EX-10.1






Exhibit 10.1




 





$100,000,000




CREDIT AGREEMENT




among




SPACE SYSTEMS/LORAL, INC.,

as Borrower,




The Several Lenders from Time to Time Parties Hereto,




BANK OF AMERICA, N.A.,

as Documentation Agent,




ING Bank N.V.,

as Syndication Agent,




and




JPMORGAN CHASE BANK, N.A.,

as Administrative Agent




Dated as of October 16, 2008




 





J.P. MORGAN SECURITIES INC., as Sole Lead Arranger and Sole Bookrunner




 









 





TABLE OF CONTENTS




	 	 	 	 	 
	 	 	Page	 
	SECTION 1. DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	1.1. Defined Terms
	 	 	1	 
	1.2. Other Definitional Provisions
	 	 	18	 
	 
	 	 	 	 
	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
	 	 	19	 
	 
	 	 	 	 
	2.1. Revolving Commitments
	 	 	19	 
	2.2. Procedure for Revolving Loan Borrowing
	 	 	19	 
	2.3. Swingline Commitment
	 	 	20	 
	2.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans
	 	 	20	 
	2.5. Commitment Fees, etc
	 	 	22	 
	2.6. Termination or Reduction of Revolving Commitments
	 	 	22	 
	2.7. Optional Prepayments
	 	 	22	 
	2.8. Mandatory Prepayments
	 	 	23	 
	2.9. Conversion and Continuation Options
	 	 	23	 
	2.10. Limitations on Eurodollar Tranches
	 	 	24	 
	2.11. Interest Rates and Payment Dates
	 	 	24	 
	2.12. Computation of Interest and Fees
	 	 	24	 
	2.13. Inability to Determine Interest Rate
	 	 	25	 
	2.14. Pro Rata Treatment and Payments
	 	 	25	 
	2.15. Requirements of Law
	 	 	27	 
	2.16. Taxes
	 	 	28	 
	2.17. Indemnity
	 	 	30	 
	2.18. Change of Lending Office
	 	 	30	 
	2.19. Replacement of Lenders
	 	 	30	 
	2.20. Revolving Credit Commitment Increases
	 	 	31	 
	2.21. Optional Termination by a Lender
	 	 	32	 
	 
	 	 	 	 
	SECTION 3. LETTERS OF CREDIT
	 	 	33	 
	 
	 	 	 	 
	3.1. L/C Commitment
	 	 	33	 
	3.2. Procedure for Issuance of Letter of Credit
	 	 	33	 
	3.3. Fees and Other Charges
	 	 	34	 
	3.4. L/C Participations
	 	 	34	 
	3.5. Reimbursement Obligation of the Borrower
	 	 	35	 
	3.6. Obligations Absolute
	 	 	35	 
	3.7. Letter of Credit Payments
	 	 	36	 
	3.8. Applications
	 	 	36	 
	 
	 	 	 	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES
	 	 	36	 
	 
	 	 	 	 
	4.1. Financial Condition
	 	 	36	 






i









 






	 	 	 	 	 
	 	 	Page	 
	4.2. No Change
	 	 	37	 
	4.3. Existence; Compliance with Law
	 	 	37	 
	4.4. Power; Authorization; Enforceable Obligations
	 	 	37	 
	4.5. No Legal Bar
	 	 	37	 
	4.6. Litigation
	 	 	38	 
	4.7. No Default
	 	 	38	 
	4.8. Ownership of Property; Liens
	 	 	38	 
	4.9. Intellectual Property
	 	 	38	 
	4.10. Taxes
	 	 	38	 
	4.11. Federal Regulations
	 	 	38	 
	4.12. Labor Matters
	 	 	38	 
	4.13. ERISA
	 	 	39	 
	4.14. Investment Company Act; Other Regulations
	 	 	39	 
	4.15. Subsidiaries
	 	 	39	 
	4.16. Use of Proceeds
	 	 	39	 
	4.17. Environmental Matters
	 	 	39	 
	4.18. Accuracy of Information, etc
	 	 	40	 
	4.19. Security Documents
	 	 	41	 
	4.20. Solvency
	 	 	41	 
	4.21. Regulation H
	 	 	41	 
	4.22. Senior Indebtedness
	 	 	41	 
	 
	 	 	 	 
	SECTION 5. CONDITIONS PRECEDENT
	 	 	41	 
	 
	 	 	 	 
	5.1. Conditions to Initial Extension of Credit
	 	 	41	 
	5.2. Conditions to Each Extension of Credit
	 	 	45	 
	 
	 	 	 	 
	SECTION 6. AFFIRMATIVE COVENANTS
	 	 	45	 
	 
	 	 	 	 
	6.1. Financial Statements
	 	 	45	 
	6.2. Certificates; Other Information
	 	 	46	 
	6.3. Payment of Obligations
	 	 	47	 
	6.4. Maintenance of Existence; Compliance
	 	 	48	 
	6.5. Maintenance of Property; Insurance
	 	 	48	 
	6.6. Inspection of Property; Books and Records; Discussions
	 	 	48	 
	6.7. Notices
	 	 	48	 
	6.8. Environmental Laws
	 	 	49	 
	6.9. Additional Collateral, etc
	 	 	49	 
	6.10. Reporting Requirements
	 	 	51	 
	 
	 	 	 	 
	SECTION 7. NEGATIVE COVENANTS
	 	 	51	 
	 
	 	 	 	 
	7.1. Financial Condition Covenants.
	 	 	51	 
	7.2. Indebtedness
	 	 	51	 
	7.3. Liens
	 	 	53	 
	7.4. Fundamental Changes
	 	 	55	 
	7.5. Disposition of Property
	 	 	55	 






ii









 






	 	 	 	 	 
	 	 	Page	 
	7.6. Restricted Payments
	 	 	56	 
	7.7. Capital Expenditures
	 	 	58	 
	7.8. Investments
	 	 	58	 
	7.9. Optional Payments and Modifications of Certain Debt Instruments
	 	 	59	 
	7.10. Transactions with Affiliates
	 	 	59	 
	7.11. Sales and Leasebacks
	 	 	59	 
	7.12. Swap Agreements
	 	 	59	 
	7.13. Negative Pledge Clauses
	 	 	59	 
	7.14. Clauses Restricting Subsidiary Distributions
	 	 	60	 
	7.15. Lines of Business
	 	 	60	 
	7.16. Changes in Fiscal Periods
	 	 	60	 
	 
	 	 		 
	SECTION 8. EVENTS OF DEFAULT
	 	 	60	 
	 
	 	 	 	 
	8.1. Events of Default
	 	 	60	 
	8.2. Borrower’s Right to Cure
	 	 	64	 
	 
	 	 	 	 
	SECTION 9. THE AGENTS
	 	 	64	 
	 
	 	 	 	 
	9.1. Appointment
	 	 	64	 
	9.2. Delegation of Duties
	 	 	64	 
	9.3. Exculpatory Provisions
	 	 	64	 
	9.4. Reliance by Administrative Agent
	 	 	65	 
	9.5. Notice of Default
	 	 	65	 
	9.6. Non-Reliance on Agents and Other Lenders
	 	 	65	 
	9.7. Indemnification
	 	 	66	 
	9.8. Agent in Its Individual Capacity
	 	 	66	 
	9.9. Successor Administrative Agent
	 	 	66	 
	9.10. Documentation Agent and Syndication Agent
	 	 	67	 
	 
	 	 	 	 
	SECTION 10. MISCELLANEOUS
	 	 	67	 
	 
	 	 	 	 
	10.1. Amendments and Waivers
	 	 	67	 
	10.2. Notices
	 	 	68	 
	10.3. No Waiver; Cumulative Remedies
	 	 	69	 
	10.4. Survival of Representations and Warranties
	 	 	69	 
	10.5. Payment of Expenses and Taxes
	 	 	69	 
	10.6. Successors and Assigns; Participations and Assignments
	 	 	70	 
	10.7. Adjustments; Set-off
	 	 	73	 
	10.8. Counterparts
	 	 	74	 
	10.9. Severability
	 	 	74	 
	10.10. Integration
	 	 	74	 
	10.11. Governing Law
	 	 	74	 
	10.12. Submission To Jurisdiction; Waivers
	 	 	74	 
	10.13. Acknowledgements
	 	 	75	 
	10.14. Releases of Guarantees and Liens
	 	 	75	 
	10.15. Confidentiality
	 	 	75	 
	10.16. WAIVERS OF JURY TRIAL
	 	 	76	 






iii









 








SCHEDULES:




	 	 	 
	1.1A

	 	Commitments
	1.1B

	 	Mortgaged Property
	1.1C

	 	Vendor Financing
	4.4

	 	Consents, Authorizations, Filings and Notices
	4.13

	 	Reportable Events
	4.15

	 	Subsidiaries
	4.19(a) 

	 	UCC Filing Jurisdictions
	4.19(b)

	 	Mortgage Filing Jurisdictions
	7.2(d)

	 	Existing Indebtedness
	7.3(f)

	 	Existing Liens
	7.3(p)

	 	Title Report Liens
	7.8

	 	Investments
	7.10

	 	Affiliate Transactions






 EXHIBITS:




	 	 	 
	A

	 	Form of Guarantee and Collateral Agreement
	B

	 	Form of Pledge and Security Agreement
	C

	 	Form of Compliance Certificate
	D

	 	Form of Closing Certificate
	E

	 	Form of Mortgage
	F

	 	Form of Assignment and Assumption
	G-1

	 	Form of Legal Opinion of Willkie Farr & Gallagher LLP
	G-2

	 	Form of Legal Opinion of Julie Bannerman, Esq.
	G-3

	 	Form of Legal Opinion of Heller Ehrman LLP
	H

	 	Form of Exemption Certificate
	I

	 	Form of Parent Guarantee
	J-1

	 	Form of New Lender Supplement
	J-2

	 	Form of Commitment Increase Supplement






iv









 








          CREDIT AGREEMENT (this “Agreement”), dated as of October 16, 2008, among SPACE
SYSTEMS/LORAL, INC., a Delaware corporation (the “Borrower”), the several banks and other
financial institutions or entities from time to time parties to this Agreement (the
“Lenders”), BANK OF AMERICA, N.A., as documentation agent (in such capacity, the
“Documentation Agent”), ING Bank N.V., as syndication agent (in such capacity, the
“Syndication Agent”), and JPMORGAN CHASE BANK, N.A., as administrative agent.




          The parties hereto hereby agree as follows:




SECTION 1. DEFINITIONS




          1.1. Defined Terms. As used in this Agreement, the terms listed in this Section 1.1
shall have the respective meanings set forth in this Section 1.1.




          “ABR”: for any day, a rate per annum (rounded upwards, if necessary, to the next 1/16
of 1%) equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the ABR due to a change in the
Prime Rate or the Federal Funds Effective Rate shall be effective as of the opening of business on
the effective day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.




          “ABR Loans”: Loans the rate of interest applicable to which is based upon the ABR.




          “Administrative Agent”: JPMorgan Chase Bank, N.A., together with its affiliates, as
the arranger of the Commitments and as the administrative agent for the Lenders under this
Agreement and the other Credit Documents, together with any of its successors.




          “Affiliate”: as to any Person, any other Person that, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Person. For purposes of this
definition, “control” of a Person means the power, directly or indirectly, either to (a) vote 15%
or more of the securities having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.




          “Agents”: the collective reference to the Syndication Agent, the Documentation Agent
and the Administrative Agent.




          “Aggregate Exposure”: with respect to any Lender at any time, an amount equal to the
amount of such Lender’s Revolving Commitment then in effect or, if the Revolving Commitments have
been terminated, the amount of such Lender’s Revolving Extensions of Credit then outstanding.




          “Aggregate Exposure Percentage”: with respect to any Lender at any time, the ratio
(expressed as a percentage) of such Lender’s Aggregate Exposure at such time to the Aggregate
Exposure of all Lenders at such time.




          “Agreement”: as defined in the preamble hereto.




 









 








          “Applicable Margin”: for each Type of Loan, the rate per annum set forth under the
relevant column heading below:




	 	 	 	 	 	 	 	 	 
	 	 	ABR Loans	 	Eurodollar Loans
	Revolving Loans and
Swingline Loans
	 	 	2.75	%	 	 	3.75	%






          “Application”: an application, in such form as the Issuing Lender may specify from
time to time, requesting the Issuing Lender to open a Letter of Credit.




          “Approved Fund”: as defined in Section 10.6(b).




          “Apstar Transponder Lease”: the lease resulting from the ChinaSat Transponder
Agreement dated as of November 21, 2005 between the Borrower and Loral Skynet Corporation.




          “Asset Sale”: any Disposition of property or series of related Dispositions of
property (excluding any such Disposition permitted by clause (a), (b), (c), (d), (e) or (f) of
Section 7.5) that yields gross proceeds to any Group Member (valued at the initial principal amount
thereof in the case of non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $1,000,000.




          “Asset Sale Excess Proceeds”: as defined in Section 2.8(c).




          “Assignee”: as defined in Section 10.6(b).




          “Assignment and Assumption”: an Assignment and Assumption, substantially in the form
of Exhibit F.




          “Available Liquidity”: at any date, the sum of the Unrestricted Cash and Cash
Equivalents of the Borrower and its Subsidiaries at such date, plus the lesser of (a) the Available
Revolving Commitments and (b) the maximum amount that could then be borrowed under the Available
Revolving Commitments after giving effect to which the Borrower would be in pro forma compliance
with Section 7.1(a).




          “Available Revolving Commitment”: as to any Lender at any time, an amount equal to
the excess, if any, of (a) such Lender’s Revolving Commitment then in effect over (b) such
Lender’s Revolving Extensions of Credit then outstanding; provided, that in calculating any
Lender’s Revolving Extensions of Credit for the purpose of determining such Lender’s Available
Revolving Commitment pursuant to Section 2.5(a), the aggregate principal amount of Swingline Loans
then outstanding shall be deemed to be zero.




          “Benefitted Lender”: as defined in Section 10.7(a).




          “Board”: the Board of Governors of the Federal Reserve System of the United States
(or any successor).




          “Borrower”: as defined in the preamble hereto.




2









 








          “Borrowing Date”: any Business Day specified by the Borrower as a date on which the
Borrower requests the relevant Lenders to make Loans hereunder.




          “Business”: as defined in Section 4.17(b).




          “Business Day”: a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close, provided, that with
respect to notices and determinations in connection with, and payments of principal and interest
on, Eurodollar Loans, such day is also a day for trading by and between banks in Dollar deposits in
the interbank eurodollar market.




          “Capital Expenditures”: for any period, with respect to any Person, the aggregate of
all expenditures by such Person and its Subsidiaries for the acquisition or leasing (pursuant to a
capital lease) of fixed or capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period) that should be capitalized under GAAP on a
consolidated balance sheet of such Person and its Subsidiaries.




          “Capital Lease Obligations”: as to any Person, the obligations of such Person to pay
rent or other amounts under any lease of (or other arrangement conveying the right to use) real or
personal property, or a combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP and, for the purposes
of this Agreement, the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.




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




          “Cash Equivalents”: (a) marketable direct obligations issued by, or unconditionally
guaranteed by, the United States Government or issued by any agency thereof and backed by the full
faith and credit of the United States, in each case maturing within one year from the date of
acquisition; (b) certificates of deposit, time deposits, eurodollar time deposits or overnight bank
deposits having maturities of six months or less from the date of acquisition issued by any Lender
or by any commercial bank organized under the laws of the United States or any state thereof having
combined capital and surplus of not less than $500,000,000; (c) commercial paper of a corporate
issuer rated at least A-1 by Standard & Poor’s Ratings Services (“S&P”) or P-1 by Moody’s
Investors Service, Inc. (“Moody’s”), or carrying an equivalent rating by a nationally
recognized rating agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally, and maturing within six months from the date of acquisition;
(d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of
clause (b) of this definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government; (e) securities with
maturities of one year or less from the date of acquisition issued or fully guaranteed by any
state, commonwealth or territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign government, the securities
of which state, commonwealth, territory,




3









 







political subdivision, taxing authority or foreign government (as the case may be) are rated
at least A by S&P or A by Moody’s; (f) securities with maturities of six months or less from the
date of acquisition backed by standby letters of credit issued by any Lender or any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market mutual or similar
funds that invest exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition; or (h) money market funds that (i) comply with the criteria set forth in SEC Rule
2a-7 under the Investment Company Act of 1940, as amended, (ii) are rated AAA by S&P and Aaa by
Moody’s and (iii) have portfolio assets of at least $5,000,000,000. “Cash Equivalents” shall not
include any auction rate securities.




          “Closing Date”: the date on which the conditions precedent set forth in Section 5.1
shall have been satisfied, which date is October 16, 2008.




          “Code”: the Internal Revenue Code of 1986, as amended from time to time.




          “Collateral”: all property of the Loan Parties, now owned or hereafter acquired, upon
which a Lien is purported to be created by any Security Document.




          “Commitment”: as to any Lender, the Revolving Commitment of such Lender.




          “Commitment Fee Rate”: 0.625% per annum.




          “Commonly Controlled Entity”: an entity, whether or not incorporated, that is under
common control with the Borrower within the meaning of Section 4001 of ERISA or is part of a group
that includes the Borrower and that is treated as a single employer under Section 414 of the Code.




          “Competing Person”: any Person who is actually engaged in direct competition with the
Borrower or its Subsidiaries in the business of the Borrower and its Subsidiaries described in the
Confidential Information Memorandum (as such business may be expanded in accordance with Section
7.15, the “Business”) or who is an Affiliate of any such Person (excluding any such Affiliate which
is a life insurance company or bank and any wholly owned subsidiaries of such Person, provided that
such Affiliate is not actually engaged in direct competition with the Borrower or its Subsidiaries
in the Business).




          “Compliance Certificate”: a certificate duly executed by a Responsible Officer
substantially in the form of Exhibit C.




          “Confidential Information Memorandum”: the Confidential Information Memorandum dated
June 10, 2008 and furnished to certain Lenders.




          “Consolidated EBITDA”: for any period, the Consolidated Net Income of the Borrower
and its Subsidiaries for such period plus, without duplication and to the extent reflected
as a charge in the consolidated income statement of the Borrower and its Subsidiaries for such
period, the sum of (a) income tax expense (in accordance with GAAP as reflected on the Borrower’s
consolidated statement of operations), (b) interest expense (in accordance with GAAP as reflected
on the Borrower’s consolidated statement of operations) (c) depreciation and amortization
(including stock based compensation) expense, (d) losses on foreign exchange




4









 




contracts (in accordance with GAAP as reflected on the Borrower’s consolidated statement of
operations) , (e) expenses set forth opposite the caption “Other income (expense)” (or like
caption) on such consolidated statement of operations provided that the cash portion thereof shall
not exceed $10,000,000, (f) equity in net losses of affiliates of the Borrower, (g) minority
interests in earnings of Subsidiaries of the Borrower, (h) total corporate overhead expenses of
Loral charged to the Borrower to the extent not paid in cash by the Borrower, (i) the initial
forward loss recognition on satellite purchase agreements awarded to the Borrower and its
Subsidiaries after December 31, 2007 in an amount for any one satellite construction contract
(other than the contract for NSS 14) not to exceed the contribution margin therefor (as determined
by the Borrower in accordance with its practices in effect on the date hereof) and in an aggregate
amount for any period of four consecutive fiscal quarters not to exceed $15,000,000 (or $20,000,000
for any such period ending on or before March 31, 2009) and (j) any “extraordinary losses” as such
term is defined in accordance with GAAP and minus, without duplication and to the extent
included in arriving at Consolidated Net Income for such period, the sum of the following amounts
(a) the amortization of the initial forward loss recognition on satellite purchase agreements
described in clause (i) above amortized over the life of the original planned construction period
calculated on a percentage of completion basis without change for schedule changes over the life of
the satellite purchase agreement, (b) interest income in accordance with GAAP as reflected on the
Borrower’s consolidated statement of operations (other than any such interest income in respect of
Orbital Receivables), (c) gains on foreign exchange contracts (in accordance with GAAP as reflected
on the Borrower’s consolidated statement of operations), (d) income set forth opposite the caption
“Other income (expense)” (or like caption) on such statement of operations provided that the cash
portion thereof shall not exceed $10,000,000, (e) equity in net gains of affiliates of the
Borrower, (f) minority interests in losses of Subsidiaries of the Borrower, (g) losses from sales
(whether or not “true sales”) of Vendor Financing Receivables or Orbital Receivables for less than
book value and (h) any “extraordinary gains” as such term is defined in accordance with GAAP.




          “Consolidated Interest Coverage Ratio”: for any period, the ratio of (a) Consolidated
EBITDA for such period to (b) Consolidated Interest Expense for such period.




          “Consolidated Interest Expense”: for any period, total interest expense, to be paid
currently in cash (including that attributable to Capital Lease Obligations) of the Borrower and
its Subsidiaries accrued in such period with respect to all outstanding Indebtedness of the
Borrower and its Subsidiaries (including all commissions, discounts and other fees and charges owed
with respect to letters of credit and bankers’ acceptance financing and net costs under Swap
Agreements in respect of interest rates to the extent such net costs are allocable to such period
in accordance with GAAP).




          “Consolidated Leverage Ratio”: as at any day, the ratio of (a) Consolidated Total
Debt on such day to (b) Consolidated EBITDA for the four fiscal quarter period ended on such day
or, if not ended on such day, the most recently ended four fiscal quarter period prior to such day.




          “Consolidated Net Income”: for any period, the consolidated net income (or loss) of
the Borrower and its Subsidiaries, determined on a consolidated basis in accordance with GAAP and
before the payment of dividends; provided that there shall be excluded (a) the income




5









 







(or deficit) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries, (b) the income (or
deficit) of any Person (other than a Subsidiary of the Borrower) in which the Borrower or any of
its Subsidiaries has an ownership interest, except to the extent that any such income is actually
received by the Borrower or such Subsidiary in the form of dividends or similar distributions and
(c) the undistributed earnings of any Subsidiary of the Borrower to the extent that the declaration
or payment of dividends or similar distributions by such Subsidiary is not at the time permitted by
the terms of any Contractual Obligation (other than under any Credit Documents) or Requirement of
Law applicable to such Subsidiary.




          “Consolidated Total Debt”: at any date, the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries at such date, determined on a consolidated basis
in accordance with GAAP and after taking into account any Indebtedness to be incurred, paid or
prepaid on such date.




          “Continuing Directors”: the directors of Loral on the Closing Date, and each other
director, if, in each case, such other director’s nomination for election to the board of directors
of Loral is recommended by at least 66 2/3% of the then Continuing Directors in his or her election
by the shareholders of Loral.




          “Contractual Obligation”: as to any Person, any provision of any security issued by
such Person or of any agreement, instrument or other undertaking to which such Person is a party or
by which it or any of its property is bound.




          “Credit Documents”: this Agreement, the Security Documents, the Notes, the Parent
Guarantee (only upon its execution and delivery) and any amendment, waiver, supplement or other
modification to any of the foregoing.




          “Default”: any of the events specified in Section 8, whether or not any requirement
for the giving of notice, the lapse of time, or both, has been satisfied.




          “Disposition”: with respect to any property, any sale, lease (other than the Apstar
Transponder Lease), sale and leaseback, assignment, conveyance, transfer or other disposition
thereof. The terms “Dispose” and “Disposed of” shall have correlative meanings.




          “Documentation Agent”: as defined in the preamble hereto.




          “Dollars” and “$”: dollars in lawful currency of the United States.




          “Domestic Subsidiary”: any Subsidiary of the Borrower organized under the laws of any
jurisdiction within the United States.




          “Environmental Laws”: any and all foreign, Federal, state, local or municipal laws,
rules, orders, regulations, statutes, ordinances, codes, decrees, requirements of any Governmental
Authority or other Requirements of Law (including common law) regulating, relating to or imposing
liability or standards of conduct concerning protection of human health or the environment, as now
or may at any time hereafter be in effect.




6









 








          “ERISA”: the Employee Retirement Income Security Act of 1974, as amended from time to
time.




          “Eurocurrency Reserve Requirements”: for any day as applied to a Eurodollar Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including basic, supplemental, marginal and emergency reserves)
under any regulations of the Board or other Governmental Authority having jurisdiction with respect
thereto dealing with reserve requirements prescribed for eurocurrency funding (currently referred
to as “Eurocurrency Liabilities” in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System.




          “Eurodollar Base Rate”: with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, the rate per annum determined on the basis of the rate for
deposits in Dollars for a period equal to such Interest Period commencing on the first day of such
Interest Period appearing on the Reuters Screen LIBOR01 Page as of 11:00 A.M., London time, two
Business Days prior to the beginning of such Interest Period. In the event that such rate does not
appear on such page (or otherwise on such screen), the “Eurodollar Base Rate” shall be
determined by reference to such other comparable publicly available service for displaying
eurodollar rates as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is offered Dollar deposits
at or about 11:00 A.M., New York City time, two Business Days prior to the beginning of such
Interest Period in the interbank eurodollar market where its eurodollar and foreign currency and
exchange operations are then being conducted for delivery on the first day of such Interest Period
for the number of days comprised therein.




          “Eurodollar Loans”: Loans the rate of interest applicable to which is based upon the
Eurodollar Rate.




          “Eurodollar Rate”: with respect to each day during each Interest Period pertaining to
a Eurodollar Loan, a rate per annum determined for such day in accordance with the following
formula:




Eurodollar Base Rate



1.00
– Eurocurrency Reserve Requirements





          “Eurodollar Tranche”: the collective reference to Eurodollar Loans under the
Revolving Facility the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally have been made on
the same day).




          “Event of Default”: any of the events specified in Section 8, provided that
any requirement for the giving of notice, the lapse of time, or both, has been satisfied.




          “Existing Reimbursement Agreement”: as defined in Section 3.1(c).




          “Federal Funds Effective Rate”: for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System arranged by




7









 




federal funds brokers, as published on the next succeeding Business Day by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day that is a Business Day, the
average of the quotations for the day of such transactions received by the Administrative Agent
from three federal funds brokers of recognized standing selected by it.




          “Fee Payment Date”: (a) the third Business Day following the last day of each March,
June, September and December and (b) the last day of the Revolving Commitment Period.




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




          “Funding Office”: the office of the Administrative Agent specified in Section 10.2 or
such other office as may be specified from time to time by the Administrative Agent as its funding
office by written notice to the Borrower and the Lenders.




          “GAAP”: generally accepted accounting principles in the United States as in effect
from time to time, except that for purposes of Section 7.1, GAAP shall be determined on the basis
of such principles in effect on the date hereof and consistent with those used in the preparation
of the most recent audited financial statements referred to in Section 4.1(b). In the event that
any “Accounting Change” (as defined below) shall occur and such change results in a change in the
method of calculation of financial covenants, standards or terms in this Agreement, then the
Borrower and the Administrative Agent agree to enter into negotiations in order to amend such
provisions of this Agreement so as to reflect equitably such Accounting Changes with the desired
result that the criteria for evaluating the Borrower’s financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the Administrative Agent and
the Required Lenders, all financial covenants, standards and terms in this Agreement shall continue
to be calculated or construed as if such Accounting Changes had not occurred. “Accounting Changes”
refers to changes in accounting principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board of the American Institute of
Certified Public Accountants or, if applicable, the SEC or the International Accounting Standards
Board.




          “Governmental Authority”: any nation or government, any state or other political
subdivision thereof, any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative
functions of or pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).




          “Group Members”: the collective reference to the Borrower and its Subsidiaries.




          “Guarantee and Collateral Agreement”: the Guarantee and Collateral Agreement to be
executed and delivered by the Borrower and each Guarantor, substantially in the form of Exhibit A.




          “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation, including a reimbursement, counterindemnity or similar obligation, of the




8









 




guaranteeing Person that guarantees or in effect guarantees, or which is given to induce the
creation of a separate obligation by another Person (including any bank under any letter of credit)
that guarantees or in effect guarantees, any Indebtedness, leases, dividends or other obligations
(the “primary obligations”) of any other third Person (the “primary obligor”) in
any manner, whether directly or indirectly, including any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary obligation or any property constituting
direct or indirect security therefor other than at fair market value, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the net worth or solvency
of the primary obligor, (iii) to purchase property, securities or services other than at fair
market value primarily for the purpose of assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such primary obligation or (iv) otherwise to
assure or hold harmless the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed to be the lower of
(a) an amount equal to the stated or determinable amount of the primary obligation in respect of
which such Guarantee Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such guaranteeing person may be
liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall
be such guaranteeing person’s maximum reasonably anticipated liability in respect thereof as
determined by the Borrower in good faith.




          “Guarantors”: each of the Borrower’s direct and indirect, existing and future,
wholly-owned Subsidiaries other than any Foreign Subsidiary.




          “Holdings”: Loral Space & Communications Holdings Corporation, a Delaware
corporation.




          “Holdings Pledge Agreement”: the Pledge and Security Agreement to be executed and
delivered by Holdings substantially in the form of Exhibit B.




          “Immaterial Subsidiary”: International Space Technology, Inc. and each Subsidiary of
the Borrower designated as such by the Borrower in Section 6.2(b)(iv) (i) that owns or otherwise
holds no proprietary Intellectual Property, (ii) that has assets with an aggregate value not
exceeding $5,000,000 and (iii) that when taken together with all other Immaterial Subsidiaries, has
assets with an aggregate value not exceeding $50,000,000.




          “Increase Effective Date”: the date on which the Administrative Agent shall have
received a Revolving Commitment Increase Notice and all conditions precedent to the effectiveness
of any such Revolving Commitment increase set forth in Section 2.20 shall have been satisfied.




          “Indebtedness”: of any Person at any date, without duplication, (a) all indebtedness
of such Person for borrowed money, (b) all obligations of such Person for the deferred purchase
price of property or services (other than trade payables and other liabilities




9









 




arising as a result of progress payments, milestones, customer advances, warranty provisions
or similar arrangements related to contracts incurred in the ordinary course of such Person’s
business), (c) all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (d) all indebtedness 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), but excluding such liabilities arising as a result of
progress payments, milestones, customer advances, warranty provisions or similar arrangements
related to contracts incurred in the ordinary course of business, (e) all Capital Lease Obligations
of such Person, (f) all reimbursement obligations of such Person as an account party or applicant
under or in respect of acceptances, letters of credit, surety bonds or similar arrangements that
are not paid within one Business Day of the date such obligations are incurred, (g) all obligations
of such Person, contingent or otherwise, in respect of Dispositions by such Person of Orbital
Receivables or Vendor Financing Receivables that may not be accounted for as “true sales” in
accordance with GAAP, (h) the liquidation value of all mandatorily redeemable preferred Capital
Stock of such Person, (i) all Guarantee Obligations of such Person in respect of obligations of the
kind referred to in clauses (a) through (h) above, (j) all obligations of the kind referred to in
clauses (a) through (i) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on property (including accounts
and contract rights) owned by such Person, whether or not such Person has assumed or become liable
for the payment of such obligation, and (k) for the purposes of Section 8(f) only, all obligations
of such Person in respect of Swap Agreements. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such Person’s ownership
interest in or other relationship with such entity, except to the extent the terms of such
Indebtedness expressly provide that such Person is not liable therefor.




          “Insolvency”: with respect to any Multiemployer Plan, the condition that such Plan is
insolvent within the meaning of Section 4245 of ERISA.




          “Insolvent”: pertaining to a condition of Insolvency.




          “Intellectual Property”: the collective reference to all rights, priorities and
privileges relating to intellectual property, whether arising under United States, multinational or
foreign laws or otherwise, including, without limitation, all copyrights and works of authorship,
copyright licenses, patents, patent licenses, trademarks, trademark licenses, domain names,
technology, know-how and processes, 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”: (a) as to any ABR Loan (other than any Swingline Loan), the
last day of each March, June, September and December (or, if an Event of Default is in existence,
the last day of each calendar month) to occur while such Loan is outstanding and the final maturity
date of such Loan, (b) as to any Eurodollar Loan having an Interest Period of three months or less,
the last day of such Interest Period, (c) as to any Eurodollar Loan having an Interest Period
longer than three months, each day that is three months, or a whole multiple thereof, after the
first day of such Interest Period and the last day of such Interest Period, (d) as




10









 




to any Loan (other than any Revolving Loan that is an ABR Loan and any Swingline Loan), the
date of any repayment or prepayment made in respect thereof and (e) as to any Swingline Loan, the
day that such Loan is required to be repaid.




          “Interest Period”: as to any Eurodollar Loan, (a) initially, the period commencing on
the borrowing or conversion date, as the case may be, with respect to such Eurodollar Loan and
ending one, two, three or six months thereafter, as selected by the Borrower in its notice of
borrowing or notice of conversion, as the case may be, given with respect thereto; and (b)
thereafter, each period commencing on the last day of the next preceding Interest Period applicable
to such Eurodollar Loan and ending one, two, three or six months thereafter, as selected by the
Borrower by irrevocable notice to the Administrative Agent not later than 11:00 A.M., New York City
time, on the date that is three Business Days prior to the last day of the then current Interest
Period with respect thereto; provided that, all of the foregoing provisions relating to
Interest Periods are subject to the following:





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




     (ii) the Borrower may not select an Interest Period that would extend beyond the
Revolving Termination Date;




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




     (iv) the Borrower shall select Interest Periods so as not to require a payment or
prepayment of any Eurodollar Loan during an Interest Period for such Loan.



          “Investments”: as defined in Section 7.8.




          “Issuing Lender”: each of JPMorgan Chase Bank, N.A. and any other Lender approved by
the Administrative Agent and the Borrower that has agreed in its sole discretion to act as an
“Issuing Lender” hereunder, or any of their respective affiliates, in each case in its capacity as
issuer of any Letter of Credit. Each reference herein to “the Issuing Lender” shall be deemed to
be a reference to the relevant Issuing Lender.




          “L/C Commitment”: $50,000,000.




          “L/C Disbursement”: at any time, an amount equal to the sum of (a) the aggregate then
undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount
of drawings under Letters of Credit that have not then been reimbursed pursuant to Section 3.5.




11









 








          “L/C Participants”: the collective reference to all the Lenders other than the
Issuing Lender.




          “Lenders”: as defined in the preamble hereto.




          “Letters of Credit”: as defined in Section 3.1(a).




          “Lien”: any mortgage, pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge or other security interest or any preference,
priority or other security agreement or preferential arrangement of any kind or nature whatsoever
(including any conditional sale or other title retention agreement and any capital lease having
substantially the same economic effect as any of the foregoing).




          “Loan”: any loan made by any Lender pursuant to this Agreement.




          “Loan Party”: Loral or each Group Member that is a party to a Credit Document.




          “Loral”: Loral Space & Communications Inc., a Delaware corporation.




          “Material Adverse Effect”: a material adverse effect on (a) the business, operations,
property or condition (financial or otherwise) of the Borrower and its Subsidiaries taken as a
whole or (b) the validity or enforceability of this Agreement or any of the other Credit Documents
or the rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder;
provided, however, that no development or event under any satellite purchase agreement awarded to
the Borrower or any of its Subsidiaries shall be deemed to have or be reasonably expected to have a
Material Adverse Effect unless and until a written notice of termination shall be delivered to the
Borrower or such Subsidiary, as the case may be, in accordance with the provisions of such
satellite contact after the occurrence of any “event of default” (or similar concept) under, and
within the meaning of, such satellite contact.




          “Materials of Environmental Concern”: any gasoline or petroleum (including crude oil
or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or
wastes, defined or regulated as such in or under any Environmental Law, including asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.




          “Material Subsidiary”: each Subsidiary of the Borrower that is not an Immaterial
Subsidiary.




          “Maximum Outstanding Amount”: as defined in Section 2.1(a).




          “Mortgaged Properties”: the real properties listed on Schedule 1.1B, as to which the
Administrative Agent for the benefit of the Lenders shall be granted a Lien pursuant to the
Mortgages.




          “Mortgages”: each of the mortgages and deeds of trust made by any Loan Party in favor
of, or for the benefit of, the Administrative Agent for the benefit of the Lenders, substantially
in the form of Exhibit E (with such changes thereto as shall be advisable under the law of the
jurisdiction in which such mortgage or deed of trust is to be recorded).




12









 








          “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in Section
4001(a)(3) of ERISA.




          “Net Cash Proceeds”: (a) in connection with any Asset Sale or any Recovery Event, the
proceeds thereof in the form of cash and Cash Equivalents (including any such proceeds received by
way of deferred payment of principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received), net of attorneys’ fees,
accountants’ fees, investment banking fees, amounts required to be applied to the repayment of
Indebtedness secured by a Lien expressly permitted hereunder on any asset that is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a Security Document) or paid to
a customer of the Borrower or a Subsidiary pursuant to a Contractual Obligation in existence prior
to the date of any such Recovery Event and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to be payable as a result
thereof (after taking into account any available tax credits or deductions and any tax sharing
arrangements) and (b) in connection with any issuance or sale of Capital Stock or any incurrence of
Indebtedness, the cash proceeds received from such issuance or incurrence, net of attorneys’ fees,
investment banking fees, accountants’ fees, underwriting discounts and commissions and other
customary fees and expenses actually incurred in connection therewith.




          “New Lender”: as defined in Section 2.20(b).




          “Non-Excluded Taxes”: as defined in Section 2.16(a).




          “Non-U.S. Lender”: as defined in Section 2.16(d).




          “Notes”: the collective reference to any promissory note evidencing Loans.




          “Obligations”: the unpaid principal of and interest on (including interest accruing
after the maturity of the Loans and Reimbursement Obligations and interest accruing after the
filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of Specified Swap Agreements
and Specified Cash Management Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter incurred, which may
arise under, out of, or in connection with, this Agreement, any other Credit Documents, the Letters
of Credit, any Specified Swap Agreement, any Specified Cash Management Agreement or any other
document made, delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs, expenses (including all
documented fees, charges and disbursements of counsel to the Administrative Agent or to any Lender
that are required to be paid by the Borrower pursuant hereto) or otherwise.




          “Orbital Receivables”: satellite orbital incentive payments payable to the Borrower or
any of its Subsidiaries under satellite purchase agreements and any other contingent payments
related to satellite construction projects.




13









 








          “Other Taxes”: any and all present or future stamp or documentary taxes or any other
excise or property taxes, charges or similar levies arising from any payment made hereunder or from
the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Credit Documents.




          “Parent Guarantee”: the Parent Guarantee Agreement to be executed and delivered by
Loral, in the form of Exhibit I. The Administrative Agent shall promptly notify each Lender (i) if
Loral executes and delivers the Parent Guarantee, with a copy of the executed Parent Guarantee to
promptly follow, and (ii) if Loral does not execute and deliver the Parent Guarantee on or prior to
January 14, 2009.




          “Participant”: as defined in Section 10.6(c).




          “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to Subtitle A
of Title IV of ERISA (or any successor).




          “Person”: an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, Governmental
Authority or other entity of whatever nature.




          “Plan”: at a particular time, any employee benefit plan that is covered by ERISA and
in respect of which the Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as
defined in Section 3(5) of ERISA.




          “Prime Rate”: the rate of interest per annum publicly announced from time to time by
the Administrative Agent as its prime rate in effect at its principal office in New York City (the
Prime Rate not being intended to be the lowest rate of interest charged by the Administrative Agent
in connection with extensions of credit to debtors).




          “Projections”: as defined in Section 6.2(c).




          “Properties”: as defined in Section 4.17(a).




          “Recovery Event”: any settlement of or payment in respect of any property or casualty
insurance claim or any condemnation proceeding relating to any asset of any Group Member.




          “Refunded Swingline Loans”: as defined in Section 2.4.




          “Register”: as defined in Section 10.6(b).




          “Regulation U”: Regulation U of the Board as in effect from time to time.




          “Reimbursement Obligation”: the obligation of the Borrower to reimburse the Issuing
Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit.




14









 








          “Reinvestment Notice”: a written notice executed by a Responsible Officer stating
that the Borrower (directly or indirectly through a Subsidiary) has, or intends and expects within
120 days of the date of an Asset Sale or Recovery Event, to use all or a specified portion of the
Net Cash Proceeds of such Asset Sale or Recovery Event to acquire or repair assets useful in its
business.




          “Reorganization”: with respect to any Multiemployer Plan, the condition that such
plan is in reorganization within the meaning of Section 4241 of ERISA.




          “Reportable Event”: any of the events set forth in Section 4043(c) of ERISA, other
than those events as to which the thirty day notice period is waived under subsections .27, .28,
..29, .30, .31, .32, .34 or .35 of PBGC Reg. § 4043.




          “Required Lenders”: at any time, the holders of 60% or more of the Total Revolving
Commitments then in effect or, if the Revolving Commitments have been terminated, the Total
Revolving Extensions of Credit then outstanding; provided that such holders shall at all
times include at least three Lenders or, if there are fewer than three Lenders, all Lenders.




          “Requirement of Law”: as to any Person, the Certificate of Incorporation and By-Laws
or other organizational or governing documents of such Person, and any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental Authority, in each
case 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”: the chief executive officer, president, general counsel,
treasurer or chief financial officer of the Borrower or Loral, but in any event, with respect to
financial matters, the chief financial officer or treasurer of the Borrower or Loral.




          “Restricted Payments”: as defined in Section 7.6.




          “Revolving Commitment”: as to any Lender, the obligation of such Lender, if any, to
make Revolving Loans and participate in Swingline Loans and Letters of Credit in an aggregate
principal and/or face amount not to exceed the amount set forth under the heading “Revolving
Commitment” opposite such Lender’s name on Schedule 1.1A or in the Assignment and Assumption
pursuant to which such Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof (including any increase in the Revolving Commitments pursuant to
Section 2.20). The original amount of the Total Revolving Commitments is $100,000,000.




          “Revolving Commitment Increase Amount”: as defined in Section 2.20(a).




          “Revolving Commitment Increase Notice”: as defined in Section 2.20(a).




          “Revolving Commitment Period”: the period from and including the Closing Date to the
Revolving Termination Date.




          “Revolving Extensions of Credit”: as to any Lender at any time, an amount equal to
the sum of (a) the aggregate principal amount of all Revolving Loans held by such Lender




15









 




then outstanding, (b) such Lender’s Revolving Percentage of the L/C Obligations then
outstanding and (c) such Lender’s Revolving Percentage of the aggregate principal amount of
Swingline Loans then outstanding.




          “Revolving Loans”: as defined in Section 2.1(a).




          “Revolving Percentage”: as to any Lender at any time, the percentage which such
Lender’s Revolving Commitment then constitutes of the Total Revolving Commitments or, at any time
after the Revolving Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender’s Revolving Loans then outstanding constitutes of the
aggregate principal amount of the Revolving Loans then outstanding, provided, that, in the
event that the Revolving Loans are paid in full prior to the reduction to zero of the Total
Revolving Extensions of Credit, the Revolving Percentages shall be determined in a manner designed
to ensure that the other outstanding Revolving Extensions of Credit shall be held by the Lenders on
a comparable basis.




          “Revolving Termination Date”: October 16, 2011; provided that if Lenders
provide notice of termination of at least 50% of the Total Revolving Commitments pursuant to
Section 2.21, the Revolving Termination Date shall be the date on which such termination becomes
effective as provided in such Section.




          “SEC”: the Securities and Exchange Commission, any successor thereto and any
analogous Governmental Authority.




          “Security Documents”: the collective reference to the Guarantee and Collateral
Agreement, the Holdings Pledge Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any property of any Person to secure the
obligations and liabilities of any Loan Party under any Credit Documents.




          “Single Employer Plan”: any Plan that is covered by Title IV of ERISA, but that is
not a Multiemployer Plan.




          “Solvent”: when used with respect to any Person, means that, as of any date of
determination, (a) the amount of the “present fair saleable value” of the assets of such Person
will, as of such date, exceed the amount of all “liabilities of such Person, contingent or
otherwise”, as of such date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be greater than the amount that
will be required to pay the liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably small amount of capital
with which to conduct its business, and (d) such Person will be able to pay its debts as they
mature. For purposes of this definition, (i) “debt” means liability on a “claim”, and (ii) “claim”
means any (x) right to payment, whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable,
secured or unsecured or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable remedy is




16









 




reduced to judgment, fixed, contingent, matured or unmatured, disputed, undisputed, secured or
unsecured.




          “Specified Cash Management Agreement”: any agreement providing for treasury,
depositary or cash management services, including in connection with any automated clearing house
transfers of funds or any similar transactions between the Borrower or any Guarantor and any Lender
or affiliate thereof.




          “Specified Swap Agreement”: any Swap Agreement in respect of interest rates, currency
exchange rates or commodity prices entered into by the Borrower or any Guarantor and any Person
that is a Lender or an affiliate of a Lender at the time such Swap Agreement is entered into.




          “Spot Rate of Exchange”: with respect to any designated foreign currency, at any date
of determination thereof, the spot rate of exchange in London that appears on the display page
applicable to such designated foreign currency on the Reuters System (or such other page as may
replace such page for the purpose of displaying the spot rate of exchange in London);
provided that if there shall at any time no longer exist such a page, the spot rate of
exchange shall be determined by reference to another similar rate publishing service selected by
the Administrative Agent and, if no such similar rate publishing service is available, by reference
to the published rate of the Administrative Agent in effect at such date for similar commercial
transactions.




          “Subsidiary”: as to any Person, a corporation, partnership, limited liability company
or other entity of which shares of stock or other ownership interests having ordinary voting power
(other than stock or such other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of directors or other managers of such
corporation, partnership or other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more intermediaries, or both, by such
Person. Unless otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in this
Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.




          “Swap Agreement”: any agreement with respect to any swap, forward, future or
derivative transaction or option or similar agreement involving, or settled by reference to, one or
more rates, currencies, commodities, equity or debt instruments or securities, or economic,
financial or pricing indices or measures of economic, financial or pricing risk or value or any
similar transaction or any combination of these transactions; provided that no phantom
stock or similar plan providing for payments only on account of services provided by current or
former directors, officers, employees or consultants of the Borrower or any of its Subsidiaries
shall be a “Swap Agreement”.




          “Swingline Commitment”: the obligation of the Swingline Lender to make Swingline
Loans pursuant to Section 2.3 in an aggregate principal amount at any one time outstanding not to
exceed $10,000,000.




17









 









          “Swingline Lender”: JPMorgan Chase Bank, N.A. in its capacity as the lender of
Swingline Loans.




          “Swingline Loans”: as defined in Section 2.3.




          “Swingline Participation Amount”: as defined in Section 2.4.




          “Syndication Agent”: as defined in the preamble hereto.




          “Title Insurance Company”: as defined in Section 5.1(k)




          “Total Revolving Commitments”: at any time, the aggregate amount of the Revolving
Commitments then in effect.




          “Total Revolving Extensions of Credit”: at any time, the aggregate amount of the
Revolving Extensions of Credit of the Lenders outstanding at such time.




          “Transferee”: any Assignee or Participant.




          “Type”: as to any Loan, its nature as an ABR Loan or a Eurodollar Loan.




          “United States”: the United States of America.




          “Unrestricted Cash and Cash Equivalents”: as of any date, cash and Cash Equivalents
of the Borrower and its Subsidiaries that would not, in accordance with GAAP, be included in “other
assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Subsidiaries
as of such date.




          “Vendor Financing”: any financing specified on Schedule 1.1C or any other financing
provided by the Borrower or any of its Subsidiaries to any customer in connection with its purchase
from any Group Member of any satellite or related assets.




          “Vendor Financing Receivables: any payments owing to the Borrower or any of its
Subsidiaries under any Vendor Financing.




          1.2 Other Definitional Provisions. (a) Unless otherwise specified therein, all terms
defined in this Agreement shall have the defined meanings when used in the other Credit Documents
or any certificate or other document made or delivered pursuant
hereto or thereto.


          (b)
As used herein
and in the other Credit Documents, and any certificate or other document made or delivered pursuant
hereto or thereto, (i) accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP, (ii) the words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”, (iii) the word “incur” shall be
construed to mean incur, create, issue, assume, become liable in respect of or suffer to exist (and
the words “incurred” and “incurrence” shall have correlative meanings), (iv) the words “asset” and
“property” shall be construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, Capital Stock, securities, revenues,
accounts, leasehold interests and contract rights, and (v)




18









 




references to agreements or other Contractual Obligations shall, unless otherwise specified,
be deemed to refer to such agreements or Contractual Obligations as amended, supplemented, restated
or otherwise modified from time to time.




          (c) The words “hereof”, “herein” and “hereunder” and words of similar import, when used in
this Agreement, shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section, Schedule and Exhibit references are to this Agreement unless otherwise
specified.




          (d) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.




SECTION 2. AMOUNT AND TERMS OF COMMITMENTS




          2.1. Revolving Commitments. (a) Subject to the terms and conditions hereof, each
Lender severally agrees to make revolving credit loans (“Revolving Loans”) to the Borrower
from time to time during the Revolving Commitment Period in an aggregate principal amount at any
one time outstanding which, when added to such Lender’s Revolving Percentage of the sum of (i) the
L/C Obligations then outstanding and (ii) the aggregate principal amount of the Swingline Loans
then outstanding, does not exceed on any date the lesser of (A) such Lender’s Revolving Commitment
and (B) such Lender’s Revolving Percentage of (x) if the Parent Guarantee is executed and delivered
to the Administrative Agent on or prior to January 14, 2009 (1) until such execution and delivery,
$50,000,000 and (2) thereafter, the Total Revolving Commitment and (y) if the Parent Guarantee is
not executed and delivered to the Administrative Agent on or prior to January 14, 2009, at all
times $50,000,000 (the amount applicable at any time pursuant to the foregoing clause (x) or (y),
as the same may be adjusted pursuant to Section 2.21, the “Maximum Outstanding Amount” at
such time). References in the immediately preceding sentence to $50,000,000 shall not be affected
by any Revolving Commitment Increase Amount (except to the extent such Revolving Commitment
Increase Amount results in the Maximum Outstanding Amount being reinstated to up to $50,000,000
following the termination of any Lender’s Revolving Commitment pursuant to Section 2.21). During
the Revolving Commitment Period the Borrower may use the Revolving Commitments by borrowing,
prepaying the Revolving Loans in whole or in part, and reborrowing, all in accordance with the
terms and conditions hereof. The Revolving Loans may from time to time be Eurodollar Loans or ABR
Loans, as determined by the Borrower and notified to the Administrative Agent in accordance with
Sections 2.2 and 2.9.




          (b) The Borrower shall repay all outstanding Revolving Loans on the Revolving Termination
Date.




          2.2. Procedure for Revolving Loan Borrowing. The Borrower may borrow under the
Revolving Commitments during the Revolving Commitment Period on any Business Day, provided that the
Borrower shall give the Administrative Agent irrevocable notice (which notice must be received by
the Administrative Agent prior to 11:00 A.M., New York City time, (a) three Business Days prior to
the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one Business Day prior to the
requested Borrowing Date, in the case of ABR Loans (other than Swingline Loans) (provided that any
such notice of a borrowing of ABR Loans under the




19









 




Revolving Facility to finance payments required by Section 3.5 may be given not later than
10:00 A.M., New York City time, on the date of the proposed borrowing), specifying (i) the amount
and Type of Revolving Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the case
of Eurodollar Loans, the respective amounts of each such Type of Loan and the respective lengths of
the initial Interest Period therefor. Each borrowing under the Revolving Commitments shall be in
an amount equal to (x) in the case of ABR Loans, $1,000,000 or a whole multiple thereof (or, if the
then aggregate Available Revolving Commitments are less than $1,000,000, such lesser amount) and
(y) in the case of Eurodollar Loans, $1,000,000 or a whole multiple of $1,000,000 in excess
thereof; provided, that the Swingline Lender may request, on behalf of the Borrower, borrowings
under the Revolving Commitments that are ABR Loans in other amounts pursuant to Section 2.4. Upon
receipt of any such notice from the Borrower, the Administrative Agent shall promptly notify each
Lender thereof. Each Lender will make the amount of its pro rata share of each borrowing available
to the Administrative Agent for the account of the Borrower at the Funding Office prior to 12:00
Noon, New York City time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made available to the Borrower
by the Administrative Agent crediting the account of the Borrower on the books of such office with
the aggregate of the amounts made available to the Administrative Agent by the Lenders and in like
funds as received by the Administrative Agent.




          2.3. Swingline Commitment. (a) Subject to the terms and conditions hereof, the
Swingline Lender agrees to make a portion of the credit otherwise available to the Borrower under
the Revolving Commitments from time to time during the Revolving Commitment Period by making swing
line loans (“Swingline Loans”) to the Borrower; provided that (i) the aggregate principal
amount of Swingline Loans outstanding at any time shall not exceed the Swingline Commitment then in
effect (notwithstanding that the Swingline Loans outstanding at any time, when aggregated with the
Swingline Lender’s other outstanding Revolving Loans, may exceed the Swingline Commitment then in
effect) and (ii) the Borrower shall not request, and the Swingline Lender shall not make, any
Swingline Loan if, after giving effect to the making of such Swingline Loan, the aggregate
principal amount of the Swingline Loans outstanding, when added to the sum of (x) the L/C
Obligations then outstanding and (y) the aggregate principal amount of the Revolving Loans then
outstanding, would exceed the Maximum Outstanding Amount. During the Revolving Commitment Period,
the Borrower may use the Swingline Commitment by borrowing, repaying and reborrowing, all in
accordance with the terms and conditions hereof. Swingline Loans shall be ABR Loans only.




          (b) The Borrower shall repay to the Swingline Lender the then unpaid principal amount of each
Swingline Loan on the earlier of the Revolving Termination Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is at least five
Business Days after such Swingline Loan is made; provided that on each date that a
Revolving Loan is borrowed, the Borrower shall repay all Swingline Loans then outstanding.




          2.4. Procedure for Swingline Borrowing; Refunding of Swingline Loans. (a) Whenever
the Borrower desires that the Swingline Lender make Swingline Loans it shall give the Swingline
Lender irrevocable telephonic notice confirmed promptly in writing (which telephonic notice must be
received by the Swingline Lender not later than 1:00 P.M., New York




20









 




City time, on the proposed Borrowing Date), specifying (i) the amount to be borrowed and (ii)
the requested Borrowing Date (which shall be a Business Day during the Revolving Commitment
Period). Each borrowing under the Swingline Commitment shall be in an amount equal to $500,000 or
a whole multiple of $100,000 in excess thereof. Not later than 3:00 P.M., New York City time, on
the Borrowing Date specified in a notice in respect of Swingline Loans, the Swingline Lender shall
make available to the Administrative Agent at the Funding Office an amount in immediately available
funds equal to the amount of the Swingline Loan to be made by the Swingline Lender. The
Administrative Agent shall make the proceeds of such Swingline Loan available to the Borrower on
such Borrowing Date by depositing such proceeds in the account of the Borrower with the
Administrative Agent on such Borrowing Date in immediately available funds.




          (b) The Swingline Lender, at any time and from time to time in its sole and absolute
discretion may, on behalf of the Borrower (which hereby irrevocably directs the Swingline Lender to
act on its behalf), on one Business Day’s notice given by the Swingline Lender no later than 12:00
Noon, New York City time, request each Lender to make, and each Lender hereby agrees to make, a
Revolving Loan, in an amount equal to such Lender’s Revolving Percentage of the aggregate amount of
the Swingline Loans (the “Refunded Swingline Loans”) outstanding on the date of such
notice, to repay the Swingline Lender. Each Lender shall make the amount of such Revolving Loan
available to the Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of such notice. The
proceeds of such Revolving Loans shall be immediately made available by the Administrative Agent to
the Swingline Lender for application by the Swingline Lender to the repayment of the Refunded
Swingline Loans. The Borrower irrevocably authorizes the Swingline Lender to charge the Borrower’s
accounts with the Administrative Agent (up to the amount available in each such account) in order
to immediately pay the amount of such Refunded Swingline Loans to the extent amounts received from
the Lenders are not sufficient to repay in full such Refunded Swingline Loans.




          (c) If prior to the time a Revolving Loan would have otherwise been made pursuant to Section
2.4(b), one of the events described in Section 8(g) shall have occurred and be continuing with
respect to the Borrower or if for any other reason, as determined by the Swingline Lender in its
sole discretion, Revolving Loans may not be made as contemplated by Section 2.4(b), each Lender
shall, on the date such Revolving Loan was to have been made pursuant to the notice referred to in
Section 2.4(b), purchase for cash an undivided participating interest in the then outstanding
Swingline Loans by paying to the Swingline Lender an amount (the “Swingline Participation
Amount”) equal to (i) such Lender’s Revolving Percentage times (ii) the sum of the
aggregate principal amount of Swingline Loans then outstanding that were to have been repaid with
such Revolving Loans.




          (d) Whenever, at any time after the Swingline Lender has received from any Lender such
Lender’s Swingline Participation Amount, the Swingline Lender receives any payment on account of
the Swingline Loans, the Swingline Lender will distribute to such Lender its Swingline
Participation Amount (appropriately adjusted, in the case of interest payments, to reflect the
period of time during which such Lender’s participating interest was outstanding and funded and, in
the case of principal and interest payments, to reflect such Lender’s pro rata
portion of such payment if such payment is not sufficient to pay the principal of and interest on




21









 




all Swingline Loans then due); provided, however, that in the event that such
payment received by the Swingline Lender is required to be returned, such Lender will return to the
Swingline Lender any portion thereof previously distributed to it by the Swingline Lender.




          (e) Each Lender’s obligation to make the Loans referred to in Section 2.4(b) and to purchase
participating interests pursuant to Section 2.4(c) shall be absolute and unconditional and shall
not be affected by any circumstance, including (i) any setoff, counterclaim, recoupment, defense or
other right that such Lender or the Borrower may have against the Swingline Lender, the Borrower or
any other Person for any reason whatsoever, (ii) the occurrence or continuance of a Default or an
Event of Default or the failure to satisfy any of the other conditions specified in Section 5,
(iii) any adverse change in the condition (financial or otherwise) of the Borrower, (iv) any breach
of this Agreement or any other Credit Documents by the Borrower, any other Loan Party or any other
Lender or (v) any other circumstance, happening or event whatsoever, whether or not similar to any
of the foregoing.




          2.5. Commitment Fees, etc. (a) The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee for the period from and including the date
hereof to the last day of the Revolving Commitment Period, computed at the Commitment Fee Rate on
the average daily amount of the Available Revolving Commitment of such Lender during the period for
which payment is made, payable quarterly in arrears on each Fee Payment Date, commencing on the
first such date to occur after the date hereof.




          (b) The Borrower agrees to pay to the Administrative Agent the fees in the amounts and on the
dates as set forth in any fee agreements with the Administrative Agent and to perform any other
obligations contained therein.




          2.6. Termination or Reduction of Revolving Commitments. The Borrower shall have the
right, upon not less than three Business Days’ notice to the Administrative Agent, to terminate the
Revolving Commitments or, from time to time, to reduce the amount of the Revolving Commitments;
provided that no such termination or reduction of Revolving Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Loans and Swingline Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would exceed the Total
Revolving Commitments. Any such reduction shall be in an amount equal to $1,000,000, or a whole
multiple thereof, and shall reduce permanently the Revolving Commitments then in effect.




          2.7. Optional Prepayments. The Borrower may at any time and from time to time prepay
the Loans, in whole or in part, without premium or penalty, upon notice delivered to the
Administrative Agent no later than 11:00 A.M., New York City time, three Business Days prior
thereto, in the case of Eurodollar Loans, and no later than 11:00 A.M., New York City time, one
Business Day prior thereto, in the case of ABR Loans, which notice shall specify the date and
amount of prepayment and whether the prepayment is of Eurodollar Loans or ABR Loans; provided, that
if a Eurodollar Loan is prepaid on any day other than the last day of the Interest Period
applicable thereto, the Borrower shall also pay any amounts owing pursuant to Section 2.17. Upon
receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall be due and payable
on the date specified therein, together with (except in the case of




22









 




Revolving Loans that are ABR Loans and Swingline Loans) accrued interest to such date on the
amount prepaid. Partial prepayments of Revolving Loans shall be in an aggregate principal amount
of $1,000,000 or a whole multiple thereof. Partial prepayments of Swingline Loans shall be in an
aggregate principal amount of $100,000 or a whole multiple thereof.




          2.8. Mandatory Prepayments. (a) If on any date the Total Revolving Extensions of
Credit exceed the Maximum Outstanding Amount, within five Business Days thereafter the Borrower
shall make a prepayment of the Loans in an amount sufficient to reduce such excess (after giving
effect to any other reduction in the Total Revolving Extensions of Credit) to zero, in accordance
with the procedures set forth in Section 2.7.




          (b) Except as set forth in clause (c) below, if on any date any Group Member shall receive Net
Cash Proceeds from any Asset Sale or Recovery Event then, unless a Reinvestment Notice shall be
delivered in respect thereof, such Net Cash Proceeds shall be applied within 75 days of such date
toward the prepayment of the Loans.




          (c) If one or more Group Members shall receive aggregate Net Cash Proceeds from one or more
Dispositions, if any, of a type described in Section 7.5(g), (h) or (i) in excess of $100,000,000,
then all such Net Cash Proceeds in excess of such $100,000,000 (the “Asset Sale Excess Proceeds”)
shall be applied within 75 days after receipt thereof to prepay principal of the Loans, and the
Revolving Commitments shall be permanently reduced dollar-for-dollar by the amount of such Asset
Sale Excess Proceeds immediately upon the receipt of such proceeds.




          2.9. Conversion and Continuation Options. (a) The Borrower may elect from time to
time to convert Eurodollar Loans to ABR Loans by giving the Administrative Agent prior irrevocable
notice of such election no later than 11:00 A.M., New York City time, on the Business Day preceding
the proposed conversion date, provided that any such conversion of Eurodollar Loans may only be
made on the last day of an Interest Period with respect thereto. The Borrower may elect from time
to time to convert ABR Loans to Eurodollar Loans by giving the Administrative Agent prior
irrevocable notice of such election no later than 11:00 A.M., New York City time, on the third
Business Day preceding the proposed conversion date (which notice shall specify the length of the
initial Interest Period therefor), provided that no ABR Loan may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the Administrative Agent has
determined in its or their sole discretion not to permit such conversions. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender thereof.




          (b) Any Eurodollar Loan may be continued as such upon the expiration of the then current
Interest Period with respect thereto by the Borrower giving irrevocable notice to the
Administrative Agent, in accordance with the applicable provisions of the term “Interest Period”
set forth in Section 1.1, of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan may be continued as such when any Event of Default of a
type specified in Section 8(a), 8(c) or 8(g) or an Event of Default as a result of any
non-compliance with Section 6.1(a) or (b) has occurred and is continuing and the Administrative
Agent has determined in its or their sole discretion not to permit such continuations, and
provided, further, that if the Borrower shall fail to give any required notice as
described above in this paragraph or if such continuation is not permitted pursuant to the
preceding proviso such Loans shall be




23









 




automatically converted to ABR Loans on the last day of such then expiring Interest Period.
Upon receipt of any such notice the Administrative Agent shall promptly notify each relevant Lender
thereof.




          2.10. Limitations on Eurodollar Tranches. Notwithstanding anything to the contrary in
this Agreement, all borrowings, conversions and continuations of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to such elections so
that, (a) after giving effect thereto, the aggregate principal amount of the Eurodollar Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole multiple of $1,000,000
in excess thereof and (b) no more than ten Eurodollar Tranches shall be outstanding at any one
time.




          2.11. Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall bear interest
for each day during each Interest Period with respect thereto at a rate per annum equal to the
Eurodollar Rate determined for such day plus the Applicable Margin.




          (b) Each ABR Loan shall bear interest at a rate per annum equal to the ABR plus the Applicable
Margin:




          (c) (i) If all or a portion of the principal amount of any Loan or Reimbursement Obligation
shall not be paid when due (whether at the stated maturity, by acceleration or otherwise), all
outstanding Loans and Reimbursement Obligations (whether or not overdue) shall bear interest at a
rate per annum equal to (x) in the case of the Loans, the rate that would otherwise be applicable
thereto pursuant to the foregoing provisions of this Section plus 2% or (y) in the case of
Reimbursement Obligations, the rate applicable to ABR Loans under the Revolving Facility
plus 2%, and (ii) if all or a portion of any interest payable on any Loan or Reimbursement
Obligation or any commitment fee or other amount payable hereunder shall not be paid when due
(whether at the stated maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to the rate then applicable to ABR Loans plus 2%, in
each case, with respect to clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (as well after as before judgment).




          (d) Interest shall be payable in arrears on each Interest Payment Date, provided that
interest accruing pursuant to paragraph (c) of this Section shall be payable from time to time on
demand.




          2.12. Computation of Interest and Fees. (a) Interest and fees payable pursuant
hereto shall be calculated on the basis of a 360-day year for the actual days elapsed, except that,
with respect to ABR Loans the rate of interest on which is calculated on the basis of the Prime
Rate, the interest thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify
the Borrower and the relevant Lenders of each determination of a Eurodollar Rate. Any change in
the interest rate on a Loan resulting from a change in the ABR or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on which such change
becomes effective. The Administrative Agent shall as soon as practicable notify the Borrower and
the relevant Lenders of the effective date and the amount of each such change in interest rate.




24









 








          (b) Each determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and the Lenders in the
absence of manifest error. The Administrative Agent shall, at the request of the Borrower, deliver
to the Borrower a statement showing the quotations used by the Administrative Agent in determining
any interest rate pursuant to Section 2.11(a).




          2.13. Inability to Determine Interest Rate. If prior to the first day of any Interest
Period:




          (a) the Administrative Agent shall have determined (which determination shall be conclusive
and binding upon the Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest
Period, or




          (b) the Administrative Agent shall have received notice from the Required Lenders that the
Eurodollar Rate determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period, the Administrative Agent shall give
telecopy or telephonic notice thereof to the Borrower and the relevant Lenders as soon as
practicable thereafter. If such notice is given and during the period prior to its withdrawal (x)
any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (y) any Loans that were to have been converted on the first day of such Interest Period
to Eurodollar Loans shall be continued as ABR Loans and (z) any outstanding Eurodollar Loans shall
be converted, on the last day of the then-current Interest Period, to ABR Loans. Until such notice
has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or
continued as such, nor shall the Borrower have the right to convert Loans to Eurodollar Loans.




          2.14. Pro Rata Treatment and Payments. (a) Except as provided in Section 2.21, each
borrowing by the Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be made pro rata
according to the Revolving Percentages of the Lenders.




          (b) Except as provided in Section 2.21, each payment (including each prepayment) by the
Borrower on account of principal of and interest on the Revolving Loans shall be made pro
rata according to the respective outstanding principal amounts of the Revolving Loans then
held by the Lenders.




          (c) All payments (including prepayments) to be made by the Borrower hereunder, whether on
account of principal, interest, fees or otherwise, shall be made without setoff or counterclaim and
shall be made prior to 12:00 Noon, New York City time, on the due date thereof to the
Administrative Agent, for the account of the Lenders, at the Funding Office (or, in the case of
payments of reimbursement obligations in respect of Letters of Credit, as specified in Section
3.5), in Dollars (or, in the case of a reimbursement obligation then denominated in Pounds
Sterling, euros or Yen, the currency thereof) and in immediately available funds. The
Administrative Agent shall distribute such payments to each relevant Lender promptly upon receipt
in like funds as received, net of any amounts owing by such




25









 




Lender pursuant to Section 9.7. If any payment hereunder (other than payments on the
Eurodollar Loans) becomes due and payable on a day other than a Business Day, such payment shall be
extended to the next succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the immediately preceding
Business Day. In the case of any extension of any payment of principal pursuant to the preceding
two sentences, interest thereon shall be payable at the then applicable rate during such extension.




          (d) Unless the Administrative Agent shall have been notified in writing by any Lender prior to
a borrowing that such Lender will not make the amount that would constitute its share of such
borrowing available to the Administrative Agent, the Administrative Agent may assume that such
Lender is making such amount available to the Administrative Agent, and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If
such amount is not made available to the Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon, at a rate equal to the greater of (i) the Federal Funds Effective Rate and (ii) a
rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation, for the period until such Lender makes such amount immediately available to the
Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the absence of manifest
error. If such Lender’s share of such borrowing is not made available to the Administrative Agent
by such Lender within three Business Days after such Borrowing Date, the Administrative Agent shall
also be entitled to recover such amount with interest thereon at the rate per annum applicable to
ABR Loans, on demand, from the Borrower and the applicable Loan shall be reduced by the amount of
such payment (exclusive of interest). If the Borrower returns to the Administrative Agent any
amount with interest thereon as described in the immediately preceding sentence, such Lender shall
indemnify the Borrower for the difference, if any, between (i) the aggregate interest paid by the
Borrower to the Administrative Agent in accordance with the immediately preceding sentence less
(ii) if less, the aggregate interest which actually accrued on such amount in accordance with the
provisions hereof prior to its return to the Administrative Agent.




          (e) Unless the Administrative Agent shall have been notified in writing by the Borrower prior
to the date of any payment due to be made by the Borrower hereunder that the Borrower will not make
such payment to the Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required to, in reliance
upon such assumption, make available to the Lenders their respective pro rata
shares of a corresponding amount. If such payment is not made to the Administrative Agent by the
Borrower within three Business Days after such due date, the Administrative Agent shall be entitled
to recover, on demand, from each Lender to which any amount which was made available pursuant to
the preceding sentence, such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit the rights of the
Administrative Agent or any Lender against the Borrower.




26









 








          2.15. Requirements of Law. (a) If the adoption of or any change in any Requirement
of Law or in the interpretation or application thereof or compliance by any Lender with any request
or directive (whether or not having the force of law) from any central bank or other Governmental
Authority made subsequent to the date hereof:





     (i) shall subject any Lender to any tax of any kind whatsoever with respect to this
Agreement, any Letter of Credit, any Application or any Eurodollar Loan made by it, or
change the basis of taxation of payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.16 and changes in the rate of tax on the overall net
income of such Lender);




     (ii) shall impose, modify or hold applicable any reserve, special deposit, compulsory
loan or similar requirement against assets held by, deposits or other liabilities in or for
the account of, advances, loans or other extensions of credit by, or any other acquisition
of funds by, any office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate; or




     (iii) shall impose on such Lender any other condition; and the result of any of the
foregoing is to increase the cost to such Lender, by an amount that such Lender deems to be
material, of making, converting into, continuing or maintaining Eurodollar Loans or issuing
or participating in Letters of Credit, or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall pay such Lender, within 10 days
after its demand, any additional amounts necessary to compensate such Lender for such
increased cost or reduced amount receivable. If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the Borrower (with a
copy to the Administrative Agent) of the event by reason of which it has become so entitled.



          (b) If any Lender shall have determined that the adoption of or any change in any Requirement
of Law regarding capital adequacy or in the interpretation or application thereof or compliance by
such Lender or any corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental Authority made
subsequent to the date hereof shall have the effect of reducing the rate of return on such Lender’s
or such corporation’s capital as a consequence of its obligations hereunder or under or in respect
of any Letter of Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration such Lender’s or
such corporation’s policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time and within 10 days after submission by such Lender to the
Borrower (with a copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate such Lender or such
corporation for such reduction.




          (c) A certificate in reasonable detail setting forth the calculation of the additional
amounts, if any, payable pursuant to this Section submitted by any Lender to the Borrower (with a
copy to the Administrative Agent) shall be conclusive in the absence of manifest error.
Notwithstanding anything to the contrary in this Section, the Borrower shall not be required to
compensate a Lender pursuant to this Section for any amounts incurred more than




27









 




nine months prior to the date that such Lender notifies the Borrower of such Lender’s
intention to claim compensation therefor; provided that, if the circumstances giving rise
to such claim have a retroactive effect, then such nine-month period shall be extended to include
the period of such retroactive effect. The obligations of the Borrower pursuant to this Section
shall survive the termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.




          2.16. Taxes. (a) All payments made by the Borrower under this Agreement shall be made free
and clear of, and without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding net income taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection between the
Administrative Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein (other than any such
connection arising solely from the Administrative Agent or such Lender having executed, delivered
or performed its obligations or received a payment under, or enforced, this Agreement or any other
Credit Documents). If any such non-excluded taxes, levies, imposts, duties, charges, fees,
deductions or withholdings (“Non-Excluded Taxes”) or Other Taxes are required to be withheld from
any amounts payable to the Administrative Agent or any Lender hereunder, the amounts so payable to
the Administrative Agent or such Lender shall be increased to the extent necessary to yield to the
Administrative Agent or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the amounts specified in
this Agreement, provided, however, that the Borrower shall not be required to increase any such
amounts payable to any Lender with respect to any Non-Excluded Taxes (i) that are attributable to
such Lender’s failure to comply with the requirements of paragraph (d) or (e) of this Section or
(ii) that are United States withholding taxes imposed on amounts payable to such Lender at the time
such Lender becomes a party to this Agreement, except to the extent that such Lender’s assignor (if
any) was entitled, at the time of assignment, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph.




          (b) In addition, the Borrower shall pay any Other Taxes to the relevant Governmental Authority
in accordance with applicable law.




          (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the Borrower, as promptly as
possible thereafter the Borrower shall send to the Administrative Agent for its own account or for
the account of the relevant Lender, as the case may be, a certified copy of an original official
receipt received by the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes or Other Taxes when due to the appropriate taxing authority or fails to remit to
the Administrative Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a result of any such
failure provided such failure is not attributable to such Lender’s failure to comply with the
requirements of paragraph (d) or (e) of this Section.




28









 








          (d) Each Lender (or Transferee) that is not a “U.S. Person” as defined in Section 7701(a)(30)
of the Code (a “Non-U.S. Lender”) shall deliver to the Borrower and the Administrative
Agent (or, in the case of a Participant, to the Lender from which the related participation shall
have been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI,
or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of “portfolio interest”, a statement
substantially in the form of Exhibit H and a Form W-8BEN, or any subsequent versions thereof or
successors thereto, properly completed and duly executed by such Non-U.S. Lender claiming complete
exemption from, or a reduced rate of, U.S. federal withholding tax on all payments by the Borrower
under this Agreement and the other Credit Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or, in the case of any
Participant, on or before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. Each Non-U.S. Lender shall
promptly notify the Borrower at any time it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any other provision of
this paragraph, a Non-U.S. Lender shall not be required to deliver any form pursuant to this
paragraph that such Non-U.S. Lender is not legally able to deliver.




          (e) A Lender that is entitled to an exemption from or reduction of non-U.S. withholding tax
under the law of the jurisdiction in which the Borrower is located, or any treaty to which such
jurisdiction is a party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times prescribed by applicable
law or reasonably requested by the Borrower, such properly completed and executed documentation
prescribed by applicable law as will permit such payments to be made without withholding or at a
reduced rate, provided that such Lender is legally entitled to complete, execute and
deliver such documentation and in such Lender’s judgment such completion, execution or submission
would not materially prejudice the legal position of such Lender.




          (f) If the Administrative Agent or any Lender determines, in its sole discretion, that it has
received a refund of any Non-Excluded Taxes or Other Taxes as to which it has been indemnified by
the Borrower or with respect to which the Borrower has paid additional amounts pursuant to this
Section 2.16, it shall pay over such refund to the Borrower (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section 2.16 with respect to
the Non-Excluded Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of the Administrative Agent or such Lender and without interest (other than any interest
paid by the relevant Governmental Authority with respect to such refund); provided, that
the Borrower, upon the request of the Administrative Agent or such Lender, agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in the event the
Administrative Agent or such Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Administrative Agent or any Lender
to make available its tax returns (or any other information relating to its taxes which it deems
confidential) to the Borrower or any other Person.




29









 








          (g) The agreements in this Section shall survive the termination of this Agreement and the
payment of the Loans and all other amounts payable hereunder.




          2.17. Indemnity. The Borrower agrees to indemnify each Lender for, and to hold each
Lender harmless from, any loss or expense that such Lender may sustain or incur as a consequence of
(a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance with the provisions
of this Agreement, (b) default by the Borrower in making any prepayment of or conversion from
Eurodollar Loans after the Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (c) the making of a prepayment of Eurodollar Loans on a day that is not the last
day of an Interest Period with respect thereto. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest that would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of such Interest
Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin included therein, if any)
over (ii) the amount of interest (as reasonably determined by such Lender) that would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable period with
leading banks in the interbank eurodollar market. A certificate as to any amounts payable pursuant
to this Section submitted to the Borrower by any Lender shall be conclusive in the absence of
manifest error. This covenant shall survive the termination of this Agreement and the payment of
the Loans and all other amounts payable hereunder.




          2.18. Change of Lending Office. Each Lender agrees that, upon the occurrence of any
event giving rise to the operation of Section 2.15 or 2.16(a) with respect to such Lender, it will,
if requested by the Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; provided, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending office(s) to suffer no
economic, legal or regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrower or the rights of any Lender
pursuant to Section 2.15 or 2.16(a).




          2.19. Replacement of Lenders. The Borrower shall be permitted to replace any Lender
that (a) requests reimbursement for amounts owing pursuant to Section 2.15 or 2.16(a), (b) defaults
in its obligation to make Loans hereunder, with a replacement financial institution, or (c) does
not consent to any proposed amendment, supplement, modification, consent or waiver of any provision
of this Agreement or any other Credit Documents that requires the consent of each of the Lenders or
each of the Lenders affected thereby (so long as the consent of the Required Lenders has been
obtained); provided that (i) such replacement does not conflict with any Requirement of Law, (ii)
no Event of Default shall have occurred and be continuing at the time of such replacement, (iii)
prior to any such replacement, such Lender shall have taken no action under Section 2.18 so as to
eliminate the continued need for payment of amounts owing pursuant to Section 2.15 or 2.16(a), (iv)
the replacement financial institution shall purchase, at par, all Loans and other amounts owing to
such replaced Lender on or prior to the date of replacement,




30









 







(v) the Borrower shall be liable to such replaced Lender under Section 2.16 if any Eurodollar
Loan owing to such replaced Lender shall be purchased other than on the last day of the Interest
Period relating thereto, (vi) the replacement financial institution shall be reasonably
satisfactory to the Administrative Agent, (vii) the replaced Lender shall be obligated to make such
replacement in accordance with the provisions of Section 10.6 (provided that the Borrower shall be
obligated to pay the registration and processing fee referred to therein), (viii) until such time
as such replacement shall be consummated, the Borrower shall pay all additional amounts (if any)
required pursuant to Section 2.15 or 2.16(a), as the case may be, and (ix) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the Administrative Agent or any
other Lender shall have against the replaced Lender.




          2.20. Revolving Credit Commitment Increases. (a) In the event that the Borrower
wishes to increase the Total Revolving Commitments at any time or from time to time after the
Closing Date, it shall notify the Administrative Agent in writing of the amount (the “Revolving
Commitment Increase Amount”) of such proposed increase (such notice, a “Revolving
Commitment Increase Notice”); provided that the conditions in Section 5.2 are satisfied
as of the date of any such increase. Each Revolving Commitment Increase Notice shall specify which
Lenders and/or other banks, financial institutions or other entities (each of which shall be
subject to the consent of the Administrative Agent, such consent not to be unreasonably withheld)
the Borrower desires to provide such Revolving Commitment Increase Amount.




          (b) Any additional bank, financial institution or other entity which the Borrower selects to
offer participation in any increased Total Revolving Commitments and which agrees to become a party
to this Agreement and provide a Revolving Commitment shall execute a New Lender Supplement with the
Borrower and the Administrative Agent, substantially in the form of Exhibit J-1, whereupon such
bank, financial institution or other entity (herein called a “New Lender”) shall become a
Lender for all purposes and to the same extent as if originally a party hereto and shall be bound
by and entitled to the benefits of this Agreement, provided that the Revolving Commitment of any
such New Lender shall be in an amount not less than $5,000,000.




          (c) Any Lender or New Lender which agrees to increase its Revolving Commitment shall, in each
case, execute a Commitment Increase Supplement with the Borrower and the Administrative Agent,
substantially in the form of Exhibit J-2, whereupon such Lender or New Lender shall be bound by and
entitled to the benefits of this Agreement with respect to the full amount of its Revolving
Commitment as so increased or new Revolving Commitment, as the case may be, which shall in any
event be on the terms, and subject to the conditions, of the other Revolving Commitments.




          (d) On any Increase Effective Date pursuant to Section 2.20, (i) each bank, financial
institution or other entity that is a New Lender pursuant to Section 2.20(b) or any Lender which
has increased its Revolving Commitment pursuant to Section 2.20(c) shall make available to the
Administrative Agent such amounts in immediately available funds as the Administrative Agent shall
determine, for the benefit of the other relevant Lenders, as being required in order to cause,
after giving effect to such increase and the use of such amounts to make payments to such other
relevant Lenders, each Lender’s portion of the outstanding Revolving Loans of all the Lenders to be
equal to its Revolving Percentage of such outstanding




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Revolving Loans, (ii) the Borrower shall be deemed to have repaid and reborrowed all
outstanding Revolving Loans as of the date of any increase in the Revolving Commitments (with such
reborrowing to consist of the Types of Loans, with related Interest Periods if applicable,
specified in a notice delivered by the Borrower in accordance with the requirements of Section 2.2)
and (iii) risk participations in outstanding Letters of Credit shall be adjusted to reflect revised
Revolving Commitments. The deemed payments made pursuant to clause (ii) of the immediately
preceding sentence in respect of each Eurodollar Loan shall be subject to indemnification by the
Borrower pursuant to the provisions of Section 2.17 if the deemed payment occurs other than on the
last day of the related Interest Periods.




          (e) Notwithstanding anything to the contrary in this Section 2.20(e), (i) in no event shall
any transaction effected pursuant to this Section 2.20(e) cause the sum of Total Revolving
Commitments to exceed $125,000,000, (ii) no Lender shall have any obligation to increase its
Revolving Credit Commitment unless it agrees to do so in its sole discretion and (iii) the upfront
fees and other equivalent amounts paid by or on behalf of the Borrower to the New Lenders or
Lenders in respect of any Revolving Commitment Increase Amount provided by such New Lenders or
Lenders (calculated on a basis that amortizes such upfront fees and other equivalent amounts over
the remaining term of the Revolving Commitments) shall not be greater than the upfront fees and
other equivalent amounts paid in respect of the original Revolving Commitments (as amortized over
the original term of the Revolving Commitments).




          (f) The Administrative Agent shall receive on or prior to each Increase Effective Date, for
the benefit of the Lenders, (i) a legal opinion of counsel to the Borrower in the form attached
hereto as Exhibit G-1 and (ii) certified copies of resolutions of the Borrower authorizing such
Revolving Commitment Increase Amount.




          2.21. Optional Termination by a Lender. Notwithstanding any other provision hereof to
the contrary, if the Parent Guarantee is not executed and delivered to the Administrative Agent on
or prior to January 14, 2009, with written notice thereof to be provided by the Borrower to the
Administrative Agent and each Lender pursuant to Section 6.2(g), any Lender may terminate all or a
portion of its Revolving Commitment by giving written notice of such termination to the
Administrative Agent within 10 Business Days of such date. The Administrative Agent shall promptly
notify the Borrower and each other Lender of its receipt of any such notice. Any such termination
shall be effective as of the date 30 Business Days after January 14, 2009. Prior to the
effectiveness of any such termination of the Revolving Commitment or portion thereof of a Lender,
the Borrower shall be permitted to replace such Lender with a replacement financial institution
(which may be another Lender) that will not terminate such Revolving Commitment or portion thereof,
provided that the requirements of the proviso to Section 2.19 (to the extent relevant) are
satisfied with respect to such replacement (as though such requirements applied to such
replacement). Upon any termination of the Revolving Commitment or portion thereof (such subsequent
clauses (a), (b), (c) and (d) to reflect such relevant portion) of any Lender becoming effective
pursuant to this Section, (a) the Loans owing to such Lender shall become due and payable, together
with any accrued interest thereon and any other amounts then accrued for the benefit of or owing to
such Lender hereunder (including accrued commitment fees and amounts payable under Section 2.17),
(b) the Total Commitments, the Revolving Percentages and the Maximum Outstanding Amount shall be
adjusted to reflect the Revolving Commitments of the remaining Lenders, (c) any Swingline Loans
then




32









 





outstanding shall become due and payable, together with accrued interest thereon, and (d) to
the extent that, after giving effect to the adjustments referred to in clause (b) above and any
concurrent prepayments of the Revolving Loans, the L/C Obligations, when added to the aggregate
principal amount of the continuing Revolving Loans, would exceed the Maximum Outstanding Amount,
the Borrower shall cash collateralize such excess in a manner reasonably satisfactory to the
Issuing Lender.




SECTION 3. LETTERS OF CREDIT




          3.1. L/C Commitment. (a) Subject to the terms and conditions hereof, the Issuing
Lender, in reliance on the agreements of the other Lenders set forth in Section 3.4(a), agrees to
issue letters of credit (“Letters of Credit”) for the account of the Borrower on any
Business Day during the Revolving Commitment Period in such form as may be approved from time to
time by the Issuing Lender; provided that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C Obligations would
exceed the L/C Commitment or (ii) the L/C Obligations, when added to the aggregate principal amount
of the Revolving Loans and Swingline Loans then outstanding, would exceed the Maximum Outstanding
Amount. Each Letter of Credit shall (i) be denominated in Dollars, Pounds Sterling, euros or Yen
and (ii) expire no later than the earlier of (x) the first anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving Termination Date, provided
that any Letter of Credit with a one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date referred to in clause (y) above).




          (b) The Issuing Lender shall not at any time be obligated to issue any Letter of Credit if
such issuance would conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any applicable Requirement of Law.




          (c) Letters of credit issued and outstanding on the Closing Date under the Amended and
Restated Letter of Credit Reimbursement Agreement, dated as of November 21, 2005, between the
Borrower and JPMorgan Chase Bank, N.A. (the “Existing Reimbursement Agreement”) shall
become Letters of Credit issued hereunder for the account of the Borrower on the Closing Date.




          3.2 Procedure for Issuance of Letter of Credit. The Borrower may from time to time
request that the Issuing Lender issue a Letter of Credit by delivering to the Issuing Lender at its
address for notices specified herein an Application therefor, completed to the satisfaction of the
Issuing Lender, and such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender will process such
Application and the certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall promptly issue the
Letter of Credit requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than three Business Days after its receipt of the Application therefor
and all such other certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be
agreed to by the Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of such
Letter of Credit to the Borrower promptly following the




33









 




issuance thereof. The Issuing Lender shall promptly furnish to the Administrative Agent,
which shall in turn promptly furnish to the Lenders, notice of the issuance of each Letter of
Credit (including the amount thereof).



          3.3

Fees and Other Charges. (a) The Borrower will pay a
fee on all outstanding Letters of Credit at a per annum rate equal to the Applicable Margin then in
effect with respect to Eurodollar Loans under the Revolving Facility, shared ratably among the
Lenders and payable quarterly in arrears on each Fee Payment Date after the issuance date. In
addition, the Borrower shall pay to the Issuing Lender for its own account a fronting fee as agreed
with the Issuing Lender on the undrawn and unexpired amount of each Letter of Credit, payable
quarterly in arrears on each Fee Payment Date after the issuance
date.


          (b)
In addition to the foregoing
fees, the Borrower shall pay or reimburse the Issuing Lender for such normal and customary costs
and expenses as are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.




          3.4 L/C Participations. (a) The Issuing Lender irrevocably agrees to grant and
hereby grants to each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and
purchases from the Issuing Lender, on the terms and conditions set forth below, for such L/C
Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving
Percentage in the Issuing Lender’s obligations and rights under and in respect of each Letter of
Credit and the amount of each draft paid by the Issuing Lender thereunder. Each L/C Participant
agrees with the Issuing Lender that, if a draft is paid under any Letter of Credit for which the
Issuing Lender is not reimbursed in full by the Borrower in accordance with the terms of this
Agreement, such L/C Participant shall pay to the Issuing Lender upon demand (which demand, in the
case of any demand made in respect of any draft under a Letter of Credit denominated in a currency
other than Dollars, shall not be made prior to the date that the amount of such draft has been
converted into Dollars in accordance with Section 3.5) at the Issuing Lender’s address for notices
specified herein an amount equal to such L/C Participant’s Revolving Percentage of the amount of
such draft, or any part thereof, that is not so reimbursed. Each L/C Participant’s obligation to
pay such amount shall be absolute and unconditional and shall not be affected by any circumstance,
including (i) any setoff, counterclaim, recoupment, defense or other right that such L/C
Participant may have against the Issuing Lender, the Borrower or any other Person for any reason
whatsoever, (ii) the occurrence or continuance of a Default or an Event of Default or the failure
to satisfy any of the other conditions specified in Section 5, (iii) any adverse change in the
condition (financial or otherwise) of the Borrower, (iv) any breach of this Agreement or any other
Credit Documents by the Borrower, any other Loan Party or any other L/C Participant or (v) any
other circumstance, happening or event whatsoever, whether or not similar to any of the
foregoing.


          (b)
If any amount required to be paid by any L/C Participant to the Issuing Lender pursuant
to Section 3.4(a) in respect of any unreimbursed portion of any payment made by the Issuing Lender
under any Letter of Credit is paid to the Issuing Lender within three Business Days after the date
such payment is due, such L/C Participant shall pay to the Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds Effective Rate during
the period from and including the date such payment is required to the date on which such payment
is immediately available to the Issuing Lender, times (iii) a fraction the numerator of which is
the number of days that elapse during such period and the denominator of which is 360. If any such
amount required to be paid by any L/C Participant pursuant to Section 3.4(a) is not made available
to the Issuing Lender by such L/C Participant within three Business Days after the date such
payment




34









 




is due, the Issuing Lender shall be entitled to recover from such L/C Participant, on demand,
such amount with interest thereon calculated from such due date at the rate per annum applicable to
ABR Loans under the Revolving Facility. A certificate of the Issuing Lender submitted to any L/C
Participant with respect to any amounts owing under this Section shall be conclusive in the absence
of manifest error.




          (c) Whenever, at any time after the Issuing Lender has made payment under any Letter of Credit
and has received from any L/C Participant its pro rata share of such payment in
accordance with Section 3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Borrower or otherwise, including proceeds of collateral applied
thereto by the Issuing Lender), or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro rata share thereof;
provided, however, that in the event that any such payment received by the Issuing
Lender shall be required to be returned by the Issuing Lender, such L/C Participant shall return to
the Issuing Lender the portion thereof previously distributed by the Issuing Lender to it.




          3.5. Reimbursement Obligation of the Borrower. If any draft is paid under any Letter
of Credit, the Borrower shall reimburse the Issuing Lender for the amount of (a) the draft so paid
and (b) any taxes, fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment, not later than 12:00 Noon, New York City time (or such other relevant
local time as is specified by the Issuing Lender in respect of such Letter of Credit), on (i) the
Business Day next succeeding the Business Day that the Borrower receives notice of such draft, if
such notice is received on such day prior to 10:00 A.M., New York City time (or such other relevant
local time), or (ii) if clause (i) above does not apply, the second Business Day immediately
following the day that the Borrower receives such notice. Each such payment shall be made to the
Issuing Lender at the address as specified by it from time to time in respect of such Letter of
Credit in the currency in which such draft is payable (except that, in the case of any Letter of
Credit denominated in any currency other than Dollars, upon notice by the Issuing Lender to the
Borrower, such payment shall be made in Dollars from and after the date on which the amount of such
payment shall have been converted into Dollars at the Spot Rate of Exchange on such date of
conversion, which date of conversion may be any Business Day after the date on which such payment
is due) and in immediately available funds. Interest shall be payable on any such amounts from the
date on which the relevant draft is paid until payment in full at the rate set forth in (x) until
the Business Day next succeeding the date of the relevant notice, Section 2.11(b) and (y)
thereafter, Section 2.11(c); provided that if any such amount is denominated in a currency
other than Dollars for any period, such interest shall be payable for such period at the rate
charged by the Issuing Lender for reimbursement of overdue obligations in such currency owing by
account parties with similar credit profiles to that of the Borrower.




          3.6. Obligations Absolute. The Borrower’s obligations under this Section 3 shall be
absolute and unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment that the Borrower may have or have had against the Issuing
Lender, any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees with
the Issuing Lender that the Issuing Lender shall not be responsible for, and the Borrower’s
Reimbursement Obligations under Section 3.5 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even though such documents
shall in fact prove to be invalid, fraudulent or forged, or any dispute between or




35









 




among the Borrower and any beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit, except for errors
or omissions found by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence, intentional breach or willful misconduct of the Issuing
Lender. The Borrower agrees that any action taken or omitted by the Issuing Lender under or in
connection with any Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence, or intentional breach or willful misconduct, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.




          3.7. Letter of Credit Payments. If any draft shall be presented for payment under any
Letter of Credit, the Issuing Lender shall promptly notify the Borrower of the date and amount
thereof. The responsibility of the Issuing Lender to the Borrower in connection with any draft
presented for payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with such presentment
are substantially in conformity with such Letter of Credit.




          3.8. Applications. To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Section 3, the provisions of this
Section 3 shall apply.




SECTION 4. REPRESENTATIONS AND WARRANTIES




          To induce the Administrative Agent and the Lenders to enter into this Agreement and to make
the Loans and issue or participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Administrative Agent and each Lender that:




          4.1. Financial Condition. (a) The audited consolidated balance sheets of Loral and
its Subsidiaries as at December 31, 2006 and December 31, 2007, and the related consolidated
statements of income and of cash flows for the fiscal years ended on such dates, reported on by and
accompanied by an unqualified report from Deloitte & Touche LLP, present fairly the consolidated
financial condition of Loral as at such date, and the consolidated results of its operations and
its consolidated cash flows for the respective fiscal years then ended. The audited consolidated
balance sheets of the Borrower and its Subsidiaries as at December 31, 2006 and December 31, 2007,
and the related consolidated statements of income and of cash flows for the fiscal years ended on
such dates, reported on by and accompanied by an unqualified report from Deloitte & Touche LLP,
present fairly the consolidated financial condition of the Borrower as at such date, and the
consolidated results of its operations and its consolidated cash flows for the respective fiscal
years then ended. The unaudited consolidated balance sheet of Loral and its Subsidiaries as at
March 31, 2008, and the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date, present fairly the consolidated financial condition of Loral
as at such date, and the consolidated results of its operations and its consolidated cash flows for
the three-month period then ended (subject to




36









 




normal year-end audit adjustments). All of the foregoing financial statements, including the
related schedules and notes thereto where required, have been prepared in accordance with GAAP
applied consistently throughout the periods involved (except as disclosed therein). The unaudited
consolidated balance sheet of the Borrower and its Subsidiaries as at March 31, 2008, and the
related unaudited consolidated statements of income and cash flows for the three-month period ended
on such date, present fairly the consolidated financial condition of the Borrower as at such date,
and the consolidated results of its operations and its consolidated cash flows for the three-month
period then ended, subject to normal year-end audit adjustment and before recognition of the
effects of income taxes. During the period from December 31, 2007 to and including the date hereof
there has been no Disposition by any Group Member of any material part of its business or property
except as permitted by this Agreement.


          4.2 No Change. Since December 31, 2007, there has been
no development or event that has had or could reasonably be expected to have a Material Adverse
Effect.




          4.3. Existence; Compliance with Law. Each Group Member (a) is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its organization, (b) has the
power and authority, and the legal right, to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is currently engaged, (c) is duly
qualified as a foreign corporation or other organization and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the conduct of its
business requires such qualification except where failure to so qualify could not reasonably be
expected to have a Material Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.




          4.4. Power; Authorization; Enforceable Obligations. Each Loan Party has the power and
authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a
party and, in the case of the Borrower, to obtain extensions of credit hereunder. Each Loan Party
has taken all necessary organizational action to authorize the execution, delivery and performance
of the Credit Documents to which it is a party and, in the case of the Borrower, to authorize the
extensions of credit on the terms and conditions of this Agreement. No consent or authorization
of, filing with, notice to or other act by or in respect of, any Governmental Authority or any
other Person is required in connection with the extensions of credit hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement or any of the Credit
Documents, except (i) consents, authorizations, filings and notices described in Schedule 4.4,
which consents, authorizations, filings and notices have been obtained or made and are in full
force and effect and (ii) the filings referred to in Section 4.19. The Credit Documents has been
duly executed and delivered on behalf of each Loan Party party thereto. This Agreement
constitutes, and other Credit Documents upon execution will constitute, a legal, valid and binding
obligation of each Loan Party party thereto, enforceable against each such Loan Party in accordance
with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally
and by general equitable principles (whether enforcement is sought by proceedings in equity or at
law).

          4.5
No Legal Bar. The execution, delivery and performance of this Agreement and the other
Credit Documents, the issuance of Letters of Credit, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or any effective Contractual Obligation of
any Group Member and will not




37









 





result in, or require, the creation or imposition of any Lien on any of their respective
properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents).

          4.6
Litigation. No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against any Group Member or against any of their respective
properties or revenues (a) with respect to any of the Credit Documents or any of the transactions
contemplated hereby or thereby, or (b) that could reasonably be expected to have a Material Adverse
Effect.




          4.7. No Default. No Group Member has received a written notice of default under or
with respect to any of its Contractual Obligations from the counterparty thereto that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.


          4.8. Ownership of Property; Liens. Each Group Member has title in
fee simple to, or a valid leasehold interest in, all its real property, and good title to, or a
valid leasehold interest in, all its other property, and none of such property is subject to any
Lien except as permitted by Section 7.3.

          4.9
Intellectual Property. Each Group Member owns, or
is licensed to use, all Intellectual Property necessary for the conduct of its business as
currently conducted except for those which the failure to own or license could not be reasonably
expected to have a Material Adverse Effect. No claim has been asserted and is pending by any
Person challenging or questioning the use, ownership, validity or enforceability of any
Intellectual Property, nor does the Borrower know of any valid basis for any such claim except for
any such claim which could not be reasonably expected to have a Material Adverse Effect. The use
of Intellectual Property by each Group Member does not infringe on the rights of any Person except
for such claims and infringements that, in aggregate, do not have a Material Adverse Effect.




          4.10. Taxes. Each Group Member has filed or caused to be filed all Federal, state and
other material tax returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its property and all other
taxes, fees or other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of the relevant Group Member); no tax Lien has been filed, and, to the
knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other
charge.




          4.11 Federal Regulations. No part of the proceeds of any Loans, and no other
extensions of credit hereunder, will be used (a) for “buying” or “carrying” any “margin stock”
within the respective meanings of each of the quoted terms under Regulation U as now and from time
to time hereafter in effect for any purpose that violates the provisions of the Regulations of the
Board or (b) for any purpose that violates the provisions of the Regulations of the Board. If
requested by any Lender or the Administrative Agent, the Borrower will furnish to the
Administrative Agent and each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1, as applicable, referred to in Regulation U.

          4.12
Labor
Matters. Except as, in the aggregate, could not reasonably be expected to have a Material
Adverse Effect: (a) there are no strikes or other labor disputes against any Group Member pending
or, to the knowledge of the Borrower, threatened; (b) hours worked by and payment made to employees
of each Group Member have not been in violation of the Fair Labor




38









 





Standards Act or any other applicable Requirement of Law dealing with such matters; and (c)
all payments due from any Group Member on account of employee health and welfare insurance have
been paid or accrued as a liability on the books of the relevant Group Member.

          4.13 ERISA.
Except as set forth on Schedule 4.13, neither a Reportable Event nor a failure to satisfy the
“minimum funding standards”(within the meaning of Section 412 of the Code or Section 302 of ERISA)
has occurred during the five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan, and each Plan (other than a Multiemployer
Plan) has complied in all material respects with the applicable provisions of ERISA and the Code.
No termination of a Single Employer Plan has occurred, and no Lien in favor of the PBGC or a Single
Employer Plan has arisen, during such five-year period. As of December 31, 2007, the present value
of all accrued benefits under each Single Employer Plan, based on the actuarial report prepared by
the Plan’s actuary with respect to such Plan for purposes of financial accounting standards (FAS
87), exceeded the value of the assets of such Plan allocable to such accrued benefits by
approximately $69,300,000, and since such date there has been no material adverse change in the
accrued benefit obligations or the fair market value of the assets of such Plan other than changes
attributable to general fluctuations affecting U.S. or global financial markets. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan that has resulted or could reasonably be expected to result in a material
liability under ERISA, and neither the Borrower nor any Commonly Controlled Entity would become
subject to any material liability under ERISA if the Borrower or any such Commonly Controlled
Entity were to withdraw completely from all Multiemployer Plans as of the valuation date most
closely preceding the date on which this representation is made or deemed made. No such
Multiemployer Plan is in Reorganization or Insolvent.

          4.14 Investment Company Act; Other
Regulations. No Loan Party is an “investment company”, or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940, as amended. No
Loan Party is subject to regulation under any Requirement of Law (other than Regulation X of the
Board) that limits its ability to incur Indebtedness.

          4.15 Subsidiaries. Except as disclosed to
the Administrative Agent by the Borrower in writing from time to time after the Closing Date, (a)
Schedule 4.15 sets forth the name and jurisdiction of incorporation of each Subsidiary, whether
such Subsidiary is an Immaterial Subsidiary and, as to each such Subsidiary, the percentage of each
class of Capital Stock owned by any Loan Party and (b) there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than stock options
granted to employees or directors and directors’ qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary, except as created by the Credit Documents.

          4.16 Use
of Proceeds. The proceeds of the Loans, and the Letters of Credit, shall be used to finance
the working capital needs and for general corporate purposes of the Borrower and its
Subsidiaries.

          4.17 Environmental Matters. Except to the extent that the facts and circumstances
giving rise to any failure to be so true and correct could not reasonably be expected to have a
Material Adverse Effect: 

          (a) the facilities and properties owned, leased or operated by any Group Member
(the “Properties”) do not contain, and have not previously contained, any Materials of
Environmental Concern in amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could give rise to liability
under, any Environmental Law;




          (b) no Group Member has received or is aware of any notice of violation, alleged violation,
non-compliance, liability or potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of the Properties or the business




39









 




operated by any Group Member (the “Business”), nor does the Borrower have knowledge or
reason to believe that any such notice will be received or is being threatened;




          (c) Materials of Environmental Concern have not been transported or disposed of from the
Properties in violation of, or in a manner or to a location that could give rise to liability
under, any Environmental Law, nor have any Materials of Environmental Concern been generated,
treated, stored or disposed of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable Environmental Law;




          (d) no judicial proceeding or governmental or administrative action is pending or, to the
knowledge of the Borrower, threatened, under any Environmental Law to which any Group Member is or
will be named as a party with respect to the Properties or the Business, nor are there any consent
decrees or other decrees, consent orders, administrative orders or other orders, or other
administrative or judicial requirements outstanding under any Environmental Law with respect to the
Properties or the Business;




          (e) there has been no release or threat of release of Materials of Environmental Concern at or
from the Properties, or arising from or related to the operations of any Group Member in connection
with the Properties or otherwise in connection with the Business, in violation of or in amounts or
in a manner that could give rise to liability under Environmental Laws;




          (f) the Properties and all operations at the Properties are in compliance, and have in the
last five years been in compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about the Properties or violation of any Environmental Law with respect
to the Properties or the Business; and




          (g) no Group Member has assumed any liability of any other Person under Environmental Laws.




          4.18 Accuracy of Information, etc. No statement or information contained in this
Agreement, any Credit Documents, the Confidential Information Memorandum or any other document,
certificate or statement furnished by or on behalf of any Loan Party to the Administrative Agent or
the Lenders, or any of them, for use in connection with the transactions contemplated by this
Agreement or the other Credit Documents, when taken as a whole, contained as of the date such
statement, information, document or certificate was so furnished (or, in the case of the
Confidential Information Memorandum, as of the date of this Agreement), any untrue statement of a
material fact or omitted to state a material fact necessary to make the statements contained herein
or therein not misleading. The projections contained in the materials referenced above are based
upon good faith estimates and assumptions believed by management of the Borrower to be reasonable
at the time made, it being recognized by the Lenders that such financial information as it relates
to future events is not to be viewed as fact and that actual results during the period or periods
covered by such financial information may differ from the projected results set forth therein by a
material amount. As of the Closing Date, there is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been expressly disclosed
herein, in the other Credit Documents, in the Confidential Information Memorandum or in any other
documents, certificates and statements furnished to the




40









 




Administrative Agent and the Lenders for use in connection with the transactions contemplated
hereby and by the other Credit Documents.

          4.19
Security Documents. (a) The Guarantee and
Collateral Agreement is effective to create in favor of the Administrative Agent, for the benefit
of the Lenders, a legal, valid and enforceable security interest in the Collateral described
therein and proceeds thereof. In the case of the Pledged Stock described in the Guarantee and
Collateral Agreement, when stock certificates representing such Pledged Stock are delivered to the
Administrative Agent together with undated stock powers, in blank, executed and delivered by a duly
authorized officer of the relevant Group Member, and in the case of the other Collateral described
in the Guarantee and Collateral Agreement in which a security interest can be perfected by filing
under the Uniform Commercial Code, when financing statements and other filings specified on
Schedule 4.19(a) in appropriate form are filed in the offices specified on Schedule 4.19(a), the
Guarantee and Collateral Agreement shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and Collateral Agreement), in
each case prior and superior in right to any other Person (except, in the case of Collateral other
than Pledged Stock, Liens permitted by Section 7.3).

          (b)
Each of the Mortgages is effective to create in
favor of the Administrative Agent, for the benefit of the Lenders, a legal, valid and enforceable
Lien on the Mortgaged Properties described therein and proceeds thereof, and when the Mortgages are
filed in the offices specified on Schedule 4.19(b), each such Mortgage shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of the Loan Parties in
the Mortgaged Properties and the proceeds thereof, as security for the Obligations (as defined in
the relevant Mortgage), in each case prior and superior in right to any other Person. Schedule
1.1B lists, as of the Closing Date, each parcel of owned real property and each leasehold interest
in real property located in the United States and held by the Borrower or any of its Subsidiaries.





          4.20 Solvency. As of the Closing Date, the Borrower is, and after giving effect to
the incurrence of all Indebtedness and obligations being incurred in connection herewith on the
Closing Date will be Solvent.


          4.21
Regulation H. Except as disclosed in the standard flood
hazard determination prepared by LandAmerica lender Services on June 27, 2008, no Mortgage
encumbers improved real property that is located in an area that has been identified by the
Secretary of Housing and Urban Development as an area having special flood hazards and in which
flood insurance has been made available under the National Flood Insurance Act of 1968.


          4.22
Senior
Indebtedness. The principal, interest and fees payable hereunder will constitute senior
indebtedness (or the equivalent) of the Borrower under any subordinated debt agreement or indenture
entered into by the Borrower.



SECTION 5. CONDITIONS PRECEDENT




          5.1 Conditions to Initial Extension of Credit. The agreement of each Lender to make
the initial extension of credit requested to be made by it is subject to the satisfaction, prior to
or concurrently with the making of such extension of credit on the Closing Date, of the following
conditions precedent:

          (a)
Credit Agreement; Guarantee and Collateral Agreement; Holdings Pledge
Agreement. The Administrative Agent shall have received (i) this Agreement, executed and
delivered by the Administrative Agent, the Borrower and each Person listed on Schedule 1.1A, (ii)
the Guarantee and Collateral Agreement, executed and delivered by the Borrower and each Guarantor,
(iii) an Acknowledgement and Consent in the form attached to the Guarantee and Collateral
Agreement, executed and delivered by each Issuer (as defined therein), if any, that is not a Loan
Party and (iv) the Holdings Pledge Agreement, executed and delivered




41









 




by Holdings.





     (b) Transactions. The following transactions shall have been consummated, in
each case on terms and conditions reasonably satisfactory to the Lenders:




     (i) the Borrower shall have received a new equity contribution in cash of not
less than $50,000,000 from Holdings subsequent to August 15, 2008, on terms and
subject to conditions reasonably satisfactory to the Administrative Agent; and




     (ii) the Administrative Agent shall have received satisfactory evidence that
(i) the commitments under the Existing Reimbursement Agreement and all other
revolving credit facilities of the Borrower shall have been terminated and all
amounts thereunder shall have been paid in full (it being understood that letters of
credit issued and outstanding on the Closing Date under the Existing Reimbursement
Agreement shall have become Letters of Credit hereunder) and (ii) satisfactory
arrangements shall have been made for the termination of all Liens granted in
connection therewith.




     (c) Financial Statements. The Lenders shall have received (i) audited
consolidated financial statements of Loral and its Subsidiaries for the December 31, 2006
and December 31, 2007 fiscal years, (ii) audited consolidated financial statements of the
Borrower and its Subsidiaries for the December 31, 2006 and December 31, 2007 fiscal years,
(iii) unaudited interim consolidated financial statements of Loral and its Subsidiaries for
the fiscal quarters ended March 31, 2008 and June 30, 2008; and (iv) preliminary unaudited
interim consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal quarters ended March 31, 2008 and June 30, 2008 (excluding any notes with respect
thereto).




     (d) Approvals. All governmental and third party approvals necessary in
connection with the continuing operations of the Group Members and the transactions
contemplated hereby shall have been obtained and be in full force and effect.




     (e) Lien Searches. The Administrative Agent shall have received the results of
a recent lien search in each of the jurisdictions where assets of the Borrower and its
Subsidiaries are located, and such search shall reveal no material liens on any of the
assets of the Borrower or its Subsidiaries except for liens permitted by Section 7.3 or
discharged on or prior to the Closing Date pursuant to documentation reasonably satisfactory
to the Administrative Agent.




     (f) Fees. The Lenders and the Administrative Agent shall have received all
fees required to be paid, and all expenses for which invoices have been presented (including
the reasonable fees and expenses of legal counsel), on or before the Closing Date. All such
amounts will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.




     (g) Closing Certificate; Certified Certificate of Incorporation; Good Standing
Certificates. The Administrative Agent shall have received (i) a certificate of each
Loan



42









 







Party, dated the Closing Date, substantially in the form of Exhibit D, with appropriate
insertions and attachments, including the certificate of incorporation of each Loan Party
that is a corporation certified by the relevant authority of the jurisdiction of
organization of such Loan Party, and (ii) a long form good standing certificate for each
Loan Party from its jurisdiction of organization.




     (h) Legal Opinions. The Administrative Agent shall have received the following
executed legal opinions:




     (i) the legal opinion of Willkie Farr & Gallagher LLP, counsel to the Borrower
and its Subsidiaries, substantially in the form of Exhibit G-1;




     (ii) the legal opinion of Julie Bannerman, general counsel of the Borrower and
its Subsidiaries, substantially in the form of Exhibit G-2; and




     (iii) the legal opinion of Heller Ehrman LLP, local counsel of the Borrower in
California and of such other special and local counsel as may be required by the
Administrative Agent, substantially in the form of Exhibit G-3.




Each such legal opinion shall cover such other matters incident to the transactions
contemplated by this Agreement as the Administrative Agent may reasonably require.




     (i) Pledged Stock; Stock Powers; Pledged Notes. The Administrative Agent shall
have received (i) the certificates representing the shares of Capital Stock pledged pursuant
to the Guarantee and Collateral Agreement and the Holdings Pledge Agreement, together with
an undated stock power for each such certificate executed in blank by a duly authorized
officer of the pledgor thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Guarantee and Collateral Agreement endorsed (without
recourse) in blank (or accompanied by an executed transfer form in blank) by the pledgor
thereof.




     (j) Filings, Registrations and Recordings. Each document (including any
Uniform Commercial Code financing statement) required by the Security Documents or under law
or reasonably requested by the Administrative Agent to be filed, registered or recorded in
order to create in favor of the Administrative Agent, for the benefit of the Lenders, a
perfected Lien on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 7.3), shall be in
proper form for filing, registration or recordation.




     (k) Mortgages, etc. (i) The Administrative Agent shall have received a
Mortgage with respect to each Mortgaged Property, executed and delivered by a duly
authorized officer of each party thereto.




     (ii) The Administrative Agent shall have received, and the title insurance
company issuing the policy referred to in clause (iii) below (the “Title
Insurance Company”) shall have received, maps or plats of an as-built survey of
the sites of the Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner reasonably satisfactory to them, dated a



43









 







date reasonably satisfactory to the Administrative Agent and the Title
Insurance Company by an independent professional licensed land surveyor reasonably
satisfactory to the Administrative Agent and the Title Insurance Company.




     (iii) The Administrative Agent shall have received in respect of each Mortgaged
Property a mortgagee’s title insurance policy (or policies) or marked up
unconditional binder for such insurance, in each case in form and substance
reasonably satisfactory to the Administrative Agent. The Administrative Agent shall
have received evidence reasonably satisfactory to it that all premiums in respect of
each such policy, all charges for mortgage recording tax, and all related expenses,
if any, have been paid.




     (iv) If requested by the Administrative Agent, the Administrative Agent shall
have received (A) except to the extent a Mortgaged Property is not in a special
flood zone, a policy of flood insurance, if one meeting the following requirements
is available on commercially reasonable terms, that (1) covers any parcel of
improved real property that is encumbered by any Mortgage (2) is written in an
amount not less than the outstanding principal amount of the indebtedness secured by
such Mortgage that is reasonably allocable to such real property or the maximum
limit of coverage made available with respect to the particular type of property
under the National Flood Insurance Act of 1968, whichever is less, and (3) has a
term ending not later than the maturity of the Indebtedness secured by such
Mortgage, (B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board only to the extent flood
insurance is required to be obtained and the Borrower receives a copy of such notice
and (C) a satisfactory policy of natural disaster insurance that (1) covers each
parcel of improved real property that is encumbered by any Mortgage and (2)
includes, but is not limited to, coverage for property damage resulting from
earthquakes and earthquake-related events.




     (v) The Administrative Agent shall have received a copy of all recorded
documents referred to, or listed as exceptions to title in, the title policy or
policies referred to in clause (iii) above and a copy of all other material
documents affecting the Mortgaged Properties.




     (l) Property Appraisal. The Administrative Agent shall have received
appraisals of the Mortgaged Property and machinery and equipment of the Borrower used in
its manufacturing operations.




     (m) Solvency Certificate. The Administrative Agent shall have received a
reasonably satisfactory solvency certificate from the chief financial officer of the
Borrower.




     (n) Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.2(b) of the Guarantee and Collateral
Agreement.




44











 





For the purpose of determining compliance with the conditions specified in this Section 5.1, each
Lender that has signed this Agreement shall be deemed to have accepted, and to be satisfied with,
each document or other matter required under this Section 5.1 unless the Administrative Agent shall
have received written notice from such Lender prior to the proposed Closing Date specifying its
objection thereto.




          5.2 Conditions to Each Extension of Credit. The agreement of each Lender to make any
extension of credit requested to be made by it on any date (including its initial extension of
credit) is subject to the satisfaction of the following conditions precedent:

     (a)
Representations
and Warranties.

 Each of the representations and warranties made by any Loan Party in or
pursuant to the Credit Documents shall be true and correct in all material respects on and as of
such date as if made on and as of such date.




     (b) No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit requested to be
made on such date.


Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower hereunder shall
constitute a representation and warranty by the Borrower as of the date of such extension of credit
that the conditions contained in this Section 5.2 have been satisfied.




SECTION 6. AFFIRMATIVE COVENANTS




          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding that is not back-stopped to the satisfaction of the Administrative Agent
or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall and shall cause each of its Subsidiaries to:




          6.1 Financial Statements.
Furnish to the Administrative Agent and each Lender:

     (a)
as soon
as available, but in any event no later than 105 days after the end of each fiscal year of the
Borrower, a copy of the audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative form the figures for the
previous year, reported on without a “going concern” or like qualification or exception, or
qualification arising out of the scope of the audit, by Deloitte & Touche LLP or other independent
certified public accountants of nationally recognized standing;




     (b) as soon as available, but in any event not later than 55 days after the end of each
of the first three quarterly periods of each fiscal year of the Borrower, the unaudited
consolidated balance sheet of the Borrower and its consolidated Subsidiaries as at the end
of such quarter, the related unaudited consolidated statements of income for such quarter
and the portion of the fiscal year through the end of such quarter and the related unaudited
consolidated statements of cash flows for the portion of the fiscal year through the end of
such quarter (excluding any notes with respect thereto), setting forth in each case in
comparative form the figures for the previous year (or, in the case of the quarterly period
ended September 30, 2008, setting forth in comparative form the figures for the previous
year relating only to items from revenue to income or loss before income taxes and capital
expenditures), certified by a Responsible Officer as being fairly stated in all material
respects (subject to normal year-end audit adjustments);



45









 






     (c) as soon as available, but in any event no later than 90 days after the end of each
fiscal year of Loral, a copy of the audited consolidated balance sheet of Loral and its
consolidated Subsidiaries as at the end of such year and the related audited consolidated
statements of income and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on without a “going concern” or
like qualification or exception, or qualification arising out of the scope of the audit, by
Deloitte & Touche LLP or other independent certified public accountants of nationally
recognized standing, provided that the filing with the SEC of Loral’s Annual Report on Form
10-K for such fiscal year prepared in accordance with the requirements therefor shall be
deemed to satisfy the requirements of this Section 6.1(c); and




     (d) as soon as available, but in any event not later than 45 days after the end of each
of the first three quarterly periods of each fiscal year of Loral, the unaudited interim
consolidated balance sheet of Loral and its consolidated Subsidiaries as at the end of such
quarter, the related unaudited consolidated statements of income for such quarter and the
portion of the fiscal year through the end of such quarter and the related unaudited
consolidated statements of cash flows for the portion of the fiscal year through the end of
such quarter, certified by a Responsible Officer of Loral as being fairly state in
accordance with GAAP in all material respects (subject to normal year end audit adjustments
and except that footnote and schedule disclosure may be abbreviated), provided that the
filing with the SEC of Loral’s Quarterly Report on Form 10-Q for such quarter prepared in
accordance with the requirements therefor shall be deemed to satisfy the requirements of
this Section 6.1(d).


All such financial statements shall be complete and correct in all material respects and shall be
prepared in reasonable detail and in accordance with GAAP applied (except as disclosed therein)
consistently throughout the periods reflected therein and with prior periods.




           6.2 Certificates; Other Information. Furnish to the Administrative Agent and each Lender
(or, in the case of clause (f), to the relevant Lender):




     (a) concurrently with the delivery of the financial statements referred to in Section
6.1(a), a certificate of the independent certified public accountants reporting on such
financial statements stating that in making the examination necessary therefor no knowledge
was obtained of any Event of Default pursuant to Section 7.1, except as specified in such
certificate;




     (b) concurrently with the delivery of any financial statements pursuant to Section
6.1(a) or (b), (i) a certificate of a Responsible Officer stating that, to the best of each
such Responsible Officer’s knowledge, each Loan Party during such period has observed or
performed all of its covenants and other agreements, and satisfied every condition contained
in this Agreement and the other Credit Documents to which it is a party to be observed,
performed or satisfied by it, and that such Responsible Officer has obtained no knowledge of
any Default or Event of Default except as specified in such certificate, (ii) a Compliance
Certificate containing all information and calculations necessary for determining compliance
by each Group Member with the provisions of Section 7.1 or 7.7 referred to therein and any
calculations of the Net Cash Proceeds, if



46









 







applicable, in each case as of the last day of the fiscal quarter or fiscal year of the
Borrower (except for the fiscal quarter ended March 31, 2008), as the case may be and (iii)
to the extent not previously disclosed to the Administrative Agent, (1) a description of any
change in the jurisdiction of organization of any Loan Party, (2) a list of any Intellectual
Property applications or registrations acquired by any Loan Party, (3) a description of any
Person that has become a Group Member and whether such Person is an Immaterial Subsidiary,
in each case since the date of the most recent report delivered pursuant to this clause (y)
(or, in the case of the first such report so delivered, since the Closing Date) and (4) in
the case of any financial statements delivered pursuant to Section 6.1(b), a description of
any satellite construction contracts awarded to the Borrower or any of its Subsidiaries in
the relevant fiscal quarter and a reconciliation of the contracted backlog of the Borrower
and its Subsidiaries to that for the immediately prior fiscal quarter;




     (c) as soon as available, and in any event no later than 45 days after the end of each
fiscal year of the Borrower, a detailed consolidated budget for the following fiscal year
(including a projected consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of the following fiscal year, the related consolidated statements of projected cash
flow, projected changes in financial position and projected income and a description of the
underlying assumptions applicable thereto) (the “Projections”), which Projections
shall in each case be accompanied by a certificate of a Responsible Officer stating that
such Projections are based on reasonable estimates, information and assumptions and that
such Responsible Officer has no reason to believe that such Projections are incorrect or
misleading in any material respect;




     (d) within five days after the same are sent, copies of all financial statements and
reports that the Borrower sends to the holders of any class of its debt securities or public
equity securities and, within five days after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the SEC;




     (e) within five days after the same are sent, copies of all financial statements and
reports that Loral sends to the holders of any class of its debt securities or equity
securities generally and, within five days after the same are filed, copies of all reports
that Loral may make to, or file with, the SEC;




     (f) promptly, such additional financial and other information as any Lender may from
time to time reasonably request; and




     (g) if the Parent Guarantee is executed and delivered to the Administrative Agent on or
prior to January 14, 2009, prompt written notice that such Parent Guarantee was executed and
delivered and if the Parent Guarantee is not executed and delivered to the Administrative
Agent on or prior to January 14, 2009, written notice on January 14, 2009 that the Parent
Guarantee was not executed and delivered.




     6.3 Payment of Obligations. Pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its material obligations
of whatever nature, except where the amount or validity thereof is currently being



47









 







contested in good faith by appropriate proceedings and reserves in conformity with GAAP
with respect thereto have been provided on the books of the relevant Group Member except
where the failure to so pay is due to a good faith error or omission; provided that this
covenant shall not require the Borrower to pay any Indebtedness or Guarantee Obligation if
such failure to pay would not result in an Event of Default under Section
8(f).

     6.4 Maintenance of Existence; Compliance. (a)(i) Preserve, renew and keep in full
force and effect its organizational existence and (ii) take all reasonable action to
maintain all rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 7.4 and except, in
the case of clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with all Contractual Obligations
and Requirements of Law except to the extent that failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect; provided that this
covenant shall not require the Borrower to pay any Indebtedness or Guarantee Obligation if
such failure to pay would not result in an Event of Default under Section
8(f).

     6.5 Maintenance of Property; Insurance. (a) Keep all property useful and
necessary in its business in good working order and condition, ordinary wear and tear
excepted and (b) maintain with financially sound and reputable insurance companies insurance
on its property in at least such amounts and against at least such risks (but including in
any event public liability and product liability) as are usually insured against in the same
general area by companies engaged in the same or a similar business.


     6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper books of records and account
in which full, true and correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its business and activities
and (b) subject to restrictions imposed by any Governmental Authority with respect to
classified information and to contractual confidentiality restrictions with customers,
permit representatives of the Administrative Agent or any Lender to visit and inspect any of
its properties and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the business,
operations, properties and financial and other condition of the Group Members with officers
and employees of the Group Members and with their independent certified public
accountants; provided, that so long as no Event of Default has occurred and is
continuing, the Group Members shall only be required to pay the fees and expenses of the
Administrative Agent for one such inspection in any fiscal year.



     6.7 Notices. Promptly
give notice to the Administrative Agent and each Lender of:


     (a) the occurrence of any Default or
Event of Default;




     (b) any (i) default or event of default under any Contractual Obligation of any Group
Member or (ii) litigation, investigation or proceeding that may exist at any time between
any Group Member and any Governmental Authority, that in either case could reasonably be
expected to have a Material Adverse Effect;




     (c) any litigation or proceeding affecting any Group Member (i) in which the amount
involved is $10,000,000 or more and not covered by insurance (other than normal
deductibles), (ii) in which injunctive or similar relief is sought which could reasonably be
expected to have a Material Adverse Effect or (iii) which relates to any Credit Documents;



48









 






     (d) the following events, as soon as possible and in any event within 30 days after a
Responsible Officer of the Borrower knows or has reason to know thereof: (i) the occurrence
of any Reportable Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC or a Plan or any
withdrawal from, or the termination, Reorganization or Insolvency of, any Multiemployer Plan
or (ii) the institution of proceedings or the taking of any other action by the PBGC or the
Borrower or any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;




     (e) any development or event that has had or could reasonably be expected to have a
Material Adverse Effect; and




     (f) any development or formal correspondence with respect to any satellite purchase
agreement that, in the reasonable belief of the Borrower, could reasonably be expected to
result in the termination of such contract in the future or gives rise to the purchaser
thereunder currently having the right to terminate such contract, in each case, as the
result of non-delivery of any satellite to be delivered by the Borrower or any of its
Subsidiaries thereunder by the date required under such contract.


Each notice pursuant to this Section 6.7 shall be accompanied by a statement of a Responsible
Officer setting forth details of the occurrence referred to therein and stating what action the
relevant Group Member proposes to take with respect thereto.




          6.8 Environmental Laws. (a) Comply with, and use reasonable best efforts to ensure
compliance by all tenants and subtenants, if any, with, all applicable Environmental Laws, and
obtain and comply with and maintain, and ensure that all tenants and subtenants obtain and comply
with and maintain, any and all licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws except to the extent that the failure to do so could not
be reasonably expected to have a Material Adverse Effect. 


          (b) Conduct and complete all investigations,
studies, sampling and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply with all lawful orders and directives of all Governmental
Authorities regarding Environmental Laws except to the extent that the failure to do so could not
be reasonably expected to have a Material Adverse Effect.



          6.9 Additional Collateral, etc. (a) With respect to any property (except real
property) acquired after the Closing Date by any Group Member (other than (x) any property
described in paragraph (b), (c) or (d) below or in the proviso in Section 3 of the Guarantee and
Collateral Agreement, (y) any property subject to a Lien expressly permitted by Sections 7.3(g) or
(s) and (z) property acquired by any Foreign Subsidiary or Immaterial Subsidiary) as to which the
Administrative Agent, for the benefit of the Lenders, does not have a perfected Lien, within 45
days after the date of such acquisition (i) execute and deliver to the Administrative Agent such
amendments to the Guarantee and Collateral Agreement or such other documents as the Administrative
Agent reasonably deems necessary or advisable to grant to the Administrative Agent, for the benefit
of the Lenders, a security interest in such property and (ii) take all actions necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in such property (subject to Liens permitted by Section



49









 







7.3), including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or by law or as may be
requested by the Administrative Agent. 


          (b) With respect to any fee interest in any real property having
a value (together with improvements thereof) of at least $5,000,000 acquired after the Closing Date
by any Group Member (other than (x) any such real property subject to a Lien expressly permitted by
Section 7.3(g) or (s) and (z) real property acquired by any Foreign Subsidiary), within 60 days
after the date of such acquisition (i) execute and deliver a first priority Mortgage, in favor of
the Administrative Agent, for the benefit of the Lenders, covering such real property, (ii) if
requested by the Administrative Agent, provide the Lenders with (x) title and extended coverage
insurance covering such real property in an amount at least equal to the purchase price of such
real property (or such other amount as shall be reasonably specified by the Administrative Agent)
as well as a current ALTA survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary or advisable by the Administrative Agent in
connection with such Mortgage, each of the foregoing in form and substance reasonably satisfactory
to the Administrative Agent and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above, which opinions shall
be in form and substance, and from counsel, reasonably satisfactory to the Administrative Agent.



          (c) With respect to any new Subsidiary (other than a Foreign or an Immaterial Subsidiary)
created or acquired, after the Closing Date by any Group Member (which, for the purposes of this
paragraph (c), shall include any existing Subsidiary that ceases to be a Foreign Subsidiary and any
Immaterial Subsidiary that becomes a Material Subsidiary), within 45 days after the date of such
creation, acquisition or event (i) execute and deliver to the Administrative Agent such amendments
to the Guarantee and Collateral Agreement as the Administrative Agent reasonably deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is owned by any Group
Member, (ii) deliver to the Administrative Agent the certificates representing such Capital Stock
(to the extent such Capital Stock is certificated), together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Group Member, (iii) cause such
new Subsidiary (A) to become a party to the Guarantee and Collateral Agreement, (B) to take such
actions necessary or advisable to grant to the Administrative Agent for the benefit of the Lenders
a perfected first priority security interest (subject to Liens permitted by Section 7.3) in the
Collateral described in the Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such jurisdictions as may
be required by the Guarantee and Collateral Agreement or by law or as may be requested by the
Administrative Agent and (C) to deliver to the Administrative Agent a certificate of such
Subsidiary, substantially in the form of Exhibit D, with appropriate insertions and attachments,
and (iv) if reasonably requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative Agent.



          (d) With respect to any new Foreign Subsidiary created or acquired after the Closing Date by
any Group Member (other than by any Group Member that is a Foreign Subsidiary or an Immaterial
Subsidiary), within 45 days after the date of such creation or acquisition (i) execute and deliver
to the Administrative Agent such amendments to the



50









 







Guarantee and Collateral Agreement as the Administrative Agent reasonably deems necessary or
advisable to grant to the Administrative Agent, for the benefit of the Lenders, a perfected first
priority security interest (subject to Liens permitted by Section 7.3) in the Capital Stock of such
new Subsidiary that is owned by any such Group Member (provided that in no event shall more than
65% of the total outstanding voting Capital Stock of any such new Subsidiary be required to be so
pledged), (ii) deliver to the Administrative Agent the certificates representing such Capital Stock
(to the extent such Capital Stock is certificated), together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the relevant Group Member, and take such
other action as may be necessary or, in the opinion of the Administrative Agent, desirable to
perfect the Administrative Agent’s security interest therein, and (iii) if reasonably requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.




          6.10 Reporting Requirements. Promptly furnish to the Administrative Agent and each
Lender, following a request by any Lender, all documentation and other information that such Lender
reasonably requests in order to comply with its ongoing obligations under applicable “know your
customer” and anti-money laundering rules and regulations, including the USA Patriot Act (Title III
of Pub. L. 107-56 (signed into law October 26, 2001).




SECTION 7. NEGATIVE COVENANTS



          The Borrower hereby agrees that, so long as the Commitments remain in effect, any Letter of
Credit remains outstanding that is not back-stopped to the satisfaction of the Administrative Agent
or any Loan or other amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly or indirectly:



          7.1. Financial Condition Covenants.



          (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio as of (i) the
last day of any period of four consecutive fiscal quarters of the Borrower or (ii) the date of the
incurrence of any Indebtedness (other than Indebtedness of the type described in Section 7.2(b) or
(c)) to exceed the ratio set forth below for such period or the period during which such date
occurs, as the case may be:



	 	 	 
	 	 	Consolidated
	Period	 	Leverage Ratio
	Closing Date through September 29, 2009

	 	3.50 to 1.00
	September 30, 2009 through December 30, 2009

	 	3.25 to 1.00
	December 31, 2009 and thereafter

	 	3.00 to 1.00






          (b) Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Borrower ending with any fiscal
quarter to be less than 3.50 to 1.00.



          7.2 Indebtedness. Create, issue, incur, assume, become liable in respect of or



51









 







suffer to exist any Indebtedness, except:


     (a) Indebtedness of any Loan Party pursuant to any Credit
Documents;




     (b) Indebtedness of the Borrower to any Subsidiary and of any Guarantor to the Borrower
or any other Subsidiary;




     (c) Guarantee Obligations incurred in the ordinary course of business by the Borrower
or any of its Subsidiaries of obligations of any Guarantor;




     (d) Indebtedness outstanding on the date hereof and listed on Schedule 7.2(d) and any
refinancings, refundings, renewals or extensions thereof (without shortening the maturity
of, or increasing, the principal amount thereof except by an amount necessary to pay the
fees and expenses, including prepayment costs, incurred in connection with the refinancing
and by any amount representing accrued or deferred interest accrued prior to or during the
period of any extensions or renewals);




     (e) Indebtedness (including, without limitation, Capital Lease Obligations) secured by
Liens permitted by Section 7.3(g) in an aggregate principal amount not to exceed $10,000,000
at any one time outstanding and extensions, renewals and refinancings thereof without
shortening the maturity of, or increasing, the principal thereof (except by an amount
necessary to pay the fees and expenses, including prepayment costs, incurred in connection
with the refinancing and by any amount representing accrued or deferred interest accrued
prior to or during the period of any extensions or renewals);




     (f) (i) Indebtedness of the Borrower in respect of unsecured Indebtedness (including
unsecured subordinated Indebtedness) having no scheduled principal payments prior to the
Revolving Termination Date in an aggregate principal amount not to exceed $75,000,000 and
(ii) Guarantee Obligations of any Guarantor in respect of such Indebtedness,
provided that such Guarantee Obligations in respect of subordinated Indebtedness are
subordinated to the same extent as the obligations of the Borrower in respect of such
Indebtedness;




     (g) Indebtedness of the Borrower or any of its Subsidiaries in respect of any sale
(whether or not such sale is a “true sale”) by a Group Member of Orbital Receivables in an
aggregate principal amount not to exceed $50,000,000 at any one time outstanding,
provided that (i) any such Indebtedness is on arms length terms and (ii) at the time
of the incurrence of such Indebtedness and after giving effect thereto on a pro
forma basis no Event of Default has occurred and is continuing;




     (h) Indebtedness of the Borrower or any of its Subsidiaries in respect of any sale
(whether or not such sale is a “true sale”) by a Group Member of Vendor Financing
Receivables in an aggregate principal amount not to exceed $50,000,000 at any one time
outstanding, provided that (i) any such Indebtedness is on arms length terms and
(ii) at the time of the incurrence of such Indebtedness and after giving effect thereto on a
pro forma basis no Event of Default has occurred and is continuing;




     (i) additional Indebtedness of the Borrower or any of its Subsidiaries in an



52









 







aggregate principal amount (for the Borrower and all Subsidiaries) not to exceed
$15,000,000 at any one time outstanding;




     (j) (i) Indebtedness of a Person existing at the time such Person is merged into or
consolidated with the Borrower or any of its Subsidiaries or becomes a Subsidiary, in each
case in connection with an Investment or acquisition permitted under Section 7.8; provided
that (x) such Indebtedness was not incurred in contemplation of or in connection with such
Investment or acquisition and (y) the aggregate amount of all such Indebtedness shall not
exceed $25,000,000 and (ii) any modification, refinancing, refunding, renewal or extension
of such Indebtedness (including at the time of such Investment or acquisition); provided
that the terms and conditions (including, if applicable, as to collateral but excluding as
to subordination, interest rate and redemption premium) of any such modification,
refinancing, refunding, renewal or extension, taken as a whole, are not materially less
favorable to the Group Members or the Lenders than the terms and conditions of the
Indebtedness being modified, refinanced, refunded, renewed or extended; and




     (k) Indebtedness of the Borrower to Holdings or Loral incurred in connection with any
loan providing Vendor Financing to Sirius Satellite Radio Inc. (or its successors and
permitted assigns) not to exceed $100,000,000 at any one time outstanding, provided that any
such Indebtedness is not secured other than by property of the Borrower and its Subsidiaries
that is not Collateral or required by the Credit Documents to be Collateral.



          7.3 Liens. Create, incur, assume or suffer to exist any Lien upon any of its
property, whether now owned or hereafter acquired, except:


          (a) Liens for taxes not yet due or that are
being contested in good faith by appropriate proceedings, provided that adequate reserves
with respect thereto are maintained on the books of the Borrower or its Subsidiaries, as the case
may be, in conformity with GAAP;




     (b) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business that are not overdue for a period of more
than 30 days or that are being contested in good faith by appropriate proceedings;




     (c) pledges or deposits in connection with workers’ compensation, unemployment
insurance and other social security legislation and deposits securing liabilities to
insurance carriers under insurance or self-insurance arrangements;




     (d) deposits to secure the performance of bids, trade contracts (other than for
borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of business;




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



53









 






     (f) Liens in existence on the date hereof listed on Schedule 7.3(f), securing
Indebtedness permitted by Section 7.2(d) and extensions, renewals and refinancings thereof;
provided in each case, that no such Lien is spread to cover any additional property
after the Closing Date and that the principal amount of such Indebtedness is not thereby
increased (except by an amount necessary to pay the fees and expenses, including prepayment
costs, incurred in connection with the refinancing and by an amount representing accrued or
deferred interest accrued prior to or during the period of any such extension or renewal);




     (g) Liens securing Indebtedness of the Borrower or any other Subsidiary incurred
pursuant to Section 7.2(e) to finance the acquisition, construction or improvement of fixed
or capital assets, provided that (i) such Liens shall be created within 180 days of
the acquisition of such fixed or capital assets, (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and (iii) the amount of
Indebtedness secured thereby is not increased except in connection with further improvements
and additions to such assets and as otherwise provided by Section 7.2(e);




     (h) Liens created pursuant to the Security Documents;




     (i) any interest or title of a lessor under any lease entered into by the Borrower or
any other Subsidiary in the ordinary course of its business and covering only the assets so
leased;




     (j) Liens on satellite assets and other Work-in-Progress (as defined in the Guarantee
and Collateral Agreement) related to a sale contract with a customer securing the
obligations of a Group Member under such sale contract;




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




     (l) Liens in connection with any judgment which is not the basis for the existence of
an Event of Default pursuant to Section 8(j);




     (m) Liens in favor of a Lender or an affiliate of a Lender pursuant to (i) an interest
rate protection agreement, foreign currency exchange protection agreement or commodities
purchase protection agreement permitted hereunder or (ii) cash management programs, but only
where (A) the loans and obligations hereunder are also secured by a Lien on the collateral
that is the subject of such Lien, and (B) the loans and obligations hereunder and the
obligations under such protection agreements and cash management programs will share pari
passu in the collateral;




     (n) Liens on Orbital Receivables and Vendor Financing Receivables securing any
Indebtedness in respect of a sale (whether or not such sale is a “true sale”) thereof
permitted by Section 7.2(g) or (h) or relating to a Disposition thereof permitted by Section
7.5(g) or (h);




     (o) Liens not otherwise permitted by this Section so long as neither (i) the



54








 







aggregate outstanding principal amount of the obligations secured thereby nor (ii) the
aggregate fair market value (determined as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to the Borrower and all Subsidiaries) $15,000,000 at any one
time;




     (p) Liens listed on the title report, listed on Schedule 7.3(p);




     (q) Liens incurred in the ordinary course of business in favor of financial
intermediaries and clearing agents pending clearance of payment for Investments of the type
permitted under Section 7.8 or 7.12;




     (r) Liens on property of the Borrower and its Subsidiaries not constituting Collateral
or required by the Credit Documents to be Collateral securing Indebtedness under Section
7.2(k); and




     (s) Liens existing on the property of any Person at the time such Person is merged
into or consolidated with the Borrower or any of its Subsidiaries or becomes a Subsidiary
after the Closing Date and the replacement, extension or renewal of any Lien permitted by
this clause upon or in the same property previously subject thereto in connection with the
replacement, extension or renewal (without increase in the amount or any change in any
direct or contingent obligor or collateral) of the amount secured thereby; provided
that (i) such Lien was not created in contemplation of such Person becoming a Subsidiary,
(ii) such Lien does not extend to or cover any other assets or property (other than the
proceeds or products thereof), (iii) such Lien does not secure obligations in an aggregate
principal amount exceeding $25,000,000 and (iv) the Indebtedness secured thereby is
permitted under Section 7.2(j).



          7.4 Fundamental Changes. Enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all
or substantially all of its property or business, except that:




     (a) any Subsidiary of the Borrower may be merged or consolidated with or into the
Borrower (provided that the Borrower shall be the continuing or surviving
corporation) or with or into any Guarantor (provided that the Guarantor shall be the
continuing or surviving corporation);




     (b) any Subsidiary of the Borrower may Dispose of any or all of its assets (i) to the
Borrower or any Guarantor or, in the case of a Subsidiary which is not a Guarantor, any
other Subsidiary (upon voluntary liquidation, dissolution or otherwise) or (ii) pursuant to
a Disposition permitted by Section 7.5; and




     (c) any Investment expressly permitted by Section 7.8 may be structured as a merger,
consolidation or amalgamation.



          7.5 Disposition of Property. Dispose of any of its property, whether now owned or
hereafter acquired, or, in the case of any Subsidiary, issue or sell any shares of such
Subsidiary’s Capital Stock to any Person, except:



     (a) The Disposition of obsolete or worn out property
in the ordinary course of business;



55









 






     (b) the Disposition of inventory and related orbital slots in the ordinary course of
business;




     (c) Dispositions permitted by clause (i) of Section 7.4(b);




     (d) the Disposition or issuance of any Subsidiary’s Capital Stock or other assets to
the Borrower or any Guarantor or in accordance with any shareholders’ or like agreement in
existence on the date hereof or entered into by any Group Member in connection with any
investment otherwise permitted hereby;




     (e) the sale, transfer or other disposition of cash and Cash Equivalents;




     (f) the license of Intellectual Property in the ordinary course of business or the
lease of satellite transponder capacity pursuant to the Apstar Transponder Lease, in each
case which does not materially interfere with the business of the Borrower and its
Subsidiaries, taken as a whole;




     (g) Dispositions of Orbital Receivables (including in transactions giving rise to
Indebtedness permitted by Section 7.2(g)) for aggregate proceeds not to exceed $50,000,000,
provided that (x) any such Disposition is on arms length terms and (y) at the time
of such Disposition and after giving effect thereto on a pro forma basis no
Event of Default has occurred and is continuing;




     (h) Dispositions of Vendor Financing Receivables (including in transactions giving
rise to Indebtedness permitted by Section 7.2(h)) for aggregate proceeds not to exceed
$50,000,000, provided that (x) any such Disposition is on arms length terms and (y)
at the time of such Disposition and after giving effect thereto on a pro
forma basis no Event of Default has occurred and is continuing;




     (i) the Disposition of other property having a fair market value not to exceed
$10,000,000 in the aggregate for any fiscal year of the Borrower and $25,000,000 in the
aggregate during the term of the Revolving Facility; and




     (j) the Disposition of any commitment to provide, or loan so providing, Vendor
Financing of up to $100,000,000 to Sirius Satellite Radio Inc. (or its successors and
permitted assigns) or of the Vendor Financing Receivables arising therefrom (i) in
connection with the incurrence of Indebtedness permitted by Section 7.2(k) or (ii) in a
Disposition that may be accounted for as a “true sale” in accordance with GAAP,
provided that (x) any such Disposition is on arms length terms and (y) at the time
of such Disposition and after giving effect thereto on a pro forma basis no
Event of Default has occurred and is continuing.



          7.6 Restricted Payments. Declare or pay any dividend (other than dividends payable
solely in common stock of the Person making such dividend) on, or make any payment on account of,
or set apart assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any Capital Stock of any Group Member, whether now
or hereafter outstanding, or make any other distribution in respect thereof, either directly or
indirectly, whether in cash or property or in obligations of any Group Member



56









 




(collectively, “Restricted Payments,” it being understood that any repayment of
Indebtedness of the Borrower permitted under Section 7.2(k) with payments under any loan providing
Vendor Financing to Sirius Satellite Radio Inc. (or its successors and permitted assigns) shall not
constitute a Restricted Payment), except that:



     (a) any Subsidiary (i) may make Restricted Payments to
the Borrower or any Guarantor and (ii) declare or pay dividends on a pro rata basis to the
Borrower, any Guarantor and such Subsidiary’s other shareholders;





     (b) the Borrower may make payments to Loral in amounts and on dates as required for
federal, state and local income tax payments attributable to income from the operations of
the Borrower and its Subsidiaries;




     (c) so long as no Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may make payments to Loral, without duplication, (i) in an
amount not greater than the allocated reasonable (as determined by the Board of Directors of
Loral in good faith) corporate overhead expenses of Loral attributable to its ownership of
the Borrower incurred in the ordinary course of business not to exceed $15,000,000 during
any fiscal year of the Borrower, provided that at the time of any such dividend and
after giving effect thereto the Available Liquidity of the Borrower and its Subsidiaries is
at least equal to $50,000,000 and (ii) in an amount not greater than $1,500,000 to Loral
during any fiscal year of the Borrower as a management fee;




     (d) so long as no Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may pay dividends in an aggregate amount up to the sum of the
capital contributions in cash received on or after August 15, 2008 by the Borrower in excess
of $50,000,000 in the aggregate to the extent that such capital contributions have not been
and will not be used to increase the limitation on additional Capital Expenditures;
provided that at the time of any such dividend and after giving effect thereto (x)
the Available Liquidity of the Borrower and its Subsidiaries is at least equal to
$50,000,000 and (y) the Consolidated Leverage Ratio of the Borrower shall be no greater than
2.50 to 1.00; and




     (e) so long as no Event of Default shall have occurred and be continuing or would
result therefrom, the Borrower may pay a dividend to Holdings if, at such time and after
giving effect to such dividend, the aggregate sum of all such dividends made after the date
hereof and pursuant to this Section 7.6(e) shall not exceed the remainder of (a) 50% of the
aggregate Consolidated Net Income of the Borrower and its Subsidiaries on a cumulative basis
for completed financial quarters from June 30, 2008 for which such Consolidated Net Income
is positive minus (b) 100% of the amount by which aggregate Consolidated Net Income of the
Borrower and its Subsidiaries on a cumulative basis is less than zero for completed
financial quarters from June 30, 2008 for which such Consolidated Net Income is negative
(for the purposes of this Section 7.6(e) only, the definition of Consolidated Net Income
shall not include either “extraordinary gains” or “extraordinary losses” as such terms are
defined in accordance with GAAP); provided that at the time of any such dividend and
after giving effect thereto (x) the Available Liquidity of the Borrower and its Subsidiaries
is at least equal to $50,000,000 and (y) the Consolidated Leverage Ratio of the Borrower
shall be no greater than 2.50 to 1.00.



57









 





          7.7 Capital Expenditures. Make or commit to make any Capital Expenditure, except (a)
Capital Expenditures of the Borrower and its Subsidiaries not exceeding $30,000,000 for the first
fiscal year of the Borrower ending after the Closing Date, and for each succeeding fiscal year,
$30,000,000 plus the positive difference (if any) between the $30,000,000 and the amount of Capital
Expenditures made pursuant to this clause in the prior fiscal year and (b) additional Capital
Expenditures of up to $55,000,000 in the aggregate. The limitation on additional Capital
Expenditures in clause (b) above shall be increased on a dollar-for-dollar basis by the proceeds of
(i) any capital contribution to or equity issuance by the Borrower after the Closing Date and (ii)
the incurrence of unsecured Indebtedness incurred under Section 7.2(f).Investments. Make
any advance, loan, extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt securities of, or any
assets constituting a business unit of, or make any other investment in, or purchase an orbital
slot from, any Person (all of the foregoing, “Investments”), except:



     (a) extensions of trade
credit (including, without limitation, orbital receivables) in the ordinary course of business;




     (b) investments in Cash Equivalents;




     (c) Guarantee Obligations permitted by Section 7.2;




     (d) advances to subcontractors in the ordinary course of business;




     (e) loans and advances to employees of any Group Member in the ordinary course of
business (including for travel, entertainment and relocation expenses) not to exceed
$2,000,000 at any one time outstanding;




     (f) Investments consisting of Capital Stock, obligations, securities or other
property received in settlement of accounts receivable (created in the ordinary course of
business) from bankrupt or insolvent obligors;




     (g) Investments (i) under Vendor Financings extended or committed by the Loan Parties
as of the Closing Date and described on Schedule 7.8, Part I and (ii) existing on the
Closing Date in the Persons listed on Schedule 7.8, Part II;




     (h) Investments in an aggregate amount not to exceed $60,000,000 at any one time
outstanding inclusive of Vendor Financings (other than Investments under clause (g) above),
provided that Investments consisting of the purchase of Capital Stock of customers and the
purchase of orbital slots shall not exceed $30,000,000 at any one time outstanding;




     (i) intercompany Investments by any Group Member in the Borrower or any Person that,
prior to such investment, is a Guarantor; and




     (j) in addition to Investments otherwise expressly permitted by this Section,
Investments by the Borrower or any of its Subsidiaries in an aggregate amount (valued at
cost) not to exceed $25,000,000 during the term of this Agreement; provided that at
the time of any such Investment the Consolidated Leverage Ratio on a pro forma basis
reflecting such Investment and any Indebtedness incurred to finance it is not greater than



58









 







2.00 to 1.00; and provided further that no Investment under this clause (j)
shall be made to purchase Capital Stock of customers or to purchase orbital slots (which
such Investments are subject to the limits under clause (h) above).



          7.9 Optional Payments and Modifications of Certain Debt Instruments. (a) Make or offer
to make any optional or voluntary payment, prepayment, repurchase or redemption of or otherwise
optionally or voluntarily defease or segregate funds with respect to any Indebtedness incurred
under Section 7.2(f) or (b) amend, modify, waive or otherwise change, or consent or agree to any
amendment, modification, waiver or other change to any such Indebtedness that would shorten any
scheduled date for the payment of the principal thereof.



          7.10 Transactions with Affiliates. Enter into any transaction, including any purchase,
sale, lease or exchange of property, the rendering of any service or the payment of any management,
advisory or similar fees, with any Affiliate (other than Loral, Holdings, the Borrower or any
Guarantor) unless such transaction is (i) (a) otherwise permitted under this Agreement and (b) upon
fair and reasonable terms no less favorable to the relevant Group Member than it would obtain in a
comparable arm’s length transaction with a Person that is not an Affiliate or (ii) any transaction
extending or replacing on similar terms any transaction described on Schedule 7.10.



          7.11 Sales and Leasebacks. Enter into any arrangement with any Person providing for the
leasing by any Group Member of real or personal property that has been or is to be sold or
transferred by such Group Member to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental obligations of such
Group Member.



          7.12 Swap Agreements. Enter into any Swap Agreement, except (a) Swap Agreements entered
into to hedge or mitigate risks to which the Borrower or any Subsidiary has actual exposure (other
than those in respect of Capital Stock) and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating rates, from one floating
rate to another floating rate or otherwise) with respect to any interest-bearing liability or
investment of the Borrower or any Subsidiary.



          7.13 Negative Pledge Clauses. Enter into or suffer to exist or become effective any
agreement that prohibits or limits the ability of any Group Member to create, incur, assume or
suffer to exist any Lien upon any of its property or revenues, whether now owned or hereafter
acquired, to secure its obligations under the Credit Documents to which it is a party other than
(a) this Agreement and the other Credit Documents, (b) any agreements governing any purchase money
Liens or Capital Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (c) any agreement relating
to Indebtedness permitted by Section 7.2(g), (h) or (k) to the extent such prohibition or
limitation relates to the Orbital Receivables or Vendor Financing Receivables and related assets
which are the subject thereof or the assets financed thereby, (d) any agreements relating to
Indebtedness permitted by Section 7.2(j), and any agreements relating to assets that are the
subject of Liens permitted by Section 7.3(f) or (j) and (e) any shareholders’ or like agreements in
existence on the date hereof or entered into by any Group Member in connection with any investment
otherwise permitted hereby.



59









 





          7.14 Clauses Restricting Subsidiary Distributions. Enter into or suffer to exist or become
effective any consensual encumbrance or restriction on the ability of any Subsidiary of the
Borrower to (a) make Restricted Payments in respect of any Capital Stock of such Subsidiary held
by, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the Borrower, (b) make
loans or advances to, or other Investments in, the Borrower or any other Subsidiary of the Borrower
or (c) transfer any of its assets to the Borrower or any other Subsidiary of the Borrower, except
for such encumbrances or restrictions existing under or by reason of (i) any restrictions existing
under the Credit Documents and (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the Disposition of all or
substantially all of the Capital Stock or assets of such Subsidiary.



          7.15 Lines of Business. Enter into any business, either directly or through any
Subsidiary, except for those businesses in which the Borrower and its Subsidiaries are engaged on
the date of this Agreement or that are reasonably related thereto (for the avoidance of doubt, such
businesses that are reasonably related thereto shall not include the provision of satellite
services, but will include any Investments in orbital slots).



          7.16 Changes in Fiscal Periods. Permit the fiscal year of the Borrower to end on a day
other than December 31 or change the Borrower’s method of determining fiscal quarters; provided
that the Borrower, at its election, may make such one such change to its fiscal period before the
Revolving Termination Date.



SECTION 8. EVENTS OF DEFAULT




          8.1. Events of Default. If any of the following events shall occur and be continuing:




     (a) the Borrower shall fail to pay any principal of any Loan or Reimbursement
Obligation when due in accordance with the terms hereof; or the Borrower shall fail to pay
any interest on any Loan or Reimbursement Obligation, or any other amount payable hereunder
or under any other Credit Documents, within five days after any such interest or other
amount becomes due in accordance with the terms hereof; or




     (b) any representation or warranty made or deemed made by any Loan Party or Holdings
herein or in any Credit Documents or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in connection with this
Agreement or any such other Credit Documents shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or




     (c) any Loan Party shall default in the observance or performance of any agreement
contained in clause (i) or (ii) of Section 6.4(a) (with respect to the Borrower only),
Section 6.7(a) or Section 7.1, 7.4, 7.5, 7.7, 7.9, 7.11, 7.13, 7.14 or 7.15 of this
Agreement; or




     (d) (i) any Loan Party shall default in the observance or performance of any agreement
contained in Section 7.2, 7.3, 7.6, 7.8, 7.10, 7.12 and such default shall continue
unremedied for a period of five days; or



60









 






          (ii) any Loan Party shall default in the observance or performance of any agreement
contained in (A) Section 6.1(a) or (b) and such default shall continue unremedied for a
period of 15 days or (B) Section 6.1(c) or (d) and such default shall continue unremedied
for a period of 30 days; or




     (e) any Loan Party or Holdings shall default in the observance or performance of any
other agreement contained in this Agreement or any Credit Documents (other than as provided
in paragraphs (a) through (d) of this Section), and such default shall continue unremedied
for a period of 30 days after notice to the Borrower from the Administrative Agent or the
Required Lenders; or




     (f) any Loan Party shall (i) default in making any payment of any principal of any
Indebtedness (including any Guarantee Obligation, but excluding the Loans) beyond the period
of grace, if any, provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default in making any payment of any interest on any such Indebtedness
beyond the period of grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to cause, or to
permit the holder or beneficiary of such Indebtedness (or a trustee or agent on behalf of
such holder or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of any such
Indebtedness constituting a Guarantee Obligation) to become payable; provided, that
a default, event or condition described in clause (i), (ii) or (iii) of this paragraph (e)
shall not at any time constitute an Event of Default unless, at such time, one or more
defaults, events or conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness the
outstanding principal amount of which exceeds in the aggregate $10,000,000; or




     (g) (i) any of Loral, Holdings, the Borrower or any Material Subsidiary shall commence
any case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, winding-up, liquidation, dissolution, composition or other relief with respect
to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any substantial part of its
assets, or any of Loral, Holdings, the Borrower or any Material Subsidiary shall make a
general assignment for the benefit of its creditors; or (ii) there shall be commenced
against any of Loral, Holdings, the Borrower or any Material Subsidiary any case, proceeding
or other action of a nature referred to in clause (i) above that (A) results in the entry of
an order for relief or any such adjudication or appointment or (B) remains undismissed or
undischarged for a period of 60 days; or (iii) there shall be commenced against any of
Loral, Holdings, the Borrower or any Material Subsidiary any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or similar process
against all or any substantial part of its assets that results in the entry of an order for
any



61









 







such relief that shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) any of Loral, Holdings, the Borrower
or any Material Subsidiary shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) any of Loral, Holdings, the Borrower or any Material Subsidiary shall
generally not, or shall be unable to, or shall admit in writing its inability to, pay its
debts as they become due; or




     (h) (i) any Person shall engage in any “prohibited transaction” (as defined in Section
406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any failure to satisfy
the “minimum funding standards” (within the meaning of Section 412 of the Code or Section
302 of ERISA), whether or not waived, shall exist with respect to any Single Employer Plan
or any Lien in favor of the PBGC or a Single Employer Plan shall arise on the assets of any
Group Member or any Commonly Controlled Entity, (iii) a Reportable Event shall occur with
respect to, or proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which Reportable Event
or commencement of proceedings or appointment of a trustee is, in the reasonable opinion of
the Required Lenders, likely to result in the termination of such Plan for purposes of Title
IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes of Title IV of
ERISA, (v) any Group Member or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan or (vi) any
other event or condition shall occur or exist with respect to a Plan; and in each case in
clauses (i) through (vi) above, such event or condition, together with all other such events
or conditions, if any, would have a Material Adverse Effect; or




     (i) any Group Member or Holdings shall violate, as determined by the United States
government, any of the following United States export control laws and regulations: (i)
regulations of the United States Treasury Department’s Office of Foreign Assets Control (31
C.F.R., Subtitle B, Chapter V, as amended), (ii) the Arms Export Control Act (22 C.F.R.,
Chapter 39, as amended), (iii) International Traffic in Arms Regulations (22 C.F.R.,
Subtitle M, Chapter I, as amended) (iv) the Export Administration Act (50 U.S.C. App 2401 et
seq.) and (v) the United States Commerce Department’s Export Administration Regulations (15
C.F.R. Part 730 et seq.); and in each case in clauses (i) through (v) above, such event or
condition, together with all other such events or conditions, if any, would have a Material
Adverse Effect; or




     (j) one or more judgments or decrees shall be entered against any Group Member
involving in the aggregate a liability (not paid or fully covered by insurance as to which
the relevant insurance company has acknowledged coverage) of $10,000,000 or more, and all
such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or




     (k) any of the Security Documents shall cease, for any reason, to be in full force and
effect, or any Loan Party or Holdings (as the case may be) shall so assert, or any Lien
created by any of the Security Documents in respect of property of a Loan Party



62









 







or the Borrower having a fair market value in excess of $5,000,000 shall cease to be
enforceable and of the same effect and priority purported to be created thereby; or




     (l) the guarantee of any Material Subsidiary contained in Section 2 of the Guarantee
and Collateral Agreement shall cease, for any reason, to be in full force and effect or any
Material Subsidiary shall so assert; or




     (m) following its delivery and execution, the guarantee of Loral contained in Section 2
of the Parent Guarantee shall cease, for any reason, to be in full force and effect (except
as permitted therein) or Loral shall so assert; or




     (n) any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), excluding Affiliates of
MHR Fund Management LLC, shall become, or obtain rights (whether by means or warrants,
options or otherwise) to become, the “beneficial owner” (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 35% of the outstanding
common stock of Loral; (ii) the board of directors of Loral shall cease to consist of a
majority of Continuing Directors; or (iii) Loral shall cease to own and control,
beneficially, directly or indirectly, 100% of each class of outstanding Capital Stock of the
Borrower free and clear of all Liens (except Liens created by the Guarantee and Collateral
Agreement);


then, and in any such event, (A) if such event is an Event of Default specified in clause (i) or
(ii) of paragraph (f) above with respect to the Borrower, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon) and all other amounts owing
under this Agreement and the other Credit Documents (including all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Borrower declare the Revolving
Commitments to be terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower,
declare the Loans (with accrued interest thereon) and all other amounts owing under this Agreement
and the other Credit Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the documents required
thereunder) to be due and payable forthwith, whereupon the same shall immediately become due and
payable. With respect to all Letters of Credit with respect to which presentment for honor shall
not have occurred at the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such
cash collateral account shall be applied by the Administrative Agent to the payment of drafts drawn
under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other obligations of the
Borrower hereunder and under the other Credit Documents. After all such Letters of Credit shall


63









 






have expired or been fully drawn upon, all Reimbursement Obligations shall have been satisfied and
all other obligations of the Borrower hereunder and under the other Credit Documents shall have
been paid in full, the balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of any kind are hereby
expressly waived by the Borrower.




          8.2 Borrower’s Right to Cure. If the Borrower fails to comply with the covenant set
forth in Section 7.1(a), the Borrower shall have the right to reduce Indebtedness with the proceeds
of any equity contributions received by the Borrower from Loral after the end of any fiscal quarter
and not more than 10 days after the date of required delivery of financial statements for such
fiscal quarter (any such equity contribution for this purpose, a “Specified Equity Contribution”),
solely for the purpose of measuring the covenant set forth in Section 7.1(a), and, if the Borrower
shall be in pro forma compliance with such covenant after such recalculation, the applicable breach
or default of such covenant that had occurred shall be deemed cured for purposes of this Agreement;
provided that (i) in each four-fiscal-quarter period there shall be no more than one fiscal
quarter in which Specified Equity Contributions are made, (ii) the amount of any Specified Equity
Contribution shall be no greater than the amount required to cause the Borrower to be in compliance
with such financial covenant and (iii) any Specified Equity Contribution shall be disregarded in
determining any other entitlement, covenant or basket.



SECTION 9. THE AGENTS




          9.1Appointment. Each Lender hereby irrevocably designates and appoints the
Administrative Agent as the agent of such Lender under this Agreement and the other Credit
Documents, and each such Lender irrevocably authorizes the Administrative Agent, in such capacity,
to take such action on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of this Agreement and the other Credit Documents, together with
such other powers as are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or any other Credit Documents or otherwise exist against the
Administrative Agent. 


          9.2 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement and the other Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to
such duties. The Administrative Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys in-fact selected by it with reasonable care. 


          9.3 Exculpatory Provisions.
Neither any Agent nor any of their respective officers, directors, employees, agents, advisors,
attorneys-in-fact or affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any other Credit Documents
(except to the extent that any of the foregoing are found by a final and nonappealable decision of
a court of competent jurisdiction to have resulted from its or such Person’s own gross negligence,
intentional breach or willful misconduct) or (ii) responsible in any manner to any of the Lenders
for any recitals, statements, representations or warranties made by any Loan Party or any officer
thereof contained in this Agreement or any other Credit Documents or in any certificate, report,
statement or other document referred to or




64









 







provided for in, or received by the Agents under or in connection with, this Agreement or any other
Credit Documents or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Credit Documents or for any failure of any Loan Party a
party thereto to perform its obligations hereunder or thereunder. The Agents shall not be under
any obligation to any Lender 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 Credit Documents, or
to inspect the properties, books or records of any Loan Party.



          9.4 Reliance by Administrative
Agent. The Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any instrument, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy or email message, statement, order 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 (including counsel to the Borrower), independent accountants
and other experts selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent.
The Administrative Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Credit Documents unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all Lenders) as it
deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any
and all liability and expense that may be incurred by it by reason of taking or continuing to take
any such action. The Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Lenders (or, if so specified by this Agreement, all Lenders), and such
request and any action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Loans. 


          9.5 Notice of Default. The Administrative Agent
shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of
Default unless the Administrative Agent has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that such notice is a
“notice of default”. In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be reasonably directed by the
Required Lenders (or, if so specified by this Agreement, all Lenders); provided that unless
and until the Administrative Agent shall have received such directions, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the best interests of the
Lenders. 


          9.6 Non-Reliance on Agents and Other Lenders. Each Lender expressly acknowledges that
neither the Agents nor any of their respective officers, directors, employees, agents, advisors,
attorneys-in-fact or affiliates have made any representations or warranties to it and that no act
by any Agent hereafter taken, including any review of the affairs of a Loan Party or any affiliate
of a Loan Party, shall be deemed to constitute any representation or warranty by any Agent to any
Lender. Each Lender represents to the Agents that it has, independently and without reliance upon
any Agent or any other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their affiliates and
made its own decision to make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it




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will, independently and without reliance upon any Agent or any other Lender, 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 Credit Documents, and to make such investigation as it deems necessary to inform itself as to
the business, operations, property, financial and other condition and creditworthiness of the Loan
Parties and their affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent
shall not have any duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial or otherwise),
prospects or creditworthiness of any Loan Party or any affiliate of a Loan Party that may come into
the possession of the Administrative Agent or any of its officers, directors, employees, agents,
advisors, attorneys-in-fact or affiliates. 


          9.7 Indemnification. The Lenders agree to indemnify
each Agent and its officers, directors, employees, affiliates, agents, advisors and controlling
persons (each, an “Agent Indemnitee”) (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to their respective
Aggregate Exposure Percentages in effect on the date on which indemnification is sought under this
Section (or, if indemnification is sought after the date upon which the Commitments shall have
terminated and the Loans shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever that may at any time (whether before or after the payment of
the Loans) be imposed on, incurred by or asserted against such Agent Indemnitee in any way relating
to or arising out of, the Commitments, this Agreement, any of the other Credit Documents or any
documents contemplated by or referred to herein or therein or the transactions contemplated hereby
or thereby or any action taken or omitted by such Agent Indemnitee under or in connection with any
of the foregoing; provided that no Lender shall be liable for the payment of any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent Indemnitee’s gross negligence, intentional
breach or willful misconduct. The agreements in this Section shall survive the payment of the
Loans and all other amounts payable hereunder. 



          9.8 Agent in Its Individual Capacity. Each Agent
and its affiliates may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With respect to its Loans
made or renewed by it and with respect to any Letter of Credit issued or participated in by it,
each Agent shall have the same rights and powers under this Agreement and the other Credit
Documents as any Lender and may exercise the same as though it were not an Agent, and the terms
“Lender” and “Lenders” shall include each Agent
in its individual capacity.



           9.9 Successor
Administrative Agent.  The Administrative Agent may resign as Administrative Agent upon 30
days’ notice to the Lenders and the Borrower. If the Administrative Agent shall resign as
Administrative Agent under this Agreement and the other Credit Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which successor agent shall
(unless an Event of Default under Section 8(a), Section 8(f) or Section 8(g) with respect to the Borrower shall have occurred and be continuing) be subject to approval by the Borrower (which
approval shall not be unreasonably withheld or delayed), whereupon such successor agent shall
succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative
Agent” shall mean such




66









 







successor agent effective upon such appointment and approval, and the former Administrative Agent’s
rights, powers and duties as Administrative Agent shall be terminated, without any other or further
act or deed on the part of such former Administrative Agent or any of the parties to this Agreement
or any holders of the Loans. If no successor agent has accepted appointment as Administrative
Agent by the date that is 10 days following a retiring Administrative Agent’s notice of
resignation, the retiring Administrative Agent’s resignation shall nevertheless thereupon become
effective, and the Lenders shall assume and perform all of the duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided
for above. After any retiring Administrative Agent’s resignation as Administrative Agent, the
provisions of this Section 9 and of Section 10.5 shall continue to inure to its
benefit.



          9.10 Documentation Agent and Syndication Agent. Neither the Documentation Agent nor the
Syndication Agent shall have any duties or responsibilities hereunder in its capacity as
such.



SECTION 10. MISCELLANEOUS



          10.1   Amendments and Waivers. Neither this Agreement, any other Credit Documents, nor any
terms hereof or thereof may be amended, supplemented or modified except in accordance with the
provisions of this Section 10.1. The Required Lenders and each Loan Party party to the relevant
Credit Documents may, or, with the written consent of the Required Lenders, the Administrative
Agent and each Loan Party party to the relevant Credit Documents may, from time to time, (a) enter
into written amendments, supplements or modifications hereto and to the other Credit Documents for
the purpose of adding any provisions to this Agreement or the other Credit Documents or changing in
any manner the rights of the Lenders or of the Loan Parties hereunder or thereunder or (b) waive,
on such terms and conditions as the Required Lenders or the Administrative Agent, as the case may
be, may specify in such instrument, any of the requirements of this Agreement or the other Credit
Documents or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification shall (i)
forgive the principal amount or extend the final scheduled date of maturity of any Loan, reduce the
stated rate of any interest or fee payable hereunder (except (x) in connection with the waiver of
applicability of any post-default increase in interest rates (which waiver shall be effective with
the consent of the Required Lenders) and (y) that any amendment or modification of defined terms
used in the financial covenants in this Agreement shall not constitute a reduction in the rate of
interest or fees for purposes of this clause (i)) or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender’s Revolving Commitment,
in each case without the written consent of each Lender directly affected thereby; provided that in
the event of increases to the Total Revolving Commitment pursuant to Section 2.20, only the consent
of the Lenders committing to such increase shall be required; (ii) eliminate or reduce the voting
rights of any Lender under this Section 10.1 without the written consent of such Lender; (iii)
reduce any percentage specified in the definition of Required Lenders, consent to the assignment or
transfer by the Borrower of any of its rights and obligations under this Agreement and the other
Credit Documents, release all or substantially all of the Collateral or release all or
substantially all of the Guarantors from their obligations under the Guarantee and Collateral
Agreement, in each case without the written consent of all Lenders; (iv) amend, modify or waive
any provision of Section 9 or any other provision of any Credit Documents that affects the
Administrative Agent without the written consent of the Administrative Agent; (v) amend, modify or
waive any provision of Section 2.3 or 2.4 without the written consent of the Swingline Lender; (vi)
amend, modify or waive any provision of Section 3 without the written consent of the Issuing
Lender; (vii) amend, modify or



67









 







waive Section 2.1(a)(ii)(B)(y) without the consent of all Lenders; (viii) amend, modify or
waive Section 8.1(m) without the consent of all Lenders; (ix) amend, modify or waive Section 2.21
without the consent of all Lenders; (x) amend, modify or waive Section 2.14 without the consent of
all Lenders; or (xi) amend, modify or waive any provision of Exhibit I (except for inserting the
appropriate date and similar execution details when completing the execution form of the Parent
Guarantee) or of the Parent Guarantee without the consent of all Lenders. Any such waiver and any
such amendment, supplement or modification shall apply equally to each of the Lenders and shall be
binding upon the Loan Parties, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Loan Parties, the Lenders and the Administrative Agent shall
be restored to their former position and rights hereunder and under the other Credit Documents, and
any Default or Event of Default waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of Default, or impair any right
consequent thereon. 



     Notwithstanding the foregoing, this Agreement may be amended (or amended and
restated) with the written consent of the Required Lenders, the Administrative Agent and the
Borrower (a) to add one or more additional credit facilities to this Agreement and to permit the
extensions of credit from time to time outstanding thereunder and the accrued interest and fees in
respect thereof to share ratably in the benefits of this Agreement and the other Credit Documents
with the Revolving Extensions of Credit and the accrued interest and fees in respect thereof and
(b) to include appropriately the Lenders holding such credit facilities in any determination of the
Required Lenders.



          10.2. Notices. All
notices, requests and demands
to or upon the respective
parties hereto to be effective
shall be in writing (including
by telecopy), and, unless
otherwise expressly provided
herein, shall be deemed to
have been duly given or made
when delivered, or three
Business Days after being
deposited in the mail, postage
prepaid, or, in the case of
telecopy notice, when
received, addressed as follows
in the case of the Borrower
and the Administrative Agent,
and as set forth in an
administrative questionnaire
delivered to the
Administrative Agent in the
case of the Lenders, or to
such other address as may be
hereafter notified by the
respective parties hereto:



	 	 	 
	Borrower:
	 	 
	 

	 	Space Systems/Loral, Inc.
	 

	 	3825 Fabian Way
	 

	 	Palo Alto, CA 94303
	 

	 	Attention: Ron Haley
	 

	 	Tel: (650) 852-7205
	 

	 	Fax: (650) 852-6417
	 
	 	 
	with a copy to:

	 	Loral Space & Communications Inc.
	 

	 	600 Third Avenue
	 

	 	New York, NY 10016
	 

	 	Attention: Richard Mastoloni,
Senior Vice President and Treasurer
	 

	 	Tel: (212) 338-5605
	 

	 	Fax: (212) 867-9167
	 
	 	 
	Administrative Agent:

	 	JPMorgan Chase Bank, N.A.
	 

	 	270 Park Avenue, Floor 4
	 

	 	New York, New York 10017
	 

	 	Attention: Randolph Cates






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	 	Telecopy: (212) 270-8997
	 

	 	Telephone: (212) 270-6637
	 
	 	 
	with a copy to:

	 	JPMorgan Chase Bank, N.A.
	 

	 	Agent Bank Services Group
	 

	 	1111 Fannin St., Floor 10
	 

	 	Houston, Texas 77002
	 

	 	Attention: Omar Jones
	 

	 	Telecopy: (713) 750-7912
	 

	 	Telephone: (713) 750-2938





provided that any notice, request or demand to or upon the Administrative Agent or the
Lenders shall not be effective until received.



Notices and other communications to the Lenders hereunder may be delivered or furnished by
electronic communications pursuant to procedures approved by the Administrative Agent; provided
that the foregoing shall not apply to notices pursuant to Section 2 unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the Borrower may, in
its discretion, agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided that approval of such procedures may
be limited to particular notices or communications.




          10.3. No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or any Lender, any right, remedy, power or
privilege hereunder or under the other Credit Documents shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by
law. 


          10.4 Survival of
Representations and Warranties. All representations and warranties made hereunder, in the
other Credit Documents and in any document, certificate or statement delivered pursuant hereto or
in connection herewith shall survive the execution and delivery of this Agreement and the making of
the Loans and other extensions of credit hereunder.



          10.5 Payment of Expenses and Taxes. The Borrower agrees (a) to pay or reimburse the
Administrative Agent for its reasonable costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or modification to, this
Agreement and the other Credit Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions contemplated hereby and
thereby, including the reasonable and documented fees and disbursements of counsel to the
Administrative Agent and filing and recording fees and expenses, with statements with respect to
the foregoing to be submitted to the Borrower prior to the Closing Date (in the case of amounts to
be paid on the Closing Date) and from time to time thereafter on a quarterly basis or such other
periodic basis as the Administrative Agent shall deem appropriate, (b) to pay or reimburse each
Lender and the Administrative Agent for its reasonable costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement, the other Credit Documents
and any such other documents, including the documented fees and disbursements of counsel (including the allocated fees and



69









 







expenses of in-house counsel to the extent such counsel performs services that would otherwise be
performed by outside counsel) to each Lender and of counsel to the Administrative Agent, (c) to
pay, indemnify, and hold each Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or resulting from any delay
in paying, stamp, excise and other taxes (other than taxes excluded from the definition of
“Non-Excluded Taxes” in Section 2.16(a)), if any, that may be payable or determined to be payable
in connection with the execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of, or any waiver or
consent under or in respect of, this Agreement, the other Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the Administrative Agent and their
respective officers, directors, employees, affiliates, agents, advisors and controlling persons
(each, an “Indemnitee”) harmless from and against any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind
or nature whatsoever with respect to or arising out of defending, prosecuting or complying with any
proceeding, action or investigation arising out of or relating to the execution, delivery,
enforcement, performance and administration of this Agreement, the other Credit Documents and any
such other documents, including any of the foregoing relating to the use of proceeds of the Loans
or the violation of, noncompliance with or liability under, any Environmental Law applicable to the
operations of any Group Member or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any Indemnitee against any Loan
Party under any Credit Documents (all the foregoing in this clause (d), collectively, the
“Indemnified Liabilities”), provided, that the Borrower shall have no obligation hereunder to any
Indemnitee with respect to Indemnified Liabilities to the extent such Indemnified Liabilities are
found by a final and nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence, intentional breach or willful misconduct of such Indemnitee. Without
limiting the foregoing, and to the extent permitted by applicable law, the Borrower agrees not to
assert and to cause its Subsidiaries not to assert, and hereby waives and agrees to cause its
Subsidiaries to waive, all rights for contribution or any other rights of recovery with respect to
all claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature, under or related to Environmental Laws, that any of them might have by
statute or otherwise against any Indemnitee. All amounts due under this Section 10.5 shall be
payable not later than 10 days after written demand therefor. Statements payable by the Borrower
pursuant to this Section 10.5 shall be submitted to Richard Mastoloni (Telephone No. (212)
338-5605) (Telecopy No. (212) 867-9167), at the address of Loral set forth in Section 10.2, or to
such other Person or address as may be hereafter designated by the Borrower in a written notice to
the Administrative Agent. The agreements in this Section 10.5 shall survive repayment of the Loans
and all other amounts payable hereunder. 


          10.6 Successors and Assigns; Participations and
Assignments. (a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns permitted hereby
(including any affiliate of the Issuing Lender that issues any Letter of Credit), except that (i)
the Borrower may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment or transfer by the
Borrower without such consent shall be null and void) and (ii) no Lender may assign or otherwise
transfer its rights or obligations hereunder except in accordance with this Section.(i) Subject to
the conditions set forth in paragraph (b)(ii) below, any Lender may assign
to one or more assignees (each, an “Assignee”) all or a portion of its rights and
obligations under



70









 







this Agreement (including all or a portion of its Commitments and the Loans at
the time owing to it) with the prior written consent of the Borrower (such consent not to be
unreasonably withheld or delayed), provided that no consent of the Borrower shall be
required for an assignment to a Lender, an affiliate of a Lender, an Approved Fund (as defined
below) or, if an Event of Default under Section 8(a), (f) or (g) has occurred and is continuing,
any other Person other than a Competing Person.




     (ii) Assignments shall be subject to the following additional conditions:




     (A) except in the case of an assignment to a Lender, an affiliate of a Lender or an
Approved Fund or an assignment of the entire remaining amount of the assigning Lender’s
Commitments or Loans under the Revolving Facility, the amount of the Commitments or Loans of
the assigning Lender subject to each such assignment (determined as of the date the
Assignment and Assumption with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent, provided that (1) no such consent of the Borrower shall be
required if an Event of Default has occurred and is continuing and (2) such amounts shall be
aggregated in respect of each Lender and its affiliates or Approved Funds, if any;




     (B) (1) the parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500
and (2) the assigning Lender shall have paid in full any amounts owing by it to the
Administrative Agent;




     (C) the Assignee, if it shall not be a Lender, shall deliver to the Administrative
Agent an administrative questionnaire in which the Assignee designates one or more credit
contacts to whom all syndicate-level information (which may contain material non-public
information about the Borrower and its Affiliates and their related parties or their
respective securities) will be made available and who may receive such information in
accordance with the assignee’s compliance procedures and applicable laws, including Federal
and state securities laws; and




     (D) the Assignee, if it shall be Holdings or its affiliates, shall have no voting
rights as a Lender (it being understood that its Revolving Commitment or Revolving
Extensions of Credit shall be disregarded in determining Required Lenders).


For the purposes of this Section 10.6, “Approved Fund” means any Person (other than a natural
person) that is engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is administered or managed by
(a) a Lender, (b) an affiliate of a Lender or (c) an entity or an affiliate of an entity that
administers or manages a Lender.




          (iii) Subject to acceptance and recording thereof pursuant to paragraph (b)(iv) below, from
and after the effective date specified in each Assignment and Assumption the Assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under this Agreement,



71









 







and the assigning Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Assumption, be released from its obligations under this Agreement (and, in the case
of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue to be entitled to
the benefits of Sections 2.15, 2.16, 2.17 and 10.5). Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with this Section 10.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a participation in such rights
and obligations in accordance with paragraph (c) of this Section.



          (iv) The Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the Commitments of, and
principal amount of the Loans and L/C Obligations owing to, each Lender pursuant to the terms
hereof from time to time (the “Register”). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent, the Issuing Lender and the Lenders may
treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender
hereunder for all purposes of this Agreement, notwithstanding notice to the contrary.



          (v) Upon its receipt of a duly completed Assignment and Assumption executed by an assigning
Lender and an Assignee, the Assignee’s completed administrative questionnaire (unless the Assignee
shall already be a Lender hereunder), the processing and recordation fee referred to in
paragraph (b) of this Section and any written consent to such assignment required by paragraph (b)
of this Section, the Administrative Agent shall accept such Assignment and Assumption and record
the information contained therein in the Register. No assignment shall be effective for purposes
of this Agreement unless it has been recorded in the Register as provided in this paragraph.



          (c)(i) Any Lender may, without the consent of the Borrower or the Administrative Agent, sell
participations to one or more banks or other entities (a “Participant”) in all or a portion
of such Lender’s rights and obligations under this Agreement (including all or a portion of its
Commitments and the Loans owing to it); provided that (A) such Lender’s obligations under
this Agreement shall remain unchanged, (B) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (C) the Borrower, the Administrative
Agent, the Issuing Lender and the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender’s rights and obligations under this Agreement. Any
agreement pursuant to which a Lender sells such a participation shall provide that such Lender
shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement may provide that
such Lender will not, without the consent of the Participant, agree to any amendment, modification
or waiver that (1) requires the consent of each Lender directly affected thereby pursuant to the
proviso to the second sentence of Section 10.1 and (2) directly affects such Participant. Subject
to paragraph (c)(ii) of this Section, the Borrower agrees that each Participant shall be entitled
to the benefits of Sections 2.15, 2.16 and 2.17 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section. To the extent
permitted by law, each Participant also shall be entitled to the



72









 







benefits of Section 10.7(b) as though it were a Lender, provided such Participant shall be
subject to Section 10.7(a) as though it were a Lender.



          (ii) A Participant shall not be entitled to receive any greater payment under Section 2.15 or
2.16 than the applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to such Participant is
made with the Borrower’s prior written consent. Any Participant that is a Non-U.S. Lender shall
not be entitled to the benefits of Section 2.16 unless such Participant complies with Section
2.16(d).



          (d) Any Lender may at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge or
assignment of a security interest shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or Assignee for such Lender as a party hereto.



          (e) The Borrower, upon receipt of written notice from the relevant Lender, agrees to issue
Notes to any Lender requiring Notes to facilitate transactions of the type described in paragraph
(d) above.



          10.7 Adjustments; Set-off. (a) Except to the extent that this Agreement, any other
Credit Documents or a court order expressly provides for payments to be allocated to a particular
Lender or to the Lenders under the Revolving Facility, if any Lender (a “Benefitted
Lender”) shall receive any payment of all or part of the Obligations owing to it (other than in
connection with an assignment made pursuant to Section 10.6), or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 8(g), or otherwise), in a greater proportion than any such payment to
or collateral received by any other Lender, if any, in respect of the Obligations owing to such
other Lender, such Benefitted Lender shall purchase for cash from the other Lenders a participating
interest in such portion of the Obligations owing to each such other Lender, or shall provide such
other Lenders with the benefits of any such collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral ratably with each of
the Lenders; provided, however, that if all or any portion of such excess payment
or benefits is thereafter recovered from such Benefitted Lender, such purchase shall be rescinded,
and the purchase price and benefits returned, to the extent of such recovery, but without
interest. 


          (b) In addition to any rights and remedies of the Lenders provided by law, each Lender shall
have the right, without notice to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any Obligations becoming due and payable
by the Borrower (whether at the stated maturity, by acceleration or otherwise), to apply to the
payment of such Obligations, by setoff or otherwise, any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits, indebtedness or claims,
in any currency, in each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender, any affiliate thereof or any of their
respective branches or agencies to or for the credit or the account of the Borrower. Each Lender
agrees promptly to notify the Borrower and the Administrative Agent



73









 







after any such application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such application.



          10.8 Counterparts. This Agreement may be executed by one or more of the parties to
this Agreement on any number of separate counterparts, and all of said counterparts taken together
shall be deemed to constitute one and the same instrument. Delivery of an executed signature page
of this Agreement by facsimile or email transmission shall be effective as delivery of a manually
executed counterpart hereof. A set of the copies of this Agreement signed by all the parties shall
be lodged with the Borrower and the Administrative Agent.


          10.9 Severability. Any provision of
this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. 


          10.10 Integration. This Agreement and the other Credit Documents represent the
entire agreement of the Borrower, the Administrative Agent and the Lenders with respect to the
subject matter hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Credit
Documents. 


          10.11 GOVERNING LAW.
THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK. 


          10.12 Submission To Jurisdiction; Waivers. The Borrower, the Administrative Agent and each
Lender hereby irrevocably and unconditionally:


     (a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Credit Documents to which it is a
party, or for recognition and enforcement of any judgment in respect thereof, to the non-exclusive
general jurisdiction of the courts of the State of New York, the courts of the United States for
the Southern District of New York, and appellate courts from any thereof;




     (b) consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;




     (c) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of
mail), postage prepaid, to the Borrower, as the case may be at its address set forth in
Section 10.2 or at such other address of which the Administrative Agent shall have been
notified pursuant thereto;




     (d) agrees that nothing herein shall affect the right to effect service of process in
any other manner permitted by law or shall limit the right to sue in any other jurisdiction;
and




     (e) waives, to the maximum extent not prohibited by law, any right it may have to claim
or recover in any legal action or proceeding referred to in this Section any special,
exemplary, punitive or consequential damages.



74









 






          
10.13 Acknowledgements. The Borrower hereby acknowledges that:

     (a)
it has been advised by
counsel in the negotiation, execution and delivery of this Agreement and the other Credit
Documents;




     (b) neither the Administrative Agent nor any Lender has any fiduciary relationship with
or duty to the Borrower arising out of or in connection with this Agreement or any of the
other Credit Documents, and the relationship between Administrative Agent and Lenders, on
one hand, and the Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and




     (c) no joint venture is created hereby or by the other Credit Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or among the
Borrower and the Lenders.



          10.14 Releases of Guarantees and Liens. (a) Notwithstanding anything to the contrary
contained herein or in any other Credit Documents, the Administrative Agent is hereby irrevocably
authorized by each Lender (without requirement of notice to or consent of any Lender except as
expressly required by Section 10.1) to take any action requested by the Borrower having the effect
of releasing any Collateral or guarantee obligations (i) to the extent necessary to permit
consummation of any transaction not prohibited by any Credit Documents or that has been consented
to in accordance with Section 10.1 or (ii) under the circumstances described in paragraph (b)
below. 

     (b)
At such time as the Loans, the Reimbursement Obligations and the other obligations under the
Credit Documents (other than obligations under or in respect of Swap Agreements) shall have been
paid in full, the Commitments have been terminated and no Letters of Credit shall be outstanding,
the Collateral shall be released from the Liens created by the Security Documents, and the Security
Documents and all obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Loan Party under the Security Documents shall terminate, all
without delivery of any instrument or performance of any act by any Person.



          10.15 Confidentiality. Each of the Administrative Agent and each Lender agrees to keep
confidential all non-public information provided to it by any Loan Party, the Administrative Agent
or any Lender pursuant to or in connection with this Agreement; provided that nothing
herein shall prevent the Administrative Agent or any Lender from disclosing any such information
(a) to the Administrative Agent, any other Lender or any affiliate thereof, (b) subject to an
agreement to comply with the provisions of this Section, to any actual or prospective Transferee or
any direct or indirect counterparty to any Swap Agreement (or any professional advisor to such
counterparty), (c) to its employees, directors, agents, attorneys, accountants and other
professional advisors or those of any of its affiliates, (d) upon the request or demand of any
Governmental Authority, (e) in response to any order of any court or other Governmental Authority
or as may otherwise be required pursuant to any Requirement of Law, (f) if requested or required to
do so in connection with any litigation or similar proceeding, (g) that has been publicly
disclosed, (h) to the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with ratings issued with respect to such Lender, or (i) in
connection with the exercise of any remedy hereunder or under any
other Credit Documents. 

     Each
Lender acknowledges that information furnished to it pursuant to this



75









 







Agreement or the other Credit Documents may include material non-public information concerning
the Borrower and its Affiliates and their related parties or their respective securities, and
confirms that it has developed compliance procedures regarding the use of material non-public
information and that it will handle such material non-public information in accordance with those
procedures and applicable law, including Federal and state securities laws.



          All information, including requests for waivers and amendments, furnished by the Borrower or
the Administrative Agent pursuant to, or in the course of administering, this Agreement or the
other Credit Documents will be syndicate-level information, which may contain material non-public
information about the Borrower and its Affiliates and their related parties or their respective
securities. Accordingly, each Lender represents to the Borrower and the Administrative Agent that
it has identified in its administrative questionnaire a credit contact who may receive information
that may contain material non-public information in accordance with its compliance procedures and
applicable law, including Federal and state securities laws.



          10.16 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.



[Remainder of page left intentionally blank]




76









 





          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and
delivered by their proper and duly authorized officers as of the day and year first above written.



	 	 	 	 	 
	 	SPACE SYSTEMS/LORAL, INC.

 	 
	 	By:  	/s/ Richard P. Mastoloni
 	 
	 	 	Name:  	Richard Mastoloni 	 
	 	 	Title:  	Senior Vice President and Treasurer 	 
	 




 









 





	 	 	 	 	 
	 	JPMORGAN CHASE BANK, N.A., as 
Administrative Agent
and as a Lender

 	 
	 	By:  	/s/ Randolph Cates
 	 
	 	 	Name:  	Randolph Cates 	 
	 	 	Title:  	Executive Director 	 
	 




 









 





	 	 	 	 	 
	 	ING Bank N.V., as Syndication Agent and as a Lender

 	 
	 	By:  	/s/ Wim Steenbakkers
 	 
	 	 	Name:  	Wim Steenbakkers 	 
	 	 	Title:  	Managing Director, Structure Finance,
Telecom, Media & Technology Finance 	 



	 	 	 	 	 
	 	By:  	                                              /s/ Oliver Petersen
 	 
	 	 	Name:  	Oliver Petersen 	 
	 	 	Title:  	Vice President, Structured Finance,
Telecom, Media & Technology Finance 	 
	 




 









 





	 	 	 	 	 
	 	BANK OF AMERICA, N.A., as Documentation 
Agent and as
a Lender

 	 
	 	By:  	/s John Kushnerick
 	 
	 	 	Name:  	John Kushnerick 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	CREDIT SUISSE, CAYMAN ISLANDS BRANCH, as a Lender

 	 
	 	By:  	/s/ Karim Blasetti
 	 
	 	 	Name:  	Karim Blasetti 	 
	 	 	Title:  	Vice President 	 
	 	 	 
	 	By:  	                                              /s/ Mikhail Faybusovich
 	 
	 	 	Name:  	Mikhail Faybusovich 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	MORGAN STANLEY SENIOR FUNDING, INC., 
as a Lender


 	 
	 	By:  	/s/ Andrew W. Earls
 	 
	 	 	Name:  	Andrew Earls 	 
	 	 	Title:  	Vice President 	 



 









 






	 	 	 	 	 



	 	 	 	 	 
	 	UBS LOAN FINANCE LLC, as a Lender

 	 
	 	By:  	/s/ David B. Julie
 	 
	 	 	Name:  	David B. Julie 	 
	 	 	Title:  	Associate Director Banking Products
Services, US 	 
	 	 	 
	 	By:  	                                              /s/ Irja R. Otsa
 	 
	 	 	Name:  	Irja R. Otsa 	 
	 	 	Title:  	Associate Director Banking Products
Services, US