTICLE AND MATERIAL CONTROL

4.6.1     MATERIAL REVIEW ACTION AND CONTROL

          The identity and inspection status of all nonconforming items will be
          documented on the appropriate quality record when discovered. The
          purpose of material review action will be to resolve disposition of
          nonconformances.

          Material review action will determine whether the departure is due to
          hardware or documentation discrepancies. All review and closure
          actions will be documented in accordance with existing Contractor
          quality assurance practices.

          Material review actions will be final. Items determined acceptable
          will be processed thereafter as conforming items. The material review
          members and allowable dispositions will be those cited in Table 1.

          Quality Assurance personnel and the responsible engineering activity
          will be authorized to perform material review actions as follows:

________________________________________________________________________________
                                       19
<PAGE>   377
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                  -        Preliminary review will be conducted when a
                           nonconformance is discovered. Workmanship errors and
                           minor out-of-tolerance situations that can be
                           reworked to specification conditions are resolved by
                           authorized personnel through this preliminary review
                           process. Preliminary review nonconformances are
                           processed by a quality assurance engineer.
                           Engineering and/or manufacturing input may be
                           solicited for this action. During preliminary review,
                           it will be determined whether 1) a nonconforming item
                           can be made to conform by rework or standard repair,
                           2) the item should be scrapped (low cost and
                           non-schedule-critical items), or 3) the item must be
                           submitted for higher level material review action.

                  -        Engineering review will apply to all nonconformances
                           not resolved by preliminary review. It will be
                           performed jointly by the responsible quality
                           assurance and engineering representatives who will
                           determine the acceptability of nonconforming items
                           submitted for review. The responsible engineer will
                           document and justify the item's disposition. The
                           quality assurance representative will signify
                           concurrence with the item's disposition on the
                           material review documentation, which can either be a
                           Problem Report Form (PRF) or other suitable form.

--------------------------------------------------------------------------------
                                      -20-
<PAGE>   378
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

4.6.2    NONCONFORMANCE DEFINITIONS AND CLASSIFICATIONS

         The following terms, definitions, and classifications will apply:

         1)       Nonconforming material -- Any item, part, or product with one
                  or more characteristics that depart from the requirements of
                  the contract, specification, drawing, or other approved
                  product description. Functional nonconformances must be
                  processed through the failure reporting system.

         2)       Minor nonconformance -- a departure from the requirements
                  specified in the approved product description that does not
                  adversely affect form, fit, and function. Material
                  nonconformances are processed through material review action.

          3)       Major nonconformance -- A departure from the contractual
                   performance that cannot be eliminated by the Customer's
                   material review actions or reduced to a minor nonconformance
                   by repair. Major nonconformances are processed by submitting
                   a request for deviation/waiver to the Customer for approval.

<TABLE>
<CAPTION>
                  Table 1. Hardware Material Review Authority
-------------------------------------------------------------------------------
Functions              Members                    Disposition
-------------------------------------------------------------------------------
<S>                    <C>                   <C>
Preliminary Review     Quality Assurance     Rework/complete to drawing or
                                             specification requirements (i.e.,
                                             rewire)
                                             Low Cost non-schedule-critical
                                             scrap
                                             Authorized standard repair
                                             Submit to engineering review
-------------------------------------------------------------------------------
Engineering review     Quality Assurance     Rework/complete to engineering
                       Engineering           drawing and specification
                                             requirements
                                             Return to supplier
                                             Repair to authorized instruction
                                             Use as is -- Minor nonconformances
                                             Scrap -- Obviously unit for use or
                                             uneconomically repairable
-------------------------------------------------------------------------------
</TABLE>

--------------------------------------------------------------------------------
                                       21

<PAGE>   379
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract no. ICOO/95-1002/NR

4.6.3     CORRECTIVE ACTION

          Quality assurance personnel will ensure that prompt action is taken to
          resolve nonconformances. Documentation of nonconformances will include
          cause and corrective action when it is beneficial to the program.
          Nonconformance data will be reviewed for trends, corrective action
          assignments will be made, and follow-up action will be taken.
          Management will be kept informed of progress and completion of
          corrective action assignments. Corrective action is taken in
          accordance with HITC policy, as defined in the quality assurance
          instructions.

          Minor nonconformances will not require corrective action unless such
          action is beneficial to the program. It will not normally be taken if:

          1)   The operation is monitored and discrepancies do not exceed the
               established limits.

          2)   A discrepant item/operation has been discontinued or modified
               because of a design change.

          3)   Items are no longer being manufactured.

          4)   An assignable cause cannot be determined.

          5)   No trend indicating a continuing problem is apparent.

4.6.4     SUBCONTRACTOR MATERIAL REVIEW

          HITC may delegate limited material review authority to selected
          subcontractors of complex articles. Subcontractors considered for
          material review authorization will be required to submit written plans
          for material review to HITC for approval prior to implementation.
          Material review requirements for documentation, segregation, review,
          corrective action, and reporting need not be identical but will be
          consistent with those described in this plan.

4.7       MEASUREMENT PROCESSES AND CALIBRATION

4.7.1     BASIC SYSTEM

          HITC's approved and documented metrology system will be in accordance
          with MIL-STD-45662A and administered by HISD Property

--------------------------------------------------------------------------------
                                       22
<PAGE>   380
GCE Product Assurance Plan                                            Exhibit G
                                                   Contract No. ICOO/95-1002/NR

          Organization. This system provides for the selection, approval,
          calibration, maintenance, and control of inspection and test measuring
          equipment.

          HITC will be responsible for maintaining equipment to required
          calibration and measurement standards and for providing traceability
          to approved primary or secondary reference standards. Inspection and
          test measuring equipment used to establish acceptance of articles
          through quantitative measurements will be calibrated periodically in a
          manner that ensures conformance with requirements.

          Test and measuring equipment that is part of the deliverable system
          will be calibrated as required by the responsible engineering
          function.

4.7.2     CALIBRATION CONTROLS

          Unique labels or codes that identify and cite the last and the next
          calibration dates will be affixed to measuring and test equipment.
          Intervals for calibration will depend on use, accuracy, type, and
          other conditions that affect measurement control. Calibration
          intervals will be established for each model or type of equipment.
          Items not used for quantitative measurements will not require
          calibration or indication of calibration status. When the accuracy of
          a piece of equipment is verified by another piece of equipment that is
          fully calibrated, a "no calibration required" (NCR) sticker will be
          used in its identification.

          If the calibration period of an article of test equipment has expired,
          a limited extension of 20% of its certification period may be
          authorized by Quality Assurance.

4.7.3     SUBCONTRACTOR CONTROLS

          The requirements for measuring and inspection equipment control will
          be implemented through the quality requirements invoked in
          procurement, quality, or engineering documents. Such requirements will
          be consistent with the requirements of this plan.

--------------------------------------------------------------------------------
                                       23
<PAGE>   381
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

4.8       RECORDS AND TRACEABILITY

4.8.1     RECORDS

          The following records will be maintained to establish the procurement,
          manufacturing, inspection, and test histories for deliverable articles
          and provide the historical documentation for each item:

          1)   Procurement packages
          2)   Material certifications
          3)   Fabrication quality records
          4)   Traceability data
          5)   Quality records
          6)   Manufacturing and assembly planning documents
          7)   Drawings
          8)   Inspection and test equipment
          9)   Test data sheets
          10)  Material review actions/deviation waivers
          11)  Problem Reports Forms
          12)  Configuration summary lists
          13)  Operations and Maintenance Manuals

                                       24
<PAGE>   382
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          Program Management and contracts personnel are responsible for
          determining how long we should keep records and where they are kept.

4.8.2     TRACEABILITY

          HITC and its subcontractors will maintain information files ensuring
          the traceability of parts and assemblies.

          The traceability system will utilize Contractor or subcontractor
          assigned traceability numbers, purchase order numbers, or quality
          record numbers that are entered on accompanying documentation. Quality
          Assurance personnel will be responsible for auditing the traceability
          system to ensure that hardware configuration and quality records are
          maintained during the manufacturing and test cycles.

4.9       INSPECTION AND STATUS CONTROL

          HISD standard system using Quality Assurance Manual 614, Quality
          Assurance Procedure 19-20-3, Identification of Quality Status will be
          used to control inspection stamps or signatures used to signify
          acceptance of deliverable items or documentation. These controls
          include the issuance, maintenance, and recall of inspection stamps by
          qualified personnel authorized to use them. Stamp possession and
          employee location will be verified periodically by cognizant quality
          assurance personnel.

________________________________________________________________________________
                                       25
<PAGE>   383
GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

4.10         PACKAGING, HANDLING, AND TRANSPORTATION

             Articles are packaged with materials necessary to prevent
             deterioration, corrosion, or damage. Requirements for packaging
             will consider conditions that affect the article while it is 1) at
             a HITC's facility, 2) being transported to its destination, and 3)
             at its destination under specified conditions.

             Provisions are made for special handling of articles sensitive to
             handling damage during fabrication and processing. Special devices,
             boxes, containers, and modes of transportation are used, as
             necessary, to prevent damage due to handling.

             A shipping inspection is performed on all equipment or items
             shipped to the Customer. This inspection verifies that all items
             are secured and identified prior to packaging, and that all
             shipping documents are properly completed.

5.           SOFTWARE QUALITY ASSURANCE

5.1          INTRODUCTION

             This Software Quality Assurance (SQA) Plan applies to the
             deliverable and non-deliverable software to be developed, procured
             or maintained.

             The Plan is the directive implementing the contractual quality
             requirements for software and the HITC Quality requirements. It
             describes the organization, procedures, processes, and products
             used to implement the SQA program activities throughout the
             software life cycle of the program. These tasks include evaluating
             and certifying the software development processes and products,
             identified herein, to verify compliance with contractual
             requirements, and to verify that a high level of quality is being
             designed into the software products. In addition, the quality tasks
             ensure that the software engineering organization complies with
             HITC practices and procedures, as tailored to contractual
             requirements. This plan is written to meet the intent of ISO 9001
             (ISO 9000-3).

             The process defined will be tailored to provide a cost-effective
             approach to ensuring a quality product. This tailored approach will
             be defined in program instructions.

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GCE Product Assurance Plan
                                                                       Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------
5.2          ORGANIZATION AND RESOURCES

5.2.1        ORGANIZATION

             The SQA organization has primary responsibility for the
             implementation, execution and management of the SQA activities
             described in this plan. SQA has an indirect reporting
             responsibility to the Program Manager. The SQA organization is
             independent of the software engineering personnel and reports
             directly to Product Assurance.

5.2.2        PERSONNEL

             The SQA engineer performing the SQA activities has developed the
             skills required for implementing the SQA program. The SQA engineer
             has experience with the engineering methodologies to be applied to
             software development. In addition, the SQA engineer is
             knowledgeable of HITC policies applicable to the specific SQA
             program. The SQA engineer is experienced in Customer and program
             management interface.

5.2.3        OTHER RESOURCES

             SQA interfaces with Software Engineering, Program Management,
             Independent Test, Systems Engineering, and Configuration Management
             organizations by participating in and evaluating the progress of
             software development, test, and maintenance. This participation
             forms a teaming that ensure software quality and control over the
             software and related documentation.

5.2.4        SCHEDULE

             The SQA schedule is prepared upon receipt of funding and a
             schedule. The schedule is updated monthly to track manpower
             performance against planned SQA activities.

5.3          SQA PROGRAM PROCEDURES, TOOLS, AND RECORDS

             SQA has the responsibility during a Program to ensure that the
             software, documentation, and products are developed and maintained

--------------------------------------------------------------------------------
                                       27

<PAGE>   385
                                                                       Exhibit G
GCE Product Assurance Plan                          Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

          in accordance with the contractual and HITC requirements, and meet
          their intended use.

5.3.1     PROCEDURES

          SQA will utilize various procedures, tools, and records to accomplish
          the required tasks associated with ensuring that the software and
          related products comply with the instructions/procedures to be used as
          described in the following paragraphs.

5.3.1.1   SOFTWARE QUALITY PLANNING

          A complete review of the contract is performed by SQA to provide for
          the early identification of contractual and internal Software Quality
          requirements and to plan for the necessary resources and skills
          required to support the contract. This planning ensures the
          establishment of adequate budgets, personnel, and controls for
          contractual and internal compliance. This planning includes the SQA
          tasks of proposal preparation and generation/coordination and
          establishment of SQA program records retention system.

5.3.1.2   PROGRAM DOCUMENTATION

          SQA generates and maintains several types of SQA program documentation
          in support of a program SQA effort. The program documentation includes
          this SQA Plan and Program Instructions. SQA forms are utilized to
          collect data during the SQA activities.

          Program documentation is periodically assessed and realigned as
          necessary, to ensure it continues to reflect requirements.

          The SQA program in integrally tied to the Configuration Management
          (CM) program. SQA reviews the Configuration/Data Management plan to
          assure that it is consistent, meets requirements, and evaluates the
          process to ensure the plan is implemented.

          The quality of any software product is the responsibility of the
          developing organization. The software development process described in
          the Software Development Plan (SDP) assures that quality is designed
          into all software products. The responsible

--------------------------------------------------------------------------------
                                       28
<PAGE>   386
                                                                       Exhibit G
GCE Product Assurance Plan                          Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

          engineering organization verifies that software products meet quality
          requirements by reviewing format, presentation, consistency, and
          completeness. The SQA engineer performs evaluations and witness
          testing defined in this Plan throughout the software life cycle,
          building sufficient confidence that software plans have been met and
          the software performs its required functions. SQA assures that data
          rights and restrictive markings are in accordance with the contract
          and that products are adequately protected for delivery. SQA assures
          that software deliverables are properly packaged and marked for
          shipment to assure the integrity of the deliverable software.
          Certification is documented by affixing a SQA stamp.

5.3.1.3   SOFTWARE QUALITY SYSTEM EVALUATION

          SQA evaluations verify and ensure that the systems used to manage,
          develop and control software and related products exist, are adequate
          and are complied in accordance with the contract and HITC internal
          requirements as documented in the SDP and CM Plan.

          Internal evaluations aide to ensure the necessary tools, resources,
          procedures, and instructions are in place and available for
          development of compliant software and products in accordance with the
          contract, HITC and planning documents. SQA monitors the systems
          throughout the software effort to ensure continued adequacy and
          compliance. The systems used to develop and control the software
          during the various phases of the effort will be evaluated individually
          to ensure compliance with the plan requirements.

          In addition to evaluation of software systems, SQA management ensures
          periodic assessment of the SQA system to determine compliance with and
          continued adequacy of the SQA Plan and related program documentation.
          Evaluation of the SQA system occurs concurrently with evaluations of
          SQA program documentation.

5.3.1.4   SOFTWARE QUALITY PROCESS EVALUATION

          On-going evaluations are conducted of the processed used during the
          design, development and configuration control of the software and
          related products. Evaluations verify and ensure existence, adequacy
          and compliance with the required plans/procedures. These included, but
          are not limited to, Software Engineering, Software Review and

--------------------------------------------------------------------------------
                                       29

<PAGE>   387
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          Audits, Configuration Management, and Storage, Handling, and Delivery.

5.3.1.5   SOFTWARE PRODUCT EVALUATIONS

          SQA performs evaluations of software plans, standards, procedures,
          software technical documentation and code. These evaluations ensure
          products are compliance with contract and HITC requirements, and are
          under configuration control prior to Customer delivery. Products are
          evaluated using the appropriate governing documents. Product
          evaluations ensure compliance with the following basic criteria:

               a. Adherence to the required format and compliance with
               contractual and HITC requirements, applicable document
               descriptions, practices, instructions, etc.

               b. Internal consistency: No two statements in a document
               contradict one another, a given term, acronym, or abbreviation
               means the same throughout: a given item or concept is referred to
               by the same name or description throughout.

               c. Understandability: Documentation promotes understanding by
               applying the rules of grammar, symbols, notation and writing
               style.

               d. Technical Adequacy: The approach is logical, consistent and
               requirements of the program are clear technically and
               practically.

               e. Degree of Completeness appropriate to the phase: Constituent
               parties are present and addressed in adequate details. In process
               reviews evaluate products at varying degree of completeness.

               f. Testability: Documentation identifies requirements that are
               testable so that an objective test can be designed to verify and
               validate the fulfillment of the requirements.

               g. Traceability: All specification, design documentation, code
               and test plans/procedures are reviewed to provide agreement with
               a

--------------------------------------------------------------------------------
                                       30
<PAGE>   388
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

                  predecessor documents to which a hierarchical relationship is
                  required.

5.3.1.6      CORRECTIVE ACTION

             The Corrective Action (CA) process uses a formal corrective action
             reporting system using Problem Report Form (PRF)s and Software
             Problem Report (SPR)s, the PRF is included as an example of the
             forms used to identify all problems/issues detected in the systems,
             processes or products, and provides the mechanism by which
             responsible organizations respond. The system involves ensuring the
             identification and corrections of problems/issues resulting from
             SQA evaluations, reviews, testing, change control activity, or any
             other event throughout the software life cycle. CAs are directed to
             the organization responsible for the product, process, design,
             personnel, or management system contributing to the problem who in
             turn respond and ensure implementation of the necessary corrective
             action. The process includes:

                Analyzing detected problems/issues/discrepancies.

                b. Documenting, classifying, categorizing and prioritizing the
                   problem/issue/discrepancy.

                c. Assigning the responsible individual to determine the action
                   necessary to correct the discrepancy.

                d. Recommending the necessary corrective action.

                e. Reviewing the corrective actions taken for adequacy and
                   implementation.

                f. Verifying through re-evaluation of re-test/regression test
                   the products and/or software to which corrections have been
                   made.

                g. Elevating to appropriate management levels, as necessary,
                   problems, issues/discrepancies which go unresolved or whose
                   degree of impact of severity warrant.

________________________________________________________________________________
                                       31
<PAGE>   389
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

               h.  Providing reports indicating status.

5.3.1.7   Management Reporting

          To ensure that objective evidence exists which substantiates
          performance of software quality activities, SQA documents all
          evaluations performed and/or activities in which SQA participates.
          Each evaluation/activity is summarized and documented on the
          appropriate form. All evaluation reports are maintained in the Quality
          Records.

          Periodically SQA summarizes the overall activities performed and
          submits this to Program Management. These periodic reports provide SQA
          Program and software development management insight into the SQA
          program tasks performed and any issues/concerns related to the
          program.

          These reports are summarized to provide the Quality input for monthly
          status reports and Program Management Reviews.

5.3.1.8   CERTIFICATION AND ACCEPTANCE

          Deliverable software and related documentation is submitted to SQA for
          acceptance/inspection prior to submittal to the Customer. Software and
          documents are reviewed to ensure adequacy and compliance for the
          specific software development life cycle phase at the time of
          submittal and that any previously documented deficiencies have been
          corrected. SQA performs detailed evaluations of products and certifies
          their readiness and compliance for contract delivery.

          SQA documents any discrepancies detected and returns the product to
          the responsible organization for disposition. Open liens are
          established and tracked on CAs. SQA will re-inspect to the extent
          necessary to verify that affected characteristics are in compliance.
          SQA will sign all documentation or stamp all software products.
          Conditional accepted products require action(s) prior to the next
          submittal to the Customer (e.g., review, evaluation, testing,
          corrective action).

          Products with discrepancies which affect the fulfillment of the
          functional performance of the product are rejected by SQA. These

________________________________________________________________________________
                                       32
<PAGE>   390
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          products are not delivered to the Customer until adequate correction
          of the discrepancies is implemented.

5.3.1.9   SOFTWARE TESTING

          SQA monitors informal testing and witnesses formal testing. SQA
          evaluates the independent module-level testing performed during the
          software Development Folder evaluations to assure satisfactory
          completion of the requirements and to ensure the software's readiness
          for qualification testing. SQA ensures that:

               a.   Test Plans/Procedures and specifications are reviewed for
                    compliance with contractual requirement.

               b.   Test and application software is acceptable and under
                    configuration control prior to qualification test activity.

               c.   Test are conducted in accordance with approved test
                    plans/procedures.

               d.   Test Results and reports are compliant and certified as
                    reflecting the actual findings of tests.

               e.   Test-related media and documentation are maintained to allow
                    repeatability of the tests.

               f.   Support software and hardware used to test the deliverable
                    software have been validated prior to use.

               g.   Configuration of the system is verified prior to
                    qualification tests.

5.3.1.10  REVIEWS AND AUDITS

          SQA support all formal reviews and audits required by contract. SQA
          assures that the required products are available for review prior to
          the conduct of the review/audit, that the status and quality
          evaluation of each product is presented, and that action items
          resulting from the review are tracked through to closure.

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                                       33
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GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

5.3.1.11  NON-DELIVERABLE SOFTWARE

          SQA evaluates each non-deliverable software item used in the automated
          design, production, qualification, or acceptance of deliverable
          software or hardware to assure that:

               a.   Objective evidence exists, prior to its intended use, that
                    it performs the required functions.

               b.   It was placed under configuration control prior to its use.

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                                       34
<PAGE>   392
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

5.3.1.12       CUSTOMER INTERFACE

               SQA interfaces with the Customer during reviews, audits mandatory
               inspections, and as needed. The team approach provides for
               continual sharing of information between HITC and Customer. SQA
               ensures documentation, records and any other applicable data is
               available for review upon request and ensures Customer
               notification of products available for inspection when such
               inspection has been identified.

5.3.1.13       TOOLS

               Currently, the tools utilized by SQA consist of the PRF system,
               MAC Schedule, and Fox Pro. PCs and Macintoshes are used to
               automate tasks, as applicable.

5.4            SOFTWARE QUALITY RECORDS

               Software Quality Records are established and maintained in files.
               The results of audits, reviews, and corrective actions documented
               are maintained in the records. Records consist of a collection of
               written data associated with the SQA evaluations which serve as
               objective evidence that all SQA requirements are being or have
               been met.

               Retention of Quality records required per this plan are
               maintained at HITC for the duration of the program and retained
               in storage after completion of the program for a period of at
               least five (5) years after final payment. All records will be
               made available to the Customer for review upon request during
               the period of retention.

5.5            SUBCONTRACTOR/SUPPLIER

               The software subcontractor control portion of the SQA program
               involves newly developed software and Commercial-Off-the-Shelf
               (COTS) software. The process for newly developed software
               includes survey of software subcontractors prior to placement to
               assure appropriate contract requirements are flowed to the
               subcontractor, and to establish receiving inspection criteria,
               and continuous evaluation of subcontractor product and process
               performance to the subcontract. Vendors modifying exiting COTs
               software that will be made available as commercial software after
               delivery to HITC will be controlled by

________________________________________________________________________________
                                       35
<PAGE>   393
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          SQA using a subset of the requirements for newly developed software
          subcontractors. The SQA engineers assure that any deliverable
          commercial software or non-deliverable software is under configuration
          control and meets contractual data rights provisions.

6.        PARTS, MATERIALS, AND PROCESSES PROGRAM

6.1       BASIC PROVISIONS

          HITC will establish provisions for controlling the selection,
          application, and acceptance of all parts, materials, and processes to
          be used in deliverable hardware.

6.2       PARTS SELECTION AND SPECIFICATION

          Parts, materials, and processes will be carefully selected on an
          individual basis that considers all significant factors, including
          suitability, reliability, life, and environmental capability.
          Selection criteria will include known reliability history and previous
          satisfactory supplier usage.

          Electronic and electromechanical equipment will be controlled by
          procurement specifications or standards. Parts will be procured to
          commercial part numbers, military specifications, altered item
          drawings, catalog item number, or specific program requirements
          attached to the purchase order. The responsible engineer will specify
          acceptance requirement for all catalog items whenever such catalog
          item descriptions are inadequate for acceptance inspection.

6.3       PARTS AND MATERIALS HANDLING AND STORAGE

          Parts and materials will be traceable to the applicable manufacturer
          and stored in accordance with requirements for a standard ground
          control equipment program. Parts and materials for deliverable
          hardware will be place in program designated bonded stores.
          Appropriate packaging and electrostatic discharge control measures
          will be taken to protect critical parts and materials during handing.
          Fabricated parts and subassemblies will be placed in kits,
          containers, or protective bags. The adequacy of the packaging,
          handling, and storage procedures and measures taken will be confirmed
          by quality assurance audits.

________________________________________________________________________________
                                       36
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GCE Product Assurance Plan                                           Exhibit G
                                                  Contract No. ICOO/95-1002/NR

6.4       SUBCONTRACTOR CONTROL

          The parts, materials, and processes requirements will be imposed on
          subcontractors having design requirements. Product assurance
          personnel will ensure that these requirements are implemented by
          subcontractors through review of instructions, specifications, and
          statements of work referenced in procurement documents. Subcontractor
          parts, materials, and processes will be reviewed and/or inspected to
          ensure compliance with subcontract requirements.

7.        CONFIGURATION AND DATA MANAGEMENT

7.1       BASIC PROVISIONS

          HITC will establish a configuration and data management program that
          ensures that the configuration and data management functions described
          in this plan are implemented.

          The Program Configuration and Data Management Office (PCDMO) will
          issue program configuration requirements and instructions to
          performing organizations and subcontractors as necessary to coordinate
          the requirements of this plan, or to augment the provisions of the
          plan due to contract-unique requirements. Configuration will be
          maintained through the configuration Control Board (CCB).

7.2       MANAGEMENT AND ORGANIZATION

          The Configuration Management (CM) and Data Management (DM) functions
          will be administered by PCDMO, including configuration management for
          subcontractors.

7.3       CONFIGURATION MANAGEMENT

          The PCDMO will maintain accurate records, release engineering data,
          and document and maintain any changes in process.

7.3.1     CONFIGURATION IDENTIFICATION

          Configuration identification will be defined in specifications and
          drawings developed and maintained by the PCDMO. Each control item will
          be assigned a unique identification number. The PCDMO will

                                       37
<PAGE>   395
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          control and provide for the issuance of all data or hardware
          identification numbers. Subcontractor or vendor items will be
          identified by the manufacturer's part number or by the assigned
          Contractor part number.

          The PCDMO will prepare a specification tree and index, listing the
          design and subordinate design specifications.

          A master index of contract-deliverable control items will be prepared.
          The index will identify control items by drawing (part) number,
          indenture level and quantity required for next assembly. The finalized
          index will serve as the internal baseline configuration document and
          will be released under formal release procedure. Thereafter, the
          master index will be maintained by normal change control procedure.

7.3.2     CONFIGURATION CONTROL

          Specifications, drawings, and software changes will be controlled and
          documented. All proposed changes to contractual specifications will be
          submitted to the CCB for approval.

7.3.2.1   ENGINEERING CHANGE CLASSIFICATION

          The PCDMO will be responsible for processing all engineering change
          requests. To ensure that the extent of analysis and approval action
          required to implement a proposed engineering change is consonant with
          the nature, magnitude, and effect of the change, engineering changes
          will be classified as follows:

          Class I - An engineering change that affects compliance with
          contractual requirements.

          Class II - Any engineering change to which the criteria for Class I do
          not apply.

          The implementation of a Class I change will require formal CCB
          approval. Class I change proposals will be submitted to the Customer
          with appropriate supporting documentation.

          The PCDMO will ensure the proper classification of Class II changes
          through periodic audits.

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                                       38

<PAGE>   396
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

7.3.2.2   REQUESTS FOR DEVIATIONS/WAIVER

          Departures from the requirements specified in engineering
          documentation, without altering the documents, will be accomplished
          through authorized deviation/waiver procedures. The Responsible
          Engineering Authority (REA) is responsible for processing any requests
          for deviations or waivers from a technical requirement. Deviations
          must be authorized prior to hardware manufacture. Waivers will be
          requested for nonconformances found during or after manufacture.
          Deviations and/or waivers that impact the contract will be approved by
          the Customer. Minor waivers will be processed by material review
          action. Requests for deviations or waivers will be classified and
          approved in the same manner as engineering changes.

7.3.3     CONFIGURATION CONTROL BOARD (CCB)

          A program CCB will review and approve or reject all proposed
          hardware/software Class I changes. The program system engineering
          manager, or his designee, will chair the program CCB. The Board will
          be comprised of those individuals who are responsible for the changes
          under review, and will include representatives from Program
          Management, Product Assurance, Systems Engineering, CM, and the REA.
          Representatives from other disciplines with the necessary expertise to
          properly assess the requested change may be required to support CCB
          actions. The CCB will review each significant change following the
          design phase.

          The design phase of each unit will be considered to extend from the
          time of initiation of the contract until one of the following occurs:

          1)   The qualification of the unit's design is completed.
          2)   An acceptance unit is delivered.
          3)   The program manager signifies completion of the design phase.

7.3.4     CONFIGURATION STATUS ACCOUNTING AND VERIFICATION

          A configuration status accounting activity will maintain configuration
          indices and issue configuration reports. Records of the hardware
          configuration (as-built) will be compared to the released
          (as-designed) configuration. The PCDMO will act in conjunction with
          the engineering, manufacturing, and other organizations as required to

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                                       39

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GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

          resolve identified differences between the as-designed and as-built
          configurations.

          The PCDMO will be responsible for issuing the as-designed/as-built
          configuration index.

7.4       DATA MANAGEMENT

          The PCDMO will maintain accurate records of all program-pertinent
          data.

7.4.1     CONTRACT DATA REQUIREMENTS

          The PCDMO will prepare and maintain a data submittal schedule and
          status for all required contract data. PCDMO personnel will direct the
          publication, distribution, and delivery of data, as appropriate.
          Contract deliverable data will be submitted to the Customer through
          the program contract administration function.

7.4.2     DATA CONTROL

          Non-engineering data will be controlled by the assignment of a library
          identifier to all program data. The number assignment and record lists
          will be maintained in the library.

7.4.3     LIBRARY

          The program library will maintain program-generated reports, technical
          data files, program correspondence files, and other program-generated
          documents, as specified by the program management office. Library-
          maintained documents will be readily available upon request.

7.5       SUBCONTRACTOR CONFIGURATION AND DATA MANAGEMENT

7.5.1     CONFIGURATION MANAGEMENT

          Subcontractors will be required to have a configuration management
          system in compliance with HITC's configuration management
          requirements. Subcontractor configuration management operations will
          be subject to Contractor review, approval, and periodic audits.

--------------------------------------------------------------------------------
                                       40
<PAGE>   398
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR
--------------------------------------------------------------------------------

7.5.2    DATA MANAGEMENT

         Subcontractors will be required to have a data management system in
         compliance with HITC's data management requirements. Subcontractor
         configuration management operations will be subject to Contractor
         review, approval, and periodic audits. Subcontractor data requirements
         will be identified through appropriate data requirements lists or
         schedules for each respective Subcontractor.

8.       DEFINITIONS

         Product - An item produced for a Customer or in support of a contract
         defined effort, which may be in the form of hardware, software,
         firmware, handbooks, data, documentation or any combination thereof.

         Software - A combination of associated computer instructions and
         computer data definitions required to enable the computer hardware to
         perform computational or control functions.

         Software Documentation - Technical data or information, including
         computer lists and printouts, which document the requirements, design
         or details of computer software, explains the capabilities and
         limitation of the software, or provides operating instructions for
         using or supporting computer software during the software's operation
         life.

         Baseline - A point during the software life cycle at which a product or
         set of products is formally designated and placed under configuration
         control. Baselines, plus approved changes from those baselines,
         constitute the current configuration identification. Formal and
         informal baselines are defined in the SDP and CM Plan.

         Traceability - A characteristic of a product which provides agreement
         with all predecessor documents to which it has a hierarchical
         relationship. It has five elements: (1) product contract or implements
         all applicable stipulations of the predecessor documents, (2) a given
         term, acronym or abbreviation means the same thing, (3) a given item
         or concept is referred to by the same name/description, (4) all
         material in the successor document has its basis in the predecessor,
         e.g. not untraceable material is introduced, (5) the product and
         document do not contradict one another.

--------------------------------------------------------------------------------
                                       41

<PAGE>   399
GCE Product Assurance Plan                                             Exhibit G
                                                    Contract No. ICOO/95-1002/NR

9.        ACRONYMS

          CM   Configuration Management

          COTS Commercial-Off-the-Shelf

          RE   Responsible Engineer

          HITC Hughes Information and Technology Corporation

          HQA  Hardware Quality Assurance

          HWCI Hardware Configuration Item

          PCA  Physical Configuration Audit

          PRF  Problem Report Form

          SCM  Software Configuration Management

          SDP  Software Development Plan

          SPR  Software Problem Report

          SQA  Software Quality Assurance

          SWCI Software Configuration Item

          TIM  Technical Interchange Meetings

________________________________________________________________________________
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<PAGE>   400

                       EXHIBIT H - BILLING MILESTONE PLAN
                                    08/24/00

<TABLE>
<CAPTION>
                 M/S
              COMPLETION                                                                                               FINAL TOTAL
 M/S #  BUILD    DATE                         BILLING MILESTONE               PROOF OF COMPLETE    FINAL M/S VALUE  CUMULATIVE VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>     <C>   <C>          <C>                                                 <C>                 <C>               <C>

                                                     *
</TABLE>

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                       1
<PAGE>   401

                       EXHIBIT H - BILLING MILESTONE PLAN
                                    08/24/00

<TABLE>
<CAPTION>
                 M/S
              COMPLETION                                                                                               FINAL TOTAL
 M/S #  BUILD    DATE                         BILLING MILESTONE               PROOF OF COMPLETE    FINAL M/S VALUE  CUMULATIVE VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>     <C>   <C>          <C>                                                 <C>                 <C>               <C>

                                                     *
</TABLE>

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                       2
<PAGE>   402

                       EXHIBIT H - BILLING MILESTONE PLAN
                                    08/24/00

<TABLE>
<CAPTION>
                 M/S
              COMPLETION                                                                                               FINAL TOTAL
 M/S #  BUILD    DATE                         BILLING MILESTONE               PROOF OF COMPLETE    FINAL M/S VALUE  CUMULATIVE VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>     <C>   <C>          <C>                                                 <C>                 <C>               <C>

                                                     *
</TABLE>

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                       3
<PAGE>   403

                       EXHIBIT H - BILLING MILESTONE PLAN
                                    08/24/00

<TABLE>
<CAPTION>
                 M/S
              COMPLETION                                                                                               FINAL TOTAL
 M/S #  BUILD    DATE                         BILLING MILESTONE               PROOF OF COMPLETE    FINAL M/S VALUE  CUMULATIVE VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>     <C>   <C>           <C>                                                <C>                 <C>               <C>

                                                     *
</TABLE>

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                       4
<PAGE>   404

                       EXHIBIT H - BILLING MILESTONE PLAN
                                    08/24/00

<TABLE>
<CAPTION>
                 M/S
              COMPLETION                                                                                               FINAL TOTAL
 M/S #  BUILD    DATE                         BILLING MILESTONE               PROOF OF COMPLETE    FINAL M/S VALUE  CUMULATIVE VALUE
------------------------------------------------------------------------------------------------------------------------------------
<S>     <C>   <C>          <C>                                                 <C>                 <C>               <C>

                                                     *
</TABLE>

* Confidential Treatment Requested and the Redacted Material has been
  separately filed with the Commission.

                                       5

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