LORAL CYBERSTAR INC
LOCK-UP AGREEMENT
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>4
<FILENAME>lrl962719.txt
<DESCRIPTION>LOCK-UP AGREEMENT
<TEXT>
<PAGE>


                                                                       EXECUTION


                                    AGREEMENT

     This agreement (this "Agreement") is made and entered into as of October
15, 2001, by and among Loral Cyberstar, Inc. (formerly Orion Network Systems,
Inc.) (the "Company"), Loral Space & Communications Ltd. ("Loral Ltd."), Loral
SpaceCom Corporation ("LSC", and the Company, Loral Ltd. and LSC being referred
to as the "Loral Entities"), and certain holders of the Company's 11 1/4% Senior
Notes due 2007 (the "Senior Notes") and the Company's 12 1/2% Senior Discount
Notes due 2007 (the "Senior Discount Notes", and together with the Senior Notes,
the "Existing Notes") which holders are signatories hereto from time to time
(each individually a "Consenting Holder", and collectively the "Consenting
Holders").

                                    RECITALS

     WHEREAS, LSC is a wholly owned indirect subsidiary of Loral Ltd. and is the
holder of a demand note issued by the Company in the approximate aggregate
principal amount outstanding as of the date hereof of $79,700,000 (the "LSC
Note");

     WHEREAS, the Company is a wholly owned indirect subsidiary of Loral Ltd.;

     WHEREAS, the Company, Loral Ltd., LSC and the Consenting Holders (each a
"Party" and collectively the "Parties") have engaged in good faith negotiations
with the objective of reaching an agreement with regard to restructuring the
Senior Notes, the Senior Discount Notes and the LSC Note;

     WHEREAS, the Parties now desire to implement a financial restructuring (the
"Financial Restructuring") and in order to implement the Financial
Restructuring, the Company intends, subject to the terms and conditions of this
Agreement, to make an exchange offer (the "Exchange Offer") to exchange each
Existing Note for (1) new notes due 2006 to be issued by the Company in the
aggregate principal amount equal to $675,000,000 (subject to adjustment) (the
"New Notes"), which New Notes shall be guaranteed by Loral Ltd., and (2) a
pro-rata share of five year warrants to purchase up to 6,657,096 common shares
of Loral Ltd. (representing as of June 30, 2001, 2% of Loral Ltd.'s outstanding
common stock) with an exercise price equal to 110% of the average of the daily
volume-weighted average trading prices of the common stock on the New York Stock
Exchange as reported by Bloomberg, L.P. for the ten consecutive trading days
preceding the second trading day prior to the closing of the Exchange Offer,
subject to normal and customary anti-dilution provisions, all as more fully
described in Schedule I attached hereto;

     WHEREAS, LSC desires as part of the Financial Restructuring to exchange the
LSC Note on the terms set forth on Schedule III hereto;

     WHEREAS, the Parties desire that, upon consummation of the Exchange Offer,
each of the Indentures with respect to the Senior Notes and Senior Discount
Notes, each dated January 31, 1997 (together, the "Indentures") shall be amended
to (a) effect the Exchange Offer, (b)



<PAGE>


make any changes to the Indentures, or waive compliance with any provisions
thereof that are deemed necessary or desirable by the Company to be made or
waived in order for the Company to be able to effect the foregoing and (c)
remove the operating restrictions contained in the Indenture, all as more fully
specified on Schedule II hereto (the "Proposed Amendments");

     WHEREAS, the Company desires to commence a consent solicitation of the
holders of the Existing Notes for the approval of the Proposed Amendments (the
"Consent Solicitation"); and

     WHEREAS, as a condition to its willingness to make the Exchange Offer, the
Company has required the Consenting Holders to agree, and the Consenting Holders
have agreed, among other things, (i) to consent to the Consent Solicitation, and
(ii) to tender pursuant to the Exchange Offer all of its Existing Notes, in each
case, on the terms and subject to the conditions provided for in this Agreement
and the Solicitation Material (as defined below);

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree as follows:

     1. Certain Covenants of the Company. The Company hereby covenants and
agrees to use its best efforts, and to take all reasonable steps necessary or
desirable, to:

     (a)  as promptly as practicable, prepare and file with the Securities and
          Exchange Commission a registration statement on Form S-4 relating to
          the Exchange Offer and the Consent Solicitation (the "Solicitation
          Materials"), in form and substance reasonably acceptable to the
          Consenting Holders, and thereupon commence the Exchange Offer and
          Consent Solicitation (it being understood and agreed that the
          Consenting Holders or their representatives will have the opportunity
          to review and comment on a draft of such Solicitation Materials);

     (b)  publicly disclose the terms of the transactions set forth herein
          within two (2) business days after the effectiveness of this agreement
          in accordance with Paragraph 11;

     (c)  as promptly as practicable after the commencement of the Exchange
          Offer and Consent Solicitation, and subject to the satisfaction or
          waiver of the conditions to consummation set forth in Paragraph 5,
          consummate the Exchange Offer and Consent Solicitation, and all
          related transactions; and

     (d)  as promptly as practicable after the date hereof (but not as a
          condition to consummation of the Exchange Offer and Consent
          Solicitation), obtain a rating of the New Notes by Standard &


                                       2

<PAGE>


          Poor's Ratings Group, a division of McGraw Hill, Inc. or Moody's
          Investors Service, Inc.

     2. Certain Covenants of Loral Ltd. Loral Ltd. hereby covenants and agrees
that it shall, upon satisfaction of the conditions to consummation set forth in
Paragraph 5, enter into a guaranty agreement with respect to the New Notes on
terms set forth in Schedule I.

     3. Certain Covenants of LSC. LSC hereby covenants and agrees that it shall,
upon satisfaction of the conditions to consummation set forth in Paragraph 6,
exchange the LSC Note on terms set forth in Schedule III.

     4. Certain Covenants of the Consenting Holders. Each of the Consenting
Holders hereby covenants and agrees for itself that, subject to the conditions
that the material terms of the Exchange Offer and Consent Solicitation are
consistent with the terms set forth in this Agreement and the schedules attached
hereto, and subject to the other terms herein, unless such Consenting Holder
shall have transferred all of its Existing Notes pursuant to Paragraph 6, it
shall:

     (a)  timely and validly tender its Senior Notes and Senior Discount Notes
          pursuant to the Exchange Offer and to provide its consent in favor of
          the Proposed Amendments to the Indentures (such tender and consent
          collectively called the "Consent");

     (b)  execute and deliver such other documentation as may be reasonably
          requested by the Company to evidence the Consent given hereunder; and

     (c)  not take any action that would impede, interfere with, delay, postpone
          or attempt to discourage the Exchange Offer or Consent Solicitation.

     5. Conditions to the Exchange Offer. The obligations of each Party to
consummate the transactions contemplated hereby is subject to the satisfaction
of each of the following conditions:

     (a)  receipt of the consent of the requisite percentage of the holders of
          each of the Senior Notes and the Senior Discount Notes to the Proposed
          Amendments, which amendments will not become effective unless the
          Exchange Offer is consummated;

     (b)  at least eighty-five percent (85%) in amount of the sum of (i) the
          aggregate principal amount of the Senior Notes and (ii) the aggregate
          accreted value of the Senior Discount Notes (such sum being herein
          called the "Accreted Amount") being validly tendered and not properly
          withdrawn;


                                       3

<PAGE>


     (c)  the execution of satisfactory documentation with respect to the New
          Notes;

     (d)  the delivery by each of the Loral Entities to the Consenting Holders
          and/or the indenture trustee for the New Notes of a usual and
          customary certificate of a responsible officer of such Loral Entity
          dated as of the closing date which states that all representations and
          warranties made by such Loral Entity in connection with this agreement
          and the transactions contemplated hereby and thereby are true and
          correct in all material respects as of such date, and that such Loral
          Entity has complied as of such date in all material respects with all
          of its covenants contemplated hereby and thereby;

     (e)  the exchange by LSC of the LSC Note according to the terms set forth
          on Schedule III hereto; and

     (f)  All necessary consents of any person (including without limitation
          consents from government bodies and authorities) that are required in
          connection with the Exchange Offer, Consent Solicitation and the
          transactions contemplated thereby have been obtained.

     6. Restriction on Transfer. Except pursuant to the terms of this Agreement,
each of the Consenting Holders hereby agrees for itself that, so long as this
Agreement shall remain in effect with respect to such Consenting Holder, such
Consenting Holder shall not (i) grant any proxies to any person in connection
with the Owned Existing Notes to vote on the Exchange Offer or Consent
Solicitation, or (ii) sell, transfer or assign any of the Existing Notes or any
option thereon or any right or interest (voting or otherwise) therein, unless
the grantee or transferee, as the case may be, agrees in writing to be bound by
all the terms of this Agreement by executing a counterpart signature page of
this Agreement and the transferor promptly provides the Parties with a copy
thereof, in which event the Company, Loral Ltd. and LSC shall be deemed to have
acknowledged that their obligations to such Consenting Holder hereunder shall be
deemed to constitute obligations in favor of such grantee or transferee.

     7. Acknowledgment. This Agreement is not and shall not be deemed to be a
solicitation for consents to the Exchange Offer or Consent Solicitation. The
acceptances of the Consenting Holders will not be solicited until the they have
received the Solicitation Materials.

     8. Termination of Agreement by a Consenting Holder. A Consenting Holder may
terminate its obligations hereunder, which obligations shall upon termination be
of no further force and effect, in the event that the Solicitation Materials
shall have been amended or modified and such amendment or modification shall
constitute, or result in, a modification or amendment of the Solicitation
Materials such that, after giving effect to such modification or amendment, the
Solicitation Materials contain terms that are different from those provided in
this Agreement (including the Schedules attached hereto) and which in the
judgment of the


                                       4

<PAGE>


Consenting Holder, materially and adversely affects the treatment or the rights
of such Consenting Holder.

     9. Termination of Agreement by Any Party. Any Party may terminate its
obligations hereunder, which obligations shall upon termination be of no further
force and effect, in the event that:

     (a)  the Exchange Offer and Consent Solicitation are not consummated on or
          prior to December 31, 2001;

     (b)  there shall have occurred and be continuing an event which has a
          material adverse effect on the business, assets, operations, property
          or condition (financial or otherwise) of the Company or Loral Ltd.; or

     (c)  there shall exist or be threatened any action, proceeding, claim or
          counterclaim by any government or governmental, regulatory or
          administrative agency or authority or tribunal or any other person,
          domestic or foreign (other than any action, proceeding, claim or
          counterclaim by the Party seeking to terminate its obligations
          hereunder), before any court, authority, agency or tribunal that
          challenges the Exchange Offer or Consent Solicitation and related
          transactions contemplated hereby which, if decided adversely to the
          Company or any other Party, would likely prohibit, prevent, restrict,
          limit or delay consummation of the Exchange Offer, Consent
          Solicitation or such related transactions.

     10. Representations and Warranties. The Company, Loral Ltd., LSC and each
of the Consenting Holders represents and warrants to each other the following
statements as applicable to it, are true, correct and complete as of the date
hereof:

     (a)  Corporate Power and Authority. Each Party hereto is a corporation,
          partnership, or limited liability company duly organized, validly
          existing and in good standing under the laws of its respective state
          of organization. Each Party hereto has all requisite corporate,
          partnership, or limited liability company, as applicable, power and
          authority to execute and deliver this Agreement.

     (b)  Authorization. The execution and delivery of this Agreement and the
          performance of its obligations hereunder have been duly and validly
          authorized by all necessary corporate, partnership or LLC action on
          its part, and no other proceedings on the part of such Party are
          necessary to authorize this Agreement or to consummate the
          transactions contemplated hereby.


                                       5

<PAGE>


     (c)  Binding Obligation. This Agreement is the legally valid and binding
          obligation of it, enforceable against it in accordance with its terms.

     (d)  No Conflicts. The execution, delivery and performance by it of this
          Agreement do not and shall not (i) violate any provision of law, rule
          or regulation applicable to it or any of its subsidiaries or its
          certificate of incorporation or bylaws or other organizational
          documents or those of any of its subsidiaries or (ii) conflict with,
          result in a breach of or constitute (with due notice or lapse of time
          or both) a default under any material contractual obligation to which
          it or any of its subsidiaries is a party.

     (e)  Governmental Consents. The execution, delivery and performance by it
          of this Agreement does not and shall not require any registration or
          filing with, consent or approval of, or notice to, or other action to,
          with or by, any federal, state or other governmental authority or
          regulatory body, other than the Securities and Exchange Commission.

     (f)  Holdings. Each Consenting Holder represents and warrants that, as of
          the date hereof, (i) such Consenting Holder either (A) is the
          beneficial owner of the principal amount of Existing Notes set forth
          below under its signature, or (B) has investment and voting discretion
          with respect to the principal amount of Existing Notes set forth below
          under its signature and has the power and authority to bind the
          beneficial owner of such Existing Notes to the terms of this Agreement
          (in either case, the "Owned Existing Notes"), (ii) such Consenting
          Holder has full power and authority to vote and consent to matters
          concerning the Owned Existing Notes and to exchange, assign and
          transfer the Owned Existing Notes.

     (g)  Qualified Institutional Buyer. Each Consenting Holder represents and
          warrants that it is a "qualified institutional buyer" within the
          meaning of Rule 144A under the Securities Act of 1933, as amended.

     11. Effectiveness. This Agreement shall be effective and binding upon the
execution and delivery, in accordance with Paragraph 17, of this agreement by
each of the Company, Loral Ltd., LSC, and Consenting Holders holding at least
49% of the aggregate outstanding principal amount of the Existing Notes.

     12. Further Acquisition of Securities. This Agreement shall in no way be
construed to preclude any Party from acquiring additional Existing Notes.
However, any such


                                       6

<PAGE>


additional Existing Notes so acquired shall automatically be deemed to be
Existing Notes and to be subject to the terms of this Agreement.

     13. Amendments. This Agreement may not be modified, amended or supplemented
without the prior written consent of all of the Parties.

     14. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York without regard to any
conflicts of law provision which would require the application of the law of any
other jurisdiction.

     15. Expenses. The Company will pay (i) the fees and expenses (including the
reasonable fees and expenses of counsel) of Loral Ltd. in connection with the
negotiation, execution and delivery of this Agreement and the Exchange Offer,
(ii) the fees and expenses of Wachtell, Lipton, Rosen & Katz, counsel to the
Consenting Holders, in accordance with the terms of that certain letter
agreement between the Company and Wachtell, Lipton, Rosen & Katz dated as of the
date hereof, (iii) its own expenses, including investment banking, financial
advisory, printing, legal, accounting, solicitation agent, information agent
fees and expenses, (iv) expenses incurred to obtain a rating of the New Notes,
and (v) the fees and expenses of the indenture trustee for the New Notes;
provided that the maximum amount payable by the Company in accordance herewith
will not exceed $5,000,000.

     16. Confidentiality. The Consenting Holders agree to be bound by the
provisions of Schedule IV attached hereto, which terms are incorporated herein
by reference.

     17. Notices. All demands, notices, requests, consents, and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered by courier service, messenger, or telecopy at, or if duly
deposited in the mails, by certified or registered mail, postage prepaid, return
receipt requested, to the following addresses, or such other addresses as may be
furnished hereafter by notice in writing, to the following Parties:

     if to the Company, to:

          Loral Cyberstar, Inc.
          c/o Loral SpaceCom Corporation
          600 Third Avenue
          New York, NY 10016
          Attention: Avi Katz
          Fax:  (212) 338-5320

          With a copy to:

          Willkie Farr & Gallagher
          787 Seventh Avenue
          New York, New York 10019
          Attention: William E. Hiller, Esq.


                                       7

<PAGE>


          Fax:  212 728-8111

     If to Loral Space & Communications Ltd., to:

          Loral Space & Communications, Ltd.
          c/o Loral SpaceCom Corporation
          600 Third Avenue
          New York, NY 10016
          Attention: Avi Katz
          Fax:  (212) 338-5320

     If to Loral SpaceCom Corporation, to:

          Loral SpaceCom Corporation
          600 Third Avenue
          New York, NY 10016
          Attention: Avi Katz
          Fax:  (212) 338-5320

     if to any Consenting Holder, to such Consenting Holder at the address shown
     on the applicable signature page hereto, to the attention of the person who
     has signed this Agreement on behalf of such holder, with a copy to:

          Wachtell, Lipton, Rosen & Katz
          51 W.  52nd Street
          New York, New York 10019-6150
          Attention: Chaim J. Fortgang, Esq.
          cjfortgang@wlrk.com
          Fax:  (212) 403-2000

     18. Further Assurances. Each of the Parties agrees to execute and deliver,
or to cause to be executed and delivered, all such instruments, and to take all
such action as the other Parties may reasonably request in order to effectuate
the intent and purposes of, and to carry out the terms of, this Agreement.

     19. Headings. The headings of the sections, paragraphs and subsections of
this Agreement are inserted for convenience only and shall not affect the
interpretation hereof.

     20. Successors and Assigns. This Agreement is intended to bind and inure to
the benefit of the Parties and their respective successors, assigns, heirs,
executors, administrators and representatives.

     21. Entire Agreement. This Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and supersedes all other
prior agreements and


                                       8

<PAGE>


understandings, both written and oral, between the Parties with respect to the
subject matter hereof.

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

     23. No Third-Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties hereto and no other
person or entity shall be a third-party beneficiary hereof.


                                       9

<PAGE>


     IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.


                              LORAL CYBERSTAR, INC.

                              By: /s/ Richard P. Mastoloni
                                  ------------------------------
                                  Name:  Richard P. Mastoloni
                                  Title: Vice President & Assistant Treasurer


                              LORAL SPACE & COMMUNICATIONS LTD.

                              By: /s/ Richard P. Mastoloni
                                  ------------------------------
                                  Name:  Richard P. Mastoloni
                                  Title: Vice President & Assistant Treasurer


                              LORAL SPACECOM CORPORATION

                              By: /s/ Richard P. Mastoloni
                                  ------------------------------
                                  Name:  Richard P. Mastoloni
                                  Title: Vice President & Assistant Treasurer


                                       10

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              AIG GLOBAL INVESTMENT CORP.
                              As Investment Manager for Certain Funds &
                              Accounts it Manages

                              By: /s/ Kaye Handley
                                  ------------------------------

                                  Name:  Kaye Handley

                                  Title: Managing Director


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              AMERICAN HIGH-INCOME TRUST:

                              By: /s/ Michael J. Downer
                                  ------------------------
                                  Name:  Michael J. Downer

                                  Title: Secretary, Capital Research and
                                         Management Company, Holder's
                                         investment adviser

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              THE BOND FUND OF AMERICA, INC.:


                              By: /s/ Michael J. Downer
                                  ------------------------------

                                  Name:  Michael J. Downer

                                  Title: Secretary, Capital Research and
                                         Management Company, Holder's
                                         investment adviser

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement


<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              THE INCOME FUND OF AMERICA, INC.:

                              By: /s/ Michael J. Downer
                                  ------------------------------

                                  Name:  Michael J. Downer

                                  Title: Secretary, Capital Research and
                                         Management Company, Holder's
                                         investment adviser

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              AMERICAN FUNDS INSURANCE SERIES - HIGH YIELD
                              BOND FUND:

                            By: /s/ Michael J. Downer
                                  ------------------------------

                                  Name:  Michael J. Downer

                                  Title: Secretary, Capital Research and
                                         Management Company, Holder's
                                         investment adviser

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              THE DREYFUS CORPORATION

                              By: /s/ Stephen R. Byers
                                  ------------------------------

                                  Name:  Stephen R. Byers

                                  Title: Vice Chairman and CIO

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED HIGH INCOME BOND FUND, INC.

                              By: Federated Investment Management Company,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED HIGH YIELD TRUST

                              By: Federated Investment Management Company,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED HIGH INCOME ADVANTAGE FUND

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              AMERICAN SKANDIA TRUST HIGH YIELD PROTFOLIO

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED HIGH INCOME BOND FUND II OF
                              FEDERATED INSURANCE SERIES

                              By: Federated Investment Management Company,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              VARIABLE INVESTORS SERIES TRUST HIGH
                              INCOME PORTFOLIO

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              TRAVELERS SERIES TRUST FEDERATED HIGH
                              YIELD PORTFOLIO

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              AMERICAN SKANDIA ADVISORY FUNDS, INC.
                              FEDERATED HIGH YIELD BOND FUND

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              NATIONWIDE SEPARATE ACCOUNT TRUST HIGH
                              INCOME BOND FUND

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              HIGH YIELD BOND PORTFOLIO OF FEDERATED CORE TRUST

                              By: Federated Investment Management Company,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              OHIO NATIONAL FUND, INC.
                              HIGH INCOME BOND PORTFOLIO

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED CBO, LIMITED

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FEDERATED CBO II

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              SUNAMERICA SERIES TRUST CORPORATE BOND PORTFOLIO
                              HIGH YIELD SUBPORTFOLIO

                              By: Federated Investment Counseling,
                                  as attorney-in-fact

                              By: /s/ Kathryn P. Heagy
                                  ------------------------------

                              Name:  Kathryn P. Heagy

                              Title: Assistant Vice President


                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                           Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              FIRST INVESTORS MANAGEMENT CO.

                              By: /s/ Nancy W. Jones
                                  ------------------------------
                                  Name:  Nancy W. Jones
                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              GOLDEN TREE ASSET MANAGEMENT

                              By: /s/ Steven A. Tananbaum of Golden Tree
                                  --------------------------------------
                                  Name:  Steven A. Tananbaum
                                  Title: President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement

<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              ML CBO IV (CAYMAN) LTD.

                              By: Highland Capital Management, L.P.
                                  as Collateral Manager

                              By: /s/ Mark K. Okada, CFA
                                  ------------------------------

                                  Name:  Mark K. Okada, CFA

                                  Title: Executive Vice President, Highland
                                         Capital Management, L.P.

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              PAMCO CAYMAR LTD.
                              By: Highland Capital Management, L.P.
                                  as Collateral Manager

                              By: /s/ Mark K. Okada, CFA
                                  ------------------------------

                                  Name:  Mark K. Okada, CFA

                                  Title: Executive Vice President, Highland
                                         Capital Management, L.P.

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              PAM CAPITAL FUNDING, L.P.
                              By: Highland Capital Management, L.P.
                                  as Collateral Manager

                              By: /s/ Mark K. Okada, CFA
                                  ------------------------------

                                  Name:  Mark K. Okada, CFA

                                  Title: Executive Vice President, Highland
                                         Capital Management, L.P.

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              CONTINENTAL ASSURANCE COMPANY
                              SEPARATE ACCOUNT (E)
                              By: Highland Capital Management, L.P.
                                  as Attorney-in-Fact

                              By: /s/ Todd Travers
                                  ------------------------------

                                  Name:  Todd Travers

                                  Title: Senior Portfolio Manager, Highland
                                         Capital Management, L.P.

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              PROSPECT STREET HIGH INCOME PORTFOLIO, INC.

                              By: /s/ R. Joseph Dougherty
                                  ------------------------------

                                  Name:  R. Joseph Dougherty

                                  Title: Senior Vice President, Secretary

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              LUTHERAN BROTHERHOOD HIGH YIELD FUND*
                              LB SERIES FUND, INC. - HIGH YIELD PORTFOLIO**

                              By: /s/ James M. Walline
                                  ------------------------------

                                  Name:  James M. Walline

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $

                              *    By Lutheran Brotherhood Research Corp., its
                                   Investment Adviser

                              **   By Lutheran Brotherhood, its Investment
                                   Adviser


                          Signature Page To Agreement


<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              MW POST ADVISORY GROUP, LLC
                              AS MANAGER OF ITS INVESTMENT ACCOUNTS

                              By: /s/ Carl Goldsmith
                                  ------------------------------

                                  Name:  Carl Goldsmith

                                  Title: Manager Director

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              MACKAY SHIELDS LLC ON
                              BEHALF OF FUNDS LT MANAGES

                              By: /s/ Donald F. Morgan
                                  ------------------------------

                                  Name:  Donald F. Morgan

                                  Title: Managing Director

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              GCBS: US HIGH YIELD FUND

                              By: /s/ Robert F. Murray
                                  ------------------------------

                                  Name:  Robert Murray

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              ML BOND FUND INC., HIGH INCOME PORTFOLIO

                              By: /s/ Aldona Schwartz
                                  ------------------------------

                                  Name:  Aldona Schwartz

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              MASTER US HIGH YIELD TRUST

                              By: /s/ Aldona Schwartz
                                  ------------------------------

                                  Name:  Aldona Schwartz

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              CORPORATE HIGH YIELD FUND III, INC.

                              By: /s/ Elizabeth M. Phillips
                                  ------------------------------

                                  Name:  Elizabeth Phillips

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement


<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              CORPORATE HIGH YIELD FUND II, INC.

                              By: /s/ Elizabeth M. Phillips
                                  ------------------------------

                                  Name:  Elizabeth Phillips

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              CORPORATE HIGH YIELD FUND, INC.

                              By: /s/ Elizabeth M. Phillips
                                  ------------------------------

                                  Name:  Elizabeth Phillips

                                  Title: Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              PACIFIC INVESTMENT MANAGEMENT COMPANY, LLC

                              By: /s/ Raymond Kennedy
                                  ------------------------------

                                  Name:  Raymond Kennedy

                                  Title: Executive Vice President

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              SUN AMERICA ASSET MANAGEMENT

                              By: /s/ John W. Risner
                                  ------------------------------

                                  Name:  John W. Risner

                                  Title: Senior Vice President -
                                         Senior Portfolio Management

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>


CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              DRESDNER KLEINWORT WASSERSTEIN -
                              GRANTCHESTER, INC.

                              By: /s/ Ashish Bhutani
                                  ------------------------------

                                  Name:  Ashish Bhutani

                                  Title: CEO, North America

                              Principal Amount of:

                                   Senior Notes:  $

                                   Senior Discount Notes:  $


                          Signature Page To Agreement



<PAGE>



CONSENTING HOLDER             NAME OF CONSENTING HOLDER:

                              LEHMAN BROTHERS, INC.

                              By: /s/John Alexander Kirk
                                  ------------------------------

                                  Name:  John Alexander Kirk

                                  Title: Managing Director

                              Principal Amount of:

                                   Senior Notes:

                                   Senior Discount Notes:


                          Signature Page To Agreement



<PAGE>


                                   SCHEDULE I

                  Principal Terms of the New Notes and Warrants
                  ---------------------------------------------


1.   Definitions. As used herein, the follows terms have the following meaning:

     (a)  "Aggregate Senior Discount Note Amount" as of any date of
          determination means the aggregate accreted value of the Senior
          Discount Notes as of October 15, 2001, computed in accordance with the
          terms thereof, as of such date.

     (b)  "Aggregate Senior Note Amount" as of any date of determination means
          the aggregate unpaid principal amount of the Senior Notes plus accrued
          and unpaid interest thereon as of October 15, 2001, as of such date.

     (c)  "Pro Rata Share" means, as of any date of determination, a share of
          New Notes or Warrants, as the case may be, equal to the ratio
          determined as of the closing date of the Exchange Offer of (x) the
          Tendered Senior Discount Note Amount or Tendered Senior Note Amount,
          as the case may be, divided by (y) the sum of (i) the Tendered Senior
          Note Amount plus (ii) the Tendered Senior Discount Note Amount.

     (d)  "Tendered Senior Discount Note Amount" as of any date of determination
          means the accreted value of the Senior Discount Notes as of October
          15, 2001 validly tendered and not properly withdrawn, computed in
          accordance with the terms thereof.

     (e)  "Tendered Senior Note Amount" as of any date of determination means
          the unpaid principal amount of the Senior Notes validly tendered and
          not properly withdrawn plus accrued and unpaid interest thereon as of
          October 15, 2001.

2.   New Notes.

     (a) Principal amount: Principal amount of New Notes equal to product of (x)
$675,000,000 multiplied by (y) the ratio determined as of the Closing Date of
the Exchange Offer of (i) the sum of the Tendered Senior Discount Note Amount
plus the Tendered Senior Note Amount divided by (ii) the sum of the Aggregate
Senior Discount Note Amount plus the Aggregate Senior Note Amount. Each holder
to receive their Pro Rata Share of the New Notes.

     (b) Maturity: July 15, 2006


                                       S-1

<PAGE>


     (c) Interest Rate: 10% per annum, payable semiannually on January 15 and
July 15 of each year in cash, with the first interest payment due July 15, 2002.
First interest payment to include all interest that would have accrued on New
Notes as if such New Notes had been issued on October 15, 2001 (less any cash
interest paid on the Existing Notes after the date hereof, which amount shall
offset interest paid to each Existing Note holder having received such cash
interest payment).

     (d) Redemption: Optional redemption is permitted (a) at any time upon
payment of a make whole premium (using a discount rate of 0.50% plus the rate on
treasuries with a comparable maturity) and (b) at any time up to $100 million
aggregate principal amount of New Notes solely out of "excess cash flow" at a
redemption price equal to 101% of the principal amount of the New Notes being
redeemed ("Excess Cash Flow Prepayment").

     (e) Covenants: Covenants to include:

          (i) covenants in Existing Notes but, tighter restrictions on the
     incurrence of debt and the granting of liens;

          (ii) covenants must be consistent with any limitations relating to
     refinancing of indebtedness by subsidiaries of Loral Ltd. contained in the
     Loral Ltd. Indenture relating to its 9 1/2% Senior Notes Due 2006;

          (iii) covenants will permit the Company (i) to use its cash flow to
     construct or acquire a replacement satellite and (ii) to incur secured
     indebtedness to construct or acquire a replacement satellite in an amount
     equal to (x) the amount of any Excess Cash Flow Prepayment actually paid
     plus (y) the amount of equity proceeds received by the Company after the
     date of consummation of the Exchange Offer; provided that (1) any such
     secured indebtedness shall be incurred contemporaneously with the
     acquisition of such satellite or within 60 days thereafter (or incurred to
     refinance, renew or replace such indebtedness), (2) such liens secure
     indebtedness in an amount not in excess of the cost of such satellite, and
     (3) such liens do not extend to any property other than the satellite for
     which such indebtedness was incurred. Prior to the acquisition of such
     replacement satellite, the Company shall provide to the Consenting
     Noteholders or their representatives a written opinion from an independent
     party qualified in making such determination that the purchase price of the
     replacement satellite is consistent with then prevailing market prices for
     comparable satellites.

          (iv) any covenant comparable to Section 4.15 of the Indentures will
     change the 15 month period referred to therein to 26 months); and


                                       S-2

<PAGE>


          (v) Covenants to be applicable to the Company and its restricted
     subsidiaries.

     (f) Guarantee: Usual and customary guarantee of payment by Loral Ltd.
Operating and financial covenants in the Guarantee same as provided in the Loral
Ltd. 9 1/2% Senior Notes Due 2006.

     (g) Collateral: None but, except as set forth in Item 2(e)(iii) above, the
covenants will include a negative pledge with exceptions to be negotiated.

     (h) Registration and Trading: New Notes to be publicly traded (but not
listed), and may be traded separately from Warrants. The securities issued in
connection with the Exchange Offer shall be registered under the Securities Act
of 1933.

     (i) Representations and Warranties: Prior to the commencement of the
Exchange Offer, Loral Ltd., Cyberstar and LSC shall each deliver to the
Consenting Holders an officer's certificate containing usual and customary
representations and warranties (subject to usual and customary carve-outs)
including without limitation representations and warranties concerning:
corporate standing, valid existence and authorization of the transactions
contemplated hereby; existence of all necessary corporate power and authority;
all necessary corporate action has been taken; due execution and delivery; the
New Notes and each agreement (including without limitation the guaranty) are
each valid, legally binding and enforceable in accordance with their respective
terms; shares issuable upon exercise of warrants duly authorized and reserved
for issuance, and upon issuance to be validly issued, fully paid and
non-assessable and not subject to any preemptive or similar rights; compliance
with applicable requirements of the federal and state securities laws; no
conflicts with existing agreements; no violation of any law, rule or regulation;
transactional compliance with all applicable foreign, federal, local or state
securities laws, rules and regulations; no consent or authorization required
(other than listed exceptions); no material pending or threatened action (other
than listed exceptions); New Notes and Guaranty when issued will be duly
authorized and when duly executed, will be duly authenticated, issued and
delivered.

     (j) Legal Opinion: The registration statement when it becomes effective
will include the opinions of counsel for Cyberstar, Loral Ltd. and LSC
reasonably acceptable to the Consenting Holders, including without limitation an
opinion that each of the New Notes and the agreements (including without
limitation the guaranty agreement) are legal, valid and enforceable obligations
in accordance with their respective terms, and that there is no conflict between
the terms of such New Notes and agreements and each of the Loral Entities'
charter, bylaws and public and private funded indebtedness.


                                       S-3

<PAGE>


3.   Warrants.

     (a) Warrants: Warrants to be five year warrants to purchase up to 6,657,096
common shares of Loral Ltd. (representing as of June 30, 2001, 2% of Loral
Ltd.'s outstanding common stock) with an exercise price equal to 110% of the
average of the daily volume-weighted average trading prices of the common stock
on the New York Stock Exchange as reported by Bloomberg, L.P. for the ten
consecutive trading days preceding the second trading day prior to the closing
of the Exchange Offer.

     (b) Distribution: Each holder to receive their Pro Rata Share of the
Warrants.

     (c) Terms: Warrant Agreement to contain usual and customary anti-dilution
provisions.

     (d) Registration and Trading: Warrants to be publicly traded, and may be
traded separately from New Notes. The Warrants issued in connection with the
Exchange Offer shall be registered under the Securities Act of 1933.

     (e) Representations and Warranties: Same as with respect to New Notes.

     (f) Legal Opinion: Same as with respect to New Notes.


                                       S-4

<PAGE>


                                   SCHEDULE II

                  Summary of Proposed Amendments to Indentures
                  --------------------------------------------


I.   AMENDMENT TO SENIOR NOTES INDENTURE. SECTIONS 4.02 THROUGH 4.10 AND
     SECTIONS 4.12 THROUGH 4.15, SECTIONS 4.18 AND 4.19, SECTIONS 5.01 AND 5.02
     (EXCEPT THEY SHALL BE RETAINED TO THE EXTENT NECESSARY TO REQUIRE THE
     SUCCESSOR OR TRANSFEREE TO ASSUME THE OBLIGATIONS UNDER THE INDENTURE AND
     THE SENIOR NOTES AND SHALL RELEASE THE PREDECESSOR PERSON), CLAUSES (C),
     (E), (F), (G), (H) AND (J) OF SECTION 6.01 SHALL BE ELIMINATED AND
     CONFORMING CHANGES SHALL BE MADE TO THE OTHER PROVISIONS OF THE INDENTURE.

II.  AMENDMENT TO SENIOR DISCOUNT NOTES INDENTURE. SECTIONS 4.02 THROUGH 4.10
     AND SECTIONS 4.12 THROUGH 4.15, SECTIONS 4.18 AND 4.19, SECTIONS 5.01 AND
     5.02 (EXCEPT THEY SHALL BE RETAINED TO THE EXTENT NECESSARY TO REQUIRE THE
     SUCCESSOR OR TRANSFEREE TO ASSUME THE OBLIGATIONS UNDER THE INDENTURE AND
     THE SENIOR DISCOUNT NOTES AND SHALL RELEASE THE PREDECESSOR PERSON),
     CLAUSES (C), (E), (F), (G), (H) AND (J) OF SECTION 6.01 SHALL BE ELIMINATED
     AND CONFORMING CHANGES SHALL BE MADE TO THE OTHER PROVISIONS OF THE
     INDENTURE.

III. EFFECTIVENESS OF AMENDMENTS. AMENDMENTS EFFECTIVE ONLY UPON RECEIPT BY THE
     INDENTURE TRUSTEE OF REQUISITE CONSENTS AND CONSUMMATION BY THE COMPANY OF
     THE EXCHANGE OFFER.


                                       S-5

<PAGE>


                                  SCHEDULE III

Summary of Terms of Consideration to be given in Exchange for Cyberstar/LSC Note
--------------------------------------------------------------------------------


     THE COMPANY WILL PAY IN CASH ALL ACCRUED INTEREST ON THE CYBERSTAR/LSC NOTE
THROUGH THE DATE OF CONSUMMATION OF THE EXCHANGE OFFER.

     THE COMPANY WILL TRANSFER TO LSC OR ITS DESIGNEE ALL ASSETS OWNED BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES COMPRISING THE "DATA BUSINESS".

     THE COMPANY WILL ISSUE TO LSC NEW SUBORDINATED NOTES (THE "SUBORDINATED
NOTES") AS FOLLOWS:

          PRINCIPAL AMOUNT: AN AMOUNT EQUAL TO THE THEN OUTSTANDING PRINCIPAL
               AMOUNT OF THE CYBERSTAR/LSC NOTE LESS $50,000,000 (WHICH
               PRINCIPAL AMOUNT WILL BE APPROXIMATELY $29,700,000).

          MATURITY: JULY 30, 2006.

          INTEREST RATE: 10% PER ANNUM, PAYABLE SEMIANNUALLY ON JANUARY 30 AND
               JULY 30 OF EACH YEAR, IN KIND, THROUGH MATURITY.

          COVENANTS: TO BE DETERMINED BUT SUBSTANTIALLY SIMILAR TO THOSE OF THE
               NEW NOTES.

          SUBORDINATION: SUBORDINATED TO THE NEW NOTES ON USUAL AND CUSTOMARY
               TERMS.

          COLLATERAL: NONE.

          GUARANTEE: USUAL AND CUSTOMARY GUARANTEE OF PAYMENT BY LORAL LTD.
               OPERATING AND FINANCIAL COVENANTS IN THE GUARANTEE SAME AS
               PROVIDED IN THE LORAL LTD. 9 1/2% SENIOR NOTES DUE 2006. THE
               GUARANTEE WILL BE SUBORDINATED TO THE GUARANTEE OF LORAL LTD. OF
               THE NEW NOTES.


                                       S-6


<PAGE>


                                   SCHEDULE IV

                           Confidentiality Provisions
                           --------------------------


     All financial and other information regarding Loral Ltd., the Company and
its affiliates (whether written or oral) furnished to any Holder ("you") and
your Representatives (as defined below), whether prior to, on or following the
date hereof, together with analyses, compilations, forecasts, studies or other
documents or records prepared by you or your Representatives which contain, are
based on or otherwise reflect or are generated in whole or in part from such
information, including that stores on any computer, word processor or other
similar device, are collectively referred to herein as the "Evaluation
Material."

     You hereby agree as follows:

(1)  You shall use the Evaluation Material solely for the purpose of evaluating
     the Exchange Offer and you shall keep the Evaluation Material confidential,
     except that you may disclose the Evaluation Material or portions thereof to
     those of your and your funds' directors, officers, employees, affiliates,
     representatives (including, without limitation, financial advisors,
     attorneys and accountants) (collectively, the "Representatives") (a) who
     need to know such information for the purpose of evaluating the Exchange
     Offer, (b) who are informed by you of the confidential nature of the
     Evaluation Material and (c) who agree to be bound by the terms of this
     Agreement as if they were parties hereto. You shall be responsible for any
     breach of this Agreement by your Representatives. In the event that you or
     any of your representatives are requested or required (by deposition,
     interrogatory, request for documents, subpoena, civil investigative demand
     or similar process) to disclose any of the Evaluation Material, you shall
     provide Loral Ltd. and the Company with prompt prior written notice of such
     requirement, you shall furnish only that portion of the Evaluation Material
     which you are advised by counsel is legally required, and you shall
     exercise your reasonable best efforts to obtain reliable assurance that
     confidential treatment will be accorded such Evaluation Material.

(2)  If you do not, in accordance with this Agreement, proceed with the Exchange
     Offer or upon termination of this Agreement, you will promptly inform Loral
     Ltd. and the Company of that decision and, in that case or at any time upon
     the request of the Company or Loral Ltd., you and your Representatives
     shall promptly either return to the Company and Loral Ltd., as appropriate,
     or destroy all copies of the written Evaluation Material in your or their
     possession or under your or their custody or control (including that stored
     in any computer, word processor or similar device) and confirm such
     destruction to the Company and Loral Ltd. in writing. Notwithstanding
     anything to the contrary contained in this Agreement, if you are not
     required, in accordance with this Agreement, to proceed with the Exchange
     Offer or upon termination of this Agreement, you will continue to hold any
     Evaluation Material obtained hereunder confidential and you further agree
     not to use the Evaluation Material for any purpose.


                                       S-7

<PAGE>


(3)  The term "Evaluation Material" does not include any information which (i)
     at the time of disclosure is generally available to and known by the public
     (other than as a result of a disclosure by you or by any of the
     Representatives) or (ii) was available to you or your representatives on a
     non-confidential basis from a source (other than Loral Ltd., the Company or
     their representatives) that is not and was not prohibited from disclosing
     such information to you or your Representatives by a contractual, legal or
     fiduciary obligation.

(4)  You agree that no failure or delay by the Company or Loral Ltd. in
     exercising any right, power or privilege hereunder will operate as a waiver
     thereof, nor will any single or partial exercise thereof preclude any other
     or further exercise thereof or the exercise of any other right, power or
     privilege hereunder.

     The Company and Loral Ltd. hereby agree that the terms of this
confidentiality agreement shall terminate and no longer be of any force and
effect as to the Evaluation Material upon the earlier to occur of (i) the date
set forth in Section 1(b) of the Agreement; or (ii) the release to the public of
information concerning the principal terms of the Financial Restructuring,
whether by press release or commencement of the Exchange Offer or Consent
Solicitation.


                                       S-8


</TEXT>
</DOCUMENT>
