<PAGE>

EXHIBIT 4.1

THIS AMENDING AGREEMENT ("Agreement") is made on the 6th day of March, 2003


BETWEEN:

(1)  GILAT SATELLITE NETWORKS LTD. (under a stay of proceedings), a limited
     liability company organised and existing under the laws of the State of
     Israel (the "BORROWER");

(2)  BANK HAPOALIM B.M., a banking corporation incorporated in the State of
     Israel (the "LENDER");

                                    RECITALS

WHEREAS,  On December 29, 2000 the Borrower borrowed $108,000,000 from the
          Lender pursuant to the Facility Agreement as defined below;

WHEREAS,  the Facility Agreement was subsequently revised as follows:

          (1)  On August 12, 2002 to amend the Interest Period as stated therein
               (see EXHIBIT A).

          (2)  On February 24, 2002 to provide limitations on the creation of
               security interests and certain commitments for financial
               covenants (see EXHIBIT B).

          (3)  On July 8, 2002, to provide for the payment of periodical
               interest of $1,524,312, the partial payment of $ 6,000,000 on
               account of the principal and the additional partial repayment of
               principal by a new short term loan in the sum of $12,000,000,
               with a due date of September 15, 2002, that was later extended to
               January 2, 2003 (see EXHIBIT C).

WHEREAS,       on October 15 2002, the Borrower, having failed to meet an
               interest payment of $7,437,500 to the Noteholders, commenced the
               Section 350 Proceedings with the consent of the Creditors in the
               District Court in Tel Aviv, which were followed by a Section 304
               Proceeding in the U.S. Bankruptcy Court in the State of Delaware,
               all culminating in a stay of proceedings against the Borrower in
               the State of Israel and the United States of America;

WHEREAS,       pursuant to and conditioned upon a court sanctioned arrangement
               among certain creditors of the Borrower, as fully described in
               the Proxy Solicitation, AS DEFINED BELOW, the Borrower and the
               Lender have agreed to amend the Facility Agreement to state as
               provided in this Agreement, starting the Effective Date as
               defined below;

WHEREAS,       the Borrower is expected to emerge from the Israeli Section 350
               Proceedings with a reduction of and /or modifications to the
               terms of its indebtedness to the Creditors, as set forth in the
               Proxy Solicitation;

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                                                                               2

WHEREAS,       the Borrower is expected to receive the final order from the U.S.
               Bankruptcy Court implementing and giving effect in the United
               States, under section 304 of the U.S Bankruptcy Code, to the
               Arrangement;

WHEREAS,       on May 31, 2001 StarBand filed a voluntary petition under Chapter
               11 with the US Bankruptcy Court in Delaware, and at the time of
               execution of this Agreement, StarBand is still under the
               protection of the court in the Chapter 11 proceedings with
               unclear prospects of emerging from these proceedings;

WHEREAS,       The Proxy Solicitation document fairly described the
               capitalization, consolidated financial information, analysis of
               results of operation and financial condition, recent business
               development, risk factors, management and certain tax
               considerations, - of the Borrower and its subsidiaries as of
               January 6, 2003, excluding the financial information which is as
               of September 30, 2002, and other than the description of other
               events specifically stated in this Agreement, no material event
               has come to the attention of the management of the Borrower as of
               such date, which event has not been disclosed in writing to the
               Lender; and

WHEREAS,       the parties wish to amend the Facility Agreement as provided
               herein;


IT IS AGREED as follows:


1.   DEFINITIONS AND INTERPRETATION

     1.1  DEFINITIONS

     In this Agreement, the following terms shall have the following meanings:

     ADVANCE                        The principal amount borrowed by the
                                    Borrower under the Facility Agreement. The
                                    parties acknowledge that the Advance in the
                                    total amount of $108,000,000 was drawn on
                                    the Drawdown Date.

     ADDITIONAL COLLATERAL          The PARI PASSU first priority (a) charge on
                                    all issued and outstanding shares of
                                    Spacenet and (b) floating charge on all the
                                    assets of the Borrower.

     ADDITIONAL PLEDGE              The pledge agreement concerning the PARI
     AGREEMENT                      PASSU first priority charge of all issued
                                    and outstanding shares of Spacenet.

     AGREEMENT                      This Agreement.

     APPLICABLE LAW                 (a)      any constitution, treaty, statute,
                                             code, law, regulation, ordinance,
                                             rule, judgement, rule of law,
                                             official order, judicial order,
                                             writ, decree, request, approval,
                                             concession, grant, franchise,
                                             licence, directive, guideline,
                                             policy, standard, plan,
                                             requirement, or other governmental
                                             restriction; and

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                                                                               3

                                    (b)      any similar form of decision of, or
                                             determination by, or any
                                             interpretation or administration of
                                             any of the foregoing (whether or
                                             not having the force of law) of any
                                             Governmental Authority,

                                    whether in effect as of the date hereof or
                                    thereafter and in each case as amended,
                                    re-enacted or replaced.

     ARRANGEMENT                    The Means the arrangement among the
                                    Creditors and the Borrower, as described in
                                    the Proxy Solicitation and as approved by
                                    the Creditors at the Creditors meetings
                                    dated February 5, 2003.

     BUSINESS DAY                   Means (i) any day that is not a Saturday, a
                                    Sunday or a day on which commercial banks in
                                    New York or Tel Aviv are required or
                                    authorised to be closed and (ii) when used
                                    in any respect relating to LIBOR, any day
                                    described in clause (i) of this definition
                                    that is also a day on which dealings may be
                                    carried out in the London inter-bank market.

     CAPITAL GUIDELINE              any law, rule, regulation, policy, guideline
                                    or directive (whether or not having the
                                    force of law and whether or not the failure
                                    to comply therewith would be unlawful) (i)
                                    regarding capital adequacy, capital ratios,
                                    capital requirements, the calculation of a
                                    bank's capital or similar matters, or (ii)
                                    affecting the amount of capital required to
                                    be obtained or maintained by the Lender or
                                    any Person controlling the Lender or the
                                    manner in which the Lender or any Person
                                    controlling the Lender allocate capital to
                                    any of their contingent liabilities
                                    (including letters of credit), advances,
                                    acceptances, commitments, assets or
                                    liabilities,

     CAPITAL STOCK                  Means any and all shares, interests,
                                    warrants, options or other equivalents
                                    (however designated) of capital stock of a
                                    corporation or any and all equivalent
                                    ownership interests in a Person (other than
                                    a corporation).

     CHAPTER 11                     Chapter 11 of Title 11 of the U.S Bankruptcy
                                    Code.

     COLLATERAL                     The Pledged  Collateral, as defined in the
                                    Pledge Agreement and the Additional
                                    Collateral.

     CONDITIONS PRECEDENT           The conditions set forth in Section 3.1
                                    below.

     COURT                          The Tel Aviv District Court.

     CREDITOR                       each of the following: the Noteholders, the
                                    Lender, the Israeli Discount Bank Ltd., and
                                    Bank Leumi Le-Israel B.M., collectively
                                    called "Creditors".

     DEBENTURE                      the document creating the first priority
                                    PARI PASSU floating charge on all the assets
                                    of the Borrower in favour of the Lender,
                                    dated the date hereof.

<PAGE>
                                                                               4

     DRAWDOWN DATE                  December 29, 2000, the date on which the
                                    Borrower drewdown the Advance.

     DOLLAR, US DOLLAR OR $         Freely  transferable lawful currency for the
                                    time being of the United States or any
                                    successor currency.

     EFFECTIVE DATE                 three (3) business days following the day on
                                    which all Conditions Precedent are fulfilled
                                    but no later than March 31 2003, or any
                                    later date mutually agreed upon in advance
                                    and in writing by the Lender and the
                                    Borrower.

     ENVIRONMENTAL ACTION           Any complaint, summons, citation, notice,
                                    directive, order, claim, litigation,
                                    investigation, judicial or administrative
                                    proceeding, judgment, letter or other
                                    written communication from any Governmental
                                    Authority or any third party involving
                                    violations of Environmental Laws or Releases
                                    of Hazardous Materials:

                                    (a)      from any assets, properties or
                                             businesses of the Borrower,
                                             Spacenet or any predecessor in
                                             interest;

                                    (b)      from or onto any adjoining
                                             properties or businesses; or

                                    (c)      from or onto any facilities which
                                             received Hazardous Materials
                                             generated by the Borrower, Spacenet
                                             or any predecessor in interest.

     ENVIRONMENTAL LAWS             All Applicable Laws concerning health,
                                    safety, biodiversity, Hazardous Materials or
                                    matters related to pollution or protection
                                    of the environment.

     EVENT OF DEFAULT               Any of the events set out in Section 16
                                    (Events of Default) of this Agreement.

     FACILITY                       The Dollar term loan facility granted by the
                                    Lender to the Borrower under the Facility
                                    Agreement.

     FACILITY AGREEMENT             The agreement between the Lender and
                                    Borrower dated December 28, 2000 creating a
                                    US Dollar denominated loan facility of a
                                    principal amount of up to $108,000,000
                                    including all amendments thereto as set
                                    forth in the Recitals above.

     FINAL MATURITY DATE            July 2, 2012, or such earlier date on which
                                    all obligations of the Borrower shall become
                                    due and payable (whether by acceleration or
                                    otherwise) in accordance with the terms of
                                    this Agreement.

     GAAP                           Generally accepted accounting principles of
                                    a designated country, consistently applied.

     GOVERNMENTAL AUTHORITY         Any government, governmental department,
                                    ministry, cabinet, commission, board,
                                    bureau, agency, tribunal, regulatory
                                    authority, instrumentality, judicial,
                                    legislative or administrative body or
                                    entity, domestic or foreign, federal,
                                    national, state, regional, provincial or
                                    local, having or exercising jurisdiction
                                    over the matter or matters in question.

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                                                                               5

     HAZARDOUS MATERIALS            Any natural or artificial substance or
                                    emission (whether in solid or liquid form or
                                    in the form of a gas or vapour and whether
                                    alone or in combination with any other
                                    substance) which is:

                                    (a)      capable of causing harm to man or
                                             any other living organism or
                                             damaging the environment or public
                                             health or welfare including but not
                                             limited to any controlled, special,
                                             hazardous, toxic, radioactive or
                                             dangerous waste;

                                    (b)      defined as or included in the
                                             definition of "hazardous
                                             substances", "hazardous waste",
                                             "restricted hazardous waste",
                                             "toxic substance", "toxic
                                             pollutant", "contaminant" or
                                             "pollutant" or words of similar
                                             import under any Applicable Law; or

                                    (c)      with respect to which any handling,
                                             transportation, disposal or release
                                             into the environment or any human
                                             exposure is prohibited, limited or
                                             otherwise regulated by any
                                             Governmental Authority by reason of
                                             its hazardous nature.

<PAGE>
                                                                               6

     INDEBTEDNESS                   Any indebtedness in respect of:

                                    (a)      moneys borrowed or debit balances
                                             at banks and other financial
                                             institutions;

                                    (b)      any charge, bond, note, loan stock
                                             or other security;

                                    (c)      any acceptance or documentary
                                             credit;

                                    (d)      receivables sold or discounted
                                             (otherwise than on a non-recourse
                                             basis);

                                    (e)      the acquisition cost of any asset
                                             to the extent payable before or
                                             after the time of acquisition or
                                             possession by the party liable
                                             where the advance or deferred
                                             payment is arranged primarily as a
                                             method of raising finance or
                                             financing the acquisition of that
                                             asset;

                                    (f)      any lease entered into primarily as
                                             a method of raising finance or
                                             converting fixed assets into liquid
                                             assets;

                                    (g)      any currency swap or interest rate
                                             swap, cap or collar arrangement or
                                             any other derivative or hedging
                                             instrument;

                                    (h)      any amount raised under any other
                                             transaction having the commercial
                                             effect of a borrowing or raising of
                                             money;

                                    (i)      any guarantee, indemnity or similar
                                             assurance against financial loss of
                                             any Person; or

                                    (j)      the available amount of all letters
                                             of credit issued for the account of
                                             any Person, other than letters of
                                             credit issued in connection with
                                             trade transactions issued in the
                                             ordinary course of business.

     INDENTURE                      The indenture to be executed, prior to the
                                    Effective Date, between the Trustee and the
                                    Borrower governing the New Notes.

     INTEREST PAYMENT               The last day of each Interest Period.
     DATES

     INTEREST                       PERIOD As determined in accordance with
                                    Section 6.3 (Interest Periods) or, with
                                    respect to interest at the Post-Default
                                    Rate, Section 6.4 (Default Interest).

     LIBOR                          For any Interest Period the rate of interest
                                    per six months loans equal to:

                                    (a)      the rate (rounded upwards, if
                                             necessary, to the nearest 1/16th of
                                             one percent) which is the offered
                                             rate at or about 11:00am London
                                             time two (2) Business Days prior to
                                             the commencement of such Interest
                                             Period for Dollar deposits

<PAGE>

                                                                               7

                                             for a period equal to such Interest
                                             Period which appears on the page
                                             "LIBOR 01" on the Reuters Monitor
                                             Money Rates Service (or such other
                                             page or service as may replace it)
                                             and, in the absence of any such
                                             replacement page or service, such
                                             other page of such other service as
                                             the Lender and the Borrower may
                                             agree; or

                                    (b)      if no such rate appears on such
                                             Reuters page or the Lender
                                             determines that no rate for a
                                             period of comparable duration to
                                             the relevant Interest Period
                                             appears on such Reuters page or the
                                             Lender determines that no such
                                             Reuters page or service is
                                             available at the relevant time, the
                                             arithmetic mean (rounded upwards,
                                             if necessary, to the nearest 1/16th
                                             of one percent) of the rates per
                                             annum as supplied to the Lender at
                                             its request, quoted by three
                                             reference banks selected by the
                                             Lender to leading banks in the
                                             London interbank market in the
                                             ordinary course of business, at or
                                             about 11:00am London time two (2)
                                             Business Days prior to the
                                             commencement of such Interest
                                             Period for the offering of Dollar
                                             deposits to the Lender in an amount
                                             comparable to the amount upon which
                                             interest is accruing, and for a
                                             period comparable to such Interest
                                             Period for delivery on the first
                                             day of that Interest Period.

     LIBOR OVERNIGHT RATE           as of any date, for any Interest Period in
                                    respect of interest at the Post-Default Rate
                                    pursuant to Section 6.4 (Default Interest),
                                    the rate per annum, equal to:

                                    (a)      the rate (rounded upwards if
                                             necessary, to 1/16th of one
                                             percent) which is the offered rate
                                             at or about 11.00 am London time
                                             two (2) Business Days prior to the
                                             commencement of such Interest
                                             Period for Dollar deposits for a
                                             period equal to one day which
                                             appears on the page "RMEY" on the
                                             Reuters Monitor Money Rates Service
                                             (or such other page or service as
                                             may replace it) and, in the absence
                                             of any such replacement page or
                                             service, such other page of such
                                             other service as the Lender and the
                                             Borrower may agree; or

                                    (b)      if no such rate appears on such
                                             Reuters page or the Lender
                                             determines that no rate for a
                                             period of one day appears on such
                                             Reuters page or the Lender
                                             determines that no such Reuters
                                             page or service is available at the
                                             relevant time, the arithmetic mean
                                             (rounded upwards, if necessary, to
                                             the nearest 1/16th of one percent)
                                             of the rates per annum as supplied
                                             to the Lender at its request,
                                             quoted by three reference banks
                                             selected by the Lender to leading
                                             banks in the London interbank
                                             market in the ordinary course of
                                             business, at or about 11:00am
                                             London time two (2) Business Days
                                             prior to the commencement of such
                                             day for the offering of Dollar
                                             deposits to the Lender in an amount
                                             comparable to the amount upon which
                                             interest is accruing, and for a
                                             period equal to one day.

<PAGE>

                                                                               8

       MATERIAL ADVERSE             Any effect or event, other than the events
       EFFECT                       indicated in the Chapter 11 proceedings with
                                    regard to Starband, the Section 350
                                    Proceedings, the Section 304 Proceedings and
                                    in the information set forth in EXHIBIT D,
                                    which is materially adverse or materially
                                    prejudicial to:

                                    (a)      the business, properties,
                                             operations, prospects or condition
                                             (financial or otherwise) of the
                                             Borrower, Spacenet, or Starband;

                                    (b)      the ability of the Borrower,
                                             Spacenet or Starband to perform its
                                             obligations hereunder or under any
                                             other Revised Transaction Document
                                             to which it is a party;

                                    (c)      the validity, perfection or
                                             priority of a Security Interest
                                             arising under the Revised
                                             Transaction Documents; or

                                    (d)      the rights, powers and remedies of
                                             the Lender under this Agreement or
                                             any other Revised Transaction
                                             Document or the legality, validity
                                             or enforceability of this Agreement
                                             or any other Revised Transaction
                                             Document.

     NEW NOTES                      4% Convertible Notes of the Borrower due
                                    2012 to be issued to the Noteholders and the
                                    Lender following the approval of the
                                    Arrangement by the Court.

     NEW NOTEHOLDERS                The holders of New Notes.

     NOTEHOLDERS                    The holders of the 4.25% Convertible
                                    Subordinated  Notes due 2005 that were
                                    issued by the Borrower.

     OBLIGATIONS                    Each of:

                                    (a)      the obligations of the Borrower to
                                             pay, as and when due and payable
                                             (by scheduled maturity or
                                             otherwise), all amounts from time
                                             to time owing by it in respect of
                                             any Revised Transaction Document to
                                             which it is a party, whether for
                                             principal, interest (including,
                                             without limitation, all interest
                                             that accrues after the commencement
                                             of any case, proceeding or other
                                             action relating to bankruptcy,
                                             insolvency or reorganization of the
                                             Borrower, whether or not a claim
                                             for post-filing interest is allowed
                                             in such proceeding), fees,
                                             commissions, expense
                                             reimbursements, indemnifications or
                                             otherwise, and

                                    (b)      the obligations of the Borrower to
                                             perform or observe all of its other
                                             obligations from time to time
                                             existing under any Revised
                                             Transaction Document to which it is
                                             a party.
<PAGE>

                                                                               9

     OPTION                         The Stock Purchase Option granted by
                                    Spacenet in favour of the Lender or any of
                                    its wholly owned subsidiaries on December
                                    28, 2000.

     ORDINARY SHARES                The ordinary shares, par value NIS 0.01 each
                                    of the Borrower.

     ORIGINAL LOAN AMOUNT           The original $108,000,000 lent to the
                                    Borrower on the Drawdown Date.

     OTHER BANKS                    Bank Leumi Le-Israel B.M. and the Israel
                                    Discount Bank Ltd.

     OUTSTANDING                    BALANCE Means at any given time, the
                                    Principal decreased by any Principal
                                    Instalment Amounts paid to the Lender and
                                    increased by any accrued and unpaid
                                    interest.

     PARTIAL PAYMENT (FIRST)        The First Partial Repayment shall mean the
                                    repayment of $6,000,000 on account of the
                                    principal of the Original Loan Amount along
                                    with $1,524,312 of interest as per the
                                    amendment to the Facility Agreement dated
                                    July 8, 2002.

     PARTIAL PAYMENT (SECOND)       The Second Partial Payment shall mean the
                                    conversion of $30,600,000 of the Original
                                    Loan Amount by the issuance to the Lender of
                                    18,488,590 Ordinary Shares and $5,100,000
                                    principal amount of New Notes, effected on
                                    the date hereof.

     PERMITTED SECURITY  INTERESTS  Any of the following:

                                    (a)      with respect to Spacenet, any
                                             Security Interest created by
                                             Spacenet over the Collateral
                                             pursuant to the Pledge Agreement;

                                    (b)      with respect to the Borrower, any
                                             Security Interests created by the
                                             Borrower with regard to the
                                             Additional Collateral pursuant to
                                             the Additional Pledge Agreement;

                                    (c)      with respect to the Borrower, the
                                             Debenture and the first priority
                                             floating charge to be created in
                                             favour of the Lender and the Other
                                             Banks, pursuant to the Arrangement
                                             and the second priority floating
                                             charge to be created in favour of
                                             the Noteholders pursuant to the
                                             Arrangement;

                                    (d)      with respect to any other Person,
                                             any Security Interest set forth in
                                             EXHIBIT E.

                                    (e)      the Security Interests created by
                                             the Borrower with respect to land
                                             and building forming part of Parcel
                                             No. 108 of Block 6640 and any
                                             proceeds received from the sale
                                             thereof, regardless to the date on
                                             which such Security Interests will
                                             be officially registered;
<PAGE>

                                                                              10

                                    (f)      any Security Interests created by
                                             the Borrower over future
                                             uncollected book debts and
                                             receivables up to an aggregate
                                             amount of US$15,000,000 with
                                             respect to goods and services to be
                                             provided by the Borrower in the
                                             ordinary course of business to bona
                                             fide customers (i.e. - upon the
                                             condition that such debts and
                                             receivables are incurred after the
                                             Effective Date); provided that (i)
                                             provided that such Security
                                             Interests are granted only to banks
                                             or similar financial institutions
                                             as security for credit facilities
                                             (including then provision of
                                             guarantees for the account of the
                                             Borrower) the purpose of such
                                             credit facilities being to
                                             facilitate the same transaction on
                                             account of which such uncollected
                                             book debts and receivable are
                                             payable, and (ii) such uncollected
                                             book debts and receivables over
                                             which Security Interests are
                                             granted as aforesaid constitute no
                                             more than 50% of the purchase price
                                             which the Borrower, acting
                                             reasonably and prudently, assesses
                                             as being payable in respect of the
                                             goods and services provided or to
                                             be provided by the Borrower within
                                             the framework of the aforesaid
                                             transaction;

                                    (g)      any Security Interests created by
                                             the Borrower over an asset which
                                             secures Indebtedness incurred for
                                             the purpose of financing the
                                             acquisition of that asset, provided
                                             that the amount of Indebtedness so
                                             secured does not exceed the cost of
                                             that acquisition and that any such
                                             Security Interest shall attach to
                                             the relevant asset
                                             contemporaneously with the
                                             acquisition of such asset;


                                    (h)      any Security Interests created by
                                             the Borrower arising solely by
                                             operating of law, in order to
                                             secure the payment of Taxes,
                                             provided that the liability for the
                                             payment of such Taxes is incurred
                                             in the normal course of business
                                             and such Taxes are either not due
                                             and payable or are being contested
                                             in good faith and with respect to
                                             which, in either case, adequate
                                             reserves are being maintained;

                                    (i)      any Security Interests created by
                                             the Borrower in favor of the
                                             Lender; or

                                    (j)      any Security Interest to be created
                                             by the Borrower with the prior
                                             written consent of the Lender.

     PERMITTED                      INDEBTEDNESS Any Indebtedness consented to
                                    or to be consented to by the Lender pursuant
                                    to this Agreement which ranks either PARI
                                    PASSU with or after (such that it is
                                    subordinated to) the Indebtedness created
                                    hereunder.

     PERSON                         an individual, corporation, limited
                                    liability company, partnership, association,
                                    joint-stock company, trust, unincorporated
                                    organization, joint venture or Governmental
                                    Authority.

<PAGE>

                                                                              11

     PLEDGE AGREEMENT               The pledge agreement between Spacenet and
                                    the Lender dated on December 28, 2000.

     PLEDGED STOCK -- STARBAND      The Pledged Stock as defined in the Pledge
                                    Agreement.

     PLEDGED SHARES - SPACENET      The Pledged Shares as defined in the
                                    Additional Pledge Agreement.

     POST DEFAULT RATE LIBOR        Overnight Rate plus 5% per annum.

     POTENTIAL EVENT OF DEFAULT     Any event which may become an Event of
                                    Default, whether as a result of the passage
                                    of time, the giving of notice or the
                                    fulfilment of any other condition.

     POWERS                         As defined in the Pledge Agreement and /or
                                    in the Additional Pledge Agreement.

     PRINCIPAL                      $71,400,000.

     PRINCIPAL INSTALLMENT AMOUNT   Each Principal Installment Amount, as set
                                    forth in the Amortization Table attached as
                                    EXHIBIT F to be paid in each Principal
                                    payment date.

     PRINCIPAL PAYMENT              Each of the dates on which Principal shall
                                    be repaid as set forth in the DATE
                                    Amortization Table attached as EXHIBIT F.

     PROXY SOLICITATION             The proxy solicitation document dated
                                    January 6, 2003 distributed by the Borrower
                                    to its Creditors describing the proposed
                                    Arrangement and setting up dates for
                                    Noteholders meetings for the purpose of
                                    approving the Arrangement.

     REGISTRATION RIGHTS            Means the Registration Rights Agreement
                                    dated 15 February 2000 between AGREEMENT
                                    Microsoft G-Holdings Inc., Microsoft
                                    Corporation, StarBand and Spacenet.

     RELEASE                        Any spilling, leaking, pumping, pouring,
                                    emitting, emptying, discharging, injecting,
                                    escaping, leaching, seeping, migrating,
                                    dumping, or disposing of any Hazardous
                                    Material (including the abandonment or
                                    discarding of barrels, containers, and other
                                    closed receptacles containing any Hazardous
                                    Material) into the indoor or outdoor
                                    environment, including ambient air, soil,
                                    surface or ground water.

     REMEDIAL ACTION                All actions taken to:

                                    (a)      monitor, assess, evaluate,
                                             investigate, clean up, remove,
                                             treat, remediate or contain or in
                                             any way address Hazardous Materials
                                             in the indoor or outdoor
                                             environment,
<PAGE>

                                                                              12

                                    (b)      prevent, mitigate or minimize any
                                             Release or threatened Release so
                                             that the Release or threatened
                                             Release does not mitigate or
                                             endanger or threaten to endanger
                                             public health or welfare or the
                                             environment; or

                                    (c)      perform pre-remedial investigations
                                             and studies, and post remedial
                                             operation and maintenance
                                             activities.

     REPAYMENT                      INSTALMENT An amount of Principal, to be
                                    repaid to the Lender on each Principal
                                    Payment Date, in accordance with EXHIBIT F.

     REVISED TRANSACTION DOCUMENTS  Each of the following:

                                    (a)      This Agreement;

                                    (b)      The Pledge Agreement;

                                    (c)      The Additional Pledge Agreement;

                                    (d)      The Debenture;

                                    (e)      the Option; and

                                    (f)      The Registration Rights Agreement.

     SECTION 350 PROCEEDINGS        All legal proceedings under Section 350 of
                                    the Israeli Companies Law, 1999 in
                                    Bankruptcy Case No. 1994/02 at the Court.

     SECTION 304 PROCEEDINGS        All legal proceedings in the Bankruptcy
                                    Court in Delaware that are ancillary to the
                                    Section 350 Proceedings.

     SECURITY INTEREST              Any mortgage, deed, deposit arrangement,
                                    pledge, claim, lien (statutory or other),
                                    charge, encumbrance, conditional sale, title
                                    retention, preferential right, priority,
                                    trust arrangement, assignment, hypothecation
                                    or security interest or any other agreement
                                    or arrangement having the effect of
                                    conferring security.

     SECURITY INTEREST SHARING      The agreement among the Lender and the Other
                                    Banks with regard to the AGREEMENT
                                    Additional Collateral.

     SPACENET                       Spacenet Inc., a corporation duly organised
                                    and existing under the laws of the State of
                                    Delaware and a wholly-owned subsidiary of
                                    the Borrower.

     STARBAND                       Starband Communications Inc., a corporation
                                    duly organised and existing under the laws
                                    of the State of Delaware.

     STOCKHOLDERS' AGREEMENT        as defined in the Pledge Agreement.

<PAGE>

                                                                              13

     SUBSIDIARY                     as to any Person, any corporation of which
                                    more than 50% of the outstanding Capital
                                    Stock having (in the absence of
                                    contingencies) ordinary voting power to
                                    elect directors (or Persons performing
                                    similar functions) of such corporation is,
                                    at the time of determination, owned
                                    directly, or indirectly through one or more
                                    intermediaries, by such Person.

     TAX                            Taxes, documentary taxes, stamp taxes, value
                                    added taxes, transaction taxes, cash reserve
                                    obligations, withholding taxes, registration
                                    and other similar taxes), withholdings,
                                    levies, imposts, duties, charges, compulsory
                                    loans, fees, assessments, surcharges,
                                    deductions, other compulsory payments and
                                    similar charges of whatever nature and
                                    howsoever arising that are now or at any
                                    time hereinafter imposed, assessed, charged,
                                    levied, collected, demanded, withheld or
                                    claimed, by the State of Israel, the United
                                    States of America, any other applicable
                                    jurisdiction or any Governmental Authority
                                    thereof or therein (including any penalty or
                                    interest or other liabilities payable in
                                    connection with any of the foregoing).

     TRUSTEE                        The Bank of New York.

       1.2    In this Agreement, words and defined terms denoting the singular
              number include the plural and vice versa and the use of any gender
              shall be applicable to all genders.

       1.3    The recitals, schedules, appendices, annexes and exhibits to this
              Agreement form an integral part hereof.

       1.4    Section headings used in this Agreement are for the sake of
              convenience only and shall not affect the interpretation hereof.

       1.5    Unless otherwise indicated herein, all references to time of day
              refer to Tel Aviv time on such day. For purposes of the
              computation of a period of time from a specified date to a later
              specified date, the word "from" means "from and including" and the
              words "to" and "until" each means "to but excluding", provided,
              however, that with respect to a computation of fees or interest
              payable to the Lender, such period shall in any event consist of
              at least one full day.

       1.6    All accounting terms not specifically defined herein shall, in
              relation to any Person, be construed in accordance with generally
              accepted accounting principles and practices, consistently
              applied, in conformity with those used in the preparation of such
              Person's financial statements except as otherwise provided herein.
              All financial calculations to be made hereunder shall be made in
              accordance with generally accepted financial practices.

<PAGE>

                                                                              14

       1.7    All references in any Revised Transaction Document to clauses,
              sections, articles, schedules, annexes and exhibits are to
              clauses, sections, articles, schedules and exhibits in or to such
              Revised Transaction Document unless otherwise specified therein.
              The words "hereof," "herein" and "hereunder" and words of similar
              import when used in a Revised Transaction Document shall refer to
              such Revised Transaction Document as a whole and not to any
              particular provision of such Revised Transaction Document.

       1.8    References in any Revised Transaction Document to any statute,
              decree or regulation shall be construed as a reference to such
              statute, law, decree or regulation as re-enacted, redesignated,
              amended or extended from time to time and references in any
              Transaction Document to any document or agreement shall be deemed
              to include references to such document or agreement as amended,
              varied, supplemented or replaced from time to time.

       1.9    References to any representation by any Person or by any officer
              thereof being to the best of such Person's knowledge shall be
              deemed to be the best of such Person's knowledge after due
              inquiry.

       1.10   If any amount to be determined or measured pursuant to any of the
              Revised Transaction Documents relates to a transaction in a
              currency other than Dollars, such determination shall be made by
              converting such currency by reference to the buying spot market
              rate of exchange on the date of such transaction.

       1.11   Any reference in this Agreement to a "month" or a period of one or
              more "months" means a period beginning in one calendar month and
              ending in the following calendar month on the day numerically
              corresponding to the day of the calendar month in which such
              period started, provided that if such period started on the last
              day in a calendar month, or if there is no such numerically
              corresponding day, such period shall end on the last day in the
              following calendar month (and "month" shall be construed
              accordingly).

1.A.          With effect from the Effective Date, the Facility Agreement shall
              be amended and restated so it shall be replaced by this Agreement
              (including its annexes, exhibits and schedules), and for avoidance
              of doubt, this Agreement shall supersede the Facility Agreement
              and shall constitute the definitive and binding version of the
              Facility Agreement, as amended and revised by this Agreement.

2.     FACILITY

       2.1    FACILITY

              Subject to the terms of the Facility Agreement, the Lender
              advanced the Original Loan Amount to the Borrower on December 29,
              2000. There is no further commitment to lend money to the
              Borrower. As of the Effective Date, the parties agree and
              acknowledge that the Principal is $71,400,000 (seventy one million
              and four hundred thousands U.S. dollars), subject to Section 6.3
              (a) below.

       2.2    AVAILABILITY PERIOD

              Not Applicable.

<PAGE>

                                                                              15

       2.3    DRAWDOWN

              Not Applicable.

       2.4    DRAWDOWN REQUEST

              Not Applicable

       2.5    PURPOSE

              The Principal shall be used for general corporate purposes.

3.     CONDITIONS PRECEDENT

       3.1    CONDITIONS PRECEDENT

              The entrance of this Agreement into effect, including the
              agreement of the Lender to accept the Second Partial Payment is
              subject to (A) the procurement of the approval by the Court of the
              Arrangement as voted for by the Lender in the Creditors meeting
              and subject to the terms thereof by no later than March 31, 2003,
              and (B) the fulfilment, on or before the Effective Date, of each
              of the following conditions precedent, to the satisfaction of the
              Lender, unless waived in accordance with the provisions of Section
              3.2 (Waiver):

              (a)    The Borrower shall have paid all fees, costs, expenses,
                     taxes and duties then payable by the Borrower pursuant to
                     this Agreement.

              (b)    The presentation for its approval PRIOR TO EXECUTION of the
                     Indenture and other pertinent agreements concerning the New
                     Notes.

              (c)    The representations and warranties of the Borrower
                     contained in Section 14 (Representations and Warranties) of
                     this Agreement and in any other Revised Transaction
                     Document, certificate or instrument delivered to the Lender
                     pursuant hereto shall be correct.

              (d)    The execution of this Agreement shall not contravene any
                     Applicable Law.

              (e)    The Lender shall have received the following, each in form
                     and substance reasonably satisfactory to the Lender and,
                     unless indicated otherwise:

                     (i)    a copy of the Indenture, duly executed by Borrower;

                     (ii)   the Additional Pledge Agreement and the Debenture,
                            duly executed by Borrower;

                     (iii)  all certificates representing the Spacenet Pledged
                            Shares together with the Powers and, appropriate
                            pledge notice, duly executed by Borrower, for filing
                            with the Companies Registrar, or in such office or
                            offices as may be necessary or, in the reasonable
                            opinion of the Lender, desirable to perfect the
                            Security Interests purported to be created by the
                            additional Pledge Agreement;

<PAGE>

                                       16

                     (iv)   a copy of the resolutions adopted by the Board of
                            Directors of the Borrower, certified by authorised
                            officers thereof authorising (x) the transactions
                            contemplated hereby, and (y) the execution, delivery
                            and performance by the Borrower of each Revised
                            Transaction Document to which it is a party and the
                            execution and delivery of the other documents to be
                            delivered by the Borrower in connection herewith and
                            therewith, unless authorised previously;

                     (v)    a certificate or resolution of an authorised officer
                            of the Borrower, certifying the names and true
                            signatures of the officers of the Borrower,
                            authorised to sign each Revised Transaction Document
                            to which the Borrower will be a party and the other
                            documents to be executed and delivered by the
                            Borrower in connection herewith, together with
                            evidence of the incumbency of such authorised
                            officers, unless certified previously;

                     (vi)   a copy of the certificate of incorporation,
                            memorandum and articles of association or other
                            constitutional documents of the Borrower and
                            Spacenet certified by an authorised officer of the
                            Borrower and Spacenet, as appropriate;

                     (vii)  an opinion of Gross, Kleinhendler, Hodak, Halevy,
                            Greenberg & Co., special counsel to the Borrower, in
                            form and substance reasonably satisfactory to the
                            Lender;

                     (viii) an opinion of Sherman & Sterling, special counsel to
                            the Borrower on matters affecting U.S. law which are
                            relevant to the effectiveness of this Agreement;

                     (ix)   a certificate of the chief executive officer or the
                            chief financial officer of the Borrower, certifying
                            that Borrower owns all the issued and outstanding
                            shares of Common Stock of Spacenet, together with
                            written confirmation from Ernst & Young or the
                            Borrower's legal counsel that such shares of
                            Spacenet constitute 100% of the issued and
                            outstanding Capital Stock of Spacenet.

                     (x)    a certificate from the appropriate official of the
                            State of Delaware certifying as to the existence in
                            good standing of and the payment of taxes by,
                            Spacenet in such state; and

                     (xi)   such other agreements, instruments, approvals,
                            opinions and other documents as the Lender may
                            reasonably request.

              (f)    All proceedings in connection with the transactions
                     contemplated by this Agreement, and all documents
                     incidental thereto, shall be satisfactory to the Lender and
                     its special counsel, and the Lender and such special
                     counsel shall have received all such information and such
                     counterpart originals or certified or other copies of such
                     documents as the Lender or such special counsel may
                     reasonably request.
<PAGE>

                                                                              17

              (g)    All necessary permits, consents, approvals or licences
                     required from any Governmental Authority for the execution
                     of this Agreement or the consummation of the transactions
                     contemplated hereby shall have been received and shall be
                     in full force and effect.

              (h)    The Lender shall have determined, in its sole judgment,
                     that no event having a Material Adverse Effect shall have
                     occurred from the date of the Proxy Solicitation up to the
                     Effective Date.

              (j)    All necessary permits, consents, approvals or licences if
                     and to the extent required from the U.S. Securities and
                     Exchange Commission ("SEC") and NASDAQ would have been
                     received allowing for free tradability of the Ordinary
                     Shares and New Notes issued to the Lender under the
                     Arrangement, subject only to the limitations on sales of
                     securities imposed on "affiliates" of an issuer.

       3.2    WAIVER

              The Lender may, in its sole discretion, waive any of the
              conditions precedent set out in Clause 3.1 (Conditions Precedent),
              either with or without imposing any conditions thereto.

       3.3    CLOSING

              The closing of this Agreement shall take place at the offices of
              Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. Law Offices, 1
              Azrieli Center, Tel Aviv, Israel at 10:00 a.m. Israel time, on the
              Effective Date, or, if at such time any condition set forth in
              Section 3.1 above has not been fulfilled or waived in accordance
              with the provisions of Section 3.2 (Waiver), as soon as
              practicable after all the conditions precedent set forth in
              Section 3.1 above have been fulfilled or waived in accordance with
              the provisions of Section 3.2 (Waiver), but not later than March
              31, 2003 or on such later time as may be mutually agreed to in
              advance and in writing by Lender and the Borrower.


       At the closing, the following transactions shall take place
simultaneously:

              (i)    this Agreement will enter into effect;

              (ii)   the issuance by the Borrower, pursuant to the Arrangement,
                     of 202,083,908 Ordinary Shares to the Noteholders
                     (including the Lender) and additional 18,488,590 Ordinary
                     Shares to the Lender;

              (iii)  the entrance into effect of the Indenture and other
                     pertinent agreements concerning the New Notes;

              (iv)   the issuance by the Borrower of the New Notes to the
                     Trustee pursuant to the Arrangement; and

              (v)    the entrance into effect of the Debenture and the
                     Additional Pledge Agreement, in accordance with the terms
                     thereof.

<PAGE>

                                                                              18

              (vi)   The cancellation of the 4.25% Convertible Subordinated
                     Notes due year 2005 of the Borrower, pursuant to the
                     Arrangement.

              (vii)  The Borrower shall deliver to the Lender: (a) appropriate
                     pledge notices concerning the Debenture and the Additional
                     Pledge Agreement, duly executed by Borrower, for filing, by
                     the Lender, with the Israeli Companies Registrar, within
                     the period provided for by Applicable Law; and (b) notice
                     of issuance to the Israeli Companies Registrar, with
                     regards to the issuance of the Ordinary Shares referred to
                     in sub-section 3.3 (ii) above, to be filed by the Borrower,
                     within the period provided for by Applicable Law, which
                     shall bear all applicable duties and expenses in relation
                     to said filing.

              Provided that, none of the foregoing transactions in this Section
              3.3, whether initiated by the Borrower or by any other party,
              shall be deemed to have taken place, and no document or
              certificate shall be deemed to have been delivered, until all such
              transactions have been completed and all such documents have been
              delivered.

4.     REPAYMENT

       The Borrower shall repay the Principal in full by equal consecutive
       Repayment Instalments on Principal Payment Dates which shall coincide
       starting July 2, 2005 with the Interest Payment Dates, all as set forth
       in the Amortisation Table attached hereto as EXHIBIT F. Any amount of the
       Principal which is repaid may not be re-borrowed.

5.     PREPAYMENT

       5.1    PREPAYMENT UPON EXECUTION OF THIS AGREEMENT

              (a)    The parties agree that the Second Partial Payment of the
                     Original Loan Amount shall be effective as of January 2,
                     2003, subject to the fulfilment of the conditions specified
                     above.

       5.2    VOLUNTARY PREPAYMENT

              (a)    The Borrower may, at any time, by giving not less than 30
                     days' prior written notice to the Lender, prepay the
                     Principal, in whole or in part, without penalty or premium,
                     provided only that any such prepayment shall made upon an
                     Interest Payment Date, that it shall be made in multiples
                     of $500,000 each and provided further that all other sums
                     due and payable under this Agreement shall be paid
                     simultaneously with such prepayment.

              (b)    Any notice provided by the Borrower pursuant to this
                     Section 5.2 shall be irrevocable and shall specify the date
                     fixed for prepayment, and the aggregate of the portion of
                     the Principal and the interest thereon to be paid on the
                     prepayment date.
<PAGE>

                                                                              19

       5.3    MISCELLANEOUS PROVISIONS

              (a)    Any prepayments under this Agreement shall be made together
                     with accrued interest and all other amounts accrued and
                     payable under this Agreement and shall be applied to
                     instalments of Principal in the inverse order of maturity.

              (b)    No prepayment is permitted except in accordance with the
                     express terms of this Agreement.

              (c)    No amount prepaid under this Agreement may subsequently be
                     re-borrowed.


       5.4    MANDATORY PREPAYMENT

              All mandatory repayment shall be made upon Interest Payment Dates.

6.     INTEREST

       6.1    RATE OF INTEREST

              The rate of interest applicable to the Outstanding Balance for
              each Interest Period shall be LIBOR plus 2.5% per annum. Interest
              shall accrue from and include the first day of an Interest Period,
              but exclude the last day of such Interest Period.

       6.2    PAYMENT OF INTEREST

              (a)    The Borrower shall pay interest on the Outstanding Balance
                     in arrears on each Interest Payment Date, and at maturity
                     (whether upon demand, by acceleration or otherwise).

              (b)    All interest shall be computed on the basis of a year of
                     360 days for the actual number of days, including the first
                     day but excluding the last day, elapsed.

       6.3    INTEREST PERIODS

              (a)    The initial Interest Period in respect of the Outstanding
                     Balance shall commence on January 2, 2003 and shall end on
                     the numerically corresponding day (or, if there is no
                     numerically corresponding day, on the last day) in the
                     calendar month that is six (6) months thereafter.

              (b)    Each subsequent Interest Period shall commence on the last
                     day of the preceding Interest Period and ending on the
                     numerically corresponding day (or, if there is no
                     numerically corresponding day, on the last day) in the
                     calendar month that is six (6) months thereafter.

              (c)    If any Interest Period would end on a day other than a
                     Business Day, such Interest Period shall be extended to the
                     next succeeding Business Day unless such next succeeding
                     Business Day would fall in the next calendar month, in
                     which case such Interest Period shall end on the preceding
                     Business Day.

              (d)    No Interest Period shall end on a date which is later than
                     the Final Maturity Date.

<PAGE>

                                                                              20

              (e)    Any Interest Period that begins on the last Business Day of
                     a calendar month (or on a day for which there is no
                     numerically corresponding day in the calendar month at the
                     end of such Interest Period) shall end on the last Business
                     Day of a calendar month.

              (f)    The Lender, with the agreement of the Borrower, may make
                     such adjustments to the duration of Interest Periods.

       6.4    DEFAULT INTEREST

              (a)    If the Borrower fails to pay any amount payable by it
                     hereunder, it shall forthwith on demand by the Lender pay
                     interest on the overdue amount from the due date up to the
                     date of actual payment (before and after judgement), at the
                     Post-Default Rate.

              (b)    For the purposes hereof, any amount payable by the Borrower
                     on demand shall be deemed overdue when a demand has been
                     made for the payment thereof and the amount has not been
                     paid.

              (c)    Upon the occurrence and during the continuance of an Event
                     of Default, the Outstanding Balance and (to the extent
                     permitted by law) interest and other amounts which are not
                     paid when due, shall bear interest until such amount is
                     paid in full at a fluctuating interest rate per annum equal
                     at all times to the Post-Default Rate.

              (d)    Interest at the Post-Default Rate shall be payable on
                     demand.

              (e)    Interest Periods in respect of interest at the Post-Default
                     Rate shall be of one (1) day's duration.

              (f)    Interest at the Post-Default Rate will be compounded on a
                     quarterly basis.

       6.5    DETERMINATION BY LENDER

              Each determination by the Lender of an interest rate or fees
              hereunder shall be conclusive and binding for all purposes in the
              absence of manifest error.


7.     PAYMENTS

       7.1    PLACE

              All payments by the Borrower under this Agreement shall be made to
              the Lender, by means of the Lender debiting the Borrower's account
              with the Lender (bank account no. 156677, at branch no. 616), or
              in such other manner as the Lender may notify the Borrower. The
              Borrower hereby agrees and authorises the Lender to debit the said
              account of all sums due and payable under this Agreement without
              prior notice, provided only that the Lender shall notify the
              Borrower of any such debit within 3 Business Days thereof.
<PAGE>

                                                                              21

       7.2    TIME OF SETTLEMENT

              Payments under this Agreement to the Lender shall be made for
              value by no later than 11.00 am on the due date or at such times
              as the Lender may otherwise specify to the Borrower as being
              customary at the time for the settlement of transactions in US
              dollars.


       7.3    CURRENCY OF ACCOUNT AND PAYMENT

              (a)    All amounts payable under this Agreement shall be paid in
                     Dollars and in immediately available funds.

              (b)    If in respect of any liability for any Obligation of the
                     Borrower under any of the Revised Transaction Documents the
                     Lender receives payment or that liability is converted into
                     a claim, proof, judgment or order, in either case in a
                     currency other than in the currency (the "CONTRACTUAL
                     CURRENCY") in which the amount is expressed in the relevant
                     document to be payable, then:

                     (i)    the Borrower shall indemnify the Lender on demand by
                            the Lender against any loss or liability resulting
                            from the conversion;

                     (ii)   if the amount received by the Lender, when converted
                            into the Contractual Currency by the Lender, is less
                            than the amount of the liability in the Contractual
                            Currency, then the Borrower shall on demand by the
                            Lender pay to the Lender an amount in the
                            Contractual Currency equal to the difference; and

                     (iii)  the Borrower shall on demand by the Lender pay to
                            the Lender any exchange costs and taxes payable or
                            paid in connection with any conversion referred to
                            in this Section 7.3.


       7.4    NO SET-OFF OR COUNTERCLAIM

              All payments made by the Borrower under this Agreement shall be
              made without defence, retention, set-off or counterclaim and free
              and clear of any deductions or charges.

       7.5    NON-BUSINESS DAYS

              (a)    If a payment under this Agreement is due on a day which is
                     not a Business Day, the due date for that payment shall
                     instead be the next Business Day in the same calendar month
                     (if there is one) or the preceding Business Day (if there
                     is not).

              (b)    During any extension of the due date for payment of any
                     Principal Instalment Amount under this Section 7.5
                     (Non-Business Days) interest is payable on that Principal
                     Instalment Amount at the rate payable on the original due
                     date.

<PAGE>

                                                                              22

       7.6    PARTIAL PAYMENTS

              (a)    If the Lender receives a payment insufficient to discharge
                     all the amounts then due and payable by the Borrower under
                     this Agreement, the Lender shall apply that payment towards
                     the Obligations of the Borrower under this Agreement in the
                     following order:

                     (i)    FIRST, in or towards payment pro rata of any unpaid
                            fees and expenses, costs, and indemnities of the
                            Lender;

                     (ii)   SECONDLY, except as set out in (iii), in payment of
                            all amounts of interest and, to the extent it has
                            not already been paid, default interest due and
                            payable;

                     (iii)  THIRDLY, in payment of all amounts of Principal,
                            then outstanding due and payable;

                     (v)    FOURTHLY, in or towards payment pro rata of any
                            other sums due but unpaid hereunder.

              (b)    Section 7.6 (a) above shall override any appropriation made
                     by the Borrower.

       7.7    ACCOUNTS

              The Lender shall maintain in accordance with its usual practice
              accounts recording the amounts from time to time owing by the
              Borrower to the Lender under this Agreement. In any legal
              proceeding and otherwise for the purposes of this Agreement, the
              entries made in such accounts shall, in the absence of manifest
              error, constitute prima facie evidence as to the existence and
              amount of the obligations of the Borrower recorded in such
              accounts.

8.     TAXES

       8.1    GROSS-UP

              All payments by the Borrower hereunder shall be made without any
              deduction and free and clear of and without any deduction for or
              on account of any Taxes, except to the extent that the Borrower is
              required by law to make payment subject to any deduction or
              withholding of any Taxes. If any Tax or amounts in respect of Tax
              must be deducted, or any other deductions must be made, from any
              amounts payable or paid by the Borrower, the Borrower shall pay
              such additional amounts as may be necessary to ensure that the
              Lender receives a net amount equal to the full amount which it
              would have received had payment not been made subject to Tax
              (other than Tax on the overall net income of the Lender or the
              overall net income of a division or branch of the Lender) or other
              deduction.

       8.2    TAX RECEIPTS

              All Taxes required by law to be deducted by the Borrower from any
              amounts paid or payable hereunder shall be paid by the Borrower
              when due and the Borrower shall, within fifteen (15) days of the
              payment being made, deliver to the Lender evidence
<PAGE>

                                                                              23

              satisfactory to the Lender (including all relevant tax receipts)
              that the payment has been duly remitted to the appropriate
              authority.

       8.3    TAX INDEMNITY

              The Borrower will indemnify the Lender for the amount of Taxes
              with respect to payments under this Agreement paid by the Lender
              and any liability (including penalties, interest and expenses for
              non-payment, late payment or otherwise) arising therefrom or with
              respect thereto, whether or not such Taxes were correctly or
              legally asserted. This indemnification shall be paid within thirty
              (30) days from the date on which the Lender makes written demand,
              which demand shall identify the nature and amount of Taxes for
              which indemnification is being sought and the basis of the claim.

9.     MARKET DISRUPTION

       9.1    MARKET DISRUPTION

              If by reason of changes affecting the Dollar market, the Lender is
              unable, due to circumstances beyond its control, to determine the
              interest rate applicable to the Outstanding Balance, or the Lender
              otherwise determines that adequate and fair means do not exist for
              ascertaining the applicable interest rate, then the Lender shall
              promptly notify the Borrower of the fact that this Section 9
              (Market Disruption) is in operation.

       9.2    ALTERNATIVE BASIS FOR INTEREST

              (a)    If a notification under Section 9.1 (Market Disruption) is
                     made at any time under this Agreement, then,
                     notwithstanding any other provision of this Agreement,
                     within five (5) Business Days of receipt of the
                     notification, the Borrower and the Lender shall enter into
                     negotiations for a period of not more than thirty (30) days
                     with a view to agreeing on an alternative basis for
                     determining the rate of interest.

              (b)    If no alternative basis is agreed, the Lender shall certify
                     on or before the last day of the Interest Period to which
                     the notification relates, an alternative basis for
                     determining the rate of interest applicable to the
                     Principal, which shall reflect the cost to the Lender of
                     funding the Outstanding Balance from whatever sources the
                     Lender, acting in its good faith judgement, may select plus
                     2.5% per annum.

       9.3    REVIEW

              So long as any alternative basis for the ascertaining of the
              interest rate or funding is in force, the Lender, in consultation
              with the Borrower shall from time to time, but not less than
              monthly, review whether or not the circumstances referred to in
              Section 9.1 (Market Disruption) still prevail with a view to
              returning to the original provisions of this Agreement. Upon any
              return to the normal provisions of this Agreement, the Outstanding
              Balance shall be continued for an Interest Period expiring on the
              next Interest Payment Date which would have applied pursuant to
              Section 6.3 (Interest Periods) if the provisions of this Section 9
              (Market Disruption) had not been operating.
<PAGE>

                                                                              24

10.    INCREASED COSTS

       10.1   INCREASED COSTS

              If the Lender shall have determined that, after the date of this
              Agreement, the adoption or implementation of or any change in, any
              law, rule, treaty or regulation, or any policy, guideline or
              directive of, or any change in the interpretation or
              administration thereof by, any court, central bank or other
              administrative or Governmental Authority (including relating to
              taxation, or reserve asset, special deposit, cash ratio, liquidity
              or capital adequacy requirements or any other form of banking or
              monetary control), or compliance by the Lender or any Person
              controlling the Lender with any directive of or guideline from any
              central bank or other Governmental Authority or the introduction
              of or change in any accounting principles applicable to the Lender
              or any Person controlling the Lender (in each case, whether or not
              having the force of law), shall:

              (a)    change the basis of taxation of payments to the Lender or
                     any Person controlling the Lender of any amounts payable
                     hereunder (except for taxes on the overall net income of
                     the Lender or any Person controlling the Lender);

              (b)    impose, modify or deem applicable any reserve, special
                     deposit or similar requirement against the Outstanding
                     Balance or against assets of or held by, or deposits with
                     or for the account of, or credit extended by the Lender or
                     any Person controlling the Lender; or

              (c)    impose on the Lender or any Person controlling the Lender
                     any other condition regarding this Agreement or the
                     Outstanding Balance,

              and the result of any event referred to in clauses (a), (b) or (c)
              above shall be: (i) to cause the Lender to incur an additional
              cost as a result of its having entered into, or performing,
              maintaining or funding its obligations hereunder or (ii) to reduce
              any amount received or receivable by the Lender hereunder, then,
              upon demand by the Lender, the Borrower shall pay to the Lender
              such additional amounts as will compensate the Lender for such
              increased costs or reductions in amount.

       10.2   CHANGES IN CAPITAL GUIDELINES

              If the Lender shall have determined that, after the date of this
              Agreement, any Capital Guideline or adoption or implementation of,
              or any change in, any Capital Guideline by the Governmental
              Authority charged with the interpretation or administration
              thereof, or compliance by the Lender or any Person controlling the
              Lender with any Capital Guideline or with any request or directive
              of any such Governmental Authority with respect to any Capital
              Guideline, or the implementation of, or any change in, any
              applicable accounting principles (in each case, whether or not
              having the force of law), either:

              (a)    affects or would affect the amount of capital required or
                     expected to be maintained by the Lender or any Person
                     controlling the Lender, and the Lender determines that the
                     amount of such capital is increased as a direct or indirect
                     consequence of the Advance being made or maintained or
                     other obligations hereunder; or

<PAGE>

                                                                              25

              (b)    has or would have the effect of reducing the rate of return
                     on the Lender or any such other controlling Person's
                     capital to a level below that which the Lender or such
                     controlling Person could have achieved but for such
                     circumstances as a consequence of the Advance made or
                     maintained, or the Lender's or such other controlling
                     Person's other obligations hereunder

              (in each case, taking into consideration the Lender's or such
              other controlling Person's policies with respect to capital
              adequacy), then, upon demand by the Lender, the Borrower shall pay
              to the Lender from time to time such additional amounts as will
              compensate the Lender for such cost of maintaining such increased
              capital or such reduction in the rate of return on the Lender's or
              such other controlling Person's capital.

       10.3   CERTIFICATE

              A certificate of the Lender claiming compensation under this
              Section 10 (Increased Costs) specifying the event herein above
              described and the nature of such event shall be submitted by the
              Lender to the Borrower, setting forth the additional amount due
              and an explanation of the calculation thereof, the Lender's
              reasons for invoking the provisions of this Section 10 (Increased
              Costs), and shall be final and conclusive absent manifest error.

       10.4   OPTIONAL PREPAYMENT

              If increased costs have been and continue to be payable to the
              Lender in accordance with Clause 10.1 (Increased Costs) for a
              period in excess of thirty (30) days, the Borrower shall have the
              right, and on last day of the current Interest Period, upon not
              less than thirty (30) days' prior written notice to the Lender
              (which notice shall be irrevocable and shall bind the Borrower to
              make the prepayment specified below) and upon payment of all
              accrued interest and amounts due under Section 5 (Prepayment) and
              Section 10 (Increased Costs) on the amount to be prepaid, to
              prepay all or, as the case may be, that portion of the Outstanding
              Balance with respect to which the Lender informs the Borrower that
              amounts are being charged under Section 10 (Increased Costs).

       10.5   MITIGATION

              If the Lender requests compensation under Section 10 (Increased
              Costs), then the Lender shall use reasonable efforts to designate
              a different lending office for booking the Outstanding Balance
              hereunder or to assign its rights and obligations hereunder to
              another of its offices, branches or affiliates, if in the
              reasonable judgment of the Lender, such designation or assignment
              (a) would eliminate or reduce amounts payable pursuant to Section
              10 (Increased Costs), in the future and (b) would not subject the
              Lender to an unreimbursed cost or expense and would not otherwise
              be disadvantageous to the Lender. The Borrower hereby agrees to
              pay all reasonable costs and expenses incurred by the Lender in
              connection with any such designation or assignment.

<PAGE>

                                                                              26


11.    ILLEGALITY

       11.1   ILLEGALITY

              Notwithstanding any other provision of this Agreement, if,
              subsequent to the date of this Agreement, a continuance of the
              Outstanding Balance has been made:

              (a)    unlawful by any change made in any Applicable Law;

              (b)    impossible, by compliance by the Lender with any request of
                     a Governmental Authority (whether or not having force of
                     law); or

              (c)    impracticable as a result of a contingency occurring after
                     the date of this Agreement which materially and adversely
                     affects the London interbank dollar market,

              the Borrower shall, upon notice by the Lender (but subject to the
              approval of the appropriate Governmental Authorities, which the
              Borrower agrees to take all reasonable steps to obtain as quickly
              as possible, if such approval is then required), prepay in full
              and on last day of the current Interest Period or the passage of
              sixty (60) Business Days, whichever is later, unless the effect of
              the Applicable Law, request or contingency requires earlier or
              immediate repayment, in which case, on such earlier date or
              immediately, as relevant, that portion of the Outstanding Balance
              affected thereby together with all accrued interest and amounts
              due under Section 10 (Increased Costs) (if any) thereon and all
              amounts, if any, determined by the Lender to be payable to it
              pursuant to Section 12 (Breakage) hereof.

       11.2   NOTICE OF ILLEGALITY

              If Section 11.1 (Illegality) is applicable, the Lender shall
              forthwith so notify the Borrower, by means of a certificate which
              specifies in reasonable detail the nature of such illegality or
              impossibility. The Lender will use its best efforts, and will
              discuss the same with the Borrower, in order to designate a
              different lending office and transfer the Outstanding Balance (or
              any portion thereof) thereto if such designation and transfer will
              avoid the need for giving such notice and will not, in the
              Lender's good faith judgment, be otherwise disadvantageous to the
              Lender. If such best efforts do not result in the transfer of the
              Outstanding Balance to a new lending office, then the Outstanding
              Balance shall be repaid in full in accordance with Section 11.1
              (Illegality).

12.    BREAKAGE

       12.1   INDEMNITY FOR BREAKAGE COSTS

              The Borrower hereby agrees to indemnify the Lender against any
              loss or expense that the Lender actually sustains or incurs as a
              consequence of:

              (a)    any failure to make a voluntary prepayment after notice of
                     prepayment has been given by the Borrower;

              (b)    any prepayment of the Outstanding Balance required by any
                     provision of this Agreement;
<PAGE>

                                                                              27

              (c)    any payment made on a date other than the last day of the
                     Interest Period applicable thereto,

              (d)    any voluntary prepayment,

              (e)    any default in payment or prepayment of the Outstanding
                     Balance or any part thereof (including accrued interest),
                     as and when due and payable (at the due date thereof, by
                     notice of prepayment or otherwise), or

              (f)    the occurrence of any Event of Default.

              including, in each such case, any loss or reasonable expense
              sustained or incurred in liquidating or employing deposits from
              third parties acquired to effect or maintain the Outstanding
              Balance. Notwithstanding the above, the Borrower's liability to
              indemnify the Lender pursuant to clause (d) above shall be limited
              to interest differentials incurred by the Lender in liquidating or
              employing deposits of or borrowings from third parties in
              connection with such voluntary prepayment.

       12.2   NOTIFICATION OF BREAKAGE COSTS

              A certificate of the Lender setting forth in reasonable detail any
              amount or amounts that the Lender is entitled to receive pursuant
              to this Section 12 (Breakage) and the basis for the determination
              of such amount or amounts shall be delivered to the Borrower and
              shall be conclusive and binding absent manifest error.

13.    FEES

       The Borrower shall pay to the Lender all fees and other expenses incurred
       by the Lender in connection with this Agreement. In the event the
       Outstanding Balance is syndicated, pursuant to Section 25 (Assignment),
       an agency fee of $10,000 per annum shall be paid from the date of
       syndication and on each anniversary thereafter. All fees paid under this
       Agreement are non-refundable under all circumstances.

14.    REPRESENTATIONS AND WARRANTIES

       The Borrower hereby represents and warrants to the Lender as follows, as
       of the date of this Agreement, subject, where applicable, to the
       Arrangement, the Section 350 Proceedings, the Section 304 Proceedings,
       the stay of proceeding imposed thereunder and proceedings under Chapter
       11 regarding StarBand:

       14.1   ORGANISATION, ETC.

              (a)    The Borrower is a public company, duly organised, in and
                     validly existing under the Applicable Laws of the State of
                     Israel, possessing the capacity to sue and be sued in its
                     own name.

              (b)    Spacenet is a limited liability corporation, duly
                     organised, in and validly existing under the Applicable
                     Laws of the State of Delaware possessing the capacity to
                     sue and be sued in its own name.
<PAGE>

                                                                              28

              (c)    Each of the Borrower and Spacenet has all requisite
                     corporate power and authority to conduct its business as
                     now conducted and as presently contemplated and to
                     consummate the transactions contemplated by the Revised
                     Transaction Documents.

              (d)    Each of the Borrower and Spacenet is duly qualified to do
                     business and is in good standing in each jurisdiction in
                     which the character of the properties owned or leased by it
                     or in which the transaction of its business makes such
                     qualification necessary.

       14.2   AUTHORISATION, ETC.

              The execution, delivery and performance by the Borrower (and
              Spacenet, to the extent that Spacenet is a party to such Revised
              Transaction Documents) of each Revised Transaction Document (i)
              has been duly authorised by all necessary corporate action, (ii)
              does not contravene the memorandum or articles of association of
              the Borrower or any Applicable Law or any contractual restriction
              binding on or otherwise affecting it or any of its properties,
              (iii) will not result in or require the creation of any Security
              Interest (other than pursuant to any Revised Transaction Document)
              upon or with respect to any of its properties, and (iv) will not
              result in any suspension, revocation, impairment, forfeit or
              nonrenewal of any material permit, license, authorisation or
              approval applicable to its operations or any of its properties.

       14.3   ENFORCEABILITY OF DOCUMENTS

              (a)    Each Revised Transaction Document constitutes the legal,
                     valid and binding obligation of the Borrower (and Spacenet,
                     to the extent that Spacenet is a party to such Revised
                     Transaction Documents) enforceable in accordance with its
                     respective terms except as the enforceability thereof may
                     be limited by (i) applicable bankruptcy, insolvency,
                     reorganisation, moratorium or other similar laws affecting
                     the enforcement of creditors' rights generally; and (ii)
                     general equitable principles (regardless of whether the
                     issue of enforceability is considered in a proceeding in
                     equity or at law).

              (b)    Each Revised Transaction Document is in proper legal form
                     under the Applicable Laws of the State of Israel, and under
                     the respective governing law selected in each respective
                     Revised Transaction Document (and the jurisdiction of
                     organisation of each party thereto) for the enforcement
                     thereof.

              (c)    The Revised Transaction Documents have been duly and
                     validly executed and delivered by the Borrower (and
                     Spacenet, to the extent that Spacenet is a party to such
                     Revised Transaction Documents) and have not been amended,
                     modified, supplemented, repudiated or terminated and are in
                     full force and effect.

       14.4   GOVERNMENTAL APPROVALS; COMPLIANCE

              (a)    No authorisation or approval or other action by, and no
                     notice to any Governmental Authority or other regulatory
                     body is required in connection with the due execution,
                     delivery and performance by the Borrower or
<PAGE>

                                                                              29

                     Spacenet of any Revised Transaction Document, other than
                     the approval of the Arrangement by the Court.

              (b)    Each of the Borrower and Spacenet has all necessary
                     agreements, licenses, certificates and authorisations of
                     Governmental Authorities in order to own and operate its
                     business as currently conducted or contemplated to be
                     conducted. Other than specifically stated in the Proxy
                     Solicitation, neither the Borrower nor Spacenet are in
                     breach of or default under any such agreements, licenses,
                     certificates and authorisations.

              (c)    Neither the Borrower nor Spacenet is in violation of its
                     memorandum or articles of association, charter or by-laws,
                     any material Applicable Law or any term of any agreement or
                     instrument binding on or otherwise affecting it or any of
                     its properties, except as set forth in EXHIBIT D.

       14.5   LITIGATION

              Other than the matters disclosed on pages 46 and 47 of the Proxy
              Solicitation, [2 pages attached at EXHIBIT G], the matters
              affecting the Section 350 Proceedings and the Section 304
              Proceedings and Proceedings under Chapter 11, with regard to the
              Borrower, Spacenet and StarBand,

              (a)    no litigation, arbitration or administrative proceedings
                     are current, pending or, to the best of the Borrower's
                     knowledge, threatened against or affecting the Borrower,
                     Spacenet or StarBand, to the best of the Borrower's
                     knowledge, current, pending or threatened against any other
                     party to any Revised Transaction Document, or any of the
                     Borrower's, StarBand's or Spacenet's or their respective
                     properties, revenues or assets which have had or if
                     adversely determined, are reasonably likely to have a
                     Material Adverse Effect;

              (b)    there is no injunction, writ, preliminary restraining order
                     or any order of any nature issued by an arbitrator, court
                     or other Governmental Authority directing that any of the
                     material transactions provided for in any of the Revised
                     Transaction Documents not be consummated as herein or
                     therein provided; and

              (c)    the Borrower, Spacenet and StarBand, are not in default
                     with respect to any writ, order, decree, injunction or
                     other decision of any Governmental Authority except where
                     such default has not had and is not reasonably likely to
                     have a Material Adverse Effect.

       14.6   ADVERSE AGREEMENTS

              The Borrower and Spacenet are not parties to any agreement or
              instrument, or subject to any charter or other corporate
              restriction or any judgment, order, regulation, ruling or other
              requirement of a court or other Governmental Authority or
              regulatory body, which has caused, or in the future is reasonably
              likely to result in, a Material Adverse Effect.

<PAGE>

                                                                              30

       14.7   WINDING -UP

              (a)    Except for the Arrangement and the Chapter 11 filing by
                     StarBand, no proceedings for the bankruptcy, winding up,
                     insolvency, or reorganisation of or for any moratorium or
                     scheme of arrangement or any other similar proceedings
                     relating to the Borrower, Spacenet or StarBand, are
                     threatened, contemplated or outstanding.

              (b)    Except for the Arrangement and the Chapter 11 filing by
                     StarBand, no proceedings for the bankruptcy, winding up,
                     insolvency, or reorganisation of or for any moratorium or
                     scheme of arrangement or any other similar proceedings
                     relating to any other party to a Revised Transaction
                     Document (other than the Lender) are, to the Borrower's
                     knowledge, threatened, contemplated or outstanding which
                     have had or are reasonably likely to have a Material
                     Adverse Effect.

       14.8   TAXES

              (a)    The Borrower, Spacenet and StarBand have filed or caused to
                     be filed all Tax returns which are required to be filed by
                     each, and, all Taxes, assessments and other governmental
                     charges imposed upon them or on any of their properties and
                     which have become due and payable on or prior to the date
                     hereof have been paid, except to the extent contested in
                     good faith by proper proceedings which stay the imposition
                     of any penalty, fine or Security Interest resulting from
                     the non-payment thereof and with respect to which adequate
                     reserves have been set aside for the payment thereof.

              (b)    The Borrower, Spacenet and StarBand have no knowledge of
                     any Tax in connection with the execution and delivery of
                     and performance of its Obligations under the Revised
                     Transaction Documents or the consummation of the
                     transactions contemplated thereby other than that which is
                     set forth in the Proxy Solicitation which is reasonably
                     likely to have a Material Adverse Effect.

       14.9   ENVIRONMENT

              (a)    The operations of the Borrower and Spacenet are in
                     compliance with all Environmental Laws except where the
                     failure to be in compliance would not have a Material
                     Adverse Effect.

              (b)    There has been no Release at any of the properties owned or
                     operated by the Borrower or a predecessor in interest, or
                     at any disposal or treatment facility which received
                     Hazardous Materials generated by the Borrower or any
                     predecessor in interest except, in each case, where the
                     Release would not have a Material Adverse Effect.

              (c)    No Environmental Actions have been asserted against the
                     Borrower, Spacenet, StarBand or any predecessor in interest
                     nor does the Borrower have knowledge or notice of any
                     threatened or pending Environmental Action against the
                     Borrower or any predecessor in interest which will have a
                     Material Adverse Effect.
<PAGE>

                                                                              31

              (d)    No Environmental Actions have been asserted against any
                     facilities that may have received Hazardous Materials
                     generated by the Borrower, Spacenet, StarBand or any
                     predecessor in interest which will result in a Material
                     Adverse Effect.

       14.10  INSURANCE

              (a)    The Borrower keeps its properties adequately insured and
                     maintains: (i) insurance to such extent and against such
                     risks, including fire, as is customary with companies in
                     the same or similar businesses, (ii) workmen's compensation
                     insurance in the amount required by Applicable Law, (iii)
                     public liability insurance, including product liability
                     insurance, in the amount customary with companies in the
                     same or similar business against claims for personal injury
                     or death on properties owned, occupied or controlled by
                     them, and (iv) such other insurance as may be required by
                     Applicable Law.

              (b)    All insurances referred to in paragraph (a) above are or,
                     at the time they are required to be maintained or effected,
                     will be, in full force and effect and to the best of the
                     Borrower's knowledge no event or circumstance has occurred,
                     nor has there been any omission to disclose a fact, which
                     would in either case entitle any insurer to avoid or
                     otherwise reduce its liability under any policy relating to
                     such insurances.

       14.11  SECURITY

              (a)    The Pledge Agreement ,the Additional Pledge Agreement and
                     the Debenture confer the Security Interests they purport to
                     confer upon the Lender over all of the Collateral and such
                     Security Interests are first ranking, and except for the
                     shared Security Interests with the Other Banks with regard
                     to the Additional Collateral, are not subject to any PARI
                     PASSU Security Interests, and such agreements are not
                     liable to avoidance due to any act or circumstance of the
                     Borrower, Spacenet or StarBand, on the date of execution of
                     the Additional Pledge Agreement. Spacenet is not in the
                     process of any bankruptcy, winding-up, composition or any
                     other similar insolvency proceedings for the reorganisation
                     of its affairs.

              (b)    Other than the Security Interests created or purported to
                     be created by Spacenet under the Pledge Agreement, and
                     other than the Security Interests created or purported to
                     be created by the Borrower under the Additional Pledge
                     Agreement, the Debenture and the other Permitted Security
                     Interests, there are no other Security Interests covering
                     the Collateral and there are no obligations to create any
                     such Security Interests.

              (d)    The Pledge Agreement (including all relevant financing
                     statements and other filings under the UCC and any other
                     Applicable Law) and the Additional Pledge Agreement, were
                     duly filed, recorded and/or registered in each office and
                     in each jurisdiction where required to create, perfect and
                     maintain in full force and effect all Security Interests
                     under the Pledge Agreement and the Additional Pledge
                     Agreement.
<PAGE>

                                                                              32

              (e)    Spacenet is the sole legal and beneficial owner of the
                     StarBand Pledged Stock and there are no covenants,
                     agreements, stipulations, reservations, conditions,
                     interests, rights or other matters whatsoever which
                     adversely affect the StarBand Pledged Stock. Spacenet has
                     received no notice of any adverse claim by any Person in
                     respect of the ownership of the StarBand Pledged Stock or
                     any interest in it.

              (f)    The Borrower is the sole legal and beneficial owner of the
                     Additional Spacenet Pledged Shares and other than the PARI
                     PASSU Security Interest Sharing Agreement with the Other
                     Banks and the other Permitted Security Interests, there are
                     no covenants, agreements, stipulations, reservations,
                     conditions, interests, rights or other matters whatsoever
                     which adversely affect the Spacenet Pledged Shares. The
                     Borrower has received no notice of any adverse claim by any
                     Person in respect of the ownership of the Spacenet Pledged
                     Shares or any interest in it.

       14.12  SPACENET

              The Borrower is the sole legal and beneficial owner of all of the
              issued and outstanding Capital Stock of Spacenet, free and clear
              of all Security Interests. There are no pre-emptive or other
              outstanding rights, options, warrants, conversion rights or
              agreements or commitment to issue or sell any shares of capital
              stock of Spacenet or any securities or obligations convertible
              into, or exchangeable for, or giving any person the right to
              subscribe for or acquire, any shares of Capital Stock of Spacenet
              and no securities or obligations evidencing such rights are
              outstanding.

       14.13  FINANCIAL CONDITION

              The Borrower has furnished to the Lender copies of the Selected
              Consolidated Financial Information included in the Proxy
              Solicitation (pages 36 through 46, attached hereto as EXHIBIT H)
              including, but not limited to, the financial information of the
              Borrower dated September 30, 2002, as well as financial
              information of Spacenet as of September 30, 2002, attached hereto
              as EXHIBIT I. Such financial information:

              (a)    has been prepared in accordance with U.S. GAAP.;

              (b)    has been (in the case of audited financial statements)
                     audited by the Borrower's and Spacenet's auditors;

              (c)    is true, correct, complete and accurate in all material
                     respects as of the dates specified therein; and

              (d)    fully and fairly represents the financial condition and
                     state of affairs of the Borrower and Spacenet as at the
                     date to which it was drawn up and for the periods specified
                     therein and the results of their respective financial
                     operations during such period,

              and there has been no change in the financial condition of the
              Borrower Spacenet , to the best knowledge of the Borrower and
              Spacenet, that has had or could reasonably be expected to have a
              Material Adverse Effect since the date to which those financial
              statements mentioned above were drawn up.

<PAGE>

                                                                              33

              The Borrower has furnished to the Lender a draft business plan,
              which has as yet not been approved by the authorized organ of the
              Borrower. Borrower is entitled to materially modify or amend said
              draft business plan until June 30, 2003, and shall subsequently
              update, amend or modify it on annual bases.

              After giving effect to the transactions contemplated or required
              to occur by the terms of this Agreement as of the Effective Date,
              the Borrower is, individually and together with Spacenet and its
              other Subsidiaries, solvent, i.e. is able to meet its financial
              obligations when due.

       14.14  OBLIGATIONS

              The Obligations of the Borrower hereunder constitute direct,
              unconditional, and general obligations of the Borrower and carry a
              first ranking as to priority of payment to all other Indebtedness
              of the Borrower except for the indebtedness to the Other Banks
              covered by the Security Interest Sharing AGREEMENT, and
              obligations mandatorily preferred by law applying to companies
              generally. Except with respect to Permitted Security Interests,
              the Borrower has not secured or agreed to secure any such other
              Indebtedness by any Security Interest upon any of its present or
              future revenues or assets or capital stock.

       14.15  EVENT OF DEFAULT

              No Event of Default or Potential Event of Default has occurred.

       14.16  ACCURACY AND FULL DISCLOSURE

              (a)    No Revised Transaction Document or schedule or exhibit
                     thereto and no certificate, report, statement or other
                     document or information furnished in writing by or on
                     behalf of the Borrower to the Lender in connection herewith
                     or with the consummation of the transactions contemplated
                     hereby, contains any material misstatement of fact or omits
                     to state a material fact or any fact necessary to make the
                     statements contained herein or therein not misleading in
                     any material respect.

              (b)    The rights and remedies of the Lender in relation to any
                     misrepresentations or breach of warranty on the part of the
                     Borrower shall not be prejudiced by any investigation by or
                     on behalf of the Lender into the affairs of the Borrower,
                     by the execution, delivery or performance of any other
                     Revised Transaction Document or by any other act or thing
                     which may be done by or on behalf of the Lender or any of
                     them in connection with any Revised Transaction Document
                     and which might, apart from this paragraph, prejudice such
                     rights and remedies.

              (c)    All of the information which is required to be scheduled to
                     this Agreement on the date hereof is set forth in the
                     Schedules attached hereto, is correct and accurate in all
                     material respects and does not omit to state any
                     information material thereto.

<PAGE>

                                                                              34

15.    COVENANTS OF THE BORROWER

       The Borrower hereby undertakes, so long as any Outstanding Balance (or a
       portion thereof) (whether or not due) shall remain unpaid, unless the
       Lender shall otherwise consent in writing:

       15.1   REPORTING REQUIREMENTS

              The Borrower shall furnish to the Lender:

              (a)    as soon as available and in any event within sixty (60)
                     days after the end of each of the first three fiscal
                     quarters of each fiscal year of each of the Borrower,
                     Spacenet and StarBand, if available, internally prepared
                     consolidated balance sheets, quarterly profit and loss
                     statements of the Borrower, Spacenet and StarBand, as at
                     the end of such fiscal quarter; and for the period
                     commencing at the end of the immediately preceding fiscal
                     year and ending with the end of such fiscal quarter,
                     setting forth in each case in comparative form the figures
                     for the corresponding date or period of the immediately
                     preceding fiscal year, all in reasonable detail and
                     certified by the chief financial officer of the Borrower,
                     Spacenet or StarBand (or, with regard to StarBand, in the
                     absence of a chief finance officer, another officer), as
                     appropriate, as fairly presenting, in all material
                     respects, the financial position of the Borrower, Spacenet
                     or StarBand, as appropriate (and any consolidated
                     Subsidiaries) as of the end of such fiscal quarter and the
                     results of operations and changes in financial position of
                     the Borrower, Spacenet or StarBand, as appropriate, for
                     such fiscal quarter, in accordance with applicable GAAP
                     applied in a manner consistent with that of the most recent
                     audited financial statements furnished to the Lender,
                     subject to year end adjustments and the absence of
                     footnotes;

              (b)    as soon as available, and in any event within ninety (90)
                     days after the end of each fiscal year of each of the
                     Borrower, Spacenet and StarBand, consolidated balance
                     sheets, consolidated profit and loss statements and cash
                     flow of the Borrower, Spacenet and StarBand, as
                     appropriate, (and any consolidated Subsidiaries), as at the
                     end of such fiscal year, setting forth in comparative form
                     the corresponding figures for the immediately preceding
                     fiscal year, all in reasonable detail and prepared in
                     accordance with applicable GAAP, and with respect to the
                     consolidated financial statements accompanied by a report
                     and an unqualified opinion prepared in accordance with
                     generally accepted auditing standards, of independent
                     certified public accountants of recognised standing
                     selected by the Borrower, Spacenet or StarBand, as
                     appropriate, and reasonably satisfactory to the Lender.

              (c)    simultaneously with the delivery of the financial
                     statements required by clauses (a) and (b) of this Section
                     15.1, a certificate of the chief financial officer of the
                     Borrower, stating that such officer has reviewed the
                     provisions of this Agreement and the other Transaction
                     Documents and has made or caused to be made under such
                     officer's supervision a review of the condition and
                     operations of the Borrower and its Subsidiaries during the
                     period covered by such financial statements with a view to
                     determining whether the Borrower and its Subsidiaries were
                     in compliance with all of the provisions of such Revised
                     Transaction Documents at the times such compliance is
<PAGE>

                                                                              35

                     required by the Revised Transaction Documents, and that
                     such review has not disclosed, and such officer has no
                     knowledge of the existence during such period of an Event
                     of Default or Potential Event of Default or, if an Event of
                     Default or such Potential Event of Default existed,
                     describing the nature and period of existence thereof and
                     the action which the Borrower and its Subsidiaries propose
                     to take or took with respect thereto;

              (d)    promptly upon their becoming available and subject to any
                     legal prohibition, a copy of (i) all consultants' reports,
                     investment bankers' reports, accountants' management
                     letters, business plans and similar documents concerning
                     the Borrower and Spacenet (and to the extent available to
                     the Borrower or Spacenet, StarBand), (ii) all reports,
                     financial statements or other information delivered by the
                     Borrower and Spacenet and StarBand to their respective
                     shareholders generally, (iii) all reports, proxy
                     statements, financial statements and other information
                     generally distributed by the Borrower, and Spacenet (and to
                     the extent available to the Borrower or Spacenet, StarBand)
                     to their respective creditors or the financial community in
                     general, and (iv) any audit or other reports submitted to
                     the Borrower and Spacenet (and to the extent available to
                     the Borrower or Spacenet, StarBand) by their respective
                     independent accountants in connection with any annual,
                     interim or special audit, and (v) all reports submitted to
                     the SEC;

              (e)    promptly after submission to any Governmental Authority,
                     all documents and information furnished to such
                     Governmental Authority in connection with any investigation
                     of the Borrower, Spacenet or StarBand other than routine
                     inquiries by such Governmental Authority;

              (g)    as soon as possible, and in any event within three (3)
                     Business Days after the occurrence of an Event of Default,
                     Potential Event of Default or event having a Material
                     Adverse Effect, the written statement of the chief
                     executive officer or the chief financial officer of the
                     Borrower, setting forth the details of such Event of
                     Default, Potential Event of Default or event and the action
                     which the Borrower proposes to take with respect thereto;

              (h)    promptly after the commencement of thereof, but in any
                     event not later than three (3) Business Days after service
                     of process with respect thereto on, or the obtaining of
                     knowledge thereof by, the Borrower, written notice of each
                     action, suit or proceeding before any court or other
                     Governmental Authority or other regulatory body or any
                     arbitrator involving the Borrower, Spacenet or StarBand
                     which could have a Material Adverse Effect; and

              (i)    promptly after the execution of this Agreement, (1)
                     quarterly statements concerning the conditions of
                     operations and the Borrower's compliance with the financial
                     covenants of this Agreement as set forth in Section 15.20
                     (b) below and with the business plan referred to in Section
                     14.13. above, compliance with said financial covenants, to
                     be certified by the chief financial officer of the
                     Borrower, (2) quarterly statements of backlog (projected
                     and actually submitted to the Borrower and its
                     Subsidiaries), (3) quarterly statements listing the
                     outstanding balances of major creditors and debtors of the
                     Borrower, (4) monthly cash flow data, (5) quarterly reports
                     on capital expenditures exceeding $500,000, and (6) such
                     other financial information, of
<PAGE>

                                                                              36

                     the Borrower, Spacenet and StarBand that the Lender may
                     reasonably request once each calendar quarter.

       15.2   KEEPING OF RECORDS AND BOOKS OF ACCOUNT

              The Borrower shall keep, and cause Spacenet to keep, adequate
              records and books of account, with complete entries made in
              accordance with applicable GAAP.

       15.3   INSPECTION RIGHTS

              The Borrower shall permit, and cause Spacenet to permit, the
              Lender, or any agents or representatives thereof at any time and
              from time to time upon reasonable notice to the Borrower, during
              normal business hours, to examine and make copies of and abstracts
              from their records and books of account, to visit and inspect
              their properties, to conduct audits, physical counts, valuations
              or examinations and to discuss their affairs, finances and
              accounts with any of the directors, officers, managerial
              employees, independent accountants or other representatives
              thereof provided that (i) the foregoing shall be in a manner so as
              to not unduly disrupt the business of the Borrower and Spacenet
              and (ii) such notice shall not be required if an Event of Default
              has occurred and is continuing.

       15.4   PRESERVATION OF EXISTENCE

              The Borrower shall maintain and preserve, and cause each
              Subsidiary to maintain and preserve, its existence, rights and
              privileges, and become or remain duly qualified and in good
              standing in each jurisdiction in which the character of the
              properties owned or leased by them or in which the transaction of
              their business makes such qualification necessary, except where
              the failure to preserve its rights and privileges and to qualify
              and be in good standing would not have a Material Adverse Effect.

       15.5   COMPLIANCE WITH LAWS

              (a)    The Borrower shall comply, and cause Spacenet and each
                     other Subsidiary to comply, with all applicable material
                     laws, rules, regulations and orders, such compliance to
                     include, without limitation, (i) paying before the same
                     become delinquent all Taxes, assessments and governmental
                     charges or levies imposed upon it or upon its income or
                     profits or upon any of its properties, and (ii) paying all
                     lawful claims arising under such laws which if unpaid might
                     become a Security Interest upon any of its properties,
                     except to the extent contested in good faith by proper
                     proceedings which stay the imposition of any penalty, fine
                     or Security Interest resulting from the non-payment thereof
                     and with respect to which adequate reserves have been set
                     aside for the payment thereof and except, solely with
                     respect to Subsidiaries of the Borrower other than
                     Spacenet, to the extent that any such non-compliance
                     (singly or in the aggregate with other non-compliance)
                     would not have a Material Adverse Effect.

              (b)    The Borrower shall obtain, maintain and preserve, and cause
                     each of its Subsidiaries to obtain, maintain and preserve,
                     all permits licenses, authorisations, approvals,
                     entitlements and accreditations which are necessary in the
                     proper conduct of their business and if the failure to
                     obtain same could cause a Material Adverse Effect.
<PAGE>

                                                                              37

       15.6   MAINTENANCE OF PROPERTIES

              The Borrower shall maintain and preserve all of its properties
              which are necessary or useful in the proper conduct of their
              business in good working order and condition, ordinary wear and
              tear and damage due to casualty excepted.

       15.7   NO DISTRIBUTIONS

              The Borrower shall not make any distributions, as the term is
              defined in the Companies Law 1999, to its shareholders out of
              earnings or reserves, without the prior consent of the Lender.

       15.8   The Borrower undertakes to see to it that the Security Interest
              granted to the Lender in the Additional Pledge Agreement over the
              Additional Collateral shall be duly perfected, filed, recorded
              and/or registered with the Companies Registrar and in each office
              and in each jurisdiction where required to create, perfect and
              maintain in full force and effect all Security Interest under the
              Additional Pledge Agreement.

       15.9   CREATION OF SECURITY INTERESTS

              The Borrower shall not create or suffer to exist, or permit any of
              its Subsidiaries to create or suffer to exist any Security
              Interest upon or with respect to the Collateral other then the
              Permitted Security Interests.

       15.10  SECURITY

              (a)    The Borrower shall, and shall cause Spacenet to, defend the
                     Collateral or cause the Collateral to be defended against,
                     and shall take, at its expense, any action necessary to
                     remove any Security Interest (other than Permitted Security
                     Interests) over the Collateral, and shall defend the right,
                     title and interest of the Lender in and to the Collateral
                     against the claims and demands of all other Persons.

              (b)    The Borrower shall, and shall cause Spacenet to, maintain
                     all Security Interests created under the Pledge Agreement
                     in favour of the Lender and will effect all registrations
                     relating thereto.

       15.11  MERGER

              The Borrower shall not merge or consolidate with any Person, or
              permit Spacenet to merge or consolidate with, any Person;
              provided, however, that the Borrower or Spacenet may be merged
              with or into another Person, or may consolidate with another
              Person, so long as:

              (a)    to the extent permitted by Applicable Law, the Borrower or
                     Spacenet gives the Lender at least 30 days' prior written
                     notice of such merger or consolidation;

              (b)    the Borrower or Spacenet shall be the surviving entity in
                     such merger or consolidation;

<PAGE>

                                                                              38

              (c)    no Potential Event of Default or Event of Default shall
                     have occurred and be continuing either immediately before
                     or immediately after giving effect to such merger or
                     consolidation; or

              (d)    such merger or consolidation will not have a Material
                     Adverse Effect.

       15.12  LIQUIDATION

              Except with regard to Chapter 11 Proceedings concerning StarBand,
              the Arrangement, the Section 350 Proceedings and the Section 304
              Proceedings, the Borrower shall not and shall not permit Spacenet
              or any of its other Subsidiaries to enter into any voluntary
              liquidation, bankruptcy, winding up or dissolution except, solely
              with respect to Subsidiaries of the Borrower other than Spacenet,
              to the extent that any such voluntary liquidation, bankruptcy,
              winding up or dissolution would not (singly or in the aggregate
              with other such actions) have a Material Adverse Effect.

       15.13  ASSETS

              The Borrower shall not and shall not permit Spacenet and any of
              the Borrower's Subsidiaries to sell, assign, lease or otherwise
              transfer or dispose of, any of its properties, rights or other
              assets whether now owned or hereafter acquired to any Person,
              other than the sale or other disposition of assets either for fair
              market value or where such sale or other disposition would not
              (singly or in the aggregate with other sales or dispositions) have
              a Material Adverse Effect.

       15.14  SPACENET

              (a)    The Borrower shall not sell or grant any pre-emptive
                     rights, options, conversion rights or agreements or
                     commitment to sell any Capital Stock of Spacenet or any
                     other right in any Capital Stock of Spacenet.

              (b)    The Borrower shall procure that Spacenet shall not issue or
                     undertake to issue any Capital Stock of Spacenet or grant
                     any pre-emptive rights, options, conversion rights or
                     agreements or commitment to issue Capital Stock of Spacenet
                     or any securities or obligations convertible into, or
                     exchangeable for, or giving any person the right to
                     subscribe for or acquire, any shares of Capital Stock of
                     Spacenet.

              (c)    The Borrower shall grant the Lender an irrevocable Power of
                     Attorney to act to preserve the Lender's rights over the
                     Collateral, in the event that in the reasonable and sole
                     judgement of the Lender, the Borrower has not met its
                     obligations under Section 15.10 above .

       15.15  MAINTENANCE OF INSURANCE

              The Borrower shall maintain and shall cause Spacenet to maintain,
              with responsible and reputable insurance companies or
              associations, insurance (including, without limitation,
              comprehensive general liability and property and casualty
              insurance) with respect to its property and business, in such
              amounts and covering such risks, as is required by any
              Governmental Authority or other regulatory body having
              jurisdiction
<PAGE>

                                                                              39

              with respect thereto and as is carried generally in accordance
              with sound business practice by companies in similar businesses
              similarly situated.

       15.16  ENVIRONMENTAL

              The Borrower shall and shall procure that Spacenet shall:

              (a)    keep any property either owned or operated by it free of
                     any Security Interests arising under any Environmental
                     Laws;

              (b)    comply with Environmental Laws except where the failure to
                     comply would not have a Material Adverse Effect and provide
                     to the Lender documentation of such compliance which the
                     Lender reasonably requests;

              (c)    promptly notify the Lender of any Release of a Hazardous
                     Material in excess of any reportable quantity and take any
                     Remedial Actions required by Governmental Authorities to
                     abate said Release; and

              (d)    promptly provide the Lender with written notice within ten
                     (10) days of the receipt of any Environmental Action or
                     notice that an Environmental Action will be filed against
                     the Borrower.

       15.17  DEFAULT, MATERIAL ADVERSE EFFECT

              The Borrower shall provide the Lender with prompt written notice
              of any Event of Default, Potential Event of Default or Material
              Adverse Effect.

       15.18  CHANGE IN BUSINESS

              Except with the prior written consent of the Lender, the Borrower
              will not, and will procure that no Subsidiary of the Borrower
              will, make, or agree or threaten to make any change in the nature
              of its business activities as presently conducted, or carry on any
              other business other than its business as presently conducted
              except, solely with respect to Subsidiaries of the Borrower other
              than Spacenet, to the extent that any such change would not
              (singly or in the aggregate with any other such changes) have a
              Material Adverse Effect.

       15.19  FURTHER ASSURANCES

              The Borrower shall, and shall procure that its Subsidiaries shall,
              execute, acknowledge, and deliver, at the sole cost and expense of
              the Borrower, all such further acts, deeds, conveyances,
              mortgages, assignments, estoppel certificates, financing
              statements, notices of assignment and assurances as the Lender may
              reasonably require from time to time in order to:

              (a)    carry out more effectively the purposes of this Agreement
                     and the other Revised Transaction Documents,

              (b)    subject the Collateral to valid and perfected first
                     priority Security Interests or other Permitted Security
                     Interests;
<PAGE>

                                                                              40

              (c)    better assure, convey, grant, assign, transfer and conform
                     unto the Lender the rights now or hereafter intended to be
                     granted to the Lender under this Agreement, any Revised
                     Transaction Document or any other instrument under which
                     the Borrower may be or may hereafter become bound for
                     carrying out the intention or facilitating the performance
                     of the terms of the Agreement.

       15.20  OTHER ASSURANCES AND FINANCIAL COVENANTS

              (a)    The Borrower undertakes that it and any of its Subsidiaries
                     shall not create or permit to subsist any Security
                     Interests over all or any of the present or future
                     Indebtedness or any present or future liabilities for
                     taxes, of the Borrower or any other person, other than
                     Permitted Security Interests.

              (b)    Unless otherwise agreed to in advance and in writing by the
                     Lender, the Borrower undertakes that it shall maintain at
                     all times:

                     (i)    a Shareholders' Equity to Total Assets ratio of no
                            less than 15%; and

                     (ii)   a minimum level of cash and cash equivalents with a
                            value of US$30,000,000 (Thirty million United States
                            Dollars) as part of its Current Assets.

              For the purposes of this sub-section (b):

              "Shareholders' Equity" shall mean the Total Shareholders' Equity
              according to its meaning consistent with the most recent
              consolidated financial statements of the Borrower required to be
              delivered to the Lender pursuant to Section 15.1 above.

              "Total Assets", and "Current Assets" and "cash and cash
              equivalents" shall be given their respective meanings consistent
              with the most recent consolidated financial statements of the
              Borrower required to be delivered to the Lender pursuant to
              Section 15.1 above.


       All of the above undertakings (and any undertakings or restrictions in
       any other clause hereof) are cumulative, and accordingly none of them
       shall (except to the extent expressly stated) be limited by any exception
       to any other undertaking or by implication from the terms of any other
       undertaking.

       15.21  COVENANTS GRANTED TO OTHER PARTIES

              The Borrower undertakes to amend this Agreement so as to grant the
              Lender covenants of any type equal or identical to any covenants
              agreed to with any lender to or creditor of the Borrower in any
              agreement, to the extent the covenants at issue are superior to
              the covenants contained in this Section 15. The Borrower shall
              notify the Lender of such change no later than 7 working days
              after the execution of the other agreement.

<PAGE>

                                                                              41

       15.22  REPURCHASE UPON CHANGE OF CONTROL

              Upon the occurrence of a "change of control", as defined in the
              Proxy Solicitation, no advance repayment of any funds owed at such
              time to the New Noteholders (other than the payment of the
              regularly scheduled payments), and no repurchase in cash of the
              New Notes shall be permitted unless the Outstanding Balance, as
              well as any other loan owed to the Lender and any of the Other
              Banks, is paid in full, contemporaneously with any such repurchase
              or repayment in cash.

16.    EVENTS OF DEFAULT

       Each of the following events occuring after the Effective Date shall
       constitute an Event of Default:

       16.1   NON-PAYMENT

              The Borrower shall fail to pay:

              (a)    any Principal Instalment Amount or accrued interest when
                     due; or

              (b)    any Outstanding Balance when due (whether by scheduled
                     maturity, required prepayment, acceleration, demand or
                     otherwise); or

              (c)    any fee or other amount payable under the Revised
                     Transaction Documents within three (3) Business Days after
                     the due date thereof.

       16.2   REPRESENTATIONS AND WARRANTIES

              Any representation or warranty made by the Borrower, Spacenet or
              any officer of the Borrower or Spacenet under or in connection
              with any Revised Transaction Document shall have been incorrect in
              any material respect when made.

       16.3   NON-PERFORMANCE

              The Borrower or Spacenet shall default in the performance or
              observance of:

              (a)    the covenants contained in Section 15 of this Agreement;

              (b)    any other covenant contained in this Agreement and such
                     default shall continue unremedied for a period of ten (10)
                     days.

       16.4   OTHER DEFAULT

              The Borrower or Spacenet shall fail to perform or observe any
              other term, covenant or agreement contained in any Revised
              Transaction Document to be performed or observed by the Borrower
              or Spacenet (other than under Section 16.3), as appropriate, and
              such failure, if capable of being remedied, shall remain
              unremedied for twenty (20) days.
<PAGE>

                                                                              42

       16.5   CROSS DEFAULT

              The Borrower or Spacenet shall fail to pay any principal or
              interest on any of its Indebtedness (excluding Indebtedness
              created hereby) in excess of $2,000,000, or any interest or
              premium thereon, when due (whether by scheduled maturity, required
              payment, acceleration, demand or otherwise) and such failure shall
              continue after the applicable grace period, if any, specified in
              the agreement or instrument relating to such Indebtedness, or any
              other default under any agreement or instrument relating to any
              such Indebtedness, or any other event, shall occur and shall
              continue after the applicable grace period, if any, specified in
              such agreement or instrument, if the effect of such default or
              event is to accelerate, or to permit the acceleration of the
              maturity of such Indebtedness; or any such Indebtedness in excess
              of such amount shall be declared to be due and payable, or
              required to be prepaid (other than by a regularly scheduled
              required prepayment), prior to the stated maturity thereof.

       16.6   LIQUIDATION

              (a)    The Borrower or any other party to the Revised Transaction
                     Documents (other than the Lender and StarBand):

                     (i)    commits an act of bankruptcy (provided that it shall
                            not be an Event of Default for the Borrower or
                            Spacenet to notify a creditor of its intention not
                            to pay a debt when due where such non-payment is not
                            due to the Borrower's or Spacenet's inability to pay
                            such debt);

                     (ii)   is, or is deemed for the purposes of any law to be,
                            generally unable to pay its debts as they fall due
                            or to be insolvent; or

                     (iii)  admits a general inability to pay its debts as they
                            fall due or notifies its creditors of a general
                            intention not to pay its debts when due.

              (b)    The Borrower or any other party to the Revised Transaction
                     Documents (other than the Lender or StarBand) suspends
                     making payments on all or any class of its debts or
                     announces an intention to do so, or a moratorium is
                     declared in respect of any of its indebtedness.

              (c)    Any step (including petition, proposal or convening a
                     meeting), other than the Arrangement, is taken with a view
                     to a composition, assignment or arrangement with any
                     creditors of the Borrower or any other party to the Revised
                     Transaction Documents (other than the Lender and StarBand).

              (d)    With the exception of the Arrangement, any order
                     (provisional or otherwise) is made or resolution passed
                     for, or any step (including petition, proposal or convening
                     a meeting) is taken by the Borrower or any other party to
                     the Revised Transaction Documents (other than the Lender
                     and StarBand) with a view to the liquidation,
                     administration, winding up, entry into receivership,
                     re-organisation, dissolution or any other insolvency
                     proceedings of the Borrower or any other party to the
                     Revised Transaction Documents (other than the Lender and
                     StarBand).
<PAGE>

                                                                              43

              (e)    Any Person presents a petition which is not withdrawn or
                     set aside within forty-five (45) days for the winding-up,
                     liquidation, bankruptcy, receivership, reorganisation or
                     for the administration of the Borrower or any other party
                     to the Revised Transaction Documents (other than the Lender
                     and other than StarBand).


       16.7   APPOINTMENT OF RECEIVERS AND MANAGERS

              (a)    Any permanent or interim liquidator, trustee in bankruptcy,
                     judicial custodian, compulsory manager, receiver,
                     administrator or the like is appointed in respect of the
                     Borrower or any other party to the Revised Transaction
                     Documents (other than the Lender and StarBand) over all or
                     any part of their respective assets.

              (b)    Any Person requests the appointment of a permanent or
                     interim liquidator, trustee in bankruptcy, judicial
                     custodian, compulsory manager, receiver, administrator or
                     the like for the Borrower or any other party to the
                     Transaction Documents (other than the Lender and StarBand).

       16.8   CREDITORS' PROCESS

              Any distress, execution, attachment, sequestration, or other
              proceeding affecting any material asset (irrespective of the
              actual value of such asset) of the Borrower or any other party to
              the Revised Transaction Documents (other than the Lender and
              StarBand) is initiated and, if such proceeding is being contested
              in good faith by appropriate proceedings and is not removed,
              discharged or paid out within thirty (30) days after the
              initiation thereof or such shorter period as may render such asset
              liable to forfeiture, seizure or sale.

       16.9   ANALOGOUS PROCEEDINGS

              There occurs, in relation to the Borrower or any other party to
              the Revised Transaction Documents (other than the Lender and
              StarBand), any event anywhere which, in the opinion of the Lender,
              is similar or substantially equivalent to any of those mentioned
              in Sections 16.6 through 16.8 of this Agreement (inclusive).

       16.10  REVISED TRANSACTION DOCUMENTS

              Any Revised Transaction Document, other than the Pledge Agreement
              as a result of the proceedings under Chapter 11 and their outcome,
              or any material provision thereof (as determined by the Lender):

              (a)    is terminated (other than by expiration of its stated
                     term), repudiated or cancelled other than in accordance
                     with the Revised transaction Documents;

              (b)    is or becomes invalid, illegal or unenforceable or any
                     party thereto (other than the Lender) or any Governmental
                     Authority shall so assert in writing; or

              (c)    ceases to be in full force and effect or is assigned or
                     otherwise transferred, amended or prematurely terminated
                     other than as permitted under the Revised Transaction
                     Documents, or shall cease to give the Lender the Security
<PAGE>

                                                                              44

                     Interests, rights, powers and privileges purported to be
                     created thereby or any party thereto (other than the
                     Lender) shall so assert in writing.

       16.11  MATERIAL ADVERSE EFFECT AND FAILURE TO COMPLY WITH BUSINESS PLAN

              Any event, condition or circumstance or series of events,
              conditions or circumstances occurs which, in the reasonable
              opinion of the Lender, has had or could reasonably be expected to
              have a Material Adverse Effect, or if the Borrower were to fail to
              meet the targets of its business plan referred to in Section 14.13
              above in any material fashion.

       16.12  EFFECTIVENESS OF SECURITY

              The Debenture or the Additional Pledge Agreement do not create, or
              at any time, any Security Interest created by the Debenture or the
              Additional Pledge Agreement ceases to be, a valid and perfected
              first priority Security Interest in the Collateral covered
              thereby, or granting the PARI PASSU priority rights of the
              Additional Collateral, other than in the Security Interest Sharing
              Agreement or is otherwise ineffective or any party thereto (other
              than the Lender) shall so assert in writing.

17.    REMEDIES ON EVENT OF DEFAULT

       17.1   REMEDIES

              At any time when an Event of Default has occurred and is
              continuing, the Lender may:

              (a)    declare (without presentment, demand, protest or notice of
                     any kind all of which are hereby expressly waived by the
                     Borrower) the Agreement terminated in whole or in part,
                     whereby the Agreement or any part thereof so terminated
                     shall be considered null and void;

              (b)    declare that all or part of the Outstanding Balance, and
                     all other amounts payable under this Agreement be payable
                     on demand, whereupon they shall immediately and without
                     presentment, demand, protest or notice of any kind all of
                     which are hereby expressly waived by the Borrower, become
                     payable on demand by the Lender;

              (c)    declare the Outstanding Balance, and all other amounts
                     payable under this Agreement to be forthwith due and
                     payable, whereupon the Outstanding Balance, and all such
                     amounts shall become and be forthwith due and payable,
                     without presentment, demand, protest or further notice of
                     any kind, all of which are hereby expressly waived by the
                     Borrower;

              (d)    proceed to enforce or exercise any Security Interest
                     created by the Borrower or Spacenet in favour of the
                     Lender; and

              (f)    exercise any and all of its other rights under Applicable
                     Law, hereunder and under the other Revised Transaction
                     Documents.
<PAGE>

                                                                              45

       17.2   AUTOMATIC ACCELERATION

              Notwithstanding Section 17.1 above, upon the occurrence of any
              Event of Default described in Sections 16.6, 16.7, 16.8, 16.9 or
              16.11, the Outstanding Balance, and all other amounts payable
              under this Agreement shall become and be forthwith due and
              payable, without presentment, demand, protest or further notice of
              any kind, all of which are expressly waived by the Borrower.

18.    COSTS AND EXPENSES

       18.1   INITIAL COSTS

              The Borrower shall, whether or not the transactions contemplated
              in the Revised Transaction Documents are consummated, forthwith on
              demand pay the Lender, on a full indemnity basis, the legal fees,
              including VAT, and expenses incurred by the Lender in connection
              with:

              (a)    the preparation, review, registration, execution and
                     delivery of the revised Transaction Documents and any other
                     related documentation;

              (b)    any amendment, modification, waiver, consent or suspension
                     of rights (or any proposal for any of the foregoing) in
                     connection with or ongoing administration of any Revised
                     Transaction Document or any document referred to in any
                     Revised Transaction Document or related thereto;

              (c)    the filing and registration (where appropriate) and
                     delivery of evidence of the Indebtedness relating to the
                     Outstanding Balance, and

              (d)    All legal fees incurred by the Lender in connection with
                     the Arrangement.

       18.2   ENFORCEMENT COSTS

              The Borrower shall, whether or not the transactions contemplated
              in the Revised Transaction Documents are consummated, forthwith on
              demand pay to the Lender, on a full indemnity basis, the amount of
              all costs and expenses (including any VAT thereon and including,
              but not limited to, costs and expenses of the Lender's legal,
              technical and other professional advisers and any other out of
              pocket expenses) incurred by the Lender:

              (a)    in connection with the enforcement of, or the preservation
                     of any rights and remedies under, any of the Revised
                     Transaction Documents; and

              (b)    in investigating any possible Event of Default or Potential
                     Default; and

              (c)    in any attempt to collect from the Borrower amounts owed
                     hereunder or under any other Revised Transaction Document.
<PAGE>

                                                                              46

19.    STAMP DUTIES

       The Borrower shall pay, and forthwith on demand indemnify the Lender
       against any liability that the Lender incurs in respect of, any stamp,
       registration, filing and similar tax or fee which is or becomes payable
       in connection with the entry into, registration, recording, performance
       or enforcement of any Revised Transaction Document.

20.    SET-OFF

       The Lender may, and is hereby authorised to, at any time and from time to
       time, without notice to the Borrower (any such notice being expressly
       waived by the borrower) and to the fullest permitted by law, set off and
       apply any and all deposits (general or special, time or demand,
       provisional or final) at any time held and other indebtedness at any time
       owing by the Lender to or for the credit or the account of the Borrower
       against any and all Obligations of the Borrower now or hereafter existing
       under any Revised Transaction Document, irrespective of whether or not
       the Lender shall have made any demand hereunder or thereunder and
       although such Obligations may be contingent or unmatured. Such set-off
       shall be subject to the provisions of Section 7.6. The Lender agrees to
       notify the Borrower promptly after any such set-off and application made
       by the Lender provided that the failure to give such notice shall not
       affect the validity of such set-off and application. The rights of the
       Lender under this Section 20 (Set-Off) are in addition to the other
       rights and remedies (including, without limitation, other rights of
       set-off) which the Lender may have.

21.    SEVERABILITY

       If a provision of a Revised Transaction Document is or becomes illegal,
       invalid or unenforceable in any jurisdiction, that shall not affect:

       (a)    the validity or enforceability in that jurisdiction of any other
              provision of the Revised Transaction Documents; or

       (b)    the validity or enforceability in other jurisdictions of that or
              any other provision of the Revised Transaction Documents.

       Where provisions of any Applicable Law resulting in such illegality,
       invalidity or unenforceability may be waived, they are hereby waived by
       Borrower and the Lender to the full extent permitted by Applicable Law so
       that the Revised Transaction Documents shall be deemed valid and binding
       agreements, in each case enforceable in accordance with their respective
       terms.

22.    WAIVERS AND REMEDIES CUMULATIVE

       22.1   The rights, powers and remedies of the Lender under the Revised
              Transaction Documents may be exercised as often as necessary, are
              cumulative and not exclusive of its rights, powers and remedies
              under the general law or which such Lender would otherwise have
              and may be waived only in writing and specifically.

       22.2   No course of dealing between the Borrower and the Lender, nor any
              delay in exercising or non-exercise of any right, power or
              privilege of the Lender shall operate as a waiver of any right,
              power or privilege of the Lender, nor shall any single or partial
              exercise of any right, power or privilege under any Revised
              Transaction Document preclude any other
<PAGE>

                                                                              47

              or further exercise thereof or the exercise of any other right,
              power or privilege thereunder. No notice to or demand on the
              Borrower in any case shall entitle the Borrower to any other or
              further notice or demand in similar or other circumstances or
              constitute a waiver of the rights of the Lender to any other or
              further action in any circumstances without notice or demand.

       22.3   The rights and remedies of the Lender under the Revised
              Transaction Documents or at law or in equity, may be pursued
              separately, successively or concurrently against Borrower or any
              collateral, at the discretion of the Lender.

23.    NOTICES

       23.1   All notices, demands, requests, consents, approvals, designations
              and other communications under or in connection with this
              Agreement ("NOTICES") shall be given in writing and, unless
              otherwise stated may be made by letter or facsimile. Any Notice
              will be deemed to be given as follows:

              (a)    if mailed (by certified mail, postage prepaid and return
                     receipt requested) upon receipt or three Business Days
                     after mailing whichever occurred first;

              (b)    if sent by overnight courier, upon receipt or two Business
                     Days after delivered to such overnight courier, whichever
                     occurs first;

              (c)    if by facsimile, when transmitted and a confirmation is
                     received.

              except that notices to the Lender pursuant to Section 2 (Facility)
              hereof shall not be effective until received by the Lender.

              However, a Notice given in accordance with the above but received
              on a day which is not a Business Day or after business hours in
              the place of receipt will only be deemed to be given on the next
              Business Day in that place.

       23.2   ADDRESSES FOR NOTICES

              The address and facsimile number of the parties for all Notices,
              and all other documents or instruments to be furnished, delivered
              or provided under or in connection with this Agreement shall be as
              follows:

<TABLE>
<CAPTION>
<S>                                  <C>
              If to the Borrower:    Gilat Satellite Networks Ltd.
                                     21 Yegia Kapayim St.
                                     Kiryat Arye, Petah Tikva,
                                     Israel 49130
                                     Attention: Mr. Eitan Winter

                                     Telephone: 972-3-9252176
                                     Telecopy: 972-3- 9213321

              With a copy to:        Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co.
                                     1 Azrieli Center
                                     Tel Aviv 67021, Israel
                                     Attention: Gene Kleinhendler, Esq.
</TABLE>
<PAGE>

                                                                              48

                                     Telephone: 972-3-6074444
                                     Telecopier: 972-3-6074422


              If to the Lender:      Bank Hapoalim B.M.
                                     Head Office
                                     Corporate Banking Division
                                     41-45 Rothschild Boulevard
                                     Tel Aviv 65784
                                     Israel

                                     Facsimile: 972-3-567-3849
                                     Attention: Mr. Tzahi Cohen

              With a copy to:        Lipa Meir & Co.
                                     4 Itamar Ben Avi Street
                                     Tel Aviv 66761 Israel
                                     Attention: Zuriel Lavie, Advocate
                                                Abraham Sofer, Esquire

                                     Telephone: 972-3-6070600
                                     Telecopier: 972-3-6070666


              or, as to each party, at such other address as shall be designated
              by such party in a written notice to the other party complying as
              to delivery with the terms of this Section 23 (Notices).

       23.3   RELIANCE

              The Lender may act without liability upon the basis of a Notice
              reasonably believed by the Lender in good faith to be from the
              Borrower (or from any officer thereof designated in writing to the
              Lender).

24.    AMENDMENTS

       No amendment or waiver of any provision of this Agreement or the other
       Revised Transaction Documents, and no consent to any departure by the
       Borrower therefrom, will in any event be effective unless the same shall
       be in writing and signed by the Borrower, the Lender and any other
       relevant party, and then such waiver or consent shall be effective only
       in the specific instance and for the specific purpose for which given.

25.    ASSIGNMENT

       25.1   ASSIGNMENT BY THE BORROWER

              The Borrower may not assign, transfer, novate or dispose of any
              of, or any interest in, its rights and/or Obligations under the
              Revised Transaction Documents except with the prior written
              consent of the Lender.
<PAGE>

                                                                              49

       25.2   ASSIGNMENT BY THE LENDER

              The Lender may assign to one or more other lenders or other
              entities all or a portion of its rights and obligations under this
              Agreement (including, without limitation, all or a portion of the
              Principal); provided, however, that:

              (a)    such assignment is in an amount which is at least
                     $5,000,000 or a multiple of $1,000,000 in excess thereof;

              (b)    each such assignment shall be of a constant, and not a
                     varying percentage of all of the assigning Lender's rights
                     and obligations under this Agreement; and

              (c)    the parties to each such assignment shall execute and
                     deliver to the Lender, for its acceptance, an assignment
                     and acceptance agreement.

              From and after the effective date of such assignment and
              acceptance agreement (i) the assignee thereafter shall become a
              "Lender" hereunder and, in addition to the rights and obligations
              hereunder held by it immediately prior to such effective date,
              have the rights and obligations hereunder that have been assigned
              to it and (ii) the assigning Lender thereunder shall to the extent
              that rights and obligations hereunder have been assigned by it,
              relinquish its rights and be released from its obligations under
              this Agreement. Any such assignment shall not adversely affect the
              Borrower's rights under this Agreement except that the assigning
              Lender shall not be responsible for the obligations assigned.

              The Lender shall maintain at its address referred to in Section 23
              (Notices) hereof a copy of each assignment and acceptance
              delivered to and accepted by it. Such copies shall be available
              for inspection by the Borrower at any reasonable time and from
              time to time upon reasonable prior notice. Upon its receipt of an
              assignment and acceptance notice executed by the Lender and an
              assignee Lender, the Lender shall give prompt notice thereof to
              the Borrower.

              Notwithstanding anything to the contrary contained in this Section
              25 (Assignment), the Lender may grant participations, in whole or
              in part, in its rights and obligations under this Agreement and
              the Outstanding Balance without notice to the Borrower and without
              restriction; provided that (i) the Lender's obligations under this
              Agreement shall remain unchanged, (ii) the Lender shall remain
              solely responsible to the other parties hereto for the performance
              of such obligations and (iii) the Borrower shall continue to deal
              solely and directly with the Lender in connection with the
              Lender's rights and obligations under this Agreement, and the
              Lender shall retain the sole right to enforce the obligations of
              the Borrower relating to the Principal.

26.    COUNTERPARTS

       This Agreement may be executed in any number of counterparts and by
       different parties hereto in separate counterparts, each of which shall be
       deemed to be an original but all of which taken together shall constitute
       one and the same agreement.

<PAGE>

                                                                              50

27.    GOVERNING LAW, JURISDICTION

       This Agreement is governed by and shall be construed in accordance with
       the laws of the State of Israel and each Party hereby irrevocably submits
       to the exclusive jurisdiction of the courts of Tel-Aviv-Jaffa in
       connection with any dispute arising out of or in connection with this
       Agreement.

28.    REINSTATEMENT

       If claim is ever made upon the Lender for repayment or recovery of any
       amount or amounts received by the Lender in payment or on account of any
       of the Obligations under this Agreement or the Revised Transaction
       Documents, the Lender shall give prompt notice of such claim to the
       Borrower, and if the Lender repays all or part of said amount by reason
       of:

       (a)    any judgment, decree or order of any court or administrative body
              having jurisdiction over the Lender or any of their property, or

       (b)    any good faith settlement or compromise of any such claim effected
              by the Lender with any such claimant,

       then and in such event the Borrower agrees that:

       (A)    any such judgment, decree, order, settlement or compromise shall
              be binding upon the Borrower notwithstanding the cancellation of
              any instrument evidencing the Obligations under this Agreement or
              the other Revised Transaction Documents or the termination of this
              Agreement or the other Revised Transaction Documents, and

       (B)    it shall be and remain liable to the Lender hereunder for the
              amount so repaid or recovered to the same extent as if such amount
              had never originally been received by the Lender.

29.    INDEMNIFICATION

       In addition to all of the Borrower's other Obligations under this
       Agreement, the Borrower agrees to defend, protect, indemnify and hold
       harmless the Lender and all of the respective officers, directors,
       employees, attorneys, consultants and agents of the Lender (collectively
       called the "INDEMNITEES") from and against any and all losses, damages,
       liabilities, obligations, penalties, fees, costs and expenses (including,
       without limitation, attorneys' fees, costs and expenses) imposed on or
       incurred by such Indemnitees, whether prior to or from and after the date
       of this Agreement, whether direct, indirect or consequential as a result
       of or arising from or relating to or in connection with any of the
       following:

       (a)    the negotiation, preparation, execution, performance or
              enforcement of this Agreement, any Revised Transaction Document or
              any other document in connection with the transactions
              contemplated by this Agreement,

       (b)    any matter relating to the financing transactions contemplated by
              this Agreement or by any document executed in connection with the
              transactions contemplated by this Agreement; or

<PAGE>

                                                                              51

       (c)    any claim, litigation, investigation or proceeding relating to any
              of the foregoing whether or not any indemnitee is a party thereto

       (collectively, the "INDEMNIFIED MATTERS"); provided, however, that the
       Borrower shall have no obligation to any Indemnitee hereunder for any
       Indemnified Matter caused by or resulting from the gross negligence or
       wilful misconduct of such Indemnitee, as determined by a final judgment
       of a court of competent jurisdiction.

       To the extent that the undertaking to indemnify, pay and hold harmless
       set forth in this Section 29 (Indemnification) may be unenforceable
       because it is in violation of any law or public policy, the Borrower
       shall contribute the maximum portion which they are permitted to pay and
       satisfy under Applicable Law, to the payment and satisfaction of all
       Indemnified Matters incurred by the Indemnitees. The Indemnity shall
       survive the repayment of the Obligations and the discharge of the
       Security Interests granted under the Revised Transaction Documents.

30.    CONFIDENTIALITY

       Upon delivering to the Lender or permitting the Lender to inspect, any
       written information pursuant to this Agreement or the other Revised
       Transaction Documents, the Lender shall treat such information as
       confidential to the extent such information is conspicuously marked
       confidential. The Lender agrees to hold such information in confidence
       from the date of disclosure thereof. Subject to the other provisions of
       this Section 30 (Confidentiality), the Lender may disclose confidential
       information to its officers, directors, employees, attorneys, accountants
       or other professionals engaged by the Lender to the extent necessary for
       the purposes of this Agreement and only after determining that such third
       party has been instructed to hold such information in confidence to the
       same extent as if it were the Lender. Notwithstanding the foregoing, the
       provisions of this Section 30 (Confidentiality) shall not apply to
       information within any one of the following categories or any combination
       thereof:

       (a)    information the substance of which, at the time of disclosure by
              the Lender, has been disclosed to or is known to any creditor
              (other than information as to which neither creditor is then under
              an obligation of nondisclosure), or any other Person other than
              (A) a director, officer, employee or agent of the Borrower or a
              professional engaged by the Borrower or (B) a Person who is then
              under an obligation of nondisclosure (otherwise than as a
              consequence of a wrongful act of the Lender),

       (b)    information that has been disclosed in the Proxy Solicitation.

       (c)    information which the Lender had in its possession prior to
              receipt thereof from the disclosing party, or

       (d)    information received by the Lender from a third party having no
              obligations of nondisclosure with respect thereto.

              Nothing contained in this Section 30 (Confidentiality) shall
              prevent any disclosure: (i) believed in good faith by the Lender
              to be required by any law or guideline or interpretation or
              application thereof by the Court, the U.S Bankruptcy Court in the
              State of Delaware, any Governmental Authority, arbitrator or grand
              jury charged with the interpretation or administration thereof or
              compliance with any request or directive of any Governmental
              Authority, arbitrator or grand jury (whether or not having the
              force of law), (ii) determined by counsel for the Lender to be
              necessary or advisable in
<PAGE>

                                                                              52

              connection with enforcement or preservation of rights under or in
              connection with this Agreement or any other Revised Transaction
              Document or (iii) of any information which has been made public by
              a Person other than the Lender. The Lender shall have the right to
              disclose any confidential information described in this Section 30
              (Confidentiality) to an assignee or prospective assignee or to a
              participant or prospective participant in the Obligations
              hereunder, provided that the assigning or selling Lender shall
              have obtained from such assignee or prospective assignee or
              participant or prospective participant an agreement to hold such
              information in confidence to the same extent as if it were the
              Lender. Furthermore, the Lender shall have the right to disclose
              any confidential information described in this Section 30
              (Confidentiality) to the Bank, any of its wholly owned
              subsidiaries or registered assigns as holder of the Option,
              provided that the Lender shall have obtained from the holder its
              agreement to hold such information in confidence to the same
              extent as if it were the Lender.



<PAGE>

                                                                              53

[Signature Page of the Amending Agreement]

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


GILAT SATELLITE NETWORKS LTD. (under a stay of proceedings), BANK HAPOALIM B.M.,
as Lender as Borrower


By:      _____________________                      By:    _____________________
Title:   _____________________                      Title: _____________________