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                                                                 EXHIBIT 10.40.2

                  SECOND AMENDED AND RESTATED PLEDGE AGREEMENT

         THIS SECOND AMENDED AND RESTATED PLEDGE AGREEMENT (this "Pledge
Agreement"), dated as of March 31, 2003, is by and among LORAL SPACE &
COMMUNICATIONS CORPORATION, a Delaware corporation (the "Pledgor"), and BANK OF
AMERICA, N.A., as collateral agent (in such capacity, the "Collateral Agent")
for the holders of the Secured Obligations referenced below.

                               W I T N E S S E T H

         WHEREAS, a $494 million credit facility has been established in favor
of Loral Satellite, Inc., a Delaware corporation (the "Company") pursuant to the
terms of the Credit Agreement dated as of November 17, 2000 (as amended from
time to time, the "Satellite Credit Agreement") among the Company, as borrower,
the lenders identified therein and Bank of America, N.A., as Administrative
Agent;

         WHEREAS, a $600 million credit facility has been established in favor
of Loral SpaceCom Corporation, a Delaware corporation ("SpaceCom"), pursuant to
the terms of the Amended and Restated Credit Agreement dated as of December 21,
2001 (as amended from time to time, the "SpaceCom Credit Agreement") among
SpaceCom, as borrower, the lenders identified therein and Bank of America, N.A.,
as Administrative Agent;

         WHEREAS, the Company has previously arranged for the Pledgor to provide
a pledge of and security interest in the Company's Capital Stock to secure the
loans and obligations owing under the Satellite Credit Agreement;

         WHEREAS, such pledge and security interest was previously granted to
Bank of America, N.A., as collateral agent for the several lenders from time to
time parties to the Satellite Credit Agreement, pursuant to the Amended and
Restated Pledge Agreement, dated as of November 17, 2000 (as amended from time
to time up to the date hereof, the "Existing Pledge Agreement") between the
Pledgor and Bank of America, N.A.;

         WHEREAS, SpaceCom has agreed to arrange for the Pledgor to provide a
pledge of and security interest in the Company's Capital Stock to secure the
loans and obligations owing under both the Satellite Credit Agreement and the
SpaceCom Credit Agreement on the terms and conditions set forth herein; and the
parties intend for this Pledge Agreement to be given in amendment to,
restatement of, and replacement for the Existing Pledge Agreement;

         NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

         1.       Definitions. Capitalized terms used and not otherwise defined
herein shall have the meanings provided in the Credit Agreement. In addition,
the following terms, which are defined in the UCC as in effect in the State of
New York on the date hereof, are used herein as so defined: Accession, Financial
Asset, Proceeds and Security. As used herein:

                  "Capital Stock" means any and all shares, interests,
         participations or other equivalents (however designated) of capital
         stock of a corporation, any and all equivalent ownership interests

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         in a Person (other than a corporation) and any and all warrants or
         options to purchase any of the foregoing.

                  "Collateral Documents" means the Pledge Agreement and any and
         all other security agreements, pledge agreements, deeds of trust,
         security deeds, mortgages or like instruments establishing or otherwise
         giving effect to the liens and security interests in the Pledged
         Collateral, including UCC financing statements and notice filings in
         respect of intellectual property, in each case as amended and modified.

                  "Credit Agreement" means the Satellite Credit Agreement, or if
         the Satellite Credit Agreement has expired or been terminated and all
         amounts owing thereunder paid in full, the SpaceCom Credit Agreement.

                  "Credit Documents" means the Satellite Credit Documents and
         the SpaceCom Credit Documents.

                  "Event of Default" has the meaning provided in Section 8
         hereof.

                  "Pledged Collateral" has the meaning provided in Section 2
         hereof.

                  "Pledged Shares" has the meaning provided in Section 2 hereof.

                  "Satellite Credit Documents" means (i) the Satellite Credit
         Agreement, the notes issued thereunder and the other credit documents
         referenced therein relating thereto, as amended, modified, extended or
         replaced, and (ii) the Collateral Documents.

                  "Satellite Creditors" means the holders of the Satellite
         Indebtedness.

                  "Satellite Indebtedness" means all of the following, whether
         now or hereafter outstanding or incurred: (i) the principal of and
         interest (including interest accruing after commencement of a
         proceeding in bankruptcy, reorganization or insolvency, whether or not
         allowable as a claim) on the loans and obligations, and all other
         amounts (including, without limitation, all fees, indemnities, charges,
         expenses and other monetary obligations), owing from time to time under
         the Satellite Credit Agreement or any of the other Satellite Credit
         Documents; (ii) the Pledgor's guaranty obligations in respect of the
         Satellite Credit Agreement and the other Satellite Credit Documents;
         and (iii) all renewals, extensions, refinancings, refundings,
         amendments and modifications of any of the foregoing Satellite
         Indebtedness, whether in whole or in part and the agreements governing
         such Satellite Indebtedness; provided, however, that under no
         circumstances shall the obligations owing under the Collateral
         Documents to the lenders and the administrative agent under the
         SpaceCom Credit Agreement be considered Satellite Indebtedness.

                  "Secured Obligations" means the Satellite Indebtedness and the
         SpaceCom Indebtedness.

                  "SpaceCom Credit Documents" means (i) the SpaceCom Credit
         Agreement, the notes issued thereunder and the other credit documents
         referenced therein relating thereto, as amended, modified, extended or
         replaced, (ii) the interest rate protection or foreign currency
         exchange agreements, the obligations under which constitute SpaceCom
         Indebtedness hereunder, and (iii) the Collateral Documents.

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                  "SpaceCom Indebtedness" means all of the following, whether
         now or hereafter outstanding or incurred: (i) the principal of and
         interest (including interest accruing after commencement of a
         proceeding in bankruptcy, reorganization or insolvency, whether or not
         allowable as a claim) on the loans and obligations, and all other
         amounts (including, without limitation, all reimbursement obligations,
         fees, indemnities, charges, expenses and other monetary obligations),
         owing from time to time under the SpaceCom Credit Agreement and the
         other SpaceCom Credit Documents; (ii) the obligations owing by
         SpaceCom, or a subsidiary or affiliate of SpaceCom, to any lender or
         affiliate of a lender under the SpaceCom Credit Agreement arising under
         any interest rate protection or foreign currency exchange agreement or
         any guaranty given in respect thereof; (iii) the Pledgor's guaranty
         obligations in respect of the SpaceCom Credit Agreement and the other
         SpaceCom Credit Documents; and (iv) all amendments, modifications,
         renewals, extensions, refinancings, refundings and restructurings of
         any of the foregoing SpaceCom Indebtedness, whether in whole or in
         part, and the agreements governing such SpaceCom Indebtedness;
         provided, however, that under no circumstances shall the obligations
         owing under the Collateral Documents to the lenders and the
         administrative agent under the Satellite Credit Agreement be considered
         SpaceCom Indebtedness.

                  "UCC" means the Uniform Commercial Code.

         2.       Pledge and Grant of Security Interest. To secure the prompt
payment and performance in full when due, whether by lapse of time,
acceleration, mandatory prepayment or otherwise, of the Secured Obligations, the
Pledgor hereby grants, pledges and assigns to the Collateral Agent, for the
benefit of the holders of the Secured Obligations, a continuing security
interest in, and a right to set-off against, any and all right, title and
interest of the Pledgor in and to the following, whether now owned or existing
or owned, acquired, or arising hereafter (collectively, the "Pledged
Collateral"):

                  (a)      Pledged Shares. One hundred percent (100%) of the
         issued and outstanding Capital Stock of the Company, all of which is
         owned by the Pledgor (as set forth on Schedule 2(a) attached hereto),
         together with the certificates (or other agreements or instruments), if
         any, representing such Capital Stock, and all options and other rights,
         contractual or otherwise, with respect thereto (collectively, together
         with the Capital Stock described in Section 2(b) below, the "Pledged
         Shares"), including, but not limited to, the following:

                           (A)      all shares, securities, membership interests
                  or other equity interests representing a dividend on any of
                  the Pledged Shares, or representing a distribution or return
                  of capital upon or in respect of the Pledged Shares, or
                  resulting from a stock split, revision, reclassification or
                  other exchange therefor, and any subscriptions, warrants,
                  rights or options issued to the holder of, or otherwise in
                  respect of, the Pledged Shares; and

                           (B)      without affecting the obligations of the
                  Pledgor under any provision prohibiting such action hereunder
                  or under the Credit Agreement, in the event of any
                  consolidation or merger involving the Company and in which the
                  Company is not the surviving entity, all Capital Stock of the
                  successor entity formed by or resulting from such
                  consolidation or merger.

                  (b)      Accessions and Proceeds. All Accessions and all
         Proceeds of any and all of the foregoing.

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         Without limiting the generality of the foregoing, it is hereby
specifically understood and agreed that the Pledgor may from time to time
hereafter deliver additional Capital Stock of the Company to the Collateral
Agent as collateral security for the Secured Obligations. Upon delivery to the
Collateral Agent, such additional Capital Stock shall be deemed to be part of
the Pledged Collateral of such Pledgor and shall be subject to the terms of this
Pledge Agreement whether or not Schedule 2(a) is amended to refer to such
additional Capital Stock.

         3.       Security for Secured Obligations. The security interest
created hereby in the Pledged Collateral constitutes continuing collateral
security for all of the Secured Obligations.

         4.       Delivery of the Pledged Collateral. The Pledgor hereby agrees
that:

                  (a)      The Pledgor shall deliver to the Collateral Agent (i)
         simultaneously with or prior to the execution and delivery of this
         Pledge Agreement, all certificates representing the Pledged Shares and
         (ii) promptly upon the receipt thereof by or on behalf of the Pledgor,
         all other certificates and instruments constituting Pledged Collateral.
         Prior to delivery to the Collateral Agent, all such certificates and
         instruments constituting Pledged Collateral shall be held in trust by
         the Pledgor for the benefit of the Collateral Agent pursuant hereto.
         All such certificates shall be delivered in suitable form for transfer
         by delivery or shall be accompanied by duly executed instruments of
         transfer or assignment in blank, substantially in the form provided in
         Schedule 4(a) attached hereto.

                  (b)      Additional Securities. If the Pledgor shall receive
         by virtue of its being or having been the owner of any Pledged
         Collateral, any (i) certificate, including without limitation, any
         certificate representing a dividend or distribution in connection with
         any increase or reduction of capital, reclassification, merger,
         consolidation, sale of assets, combination of shares or other equity
         interests, stock splits, spin-off or split-off, promissory notes or
         other instruments; (ii) option or right, whether as an addition to,
         substitution for, or an exchange for, any Pledged Collateral or
         otherwise; (iii) dividends payable in securities; or (iv) distributions
         of securities or other equity interests in connection with a partial or
         total liquidation, dissolution or reduction of capital, capital surplus
         or paid-in surplus, then the Pledgor shall receive such certificate,
         instrument, option, right or distribution in trust for the benefit of
         the Collateral Agent, shall segregate it from the Pledgor's other
         property and shall deliver it forthwith to the Collateral Agent in the
         exact form received together with any necessary endorsement and/or
         appropriate stock power duly executed in blank, substantially in the
         form provided in Schedule 4(a), to be held by the Collateral Agent as
         Pledged Collateral and as further collateral security for the Secured
         Obligations.

                  (c)      Financing Statements. The Pledgor shall execute and
         deliver to the Collateral Agent such UCC or other applicable financing
         statements as may be reasonably requested by the Collateral Agent in
         order to perfect and protect the security interest created hereby in
         the Pledged Collateral.

         5.       Representations and Warranties. The Pledgor hereby represents
and warrants to the Collateral Agent, for the benefit of the holders of the
Secured Obligations (other than any such obligations that, by their terms,
survive termination of the Credit Documents), that so long as any of the Secured
Obligations remains outstanding and until all of the commitments relating
thereto have been terminated:

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                  (a)      Authorization of Pledged Shares. The Pledged Shares
         are duly authorized and validly issued, are fully paid and, with
         respect to any Pledged Shares consisting of stock of a corporation,
         nonassessable.

                  (b)      Title. The Pledgor has good and indefeasible title to
         the Pledged Collateral and will at all times be the legal and
         beneficial owner of such Pledged Collateral free and clear of any Lien,
         other than Permitted Liens. There exists no "adverse claim" within the
         meaning of Section 8-102 of the UCC with respect to the Pledged Shares.

                  (c)      Exercising of Rights. The exercise by the Collateral
         Agent of its rights and remedies hereunder will not violate any law or
         governmental regulation or any material contractual restriction binding
         on or affecting the Pledgor or any of its property (except as may be
         required under state, federal or foreign communications laws).

                  (d)      Pledgor's Authority. No authorization, approval or
         action by, and no notice or filing with any Governmental Authority or
         with the issuer of any Pledged Stock is required either (i) for the
         pledge made by the Pledgor or for the granting of the security interest
         by the Pledgor pursuant to this Pledge Agreement (except as have been
         already obtained) or (ii) for the exercise by the Collateral Agent or
         the holders of the Secured Obligations of their rights and remedies
         hereunder (except as may be required under state, federal or foreign
         communications laws).

                  (e)      Security Interest/Priority. This Pledge Agreement
         creates a valid security interest in favor of the Collateral Agent, for
         the benefit of the holders of the Secured Obligations, in the Pledged
         Collateral. The taking of possession by the Collateral Agent of the
         certificates, if any, representing the Pledged Shares and all other
         certificates and instruments constituting Pledged Collateral will
         perfect and establish the first priority of the Collateral Agent's
         security interest in the Pledged Shares and, when properly perfected by
         filing or registration, in all other Pledged Collateral represented by
         such Pledged Shares and instruments securing the Secured Obligations.
         Except as set forth in this Section 5(e), no action is necessary to
         perfect or otherwise protect such security interest.

                  (f)      Partnership and Membership Interests. Except as
         disclosed to the Collateral Agent, none of the Pledged Shares
         consisting of partnership or limited liability company interests (i) is
         dealt in or traded on a securities exchange or in a securities market,
         (ii) by its terms expressly provides that it is a security governed by
         Article 8 of the UCC, (iii) is an investment company security, (iv) is
         held in a securities account or (v) constitutes a Security or a
         Financial Asset.

                  (g)      No Other Interests. As of the date hereof, the
         Pledgor does not own any Capital Stock of the Company other than as set
         forth on Schedule 2(a) attached hereto, and the Pledged Shares
         represent 100% of the issued and outstanding Capital Stock of the
         Company.

         6.       Covenants. The Pledgor hereby covenants, that so long as any
of the Secured Obligations (other than any such obligations that, by their
terms, survive termination of the Credit Documents) remains outstanding and
until all of the commitments relating thereto have been terminated, the Pledgor
shall:

                  (a)      Defense of Title. Warrant and defend title to and
         ownership of the Pledged Collateral at its own expense against the
         claims and demands of all other parties claiming an interest therein,
         keep the Pledged Collateral free from all Liens, except for Liens
         permitted under

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         the Credit Agreement, and not sell, exchange, transfer, assign, lease
         or otherwise dispose of Pledged Collateral or any interest therein,
         except as permitted under the Credit Agreement and the other Credit
         Documents.

                  (b)      Further Assurances. Promptly execute and deliver at
         its expense all further instruments and documents and take all further
         action that may be necessary and desirable or that the Collateral Agent
         may reasonably request in order to (i) perfect and protect the security
         interest created hereby in the Pledged Collateral (including, without
         limitation, any and all action necessary to satisfy the Collateral
         Agent that the Collateral Agent has obtained a first priority perfected
         security interest in all Pledged Collateral); (ii) enable the
         Collateral Agent to exercise and enforce its rights and remedies
         hereunder in respect of the Pledged Collateral; and (iii) otherwise
         effect the purposes of this Pledge Agreement, including, without
         limitation and if requested by the Collateral Agent, delivering to the
         Collateral Agent irrevocable proxies in respect of the Pledged
         Collateral.

                  (c)      Amendments. Not make or consent to any amendment or
other modification or waiver with respect to any of the Pledged Collateral or
enter into any agreement or allow to exist any restriction with respect to any
of the Pledged Collateral other than pursuant hereto or as may be permitted
under the Credit Agreement.

         7.       Advances by Holders of the Secured Obligations. On failure of
the Pledgor to perform any of the covenants and agreements contained herein, the
Collateral Agent may, at its sole option and in its reasonable discretion,
perform the same (provided that the Collateral Agent shall promptly give the
Borrower notice of such performance after the fact) and in so doing may expend
such sums as the Collateral Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse claim and all
other expenditures which the Collateral Agent or the holders of the Secured
Obligations may make for the protection of the security hereof or which may be
compelled to make by operation of law. All such sums and amounts so expended
shall be repayable by the Pledgor promptly upon timely notice thereof and demand
therefor, shall constitute additional Secured Obligations and shall bear
interest from the date said amounts are expended at the default rate specified
in the Credit Agreement for Revolving Loans that are ABR Loans (or, in the case
of the SpaceCom Credit Agreement, Revolving Credit Loans that are Base Rate
Loans). No such performance of any covenant or agreement by the Collateral Agent
or the holders of the Secured Obligations on behalf of the Pledgor, and no such
advance or expenditure therefor, shall relieve the Pledgor of any default under
the terms of this Pledge Agreement, the other Credit Documents or any other
documents relating to the Secured Obligations. The holders of the Secured
Obligations may make any payment hereby authorized in accordance with any bill,
statement or estimate procured from the appropriate public office or holder of
the claim to be discharged without inquiry into the accuracy of such bill,
statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien, title or claim except to the extent such payment is being
contested in good faith by the Pledgor in appropriate proceedings and against
which adequate reserves are being maintained in accordance with GAAP.

         8.       Events of Default. The occurrence of an event which would
constitute an Event of Default under the Credit Agreement shall be an event of
default hereunder (an "Event of Default").

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         9.       Remedies.

                  (a)      General Remedies. Upon the occurrence of an Event of
         Default and during the continuance thereof, the Collateral Agent and
         the holders of the Secured Obligations shall have, in respect of the
         Pledged Collateral, in addition to the rights and remedies provided
         herein, in the Credit Documents, in any other documents relating to the
         Secured Obligations, or by law (including, without limitation, levy of
         attachment and garnishment), the rights and remedies of a secured party
         under the UCC of the jurisdiction applicable to the affected Pledged
         Collateral.

                  (b)      Sale of Pledged Collateral. Upon the occurrence of an
         Event of Default and during the continuance thereof, without limiting
         the generality of this Section 9 and without notice, the Collateral
         Agent may, in its sole discretion, sell or otherwise dispose of or
         realize upon the Pledged Collateral, or any part thereof, in one or
         more parcels, at public or private sale, at any exchange or broker's
         board or elsewhere, at such price or prices and on such other terms as
         the Collateral Agent may deem commercially reasonable, for cash, credit
         or for future delivery or otherwise in accordance with applicable law.
         To the extent permitted by law, any holder of the Secured Obligations
         may in such event, bid for the purchase of such securities. The Pledgor
         agrees that, to the extent notice of sale shall be required by law and
         has not been waived by the Pledgor, any requirement of reasonable
         notice shall be met if notice, specifying the place of any public sale
         or the time after which any private sale is to be made, is personally
         served on or mailed, postage prepaid, to the Pledgor, in accordance
         with the notice provisions of the Credit Agreement at least ten days
         before the time of such sale. The Collateral Agent shall not be
         obligated to make any sale of Pledged Collateral regardless of notice
         of sale having been given. The Collateral Agent may adjourn any public
         or private sale from time to time by announcement at the time and place
         fixed therefor, and such sale may, without further notice, be made at
         the time and place to which it was so adjourned.

                  (c)      Private Sale. Upon the occurrence of an Event of
         Default and during the continuance thereof, the Pledgor recognizes that
         the Collateral Agent may deem it impracticable to effect a public sale
         of all or any part of the Pledged Shares or any of the securities
         constituting Pledged Collateral and that the Collateral Agent may,
         therefore, determine to make one or more private sales of any such
         Pledged Collateral to a restricted group of purchasers who will be
         obligated to agree, among other things, to acquire such Pledged
         Collateral for their own account, for investment and not with a view to
         the distribution or resale thereof. The Pledgor acknowledges that any
         such private sale may be at prices and on terms less favorable to the
         seller than the prices and other terms which might have been obtained
         at a public sale and, notwithstanding the foregoing, agrees that such
         private sale shall be deemed to have been made in a commercially
         reasonable manner and that the Collateral Agent shall have no
         obligation to delay sale of any such Pledged Collateral for the period
         of time necessary to permit the issuer of such Pledged Collateral to
         register such Pledged Collateral for public sale under the Securities
         Act of 1933. The Pledgor further acknowledges and agrees that any offer
         to sell such Pledged Collateral which has been (i) publicly advertised
         on a bona fide basis in a newspaper or other publication of general
         circulation in the financial community of New York, New York (to the
         extent that such offer may be advertised without prior registration
         under the Securities Act of 1933), or (ii) made privately in the manner
         described above shall be deemed to involve a "public sale" under the
         UCC, notwithstanding that such sale may not constitute a "public
         offering" under the Securities Act of 1933, and the Collateral Agent
         may, in such event, bid for the purchase of such Pledged Collateral.

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                  (d)      Retention of Pledged Collateral. To the extent
         permitted under applicable law, in addition to the rights and remedies
         hereunder, upon the occurrence of an Event of Default, the Collateral
         Agent may, after providing the notices required by Sections 9-620 and
         9-621 of the UCC or otherwise complying with the requirements of
         applicable law of the relevant jurisdiction, accept or retain all or
         any portion of the Pledged Collateral in satisfaction of the Secured
         Obligations. Unless and until the Collateral Agent shall have provided
         such notices, however, the Collateral Agent shall not be deemed to have
         accepted or retained any Pledged Collateral in satisfaction of any
         Secured Obligations for any reason.

                  (e)      Deficiency. In the event that the proceeds of any
         sale, collection or realization are insufficient to pay all amounts to
         which the Collateral Agent or the holders of the Secured Obligations
         are legally entitled, the Pledgor shall be liable for the deficiency,
         together with interest thereon at the default rate specified in the
         Credit Agreement for Revolving Loans that are ABR Loans (or, in the
         case of the SpaceCom Credit Agreement, Revolving Credit Loans that are
         Base Rate Loans), together with the costs of collection and reasonable
         fees of attorneys employed by the Collateral Agent to collect such
         deficiency. Any surplus remaining after the full payment and
         satisfaction of the Secured Obligations shall be returned to the
         Pledgor or to whomsoever a court of competent jurisdiction shall
         determine to be entitled thereto.

         10.      Rights of the Collateral Agent.

                  (a)      Power of Attorney. In addition to other powers of
         attorney contained herein, the Pledgor hereby designates and appoints
         the Collateral Agent, on behalf of the holders of the Secured
         Obligations, and each of its designees or agents, as attorney-in-fact
         of the Pledgor, irrevocably and with power of substitution, with
         authority to take any or all of the following actions upon the
         occurrence and during the continuance of an Event of Default:

                           (i)      to demand, collect, settle, compromise and
                  adjust, and give discharges and releases concerning the
                  Pledged Collateral, all as the Collateral Agent may reasonably
                  deem appropriate;

                           (ii)     to commence and prosecute any actions at any
                  court for the purposes of collecting any of the Pledged
                  Collateral and enforcing any other right in respect thereof;

                           (iii)    to defend, settle or compromise any action
                  brought and, in connection therewith, give such discharge or
                  release as the Collateral Agent may reasonably deem
                  appropriate;

                           (iv)     to pay or discharge taxes, liens, security
                  interests or other encumbrances levied or placed on or
                  threatened against the Pledged Collateral;

                           (v)      to direct any parties liable for any payment
                  in connection with any of the Pledged Collateral to make
                  payment of any and all monies due and to become due thereunder
                  directly to the Collateral Agent or as the Collateral Agent
                  shall direct;

                           (vi)     to receive payment of and receipt for any
                  and all monies, claims, and other amounts due and to become
                  due at any time in respect of or arising out of any Pledged
                  Collateral;

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                           (vii)    to sign and endorse any drafts, assignments,
                  proxies, stock powers, verifications, notices and other
                  documents relating to the Pledged Collateral;

                           (viii)   to execute and deliver all assignments,
                  conveyances, statements, financing statements, renewal
                  financing statements, security and pledge agreements,
                  affidavits, notices and other agreements, instruments and
                  documents that the Collateral Agent may reasonably deem
                  appropriate in order to perfect and maintain the security
                  interests and liens granted in this Pledge Agreement and in
                  order to fully consummate all of the transactions contemplated
                  therein;

                           (ix)     to exchange any of the Pledged Collateral or
                  other property upon any merger, consolidation, reorganization,
                  recapitalization or other readjustment of the issuer thereof
                  and, in connection therewith, deposit any of the Pledged
                  Collateral with any committee, depository, transfer agent,
                  registrar or other designated agency upon such terms as the
                  Collateral Agent may reasonably deem appropriate;

                           (x)      to vote for a shareholder or member
                  resolution, or to sign an instrument in writing, sanctioning
                  the transfer of any or all of the Pledged Collateral into the
                  name of the Collateral Agent or one or more of the holders of
                  the Secured Obligations or into the name of any transferee to
                  whom the Pledged Collateral or any part thereof may be sold
                  pursuant to Section 9 hereof; and

                           (xi)     to do and perform all such other acts and
                  things as the Collateral Agent may reasonably deem appropriate
                  or convenient in connection with the Pledged Collateral.

                  This power of attorney is a power coupled with an interest and
         shall be irrevocable for so long as any of the Secured Obligations
         (other than any such obligations that by their terms, survive
         termination of the Credit Documents) shall remain outstanding and until
         all of the commitments relating thereto shall have been terminated. The
         Collateral Agent shall be under no duty to exercise or withhold the
         exercise of any of the rights, powers, privileges and options expressly
         or implicitly granted to the Collateral Agent in this Pledge Agreement,
         and shall not be liable for any failure to do so or any delay in doing
         so. The Collateral Agent shall not be liable for any act or omission or
         for any error of judgment or any mistake of fact or law in its
         individual capacity or its capacity as attorney-in-fact except acts or
         omissions resulting from its gross negligence or willful misconduct.
         This power of attorney is conferred on the Collateral Agent solely to
         protect, preserve and realize upon its security interest in the Pledged
         Collateral.

                  (b)      Performance by the Collateral Agent of Obligations.
         If the Pledgor fails to perform any agreement or obligation contained
         herein, the Collateral Agent itself may perform, or cause performance
         of, such agreement or obligation, and the expenses of the Collateral
         Agent incurred in connection therewith shall be payable by the Pledgor.

                  (c)      The Collateral Agent's Duty of Care. Other than the
         exercise of reasonable care to assure the safe custody of the Pledged
         Collateral while being held by the Collateral Agent hereunder, the
         Collateral Agent shall have no duty or liability to preserve rights
         pertaining thereto, it being understood and agreed that the Pledgor
         shall be responsible for preservation of all rights in the Pledged
         Collateral, and the Collateral Agent shall be relieved of all
         responsibility for the Pledged Collateral upon surrendering it or
         tendering the surrender of it to the Pledgor.

                                       9

<PAGE>

         The Collateral Agent shall be deemed to have exercised reasonable care
         in the custody and preservation of the Pledged Collateral in its
         possession if such Pledged Collateral is accorded treatment
         substantially equal to that which the Collateral Agent accords its own
         property, which shall be no less than the treatment employed by a
         reasonable and prudent agent in the industry, it being understood that
         the Collateral Agent shall not have responsibility for (i) ascertaining
         or taking action with respect to calls, conversions, exchanges,
         maturities, tenders or other matters relating to any Pledged
         Collateral, whether or not the Collateral Agent has or is deemed to
         have knowledge of such matters, or (ii) taking any necessary steps to
         preserve rights against any parties with respect to any of the Pledged
         Collateral.

                  (d)      Voting Rights in Respect of the Pledged Collateral.

                           (i)      So long as no Event of Default shall have
                  occurred and be continuing, to the extent permitted by law,
                  the Pledgor may exercise any and all voting and other
                  consensual rights pertaining to the Pledged Collateral or any
                  part thereof for any purpose not in violation of the terms of
                  this Pledge Agreement or the Credit Agreement; and

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default, all rights of the Pledgor
                  to exercise the voting and other consensual rights which it
                  would otherwise be entitled to exercise pursuant to paragraph
                  (i) of this subsection shall cease and all such rights shall
                  thereupon become vested in the Collateral Agent which shall
                  then have the sole right to exercise such voting and other
                  consensual rights.

                  (e)      Dividend Rights in Respect of the Pledged Collateral.

                           (i)      So long as no Event of Default shall have
                  occurred and be continuing and subject to Section 4(b) hereof,
                  the Pledgor may receive and retain any and all dividends
                  (other than stock dividends and other dividends constituting
                  Pledged Collateral addressed hereinabove), distributions or
                  interest paid in respect of the Pledged Collateral to the
                  extent they are allowed under the Credit Agreement.

                           (ii)     Upon the occurrence and during the
                  continuance of an Event of Default:

                                    (A)      all rights of the Pledgor to
                           receive the dividends, distributions and interest
                           payments which it would otherwise be authorized to
                           receive and retain pursuant to paragraph (i) of this
                           subsection shall cease and all such rights shall
                           thereupon be vested in the Collateral Agent, which
                           shall then have the sole right to receive and hold as
                           Pledged Collateral such dividends, distributions and
                           interest payments; and

                                    (B)      all dividends, distributions and
                           interest payments which are received by the Pledgor
                           contrary to the provisions of paragraph (A) of this
                           subsection shall be received in trust for the benefit
                           of the Collateral Agent, shall be segregated from
                           other property or funds of the Pledgor, and shall be
                           forthwith paid over to the Collateral Agent as
                           Pledged Collateral in the exact form received, to be
                           held by the Collateral Agent as Pledged Collateral
                           and as further collateral security for the Secured
                           Obligations.

                                       10

<PAGE>

                  (f)      Release of Pledged Collateral. The Collateral Agent
         may release any of the Pledged Collateral from this Pledge Agreement or
         may substitute any of the Pledged Collateral for other Pledged
         Collateral to the extent permitted under, and on the terms and
         conditions set forth in, the Credit Agreement, and such release or
         substitution shall not alter, vary or diminish in any way the force,
         effect, lien, pledge or security interest of this Pledge Agreement as
         to any Pledged Collateral not expressly released or substituted, and
         this Pledge Agreement shall continue as a first priority lien (subject
         to Liens permitted under the Credit Agreement) on all Pledged
         Collateral not expressly released or substituted.

                  (g)      Conflicts. If there is any conflict between this
         Pledge Agreement and the Collateral Agency Agreement (as defined in the
         Satellite Credit Agreement) regarding the actions to be taken by the
         Collateral Agent with respect to the Pledged Collateral, the provisions
         of this Pledge Agreement shall govern.

         11.      Rights of Majority Lenders. All rights of the Collateral Agent
hereunder, if not exercised by the Collateral Agent, may be exercised by the
Majority Lenders.

         12.      Application of Proceeds. Upon the occurrence and during the
continuance of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Pledged Collateral, when received by the
Collateral Agent or any of the holders of the Secured Obligations in cash or its
equivalent, will be applied in reduction of the Secured Obligations in the order
set forth in the Credit Agreement or other document relating to the Secured
Obligations, and the Pledgor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Collateral Agent shall have the continuing and exclusive right to apply and
reapply any and all such payments and proceeds in the Collateral Agent's sole
discretion, notwithstanding any entry to the contrary upon any of its books and
records.

         13.      Costs of Counsel. At all times hereafter, the Pledgor agrees
to promptly pay upon demand any and all reasonable costs and expenses
(including, without limitation, reasonable attorneys' fees) of the Collateral
Agent and the holders of the Secured Obligations (a) as required under the
Credit Agreement and (b) as necessary to protect the Pledged Collateral or to
exercise any rights or remedies under this Pledge Agreement or with respect to
any of the Pledged Collateral. All of the foregoing costs and expenses shall
constitute Secured Obligations hereunder.

         14.      Continuing Agreement.

                  (a)      This Pledge Agreement shall be a continuing agreement
         in every respect and shall remain in full force and effect so long as
         any of the Secured Obligations (other than any such obligations that,
         by their terms, survive termination of the Credit Documents) remains
         outstanding and until all of the commitments relating thereto have been
         terminated. Upon such payment and termination, this Pledge Agreement
         shall be automatically terminated and the Collateral Agent and the
         holders of the Secured Obligations shall, upon the request and at the
         expense of the Pledgor, (i) return all certificates and instruments
         representing the Pledged Collateral and all instruments of transfer or
         assignment delivered to the Collateral Agent pursuant to this Pledge
         Agreement, and (ii) forthwith release all of its liens and security
         interests hereunder and shall execute and deliver all UCC termination
         statements and/or other documents reasonably requested by the Pledgor
         evidencing such termination. Notwithstanding the foregoing, all
         releases and indemnities provided hereunder shall survive termination
         of this Pledge Agreement.

                                       11

<PAGE>

                  (b)      This Pledge Agreement shall continue to be effective
         or be automatically reinstated, as the case may be, if at any time
         payment, in whole or in part, of any of the Secured Obligations is
         rescinded or must otherwise be restored or returned by the Collateral
         Agent or any holder of the Secured Obligations as a preference,
         fraudulent conveyance or otherwise under any bankruptcy, insolvency or
         similar law, all as though such payment had not been made; provided
         that in the event payment of all or any part of the Secured Obligations
         is rescinded or must be restored or returned, all reasonable costs and
         expenses (including, without limitation, reasonable attorneys' fees and
         disbursements) incurred by the Collateral Agent or any holder of the
         Secured Obligations in defending and enforcing such reinstatement shall
         be deemed to be included as a part of the Secured Obligations.

         15.      Amendments and Waivers. This Pledge Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in the Credit Agreement.

         16.      Successors in Interest. This Pledge Agreement shall create a
continuing security interest in the Pledged Collateral and shall be binding upon
each the Pledgor, its successors and assigns, and shall inure, together with the
rights and remedies of the Collateral Agent and the holders of the Secured
Obligations hereunder, to the benefit of the Collateral Agent and the holders of
the Secured Obligations and their successors and permitted assigns; provided,
however, that the Pledgor may not assign its rights or delegate its duties
hereunder without the prior written consent of the requisite Lenders under the
Credit Agreement. To the fullest extent permitted by law, the Pledgor hereby
releases the Collateral Agent and each holder of the Secured Obligations, and
their respective successors and assigns, and any party acting as attorney for
the Collateral Agent or the holders of the Secured Obligations, from any
liability for any act or omission or for any error of judgment or mistake of
fact or law relating to this Pledge Agreement or the Collateral, except for any
liability arising from the gross negligence or willful misconduct of the
Collateral Agent or such holder, or their respective officers, employees or
agents.

         17.      Notices. All notices required or permitted to be given under
this Pledge Agreement shall be given as provided in the Credit Agreement.

         18.      Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which where so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Pledge Agreement to produce or
account for more than one such counterpart.

         19.      Headings. The headings of the sections and subsections hereof
are provided for convenience only and shall not in any way affect the meaning or
construction of any provision of this Pledge Agreement.

         20.      Governing Law; Submission to Jurisdiction; Venue.

                  (a)      THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
         OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
         INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any
         legal action or proceeding with respect to this Pledge Agreement may be
         brought in the state or federal courts located in New York, New York,
         and, by execution and delivery of this Pledge Agreement, the Pledgor
         hereby irrevocably accepts for itself and in respect of its property,
         generally and unconditionally, the jurisdiction of such courts. The
         Pledgor further irrevocably consents to the service of process out of
         any of the aforementioned courts in any such action or

                                       12

<PAGE>

         proceeding by the mailing of copies thereof by registered or certified
         mail, postage prepaid, to it at the address for notices pursuant to the
         terms of the Credit Agreement, such service to become effective three
         days after such mailing. Nothing herein shall affect the right of the
         Collateral Agent to serve process in any other manner permitted by law
         or to commence legal proceedings or to otherwise proceed against the
         Pledgor in any other jurisdiction.

                  (b)      The Pledgor hereby irrevocably waives any objection
         which it may now or hereafter have to the laying of venue of any of the
         aforesaid actions or proceedings arising out of or in connection with
         this Pledge Agreement brought in the courts referred to in subsection
         (a) hereof and hereby further irrevocably waives and agrees not to
         plead or claim in any such court that any such action or proceeding
         brought in any such court has been brought in an inconvenient forum.

         21.      Waiver of Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES TO THIS PLEDGE AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF
OR RELATING TO THIS PLEDGE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

         22.      Severability. If any provision of this Pledge Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.

         23.      Entirety. This Pledge Agreement, the other Credit Documents
and the other documents relating to the Secured Obligations represent the entire
agreement of the parties hereto and thereto, and supersede all prior agreements
and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, any other documents relating to
the Secured Obligations, or the transactions contemplated herein and therein.

         24.      Survival. All representations and warranties of the Pledgor
hereunder shall survive the execution and delivery of this Pledge Agreement, the
other Credit Documents and the other documents relating to the Secured
Obligations, the delivery of the Notes and the extension of credit thereunder or
in connection therewith.

         25.      Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the Pledged
Collateral (including, without limitation, real and other personal property
owned by the Pledgor), or by a guarantee, endorsement or property of any other
Person, then the Collateral Agent shall have the right to proceed against such
other property, guarantee or endorsement upon the occurrence of any Event of
Default, and the Collateral Agent shall have the right, in its sole discretion,
to determine which rights, security, liens, security interests or remedies the
Collateral Agent shall at any time pursue, relinquish, subordinate, modify or
take with respect thereto, without in any way modifying or affecting any of them
or the Secured Obligations or any of the rights of the Collateral Agent or the
holders of the Secured Obligations under this Pledge Agreement, under any of the
other Credit Documents or under any other document relating to the Secured
Obligations.

         26.      [Intentionally Omitted].

         27.      Regulatory Approvals.

                                       13

<PAGE>

                  (a)      Any provision contained herein to the contrary
         notwithstanding, except for the security interests expressly granted
         herein or therein or upon the exercise by the Collateral Agent or the
         Administrative Agent of rights and remedies in accordance herewith or
         therewith and pursuant to clause (b), below, upon the occurrence and
         continuation of an Event of Default, this Agreement, the Loan Documents
         and the transactions contemplated hereby and thereby (i) do not and
         will not constitute, create, or have the effect of constituting or
         creating, directly or indirectly, actual or practical ownership of any
         Loan Parties by the holders of the Secured Obligations, or control,
         affirmative or negative, direct or indirect, by the holders of the
         Secured Obligations over the management or any other aspect of the
         operation of any Loan Party, which ownership and control remain
         exclusively and at all times in such Loan Party or Loral, as the case
         may be, and (ii) do not and will not constitute the transfer,
         assignment, or disposition in any manner, voluntarily or involuntarily,
         directly or indirectly, of any license, permit, certificate or
         authorization at any time issued to any Loan Party by the Federal
         Communications Commission (the "FCC"), any other federal, state or
         local regulatory or governmental bodies applicable to or having
         jurisdiction over the Pledgor or any Governmental Authority, or the
         transfer of control of any such Loan Party within the meaning of the
         Federal Communications Act of 1934, as amended, and the respective
         rules and regulations thereunder and thereof, any other federal or
         state laws, rules and regulations of other operating municipality
         regulatory or governmental bodies applicable to or having jurisdiction
         over the Pledgor as well as pursuant to the terms of any franchise,
         license or similar operating right held by the Pledgor.

                  (b)      Any provision contained herein to the contrary
         notwithstanding, no action, including any foreclosure on, sale,
         transfer or other disposition of, or the exercise of any right to vote
         or consent, shall be taken hereunder by the Collateral Agent with
         respect to any items of the Pledged Collateral unless and until all
         applicable requirements (if any) of the FCC under the Federal
         Communications Act of 1934, as amended, and the respective rules and
         regulations thereunder and thereof, as well as any other federal or
         state laws, rules and regulations of other operating municipality
         regulatory or governmental bodies applicable to or having jurisdiction
         over the Pledgor, have been satisfied with respect to such action and
         there have been obtained such consents, approvals and authorizations
         (if any) as may be required to be obtained from the FCC, any operating
         municipality and any other Governmental Authority under the terms of
         any franchise, license or similar operating right held by the Pledgor.
         It is the intention of the parties hereto that the Liens in favor of
         the Collateral Agent on the Pledged Collateral shall in all relevant
         aspects be subject to and governed by said statutes, rules and
         regulations as well as the terms of any franchise, license or similar
         operating right held by the Pledgor and that nothing in this Agreement
         shall be construed to diminish the control exercised by the Pledgor
         except in accordance with the provisions of such statutory requirements
         and rules and regulations as well as the terms of any franchise,
         license or similar operating right held by the Pledgor and the
         obtaining in advance of any necessary consents, approvals or
         authorizations pursuant thereto. The Pledgor agrees that upon request
         by the Collateral Agent from time to time after the occurrence and
         during the continuance of an Event of Default it will use its
         reasonable best efforts to obtain any governmental, regulatory or third
         party consents, approvals or authorizations referred to in this Section
         27.

         28.      Consent to Amendment and Restatement. The parties hereto
acknowledge and agree that this Pledge Agreement is given in amendment to,
restatement of and substitution for the Existing Pledge Agreement.

                                       14

<PAGE>

         29.      Acknowledgement of the Company. The Company by its signature
below hereby agrees, for the benefit of the Collateral Agent, (i) to be bound by
the terms of this Pledge Agreement and will comply with such terms insofar as
such terms are applicable to the undersigned and (ii) to notify the Collateral
Agent promptly in writing of the occurrence of any of the events described in
Section 4(b).

                  [remainder of page intentionally left blank]

                                       15

<PAGE>

         Each of the parties hereto has caused a counterpart of this Pledge
Agreement to be duly executed and delivered as of the date first above written.

         PLEDGOR:                      LORAL SPACE & COMMUNICATIONS
                                       CORPORATION, a Delaware corporation

                                       By: _______________________________
                                       Name:
                                       Title:

Accepted and agreed to as of the date first above written.

BANK OF AMERICA, N.A.,
as Collateral Agent

By: ________________________________
Name:
Title:

LORAL SATELLITE, INC.

By: ________________________________
Name:
Title:

<PAGE>

                                    SCHEDULES

Schedule 2(a)              Pledged Stock
Schedule 4(a)              Form of Stock Power

<PAGE>

                                  Schedule 2(a)

                                       to

                  Second Amended and Restated Pledge Agreement

                           dated as of March 31, 2003

                        in favor of Bank of America, N.A.

                               as Collateral Agent

                                  PLEDGED STOCK

<TABLE>
<CAPTION>
                                                                     Number of        Certificate     Percentage
Pledgor                                          Issuer                Shares            Number       Ownership
-------                                          ------                ------            ------       ---------
<S>                                      <C>                     <C>                  <C>             <C>
Loral Space & Communications             Loral Satellite, Inc.   100 (par value            1             100%
Corporation                                                      $0.01 per share)
</TABLE>

<PAGE>

                                  Schedule 4(a)

                                       to

                  Second Amended and Restated Pledge Agreement

                           dated as of March 31, 2003

                        in favor of Bank of America, N.A.

                               as Collateral Agent

                             Irrevocable Stock Power

   FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to

the following shares of capital stock of ____________________[ISSUER],
a ____________ corporation:

         No. of Shares                               Certificate No.

and irrevocably appoints __________________________________ its agent and
attorney-in-fact to transfer all or any part of such capital stock and to take
all necessary and appropriate action to effect any such transfer. The agent and
attorney-in-fact may substitute and appoint one or more persons to act for him.
The effectiveness of a transfer pursuant to this stock power shall be subject to
any and all transfer restrictions referenced on the face of the certificates
evidencing such interest or in the certificate of incorporation or bylaws of the
subject corporation, to the extent they may from time to time exist.

                                     [HOLDER]

                                     By: ____________________________
                                     Name:
                                     Title:<PAGE>

                                                                 EXHIBIT 10.41.2

                SECOND INTERCREDITOR AND SUBORDINATION AGREEMENT

                  THIS SECOND INTERCREDITOR AND SUBORDINATION AGREEEMENT dated
         as of March 31, 2003 (the "Intercreditor Agreement" or this
         "Agreement") is by and among

                  BANK OF AMERICA, N.A., as administrative agent for the Lenders
         under the Senior Credit Agreement and the other Senior Creditors (in
         such capacity, the "Senior Administrative Agent");

                  BANK OF AMERICA, N.A., as administrative agent for the Lenders
         under the Junior Credit Agreement and the other Junior Creditors (in
         such capacity, the "Junior Administrative Agent");

                  BANK OF AMERICA, N.A., as collateral agent for the Senior
         Creditors and the Junior Creditors (in such capacity, the "Collateral
         Agent"); and

                  LORAL SPACE & COMMUNICATIONS CORPORATION, a Delaware
         corporation (the "Pledgor").

                               W I T N E S S E T H

         WHEREAS, a $494 million credit facility has been established in favor
of Loral Satellite, Inc., a Delaware corporation ("Satellite") pursuant to the
terms of that Credit Agreement dated as of November 17, 2000 (as amended from
time to time, the "Senior Credit Agreement") among Satellite, as borrower, the
lenders identified therein and Bank of America, N.A., as Administrative Agent;

         WHEREAS, a $600 million credit facility has been established in favor
of Loral SpaceCom Corporation, a Delaware corporation ("SpaceCom") pursuant to
the terms of that Amended and Restated Credit Agreement dated as of December 21,
2001 (as amended from time to time, the "Junior Credit Agreement") among
SpaceCom, as borrower, the lenders identified therein and Bank of America, N.A.,
as Administrative Agent;

         WHEREAS, Satellite has previously arranged for the Pledgor to provide a
pledge of and security interest in Satellite's Capital Stock to secure the loans
and obligations owing under the Senior Credit Agreement, pursuant to the Amended
and Restated Pledge Agreement, dated as of November 17, 2000 (as amended from
time to time up to the date hereof, the "Existing Pledge Agreement") between the
Pledgor and the Collateral Agent;

         WHEREAS, SpaceCom has agreed to arrange for the Pledgor to provide a
pledge of and security interest in Satellite's Capital Stock to secure both the
loans and obligations owing under the Senior Credit Agreement and the loans and
obligations under the Junior Credit Agreement, pursuant to the Second Amended
and Restated Pledge Agreement, dated as of March 31, 2003 (which amends and
restates the Existing Pledge Agreement; as further amended from time to time,
the "New Pledge Agreement") between the Pledgor and the Collateral Agent, such
pledge

<PAGE>

and security interest to secure, first, the loans and obligations owing under
the Senior Credit Agreement and, second, the loans and obligations owing under
the Junior Credit Agreement, as hereafter described;

         NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency is hereby acknowledged, the
parties agree as follows:

         SECTION 1         Definitions.

         1.1      Definitions. Terms used but not otherwise defined herein shall
have the meanings provided in the Senior Credit Agreement. As used herein:

         "Bankruptcy Event" means, with respect to any Credit Party, any
voluntary or involuntary dissolution, winding-up, total or partial liquidation
or reorganization, or bankruptcy, insolvency, receivership or other statutory or
common law proceeding or arrangement involving such Credit Party or the
readjustment of its liabilities or any assignment for the benefit of creditors
or any marshalling of assets or liabilities.

         "Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.

         "Collateral" means any and all collateral interests in the Pledged
Collateral.

         "Collateral Documents" means the New Pledge Agreement and any and all
other security agreements, pledge agreements, deeds of trust, security deeds,
mortgages or like instruments establishing or otherwise giving effect to the
liens and security interests in the Collateral, including UCC financing
statements, in each case as amended and modified.

         "Credit Documents" means the Senior Credit Documents and the Junior
Credit Documents.

         "Credit Parties" means, collectively, the Pledgor, Satellite, SpaceCom,
Loral and the other guarantors and/or grantors under the Senior Credit
Documents.

         "First Tier Indebtedness" means all of the following, whether now or
hereafter outstanding or incurred: (i) the principal of and interest (including
interest accruing after commencement of a proceeding in bankruptcy,
reorganization or insolvency, whether or not allowable as a claim) on the loans
and obligations, and all other amounts (including, without limitation, all fees,
indemnities, charges, expenses and other monetary obligations), owing from time
to time by the Credit Parties under the Senior Credit Agreement and the other
Senior Credit Documents; (ii) the guaranty obligations of the guarantors under
the Senior Credit Agreement and the other Senior Credit Documents; and (iii) all
amendments, modifications, renewals, extensions, refinancings, refundings and
restructurings of any of the foregoing First Tier Indebtedness, whether in whole
or in part, and the agreements governing such First Tier Indebtedness; provided
that (A) the aggregate principal amount of obligations under the

                                       2

<PAGE>

foregoing clauses (i) and (ii), and any amendments, modifications, renewals,
extensions, refinancings, refundings and restructurings thereof under the
foregoing clause (iii), in respect of Senior Credit Debt constituting First Tier
Indebtedness hereunder shall not at any time exceed the Maximum First Tier
Indebtedness Amount and (B) in no event shall any indebtedness or obligations of
Satellite or any of its Subsidiaries held by the Pledgor or any Affiliate of the
Pledgor or any of its Subsidiaries constitute First Tier Indebtedness and
provided further, that under no circumstances shall the obligations owing to the
lenders under the Junior Credit Agreement and the Junior Administrative Agent
under the Collateral Documents be considered First Tier Indebtedness.

         "Junior Credit Documents" means (i) the Junior Credit Agreement, the
notes issued thereunder and the other credit documents referenced therein
relating thereto, (ii) except for purposes of clauses (i) and (iii) of the
definition of "Second Tier Indebtedness", the interest rate protection or
foreign currency exchange agreements, the obligations under which constitute
Second Tier Indebtedness hereunder, and (iii) the Collateral Documents.

         "Junior Creditors" means the holders of the Second Tier Indebtedness.

         "Letters of Credit" has the meaning assigned to such term in the Junior
Credit Agreement.

         "Maximum First Tier Indebtedness Amount" means an amount equal to the
greater of (i) $125 million, and (ii) $569 million minus the amount of mandatory
prepayments made on or after the date hereof and serving to permanently reduce
the loans and commitments under the Senior Credit Agreement.

         "Pledged Collateral" has the meaning assigned to such term in the New
Pledge Agreement.

         "Second Tier Indebtedness" means all of the following, whether now or
hereafter outstanding or incurred: (i) the principal of and interest (including
interest accruing after commencement of a proceeding in bankruptcy,
reorganization or insolvency, whether or not allowable as a claim) on the loans
and obligations, and all other amounts (including, without limitation, all
reimbursement obligations, fees, indemnities, charges, expenses and other
monetary obligations), owing from time to time under the Junior Credit Agreement
or any of the other Junior Credit Documents; (ii) the obligations owing by
SpaceCom, or a subsidiary or affiliate of SpaceCom, to any lender or affiliate
of a lender under the SpaceCom Credit Agreement arising under any interest rate
protection or foreign currency exchange agreement or any guaranty given in
respect thereof; (iii) all guaranty obligations given in respect of the Second
Tier Indebtedness; and (iv) all renewals, extensions, refinancings, refundings,
amendments and modifications of any of the foregoing Second Tier Indebtedness,
whether in whole or in part.

         "Secured Creditors" means the Senior Creditors and the Junior
Creditors.

         "Secured Debt" means the First Tier Indebtedness and the Second Tier
Indebtedness.

         "Senior Credit Debt" means loans and obligations (including indemnity
obligations and other amounts) owing under the Senior Credit Documents.

                                       3

<PAGE>

         "Senior Credit Documents" means (i) the Senior Credit Agreement, the
notes issued thereunder and the other credit documents referenced and defined
therein, as amended, modified, extended or replaced, (ii) any other credit
agreement, note purchase agreement or financing agreement evidencing loans and
indebtedness to the extent such additional loans and indebtedness, together with
the loans and indebtedness under the Senior Credit Agreement (assuming all
commitments thereunder are fully funded), would fit within the limitations of,
and constitute, Maximum First Tier Indebtedness, and (iii) the Collateral
Documents.

         "Senior Creditors" means the holders of the First Tier Indebtedness.

         SECTION 2         Subordination Provisions.

         2.1      Establishment of Liens. The Pledgor has granted a pledge of
and security interest in the Capital Stock of Satellite and the other Collateral
to secure, first, the First Tier Indebtedness, and, second, the Second Tier
Indebtedness, as hereafter provided. Such liens and security interests have been
given in favor of the Collateral Agent for the benefit of the Secured Creditors
as provided in this Agreement. The Junior Creditors will not request or accept
any lien or security interest in any Collateral, except by way of Collateral
Documents in favor of the Collateral Agent which are expressly subject to the
terms of this Agreement and which shall also secure the First Tier Indebtedness.

         2.2      Proceeds of Collateral. All amounts received on any exercise
of remedies under the Collateral Documents or otherwise from the proceeds of a
sale or any transfer or other disposition of the Collateral, or any part
thereof, and the proceeds of any right or remedy under the Collateral Documents,
including any amounts held by the Junior Creditors in trust for the benefit of
the Senior Creditors, whether due to a recovery in respect of a Bankruptcy Event
or otherwise, shall in all cases, be paid over to the Collateral Agent for
application to the Secured Debt in the order shown below:

                  (i)      First, to payment of reasonable fees, costs and
         expenses of the Collateral Agent incurred in connection with the
         performance or execution of its duties as Collateral Agent, in
         exercising or attempting to exercise any right or remedy hereunder or
         under the Collateral Documents or in taking possession of, protecting,
         preserving or disposing of any item of Collateral, and all amounts
         against or for which the Collateral Agent is to be indemnified or
         reimbursed hereunder or under the Collateral Documents;

                  (ii)     Second, after payment in full of amounts under clause
         (i), to payment of the First Tier Indebtedness until paid in full in
         cash;

                  (iii)    Third, after payment in full of amounts under clauses
         (i) and (ii), to payment of the Second Tier Indebtedness until paid in
         full (including, provision of 100% cash collateral to the Junior
         Administrative Agent for the maximum amount of Letters of Credit and
         unreimbursed drawings in respect of Letters of Credit issued under the
         Junior Credit Agreement); and

                  (iv)     Fourth, after payment in full of amounts under
         clauses (i), (ii) and (iii), to the Pledgor or to whomever may be
         lawfully entitled to receive the same.

                                       4

<PAGE>

         2.3      Release and Disposition of Collateral. Until such time as all
First Tier Indebtedness has been paid in full in cash and satisfied and the
commitments under the Senior Credit Documents shall have expired or been
terminated, (i) the Collateral Agent will act at the sole direction of the
Senior Administrative Agent (or if there is no Senior Administrative Agent, the
Majority Lenders under the Senior Credit Agreement) for the benefit of the
Senior Creditors, and thereafter at the direction of the Junior Administrative
Agent (or if there is no Junior Administrative Agent, the Required Banks (as
such term is defined in the Junior Credit Agreement) under the Junior Credit
Agreement), including releases of Collateral (whether or not such result in a
payment of the First Tier Indebtedness), and (ii) the Junior Administrative
Agent and the Junior Creditors will execute and deliver promptly upon request
any and all releases and other documents and any agreements that the Collateral
Agent or the Senior Administrative Agent deem necessary or appropriate to give
effect to any release or disposition of Collateral free of the liens and
interests of the Junior Creditors; provided, however, that (A) if, at the time
that there is First Tier Indebtedness outstanding, the Pledgor shall receive and
apply all Net Cash Proceeds from the sale or disposition of the Collateral in an
amount sufficient to pay all First Tier Indebtedness in full in cash and
terminate all commitments related thereto, then the application of any and all
amounts in excess of that required to retire such First Tier Indebtedness shall
be paid over to the Junior Administrative Agent for application to the Second
Tier Indebtedness in accordance with the terms of the Junior Credit Documents
and (B) if the Senior Credit Agreement has been paid in full and terminated and
the First Tier Indebtedness then outstanding is less than $50 million, the
Collateral Agent shall only release Collateral to the extent the proceeds
therefrom are either applied to permanently reduce First Tier Indebtedness
and/or applied to Second Tier Indebtedness in accordance with the terms of the
Junior Credit Documents.

         2.4      Limitations on Rights and Remedies.

                  (a)      Until all First Tier Indebtedness has been paid in
full in cash and satisfied and all obligations and commitments under the Senior
Credit Documents have expired or been terminated, the Junior Administrative
Agent and the Junior Creditors shall not be entitled to (i) exercise any rights
or remedies with respect to the Collateral, including without limitation the
right to (A) enforce any liens or sell or otherwise foreclose on any portion of
the Collateral or (B) request any action, institute proceedings, give any
instructions, make any election, notice account debtors or make collections with
respect to any portion of the Collateral, or (ii) demand, accept or obtain any
lien on any Collateral (except for liens subject to the terms of this
Agreement). It is understood and agreed, however, that this Agreement shall in
no way limit or affect the rights of the Junior Creditors or the Junior
Administrative Agent with respect to an exercise of rights and remedies against
SpaceCom and its Subsidiaries or with respect to collateral pledged by SpaceCom
and its Subsidiaries to secure the loans and obligations owing under the Junior
Credit Agreement.

                  (b)      Until the date 91 days after all First Tier
Indebtedness has been paid in full in cash and satisfied and the obligations and
commitments under the Senior Credit Documents have been terminated, neither the
Junior Administrative Agent nor any Junior Creditor shall take any action,
directly or indirectly, to initiate, promote or assist in an involuntary
bankruptcy or receivership proceeding or receivership in respect of Satellite.

                                       5

<PAGE>

         2.5      Intercreditor Arrangements in Bankruptcy.

                  (a)      This Agreement shall remain in full force and effect
and enforceable pursuant to its terms in accordance with Section 510(a) of the
Bankruptcy Code, and all references herein to the Pledgor shall be deemed to
apply to such entity as debtor in possession and to any trustee in bankruptcy
for the estate(s) of such entity.

                  (b)      Except as otherwise specifically permitted in this
Section 2.5, until the First Tier Indebtedness has been paid in full in cash and
satisfied and all obligations and commitments under the Senior Credit Documents
have been terminated, the Junior Administrative Agent and each Junior Creditor
shall not assert, or make any request or demand upon the Collateral Agent to
assert, without the written consent of the Senior Administrative Agent, any
claim, motion, objection, or argument in respect of the Collateral in connection
with any Bankruptcy Event which could otherwise be asserted or raised in
connection with such Bankruptcy Event by the Junior Administrative Agent or any
Junior Creditor as a creditor of the Pledgor or equity holder of Satellite,
including without limitation any claim, motion, objection or argument seeking or
opposing adequate protection or relief from the automatic stay in respect of the
Collateral.

                  (c)      Without limiting the generality of the foregoing, the
Junior Administrative Agent and each Junior Creditor agrees that if a Bankruptcy
Event occurs, (i) the Senior Administrative Agent and the Senior Creditors (and
the Collateral Agent on their behalf) may consent to the use of cash collateral
on such terms and conditions and in such amounts as they, in their sole
discretion, may decide without seeking or obtaining the consent of the Junior
Administrative Agent or any Junior Creditor as holder of an interest in the
Collateral; (ii) any of the Senior Creditors may provide postpetition financing
for the Pledgor and its Subsidiaries, in each case pursuant to Section 364 of
the Bankruptcy Code or other applicable law and on such terms and conditions and
in such amounts as the Senior Creditors, in their sole discretion, may decide
without seeking or obtaining the consent of the Junior Administrative Agent or
the Junior Creditors as holder of an interest in the Collateral; (iii) neither
the Junior Administrative Agent nor the Junior Creditors shall oppose the
Pledgor's or its Subsidiaries' use of cash collateral on the basis that their
interest in the Collateral is impaired by such use or inadequately protected by
such use to the extent such use has been approved by the Senior Administrative
Agent or the Senior Creditors in their sole discretion; and (iv) neither the
Junior Administrative Agent nor the Junior Creditors shall oppose any sale or
other disposition of any assets comprising part of the Collateral free and clear
of security interests, liens or other claims of any party, including the Junior
Administrative Agent and the Junior Creditors, under Section 363 of the
Bankruptcy Code on the basis that the interest of either the Junior
Administrative Agent or the Junior Creditor in the Collateral is impaired by
such sale or inadequately protected as a result of such sale if the Senior
Administrative Agent has consented to such sale or disposition of such assets.

                  (d)      The Junior Administrative Agent and each Junior
Creditor agrees that it will not initiate, prosecute, encourage, or assist with
any other person to initiate or prosecute any claim, action or other proceeding
(i) challenging the validity or enforceability of this Agreement, (ii)
challenging the validity, enforceability or unavoidability of any claim of the
Senior Administrative Agent or the Senior Creditors with respect to the
Collateral or otherwise, (iii) challenging the perfection, enforceability or
unavoidability of any liens securing the First Tier

                                       6

<PAGE>

Indebtedness, or (iv) asserting any claims which the Pledgor or its Subsidiaries
may hold with respect to the Senior Administrative Agent or the Senior Creditors
or the First Tier Indebtedness, if any.

                  (e)      To the extent that the Senior Administrative Agent or
any Senior Creditor receives payments or transfers on the First Tier
Indebtedness or proceeds of the Collateral which are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law, or equitable cause, then, to the extent of such
payment or proceeds received, the First Tier Indebtedness, or part thereof,
intended to be satisfied shall be revived and continue in full force and effect
enjoying all rights and benefits of this Agreement as if such payments or
proceeds had not been received by the Senior Administrative Agent or such Senior
Creditor.

                  (f)      Notwithstanding any other provision of this Section,
the Junior Administrative Agent and each Junior Creditor shall be entitled to
file any necessary responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleading made by any person
objecting to or otherwise seeking the disallowance of the claims of the Junior
Administrative Agent or any Junior Creditor including without limitation any
claims secured by the Collateral, if any.

         2.6      Obligations of the Pledgor Unconditional.

                  (a)      All rights and interests of the Senior Administrative
Agent and the Senior Creditors hereunder, and all agreements and obligations of
the Pledgor, the Junior Administrative Agent and the Junior Creditors hereunder,
shall remain in full force and effect irrespective of:

                  (i)      any lack of validity or enforceability of any Senior
         Credit Document or any other agreement or instrument relating thereto;

                  (ii)     any change in the time, manner or place of, or in any
         other term of, all or any of the First Tier Indebtedness, or any
         amendment or waiver of or any consent to departure from any provision
         of the Senior Credit Agreement or any other Senior Credit Document;

                  (iii)    any exchange, release, nonperfection, or
         unenforceability of any lien or security interest in any Collateral, or
         any release or amendment or waiver of or consent to departure from any
         guarantee, for all or any of the First Tier Indebtedness; or

                  (iv)     any other circumstances which might otherwise
         constitute a defense available to, or a discharge of, any Credit Party
         in respect of the First Tier Indebtedness, or of the Second Tier
         Indebtedness, in respect of this Agreement.

                  (b)      Nothing contained herein shall affect the obligation
of Satellite to make, or prevent Satellite from making, at any time, payment of
any amount in respect of the First Tier Indebtedness.

                                       7

<PAGE>

         2.7      No Other Beneficiaries of Lien Subordination. This Agreement
and provisions contained herein are intended only for the benefit of the holders
of First Tier Indebtedness and no other creditor of Satellite or the Pledgor.
The Pledgor will not publish or give to any creditor or prospective creditor of
Satellite or the Pledgor any copy, statement or summary (or acquiesce in the
publication or giving of any such copy, statement or summary) as to the
subordination of the lien rights of the Junior Administrative Agent and the
Junior Creditors without also stating or causing to be stated (in a conspicuous
manner in the case of any document) that such subordination is solely for the
benefit of the holders of First Tier Indebtedness and not for the benefit of any
other creditor of Satellite or the Pledgor.

         2.8      Rights of Holders of First Tier Indebtedness Not to be
Impaired. No right of any present or future holder of any First Tier
Indebtedness to enforce the provisions hereof shall at any time in any way be
prejudiced or impaired by any act or omission in good faith by any such holder,
or by any noncompliance by any other party to this Agreement with the terms and
provisions and covenants herein or in any documents or instruments supporting or
evidencing the Second Tier Indebtedness, regardless of any knowledge thereof
that any such holder of First Tier Indebtedness may have or otherwise be charged
with.

         2.9      Waivers. Neither the Collateral Agent, the Senior
Administrative Agent nor any of the Senior Creditors shall have any liability or
duty, of any kind, nature or origin, to the Junior Administrative Agent or any
Junior Creditor, express or implied, except as set forth in this Agreement. The
Junior Administrative Agent and each Junior Creditor hereby waives and releases
any claim which it may now or hereafter have against the Collateral Agent, the
Senior Administrative Agent and/or any Senior Creditor arising out of any and
all actions which it, in good faith, takes or omits to take, including, without
limitation, (a) actions with respect to the creation, perfection or continuation
of liens or security interest in the Collateral, (b) actions with respect to the
occurrence of any event of default under this Agreement, the Senior Credit
Agreement or any other Senior Credit Document, (c) action with respect to the
foreclosure upon, sale, release, or depreciation of, or failure to realize upon,
any of the Collateral, (d) actions with respect to the collection of any claim
for all or any part of the First Tier Indebtedness from any account debtor,
guarantor or any other party, (e) any other action with respect to the
enforcement of any loan documents relating to the First Tier Indebtedness or the
valuation, use, protection or disposition of the Collateral or any other
security for the First Tier Indebtedness and (f) the election of the Senior
Administrative Agent or any Senior Creditor, in any proceeding instituted under
Chapter 11 of the Bankruptcy Code, for application of Section 1111(b) of the
Bankruptcy Code.

         2.10     Remedies.

         (a)      Rights Cumulative. The rights and remedies of the Senior
Administrative Agent and the Senior Creditors under this Agreement, the Senior
Credit Agreement and the other Senior Credit Documents or any other loan or
collateral documents relating to the First Tier Indebtedness shall be cumulative
and not exclusive of any rights or remedies which any of them would otherwise
have. In exercising such rights and remedies the Collateral Agent, the Senior
Administrative Agent and the Senior Creditors may be selective and no failure or
delay by the Collateral Agent, the Senior Administrative Agent or the Senior
Creditors in exercising any right

                                       8

<PAGE>

shall operate as a waiver of such right, nor shall any partial or single
exercise of any power or right preclude its other or further exercise or the
exercise of any other power or right.

         (b)      Waiver of Marshalling. The Pledgor, the Junior Administrative
Agent and the Junior Creditors each hereby waives any right to require
marshalling of assets by the Collateral Agent, the Senior Administrative Agent
or the Senior Creditors and any similar rights.

         2.11     Modification and Refinancing of the First Tier Indebtedness.
Nothing contained herein shall be construed as limiting (i) the right of the
Senior Creditors to make amendments to or modifications of the First Tier
Indebtedness or the Senior Credit Documents (or to establish new or additional
First Tier Indebtedness and enter into new or additional credit documents in
connection therewith) without notice to or the consent of the Junior Creditors;
provided, however, the First Tier Indebtedness shall not exceed the Maximum
First Tier Indebtedness Amount without the consent of the Required Banks as such
term is defined in the Junior Credit Agreement, or (ii) the right of the Junior
Creditors to make amendments to or modifications of the Second Tier Indebtedness
or the Junior Credit Documents without notice to or the consent of the Senior
Creditors. Without limiting the generality of the foregoing, in connection with
any refinancing or replacement of all or any portion of the First Tier
Indebtedness (or the establishment of new or additional First Tier
Indebtedness), the Junior Administrative Agent and each Junior Creditor agree,
if requested by the holders of the First Tier Indebtedness, to execute an
intercreditor and lien subordination agreement substantively similar to this
Agreement for the benefit of such replacement lenders and the Collateral Agent
is authorized to enter into any amendments or modifications to this Agreement
and to the Collateral Documents as necessary or appropriate to give effect to
the provisions hereof.

         2.12     Agreement Not to Transfer Second Tier Indebtedness Without
Consent. Each of the Junior Creditors agrees not to transfer any Second Tier
Indebtedness without causing such transferee or assignee to execute a written
acknowledgement agreeing to accept the terms and conditions of this Agreement.

         2.13     Receipt in Trust. In the event that, notwithstanding the
foregoing, any payment shall be made to a Junior Creditor which is not permitted
by the express terms of this Agreement, then, and in such event, all such
payments shall be received and held in trust for the holders of the First Tier
Indebtedness and shall be paid over and delivered forthwith to the holders of
the First Tier Indebtedness or their representatives for application to the
First Tier Indebtedness.

         2.14     Inapplicability In Respect of Minimum First Tier Indebtedness.
Notwithstanding anything else to the contrary contained herein, if the Senior
Credit Agreement has been paid in full and terminated and the First Tier
Indebtedness then outstanding is less than $50 million the holders of such First
Tier Indebtedness shall not be entitled to the benefits of subsections (b) and
(c) of Section 2.5 hereof and the Junior Creditors shall not be bound by the
limitations contained therein.

                                       9

<PAGE>

         SECTION 3         Miscellaneous.

         3.1      Successors; Continuing Effect. This Agreement is being entered
into for the benefit of, and shall be binding upon, (i) the Senior
Administrative Agent and the Senior Creditors and each of their respective
successors and assigns, including subsequent holders of First Tier Indebtedness,
and the term "holders of First Tier Indebtedness" shall include any such
subsequent or additional holder of First Tier Indebtedness, wherever the context
permits, and (ii) the Junior Administrative Agent and the Junior Creditors and
each of their respective successors and assigns, including subsequent holders of
the Second Tier Indebtedness.

         3.2      Further Assurances. The Pledgor and Junior Administrative
Agent will, and the Pledgor will cause the other Credit Parties to, at the
expense of the Pledgor, and at any time and from time to time, promptly execute
and deliver all further instruments and documents, and take all further action,
that the Collateral Agent or the Senior Administrative Agent may reasonably
request in order to perfect or otherwise protect any right or interest granted
or purported to be granted hereby or to enable the Collateral Agent or the
Senior Administrative Agent to exercise and enforce its rights and remedies
hereunder (but this Agreement shall remain fully effective notwithstanding any
failure to execute any additional documents or instruments).

         3.3      Expenses. The Pledgor shall pay to the Collateral Agent and
the Senior Administrative Agent, upon demand, the amount of any and all
reasonable expenses, including, without limitation, the reasonable fees and
expenses of counsel, which the Collateral Agent or the Senior Administrative
Agent may incur in connection with the exercise or enforcement of any of their
respective rights or interests vis-a-vis the Pledgor or the Junior
Administrative Agent or the Junior Creditors, and all such amounts shall
constitute part of the First Tier Indebtedness.

         3.4      Notices; Amendments etc.

         (a)      All notices, requests and demands to or upon the parties to
this Agreement to be effective shall be in writing (including by facsimile or
telecopy transmission) and shall be deemed to have been duly given or made (i)
when delivered by hand or (ii) three Business Days after being deposited in the
mail, postage prepaid or (iii) one Business Day after being sent by priority
overnight mail with an internationally recognized overnight delivery carrier or
(iv) if by telecopy or facsimile, when received, at the addresses or
transmission numbers for notices set

                                       10

<PAGE>

forth as follows or to such other address or transmission number as may be
hereafter notified in writing by the respective parties hereto:

          SENIOR ADMINISTRATIVE AGENT         Bank of America, N.A.
          AND SENIOR CREDITORS:               101 North Tryon Street, 8th Floor
                                              NC1-001-08-19
                                              Charlotte, NC 28255
                                              Attn: Kimberly D. Williams
                                              Phone: (704) 387-5451
                                              Fax: (704) 409-0650

          JUNIOR ADMINISTRATIVE AGENT         Bank of America, N.A.
          AND JUNIOR CREDITORS:               101 North Tryon Street, 8th Floor
                                              NC1-001-08-19
                                              Charlotte, NC 28255
                                              Attn: Kimberly D. Williams
                                              Phone: (704) 387-5451
                                              Fax: (704) 409-0650

          COLLATERAL AGENT:                   Bank of America, N.A.
                                              101 North Tryon Street, 8th Floor
                                              NC1-001-08-19
                                              Charlotte, NC 28255
                                              Attn: Kimberly D. Williams
                                              Phone: (704) 387-5451
                                              Fax: (704) 409-0650

          PLEDGOR AND CREDIT PARTIES:         Loral Space & Communications
                                              Corporation
                                              c/o Loral SpaceCom Corporation
                                              600 Third Avenue
                                              New York, New York
                                              Attn: General Counsel
                                              Telephone: (212) 697-1105
                                              Telecopy: (212) 867-5248

         (b)      Subject to Section 3.5 for the addition of parties, this
Agreement may be amended and the terms hereof may be waived only with the
written consent of each of the parties hereto (consisting of (i) the Pledgor,
(ii) the Collateral Agent, (iii) the Senior Administrative Agent, or if there is
no Senior Administrative Agent, the Majority Lenders under the Senior Credit
Agreement, and (iv) the Junior Administrative Agent, or if there is no Junior
Administrative Agent, the Required Banks as defined under the Junior Credit
Agreement), or their authorized successors and assigns.

                                       11

<PAGE>

         3.5      Joinder in respect of Additional Senior Credit Debt. The
parties acknowledge and agree that the provisions of this Agreement are intended
to inure to the benefit of the holders of any new or additional Senior Credit
Debt constituting First Tier Indebtedness which, directly or through the actions
of an agent on their behalf acting at their direction, should acknowledge and
agree in writing to be bound by the terms of this Agreement. Any such joinder
acknowledgment and agreement shall be in form and substance satisfactory to the
Collateral Agent and shall be acknowledged by the Collateral Agent and the
Pledgor. The Collateral Agent will give prompt notice to the Senior
Administrative Agent and the Junior Administrative Agent of any such joinder in
respect of any such new or additional Senior Credit Debt hereunder constituting
First Tier Indebtedness hereunder.

         3.6      Termination. This Agreement shall terminate upon payment in
full (without refinancing or replacement) of either the First Tier Indebtedness
or the Second Tier Indebtedness and expiration or termination of the commitments
relating thereto, or upon release of the liens and security interests in favor
of the Second Tier Indebtedness by the terms of the Junior Credit Agreement.

         3.7      Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction, shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or invalidity without
invalidating the remaining portions hereof or thereof or affecting the validity
or enforceability of such provision in any other jurisdiction.

         3.8      WAIVER OF JURY TRIAL. THE PLEDGOR, THE SENIOR ADMINISTRATIVE
AGENT AND THE JUNIOR ADMINISTRATIVE AGENT HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
AND FOR ANY COUNTERCLAIM THEREIN.

         3.9      Entire Agreement; Governing Law. This Agreement embodies the
entire agreement and understanding of the parties hereto regarding the subject
matter hereof. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

         3.10     Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute one agreement.

               [Remainder of this page intentionally left blank.]

                                       12

<PAGE>

         IN WITNESS WHEREOF, the undersigned have entered into this Agreement as
of the date shown above.

SENIOR CREDITORS:             BANK OF AMERICA, N.A.,
                              as Administrative Agent for the Lenders under the
                              Senior Credit Agreement and the other Senior
                              Creditors

                              By:___________________________
                              Name:
                              Title:

JUNIOR CREDITORS:             BANK OF AMERICA, N.A.,
                              as Administrative Agent for the Lenders under the
                              Junior Credit Agreement and the other Junior
                              Creditors

                              By:___________________________
                              Name:
                              Title:

COLLATERAL AGENT:             BANK OF AMERICA, N.A.,
                              as Collateral Agent

                              By:___________________________
                              Name:
                              Title:

PLEDGOR:                      LORAL SPACE & COMMUNICATIONS
                              CORPORATION, a Delaware corporation

                              By:___________________________
                              Name:
                              Title:

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