TABLE OF CONTENTS

Exhibit 10.1

Execution Copy

 

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TERRESTAR NETWORKS INC.

$500,000,000 15% Senior Secured PIK Notes due 2014

INDENTURE

Dated as of February 14, 2007

U.S. BANK NATIONAL ASSOCIATION,

As Trustee

 

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TABLE OF CONTENTS

TABLE OF CONTENTS

 

          Page

ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE

   1

SECTION 1.01

  

Definitions

   1

SECTION 1.02

  

Other Definitions

   30

SECTION 1.03

  

Trust Indenture Act Provisions

   31

SECTION 1.04

  

Rules of Construction

   31

ARTICLE 2 THE SECURITIES

   32

SECTION 2.01

  

Form, Dating and Denominations

   32

SECTION 2.02

  

Execution and Authentication; Additional Notes

   33

SECTION 2.03

  

Registrar and Paying Agent

   34

SECTION 2.04

  

Paying Agent to Hold Money in Trust

   35

SECTION 2.05

  

Noteholder Lists

   36

SECTION 2.06

  

Replacement Notes

   36

SECTION 2.07

  

Outstanding Notes

   36

SECTION 2.08

  

Temporary Notes

   37

SECTION 2.09

  

Cancellation

   37

SECTION 2.10

  

CUSIP Numbers

   37

SECTION 2.11

  

Registration, Transfer and Exchange

   37

SECTION 2.12

  

Restrictions on Transfer and Exchange

   40

SECTION 2.13

  

Temporary Regulation S Global Notes

   42

SECTION 2.14

  

Defaulted Interest

   42

SECTION 2.15

  

Payment of Interest

   43

ARTICLE 3 REDEMPTION

   43

SECTION 3.01

  

Notices to Trustee

   43

SECTION 3.02

  

Selection

   43

SECTION 3.03

  

Notice

   44

SECTION 3.04

  

Effect of Notice of Redemption

   45

SECTION 3.05

  

Deposit of Redemption Price

   45

SECTION 3.06

  

Notes Redeemed in Part

   45

SECTION 3.07

  

Optional Redemption

   45

SECTION 3.08

  

No Sinking Fund

   46

SECTION 3.09

  

Repurchase Offers

   46

ARTICLE 4 AFFIRMATIVE COVENANTS

   49

SECTION 4.01

  

Reports

   49

SECTION 4.02

  

Payment of Obligations

   49

SECTION 4.03

  

Corporate Existence

   50

SECTION 4.04

  

FCC License Subsidiary; Licenses

   50

SECTION 4.05

  

Compliance Certificates

   50

 

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Table of Contents

(Continued)

 

          Page

SECTION 4.06

  

Designation of Unrestricted Subsidiaries

   50

SECTION 4.07

  

Additional Guarantees and Collateral

   51

SECTION 4.08

  

Maintenance of Insurance

   54

SECTION 4.09

  

Covenants with Respect to the Canadian Entities

   54

ARTICLE 5 NEGATIVE COVENANTS

   55

SECTION 5.01

  

Indebtedness

   55

SECTION 5.02

  

Limitation on Liens

   60

SECTION 5.03

  

Merger, Consolidation and Sale of Assets

   60

SECTION 5.04

  

Restricted Payments

   62

SECTION 5.05

  

Transactions with Affiliates

   67

SECTION 5.06

  

Limitation on Lines of Business

   69

SECTION 5.07

  

Dividend and Other Payment Restrictions Affecting Restricted Subsidiaries

   69

SECTION 5.08

  

Asset Sales and Recovery Events

   71

SECTION 5.09

  

Change of Control

   76

SECTION 5.10

  

Payments for Consent

   76

ARTICLE 6 DEFAULTS AND REMEDIES

   76

SECTION 6.01

  

Events of Default and Remedies

   76

SECTION 6.02

  

Acceleration

   79

SECTION 6.03

  

Other Remedies

   80

SECTION 6.04

  

Rescission of Acceleration; Waiver of Past Defaults

   80

SECTION 6.05

  

Control by Majority

   80

SECTION 6.06

  

Limitation on Suits

   80

SECTION 6.07

  

Rights of Holders to Receive Payment

   81

SECTION 6.08

  

Collection Suit by Trustee

   81

SECTION 6.09

  

Trustee May File Proofs of Claim

   81

SECTION 6.10

  

Priorities

   81

SECTION 6.11

  

Undertaking for Costs

   82

SECTION 6.12

  

Waiver of Stay or Extension Laws

   82

SECTION 6.13

  

Rights and Remedies Cumulative

   82

SECTION 6.14

  

Delay or Omission Not Waiver

   82

ARTICLE 7 TRUSTEE

   82

SECTION 7.01

  

Duties of Trustee

   82

SECTION 7.02

  

Rights of Trustee

   83

SECTION 7.03

  

Individual Rights of Trustee

   85

SECTION 7.04

  

Trustee’s Disclaimer

   85

SECTION 7.05

  

Notice of Defaults

   85

SECTION 7.06

  

Compensation and Indemnity

   86

 

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Table of Contents

(Continued)

 

          Page

SECTION 7.07

  

Replacement of Trustee

   87

SECTION 7.08

  

Successor Trustee by Merger, Etc.

   87

SECTION 7.09

  

Eligibility; Disqualification

   88

SECTION 7.10

  

Preferential Collection of Claims against the Issuer

   88

SECTION 7.11

  

Disqualification; Conflicting Interests

   88

SECTION 7.12

  

Acknowledgement of Trustee

   88

ARTICLE 8 DISCHARGE OF INDENTURE; DEFEASANCE

   88

SECTION 8.01

  

Legal Defeasance and Covenant Defeasance

   88

SECTION 8.02

  

Conditions to Legal or Covenant Defeasance

   89

SECTION 8.03

  

Satisfaction and Discharge of Indenture

   91

SECTION 8.04

  

Deposited Money and Government Notes to Be Held in Trust; Miscellaneous
Provisions

   92

SECTION 8.05

  

Repayment to Issuer

   92

SECTION 8.06

  

Reinstatement

   92

ARTICLE 9 AMENDMENTS

   93

SECTION 9.01

  

Without Consent of Holders

   93

SECTION 9.02

  

With Consent of Holders

   94

SECTION 9.03

  

Revocation and Effect of Consents and Waivers

   95

SECTION 9.04

  

Notation on or Exchange of Notes

   96

SECTION 9.05

  

Trustee to Sign Amendments

   96

SECTION 9.06

  

Compliance with TIA

   96

ARTICLE 10 GUARANTEES

   96

SECTION 10.01

  

Guarantee

   96

SECTION 10.02

  

Limitation on Liability

   98

SECTION 10.03

  

Successors and Assigns

   98

SECTION 10.04

  

No Waiver

   98

SECTION 10.05

  

Modification

   98

SECTION 10.06

  

Execution and Delivery of the Guarantee

   98

SECTION 10.07

  

Release of Guarantees

   99

ARTICLE 11 COLLATERAL AND SECURITY

   99

SECTION 11.01

  

Security Agreements

   99

SECTION 11.02

  

Release of Collateral

   100

SECTION 11.03

  

Certificates of the Company

   102

SECTION 11.04

  

Authorization of Actions to be Taken by the Trustee under the Security
Agreements

   103

 

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Table of Contents

(Continued)

 

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SECTION 11.05

  

Authorization of Receipt of Funds by the Trustee under the Security Agreements

   103

SECTION 11.06

  

Certain Limitations Upon Actions by the Collateral Agent

   103

ARTICLE 12 MISCELLANEOUS

   104

SECTION 12.01

  

Notices

   104

SECTION 12.02

  

Certificate and Opinion as to Conditions Precedent

   105

SECTION 12.03

  

Statements Required in Certificate or Opinion

   105

SECTION 12.04

  

When Notes Disregarded

   105

SECTION 12.05

  

Rules by Trustee, Paying Agent and Registrar

   105

SECTION 12.06

  

Legal Holidays

   106

SECTION 12.07

  

GOVERNING LAW

   106

SECTION 12.08

  

No Recourse Against Others

   106

SECTION 12.09

  

Successors

   106

SECTION 12.10

  

Multiple Originals

   106

SECTION 12.11

  

Table of Contents; Headings

   106

SECTION 12.12

  

Severability

   106

SECTION 12.13

  

No Adverse Interpretation of Other Agreements

   106

SECTION 12.14

  

Trust Indenture Act Controls

   106

SECTION 12.15

  

Communications by Holders with other Holders

   107

SECTION 12.16

  

Submission to Jurisdiction; Agent for Service of Process

   107

 

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EXHIBITS

 

EXHIBIT A   FORM OF NOTE EXHIBIT B   DTC LEGEND EXHIBIT C   REGULATION S LEGEND
EXHIBIT D   RULE 144A LEGEND EXHIBIT E   REGULATION S CERTIFICATE EXHIBIT F  
RULE 144A CERTIFICATE EXHIBIT G   INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE
EXHIBIT H   FORM OF CERTIFICATE OF BENEFICIAL OWNERSHIP EXHIBIT I   TEMPORARY
REGULATION S GLOBAL NOTE LEGEND EXHIBIT J   FORM OF SUPPLEMENTAL INDENTURE
EXHIBIT K   FORM OF U.S. SECURITY AGREEMENT EXHIBIT L   FORM OF CANADIAN
SECURITY AGREEMENT EXHIBIT M   FORM OF INTERCREDITOR AGREEMENT

 

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INDENTURE dated as of February 14, 2007, among TERRESTAR NETWORKS INC., a
Delaware corporation (the “Issuer”), the guarantors from time to time party
hereto and U.S. BANK NATIONAL ASSOCIATION, a national banking association
organized under the laws of the United States (or any successor trustee, the
“Trustee”).

Each party agrees as follows for the benefit of the other parties and for the
equal and ratable benefit of the Holders of (i) the Issuer’s Senior Secured PIK
Notes due 2014 issued on the Issue Date and (ii) any Additional Notes (as
defined herein) that may be issued on any other issue date:

ARTICLE 1

DEFINITIONS AND INCORPORATION BY REFERENCE

SECTION 1.01 Definitions.

“2 GHz MSS S-Band Spectrum”: any spectrum between 1 GHz and 3 GHz that can be
used to provide mobile satellite service.

“Acquired Debt”: with respect to any specified Person,

 

  (1) Indebtedness of any other Person existing at the time such other Person is
merged with or into or became a Subsidiary of such specified Person, whether or
not such Indebtedness is incurred in connection with, or in contemplation of,
such other Person merging with or into, or becoming a Subsidiary of, such
specified Person; and

 

  (2) Indebtedness secured by a Lien encumbering any asset acquired by such
specified Person.

“Additional Assets”:

 

  (1) all or substantially all of the assets of another Permitted Business;

 

  (2) Capital Stock of another Permitted Business if the Permitted Business is
or, after giving effect to such acquisition, becomes a Restricted Subsidiary of
the Issuer;

 

  (3) capital expenditures relating to an asset used or useful in a Permitted
Business; or

 

  (4) other assets that are not classified as current assets under GAAP and that
are used or useful in a Permitted Business.

“Additional Notes”: any Notes issued under this Indenture in addition to the
Initial Notes, having the same terms in all respects as the Initial Notes except
that interest will accrue on the Additional Notes from their issue date.

“Additional Secured Obligations”: Pari Passu Indebtedness of the Issuer or any
Restricted Subsidiary permitted to be incurred under clauses (1) and (16) of
Section 5.01(b) and

 

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designated in writing by the Issuer as Indebtedness to be secured on a pari
passu basis by a Lien granted to the Collateral Agent on the Collateral which is
permitted by this Indenture; provided that the representative of such Additional
Secured Obligations executes the Intercreditor Agreement agreeing to be bound
thereby.

“Affiliate”: with respect to any specified Person, any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise; provided that beneficial ownership of 10% or more of the
Voting Stock of a Person shall be deemed to be control. For purposes of this
definition, the terms “controlling,” “controlled by” and “under common control
with” have correlative meanings.

“Agent”: any Registrar, Paying Agent or Authenticating Agent.

“Agent Member”: a member of, or a participant in, the Depositary.

“Applicable Premium”: with respect to a Note at any date of redemption, the
greater of (i) 1.0% of the principal amount of such Note and (ii) the excess of
(A) the present value at such date of redemption of (1) the principal amount of
such Note at February 15, 2014 plus (2) all remaining required interest payments
due on such Note through February 15, 2014 (excluding accrued but unpaid
interest to the date of redemption), computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the principal amount of such Note.

“Asset Sale”:

 

  (1) the sale, lease, conveyance or other disposition of any assets or rights;
provided that the sale, lease, conveyance or other disposition of all or
substantially all of the assets of the Issuer and its Restricted Subsidiaries
taken as a whole will be governed by Sections 5.03 and 5.09 and not by
Section 5.08; and

 

  (2) the issuance of Equity Interests in any of the Issuer’s Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries.

Notwithstanding the preceding, none of the following items will be deemed to be
an Asset Sale:

 

  (1) any single transaction or series of related transactions that involves
assets having a fair market value of less than $10.0 million;

 

  (2)

a disposition of assets between or among the Issuer and any Guarantors; provided
that in the case of a sale of Collateral, the transferee shall cause such
amendments, supplements or other instruments to be executed, filed, and recorded
in such jurisdictions as may be required by applicable law to preserve and
protect the Lien on the Collateral owned by or transferred to the transferee,
together with such financing statements or comparable documents as may be
required to perfect any security interests in such Collateral which may be
perfected by the filing of a

 

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financing statement or a similar document under the Uniform Commercial Code or
other similar statute or regulation of the relevant states or jurisdictions;

 

  (3) a transfer of assets between or among Restricted Subsidiaries that are not
Guarantors or from a Restricted Subsidiary that is not a Guarantor to the Issuer
or a Guarantor;

 

  (4) an issuance of Equity Interests by a Restricted Subsidiary of the Issuer
to the Issuer or to another Restricted Subsidiary of the Issuer;

 

  (5) the sale, lease or other disposition of equipment, inventory or products
in the ordinary course of business and any sale or other disposition of damaged,
worn-out, uneconomic or obsolete assets in the ordinary course of business;

 

  (6) the creation of a Permitted Lien and dispositions in connection with
Permitted Liens;

 

  (7) the licensing or sublicensing of intellectual property or other general
intangibles and licenses, leases or subleases of other property;

 

  (8) foreclosure on assets, except to the extent that the value of the assets
exceeds the amount of the obligation secured;

 

  (9) the sale or other disposition of cash or Cash Equivalents; provided that,
if such cash or Cash Equivalents arise as the result of an Asset Sale or
Recovery Event, such sale or disposition is in accordance with the provisions of
this Indenture;

 

  (10) the sale or other disposition of Equity Interests in Unrestricted
Subsidiaries;

 

  (11) a Restricted Payment that is permitted by Section 5.04 or a Permitted
Investment; and

 

  (12) any transfer contemplated by the Transfer Agreements.

“Attributable Debt”: in respect of a Sale/Leaseback Transaction, at the time of
determination, the present value of the obligation of the lessee for net rental
payments during the remaining term of the lease included in such Sale/Leaseback
Transaction including any period for which such lease has been extended or may,
at the option of the lessor, be extended. Such present value shall be calculated
using a discount rate equal to the rate of interest implicit in such
transaction, determined in accordance with GAAP; provided, however, that if such
Sale/Leaseback Transaction results in a Capital Lease Obligation, the amount of
Indebtedness represented thereby will be determined in accordance with the
definition of “Capital Lease Obligation.”

“Authenticating Agent”: a Person engaged to authenticate the Notes in the stead
of the Trustee.

 

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“Bankruptcy Law”: Title 11, United States Code, or any similar federal or state
law for the relief of debtors.

“Beneficial Owner”: as defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act, except that in calculating the beneficial ownership of any particular
“person” (as that term is used in Section 13(d)(3) of the Exchange Act), such
“person” will be deemed to have beneficial ownership of all securities that such
“person” has the right to acquire by conversion or exercise of other securities,
whether such right is currently exercisable, or is exercisable only upon the
occurrence of a subsequent condition. The term “Beneficially Own” has a
corresponding meaning.

“Board of Directors”:

 

  (1) with respect to a corporation, the board of directors of the corporation
or any committee thereof duly authorized to act on behalf of such Person;

 

  (2) with respect to a partnership, the board of directors of the general
partner of the partnership;

 

  (3) with respect to a limited liability company, the managing member or
members or any controlling committee of managing members thereof; and

 

  (4) with respect to any other Person, the board of directors or committee of
such Person serving a similar function.

“Business Day”: each day that is not a Saturday, Sunday or other day on which
banking institutions in New York, New York are authorized or required by law to
close.

“Canadian Entities”: TerreStar Canada Holdings and TerreStar Canada.

“Canadian Communications Statutes”: the Radiocommunication Act (Canada), the
Telecommunications Act (Canada) and the rules, regulations, policies and
decisions of Industry Canada and the Canadian Radio–television and
Telecommunications Commission promulgated or made thereunder.

“Canadian Security Agreement”: the Security Agreement dated of even date
herewith by the Canadian Entities in favor of the Collateral Agent,
substantially in the form attached hereto as Exhibit L.

“Capital Lease Obligation”: at the time any determination is to be made, the
amount of the liability in respect of a capital lease that would at that time be
required to be capitalized on a balance sheet prepared in accordance with GAAP,
and the Stated Maturity thereof shall be the date of the last payment of rent or
any other amount due under such lease prior to the first date upon which such
lease may be prepaid by the lessee without payment of a penalty.

 

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“Capital Stock”:

 

  (1) in the case of a corporation, corporate stock;

 

  (2) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock;

 

  (3) in the case of a partnership or limited liability company, partnership or
membership interests (whether general or limited); and

 

  (4) any other interest or participation that confers on a Person the right to
receive a share of the profits and losses of, or distributions of assets of, the
issuing Person, but excluding from all of the foregoing any debt securities
convertible into Capital Stock, whether or not such debt securities include any
right of participation with Capital Stock.

“Cash Equivalents”:

 

  nited States dollars and in the case of any Foreign Subsidiary that is a
Restricted Subsidiary, such local currencies held by them from time to time in
the ordinary course of business;

 

  (2) securities issued or directly and fully guaranteed or insured by the
United States or the Canadian government or any agency or instrumentality of the
United States or the Canadian government (provided that the full faith and
credit of the United States or Canada, as applicable, is pledged in support of
those securities) having maturities of not more than twelve months from the date
of acquisition;

 

  (3) marketable general obligations issued by any state of the United States or
province of Canada, or any political subdivision of any such state or province
or any public instrumentality thereof maturing within one year from the date of
acquisition (provided that the full faith and credit of the United States or
Canada, as applicable, is pledged in support thereof) and, at the time of
acquisition, having a credit rating of “A” or better from either S&P or Moody’s;

 

  (4) certificates of deposit and eurodollar time deposits with maturities of
twelve months or less from the date of acquisition, bankers’ acceptances with
maturities not exceeding twelve months and overnight bank deposits with any U.S.
domestic or Canadian commercial bank having capital and surplus in excess of
$500.0 million and a Thomson Bank Watch Rating of “B” or better;

 

  (5) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clauses (2), (3) and (4) above
entered into with any financial institution meeting the qualifications specified
in clause (3) above;

 

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  (6) commercial paper having a rating of at least A-3 from Moody’s Investors
Service, Inc. or P-3 from Standard & Poor’s Rating Services and in each case
maturing within nine months after the date of acquisition; and

 

  (7) money market funds at least 95% of the assets of which constitute Cash
Equivalents of the kinds described in clauses (1) through (6) of this
definition.

“Certificate of Beneficial Ownership”: a certificate substantially in the form
of Exhibit H.

“Certificated Note”: a Note in registered individual form without interest
coupons.

“Change of Control”: the occurrence of any of the following:

 

  (1) the direct or indirect sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in one or a series
of related transactions, of all or substantially all of the properties or assets
of the Issuer and its Restricted Subsidiaries taken as a whole to any “person”
(as that term is used in Section 13(d)(3) of the Exchange Act) other than a
Permitted Holder;

 

  (2) the adoption of a plan relating to the liquidation or dissolution of the
Issuer;

 

  (3) any “person” (as that term is used in Section 13(d)(3) of the Exchange
Act) becomes the Beneficial Owner, directly or indirectly, of more than 50% of
the Voting Stock of Motient or the Issuer, other than a Permitted Holder,
measured by voting power rather than number of shares; or

 

  (4) the first day on which a majority of the members of the Board of Directors
of the Issuer are not Continuing Directors.

“Collateral”: all property and assets, whether now owned or hereafter acquired,
in which Liens are, from time to time, purported to be granted to secure the
Notes pursuant to the terms of the Security Agreements or any other Collateral
Documents.

“Collateral Agent”: U.S. Bank National Association, acting as the Collateral
Agent under the Collateral Documents.

“Collateral Documents”: the Security Agreements, the mortgages, deeds of trust,
deeds to secure debt, security agreements, pledge agreements, agency agreements
and other instruments and documents executed and delivered pursuant to this
Indenture or any of the foregoing, as the same may be amended, supplemented or
otherwise modified from time to time and pursuant to which Collateral is
pledged, assigned or granted to or on behalf of the Collateral

 

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Agent for the ratable benefit of the Holders of the Notes and the Additional
Secured Obligations and the Trustee or notice of such pledge, assignment or
grant is given.

“Commission”: the Securities and Exchange Commission or any successor agency.

“Consolidated EBITDA”: for any period means, without duplication, the
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income:

 

  (1) Consolidated Interest Expense; plus

 

  (2) Consolidated Income Taxes; plus

 

  (3) consolidated depreciation expense; plus

 

  (4) consolidated amortization expense or impairment charges recorded in
connection with the application of Financial Accounting Standard No. 142
“Goodwill and Other Intangibles” and Financial Accounting Standard No. 144
“Accounting for the Impairment or Disposal of Long Lived Assets”; plus

 

  (5) the amount of any restructuring charges or reserves (including, without
limitation, for retention, severance, contract termination costs, and costs to
consolidate facilities and relocate employees); plus

 

  (6) other non-cash charges reducing Consolidated Net Income (excluding any
such non-cash charge to the extent it represents amortization of a prepaid cash
expense that was paid in a prior period not included in the calculation); plus

 

  (7) any net gain resulting from Hedging Obligations; less

 

  (8) non-cash items increasing Consolidated Net Income of such Person for such
period (excluding any items which represent the reversal of any accrual of, or
reserve for, anticipated cash charges made in any prior period); less

 

  (9) any net loss resulting from Hedging Obligations.

Notwithstanding the preceding sentence, clauses (2) through (7) relating to
amounts of a Restricted Subsidiary of a Person will be added to Consolidated Net
Income to compute Consolidated EBITDA of such Person only to the extent (and in
the same proportion) that the net income (loss) of such Restricted Subsidiary
was included in calculating the Consolidated Net Income of such Person and, to
the extent the amounts set forth in clauses (2) through (7) are in excess of
those necessary to offset a net loss of such Restricted Subsidiary or if such
Restricted Subsidiary has net income for such period included in Consolidated
Net Income, only if a corresponding amount would be permitted at the date of
determination to be dividended to the Issuer by such Restricted Subsidiary
without prior approval (that has not been obtained), pursuant to the terms of
its charter and all agreements, instruments, judgments, decrees, orders,
statutes, rules and governmental regulations applicable to that Restricted
Subsidiary or its stockholders.

 

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“Consolidated Income Taxes”: with respect to any Person for any period, taxes
imposed upon such Person or other payments required to be made by such Person by
any governmental authority which taxes or other payments are calculated by
reference to the income or profits (including franchise taxes) of such Person or
such Person and its Restricted Subsidiaries (to the extent such income or
profits were included in computing Consolidated Net Income for such period),
regardless of whether such taxes or payments are required to be remitted to any
governmental authority.

“Consolidated Interest Expense”: for any period, the total interest expense of
the Issuer and its consolidated Restricted Subsidiaries, whether paid or
accrued, plus, (a) to the extent not included in such interest expense:

 

  (1) interest expense attributable to Capital Lease Obligations and the
interest component of any deferred payment obligations;

 

  (2) amortization of original issue discount, non-cash interest payments (other
than imputed interest as a result of purchase accounting);

 

  (3) commissions, discounts and other fees and charges owed with respect to
letters of credit and bankers’ acceptance financing;

 

  (4) the interest expense on Indebtedness of another Person that is Guaranteed
by such Person or one of its Restricted Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries;

 

  (5) costs associated with Hedging Obligations (excluding amortization of fees)
provided, however, that if Hedging Obligations result in net benefits rather
than costs, such benefits shall be credited to reduce Consolidated Interest
Expense unless, pursuant to GAAP, such net benefits are otherwise reflected in
Consolidated Net Income;

 

  (6) the consolidated interest expense of such Person and its Restricted
Subsidiaries that was capitalized during such period, whether paid or accrued;

 

  (7) the product of (a) all dividends paid or payable, in cash, Cash
Equivalents or Indebtedness or accrued during such period on any series of
Disqualified Stock of such Person or on preferred stock of its Restricted
Subsidiaries that are not Guarantors payable to a party other than the Company
or a wholly-owned Subsidiary, times (b) a fraction, the numerator of which is
one and the denominator of which is one minus the then current combined federal,
state, provincial and local statutory tax rate of such Person, expressed as a
decimal, in each case, on a consolidated basis and in accordance with GAAP; and

 

  (8) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than the Issuer and its Restricted
Subsidiaries) in connection with Indebtedness incurred by such plan or trust;

 

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less (b) interest income actually received in cash for such period.

Notwithstanding anything to the contrary contained herein, commissions,
discounts, yield and other fees and charges Incurred in connection with any
transaction pursuant to which the Issuer or its Restricted Subsidiaries may
sell, convey or otherwise transfer or grant a security interest in any accounts
receivable or related assets shall be included in Consolidated Interest Expense.

“Consolidated Net Income”: with respect to any Person for any period, the
aggregate of the Net Income of such Person and its Restricted Subsidiaries for
such period, on a consolidated basis, determined in accordance with GAAP;
provided that:

 

  (1) the Net Income (but not loss) of any specified Person that is not a
Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
similar distributions paid in cash to the specified Person or a Restricted
Subsidiary of such Person;

 

  (2) the Net Income of any Restricted Subsidiary (other than a Guarantor) shall
be excluded to the extent that the declaration or payment of dividends or
similar distributions by that Restricted Subsidiary of that Net Income is not at
the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Restricted
Subsidiary or its shareholders or members, except as permitted by Section 5.07;
and

 

  (3) the cumulative effect of a change in accounting principles shall be
excluded (effected either through cumulative effect adjustment or a retroactive
application, in each case in accordance with GAAP).

Notwithstanding the foregoing, for the purpose of Section 5.04 only (other than
clause (3)(c) thereof), there shall be excluded from Consolidated Net Income any
income arising from any sale or other disposition of Restricted Investments made
by the Issuer and its Restricted Subsidiaries, in each case only to the extent
such amounts increase the amount of Restricted Payments permitted under such
covenant pursuant to clause (3)(c) thereof.

“Consolidated Total Assets”: the total assets of the Issuer and its consolidated
Restricted Subsidiaries, as shown on the most recent balance sheet of the
Issuer, determined on a consolidated basis in accordance with GAAP.

“Continuing Directors”: as of any date of determination, any member of the Board
of Directors of the Issuer who:

 

  (1) was a member of such Board of Directors on the Issue Date; or

 

  (2) was nominated for election or elected to such Board of Directors with the
approval of a majority of the Continuing Directors who were members of such
Board of Directors at the time of such nomination or election or by the
Permitted Holders.

 

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“Corporate Trust Office”: the office of the Trustee specified in Section 12.01
or any other office specified by the Trustee from time to time pursuant to such
Section.

“Credit Facilities”: with respect to the Issuer or any Restricted Subsidiary,
one or more debt facilities, commercial paper facilities or Debt Issuances with
banks, investment banks, insurance companies, mutual funds, other institutional
lenders, institutional investors or any of the foregoing providing for revolving
credit loans, term loans, receivables financing (including through the sale of
receivables to such lenders, other financiers or to special purpose entities
formed to borrow from (or sell such receivables to) such lenders or other
financiers against such receivables), letters of credit, bankers’ acceptances,
other borrowings or Debt Issuances, in each case, as amended, restated,
modified, renewed, extended, refunded, replaced or refinanced (in each case,
without limitation as to amount), in whole or in part, from time to time
(including through one or more Debt Issuances) and any agreements and related
documents governing Indebtedness or Obligations incurred to refinance amounts
then outstanding or permitted to be outstanding, whether or not with the
original administrative agent, lenders, investment banks, insurance companies,
mutual funds, other institutional lenders, institutional investors or any of the
foregoing and whether provided under the original agreement, indenture or other
documentation relating thereto).

“Debt Issuances”: with respect to the Issuer or any Restricted Subsidiary, one
or more issuances after the Issue Date of Indebtedness evidenced by notes,
debentures, bonds or other similar securities or instruments.

“Default”: any event that is, or with the passage of time or the giving of
notice or both would be, an Event of Default.

“Depositary”: the depositary of each Global Note, which will initially be DTC.

“Designated Equity Contributions”: Net Proceeds received by the Issuer (to the
extent the net proceeds thereof are contributed to the equity capital of the
Issuer (other than in the form of Disqualified Stock) or are used to purchase
Capital Stock of the Issuer (other than Disqualified Stock)) from the issuance
or sales of its Capital Stock (other than Disqualified Stock) subsequent to the
Issue Date and designated in an Officer’s Certificate as Designated Equity
Contributions executed by the principal financial officer of the Issuer.

“Designated Equity Election”: the delivery to the Trustee of an Officer’s
Certificate stating that the Issuer elects to include Designated Equity
Contributions in Section 5.04(a)(4)(C)(ii).

“Disqualified Stock”: any Capital Stock that, by its terms (or by the terms of
any security into which it is convertible, or for which it is exchangeable, in
each case at the option of the holder of the Capital Stock), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
of the Capital Stock, in whole or in part, prior to the date that is 91 days
after the date on which the Notes mature. Notwithstanding the preceding
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would constitute Disqualified Stock solely because the holders of the Capital
Stock have the right to require the Issuer to repurchase such Capital Stock upon
the occurrence of a change of control or an asset sale will not constitute
Disqualified Stock if the terms of such Capital Stock provide that the Issuer
may not repurchase or redeem any such Capital Stock pursuant to such provisions
unless such repurchase or redemption complies with Section 5.04.

“Domestic Subsidiary”: any Restricted Subsidiary of the Issuer that was formed
under the laws of the United States or any state of the United States or the
District of Columbia.

“DTC”: The Depository Trust Company, a New York corporation, and its successors.

“DTC Legend”: the legend set forth in Exhibit B.

“Equity Interests”: Capital Stock and all warrants, options or other rights to
acquire Capital Stock (but excluding any debt security that is convertible into,
or exchangeable for, Capital Stock).

“Equity Offering”: any public offering for cash on a primary basis by the Issuer
(or of any direct or indirect parent of the Issuer to the extent the Net
Proceeds therefrom are contributed to the equity capital of the Issuer) of
Capital Stock (other than Disqualified Stock) after the Issue Date, other than
(a) any issuance pursuant to employee benefit plans or otherwise in compensation
to officers, directors or employees or (b) any offering of Capital Stock issued
in connection with a transaction that constitutes a Change of Control.

“Event of Default”: any of the events specified in Section 6.01; provided that
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

“Exchange Act”: the Securities Exchange Act of 1934, as amended.

“Excluded Property”: as set forth in the Security Agreements.

“Existing Indebtedness”: Indebtedness of the Issuer and the Restricted
Subsidiaries in existence on the Issue Date, until such amounts are repaid.

“FCC”: the U.S. Federal Communications Commission, or any successor thereto.

“FCC License”: any license, authorization, approval, or permit granted by the
FCC pursuant to the Communications Act of 1934, as amended, to the Issuer or its
Subsidiaries.

“FCC License Subsidiary”: a wholly-owned subsidiary of the Issuer which will be
organized after the Issue Date to hold any and all of the Issuer’s FCC Licenses.

“Foreign Subsidiary”: any Restricted Subsidiary of the Issuer that is not a
Domestic Subsidiary.

“Full In-Orbit Insurance”: insurance coverage of satellites following the period
of time that is customarily covered by launch insurance that provides coverage
against partial losses, constructive total losses and complete losses.

 

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“GAAP”: generally accepted accounting principles set forth in the opinions and
pronouncements of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board of the Public Company Accounting Oversight Board or
in such other statements by such other entity as have been approved by a
significant segment of the accounting profession in the United States, which are
in effect from time to time.

“Global Note”: a Note in registered global form without interest coupons.

“Government Notes”: non-redeemable, direct obligations (or certificates
representing an ownership interest in such obligations) of, or obligations
guaranteed by, the United States of America (including any agency or
instrumentality thereof) for the payment of which guarantee or obligations the
full faith and credit of the United States is pledged.

“Guarantee”: a guarantee other than by endorsement of negotiable instruments for
collection in the ordinary course of business, direct or indirect, in any manner
including by way of a pledge of assets or through letters of credit or
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness (whether arising by virtue of partnership arrangements, or by
agreements to keep-well, to purchase assets, goods, securities or services, to
take or pay or to maintain financial statement conditions or otherwise).

Unless the context otherwise indicates, “Guarantee” shall mean a guarantee by a
Guarantor of the Issuer’s payment Obligations pursuant to the terms of this
Indenture and the Notes.

“Guarantor”: any Person that guarantees the Notes; provided that upon the
release or discharge of such Person from its Guarantee in accordance with the
provisions of this Indenture, such Person shall cease to be a Guarantor.

“Hedging Obligations”: with respect to any specified Person, the obligations of
such Person incurred in the ordinary course of business and not for speculative
purposes under:

 

  (1) interest rate swap agreements (whether from fixed to floating or from
floating to fixed), interest rate cap agreements and interest rate collar
agreements;

 

  (2) foreign exchange contracts and currency protection agreements entered into
with one of more financial institutions and designed to protect the person or
entity entering into the agreement against fluctuations in currency exchanges
rates with respect to Indebtedness incurred; and

 

  (3) other agreements or arrangements designed to protect such Person against
fluctuations in interest rates or currency exchange rates.

“Holder” or “Noteholder”: the Person in whose name a Note is registered on the
Registrar’s books.

 

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“Indebtedness”: (without duplication), with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:

 

  (1) in respect of borrowed money;

 

  (2) evidenced by bonds, notes, debentures or similar instruments;

 

  (3) in respect of letters of credit, banker’s acceptances or other similar
instruments;

 

  (4) representing Capital Lease Obligations and Attributable Debt;

 

  (5) representing the balance deferred and unpaid of the purchase price of any
property or services due more than 12 months after such property is acquired or
such services are completed;

 

  (6) all obligations of such Person with respect to the redemption, repayment
or other repurchase of any Disqualified Stock or, with respect to any Subsidiary
that is not a Guarantor, any preferred stock (but excluding, in each case, any
accrued dividends); or

 

  (7) representing any Hedging Obligations;

provided, however, that Indebtedness shall be deemed not to include
(1) Guarantees incurred in the ordinary course of business and not in respect of
borrowed money; (2) obligations to make payments to one or more insurers under
satellite insurance policies in respect of premiums or the requirement to remit
to such insurer(s) a portion of the future revenues generated by a satellite
which has been declared a constructive total loss, in each case in accordance
with the terms of the insurance policies relating thereto; (3) any obligations
to make progress or incentive payments under any satellite manufacturing
contract or to make payments under satellite launch contracts in respect of
launch services provided thereunder, in each case, to the extent not overdue by
more than 90 days; (4) obligations of such Person arising from agreements of
such Person providing for indemnities, guarantees of performance, adjustments of
purchase price, contingency payment obligations based on the performance of
acquired or disposed assets or similar obligations, in each case, incurred or
assumed in connection with the acquisition or disposition of any business,
assets or Subsidiary, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or Subsidiary for
the purpose of financing such acquisition; or (5) purchase price holdbacks in
connection with purchasing in the ordinary course of business of such Person;
provided, however, that: (a) in the case of clauses (1) and (4), such
obligations are not reflected on the balance sheet of such Person (contingent
obligations referred to in a footnote to financial statements and not otherwise
reflected on the balance sheet will not be deemed to be reflected on such
balance sheet for purposes of this definition); (b) in the case of clauses
(2) and (3), such amounts are not required by GAAP to be treated as indebtedness
on the balance sheet of such Person; and (c) in the case of clause (4), the
maximum assumable liability in respect of all such obligations shall at no time
exceed the gross proceeds including non-cash proceeds (the fair market value of
such non-cash proceeds being

 

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measured at the time received and without giving effect to any subsequent
changes in value) actually received by such Person in connection with such
disposition.

In addition, the term “Indebtedness” includes all Indebtedness secured by a Lien
on any asset of the specified Person (whether or not such Indebtedness is
assumed by the specified Person) and, to the extent not otherwise included, the
Guarantee by the specified Person of any Indebtedness of any other Person.

The amount of any Indebtedness outstanding as of any date will be:

 

  (1) the accreted value of the Indebtedness, in the case of any Indebtedness
issued with original issue discount;

 

  (2) in the case of any Disqualified Stock of the specified Person or any
Guarantor or preferred stock of a Restricted Subsidiary that is not a Guarantor,
the repurchase price calculated in accordance with the terms of such
Disqualified Stock or preferred stock as if such Disqualified Stock or preferred
stock were repurchased on the date on which Indebtedness is required to be
determined pursuant to this Indenture; provided that if such Disqualified Stock
or preferred stock is not then permitted to be repurchased, the greater of the
liquidation preference and the book value of such Disqualified Stock or
preferred stock;

 

  (3) in the case of Indebtedness of others secured by a Lien on any asset of
the specified Person, the lesser of (A) the fair market value of such asset on
the date on which Indebtedness is required to be determined pursuant to this
Indenture and (B) the amount of the Indebtedness so secured;

 

  (4) in the case of the guarantee by the specified Person of any Indebtedness
of any other Person, the maximum liability to which the specified Person may be
subject upon the occurrence of the contingency giving rise to the obligation;

 

  (5) in the case of any Hedging Obligations, the net amount payable if such
Hedging Obligations were terminated at that time due to default by such Person
(after giving effect to any contractually permitted set-off); and

 

  (6) the principal amount of the Indebtedness, together with any interest on
the Indebtedness that is more than 30 days past due, in the case of any other
Indebtedness.

“Indenture”: this Indenture as amended or supplemented from time to time.

“Industry Canada”: the Canadian Federal Department of Industry or any successor
thereto.

“Industry Canada License”: the Approval in Principle issued by Industry Canada
to TMI Communications and Company, Limited Partnership, dated May 6, 2002, as
amended, which is to be transferred to TerreStar Canada, subject to applicable
Industry Canada approvals, and

 

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which authorizes TMI Communications and Company, Limited Partnership to operate
a 2GHz MSS satellite in a Canadian orbital position and to use associated
service, feeder link and telemetry, telecommand and control radio spectrum.

“Initial Notes”: the Notes issued on the Issue Date and any Notes issued in
replacement thereof.

“Intercreditor Agreement”: the Intercreditor Agreement substantially in the form
of Exhibit M hereto to be entered into among the Issuer, the Guarantors, the
Collateral Agent, on behalf of itself and the Holders of the Notes, and the
holders of Additional Secured Obligations (or any agent or trustee on their
behalf), as the same may be amended, supplemented or otherwise modified from
time to time.

“Invested Capital”: at any time of determination, the sum of, without
duplication, (i) total consolidated Indebtedness of the Issuer, its Restricted
Subsidiaries and, to the extent they are required to be consolidated with the
Issuer under GAAP, the Canadian Entities, in each case determined in accordance
with GAAP; (ii) cash capital contributions in the aggregate amount of $307.0
million made by Motient and its Subsidiaries other than the Issuer or any
Subsidiaries of the Issuer to the Issuer prior to the Issue Date; (iii) Net
Proceeds received by the Issuer since the Issue Date from the sale of Equity
Interests of the Issuer (other than proceeds of Disqualified Stock) or capital
contributions by Motient or any Subsidiary of Motient other than the Issuer or
any Subsidiaries of the Issuer or any other Person other than the Issuer or any
Subsidiaries of the Issuer; and (iv) in respect of the Motient Funding
Agreement, the greater of $95.0 million and (x) the sum of the amount of cash
contributed plus (y) the net value (determined as of the date of contribution
after deducting estimated expenses of sale) of shares of SkyTerra common stock
contributed to the Issuer pursuant thereto.

“Investments”: with respect to any Person, all direct or indirect investments by
such Person in other Persons (including Affiliates) in the forms of loans
(excluding Guarantees or other obligations), advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business), purchases or other acquisitions for
consideration of Indebtedness, Equity Interests or other securities, together
with all items that are or would be classified as investments on a balance sheet
prepared in accordance with GAAP. If the Issuer or any Restricted Subsidiary of
the Issuer sells or otherwise disposes of any Equity Interests of any direct or
indirect Subsidiary of the Issuer such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the
Issuer, the Issuer will be deemed to have made an Investment on the date of any
such sale or disposition in an amount equal to the fair market value of the
Equity Interests of such Subsidiary not sold or disposed of in an amount
determined as provided in Section 5.04(c). The acquisition by the Issuer or any
Restricted Subsidiary of a Person that holds an Investment in a third Person
will be deemed to be an Investment made by the Issuer or such Restricted
Subsidiary in such third Person in an amount equal to the fair market value of
the Investment held by the acquired Person in such third Person on the date of
any such acquisition in an amount determined as provided in Section 5.04(c).
Except as otherwise provided in this Indenture, the amount of an Investment will
be determined at the time the Investment is made and without giving effect to
subsequent changes in value.

 

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“IRU Agreement”: the Indefeasible Right of Use Agreement that the Issuer has
agreed to enter into with TerreStar Canada as such agreement may be modified
from time to time in a manner not materially disadvantageous to the Holders of
the Notes.

“Issue Date”: the date on which the Initial Notes are originally issued.

“Issuer”: the party named as such in this Indenture until a successor replaces
it and, thereafter, means the successor.

“Leverage Ratio”: as of any date of determination, means the ratio of:

 

  (1) the sum of the aggregate outstanding Indebtedness of the Issuer and its
Restricted Subsidiaries as of the date of calculation on a consolidated basis in
accordance with GAAP to

 

  (2) Consolidated EBITDA of the Issuer and its Restricted Subsidiaries for the
most recent fiscal quarter ended prior to the date of such determination for
which internal financial statements are available, multiplied by four;

provided, however, that:

 

  (a) if the Issuer or any Restricted Subsidiary:

 

  (i) has incurred any Indebtedness since the beginning of such period that
remains outstanding on such date of determination or if the transaction giving
rise to the need to calculate the Leverage Ratio is an incurrence of
Indebtedness, Consolidated EBITDA and Consolidated Interest Expense will be
calculated after giving effect on a pro forma basis to such Indebtedness (but
excluding any Indebtedness incurred on such date pursuant to Section 5.01(b)) as
if such Indebtedness had been incurred on the first day of such period (except
that in making such computation, the amount of Indebtedness under any revolving
credit facility outstanding on the date of such calculation will be deemed to
be:

 

  (A) the average daily balance of such Indebtedness during the relevant fiscal
quarters or such shorter period for which such facility was outstanding or

 

  (B) if such facility was created after the end of such period, the average
daily balance of such Indebtedness during the period from the date of creation
of such facility to the date of such calculation)

and the discharge of any other Indebtedness repaid, repurchased, defeased or
otherwise discharged with the proceeds of such new Indebtedness as if such
discharge had occurred on the first day of such period; or

 

  (ii)

has repaid, repurchased, defeased or otherwise discharged any Indebtedness since
the beginning of the period that is no longer

 

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outstanding on such date of determination or if the transaction giving rise to
the need to calculate the Leverage Ratio involves a discharge of Indebtedness
(in each case other than Indebtedness Incurred under any revolving credit
facility unless such Indebtedness has been permanently repaid and the related
commitment terminated), Indebtedness, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving effect on a pro
forma basis to such discharge of such Indebtedness, including with the proceeds
of such new Indebtedness, as if such discharge had occurred on the first day of
such period;

 

  (b) if since the beginning of such period the Issuer or any Restricted
Subsidiary will have made any Asset Sale or disposed of any company, division,
operating unit, segment, business, group of related assets or line of business
or if the transaction giving rise to the need to calculate the Leverage Ratio is
such an Asset Sale:

 

  (i) Indebtedness at the end of such period will be reduced by an amount equal
to the Indebtedness discharged, defeased or retired with the Net Proceeds of
such Asset Sale and the assumption of Indebtedness by the Transferee;

 

  (ii) Consolidated EBITDA for such period will be reduced by an amount equal to
Consolidated EBITDA (if positive) directly attributable to the assets which are
the subject of such Asset Sale for such period or increased by an amount equal
to the Consolidated EBITDA (if negative) directly attributable thereto for such
period; and

 

  (iii) Consolidated Interest Expense for such period will be reduced by an
amount equal to the Consolidated Interest Expense directly attributable to any
Indebtedness of the Issuer or any Restricted Subsidiary repaid, repurchased,
defeased or otherwise discharged with respect to the Issuer and its continuing
Restricted Subsidiaries in connection with such Asset Sale for such period (or,
if the Capital Stock of any Restricted Subsidiary is sold, the Consolidated
Interest Expense for such period directly attributable to the Indebtedness of
such Restricted Subsidiary to the extent the Issuer and its continuing
Restricted Subsidiaries are no longer liable for such Indebtedness after such
sale);

 

  (c) if since the beginning of such period the Issuer or any Restricted
Subsidiary (by merger or otherwise) will have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary or is
merged with or into the Issuer) or an acquisition of assets, including any
acquisition of assets occurring in connection with a transaction causing a
calculation to be made hereunder, which constitutes all or substantially all of
a company, division, operating unit, segment, business or group of related
assets or line of business, Indebtedness, Consolidated EBITDA and Consolidated
Interest Expense for such period will be calculated after giving pro forma
effect thereto (including the Incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period; and

 

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  (d) if since the beginning of such period any Person (that subsequently became
a Restricted Subsidiary or was merged with or into the Issuer or any Restricted
Subsidiary since the beginning of such period) will have incurred any
Indebtedness or discharged any Indebtedness or made any Asset Sale or any
Investment or acquisition of assets that would have required an adjustment
pursuant to clause (a), (b) or (c) above if made by the Issuer or a Restricted
Subsidiary during such period, Indebtedness, Consolidated EBITDA and
Consolidated Interest Expense for such period will be calculated after giving
pro forma effect thereto as if such Incurrence of Indebtedness or Asset Sale or
Investment occurred on the first day of such period.

The pro forma calculations will be determined in good faith by one of the
Issuer’s responsible financial or accounting officers (including the pro forma
effect of net cost savings from operating improvements or synergies reasonably
expected to result from any acquisition, merger or disposition as determined in
good faith by such officer to be realizable within 12 months following such
acquisition, merger or disposition). If any Indebtedness bears a floating rate
of interest and is being given pro forma effect, the interest expense on such
Indebtedness will be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any interest rate agreement applicable to such Indebtedness if such
interest rate agreement has a remaining term in excess of 12 months). If any
Indebtedness that is being given pro forma effect bears an interest rate at the
Issuer’s option, the interest rate shall be calculated by applying such optional
rate chosen by the Issuer.

“Lien”: with respect to any asset, any mortgage, lien, hypothec, pledge, charge,
security interest or encumbrance of any kind in respect of such asset, whether
or not filed, recorded or otherwise perfected under applicable law, including
any conditional sale or other title retention agreement or any lease in the
nature thereof.

“Moody’s”: Moody’s Investors Service, Inc. or any successor to the rating agency
business thereof.

“Mortgages”: the mortgages, deeds of trust, deeds to secure Indebtedness or
other similar documents securing Liens on the Premises, as well as the other
Collateral secured by and described in the mortgages, deeds of trust, deeds to
secure Indebtedness or other similar documents.

“Motient”: Motient Corporation, a Delaware corporation.

“Motient Funding Agreement”: the agreement to be entered into in connection with
the offering of the Notes among Motient and Motient Ventures Holding Inc. in
favor of the Issuer relating to certain funding commitments to the Issuer.

“Net Award”: any awards or proceeds in respect of any condemnation or other
eminent domain proceeding.

 

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“Net Income”: with respect to any specified Person and its Restricted
Subsidiaries, the net income (loss) of such Person, determined in accordance
with GAAP and before any reduction in respect of preferred stock dividends,
excluding, however:

 

  (1) any gain (or loss), together with any related provision for taxes on such
gain (or loss), realized in connection with (a) any Asset Sale (including
dispositions pursuant to Sale/Leaseback Transactions) or (b) the disposition of
any securities by such Person or any of its Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of its Restricted
Subsidiaries;

 

  (2) any extraordinary or non-recurring gain (or loss), together with any
related provision for taxes on such extraordinary or non-recurring gain (or
loss);

 

  (3) any after-tax effect of income (or loss), from the early extinguishment of
Indebtedness or Hedging Obligations or other derivative instruments;

 

  (4) any impairment charge or asset write-off, in each case, pursuant to GAAP
and the amortization of intangibles pursuant to GAAP;

 

  (5) any non-cash compensation expense recorded from grants of stock
appreciation or similar rights, stock options, restricted stock or other rights;
and

 

  (6) expenses related to the offering of the Notes.

“Net Insurance Proceeds”: any awards or proceeds in respect of any casualty
insurance or title insurance claim.

“Net Proceeds”: (i) with respect to any Asset Sale or Recovery Event, the
aggregate cash proceeds received by the Issuer or any of the Restricted
Subsidiaries in respect of such Asset Sale (including any cash received upon the
sale or other disposition of any non-cash consideration received in any such
Asset Sale) or any such Recovery Event (including any Net Insurance Proceeds in
respect thereof), net of the direct costs relating to such Asset Sale or
Recovery Event, including legal, accounting and investment banking fees, and
sales commissions, and any relocation expenses incurred as a result of the Asset
Sale or Recovery Event, taxes paid or payable as a result of the Asset Sale or
Recovery Event, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, amounts required to be
applied to the repayment of Indebtedness, and any reserve for adjustment in
respect of the sale price of such asset or assets established in accordance with
GAAP, and any deduction of appropriate amounts to be provided by the Issuer or
any Restricted Subsidiary as a reserve in accordance with GAAP against any
liabilities associated with the asset disposed of in such Asset Sale and
retained by the Issuer and/or any Restricted Subsidiary and (ii) with respect to
any issuance or sale of Capital Stock or Indebtedness, or any capital
contribution, the proceeds of such issuance, sale or capital contribution, net
of attorneys’ fees, accountants’ fees, underwriters’ or placement agents’ fees,
discounts or commissions and brokerage, consultant or other fees actually
incurred in connection with such issuance, sale or capital contribution, and net
of taxes paid or payable as a result thereof.

 

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“Non-Recourse Debt”: Indebtedness,

 

  (1) as to which neither the Issuer nor any of its Restricted Subsidiaries
(a) provides credit support of any kind (including any undertaking, agreement or
instrument that would constitute Indebtedness), (b) is directly or indirectly
liable as a guarantor or otherwise, or (c) is the lender;

 

  (2) no default with respect to which (including any rights that the holders of
the Indebtedness may have to take enforcement action against an Unrestricted
Subsidiary) would permit upon notice, lapse of time or both any holder of any
other Indebtedness of the Issuer or any of its Restricted Subsidiaries to
declare a default on such other Indebtedness or to cause the payment of the
Indebtedness to be accelerated or payable prior to its Stated Maturity; and

 

  (3) as to which the lenders have been notified in writing that they will not
have any recourse to the stock or assets of the Issuer or any of its Restricted
Subsidiaries.

“Noteholder”: any Holder of Notes.

“Notes”: any securities authenticated and delivered under this Indenture. From
and after the issuance of any Additional Notes (but not for purposes of
determining whether such issuance is permitted hereunder), “Notes” shall include
such Additional Notes for purposes of this Indenture. All Notes, including any
such Additional Notes, shall vote together as one series of Notes under this
Indenture.

“Obligations”: any principal, premium, if any, interest (including interest
accruing on or after the filing of any petition in bankruptcy or for
reorganization, whether or not a claim for post-filing interest is allowed in
such proceeding), penalties, fees, charges, expenses, indemnifications,
reimbursement obligations, damages, guarantees, and other liabilities or amounts
payable under the documentation governing any Indebtedness or in respect
thereto.

“Offering Memorandum”: the Issuer’s offering memorandum dated February 8, 2007
related to the offering of the Notes.

“Officers”: any of the Chairman, President, Chief Executive Officer, Treasurer,
Chief Financial Officer, Executive Vice President, Senior Vice President, Vice
President, Assistant Vice President, Secretary or Assistant Secretary.

“Officers’ Certificate”: a certificate signed by two Officers or by one Officer
and any Assistant Treasurer or Assistant Secretary of the Issuer and which
complies with the provisions of this Indenture.

“Opinion of Counsel”: a signed written opinion from legal counsel. The counsel
may be an employee of or counsel to the Issuer, any Guarantor or the Trustee. As
to matters of fact, an Opinion of Counsel may conclusively rely on an Officers’
Certificate, without any independent investigation.

 

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“Pari Passu Indebtedness”: any Indebtedness of the Issuer or any Restricted
Subsidiary that ranks pari passu in right of payment with the Notes or the
Guarantees and in the case of any Indebtedness of the Issuer or a Guarantor, is
equally and ratably secured by the Collateral.

“Permanent Regulation S Global Note”: a Regulation S Global Note that does not
bear the Temporary Regulation S Global Note Legend.

“Permitted Business”: the lines of business conducted by the Issuer and its
Restricted Subsidiaries on the Issue Date and any business incidental or
reasonably related thereto or which is a reasonable extension thereof as
determined in good faith by the Issuer’s Board of Directors and set forth in an
Officers’ Certificate delivered to the Trustee.

“Permitted Holder”: each of Motient, Motient Ventures Holding Inc. and MVH
Holdings Inc.

“Permitted Investments”:

 

  (1) any Investment in the Issuer or any Restricted Subsidiary of the Issuer;

 

  (2) any Investment in cash and Cash Equivalents;

 

  (3) any Investment by the Issuer or any Restricted Subsidiary of the Issuer in
a Person, if as a result of such Investment:

 

  (a) such Person becomes a Restricted Subsidiary of the Issuer; or

 

  (b) such Person is merged, consolidated or amalgamated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Issuer or a Restricted Subsidiary of the Issuer;

 

  (4) any Investment made as a result of the receipt of non-cash consideration
from an Asset Sale or Recovery Event that was made pursuant to and in compliance
with Section 5.08 or any non-cash consideration received in connection with a
disposition of assets excluded from the definitions of “Asset Sale” and
“Recovery Event”;

 

  (5) workers’ compensation, utility, lease and similar deposits and prepaid
expenses in the ordinary course of business and endorsements of negotiable
instruments and documents in the ordinary course of business;

 

  (6) loans or advances to employees (other than executive officers) made in the
ordinary course of business of the Issuer or such Restricted Subsidiary in an
aggregate amount not to exceed $2.5 million at any one time outstanding;

 

  (7)

any Investments received in compromise or resolution of (A) obligations of trade
creditors or customers that were incurred in the ordinary course of business of
the Issuer or any of its Restricted Subsidiaries, including

 

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pursuant to any plan of reorganization or similar arrangement upon the
bankruptcy or insolvency of any trade creditor or customer, or (B) litigation,
arbitration or other disputes with Persons who are not Affiliates;

 

  (8) Hedging Obligations;

 

  (9) advances or extensions of credit on terms customary in the industry in the
form of accounts or other receivables incurred, and loans and advances made in
settlement of such accounts receivable, all in the ordinary course of business;

 

  (10) Investments existing on the Issue Date;

 

  (11) advances, loans or extensions of credit to suppliers and vendors in the
ordinary course of business;

 

  (12) Investments in the Canadian Entities required to be made by the Issuer
under the Transfer Agreements; and

 

  (13) other Investments in any Person having an aggregate fair market value
(measured on the date each such Investment was made and without giving effect to
subsequent changes in value), when taken together with all other Investments
made pursuant to this clause (13) that are at the time outstanding, not to
exceed $10.0 million in any calendar year and $60.0 million in the aggregate
since the Issue Date.

“Permitted Liens”:

 

  (1) Liens to secure Additional Secured Obligations permitted to be incurred
under clause (1) or (16) of Section 5.01(b); provided that with the incurrence
of such Liens on assets that do not constitute Collateral, effective provision
is made to secure all payments due under this Indenture and the Notes or the
applicable Subsidiary Guarantee on an equal and ratable basis with the
additional senior secured Indebtedness so secured;

 

  (2) Liens in favor of the Issuer or any Guarantor;

 

  (3) Liens on property of a Person existing at the time such Person is merged
with or into or consolidated with the Issuer or any Restricted Subsidiary of the
Issuer or becomes a Restricted Subsidiary of the Issuer; provided that such
Liens were in existence prior to and not incurred in connection with the
contemplation of such merger or consolidation and do not extend to any assets
other than those of the Person merged into or consolidated with the Issuer or
the Restricted Subsidiary;

 

  (4) Liens on property (including Capital Stock) existing at the time of
acquisition of the property by the Issuer or any Restricted Subsidiary; provided
that such Liens were in existence prior to such acquisition and not incurred in
contemplation of such acquisition;

 

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  (5) Liens to secure the performance of statutory obligations, surety or appeal
bonds, performance bonds or other obligations of a like nature incurred in the
ordinary course of business;

 

  (6) Liens existing on the Issue Date;

 

  (7) Liens securing Hedging Obligations so long as the related Indebtedness is,
and is permitted to be under this Indenture, secured by a Lien on the same
property securing such Hedging Obligation;

 

  (8) Liens to secure Indebtedness (including Capital Lease Obligations)
permitted by clause (4), clause (5) (with respect to Indebtedness refinancing
Indebtedness initially incurred pursuant to clause (4) or clause (18)), clause
(6) or clause (18) of Section 5.01(b) covering only the assets acquired with or
financed by such Indebtedness;

 

  (9) statutory Liens or landlords and carriers’, warehouseman’s, mechanics’,
suppliers’, materialmen’s, repairmen’s or other like Liens arising in the
ordinary course of business;

 

  (10) Liens for taxes, assessments or governmental charges or claims that are
not yet delinquent or that are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if a reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor;

 

  (11) Liens incurred or deposits made in the ordinary course of business in
connection with workers’ compensation, unemployment insurance and other types of
social security, in connection with satellite construction agreements and the
related escrow agreements (including the satellite construction agreements in
existence on the Issue Date and the related escrow agreements) or in connection
with launch services agreements;

 

  (12) survey exceptions, easements or reservations of, or rights of others for,
licenses, rights-of-way, sewers, electric lines, telegraph and telephone lines
and other similar purposes, or zoning or other restrictions as to the use of
real property that were not incurred in connection with Indebtedness and that do
not in the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Person;

 

  (13) Liens created for the benefit of (or to secure) the Notes or the
Guarantees or any obligations owing to the Trustee or the Collateral Agent under
this Indenture or the Collateral Documents;

 

  (14) rights of banks to set off deposits against debts owed to said bank;

 

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  (15) Liens upon specific items of inventory or other goods and proceeds of the
Issuer or its Subsidiaries securing the Issuer’s or any Restricted Subsidiary’s
Obligations in respect of bankers’ acceptances issued or created for the account
of any such Person to facilitate the purchase, shipment or storage of such
inventory or other goods;

 

  (16) Liens securing reimbursement obligations with respect to letters of
credit which encumber documents and other property relating to such letters of
credit and the products and proceeds thereof;

 

  (17) Liens in favor of customs and revenue authorities arising as a matter of
law to secure payment of customs duties in connection with the importation of
goods;

 

  (18) Liens encumbering property or assets under construction arising from
progress or partial payments by a customer of the Issuer or any of its
Subsidiaries relating to such property or assets;

 

  (19) Liens to secure Indebtedness permitted by clause (14) of Section 5.01(b)
which lien is not applicable to any property or assets other than the property
or assets financed thereby;

 

  (20) Liens on 2 GHz S-MSS Band Spectrum in North America leased under Capital
Lease Obligations or purchased with Purchase Money Indebtedness permitted to be
incurred under clause (15) of Section 5.01(b) which lien is not applicable to
any property or assets other than the property or assets financed thereby;

 

  (21) Liens to secure any Permitted Refinancing Indebtedness permitted to be
incurred under this Indenture; provided, however, that:

 

  (a) the new Lien shall be limited to all or part of the same property and
assets that secured or, under the written agreements pursuant to which the
original Lien arose, could secure the original Lien (plus improvements and
accessions to, such property or proceeds or distributions thereof);

 

  (b) the Indebtedness secured by the new Lien is not increased to any amount
greater than the sum of (x) the outstanding principal amount, or, if greater,
committed amount, of the Permitted Refinancing Indebtedness and (y) an amount
necessary to pay any fees and expenses, including premiums, related to such
renewal, refunding, refinancing, replacement, defeasance or discharge;

 

  (22) Liens to secure any Indebtedness permitted by clause (16) of
Section 5.01(b);

 

  (23) Liens on assets of Foreign Subsidiaries to secure any Indebtedness
permitted by clause (11) of Section 5.01(b);

 

  (24) Liens securing Guarantees permitted to be incurred under clause (7) of
Section 5.01(b), to the extent such Guarantees relate to Indebtedness permitted
to be secured by clauses (1), (7), (8), (19), (20) or (21) of this definition;
and

 

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  (25) Liens securing the Notes and Guarantees.

“Permitted Refinancing Indebtedness”: any Indebtedness of the Issuer or any of
its Restricted Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease, refund or discharge
other Indebtedness of the Issuer or any of its Subsidiaries (other than
intercompany Indebtedness); provided that:

 

  (1) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased, refunded or discharged (plus all accrued interest on the
Indebtedness and the amount of all fees and expenses and premiums incurred in
connection therewith);

 

  (2) (a) if the Stated Maturity of the Indebtedness being refinanced is the
same as or earlier than the Stated Maturity of the Notes, such Permitted
Refinancing Indebtedness has a Stated Maturity no earlier than the Stated
Maturity of the Indebtedness being refinanced or (b) if the Stated Maturity of
the Indebtedness being refinanced is later than the Stated Maturity of the
Notes, such Permitted Refinancing Indebtedness has a Stated Maturity at least 91
days later than the Stated Maturity of the Notes;

 

  (3) such Permitted Refinancing Indebtedness has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased, refunded
or discharged;

 

  (4) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased, refunded or discharged is subordinated in right of payment to the
Notes or any Subsidiary Guarantee, such Permitted Refinancing Indebtedness is
subordinated in right of payment to the Notes or the Subsidiary Guarantees, as
the case may be, on terms at least as favorable to the Holders of the Notes as
those contained in the documentation governing the Indebtedness being extended,
refinanced, renewed, replaced, defeased, refunded or discharged; and

 

  (5) such Indebtedness is incurred either by the Issuer, a Guarantor or by a
Restricted Subsidiary that is the obligor on the Indebtedness being extended,
refinanced, renewed, replaced, defeased, refunded or discharged.

“Person”: any individual, corporation, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, limited liability
company or government or other entity.

 

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“Purchase Money Indebtedness”: Indebtedness,

 

  (1) consisting of the deferred purchase price of an asset, conditional sale
obligations, obligations under any title retention agreement and other purchase
money obligations, in each case where the maturity of such Indebtedness does not
exceed the anticipated useful life of the asset being financed; and

 

  (2) incurred to finance the acquisition, lease or construction by the Issuer
or a Restricted Subsidiary of such asset, including additions and improvements;

provided, however, that such Indebtedness is incurred within 180 days after the
acquisition, or the completion of construction or improvement by the Issuer or
such Restricted Subsidiary of such asset.

“Recovery Event”: any event, occurrence, claim or proceeding that results in any
Net Award or Net Insurance Proceeds of $10.0 million or more.

“Regulation S”: Regulation S under the Securities Act.

“Regulation S Certificate”: a certificate substantially in the form of Exhibit E
hereto.

“Regulation S Global Note”: a Global Note containing the Regulation S Legend and
representing Notes issued and sold pursuant to Regulation S (or Additional Notes
issued in payment of interest on any such Notes).

“Regulation S Legend”: the legend set forth in Exhibit C hereto.

“Restoration”: has the meaning ascribed to it in the applicable Collateral
Document.

“Restricted Entities”: the Restricted Subsidiaries and the Canadian Entities.

“Restricted Investment”: an Investment other than a Permitted Investment.

“Restricted Legend”: the Regulation S Legend or the Rule 144A Legend.

“Restricted Period”: the relevant 40-day distribution compliance period as
defined in Regulation S.

“Restricted Subsidiary”: with respect to a Person, any Subsidiary of the
referent Person that is not an Unrestricted Subsidiary. Unless otherwise
specified, “Restricted Subsidiary” refers to a Restricted Subsidiary of the
Issuer.

“Rule 144A”: Rule 144A under the Securities Act.

“Rule 144A Certificate”: (i) a certificate substantially in the form of
Exhibit F hereto or (ii) a written certification addressed to the Issuer and the
Trustee to the effect that the Person making such certification (x) is acquiring
such Note (or beneficial interest) for its own account or one or more accounts
with respect to which it exercises sole investment discretion and that it and

 

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each such account is a qualified institutional buyer within the meaning of
Rule 144A, (y) is aware that the transfer to it or exchange, as applicable, is
being made in reliance upon the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A, and (z) acknowledges that it has
received such information regarding the Issuer as it has requested pursuant to
Rule 144A(d)(4) or has determined not to request such information.

“Rule 144A Global Note”: a Global Note containing the Rule 144A Legend and
representing Notes issued and sold pursuant to Rule 144A of the Securities Act
(or Additional Notes issued in payment of interest on any such Notes).

“Rule 144A Legend”: the legend set forth in Exhibit D hereto.

“S&P”: Standard & Poor’s Ratings Group, Inc., or any successor to the rating
agency business thereof.

“Sale/Leaseback Transaction”: an arrangement relating to property or assets
owned by the Issuer or a Restricted Subsidiary on the Issue Date or thereafter
acquired by the Issuer or a Restricted Subsidiary whereby the Issuer or a
Restricted Subsidiary transfers such property or assets to a Person (other than
the Issuer or a Restricted Subsidiary of the Issuer) and the Issuer or a
Restricted Subsidiary leases such property or assets from such Person.

“Securities Act”: the Securities Act of 1933, as amended.

“Security Agreements”: the U.S. Security Agreement and the Canadian Security
Agreement.

“Significant Subsidiary”: any Restricted Subsidiary that would be a “significant
subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated
pursuant to the Securities Act, as such Regulation is in effect on the Issue
Date.

“SkyTerra”: SkyTerra Communications, Inc.

“Stated Maturity”: with respect to any installment of interest or principal on
any series of Indebtedness, the date on which the payment of interest or
principal was scheduled to be paid in the documentation governing such
Indebtedness as of the Issue Date, and will not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.

“Subsidiary”: with respect to any specified Person,

 

  (1)

any corporation, association or other business entity of which more than 50% of
the total voting power of shares of Capital Stock entitled (without regard to
the occurrence of any contingency and after giving effect to any voting
agreement or stockholders’ agreement that effectively transfers voting power) to
vote in the election of directors, managers or trustees of the corporation,
association or other business entity is at the time owned or

 

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controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and

 

  (2) any partnership (a) the sole general partner or the managing general
partner of which is such Person or a Subsidiary of such Person or (b) the only
general partners of which are that Person or one or more Subsidiaries of that
Person (or any combination thereof).

Unless otherwise specified, “Subsidiary” refers to a Subsidiary of the Issuer.

“Subsidiary Guarantee”: any Guarantee by a Subsidiary of the Issuer’s payment
Obligations pursuant to the terms of this Indenture and the Notes.

“Subsidiary Guarantor”: any Subsidiary of the Issuer that is a Guarantor, which
term does not refer to the Canadian Entities.

“Temporary Regulation S Global Note”: Regulation S Global Note that bears the
Temporary Regulation S Global Note Legend.

“Temporary Regulation S Global Note Legend”: the legend set forth in Exhibit I.

“TerreStar-1”: the main satellite designed for the Issuer’s communications
system and currently under construction.

“TerreStar Canada”: TerreStar Networks (Canada) Inc., a corporation incorporated
under the laws of the province of Ontario.

“TerreStar Canada Holdings”: TerreStar Networks Holdings (Canada) Inc., a
corporation incorporated under the laws of the province of Ontario.

“TerreStar Shareholders Agreement”: the Amended and Restated Shareholders
Agreement dated as of May 6, 2006 between TMI, the Issuer, TerreStar Canada
Holdings and TerreStar Canada, as amended from time to time in a manner not
materially disadvantageous to the Holders of the Notes.

“TMI”: TMI Communications and Company, Limited Partnership, a limited
partnership formed under, and governed by, the laws of the Province of Quebec,
or any successor thereto.

“Transfer Agreements”: the Master Agreement dated as of October 24, 2006 by and
among Telesat Canada, BCE Inc., the Issuer, TerreStar Canada Holdings, TerreStar
Canada, TMI Communications and Company, Limited Partnership and Motient, along
with the series of agreements attached thereto that the parties thereto have
negotiated and, subject to applicable regulatory approvals, agreed to enter
into, including a Shareholders Agreement of TerreStar Canada Holdings, a Rights
and Services Agreement, a Tax Indemnity Agreement, a TerreStar Canada Guarantee
in favor of Loral, a TerreStar Canada Guarantee in favor of the Issuer, a
security agreement, a Release and Indemnity Agreement, a Guarantee and Share
Pledge Agreement in favor of the Issuer, a Satellite Delivery Agreement, an
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Agreement and an Intellectual Property License Agreement, as such agreements may
be modified from time to time in a manner not materially disadvantageous to the
Holders.

“Treasury Rate”: the yield to maturity at the time of computation of United
States Treasury securities with a constant maturity (as compiled and published
in the most recent Federal Reserve Statistical Release H.15 (519) which has
become publicly available at least two Business Days prior to the date fixed for
redemption (or, if such Statistical Release is no longer published, any publicly
available source for similar market data)) most nearly equal to the then
remaining term of the Notes to February 15, 2014; provided, however, that if the
then remaining term of the Notes to February 15, 2014 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate will be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the then remaining term of the Notes to February 15, 2014
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year will be used.

“Trust Officer”: when used with respect to the Trustee or Paying Agent, any
officer within the corporate trust department of the Trustee or Paying Agent, as
applicable, including any vice president, assistant vice president, assistant
secretary, assistant treasurer, trust officer or any other officer of the
Trustee or Paying Agent who customarily performs functions similar to those
performed by the persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person’s
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.

“Trustee”: the party named as such in this Indenture until a successor replaces
it, and, thereafter, means the successor.

“Uniform Commercial Code”: the New York Uniform Commercial Code as in effect
from time to time.

“United States”: the United States of America.

“Unrestricted Subsidiary”: any Subsidiary of the Issuer that is designated by
the Board of Directors of the Issuer as an Unrestricted Subsidiary pursuant to a
resolution of the Board of Directors, but only to the extent that such
Subsidiary:

 

  (1) has no Indebtedness other than Non-Recourse Debt;

 

  (2) except as permitted by Section 5.05, is not party to any agreement,
contract, arrangement or understanding with the Issuer or any Restricted
Subsidiary of the Issuer unless the terms of any such agreement, contract,
arrangement or understanding are no less favorable to the Issuer or such
Restricted Subsidiary than those that might be obtained at the time from Persons
who are not Affiliates of the Issuer;

 

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  (3) is a Person with respect to which neither the Issuer nor any of its
Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe
for additional Equity Interests or (b) to maintain or preserve such Person’s
financial condition or to cause such Person to achieve any specified levels of
operating results; and

 

  (4) has not guaranteed or otherwise directly or indirectly provided credit
support for any Indebtedness of the Issuer or any of its Restricted
Subsidiaries.

“U.S. FCC Letter of Intent Authorization”: the reservation of spectrum granted
to TMI Communications and Company, Limited Partnership for a 2 GHz mobile
satellite system pursuant to a letter of intent authorization reinstated by the
FCC on June 29, 2004, as modified.

“U.S. Security Agreement”: the Security Agreement dated of even date herewith by
the Issuer and any entities that become Guarantors under this Indenture and the
Notes in the future in favor of the Collateral Agent, substantially in the form
attached hereto as Exhibit K.

“Voting Stock”: of any specified Person as of any date, the Capital Stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.

“Weighted Average Life to Maturity”: when applied to any Indebtedness at any
date, the number of years obtained by dividing:

 

  (1) the sum of the products obtained by multiplying (a) the amount of each
then remaining installment, sinking fund, serial maturity or other required
payments of principal, including payment at final maturity, in respect of the
Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth)
that will elapse between such date and the making of such payment; by

 

  (2) the then outstanding principal amount of such Indebtedness.

SECTION 1.02 Other Definitions.

 

Affiliate Transaction

   5.05(a)

Change of Control Offer

   3.09(a)

Change of Control Payment

   5.09(a)

Collateral Sale Offer

   5.08(a)(4)(i)

Covenant Defeasance

   8.01(c)

Covered Transaction

   4.09

Excess Collateral Proceeds

   5.08(a)(4)

Excess Proceeds

   5.08(b)(4)

Excess Proceeds Offer

   5.08(b)(4)(i)

Guaranteed Obligations

   10.01(a)

Indemnified Party

   7.06

Interest Step-Ups

   Notes

Issuer

   Preamble

Legal Defeasance

   8.01(b)

 

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Legal Holiday

   12.06

Offer Amount

   3.09(a)(1)(ii)

Paying Agent

   2.03

protected purchaser

   2.06

Purchase Date

   3.09(a)(1)(ii)

Register

   2.11(a)

Registrar

   2.03

Released Collateral

   11.03(a)

Repurchase Offer

   3.09(a)

Restricted Payments

   5.04(a)(4)

retiring Trustee

   7.07

Secured Obligations

   11.01(b)

Successor Person

   5.03(a)(1)

TIA

   1.03

Trustee

   Preamble

SECTION 1.03 Trust Indenture Act Provisions. Whenever this Indenture refers to a
provision of the Trust Indenture Act of 1939, as amended (the “TIA“), that
provision is incorporated by reference in and made a part of this Indenture.
This Indenture shall also include those provisions of the TIA required to be
included herein by the provisions of the Trust Indenture Reform Act of 1990. The
following TIA terms used in this Indenture have the following meanings:

“indenture securities” means the Notes;

“indenture security holder” mean a Noteholder;

“indenture to be qualified” means this Indenture;

“indenture trustee” or “institutional trustee” means the Trustee; and

“obligor” on the indenture securities means the Issuer or any other obligor on
the Notes.

All other terms used in this Indenture that are defined in the TIA, defined by
TIA reference to another stature or defined by any rule of the Commission and
not otherwise defined herein have the meanings assigned to them therein.

SECTION 1.04 Rules of Construction. Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it, and
all accounting determinations shall be made, in accordance with GAAP;

(c) “or” is not exclusive;

 

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(d) “including” means (whether or not expressly stated) “including without
limitation”;

(e) words in the singular include the plural and words in the plural include the
singular;

(f) unsecured Indebtedness shall not be deemed to be subordinate or junior to
secured Indebtedness merely by virtue of its nature as unsecured Indebtedness;

(g) all references to “principal” of the Notes include redemption price; and

(h) all exhibits are incorporated by reference herein and expressly made a part
of this Indenture.

ARTICLE 2

THE SECURITIES

SECTION 2.01 Form, Dating and Denominations.

(a) The Notes and the Trustee’s certificate of authentication will be
substantially in the form attached as Exhibit A. The terms and provisions
contained in the form of the Notes annexed as Exhibit A constitute, and are
hereby expressly made, a part of this Indenture (except as otherwise provided
herein). The Initial Notes and any Additional Notes subsequently issued under
this Indenture will have the same terms and will be treated as a single class.
The Notes may have notations, legends or endorsements required by law, rules of
or agreements with national securities exchanges to which the Issuer is subject,
or usage. Each Note will be dated the date of its authentication. The Notes will
be issuable in denominations of $2,000 in principal amount and any multiple of
$1,000 in excess thereof, except that Additional Notes issued in payment of
interest may be issued in other denominations. The Initial Notes will be issued
in the form of Global Notes.

(b) (1) Each Global Note will bear the DTC Legend.

(2) Each Regulation S Global Note will bear the Regulation S Legend and be
issued as provided in Section 2.13.

(3) Each Rule 144A Global Note will bear the Rule 144A Legend.

(4) Each Temporary Regulation S Global Note and each Additional Note issued in
payment of interest on the Regulation S Global Notes or any Temporary Regulation
S Global Note will bear the Temporary Regulation S Global Note Legend.

(c) (1) If the Issuer determines (upon the advice of counsel and such other
certifications and evidence as the Issuer may reasonably require) that a Note is
eligible for resale pursuant to Rule 144(k) under the Securities Act (or a
successor provision) and that a Restricted Legend is no longer necessary or
appropriate in order to ensure that subsequent transfers of the Note (or a
beneficial interest therein) are effected in compliance with the Securities Act,
or

 

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(2) after an Initial Note or any Additional Note is sold pursuant to an
effective registration statement under the Securities Act, the Issuer may
instruct the Trustee to cancel the Note and issue to the Holder thereof (or to
its transferee) a new Note of like tenor and amount, registered in the name of
the Holder thereof (or its transferee), that does not bear a Restricted Legend,
and the Trustee will comply with such instruction.

(d) By its acceptance of any Note bearing a Restricted Legend (or any beneficial
interest in such a Note), each Holder thereof and each owner of a beneficial
interest therein acknowledges the restrictions on transfer of such Note (and any
such beneficial interest) set forth in this Indenture and in a Restricted Legend
and agrees that it will transfer such Note (and any such beneficial interest)
only in accordance with this Indenture and such legend.

SECTION 2.02 Execution and Authentication; Additional Notes.

(a) An Officer shall execute the Notes for the Issuer by facsimile or manual
signature in the name and on behalf of the Issuer. If an Officer whose signature
is on a Note no longer holds that office at the time the Note is authenticated,
the Note will still be valid.

(b) A Note will not be valid until the Trustee manually signs the certificate of
authentication on the Note, with the signature conclusive evidence that the Note
has been authenticated under this Indenture.

(c) At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed by the Issuer to the Trustee
for authentication. The Trustee will authenticate and deliver:

(1) Initial Notes for original issue in the initial aggregate principal amount
not to exceed $500,000,000; and

(2) Additional Notes not issued in payment of interest on the Notes from time to
time for original issue in aggregate principal amounts specified by the Issuer;
provided that no Additional Notes referred to in this Section 2.02(c) shall be
issued without the written consent of the Canadian Entities,

in each case, after receipt by the Trustee of an Officers’ Certificate
specifying:

(i) the principal amount of each of the Notes to be authenticated and the date
on which the Notes are to be authenticated;

(ii) the registered Holder of each of the said Notes;

(iii) delivery instructions for each such Note;

(iv) whether the Notes are to be Initial Notes or Additional Notes;

 

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(v) in the case of Additional Notes not issued in payment of interest on the
Notes, that the issuance of such Notes does not contravene any provision of
Section 5.01;

(vi) whether the Notes are to be issued as one or more Global Notes or
Certificated Notes; and

(vii) other information the Issuer may determine to include or the Trustee may
reasonably request.

(d) The Issuer shall deliver to the Trustee and the Paying Agent, no later than
two Business Days prior to each interest payment date occurring on or prior to
February 15, 2011 (i) with respect to Notes that are in certificated form, the
required amount of new Certificated Additional Notes and an order to
authenticate and deliver such Additional Notes or (ii) with respect to Notes
that are in the form of Global Notes, an order to increase the principal amount
of such Global Notes by the relevant amount on such interest payment date (or,
if necessary, to authenticate new Global Notes executed by the Issuer with such
increased principal amounts). On each interest payment date on which the Issuer
pays interest in the form of Additional Notes, the Trustee will, at the Issuer’s
request, authenticate and deliver Additional Notes for original issuance to the
Holders of the Notes on the relevant record date, as shown in the records of the
registrar, in the aggregate principal amount required to pay such interest. Any
Additional Note so issued will be dated the applicable interest payment date,
will bear interest from and after such date, will mature on February 15, 2014
and will be governed by, and subject to the terms, provisions and conditions of,
this Indenture, except as otherwise provided herein, and will have the same
rights and benefits as the Initial Notes and will bear the same Restricted
Legend as the Note with respect to which the Additional Note is being issued,
provided that any Additional Note representing interest on any Note bearing the
Regulation S Legend shall bear the Temporary Regulation S Legend.

SECTION 2.03 Registrar and Paying Agent. The Issuer shall maintain an office or
agency where Notes may be presented for registration of transfer or for exchange
(the “Registrar”) and an office or agency where Notes may be presented for
payment (the “Paying Agent”) and where notices and demands to or upon the Issuer
in respect of the Notes and this Indenture may be served. The Registrar shall
keep a register of the Notes and of their transfer and exchange. The Issuer may
have one or more co-registrars and one or more additional paying agents. The
term “Paying Agent” includes any additional paying agent.

The Issuer shall give prompt written notice to the Trustee of the location, and
any change in the location, of any such office or agency. If at any time the
Issuer shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 12.01.

The Issuer may also from time to time designate one or more other offices or
agencies where the Notes may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations. The Issuer shall
give prompt notice to the Trustee of any such designation or rescission and of
any change in the location of any such other office or agency.

 

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The Issuer initially designates the Corporate Trust Office as such office of the
Issuer in accordance with this Section 2.03.

The Issuer shall enter into an appropriate agency agreement with any Registrar,
Paying Agent or co-registrar not a party to this Indenture. The agreement shall
implement the provisions of this Indenture that relate to such agent. The Issuer
shall notify the Trustee of the name and address of any such agent. If the
Issuer fails to maintain a Registrar or Paying Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation therefor pursuant to
Section 7.06. The Issuer may change the Registrar or Paying Agent without prior
notice to the Noteholders. The Issuer or any of its Subsidiaries may act as
Paying Agent, Registrar, co-registrar or transfer agent.

The Issuer initially appoints the Trustee as Registrar and Paying Agent in
connection with the Notes.

Upon issuance of any Global Notes, the Issuer shall appoint The Depository Trust
Company (“DTC”) to act as Depositary with respect to the Global Notes, and the
Trustee shall initially be the securities custodian with respect to any Global
Notes.

The Issuer may remove any Registrar or Paying Agent upon written notice to such
Registrar or Paying Agent and to the Trustee, provided that no such removal
shall become effective until (1) acceptance of an appointment by a successor as
evidenced by an appropriate agreement entered into by the Issuer and such
successor Registrar or Paying Agent, as the case may be, and delivered to the
Trustee or (2) notification to the Trustee that the Trustee shall serve as
Registrar or Paying Agent until the appointment of a successor in accordance
with clause (1) above. The Registrar or Paying Agent may resign at any time upon
not less than 10 Business Days’ prior written notice to the Issuer; provided,
however, that the Trustee may resign as Paying Agent or Registrar only if the
Trustee also resigns as Trustee in accordance with Section 7.07.

SECTION 2.04 Paying Agent to Hold Money in Trust. By 10:00 a.m. on each due date
of the principal and cash interest on any Note, the Issuer shall deposit with
the Paying Agent (or if the Issuer or any of its Subsidiaries is acting as
Paying Agent, segregate and hold in trust for the benefit of the Persons
entitled thereto) a sum sufficient to pay such principal and interest when so
becoming due. The Issuer shall require each Paying Agent (other than the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Noteholders or the Trustee all money held by the Paying Agent for the
payment of principal of or interest on the Notes and shall notify the Trustee in
writing of any default by the Issuer in making any such payment within one
Business Day thereof. If the Issuer or any of its Subsidiaries acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it as a
separate trust fund. The Issuer at any time may require a Paying Agent to pay
all money held by it to the Trustee and to account for any funds disbursed by
the Paying Agent. Upon complying with this Section, the Paying Agent shall have
no further liability for the money delivered to the Trustee.

 

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Any money deposited with any Paying Agent, or then held by the Issuer or a
permitted Subsidiary in trust for the payment of principal or interest on any
Note and remaining unclaimed for two years after such principal and interest has
become due and payable shall be paid to the Issuer at its request, or, if then
held by the Issuer or a permitted Subsidiary, shall be discharged from such
trust; and the Noteholders shall thereafter, as general unsecured creditors,
look only to the Issuer for payment thereof, and all liability of the Paying
Agent with respect to such money, and all liability of the Issuer or such
permitted Subsidiary as trustee thereof, shall thereupon cease.

SECTION 2.05 Noteholder Lists. The Trustee shall preserve in as current a form
as is reasonably practicable the most recent list available to it of the names
and addresses of Noteholders. If the Trustee is not the Registrar, the Issuer
shall furnish, or cause the Registrar to furnish, to the Trustee, in writing at
least five Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Noteholders.

SECTION 2.06 Replacement Notes. If a mutilated Note is surrendered to the
Registrar or if the Holder of a Note claims that the Note has been lost,
destroyed or wrongfully taken, the Issuer shall issue and the Trustee shall
authenticate a replacement Note if the requirements of Section 8-405 of the
Uniform Commercial Code are met, such that the Holder (i) notifies the Issuer or
the Trustee within a reasonable time after he has notice of such loss,
destruction or wrongful taking and the Registrar does not register a transfer
prior to receiving such notification, (ii) makes such request to the Issuer or
the Trustee prior to the Note being acquired by a protected purchaser as defined
in Section 8-303 of the Uniform Commercial Code (a “protected purchaser”) and
(iii) satisfies any other reasonable requirements of the Trustee and the Issuer
including evidence of the destruction, loss or theft of the Note. Such Holder
shall furnish an indemnity bond sufficient in the judgment of the Trustee to
protect the Issuer, the Trustee, the Paying Agent, the Registrar and any
co-registrar from any cost, expense or loss that any of them may suffer if a
Note is replaced and subsequently presented or claimed for payment. The Issuer
and the Trustee may charge the Holder for their expenses in replacing a Note
including the payment of a sum sufficient to cover any tax or other governmental
charge that may be required. In the event any such mutilated, lost, destroyed or
wrongfully taken Note has become or is about to become due and payable, the
Issuer in its discretion may pay such Note instead of issuing a new Note in
replacement thereof.

Every replacement Note is an additional obligation of the Issuer.

The provisions of this Section 2.06 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, lost, destroyed or wrongfully taken Notes.

SECTION 2.07 Outstanding Notes. Notes outstanding at any time are all Notes
authenticated by the Trustee under this Indenture (including Additional Notes)
except for those canceled by it, those delivered to it for cancellation and
those described in this Section as not outstanding. Subject to Section 12.04, a
Note does not cease to be outstanding because the Issuer or an Affiliate of the
Issuer holds the Note.

 

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If a Note is replaced pursuant to Section 2.06, it ceases to be outstanding
unless the Trustee and the Issuer receive proof satisfactory to them that the
replaced Note is held by a protected purchaser.

If the Paying Agent segregates and holds in trust, in accordance with this
Indenture, on a redemption date, repurchase date or maturity date money
sufficient to pay all principal and interest payable on that date with respect
to the Notes (or portions thereof) to be redeemed or repurchased or maturing, as
the case may be, and the Paying Agent is not prohibited from paying such money
to the Noteholders on that date pursuant to the terms of this Indenture, then on
and after that date such Notes (or portions thereof) cease to be outstanding and
interest on them ceases to accrue.

SECTION 2.08 Temporary Notes. Until definitive Notes are ready for delivery, the
Issuer may prepare and the Trustee shall authenticate and deliver temporary
Notes. Temporary Notes shall be substantially in the form of definitive Notes
but may have variations that the Issuer considers appropriate for temporary
Notes. Without unreasonable delay, the Issuer shall prepare and the Trustee
shall authenticate definitive Certificated Notes or Global Notes, as the case
may be, and deliver them in exchange for temporary Notes upon surrender of such
temporary Notes at the office or agency of the Issuer, without charge to the
Holder.

SECTION 2.09 Cancellation. The Issuer at any time may deliver Notes to the
Trustee for cancellation. The Registrar and the Paying Agent shall forward to
the Trustee any Notes surrendered to them for transfer, exchange, redemption,
purchase or payment. The Trustee and no one else shall cancel, in accordance
with the Trustee’s customary procedures, all Notes surrendered for registration
of transfer, exchange, redemption, purchase, payment or cancellation and deliver
canceled Notes to the Issuer, or if the Issuer so agrees, may destroy canceled
Notes, in accordance with the Trustee’s customary procedures. The Issuer shall
not issue new Notes to replace Notes that have been redeemed, paid or delivered
to the Trustee for cancellation. The Trustee shall not authenticate Notes in
place of canceled Notes other than pursuant to the terms of this Indenture.

SECTION 2.10 CUSIP Numbers. The Issuer in issuing the Notes may use one or more
“CUSIP” numbers (if then generally in use) and, if so, the Trustee shall use
“CUSIP” numbers in notices of redemption or purchase as a convenience to
Holders; provided, however, that any such notice may state that no
representation is made as to the correctness of such numbers either as printed
on the Notes or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Notes, and any
such redemption shall not be affected by any defect in or omission of such
numbers. The Issuer shall promptly notify the Trustee of any change in “CUSIP”
numbers.

SECTION 2.11 Registration, Transfer and Exchange.

(a) The Notes will be issued in registered form only, without interest coupons,
and the Issuer shall cause the Trustee to maintain a register (the “Register”)
of the Notes, for registering the record ownership of the Notes by the Holders
and transfers and exchanges of the Notes.

 

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(b) (1) Each Global Note will be registered in the name of the Depositary or its
nominee and, so long as DTC is serving as the Depositary thereof, will bear the
DTC Legend.

(2) Each Global Note will be delivered to the Trustee as custodian for the
Depositary. Transfers of a Global Note (but not a beneficial interest therein)
will be limited to transfers thereof in whole, but not in part, to the
Depositary, its successors or their respective nominees, except (i) as set forth
in Section 2.11(b)(4) and (ii) transfers of portions thereof in the form of
Certificated Notes may be made upon request of an Agent Member (for itself or on
behalf of a beneficial owner) by written notice given to the Trustee by or on
behalf of the Depositary in accordance with customary procedures of the
Depositary and in compliance with this Section and Section 2.12.

(3) Agent Members will have no rights under this Indenture with respect to any
Global Note held on their behalf by the Depositary, and the Depositary may be
treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as
the absolute owner and Holder of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, the Depositary or its nominee may grant proxies
and otherwise authorize any Person (including any Agent Member and any Person
that holds a beneficial interest in a Global Note through an Agent Member) to
take any action which a Holder is entitled to take under this Indenture or the
Notes, and nothing herein will impair, as between the Depositary and its Agent
Members, the operation of customary practices governing the exercise of the
rights of a Holder of any security.

(4) If (x) the Depositary notifies the Issuer that it is unwilling or unable to
continue as Depositary for a Global Note and a successor depositary is not
appointed by the Issuer within 90 days of the notice or (y) an Event of Default
has occurred and is continuing and the Trustee has received a request from the
Depositary, the Trustee will promptly exchange each beneficial interest in the
Global Note for one or more Certificated Notes in authorized denominations
having an equal aggregate principal amount registered in the name of the owner
of such beneficial interest, as identified to the Trustee by the Depositary, and
thereupon the Global Note will be deemed canceled. If such Note does not bear a
Restricted Legend, then the Certificated Notes issued in exchange therefor will
not bear a Restricted Legend. If such Note bears a Restricted Legend, then the
Certificated Notes issued in exchange therefor will bear a Restricted Legend.

(c) Each Certificated Note will be registered in the name of the Holder thereof
or its nominee.

(d) A Holder may transfer a Note (or a beneficial interest therein) to another
Person or exchange a Note (or a beneficial interest therein) for another Note or
Notes of any authorized denomination by presenting to the Trustee a written
request therefor stating the name of the proposed transferee or requesting such
an exchange, accompanied by any certification, opinion or other document
required by Section 2.12. The Trustee will promptly register any transfer or
exchange that meets the requirements of this Section by noting the same in the
register maintained by the Trustee for such purpose; provided that

(1) no transfer or exchange will be effective until it is registered in such
register; and

 

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(2) the Trustee will not be required (i) to issue, register the transfer of or
exchange any Note for a period of 15 days before a selection of Notes to be
redeemed or purchased pursuant to a Repurchase Offer, (ii) to register the
transfer of or exchange any Note so selected for redemption or purchase in whole
or in part, except, in the case of a partial redemption or purchase, that
portion of any Note not being redeemed or purchased, or (iii) if a redemption or
a purchase pursuant to a Repurchase Offer is to occur after a regular record
date but on or before the corresponding interest payment date, to register the
transfer of or exchange any Note on or after the regular record date and before
the date of redemption or purchase. Prior to the registration of any transfer,
the Issuer, the Trustee and their agents will treat the Person in whose name the
Note is registered as the owner and Holder thereof for all purposes (whether or
not the Note is overdue), and will not be affected by notice to the contrary.

From time to time the Issuer will execute and the Trustee will authenticate
additional Notes as necessary in order to permit the registration of a transfer
or exchange in accordance with this Section.

No service charge will be imposed in connection with any transfer or exchange of
any Note, but the Issuer and the Trustee/Registrar may require payment of a sum
sufficient to cover any transfer tax or similar governmental charge payable in
connection therewith (other than a transfer tax or other similar governmental
charge payable upon exchange pursuant to subsection (b)(4)).

(e) (1) Global Note to Global Note. If a beneficial interest in a Global Note is
transferred or exchanged for a beneficial interest in another Global Note, the
Trustee will (x) record a decrease in the principal amount of the Global Note
being transferred or exchanged equal to the principal amount of such transfer or
exchange and (y) record a like increase in the principal amount of the other
Global Note. Any beneficial interest in one Global Note that is transferred to a
Person who takes delivery in the form of an interest in another Global Note, or
exchanged for an interest in another Global Note, will, upon transfer or
exchange, cease to be an interest in such Global Note and become an interest in
the other Global Note and, accordingly, will thereafter be subject to all
transfer and exchange restrictions, if any, and other procedures applicable to
beneficial interests in such other Global Note for as long as it remains such an
interest.

(2) Global Note to Certificated Note. If a beneficial interest in a Global Note
is transferred or exchanged for a Certificated Note, the Trustee will (x) record
a decrease in the principal amount of such Global Note equal to the principal
amount of such transfer or exchange and (y) deliver one or more new Certificated
Notes in authorized denominations having an equal aggregate principal amount to
the transferee (in the case of a transfer) or the owner of such beneficial
interest (in the case of an exchange), registered in the name of such transferee
or owner, as applicable.

 

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(3) Certificated Note to Global Note. If a Certificated Note is transferred or
exchanged for a beneficial interest in a Global Note, the Trustee will
(x) cancel such Certificated Note, (y) record an increase in the principal
amount of such Global Note equal to the principal amount of such transfer or
exchange and (z) in the event that such transfer or exchange involves less than
the entire principal amount of the canceled Certificated Note, deliver to the
Holder thereof one or more new Certificated Notes in authorized denominations
having an aggregate principal amount equal to the untransferred or unexchanged
portion of the canceled Certificated Note, registered in the name of the Holder
thereof.

(4) Certificated Note to Certificated Note. If a Certificated Note is
transferred or exchanged for another Certificated Note, the Trustee will
(x) cancel the Certificated Note being transferred or exchanged, (y) deliver one
or more new Certificated Notes in authorized denominations having an aggregate
principal amount equal to the principal amount of such transfer or exchange to
the transferee (in the case of a transfer) or the Holder of the canceled
Certificated Note (in the case of an exchange), registered in the name of such
transferee or Holder, as applicable, and (z) if such transfer or exchange
involves less than the entire principal amount of the canceled Certificated
Note, deliver to the Holder thereof one or more Certificated Notes in authorized
denominations having an aggregate principal amount equal to the untransferred or
unexchanged portion of the canceled Certificated Note, registered in the name of
the Holder thereof.

SECTION 2.12 Restrictions on Transfer and Exchange.

(a) The transfer or exchange of any Note (or a beneficial interest therein) may
only be made in accordance with this Section and Section 2.11 and, in the case
of a Global Note (or a beneficial interest therein), the applicable rules and
procedures of the Depositary. The Trustee shall refuse to register any requested
transfer or exchange that does not comply with the preceding sentence.

(b) Subject to paragraph (c), the transfer or exchange of any Note (or a
beneficial interest therein) of the type set forth in column A below for a Note
(or a beneficial interest therein) of the type set forth opposite in column B
below may only be made in compliance with the certification requirements (if
any) described in the clause of this paragraph set forth opposite in column C
below.

 

A

  

B

   C

Rule 144A Global Note

  

Rule 144A Global Note

   (1)

Rule 144A Global Note

  

Regulation S Global Note

   (2)

Rule 144A Global Note

  

Certificated Note

   (3)

Regulation S Global Note

  

Rule 144A Global Note

   (4)

Regulation S Global Note

  

Regulation S Global Note

   (1)

Regulation S Global Note

  

Certificated Note

   (5)

Certificated Note

  

Rule 144A Global Note

   (4)

Certificated Note

  

Regulation S Global Note

   (2)

Certificated Note

  

Certificated Note

   (3)

 

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(1) No certification is required.

(2) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Regulation S Certificate; provided
that if the requested transfer or exchange is made by the Holder of a
Certificated Note that does not bear a Restricted Legend, then no certification
is required.

(3) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee (x) a duly completed Rule 144A Certificate, (y) a duly
completed Regulation S Certificate or (z) a duly completed Institutional
Accredited Investor Certificate, and/or an Opinion of Counsel and such other
certifications and evidence as the Issuer may reasonably require in order to
determine that the proposed transfer or exchange is being made in compliance
with the Securities Act and any applicable securities laws of any state of the
United States; provided that if the requested transfer or exchange is made by
the Holder of a Certificated Note that does not bear a Restricted Legend, then
no certification is required. In the event that (i) the requested transfer or
exchange takes place after the Restricted Period and a duly completed Regulation
S Certificate is delivered to the Trustee or (ii) a Certificated Note that does
not bear a Restricted Legend is surrendered for transfer or exchange, upon
transfer or exchange the Trustee will deliver a Certificated Note that does not
bear a Restricted Legend.

(4) The Person requesting the transfer or exchange must deliver or cause to be
delivered to the Trustee a duly completed Rule 144A Certificate.

(5) Notwithstanding anything to the contrary contained herein, no such exchange
is permitted if the requested exchange involves a beneficial interest in a
Temporary Regulation S Global Note. If the requested transfer or exchange
involves a beneficial interest in a Permanent Regulation S Global Note, no
certification is required and the Trustee will deliver a Certificated Note that
does not bear a Restricted Legend.

(c) No certification is required in connection with any transfer or exchange of
any Note (or a beneficial interest therein)

(1) after such Note is eligible for resale pursuant to Rule 144(k) under the
Securities Act (or a successor provision); provided that the Issuer has provided
the Trustee with an Officers’ Certificate to that effect, and the Issuer may
require from any Person requesting a transfer or exchange in reliance upon this
clause (1) an opinion of counsel and any other reasonable certifications and
evidence in order to support such certificate; or

(2) sold pursuant to an effective registration statement.

Any Certificated Note delivered in reliance upon this paragraph will not bear a
Restricted Legend.

(d) The Trustee will retain copies of all certificates, opinions and other
documents received in connection with the transfer or exchange of a Note (or a
beneficial interest therein), and the Issuer will have the right to inspect and
make copies thereof at any reasonable time upon written notice to the Trustee.

 

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SECTION 2.13 Temporary Regulation S Global Notes.

(a) Each Note originally sold in reliance upon Regulation S will be evidenced by
one or more Regulation S Global Notes that bear the Temporary Regulation S
Global Note Legend.

(b) An owner of a beneficial interest in a Temporary Regulation S Global Note
(or a Person acting on behalf of such an owner) may provide to the Trustee (and
the Trustee will accept) a duly completed Certificate of Beneficial Ownership at
any time after the Restricted Period (it being understood that the Trustee will
not accept any such certificate during the Restricted Period). Promptly after
acceptance of a Certificate of Beneficial Ownership with respect to such a
beneficial interest, the Trustee will cause such beneficial interest to be
exchanged for an equivalent beneficial interest in a Permanent Regulation S
Global Note, and will (x) permanently reduce the principal amount of such
Temporary Regulation S Global Note by the amount of such beneficial interest and
(y) increase the principal amount of such Permanent Regulation S Global Note by
the amount of such beneficial interest.

(c) Notwithstanding paragraph (b), if after the Restricted Period any Initial
Purchaser owns a beneficial interest in a Temporary Regulation S Global Note,
such Initial Purchaser may, upon written request to the Trustee accompanied by a
certification as to its status as an Initial Purchaser, exchange such beneficial
interest for an equivalent beneficial interest in a Permanent Regulation S
Global Note, and the Trustee will comply with such request and will
(x) permanently reduce the principal amount of such Temporary Regulation S
Global Note by the amount of such beneficial interest and (y) increase the
principal amount of such Permanent Regulation S Global Note by the amount of
such beneficial interest.

(d) Notwithstanding anything to the contrary contained herein, any owner of a
beneficial interest in a Temporary Regulation S Global Note shall not be
entitled to receive payment of principal or interest on such beneficial interest
or other amounts in respect of such beneficial interest until such beneficial
interest is exchanged for an interest in a Permanent Regulation S Global Note or
transferred for an interest in another Global Note or a Certificated Note.

SECTION 2.14 Defaulted Interest. If the Issuer defaults in a payment of interest
on the Notes, the Issuer shall pay the defaulted interest (plus interest on such
defaulted interest to the extent lawful) in any lawful manner (including, if
accrued prior to February 15, 2011, in the form of Additional Notes). The Issuer
may pay the defaulted interest to the persons who are Noteholders on a
subsequent special record date. The Issuer shall fix or cause to be fixed any
such special record date and payment date to the reasonable satisfaction of the
Trustee and shall promptly mail or cause to be mailed to each Noteholder a
notice that states the special record date, the payment date and the amount of
defaulted interest to be paid.

The Issuer may make payment of any defaulted interest in any other lawful manner
not inconsistent with the requirements (if applicable) of any securities
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may be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Issuer to the Trustee of the proposed payment pursuant
to this paragraph, such manner of payment shall be deemed practicable by the
Trustee.

SECTION 2.15 Payment of Interest. Interest accruing on the Notes and payable on
or before February 15, 2011 shall be paid in the form of Additional Notes as
provided in Section 2.02(d). Notwithstanding anything else in this Indenture or
the Notes to the contrary, all interest shall accrue and be payable in cash and
not in Additional Notes commencing on the earliest of (i) February 16, 2011,
(ii) acceleration of the Notes pursuant to Section 6.02 (unless such
acceleration shall be rescinded in accordance with Section 6.04, in which case
this clause (ii) shall not apply ab initio and such interest shall be payable in
Additional Notes, subject to clauses (i) and (iii) of this paragraph) and
(iii) the occurrence of an Event of Default under Section 6.01(9) (with respect
to the Issuer or any of its Restricted Subsidiaries). In addition, interest
payable on any Notes in connection with a redemption or repurchase under this
Indenture shall be paid in cash.

ARTICLE 3

REDEMPTION

SECTION 3.01 Notices to Trustee. If the Issuer elects to redeem Notes pursuant
to Section 3.07, it shall notify the Trustee in writing of the redemption date
and the principal amount of Notes to be redeemed.

The Issuer shall give the notice to the Trustee provided for in this Section not
less than 30 nor more than 60 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers’
Certificate and an Opinion of Counsel from the Issuer to the effect that such
redemption shall comply with the conditions herein. If fewer than all the Notes
are to be redeemed, the record date relating to such redemption shall be
selected by the Issuer and given to the Trustee, which record date shall be not
fewer than 30 days after the date of notice to the Trustee, unless the Trustee
otherwise agrees. Any such notice may be canceled at any time prior to notice of
such redemption being mailed to any Holder and shall thereby be void and of no
effect.

SECTION 3.02 Selection. If less than all of the Notes are to be redeemed at any
time, the Trustee will select Notes for redemption as follows:

(a) if the Notes are listed on any national securities exchange, in compliance
with the requirements of the principal national securities exchange on which the
Notes are listed; or

(b) if the Notes are not listed on any national securities exchange, on a pro
rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate;

provided that no Notes of $2,000 or less shall be redeemed in part, except that
(a) Additional Notes issued in payment of interest may be redeemed in other
denominations and (b) if all of the Notes of a Holder are to be redeemed, the
entire outstanding amount of Notes held by such Holder, even if not a multiple
of $1,000, shall be redeemed. If any Note is to be redeemed in part only, the
notice of redemption that relates to such Note shall state the portion of the
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amount thereof to be redeemed. On and after the redemption date, unless the
Issuer defaults in payment of the redemption price or the Paying Agent is
prohibited from making such payment pursuant to the terms of this Indenture,
interest will cease to accrue on the Notes or portions of the Notes called for
redemption.

SECTION 3.03 Notice. Notices of redemption shall be mailed by first class mail
at least 30 but not more than 60 days before the redemption date to each Holder
of Notes to be redeemed at its registered address, except that redemption
notices may be mailed more than 60 days prior to a redemption date if the notice
is issued in connection with a defeasance of the Notes or a satisfaction and
discharge of this Indenture. Notices of redemption may not be conditional.

The notice shall identify the Notes to be redeemed and shall state:

(a) the redemption date and any conditions to the occurrence thereof;

(b) the redemption price;

(c) the name and address of the Paying Agent;

(d) that Notes called for redemption must be presented and surrendered to the
Paying Agent to collect the redemption price;

(e) if any Note is being redeemed in part, the portion of the principal amount
of such Note to be redeemed and that, after the redemption date, upon
presentation and surrender of such Note, a new Note or Notes in aggregate
principal amount equal to the unredeemed portion thereof will be issued in the
name of the Holder thereof upon cancellation of the original Note;

(f) that, unless the Issuer defaults in making such redemption payment or the
Paying Agent is prohibited from making such payment pursuant to the terms of
this Indenture, interest will cease to accrue on the Notes (or portion thereof)
called for redemption on and after the redemption date;

(g) that the Notes called for redemption are being redeemed pursuant to
Section 3.07;

(h) the CUSIP number, if any, printed on the Notes being redeemed; and

(i) that no representation is made as to the correctness or accuracy of the
CUSIP number, if any, listed in such notice or printed on the Notes.

At the Issuer’s request (which may be revoked at any time in writing prior to
the time at which the Trustee shall have given such notice to the Holders) made
at least 30 days prior to the redemption date, the Trustee shall give the notice
of redemption in the Issuer’s name and at the Issuer’s expense. In such event,
the Issuer shall provide the Trustee with the information required by this
Section and shall prepare the text of the notice of redemption.

 

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SECTION 3.04 Effect of Notice of Redemption. Once notice of redemption is
mailed, Notes called for redemption become due and payable on the date fixed for
redemption and at the redemption price stated in the notice. Upon surrender to
the Paying Agent, such Notes shall be paid at the redemption price stated in the
notice, plus accrued interest to the redemption date; provided that if the
redemption date is after a regular record date and on or prior to the interest
payment date, the accrued and unpaid interest shall be payable to the Noteholder
of the redeemed Notes registered at the close of business on the relevant record
date. On and after the redemption date, interest will cease to accrue on Notes
or portions of Notes called for redemption. If mailed in the manner herein, the
notice shall be conclusively presumed to have been given whether or not the
Holder receives such notice. Failure to give notice or any defect in the notice
to any Holder shall not affect the validity of the notice to any other Holder.

SECTION 3.05 Deposit of Redemption Price. By 12:00 noon on the redemption date,
the Issuer shall deposit with the Paying Agent (or, if the Issuer or a
wholly-owned Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Notes to be redeemed on the redemption date other than Notes or portions of
Notes called for redemption that have been delivered by the Issuer to the
Trustee for cancellation. If the redemption date is on or after an interest
record date and on or before the related interest payment date, the accrued and
unpaid interest will be paid to the Person in whose name a Note is registered at
the close of business on such record date.

SECTION 3.06 Notes Redeemed in Part. Upon surrender of a Note that is redeemed
in part, the Issuer shall execute and the Trustee shall authenticate for the
Holder (at the Issuer’s expense) a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.

SECTION 3.07 Optional Redemption.

(a) At any time prior to February 15, 2010, the Issuer may on any one or more
occasions redeem up to 35% of the aggregate principal amount of the Notes issued
under this Indenture (including Additional Notes) at a redemption price of 115%
of the principal amount thereof on the redemption date, with the net cash
proceeds of one or more Equity Offerings; provided that:

(1) at least 65% of the aggregate principal amount of Notes issued under this
Indenture (excluding Notes held by the Issuer and its Subsidiaries but including
Additional Notes) remains outstanding immediately after the occurrence of such
redemption; and

(2) the redemption occurs within 180 days of the date of the closing of such
Equity Offering.

(b) At any time, the Issuer may redeem all or part of the Notes at a redemption
price equal to the sum of (i) 100% of the principal amount on the redemption
date of the Notes redeemed plus (ii) the Applicable Premium as of the date of
redemption.

(c) Except pursuant to clauses (a) and (b) of this Section 3.07, the Notes will
not be redeemable at the Issuer’s option.

 

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(d) Unless the Issuer defaults in the payment of the redemption price, interest
will cease to accrue on the Notes or portions thereof called for redemption on
the applicable redemption date. If the redemption date is on or after an
interest payment record date and on or before the related interest payment date,
the accrued and unpaid interest will be paid to the Holder of record at the
close of business on such record date.

SECTION 3.08 No Sinking Fund. There shall be no sinking fund for the payment of
principal on the Notes to the Noteholders.

SECTION 3.09 Repurchase Offers.

(a) If the Issuer shall be required to commence an offer to all Holders to
purchase Notes (a “Repurchase Offer”) pursuant to Section 5.09 (a “Change of
Control Offer”), Section 5.08(a)(4) (a Collateral Sale Offer) or
Section 5.08(b)(4) (an Excess Proceeds Offer), the Issuer shall follow the
procedures specified in this Section 3.09:

(1) (A) Within 10 days after a Change of Control (unless (1) the Issuer is not
required to make such offer pursuant to Section 5.09(b) or (2) all Notes have
been called for redemption pursuant to Section 3.07(b)), or (B) on the date on
which the Issuer is required to make a Repurchase Offer pursuant to
Section 5.08(a)(4) or Section 5.08(b)(4), the Issuer shall commence a Repurchase
Offer, which shall remain open for a period of at least 20 Business Days
following its commencement, by sending a notice to the Trustee and each of the
Holders, by first class mail, which notice shall contain all instructions and
materials necessary to enable the Holders to tender Notes pursuant to such
Repurchase Offer. Such notice, which shall govern the terms of the Repurchase
Offer, shall describe the transaction or transactions that constitute the Change
of Control or otherwise require the Repurchase Offer and shall state:

(i) that the Repurchase Offer is being made pursuant to Section 5.08(a)(4),
Section 5.08(b)(4) or Section 5.09, as the case may be, and this Section 3.09;

(ii) the principal amount of Notes the Issuer is required to offer to repurchase
or that the Issuer is required to offer to purchase all of the outstanding
principal amount of Notes (such amount, the “Offer Amount”), the purchase price
and that on the date specified in such notice (the “Purchase Date”), which date
shall be no earlier than 30 days and no later than 60 days from the date such
notice is mailed, the Issuer shall repurchase an Offer Amount of Notes validly
tendered and not withdrawn pursuant to Section 5.08(a)(4), Section 5.08(b)(4) or
Section 5.09, as the case may be, and this Section 3.09;

(iii) that any Note not tendered or accepted for payment shall continue to
accrue interest;

(iv) that, unless the Issuer defaults in making such payment, Notes accepted for
payment pursuant to the Repurchase Offer shall cease to accrue interest after
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(v) that Holders electing to have a Note purchased pursuant to a Repurchase
Offer may elect to have all or any portion of such Note purchased;

(vi) that Holders electing to have a Note purchased pursuant to any Repurchase
Offer shall be required to surrender the Note, with the form entitled “Option of
Holder to Elect Purchase” on the reverse of the Note, or such other customary
documents of surrender and transfer as the Issuer may reasonably request, duly
completed, or transfer the Note by book-entry transfer, to the Issuer, the
Depositary, or the Paying Agent at the address specified in the notice prior to
the Purchase Date;

(vii) that Holders shall be entitled to withdraw their election if the Issuer,
the Depositary or the Paying Agent, as the case may be, in each case with a copy
to the Trustee, receives, not later than the Purchase Date, a telegram,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder delivered for purchase and a statement
that such Holder is withdrawing its election to have such Note purchased;

(viii) that Holders whose Notes are purchased only in part shall be issued new
Notes equal in principal amount to the unpurchased portion of the Notes
surrendered (or transferred by book-entry transfer); and

(ix) the CUSIP number, if any, printed on the Notes being repurchased and that
no representation is made as to the correctness or accuracy of the CUSIP number,
if any, listed in such notice or printed on the Notes.

(2) On the Purchase Date, the Issuer shall, to the extent lawful, (A) accept for
payment, on a pro rata basis to the extent necessary in the case of a Repurchase
Offer that is not a Change of Control Offer, the Notes or portions thereof
properly tendered pursuant to the Repurchase Offer and not theretofore withdrawn
and shall deliver to the Trustee an Officers’ Certificate stating that such
Notes or portions thereof were accepted for payment by the Issuer in accordance
with the terms of this Section 3.09, (B) deposit with the Paying Agent an amount
equal to the payment required in respect of all Notes or portions thereof so
tendered and (C) deliver or cause to be delivered to the Trustee the Notes
properly accepted together with an Officers’ Certificate stating the aggregate
principal amount of the Notes or portions thereof being purchased by the Issuer.
The Issuer, the Depositary or the Paying Agent, as the case may be, shall
promptly (but in any case not later than five days after the Purchase Date) mail
or deliver to each tendering Holder an amount equal to the Change of Control
Payment (or other payment due in respect of such Repurchase Offer if not a
Change of Control Offer) with respect to the Notes tendered by such Holder and
accepted by the Issuer for purchase, and the Issuer shall promptly issue a new
Note, and the Trustee, upon written request from the Issuer, shall authenticate
and mail or deliver (or cause to be transferred by book entry) such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the Notes
so surrendered, provided that each such new Note shall be in a minimum principal
amount of $2,000 or an integral multiple of $1,000 in excess thereof (except
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denominations). Any Note not so accepted shall be promptly mailed or delivered
by the Issuer to the Holder thereof. On the Purchase Date, all Notes purchased
by the Issuer shall be delivered to the Trustee for cancellation. All Notes or
portions thereof purchased pursuant to the Repurchase Offer shall be canceled by
the Trustee. The Issuer shall publicly announce the results of the Repurchase
Offer on or as soon as practicable after the Purchase Date, but in no case more
than five Business Days thereafter. For the purposes of the preceding sentence,
it shall be sufficient for the Issuer to publish the results of the Repurchase
Offer on its website on the world wide web.

If the Issuer complies with the provisions of the preceding paragraph, on and
after the Purchase Date interest shall cease to accrue on the Notes or the
portions of Notes repurchased. If a Note is repurchased on or after an interest
payment record date but on or before the related interest payment date, then any
accrued and unpaid interest shall be paid to the Holder in whose name such Note
was registered at the close of business on such record date and no other
interest will be payable to Holders who tender pursuant to the Repurchase Offer.
If any Note called is not repurchased upon surrender because of the failure of
the Issuer to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the Purchase Date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes.

(b) The Issuer shall comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations to the extent such
laws and regulations are applicable in connection with a Change of Control
Offer, a Collateral Sale Offer or an Excess Proceeds Offer. To the extent that
the provisions of any applicable securities laws or regulations conflict with
this Section 3.09, the Issuer shall comply with such securities laws and
regulations and shall not be deemed to have breached its obligations under this
Section 3.09 by virtue thereof.

(c) Once notice of repurchase is mailed in accordance with this Section 3.09,
all Notes validly tendered and not withdrawn (or, in the case of a Repurchase
Offer that is not a Change of Control Offer, if the Issuer is not required to
repurchase all of such Notes then the pro rata portion of such Notes that the
Issuer may be required to repurchase) become irrevocably due and payable on the
Purchase Date at the purchase price specified herein. A notice of repurchase may
not be conditional.

(d) Other than as specifically provided in this Section 3.09 or Sections 5.08
or 5.09, any purchase pursuant to this Section 3.09, Section 5.08(a)(4) or
Section 5.08(b)(4) shall be made pursuant to Sections 3.02 and 3.06.

 

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ARTICLE 4

AFFIRMATIVE COVENANTS

So long as any Note remains outstanding:

SECTION 4.01 Reports. The Issuer shall furnish to the Trustee and, upon written
request, to Holders of the Notes a copy of all of the information and reports
referred to in clauses (1) and (2) below:

(1) (a) within 120 days after the end of each fiscal year, annual audited
financial statements for such fiscal year (along with customary comparative
results) and (b) within 60 days of the end of each of the first three fiscal
quarters of every fiscal year, unaudited financial statements for the interim
period as of, and for the period ending on, the end of such fiscal quarter
(along with comparative results for the corresponding interim period in the
prior year), in each case, including a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” with respect to the periods
presented and, with respect to the annual information only, a report on the
annual financial statements by the Issuer’s certified independent accountants
(all of the foregoing financial information to be prepared on a basis
substantially consistent with the corresponding financial information included
in the Offering Memorandum or the then applicable Commission requirements); and

(2) within five Business Days of the occurrence of an event required to be
therein reported, such other reports containing substantially the same
information required to be contained in a Current Report on Form 8-K under the
Exchange Act (other than Items 3.01 (Notice of delisting or failure to satisfy a
continued listing rule or standard; transfer of listing), 3.02 (Unregistered
sales of equity securities), 3.03 (Modification of rights of security holders),
5.01 (Change of control) and 5.04 (Temporary suspension of trading under
registrant’s employee benefit plans) thereof); provided that if the Issuer
becomes subject to the reporting requirements of Section 13 or Section 15(d) of
the Exchange Act, in lieu of the foregoing requirements, the Issuer will file
all reports in the time periods specified in the Commission’s rules and
regulations.

If the Issuer has designated any of its Subsidiaries as Unrestricted
Subsidiaries, then the quarterly and annual financial information required by
this Section 4.01 shall include a reasonably detailed presentation, either on
the face of the financial statements or in the footnotes thereto, and in
“Management’s Discussion and Analysis of Financial Condition and Results of
Operations,” of the financial condition and results of operations of the Issuer
and its Restricted Subsidiaries separate from the financial condition and
results of operations of its Unrestricted Subsidiaries to the extent such
information would be required if the Issuer was subject to the periodic
reporting requirements of the Exchange Act.

In addition, for so long as any Notes remain outstanding, if at any time the
Issuer and the Guarantors are not required to file with the Commission the
reports required by the preceding paragraphs, the Issuer and the Guarantors
shall furnish to the Holders of Notes and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.

SECTION 4.02 Payment of Obligations. The Issuer shall, and shall cause each of
its Restricted Subsidiaries to, pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (i) all material taxes,
assessments and governmental charges levied or imposed upon the Issuer or any
Restricted Subsidiary or upon the income, profits or property of the Issuer or
any Restricted Subsidiary and (ii) all lawful claims for labor, materials and
supplies, which, if unpaid, might by law become a material liability or Lien
upon the property of the Issuer or any Restricted Subsidiary; provided, however,
that the Issuer shall not be required to pay or discharge or cause to be paid or
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amount, applicability or validity of which is being contested in good faith by
appropriate proceedings and for which appropriate reserves, if necessary (in the
good faith judgment of management of the Issuer), are being maintained in
accordance with GAAP or where the failure to effect such payment will not be
materially disadvantageous to the Holders.

SECTION 4.03 Corporate Existence. Except as otherwise permitted in this
Indenture, the Issuer and the Guarantors shall do or cause to be done all things
necessary to preserve and keep in full force and effect their corporate
existences and the corporate, partnership, limited liability company or other
existence of any Restricted Subsidiary in accordance with their respective
organizational documents (as the same may be amended from time to time).

SECTION 4.04 FCC License Subsidiary; Licenses.

(a) All FCC Licenses acquired after the Issue Date shall, as soon as practicable
after receipt thereof, be held by the FCC License Subsidiary, except as required
by law or administrative action. All Industry Canada Licenses in existence on
the Issue Date or acquired after the Issue Date shall be held by TerreStar
Canada or another entity designated by the Issuer that becomes a Guarantor,
except as required by law or administrative action. The Issuer shall not
transfer or dispose of any Capital Stock it directly or indirectly owns in each
of the Canadian Entities; provided, that the Issuer may dispose of its Capital
Stock of any of the Canadian Entities in compliance with Section 5.08 if such
disposition does not adversely affect the rights of the Issuer under the IRU
Agreement or result in the loss of the orbital slot granted by Industry Canada
for TerreStar-1.

(b) After the FCC License Subsidiary has been formed, the Issuer shall maintain
direct ownership of all of the Capital Stock of the FCC License Subsidiary.

SECTION 4.05 Compliance Certificates.

(a) The Issuer shall deliver to the Trustee, within 120 days after the end of
each fiscal year of the Issuer (beginning with the fiscal year ending
December 31, 2007), an Officers’ Certificate as to the signers’ knowledge of the
Issuer’s compliance with all conditions and covenants on its part contained in
this Indenture and stating whether or not the signer knows of any Default or
Event of Default. For the purposes of this Section 4.05, compliance shall be
determined without regard to any grace period or requirement of notice provided
pursuant to the terms of this Indenture.

(b) The Issuer shall promptly deliver to the Trustee and in any event within
five Business Days of any Officer becoming aware of the occurrence of any
Default or Event of Default, an Officers’ Certificate setting forth the details
of such Default or Event of Default and the action which the Issuer is taking or
proposes to take to remedy the same.

SECTION 4.06 Designation of Unrestricted Subsidiaries.

(a) The Board of Directors of the Issuer may designate any Restricted Subsidiary
to be an Unrestricted Subsidiary if that designation would not cause a Default.
If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the
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of all outstanding Investments owned by the Issuer and its Restricted
Subsidiaries in the Subsidiary properly designated as an Unrestricted Subsidiary
will be deemed to be an Investment made as of the time of the designation and
will reduce the amount available for Restricted Payments under Section 5.04(a)
(or clause (9) of Section 5.04(b)) or under one or more clauses of the
definition of Permitted Investments, as determined by the Issuer. Such
designation will only be permitted if the Investment would be permitted at that
time and if the Restricted Subsidiary otherwise meets the definition of an
Unrestricted Subsidiary. The Board of Directors of the Issuer may redesignate
any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation
would not cause a Default or an Event of Default.

All Subsidiaries of Unrestricted Subsidiaries shall be automatically deemed to
be Unrestricted Subsidiaries.

(b) Any designation of a Subsidiary of the Issuer as an Unrestricted Subsidiary
shall be evidenced to the Trustee by filing with the Trustee a certified copy of
a resolution of the Board of Directors of the Issuer giving effect to such
designation and an Officers’ Certificate certifying that such designation
complied with clause (a) of this Section 4.06 and was permitted under
Section 5.04. If, at any time, any Unrestricted Subsidiary would fail to meet
the preceding requirements as an Unrestricted Subsidiary, it will thereafter
cease to be an Unrestricted Subsidiary for purposes of this Indenture and any
Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted
Subsidiary of the Issuer as of such date and, if such Indebtedness is not
permitted to be incurred as of such date under Section 5.01, the Issuer will be
in default of such covenant. The Board of Directors of the Issuer may at any
time designate any Unrestricted Subsidiary to be a Restricted Subsidiary of the
Issuer; provided that such designation will be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Issuer of any outstanding
Indebtedness of such Unrestricted Subsidiary and such designation will only be
permitted if (1) such Indebtedness is permitted under Section 5.01, calculated
on a pro forma basis as if such designation had occurred at the beginning of the
applicable quarterly reference period; and (2) no Default or Event of Default
would be in existence following such designation.

SECTION 4.07 Additional Guarantees and Collateral.

(a) With respect to the following property acquired after the Issue Date by the
Issuer or any Guarantor (1) any assets, including, but not limited to,
after-acquired real property (but excluding (i) any leased real property, other
than a ground lease with an individual fair market value that exceeds $1,000,000
and (ii) any owned real property with an individual fair market value of
$1,000,000 or less) or any equipment or fixtures which constitute accretions,
additions or technological upgrades to the equipment or fixtures that form part
of the Collateral or (2) any Additional Assets in compliance with Section 5.08
(but excluding, in either case Excluded Property (as defined in the Security
Agreements)), the Issuer or such Guarantor shall (x) execute and deliver such
amendments to the Security Agreements, mortgages or deeds of trust and such
other documents as the Collateral Agent reasonably deems necessary or advisable
to grant to the Holders a security interest in such property and (y) file any
financing statement or mortgages or deeds of trust and deliver any stock
certificates and accompanying powers necessary to grant to the Holders a
perfected first priority security interest (subject only to Permitted Liens) in
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Intercreditor Agreement relating to the Collateral shall be deemed to relate to
such after-acquired property to the same extent and with the same force and
effect. Notwithstanding anything herein to the contrary, if granting or
perfecting any Lien to secure the Notes on any Collateral that consists of
rights that are licensed or leased from a third-party requires the consent of
such third party pursuant to the terms of an applicable license or lease
agreement, and such terms are enforceable under applicable law, the Issuer or
the relevant Guarantor, as the case may be, shall use all commercially
reasonable efforts to obtain such consent with respect to the granting or
perfecting of such Lien, but if the third party does not consent to the granting
or perfecting of such Lien after the use of commercially reasonable efforts,
none of the Issuer or the Guarantors will be required to do so.

(b) If the Issuer or any Restricted Subsidiary acquires or creates another
Domestic Subsidiary (other than a Domestic Subsidiary that is a Subsidiary,
directly or indirectly, of a Foreign Subsidiary) after the Issue Date, such
newly acquired or created Domestic Subsidiary shall, on the date on which it is
acquired or created, become a Guarantor by executing and delivering to the
Trustee a supplemental indenture in the form of Exhibit J hereto, pursuant to
which such Domestic Subsidiary will guarantee, on a joint and several basis, the
full and prompt payment of the principal of, premium, if any, and interest on
the Notes on a senior secured basis.

(c) If any Restricted Subsidiary that is not a Guarantor shall Guarantee any
Indebtedness of the Issuer or any Guarantor while the Notes are outstanding,
then such Subsidiary shall become a Guarantor under this Indenture and shall
execute and deliver to the Trustee a supplemental indenture in the form of
Exhibit J hereto.

(d) The Issuer may elect to make any Foreign Subsidiary or any Affiliate a
Guarantor, with the consent of any such party, by causing such Person to execute
and deliver to the Trustee a supplemental indenture in the form of Exhibit J
hereto.

(e) Each Guarantor shall become a party to the Collateral Documents applicable
to it and, to the extent that such Guarantor elects to guarantee any Additional
Secured Obligations, the Intercreditor Agreement. The Issuer (i) shall cause
each Subsidiary Guarantor to become a party to the Collateral Documents and the
Intercreditor Agreement and (ii) shall, or shall cause each Subsidiary Guarantor
to, file any financing statement or deliver any stock certificates and
accompanying powers necessary to grant to the Collateral Agent, for the benefit
of itself and the Holders, perfected first priority security interests (subject
only to Permitted Liens) in any Collateral held by such Guarantor, to the extent
a security interest therein can be perfected by the filing of a financing
statement or the delivery of stock certificates and accompanying powers.

(f) Each Guarantor shall, and the Issuer shall, and shall cause each of its
Subsidiaries that is a Guarantor to, promptly grant to the Holders security
interests and Mortgages in such owned real property or ground lease interest in
real property of the Issuer or any such Guarantor as is acquired after the Issue
Date by the Issuer or such Guarantor and that, together with any improvements
thereon, individually has a value in excess of $1,000,000 (“Premises”), as
additional security for the obligations of the Issuer and each of the Guarantors
under this Indenture, the Guarantees, the Collateral Documents and, in the case
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the Guarantors party thereto, the Intercreditor Agreement (unless the subject
property is already mortgaged to a third party to the extent permitted by
Section 5.02, constitutes Excluded Property or has been owned by the Issuer or
such Guarantor for less than three months and shall be sold pursuant to a sale
and lease back transaction within three months of the date of acquisition by the
Issuer or such Guarantor). With respect to such Premises, the Issuer shall
deliver to the Collateral Agent, as mortgagee or beneficiary, as applicable,
fully executed counterparts of Mortgages, each dated as of a date no later than
60 days after the date of acquisition of such Premises, duly executed by the
Issuer or the applicable Guarantor, together with evidence of the completion or
satisfactory arrangements for the completion (such as delivery to a reputable
title insurance company for recording and filing) of all recordings and filings
of such Mortgages (and payment of any taxes or fees in connection therewith) as
may be necessary to create a valid, perfected Lien, subject to Permitted Liens
and on a shared basis with any Additional Secured Obligations, against the
Premises purported to be covered thereby. With respect to any Premises that have
a fair market value in excess of $10,000,000, the Issuer shall also deliver to
the Collateral Agent mortgagee’s title insurance policies in favor of the
Collateral Agent, as mortgagee for the ratable benefit of itself and the Holders
(on a shared basis with any Additional Secured Obligations), in the amount of
the fair market value of such Premises as determined in good faith by the
Issuer’s senior management and in the form necessary, with respect to the
property purported to be covered by such Mortgage, to ensure that title to such
property is marketable and that the interests created by the Mortgage constitute
valid Liens thereon free and clear of all Liens, defects and encumbrances, other
than Permitted Liens, and such policies shall be accompanied by evidence of the
payment in full of all premiums thereon and such fixture filings, surveys,
instruments, certificates, agreements and/or other documents and such local
counsel opinions as the Collateral Agent and its counsel shall reasonably
request.

(g) Any Guarantee given by any Restricted Subsidiary that was required to be
given by Section 4.07(c) hereof shall be automatically released upon the release
by the Holders of the Indebtedness described in Section 4.07(c) or the guarantee
thereof by such Restricted Subsidiary (including any deemed release upon payment
in full of all obligations under such Indebtedness), which resulted in the Notes
being guaranteed by such Restricted Subsidiary, at such time as (a) no other
Indebtedness of the Issuer and the other Guarantors has been guaranteed by such
Restricted Subsidiary or (b) the holders of all such other Indebtedness which is
guaranteed by such Restricted Subsidiary also release their guarantee by such
Restricted Subsidiary (including any deemed release upon payment in full of all
obligations under such Indebtedness).

(h) The FCC License Subsidiary shall, promptly after the FCC License has been
transferred to it, become a Guarantor and execute a supplemental indenture
hereto in substantially the form of Exhibit J hereto pursuant to which it will
guarantee, on a joint and several basis, the full and prompt payment of the
principal of, premium, if any, and interest on the Notes on a senior secured
basis.

(i) The Issuer shall cause the FCC License Subsidiary to become a party to the
Collateral Documents and, if applicable, the Intercreditor Agreement and take
such actions necessary or advisable to grant to the Collateral Agent, for the
benefit of itself and the Holders of the Notes, a perfected security interest in
any Collateral held by the FCC License Subsidiary, subject to Permitted Liens.

 

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(j) The Collateral Agent shall execute an appropriate instrument prepared by the
Issuer evidencing the release of a Guarantor from its obligations under its
Guarantee, the Collateral Documents and the Intercreditor Agreement upon receipt
of an Officer’s Certificate by the Issuer or such Guarantor stating that all
conditions set forth in Section 4.07(g), 5.03(f), 11.02(a)(1), 11.02(a)(2),
11.02(a)(3) or 11.02(a)(5), as applicable, have been satisfied or that the
Capital Stock of such Guarantor has been disposed of in accordance with the
provisions of this Indenture.

(k) The foregoing provisions shall not apply to Subsidiaries that have been
properly designated as Unrestricted Subsidiaries in accordance with Section 4.06
for so long as they continue to constitute Unrestricted Subsidiaries.

SECTION 4.08 Maintenance of Insurance.

(a) The Issuer shall obtain, or cause to be obtained, prior to the launch of
each satellite and shall maintain, or cause to be maintained, launch insurance
with respect to each satellite launch covering the period from the launch to 180
days or more following the launch of each satellite on such terms (including
coverage period, exclusions, limitations on coverage, co-insurance, deductibles
and coverage amount) as is customary in the industry for similar persons at the
time of such launch.

(b) The Issuer shall procure and maintain, or cause to be procured and
maintained, Full In-Orbit Insurance for each satellite; provided that such Full
In-Orbit Insurance shall only be required if, and to the extent and on such
terms (including coverage period, exclusions, limitations on coverage,
co-insurance, deductibles and coverage amount) as is determined by the Board of
Directors of the Issuer to be in the best interests of the Issuer as evidenced
by a resolution of the Board of Directors.

(c) Insurance policies required by the foregoing paragraphs obtained or renewed
after the Issue Date shall:

(1) contain no exclusions other than customary exclusions and such specific
exclusions applicable to the performance of the satellite (or portion thereof,
or the type of satellite or portion thereof, as applicable) being insured as are
acceptable to the Board of Directors of the Issuer in order to obtain insurance
for a price that is, and on other terms and conditions that are, commercially
reasonable; and

(2) subject to the proviso in clause (b) of this Section 4.08, provide coverage
for all risks of loss and damage to the satellite.

(d) In the event that the Issuer or any Guarantor receives Net Insurance
Proceeds relating to any satellite, the Issuer or such Guarantor shall apply
such Net Insurance Proceeds in the manner provided under Section 5.08.

SECTION 4.09 Covenants with Respect to the Canadian Entities. At all times after
the Transfer Agreements have become effective, the Issuer will exercise its
rights under such Transfer Agreements so as not to permit the Canadian Entities
to (each, a “Covered Transaction”):

(a) engage in (i) any sale, lease, transfer or other disposition of any assets
or rights; or (ii) the issuance of any Equity Interests in a Canadian Entity or
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(b) incur any Indebtedness; or

(c) directly or indirectly, create, incur, assume or otherwise cause or suffer
to exist or become effective any Lien, other than Liens on their respective
assets having an aggregate value of $500,000 or less,

unless, in each case, a Subsidiary Guarantor would be permitted to engage in
such Covered Transaction in compliance with Sections 5.01, 5.02 and 5.08;
provided, however, that in the case of an Asset Sale or Recovery Event of a
Canadian Entity, any fair market value determination required to be made in
connection therewith may be made by the Board of Directors of such entity.

For purposes of compliance with the preceding sentence of this Section 4.09,

(i) any Covered Transaction engaged in by a Canadian Entity shall be deemed to
be a transaction by a Restricted Subsidiary of the Issuer that is a Subsidiary
Guarantor and has provided a Subsidiary Guarantee; and

(ii) each Canadian Entity shall be considered to be Restricted Subsidiary and
Subsidiary Guarantor for purposes of such defined terms used in Sections 5.01,
5.02 and 5.08.

Furthermore, for purposes of determining compliance with Sections 5.01, 5.02 and
5.08 following the occurrence of one or more Covered Transactions, effect shall
be given to such Covered Transactions as if they had been transactions by
Restricted Subsidiaries and Subsidiary Guarantors, including, but not limited
to, for purposes of determining basket usage under Section 5.01(b). Nothing in
this Section 4.09 shall be deemed to alter or amend the terms of the Transfer
Agreements.

ARTICLE 5

NEGATIVE COVENANTS

So long as any Note remains outstanding:

SECTION 5.01 Indebtedness.

(a) The Issuer shall not, and shall not permit any Restricted Subsidiary to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise
become directly or indirectly liable, contingently or otherwise, with respect to
(collectively, “incur”) any Indebtedness (including Acquired Debt); provided,
however, that the Issuer and any Subsidiary Guarantor may incur Indebtedness
(including Acquired Debt) if the Issuer’s Leverage Ratio as of the date on which
such additional Indebtedness is incurred would not be greater than 6.75 to 1.0,
determined on a pro forma basis (including a pro forma application of the net
proceeds therefrom), as if the additional Indebtedness had been incurred at the
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(b) The provisions of clause (a) of this Section 5.01 will not apply to any of
the following items of Indebtedness:

(1) the incurrence of $1.00 of additional senior secured or unsecured
Indebtedness by the Issuer or any Subsidiary Guarantor for each $4.00 of Net
Proceeds received by the Issuer after the Issue Date from the issue or sale of
Capital Stock of the Issuer or cash capital contributions to the Issuer (in each
case, other than proceeds of Disqualified Stock, sales of Capital Stock to the
Issuer or any of its Restricted Subsidiaries or cash or securities contributed
to the Issuer pursuant to the Motient Funding Agreement); provided that, prior
to any Incurrence of Indebtedness under this clause (1), the Issuer shall have
received at least $150.0 million of Net Proceeds after the Issue Date from the
issue or sale of Capital Stock of the Issuer or cash contributed to the capital
of the Issuer (in each case other than proceeds of Disqualified Stock or sales
of Capital Stock to the Issuer or any of its Restricted Subsidiaries or cash or
securities contributed to the Issuer pursuant to the Motient Funding Agreement);
and provided, further that any Net Proceeds received by the Issuer or cash
contributions to the Issuer’s capital and used to incur Indebtedness pursuant to
this clause (1) shall be excluded from the calculation of Net Proceeds under
Section 5.04(a)(4)(C)(ii);

(2) Existing Indebtedness;

(3) the incurrence by the Issuer and the Subsidiary Guarantors of Indebtedness
represented by the Notes (other than Additional Notes not issued in payment of
interest or the Notes), Additional Notes issued in payment of interest on the
Notes and the related Guarantees to be issued on the Issue Date and additional
Guarantees issued after the Issue Date pursuant to Section 4.07;

(4) the incurrence by the Issuer or any Subsidiary Guarantor of Indebtedness
represented by Capital Lease Obligations, mortgage financings or Purchase Money
Indebtedness with respect to assets other than Capital Stock or other
Investments, including the incurrence of Indebtedness representing the financing
of installments of Full In-Orbit Insurance, launch insurance premiums or launch
services, in each case, incurred for the purpose of financing all or any part of
the purchase price or cost of design, construction, installation or improvement
of property, plant or equipment used in a Permitted Business, and Attributable
Debt, in an aggregate principal amount not to exceed $50.0 million at any time
outstanding;

(5) the incurrence by the Issuer or any of its Restricted Subsidiaries of
Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which
are used to renew, refund, refinance, discharge, defease or replace Indebtedness
(other than intercompany Indebtedness) that was permitted by this Indenture to
be incurred under Section 5.01(a) or under any other clause of this
Section 5.01(b) (excluding clause (6)), provided that for purposes of any limit
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amount of Indebtedness incurred pursuant to this clause (5) outstanding at any
one time shall be treated as outstanding pursuant to such other clause;

(6) the incurrence by the Issuer or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among the Issuer and any of its Restricted
Subsidiaries; provided, however, that:

(i) if the Issuer or any Subsidiary Guarantor is the obligor on such
Indebtedness and the payee is not the Issuer or a Subsidiary Guarantor, such
Indebtedness shall be expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes, in the case of the Issuer, or
such Subsidiary Guarantee, in the case of a Subsidiary Guarantor; and

(ii) (A) any subsequent issuance or transfer of Equity Interests or any other
event that results in any such Indebtedness being beneficially held by a Person
other than the Issuer or a Restricted Subsidiary (B) any sale or other transfer
of any such Indebtedness to a Person that is neither the Issuer nor a Restricted
Subsidiary or (C) the designation of a Restricted Subsidiary which holds
Indebtedness as an Unrestricted Subsidiary will be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Issuer or such Restricted
Subsidiary, as the case may be, that was not permitted by this clause (6);

(7) the incurrence by the Issuer or any of its Restricted Subsidiaries of
Hedging Obligations;

(8) the Guarantee by the Issuer or any of the Subsidiary Guarantors of
Indebtedness of the Issuer or any Restricted Subsidiary that was permitted to be
incurred by another provision of this Section 5.01(b); provided that if the
Indebtedness being guaranteed is (A) pari passu in right of payment to the Notes
or any Subsidiary Guarantee, then the Guarantee related to such Indebtedness
shall rank equally in right of payment to the Notes or such Subsidiary
Guarantee, as the case may be, or (B) subordinated in right of payment to the
Notes or any Subsidiary Guarantee, then the Guarantee of such Indebtedness shall
be subordinated in right of payment to the same extent to the Notes or such
Subsidiary Guarantee, as the case may be;

(9) the incurrence of Indebtedness by the Issuer or any of its Restricted
Subsidiaries arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument (except in the case of daylight
overdrafts) in the ordinary course of business inadvertently drawn against
insufficient funds, provided, however, that such Indebtedness is extinguished
within five Business Days of incurrence;

(10) the incurrence of Indebtedness by the Issuer or any of its Restricted
Subsidiaries incurred in respect of workers’ compensation claims, self-insurance
obligations, bankers’ acceptances, performance, surety and similar bonds and
completion guarantees provided by the Issuer or any Restricted Subsidiary, in
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(11) the incurrence of Indebtedness by one or more Foreign Subsidiaries of the
Issuer in an aggregate principal amount outstanding at any one time not to
exceed the greater of (a) $30.0 million or (b) 2.5% of Consolidated Total
Assets;

(12) Indebtedness of a Restricted Subsidiary incurred and outstanding on the
date on which such Restricted Subsidiary was acquired by, or merged into, the
Issuer or any Restricted Subsidiary (other than Indebtedness incurred (A) to
provide all or any portion of the funds utilized to consummate the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary or was otherwise acquired by the Issuer or
(B) otherwise in connection with, or in contemplation of, such acquisition);
provided, however, that at the time such Restricted Subsidiary is acquired by
the Issuer, the Issuer would have been able to incur $1.00 of additional
Indebtedness pursuant to Section 5.01(a) after giving effect to the incurrence
of such Indebtedness pursuant to this clause (12);

(13) the incurrence of additional Indebtedness by the Issuer or any Subsidiary
Guarantor in an aggregate principal amount which, when taken together with all
other Indebtedness incurred pursuant to this clause (13) and then outstanding,
does not exceed the greater of (A) $500.0 million and (B) an amount equal to
150% of the Net Proceeds received by the Issuer since the Issue Date from the
issue or sale of Capital Stock of the Issuer or cash contributed to the capital
of the Issuer (in each case other than proceeds of Disqualified Stock or sales
of Capital Stock to the Issuer or any of its Restricted Subsidiaries); provided,
however, that any Indebtedness incurred under this clause (13) shall have a
Weighted Average Life to Maturity that is greater than the then remaining
Weighted Average Life to Maturity of the Notes; provided further that any Net
Proceeds received by the Issuer or cash contributions to the Issuer’s capital
and used to incur Indebtedness pursuant to this clause (13) shall be excluded
from the calculation of Net Proceeds under Section 5.04(a)(4)(C)(ii);

(14) the incurrence of Purchase Money Indebtedness constituting Indebtedness by
the Issuer or any Subsidiary Guarantor to finance the procurement, construction
and launch of one or more satellites and/or ground-based beam-forming earth
stations in an amount at any time outstanding not to exceed $100.0 million;

(15) the incurrence of Capital Lease Obligations or Purchase Money Indebtedness
of the Issuer or any Subsidiary Guarantor incurred to finance the lease or
purchase of wireless communications spectrum in North America; provided that in
the case of Capital Lease Obligations, the rights of the lessor under such
Capital Lease Obligations shall be limited to the wireless communications
spectrum leased and, in the case of Purchase Money Indebtedness, the lenders of
such Purchase Money Indebtedness shall only have recourse to the wireless
communications spectrum purchased (or any Restricted Subsidiary that owns no
material assets other than such spectrum) and shall have no other claim against
the Issuer and its other Restricted Subsidiaries; provided, further, that the
Issuer shall have received at least $500.0 million of Designated Equity
Contributions prior to any incurrence under this clause (15) and shall not have
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(16) the incurrence by the Issuer or any Subsidiary Guarantor of additional
Indebtedness, which may be secured on an equal and ratable basis with the Notes
or otherwise in accordance with the terms of this Indenture, together with all
other Indebtedness incurred pursuant to this clause (16) that is at the time
outstanding, in an aggregate principal amount (or accreted value, as applicable)
at any time outstanding not to exceed $50.0 million;

(17) the incurrence of subordinated Obligations by the Issuer or any Subsidiary
Guarantor, which, when added together with the amount of all other subordinated
Obligations incurred pursuant to this clause (17) and then outstanding, does not
exceed $250.0 million; provided, however, that any Indebtedness incurred under
this clause (17) shall have a Weighted Average Life to Maturity that is greater
than the then remaining Weighted Average Life to Maturity of the Notes and a
final maturity date that is later than the date that is 91 days after the Stated
Maturity of the Notes; and

(18) the incurrence of Indebtedness by the Issuer or any Subsidiary Guarantor to
finance the purchase or construction of property (real or personal) or equipment
that is used for the construction of the Issuer’s terrestrial network so long
as, at the time of incurrence thereof, the ratio of total consolidated
Indebtedness of the Issuer and its Restricted Subsidiaries determined in
accordance with GAAP (including Indebtedness under all financings under this
clause (18)) to Invested Capital does not exceed 75%.

(c) The Issuer shall not permit any of the Unrestricted Subsidiaries to incur
any Indebtedness other than Non-Recourse Debt. If any Non-Recourse Debt of an
Unrestricted Subsidiary shall at any time cease to constitute Non-Recourse Debt
or such Unrestricted Subsidiary shall be redesignated a Restricted Subsidiary,
such event will be deemed to constitute an incurrence of Indebtedness by a
Restricted Subsidiary.

(d) For purposes of determining compliance with this Section 5.01:

(1) in the event that any Indebtedness meets the criteria of more than one of
the categories described in clauses (1) through (18) of Section 5.01(b), the
Issuer, in its sole discretion, will be permitted to classify (or later
reclassify in whole or in part) such item of Indebtedness in any manner that
complies with this Section 5.01;

(2) the accrual of interest, the accretion or amortization of original issue
discount, the payment of interest on any Indebtedness in the form of additional
Indebtedness with the same, or less onerous, terms, the reclassification of
preferred stock of the Issuer or any Subsidiary Guarantor as Indebtedness due to
a change in accounting principles, and the payment of dividends on Disqualified
Stock or preferred stock in the form of additional shares of the same class of
Disqualified Stock or preferred stock, the accrual of dividends on Disqualified
Stock or preferred stock and the accretion of the liquidation preference of
Disqualified Stock or preferred stock will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 5.01;

 

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(3) Indebtedness permitted by this Section 5.01 need not be permitted solely by
reference to one provision permitting such Indebtedness, but may be permitted in
part by one such provision and in part by one or more other provisions of this
Section 5.01 permitting such Indebtedness; and

(4) for the purposes of determining compliance with any U.S. dollar-denominated
restriction on the incurrence of Indebtedness denominated in a foreign currency,
the dollar-equivalent principal amount of such Indebtedness incurred pursuant
thereto shall be calculated based on the relevant currency exchange rate in
effect on the earlier of the date that such Indebtedness was incurred, in the
case of term Indebtedness, or first committed, in the case of revolving credit
Indebtedness; provided that if such Indebtedness is incurred to refinance other
Indebtedness denominated in a foreign currency, and such refinancing would cause
the applicable U.S. dollar-dominated restriction to be exceeded if calculated at
the relevant currency exchange rate in effect on the date of such refinancing,
such U.S. dollar-dominated restriction shall be deemed not to have been exceeded
so long as the principal amount of such refinancing Indebtedness does not exceed
the principal amount of such Indebtedness being refinanced. Notwithstanding any
other provision of this Section 5.01, the maximum amount of Indebtedness that
the Issuer or any Restricted Subsidiary may incur pursuant to this Section 5.01
shall not be deemed to be exceeded solely as a result of fluctuations in the
exchange rate of currencies. The principal amount of any Indebtedness incurred
to refinance other Indebtedness, if incurred in a different currency from the
Indebtedness being refinanced, shall be calculated based on the currency
exchange rate applicable to the currencies in which such refinancing
Indebtedness is denominated that is in effect on the date of such refinancing.

SECTION 5.02 Limitation on Liens. The Issuer shall not, and shall not permit any
of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume
or otherwise cause or suffer to exist or become effective any Lien of any kind
securing Indebtedness or trade payables (other than Permitted Liens) upon any of
their property or assets, now owned or hereafter acquired.

SECTION 5.03 Merger, Consolidation and Sale of Assets.

(a) The Issuer shall not, directly or indirectly: (x) consolidate or merge with
or into another Person (whether or not the Issuer is the surviving corporation);
or (y) sell, assign, transfer, convey, lease or otherwise dispose of all or
substantially all of the properties or assets of the Issuer and its Restricted
Subsidiaries taken as a whole, in one or more related transactions, to another
Person unless:

(1) either: (A) the Issuer is the surviving corporation; or (B) the Person
formed by or surviving any such consolidation or merger (if other than the
Issuer) or to which such sale, assignment, transfer, conveyance, lease or other
disposition has been made (the “Successor Person”) is an entity organized or
existing under the laws of the United States, any state of the United States or
the District of Columbia; provided that if such surviving person is not a
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Subsidiary of such Person organized under the laws of the United States, any
state or the District of Columbia becomes a co-issuer of the Notes in connection
therewith;

(2) the Successor Person (if other than the Issuer) expressly assumes all the
obligations of the Issuer under the Notes, this Indenture, the Collateral
Documents (as applicable) and the Intercreditor Agreement pursuant to agreements
reasonably satisfactory to the Trustee and shall cause such amendments,
supplements or other instruments to be executed, filed and recorded in such
jurisdictions as may be required by applicable law to preserve and protect the
Lien on the Collateral owned by or transferred to the Successor Person, together
with such financing statements or comparable documents as may be required to
perfect any security interests in such Collateral which may be perfected by the
filing of a financing statement or a similar document under the Uniform
Commercial Code or other similar statute or regulation of the relevant states or
jurisdictions;

(3) immediately after such transaction, no Default or Event of Default exists;

(4) (A) the Issuer or the Successor Person (if other than the Issuer) shall, on
the date of such transaction after giving pro forma effect thereto and any
related financing transactions as if the same had occurred at the beginning of
the applicable annualized quarterly period, be permitted to incur at least $1.00
of additional Indebtedness pursuant to the Leverage Ratio test set forth in
Section 5.01(a); or (B) the Leverage Ratio on the date of such transaction after
giving pro forma effect thereto and the related financing transaction would be
equal to or less than the Leverage Ratio for the Issuer and its Restricted
Subsidiaries immediately prior to such transaction; and

(5) the Issuer shall have delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel, each stating that such consolidation, merger, sale,
assignment, transfer, conveyance, lease or other disposition complies with the
provisions of this Indenture.

(b) For purposes of this Section 5.03, the sale, assignment, transfer,
conveyance, lease or other disposition of all or substantially all of the
properties and assets of one or more Restricted Subsidiaries of the Issuer,
which properties and assets, if held by the Issuer instead of such Restricted
Subsidiaries, would constitute all or substantially all of the properties and
assets of the Issuer on a consolidated basis, shall be deemed to be the transfer
of all or substantially all of the properties and assets of the Issuer.

(c) The Successor Person shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture, the
Collateral Documents and the Intercreditor Agreement but, in the case of a lease
of all or substantially all its assets, the Issuer will note be released from
the obligation to pay the principal of and interest on the Notes.

(d) Notwithstanding the preceding, (x) any Restricted Subsidiary may consolidate
with, merge into, sell, assign, convey, lease or otherwise transfer all or part
of its properties and assets to the Issuer or to any Guarantor and (y) the
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Affiliate formed solely for the purpose of re-forming the Issuer in another
jurisdiction or changing the Issuer’s form of organization; provided that if the
form of the Issuer’s organization is changed, then a corporate wholly-owned
Restricted Subsidiary of the Issuer organized under the laws of the United
States, any state or the District of Columbia becomes a co-issuer of the Notes.

(e) A Guarantor may not consolidate, amalgamate or merge with or into (whether
or not such Guarantor is the surviving Person) another Person, other than the
Issuer or another Guarantor, unless:

(1) immediately after giving effect to such transaction, no Default or Event of
Default exists; and

(2) subject to the provisions of Section 5.03(f), the Person formed by or
surviving any such consolidation, amalgamation or merger (if other than the
Guarantor) assumes all the obligations of such Guarantor under this Indenture
(including its Guarantee), the Collateral Documents and, if applicable, the
Intercreditor Agreement to which such Guarantor is a party pursuant to
agreements reasonably satisfactory to the Trustee and the Collateral Agent.

(f) In the event of:

(1) a sale or disposition of all or substantially all of the assets of any
Guarantor by way of merger, consolidation, amalgamation or otherwise; or

(2) the sale or other disposition of Capital Stock of any Guarantor if, in the
case of a Guarantor that is a Subsidiary, as a result of such disposition, such
Person ceases to be a Subsidiary of the Issuer or, in the case of any of the
Canadian Entities, the Issuer ceases to hold any direct or indirect interest in
the Equity Interests of such Canadian Entity,

then the Person acquiring such assets (in the case of clause (c)(1)) or such
Guarantor (in the case of clause (c)(2)) will be automatically released and
relieved of any obligations under its Guarantee; provided, that such sale or
other disposition complies with Section 5.08.

SECTION 5.04 Restricted Payments.

(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:

(1) declare or pay any dividend or make any other payment or distribution on or
in respect of the Issuer’s or any of its Restricted Subsidiaries’ Equity
Interests (including any payment in connection with any merger or consolidation
involving the Issuer or any of its Restricted Subsidiaries) or to the direct or
indirect holders of the Issuer’s or any of its Restricted Subsidiaries’ Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Issuer and
other than dividends or distributions payable to the Issuer or a Restricted
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(2) purchase, redeem or otherwise acquire or retire for value (including in
connection with any merger or consolidation involving the Issuer) any Equity
Interests of the Issuer or any direct or indirect parent of the Issuer;

(3) make any principal payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value any Indebtedness of the Issuer
or any Guarantor (other than Indebtedness among the Issuer and the Guarantors)
that is contractually subordinated to the Notes or to any Guarantee, except a
payment of principal at the Stated Maturity thereof, or within one year prior to
such Stated Maturity; or

(4) make any Restricted Investment (all such payments and other actions set
forth in these clauses (1) through (4) above being collectively referred to as
“Restricted Payments”), unless, at the time of and after giving effect to such
Restricted Payment:

(A) no Default or Event of Default has occurred and is continuing or would occur
as a consequence of such Restricted Payment;

(B) the Issuer would, at the time of such Restricted Payment and after giving
pro forma effect thereto as if such Restricted Payment had been made at the
beginning of the applicable quarterly period, have been permitted to incur at
least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set
forth in Section 5.01(a); and

(C) such Restricted Payment, together with the aggregate amount of all other
Restricted Payments declared or made by the Issuer and its Restricted
Subsidiaries after the Issue Date, is less than the sum, without duplication,
of:

(i) 100% of Consolidated EBITDA accrued during the period (treated as one
accounting period) from the beginning of the first fiscal quarter during which
the Issuer generates positive Consolidated EBITDA to the end of the most recent
fiscal quarter for which internal financial statements are available less 1.4
times the Consolidated Interest Expense of the Issuer for the same period (if
such amount in this clause (i) is a negative amount, minus the amount by which
such amount is less than zero), plus

(ii) 100% of the aggregate Net Proceeds received by the Issuer since the Issue
Date as a contribution to its common equity capital or from the issue or sale of
Equity Interests (other than Disqualified Stock) of the Issuer or from the issue
or sale of convertible or exchangeable Disqualified Stock or convertible or
exchangeable debt securities of the Issuer that have been converted into or
exchanged for such Equity Interests (other than Equity Interests or Disqualified
Stock or debt securities) sold to a Subsidiary of the Issuer or an employee
stock ownership plan, option plan or similar trust to the extent such sale to an
employee stock ownership plan or similar trust is financed by loans from or
guaranteed by the Issuer or any Restricted Subsidiary unless such loans have
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repaid with cash on or prior to the date of determination); provided, however,
that there shall be excluded from the calculation of Net Proceeds under this
clause (ii) any Net Proceeds received by the Issuer from the issue or sale of
its Capital Stock or cash capital contributions received by the Issuer and which
is deemed to be used to incur Indebtedness pursuant to clauses (1) and (13) of
Section 5.01(b); until and except to the extent any such Indebtedness incurred
pursuant to such clause in respect of such Net Proceeds has been redesignated to
another clause of Section 5.01(b); provided, further that Designated Equity
Contributions shall be excluded from the calculation of Net Proceeds under this
clause (ii) unless the Issuer has made a Designated Equity Election, in which
case the amount by which such Designated Equity Contributions exceeds the net
present value of all payments to be made under Capital Lease Obligations and
Purchase Money Indebtedness incurred pursuant to clause (15) of Section 5.01(b)
shall be permitted to be included in the calculation of Net Proceeds under this
clause (ii), plus

(iii) 100% of the aggregate Net Proceeds received by the Issuer or a Restricted
Subsidiary since the Issue Date from (A) Restricted Investments, whether through
interest payments, principal payments, dividends or other distributions and
payments, or the sale or other disposition (other than to the Issuer or a
Restricted Subsidiary) thereof made by the Issuer and its Restricted
Subsidiaries and (B) a cash dividend from, or the sale (other than to the Issuer
or a Restricted Subsidiary) of the stock of, an Unrestricted Subsidiary, in each
case to the extent not otherwise included in Consolidated Net Income of the
Issuer for such period; plus

(iv) to the extent that any Unrestricted Subsidiary of the Issuer designated as
such after the Issue Date is redesignated as a Restricted Subsidiary after the
Issue Date, the fair market value of the Issuer’s Investment in such Subsidiary
as of the date of such redesignation.

(b) So long as no Default has occurred and is continuing or would be caused
thereby, the preceding provisions will not prohibit:

(1) the payment of any dividend or the consummation of any irrevocable
redemption within 60 days after the date of declaration of the dividend or
giving of the redemption notice, as the case may be, if at the date of
declaration or notice the dividend or redemption payment would have complied
with the provisions of this Indenture;

(2) the making of any Restricted Payment in exchange for, or out of the net cash
proceeds of the substantially concurrent sale (other than to a Subsidiary of the
Issuer) of, Equity Interests of the Issuer (other than Disqualified Stock and
other than Equity Interests issued or sold to an employee stock ownership plan
or similar trust to the extent such sale to an employee stock ownership plan or
similar trust is financed by loans from or guaranteed by the Issuer or any
Restricted Subsidiary unless such loans have been repaid with cash on or prior
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concurrent contribution of common equity capital to the Issuer; provided that
the amount of any such net cash proceeds that are utilized for any such
Restricted Payment will be excluded from clause (a)(4)(C)(ii) of Section 5.04;
provided, further that payments of amounts pursuant to this clause shall be
excluded from subsequent calculations of the amount of Restricted Payments;

(3) the defeasance, redemption, repurchase or other acquisition or retirement
for value of Indebtedness of the Issuer or any Guarantor that is contractually
subordinated to the Notes or to any Guarantee in exchange for, or out of the net
cash proceeds of the substantially concurrent incurrence of, Permitted
Refinancing Indebtedness (other than to a Subsidiary of the Issuer); provided
that payments of amounts pursuant to this clause shall be excluded from
subsequent calculations of the amount of Restricted Payments;

(4) the payment of any dividend or distribution by a Restricted Subsidiary of
the Issuer to the holders of its Equity Interests on a pro rata basis; provided
that payments of amounts to the Issuer or any of its Restricted Subsidiaries
pursuant to this clause (4) shall be excluded from subsequent calculations of
the amount of Restricted Payments;

(5) the repurchase, redemption or other acquisition or retirement for value of
any Equity Interests of the Issuer or any Restricted Subsidiary of the Issuer or
any direct or indirect parent of the Issuer held by any current or former
officer, director or employee of the Issuer or any of its Restricted
Subsidiaries or their estates or heirs pursuant to any equity subscription
agreement, stock option agreement, shareholders’ agreement or similar agreement;
provided that the aggregate price paid for all such Equity Interests
repurchased, redeemed, acquired or retired pursuant to this clause may not
exceed $2.5 million in the aggregate since the Issue Date; provided further that
cancellation in connection with a repurchase of Equity Interests of the Issuer
of Indebtedness owing to the Issuer from employees, directors, officers or
consultants of the Issuer or any of its Subsidiaries incurred to finance the
acquisition of such Equity Interests by such individuals shall not be deemed to
constitute a Restricted Payment; provided, further that payments of amounts
pursuant to this clause shall be excluded from subsequent calculations of the
amount of Restricted Payments;

(6) repurchases of Equity Interests deemed to occur upon the exercise of stock
options, warrants or other convertible securities to the extent such Equity
Interests represent a portion of the exercise price thereof; provided that
payments of amounts pursuant to this clause shall be excluded from subsequent
calculations of the amount of Restricted Payments;

(7) the declaration and payment of regularly scheduled or accrued dividends to
holders of any class or series of Disqualified Stock of the Issuer or any
Restricted Subsidiary of the Issuer issued on or after the Issue Date in
accordance with the Leverage Ratio test set forth in Section 5.01(a); provided
that payments pursuant to this clause shall be excluded from subsequent
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(8) the declaration and payment of dividends by the Issuer to, or the making of
loans to, any direct or indirect parent in amounts required for any direct or
indirect parent to pay:

(i) franchise taxes and other fees, taxes and expenses required to maintain
their corporate existence; provided that payments of amounts pursuant to this
clause (i) shall be excluded from subsequent calculations of the amount of
Restricted Payments;

(ii) federal, state and local income taxes, to the extent such income taxes are
attributable to the income of the Issuer and its Subsidiaries; provided that
payments of amounts pursuant to this clause (ii) shall be excluded from
subsequent calculations of the amount of Restricted Payments;

(iii) (A) reasonable salary, bonus and other benefits payable to directors,
officers and employees of any direct or indirect parent company of the Issuer to
the extent such salaries, bonuses and other benefits are substantially
attributable to the ownership or operation of the Issuer and its Restricted
Subsidiaries and (B) general corporate overhead expenses of any direct or
indirect parent company of the Issuer to the extent such expenses are
substantially attributable to the ownership or operation of the Issuer and its
Restricted Subsidiaries; provided that payments of amounts pursuant to this
clause (iii), up to a maximum of $5.0 million for any fiscal year of the Issuer,
shall be excluded from subsequent calculations of the amount of Restricted
Payments;

(iv) costs, fees and expenses incident to a private placement or public offering
of any securities of such parent, so long as all of the net proceeds of such
offering (if it is completed) are contributed to the Issuer; provided that
payments of amounts pursuant to this clause (iv) shall be excluded from
subsequent calculations of the amount of Restricted Payments; and

(v) taxes payable by any direct or indirect parent in connection with a
contribution of shares of SkyTerra common stock to the Issuer pursuant to the
Motient Funding Agreement provided that such taxes relate to increases in the
value of such shares after their issuance to Motient Ventures Holding Inc., and
provided, further that payments of amounts pursuant to this clause (v) shall be
excluded from subsequent calculations of the amount of Restricted Payments;

(9) other Restricted Payments in an aggregate amount since the Issue Date not to
exceed $5.0 million; and

(10) Restricted Payments made pursuant to the Transfer Agreements; provided that
payments of amounts pursuant to this clause shall be excluded from subsequent
calculations of the amount of Restricted Payments.

(c) The amount of all Restricted Payments (other than cash) will be the fair
market value on the date of the Restricted Payment of the asset(s) or securities
proposed to be transferred or issued by the Issuer or such Restricted
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the Restricted Payment. The fair market value of any non-cash Restricted Payment
that is required to be valued by this covenant shall be determined by the Board
of Directors of the Issuer acting in good faith, whose resolution with respect
thereto will be delivered to the Trustee. The Board of Directors’ determination
must be based upon an opinion or appraisal issued by an accounting, appraisal or
investment banking firm of national standing if the fair market value exceeds
$25.0 million.

SECTION 5.05 Transactions with Affiliates.

(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate of the Issuer (each, an “Affiliate Transaction”),
unless:

(1) the Affiliate Transaction is on terms that are no less favorable to the
Issuer or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction in arm’s-length dealings by the Issuer or
such Restricted Subsidiary with a Person who is not an Affiliate; and

(2) the Issuer delivers to the Trustee:

(a) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $10.0 million, a
written resolution of the Board of Directors of the Issuer set forth in an
Officers’ Certificate certifying that a majority of the disinterested members of
the Board of Directors, if any, have approved such Affiliate Transaction and
determined that such Affiliate Transaction complies with this Section 5.05; and

(b) with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $15.0 million, a
written opinion as to the fairness to the Issuer or such Restricted Subsidiary
of such Affiliate Transaction from a financial point of view issued by an
independent accounting, appraisal or investment banking firm of national
standing.

(b) Notwithstanding the foregoing, none of the following shall be prohibited by
Section 5.05(a) or be deemed to be Affiliate Transactions:

(1) reasonable and customary (A) directors’ fees and indemnification and similar
arrangements, (B) consulting fees in an amount not to exceed $250,000 per fiscal
year, (C) employee salaries, bonuses and employment agreements (including
indemnification arrangements) and (D) compensation or employee benefit
arrangements and incentive arrangements with any officer, director or employee
entered into in the ordinary course of business (including customary benefits
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(2) transactions between or among the Issuer and/or any of its Restricted
Subsidiaries and Guarantees issued by and other transactions of the Issuer or
any of its Restricted Subsidiaries for the benefit of the Issuer or any of its
Restricted Subsidiaries, as the case may be;

(3) transactions with a Person (other than an Unrestricted Subsidiary of the
Issuer) that is an Affiliate of the Issuer or any Restricted Subsidiary solely
because the Issuer or any Restricted Subsidiary owns an Equity Interest in, or
controls, such Person;

(4) the pledge of Equity Interests of Unrestricted Subsidiaries to support the
Indebtedness thereof;

(5) issuances and sales of Equity Interests (other than Disqualified Stock) of
the Issuer to Affiliates of the Issuer and the granting of registration and
other customary rights in connection therewith, or the receipt of capital
contributions from Affiliates of the Issuer that are not Restricted Subsidiaries
of he Issuer solely in exchange for Equity Interests (other than Disqualified
Stock) of the Issuer;

(6) Restricted Payments that are permitted by Section 5.04 and Permitted
Investments (other than pursuant to clause (1) or clause (3) of the definition
of “Permitted Investments”);

(7) the performance of obligations of the Issuer or any of its Restricted
Subsidiaries under the terms of any agreement to which the Issuer or any
Restricted Subsidiaries is a party as of or on the Issue Date and to the extent
described in the Offering Memorandum, substantially as described therein, as
these agreements may be amended, modified, supplemented, extended or renewed
from time to time; provided, however, that any future amendment, modification,
supplement, extension or renewal entered into after the Issue Date will be
permitted to the extent that its terms are not materially more disadvantageous
to the Holders than the terms of the agreements in effect on the Issue Date;

(8) the performance of obligations of the Issuer or any of its Subsidiaries
under the terms of the Transfer Agreements, the Motient Funding Agreement and
the TerreStar Shareholders Agreement on the terms described in the Offering
Memorandum, as these agreements may be amended, modified, supplemented, extended
or renewed from time to time; provided, however, that any future amendment,
modification, supplement, extension or renewal entered into after the Issue Date
will be permitted to the extent that its terms are not more disadvantageous in
any material respect to the Holders of the Notes than the terms of the
agreements in effect on the Issue Date or described in the Offering Memorandum;

(9) any transaction in which the Issuer or any of its Restricted Subsidiaries
delivers to the Trustee a letter issued by an investment banking, appraisal or
accounting firm of national standing stating that such transaction is fair from
a financial point of view or meets the requirements of clause (1) of
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(10) transactions with customers, clients, suppliers, or purchasers or sellers
of goods or services, in each case in the ordinary course of business and
otherwise in compliance with the terms of this Indenture which are fair to the
Issuer and its Restricted Subsidiaries, in the reasonable determination of the
Board of Directors or the senior management of the Issuer, or are on terms at
least as favorable as might reasonably have been obtained at such time from an
unaffiliated party.

SECTION 5.06 Limitation on Lines of Business. The Issuer shall not, and shall
not permit any Restricted Subsidiary to, engage in any business other than
Permitted Businesses, except to such extent as would not be material to the
Issuer and its Subsidiaries taken as a whole.

SECTION 5.07 Dividend and Other Payment Restrictions Affecting Restricted
Subsidiaries.

(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or permit to exist or become
effective any consensual encumbrance or restriction on the ability of any
Restricted Subsidiary to:

(1) pay dividends or make any other distributions on its Capital Stock to the
Issuer or any of its Restricted Subsidiaries (it being understood that the
priority of any preferred stock in receiving dividends or liquidating
distributions prior to dividends or liquidating distributions being paid on
common stock shall not be deemed a restriction on the ability to make
distributions on Capital Stock) or pay any Indebtedness owed to the Issuer or
any of its Restricted Subsidiaries;

(2) make loans or advances to the Issuer or any of its Restricted Subsidiaries
(it being understood that the subordination of loans or advances made to the
Issuer or any of its Restricted Subsidiaries to other Indebtedness incurred by
the Issuer or any of its Restricted Subsidiaries shall not be deemed a
restriction on the ability to make loans or advances); or

(3) sell, lease or transfer any of its properties or assets to the Issuer or any
of its Restricted Subsidiaries.

(b) The preceding restrictions will not apply to encumbrances or restrictions
existing under or by reason of:

(1) agreements governing Existing Indebtedness and Credit Facilities as in
effect on the Issue Date and any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
those agreements; provided that the amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings are
no more restrictive in any material respect, taken as a whole, with respect to
such dividend and other payment restrictions than those contained in those
agreements on the Issue Date;

(2) this Indenture, the Notes, the related Guarantees, the Collateral Documents,
the Intercreditor Agreement and the Transfer Agreements;

 

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(3) applicable law or any applicable rule, regulation or order;

(4) any instrument governing Indebtedness or Capital Stock of a Person acquired
by the Issuer or any of its Restricted Subsidiaries as in effect at the time of
such acquisition (except to the extent such Indebtedness or Capital Stock was
incurred in connection with or in contemplation of such acquisition), which
encumbrance or restriction is not applicable to any Person, or the properties or
assets of any Person, other than the Person, or the property or assets of the
Person, so acquired, including any amendments, modifications, restatements,
renewals, increases, supplements, refundings, replacements or refinancings of
any such agreements or instruments; provided that the amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings are no more restrictive in any material respect, taken as a whole,
than those contained in the agreements governing such original agreement or
instrument; provided, further, that, in the case of Indebtedness, such
Indebtedness was permitted by Section 5.01;

(5) in the case of Section 5.07(a)(3):

(i) a lease, license or similar contract that restricts in a customary manner
the subletting, assignment or transfer of any subject property or asset, or the
assignment or transfer of any such lease, license or other contract;

(ii) mortgages, pledges or other security agreements otherwise permitted under
this Indenture securing Indebtedness of the Issuer or any of its Restricted
Subsidiaries to the extent such encumbrances or restrictions restrict the
transfer of the property subject to such mortgages, pledges or other security
agreements; or

(iii) reciprocal easement agreements of the Issuer or any of its Restricted
Subsidiaries containing customary provisions restricting dispositions of the
subject real property interests;

(6) leases and other agreements containing net worth provisions entered into by
the Issuer or any Restricted Subsidiary in the ordinary course of business;

(7) Purchase Money Indebtedness for property acquired in the ordinary course of
business and Capital Lease Obligations permitted under this Indenture that, in
each case, impose restrictions on the property purchased or leased of the nature
described in Section 5.07(a)(3);

(8) any agreement for the sale or other disposition of assets or Capital Stock
of a Restricted Subsidiary permitted under this Indenture that restricts the
sale of assets, distributions or loans by that Restricted Subsidiary pending its
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(9) Permitted Refinancing Indebtedness; provided that the restrictions contained
in the agreements governing such Permitted Refinancing Indebtedness are no more
restrictive in any material respect, taken as a whole, than those contained in
the agreements governing the Indebtedness being refinanced;

(10) Liens securing Indebtedness otherwise permitted to be incurred under
Section 5.02 that limit the right of the debtor to dispose of the assets subject
to such Liens;

(11) provisions with respect to the disposition or distribution of assets or
property in joint venture agreements and other similar agreements entered into
in the ordinary course of business; provided that such restrictions apply only
to the assets or property subject to such agreements;

(12) any agreement or instrument entered into after the Issue Date, provided
that the encumbrances or restrictions in such agreement or instrument are not
materially more restrictive, taken as a whole, than those contained in this
Indenture, the Notes or the Collateral Documents;

(13) any Indebtedness permitted to be incurred or issued subsequent to the Issue
Date pursuant to clause (11) of Section 5.01(b); provided that the Board of
Directors of the Issuer determines (as evidenced by a resolution of the Board of
Directors) in good faith at the time such encumbrances or restrictions are
created that such encumbrances or restrictions would not reasonably be expected
to impair the ability of the Issuer to make payments of interest and scheduled
payments of principal on the Notes in each case as and when due; and

(14) restrictions on cash or other deposits or net worth under contracts or
leases entered into in the ordinary course of business.

SECTION 5.08 Asset Sales and Recovery Events.

(a) (1) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale of Collateral unless:

(i) the Issuer or such Restricted Subsidiary, as the case may be, receives
consideration at least equal to the fair market value of the Collateral sold or
otherwise disposed of (such fair market value to be determined as of the date of
contractually agreeing to such Asset Sale);

(ii) the fair market value is determined in good faith by the Issuer’s Board of
Directors;

(iii) at least 75% of the consideration received in the Asset Sale by the Issuer
or such Restricted Subsidiary is in the form of cash or Cash Equivalents and
100% of the Net Proceeds therefrom is deposited directly into a deposit account
constituting Collateral; provided that the amount of any consideration that is
not in the form of cash or Cash Equivalents, taken together with all
consideration not in the form of cash or Cash Equivalents received pursuant to
this clause (iii) at the time of determination, shall not exceed an amount equal
to the greater of (x) $25.0 million and (y) 2.5% of Consolidated Total Assets;
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(iv) the remaining consideration from such Asset Sale that is not in the form of
cash or Cash Equivalents is promptly following its acquisition pledged as
Collateral to secure the Notes.

(2) Within 360 days of receipt of any Net Proceeds from an Asset Sale or
Recovery Event relating to Collateral, the Issuer or any of its Restricted
Subsidiaries may apply such Net Proceeds to invest in Additional Assets, which
Additional Assets are upon their acquisition added to the Collateral securing
the Notes.

(3) All of the Net Proceeds received by the Issuer or such Restricted
Subsidiary, as the case may be, from any Recovery Event shall be deposited
directly into an account pledged under the Collateral Documents and may be
withdrawn by the Issuer or such Restricted Subsidiary to be invested in
Additional Assets (which may include performance of a Restoration of the
affected Collateral) in accordance with this clause (3) within 360 days of the
date of such Recovery Event.

(4) Any Net Proceeds from Asset Sales of Collateral or Recovery Events relating
to Collateral that are not applied or invested as provided in Section 5.08(a) or
in accordance with the Collateral Documents shall constitute “Excess Collateral
Proceeds.”

Subject to clause (5) of this Section 5.08(a), no later than the 365th day after
the Asset Sale or Recovery Event pursuant to this Section 5.08(a) (or, at the
Issuer’s option, at any earlier date), if the aggregate amount of Excess
Collateral Proceeds exceeds $10.0 million, the Issuer shall:

(i) make an offer (a “Collateral Sale Offer”) to all Holders of Notes; and

(ii) prepay, purchase or redeem (or make an offer to do so) any other
Indebtedness of the Issuer that is pari passu in right of payment with the Notes
in accordance with provisions governing such Indebtedness requiring the Issuer
to prepay, purchase or redeem such Indebtedness with the proceeds from any Asset
Sales (of offer to do so),

pro rata in proportion to the aggregate principal amount of the Notes and the
respective principal amounts of such other Indebtedness (or, in the case of
Indebtedness issued at a discount, the accreted value thereof) required to be
prepaid, purchased or redeemed or tendered for, in the case of the Notes
pursuant to such Collateral Sale Offer, to purchase the maximum aggregate
principal amount of Notes that may be purchased out of such pro rata portion of
the Excess Collateral Proceeds, at an offer price in cash in an amount equal to
100% of their aggregate principal amount plus accrued and unpaid interest (if
any) to the date of purchase subject to the right of Holders of record on a
record date to receive interest on the relevant interest payment date in
accordance with the procedures set forth in Section 3.09(a). The offer price in
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100% of the aggregate principal amount of the Notes, and the aggregate principal
amount outstanding of such other Pari Passu Indebtedness (or, in the case of
Indebtedness issued at a discount, the accreted value thereof), plus accrued and
unpaid interest, if any, to, but excluding, the date of purchase, and shall be
payable in cash, in each case, in minimum denominations of $2,000 and integral
multiples of $1,000 in excess thereof, except that if a premium is to be paid to
the holders of such other Indebtedness, such premium shall not be paid with the
Net Proceeds from Asset Sales. If any Excess Collateral Proceeds remain after
consummation of a Collateral Sale Offer, the Issuer may use those Excess
Collateral Proceeds for any purpose not otherwise prohibited by this Indenture.
If the aggregate principal amount of Notes and aggregate principal amount (or,
in the case of Indebtedness issued at a discount, the accreted value thereof)
outstanding of the Pari Passu Indebtedness tendered in such Collateral Sale
Offer exceeds the amount of Excess Collateral Proceeds, the portion of each Note
and Pari Passu Indebtedness to be purchased shall be determined by the Trustee
on a pro rata basis among the holders of such Notes and Pari Passu Indebtedness
with appropriate adjustments such that the Notes may only be purchased in
minimum denominations of $2,000 and integral multiples of $1,000 in excess
thereof. Upon completion of each Collateral Sale Offer or the application of
Excess Collateral Proceeds pursuant to this Section 5.08(a)(4), the amount of
Excess Proceeds will be reset at zero.

(5) Notwithstanding the foregoing, the Issuer or such Restricted Subsidiary
shall be deemed to have applied Net Proceeds from an Asset Sale or Recovery
Event if, within such 360-day period, the Issuer or such Restricted Subsidiary
has entered into a binding commitment or agreement to invest such Net Proceeds
and continues to use all commercially reasonable efforts to so apply such Net
Proceeds as soon as practicable thereafter, and no Collateral Sale Offer needs
to be launched unless there occurs any abandonment or termination of such
commitment or agreement after such 360-day period, in which case the Net
Proceeds not applied will constitute Excess Proceeds at such time.

(b) (1) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale (other than an
Asset Sale of Collateral) unless:

(i) the Issuer or such Restricted Subsidiary, as the case may be, receives
consideration at least equal to the fair market value of the assets or Equity
Interests issued or sold or otherwise disposed of (such fair market value to be
determined on the date of contractually agreeing to such Asset Sale);

(ii) the fair market value is determined by the Issuer’s Board of Directors and
evidenced by a resolution of such Board of Directors set forth in an Officers’
Certificate delivered to the Trustee; and

(iii) at least 75% of the consideration received in the Asset Sale by the Issuer
or such Restricted Subsidiary is in the form of cash or Cash Equivalents.

 

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(2) Within 360 days after the receipt of any Net Proceeds from an Asset Sale
(other than an Asset Sale of Collateral) or a Recovery Event (other than a
Recovery Event involving Collateral), the Issuer or any Restricted Subsidiary
may apply such Net Proceeds at its option to:

(i) repay, purchase or otherwise retire the Notes or other Indebtedness (and to
correspondingly reduce commitments with respect thereto) that is pari passu in
right of payment with the Notes; provided that the Issuer shall also equally and
ratably reduce Obligations under the Notes by making an offer (in accordance
with the procedures set forth in Section 5.08(b)(4) for an Excess Proceeds
Offer) to all Holders of Notes to purchase the pro rata principal amount of
Notes (on the basis of the aggregate principal amount of the Notes and the
principal amount of other Pari Passu Indebtedness tendered in such Excess
Proceeds Offer) at a purchase price equal to 100% of the principal amount
thereof, plus the amount of accrued but unpaid interest, if any, to the
repurchase date (subject to the right of the Holders of record on the relevant
record date to receive interest due on the relevant interest payment date);

(ii) repay or repurchase Indebtedness of a Restricted Subsidiary that is not a
Guarantor, other than Indebtedness owed to the Issuer or another of its
Restricted Subsidiaries; or

(iii) acquire or invest in Additional Assets.

(3) Notwithstanding the foregoing, the Issuer or such Restricted Subsidiary
shall be deemed to have applied Net Proceeds from an Asset Sale or Recovery
Event within such 360-day period if, within such 360-day period, the Issuer or
such Restricted Subsidiary has entered into a binding commitment or agreement to
invest such Net Proceeds and continues to use all commercially reasonable
efforts to so apply such Net Proceeds as soon as practicable thereafter, and no
Excess Proceeds Offer needs to be launched unless there occurs any abandonment
or termination of such commitment or agreement after such 360-day period, in
which case the Net Proceeds not so applied will constitute Excess Proceeds at
such time.

(4) Any Net Proceeds from Asset Sales (other than Asset Sales of Collateral) or
Recovery Events (other than Recovery Events relating to Collateral) that are not
applied or invested as provided in Section 5.08(b)(3) will constitute “Excess
Proceeds.” Subject to Section 5.08(b)(3), no later than the 365th day after the
Asset Sale or Recovery Event (or, at the Issuer’s option, an earlier date), if
the aggregate amount of Excess Proceeds exceeds $10.0 million, the Issuer shall:

(i) make an offer (an “Excess Proceeds Offer”) to all Holders of Notes; and

(ii) prepay, purchase or redeem (or make an offer to do so) any other
Indebtedness of the Issuer that is pari passu in right of payment with the Notes
in accordance with provisions governing such Indebtedness requiring the Issuer
to prepay, purchase or redeem such Indebtedness with the proceeds from any Asset
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pro rata in proportion to the principal amount of the Notes and the respective
principal or accreted amounts of such other Indebtedness required to be prepaid,
purchased or redeemed or tendered for, in the case of the Notes pursuant to such
Excess Proceeds Offer, to purchase the maximum aggregate principal amount of
Notes that may be purchased out of such pro rata portion of the Excess Proceeds,
at an offer price in cash in an amount equal to 100% of their aggregate
principal amount plus accrued and unpaid interest, if any, to the date of
purchase subject to the right of Holders of record on a record date to receive
interest on the relevant interest payment date in accordance with the procedures
set forth in Section 3.09(a). The offer price in any Excess Proceeds Offer will
be equal to 100% of the aggregate principal amount of the Notes and such other
Pari Passu Indebtedness, plus accrued and unpaid interest if any, to, but
excluding, the date of purchase, and will be payable in cash, in each case, in
minimum denominations of $2,000 and integral multiples of $1,000 in excess
thereof, except that if a premium is to be paid to the Holders of such other
Indebtedness, such premium shall not be paid with the Net Proceeds from Asset
Sales. If any Excess Proceeds remain after consummation of an Excess Proceeds
Offer, the Issuer may use those Excess Proceeds for any purpose not otherwise
prohibited by this Indenture. If the aggregate principal amount of Notes and the
principal amount or accreted value of the other Pari Passu Indebtedness tendered
in such Excess Proceeds Offer exceeds the amount of Excess Proceeds, the Excess
Proceeds will be allocated by the Issuer to the Notes and such other Pari Passu
Indebtedness on a pro rata basis as nearly as practicable (on the basis of the
aggregate principal amount of the Notes and the principal amount of other Pari
Passu Indebtedness tendered in such Excess Proceeds Offer) and the portion of
each Note to be purchased will thereafter be determined by the Trustee on a pro
rata basis among the Holders of such Notes with appropriate adjustments such
that the Notes may only be purchased in minimum denominations of $2,000 and
integral multiples of $1,000 in excess thereof. Upon completion of each Excess
Proceeds Offer, the amount of Excess Proceeds will be reset at zero.

(c) If the purchase date of a Collateral Sale Offer or Excess Proceeds Offer is
on or after an interest payment record date and on or before the related
interest payment date, any accrued and unpaid interest, if any, will be paid to
the Holder in whose name a Note is registered at the close of business on such
record date, and no interest will be payable to Holders who tender Notes
pursuant to the Collateral Sale Offer or Excess Proceeds Offer.

(d) Pending the final application of any Net Proceeds from an Asset Sale or
Recovery Event, the Issuer and its Restricted Subsidiaries may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by this Indenture.

 

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(e) For purposes of this Section 5.08, each of the following shall be deemed to
be cash:

(1) the amount of any liabilities, as shown on the most recent consolidated
balance sheet or in the notes thereto, of the Issuer or such Restricted
Subsidiary (other than contingent liabilities and liabilities that are by their
terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by
the transferee of any such assets, provided that the Issuer or such Restricted
Subsidiary is released from further liability;

(2) any securities, Notes or other obligations received by the Issuer or any
such Restricted Subsidiary from such transferee that are converted by the Issuer
or such Restricted Subsidiary into cash or Cash Equivalents (to the extent of
the cash or Cash Equivalents received in that conversion) within 180 days of
receipt thereof; and

(3) any stock or assets received as consideration for such Asset Sale that would
otherwise constitute a permitted application of Net Proceeds (or other cash in
such amount) under clauses (1), (2) or (4) of the definition of “Additional
Assets.”

SECTION 5.09 Change of Control.

(a) If a Change of Control occurs, unless all Notes have been called for
redemption pursuant to Section 3.07, the Issuer shall make an offer to each
Holder to repurchase all or any part of such Holder’s Notes pursuant to a Change
of Control Offer made pursuant to Section 3.09 at an offer price in cash (the
“Change of Control Payment”) equal to 101% of the principal amount of the Notes
repurchased, plus accrued and unpaid interest, if any, thereon to, but
excluding, the date of purchase.

(b) The Issuer shall not be required to make a Change of Control Offer upon a
Change of Control if (1) a third party makes the Change of Control Offer in the
manner, at the times and otherwise in compliance with the requirements set forth
in Section 3.09 applicable to a Change of Control Offer made by the Issuer and
purchases all Notes properly tendered and not withdrawn under such Change of
Control Offer or (2) notice of redemption has been given pursuant to
Section 3.07 unless and until there is a default in payment of the applicable
redemption price.

SECTION 5.10 Payments for Consent. The Issuer shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any
consideration to or for the benefit of any Holder of Notes for or as an
inducement to any consent, waiver or amendment of any of the terms or provisions
of this Indenture, the Notes, or the Collateral Documents or the Intercreditor
Agreement unless such consideration is offered to be paid and is paid to all
Holders of the Notes that consent, waive or agree to amend in the time frame set
forth in the solicitation documents relating to such consent, waiver or
agreement.

ARTICLE 6

DEFAULTS AND REMEDIES

SECTION 6.01 Events of Default and Remedies.

(a) Each of the following is an “Event of Default” under this Indenture:

(1) default for 30 days in the payment when due of interest on the Notes
(including the failure to deliver to the Holders of the Notes properly
authorized and authenticated Additional Notes issued in payment of interest and
including any additional interest payable pursuant to Interest Step-Ups);

 

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(2) default in the payment when due (at maturity, upon redemption or otherwise)
of the principal of or premium, if any, on, the Notes;

(3) failure by the Issuer or any of its Restricted Subsidiaries to comply with
Section 5.03;

(4) failure by the Issuer or any of its Restricted Subsidiaries for 30 days
after notice to the Issuer by the Trustee or the Holders of at least 25% in
aggregate principal amount of the Notes then outstanding to comply with
(a) Section 3.09 or Articles 4 or 5 or (b) any of its obligations under the
Collateral Documents;

(5) failure by the Issuer or any Restricted Entity for 60 days after notice to
the Issuer by the Trustee or the Holders of at least 25% in aggregate principal
amount of the Notes then outstanding to comply with any of the other covenants
or agreements in this Indenture;

(6) failure to pay at final maturity principal of any Indebtedness of the Issuer
or of any Restricted Entity (including Guarantees by the Issuer or any
Restricted Entity), whether such Indebtedness or Guarantee now exists or is
created after the Issue Date, prior to the expiration of the grace period after
final maturity provided in such Indebtedness or any such Indebtedness is
accelerated by the Holders thereof, in each case if the principal amount of all
such Indebtedness aggregates $10.0 million or more;

(7) failure by the Issuer or any Restricted Entity to pay final judgments
entered by a court or courts of competent jurisdiction (not subject to appeal)
aggregating in excess of $10.0 million (net of any amounts which a reputable and
creditworthy insurance company has acknowledged liability for in writing), which
judgments are not paid, discharged or stayed for a period of 60 days after the
date on which the right to appeal has expired;

(8) except as permitted by this Indenture, any Subsidiary Guarantee of a
Guarantor that is a Significant Subsidiary or is the FCC License Subsidiary, or
the Guarantee of a Canadian Entity, shall be held in any judicial proceeding to
be unenforceable or invalid or shall cease for any reason to be in full force
and effect, or the Issuer or any Guarantor that is a Significant Subsidiary or
is the FCC License Subsidiary, or is a Canadian Entity, or any Person acting on
behalf of the Issuer or any such Guarantor, shall deny or disaffirm its
obligations under its Guarantee and in the case of the Guarantee of a Canadian
Entity, such Guarantee has not been reinstated within 120 days of such event;

 

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(9) (i) the Issuer, any Restricted Subsidiary that is a Significant Subsidiary,
any group of Restricted Subsidiaries that, taken as a whole, would constitute a
Significant Subsidiary, the FCC License Subsidiary or any Canadian Entity
(unless such Canadian Entity has ceased to be a Guarantor at such time) shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it as bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian or other
similar official for it or for all or any substantial part of its assets, or the
Issuer, any Restricted Subsidiary that is a Significant Subsidiary, any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, the FCC License Subsidiary, or any Canadian Entity (unless such
Canadian Entity is not a Guarantor at such time) shall make a general assignment
for the benefit of its creditors; or (ii) there shall be commenced against the
Issuer, any Restricted Subsidiary that is a Significant Subsidiary, any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, the FCC License Subsidiary, or any Canadian Entity (unless such
Canadian Entity is not a Guarantor at such time) any case, proceeding or other
action of a nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Issuer, any Restricted Subsidiary
that is a Significant Subsidiary, any group of Restricted Subsidiaries that,
taken as a whole, would constitute a Significant Subsidiary, the FCC License
Subsidiary, or any Canadian Entity (unless such Canadian Entity is not a
Guarantor at such time) any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) the Issuer,
any Restricted Subsidiary that is a Significant Subsidiary, any group of
Restricted Subsidiaries that, taken as a whole, would constitute a Significant
Subsidiary, the FCC License Subsidiary, or any Canadian Entity (unless such
Canadian Entity is not a Guarantor at such time) shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; and

(10) (a) failure by the Issuer and the Guarantors to receive the U.S. FCC Letter
of Intent Authorization by July 31, 2008; or (b) a revocation, cancellation or
relinquishment of (i) the U.S. FCC Letter of Intent Authorization or (ii) any
FCC authorization held by the Issuer or a Restricted Subsidiary of the Issuer to
operate ancillary terrestrial component facilities, unless the revocation,
cancellation or relinquishment (x) remains subject to reconsideration, review,
or appeal at the FCC or any court, provided that during the pendency of such
reconsideration, review or appeal the Issuer is permitted to utilize the related
spectrum and continues to conduct its business in the ordinary course, or (y) is
accompanied by the issuance of a substitute or successor license, permit, or
authorization of substantially equivalent utility;

(11) a revocation, cancellation or relinquishment of the Industry Canada
License, which results in a loss of the orbital slot for TerreStar-1 or any
replacement satellite for TerreStar-1, unless such revocation, cancellation or
relinquishment (x) remains subject to reconsideration, review or appeal of
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provided that during the pendency of such reconsideration, review or appeal the
Issuer continues to conduct its businesses in the ordinary course or (y) is
accompanied by the issuance of a substitute or successor license, permit, or
authorization of substantially equivalent utility; and

(12) (a) any of the Collateral Documents at any time for any reason is declared
null and void, or shall cease to be effective in all material respects to give
the Collateral Agent, the Liens with the priority purported to be created
thereby subject to no other Liens with the priority purported to be created
thereby (in each case, other than as expressly permitted by this Indenture and
the applicable Collateral Documents or by reason of the termination of this
Indenture or the applicable Collateral Document in accordance with its terms),
or there occurs any enforcement action against the Collateral or (b) with
respect to any Collateral having a fair market value in excess of $10.0 million,
the Issuer or any Guarantor asserts, in any pleading in any court of competent
jurisdiction, that any such security interest is invalid or unenforceable.

(b) The foregoing shall constitute Events of Default whatever the reason for any
such Event of Default and whether it is voluntary or involuntary or is effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body.

SECTION 6.02 Acceleration.

(a) In the case of an Event of Default specified in clause (9) of Section 6.01
with respect to the Issuer, any Restricted Subsidiary of the Issuer that is a
Significant Subsidiary, the FCC License Subsidiary, any group of Restricted
Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary
or any Canadian Entity, all outstanding Notes will become due and payable
immediately without further action or notice. If any other Event of Default
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of the then outstanding Notes, by notice in writing
to the Trustee and the Issuer, may declare all the Notes to be due and payable.
Notwithstanding anything contained in this Indenture or the Notes to the
contrary, upon such a declaration, the principal of, premium, if any, and
accrued and unpaid interest, if any, on the Notes will become immediately due
and payable.

(b) In the event of a declaration of acceleration of the Notes because an Event
of Default described in clause (6) of Section 6.01 has occurred and is
continuing, the declaration of acceleration of the Notes shall be automatically
annulled if the event of default or payment default triggering such Event of
Default pursuant to clause (6) of Section 6.01 shall be remedied or cured by the
Issuer or a Restricted Entity or waived by the Holders of the relevant
Indebtedness within 20 days after the declaration of acceleration with respect
thereto and if (i) the annulment of the acceleration of the Notes would not
conflict with any judgment or decree of a court of competent jurisdiction and
(ii) all existing Events of Default, except nonpayment of principal, premium or
interest on the Notes that became due solely because of the acceleration of the
Notes, have been cured or waived.

 

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SECTION 6.03 Other Remedies. If an Event of Default occurs and is continuing,
the Trustee may pursue any available remedy to collect the payment of principal
of or interest on the Notes or to enforce the performance of any provision of
the Notes, the Guarantees, the Collateral Documents or the Intercreditor
Agreement.

The Trustee may maintain a proceeding even if it does not possess any of the
Notes or does not produce any of them in the proceeding. A delay or omission by
the Trustee or any Noteholder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative (to the extent permitted by law).

SECTION 6.04 Rescission of Acceleration; Waiver of Past Defaults. The Holders of
a majority in aggregate principal amount of the Notes then outstanding by notice
to the Trustee may on behalf of the Holders of all of the Notes rescind an
acceleration or waive any existing Default or Event of Default and its
consequences under this Indenture except a continuing Default or Event of
Default in the payment of principal of, or interest or premium, if any, on the
Notes. When a Default is waived, it is deemed cured and ceases to exist and any
Event of Default arising therefrom shall be deemed to have been cured and waived
for every purpose under this Indenture, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

SECTION 6.05 Control by Majority. The Holders of a majority in aggregate
principal amount of the Notes may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee by this Indenture.
However, the Trustee may refuse to follow any direction (a) that conflicts with
law, (b) that conflicts with the provisions of this Indenture, (c) if the board
of directors or trustees, or executive committee, or trust committee of
directors or trustees or trust officers of the Trustee determines in good faith
that the action or proceeding so directed would involve the Trustee in personal
liability or expense for which it is not adequately indemnified (as determined
by such body) or (d) subject to Section 7.01, that the Trustee determines is
unduly prejudicial to the rights of other Noteholders; provided, however, that
the Trustee may take any other action deemed proper by the Trustee that is not
inconsistent with such direction. Prior to taking any action hereunder, the
Trustee shall be entitled to indemnification satisfactory to it in its sole
discretion against all liability, losses and expenses caused by taking or not
taking such action.

SECTION 6.06 Limitation on Suits. Except to enforce the right to receive payment
of principal, premium, if any, or interest when due, no Noteholder may pursue
any remedy with respect to this Indenture, the Notes, any Guarantee, the
Collateral Documents or the Intercreditor Agreement unless:

(a) such Holder has previously given the Trustee notice that an Event of Default
is continuing;

(b) Holders of at least 25% in aggregate principal amount of the then
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(c) such Holders have offered the Trustee reasonable security or indemnity
against any loss, liability or expense;

(d) the Trustee has not complied with such request within 60 days after the
receipt of the request and the offer of security or indemnity; and

(e) the Holders of a majority in aggregate principal amount of the then
outstanding Notes have not given the Trustee a direction inconsistent with such
request within such 60-day period.

A Noteholder shall not use this Indenture to prejudice the rights of another
Noteholder or to obtain a preference or priority over another Noteholder.

SECTION 6.07 Rights of Holders to Receive Payment. Notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of and interest on the Notes held by such Holder, on or after the
respective due dates expressed in the Notes, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.

SECTION 6.08 Collection Suit by Trustee. If an Event of Default specified in
Section 6.01(a)(1) or (2) occurs and is continuing, the Trustee may obtain
judgment in its own name and as trustee of an express trust against the Issuer
for the whole amount then due and owing (together with interest on any unpaid
interest to the extent lawful) and the amounts provided for in Section 7.06.

SECTION 6.09 Trustee May File Proofs of Claim. The Trustee may file such proofs
of claim and other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee and the Noteholders allowed in any judicial
proceedings relative to the Issuer, any Subsidiary or any Guarantor, their
creditors or their property and, unless prohibited by law or applicable
regulations, may vote on behalf of the Holders in any election of a trustee in
bankruptcy or other Person performing similar functions, and any Custodian in
any such judicial proceeding is hereby authorized by each Holder to make
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and its counsel, and any other amounts due
the Trustee under Section 7.06.

SECTION 6.10 Priorities. If the Trustee collects any money or property pursuant
to this Article 6, it shall pay out the money or property in the following
order:

FIRST: to the Trustee for amounts due under Section 7.06;

SECOND: to Noteholders for amounts due and unpaid on the Notes for principal and
interest, ratably, without preference or priority of any kind, according to the
amounts due and payable on the Notes for principal and interest, respectively;
and

THIRD: to the Issuer.

 

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The Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section. At least 15 days before such record date,
the Trustee shall mail to each Noteholder and the Issuer a notice that states
the record date, the payment date and amount to be paid.

SECTION 6.11 Undertaking for Costs. In any suit for the enforcement of any right
or remedy under this Indenture or in any suit against the Trustee for any action
taken or omitted by it as Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys’ fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section does not apply to a suit by the Trustee, a suit
by a Holder pursuant to Section 6.06 or a suit by Holders of more than 10% in
principal amount of the Notes.

SECTION 6.12 Waiver of Stay or Extension Laws. Neither the Issuer nor any
Guarantor (to the extent they may lawfully do so) shall at any time insist upon,
or plead, or in any manner whatsoever claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, which may affect the covenants or the performance of this Indenture; and
the Issuer and each Guarantor (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such law, and shall not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but shall suffer and permit the execution of every such power as though
no such law had been enacted.

SECTION 6.13 Rights and Remedies Cumulative. No right or remedy conferred or
reserved to the Trustee or to the Holders under this Indenture is intended to be
exclusive of any other right or remedy, and all such rights and remedies are, to
the extent permitted by law, cumulative and in addition to every other right and
remedy hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or exercise of any right or remedy hereunder, or otherwise, will
not prevent the concurrent or subsequent assertion or exercise of any other
right or remedy.

SECTION 6.14 Delay or Omission Not Waiver. No delay or omission of the Trustee
or of any Holder to exercise any right or remedy accruing upon any Event of
Default will impair any such right or remedy or constitute a waiver of any such
Event of Default or an acquiescence therein. Every right and remedy given by
this Article 6 or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.

ARTICLE 7

TRUSTEE

SECTION 7.01 Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent Person would exercise or
use under the circumstances in the conduct of such Person’s own affairs.

 

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(b) Except during the continuance of an Event of Default:

(1) the Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture against the Trustee; and

(2) in the absence of bad faith on its part, the Trustee may conclusively rely,
as to the truth of the statements and the correctness of the opinions expressed
therein, upon statements, certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture. However, in the case of any
such statements, certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee shall examine
the statements, certificates and opinions to determine whether or not they
conform on their face to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or other facts
stated therein).

(c) The Trustee shall not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:

(1) this paragraph does not limit the effect of Section 7.01(b);

(2) the Trustee shall not be liable for any error of judgment made in good faith
by a Trust Officer or Trust Officers unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and

(3) the Trustee shall not be liable with respect to any action it takes or omits
to take in good faith in accordance with a direction received by it from any
party authorized to direct the Trustee under this Indenture.

(d) Every provision of this Indenture that in any way relates to the Trustee is
subject to paragraphs (a), (b) and (c) of this Section.

(e) The Trustee shall not be liable for interest on any money received by it
except as the Trustee may agree in writing with the Issuer.

(f) Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.

(g) No provision of this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur any potential or actual liability or expense
(financial or otherwise) in the performance of any of its duties hereunder or in
the exercise of any of its rights or powers, if it shall have reasonable grounds
to believe that repayment of such funds or adequate indemnity against such risk
or liability or expense is not reasonably assured to it.

SECTION 7.02 Rights of Trustee. Subject to Section 7.01:

(a) The Trustee may conclusively rely, and shall be protected in acting or
refraining from acting, upon any document believed by it to be genuine and to
have been signed or presented by the proper person. The Trustee need not
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(b) Before the Trustee acts or refrains from acting, it may require an Officers’
Certificate or an Opinion of Counsel. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on such Officers’
Certificate or Opinion of Counsel.

(c) The Trustee may act through agents and shall not be responsible for the
misconduct or negligence of any agent appointed with due care; provided, that
such agent’s conduct does not constitute willfull misconduct or gross negligence
with respect to Canadian Communications Statutes that restrict or prohibit such
action.

(d) The Trustee shall not be liable for any action it takes or omits to take in
good faith which it believes to be authorized or within its rights or powers;
provided, however, that the Trustee’s conduct does not constitute willful
misconduct or gross negligence.

(e) The Trustee may consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

(f) The Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond, debenture, note or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Issuer, personally or by agent or attorney at the sole cost of the Issuer
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation.

(g) The Trustee shall not be required to give any note, bond or surety in
respect of the execution of the trusts and powers under this Indenture.

(h) The permissive rights of the Trustee to take any action enumerated in this
Indenture shall not be construed as a duty to take such action.

(i) The rights, privileges, protections, immunities and benefits given to the
Trustee, including its right to be indemnified, are extended to, and shall be
enforceable by, the Trustee in each of its capacities hereunder, including as
the Collateral Agent under the Security Agreements, and to each agent, custodian
and other Person employed to act hereunder.

(j) The Trustee may request that the Issuer deliver an Officers’ Certificate
setting forth the names of individuals and/or titles of officers authorized at
such time to take specified actions pursuant to this Indenture, which Officers’
Certificate may be signed by any person authorized to sign an Officers’
Certificate, including any person specified as so authorized in any such
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(k) Unless otherwise specifically provided in this Indenture, any demand,
request, direction or notice from the Issuer will be sufficient if signed by an
Officer of the Issuer.

(l) [Reserved].

(m) The Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders, unless such Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that might be
incurred by it in compliance with such request or direction.

(n) In no event shall the Trustee be responsible or liable for special, indirect
or consequential loss or damage of any kind whatsoever (including, but not
limited to, loss of profit) irrespective of whether the Trustee has been advised
of the likelihood of such loss or damage and regardless of the form of action.

(o) The Trustee shall not be responsible or liable for any failure or delay in
the performance of its obligations under this Indenture arising out of or
caused, directly or indirectly, by circumstances beyond its reasonable control,
including acts of God, earthquakes, fire, flood, terrorism, wars and other
military disturbances, sabotage, epidemics, riots, interruptions, loss or
malfunction of utilities, computer (hardware or software) or communications
services, accidents, labor disputes, acts of civil or military authorities and
governmental action.

(p) The Trustee shall have no duty to inquire as to the performance of the
Issuer with respect to the covenants contained in Articles 4 or 5. Delivery of
reports, information and documents to the Trustee under Article 4 is for
informational purposes only, and the Trustee’s receipt of the foregoing shall
not constitute constructive notice of any information contained therein or
determinable from information contained therein, including Issuer’s compliance
with any of its covenants hereunder.

SECTION 7.03 Individual Rights of Trustee. The Trustee in its individual or any
other capacity may become the owner or pledgee of Notes and may otherwise deal
with the Issuer or its Affiliates with the same rights it would have if it were
not Trustee. However, the Trustee is subject to Sections 7.09 and 7.10.

SECTION 7.04 Trustee’s Disclaimer. The Trustee shall not be responsible for and
makes no representation as to the validity or adequacy of this Indenture or the
Notes, it shall not be accountable for the Issuer’s use of the proceeds from the
Notes, and it shall not be responsible for any statement of the Issuer in this
Indenture or in any document issued in connection with the sale of the Notes or
in the Notes other than the Trustee’s certificate of authentication.

SECTION 7.05 Notice of Defaults. If a Default occurs and is continuing and is
known to the Trustee, the Trustee shall mail to each Holder notice of the
Default. Except in the case of a Default in the payment of principal of,
premium, if any, or interest on any Note, the Trustee may withhold notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding notice is in the interests of Noteholders. The Issuer shall deliver
to the Trustee, forthwith upon any Officer obtaining actual knowledge of any
Default, written notice of any event which would constitute such Default, its
status and what action the Issuer is taking or proposes to take in respect
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in this Indenture, the Trustee shall not be deemed to have knowledge of any
Default or Event of Default hereunder, except in the case of an Event of Default
under Section 6.01(a)(1) or (2) (provided that the Trustee is Paying Agent),
unless and until a Trust Officer receives written notice thereof at its
Corporate Trust Office, from the Issuer or a Holder that such Default has
occurred and such notice references this Indenture and the Notes.

SECTION 7.06 Compensation and Indemnity. The Issuer shall pay to the Trustee
from time to time such compensation as is agreed to in writing by the Trustee
and Issuer for the Trustee’s services hereunder. The Trustee’s compensation
shall not be limited by any law on compensation of a trustee of an express
trust. The Issuer shall reimburse the Trustee upon request for all reasonable
out-of-pocket disbursements, advances and expenses incurred or made by it,
including but not limited to costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses of the Trustee’s agents, counsel, accountants and
experts. The Issuer and each Guarantor, jointly but not severally, shall
indemnify and defend the Trustee and its officers, directors, shareholders,
agents and employees (each, an “Indemnified Party”) for and hold each
Indemnified Party harmless against any and all loss, damage, claims, liability
or expense (including reasonable attorneys’ fees and expenses) including taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee) incurred by them without negligence or bad faith on their part arising
out of or in connection with the acceptance or administration of this Indenture
or the Notes and the performance of their duties hereunder, including the cost
and expense of enforcing this Indenture against the Issuer (including this
Section 7.06), and defending itself against or investigating any claim or
liability (whether asserted by a Holder or any other person). The Trustee, in
its capacity as Paying Agent, Collateral Agent, Registrar, Custodian and agent
for service of notice and demands, and the Trustee’s officers, directors,
shareholders, agents and employees, when acting in such other capacity, shall
have the full benefit of the foregoing indemnity as well as all other benefits,
rights and privileges accorded to the Trustee in this Indenture when acting in
such other capacity. The Trustee shall notify the Issuer of any claim for which
it may seek indemnity promptly upon obtaining actual knowledge thereof; provided
that any failure so to notify the Issuer shall not relieve the Issuer or any
Guarantor of its indemnity obligations hereunder. The Issuer shall defend the
claim and the Indemnified Parties shall provide reasonable cooperation at the
Issuer’s expense in the defense. Such Indemnified Parties may have separate
counsel and the Issuer shall pay the fees and expenses of such counsel; provided
that the Issuer shall not be required to pay such fees and expenses if it
assumes such Indemnified Parties’ defense and, in such Indemnified Parties’
reasonable judgment, there is no conflict of interest between the Issuer and
such parties in connection with such defense. The Issuer need not reimburse any
expense or indemnify against any loss, liability or expense incurred by an
Indemnified Party through such party’s own willful misconduct, negligence or bad
faith. The Issuer need not pay any settlement made without its consent (which
consent shall not be unreasonably withheld).

The Trustee’s right to receive payment of any amounts due under this Indenture
shall not be subordinated to any other Indebtedness of the Issuer, and the Notes
shall be subordinate to the Trustee’s rights to receive such payment.

The Issuer’s payment obligations pursuant to this Section shall survive the
satisfaction or discharge of this Indenture, any rejection or termination of
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Law or the resignation or removal of the Trustee. When the Trustee incurs
expenses after the occurrence of a Default specified in Section 6.01(a)(9) with
respect to the Issuer, the expenses are intended to constitute expenses of
administration under the Bankruptcy Law.

SECTION 7.07 Replacement of Trustee. The Trustee may resign at any time by so
notifying the Issuer in writing. The Holders of a majority in principal amount
of the Notes may remove the Trustee by so notifying the Trustee and the Issuer
in writing and may appoint a successor Trustee. The Issuer shall remove the
Trustee if:

(a) the Trustee is adjudged bankrupt or insolvent;

(b) a receiver or other public officer takes charge of the Trustee or its
property; or

(c) the Trustee otherwise becomes incapable of acting.

If the Trustee resigns, is removed by the Issuer or by the Holders of a majority
in principal amount of the Notes and such Holders do not reasonably promptly
appoint a successor Trustee, or if a vacancy exists in the office of Trustee for
any reason (the Trustee in such event being referred to herein as the “retiring
Trustee”), the Issuer shall promptly appoint a successor Trustee.

A successor Trustee shall deliver a written acceptance of its appointment to the
retiring Trustee and to the Issuer. Thereupon the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Noteholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee.

If a successor Trustee does not take office within 60 days after the retiring
Trustee resigns or is removed, the retiring Trustee or the Holders of at least
10% in aggregate principal amount of the Notes may petition any court of
competent jurisdiction for the appointment of a successor Trustee at the expense
of the Issuer.

Notwithstanding the replacement of the Trustee pursuant to this Section, the
Issuer’s and Guarantors’ obligations under Section 7.06 shall continue for the
benefit of the retiring Trustee.

SECTION 7.08 Successor Trustee by Merger, Etc. If the Trustee consolidates with,
merges or converts into, or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee, provided, that such Person shall be qualified and
eligible under this Article 7.

In case at the time such successor or successors by consolidation, merger,
conversion or transfer shall succeed to the trusts created by this Indenture,
any of the Notes shall have been authenticated but not delivered, any such
successor to the Trustee may adopt the certificate of authentication of any
predecessor trustee, and deliver such Notes so authenticated; and in case at
that time any of the Notes shall not have been authenticated, any successor to
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authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Trustee; and in all such cases such certificate
shall have the full force which it is anywhere in the Notes or this Indenture
provided that the certificate of the Trustee shall have.

SECTION 7.09 Eligibility; Disqualification. The Trustee shall always satisfy the
requirements of paragraphs (1), (2) and (5) of TIA Section 310(a). The Trustee
(or its parent holding company) shall have a combined capital and surplus of at
least $50,000,000. If at any time the Trustee shall cease to satisfy any such
requirements, it shall resign immediately in the manner and with the effect
specified in this Article 7. The Trustee shall be subject to the provisions of
TIA Section 310(b). Nothing herein shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).

SECTION 7.10 Preferential Collection of Claims against the Issuer. The Trustee
shall comply with TIA Section 311(a), excluding any creditor relationship listed
in TIA Section 311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.

SECTION 7.11 Disqualification; Conflicting Interests. If the Trustee has or
shall acquire a conflicting interest within the meaning of the TIA, the Trustee
shall either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the TIA and this Indenture.

SECTION 7.12 Acknowledgement of Trustee. The Trustee acknowledges that it has
received a copy of the Registration Rights Agreement, dated as of September 25,
2006 (the “Registration Rights Agreement”), by and between Motient and SkyTerra
and agrees, upon its becoming owner of, or obtaining dispositive authority with
respect to or in connection with any disposition of the Resale Shares (as
defined in the Registration Rights Agreement) to be bound by the provisions of
the Registration Rights Agreement, in connection with any right it may have to
dispose of any such Resale Shares. Further, the Trustee agrees to become bound
by Section 4.7 of the Exchange Agreement dated as of May 6, 2006 (the “Exchange
Agreement”) by and among Motient, Motient Ventures Holding Inc. and SkyTerra.
SkyTerra shall be a third party beneficiary of this provision.

ARTICLE 8

DISCHARGE OF INDENTURE; DEFEASANCE

SECTION 8.01 Legal Defeasance and Covenant Defeasance.

(a) The Issuer may, at the option of its Board of Directors evidenced by a
resolution set forth in an Officers’ Certificate, at any time, elect to have
either Section 8.01(b) or 8.01(c) be applied to all outstanding Notes upon
compliance with the conditions set forth below in this Article 8.

(b) Upon the Issuer’s exercise under Section 8.01(a) of the option applicable to
this Section 8.01(b), the Issuer and each Guarantor shall, subject to the
satisfaction of the conditions set forth in Section 8.02, be deemed to have been
discharged from their obligations with respect to the Notes, the Collateral
Documents and any Guarantee on the date the conditions set forth below are
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Defeasance means that the Issuer and each Guarantor shall be deemed to have paid
and discharged the entire Indebtedness represented by the outstanding Notes and
any Guarantee, which Notes and Guarantee shall thereafter be deemed to be
“outstanding” only for the purposes of Section 8.04 and the other Sections of
this Indenture referred to in (i) and (ii) below, and to have satisfied all
their other obligations under the Notes and this Indenture (and the Trustee, on
demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging the same), except for the following provisions which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders of
outstanding Notes to payments in respect of the principal of, or interest or
premium, if any, on such Notes when such payments are due from the funds in the
trust described in this Article 8, (ii) the Issuer’s obligations with respect to
the Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust; (iii) the rights, powers,
trusts, duties and immunities of the Trustee, and the Issuer’s and the
Guarantor’s obligations in connection therewith and (iv) this Section 8.01 and
Section 8.02. Subject to compliance with this Article 8, the Issuer may exercise
its Legal Defeasance option notwithstanding the prior exercise of its Covenant
Defeasance option.

(c) Upon the Issuer’s exercise under Section 8.01(a) of the option applicable to
this Section 8.01(c) subject to the satisfaction of the conditions set forth in
Section 8.02, each Guarantor shall be released from its Guarantee and the Issuer
and each Guarantor shall be released from their obligations under Sections 4.01
through 4.09 and 5.01 through 5.10 with respect to the outstanding Notes on and
after the date the conditions set forth below are satisfied (hereinafter,
“Covenant Defeasance”), and the Notes shall thereafter be deemed not
“outstanding” for the purposes of any direction, waiver, consent or declaration
of act of Holders (and the consequences of any thereof) in connection with such
Sections, but shall continue to be deemed “outstanding” for all the other
purposes hereunder. For this purpose, Covenant Defeasance means that, with
respect of any term, condition or limitation set forth in any such Section,
whether directly or indirectly, by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document and such omission to comply shall not
constitute a Default or Event of Default, but, except as specified above, the
remainder of this Indenture and such Notes shall be unaffected thereby. In
addition, upon the Issuer’s exercise of its Covenant Defeasance option, subject
to the satisfaction of the conditions set forth in Section 8.02,
Sections 6.01(a)(3) (solely as it relates to Section 5.03(a)(4)), 6.01(a)(4)
(other than with respect to compliance with Section 4.01), 6.01(a)(5),
6.01(a)(6), 6.01(a)(7), 6.01(a)(10), 6.01(a)(11) and 6.01(a)(12) shall not
constitute Events of Default with respect to the Notes and the Guarantees.

SECTION 8.02 Conditions to Legal or Covenant Defeasance. In order to exercise
either Legal Defeasance or Covenant Defeasance:

(a) the Issuer must irrevocably deposit with the Trustee (or another qualifying
trustee; for purposes of this Section 8.02 and Section 8.04, the term “Trustee”
shall include such other qualifying trustee), in trust, for the benefit of the
Holders, cash in U.S. dollars, non-callable Government Notes, or a combination
thereof, in such amounts as shall be sufficient (without reinvestment), in the
opinion of a nationally recognized firm of independent public accountants, to
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Maturity or on the applicable redemption date, as the case may be, and the
Issuer must specify whether the Notes are being defeased to maturity or to a
particular redemption date;

(b) in the case of Legal Defeasance, the Issuer shall have delivered to the
Trustee an Opinion of Counsel in the United States reasonably acceptable to the
Trustee confirming, subject to customary assumptions and exclusions, that:
(A) the Issuer has received from, or there has been published by, the U.S.
Internal Revenue Service a ruling or (B) since the Issue Date, there has been a
change in the applicable federal income tax law, in either case to the effect
that, the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Legal Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal Defeasance had
not occurred;

(c) in the case of Covenant Defeasance, the Issuer shall have delivered to the
Trustee an Opinion of Counsel in the United States, reasonably acceptable to the
Trustee confirming, subject to customary assumptions and exclusions, that the
Holders of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and at the
same times as would have been the case if such Covenant Defeasance had not
occurred;

(d) no Default or Event of Default (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit and the
grant of any Lien securing such borrowing) shall have occurred and be continuing
on the date of such deposit and the deposit or such Lien shall not result in a
breach or violation of, or constitute a default under, any other instrument to
which the Issuer or any Guarantor is a party or by which the Issuer or any
Guarantor is bound or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 91st day after the
date of deposit;

(e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any material agreement or
instrument (other than this Indenture) to which the Issuer or any of its
Restricted Subsidiaries is a party or by which the Issuer or any of its
Restricted Subsidiaries is bound;

(f) the Issuer shall have delivered to the Trustee an Opinion of Counsel to the
effect that after the 91st day following the deposit, no trust funds shall be
subject to the effect of Section 547 of the United States Bankruptcy Code or any
analogous New York State law provision or any other applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors’ rights
generally;

(g) the Issuer shall have delivered to the Trustee an Officers’ Certificate
stating that the deposit was not made by the Issuer with the intent of
preferring the Holders over the other creditors of the Issuer or with the intent
of defeating, hindering, delaying or defrauding creditors of the Issuer or
others; and

(h) the Issuer shall have delivered to the Trustee an Officers’ Certificate and
an Opinion of Counsel (which Opinion of Counsel may be subject to customary
assumptions and exclusions), each stating that all conditions precedent relating
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SECTION 8.03 Satisfaction and Discharge of Indenture. Upon the request of the
Issuer, this Indenture shall cease to be of further effect (except as to
surviving rights of registration of transfer or exchange of the Notes, as
expressly provided for herein or pursuant hereto), the Issuer and the Guarantors
shall be discharged from their obligations under the Notes and the Guarantees,
and the Trustee, at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, the Guarantees and
the Notes when:

(a) either (i) all the Notes theretofore authenticated and delivered (other than
mutilated, destroyed, lost or stolen Notes that have been replaced or paid) have
been delivered to the Trustee for cancellation or (ii) all Notes not theretofore
delivered to the Trustee for cancellation (A) have become due and payable by
reason of the mailing of a notice of redemption or otherwise, (B) will become
due and payable at maturity within one year or (C) are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee in the name, and at the
expense, of the Issuer, and the Issuer, in the case of each of (A), (B) or
(C) above, has irrevocably deposited or caused to be deposited with the Trustee
as trust funds in trust solely for the benefit of the Holders, cash in U.S.
dollars, non-callable Government Notes, or a combination of cash in U.S. dollars
and non-callable Government Notes, in amounts as will be sufficient without
consideration of any reinvestment of interest, to pay and discharge the entire
Indebtedness on the Notes not theretofore delivered to the Trustee for
cancellation for principal and premium, if any, and accrued interest to the date
of such deposit (in the case of Notes that have become due and payable) or to
the Stated Maturity or redemption date, as the case may be;

(b) no Default or Event of Default has occurred and is continuing on the date of
the deposit or will occur as a result of such deposit (other than a Default or
Event of Default resulting from the borrowing of funds to be applied to such
deposit and the grant of any Lien to secure such borrowing) and the deposit will
not result in breach or violation of, or constitute a default under, any other
instrument to which the Issuer or any Guarantor is a party or by which the
Issuer or any Guarantor is bound;

(c) the Issuer or any Guarantor has paid or caused to be paid all sums payable
under this Indenture by the Issuer or any Guarantor;

(d) the Issuer has delivered irrevocable instructions to the Trustee under this
Indenture to apply the deposited money toward the payment of the Notes at
maturity or on the redemption date, as the case may be; and

(e) the Issuer has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel (which Opinion of Counsel may be subject to customary
assumptions and exclusions), each stating that all conditions precedent provided
in this Indenture relating to the satisfaction and discharge of this Indenture,
the Guarantees and the Notes have been complied with.

 

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Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 7.06 and, if money shall
have been deposited with the Trustee pursuant to clause (a)(ii) of this Section,
the obligations of the Trustee and the Paying Agent under Section 8.04 and
Section 2.04 shall survive.

SECTION 8.04 Deposited Money and Government Notes to Be Held in Trust;
Miscellaneous Provisions. Subject to Section 8.05, all money and Government
Notes (including the proceeds thereof) deposited with the Trustee pursuant to
Section 8.02 or 8.03 in respect of the outstanding Notes shall be held in trust
and applied by the Trustee, in accordance with the provisions of such Notes and
this Indenture, to the payment, either directly or through any Paying Agent
(including the Issuer acting as Paying Agent) as the Trustee may determine, to
the Holders of such Notes of all sums due and to become due thereon in respect
of principal, premium, if any, and interest, but such money need not be
segregated from other funds except to the extent required by law.

Anything in this Article 8 to the contrary notwithstanding, the Trustee shall
deliver or pay to the Issuer from time to time upon the request of the Issuer
any money or Government Notes held by it as provided in Section 8.02 or 8.03
which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the
Trustee (which may be the opinion delivered under Section 8.02(a)), are in
excess of the amount thereof that would then be required to be deposited to
effect an equivalent Legal Defeasance or Covenant Defeasance.

SECTION 8.05 Repayment to Issuer. Any money deposited with the Trustee or any
Paying Agent, or then held by the Issuer, in trust for the payment of the
principal of, premium or interest on any Note and remaining unclaimed for two
years after such principal, premium or interest has become due and payable shall
be paid to the Issuer on its request or (if then held by the Issuer) shall be
discharged from such trust; and the Holder of such Note shall thereafter, as an
unsecured general creditor, look only to the Issuer for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Issuer as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Issuer, cause to be
published once, in the New York Times (national edition) and the Wall Street
Journal (national edition), notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such notification or publication, any unclaimed balance of such money
then remaining shall be repaid to the Issuer.

SECTION 8.06 Reinstatement. If the Trustee or Paying Agent is unable to apply
any U.S. dollars or Government Notes in accordance with this Article 8 by reason
of any order or judgment of any court or governmental authority enjoining,
restraining or otherwise prohibiting such application, then the Issuer’s
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 8 until such time as
the Trustee or Paying Agent is permitted to apply all such money in accordance
with this Article 8; provided, however, that, if the Issuer or any Guarantor
makes any payment of principal of, premium or interest on any Note following the
reinstatement of its obligations, the Issuer or any Guarantor, as the case may
be, shall be subrogated to the rights of the Holders of such Notes to receive
such payment from the money held by the Trustee or Paying Agent.

 

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ARTICLE 9

AMENDMENTS

SECTION 9.01 Without Consent of Holders. The Issuer, the Guarantors and the
Trustee may amend or supplement this Indenture, the Notes, the Guarantees, the
Collateral Documents or the Intercreditor Agreement without notice to or consent
of any Holder of Notes to:

(a) cure any ambiguity, defect or inconsistency;

(b) provide for uncertificated Notes in addition to or in place of certificated
Notes;

(c) provide for the assumption of the Issuer’s or any Guarantor’s obligations to
Holders of Notes and Guarantees in the case of a merger, consolidation or sale
of all or substantially all of the Issuer’s or such Guarantor’s assets, as
applicable;

(d) make any change that would provide any additional rights or benefits to the
Holders of Notes or that does not adversely affect the legal rights of any such
Holder under this Indenture, the Notes, the Guarantees, the Collateral Documents
or the Intercreditor Agreement, in any material respect;

(e) provide for the issuance of Additional Notes in accordance with the
provisions set forth in this Indenture;

(f) evidence and provide for the acceptance of an appointment of a successor
trustee;

(g) conform the text of this Indenture, the Notes, the Guarantees, the
Collateral Documents or the Intercreditor Agreement to any provision of the
“Description of notes” in the Offering Memorandum, to the extent that such
provision was intended to be a verbatim recitation of a provision of this
Indenture, the Notes, the Guarantees, the Collateral Documents or the
Intercreditor Agreement;

(h) release a Guarantor from its obligations under its Guarantee, the Notes or
this Indenture in accordance with the applicable provisions of this Indenture;

(i) add Guarantees with respect to the Notes;

(j) add additional Collateral to secure the Notes;

(k) release Liens in favor of the Collateral Agent in the Collateral as provided
under Section 11.02;

 

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(l) comply with the rules of any applicable securities depositary or, if
required, with the requirements of the Commission in order to effect or maintain
the qualification of this Indenture under the TIA; or

(m) provide for the accession or succession of any parties to the Collateral
Documents and/or to the Intercreditor Agreement (and other amendments that are
administrative or ministerial in nature) in connection with an amendment,
renewal, extension, substitution, refinancing, restructuring, replacement,
supplementing or other modification from time to time of a Credit Facility or
any other agreement or action that is not prohibited by this Indenture or to
permit the Liens with respect to Indebtedness that is permitted by this
Indenture to be equally and ratably secured.

After an amendment under this Section becomes effective, the Issuer shall mail
to the Holders a notice briefly describing such amendment. The failure to give
such notice to all the Holders, or any defect therein, shall not impair or
affect the validity of an amendment under this Section.

SECTION 9.02 With Consent of Holders. The Issuer, the Guarantors and the Trustee
may amend or supplement this Indenture, the Notes, the Guarantees, the
Collateral Documents or the Intercreditor Agreement without notice to any Holder
but with the written consent of the Holders of at least a majority in aggregate
principal amount of the Notes then outstanding (including consents obtained in
connection with a purchase of, or tender offer or exchange offer for, Notes),
and any existing Default or Event of Default or compliance with any provision of
this Indenture, the Notes or the Guarantees may be waived with the consent of
the Holders of a majority in aggregate principal amount, of the then outstanding
Notes (including consents obtained in connection with a purchase of, or tender
offer or exchange offer for, Notes). Notwithstanding the foregoing, without the
consent of each Holder affected, an amendment or waiver shall not (with respect
to any Notes held by a non-consenting Holder):

(a) reduce the principal amount of the Notes whose Holders must consent to an
amendment, supplement or waiver;

(b) reduce the principal of (or premium on) or change the fixed maturity of any
Note, reduce any premium payable upon, or change the dates (to earlier dates)
of, redemption of any Note (other than Section 5.08 or 5.09);

(c) reduce the rate of or change the time for payment of interest on any Note;

(d) waive a Default or Event of Default in the payment of principal of or
interest or premium, if any, on, the Notes (except a rescission of acceleration
of the Notes by the Holders of at least a majority in aggregate principal amount
of the then outstanding Notes and a waiver of the payment default that resulted
from such acceleration);

(e) make any Note payable in currency other than that stated in the Notes;

(f) make any change in the provisions of this Indenture relating to waivers of
past Defaults or the rights of Holders of Notes to receive payments of principal
of, or interest or premium, if any, on, the Notes or to institute suit for the
enforcement of any payment on or with respect to such Holder’s Notes;

 

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(g) release any Guarantor that is a Significant Subsidiary from any of its
obligations under its Subsidiary Guarantee or this Indenture, except in
accordance with the terms of this Indenture;

(h) modify any Collateral Document or the provisions in this Indenture dealing
with the Collateral Documents or application of trust moneys in any manner
adverse to the Holders of the Notes or otherwise release any material Collateral
other than in accordance with this Indenture, the Collateral Documents and the
Intercreditor Agreement;

(i) modify the Intercreditor Agreement in any manner adverse to the Holders of
the Notes in any material respect other than in accordance with the terms of
this Indenture, the Collateral Documents and the Intercreditor Agreement;

(j) make any change in Section 9.01 or this Section 9.02; or

(l) except as permitted by the Security Agreements or Section 11.06, release all
or substantially all of the Collateral.

It shall not be necessary for the consent of the Holders under this Section 9.02
to approve the particular form of any proposed amendment or waiver, but it shall
be sufficient if such consent approves the substance thereof. A consent to any
amendment or waiver under this Indenture by any Holder of Notes given in
connection with a tender of such Holder’s Notes will not be rendered invalid by
such tender.

After an amendment under this Section becomes effective, the Issuer shall mail
to the Holders a notice briefly describing such amendment. However, the failure
to give such notice to all the Holders, or any defect therein, shall not impair
or affect the validity of an amendment under this Section.

SECTION 9.03 Revocation and Effect of Consents and Waivers. A consent to an
amendment or a waiver by a Holder of a Note shall bind the Holder and every
subsequent Holder of that Note or portion of the Note that evidences the same
debt as the consenting Holder’s Note, even if notation of the consent or waiver
is not made on the Note. However, any such Holder or subsequent Holder may
revoke the consent or waiver as to such Holder’s Note or portion of the Note if
the Trustee receives written notice of revocation before the date the requisite
number of consents are received by the Issuer or the Trustee. After an amendment
or waiver becomes effective, it shall bind every Noteholder. An amendment or
waiver becomes effective once the requisite number of consents are received by
the Issuer or the Trustee and any other conditions to effectiveness of such
consent specified in the amendment or waiver are satisfied.

The Issuer may, but shall not be obligated to, fix a record date for the purpose
of determining the Noteholders entitled to give their consent or take any other
action described above or required or permitted to be taken pursuant to this
Indenture. If a record date is fixed, then notwithstanding the immediately
preceding paragraph, those Persons who were Noteholders at such record date (or
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give such consent or to revoke any consent previously given or to take any such
action, whether or not such Persons continue to be Holders after such record
date.

SECTION 9.04 Notation on or Exchange of Notes. If an amendment changes the terms
of a Note, the Trustee may require the Holder of the Note to deliver it to the
Trustee. The Trustee may place an appropriate notation on the Note regarding the
changed terms and return it to the Holder. Alternatively, if the Issuer or the
Trustee so determines, the Issuer in exchange for the Note shall issue and the
Trustee shall authenticate a new Note that reflects the changed terms. Failure
to make the appropriate notation or to issue a new Note shall not affect the
validity of such amendment.

SECTION 9.05 Trustee to Sign Amendments. The Trustee shall sign any amendment
authorized pursuant to this Article 9 if the amendment does not adversely affect
the rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may but need not sign it. In signing such amendment the Trustee shall be
entitled to receive indemnity reasonably satisfactory to it and to receive, and
(subject to Section 7.01) shall be fully protected in relying upon, an Officers’
Certificate and an Opinion of Counsel stating that such amendment is authorized
or permitted by this Indenture that such amendment is the legal, valid and
binding obligation of the Issuer and the Guarantors enforceable against them in
accordance with its terms, subject to customary exceptions, and complies with
the provisions hereof.

SECTION 9.06 Compliance with TIA. Every amendment to or supplement of this
Indenture or the Notes shall comply with the TIA, if required, as in effect at
the date of such amendment or supplement.

ARTICLE 10

GUARANTEES

SECTION 10.01 Guarantee.

(a) Each Guarantor hereby jointly and severally (and, in respect of the Canadian
Entities, severally but not jointly and severally each as to 100% of the
Guaranteed Obligations) unconditionally and irrevocably guarantees, as a primary
obligor and not merely as a surety, to each Holder and to the Trustee and its
successors and assigns (i) the full and punctual payment of principal of,
premium, if any, and interest on the Notes when due, whether at maturity, by
acceleration, by redemption or otherwise, subject to any applicable grace
period, and all other monetary obligations of the Issuer under this Indenture
(including obligations to the Trustee) and the Notes and (ii) the full and
punctual performance within applicable grace periods of all other obligations of
the Issuer, whether for expenses, indemnification or otherwise under this
Indenture and the Notes (all of the foregoing being hereinafter collectively
called the “Guaranteed Obligations”). Each Guarantor further agrees that the
Guaranteed Obligations may be extended or renewed, in whole or in part, without
notice or further assent from each such Guarantor, and that each such Guarantor
shall remain bound under this Article 10 notwithstanding any extension or
renewal of any Guaranteed Obligation.

(b) Each Guarantor waives presentation to, demand of, payment from and protest
to the Issuer of any of the Guaranteed Obligations and also waives notice of
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nonpayment. Each Guarantor waives notice of any default under the Notes or the
Guaranteed Obligations. The obligations of each Guarantor hereunder shall not be
affected by (i) the failure of any Holder or the Trustee to assert any claim or
demand or to enforce any right or remedy against the Issuer or any other Person
under this Indenture, the Notes or any other agreement or otherwise; (ii) any
extension or renewal of any Guaranteed Obligations; (iii) any rescission,
waiver, amendment or modification of any of the terms or provisions of this
Indenture, the Notes or any other agreement; (iv) the release of any security
held by any Holder or the Trustee for the Guaranteed Obligations or any of them;
(v) the failure of any Holder or Trustee to exercise any right or remedy against
any other guarantor of the Guaranteed Obligations; or (vi) any change in the
ownership of such Guarantor, except as provided in Section 5.03.

(c) Each Guarantor further agrees that its Guarantee herein constitutes a
Guarantee of payment, performance and compliance when due (and not a guarantee
of collection) and waives any right to require that any resort be had by any
Holder or the Trustee to any security held for payment of the Guaranteed
Obligations. Each Guarantor irrevocably waives acceptance hereof, presentment,
demand, protest and any notice not provided for herein, as well as any
requirement that at any time any action be taken by any Person against the
Issuer or any other Person. The obligations of each Guarantor hereunder shall
not be subject to any reduction, limitation, impairment or termination for any
reason, including any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense of setoff, counterclaim,
recoupment or termination whatsoever or by reason of the invalidity, illegality
or unenforceability of the Guaranteed Obligations or otherwise. Without limiting
the generality of the foregoing, the obligations of each Guarantor herein shall
not be discharged or impaired or otherwise affected by the failure of any Holder
or the Trustee to assert any claim or demand or to enforce any remedy under this
Indenture, the Notes or any other agreement, by any waiver or modification of
any thereof, by any default, failure or delay, willful or otherwise, in the
performance of the Guaranteed Obligations, or by any other act or thing or
omission or delay to do any other act or thing which may or might in any manner
or to any extent vary the risk of any Guarantor or would otherwise operate as a
discharge of any Guarantor as a matter of law or equity.

(d) Each Guarantor further agrees that its Guarantee herein shall continue to be
effective or be reinstated, as the case may be, if at any time payment, or any
part thereof, of principal of or interest on any Guaranteed Obligation is
rescinded or must otherwise be restored by any Holder or the Trustee upon the
bankruptcy or reorganization of the Issuer or otherwise.

(e) In furtherance of the foregoing and not in limitation of any other right
which any Holder or the Trustee has at law or in equity against any Guarantor by
virtue hereof, upon the failure of the Issuer to pay the principal of or
premium, if any, or interest on any Guaranteed Obligation when and as the same
shall become due, whether at maturity, by acceleration, by redemption or
otherwise, or to perform or comply with any other Guaranteed Obligation, each
Guarantor hereby promises to and shall, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, in cash, to the Holders or the
Trustee an amount equal to the sum of (i) the unpaid principal amount of such
Guaranteed Obligations, (ii) accrued and unpaid interest or premium, if any, on
such Guaranteed Obligations (but only to the extent not prohibited by law) and
(iii) all other monetary Guaranteed Obligations of the Issuer to the Holders and
the Trustee.

 

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(f) Each Guarantor agrees that it shall not be entitled to any right of
subrogation in relation to the Holders in respect of any Guaranteed Obligations
guaranteed hereby until payment in full of all Guaranteed Obligations. Each
Guarantor further agrees that, as between it, on the one hand, and the Holders
and the Trustee, on the other hand, (x) the maturity of the Guaranteed
Obligations guaranteed hereby may be accelerated as provided in Article 6 for
the purposes of any Guarantee herein, notwithstanding any stay, injunction or
other prohibition preventing such acceleration in respect of the Guaranteed
Obligations guaranteed hereby, and (y) in the event of any declaration of
acceleration of such Guaranteed Obligations as provided in Article 6, such
Guaranteed Obligations (whether or not due and payable) shall forthwith become
due and payable by such Guarantor for the purposes of this Section.

SECTION 10.02 Limitation on Liability. Any term or provision of this Indenture
to the contrary notwithstanding, the maximum aggregate amount of the obligations
guaranteed hereunder by any Guarantor shall not exceed the maximum amount that
can be guaranteed without rendering this Indenture and the respective Guarantee,
as it relates to such Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer or similar laws affecting the
rights of creditors generally.

SECTION 10.03 Successors and Assigns. This Article 10 shall be binding upon each
Guarantor and its successors and assigns and shall inure to the benefit of the
successors and assigns of the Trustee and the Holders and, in the event of any
transfer or assignment of rights by any Holder or the Trustee, the rights and
privileges conferred upon that party in this Indenture and in the Notes shall
automatically extend to and be vested in such transferee or assignee, all
subject to the terms and conditions of this Indenture.

SECTION 10.04 No Waiver. Neither a failure nor a delay on the part of either the
Trustee or the Holders in exercising any right, power or privilege under this
Article 10 shall operate as a waiver thereof, nor shall a single or partial
exercise thereof preclude any other or further exercise of any right, power or
privilege. The rights, remedies and benefits of the Trustee and the Holders
herein expressly specified are cumulative and not exclusive of any other rights,
remedies or benefits which either may have under this Article 10 at law, in
equity, by statute or otherwise.

SECTION 10.05 Modification. No modification, amendment or waiver of any
provision of this Article 10, nor the consent to any departure by any Guarantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by the Trustee, and then such waiver or consent shall be effective
only in the specific instance and for the purpose for which given. No notice to
or demand on any Guarantor in any case shall entitle such Guarantor to any other
or further notice or demand in the same, similar or other circumstances.

SECTION 10.06 Execution and Delivery of the Guarantee. The execution by each
Guarantor of this Indenture (or a supplemental indenture in the form of
Exhibit J hereto) evidences the Guarantee of such Guarantor, whether or not the
person signing as an officer of the Guarantor still holds that office at the
time of authentication of any Note. The delivery of any Note after
authentication by the Trustee constitutes due delivery of the Guarantee set
forth in this Indenture on behalf of each Guarantor.

 

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SECTION 10.07 Release of Guarantees.

(a) The Guarantee of a Guarantor will be automatically released:

(i) in accordance with the provisions in Section 4.07(g), 5.03(f), 11.02(a)(1),
11.02(a)(2), 11.02(a)(3) or 11.02 (a)(5);

(ii) with respect to any Foreign Subsidiary, if the other Guarantee which
resulted in the creation of the Guarantee pursuant to Section 4.07(c) is
released or discharged, except a discharge or release by or as a result of
payment under such Guarantee;

(iii) if the Issuer designates such Guarantor as an Unrestricted Subsidiary in
accordance with the applicable provisions of this Indenture; or

(iv) upon the Legal or Covenant Defeasance or satisfaction and discharge of the
Notes and the Subsidiary Guarantees as provided under Sections 8.01, 8.02 and
8.03.

ARTICLE 11

COLLATERAL AND SECURITY

SECTION 11.01 Security Agreements. All obligations of (a) the Issuer under this
Indenture and the Notes, including due and punctual payment of the principal of
and interest on the Notes when and as the same shall be due and payable, whether
on an interest payment date, at maturity, by acceleration, repurchase,
redemption or otherwise, and interest on the overdue principal of and interest
on the Notes and the prompt payment and performance of all other obligations of
the Issuer to the Holders of Notes or the Trustee under this Indenture and the
Notes and (b) each Guarantor under this Indenture, including its guarantee under
Article 10 of this Indenture or under any Guarantee of the obligations of the
Issuer, including the prompt payment of the principal of, premium and interest
on, the Notes in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest on the
Notes, if any, if lawful, and the prompt payment or performance of all other
obligations of the Issuer to the Holders or the Trustee under this Indenture or
under the Notes, all according to the terms hereunder or thereunder (all such
obligations, collectively, the “Secured Obligations“), are secured as provided
in the Security Agreements which the Issuer and the Guarantors have entered into
simultaneously with the execution of this Indenture and which are attached as
Exhibit K and Exhibit L hereto (it being understood and agreed that,
notwithstanding anything that may be to the contrary herein, neither this
Indenture nor the Security Agreements shall require or create a pledge of or
other security interest in Excluded Property. Each Holder of Notes, by its
acceptance thereof, consents and agrees to the terms of the Security Agreements
(including the provisions providing for foreclosure and release of Collateral)
as the same may be in effect or may be amended from time to time in accordance
with their terms and authorizes and directs the Collateral Agent to enter into
the Security Agreements and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Issuer will deliver to the Trustee
copies of all documents, agreements and instruments delivered to the Collateral
Agent pursuant to the Security Agreements, and will do or cause to be done all
such acts and things as may be necessary or proper, or as may be required by the
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assure and confirm to the Trustee and the Collateral Agent the security interest
in the Collateral contemplated hereby, by the Security Agreements or any part
thereof, as from time to time constituted, so as to render the same available
for the security and benefit of this Indenture and of the Notes secured hereby,
according to the intent and purposes herein expressed. The Issuer and the
Guarantors may grant security for Pari Passu Indebtedness with an equal priority
to the security granted to the Holders of the Notes. The Issuer shall take, and
shall cause its Restricted Subsidiaries to take, and the Guarantors shall take,
at their sole expense, upon request of the Trustee, any and all actions
reasonably required to cause the Security Agreements to create and maintain, as
security for the obligations of the Issuer and the Guarantors hereunder, a valid
and enforceable perfected first priority Lien in and on all the Collateral, in
favor of the Collateral Agent for the benefit of the Holders of Notes superior
to and prior to the rights of all third Persons (subject to Permitted Liens) and
subject to no Liens other than Permitted Liens. Upon the issuance of any Pari
Passu Indebtedness, the Trustee shall enter into an Intercreditor Agreement in
substantially the form of Exhibit M hereto, on behalf of the Holders of Notes,
with the holders, or trustee or agent for such holders, of such Pari Passu
Indebtedness and take such other actions as the Issuer shall request to ensure
that the holders of Pari Passu Indebtedness have a valid and perfected lien on
the Collateral provided by the signatories to the Intercreditor Agreement, with
the same priority as the Holders.

SECTION 11.02 Release of Collateral.

(a) The Liens on the Collateral will be released with respect to the Notes:

(1) in whole, upon payment in full of the principal of, accrued and unpaid
interest and premium, if any, on the Notes;

(2) in whole, upon satisfaction and discharge of this Indenture as set forth
under Section 8.03;

(3) in whole, upon a Legal Defeasance or Covenant Defeasance as set forth under
Section 8.01;

(4) in part, as to any property constituting Collateral (A) that is sold or
otherwise disposed of by the Issuer or any Guarantor in a transaction permitted
by Section 5.08 or by the Collateral Documents, to the extent of the interest
sold or disposed of; (B) that is disposed of in a transaction of the nature
described in clause (1), clause (5), clause (7), clause (8) (except to the
extent of any excess proceeds remaining after satisfaction of the obligation
being satisfied through such foreclosure), clause (9), clause (10) or clause
(11) of the second paragraph in the definition of “Asset Sale,” and is subject
to a disposition as therein provided; (C) that constitutes Excess Collateral
Proceeds that remain unexpended after the conclusion of a Collateral Sale Offer
conducted in accordance with this Indenture; (D) that is owned or at any time
acquired by a Guarantor that has been released from its Guarantee in accordance
with this Indenture, concurrently with the release thereof; (E) that is Capital
Stock of a Subsidiary of the Issuer to the extent necessary for such Subsidiary
not to be subject to any requirement pursuant to Rule 3-16 or Rule 3-10 of
Regulation S-X under the Securities Act, due to the fact that such Subsidiary’s
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statements with the Commission (or any other governmental agency); (F) with
respect to TerreStar-1, upon transfer of TerreStar-1 from the Issuer to
TerreStar Canada in compliance with Section 5.04(b)(10); (G) that is used to
make a Restricted Payment or Permitted Investment permitted by this Indenture;
(H) that becomes Excluded Property; (I) that is owned by a Subsidiary that is
designated as an Unrestricted Subsidiary; or (J) otherwise in accordance with,
and as expressly provided for under, this Indenture;

(5) with the consent of each Holder of the Notes affected thereby (including,
without limitation, consents obtained in connection with a tender offer or
exchange offer for, or purchase of, Notes);

provided, that, in the case of any release in whole pursuant to clause
(1) above, all amounts owing to the Trustee under this Indenture, the Notes, the
Guarantees, the Collateral Documents and the Intercreditor Agreement have been
paid.

Upon compliance by the Issuer or the Guarantors, as the case may be, with the
conditions precedent set forth above, the Trustee or the Collateral Agent shall
promptly cause to be released and reconveyed to the Issuer, or its Guarantors,
as the case may be, the released Collateral.

(b) The Issuer shall comply with Section 313(b) of the TIA, relating to reports,
and Section 314(d) of the TIA, relating to the release of property and to the
substitution therefor of any property to be pledged as Collateral for the Notes.
Any certificate or opinion required by Section 314(d) of the TIA may be made by
an Officer of the Issuer except in cases where Section 314(d) requires that such
certificate or opinion be made by an independent engineer, appraiser or other
expert, who shall be reasonably satisfactory to the Trustee. Notwithstanding
anything to the contrary in this paragraph, each of the Issuer and the
Guarantors shall not be required to comply with all or any portion of
Section 314(d) of the TIA if it determines, in good faith based on advice of
counsel, that under the terms of Section 314(d) and/or any interpretation or
guidance as to the meaning thereof of the Commission and its staff, including
“no action” letters or exemptive orders, all or any portion of Section 314(d) is
inapplicable.

(c) The Issuer and the Guarantors may, among other things, without any release
or consent by the Trustee, conduct ordinary course activities with respect to
Collateral, including, without limitation, (i) selling or otherwise disposing
of, in any transaction or series of related transactions, any property subject
to the Lien of the Collateral Documents which has become worn out, defective or
obsolete or not used or useful in the business; (ii) abandoning, terminating,
canceling, releasing or making alterations in or substitutions of any leases
(other than the IRU Agreement) or contracts subject to the Lien of this
Indenture or any of the Collateral Documents; (iii) surrendering or modifying
any franchise, license (excluding any FCC License or Industry Canada License) or
permit subject to the Lien of this Indenture or any of the Collateral Documents
which it may own or under which it may be operating; altering, repairing,
replacing, changing the location or position of and adding to its structures,
machinery, systems, equipment, fixtures and appurtenances; (iv) granting a
license of any intellectual property; (v) selling, transferring or otherwise
disposing of inventory in the ordinary course of business; (vi) making cash
payments (including for the repayment of Indebtedness or interest) from cash
that is at any time part of the Collateral in the ordinary course of business
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prohibited by this Indenture and the Collateral Documents; and (vii) abandoning
any intellectual property which is no longer used or useful in the Issuer’s
business. The Issuer and the Guarantors shall deliver to the Collateral Agent,
within 60 days following the end of the first three fiscal quarters of every
fiscal year or within 120 days following the end of the fiscal year, an
Officers’ Certificate to the effect that all releases and withdrawals during the
preceding three-month period (or since the Issue Date, in the case of the first
such certificate) with respect to which no release or consent of the Collateral
Agent was obtained in the ordinary course of the Issuer’s and the Guarantors’
business and were not prohibited by this Indenture.

(d) Other than pursuant to Sections 4.07(g), 5.03(f), 11.02(a)(4)(B), (C), (G),
(H) and (I) and 11.02(c) of this Indenture and Section 5.12 of the U.S. Security
Agreement and Section 5.12 of the Canadian Security Agreement, no Collateral may
be released from the Lien and security interest created by the Security
Agreements pursuant to the provisions of the Security Agreements unless the
requirements of Section 11.03 have been satisfied.

(e) At any time when a Default or Event of Default has occurred and is
continuing and the maturity of the Notes has been accelerated (whether by
declaration or otherwise) and the Trustee has delivered a notice of acceleration
to the Collateral Agent, no release of Collateral pursuant to the provisions of
the Security Agreements will be effective as against the Holders of Notes.

(f) The release of any Collateral from the terms of this Indenture and the
Collateral Documents will not be deemed to impair the security under this
Indenture in contravention of the provisions hereof if and to the extent the
Collateral is released pursuant to the terms of this Indenture or the Collateral
Documents.

SECTION 11.03 Certificates of the Company. Subject to Section 11.02(d), the
Issuer will furnish to the Trustee and the Collateral Agent, prior to each
proposed release of Collateral pursuant to this Indenture and the Collateral
Documents:

(a) a notice from the Issuer describing the Collateral proposed to be released
(the “Released Collateral“) and requesting release of the Released Collateral;

(b) an Officers’ Certificate certifying that:

(1) the release of such Released Collateral complies with the terms and
conditions of this Indenture;

(2) all conditions precedent in this Indenture and the Collateral Documents to
such release have been complied with; and

(3) no Default or Event of Default pursuant to clause (1) or (2) of
Section 6.01(a) hereof is in effect or continuing on the date thereof or would
result therefrom;

(c) an Opinion of Counsel substantially to the effect that all conditions
precedent herein and under the Collateral Documents relating to the release of
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(d) all documents required by §314(d) of the TIA, the Collateral Documents, the
Intercreditor Agreement and this Indenture.

SECTION 11.04 Authorization of Actions to be Taken by the Trustee under the
Security Agreements. Subject to the provisions of Sections 7.01 and 7.02, the
Trustee may, in its sole discretion and without the consent of the Holders of
Notes, direct, on behalf of the Holders of Notes, the Collateral Agent to take
all actions it deems necessary or appropriate in order to:

(1) enforce any of the terms of the Security Agreements; and

(2) collect and receive any and all amounts payable in respect of the
obligations of the Issuer hereunder.

The Trustee will have power to institute and maintain such suits and proceedings
as it may deem expedient to prevent any impairment of the Collateral by any acts
that may be unlawful or in violation of the Security Agreements or this
Indenture, and such suits and proceedings as the Trustee may deem expedient to
preserve or protect its interests and the interests of the Holders in the
Collateral (including power to institute and maintain suits or proceedings to
restrain the enforcement of or compliance with any legislative or other
governmental enactment, rule or order that may be unconstitutional or otherwise
invalid if the enforcement of, or compliance with, such enactment, rule or order
would impair the security interest hereunder or be prejudicial to the interests
of the Holders or of the Trustee).

SECTION 11.05 Authorization of Receipt of Funds by the Trustee under the
Security Agreements. The Trustee is authorized to receive any funds for the
benefit of the Holders distributed under the Security Agreements, and to make
further distributions of such funds to the Holders of Notes according to the
provisions of this Indenture.

SECTION 11.06 Certain Limitations Upon Actions by the Collateral Agent.
Notwithstanding anything in this Indenture or the Collateral Documents to the
contrary, the Collateral Agent will not be permitted to take any action under
this Indenture that would constitute or result in any transfer of control or
assignment of any FCC License or Industry Canada License without obtaining all
necessary FCC, Industry Canada and other governmental authority approvals, and
all voting rights in any Collateral representing control rights in the holders
of any FCC License or Industry Canada License shall remain with the Issuer and
the Guarantors notwithstanding the occurrence of any Event of Default until such
required consents of the FCC or Industry Canada shall have been obtained (and,
in that connection, the Collateral Agent and the Holders of the Notes shall be
entitled to rely on the advice of FCC or Industry Canada counsel selected by the
Collateral Agent to determine whether FCC or Industry Canada approval or other
governmental authority approvals are required). Notwithstanding anything to the
contrary in this Indenture, the Collateral Agent shall not foreclose on, sell,
assign, transfer or otherwise dispose of, or exercise any right to control any
FCC License or Industry Canada License or take any other action that would
affect the operational, voting, or other control of the Issuer and the
Guarantors, unless such action is taken in accordance with the provisions of the
Communications Act of 1934, as from time to time amended, and the rules,
regulations and policies of the FCC, Industry Canada and any other governmental
authority.

 

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ARTICLE 12

MISCELLANEOUS

SECTION 12.01 Notices. Any notice or communication shall be in writing and
delivered in person or mailed by first-class mail addressed as follows:

if to the Issuer: or a Subsidiary Guarantor

TerreStar Networks Inc.

12010 Sunset Hills Road, 6th Floor

Reston, VA 20190

Attn: Jeffrey W. Epstein

with a copy to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166

Attention: Joerg H. Esdorn

If to a Canadian Entity:

c/o TMI Communications Inc.

1601 Telesat Court

Gloucester, Ontario K1B5P4

Canada

with a copy to:

Fraser Milner Casgrain LLP

1420-99 Bank Street

Ottowa, Ontario K1P1H4

Canada

Attention: David Little

if to the Trustee:

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

Fax: (651) 495-8097

The Issuer or the Trustee by notice to the other may designate additional or
different addresses for subsequent notices or communications.

 

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Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.

SECTION 12.02 Certificate and Opinion as to Conditions Precedent. Upon any
request or application by the Issuer to the Trustee to take or refrain from
taking any action under this Indenture, at the request of the Trustee the Issuer
shall furnish to the Trustee:

(a) an Officers’ Certificate in form and substance reasonably satisfactory to
the Trustee (which shall include the statements set forth in Section 12.03)
stating that, in the opinion of the signers, all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with; and

(b) an Opinion of Counsel in form and substance reasonably satisfactory to the
Trustee (which shall include the statements set forth in Section 12.03) stating
that, in the opinion of such counsel, all such conditions precedent have been
complied with.

SECTION 12.03 Statements Required in Certificate or Opinion. Each certificate or
opinion with respect to compliance with a covenant or condition provided for in
this Indenture shall include:

(a) a statement that the individual making such certificate or opinion has read
such covenant or condition;

(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;

(c) a statement that, in the opinion of such individual, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with or satisfied; and

(d) a statement as to whether or not, in the opinion of such individual, such
covenant or condition has been complied with.

SECTION 12.04 When Notes Disregarded. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Issuer or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer shall be disregarded and deemed not to be outstanding, except that, for
the purpose of determining whether the Trustee shall be protected in relying on
any such direction, waiver or consent, only Notes which the Trustee actually
knows are so owned shall be so disregarded. Also, subject to the foregoing, only
Notes outstanding at the time shall be considered in any such determination.

SECTION 12.05 Rules by Trustee, Paying Agent and Registrar. The Trustee may make
reasonable rules for action by or a meeting of Noteholders. The Registrar and
the Paying Agent may make reasonable rules for their functions.

 

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SECTION 12.06 Legal Holidays. A “Legal Holiday” is a Saturday, a Sunday or a day
on which banking institutions are not required to be open in the State of New
York or the state where the Corporate Trust Office is located. If a payment date
is a Legal Holiday, payment shall be made on the next succeeding day that is not
a Legal Holiday, and no interest shall accrue for the intervening period. If a
regular record date is a Legal Holiday, the record date shall not be affected.

SECTION 12.07 GOVERNING LAW. THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 12.08 No Recourse Against Others. A director, officer, incorporator,
employee or stockholder of the Issuer or any Guarantor, as such, shall not have
any liability for any obligations of the Issuer or any Guarantor under the
Notes, this Indenture, the Guarantees, the Collateral Documents, the
Intercreditor Agreement or for any claim based on, in respect of, or by reason
of, such obligations or their creation. By accepting a Note, each Noteholder
waives and releases all such liability. The waiver and release shall be part of
the consideration for the issue of the Notes.

SECTION 12.09 Successors. All agreements of the Issuer and each Guarantor in
this Indenture and the Notes shall bind their successors. All agreements of the
Trustee in this Indenture shall bind its successors.

SECTION 12.10 Multiple Originals. The parties may sign any number of copies of
this Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement. One signed copy is enough to prove this Indenture.

SECTION 12.11 Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.

SECTION 12.12 Severability. In case any one or more of the provisions in this
Indenture, in the Notes or in the Guarantee shall be held invalid, illegal or
unenforceable, in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions shall not in any way be affected or impaired thereby, it being
intended that all of the provisions hereof shall be enforceable to the full
extent permitted by law.

SECTION 12.13 No Adverse Interpretation of Other Agreements. This Indenture may
not be used to interpret another indenture, loan or debt agreement of the Issuer
or any of its Subsidiaries. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.

SECTION 12.14 Trust Indenture Act Controls. If any provision hereof limits,
qualifies or conflicts with another provision of the TIA which is required
hereunder to be a part of and govern this Indenture, the required provision
shall control.

 

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SECTION 12.15 Communications by Holders with other Holders. Noteholders may
communicate pursuant to Section 312(b) of the TIA with other Noteholders with
respect to their rights under this Indenture or the Notes. The Trustee shall
comply with Section 312(b) of the TIA relating to Noteholder communications. The
Issuer, the Trustee, the Registrar and any other person shall have the
protection of Section 312(c) of the TIA.

SECTION 12.16 Submission to Jurisdiction; Agent for Service of Process. Any
legal action or proceeding with respect to this Indenture, the Notes, the
Guarantees, the Security Agreements, the Intercreditor Agreement or any
Collateral Document may be instituted in the federal courts of the United States
of America located in the City of New York or the courts of the State of New
York in each case located in the Borough of Manhattan in the City of New York
and by execution and delivery of this Indenture, each of the Issuer, the
Guarantors and the Trustee consents, for itself and in respect of its property,
to the non-exclusive jurisdiction of those courts. Each of the Issuer, the
Guarantors and the Trustee irrevocably waives any objection, including an
objection to the laying of venue or based on the grounds of forum non
conveniens, which it may now or hereafter have to the bringing of any action or
proceeding in such jurisdiction in respect of this Indenture, the Notes, the
Guarantees, the Security Agreements, the Intercreditor Agreement or any
Collateral Document or any other document related thereto. Each of the Issuer,
the Guarantors and the Trustee agrees that service of any process, summons,
notice or document by mail to such party’s address set forth above shall be
effective service of process for any lawsuit, action or other proceeding brought
in any such court. Each party not located in the United States hereby
irrevocably appoints CT Corporation System, which currently maintains a New York
City office at 111 Eighth Avenue-13th Floor, New York, New York 10011, United
States of America, as its agent to receive service of process or other legal
summons for purposes of any such action or proceeding that may be instituted in
any state or federal court in the City and State of New York.

 

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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly executed
as of the date first written above.

 

TERRESTAR NETWORKS INC. By:   /s/ Neil L. Hazard

  Name:   Neil L. Hazard   Title:   Chief Financial Officer

 

TERRESTAR NETWORKS HOLDINGS (CANADA) INC. By:   /s/ Steven Nichols

  Name:   Steven Nichols   Title:   Executive Vice President Operations

 

TERRESTAR NETWORKS (CANADA) INC. By:   /s/ Steven Nichols

  Name:   Steven Nichols   Title:   Executive Vice President Operations

[Indenture Signature Page]

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U.S. BANK NATIONAL ASSOCIATION, as Trustee By:   /s/ Richard Prokosch

  Name:   Richard Prokosch   Title:   Vice President

[Indenture Signature Page]

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EXHIBIT A

[FACE OF NOTE]

TERRESTAR NETWORKS INC.

15% Senior Secured PIK Note due 2014

[CUSIP] [CINS]                     

 

No.                     

   $                    

TerreStar Networks Inc., a Delaware corporation (the “Issuer,” which term
includes any successor under the Indenture hereinafter referred to), for value
received, promises to pay to                     , or its registered assigns,
the principal sum of                      DOLLARS ($            ) [or such other
amount as indicated on the Schedule of Increases and Decreases of Notes attached
hereto]1 on February 15, 2014.

Interest Rate: As set forth on the reverse hereof.

Interest Payment Dates: February 15 and August 15.

Regular Record Dates: February 1 and August 1.

Reference is hereby made to the further provisions of this Note set forth on the
reverse hereof, which will for all purposes have the same effect as if set forth
at this place.

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For Global Securities only

 

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IN WITNESS WHEREOF, the Issuer has caused this Note to be signed manually or by
facsimile by its duly authorized officers.

 

Date:     TERRESTAR NETWORKS INC.       By:              Name:         Title:

 

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(Form of Trustee’s Certificate of Authentication)

This is one of the 15% Senior Secured PIK Note due 2014 described in the
Indenture referred to in this Note.

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee By:        Authorized Signatory

 

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[REVERSE SIDE OF SECURITY]

TERRESTAR NETWORKS INC.

15% Senior Secured PIK Note due 2014

 

  1. Principal and Interest.

The Issuer promises to pay the principal of this Note on February 15, 2014.

The Issuer promises to pay interest on the principal amount of this Note as
follows:

(a) Interest on this Note will accrue at a rate of 15% per annum [from the Issue
Date]4 and will be payable semi-annually in arrears on each Interest Payment
Date as set forth on the face of this Note commencing on August 15, 2007 to the
Holders of record on the Regular Record Date set forth on the face of this Note
immediately preceding each Interest Payment Date;

(b) until and including February 15, 2011, accrued interest on this Note will be
payable in Additional Notes; and

(c) after February 15, 2011, accrued interest on this Note will be payable in
cash;

(d) notwithstanding clause (a) above,

(i) if by the date which is 60 days after the adoption of the Congressional
budget resolution regarding the U.S. federal government’s budget for its 2009
fiscal year (the “Government Contract Milestone Date”) the Issuer has not
certified to the Trustee that the Issuer has entered into a bona fide binding
agreement with a department, agency or instrumentality of the U.S. federal
government pursuant to which the Issuer will provide telecommunications services
during a multi-year period and will receive compensation therefor, then
commencing as of the Government Contract Milestone Date and continuing through
the date, if any, on which such certification is provided to the Trustee, the
Issuer will pay additional interest on this Note, which additional interest
shall equal an increase in the annual interest rate on this Note (in addition to
any increases required pursuant to clause (ii) and/or (iii) of this paragraph)
by 0.5% per annum;

(ii) if by October 1, 2008 (the “Commercial Contract Milestone Date”) the Issuer
has not certified to the Trustee that the Issuer has entered into a bona fide
binding agreement with a non-governmental entity pursuant to which the Issuer
will provide telecommunications services during a multi-year period and will
receive compensation

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4

For Additional Securities, should be the date of their original issue.

 

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therefor, then commencing as of the Commercial Contract Milestone Date and
continuing through the date, if any, on which such certification is provided to
the Trustee, the Issuer will pay additional interest on this Note, which
additional interest shall equal an increase in the annual interest rate on this
Note (in addition to any increases required pursuant to clause (i) and/or
(iii) of this paragraph) by 0.5% per annum;

(iii) if by December 31, 2008 (the “ATC Milestone Date”), the Issuer has not
certified to the Trustee that the Issuer has been authorized by the FCC to
provide an Ancillary Terrestrial Component in combination with the Issuer’s MSS,
then commencing as of the ATC Milestone Date and continuing through the date, if
any, on which such certification is provided to the Trustee, the Issuer will pay
additional interest on this Note, which additional interest shall equal an
increase in the annual interest rate on this Note (in addition to any increases
required pursuant to clause (i) and/or (ii) of this paragraph) by 0.5% per
annum; and

(iv) any certification required by the foregoing clauses (i), (ii) or
(iii) shall be in the form of an Officers’ Certificate provided to the Trustee
signed by the Issuer’s Chief Executive Officer and Chief Financial Officer.

Interest on this Note will accrue from the most recent date to which interest
has been paid on this Note (or, if there is no existing default in the payment
of interest and if this Note is authenticated between a Regular Record Date and
the next Interest Payment Date, from such Interest Payment Date) or, if no
interest has been paid, from [the Issue Date/the date this Note was issued].4
Interest will be computed on the basis of a 360-day year of twelve 30-day
months.

Interest not paid when due and any interest on principal, premium or interest
not paid when due will be paid to the Persons that are Holders on a special
record date determined in accordance with the Indenture.

If the payment of interest as set forth in the preceding would be usurious under
applicable law, then, in that event, notwithstanding anything to the contrary in
this Note, the Indenture, any Guarantee, the Collateral Documents or the
Intercreditor Agreement or any other agreement entered into in connection with
or as security for this Note, the Indenture, any Guarantee, the Collateral
Documents or the Intercreditor Agreement, it is agreed that the aggregate of all
consideration which constitutes interest under applicable law that is contracted
for, taken, reserved, charged or received by any Holder under this Note, the
Indenture, any Guarantee, the Collateral Documents or the Intercreditor
Agreement or under any other agreement entered into in connection with or as
security for this Note, the Indenture, any Guarantee, the Collateral Documents
or the Intercreditor Agreement shall under no circumstances exceed the maximum
amount allowed by such applicable law and any excess shall be canceled
automatically and, if theretofore paid, shall be refunded by each applicable
Holder to the Issuer.

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4

For Additional Securities, should be the date of their original issue.

 

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  2. Indenture; Guarantee.

This is one of the Notes issued under an Indenture dated as of February 14, 2007
(as amended from time to time, the “Indenture”), among the Issuer, the
guarantors from time to time party thereto and U.S. Bank National Association,
as Trustee. Capitalized terms used herein are used as defined in the Indenture
unless otherwise indicated. The terms of the Notes include those stated in the
Indenture. The Notes are subject to all such terms, and Holders are referred to
the Indenture for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this Note
and the terms of the Indenture, the terms of the Indenture will control.

The Notes are senior secured obligations of the Issuer. Subject to certain
conditions, Additional Notes may be issued pursuant to the Indenture, and the
originally issued Notes and all such Additional Notes vote together for all
purposes as a single class. This Note is guaranteed by the Guarantors as set
forth in the Indenture.

 

  3. Redemption and Repurchase; Discharge or Defeasance Prior to Redemption or
Maturity.

This Note is subject to optional redemption, and may be the subject of a
Repurchase Offer, as further described in the Indenture. Except for certain
required Repurchase Offers, there is no sinking fund or mandatory redemption
applicable to this Note.

If the Issuer deposits with the Trustee money or Government Notes sufficient to
pay the then outstanding principal of, premium, if any, and accrued interest on
the Notes to redemption or maturity, each of the Issuer and the Guarantors may
in certain circumstances be discharged from the Indenture, the Notes and the
Collateral Documents or may be discharged from certain of its obligations under
certain provisions of the Indenture.

 

  4. Registered Form; Denominations; Transfer; Exchange.

The Notes are in registered form without coupons in denominations of $2,000
principal amount and any multiple of $1,000 in excess thereof, except that
Additional Notes in payment of interest may be issued in other denominations. A
Holder may register the transfer or exchange of Notes in accordance with the
Indenture. The Trustee may require a Holder to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. Pursuant to the Indenture, there are certain periods
during which the Trustee will not be required to issue, register the transfer of
or exchange any Note or certain portions of a Note.

 

  5. Defaults and Remedies.

If an Event of Default, as defined in the Indenture, occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the Notes may
declare all the Notes to be due and payable. If a bankruptcy or insolvency
default with respect to the Issuer, any Restricted Subsidiary of the Issuer that
is a Significant Subsidiary, any group of Restricted Subsidiaries that, taken as
a whole, would constitute a Significant Subsidiary, the FCC License Subsidiary
or any Canadian Entity occurs and is continuing, the Notes automatically become
due and payable.

 

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Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of remedies.

 

  6. Amendment and Waiver.

Subject to certain exceptions, the Indenture and the Notes may be amended, and
defaults may be waived, with the consent of the Holders of a majority in
principal amount of the outstanding Notes. Without notice to or the consent of
any Holder, the Issuer and the Trustee may amend or supplement the Indenture or
the Notes to, among other things, cure any ambiguity, defect or inconsistency.

 

  7. Authentication.

This Note is not valid until the Trustee (or Authenticating Agent) signs the
certificate of authentication on the other side of this Note.

 

  8. Governing Law.

This Note shall be governed by, and construed in accordance with, the laws of
the State of New York.

 

  9. Abbreviations.

Customary abbreviations may be used in the name of a Holder or an assignee, such
as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN
(= joint tenants with right of survivorship and not as tenants in common), CUST
(= Custodian) and U/G/M/A/ (= Uniform Gifts to Minors Act).

The Issuer will furnish a copy of the Indenture to any Holder upon written
request and without charge.

 

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[FORM OF TRANSFER NOTICE]

FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s), assign(s)
and transfer(s) unto

Insert Taxpayer Identification No.

 

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Please print or typewrite name and address including zip code of assignee

the within Note and all rights thereunder, hereby irrevocably constituting and
appointing

 

 

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attorney to transfer said Note on the books of the Issuer with full power of
substitution in the premises.

 

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[THE FOLLOWING PROVISION TO BE INCLUDED

ON ALL SECURITIES BEARING A RESTRICTED LEGEND]

In connection with any transfer of this Note occurring prior to
                    , the undersigned confirms that such transfer is made
without utilizing any general solicitation or general advertising and further as
follows:  ¨

Check One

 

¨ (1) This Note is being transferred to a “qualified institutional buyer” in
compliance with Rule 144A under the Securities Act of 1933, as amended, and
certification in the form of Exhibit F to the Indenture is being furnished
herewith.

 

¨ (2) This Note is being transferred to a non-U.S. person in compliance with the
exemption from registration under the Securities Act of 1933, as amended,
provided by Regulation S thereunder, and certification in the form of Exhibit E
to the Indenture is being furnished herewith.

or

 

¨ (3) This Note is being transferred other than in accordance with (1) or
(2) above and documents are being furnished which comply with the conditions of
transfer set forth in this Note and the Indenture.

If none of the foregoing boxes is checked, the Trustee is not obligated to
register this Note in the name of any Person other than the Holder hereof unless
and until the conditions to any such transfer of registration set forth herein
and in the Indenture have been satisfied.

 

Date:                                 Seller       By:             

NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within mentioned instrument in every particular,
without alteration or any change whatsoever.

 

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Signature Guarantee:5             By:          To be executed by an executive
officer

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5

Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Association Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

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OPTION OF HOLDER TO ELECT PURCHASE

If you wish to have all of this Note purchased by the Issuer pursuant to
Section 3.09 of the Indenture, check the box:  ¨

If you wish to have a portion of this Note purchased by the Issuer pursuant to
Section 3.09 of the Indenture, state the amount (in original principal amount)
below:

$                            .

Date:                     

 

Your Signature:      (Sign exactly as your name appears on the other side of
this Note)

 

Signature Guarantee:1     

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1

Signatures must be guaranteed by an “eligible guarantor institution” meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Association Medallion Program (“STAMP”)
or such other “signature guarantee program” as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.

 

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SCHEDULE OF INCREASES AND DECREASES OF NOTES1

The following increases or decreases of the principal amount of this Global Note
have been made:

 

Date of increase

or decrease

 

Amount of decrease
in principal amount
of this Global Note

 

Amount of increase
in principal amount
of this Global Note

 

Principal amount of
this Global Note
following such
decrease (or increase)

 

Signature of
authorized officer of
Trustee

               

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For Global Securities

 

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EXHIBIT B

DTC LEGEND

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS A BENEFICIAL INTEREST HEREIN.

TRANSFERS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE ARE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE TRANSFER PROVISIONS OF THE INDENTURE.

 

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EXHIBIT C

REGULATION S LEGEND

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) THAT IS 40 DAYS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE
LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER OF
THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE. BY ITS ACQUISITION HEREOF, THE HOLDER HEREOF
REPRESENTS THAT IT IS NOT A U.S. PERSON NOR IS IT PURCHASING FOR THE ACCOUNT OF
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT.

 

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EXHIBIT D

RULE 144A LEGEND

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY
BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHER WISE
TRANSFER SUCH SECURITY, PRIOR TO THE DATE (THE “RESALE RESTRICTION TERMINATION
DATE”) THAT IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND
THE LAST DATE ON WHICH THE ISSUER OR ANY AFFILIATE OF THE ISSUER WAS THE OWNER
OF THIS SECURITY (OR ANY PREDECESSOR OF SUCH SECURITY), ONLY (A) TO THE ISSUER,
(B) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT, TO A PERSON IT REASONABLY
BELIEVES IS A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING
MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT THAT IS AN
INSTITUTIONAL ACCREDITED INVESTOR ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, IN EACH CASE IN A
MINIMUM PRINCIPAL AMOUNT OF THE SECURITIES OF $250,000, FOR INVESTMENT PURPOSES
AND NOT WITH A VIEW TO OR FOR OFFER OR SALE IN CONNECTION WITH ANY DISTRIBUTION
IN VIOLATION OF THE SECURITIES ACT OR (F) PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER’S AND THE TRUSTEE’S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM.
THIS LEGEND WILL BE REMOVED UPON THE REQUEST OF THE HOLDER AFTER THE RESALE
RESTRICTION TERMINATION DATE.

 

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EXHIBIT E

REGULATION S CERTIFICATE

                ,     

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

 

Re: TerreStar Networks Inc. 15% Senior Secured PIK Notes due 2014 (the “Notes”)
issued under the Indenture (the “Indenture”) dated as of February 14, 2007

Ladies and Gentlemen:

Terms are used in this certificate as used in Regulation S (“Regulation S”)
under the Securities Act of 1933, as amended (the “Securities Act”), except as
otherwise stated herein.

[CHECK A OR B AS APPLICABLE.]

 

¨ A. This certificate relates to our proposed transfer of $            
principal amount of Notes issued under the Indenture. We hereby certify as
follows:

 

  1. The offer and sale of the Notes was not and will not be made to a person in
the United States (unless such person is excluded from the definition of “U.S.
Person” pursuant to Rule 902(k)(2)(vi) or the account held by it for which it is
acting is excluded from the definition of “U.S. Person” pursuant to
Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3)) and such
offer and sale was not and will not be specifically targeted at an identifiable
group of U.S. citizens abroad.

 

  2. Unless the circumstances described in the parenthetical in paragraph 1
above are applicable, either (a) at the time the buy order was originated, the
buyer was outside the United States or we and any person acting on our behalf
reasonably believed that the buyer was outside the United States or (b) the
transaction was executed in, on or through the facilities of a designated
offshore securities market, and neither we nor any person acting on our behalf
knows that the transaction was pre-arranged with a buyer in the United States.

 

  3. Neither we, any of our affiliates, nor any person acting on our or their
behalf has made any directed selling efforts in the United States with respect
to the Notes.

 

  4. The proposed transfer of Notes is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

 

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  5. If we are a dealer or a person receiving a selling concession, fee or other
remuneration in respect of the Notes, and the proposed transfer takes place
during the Restricted Period (as defined in the Indenture), or we are an officer
or director of the Issuer or an Initial Purchaser (as defined in the Indenture),
we certify that the proposed transfer is being made in accordance with the
provisions of Rule 904(b) of Regulation S.

 

¨ B. This certificate relates to our proposed exchange of $            
principal amount of Notes issued under the Indenture for an equal principal
amount of Notes to be held by us. We hereby certify as follows:

 

  1. At the time the offer and sale of the Notes was made to us, either (i) we
were not in the United States or (ii) we were excluded from the definition of
“U.S. person” pursuant to Rule 902(k)(2)(vi) or the account held by us for which
we were acting was excluded from the definition of “U.S. person” pursuant to
Rule 902(k)(2)(i) under the circumstances described in Rule 902(h)(3); and we
were not a member of an identifiable group of U.S. citizens abroad.

 

  2. Unless the circumstances described in paragraph 1(ii) above are applicable,
either (a) at the time our buy order was originated, we were outside the United
States or (b) the transaction was executed in, on or through the facilities of a
designated offshore securities market and we did not pre-arrange the transaction
in the United States.

 

  3. The proposed exchange of Notes is not part of a plan or scheme to evade the
registration requirements of the Securities Act.

You and the Issuer are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

Very truly yours, [NAME OF SELLER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)] By:
    

  Name:     Title:     Address:  

Date:                     

 

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EXHIBIT F

RULE 144A CERTIFICATE

                ,     

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

 

Re: TerreStar Networks Inc. 15% Senior Secured PIK Notes due 2014 (the “Notes”)
issued under the Indenture (the “Indenture”) dated as of February 14, 2007

Ladies and Gentlemen:

This certificate relates to:

[CHECK A OR B AS APPLICABLE.]

 

¨ A. Our proposed purchase of $             principal amount of Notes issued
under the Indenture.

 

¨ B. Our proposed exchange of $             principal amount of Notes issued
under the Indenture for an equal principal amount of Notes to be held by us.

We and, if applicable, each account for which we are acting in the aggregate
owned and invested more than $100,000,000 in securities of issuers that are not
affiliated with us (or such accounts, if applicable), as of                 ,
20    , which is a date on or since the close of our most recent fiscal year. We
and, if applicable, each account for which we are acting, are a qualified
institutional buyer within the meaning of Rule 144A (“Rule 144A”) under the
Securities Act of 1933, as amended (the “Securities Act”). If we are acting on
behalf of an account, we exercise sole investment discretion with respect to
such account. We are aware that the transfer of Notes to us, or such exchange,
as applicable, is being made in reliance upon the exemption from the provisions
of Section 5 of the Securities Act provided by Rule 144A. Prior to the date of
this certificate we have received such information regarding the Issuer as we
have requested pursuant to Rule 144A(d)(4) or have determined not to request
such information.

You and the Issuer are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

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Very truly yours, [NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
By:     

  Name:     Title:     Address:  

Date:                     

 

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EXHIBIT G

INSTITUTIONAL ACCREDITED INVESTOR CERTIFICATE1

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

 

Re: TerreStar Networks Inc. 15% Senior Secured PIK Notes due 2014 (the “Notes”)
issued under the Indenture (the “Indenture”) dated as of February 14, 2007

Ladies and Gentlemen:

This certificate relates to:

[CHECK A OR B AS APPLICABLE.]

 

¨ A. Our proposed purchase of $             principal amount of Notes issued
under the Indenture.

 

¨ B. Our proposed exchange of $             principal amount of Notes issued
under the Indenture for an equal principal amount of Notes to be held by us.

We hereby confirm that:

 

  1. We are an institutional “accredited investor” within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as amended
(the “Securities Act”) (an “Institutional Accredited Investor”).

 

  2. Any acquisition of Notes by us will be for our own account or for the
account of one or more other Institutional Accredited Investors as to which we
exercise sole investment discretion.

 

  3. We have such knowledge and experience in financial and business matters
that we are capable of evaluating the merits and risks of an investment in the
Notes and we and any accounts for which we are acting are able to bear the
economic risks of and an entire loss of our or their investment in the Notes.

 

  4. We are not acquiring the Notes with a view to any distribution thereof in a
transaction that would violate the Securities Act or the securities laws of any
State of the United States or any other applicable jurisdiction; provided that
the disposition of our property and the property of any accounts for which we
are acting as fiduciary will remain at all times within our and their control.

 

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  5. We acknowledge that the Notes have not been registered under the Securities
Act and that the Notes may not be offered or sold within the United States or to
or for the benefit of U.S. persons except as set forth below.

 

  6. The principal amount of Notes to which this certificate relates is at least
equal to $250,000.

We agree for the benefit of the Issuer, on our own behalf and on behalf of each
account for which we are acting, that such Notes may be offered, sold, pledged
or otherwise transferred only in accordance with the Securities Act and any
applicable securities laws of any State of the United States and only (a) to the
Issuer, (b) pursuant to a registration statement which has become effective
under the Securities Act, (c) to a qualified institutional buyer in compliance
with Rule 144A under the Securities Act, (d) in an offshore transaction in
compliance with Rule 904 of Regulation S under the Securities Act, (e) in a
principal amount of not less than $250,000, to an Institutional Accredited
Investor that, prior to such transfer, delivers to the Trustee a duly completed
and signed certificate (the form of which may be obtained from the Trustee)
relating to the restrictions on transfer of the Notes or (f) pursuant to an
exemption from registration provided by Rule 144 under the Securities Act or any
other available exemption from the registration requirements of the Securities
Act.

Prior to the registration of any transfer in accordance with (c) or (d) above,
we acknowledge that a duly completed and signed certificate (the form of which
may be obtained from the Trustee) must be delivered to the Trustee. Prior to the
registration of any transfer in accordance with (e) or (f) above, we acknowledge
that the Issuer reserves the right to require the delivery of such legal
opinions, certifications or other evidence as may reasonably be required in
order to determine that the proposed transfer is being made in compliance with
the Securities Act and applicable state securities laws. We acknowledge that no
representation is made as to the availability of any Rule 144 exemption from the
registration requirements of the Securities Act.

We understand that the Trustee will not be required to accept for registration
of transfer any Notes acquired by us, except upon presentation of evidence
satisfactory to the Issuer and the Trustee that the foregoing restrictions on
transfer have been complied with. We further understand that the Notes acquired
by us will be in the form of definitive physical certificates and that such
certificates will bear a legend reflecting the substance of the preceding
paragraph. We further agree to provide to any person acquiring any of the Notes
from us a notice advising such person that resales of the Notes are restricted
as stated herein and that certificates representing the Notes will bear a legend
to that effect.

We agree to notify you promptly in writing if any of our acknowledgments,
representations or agreements herein ceases to be accurate and complete.

We represent to you that we have full power to make the foregoing
acknowledgments, representations and agreements on our own behalf and on behalf
of any account for which we are acting.

 

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You and the Issuer are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

Very truly yours, [NAME OF PURCHASER (FOR TRANSFERS) OR OWNER (FOR EXCHANGES)]
By:     

  Name:     Title:     Address:  

Date:                     

 

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Upon transfer, the Notes would be registered in the name of the new beneficial
owner as follows:

 

By:     

Date:     

Taxpayer ID number:     

 

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EXHIBIT H

[COMPLETE FORM I OR FORM II AS APPLICABLE.]

[FORM I]

CERTIFICATE OF BENEFICIAL OWNERSHIP

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

 

Re: TerreStar Networks Inc. 15% Senior Secured PIK Notes due 2014 (the “Notes”)
issued under the Indenture (the “Indenture”) dated as of February 14, 2007

Ladies and Gentlemen:

We are the beneficial owner of $             principal amount of Notes issued
under the Indenture and represented by a Temporary Regulation S Global Note (as
defined in the Indenture).

We hereby certify as follows:

[CHECK A OR B AS APPLICABLE.]

 

¨ A. We are a non-U.S. person (within the meaning of Regulation S under the
Securities Act of 1933, as amended).

 

¨ B. We are a U.S. person (within the meaning of Regulation S under the
Securities Act of 1933, as amended) that purchased the Notes in a transaction
that did not require registration under the Securities Act of 1933, as amended.

You and the Issuer are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

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Very truly yours, [NAME OF BENEFICIAL OWNER] By:     

  Name:     Title:     Address:  

Date:                     

 

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[FORM II]

CERTIFICATE OF BENEFICIAL OWNERSHIP

U.S. Bank National Association

EP-MN-WS3C

60 Livingston Avenue

St. Paul MN 55107-1419

Attn: Corporate Trust Services

 

Re: TerreStar Networks Inc. 15% Senior Secured PIK Notes due 2014 (the “Notes”)
issued under the Indenture (the “Indenture”) dated as of February 14, 2007

Ladies and Gentlemen:

This is to certify that based solely on certifications we have received in
writing, by tested telex or by electronic transmission from Institutions
appearing in our records as persons being entitled to a portion of the principal
amount of Notes represented by a Temporary Regulation S Global Note issued under
the above-referenced Indenture, that as of the date hereof, $            
principal amount of Notes represented by the Temporary Regulation S Global Note
being submitted herewith for exchange is beneficially owned by persons that are
either (i) non-U.S. persons (within the meaning of Regulation S under the
Securities Act of 1933, as amended) or (ii) U.S. persons that purchased the
Notes in a transaction that did not require registration under the Securities
Act of 1933, as amended.

We further certify that (i) we are not submitting herewith for exchange any
portion of such Temporary Regulation S Global Note excepted in such
certifications and (ii) as of the date hereof we have not received any
notification from any Institution to the effect that the statements made by such
Institution with respect to any portion of such Temporary Regulation S Global
Note submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof.

You and the Issuer are entitled to rely upon this certificate and are
irrevocably authorized to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.

 

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Yours faithfully, [Name of DTC Participant] By:     

  Name:     Title:     Address:  

Date:                     

 

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EXHIBIT I

TEMPORARY REGULATION S GLOBAL NOTE LEGEND

THIS NOTE IS A TEMPORARY GLOBAL NOTE. PRIOR TO THE EXPIRATION OF THE RESTRICTED
PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY
PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON THAT PURCHASED SUCH
INTEREST IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”). BENEFICIAL INTERESTS HEREIN ARE NOT
EXCHANGEABLE FOR PHYSICAL NOTES OTHER THAN A PERMANENT GLOBAL NOTE IN ACCORDANCE
WITH THE TERMS OF THE INDENTURE. TERMS IN THIS LEGEND ARE USED AS USED IN
REGULATION S UNDER THE SECURITIES ACT.

NO BENEFICIAL OWNERS OF THIS TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE
PAYMENT OF PRINCIPAL OR INTEREST HEREON UNTIL SUCH BENEFICIAL INTEREST IS
EXCHANGED OR TRANSFERRED FOR AN INTEREST IN ANOTHER NOTE.

 

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EXHIBIT J

SUPPLEMENTAL INDENTURE

dated as of             ,         

among

TERRESTAR NETWORKS INC.,

The Guarantor(s) Party Hereto

and

U.S. BANK NATIONAL ASSOCIATION,

as Trustee

 

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15% Senior Secured PIK Notes due 2014

 

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THIS SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), entered into as of
            ,         , among TERRESTAR NETWORKS INC., a Delaware corporation
(the “Issuer”), the existing Guarantors party thereto, [insert each new
Guarantor executing this Supplemental Indenture and its jurisdiction of
incorporation] (each an “Undersigned”) and U.S. BANK NATIONAL ASSOCIATION, as
trustee (the “Trustee”).

RECITALS

WHEREAS, the Issuer and the Trustee entered into the Indenture, dated as of
February 14, 2007 (the “Indenture”), relating to the Issuer’s 15% Senior Secured
PIK Notes due 2014 (the “Notes”);

WHEREAS, as a condition to the Trustee entering into the Indenture and the
purchase of the Notes by the Holders, the Issuer agreed pursuant to the
Indenture to cause any newly acquired or created Domestic Subsidiaries to
provide Guarantees, except in certain circumstances.

AGREEMENT

NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained and intending to be legally bound, the parties to this Supplemental
Indenture hereby agree as follows:

Section 1. Capitalized teams used herein and not otherwise defined herein are
used as defined in the Indenture.

Section 2. Each Undersigned, by its execution of this Supplemental Indenture,
agrees to be a Guarantor under the Indenture and to be bound by the terms of the
Indenture applicable to Guarantors, including, but not limited to, Article 10
thereof.

Section 3. This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of New York.

Section 4. This Supplemental Indenture may be signed in various counterparts
which together will constitute one and the same instrument.

Section 5. This Supplemental Indenture is an amendment supplemental to the
Indenture and the Indenture and this Supplemental Indenture will henceforth be
read together.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture
to be duly executed as of the date first above written.

 

TERRESTAR NETWORKS INC., as Issuer By:     

  Name:     Title:  

 

[GUARANTORS] By:     

  Name:     Title:  

 

U.S. BANK NATIONAL ASSOCIATION, as Trustee By:     

  Name:     Title:  

 

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