EXHIBIT 10.44

EXECUTION COPY

CASH COLLATERAL AGREEMENT

     CASH COLLATERAL AGREEMENT dated as of April 2, 2004 (this “Agreement”),
between Space Systems/Loral, Inc. (the “Pledgor”), a corporation existing under
the laws of the State of Delaware and a debtor and debtor-in-possession in a
case pending under Chapter 11 of the Bankruptcy Code in the United States
Bankruptcy Court for the Southern District of New York, and JPMorgan Chase Bank,
a New York banking corporation (the “Bank”).

W I T N E S S E T H

     WHEREAS, pursuant to the Letter of Credit Reimbursement Agreement, dated as
of even date herewith (as amended, supplemented or otherwise modified from time
to time, the “Reimbursement Agreement”), between the Pledgor and the Bank, the
Bank may issue from time to time at the request of, and for the account of, the
Pledgor letters of credit (collectively, the “Letters of Credit”) in an
aggregate face amount not to exceed $20,000,000; and

     WHEREAS, the Bank and the Pledgor agree that a condition to the issuance of
any Letter of Credit is that each such Letter of Credit be secured fully by cash
collateral in accordance with the terms of the Reimbursement Agreement and this
Agreement;

     NOW, THEREFORE, in consideration of the premises, the Pledgor hereby agrees
as follows:

     Section 1. Definitions. Capitalized terms used herein but not otherwise
defined shall have the meaning ascribed thereto in the Reimbursement Agreement.

     Section 2. Pledge and Assignment. As security for the payment of all
Obligations of the Pledgor in respect of the Letters of Credit, under the
Reimbursement Agreement and under this Agreement, the Pledgor hereby irrevocably
assigns and pledges to the Bank, and hereby grants to the Bank, (i) pursuant to
Section 364(c)(1) of the Bankruptcy Code, an allowed superpriority
administrative expense claim in the Bankruptcy Proceeding and (ii) pursuant to
Section 364(c)(2) of the Bankruptcy Code a first priority security interest in
(w) the Pledgor’s account, number 323-351832 (for credit to Space Systems Loral
Inc.), with the Bank at its offices at 270 Park Avenue, 20th Floor, New York, NY
10017 (hereinafter called the “Cash Collateral Account”) which Cash Collateral
Account shall be under the sole dominion and control of the Bank, (x) all cash
from time to time deposited into the Cash Collateral Account, (y) all
Investments (as defined in Section 5 hereof) and certificates and instruments,
if any, from time to time representing or evidencing the Cash Collateral Account
and (z) to the extent not covered by clauses (w) through (y) above, all proceeds
and products of any and all of the foregoing (collectively, the “Collateral”).
Cash, Investments, security entitlements or other investments held or carried in
the Cash Collateral Account shall not be available for use by the Pledgor,
whether pursuant to Section 363 of the Bankruptcy Code or otherwise.

 

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     Section 3. Remedies Upon Default.

     (a) The Pledgor hereby agrees that if any amount payable by it in respect
of the Obligations is not paid when due (whether upon demand, at stated
maturity, by acceleration or otherwise), without further order of or application
to the Bankruptcy Court, the Bank may, by giving five (5) Business Days’ notice
to the Pledgor (with a copy to counsel for the Committee and to the Office of
the United States Trustee for the Southern District of New York): (i) charge,
set-off and otherwise apply all or any part of the Cash Collateral against the
Obligations then due (or which become due) or any part thereof or (ii) exercise
in respect of the Collateral, in addition to other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies of a
secured party under the Uniform Commercial Code in effect in the State of New
York at that time. Without limiting the generality of clause (ii) above, the
Bank may sell, redeem, collect or otherwise realize on the Collateral or any
portion thereof in one or more parcels at public or private sale, at its offices
or elsewhere, for cash, on credit or for future delivery and on such other terms
as the Bank may deem commercially reasonable and without notice or demand except
to the extent required by law (and if any such notice may be required by law the
Pledgor agrees that at least 5 Business Days’ notice shall constitute reasonable
notification). The Bank shall not be obligated to make any such sale of
Collateral regardless of whether notice of sale has been given and may adjourn
any such sale from time to time by announcement at the time and place fixed
therefor and such sale may, without further notice, be made at the time and
place to which it was so adjourned.

     (b) Any cash held by the Bank as Collateral and all cash proceeds received
by the Bank in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of the Bank, then
or at any time thereafter be applied in whole or in part by the Bank without
further order of or application to the Bankruptcy Court against all or any part
of the Obligations then due (or which become due) in such order as the Bank may
elect. Any surplus of such cash or cash proceeds held by the Bank and remaining
after payment in full of all of the Obligations after expiry or termination of
all Letters of Credit shall be paid over to the Pledgor or to whomsoever may be
lawfully entitled to receive such surplus.

     Section 4. Maintaining the Cash Collateral Account. (a) The Pledgor hereby
further agrees that so long as any Letters of Credit or Obligations are
outstanding, it will deposit and maintain at all times an amount in the Cash
Collateral Account equal to (x) in the case of Letters of Credit or Obligations
denominated in Dollars at least one hundred five percent (105%) of the LC
Exposure in respect of such Letters of Credit, and (y) in the case of Letters of
Credit denominated in an Alternative Currency at least one hundred ten percent
(110%) of the LC Exposure in respect of such Letters of Credit.

     (b) If at any time the Collateral maintained in the Cash Collateral Account
in respect of any outstanding Alternative Currency Letters of Credit is less
than 110% of the then Dollar Equivalent of the LC Exposure relating to such
Alternative Currency Letters of Credit, then the Pledgor shall, within three
(3) Business Days after receipt of notice from the Bank delivered in accordance
with Section 3.02 of the Reimbursement Agreement, deposit an amount in Dollars
in the Cash Collateral Account equal to the amount required such that the
Collateral in the Cash Collateral Account is not less than 110% of the Dollar
Equivalent of the LC Exposure

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relating to such Alternative Currency Letters of Credit. In the event that the
Collateral maintained in the Cash Collateral Account in respect of any
outstanding Alternative Currency Letters of Credit is more than 110% of the then
Dollar Equivalent of the LC Exposure relating to such Alternative Currency
Letter of Credit, or in the event that the Collateral maintained in the Cash
Collateral Account in respect of any other Letter of Credit is more than 105% of
the LC Exposure relating to such other Letter of Credit, so long as no Default
or Event of Default has occurred and is continuing, the Bank will, no more often
than one time per each fiscal quarter, upon request from the Borrower, transfer
such excess, as determined by the Bank in Good Faith, to the account of the
Borrower.

     Section 5. Investing Amounts in the Accounts. If requested by the Pledgor,
the Bank will, from time to time, (a) invest amounts on deposit in the Cash
Collateral Account in such deposits, commercial paper and securities (the
“Investments”) as the Pledgor may select and the Bank may approve in its
reasonable discretion and (b) invest interest or dividends paid on the
Investments and reinvest other proceeds of such Investments which may mature or
be sold in new deposits, commercial paper or securities as the Pledgor may
select and the Bank may approve in its discretion. Interest and proceeds which
are not invested or reinvested shall be deposited and held in the Cash
Collateral Account; provided that the Pledgor may at any time or from time to
time request release of such interest and proceeds in accordance with Section 4
hereof. The Bank will only approve Investments in which it can obtain a
first-priority, perfected security interest, which may require the Pledgor to
execute necessary documents.

     Section 6. Representations and Warranties. The Pledgor hereby represents to
the Bank that: (a) the execution, delivery and performance by it of this
Agreement have been duly authorized by all necessary corporate action, and do
not and will not violate any law or regulation applicable to it or will not
violate any law or regulation applicable to it or contravene any loan, credit or
other agreement to which it is a party or by which it or its properties are
bound, (b) it is the legal and beneficial owner of the Collateral free and clear
of any lien, security interest or other charge or encumbrance except for the
security interest created by this Agreement, (c) this Agreement constitutes a
legal, valid and binding obligation of the Pledgor enforceable in accordance
with its terms, except as the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors’ rights generally and by general equitable principles
(regardless of whether the issue of enforceability is considered in a proceeding
in equity or at law), and creates in favor of the Bank a perfected, first
priority security interest in the Collateral, enforceable in accordance with its
terms, (d) no consent of any other person (including, without limitation,
stockholders or creditors of the Pledgor or any of its subsidiaries or of any
parent company of the Pledgor), and no consent, license, permit, approval or
authorization of, exemption by, or registration, filing or declaration with, any
governmental authority is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement by or against the
Pledgor, other than consents that have already been obtained and which remain in
full force and effect, (e) the execution, delivery and performance of this
Agreement will not result in the creation or imposition of any lien (other than
the Liens in favor of the Bank under this Agreement) on any of its properties or
assets pursuant to the provisions of any contractual obligation, and (f) there
is no litigation, suit, action, investigation, inquiry or other proceeding
presently pending (other than the Bankruptcy Proceeding) which could reasonably
be expected to affect the value of the Collateral

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or, to the knowledge of the Pledgor, threatened against the Pledgor or any of
its subsidiaries or any of their properties or assets, by or before any
arbitrator or any governmental authority and no preliminary or permanent
injunction or order by a state or Federal court has been entered in connection
with this Agreement.

     Section 7. Covenants. The Pledgor covenants and agrees with the Bank that:

     (a) The Pledgor will not (1) sell, assign, transfer, exchange, or otherwise
dispose of, or grant any option with respect to, the Collateral, or (2) create,
incur or permit to exist any lien or option in favor of, or any claim of any
person with respect to, any of the Collateral, or any interest therein, except
for the security interest created by this Agreement.

     (b) The Pledgor will maintain the security interest created by this
Agreement as a first priority, perfected security interest and defend the right,
title and interest of the Bank in and to the Collateral against the claims and
demands of all persons whomsoever. At any time and from time to time, upon the
written request of the Bank, and at the sole expense of the Pledgor, the Pledgor
will promptly and duly execute and deliver such further instruments and
documents and take such further actions as the Bank reasonably may request for
the purposes of obtaining or preserving the full benefits of this Agreement and
of the rights and powers herein granted.

     Section 8. No Discharge; Survival of Claims. The Pledgor agrees that (i)
the Obligations shall not be discharged by the Confirmation Order (and the
Pledgor, pursuant to Section 1141(d)(4) of the Bankruptcy Code, hereby waives
any such discharge) and (ii) the Liens and claims granted to the Bank pursuant
to the Order and described herein shall not be adversely affected in any manner
by the Confirmation Order or the occurrence of the Plan Effective Date.

     Section 9. Waiver. The Pledgor hereby waives presentation of any instrument
or document evidencing any indebtedness or liability to the Bank, demand of
payment, protest and notice of non-payment or protest.

     Section 10. Expenses. The Pledgor further agrees that it will pay the Bank
upon written demand any and all reasonable expenses (including reasonable fees
and expenses of its counsel) which the Bank may incur in connection with the
exercise or enforcement of any of the rights of the Bank hereunder.

     Section 11. Continuing Security Interest. This Agreement shall create a
continuing security interest in the Collateral and shall, notwithstanding the
entry of the Confirmation Order or, subject to Section 2.15(a) of the
Reimbursement Agreement, the occurrence of the Plan Effective Date, (a) remain
in full force and effect until the payment in full (after the expiration of all
Letters of Credit) of the Obligations, (b) be binding upon the Pledgor and its
successors and assigns (provided that any assignment by the Pledgor must be made
only with the prior written consent of the Bank), and (c) inure to the benefit
of the Bank and its successors, transferees and assigns. Upon the payment in
full (after the expiration of all Letters of Credit) of the Obligations, the
Pledgor shall be entitled to the return, upon its request and at its expense, of
such of the Collateral as shall not have been applied pursuant to the terms of
this

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Agreement. It is the intention of the parties hereto that the security interests
created hereby in favor of the Bank shall continue from and after the Plan
Effective Date to constitute continuing, perfected first priority security
interests in the Collateral, as security for the Obligations. Accordingly,
effective on the Plan Effective Date, the Pledgor confirms that it has granted,
and does hereby grant, to the Bank, a security interest in all right, title and
interest of the Pledgor in and to the Collateral Account and in all Cash,
Investments, security entitlements and other investments held or carried at any
time in the Collateral Account, as security for the Obligations.

     Section 12. Further Assurances. At the cost and expense of the Borrower,
the Borrower shall execute and file all such further documents and instruments,
and perform such other acts, as the Bank may request to maintain the Liens
granted to the Bank in connection with this Agreement, the Reimbursement
Agreement and the Interim Order (or the Final Order, as applicable) and to
maintain the priority of such Liens to be granted pursuant to this Agreement,
the Reimbursement Agreement and the Interim Order (or the Final Order, as
applicable). Pursuant to Section 9-402 of the New York UCC and any other
applicable law, the Borrower authorizes the Bank to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of the Borrower in such form and in such
offices the Bank reasonably determines appropriate to perfect the security
interests of the Bank under this Agreement, the Reimbursement Agreement and the
Interim Order (or the Final Order, as applicable). A photographic or other
reproduction of this Agreement shall be sufficient as a financing statement or
other filing or recording document or instrument for filing or recording in any
jurisdiction.

     Section 13. Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to departure by the Pledgor herefrom shall in any
event by effective unless the same shall be in writing and signed by the Bank,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

     Section 14. Notices. All notices, requests and demands to or upon the Bank
or the Pledgor to be effective shall be in writing (or by telex, fax or similar
electronic transfer) and shall be deemed to have been duly given or made
(1) when delivered by hand or (2) if given by mail, when deposited in the mails
by certified mail, return receipt requested, or (3) if by telex, fax or similar
electronic transfer, when sent and receipt has been confirmed, addressed to the
Bank or the Pledgor at its address or transmission number for notices set forth
below its signature hereto. The Bank and the Pledgor may change their addresses
and transmission numbers for notices by notice in the manner provided in this
paragraph.

     Section 15. Governing Law; Submission to Jurisdiction; Jury Trial. (a) This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the law of the State of New
York. Any legal action or proceeding between the Pledgor and any other party to
this Agreement arising out of or with respect to this Agreement may be brought
(a) prior to the Plan Effective Date, in the Bankruptcy Court and (b) at any
time thereafter, in the state courts of the State of New York, located in the
County of New York, or in the courts of the United States for the Southern
District of New York, and the Pledgor submits to the non-exclusive jurisdiction
of such courts for the purpose of any such suit, action or proceeding or
judgment. Each party to this Agreement irrevocably consents

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to service of process in the manner provided for notices in Section 14, such
service to become effective 30 days after such mailing. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law. Nothing herein shall affect the right of
the Bank to bring any legal action or proceeding against the Pledgor in any
court having jurisdiction with respect thereto but actions and proceedings
initiated prior to the Plan Effective Date shall be brought in the Bankruptcy
Court.

     (a) Each of the Bank and the Pledgor hereby irrevocably waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement brought in the
courts referred to in Section 15(a). Each of the Plegdor and the Bank hereby
further irrevocably waive and agree not to plead or claim in any such court that
any such action or proceeding brought in any such court has been brought in an
inconvenient forum.

     (b) Each of the Pledgor and the Bank waives, to the fullest extent it may
legally and effectively do so, any right it may have to jury trial in any legal
proceeding directly or indirectly arising out of or relating to each of the
Pledgor’s and the Bank’s rights and obligations under this Agreement or
transactions contemplated hereby (whether based on contract, tort or any other
theory).

     Section 16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. Delivery of an executed
counterpart of a signature page of this Agreement by telecopy shall be effective
as delivery of a manually executed counterpart of this Agreement.

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     IN WITNESS WHEREOF, the undersigned has caused its duly authorized officer
to execute and deliver this Agreement as of the date first above written.

                      SPACE SYSTEMS/LORAL, INC.
 
           

      By:    

         

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          Name:

          Title:
 
                    Address:
 
                    Attention:         Fax number:         Telephone:
 
            Agreed and Accepted:        
 
            JPMORGAN CHASE BANK        
 
           
By:
           

 

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  Name: Anna Marie Greer        

  Title: Vice President        

JPMorgan Chase Bank
270 Park Avenue
New York, New York 10017
Attention: Anna Marie Greer
Fax number: (212) 270-0427
Telephone: (212) 270-0332