Document:

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                                                                   EXHIBIT 10.38

                         UNITED STATES BANKRUPTCY COURT
                          SOUTHERN DISTRICT OF NEW YORK

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                                                   )
In re:                                             )
                                                   )
                                                   )  Chapter 11
LORAL SPACE & COMMUNICATIONS LTD., et al.,         )
                                                   )  Case No. 03-41710 (RDD)
                                                   )
                                                   )  Jointly Administered
                           Debtors.                )
                                                   )
                                                   )
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             FINAL ORDER (I) AUTHORIZING DEBTORS (A) TO UTILIZE CASH
     COLLATERAL PURSUANT TO 11 U.S.C. SECTION 363, AND (B) TO OBTAIN POST-
  PETITION FINANCING PURSUANT TO 11 U.S.C. SECTIONS 105, 361, 362, 364(C)(1),
       364(C)(2), 364(C)(3), 364(D)(1) AND 364(E), (II) GRANTING ADEQUATE
   PROTECTION TO LENDERS PURSUANT TO 11 U.S.C. SECTIONS 361, 362, 363 AND 364,
                       AND (III) GRANTING RELATING RELIEF

      Upon the motion (the "MOTION"), dated July 15, 2003, of Loral Space &
Communications Ltd. (the "COMPANY") and its affiliated debtors, each as debtor
and debtor-in-possession (collectively, the "DEBTORS"), in the above-captioned
cases (the "CASES") pursuant to Sections 105, 361, 362, 363(c)(2), 364(c)(1),
364(c)(2), 364(c)(3), 364(d)(1) and 364(e) of title 11 of the United States
Code, 11 U.S.C. Sections 101, et seq. (the "BANKRUPTCY CODE"), and Rules 2002,
4001 and 9014 of the Federal Rules of Bankruptcy Procedure (the "BANKRUPTCY
RULES"), seeking, among other things:

            (1) authorization for the Debtors to use Cash Collateral (as defined
      below) pursuant to Section 363 of the Bankruptcy Code and subject to the
      terms and conditions set forth herein;

            (2) the granting of adequate protection to the Agents and the
      Lenders (each as defined below, and together, the "CREDIT AGREEMENT
      PARTIES") with respect to, inter alia, such use of Cash Collateral and any

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      diminution in the value of the Pre-Petition Collateral (as defined below)
      granted under or in connection with (a) that certain Amended and Restated
      Credit Agreement dated as of December 21, 2001 (as heretofore amended,
      supplemented or otherwise modified, the "SPACECOM CREDIT AGREEMENT") among
      Loral SpaceCom Corporation ("SPACECOM"), the several banks and other
      financial institutions from time to time parties thereto (the "SPACECOM
      LENDERS") and Bank of America, N.A., in its capacity as administrative
      agent for the SpaceCom Lenders (in such capacity or as Collateral Agent
      for the SpaceCom Lenders, the "SPACECOM AGENT") and the related Guarantee
      Agreement dated as of December 21, 2001 (as heretofore amended,
      supplemented or otherwise modified, the "SPACECOM GUARANTEE") by Loral
      Space & Communications Corporation and certain subsidiaries of SpaceCom in
      favor of the SpaceCom Agent, (b) that certain Credit Agreement dated as of
      November 17, 2000 (as heretofore amended, supplemented or otherwise
      modified, the "SATELLITE CREDIT AGREEMENT", together with the SpaceCom
      Credit Agreement, the "CREDIT AGREEMENTS") among Loral Satellite, Inc.
      ("SATELLITE"), the several banks and other financial institutions from
      time to time parties thereto (the "SATELLITE LENDERS", together with the
      SpaceCom Lenders, the "LENDERS"), and Bank of America, N.A., in its
      capacity as administrative agent for the Satellite Lenders (in such
      capacity or as Collateral Agent for the Satellite Lenders, the "SATELLITE
      AGENT",

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      together with the SpaceCom Agent in its capacity as such, the "AGENTS")
      and the related Guarantee dated as of November 17, 2000 (as heretofore
      amended, supplemented or otherwise modified, the "SATELLITE GUARANTEE") by
      the Company in favor of the Satellite Agent, (c) that certain Security
      Agreement dated as of December 21, 2001 among SpaceCom, the other grantors
      party thereto and the Agents (as heretofore amended, supplemented or
      otherwise modified, the "SPACECOM SECURITY AGREEMENT"), (d) that certain
      Second Intercreditor and Subordination Agreement dated as of March 31,
      2003 among the Agents and Loral Space & Communications Corporation (as
      heretofore amended, supplemented or otherwise modified, the "SPACECOM
      INTERCREDITOR AGREEMENT" and collectively with the SpaceCom Credit
      Agreement, the SpaceCom Guarantee, the SpaceCom Security Agreement and the
      other guarantee agreements, security agreements, pledge agreements,
      mortgages, deeds of trust and all other security and other documentation
      executed in connection therewith (including, for the avoidance of doubt,
      any obligations under subparagraph (iii) of the definition of SpaceCom
      Indebtedness in the SpaceCom Security Agreement, the "SPACECOM EXISTING
      AGREEMENTS"), (e) (i) that certain Amended and Restated Collateral
      Agreement dated as of November 17, 2000 among Satellite, the other
      grantors party thereto, and the Satellite Agent (the "COLLATERAL
      AGREEMENT"), (ii) the Amended and Restated Collateral Agency

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      Agreement dated as of November 17, 2000 among Satellite, the guarantors
      party thereto and the Satellite Agent (the "COLLATERAL AGENCY AGREEMENT")
      and (iii) that certain Amended and Restated Cash Collateral Agreement
      dated as of November 17, 2000 made by Satellite in favor of the Satellite
      Agent (the "CASH COLLATERAL AGREEMENT"), ((i), (ii) and (iii), in each
      case as heretofore amended, supplemented or otherwise modified, the
      "SATELLITE SECURITY AGREEMENTS"), and (f) that certain Intercreditor and
      Subordination Agreement dated as of December 21, 2001 among the Agents and
      SpaceCom (as heretofore amended, supplemented or otherwise modified, the
      "SATELLITE INTERCREDITOR AGREEMENT" and together with the SpaceCom
      Intercreditor Agreement, the "INTERCREDITOR AGREEMENTS", and, collectively
      with the Satellite Credit Agreement, the Satellite Guarantee, the
      Satellite Security Agreements, and the other guarantee agreements,
      security agreements, pledge agreements, mortgages, deeds of trust and all
      other security and other documentation executed in connection therewith
      (including, for the avoidance of doubt, any Hedge Agreement (as defined in
      the Satellite Credit Agreement), the "SATELLITE EXISTING AGREEMENTS" and
      together with the SpaceCom Existing Agreements, the "EXISTING
      AGREEMENTS");

            (3) authorization for SpaceCom to obtain certain limited secured
      post-petition financing from Satellite in connection with the Master Lease
      (as defined below), and for all of the SpaceCom Obligor Debtors to be

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      jointly and severally liable for SpaceCom's obligations in connection with
      such financing;(1)

            (4) authorization for Cyberstar (as defined below) to obtain secured
      post-petition financing from SpaceCom upon the terms and conditions
      contained herein;

            (5) the granting of certain superpriority claims to Satellite,
      SpaceCom, the Agents and the Lenders payable from, and having recourse to,
      all pre-petition and post-petition property of the Obligor Debtors' or
      Cyberstar's estates and all proceeds thereof (including any proceeds of
      Avoidance Actions (as defined below)), subject to the Carve Out (as
      defined below), which is an "Extraordinary Provision" (an "EXTRAORDINARY
      PROVISION") under General Order No. M-274 of the United States Bankruptcy
      Court for the Southern District of New York (the "GENERAL ORDER");

            (6) the limitation of the Debtors' right to surcharge against
      Collateral pursuant to Section 506(c) of the Bankruptcy Code, which is an
      Extraordinary Provision under the General Order;

            (7) the inclusion of a right to terminate use of Cash Collateral if
      any Debtor challenges any liens granted pursuant to the Existing
      Agreements or any prepetition conduct of the Agents or Lenders or if any

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(1)   "SPACECOM OBLIGOR DEBTORS" shall mean SpaceCom, Loral Space &
      Communications Corporation, Space Systems/Loral, Inc. ("SSL"), Loral
      Communications Services, Inc. and Loral Ground Services LLC.

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      unstayed order adverse to the Credit Agreement Parties is granted as a
      result of such challenge by any other person, which is an Extraordinary
      Provision under the General Order;

            (8) pursuant to Bankruptcy Rule 4001, that an interim hearing (the
      "INTERIM HEARING") on the Motion be held before this Court to consider
      entry of the proposed interim order annexed to the Motion (a) authorizing
      SpaceCom, on an interim basis, to enter into the Master Lease Loan (as
      defined in the Interim Order), (b) authorizing the Debtors' use of Cash
      Collateral, and (c) granting the adequate protection described herein; and

            (9) that this Court schedule a final hearing (the "FINAL HEARING")
      to be held within 30 days of the entry of the Interim Order to consider
      entry of a final order authorizing the Master Lease Loan, the use of Cash
      Collateral and granting the adequate protection described herein on a
      final basis, as set forth in the Motion.

      Due and appropriate notice of the Motion, the relief requested therein and
the Final Hearing having been served by the Debtors on the twenty largest
unsecured creditors of the Debtors on a consolidated basis, the Agents and on
the United States Trustee for the Southern District of New York;

      The Interim Hearing having been held by this Court on July 15, 2003 at
which the Court (a) issued and entered the Interim Order authorizing the use of
Cash Collateral and the post-petition financing (the "INTERIM ORDER") and (b)
scheduled a Final Hearing to consider entry of a final order as set forth in the
Motion and Interim Order;

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      The Final Hearing having been held by this Court on August 22, 2003; and

      Upon the record of the Interim Hearing and the Final Hearing including the
clarifications of this Order set forth on the record, and after due deliberation
and consideration and sufficient cause appearing therefor;

      IT IS FOUND, DETERMINED, ORDERED AND ADJUDGED, that:

      1. Jurisdiction. This Court has core jurisdiction over the Cases, this
Motion, and the parties and property affected hereby pursuant to 28 U.S.C.
Sections 157(b) and 1334. Venue is proper before this Court pursuant to 28
U.S.C. Sections 1408 and 1409.

      2. Notice. Under the circumstances, the notice given by the Debtors of the
Motion, the Interim Hearing and the Final Hearing, constitutes due and
sufficient notice thereof and complies with Bankruptcy Rules 4001(b) and (c).

      3. Debtors' Stipulations. Without prejudice to the rights of any other
party (but subject to the limitations thereon and the other parties' rights
contained in paragraph 14 below), the Debtors admit, stipulate and agree that:

            (a) (i) as of the filing of the Debtors' chapter 11 petitions (the
"PETITION DATE"), the Debtors were, under the Existing Agreements to which they
are a party, indebted and liable to (A) the SpaceCom Lenders, without defense,
counterclaim or offset of any kind, in the aggregate principal amount of
approximately $535,000,000.00 in respect of loans made and in the aggregate
principal amount of approximately $12,656,958.00 in respect of letters of credit
issued (the "PRE-PETITION LETTERS OF CREDIT"), in each case, by the SpaceCom
Lenders pursuant to, and in accordance with the terms of, the SpaceCom Existing
Agreements, plus, in each case, interest thereon and

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fees, expenses (including any attorneys', accountants', appraisers' and
financial advisors' fees that are chargeable or reimbursable under the SpaceCom
Existing Agreements), charges and other obligations incurred in connection
therewith as provided in the SpaceCom Existing Agreements and (B) the Satellite
Lenders, without defense, counterclaim or offset of any kind, in the aggregate
principal amount of approximately $426,500,000.00 in respect of loans made by
the Satellite Lenders pursuant to, and in accordance with the terms of, the
Satellite Existing Agreements, plus, in each case, interest thereon and fees,
expenses (including any attorneys', accountants', appraisers' and financial
advisors' fees that are chargeable or reimbursable under the Satellite Existing
Agreements), charges and other obligations incurred in connection therewith as
provided in the Satellite Existing Agreements ((A) and (B) collectively,
together with the obligations of any Debtors pursuant to any Bank of America
Hedge Agreements and JPMorgan Chase Hedge Agreements (in each case, as defined
below), the "PRE-PETITION OBLIGATIONS"), (ii) the Pre-Petition Obligations
constitute legal, valid and binding obligations of the applicable Debtors,
enforceable in accordance with their respective terms (other than in respect of
the stay of enforcement arising from Section 362 of the Bankruptcy Code), (iii)
no portion of the Pre-Petition Obligations is subject to avoidance,
recharacterization or subordination pursuant to the Bankruptcy Code or
applicable nonbankruptcy law and (iv) the Debtors do not have, and hereby
forever release, any claims, counterclaims, causes of action, defenses or setoff
rights, whether arising under the Bankruptcy Code or otherwise, against the
Lenders, the Agents and their respective affiliates, agents, officers,
directors, employees, representatives, attorneys, and advisors

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arising in connection with any Pre-Petition Obligations, the Existing
Agreements, any loan, letter of credit or commitment thereunder or any use of
the proceeds thereof, or any other agreements, instruments, engagements or
transactions contemplated by or relating to any of the foregoing;

            (b) the liens and security interests granted to the Agents pursuant
to and in connection with the Existing Agreements (including, without
limitation, all security agreements, pledge agreements, mortgages, deeds of
trust and other security documents executed by any of the Debtors in favor of
the Agents, for their benefit and for the benefit of the Lenders) are (i) valid,
binding, perfected and enforceable liens and security interests, as described in
the Existing Agreements, in the personal and real property specified therein
(the "PRE-PETITION COLLATERAL"), (ii) not subject to avoidance,
recharacterization or subordination pursuant to the Bankruptcy Code or
applicable nonbankruptcy law and (iii) subordinate only to (A) the Carve Out (as
defined below) and (B) valid, perfected and unavoidable liens permitted under
the Existing Agreements to the extent such liens are permitted to be and are
senior to or pari passu with the liens of the Agents on the Pre-Petition
Collateral; and

            (c) the aggregate value of the Pre-Petition Collateral exceeds the
aggregate amount of the Pre-Petition Obligations.

      4. Findings Regarding the Use of Collateral.

            (a) Good cause has been shown for the entry of this Order.

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            (b) The SpaceCom Obligor Debtors and Satellite Obligor Debtors(2)
(collectively, the "OBLIGOR DEBTORS") have an immediate need to use Cash
Collateral in order to permit, among other things, the orderly continuation of
the operation of their businesses, to maintain business relationships with
vendors, suppliers and customers, to make payroll, to make capital expenditures
and to satisfy other working capital needs. The ability of the Obligor Debtors
to obtain sufficient working capital and liquidity through the use of Cash
Collateral, incurrence of new indebtedness for borrowed money and other
financial accommodations is vital to the preservation and maintenance of the
going concern values of the Obligor Debtors and to a successful reorganization
of the Obligor Debtors.

            (c) Loral Cyberstar ("CYBERSTAR") is unable to obtain financing from
sources other than SpaceCom on more favorable terms and is unable to obtain
adequate unsecured credit allowable under Section 503(b)(1) of the Bankruptcy
Code as an administrative expense. Cyberstar is also unable to obtain secured
credit allowable under Sections 364(c)(1), 364(c)(2) and 364(c)(3) of the
Bankruptcy Code without Cyberstar granting to SpaceCom, subject to the Carve Out
as provided for herein, the Cyberstar Liens and the Cyberstar Superpriority
Claims (each as defined below) under the terms and conditions set forth in this
Order. The Credit Agreement Parties have objected to the use by the Obligor
Debtors of their Pre-Petition Collateral, including Cash Collateral and to the
Cyberstar Loans (as defined below) except on the terms of this Order.

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(2)   "SATELLITE OBLIGOR DEBTORS" shall mean Satellite, Loral Space and
      Communications Corporation ("Loral Delaware") and the Company.

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            (d) The terms of the Cyberstar Loans and the use of Cash Collateral
are fair and reasonable, reflect the Debtors' exercise of prudent business
judgment consistent with their fiduciary duties and are supported by reasonably
equivalent value and fair consideration. The terms of the use of Cash Collateral
and the Cyberstar Loans have been negotiated in good faith and at arm's length
among the Debtors, the Agents, the Committee and the Lenders. All of Cyberstar's
obligations and indebtedness arising under, in respect of or in connection with
the Cyberstar Loans shall be deemed to have been extended by SpaceCom in good
faith, as that term is used in Section 364(e) of the Bankruptcy Code and in
express reliance upon the protections offered by Section 364(e) of the
Bankruptcy Code, and shall be entitled to the full protection of Section 364(e)
of the Bankruptcy Code if this Order or any provision hereof is vacated,
reversed or modified, on appeal or otherwise.

            (e) The Debtors have requested entry of this Order pursuant to
Bankruptcy Rules 4001(b)(2) and 4001(c)(2). Absent entry of this Order, the
Debtors' estates will be immediately and irreparably harmed. Authorization of
the Cyberstar Loans and the use of Cash Collateral in accordance with this Order
is therefore in the best interest of the Debtors' estates.

      5. Cash Collateral. Subject to parties' rights under paragraph 14 hereof,
all funds of the Obligor Debtors (including any funds of such Debtors on deposit
at any Lender or at any other institution) as of the Petition Date are cash
collateral of the applicable Credit Agreement Parties within the meaning of
Section 363(a) of the Bankruptcy Code. In addition, all cash proceeds of
Pre-Petition Collateral received after

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the Petition Date are cash collateral of the Lenders within the meaning of
Section 363(a) of the Bankruptcy Code. Furthermore, to the extent that any funds
of any Obligor Debtor were on deposit with any Lender as of the Petition Date,
such funds were subject to rights of setoff. By virtue of such setoff rights,
such funds are subject to a lien in favor of such Lenders pursuant to Sections
506(a) and 553 of the Bankruptcy Code. The Lenders are obligated, to the extent
provided for in the Existing Agreements, to share the benefit of such liens with
the other Lenders party to such Existing Agreements based upon their respective
pro rata shares of the obligations under the Existing Agreements. All such cash
collateral (including with limitation, funds subject to such setoff rights) is
referred to herein as "CASH COLLATERAL".

      6. Use of Cash Collateral. (a) Subject to the provisions of this Order
(including the proviso of the last sentence of this subparagraph (a)) and to the
condition that the Lenders are granted adequate protection as hereinafter set
forth, the Debtors specified in the Approved Forecast (as defined below) are
hereby authorized to use Cash Collateral from the Effective Date until the
Termination Date (each as defined below) to fund the types of disbursements
specified in the line items set forth in the Approved Forecast for each entity
included therein; provided that under no circumstance shall the Debtors permit
the aggregate amount of cash disbursements by SS/L, Loral Skynet (a division of
SpaceCom) ("SKYNET") or SpaceCom from July 7, 2003 (the "BEGINNING DATE") until
the last day of any week, beginning with the week ending July 25, 2003, to
exceed 110% of the aggregate amount of cash disbursements projected for the
applicable Debtor, in the Approved Forecast during the applicable period
(excluding (x) in the case

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of SS/L, disbursements of a type specified in line items relating to launch
costs, insurance or "known required subcontractor payments", (y) in the case of
Skynet, any payments under the Master Lease (as defined below) and (z) in the
case of Satellite, any Master Lease Loans (as defined in the Interim Order)). As
used herein, "APPROVED FORECAST" (i) means initially, the 13-week cash forecast
delivered by the Company to the Agents and the steering committee appointed by
the Agents (the "STEERING COMMITTEE") and designated by the Company and the
Agents as the Approved Forecast prior to the Petition Date; (ii) if the Business
Plan (as defined below) (including a weekly cash forecast for the thirteen weeks
ended November 14, 2003 included therein) is approved by both the "Majority
Lenders" as defined in the Satellite Credit Agreement (the "SATELLITE REQUIRED
LENDERS") and the "Required Banks" as defined in clause (ii) of the definition
thereof in the SpaceCom Credit Agreement (the "SPACECOM REQUIRED LENDERS"),
means thereafter, until November 14, 2003, the weekly cash forecast included in
the Business Plan and (iii) if the Final Weekly Forecast (as defined below) is
approved by the Satellite Required Lenders and SpaceCom Required Lenders, means
thereafter the Final Weekly Forecast. The Debtors' right to use Cash Collateral
shall terminate automatically on the Termination Date; provided that after the
Termination Date, the Debtors are hereby authorized to use Cash Collateral to
pay salaries and wages in accordance with the Approved Forecast but solely to
the extent such salaries and wages were accrued and unpaid prior to the
Termination Date and are included in the "Payroll" and "Payroll Taxes" line
items for SpaceCom, "Payroll-Baseline" line item for SS/L and "Wages & Salaries"
line item for Skynet and Cyberstar in the Approved Forecast.

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            (b) The "EFFECTIVE DATE" shall be deemed to have occurred upon entry
of the Interim Order.

            (c) The "TERMINATION DATE" shall occur immediately upon the
occurrence of any event described in clause (i), (ii), (xvii), (xviii), (xix),
(xxii) or (xxiv) below or, if any event described in any other clause below
shall occur, three business days after any Agent at the request of the Satellite
Required Lenders or SpaceCom Required Lenders, as applicable, shall deliver
written notice to the Company (which may be delivered at any time after the
occurrence of any such event) that the Termination Date has occurred (each event
below, a "TERMINATION EVENT"):

                        (i)   September 12, 2003 (the "OUTSIDE DATE"); provided
                              that if the Business Plan (as defined below)
                              including the intercompany allocations, funds
                              flows, transfers and payments contained therein is
                              approved by the Satellite Required Lenders and
                              SpaceCom Required Lenders prior to September 12,
                              2003, the Outside Date shall be extended to
                              November 14, 2003 without further order of this
                              Court; provided further that if the Final Weekly
                              Forecast is approved by the Satellite Required
                              Lenders and the SpaceCom Required Lenders prior to
                              November 14, 2003, the Outside Date shall be
                              extended to December 31, 2003 without further
                              order of this Court;

                        (ii)  any Debtor shall fail to comply with paragraph
                              6(d) or 8(c) of this Order;

                        (iii) any Debtor shall fail to comply with any of the
                              terms or conditions of this Order other than
                              paragraph 6(d) or 8(c);

                        (iv)  any Debtor shall seek any modification or
                              extension of this Order without the prior written
                              consent of the Agents, the Satellite Required
                              Lenders and the SpaceCom Required Lenders (unless
                              such modification is not material, in which case
                              the

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                              Debtors shall not seek such modification without
                              the consent of the Agents (which consent shall not
                              unreasonably be withheld)) or any order shall be
                              entered, other than with the consent of the
                              Agents, the Satellite Required Lenders and the
                              SpaceCom Required Lenders, reversing, amending,
                              supplementing, staying, vacating or otherwise
                              modifying this Order in any material respect
                              adverse to any Agents or Lenders or terminating
                              the use of Cash Collateral by the Debtors pursuant
                              to this Order;

                        (v)   the aggregate amount of cash disbursements by any
                              of SS/L, Satellite, Skynet and SpaceCom, from the
                              Beginning Date until the last day of any week,
                              beginning with the week ending July 25, 2003,
                              exceeds 110% of the aggregate amount of cash
                              disbursements projected for the applicable Debtor
                              in the Approved Forecast during the applicable
                              period (excluding (x) in the case of SS/L and
                              SpaceCom, line items related to launch vehicle
                              costs, insurance and known required subcontractor
                              payments and (y) in the case of Skynet and
                              SpaceCom, any payments under the Master Lease),
                              provided that as to Satellite, such test shall
                              commence with the week beginning September 15,
                              2003;

                        (vi)  the aggregate amount of payments in respect of
                              "critical vendor payments" (identified in the
                              Approved Forecast as "Known Required Subcontractor
                              Payments") by any Debtors, from the Beginning Date
                              until the last day of any week, beginning with the
                              week ending July 25, 2003, exceeds 100% of the
                              aggregate amount of "Known Required Subcontractor
                              Payments" projected for SS/L in the Approved
                              Forecast during the applicable period;

                        (vii) the aggregate amount of cash receipts by any of
                              SS/L, Skynet, SpaceCom and Satellite, from the
                              Beginning Date until the last day of any week,
                              beginning with the week ending July 25, 2003 (or,
                              in the case of SS/L, with the week ending August
                              8, 2003), is less than 90% of the aggregate amount
                              of cash receipts projected for the applicable
                              entity in

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                              the Approved Forecast during the applicable period
                              (excluding (x) in the case of SS/L and SpaceCom,
                              line items related to launch vehicle costs and
                              insurance, (y) in the case of SpaceCom, any Master
                              Lease Loans and (z) in the case of Satellite, any
                              payments related to the Master Lease), provided
                              that as to SpaceCom and SSL, such test shall
                              commence with the week beginning September 15,
                              2003;

                       (viii) the cumulative aggregate disbursements made by
                              SpaceCom (through Skynet) on behalf of Cyberstar
                              on or after the Petition Date shall exceed the
                              cumulative aggregate payments made by Cyberstar to
                              SpaceCom (through Skynet) by more than $1,000,000;

                        (ix)  (i) SpaceCom shall fail to calculate the corporate
                              allocation amounts owed to it by Satellite,
                              Cyberstar, Loral Orion Inc. ("ORION") and Orion
                              Data Inc. (each a "PAYOR ENTITY") each month in
                              accordance with the historical formula used by
                              Spacecom in a manner acceptable to the Agents and
                              invoice the Payor Entities for such amounts;
                              provided that the allocation of reorganization
                              expenses shall not be pursuant to the historical
                              formula or (ii) any Payor Entity shall fail to pay
                              the corporate allocation owed by it to SpaceCom
                              within 5 business days of the end of each month;

                        (x)   the Debtors transfer, loan or otherwise provide
                              any cash or cash equivalents to Loral Skynet do
                              Brasil ("BRASIL") other than as expressly provided
                              for in the Business Plan or Final Weekly Forecast;

                        (xi)  the Debtors shall fail to (i) calculate the
                              amounts owed by Satellite to Skynet for items
                              included in the "Satellite - TT&C Telstar 6&7"
                              line item in the Approved Forecast pursuant to the
                              Amended and Restated Agreement between Loral
                              Satellite, Inc. and Loral SpaceCom Corporation
                              Concerning Professional Services or (ii) pay such
                              amounts when forecast to be paid in the Approved
                              Forecast;

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                        (xii) the Debtors shall fail to (i) calculate the
                              amounts owed by Satellite to SS/L for items
                              included in the "Satellite - Telstar 6 (Orbitals)"
                              line item in the Approved Forecast pursuant to
                              Contract Amendment No. 3 to Contract No LLJ108E
                              between Loral Skynet, a division of Loral SpaceCom
                              Corporation and Space Systems/Loral or (ii) pay
                              such amounts when forecast to be paid in the
                              Approved Forecast;

                       (xiii) Cyberstar shall fail to (i) pay SS/L the amounts
                              included in the Approved Forecast in the line item
                              "Cyberstar - Mabuhay Payments" for the weeks ended
                              July 11 and August 1, 2003, by August 26, 2003 or
                              (ii) make the payments included in the "Cyberstar
                              - Mabuhay Payments" line item for the period
                              following the week ended August 1, 2003 as shown
                              in the Approved Forecast;

                        (xiv) Orion shall fail to pay to Skynet the Orion fees
                              calculated pursuant to the contract under which
                              Orion pays to Skynet such fees covering the
                              operations, management, marketing, telemetry,
                              tracking and control of Orion's satellites on a
                              monthly basis;

                        (xv)  the aggregate amount of cash or cash equivalents
                              held (a) by Satellite at any time is less than $4
                              million prior to October 31, 2003 and $10 million
                              thereafter or (b) by the Company at any time is
                              less than $3.25 million;

                        (xvi) (a) except as modified herein or with the written
                              consent of the Agents, any Debtor shall fail to
                              make any payment or fail to comply with any other
                              material terms or conditions or seek rejection of
                              the Amended and Restated Master Lease Agreement
                              dated as of November 17, 2000 between Satellite
                              and SpaceCom (the "MASTER LEASE") or (b) the
                              Master Lease shall be rejected pursuant to an
                              order of this Court;

                       (xvii) (a) an Asset Purchase Agreement with Intelsat,
                              Ltd. ("Intelsat"), providing for the proposed
                              purchase of satellites and other assets (the
                              "SATELLITE ASSETS") by

                                       17
<PAGE>

                              Intelsat, substantially in the form and materially
                              on the same economic terms delivered to the Agents
                              and the Steering Committee prior to the Petition
                              Date, is not executed by Intelsat and the
                              applicable Debtors by the date that is five days
                              after the Petition Date (as signed, the "INTELSAT
                              AGREEMENT"); (b) the Intelsat Agreement is amended
                              in any material respect unfavorable to any Debtor
                              or the Lenders or the Intelsat Agreement is
                              terminated (other than a termination because the
                              Debtors have accepted a higher or better offer
                              pursuant to the bid procedures previously approved
                              by this Court); or (c) an order approving the sale
                              of the Satellite Assets pursuant to the terms of
                              the Intelsat Agreement (or any higher and better
                              offer resulting from the bidding process) is not
                              entered by November 1, 2003;

                      (xviii) an application shall be filed by any Obligor
                              Debtor for the approval of any superpriority claim
                              or any lien in any of the Cases of any Obligor
                              Debtor that is pari passu with or senior to the
                              Adequate Protection Claims or Adequate Protection
                              Liens, or there shall be granted any such pari
                              passu or senior superpriority claim or lien, as to
                              any Obligor Debtor except any such superpriority
                              claims and liens arising hereunder or pursuant to
                              any other financing arrangements that are approved
                              in writing by the Agents;

                        (xix) the commencement of any action by any Debtor
                              against the Agents or any Lender with respect to
                              the Existing Agreements, including without
                              limitation any action to avoid or subordinate any
                              Pre-Petition Obligations or any liens securing any
                              Pre-Petition Obligations or, in the case of any
                              such action commenced by any person other than a
                              Debtor, the court enters an order granting any
                              such relief and any such order is not subject to a
                              stay;

                        (xx)  any order shall be entered granting relief from
                              the automatic stay applicable under Section 362 of
                              the Bankruptcy Code to the holder or holders of
                              any security interest, lien or right of setoff to
                              permit foreclosure (or the granting of a deed in
                              lieu of

                                       18
<PAGE>

                              foreclosure or the like), possession, set-off or
                              any similar remedy with respect to any assets of
                              any Obligor Debtor that have a value in excess of
                              $1,000,000 in the aggregate;

                        (xxi) except as permitted by the First Day Orders (as
                              reviewed and approved by the Agents and included
                              in the Approved Forecast), any Obligor Debtor
                              (including all present and future Obligor Debtors)
                              shall make any payment in respect of a
                              pre-petition claim in excess of $100,000
                              individually or $500,000 in the aggregate;

                      (xxii) (A) any of the Cases shall be dismissed or
                              converted to a case under Chapter 7 of the
                              Bankruptcy Code or any Debtor shall file a motion
                              or other pleading seeking the dismissal of any of
                              the Cases under Section 1112 of the Bankruptcy
                              Code or otherwise; or (B) a trustee under Chapter
                              11 of the Bankruptcy Code, a responsible officer
                              or an examiner with enlarged powers relating to
                              the operation of the business (powers beyond those
                              set forth in Section 1106(a)(3) and (4) of the
                              Bankruptcy Code) under Section 1106(b) of the
                              Bankruptcy Code shall be appointed or elected in
                              any of the Cases, other than a Case in which the
                              relevant Debtor has assets of less than
                              $1,000,000;

                      (xxiii) (A) Conway Del Genio Gries & Co., LLC shall
                              cease to be retained as financial advisor for the
                              Company, Satellite or SpaceCom and a replacement
                              reasonably acceptable to the Satellite Required
                              Lenders and SpaceCom Required Lenders shall not
                              have been appointed within 10 days thereafter, (B)
                              the Company shall cease to own all of the capital
                              stock and voting interests in SpaceCom or
                              Satellite or (C) the board of directors of
                              SpaceCom or Satellite shall cease to consist of a
                              majority of Continuing Directors of SpaceCom or
                              Satellite, as applicable. "CONTINUING DIRECTORS"
                              shall mean the directors of SpaceCom or Satellite,
                              as applicable, on the Petition Date and each other
                              director, if, in each case, such other director's
                              nomination for election to the board of directors
                              of either SpaceCom or

                                       19
<PAGE>

                              Satellite is recommended by at least a majority of
                              the then Continuing Directors;

                        (xxiv) any material provision of this Order shall for
                              any reason, cease to be valid and binding or any
                              Debtor shall so assert in any pleading filed in
                              any court;

                        (xxv) any failure to comply with Section 8.1, 8.2, 8.5,
                              8.6 or 8.8 of the SpaceCom Credit Agreement,
                              Section 5.1, 5.2, 5.5, 5.6, 5.8 or 5.12 of the
                              Satellite Credit Agreement, Section 5 of the
                              SpaceCom Security Agreement, Section 6 to the
                              Pledge Agreement dated as of December 21, 2001,
                              Section 5 of the Second Amendment dated as of
                              March 31, 2003 to the Satellite Credit Agreement,
                              Section 6 of the Second Amended and Restated
                              Pledge Agreement dated as of March 31, 2003,
                              Section 4.4 of the Collateral Agency Agreement or
                              Section 6 of the Cash Collateral Agreement;

                       (xxvi) [intentionally deleted];

                      (xxvii) any transponder lessee on the Telstar 6 or
                              Telstar 7 satellite is transferred to another
                              satellite of any Debtor (other than Telstar 6 or
                              Telstar 7), other than for technical reasons or as
                              requested by the lessee (not at the suggestion of
                              any Debtor); or

                     (xxviii) bank concentration account number 1076-121464
                              held at Comerica Bank shall at any time have a
                              balance in excess of $50,000; and any other
                              concentration accounts of any Debtor maintained
                              with any financial institutions in the United
                              States shall not have their daily account balances
                              swept into an account maintained at Bank of
                              America, N.A.;

                              ; provided that the Satellite Required Lenders may
                              waive any Termination Event with respect to the
                              Satellite Obligor Debtors, in which case the
                              Termination Date shall be deemed not to have
                              occurred with respect to the Satellite Obligor
                              Debtors, and the SpaceCom Required Lenders may
                              waive any Termination Event with respect to the
                              SpaceCom Obligor Debtors, in which case the

                                       20
<PAGE>

                              Termination Date shall be deemed not to have
                              occurred with respect to the SpaceCom Obligor
                              Debtors. The Debtors shall immediately provide
                              notice to the Agents and the Committee (as defined
                              below) of the occurrence of any Termination Event.

            (d) On the last business day of each month commencing with August
2003, SpaceCom (through Skynet) shall pay to Satellite an amount agreed to by
SpaceCom, Satellite and the Agents, on account of the rent payable on such date
in connection with the Master Lease net of the amount agreed to between
Satellite, SpaceCom and the Agents as the appropriate monthly allocation in
respect of management, marketing, customer service and TT&C relating to the
satellites that are the subject of the Master Lease(3) The amount of these
monthly net payments (which for August 2003 shall be approximately $3.7 million)
shall be without prejudice to the Agents' and Committee's rights to challenge
such agreed amounts. The Debtors shall provide the Committee with notice of the
calculation of such monthly payments within 3 business days of making such
payments. Moreover, the Master Lease Loan in the amount of $8,187,445 made by
Satellite to SpaceCom in July, 2003 shall continue to have all of the claims,
rights, liens and priorities in respect of such loan set forth in the Interim
Order, all of which are incorporated herein by reference as if expressly set
forth herein.

            (e) For purposes hereof, the "CARVE OUT" means (i) all fees required
to be paid to the Clerk of the Bankruptcy Court and to the Office of the United
States

----------
(3)   This and the other references herein to corporate allocations shall be
      without prejudice to the Agents' and Committee's rights to challenge such
      allocations, funds flows, transfers and payments as not being appropriate
      in amount.

                                       21
<PAGE>

Trustee under section 1930(a) of title 28 of the United States Code and (ii) an
amount not exceeding $4,000,000 in the aggregate, which amount may be used after
the occurrence of the Termination Date, subject to the terms of this Order,
including, without limitation, paragraph 15 hereof, to pay fees or expenses
incurred by the Obligor Debtors and the Official Committee of Unsecured
Creditors (the "COMMITTEE") in respect of (A) allowances of compensation for
services rendered or reimbursement of expenses awarded by the Bankruptcy Court
to the Obligor Debtors' or the Committee's professionals and (B) the
reimbursement of expenses allowed by the Bankruptcy Court incurred by Committee
members in the performance of their duties (but excluding fees and expenses of
third party professionals employed by such members) and of which amount up to
$100,000 in the aggregate may be applied towards the reasonable fees and
disbursements of a chapter 7 trustee in any liquidation of one or more Debtors
pursuant to Chapter 7 of the Bankruptcy Court, pursuant to section 726 of the
Bankruptcy Code; provided, however, that the dollar limitation in this clause
6(e)(ii) on fees and disbursements shall neither be reduced nor increased by the
amount of any compensation or reimbursement of expenses incurred, awarded or
paid to any party prior to the Termination Date or by any fees, expenses,
indemnities or other amounts paid to any Agent, Lender or their respective
attorneys and agents under the Existing Agreements or otherwise; and provided
further that nothing herein shall be construed to impair the ability of any
party to object to any of the fees, expenses, reimbursement or compensation
described in clauses (A) and (B) above.

                                       22
<PAGE>

            (f) The Carve Out shall be allocated among the Collateral and
Pre-Petition Obligations of each of the Obligor Debtors as follows: (i) to the
extent the proceeds of any liquidation or foreclosure of the Collateral granted
by such Obligor Debtor on a first lien basis exceeds the Pre-Petition
Obligations of such Obligor Debtor, the Carve Out shall be allocated to (and
satisfied from) such excess, and (ii) if after giving effect to clause (i) all
or a portion of the Carve Out remains unallocated and unsatisfied, the Carve Out
shall be allocated between the Collateral of and Pre-Petition Obligations owed
to the SpaceCom Lenders and the Collateral of and Pre-Petition Obligations owed
to the Satellite Lenders on a proportional basis calculated on the basis of the
relative percentage recovery ratio for each (for example, if the recovery with
respect to the Pre-Petition Obligations of the SpaceCom Lenders is 80% and the
recovery with respect to the Pre-Petition Obligations of the Satellite Lenders
is 40%, the relative percentage recovery ratio is 2:1 and the Carve Out will be
allocated 2/3 to the Pre-Petition Obligations of the SpaceCom Lenders and 1/3 to
the Pre-Petition Obligations of the Satellite Lenders).

      7. Intercompany Transfers and Cyberstar Loans. No payments to or for
benefit of any other Debtor or any non-Debtor affiliate shall be made by
SpaceCom, SSL, Satellite, Orion, Cyberstar, Brazil or Loral Space &
Communications Corporation other than those payments set forth in the Approved
Forecast. To the extent that any payments permitted under the Approved Forecast
shall be made by SpaceCom (through Skynet) to Cyberstar, such payments shall be
deemed to constitute loans (the "CYBERSTAR LOAN") made by SpaceCom to Cyberstar.
Cyberstar shall repay the full amount of the Cyberstar

                                       23
<PAGE>

Loan to SpaceCom, in cash, on or before the Termination Date. Pursuant to
Section 364(c)(1) of the Bankruptcy Code, Cyberstar's obligations to SpaceCom
with respect to the Cyberstar Loan (the "CYBERSTAR OBLIGATIONS") shall
constitute allowed claims with priority over any and all administrative
expenses, diminution claims and all other claims against Cyberstar, now existing
or hereafter arising, of any kind whatsoever, including, without limitation, all
administrative expenses of the kind specified in sections 503(b) and 507(b) of
the Bankruptcy Code, and over any and all administrative expenses or other
claims arising under sections 105, 326, 328, 330, 331, 503(b), 506(c), 507(a),
507(b), 726, 1113 or 1114 of the Bankruptcy Code (the "CYBERSTAR SUPERPRIORITY
CLAIMS"), which Cyberstar Obligations shall be payable from and have recourse to
all pre- and post-petition property of Cyberstar and all proceeds thereof,
subject only to the payment of the Carve Out. As security for the Cyberstar
Obligations, effective and perfected upon the date of this Order and without the
necessity of the execution or recordation of filings of mortgages, security
agreements, control agreements, pledge agreements, financing statements or other
similar documents, the following security interests and liens are hereby granted
to SpaceCom (all property identified in clauses (a) and (b) below being
collectively referred to as the "CYBERSTAR COLLATERAL"), subject to the
provisions of paragraph 7(d) below and, after the occurrence of a Termination
Event, to the payment of the Carve Out (all such liens and security interests
granted to SpaceCom, pursuant to this Order, the "CYBERSTAR LIENS"):

      (a) First Lien on Cash Balances and Unencumbered Property. Pursuant to
Section 364(c)(2) of the Bankruptcy Code, SpaceCom is hereby granted a valid,

                                       24
<PAGE>

binding, continuing, enforceable, fully-perfected first priority senior security
interest in and lien upon all pre- and post-petition property of Cyberstar
(including without limitation, all cash and cash collateral of Cyberstar
(whether maintained with the Agents, any Lender or otherwise) and any investment
of such cash and cash collateral, inventory, accounts receivable, other rights
to payment whether arising before or after the Petition Date, contracts,
properties, plants, equipment, general intangibles, documents, instruments,
interests in leaseholds, real properties, patents, copyrights, trademarks, trade
names, other intellectual property, capital stock of subsidiaries, and the
proceeds of all the foregoing), whether existing on the Petition Date or
thereafter acquired, that, on or as of the Petition Date is not subject to
valid, perfected and non-avoidable liens (collectively, "UNENCUMBERED
PROPERTY"). Unencumbered Property shall exclude Cyberstar's claims and causes of
action under Sections 502(d), 544, 545, 547, 548, 549 and 550 of the Bankruptcy
Code, and any other avoidance actions under the Bankruptcy Code (collectively,
"CYBERSTAR AVOIDANCE ACTIONS"), but shall include any proceeds or property
recovered as a consequence of, unencumbered by or otherwise the subject of
successful Cyberstar Avoidance Actions.

            (b) Liens Junior to Certain Other Liens. Pursuant to Section
364(c)(3) of the Bankruptcy Code, SpaceCom is hereby granted valid, binding,
continuing, enforceable, fully-perfected security interests in and liens upon
all pre- and post-petition property of Cyberstar (other than the property
described in clause (a) of this paragraph 7, as to which the liens and security
interests in favor of SpaceCom will be as described in such clause), whether now
existing or hereafter acquired, that is subject to valid, perfected

                                       25
<PAGE>

and unavoidable liens in existence immediately prior to the Petition Date or to
valid and unavoidable liens in existence immediately prior to the Petition Date
that are perfected subsequent to the Petition Date as permitted by Section
546(b) of the Bankruptcy Code, which security interests and liens in favor of
SpaceCom are junior to such valid, perfected and unavoidable liens.

            (c) Liens Senior to Certain Other Liens. The Master Lease Loan
Liens, Cyberstar Liens and Adequate Protection Liens (as defined below) shall
not be subject or subordinate to (i) any lien or security interest that is
avoided and preserved for the benefit of the Obligor Debtors and their estates
or Cyberstar, as the case may be, under Section 551 of the Bankruptcy Code, or
(ii) except as provided below in paragraph 7(d), any liens arising after the
Petition Date including, without limitation, any liens or security interests
granted in favor of any federal, state, municipal or other governmental unit,
commission, board or court for any liability of the Obligor Debtors.

            (d) Relative Priority of Pre-Petition Obligations and Liens and
Adequate Protection Obligations and Liens. The Adequate Protection Obligations
of, and Adequate Protection Liens granted by, any Obligor Debtor to the SpaceCom
Lenders (and Agents for the benefit of the SpaceCom Lenders) shall be
immediately junior to any liens securing the Pre-Petition Obligations of the
SpaceCom Lenders, and the Adequate Protection Obligations of, and Adequate
Protection Liens granted by, any Obligor Debtor to the Satellite Lenders (and
Agents for the benefit of the Satellite Lenders) shall be immediately junior to
any liens securing the Pre-Petition Obligations of the Satellite Lenders. In
each case where any Obligor Debtor owes Adequate Protection Obligations

                                       26
<PAGE>

to both the SpaceCom Lenders (and Agents for the benefit of the SpaceCom
Lenders) and the Satellite Lenders (and Agents for the benefit of the Satellite
Lenders), the Adequate Protection Obligations and Adequate Protection Liens of
each group of Lenders will have the same relative priority as they would have if
they were Pre-Petition Obligations owed to such group of Lenders and governed by
the Intercreditor Agreement applicable to such Obligor Debtor. If an
Intercreditor Agreement does not apply to any Obligor Debtor, the Adequate
Protection Obligations of, and Adequate Protection Liens granted by, such
Obligor Debtor to the SpaceCom Lenders shall rank pari passu with the Adequate
Protection Obligations of, and Adequate Protection Liens granted by, such
Obligor Debtor to the Satellite Lenders.

      8. Adequate Protection. Subject to parties' rights under paragraph 14
hereof, the Credit Agreement Parties are entitled, pursuant to Sections 361 and
363(e) of the Bankruptcy Code, to adequate protection of their interest in the
Pre-Petition Collateral, including the Cash Collateral, as to each of the
Satellite Lenders and SpaceCom Lenders, for and equal in amount to the aggregate
diminution in value of such Lender's interests in the Pre-Petition Collateral,
including, without limitation, any such diminution resulting from the sale,
lease or use by the Debtors (or other decline in value) of Cash Collateral and
any other Pre-Petition Collateral, the granting of certain security interests
and liens to Satellite pursuant to the Interim Order and the imposition of the
automatic stay pursuant to Section 362 of the Bankruptcy Code (collectively, the
"ADEQUATE PROTECTION OBLIGATIONS"). As adequate protection, the Credit Agreement
Parties are hereby granted the following:

                                       27
<PAGE>

            (a) Adequate Protection Liens. The Agents (for themselves and for
the benefit of the Lenders) are hereby granted (effective and perfected upon the
date of this Order and without the necessity of the execution by the Obligor
Debtors of mortgages, security agreements, pledge agreements, financing
statements or other agreements) a replacement security interest in and lien upon
all the Collateral(4), subject and subordinate only to (i) Master Lease Loan
Liens (to the extent provided in paragraph 7(e) of the Interim Order), (ii) to
the extent provided in paragraph 7(d) hereof, the Pre-Petition Obligations and
(iii) the Carve Out (the "ADEQUATE PROTECTION LIENS"), provided that solely in
connection with Adequate Protection Obligations arising under the Satellite
Existing Agreements, such Adequate Protection Liens shall not attach to any
property of Loral Delaware that was not, immediately prior to the Petition Date,
pledged under the Satellite Existing Agreements;

            (b) Section 507(b) Claim. The Obligor Debtors shall be jointly and
severally liable for the Adequate Protection Obligations and the Lenders are
hereby granted by each such Obligor Debtor, subject to the Carve Out, a
superpriority claim in the amount of the Adequate Protection Obligations, as
provided for in section 507(b) of the Bankruptcy Code, provided that solely as
to Loral Delaware and solely in connection with Adequate Protection Obligations
arising under the Satellite Existing Agreements, such superpriority claims shall
be satisfied solely from collateral pledged under the Satellite Existing
Agreements immediately prior to the Petition Date.

----------
(4)   As used herein, "COLLATERAL" shall mean all of the types of property of
      all of the Obligor Debtors of the type described in paragraphs 7(a) and
      (b) hereof as well as all property that is subject to existing liens
      presently securing the Pre-Petition Obligations.

                                       28
<PAGE>

            (c) Interest, Fees and Expenses. Subject to the right of parties in
interest, to the extent permitted in paragraph 14, to seek the reallocation,
recharacterization or disgorgement of payments made to the Agents as authorized
in this paragraph and the entry of a final order of this Court ordering any of
the foregoing, the Obligor Debtors shall pay to the Agents (i) current cash
payment of all accrued and unpaid interest on the Pre-Petition Obligations and
all accrued but unpaid letter of credit fees payable in respect thereof, in each
case both for the pre- and post-petition periods and at the non-default rates
provided for in and calculated in accordance with the Existing Agreements
(including LIBOR pricing options), and all other accrued and unpaid fees and
expenses payable to the Agents under the Existing Agreements and incurred prior
to the Petition Date as due under the Existing Agreements and (ii) current cash
payment of all reasonable fees and expenses payable to the Agents under the
Existing Agreements, including, but not limited to, the reasonable fees and
disbursements of counsel, financial and other consultants for the Agents
(including without limitation Davis Polk & Wardwell, Morgan, Lewis & Bockius LLP
and Ernst & Young Corporate Finance LLC); provided that notwithstanding the
provisions of this paragraph 8(c) without prejudice to the rights of any other
party to contest such assertion, the Lenders reserve their rights to assert
claims for the payment of additional interest, letter of credit and other fees
calculated at any other applicable rates (including, without limitation, default
rates), or on any other basis, provided for in the Existing Agreements;

            (d) Monitoring of Collateral. The Lenders shall be permitted to
retain expert consultants and financial advisors in accordance with the Existing
Agreements,

                                       29
<PAGE>

which consultants and advisors shall be given reasonable access for purposes of
monitoring the business of the Debtors and the value of the Collateral;

            (e) Information. The Debtors shall provide the following information
to the Agents, the Steering Committee and the Committee: (i) within four
business days after the end of each week, an updated rolling 13-week forecast of
cash receipts and disbursements for each Debtor for the next succeeding 13
weeks, substantially in the form of the Approved Forecast, with a variance
report comparing such updated forecast with the Approved Forecast; (ii) within
four business days after the end of each week, a certificate signed by the
Company's chief financial officer (the "CFO") (x) certifying that no Termination
Event has occurred (except with respect to a Termination Event described in
clause (viii) of paragraph 6(c) hereof, the "CYBERSTAR TERMINATION EVENT") (or,
if a Termination Event has occurred, specifying the nature and extent thereof
and any corrective action taken or proposed to be taken with respect thereto)
and (y) setting forth computations in reasonable detail to demonstrate whether a
Termination Event described in clause (v), (vi), (vii), (ix), (x), (xi), (xii),
(xiii), (xiv) or (xv) of paragraph 6(c) hereof has occurred, (iii) within nine
business days after the end of each week, a certificate signed by the CFO
certifying that the Cyberstar Termination Event has not occurred (or if the
Cyberstar Termination Event has occurred, specifying the nature and extent
thereof and any corrective action taken or proposed to be taken with respect
thereto), (iv) by not later than August 19, 2003, an updated business plan
through June 2004 and weekly forecast of cash receipts and disbursements for
each Debtor included in the initial Approved Forecast for the period from August
15, 2003 through November 14, 2003 (the

                                       30
<PAGE>

"BUSINESS PLAN"); (v) by not later than November 1, 2003, a weekly forecast of
cash receipts and disbursements for each Debtor included in the initial Approved
Forecast for the period from November 14, 2003 through December 31, 2003 (the
"FINAL WEEKLY FORECAST") and (vi) as and when required by the Existing
Agreements, all information that is required to be provided to the Agents or any
Lenders pursuant to the Existing Agreements; provided that the consolidated
statements of income and cash flows for the month of July, 2003 shall be
delivered by September 15, 2003.

            (f) Payment from Proceeds of Collateral.

                        (i)   On the date of any sale, lease, transfer, license
                              or other disposition of property of any Obligor
                              Debtor that constitutes Collateral outside the
                              ordinary course of business (other than any
                              individual item having a value or resulting in net
                              proceeds of less than $50,000, or up to $250,000
                              in the aggregate for all such individual items
                              disposed of since the Petition Date), the Obligor
                              Debtors are authorized and directed to pay to the
                              Agents, for the benefit of the Agents and Lenders
                              with liens on such Collateral, 100% of the gross
                              proceeds resulting therefrom, net of attorneys'
                              fees, accountants' fees, investment banking fees,
                              and other customary fees and expenses incurred in
                              connection therewith and net of taxes paid or
                              reasonably estimated to be payable as a result
                              thereof (other than income taxes).

                        (ii)  In the event of any casualty, condemnation or
                              similar event with respect to property that
                              constitutes Collateral, the Obligor Debtors are
                              authorized and directed to pay to the Agents, for
                              the benefit of the Agents and Lenders with liens
                              on such Collateral, 100% of any insurance
                              proceeds, condemnation award or similar payment
                              within two business days of receipt thereof.

                        (iii) In the event any Obligor Debtor receives any
                              proceeds pursuant to a successful Avoidance

                                       31
<PAGE>

                              Action(5), the Obligor Debtors are authorized and
                              directed to pay to the Agents, for the benefit of
                              the Agents and Lenders, 100% of such proceeds
                              within two business days of receipt thereof.

                        (iv)  All proceeds and payments delivered to the Agents
                              pursuant to this paragraph 8(f) shall be applied
                              to the payment of any Pre-Petition Obligations,
                              the Master Lease Loan Obligations, and the
                              Adequate Protection Obligations in accordance with
                              the priorities set forth in the Interim Order (as
                              to the Master Lease Loan Obligations), this Order
                              and the Existing Agreements; provided, however,
                              that any proceeds and payments pursuant to
                              paragraph 8(f)(iii) shall only be applied to the
                              payment of any Master Lease Loan Obligations and
                              Adequate Protection Obligations.

            (g) Hedging Agreements. Bank of America, N.A. shall be permitted to
exercise its rights of termination with respect to any foreign currency exchange
agreement with any Obligor Debtor (the "BANK OF AMERICA HEDGE AGREEMENTS") and
its right of setoff pursuant to the Existing Agreements, to setoff any
obligations owed by Bank of America, N.A. to such Obligor Debtor upon such
termination in accordance with the provisions thereof against an equal amount of
Pre-Petition Obligations owed by such Obligor Debtor to Bank of America, N.A.
pursuant to the Existing Agreements and as a result of such setoff the
Pre-Petition Obligations then outstanding would be reduced by such amount on a
dollar for dollar basis, and the automatic stay is hereby modified and vacated
to the extent necessary to permit such setoff. JPMorgan Chase Bank shall be
permitted to exercise its rights of termination with respect to any foreign
currency

---------
(5)   As used herein, "AVOIDANCE ACTIONS" shall mean any claim or cause of
      action under sections 502(d), 544, 545, 547, 548, 549 or 550 of the
      Bankruptcy Code, and any other avoidance actions under the Bankruptcy
      Code.

                                       32
<PAGE>

exchange agreement with any Obligor Debtor (the "JPMORGAN CHASE HEDGE
AGREEMENTS") and its right of setoff pursuant to the Existing Agreements, to
setoff any obligations owed by JPMorgan Chase to such Obligor Debtor upon such
termination in accordance with the provisions thereof against an equal amount of
Pre-Petition Obligations owed by such Obligor Debtor to JPMorgan Chase pursuant
to the Existing Agreements and as a result of such setoff the Pre-Petition
Obligations then outstanding would be reduced by such amount on a dollar for
dollar basis, and the automatic stay is hereby modified and vacated to permit
such setoff.

            (h) Pre-Petition Letters of Credit. In consideration of the benefits
afforded to them pursuant to this Order, with respect to any Pre-Petition
Letters of Credit, notwithstanding any provision to the contrary in the SpaceCom
Credit Agreement:

                        (i)   the Issuing Bank under the SpaceCom Credit
                              Agreement (the "ISSUING BANK") is hereby
                              authorized (but not required) and permitted to
                              extend, renew, amend or replace any Pre-Petition
                              Letter of Credit (each of which is listed on Annex
                              A hereto) with a new letter of credit issued to
                              the same beneficiary, with an expiration date no
                              later than the earlier of one year after the
                              expiration date of such Pre-Petition Letter of
                              Credit and December 31, 2004 and in an amount no
                              greater than the applicable Pre-Petition Letter of
                              Credit as set forth on Annex A (such extended,
                              renewed, amended or replacement Pre-Petition
                              Letter of Credit, a "NEW LETTER OF CREDIT") and
                              such New Letter of Credit shall be deemed to
                              constitute a Letter of Credit issued under the
                              SpaceCom Credit Agreement, with each Revolving
                              Credit Bank under the SpaceCom Credit Agreement (a
                              "PRE-PETITION REVOLVING LENDER") holding the same
                              participation in such New Letter of Credit as it
                              had held in the applicable Pre-Petition Letter of
                              Credit;

                        (ii)  each Pre-Petition Revolving Lender shall be
                              obligated to reimburse the Issuing Bank for any
                              payment made on any New Letter of Credit and any
                              other amounts due in respect

                                       33
<PAGE>

                              thereof under the SpaceCom Credit Agreement on the
                              same terms as contained in the SpaceCom Credit
                              Agreement for the Pre-Petition Letters of Credit;

                        (iii) any claims (as defined in the Bankruptcy Code)
                              that the Issuing Bank or any Pre-Petition
                              Revolving Lender may have against any Obligor
                              Debtor in respect of any New Letter of Credit
                              (including for the reimbursement of any payment
                              made on such New Letter of Credit) shall
                              constitute Pre-Petition Obligations, entitled to
                              treatment as pre-petition claims, pari passu with
                              the loans outstanding under the SpaceCom Credit
                              Agreement, and as such shall be entitled to the
                              adequate protection as provided herein.

      9. Protection of Lenders' Rights. The automatic stay provisions of Section
362 of the Bankruptcy Code are vacated and modified to permit the Credit
Agreement Parties to exercise, upon the occurrence of the Termination Date
(unless waived as required herein), and the giving of five business days prior
written notice to the Debtors and counsel for the Committee, all rights and
remedies against the Collateral provided for in the Existing Agreements
(including, without limitation, the right to setoff monies of the Obligor
Debtors in accounts maintained with the Agents or any Lender). In no event shall
the Agents or the Lenders be subject to the equitable doctrine of "marshaling"
or any similar doctrine with respect to the Collateral.

      10. Limitation on Charging Expenses Against Collateral. Except to the
extent of the Carve Out and as to expenses contained in the Approved Forecast
actually paid prior to the Termination Date (including, but not limited to, fees
and expenses of professionals retained by the Debtors and the Committee), no
expenses of administration of the Cases or any future proceeding that may result
therefrom, including liquidation in bankruptcy or other proceedings under the
Bankruptcy Code, shall be charged against or recovered from the Collateral
pursuant to Section 506(c) of the Bankruptcy Code or any

                                       34
<PAGE>

similar principle of law, without the prior written consent of the Agents, as
applicable, and no such consent shall be implied from any other action,
inaction, or acquiescence by the Agents or any Lender.

      11. Reservation of Rights of Lenders. Under the circumstances and given
that the above described adequate protection is consistent with the Bankruptcy
Code, including Section 506(b) thereof, the Court finds that the adequate
protection provided herein is reasonable and sufficient to protect the interests
of the Credit Agreement Parties. However, upon proper notice, the Credit
Agreement Parties may request further or different adequate protection, and the
Debtors or any other party may contest any such request. Moreover, nothing
contained in this Order (including, without limitation, the authorization of the
use of any Cash Collateral) shall impair or modify the right of the Agents or
any Lender (i) to propose, subject to the provisions of Section 1121 of the
Bankruptcy Code, a chapter 11 plan or plans of reorganization, (ii) to object,
contest or appeal entry of any order or seek to modify any order, including
without limitation, any order authorizing "critical vendor payments" or
retention and/or severance payments to employees of any Debtor but excluding any
First Day Orders or (iii) that is a party to a swap agreement, securities
contract, commodity contract, forward contract or repurchase agreement with a
Debtor to assert rights of setoff or other rights with respect thereto as
permitted by law (or the right of the Debtors to contest such assertions).

      12. Perfection of Liens.

            (a) SpaceCom and the Credit Agreement Parties are hereby authorized,
but not required, to file or record financing statements, trademark filings,
copyright

                                       35
<PAGE>

filings, mortgages, notices of lien or similar instruments in any jurisdiction
or take any other action in order to validate and perfect the liens and security
interests granted to them hereunder. Whether or not SpaceCom or any Agent on
behalf of the Lenders shall, in its sole discretion, choose to file such
financing statements, trademark filings, copyright filings, mortgages, notices
of lien or similar instruments or otherwise confirm perfection of the liens and
security interests granted to them hereunder, such liens and security interests
shall be deemed valid, perfected, allowed, enforceable, non-avoidable and not
subject to challenge dispute or subordination, at the time and on the date of
entry of the Interim Order. Each Agent, without any further consent or other
action of any Obligor Debtor or other party, is authorized to take, execute and
deliver such instruments (in each case without representation or warranty of any
kind) to enable the Agents to further validate, perfect, preserve and enforce
the Adequate Protection Liens.

            (b) A certified copy of this Order may, in the discretion of any
Agent, be filed with or recorded in filing or recording offices in addition to
or in lieu of such financing statements, mortgages, notices of lien or similar
instruments, and all filing offices are hereby authorized to accept such
certified copy of this Order for filing and recording.

            (c) In furtherance of the foregoing and without further approval of
this Court, each Obligor Debtor is authorized and directed to do and perform all
acts, to make, execute and deliver all instruments and documents (including,
without limitation, the execution or recordation of security agreements,
mortgages and financing statements),

                                       36
<PAGE>

and to pay all fees, that may be reasonably required or necessary for the
Obligor Debtors' performance hereunder.

            (d) No obligation, payment, transfer or grant of security under this
Order shall be stayed, restrained, voidable, or recoverable under the Bankruptcy
Code or under any applicable law (including without limitation, under Section
502(d) of the Bankruptcy Code), or subject to any defense, reduction, setoff or
counterclaim.

      13. Preservation of Rights Granted Under the Order.

            (a) Except as expressly provided herein, (i) no claim or lien having
a priority superior to or pari passu with those granted by the Interim Order or
this Order to Satellite, SpaceCom, the Agents or the Lenders, respectively,
shall be granted or allowed while any Adequate Protection Obligations, Master
Lease Loans or Cyberstar Obligations remain outstanding, and (ii) the Master
Lease Loan Liens, the Cyberstar Liens and Adequate Protection Liens shall not be
subordinated to or made pari passu with any other lien or security interest,
whether under Section 364(d) of the Bankruptcy Code or otherwise.

            (b) If an order dismissing any of the Cases of the Obligor Debtors
under Section 1112 of the Bankruptcy Code or otherwise is at any time entered,
such order shall provide (in accordance with Sections 105 and 349 of the
Bankruptcy Code) that (i) the Master Lease Loan Obligations, Cyberstar
Obligations, Adequate Protection Obligations, Master Lease Loan Liens, Cyberstar
Liens and Adequate Protection Liens granted to Satellite, SpaceCom, the Agents
and the Lenders pursuant to this Order shall continue in full force and effect
and shall maintain their priorities as provided in this Order until all

                                       37
<PAGE>

Adequate Protection Obligations, Master Lease Loan Obligations and Cyberstar
Obligations shall have been indefeasibly paid in full (and that all such claims,
liens and security interests shall, notwithstanding such dismissal, remain
binding on all parties in interest) and (ii) this Court shall retain
jurisdiction, notwithstanding such dismissal, for the purposes of enforcing the
claims, liens and security interests referred to in (i) above.

            (c) If any or all of the provisions of this Order are hereafter
reversed, modified, vacated or stayed, such reversal, stay, modification or
vacation shall not affect (i) the validity of any Master Lease Loan Obligations,
Cyberstar Obligations or Adequate Protection Obligations incurred prior to the
actual receipt of written notice by the Agents of such reversal, stay,
modification or vacation or (ii) the validity or enforceability of any lien or
priority authorized or created hereby. Notwithstanding any such reversal, stay,
modification or vacation, any use of Cash Collateral and all Master Lease Loan
Obligations, Cyberstar Obligations and Adequate Protection Obligations incurred
prior to the actual receipt of written notice by the Agents of such reversal,
stay, modification or vacation shall be governed in all respects by the original
provisions of this Order.

            (d) Except as expressly provided in this Order, the Master Lease
Loan Obligations, Cyberstar Obligations, Master Lease Loan Liens, Cyberstar
Liens, the Adequate Protection Obligations and Adequate Protection Liens, the
Cyberstar Superpriority Claims and all other rights and remedies of Satellite,
SpaceCom and the Credit Agreement Parties granted by the provisions of this
Order shall survive, and shall not be modified, impaired or discharged by (i)
the entry of an order converting any of the Cases to a case under chapter 7,
dismissing any of the Cases, terminating the joint

                                       38
<PAGE>

administration of these Cases or by any other act or omission, or (ii) the entry
of an order confirming a plan of reorganization in any of the Cases and,
pursuant to Section 1141(d)(4) of the Bankruptcy Code, the Obligor Debtors have
waived any discharge as to any remaining Master Lease Loan Obligations,
Cyberstar Obligations or Adequate Protection Obligations and such waiver is
hereby approved. The terms and provisions of this Order shall continue in these
Cases, in any successor cases if these Cases cease to be jointly administered,
or in any superceding chapter 7 cases under the Bankruptcy Code, and the Master
Lease Loan Liens, Cyberstar Liens, Adequate Protection Liens, the Cyberstar
Superpriority Claims and all other rights and remedies of the Credit Agreement
Parties and SpaceCom granted by the provisions of this Order shall continue in
full force and effect until the Master Lease Loan Obligations, Cyberstar
Obligations and Adequate Protection Obligations are indefeasibly paid in full.

      14. Effect of Stipulations on Third Parties. The stipulations and
admissions contained in this Order, including, without limitation, in paragraph
3 of this Order, shall be binding upon the Debtors in all circumstances and
shall be binding upon all other parties in interest, including, without
limitation, any Committee, unless (a) a party in interest has timely filed an
adversary proceeding or contested matter (subject to the limitations contained
herein, including, inter alia, in paragraph 15) by no later than September 23,
2003, provided that said deadline shall be October 31, 2003 in the case of the
Committee (or such later date as has been agreed to, in writing, by the Agents
in their sole discretion), (i) challenging the validity, enforceability,
priority or extent of the Pre-Petition Obligations or the Agents' or the
Lenders' liens on the Pre-Petition Collateral or

                                       39
<PAGE>

(ii) otherwise asserting or prosecuting any action for preferences, fraudulent
conveyances, other avoidance power claims or any other any claims, counterclaims
or causes of action , objections, contests or defenses (collectively, "CLAIMS
AND DEFENSES") against the Agents or any of the Lenders or their affiliates,
representatives, attorneys or advisors in connection with matters related to the
Existing Agreements, the Pre-Petition Obligations, the Pre-Petition Collateral,
and (b) there is a final order in favor of the plaintiff sustaining any such
challenge or claim in any such timely filed adversary proceeding or contested
matter; provided that as to the Debtors (but not as to any party that
specifically preserves any rights it may have as provided for in this
paragraph), all such Claims and Defenses are hereby irrevocably waived and
relinquished as of the Petition Date. If no such adversary proceeding or
contested matter is timely filed, (x) the Pre-Petition Obligations shall
constitute allowed claims, not subject to counterclaim, setoff, subordination,
recharacterization, defense or avoidance, for all purposes in the Cases and any
subsequent chapter 7 cases, (y) the Agents' and the Lenders' liens on the
Pre-Petition Collateral shall be deemed to have been, as of the Petition Date,
legal, valid, binding and perfected, not subject to recharacterization,
subordination or avoidance and (z) the Pre-Petition Obligations, the Agents' and
the Lenders' liens on the Pre-Petition Collateral and the Credit Agreement
Parties shall not be subject to any other or further challenge by any party in
interest seeking to exercise the rights of the Debtors' estates, including,
without limitation, any successor thereto (including, without limitation, any
chapter 7 or 11 trustee appointed or elected for any of the Debtors). If any
such adversary proceeding or contested matter is timely filed, the stipulations
and admissions

                                       40
<PAGE>

      contained in paragraph 3 of this Order shall nonetheless remain binding
and preclusive (as provided in the second sentence of this paragraph) on any
official committee (including the Creditors' Committee) and on any other person
or entity, except to the extent that such findings and admissions were expressly
challenged in such adversary proceeding or contested matter.

      15. Limitation on Use of Collateral. Notwithstanding anything herein or in
any other order of this Court to the contrary, no Master Lease Loans, Cyberstar
Loans, Cash Collateral, Collateral or the Carve Out may be used to (a) object,
contest or raise any defense to, the validity, perfection, priority, extent or
enforceability of any amount due under the Existing Agreements, or the liens or
claims granted under this Order or the Existing Agreements; provided, however,
that such limitation shall not apply to the costs of investigation of whether
any such objection, contest or defense may be brought or asserted, (b) assert or
prosecute any Claims or Defenses or causes of action against the Agents or the
Lenders or their respective agents, affiliates, officers, directors, employees,
representatives, attorneys or advisors, (c) prevent, hinder or otherwise delay
the Agents' assertion, enforcement or realization on the Cash Collateral or the
Collateral in accordance with the Existing Agreements or this Order, (d) seek to
modify any of the rights granted to the Agents or the Lenders hereunder or under
the Existing Agreements, in each of the foregoing cases without such parties'
prior written consent or (e) pay any amount on account of any claims arising
prior to the Petition Date unless such payments are (i) approved by an Order of
this Court and (ii) in accordance with the Approved Forecast.

                                       41
<PAGE>

      16. Limits on Lenders' Liability. Nothing in this Order or any other
documents related to this transaction shall in any way be construed or
interpreted to impose or allow the imposition upon the Agents or the Lenders any
liability for any claims arising from the pre-petition or post-petition
activities by the Debtors or any of their affiliates in the operation of their
businesses, or in connection with their restructuring efforts.

      17. Binding Effect; Successors and Assigns. Except as to parties' rights
under paragraph 14 hereof, the provisions of this Order, including all findings
herein, shall be binding upon all parties in interest in these Cases, including,
without limitation, the Agents, the Lenders, the Committee and the Debtors and
their respective successors and assigns (including any chapter 7 or chapter 11
trustee hereinafter appointed or elected for the estate of any of the Debtors)
and shall inure to the benefit of the Agents, the Lenders and the Debtors and
their respective successors and assigns, provided that the Credit Agreement
Parties shall have no obligation to permit the use of Cash Collateral by any
chapter 7 trustee or similar responsible person appointed for the estates of the
Debtors. In exercising any rights or remedies as and when permitted pursuant to
this Order or the Existing Agreements, the Credit Agreement Parties shall not be
deemed to be in control of the operations of the Debtors or to be acting as a
"responsible person" or "owner or operator" with respect to the operation or
management of the Debtors (as such terms, or any similar terms, are used in the
United States Comprehensive Environmental Response, Compensation and Liability
Act, 29 U.S.C. Sections 9601 et seq. as amended, or any similar federal or state
statute).

                                       42
<PAGE>

Dated:   August 22, 2003

                                                  /s/ Robert D. Drain
                                                  ------------------------------
                                                  UNITED STATES BANKRUPTCY JUDGE

                                       43
<PAGE>

                                                                         Annex A

                         Pre-Petition Letters of Credit

<TABLE>
<CAPTION>
                          LC NUMBER                     AMOUNT
                          ---------                     ------
<S>                                                <C>
                           3029341                 $    45,000.00
                           3034724                     693,000.00
                           3035160                   6,521,191.80
                           3037887                     500,000.00
                           3039462                   1,239,000.00
                           3048556                     407,000.00
                           3049998                   1,486,000.00
                           3052093                   1,100,000.00
                           7310438                     334,800.00
                           7310427                     330,966.00
                                                   --------------

                   Total.................          $12,656,957.80
</TABLE>

                                       44<PAGE>
                                                                   EXHIBIT 10.39

                                                            CONFORMED AS AMENDED

                              SATELLITE AGREEEMENT

                                     between

                          APT SATELLITE COMPANY LIMITED

                                       and

                                LORAL ORION, INC.

      Form of Amended & Restated as of August 26, 2003, as Amended Pursuant
              to the Settlement Agreement dated November 16, 2003

                                   PROPRIETARY
<PAGE>
                                    AGREEMENT

                                      INDEX

<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                  <C>
ARTICLE 1.  INTERPRETATION........................................................     1

ARTICLE 2.  PARTIES' INTERESTS IN THE SATELLITE...................................     2

ARTICLE 3.  PAYMENT PLAN AND INSURANCE............................................     7

ARTICLE 4.  OPERATION OF TRANSPONDERS.............................................     8

ARTICLE 5.  THE SATELLITE AND RELATED CONTRACTS...................................     9

ARTICLE 6.  REPRESENTATIONS AND WARRANTIES
            OF THE PARTIES........................................................    10

ARTICLE 7.  LEASE OF ADDITIONAL TRANSPONDERS......................................    11

ARTICLE 8.  [RESERVED]............................................................    12

ARTICLE 9.  ORBITAL SLOT..........................................................    12

ARTICLE 10. LANDING RIGHTS........................................................    14

ARTICLE 11. SUCCESSOR SATELLITE RENEWAL...........................................    14

ARTICLE 12. EFFECTIVE DATE OFTHIS AGREEMENT.......................................    16

ARTICLE 13. PLEDGES...............................................................    16

ARTICLE 14. TRANSFER..............................................................    16

ARTICLE 15. RELATIONSHIP OF PARTIES...............................................    17

ARTICLE 16. TAXES.................................................................    17

ARTICLE 17. ENTIRE AGREEMENT, TRANSACTION.........................................    17
            DOCUMENTS

ARTICLE 18. TERMINATION AND CERTAIN BANKRUPTCY EVENTS.............................    18

ARTICLE 19. FORCE MAJEURE.........................................................    18
</TABLE>

                                   PROPRIETARY
<PAGE>
<TABLE>
<CAPTION>
<S>                                                                                   <C>
ARTICLE 20. DEFAULT...............................................................    19

ARTICLE 21. CONFIDENTIALITY.......................................................    20

ARTICLE 22. ASSIGNMENT............................................................    20

ARTICLE 23. GOVERNING LAW.........................................................    21

ARTICLE 24. DISPUTE RESOLUTION....................................................    21

ARTICLE 25. NOTICES...............................................................    22

ARTICLE 26. MISCELLANEOUS.........................................................    23
</TABLE>

Schedule 1  Definitions
Annex A     Description of Loral Transponders
Annex B     Take Up Schedule for the Remaining Loral Transponders
Annex C     The Parties' Respective Interests in the 54 Transponders on the
            Satellite
Annex D     [Reserved]
Annex E     Transponder Performance Validation
Annex F     Material Restrictions or Agreements that Impact the Loral
            Transponders
Annex G     Ku-band Beam #2 Modification

                                   PROPRIETARY
<PAGE>
              FORM OF SATELLITE AGREEMENT, AS AMENDED AND CONFORMED

This Amended and Restated Agreement is dated as of the 26th day of August, 2003,
as conformed to reflect the amendments entered into on November 16, 2003 as
described below, by and between

      APT SATELLITE COMPANY LIMITED, a company organized and existing under the
      laws of Hong Kong with its registered office at Rooms 3111-3112, One
      Pacific Place, 88 Queensway, Hong Kong ("APT")

      and

      LORAL ORION, INC., a corporation organized and existing under the laws of
      the state of Delaware, U.S.A., with its principal place of business at 500
      Hills Drive, Bedminster, NJ 07921, U.S.A. ("Loral Orion")

WHEREAS APT and Space Systems/Loral, Inc. ("SS/L") have entered into a satellite
procurement contract dated as of January 8, 2001, for the construction, testing
and purchase of the Satellite; and

WHEREAS on December 10, 2002, APT and Loral Orion entered into an agreement to
provide among other things, for the joint acquisition of the Satellite (formerly
known as the Condosat Agreement, now referred to herein as the "Satellite
Agreement"); and

WHEREAS, SS/L and Loral Orion entered into an agreement dated June 30, 2003,
pursuant to which Loral Orion agreed to make certain payments to SS/L relating
to the construction and launch of the Satellite; and

WHEREAS, on August 26, 2003, APT and SS/L entered into an amendment to the SS/L
Contract to provide that SS/L will transfer title to the Satellite to Loral
Orion upon Intentional Ignition of the Launch Vehicle providing Launch Services
for the Satellite as set forth therein; and

WHEREAS, on August 26, 2003, APT and Loral entered into a satellite transponder
agreement (the "APT Lease Agreement") pursuant to which Loral Orion will, in
consideration of the payments made and to be made by APT with respect to the
Satellite, lease to APT certain transponder capacity on the Satellite until the
End of Life of such Satellite in accordance with the terms set forth therein;
and

WHEREAS, on November 16, 2003, APT, Loral Orion and SS/L entered into a
settlement agreement (the "Settlement Agreement"), which agreement provided for
the amendment of this Agreement and the assumption of this Agreement pursuant to
Section 365 of the U.S. Bankruptcy Code; and

                                   PROPRIETARY
<PAGE>
WHEREAS, the Amended and Restated Satellite Agreement dated as of August 26,
2003, as further amended to conform to the Settlement Agreement, is as set forth
below:

NOW, THEREFORE, in consideration of the premises and of the mutual
representations, warranties, covenants and agreements hereinafter contained, the
parties hereto agree as follows:

                                    ARTICLE 1
                                 INTERPRETATION

1.1   Words and expressions used in this Agreement shall have the meanings set
      out in Schedule 1, unless the context requires otherwise.

1.2   The Schedules and Annexes to this Agreement shall form part of this
      Agreement.

1.3   References to a Party giving consent or approval shall be deemed to be in
      such Party's sole judgment and discretion, except as specifically set
      forth herein.

                                    ARTICLE 2
                       PARTIES' INTERESTS IN THE SATELLITE

2.1   APT's Interest in the Satellite

      Pursuant to the terms of the APT Lease Agreement, and subject to the
      conditions set forth therein, APT will have a leasehold interest in all
      transponders on the Satellite that are not identified herein as the
      Initial Loral Transponders (the "APT Leasehold Interest"). Subject to the
      terms set forth therein, the term of the APT Lease Agreement shall
      commence at the time that SS/L transfers title of the Satellite to Loral
      Orion and continue thereafter until the End of Life of the Satellite or,
      with respect to each Remaining Loral Transponder, until such time when
      Loral Orion terminates the APT Leasehold Interest in such Remaining Loral
      Transponder as set forth in Paragraph 2.4.2 of this Agreement. In
      addition, APT is the licensee of the rights to the Orbital Slot and has
      agreed to make the Orbital Slot available to Loral Orion for use in
      connection with the operation of the Satellite for no additional
      consideration as set forth in the Orbital Sub-License Agreement.

2.2   Loral Orion's Interest in the Satellite

      Pursuant to the terms of the SS/L Contract and the Related Orion
      Agreement, Loral Orion will assume APT's rights to receive title to the
      Satellite upon Intentional Ignition of the Launch Vehicle providing Launch
      Services for the Satellite on the condition that Loral Orion will,
      simultaneously with its receipt from SS/L of title to the Satellite, grant
      the APT Leasehold Interest to APT. However, upon payment of the
      termination payments required to be made by Loral Orion to APT as
      described in Article 3 below, the APT Leasehold Interest in certain
      transponders on the Satellite will be terminated so that upon completion
      of all termination payments to be made as set forth in Article 3 below,
      Loral Orion's right, title

                                  PROPRIETARY
<PAGE>
      and interest in the Satellite shall be as follows:

      (i) title to twenty-five (25) of the transponders on the Satellite (free
      of any APT Leasehold Interest), as follows:

            -     12 standard frequency C-band transponders;

            -     6 extended frequency C-band transponders; and

            -     7 Ku-band transponders on Beam #2,

      in each case as identified and described on Annex A hereto (collectively
      and including any replacement capacity allocated to Loral Orion, the
      "Loral Transponders"); and

      (ii) title to the remaining transponders on the Satellite (subject to the
      APT Leasehold Interest).

      Title in the Common Elements shall be vested in Loral Orion.

2.3   Identification and Assignment of Loral Transponders

      2.3.1 Assuming all transponders on the Satellite are performing according
            to specifications, APT shall be entitled, on or before March 31,
            2004, to make minor adjustments to the designation of the six (6)
            transponders identified as the "Assigned Transponders" in Annex A
            hereto, subject to obtaining Loral Orion's consent thereto, which
            consent shall not be unreasonably withheld.

      2.3.2 APT represents and warrants that the six (6) transponders on APSTAR
            I corresponding to the Assigned Transponders shall have historically
            not experienced any unacceptable level of interference from adjacent
            or nearby satellites and can be fully saturated.

      2.3.3 Reserved.

      2.3.4 APT and Loral Orion agree that they will not enter into any
            coordination or other agreement relating to the Russian Filing or
            the satellite that is the subject of the Russian Filing (the
            "Russian Satellite") that would result in the other Party bearing a
            disproportionate amount (i.e., more than 54% in the case of APT and
            more than 46% in the case of Loral Orion) of the potential or actual
            risk of coordination with the Russian Filing or the Russian
            Satellite.

      2.3.5 APT will use its reasonable best efforts, subject to the principles
            set forth in this Paragraph 2.3 and the requirements in any
            coordination agreements affecting the Orbital Slot presently
            existing or permitted under Paragraph 9.1 of this Agreement, so that
            all Loral Transponders will not suffer unacceptable levels, as
            reasonably determined by Loral Orion (after consultation with APT),
            of

                                  PROPRIETARY
<PAGE>
            interference from adjacent satellites.

      2.3.6 APT will support Loral Orion's selection and loading of the Loral
            Transponders by providing technical information concerning
            transponder performance, interference considerations and operation.

      2.3.7 APT represents that the interference it has experienced on APSTAR I,
            on a historical basis, is as set forth in Annex F hereto.

2.4   Loral Orion's Interest in the Loral Transponders

      2.4.1 The Initial Loral Transponders (which shall not be subject to the
            APT Leasehold Interest) shall consist of the following: -

                  -     8 standard C-band transponders;

                  -     5 extended C-band transponders; and

                  -     4 Ku-band transponders;

            in each case as identified and described in Annex A hereto.

      2.4.2 As to the Remaining Loral Transponders, which are subject to the APT
            Leasehold Interest, APT agrees that, subject to the provisions of
            Paragraph 2.4.4 below and the relevant payment by Loral Orion
            pursuant to Paragraph 3.1 below, the entire APT Leasehold Interest
            in the Remaining Loral Transponders shall be terminated as follows:

                  -     as to 4 transponders on each of the fourth and fifth
                        anniversaries of the Satellite's in-service date (each
                        such date, including any accelerated take up date as
                        described in Paragraph 2.4.3 below, a "Termination
                        Date").

            The termination of the relevant APT Leasehold Interest shall become
            automatically and immediately effective with respect to any
            Remaining Loral Transponder on the date that Loral Orion makes the
            termination payment with respect to such transponder as provided in
            Paragraph 3.1 below by wire transfer of funds into the following
            bank account (the "Designated Account"):

                         Company name: APT Satellite Company Limited
                         Bank:  Bank of China (Hong Kong) Limited
                         Bank Branch:  Bank of China Tower Branch
                         Bank Address:  1 Garden Road, Hong Kong
                         Account No.: 012-875-9-223700-5
                         Swift Code:  BKCHUS33

            Upon such termination, Loral Orion shall have no further obligation
            or liability in respect of such Remaining Loral Transponder under
            the APT Lease Agreement, and APT shall have no further right or
            interest, whatsoever, in

                                  PROPRIETARY
<PAGE>
            respect of such Remaining Loral Transponder. APT shall cooperate
            with and assist Loral Orion from time to time as required to
            evidence any such termination and Loral Orion's interest in the
            Loral Transponders for which the APT Leasehold Interest has been
            terminated as set forth in this Agreement, including without
            limitation, executing an acknowledgement of termination or such
            other documents as Loral Orion may reasonably request to evidence
            its interest in the applicable transponders.

            Subject to Loral Orion's acceleration rights to earlier termination
            as set forth in Paragraph 2.4.3 below, the termination schedule for
            the Remaining Loral Transponders is set forth in Annex B hereof.

      2.4.3 Loral Orion shall have the right at its option to accelerate the
            date on which it terminates the APT Leasehold Interest as provided
            in Paragraph 2.4.2 of this Agreement in one (1) of the standard
            frequency C-band Remaining Loral Transponders and any or all of the
            extended frequency C-band and Ku-band Remaining Loral Transponders;
            provided however that Loral Orion may not, without APT's prior
            written consent, exercise such acceleration right with respect to
            any Remaining Loral Transponder that is then subject to a sub-lease
            agreement with a customer or otherwise subject to the contractual
            rights of a customer, including any contractually provided renewal
            term, if the expiration date of such sub-lease agreement or other
            contractual rights shall be later than Loral Orion's proposed
            accelerated termination date.

      2.4.4 With respect to Loral Orion's obligation to make termination
            payments to APT as set forth in Paragraph 3.1 below with respect to
            the Remaining Loral Transponders, APT shall bear the risk of loss
            with respect to any such transponder until the termination payment
            is made by Loral Orion in respect of such transponder in accordance
            with Paragraph 3.1. Accordingly, Loral Orion shall have no
            obligation to make the termination payment in respect of any
            Remaining Loral Transponder if such transponder (i) fails to meet
            the requirements set forth on Annex E hereto on the relevant
            Termination Date, or (ii) for which APT has submitted an insurance
            claim.

            Loral Orion shall be obligated to terminate and pay the related
            termination payment for a Remaining Loral Transponder in accordance
            with Paragraph 3.1 of this Agreement, even if APT shall have
            previously received a warranty payback or transponder
            performance-based reduction in the amount of the final milestone
            payment by APT under the SS/L Contract in respect thereof, if (i)
            neither of the requirements set forth in the preceding sentence has
            been met and (ii) the termination payment to be made by Loral Orion
            to APT to terminate the APT Leasehold Interest in such transponder
            shall be reduced by an amount equal to the amount of such warranty
            payback and/or the amount of such final milestone payment reduction,
            as applicable, that relates to such transponder.

                                  PROPRIETARY
<PAGE>
2.5   Reserved

2.6   Respective Interests in the Satellite

      A table of APT's and Loral Orion's respective interests in the Satellite's
      transponders after each scheduled Termination Date is set forth in Annex
      C.

2.7   Economic Interest Prior to Title Transfer.

      2.7.1 Notwithstanding that the SS/L Contract calls for performance from
            SS/L to APT only, APT acknowledges and agrees that, prior to the
            time that title to the Satellite is transferred by SS/L to Loral
            Orion pursuant to the SS/L Contract, Loral Orion has a vested
            economic interest in the SS/L Contract, including but not limited to
            work-in-progress thereunder, to the extent of the following:

            (i)   the reduction in APT's purchase price for the Satellite and
                  other deliverable items under the SS/L Contract, effected by
                  Amendment No. 3 to the SS/L Contract and the Settlement
                  Agreement dated November 16, 2003 between APT, SS/L and Loral
                  Orion;

            (ii)  payments made by Loral Orion to SS/L for the redesign of
                  Ku-band Beam #2 pursuant to Paragraph 5.2 of this Agreement;
                  and

            (iii) payments made or launch deposits (or other similar
                  prepayments) applied by Loral Orion toward launch services for
                  the Satellite.

      2.7.2 APT represents and warrants to Loral Orion that any pledge or
            assignment of its interest under the SS/L Contract to its lenders
            shall not extend to Loral Orion rights and interests set forth in
            Paragraph 2.7.1 above.

2.8   Management Agreement. The Parties acknowledge and agree that
      notwithstanding their respective economic interests in the Satellite,
      certain decisions regarding the Satellite shall be made in accordance with
      the terms and conditions of the Management Agreement and that they shall
      exercise their rights with respect to their interests in the Satellite in
      accordance with such Agreement.

                                    ARTICLE 3
                                  PAYMENT PLAN

3.1   Subject to the provisions of Paragraphs 2.4.3, 2.4.4 and 3.2, Loral Orion
      shall pay APT as follows to terminate the APT Leasehold Interest in the
      Remaining Loral Transponders as provided in Paragraph 2.4.2 of this
      Agreement:

                                  PROPRIETARY
<PAGE>
      (a) On the fourth anniversary of the Satellite's in-service date,
      US$18,132,400 to terminate the APT Leasehold Interest in the 4 additional
      transponders specified on Annex B hereto.

      (b) On the fifth anniversary of the Satellite's in-service date,
      US$18,132,400 to terminate the APT Leasehold Interest in the 4 additional
      transponders specified on Annex B hereto.

      All payments to be made to APT hereunder shall be made by wire transfer of
      immediately available funds in U.S. dollar currency to the Designated
      Account.

3.2   The total price set forth in Paragraph 3.1 above to terminate the APT
      Leasehold Interest in the Remaining Loral Transponders as provided in
      Paragraph 2.4.2 of this Agreement shall at all times equal 16% of the cost
      of constructing (exclusive of the modification costs described in
      Paragraph 5.2 below (the "Modification Costs") but including the costs for
      the ground system under the Ground Equipment Contract and launching the
      Satellite (collectively the "Satellite and Launch Costs") and 32% of the
      cost of insuring the Satellite under the two insurance policies brokered
      by Willis Inspace as described in Paragraph 3.4 below but excluding any
      costs related to the Additional Insurance Amount (the "Loral Insurance
      Cost"). The Satellite and Launch Costs shall consist of any payment,
      liability or other amount paid or incurred by APT or Loral Orion under the
      SS/L Contract, the Ground Equipment Contract, the Related Orion Agreement
      or the LSA, excluding the Modification Costs or any payment, liability or
      other amount paid or incurred by APT or Loral Orion as a result of such
      Party's willful misconduct, gross negligence or material breach of the
      relevant agreements (other than any such breach resulting from joint
      action or decision of APT and Loral Orion). If subsequent to the date of
      this Agreement, there shall be any increase or decrease in the Satellite
      and Launch Costs or the Loral Insurance Cost (including as a result of the
      operation of the first paragraph of Article 13.5 of the SS/L Contract and
      the analogous provision in the Related Orion Agreement) such that the sum
      (the "Allocable Share of Project Cost") of (i) 16% of the Satellite and
      Launch Costs and (ii) 32% of the Loral Insurance Cost shall be other than
      US$36,264,800, then the total price to terminate the APT Leasehold
      Interest in the Remaining Loral Transponders shall be adjusted
      accordingly, after taking into account which Party shall have borne the
      additional cost or received the benefit of any decrease in price.

3.3   Reserved.

3.4   The Launch Insurance (as defined) for the Satellite will be divided into
      three policies, among which two policies will have an aggregate insured
      value of approximately US$115 million to be brokered by Willis Inspace and
      a third policy, which will also have an insured value of approximately
      US$115 million to be brokered by Marsh McLennan. Loral Orion shall be
      responsible for 68% (approximately US$14,584,300) of the gross insurance
      premiums related to the two policies for Launch Insurance brokered by
      Willis Inspace, with APT being responsible for the remaining 32%
      (approximately US$6,863,200). If Loral Orion increases the aggregate
      insured value

                                  PROPRIETARY
<PAGE>
      (the "Additional Insurance Amount") over US$115 million for the launch
      insurance brokered by Willis Inspace, then APT shall not be responsible
      for the insurance premiums relating to such Additional Insurance Amount
      and Loral Orion shall be responsible for 100% of such additional insurance
      premiums. APT shall be responsible for 100% of the gross insurance
      premiums related to the policy for Launch Insurance brokered by Marsh
      McLennan. Such insurance shall consist of coverage commencing from
      Intentional Ignition to 365 days thereafter (the "Launch Insurance").
      Loral Orion or its designee shall be the named insured and the loss payee
      in respect of the Initial Loral Transponders and APT or its designee shall
      be the named insured and the loss payee in respect of the remaining
      transponders on the Satellite with respect to the Launch Insurance;
      provided however, that if Loral Orion shall have accelerated the
      termination of the APT Leasehold Interest in any Remaining Loral
      Transponders so that such termination shall occur within the coverage
      period of the Launch Insurance, then APT agrees that it shall cause Loral
      Orion or its designee to be the named insured and the loss payee in
      respect of any Remaining Loral Transponders, the APT Leasehold Interest of
      which was terminated within such coverage period, effective as of the
      applicable Termination Date. Loral Orion shall be responsible for
      procuring at its own expense in-orbit insurance for the Loral Transponders
      following expiration of the coverage period of the Launch Insurance
      policies described above.

                                    ARTICLE 4
                            OPERATION OF TRANSPONDERS

Except as set forth in the Marketing Agreement, each of APT and Loral Orion
shall be entitled to all revenues generated from the APT Transponders and the
Loral Transponders, respectively.

                                    ARTICLE 5
                       THE SATELLITE AND RELATED CONTRACTS

5.1   The Satellite shall generally have such design and other specifications as
      are set forth in the SS/L Contract and in this Agreement.

5.2   The footprint of Beam #2 Ku-band transponders on the Satellite will be
      modified by SS/L as requested by Loral Orion, which modification costs
      shall be borne by Loral Orion. Such modifications, and the costs thereof,
      are set forth in Annex G hereto, which modifications are hereby approved
      by APT. In the event of any further modification to the footprint of Beam
      #2 Ku-band transponders, such further modifications, and the costs
      thereof, shall be agreed between SS/L and Loral Orion provided the
      modifications do not materially impact the Common Elements or the APT
      Transponders. If such modifications do materially impact the Common
      Elements or the APT Transponders, APT and Loral Orion shall jointly
      approve them pursuant to the Management Agreement.

5.3   Loral Orion acknowledges that it has reviewed the SS/L Contract and the
      Launch Services Agreement and agrees to all the terms and conditions
      contained therein and that

                                  PROPRIETARY
<PAGE>
      it shall be bound by all actions taken by APT with respect thereto or with
      regard to the selection of the Launch Agency or with regard to the Launch
      Services Agreement, provided such action is taken in full compliance with
      the obligations of the Management Agreement.

5.4   Loral Orion acknowledges that:

      EXCEPT AND TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT, APT HAS NOT
      MADE, NOR DOES IT MAKE, ANY REPRESENTATION OR WARRANTY, WHETHER WRITTEN OR
      ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
      DESIGN, OPERATION, CONDITION, QUALITY, SUITABILITY OR MERCHANTABILITY OR
      FITNESS FOR USE OR FOR A PARTICULAR PURPOSE, ABSENCE OF LATENT OR OTHER
      DEFECTS, WHETHER OR NOT DISCOVERABLE, WITH REGARD TO THE SATELLITE, AND
      APT HAS NOT MADE ANY WARRANTY WITH RESPECT TO THE PERFORMANCE OF ANY
      LAUNCH VEHICLE.

5.5   Loral Orion agrees to be bound by the no-fault, no-subrogation inter-party
      waiver of liability and related indemnity provisions provided in the
      Launch Services Agreement and to cause its contractors and subcontractors
      at any tier (including suppliers of any kind) that are involved in any
      performance of this Agreement and any other person who through Loral Orion
      has an interest in the Satellite or any transponder thereon, as required
      by the Launch Services Agreement, to accede to such waiver. Loral Orion
      shall execute and deliver any instrument that may be reasonably required
      by the Launch Agency to evidence its agreement to be bound by such waiver.
      In no event shall such no-fault, no-subrogation inter-party waiver and
      related indemnity provisions have any effect on the rights, obligations,
      and liabilities of and between Loral Orion and APT under this Agreement or
      under the other Transaction Documents.

5.6   APT and Loral Orion hereby agree that in the event any payment (whether in
      the form of a refund, reduction or damages) is made by the Launch Agency
      in respect of the LSA, APT and Loral Orion shall agree in good faith upon
      an allocation of such payment between the two parties consistent with the
      intent of the parties and the principles set forth in this Agreement. Each
      of APT and Loral Orion hereby agrees that to the extent that it receives
      any such payment, whether from the Launch Agency or otherwise, that is in
      excess of its agreed upon allocated amount, it shall promptly remit any
      such excess amount to the other Party.

5.7   APT and Loral Orion agree that in the event that either of them issues an
      invoice to SS/L where the right to payment depends upon the respective
      interests of APT and Loral Orion in the Satellite, it shall provide a copy
      of such invoice to the other Party and that the SS/L Contract and the
      Related Orion Agreement, as the case may be, shall provide that SS/L shall
      not pay any invoice to which the other Party has notified SS/L of an
      objection within 15 days after the date of issuance thereof.

                                  PROPRIETARY
<PAGE>
                                   ARTICLE 6
                  REPRESENTATIONS AND WARRANTIES OF THE PARTIES

Each of the parties, as of August 26, 2003, hereby represents and warrants to
the other, as follows:

6.1   Organization and Standing. It is a company with limited liability duly
      organized, validly existing and in good standing under the laws of the
      place of its incorporation and has all requisite corporate power and
      authority to own, lease and operate its properties and to carry on its
      businesses as now being conducted, except where the failure to be so
      organized, existing and in good standing or to have such power and
      authority would neither have a material adverse effect on its financial
      condition, business or results of operation nor materially impair or delay
      its ability to consummate the transactions contemplated hereby (a
      "Material Adverse Effect").

6.2   Authority Relative to this Agreement. Subject to any approval of the U.S.
      Bankruptcy Court for the Southern District of New York (the "Bankruptcy
      Court") that may be required, in the case of Loral Orion, it has all
      corporate power and authority to execute and deliver this Agreement and
      the other Transaction Documents, and to perform all of its obligations
      hereunder and thereunder. Its execution and delivery of this Agreement and
      the other Transaction Documents, and its performance of its obligations
      hereunder and thereunder have been duly authorized by all necessary and
      proper corporate action. This Agreement and the other Transaction
      Documents have been duly executed and delivered by it and constitute the
      legal, valid and binding obligations, enforceable against it in accordance
      with their terms, subject to applicable bankruptcy, insolvency,
      reorganization, moratorium and similar laws relating to or affecting
      creditors' rights and subject, as to enforceability, to general principles
      of equity (regardless whether enforcement is sought in a proceeding in
      equity or at law).

6.3   Noncontravention. Subject to any approval of the Bankruptcy Court that may
      be required, in the case of Loral Orion, its execution and delivery of
      this Agreement and the other Transaction Documents, its performance of its
      obligations to be performed hereunder and thereunder and the consummation
      of the transactions contemplated hereby and thereby will not (i)
      contravene or conflict with its memorandum and articles of Association,
      by-laws or other organizational documents; (ii) contravene or conflict
      with or constitute a violation of any provision of any laws or license to
      which it or any of its properties or assets is subject; or (iii) conflict
      with, result in a breach of, constitute a default under, result in the
      acceleration of, cause it to make an offer to purchase under, create in
      any party the right to accelerate, terminate, modify or cancel, require
      any notice or give rise to a loss of any benefit under, any contract,
      lease, lien or other arrangement to which it is a party or by which is
      bound or to which any of its properties or assets is subject or result in
      the creation or imposition of any liens on any of its assets, other than
      any loss of benefit, lien or any other such event which would not have a
      Material Adverse Effect.

                                  PROPRIETARY
<PAGE>
6.4   Governmental Proceeding; Litigation. Except for the Consent Agreement
      dated January 9, 2002 entered into by Loral Space & Communications Ltd.
      with the U.S. Department of State, any order of the Bankruptcy Court that
      may be issued approving this Agreement and any export control approvals,
      licenses, technical assistance or other similar agreements obtained to
      date or required by applicable law, there is not in effect any judgment,
      order, writ, decree, stipulation or injunction by or with any governmental
      entity to which it or any of its Affiliates is party or by which it or any
      of its Affiliates or any properties or assets of any of the foregoing is
      bound, and which relates to or affects this Agreement or the transactions
      contemplated hereby, and neither it nor any of its Affiliates is party to,
      engaged in or, to its Knowledge, threatened with any Action which relates
      to or affects this Agreement or the transactions contemplated hereby, and,
      to its Knowledge, no event has occurred and no condition exists which
      could reasonably be expected to result in any such Action. Neither it nor
      any of its Affiliates is in default under or with respect to any judgment,
      ruling, order, writ, decree, stipulation or injunction of the type
      described in this Paragraph.

                                    ARTICLE 7
                        LEASE OF ADDITIONAL TRANSPONDERS

7.1   Loral Orion may elect to lease or sub-lease from APT additional standard
      C-band frequency transponders on the Satellite or on APSTAR VI, if
      available. Loral Orion shall give written notice to APT of its desire to
      lease or sub-lease an additional transponder, which notice shall identify
      the desired number of transponders, the proposed lease term, and the
      desired protection level. APT shall respond within fifteen (15) days of
      receipt of such notice, as to whether such transponder is available. If
      APT responds that such transponder is available, it shall propose the
      terms and conditions for such lease or sub-lease. APT agrees that such
      terms and conditions shall reflect the fact that Loral Orion is entitled
      to "most favored customer" status in respect of such lease, subject to all
      relevant terms being equal. The parties agree that they will look to APT's
      leases in the ordinary course of business with wholesale customers (as
      opposed to retail customers) for purposes of determining "most favored
      customer" status and the parties shall negotiate the terms of any such
      lease on an arms length basis. APT may decline to lease additional
      transponder(s) to Loral Orion under this Paragraph 7.1, even if available,
      if Loral Orion's proposed term for such lease is less than twelve (12)
      months. Further, if the term of such lease arrangement is to the End of
      Life of the Satellite or APSTAR VI, as the case may be, Loral Orion shall
      have follow-on rights to continue such lease arrangement in respect of the
      relevant successor satellite on terms and conditions substantially similar
      to those set forth under the original lease arrangement, except for price,
      which shall be agreed upon by the parties, based on the "most favored
      customer" pricing then available on such successor satellite.

7.2   Loral Orion may also elect to lease the transponders on APSTAR I, if
      available, that correspond to the standard C-band Initial Loral
      Transponders on the Satellite, on the most favored customer terms
      described in Paragraph 7.1 above. Loral Orion shall give written notice to
      APT of its desire to lease an additional transponder, which notice shall

                                  PROPRIETARY
<PAGE>
      identify the desired number of transponders, the proposed lease term, and
      the desired protection level. APT shall respond within fifteen (15) days
      of receipt of such notice, as to whether such transponder is available,
      and if so, shall propose the terms and conditions for such lease.

                                    ARTICLE 8
                                   [RESERVED]

                                    ARTICLE 9
                                  ORBITAL SLOT

9.1   Coordination Activities.

      9.1.1 APT shall keep Loral Orion fully informed of the status of all
            coordination activities relating to the Orbital Slot and shall, if
            so requested by Loral Orion, allow Loral Orion to participate in
            such activities, subject to the restrictions of OFTA and other
            relevant governmental authorities and of any license arrangements
            with regard to the Orbital Slot. APT agrees that it will not,
            without Loral Orion's prior written consent, take any action or
            enter into any agreement in relation to the Orbital Slot that
            materially impacts the Loral Transponders or involves the payment of
            money or other financial accommodation which will be borne by Loral
            Orion. APT shall use its reasonable best efforts to fully enforce
            the terms of coordination agreements entered into for the benefit of
            the Satellite or any successor satellite.

      9.1.2 APT has taken all actions required of APT to date to coordinate the
            Satellite in the Orbital Slot. Annex F sets forth (i) all material
            restrictions on the Satellite resulting from coordination activities
            as of August 26, 2003, (ii) all material agreements or commitments
            relating to coordination proceedings for the Orbital Slot and all
            Summary Record Documents, true and complete copies of which were
            previously provided to Loral, (iii) lists of all the countries and
            operators with which the operator of the Satellite has been or will
            be required to enter into coordination discussions and the status of
            those discussions.

      9.1.3 APT will use its reasonable best efforts so that (i) the Loral
            Transponders will not suffer from any unacceptable restrictions, as
            reasonably determined by Loral Orion (after consultation with APT),
            with regard to allowing unencumbered carrier loading on the
            transponders and (ii) operation of the Loral Transponders will be
            free of unacceptable interference, as reasonably determined by Loral
            Orion (after consultation with APT), from adjacent satellite
            operations, subject however in each case to any regulatory
            restrictions or restrictions contained in coordination agreements
            relating to the Orbital Slot presently existing or permitted under
            Paragraph 9.1.1. APT will use its reasonable best efforts so that
            Loral Orion may place either analog or digital

                                 PROPRIETARY
<PAGE>
            carriers on the Loral Transponders without restrictions as full
            transponders, single channel per carrier, or multiple channels per
            carrier.

9.2   License Rights.

      APT shall, in consultation with Loral Orion,

      (a)   make all regulatory filings and take such other actions on a timely
            basis with the MII, the OFTA, TongaSat, the ITU and the applicable
            governmental entities of those jurisdictions to which the Satellite
            may provide coverage, as may be necessary or appropriate to secure
            and maintain its rights to utilize the Orbital Slot, including
            without limitation, using its best efforts to preserve the
            unencumbered and unrestricted use of the Orbital Slot and diligently
            prosecuting renewal of the ITU authorization during a reasonable
            period prior to its scheduled expiration date;

      (b)   use its best efforts to achieve, maintain and renew notification for
            the Orbital Slot at the ITU and have the filing entered in the ITU
            Master Frequency Register; and

      (c)   make such filings as Loral Orion may reasonably request, including
            filings to expand the frequencies and coverage area of the Orbital
            Slot.

9.3   APT shall use its best efforts to provide Loral Orion with quiet enjoyment
      of the Orbital Slot.

9.4   APT shall keep Loral Orion fully informed with regard to its license
      agreements and all regulatory filings, correspondence and notices from or
      with MII, OFTA, TongaSat, the ITU and relevant governmental entities
      relating to the authorization to use the Orbital Slot.

9.5   Loral Orion and APT will share the Orbital Slot license fees payable to
      TongaSat pursuant to the Licence Agreement entered into between APT and
      TongaSat dated July 8, 2003 (the "Slot License Agreement") as follows:

      (a)   APT shall pre-pay US$4 million to TongaSat (the "Orbital Slot
            Prepayment").

      (b)   Commencing with the completion of in-orbit testing of the Satellite
            ("IOT") and continuing through the fifth anniversary of IOT, a fee
            of $1.1 million per year, which fee will be payable quarterly in
            arrears and shared between APT and Loral Orion in a ratio equal to
            the ratio between the number of transponders in each Party's Payload
            during the period in question (pro rated for any change in relative
            interest during such period). Pursuant to the Slot License
            Agreement, in recognition of

                                 PROPRIETARY
<PAGE>
            APT having made the Orbital Slot Prepayment, during the five-year
            period commencing from completion of IOT, APT shall receive a credit
            of US$800,000 per year (that is, US$200,000 per quarter), and such
            credit shall be applied towards payment of the license fee described
            in this clause (b). The balance of the license fee referred to in
            this clause (b), payable for each of the first five years after IOT
            shall be US$300,000 per year.

      (c)   Commencing with the sixth anniversary of IOT and through the
            fifteenth anniversary of IOT, a fee of $1.175 million per year,
            which fee will be payable quarterly in arrears and shared between
            APT and Loral Orion in a ratio equal to the ratio between the number
            of transponders in each Party's Payload during the period in
            question (pro rated for any change in relative interest during such
            period).

      (d)   Commencing with IOT and continuing through the fifteenth anniversary
            of IOT, Loral Orion and APT shall provide to TongaSat, free of
            charge, use of 1/2 of a standard C-band transponder and 1/2 of an
            extended C-band on the Satellite, to be allocated between APT and
            Loral Orion in a ratio equal to the ratio between the number of
            transponders in each Party's Payload during the period in question
            (pro rated for any change in relative interest during such period),
            with the exact identification of transponder capacity to be mutually
            agreed by Loral Orion and APT.

      (e)   Loral Orion agrees to reimburse APT (in the same proportion as that
            applicable for the license fee as set forth in clause (b) above) for
            the interest charges incurred by APT (not to exceed LIBOR plus 1.5%
            per annum with interest calculated on the basis of a year of _360
            days) to effect the Orbital Slot Prepayment. For purposes of
            calculating the foregoing interest charges, the principal amount of
            the loan shall be deemed reduced by US$200,000 per quarter starting
            with the first quarter after IOT until the fifth anniversary of the
            IOT, at which time the loan shall be deemed to be paid in full and
            thereafter no further interest charges shall be incurred.

      (f)   Within 15 days after IOT, and thereafter, at least 30 days prior to
            each quarterly payment date as set forth below, APT shall deliver to
            Loral Orion an invoice showing, in reasonable detail and with such
            supporting documentation as Loral Orion may reasonably request, the
            amount for which APT is seeking reimbursement from Loral Orion in
            relation to either the license fee payable for the relevant quarter
            under clause (b) above and/or interest on the Orbital Slot
            Prepayment as set forth in clause (e) above. The first reimbursement
            date shall be 30 days after IOT and shall cover Loral Orion's share
            of the interest expense on the Orbital Slot Prepayment which has
            accrued from the date on which the prepayment was first made to
            TongaSat by APT through IOT. Thereafter, the reimbursement date
            shall coincide with the quarterly payment date for the license fee
            to TongaSat as set forth in clause (b) above and shall cover Loral
            Orion's share of the license fee and the interest expense on the
            Orbital Slot Prepayment for the relevant quarter.

                                 PROPRIETARY
<PAGE>
            APT and Loral Orion agree that except as set forth in this Paragraph
            9.5, no other amounts shall be payable by Loral Orion with regard to
            the Orbital Slot, except as may be incurred by Loral Orion with
            respect to its participation in coordination activities as
            contemplated by Paragraph 9.1.1 above.

                                   ARTICLE 10
                                 LANDING RIGHTS

      10.1  APT and Loral Orion will each cooperate with, and assist the other,
            on a reasonable best efforts basis, in obtaining such consents, and
            otherwise complying with such requirements, as may be required or
            imposed, from time to time, by the governments of the People's
            Republic of China and the United States in connection with the use
            of transponders on the Satellite, in each case to the extent such
            approval or compliance is needed for a Party's transponders to be
            allowed to provide service in the People's Republic of China or the
            United States, respectively.

      10.2  Each of APT and Loral Orion agrees, and each will require any
            lessee, sub-lessee or user of any transponder to agree, to restrict
            its use of the transponders to transmission only for any lawful
            purpose and agrees to comply in all material respects with all
            applicable laws and government regulations.

                                   ARTICLE 11
                           SUCCESSOR SATELLITE RENEWAL

      11.1  Loral Orion shall have the right, but not the obligation, to
            participate in the ownership of up to forty-six percent (46%) of the
            transponder capacity on the successor satellite, if any, to the
            Satellite or the number of transponders on Loral Orion's Payload at
            the End of Life of the Satellite, whichever is greater; provided it
            exercises such right by giving written notice thereof to APT no
            later than three (3) years before the scheduled End of Life of the
            Satellite, as notified by APT in writing to Loral Orion.

      11.2  The terms and conditions of such participation shall be
            substantially similar to the terms hereof (including but not limited
            to transponder types and specific transponder assignments and rights
            with respect to a successor satellite) except the percentage of cost
            to be borne by Loral Orion shall be equal to the percentage of its
            ownership interest in the successor satellite (e.g., Loral Orion
            will bear 46% of the cost if its ownership interest in the successor
            satellite is 46%) and for appropriate adjustments based on satellite
            capabilities and cost; provided however that if Loral Orion shall
            participate in less than forty percent (40%) of Adjusted Transponder
            Capacity, the price shall not be at cost, but rather shall be
            calculated using a cost-plus formula based on the percentage of
            Adjusted Transponder Capacity taken up, as follows:

                                 PROPRIETARY
<PAGE>
<TABLE>
<CAPTION>
        Percentage of Adjusted Transponder Capacity     Price Calculation
        -------------------------------------------     -----------------
<S>                                                     <C>
                          1 - 4%                          Cost plus 40%
                          5 - 9%                          Cost plus 35%
                         10 - 14%                         Cost plus 30%
                         15 - 19%                         Cost plus 25%
                         20 - 24%                         Cost plus 20%
                         25 - 29%                         Cost plus 15%
                         30% - 34%                        Cost plus 10%
                         35 - 39%                         Cost plus 5%
                        40% - 100%                            Cost
</TABLE>

      11.3  "Adjusted Transponder Capacity" shall equal

            (a) the amount of the transponder capacity on the Satellite, if the
            transponder capacity on the successor satellite is greater than the
            transponder capacity on APSTAR V; or

            (b) the transponder capacity on the successor satellite, if the
            transponder capacity on the successor satellite is less than the
            transponder capacity on APSTAR V.

      11.4  If APT decides not to launch a replacement satellite into the
            Orbital Slot having capacity and capability that is the same as or
            better than that of the Satellite, Loral Orion shall be offered the
            first opportunity to replace the Satellite, including assignment,
            subject to any necessary consents, of the TongaSat and ChinaSat
            orbital slot agreements and any other relevant licenses so that
            replacement can occur before the End of Life of the Satellite. If
            such assignment cannot be effected in whole or in part, then APT and
            Loral Orion shall enter into an agreement to enable Loral Orion to
            use the Orbital Slot with respect to such license rights which
            cannot be assigned. If Loral Orion launches a replacement satellite,
            APT shall have the same rights, mutatis mutandis, as Loral Orion to
            participate in the ownership of capacity in the successor satellite
            as set forth in Paragraphs 11.1 through 11.3 above.

      11.5  If the Parties elect to launch a replacement satellite for the
            Satellite, then:

            (a) APT shall provide the services for such replacement satellite
            pursuant to the terms and conditions of a Satellite Services
            Agreement substantially similar to the form of the Satellite
            Services Agreement dated December 10, 2002 (the "Model Agreement"),
            except for price, which the Parties shall negotiate in good faith
            based on the principle that the price for the services to be
            delivered shall (i) be established at a cost-based rate (as opposed
            to a demand-based rate) that is intended to minimize the Parties'
            cost basis in their respective transponders, (ii) reflect a service
            price / service cost ratio similar to the service price / service
            cost ratio created by the Model Agreement, and (iii) take into
            account such additional factors as the inflation and satellite
            technology changes that have occurred since the Model Agreement was
            entered into; and

                                 PROPRIETARY
<PAGE>
      (b)   the Parties agree to enter into a new management agreement with
            respect to such replacement satellite on substantially the same
            terms and conditions as those contained in the form of Management
            Agreement dated December 10, 2002.

                                   ARTICLE 12
                 EFFECTIVE DATE OF THIS AGREEMENT; NO ASSUMPTION

12.1  This Amended and Restated Agreement shall become effective on the date
      (the "Effective Date") that this Agreement is approved by the Bankruptcy
      Court.

12.2  [Reserved]

                                   ARTICLE 13
                                     PLEDGES

13.1  Neither APT nor Loral Orion shall have the right to pledge, mortgage,
      charge, grant any security interest in or otherwise encumber all or part
      of its interest in the Satellite, except for the purpose of security
      relating to financing (whether new or existing), and then only provided
      that:

      (a) such Party shall remain liable for all obligations hereunder relating
      to such interest;

      (b) the encumbrance shall be subject to any necessary approvals or
      restrictions of any relevant governmental authority or telecommunications
      administration; and

      (c) Either (x) satisfactory arrangements as agreed between the parties
      (including a party's lenders) shall have been made to recognize and
      protect the rights of the other party under this Agreement and the
      Transaction Documents or (y) the rights of such secured party with respect
      to any such interest in the Satellite shall at all times be subject to the
      rights of the other Party under this Agreement and the other Transaction
      Documents.

13.2  Notwithstanding anything to the contrary set forth in Paragraph 13.1
      above, Loral Orion agrees that it shall not pledge, mortgage, charge,
      grant any security interest in, or otherwise encumber all or part its
      interests in any transponders on the Satellite that is then subject to the
      APT Leasehold Interest or the Common Elements associated therewith
      (collectively any "Lien"), for any purpose except for any Lien incurred
      pursuant to the next sentence. Loral Orion agrees that it will submit to
      the Bankruptcy Court a request to approve the grant by Loral Orion of a
      Lien in favor of APT's banks with respect to Loral Orion's ownership
      interest in the APT Transponders and the Remaining Loral Transponders, but
      with respect to any Remaining Loral Transponder, only for so long as such
      transponder is subject to the APT Leasehold Interest, and to the extent
      such approval is obtained, to grant such Lien

                                 PROPRIETARY
<PAGE>
      in the manner and to the extent so approved provided that the foreclosure
      of any such Lien shall be subject to the export control laws and
      regulations of the United States.

                                   ARTICLE 14
                                    TRANSFER

14.1  In the event APT or Loral Orion desires to transfer (other than sales to
      customers in the ordinary course of business in the form of long term
      leases or otherwise) all or part of its interest in the Satellite other
      than to an Affiliate, such transfer shall be subject to a right of first
      offer in favor of the other party in accordance with the terms, conditions
      and procedures of which are set forth in the Management Agreement. A
      Party's interest in the Satellite that is subject to any such right of
      first offer obligation shall consist, in the case of APT, of the APT
      Leasehold Interest and in the case of Loral Orion, of the Loral
      Transponders not subject to the APT Leasehold Interest and the Common
      Elements. In addition, Loral Orion agrees that any transfer by it of its
      ownership interest in the transponders on the Satellite that are subject
      to the APT Leasehold Interest shall be accompanied by a concomitant
      assignment of its rights and obligations under the APT Lease Agreement.

14.2  In the event the other party declines to exercise its right of first offer
      or such right of first offer is not otherwise applicable as provided in
      the Management Agreement, the transferring party may transfer its
      interests to a third party in accordance with the terms set forth in the
      Management Agreement, provided the transferee agrees to be bound by the
      relevant terms of this Agreement and the Transaction Documents (but
      excluding the APT Lease Agreement, which will be assumed by the transferee
      only to the extent permitted under Section 15 of the APT Lease Agreement)
      and any necessary governmental approvals required in connection with
      maintaining the right to use the Orbital Slot have been obtained.

14.3  In the event APT transfers its interest in the Satellite to a third party,
      APT shall remain fully obligated to Loral Orion, regardless of such third
      party's agreement to be bound by the terms of this Agreement, with regard
      to the performance of all obligations set forth herein that do not pertain
      or relate exclusively to the Satellite, including but not limited to
      obligations regarding the Orbital Slot, APSTAR I, APSTAR VI, and any
      successor satellite.

                                   ARTICLE 15
                           RELATIONSHIP OF THE PARTIES

The rights and obligations of the parties hereunder shall be individual, not
joint or collective. It is not the intention of the parties to create, nor shall
this be deemed or construed to create a partnership, joint venture, association
or trust, or as authorizing any party to act as an agent, servant or employee
for any other party for any purpose except as explicitly set forth herein.

                                 PROPRIETARY
<PAGE>
                                   ARTICLE 16
                                      TAXES

Each of APT and Loral Orion shall be responsible for the payment of any and all
taxes assessed on the construction, use and operation of its respective Payload.

                                   ARTICLE 17
                                ENTIRE AGREEMENT

This Agreement and the other Transaction Documents together constitute the
entire agreement and understanding between the parties in connection with the
transactions hereby contemplated. The Transaction Documents supersede all
previous agreements, arrangements and understandings between the parties with
regard to such transaction which shall cease to have any further force or
effect. No party is entering into any of the Transaction Documents or any of the
arrangements hereby contemplated in reliance upon any representation, warranty
or undertaking which is not expressly set out or referred to in any of the
Transaction Documents.

                                   ARTICLE 18
                    TERMINATION AND CERTAIN BANKRUPTCY EVENTS

18.1  This Agreement may be terminated as follows:

      (a) By mutual written agreement of the parties;

      (b) By either party by written notice to the other and in accordance with
      Article 20 hereof in the event of a default by the other party provided
      such default meets the requirements stated in said Article 20; and

      (c) By the Non-Force Majeure Party, by giving at least thirty (30) days'
      prior written notice to the Force Majeure Party, if an event of force
      majeure as described in Article 19 below prevents the Force Majeure Party
      from performing its fundamental obligations hereunder for a period of more
      than 120 days.

18.2  Termination of this Agreement shall not affect: (i) either Party's
      obligations under any other Transaction Document, (ii) Loral Orion's title
      to the Satellite (including without limitation any Remaining Loral
      Transponder for which the APT Leasehold Interest shall have been
      terminated as provided in Paragraph 2.4.2), (iii) APT's Leasehold
      Interest, or (iv) either party's obligations pursuant to Articles 9, 10,
      11, and 13 of this Agreement, which obligations shall expressly continue
      for so long as both parties possess an economic interest in the Satellite.

                                 PROPRIETARY
<PAGE>
                                   ARTICLE 19
                                  FORCE MAJEURE

19.1  Neither party shall be liable for nonperformance or delays in performance
      when caused by acts or events which are beyond the reasonable control of
      the delayed party, including but not limited to the following: acts of
      God, acts of the public enemy, acts of civil or military authority,
      governmental priorities, strikes or other labor disturbances, hurricanes,
      earthquakes, fires, floods, epidemics, embargoes, war, and riots. In the
      event of any such delay the date of delivery or of performance of the
      obligation affected by the force majeure event shall be extended for a
      period equal to the effect of time lost by reason of the delay.

19.2  A party claiming delay in delivery or performance due to an event of force
      majeure as set forth herein (the "Force Majeure Party") shall send written
      notice thereof and a statement of particulars to the other party (the
      "Non-Force Majeure Party") within a reasonable time.

19.3  The party affected shall take appropriate measures to minimize or remove
      the effects of the event of force majeure and, within the shortest time
      possible, shall attempt to resume performance of the obligations affected
      by the event of force majeure.

19.4  Each party shall use its reasonable best efforts to minimize the losses
      and damages caused and/or to be caused to the other party by an event of
      force majeure. Both parties shall consult as soon as possible to find an
      appropriate solution.

                                   ARTICLE 20
                                     DEFAULT

20.1  Monetary Default. Should either APT or Loral Orion fail to make timely
      payment of any amount required hereunder in accordance with the provisions
      defined herein, and such failure to pay shall have continued for a period
      of three (3) months, the party in breach shall pay interest to the other
      party at the 30-day LIBOR rate plus two percent (2%) per annum in respect
      of the amounts in arrears. Such interest shall be calculated on a daily
      basis from the date payment was due until the date payment is received by
      the non-breaching party. Should the party in breach continue to fail to
      make such payment for a period of nine (9) months in the aggregate, then
      in addition to the interest amount due from the breaching party, the other
      party shall have the right to terminate this Agreement and to claim
      damages from the party in breach in accordance with the provisions of
      Paragraph 20.4 hereof.

20.2  Non-Monetary Default. Should either APT or Loral Orion fail to cure a
      material breach of any provisions of this Agreement (other than provisions
      regarding payment of monies, which are provided for in Paragraph 20.1
      above) within forty-five (45) days after receipt of written notice from
      the other party outlining such breach, then the other, non-breaching party
      shall have the right to terminate this Agreement (but, for the

                                 PROPRIETARY
<PAGE>
      avoidance of doubt, without prejudice to the APT Leasehold Interest) and
      to claim damages from the party in breach in accordance with the
      provisions of Paragraph 20.4 hereof.

20.3  In the event Loral Orion fails to make timely payment of any amount due on
      a Termination Date pursuant to Paragraph 3.1, APT shall retain its
      leasehold interest in the related Remaining Loral Transponders (and all
      other Remaining Loral Transponders for which payment has not yet been made
      in full) and all proceeds therefrom and shall not be required to obtain
      Loral Orion's consent to enter into commercially reasonable lease
      agreements for such Remaining Loral Transponders, even if such lease or
      other rights would extend beyond the relevant Termination Date but Loral
      Orion's consent right with respect to future lease agreements which extend
      beyond the relevant Termination Date shall be reinstated at such time as
      it shall have cured its payment default. If such delay continues for a
      period of nine (9) months after the scheduled Termination Date, Loral
      Orion shall no longer be entitled to terminate the APT Leasehold Interest
      in the relevant Remaining Loral Transponders as provided in Paragraph
      2.4.2 of this Agreement.

20.4  If the other party suffers any cost, liability or loss as a direct result
      of a material breach of this Agreement by any party, and such breach shall
      not have been cured by such party within forty-five (45) days from receipt
      of notice of breach, the party in breach shall indemnify and hold the
      non-breaching party harmless in respect of any such cost, liability or
      loss; provided always, however, that in no event shall a party be liable
      under any theory of tort, contract, strict liability, or other legal or
      equitable theory, for any indirect, special, incidental, or consequential
      loss or damage (including without limitation, loss of profit or business
      opportunity).

                                   ARTICLE 21
                                 CONFIDENTIALITY

21.1  No press release, announcement or disclosure to a third party concerning
      the transactions contemplated hereby will be made by any party hereto
      without the prior consent of the other party hereto, except as such
      release, announcement or disclosure may be:-

      (a)   required by law or the rules of any applicable securities exchange;

      (b)   necessary to be made to a party's lenders for financing purposes
            provided that such lenders agree to maintain the confidentiality of
            any such disclosed information on customary and reasonable terms; or

      (c)   is or becomes publicly known, otherwise than as a consequence of a
            breach of this Agreement.

                                PROPRIETARY
<PAGE>
      21.2  The parties have entered into a Confidentiality Agreement covering
            disclosure of information that may be made in connection with the
            parties' performance under the Transaction Documents. The rights and
            obligations thereunder shall apply to all such proprietary
            information disclosed in the implementation or performance of this
            Agreement.

                                   ARTICLE 22
                                   ASSIGNMENT

This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any of the rights or obligations hereunder may be assigned
without the prior written consent of the other party except for (i) assignments,
in whole or in part, to an Affiliate, provided that notwithstanding any such
assignment to an Affiliate, the assigning party shall, unless otherwise
consented to by the other party, nevertheless remain responsible for all
obligations hereunder; and (ii) assignments by way of security to any entity for
the purpose of security relating to financing, subject to compliance with the
requirements of Article 13 hereof, or otherwise with the written consent of the
other Party. In the event that APT shall wish to assign its rights and
obligations hereunder to an Affiliate, it may do so, provided however that Loral
Orion will not be adversely affected or prejudiced by any assignment or
delegation by APT to its Affiliate of its rights and obligations under the MII
and OFTA filings and under the license agreements with TongaSat and ChinaSat
with respect to the Orbital Slot.

                                   ARTICLE 23
                                  GOVERNING LAW

This Agreement and the Transaction Documents will be governed by and construed
in accordance with the laws of the State of New York without giving effect to
the choice of law principles therein.

                                   ARTICLE 24
                               DISPUTE RESOLUTION

In the event that a dispute arises out of or relates to this Agreement, Loral
Orion and APT shall attempt to resolve such dispute through friendly
consultation. If the parties are unable to resolve the matter in dispute through
consultation within thirty (30) days following the date on which one party's
request for consultation is delivered to the other party, the parties shall
resolve the dispute through arbitration. The party shall submit the dispute to
arbitration in Singapore to the Singapore International Arbitration Centre for
resolution in accordance with the arbitration rules of that body, in which
case:-

(a)   there should be three (3) arbitrators (one appointed by each party and the
      third arbitrator appointed by the Singapore International Arbitration
      Centre);

                                 PROPRIETARY
<PAGE>
(b)   all proceedings in any such arbitration shall be conducted in English; and

(c)   any such arbitration award shall be final and binding on the parties.

A dispute arising under this Agreement may be consolidated with any arbitration
proceeding relating to the other Transaction Documents, and vice versa. The
arbitrators may not limit, expand or otherwise modify the terms of this
Agreement or award exemplary or punitive damages or attorney's fees. The
arbitrators shall apply the substantive (not the conflicts) law of the state
specified in the governing law provision set forth in Article 23 above. The
award shall be in U.S. Dollars. Judgment upon the award rendered in the
arbitration may be entered in any court having jurisdiction thereof. Unless
otherwise determined by the arbitration award, each party shall bear its own
expenses (including attorney's fees) and an equal share of the expenses of the
arbitrators and the fees of the Singapore International Arbitration Centre. The
parties shall require that the arbitrators and the arbitral body shall hold the
existence, content and result of the arbitration in confidence. Nothing in this
clause shall be construed to preclude any party from seeking injunctive relief
in order to protect its rights pending arbitration. A request by a party to a
court for such injunctive relief shall not be deemed a waiver of the obligation
to arbitrate.

                                   ARTICLE 25
                                     NOTICES

Any notice, request, demand, waiver, consent, approval or other communication
required or permitted to be given hereunder shall be in writing and shall be
delivered by hand, by facsimile (with confirmation of receipt), or by DHL or
other comparable international courier service, return receipt required, as
follows:-

      If to Loral, to:
            Loral Orion, Inc.
            600 Third Avenue
            New York, NY 10016
            Facsimile No.: 212-338-5320

            Attention: General Counsel

                                 PROPRIETARY
<PAGE>
      If to APT, to:
            APT Satellite Company Limited
            Rooms 3111-3112
            One Pacific Place
            88 Queensway
            Hong Kong
            Facsimile No.: 852-2522-0419

            Attention: Mr. Brian Lo and Mr. Wu Shou Kang

or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed given when so delivered
by hand or faxed, or two business days after being sent in the case of
international courier service.

                                   ARTICLE 26
                                  MISCELLANEOUS

26.1  Headings

      The headings in this Agreement and the Annexes are inserted for
      convenience of reference only and shall not constitute a part hereof.

26.2  Severability

      Any provision of this Agreement which is invalid or unenforceable in any
      jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability without invalidating or rendering unenforceable the
      remaining provisions hereof, and any such invalidity or unenforceability
      in any jurisdiction shall not invalidate or render unenforceable such
      provision in any other jurisdiction.

26.3  Expenses

      Except as specifically provided otherwise in this Agreement, the parties
      hereto shall pay all of their own expenses relating to the transactions
      contemplated by this Agreement, including, without limitation, the fees
      and expenses of their respective counsel, accountants and financial
      advisors.

                                 PROPRIETARY
<PAGE>
26.4  Time of the Essence

      Time shall be of the essence of this Agreement, both as regards the dates
      and periods specifically mentioned and as to any dates and periods which
      may be substituted by agreement in writing of the parties.

26.5  Amendment

      No variation or amendment of this Agreement shall be valid unless it is in
      writing and signed by or on behalf of both parties to this Agreement.

26.6  Waivers

      No failure or delay by any party in exercising any right or remedy
      provided by law under or pursuant to this Agreement shall impair such
      right or remedy or be construed as a waiver or variation of it or preclude
      its exercise at any subsequent time and no single or partial exercise of
      any such right or remedy shall preclude any other or further exercise of
      it or the exercise of any other right or remedy.

26.7  Counterparts

      This Agreement may be executed in one or more counterparts, each of which
      shall be deemed an original and all of which together shall constitute one
      and the same document.

26.8  Survival of Obligations

      The obligations of the Parties under this Agreement which by their nature
      logically would be expected to survive termination, cancellation, or
      expiration of this Agreement, including without limitation those set forth
      in Paragraphs 9, 10, 11, 13, 15, 17, 18, 20, 23, 24, 25, and 26, shall
      survive termination, cancellation, or expiration of this Agreement for the
      applicable time period specified in such section or, if no time period is
      specified, for a reasonable period of time under the circumstances.

                                 PROPRIETARY
<PAGE>
THIS AMENDED AND RESTATED AGREEMENT HAS BEEN SIGNED THIS 26th DAY OFAUGUST,
2003, AND CONFORMED TO REFLECT THE AMENDMENTS SET FORTH IN THE SETTLEMENT
AGREEMENT DATED NOVEMBER 16, 2003.

APT SATELLITE COMPANY LIMITED                LORAL ORION, INC.

By:_________________________________         By:_______________________________
Name:                                        Name:
Title:                                       Title:

                                 PROPRIETARY
<PAGE>
                                   SCHEDULE 1
                                   DEFINITIONS

In this Agreement the terms set forth hereinafter shall have the meanings
defined in this Article:

      "Action" means any action, suit or proceeding at law or in equity,
      arbitration, inquiry, investigation or governmental, administrative,
      regulatory or other proceeding by or before any governmental entity.

      "Adjusted Transponder Capacity" shall have the meaning set forth in
      Paragraph 11.3.

      "Affiliate" means, with respect to any Person, any other Person directly
      or indirectly controlling, controlled by or under common control with such
      Person. For purposes of the immediately preceding sentence, the term
      "control" (including, with correlative meanings, the terms "controlling",
      "controlled by" and "under common control with"), as used with respect to
      any Person, means the possession, directly or indirectly, of the power to
      direct or cause the direction of the management and policies of such
      Person, whether through ownership of voting securities, by contract or
      otherwise.

      "Agreement" means this agreement (including the Schedules and Annexes
      hereto), as the same may be amended, modified or supplemented from time to
      time in accordance with its terms.

      "APSTAR I" means the satellite with 24 C-Band transponders located at
      geostationary orbital slot at 138 degrees east longitude.

      "APSTAR VI" means the new satellite based on a SB4000 model satellite with
      38 C-band and 12 Ku-band transponders to be built and delivered to APT by
      Alcatel Space Industries.

      "APT Transponders" shall mean all transponders on the Satellite that are
      not identified as Loral Transponders.

      "APT" shall have the meaning set forth in the preamble to this Agreement.

      "APT Lease Agreement" shall mean the Satellite Transponder Agreement
      referred to in the recitals to this Agreement.

      "APT Leasehold Interest" shall have the meaning set forth in Paragraph 2.1
      hereof.

      "ChinaSat" means China Telecommunications Broadcast Satellite Corporation.

      "Common Elements" means the elements on the Satellite that are common to
      and/or shared by the Loral Orion Payload and the APT Payload.

      "Confidentiality Agreement" means the confidentiality agreement entered
      into by APT and Loral Orion on December 10, 2002 with respect to the
      confidentiality of proprietary

                                 PROPRIETARY
<PAGE>
      information relating to the Satellite, as such contract may be amended
      from time to time in accordance with its terms.

      "Effective Date" shall have the meaning set forth in Article 12 hereof.

      "End of Life" means the date on which the actual orbital maneuver life of
      a satellite is permanently terminated.

      "Force Majeure Party" shall have the meaning set forth in Paragraph 19.2
      hereof.

      "Hong Kong" means the Hong Kong Special Administrative Region of the PRC.

      "Initial Loral Transponders" shall mean the 17 Loral Transponders which
      are not subject to the APT Leasehold Interest as described in Paragraph
      2.4.1 hereof.

      "Ground Equipment Contract" means the contract which was entered into
      between APT and SS/L as of August 26, 2003 for the purchase of certain
      ground equipment and certain associated services.

      "Intentional Ignition" has the meaning set forth in the SS/L Contract.

      "Knowledge" means actual knowledge after reasonable inquiry and
      investigation.

      "Launch Agency" means the provider responsible for conducting the launch
      services for the Satellite pursuant to the Launch Services Agreement.

      "Launch Services" has the meaning set forth in the SS/L Contract.

      "Launch Services Agreement" or "LSA" means the contract dated December 20,
      2002 entered into by SS/L, APT and Sea Launch Limited Partnership, which
      contract provides for launch services for the Satellite, as such contract
      may be amended from time to time in accordance with its terms.

      "Launch Vehicle" has the meaning set forth in the SS/L Contract.

      "LIBOR" means the rate of interest per annum, at any relevant time, at
      which thirty (30) day U.S. dollar deposits are offered at such time in the
      London interbank market.

      "Loral Orion" shall have the meaning set forth in the preamble to this
      Agreement.

      "Loral Transponders" shall have the meaning set forth in Paragraph 2.2
      hereof.

      "Management Agreement" means the agreement entered into by APT and Loral
      Orion on December 10, 2002 with regard to the joint management of the use
      and operation of the transponders on the Satellite, as such contract may
      be amended from time to time in accordance with its terms.

      "Marketing Agreement" means the agreement entered into by APT and Loral
      Orion on December 10, 2002 with regard to the marketing of the Remaining
      Loral Transponders prior to their take up by Loral Orion, as such contract
      may be amended from time to time in accordance with its terms.

                                 PROPRIETARY
<PAGE>
      "MII" means the Ministry of Information Industries of the PRC.

      "Non-Force Majeure Party" shall have the meaning set forth in Paragraph
      19.2 hereof.

      "OFTA" means the Office of Telecommunication Authority in Hong Kong.

      "Orbital Slot" means the geostationary orbital slot located at 138 degrees
      east longitude.

      "Orbital Sub-License Agreement" means the orbital slot sub-license
      agreement dated August 26, 2003 entered into between APT and Loral Orion.

      "Party" or "Parties" shall mean APT and/or Loral Orion.

      "Payload" of a party means the transponders on the Satellite to which such
      party has title free of the APT Leasehold Interest, in the case of Loral
      Orion, or leasehold interest, in the case of APT, on the date in question.

      "Person" means any individual, partnership, joint venture, trust,
      corporation, limited liability entity, unincorporated organization or
      other entity (including a governmental entity).

      "PRC" means the People's Republic of China, excluding, for purposes of
      this Agreement only, Hong Kong, Macau and Taiwan.

      "Related Orion Agreement" shall mean the agreement dated June 30, 2003
      entered into between SS/L and Loral Orion, pursuant to which among other
      things, Loral Orion agrees to pay a portion of the purchase price of the
      Satellite, including the Launch Services, under the SS/L Contract as such
      contract may be amended from time to time in accordance with its terms.

      "Remaining Loral Transponders" shall mean all the Loral Transponders other
      than those which are identified and designated as Initial Loral
      Transponders.

      "Satellite" means the SS/L FS 1300 satellite designated to be built by
      SS/L pursuant to the SS/L Contract.

      "Services Agreement" means the agreement entered into by APT and Loral
      Orion dated December 10, 2002 with regard to the TT&C, Access Management
      and Coordination services to be provided by APT for the Satellite, as such
      contract may be amended from time to time in accordance with its terms.

                                 PROPRIETARY
<PAGE>
      "SS/L" shall have the meaning set forth in the preamble to this Agreement.

      "SS/L Contract" means the satellite procurement contract dated as of
      January 8, 2001, between APT and SS/L, as such contract may be amended
      from time to time in accordance with its terms.

      "Slot License Agreement" shall have the meaning set forth in Paragraph 9.5
      hereof.

      "Subsidiary" of a specified Person means any corporation or other entity
      of which securities or other ownership interests having ordinary voting
      power to elect a majority of the Board of Directors or other Persons
      performing similar functions are directly or indirectly owned by such
      Person.

      "Termination Date" shall have the meaning set forth in Paragraph 2.4.2
      hereof.

      "TongaSat" means Friendly Islands Satellite Communication Ltd. of the
      Kingdom of Tonga.

      "Transaction Documents" means this Agreement, the Management Agreement,
      the Services Agreement, the Marketing Agreement, the Confidentiality
      Agreement, the APT Lease Agreement and the Orbital Sub-License Agreement.

      "TT&C" means telemetry, tracking and command.

                                 PROPRIETARY

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