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                                                          EXECUTION COPY


                        LORAL SPACE & COMMUNICATIONS LTD.

                                  $600,000,000

                 6% Convertible Preferred Equivalent Obligations
                                    due 2006


                          REGISTRATION RIGHTS AGREEMENT


                                                              New York, New York
                                                                November 6, 1996


Lehman Brothers Inc.
Bear, Stearns & Co. Inc.
Donaldson, Lufkin & Jenrette
  Securities Corporation
Oppenheimer & Co., Inc.
Unterberg Harris
c/o Lehman Brothers Inc.
3 World Trade Center
New York, New York 10285

Dear Sirs:

            Loral Space & Communications Ltd., a Bermuda company (the
"Company"), proposes to issue and sell to you (the "Purchasers"), upon the terms
set forth in the Purchase Agreement dated November 1, 1996 (the "Purchase
Agreement"), among the Company and the Purchasers, $600,000,000 aggregate
principal amount (including $100,000,000 principal amount as a result of the
exercise of the over-allotment option) of its 6% Convertible Preferred
Equivalent Obligations due 2006 (the "CPEOs") (the "Initial Placement"). The
CPEOs will be convertible into shares of Common Stock, $.01 par value per share,
of the Company (the "Common Stock") at the conversion price set forth in the
Final Memorandum (as defined below) and upon receipt of shareholder approval,
will be mandatorily exchangeable for shares of the Company's 6% Series C
Convertible Redeemable Preferred Stock, par value $.01 per share (the "Preferred
Shares"), having an aggregate liquidation preference equal to the aggregate
principal amount of the CPEOs outstanding at the time of such exchange. For
purposes of this Agreement, the term "Securities" shall refer to the CPEOs until
and unless shareholder approval shall have been secured for the
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issuance of the Preferred Shares, in which case, upon the issuance of the
Preferred Shares in exchange for the CPEOs, the term "Securities" shall refer to
such Preferred Shares. In satisfaction of a condition to your obligations under
the Purchase Agreement, the Company agrees with you (i) for your benefit and
(ii) for the benefit of the holders of the Securities or the shares of Common
Stock issuable upon conversion of the Securities (including you) from time to
time until such time as such Securities shall no longer constitute restricted
securities pursuant to Rule 144(k) of the Securities Act (as defined herein) or
all such Securities and shares of Common Stock issued upon conversion of such
Securities have been sold pursuant to the Shelf Registration Statement (as
defined below) (each of the foregoing a "Holder" and together the "Holders"), as
follows:

            1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following capitalized defined terms shall have the
following meanings:

            "Act" means the Securities Act of 1933 and the rules and regulations
of the Commission promulgated thereunder.

            "Affiliate" of any specified person means any other person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

            "Closing Date" has the meaning set forth in the Purchase Agreement.

            "Commission" means the Securities and Exchange Commission.

            "CPEOs" has the meaning set forth in the preamble hereto.
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            "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.

            "Final Memorandum" has the meaning set forth in the Purchase
Agreement.

            "First Closing Date" has the meaning set forth in
the Purchase Agreement.

            "Holder" has the meaning set forth in the preamble hereto.

            "Incorporated Document" means filings made by the Company with the
Commission pursuant to Section 13, 14 or 15 of the Exchange Act.

            "Indenture" means the indenture relating to the CPEOs, to be entered
into by the Company and The Bank of New York, as trustee, as the same may be
amended from time to time in accordance with the terms thereof.

            "Initial Placement" has the meaning set forth in the preamble
hereto.

            "Majority Holders" means the Holders of a majority of the aggregate
principal amount or liquidation preference, as the case may be, of Securities
registered under a Shelf Registration Statement; provided, however, that Holders
of Common Stock issued upon conversion of Securities shall be deemed to be
Holders of the aggregate principal amount or liquidation preference, as the case
may be, of Securities from which such Common Stock was converted.

            "Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering
of the securities covered by the Shelf Registration Statement.

            "Preferred Shares" has the meaning set forth in the preamble hereto.

            "Prospectus" means the prospectus included in any Shelf Registration
Statement (including a prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration statement in
reliance upon Rule 430A under the Act), as amended or supplemented by any
prospectus supplement, with respect to
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the terms of the offering of any portion of the Securities or Common Stock
issuable upon conversion thereof covered by such Shelf Registration Statement,
and all amendments and supplements to the Prospectus, including post-effective
amendments.

            "Securities" has the meaning set forth in the preamble hereto.

            "Shelf Registration" means a registration effected pursuant to
Section 2 hereof.

            "Shelf Registration Period" has the meaning set forth in Section
2(b) hereof.

            "Shelf Registration Statement" means a "shelf" registration
statement of the Company pursuant to the provisions of Section 2 hereof which
covers some or all of the Securities and the Common Stock issuable upon
conversion thereof, as applicable, on an appropriate form under Rule 415 under
the Act or any similar rule that may be adopted by the Commission, and all
amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.

            "Trustee" means the trustee with respect to the Securities under the
Indenture.

            "underwriter" means any underwriter of Securities or Common Stock
issuable upon conversion thereof in connection with an offering thereof under a
Shelf Registration Statement.

            2. Shelf Registration; Suspension of Use of Prospectus.

            (a) The Company shall prepare and, not later than 180 days following
the First Closing Date, shall file with the Commission and thereafter, but no
later than 240 days following the First Closing Date, shall use its reasonable
best efforts to cause to be declared effective under the Act a Shelf
Registration Statement relating to the offer and sale of the Securities and the
shares of Common Stock issuable upon conversion thereof by the Holders from time
to time in accordance with the methods of distribution elected by such Holders
and set forth in such Shelf Registration
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Statement. In furtherance of the foregoing, it is hereby acknowledged and agreed
that upon the issuance of the Preferred Shares upon mandatory exchange as
provided in the Indenture, the Company shall take such steps as may be
appropriate to ensure that any then current Shelf Registration Statement is
amended, or a new Shelf Registration Statement is filed and promptly declared
effective in accordance with the time limits in the first sentence of this
Section 2(a), such that the Preferred Shares may be offered and sold by the
Holders thereof from to time to the same extent as the CPEOs immediately prior
to such mandatory exchange. The sole and exclusive remedy available to the
Holders in the event that a Shelf Registration Statement is not filed or
declared effective within the time periods specified in this Section 2(a) is the
collection of additional interest or dividends, as the case may be, in
accordance with the terms of the Securities.

            (b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective in order to permit the
Prospectus forming part thereof to be usable by Holders until such date as of
which neither the Securities nor the shares of Common Stock issuable upon
conversion thereof shall constitute restricted securities under Rule 144(k) of
the Securities Act or until all the Securities and the shares of Common Stock
issuable upon conversion thereof covered by the Shelf Registration Statement
have been sold pursuant to the Shelf Registration Statement (in any such case,
such period being called the "Shelf Registration Period"). The Company shall be
deemed not to have used its reasonable best efforts to keep the Shelf
Registration Statement effective during the requisite period if it voluntarily
takes any action that would result in Holders of securities covered thereby not
to be able to offer and sell such securities during that period, unless such
action is (i) required by applicable law or (ii) pursuant to Section 2(c)
hereof, and, in either case, so long as the Company promptly thereafter complies
with the requirements of Section 3(i) hereof, if applicable.

            (c) The Company may suspend the use of the Prospectus for a period
not to exceed 15 days (or such longer period as is reasonably necessary under
the circumstances) in any three month period for valid business reasons (not
including avoidance of the Company's obligations hereunder), including the
acquisition or divestiture of assets, public filings with the Commission,
pending corporate developments and similar events.
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            3. Registration Procedures. In connection with any Shelf
Registration Statement, the following provisions shall apply:

            (a) The Company shall furnish to you, prior to the filing thereof
      with the Commission, a copy of any Shelf Registration Statement, and each
      amendment thereof and each amendment or supplement, if any, to the
      Prospectus included therein and shall use its best efforts to reflect in
      each such document, when so filed with the Commission, such comments as
      you reasonably may propose; provided, however, that the Company shall be
      required only to furnish an Incorporated Document to you as promptly as
      practicable following its filing with the Commission.

            (b) The Company shall ensure that (i) any Shelf Registration
      Statement and any amendment thereto and any Prospectus forming part
      thereof and any amendment or supplement thereto complies in all material
      respects with the Act and the rules and regulations thereunder, (ii) any
      Shelf Registration Statement and any amendment thereto does not, when it
      becomes effective, contain an untrue statement of a material fact or omit
      to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading and (iii) any Prospectus
      forming part of any Shelf Registration Statement, and any amendment or
      supplement to such Prospectus, does not include an untrue statement of a
      material fact or omit to state a material fact necessary in order to make
      the statements therein, in the light of the circumstances under which they
      were made, not misleading.

            (c) (1) The Company shall advise you and the Holders and, if
      requested by you or any such Holder, confirm such advice in writing:

                  (i) when a Shelf Registration Statement and any amendment
            thereto has been filed with the Commission and when the Shelf
            Registration Statement or any post-effective amendment thereto has
            become effective; and

                  (ii) of any request by the Commission for amendments or
            supplements to the Shelf Registration Statement or the Prospectus
            included therein or for additional information.
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            (2) The Company shall advise you and the Holders and, if requested
      by you or any such Holder, confirm such advice in writing:

                  (i) of the issuance by the Commission of any stop order
            suspending the effectiveness of the Shelf Registration Statement or
            the initiation of any proceedings for that purpose;

                  (ii) of the receipt by the Company of any notification with
            respect to the suspension of the qualification of the securities
            included in any Shelf Registration Statement for sale in any
            jurisdiction or the initiation or threatening of any proceeding for
            such purpose; and

                  (iii) of the suspension of the use of the Prospectus pursuant
            to Section 2(c) hereof or of the happening of any event that
            requires the making of any changes in the Shelf Registration
            Statement or the Prospectus so that, as of such date, the statements
            therein are not misleading and do not omit to state a material fact
            required to be stated therein or necessary to make the statements
            therein (in the case of the Prospectus, in light of the
            circumstances under which they were made) not misleading (which
            advice shall be accompanied by an instruction to suspend the use of
            the Prospectus until the requisite changes have been made); provided
            that such notice shall not be required to specify the nature of the
            event giving rise to the notice requirement hereunder.

            (d) The Company shall use its reasonable best efforts to obtain the
      withdrawal of any order suspending the effectiveness of any Shelf
      Registration Statement at the earliest possible time.

            (e) The Company shall furnish to each Holder of securities included
      within the coverage of any Shelf Registration Statement, without charge,
      at least one copy of such Shelf Registration Statement and any
      post-effective amendment thereto, including financial statements and
      schedules, and, if the Holder so requests in writing, all exhibits
      (including those incorporated by reference).
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            (f) The Company shall, during the Shelf Registration Period, deliver
      to each Holder of securities included within the coverage of any Shelf
      Registration Statement, without charge, as many copies of the Prospectus
      (including each preliminary Prospectus) included in such Shelf
      Registration Statement and any amendment or supplement thereto as such
      Holder may reasonably request; and the Company consents to the use of the
      Prospectus or any amendment or supplement thereto by each of the selling
      Holders of securities in connection with the offering and sale of the
      securities covered by the Prospectus or any amendment or supplement
      thereto.

            (g) Prior to any offering of securities pursuant to any Shelf
      Registration Statement, the Company shall register or qualify or cooperate
      with the Holders of securities included therein and their respective
      counsel in connection with the registration or qualification of such
      securities for offer and sale under the securities or blue sky laws of
      such jurisdictions as any such Holders reasonably request in writing and
      do any and all other acts or things reasonably necessary or advisable to
      enable the offer and sale in such jurisdictions of the securities covered
      by such Shelf Registration Statement; provided, however, that the Company
      will not be required to qualify generally to do business in any
      jurisdiction where it is not then so qualified or to take any action which
      would subject it to general service of process or to taxation in any such
      jurisdiction where it is not then so subject.

            (h) The Company shall cooperate with the Holders of Securities or
      the shares of Common Stock issued upon conversion thereof to facilitate
      the timely preparation and delivery of certificates representing
      Securities or the Common Stock issued upon conversion thereof to be sold
      pursuant to any Shelf Registration Statement free of any restrictive
      legends and in such denominations and registered in such names as Holders
      may request prior to sales of securities pursuant to such Shelf
      Registration Statement.

            (i) Upon the occurrence of any event contemplated by paragraph
      (c)(2)(iii) above, the Company shall, if required pursuant to the Act or
      paragraph (c)(2)(iii) above, as promptly as practicable prepare a post-
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      effective amendment to any Shelf Registration Statement or an amendment or
      supplement to the related Prospectus or file any other required document
      so that, as thereafter delivered to purchasers of the securities included
      therein, the Prospectus will not include an untrue statement of a material
      fact or omit to state any material fact necessary to make the statements
      therein, in the light of the circumstances under which they were made, not
      misleading.

            (j) Not later than the effective date of any Shelf Registration
      Statement hereunder, the Company shall provide a CUSIP number for the
      Securities registered under such Shelf Registration Statement, and provide
      the Trustee or transfer agent, as the case may be, with printed
      certificates for such Securities, in a form eligible for deposit with The
      Depository Trust Company.

            (k) The Company shall use its best efforts to comply with all
      applicable rules and regulations of the Commission and shall make
      generally available to its security holders as soon as practicable after
      the effective date of the applicable Shelf Registration Statement an
      earnings statement satisfying the provisions of Section 11(a) of the Act.

            (1) The Company shall cause the Indenture to be qualified under the
      Trust Indenture Act in a timely manner.

            (m) The Company may require each Holder of securities to be sold
      pursuant to any Shelf Registration Statement to furnish to the Company
      such information regarding the Holder and the distribution of such
      securities as the Company may from time to time reasonably require for
      inclusion in such Shelf Registration Statement. Any Holder who fails to
      provide such information shall not be entitled to use the Prospectus.

            (n) The Company shall, if requested, promptly incorporate in a
      Prospectus supplement or post-- effective amendment to a Shelf
      Registration Statement, such information as the Managing Underwriters and
      Majority Holders reasonably agree should be included therein and shall
      make all required filings of such Prospectus supplement or post-effective
      amendment as
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      soon as notified of the matters to be incorporated in such Prospectus
      supplement or post-effective amendment.

            (o) The Company shall enter into such agreements (including
      underwriting agreements) and take all other appropriate actions in order
      to expedite or facilitate the registration or the disposition of the
      Securities or the shares of Common Stock issuable upon conversion thereof,
      and in connection therewith, if an underwriting agreement is entered into,
      cause the same to contain indemnification provisions and procedures no
      less favorable than those set forth in Section 5 (or such other provisions
      and procedures acceptable to the Majority Holders and the Managing
      Underwriters, if any), with respect to all parties to be indemnified
      pursuant to Section 5 by Holders of Securities or the Common Stock
      issuable upon conversion thereof to the Company, it being understood that
      all underwriting discounts and commissions, and all other underwriting
      fees, associated with such agreement in connection with such offering of
      the Securities and shares of Common Stock issuable upon conversion thereof
      shall, except as otherwise expressly agreed herein (including those
      expenses covered by Section 4), be for the account of the Holders or the
      underwriters.

            (p) The Company shall (i) make reasonably available for inspection
      any Managing Underwriter participating in any disposition pursuant to such
      Shelf Registration Statement, and any attorney, accountant or other agent
      retained by the majority in principal amount or liquidation preference, as
      the case may be, of Holders of securities to be registered thereunder or
      by any such Managing Underwriter all relevant financial and other records,
      pertinent corporate documents and properties of the Company and its
      subsidiaries; (ii) cause the Company's officers, directors and employees
      to supply all relevant information reasonably requested by any such
      Managing Underwriter, attorney, accountant or agent in connection with
      such Shelf Registration Statement as is customary for similar due
      diligence examinations; provided, however, that any information that is
      designated in writing by the Company, in good faith, as confidential at
      the time of delivery of such information shall be kept confidential by any
      such Managing Underwriter, attorney, accountant or agent, unless
      disclosure thereof is made in connection with a court proceeding or
      required by law,
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      or such information has become available (not in violation of this
      agreement) to the public generally or through a third party without an
      accompanying obligation of confidentiality; (iii) make such
      representations and warranties to the Holders of securities registered
      thereunder and the underwriters, if any, in form, substance and scope as
      are customarily made by issuers to underwriters in primary underwritten
      offerings and covering matters including those set forth in the Purchase
      Agreement; (iv) obtain opinions of counsel to the Company and updates
      thereof (which counsel and opinions (in form, scope and substance) shall
      be reasonably satisfactory to the Managing Underwriters, if any) addressed
      to each selling Holder and the underwriters, if any, covering such matters
      as are customarily covered in opinions requested in underwritten offerings
      and such other matters as may be reasonably requested by Holders
      representing a majority by principal amount or number of shares, as the
      case may be, of the securities covered by such Shelf Registration
      Statement and by such Managing Underwriters; (v) obtain "cold comfort"
      letters and updates thereof from the independent certified public
      accountants of the Company (and, if necessary, use its reasonable best
      efforts to retain any other independent certified public accountants of
      any subsidiary of the Company or of any business acquired by the Company
      for which financial statements and financial data are, or are required to
      be, included in the Shelf Registration Statement), addressed to each
      selling Holder of securities registered thereunder and the underwriters,
      if any, in customary form and covering matters of the type customarily
      covered in "cold comfort" letters in connection with primary underwritten
      offerings; and (vi) deliver such documents and certificates as may be
      reasonably requested by the Majority Holders and the Managing
      Underwriters, if any, including those to evidence compliance with Section
      3(i) and with any customary conditions contained in the underwriting
      agreement or other agreement entered into by the Company. The foregoing
      actions set forth in clauses (iii), (iv), (v) and (vi) of this Section
      3(p) shall be performed at (A) the effectiveness of such Shelf
      Registration Statement and each post-effective amendment thereto and (B)
      each closing under any underwriting or similar agreement as and to the
      extent required thereunder.
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            4. Registration Expenses. The Company shall bear all expenses
incurred in connection with the performance of the Company's obligations under
Sections 2 and 3 hereof and shall reimburse the Holders for the reasonable and
duly documented fees and disbursements of (i) counsel designated by the Majority
Holders to act as counsel for the Holders in connection therewith or (ii) in the
absence of such selection of counsel by the Majority Holders, one firm
designated by the underwriters to act as counsel for the Holders in connection
therewith. It is understood, however, that as except provided in this Section,
the Holders shall pay all their own costs and expenses, including stock transfer
taxes due upon resale by them of any of the securities covered by a Shelf
Registration Statement and any advertising expenses incurred in connection with
any offers and sales they make.

            5. Indemnification and Contribution. (a) In connection with any
Shelf Registration Statement, the Company agrees to indemnify and hold harmless
each Holder of securities covered thereby (including the Purchasers), the
directors, officers, employees and agents of each such Holder and each person
who controls any such Holder within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Shelf
Registration Statement as originally filed or in any amendment thereof, or in
any preliminary Prospectus or Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and agrees to reimburse
each such indemnified party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that (i) the
Company will not be liable in any case to the extent that any such loss, claim,
damage or liability arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any such Holder
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or underwriter or Managing Underwriter specifically for inclusion therein, (ii)
the Company shall not be liable to any indemnified party under this indemnity
agreement with respect to any Shelf Registration Statement or Prospectus to the
extent that any such loss, claim, damage or liability of such indemnified party
results solely from an untrue statement of a material fact contained in, or the
omission of a material fact from, the Shelf Registration Statement or Prospectus
which untrue statement or omission was corrected in an amended or supplemented
Shelf Registration Statement or Prospectus, if the person alleging such loss,
claim, damage or liability was not sent or given, at or prior to the written
confirmation of such sale, a copy of the amended or supplemented Shelf
Registration Statement or Prospectus if the Company had previously furnished
copies thereof to such indemnified party and if such delivery of a prospectus is
finally judicially determined to be required by the Act and was not so made and
(iii) the Company will not be liable to any indemnified party under this
indemnity agreement with respect to any Shelf Registration Statement or
Prospectus to the extent that any such loss, claim, damage or liability of such
indemnified party results (a) from the use of a Shelf Registration Statement
during a period when a stop order has been issued in respect thereof or any
proceedings for that purpose have been initiated or (b) from the use of the
Prospectus during a period when the use of the Prospectus has been suspended in
accordance with Section 3(c)(2)(iii) hereof, provided, in each case, that
Holders received prior notice of such stop order, initiation of proceedings or
suspension. This indemnity agreement will be in addition to any liability which
the Company may otherwise have.

            The Company also agrees to indemnify or contribute to Losses, as
provided in Section 5(d), of any underwriters of Securities or the shares of
Common Stock issued upon conversion thereof registered under a Shelf
Registration Statement, their officers and directors and each person who
controls such underwriters on substantially the same basis as that of the
indemnification of the Purchasers and the selling Holders provided in this
Section 5(a) and shall, if requested by any Holder, enter into an underwriting
agreement reflecting such agreement, as provided in Section 3(o) hereof.

            (b) Each Holder of securities covered by a Shelf Registration
Statement (including the Purchasers) severally agrees to indemnify and hold
harmless (i) the Company, (ii) each of its directors, (iii) each of its officers
who
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signs such Shelf Registration Statement and (iv) each person who controls the
Company within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement will
be in addition to any liability which any such Holder may otherwise have.

            (c) Promptly after receipt by an indemnified party under this
Section 5 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 5, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (and local counsel) if (i) the use of counsel chosen by
the indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential defendants in,
or targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to
<PAGE>   15

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the indemnifying party, (iii) the indemnifying party shall not have employed
counsel satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after notice of the institution of such action or (iv)
the indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, which consent
shall not be unreasonably withheld, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding.

            (d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party, in
lieu of indemnifying such indemnified party, shall have a joint and several
obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses") to which such
indemnified party may be subject in such proportion as is appropriate to reflect
the relative benefits received by such indemnifying party, on the one hand, and
such indemnified party, on the other hand, from the Initial Placement and the
Shelf Registration Statement which resulted in such Losses; provided, however,
that in no case shall the Purchasers of any Security or the shares of Common
Stock issued upon conversion thereof be responsible, in the aggregate, for any
amount in excess of the purchase discount or commission applicable to such
Security, nor shall any underwriter be responsible for any amount in excess of
the underwriting discount or commission applicable to the securities purchased
by such underwriter under the Shelf Registration Statement which resulted in
such Losses. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified
<PAGE>   16

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party, on the other hand, in connection with the statements or omissions which
resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the Initial Placement (before deducting expenses). Benefits
received by the Purchasers shall be deemed to be equal to the total purchase
discounts and commissions, and benefits received by any other Holders shall be
deemed to be equal to the value such Holders realize by receiving Securities or
the shares of Common Stock issuable upon conversion thereof registered under the
Act. Benefits received by any underwriter shall be deemed to be equal to the
total underwriting discounts and commissions, as set forth on the cover page of
the Prospectus forming a part of the Shelf Registration Statement which resulted
in such Losses. Relative fault shall be determined by reference to whether any
alleged untrue statement or omission relates to information provided by the
indemnifying party, on the one hand, or by the indemnified party, on the other
hand. The parties agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5, each person who
controls a Holder within the meaning of either the Act or the Exchange Act and
each director, officer, employee and agent of such Holder shall have the same
rights to contribution as such Holder, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, each officer of the
Company who shall have signed the Shelf Registration Statement and each director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).

            (e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder or
the Company or any of the officers, directors or controlling persons referred to
in Section 5 hereof, and will survive the sale by a Holder of securities covered
by a Shelf Registration Statement.
<PAGE>   17

                                                                              17


            6. Miscellaneous.

            (a) No Inconsistent Agreements. The Company has not, as of the date
      hereof, entered into, nor shall it, on or after the date hereof, enter
      into, any agreement with respect to its securities that is inconsistent
      with the rights granted to the Holders herein or otherwise conflicts with
      the provisions hereof.

            (b) Amendments and Waivers. The provisions of this Agreement,
      including the provisions of this sentence, may not be amended, qualified,
      modified or supplemented, and waivers or consents to departures from the
      provisions hereof may not be given, unless the Company has obtained the
      written consent of the Holders of at least a majority of the then
      outstanding aggregate principal amount or liquidation preference, as the
      case may be, of Securities or the shares of Common Stock issued upon
      conversion thereof; provided that, with respect to any matter that
      directly or indirectly affects the rights of the Purchasers hereunder, the
      Company shall obtain the written consent of the Purchasers against which
      such amendment, qualification, supplement, waiver or consent is to be
      effective. Notwithstanding the foregoing (except the foregoing proviso), a
      waiver or consent to departure from the provisions hereof with respect to
      a matter that relates exclusively to the rights of Holders whose
      securities are being sold pursuant to a Shelf Registration Statement and
      that does not directly or indirectly affect the rights of other Holders
      may be given by the Majority Holders, determined on the basis of
      securities being sold rather than registered under such Shelf Registration
      Statement.

            (c) Notices. All notices and other communications provided for or
      permitted hereunder shall be made in writing by hand-delivery, first-class
      mail, telecopier, or air courier guaranteeing overnight delivery:

                  (1) if to a Holder, at the most current address given by such
            holder to the Company in accordance with the provisions of this
            Section 6(c), which address initially is, with respect to each
            Holder, the address of such Holder maintained by the Registrar under
            the Indenture,
<PAGE>   18

                                                                              18


            with a copy in like manner to Lehman Brothers Inc.;

                  (2) if to you, initially at the address set forth in the
            Purchase Agreement; and

                  (3) if to the Company, initially at its address set forth in
            the Purchase Agreement.

            All such notices and communications shall be deemed to have been
      duly given when received.

            The Purchasers or the Company by notice to the other may designate
      additional or different addresses for subsequent notices or
      communications.

            (d) Successors and Assigns. This Agreement shall inure to the
      benefit of and be binding upon the successors and assigns of each of the
      parties, including, without the need for an express assignment or any
      consent by the Company thereto, subsequent Holders of Securities or the
      shares of Common Stock issuable upon conversion thereof. The Company
      hereby agrees to extend the benefits of this Agreement to any Holder of
      Securities and any such Holder may specifically enforce the provisions of
      this Agreement as if an original party hereto.

            (e) Counterparts. This agreement may be executed in any number of
      counterparts and by the parties hereto in separate counterparts, each of
      which when so executed shall be deemed to be an original and all of which
      taken together shall constitute one and the same agreement.

            (f) Headings. The headings in this agreement are for convenience of
      reference only and shall not limit or otherwise affect the meaning hereof.

            (g) Governing Law. This agreement shall be governed by and construed
      in accordance with the internal laws of the State of New York applicable
      to agreements made and to be performed in said State.

            (h) Severability. In the event that any one or more of the
      provisions contained herein, or the application thereof in any
      circumstances, is held invalid, illegal or unenforceable in any respect
      for
<PAGE>   19

                                                                              19


      any reason, the validity, legality and enforceability of any such
      provision in every other respect and of the remaining provisions hereof
      shall not be in any way impaired or affected thereby, it being intended
      that all of the rights and privileges of the parties shall be enforceable
      to the fullest extent permitted by law.

            (i) Securities Held by the Company, etc. Whenever the consent or
      approval of Holders of a specified percentage of principal amount or
      liquidation preference, as the case may be, of Securities or the shares of
      Common Stock issued upon conversion thereof is required hereunder,
      Securities or the shares of Common Stock issued upon conversion thereof
      held by the Company or its Affiliates (other than subsequent Holders of
      Securities or the shares of Common Stock issued upon conversion thereof if
      such subsequent Holders are deemed to be Affiliates solely by reason of
      their holdings of such Securities or shares of Common Stock issued upon
      conversion thereof) shall not be counted in determining whether such
      consent or approval was given by the Holders of such required percentage.
<PAGE>   20

                                                                              20


            Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.

                                       Very truly yours,

                                       LORAL SPACE & COMMUNICATIONS
                                       LTD.,

                                       by__________________________________
                                         Name:
                                         Title:


Accepted in New York, New York

November 6, 1996


LEHMAN BROTHERS INC.
BEAR, STEARNS & CO. INC.
DONALDSON, LUFKIN & JENRETTE
   SECURITIES CORPORATION
OPPENHEIMER & CO., INC.
UNTERBERG HARRIS

  by LEHMAN BROTHERS INC.

     by ___________________________
        Name:
        Title: