**EXHIBIT 10.1**
**MASTER AGREEMENT**
     THIS **MASTER AGREEMENT**(this “***Master Agreement***”) is entered into as of this30th day of June 2003 by and among LORAL SPACE & COMMUNICATIONS LTD. a Bermudacorporation (“***Loral***”), LORAL SPACE & COMMUNICATIONS CORPORATION, a Delawarecorporation (“***LSCC***”), LORAL SPACECOM CORPORATION, a Delaware corporation(“***LSC***”) and SPACE SYSTEMS/LORAL, INC., a Delaware corporation (“***SS/L***”) (Loral,LSCC, LSC and SS/L hereinafter collectively referred to as the “***LoralParties***”), on the one hand, and ALCATEL SPACE, a *société anonyme*organized andexisting under the laws of France, individually and in its capacity as solesuccessor-in-interest to Alcatel Space Industries, a *société anonyme*(“***Alcatel***”), on the other hand (Loral, LSCC, LSC, SS/L and Alcatel hereinafterindividually referred to as a “***Party***” and collectively referred to as the“***Parties***”).
     **WHEREAS**, certain disputes have arisen between Alcatel, on the one hand,and the Loral Parties, on the other hand, which disputes are the subject of anarbitration proceeding among the Parties pending before the InternationalChamber of Commerce’s International Court of Arbitration (“***ICC***”) as ICC CaseNumber 11508/TE (collectively, the “***ICC Arbitration***”) and in an action beforethe United States District Court for the Southern District of New York as CaseNumber 03 Civ. 0742(SAS) to confirm and enforce the Partial Awards of the ICCin the ICC Arbitration (the “***Confirmation Proceeding***”);
     **WHEREAS**, certain additional disputes have arisen between Alcatel, on theone hand, and the Loral Parties, on the other hand, which disputes are thesubject of an Alcatel lawsuit against SS/L styled *Alcatel v. Space SystemsLoral, Inc*., pending before the United States District Court for the SouthernDistrict of New York as case number 03 Civ. 2587(MBM) (the “***Intelsat OrbitalsCase***”);
     **WHEREAS**, the Parties now find it in their respective best interests toenter into certain business transactions and, at the same time, to resolve andsettle the Intelsat Orbitals Case, the ICC Arbitration and the ConfirmationProceeding, and to settle any and all claims and/or issues of law or fact thathave been or could have been raised by any Party in the ICC Arbitration, theConfirmation Proceeding or the Intelsat Orbitals Case, in accordance with, andsubject to the terms and conditions set forth in this Master Agreement; and
     **WHEREAS**, the transactions contemplated in this Master Agreement willdirectly and indirectly provide substantial direct and indirect benefits to
 

 

Affiliates of Loral (including without limitation Loral Global and LoralBroadband) and Affiliates of Alcatel (including without limitation Audelec) andto the Loral Lenderswho are intended third party beneficiaries with respect to Sections3.3(a)(xii) and 3.3(c) of this Master Agreement.
     **NOW, THEREFORE**, in consideration of their mutual agreements containedherein and other good and valuable consideration, the receipt and sufficiencyof which is hereby acknowledged, the Parties hereby agree as follows:
**1. Definitions**
     **1.1**“***Affiliate***” means: (a) with respect to a natural Person, any member ofsuch Person’s family; (b) with respect to an entity, any officer, director, orgeneral partner of or in such entity or of or in any Affiliate of such entity;and (c) with respect to a natural Person or entity, any Person or entity whichdirectly or indirectly, through one or more intermediaries, Controls, isControlled by, or is under common Control with such Person or entity.
     **1.2**“***Alcatel***” shall have the meaning set forth in the Recitals.
     **1.3**“***Alcatel Account***” has the meaning set forth in Section 2.3(e)(ii)hereof.
     **1.4**“***Alcatel Approvals***” has the meaning set forth in Section 5.1(a)hereof.
     **1.5**“***Alcatel Multimedia***” means Alcatel Multimedia Satellite, a French*société anonyme*Affiliated with Alcatel, organized and existing under the lawsof France and formerly known as Losalec.
     **1.6**“***Alcatel Releasing Parties***” has the meaning set forth in Section***3.3(a)***hereof.
     **1.7**“***Alcatel Spacecom***” means Alcatel Spacecom s.a.s, a *société par actionssimplifée*organized and existing under the laws of France, which is whollyowned by Alcatel.
     **1.8**“***Audelec***” means, Audelec, a *société anonyme*, now known as AlcatelCyber Satellite, Affiliated with Alcatel and organized and existing under thelaws of France.
     **1.9**“***Claims***” means all demands, claims, actions or causes of action,assessments, suits, proceedings, demands, judgments, losses, obligations,
2

 

payments, costs, deficiencies, charges, damages (including, without limitation,diminution in value), liabilities, costs and expenses, including, withoutlimitation, interest, penalties and attorneys’ fees and disbursements.
     **1.10**“***Closing***” shall mean the performance and satisfaction by the Partiesof their respective obligations as set forth in Section 2 of this MasterAgreement, which are occurring on the Closing Date.
     **1.11**“***Closing Date***” shall be Monday, June 30, 2003, or such other date asthe Parties may agree, but in no event later than July 2, 2003.
     **1.12**“***Confirmation Proceeding***” has the meaning set forth in the Recitals.
     **1.13**“***Consent Judgment***” has the meaning set forth in the Section 2.2(a)hereof, and in the form attached hereto as **Exhibit 2.2(a)(2)**.
     **1.14**“***Control***” means possession, directly or indirectly, of power todirect or cause the direction of management or policies (whether throughownership of voting securities, by agreement or otherwise).
     **1.15**“***Cyberstar***” means CyberStar, L.P., a limited partnership organizedunder the laws of the state of Delaware, pursuant to that certain Agreement ofLimited Partnership of CyberStar, L.P. dated as of June 30, 1997, as it mayhave been amended from time to time.
     **1.16**“***Cyberstar Agreements***” has the meaning set forth in Section3.3(a)(ii) hereof.
     **1.17**“***Cyberstar Partnership Agreement***” means the Agreement of LimitedPartnership of CyberStar, L.P. dated as of June 30, 1997.
     **1.18**“***Cyberstar Units***” means the 240 limited partnership units ofCyberstar owned by Audelec.
     **1.19**“***Deferred Payment***” has the meaning set forth in Section 3.1(a)hereof.
     **1.20**“***Encumbrance***” means any charge, claim, community property interest,condition, equitable interest, lien, option, pledge, security interest, rightof first refusal, or restriction of any kind, including any restriction on use,voting, transfer, receipt of income, or exercise of any other attribute ofownership.
3

 

     **1.21**“***Europe*Star***” means Europe*Star Limited, a company organized underthe laws of England under the registered number 3562015 with its registeredoffice at 35 Basinghall Street, London.
     **1.22**“***Europe*Star Articles***” has the meaning set forth in Section 2.3(c)(i)hereof.
     **1.23**“***Europe*Star Irrevocable Power***” has the meaning set forth in Section***2.3(c)(ii)***hereof and in the form attached hereto as **Exhibit 2.3(c)(ii)(a)**.
     **1.24**“***Europe*Star Shares***” means the 19,987 A Shares (0.01p each) ofEurope*Star owned by Loral.
     **1.25**“***Europe*Star Transfer Form***” has the meaning set forth in Section***2.3(c)(ii)***hereof and attached hereto as **Exhibit 2.3(c)(ii)(b)**.
     **1.26**“***FCO***” has the meaning set forth in Section 2.3(c)(ii) hereof.
     **1.27**“***Framework Agreement***” has the meaning set forth in Section 3.2hereof.
     **1.28**“***Globalstar***” has the meaning set forth in Section 3.3(a)(x) hereof.
     **1.29**“***Governmental Entity***” (including the term “Governmental”) means anygovernmental, quasi-governmental or regulatory authority, whether domestic orforeign.
     **1.30**“***ICC***” means the International Chamber of Commerce’s InternationalCourt of Arbitration.
     **1.31**“***ICC Arbitration***” has the meaning set forth in the Recitals hereto.
     **1.32**“***ICC Termination Letter***” has the meaning set forth in Section 2.2(b)hereof and is in the form attached hereto as **Exhibit 2.2(b)(2)**.
     **1.33**“***Intelsat***” means Intelsat LLC, a limited liability company organizedunder the laws of Delaware, and a successor in interest of the InternationalTelecommunications Satellite Organization.
     **1.34**“***Intelsat Orbitals Case***” has the meaning set forth in the Recitals.
     **1.35**“***Law***” means all statutes, laws, ordinances, regulations, rules,resolutions, orders, determinations, writs, injunctions, awards (includingwithout limitation awards of any arbitrator), judgments and decrees applicableto the specified Persons or entities and to the businesses and assets thereof(including without limitation Laws relating to securities registration and
4

 

regulation; the sale, leasing, ownership or management of real property;employment practices, terms and conditions, and wages and hours; buildingstandards, land use and zoning; and environmental protection).
     **1.36**“***Loral***” has the meaning set forth in the Recitals.
     **1.37**“***Loral Approvals***” has the meaning set forth in Section 4.1(a) hereof.
     **1.38**“***Loral Broadband***” means Loral Broadband Holdings, L.P., a Delawarelimited partnership Affiliated with Loral.
     **1.39**“***Loral Cyberstar, L.L.C.***” means Loral CyberStar, L.L.C., a Delawarelimited liability corporation Affiliated with Loral.
     **1.40**“***Loral Global***” means Loral Global Services, N.V., a corporationAffiliated with Loral and organized under the laws of the Netherlands Antilles.
     **1.41**“***Loral Lenders***” means each of the Agents and lenders from time totime party to the Loral Loan Facilities.
     **1.42**“***Loral Loan Facilities***” means (i) that certain $600 million Amendedand Restated Credit Agreement, dated December 21, 2001, as amended, among LSC,the lenders thereunder, and Bank of America, N.A. as administrative agent (the“**LSC Facility**”) and (ii) that certain $500 million Credit Agreement, datedNovember 17, 2000, as amended, among Loral Satellite, Inc., the lendersthereunder and Bank of America, N.A., as administrative agent.
     **1.43**“***Loral Parties***” has the meaning set forth in the Recitals hereto.
     ***1.44 “Loral Releasing Parties”***has the meaning set forth in Section 3.3(b)hereof.
     **1.45**“***Loral Resignation Letters***” has the meaning set forth in Section2.3(e)(iii) hereof and are in the form attached hereto as **Exhibit 2.2(e)(iii)**.
     **1.46**“***Loral Transfers***” shall mean, collectively, the payments to Alcatelset forth in Section 2.3(e)(i) and (ii) hereof; the transfer of the SkyBridgeUnits to Alcatel Multimedia as contemplated by Section 2.3(a) hereof; and thetransfers of the Europe*Star Shares and the SLOD Share to Alcatel Spacecom ascontemplated by Sections 2.3(c) and 2.3(d), respectively, hereof.
     **1.47**“***Loral Transfers Date***” shall mean the date when the last of the LoralTransfers shall have been duly completed and become effective.
5

 

     **1.48**“***LSC***” has the meaning set forth in the Recitals.
     **1.49**“***LSC Facility***” has the meaning set forth in Section 1.42 hereof.
     **1.50**“***LSCC***” has the meaning set forth in the Recitals.
     **1.51**“***Master Agreement***” has the meaning set forth in the Recitals.
     **1.52**“***Party***” has the meaning set forth in the Recitals.
     **1.53**“***Person***” means an individual or a corporation, partnership, limitedliability company, trust, unincorporated organization, association or otherentity.
     **1.54**“***Reinstated Claims***” has the meaning set forth in Section 7.2 hereof.
     **1.55**“***Released Claims***” has the meaning set forth in Section 3.3(c) hereof.
     **1.56**“***SkyBridge***” means SkyBridge Limited Partnership, a limitedpartnership organized under the laws of the State of Delaware pursuant to thatcertain agreement of limited partnership dated as of February 26, 1997, as itmay have been amended from time to time.
     **1.57**“***SkyBridge Agreements***” has the meaning set forth in Section3.3(a)(iii) hereof.
     **1.58**“***SkyBridge Partnership Agreement***” means that certain Third Amendedand Restated Agreement of Limited Partnership of SkyBridge Limited Partnershipdated as of December 20, 1999.
     **1.59**“***SkyBridge Transfer Notice***” has the meaning set forth in Section2.3(a)(ii) hereof and is in the form attached hereto as **Exhibit 2.3(a)(ii)**.
     **1.60**“***SkyBridge Units***” means the 368 limited partnership units ofSkyBridge owned by Loral Broadband.
     **1.61**“***SLOD***” means Europe*Star Gesellschaft fur SatellitenkommunikationmbH, a company organized and existing under the laws of Germany, whoseprincipal place of business is Mathias-Brüggen-Straße 87-89, 50829 Cologne,Germany registered at the Local Court of Cologne under HRB21060.
     **1.62**“***SLOD Irrevocable Power***” has the meaning set forth in Section 2.3(d)hereof.
6

 

     **1.63**“***SLOD Local Transfer Agreement***” has the meaning set forth in Section2.3(d) hereof.
     **1.64**“***SLOD Share***” means the 1 share of SLOD held by Loral Global.
     **1.65**“***SLUG***” means Europe*Star Gesellschaft fur den Betrieb vonNachrichtensatelliten mbH, whose principal place of business isMathias-Brüggen-Straße 87-89, 50829 Cologne, Germany, registered at the LocalCourt of Cologne under HRB25781.
     **1.66**“***SS/L***” has the meaning set forth in the Recitals.
     **1.67**“***Taxes***” (including the terms “Tax” and “Taxing”) means all national,federal, state, local and foreign taxes (including, without limitation, income,profit, franchise, sales, use, real property, personal property, value added(VAT), *ad valorem*, excise, employment and wage withholding taxes) as well associal security contributions and installments of estimated taxes, assessments,deficiencies, levies, imports, duties, license fees, registration fees,withholdings, or other similar charges of every kind, character or descriptionimposed by any Governmental Entity, and any interest, penalties or additions totax imposed thereon or in connection therewith.
**2. The Closing**
     The Closing shall take place on the Closing Date:
     **2.1 Location and Time of Closing**
     The Closing shall take place at the offices of Hogan & Hartson LLP, 875Third Avenue, New York, New York on the Closing Date.
     **2.2 Closing Deliveries of the Parties**
     At the Closing:
          (a) the Parties shall execute and deliver to Alcatel: (i) a joint requestto the United States District Court for the Southern District of New York tosuspend the Confirmation Proceeding, in the form of**Exhibit 2.2(a)(1)**, and (ii)the “***Consent Judgment***” in the form of **Exhibit 2.2(a)(2),**which Alcatel shallfile if required pursuant to Section 7.1 below, with the United States DistrictCourt for the Southern District of New York in order to award the DeferredPayment to Alcatel as the final judgment in the Confirmation Proceeding;
7

 

          (b) the Parties shall execute and deliver to Alcatel: (i) a joint requestto the ICC to suspend the ICC Arbitration, in the form of **Exhibit 2.2(b)(1)**,which Alcatel shall file promptly with the ICC, and (ii) the letter attachedas **Exhibit 2.2(b)(2)**(the ***“ICC TerminationLetter”***) which Alcatel shall file(if required pursuant to Section 7.1 below) requesting the ICC to terminate theICC Arbitration and return to Alcatel and the Loral Parties, on a 50/50 basis,any unused amounts paid by the Parties to the ICC for costs of the ICCArbitration (including any costs of the independent auditor), with theunderstanding that the Parties shall be responsible for bearing their ownrespective costs in connection with the ICC Arbitration, including the cost oftheir respective experts or attorneys;
          (c) the Parties shall execute and deliver to Alcatel, and Alcatel shallpromptly file with the United States District Court for the Southern Districtof New York, the documents attached hereto as **Exhibit 2.2(c)**in order tostipulate and to request the dismissal, with prejudice, of the IntelsatOrbitals Case (as well as any other documents that shall be necessary to obtainsuch dismissal); and
          (d) the Parties shall execute and deliver to one another the “Notice ofCompletion Of Closing Under Master Agreement,” in the form attached hereto as**Exhibit 2.2(d).**
     **2.3 Closing Deliveries of the Loral Parties**
          **(a) SkyBridge Transfer Deliveries**
               At the Closing, the Loral Parties shall cause Loral Broadband to:
               (i) assign, transfer and deliver to Alcatel Multimedia the SkyBridge Unitspursuant to the irrevocable unit power in the form attached hereto as **Exhibit2.3(a)(i)**; and
               (ii) execute the transfer notice in the form attached hereto as **Exhibit2.3(a)(ii)**(the “***SkyBridge Transfer Notice***”), notifying SkyBridge and the otherSkyBridge partners as contemplated by Section 10.02(a) of the SkyBridgePartnership Agreement, and deliver such SkyBridge Transfer Notice to SkyBridgeand all other SkyBridge partners (with a copy to be delivered to Alcatel).
8

 

          **(b) Cyberstar Transfer Deliveries**
          At the Closing, the Loral Parties shall cause:
               (i) Loral Cyberstar, L.L.C to execute and deliver to Audelec a waiver inthe form attached hereto as **Exhibit 2.3(b)(i)**, waiving, on behalf of Cyberstar,the notice contemplated by Section 10.01(c) of the Cyberstar PartnershipAgreement and confirming that Cyberstar will not request a legal opinion inconnection with the proposed transfer.
               (ii) Loral Broadband to execute and deliver the waiver in the formattached hereto as **Exhibit 2.3(b)(ii),**waiving its right to the notice andrights of first refusal referenced in Section 10.02(a) of the CyberstarPartnership Agreement, and to deliver such notice to Cyberstar and all of theother partners of Cyberstar (with a copy to Alcatel).
          **(c) Europe*Star Transfer Deliveries**
          At the Closing, Loral shall:
               (i) execute the notice in the form attached hereto as **Exhibit 2.3(c)(i)**,notifying Europe*Star of the proposed transfer as contemplated by Article 35 ofthe Europe*Star Articles of Association adopted on December 7, 1998 (the“***Europe*Star Articles***”), and shall deliver such notice to Alcatel andEurope*Star;
               (ii) execute and deliver to Alcatel Spacecom the irrevocable power ofattorney (the “***Europe*Star Irrevocable Power***”) in the form attached hereto as**Exhibit 2.3(c)(ii)(a)**, authorizing Alcatel Spacecom (A) to submit, on Loral’sbehalf, any filings to the German Federal Cartel Office (Bundeskartellamt) (the“***FCO***”) to obtain FCO clearance of the transfer by Loral to Alcatel Spacecom ofthe Europe*Star Shares and (B) to execute, deliver and file, on Loral’s behalf,any documents necessary to complete the transfer of the Europe*Star Shares toAlcatel Spacecom, including without limitation the stock transfer form in theform attached hereto as **Exhibit 2.3(c)(ii)(b)**(the “***Europe*Star TransferForm***”), and with respect to the foregoing, Loral hereby instructs Alcatel notto submit the Europe*Star Transfer Form to the relevant stamp office unless anduntil FCO clearance has been received or obtained with respect to the proposedtransfer of the Europe*Star Shares;
9

 

               (iii) execute and deliver the Europe*Star Transfer Form, and with respectto the foregoing, Loral hereby instructs Alcatel not to submit the Europe*StarTransfer Form to the relevant stamp office unless and until FCO clearance hasbeen received or obtained with respect to the proposed transfer of theEurope*Star Shares; and
               (iv) deliver to Alcatel Spacecom the original share certificate No. 5representing the Europe*Star Shares.
          **(d) SLOD Transfer Deliveries**
          At the Closing, the Loral Parties shall cause Loral Global to execute anddeliver to Alcatel Spacecom the irrevocable power of attorney (the “***SLODIrrevocable Power***”) in the form attached hereto as **Exhibit 2.3(d)(i)(a)**,authorizing Alcatel Spacecom, on Loral Global’s behalf, to execute, file ordeliver any documents necessary to transfer to Alcatel Spacecom the SLOD Share,including without limitation the execution, pursuant to German notariesformalities, of the share transfer agreement in the form attached hereto as**Exhibit 2.3(d)(i)(b)**(the “***SLOD Local Transfer Agreement***”), and with respect tothe foregoing, Loral hereby instructs Alcatel not to execute or implement theSLOD Local Transfer Form unless and until FCO clearance has been received orobtained with respect to the proposed transfer of the SLOD Share (it beingunderstood that Loral Global shall have the obligation to transfer the SLODShare to Alcatel Spacecom upon such clearance being received or obtained); and
          **(e) Payment by the Loral Parties**
          At the Closing:
               (i) The Loral Parties shall pay to Alcatel the sum of US$5,000,000, plusthe amounts specified in clauses (A)-(G), below:
                    (A) US$125,000 as payment for the Loral Parties’ share of cost assessmentsin the ICC Arbitration;
                    (B) US$82,228.45 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract, SC-995212-AK, dated October 4, 1988,originally between Ford Aerospace Corporation (a predecessor of SS/L) andAlcatel Espace (predecessor-in-interest of Alcatel), as amended, related to the“Intelsat VII” satellite program and that certain Fixed Price SubcontractKF-274516-S, dated September 16, 1992, as amended, between SS/L and Alcatel (assuccessor of Aérospatiale S.N.I.);
10

 

                    (C) US$579,731 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract, S-612837-RJW, dated as of March 18, 1997,originally between SS/L and Alcatel Espace (predecessor-in-interest ofAlcatel), as amended, regarding the “Intelsat IX” satellite program;
                    (D) US$47,000 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract S-676105-EKW, relating to the “MTSat – 1R”satellite program;
                    (E) US$404,390 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract S-676738-TNT, relating to the “MBSAT”satellite program;
                    (F) US$360,190 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract S-676802-TNT relating to the “IPSTAR”satellite program; and
                    (G) US$50,710 representing amounts owed by SS/L to Alcatel under thatcertain Firm Fixed Price Subcontract KS-274923-M and that certain Firm FixedPrice Subcontract KS-274922-M relating to the “Globalstar” satellite program.
               (ii) The payment required in clause (i), above, shall be made inimmediately available funds sent by wire transfer to the following bank accountof Alcatel (the “***Alcatel Account***”):   Société Générale  30003 02110 00020089896 19  Innopole voie 8  BP 500  31316 Labège cedex  Swift code SOGEFRPP  
               (iii) The Loral Parties shall deliver to Alcatel the resignation lettersin substantially the form attached hereto as **Exhibit 2.3(e)(iii)**(the “***LoralResignation Letters***”) of every Person representing any Loral Party who, as ofthe date of this Master Agreement, to the knowledge of the Loral Parties, isserving as a director, officer, advisory committee representative orparticipant, or in any other capacity, in SkyBridge, Europe*Star, SLOD or SLUG.In the event any additional Persons are identified following the Closing asrepresenting any Loral Party as a director, officer, advisory committee
11

 

representative or participant or in any other capacity in SkyBridge,Europe*Star, SLOD or SLUG, the Loral Parties shall promptly cause such Personto resign, with effect as of the Closing Date.
               (iv) The Loral Parties shall deliver to Alcatel a true and completeexecuted copy of Amendment No. 2 to the LSC Facility.
     **2.4. Closing Deliveries of Alcatel**
          **(a) SkyBridge Transfer Deliveries:**
          At the Closing, Alcatel shall cause:
               (i) Alcatel Multimedia to execute a first election notice pursuant toSection 10.02(a) of the SkyBridge Partnership Agreement, which notice is in theform attached hereto as **Exhibit 2.4(a)(i)**, and to deliver such notice toSkyBridge and all of the other partners of SkyBridge (with a copy to Loral);and
               (ii) SkyBridge GP, Inc. to execute and deliver to Loral Broadband, awaiver in the form attached hereto as **Exhibit 2.4(a)(ii)**, waiving, on behalf ofSkyBridge, the notice contemplated by Section 10.01(c) of the SkyBridgePartnership Agreement and confirming that SkyBridge will not request a legalopinion in connection with the proposed transfer.
          **(b) Cyberstar Transfer Deliveries:**
          At the Closing, Alcatel shall cause Audelec to assign, transfer anddeliver to Loral Broadband the Cyberstar Units pursuant to the irrevocable unitpower in the form attached hereto as **Exhibit 2.4(b)**.
          **(c) Europe*Star Transfer Deliveries**
          At the Closing, Alcatel shall cause Alcatel Spacecom to execute anddeliver to Europe*Star the waiver in the form attached hereto as **Exhibit 2.4(c)**waiving, with respect to Loral’s transfer of the Europe*Star Shares pursuant tothis Master Agreement: (i) Alcatel Spacecom’s right to the notice referencedin Article 36 of the Europe*Star Articles and (ii) Alcatel Spacecom’s right offirst refusal referenced in Article 37 of the Europe*Star Articles.
12

 

          **(d) Additional Deliveries by Alcatel**
          In the event any Persons are identified following the Closing asrepresenting Audelec in any capacity in Cyberstar, Alcatel shall promptly causesuch Person to resign, with effect as of the Closing Date.
**3. Additional Agreements and Covenants of the Parties**
     **3.1 Deferred Payment of The Loral Parties**
     (a)  The Loral Parties shall pay to Alcatel the sum of US$8,000,000 inimmediately available funds sent by wire transfer to the Alcatel Account uponthe earliest to occur of (i) the Loral Parties, individually or collectively,having US$8,000,000 in cash that can be paid to Alcatel without violating anyrestrictive covenants contained in the Loral Loan Facilities; (ii) the firstanniversary of the Closing; or (iii) initiation of a case under Chapter 7 or 11of title 11 of the United States Code by or against any of the Loral Parties(such $8,000,000 payment, the “***Deferred Payment***”). The foregoing paymentobligation shall be a joint and several obligation of the Loral Parties.
     (b)  Until the Deferred Payment has been made, the Loral Parties shallnotify Alcatel promptly, and in any event within 5 business days, followingevery asset sale (or related series of sales) by any Loral Party (or any of itsAffiliates that is not a natural person) for a gross sales price of at leastUS$8,000,000, with such notice including a reasonably detailed explanation asto whether applicable restrictive covenants would be violated if the proceedswere used to make the Deferred Payment.
     **3.2 Termination of the Framework Agreement**
     Effective as of completion of the Closing, the Parties hereby absolutely,irrevocably and unconditionally terminate that certain “Term Sheet for theFramework for Joint Pursuit of Satellite Service Opportunities” dated as ofDecember 6, 1998 (the “***Framework Agreement***”), including without limitation allclauses or provisions thereunder which may, by their terms or otherwise,survive or continue in effect following termination or expiration of theFramework Agreement.
     **3.3 Mutual Releases and Discharge Among the Parties**
          (a) Effective as of completion of the Closing, Alcatel, for itself and onbehalf of Alcatel Spacecom, Audelec, Alcatel Multimedia, their respectiveofficers, directors, stockholders, advisors, Affiliates, successors, andassigns,
13

 

and SkyBridge GP, Inc., SkyBridge and Europe*Star and SLUG (the“***Alcatel Releasing Parties***”), hereby absolutely and irrevocably releases andforever discharges each ofthe Loral Parties, Loral Broadband, Loral Global, Loral Cyberstar, L.L.C.,Cyberstar, and their Affiliates and their respective current and formerofficers, directors, employees, principals, members, partners, stockholders,advisors (including legal counsel), successors and assigns, from any and allClaims which the Alcatel Releasing Parties now have or have ever had againstany or all of such released Persons or entities, whether known or unknown(including an express waiver of any and all rights conferred upon the AlcatelReleasing Parties by any statute or rule of law that provides that a releasedoes not extend to claims of which the releasing party does not know or suspectto exist in its favor at the time of executing the release, which if known bythe releasing party would have materially affected the releasing party’ssettlement with the released parties), matured or unmatured, contingent orfixed, arising pursuant to or in connection with the following:
               (i) the Alliance Agreement dated June 23, 1997 by and among Loral, LSCC,SS/L, Aerospatiale S.N.I., Alcatel, and Finmeccanica S.p.A, as amended; theOperational Agreement, dated April 22, 1991, by and among SS/L, Loral AerospaceHoldings, Inc., Loral Corporation, Aerospatiale S.N.I., Alcatel and AleniaAeritalia & Selenia S.p.A, as amended; the Stockholders Agreement, dated April22, 1991, by and among SS/L, Loral Aerospace Holdings, Inc., Loral Corporation,Aerospatiale S.N.I., Alcatel and Alenia Aeritalia & Selenia S.p.A; and theExchange Agreement, dated as of June 18, 1997, by and among Loral, Alcatel andAerospatiale S.N.I.
               (ii) Cyberstar, including without limitation all related agreements(including that certain Subscription Agreement by and among Cyberstar, LoralCyberstar, LLC., Loral, Audelec and Alcatel (which executed such agreementunder its prior name Alcatel Espace) dated as of June 17, 1998, and thatcertain Agreement of Limited Partnership of Cyberstar, L.P. dated as of June30, 1997 (collectively, the “***Cyberstar Agreements***”));
               (iii) SkyBridge, including without limitation all related agreements(including the SkyBridge Subscription Agreement by and among SkyBridge, AlcatelEspace, Loral Broadband and Loral and the SkyBridge Partnership Agreement(collectively, the “***SkyBridge Agreements***”));
               (iv) Europe*Star, including without limitation all related agreements(including those set forth in **Schedule 3.3(a)(iv)**) and the following financialobligations related directly to Europe*Star:
 (A) overdues and vendor-financing;
14

 

 (B) management fees and royalties;  (C) repayment of loans (andany accrued interest thereunder) for operationsand other purposes including without limitationloans made by shareholders in connection with theStellat investment; and  (D) construction of theEurope*Star 1 and 2 satellites, including withoutlimitation Claims relating to the agreementsrelating to the construction of the Europe*Star 1and 2 satellites, cancellation, in-orbitincentives and liquidated damages.
               (v) SLOD and SLUG (including without limitation all related agreements,including those set forth in **Schedule 3.3(a)(iv)**;
               (vi) the Framework Agreement;
               (vii) the ICC Arbitration (including all claims and counterclaims thathave been or could have been asserted therein);
               (viii) the Confirmation Proceeding;
               (ix) the Intelsat Orbitals Case;
               (x) Globalstar, L.P., Globalstar L.L.C., Globalstar Services Company, Inc.and Globalstar Capital Corporation (collectively, “Globalstar”);
               (xi) any and all other amounts due from the Loral Parties relating toEurope*Star, SLOD or SLUG, including Claims against the Loral Parties (andtheir Affiliates);
               (xii) the Loral Loan Facilities and all of the “Loan Documents” as definedtherein;
               (xiii) the June 5, 2002 Letter Agreement among the Parties requiring,*inter alia*, that all settlement discussions be kept confidential and subject toall settlement discussion privileges; and
15

 

               (xiv) the Interim Agreement, dated April 23, 2003, as amended betweenAlcatel, on the one hand, and Loral and SS/L, on the other hand.
     ***Provided, however,***with the exception of clause 3.3(a)(xii), the foregoingrelease and discharge set forth in this Section 3.3(a) does not apply to, limitor otherwise affect the rights, obligations and liabilities of the Partiesunder thisMaster Agreement, under the Consent Judgment or with respect to: (A)agreements listed in **Schedule 3.3**hereto; (B) warranty and service obligationsunder the subcontract between Alcatel Space and SS/L for procurement of theEurope*Star satellite; and (C) agreements between Alcatel or its Affiliates, onthe one hand, and SS/L, on the other hand, that are not specifically referencedin clauses 3.3(a)(i)-(vi), and 3.3(a)(xiii)-(xiv), above and that involve: (I)confidentiality agreements, (II) technical assistance agreements, (III) serviceor support agreements, (IV) warranty obligations on equipment that has beendelivered, provided that payment obligations associated with such equipment andwarranty obligations also continue; or (V) arm’s length supply and serviceagreements substantially similar to agreements that would be entered in theordinary course of business by companies in the same industry that have noalliance, strategic or other long term relationship between them.
          (b) Each Loral Party, for itself, Loral Broadband, Loral Global, LoralCyberstar, L.L.C. and their Affiliates and respective officers, directors,stockholders, advisors, successors, and assigns and Cyberstar (the “***LoralReleasing Parties***”), hereby absolutely and irrevocably releases and foreverdischarges each of Alcatel, Alcatel Spacecom, Audelec, Alcatel Multimedia,Europe*Star, SLOD, SLUG, SkyBridge GP, Inc., and SkyBridge, and theirAffiliates and each of its respective current and former officers, directors,employees, principals, members, partners, stockholders, advisors (includinglegal counsel), successors and assigns, from any and all Claims which LoralReleasing Parties now have or have ever had against any or all of such releasedPersons or entities, whether known or unknown (including an express waiver ofany and all rights conferred upon the Loral Releasing Parties by any statute orrule of law that provides that a release does not extend to claims of which thereleasing party does not know or suspect to exist in its favor at the time ofexecuting the release, which if known by the releasing party would havematerially affected the releasing party’s settlement with the releasedparties), matured or unmatured, contingent or fixed, arising pursuant to or inconnection with the following:
               (i) the Alliance Agreement dated June 23, 1997 by and among Loral, LSCC,SS/L, Aerospatiale S.N.I., Alcatel, and Finmeccanica
16

 

S.p.A, as amended; theOperational Agreement, dated April 22, 1991, by and among SS/L, Loral AerospaceHoldings, Inc., Loral Corporation, Aerospatiale S.N.I., Alcatel and AleniaAeritalia & Selenia S.p.A, as amended; the Stockholders Agreement datedApril 22, 1991, by and among SS/L, Loral Aerospace Holdings, Inc., LoralCorporation, Aerospatiale S.N.I., Alcatel and Alenia Aeritalia & Selenia S.p.A;and the Exchange Agreement, dated as of June 18, 1997, by and among Loral,Alcatel and Aerospatiale S.N.I.
               (ii) Cyberstar, including without limitation all related agreements,including the Cyberstar Agreements;
               (iii) SkyBridge, including without limitation all related agreements,including the SkyBridge Agreements;
               (iv) Europe*Star, including without limitation all related agreements(including those set forth in **Schedule 3.3(a)(iv)**) and the following financialobligations related directly to Europe*Star:
 (A) overdues and vendor-financing;  (B) management fees and royalties;  (C) repayment of loans (andany accrued interest thereunder) for operationsand other purposes, including without limitationloans made by shareholders in connection with theStellat investment; and  (D) construction of theEurope*Star 1 and 2 satellites, including withoutlimitation Claims relating to the agreementsrelating to the construction of the Europe*Star 1and 2 satellites, cancellation, in-orbitincentives and liquidated damages.
               (v) SLOD and SLUG (including without limitation all related agreements,including those set forth in **Schedule 3.3(a)(iv)**)
               (vi) the Framework Agreement;
               (vii) the ICC Arbitration (including all claims and counterclaims thathave been or could have been asserted therein)
17

 

               (viii) the Confirmation Proceeding;
               (ix) the Intelsat Orbitals Case;
               (x) Globalstar;
               (xi) any and all other amounts due from Alcatel relating to Europe*Star,SLOD or SLUG, including without limitation Claims against Alcatel (and itsAffiliates) as the manager of Europe*Star, SLOD and/or SLUG;
               (xii) the Loral Loan Facilities and all of the “Loan Documents” as definedtherein;
               (xiii) the June 5, 2002, Letter Agreement among the Parties requiring,*inter alia*, that all settlement discussions be kept confidential and subject toall settlement discussion privileges; and
               (xiv) the Interim Agreement, dated April 23, 2003, as amended betweenAlcatel, on the one hand, and Loral and SS/L, on the other hand.
     ***Provided, however,***with the exception of clause 3.3(b)(xii) the foregoingrelease and discharge set forth in this Section 3.3(b) does not apply to, limitor otherwise affect the rights, obligations and liabilities of the Partiesunder this Master Agreement, under the Consent Judgment or with respect to:(A) agreements listed in **Schedule 3.3**hereto; (B) warranty and serviceobligations under the subcontract between Alcatel Space and SS/L forprocurement of the Europe*Star satellite; and (C) agreements between Alcatel orits Affiliates, on the one hand, and SS/L, on the other hand, that are notspecifically referenced in clauses 3.3(a)(i)-(vi) and 3.3(a)(xiii)-(xiv), aboveand that involve: (I) confidentiality agreements, (II) technical assistanceagreements, (III) service or support agreements, (IV) warranty obligations onequipment that has been delivered, provided that payment obligations associatedwith such equipment and warranty obligations also continue; or (V) arm’s lengthsupply and service agreements substantially similar to agreements that would beentered in the ordinary course of business by companies in the same industrythat have no alliance, strategic or other long term relationship between them.
     (c)  The Alcatel Releasing Parties hereby irrevocably, fully and foreverrelease, relieve, waive, relinquish and discharge the Loral Lenders and each oftheir directors, officers, present and/or former employees serving in anycapacity or function, including as fiduciaries, agents, advisors, shareholders,
18

 

subsidiaries, affiliates, heirs, executors, administrators, successors andassigns from, against and with respect to any and all actual or potentialClaims and all other forms of liability whatsoever, in law or equity, whetherasserted or unasserted, known or unknown, foreseen or unforeseen, arising underthe United States Bankruptcy Code, state law or otherwise now existing orhereafter arising that any of the Alcatel Releasing Parties ever had, now hasor hereafter may have related to the Loral Loan Facilities and all of the “LoanDocuments” as defined thereunder, including without limitation any Claimsrelated to the granting of collateral to the Loral Lenders and the validity,priority, subordinatability and seniority of the liens and Claims held by theLoral Lenders (collectively, the “**Released Claims**”). This release shall applyto all Released Claims, whether known or unknown, including, withoutlimitation, claims which if known by any of the Alcatel Releasing Parties mightmaterially affect its decision to abide by this Master Agreement. Withoutlimiting thegenerality of the foregoing, each of the Alcatel Releasing Parties heretoexpressly waives any and all rights conferred upon it by any statute or rule oflaw that provides that a release does not extend to claims of which thereleasing party does not know or suspect to exist in its favor at the time ofexecuting the release, which if known by the releasing party would havematerially affected the releasing party’s settlement with the released parties.The release provided for in this paragraph shall be full and final, and shallconstitute a complete defense against the Released Claims with respect to anyand all parties who may seek to assert such claims.
     **3.4 Alcatel Not A Globalstar Creditor**
     Effective as of the completion of the Closing, the Loral Parties agree notto contend or assert that Alcatel is now, or has ever been, a “creditor” (asthat term is defined in the United States Bankruptcy Code) of Globalstar orever asserted any Claims against Globalstar.
     **3.5 Transfer of Europe*Star Shares**
     Effective upon completion of the Closing, the Loral Parties shallcooperate, assist, take, or shall cause to be taken, such further actions toexecute, deliver and file, or cause to be executed, delivered and filed, suchfurther documents and instruments, and to use best efforts to obtain suchconsents, as may be necessary or as may be requested to effect the transfer ofthe Europe*Star Shares to Alcatel Spacecom. In addition, the Loral Partiesshall (a) cooperate in good faith with Alcatel Spacecom with respect to all FCOfilings that Alcatel Spacecom elects to make or is required by Law to make inconnection with the transfer of the Europe*Star Shares to Alcatel Spacecom and(b) promptly provide Alcatel Spacecom any information necessary or
19

 

appropriateto complete any FCO filings associated with the transfer of the Europe*StarShares.
     **3.6 Cyberstar and SkyBridge Transfers**
     If all or any portion of any SkyBridge Units or the Cyberstar Units aretransferred during any accounting period, net income, net loss, each itemthereof and all other items attributable to such SkyBridge Units or CyberstarUnits for such period shall be divided and allocated between the transferor andthe transferee by accounting for their varying interests during such period inaccordance with the interim closing of the books method as provided in section706(d) of the United States Internal Revenue Code of 1986, as amended.
     **3.7 Transfer Intentions**
     In the event the FCO declines clearance of or otherwise rejects thetransfer by Loral to Alcatel Spacecom of the Europe*Star Shares or the transferby Loral Global to Alcatel Spacecom of the SLOD Share (if such transfer isrequired to bereviewed by the FCO), Alcatel shall have the right to designate alternatetransferees, and, if the FCO declines clearance of or otherwise rejects thetransfers to such alternate transferees the Parties shall negotiate in goodfaith to modify the arrangements to transfer the Europe*Star Shares and/or theSLOD Share so as to provide for transfers as similar as possible to thosecontemplated in this Master Agreement and consistent with applicable law andany conditions the FCO may have imposed. In all cases the transfer shall besubject to applicable law and the Parties shall cooperate in taking suchfurther actions (including executing such further documents and instruments),as may be necessary or reasonably appropriate to effectuate the foregoing.
     **3.8 Miscellaneous Covenants**
     (a)  The Loral Parties shall, by no later than July 11, 2003, deliver toAlcatel a Netherlands Antilles commercial register extract, dated no later than5 days after the Closing Date, evidencing the authority of the Loral Globalsignatory to the SLOD Irrevocable Power.
     (b)  The Parties shall make good faith efforts following the Closingpromptly to finalize **Schedule 3.3**by agreeing on which of the “open” contractslisted on **Schedule 3.3**shall remain on the schedule and reaching an agreementon a complete and final version of Schedule 3.3.
20

 

**4. Representations and Warranties of the Loral Parties**
     The Loral Parties hereby jointly and severally represent and warrant toAlcatel, as follows:
     **4.1 Restrictions and Consents**
          (a) The execution, delivery and performance by each Loral Party, LoralGlobal and Loral Broadband of this Master Agreement and all other documentscontemplated hereby, the fulfillment of and compliance with the respectiveterms and provisions hereof and thereof, and the consummation by each LoralParty, Loral Global and Loral Broadband of the transactions contemplated herebyand thereby, do not: (i) require any third party (including administrative,judicial or other governmental or super-governmental) notices, reviews,approvals, consents (including any “non-exercise” of veto or other rights) orany waivers, consents or approval of any Person or entity (collectively, the“***Loral Approvals***”) which have not already been fully provided, obtained orotherwise satisfied; or (ii) conflict with, result in any breach of, orconstitute a default under any agreement to which a Loral Party, Loral Globalor Loral Broadband is a party.
          (b) A true and complete list of the Loral Approvals is attached hereto as**Schedule 4.1(b)**.
     **4.2 Authorization**
          (a) The Loral Parties have full legal right, power and authority toexecute and deliver this Master Agreement, to consummate the transactions setforth herein and to perform all of the terms and conditions hereto to beperformed by each of them.
          (b) The execution and delivery of this Master Agreement by each of theLoral Parties and the performance by each Loral Party, Loral Global and LoralBroadband of the transactions contemplated herein have been duly and validlyauthorized by all requisite corporate action of each Loral Party and, asapplicable, by Loral Global and Loral Broadband.
          (c) This Master Agreement has been duly and validly executed and deliveredby each Loral Party and is the legal, valid and binding obligation of eachLoral Party, enforceable against each Loral Party in accordance with its terms.
21

 

     **4.3 Title**
          (a) Loral Broadband has sole and exclusive legal and equitable ownershipof and has good, valid and marketable title to the SkyBridge Units, free andclear of any Encumbrances; Loral has sole and exclusive legal and equitableownership of and has good, valid and marketable title the Europe*Star Shares,free and clear of any Encumbrances; and Loral Global has sole and exclusivelegal and equitable ownership of and has good, valid and marketable title theSLOD Share, free and clear of any Encumbrances.
          (b) The SkyBridge Units constitute each and every right, title andinterest in and to SkyBridge held by the Loral Parties or any of theirAffiliates;
          (c) The Europe*Star Shares constitute each and every right, title andinterest in and to Europe*Star held by the Loral Parties or any of theirAffiliates;
          (d) The SLOD Share constitutes each and every right, title and interest inand to SLOD held by the Loral Parties or any of their Affiliates;
          (e) With effect as of the Closing, Alcatel (or Alcatel Spacecom or anyother Affiliate or other Person designated by Alcatel, as the case may be)shall acquire good, valid and marketable title to, and all right, title andinterest in, the SkyBridge Units free and clear of any Encumbrances.
     **4.4 Loral Loan Facilities**
          The Loral Parties have furnished to Alcatel true and complete copies ofthe Loral Loan Facilities.
**5. Representations and Warranties of Alcatel**
     Alcatel hereby represents and warrants to the Loral Parties, as follows:
     **5.1 Restrictions and Consents**
          (a) The execution, delivery and performance by Alcatel of this MasterAgreement and all other documents contemplated hereby, the fulfillment of andcompliance with the respective terms and provisions hereof and thereof, and theconsummation by Alcatel and Audelec of the transactions contemplated hereby andthereby, do not: (i) require any third party (including administrative,judicial or other governmental or super-governmental) notices, reviews,approvals, consents (including any “non-exercise” of veto or other rights) orany waivers, consents or approvals of any Person or Governmental Entity(collectively, the “***Alcatel Approvals***”) which have not already been fully
22

 

provided, obtained and otherwise satisfied; or (ii) conflict with, result inany breach of, or constitute a default under any agreement to which Alcatel isa party.
          (b) A true and complete list of the Alcatel Approvals is attached heretoas **Schedule 5.1(b)**.
     **5.2 Authorization**
          (a) Alcatel has full legal right, power and authority to execute anddeliver this Master Agreement, to consummate the transactions set forth hereinand to perform all of the terms and conditions hereto to be performed by it.
          (b) The execution and delivery of this Master Agreement by Alcatel and theperformance by Alcatel and Audelec of the transactions contemplated herein havebeen duly and validly authorized by all requisite corporate action of Alcateland Audelec.
          (c) This Master Agreement has been duly and validly executed and deliveredby Alcatel and is the legal, valid and binding obligation of Alcatel,enforceable against Alcatel in accordance with its terms.
     **5.3 Title**
          (a) Audelec has sole and exclusive legal and equitable ownership of andhas good, valid and marketable title to the Cyberstar Units, free and clear ofany Encumbrances
          (b) With effect as of the Closing, Loral (or any Affiliate or other Persondesignated by Loral, as the case may be) shall acquire good, valid andmarketable title to, and all right, title and interest in, the Cyberstar Units,free and clear of any Encumbrances.
          (c) The Cyberstar Units constitute each and every right, title andinterest in and to Cyberstar held by Alcatel or any of its Affiliates.
**6. Governing Law; Jurisdiction**
     **6.1**This Master Agreement shall be governed by and construed in accordancewith the laws of the State of New York, without giving effect to the conflictsof laws principles thereof (other than Section 5-1401 of the New York GeneralObligations Law).
23

 

     **6.2**This Master Agreement and the duties and obligations of Alcatelhereunder shall be enforceable against Alcatel in the Commercial Court ofParis. For such purpose, Alcatel hereby submits to the non-exclusivejurisdiction of such court, and agrees that all claims in respect of thisMaster Agreement may be heard and determined in such court.
     **6.3**This Master Agreement and the duties and obligations of each LoralParty hereunder shall be enforceable against any Loral Party in any New Yorkstate court or, at Alcatel’s option and in its sole discretion, any New Yorkfederal court. For such purpose, each Loral Party hereby submits to thenon-exclusive jurisdiction of such courts, and agrees that all claims inrespect of this Master Agreement may be heard and determined in any of suchcourts.
**7. Miscellaneous**
     **7.1 Confirmation Proceeding and ICC Arbitration.**
     (a)  If no Loral Party has become subject to a case under Chapter 7 or 11of title 11 of the United States Code prior to the 91st day following the LoralTransfers Date, then by no later than the 100th day following the LoralTransfers Date Alcatel shall duly file and submit (on behalf of Alcatel and theLoral Parties) the Consent Judgment with the United States District Court forthe Southern District of New York and the ICC Termination Letter with the ICC.
     (b)  If a Loral Party has become subject to a case under Chapter 7 or 11 oftitle 11 of the United States Bankruptcy Code prior to the 91st day followingthe Loral Transfers Date, Alcatel shall not be required to file the ICCTermination Letter with the ICC or the Consent Judgment with the SouthernDistrict of New York until the date of confirmation of a plan of reorganizationor a liquidation in such proceeding; provided, however, that if any action iscommenced in such case seeking the repayment, disgorgement, or turnover of anyof the Loral Transfers to a trustee, receiver, debtor-in-possession, anunsecured creditor’s committee or any other Person or entity, then Alcatelshall not be required to file the ICC Termination Letter or the ConsentJudgment until such action has been dismissed.
     **7.2 Effect of Insolvency Events**
     (a)  Notwithstanding anything to the contrary in this Master Agreement (i)if all or any portion of the US$5,000,000 payment to Alcatel pursuant to**Section 2.3 (e)(i)**hereof (excluding the sub-clauses thereof) or the transferof the SkyBridge Units to Alcatel Multimedia as contemplated by **Section 2.3(a)**hereof or the transfers of the Europe*Star Shares and the SLOD Share to AlcatelSpacecom, as contemplated by **Sections 2.3(c) and 2.3(d)**hereof; or (ii)
24

 

 if anysubstantial portion of the payments to Alcatel described sub-clauses (A)-(G) of**Section**2.3(e)(i) hereof, is, pursuant to judicial order subsequently repaid,disgorged or turned overto a trustee, receiver, debtor-in-possession, an unsecured creditor’scommittee or any other Person or entity, in each case pursuant to anyinsolvency, bankruptcy, or any state or federal insolvency proceeding or case(whether at law or in equity), including without limitation, a case underChapter 7 or 11 of title 11 of the United States Code or for any other reason,then at Alcatel’s sole option, all Claims Alcatel has made against the LoralParties in “Phase III” of the ICC Arbitration (as more specifically set forthin Partial Award II, dated January 18, 2003, at paragraph 212(I)) and *passim*(such claims, the “***Reinstated Claims***”) shall be reinstated in full, and theMutual Releases and Discharges among Alcatel and the Loral Parties in Section3.3 hereof shall be deemed null, void, invalid and unenforceable to the extentthey are inconsistent with, or otherwise limit, the Reinstated Claims.
     (b)  Alcatel shall be entitled to pursue and recover the Reinstated Claims(less the value of any consideration received in the Loral Transfers that hasnot been so repaid, disgorged or turned over) in the ICC Arbitration or if sorequired in a proceeding before the applicable bankruptcy court. Prior to thereinstatement of the Reinstated Claims pursuant to Section 7.2(a), Alcatelshall not pursue the ICC Arbitration.
     (c)  For purposes of going forward on the Reinstated Claims: (i) all PhaseI and Phase II rulings in the ICC Arbitration, including those set forth inPartial Award I, dated February 9, 2002, and in Partial Award II, dated January18, 2003, as well as all Phase III rulings by the Arbitral Tribunal through thedate on which Phase III of the ICC Arbitration is suspended, shall be valid andbinding upon, fully accepted and admitted by the Parties; and (ii) all of theParties’ Phase III submissions in the ICC Arbitration shall be valid andeffective, and need not be resubmitted or realleged.
     **7.3 Headings**
     Section headings contained in this Master Agreement are inserted forconvenience of reference only, shall not be deemed to be a part of this MasterAgreement for any purpose and shall not in any way define or affect themeaning, construction or scope of any of the provisions hereof.
     **7.4 No Admission of Liability**
     This Master Agreement neither constitutes nor shall be construed as anadmission of liability by any Party.
25

 

     **7.5 Further Assurances**
     Each Party shall take, or shall cause to be taken, such further actions toexecute, deliver and file, or cause to be executed, delivered and filed, suchfurtherdocuments and instruments, and to use best efforts to obtain suchconsents, as may be necessary or as may be requested to effectuate fully thepurposes and terms of this Master Agreement, whether before, at or after thedate first set forth hereinabove.
     **7.6 Amendment**
     No amendment, modification or discharge of this Master Agreement, and nowaiver hereunder, shall be valid or binding unless set forth in writing andduly executed by the Party or the Agent under the Loral Loan Facilities, asapplicable, against whom enforcement of the amendment, modification, dischargeor waiver is sought.
     **7.7 Enforcement of Provisions**
     No delay or failure at any time on the part of any Party in exercising anyright, power or privilege under this Master Agreement, or in enforcing anyprovisions of this Master Agreement, shall (i) impair any such right, power orprivilege, (ii) be construed as a waiver of such provision, (iii) be construedas a waiver of any default or as an acquiescence therein or (iv) affect theright of such Party thereafter to enforce each and every provision of thisMaster Agreement in accordance with its terms.
     **7.8 Entire Agreement**
     This Master Agreement constitutes the entire agreement among the Partieswith respect to the subject matter hereof, and supersedes all prior oral orwritten agreements, commitments or understandings with respect to such matters.This Master Agreement (together with the Exhibits and Schedules hereto) shallbe binding upon and shall inure to the benefit of the Parties and theirrespective heirs, devisees, executors, administrators, legal representatives,successors and assigns. The Parties hereby expressly acknowledge that theLoral Lenders are intended third party beneficiaries of Sections 3.3(a)(xii)and 3.3(c) of this Master Agreement.
     **7.9 Notices**
     Any notice required to be provided hereunder by one Party to the othershall be given in writing and shall be delivered by personal messenger,
26

 

international courier service of international standing and recognition withcharges prepaid or facsimile addressed as set forth below or addressed as theParty receiving the notice shall have specified most recently by writtennotice:   (a) If to the Loral Parties:     Loral Space & Communications, Ltd  600 Third Avenue  New York, New York 10016  Facsimile: (212) 338 5320  Attention: Avi Katz, Esq.     With a copy (which shall not constitute notice) to:     Willkie Farr & Gallagher  787 Seventh Avenue  New York, NY 10019  Facsimile: +(1)212/728-8111  Attention: Steven H. Reisberg, Esq.   (b) If to Alcatel:     Alcatel Space  5, rue Noel-Pons  92737 Nanterre Cedex  France     Facsimile: + (33) 1.46.52.64.33  Attention: Yves de la Serre     With a copy (which shall not constitute notice) to:     Mark E. Mazo, Esq.  Hogan & Hartson L.L.P.  555 13th Street, N.W.  Washington, D.C. 20004  Facsimile: +(1) 202/637-5910   (c) If to the Loral Lenders:
27

 
     Bank of America, N.A.  Agency Management Services  101 N. Tryon Street  Charlotte, North Carolina, 28255  Attention: Kim Williams  Facsimile: +(1) 704/409-0650     With a copy (which shall not constitute notice) to:     John Fouhey, Esq.  Davis Polk & Wardwell  450 Lexington Avenue  New York, NY 10017  Facsimile: +(1) 212/450-3358
     **7.9 Severability**
     If any term or other provision of this Master Agreement is invalid,illegal or incapable of being enforced by any rule of Law or public policy, allother conditions and provisions of this Master Agreement shall neverthelessremain in full force and effect so long as the economic or legal substance ofthe transactions contemplated hereby is not affected in any manner materiallyadverse to any Party. Upon such determination that any term or other provisionis invalid, illegal or incapable of being enforced, the Parties shall negotiatein good faith to modify this Master Agreement so as to effect the originalintent of the Parties as closely as possible in an acceptable manner to the endthat transactions contemplated hereby are fulfilled to the extent possible.
     **7.10 Expenses**
     Each Party shall pay its own expenses incident to the negotiations andpreparation of this Master Agreement and with respect to the transactionscontemplated hereby, including all legal and accounting fees and disbursements.
     **7.11 Counterparts; Facsimile Execution**
     This Master Agreement may be executed in one or more counterparts, and bythe different Parties in separate counterparts, each of which when so executedand delivered shall constitute a single, binding instrument. To facilitateexecution, this Master Agreement may be executed through the use of facsimiletransmission, and a counterpart of this Master Agreement
28

 

 that contains thefacsimile signature of a Party shall constitute an executed counterpart of thisMaster Agreement.
[Remainder of this page intentionally left blank;