EXHIBIT 10.1



 


Exhibit 10.1


EXECUTION COPY


$10,000,000


SECURED SUPER-PRIORITY DEBTOR IN POSSESSION

CREDIT AGREEMENT


Dated as of February 24, 2003


among


GLOBALSTAR, L.P.,


as Borrower


The Subsidiaries of the Borrower Party Hereto

as Guarantors


and


ICO INVESTMENT CORP.,

BLUE RIVER CAPITAL LLC,

IRIDIUM INVESTORS, LLC,

LOEB PARTNERS CORP.

COLUMBIA VENTURES CORPORATION


as Lenders


 






 






	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
	 	 	1	 
	 	Section 1.1 Defined Terms
	 	 	1	 
	 	Section 1.2 Computation of Time Periods
	 	 	14	 
	 	Section 1.3 Accounting Terms
	 	 	15	 
	 	Section 1.4 Certain Terms
	 	 	15	 
	ARTICLE II AMOUNTS AND TERMS OF THE LOANS
	 	 	15	 
	 	Section 2.1 The Term Loans
	 	 	15	 
	 	Section 2.2 Making the Loans
	 	 	16	 
	 	Section 2.3 Repayment
	 	 	16	 
	 	Section 2.4 Prepayments
	 	 	16	 
	 	Section 2.5 Interest
	 	 	17	 
	 	Section 2.6 Payments and Computations
	 	 	17	 
	 	Section 2.7 Application of Payments
	 	 	17	 
	 	Section 2.8 Taxes
	 	 	17	 
	ARTICLE III CONDITIONS OF LENDING
	 	 	18	 
	 	Section 3.1 Conditions Precedent to Interim Loans
	 	 	18	 
	 	Section 3.2 Conditions Precedent to Term Loans Under Final Financing Order
	 	 	18	 
	 	Section 3.3 Conditions Precedent to Each Loan
	 	 	20	 
	ARTICLE IV REPRESENTATIONS AND WARRANTIES
	 	 	20	 
	 	Section 4.1 Corporate Existence: Compliance with Law
	 	 	20	 
	 	Section 4.2 Corporate Power: Authorization: Enforceable Obligations
	 	 	21	 
	 	Section 4.3 Ownership of Subsidiaries
	 	 	21	 
	 	Section 4.4 Secured, Super Priority Obligations
	 	 	22	 
	 	Section 4.5 Use of Proceeds
	 	 	22	 
	 	Section 4.6 Intellectual Property
	 	 	23	 
	 	Section 4.7 Pledged Collateral
	 	 	23	 
	ARTICLE V AFFIRMATIVE COVENANTS
	 	 	24	 
	 	Section 5.1 Compliance with Laws., Etc.
	 	 	24	 
	 	Section 5.2 Maintenance of Existence
	 	 	24	 
	 	Section 5.3 Access
	 	 	24	 
	 	Section 5.4 Keeping of Books
	 	 	25	 
	 	Section 5.5 Use of Proceeds
	 	 	25	 
	 	Section 5.6 Further Assurances
	 	 	25	 
	 	Section 5.7 Secured Indebtedness
	 	 	25	 
	ARTICLE VI NEGATIVE COVENANTS
	 	 	25	 
	 	Section 6.1 Liens, Etc
	 	 	25	 
	 	Section 6.2 Indebtedness
	 	 	26	 
	 	Section 6.3 Mergers, Sale of Assets, Etc
	 	 	26	 
	 	Section 6.4 Investments
	 	 	26	 
	 	Section 6.5 Restricted Payments
	 	 	27	 



 






 




	 	 	 	 	 	 
	 	 	 	Page
	 	 	 	

	 	Section 6.6 Transactions With Affiliates
	 	 	27	 
	 	Section 6.7 Capital Expenditures
	 	 	27	 
	 	Section 6.8 Amendment of Charter or Bylaws
	 	 	27	 
	 	Section 6.9 Prohibition on No Shop Clauses
	 	 	27	 
	ARTICLE VII TERMINATION
	 	 	28	 
	 	Section 7.1 Termination; Acceleration
	 	 	28	 
	 	Section 7.2 Standstill Period: Exercise of Remedies
	 	 	28	 
	 	Section 7.3 Commitment Fee
	 	 	28	 
	 	Section 7.4 Other Termination
	 	 	29	 
	ARTICLE VIII GUARANTY
	 	 	30	 
	 	Section 8.1 The Guaranty
	 	 	30	 
	 	Section 8.2 Nature of Liability
	 	 	30	 
	 	Section 8.3 Independent Obligation
	 	 	30	 
	 	Section 8.4 Authorization
	 	 	31	 
	 	Section 8.5 Reliance
	 	 	31	 
	 	Section 8.6 Subordination
	 	 	31	 
	 	Section 8.7 Waiver
	 	 	32	 
	ARTICLE IX SECURITY
	 	 	32	 
	 	Section 9.1 Security
	 	 	32	 
	 	Section 9.2 Perfection of Security Interests
	 	 	34	 
	 	Section 9.3 Rights of Lenders: Limitations on Lenders’ Obligations
	 	 	34	 
	 	Section 9.4 Covenants of the Grantors with Respect to Collateral
	 	 	35	 
	 	Section 9.5 Performance by Administrative Agent of the Grantors’ Obligations
	 	 	39	 
	 	Section 9.6 Limitation on Administrative Agent’s Duty in Respect of Collateral
	 	 	39	 
	 	Section 9.7 Remedies, Rights Upon Event of Default
	 	 	39	 
	 	Section 9.8 The Appointment of Administrative Agent as Attorney-in-Fact
	 	 	42	 
	 	Section 9.9 FCC-Related Requirements of Law
	 	 	43	 
	ARTICLE X MISCELLANEOUS
	 	 	44	 
	 	Section 10.1 Amendments, Etc
	 	 	44	 
	 	Section 10.2 Notices, Etc
	 	 	44	 
	 	Section 10.3 No Waiver: Remedies
	 	 	46	 
	 	Section 10.4 Costs: Expenses: Indemnities
	 	 	46	 
	 	Section 10.5 Right of Set-off
	 	 	46	 
	 	Section 10.6 Binding Effect
	 	 	47	 
	 	Section 10.7 Governing Law
	 	 	47	 
	 	Section 10.8 Section Titles
	 	 	47	 
	 	Section 10.9 Execution in Counterparts
	 	 	47	 
	 	Section 10.10 Entire Agreement
	 	 	47	 
	 	Section 10.11 Confidentiality
	 	 	47	 
	 	Section 10.12 Jurisdiction
	 	 	48	 
	 	Section 10.13 Waiver of Jury Trial
	 	 	48	 



 






 




	 	 	 	 	 	 
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	 	Section 10.14 Non-Assignment
	 	 	48	 
	ARTICLE XI ADMINISTRATIVE AGENT
	 	 	48	 
	 	Section 11.1 Appointment and Authorization of Administrative Agent
	 	 	48	 
	 	Section 11.2 Delegation of Duties
	 	 	49	 
	 	Section 11.3 Liability of Administrative Agent
	 	 	49	 
	 	Section 11.4 Reliance by Administrative Agent
	 	 	49	 
	 	Section 11.5 Notice of Default
	 	 	50	 
	 	Section 11.6 Credit Decision; Disclosure of Information by Administrative Agent
	 	 	50	 
	 	Section 11.7 Administrative Agent in its Individual Capacity
	 	 	50	 
	 	Section 11.8 Administrative Agent May File Proofs of Claim
	 	 	51	 
	 	Section 11.9 Collateral and Guaranty Matters
	 	 	51	 
	 	Section 11.10 Payments to Lenders
	 	 	52	 
	 	Section 11.11 Notices
	 	 	52	 
	 	Section 11.12 Sharing of Payments
	 	 	52	 
	ARTICLE XII REQUIRED CONSENTS; RIGHTS OF PARTICIPANTS
	 	 	52	 
	 	Section 12.1 Required Lenders Consents
	 	 	52	 
	 	Section 12.2 Unanimous Consent of the Lenders
	 	 	52	 
	 	Section 12.3 Right of Lenders to Bring Action for Repayment
	 	 	53	 




	 	 	 
	SCHEDULES	 	 
	Schedule 1	 	
- FCC Licenses
	Schedule 4.1	 	
- Corporate Existence; Compliance with Law
	Schedule 4.2	 	
- Corporate Power; Authorization; Enforceable Obligation
	Schedule 4.3	 	
- Ownership of Subsidiaries
	Schedule 4.6	 	
- Intellectual Property
	Schedule 4.7	 	
- Pledged Collateral
	 	 	 
	EXHIBITS	 	 
	 	 	 
	Exhibit A-1	 	
- Form of Term Loan Note
	Exhibit A-2	 	
- Form of Term PIK Interest Note
	Exhibit B	 	
- Form of Approved Budget
	Exhibit C-1	 	
- Form of Interim Financing Order
	Exhibit C-2	 	
- Form of Final Financing Order
	Exhibit D	 	
- Form of Notice of Borrowing




 










 



     SECURED SUPER-PRIORITY DEBTOR IN POSSESSION CREDIT AGREEMENT, dated as of
February 24, 2003, between GLOBALSTAR, L.P., a Delaware limited partnership, as
debtor and debtor in possession under chapter 11 of the Bankruptcy Code (as
hereinafter defined) (the “Borrower”), the Subsidiaries (as defined below) of
the Borrower listed on the signature pages hereto as Guarantors, as debtors and
debtors in possession under chapter 11 of the Bankruptcy Code (the
“Guarantors”) and ICO INVESTMENT CORP., BLUE RIVER CAPITAL LLC, IRIDIUM
INVESTORS, LLC, LOEB PARTNERS CORP. and COLUMBIA VENTURES CORPORATION
(collectively, the “Lenders”).


W I T N E S S E T H:


     WHEREAS, on February 15, 2002 (the “Petition Date”), the Borrower and the
Guarantors each filed a voluntary petition for relief commencing a
reorganization case under chapter 11 of the Bankruptcy Code (as defined herein)
with the United States Bankruptcy Court for the District of Delaware;


     WHEREAS, in connection with the consummation of this Agreement, the
Borrower and the Guarantors are continuing to operate their respective
businesses and manage their respective properties as debtors and debtors in
possession under sections 1107 and 1108 of the Bankruptcy Code;


     WHEREAS, an immediate and ongoing need exists for the Borrower to obtain
additional funds to continue the operation of its and its Subsidiaries’
respective businesses and, accordingly, the Borrower has requested that the
Lenders provide a secured super-priority debtor in possession credit facility;


     WHEREAS, the Lenders are willing to make funds available to the Borrower
pursuant to sections 364(c)(1), (c)(2) and (c)(3) of the Bankruptcy Code, but
only for the purposes and upon the terms and subject to the conditions set
forth in this Agreement; and


     WHEREAS, each of the Guarantors has agreed to guaranty the obligations of
the Borrower hereunder and the Borrower and the Guarantors have agreed to
secure their obligations to the Lenders in connection with such facility with,
inter alia, security interests in, and liens on, substantially all of their
respective property and assets, whether real or personal, tangible or
intangible, as provided herein;


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


ARTICLE I


DEFINITIONS AND ACCOUNTING TERMS


     Section 1.1 Defined Terms. As used in this Agreement, the following terms
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):


     “Account” has the meaning specified in Article 9 of the UCC.


 






 


     “Account Debtor” has the meaning specified in Article 9 of the UCC.


     “Accounts Receivable” means all rights to payment, whether or not earned
by performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, including,
without limitation, all such rights constituting or evidenced by any Account,
Chattel Paper, Instrument, General Intangible or Investment Property, together
with all of the Grantor’s right, title and interest, if any, in any goods or
other property giving rise to such right to payment, including any rights to
stoppage in transit, replevin, reclamation and resales, and all related
security interests, Liens and pledges, whether voluntary or involuntary, in
each case whether now existing or owned or hereafter arising or acquired, and
all Collateral Support and Supporting Obligations related to the foregoing and
all Accounts Receivable Records.


     “Accounts Receivable Records” means (a) all original copies of all
documents, instruments or other writings or electronic records or other Records
evidencing the Accounts Receivable, (b) all books, correspondence, credit or
other files, Records, ledger sheets or cards, invoices, and other papers
relating to Accounts Receivable, including, without limitation, all tapes,
cards, computer tapes, computer discs, computer runs, record keeping systems
and other papers and documents relating to the Accounts Receivable, whether in
the possession or under the control of Grantor or any computer bureau or agent
from time to time acting for Grantor or otherwise, (c) all evidences of the
filing of financing statements and the registration of other instruments in
connection therewith, and amendments, supplements or other modifications
thereto, notices to other creditors or Lenders, and certificates,
acknowledgments, or other writings, including, without limitation, lien search
reports, from filing or other registration officers, (d) all credit
information, reports and memoranda relating thereto and (e) all other written,
electronic or other non-written forms of information related in any way to the
foregoing or any Accounts Receivable.


     “Administrative Agent” means Blue River Capital LLC in its capacity as
Administrative Agent under the Loan Documents.


     “Administrative Expenses” means any right to payment constituting a cost
or expense of administration of any of the Reorganization Cases allowed under
sections 503(b) and 507(a)(1) of the Bankruptcy Code and fees required to be
paid to the Office of the United States Trustee under section 1930(a), title
28, United States Code.


     “Affiliate” means, with respect to any Person, any other Person which,
directly or indirectly, controls, is controlled by or is under common control
with such Person, each officer, director, general partner or joint venturer of
such Person, and each Person who is the beneficial owner of 5% or more of any
class of voting Stock of such Person. For the purposes of this definition,
“control” means the possession of the power to direct or cause the direction of
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.


     “Agent-Related Person” means the Administrative Agent and its officers,
directors, employees and agents.


2






 


     “Aggregate Commitments” means the total of all Commitments of all the
Lenders.


     “Agreement” means this Secured Super-Priority Debtor In Possession Credit
Agreement.


     “Approved Budget” means that certain operating budget of the Borrower and
the Guarantors for the period ending April 27, 2003, attached hereto as Exhibit
B and each supplemental budget approved by the Required Lenders (each an
“Approved Budget”) which supplemental budgets will only be submitted by
Borrower to the extent funds remain available for borrowing.


     “Avoidance Actions” means any Claim or cause of action of any Grantor
arising under chapter 5 of the Bankruptcy Code and any proceeds, monies or
property of any kind recovered therefrom.


     “Bankruptcy Code” means title 11, United State Code, as amended from time
to time.


     “Bankruptcy Court” means the United States Bankruptcy Court for the
District of Delaware and any other court having competent jurisdiction over the
Reorganization Cases.


     “Bankruptcy Rules” means the Federal Rules of Bankruptcy Procedure and the
Local Rules of the Bankruptcy Court, each as amended from time to time.


     “Big LEO License” means the FCC license issued to LQP, and currently held
by L/Q Licensee, to provide mobile satellite services in the
1610-1626.5/2483.5-2500 MHz bands.


     “Borrower” has the meaning specified in the preamble to this Agreement.


     “Borrowing” means a Term Loan Borrowing.


     “Business Day” means a day of the year on which banks are not required or
authorized to close in New York, New York.


     “Capital Lease Obligations” means, as to any Person, the capitalized
amount of all obligations of such Person or any of its Subsidiaries under any
lease of property by such Person as lessee which would be accounted for as a
capital lease on a balance sheet of such Person in conformity with GAAP (a
“Capital Lease”).


     “Chattel Paper” has the meaning specified in Article 9 of the UCC.


     “Claim” has the meaning specified in section 101(5) of the Bankruptcy
Code.


     “Closing Date” means the first date on which all of the conditions
precedent specified in Section 3.2 are satisfied.


3






 


     “Code” means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.


     “Collateral” has the meaning specified in Section 9.1.


     “Collateral Support” means all property (real or personal) assigned,
hypothecated or otherwise securing any of items (i) through (xxi) in the
definition of Collateral set forth in Section 9.1 and includes any security
agreement or other agreement granting a Lien or security interest in such real
or personal property.


     “Commitment” means, as to each Lender, its obligation to make Term Loans
to the Borrower pursuant to Section 2.1. The Commitment of each of the Lenders
is $2,000,000.


     “Commitment Fee” has the meaning specified in Section 7.3.


     “Committee” means the official statutory committee of unsecured creditors
appointed in the Reorganization Cases pursuant to section 1102 of the
Bankruptcy Code.


     “Continuing Satellite Anomalous Event” means, with respect to any
particular satellite in the Borrower’s satellite constellation, one or more
satellite anomalous events that cause such satellite to remain out of service
for at least 30 consecutive calendar days.


     “Contracts” means, with respect to any Grantor, any and all “contracts”,
as such term is defined in Article 1 of the UCC, of such Grantor.


     “Contractual Obligation” means, with respect to a Person, any obligation,
agreement, undertaking or similar provision of any security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which
any of its properties is subject.


     “Copyright” means (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof, and all applications in
connection therewith, including all registrations, recordings and
applications in the United States Copyright Office or in any foreign
counterparts thereof and (b) the right to obtain all renewals thereof.


     “Copyright Licenses” means any written agreement naming any Grantor as
licensor or licensee granting any right under any Copyright, including the
grant of rights to copy, publicly perform, create derivative works,
manufacture, distribute, exploit and sell materials derived from any Copyright.


     “Credit Party” means the Borrower, each Guarantor, LQP and each other
Person that grants a security interest in any property to secure the
Obligations.


     “Default” means any event which with the passing of time or the giving of
notice or both would become an Event of Default.


4






 


     “Documents” has the meaning specified in Article 9 of the UCC.


     “Dollars” and the sign “$” each mean the lawful money of the United States
of America.


     “Domestic Subsidiary” means any Subsidiary of the Borrower that is
incorporated within the United States of America.


     “Escrow Agreement” means that certain Escrow Agreement among the Lenders,
the Borrower, the Guarantors and Katten Muchin Zavis Rosenman, as escrow agent,
dated the date hereof.


     “Effective Date” means the date upon which a Plan of Reorganization
becomes effective.


     “Equipment” has the meaning specified in Article 9 of the UCC.


     “ERISA” means the Employee Retirement Income Security Act of 1974 (or any
successor legislation thereto), as amended from time to time.


     “Event of Default” means any of the following events:


     (a)  The Borrower shall fail to pay any principal of any Loan or any
interest on any Loan on the Maturity Date or within five (5) Business Days
after the same otherwise becomes due and payable; or


     (b)  Any material representation or warranty made or deemed made by any
Credit Party in any Loan Document shall prove to have been incorrect, false or
misleading in any respect when made or deemed made; or


     (c)  Any Credit Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V or VI or (ii) any material term,
covenant or agreement contained in any other Loan Document and, in either case,
such failure shall remain unremedied for five (5) Business Days after the
earlier of the date on which (A) a Responsible Officer of the Borrower or a
Guarantor becomes aware of such failure or (B) written notice thereof shall
have been given to the Borrower or a Guarantor by the Lenders; or


     (d)  Any of the Reorganization Cases shall be dismissed or converted to a
case under chapter 7 of the Bankruptcy Code or a trustee shall be appointed in
any of the Reorganization Cases; or


     (e)  The Borrower shall cease operations and/or commence liquidation or
wind down of its operations provided that the timely filing of a Section 363
Sale Motion shall not constitute an Event of Default under this subparagraph
(e); or


     (f)  The Bankruptcy Court or any court of competent jurisdiction shall have
entered an order, which order is a Final Order, amending, supplementing,
vacating or otherwise modifying the Financing Order without the consent of the
Lenders; or


5






 


     (g)  The Borrower shall bring a motion before the Bankruptcy Court to
obtain additional financing or incur Indebtedness arising from such additional
financing that is secured by a Lien that is equal or senior to any one or more
Liens granted hereunder or hereafter granted to the Lenders and such additional
financings or Indebtedness is not contemplated to be used to pay the
Obligations in full; or


     (h)  The Borrower or any Guarantor shall fail to file a Plan of
Reorganization and disclosure statement by April 30, 2003, provided however
that if Borrower and Guarantors file a Section 363 Sale Motion by April 30,
2003 and such Section 363 Sale closes within 40 days after the filing of such
motion, then Lenders shall not be entitled to exercise their rights and
remedies upon the failure of the Borrower and Guarantors to file a Plan of
Reorganization and disclosure statement during such 40-day period. If such
Section 363 Sale does not close within 40 days, Lenders may exercise their
rights and remedies as a result of such default; or


     (i)  The Effective Date of the Plan of Reorganization of Borrower or any
Guarantor shall not have occurred by July 15, 2003.


     “FCC” means the Federal Communications Commission.


     “FCC Licenses” means the FCC licenses issued to the Borrower, LQP or any
of their respective Subsidiaries by the FCC and listed on Schedule 1.


     “Final Order” means an order of the Bankruptcy Court entered on the docket
of the Clerk of the Bankruptcy Court, that is in effect and not stayed, and as
to which the time to appeal, petition for certiorari, or move for reargument or
rehearing has expired and as to which no appeal, petition for certiorari or
other proceedings for reargument or rehearing shall then be
pending or as to which any right to appeal, petition for certiorari,
reargue or rehear shall have been waived, or if an appeal, reargument, petition
for certiorari, or rehearing thereof has been sought, the order of the
Bankruptcy Court shall have been affirmed by the highest court to which the
order was appealed, from which the reargument or rehearing was sought, or
certiorari has been denied, and the time to take any further appeal, petition
for certiorari or move for reargument or rehearing shall have expired.


     “Final Financing Order” means that certain Final Order issued by the
Bankruptcy Court pursuant to section 364 and other applicable provisions of the
Bankruptcy Code approving this Agreement and the other Loan Documents and
authorizing the incurrence by the Borrower and the Guarantors of the
Obligations and the other transactions hereunder, including the granting of the
super-priority status, the security interest and liens, and the payment of all
fees constituting Obligations hereunder, and authorizing the Lenders to
exercise their rights and remedies hereunder, and which is substantially in the
form of Exhibit C-1 and otherwise in form and substance satisfactory to the
Required Lenders. The Final Financing Order may not be amended or modified in
any respect without the prior written consent of the Required Lenders.


     “Fiscal Quarter” means each of the three-month periods ending on March 31,
June 30, September 30 and December 31.


6






 


     “GAAP” means generally accepted accounting principles in the United States
of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.


     “General Intangible” has the meaning specified in Article 9 of the UCC.


     ” Goods” has the meaning specified in Article 9 of the UCC.


     “Governmental Authority” means any nation, sovereign or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.


     “Globalstar Canada Transaction” means the consummation of the transaction
whereby the Borrower, Globalstar Canada Satellite Co. or any of their
respective Subsidiaries exercises a right of first refusal to purchase Canadian
Satellite Communications Inc.’s interest in Globalstar Canada Holding Co. under
Shareholders’ Agreements with respect to Globalstar Canada Holding Co. and
Globalstar Canada Co., each dated as of March 27, 1997.


     “Grantor” means the Borrower and each Guarantor.


     “Guarantor” has the meaning specified in the preamble hereto.


     “Guaranty” means the guaranty of the Obligations of the Borrower made by
the Guarantors pursuant to Article VIII.


     “Guaranty Obligation” means, as applied to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of
such Indebtedness that such Indebtedness will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of
such Indebtedness will be protected (in whole or in part) against loss in
respect thereof, including (a) the direct or indirect guaranty, endorsement
(other than for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by such Person of
Indebtedness of another Person and (b) any liability of such Person for
Indebtedness of another Person through any agreement (contingent or otherwise)
(i) to purchase, repurchase or otherwise acquire such Indebtedness or any
security therefor, or to provide funds for the payment or discharge of such
Indebtedness (whether in the form of a loan, advance, stock purchase, capital
contribution or otherwise), (ii) to maintain the solvency or any balance sheet
item, level of income or financial condition of another Person, (iii) to make
take-or-pay or similar payments, if required, regardless of non-performance by
any other party or parties to an agreement, (iv) to purchase, sell or lease (as
lessor or lessee) property, or to purchase or sell services, primarily for the
purpose of enabling the debtor to make payment of such Indebtedness or to
assure the holder of such Indebtedness against loss, or (v) to supply funds to
or in any other manner invest in such other Person (including to pay for
property or services irrespective of whether such property is

7






 




received or such
services are rendered), if in the case of any agreement described under
subclauses (i), (ii), (iii), (iv) or (v) of clause (b) of this sentence the
primary purpose or intent thereof is as described in the preceding sentence.
The amount of any Guaranty Obligation shall be equal to the amount of the
Indebtedness so guaranteed or otherwise supported.


     “Hedging Contracts” means all interest rate contracts, foreign exchange
contracts, currency swap or option agreements, forward contracts, commodity
swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to
alter the risks of any Person arising from fluctuations in interest rates,
currency values or commodity prices.


     “Indebtedness” of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, all reimbursement and all other
obligations with respect to surety bonds, performance bonds, letters of credit
and bankers’ acceptances, whether or not matured, and all indebtedness for the
deferred purchase price of property or services, other than trade payables
incurred in the ordinary course of business that are not overdue, (b) all
obligations of such Person evidenced by notes, bonds, debentures or similar
instruments or which bear interest, (c) all indebtedness of such Person created
or arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (d) all Capital Lease
Obligations of such Person and the present value of future rental payments
under all synthetic leases, (e) all obligations of
such Person to purchase, redeem, retire, defease or otherwise acquire for
value any Stock or Stock equivalents of such Person, valued, in the case of
redeemable preferred stock, at the greater of its voluntary or involuntary
liquidation preference plus accrued and unpaid dividends, (f) all payments that
such Person would have to make in the event of an early termination on the date
Indebtedness of such Person is being determined in respect of Hedging Contracts
of such Person and (g) all Indebtedness referred to in clause (a), (b), (c),
(d), (e) or (f) above secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien upon
or in property (including, without limitation, Accounts and General
Intangibles) owned by such Person, even though such Person has not assumed or
become liable for the payment of such Indebtedness.


     “Instrument” has the meaning specified in Article 9 of the UCC other than
instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.


     “Intellectual Property” means, collectively, all rights, priorities and
privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks, Trademark
Licenses and trade secrets, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive all
proceeds and damages therefrom.


     “Interest Payment Date” means the last Business Day of each Fiscal Quarter
during the term of this Agreement.


8






 


     “Interim Financing Order” means that certain order issued by the
Bankruptcy Court pursuant to section 364 and other applicable provisions of the
Bankruptcy Code approving this Agreement and the other Loan Documents on an
interim basis and authorizing the incurrence by the Borrower and the Guarantors
of the Obligations subject to a final hearing, and which is substantially in
the form of Exhibit C-2 and otherwise in form and substance satisfactory to the
Required Lenders. The Interim Financing Order may not be amended or modified
in any respect without the prior written consent of the Required Lenders.


     “Interim Loans” means those Loans under the Term Loan Commitment
authorized in an Interim Financing Order.


     “Inventory” has the meaning specified in Article 9 of the UCC, wherever
located.


     “Investment Property” means, with respect to any Grantor, any and all
“investment property”, as such term is defined in Article 9 of the UCC, of such
Grantor, wherever located.


     “IRS” means the Internal Revenue Service of the United States of America,
or any successor thereto.



     “L/Q Licensee” has the meaning
specified in Section 3.2(c)(i).


     “Lenders” has the meaning specified in the preamble to this
Agreement.


     “Lien” means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or
other), security interest or preference, priority or other security agreement
or preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including, without limitation,
any conditional sale or other title retention agreement, the interest of a
lessor under a Capital Lease, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the UCC or comparable law of any jurisdiction, naming the owner
of the asset to which such Lien relates as debtor.


     “Loan” means a Term Loan.


     “Loan Documents” means, collectively, this Agreement, the Notes, the LQP
Pledge Agreement and each certificate, agreement or document executed by the
Borrower or any other Credit Party and delivered to the Lenders.


     “Loral” has the meaning specified in Section 3.2(c)(ii).


     “LQP” means Loral/QUALCOMM Partnership, L.P., a Delaware limited
partnership.


     “LQP Pledge Agreement” means the Pledge Agreement dated as of the date
hereof between LQP, as pledgor, and the Lenders, as pledgee.


9






 


     “Material Adverse Effect” means any change, effect, event or condition
that has had or would reasonably be expected to have a material adverse effect
on the assets or operations of the Borrower and its Subsidiaries, taken as a
whole; provided, however, that the loss of satellite availability shall not
constitute a “Material Adverse Effect” unless, following the date hereof, (i)
more than two additional satellites in the Borrower’s satellite constellation
shall have been declared “failed” or (ii) five or more additional satellites in
the Borrower’s satellite constellation shall simultaneously be experiencing
Continuing Satellite Anomalous Events.


     “Maturity Date” means the earliest to occur of the Effective Date, the
closing of a Section 363 Sale and July 15, 2003.


     “Maximum Aggregate Adjustment Amount” has the meaning specified in Section
2.2(a).


     “Maximum Line Item Adjustment Amount” has the meaning specified in Section
2.2(a).


     “Notes” mean collectively, the Term Loan Notes and the PIK Interest Notes.


     “Notice of Borrowing” has the meaning specified in Section 2.2(a).


     “Obligation” means the Loans and all other advances, debts, liabilities,
fees, obligations, covenants and duties of any kind and description, now
existing or hereafter arising, whether due or not due, absolute or contingent,
liquidated or unliquidated, direct or indirect, express or implied,
individually or jointly with others, howsoever evidenced or acquired owing by
the Borrower to the Lenders, arising under or pursuant to this Agreement, the
Escrow Agreement or any other Loan Document.


     “Partnership” means any partnership in which any Credit Party has an
interest.


     “Patents” means (a) all letters patent of the United States, any other
country or any political subdivision thereof and all reissues and extensions
thereof, (b) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, and (c) all rights to obtain any reissues or extensions of the
foregoing.


     “Patent License” means all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use, import,
sell or offer for sale any invention covered in whole or in part by a Patent.


     “Payment Intangible” has the meaning specified in Article 9 of the UCC.


     “Permitted Expenditures” means the cash expenditures set forth in an
Approved Budget. Any unused portion of Permitted Expenditures for any given
month may be carried over as additional Permitted Expenditures in the
immediately subsequent month.


     “Permitted Liens” has the meaning specified in Section 6.1.


10






 


     “Person” means an individual, partnership, corporation (including, without
limitation, a business trust), joint stock company, estate, trust, limited
liability company, unincorporated association, joint venture or other entity,
or a Governmental Authority.


     “Petition Date” has the meaning specified in the recitals hereto.


     “PIK Interest Note “ means a promissory note of the Borrower, payable to
the order of any Lender, substantially in the form of Exhibit A-2, evidencing
the aggregate Indebtedness of the Borrower to such Lender resulting from the
capitalization of accrued interest payable on the Term Loans owing to such
Lender pursuant to Section 2.5(b).


     “Plan of Reorganization” means a proposed plan or plans of reorganization
for the Borrower and the Guarantors whether filed with or confirmed by order of
the Bankruptcy Court that provides for payment in full of all Obligations under
this Agreement, including any Commitment Fee.


     “Pledged Collateral” means, collectively, the Pledged Notes, the Pledged
Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any other
Investment Property of
any Grantor, all certificates or other instruments representing any of the
foregoing, all Security Entitlements of any Grantor in respect of any of the
foregoing, all dividends, interest distributions, cash, warrants, rights,
instruments and other property or Proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of the foregoing. Pledged Collateral may be General Intangibles or Investment
Property.


     “Pledged LLC Interests” means all of any Grantor’s right, title and
interest as a member of any limited liability company and all of such Grantor’s
right, title and interest in, to and under any limited liability company
agreement to which it is a party.


     “Pledged Notes” means all right, title and interest of any Grantor in the
Instruments evidencing all Indebtedness owed to such Grantor issued by the
obligors named therein, and all interest, cash, Instruments and other property
or Proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Indebtedness.


     “Pledged Partnership Interests” means all of any Grantor’s right, title
and interest as a limited and/or general partner in all Partnerships and all of
such Grantor’s right, title and interest in, to and under any partnership
agreements to which it is a party.


     “Pledged Stock” means the shares of Stock owned by each Grantor (except
Globaltel Joint Stock Company), including all shares of Stock listed on
Schedule 4.7; provided, however, that only the outstanding Stock of a
Subsidiary that is not a Domestic Subsidiary possessing up to but not exceeding
65% of the voting power of all classes of Stock of such controlled foreign
corporation entitled to vote shall be deemed to be pledged hereunder.


     “Proceeds” has the meaning specified in Article 9 of the UCC.


     “Pro Rata Share” means, with respect to each Lender at any time, a
fraction (expressed as a percentage, carried out to the fourth decimal place),
the numerator of which is

11






 




the amount of the Commitment of such Lender and the
denominator of which is the amount of the Aggregate Commitments.


     “Real Property” means all of those plots, pieces or parcels of land now
owned or hereafter acquired by the Borrower or any of its Subsidiaries (the
“Land”), together with the right, title and interest of the Borrower, if any,
in and to the streets, the land lying in the bed of any streets, roads or
avenues, opened or proposed, in front of, the air space and development rights
pertaining to the Land and the right to use such air space and development
rights, all rights of way, privileges, liberties, tenements, hereditaments and
appurtenances belonging or in any way appertaining thereto, all fixtures, all
easements now or hereafter benefiting the Land and all royalties and rights
appertaining to the use and enjoyment of the Land, including, without
limitation, all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.


     “Reorganization Cases” means the cases of the Borrower and the Guarantors
pursuant to chapter 11 of the Bankruptcy Code pending in the Bankruptcy Court.


     “Required Lenders” means, as of any date of determination, the Lenders
having a majority of the Aggregate Commitments.


     “Requirement of Law” means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents of
such Person, and all federal, state and local laws, rules and regulations, and
all orders, judgments, decrees or other determinations of any Governmental
Authority or arbitrator, applicable to or binding upon such Person or any of
its property or to which such Person or any of its property is subject.


     “Responsible Officer” means, with respect to any Person, any of the
principal executive officers, managing members or general partners of such
Person but in any event, with respect to financial matters, the chief financial
officer, treasurer or controller of such Person.


     “Section 363 Sale Motion” means a motion for the sale of all or
substantially all of the assets of the Borrower pursuant to Section 363 of the
Bankruptcy Code which shall be reasonably acceptable to the Required Lenders
and the proceeds of which shall be sufficient to pay all Obligations under this
Agreement.


     “Section 363 Sale” means a sale of all or substantially all of the assets
of the Borrower pursuant to Section 363 of the Bankruptcy Code.


     “Securities Entitlement” has the meaning specified in Article 8 of the
UCC.


     “Standstill Period” has the meaning specified in Section 7.2.


     “Stock” means shares of capital stock (whether denominated as common stock
or preferred stock), beneficial, partnership or membership interests,
participations or other equivalents (regardless of how designated) of or in a
corporation, partnership, limited liability company or equivalent entity,
whether voting or non-voting.


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     “Strategic Agreements” means, collectively, (i) the Strategic Agreement,
dated as of March 23, 1994, between LQP and Airtouch Communications, (ii) the
Memorandum of Understanding — U.S. Government and Aviation dated November 1999
between Globalstar USA, Inc. (“GUSA”) and LQP, and (iii) the Globalstar Service
Reseller Agreement entered into as of April 1, 2000, between, GUSA and
Government Services, LLC.


     “Subordination Cap” has the meaning specified in the definition of
Wind-Down Funds in this Section 1.1.


     “Subsidiary” means, with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of 50% or more of
the outstanding Stock having ordinary voting power to elect a majority of the
board of directors, managers, trustees or other
controlling persons, is, at the time, directly or indirectly, owned or
controlled by such Person and/or one or more Subsidiaries of such Person
(irrespective of whether, at the time, Stock of any other class or classes of
such entity shall have or might have voting power by reason of the happening of
any contingency). As used herein, unless the context requires otherwise,
“Subsidiary” means a direct or indirect Subsidiary of the Borrower.


     “Supporting Obligations” has the meaning specified in Article 9 of the
UCC.


     “Taxes” has the meaning specified in Section 2.8(a).


     “Term Loan” has the meaning specified in Section 2.1.


     “Term Loan Borrowing” means a borrowing consisting of Term Loans made on
the same day.


     “Term Loan Commitment” means the Commitment of Lenders to loan up to a
maximum aggregate principal amount of $10,000,000 to Borrower on the terms
provided herein.


     “Term Loan Draw Conditions” means all of the conditions precedent to the
obligation of the Lenders to make Term Loans set forth in Section 3.1 and
Section 3.2.


     “Term Loan Note” means a promissory note of the Borrower, payable to the
order of any Lender in a principal amount equal to the amount of such Lender’s
Term Loan Commitment, substantially in the form of Exhibit A-1, evidencing the
aggregate Indebtedness of the Borrower to such Lender resulting from the Term
Loans owing to such Lender.


     “Trademarks” means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof; and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, and (b) the right to obtain all renewals thereof.


13






 


     “Trademark License” means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.


     “UCC” means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York.


     “Wind-Down Budget” means that certain Wind-Down Budget dated February 20,
2003 provided by Borrower to Lenders.


     “Wind-Down Costs” means the Administrative Expenses and wind-down costs to
liquidate Borrower and Guarantors set forth in the Wind-Down Budget; provided,
however, that
the wind-down costs listed under the “Nonlabor Costs” heading in the
Wind-Down Budget may increase by an amount up to $500,000 so long as the
wind-down costs under the “Working Capital” heading in the Wind-Down Budget
decrease by a like amount and vice-versa; provided further, however,
notwithstanding anything to the contrary in the Wind-Down Budget, Wind-Down
Costs do not include the fees, costs and expenses of investigating, pursuing
and prosecuting Avoidance Actions.


     “Wind-Down Funds” means sum of (i) the amount of cash-on-hand of the
Borrower and its wholly-owned Subsidiaries as of the date of entry of the
Interim Financing Order, (ii) the “Prepaids, Deposits and Retainers” in the
amount of $1,178,000 identified in the Wind-Down Budget, (iii) when available,
the recovery of the payments on account of the 2 GHz contract with Space
Systems/Loral, Inc. (the “Loral Refund”), and (iv) when available, the proceeds
from the settlement with Elsacom S.p.A. and/or its affiliates as described in
the related motion filed by the Borrower and the Guarantors filed with the
Bankruptcy Court on January 22, 2003, that shall be available to pay the
Wind-Down Costs up to a maximum amount of $15,000,000 (the “Subordination
Cap”). Upon the entry of the Interim Financing Order (i) the Borrower shall
notify the Administrative Agent in writing of the amount of the cash-on-hand
constituting Wind-Down Funds and (ii) such cash-on-hand constituting the
Wind-Down Funds will be segregated from other cash of the Borrower. To the
extent the Borrower receives the Loral Refund or the Elsacom settlement
proceeds such Wind-Down Funds will also be segregated. If the Borrower pays
non-recurring Wind-Down Costs (i.e., items of a type within the Wind-Down
Budget not projected to recur in an Approved Budget prior to the Maturity Date)
from funds other than the Wind-Down Funds, including from funds obtained
through the operation of the Borrower’s business, the Subordination Cap will be
reduced, dollar for dollar, for the Wind-Down Costs so paid. If the Borrower
pays recurring Wind-Down Costs (i.e., items of a type within the Wind-Down
Budget, including professional fees, projected to recur in an Approved Budget
prior to the Maturity Date), from funds other than the Wind-Down Funds,
including, without limitation, by virtue of the last sentence of Section 2.2(a)
of this Agreement, such payments will not reduce the Subordination Cap.


     Section 1.2 Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word “from” means “from and including” and the words “to” and “until” each
mean “to but excluding” and the word “through” means “to and including.”


14






 


     Section 1.3 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in conformity with GAAP and all accounting
determinations required to be made pursuant hereto shall, unless expressly
otherwise provided herein, be made in conformity with GAAP.


     Section 1.4 Certain Terms. (a) The words “herein,” “hereof “ and
“hereunder” and other words of similar import refer to this Agreement as a
whole, and not to any particular Article, Section, subsection or clause in this
Agreement.


     (b)  References herein to an Exhibit, Schedule, Article, Section,
subsection or clause refer to the appropriate Exhibit or Schedule to, or
Article, Section, subsection or clause in this Agreement.


     (c)  Each agreement defined in this Article I shall include all appendices,
exhibits and schedules thereto and any references in this Agreement to such
agreement shall be to such agreement as so amended, restated, supplemented or
modified from time to time.


     (d)  References in this Agreement to any statute shall be to such statute
as amended or modified and in effect at the time any such reference is
operative.


     (e)  The terms “Lender” and “Administrative Agent” include their respective
successors and each permitted assignee of such Lenders who becomes a party
hereto pursuant to Section 10.14.


     (f)  Terms not otherwise defined herein and defined in the UCC are used
herein with the meanings specified in the UCC.


ARTICLE II


AMOUNTS AND TERMS OF THE LOANS


     Section 2.1 The Term Loans.


     (a)  Subject to the terms and conditions set forth herein, each Lender
severally agrees to make term loans (each such loan, a “Term Loan”) to the
Borrower from time to time, on any Business Day during the period from the date
of satisfaction or waiver of all Term Loan Draw Conditions until the Maturity
Date in an aggregate principal amount not to exceed such Lender’s Commitment;
provided, however, that after giving effect to any borrowing, (i) the total
outstanding Term Loans shall not exceed the Aggregate Commitments and (ii) the
Aggregate Term Loans of any Lender shall not exceed such Lender’s Commitment.
The Aggregate Commitments will be held in an account by Katten Muchin Zavis
Rosenman pursuant to an escrow agreement reasonably satisfactory to the
Administrative Agent, the Borrower and Katten Muchin Zavis Rosenman. The
Lenders may not withdraw funds deposited in such account after the date of
entry of an Interim Financing Order; provided, however, that the Administrative
Agent may return any unused portion of the Aggregate Commitment to the Lenders
at the Maturity Date or at the direction of the Required Lenders prior to the
Maturity Date upon termination of the Term Loan Commitment or termination of
the Agreement under the terms of this Agreement. Borrower and Guarantors agree
that, notwithstanding Katten Muchin Zavis

15






 




Rosenman’s role as escrow agent,
Katten Muchin Zavis Rosenman may continue to represent the Administrative Agent
and the Lenders in this transaction in connection with this Agreement,
including the enforcement of rights and remedies of the Administrative Agent
and the Lenders.


     (b)  The Term Loans shall be evidenced by the Term Loan Notes.


     Section 2.2 Making the Loans.


     (a)  Each Term Loan Borrowing (other than with respect to the initial
Borrowing made hereunder) shall be made on notice, given by the Borrower to
Administrative Agent not later than 11:00 a.m. (New York City time) at least
two (2) Business Days prior to the proposed Term Loan Borrowing. Each such
notice (a “Notice of Borrowing”) shall be in substantially the form of Exhibit
D, which Notice of Borrowing shall specify (i) the date of the requested
Borrowing, (ii) the amount of such Borrowing, and (iii) the Permitted
Expenditures to be paid with the proceeds of such Borrowing. In connection
with submission of a Notice of Borrowing, the Borrower may request one or more
modifications to an Approved Budget, provided that the Permitted Expenditures
set forth in such Approved Budget may be adjusted by (x) an amount equal to 10%
of such Permitted Expenditures in the aggregate (the “Maximum Aggregate
Adjustment Amount”) (provided that no single line item for Permitted
Expenditures in the Approved Budget may be adjusted by an amount in excess of
50% of the Maximum Aggregate Adjustment Amount (the Maximum Line Item Adjusted
Amount)), plus (y) the amount by which the actual cash revenues, including user
terminal and other receipts, exceed the forecasted cash revenue set forth in
the Approved Budget, without the written consent of the Required Lenders.


     (b)  Each Term Loan Borrowing shall be in an aggregate amount of the lesser
of $2,000,000 and the remaining Aggregate Commitment and no more than one Term
Loan Borrowing shall be made during any 15 day period; provided, however, that
any Interim Loans pursuant to an Interim Financing Order shall be limited to
$4,000,000 in the aggregate.


     (c)  Each Notice of Borrowing shall be irrevocable and binding on the
Borrower.


     Section 2.3 Repayment. The Borrower shall repay the entire unpaid
principal amount of the Term Loans and all other outstanding Obligations on the
Maturity Date.


     Section 2.4 Prepayments. (a) The Borrower shall have no right to prepay
the principal amount of any Term Loan other than as provided in this Section
2.4.


     (b)  The Borrower may, upon at least three Business Days’ prior notice to
the Administrative Agent stating the proposed date and aggregate principal
amount of the prepayment, prepay the outstanding principal amount of the Loans
in whole or in part, together with accrued interest to the date of such
prepayment on the principal amount prepaid; provided, however, that each
partial prepayment shall be in an aggregate principal amount not less than
$250,000 or integral multiples of $50,000 in excess thereof. Upon the giving of
such notice of prepayment, the principal amount of the Loans specified to be
prepaid shall become due and

16






 




payable on the date specified for such prepayment.
Any such prepayment of a Loan shall result in a permanent reduction in the
Commitment.


     Section 2.5 Interest. (a) All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from
the date such Loans are made and, in the case of such other Obligations,
from the date such other Obligations are due and payable until, in all cases,
paid in full, at a rate equal to 10% per annum.


     (b)  Interest accrued on the Loans shall be capitalized on each Interest
Payment Date and added to the outstanding principal amount of the Loans, which
capitalized interest shall be evidenced by the PIK Interest Notes. Each Lender
is hereby authorized to endorse on the grid attached to such Lender’s PIK
Interest Note the amount of interest capitalized and evidenced by such Lender’s
PIK Interest Note.


     Section 2.6 Payments and Computations. (a) The Borrower shall make each
payment hereunder and under the Notes not later than 1:00 P.M. (New York City
time) on the day when due, in Dollars, to the Administrative Agent at the
address set forth in Section 10.2 in immediately available funds without
set-off or counterclaim. The Administrative Agent shall disburse any such
payment to the Lenders as provided in Section 11.10.


     (b)  All computations of interest shall be on the basis of a year of 365
days for the actual number of days occurring in the period for which such
interest is payable.


     (c)  Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest.


     (d)  If a Final Financing Order is not entered and/or the conditions set
forth in Section 3.2 are not satisfied or waived by the Lenders on or before
March 7, 2003, the Borrower shall repay any outstanding Obligations from the
Wind-Down Funds within one Business Day thereafter.


     Section 2.7 Application of Payments. All payments (including prepayments)
on the Loans or any other Obligations (other than the capitalization of
interest as set forth in Section 2.5(b)) shall be made to the Administrative
Agent for application against the Obligations as follows (regardless of how the
Lenders may treat such payments for purposes of their own accounting), in each
case in proportion to each Lender’s Pro Rata Share: first to then due and
outstanding fees, expenses or other charges of the Lenders under this Agreement
or any of the other Loan Documents to the extent payable by the Borrower;
second to then due interest on any principal amount of Loans prepaid, if any;
third to the principal balance of the Term Loans evidenced by the PIK Interest
Notes; and fourth to the principal balance of the Term Loans.


     Section 2.8 Taxes. (a) Any and all payments by the Borrower under each
Loan Document shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in the case
of each Lender, taxes measured by its net income, and franchise taxes

17






 




imposed
on it, by the jurisdiction under the laws of which such Lender is organized or
any political subdivision thereof (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as “Taxes”). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender (i) the sum payable shall be increased as may be
necessary so that after making all required deductions (including, without
limitation, deductions applicable to additional sums payable under this Section
2.8) such Lender receives an amount equal to the sum they would have received
had no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law and (iv) the
Borrower shall deliver to such Lender evidence of such payment to the relevant
taxation or other authority.


     (b)  In addition, the Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction which arise from any payment made under any
Loan Document or, from the execution, delivery or registration of, or otherwise
with respect to, any Loan Document.


ARTICLE III


CONDITIONS OF LENDING


     Section 3.1 Conditions Precedent to Interim Loans. The obligation of each
Lender to make the Interim Loans requested to be made by it on an interim basis
pursuant to an Interim Financing Order is subject to the satisfaction of all
the following conditions precedent:


     (a)  Financing Order and Bankruptcy Court Proceedings. The Interim
Financing Order shall have been entered by the Bankruptcy Court on or before
February 25, 2003, and any or all provisions of such order shall not have been
stayed or vacated.


     (b)  Certain Documents. The Administrative Agent shall have received the
following documents:



		
	 	     (i) On or before February 25, 2003, this Agreement, duly executed
and delivered by the Borrower and each Guarantor;




		
	 	     (ii) On or before February 25, 2003, the Notes, duly executed and
delivered by the Borrower; and




		
	 	     (iii) On the date of each Term Loan Borrowing, a certificate, signed
by a Responsible Officer of each Credit Party except LQP, stating that as
of each such date each of the conditions specified in Sections 3.3(a),
(b) and (c) has been satisfied.



     Section 3.2 Conditions Precedent to Term Loans Under Final Financing
Order. The obligation of each Lender to make the Loans requested to be made by
it pursuant to the Term Loan Commitment on the Closing Date is subject to the
satisfaction of all the following conditions precedent:


18






 


     (a)  Financing Order and Bankruptcy Court Proceedings. The Final Financing
Order shall have been entered by the Bankruptcy Court on or before March 7,
2003 and any or all provisions of such order shall not have been stayed or
vacated.


     (b)  Certain Documents. The Administrative Agent shall have received the
following documents:



		
	 	     (i) On or before March 7, 2003, this Agreement, duly executed and
delivered by the Borrower and each Guarantor;
	 
	 	     (ii) On or before March 7, 2003, the Notes, duly executed and
delivered by the Borrower;
	 
	 	     (iii) On or before March 7, 2003, the LQP Pledge Agreement, duly
executed and delivered by LQP, in form and substance satisfactory to the
Lenders; and
	 
	 	     (iv) On the date of each Term Loan Borrowing, a certificate, signed
by a Responsible Officer of each Credit Party, stating that as of each
such date each of the conditions specified in Sections 3.3(a), (b) and
(c) has been satisfied.



     (c)  Other Actions.



		
	 	     (i) On or before March 7, 2003, the United States Bankruptcy Court
for the District of Delaware having jurisdiction over the cases of LQP
and certain of its Affiliates shall have entered an order, in form and
substance reasonably satisfactory to the Required Lenders, approving
LQP’s pledge of its ownership interest in the outstanding Stock of L/Q
Licensee, Inc. (“L/Q Licensee”) pursuant to the LQP Pledge Agreement.
	 
	 	     (ii) On or before March 7, 2003, the Lenders shall have received
satisfactory evidence of an agreement between the Borrower and Loral
Space & Communications Ltd. (“Loral”), which agreement may be in the form
of an executed term sheet signed by the Borrower, the Committee and
Loral, on terms and conditions reasonably satisfactory to the Required
Lenders, with respect to the following:




		
	 	     (A) the delivery of eight ground spare satellites to the
Borrower currently held by Loral;
	 
	 	     (B) the termination or modification, as the case may be, of
each of the Strategic Agreements;
	 
	 	     (C) the transfer by L/Q Licensee to the Borrower of the Big
LEO License and all rights thereunder; and
	 
	 	     (D) the transfer by Loral to the Borrower of all of its
ownership interest in the Stock of all entities owning or operating
the Borrower’s gateway and operations in Canada and the treatment of the Indebtedness
owed to Loral by such entities in a manner reasonably satisfactory
to the Lenders.



19






 






     Section 3.3 Conditions Precedent to Each Loan. The obligation of each
Lender to make any Loan on any date (including the Closing Date) shall be
subject to the satisfaction of all of the following conditions precedent:


     (a)  The representations and warranties set forth in Article IV and in the
other Loan Documents shall be true and correct on and as of such date as though
made on and as of such date other than any such representations and warranties
that, by their terms, refer to an earlier date;


     (b)  The making of the Loans on such date shall not violate any Requirement
of Law and is not subject to any stay or injunction, whether temporary,
preliminary or permanent;


     (c)  No Default or Event of Default shall have occurred and be continuing;
and


     (d)  Each of the Term Loan Draw Conditions in Section 3.1 or 3.2 hereof, as
the case may be, shall have been satisfied or waived by the Required Lenders.


ARTICLE IV


REPRESENTATIONS AND WARRANTIES


     To induce the Lenders to enter into this Agreement, the Borrower and each
Guarantor represents and warrants to the Lenders that on the Closing Date:


     Section 4.1 Corporate Existence: Compliance with Law. (a) The Borrower is
a limited partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of the Borrower’s Subsidiaries
that is (i) a corporation is duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, (ii) a
limited liability company is duly organized, validly existing and in good
standing under the jurisdiction of its formation and (iii) a limited
partnership is duly organized and validly existing under the laws of the
jurisdiction of its formation.


     (b)  Except as set forth in Schedule 4.1, each of the Borrower and its
Subsidiaries (i) is duly qualified or licensed as a foreign limited
partnership, limited liability company or corporation, as applicable, in each
jurisdiction in which its ownership of properties or the conduct of its
business requires such qualification or licensing except for failures to be so
qualified or licensed which in the aggregate would not reasonably be expected
to have a Material Adverse Effect; (ii) has all requisite limited partnership,
limited liability company or corporate power, as applicable, and authority and
the legal right to own, pledge, mortgage and operate its properties, to lease
the property it operates under lease and to conduct its business as now or
currently proposed to be conducted; (iii) is in compliance with its certificate
of limited
partnership and partnership agreement, certificate of formation of limited
liability company and limited liability company agreement, or certificate of
incorporation and by-laws, as applicable; (iv) is in compliance with all other
applicable Requirements of Law, except for such noncompliances as in the
aggregate would not reasonably be expected to have a Material Adverse Effect
and Requirements of Law that are stayed as a result of the commencement of the

20






 




Reorganization Cases; and (v) has made all necessary filings with, and has
given all necessary notices to, the FCC to the extent required for such
ownership and use with respect to the FCC Licenses, except for failures to file
or give notice which in the aggregate would not reasonably be expected to have
a Material Adverse Effect.


     Section 4.2 Corporate Power: Authorization: Enforceable Obligations.
Except as set forth in Schedule 4.2:


     (a)  The execution, delivery and performance by the Borrower and each
Guarantor of the Loan Documents to which it is a party and the consummation of
the transactions related to the financing contemplated hereby:



		
	 	     (i) are within its limited partnership, limited liability company or
corporate powers, as applicable;
	 
	 	     (ii) have been duly authorized by all necessary limited partnership,
limited liability company or corporate action, as applicable;
	 
	 	     (iii) do not and will not (A) contravene its respective certificate
of limited partnership or partnership agreement, certificate of limited
liability company or limited liability company agreement, or certificate
of incorporation or by-laws, as applicable, (B) upon entry of the
Financing Order by the Bankruptcy Court violate any other applicable or
enforceable Requirement of Law, or any applicable or enforceable order or
decree of any Governmental Authority or arbitrator, (C) result in the
breach of, or constitute a default under, or result in or permit the
termination or acceleration of, any Contractual Obligation of the
Borrower or any Guarantor, the effect of which will not be subject to the
automatic stay pursuant to section 362 of the Bankruptcy Code or (D)
result in the creation or imposition of any Lien upon any of its property
other than Liens in favor of the Lenders pursuant to the Loan Documents;
and
	 
	 	     (iv) do not require the consent of, authorization by, approval of,
notice to, acts by or filing or registration with, any Governmental
Authority or any other Person, except as otherwise ordered by the
Bankruptcy Court or required by the Bankruptcy Code or the Bankruptcy
Rules.



     (b)  This Agreement has been, and each of the other Loan Documents will
have been upon delivery thereof pursuant to Section 3.1 and Section 3.2, duly
executed and delivered for the benefit of or on behalf of each Credit Party
party thereto. This Agreement and the other Loan Documents will be, when
delivered pursuant hereto, the legal, valid and binding
obligation of such Credit Party, enforceable against it in accordance with
its terms, the Interim Financing Order and the Final Financing Order.


     Section 4.3 Ownership of Subsidiaries. Set forth on Schedule 4.3 is a
complete and accurate list, as of the date hereof, of all Subsidiaries of the
Borrower and, as to each such Subsidiary, the exact legal name, jurisdiction of
its incorporation or organization, taxpayer identification number, the number
of shares authorized (in the case of capital stock) and the number and/or
percentage of such outstanding shares of each such class or partnership or
limited

21






 




liability company interests owned (directly or indirectly) by the
Borrower, any other Grantor or any other owner. Except as set forth in Schedule
4.3, no Stock of any Subsidiary of the Borrower is subject to any outstanding
option, warrant, right of conversion or purchase or any similar right. All of
the outstanding Stock of each Subsidiary of the Borrower owned (directly or
indirectly) by the Borrower (including the Pledged Stock) has been duly and
validly issued and is owned by the Borrower or a Subsidiary of the Borrower,
free and clear of all Liens except those created under the Loan Documents and
the Financing Order. All of outstanding shares of Stock that are owned by the
Borrower or each Subsidiary that is a corporation are fully paid and
nonassessable. All partnership or limited liability company interests of each
Subsidiary that is a limited partnership or limited liability company, as the
case may be, owned by the Borrower are fully paid and nonassessable to the
extent required as of the date of this Agreement. Neither the Borrower nor any
such Subsidiary is a party to, or has knowledge of, any agreement restricting
the transfer or hypothecation of any Stock of any such Subsidiary, other than
the Loan Documents.


     Section 4.4 Secured, Super Priority Obligations. (a) On and after (i) the
entry of the Interim Financing Order with respect to the Interim Loans and (ii)
the entry of the Final Financing Order with respect to all Loans, the
provisions of the Loan Documents and the Interim Financing Order or Final
Financing Order, as the case may be, are effective to create in favor of the
Administrative Agent for the ratable benefit of the Lenders, legal, valid and
perfected Liens on and security interests (having the priority provided for
herein and in the Interim Financing Order and Final Financing Order) in all
right, title and interest in the Collateral, enforceable against each Grantor
that owns interest in such Collateral.


     (b)  All Obligations and all other amounts owing by the Borrower hereunder
and under the other Loan Documents and by the Guarantors under the Guaranty in
respect thereof will be secured pursuant to section 364(c)(2) of the Bankruptcy
Code, the Interim Financing Order and the Final Financing Order, by a first
priority perfected security interest in and Lien on, and mortgage against, all
of the Collateral and all Proceeds, rents and products of all of the foregoing
and all distributions thereon that are unencumbered as of the date hereof.


     (c)  All Obligations and all other amounts owing by the Borrower hereunder
and under the other Loan Documents and by the Guarantors under the Guaranty in
respect thereof will be secured pursuant to section 364(c)(3) of the Bankruptcy
Code, the Interim Financing Order and the Final Financing Order, by a perfected
junior security interest in and Lien on, and mortgage against, all of the
Collateral that is subject to the Permitted Liens.


     (d)  Pursuant to section 364(c)(1) of the Bankruptcy Code, the Interim
Financing Order and the Final Financing Order, all Obligations and other
amounts owing by the Borrower hereunder and under the other Loan Documents and
by Guarantors under the Guaranty in respect thereof at all times will
constitute allowed super-priority administrative expense claims in the
Reorganization Cases having priority over all administrative expenses of the
kind specified in sections 503(b) or 507(b) of the Bankruptcy Code and
including chapter 7 administrative expenses. The foregoing super-priority
administrative claims shall not be paid from the Avoidance Actions.


     Section 4.5 Use of Proceeds. The proceeds of the Loans shall be used
solely by the Borrower to pay the costs and expenses of the administration of
the Reorganization Cases,

22






 




including Permitted Expenditures and other
obligations, as set forth in the Approved Budget, and to pay such other
obligations as contemplated by this Agreement, ordered by the Bankruptcy Court
or required by the Bankruptcy Code or Bankruptcy Rules. The Permitted
Expenditures set forth in the Approved Budget may be adjusted in accordance
with Section 2.2(a).


     Section 4.6 Intellectual Property.


     (a)  Except as set forth in Schedule 4.6, the Borrower and its Subsidiaries
own or license or otherwise have the right to use all Intellectual Property
that is necessary for the operation of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of its Subsidiaries, except where the failure to so own or
license or otherwise obtain the right to use, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect or where any
such infringement or conflict, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Except as set forth
in Schedule 4.6, to the actual knowledge of the Borrower following reasonable
inquiry by its Responsible Officers, no slogan or other advertising device,
product, process, method, substance, part or component, or other material now
employed, or now contemplated to be employed, in the ordinary course of
business by the Borrower or any of its Subsidiaries infringes upon or conflicts
with any rights owned by any other Person, except where any such infringement
or conflict, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect, and no material claim or litigation
regarding any of the foregoing is pending or threatened.


     (b)  Except as set forth on Schedule 4.6, no Grantor owns any material
Trademarks, Patents or Copyrights or has any material Trademarks, Patents or
Copyrights registered in, or the subject of pending applications in, the United
States Patent and Trademark Office or any similar office or agency in any other
country or any political subdivision thereof. The registrations for the
Collateral disclosed on Schedule 4.6 are valid and subsisting and in full force
and effect to the extent they are necessary for the operation of the business
of such Grantor in the reasonable business judgment of such Grantor and
material to the assets, properties, condition (financial or otherwise),
operations or prospects of the Borrower and its Subsidiaries taken as a whole,
except where the failure to maintain a valid and subsisting registration with
respect to such collateral, individually or in the aggregate, would not
reasonably be expected to
have a Material Adverse Effect. None of the material Patents or Copyrights
necessary for the operation of the business of such Grantor in the reasonable
business judgment of such Grantor have been abandoned or dedicated, except
where such abandonment or dedication, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.


     Section 4.7 Pledged Collateral.


     (a)  The Pledged Stock, Pledged Partnership Interests and Pledged LLC
Interests pledged hereunder by each Grantor constitutes that percentage of the
issued and outstanding equity of all classes of each issuer thereof as set
forth on Schedule 4.7.


     (b)  (i) All of the Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests have been duly and validly issued and (ii) all of the
Pledged Stock are fully paid

23






 




and nonassessable and, to the extent required as
of the date of this Agreement, all of the Pledged Partnership Interests and
Pledged LLC Interests are fully paid and nonassessable.


     (c)  Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terns, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors’ rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law).


     (d)  All Pledged Collateral consisting of certificated securities has been
delivered to the Administrative Agent on or prior to the date of entry of an
Interim Financing Order to the extent requested by the Administrative Agent.


     (e)  Other than the Pledged Partnership Interests and the Pledged LLC
Interests that constitute General Intangibles, there is no Pledged Collateral
other than that represented by certificated securities in the possession of the
Administrative Agent on the date of entry of an Interim Financing Order.


     (f)  No Person other than the Administrative Agent for the ratable benefit
of the Lenders has control within the meaning of the UCC over any Investment
Property of such Grantor.


ARTICLE V


AFFIRMATIVE COVENANTS


     As long as any of the Obligations or any portion of the Commitment remains
outstanding, unless the Lenders otherwise consent in writing, the Borrower and
each Guarantor agrees with the Lenders that:


     Section 5.1 Compliance with Laws., Etc. The Borrower and each Guarantor
shall comply in all material respects with all applicable laws, rules,
regulations and orders, except
where (a) the failure to comply would not reasonably be expected to have a
Material Adverse Effect or (b) compliance is prohibited by, in conflict with,
or excused by, the Bankruptcy Code, the Bankruptcy Rules or order of the
Bankruptcy Court.


     Section 5.2 Maintenance of Existence. The Borrower and each Guarantor
shall maintain and preserve, in each case as in effect on the date hereof, its
respective existence as a corporation or other form of business organization in
good standing, as the case may be, and all material rights, privileges, FCC
Licenses, Patents, Patent Licenses, Copyrights, Copyright Licenses, Trademarks,
Trademark Licenses, trade names and franchises necessary in the reasonable
business judgment of such Credit Party to the operations of the business of
such Credit Party, except where the failure to do so results solely from the
commencement of the Reorganization Cases and except as permitted in Section
6.3.


     Section 5.3 Access. Subject to the provisions of Section 10.11 and any
Non-Disclosure Agreements, the Borrower and each Guarantor shall, at any
reasonable time and from time to time, upon prior reasonable notice, permit the
Lenders, or any agents or representatives

24






 




thereof; to (a) examine and make
copies of and abstracts from its records and books of account, (b) visit its
properties and inspect the Collateral of such Grantor, (c) discuss its affairs,
finances and accounts with any of its respective officers or directors and (d)
communicate directly with its independent certified public accountants.


     Section 5.4 Keeping of Books. The Borrower and each Guarantor shall keep
proper books of record and account, in which full and correct entries in all
material respects shall be made of all of its financial transactions, assets
and business in conformity with GAAP and all Requirements of Law.


     Section 5.5 Use of Proceeds. The Borrower shall use the entire amount of
the proceeds of the Loans as provided in Section 4.5; provided, however, that
the Borrower shall not use the proceeds from any Loans for any purpose that is
improper under the Bankruptcy Code.


     Section 5.6 Further Assurances. The Borrower and each Guarantor shall
perform, make, execute and deliver all such additional and further acts,
things, deeds, occurrences and instruments as the Lenders may reasonably
require to document and consummate the transactions contemplated hereby and to
vest completely in and ensure the Lenders their respective rights under this
Agreement, the Notes and the other Loan Documents.


     Section 5.7 Secured Indebtedness. To the knowledge of the Borrower, there
exists no indebtedness of the Borrower for borrowed money secured by any Lien
upon or in property owned by the Borrower as of the date hereof.


ARTICLE VI


NEGATIVE COVENANTS


     As long as any of the Obligations or any portion of the Commitment remains
outstanding, without the written consent of the Lenders, the Borrower and each
Guarantor agrees with the Lenders that:


     Section 6.1 Liens, Etc. Neither the Borrower nor any of it Subsidiaries
shall create or suffer to exist any Lien upon or with respect to any of its
properties, whether now owned or hereafter acquired, or assign any right to
receive income, except for (collectively, the following are hereinafter
referred to as the “Permitted Liens”): (a) Liens created pursuant to the Loan
Documents and authorized by the Financing Order; (b) purchase money Liens upon
or in any property hereinafter acquired by the Borrower or such Subsidiary in
the ordinary course of business not inconsistent with the Approved Budget to
secure the purchase price of such property or to secure Indebtedness incurred
solely for the purpose of financing the acquisition of such property, including
Liens to secure Capital Lease Obligations; (c) any Lien securing the renewal,
extension or refunding of any Indebtedness or other Obligation secured by any
Lien permitted by subsection (b) of this Section 6.1 without any increase in
the amount secured thereby or in the assets subject to such Lien; (d) Liens
arising by operation of law in favor of materialmen, mechanics, warehousemen,
carriers, lessors or other similar Persons incurred by the Borrower or such
Subsidiary in the ordinary course of business which secure its obligations to
such Person; (e) Liens securing taxes, assessments or governmental charges or
levies, exclusive of any such

25






 




Liens asserted by the FCC; (f) Liens incurred or
pledges and deposits made in the ordinary course of business in connection with
workers’ compensation, unemployment insurance, old-age pensions and other
social security benefits; (g) Liens securing the performance of statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business, and judgment
liens; (h) zoning restrictions, easements, licenses, reservations, restrictions
on the use of real property or minor irregularities incident thereto which do
not in the aggregate materially detract from the value or use of the property
or assets of the Borrower or such Subsidiary or impair, in any material manner,
the use of such property for the purposes for which such property is held by
the Borrower or such Subsidiary; and (i) valid, perfected and enforceable Liens
of record existing immediately prior to the Petition Date.


     Section 6.2 Indebtedness. Neither the Borrower nor any Guarantor shall
create or suffer to exist any Indebtedness except: (i) the Obligations; (ii)
Indebtedness outstanding on the Petition Date; (iii) current liabilities in
respect of taxes, assessments and governmental charges or levies incurred, or
Claims for labor, materials, inventory, services, supplies and rentals
incurred, or for goods or services purchased in the ordinary course of business
of the Borrower or such Guarantor; (iv) Indebtedness arising under any
performance bond reimbursement obligation entered into by the Borrower or such
Guarantor; (v) Indebtedness constituting Administrative Expenses or other
administrative expense obligations incurred in the Reorganization Cases,
unless disallowed by the Bankruptcy Court; (vi) Indebtedness otherwise
permitted under this Agreement; and (vii) Indebtedness secured by Permitted
Liens.


     Section 6.3 Mergers, Sale of Assets, Etc. Except in connection with a
Plan of Reorganization and except for the Globalstar Canada Transaction,
neither the Borrower nor any of its Subsidiaries shall (a) directly or
indirectly, by operation of law or otherwise, merge with, consolidate with,
acquire all or substantially all of the assets or Stock, or otherwise combine
with, any Person or form any Subsidiary, (b) sell, convey, transfer, lease or
otherwise dispose of any of its assets or Stock or any interest therein to any
Person, or permit or suffer any other Person to acquire any interest in any of
the assets of the Borrower or such Subsidiary, except (i) the sale or
disposition of Inventory or other assets in the ordinary course of business or
other tangible personal property which has become obsolete or is replaced in
the ordinary course of business, and (ii) the rejection or assumption and
assignment of executory contracts and unexpired leases pursuant to section 365
of the Bankruptcy Code; provided that all necessary approvals, including the
approval of the Bankruptcy Court, have been obtained, or (c) enter into
agreements in respect of any of the foregoing prohibited transactions.


     Section 6.4 Investments. Neither the Borrower nor any of its Subsidiaries
shall make or commit to make any loan, extension of credit or capital
contribution to, or purchase of any stock, bonds, notes, debentures or other
securities of, or make any other investment in any Person (all such
transactions being called “Investments”) except:


     (a)  Investments in cash equivalents;


     (b)  Investments existing on the date hereof; or


26






 


     (c)  Investments made in any Person that are not inconsistent with the
Approved Budget.


     Section 6.5 Restricted Payments. Neither the Borrower nor any of its
Subsidiaries shall, except to the extent not inconsistent with the Approved
Budget, (a) declare, pay or make or permit any Subsidiary to declare, pay or
make (i) any dividends or other distributions with respect to Stock or rights
to acquire Stock or any payment on account of such Stock, or (ii) any payment
of principal or payment of interest on account of any of its Indebtedness
incurred prior to the commencement of the Reorganization Cases, except as
otherwise ordered by the Bankruptcy Court, (b) set apart assets for a sinking
or any analogous fund for the purchase, redemption, or retirement or other
acquisition of, any shares of its Stock or rights to acquire Stock or any of
its Indebtedness or (c) purchase, defease, acquire, or redeem any of its
Indebtedness; provided that the Borrower may make required or permitted
payments or prepayments on the Loans.


     Section 6.6 Transactions With Affiliates. Neither the Borrower nor any of
its Subsidiaries shall enter into any transaction, including any purchase,
sale, lease or exchange of property or the rendering of any service, with any
Affiliate or employee, except transactions that
are (a) contemplated by this Agreement or (b) in the ordinary course of
the Borrower’s or such Subsidiary’s business and are not inconsistent with the
Approved Budget.


     Section 6.7 Capital Expenditures. Neither the Borrower nor any of its
Subsidiaries shall make any capital expenditures inconsistent with the Approved
Budget.


     Section 6.8 Amendment of Charter or Bylaws. Neither the Borrower nor any
of its Subsidiaries shall, except as set forth in the Plan of Reorganization,
amend its partnership agreement, certificate or articles of incorporation or
other equivalent organizational documents to revise, in any material respect
from their form on the date hereof.


     Section 6.9 Prohibition on No Shop Clauses. Prior to the selection of an
investor pursuant to an auction of all or substantially all of the Borrower’s
assets or for the right to make an investment in the Borrower sanctioned and
approved by the Bankruptcy Court, neither the Borrower nor any of the
Guarantors shall enter into any agreement or agree to any provision that
prohibits, or in any way limits, the ability of the Borrower or Guarantors to:
(a) negotiate with Lenders, any member or affiliate of Lenders or any other
Party with respect to investment in the Borrower and Guarantors or acquisition
of assets of the Borrower and Guarantors; (b) negotiate a plan of
reorganization with Lenders, or any of its members or affiliates; and (c)
respond to unsolicited offers from Lenders, any member or affiliate of Lenders
or any other Party. This Section 6.9 shall survive any payment or prepayment
of the Loans. Notwithstanding the foregoing, nothing in this Section 6.9
shall prohibit or limit the Borrower or any Guarantor from including in the
documents governing an investment in, or acquisition of the assets of, the
Borrower and the Guarantors provisions that would prevent the Borrower and the
Guarantors from soliciting further offers so long as such provisions allow them
to respond to unsolicited offers and to terminate such investment or
acquisition in order to accept a transaction determined by the Borrower to be
more favorable to the stakeholders of the Borrower and the Guarantors, even if
such termination would result in the payment of a breakup fee and/or the
reimbursement of expenses by the Borrower or the Guarantors.



27










 



ARTICLE VII

TERMINATION


     Section 7.1 Termination; Acceleration. Upon the occurrence and during the
continuation of any Event of Default, without further order of, application to,
or action by, the Bankruptcy Court and without limiting any other right or
remedy, at the direction of the Required Lenders, the Administrative Agent may
by written notice to the Borrower and the Committee in accordance with Section
10.2 (a) declare that all or any portion of the Term Loan Commitment be
terminated, whereupon the obligation of the Lenders to make Loans shall
immediately terminate, and (b) declare the Loans, the PIK Interest Notes, all
accrued interest thereon and all other amounts and Obligations payable under
this Agreement to be forthwith due and payable, whereupon the Loans, the PIK
Interest Notes, all such interest and all such amounts and Obligations shall
become and be forthwith due and payable, without presentment, demand, protest
or further notice of any kind, all of which are hereby expressly waived by the
Borrower.


     Section 7.2 Standstill Period: Exercise of Remedies. Thirty days (the
“Standstill Period”) following the Administrative Agent’s written notice of
termination and acceleration given pursuant to Section 7.1, the automatic stay
provided in section 362 of the Bankruptcy Code shall be deemed automatically
vacated without further action or order of the Bankruptcy Court and the
Administrative Agent for the benefit of the Lenders shall be entitled to
exercise all of its rights and remedies under the Loan Documents and applicable
law, including, without limitation, all rights and remedies with respect to the
Collateral and the Guarantors; provided however that upon the occurrence of the
Maturity Date, the Standstill Period shall be five Business Days. The Lenders
shall not be required to make any Loans to Borrower under this Agreement during
the Standstill Period and Borrower shall not use the cash collateral (as that
term is defined in Section 363 of the Bankruptcy Code) of Lenders during the
Standstill Period, except for the Wind-Down Fund, as to which the Lenders’
Liens and super-priority claims are subordinated, provided however that the use
of the Wind-Down Funds during the Standstill Period for any purpose will result
in a dollar-for-dollar reduction in the Subordination Cap for any such funds so
used. The Administrative Agent shall have the right to seek an order of the
Bankruptcy Court on as little as one Business Day’s notice to the Borrower and
the Committee, terminating the Standstill Period if the Required Lenders
believe in good faith that the Collateral and/or its value are in jeopardy.


     Section 7.3 Commitment Fee. In consideration for Lenders’ agreement to
give the Term Loan Commitment, except as provided in Section 7.4, the Lenders
shall be entitled to receive as a commitment fee (such amount, the “Commitment
Fee”): (1) upon the Effective Date of a Plan of Reorganization or the first
date distributions are made to unsecured creditors, if made other than under
Plan of Reorganization $250,000 (or under circumstances in Section 7.4 hereof,
$125,000 at the time provided for in such Section 7.4) in cash or, if of
greater value, (2) a portion of the consideration otherwise to be distributed
to the general unsecured creditors of the Borrower and Guarantors under a Plan
of Reorganization or otherwise, determined as follows: (a) to the extent the
value of such distributions does not exceed $55,000,000, the Lenders shall not
be entitled to any of such consideration; (b) to the extent the value of such
distributions exceeds $55,000,000, the Lenders shall be entitled to receive 10%
of such distributions in excess of $55,000,000 but not in excess of
$155,000,000; and (c) to the extent the value of such distributions exceeds
$155,000,000, the Lenders shall also be entitled to receive 5% of such


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 distributions in excess of $155,000,000. In the event the Lenders are
entitled to receive a portion of the distributions to be made to general
unsecured creditors under a Plan of Reorganization or otherwise, as
contemplated in clause (2) of this Section 7.3, the distributions to the
Lenders shall be made on a pro rata basis in accordance with each Lender’s Pro
Rata Share, contemporaneously with the distributions to general unsecured
creditors and subject to any terms and conditions set forth in the Plan of
Reorganization regarding the making of such distributions. To the extent the
consideration to be distributed to the general unsecured creditors of the
Borrowers and Guarantors consists of different forms of consideration and the
Lenders are to receive a portion thereof pursuant to clause (2) of this Section
7.3, the Lenders shall receive the different forms of consideration in the same
proportions as the general unsecured creditors. The fees, costs and expenses
incurred by the lead and local counsel for the Lenders in connection with
negotiating, documenting and obtaining approval of this Agreement and all
related documents as permitted in Section 10.4 up to a maximum amount of
$100,000 (the “Documentation Fee”) shall be due and payable upon entry of an
Interim Order of the Bankruptcy Court approving this Agreement and the
financing provided herein and shall be deducted from the first draw made by
Borrower under this Agreement. The cap on the amount of the Documentation Fee
shall not otherwise affect the Lenders’ right to payment of their other fees,
costs and expenses payable under Section 10.4 or the amount thereof. For
purposes of this Section 7.3, any non-cash consideration to be distributed
pursuant to a Plan of Reorganization shall be deemed to have the value set
forth for such consideration in the disclosure statement relating to such Plan
of Reorganization. If the Required Lenders dispute the valuation, they shall
have the right to object to such valuation in conjunction with a determination
of the adequacy of the disclosure statement and the value of such non-cash
consideration shall be determined by the Bankruptcy Court; provided, however,
so long as the rights of Lenders to a final determination of valuation are
preserved, in recognition that such a valuation determination may take
considerable time of the Bankruptcy Court, the Lenders shall not object to the
approval and dissemination to creditors of Borrower and Guarantors of a
disclosure statement that appropriately discloses the existence of the
valuation dispute. If the distributions to unsecured creditors are made other
than pursuant to a Plan of Reorganization, then, absent an agreement of the
Borrowers or any Chapter 7 Trustee and the Required Lenders as to the value of
the non-cash consideration, the Bankruptcy Court shall determine the value of
any non-cash consideration. In the event a Final Order resolving the dispute
over value is not entered by the time non-cash consideration is to be
distributed to creditors (whether pursuant to a Plan of Reorganization or
otherwise), the full amount of non-cash consideration asserted by the
Administrative Agent (on behalf of the Lenders) to be payable shall be reserved
and segregated at that time and held for the benefit of the Lenders. The
Administrative Agent will notify the Borrower and the Committee whether the
Required Lenders will contest the value of any non-cash consideration within 5
business days after receiving written notice of the value placed thereon by the
Borrower. The terms of this Section 7.3 shall survive any payment of this
Loan, including any prepayment. Except as provided in Section 7.4, the
Commitment Fee is payable regardless of any prepayment or payment in full of
the Loans.


     Section 7.4 Other Termination. In the event the Term Loan Draw Conditions
have not been met or otherwise waived with respect to any Interim Loans on or
before February 25, 2003 and with respect to any other Loans on or before March
7, 2003, either the Lenders or the Borrower may, by written notice to each
other and the Committee, terminate this Agreement. Upon such termination,
neither the Lenders nor any Credit Party shall have any


29






 




 further obligation hereunder, or under any other Loan Document; provided
that, notwithstanding anything else to the contrary in this Agreement, if the
Agreement is terminated as a result of the failure to satisfy the Term Loan
Draw Conditions set forth in Section 3.2, the Borrower shall be obligated to
pay all outstanding Obligations plus a Commitment Fee of $125,000 in cash which
shall be paid to the Administrative Agent from the Wind-Down Funds within one
Business Day of termination.


ARTICLE VIII


GUARANTY


     Section 8.1 The Guaranty. In order to induce the Lenders to enter into
this Agreement and to extend credit hereunder and in recognition of the direct
benefits to be received by each Guarantor from the proceeds of the Loans, each
Guarantor hereby agrees with the Lenders that such Guarantor hereby
unconditionally and irrevocably, jointly and severally, guarantees as primary
obligor and not merely as surety the full and prompt payment and performance by
the Borrower when due, whether upon maturity, by acceleration or otherwise, of
any and all of the Obligations of the Borrower to the Lenders. If any or all of
the Obligations of the Borrower to the Lenders become due and payable
hereunder, each Guarantor, jointly and severally, unconditionally promises to
pay such Obligations to the Lenders, or order, on demand, together with any and
all reasonable expenses which may be incurred by the Lenders in collecting any
of the Obligations.


     Section 8.2 Nature of Liability. The liability of each Guarantor
hereunder is exclusive and independent of any security for or other guaranty of
the Obligations of the Borrower whether executed by such Guarantor, any other
Guarantor, any other guarantor or by any other party, and the liability of each
Guarantor hereunder shall not be affected or impaired by (a) any direction as
to application of payment by the Borrower or by any other party, or (b) any
other continuing or other guaranty, undertaking or maximum liability of a
guarantor or of any other party as to the Obligations of the Borrower, or (c)
any payment on or in reduction of any such other guaranty or undertaking, or
(d) any dissolution, termination or increase, decrease or change in personnel
by the Borrower, or (e) any payment made to the Lenders in respect of the
Obligations which the Lenders are required to repay to the Borrower pursuant to
court order in any bankruptcy, reorganization, arrangement, moratorium or other
debtor relief proceeding, and each Guarantor waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.


     Section 8.3 Independent Obligation. The obligations of each Guarantor
hereunder are independent of the obligations of any other Guarantor, any other,
guarantor or the Borrower, and a separate action or actions may be brought and
prosecuted against each Guarantor whether or not action is brought against any
other Guarantor, any other guarantor or the Borrower and whether or not any
other Guarantor, any other guarantor or the Borrower be joined in any such
action or actions. Each Guarantor waives, to the fullest extent permitted by
law, the benefit of any statute of limitations affecting its liability
hereunder or the enforcement thereof. Any payment by the Borrower or other
circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to the Guarantor.


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     Section 8.4 Authorization. Each Guarantor authorizes the Lenders without
notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from
time to time to:


     (a)  change the manner or place of payment of, and/or change or extend the
time of payment of, renew, accelerate or alter, any of the Obligations, any
security therefor, or any liability incurred directly or indirectly in respect
thereof, and the Guaranty herein made shall apply to the Obligations as so
changed, extended, renewed or altered;


     (b)  take and hold security for the payment of the Obligations and sell,
exchange, release, surrender, realize upon or otherwise deal with in any manner
and in any order any property by whomsoever at any time pledged or mortgaged to
secure, or howsoever securing, the Obligations or any liabilities (including
any of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset there against;


     (c)  exercise or refrain from exercising any rights against the Borrower or
others or otherwise act or refrain from acting;


     (d)  release or substitute any one or more endorsers, guarantors, the
Borrower or other obligors;


     (e)  settle or compromise any of the Obligations, any security therefor or
any liability (including any of those hereunder) incurred directly or
indirectly in respect thereof or hereof, or subordinate the payment of all or
any part thereof to the payment of any liability (whether due or not) of the
Borrower to its creditors;


     (f)  apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Lenders regardless of what
liability or liabilities of such Guarantor or the Borrower remain unpaid;
and/or


     (g)  consent to or waive any breach of, or any act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise amend, modify or supplement this Agreement or any of such
other instruments or agreements.


     Section 8.5 Reliance. It is not necessary for the Lenders to inquire into
the capacity or powers of the Borrower or its Subsidiaries or the officers,
directors, partners or agents acting or purporting to act on its behalf; and
any Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.


     Section 8.6 Subordination. Any of the Indebtedness of the Borrower now or
hereafter owing to any Guarantor is hereby subordinated to the Obligations of
the Borrower; provided, however, that payment may be made by the Borrower on
any such Indebtedness owing to such Guarantor so long as the same is not
prohibited by this Agreement; and provided further, that if the Lenders so
request at a time when an Event of Default exists, all such Indebtedness of the
Borrower to such Guarantor shall be collected, enforced and received by such
Guarantor as trustee for the Lenders and be paid over to the Lenders on account
of the Obligations of the Borrower to the Lenders, but without affecting or
impairing in any manner the liability of such Guarantor under the other
provisions of this Guaranty. Prior to the transfer by any Guarantor of


31






 




 any note or negotiable instrument evidencing any of the Indebtedness of
the Borrower to such Guarantor, such Guarantor shall mark such note or
negotiable instrument with a legend that the same is subject to this
subordination.


     Section 8.7 Waiver. Subject to Section 9.9, the expiration of the
applicable Standstill Period and the giving of notice as required by the
Interim Financing Order or the Final Financing Order:


     (a)  Each Guarantor waives any right (except as shall be required by
applicable statute and cannot be waived) to require the Lenders to (i) proceed
against the Borrower, any other Guarantor, any other guarantor or any other
party, (ii) proceed against or exhaust any security granted by the Borrower,
any other Guarantor, any other guarantor or any other party or (iii) pursue any
other remedy in the Lenders’ power whatsoever. Each Guarantor waives (except as
shall be required by applicable statute and cannot be waived) any defense based
on or arising out of any defense of the Borrower, any other Guarantor, any
other guarantor or any other party other than payment in full of the
Obligations, including, without limitation, any defense based on or arising out
of the disability of the Borrower, any other Guarantor, any other guarantor or
any other party, or the unenforceability of the Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Obligations. The Lenders may, at
their election, foreclose on any security held by the Lenders by one or more
judicial or nonjudicial sales (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Lenders may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to the
extent the Obligations have been paid. Each Guarantor waives any defense
arising out of any such election by the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of such Guarantor against the Borrower or any other party
or any security.


     (b)  Each Guarantor waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guaranty, and notices of the existence, creation or incurring of new or
additional Obligations. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower’s financial condition and assets, and
of all other circumstances bearing upon the risk of nonpayment of the
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Lenders shall have no duty to
advise such Guarantor of information known to it regarding such circumstances
or risks.


ARTICLE IX


SECURITY


     Section 9.1 Security.


     (a)  To induce the Lenders to make the Loans, each Grantor hereby grants to
the Administrative Agent, for the ratable benefit of the Lenders, as security
for the full and prompt payment when due (whether at stated maturity, by
acceleration or otherwise) of the


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 Obligations, a continuing first (or junior, as the case may be) priority
Lien and security interest (subject only to the Permitted Liens) in accordance
with sections 364(c)(2) and (3) of the Bankruptcy Code in and to all Collateral
of such Grantor. For purposes of this Agreement, all of the following property
now owned or at any time hereafter acquired by a Grantor or in which a Grantor
now has or at any time in the future may acquire any right, title or interests
is collectively referred to as the “Collateral”:



		
	 	     (i) All cash and cash equivalents;
	 
	 	     (ii) all Accounts;
	 
	 	     (iii) all Accounts Receivable and Accounts Receivable Records;
	 
	 	     (iv) all books and Records pertaining to the property described in
this Section 9.1;
	 
	 	     (v) all Chattel Paper;
	 
	 	     (vi) all Documents;
	 
	 	     (vii) all Equipment;
	 
	 	     (viii) all General Intangibles, including all Intellectual Property
and that portion of the Pledged Collateral constituting General
Intangibles (provided, however, that notwithstanding any other provision
in this Agreement or any other Loan Document, the Collateral shall not
include any FCC Licenses now owned or at any time hereafter acquired by
any Grantor);
	 
	 	     (ix) all Instruments;
	 
	 	     (x) all Insurance;
	 
	 	     (xi) all Inventory;
	 
	 	     (xii) all Investment Property and that portion of the Pledged
Collateral constituting Investment Property;
	 
	 	     (xiii) all other Goods and personal property of such Grantor,
whether tangible or intangible, wherever located;
	 
	 	     (xiv) all Payment Intangibles;
	 
	 	     (xv) all property of any Grantor held by the Lenders, including all
property of every description, in the possession or custody of or in
transit to the Lenders for any purpose, including safekeeping, collection
or pledge, for the account of such Grantor, or as to which such Grantor
may have any right or power;
	 
	 	     (xvi) all Real Property;



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	 	     (xvii) to the extent not otherwise included, all monies and other
property of any kind which is, after the Closing Date, received by such
Grantor in connection with refunds with respect to taxes, assessments and
governmental charges imposed on such Grantor or any of its property or
income;
	 
	 	     (xviii) all causes of action expressly excluding the Avoidance
Actions and all monies and other property of any kind received therefrom,
and all monies and other property of any kind recovered by any Grantor;
	 
	 	     (xix) to the extent not otherwise included, all Pledged Collateral;
	 
	 	     (xx) to the extent not otherwise included, all Collateral Support
and Supporting Obligations; and
	 
	 	     (xxi) to the extent not otherwise included, all Proceeds of each of
the foregoing and the sale of the FCC Licenses and all accessions to,
substitutions and replacements for, and rents, profits and products of,
each of the foregoing, any and all proceeds of insurance, indemnity,
warranty or guaranty payable to any Grantor from time to time with
respect to any of the foregoing.



     (b)  The Lenders agree that upon entry of a Final Financing Order and
satisfaction of the conditions set forth in Section 3.2, the super-priority
administrative claims provided to the Lenders herein shall be subordinated to
the Wind-Down Costs, and the security interests and Liens provided to the
Lenders herein shall not be enforceable against the Wind-Down Funds, but such
subordination and unenforceability shall be limited to Wind-Down Costs and
Wind-Down Funds within and as limited by the Subordination Cap (as the same may
be reduced from time to time in accordance with the terms of this Agreement).
The Lenders further agree that the Lenders’ super-priority administrative
claims provided herein shall not be paid from the Avoidance Actions.


     Section 9.2 Perfection of Security Interests. The Liens and security
interests granted herein shall be deemed valid, enforceable and perfected by
entry of the Interim Financing Order and the Final Financing Order. No
financing statement, notice of lien, mortgage, deed of trust or similar
instrument in any jurisdiction or filing office need be filed or any other
action taken in order to validate, perfect, maintain, protect or enforce the
Liens and security interests granted by or pursuant to this Agreement and the
Financing Order.


     Section 9.3 Rights of Lenders: Limitations on Lenders’ Obligations.
Subject to Section 9.9, the expiration of the applicable Standstill Period and
the giving of notice as required by the Interim Financing Order or the Final
Financing Order and in any event not inconsistent with the Applicable Budget:


     (a)  Subject to each Grantor’s rights and duties under the Bankruptcy Code
(including section 365 of the Bankruptcy Code), it is expressly agreed by each
Grantor that, anything herein to the contrary notwithstanding, such Grantor
shall remain liable under its Contracts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder. The
Administrative Agent and the Lenders shall not have any


34






 




 obligation or liability under any Contract by reason of or arising out of
this Agreement, the Loan Documents, or the granting to the Administrative Agent
(for the ratable benefit of the Lenders) of a security interest therein or the
receipt by the Administrative Agent or the Lenders of any payment relating to
any Contract pursuant hereto, nor shall the Administrative Agent or the Lenders
be required or obligated in any manner to perform or fulfill any of the
obligations of any Grantor under or pursuant to any Contract, or to make any
payment, or to make any inquiry as to the nature or the sufficiency of any
payment received by it or the sufficiency of any performance by any party under
any Contract, or to present or file any claim, or to take any action to collect
or enforce any performance or the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.


     (b)  Subject to Section 9.5, the Administrative Agent authorizes each
Grantor to collect its Accounts, provided that such collection is performed in
accordance with such Grantor’s customary procedures, and the Administrative
Agent may, upon the occurrence and during the continuation of any Event of
Default and without notice limit or terminate said authority at any time.


     (c)  The Administrative Agent may at any time, upon the occurrence and
during the continuation of any Event of Default, after first notifying the
Borrower of its intention to do so, notify Account Debtors, notify the other
parties to the Contracts of the Borrower or any other Grantor, notify obligors
of Instruments and Investment Property of the Borrower or any other Grantor and
notify obligors in respect of Chattel Paper of the Borrower or any other
Grantor that the right, title and interest of the Borrower or such Grantor in
and under such Accounts, such Contracts, such Instruments, such Investment
Property and such Chattel Paper have been assigned to the Administrative Agent
and that payments shall be made directly to the Administrative Agent. Upon the
request of the Administrative Agent, the Borrower or such other Grantor will so
notify such Account Debtors, such parties to Contracts, obligors of such
Instruments and Investment Property and obligors in respect of such Chattel
Paper. Upon the occurrence and during the continuation of an Event of Default,
the Administrative Agent may in its own name, or in the name of others,
communicate with such parties to such Accounts, Contracts, Instruments,
Investment Property and Chattel Paper to verify with such Persons to the
Administrative Agent’s reasonable satisfaction the existence, amount and terms
of any such Accounts, Contracts, Instruments, Investment Property or Chattel
Paper.


     Section 9.4 Covenants of the Grantors with Respect to Collateral. Subject
to Section 9.9, the expiration of the applicable Standstill Period and the
giving of notice as required by the Interim Financing Order and the Final
Financing Order and in any event not inconsistent with the Applicable Budget,
each Grantor hereby covenants and agrees with the Administrative Agent that
from and after the date of this Agreement and until the Obligations are fully
satisfied:


     (a)  Limitations on Modifications of Accounts. Such Grantor will not,
without the Administrative Agent’s prior written consent, grant any extension
of the time of payment of any of the Accounts, Chattel Paper or Instruments,
compromise, compound or settle the same for less than the full amount thereof,
release, wholly or partly, any Person liable for the payment thereof, or allow
any credit or discount whatsoever thereon other than any of the foregoing which
are done in the ordinary course of business, consistent with past practices and
trade discounts granted in the ordinary course of business of such Grantor.


35






 


     (b)  Notices. Such Grantor will advise the Administrative Agent promptly,
in reasonable detail, (i) of any Lien asserted against any of the Collateral
other than Permitted Liens, and (ii) of the occurrence of any other event which
would result in a material adverse change with respect to the aggregate value
of the Collateral or on the security interests created hereunder.


     (c)  Pledged Collateral.



		
	 	     (i) Upon request of the Administrative Agent, such Grantor will
deliver to the Administrative Agent, all certificates representing or
evidencing any Pledged Collateral, whether now arising or hereafter
acquired, in suitable form for transfer by delivery or, as applicable,
accompanied by such Grantor’s endorsement, where necessary, or duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Administrative Agent. Upon the occurrence
and during the continuation of an Event of Default, the Administrative
Agent shall have the right, at any time in its discretion and without
notice to the Grantor, to transfer to or to register in its name or in
the name of its nominees any or all of the Pledged Collateral. The
Administrative Agent shall have the right at any time to exchange
certificates or instruments representing or evidencing any of the Pledged
Collateral for certificates or instruments of smaller or larger
denominations.
	 
	 	     (ii) Except as provided in Section 9.7, such Grantor shall be
entitled to receive all cash dividends paid in respect of the Pledged
Collateral (other than liquidating or distributing dividends) with
respect to the Pledged Collateral. Any sums paid upon or in respect of
any of the Pledged Collateral upon the liquidation or dissolution of any
issuer of any of the Pledged Collateral, any distribution of capital made
on or in respect of any of the Pledged Collateral or any property
distributed upon or with respect to any of the Pledged Collateral
pursuant to the recapitalization or reclassification of the capital of
any issuer of Pledged Collateral or pursuant to the reorganization
thereof shall, unless otherwise subject to a perfected security interest
in favor of the Administrative Agent, be delivered to the Administrative
Agent to be held by it hereunder as additional collateral security for
the Obligations. If any sums of money or property so paid or distributed
in respect of any of the Pledged Collateral shall be received by such
Grantor, such Grantor shall, until such money or property is paid or
delivered to the Administrative Agent, hold such money or property in
trust for the Administrative Agent, segregated from other funds of such
Grantor, as additional security for the Obligations.
	 
	 	     (iii) Except as provided in Section 9.7, such Grantor will be
entitled to exercise all voting, consent and corporate rights with
respect to the Pledged Collateral; provided that no vote shall be cast,
consent given or right exercised or other action taken by such Grantor
which would impair the Collateral or which would be inconsistent with or
result in any violation of any provision of this Agreement or any other
Loan Document or, without prior notice to the Administrative Agent, to
enable or take any other action to permit any issuer of Pledged
Collateral to issue any stock or other equity securities of any nature or
to issue any other securities convertible into or granting the right to
purchase or



36






 





		
	 	exchange for any stock or other equity securities of any nature of
any issuer of Pledged Collateral.
	 
	 	     (iv) In the case of each Grantor which is an issuer of Pledged
Collateral, such Grantor, agrees to be bound by the terms of this
Agreement relating to the Pledged Collateral issued by it and will comply
with such terms insofar as such terms are applicable to it. In the case
of each Grantor which is a partner in a Partnership, such Grantor hereby
consents to the extent required by the applicable Partnership agreement
to the pledge by each other Grantor, pursuant to the terms hereof, of the
Pledged Partnership Interests in such Partnership pursuant to the terms
hereof and to the transfer of such Pledged Partnership Interests to the
Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as a substituted partner in such
Partnership, subject to the terms hereof, with all the rights, powers and
duties of a general partner or a limited partner, as the case may be. In
the case of each Grantor which is a member of a limited liability
company, such Grantor hereby consents to the extent required by the
applicable limited liability company agreement to the pledge by each
other Grantor, pursuant to the terms hereof, of the Pledged LLC Interests
in such limited liability company and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the
substitution of the Administrative Agent or its nominee as a substituted
member of the limited liability company pursuant to the terms hereof with
all the rights, powers and duties of a member of the limited liability
company in question.
	 
	 	     (v) Such Grantor will not agree to any amendment of a constituent
document that in any way adversely affects the perfection of the security
interest of the Administrative Agent in the Pledged Partnership Interests
or Pledged LLC Interests pledged by such Grantor hereunder, including
electing to treat the membership interest or partnership interest of such
Grantor as a security under section 8-103 of the UCC.



     (d)  Intellectual Property.



		
	 	     (i) Such Grantor will (i) continue to use each Trademark that is
material Intellectual Property in order to maintain such Trademark in
full force and effect with respect to each class of goods for which such
Trademark is currently used in the ordinary course of business, free from
any claim of abandonment for non-use, (ii) maintain as in the past the
quality of products and services offered under such Trademark in the
ordinary course of business, (iii) use such Trademark in the ordinary
course of business with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law,
(iv) not adopt or use any mark in the ordinary course of business which
is confusingly similar or a colorable imitation of such Trademark unless
the Administrative Agent shall obtain a perfected security interest in
such mark pursuant to this Agreement and (v) not do any act or knowingly
omit to do any act whereby such Trademark may become invalidated or
impaired in any way in the ordinary course of business.
	 
	 	     (ii) Such Grantor will not do any act, or omit to do any act,
whereby any Patent which is material Intellectual Property may become
forfeited,



37






 





		
	 	abandoned or dedicated to the public unless such act or omission
would not reasonably be expected to have a Material Adverse Effect.
	 
	 	     (iii) Such Grantor (i) will not (and will not permit any licensee or
sublicensee thereof to) do any act or omit to do any act whereby any
portion of the Copyrights which is material Intellectual Property may
become invalidated or otherwise impaired and (ii) will not (either itself
or through licensees) do any act whereby any portion of the Copyrights
which is material Intellectual Property may fall into the public domain
unless such act or omission would not reasonably be expected to have a
Material Adverse Effect.
	 
	 	     (iv) Such Grantor will not do any act, or omit to do any act,
whereby any trade secret which is material Intellectual Property may
become publicly available or otherwise unprotectable unless such act or
omission would not reasonably be expected to have a Material Adverse
Effect.
	 
	 	     (v) Such Grantor will not do any act that knowingly uses any
material Intellectual Property to infringe the intellectual property
rights of any other Person unless such act or omission would not
reasonably be expected to have a Material Adverse Effect.
	 
	 	     (vi) Such Grantor will notify the Administrative Agent immediately
if it knows, or has reason to know, that any application or registration
relating to any material Intellectual Property may become forfeited,
abandoned or dedicated to the public, or of any adverse determination or
development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor’s ownership of; right to use,
interest in, or the validity of; any material Intellectual Property or
such Grantor’s right to register the same or to own and maintain the
same, unless such event would not reasonably be expected to have a
Material Adverse Effect.
	 
	 	     (vii) Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of
any material Intellectual Property with the United States Patent and
Trademark Office, the United States Copyright Office or any similar
office or agency within or outside the United States, such Grantor shall
report such filing to the Administrative Agent within five Business Days
after the last day of the fiscal quarter in which such filing occurs.
	 
	 	     (viii) Such Grantor will take all reasonable actions necessary or
requested by the Administrative Agent, including in any proceeding before
the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency, to maintain and pursue
each application (and to obtain the relevant registration) and to
maintain each registration of any Copyright, Trademark or Patent that is
material Intellectual Property, including filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition
and interference and cancellation proceedings.



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	 	     (ix) In the event that any material Intellectual Property is
infringed upon or misappropriated or diluted by a third party and such
event would be reasonably likely to result in a Material Adverse Effect,
such Grantor shall notify the Administrative Agent promptly after such
Grantor learns thereof. Such Grantor shall take appropriate action in
response to such infringement, misappropriation or dilution, including
promptly bringing suit for infringement, misappropriation or dilution and
to recover any and all damages for such infringement, misappropriation or
dilution, and shall take such other actions may be appropriate in its
reasonable judgment under the circumstances to protect such material
Intellectual Property.



     Section 9.5 Performance by Administrative Agent of the Grantors’
Obligations. Subject to Section 9.9, the expiration of the applicable
Standstill Period and the giving of notice as required by the Financing Order,
if any Grantor fails to perform or comply with any of its agreements contained
herein and the Administrative Agent, as provided for by the terms of this
Agreement, shall itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses of the Administrative Agent
incurred in connection with such performance or compliance, together with
interest thereon at the rate then in effect in respect of the Loan, shall be
payable by such Grantor to the Administrative Agent on demand and shall
constitute Obligations secured by the Collateral. Performance of such Grantor’s
obligations as permitted under this Section 9.5 shall in no way constitute a
violation of the automatic stay provided by section 362 of the Bankruptcy Code
and each Grantor hereby waives applicability thereof.


     Section 9.6 Limitation on Administrative Agent’s Duty in Respect of
Collateral. The Administrative Agent shall not have any duty as to any
Collateral in its possession or control or in the possession or control of any
agent or nominee of it or any income thereon or as to the preservation of
rights against prior parties or any other rights pertaining thereto, except
that the Administrative Agent shall, with respect to the Collateral in its
possession or under its control, deal with such Collateral in the same manner
as the Administrative Agent deals with similar property for its own account.
Upon request of the Borrower, the Administrative Agent shall account for any
moneys received by it in respect of any foreclosure on or disposition of the
Collateral of any Grantor.


     Section 9.7 Remedies, Rights Upon Event of Default. Subject to Section
9.9, the expiration of the applicable Standstill Period and the giving of
notice as required by the Interim Financing Order or the Final Financing Order:


     (a)  If any Event of Default shall occur and be continuing, the
Administrative Agent may exercise in addition to all other rights and remedies
granted to it in this Agreement and in any other Loan Document, all rights and
remedies of a secured party under the UCC. Without limiting the generality of
the foregoing, each Grantor expressly agrees that in any such event the
Administrative Agent, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of time
and place of public or private sale) to or upon such Grantor or any other
Person (all and each of which demands, advertisements and/or notices are hereby
expressly waived to the maximum extent permitted by the UCC and other
applicable law), may forthwith collect, receive, appropriate and realize upon
the Collateral, or any part thereof, and/or may forthwith sell, lease, assign,
give an option or


39






 




 options to purchase, or sell or otherwise dispose of and deliver said
Collateral (or contract to do so), or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange or broker’s board or at any
of the Administrative Agent’s offices or elsewhere at such prices at it may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Administrative Agent shall have the right upon any such
public sale or sales to purchase the whole or any part of said Collateral so
sold, free of any right or equity of redemption, which equity of redemption
each Grantor hereby releases to the extent permitted by applicable law. Each
Grantor further agrees, at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Administrative Agent shall apply the proceeds of any
such collection, recovery, receipt, appropriation, realization or sale (net of
all expenses incurred by the Administrative Agent in connection therewith,
including, without limitation, attorney’s fees and expenses), to the
Obligations in any order deemed appropriate by the Administrative Agent, such
Grantor remaining liable for any deficiency remaining unpaid after such
application, and only after so paying over such net proceeds and after the
payment by the Administrative Agent of any other amount required by any
provision of law, including, without limitation, the UCC, need the
Administrative Agent account for the surplus, if any, to such Grantor. To the
maximum extent permitted by applicable law, each Grantor waives all claims,
damages, and demands against the Administrative Agent arising out of the
repossession, retention or sale of the Collateral except such as arise out of
the gross negligence or willful misconduct of the Administrative Agent. Each
Grantor agrees that the Administrative Agent need not give more than ten (10)
days’ notice to the Borrower (which notification shall be deemed given when
mailed or delivered on an overnight basis, postage prepaid, addressed to the
Borrower at its address set forth in Section 10.2) of the time and place of any
public sale of Collateral or of the time after which a private sale may take
place and that such notice is reasonable notification of such matters. The
Administrative Agent and its agents shall have the right to enter upon any real
property owned or leased by any Grantor to exercise any of its rights or
remedies under this Agreement. The Administrative Agent shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Administrative Agent may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and any such sale
may, without further notice, be made at the time and place to which it was
adjourned. Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or disposition of the Collateral are insufficient to pay its
Obligations and all other amounts to which the Administrative Agent is
entitled, the Grantors also being liable for the fees and expenses of any
attorneys employed by the Administrative Agent to collect such deficiency.


     (b)  Each Grantor hereby waives presentment, demand, protest or any notice
(to the maximum extent permitted by applicable law) of any kind in connection
with this Agreement or any Collateral.


     (c)  Pledged Collateral.



		
	 	     (i) During the continuance of an Event of Default, if the
Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the Administrative Agent
shall have the right to receive any and all cash dividends, payments or
other Proceeds paid in respect of the Pledged Collateral



40






 





		
	 	and make application thereof to the Obligations in the order set
forth herein, and (ii) the Administrative Agent or their nominee may
exercise (A) all voting, consent, corporate and other rights pertaining
to the Pledged Collateral at any meeting of shareholders, partners or
members, as the case may be, of the relevant issuer or issuers of Pledged
Collateral or otherwise and (B) any and all rights of conversion,
exchange and subscription and any other rights, privileges or options
pertaining to the Pledged Collateral as if it were the absolute owner
thereof (including the right to exchange at its discretion any and all of
the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure
of any issuer of Pledged Collateral, the right to deposit and deliver any
and all of the Pledged Collateral with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without
liability except to account for property actually received by it, but the
Administrative Agent shall have no duty to any Grantor to exercise any
such right, privilege or option and shall not be responsible for any
failure to do so or delay in so doing.
	 
	 	     (ii) In order to permit the Administrative Agent to exercise the
voting and other consensual rights which they may be entitled to exercise
pursuant hereto and to receive all dividends and other distributions
which it may be entitled to receive hereunder, (i) each Grantor shall
promptly execute and deliver (or cause to be executed and delivered) to
the Administrative Agent all such proxies, dividend payment orders and
other instruments as the Administrative Agent may from time to time
reasonably request and (ii) without limiting the effect of clause (i)
above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and
to exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Collateral would be entitled (including giving or
withholding written consents of shareholders, partners or members, as the
case may be, calling special meetings of shareholders, partners or
members, as the case may be, and voting at such meetings), which proxy
shall be effective, automatically and without the necessity of any action
(including any transfer of any Pledged Collateral on the record books of
the issuer thereof) by any other person (including the issuer of such
Pledged Collateral or any officer or agent thereof) during the
continuance of an Event of Default and which proxy shall only terminate
upon the payment in full of the Obligations.
	 
	 	     (iii) Each Grantor hereby expressly authorizes and instructs each
issuer of any Pledged Collateral pledged hereunder by such Grantor to (i)
comply with any instruction received by it from the Administrative Agent
in writing that (A) states that an Event of Default has occurred and is
continuing and (B) is otherwise in accordance with the terms of this
Agreement, without any other or further instructions from such Grantor,
and each Grantor agrees that such issuer shall be fully protected in so
complying and (ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged Collateral
directly to the Administrative Agent.




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     Section 9.8 The Appointment of Administrative Agent as Attorney-in-Fact.
Subject to Section 9.9, the expiration of the applicable Standstill Period and
the giving of notice as required by the Financing Order:


     (a)  Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its and its Subsidiaries true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of such Grantor and
in the name of such Grantor, or in its own name, from time to time in the
Administrative Agent’s discretion, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute and
deliver any and all documents and instruments which may be necessary and
desirable to accomplish the purposes of this Agreement and the transactions
contemplated hereby, and, without limiting the generality of the foregoing,
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor to do the following:



		
	 	     (i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any
Collateral and, in the name of such Grantor, its own name or otherwise,
to take possession of and endorse and collect any checks, drafts, notes,
acceptances or other Instruments for the payment of moneys due under any
Collateral and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate
by the Administrative Agent for the purpose of collecting any and all
such moneys due under any Collateral whenever payable and to file any
claim or to take any other action or proceeding in any court of law or
equity or otherwise deemed appropriate by the Administrative Agent for
the purpose of collecting any and all such moneys due under any
Collateral whenever payable;
	 
	 	     (ii) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this
Agreement and to pay all or any part of the premiums therefor and the
costs thereof; and
	 
	 	     (iii) (A) to direct any party liable for any payment under any of
the Collateral to make payment of any and all moneys due and to become
due thereunder, directly to the Administrative Agent or as the
Administrative Agent shall direct; (B) to receive payment of and receipt
for any and all moneys, claims and other amounts due, and to become due
at any time, in respect of or arising out of any Collateral; (C) to sign
and indorse any invoices, freight or express bills, bills of lading,
storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other documents
constituting or relating to the Collateral; (D) to commence and prosecute
any suits, actions or proceedings at law or equity in any court of
competent jurisdiction to collect the Collateral or any part thereof and
to enforce any other right in respect of any Collateral; (E) to defend
any suit, action or proceeding brought against any Grantor with respect
to any Collateral of such Grantor; (F) to settle, compromise or adjust
any suit, action or proceeding described above and, in connection
therewith, to give such discharges or releases as the Administrative
Agent may deem appropriate; (G) to license or, to the extent permitted by
an applicable license, sublicense, whether general, special



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	 	or otherwise, and whether on an exclusive or non-exclusive basis,
any trademarks, throughout the world for such term or terms, on such
conditions, and in such manner, as the Administrative Agent shall in its
sole discretion determine; and (H) generally to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though the Administrative Agent was
the absolute owner thereof for all purposes, and to do, at the
Administrative Agent’s option and such Grantor’s expense, at any time, or
from time to time, all acts and things which the Administrative Agent
reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s Lien therein, in order to
effect the intent of this Agreement, all as fully and effectively as such
Grantor might do.



     (b)  The Administrative Agent agrees that it will forbear from exercising
the power of attorney or any rights granted to the Administrative Agent
pursuant to this Section 9.8, except upon the occurrence or during the
continuation of an Event of Default. The Grantors hereby ratify, to the extent
permitted by law, all that said attorneys shall lawfully do or cause to be done
by virtue hereof, The power of attorney granted pursuant to this Section 9.8 is
a power coupled with an interest and shall be irrevocable until the Obligations
are indefeasibly paid in full.


     (c)  The powers conferred on the Administrative Agent hereunder are solely
to protect the Administrative Agent’s interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Administrative Agent
shall be accountable only for amounts that it actually receives as a result of
the exercise of such powers and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act, except for its own gross negligence or willful misconduct.


     (d)  Each Grantor also authorizes the Administrative Agent, at any time and
from time to time upon the occurrence and during the continuation of any Event
of Default or as otherwise expressly permitted by this Agreement, (i) to
communicate in its own name or the name of its Subsidiaries with any party to
any Contract with regard to the assignment of the right, title and interest of
such Grantor in and under the Contracts hereunder and other matters relating
thereto and (ii) to execute any endorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral.


     Section 9.9 FCC-Related Requirements of Law. The Administrative Agent and
the Lenders acknowledge that the effectiveness of certain provisions set forth
in this Agreement or in any other Loan Document (including the provisions
relating to the exercise of the Administrative Agent’s rights with respect to
Pledged Collateral and effectiveness or the exercise of the power of attorney
conferred on the Administrative Agent) may be subject to prior FCC approval
and, to the extent such FCC approval is required, notwithstanding any other
provision in this Agreement or any other Loan Document to the contrary, such
provisions shall not be effective until such FCC approval is obtained. The
Administrative Agent and the Lenders agree to not exercise any of its rights or
powers hereunder or under any other Loan Document unless and until such FCC
approval, if required, is obtained.


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ARTICLE X


MISCELLANEOUS


     Section 10.1 Amendments, Etc. No amendment or waiver of any provision of
this Agreement nor consent to any departure by the Borrower or any Guarantor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Required Lenders, and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.


     Section 10.2 Notices, Etc. Any notice or other communication permitted or
required to be given hereunder will be in writing, and sent by reputable
courier service (with proof of delivery), by hand delivery or by facsimile
(followed by delivery by courier service (with proof of delivery) or by hand
delivery), addressed as follows:



	 	 	If to the Lenders:

Blue River Capital, LLC, as

Administrative Agent

C/O Van D. Greenfield

360 East 88th Street, Suite 2D

New York , NY 10128

Fax: (212) 426-5677

	 
	 	 	With copies to:
	 
	 	 	Katten Muchin Zavis Rosenman

575 Madison Avenue

New York, New York 10022-2585

Attention: Jeff J. Friedman, Esq.

Fax: (212) 940-8776
	 
	 	 	If to the Borrower or any Guarantor:
	 
	 	 	Globalstar, L.P.

3200 Zanker Road

San Jose, California 95134

Attention: William Adler, Esq.

Fax: (408) 933-4950
	 
	 	 	With copies to:
	 
	 	 	Jones Day

222 East 41st Street

New York, New York 10017

Attention: Paul D. Leake, Esq.

Telecopy number: (212) 755-7306
	 
	 	 	and



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	 	 	The Committee

c/o Akin Gump

590 Madison Avenue

New York, New York 10022

Attention: Stephen B. Kuhn, Esq. and Daniel H. Golden, Esq.

Telecopy number: (212) 872-1002



     All such notices and communications shall, when mailed, telecopied, or
delivered, be effective when deposited in the mails, or delivered by hand to
the addressee or its agent, respectively, except that notices and
communications to the Lenders pursuant to Article II or VIII shall not be
effective until received by the Lenders.


     Section 10.3 No Waiver: Remedies. No failure on the part of the Lenders
to exercise, and no delay in exercising, any right hereunder or under any Note
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.


     Section 10.4 Costs: Expenses: Indemnities. (a) Subject to Section 7.3 in
respect of the Documentation Fee and Section 12.3, the Borrower shall pay upon
demand all reasonable, documented out-of-pocket expenses of the Lenders (but
the Borrower shall not be required to pay the fees and disbursements of
Lenders’ counsel other than lead and local counsel, Katten Muchin Zavis
Rosenman and Connolly Bove Lodge & Hutz LLP, respectively) in connection with
the preparation and administration of this Agreement and the documents related
thereto or amendment thereof, including enforcement of the Lenders’ rights and
remedies under this Agreement. Upon the Effective Date of a Plan of
Reorganization or the first date distributions are made to unsecured creditors,
if made other than under Plan of Reorganization, the Borrower shall pay any
such reasonable, documented out-of-pocket expenses not previously paid.


     (b)  The Borrower and each Guarantor agree to jointly and severally
indemnify the Lenders and their directors, officers, agents and employees (each
“Indemnitee”) and hold each Indemnitee harmless from and against any and all
liabilities, losses, damages and expenses of any kind, including the reasonable
fees and disbursements of counsel, which are incurred by such Indemnitee in
connection with any investigative, administrative or judicial proceeding
(whether or not such Indemnitee shall be designated a party thereto) brought or
threatened relating to or arising out of this Agreement or any actual or
proposed use of proceeds of Loans hereunder; provided, however, that nothing in
this Section 10.4(b) shall obligate the Borrower or any Guarantor to indemnify
the Lenders for any liabilities, losses, damages or expenses resulting from the
gross negligence or willful misconduct of the Lenders.


     Section 10.5 Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default and following the expiration of the
applicable Standstill Period and the giving of notice as required by the
Financing Order, the Lenders, after prompt notice thereof to the Borrower, are
hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Lenders to or for the credit or the
account of the Borrower or any Guarantor against any and all of the


45






 




 Obligations now or hereafter existing whether or not the Lenders shall
have made any demand under this Agreement or any Note or other Loan Document
and although such Obligations may be unmatured.


     Section 10.6 Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and each Guarantor and the Lenders
and thereafter shall be binding upon and inure to the benefit of the Borrower
and each Guarantor and the Lenders and their respective successors and assigns,
subject to Section 10.14.


     Section 10.7 Governing Law. This Agreement and the Notes and the rights
and obligations of the parties hereto and thereto shall be governed by, and
construed and interpreted in accordance with, the laws of the State of New York
and, to the extent applicable, the Bankruptcy Code.


     Section 10.8 Section Titles. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.


     Section 10.9 Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Facsimile signatures shall be effective to bind a party to this Agreement and
such facsimile signatures shall have the same force and effect as original
signatures.


     Section 10.10 Entire Agreement. This Agreement, together with all of the
other Loan Documents and all certificates and documents delivered hereunder or
thereunder, embodies the entire agreement of the parties and supersedes all
prior agreements and understandings relating to the subject matter hereof.


     Section 10.11 Confidentiality. Each of the Administrative Agent and the
Lenders agrees to keep information obtained by it pursuant hereto and the other
Loan Documents confidential in accordance with customary practices and agrees
that it will only use such information in connection with the transactions
contemplated by this Agreement and not disclose any of such information other
than (i) to such Person’s employees, representatives and agents who are or are
expected to be involved in the evaluation of such information in connection
with the transactions contemplated by this Agreement and who are advised of the
confidential nature of such information, (ii) to the extent such information
presently is or hereafter becomes available to such Persons on a
nonconfidential basis from a source other than the Borrower, (iii) to the
extent disclosure is required by law, regulation or judicial order or requested
or required by bank regulators or auditors or (iv) to assignees or participants
or potential assignees or participants who agree to be bound by the provisions
of this sentence. Notwithstanding any provision of this Section 10.11 each
Lender that has entered into a Non-Disclosure Agreement on or prior to the date
hereof shall be subject to the terms thereof, it being understood that such
terms shall govern in the event of a conflict between such terms and the
provisions of this Section 10.11. Each of Blue River Capital, LLC, Loeb
Partners Corp. and Columbia Ventures Corp., each in its capacity as a Lender
hereunder, and each of their respective principals,


46






 




 partners, employees, attorneys, advisors or representatives, shall not
provide any information in their possession, or that comes into their
possession during the term of this Agreement, that Borrower has designated as
“confidential” or “proprietary,” either orally or in writing, to any other
Lender without the express written consent of Borrower.


     Section 10.12 Jurisdiction. Any legal action or proceeding with respect
to this Agreement or any other Loan Document may be brought in the Bankruptcy
Court, and, by execution and delivery of this Agreement, the Borrower hereby
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the Bankruptcy Court. The parties hereto
hereby irrevocably waive any objection, including any objection to the laying
of venue or based on the grounds of forum non conveniens, which any of them may
now or hereafter have to the bringing of any such action or proceeding in such
respective jurisdictions.


     Section 10.13 Waiver of Jury Trial. Each of the parties hereto
irrevocably waives trial by jury in any action or proceeding with respect to
this Agreement or any other Loan Document.


     Section 10.14 Non-Assignment. Neither the Borrower nor any Guarantor may
assign this Agreement without the prior written consent of the Lenders. No
Lender may assign its interest in this Agreement to a competitor of Borrower
without the prior written consent of Borrower provided that if an Event of
Default has occurred and the Standstill Period has expired, then any such
Lender shall not be required to obtain Borrower’s consent to any assignment of
this Agreement.


ARTICLE XI


ADMINISTRATIVE AGENT


     Section 11.1 Appointment and Authorization of Administrative Agent. Each
Lender hereby irrevocably appoints, designates and authorizes the
Administrative Agent to take such action on its behalf and in its stead under
the provisions of this Agreement and each other Loan Document and to exercise
such powers and perform such duties as are expressly delegated to it by the
terms of this Agreement or any other Loan Document, together with such powers
as are reasonably incidental thereto. Notwithstanding any provision to the
contrary contained elsewhere herein or in any other Loan Document, the
Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth herein, nor shall the Administrative Agent have or be
deemed to have any fiduciary relationship with any Lender or participant, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term “agent” herein and in
the other Loan Documents with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable law. Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.


47






 


     Section 11.2 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Agreement or any other Loan Document by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects in
the absence of gross negligence or willful misconduct.


     Section 11.3 Liability of Administrative Agent. No Agent-Related Person
shall (i) be liable for any action taken or omitted to be taken by any of them
under or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or
willful misconduct in connection with its duties expressly set forth herein),
or (ii) be responsible in any manner to any Lender or participant for any
recital, statement, representation or warranty made by any Credit Party or any
officer thereof, contained herein or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for
in, or received by the Administrative Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of any Credit Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or
to inspect the properties, books or records of any Credit Party.


     Section 11.4 Reliance by Administrative Agent.


     (a)  The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel. Except as provided in Section 11.5, the
Administrative Agent shall be fully justified in failing or refusing to take
any action under any Loan Document unless it shall first receive such required
consent of the Lenders under the Loan Documents. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any other Loan Document in accordance with an appropriate
request or consent of the Lenders except if it shall fail to exercise rights
demanded after and during the continuation of an Event of Default after receipt
of the demand described in Section 11.5.


     (b)  For purposes of determining compliance with the conditions specified
in Section 3.1(b), each Lender that has signed this Agreement shall be deemed
to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received notice from such Lender prior to the proposed Closing Date
specifying its objection thereto.


48






 


     Section 11.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Event of Default,
except with respect to any Event of Default arising from defaults in the
payment of principal, interest and fees required to be paid to the
Administrative Agent for the account of the Lenders, unless the Administrative
Agent shall have received written notice from a Lender or the Borrower
referring to this Agreement, describing such Event of Default and stating that
such notice is a “Notice of Event of Default.” The Administrative Agent will
notify the Lenders of its receipt of any such notice. If an Event of Default
occurs and is continuing, and if the Required Lenders demand it in writing, the
Administrative Agent shall, subject to the provisions of Sections 7.1 and 7.2,
and as soon as legally permitted, enforce the Lenders’ rights to immediately
collect the Loans and interest and other sums due the Lenders, and enforce all
of their rights against the Collateral, the Guarantors or any other Persons.
Subject to the provisions of Sections 7.1 and 7.2, in the event the
Administrative Agent fails to take such action after such demand, any of the
Lenders may take such action on behalf of the Lenders. The Administrative Agent
or the Lender enforcing such rights shall have all the powers given to such
Lender in the Credit Agreement or provided by law or equity to enforce such
rights.


     Section 11.6 Credit Decision; Disclosure of Information by Administrative
Agent. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Credit Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable regulatory Laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Borrower and the other Credit Parties hereunder. Each Lender
also represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Borrower and the
other Credit Parties. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
herein, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of any of the Credit Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.


     Section 11.7 Administrative Agent in its Individual Capacity. With
respect to its Loans, Blue River Capital LLC shall have the same rights and
powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not the


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 Administrative Agent and the terms “Lender” and “Lenders” include Blue
River Capital LLC in its individual capacity.


     Section 11.8 Administrative Agent May File Proofs of Claim. In case of
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Borrower) shall be
entitled and empowered, by intervention in such proceeding or otherwise:


     (a)  to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, and all other Obligations
that are owing and unpaid and to file such other documents as may be necessary
or advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders and
the Administrative Agent allowed in such judicial proceeding; and


     (b)  to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent.


Nothing contained herein shall be deemed to authorize the Administrative Agent
to authorize or consent to or accept or adopt on behalf of any Lender any plan
of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding.


     Section 11.9 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, upon written approval of the Required
Lenders:


     (a)  to release any Lien on any property granted to or held by the
Administrative Agent under any Loan Document;


     (b)  to subordinate any Lien on any property granted to or held by the
Administrative Agent under any Loan Document;


     (c)  to release any Collateral for value; and


     (d)  to collect, receive, appropriate or realize any Collateral upon an
Event of Default; and


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     (e)  upon request by the Administrative Agent at any time, the Required
Lenders will confirm in writing the Administrative Agent’s authority to release
or subordinate its interest in particular types or items of property, or to
release any Guarantor from its obligations under the Guaranty pursuant to this
Section.


     Section 11.10 Payments to Lenders. Notwithstanding any other provision of
this Agreement, each payment to be made by the Borrower under this Agreement
shall be made to Administrative Agent for the pro rata benefit of the Lenders,
and Administrative Agent shall disburse such payments to the Lenders not more
than 24 hours after its receipt thereof.


     Section 11.11 Notices. Notwithstanding any provision of the Credit
Agreement to the contrary, each Notice required to be given to any Lender shall
be given instead to the Administrative Agent on behalf of each Lender.


     Section 11.12 Sharing of Payments. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Term Loans made by
it, any payment (whether voluntary, involuntary, through the exercise of any
right of set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder) thereof, such Lender shall immediately (a) notify the
Administrative Agent of such fact, and cooperate to make the necessary payments
so that each Lender shall have received its Pro Rata Share of payments on the
Obligation and the Obligation of Borrower to each Lender shall be adjusted as
necessary.


ARTICLE XII


REQUIRED CONSENTS; RIGHTS OF PARTICIPANTS


     Section 12.1 Required Lenders Consents. Notwithstanding any provision of
the Credit Agreement to the contrary, the consent of the Required Lenders shall
be required for:


     (a)  any modifications or amendments of the Approved Budget;


     (b)  any modification or amendment to, or waiver of any provision of, the
Credit Agreement, including, without limitation, any extension of time periods
for performance under any provisions thereof, or any payment schedule thereto;
and


     (c)  the acceleration of any payments due under this Agreement and the
exercise of any and all remedies upon an Event of Default, including
realization of any Collateral.


     Section 12.2 Unanimous Consent of the Lenders. Notwithstanding any
provision of this Agreement to the contrary, the consent of all of the Lenders
shall be required for:


     (a)  any forgiveness, in part or in whole, of any Obligations, including
any interest due thereon; and


     (b)  the termination of any Loan Document.


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     Section 12.3 Right of Lenders to Bring Action for Repayment. Upon the
Maturity Date, if Borrower does not make the repayment as set forth in Section
2.3, the Borrower hereby agrees that each Lender may, in his or its individual
capacity, bring an action against the Borrower to recover his or its Pro Rata
Share of (a) the Aggregate Commitments, including any interest thereon, (b) any
other Obligations due and owing, and (c) the reasonable attorneys fees and
costs relating to seeking such recovery.


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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.



	 	 	 	 	 
	 	 	Borrower:
	 	 	 	 	 
	 	 	GLOBALSTAR, L.P.,
	 	 	a Debtor and Debtor in Possession
	 	 	 	 	 
	 	 	
By:	 	/s/ Olof Lundberg
	 	 	 	 	

	 	 	 	 	Name: Olof Lundberg
	 	 	 	 	Title: Chief Executive Officer
	 	 	 	 	 
	 	 	Guarantors:
	 	 	 	 	 
	 	 	GLOBALSTAR CAPITAL CORPORATION,
	 	 	a Debtor and Debtor in Possession
	 	 	 	 	 
	 	 	
By:	 	/s/ Daniel P. McEntee
	 	 	 	 	

	 	 	 	 	Name: Daniel P. McEntee
	 	 	 	 	Title: Treasurer
	 	 	 	 	 
	 	 	GLOBALSTAR SERVICES COMPANY, INC.,
	 	 	a Debtor and Debtor in Possession
	 	 	 	 	 
	 	 	
By:	 	/s/ Daniel P. McEntee
	 	 	 	 	

	 	 	 	 	Name: Daniel P. McEntee
	 	 	 	 	Title: Treasurer  
	 	 	 	 	 
	 	 	GLOBALSTAR, L.L.C.,
	 	 	a Debtor and Debtor in Possession
	 	 	 	 	 
	 	 	
By:	 	/s/ Daniel P. McEntee
	 	 	 	 	

	 	 	 	 	Name: Daniel P. McEntee
	 	 	 	 	Title: Treasurer
	 	 	 	 	 
	 	 	Lenders:
	 	 	 	 	 
	 	 	ICO INVESTMENT CORP.
	 	 	 	 	 
	 	 	
By:	 	/s/ Brent Abrahamsen
	 	 	 	 	

	 	 	 	 	Name: Brent Abrahamsen
	 	 	 	 	Title: President



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	 	 	BLUE RIVER CAPITAL LLC
	 	 	 	 	 
	 	 	
By:	 	/s/ Van D. Greenfield
	 	 	 	 	

	 	 	 	 	Name: Van D. Greenfield
	 	 	 	 	Title: Managing Member
	 	 	 	 	 
	 	 	IRIDIUM INVESTORS, LLC
	 	 	 	 	 
	 	 	
By:	 	/s/ D.A. Colussy
	 	 	 	 	

	 	 	 	 	Name: D.A. Colussy
	 	 	 	 	Title: Managing Member
	 	 	 	 	 
	 	 	LOEB PARTNERS CORP.
	 	 	 	 	 
	 	 	
By:	 	/s/ Robert Grubin
	 	 	 	 	

	 	 	 	 	Name: Robert Grubin
	 	 	 	 	Title: Vice President 
	 	 	 	 	 
	 	 	COLUMBIA VENTURES CORPORATION
	 	 	 	 	 
	 	 	
By:	 	/s/ Kenneth D. Peterson Jr.
	 	 	 	 	

	 	 	 	 	Name: Kenneth D. Peterson Jr. 
	 	 	 	 	Title: Chief Executive Officer



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