EXECUTION COPY





                 ---------------------------------------------





                      ARIANESPACE CUSTOMER LOAN AGREEMENT


                           Dated as of July 22, 1997


                                    between


                                 CD RADIO INC.


                                      and


                            ARIANESPACE FINANCE S.A.



                             Relating to Launch # 2


                 ---------------------------------------------





<PAGE>   2





                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                               Page


<S>                                                                                                             <C>
SECTION 1.  DEFINITIONS......................................................................................... 1
         1.01     Defined Terms................................................................................. 1
         1.02     Other Definitional Provisions................................................................ 44

SECTION 2.  LOAN PROVISIONS.................................................................................... 46
         2.01     Amounts and Terms of Commitments............................................................. 46
         2.02     Manner of Borrowing Tranche A Loans.......................................................... 47
         2.03     Procedure for Conversion to a Tranche B Loan................................................. 48
         2.04     Deconversion and Reconversion................................................................ 49
         2.05     Prepayments.................................................................................. 49
         2.06     Repayment.................................................................................... 53
         2.07     Interest..................................................................................... 53
         2.08     Fees......................................................................................... 54
         2.09     Computation of Interest and Fees............................................................. 54
         2.10     Payments by the Customer..................................................................... 55
         2.11     Security..................................................................................... 55
         2.12     Note......................................................................................... 56
         2.13     ECA Enhancement.............................................................................. 56
         2.14     ECA Additional Terms and Conditions.......................................................... 58

SECTION 3.  TAXES AND YIELD PROTECTION......................................................................... 58
         3.01     Taxes........................................................................................ 58
         3.02     Increased Costs and Reduction of Return...................................................... 61
         3.03     Funding Losses............................................................................... 64
         3.04     Inability to Determine Rates................................................................. 65

SECTION 4.  CONDITIONS PRECEDENT............................................................................... 66
         4.01     Conditions to Initial Tranche A Loan......................................................... 66
         4.02     Conversion Conditions........................................................................ 68
         4.03     Tranche B Conditions Precedent............................................................... 70
         4.04     Conditions to All Loans...................................................................... 76

SECTION 5.  REPRESENTATIONS AND WARRANTIES..................................................................... 77
         5.01     Existence and Power.......................................................................... 77
         5.02     Authorizations; No Contravention............................................................. 77
</TABLE>



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<TABLE>
<S>                                                                                                            <C>
         5.03     Government Approvals......................................................................... 78

         5.04     Binding Effect............................................................................... 79
         5.05     Litigation................................................................................... 79
         5.06     No Default................................................................................... 80
         5.07     Use of Proceeds.............................................................................. 80
         5.08     Title to Assets.............................................................................. 80
         5.09     Taxes........................................................................................ 81
         5.10     Financial Condition.......................................................................... 81
         5.11     Environmental Matters........................................................................ 82
         5.12     Subsidiaries................................................................................. 82
         5.13     Insurance.................................................................................... 83
         5.14     Project Compliance........................................................................... 83
         5.15     Collateral................................................................................... 83
         5.16     Collateral Documents......................................................................... 83
         5.17     Sufficiency of Loan Documents and Satellite
                  Contracts.................................................................................... 84
         5.18     Disclosure................................................................................... 84
         5.19     Effectiveness of Loan Documents, Satellite
                  Contracts and Qualified Lease Agreements..................................................... 85
         5.20     Employee Benefit Liabilities................................................................. 85
         5.21     Investment Company Act....................................................................... 85

SECTION 6.  AFFIRMATIVE COVENANTS.............................................................................. 85
         6.01     Financial Statements......................................................................... 85
         6.02     Certificates; Other Information.............................................................. 87
         6.03     Notices...................................................................................... 88
         6.04     Preservation of Existence, Etc............................................................... 89
         6.05     Maintenance of Assets........................................................................ 89
         6.06     Maintenance of Insurance..................................................................... 89
         6.07     Payment of Obligations....................................................................... 96
         6.08     Compliance with Laws......................................................................... 96
         6.09     Inspection of Property and Books and Records................................................. 96
         6.10     Environmental Laws........................................................................... 97
         6.11     Use of Proceeds.............................................................................. 98
         6.12     Project Maintenance.......................................................................... 98
         6.13     Telecommunications Approvals................................................................. 98
         6.14     Government Approvals......................................................................... 98
         6.15     Rate Contracts............................................................................... 99
         6.16     Operational Control and Re Export............................................................ 99
         6.17     Performance of Loan Documents............................................................... 100
         6.18     Performance of Satellite Contracts.......................................................... 100
         6.19     Performance of Qualified Lease Agreements................................................... 101
         6.20     Orbital Position.  ......................................................................... 101
         6.21     Export License.............................................................................. 101
         6.22     In-Orbit Commissioning...................................................................... 101
         6.23     Satellite Operational Reports............................................................... 101
</TABLE>



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<TABLE>
<S>                                                                                                            <C>
         6.24     Transponder Lease Agreements................................................................ 101
         6.25     Further Assurances.......................................................................... 102
         6.26     Priorities.................................................................................. 103

SECTION 7.  NEGATIVE COVENANTS................................................................................ 103
         7.01     Limitation on Liens......................................................................... 103
         7.02     Disposition of Collateral................................................................... 104
         7.03     Disposition of Assets Other Than Collateral................................................. 105
         7.04     Transactions with Affiliates................................................................ 106
         7.05     Notice of Indebtedness...................................................................... 106
         7.06     Lease Obligations........................................................................... 106
         7.07     Capital Expenditures........................................................................ 107
         7.08     Change in Structure; Consolidations and Mergers............................................. 107
         7.09     Accounting Changes.......................................................................... 108
         7.10     Business.................................................................................... 108
         7.11     Military Activities......................................................................... 108
         7.12     Loan Documents.............................................................................. 108
         7.13     Satellite Contracts; Qualified Lease Agreements............................................. 109
         7.14     Loans, Deposits and Investments............................................................. 110
         7.15     Subordinated Indebtedness................................................................... 111

SECTION 8.  EVENTS OF DEFAULT................................................................................. 111
         8.01     Events of Default........................................................................... 111
         8.02     Remedies.................................................................................... 119
         8.03     Rights Not Exclusive........................................................................ 120

SECTION 9.  ADDITIONAL LOAN PROVISIONS........................................................................ 120
         9.01     Category 3 Preview.......................................................................... 120
         9.02     Conversion Process  ........................................................................ 124
         9.03     Additional Collateral....................................................................... 129
         9.04     Security Interest in Collateral............................................................. 130

SECTION 10.  MISCELLANEOUS.................................................................................... 134
         10.01    Amendments and Waivers...................................................................... 134
         10.02    Notices..................................................................................... 134
         10.03    No Waiver; Cumulative Remedies.............................................................. 134
         10.04    Costs and Expenses; Indemnification......................................................... 135
         10.05    Successors and Assigns...................................................................... 137
         10.06    Assignment.................................................................................. 137
         10.07    Currency Indemnity.......................................................................... 138
         10.08    Set-off..................................................................................... 139
         10.09    Counterparts................................................................................ 139
         10.10    Severability................................................................................ 140
         10.11    GOVERNING LAW AND JURISDICTION.............................................................. 140
         10.12    WAIVER OF JURY TRIAL........................................................................ 141
         10.13    Entire Agreement............................................................................ 142
         10.14    Confidentiality............................................................................. 142
</TABLE>



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<TABLE>
         <S>      <C>                                                                                          <C>
         10.15    Headings.................................................................................... 142
         10.16    No Third Party Beneficiaries................................................................ 142
         10.17    Survival.................................................................................... 143
         10.18    Language.................................................................................... 143
         10.19    Determinations by AEF....................................................................... 143
</TABLE>


ANNEXES

ANNEX 1                             CATEGORY 1 CUSTOMER
ANNEX 2                             CATEGORY 2 CUSTOMER
ANNEX 3                             CATEGORY 3 CUSTOMER
ANNEX 4                             LIST OF COUNTRIES
ANNEX 5                             ACCEPTABLE CURRENCIES
ANNEX 6                             LIST OF PERMITTED LOCATIONS


SCHEDULES

SCHEDULE 5.03                       GOVERNMENT APPROVALS
SCHEDULE 5.05                       LITIGATION
SCHEDULE 5.10                       BASE FINANCIAL STATEMENTS
SCHEDULE 5.11                       ENVIRONMENTAL CLAIMS
SCHEDULE 5.12A                      SUBSIDIARIES
SCHEDULE 5.12B                      EQUITY INVESTMENTS
SCHEDULE 10.02                      ADDRESSES FOR NOTICES

EXHIBITS

EXHIBIT A                           FORM OF NOTICE OF DRAWDOWN
EXHIBIT B                           FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT C                           FORM OF NOTE




<PAGE>   6



This CUSTOMER LOAN AGREEMENT is entered into as of July 22, 1997, between CD
RADIO INC., a corporation organized under the laws of Delaware (the "CUSTOMER")
and ARIANESPACE FINANCE S.A., a company organized under the laws of Luxembourg
("AEF").

WHEREAS, AEF has agreed to make available to the Customer certain loans upon
the terms and conditions set forth in this Agreement;

WHEREAS, the Lenders are providing loans to AEF for the purpose of funding the
loans contemplated by this Agreement;

WHEREAS, AE and CD Radio Inc., as the LSA Party have entered into the Launch
Services Agreement for the launch of the Satellite; and

WHEREAS, the execution and delivery of the Launch Services Agreement and the
Multiparty Agreement related thereto constitute the basis upon which AEF has
agreed to make the loans contemplated by this Agreement; and

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained herein, the parties agree as follows:


                            SECTION 1.  DEFINITIONS

1.011    DEFINED TERMS.  Unless expressly defined otherwise herein, capitalized
         terms shall have the meanings set forth in this Section 1.01:

         "ACCEPTABLE CURRENCY" means a freely transferable currency of a
         country listed on ANNEX 5 hereto, the Euro or the ECU, provided that
         the ECU shall cease to be an Acceptable Currency upon the adoption and
         implementation of the Euro and any obligation denominated in the ECU
         shall provide that it is convertible into the Euro upon such
         implementation.

         "ACCOUNT BANK" means Credit Lyonnais as account bank in such capacity,
         together with its successors in such capacity, as designated by AEF.

         "AE" means Arianespace S.A., a company organized under the laws of
         France.

         "AE ACCOUNT" means account number 036122-43, established by AE with
         the Account Bank at its office in Luxembourg as such account may be
         renumbered or any successor account identified by AEF to the Customer
         from time to time.

         "AEF" has the meaning specified in the preamble to this Agreement.

         "AFFILIATE" means, as to any Person, any other Person, directly or
         indirectly, controlling, controlled by, or under common control with,
         such first-named Person.  A Person shall be deemed to control another
         Person if the controlling Person



<PAGE>   7



         possesses, directly or indirectly, the power to direct or cause the
         direction of the management and policies of the other Person, whether
         through the ownership of voting stock, by contract or otherwise.
         Without limitation, any Person that owns directly or indirectly twenty
         percent (20%) or more of the voting stock or other equity interests of
         a Person shall, for the purposes of this Agreement and any other Loan
         Document, be deemed to control the other Person.

         "AGREEMENT" means this Customer Loan Agreement.

         "APPLICABLE MARGIN" means (a) during the Tranche A Term, the
         percentage amount as set forth in the Fee Letter and (b) during the
         Tranche B Term, the Customer Tranche B Margin set forth in ANNEX 1, 2
         OR 3, as applicable to the Customer on and after the Conversion Date
         in relation to the designation by AEF of the Customer into a Customer
         Category pursuant to Section 9, provided that, if the Customer Tranche
         B Margin shall be as set forth in ANNEX 1 as a result of ECA
         Enhancement being procured with respect to the Customer, pursuant to
         Section 2.13, and such ECA Enhancement shall at any time during the
         Tranche B Term cease to be in full force and effect, the Customer
         Tranche B Margin shall, from and after such date, be the Customer
         Tranche B Margin set forth in ANNEX 1, 2 OR 3, as would otherwise be
         applicable in the absence of such ECA Enhancement.

         "APPRAISAL" means a report, dated no earlier than fifteen (15) days
         prior to the date of its delivery to AEF, prepared by the Appraiser,
         in form and substance satisfactory to AEF, as to the matters set forth
         in Section 4.02(a).

         "APPRAISER" means an independent appraiser selected by AEF and
         reasonably acceptable to the Customer.

         "ASSIGNMENT AND ACCEPTANCE" has the meaning specified in Section
         10.06(a).

         "ASSIGNMENT AND SECURITY AGREEMENT" means the assignment and security
         agreement to be entered into between the Customer, any Affiliate
         thereof contemplated by clause (g) of the definition of "Collateral"
         and the Security Agent, in form and substance satisfactory to AEF,
         whereby the Customer and such Affiliate (if any) grants to the
         Security Agent a Lien on the Collateral in accordance with the terms
         hereof.

         "ASSUMED DISTRESS VALUE" means an amount expressed in Dollars, as
         determined by the Appraiser in the Appraisal, representing the assumed
         proceeds of a sale realizable from an orderly remarketing of the
         Satellite and (if and to the extent included or to be included in the
         Collateral) the TTC&M Facilities, under normal market conditions
         prevailing at the date of appraisal, following an assumed Event of
         Default on the In-Orbit Commissioning Date.

         "AVERAGE LIFE" means, with respect to the Tranche B Loan, an amount,
         expressed in years, equal to:  (a) the sum of the products of each
         Tranche B Required Installment Amount multiplied by the number of
         years (calculated to one (1) decimal place) from the Conversion Date
         to the Tranche B Principal Payment Date on which such Tranche


                                      -2-

<PAGE>   8



         B Required Installment Amount is due, DIVIDED BY (b) the aggregate
         amount of the Tranche B Loan outstanding as of the Conversion Date.

         "BASE CASE" means, as the context may require, any Preliminary Base
         Case, the Conversion Base Case or each subsequent base case updated in
         accordance with the annual updated Business Plan to be provided
         pursuant to Section 6.02(c) if the Customer shall have been determined
         to be a Category 2 Customer or a Category 3 Customer.

         "BASE DATE" means (a) prior to the Conversion Date, the date of the
         latest Base Financial Statements and (b) on and after the Conversion
         Date, the date of the latest Conversion Financial Statements.

         "BASE FINANCIAL STATEMENTS" has the meaning specified in Section
         5.10(a).

         "BASLE ACCORD" means the proposals for a risk-based capital framework
         described by the Basle Committee on Banking Regulations and
         Supervisory Practices in its paper titled "International Convergence
         of Capital Measurements and Capital Standards" dated July 1988.

         "BREAK FUNDING COSTS" means any amounts required to compensate AEF for
         any losses, costs or expenses (including any loss, cost or expense
         incurred by reason of the liquidation or re-employment of funds
         acquired by AEF to fund or maintain the extensions of credit
         represented by any Loan but excluding any loss of profit or margin)
         that it incurs and any amounts required by AEF to indemnify the
         Lenders for any of the foregoing types of losses, costs or expenses
         with respect to the amounts made available to AEF to fund the Loans
         and that it incurs, in either case as a result of any unscheduled
         prepayment, repayment or acceleration of any Loan on a date that is
         not the last day of an Interest Period.

         "BUSINESS DAY" means (a) with respect to the provision of notices or
         the lapse of any grace or other period, any day (other than a Saturday
         or a Sunday) on which commercial banks are generally open for business
         in New York City, Luxembourg, London, Paris and The District of
         Columbia, (b) in the context of the definition of "Interest Period"
         and for purposes of setting the date for the making of a Loan, a day
         that is also a day on which dealings in Dollar deposits are carried
         out in the London interbank market and (c) with respect to the making
         of any payment, any day (other than a Saturday or a Sunday) on which
         commercial banks are generally open for business in New York City and
         The District of Columbia.

         "BUSINESS PLAN" means, as the context may require, the Preliminary
         Business Plan, if one has been submitted pursuant to Section 9.01(a),
         or, if the Customer shall have been determined to be a Category 2
         Customer or Category 3 Customer, the Conversion Business Plan prepared
         by the Customer, as in effect from time to time as provided in
         accordance with the terms hereof.



                                      -3-

<PAGE>   9



         "CAPEX BUDGET" means a plan for capital expenditures to be made by the
         Customer Group over the Tranche B Term that a Customer determined to
         be a Category 1C Customer may, at its option (but shall not be
         obligated to), (a) furnish to AEF under Section 9.02(c)(i) and (b)
         update and furnish to AEF within thirty (30) days before the end of
         any fiscal year of the Customer to set forth a revised plan for
         capital expenditures for the remainder of the Tranche B Term, such
         updated plan to be in form and substance satisfactory to AEF.

         "CAPITAL LEASE OBLIGATIONS" means all monetary obligations of a Person
         under any leasing or similar arrangement that, in accordance with
         Generally Accepted Accounting Principles, is classified as a capital
         lease.

         "CASH EQUIVALENTS" means the following investments, if and to the
         extent they are denominated in Acceptable Currencies:

                  (a)      securities issued or fully guaranteed or insured (i)
                           by the government of a country the short-term
                           sovereign debt of which is rated at least A-1 by S&P
                           (or any local affiliate or associated agency
                           thereof) or P-1 by Moody's (or any local affiliate
                           or associated agency thereof) and which is a member
                           of the OECD, or by any agency of any such
                           government, and backed by the full faith and credit
                           of such government, or (ii) by the International
                           Bank for Reconstruction and Development (the World
                           Bank), in each case having maturities of not more
                           than twelve (12) months from the date of
                           acquisition;

                  (b)      certificates of deposit, time deposits, Eurodollar
                           time deposits, or bankers' acceptances having in
                           each case a tenor of not more than six (6) months,
                           issued by any Lender or by any commercial bank
                           organized under the laws of any country that is a
                           member of the OECD, and whose short term securities
                           are rated at least A-1 by S&P (or any local
                           affiliate or associated agency thereof) or P-1 by
                           Moody's (or any local affiliate or associated agency
                           thereof);

                  (c)      commercial paper of an issuer rated either at least
                           A-1 by S&P (or any local affiliate or associated
                           agency thereof) or P-1 by Moody's (or any local
                           affiliate or associated agency thereof), and in
                           either case having a tenor of not more than three
                           (3) months; and

                  (d)      repurchase agreements with any financial institution
                           whose short term securities are rated at least A-1
                           by S&P (or any local affiliate or associated agency
                           thereof) or P-1 by Moody's (or any local affiliate
                           or associated agency thereof), fully collateralized
                           by securities issued or fully guaranteed or insured
                           by the government of a country the short-term
                           sovereign debt of which is rated at least A-1 by S&P
                           (or any local affiliate or associated agency
                           thereof) or P-1 by Moody's (or any local affiliate
                           or associated agency thereof) and which is a member
                           of the


                                      -4-

<PAGE>   10



                           OECD, or by any agency of any such government, and
                           backed by the full faith and credit of such
                           government.

         "CATEGORY 1 CUSTOMER" means the Customer, if the Customer has
         satisfied the requirements of ANNEX 1, as determined by AEF pursuant
         to Section 9.02(e), and to which the terms set forth in ANNEX 1,
         together with the other terms herein applicable to it, shall apply
         during the Tranche B Term.

         "CATEGORY 1A CUSTOMER" means a Category 1 Customer that has been
         assigned to the 1A subcategory of Category 1 pursuant to Section
         9.02(e).

         "CATEGORY 1B CUSTOMER" means a Category 1 Customer that has been
         assigned to the 1B subcategory of Category 1 pursuant to Section
         9.02(e).

         "CATEGORY 1C CUSTOMER" means a Category 1 Customer that has been
         assigned to the 1C subcategory of Category 1 pursuant to Section
         9.02(e).

         "CATEGORY 1C QL LOAN LIFE COVER RATIO" means the ratio, calculated as
         of the Conversion Date (and, subject to Section 7.13(b), at no other
         time) of (a) the aggregate of (i) the net present value (at a discount
         rate reasonably acceptable to AEF) of the aggregate QL Cash Flow for
         the Tranche B Term, LESS (ii) interest (at a rate reasonably
         acceptable to AEF) payable during the Tranche B Term on Indebtedness
         secured (or entitled to be secured) by a Lien on any of the Collateral
         and scheduled to be outstanding after the Tranche B Term, PLUS (iii)
         the aggregate total of any funds placed in escrow pursuant to Section
         11.09(a) hereof to (b) the aggregate of (i) the principal amount of
         the Tranche B Loan then outstanding, PLUS (ii) any other Indebtedness
         then outstanding secured (or entitled to be secured) by a Lien on any
         of the Collateral and scheduled to be repaid during the Tranche B
         Term.

         "CATEGORY 2 CF LOAN LIFE COVER RATIO" means, as of the date of
         calculation, the ratio, calculated as of such date under the
         Conversion Base Case or, for purposes of Section 12.04(b)(iv), the
         Base Case as updated from time to time to reflect the updated Business
         Plan furnished under Section 6.02(c)(ii), of (a) the aggregate of (i)
         the net present value of Total Cash Flow for the remaining Tranche B
         Term (at a discount rate reasonably acceptable to AEF, taking into
         account the Rate Contracts entered into in accordance with Section
         6.15), LESS (ii) interest (at a rate reasonably acceptable to AEF,
         taking into account the Rate Contracts entered into in accordance with
         Section 6.15) payable during such year and each subsequent year during
         the then remaining Tranche B Term on (A) Indebtedness secured (or
         entitled to be secured) by a Lien on any of the Collateral and (B) the
         principal amount of all other Indebtedness (other than Subordinated
         Indebtedness and (to the extent agreed by AEF) Contingent Obligations)
         of the Customer then outstanding, and, in each case, scheduled to be
         outstanding after the Tranche B Term, PLUS (iii) the aggregate total
         of any funds placed in escrow pursuant to Section 12.03(a) to (b) the
         sum (without duplication) of (i) the then outstanding principal amount
         of the Tranche B Loan, PLUS (ii) the principal amount of any
         Indebtedness then outstanding and secured (or entitled to be secured)
         by a Lien on any of the Collateral and scheduled to be repaid during
         the


                                      -5-

<PAGE>   11



         Tranche B Term, PLUS (iii) the principal amount of all other
         Indebtedness (other than Subordinated Indebtedness and (to the extent
         agreed by AEF) Contingent Obligations) of the Customer then
         outstanding and scheduled to be repaid during the Tranche B Term.

         "CATEGORY 2 CUSTOMER" means the Customer, if the Customer has
         satisfied the requirements of ANNEX 2, as determined by AEF pursuant
         to Section 9.02(e), and to which the terms set forth in ANNEX 2,
         together with the other terms herein applicable to it, shall apply
         during the Tranche B Term.

         "CATEGORY 2 QL LOAN LIFE COVER RATIO" means the ratio, calculated as
         of the Conversion Date (and, subject to Section 7.13(b), at no other
         time) under the Conversion Base Case, prospectively for each year
         during the Tranche B Term, of (a) the aggregate of (i) the net present
         value (at a discount rate equal to the debt interest rate used in the
         preparation of the Conversion Base Case) of the QL Cash Flow for such
         year and each such subsequent year during the then remaining Tranche B
         Term, LESS (ii) interest (at a rate equal to the debt interest rate
         used in the preparation of the Conversion Base Case) payable during
         such year and each such subsequent year during the then remaining
         Tranche B Term on Indebtedness secured (or entitled to be secured) by
         a Lien on any of the Collateral and scheduled to be outstanding after
         the Tranche B Term, PLUS (iii) the aggregate total of any funds placed
         in escrow pursuant to Section 12.03(a), to (b) the aggregate of (i)
         the principal amount of the Tranche B Loan then outstanding, PLUS (ii)
         any other Indebtedness then outstanding and secured (or entitled to be
         secured) by a Lien on any of the Collateral and scheduled to be
         outstanding at the beginning of such year and each such subsequent
         year and scheduled to be repaid during the Tranche B Term.

         "CATEGORY 3 CUSTOMER" means the customer, if the Customer has
         satisfied the requirements of ANNEX 3, as determined by AEF pursuant
         to Section 9.02(e), and to which the terms set forth in ANNEX 3,
         together with the other terms herein applicable to it, shall apply
         during the Tranche B Term.

         "CATEGORY 3 LOAN LIFE COVER RATIO" means the ratio, calculated as of
         the Conversion Date (and, subject to Section 7.13(b), at no other
         time) under the Conversion Base Case, prospectively for each year
         during the Tranche B Term, of (a) the aggregate of (i) the net present
         value (at a discount rate equal to the debt interest rate used in the
         preparation of the Conversion Base Case) of Total Cash Flow for such
         year and each such subsequent year during the then remaining Tranche B
         Term, LESS (ii) interest (at a rate equal to the debt interest rate
         used in preparation of the Conversion Base Case) payable for such year
         and each such subsequent year during the then remaining Tranche B Term
         on Indebtedness secured (or entitled to be secured) by a Lien on any
         of the Collateral and scheduled to be outstanding after the Tranche B
         Term, to (b) the sum (without duplication) of (i) the then outstanding
         principal amount of the Tranche B Loan, PLUS (ii) the principal amount
         of any Indebtedness then outstanding and secured (or entitled to be
         secured) by a Lien on any of the Collateral and scheduled to be repaid
         during the Tranche B Term, PLUS (iii) the principal amount of all
         other Indebtedness (other than Subordinated Indebtedness and


                                      -6-

<PAGE>   12



         (to the extent agreed by AEF) Contingent Obligations) of the Customer
         then outstanding and scheduled to be repaid during the Tranche B Term.

         "CATEGORY 3 PREVIEW" means the preview process described in Section
         9.01.

         "C-BAND TRANSPONDERS" means transponders operating in the portion of
         the radio-frequency spectrum that covers approximately 4 gigahertz to
         8 gigahertz.

         "CLA I" means the Arianespace Customer Loan Agreement of even date
         herewith between CD Radio Inc. and AEF, providing for the financing of
         launch costs under the Launch Services Agreement with respect to
         "Launch  # 1" as such term is defined in paragraph 6.1 of the Launch
         Services Agreement.

         "CLOSING DATE" means the date on which all conditions precedent set
         forth in Section 4.01 are satisfied by the Customer or waived by AEF
         as evidenced by a certificate to such effect executed and delivered by
         AEF to the Customer.

         "CODE" means the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" means all right, title and interest in and to:

                  (a)      the Satellite;

                  (b)      the Satellite Purchase Agreement;

                  (c)      the TTC&M Facilities, if at any time owned by the
                           Customer, or otherwise, the TTC&M Contract;

                  (d)      any Government Approval relating to the Satellite,
                           and any other Government Approval relating to any
                           other part of the Project owned by the Customer, but
                           excluding any such Government Approval relating
                           solely to the construction of any portion of the
                           Project if such construction has been fully
                           completed;

                  (e)      any intangible rights necessary to control, operate
                           and transfer ownership of the Satellite;

                  (f)      the benefits of any indemnity, warranty or guarantee
                           in respect of the Satellite, the TTC&M Facilities or
                           the assets referred to in (g) below (but only if and
                           to the extent that the Project Financing is also
                           secured by a Lien on such assets);

                  (g)      gateway, ground reception and similar facilities
                           owned by the Customer or any Affiliate thereof or
                           leasehold interests in such facilities leased by the
                           Customer or any Affiliate thereof, each to the
                           extent related to the Satellite where the Project
                           Financing is also secured by a Lien on such
                           gateways, ground reception and similar facilities,
                           and if, at any time


                                      -7-

<PAGE>   13



                           after the date hereof, (i) the Customer or any
                           Affiliate thereof acquires title to any of the
                           foregoing items or (ii) any of the foregoing items
                           becomes subject to a Lien for the benefit of the
                           Project Lenders pursuant to any Project Financing,
                           such items shall thereupon form part of the
                           Collateral (it being understood and agreed that
                           until such time, if any, as either of the conditions
                           referred to in the foregoing subclauses (i) and (ii)
                           of this clause (g) is satisfied, the items referred
                           to in this paragraph (g) shall not be deemed to be
                           Collateral for purposes of this Agreement);

                  (h)      if the Customer shall have been determined to be a
                           Category 1C Customer or a Category 2 Customer, the
                           Qualified Lease Agreements;

                  (i)      if the Customer shall have been determined to be a
                           Category 1C Customer or Category 2 Customer, the
                           Transponder Lease Agreements (other than Qualified
                           Lease Agreements), PROVIDED that the Customer shall
                           not be in breach of its obligations under this
                           Agreement to the extent that the Customer has
                           diligently sought to effect an assignment of such
                           agreements by eliciting the lessee's consent to such
                           assignment and is unable to achieve the same;

                  (j)      if the Customer shall have been determined to be a
                           Category 3 Customer that is a Leased Satellite
                           Customer, the Transponder Lease Agreements, PROVIDED
                           that the Customer shall not be in breach of its
                           obligations under this Agreement to the extent that
                           the Customer has diligently sought to effect an
                           assignment of such agreements by eliciting the
                           lessee's consent to such assignment and is unable to
                           achieve the same, PROVIDED that such agreements
                           constituting at least fifty percent (50%) of
                           aggregate projected revenues reflected in the
                           Business Plan shall have been assigned to the
                           Security Agent with all required consents thereto
                           obtained;

                  (k)      if the Customer shall have been determined to be a
                           Category 3 Customer that is not a Leased Satellite
                           Customer, the Transponder Lease Agreements;

                  (l)      if the Customer shall have been determined to be a
                           Category 1C Customer, a Category 2 Customer or a
                           Category 3 Customer, the Revenue Accounts and all
                           cash balances and investments held therein;

                  (m)      in relation to a Customer offering an equity pledge
                           in accordance with Section 9.04(c)(i), one hundred
                           percent (100%) of its stock certificates or other
                           equity interests in such Customer or the special
                           purpose vehicle, as the case may be;



                                      -8-

<PAGE>   14



                  (n)      in relation to all Customer Categories, all proceeds
                           deriving from the above-specified Collateral in
                           subsections (a) through (m) above, as the same may
                           be supplemented pursuant to Section 9.03;

                  (o)      rights to receive certain payments under the Launch
                           Services Agreement provided or to be provided for in
                           the Multiparty Agreement as a "delegation" under
                           French law;

                  (p)      the proceeds of insurance maintained pursuant to
                           Section 6.06 in respect of which the Security Agent
                           is required by Section 6.06(c) to be named as loss
                           payee;

                  (q)      any other rights or assets constituting additional
                           Collateral pursuant to Section 9.03; and

                  (r)      any collateral provided by the Customer or an
                           Affiliate thereof to secure a loan by AEF to the
                           Customer or such Affiliate pursuant to another
                           customer loan agreement, provided that the Customer
                           or such Affiliate shall have been determined to be
                           in the same "Customer Category" in such other
                           customer loan agreement as hereunder.

         It is acknowledged and agreed that, solely for purposes of determining
         whether the items referred to in the foregoing clauses (f) and (g)
         constitute Collateral, the term "Project Financing" as used in said
         clauses shall be deemed not to include any financing that is not
         secured by any of the items referred to in any of the other clauses of
         this definition.

         "COLLATERAL DOCUMENTS" means the Assignment and Security Agreement,
         the TTC&M Mortgage (if applicable), the Consents to Assignment, and
         other documents to be entered into in order that a Lien is granted and
         perfected on or in the Collateral in accordance with the terms hereof
         and all financing statements, registrations and other filings (or
         comparable documents) now or hereafter filed or to be filed in
         connection therewith and (without prejudice to the provisos contained
         in clauses (i) and (j) of the definition of "Collateral" in this
         Section 1.01) any consents required from any Person in connection
         therewith.

         "COMMITMENT" means, during the Tranche A Term, the Tranche A
         Commitment, and, during the Tranche B Term, the Conversion Commitment.

         "COMMITMENT FEE" means the fee payable quarterly in arrears by the
         Customer to AEF calculated as a percentage per annum of the daily
         average unused portion of the Tranche A Commitment Amount for each day
         during the preceding quarterly period, in the amount and as set forth
         in the Fee Letter.

         "COMPARABLE FINANCING TRANSACTION" means the Customer's most recent
         long-term, asset-based financing of comparable term, with comparable
         security and on comparable conditions funded with debt from
         international banks, if such financing


                                      -9-

<PAGE>   15



         was entered into not earlier than the date falling two (2) years prior
         to the date hereof and not later than the date hereof.

         "CONSENTS TO ASSIGNMENT" mean the acknowledgments and consents to
         assignment to be given by Lessees of Qualified Lease Agreements in
         accordance with the terms hereof.

         "CONSOLIDATED NET WORTH" means the aggregate, on any date of
         determination, of:

                  (a)      the amount paid up or credited as paid up on the
                           issued ordinary and preference share capital of the
                           Customer Group (excluding any Disqualified Capital
                           Stock); and

                  (b)      the amount standing to the credit of the capital and
                           revenue reserves of the Customer Group;

         but adjusted (to the extent that the following items have not already
         been added, deducted or excluded in calculating (a) or (b) above) by:

                  (i)      adding any amount standing to the credit of the
                           profit and loss account for members of the Customer
                           Group since the Base Date to the extent the amount
                           is not attributable to any dividend or other
                           distribution declared, recommended or made by any
                           member of the Customer Group (other than to another
                           member of the Customer Group);

                  (ii)     deducting any amount standing to the debit of the
                           profit and loss account for members of the Customer
                           Group since the Base Date;

                  (iii)    deducting the sum of the following: cost of treasury
                           shares and the book value of all assets that should
                           be classified as intangibles (without duplication of
                           deductions in respect of items already deducted in
                           arriving at surplus and retained earnings) but in
                           any event including licenses, goodwill, minority
                           interests, research and development costs,
                           trademarks, trade names, copyrights and patents and
                           franchises;

                  (iv)     reflecting any variation in the amount of the
                           Customer's issued share capital and capital and
                           revenue reserves after the Base Date; and

                  (v)      reflecting any variation in the interest of the
                           Customer in any other member of the Customer Group
                           since the Base Date.

         "CONSTRUCTION AND PAYMENT SCHEDULE" means the construction and payment
         schedule prepared and certified by a Responsible Officer of the SPA
         Party setting forth the specific dates for payments to be made under
         the Satellite Purchase Agreement and the TTC&M Contract, and the
         maximum amount of each such payment, as such specific dates and
         payment amounts may be adjusted pursuant to the terms of the Satellite
         Purchase Agreement and the TTC&M Contract (as the case may be).


                                      -10-

<PAGE>   16



         "CONSTRUCTIVE TOTAL FAILURE" has the meaning ascribed to that term or
         a term substantially similar to such term in the launch and initial
         operations insurance or in the in-orbit insurance (whichever is then
         in effect) procured or caused to be procured by the Customer as
         required by Section 6.06(b).

         "CONTINGENT OBLIGATION" means, as applied to any Person, any direct or
         indirect liability of that Person with respect to any Indebtedness,
         lease, dividend, letter of credit or other obligation (for purposes of
         this definition, the "PRIMARY OBLIGATIONS") of another Person (for
         purposes of this definition, the "PRIMARY OBLIGOR"), including any
         obligation of that Person, whether or not contingent (a) to purchase,
         repurchase or otherwise acquire such primary obligations or any
         property constituting direct or indirect security therefor, (b) to
         advance or provide funds (i) for the payment or discharge of any such
         primary obligation or (ii) to maintain working capital or equity
         capital of the primary obligor or otherwise to maintain the net worth
         or solvency or any balance sheet item, level of income or financial
         condition of the primary obligor, (c) to purchase property, securities
         or services primarily for the purpose of assuring the owner of any
         such primary obligation of the ability of the primary obligor to make
         payment of such primary obligation, (d) otherwise to assure or hold
         harmless the holder of any such primary obligation against loss in
         respect thereof or (e) to purchase or otherwise acquire, or otherwise
         to assure a creditor against loss in respect of, any Indebtedness.
         For purposes of this definition, the amount of any Contingent
         Obligation shall be deemed to be an amount equal to the maximum
         reasonably anticipated liability in respect thereof, as reasonably
         determined by such Person's independent auditors.

         "CONTRACT" means (a) any agreement (whether bilateral, unilateral,
         executory or non-executory, and whether a Person entitled to rights
         thereunder is so entitled directly or as a third party beneficiary),
         including an indenture, lease or license or (b) any deed or other
         instrument of conveyance.

         "CONVERSION" has the meaning specified in Section 2.01(b).

         "CONVERSION AMOUNT" means the amount of Tranche A Outstandings
         actually converted to the Tranche B Loan on the Conversion Date, the
         aggregate of such amounts not to exceed the Conversion Commitment
         Amount.

         "CONVERSION BASE CASE" means the Base Case for the Customer as
         described in Section 9.02.

         "CONVERSION BUSINESS PLAN" means the Business Plan of the Customer
         submitted to AEF as described in Section 9.02, which shall be
         sufficient to enable AEF to determine whether the applicable
         Conversion Conditions will have been satisfied as of the Conversion
         Commitment Date in accordance with Section 9.02(e), and containing at
         a minimum, and without limitation, the following information with
         respect to the Project:



                                      -11-

<PAGE>   17



                  (a)      details of the Project sponsor or Project sponsors,
                           a general description of the Customer's business and
                           organization, the then-current equity holdings
                           therein and general biographical information as to
                           key management team members;

                  (b)      projections of all capital and operating costs
                           (including material taxes) and revenues the Project
                           is projected to generate with sufficient information
                           (including the details of assumptions underlying
                           such projections) in each case for AEF and the
                           Lenders to assess the Project;

                  (c)      a general description of the target market for the
                           Project, which shall include a statement of the
                           percentage of such target market that the Customer
                           proposes to capture;

                  (d)      a technical description of the Project;

                  (e)      an overview of the laws and regulations applicable
                           to the Project and the status of requisite
                           governmental approvals for the construction, launch
                           and operation thereof;

                  (f)      a description of the Collateral that is expected to
                           be available for the benefit of AEF and the Lenders
                           and whether a first priority, perfected Lien will
                           and can be granted and perfected thereon;

                  (g)      a general description of the proposed sources of
                           finance for the Project, along with a description of
                           the manner in which such financing will be secured;

                  (h)      a general description of risks material to the core
                           business of the Project to the extent not otherwise
                           described in this definition of Conversion Business
                           Plan or covered by insurance; and

                  (i)      details of underlying economic assumptions and
                           factors, including inflation, interest and exchange
                           rates.

         "CONVERSION COMMITMENT" means the commitment by AEF to the Customer
         issued on the Conversion Commitment Date for the Conversion (or
         Reconversion, as the case may be) of the Conversion Commitment Amount
         upon the terms and subject to the conditions of this Agreement,
         relating to a Launch (or Reflight, as the case may be) to occur on the
         then-scheduled date of Launch and extending up to ninety (90) days
         after such date (to accommodate possible launch postponements).

         "CONVERSION COMMITMENT AMOUNT" means the amount of Tranche A
         Outstandings (including Tranche A Loans, the proceeds of which have
         been or will be applied to the payment of Finance Costs) that may be
         converted to a Tranche B Loan on the Conversion Date, such amount
         being equal to the product of the Tranche B Advance Rate and the
         Launch Costs (which product in any event shall not exceed an amount


                                      -12-

<PAGE>   18



         equal to the lesser of (a) sixty percent (60%) of the Launch Costs and
         (b) eighty million Dollars ($80,000,000) less the "Conversion Amount"
         as such term is defined in CLA I).

         "CONVERSION COMMITMENT DATE" means the date, if any, on which AEF
         shall deliver the Conversion Commitment Letter following the
         determination set forth in Section 9.02(e).

         "CONVERSION COMMITMENT LETTER" means the notice given by AEF to the
         Customer on the Conversion Commitment Date, identifying the applicable
         Customer Category and setting forth the terms and conditions of the
         Conversion Commitment.

         "CONVERSION CONDITIONS" means the conditions set forth in Section
         4.02.

         "CONVERSION DATE" means the date on which Conversion occurs.

         "CONVERSION FEE" means the fee payable by the Customer on the
         Conversion Date to AEF calculated as a percentage of the Conversion
         Amount as set forth in the Fee Letter.

         "CONVERSION FINANCIAL STATEMENTS" has the meaning specified in Section
         5.10(b).

         "CONVERSION REQUEST DATE" means the date that the Customer delivers to
         AEF the items referred to in Section 9.02(d).

         "CONVERT" means the occurrence of Conversion with respect to the
         Tranche A Loans.

         "COVERED PERSON" has the meaning specified in Section 10.04(b).

         "COVERED PROPERTY" has the meaning specified in Section 6.06(a).

         "COVERED TAXES" has the meaning specified in Section 3.01(d).

         "CREDIT RATING" means, at any time, the credit rating most recently
         established by a Major Rating Agency for the Customer's Relevant Debt
         (as defined in the following sentence).  For purposes of the preceding
         sentence, "CUSTOMER'S RELEVANT DEBT" means money borrowed by the
         Customer (a) the repayment of which is secured by, and only by, a
         satellite comparable to the Satellite (including in respect of the
         intended use of the Satellite) and other collateral comparable to the
         Collateral, and is not supported by any other type of
         credit-enhancement, (b) on terms and conditions comparable to the
         terms and conditions of this Agreement, the Note and the Collateral
         Documents that are applicable after the Conversion Date and (c) where
         the ratio of (i) the amount, as reasonably determined by a qualified
         appraiser in a written appraisal prepared prior to the establishment
         of such credit rating, representing the assumed proceeds of a sale
         realizable from an orderly remarketing of such satellite under normal
         market conditions prevailing at the date of appraisal to (ii) all
         Indebtedness of the Customer secured by a Lien on such satellite on
         the date of the establishment of


                                      -13-

<PAGE>   19



         such credit rating does not exceed the ratio of (x) the Assumed
         Distress Value to (y) Total Senior Debt Outstanding on the date of the
         establishment of such Credit Rating; provided that if no such borrowed
         money of the Customer exists, "CUSTOMER'S RELEVANT DEBT" means the
         Customer's senior, long-term debt that is not secured or otherwise
         credit-enhanced, if any.

         "CURRENCY OF OBLIGATION" has the meaning specified in Section
         10.07(a).

         "CURRENCY OF PAYMENT" has the meaning specified in Section 10.07(a).

         "CUSTOMER" has the meaning specified in the preamble to this
         Agreement.

         "CUSTOMER CATEGORY" means the category designated for the Customer
         with respect to this Agreement by AEF on the Conversion Commitment
         Date pursuant to Section 9.02(e) and in accordance with the criteria
         set forth in the Annexes attached hereto.

         "CUSTOMER GROUP" means the Customer and, if the Customer shall have
         been determined to be a Category 1 Customer, the consolidated
         Subsidiaries of the Customer.  All financial calculations hereunder to
         be made for the Customer Group shall, if the Customer shall have been
         determined to be a Category 1 Customer, be made on a consolidated
         basis in accordance with Generally Accepted Accounting Principles.

         "DECONVERSION" has the meaning specified in Section 2.04(a).

         "DEFAULT" means any event which, with the giving of notice or the
         lapse of time or both of the foregoing, would constitute an Event of
         Default.

         "DEFAULT RATE" has the meaning specified in Section 2.07(c)(ii).

         "DETERMINATION" has the meaning specified in Section 10.19.

         "DISQUALIFIED CAPITAL STOCK" means capital stock of the Customer that
         may be redeemed, purchased or repurchased, or in respect of which
         sinking fund payments may be made, other than solely at the option of
         the Customer.

         "DISTRESS RECOVERY VALUE" means the product of the Assumed Distress
         Value multiplied by the ratio of the Conversion Amount to the Total
         Senior Debt Outstanding as of the Conversion Date.

         "DOLLARS" and "$" means lawful money of the United States of America.

         "DOMICILED" with respect to any Person means each jurisdiction:

                  (a)      in which such Person is incorporated or organized;



                                      -14-

<PAGE>   20



                  (b)      that is the primary jurisdiction in which such
                           Person is domiciled for the purposes of calculating
                           corporation or other taxes on its revenues or
                           capital; or

                  (c)      in which, in accordance with the determination of
                           any Lender, consistently applied, pursuant to the
                           policies or any decision of a Governmental Authority
                           or any court having jurisdiction over such Lender,
                           or another authority with which such Lender
                           customarily complies, such Person is domiciled.

         "EBITDA" ("earnings before interest, tax, depreciation and
         amortization") means, for any period, the net income or net loss (or
         the equivalent) for the Customer Group for such period, determined in
         accordance with Generally Accepted Accounting Principles as follows
         (without duplication), using items reflected in the financial
         statements of the Customer Group, to the extent applicable:

                  (a)      after adding back (to the extent otherwise deducted)
                           any depreciation and amortization;

                  (b)      after adding back (if negative and to the extent
                           otherwise deducted) or after deducting (if positive
                           and to the extent otherwise added) any extraordinary
                           items, including without limitation those that would
                           be treated as "exceptional items" under generally
                           accepted accounting principles in the United Kingdom
                           in cases where such generally accepted accounting
                           principles are the Specified GAAP for purposes
                           hereof;

                  (c)      after adding back (to the extent otherwise deducted)
                           corporate taxes and the equivalents in any relevant
                           jurisdiction;

                  (d)      after adding back (if negative and to the extent
                           otherwise deducted) or after deducting (if positive
                           and to the extent otherwise added) interest expense
                           and interest income, whether or not paid, deferred
                           or capitalized;

                  (e)      before taking into account, to the extent not
                           received by the Customer Group in cash during such
                           period, any income of the Customer Group from any
                           Affiliate or other investments (or any such income
                           accrued in respect of any prior period which has not
                           previously been paid), and before taking into
                           account, to the extent not received by the Customer
                           Group in cash during such period, any share of the
                           profit of any Affiliate or other investments and
                           after taking into account dividends received in cash
                           during such period from any Affiliate or other
                           investments;

                  (f)      after adding back (to the extent otherwise deducted)
                           the amount of pension contributions and vacation and
                           health benefits provided by the


                                      -15-

<PAGE>   21



                           Customer Group in respect of such period but not
                           paid in cash, to the extent only that they are not
                           actually paid in cash (and, for this purpose, if
                           such amount for any annual accounting period is not
                           allocated on the basis of quarterly accounting
                           periods, it shall be deemed allocated equally to
                           each of the four (4) quarters comprised in such
                           annual accounting period);

                  (g)      if the Customer shall have been determined to be a
                           Category 1C Customer, after deducting (to the extent
                           otherwise included) any gain over book value arising
                           in favor of the Customer Group on the sale, lease or
                           other disposal of any asset (other than the sale of
                           trading stock) during such period and any gain
                           arising on any revaluation of any asset during such
                           period;

                  (h)      after adding back (to the extent otherwise deducted)
                           any loss against book value incurred by the Customer
                           Group on the sale, lease or other disposal of any
                           asset (other than the sale of trading stock) during
                           such period, or any loss on any revaluation of any
                           asset during such period; and

                  (i)      if the Customer shall have been determined to be a
                           Category 1 Customer, after deducting (to the extent
                           otherwise included) the amount of profit (or adding
                           back the amount of any loss) of the Customer Group
                           for such period which is attributable to minority
                           interests in any Subsidiary of the Customer.

         "ECA" means any one or more than one export credit agency as AEF may
         approve that, at the request of the Customer, AEF, AE or any Lender,
         provides ECA Country Risk Coverage or ECA Enhancement.

         "ECA COUNTRY RISK COVERAGE" means political risk coverage, in
         accordance with the statutory limitations in effect on the date hereof
         on such coverage (together with changes thereto as may be acceptable
         to AEF) available from the applicable ECA in an amount and on terms
         and conditions satisfactory to AEF, provided by one or more ECAs in
         support of the Tranche B Loan.

         "ECA ENHANCEMENT" means commercial risk coverage, in accordance with
         the statutory limitations in effect on the date hereof on such
         coverage (together with changes thereto as may be acceptable to AEF)
         available from the applicable ECA in an amount and on terms and
         conditions satisfactory to AEF, provided by one or more ECAs in
         support of the Tranche B Loan.

         "ECA GUARANTY FEE" means the fees payable by the Customer to AEF or
         any ECA in connection with ECA Country Risk Coverage or ECA
         Enhancement as advised by the relevant ECAs.



                                      -16-

<PAGE>   22



         "ECA PERCENTAGE" means the percentage of the Tranche B Loan guaranteed
         by ECA Enhancement, expressed as a percentage of the aggregate total
         amount of the Tranche B Loan then outstanding.

         "ECU" means the European Currency Unit being the unit of account used
         by the European Monetary System, the composition of which may from
         time to time be varied by the European Union.

         "ELIGIBLE ASSIGNEE" means (a) any Lender for itself or on behalf of
         any other Lender or Lenders or AEF, (b) a Subsidiary of any Person
         described in clause (a) above (for purposes of this definition, such
         Person being herein referred to as a "PERMITTED INSTITUTION") if such
         Permitted Institution enters into a legal, valid, binding and
         enforceable written guaranty, providing that such Permitted
         Institution shall be primarily and unconditionally liable to the
         Customer for all obligations of its Subsidiary, (c) any Affiliate of
         AEF or (d) any private or public holder or holders of any Indebtedness
         of AEF pursuant to any private or public offering or any trustee or
         institution acting on their behalf.

         "ENVIRONMENTAL CLAIM" means all claims, however asserted, by any
         Governmental Authority or other Person alleging potential liability or
         responsibility for violation of any Environmental Law or for release
         or injury to the environment or threat to public health, personal
         injury (including sickness, disease or death), property damage,
         natural resources damage or otherwise alleging liability or
         responsibility for damage (punitive or otherwise), cleanup, removal,
         remedial or response costs, restitution, civil or criminal penalties,
         injunctive relief or other type of relief, resulting from or based
         upon (a) the presence, placement, discharge, emission or release
         (including intentional and unintentional, negligent and non-negligent,
         sudden or non-sudden, accidental or non-accidental placement, spills,
         leaks, discharges, emissions or releases) of any Hazardous Material
         at, in or from property, whether or not owned by the Customer or (b)
         any other circumstances forming the basis of any violation, or alleged
         violation, of any Environmental Law.

         "ENVIRONMENTAL LAWS" means all national, local or foreign laws,
         statutes, common law duties, rules, regulations, ordinances and codes,
         together with all administrative orders, directed duties, requests,
         licenses, authorizations and permits of, and agreements with, any
         Governmental Authorities that are binding on, or are customarily
         complied with by, the Customer, in each case relating to environment,
         health and safety.

        "ENVIRONMENTAL PERMITS" has the meaning specified in Section 5.11.

         "EQUIPMENT COST" means the aggregate of the costs for the construction
         and launch of the Satellite, the insurance procured and maintained for
         the Satellite and the construction of the TTC&M Facilities.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended.



                                      -17-

<PAGE>   23



         "ERISA AFFILIATE" means any Person that for purposes of Title IV of
         ERISA is a member of the controlled group of the Customer, or under
         common control with the Customer, within the meaning of Section 414 of
         the Code.

         "EURO" means the unit of currency used or to be used in the European
         monetary system following implementation of the European monetary
         union.

         "EVENT OF DEFAULT" means any of the events specified in Section 8.01.

         "EVENT OF LOSS" means, with respect to the Satellite, any loss of,
         destruction of or damage to the Satellite resulting in a failure to
         achieve its performance specifications and meet its intended purpose,
         any condemnation, seizure or taking, by exercise of the power of
         eminent domain by any Governmental Authority or other Person, thereof
         or the requisition of the use thereof pursuant to any final judgment,
         order, decree or proclamation remaining unvacated, undischarged,
         unstayed or unbonded pending appeal for a period of ninety (90) days
         after the entry thereof, in all events including any Total Failure,
         Constructive Total Failure or Partial Failure.

         "EXCESS CASH FLOW" means, for any period, the excess of (a) the sum of
         (i) EBITDA for such period and (ii) the decrease, if any, in Non-Cash
         Working Capital during such period, over (b) the sum of (i) Total
         Interest for such period, (ii) income taxes of the Customer Group paid
         in cash during such period, (iii) capital expenditures of the Customer
         Group during such period, (iv) scheduled payments of principal of
         Indebtedness made by any member of the Customer Group during such
         period other than payments of Indebtedness owing to any member of the
         Customer Group, (v) voluntary prepayments of principal of the Tranche
         B Loan made during such period pursuant to Section 2.05(a) and (vi)
         the increase, if any, in Non-Cash Working Capital during such period.

         "EXPERT STUDIES" means technical, feasibility and marketing studies,
         prepared in respect of a Customer that may be or has been determined
         to be a Category 3 Customer, dated no earlier than fifteen (15) days
         prior to the date of delivery thereof to AEF, if appropriate to the
         Business Plan and required pursuant to the applicable Conversion
         Conditions, in form and substance acceptable to AEF, prepared by an
         expert or experts selected by AEF and acceptable to the Customer.

         "EXPORT LICENSE" means any license required to be granted to the
         Customer or the Satellite Manufacturer, by the government of the
         country of manufacture of the Satellite and the country of any
         component thereof or any other asset necessary to the Project
         requiring an export license, approving the export of the Satellite and
         any such component or asset.

         "FAIR MARKET VALUE" means the cash price in Dollars that would be
         obtained for the Satellite (together with the launch services for the
         Satellite, the supply of tracking, telemetry, control and monitoring
         facilities, and related insurance), in an arm's length sale
         transaction between an informed and willing seller and an informed and
         willing purchaser or user, each unrelated to the Customer or any
         Affiliate thereof and under


                                      -18-

<PAGE>   24



         no compulsion to effectuate the transaction and each having knowledge
         of all relevant facts, as determined by the Appraiser in the
         Appraisal.

         "FEE LETTER" means the letter dated as of the date hereof by AEF and
         acknowledged and agreed to by the Customer, specifying the fees
         referred to therein, as described in Section 2.08, and the Applicable
         Margin during the Tranche A Term.

         "FINANCE COSTS" means any one or more of, as determined by AEF, the
         ECA Guaranty Fee, the Upfront Fee and interest on the Tranche A Loans,
         in each case, to the extent capitalized pursuant to Section 2.07(d),
         as permitted by AEF.

         "FUNDED DEBT" means, for any Person, Indebtedness of such Person
         having a final maturity date more than one (1) year after the date of
         issuance, incurrence or assumption thereof by such Person, including
         the current portion of any such Indebtedness and including
         Indebtedness that is renewable or extendable, at the option of the
         obligor, to a date more than one (1) year after the date of issuance,
         incurrence or assumption thereof.

         "FUNDING-RELATED TAXES" has the meaning specified in Section 3.01(c).

         "GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" means (a) at any time prior
         to the Conversion Date (for all purposes hereof other than a Category
         3 Preview, the determination of whether the Customer is to be a
         Category 1A Customer, a Category 1B Customer, a Category 1C Customer,
         a Category 2 Customer or a Category 3 Customer, and the establishment
         of Conversion Conditions), generally accepted accounting principles in
         effect at such time in a jurisdiction in respect of which an
         internationally recognized independent public accounting firm has
         furnished an opinion (containing solely qualifications acceptable to
         AEF) in connection with its auditing of the Customer's financial
         statements, (b) at any time on or after the Conversion Date (solely
         for the purpose of defining the preparation and presentation of
         financial statements to be delivered under Section 6.01),  generally
         accepted accounting principles in effect at such time in a country
         listed in ANNEX 4 hereto or (c) at all times and for all purposes not
         covered by the foregoing clauses (a) and (b), Specified GAAP, in each
         case referred to in the foregoing clauses (a), (b) and (c),
         consistently applied.

         "GOVERNMENT APPROVALS" means all Telecommunications Approvals, all
         Export Licenses, all foreign exchange control approvals, all
         Environmental Permits and any other authorizations, consents,
         approvals, licenses, rulings, permits, certifications, exemptions,
         filings or registrations by or with any Telecommunications Authority
         or other Governmental Authority required by applicable Requirements of
         Law to be obtained or held by the Customer in connection with (a) the
         due execution, delivery and performance by the Customer of its
         obligations, and the exercise of its rights, under the Loan Documents,
         the Satellite Contracts and any other agreement or instrument entered
         into from time to time relating to the Project, (b) the construction
         and completion of the Project and operation of the Project as
         contemplated by the Satellite Contracts and, if applicable, the
         Business Plan, (c) the export of the Satellite


                                      -19-

<PAGE>   25



         or any of its components and (d) the grant of the Liens created by the
         Collateral Documents and the validity, enforceability and perfection
         thereof and the exercise by the Security Agent of its rights and
         remedies thereunder.

         "GOVERNMENTAL AUTHORITY" means any international body or any nation or
         government, any state or other political subdivision thereof, any
         central bank (or similar monetary or regulatory authority) thereof,
         any entity exercising executive, legislative, judicial, regulatory or
         administrative functions of or pertaining to government and any
         corporation or other entity owned or controlled, through stock or
         capital ownership or otherwise, by any of the foregoing.
    
         "GUARANTOR" or "GUARANTORS" has the meaning specified in ANNEX 1
         hereto.

         "HAZARDOUS MATERIAL" means all those substances that are regulated by,
         or which may form the basis of liability under, any Environmental Law,
         including all substances identified under any Environmental Law as a
         pollutant, contaminant, waste, solid waste, hazardous waste, hazardous
         constituent, special waste, hazardous substance, hazardous material or
         toxic substance, or petroleum or petroleum derived substance or waste.

         "INDEBTEDNESS" means, without duplication, any indebtedness of any
         Person for or in respect of:

                  (a)      borrowed money and any other amount raised under any
                           other transaction having the commercial effect of
                           borrowing;

                  (b)      the amount of any liability in respect of the
                           purchase price for any assets or services, the
                           payment of which is deferred (including any deferred
                           amount payable under the Satellite Contracts);

                  (c)      all reimbursement obligations with respect to surety
                           bonds, letters of credit, bankers' acceptances and
                           similar instruments (in each case, whether or not
                           matured);

                  (d)      all obligations evidenced by notes, bonds,
                           debentures or similar instruments, including
                           obligations so evidenced incurred in connection with
                           the acquisition of property, assets or businesses;

                  (e)      all indebtedness created or arising under any
                           conditional sale or other title retention agreement,
                           or incurred as financing, in either case with
                           respect to property acquired by the Person (even
                           though the rights and remedies of the seller or bank
                           under such agreement in the event of a default are
                           limited to repossession or sale of such property);

                  (f)      all Capital Lease Obligations;



                                      -20-

<PAGE>   26



                  (g)      the aggregate amount that would be payable by such
                           Person under all Rate Contracts to which it is a
                           party if such Rate Contracts were terminated at the
                           time of determination minus (to the extent such
                           aggregate amount is subject to reduction pursuant to
                           valid and enforceable netting arrangements (either
                           within such Rate Contracts or in separate
                           agreements) with the respective counterparties) the
                           amounts payable by the respective counterparties
                           under such Rate Contracts upon such termination at
                           such time;

                  (h)      indebtedness created pursuant to leveraged lease or
                           sale and leaseback financings intended to be repaid
                           from the rentals payable by the Person under such
                           leveraged lease or sale and leaseback financing;

                  (i)      all Contingent Obligations;

                  (j)      any lease which, in accordance with any applicable
                           tax law, is classified as a loan or finance lease;
                           and

                  (k)      all Indebtedness referred to in clauses (a) through
                           (k) above secured by (or for which the holder of
                           such Indebtedness has an existing right, contingent
                           or otherwise, to be secured by) any Lien upon or in
                           property (including accounts and contract rights)
                           owned by such Person, even though such Person has
                           not assumed or become liable for the payment of such
                           Indebtedness.

         In calculating the amount of any Indebtedness for all purposes hereof,
         there shall be excluded any amount thereof that has been irrevocably
         and unconditionally defeased by the deposit of cash or securities with
         the holder or holders, or an agent or trustee for the holder or
         holders, of such Indebtedness in accordance with the indenture, lease
         or other agreement governing the terms and conditions of such
         Indebtedness.

         "IN-ORBIT COMMISSIONING DATE" means the date on which initial in-orbit
         tests on the Satellite have been successfully completed and the
         Satellite enters commercial service, as evidenced by a certificate of
         a Responsible Officer of the SPA Party bearing such date and
         certifying that the results of the initial in-orbit tests either (a)
         comply with the required Satellite performance specifications as set
         forth in the Satellite Purchase Agreement or (b) are otherwise
         acceptable to the SPA Party.

         "INSOLVENCY PROCEEDING" means, with respect to any Person (a) any
         case, action, petition or proceeding before any court relating to
         bankruptcy, reorganization, insolvency, liquidation, receivership,
         dissolution, winding-up or relief of debtors or similar proceeding; or
         (b) any general assignment for the benefit of creditors, composition,
         marshalling of assets for creditors or other similar arrangement,
         which in each case shall include any analogous proceeding or
         arrangement under the laws of the jurisdiction in which such Person is
         incorporated or any jurisdiction in which such Person carries on
         business that is recognized by a Governmental Authority of competent
         jurisdiction in the jurisdiction of incorporation of such Person.


                                      -21-

<PAGE>   27



         "INSURED PARTIES" means AEF, the Security Agent, the Lenders, the
         Project Agent and the Project Lenders.

         "INTERCREDITOR AGREEMENT" means, if applicable, the Intercreditor
         Agreement to be negotiated in good faith and entered into on the date
         specified in Section 2.11 among AEF, the Lenders (or an agent acting
         on their behalf), the Project Agent (on behalf of the Project
         Lenders), the Security Agent and the applicable ECAs (if relevant),
         providing for, among other things, the sharing among such parties of
         the Liens on the Collateral and the proceeds thereof.

         "INTEREST BASIS" means, with respect to any Loan or unpaid amount for
         any specified period:

                  (a)      the rate of interest per annum that appears on page
                           3750 or any successor page of the Telerate screen
                           which displays British Bankers Association
                           Settlement Rates for deposits in Dollars, of the
                           offered quotation for deposits in Dollars for such
                           specified period, without rounding, at or about
                           11:00 a.m. (London time) on the Quotation Date; or

                  (b)      if the rate described in clause (a) does not so
                           appear, the rate per annum at which Dollar deposits
                           are offered in the London interbank market at such
                           time for such specified period as evidenced on
                           another financial information service publishing
                           such rates as agreed by the Customer and AEF; or

                  (c)      if the rates described in clauses (a) and (b) above
                           do not appear (including, in the case of said clause
                           (b), by reason of the Customer and AEF failing to
                           agree on an alternative financial information
                           service), the arithmetic mean (rounded upwards, if
                           not already such a multiple, to the nearest whole
                           multiple of one-sixteenth of one percent (1/16%)) of
                           the rates (as notified to AEF) at which each of the
                           Reference Banks was offering to prime banks in the
                           London interbank market deposits in Dollars for the
                           specified period at or about 11:00 a.m. (London
                           time) on the Quotation Date for such specified
                           period.

         For the purposes of this definition "specified period" shall mean the
         Interest Period of such Loan or, as the case may be, the period in
         respect of which the Interest Basis falls to be determined in relation
         to such unpaid amount.

         "INTEREST PAYMENT DATE" has the meaning specified in Section 2.07(b).

         "INTEREST PERIOD" means, with respect to any Loan, (a) the three (3)
         month period commencing on the Business Day such Loan is disbursed and
         each three (3) month period thereafter ending on the Interest Payment
         Date of the final whole three (3) month period immediately preceding
         the Conversion Commitment Date, (b) the one (1) month period
         commencing on the Interest Payment Date immediately


                                      -22-

<PAGE>   28



         preceding the Conversion Commitment Date and each one (1) month period
         thereafter ending on the Interest Payment Date immediately following
         the In-Orbit Commissioning Date, and (c) the period from the end of
         the immediately preceding one (1) month period to the date that is
         three (3) months after the In-Orbit Commissioning Date and each three
         (3) month period thereafter ending on the date that such Loan is
         repaid or prepaid in full, in each case, subject to the following:

                  (i)      any Interest Period that would otherwise end on a
                           day that is not a Business Day shall be extended to
                           the next succeeding Business Day unless the result
                           of such extension would be to carry such Interest
                           Period into another calendar month, in which event
                           such Interest Period shall end on the immediately
                           preceding Business Day;

                  (ii)     any Interest Period that begins on the last Business
                           Day of a calendar month (or on a day for which there
                           is no numerically corresponding day in the calendar
                           month at the end of such Interest Period) shall end
                           on the last Business Day of the calendar month at
                           the end of such Interest Period;

                  (iii)    if any Interest Period would otherwise end after any
                           Tranche B Principal Payment Date, such Interest
                           Period shall end on such Tranche B Principal Payment
                           Date; and

                  (iv)     if a new Loan is disbursed on a day that falls
                           during an Interest Period for another Loan, the
                           first Interest Period for such new Loan shall end on
                           the last day of the Interest Period for such other
                           Loan.

         "ITU" means the International Telecommunication Union, or any
         successor agency thereto.

         "KU-BAND TRANSPONDERS" means transponders operating in the portion of
         the radio-frequency spectrum that covers approximately 12 gigahertz
         to 18 gigahertz.

         "L" means, as of any date of determination, the then-scheduled date of
         Launch as determined pursuant to the Launch Services Agreement or, if
         the Launch is then so scheduled to occur on an unspecified date during
         a period that includes more than one day, the first day of such
         period.

         "LAUNCH" means "Launch # 2", as such term is defined in paragraph 6.1
         of the Launch Services Agreement.

         "LAUNCH COSTS" means all amounts payable by the LSA Party to AE for
         launch and related services in respect of the Satellite pursuant to
         the terms of the Launch Services Agreement.

         "LAUNCH FAILURE" has the meaning ascribed to that term in the Launch
         Services Agreement.



                                      -23-

<PAGE>   29



         "LAUNCH SERVICES AGREEMENT" means that certain agreement, dated July
         22, 1997, between AE and the LSA Party, and any attachments related
         thereto, for the launching into orbit of the Satellite by a Launch
         Vehicle.

         "LAUNCH SERVICES PRICE" means the reference price used to calculate
         progress payments to AE for launch and associated services in respect
         of the Satellite, as agreed on the date of the execution and delivery
         of the Launch Services Agreement and provided for therein.

         "LAUNCH VEHICLE" means the vehicle belonging to the Ariane family
         (Ariane 4 or Ariane 5) chosen to perform the Launch.

         "LEASED SATELLITE CUSTOMER" means any Category 3 Customer whose
         Project involves one or more geostationary communications satellites
         with ninety percent (90%) or more of the total bandwidth capacity
         thereon comprising C-Band Transponders, Ku-Band Transponders or a
         combination thereof being intended, pursuant to its Business Plan, to
         be leased to commercial companies or governmental agencies for
         communications services or broadcasting services.

         "LENDERS" means the Persons providing financing to AEF for the purpose
         of funding the Loans to the Customer, including any agent appointed by
         such Persons to act for and on behalf of them.

         "LENDING OFFICE" means, with respect to any Lender, the office or
         offices of such Lender as it may from time to time specify to AEF as
         such.

         "LESSEE" means the party (other than the Customer) to any Qualified
         Lease Agreement, which party (a) either (i) shall be a governmental or
         inter-governmental agency, or a bona fide third party commercial
         customer, in each case with a long-term senior unsecured debt credit
         rating of at least Baa3 by Moody's or BBB- by S&P (or the equivalent
         rating by another Major Rating Agency) or (ii) shall be a Person
         acceptable to AEF following its good faith assessment of the risks
         associated with such Person's ability to fulfill its obligations under
         such Qualified Lease Agreement, (b) neither AEF nor any Lender would
         be prohibited by any applicable Requirement of Law or by a
         Governmental Authority with jurisdiction over AEF or such Lender, as
         the case may be, or by another authority with which such Lender
         customarily complies, from making loans to by reason of such Lessee's
         connection with a Prohibited Country and (c) shall not be a Prohibited
         Person.

         "LICENSED" means the primary jurisdiction in which the Customer
         obtained or will obtain its licenses, permits, authorizations and
         consents in connection with the operation of the Satellite.

         "LIEN" means any mortgage, pledge, hypothecation, assignment, charge
         or deposit arrangement, encumbrance, lien (statutory or other) or
         preference, priority or other security interest or preferential
         arrangement of any kind or nature whatsoever, whether fixed or
         floating (whether over present or future revenues or assets and


                                      -24-

<PAGE>   30



         including those created by, arising under or evidenced by any
         conditional sale or other title retention agreement, the interest of a
         lessor under a Capital Lease Obligation, any financing lease having
         substantially the same economic effect as any of the foregoing, or the
         filing of any financing statement naming the owner of the asset to
         which such lien relates as debtor, under any applicable law) and any
         contingent or other agreement to provide any of the foregoing.

         "LOAN" or "LOANS" means any or all of the Tranche A Loans, the Tranche
         B Loans or both.

         "LOAN DOCUMENTS" means, collectively, this Agreement, the Note, the
         Multiparty Agreement, the Fee Letter, the Collateral Documents and the
         Intercreditor Agreement and all executed agreements, instruments and
         documents delivered to AEF, AE or by the Customer or any Affiliate of
         the Customer in connection herewith and therewith.

         "LONG TERM DEBT TO CAPITALIZATION" means the sum for the Customer
         Group on the last day of the Relevant Period, determined without
         duplication in accordance with Generally Accepted Accounting
         Principles, of (a) the aggregate amount of all Funded Debt (excluding,
         for purposes of this definition, Contingent Obligations) PLUS (b) the
         aggregate amount of all Disqualified Capital Stock (excluding, for
         purposes of this definition, any portion thereof that has been
         irrevocably and unconditionally defeased by the deposit of cash or
         securities with the holder or holders, or an agent or trustee for the
         holder or holders, of such Disqualified Capital Stock in accordance
         with the instrument governing the terms and conditions of such
         Disqualified Capital Stock), such sum to be expressed as a percentage
         of the sum on such date for the Customer Group of (i) the aggregate
         amount of Funded Debt (excluding, for purposes of this definition,
         Contingent Obligations) PLUS (ii) the aggregate amount of all
         Disqualified Capital Stock (excluding, for purposes of this
         definition, any portion thereof that has been irrevocably and
         unconditionally defeased by the deposit of cash or securities with the
         holder or holders, or an agent or trustee for the holder or holders,
         of such Disqualified Capital Stock in accordance with the instrument
         governing the terms and conditions of such Disqualified Capital Stock)
         PLUS (iii) Consolidated Net Worth.

         "LOSSES" has the meaning specified in Section 10.04(b).

         "LSA PARTY" means the party (other than AE) to the Launch Services
         Agreement which may be the Customer (or any Affiliate thereof) or the
         Satellite Manufacturer (or any Affiliate thereof) if the Satellite is
         to be delivered to the Customer in-orbit.

         "MAJOR RATING AGENCY" means S&P, Moody's, any other internationally
         recognized credit rating agency acceptable to AEF, or any of their
         respective local affiliates or associated agencies.

         "MATERIAL ADVERSE EFFECT" means a material adverse change in, or a
         material adverse effect upon, any of:



                                      -25-

<PAGE>   31



                  (a)      the operation, business, assets or financial
                           condition of the Customer Group;

                  (b)      the ability of the Customer to perform its
                           obligations or enforce its rights under any Loan
                           Document;

                  (c)      the value of the Collateral (including the revenues
                           to be generated therefrom);

                  (d)      the legality, validity, binding effect or
                           enforceability of any or all of this Agreement, any
                           other Loan Document or any of the Satellite
                           Contracts; or

                  (e)      the perfection or priority of any Lien granted to
                           the Security Agent or any Lender, as the case may
                           be, with respect to any Collateral under any of the
                           Collateral Documents.

         "MATERIAL SUBSIDIARY" means, with respect to any Person on any date
         (the "DETERMINATION DATE"), any Subsidiary of such Person (each, a
         "PRIMARY MATERIAL SUBSIDIARY") that (for the relevant period or date
         referred to below) accounted or accounts for ten percent (10%) or more
         of any of the following items (each, a "FINANCIAL CATEGORY") for such
         Person and its consolidated Subsidiaries: (a) gross revenues for the
         period of four (4) fiscal quarters of such Person ending on or most
         recently ended prior to the Determination Date, (b) operating profits
         for the period of four (4) fiscal quarters of such Person ending on or
         most recently ended prior to the Determination Date or (c) gross
         assets on the Determination Date; PROVIDED that if the Subsidiaries of
         such Person (other than the Primary Material Subsidiaries) that
         accounted or account, in the aggregate, for more than twenty percent
         (20%) of any of the Financial Categories for such Person and its
         consolidated Subsidiaries, then the Material Subsidiaries of such
         Person shall also include each Subsidiary of such Person that
         accounted or accounts for a higher percentage of a Financial Category
         than any other Subsidiary of such Person (excluding Primary Material
         Subsidiaries) as at the Determination Date, together with each other
         Subsidiary of such Person designated from time to time by AEF,
         provided that there shall not be more than five (5) Material
         Subsidiaries that are not Primary Material Subsidiaries.

         "MATURITY DATE" means the date being the last day of the Tranche B
         Term, as set forth in the Conversion Commitment Letter in accordance
         with the conditions set forth in ANNEX 1, 2 OR 3, as applicable, which
         in no event shall be later than April 14, 2009.

         "MAXIMUM TRANCHE B TERM" means the period set forth in ANNEX 1, 2 OR
         3, as may be applicable to the Customer on and after the Conversion
         Date in relation to the designation by AEF of the Customer into a
         Customer Category, which shall end, in any case, no later than the
         Maturity Date.



                                      -26-

<PAGE>   32



         "MEASURING DATE" means, (a) so long as the Customer shall have been
         determined to be a Category 1 Customer or a Category 2 Customer for
         which quarterly financial statements are not required to be delivered
         pursuant to Section 6.01, the last day of every semi-annual fiscal
         period of the Customer for which financial statements are required to
         be delivered pursuant to Section 6.01, commencing with the first such
         fiscal period-end following the Conversion Date and (b) so long as the
         Customer shall have been determined to be a Category 2 Customer for
         which quarterly financial statements are required to be delivered
         pursuant to Section 6.01 or a Category 3 Customer, the date of the
         last day of each fiscal quarter of the Customer, commencing with the
         first fiscal quarter-end following the Conversion Date.

         "MODELLING LENDER" means a Lender identified by AEF to act pursuant to
         Section 9.01(b).

         "MOODY'S" means Moody's Investors Service, Inc.

         "MULTIPARTY AGREEMENT" means the agreement dated as of the date
         hereof, among the Customer, AEF, AE and the LSA Party, relating, among
         other things, to payment instructions and reimbursement obligations
         among the parties thereto.

         "NON-CASH WORKING CAPITAL" means, at any time, (a) accounts receivable
         and inventory of the Customer Group at such time MINUS (b) the
         accounts payable of the Customer Group at such time.

         "NOTE" has the meaning specified in Section 2.12.

         "NOTICE OF CONVERSION" means a notice from AEF to the Customer stating
         that the Tranche A Loans have Converted to the Tranche B Loan.

         "NOTICE OF DRAWDOWN" means a written notice given by the Customer to
         AEF, requesting the making of a Tranche A Loan, substantially in the
         form of Exhibit A hereto, pursuant to Section 2.02.

         "NOTICE OF LIEN" means any "notice of lien" or similar document
         intended to be filed or recorded with any court, registry, recorder's
         office, central filing office or Governmental Authority for the
         purpose of evidencing, creating, perfecting or preserving the priority
         of a Lien securing obligations owing to a Governmental Authority.

         "OECD" means the Organization for Economic Cooperation and
         Development, or any successor agency thereto.

         "OTHER INDEBTEDNESS FOR BORROWED MONEY" means Indebtedness of the
         Customer and its Subsidiaries that is not a Loan or a Project Loan and
         represents Indebtedness for borrowed money.

         "OTHER TAXES" has the meaning specified in Section 3.01(b).


                                      -27-

<PAGE>   33



         "P&I DEBT SERVICE" means, for any period, the sum of (a) Total
         Interest with respect to P&I Indebtedness for such period PLUS (b) the
         aggregate amount of principal payments of P&I Indebtedness scheduled
         to have been made by the Customer Group during such period.

         "P&I INDEBTEDNESS" means, without duplication, the following items for
         the Customer Group, determined in accordance with Generally Accepted
         Accounting Principles: (a) all indebtedness for borrowed money, (b)
         all obligations issued, undertaken or assumed as the deferred purchase
         price of capital assets, (c) all obligations evidenced by notes,
         bonds, debentures or similar instruments, including obligations so
         evidenced incurred in connection with the acquisition of property,
         assets or businesses, excluding performance bonds, letters of credit
         and similar undertakings in connection with the construction,
         development or operation of any business of the Customer Group to the
         extent that such undertakings do not secure an obligation for borrowed
         money or the deferred purchase price of a capital asset, (d) all
         indebtedness created or arising under any conditional sale or other
         title retention agreement, or incurred as financing, in either case
         with respect to property acquired by the Customer Group (even though
         the rights and remedies of the seller or bank under such agreement in
         the event of a default are limited to repossession or sale of such
         property) and (e) all Indebtedness referred to in clauses (a) through
         (d) above (whether or not incurred by the Customer Group) secured by
         (or for which the holder of such P&I Indebtedness has an existing
         right, contingent or otherwise, to be secured by) any Lien upon or in
         property (including accounts and contract rights) owned by any member
         of the Customer Group even though such member has not assumed or
         become liable for the payment of such Indebtedness.

         "PARTIAL FAILURE" has the meaning ascribed to that term or a term
         substantially similar to such term in the launch and initial
         operations insurance the Customer is required to obtain pursuant to
         Section 6.06(b) or in the in-orbit insurance the Customer is required
         to obtain pursuant to Section 6.06(b), whichever is then in effect.

         "PERMITTED INVESTMENTS" has the meaning specified in Section 7.14.

         "PERMITTED LIENS" has the meaning specified in Section 7.01.

         "PERMITTED LOCATION" means any country listed on ANNEX 6 hereto.

         "PERSON" means an individual, partnership, corporation, business
         trust, joint stock company, trust, unincorporated association, joint
         venture, voluntary organization or Governmental Authority.

         "PRELIMINARY BASE CASE" means the Base Case for the Customer as
         described in Section 9.01.

         "PRELIMINARY BUSINESS PLAN" means the Business Plan of the Customer
         submitted to AEF as described in Section 9.01 or submitted to AEF
         prior to the execution and delivery of this Agreement, which shall be
         in form sufficient to allow the AEF or the


                                      -28-

<PAGE>   34



         Lenders to make the determinations contemplated in Section 9.01 and
         containing at a minimum, and without limitation, the following
         information with respect to the Project:

                  (a)      details of the Project sponsor or Project sponsors,
                           a general description of the Customer's business and
                           organization, the then-current equity holdings
                           therein and, if such information is available,
                           general biographical information as to key
                           management team members;

                  (b)      projections of all capital and operating costs
                           (including material taxes) and revenues the Project
                           is projected to generate with sufficient information
                           (including the details of assumptions underlying
                           such projections) in each case for AEF and the
                           Lenders to assess the Project;

                  (c)      a general description of the target market for the
                           Project, which shall include a statement of the
                           percentage of such target market that the Customer
                           proposes to capture;

                  (d)      a technical description of the Project;

                  (e)      an overview of the laws and regulations applicable
                           to the Project and the status of requisite
                           governmental approvals for the construction, launch
                           and operation thereof;

                  (f)      if such information is available, a description of
                           the Collateral that is expected to be available for
                           the benefit of AEF and the Lenders and whether a
                           first priority, perfected Lien will and can be
                           granted and perfected thereon;

                  (g)      a general description of the proposed sources of
                           finance for the Project, along with a description of
                           the manner in which such financing will be secured;
                           and

                  (h)      details of underlying economic assumptions and
                           factors, including inflation, interest and exchange
                           rate.

         "PRE-TAX CASH INTEREST COVERAGE" means, for any Person, the lower of
         (a) the arithmetic mean of the Pre-Tax Cash Interest Coverage
         Components for such Person for the three (3) Relevant Sub-Periods and
         (b) the Pre-Tax Cash Interest Coverage Component for such Person for
         the last Relevant Sub-Period.  For purposes of this definition, the
         "PRE-TAX CASH INTEREST COVERAGE COMPONENT" for any Person for any
         period means the ratio of EBITDA for such period to Total Interest for
         such Person for such period.

         "PROHIBITED COUNTRY" means, as to any Lender or AEF, any country into
         which bank or other financial institution lending activity is
         prohibited, declared unlawful or restricted by any authority
         (international, national or regional, including any


                                      -29-

<PAGE>   35



         regulatory authority, the regulations of which are customarily
         complied with by such Lender or AEF), having jurisdiction therefor in
         Luxembourg, the jurisdiction of incorporation of such Lender, the
         jurisdiction of the head office of such Lender, the jurisdiction where
         such Lender primarily conducts its business or the jurisdiction of
         such Lender's Lending Office.

         "PROHIBITED PERSON" means, as to any Lender or AEF, any Person that
         appears from time to time on the listing of Specially Designated
         Nationals and Blocked Persons issued by the Office of Foreign Assets
         Control, United States Department of the Treasury or any list of
         similar nature prohibiting, restricting or declaring unlawful lending
         activity to any Person (other than any list identifying Governmental
         Authorities) issued by any Governmental Authority in Luxembourg, any
         jurisdiction of incorporation of such Lender, the jurisdiction of the
         head office of such Lender, the jurisdiction in which such Lender
         primarily conducts its business or the jurisdiction of such Lender's
         Lending Office or by any supranational body the regulations of which
         are customarily or mandatorily complied with by such Lender or AEF or
         a Person that is owned or controlled by, or derives any material
         portion of its revenues from, a Person on such list.

         "PROJECT" means, collectively, the construction, acquisition,
         financing, launch and operation of the Satellite (if the Customer
         shall have been determined to be a Category 2 Customer or a Category 3
         Customer, as contemplated by the Business Plan), together with any
         related assets constituting Collateral.

         "PROJECT AGENT" means the agent, if any, acting for and on behalf of
         the Project Lenders, and any successor Project Agent appointed
         pursuant to the provisions of the Project Financing Agreements.

         "PROJECT FINANCING" means, if applicable, the secured debt financing
         for the construction, acquisition and operation of the Satellite, the
         TTC&M Facilities and other Project components other than launch
         services provided by the Project Lenders and secured by a Lien on all
         or a portion of the Collateral; PROVIDED that (a) solely for the
         purpose of the definition of "TOTAL ADVANCE RATE" (including, without
         limitation, but solely for such purpose, as used in ancillary
         definitions to the extent necessary to determine the "TOTAL ADVANCE
         RATE"), the term "PROJECT FINANCING" shall be deemed not to include
         any such secured debt financing that is not secured by the Satellite,
         (b) solely for the purpose of Section 6.06, the term "PROJECT
         FINANCING" shall be deemed not to include any such secured financing
         that is not secured by the Satellite and the holders of which are not
         entitled to share in the proceeds of any insurance maintained pursuant
         to said Section 6.06 and (c) solely for the purposes of Sections 2.11,
         4.01(a)(vi), 4.02(e) and 4.03(a)(iii), the term "PROJECT FINANCING"
         shall be deemed not to include any such secured financing that is not
         secured by the Satellite unless otherwise directed or agreed to by
         AEF.

         "PROJECT FINANCING AGREEMENTS" means, if applicable, the agreements
         evidencing or governing the Project Financing.



                                      -30-

<PAGE>   36



         "PROJECT LENDERS" means the financial institutions party to the
         Project Financing Agreements as lenders and any Person that has been
         assigned any or all of the rights or obligations of a Project Lender
         as set forth therein or any successor thereto.

         "PROJECT LOAN" or "PROJECT LOANS" means any amount advanced by the
         Project Lenders pursuant to the Project Financing Agreements.

         "QL CASH FLOW" means, for any period, (a) the sum of the revenues from
         rental payments due under all of the Qualified Lease Agreements of the
         Customer for such period plus the decrease, if any, in Non-Cash
         Working Capital for such period less (b) the sum of (i) the operating
         expenses of the Customer; plus (ii) the income taxes paid in cash by
         the Customer; plus (iii) the increase in Non-Cash Working Capital,
         where the items described in clause (b) above have been allocated by
         the Customer among its various operations and sources of revenues in a
         manner acceptable to AEF (provided that, if such manner is not
         acceptable to AEF, and AEF and the Customer do not otherwise agree to
         an allocation, the full amount of such items shall be subtracted
         pursuant to said clause (b)).

         "QL WEIGHTED AVERAGE TERM" means:  (a) the sum of the products of the
         revenues from rental payments under all of the Qualified Lease
         Agreements multiplied by the respective numbers of years (calculated
         to one (1) decimal place) from the Conversion Date to the respective
         dates on which such rental payments are due, DIVIDED BY (b) the
         aggregate amount of all revenues from rental payments under all
         Qualified Lease Agreements.

         "QUALIFIED LEASE AGREEMENTS" means, if the Customer shall have been
         determined to be a Category 1C Customer or a Category 2 Customer,
         valid, binding and enforceable agreements for the lease of
         transponders or use of the communications capacity of the Satellite,
         in form and substance satisfactory to AEF, which agreements shall
         have, without limitation, the features set out in ANNEX 2.

         "QUOTATION DATE" means, in relation to any period for which an
         interest rate is to be determined hereunder, the day on which
         quotations would ordinarily be given by prime banks in the London
         interbank market for deposits in Dollars for delivery on the first day
         of that period PROVIDED that, if, for any such period, quotations
         would ordinarily be given on more than one date, the Quotation Date
         for that period shall be the last of those dates.

         "RATE CONTRACTS" means any swap, option, cap, floor and collar
         agreements, interest rate insurance, currency spot and forward
         contracts and other derivative or hedging instruments and other
         agreements or arrangements designed to provide protection against
         fluctuations in interest or currency exchange rates.

         "RCB" means the Radiocommunication Bureau of the ITU.

         "RECONVERSION" has the meaning specified in Section 2.04(b).



                                      -31-

<PAGE>   37



         "RECOVERING PERSON" has the meaning specified in Section 3.02(a).

         "REFERENCE BANKS" means the principal London offices of Credit
         Lyonnais, ING Bank, and Societe Generale or such other bank or banks
         as may from time to time be agreed between the Customer and AEF.

         "REFLIGHT" means (a) with respect to an Ariane 5 Launch Vehicle, a
         "Reflight" of the Satellite or (b) with respect to an Ariane 4 Launch
         Vehicle, a Replacement Launch of the Satellite that is ordered during
         the Request Period and that is paid for substantially by a "Relaunch
         Credit Option", as such terms are defined in the Launch Services
         Agreement.

         "RELATED ACCOUNTING RECONCILIATION" means, with respect to any
         financial statements prepared in accordance with Generally Accepted
         Accounting Principles, calculations and explanations in reasonable
         detail, and certified by an internationally-recognized independent
         public accounting firm, demonstrating the derivation from such
         financial statements of the results of the application in accordance
         with Specified GAAP of the tests set out in ANNEX 1, 2 OR 3, or the
         calculations in accordance with Specified GAAP necessary to determine
         compliance by the Customer with its covenants contained herein.

         "RELEVANT COMPANY" means (a) prior to the Conversion Commitment Date,
         the Customer, (b) on and after the Conversion Commitment Date, (i) if
         the Customer shall have been determined to be a Category 1A Customer
         or a Category 1B Customer, the Customer or any Material Subsidiary of
         the Customer, (ii) if the Customer shall have been determined to be a
         Category 1C Customer, the Customer or any Subsidiary of the Customer
         and (iii) if the Customer shall have been determined to be a Category
         2 Customer or a Category 3 Customer, the Customer.

         "RELEVANT PERIOD" means the period of three (3) consecutive fiscal
         years of the Customer ending on or most recently ended prior to the
         Conversion Commitment Date, PROVIDED that if the Conversion Commitment
         Date falls in the second semi- annual fiscal period of a fiscal year
         of the Customer, the "RELEVANT PERIOD" means the period of two (2)
         consecutive fiscal years of the Customer ending on or most recently
         ended prior to the Conversion Commitment Date and the portion of the
         next succeeding fiscal year of the Customer ending on the last day of
         the first semi-annual fiscal period of such fiscal year of the
         Customer.

         "RELEVANT SUB-PERIOD" means each fiscal year of the Customer that
         falls completely within the Relevant Period, and if the Conversion
         Commitment Date falls in the second semi-annual fiscal period of a
         fiscal year of the Customer, the period of two (2) consecutive
         semi-annual fiscal periods of the Customer ending on or most recently
         ended prior to the Conversion Commitment Date.

         "REPAYMENT PROFILE" means a schedule determined by AEF in its sole
         discretion but within the parameters set forth in ANNEX 1, 2 OR 3, as
         may be applicable to the


                                      -32-

<PAGE>   38



         Customer in relation to the designation by AEF of the Customer into a
         Customer Category, and the amortization schedule set forth in the Fee
         Letter, listing:

                  (a)      the aggregate principal amount of Tranche A Loans
                           drawn during the Tranche A Term;

                  (b)      the aggregate principal amount of Tranche A Loans
                           drawn prior to the Conversion Commitment Date;

                  (c)      the aggregate principal amount of Tranche A Loans
                           that are projected to be drawn on or after the
                           Conversion Commitment Date;

                  (d)      the projected Conversion Amount;

                  (e)      the Tranche B Required Installment Amounts to be
                           paid during the Tranche B Term; and

                  (f)      the Maturity Date.

         "REPLACEMENT LAUNCH" has the meaning ascribed to that term in the
         Launch Services Agreement.

         "REQUEST PERIOD" means (a) with respect to an Ariane 5 Launch Vehicle,
         the period as set forth in Section 4.7 of the Launch Services
         Agreement and (b) with respect to an Ariane 4 Launch Vehicle, the
         period that is six (6) months after the Launch, during which, in both
         cases, the LSA Party may notify AE of a claimed right to a Reflight.

         "REQUIRED DISTRESS RECOVERY VALUE" means the minimum required
         percentage that the Distress Recovery Value is of the Conversion
         Commitment Amount as of the Conversion Commitment Date and the minimum
         required percentage that the Distress Recovery Value is of the
         Conversion Amount as of the Conversion Date, as the case may be, as
         set forth in ANNEX 1, 2 OR 3, as may be applicable to the Customer
         upon the designation by AEF of the Customer into a Customer Category.

         "REQUIREMENT OF LAW" means, as to any Person, any law (statutory or
         common), treaty, rule, order, delegated legislation or regulation of a
         Governmental Authority or determination of an arbitrator, in each case
         applicable to or binding upon the Person or any of its property or to
         which the Person or any of its property is subject.

         "RESPONSIBLE OFFICER" means, as to the Customer or any other Person,
         the chief executive officer, the director general, the secretary
         general, the president or a duly authorized vice president, assistant
         director general, a director or a managing director of the Customer or
         such other Person.

         "RESTRICTED PAYMENT" shall mean (a) dividends (in cash, property or
         obligations) on, or other payments or distributions on account of, or
         the setting apart of money for a


                                      -33-

<PAGE>   39



         sinking or other analogous fund for, or the purchase, redemption,
         retirement or other acquisition of, any shares of any class of stock
         of the Customer or of any warrants, options or other rights to acquire
         the same (or to make any payments to any Person, such as "phantom
         stock" payments, where the amount thereof is calculated with reference
         to the fair market or equity value of the Customer or any of its
         Subsidiaries), but excluding dividends payable solely in shares of
         capital stock of the Customer, (b) the purchase or acquisition of, or
         the entering into of any commitment for, any capital stock, equity
         interest, obligations or other securities of or any interest in, or
         make any advance, loan, extension of credit or capital contribution to
         or any other investment in, any Affiliate of the Customer and (c)
         (except to the extent included in the Business Plan if the Customer
         shall have been determined to be a Category 3 Customer and except to
         the extent acceptable to AEF if the Customer shall have been
         determined to be a Category 1C Customer) management fees, payments
         made pursuant to cost or tax sharing arrangements, or similar
         payments, in any case to the extent paid to any Affiliate of the
         Customer.

         "RESUBMISSION" has the meaning specified in Section 9.01(b)(v).

         "REVISED SUBMISSION" has the meaning specified in Section
         9.01(b)(iii).

         "REVENUE ACCOUNTS" means, if the Customer shall have been determined
         to be a Category 1C Customer, a Category 2 Customer or a Category 3
         Customer, the account or accounts of the Customer into which all
         revenues from Transponder Lease Agreements, Qualified Lease Agreements
         and all other agreements between the Customer and a lessee for the
         lease of transponders or use of communications capacity on the
         Satellite that are excluded from the definition of Transponder Lease
         Agreements by virtue of clause (a) thereof shall be paid, which
         account or accounts shall be held with a bank or trust institution,
         and in a location acceptable to AEF.

         "S&P" means Standard & Poor's Ratings Service, a division of The
         McGraw-Hill Companies, Inc.

         "SATELLITE" means the satellite to be launched by AE under the Launch
         Services Agreement by "Launch # 2", as such term is defined in the
         Launch Services Agreement, the launch and related services of which
         are being financed under this Agreement.

         "SATELLITE CONTRACTS" means, as of any date, collectively, the Launch
         Services Agreement, the Satellite Purchase Agreement, the TTC&M
         Contract and each material contract to which the Customer or an
         Affiliate is party that is necessary to the construction, operation or
         use of the assets referred to in clause (g) of the definition of
         "COLLATERAL".

         "SATELLITE MANUFACTURER" means the prime contractor and manufacturer
         of the Satellite that is a party to the Satellite Purchase Agreement.



                                      -34-

<PAGE>   40



         "SATELLITE PURCHASE AGREEMENT" means that certain satellite purchase
         agreement dated March 2, 1993, between the Satellite Manufacturer and
         the SPA Party and any attachments related thereto, for the manufacture
         and delivery of the Satellite and related satellite control facilities
         and services if forming part of such satellite purchase agreement
         (including warranties) by the Satellite Manufacturer, which agreement
         shall be in form and substance satisfactory to AEF as determined on
         the Conversion Commitment Date.

         "SECURITY AGENT" means a Person acceptable to the Lenders, AEF, the
         Customer and the Project Lenders, if any, acting as agent for and on
         behalf of AEF, the Lenders and the Project Lenders, if any, and any
         successor Security Agent appointed pursuant to the provisions of the
         Intercreditor Agreement.

         "SPA PARTY" means the party (other than the Satellite Manufacturer) to
         the Satellite Purchase Agreement which may be the Customer or any
         Affiliate thereof.

         "SPECIFIED GAAP" means, at any time, generally accepted accounting
         principles in effect at such time in (a) the United States of America,
         (b) if the Customer has theretofore customarily prepared its financial
         statements in accordance with generally accepted accounting principles
         in the United Kingdom, the United Kingdom, or (c) such other country
         as AEF and the Customer may agree, in each case referred to in the
         foregoing clauses (a), (b) and (c) consistently applied.

         "SUBJECT COLLATERAL" has the meaning specified in Section 9.04.

         "SUBMISSION" has the meaning specified in Section 9.01(b)(i).

         "SUBORDINATED INDEBTEDNESS" means Indebtedness of the Customer (a)
         that does not constitute a Contingent Obligation of any Subsidiary of
         the Customer, (b) that is subordinated to the prior payment of the
         principal of and interest on the Loans, all Break Funding Costs and
         all fees and other amounts payable by the Customer hereunder and under
         the other Loan Documents (the "SENIOR AMOUNTS"), and (c) upon terms
         providing that, until payment in full of the Senior Amounts and the
         termination of the Commitments, (i) the holders of such indebtedness
         (and any agent or trustee acting on their behalf) may not exercise or
         enforce any rights or remedies against the Customer in respect of such
         Indebtedness and (ii) the holders of such indebtedness (and any agent
         or trustee acting on their behalf) may not file or join in any
         application, complaint or petition to cause the Customer or any of its
         assets or revenues to become the subject of any Insolvency Proceeding,
         and upon other terms and conditions satisfactory to AEF in form and
         substance.

         "SUBSIDIARY" of a Person means any corporation, association,
         partnership, joint venture or other business entity of which more than
         fifty percent (50%) of the voting securities or other ownership
         interests is, or other equity interests are, owned or controlled
         directly or indirectly by such Person, or one or more of the
         Subsidiaries of such Person, or a combination thereof.



                                      -35-

<PAGE>   41



         "TAXES" has the meaning specified in Section 3.01(a).

         "TELECOMMUNICATIONS APPROVAL" means an order,  instrument or approval
         of any applicable Telecommunications Authority granting the Customer
         authority to construct, launch, operate and maintain each of the
         Satellite, the TTC&M Facilities and the Project in general, including
         national and local telecommunications licenses and compliance with ITU
         procedures and requirements.

         "TELECOMMUNICATIONS AUTHORITY" means, with respect to national and
         local telecommunications authorities, the Federal Communications
         Commission, or any successor thereto, and, with respect to any
         international telecommunications authority, the ITU, including the
         RCB.

         "TEST DATE" means a Measuring Date or a date on which (a) the Customer
         takes an action referred to in Section 7.08, (b) any member of the
         Customer Group creates, incurs, assumes or otherwise becomes directly
         or indirectly liable with respect to any Indebtedness or (c) any
         member of the Customer Group makes a Restricted Payment.

         "TOTAL ADVANCE RATE" means the Total Senior Debt Commitment expressed
         as a percentage of the lesser of (a) the Equipment Cost and (b) the
         Fair Market Value of the Collateral as set forth in the Appraisal.

         "TOTAL CASH FLOW" means, for any period, for the Customer Group the
         excess (if greater than zero (0)) of (a) the sum of (i) EBITDA for
         such period and (ii) the decrease, if any, in Non-Cash Working Capital
         during such period, over (b) the sum of (i) income taxes paid in cash
         during such period and (ii) the increase, if any, in Non-Cash Working
         Capital during such period.

         "TOTAL DEBT TO CAPITALIZATION" means, the sum for the Customer Group
         on the last day of the Relevant Period, determined without duplication
         in accordance with Generally Accepted Accounting Principles, of (a)
         the aggregate amount of all Indebtedness (other than Contingent
         Obligations) PLUS (b) the aggregate amount of all Disqualified Capital
         Stock (excluding, for purposes of this definition, any portion thereof
         that has been irrevocably and unconditionally defeased by the deposit
         of cash or securities with the holder or holders, or an agent or
         trustee for the holder or holders, of such Disqualified Capital Stock
         in accordance with the instrument governing the terms and conditions
         of such Disqualified Capital Stock), such sum to be expressed as a
         percentage of the sum on such date for the Customer Group of (i) the
         aggregate amount of Funded Debt (other than Contingent Obligations)
         PLUS (ii) the aggregate amount of all Disqualified Capital Stock
         (excluding, for purposes of this definition, any portion thereof that
         has been irrevocably and unconditionally defeased by the deposit of
         cash or securities with the holder or holders, or an agent or trustee
         for the holder or holders, of such Disqualified Capital Stock in
         accordance with the instrument governing the terms and conditions of
         such Disqualified Capital Stock) PLUS (iii) Consolidated Net Worth.



                                      -36-

<PAGE>   42



         "TOTAL FAILURE" has the meaning ascribed to that term or a term
         substantially similar to such term in the launch and initial
         operations insurance the Customer is required to obtain pursuant to
         Section 6.06(b) or in the in-orbit insurance the Customer is required
         to obtain pursuant to Section 6.06(b), whichever is then in effect.

         "TOTAL INTEREST" shall mean, for any period, the sum (without
         duplication), for the Customer Group, determined in accordance with
         Generally Accepted Accounting Principles, of the following:  (a) all
         interest in respect of Indebtedness accrued or capitalized during such
         period (whether or not actually paid during such period) PLUS (b) the
         net amounts payable (or MINUS the net amounts receivable) under Rate
         Contracts relating to interest rates accrued during such period
         (whether or not actually paid or received during such period).

         "TOTAL SENIOR DEBT COMMITMENT" means, at any time, the aggregate of
         commitments under this Agreement and the Project Financing Agreements.

         "TOTAL SENIOR DEBT OUTSTANDING" means, at any time, the aggregate of
         amounts outstanding under this Agreement and the Project Financing
         Agreements.

         "TRANCHE A COMMITMENT" means the obligation of AEF to make Loans in an
         aggregate principal amount not to exceed the Tranche A Commitment
         Amount.

         "TRANCHE A COMMITMENT AMOUNT" means an amount equal to the lesser of
         (a) the sum of (i) sixty percent (60%) of the Launch Costs and (ii)
         the aggregate amount of Finance Costs capitalized hereunder and (b)
         sixty million Dollars ($60,000,000).

         "TRANCHE A LOAN" means any amount advanced by AEF pursuant to Section
         2.01(a).


         "TRANCHE A OUTSTANDINGS" means the aggregate Tranche A Loans to the
         Customer outstanding at any time (including Tranche A Loans the
         proceeds of which have been applied to the payment of Finance Costs),
         PLUS accrued and unpaid interest thereon as provided in Section
         2.07(a).

         "TRANCHE A PERIOD" means the period commencing on the Closing Date and
         ending on April 12, 2002.

         "TRANCHE A TERM" means, subject to the terms and conditions of
         Sections 2.04 and 2.05(b), the period commencing on the Closing Date
         and ending on the earlier of the Conversion Date or the last day of
         the Tranche A Period.

         "TRANCHE B ADVANCE RATE" means sixty percent (60%) of Launch Costs.

         "TRANCHE B AMORTIZATION DATE" means the date that is six (6) months
         after the In-Orbit Commissioning Date.

         "TRANCHE B CONDITIONS PRECEDENT" means the conditions set forth in
         Section 4.03.


                                      -37-

<PAGE>   43



         "TRANCHE B LOAN" means the Tranche A Loans converted by AEF pursuant
         to Section 2.01(b) and outstanding at any time.

         "TRANCHE B PRINCIPAL PAYMENT DATE" means the Tranche B Amortization
         Date, the last day of each three (3) month or six (6) month period
         thereafter, as set forth in the Conversion Commitment Letter, until
         the Maturity Date, and the Maturity Date.

         "TRANCHE B REQUIRED INSTALLMENT AMOUNT" means the amount of each of
         the repayment installments of principal of the Tranche B Loan, as
         determined by AEF on the Conversion Commitment Date and as set forth
         in the Conversion Commitment Letter, each such installment being equal
         to the percentage value of the Tranche B Loan as set forth in the
         Conversion Commitment Letter.

         "TRANCHE B TERM" means, subject to the terms and conditions of
         Sections 2.04 and 2.05(b), the period commencing on the Conversion
         Date and ending on the Maturity Date, such period not to exceed the
         Maximum Tranche B Term.

         "TRANSPONDER LEASE AGREEMENTS" means all agreements entered into by
         the Customer for the lease of transponders or use of communications
         capacity on the Satellite, except for such agreements (a) having a
         term of less than one (1) year or an aggregate lease value of less
         than five hundred thousand Dollars ($500,000) or (b) with Affiliates
         of the Customer that are primarily intended to guarantee
         unconditionally the Customer's performance of its obligations under
         the Project Financing where (i) such agreements (A) are subject and
         subordinate to the rights of AEF, the Lenders and the Security Agent,
         on terms and conditions satisfactory to them, (B) contain no rights of
         quiet enjoyment with respect thereto (which for purposes of this
         definition shall mean that, notwithstanding the lessee's continued
         compliance with its obligations under such agreement, no assignee
         having a Lien on such agreement shall be bound to retain such lessee
         as a lessee thereunder and shall be free to terminate such agreement
         despite such continued compliance by such lessee) and (C) are subject
         to termination by AEF or the Lenders upon the exercise of remedies
         pursuant to Section 8.02 and (ii) such agreements are in the nature of
         contingent agreements for the lease of transponders or use of
         communications capacity on the Satellite.

         "TTC&M CONTRACT" means that certain agreement, or those certain
         agreements,to be entered into between the TTC&M Provider and the TTC&M
         Party, and any attachments related thereto, relating to the
         construction and supply of certain antenna and tracking, telemetry,
         control and monitoring equipment relating to the Satellite, together
         with the servicing and operation thereof, which agreement or
         agreements (as the case may be) shall be in form and substance
         satisfactory to AEF as determined on the Conversion Commitment Date.

         "TTC&M FACILITIES" means the facilities and other ground equipment
         necessary for the tracking, telemetry, control and monitoring of the
         Satellite.



                                      -38-

<PAGE>   44



         "TTC&M MORTGAGE" means, if the TTC&M Facilities constitute Collateral,
         that certain Mortgage to be granted by the Customer in favor of the
         Security Agent over the TTC&M Facilities and the real property on
         which such facilities are located, in form and substance satisfactory
         to AEF, and to the extent available under applicable law.

         "TTC&M PARTY" means the party (other than the TTC&M Provider) to the
         TTC&M Contract which may be the Customer or any Affiliate thereof
         provided, if such party is an Affiliate of the Customer, the Customer
         shall have unconditionally guaranteed the performance by such
         Affiliate of its obligations pursuant to the TTC&M Contract on terms
         satisfactory to AEF as determined on the Conversion Commitment Date.

         "TTC&M PROVIDER" means the manufacturer and supplier of the TTC&M
         Facilities that is a party to the TTC&M Contract.

         "UNRESTRICTED EXCESS CASH FLOW" means, at any time, Excess Cash Flow
         at such time LESS the amount of Excess Cash Flow required to be
         applied to the prepayment of the Tranche B Loan pursuant to Section
         11.05 or 13.04, as the case may be.

         "UPFRONT FEE" means the fee payable by the Customer to AEF on the
         Closing Date calculated as a percentage of the Tranche A Commitment
         Amount as set forth in the Fee Letter.

1.012    OTHER DEFINITIONAL PROVISIONS

         (a)      Unless otherwise specified herein or therein, all capitalized
                  terms defined in this Agreement shall have the defined
                  meanings when used in any certificate or other document made
                  or delivered pursuant hereto.

         (b)      Unless otherwise specified herein, all accounting
                  determinations hereunder and all computations utilized by the
                  Customer in complying with the covenants contained herein
                  shall be made, all accounting terms used herein shall be
                  interpreted, and all financial statements required to be
                  delivered hereunder shall be prepared, in accordance with
                  Generally Accepted Accounting Principles (except for
                  departures therefrom approved by AEF).

         (c)      The words "hereof", "herein" and "hereunder" and words of
                  similar import when used in this Agreement shall refer to
                  this Agreement as a whole and not to any particular provision
                  of this Agreement, and section, schedule and exhibit
                  references are to this Agreement unless otherwise specified.
                  The meaning of defined terms shall be equally applicable to
                  the singular and plural forms of the defined terms.  The term
                  "including" and "to include" are not limiting and mean
                  "including without limitation" and "to include without
                  limitation" respectively.

         (d)      In the computation of periods of time from a specified date
                  to a later specified date, the word "from" means "from and
                  including", the words "to" and "until"


                                      -39-

<PAGE>   45



                  each mean "to but excluding" and the word "through" means "to
                  and including".

         (e)      References to agreements and other contractual instruments
                  shall be deemed to include all subsequent amendments and
                  other modifications thereto, but only to the extent such
                  amendments and other modifications are not prohibited by the
                  terms of any Loan Document.  Unless otherwise stated, any
                  reference to a Person shall include its successors and
                  permitted assigns.

         (f)      References to statutes or regulations are to be construed as
                  including all statutory and regulatory provisions
                  consolidating, amending or replacing the statute or
                  regulation.

         (g)      Matters disclosed on any schedule to this Agreement shall be
                  deemed disclosed for all purposes of this Agreement.


                          SECTION 2.  LOAN PROVISIONS

1.021    AMOUNTS AND TERMS OF COMMITMENTS

         (a)      TRANCHE A LOANS.  AEF agrees, upon the terms and subject to
                  the conditions set forth herein, to make, from time to time
                  during the Tranche A Term, one or more Tranche A Loans to the
                  Customer in an aggregate principal amount (i) not to exceed
                  the Tranche A Commitment Amount at any time prior to the
                  Conversion Commitment Date and (ii) not to exceed the
                  Conversion Commitment Amount on and after the Conversion
                  Commitment Date.  The Tranche A Loans shall be made to fund
                  scheduled, pre-launch progress payments due and payable under
                  the Launch Services Agreement (other than the initial down
                  payment amount referred to in Section 4.01(c)) and Finance
                  Costs, subject to and as set forth in the Fee Letter.

         (b)      TRANCHE B LOAN.  AEF agrees, upon the terms and subject to
                  the conditions set forth herein and in the Conversion
                  Commitment Letter, to convert (herein referred to as
                  "CONVERSION") Tranche A Loans (in an aggregate amount not
                  exceeding the Conversion Commitment Amount) into the Tranche
                  B Loan by furnishing a Notice of Conversion to the Customer
                  on or after the date of Launch (or Reflight, as the case may
                  be), PROVIDED that (i) the Satellite is not destroyed or lost
                  during the period extending from the instant when the Launch
                  (or Reflight, as the case may be) occurs and the instant when
                  the Satellite has separated from the Launch Vehicle and (ii)
                  the Satellite does separate from the Launch Vehicle.  Subject
                  to Section 2.04, the Conversion shall be effective for the
                  period commencing on the date of Launch (or Reflight, as the
                  case may be) and terminating on the Maturity Date.  The
                  Tranche B Loan to the extent that it is repaid or prepaid may
                  not be reborrowed.



                                      -40-

<PAGE>   46



         (c)      COMMITMENTS.  The Tranche A Commitment shall be automatically
                  reduced to the Conversion Commitment Amount on the Conversion
                  Commitment Date and shall be automatically reduced to zero on
                  the Conversion Date.  If the Tranche A Outstandings of the
                  Customer are not converted to a Tranche B Loan, the
                  Conversion Commitment shall be automatically reduced to zero
                  on the earlier of the date of Launch or the last day of the
                  Tranche A Period.  The Tranche A Commitment and the
                  Conversion Commitment, once terminated or reduced pursuant to
                  this Section 2.01(c), may not be reinstated or increased,
                  except that the Tranche A Commitment may be reinstated in an
                  amount equal to the Conversion Commitment Amount in the event
                  of a Launch Failure as described in Section 2.04, PROVIDED
                  that no new Tranche A Loans shall be made after such Launch
                  Failure other than for the purposes of paying Finance Costs.

1.022    MANNER OF BORROWING TRANCHE A LOANS

         (a)      Each Tranche A Loan shall be made upon the Customer's
                  irrevocable Notice of Drawdown received by AEF prior to 11:00
                  a.m. (Paris time) no earlier than nine (9) Business Days and
                  no later than seven (7) Business Days prior to the requested
                  date for the making of such Loan (provided that no Notice of
                  Drawdown shall be required in connection with a Tranche A
                  Loan the proceeds of which will be used entirely to
                  capitalize interest as permitted hereby).  Each such notice
                  shall specify (i) the amount of such Loan, which shall be not
                  less than the lesser of (A) one million Dollars ($1,000,000),
                  (B) the amount of the final scheduled pre-launch progress
                  payment due and payable by the LSA Party pursuant to the
                  Launch Services Agreement with respect to the Satellite and
                  (C) the amount of any Finance Costs to be capitalized at the
                  time of the making of such Loan and shall not exceed the
                  maximum amount of the next scheduled, pre-launch progress
                  payment due and payable by the LSA Party pursuant to the
                  Launch Services Agreement with respect to the Satellite plus
                  the amount of any Finance Costs to be capitalized at the time
                  of the making of such Loan, (ii) the requested date for the
                  making of such Loan, which shall be a Business Day and (iii)
                  whether such Loan shall be made for the purpose of paying any
                  amount of Finance Costs as provided in Section 2.07(d).

         (b)      Each Notice of Drawdown issued during the Tranche A Term
                  shall be deemed a certification (as of the date stated
                  thereon and delivery thereof) by the Customer that (i) the
                  representations and warranties made by the Customer contained
                  in Section 5 and any other Loan Document shall be true and
                  correct on and as of the date of the making of such Loan with
                  the same effect as if made on and updated as of such date,
                  (except as to representations and warranties expressly stated
                  to be made only at or as of a specified time or times), (ii)
                  each of the conditions required to be complied with on the
                  Closing Date as set forth in Section 4.01 have been satisfied
                  as of the Closing Date and remain so satisfied, and (iii) no
                  Default or Event of Default exists as of the


                                      -41-

<PAGE>   47



                  date thereof or shall exist as of the date of the making of
                  such Loan or would result from the making of such Loan.

         (c)      Unless any applicable condition specified in Section 4 has
                  not been satisfied, the proceeds of all such Tranche A Loans
                  shall be made available by AEF on the requested borrowing
                  date (i) as provided in Section 2.07(d), in the case of
                  application to the payment of any capitalized interest, or
                  (ii) by deposit of such amounts in Dollars into the AE
                  Account.

1.023    PROCEDURE FOR CONVERSION TO A TRANCHE B LOAN

         (a)      CONVERSION PROCESS.  Conversion of the Tranche A Loans to a
                  Tranche B Loan shall take place subject to and in accordance
                  with the terms and conditions set forth in Section 9.02.

         (b)      CONVERSION.  If (i) in accordance with Section 9.02 AEF
                  determines, on the dates set forth in said Section, that the
                  conditions to Conversion set forth and referred to therein
                  (including both the conditions required to be satisfied on
                  the date of Launch (or Reflight, as the case may be) and the
                  conditions required to be satisfied prior to such date) have
                  been satisfied at the respective times they are required by
                  said Section to be so satisfied, and (ii) such other
                  determinations as may be required pursuant to Section 9.03
                  have been made, the Tranche A Loans shall convert to a
                  Tranche B Loan upon the delivery of a Notice of Conversion in
                  the manner described in Section 2.01(b) above on the
                  Conversion Date.  Upon Conversion or Reconversion, as the
                  case may be, and for the duration of the Tranche B Term, the
                  additional terms set forth in ANNEX 1, 2 OR 3, as may be
                  applicable to the Customer in relation to the designation by
                  AEF of the Customer into a Customer Category, shall apply.

         (c)      NON-CONVERSION.  If on the Conversion Commitment Date AEF
                  determines that the Customer has not satisfied all applicable
                  Conversion Conditions and Tranche B Conditions Precedent, the
                  Tranche A Outstandings shall not convert to a Tranche B Loan
                  and shall become due and payable by the Customer in
                  accordance with Section 2.05(b).

         (d)      TRANCHE A EXTENSION.  If, (i) prior to the delivery by AEF to
                  the Customer of a Notice of Conversion, a Launch Failure is
                  determined to have occurred, and (ii) the Customer has
                  otherwise satisfied the Conversion Conditions, the Tranche B
                  Conditions Precedent and all other conditions to Conversion
                  in this Agreement, the Tranche A Loans shall continue on the
                  terms and conditions hereof applicable to Tranche A Loans,
                  and shall not be Converted to the Tranche B Loan, and the
                  Tranche A Term shall not be terminated by reason of such
                  Launch Failure, PROVIDED that no new Tranche A Loans shall be
                  made other than Loans for the purposes of paying Finance
                  Costs.



                                      -42-

<PAGE>   48



1.024    DECONVERSION AND RECONVERSION

         (a)      DECONVERSION.  In the event that the LSA Party is entitled to
                  a Reflight under the Launch Services Agreement due to the
                  occurrence of a Launch Failure that has been recognized in
                  accordance with the Launch Services Agreement after
                  Conversion has occurred, the Tranche B Loan shall be
                  reclassified as a Tranche A Loan ("DECONVERSION").  On any
                  such Deconversion, all terms and conditions hereof that apply
                  to Tranche A Loans (including, without limitation, the
                  Applicable Margin (which shall be equal to the interest rate
                  margin applicable to the Tranche A Term as described in the
                  Fee Letter)) shall apply to such Tranche A Loan, and the
                  Tranche A Term shall be reinstated, until the earlier of (i)
                  the date of mandatory prepayment, as provided in Section
                  2.05(b) and (ii) Reconversion, PROVIDED that no subsequent
                  Deconversion shall occur in the event any Reflight results in
                  a Launch Failure that is recognized after a Reconversion.  A
                  Total Failure or Constructive Total Failure for which the LSA
                  Party is not entitled to a Reflight shall not result in
                  Deconversion or Reconversion, but shall instead cause a
                  mandatory prepayment, as provided in Section 2.05(b).

         (b)      RECONVERSION.  The subsequent Conversion to a Tranche B Loan
                  of any Tranche A Loan that has been previously reclassified
                  pursuant to a Deconversion ("RECONVERSION") must be effected
                  no later than two (2) years after the date of initial Launch.
                  Reconversion of any Loan shall occur pursuant to the terms of
                  Sections 2.03 and 9.02.  Any Tranche A Outstandings related
                  to a Launch Failure that have not reconverted to a Tranche B
                  Loan within two (2) years from the date of such Launch shall
                  become due and payable by the Customer to AEF in accordance
                  with Section 2.05(b).

1.025    PREPAYMENTS

         (a)      VOLUNTARY PREPAYMENTS.  Subject to Section 3.03, the Customer
                  may, at any time, upon at least ten (10) Business Days prior
                  irrevocable written notice to AEF, prepay Loans, in whole or
                  in part, in amounts of at least the lesser of (i) three
                  million Dollars ($3,000,000) or any whole number multiple of
                  one million Dollars ($1,000,000) in excess thereof and (ii)
                  the amount of the Loans outstanding at such time, PROVIDED
                  that interest on the amount of such prepayment, accrued to
                  the date of prepayment, together with any Break Funding Costs
                  and any unpaid fees and other amounts due and payable under
                  this Agreement shall be paid in full on the date of
                  prepayment.  Each such notice of prepayment shall specify the
                  date and amount of such prepayment and shall not thereafter
                  be revocable by the Customer.  Any prepayment pursuant to
                  this Section 2.05(a) shall be applied to principal
                  outstanding in the inverse order of maturity of the
                  installments of principal.

         (b)      MANDATORY PREPAYMENTS.

                  (i)      If:


                                      -43-

<PAGE>   49



                           (A)      this Agreement is terminated according to
                                    the terms hereof, or

                           (B)      the Launch Services Agreement is terminated
                                    according to the terms thereof, or

                           (C)      the Multiparty Agreement is terminated
                                    according to the terms thereof, or

                           (D)      following a Launch Failure, the LSA Party
                                    does not request a Reflight within the
                                    Request Period and in any event on or
                                    before the date falling one hundred and
                                    eighty (180) days after the original date
                                    of Launch, or

                           (E)      following a Launch Failure, a Reflight is
                                    not accomplished within two (2) years
                                    following the original date of Launch, or

                           (F)      an initial Launch has not occurred by the
                                    last day of the Tranche A Period, or

                           (G)      a Reflight results in a Launch Failure, or

                           (H)      the In-Orbit Commissioning Date shall not
                                    have occurred on or prior to the date
                                    occurring eight (8) months after Launch, or

                           (I)      any ECA Country Risk Coverage shall cease
                                    to be in full force and effect,

                           then (1) the Customer shall promptly notify AEF of
                           such event, (2) the Customer shall prepay, without
                           penalty, no later than five (5) Business Days after
                           the occurrence of the event giving rise to such
                           prepayment, the Loans in full, together with
                           interest thereon accrued to the date of prepayment,
                           any Break Funding Costs and any fees and other
                           amounts due and payable under this Agreement and (3)
                           if not earlier terminated, the Commitments shall
                           terminate on the date of such prepayment.

                  (ii)     If the Customer shall, at any time on or after the
                           date of Launch, suffer an Event of Loss (excluding,
                           subject to Section 2.05(b)(iv), a Partial Failure)
                           of the Satellite for which the LSA Party shall not
                           be entitled to a Reflight, then, upon the earlier to
                           occur of (A) the date of receipt of insurance
                           proceeds (if applicable), (B) the date falling sixty
                           (60) days after the agreement of loss, if any, by
                           the applicable provider(s) of insurance as required
                           by Section 6.06 with respect to such Event of Loss
                           and (C) the date falling two hundred and ten (210)
                           days after the occurrence of such Event of Loss, the
                           Customer shall prepay, without penalty, the Loans in
                           full, together with interest thereon accrued to the
                           date of prepayment, any Break Funding Costs and any
                           fees and other amounts due and payable under this
                           Agreement.



                                      -44-

<PAGE>   50



                  (iii)    If, on the Conversion Commitment Date (unless
                           otherwise secured pursuant to Section 9.02(e)(iii))
                           or the Conversion Date, the Tranche A Outstandings
                           exceed the Conversion Commitment Amount, then the
                           Customer shall immediately prepay the amount by
                           which the Tranche A Outstandings exceed the
                           Conversion Commitment Amount, together with interest
                           thereon accrued to the date of prepayment and any
                           Break Funding Costs, or take such other action with
                           respect to such excess as is permitted by Section
                           9.02(e).

                 (iv)      If the Customer shall, at any time on or after the
                           date of Launch, suffer a Partial Failure of the
                           Satellite, then (A) if the Customer shall have been
                           determined to be a Category 1A Customer or a
                           Category 1B Customer pursuant to the terms of this
                           Agreement, the Customer shall not be required to
                           prepay, as a result of the occurrence of such
                           Partial Failure, any portion of the Loans or any
                           other amounts outstanding under this Agreement and
                           (B) if the Customer shall have been determined to be
                           a Category 1C Customer, a Category 2 Customer or a
                           Category 3 Customer pursuant to the terms of this
                           Agreement, upon the earlier to occur of (1) the date
                           of receipt of insurance proceeds with respect to
                           such Partial Failure, (2) the date falling sixty
                           (60) days after the agreement of loss, if any, by
                           the provider(s) of insurance as required by Section
                           6.06 with respect to such Partial Failure and (3)
                           the date falling two hundred and ten (210) days
                           after the occurrence of such Partial Failure the
                           Customer shall prepay a portion of the Loans equal
                           to (x) the amount of the proceeds of insurance
                           received or receivable for such Partial Failure
                           together with interest thereon accrued to the date
                           of such prepayment and any Break Funding Costs
                           multiplied by (y) the fraction the numerator of
                           which is the aggregate principal amount of the Loans
                           then outstanding and the denominator of which is the
                           aggregate principal amount of all Indebtedness
                           secured by a Lien on the Satellite; PROVIDED that
                           if, at any time, insurance proceeds received or
                           receivable with respect to a Partial Failure and not
                           required to be prepaid as provided above, are
                           required to be prepaid with respect to any Project
                           Financing, then the Customer shall be required to
                           prepay a pro rata portion of the Loans outstanding
                           under this Agreement.


                  (v)      If, on the Conversion Commitment Date or on the
                           Conversion Date, AEF determines in its discretion
                           that the Customer has not satisfied the applicable
                           Conversion Conditions and the Tranche B Conditions
                           Precedent, then (x) the Customer shall prepay,
                           without penalty, not later than the date falling
                           five (5) Business Days after notice by AEF to the
                           Customer of such determination, the Loans in full,
                           together with interest thereon accrued to the date
                           of prepayment, any Break Funding Costs and any fees
                           and other amounts due and payable under this
                           Agreement and (y) the Tranche A Commitments and the
                           Tranche A Term shall terminate on the date of such
                           notice.


                                      -45-

<PAGE>   51



                    (vi)   If, for AEF or any Lender, a country in which the
                           Customer is Domiciled or Conducting Business becomes
                           a Prohibited Country or the Customer is designated a
                           Prohibited Person, then (x) the Customer shall
                           immediately prepay, without penalty, the Loans in
                           full, together with interest thereon accrued to the
                           date of prepayment, any Break Funding Costs and any
                           fees and other amounts due and payable under this
                           Agreement and (y) if not earlier terminated the
                           Tranche A Commitment and the Tranche A Term shall
                           terminate on the date of such prepayment.

                   (vii)   If, at any time, the aggregate amount of Tranche A
                           Outstandings exceeds the Tranche A Commitment Amount
                           at such time, the Customer shall prepay, without
                           penalty, not later than the date that is five (5)
                           Business Days after the date that the Tranche A
                           Outstandings first exceed the Tranche A Commitment
                           Amount such excess amount together with interest
                           thereon accrued to the date of prepayment and any
                           Break Funding Costs.

                  (viii)   If the Customer shall, at any time, prepay, in whole
                           or in part, voluntarily or mandatorily, any Project
                           Loans, then (A) the Customer shall promptly notify
                           AEF of such prepayment within five (5) Business Days
                           of such prepayment, and (B) the Customer shall
                           immediately prepay a portion of the Loans
                           proportionally equal to the portion of the total
                           Project Loans that were prepaid, together with
                           interest thereon accrued to the date of such
                           prepayment and any Break Funding Costs.

    (c)      NO REBORROWINGS.  Loans that are prepaid may not be reborrowed.

1.026    REPAYMENT.  Commencing on the Tranche B Amortization Date, the
         Customer shall repay to AEF the outstanding principal amount of the
         Tranche B Loan in installments on each Tranche B Principal Payment
         Date in an amount equal to the Tranche B Required Installment Amount.
         Any remaining balance of the Tranche B Loan shall be due and payable
         in full on the Maturity Date.

1.027    INTEREST

         (a)      RATE.  Subject to Section 2.07(c), each Loan shall bear
                  interest for each Interest Period therefor on the outstanding
                  principal amount thereof from the date when made until it
                  becomes due at a rate per annum equal to the sum of the
                  Interest Basis for such Interest Period and the Applicable
                  Margin at such time.

         (b)      PAYMENT DATE.  Accrued interest on each Loan shall, subject
                  to Section 2.07(d), be payable in arrears on the last day of
                  each Interest Period and on the date referred to in the
                  immediately following sentence (each such date an "INTEREST
                  PAYMENT DATE").  Interest shall also be payable on the date
                  of any prepayment of Loans pursuant to Section 2.05 for all
                  or the portion of the


                                      -46-

<PAGE>   52



                  Loans so prepaid, as the case may be, and upon payment
                  (including prepayment) in full thereof.

         (c)      DEFAULT RATE.

                  (i)      If any sum due and payable by the Customer hereunder
                           is not paid on the due date therefor in accordance
                           with Section 2.10; or if any sum due and payable by
                           the Customer under any judgment of any court in
                           connection herewith is not paid on the date of such
                           judgment, the period beginning on such due date or,
                           as the case may be, the date of such judgment and
                           ending on the date upon which the obligation of the
                           Customer to pay such sum (the balance thereof for
                           the time being unpaid being herein referred to as an
                           "unpaid sum") is discharged shall be divided into
                           successive periods, each of which (other than the
                           first) shall start on the last day of the preceding
                           such period and the duration of each of which shall
                           (except as otherwise provided in this Section 2.07)
                           be one month or such shorter period selected by AEF
                           in good faith as being the likely period of default.

                  (ii)     During each such period relating thereto as is
                           mentioned in Section 2.07(c)(i) above, the unpaid
                           sum shall bear interest at the rate per annum (the
                           "DEFAULT RATE") that is the sum from time to time of
                           (A) two percent (2%); (B) the Interest Basis for
                           such sum for such period; and (C) the Applicable
                           Margin at such time.

         (d)      CAPITALIZED INTEREST.  Except as otherwise provided in this
                  Section 2.07(d), and subject to satisfaction of the
                  applicable conditions to Loans set forth in Section 4.04, any
                  interest due on Tranche A Loans prior to the Conversion Date
                  shall be capitalized on the date such interest is due and
                  payable by entry on the books of AEF of such amount as a
                  Tranche A Loan to the Customer.  Any such interest so
                  capitalized shall constitute a Tranche A Loan to the Customer
                  for such amount made on the date on which such interest shall
                  have been otherwise due and payable.  Pursuant to a written
                  notice delivered to AEF not later than thirty (30) days prior
                  to the date that any interest shall become due and payable,
                  the Customer may elect to terminate the capitalization of
                  interest under this Section 2.07(d), in which case no such
                  capitalization of interest shall occur from and after the
                  first day of the next succeeding Interest Period.

1.028    FEES.  The Customer shall pay to AEF the Commitment Fee, the Upfront
         Fee, the Conversion Fee and the ECA Guaranty Fee on the terms and at
         the times set forth in the Fee Letter and as provided in Section 2.09,
         together with any other fees and other amounts payable thereunder and
         hereunder.

1.029    COMPUTATION OF INTEREST AND FEES



                                      -47-

<PAGE>   53



         (a)      All computations of interest on Loans and the Commitment Fee
                  shall be made on the basis of a 360-day year and actual days
                  elapsed.  Interest and the Commitment Fee shall accrue during
                  each period during which interest or such Commitment Fee are
                  computed from the first day thereof to the last day thereof.

         (b)      AEF shall, on the day that the Interest Basis is determined
                  for any Interest Period, but in no event after the date of
                  the commencement of such Interest Period, notify the Customer
                  of the determination of such Interest Basis.

         (c)      Each determination of an interest rate by AEF pursuant to any
                  provision of this Agreement shall be conclusive and binding
                  on the Customer in the absence of manifest error or fraud.

2.10     PAYMENTS BY THE CUSTOMER

         (a)      All payments (including prepayments) to be made by the
                  Customer on account of principal, interest, fees and any
                  other amounts under this Agreement shall be made without
                  set-off or counterclaim and shall be made to AEF, in each
                  case in Dollars and in immediately available funds no later
                  than 10:00 a.m.  (New York time) on the date on which such
                  payment shall become due to the Credit Lyonnais Luxembourg
                  S.A. account at Credit Lyonnais New York, No.
                  0-100-682-000-100 (ref IFAP/TEIC/AEF/036124-45).  The
                  Customer shall direct the bank remitting any payments
                  hereunder to deliver an irrevocable notice with respect to
                  the remittance of funds no later than two (2) Business Days
                  prior to the date on which such payment shall become due.
                  Any payment which is received by AEF in said account later
                  than 10:00 a.m.  (New York time) shall be deemed to have been
                  received on the next succeeding Business Day.

         (b)      Subject to the provisions set forth in the definition of
                  "INTEREST PERIOD", whenever any payment hereunder would
                  otherwise be due on a day other than a Business Day, such
                  payment shall be made on the immediately preceding Business
                  Day, and the computation of interest or fees shall be
                  calculated accordingly.

2.11     SECURITY.  All obligations of the Customer under this Agreement, all
         other Loan Documents and the Project Financing Agreements (if any)
         shall be secured by the Collateral as set forth in the Collateral
         Documents from and after the date of the execution and delivery of the
         Collateral Documents as described below, subject to the condition that
         neither AEF nor the Lenders shall be entitled to direct the Security
         Agent to exercise rights with respect thereto before the Conversion
         Date, whether or not the Project Lenders shall be entitled to exercise
         such rights.  The Customer shall, on the earlier to occur of (a) if
         the Project Financing Agreements shall have been executed on or prior
         to the Closing Date, the Closing Date, (b) if the Project Financing
         Agreements shall have been executed during the period from the Closing
         Date to but not including the Conversion Commitment Date, the date of
         execution of


                                      -48-

<PAGE>   54



         the Project Financing Agreements, and (c) if the Project Financing
         Agreements shall not have been executed prior to the Conversion
         Commitment Date, the Conversion Commitment Date enter into:

         (i)      the Collateral Documents, granting to the Security Agent a
                  valid Lien on the Collateral having the perfection and
                  priority required by Section 9.04 and otherwise in accordance
                  with the terms hereof (and, as a condition of Conversion, AEF
                  shall be satisfied (by receipt of legal opinions (which may
                  be subject to qualifications and limitations that are
                  customary in the jurisdiction where the respective counsel is
                  located) and/or other evidence) that such grant is not void
                  or subject to avoidance if the Customer becomes the subject
                  of an Insolvency Proceeding); and

         (ii)     the Intercreditor Agreement, providing for, in the event that
                  there exists a Project Financing, the pari passu sharing of
                  the Collateral on a pro rata basis as among AEF, the Lenders,
                  the Project Lenders and the ECAs (to the extent of their
                  interests), each such document being in form and substance
                  acceptable to AEF, the Lenders, the applicable ECAs and the
                  Project Lenders.  The Customer hereby consents and agrees to
                  the assignment and pledge of this Agreement and the Note by
                  AEF on the Conversion Date to the Lenders and shall execute
                  all such acknowledgments, confirmations and other documents
                  evidencing the same, as shall be reasonably requested by AEF.

2.12     NOTE.  As additional evidence of the Customer's obligations to pay the
         principal of and interest on the Loans as provided herein, the
         Customer shall execute and deliver to AEF on the Conversion Date, a
         promissory note in substantially the form of Exhibit C hereto, dated
         the Conversion Date, payable to the order of AEF in a principal amount
         equal to the Conversion Amount and otherwise duly completed and
         executed on behalf of the Customer (such note being herein called a
         "NOTE").

2.13     ECA ENHANCEMENT.

         (a)      APPLICABLE TERMS.  Notwithstanding any provision to the
                  contrary herein, if ECA Enhancement is procured with respect
                  to the Customer, during the Tranche B Term and for so long as
                  such ECA Enhancement remains in full force and effect, the
                  Required Distress Recovery Value, maximum Total Advance
                  Rate, maximum Tranche B Term and Average Life of the Tranche
                  B Loan of the Customer shall be as set forth below for the
                  Customer Category listed below corresponding to the following
                  levels of ECA Enhancement procured:


                                      -49-

<PAGE>   55





<TABLE>
<CAPTION>
=====================================================================
           ECA PERCENTAGE                          CUSTOMER CATEGORY
---------------------------------------------------------------------
<S>             <C>                                       <C>
GREATER THAN    = 85%                                     1A
GREATER THAN    = 70%                                     1B
GREATER THAN    = 50%                                     1C
=====================================================================
</TABLE>

                  If ECA Enhancement is procured with respect to the Customer,
                  the Applicable Margin during the Tranche B Term shall be as
                  set forth in ANNEX 1.

         (b)      TERMINATION.  If any ECA Enhancement procured with respect to
                  the Customer is terminated or otherwise ceases to be in full
                  force and effect, then: (i) the Required Distress Recovery
                  Value, maximum Total Advance Rate, maximum Tranche B Term and
                  Average Life of the Tranche B Loan and the Applicable Margin
                  during the Tranche B Term of the Customer shall be
                  automatically re-adjusted, as from the date of such
                  termination or ineffectiveness, such readjustment shall
                  result from AEF's determination of the repayment profile that
                  would have been in effect from the Conversion Date if the
                  Customer had not benefitted from ECA Enhancement (using
                  information contained in the original Appraisal furnished
                  during the Conversion process and the Required Distress
                  Recovery Value, maximum Total Advance Rate, maximum Tranche B
                  Term and Average Life of the Tranche B Loan that would have
                  applied) (the "REVISED PROFILE"), and the Customer shall pay
                  or prepay the difference between the Tranche B Outstandings
                  then outstanding and the Tranche B Outstandings that would
                  have been outstanding on such date under the Revised Profile,
                  pursuant to the following clause (ii); and (ii) the Customer
                  shall pay or prepay, without penalty, no later than fifteen
                  (15) Business Days after the occurrence of the event giving
                  rise to such termination or ineffectiveness, the amount
                  referred to in clause (i) above, as determined by AEF upon
                  the adjustment of the Repayment Profile in connection with
                  the automatic re-adjustment in clause (i) above, together
                  with interest thereon accrued to the date of prepayment, any
                  Break Funding Costs and any fees and other amounts due and
                  payable under this Agreement.  If the procurement of such ECA
                  Enhancement was a condition to Conversion, the Customer shall
                  pay or prepay, without penalty, no later than fifteen (15)
                  Business Days after the occurrence of the event giving rise
                  to such termination or ineffectiveness, the principal amount
                  of the Tranche B Loan, together with interest thereon accrued
                  to the date of such prepayment, any Break Funding Costs and
                  any fees and other amounts due and payable under this
                  Agreement.

2.14     ECA ADDITIONAL TERMS AND CONDITIONS.  The Customer hereby agrees that,
         if any ECA providing ECA Country Risk Coverage or ECA Enhancement
         shall condition such coverage upon the imposition of additional terms
         or conditions binding on the Customer, the Customer shall comply with
         all such additional terms or conditions as if set forth fully herein,
         and if it does not so comply, any terms applicable pursuant to Section
         2.13 shall cease to apply.


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<PAGE>   56




                     SECTION 3.  TAXES AND YIELD PROTECTION

1.031    TAXES

         (a)      Except as required by law, any and all payments by the
                  Customer to AEF shall be made free and clear of, and without
                  deduction or withholding for, any and all present or future
                  taxes, levies, imposts, deductions, charges or withholdings
                  whatsoever imposed, assessed, levied or collected by any
                  jurisdiction or any political subdivision or taxing authority
                  in any thereof, if applicable, together with interest thereon
                  and penalties, fines and surcharges with respect thereto, if
                  any, on or in respect of this Agreement, any Loan, any other
                  Loan Document, the amounts made available to AEF by any
                  Lender for the purpose of funding the Loan or the obligations
                  of the Customer hereunder, and all liabilities with respect
                  thereto, including, without limitation, any taxes, levies,
                  imposts, deductions, charges, withholdings and liabilities
                  that are or would be deducted or withheld from any payments
                  by the Customer as a direct or indirect result of any Lender
                  making amounts available to AEF for the purpose of funding
                  the Loan (all such taxes, levies, imposts, deductions,
                  charges, withholdings and liabilities being herein referred
                  to as "TAXES").

         (b)      The Customer shall pay any present or future stamp or
                  documentary taxes, charges or similar levies that arise from
                  the execution, delivery, filing, recording, registration,
                  notarization or other formalization or enforcement of, or
                  otherwise with respect to, this Agreement, any Loan, any
                  other Loan Document or the obligations of the Customer
                  hereunder or thereunder (herein referred to as "OTHER
                  TAXES").

         (c)      Except as provided in Section 3.01(d), the Customer, from
                  time to time on demand by AEF, shall make a payment to AEF
                  equal to any of the following amounts that AEF may be
                  obligated to pay any Lender providing funds to AEF for the
                  purpose of funding the Loan, together with an additional
                  amount equal to any taxes incurred by AEF as a result of the
                  receipt or accrual of the payment made by the Customer
                  pursuant to this Section 3.01(c) (including in such payment
                  any such additional amount):  any and all additional amounts
                  that AEF may be obligated to pay, on a basis consistent with
                  Section 3.01(d), to such Lender with respect to any taxes,
                  levies, imposts, deductions, charges or withholdings
                  (together with interest thereon and penalties, fines and
                  surcharges with respect thereto) that are or would be
                  deducted or withheld from payments made by AEF to such Lender
                  with respect to the funds made available by such Lenders
                  (herein referred to as "FUNDING-RELATED TAXES").

         (d)      If the Customer shall be required by law to deduct or
                  withhold any Taxes or Other Taxes ("COVERED TAXES") from or
                  in respect of any sum payable hereunder to AEF or to any
                  Lender then, subject to Section 3.01(f): (i) the Customer
                  shall make such deductions as are required by applicable law,
                  (ii) the Customer shall pay the full amount deducted by the
                  relevant taxation


                                      -51-

<PAGE>   57



                  authority or other authority in accordance with applicable
                  law and (iii) except as provided in Section 3.01(f), the sum
                  payable shall be increased by such additional amounts as
                  shall be necessary so that after making all required
                  deductions or withholdings of Covered Taxes (including
                  deductions or withholdings applicable to such additional
                  amounts) AEF or such Lender, as the case may be, shall
                  receive an amount equal to the sum that it would have
                  received had no deduction or withholding of Covered Taxes
                  been made.  For the avoidance of doubt, the Customer shall be
                  entitled to withhold or deduct Taxes or Other Taxes as
                  required by law, in whole or in part, subject to the claim of
                  an exemption or reduction by AEF or the relevant Lender, as
                  the case may be, as contemplated by Section 3.01(f) and
                  subject to the obligation to pay additional amounts in the
                  case of Covered Taxes pursuant to clause (iii) of this
                  Section 3.01(d).  Within sixty (60) days after the date of
                  any payment by the Customer of Taxes or Other Taxes the
                  Customer shall furnish to AEF the original or a certified
                  copy of a receipt evidencing payment thereof, or other
                  evidence of payment satisfactory to AEF.

         (e)      Without prejudice to the provisions of Section 3.01(c), if
                  AEF or any Lender (whether on its own behalf or on behalf of
                  another Person) is required, directly or indirectly, to make
                  any payment, directly or indirectly, on account of Covered
                  Taxes (other than (i) a tax imposed on the net income of its
                  Lending Office by the jurisdiction in which it is
                  incorporated or in which its Lending Office is located and
                  (ii) Covered Taxes and Funding Related Taxes to the extent
                  that the Customer is not required to make any payment thereof
                  by reason of the last sentence of Section 3.01(f)) or any
                  liability in respect of any such payment is asserted, levied,
                  imposed or assessed against it (or such other Person), the
                  Customer shall, upon demand of AEF, promptly indemnify AEF or
                  such Lender, as the case may be, against such payment or
                  liability, together with any interest, penalties and expenses
                  payable or incurred in connection therewith.

         (f)      If any exemption from, or reduction in the rate of any
                  Covered Tax is reasonably available to AEF or a Lender, AEF
                  shall deliver, and shall request such Lender to use
                  reasonable efforts to deliver, to the Customer such form or
                  forms as the Customer may reasonably identify to AEF as being
                  required under applicable law as a condition to exemption
                  from, or reduction of, such Covered Tax.  The Customer shall
                  not withhold or deduct, or shall reduce the rate of
                  withholding or deduction of, any Taxes or Other Taxes with
                  respect to which AEF or a Lender, as the case may be,
                  provides such duly executed form or forms together with such
                  other evidence of the eligibility of AEF or such Lender for
                  such exemption or reduction as the Customer may reasonably
                  require as may be required under applicable law as a
                  condition to exemption from, or reduction of, the withholding
                  of such Taxes or Other Taxes.  AEF agrees to promptly notify
                  the Customer of any change in circumstances of which it
                  reasonably should be aware that would modify or render
                  invalid any claimed exemption or reduction of any Tax or
                  Other Tax.  The Customer shall not be required to pay amounts
                  pursuant to Section 3.01(e) or to pay any


                                      -52-

<PAGE>   58



                  additional amounts pursuant to clause (iii) of Section
                  3.01(d) if the Covered Taxes or Funding Related Taxes, as the
                  case may be, are imposed as a result of (A) a failure of AEF
                  to comply with its obligations under this Section 3.01(f) or
                  (B) a failure of any Lender providing funds to AEF for
                  purposes of making the Loans to comply with any obligations
                  to AEF that are analogous to the obligations of AEF contained
                  in this Section 3.01(f) or (C) a relocation by any Lender of
                  its Lending Office to a jurisdiction other than (x) the
                  jurisdiction in which such Lending Office was located at the
                  time such Loan was made or (y) a jurisdiction listed on ANNEX
                  4, PROVIDED that, if any Lender has relocated its Lending
                  Office to another jurisdiction and is not located in a
                  jurisdiction listed on ANNEX 4, the amount of the Covered
                  Taxes or Funding Related Taxes, as the case may be, for
                  purposes of clause (iii) of Section 3.01(d), shall be deemed
                  equal to the Taxes, if any, that would have constituted
                  Covered Taxes or Funding Related Taxes, as the case may be,
                  had such Lender not relocated its Lending Office.

         (g)      If AEF or any Lender providing funds to AEF to make Loans
                  hereunder shall determine in its sole discretion that either
                  AEF or such Lender has actually realized a tax benefit
                  (whether by way of deduction, credit, allocation or
                  apportionment of income or otherwise), as a result of any
                  Taxes, Other Taxes or Funding-Related Taxes paid or
                  indemnified by the Customer pursuant to this Section 3.01,
                  AEF or such Lender, as the case may be, shall so advise the
                  Customer and pay to the Customer an amount which AEF or such
                  Lender, as the case may be, shall determine in its sole
                  discretion is equal to the amount of such tax benefit.

         (h)      If the Customer is required to pay additional amounts to AEF
                  pursuant to Section 3.01(d), then AEF may, but shall not have
                  any obligation to, assign the Loans and the Commitments and
                  all other rights and obligations of AEF hereunder and under
                  the other Loan Documents to any Eligible Assignee.  If the
                  Customer is required to pay any amounts to AEF pursuant to
                  Section 3.01(d) as Funding-Related Taxes, then AEF may
                  request that any Lender causing the imposition of such
                  Funding-Related Taxes change the jurisdiction of its Lending
                  Office.

         (i)      The agreements and obligations of the Customer contained in
                  this Section 3.01 shall survive the payment in full of all
                  other obligations of the Customer hereunder.

1.032    INCREASED COSTS AND REDUCTION OF RETURN

         (a)      If AEF or any Lender (each such Person a "RECOVERING PERSON")
                  shall determine that, due to either (i) the introduction of
                  or any change (including, without limitation, by way of
                  imposition or increase of reserve requirements, capital
                  adequacy, minimum capital or other requirements) in or in the
                  interpretation or application of any applicable law or
                  regulation by a Governmental Authority or any court having
                  jurisdiction over such Recovering


                                      -53-

<PAGE>   59



                  Person or by an authority with which such Recovering Person
                  customarily complies or (ii) the introduction of or any
                  change in or in the interpretation or application of any
                  guideline or request from any central bank or other
                  Governmental Authority (which, if not having the force of
                  law, is generally complied with by banks in the relevant
                  jurisdiction), in each case occurring after the date hereof,
                  there shall be any increase in the cost to AEF of agreeing to
                  make or making, funding or maintaining Loans or the cost to
                  such Lender of agreeing to provide or providing funds to AEF
                  to make, fund or maintain Loans hereunder, then, so long as
                  the Loans hereunder are treated no less favorably than AEF's
                  other similarly situated loans, the Customer shall be liable
                  for, and shall from time to time, upon demand therefor by AEF
                  pay to AEF for its own account or for the account of such
                  Lender, as the case may be, additional amounts as are
                  sufficient in the reasonable determination of the Recovering
                  Person to compensate such Recovering Person for such
                  increased costs to the extent such increased costs result
                  from any of the foregoing in clause (i) or (ii) above; (A)
                  provided, however, that in the case of an increase referred
                  to above, AEF shall be entitled to make demand on the
                  Customer in respect thereof and the Customer shall be
                  obligated to pay AEF therefor only within ninety (90) days
                  after the date of such change or, if earlier, the date AEF
                  obtains actual knowledge of such interpretation or
                  application; provided, further, that if AEF fails to give
                  such notice within such ninety (90) day period, AEF shall,
                  with respect to compensation payable pursuant to this Section
                  3.02(a), be entitled to payment only for costs incurred from
                  and after the date that is ninety (90) days prior to the date
                  that AEF does give such notice; and (B) provided, however,
                  that in the case of an increase referred to above resulting
                  from the interpretation by a Governmental Authority affecting
                  any Lender, AEF shall be entitled to make demand on the
                  Customer in respect thereof and the Customer shall be
                  obligated to pay AEF therefor only within ninety (90) days
                  after AEF is notified by the Lender affected by such
                  interpretation; provided, further, that if AEF fails to give
                  such notice within such ninety (90) day period, the
                  Customer's obligation to pay AEF for the account of such
                  Lender with respect to compensation payable to the Lender
                  pursuant to this Section 3.02(a) shall accrue from and after
                  the date that is ninety (90) days prior to the date that such
                  Lender gives such notice to AEF.

         (b)      If any Recovering Person shall determine that the
                  introduction of any applicable law, rule, regulation or
                  guideline regarding capital adequacy, or any change therein
                  or any change in the interpretation by a Governmental
                  Authority having jurisdiction over such Recovering Person or
                  administration thereof by any central bank or other
                  Governmental Authority charged with the interpretation or
                  administration thereof, or compliance by such Recovering
                  Person (or, in respect of a Lender, its Lending Office) or
                  any corporation controlling such Recovering Person, with any
                  request, guideline or directive regarding capital adequacy
                  (whether or not having the force of law) of any such central
                  bank or other authority, whether implemented at the national
                  level or otherwise, except by application of the Basle Accord
                  as in effect on the date hereof, affects or would affect the
                  amount of capital required or expected to be


                                      -54-

<PAGE>   60



                  maintained by AEF or such Lender (or its Lending Office) or
                  any Person controlling such Recovering Person and determines
                  that the amount of such capital is increased as a consequence
                  of its obligation under this Agreement, then, upon demand of
                  AEF (with a description thereof), the Customer shall
                  immediately pay to AEF for its own account or for the account
                  of such Recovering Person from time to time as specified by
                  AEF, additional amounts sufficient in the reasonable opinion
                  of the Recovering Person to compensate such Recovering Person
                  for such increase; (A) provided, however, that in the case of
                  an increase referred to above resulting from the
                  interpretation by a Governmental Authority affecting AEF, AEF
                  shall be entitled to make demand on the Customer in respect
                  thereof and the Customer shall be obligated to pay AEF
                  therefor only within ninety (90) days after the date of such
                  change or, if earlier, the date AEF obtains actual knowledge
                  of such interpretation; provided, further, that if AEF fails
                  to give such notice within such ninety (90) day period, AEF
                  shall, with respect to compensation payable pursuant to this
                  Section 3.02(b), be entitled to payment only for costs
                  incurred from and after the date that is ninety (90) days
                  prior to the date that AEF does give such notice; and (B)
                  provided, however, that in the case of an increase referred
                  to above resulting from the interpretation by a Governmental
                  Authority affecting any Lender, AEF shall be entitled to make
                  demand on the Customer in respect thereof only within ninety
                  (90) days after AEF is notified by the Lender affected by
                  such interpretation; provided, further, that if AEF fails to
                  give such notice within such ninety (90) day period, the
                  Customer's obligation to pay AEF for the account of such
                  Lender with respect to compensation payable to the Lender
                  pursuant to this Section 3.02(b) shall accrue from and after
                  the date that is sixty (60) days prior to the date such
                  Lender gives such notice to AEF.

         (c)      The Customer shall not be required to pay any compensation
                  payable pursuant to Section 3.02(a) or (b) above if such
                  compensation is imposed as a result of a relocation by any
                  Lender of its Lending Office to a jurisdiction other than (i)
                  the jurisdiction in which such Lending Office was located at
                  the time such Loan was made or (ii) a jurisdiction listed on
                  ANNEX 4; and if such Lender has relocated its Lending Office
                  to another jurisdiction that is not located in a jurisdiction
                  listed on ANNEX 4, the amount of any compensation for
                  purposes of Section 3.02(a) and (b) shall be deemed equal to
                  the compensation, if any, that would have been payable had
                  such Lender not relocated its Lending Office.

         (d)      AEF shall give notice of anticipated costs payable under
                  Section 3.02(a) or (b) above upon obtaining actual knowledge
                  thereof and shall use reasonable best efforts to cause the
                  Lenders, to the extent practicable, to give the Customer
                  notice of anticipated costs payable under Section 3.02(a) or
                  (b) above upon obtaining actual knowledge thereof, PROVIDED
                  that the failure to give such notice shall not affect the
                  Customer's obligations hereunder in any respect.  A
                  certificate as to the amount of such increased costs (setting
                  forth in reasonable detail, subject to any confidentiality
                  requirements of AEF's or such Lender's


                                      -55-

<PAGE>   61



                  policies applied in the same manner and to the same degree as
                  to other information released to similarly situated Persons,
                  and to applicable bank regulations) the event by reason of
                  which AEF or such Lender claims such increase and the basis
                  for the determination of the amount of such increased cost,
                  submitted to the Customer by AEF, shall be conclusive and
                  binding for all purposes, absent manifest error or fraud.

         (e)      If the Customer shall be required to pay any amount to AEF
                  pursuant to this Section 3.02 based solely on the obligations
                  of AEF under this Agreement, then AEF shall use reasonable
                  efforts (consistent with legal and regulatory restrictions)
                  to transfer its rights and obligations hereunder to an
                  Affiliate of AEF so as to eliminate any such payment by the
                  Customer that may thereafter accrue if such change, in the
                  sole opinion of AEF, shall not otherwise adversely affect
                  AEF.

         (f)      AEF shall use reasonable efforts to seek to avoid or
                  minimize, including by changing the jurisdiction of its
                  Lending Office, any additional amounts the Customer may be
                  required to pay to AEF pursuant to this Section 3.02,
                  PROVIDED that this provision shall not obligate AEF to take
                  any action that would, in its reasonable judgment, adversely
                  affect AEF.

1.033    FUNDING LOSSES.  The Customer agrees to reimburse AEF and to hold it
         harmless from any loss, cost or expense which AEF may sustain or
         incur, including any loss, cost or expense that AEF may sustain or
         incur in relation to the facility provided to AEF by the Lenders as a
         consequence of:  (a) the failure of the Customer to make any required
         payment or prepayment of principal of any Loan (including, without
         limitation, payments made after any acceleration thereof), (b) the
         failure of the Customer (including, without limitation, as a result of
         the failure of any condition precedent specified in Section 4 to be
         satisfied) to borrow a Loan after the Customer has given a Notice of
         Drawdown, (c) the failure of the Customer (including, without
         limitation, as a result of the failure of any condition precedent
         specified in Section 4 to be satisfied) to convert the Tranche A Loans
         to a Tranche B Loan on the scheduled Conversion Date, (d) the failure
         of the Customer to make any prepayment after the Customer has given a
         notice of prepayment in accordance with Section 2.05, (e) the
         prepayment or repayment of a Loan (including, without limitation,
         payments made after any acceleration thereof) on a day which is not
         the last day of the Interest Period with respect thereto, including
         any Break Funding Costs or (f) the failure of the Customer to make
         payment of interest on any Loan on the Interest Payment Date for such
         Loan, including, in each case, any Break Funding Costs.  Any unpaid
         sum shall (for the purposes of this Section 3.03 or Section 3.02)
         accrue interest at the Default Rate as provided in Section 2.07(c).
         This covenant shall survive the payment in full of all obligations of
         the Customer hereunder.

1.034    INABILITY TO DETERMINE RATES.  If, in relation to any Loan and any
         Interest Period relating thereto, for any reason AEF determines that
         the Interest Basis for such Loan for such Interest Period cannot be
         determined at or about 11:00 a.m. (London time) on the Quotation Date
         for such Interest Period after taking into account clauses (b)


                                      -56-

<PAGE>   62



         and (c) of the definition of "INTEREST BASIS" in Section 1.01, then,
         notwithstanding the provisions of Section 2.07, AEF shall give notice
         of such fact to the Customer.  Upon receipt of such notice, the
         Customer may revoke any Notice of Drawdown then submitted by it.  If
         the Customer does not revoke such notice, AEF shall, in accordance
         with the terms hereof, make the Loans requested by the Customer in
         such notice.  The duration of the Interest Period applicable to each
         Loan that commences after receipt by the Customer of such Notice of
         Drawdown shall be one month and the rate of interest applicable
         thereto from time to time during each such Interest Period shall be
         the rate per annum which is the sum of the Applicable Margin and the
         arithmetic mean (rounded upwards, if not already such a multiple, to
         the nearest whole multiple of one-sixteenth of one percent (1/16th of
         1%)) of the rates notified by AEF to be the cost (expressed as a
         percentage rate per annum) to AEF of funding, from whatever source it
         may choose, such Loan during such Interest Period.  Such interest rate
         shall apply to each Interest Period succeeding the first Interest
         Period to which it was applied unless and until AEF shall determine
         that the Interest Basis for such Loan can once again be determined and
         so notifies the Customer, whereupon interest on the affected Loans
         shall again be determined in accordance with Section 2.07(a),
         effective commencing on the first day of the Interest Period next
         succeeding the date of such notice.

1.035    ILLEGALITY.  Notwithstanding any other provision of this Agreement, in
         the event that, after the date of this Agreement, it becomes unlawful
         for AEF to honor its obligation to make or maintain Loans hereunder,
         or AEF is notified by any Lender that it has become illegal for such
         Lender to honor its obligation to make or maintain loans to AEF, then
         AEF shall promptly notify the Customer thereof whereupon (a) AEF's
         Commitments shall automatically be reduced to zero or suspended to the
         extent required by applicable law and (b) the Customer shall, on such
         date as AEF shall specify in such notice (which date shall not be
         earlier than the last Business Day before AEF's or such Lender's
         obligations shall become unlawful) prepay such Loans in full or the
         part thereof required by applicable law, together with all interest
         and other amounts owing by the Customer to AEF hereunder with respect
         to the portion prepaid, PROVIDED that before giving the notice
         referred to above, AEF will consult with the Customer for a period of
         not more than forty-five (45) days for the purpose of identifying, and
         shall take all reasonable actions available to AEF (including the
         assignment of AEF's rights and obligations hereunder to an Eligible
         Assignee) if such actions will avoid or mitigate the effect of such
         illegality and will not, in the sole opinion of AEF, be
         disadvantageous to AEF.


                        SECTION 4.  CONDITIONS PRECEDENT

1.041    CONDITIONS TO INITIAL TRANCHE A LOAN.  The obligation of AEF to make
         its initial Tranche A Loan hereunder is subject to the determination
         by AEF, in its discretion, that each of the following conditions has
         been satisfied:

         (a)      CLOSING DOCUMENTS.  AEF shall have received each of the
                  following, in form and substance satisfactory to, and, in the
                  case of the materials referred to in


                                      -57-

<PAGE>   63



                  clauses (vii), (viii) and (ix), certified as a true copy as
                  of the Closing Date in a manner satisfactory to, AEF:

                  (i)      CUSTOMER LOAN AGREEMENT. This Agreement, duly
                           executed and delivered by the Customer and AEF.

                  (ii)     MULTIPARTY AGREEMENT. The Multiparty Agreement, duly
                           executed and delivered by the Customer, the LSA
                           Party, AEF and AE.

                  (iii)    FEE LETTER. The Fee Letter, duly executed and
                           delivered by the Customer and AEF.

                  (iv)     ACKNOWLEDGMENT. If applicable, any acknowledgment by
                           an Affiliate of the Customer, as referred to in
                           Section 6.25.

                  (v)      COLLATERAL DOCUMENTS. If the Collateral Documents
                           shall be required, pursuant to Section 2.11 of this
                           Agreement, to have been executed on or prior to the
                           Closing Date, the Assignment and Security Agreement,
                           the TTC&M Mortgage, the Consents to Assignment and
                           all other Collateral Documents, duly executed and
                           delivered by the Customer and all other parties
                           thereto.

                  (vi)     INTERCREDITOR AGREEMENT. If the Intercreditor
                           Agreement shall be required, pursuant to Section
                           2.11 of this Agreement, to have been executed on or
                           prior to the Closing Date, the Intercreditor
                           Agreement, duly executed and delivered by AEF, the
                           Security Agent, the Lenders (or an agent acting on
                           their behalf), the applicable ECAs and the Project
                           Agent.

                  (vii)    CONSTRUCTION AND PAYMENT SCHEDULE. A true, complete
                           and correct copy of the Construction and Payment
                           Schedule.

                  (viii)   CONSTITUTIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY. A
                           Certificate of the secretary or other appropriate
                           Responsible Officer of the Customer certifying as a
                           true copy:

                           (A)      The constitutional documents of the
                                    Customer, as in effect on the Closing Date;

                           (B)      Copies of the resolutions of the board of
                                    directors (or other Persons having similar
                                    functions) of the Customer approving and
                                    authorizing the execution, delivery and
                                    performance by the Customer of this
                                    Agreement and the other Loan Documents to
                                    be executed and delivered by the Customer
                                    as contemplated hereby and authorizing the
                                    borrowing of the Loans, together with, as
                                    applicable, any agreements for the lease of
                                    transponders


                                      -58-

<PAGE>   64



                                    or use of communications capacity on the
                                    Satellite that constitute Collateral; and

                           (C)      The names and true signatures of
                                    Responsible Officers of the Customer
                                    authorized to execute, deliver and perform,
                                    as applicable, this Agreement and all other
                                    Loan Documents to be delivered by it
                                    hereunder, together with, if applicable,
                                    any agreements for the lease of
                                    transponders or use of communications
                                    capacity on the Satellite that constitute
                                    Collateral.

                  (ix)     FINANCIAL STATEMENTS. The Base Financial Statements
                           of the Customer.

                  (x)      PROCESS AGENT. A letter from CT Corporation System,
                           accepting its appointment as process agent in New
                           York for the Customer.

                  (xi)     LEGAL OPINIONS. An opinion of (A) Paul, Weiss,
                           Rifkind, Wharton & Garrison, special New York
                           counsel to the Customer, dated the Closing Date and
                           addressed to AEF, (B) Wiley, Rein & Fielding,
                           special Federal Communications Commission counsel to
                           the Customer, dated the Closing Date and addressed
                           to AEF and (C) such other opinions as requested by
                           AEF, each in form and substance acceptable to AEF.

                  (xii)    OTHER DOCUMENTS. Such other statements,
                           certificates, documents, information, approvals or
                           opinions with respect to the Project or matters
                           referred to or contemplated by this Agreement or the
                           other Loan Documents as AEF may reasonably request.

         (b)      PAYMENT OF FEES.  All costs, accrued and unpaid fees and
                  expenses hereunder and under any of the other Loan Documents
                  (including, without limitation, legal fees and expenses) to
                  the extent then due and payable by the Customer, including,
                  without limitation, any arising under or contemplated by
                  Section 2.08, 3.01 or 10.04, shall have been paid in full or
                  capitalized as permitted hereunder or arrangements
                  satisfactory to AEF shall have been made to cause them to be
                  paid in full concurrently with the disbursement of the
                  proceeds of the Loan to be made on such date.

         (c)      DOWN PAYMENT.  AE shall have confirmed that the LSA Party has
                  paid to AE an amount equal to at least four million four
                  hundred thousand Dollars ($4,400,000) and said amount shall
                  not have been financed or guaranteed by AEF or an Affiliate
                  of AEF.

1.042    CONVERSION CONDITIONS.  The obligation of AEF to convert the Tranche A
         Loans to the Tranche B Loan hereunder is subject to the determination
         by AEF, on each of the Conversion Commitment Date and the Conversion
         Date, in its discretion, that each of the following conditions has
         been satisfied:


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         (a)      APPRAISAL.  AEF shall have received a true, complete and
                  correct copy of the Appraisal, prepared and delivered by the
                  Appraiser at the Customer's sole cost and expense, as set
                  forth in Sections 9.02(a)(i) and (c)(i), which Appraisal
                  shall (i) conclude that, taking into account all applicable
                  restrictions on resale, the Fair Market Value is equal to or
                  greater than the Equipment Cost as of the In-Orbit
                  Commissioning Date, (ii) state that, taking into account all
                  applicable restrictions on resale, the Assumed Distress Value
                  as of the In-Orbit Commissioning Date shall be in an amount
                  sufficient so as to permit the Distress Recovery Value to be
                  equal to no less than the applicable Required Distress
                  Recovery Value and (iii) specify the estimated economic and
                  warranted life of the Satellite which shall be equal to or
                  longer than the Tranche B Term.

         (b)      CUSTOMER CATEGORY.  AEF shall, in its discretion, have
                  determined the Customer Category for the Customer in
                  accordance with the criteria set forth in ANNEXES 1, 2 AND 3.

         (c)      TRANCHE B CONDITIONS PRECEDENT.  AEF shall, in its
                  discretion, have determined that each of the Tranche B
                  Conditions Precedent has been satisfied or shall have
                  received evidence as to the satisfaction of the Tranche B
                  Conditions Precedent on the date that is L minus (-) fifteen
                  (15) days and shall have received a certificate from a
                  Responsible Officer of the Customer to the effect that each
                  of the Conversion Conditions and the Tranche B Conditions
                  Precedent has been satisfied, setting forth in reasonable
                  detail any calculations necessary to demonstrate such
                  satisfaction.

         (d)      INTEREST PAYMENTS.  Any interest due and payable by the
                  Customer hereunder shall have been paid or capitalized as
                  permitted hereunder as of the Conversion Commitment Date, and
                  the Customer shall not have been in default during the
                  Tranche A Term with respect to payments of interest or other
                  amounts, due and payable hereunder or under the Fee Letter
                  prior to the Conversion Commitment Date, PROVIDED that for
                  the purpose of determining satisfaction of this condition a
                  default shall be defined as a failure to make a payment of
                  interest or other amounts due and payable by the Customer
                  hereunder or under the Fee Letter within five (5) Business
                  Days of the date when due.

         (e)      PROJECT FINANCING.  If the Customer shall have been
                  determined to be a Category 2 Customer or a Category 3
                  Customer, then AEF shall have received evidence that the
                  Customer has obtained a firm and binding (subject to no
                  conditions precedent that, in AEF's reasonable opinion, are
                  unlikely to be timely satisfied) commitment for the Project
                  Financing, together with evidence as to the application of
                  the Project Loans to the Equipment Cost as described in the
                  Business Plan.

         (f)      FINANCIAL PRO FORMA; CONVERSION BASE CASE.  If the Customer
                  shall have been determined to be a Category 1C Customer, a
                  Category 2 Customer or a Category 3 Customer, then AEF shall,
                  in its discretion, have determined that


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<PAGE>   66



                  the financial pro forma referred to in Section 9.02(c)(i) (if
                  the Customer shall have been determined to be a Category 1C
                  Customer) or the Conversion Base Case (if the Customer shall
                  have been determined to be a Category 2 Customer or a
                  Category 3 Customer) complies with the required financial
                  tests as set forth in ANNEXES 1, 2 OR 3, respectively.

         (g)      OPERATIONAL CONTROL OF THE SATELLITE.  If AEF or the Security
                  Agent shall have theretofore requested the Customer to
                  deliver evidence pursuant to Sections 6.16(b) and (c), AEF or
                  the Security Agent (whichever has made the request) shall
                  have received such evidence, which is satisfactory to such
                  Person for such purpose.

         (h)      LOCATION OF DOMICILE, LICENSING AND RECEIPT OF REVENUES.
                  Each country in which the Customer is Domiciled, Licensed or
                  receiving a substantial portion of its Project revenues is a
                  Permitted Location.

         (i)      LOCATION OF GROUND FACILITIES.  Each of the items described
                  in clause (g) of the definition of Collateral (other than
                  those items the absence of which could not reasonably be
                  expected to cause a Material Adverse Effect) necessary to
                  operate and maintain the Satellite that cannot, in the
                  judgment of AEF, be substituted in a Permitted Location
                  before the inability to operate the Satellite could
                  reasonably be expected to have a Material Adverse Effect is
                  located in a Permitted Location.

1.043    TRANCHE B CONDITIONS PRECEDENT.  The obligation of AEF to convert the
         Tranche A Loans to the Tranche B Loan hereunder is subject to the
         determination by AEF, on each of the Conversion Commitment Date (other
         than in the cases of the items referred to in Sections 4.03(a)(vii)
         and 4.03(a)(xv)) and the Conversion Date, in its discretion, that each
         of the following conditions has been or continues to be satisfied:

         (a)      CONVERSION DOCUMENTS.  AEF shall have received each of the
                  following, in form and substance satisfactory to, and, in the
                  case of the materials referred to in clauses (i), (v), (vi),
                  (vii), (viii), (ix), (x), (xi), (xii), (xiii), (xiv), (xv)
                  and (xvii), certified as a true copy as of the Conversion
                  Commitment Date and the Conversion Date in a manner
                  satisfactory to, AEF (provided that, in lieu of redelivering
                  any previously delivered items on the Conversion Date, the
                  Customer may deliver or cause to be delivered to AEF on the
                  Conversion Date "reaffirmations" satisfactory to AEF of such
                  items signed by the appropriate Person to the effect that
                  such items have not been modified since they were previously
                  delivered and that they remain in full force and effect on as
                  of the Conversion Date as fully as if dated and delivered on
                  the Conversion Date):

                  (i)      CONSTITUTIONAL DOCUMENTS; RESOLUTIONS; INCUMBENCY.
                           A certificate of the secretary or other appropriate
                           Responsible Officer of the Customer certifying:



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<PAGE>   67



                           (A)      The constitutional documents of the
                                    Customer, as in effect on the Conversion
                                    Commitment Date;

                           (B)      Copies of the resolutions of the board of
                                    directors (or Persons having similar
                                    functions) of the Customer approving and
                                    authorizing the execution, delivery and
                                    performance by the Customer of the Loan
                                    Documents, the Satellite Contracts and any
                                    agreements for the lease of transponders or
                                    use of communications capacity on the
                                    Satellite that constitute Collateral not
                                    previously approved and authorized as of
                                    the Closing Date; and

                           (C)      The names and true signatures of
                                    Responsible Officers of the Customer
                                    authorized to execute, deliver and perform,
                                    as applicable, the Loan Documents, the
                                    Satellite Contracts and any agreements for
                                    the lease of transponders or use of
                                    communications capacity on the Satellite
                                    that constitute Collateral not previously
                                    approved and authorized as of the Closing
                                    Date.

                  (ii)     COLLATERAL DOCUMENTS. Unless already executed and
                           delivered pursuant to Sections 2.11 and 4.01, the
                           Assignment and Security Agreement, the TTC&M
                           Mortgage, the Consents to Assignment and all other
                           Collateral Documents, together with certificates,
                           opinions of counsel and other documentation
                           (including, without limitation, a consent by the
                           Customer to the assignment and pledge by AEF to the
                           Lenders of its rights under this Agreement and the
                           Collateral Documents), duly executed and delivered
                           by the Customer and all other parties thereto.

                  (iii)    INTERCREDITOR AGREEMENT. Unless already executed and
                           delivered pursuant to Sections 2.11 and 4.01, the
                           Intercreditor Agreement, together with certificates,
                           opinions of counsel and other documentation, duly
                           executed and delivered by AEF, the Security Agent,
                           the Lenders (or an agent acting on their behalf),
                           the applicable ECAs and the Project Agent.

                  (iv)     LEGAL OPINIONS. An opinion of (A) special New York
                           counsel to the Customer, addressed to AEF, (B)
                           special Federal Communications Commission counsel to
                           the Customer, addressed to AEF, and (C) such other
                           opinions as may be requested by AEF, in each case in
                           form and substance acceptable to AEF, and rendered
                           by counsel acceptable to AEF, and accompanied in
                           each case referred to in clauses (A) through (C)
                           above by letters from such counsel addressed to
                           Persons designated by AEF stating that such Persons
                           are entitled to rely on the respective opinions of
                           such counsel.



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<PAGE>   68



                  (v)      FINANCIAL STATEMENTS. Audited financial statements
                           of the Customer covering its preceding three (3)
                           fiscal years (or such shorter period as it shall
                           have had operations), and its most recent unaudited
                           interim financial statements, in form and substance
                           satisfactory to AEF.

                  (vi)     DOMESTIC TELECOMMUNICATIONS APPROVALS. A certificate
                           of a Responsible Officer of the Customer to the
                           effect that all national and local
                           Telecommunications Approvals that are necessary or,
                           in the opinion of AEF, desirable for the
                           construction and launch of the Satellite, the
                           provision of services to the transponders, if
                           applicable, and the construction of the TTC&M
                           Facilities and the Project in general have been
                           obtained and are in full force and effect and
                           unrestricted and unconditional, together with
                           certified copies of all such approvals.

                  (vii)    COLLATERAL CONTRACTS. A true, complete and correct
                           copy of each Contract referred to in the definition
                           of "COLLATERAL" in Section 1.01 as currently in
                           effect (including all exhibits, schedules and
                           documents referred to therein or delivered pursuant
                           thereto, if any), together with any amendments
                           thereto, and any payment schedules in respect
                           thereof, each duly executed and delivered by each
                           party thereto.

                  (viii)   INSURANCE. Not later than L minus (-) thirty (30)
                           days, evidence satisfactory to AEF that the
                           insurance required by Sections 6.06(a) and (b)
                           (excluding clause (ii) thereof) is in effect by the
                           delivery of certified copies of the insurance
                           policies, broker's undertakings and certificates of
                           insurance with respect thereto in form and
                           substance, and issued by companies, satisfactory to
                           AEF (provided that such evidence for the insurance
                           required by Section 6.06(b)(iii) may consist solely
                           of a certificate of insurance) and certificates of
                           an internationally recognized insurance broker
                           satisfactory to AEF certifying that such insurance
                           complies with Sections 6.06(a), (b) (excluding
                           clause (ii) thereof) and (c) covering the risks
                           referred to therein and that all insurance deposits
                           and premiums then due and payable have been paid and
                           that any unpaid balance for the insurance required
                           by Section 6.06(b) (excluding clause (ii) thereof)
                           is due and payable no later than L minus (-) fifteen
                           (15) days. Not later than the Conversion Date, AEF
                           shall have received a certificate from such
                           insurance broker certifying that any such unpaid
                           balance for the insurance required by Section
                           6.06(b) (excluding clauses (ii) and (iii) thereof)
                           has been paid in full.

                  (ix)     EXPORT LICENSES. A true, complete and correct copy
                           of each Export License.

                  (x)      FOREIGN EXCHANGE CONTROL APPROVALS. A true, complete
                           and correct copy of any applicable foreign exchange
                           control approvals.



                                      -63-

<PAGE>   69



                  (xi)     ENVIRONMENTAL PERMITS. A true, complete and correct
                           copy of any applicable Environmental Permits.

                  (xii)    GOVERNMENT APPROVALS. Except as may be already
                           provided in this Section 4.03, true, complete and
                           correct copies of all Government Approvals.

                  (xiii)   INTELLECTUAL PROPERTY. A true, complete and correct
                           copy of any trademarks, patents or agreements
                           necessary with respect to the usage of technology
                           for the Project.

                  (xiv)    PROCESS AGENT. A letter from CT Corporation System
                           (or any successor thereto), confirming its
                           acceptance of appointment as process agent in New
                           York for the Customer.

                  (xv)     ECA COVERAGE. Evidence satisfactory to AEF that any
                           ECA Country Risk Coverage and ECA Enhancement shall
                           be in full force and effect in accordance with the
                           terms thereof under documentation in form and
                           substance satisfactory to AEF and that all
                           conditions precedent to the availability of support
                           thereunder shall have been satisfied.

                  (xvi)    CONFIRMATION OF RELEVANT LOCATIONS. A certificate of
                           a Responsible Officer of the Customer confirming the
                           continuing accuracy of the information contained in
                           the list provided under Section 9.02(d)(ii) or, if
                           any such information is no longer correct,
                           correcting such information.

                  (xvii)   SATELLITE CONTRACT AND TTC&M CONTRACT. A true,
                           complete and correct copy of each of the Satellite
                           Contract and the TTC&M Contract as currently in
                           effect (including all exhibits, schedules and
                           documents referred to therein or delivered pursuant
                           thereto, if any), together with any amendments
                           thereto.

                  (xviii)  OTHER DOCUMENTS. Such other statements,
                           certificates, documents, information, approvals or
                           opinions with respect to the Project or matters
                           contemplated by this Agreement or the other Loan
                           Documents as AEF may reasonably request.

         (b)      INTERNATIONAL TELECOMMUNICATIONS APPROVALS.  Not later than L
                  minus (-) fifteen (15) days, the Customer shall have duly
                  obtained, or caused to have been duly obtained, all
                  international Telecommunications Approvals that are necessary
                  or, in the reasonable opinion of AEF, desirable for the
                  construction, launch, maintenance and operation of the
                  Project as contemplated by the Loan Documents, the Satellite
                  Contracts and any other agreement or instrument entered into
                  from time to time relating to the Project and, if applicable,
                  the Business Plan, including, without limitation, the use of
                  the radio-frequencies and the orbital position of the
                  Satellite, properly coordinated and notified to


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<PAGE>   70



                  the RCB and entered into the Master Register of the RCB, and
                  such international Telecommunications Approvals shall be in
                  full force and effect and unrestricted and unconditional, and
                  the Customer shall have delivered a certificate of a
                  Responsible Officer to that effect.

         (c)      PAYMENT OF FINANCE COSTS AND EXPENSES.  All costs, accrued
                  and unpaid fees and expenses hereunder and under any of the
                  other Loan Documents (including, without limitation, legal
                  fees and expenses) to the extent then due and payable by the
                  Customer, including, without limitation, any arising under or
                  contemplated by Section 2.08, 3.01 or 10.04, shall have been
                  paid in full or capitalized as permitted hereunder or
                  arrangements satisfactory to AEF shall have been made to
                  cause them to be paid in full concurrently with the
                  Conversion of such Loans.

         (d)      TITLE AND LIENS.  AEF shall be satisfied that, concurrently
                  with the execution and delivery of the Collateral Documents,
                  (i) there will be (and, as of the Conversion Date, there has
                  been) delivered to AEF such Lien, judgment, title and
                  registry searches as AEF shall have requested of the
                  Customer, (ii) there will be (and, as of the Conversion Date,
                  there has been) delivered to AEF applications to remove any
                  Lien in favor of any third party not otherwise permitted by
                  Section 7.01, together with copies of the relevant document
                  releasing such Lien and (iii) all such filings, registrations
                  or recordations as may be necessary or appropriate under
                  applicable laws, rules, regulations or orders, or that AEF
                  may reasonably request, shall have been accomplished in order
                  to create, preserve, protect, validate or satisfy the
                  security interest in the Collateral created by the Collateral
                  Documents, as described in Sections 5.03, 5.15 and 5.16 and
                  having the perfection and priority as required by Section
                  9.04, PROVIDED that with respect to the Satellite or any
                  other Collateral, if the Customer shall not have sole and
                  unencumbered title thereto on the Conversion Date, other
                  arrangements satisfactory to AEF shall have been agreed and
                  effected to provide equivalent security to AEF and the
                  Lenders and assurance that such Lien thereon will be created
                  and perfected on or prior to the In-Orbit Commissioning Date.

         (e)      CONTRACT PAYMENTS.  The SPA Party, the LSA Party and the
                  TTC&M Party shall have made the required payments then due
                  under the Satellite Contracts, and (unless the Customer has
                  been determined to be a Category 1A Customer or a Category 1B
                  Customer) the Customer shall have made arrangements
                  satisfactory to AEF to procure financing for, or equity
                  contributions (in compliance with the terms and conditions
                  hereof) in an amount sufficient to fund, the payment of (i)
                  amounts that are required to be paid under the Satellite
                  Contracts with respect to the Project on or after the
                  Conversion Commitment Date and (ii) interest payable on the
                  Total Senior Debt Outstanding for the period of six (6)
                  months following the Conversion Date.

         (f)      EFFECTIVENESS.  This Agreement, the other Loan Documents, the
                  Satellite Contracts and all other consents, approvals or
                  other documents set forth in this


                                      -65-

<PAGE>   71



                  Section 4.03, shall have been duly executed and delivered by
                  the parties thereto and shall be in full force and effect and
                  no section of any Satellite Contract relating to payment
                  terms or any performance guarantees or warranties shall have
                  been amended, modified, revoked, terminated or waived except,
                  in each case, as approved by AEF.  Each of the Satellite
                  Contracts shall contain terms related to guarantees and
                  warranties thereunder acceptable to AEF and the TTC&M
                  Contract shall contain provisions satisfactory to AEF with
                  respect to the performance obligations of the TTC&M Party
                  thereunder and the termination of the TTC&M Party's
                  obligations thereunder.

         (g)      ILLEGALITY.  Making loans into a country in which the
                  Customer is Domiciled, Licensed or receiving a substantial
                  portion of its revenues shall not be an illegal activity for
                  AEF or any of the Lenders and the Customer shall not have
                  become a Prohibited Person.

         (h)      MILITARY ACTIVITIES.  The use and operation of the Satellite
                  shall not be substantially for or on behalf of any
                  governmental or inter-governmental defense or military
                  agency, or any defense or military agency of any political
                  group, or substantially for non-commercial communications in
                  support of the operations or activities of the military,
                  national security or armed forces of any country or political
                  group.

         (i)      RATE CONTRACTS.  If the Customer has been determined to be a
                  Category 2 Customer or a Category 3 Customer, it shall have
                  obtained binding commitments from one or more banks or other
                  financial institutions for Rate Contracts required by Section
                  6.15 to be in effect on the Conversion Date.

         (j)      NOTE.  AEF shall have received the Note duly executed and
                  delivered by the Customer.

1.044    CONDITIONS TO ALL LOANS.  The obligation of AEF to make or Convert any
         Loan to be made or Converted or deemed made by it hereunder (including
         its initial Loan) is subject to the satisfaction of the following
         conditions precedent on the relevant date:

         (a)      NOTICE OF DRAWDOWN.  For purposes of making a Tranche A Loan
                  only, AEF shall have received a Notice of Drawdown.  The
                  Notice of Drawdown delivered by the Customer shall constitute
                  a representation and warranty by the Customer on and as of
                  the date of the Notice of Drawdown that the conditions in
                  Sections 4.04(b), (c) and (d) have been satisfied.

         (b)      CONTINUATION OF REPRESENTATIONS AND WARRANTIES.  The
                  representations and warranties made by the Customer contained
                  in Section 5 of this Agreement and any other Loan Document
                  shall be true, complete and correct on and as of the date of
                  such borrowing or Conversion with the same effect as if made
                  on and as of the date of such borrowing or Conversion (except
                  as to representations and warranties expressly stated to be
                  made only at or as of a specified time or times).


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<PAGE>   72



         (c)      NO EXISTING DEFAULT.  No Default or Event of Default exists
                  as of the date hereof or shall exist as of the date of the
                  making or Conversion of such Loan or shall result from the
                  making or Conversion of such Loan and no default or event of
                  default under the Project Financing Agreements shall exist as
                  of the date of any such Loan.

         (d)      NO MATERIAL ADVERSE EFFECT.  No event or circumstance that
                  could reasonably be expected to have a Material Adverse
                  Effect shall have occurred since (i) with respect to the
                  making of the initial Tranche A Loan, the date hereof, (ii)
                  with respect to the making of any subsequent Tranche A Loan,
                  the date of the immediately preceding notice of drawdown and
                  (iii) with respect to Conversion, the Conversion Commitment
                  Date.


                   SECTION 5.  REPRESENTATIONS AND WARRANTIES

The Customer hereby represents and warrants to AEF as follows as of the date
hereof (or, in the case of any of the following representations that is
expressly limited to being made on a certain date as of such certain date) and
any other date that this Agreement requires the Customer to make the following
representations and warranties:

1.051    EXISTENCE AND POWER.  Each Relevant Company (a) is duly organized,
         validly existing and properly registered and in good standing, as
         applicable, under the laws of the jurisdiction of its organization,
         (b) has the power and authority and all governmental licenses,
         authorizations, consents and approvals required to be held by it as of
         the date hereof to own its properties and assets, carry on its
         business and to execute, deliver and perform its obligations under the
         Loan Documents and the Satellite Contracts, (c) is duly qualified as a
         foreign organization, licensed and registered to do business under the
         laws of each jurisdiction where its ownership, lease or operation of
         property or the conduct of its business requires such qualification
         and (d) is in compliance with all Requirements of Law the
         non-compliance with which could reasonably be expected to have a
         Material Adverse Effect.

1.052    AUTHORIZATIONS; NO CONTRAVENTION.  The execution, delivery and
         performance by the Customer of each of the Loan Documents and each of
         the Satellite Contracts to which it is a party, have been duly
         authorized by all necessary action and do not and will not: (a)
         contravene the terms of that Person's certificate of incorporation,
         memorandum and articles of incorporation or other organization or
         constitutive documents, (b) conflict with or result in any breach or
         contravention of, or the creation or imposition of any Lien under, any
         Contract, injunction, order, decree or undertaking to which such
         Person is a party or is bound (other than the Liens on Collateral to
         be created under the Collateral Documents), (c) violate any
         Requirement of Law, the non-compliance with which could reasonably be
         expected to have a Material Adverse Effect or (d) require any consent
         or approval of the board of directors (or other Persons having similar
         functions) of the Customer or any other Person that has not been
         obtained, and each such consent and approval that has been obtained is
         adequate for its intended purpose and is in full force and effect.


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1.053    GOVERNMENT APPROVALS.  Except as may be otherwise set forth on
         SCHEDULE 5.03 (as may be amended from time to time by the parties
         hereto), all Government Approvals have been obtained and all acts,
         conditions and filings required to be done, fulfilled and performed
         (such Government Approvals, acts, conditions and filing being referred
         to herein as "NECESSARY ACTIONS") in order (a) to enable the Customer
         to enter into, exercise its rights under and perform and comply with
         the obligations expressed to be assumed by it in each Loan Document
         and each Satellite Contract, (b) to ensure that the obligations
         expressed to be assumed by the Customer in each Loan Document and each
         Satellite Contract are legal, valid and binding, (c) to enable it to
         create the Liens contemplated by each of the Collateral Documents and
         to ensure that such Liens are valid, legally binding and enforceable
         and are or will be perfected as required by Section 9.04, and have or
         will have the priority, as required by Section 9.04, and (d) to make
         each Loan Document and each Satellite Contract admissible in evidence
         in each of New York, Luxembourg, The District of Columbia and
         Delaware, have been done, fulfilled and performed; except that (x) in
         the case of the foregoing clause (a), Necessary Actions that can be
         obtained, done, fulfilled and performed without undue cost, burden or
         delay and that are not now required to enable the Customer to exercise
         its rights under and perform and comply with its obligations under the
         Loan Documents and the Satellite Contracts will be obtained, done,
         fulfilled and performed when so required and in any event, with
         respect to any Satellite Contract executed on or before the Conversion
         Date, no later than the Conversion Date, (y) in the case of the
         foregoing clause (c) such Necessary Actions will be obtained, done,
         fulfilled and performed no later than the respective dates that the
         Liens referred to in said clause are required hereby or pursuant
         hereto to be granted, to be perfected and to have the priority
         referred to in said clause and (z) in the case of clause (d),
         Necessary Actions consisting of routine procedural requirements for
         the enforcement of the Loan Documents in a judicial forum that are not
         now required can be obtained, done, fulfilled and performed by AEF
         (without the assistance or cooperation of the Customer) without undue
         cost, burden or delay when so required.  All such Government Approvals
         heretofore obtained or required to be obtained have been duly
         obtained, were validly issued, are in full force and effect, are not
         subject to appeal and are held in the name of, or for the benefit of,
         the appropriate Persons.  The Customer has no reason to believe that
         any such Government Approval that will expire by its term or in
         accordance with Requirements of Law prior to the Maturity Date will
         not be renewed or extended on or prior to such expiration without
         undue cost, delay or burden.  There is no proceeding pending or, to
         the actual knowledge of the Customer, threatened against the Customer
         or any property of the Customer, which seeks, or may reasonably be
         expected, to rescind, terminate, modify or suspend any
         Telecommunications Approval or any other Government Approval.  There
         has not occurred any event that would make unlikely the delivery or
         issuance as anticipated of, and when and as needed, all Government
         Approvals listed on SCHEDULE 5.03.  No such Government Approval
         already obtained is subject to any restriction, condition, limitation
         or other provision that could reasonably be expected to have a
         Material Adverse Effect.  The information set forth in each
         application submitted by the Customer in connection with each such
         Government Approval is accurate and complete in all material respects
         taken as a whole, except for statements or omissions that could not
         reasonably be expected to affect adversely the validity of such


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<PAGE>   74



         Government Approvals.  Except as otherwise provided for in this
         Agreement, no other material consent, approval or authorization of, or
         declaration or filing with, any other Person is required in connection
         with the execution, delivery, performance, validity or enforceability
         of this Agreement, any other Loan Document or any of the Satellite
         Contracts.

1.054    BINDING EFFECT.  This Agreement, each of the other Loan Documents and
         each of the Satellite Contracts to which the Customer or any of its
         Affiliates is a party constitute the legal, valid and binding
         obligations of such Person, enforceable against such Person in
         accordance with their respective terms, except as enforceability may
         be limited by applicable bankruptcy, insolvency, or similar laws
         affecting the enforcement of creditors' rights generally or by
         equitable principles relating to enforceability.

1.055    LITIGATION.  Except as set forth on SCHEDULE 5.05, and except for
         matters arising after the date hereof which could not reasonably be
         expected to have a Material Adverse Effect, (a) there are no actions,
         suits, proceedings, claims or disputes pending, or to the knowledge of
         the Customer, threatened or contemplated at law, in equity, in
         arbitration or before any Governmental Authority, against or affecting
         the Customer or any Subsidiary of the Customer, or any of their
         respective properties, rights or assets or the Project that: (i)
         purport to affect or pertain to this Agreement, any other Loan
         Document or any of the Satellite Contracts, or any of the transactions
         contemplated hereby or thereby, or (ii) if determined adversely to
         such Person could reasonably be expected to have a Material Adverse
         Effect and (b) to the knowledge of the Customer, there are no actions,
         suits, proceedings, claims or disputes pending, or threatened or
         contemplated at law, in equity, in arbitration or before any
         Governmental Authority, against or affecting any Affiliate of the
         Customer (other than a Subsidiary of the Customer), any LSA Party, any
         SPA Party, any Affiliate of any LSA Party or SPA Party, or any of
         their respective properties, rights or assets or the Project that: (i)
         purport to affect or pertain to this Agreement, any other Loan
         Document or any of the Satellite Contracts, or any of the transactions
         contemplated hereby or thereby, or (ii) if determined adversely to
         such Person could reasonably be expected to have a Material Adverse
         Effect.  No injunction, writ, temporary restraining order or any order
         of any nature has been issued against the Customer or any of its
         Subsidiaries or (to the knowledge of the Customer) any Affiliate of
         the Customer (other than a Subsidiary of the Customer), any LSA Party,
         any SPA Party or any Affiliate of any LSA Party or SPA Party, by any
         court or other Governmental Authority purporting to enjoin or restrain
         (excluding any restraint constituting the imposition of a condition
         that the Customer reasonably determines can be satisfied without undue
         cost, burden or delay) such Person from the execution, delivery and
         performance of this Agreement, any other Loan Document or any of the
         Satellite Contracts, or directing that the transactions provided for
         herein or therein not be consummated by such Person as herein or
         therein provided.

1.056    NO DEFAULT.  No Default or Event of Default exists or would result
         from the incurring of obligations by the Customer under any Loan
         Document.  No Relevant Company is in default under or with respect to
         any Contract to which it is a party in any respect


                                      -69-

<PAGE>   75



         (nor would any such default result from the incurring of obligations
         by the Customer under the Loan Documents) which, individually or
         together with all such defaults, could reasonably be expected to have
         a Material Adverse Effect.

1.057    USE OF PROCEEDS.  The proceeds of the Loans are being used solely for
         the purposes set forth in Section 6.11.

1.058    TITLE TO ASSETS.  Each Relevant Company has good record and marketable
         title in and to all of its properties, except for such defects in
         title as could not, individually or in the aggregate, reasonably be
         expected to have a Material Adverse Effect or, if the Customer does
         not have such title to the Satellite or any other Collateral, it will
         have such title on or prior to the In-Orbit Commissioning Date
         pursuant to the terms of the Satellite Purchase Agreement.  Such
         properties are free and clear of all Liens or rights of others, except
         Permitted Liens.

1.059    TAXES.  The Customer has filed all tax returns and reports required to
         be filed and has paid all taxes, assessments, fees and other
         governmental charges levied or imposed upon any Relevant Company or
         any of their respective properties, income or assets or otherwise due
         and payable, except those that are being contested in good faith by
         appropriate proceedings and for which adequate reserves have been
         provided in accordance with Generally Accepted Accounting Principles
         and no Notice of Lien has been filed or recorded.  There is no
         proposed tax assessment against any Relevant Company that could, if
         the assessment were made, reasonably be expected to have a Material
         Adverse Effect.

5.10     FINANCIAL CONDITION

         (a)      SCHEDULE 5.10 sets forth a complete and correct list of the
                  audited financial statements submitted by the Customer and
                  any Guarantor to AEF in order to induce AEF to execute and
                  deliver this Agreement ("BASE FINANCIAL STATEMENTS"), which
                  financial statements shall be for such fiscal periods as AEF
                  shall have reasonably required and such financial statements:
                  (i) were prepared in accordance with Generally Accepted
                  Accounting Principles consistently applied throughout the
                  periods covered thereby, except as otherwise expressly noted
                  therein, (ii) are complete and correct and fairly present the
                  financial condition of the Customer as of the dates thereof
                  and results of operations for the periods covered thereby and
                  (iii) show all Indebtedness and other liabilities, direct or
                  contingent, of the Customer as of the date thereof (including
                  liabilities for taxes and material commitments) that would be
                  required under Generally Accepted Accounting Principles to be
                  disclosed.  Except as referred to or reflected or otherwise
                  provided for in said financial statements as at said date,
                  the Customer had on said date no material contingent
                  liabilities, liabilities for taxes, unusual forward or
                  long-term commitments or unrealized or anticipated losses
                  from any unfavorable commitments of any type whatsoever that
                  would be required under Generally Accepted Accounting
                  Principles to be disclosed.



                                      -70-

<PAGE>   76



         (b)      The financial statements of the Customer Group delivered to
                  AEF pursuant to Section 4.03(a)(v) (the "CONVERSION FINANCIAL
                  STATEMENTS") will, when furnished hereunder:  (i) have been
                  prepared in accordance with Generally Accepted Accounting
                  Principles consistently applied throughout the periods
                  covered thereby, (ii) be complete and correct and fairly
                  present the financial condition of the Customer Group as of
                  the date thereof and results of operations for the periods
                  covered thereby, (iii) provide (together with the Related
                  Accounting Reconciliation) sufficient information to enable
                  AEF, in the opinion of AEF, to apply the tests set out in
                  ANNEX 1, 2 OR 3, as applicable, consistently to the Customer
                  Group and (iv) show all Indebtedness and other liabilities,
                  direct or contingent, of the Customer Group as of the date
                  thereof (including liabilities for taxes and material
                  commitments) that would be required under Generally Accepted
                  Accounting Principles to be disclosed.  Except as referred to
                  or reflected or otherwise provided for in said financial
                  statements as at said date, the Customer Group had on said
                  date no material contingent liabilities, liabilities for
                  taxes, unusual forward or long-term commitments or unrealized
                  or anticipated losses from any unfavorable commitments of any
                  type whatsoever that would be required under Generally
                  Accepted Accounting Principles to be disclosed.

         (c)      Since the date of the most recent financial statements
                  delivered to AEF hereunder, there has occurred no event or
                  circumstance that has had or could reasonably be expected to
                  have a Material Adverse Effect.

5.11     ENVIRONMENTAL MATTERS.  The operations of the Relevant Companies
         comply in all material respects with all Environmental Laws.  On the
         date hereof, the Relevant Companies have obtained all licenses,
         permits, authorizations and registrations required under any
         Environmental Law ("ENVIRONMENTAL PERMITS") necessary for the
         operation of the Project, all such Environmental Permits are valid and
         in full force and effect on the date hereof and the Relevant Companies
         are in compliance with all terms and conditions of such Environmental
         Permits on the date hereof.  Except as set forth on SCHEDULE 5.11,
         none of the Relevant Companies nor any of their respective present
         properties or operations is subject to any outstanding written order
         from or agreement with any Governmental Authority or other Person, nor
         subject to any judicial or docketed administrative proceeding,
         respecting any Environmental Law or Environmental Claim, and there are
         no conditions or circumstances which may give rise to any
         Environmental Claim arising from the operations of any Relevant
         Company, including Environmental Claims associated with any operations
         of any Relevant Company, with a potential liability in excess of five
         million Dollars ($5,000,000) (or its equivalent in another currency or
         other currencies) in the aggregate.

5.12     SUBSIDIARIES.  On the date hereof, the Customer does not have any
         Subsidiaries other than as listed on SCHEDULE 5.12A, and has no equity
         investments in any other corporation or entity other than as listed on
         SCHEDULE 5.12B.



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<PAGE>   77



5.13     INSURANCE.  The properties of the Customer Group are insured with
         financially sound and reputable insurance companies in such amounts,
         with such deductibles and covering such risks as is customarily
         carried by companies engaged in similar businesses and owning similar
         properties in localities where the respective members of the Customer
         Group operate and in any event, in such amounts and with such terms as
         are required by Section 6.06.  Compliance by the Customer with its
         obligations pursuant to Section 6.06 shall constitute, with respect to
         the insurance expressly referred to therein, compliance with its
         obligations under this Section 5.13.

5.14     PROJECT COMPLIANCE.  The Project complies in all material respects
         with all covenants, conditions, restrictions and reservations in the
         Government Approvals, if any, applicable at such time, the Loan
         Documents and the Satellite Contracts applicable thereto, except for
         any failure to comply that could not reasonably be expected to affect
         adversely the validity of such Government Approvals or otherwise to
         have a Material Adverse Effect.

5.15     COLLATERAL.  From and after the Conversion Date, (a) except as may be
         permitted pursuant to the proviso contained in Section 4.03(d), the
         Customer or (in the case of the items referred to in clause (g) of the
         definition of "Collateral") an Affiliate of the Customer shall have
         good, marketable and valid title in and to all of the Collateral free
         and clear of all Liens other than Permitted Liens and (b) no mortgage
         or financing statement or other instrument or recordation covering all
         or any part of the Collateral shall be on file in any recording office
         other than any such filing in connection with the Liens created by the
         Collateral Documents.

5.16     COLLATERAL DOCUMENTS.  From and after the date of the execution and
         delivery of the Collateral Documents, except as may be permitted
         pursuant to the proviso contained in Section 4.03(d), the Collateral
         Documents shall create in favor of the Security Agent legal, valid and
         enforceable Liens on or in all of the Collateral.  All filings,
         recordations, registrations and other actions necessary or desirable
         to perfect such Liens shall have been duly performed on or before the
         Conversion Date and at all times thereafter and each Lien created by
         the Collateral Documents shall, except as permitted by Section 9.04,
         constitute a perfected Lien on or before the Conversion Date and at
         all times thereafter on or in all right, title, estate and interest of
         the Customer or any Affiliate thereof party to the Assignment and
         Security Agreement, as applicable, in the Collateral covered thereby,
         having the perfection and priority required by Section 9.04, and all
         necessary and appropriate consents to such creation and perfection of
         such Liens of each of the parties to the Loan Documents shall have
         been obtained on or before the Conversion Date and at all times
         thereafter.

5.17     SUFFICIENCY OF LOAN DOCUMENTS AND SATELLITE CONTRACTS.  The Loan
         Documents and the Satellite Contracts (and any exhibits or documents
         referred to therein) that have been executed and delivered constitute,
         or will constitute when executed and delivered, all agreements
         required for the acquisition, construction and completion of the
         Project when and as contemplated by the Loan Documents, the Satellite
         Contracts and, if applicable, the Business Plan and all arrangements
         to which the Customer (and, to the best knowledge of the Customer, any
         other obligor) is a party that may


                                      -72-

<PAGE>   78



         affect the security provided to the Security Agent under the
         Collateral Documents, the financial condition, business or operations
         of the Customer or the Project or the ability of the Customer and any
         obligor to observe and perform its obligations under the Loan
         Documents and the Satellite Contracts to which it is a party.  All
         permits, licenses, trademarks, patents or agreements with respect to
         the usage of technology or other property (other than those
         constituting Government Approvals referred to in Section 5.03) that
         are necessary for the acquisition, construction, ownership and
         operation of the Project substantially as contemplated by the Loan
         Documents, the Satellite Contracts and, if applicable, the Business
         Plan (except for those that are not required to be obtained on or
         prior to the date hereof, as to which the Customer has no reason to
         believe they will not obtained by the date required) have been
         obtained, are final and are in full force and effect.  The services to
         be performed, the materials to be supplied and the property interests
         and other rights granted pursuant to the Loan Documents and the
         Satellite Contracts comprise all of the property interests necessary
         to secure any such right material to the acquisition, construction and
         ownership of the Project as contemplated by the Loan Documents, the
         Satellite Contracts and, if applicable, the Business Plan in
         accordance with all applicable laws and as contemplated by the Loan
         Documents and the Satellite Contracts.  There are no material
         services, materials or contractual rights required for the
         acquisition, construction and ownership of the Project other than
         those granted by, or to be provided to the Customer pursuant to, the
         Loan Documents and the Satellite Contracts.

5.18     DISCLOSURE.  The information furnished in writing at or prior to the
         Closing Date by the Customer to AEF in connection with this Agreement
         and the transactions contemplated hereby is and will be, as of the
         Closing Date, true, complete and accurate in every material respect or
         based on reasonable estimates on the date as of which such information
         is stated or certified and is not incomplete by omitting to state any
         material fact necessary to make such information (taken as a whole)
         not misleading in light of the circumstances under which such
         information was made.  The financial projections contained in such
         material and in the Business Plan (if applicable) were made in good
         faith and the assumptions on the basis of which such projections were
         made (when made) are (as of the date of this Agreement) reasonable.
         There is no fact known to the Customer on the date as of which this
         representation and warranty is made that has not been disclosed in
         writing to AEF that could reasonably be expected to have a Material
         Adverse Effect.

5.19     EFFECTIVENESS OF LOAN DOCUMENTS, SATELLITE CONTRACTS AND QUALIFIED
         LEASE AGREEMENTS.  Except as otherwise permitted from time to time
         pursuant to this Agreement, none of the Loan Documents, Satellite
         Contracts or, if applicable, Qualified Lease Agreements that have been
         executed as of the date hereof has been amended, modified or
         terminated at any time, and all of the Loan Documents, Satellite
         Contracts and, if applicable, Qualified Lease Agreements are in full
         force and effect.

5.20     EMPLOYEE BENEFIT LIABILITIES.  Neither the Customer nor any ERISA
         Affiliate sponsors or maintains, or makes contributions to (or has
         sponsored or maintained, or


                                      -73-

<PAGE>   79



         made contributions within the last six (6) years to) any employee
         pension benefit plan subject to ERISA and any regulation promulgated
         thereunder.

5.21     INVESTMENT COMPANY ACT.  If the Customer is subject to the
         jurisdiction of the Investment Company Act of 1940 of the United
         States of America, the Customer is not an "investment company" or a
         Person "controlled" by an "investment company", within the meaning of
         such Act.



                       SECTION 6.  AFFIRMATIVE COVENANTS

The Customer covenants and agrees that, from and after the date hereof and so
long as AEF shall have any Commitment hereunder or any Loan or other amount
shall remain unpaid, unless AEF waives compliance in writing:

1.061    FINANCIAL STATEMENTS.  The Customer shall deliver to AEF in form and
         detail satisfactory to AEF:

         (a)      as soon as available, but not later than one hundred and
                  eighty (180) days after the end of each fiscal year of the
                  Customer, commencing with the fiscal year ending December 31,
                  1997, (i) a copy of the audited consolidated balance sheets
                  of the Customer Group as at the end of such year and the
                  related audited consolidated statements of income,
                  stockholders' equity and cash flows for such fiscal year (or
                  such other audited statements as provide equivalent measures
                  of the Customer Group's financial condition), setting forth
                  in each case in comparative form the figures for the previous
                  year, and accompanied by the unqualified opinion of an
                  internationally-recognized independent public accounting
                  firm, which report shall state that such consolidated
                  financial statements are complete and present fairly the
                  financial position for the periods indicated in conformity
                  with Generally Accepted Accounting Principles applied on a
                  basis consistent with prior years, and (ii) all such
                  additional financial information (including, without
                  limitation, the Related Accounting Reconciliation) in respect
                  of such financial statements as AEF may require for the
                  purposes of determining whether the financial covenants and
                  ratios to be complied with by the Customer Group hereunder
                  have been complied with; together with, if applicable, the
                  operating results projected for such period as set forth in
                  the Business Plan, if any, for such period; and

         (b)      as soon as available, but not later than sixty (60) days
                  after (i) prior to the Conversion Date, each fiscal quarter
                  of the Customer and (ii) on and after the Conversion Date,
                  (A) so long as the Customer shall have been determined to be
                  a Category 1 Customer, the end of each semi-annual period of
                  each fiscal year of the Customer, (B) so long as the Customer
                  shall have been determined to be a Category 2 Customer, and
                  the Customer does not routinely prepare quarterly financial
                  statements, the end of each semi-annual period of each fiscal
                  year of the Customer and (C) so long as the Customer shall
                  have been



                                      -74-
<PAGE>   80



                  determined to be a Category 2 Customer and the Customer does
                  routinely prepare quarterly financial statements, or a
                  Category 3 Customer, the end of each of the first three (3)
                  fiscal quarters of each fiscal year of the Customer,
                  commencing with the first such fiscal quarter (or semi-annual
                  period, as the case may be) to end after the date hereof, a
                  copy of the unaudited consolidated balance sheets of the
                  Customer Group as of the end of such quarter (or semi- annual
                  period, as the case may be) and the related consolidated
                  statements of income, stockholders' equity and cash flows for
                  the period commencing on the first day and ending on the last
                  day of such quarter (or semi-annual period, as the case may
                  be) (or such other statements as prepared by the Customer
                  that provide comparable measures of the Customer Group's
                  financial condition), and certified by an appropriate
                  Responsible Officer as being complete and fairly presenting,
                  in accordance with Generally Accepted Accounting Principles,
                  the financial position and the results of operations of the
                  Customer Group along with all such additional financial
                  information (including, without limitation, the Related
                  Accounting Reconciliation) in respect of such financial
                  statements as AEF may require for the purposes of determining
                  whether the financial covenants and ratios to be complied
                  with by the Customer Group hereunder have been complied with;
                  together with, if applicable, the operating results projected
                  for such period as set forth in the Business Plan, if any,
                  for such period.

1.062    CERTIFICATES; OTHER INFORMATION.  The Customer shall furnish to AEF:

         (a)      concurrently with the delivery of the financial statements
                  referred to in Section 6.01(a) and (b)  above, a certificate
                  of a Responsible Officer of the Customer stating that, to the
                  best of such officer's knowledge, the Customer, during such
                  period, has observed or performed all of its covenants and
                  other agreements, and satisfied every condition contained in
                  this Agreement to be observed, performed or satisfied by it,
                  and that such Responsible Officer has obtained no knowledge
                  of any Default or Event of Default except as specified in
                  such certificate;

         (b)      unless otherwise delivered pursuant to the terms of this
                  Agreement, promptly after the same are filed, copies of all
                  financial statements and regular, periodical or special
                  reports that the Customer may make to, or file with, the
                  national public securities commission and stock exchange
                  having authority over the Customer and any applicable
                  Telecommunications Authority, or any successor thereto or
                  similar Governmental Authorities or successors thereto;

         (c)      if the Customer shall have been determined to be a Category 2
                  Customer or a Category 3 Customer, (i) concurrently with the
                  delivery of the financial statements referred to in Section
                  6.01(a) above, a certificate of a Responsible Officer of the
                  Customer, certifying a true, complete and correct copy of the
                  then current Business Plan and (ii) the Customer shall update
                  the Business Plan, on an annual basis within thirty (30) days
                  before the end of each fiscal year of the Customer, in
                  accordance with the terms of this Agreement, for



                                      -75-
<PAGE>   81



                  purposes of updating the financial projections (including the
                  current debt interest rate) made the previous fiscal year
                  relating to the construction, launch and operation of the
                  Project, such revised Business Plan to be in form and
                  substance satisfactory to AEF;

         (d)      promptly after the receipt by the Customer of the results of
                  the initial in-orbit tests, a description in reasonable
                  detail of any material deviations from the performance
                  specifications for the Satellite set forth in the Satellite
                  Purchase Agreement reflected by such results; and

         (e)      promptly, such additional information regarding the business,
                  affairs or financial condition of any member of the Customer
                  Group as AEF may from time to time reasonably request.

         At any time following the occurrence of an Event of Default, the
         Customer shall allow AEF and the Security Agent to meet directly with
         its auditors and to discuss its business and affairs with such
         auditors.

1.063    NOTICES.  The Customer shall promptly notify (in writing) AEF of:

         (a)      the occurrence of any Default or Event of Default and of the
                  occurrence or existence of any event or circumstance that
                  foreseeably will become a Default or Event of Default, in
                  each case describing the same in reasonable detail and what
                  action the Customer has taken, or intends to take, to cure
                  such Default or Event of Default;

         (b)      the commencement of, or any material development in, any
                  litigation or proceeding against or affecting the Customer
                  (i) in which in respect of a Category 1A Customer or a
                  Category 1B Customer the amount of damages claimed is five
                  million Dollars ($5,000,000) (or its equivalent in another
                  currency or other currencies) or more, in respect of a
                  Category 1C Customer, a Category 2 Customer or a Category 3
                  Customer the amount of damages claimed is two million five
                  hundred thousand Dollars ($2,500,000) (or its equivalent in
                  another currency or other currencies) or more, (ii) in which
                  the revocation, termination, withdrawal, suspension,
                  modification or withholding of any Government Approval is
                  sought or threatened or (iii) that, if determined adversely
                  to the Customer, could reasonably be expected to have a
                  Material Adverse Effect;

         (c)      any change in accounting policies or financial reporting
                  practices of the Customer together with sufficient
                  information in order for AEF (in its discretion) to assess
                  any financial reports submitted to it;

         (d)      any revision of the Construction and Payment Schedule
                  relating to the Satellite Purchase Agreement and the TTC&M
                  Contract after submission thereof as provided in Section
                  9.01;



                                      -76-

<PAGE>   82



         (e)      the date of L, upon the initial determination thereof and
                  each change in L thereafter; and

         (f)      the delivery of, or receipt of, any notice of (i) a reduction
                  in coverage of any insurance required to be maintained by
                  Sections 6.06(a) and (b) or otherwise procured by the
                  Customer covering loss of or damage to any of the Customer's
                  property (other than a reduction in coverage or amount
                  resulting from a payment thereunder) or (ii) the cancellation
                  or non-renewal of any insurance policy.

         Each notice pursuant to this Section shall be delivered promptly after
         a Responsible Officer becomes aware of the subject matter of such
         notice and shall be accompanied by a written statement by a
         Responsible Officer of the Customer setting forth the details and the
         effective date of the occurrence referred to therein.

1.064    PRESERVATION OF EXISTENCE, ETC.  The Customer shall, and shall cause
         each other Relevant Company to: (a) preserve and maintain in full
         force and effect its existence and good standing under the laws of its
         jurisdiction of organization, (b) preserve and maintain in full force
         and effect all rights, privileges, qualifications, permits, licenses
         and franchises necessary or desirable in the normal conduct of its
         business, (c) use its reasonable efforts, in the ordinary course and
         consistent with past practices, to preserve its business organization
         and preserve the goodwill and business of the customers, suppliers and
         others having business relations with it and (d) preserve or renew all
         of its registered trademarks, trade names and service marks, the non-
         preservation of which could reasonably be expected to have a Material
         Adverse Effect.

1.065    MAINTENANCE OF ASSETS.  The Customer shall maintain and preserve all
         of its property that is used or useful in connection with the Project
         in good working order and condition, ordinary wear and tear excepted.
         The Customer shall give AEF at least forty-five (45) days prior
         written notice of any change in location of the principal office of
         the Customer.

1.066    MAINTENANCE OF INSURANCE

         (a)      GENERAL COVERAGE.  The Customer shall, at its own expense,
                  procure and maintain in full force and effect at all times on
                  or after the date of completion of the construction of the
                  tracking, telemetry, control and monitoring facilities with
                  recognized insurance carriers approved by AEF, the following
                  insurance:

                  (i)      COMMERCIAL GENERAL LIABILITY INSURANCE:  Commercial
                           general liability insurance against claims for
                           bodily injury (including death) and property damage
                           in such amounts and on such terms and conditions as
                           are reasonably acceptable to AEF and as are
                           customarily carried by companies of established
                           repute engaged in the same or a similar business as
                           the Customer in the places where such business is
                           conducted.


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<PAGE>   83



                  (ii)     PROPERTY DAMAGE INSURANCE:  Property damage
                           insurance on an "all risk" basis (with customary
                           conditions and exclusions) including coverage
                           against damage or loss caused by earth movement and
                           flood and providing coverage for the Project other
                           than the Satellite (the "COVERED PROPERTY") in a
                           minimum aggregate amount equal to the "full
                           insurable value" of the Covered Property.  For
                           purposes of this clause (ii), "full insurable value"
                           shall mean the full replacement value of the Covered
                           Property, including any improvements and equipment
                           and supplies, without deduction for physical
                           depreciation or obsolescence; all such policies may
                           have deductibles of not greater than one million
                           Dollars ($1,000,000) (or its equivalent in another
                           currency or other currencies) except for earth
                           movement insurance which shall have the lowest
                           deductible as shall (in the opinion of AEF) be
                           available on commercially reasonable terms in the
                           insurance market place.  Such insurance shall
                           include an "agreed amount" clause.

         (b)      SATELLITE COVERAGE

                  (i)      LAUNCH AND INITIAL OPERATIONS INSURANCE.  Not later
                           than L minus (-) thirty (30) days, the Customer
                           shall procure, or cause to be procured, at its own
                           expense, binding commitments for the provision of
                           launch and initial operations insurance for a period
                           incepting no later than the time of Launch and
                           expiring no earlier than (A) if the Customer shall
                           have been determined to be a Category 1 Customer,
                           twelve (12) months, and (B) if the Customer shall
                           have been determined to be a Category 2 Customer or
                           a Category 3 Customer, twenty-four (24) months
                           thereafter for risks for which the LSA Party is not
                           entitled to a Reflight pursuant to the Launch
                           Services Agreement (including risks of Partial
                           Failure, Total Failure and Constructive Total
                           Failure), with internationally-recognized, reputable
                           space insurance and reinsurance carriers acceptable
                           to AEF, in a minimum amount equal to the Total
                           Senior Debt Outstanding plus interest on the Total
                           Senior Debt Outstanding (at a rate reasonably
                           determined by AEF) for a period of seven (7) months,
                           on terms and conditions and having such deductibles
                           as are acceptable to AEF.  Without limiting the
                           generality of the foregoing requirement that such
                           insurance have terms and conditions acceptable to
                           AEF, (x) there shall be no gap between the time that
                           such launch and initial operations insurance
                           attaches and the time that "all risk" property
                           damage insurance maintained pursuant to Section
                           6.06(b)(iv) lapses and (y) such launch and initial
                           operations insurance shall provide "wrap-around"
                           cover for risks related to the Launch not covered by
                           the Launch Services Agreement.  In the event that
                           the Customer has exercised a cash option with
                           respect to a Launch Services Agreement providing for
                           launch services by an Ariane 4 launch vehicle and
                           the proceeds therefrom are assigned to the Security
                           Agent, the Customer shall be entitled to apply the
                           right to the proceeds from such cash option in
                           substitution for such portion of the coverage
                           provided



                                      -78-
<PAGE>   84



                           under the insurance required pursuant to this
                           Section 6.06(b)(i) for such launch services as is
                           covered by such cash option.

                  (ii)     IN-ORBIT INSURANCE. On or prior to the date falling
                           six (6) months prior to the expiration of the launch
                           and initial operations insurance coverage, the
                           Customer shall procure at its own expense with
                           internationally-recognized, reputable space
                           insurance and reinsurance carriers acceptable to
                           AEF, in-orbit insurance for risks including Partial
                           Failure, Total Failure and Constructive Total
                           Failure, in a minimum amount equal to the Total
                           Senior Debt Outstanding plus interest on the Total
                           Senior Debt Outstanding (at a rate reasonably
                           determined by AEF) for a period of seven (7) months.
                           The Customer shall renew and maintain the in-orbit
                           insurance in full force and effect at all times
                           thereafter such that it always has a remaining term
                           of at least three (3) months. The terms and
                           conditions of the in-orbit insurance, including all
                           renewals thereof, shall be at least as beneficial to
                           the Insured Parties as the corresponding provisions
                           of the launch and initial operations insurance or
                           (in the case of renewals) the provisions of the
                           in-orbit insurance renewed thereby if such terms and
                           conditions are available on commercially reasonable
                           terms, with only such changes as AEF shall otherwise
                           agree.

                  (iii)    THIRD-PARTY LIABILITY COVERAGE. The Customer shall
                           cause, or if the Customer is not the LSA Party, the
                           Customer shall cause the LSA Party to cause, AE to
                           procure and maintain launch and in orbit third party
                           liability insurance for property loss or damage and
                           bodily injury caused by the Launch Vehicle or the
                           Satellite in accordance with the terms and
                           conditions of the Launch Services Agreement, and
                           shall cause AEF and the Lenders to be named as
                           additional insureds thereunder. The Customer shall
                           cause AE to extend to AEF and the Lenders the
                           benefits of its indemnification obligation under the
                           Launch Services Agreement for claims in excess of
                           such third party liability insurance coverage.
                           Without limiting (but without duplication of) the
                           foregoing provisions of this Section 6.06(b)(iii),
                           the Customer shall, upon the expiration of the third
                           party liability insurance procured by AE, procure
                           and maintain third party liability insurance
                           coverage for property loss or damage and bodily
                           injury caused by the Satellite after Launch in an
                           amount on an annual basis of not less than one
                           hundred million Dollars ($100,000,000) in the
                           aggregate and per occurrence, naming AEF and the
                           Lenders as additional insureds thereunder, if such
                           insurance is then being customarily maintained (as
                           determined by AEF) by prudent satellite owners.

                  (iv)     SATELLITE MANUFACTURER'S COVERAGE. The Customer
                           shall cause, or if the Customer is not the SPA
                           Party, the Customer shall cause the SPA Party to
                           cause, the Satellite Manufacturer to procure at its
                           own expense and maintain in full force and effect,
                           at all times prior to the time when risk of loss of
                           or damage to the Satellite is transferred to the
                           Customer, property damage insurance on an "all risk"
                           basis (with customary conditions and exclusions),
                           including coverage against damage or loss caused by
                           earth movement and flood, providing coverage for the


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                           Satellite.  The Customer shall cause the Satellite
                           Manufacturer, promptly upon obtaining the insurance
                           required pursuant to the immediately preceding
                           sentence, to deliver to AEF suitable evidence of
                           such insurance.

         (c)      COMMON TERMS.  The Security Agent shall be named as the sole
                  loss payee with respect to any insurance policies required to
                  be maintained pursuant to Sections 6.06(a)(ii) and (b)(i) and
                  (ii) to the extent that assets constituting Collateral are
                  covered thereby and each of the Insured Parties shall be
                  named as additional insureds in respect of the insurance
                  policies required to be maintained pursuant to Sections
                  6.06(a)(ii) and (b)(i) and (ii), as their interests may
                  appear.  All policies of insurance required to be maintained
                  pursuant to said Sections or otherwise procured by the
                  Customer covering loss of or damage to any of the Customer's
                  property shall provide that (i) there shall be no recourse
                  against AEF any Lender or the Collateral for payment of
                  premiums or other amounts with respect thereto, (ii) the
                  insurers are required to provide AEF with at least thirty
                  (30) days (or ten (10) days in the case of nonpayment of
                  premiums) prior written notice of reduction in coverage or
                  amount (other than a reduction in coverage or amount
                  resulting from a payment thereunder), cancellation or
                  non-renewal of any policy, and (iii) the proceeds of all
                  policies shall be payable to the Insured Parties, pursuant to
                  a first mortgagee endorsement, without contribution, as their
                  interests may appear.  In addition, the Customer shall ensure
                  that in all cases of policies of insurance in which the
                  insurer fronts for reinsurers and the ceding insurer is not
                  domiciled in Bermuda, Guernsey or a country listed in ANNEX
                  4, the Insured Parties shall have "cut-through" rights
                  providing direct recovery of claims to the reinsurers under
                  such policies of insurance.  If the Customer fails or may
                  fail to timely file any proof of loss, AEF or any Lender
                  shall have the right to submit such proof of loss in the
                  place of the Customer.  Each such policy shall (i) waive any
                  right of subrogation against the Insured Parties (and their
                  respective officers, employees, agents and insurers), (ii)
                  provide that the insurance be primary and not excess to or
                  contributory to any insurance or self-insurance maintained by
                  the Customer and (iii) waive any right of the insurers to any
                  set-off or counterclaim or any other deduction (other than
                  non-payment of premiums).  If available on commercially
                  reasonable terms (as determined by AEF), the Customer shall
                  obtain a clause in or endorsement to the launch and initial
                  operations policy(ies) and the in-orbit policies ensuring the
                  availability of the benefits of such policies to the Lenders
                  notwithstanding any statements, misstatements or other
                  actions or omissions by the Customer or by Persons acting or
                  purporting to act for or on behalf of the Customer.  If such
                  clause or endorsement is not so available, the Customer shall
                  obtain for the benefit of the Lenders such other protection,
                  if any, against such statements, misstatements or other
                  actions or omissions by the Customer or such Persons as is
                  then customarily provided to unaffiliated lenders in policies
                  of insurance, or otherwise in secured satellite financings.



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<PAGE>   86



         (d)      PREVIEW.  The Customer shall furnish to AEF from time to time
                  preliminary drafts of the launch and initial operations
                  insurance policy(ies) and each in- orbit insurance policy
                  required by this Section 6.06, together with the provisional
                  names of the companies issuing such policy(ies) and (if
                  requested by AEF) of the reinsurance carriers thereof, and
                  their respective shares of the insurance and (if requested by
                  AEF) reinsurance.  Such drafts and information shall be
                  furnished not later than the Conversion Request Date, in the
                  case of the launch and initial operations insurance
                  policy(ies) and, not less than six (6) months prior to the
                  date that such insurance policy is required to be in effect,
                  in the case of in-orbit insurance policies.  The Customer
                  shall furnish to AEF purportedly final copies of each such
                  insurance policy not later than L minus (-) ninety (90)
                  days, in the case of the launch and initial operations
                  insurance policy(ies), and not less than three (3) months
                  prior to the date it is required to be in effect, in the case
                  of in-orbit insurance policies, and notice of all changes
                  from such purported final copies promptly upon obtaining
                  knowledge thereof.

         (e)      BROKER AND ADVISOR UNDERTAKINGS

                  (i)      The Customer shall cause an internationally
                           recognized insurance broker, approved by AEF, to
                           deliver to AEF not later than the Conversion Request
                           Date an undertaking by such insurance broker in
                           favor of AEF and the Lenders, and satisfactory in
                           form and substance to AEF, to the effect that such
                           insurance broker (A) shall immediately notify each
                           of AEF and the Lenders prior to Launch if any
                           changes are made to the launch and initial
                           operations insurance policy(ies) from the copy(ies)
                           thereof furnished under Section 6.06(d) and (B)
                           shall on the day after Launch confirm in writing to
                           each of AEF and the Lenders that no changes were
                           made to such insurance policy(ies) from such copy
                           through and including the time of Launch.

                  (ii)     The Customer shall deliver to AEF on the Conversion
                           Request Date (in the case of the launch and initial
                           operations policy(ies)) or three (3) months before
                           the expiration of the launch and initial operations
                           insurance or any subsequent in-orbit insurance
                           operations (in the case of in-orbit insurance
                           policies) a certificate addressed to AEF and the
                           Lenders of such broker or (in the case of clause (D)
                           below) an internationally recognized insurance
                           adviser appointed by AEF (A) confirming that the
                           insurance policy(ies) in respect of such insurance
                           are in full force and effect and shall incept at the
                           time of Launch (in the case of the launch and
                           initial operations policy(ies)) or the moment the
                           launch and initial operations insurance policy or
                           the in-orbit insurance policy then in effect (in
                           the case of in-orbit insurance policies) is due to
                           expire, (B) confirming the names of the companies
                           issuing such policy(ies) and (if requested by AEF)
                           the reinsurance carriers thereof, and their
                           respective shares of the insurance and (if requested
                           by AEF) reinsurance, (C) confirming the amounts and
                           expiration dates of such policy(ies) and that the
                           premium for such


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<PAGE>   87



                           policy(ies) shall be payable by the Customer in full
                           no later than L minus (-) fifteen (15) days (in the
                           case of the launch and initial operations
                           policy(ies)) or no later than thirty (30) days
                           before attachment of risk (in the case of in-orbit
                           insurance policies) and (D) stating that in the
                           opinion of such broker or advisor, as the case may
                           be, after due investigation, such policy(ies) (x)
                           comply in all material respects with the
                           requirements of this Section 6.06 and (y) are
                           comparable in all material respects with insurance
                           carried by prudent and responsible owners and
                           operators of similar properties.

         (f)      CLAIMS UNDER LAUNCH AND INITIAL OPERATIONS POLICIES AND UNDER
                  IN-ORBIT POLICIES.  The Customer shall promptly and
                  simultaneously notify AEF and the Customer's insurance broker
                  in writing of any loss covered by any insurance referred to
                  in Section 6.06(b)(i) or (ii) and, upon obtaining knowledge
                  thereof, of any potential Event of Loss and shall file a
                  proof of loss with respect thereto with the insurers (with
                  copies thereof sent simultaneously to AEF) as early as
                  possible within the period allowed therefor in the related
                  insurance policy (and in any event not later than the last
                  date on which such proof of loss may be filed).

         (g)      FINAL POLICIES.  Promptly upon receipt thereof, the Customer
                  shall deliver to AEF a duplicate, certified by an
                  internationally recognized insurance broker approved by AEF,
                  of each policy of insurance required to be in effect
                  hereunder.

         (h)      CURE.  In the event the Customer fails to take out or
                  maintain, or fails to cause to be taken out or maintained,
                  the full insurance coverage required by this Section 6.06,
                  AEF or any Lender, as the case may be, upon thirty (30) days
                  prior notice (unless the aforementioned insurance would lapse
                  within such period, in which event notice shall be given as
                  soon as reasonably possible) to the Customer of any such
                  failure, may (but shall not be obligated to) take out the
                  required policies of insurance and pay the premiums on the
                  same.  All amounts so advanced therefor by AEF or a Lender,
                  as the case may be, shall be immediately reimbursed by the
                  Customer to AEF or such Lender, as the case may be, and the
                  Customer shall forthwith pay such amounts to AEF or such
                  Lender, as the case may be, together with interest thereon at
                  the Default Rate from the date so advanced.

         (i)      COMMUNICATIONS.  The Customer shall promptly furnish to AEF
                  (copies of which AEF may furnish to any Lender) copies of all
                  material communications between the Customer and any of its
                  insurers or insurance broker concerning the launch and
                  initial operations and the in-orbit insurance policies
                  required by this Section 6.06, including, without limitation,
                  all "letters of health" in respect of the Satellite.

1.067    PAYMENT OF OBLIGATIONS.  The Customer shall, and shall cause each
         other Relevant Company to, pay and discharge as the same shall become
         due and payable, all their


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<PAGE>   88



         respective obligations and liabilities including:  (a) all tax
         liabilities, assessments and governmental charges or levies upon it or
         its income or profits, or on any of its properties or assets, unless
         the same are being contested in good faith by appropriate proceedings
         and adequate reserves are being maintained by the Customer or such
         other Relevant Company, as the case may be, in accordance with
         Generally Accepted Accounting Principles in respect thereof, (b) all
         lawful claims which, if unpaid, might by law become a Lien upon its
         property unless the same are being contested in good faith by
         appropriate proceedings and adequate reserves are being maintained by
         the Customer or such other Relevant Company, as the case may be, in
         accordance with Generally Accepted Accounting Principles in respect
         thereof, and (c) all Indebtedness of the Customer or such other
         Relevant Company, as the case may be, as and when due and payable but
         subject to any subordination provisions contained in any instrument or
         agreement evidencing such Indebtedness.

1.068    COMPLIANCE WITH LAWS.  The Customer shall comply, and shall cause each
         of its Subsidiaries and Affiliates party to any Satellite Contracts or
         Loan Documents to comply, in all material respects with all
         Requirements of Law applicable to it of any Governmental Authority
         having jurisdiction over it or its business (including, without
         limitation, laws and regulations relating to employment retirement
         income security), except such as may be contested in good faith or as
         to which a bona fide dispute may exist.

1.069    INSPECTION OF PROPERTY AND BOOKS AND RECORDS.  The Customer shall
         maintain proper books of record and account, in which full, true and
         correct entries in conformity with Generally Accepted Accounting
         Principles consistently applied shall be made of all financial
         transactions and matters involving the assets and business of the
         Customer and any consolidated Subsidiaries.  The Customer shall,
         following the Conversion Request Date, permit representatives of AEF
         and its authorized agents to visit and inspect any of their respective
         properties, to examine their respective organizational, financial and
         operating records and make copies thereof or abstracts therefrom, to
         discuss their respective affairs, finances and accounts with their
         respective directors, officers and employees, and to inspect and
         observe (subject to, and in accordance with, the Satellite Purchase
         Agreement) the construction of the Project, at such reasonable times
         during normal business hours and as often as may be reasonably
         desired, upon reasonable advance notice to the Customer, PROVIDED that
         when an Event of Default exists AEF and its authorized agents may
         visit and inspect at the expense of the Customer such properties at
         any time during normal business hours and without advance notice.

6.10     ENVIRONMENTAL LAWS

         (a)      The Customer shall, and shall cause each other Relevant
                  Company (if any) to, upon and after the Conversion Commitment
                  Date, conduct its operations and keep and maintain its
                  property in compliance with all Environmental Laws, obtain
                  and maintain in full force and effect all Environmental
                  Permits for so long as is necessary for the operation of the
                  Project and comply with all terms and conditions of such
                  Environmental Permits.


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<PAGE>   89



         (b)      Upon written request of AEF upon and after the Conversion
                  Commitment Date, the Customer shall submit and cause each of
                  its Subsidiaries to submit, to AEF, at the Customer's sole
                  cost and expense at reasonable intervals, a report providing
                  an update of the status of any environmental, health or
                  safety compliance, hazard or liability issue identified in
                  any notice or prior report required pursuant to this Section
                  6.10 and any other environmental, health or safety compliance
                  obligation, remedial obligation or liability, that could,
                  individually or in the aggregate, result in liability in
                  excess of (i) if the Customer shall have been determined to
                  be a Category 1A Customer or a Category 1B Customer five
                  million Dollars ($5,000,000) (or its equivalent in another
                  currency or other currencies) or more or (ii) if the Customer
                  shall have been determined to be a Category 1C Customer, a
                  Category 2 Customer or a Category 3 Customer the amount of
                  damages claimed is two million five hundred thousand Dollars
                  ($2,500,000) (or its equivalent in another currency or other
                  currencies) or more.

6.11     USE OF PROCEEDS

         (a)      The Customer shall use the proceeds of the Tranche A Loans to
                  fund scheduled, pre-launch progress payments due and payable
                  under the Launch Services Agreement (other than the initial
                  down payment referred to in Section 4.01(c)) and Finance
                  Costs due hereunder as specified in the applicable Notice of
                  Drawdown.

         (b)      The Customer shall use the proceeds of the Tranche B Loan
                  solely to refund the Tranche A Outstandings (including
                  Tranche A Loans the proceeds of which have been applied to
                  the payment of Finance Costs) on the Conversion Date,
                  together with any ECA Guaranty Fees payable in respect of the
                  Tranche B Loan.

         (c)      None of the proceeds of any of the Loans shall be used to
                  purchase or carry, or to reduce or retire or refinance any
                  credit incurred to purchase or carry, any margin stock
                  (within the meaning of Regulations U and X of the Board of
                  Governors of the Federal Reserve System) or to extend credit
                  to others for the purpose of purchasing or carrying any
                  margin stock.

6.12     PROJECT MAINTENANCE.  The Customer shall maintain and preserve the
         Project and all of its other properties necessary or useful in the
         proper conduct of its business in relation to the Project in good
         working order and condition and shall maintain, preserve and operate
         the Project in accordance with generally accepted practices for
         similar projects.

6.13     TELECOMMUNICATIONS APPROVALS.  The Customer shall furnish to AEF, on
         the In-Orbit Commissioning Date, a certificate of a Responsible
         Officer of the Customer to the effect that all international, national
         and local (if any) Telecommunications Approvals that are necessary or,
         in the reasonable opinion of AEF, desirable for the maintenance and
         operation of the Satellite and the TTC&M Facilities and the Project


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<PAGE>   90



         in general have been obtained and are in full force and effect and
         unrestricted and unconditional, together with certified copies of all
         such approvals.

6.14     GOVERNMENT APPROVALS.  The Customer shall maintain in full force and
         effect all Telecommunications Approvals, and all amendments thereto,
         and shall maintain (or cause to be maintained) in full force and
         effect all other Government Approvals that are necessary under
         applicable laws and regulations in connection with (a) the due
         execution, delivery and performance by the Customer, or any Affiliate
         thereof of its obligations, and the exercise from time to time of its
         rights, under the Loan Documents, the Satellite Contracts and any
         other material Contract entered into from time to time relating to the
         Project then in effect, (b) the construction of the Satellite, the
         TTC&M Facilities and related equipment, (c) the Launch of the
         Satellite and (d) the operation and maintenance of the Satellite, the
         TTC&M Facilities and related equipment.  No such Government Approval
         shall be subject to any restriction, condition, limitation or other
         provision that could reasonably be expected to have a Material Adverse
         Effect.

6.15     RATE CONTRACTS.  If the Customer shall have been determined to be a
         Category 2 Customer or a Category 3 Customer, the Customer shall
         obtain and maintain in full force and effect from a date not later
         than the Conversion Date one or more Rate Contracts with one or more
         counterparties acceptable to AEF which effectively enable the Customer
         (in a manner reasonably satisfactory to AEF (with due consideration to
         cost, availability and duration of such Rate Contracts), taking into
         account the currency of denomination of all Qualified Lease
         Agreements) to protect itself against fluctuations in interest rates
         and foreign exchange rates relating to Loans hereunder and the Project
         Financing.

6.16     OPERATIONAL CONTROL AND RE-EXPORT.  The Customer shall, at the request
         of AEF or the Security Agent, promptly deliver to AEF or the Security
         Agent (whichever has made the request):

         (a)      all access codes and command codes to the Satellite, subject
                  to having obtained any requisite Government Approvals for
                  such delivery, necessary to facilitate access to, and the
                  command, control and operation of, the Satellite, and to
                  activate the transponders thereon;

         (b)      evidence in writing that the Satellite Manufacturer and, if
                  applicable, the Lessees have undertaken to

                  (i)      deliver immediately to AEF or the Security Agent (as
                           the case may be), upon notification by AEF or the
                           Security Agent that an Event of Default has occurred
                           and is continuing, all access codes and command
                           codes to the Satellite, subject to having obtained
                           any requisite Government Approvals for such
                           delivery, necessary to facilitate access to, and the
                           command, control and operation of, the Satellite,
                           and to activate the transponders thereon;



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<PAGE>   91



             (ii) take all steps necessary, upon notification by AEF or the
                  Security Agent that an Event of Default has occurred and is
                  continuing, to obtain the Government Approvals required to
                  effect any transfer of operational control over the Satellite
                  and related technical data (including any license approving
                  the export or re-export of the Satellite to any Person as
                  designated by AEF or the Security Agent); and

            (iii) deliver to AEF and the Security Agent written evidence of the
                  issuance of the Government Approvals once such Government
                  Approvals have been obtained.

         The Customer hereby agrees, and shall cause the Satellite Manufacturer
         (and, if applicable, the Lessees and other lessees of transponders on
         the Satellite) to agree, not to change any access codes or command
         codes to the Satellite, at any time that a Default or Event of Default
         exists without promptly furnishing to AEF and the Security Agent the
         new access codes and command codes, once such access codes or command
         codes have been delivered to AEF or the Security Agent pursuant to
         this Section 6.16.

6.17     PERFORMANCE OF LOAN DOCUMENTS.  The Customer shall perform and observe
         all of its covenants and agreements contained in the Loan Documents to
         which it is a party, shall maintain each of the Loan Documents in full
         force and effect and shall take all reasonable action to prevent the
         termination of any such Loan Document in accordance with the terms
         thereof (other than by reason of the stated expiration thereof or
         default by any other party thereto) or otherwise and to enforce each
         covenant or obligation of such Loan Document in accordance with its
         terms (unless the failure to enforce any such covenant or obligation,
         in the reasonable opinion of AEF, could not reasonably be expected to
         have a Material Adverse Effect) and shall take all such action to that
         end as from time to time may be reasonably requested by AEF.

6.18     PERFORMANCE OF SATELLITE CONTRACTS.  The Customer shall, or if the
         Customer is not the SPA Party, the LSA Party or the TTC&M Party, the
         Customer shall cause the SPA Party, the LSA Party and the TTC&M Party
         to:  (a) cause the Project to be duly constructed and completed in
         accordance with the Satellite Contracts to which it is a party, (b) on
         and after the Conversion Commitment Date, perform and observe all of
         its covenants and agreements contained in the Satellite Contracts to
         which it is a party, (c) maintain each of the Satellite Contracts to
         which it is a party in full force and effect and take all reasonable
         action to prevent the termination of any such Satellite Contract in
         accordance with the terms thereof (other than by reason of the stated
         expiration thereof or default by any other party thereto) or otherwise
         and (d) to enforce each covenant or obligation of such Satellite
         Contract to which it is a party in accordance with its terms (unless
         the failure to enforce any such covenant or obligation, in the
         reasonable opinion of AEF, could not reasonably be expected to have a
         Material Adverse Effect) and shall take all such action to that end as
         from time to time on and after the Conversion Commitment Date may be
         reasonably requested by AEF.



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6.19     PERFORMANCE OF QUALIFIED LEASE AGREEMENTS.  The Customer shall (a) on
         and after the Conversion Commitment Date, perform and observe all of
         its covenants and agreements contained in the Qualified Lease
         Agreements to which it is party; and (b) enforce each covenant or
         obligation of such Qualified Lease Agreement to which it is a party in
         accordance with its terms (unless the failure to enforce any such
         covenant or obligation, in the reasonable opinion of AEF, could not
         reasonably be expected to have a Material Adverse Effect) and shall
         take all such action to that end as from time to time on and after the
         Conversion Commitment Date may be reasonably requested by AEF.

6.20     ORBITAL POSITION.  The Satellite shall be maintained in the orbital
         position assigned to it by the Telecommunications Authority pursuant
         to the relevant Telecommunications Approval at one hundred and ten
         degrees West Longitude (110(degree) W.L.).

6.21     EXPORT LICENSE.  The Customer shall cause, or if the Customer is not
         the SPA Party the Customer shall cause the SPA Party to cause, the
         Satellite Manufacturer to maintain in full force and effect all Export
         Licenses, if required by applicable law, in accordance with the terms
         of the Satellite Purchase Agreement.

6.22     IN-ORBIT COMMISSIONING.  The Customer shall deliver to AEF the
         certificate referred to in the definition of "In-Orbit Commissioning
         Date" promptly upon completion of the initial in-orbit tests on the
         Satellite in accordance with the Satellite Contract and entry of the
         Satellite into commercial service.

6.23     SATELLITE OPERATIONAL REPORTS.  The Customer shall provide or shall
         cause the provider of tracking, telemetry, control and monitoring of
         the Satellite to provide to AEF no less than annually, commencing
         twelve (12) months after the date of Launch, and, in addition, at any
         time upon the reasonable request of AEF, a certificate of a
         Responsible Officer with regard to the operational status of the
         Satellite, including such information as the projected solar array
         life based on the total Satellite power requirements, projected
         battery life based on total Satellite power requirements, projected
         Satellite life, information concerning whether any transponder spares
         or preemptible transponders on the Satellite have been employed and
         such other information pertinent to the operation of the Satellite and
         the transponders thereon as AEF may reasonably request.

6.24     TRANSPONDER LEASE AGREEMENTS.  Except to the extent that the Customer
         is required hereunder to enter into  Qualified Lease Agreements, the
         Customer may enter into any other agreement for the lease of, or
         provision of communications services on, transponders or capacity on
         the Satellite, PROVIDED that each such agreement (a) does not contain
         provisions in the nature of indemnities or other provisions for the
         payment by the Customer of termination fees, costs or damages (except
         for customary credits or refunds for failure to provide services
         according to minimum performance specifications not in excess of lease
         or use payments received under such contracts), (b) except for those
         agreements excluded from the definition of "Transponder Lease
         Agreements", includes an express acknowledgment by the lessee that any
         rights of quiet enjoyment and any other rights of the lessee shall be
         in all respects subject and


                                      -87-

<PAGE>   93



         subordinate to the rights of the Security Agent in the Collateral on
         terms and conditions satisfactory to the Security Agent and (c)
         requires performance by the Customer that could not reasonably be
         expected to have a Material Adverse Effect, and PROVIDED FURTHER that
         the Customer shall not amend, supplement or modify any such agreement
         if the result would be to contravene the provisions of clause (a), (b)
         or (c) above.

6.25     FURTHER ASSURANCES

         (a)      The Customer shall ensure that all written information,
                  exhibits and reports furnished to AEF do not and will not
                  contain any untrue statement by the Customer or any Affiliate
                  thereof of a material fact and do not and will not omit, on
                  the part of the Customer or any such Affiliate, to state any
                  material fact or any fact necessary to make the statements
                  contained therein not misleading in light of the
                  circumstances in which made, and will promptly disclose to
                  AEF and correct any defect or error that may be discovered
                  therein or in any of the Loan Documents or any of the
                  Satellite Contracts or in the execution, acknowledgment or
                  recordation thereof.

         (b)      The Customer shall as of and at all times after the
                  Conversion Date take or cause to be taken all action required
                  or desirable to maintain and preserve the Liens of the
                  Collateral Documents and the perfection and priority thereof
                  required by the terms of this Agreement.

         (c)      Promptly upon written request by AEF, the Customer shall (and
                  shall cause each of its Subsidiaries to and use its
                  reasonable efforts to cause the LSA Party, the SPA Party, the
                  TTC&M Party or any Affiliate of any thereof to) do, execute,
                  acknowledge, deliver, record, re-record, file, re-file,
                  register and re-register, any and all such further acts,
                  deeds, conveyances, security agreements, mortgages,
                  assignments, estoppel certificates, legal opinions, consents,
                  financing statements and continuations thereof, termination
                  statements, notices of assignment, transfers, certificates,
                  assurances and other instruments as AEF may reasonably
                  require from time to time in order (i) to carry out more
                  effectively the purposes of this Agreement or any other Loan
                  Document, (ii) to subject to the Liens created by any of the
                  Collateral Documents any of the properties, rights or
                  interests covered by any of the Collateral Documents, (iii)
                  to perfect and maintain the validity, effectiveness and
                  priority of any of the Collateral Documents and the Liens
                  intended to be created thereby and (iv) to better assure,
                  convey, grant, assign, transfer, preserve, protect and
                  confirm to AEF the rights granted or now or hereafter
                  intended to be granted to AEF under any Loan Document or
                  under any other instrument executed in connection therewith.

6.26     PRIORITIES

         (a)      The Customer hereby agrees that (i) all Indebtedness owing by
                  it to any of its Affiliates shall be Subordinated
                  Indebtedness, (ii) all amounts in respect of


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                  Indebtedness owing by it to any of its Affiliates shall be
                  paid only out of Unrestricted Excess Cash Flow not
                  theretofore used for any other purpose permitted by any of
                  this Section 6.26 or Section 7.07, 7.14, 7.15, 11.05 or 13.04
                  and (iii) if a Default or Event of Default has occurred and
                  is continuing, any amounts whatsoever due and owing by the
                  Customer to any Affiliate shall be paid only out of
                  Unrestricted Excess Cash Flow not theretofore used for any
                  other purpose permitted by any of this Section 6.26 or
                  Section 7.07, 7.14, 7.15, 11.05 or 13.04.

         (b)      If the Customer has been determined to be a Category 1C
                  Customer, a Category 2 Customer or a Category 3 Customer, it
                  shall not, and shall not permit any of its Subsidiaries to,
                  make any Restricted Payment at any time if a Default or Event
                  of Default then exists or would immediately result therefrom.


                         SECTION 7.  NEGATIVE COVENANTS

The Customer hereby covenants and agrees as follows, from and after the date
hereof and so long as AEF shall have any Commitment hereunder or any Loan or
other amount payable hereunder shall remain unpaid, unless AEF waives
compliance in writing:

1.071    LIMITATION ON LIENS.  The Customer shall not, from and after the date
         of execution of any Collateral Document, directly or indirectly, make,
         create, incur, assume or suffer to exist any Lien upon or with respect
         to any part of the Collateral, whether now owned or hereafter
         acquired, or offer or agree to do so, other than the following
         ("PERMITTED LIENS"):

         (a)      any Lien in favor of AEF or the Security Agent created under
                  any Collateral Document, PROVIDED that, to the extent that
                  the Security Agent is acting on behalf of the Project Agent
                  or the Project Lenders, on and after the Conversion Date,
                  such Liens equally and ratably secure the obligations
                  described under the Collateral Documents on a pari passu
                  basis in accordance with the terms of the Intercreditor
                  Agreement;

         (b)      Liens for taxes, fees, assessments or other governmental
                  charges that are not delinquent or remain payable without
                  penalty, or to the extent that non- payment thereof is
                  permitted by Section 6.07, PROVIDED that no Notice of Lien
                  has been filed or recorded;

         (c)      carriers', warehousemen's, mechanics', landlords',
                  materialmen's, repairmen's or other similar Liens arising in
                  the ordinary course of business that are not delinquent or
                  remain payable without penalty;

         (d)      Liens on the property of the Customer incurred, or pledges or
                  deposits required, in connection with workmen's compensation,
                  unemployment insurance and other social security legislation;



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         (e)      Liens on the property of the Customer securing (i) the
                  performance of bids, trade contracts (other than for borrowed
                  money), leases or statutory obligations, (ii) obligations on
                  surety and appeal bonds and (iii) other obligations of a like
                  nature, provided all such Liens and obligations referred to
                  in the foregoing clauses (i), (ii) and (iii) are incurred in
                  the ordinary course of business and, in the aggregate, could
                  not reasonably be expected to cause a Material Adverse
                  Effect; and

         (f)      easements, rights-of-way, restrictions and other similar
                  encumbrances incurred in the ordinary course of business
                  that, in the aggregate, are not substantial in amount, and
                  that do not in any case materially detract from the value of
                  the property subject thereto or interfere with the ordinary
                  conduct of the businesses of the Customer.

1.072    DISPOSITION OF COLLATERAL.  The Customer shall not, from and after the
         date that any Collateral Document is executed, directly or indirectly,
         sell, assign, lease, convey, transfer or otherwise dispose of (whether
         in one or a series of transactions) any Collateral or enter into any
         agreement to do any of the foregoing except that (i) the Customer may
         sell, transfer or otherwise dispose of Collateral having an aggregate
         fair market value not exceeding one million Dollars ($1,000,000) in
         any of its fiscal years and (ii) so long as the Customer has paid or
         prepaid in full the principal of and interest on the Loans and all
         other amounts owing by it under the Loan Documents, or has paid or
         prepaid in part such principal and interest with respect to that
         portion of the Satellite that has suffered a Partial Failure it may
         transfer that portion of the Collateral for which such payment or
         prepayment has been made to insurers pursuant to their salvage rights
         and may authorize AE to negotiate such transfer pursuant to the Launch
         Services Agreement.

1.073    DISPOSITION OF ASSETS OTHER THAN COLLATERAL.  If the Customer shall
         have been determined to be a Category 1C Customer, a Category 2
         Customer or a Category 3 Customer, the Customer shall not, and shall
         not permit any other member of the Customer Group to, from and after
         the Conversion Commitment Date, directly or indirectly, sell, assign,
         lease (as lessor), convey, transfer or otherwise dispose of (whether
         in one or a series of transactions) its assets, business or property
         (other than Collateral) (including (x) accounts and notes receivable
         (with or without recourse) and (y) equipment sale and leaseback
         transactions but excluding (i) any sale, assignment, transfer,
         exchanges or other disposition of any inventory sold or disposed of in
         the ordinary course of business and on ordinary business terms, (ii)
         the trade-in or other disposition of machinery or equipment in
         connection with the acquisition of other similar machinery or
         equipment and (iii) the sale or other disposition of obsolete,
         worn-out or other non-productive properties having a value not
         exceeding one million five hundred thousand Dollars ($1,500,000) in
         the aggregate in any fiscal year of the Customer) or enter into any
         agreement to do any of the foregoing except with respect to sales,
         transfers or other dispositions of assets in the ordinary course of
         business or pursuant to bona fide sale and leaseback (and
         substantially similar) financings ("PERMITTED DISPOSITIONS") that (A)
         do not exceed in the aggregate two percent (2%) of the total assets of
         the Customer Group in any fiscal year, (B) together with all such


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         prior Permitted Dispositions, do not exceed in the aggregate five
         percent (5%) of the total assets of the Customer Group at the time of
         such action or (C) with respect to any Permitted Dispositions other
         than sale and leaseback transactions, do not have a fair market value
         in excess of one million Dollars ($1,000,000) per item; PROVIDED that,
         in each case, immediately after giving effect to any such Permitted
         Disposition, no Default or Event of Default would exist.

1.074    TRANSACTIONS WITH AFFILIATES.  The Customer shall not transfer, sell,
         assign or otherwise dispose of, directly or indirectly, any assets to
         any Affiliate of the Customer or of any Subsidiary or enter into any
         loan, guarantee or other transaction, directly or indirectly, with any
         Affiliate of the Customer or of any Subsidiary except as contemplated
         by this Agreement or in the ordinary course of business and pursuant
         to the reasonable requirements of the business of the Customer and
         upon fair and reasonable terms no less favorable to the Customer than
         would obtain in a comparable arm's-length transaction with a Person
         not an Affiliate of the Customer.

1.075    NOTICE OF INDEBTEDNESS.  If the Customer shall have been determined to
         be a Category 1C Customer, a Category 2 Customer or a Category 3
         Customer, the Customer shall not, on or after the Conversion
         Commitment Date, create, incur, assume, purchase, repurchase,
         guaranty, suffer to exist, or otherwise become or remain directly or
         indirectly liable with respect to, any Indebtedness if, as a result
         thereof the aggregate principal amount of its Indebtedness increases
         by ten million Dollars ($10,000,000) or more, unless the Customer
         shall have provided to AEF (a) a certificate of a Responsible Officer
         of the Customer stating that no Default or Event of Default shall
         occur immediately as a result of the incurrence of such Indebtedness
         and (b) if requested by AEF, a certificate of such Responsible Officer
         with calculations in reasonable detail, and such other evidence as AEF
         may request, demonstrating that no Default or Event of Default shall
         occur immediately as a result of the incurrence of such Indebtedness.

1.076    LEASE OBLIGATIONS.  If the Customer shall have been determined to be a
         Category 2 Customer or a Category 3 Customer, the Customer shall not
         create or suffer to exist any obligations for the payment of rent for
         any property under lease or agreement to lease under which the
         Customer is the lessee, except for:

         (a)      leases in existence on the Closing Date and any renewal,
                  extension or refinancing thereof;

         (b)      any leases entered into in the ordinary course of business of
                  the Customer in furtherance of the Project; and

         (c)      in the case that the Customer shall have been determined to
                  be a Category 2 Customer, leases to finance the acquisition
                  of fixed assets, PROVIDED that the aggregate annual rental
                  payments for all such leases shall not exceed four million
                  Dollars ($4,000,000) (or its equivalent in another currency
                  or other currencies).



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1.077    CAPITAL EXPENDITURES.  If the Customer shall have been determined to
         be a Category 1C Customer, Category 2 Customer or a Category 3
         Customer, the Customer shall not purchase any assets other than the
         purchase of (a) fixed assets and capital equipment that are expressly
         contemplated by and budgeted for under the Business Plan of the
         Customer then in effect in the case of a Category 2 Customer or a
         Category 3 Customer or the Capex Budget, if any, then in effect in the
         case of a Category 1C Customer, (b) Permitted Investments and (c)
         assets other than those permitted under clauses (a) and (b) of this
         Section 7.07 in an aggregate amount not to exceed (i) fifteen million
         Dollars ($15,000,000) per annum (or its equivalent in another currency
         or other currencies) in the case that the Customer shall have been
         determined to be a Category 1C Customer or ten million Dollars
         ($10,000,000) per annum (or its equivalent in another currency or
         other currencies) in the case that the Customer shall have been
         determined to be a Category 2 Customer or seven million five hundred
         thousand Dollars ($7,500,000) per annum (or its equivalent in another
         currency or other currencies) in the case that the Customer shall have
         been determined to be a Category 3 Customer PLUS (ii) Unrestricted
         Excess Cash Flow not theretofore used for any other purpose permitted
         by any of this Section 7.07 or Section 6.26, 7.14, 7.15, 11.05 or
         13.04.

1.078    CHANGE IN STRUCTURE; CONSOLIDATIONS AND MERGERS.  The Customer shall
         not, (a) make any changes in its capital structure (including, without
         limitation, in the terms of its outstanding stock or other equity
         interests), and shall not permit any change in the composition of its
         ownership, and shall not amend its certificate of incorporation,
         memorandum and articles of association or other organizational
         documents if, as a result, there could reasonably be expected to occur
         a Material Adverse Effect or (b) directly or indirectly, merge or
         consolidate with any other Person, or enter into any agreement to so
         merge or consolidate, except, if the Customer has been determined to
         be a Category 1 Customer, with respect to the following, so long as if
         immediately after giving effect thereto no Default or Event of Default
         would exist:

         (i)      any Subsidiary of the Customer may merge, consolidate or
                  combine with or into, or transfer assets to the Customer,
                  PROVIDED that the Customer shall be the continuing or
                  surviving organization;

         (ii)     the Customer may merge, consolidate or combine with another
                  entity if the Customer is the organization surviving the
                  merger; and

         (iii)    the Customer may merge, consolidate or combine with or into,
                  or transfer all or substantially all of its assets to,
                  another entity that, in the determination of AEF, has an
                  equivalent or better credit standing than the Customer,
                  PROVIDED that such other entity fully assumes all obligations
                  of the Customer hereunder and under the other Loan Documents
                  and the Satellite Contracts to which the Customer is a party
                  and agrees to fully comply with all covenants and obligations
                  of the customer hereunder and thereunder, to the satisfaction
                  of AEF.

1.079    ACCOUNTING CHANGES.  The Customer shall not make any significant
         change in accounting treatment and reporting practices, except as
         permitted by Generally


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<PAGE>   98



         Accepted Accounting Principles, PROVIDED that the Customer shall
         notify AEF of any such change in accounting treatment or reporting
         practices pursuant to the terms of Section 6.03, and upon receipt of
         such notice AEF may, in its discretion, but shall not be obligated to,
         require the Customer to deliver the financial statements required to
         be delivered pursuant to Section 6.01 calculated in accordance with
         Generally Accepted Accounting Principles in effect before such change.
         The Customer shall, at the time that it is required to deliver to AEF
         any information relevant to the calculation of any amount hereunder to
         be determined in accordance with Specified GAAP, notify AEF of any
         change in Generally Accepted Accounting Principles after the date
         hereof that is relevant to such calculation, and upon receipt of such
         notice AEF may, in its discretion, but shall not be obligated to,
         require the recalculation of the covenants contained herein and the
         tests to be applied pursuant to the Annexes hereto.

7.10     BUSINESS.  The Customer shall not engage in any activities contrary to
         applicable laws or regulations and, if the Customer shall have been
         determined to be a Category 2 Customer or a Category 3 Customer, or
         any other Customer that has formed a special purpose vehicle pursuant
         to Section 9.04, the Customer shall not engage in any business other
         than a business described in its Business Plan.

7.11     MILITARY ACTIVITIES.  The Customer shall ensure that the use and
         operation of the Satellite are not substantially for or on behalf of
         any governmental, inter-governmental or non-governmental defense or
         military agency or substantially for non-commercial communications in
         support of the operations or activities of the military, national
         security or armed forces of any country or any inter-governmental or
         non-governmental entity.

7.12     LOAN DOCUMENTS

         The Customer shall not (i) cancel or terminate any of the Loan
         Documents to which it is a party or consent to or accept any
         cancellation or termination thereof (for convenience, default or
         otherwise), (ii) sell, assign or otherwise transfer or dispose of (by
         operation of law or otherwise) any part of its interest in any of the
         Loan Documents or consent (or agree to consent) to any Person party to
         the Loan Documents selling, assigning or otherwise transferring or
         disposing of any part of its interest in any of the Loan Documents,
         (iii) petition, request or take any other legal or administrative
         action that seeks or may reasonably be expected to rescind, terminate
         or suspend any of the Loan Documents or amend or modify any of the
         Loan Documents or (iv) amend, supplement or modify any of the Loan
         Documents.

7.13     SATELLITE CONTRACTS; QUALIFIED LEASE AGREEMENTS

         (a)      The Customer shall not, on or after the Conversion Commitment
                  Date, (i) cancel or terminate any of the Satellite Contracts
                  to which it is a party or consent to or accept any
                  cancellation or termination thereof (for convenience, default
                  or otherwise), (ii) sell, assign or otherwise transfer or
                  dispose of (by operation of law or otherwise) any part of its
                  interest in any of the Satellite


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<PAGE>   99



                  Contracts or consent (or agree to consent) to any Person
                  party to the Satellite Contracts to sell, assign or otherwise
                  transfer or dispose of any part of its interest in any of the
                  Satellite Contracts, (iii) waive any default under or breach
                  of any of the Satellite Contracts or waive, fail to enforce,
                  forgive or release any right, interest or entitlement,
                  howsoever arising, under or in respect of any of the
                  Satellite Contracts or exercise any election thereunder, (iv)
                  petition, request or take any other legal or administrative
                  action that seeks to or may reasonably be expected to
                  rescind, terminate or suspend any of the Satellite Contracts
                  or amend or modify any of the Satellite Contracts, (v) amend,
                  supplement or modify the Satellite Purchase Agreement if the
                  result would be to affect adversely the guarantees or
                  warranties thereunder or otherwise to cause a Material
                  Adverse Effect or enter into any change order if the cost of
                  such change order exceeds five percent (5%) of the purchase
                  price of the Satellite, PROVIDED that such change order shall
                  not adversely affect the in-orbit performance of the
                  Satellite or performance warranties under the Satellite
                  Purchase Agreement and such change order could not reasonably
                  be expected to cause a Material Adverse Effect, or (vi)
                  amend, supplement or modify the Launch Services Agreement or
                  the TTC&M Contract if the result would be to adversely affect
                  the guarantees or warranties thereunder or otherwise to cause
                  a Material Adverse Effect.

         (b)      The Customer shall not, on or after the Conversion Commitment
                  Date, (i) cancel or terminate, or exercise any preemption
                  under, any of the Qualified Lease Agreements to which it is a
                  party or consent to or accept any cancellation or termination
                  thereof (for convenience, default or otherwise), (ii) sell,
                  assign or otherwise transfer or dispose of (by operation of
                  law or otherwise) any part of its interest in any of the
                  Qualified Lease Agreements or consent (or agree to consent)
                  to any Persons party to the Qualified Lease Agreements to
                  sell, assign or otherwise transfer or dispose of any part of
                  its interest in any of the Qualified Lease Agreements, (iii)
                  waive any default under or breach of any of the Qualified
                  Lease Agreements or waive, fail to enforce, forgive or
                  release any right, interest or entitlement, howsoever
                  arising, under or in respect of any of the Qualified Lease
                  Agreements or exercise any election thereunder, (iv)
                  petition, request or take any other legal or administrative
                  action that seeks to or may reasonably be expected to
                  rescind, terminate or suspend any of the Qualified Lease
                  Agreements or amend or modify any of the Qualified Lease
                  Agreements, or (v) amend, supplement or modify the Qualified
                  Lease Agreements if the result would be to cause a Material
                  Adverse Effect; provided that the Customer may take any
                  action described in this Section 7.13(b) with respect to any
                  Qualified Lease Agreement on any date if, after excluding
                  such Qualified Lease Agreement from the relevant
                  calculations, the Customer would satisfy the conditions and
                  covenants set forth in Sections 11.04 and 11.06 (if the
                  Customer shall have been determined to be a Category 1C
                  Customer) or Sections 12.01(b)(xii), 12.02 and 12.04(b) (if
                  the Customer shall have been determined to be a Category 2
                  Customer) on such date on a pro forma basis (and, after
                  taking any


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<PAGE>   100



                  such action, such Qualified Lease Agreement shall cease to be
                  a Qualified Lease Agreement for all purposes hereof).

7.14     LOANS, DEPOSITS AND INVESTMENTS.  If the Customer shall have been
         determined to be a Category 1C Customer, a Category 2 Customer or a
         Category 3 Customer, the Customer shall not, directly or indirectly,
         purchase or acquire, or make any commitment for, any capital stock,
         equity interest, obligations or other securities of or any interest
         in, or make any advance, loan, extension of credit or capital
         contribution to or any other investment in, any Person ("INVESTMENTS")
         except for the following ("PERMITTED INVESTMENTS"):  (a) investments
         in Cash Equivalents; (b) extensions of credit for a period not
         exceeding ninety (90) days in the nature of accounts receivable or
         notes receivable arising from the sale or lease of goods or services
         in the ordinary course of business, (c) if no Default or Event of
         Default exists or would result therefrom, (i) loans or extensions of
         credit to Affiliates of the Customer, which shall not exceed two
         million five hundred thousand Dollars ($2,500,000) (or its equivalent
         in another currency or other currencies) in an aggregate principal
         amount at any one time outstanding, (ii) loans or extensions of credit
         to key management employees of the Customer; which shall not exceed
         one million two hundred and fifty thousand Dollars ($1,250,000) (or
         its equivalent in another currency or other currencies) in an
         aggregate principal amount at any one time outstanding and (iii) if
         the Customer shall have been determined to be a Category 1C Customer,
         Investments made out of Unrestricted Excess Cash Flow not theretofore
         used for any other purpose permitted by any of this Section 7.14 or
         Section 6.26, 7.07, 7.15 or 11.05.

7.15     SUBORDINATED INDEBTEDNESS.  Neither the Customer nor any of its
         Subsidiaries shall purchase, redeem, retire or otherwise acquire for
         value, or set apart any money for a sinking, defeasance or other
         analogous fund for, the purchase, redemption, retirement or other
         acquisition of, or make any voluntary payment or prepayment of the
         principal of or interest on, or any other amount owing in respect of,
         any Subordinated Indebtedness, except for (a) regularly scheduled
         payments of principal and interest in respect thereof required
         pursuant to the instruments evidencing such Subordinated Indebtedness,
         (b) if the Customer shall have been determined to be a Category 1
         Customer, voluntary payments and prepayments of principal of, or
         interest on, such Subordinated Indebtedness, PROVIDED that if the
         Customer shall have been determined to be a Category 1C Customer, any
         such voluntary payment or prepayment shall be paid only out of
         Unrestricted Excess Cash Flow not theretofore used for any other
         purpose permitted by any of this Section 7.15 or Section 6.26, 7.07,
         7.14, 11.05 or 13.04.  The Customer shall not amend, supplement or
         modify any instrument or agreement evidencing or governing any
         Subordinated Indebtedness.


                         SECTION 8.  EVENTS OF DEFAULT

1.081    EVENTS OF DEFAULT.  Any of the following events shall constitute an
         "EVENT OF DEFAULT":


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         (a)      NON-PAYMENT.  (i)  The Customer fails to pay any principal of
                  or interest on any Loan within three (3) Business Days of the
                  date when due, (ii) the Customer fails to pay any fees or any
                  other amount payable by it to AEF hereunder, other than
                  pursuant to Section 2.05(b), or pursuant to any other Loan
                  Document within five (5) Business Days of the date when due
                  or (iii) the Customer fails to pay any amount payable by it
                  to AEF pursuant to Section 2.05(b) hereunder on the date when
                  due; or

         (b)      REPRESENTATION OR WARRANTY.  Any representation or warranty
                  by the Customer in this Agreement shall prove to have been
                  incorrect in any material respect on or as of the date made
                  or deemed made, PROVIDED that, except in the case of the
                  representations or warranties contained in Sections 5.04,
                  5.06, 5.15 and 5.16 of this Agreement, if susceptible of cure
                  within such period and the Customer is diligently proceeding
                  with such cure, the fact, circumstance or condition giving
                  rise to such incorrect representation or warranty is not
                  cured within thirty (30) days after the Customer has
                  knowledge that such representation or warranty was incorrect;
                  or

         (c)      COVENANTS.  (i)  The Customer fails to perform any covenant
                  contained in this Agreement required to be performed by it,
                  PROVIDED that, except for the covenants contained in ANNEXES
                  1, 2 AND 3, as applicable, and any of Sections 6.03(a),
                  6.04(a), 7.01 (if and to the extent resulting from any
                  voluntary action or inaction by the Customer), 7.02, 7.06,
                  7.07, 7.08, 7.11, 7.12, 7.13 and 7.15, such failure shall
                  continue unremedied for a period of thirty (30) or more days
                  after the Customer has knowledge of such failure and such
                  covenant is capable of being cured within such period and the
                  Customer is diligently proceeding with such cure; or

         (d)      CROSS-ACCELERATION.  If the Customer shall have been
                  determined to be a Category 1A Customer, the maturity of any
                  Indebtedness under any of the Project Financing Agreements,
                  or any other Indebtedness or Contingent Obligation having an
                  aggregate principal amount of more than thirty million
                  Dollars ($30,000,000) (or its equivalent in another currency
                  or other currencies) of a Relevant Company shall have been
                  accelerated, in whole or in part, or shall have been required
                  to be prepaid prior to the stated maturity thereof (other
                  than pursuant to a regularly scheduled prepayment or a
                  redemption or a mandatory prepayment provision that is not
                  comparable in effect to an acceleration resulting from an
                  event of default), in accordance with the provisions of any
                  agreement evidencing, providing for the creation of or
                  concerning the same, PROVIDED, subject to the further proviso
                  set forth herein, that this Section 8.01(d) shall not apply
                  to Indebtedness of any Relevant Company to AEF under any
                  other customer loan agreement if the Customer, pursuant to
                  the terms and conditions of such Indebtedness, shall have
                  been determined to be in any other Customer Category than
                  that applicable to the Customer pursuant to the terms of this
                  Agreement, and PROVIDED FURTHER that if the Customer shall
                  have been determined to be a Category 1A Customer and (x)
                  certifies to AEF, attaching certified copies of all relevant
                  documentation,


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                  that it is not subject to cross-acceleration provisions in
                  any Comparable Financing Transaction to which it is party,
                  this Section 8.01(d) shall not apply to any Relevant Company
                  or (y) certifies to AEF, attaching certified copies of
                  relevant provisions, that pursuant to any Comparable
                  Financing Transaction to which it is party the Customer is
                  subject to cross-acceleration provisions not substantially
                  similar to this Section 8.01(d), such other
                  cross-acceleration provisions shall be deemed to be set forth
                  in this Agreement in the place of this Section 8.01(d); or

         (e)      CROSS-DEFAULT.

                  (i)      If the Customer shall have been determined to be in
                           any Customer Category other than a Category 1A
                           Customer and (A) any Relevant Company fails to make
                           any payment in respect of the Project Financing
                           Agreements, or any of its other Indebtedness or
                           Contingent Obligations having an aggregate principal
                           amount of more than:

                           (1)      fifteen million Dollars ($15,000,000) (or
                                    its equivalent in another currency or other
                                    currencies) if the Customer shall have been
                                    determined to be a Category 1B Customer; or

                           (2)      five million Dollars ($5,000,000) (or its
                                    equivalent in another currency or other
                                    currencies) if the Customer shall have been
                                    determined to be a Category 1C Customer,
                                    Category 2 Customer or a Category 3
                                    Customer;

                           when such principal amount is due (whether by
                           scheduled maturity, required prepayment,
                           acceleration, demand or otherwise) and, if the
                           Customer shall have been determined to be a Category
                           1B Customer or a Category 1C Customer, such failure
                           continues after the giving of any notice and/or the
                           lapse of any applicable grace or notice period, if
                           any, specified in the agreement relating thereto or
                           (B) any Relevant Company fails to perform or observe
                           any other condition or covenant or any other event
                           shall occur or condition exist under the Project
                           Financing Agreements or any other agreement or
                           instrument relating to any Indebtedness or
                           Contingent Obligations having an aggregate principal
                           amount of more than:

                           (1)      fifteen million Dollars ($15,000,000) (or
                                    its equivalent in another currency or other
                                    currencies) if the Customer shall have been
                                    determined to be a Category 1B Customer; or

                           (2)      five million Dollars ($5,000,000) (or its
                                    equivalent in another currency or other
                                    currencies) if the Customer shall have been
                                    determined to be a Category 1C Customer, a
                                    Category 2 Customer or a Category 3
                                    Customer;

                           if (x) the effect of such event or condition is to
                           cause such Indebtedness to be declared due and
                           payable, or to permit the holder or holders of


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<PAGE>   103



                           such Indebtedness or beneficiary or beneficiaries of
                           such Indebtedness (or a trustee or agent on behalf
                           of such holder or holders or beneficiary or
                           beneficiaries) to declare such Indebtedness to be
                           due and payable, prior to its stated maturity, or to
                           cause such Contingent Obligations to become due and
                           payable, and (y) if the Customer shall have been
                           determined to be a Category 1B Customer or a
                           Category 1C Customer, such event or condition
                           continues after the giving of any notice and/or the
                           lapse of any applicable grace or notice period, if
                           any, specified in the agreement relating thereto,
                           PROVIDED that this Section 8.01(e)(i) shall not
                           apply to the Indebtedness of any Relevant Company
                           (or any Affiliate thereof) under any other customer
                           loan agreement entered into with AEF and PROVIDED
                           FURTHER that (x) if the Customer shall have been
                           determined to be a Category 1B Customer and (aa) is
                           not subject to cross-default provisions in any
                           Comparable Financing Transaction to which it is
                           party as evidenced by a certificate of the Customer
                           to that effect addressed to AEF, accompanied by
                           certified copies of the relevant documentation, this
                           Section 8.01(e)(i) shall not apply to any Relevant
                           Company or (bb) pursuant to any Comparable Financing
                           Transaction to which it is party the Customer is
                           subject to cross-default provisions not
                           substantially similar to this Section 8.01(e)(i) as
                           evidenced by a certificate of the Customer to that
                           effect addressed to AEF and accompanied by certified
                           copies of the relevant provisions, such other
                           cross-default provisions shall be deemed to be set
                           forth in this Agreement in the place of this Section
                           8.01(e)(i) and (y) if the Customer shall have been
                           determined to be a Category 2 Customer or a Category
                           3 Customer and is subject to cross-default
                           provisions in any Comparable Financing Transaction
                           that are materially more restrictive than this
                           Section 8.01(e)(i), such other cross-default
                           provisions shall be deemed to be set forth herein in
                           the place of this Section 8.01(e)(i); or

                  (ii)     If the Customer or an Affiliate thereof (A) fails to
                           make any payment in respect of a loan of the
                           Customer or such Affiliate under a customer loan
                           agreement entered into with AEF, under which the
                           Customer or such Affiliate has the same customer
                           category as the Customer Category for the Customer
                           hereunder, when such amount is due (whether by
                           scheduled maturity, required prepayment,
                           acceleration, demand or otherwise) and, if the
                           Customer shall have been determined to be a Category
                           1B Customer or a Category 1C Customer, such failure
                           continues after the giving of any required notice
                           and the lapse of any applicable grace or notice
                           period, if any, specified in such customer loan
                           agreement or (B) fails to perform or observe any
                           other condition or covenant or any other event shall
                           occur or condition exist under any such customer
                           loan agreement if (x) the effect of such event or
                           condition is to cause such loan to be declared due
                           and payable, or to permit the holder or holders of
                           such loan or beneficiary or beneficiaries of such
                           loan (or a trustee or agent on behalf of such holder
                           or holders or beneficiary or beneficiaries) to
                           declare such loan to be due and


                                      -98-

<PAGE>   104



                           payable, prior to its stated maturity, and (y) if
                           the Customer shall have been determined to be a
                           Category 1B Customer or a Category 1C Customer, such
                           event or condition continues after the giving of any
                           required notice and the lapse of any applicable
                           grace or notice period, if any, specified in such
                           customer loan agreement; or

         (f)      BANKRUPTCY OR INSOLVENCY.  Any Relevant Company (i) becomes
                  insolvent or generally fails to pay, or admits in writing its
                  inability to pay, its debts as they become due, subject to
                  applicable grace periods, if any, whether at stated maturity
                  or otherwise, (ii) voluntarily ceases to conduct its business
                  in the ordinary course, (iii) commences any Insolvency
                  Proceeding or files any petition or answer in any Insolvency
                  Proceeding, (iv) acquiesces in the appointment of, or the
                  taking of possession by, a receiver, trustee, custodian or
                  liquidator for itself or a substantial portion of its
                  property, assets or business or effects a plan or other
                  arrangement with its creditors or (v) admits the material
                  allegations of a petition filed against it in any Insolvency
                  Proceeding; or

         (g)      INVOLUNTARY PROCEEDINGS.  Any involuntary Insolvency
                  Proceeding is commenced or filed against any Relevant Company
                  or any writ, judgment, warrant of attachment, execution or
                  similar process is issued or levied against a substantial
                  part of any Relevant Company assets and any such proceedings
                  or petition shall not be dismissed, or such writ, judgment,
                  warrant of attachment, execution or similar process shall not
                  be released, vacated or fully bonded, within ninety (90) days
                  after commencement, filing or levy; or

         (h)      MONETARY JUDGMENTS.  One or more final judgments, orders or
                  decrees shall be entered against any Relevant Company
                  involving in the aggregate a liability (not fully covered by
                  insurance) more than an amount equal to the greater of (A)
                  (1) prior to the Conversion Commitment Date, twenty-five
                  million Dollars ($25,000,000) (or its equivalent in another
                  currency or other currencies) and (2) on and after the
                  Conversion Commitment Date (aa) if the Customer shall have
                  been determined to be a Category 1 Customer, twenty five
                  million Dollars ($25,000,000), (bb) if the Customer shall
                  have been determined to be a Category 2 Customer, fifteen
                  million Dollars ($15,000,000) and (cc) if the Customer shall
                  have been determined to be a Category 3 Customer, five
                  million Dollars ($5,000,000) and (B) twenty percent (20%) of
                  Consolidated Net Worth as at the date of the financial
                  statements of the Customer most recently delivered hereunder
                  at the time of determination, and the same shall remain
                  unvacated, undischarged, unstayed or unbonded pending appeal
                  for a period of forty-five (45) days after the entry thereof,
                  PROVIDED that if the Customer shall have been determined to
                  be a Category 1 Customer and (x) is not subject to judgment
                  default provisions in any Comparable Financing Transaction to
                  which it is party as evidenced by a certificate of the
                  Customer to that effect addressed to AEF, accompanied by
                  certified copies of the relevant documentation, this Section
                  8.01(h) shall not apply to any Relevant Company or (y)
                  pursuant to any Comparable Financing Transaction to which it


                                      -99-

<PAGE>   105



                  is party the Customer is subject to judgment default
                  provisions not substantially similar to this Section 8.01(h)
                  as evidenced by a certificate of the Customer to that effect
                  addressed to AEF and accompanied by certified copies of the
                  relevant provisions, such other judgment default provisions
                  shall be deemed to be set forth in this Agreement in the
                  place of this Section 8.01(h); or

         (i)      NON-MONETARY JUDGMENTS.  Any non-monetary judgment, order or
                  decree shall be rendered against any Relevant Company that
                  could reasonably be expected, in the sole opinion of AEF, to
                  have a Material Adverse Effect, and enforcement proceedings
                  shall have been commenced by any Person upon such judgment or
                  order which shall remain unstayed for any period of
                  forty-five (45) consecutive days or more; or

         (j)      COLLATERAL

                  (i)      Any provision of any Collateral Document shall for
                           any reason cease to be valid and binding on or
                           enforceable against the Customer or any Affiliate
                           thereof party thereto, if the effect thereof may
                           materially deprive AEF or the Security Agent of the
                           benefits of the Collateral taken as a whole, or the
                           Customer shall so state in writing or bring an
                           action to limit its obligations or liabilities
                           thereunder; or

                  (ii)     Any Collateral Document shall for any reason (other
                           than pursuant to, or contemplated by, the terms
                           thereof) cease to create a valid Lien in any
                           Collateral that is significant in value, relative
                           value or fundamental to the operation of the Project
                           purported to be covered thereby that is not replaced
                           with other Collateral acceptable to AEF within five
                           (5) Business Days, or any such Lien that, pursuant
                           to the terms hereof, is intended to constitute a
                           perfected and first priority Lien in favor of AEF or
                           the Security Agent, as the case may be, shall for
                           any reason cease to be a perfected and first
                           priority Lien; or

         (k)      FAILURE TO OBTAIN, OR LOSS OF, APPROVALS.  The Customer shall
                  fail to obtain, renew, maintain or comply in any material
                  respect with the Telecommunications Approvals or any other
                  Government Approvals; or the Telecommunications Authority or
                  any other Governmental Authority shall revoke, terminate,
                  withdraw, suspend, modify, withhold or fail to renew any
                  Telecommunications Approval or any other Government Approval;
                  or any Telecommunications Approval or any other Government
                  Approval shall for whatever reason cease to be in full force
                  and effect; or the Customer shall for any reason lose any
                  Telecommunications Approval or any other Government Approval;
                  or the use of the satellite frequencies and the orbital
                  position of the Satellite have not been coordinated and
                  notified with the RCB (or are not in the process of
                  coordination) in accordance with the requirements of this
                  Agreement or there exist prior advance publications or
                  requests for coordination or notification for systems that
                  may cause harmful interference to,


                                     -100-

<PAGE>   106



                  or receive harmful interference from, the Satellite, which is
                  reasonably likely to prevent the Customer from fulfilling its
                  then current Business Plan (if a Business Plan is required to
                  be provided hereunder) in any material respect; or any Export
                  License, if required by applicable law, is revoked, rescinded
                  or terminated; or

         (l)      LOAN DOCUMENTS INEFFECTIVE.  Any provision of any of this
                  Agreement, the Note, the Fee Letter, the Collateral Documents
                  or the Intercreditor Agreement (if any) shall at any time for
                  any reason cease to be valid and binding or in full force and
                  effect or any party thereto (other than AEF, the Security
                  Agent, the Lenders or the Project Lenders) shall, in good
                  faith, so assert in writing; or any provision of any of such
                  agreements shall, in good faith, be declared to be null and
                  void, or the validity or enforceability thereof shall be
                  contested by any party thereto (other than AEF, the Security
                  Agent, the Lenders or the Project Lenders) or any
                  Governmental Authority; or any party (other than AEF, the
                  Security Agent, the Lenders or the Project Lenders) to any of
                  such agreements shall deny that it has any further liability
                  or obligation under any such Loan Document; or any party
                  (other than AEF, the Security Agent, the Lenders or the
                  Project Lenders) to any of such agreements shall default in
                  the observance or performance of any of the covenants or
                  agreements contained in any of such agreements and such
                  default is not cured within the applicable grace period (if
                  any) contained in such agreements; and in each such case such
                  action, termination, cessation, declaration, contestation,
                  denial or default could reasonably be expected to have a
                  Material Adverse Effect; or

         (m)      MULTIPARTY AGREEMENT INEFFECTIVE.  Any provision of the
                  Multiparty Agreement (other than Section 3(a) (excluding the
                  last paragraph thereof), 3(c), 6 or 10 thereof (each an
                  "EXCLUDED SECTION")) shall at any time for any reason cease
                  to be valid and binding or in full force and effect or any
                  party thereto (other than AE or AEF) shall, in good faith, so
                  assert in writing; or any provision of the Multiparty
                  Agreement, other than an Excluded Section, shall, in good
                  faith, be declared to be null and void, or the validity or
                  enforceability thereof shall be contested by any party
                  thereto (other than AE or AEF) or any Governmental Authority;
                  or any party thereto (other than AE or AEF) shall deny that
                  it has any further liability or obligation under any section
                  thereof other than under an Excluded Section; or any party
                  thereto (other than AE or AEF) shall default in the
                  observance or performance of any of the covenants or
                  agreements contained in any section thereof other than an
                  Excluded Section, and such default is not cured within the
                  applicable grace period (if any) contained in the Multiparty
                  Agreement; or

         (n)      SATELLITE CONTRACTS INEFFECTIVE.  Any provision of any of the
                  Satellite Contracts shall at any time on or after the
                  Conversion Commitment Date for any reason cease to be valid
                  and binding or in full force and effect or any party thereto
                  shall so assert in writing; or any provision of any of the
                  Satellite Contracts shall be declared to be null and void, or
                  the validity or enforceability thereof shall be contested by
                  any party thereto or any Governmental Authority;


                                     -101-

<PAGE>   107



                  or any party to any of the Satellite Contracts shall deny
                  that it has any further liability or obligation under any of
                  the Satellite Contracts; or any party to any of the Satellite
                  Contracts shall default in the observance or performance of
                  any of the covenants or agreements contained in any of the
                  Satellite Contracts and such default is not cured within the
                  applicable grace period (if any) contained in such Satellite
                  Contract; and in each such case such action, termination,
                  cessation, declaration, contestation, denial or default would
                  reasonably be expected to have a Material Adverse Effect; or

         (o)      INSURANCE.  The Customer shall fail at any time to procure,
                  renew or maintain, or cause to be procured, renewed or
                  maintained, any insurance coverage required pursuant to
                  Section 6.06(b) of this Agreement or any insurer issues any
                  notice of avoidance or cancellation of any such coverage as a
                  result of a breach by the Customer of the terms of any of
                  such insurance.

1.082    REMEDIES.  If any Event of Default occurs and is continuing, AEF may:

         (a)      declare, in whole or, from time to time, in part, any
                  Commitment of AEF to make or Convert Loans to be terminated,
                  whereupon such Commitments shall forthwith be terminated;

         (b)      declare, in whole or, from time to time, in part, the unpaid
                  principal amount of the outstanding Loans, the interest
                  accrued and unpaid thereon and all other amounts payable
                  hereunder and under the other Loan Documents to be
                  immediately due and payable, whereupon such amounts shall be
                  due and payable without presentment, demand, protest or other
                  notice of any kind, all of which are hereby expressly waived
                  by the Customer; and/or

         (c)      exercise all rights, powers, privileges and remedies
                  available to AEF under the Loan Documents or any other
                  instrument, document or agreement or provided by law or in
                  equity, or instruct the Security Agent to exercise its rights
                  under the Collateral Documents or applicable law with respect
                  to the Collateral, cure such Event of Default or prosecute
                  the completion of the construction of the Project, either in
                  the name of and as agent for the Customer pursuant to one or
                  more existing contracts with the Customer or otherwise, and
                  any monies so expended in curing such Event of Default or
                  completing the construction of the Project shall, to the
                  extent advanced by AEF, be added to the principal amount of
                  the Loans hereunder and shall be repayable hereunder,
                  regardless of whether or not such principal amount, as thus
                  increased, exceeds the Commitments, and the amount of monies
                  thus advanced for completion of the construction of the
                  Project shall be deemed advanced under this Agreement as
                  Loans, and shall be secured by the Collateral Documents,
                  regardless of the principal amount thereof, and shall be
                  payable by the Customer on demand with interest thereon at
                  the Default Rate with respect to such Loans;

         PROVIDED that upon the occurrence of any event specified in Section
         8.01(f) or (g) above (in the case of Section 8.01(g), upon the
         expiration of the ninety (90) day


                                     -102-

<PAGE>   108



         period mentioned therein), the obligation of AEF to make Loans shall
         automatically terminate and the unpaid principal amount of all
         outstanding Loans and all interest and other amounts as aforesaid
         shall automatically become due and payable without notice to the
         Customer or any further act of AEF.

1.083    RIGHTS NOT EXCLUSIVE.  The rights provided for in this Agreement and
         the other Loan Documents are cumulative and are not exclusive.


                     SECTION 9.  ADDITIONAL LOAN PROVISIONS

1.091    CATEGORY 3 PREVIEW

         (a)      PURPOSE AND TIMING.  If the Customer shall be determined,
                  during the Conversion process, to be a Category 3 Customer,
                  the Customer shall satisfy, at or prior to Conversion,
                  specific Conversion Conditions.  Such conditions shall be
                  determined, in accordance with the terms hereof, based on a
                  review (as provided in this Section 9.01(a)) of the
                  Preliminary Business Plan, if any, or otherwise (as provided
                  in Section 9.02) on the basis of the Conversion Business
                  Plan.  In order to provide the Customer with greater
                  certainty with respect to Conversion, the Customer shall have
                  the right to submit its Preliminary Business Plan (together
                  with a true, complete and correct copy of the Construction
                  and Payment Schedule) to AEF for preview by AEF and the
                  Lenders pursuant to Section 9.01(b) below at any time until L
                  minus (-) two hundred and ten (210) days.

         (b)      SUBMISSION; RESUBMISSION

                  (i)      At the request of the Customer, AEF shall conduct an
                           initial review of the Preliminary Business Plan,
                           which review shall solely be to assess the adequacy
                           thereof for the purpose of this Section 9.01(b).
                           Upon completion of such review, AEF shall notify the
                           Customer whether, in the opinion of AEF and the
                           Lenders, the Preliminary Business Plan contains
                           insufficient information for AEF and the Lenders to
                           assess such Preliminary Business Plan hereunder, in
                           which event AEF shall suggest modifications,
                           revisions and sensitivities to the Preliminary
                           Business Plan that may allow it to satisfy the
                           requirements of this Agreement and suggest such
                           additional reports and other information as may
                           enable AEF and the Lenders to make the
                           determinations referred to in Section 9.01(c) below.
                           The Customer shall promptly submit to AEF (a
                           "SUBMISSION") either the Preliminary Business Plan
                           as initially delivered or the version that results
                           from the modifications, revisions and sensitivities
                           referred to in this Section 9.01(b)(i).

                  (ii)     AEF shall notify the Customer within thirty (30)
                           days of receipt of a Submission or a Revised
                           Submission (as defined below) to the Lenders
                           whether:


                                     -103-

<PAGE>   109




                           (A)      such Submission or Revised Submission is
                                    acceptable for the purposes of Section
                                    9.01(c) below;

                           (B)      such Submission or Revised Submission
                                    contains insufficient information for AEF
                                    and the Lenders to assess such Submission
                                    or Revised Submission hereunder; or

                           (C)      Conversion cannot occur for such Person as
                                    a Category 3 Customer on the basis of such
                                    Submission or Revised Submission.

                  (iii)    If, following a Submission, AEF shall make the
                           notification referred to in Section 9.01(b)(ii)(B)
                           above with respect thereto, then AEF shall notify
                           the Customer of any modifications, revisions or
                           sensitivities requested by AEF or the Lenders. If
                           (A) the Customer shall deliver to AEF such
                           modifications, revisions or sensitivities
                           (collectively a "REVISED SUBMISSION") not later than
                           fifteen (15) days following the date of such request
                           and (B) such Revised Submission is (in the opinion
                           of AEF) of the customary, iterative nature
                           undertaken by AEF and the Lenders in reviewing
                           similar projects, the procedure set forth in Section
                           9.01(b)(ii) above shall apply with respect to such
                           Revised Submission, and such Revised Submission
                           shall not constitute a Resubmission (as defined
                           below).

                  (iv)     If, following a Submission or a Revised Submission,
                           AEF shall make the notification referred to in
                           Section 9.01(b)(ii)(C) above, AEF may request that a
                           Lender act as modelling lender (in the capacity
                           contemplated by this Section 9.01(b)(iv), the
                           "MODELLING LENDER"). The Modelling Lender shall, for
                           a period of thirty (30) days, assist the Customer by
                           suggesting revisions to the Preliminary Business
                           Plan that may allow AEF and the Lenders to accept
                           the Preliminary Business Plan as so revised for the
                           purposes of Section 9.01(c) below and by assisting
                           in developing an appropriate financial model to
                           establish a revised Preliminary Business Plan for
                           Resubmission to AEF.

                  (v)      If there shall occur any material modification of a
                           fundamental business assumption underlying the
                           Preliminary Business Plan, or any other fundamental
                           change in the nature of the business, as to which a
                           Submission has been made, the Customer may resubmit
                           to AEF for review by AEF and the Lenders (a
                           "RESUBMISSION") such revised Preliminary Business
                           Plan for re-consideration by AEF and the Lenders
                           pursuant to the terms of this Section 9.01.

                  (vi)     No more than one Submission, one Revised Submission
                           and one Resubmission may be made by the Customer.
                           The Customer shall not be entitled to make a
                           Submission, Revised Submission or Resubmission


                                     -104-

<PAGE>   110



                           on any day that is after L minus (-) one hundred and
                           sixty five (165) days.

                  (vii)    Any review, suggestion or other undertaking by AEF
                           or the Modelling Lender pursuant to this Section
                           9.01(b) shall be without representation or warranty
                           to the Lenders as to the adequacy or accuracy of
                           such Preliminary Business Plan, or to the Customer
                           or any other Person of the likelihood that AEF and
                           the Lenders will accept such Preliminary Business
                           Plan for the purposes of Section 9.01(c) below or
                           that the Customer will on the Conversion Commitment
                           Date, the Conversion Date or at any other time
                           actually satisfy the applicable Conversion
                           Conditions.

         (c)      LENDER REVIEW AND DETERMINATION OF CONVERSION CONDITIONS.
                  If, following a Submission, Revised Submission or
                  Resubmission of any Preliminary Business Plan each of AEF and
                  the Lenders determine that the information set out in such
                  Preliminary Business Plan is acceptable for the purposes of
                  this Section 9.01(c), they shall, concurrently with the
                  acceptance of any such Preliminary Business Plan:

                  (i)      develop a Preliminary Base Case derived from the
                           information set out in the Preliminary Business
                           Plan;

                  (ii)     establish Conversion Conditions that would apply to
                           the Customer in the event the Customer is determined
                           to be a Category 3 Customer on the Conversion
                           Commitment Date, designed in each case to examine
                           the Customer's marketing, distribution and financial
                           strategies to reasonably confirm the ability of the
                           Customer to implement the Preliminary Base Case,
                           comprised of a set of objective tests (where
                           practicable) with criteria to be examined at the
                           Conversion Commitment Date and the Conversion Date
                           in the event that the Customer is determined to be a
                           Category 3 Customer, and each of which may be
                           subject to revision solely as provided in Sections
                           9.02(c)(iii) and 9.02(e)(v);

                  (iii)    establish additional covenants to be applied to the
                           Customer in the event the Customer is determined to
                           be a Category 3 Customer on the Conversion
                           Commitment Date to be applicable during the Tranche
                           B Term;

                  (iv)     if the Preliminary Business Plan includes the
                           information described in clause (f) of the
                           definition of "PRELIMINARY BUSINESS PLAN" in Section
                           1.01, notify the Customer of any additional
                           Collateral determined pursuant to Section 9.03(b) to
                           be necessary by AEF or the Lenders in the event that
                           such Person shall be determined to be a Category 3
                           Customer; and

                  (v)      identify the Expert Studies that will be required.



                                     -105-

<PAGE>   111



         (d)      APPLICABILITY.  AEF shall notify the Customer of the results
                  of the preview pursuant to Section 9.01(c), and any terms and
                  conditions specified by AEF pursuant to this Section 9.01
                  shall, if accepted by the Customer, be incorporated by AEF
                  and the Customer in ANNEX 3.  Such terms and conditions shall
                  be applicable in accordance with the terms hereof only in the
                  event the Customer is determined to be a Category 3 Customer
                  on the Conversion Commitment Date as set forth in Section
                  9.02(e), and shall be subject to revision solely in
                  accordance with Section 9.02(a)(iii) and 9.03.  Rejection by
                  the Customer of the specified terms and conditions shall not
                  preclude the Customer from being authorized to submit itself
                  for consideration pursuant to Section 9.02(c)(iv).  For the
                  avoidance of doubt, the establishment of such Conversion
                  Conditions shall not indicate or imply that the Customer will
                  on the Conversion Commitment Date, the Conversion Date or at
                  any other time actually satisfy such Customer Conversion
                  Conditions.  Review by AEF and the Lenders and development of
                  a Preliminary Base Case pursuant to this Section 9.01 with
                  respect to the Customer shall not preclude the assignment of
                  the Customer to any other Customer Category for which it may
                  qualify on the Conversion Commitment Date.

1.092    CONVERSION PROCESS

         (a)      DRAFT DOCUMENTATION.  On the date that is L minus (-) two
                  hundred and ten (210) days:

                  (i)      In order for the Customer to be eligible for
                           consideration as a Category 1 Customer on the
                           Conversion Commitment Date, the Customer shall
                           submit a draft of the Appraisal to AEF.

                  (ii)     In order for the Customer to be eligible for
                           consideration as a Category 2 Customer on the
                           Conversion Commitment Date, the Customer shall
                           submit to AEF drafts of (A) the Conversion Business
                           Plan and (B) the Appraisal.

                  (iii)    In order for the Customer to be eligible for
                           consideration as a Category 3 Customer on the
                           Conversion Commitment Date, regardless of whether or
                           not a Preliminary Base Case exists, the Customer
                           shall submit to AEF drafts of (A) the Conversion
                           Business Plan, (B) the Appraisal and (C) the Expert
                           Studies supporting the Conversion Business Plan.

         (b)      AEF REVIEW.  AEF shall review the draft documentation
                  submitted by the Customer to AEF and shall discuss with the
                  Customer any potential obstacles or any possible changes in
                  order to provide the Customer with greater certainty with
                  respect to Conversion.

         (c)      PRELIMINARY DOCUMENTATION.  On the date that is L minus (-)
                  one hundred and eighty (180) days:



                                     -106-

<PAGE>   112



                  (i)      In order for the Customer to be eligible for
                           consideration as a Category 1 Customer on the
                           Conversion Commitment Date, the Customer shall
                           submit the Appraisal to AEF, and if the Customer
                           proposes to be designated as a Category 1C Customer,
                           the Customer shall also submit information
                           satisfactory to AEF to ascertain compliance with the
                           Category 1C QL Loan Life Cover Ratio and may submit
                           a proposed Capex Budget. AEF shall develop for the
                           Customer a financial pro forma which shall be
                           sufficient to ascertain compliance with such
                           Category 1C QL Loan Life Cover Ratio.

                  (ii)     In order for the Customer to be eligible for
                           consideration as a Category 2 Customer on the
                           Conversion Commitment Date, the Customer shall
                           submit to AEF (A) the Conversion Business Plan and
                           (B) the Appraisal. AEF shall develop the Conversion
                           Base Case in accordance with ANNEX 2,
                           notwithstanding the existence of a Preliminary Base
                           Case as a Category 3 Customer for the Customer.

                  (iii)    If a Preliminary Base Case exists, and if the other
                           matters referred to in Section 9.01(c) have been
                           established and accepted by the Customer before the
                           date that is L minus (-) one hundred and eighty
                           (180) days, then in order for the Customer to be
                           eligible for consideration as a Category 3 Customer
                           on the Conversion Commitment Date, the Customer
                           shall submit to AEF:

                           (A)      the Conversion Business Plan;

                           (B)      the Appraisal; and

                           (C)      the Expert Studies supporting the
                                    Conversion Business Plan.

                           If such Conversion Business Plan and the Expert
                           Studies contain no material modification of a
                           fundamental business assumption (as determined by
                           AEF) underlying the Preliminary Business Plan, and
                           no other material change in the business of the
                           Customer shall have occurred, then the Preliminary
                           Base Case shall become the Conversion Base Case.  If
                           any such material modification shall have occurred,
                           then AEF shall modify the Preliminary Base Case and
                           develop the Conversion Base Case in accordance with
                           the Conversion Business Plan, the Appraisal and the
                           Expert Studies.  If AEF determines that the
                           Conversion Business Plan or the Expert Studies
                           identify a material modification of a fundamental
                           business assumption (other than a modification
                           affecting solely the calculation of the relevant
                           ratios required to be determined in accordance with
                           ANNEX 3) or a material risk not identified in the
                           Preliminary Business Plan, AEF shall notify the
                           Customer of any modifications to the matters
                           referred to in clauses 9.01(c)(ii) through (v)
                           arising by reason thereof, whereupon the matters
                           referred to therein shall be revised in accordance
                           with such modifications.


                                     -107-

<PAGE>   113



             (iv)          If a Preliminary Base Case does not exist, or if a
                           Preliminary Base Case exists and the other matters
                           referred to in Section 9.01(c) were established but
                           not accepted by the Customer before the date that is
                           L minus (-) one hundred and eighty (180) days, then
                           in order for the Customer to be eligible for
                           consideration as a Category 3 Customer on the
                           Conversion Commitment Date, the Customer shall
                           submit to AEF:

                           (A)      the Conversion Business Plan;

                           (B)      the Appraisal; and

                           (C)      the Expert Studies supporting the
                                    Conversion Business Plan.

                           AEF shall determine whether a Conversion Commitment
                           can be provided for the Customer and, if so, upon
                           what terms and conditions.

         (d)      CONVERSION REQUEST DATE.  On the date that is L minus (-) one
                  hundred and fifty (150) days, the Customer shall deliver the
                  documents and other instruments required to be delivered
                  pursuant to Sections 4.02 and 4.03, together with (i) a copy
                  of the executed Launch Services Agreement (which Launch
                  Services Agreement may be disclosed to the Lenders), (ii) a
                  list showing (x) the country in which it intends to be
                  Licensed, on and after the Conversion Date, (y) each country
                  in which it intends to receive a substantial portion of its
                  Project revenues, on and after the Conversion Date, and (z)
                  each country in which any item described in Section 4.02(i)
                  is located, or is reasonably expected to be located on and
                  after the Conversion Date and (iii) such other information as
                  AEF may request for purposes of demonstrating the Customer's
                  compliance or prospective compliance with the conditions set
                  forth therein.

         (e)      CONVERSION COMMITMENT DATE.  On the Conversion Commitment
                  Date, which date shall be L minus (-) eighty-five (85) days
                  with respect to the then scheduled Launch of the Satellite,
                  PROVIDED that such date shall not in any event be earlier
                  than sixty-five (65) days after the Conversion Request Date:

                  (i)      AEF shall, in its discretion, determine which
                           Customer Category will be applicable to the Customer
                           in accordance with the criteria set forth in ANNEXES
                           1, 2 AND 3;

                  (ii)     AEF shall, in its discretion, determine whether the
                           applicable Conversion Conditions have been and
                           continue to be satisfied and whether the Tranche B
                           Conditions Precedent are, have been and continue, or
                           are expected to be, satisfied by the Customer on or
                           before the date that is L minus (-) fifteen (15)
                           days;

                  (iii)    the Customer shall either prepay all Tranche A
                           Outstandings exceeding the Conversion Commitment
                           Amount, if any, or, at the discretion of AEF, the


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                           Customer shall (on terms and conditions acceptable
                           to AEF) grant in favor of AEF a perfected first
                           priority Lien (in each case created and perfected on
                           terms satisfactory to AEF) in cash collateral
                           (denominated in Dollars and held in Cash
                           Equivalents) or provide a letter of credit issued by
                           a bank acceptable to AEF that maintains a senior
                           secured credit rating by S&P of not less than AA- or
                           equivalent by any other Major Rating Agency for the
                           benefit of AEF on terms acceptable to AEF and in an
                           amount equal to the amount of Tranche A Outstandings
                           exceeding the Conversion Commitment Amount, PROVIDED
                           that any such excess amounts so secured shall be
                           prepaid, in any event, on or prior to the Conversion
                           Date;

                  (iv)     AEF shall have delivered to the Customer the
                           Repayment Profile; and

                  (v)      unless previously determined pursuant to Section
                           9.01, or if the applicable information not found in
                           the Preliminary Business Plan shall have been
                           modified in a material respect in the Conversion H
                           Business Plan, AEF shall make any determinations
                           with respect to additional Customer Collateral as
                           shall be appropriate pursuant to Section 9.03.

                  Notwithstanding the requirements set forth in this Section
                  9.02(e) with respect to the timing of the Conversion
                  Commitment Date, AEF shall notify the Customer as soon as
                  reasonably practicable after the Conversion Request Date of
                  the result of any determination required to be made under
                  this Section 9.02(e), to the extent that any such
                  determinations are made.

         (f)      CONVERSION COMMITMENT.  If, on the Conversion Commitment Date
                  with respect to any Customer:

                  (i)      AEF determines, in its discretion, that the
                           Conversion Conditions have been satisfied and the
                           Tranche B Conditions Precedent have been or will be
                           satisfied as provided in Section 4.03; and

                  (ii)     if the Customer shall have reduced the Tranche A
                           Outstandings so as not to exceed the Conversion
                           Commitment Amount (or the Customer has provided
                           additional security as provided for in Section
                           9.02(e)(iii), as the case may be),

                  AEF shall provide a Conversion Commitment to the Customer,
                  and AEF shall deliver to the Customer an executed Conversion
                  Commitment Letter as confirmation of such Conversion
                  Commitment on a date not earlier than sixty-five (65) days
                  after the Conversion Request Date and not later than L minus
                  (-) eighty-five days.  Such Conversion Commitment shall be
                  valid and binding for a Launch or Reflight (as the case may
                  be) occurring up to ninety (90) days after the then-scheduled
                  date of Launch PROVIDED that AEF is satisfied, in its
                  discretion, on the date being L minus (-) thirty (30) days
                  for the rescheduled Launch, that:



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<PAGE>   115



                  (A)      the applicable Conversion Conditions and Tranche B
                           Conditions Precedent are, or continue to be,
                           satisfied by the Customer; and

                  (B)      the Tranche A Outstandings do not exceed the
                           Conversion Commitment Amount (or that additional
                           security shall have been provided in the manner
                           described in this Section 9.02(e)).  If the Customer
                           fails to satisfy the applicable Conversion
                           Conditions and Tranche B Conditions Precedent on the
                           Conversion Commitment Date, AEF may, in its
                           discretion, permit the Customer to again present
                           evidence to AEF demonstrating their satisfaction at
                           any time until L minus (-) fifteen (15) days and if
                           AEF determines on such date that such conditions
                           have not been satisfied by such date, Conversion
                           shall not occur.

         (g)      CONVERSION DATE.  On the Conversion Date, AEF shall, in its
                  discretion, determine whether:

                  (i)      the Conversion Conditions and the Tranche B
                           Conditions Precedent continue to be satisfied by the
                           Customer; and

                  (ii)     the Tranche A Outstandings do not exceed the
                           Conversion Commitment Amount.  If AEF determines
                           that such conditions continue to remain satisfied on
                           and as of the Conversion Date with the same effect
                           as if made on and as of such date, and if the
                           Tranche A Outstandings do not exceed the Conversion
                           Commitment Amount, the Tranche A Loans shall convert
                           to the Tranche B Loan in the manner described in
                           Section 9.02(e) above.  If AEF shall determine that
                           either of the above conditions has not been
                           satisfied, Conversion shall not occur.  Upon
                           Conversion and for the duration of the Tranche B
                           Term, the additional terms set forth in ANNEX 1, 2
                           OR 3 (as revised, if applicable pursuant to section
                           9.01(d)), as applicable, shall apply to the
                           Customer, and the Customer shall be required to
                           comply therewith if AEF determines pursuant to
                           Section 9.02(e) above that the Customer satisfies
                           the requirements to be a Category 1 Customer,
                           Category 2 Customer or Category 3 Customer, as the
                           case may be.

         (h)      REFERENCE DATES.  All documents required to be delivered by
                  the Customer to AEF pursuant to this Section 9.02 shall be
                  delivered by the Customer not more than ten (10) days prior
                  to, nor more than five (5) days after, the delivery dates
                  specified herein.  In the event that following the date on
                  which an Appraisal, Conversion Business Plan (if applicable)
                  or Expert Study (if applicable) is provided to AEF pursuant
                  to Section 9.02(a) there shall occur any delay in the then
                  scheduled date of Launch of ninety (90) days or more, AEF
                  shall be entitled to require as a condition to Conversion
                  confirmation from the Customer and the Person issuing any
                  such Appraisal, Conversion Business Plan or Expert Study that
                  any such information so provided remains accurate in all
                  respects.



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<PAGE>   116



1.093    ADDITIONAL COLLATERAL.  The Customer shall be required to grant a
         first priority, perfected Lien on or in the Collateral in accordance
         with the terms hereof.  In addition thereto:

         (a)      CATEGORY 1C CUSTOMER AND CATEGORY 2 CUSTOMERS.  If the
                  Customer shall have been determined to be a Category 1C
                  Customer or Category 2 Customer and (i) the Satellite is to
                  be placed into non-geostationary orbit pursuant to the Launch
                  Services Agreement or (ii) the Project shall be determined by
                  AEF, based on the decision of the Lenders, to involve a novel
                  application (whether or not using novel technologies), AEF
                  may require that assets in addition to those set forth in the
                  definition of "COLLATERAL" herein that are integral to the
                  operation of the Satellite be included in the Collateral and,
                  in order for the Customer to be entitled to Conversion, such
                  assets shall, thereupon, be deemed to form part of the
                  Collateral for all purposes of this Agreement and the other
                  Loan Documents.  Any such determination shall be made by AEF
                  on or before the date of the earlier to occur of (A) the
                  completion of the review, if any, pursuant to Section 9.01 of
                  any Preliminary Business Plan submitted for the Customer, if
                  accepted by the Customer, that contains information
                  determined by AEF to be sufficient for the purpose of this
                  Section 9.03 and (B) the Conversion Commitment Date.

         (b)      CATEGORY 3 CUSTOMERS.  If the Customer shall have been
                  determined to be a Category 3 Customer, AEF may require that
                  assets in addition to those set forth in the definition of
                  "COLLATERAL" in this Agreement and directly relating to the
                  operation of the Satellite and any revenues derived therefrom
                  be included in the Collateral (but AEF may not include in
                  such requirement any asset readily available in the
                  market-place for a value of less than one million Dollars
                  ($1,000,000) unless the Project Financing is secured by a
                  Lien on any such asset), and in order for the Customer to be
                  entitled to Conversion, such assets shall, thereupon, be
                  deemed to form part of the Collateral for all purposes of
                  this Agreement and the other Loan Documents.  Any such
                  determination shall be made by AEF on or before the date of
                  the earlier to occur of (A) the completion of the review, if
                  any, pursuant to Section 9.01 of any Preliminary Business
                  Plan submitted by the Customer, if accepted by the Customer,
                  that contains information determined by AEF to be sufficient
                  for the purpose of this Section 9.03, and (B) the Conversion
                  Commitment Date.

1.094    SECURITY INTEREST IN COLLATERAL.  No later than, and at all times
         after, the Conversion Date (but subject to Section 4.03(d)), the
         Customer shall grant to the Security Agent, for the benefit of AEF,
         the Lenders and the associated Project Lenders in accordance with the
         terms of the Intercreditor Agreement, a valid Lien in or on all of the
         Customer's Collateral (except, subject to the following provisions of
         this Section 9.04 in the case of Government Approvals constituting
         Collateral, where such Lien cannot be created under applicable law).
         Such Liens shall be first priority and perfected at all such times,
         PROVIDED that if the Liens with respect to the Satellite or any
         Government Approval constituting Collateral (the "SUBJECT COLLATERAL")
         shall not be capable of being so perfected (or, in the case of such
         Government Approvals, created)


                                     -111-

<PAGE>   117



         under applicable law after the Customer shall have taken all
         reasonable steps to perfect (or, in the case of such Government
         Approvals, to create) such Lien, the Customer shall take the following
         additional actions with respect to security interests:

         (a)      if the Customer shall have been determined to be a Category 1
                  Customer (other than a Category 1C Customer that is not rated
                  by a Major Rating Agency), the Customer shall provide
                  whatever means to perfect a Lien as is normally constituted
                  by the then-present practices (as determined by AEF) of
                  third-party creditors intending to create perfected Liens in
                  assets comparable to the Subject Collateral, (as determined
                  by AEF), under the applicable law as of such Conversion Date
                  of each relevant jurisdiction, in secured satellite or
                  transponder financings, PROVIDED that to the extent that the
                  law applicable to the perfection of a security interest in
                  the Satellite is the law of a State of the United States of
                  America (and without limitation on the application of the law
                  of any other jurisdiction to the extent applicable), the
                  parties hereto recognize that the Uniform Commercial Code in
                  effect in such jurisdiction does not as of the Closing Date
                  expressly address the perfection of Liens in satellites and
                  agree that the Customer shall (i) provide for whatever means
                  to perfect a Lien in orbiting satellites as is normally
                  constituted by the then-present practices of third-party
                  creditors conducting a material lending business in the
                  United States of America intending to create perfected
                  security interests in assets comparable to the Satellite in
                  orbit, (ii) in the absence of such present practices, assume
                  that the Satellite would be classified as either a "mobile
                  good" or an "ordinary good" under the applicable Uniform
                  Commercial Code and (iii) file financing statements and
                  amendments thereto in the following jurisdictions:  (A) the
                  principal place of business of the Customer or the chief
                  executive office of the Customer if it has more than one
                  place of business, (B) the jurisdiction in which the
                  Satellite is manufactured, (C) any jurisdictions in which the
                  TTC&M Facilities are or will be located, and (D) any
                  jurisdiction with which the Satellite or the Customer has a
                  substantial connection, PROVIDED that, in the case of (A),
                  (B), (C) and (D), such jurisdiction is located within the
                  United States of America, and PROVIDED FURTHER that, in the
                  event there is a change in applicable law that provides for
                  the recognition of the perfection of security interests in
                  orbiting satellites, the Customer shall take all actions
                  required or reasonably advisable under such law to create a
                  perfected Lien in the Satellite;

         (b)      if the Customer shall have been determined to be a Category
                  1C Customer that is not rated by a Major Rating Agency, a
                  Category 2 Customer or a Category 3 Customer, so long as such
                  Customer is a special purpose vehicle providing a perfected,
                  first priority pledge of the equity interests therein as
                  Collateral, the Customer shall provide whatever means to
                  perfect a Lien as is normally constituted by the then-present
                  practices (as determined by AEF) of third-party creditors
                  intending to create perfected security interests in assets
                  comparable to the Subject Collateral, (as determined by AEF),
                  under the applicable law of each relevant jurisdiction as of
                  the Conversion Date, in secured, non-recourse satellite or
                  transponder financings for borrowers similar to the Customer,


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<PAGE>   118



                  PROVIDED that, to the extent that the law applicable to the
                  perfection of a security interest in the Satellite is the law
                  of a State of the United States of America (and without
                  limitation on the application of the law of any other
                  jurisdiction to the extent applicable), the parties hereto
                  recognize that the Uniform Commercial Code in effect in such
                  jurisdiction does not as of the Closing Date expressly
                  address the perfection of Liens in satellites and agree that
                  the Customer shall (i) provide for whatever means to perfect
                  a Lien in orbiting satellites as is normally constituted by
                  the then-present practices (as determined by AEF) of
                  third-party creditors conducting a material lending business
                  in the United States of America intending to create perfected
                  security interests in assets comparable to the Satellite in
                  orbit in secured non-recourse satellite or transponder
                  financings for borrowers similar to the Customer (as
                  determined by AEF), (ii) in the absence of such present
                  practices, assume that the Satellite shall be treated as
                  either a "mobile good" or an "ordinary good" under the
                  applicable Uniform Commercial Code and (iii) file financing
                  statements and amendments thereto in the following
                  jurisdictions:  (A) the principal place of business of the
                  Customer or the chief executive office of the Customer if it
                  has more than one place of business, (B) the jurisdiction in
                  which the Satellite is manufactured, (C) any jurisdiction in
                  which the TTC&M Facilities are located, and (D) any
                  jurisdiction with which the Satellite or the Customer has a
                  substantial connection, PROVIDED that, in the case of (A),
                  (B), (C) and (D), such jurisdiction is located within the
                  United States of America, and PROVIDED FURTHER that, in the
                  event there is a change in applicable law that provides for
                  the recognition of the perfection of Liens in orbiting
                  satellites, the Customer shall take all actions required or
                  reasonably advisable under such law to create a perfected
                  Lien in the Satellite; and

         (c)      if the Customer shall have been determined to be a Category
                  1C Customer that is not rated by a Major Rating Agency, a
                  Category 2 Customer or a Category 3 Customer and is not a
                  special purpose vehicle providing a pledge of equity
                  interests as provided in clause (b) above, the Customer shall
                  provide:

                  (i)      for a pledge of all of the equity interests in an
                           affiliated special purpose vehicle possessing
                           ownership interests in the Subject Collateral,
                           unless AEF shall determine based on the decision of
                           the Lenders that business, legal, tax or accounting
                           considerations with respect to such pledge would be
                           unduly burdensome for the Customer,

                  (ii)     whatever means to perfect a security interest as is
                           normally constituted by the then-present practices
                           (as determined by AEF) of third-party creditors
                           intending to create perfected security interests in
                           assets comparable to the Subject Collateral (as
                           determined by AEF), under the applicable law of each
                           relevant jurisdiction as of the Conversion Date, in
                           secured, non-recourse satellite or transponder
                           financings for borrowers similar to the Customer (as
                           determined by AEF), PROVIDED that, to the extent
                           that the law applicable to the perfection of a
                           security interest in the Subject Collateral is the
                           law of a State of the United


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<PAGE>   119



                           States of America, the parties hereto recognize that
                           the Uniform Commercial Code in effect in such
                           jurisdiction does not as of the Closing Date
                           expressly address the perfection of security
                           interests in satellites and agree that the Customer
                           shall (A) provide for whatever means to perfect a
                           Lien in orbiting satellites as is normally
                           constituted by the then-present practices (as
                           determined by AEF) of third-party creditors
                           conducting a material lending business in the United
                           States of America intending to create perfected
                           Liens in assets comparable to the Satellite in orbit
                           in secured, non-recourse satellite or transponder
                           financings for borrowers similar to the Customer (as
                           determined by AEF), (B) in the absence of such
                           present practices, assume that the Satellite would
                           be treated as a "mobile good" or an "ordinary good"
                           under the applicable Uniform Commercial Code and (C)
                           file financing statements and amendments thereto in
                           the following jurisdictions:  (1) the principal
                           place of business of the Customer or the chief
                           executive office of the Customer if it has more than
                           one place of business, (2) the jurisdiction in which
                           the Satellite is manufactured, (3) any jurisdiction
                           in which the TTC&M Facilities are located, and (4)
                           any jurisdiction with which the Satellite or the
                           Customer has a substantial connection; PROVIDED
                           that, in the case of (1), (2), (3) and (4), such
                           jurisdiction is located within the United States of
                           America, and PROVIDED FURTHER that, in the event
                           there is a change in applicable law that provides
                           for the recognition of the perfection of security
                           interests in orbiting satellites, the Customer shall
                           take all actions required or reasonably advisable
                           under such law to create a perfected Lien in the
                           Satellite; and

                  (iii)    such other terms and conditions to supplement this
                           Agreement as shall be required by AEF based on the
                           decision of the Lenders to be necessary to address
                           any credit risk posed by the businesses of the
                           Customer other than the Project and any Indebtedness
                           incurred by the Customer in connection with such
                           other businesses.


                           SECTION 10.  MISCELLANEOUS

1.101      AMENDMENTS AND WAIVERS.  No amendment or waiver of any provision of
           this Agreement or any other Loan Document, and no consent with
           respect to any departure by the Customer therefrom, shall be
           effective unless the same shall be in writing and signed by the
           Customer and AEF, and then such waiver shall be effective only in
           the specific instance and for the specific purpose for which given.

1.102      NOTICES.  All notices, demands, requests, waivers and other
           communications provided for hereunder, whether or not specified to
           be in writing, shall be in writing (including facsimile
           transmission) and mailed, telecopied or delivered, if to the
           Customer, to its address specified on SCHEDULE 10.02, and if to AEF,
           to its address specified on SCHEDULE 10.02, or to such other address
           as shall be designated by any party in a written notice to the other
           party.  All such notices and communications


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<PAGE>   120



           shall, when telecopied or mailed by overnight delivery, be effective
           when transmitted (any facsimile transmission to be promptly
           confirmed by the sender by telephone), delivered for overnight
           delivery or transmitted by telecopier, or if delivered, upon
           delivery, except that notices pursuant to Section 2 shall not be
           effective until received by AEF, PROVIDED that any such notices or
           communications delivered to AEF hereunder or under any other Loan
           Document shall be effective only if a copy thereof shall be
           delivered to AE at the address therefor determined in accordance
           with the terms of the Multiparty Agreement.

1.103      NO WAIVER; CUMULATIVE REMEDIES.  No failure to exercise and no delay
           in exercising, on the part of AEF, and no course of dealing with
           respect to, any right, remedy, power or privilege hereunder, shall
           operate as a waiver thereof, nor shall any single or partial
           exercise of any right, remedy, power or privilege hereunder preclude
           any other or further exercise thereof or the exercise of any other
           right, remedy, power or privilege.  The rights and remedies herein
           are cumulative and not exclusive of any rights or remedies provided
           by law.  All covenants of the Customer in this Agreement, and all
           Events of Default in Section 8.01, shall be given independent
           effect, even if the subject matter thereof is covered by another
           clause of this Agreement.

1.104      COSTS AND EXPENSES; INDEMNIFICATION

           (a)    The Customer shall, whether or not the transactions
                  contemplated hereby shall be consummated:

                  (i)      pay to or reimburse AEF, the Security Agent and each
                           Lender on demand for all reasonable costs and
                           expenses incurred in connection with the
                           negotiation, development, preparation, delivery,
                           administration and execution of, and any amendment,
                           supplement, waiver or modification to, this
                           Agreement, any Loan Document and any other documents
                           prepared in connection herewith or therewith, and
                           the consummation of the transactions contemplated
                           hereby and thereby, including (without limitation)
                           (A) the fees, costs and expenses of all special
                           counsel to AEF and all special counsel to the
                           Lenders, plus disbursements and travel costs and
                           expenses and (B) all other communication, travel and
                           out-of-pocket costs and expenses in connection with
                           the foregoing;

                  (ii)     pay to or reimburse AEF, the Security Agent and each
                           Lender on demand for all costs and expenses incurred
                           by them in connection with (A) any Default or Event
                           of Default or (B) the enforcement, protection or
                           preservation of any rights or claims (including in
                           connection with any "workout" or restructuring
                           regarding the Loans) under this Agreement, any Loan
                           Document, and any such other documents, including
                           all fees and out-of-pocket expenses of counsel (and
                           the allocated cost of internal counsel) to AEF, the
                           Security Agent and each Lender;


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<PAGE>   121



                  (iii)    pay to or reimburse AEF on demand for all appraisal
                           (including the fees and disbursements of the
                           Appraiser), audit, search, filing and other fees
                           incurred or sustained by AEF in connection with the
                           matters referred to under subsection (i) above; and

                  (iv)     pay to or reimburse AEF, the Security Agent and each
                           Lender on demand for all appraisal, audit, search
                           and filing fees incurred or sustained by any of them
                           in connection with the matters referred to under
                           subsection (ii) above.

           (b)    The Customer hereby agrees to indemnify AEF, each Lender
                  (including any such Lender acting in its capacity as
                  Modelling Lender) and the Security Agent and their respective
                  directors, officers, employees and agents (each such Person,
                  a "COVERED PERSON") from, and hold each of them harmless
                  against, on a net after-tax basis, any and all losses,
                  liabilities, claims (including, without limitation, claims
                  involving strict or absolute liability in tort, warranty
                  claims or claims based on negligence, product liability or
                  statutory liability, claims for libel, slander, infringement
                  of copyright, patent, trade secret or trademark
                  infringement), actions, suits, penalties, damages or expenses
                  (collectively, "LOSSES") incurred by any of them arising out
                  of or by reason of any investigation or litigation or other
                  proceedings (including any threatened investigation or
                  litigation or other proceedings) relating to any actual or
                  proposed use by the Customer of the proceeds of any of the
                  Loans or otherwise directly or indirectly arising out of or
                  in connection with the Project or any of the Loan Documents
                  or the transactions contemplated thereby or the launch of any
                  part of the Satellite, including the fees and disbursements
                  of counsel incurred in connection with any such investigation
                  or litigation or other proceedings, except:

                  (i)      Losses to the extent caused by the gross negligence
                           or willful misconduct of such Covered Person or any
                           director, officer, employee, servant or agent of
                           such Covered Person;

                  (ii)     Losses to the extent attributable to actions (other
                           than those of, or attributable to, the Customer, any
                           customer or Affiliate of the Customer or any
                           director, officer, employee, servant or agent of the
                           Customer) occurring after full and final compliance
                           by the Customer with all of the terms of the
                           Agreement and the other Loan Documents and the
                           repayment in full of the Loans; and

                  (iii)    Losses to the extent caused by any misrepresentation
                           or breach of, or failure to comply with or perform,
                           any obligation on the part of such Covered Person
                           pursuant to this Agreement or any other Loan
                           Document.

                  Amounts becoming due to a Covered Person pursuant to this
                  Section 10.04(b) shall bear interest thereon at the Default
                  Rate from the date on which the same


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<PAGE>   122



                  were due and payable until the date of payment.  The
                  foregoing obligations on the part of the Customer shall
                  survive the expiration or termination of this Agreement for
                  any reason whatsoever.

1.105      SUCCESSORS AND ASSIGNS.  The provisions of this Agreement shall be
           binding upon and inure to the benefit of the parties hereto and
           their respective successors and assigns, except that the Customer
           may not assign or transfer any of its rights or obligations under
           this Agreement.

1.106      ASSIGNMENT

           (a)    AEF may, at any time, assign and delegate to one or more
                  Eligible Assignees all or any part of this Agreement, the
                  Loans or the Commitments, or any other rights or obligations
                  of AEF hereunder, PROVIDED that the Customer may continue to
                  deal solely and directly with AEF in connection with the
                  interests so assigned to an Eligible Assignee until (i)
                  written notice of such assignment, together with payment
                  instructions, addresses and related information with respect
                  to the Eligible Assignee, shall have been given to the
                  Customer by AEF and the Eligible Assignee and (ii) AEF and
                  its Eligible Assignee shall have delivered to the Customer a
                  commitment assignment notice and acceptance substantially in
                  the form of EXHIBIT B (the "ASSIGNMENT AND ACCEPTANCE").

           (b)    From and after the date of any such assignment, (i) the
                  Eligible Assignee thereunder shall be a party hereto and, to
                  the extent that rights and obligations hereunder have been
                  assigned to it pursuant to such Assignment and Acceptance,
                  shall have the rights and obligations of AEF under the Loan
                  Documents, including all rights to indemnification and (ii)
                  AEF shall, to the extent that rights and obligations
                  hereunder have been assigned by it pursuant to such
                  Assignment and Acceptance, relinquish its rights and be
                  released from its obligations thereafter arising under the
                  Loan Documents.

           (c)    Immediately upon each Eligible Assignee's making its payment
                  under the Assignment and Acceptance, this Agreement shall be
                  deemed to be amended to the extent, but only to the extent,
                  necessary to reflect the addition of the Eligible Assignee
                  and the resulting adjustment of the Commitments arising
                  therefrom. The Commitments allocated in part to an Eligible
                  Assignee or to more than one Eligible Assignee shall reduce
                  the Commitments of AEF pro tanto.

           (d)    AEF may disclose from time to time any financial or other
                  information concerning the Customer or any of its Affiliates
                  or the Project that AEF has received from the Customer
                  pursuant to this Agreement or in connection with AEF's credit
                  evaluation of the Customer prior to entering into this
                  Agreement on a confidential basis to any Eligible Assignee or
                  any prospective Eligible Assignee, PROVIDED that such
                  Eligible Assignee or prospective Eligible


                                     -117-

<PAGE>   123



                  Assignee agrees in writing with AEF to keep such information
                  confidential to the same extent required of AEF hereunder.

1.107      CURRENCY INDEMNITY

           (a)    Any amount received or recovered by AEF hereunder or under
                  any other Loan Document in respect of any moneys or
                  liabilities due, arising or incurred by the Customer to AEF
                  (whether as a result of any judgment or order of any court or
                  in the bankruptcy, reorganization, liquidation or dissolution
                  of the Customer or by way of damages for any breach of any
                  obligation to make any payment to such Person) in a currency
                  (the "CURRENCY OF PAYMENT") other than the currency in which
                  the payment should have been made pursuant to this Agreement
                  or such other Loan Document (the "CURRENCY OF OBLIGATION") in
                  whatever circumstances and for whatever reason shall only
                  constitute a discharge to the Customer to the extent of the
                  Currency of Obligation amount that such Person is able or
                  would have been able, on the date or dates of receipt by it
                  of such payment or payments in the Currency of Payment (or,
                  in the case of any such date that is not a Business Day, on
                  the next succeeding Business Day), to purchase in the foreign
                  exchange market of its choice with the amount or amounts so
                  received.

           (b)    If the amount of the Currency of Obligation that the Person
                  referred to above is so able to purchase falls short of the
                  amount originally due to such Person hereunder or under any
                  other Loan Document, the Customer shall indemnify and hold
                  the Person referred to above harmless against any loss or
                  damage arising as a result of such shortfall by paying to
                  such Person that amount in the Currency of Obligation
                  certified by such Person as necessary to so indemnify and
                  hold such Person harmless.  This indemnity shall constitute a
                  separate and independent obligation from the other
                  obligations contained in this Agreement or any other Loan
                  Document, shall give rise to a separate and independent cause
                  of action against the Customer for the additional amount
                  necessary to yield the amount to make such Person whole in
                  terms of the Currency of Obligation, shall apply irrespective
                  of any indulgence granted hereunder or thereunder from time
                  to time, and shall continue in full force and effect
                  notwithstanding any judgment or order for a liquidated amount
                  or amounts in respect of amounts due hereunder or thereunder
                  or under any such judgment or order.

1.108      SET-OFF.  The Customer authorizes each of AEF, the Lenders and the
           Security Agent at any time and from time to time, without prior
           notice to the Customer, any such notice being waived by the Customer
           to the fullest extent permitted by law, (a) if an Event of Default
           shall have occurred and be continuing, to set-off and apply any and
           all deposits (general or special, provisional or final) at any time
           held by AEF, such Lender or, as the case may be, the Security Agent
           to or for the credit or the account of the Customer and other
           Indebtedness at any time owing by AEF, such Lender or, as the case
           may be, the Security Agent to the Customer, in each case regardless
           of the currency in which such deposit or other Indebtedness is
           denominated, the office


                                     -118-

<PAGE>   124



           or branch where such deposit or other Indebtedness is held or owing
           and whether or not such deposit or other Indebtedness is then due,
           against any and all obligations of the Customer now or hereafter
           existing under this Agreement or any other Loan Document and any
           Loan held by AEF, such Lender or, as the case may be, the Security
           Agent to the extent that such obligations of the Customer or such
           Loan is then due but irrespective of whether or not AEF shall have
           made demand under this Agreement or any Loan Document and (b) if a
           Default shall have occurred and be continuing, to suspend the
           payment and performance of its obligations with respect to any
           Indebtedness at any time owing by AEF, such Lender or the Security
           Agent, as the case may be, to the Customer (including, without
           limitation, the suspension of any payments with respect to any
           deposits (general or special, provisional or final) at such time
           held by AEF, such Lender or the Security Agent to or for the credit
           or the account of the Customer).  AEF agrees promptly to notify the
           Customer after any such set-off and application made by AEF,
           PROVIDED that the failure to give such notice shall not affect the
           validity of such set-off and application. The rights of AEF, such
           Lender or, as the case may be, the Security Agent under this Section
           10.08 are in addition to the other rights and remedies (including
           without limitation, other rights of set-off) that AEF, such Lender
           or, as the case may be, the Security Agent may have.

1.109      COUNTERPARTS.  This Agreement may be executed by one or more of the
           parties to this Agreement in any number of separate counterparts,
           each of which, when so executed, shall be deemed an original, and
           all of said counterparts taken together shall be deemed to
           constitute but one and the same instrument.

10.10      SEVERABILITY.  Any provision hereof that is prohibited or
           unenforceable in any jurisdiction shall, as to such jurisdiction, be
           ineffective to the extent of such prohibition or unenforceability
           without invalidating the remaining provisions hereof and without
           affecting the validity or enforceability of any provision in any
           other jurisdiction.

10.11      GOVERNING LAW AND JURISDICTION

           (a)    THE RIGHTS AND DUTIES OF THE CUSTOMER AND AEF UNDER THIS
                  AGREEMENT (INCLUDING MATTERS RELATING TO THE MAXIMUM INTEREST
                  RATE CHARGEABLE HEREUNDER) SHALL, PURSUANT TO NEW YORK
                  GENERAL OBLIGATIONS LAW SECTION 5-1401, BE GOVERNED BY THE
                  LAW OF THE STATE OF NEW YORK.

           (b)    SUBJECT TO CLAUSE (c) BELOW, ANY LEGAL ACTION OR PROCEEDING
                  WITH RESPECT TO THIS AGREEMENT OR THE LOAN DOCUMENTS MAY BE
                  BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
                  UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW
                  YORK SITTING IN MANHATTAN, AND BY EXECUTION AND DELIVERY OF
                  THIS AGREEMENT, EACH OF THE CUSTOMER AND AEF CONSENTS,


                                     -119-

<PAGE>   125



                  FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-
                  EXCLUSIVE JURISDICTION OF THOSE COURTS.  EACH OF THE CUSTOMER
                  AND AEF IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
                  OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
                  FORUM NON CONVENIENS, THAT IT MAY NOW OR HEREAFTER HAVE TO
                  THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION
                  IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO.
                  THE CUSTOMER AND AEF EACH WAIVE PERSONAL SERVICE OF ANY
                  SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
                  OTHER MEANS PERMITTED BY NEW YORK LAW OR ANY OTHER APPLICABLE
                  LAW.  THE CUSTOMER IRREVOCABLY APPOINTS CT CORPORATION SYSTEM
                  AND ITS SUCCESSORS, SITUATED AT 1633 BROADWAY, NEW YORK, NEW
                  YORK 10019, AS ITS AGENT TO RECEIVE SERVICE OF PROCESS OR
                  OTHER LEGAL SUMMONS FOR PURPOSES OF ANY PROCEEDING.  THE
                  CUSTOMER AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR
                  PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
                  JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
                  PROVIDED BY LAW.

           (c)    IF AND FOR SO LONG AS THERE SHALL BE ANY ECA ENHANCEMENT OR
                  ECA COUNTRY RISK COVERAGE PROVIDED WITH RESPECT TO THE
                  TRANSACTIONS CONTEMPLATED IN THIS AGREEMENT, AT THE ELECTION
                  OF AEF, ANY AND ALL DISPUTES ARISING OUT OF OR IN CONNECTION
                  WITH THIS AGREEMENT MAY BE FINALLY SETTLED UNDER THE RULES OF
                  ARBITRATION AND CONCILIATION OF THE INTERNATIONAL CHAMBER OF
                  COMMERCE (THE "RULES") BY THREE (3) ARBITRATORS APPOINTED IN
                  ACCORDANCE WITH THE RULES.  THE PLACE OF ARBITRATION SHALL BE
                  AT THE INTERNATIONAL CHAMBER OF COMMERCE IN PARIS, FRANCE.
                  THE LANGUAGE OF ARBITRATION SHALL BE ENGLISH.  NO
                  CONSEQUENTIAL OR PUNITIVE DAMAGES SHALL BE AWARDED IN
                  CONNECTION WITH ANY SUCH ARBITRATION.  TO THE FULLEST EXTENT
                  PERMITTED BY LAW, THE CUSTOMER HEREBY IRREVOCABLY AND
                  GENERALLY CONSENTS IN RESPECT OF ANY SUCH ARBITRAL
                  PROCEEDINGS TO THE GIVING OF ANY RELIEF OR THE ISSUE OF ANY
                  PROCESS IN CONNECTION WITH THOSE PROCEEDINGS, INCLUDING THE
                  MAKING, ENFORCEMENT OR EXECUTION AGAINST ANY ASSETS
                  WHATSOEVER (IRRESPECTIVE OF THEIR USE OR INTENDED USE) OF ANY
                  ORDER OR JUDGMENT WHICH MAY BE MADE OR GIVEN IN THOSE
                  PROCEEDINGS.  THE CUSTOMER AGREES THAT ANY FINAL AWARD
                  AGAINST IT IN ANY ARBITRAL PROCEEDINGS SHALL BE CONCLUSIVE
                  AND BINDING UPON IT


                                     -120-

<PAGE>   126



                  AND MAY BE ENFORCED IN THE COURTS OF LUXEMBOURG, FRANCE OR
                  ANY OTHER COURTS TO THE JURISDICTION OF THE CUSTOMER AEF IS
                  OR MAY BE SUBJECT, BY SUIT ON THE AWARD, A CERTIFIED OR
                  EXEMPLIFIED COPY OF WHICH AWARD SHALL BE CONCLUSIVE EVIDENCE
                  THEREOF AND OF THE AMOUNT OF ITS LIABILITY, OR BY ANY OTHER
                  MEANS PROVIDED BY LAW.

           (d)    NOTHING IN THIS SECTION 10.11 SHALL AFFECT THE RIGHT OF AEF
                  TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
                  OR AFFECT THE RIGHT OF AEF TO BRING ANY SUIT, ACTION OR
                  PROCEEDING AGAINST THE CUSTOMER OR THE PROPERTY OF THE
                  CUSTOMER IN THE COURTS OF ANY OTHER JURISDICTION.

           (e)    To the extent that the Customer may in any jurisdiction claim
                  for itself or its assets immunity from suit, execution,
                  attachment (whether in aid of execution, before judgment or
                  otherwise) or other legal process and, to the extent that in
                  any such jurisdiction there may be attributed to itself or
                  its assets such immunity whether or not claimed, the Customer
                  hereby irrevocably agrees not to claim, and irrevocably
                  waives, such immunity to the fullest extent permitted by the
                  laws of such jurisdiction.

10.12      WAIVER OF JURY TRIAL.  THE CUSTOMER AND AEF WAIVE THEIR RESPECTIVE
           RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
           OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
           DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY
           ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF
           THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT
           TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE.  THE CUSTOMER AND AEF
           AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
           COURT TRIAL WITHOUT A JURY.  WITHOUT LIMITING THE FOREGOING, THE
           PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY
           IS WAIVED BY OPERATION OF THIS SECTION 10.12.  AS TO ANY ACTION,
           COUNTERCLAIM OR OTHER PROCEEDING THAT SEEKS, IN WHOLE OR IN PART, TO
           CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR THE
           OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF.  THIS
           WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
           SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
           DOCUMENTS.

10.13      ENTIRE AGREEMENT.  This Agreement, together with the other Loan
           Documents, embodies the entire agreement and understanding between
           the Customer and AEF


                                     -121-

<PAGE>   127



           and supersedes all prior or contemporaneous agreements and
           understandings of such persons, verbal or written, relating to the
           subject matter hereof and thereof.

10.14      CONFIDENTIALITY.  AEF agrees to take normal and reasonable
           precautions and exercise due care to maintain the confidentiality of
           all non-public information provided to it by the Customer or any of
           its Subsidiaries in connection with this Agreement, any other Loan
           Document or any of the Satellite Contracts, and neither it nor any
           of its Affiliates shall use any such information for any purpose or
           in any manner other than pursuant to the terms contemplated by this
           Agreement, except to the extent such information (a) was or becomes
           generally available to the public other than as a result of a
           disclosure by AEF or (b) was or becomes available on a
           non-confidential basis from a source other than the Customer,
           PROVIDED that such source is not bound by a confidentiality
           agreement with the Customer known to AEF, and PROVIDED that AEF may
           disclose such information (i) at the request of any bank regulatory
           authority or in connection with an examination of AEF by any such
           authority, (ii) pursuant to subpoena or other court process, (iii)
           when required to do so in accordance with the provisions of any
           applicable law, (iv) at the express direction of any agency of any
           jurisdiction in which AEF conducts its business, (v) to AEF's
           independent auditors and legal counsel, (vi) to the Security Agent,
           the Lenders and the Project Lenders, (vii) to any Eligible Assignee
           or prospective Eligible Assignee as provided in Section 10.06(d),
           (viii) to the Lenders or any prospective assignee or participant
           thereof, PROVIDED that such parties agree to keep such information
           confidential to the same extent required of AEF hereunder and (ix)
           to AE, to the extent AE is providing services to AEF.

10.15      HEADINGS.  The headings of the various sections and subsections of
           this Agreement are for convenience of reference only, do not
           constitute a part hereof and shall not affect the meaning or
           construction of any provision hereof.

10.16      NO THIRD PARTY BENEFICIARIES.  The agreement of AEF to make the
           Loans to the Customer on the terms and conditions set forth herein
           are solely for the benefit of the Customer, and no other Person
           (including, without limitation, any other obligor or any contractor,
           subcontractor, supplier or materialman furnishing supplies, goods or
           services to or for the benefit of the Project) shall have any rights
           hereunder or, as against AEF, under any other Loan Document or with
           respect to the Loans or the proceeds thereof.

10.17      SURVIVAL.  All representations, warranties, covenants and agreements
           of the Customer contained herein or made in writing in connection
           herewith shall survive the making of Loans hereunder and shall
           continue in full force and effect so long as any of the obligations
           of the Customer hereunder are outstanding.  Without limiting the
           foregoing, the obligations of the Customer under Sections 2.08,
           3.01, 3.02, 3.03 and 10.04 shall survive the prepayment or repayment
           of the Loans and the termination of the Commitments.

10.18      LANGUAGE.  Each communication and document made or delivered to AEF
           pursuant to this Agreement and the other Loan Documents shall be in
           the English language.


                                     -122-

<PAGE>   128



           In the event that any such communication or document is translated
           into English from another language, then, in the event of any
           conflict or inconsistency between the English text and the text of
           such other language, the English text shall prevail.

10.19      DETERMINATIONS BY AEF.  To the extent that the terms and conditions
           of this Agreement provide for or contemplate determinations,
           decisions, approvals or consents or any other exercise of discretion
           (collectively, "DETERMINATIONS") to be made or granted by AEF (and
           whether or not any such term or condition expressly so provides),
           AEF shall have the right to make such Determinations in its
           discretion taking into account the interests of the Lenders and may
           agree with the Lenders that such Determinations may be made among
           some or all of AEF, the Lenders and the Security Agent (in which
           case the Customer shall be bound by such Determinations as fully as
           if such Determinations were made by AEF hereunder).




                                     -123-

<PAGE>   129




IN WITNESS WHEREOF, the parties hereto have caused this Customer Loan Agreement
to be duly executed and delivered by their proper and duly authorized
Responsible Officers as of the day and year first above written.


                                            CD RADIO INC.



                                            By:    /s/ David Margolese     
                                               -----------------------------
                                               Name:  David Margolese
                                               Title:  Chairman and CEO


                                            ARIANESPACE FINANCE S.A.


                                            By:     /s/ B. Vienne          
                                               -----------------------------
                                               Name:  Brigitte Vienne
                                               Title:  Le Directeur-General



                                     -124-

<PAGE>   130


                                     
                                                                         ANNEX 1


                             CATEGORY 1 CUSTOMER


1.111      CATEGORY 1 CUSTOMER REQUIREMENTS.  In order for the Customer to be
           eligible for consideration as a Category 1 Customer pursuant to
           Section 9.02(e), AEF shall have determined on the Conversion
           Commitment Date and the Conversion Date, in its discretion, that
           each of the following conditions has been satisfied:

           (a)    GENERAL CRITERIA.  The Customer shall have an existing
                  business or businesses that satisfies or that satisfy the
                  criteria set forth in Section 11.02 or 11.03, as determined
                  by AEF based on audited financial statements of the relevant
                  Person for the Relevant Period.

           (b)    CONTINUATION OF GENERAL CRITERIA.  Unless the Customer shall
                  have been determined to be a Category 1A Customer or a
                  Category 1B Customer on the basis of a Credit Rating in
                  accordance with Section 11.02 and is not on "creditwatch" for
                  downgrading by a Major Rating Agency, AEF shall determine
                  that it knows of no event or circumstance that would prevent
                  such business or businesses from continuing to satisfy such
                  criteria through the end of the Tranche B Term.

           (c)    OTHER CATEGORY CRITERIA.  The Customer shall satisfy, as
                  determined by AEF, all other criteria set forth in this ANNEX
                  1.

           For the purposes of determining whether a Customer satisfies the
           terms and criteria to be determined to be a Category 1C Customer,
           AEF shall disregard any revenues earned or derived by the Customer
           in any country that is not a Permitted Location therefor.

1.112      CREDITWORTHINESS.  The creditworthiness of the Customer shall be
           determined by AEF based on the Customer's Credit Rating by S&P (or
           any local affiliate or associated agency thereof) on the Conversion
           Commitment Date as set forth in the table in this Section 11.02 (or
           an equivalent Credit Rating by another Major Rating Agency) (as
           evidenced, in the case of any Credit Rating that is not published
           and publicly available, by a certified copy of a letter from S&P (or
           any local affiliate or associated agency thereof) (or such other
           Major Rating Agency) notifying the Customer of such Credit Rating)
           PROVIDED that, if the Customer has a Credit Rating from more than
           one Major Rating Agency, the lowest such Credit Rating shall apply),
           or, if not so rated by a Major Rating Agency, the Customer may be
           assigned to one of the three subcategories applicable to a Category
           1 Customer based on the satisfaction of each of the criteria set
           forth under "Non-Rated Customer Criteria" in the table in this
           Section 11.02, as determined by AEF, on the Conversion Commitment
           Date PROVIDED that, if the Customer does not have a Credit Rating,
           the Customer shall not be assigned to a Customer Category higher
           than that applicable




<PAGE>   131



           to the credit rating of the sovereign of the jurisdiction in which
           the business of the Customer is primarily conducted or to which such
           business is primarily related (as determined by AEF):

<TABLE>
<CAPTION>
======================================================================================================================
                                                               NON-RATED CUSTOMER CRITERIA
                                     ---------------------------------------------------------------------------------
                                          MINIMUM                                                      MINIMUM
                                         PRE-TAX             MAXIMUM              MAXIMUM            CONSOLIDATED
                                           CASH               TOTAL              LONG TERM            NET WORTH
    CUSTOMER            CREDIT           INTEREST            DEBT TO              DEBT TO              (US$, IN
    CATEGORY            RATING           COVERAGE        CAPITALIZATION        CAPITALIZATION         MILLIONS)     
---------------------------------------------------------------------------------------------------------------------
       <S>            <C>                 <C>                 <C>                  <C>                   <C>
       1A               A- or             5 to 1               40%                  30%                  $200
                        higher

       1B               BBB+,             3 to 1               50%                  40%                  $175
                        BBB or
                         BBB-

       1C             BB+ or BB           2 to 1               60%                  50%                  $150       
=====================================================================================================================
</TABLE>

1.113      GUARANTOR.  In the event that the Customer does not meet the
           criteria for a Category 1 Customer set forth in Section 11.02, it
           shall be deemed to be a Category 1 Customer if and so long as (a)
           the obligations of the Customer hereunder are guaranteed by a Person
           or Persons that meet such criteria (each, a "GUARANTOR" and,
           collectively, the "GUARANTORS"), (b) such Person or Persons shall
           have entered into a legal, valid, binding and enforceable,
           irrevocable and unconditional written guaranty of payment in favor
           of AEF, on terms and conditions satisfactory (including, without
           limitation, containing reasonable representations and warranties and
           covenants) to AEF, guaranteeing, so as to be primarily liable for,
           all of the Customer's obligations under this Agreement and the other
           Loan Documents, (c) this Agreement shall have been amended to
           include reasonable conditions precedent, events of default and other
           appropriate provisions relating to the Guarantor and such guaranty,
           all in a manner satisfactory to AEF and (d) AEF shall have received
           such corporate documentation, legal opinions and other items as it
           shall have requested in connection with the foregoing.




                                      -2-

<PAGE>   132



1.114      TERMS AND CONDITIONS.  The economic terms applicable to a Category 1
           Customer shall include:


<TABLE>
<CAPTION>
======================================================================================================
                                              REQUIRED                               MAXIMUM TRANCHE
                         CUSTOMER             DISTRESS            MAXIMUM             B TERM/AVERAGE
     CUSTOMER            TRANCHE B            RECOVERY             TOTAL                   LIFE
     CATEGORY             MARGIN               VALUE           ADVANCE RATE             (IN YEARS)   
------------------------------------------------------------------------------------------------------
        <S>                <C>                 <C>                 <C>                     <C>
        1A                 1.00%                50%                100%                    10/7
        1B                 1.20%                50%                 85%                    10/7
        1C                 1.50%                60%                 70%                    5/3       
======================================================================================================
</TABLE>

           If the Customer shall have been determined to be a Category 1C
           Customer, a financial pro forma shall have been derived as provided
           in Section 9.02(c)(i) and AEF shall have received commitments to
           enter into, and drafts and copies of executed Qualified Lease
           Agreements at the times and having the features referred to in
           Sections 12.01(b) and 12.01(c), which Qualified Lease Agreements
           shall result in a Category 1C QL Loan Life Cover Ratio of not less
           than 0.65 to 1.

           Notwithstanding the Customer Tranche B Margins stated above, if the
           economic terms set forth in the table above in this Section 11.04
           (other than the Customer Tranche B Margins) shall be applicable to
           the Customer solely as a result of ECA Enhancement being procured
           with respect to the Customer, as set forth in Section 2.13, the
           Customer Tranche B Margin for the Customer shall be as set forth
           below corresponding to the following levels of ECA Enhancement
           procured:

<TABLE>
<CAPTION>
===============================================================================
           ECA PERCENTAGE                      CUSTOMER TRANCHE B MARGIN      
-------------------------------------------------------------------------------
<S>             <C>                                      <C>
GREATER THAN OR EQUAL TO 85%                             1.70%
GREATER THAN OR EQUAL TO 70%                             2.15%
GREATER THAN OR EQUAL TO 50%                             2.60%                
===============================================================================
</TABLE>


1.115      MANDATORY PREPAYMENTS FROM EXCESS CASH FLOW.  If the Customer shall
           have been determined to be a Category 1C Customer, the Customer
           shall, on each Excess Cash Flow Prepayment Date (as defined below)
           falling after the Conversion Date, prepay the Tranche B Loan in an
           amount equal to the Applicable Percentage (as defined below) of
           Excess Cash Flow for the Applicable Period (as defined below) ending
           on or most recently ended prior to such Excess Cash Flow Prepayment
           Date MINUS an amount (not less than zero) equal to the aggregate
           principal amount of prepayments made pursuant to this Section 11.05
           calculated by reference to Excess Cash Flow for any period falling
           during such Applicable Period.


           For purposes of this Section 11.05:  (a) the "EXCESS CASH FLOW
           PREPAYMENT DATES" means (i) the date falling 180 days after the end
           of each fiscal year of the Customer


                                      -3-

<PAGE>   133



           (or, if earlier, the date that the Customer delivers year-end
           financial statements pursuant to Section 6.01(a) for such fiscal
           year) and (ii) each date that a Restricted Payment is made; (b)
           "APPLICABLE PERIOD" means, with respect to any Excess Cash Flow
           Prepayment Date, the period commencing on the first day of the
           fiscal year in which such Excess Cash Flow Prepayment Date falls and
           ending on the last day of the fiscal quarter of the Customer ended
           on or most recently ended prior to such Excess Cash Flow Prepayment
           Date, or, if such Excess Cash Flow Prepayment Date is the date
           referred to in clause (i) of the definition of such term, the
           fiscal year of the Customer most recently ended prior to such date;
           and (c) the "APPLICABLE PERCENTAGE" for any period means the
           percentage set forth below opposite the percentage of the Conversion
           Amount remaining outstanding at the close of business in Paris on
           the last day of such period:

                                 Percentage of

<TABLE>
<CAPTION>
           Applicable Percentage                              Conversion Amount
           of Excess Cash Flow                                Outstanding
           -------------------                                -----------

                    <S>                                       <C>
                    100%                                      Greater than 90%

                     75%                                      Less than or equal to 90%
                                                                     and greater than 80%

                     50%                                      Less than or equal to 80%
                                                                     and greater than 60%

                     25%                                      Less than or equal to 60%
</TABLE>


           If the Customer shall have been determined to be a Category 1C
           Customer:  (a) the Customer shall not, and shall not permit any of
           its Subsidiaries to, make any Restricted Payment on any Excess Cash
           Flow Prepayment Date falling on or after the Conversion Date unless
           (i) the aggregate amount of all Restricted Payments by the Customer
           and all of its Subsidiaries for the Applicable Period is less than
           or equal to Unrestricted Excess Cash Flow for such Applicable Period
           not theretofore used for any other purpose permitted by any of this
           Section 11.05, or Section 6.26, 7.07, 7.14, 7.15 or 13.04 and (ii)
           such Restricted Payment is not made until after the prepayment
           required by the first sentence of this Section 11.05 is made in
           respect of such Applicable Period and (b) the Customer shall not,
           and shall not permit any of its Subsidiaries to, make Restricted
           Payments in respect of any Applicable Period consisting of a full
           fiscal year unless the aggregate amount of all Restricted Payments
           by the Customer and all of its Subsidiaries for such fiscal year is
           less than or equal to Unrestricted Excess Cash Flow for such fiscal
           year not theretofore used for any other purpose permitted by any of
           this Section 11.05 or Section 6.26, 7.07, 7.14, 7.15 or 13.04.



                                      -4-

<PAGE>   134



1.116      FINANCIAL COVENANTS.  If the Customer shall have been determined to
           be a Category 1 Customer, then the Customer covenants and agrees
           that, from and after the Conversion Date and for so long as AEF
           shall have any Commitment hereunder, or any Loan or other amount
           shall remain unpaid, unless AEF waives compliance in writing, the
           Customer shall not:

           (a)    INTEREST COVERAGE RATIO.  Permit its ratio of EBITDA to Total
                  Interest for any period of four (4) fiscal quarters of the
                  Customer ending on a Measuring Date to be less than:


<TABLE>
<CAPTION>
                                                        Interest
               Customer                                 Coverage
               Category                                  Ratio
               --------                                  -----
                  <S>                                     <C>
                  1A                                      4.5 to 1
                  1B                                      2.75 to 1
                  1C                                      2 to 1
</TABLE>

           (b)    DEBT SERVICE COVERAGE RATIO.  Permit its ratio of EBITDA to
                  P&I Debt Service, for any period of four (4) fiscal quarters
                  of the Customer ending on a Measuring Date to be less than:


<TABLE>
<CAPTION>
               Customer                               Debt Service
               Category                              Coverage Ratio
               --------                              --------------
                  <S>                                     <C>
                  1A                                      2.5 to 1
                  1B                                      2 to 1
                  1C                                      1.25 to 1
</TABLE>

           (c)    MAXIMUM LEVERAGE.  Permit its Indebtedness, expressed as a
                  percentage of Consolidated Net Worth, to exceed on any Test
                  Date the percentage value set forth below opposite the
                  applicable Customer Category:


<TABLE>
<CAPTION>
               Customer                                 Maximum
               Category                                 Leverage
               --------                                 --------
                  <S>                                    <C>
                  1A                                      50%
                  1B                                      75%
                  1C                                     100%
</TABLE>

1.117      NO LIMITATIONS ON SUBSIDIARIES.  If the Customer shall have been
           determined to be a Category 1C Customer, the Customer will not
           permit any of its Subsidiaries to enter into, after the date of this
           Agreement, any indenture, agreement, instrument or other arrangement
           that, directly or indirectly, prohibits or restrains, or has the
           effect of prohibiting or restraining, or imposes materially adverse
           conditions upon, the incurrence or payment of Indebtedness, the
           granting of Liens, the declaration or


                                      -5-

<PAGE>   135



           payment of dividends, the making of loans, advances or other
           investments or the sale, assignment, transfer or other disposition
           of assets, except for any prohibition or restraint as to the
           granting of Liens on, or sales, assignments, transfers or other
           dispositions of, property that is (a) subject to a Lien in favor of
           any other Person (except for the Customer or any of its Subsidiaries
           or Affiliates) not otherwise prohibited by this Agreement or (b)
           subject to a lease with any Person (except for the Customer or any
           of its Subsidiaries or Affiliates) not otherwise prohibited by this
           Agreement.

1.118      COMPARABLE FINANCING TRANSACTION COVENANTS.  If the Customer shall
           have been determined to be a Category 1 Customer and (i) is not
           subject to financial covenants in any Comparable Financing
           Transaction to which it is party, the financial covenants set forth
           in Section 11.06 shall not apply or (ii) pursuant to any Comparable
           Financing Transaction to which it is party the Customer is subject
           to financial covenants not substantially similar to the financial
           covenants set forth in Section 11.06, such other financial covenants
           shall be deemed to be set forth in this Agreement in the place of
           the financial covenants set forth in Section 11.06.

1.119      AFFIRMATIVE COVENANTS.  If the Customer shall have been determined
           to be a Category 1C Customer, then the Customer covenants and agrees
           that, from and after the Conversion Date and for so long as AEF
           shall have any Commitment hereunder, or any Loan or other amount
           shall remain unpaid, unless AEF waives compliance in writing:

           (a)    The Customer covenants and agrees that if any Qualified Lease
                  Agreement is terminated by the Lessee thereunder (or
                  terminated as a result of the Lessee's breach or default
                  thereunder) or otherwise ceases to be in full force and
                  effect and is not replaced within thirty (30) days of the
                  date of such termination or other event by a Qualified Lease
                  Agreement of equivalent value (meaning aggregate rent as
                  determined below), the Customer shall, until such time as
                  such Qualified Lease Agreement shall be replaced, pay into an
                  escrow account established on terms and conditions acceptable
                  to AEF, an amount equal to the present value (at a discount
                  rate equal to the debt interest rate used in the preparation
                  of the then-current Business Plan) of rent that would
                  otherwise be payable under the terminated Qualified Lease
                  Agreement for the remaining lease term if a termination had
                  not occurred.  In the event that a Qualified Lease Agreement
                  of equivalent value is entered into by the Customer in
                  substitution for the terminated Qualified Lease Agreement
                  after the Customer shall have made the payment into an escrow
                  account pursuant to the terms of the immediately preceding
                  sentence, and PROVIDED that no Default or Event of Default
                  shall have occurred and be continuing, such amount held in
                  escrow shall be repaid to the Customer less all costs and
                  expenses incurred or paid by AEF in connection with the
                  foregoing (including, without limitation, fees, costs and
                  expenses payable to the escrow agent).

           (b)    CERTIFICATES.  The Customer shall furnish to AEF,
                  concurrently with the delivery of the annual financial
                  statements referred to in Section 6.01(a) of this


                                      -6-

<PAGE>   136



                  Agreement, a certificate of a Responsible Officer of the
                  Customer, certifying the names and number of the lessees of
                  transponders or communications capacity on the Satellite,
                  together with the percentage of capacity leased on the
                  Satellite for the current fiscal year and the lease payments
                  made to the Customer during the immediately preceding fiscal
                  year and the lease payments due and payable to the Customer
                  during the current fiscal year.

           (c)    NOTICES.  The Customer shall promptly notify (in writing) AEF
                  of the execution of any amendment or modification to, or
                  termination of, any Qualified Lease Agreement or waiver of
                  any right or grant of any consent thereunder.


                                      -7-

<PAGE>   137
                                                                     ANNEX 2




                              CATEGORY 2 CUSTOMER


1.121      CATEGORY 2 CUSTOMER REQUIREMENTS.  In order for the Customer to be
           eligible for consideration as a Category 2 Customer pursuant to
           Section 9.02(e), AEF shall have determined on the Conversion
           Commitment Date (except in the case of Section 12.01(c)) and the
           Conversion Date, in its discretion, that each of the following
           conditions has been satisfied:

           (a)    CONVERSION BUSINESS PLAN AND CONVERSION BASE CASE.  The
                  Conversion Business Plan of the Customer shall have been
                  determined by AEF to be acceptable pursuant to Section
                  9.02(e), and a Conversion Base Case shall have been derived.

           (b)    QUALIFIED LEASE AGREEMENTS.  The Customer shall have executed
                  or procured binding commitments to enter into (and as of L
                  minus (-) thirty (30) days shall have executed) Qualified
                  Lease Agreements with a Lessee or Lessees sufficient to meet
                  the Category 2 QL Loan Life Cover Ratio (for each period
                  referred to in the definition of such term) set forth in the
                  table in Section 12.02 as of the Conversion Commitment Date,
                  which Qualified Lease Agreements shall have the following
                  features:

                  (i)      either:

                           (A)      provisions expressly permitting, without
                                    the consent of the Lessee, the assignment
                                    of the agreement by the Customer to the
                                    Security Agent as security for the
                                    Customer's obligations under the Loan
                                    Documents;

                           (B)      not precluding the assignment of the
                                    agreement by the Customer to the Security
                                    Agent as security for the Customer's
                                    obligations under the Loan Documents; or

                           (C)      provisions requiring the consent of the
                                    Lessee or counterparty to the assignment of
                                    the agreement by the Customer to the
                                    Security Agent as security for the
                                    Customer's obligations under the Loan
                                    Documents, PROVIDED that such assignment
                                    has been consented to expressly by the
                                    Lessee or counterparty, as the case may be;

                           provided that, in the cases of the foregoing clauses
                           (A) and (B), the Customer shall provide to the
                           Security Agent an acknowledgment of the Lessee or
                           counterparty that it has notice of the assignment by
                           the Customer to the Security Agent as security for
                           the Customer's obligations under the Loan Documents;





<PAGE>   138



                  (ii)     does not contain provisions in the nature of
                           indemnities or other provisions for the payment by
                           the Customer of termination fees, costs or damages
                           (except for customary credits or refunds, not in
                           excess of lease payments under such agreement, for
                           failure to provide services);

                  (iii)    provisions precluding the Lessee from assigning the
                           agreement to any Person without the consent of the
                           Security Agent;

                  (iv)     the agreement shall be governed by the laws of New
                           York, England or such other jurisdiction as may be
                           acceptable to AEF;

                  (v)      the transponder being leased is not capable of being
                           preempted under any circumstances or, where the
                           transponder is capable of being preempted at any
                           time before the expiry of a specified period or the
                           occurrence of a specified event, that period has
                           expired or that event has occurred (as appropriate),
                           PROVIDED that the transponder being leased may be
                           capable of being preempted (A) by a Governmental
                           Authority for reasons of national security and (B)
                           under any circumstances with respect to any
                           Qualified Lease Agreement if, after excluding such
                           Qualified Lease Agreement from the relevant
                           calculations, the Customer would satisfy the
                           conditions and covenants set forth in Sections 11.04
                           and 11.06 (if the Customer shall have been
                           determined to be a Category 1C Customer) or Sections
                           12.01(b)(xii), 12.02 and 12.04(b) (if the Customer
                           shall have been determined to be a Category 2
                           Customer) on a pro forma basis;

                  (vi)     provisions stating that the Lessee shall comply in
                           all material respects with all applicable laws and
                           regulations regarding the use of the transponder(s)
                           (including, without limitation, the content of
                           transmissions into the country in which service is
                           received);

                  (vii)    provisions prohibiting termination of the lease by
                           the Lessee except for any of the following reasons:

                           (A)      material breach or default by the Customer
                                    of the agreement;

                           (B)      the Lessee's use of the transponder(s) is
                                    impaired by reason of force majeure
                                    affecting the Satellite for a period of not
                                    less than thirty (30) days;

                           (C)      the Satellite is removed from its orbital
                                    position;

                           (D)      there occurs a Launch Failure or, after
                                    Launch, a Total Failure or Constructive
                                    Total Failure in-orbit with respect to that
                                    Satellite;



                                      -2-

<PAGE>   139



                           (E)      the failure of the transponder(s) to meet
                                    the performance specifications in the
                                    agreement (which shall reflect the
                                    performance specifications in the Satellite
                                    Purchase Agreement); or

                           (F)      there occurs a Partial Failure of the
                                    transponder assigned to the Lessee, and the
                                    Lessee is not entitled to service from
                                    another transponder.

                  (viii)   provisions that all rental and other payments are
                           denominated in and payable in an Acceptable
                           Currency;

                  (ix)     provisions requiring the Lessee to pay all amounts
                           payable to the Customer under the agreement directly
                           into the Revenue Account;

                  (x)      no provisions restricting the Customer from
                           disclosing copies of the agreement to the Lenders,
                           AEF or the Security Agent;

                  (xi)     the QL Weighted Average Term at the time of
                           determination shall be at least as long as the
                           Average Life of the Tranche B Loan; and

                  (xii)    the effectiveness of the leasing arrangements
                           thereunder shall be subject only to the following
                           conditions precedent: (A) the successful launch of
                           such satellite, (B) the successful placement of such
                           satellite in a specified orbital position, (C) the
                           successful activation and operation of a minimum
                           percentage of the transponders or communications
                           capacity on such satellite, (D) the satisfactory
                           completion of all in-orbit testing of the Satellite
                           and (E) other reasonable and customary conditions
                           (including as to the posting of a cash security
                           deposit) that, in the determination of AEF, can be
                           met without undue cost, burden or delay.

           (c)    AEF shall have received:

                  (i)      not later than the Conversion Commitment Date,
                           binding commitments to enter into the Qualified
                           Lease Agreements required hereunder, or
                           confirmations that the Qualified Lease Agreements
                           required hereunder have been entered into, which
                           commitments or confirmations shall be in English or
                           accompanied by a certified translation in English;

                  (ii)     not later than L minus (-) forty-five (45) days,
                           substantially final drafts of the Qualified Lease
                           Agreements required hereunder (which may be generic
                           "master" forms of Qualified Lease Agreements), which
                           shall be in English or accompanied by a certified
                           translation in English; and

                  (iii)    not later than L minus (-) thirty (30) days, copies
                           of the executed Qualified Lease Agreements (in a
                           national language of any of the countries listed in
                           Annex 4 hereto), which (if not in English) shall be


                                      -3-

<PAGE>   140



                           accompanied by a certified translation in English or
                           a written confirmation in English by local counsel
                           acceptable to AEF that such executed Qualified Lease
                           Agreements are identical to the drafts thereof
                           furnished pursuant to the preceding clause (ii) or,
                           if not identical, specifying in English the
                           deviations therefrom.

           (d)    NON-SUBORDINATED INDEBTEDNESS.  If the Customer shall have
                  any Indebtedness outstanding as of the Conversion Date that
                  is not Subordinated Indebtedness, the Customer's Category 2
                  CF Loan Life Cover Ratio shall, on the Conversion Date only,
                  in addition to the other requirements set forth in this ANNEX
                  2, be equal to or greater than the ratio set forth in Section
                  12.02 for the Category 2 QL Loan Life Cover Ratio
                  corresponding to the applicable Customer Category, PROVIDED
                  that this Section 12.01(c) shall not apply so long as the
                  Customer shall covenant to limit its senior unsecured
                  Indebtedness on a case-by-case basis as agreed between the
                  Customer and AEF based on the decision of the Lenders.

           (e)    OTHER CATEGORY CRITERIA.  The Customer shall satisfy, as
                  determined by AEF, all other criteria set forth in this ANNEX
                  2.

1.122      TERMS AND CONDITIONS.  The economic terms applicable to a Category 2
           Customer shall include:

<TABLE>
<CAPTION>
===================================================================================================================================
                                                                                            MAXIMUM
                            MINIMUM                                                        TRANCHE B                 MINIMUM
                           REQUIRED                                  MAXIMUM                 TERM/                CATEGORY 2 QL
                           DISTRESS             CUSTOMER              TOTAL                 AVERAGE                 LOAN LIFE
     CUSTOMER              RECOVERY            TRANCHE B             ADVANCE                  LIFE                    COVER
     CATEGORY                VALUE               MARGIN               RATE                 (IN YEARS)                 RATIO       
-----------------------------------------------------------------------------------------------------------------------------------
        <S>                  <C>                 <C>                  <C>                     <C>                   <C>
        2A                    60%                2.50%                 80%                    10/7                  1.5 to 1
        2B                    60%                3.00%                 75%                    8/6                   1.3 to 1      
===================================================================================================================================
</TABLE>

           If the Customer shall enter into any Qualified Lease Agreements for
           a term that is shorter than the Average Life permitted hereunder,
           the Average Life shall be deemed adjusted to equal such shorter
           period.

1.123      AFFIRMATIVE COVENANTS.  If the Customer shall have been determined
           to be a Category 2 Customer, then the Customer covenants and agrees
           that, from and after the Conversion Date and for so long as AEF
           shall have any Commitment hereunder, or any Loan or other amount
           shall remain unpaid, unless AEF waives compliance in writing:

           (a)    The Customer covenants and agrees that if any Qualified Lease
                  Agreement is terminated by the Lessee thereunder (or
                  terminated as a result of the Lessee's breach or default
                  thereunder) or otherwise ceases to be in full force and
                  effect and is not replaced within thirty (30) days of the
                  date of such termination or


                                      -4-

<PAGE>   141



                  other event by a Qualified Lease Agreement of equivalent
                  value (meaning aggregate rent as determined below), the
                  Customer shall, until such time as such Qualified Lease
                  Agreement shall be replaced, pay into an escrow account
                  established on terms and conditions acceptable to AEF, an
                  amount equal to the present value (at a discount rate equal
                  to the debt interest rate used in the preparation of the
                  then-current Business Plan) of rent that would otherwise be
                  payable under the terminated Qualified Lease Agreement for
                  the remaining lease term if a termination had not occurred.
                  In the event that a Qualified Lease Agreement of equivalent
                  value is entered into by the Customer in substitution for the
                  terminated Qualified Lease Agreement after the Customer shall
                  have made the payment into an escrow account pursuant to the
                  terms of the immediately preceding sentence, and PROVIDED
                  that no Default or Event of Default shall have occurred and
                  be continuing, such amount held in escrow shall be repaid to
                  the Customer less all costs and expenses incurred or paid by
                  AEF in connection with the foregoing (including, without
                  limitation, fees, costs and expenses payable to the escrow
                  agent).

           (b)    CERTIFICATES.  The Customer shall furnish to AEF,
                  concurrently with the delivery of the annual financial
                  statements referred to in Section 6.01(a) of this Agreement,
                  a certificate of a Responsible Officer of the Customer,
                  certifying the names and number of the lessees of
                  transponders or communications capacity on the Satellite,
                  together with the percentage of capacity leased on the
                  Satellite for the current fiscal year and the lease payments
                  made to the Customer during the immediately preceding fiscal
                  year and the lease payments due and payable to the Customer
                  during the current fiscal year.

           (c)    NOTICES.  The Customer shall promptly notify (in writing) AEF
                  of the execution of any amendment or modification to, or
                  termination of, any Qualified Lease Agreement or waiver of
                  any right or grant of any consent thereunder.

1.124      NEGATIVE COVENANTS.  If the Customer shall have been determined to
           be a Category 2 Customer, then the Customer covenants and agrees
           that, from and after the Conversion Date and for so long as AEF
           shall have any Commitment hereunder, or any Loan or other amount
           shall remain unpaid, unless AEF waives compliance in writing:

           (a)    AMENDMENTS.  The Customer shall not amend, supplement or
                  modify any Qualified Lease Agreement if the result would be
                  to amend, supplement or modify any term set forth in the
                  definition of Qualified Lease Agreements and such amendment,
                  supplementation or modification could reasonably be expected
                  to have a Material Adverse Effect.

           (b)    FINANCIAL COVENANTS.  The Customer shall not:



                                      -5-

<PAGE>   142



                  (i)      INTEREST COVERAGE RATIO.  Permit its ratio of EBITDA
                           to Total Interest for any period of four (4) fiscal
                           quarters of the Customer ending on a Measuring Date
                           to be less than:


<TABLE>
                           <S>                                                       <C>
                           at any time on or prior to the first
                           anniversary of the Conversion Date,                       1.2 to 1

                           at any time after the first anniversary and
                           on or prior to the second anniversary of the

                           Conversion Date, and                                      1.5 to 1
                           at any time thereafter                                    2 to 1
</TABLE>


               (ii)        DEBT SERVICE COVERAGE RATIO.  Permit its ratio of
                           EBITDA to P&I Debt Service for any period of four
                           (4) fiscal quarters of the Customer ending on a
                           Measuring Date to be less than:

<TABLE>
                           <S>                                                            <C>
                           at any time on or prior to the second
                           anniversary of the Conversion Date, and                        1.2 to 1

                           at any time thereafter                                         1.5 to 1
</TABLE>


              (iii)        LEVERAGE RATIO.  Permit its ratio of Indebtedness on
                           any Test Date to EBITDA for the period of four (4)
                           fiscal quarters of the Customer ended on or most
                           recently ended prior to such Test Date, to exceed:


<TABLE>
                           <S>                                                             <C>
                           at any time after the first anniversary
                           and on or prior to the second
                           anniversary of the Conversion Date,                             5 to 1

                           at any time after the second anniversary
                           and on or prior to the third anniversary
                           of the Conversion Date, and                                     4 to 1

                           at any time thereafter                                          3 to 1
</TABLE>

               (iv)        TOTAL CASH FLOW TO LOAN RATIO.  Permit its Category
                           2 CF Loan Life Cover Ratio, as of each fiscal
                           year-end of the Customer, commencing with the first
                           fiscal year-end following the Conversion Date, to be
                           less than 1.3 to 1.


                                      -6-

<PAGE>   143
                                                                       ANNEX 3




                              CATEGORY 3 CUSTOMER


1.131      CATEGORY 3 CUSTOMER REQUIREMENTS.  In order for the Customer to be
           eligible for consideration as a Category 3 Customer pursuant to
           Section 9.02(e), AEF shall have determined on the Conversion
           Commitment Date and the Conversion Date, in its discretion, that
           each of the conditions set forth in either ANNEX 1 for Category 1
           Customers or ANNEX 2 for Category 2 Customers has not been
           satisfied.  For the purposes of determining whether a Customer
           satisfies the terms and criteria to be determined to be a Category 3
           Customer, AEF shall disregard any revenues earned or derived by the
           Customer in any country that is not a Permitted Location therefor.

1.132      TERMS AND CONDITIONS.  The economic terms applicable to a Category 3
           Customer shall include:


<TABLE>
<CAPTION>
=======================================================================================================================

                                                                                    MAXIMUM
                                                                                   TRANCHE B           CATEGORY 3
                    REQUIRED DISTRESS        CUSTOMER           MAXIMUM              TERM/              LOAN LIFE
    CUSTOMER            RECOVERY            TRANCHE B            TOTAL            AVERAGE LIFE            COVER
    CATEGORY              VALUE               MARGIN          ADVANCE RATE         (IN YEARS)             RATIO       
-----------------------------------------------------------------------------------------------------------------------
       <S>                 <C>                 <C>                 <C>               <C>                <C>
        3                  75%                3.50%               70%                 7/5               1.75 to 1

=======================================================================================================================
</TABLE>

1.133      AFFIRMATIVE COVENANTS.  If the Customer shall have been determined
           to be a Category 3 Customer, then the Customer covenants and agrees
           that, from and after the Conversion Date and for so long as AEF
           shall have any Commitment hereunder, or any Loan or other amount
           shall remain unpaid, unless AEF waives compliance in writing:

           (a)    CERTIFICATES.  The Customer shall furnish to AEF:

                  (i)      concurrently with the delivery of the annual
                           financial statements referred to in Section 6.01(a),
                           a certificate of a Responsible Officer of the
                           Customer, certifying the number of the Customer's
                           paying subscribers (as applicable), lessees of
                           transponder services or users of communications
                           capacity (as applicable), the nature of the services
                           provided and the obligations related thereto
                           together with the revenues generated therefrom
                           during the immediately preceding fiscal year and the
                           revenues due and payable to the Customer during the
                           current fiscal year.





<PAGE>   144



                  (ii)     on a quarterly basis, a certificate of a Responsible
                           Officer of the Customer showing in detail the
                           calculations supporting each statement in respect of
                           Section 13.05 of this Agreement.

           (b)    NOTICES.  The Customer shall promptly notify (in writing) AEF
                  of the incurrence or prepayment of any Other Indebtedness for
                  Borrowed Money.

           (c)    DEBT SERVICE RESERVE.  If required by AEF and the Lenders
                  pursuant to Section 9.01(c), the Customer shall maintain on
                  deposit, in an account established for such purpose,
                  immediately available funds in an amount not to exceed the
                  aggregate total amount of scheduled payments of principal of
                  Indebtedness of the Customer for the next six (6) consecutive
                  months, together with the projected aggregate total amount of
                  interest due and payable on such Indebtedness for such
                  period.

1.134      MANDATORY PREPAYMENTS FROM EXCESS CASH FLOW.  If the Customer shall
           have been determined to be a Category 3 Customer, the Customer
           shall, on each Excess Cash Flow Prepayment Date (as defined below)
           falling after the Conversion Date, prepay the Tranche B Loan in an
           amount equal to the Applicable Percentage (as defined below) of
           Excess Cash Flow for Applicable Period (as defined below) ending on
           or most recently ended prior to such Excess Cash Flow Prepayment
           Date MINUS an amount (not less than zero) equal to the aggregate
           principal amount of prepayments made pursuant to this Section 13.04
           calculated by reference to Excess Cash Flow for any period falling
           during Applicable Period.

           For purposes of this Section 13.04: (a) the "EXCESS CASH FLOW
           PREPAYMENT DATES" means (i) the date falling 180 days after the end
           of each fiscal year of the Customer (or, if earlier, the date that
           the Customer delivers year-end financial statements pursuant to
           Section 6.01(a) for such fiscal year) and (ii) each date that a
           Restricted Payment is made; (b) "APPLICABLE PERIOD" means, with
           respect to any Excess Cash Flow Prepayment Date, the period
           commencing on the first day of the fiscal year in which such Excess
           Cash Flow Prepayment Date falls and ending on the last day of the
           fiscal quarter of the Customer ended on or most recently ended prior
           to such Excess Cash Flow Prepayment Date, or, if such Excess Cash
           Flow Prepayment Date is the date referred to in clause (i) of the
           definition  of such term, the fiscal year of the Customer most
           recently ended prior to such date; and (c) the "APPLICABLE
           PERCENTAGE" of Excess Cash Flow for any period means the percentage
           set forth below opposite the percentage of the Conversion Amount
           remaining outstanding at the close of business on the last day of
           such period:

<TABLE>
<CAPTION>
                  Applicable                         Percentage of
                  Percentage                         Conversion Amount
                  ----------                         -----------------

                    <S>                              <C>
                    100%                             Greater than 90%

                     75%                                      Less than or equal to 90% and greater than
                                                              80%
</TABLE>


                                      -2-

<PAGE>   145



<TABLE>
                    <S>                                      <C>
                     50%                                      Less than or equal to 80% and greater than
                                                              60%

                     25%                                      Less than or equal to 60%
</TABLE>

         If the Customer shall have been determined to be a Category 3
         Customer:  (i) the Customer shall not, and shall not permit any of its
         Subsidiaries to, make any Restricted Payment on any Excess Cash Flow
         Prepayment Date falling on or after the Conversion Date unless (a) the
         aggregate amount of all Restricted Payments by the Customer and all of
         its Subsidiaries for the Applicable Period  is less than or equal to
         Unrestricted Excess Cash Flow for such Applicable Period not
         theretofore used for any other purpose permitted by any of this
         Section 13.04 or Section 6.26, 7.07, 7.14, 7.15 or 11.05 and (b) such
         Restricted Payment is not made until after the prepayment required by
         the first sentence of this Section 11.05 is made in respect of such
         Applicable Period and (ii) the Customer shall not, and shall not
         permit any of its Subsidiaries to, make Restricted Payments in respect
         of any Applicable Period consisting of a full fiscal year unless the
         aggregate amount of all Restricted Payments by the Customer and all of
         its Subsidiaries for such fiscal year is less than or equal to
         Unrestricted Excess Cash Flow for such fiscal year not used for any
         other purpose.

1.135    FINANCIAL COVENANTS.  If the Customer shall have been determined to be
         a Category 3 Customer, then the Customer covenants and agrees that,
         from and after the Conversion Date and for so long as AEF shall have
         any Commitment hereunder, or any Loan or other amount shall remain
         unpaid, unless AEF waives compliance in writing, the Customer shall
         not:




                                      -3-

<PAGE>   146



         (a)      INTEREST COVERAGE RATIO.  Permit its ratio of EBITDA to Total
                  Interest for any period of four (4) fiscal quarters of the
                  Customer ending on a Measuring Date to be less than:

<TABLE>
                  <S>                                                                 <C>
                  at any time after the first anniversary and
                  on or prior to the second anniversary of
                  the Conversion Date,                                                 1 to 1

                  at any time after the second anniversary
                  and on or prior to the third anniversary
                  of the Conversion Date,                                             1.5 to 1

                  at any time after the third anniversary
                  and on or prior to the fourth anniversary
                  of the Conversion Date,                                              2 to 1

                  at any time after the fourth anniversary
                  and on or prior to the fifth anniversary of
                  the Conversion Date, and                                            2.5 to 1

                  at any time thereafter                                               3 to 1
</TABLE>



         (b)      DEBT SERVICE COVERAGE RATIO.  Permit its ratio of EBITDA to
                  P&I Debt Service for any period of four (4) fiscal quarters
                  of the Customer ending on a Measuring Date to be less than:

<TABLE>
                  <S>                                                                 <C>
                  at any time after the first anniversary and
                  on or prior to the third anniversary of the
                  Conversion Date,                                                     1 to 1

                  at any time after the third anniversary
                  and on or prior to the fourth anniversary
                  of the Conversion Date,                                             1.5 to 1

                  at any time after the fourth anniversary
                  and on or prior to the fifth anniversary of
                  the Conversion Date, and                                             2 to 1

                  at any time thereafter                                              2.5 to 1
</TABLE>





                                      -4-

<PAGE>   147



         (c)      LEVERAGE RATIO.  Permit its ratio of Indebtedness on any Test
                  Date to EBITDA for the period of four (4) fiscal quarters of
                  the Customer ended on or most recently ended prior to such
                  Test Date to exceed:

<TABLE>
                  <S>                                                                 <C>
                  at any time after the first anniversary and
                  on or prior to the second anniversary of
                  the Conversion Date,                                                 6 to 1

                  at any time after the second anniversary
                  and on or prior to the third anniversary
                  of the Conversion Date,                                             5.5 to 1

                  at any time after the third anniversary
                  and on or prior to the fourth anniversary
                  of the Conversion Date,                                              5 to 1

                  at any time after the fourth anniversary
                  and on or prior to the fifth anniversary of
                  the Conversion Date, and                                             4 to 1

                  at any time thereafter                                               3 to 1
</TABLE>

1.136    ADDITIONAL COVENANTS.  If the Customer shall have been determined to
         be a Category 3 Customer and the Loans to such Customer shall have
         Converted on the basis of a covenant limiting the ratio of debt to
         equity or any other covenants established by AEF and the Lenders
         pursuant to Section 9.01(c) as a condition to Conversion, then the
         Customer covenants and agrees to observe and comply with any and all
         such covenants which shall be incorporated into this Section 13.06 as
         provided in Section 9.01(d).



                                      -5-

<PAGE>   148



                                                                        ANNEX 4

                              LIST OF COUNTRIES

                                  Australia
                                  Austria
                                  Belgium
                                  Canada
                                  Denmark
                                  Finland
                                  France
                                  Germany
                                  Ireland
                                  Italy
                                  Japan
                                  Luxembourg
                                  Netherlands
                                  New Zealand
                                  Norway
                                  Portugal
                                  Singapore
                                  Spain
                                  Sweden
                                  Switzerland
                                  United Kingdom
                                  United States of
                                  America




<PAGE>   149



                                                                        ANNEX 5

                             ACCEPTABLE CURRENCIES


The currencies of the following countries:

Australia
Austria
Belgium
Canada
Denmark
Finland
France
Germany
Ireland
Italy
Japan
Luxembourg
Netherlands
New Zealand
Norway
Singapore
Spain
Sweden
Switzerland
United Kingdom
United States of
  America




<PAGE>   150



                                                                        ANNEX 6

                          LIST OF PERMITTED LOCATIONS


                  a)       Permitted Locations for all purposes

                           Australia
                           Austria
                           Belgium
                           Canada
                           Denmark
                           Finland
                           France
                           Germany
                           Ireland
                           Italy
                           Japan
                           Luxembourg
                           Netherlands
                           New Zealand
                           Norway
                           Portugal
                           Singapore
                           Spain
                           Sweden
                           Switzerland
                           United Kingdom
                           United States of America

                  b)       Permitted Locations for the purposes of Domicile

                           i)       Permitted Locations for the purposes of
                                    clauses (a) and (b) of the definition of
                                    "Domiciled"

                           ii)      Permitted Locations for the purposes of
                                    clause (c) of the definition of "Domiciled"

                  c)       Permitted Locations for the purposes of Licensing

                  d)       Permitted Locations for the purposes of receiving
                           revenues pursuant to Sections 4.02(h) and 4.03(f)

                  e)       Permitted Locations for the purposes of Ground
                           Facilities pursuant to Section 4.02(i)





<PAGE>   151



                  f)       Permitted Locations for the purposes of earning or
                           deriving revenues pursuant to Section 11.01 or 13.01





                                     -2-
                                     
<PAGE>   152



                                                                  SCHEDULE 5.03


                              GOVERNMENT APPROVALS




<PAGE>   153



                                                                  SCHEDULE 5.05


                                   LITIGATION




<PAGE>   154



                                                                  SCHEDULE 5.10


                           BASE FINANCIAL STATEMENTS




<PAGE>   155



                                                                  SCHEDULE 5.11


                              ENVIRONMENTAL CLAIMS




<PAGE>   156



                                                                 SCHEDULE 5.12A


                                  SUBSIDIARIES




<PAGE>   157



                                                                 SCHEDULE 5.12B


                               EQUITY INVESTMENTS




<PAGE>   158



                                                                 SCHEDULE 10.02



                             ADDRESSES FOR NOTICES


CD Radio Inc.
1001 22nd Street, N.W.
Washington, DC 10037
USA

Attention:  Mr. David Margolese

Telephone:  (202) 296-6192
Facsimile:  (202) 296-6265

Arianespace Finance S.A.
18, rue Dicks
L-1016 Luxembourg
Telephone:  33 (0)1 6087 6235
Facsimile:  33 (0)1 6087 6488
Attention:  Directeur General

with a copy to:

Arianespace S.A.
Boulevard de l'Europe - B.P. 177
91006 Evry Cedex - France
Telephone:  33 (0)1 6087 6235
Facsimile:  33 (0)1 6087 6488
Attention:  Head, Financing and Risk Management





<PAGE>   159



                                   EXHIBIT A


                           FORM OF NOTICE OF DRAWDOWN


From:             CD RADIO INC. (the "CUSTOMER")

To:               ARIANESPACE FINANCE S.A. ("AEF")

Dated:


Dear Sirs,

1.       We refer to the agreement (as from time to time amended, varied,
         novated or supplemented, the "CUSTOMER LOAN AGREEMENT") dated July
         22, 1997, and made between the Customer as borrower and AEF as lender,
         relating to Launch # 2.  Terms defined, construed or used in the
         Customer Loan Agreement shall have the same meaning in this notice.

2.       We hereby give you notice that, pursuant to the Customer Loan
         Agreement and on [insert proposed date for making Loan which shall be
         no earlier than nine (9) Business Days and no later than seven (7)
         Business Days after the date of this Notice of Drawdown], we wish to
         borrow an amount of ________________ Dollars ($[       ]) upon the
         terms and subject to the conditions contained therein.

3.       The proceeds of this drawdown:

         (a)      are to be utilized for the purposes of capitalizing interest
                  or Finance Costs; or

         (b)      should be credited into the AE Account.



                                        --------------------
                                        for and on behalf of
                                        CD RADIO INC.




<PAGE>   160



                                   EXHIBIT B


                       FORM OF ASSIGNMENT AND ACCEPTANCE

                  Reference is made to the Customer Loan Agreement dated as of
July 22, 1997 (as modified and supplemented and in effect from time to time,
the "CUSTOMER LOAN AGREEMENT"), among between CD Radio Inc., as borrower (the
"CUSTOMER") and Arianespace Finance S.A. ("AEF"), as lender, relating to Launch
# 2.  Terms defined in the Customer Loan Agreement are used herein with the
same meanings.

                  The Assignor named on the reverse hereof hereby sells and
assigns, without recourse, to the Assignee named on the reverse hereof, and the
Assignee hereby purchases and assumes, without recourse, from the Assignor,
effective as of the Assignment Date set forth on the reverse hereof, the
interests set forth on the reverse hereof (the "ASSIGNED INTEREST") in the
Assignor's rights and obligations under the Customer Loan Agreement, including,
without limitation, the interests set forth on the reverse hereof in the
Commitments of the Assignor on the Assignment Date and Loans owing to the
Assignor which are outstanding on the Assignment Date, but excluding accrued
interest and fees to and excluding the Assignment Date.  The Assignee hereby
acknowledges receipt of a copy of the Customer Loan Agreement.  From and after
the Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Customer Loan Agreement and have the rights and obligations
thereunder to the extent of the Assigned Interest and (ii) the Assignor shall,
to the extent of the Assigned Interest, relinquish its rights and be released
from its obligations under the Customer Loan Agreement.

                  This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of New York.



<PAGE>   161



Date of Assignment:

Legal Name of Assignor:

Legal Name of Assignee:

Assignee's Address for Notices:

Effective Date of Assignment
("ASSIGNMENT DATE"):


                                Percentage Assigned of

                                Commitment/Loans

                                (set forth, to at
                                                         least 8 decimals, as a
                                                         percentage of the
                                Amount
                                  facility)
          

Commitments:                    $                                %

Loans:


The terms set forth above and on the reverse side hereof are hereby agreed to:

[NAME OF ASSIGNOR], as Assignor
                        [NAME OF ASSIGNEE], as Assignee


By:
   ----------------------------         By:
                                           ----------------------------
   Name:
                                           Name:
   Title:
                                           Title:




<PAGE>   162





                                   EXHIBIT C

                                  FORM OF NOTE



FOR VALUE RECEIVED, CD RADIO INC., a company incorporated in Delaware (the
"CUSTOMER") hereby promises to pay to the order of ARIANESPACE FINANCE S.A.
("AEF") pursuant to the terms of the Customer Loan Agreement referred to below,
the principal sum [INSERT CONVERSION AMOUNT] Dollars ($[INSERT CONVERSION
AMOUNT]) (or such lesser amount as shall equal the aggregate unpaid principal
amount of the Loans made by AEF under the Customer Loan Agreement referred to
below), in lawful money of the United States of America and in immediately
available funds, on the dates and in the principal amounts provided in the
Customer Loan Agreement, and to pay interest on the unpaid principal amount of
each such Loan, in like money and funds, for the period commencing on the date
of such Loan until such Loan shall be paid in full, at the rates per annum and
on the dates provided in the Customer Loan Agreement referred to below.

This Note is the Note referred to in the Customer Loan Agreement dated as of
July 22, 1997, by and among AEF and the Customer, relating to Launch # 2 (as
amended, modified and supplemented and in effect from time to time, the
"CUSTOMER LOAN AGREEMENT"), and evidences Loans made by AEF under the Customer
Loan Agreement, the principal of and interest on such Loans being secured by
certain Security Documents.  Capitalized terms used in this Note have the
respective meanings assigned to them in the Customer Loan Agreement (whether
therein or by reference to another document).

The Customer Loan Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.

Except as permitted by Section 10.06 of the Customer Loan Agreement, this Note
may not be assigned by AEF to any other Person.





<PAGE>   163



THE DUTIES OF THE CUSTOMER UNDER THIS NOTE (INCLUDING MATTERS
RELATING TO THE MAXIMUM INTEREST RATE CHARGEABLE HEREUNDER)
SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.



CD RADIO INC.


By:    
         --------------------------------
         Name:
         Title:



Source: OneCLE Business Contracts.