Document:

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                        EX-10.5
                 Continuing Guaranty

Coast

Continuing Guaranty

Borrower:  Direct Sales International, Inc.

Guarantor: Symposium Corporation

Date:      January 28, 2000

            This Continuing Guaranty is executed by the above-named guarantor
(the "Guarantor"), as of the above date, in favor of COAST BUSINESS CREDIT(R), a
division of Southern Pacific Bank ("Coast"), a California corporation, with
offices at 12121 Wilshire Boulevard, Suite 1400, Los Angeles, California 90025,
with respect to the Indebtedness of the above-named borrower (the "Borrower").

1. Continuing Guaranty. Guarantor hereby unconditionally guarantees and promises
to pay on demand to Coast, at the address indicated above, or at such other
address as Coast may direct, in lawful money of the United States, and to
perform for the benefit of Coast, all Indebtedness of Borrower now or hereafter
owing to or held by Coast. As used herein, the term "Indebtedness" is used in
its most comprehensive sense and shall mean and include without limitation: (a)
any and all debts, duties, obligations, liabilities, representations, warranties
and guaranties of Borrower or any one or more of them to Coast, heretofore, now,
or hereafter made, incurred, or created, however arising, whether voluntary or
involuntary, due or not due, absolute or contingent, liquidated or unliquidated,
certain or uncertain, determined or undetermined, monetary or non-monetary,
written or oral, and whether Borrower may be liable individually or jointly with
others, and regardless of whether recovery thereon may be or hereafter become
barred by any statute of limitations, discharged or uncollectible in any
bankruptcy, insolvency or other proceeding, or otherwise unenforceable; and (b)
any and all amendments, modifications, renewals and extensions of any or all of
the foregoing, including without limitation amendments, modifications, renewals
and extensions which are evidenced by any new or additional instrument, document
or agreement; and (c) any and all reasonable attorneys' fees, court costs, and
collection charges incurred in endeavoring to collect or enforce any of the
foregoing against Borrower, Guarantor, or any other person liable thereon
(whether or not suit be brought) and any other expenses of, for or incidental to
collection thereof. As used herein, the term "Borrower" shall include any
successor to the business and assets of Borrower, and shall also include
Borrower in its capacity as a debtor or debtor in possession under the federal
Bankruptcy Code, and any trustee, custodian or receiver for Borrower or any of
its assets, should Borrower hereafter become the subject of any bankruptcy or
insolvency proceeding, voluntary or involuntary; and all indebtedness,
liabilities and obligations incurred by any such person shall be included in the
Indebtedness guaranteed hereby. This Guaranty is given in consideration for
credit and other financial accommodations which may, from time to time, be given
by Coast to Borrower in Coast's sole discretion, but Guarantor acknowledges and
agrees that acceptance by Coast of this Guaranty shall not constitute a
commitment of any kind by Coast to extend such credit or other financial
accommodation to Borrower or to permit Borrower to incur Indebtedness to Coast.
All sums due under this Guaranty shall bear interest from the date due until the
date paid at the highest rate charged with respect to any of the Indebtedness.

2. Waivers. Guarantor hereby waives: (a) presentment for payment, notice of
dishonor, demand, protest, and notice thereof as to any instrument, and all
other notices and demands to which Guarantor might be entitled, including
without limitation notice of all of the following: the acceptance hereof; the
creation, existence, or acquisition of any Indebtedness; the amount of the
Indebtedness from time to time outstanding; any foreclosure sale or other
disposition of any property which secures any or all of the Indebtedness or
which secures the obligations of any other guarantor of any or all of the
Indebtedness; any adverse change in Borrower's financial position; any other
fact which might increase Guarantor's risk; any default, partial payment or
non-payment of all or any part of the Indebtedness; the occurrence of any other
Event of Default (as hereinafter defined); any and all agreements and
arrangements between Coast and Borrower and any changes, modifications, or
extensions thereof, and any revocation, modification or release of any guaranty
of any or all of the Indebtedness by any person (including without limitation
any other person signing this Guaranty); (b) any right to require Coast to
institute suit against, or to exhaust its
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rights and remedies against, Borrower or any other person, or to proceed against
any property of any kind which secures all or any part of the Indebtedness, or
to exercise any right of offset or other right with respect to any reserves,
credits or deposit accounts held by or maintained with Coast or any indebtedness
of Coast to Borrower, or to exercise any other right or power, or pursue any
other remedy Coast may have; (c) any defense arising by reason of any disability
or other defense of Borrower or any other guarantor or any endorser, co-maker or
other person, or by reason of the cessation from any cause whatsoever of any
liability of Borrower or any other guarantor or any endorser, co-maker or other
person, with respect to all or any part of the Indebtedness, or by reason of any
act or omission of Coast or others which directly or indirectly results in the
discharge or release of Borrower or any other guarantor or any other person or
any Indebtedness or any security therefor, whether by operation of law or
otherwise; (d) any defense arising by reason of any failure of Coast to obtain,
perfect, maintain or keep in force any security interest in, or lien or
encumbrance upon, any property of Borrower or any other person; (e) any defense
based upon any failure of Coast to give Guarantor notice of any sale or other
disposition of any property securing any or all of the Indebtedness, or any
defects in any such notice that may be given, or any failure of Coast to comply
with any provision of applicable law in enforcing any security interest in or
lien upon any property securing any or all of the Indebtedness including, but
not limited to, any failure by Coast to dispose of any property securing any or
all of the Indebtedness in a commercially reasonable manner; (f) any defense
based upon or arising out of any bankruptcy, insolvency, reorganization,
arrangement, readjustment of debt, liquidation or dissolution proceeding
commenced by or against Borrower or any other guarantor or any endorser,
co-maker or other person, including without limitation any discharge of, or bar
against collecting, any of the Indebtedness (including without limitation any
interest thereon), in or as a result of any such proceeding; and (g) the benefit
of any and all statutes of limitation with respect to any action based upon,
arising out of or related to this Guaranty. Until all of the Indebtedness has
been paid, performed, and discharged in full, nothing shall discharge or satisfy
the liability of Guarantor hereunder except the full performance and payment of
all of the Indebtedness. If any claim is ever made upon Coast for repayment or
recovery of any amount or amounts received by Coast in payment of or on account
of any of the Indebtedness, because of any claim that any such payment
constituted a preferential transfer or fraudulent conveyance, or for any other
reason whatsoever, and Coast repays all or part of said amount by reason of any
judgment, decree or order of any court or administrative body having
jurisdiction over Coast or any of its property, or by reason of any settlement
or compromise of any such claim effected by Coast with any such claimant
(including without limitation the Borrower), then and in any such event,
Guarantor agrees that any such judgment, decree, order, settlement and
compromise shall be binding upon Guarantor, notwithstanding any revocation or
release of this Guaranty or the cancellation of any note or other instrument
evidencing any of the Indebtedness, or any release of any of the Indebtedness,
and the Guarantor shall be and remain liable to Coast under this Guaranty for
the amount so repaid or recovered, to the same extent as if such amount had
never originally been received by Coast, and the provisions of this sentence
shall survive, and continue in effect, notwithstanding any revocation or release
of this Guaranty. Guarantor hereby expressly and unconditionally waives all
rights of subrogation, reimbursement and indemnity of every kind against
Borrower, and all rights of recourse to any assets or property of Borrower, and
all rights to any collateral or security held for the payment and performance of
any Indebtedness, including (but not limited to) any of the foregoing rights
which Guarantor may have under any present or future document or agreement with
any Borrower or other person, and including (but not limited to) any of the
foregoing rights which Guarantor may have under any equitable doctrine of
subrogation, implied contract, or unjust enrichment, or any other equitable or
legal doctrine. Neither Coast, nor any of its directors, officers, employees,
agents, attorneys or any other person affiliated with or representing Coast
shall be liable for any claims, demands, losses or damages, of any kind
whatsoever, made, claimed, incurred or suffered by Guarantor or any other party
through the ordinary negligence of Coast, or any of its directors, officers,
employees, agents, attorneys or any other person affiliated with or representing
Coast.

3. Consents. Guarantor hereby consents and agrees that, without notice to or by
Guarantor and without affecting or impairing in any way the obligations or
liability of Guarantor hereunder, Coast may, from time to time before or after
revocation of this Guaranty, do any one or more of the following in Coast's sole
and absolute discretion: (a) accelerate, accept partial payments of, compromise
or settle, renew, extend the time for the payment, discharge, or performance of,
refuse to enforce, and release all or any parties to, any or all of the
Indebtedness; (b) grant any other indulgence to Borrower or any other person in
respect of any or all of the Indebtedness or any other matter; (c) accept,
release, waive, surrender, enforce, exchange, modify, impair, or extend the time
for the performance, discharge, or payment of, any and all property of any kind
securing any or all of the Indebtedness or any guaranty of any or all of the
Indebtedness, or on which Coast at any time may have a lien, or refuse to
enforce its rights or make any compromise or settlement or agreement therefor in
respect of any or all of such property; (d) substitute or add, or take any
action or omit to take any action which results in the release of, any one or
more endorsers or guarantors of all or any part of the Indebtedness, including,
without limitation one or more parties to this

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Guaranty, regardless of any destruction or impairment of any right of
contribution or other right of Guarantor; (e) amend, alter or change in any
respect whatsoever any term or provision relating to any or all of the
Indebtedness, including the rate of interest thereon; (f) apply any sums
received from Borrower, any other guarantor, endorser, or co-signer, or from the
disposition of any collateral or security, to any indebtedness whatsoever owing
from such person or secured by such collateral or security, in such manner and
order as Coast determines in its sole discretion, and regardless of whether such
indebtedness is part of the Indebtedness, is secured, or is due and payable; (g)
apply any sums received from Guarantor or from the disposition of any collateral
or security securing the obligations of Guarantor, to any of the Indebtedness in
such manner and order as Coast determines in its sole discretion, regardless of
whether or not such Indebtedness is secured or is due and payable. Guarantor
consents and agrees that Coast shall be under no obligation to marshal any
assets in favor of Guarantor, or against or in payment of any or all of the
Indebtedness. Guarantor further consents and agrees that Coast shall have no
duties or responsibilities whatsoever with respect to any property securing any
or all of the Indebtedness. Without limiting the generality of the foregoing,
Coast shall have no obligation to monitor, verify, audit, examine, or obtain or
maintain any insurance with respect to, any property securing any or all of the
Indebtedness.

4. Account Stated. Coast's books and records showing the account between it and
the Borrower shall be admissible in evidence in any action or proceeding as
prima facie proof of the items therein set forth. Coast's monthly statements
rendered to the Borrower shall be binding upon the Guarantor (whether or not the
Guarantor receives copies thereof), and shall constitute an account stated
between Coast and the Borrower, unless Coast receives a written statement of the
Borrower's exceptions within 30 days after the statement was mailed to the
Borrower. The Guarantor assumes full responsibility for obtaining copies of such
monthly statements from the Borrower, if the Guarantor desires such copies.

5. Exercise of Rights and Remedies; Foreclosure of Trust Deeds. Guarantor
consents and agrees that, without notice to or by Guarantor and without
affecting or impairing in any way the obligations or liability of Guarantor
hereunder, Coast may, from time to time, before or after revocation of this
Guaranty, exercise any right or remedy it may have with respect to any or all of
the Indebtedness or any property securing any or all of the Indebtedness or any
guaranty thereof, including without limitation judicial foreclosure, nonjudicial
foreclosure, exercise of a power of sale, and taking a deed, assignment or
transfer in lieu of foreclosure as to any such property, and Guarantor expressly
waives any defense based upon the exercise of any such right or remedy,
notwithstanding the effect thereof upon any of Guarantor's rights, including
without limitation, any destruction of Guarantor's right of subrogation against
Borrower and any destruction of Guarantor's right of contribution or other right
against any other guarantor of any or all of the Indebtedness or against any
other person, whether by operation of Sections 580a, 580d or 726 of the
California Code of Civil Procedure, or any comparable provisions of the laws of
any other jurisdiction, or any other statutes or rules of law now or hereafter
in effect, or otherwise. Without limiting the generality of the foregoing: (a)
Guarantor waives all rights and defenses arising out of an election of remedies
by Coast, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for any of the Indebtedness, has destroyed
the guarantor's rights of subrogation and reimbursement against the principal by
the operation of Section 580d of the Code of Civil Procedure or otherwise; (b)
Guarantor further waives all rights and defenses arising out of an election of
remedies by Coast, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for any of the Indebtedness, has destroyed
the guarantor's rights of subrogation, reimbursement and contribution against
any other guarantor of the guaranteed obligation, by the operation of Section
580d of the Code of Civil Procedure or otherwise; (c) Guarantor understands that
if Coast forecloses any present or future trust deed, which secures any or all
of the Indebtedness or which secures any other guaranty of any or all of the
Indebtedness, by nonjudicial foreclosure, Guarantor may, as a result, have a
complete defense to liability under this Guaranty, based on the legal doctrine
of estoppel and Sections 580a, 580d or 726 of the California Code of Civil
Procedure, and Guarantor hereby expressly waives all such defenses; (d)
Guarantor understands and agrees that, in the event Coast in its sole discretion
forecloses any trust deed now or hereafter securing any or all of the
Indebtedness, by nonjudicial foreclosure, Guarantor will remain liable to Coast
for any deficiency, even though Guarantor will lose his right of subrogation
against the Borrower, and even though Guarantor will be unable to recover from
the Borrower the amount of the deficiency for

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which Guarantor is liable, and even though Guarantor may have retained his right
of subrogation against Borrower if Coast had foreclosed said trust deed by
judicial foreclosure as opposed to nonjudicial foreclosure, and even though
absent the waivers set forth herein Guarantor may have had a complete defense to
any liability for any deficiency hereunder; (e) Guarantor understands and agrees
that, in the event Coast in its sole discretion forecloses any trust deed now or
hereafter securing any other guaranty of any or all of the Indebtedness, by
nonjudicial foreclosure, Guarantor will remain liable to Coast for any
deficiency, even though Guarantor will lose his right of subrogation or
contribution against the other guarantor, and even though Guarantor will be
unable to recover from the other guarantor any part of the deficiency for which
Guarantor is liable, and even though Guarantor may have retained his right of
subrogation or contribution against the other guarantor if Coast had foreclosed
said trust deed by judicial foreclosure as opposed to nonjudicial foreclosure,
and even though absent the waivers set forth herein Guarantor may have had a
complete defense to any liability for any deficiency hereunder.

6. Acceleration. Notwithstanding the terms of all or any part of the
Indebtedness, the obligations of the Guarantor hereunder to pay and perform all
of the Indebtedness shall, at the option of Coast, immediately become due and
payable, without notice, and without regard to the expressed maturity of any of
the Indebtedness, in the event: (a) any warranty, representation, statement,
report, or certificate made or delivered to Coast by Borrower or Guarantor, or
any of their respective officers, partners, employees, or agents, is incorrect,
false, untrue, or misleading when given in any material respect; or (b) Borrower
or Guarantor shall fail to pay or perform when due (including any applicable
grace period, if any) all or any part of the Indebtedness; or (c) Guarantor
shall fail to pay or perform when due (including any applicable grace period, if
any) any indebtedness or obligation of Guarantor to Coast or to any parent,
subsidiary or corporate affiliate of Coast, whether under this Guaranty or any
other instrument, document, or agreement heretofore or hereafter entered into;
or (d) any event shall occur which may or does result in the acceleration of the
maturity of any indebtedness of Borrower or Guarantor to others (regardless of
any requirement of notice, opportunity to cure or other condition prior to the
exercise of any right of acceleration); or (e) Borrower or Guarantor shall fail
promptly to perform or comply with any term or condition of any agreement with
any third party which does or may result in a material adverse effect on the
business of Borrower or Guarantor; or (f) there shall be made or exist any levy,
assessment, attachment, seizure, lien, or encumbrance for any cause or reason
whatsoever upon all or any part of the property of Borrower or Guarantor (unless
discharged by payment, release or bond not more than ten days after such event
has occurred); or (g) there shall occur the dissolution, termination of
existence, insolvency, or business failure of Borrower or Guarantor, or the
appointment of a receiver, trustee or custodian for Borrower or Guarantor or all
or any part of the property of either of them, or the assignment for the benefit
of creditors by Borrower or Guarantor, or the commencement of any proceeding by
or against Borrower or Guarantor under any reorganization, bankruptcy,
insolvency, arrangement, readjustment of debt, dissolution or liquidation law or
statute of any jurisdiction, now or hereafter in effect; or (h) Borrower or
Guarantor shall be deceased or declared incompetent by any court or a guardian
or conservator shall be appointed for either of them or for the property of
either of them; or (i) Guarantor or Borrower shall generally not pay their
respective debts as they become due or shall enter into any agreement (whether
written or oral), or offer to enter into any such agreement, with all or a
significant number of its creditors regarding any moratorium or other indulgence
with respect to its debts or the participation of such creditors or their
representatives in the supervision, management, or control of the business of
either of them; or (j) Borrower or Guarantor shall conceal, remove or permit to
be concealed or removed any part of its property, with intent to hinder, delay
or defraud its creditors, or make or suffer any transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law, or shall make any transfer of its property to or for the benefit of any
creditor at a time when other creditors similarly situated have not been paid;
or (k) the board of directors or shareholders of Borrower or Guarantor shall
adopt any resolution or plan for its dissolution or the liquidation of all or
substantially all of its assets; or (l) Guarantor shall revoke this Guaranty or
contest or deny liability under this Guaranty. All of the foregoing are
hereinafter referred to as "Events of Default".

7. Right to Attachment Remedy. Guarantor agrees that, notwithstanding the
existence of any property securing any or all of the Indebtedness, Coast shall
have all of the rights of an unsecured creditor of Guarantor, including without
limitation the right to obtain a temporary protective order and writ of
attachment against Guarantor with respect to any sums due under this Guaranty.
Guarantor further agrees that in the event any property secures the obligations
of Guarantor under this Guaranty, to the extent that Coast, in its sole and
absolute discretion, determines prior to the disposition of such property that
the amount to be realized by Coast therefrom may be less than the indebtedness
of the Guarantor under this Guaranty, Coast shall have all the rights of an
unsecured creditor against Guarantor, including without limitation the right of
Coast, prior to the disposition of said property, to obtain a temporary
protective order and writ of attachment against Guarantor. Guarantor waives the
benefit of Section 483.010(b) of the California Code of Civil Procedure and of
any and all other statutes and rules of law now or hereafter in effect requiring
Coast to first resort to or exhaust all such collateral before seeking or
obtaining any attachment remedy against Guarantor. Coast shall have no liability
to Guarantor as a result thereof, whether or not the actual deficiency realized
by Coast is less than the anticipated deficiency on the basis of which Coast
obtains a temporary protective order or writ of attachment.

8. Indemnity. Guarantor hereby agrees to indemnify Coast and hold Coast harmless
from and against any and all claims, debts, liabilities, demands, obligations,
actions, causes of action, penalties, costs and expenses (including without
limitation attorneys' fees), of every nature, character and description, which
Coast may sustain or incur based upon or

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arising out of any of the Indebtedness, any actual or alleged failure to collect
and pay over any withholding or other tax relating to Borrower or its employees,
any relationship or agreement between Coast and Borrower, any actual or alleged
failure of Coast to comply with any writ of attachment or other legal process
relating to Borrower or any of its property, or any other matter, cause or thing
whatsoever occurred, done, omitted or suffered to be done by Coast relating in
any way to Borrower or the Indebtedness (except any such amounts sustained or
incurred as the result of the gross negligence or willful misconduct of Coast or
any of its directors, officers, employees, agents, attorneys, or any other
person affiliated with or representing Coast). Notwithstanding any provision in
this Guaranty to the contrary, the indemnity agreement set forth in this Section
shall survive any termination or revocation of this Guaranty and shall for all
purposes continue in full force and effect.

9. Subordination. Any and all rights of Guarantor under any and all debts,
liabilities and obligations owing from Borrower to Guarantor, including any
security for and guaranties of any such obligations, whether now existing or
hereafter arising, are hereby subordinated in right of payment to the prior
payment in full of all of the Indebtedness. No payment in respect of any such
subordinated obligations shall at any time be made to or accepted by Guarantor
if at the time of such payment any Indebtedness is outstanding. If any Event of
Default has occurred and subsequent to any cure period, Borrower and any
assignee, trustee in bankruptcy, receiver, or any other person having custody or
control over any or all of Borrower's property are hereby authorized and
directed to pay to Coast the entire unpaid balance of the Indebtedness before
making any payments whatsoever to Guarantor, whether as a creditor, shareholder,
or otherwise; and insofar as may be necessary for that purpose, except for any
permitted payments to Guarantor by Borrower and any permitted advances to
Guarantor by Borrower pursuant to that certain Loan and Security Agreement of
even date herewith between Coast and Borrower, Guarantor hereby assigns and
transfers to Coast all rights to any and all debts, liabilities and obligations
owing from Borrower to Guarantor, including any security for and guaranties of
any such obligations, whether now existing or hereafter arising, including
without limitation any payments, dividends or distributions out of the business
or assets of Borrower. Any amounts received by Guarantor in violation of the
foregoing provisions shall be received and held as trustee for the benefit of
Coast and shall forthwith be paid over to Coast to be applied to the
Indebtedness in such order and sequence as Coast shall in its sole discretion
determine, without limiting or affecting any other right or remedy which Coast
may have hereunder or otherwise and without otherwise affecting the liability of
Guarantor hereunder. Guarantor hereby expressly waives any right to set-off or
assert any counterclaim against Borrower.

10. Revocation. This is a Continuing Guaranty relating to all of the
Indebtedness, including Indebtedness arising under successive transactions which
from time to time continue the Indebtedness or renew it after it has been
satisfied. Guarantor waives all benefits of California Civil Code Section 2815,
and agrees that the obligations of Guarantor hereunder may not be terminated or
revoked in any manner except by giving 90 days' advance written notice of
revocation to Coast at its address above by registered first-class U.S. mail,
postage prepaid, return receipt requested, and only as to new loans made by
Coast to Borrower more than 90 days after actual receipt of such written notice
by Coast. No termination or revocation of this Guaranty shall be effective until
90 days following the date of actual receipt of said written notice of
revocation by Coast. Notwithstanding such written notice of revocation or any
other act of Guarantor or any other event or circumstance, Guarantor agrees that
this Guaranty and all consents, waivers and other provisions hereof shall
continue in full force and effect as to any and all Indebtedness which is
outstanding on or before the 90th day following actual receipt of said written
notice of revocation by Coast, and all extensions, renewals and modifications of
said Indebtedness (including without limitation amendments, extensions, renewals
and modifications which are evidenced by new or additional instruments,
documents or agreements executed before or after expiration of said 90-day
period), and all interest thereon, accruing before or after expiration of said
90-day period, and all attorneys' fees, court costs and collection charges,
incurred before or after expiration of said 90-day period, in endeavoring to
collect or enforce any of the foregoing against Borrower, Guarantor or any other
person liable thereon (whether or not suit be brought) and any other expenses
of, for or incidental to collection thereof.

11. Independent Liability. Guarantor hereby agrees that one or more successive
or concurrent actions may be brought hereon against Guarantor, in the same
action in which Borrower may be sued or in separate actions, as often as deemed
advisable by Coast. The liability of Guarantor hereunder is exclusive and
independent of any other guaranty of any or all of the Indebtedness whether
executed by Guarantor or by any other guarantor (including without limitation
any other persons signing this Guaranty). The liability of Guarantor hereunder
shall not be affected, revoked, impaired, or reduced by any one or more of the
following: (a) the fact that the Indebtedness exceeds the maximum amount of
Guarantor's liability, if any, specified herein or elsewhere (and no agreement
specifying a maximum amount of Guarantor's liability shall be enforceable unless
set forth in a writing signed by Coast or set forth in this Guaranty); or (b)
any direction as to the application of payment by Borrower or by any other
party; or (c) any other continuing or restrictive guaranty or undertaking or any
limitation on the liability of any other guarantor (whether under this Guaranty
or under any

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other agreement); or (d) any payment on or reduction of any such other guaranty
or undertaking; or (e) any revocation, amendment, modification or release of any
such other guaranty or undertaking; or (f) any dissolution or termination of, or
increase, decrease, or change in membership of any Guarantor which is a
partnership. Guarantor hereby expressly represents that it was not induced to
give this Guaranty by the fact that there are or may be other guarantors either
under this Guaranty or otherwise, and Guarantor agrees that any release of any
one or more of such other guarantors shall not release Guarantor from its
obligations hereunder either in full or to any lesser extent.

12. Financial Condition of Borrower. Guarantor is fully aware of the financial
condition of Borrower and is executing and delivering this Guaranty at
Borrower's request and based solely upon its own independent investigation of
all matters pertinent hereto, and Guarantor is not relying in any manner upon
any representation or statement of Coast with respect thereto. Guarantor
represents and warrants that it is in a position to obtain, and Guarantor hereby
assumes full responsibility for obtaining, any additional information concerning
Borrower's financial condition and any other matter pertinent hereto as
Guarantor may desire, and Guarantor is not relying upon or expecting Coast to
furnish to him any information now or hereafter in Coast's possession concerning
the same or any other matter. By executing this Guaranty, Guarantor knowingly
accepts the full range of risks encompassed within a contract of continuing
guaranty, which risks Guarantor acknowledges include without limitation the
possibility that Borrower will incur additional Indebtedness for which Guarantor
will be liable hereunder after Borrower's financial condition or ability to pay
such Indebtedness has deteriorated and/or after bankruptcy or insolvency
proceedings have been commenced by or against Borrower. Guarantor shall have no
right to require Coast to obtain or disclose any information with respect to the
Indebtedness, the financial condition or character of Borrower, the existence of
any collateral or security for any or all of the Indebtedness, the filing by or
against Borrower of any bankruptcy or insolvency proceeding, the existence of
any other guaranties of all or any part of the Indebtedness, any action or
non-action on the part of Coast, Borrower, or any other person, or any other
matter, fact, or occurrence.

13. Reports and Financial Statements of Guarantor. Guarantor shall, at its sole
cost and expense, at any time and from time to time, prepare or cause to be
prepared, and provide to Coast upon Coast's reasonable request (i) such
financial statements and reports concerning Guarantor for such periods of time
as Coast may designate, provided that audited financial statements may not be
required more often that annually; (ii) any other information concerning
Guarantor's business, financial condition or affairs as Coast may request, and
(iii) copies of any and all foreign, federal, state and local tax returns and
reports of or relating to Guarantor as Coast may from time to time request.
Guarantor hereby intentionally and knowingly waives any and all rights and
privileges it may have not to divulge or deliver said tax returns, reports and
other information which are requested by Coast hereunder or in any litigation in
which Coast may be involved relating directly or indirectly to Borrower or to
Guarantor. Guarantor further agrees immediately to give written notice to Coast
of any adverse change in Guarantor's financial condition and of any condition or
event which constitutes an Event of Default under this Guaranty. All reports and
information furnished to Coast hereunder shall be complete, accurate and correct
in all respects. Whenever requested, Guarantor shall further deliver to Coast a
certificate signed by Guarantor warranting and representing that all reports,
financial statements and other documents and information delivered or caused to
be delivered to Coast under this Guaranty, are complete, correct and thoroughly
and accurately present the financial condition of Guarantor, and that there
exists on the date of delivery of said certificate to Coast no condition or
event which constitutes an Event of Default under this Guaranty.

14. Representations and Warranties. Guarantor hereby represents and warrants
that (i) it is in Guarantor's direct interest to assist Borrower in procuring
credit, because Borrower is an affiliate of Guarantor, (ii) this Guaranty has
been duly and validly authorized, executed and delivered and constitutes the
valid and binding obligation of Guarantor, enforceable in accordance with its
terms, and (iii) the execution and delivery of this Guaranty does not violate or
constitute a default under (with or without the giving of notice, the passage of
time, or both) any order, judgment, decree, instrument or agreement to which
Guarantor is a party or by which it or its assets are affected or bound.

15. Costs. Whether or not suit be instituted, Guarantor agrees to reimburse
Coast on demand for all reasonable attorneys' fees and all other reasonable
costs and expenses incurred by Coast in enforcing this Guaranty, or arising out
of or relating in any way to this Guaranty, or in enforcing any of the
Indebtedness against Borrower or Guarantor, or in connection with any property
of any kind securing all or any part of the Indebtedness. Without limiting the
generality of the foregoing, and in addition thereto, Guarantor shall reimburse
Coast on demand for all reasonable attorneys' fees and costs Coast incurs in any
way relating to Guarantor, Borrower or the Indebtedness, in order to: obtain
legal advice; enforce or seek to enforce any of its rights; commence, intervene
in, respond to, or defend any action or proceeding; file, prosecute or defend
any claim or cause of action in any action or proceeding (including without
limitation any probate claim, bankruptcy claim, third-party claim, secured
creditor

                                      -6-
<PAGE>   7

claim, reclamation complaint, and complaint for relief from any stay under the
Bankruptcy Code or otherwise); protect, obtain possession of, sell, lease,
dispose of or otherwise enforce any security interest in or lien on any property
of any kind securing any or all of the Indebtedness; or represent Coast in any
litigation with respect to Borrower's or Guarantor's affairs. In the event
either Coast or Guarantor files any lawsuit against the other predicated on a
breach of this Guaranty, the prevailing party in such action shall be entitled
to recover its attorneys' fees and costs of suit from the non-prevailing party.

16. Notices. Any notice which a party shall be required or shall desire to give
to the other hereunder (except for notice of revocation, which shall be governed
by Section 10 of this Guaranty) shall be given by personal delivery or by
telecopier or by depositing the same in the United States mail, first class
postage pre-paid, addressed to Coast at its address set forth in the heading of
this Guaranty and to Guarantor at its address set forth below the signature
hereon, and such notices shall be deemed duly given on the date of personal
delivery or one day after the date telecopied or 3 business days after the date
of mailing as aforesaid. Coast and Guarantor may change their address for
purposes of receiving notices hereunder by giving written notice thereof to the
other party in accordance herewith. Guarantor shall give Coast immediate written
notice of any change in its address.

17. Claims. Guarantor agrees that any claim or cause of action by Guarantor
against Coast, or any of Coast's directors, officers, employees, agents,
accountants or attorneys, based upon, arising from, or relating to this
Guaranty, or any other present or future agreement between Coast and Guarantor
or between Coast and Borrower, or any other transaction contemplated hereby or
thereby or relating hereto or thereto, or any other matter, cause or thing
whatsoever, whether or not relating hereto or thereto, occurred, done, omitted
or suffered to be done by Coast, or by Coast's directors, officers, employees,
agents, accountants or attorneys, whether sounding in contract or in tort or
otherwise, shall be barred unless asserted by Guarantor by the commencement of
an action or proceeding in a court of competent jurisdiction within Los Angeles
County, California. This provision shall survive any termination of this
Guaranty or any other agreement.

18. Construction; Severability. If more than one person has executed this
Guaranty, the term "Guarantor" as used herein shall be deemed to refer to all
and any one or more such persons and their obligations hereunder shall be joint
and several. Without limiting the generality of the foregoing, if more than one
person has executed this Guaranty, this Guaranty shall in all respects be
interpreted as though each person signing this Guaranty had signed a separate
Guaranty, and references herein to "other guarantors" or words of similar effect
shall include without limitation other persons signing this Guaranty. As used in
this Guaranty, the term "property" is used in its most comprehensive sense and
shall mean all property of every kind and nature whatsoever, including without
limitation real property, personal property, mixed property, tangible property
and intangible property. Words used herein in the masculine gender shall include
the neuter and feminine gender, words used herein in the neuter gender shall
include the masculine and feminine, words used herein in the singular shall
include the plural and words used in the plural shall include the singular,
wherever the context so reasonably requires. If any provision of this Guaranty
or the application thereof to any party or circumstance is held invalid, void,
inoperative or unenforceable, the remainder of this Guaranty and the application
of such provision to other parties or circumstances shall not be affected
thereby, the provisions of this Guaranty being severable in any such instance.

19. General Provisions. Coast shall have the right to seek recourse against
Guarantor to the full extent provided for herein and in any other instrument or
agreement evidencing obligations of Guarantor to Coast, and against Borrower to
the full extent of the Indebtedness. No election in one form of action or
proceeding, or against any party, or on any obligation, shall constitute a
waiver of Coast's right to proceed in any other form of action or proceeding or
against any other party. The failure of Coast to enforce any of the provisions
of this Guaranty at any time or for any period of time shall not be construed to
be a waiver of any such provision or the right thereafter to enforce the same.
All remedies hereunder shall be cumulative and shall be in addition to all
rights, powers and remedies given to Coast by law or under any other instrument
or agreement. Time is of the essence in the performance by Guarantor of each and
every obligation under this Guaranty. If Borrower is a corporation, partnership
or other entity, Guarantor hereby agrees that Coast shall have no obligation to
inquire into the power or authority of Borrower or any of its officers,
directors, partners, or agents acting or purporting to act on its behalf, and
any Indebtedness made or created in reliance upon the professed exercise of any
such power or authority shall be included in the Indebtedness guaranteed hereby.
This Guaranty is the entire and only agreement between Guarantor and Coast with
respect to the guaranty of the Indebtedness of Borrower by Guarantor, and all
representations, warranties, agreements, or undertakings heretofore or
contemporaneously made, which are not set forth herein, are superseded hereby.
No course of dealings between the parties, no usage of the trade, and no parol
or extrinsic evidence of any nature shall be used or be relevant to supplement
or explain or modify any term or provision of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty. The terms and provisions
hereof may not be waived, altered, modified, or amended except in a writing

                                      -7-
<PAGE>   8

executed by Guarantor and a duly authorized officer of Coast. All rights,
benefits and privileges hereunder shall inure to the benefit of and be
enforceable by Coast and its successors and assigns and shall be binding upon
Guarantor and its executors, administrators, representatives, successors and
assigns. Section headings are used herein for convenience only. Guarantor
acknowledges that the same may not describe completely the subject matter of the
applicable Section, and the same shall not be used in any manner to construe,
limit, define or interpret any term or provision hereof.

20. Governing Law; Venue and Jurisdiction. This instrument and all acts and
transactions pursuant or relating hereto and all rights and obligations of the
parties hereto shall be governed, construed, and interpreted in accordance with
the internal laws of the State of California. In order to induce Coast to accept
this Guaranty, and as a material part of the consideration therefor, Guarantor
(i) agrees that all actions or proceedings relating directly or indirectly
hereto shall, at the option of Coast, be litigated in courts located within Los
Angeles County, California, (ii) consents to the jurisdiction of any such court
and consents to the service of process in any such action or proceeding by
personal delivery or any other method permitted by law; and (iii) waives any and
all rights Guarantor may have to transfer or change the venue of any such action
or proceeding.

21. Mutual Waiver of Right to Jury Trial. COAST AND GUARANTOR HEREBY WAIVE THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, CLAIM, LAWSUIT OR PROCEEDING BASED UPON,
ARISING OUT OF, OR IN ANY WAY RELATING TO: (i) THIS GUARANTEE OR ANY SUPPLEMENT
OR AMENDMENT THERETO; OR (ii) ANY OTHER PRESENT OR FUTURE INSTRUMENT OR
AGREEMENT BETWEEN COAST AND GUARANTOR ; OR (iii) ANY BREACH, CONDUCT, ACTS OR
OMISSIONS OF COAST OR GUARANTOR OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES, AGENTS, ATTORNEYS OR ANY OTHER PERSON AFFILIATED WITH OR REPRESENTING
COAST OR GUARANTOR; IN EACH OF THE FOREGOING CASES, WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE.

23. Receipt of Copy. Guarantor acknowledges receipt of a copy of this Guaranty.

BY: SYMPOSIUM CORPORATION

By:  /s/ Ronald Altbach
     ___________________________________
    (Please sign here)

            Ronald Altbach
    ___________________________________
    (Please print or type name here)

Its: CEO, Secretary
    ___________________________________
    (Please print title here)

Address for notices to Guarantor:

410 Park Avenue 18th Floor
_______________________________________

New York, NY 10022
_______________________________________

                                      -8-
<PAGE>   9

STATE OF        NEW YORK      )
         ---------------------
                              ) ss.
COUNTY OF       NEW YORK      )
         ---------------------

            On January 14, 2000, before me, Dawn Gallucci, Notary Public,
personally appeared Ronald Altbach, personally known to me (or proved to me on
the basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.

            Witness my hand and official seal.

            /s/ Dawn Gallucci
            ----------------------------------
            (Seal)

            Dawn Gallucci
            Notary Public, State of New York
            No. 01GA44938542
            Qualified in Richmond County
            Certificate Filed in New York County
            Commission Expires July 25, 2000<PAGE>   1
                                                                  EXECUTION COPY

                        LORAL SPACE & COMMUNICATIONS LTD.

                                8,000,000 Shares
                           of 6% Series D Convertible
                       Redeemable Preferred Stock due 2007
                    (Liquidation Preference $50 per share) (1)

                               PURCHASE AGREEMENT

                                                               February 14, 2000

LEHMAN BROTHERS INC.
         as Representative of the
         several Initial Purchasers named in
         Schedule I hereto
c/o  Lehman Brothers Inc.
         3 World Financial Center
         200 Vesey Street
         New York, New York 10285

Dear Sirs:

                  Loral Space & Communications Ltd., a company organized and
existing under the laws of Bermuda (the "Company"), proposes, subject to the
terms and conditions stated herein, to issue and sell to the several Initial
Purchasers named in Schedule I hereto (the "Initial Purchasers") 8,000,000
shares (the "Firm Securities") of its 6% Series D Convertible Redeemable
Preferred Stock due 2007, liquidation preference $50 per share, par value $0.01
per share (the "Preferred Stock"). In addition, the Company proposes to grant to
the Initial Purchasers an option to purchase from the Company up to an
additional 1,600,000 shares of Preferred Stock (the "Option Securities"), as
provided in Section 2(b) below. The Firm Securities and any Option Securities
purchased by the Initial Purchasers are collectively referred to herein as the
"Securities". Lehman Brothers Inc. ("Lehman") has been appointed to act as
Representative of the Initial Purchasers under this Agreement. The Securities
will be convertible, at the option of the holders thereof, into shares of the
Company's common stock, par value $.01 per share (the "Common Stock"), at the
conversion price of $19.8308 per share, subject to certain adjustments.

----------
     (1) Plus an option to purchase up to 1,600,000 additional shares from the
Company.
<PAGE>   2
                                                                               2

                  The Securities will be offered without being registered under
the Securities Act to qualified institutional buyers in compliance with the
exemption from registration provided by Rule 144A under the Securities Act and
in offshore transactions in reliance on Regulation S.

                  Holders (including subsequent transferees) of the Securities
will have the registration rights set forth in the Registration Rights
Agreement. Pursuant to the Registration Rights Agreement, the Company has agreed
to file with the Commission, under certain circumstances, a shelf registration
statement pursuant to Rule 415 under the Securities Act (the "Shelf Registration
Statement").

         The following terms as used in this Agreement shall have the following
meanings:

                  "Affiliate" shall have the meaning as defined in Rule 144
under the Securities Act.

                  "Business Day" means any Monday through Friday on which
trading is conducted on the NYSE.

                  "Closing Date" shall have the meaning assigned thereto in
Section 3(b).

                  "Commission" means the U.S. Securities and Exchange
Commission.

                  "Common Stock" shall have the meaning assigned thereto in the
first paragraph of this Agreement.

                  "Communications Act" means the Communications Act of 1934.

                  "Cyberstar" shall mean Loral Cyberstar, Inc., a Delaware
corporation.

                  "DTC" means The Depository Trust Company.

                  "Exchange Act" means the Securities Exchange Act of 1934.

                  "Execution Time" means the date and time that this Agreement
is executed and delivered by the parties hereto.

                  "FCC" means the Federal Communications Commission.

                  "Final Memorandum" means the final offering memorandum dated
February 14, 2000, including any information incorporated by reference therein.

                  "First Closing Date" shall have the meaning assigned thereto
in Section 3(a).
<PAGE>   3
                                                                               3

                  "foreign purchasers" shall have the meaning assigned thereto
in Section 4(a).

                  "GTL" means Globalstar Telecommunications Limited, a Bermuda
company.

                  "Globalstar" means Globalstar, L.P., a Delaware limited
partnership.

                  "Initial Purchasers" means the parties named in Schedule I
hereto.

                  "Investment Company Act" means the Investment Company Act of
1940 and the rules and regulations thereunder.

                  "Loral Affiliates" means each of GTL, Globalstar, SS/L,
Cyberstar and SatMex, and any other subsidiary (as defined in Rule 405 under the
Securities Act) of the Company.

                  "LQP" means Loral/QUALCOMM Partnership, L.P., a Delaware
limited partnership and the general partner of LQSS.

                  "LQSS" means Loral/QUALCOMM Satellite Services, L.P., a
Delaware limited partnership and the managing general partner of Globalstar.

                  "Material Adverse Change" means, with respect to any entity,
any material adverse change in or affecting the business, results of operations,
financial condition, owners' equity (stockholders' equity in the case of a
corporation and partners' equity in the case of a partnership) or prospects of
such entity, taken as a whole.

                  "NASD" means the National Association of Securities Dealers,
Inc.

                  "Option" shall have the meaning assigned thereto in Section
2(b).

                  "Option Closing Date" shall have the meaning assigned thereto
in Section 3(b).

                  "Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of Globalstar, L.P. dated as of March 6, 1996,
as amended as of April 8, 1998, and as further amended as of January 26, 1999
and as of February 1, 2000, among LQSS, the Company and certain limited partners
named therein.

                  "Preliminary Memorandum" means the preliminary offering
memorandum, dated February 7, 2000, including any information incorporated by
reference therein.
<PAGE>   4
                                                                               4

                  "Registration Rights Agreement" means the Registration Rights
Agreement dated as of the First Closing Date, among the Company and the Initial
Purchasers.

                  "Regulation S" means Regulation S under the Securities Act.

                  "Rules and Regulations" means the rules and regulations in
effect at any relevant time adopted by the Commission under the Securities Act
or the Exchange Act, as applicable.

                  "SatMex" means Satelites Mexicanos, S.A. de C.V., a company
organized under the laws of Mexico.

                  "Securities Act" means the Securities Act of 1933.

                  "Shelf Registration Statement" shall have the meaning set
forth in the third paragraph of this Agreement.

                  "Skynet" means Loral Skynet, a Delaware corporation.

                  "SpaceCom Credit Agreement" means that certain Amended and
Restated Credit and Participation Agreement among Loral SpaceCom Corporation,
Space Systems/Loral, Inc., certain lending banks, Bank of America National Trust
and Savings Association, as Administrative Agent, and Istituto Bancario San
Paolo Di Torino S.P.A., individually and as Italian Export Financing Arranger
and as Selling Bank, dated as of November 14, 1997, providing for up to $850
million of credit extensions, including any related notes, guarantees,
collateral documents, instruments and agreements executed in connection
therewith, and in each case as amended, modified, renewed, refunded, replaced or
refinanced from time to time.

                  "SS/L" means Space Systems/Loral Inc., a Delaware corporation.

                  "Transfer Agent" means The Bank of New York.

                  The sale of the Firm Securities and any Option Securities to
the Initial Purchasers will be made without registration under the Securities
Act, in reliance on exemptions from the registration requirements of the
Securities Act and the Rules and Regulations. The Initial Purchasers have
advised the Company that the Initial Purchasers will offer and sell the
Securities purchased by them hereunder in accordance with Section 4 as soon as
they deem advisable.

                  In connection with the sale of the Securities, the Company has
prepared the Preliminary Memorandum and the Final Memorandum. Each of the
Preliminary
<PAGE>   5
                                                                               5

Memorandum and the Final Memorandum sets forth certain information concerning
the Company, the Loral Affiliates and the Securities. The Company hereby
confirms that it has authorized the use of the Preliminary Memorandum and the
Final Memorandum in connection with the offer and sale of the Securities by the
Initial Purchasers.

                  Unless stated to the contrary, all references herein to the
Final Memorandum are to the Final Memorandum at the Execution Time and are not
meant to include any amendment or supplement, subsequent to the Execution Time,
and any references herein to the terms "amend", "amendment" or "supplement" with
respect to the Final Memorandum shall be deemed to refer to and include any
information filed under the Exchange Act subsequent to the Execution Time which
is incorporated by reference therein.

                  1. Representations and Warranties of the Company. The Company
represents and warrants to each Initial Purchaser as set forth below in this
Section 1 that:

                  (1) The Preliminary Memorandum, at the date thereof, did not
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading. The Final Memorandum, at the date
hereof, does not, and at each Closing Date will not (and any amendment or
supplement thereto, at the date thereof and at each Closing Date, will not),
contain any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that the Company
makes no representation or warranty as to the information contained in or
omitted from the Preliminary Memorandum or the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of the Initial
Purchasers specifically for inclusion therein.

                  (2) The documents incorporated by reference in each of the
Preliminary Memorandum and the Final Memorandum when they were filed with the
Commission conformed in all material respects to the requirements of the
Exchange Act and the Rules and Regulations and none of such documents contained
any untrue statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading; and any further documents so filed and incorporated by reference in
the Final Memorandum, when such documents are filed with the Commission, will
conform in all material respects to the requirements of the Exchange Act and the
Rules and Regulations and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.

                  (3) It is not required by applicable law or regulation in
connection with the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner
<PAGE>   6
                                                                               6

contemplated by this Agreement to register the Securities under the Securities
Act, provided that no form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act ("Regulation D"))
has been or will be used by the Initial Purchasers or any of their
representatives in connection with the offer and sale of any of the Securities,
including, but not limited to, any advertisements, articles, notices or other
communications published in any newspaper, magazine or similar medium or
broadcast over television or radio, or any seminar or meeting whose attendees
have been invited by any general solicitation or general advertising.

                  (4) Each of the Company and GTL has been duly incorporated as
an exempted company and is validly existing as an exempted company in good
standing under the laws of Bermuda, with all requisite power and authority and,
except as disclosed in the Final Memorandum, has all necessary material
government authorizations, licenses, certificates, franchises, permits and
approvals required to own its properties and to conduct its business as
described in the Final Memorandum; Globalstar has been duly formed and is
validly existing as a limited partnership under the laws of the State of
Delaware, and has been duly qualified for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases property, or conducts any business, so as to require such qualification
(except where the failure to so qualify would not result in a Material Adverse
Change with regard to the Company); and Globalstar has all requisite power and
authority and, except as disclosed in the Final Memorandum, has all necessary
material government authorizations, licenses, certificates, franchises, permits
and approvals required to own its properties and to conduct its business as
described in the Final Memorandum; SS/L and Cyberstar have been duly
incorporated and are validly existing in good standing under the laws of the
State of Delaware, with all requisite power and authority and, except as
disclosed in the Final Memorandum, have all necessary material government
authorizations, licenses, certificates, franchises, permits and approvals
required to own their properties and to conduct their businesses as described in
the Final Memorandum; SatMex has been duly formed and is validly existing as a
company under the laws of Mexico, with all requisite power and authority and,
except as disclosed in the Final Memorandum, has all necessary material
government authorizations, licenses, certificates, franchises, permits and
approvals required to own its properties and conduct its business as described
in the Final Memorandum; each other Loral Affiliate that is a corporation has
been duly incorporated and is validly existing in good standing under the laws
of its jurisdiction of incorporation; each Loral Affiliate that is a partnership
has been duly formed and is validly existing under the laws of its jurisdiction
of formation. Since the respective dates as of which information is given in the
Final Memorandum, and except as otherwise disclosed in the Final Memorandum,
there has not been, and prior to the Closing Date there will not be, any
Material Adverse Change in the capital stock or partnership interests,
short-term debt or long-term consolidated debt of the Company and its
subsidiaries, taken as a whole, or any Material Adverse Change in or affecting
the Company and its subsidiaries, taken as a whole, otherwise than as set forth
or contemplated, or under arrangements referred to, in the Final Memorandum (as
amended or supplemented).
<PAGE>   7
                                                                               7

                  (5) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act and the Company will use its best
efforts to have the Securities designated PORTAL eligible securities in
accordance with the rules and regulations of the NASD.

                  (6) Neither the Company nor any Loral Affiliate is an
"investment company" within the meaning of such term under the United States
Investment Company Act of 1940.

                  (7) The Company has authorized capital stock as set forth in
its Statement of Capital Increase, and all the issued shares of Common Stock
have been duly and validly authorized and issued, are fully paid and
nonassessable and conform in all material respects to the description in the
Final Memorandum; and the Common Stock is approved for trading on the NYSE and
is not subject to any preemptive or similar rights; and the schedule to the
Bye-Laws of the Company (the "Preferred Stock Schedule") setting forth the terms
of the Securities conforms in all material respects with the description thereof
in the Final Memorandum.

                  (8) The Registration Rights Agreement has been duly authorized
by the Company and, when executed by the proper officers of the Company
(assuming due execution and delivery by the Initial Purchasers) and delivered by
the Company, will constitute the valid and legally binding obligation of the
Company, enforceable against the Company in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditor's rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and except as
enforcement of rights to indemnity or contribution may be limited by Federal or
state securities laws or principles of public policy; and the Registration
Rights Agreement conforms in all material respects to the description thereof
contained in the Final Memorandum.

                  (9) This Agreement has been duly authorized, executed and
delivered by the Company.

                  (10) The execution, delivery and performance of this Agreement
and the Registration Rights Agreement by the Company and the consummation of the
transactions contemplated hereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any Loral Affiliate is a party or by which
the Company or any Loral Affiliate is bound or to which any of the property or
assets of the Company or any Loral Affiliate is subject, nor will such actions
result in any violation of the provisions of the charter or by-laws (or other
constitutive documents) of the Company or any Loral
<PAGE>   8
                                                                               8

Affiliate, or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any Loral
Affiliate or any of their properties or assets; no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the issue and sale of Securities by
the Company and the consummation of the transactions contemplated by this
Agreement and the Registration Rights Agreement, except a filing required by
Bermuda law for which a waiver has been obtained, and except as may be required
under the various state securities or Blue Sky Laws or as may be required by the
laws of any country other than the United States in connection with the resale
of the Securities by the Initial Purchasers or as may be required under the
Securities Act pursuant to the terms of the Registration Rights Agreement.

                  (11) Except (i) as may otherwise be disclosed in or
contemplated by the Final Memorandum and (ii) with regard to the exchange of
certain shares of 6% Series C convertible redeemeable preferred stock for
3,857,777 shares of Common Stock, since September 30, 1999, the Company has not
issued or granted any securities, including any sales pursuant to Rule 144A,
Regulation D or Regulation S under the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock options plans or other
employee compensation plans or pursuant to outstanding options, rights, warrants
or securities.

                  (12) Except as disclosed in the Final Memorandum, neither the
Company nor any Loral Affiliate has sustained, since the date of the latest
audited financial statements included in the Final Memorandum, any material loss
or interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree; and, since such date, there has not been
any Material Adverse Change, or any development involving a prospective Material
Adverse Change, in or affecting the Company and its subsidiaries, taken as a
whole, otherwise than as set forth or contemplated in the Final Memorandum.

                  (13) Deloitte & Touche LLP, whose report appears in the Final
Memorandum, are independent public accountants with respect to each of the
Company and certain of the Loral Affiliates. The financial statements included
or incorporated by reference in the Final Memorandum or Preliminary Memorandum
present fairly the financial condition, results of operations and changes in
financial condition of the entities purported to be shown thereby at the dates
and for the periods indicated and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as may be noted therein) throughout the periods indicated.

                  (14) Except as described in the Final Memorandum, the Company
and each of the Loral Affiliates carry, or are covered by, insurance in such
amounts and covering such risks as is adequate for the conduct of their
respective businesses and the
<PAGE>   9
                                                                               9

value of their respective properties and as is customary for companies engaged
in similar businesses in similar industries.

                  (15) Each of the Company and the Loral Affiliates and their
respective equipment suppliers owns or possesses adequate patent rights or
licenses or other rights to use patent rights, inventions, trademarks, service
marks, trade names and copyrights (except as otherwise described in the Final
Memorandum) necessary to conduct the general business proposed to be operated by
the each of such suppliers, the Company and the Loral Affiliates, and none of
the Company or the Loral Affiliates or, to the knowledge of the Company, any of
their respective equipment suppliers, has received any notice of infringement of
or conflict with asserted rights of others with respect to any patent, patent
rights, inventions, trademarks, service marks, trade names or copyrights which,
singularly or in the aggregate, could result in a Material Adverse Change with
regard to the Company and the Loral Affiliates, taken as a whole.

                  (16) Except as described or contemplated in the Final
Memorandum, there are no legal or governmental proceedings pending to which the
Company or any Loral Affiliate is a party or of which any property or assets of
the Company or any Loral Affiliate is the subject which, if determined adversely
to the Company or any Loral Affiliate, would result in a Material Adverse Change
with regard to the consolidated Company and the Loral Affiliates, taken as a
whole, and to the best of the Company's knowledge, except as described in the
Final Memorandum, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.

                  (17) Other than as disclosed in the Final Memorandum, (i) no
default exists, and no event has occurred which with notice or lapse of time, or
both, would constitute a default in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, loan or
credit agreement, lease or other agreement or instrument to which the Company or
any Loral Affiliate is a party or by which the Company or any Loral Affiliate is
bound, except any such default or event as would not singly or in the aggregate
result in a Material Adverse Change with regard to the Company and the Loral
Affiliates, taken as a whole, and (ii) neither the Company nor any Loral
Affiliate is in violation in any material respect of any applicable law.

                  (18) (i) The FCC has authorized LQP to construct a mobile
satellite system capable of operating in the 1610-1626.5/2483.5-2500 MHz
frequency bands, consistent with the technical specifications set forth in its
application, the FCC's rules and the conditions set forth in the FCC's Order and
Authorization (DA 95-128), released January 31, 1995, as affirmed and modified
by the Memorandum Opinion and Order, FCC 96 279 (released June 27, 1996), as
modified by the FCC's Order and Authorization, DA 96 1924 (released November 19,
1996); however, such authorization is presently subject to modification, stay or
revocation through judicial appeals.
<PAGE>   10
                                                                              10

                  (ii) Participation by Globalstar in the development and
         operation of the Globalstar System as described in the Final Memorandum
         does not violate the Communications Act, or the rules and regulations
         thereunder.

                  (iii) The construction, launch and operation by Globalstar of
         the Globalstar satellite constellation authorized by the Order and
         Authorization (DA 95-128), released January 31, 1995 as modified by the
         Erratum, DA 95 373 (released February 29, 1995), as affirmed and
         modified by the Memorandum Opinion and Order, FCC 96 279 (released June
         27, 1996), as modified by the FCC's Order and Authorization, DA 96 1924
         (released November 19, 1996), would not violate provisions of the
         Communications Act or the FCC's rules and policies thereunder relating
         to control of FCC authorizations, provided that L/Q Licensee, Inc.
         remains in ultimate control of the authorized facilities as defined by
         the rules and policies of the FCC and that there is no transfer of
         control of L/Q Licensee, Inc. without prior approval of the FCC.

                  (19) Neither the Company nor any Loral Affiliate, nor any
director, officer, agent, employee or other person associated with or acting on
behalf of the Company or any Loral Affiliate, has used any corporate funds for
any unlawful contribution, gift, entertainment or other unlawful expense
relating to political activity; made any direct or indirect unlawful payment to
any foreign or domestic government official or employee from corporate funds;
violated or is in violation of any provision of the Foreign Corrupt Practices
Act of 1977; or made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

                  (20) Except as disclosed in the Final Memorandum, there has
been no storage, disposal, generation, manufacture, refinement, transportation,
handling or treatment of toxic wastes, medical wastes, hazardous wastes or
hazardous substances by any of the Company or the Loral Affiliates (or, to the
knowledge of the Company, any predecessors in interest of any of them) at, upon
or from any of the property now or previously owned or leased by the Company or
any Loral Affiliate, as the case may be, in violation of any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit or which would
require remedial action under any applicable law, ordinance, rule, regulation,
order, judgment, decree or permit, except for any violation or remedial action
which would not result in, or would not be reasonably likely to have, singularly
or in the aggregate with all such violations and remedial actions, a Material
Adverse Change with regard to the Company and the Loral Affiliates, taken as a
whole; there has been no material spill, discharge, leak, emission, injection,
escape, dumping or release of any kind onto such property or into the
environment surrounding such property of any toxic wastes, medical wastes, solid
wastes, hazardous wastes or hazardous substances due to or caused by the
Company, any Loral Affiliate or any of their respective predecessors or with
respect to which the Company has knowledge, except for any such spill,
discharge, leak, emission, injection, escape, dumping or release which would not
result in or would not be reasonably likely to have, singularly or in the
aggregate with all such spills, discharges, leaks, emissions, injections,
escapes, dumpings and releases, a Material
<PAGE>   11
                                                                              11

Adverse Change with regard to the Company and the Loral Affiliates, taken as a
whole; and the terms "hazardous wastes", "toxic wastes", "hazardous substances"
and "medical wastes" shall have the meanings specified in any applicable local,
state, Federal and foreign laws or regulations with respect to environmental
protection.

                  (21) The partnership interests in Globalstar held by the
Company and GTL pursuant to the Partnership Agreement are duly and validly
authorized, executed, issued and delivered in accordance with the terms of the
Partnership Agreement, are fully paid and constitute the valid and binding
obligations of Globalstar; all the issued and outstanding capital stock of each
other Loral Affiliate has been duly authorized and validly issued and is fully
paid and nonassessable; and, except as disclosed in the Final Memorandum and
except for the stock of GTL that is owned by the Company and has been pledged to
Lockheed Martin, common stock of GTL owned by the Company that is subject to
outstanding options, shares of Loral SpaceCom Corporation and SS/L pledged as
security for borrowings under the SpaceCom Credit Agreement, partnership
interests in Globalstar owned by the Company, some of which are subject to a
pledge in the event of a drawing by the Company under a credit agreement, dated
as of June 30, 1998, among the Company, the lenders party thereto from time to
time and Bank of America National Trust and Savings Association, as
administrative agent, interests in Firmanento Mexicano, S. de R.L. de C.V. that
have been pledged to the Mexican government and shares of SatMex pledged in
favor of certain banks in connection with the SatMex Credit Agreement dated as
of February 23, 1998 and the Indenture dated March 4, 1998 relating to the
Senior Secured Floating Rate Notes, the capital stock of such Loral Affiliate
owned by the Company, directly or indirectly, is owned free from liens,
encumbrances, equities, claims and defects.

                  (22) The Partnership Agreement has been duly executed by the
Company and certain Loral Affiliates (to the extent that they are parties
thereto) and is a valid, binding and enforceable agreement, except as
enforceability may be limited by (i) bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally or by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
Federal or state securities laws or principles of public policy with regard to
rights to indemnity under the Partnership Agreement to the extent an indemnified
party thereunder may be deemed or alleged to be an underwriter pursuant to such
laws; provided, however, that no representation is made hereunder with respect
to the enforceability of any provisions contained in the Partnership Agreement
which state that the parties thereto have agreed to further negotiate with
respect to certain matters as specified therein or which provide for the grant
of exclusive service territories.

                  (23) For U.S. Federal income tax purposes, the Company is not,
and does not expect to become, a "passive foreign investment company" within the
meaning of Section 1297 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the "Code").
<PAGE>   12
                                                                              12

                  (24) Each of the Company and each Loral Affiliate that is
subject to U.S. law is in compliance in all material respects with all presently
applicable provisions of the Employee Retirement Income Security Act of 1974,
including the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Company or the Loral
Affiliates would have any liability; neither the Company nor any of the Loral
Affiliates have incurred or expects to incur liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 (other than routine minimum funding obligations), 4971 or 4975
of the Code; and nothing has occurred, whether by action or failure to act, with
respect to the operation of any "pension plan" for which the Company or any of
its subsidiaries would have any liability that is intended to be qualified under
Section 401(a) of the Code that could reasonably be expected to result in the
loss of such qualification.

                  (25) The proceeds from the offering of Securities will be used
as contemplated in the Final Memorandum.

                  (26) The Securities have been duly and validly authorized and,
when the Securities have been issued and delivered by the Company and paid for
pursuant to this Agreement on the Closing Date, the Securities will be duly and
validly issued, fully paid and nonassessable and will conform in all material
respects to the description thereof contained in the Final Memorandum.

                  (27) The Company and the Loral Affiliates have timely filed
all material tax returns and notices and have paid all Federal, state, county,
local and foreign taxes of any nature whatsoever to the extent such taxes have
become due. Neither the Company nor any Loral Affiliate has any knowledge, or
any reasonable grounds to know, of any tax deficiencies which would,
individually or in the aggregate, result in a Material Adverse Change with
respect to the Company and its subsidiaries, taken as a whole.

                  (28) Each of the Company and the Loral Affiliates (i) makes
and keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are executed
in accordance with management's authorization, (B) records transactions as
necessary to permit preparation of its financial statements and to maintain
accountability for its assets and (C) permits access to its assets only in
accordance with management's authorization.

                  (29) Neither the Company nor any Loral Affiliate has taken,
nor will any of them take, directly or indirectly, any action designed to cause
or that would result in, or which constitutes or that might reasonably be
expected to constitute, the stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of the Securities.
<PAGE>   13
                                                                              13

                  (30) None of the Company, the Loral Affiliates or any person
acting on its or their behalf has engaged or will engage in any directed selling
efforts (within the meaning of Regulation S) with respect to the Securities, and
the Company and the Loral Affiliates and any person acting on its or their
behalf have complied and will comply with the offering restrictions requirement
of Regulation S, except no representation, warranty or agreement is made by the
Company in this paragraph with respect to the Initial Purchasers.

                  2. Purchase and Sale of the Securities.

                  (a) Subject to the terms and conditions and upon the basis of
the representations and warranties herein set forth, (i) the Company agrees to
issue and sell to the Initial Purchasers the Firm Securities at a purchase price
of $48.625 per share, plus accrued dividends, if any, from February 18, 2000 to
the First Closing Date and (ii) each of the Initial Purchasers agrees, severally
and not jointly, to purchase from the Company the number of Firm Securities set
forth opposite such Initial Purchaser's name in Schedule I hereto.

                  (b) The Company hereby grants to the Initial Purchasers an
option (the "Option"), exercisable at the election of Lehman, to purchase from
the Company the Option Securities at a purchase price of $48.625 per share, plus
accrued dividends, if any, from February 18, 2000 to the Closing Date for the
Option Securities. Upon exercise of the Option, each of the Initial Purchasers
agrees, severally and not jointly, and otherwise on the terms and subject to the
conditions herein set forth, to purchase from the Company the number of Option
Securities in the respective proportions which the number of Firm Securities set
forth opposite the name of each Initial Purchaser in Schedule I hereto bears to
the aggregate number of Firm Securities, subject to such adjustments as the
Initial Purchasers shall deem advisable.

                  (c) The Company shall not be obligated to deliver any of the
Firm Securities or the Option Securities to be delivered on the First Closing
Date or any Closing Date, as the case may be, except upon payment for all the
Securities to be purchased on such Closing Date as provided herein.

                  3. Delivery of and Payment for Securities.

                  (1) Delivery of and payment for the Firm Securities and the
Option Securities (if the Option provided for in Section 2(b) hereof shall have
been exercised on or before the second Business Day prior to the First Closing
Date) shall be made at the offices of Cravath, Swaine & Moore, 825 Eighth
Avenue, New York, New York 10019 (or such other place as mutually may be agreed
upon), at 10:00 a.m., New York City time, on February 18, 2000, or such later
date (not later than February 25, 2000,) as the Initial Purchasers shall
designate, which date and time may be postponed by agreement between the Initial
Purchasers and the Company or as provided in Section 8 hereof (such
<PAGE>   14
                                                                              14

date and time of delivery and payment for the Securities being herein called the
"First Closing Date").

                  (2) The Option may be exercised in whole or in part at any
time (but not more than once) on or before the 30th day after the date of the
Final Memorandum upon written or telegraphic notice by the Initial Purchasers to
the Company setting forth the number of Option Securities as to which the
Initial Purchasers are exercising the Option and the time and date, not earlier
than the later of either the First Closing Date or the third Business Day after
the date of such exercise, as determined by the Initial Purchasers, when the
Option Securities are to be delivered (the "Option Closing Date"). Delivery of
certificates for, and payment of, the Option Securities shall be made at the
offices set forth above for delivery and payment of the Firm Securities. The
First Closing Date and the Option Closing Date are herein individually referred
to as a "Closing Date" and collectively referred to as the "Closing Dates".

                  (3) The Securities to be purchased by the Initial Purchasers
hereunder shall be delivered by or on behalf of the Company to the Initial
Purchasers against payment of the purchase price therefor by wire transfer in
immediately available funds. On each Closing Date, payment will be made against
delivery of one or more global securities certificates to be deposited with, or
on behalf of, DTC, and registered in the name of Cede & Co., as DTC's nominee.

                  4. Sale and Resale of the Securities by the Initial
Purchasers. Each Initial Purchaser represents and warrants to and agrees with
the Company that:

                  (1) it has offered and will offer to sell the Securities only
to, and has solicited and will solicit offers to buy the Securities only from,
(i) in the United States, persons that in purchasing such Securities will be
deemed to have represented and agreed as provided under "Investor
Representations and Restrictions on Resale" in Exhibit A hereto and (ii) in the
case of offers outside the United States, to persons other than U.S. persons
("foreign purchasers," which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for foreign
beneficial owners (other than an estate or trust)) in reliance upon Regulation S
under the Securities Act and persons that, in each case, in purchasing such
Securities are deemed to have represented and agreed as provided in the Final
Memorandum under the caption "Notice to Investors";

                  (2) with respect to resales made in reliance on Rule 144A of
any of the Securities, to deliver either with the confirmation of such resale or
otherwise prior to settlement of such resale a notice to the effect that the
resale of such Securities has been made in reliance upon the exemption from the
registration requirements of the Securities Act provided by Rule 144A;
<PAGE>   15
                                                                              15

                  (3) with respect to offers outside the United States, to
foreign purchasers in reliance upon Regulation S under the Securities Act in
each case, in purchasing such Securities are deemed to have represented and
agreed as provided in the Final Memorandum under the caption "Transfer
Restrictions";

                  (4) to use reasonable efforts to advise all purchasers of the
Securities in writing in the confirmation sent to such purchasers, of the
changes in the change in control provision in the Final Memorandum under the
caption "Description of Preferred Stock"; and

                  (5) Each Initial Purchaser, severally and not jointly,
represents, warrants, and agrees with respect to offers and sales outside the
United States that:

                      (1) such Initial Purchaser understands that no action has
                  been or will be taken in any jurisdiction by the Company that
                  would permit a public offering of the Securities, or
                  possession or distribution of either Memorandum or any other
                  offering or publicity material relating to the Securities, in
                  any country or jurisdiction where action for that purpose is
                  required;

                      (2) such Initial Purchaser will comply with all applicable
                  laws and regulations in each jurisdiction in which it
                  acquires, offers, sells or delivers Securities or has in its
                  possession or distributes either Memorandum or any such other
                  material, in all cases at its own expense;

                      (3) the Securities have not been registered under the
                  Securities Act and may not be offered or sold within the
                  United States or to, or for the account or benefit of, U.S.
                  persons except in accordance with Rule 144A or Regulation S
                  under the Securities Act or pursuant to another exemption from
                  the registration requirements of the Securities Act and the
                  Rules and Regulations;

                      (4) such Initial Purchaser has offered the Securities and
                  will offer and sell the Securities (A) as part of their
                  distribution at any time and (B) otherwise until 365 days
                  after the later of the commencement of the offering and the
                  Closing Date (or Option Closing Date, if later), only in
                  accordance with Rule 903 of Regulation S or as otherwise
                  permitted in Section 4(a); accordingly, neither such Initial
                  Purchaser, its Affiliates nor any persons acting on its or
                  their behalf have engaged or will engage in any directed
                  selling efforts (within the meaning of Regulation S) with
                  respect to the Securities, and any such Initial Purchaser, its
                  Affiliates and any such persons have complied and will comply
                  with the offering restrictions requirement of Regulation S;
                  and such Initial Purchaser has not and will not engage in any
                  hedging transactions with regard to the
<PAGE>   16
                                                                              16

                  Securities except in compliance with the Securities Act and
                  the Rules and Regulations;

                      (5) such Initial Purchaser has (A) not offered or sold
                  and, prior to the date six months after the Closing Date, will
                  not offer or sell any Securities to persons in the United
                  Kingdom except to persons whose ordinary activities involve
                  them in acquiring, holding, managing or disposing of
                  investments (as principal or agent) for the purposes of their
                  businesses or otherwise in circumstances which have not
                  resulted and will not result in an offer to the public in the
                  United Kingdom within the meaning of the Public Offers of
                  Securities Regulations 1995; (B) complied and will comply with
                  all applicable provisions of the Financial Services Act 1986
                  with respect to anything done by it in relation to the
                  Securities in, from or otherwise involving the United Kingdom,
                  and (C) only issued or passed on and will only issue or pass
                  on in the United Kingdom any document received by it in
                  connection with the issue of the Securities to a person who is
                  of a kind described in Article 11(3) of the Financial Services
                  Act 1986 (Investment Advertisements) (Exemptions) Order 1996
                  (as amended) or is a person to whom such document may
                  otherwise lawfully be issued or passed on;

                      (6) such Initial Purchaser understands that the Securities
                  have not been and will not be registered under the Securities
                  and Exchange Law of Japan, and represents that it has not
                  offered or sold, and agrees not to offer or sell, directly or
                  indirectly, any Securities in Japan or for the account of any
                  resident thereof except pursuant to any exemption from the
                  registration requirements of the Securities and Exchange Law
                  of Japan and otherwise in compliance with applicable
                  provisions of Japanese law; and

                      (7) such Initial Purchaser agrees that, at or prior to
                  confirmation of sales of the Securities, it will have sent to
                  each distributor, dealer or person receiving a selling
                  concession, fee or other remuneration that purchases
                  Securities from it during the restricted period a confirmation
                  or notice to substantially the following effect:

                  "The Securities covered hereby have not been registered under
         the U.S. Securities Act of 1933 (the "Securities Act") and may not be
         offered and sold within the United States or to, or for the account or
         benefit of, U.S. persons (i) as part of their distribution at any time
         or (ii) otherwise until 365 days after the later of the commencement of
         the offering and the final closing date, except in either case in
         accordance with Regulation S (or Rule 144A if available) under the
         Securities Act. Terms used above have the meaning given to them by
         Regulation S."
<PAGE>   17
                                                                              17

                  Terms used in this Section 4(d) have the meanings given to
them by Regulation S.

                  5. Covenants of the Company. The Company agrees with each
Initial Purchaser that:

                  (1) The Company will furnish to each Initial Purchaser and to
counsel for the Initial Purchasers, without charge, during the period referred
to in paragraph (c) below, as many copies of the Final Memorandum, including any
documents incorporated by reference therein and any amendments and supplements
thereto, as it may reasonably request. The Company will pay the expenses of
printing or other production of all documents relating to the offering.

                  (2) The Company will not amend or supplement the Final
Memorandum, other than by filing documents under the Exchange Act which are
incorporated by reference therein, without the prior written consent of the
Initial Purchasers, which consent shall not be unreasonably withheld or delayed;
provided, however, that, prior to the completion of the distribution of the
Securities by the Initial Purchasers (as determined by Lehman), the Company will
not file any document under the Exchange Act which is incorporated by reference
in the Final Memorandum unless, prior to such proposed filing, the Company has
furnished the Initial Purchasers with a copy of such document for their review
and the Initial Purchasers have not reasonably objected to the filing of such
document. The Company will promptly advise the Initial Purchasers when any
document filed under the Exchange Act which is incorporated by reference in the
Final Memorandum shall have been filed with the Commission.

                  (3) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by Lehman), any event occurs
as a result of which the Final Memorandum, as then amended or supplemented,
would include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it should be
necessary to amend or supplement the Final Memorandum to comply with applicable
law, the Company will promptly notify the Initial Purchasers of the same and,
subject to the requirements of paragraph (b) of this Section 5, will promptly
prepare and provide to the Initial Purchasers pursuant to paragraph (a) of this
Section 5 an amendment or supplement which will correct such statement or
omission or effect such compliance.

                  (4) The Company will arrange for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may designate and will maintain such
qualifications in effect so long as required for the sale of the Securities,
provided, however, that in no event shall the Company be obligated in connection
therewith to qualify as a foreign corporation or to execute a general consent to
service of process or to take any action that would subject it
<PAGE>   18
                                                                              18

to taxation in such jurisdiction. The Company will promptly advise the Initial
Purchasers of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose.

                  (5) Neither the Company nor any of the Loral Affiliates nor
any person acting on their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under the
Securities Act and the Rules and Regulations. Neither the Company nor any of the
Loral Affiliates, nor any person acting on their behalf will engage in any form
of general solicitation or general advertising (within the meaning of Regulation
D), or in any manner involving a public offering within the meaning of Section
4(2) of the Securities Act.

                  (6) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities Act, the
Company will, during any period in which it is not subject to and in compliance
with Section 13 or 15(d) of the Exchange Act, provide to each holder of such
restricted securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.

                  (7) The Company will use its best efforts to cause the
Securities to be eligible for clearance and settlement through DTC.

                  (8) Neither the Company nor any of the Loral Affiliates will
not, until 90 days following the First Closing Date, without the prior written
consent of Lehman, agree to offer to sell, sell or otherwise dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exchangeable for, or warrants to acquire Common Stock or create a "put
equivalent position" (within the meaning of Rule 16a-1(h) under the Exchange
Act) with respect to the Common Stock, other than (i) Common Stock the issuance
of which is permitted to satisfy the Company's dividend, conversion and
redemption obligations (including in respect of any dividend make-whole
payments) pursuant to the terms of the Securities, (ii) Common Stock, or options
to purchase Common Stock, issued in connection with any employee stock option
plan, stock ownership plan or dividend reinvestment plan, (iii) Common Stock
issued pursuant to warrants or convertible Securities outstanding on the date
hereof and (iv) strategically driven private placements of the Company's
securities with strategic investors provided that the purchaser of such
securities shall agree not to sell such stock within 90 days following the date
of the First Closing Date.
<PAGE>   19
                                                                              19

                  (9) In connection with any disposition of Securities pursuant
to a transaction made in compliance with applicable state securities laws and
(i) satisfying the requirements of Rule 144(k) under the Securities Act, (ii)
made pursuant to an effective registration statement under the Securities Act or
(iii) that does not require registration under the Securities Act, the Company
will reissue certificates evidencing such Securities without the legend set
forth under the heading "Notice to Investors" in the Final Memorandum (provided
that, in the case of clause (iii) above, the Company has received an opinion of
counsel to the effect that registration under the Securities Act is not required
in connection with such disposition and that upon such transfer such securities
will not constitute restricted securities under the Securities Act if the
Company so requests).

                  (10) The Company shall apply the net proceeds of the sale of
the Securities as set forth in the Final Memorandum. The Company shall take such
steps as shall be necessary to ensure that Company shall not become an
"investment company" within the meaning of such term under the Investment
Company Act of 1940.

                  (11) The Company agrees to pay (i) all expenses (including
stock transfer taxes) incurred in connection with the delivery to the Initial
Purchasers of the Securities, (ii) all fees and expenses (including, without
limitation, fees and expenses of the Company's accountants and counsel, but
excluding fees and expenses of counsel for the Initial Purchasers) in connection
with the preparation, printing, delivery and shipping of the Final Memorandum
(including the financial statements therein and all amendments and exhibits
thereto), the Preliminary Memorandum, and any amendments or supplements of the
foregoing, and the reproduction, delivery and shipping of this Agreement, (iii)
all filing fees and fees and disbursements of counsel to the Initial Purchasers
incurred in connection with the qualification of the Securities under state
securities laws as provided in Section 5(d) hereof, (iv) any applicable listing
or similar fees, (v) the cost of printing certificates representing the
Securities, (vi) the cost and charges of any transfer agent or registrar, and
(vii) all other costs and expenses incident to the performance of its
obligations hereunder for which provision is not otherwise made in this Section
5. It is understood, however, that, except as provided in this Section and
Section 7 hereof, the Initial Purchasers shall pay all their own costs and
expenses, including the fees of their counsel, stock transfer taxes due upon
resale of any of the Securities by them and any advertising expenses incurred in
connection with any offers they may make (such costs and expenses to be borne in
equal proportions by the Initial Purchasers). If the sale of the Securities
provided for herein is not consummated by reason of acts of the Company pursuant
to Section 8 hereof which prevent this Agreement from becoming effective, or by
reason of any failure, refusal or inability on the part of the Company to
perform in all material respects any agreement on its part to be performed or
because any condition of the Initial Purchasers' obligations hereunder to be
performed by the Company is not fulfilled or if the Initial Purchasers shall
decline to purchase the Securities for any reason permitted under this Agreement
(except termination of this Agreement pursuant to Sections 8(c) through (f)),
the Company shall reimburse the Initial
<PAGE>   20
                                                                              20

Purchasers for all reasonable out-of-pocket disbursements (including reasonable
fees and disbursements of counsel) incurred by the Initial Purchasers in
connection with any investigation or preparation made by them in respect of the
marketing of the Securities or in contemplation of the performance by them of
their obligations hereunder. If this Agreement is terminated pursuant to Section
8 hereof by reason of the default of one or more Initial Purchasers, the Company
shall not be obligated to reimburse any defaulting Initial Purchasers on account
of these expenses.

                  (12) During a period of five years from the date of the Final
Memorandum, the Company shall furnish to the Initial Purchasers copies of all
reports or other communications furnished to shareholders and copies of any
reports or financial statements furnished to or filed with the Commission or any
national securities exchange on which any class of securities of the Company
shall be listed promptly after such materials are so furnished or filed.

                  (13) The Company and the Loral Affiliates will not, resell any
of the Securities that have been reacquired by them, except for Securities
purchased by the Company and its subsidiaries or any of their Affiliates and
resold in a transaction registered under the Securities Act.

                  (14) The Company will use its best efforts to cause the shares
of Common Stock issuable in respect of the Securities to be approved for listing
on the NYSE.

                  (15) None of the Company, the Loral Affiliates or any person
acting on its or their behalf (other than the Initial Purchasers) will engage in
any directed selling efforts (as that term is defined in Regulation S) with
respect to the Securities, and the Company and the Loral Affiliates and each
person acting on its or their behalf (other than the Initial Purchasers) will
comply with the offering restrictions requirement of Regulation S.

                  6. Conditions of Initial Purchasers' Obligations. The
respective obligations of the Initial Purchasers hereunder to purchase the Firm
Securities and the Option Securities, as the case may be, are subject to the
following conditions:

                  (1) The representations and warranties of the Company made in
this Agreement qualified as to materiality shall be true and correct, and those
not so qualified shall be true and correct in all material respects, as of the
date hereof and each Closing Date (as if made as of such Closing Date);

                  (2) The Company shall have performed in all material respects
their respective obligations hereunder;
<PAGE>   21
                                                                              21

                  (3) No Initial Purchaser shall have been advised by the
Company or shall have discovered and disclosed to the Company that the Final
Memorandum, as of the date thereof, or as of the applicable Closing Date,
contained or contains an untrue statement of fact which, in the opinion of the
Initial Purchasers or in the opinion of counsel to the Initial Purchasers is
material, or omitted or omits to state a fact which, in the opinion of the
Initial Purchasers or in the opinion of counsel to the Initial Purchasers, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.

                  (4) On or prior to each Closing Date, the Initial Purchasers
shall have received from Cravath, Swaine & Moore, counsel for the Initial
Purchasers, such opinions or letters with respect to such matters as the Initial
Purchasers may reasonably request, and such counsel shall have received such
documents and information as they reasonably request to enable them to pass upon
such matters.

                  (5) On each Closing Date there shall have been furnished to
the Initial Purchasers the opinion (addressed to the Initial Purchasers) of
Willkie Farr & Gallagher, counsel to the Company, dated such Closing Date and in
form and substance satisfactory to counsel for the Initial Purchasers, to the
effect that:

                           (1) Globalstar has been duly formed and is validly
                  existing as a limited partnership in good standing under the
                  laws of the State of Delaware; SS/L, Skynet and Cyberstar have
                  been duly incorporated and are validly existing as
                  corporations in good standing under the laws of the State of
                  Delaware; each of Globalstar, SS/L, Skynet and Cyberstar has
                  been duly qualified for the transaction of business and is in
                  good standing under the laws of each other jurisdiction in the
                  United States in which it owns or leases property, or conducts
                  any business, so as to require such qualification (except
                  where the failure to so qualify would not have a material
                  adverse effect on the Company, Globalstar, SS/L, Skynet and
                  Cyberstar, taken as a whole; and each of Globalstar, SS/L,
                  Skynet and Cyberstar has all requisite power and authority
                  and, except as disclosed in the Final Memorandum, all material
                  governmental authorizations, licenses, certificates,
                  franchises, permits and approvals required to own its
                  properties and to conduct its business as described in the
                  Final Memorandum;

                           (2) to such counsel's knowledge, except as described
                  in the Final Memorandum, the Company has not granted any
                  outstanding options, warrants or commitments with respect to
                  any shares of the capital stock of the Company, whether issued
                  or unissued;

                           (3) the Securities conform in all material respects
                  to the description thereof contained in the Final Memorandum;

                           (4) to such counsel's knowledge, no litigation or
                  governmental proceedings are pending or threatened against the
                  Company or the Loral
<PAGE>   22
                                                                              22

                  Affiliates which would adversely affect the Company's ability,
                  individually or in the aggregate, to perform its obligations
                  under this Agreement or is required to be disclosed in the
                  Final Memorandum and which is not disclosed and correctly
                  summarized therein;

                           (5) each of this Agreement and the Registration
                  Rights Agreement has been duly authorized, executed and
                  delivered by the Company and conforms in all material respects
                  to the description thereof contained in the Final Memorandum,
                  and, assuming due execution and delivery thereof by the
                  Initial Purchasers, constitutes a valid and legally binding
                  obligation of the Company enforceable in accordance with its
                  terms, subject to bankruptcy, insolvency, fraudulent transfer,
                  reorganization, moratorium and similar laws of general
                  applicability relating to or affecting creditors' rights and
                  to general principles of equity (regardless of whether such
                  enforceability is considered in a proceeding in equity or at
                  law) (except that no opinion need be expressed with respect to
                  the indemnification or contribution provisions contained
                  herein or therein);

                           (6) The execution, delivery and performance by the
                  Company of this Agreement or the Registration Rights
                  Agreement, and the consummation of the transactions therein
                  contemplated, will not conflict with or result in a breach or
                  violation of any of the terms or provisions of, or constitute
                  a default under, any indenture, mortgage, deed of trust, loan
                  agreement or other material agreement or instrument known to
                  such counsel to which the Company or any Loral Affiliate is a
                  party or by which the Company or any Loral Affiliate is bound
                  or to which any of the property or assets of the Company or
                  any Loral Affiliate is subject (except such breaches or events
                  of default with respect thereto as are disclosed in the Final
                  Memorandum), nor will such actions result in any violation of
                  the provisions of the charter or by-laws (or other
                  constitutive documents) of the Company or any Loral Affiliate
                  or any statute or any order, rule or regulation known to such
                  counsel of any court or governmental agency or body having
                  jurisdiction over the Company or any Loral Affiliate or any of
                  their properties or assets;

                           (7) no consent (other than required filings by the
                  Bermuda Monetary Authority), approval, authorization or order
                  of any court, regulatory body, administrative agency or other
                  governmental body is required to be obtained for the execution
                  and delivery of this Agreement or the Registration Rights
                  Agreement, the consummation of the transactions contemplated
                  hereby and thereby or the sale of the Securities and the
                  Common Stock issuable in respect thereof as contemplated in
                  the Final Memorandum, under any provision of law or regulation
                  applicable to the
<PAGE>   23
                                                                              23

                  Company of the State of New York or the United States of
                  America, except as may be required under the various state
                  securities or Blue Sky laws or as may be required by the laws
                  of any country other than the United States in connection with
                  the resale of the Securities by the Initial Purchasers or as
                  may be required under the Securities Act and the Rules and
                  Regulations pursuant to the terms of the Registration Rights
                  Agreement;

                           (8) there is no restriction upon the voting or
                  transfer of any Securities pursuant to any agreement or other
                  instrument of which such counsel has knowledge except as
                  described in the Final Memorandum; and no holders of
                  Securities of the Company have rights to the registration
                  thereof except as described in the Final Memorandum;

                           (9) The statements set forth in the Final Memorandum
                  under Material United States Federal Income Tax
                  Considerations", insofar as such statements constitute a
                  summary of the legal matters, documents or proceedings
                  referred to therein fairly present the information referred to
                  therein with respect to such legal matters, documents and
                  proceedings;

                           (10) The Partnership Agreement has been duly and
                  validly authorized, executed and delivered by LQSS, Globalstar
                  and the Company and, to the knowledge of such counsel, the
                  other parties to such agreement have authorized, executed and
                  delivered such agreement and assuming such authorization,
                  execution and delivery by such other parties, such agreement
                  is valid and binding and enforceable against the parties
                  thereto, except as enforceability may be limited by (A)
                  bankruptcy, insolvency, reorganization, moratorium and other
                  similar laws relating to or affecting creditors' rights
                  generally or by general equitable principles (regardless of
                  whether such enforceability is considered in a proceeding in
                  equity or at law) and (B) Federal or state securities laws or
                  principles of public policy with regard to rights to
                  indemnity; provided, however, that no opinion is given with
                  respect to the enforceability of any provisions contained in
                  the Partnership Agreement which state that the parties thereto
                  have agreed to further negotiate with respect to certain
                  matters as specified therein;

                           (11) LQP (or its subsidiary) has agreed to use the
                  license to operate mobile satellite services in the
                  1610-1626.5 MHz L-band and the 2483.5-2500 MHz S-band granted
                  by the FCC for the exclusive benefit of Globalstar;

                           (12) after giving effect to the sale of the
                  Securities by the Initial Purchasers as contemplated in the
                  Final Memorandum, the Company will not be an "investment
                  company" under the Investment Company Act;
<PAGE>   24
                                                                              24

                           (13) assuming the accuracy of the representations and
                  warranties and compliance with the agreements contained
                  herein, no registration of the Securities under the Securities
                  Act is required for the offer and sale by the Initial
                  Purchasers of the Securities in the manner contemplated by
                  this Agreement prior to the effectiveness of the Shelf
                  Registration with respect to the Securities;

                           (14) To such counsel's knowledge, except for the
                  statements set forth in GTL's offering memorandum dated
                  January 21, 1999, regarding the offering of the Series A
                  Preferred Stock, under the heading "Regulation -- United
                  States FCC Regulation" and the Annual Report of GTL for the
                  fiscal year ended December 31, 1998, under the heading
                  "Business--Licensing", there are no pending or threatened
                  proceedings which could have a material adverse effect on the
                  validity of the authorization for construction, launch and
                  operation of the Globalstar satellite constellation.

                           (15) The FCC has authorized LQP to construct a mobile
                  satellite system capable of operating in the
                  1610-1626.5/2483.5-2500 MHz frequency bands, consistent with
                  the technical specifications set forth in its application, the
                  FCC's rules and the conditions set forth in the FCC's Order
                  and Authorization (DA 95-128), released January 31, 1995, as
                  modified by the Erratum, DA 95-373 (released February 29,
                  1995), as affirmed and modified by the Memorandum Opinion and
                  Order, FCC 96-279 (released June 27, 1996), as modified by the
                  FCC's Order and Authorization, DA 96-1924 (released November
                  19, 1996); and pursuant to FCC approval, LQP has assigned such
                  authorization to L/Q Licensee, Inc.; however, such
                  authorization is presently subject to modification, stay or
                  revocation as a result of pending judicial appeals.

                           (16) The construction, launch and operation by
                  Globalstar, of the Globalstar satellite constellation
                  authorized by the Order and Authorization, (DA 95-128)
                  released Jan. 31, 1995, as modified by the Erratum, (DA
                  95-373) released February 28, 1995, as affirmed and modified
                  by the Memorandum Opinion and Order (FCC 96-279) released June
                  27, 1996, as modified by the FCC's Order and Authorization, DA
                  (96-1924 (released November 19, 1996), would not violate
                  provisions of the Communications Act or the FCC's rules and
                  policies thereunder relating to control of FCC authorizations,
                  provided that L/Q Licensee, Inc. remains in ultimate control
                  of the authorized facilities as defined by the rules and
                  policies of the FCC and that there is no transfer of control
                  of L/Q Licensee, Inc. without prior approval of the FCC.
<PAGE>   25
                                                                              25

                  In rendering such opinion, such counsel may limit its opinion
to the laws of the State of New York, the laws of the United States and the
Delaware Revised Uniform Limited Partnership Act and as to matters of fact, such
counsel may rely to the extent deemed proper, on certificates of responsible
officers of the Company and public officials.

                  Such counsel shall also state that in connection with the
preparation of the Preliminary Memorandum and the Final Memorandum, no facts
have come to its attention which lead it to believe that the Final Memorandum,
as of the Execution Time and each Closing Date, contained any untrue statement
of material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that such counsel will express no opinion or belief with respect to the
financial data contained in the Final Memorandum or with respect to any matters
addressed by the opinion of Appleby, Spurling & Kempe set forth in Section 6(f)
hereof with respect to Bermuda law matters.

                  (6) On each Closing Date there shall have been furnished to
the Initial Purchasers the opinion (addressed to the Initial Purchasers) of
Appleby, Spurling & Kempe, counsel to the Company, dated such Closing Date and
in form and substance satisfactory to counsel for the Initial Purchasers to the
effect that:

                           (1) each of the Company and GTL has been duly
                  incorporated as an exempted company and is validly existing as
                  an exempted company in good standing under the laws of
                  Bermuda; and has full power and authority and has obtained all
                  Bermuda governmental authorizations, licenses, certificates,
                  franchises, permits and approvals required to own its
                  properties and to conduct its business as described in the
                  Final Memorandum;

                           (2) the Company has authorized share capital as set
                  forth in the Final Memorandum, and all the issued shares of
                  Common Stock of the Company have been duly and validly
                  authorized and issued and are fully paid and not subject to
                  further calls;

                           (3) the Securities have been duly authorized and
                  executed and are in a form contemplated by the Preferred Stock
                  Schedule and, when the Securities are issued and delivered
                  pursuant to this Agreement, the Securities will be duly and
                  validly issued, fully paid and nonassessable; the offer and
                  sale of the Securities has been duly authorized by the
                  Company; the issuance of the Securities is not subject to any
                  preemptive or similar rights under the Company's Memorandum of
                  Association or
<PAGE>   26
                                                                              26

                  Bye-Laws, in each case as amended; and the Securities conform
                  to the descriptions thereof in the Final Memorandum;

                           (4) 27,600,000 shares of Common Stock have been duly
                  and validly authorized and reserved for issuance in respect of
                  the Securities and, when issued and delivered, such shares of
                  Common Stock will be duly and validly issued, fully paid and
                  nonassessable and will conform to the description thereof in
                  the Final Memorandum;

                           (5) to such counsel's knowledge, no litigation or
                  governmental proceeding is pending or threatened against the
                  Company or GTL in Bermuda which would adversely affect the
                  Company's ability to perform its obligations under this
                  Agreement;

                           (6) the execution, delivery and performance by the
                  Company of each of this Agreement and the Registration Rights
                  Agreement have been duly authorized by the Company and the
                  consummation by the Company of the sale of the Securities in
                  accordance therewith will not (A) conflict with the Company's
                  Memorandum of Association or Bye-Laws, in each case as
                  amended, or (B) violate or conflict with any provision of law
                  or regulation of Bermuda applicable to the Company or GTL;

                           (7) no consent, approval, authorization or order of
                  any court, regulatory body, administrative agency or other
                  governmental body is required to be obtained for the sale of
                  Securities under any provision of law or regulation of Bermuda
                  applicable to the Company or for the consummation of the
                  transactions contemplated by this Agreement or the
                  Registration Rights Agreement, except for the consent of the
                  Bermuda Monetary Authority which has been obtained;

                           (8) there is no restriction upon the voting or
                  transfer of any Securities or the shares of Common Stock
                  issuable in respect thereof pursuant to (A) the law of Bermuda
                  or (B) the Company's Memorandum of Association or Bye-laws, in
                  each case as amended;

                           (9) the statements set forth in the Final Memorandum
                  in the legends and under the headings "Description of
                  Preferred Stock", "Description of Common Stock", "Material
                  United States Federal Income Tax Considerations" and "Notice
                  to Investors", insofar as such statements describe the
                  Securities and constitute a summary of the legal matters
                  referred to therein, fairly present the information referred
                  to therein with respect to such legal and other matters;
<PAGE>   27
                                                                              27

                           (10) a final and conclusive judgment of a New York
                  court under which a sum of money is payable (not being a sum
                  payable in respect of taxes or other charges of a like nature,
                  in respect of a fine or other penalty or in respect of
                  multiple damages as defined in The Protection of Trading
                  Interests Act, 1981) may be the subject of enforcement
                  proceedings in the Supreme Court of Bermuda under the common
                  law doctrine of obligation by action for the debt evidenced by
                  the New York court's judgment; assuming that (1) the court
                  that gave such judgment was competent to hear the action in
                  accordance with private international law principles as
                  applied to courts in Bermuda and (2) such judgment is not
                  contrary to public policy in Bermuda, has not been obtained by
                  fraud or in proceedings contrary to natural justice and is not
                  based on an error in Bermuda law, such counsel believes that,
                  on general principles, such a judgment would be enforceable in
                  the Supreme Court of Bermuda; and enforcement of such a
                  judgment against assets in Bermuda may involve the conversion
                  of the judgment into Bermuda dollars, but the Bermuda Monetary
                  Authority's policy is to give the consents necessary to enable
                  recovery in the currency of the obligation;

                           (11) the submission by the Company to the
                  jurisdiction of the State and Federal courts sitting in the
                  City of New York contained in each of this Agreement and the
                  Registration Rights Agreement constitutes a legal, valid and
                  binding obligation of the Company, provided that such
                  submission is valid under the laws of New York; and

                           (12) the choice of the laws of the State of New York
                  to govern each of this Agreement and the Registration Rights
                  Agreement is a valid choice of law under Bermuda law assuming
                  that such choice is valid under the laws of the state of New
                  York.

                  (7) There shall have been furnished to the Initial Purchasers
certificates, dated the applicable Closing Date and addressed to the Initial
Purchasers, signed by the Chief Executive Officer or President and by the Chief
Financial Officer or Treasurer of the Company, in each case, to the effect that:
(i) the representations and warranties of the Company contained in this
Agreement qualified as to materiality are true and correct and those not so
qualified are true and correct in all material respects, as if made at and as of
such Closing Date, and the Company has in all material respects complied with
all the agreements and satisfied all the conditions on its part to be complied
with or satisfied at or prior to such Closing Date; and (ii) the signers of said
certificates have carefully examined the Final Memorandum, and (A) as of the
date of the Final Memorandum, the Final Memorandum does not include any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (B) since the date
of the Final Memorandum there has occurred no
<PAGE>   28
                                                                              28

event required to be set forth in an amendment or supplement to the Final
Memorandum which has not been so set forth.

                  (8) Since the date of the Final Memorandum, none of the
Company and the Loral Affiliates shall have sustained any loss or interference
with its business by fire, explosion, flood, accident or other calamity, whether
or not covered by insurance, or shall have been subject to any labor dispute, or
shall have become a party to or the subject of any action, suit or proceeding
before any court or governmental agency, authority or body or arbitrator, nor
shall any other event have occurred (whether or not the possibility of such
event is disclosed in the Final Memorandum), that is likely to result in a
Material Adverse Change, nor shall there have been a Material Adverse Change, in
each case with respect to the Company and its subsidiaries, taken as a whole,
whether or not arising in the ordinary course of business, which loss, action,
suit, proceeding or change is, in the Initial Purchasers' judgment, so material
and adverse as to render it impracticable or inadvisable to proceed with the
payment for and delivery of the Securities.

                  (9) At the Execution Time and on each Closing Date, the
Initial Purchasers shall have received a letter of Deloitte & Touche LLP dated
as of such date and addressed to the Initial Purchasers, confirming that they
are independent certified public accountants within the meaning of the
Securities Act and the applicable published Rules and Regulations with respect
to the Company and stating, as of the date of such letter (or, with respect to
matters involving changes or developments since the respective dates as of which
specified financial information is given in the Final Memorandum, as of a date
not more than five Business Days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial information
included in the Final Memorandum, in form and substance satisfactory to the
Initial Purchasers.

                  (10) The Initial Purchasers shall have been furnished such
additional documents and certificates as the Initial Purchasers or counsel for
the Initial Purchasers may reasonably request.

                  All references in Sections 6(b) through (j) of this Section 6
to the Final Memorandum shall be deemed to include any amendment or supplement
thereto at the applicable Closing Date.

                  All such opinions, certificates, letters and documents shall
be in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to Lehman and to counsel for the Initial
Purchasers. The Company shall furnish to Lehman conformed copies of such
opinions, certificates, letters and other documents in such number as the
Initial Purchasers shall reasonably request. If any of the conditions specified
in this Section 6 shall not have been fulfilled when and as required by this
Agreement, this Agreement and all obligations of the Initial Purchasers
hereunder may be canceled at, or at any time prior to, the Closing Date, by
Lehman. Any such cancelation shall be without liability of the Initial
Purchasers to the Company. Notice of
<PAGE>   29
                                                                              29

such cancelation shall be given to the Company in writing, or by telecopy or
telephone and confirmed in writing.

                  7. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless each Initial Purchaser from and against any loss,
claim, damage or liability (or any action in respect thereof), joint or several,
to which such Initial Purchaser may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage or liability (or action in
respect thereof) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Preliminary
Memorandum (as amended or supplemented) or the Final Memorandum (as amended or
supplemented) or (ii) the omission or alleged omission to state in the
Preliminary Memorandum (as amended or supplemented) or the Final Memorandum (as
amended or supplemented) a material fact required to be stated therein or
necessary to make the statements therein not misleading; and shall reimburse
each Initial Purchaser promptly upon demand for any legal or other expenses
reasonably incurred by such Initial Purchaser in connection with investigating,
preparing to defend or defending against any such loss, claim, damage, liability
or action, as such expenses are incurred; provided, however, that the Company
shall not be liable under this Section 7(a) in any such case to the extent, but
only to the extent, that any such loss, claim, damage, liability or action
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Preliminary Memorandum (as amended
or supplemented) or the Final Memorandum (as amended or supplemented) in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchasers specifically for inclusion
therein and provided further that as to the Preliminary Memorandum (as amended
or supplemented) or the Final Memorandum (as amended or supplemented), the
Company shall not be liable under this Section 7(a) on account of any loss,
claim, damage, liability or action arising from the sale of Securities to any
person where such person was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Final Memorandum, as the same may be
amended or supplemented, within the time required by the Securities Act, and the
untrue statement or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact in such Preliminary Memorandum was
corrected in the amended or supplemented Final Memorandum, unless such failure
resulted from non-compliance by the Company with Section 5(a).

                  (b) Each Initial Purchaser severally, but not jointly, shall
indemnify and hold harmless the Company from and against any loss, claim, damage
or liability (or any action in respect thereof) to which the Company may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage or liability (or action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material fact
contained in the Preliminary Memorandum (as amended or supplemented) or the
Final Memorandum (as amended or supplemented), or (ii) the omission or alleged
omission to state in the Preliminary Memorandum (as amended or supplemented) or
the Final Memorandum (as amended or supplemented), a material fact
<PAGE>   30
                                                                              30

required to be stated therein or necessary to make the statements therein not
misleading, and shall reimburse the Company promptly for any legal or other
expenses reasonably incurred by the Company in connection with investigating,
preparing to defend or defending against any such loss, claim, damage, liability
or action, as such expenses are incurred; provided, however, that in no case
shall any Initial Purchaser be liable or responsible for any amount in excess of
the discount, commissions and other compensation applicable to the Securities
purchased by it hereunder; and provided further, however, that such
indemnification or reimbursement shall be available in each such case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company through the Initial
Purchasers by or on behalf of such Initial Purchaser specifically for inclusion
therein.

                  (c) Promptly after receipt by any indemnified party under
subsection (a) or (b) above of notice of any claim or the commencement of any
action, the indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such subsection, notify the indemnifying
party in writing of the claim or the commencement of that action; provided,
however, that the failure so to notify the indemnifying party shall not relieve
it from any liability which it may have under this Section 7 except and to the
extent the indemnifying party is materially prejudiced thereby. If any such
claim or action shall be brought against any indemnified party and it shall
notify the indemnifying party thereof, the indemnifying party shall be entitled
to participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under such subsection for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
any indemnified party shall have the right to employ separate counsel in any
such action and to participate in the defense thereof but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless (i) the
employment thereof has been specifically authorized by the indemnifying party in
writing, (ii) such indemnified party shall have been advised by such counsel
that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party and in the
reasonable judgment of such counsel it is advisable for such indemnified party
to employ separate counsel or (iii) the indemnifying party has failed to assume
the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party promptly notifies
the indemnifying party in writing that it elects to employ separate counsel at
the expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, that the indemnifying party shall not, in
connection with any one such action or separate but substantially similar or
related actions in the same jurisdiction arising out of the same
<PAGE>   31
                                                                              31

general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for all such indemnified parties, which firm shall be
designated in writing by the Initial Purchasers, if the indemnified parties
under this Section 7 consist of any Initial Purchaser, or by the Company, if the
indemnified parties under this Section consist of the Company. No indemnifying
party shall be liable for any settlement of any such action effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.

                  (d) If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of the losses, claims, damages or liabilities
referred to in subsection (a) or (b) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and the
Initial Purchasers from the offering of the Securities or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and the
Initial Purchasers in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities, or actions in respect thereof,
as well as any other relevant equitable considerations. The relative benefits
received by the Company and the Initial Purchasers shall be deemed to be in the
same proportion as the total net proceeds from the offering of the Securities
(before deducting expenses) received by the Company, on the one hand, and the
total discounts and commissions received by the Initial Purchasers, on the other
hand, bear to the total gross proceeds from the offering of Securities, in each
case as set forth in the table on the cover page of the Final Memorandum.
Relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or the Initial Purchasers and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The Company and the Initial Purchasers agree that it
would not be just and equitable if contributions pursuant to this subsection (d)
were to be determined by pro rata allocation (even if the Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation which does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to in this subsection (d) shall be deemed to include, for
purposes of this subsection (d), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating, preparing to defend
or defending against any action or claim which is the subject of this subsection
(d). Notwithstanding the provisions of this subsection (d), no Initial Purchaser
shall be required to contribute any amount in excess of the amount by
<PAGE>   32
                                                                              32

which the discount, commissions and other compensation applicable to the
Securities purchased by it hereunder exceeds the amount of any damages which
such Initial Purchaser has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Initial Purchasers'
obligations in this subsection (d) to contribute are several in proportion to
their respective purchasing obligations and not joint. Each party entitled to
contribution agrees that upon the service of a summons or other initial legal
process upon it in any action instituted against it in respect of which
contribution may be sought, it shall promptly give written notice of such
service to the party or parties from whom contribution may be sought, but the
omission so to notify such party or parties of any such service shall not
relieve the party from whom contribution may be sought for any obligation it may
have hereunder or otherwise.

                  (e) The obligations of the Company under this Section 7 shall
be in addition to any liability which the Company may otherwise have, and shall
extend, upon the same terms and conditions, to each person, if any, who controls
any Initial Purchaser within the meaning of the Securities Act; and the
obligations of the Initial Purchasers under this Section 7 shall be in addition
to any liability that the respective Initial Purchasers may otherwise have, and
shall extend, upon the same terms and conditions, to each director of the
Company (including any person who, with his or her consent, is named in the
Final Memorandum as about to become a director of the Company), and to each
person, if any, who controls the Company within the meaning of the Securities
Act.

                  8. Effective Date and Termination. Until the First Closing
Date, this Agreement may be terminated by Lehman by giving notice as hereinafter
provided to the Company if (a) the Company shall have failed, refused or been
unable, at or prior to the First Closing Date, to perform in all material
respects any agreement on its part to be performed hereunder, (b) any other
condition to the Initial Purchasers' obligations hereunder is not fulfilled, (c)
trading in the Common Stock or in securities generally on the New York Stock
Exchange, the American Stock Exchange, Nasdaq or the over-the-counter market
shall have been suspended or limited (which shall not include any limitation on
program trading pursuant to the rules of the New York Stock Exchange) or minimum
prices shall have been established on either of such exchanges or such markets
by the Commission or such exchange or other regulatory body or governmental
authority having jurisdiction, (d) a banking moratorium is declared by either
Federal or state authorities or (e) the United States becomes engaged in
hostilities or there is an escalation of hostilities involving the United States
or there is a declaration of a national emergency or war by the United States,
or (f) there shall have been such a material adverse change in general economic,
political or financial conditions, or the effect of international conditions on
the financial markets in the United States shall be such, as to, in the judgment
of the Initial Purchasers, make it inadvisable or impracticable to proceed with
the delivery of the Securities. Any termination of this Agreement pursuant to
this
<PAGE>   33
                                                                              33

Section 8 shall be without liability on the part of the Company or any Initial
Purchaser, except as otherwise provided in Sections 5(k) and 8 hereof.

                  Any notice referred to above may be given at the address
specified in Section 10 hereof in writing or by telecopy or telephone, and if by
telecopy or telephone, shall be immediately confirmed in writing.

                  9. Survival of Certain Provisions. The agreements contained in
Section 7 hereof and the representations, warranties and agreements of the
Company and the Initial Purchasers contained in this Agreement shall survive the
delivery of the Securities to the Initial Purchasers hereunder and shall remain
in full force and effect, regardless of any termination or cancelation of this
Agreement or any investigation made by or on behalf of any indemnified party.

                  10. Notices. Except as otherwise provided in the Agreement,
whenever notice is required by the provisions of this Agreement to be given to
the following parties, such notice shall be in writing to the following
addresses:

                  (a)  to the Company:

                                    Loral SpaceCom Corporation
                                    600 Third Avenue
                                    New York, New York 10016

                                    Attention:  Avi Katz

                  (b) to the several Initial Purchasers:

                                    c/o  Lehman Brothers Inc.
                                            3 World Financial Center
                                            200 Vesey Street
                                            New York, New York 10285

                         Attention: Syndicate Department

                  11. Information Furnished by Initial Purchasers. The Company
and the Initial Purchasers severally confirm that the statements set forth in
"Plan of Distribution" in the Final Memorandum or any Preliminary Memorandum
constitute the only written information furnished by or on behalf of any Initial
Purchaser referred to in paragraphs (a) and (b) of Section 7 hereof. The Initial
Purchasers severally agree that such information is correct.

                  12. Parties. This Agreement shall inure to the benefit of and
be binding upon the several Initial Purchasers, the Company and their respective
successors.
<PAGE>   34
                                                                              34

This Agreement and the terms and provisions hereof are for the sole benefit of
only those persons, except that (a) the representations, warranties, indemnities
and agreements of the Company contained in this Agreement shall also be deemed
to be for the benefit of the person or persons, if any, who control any Initial
Purchaser within the meaning of Section 15 of the Securities Act and (b) the
indemnity agreement of the Initial Purchasers contained in Section 7 hereof
shall be deemed to be for the benefit of directors of the Company and any person
controlling the Company within the meaning of Section 15 of the Securities Act.
Nothing in this Agreement is intended to confer or shall be construed to give
any person, other than the persons referred to in this paragraph, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision contained herein.

                  13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

                  14. JURISDICTION; CONSENT TO SERVICE OF PROCESS. THE COMPANY
HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE EXCLUSIVE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES
DISTRICT COURTS LOCATED IN THE CITY OF NEW YORK FOR ANY LAWSUITS, CLAIMS OR
OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREE NOT TO
COMMENCE ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING EXCEPT IN SUCH COURTS. THE
COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO THE
LAYING OF VENUE OF ANY LAWSUIT, CLAIM, OR OTHER PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE COURTS OF THE STATE OF NEW YORK OR THE UNITED
STATES DISTRICT COURTS LOCATED IN THE CITY OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE COMPANY HAS APPOINTED AVI
KATZ AT 600 THIRD AVENUE, NEW YORK, NEW YORK 10016, U.S.A. (HEREINAFTER REFERRED
TO IN SUCH CAPACITY AS THE "PROCESS AGENT"), AS ITS AUTHORIZED AGENT UPON WHOM
PROCESS MAY BE SERVED IN ANY SUCH SUIT OR PROCEEDING. THE COMPANY REPRESENTS TO
THE INITIAL PURCHASERS THAT IT HAS NOTIFIED THE PROCESS AGENT OF SUCH
DESIGNATION AND APPOINTMENT AND THAT THE PROCESS AGENT HAS ACCEPTED THE SAME IN
WRITING. THE COMPANY HAS AUTHORIZED AND DIRECTED THE PROCESS AGENT TO ACCEPT
SUCH SERVICE. IF THE PROCESS AGENT SHALL CEASE TO ACT AS THE COMPANY'S AGENT FOR
SERVICE OF PROCESS, THE COMPANY SHALL
<PAGE>   35
                                                                              35

APPOINT WITHOUT DELAY ANOTHER SUCH AGENT AND NOTIFY LEHMAN OF SUCH APPOINTMENT.
THE COMPANY FURTHER AGREES THAT SERVICE OF PROCESS UPON THE PROCESS AGENT AND
WRITTEN NOTICE OF SAID SERVICE TO THE COMPANY MAILED BY FIRST CLASS MAIL OR
DELIVERED TO THE PROCESS AGENT SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE
SERVICE OF PROCESS UPON IT IN ANY SUCH SUIT OR PROCEEDING. NOTHING HEREIN SHALL
AFFECT THE INITIAL PURCHASERS' RIGHT OR THE RIGHT OF ANY PERSON CONTROLLING ANY
OF THE INITIAL PURCHASERS TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
THE COMPANY AGREES THAT A FINAL ACTION IN ANY SUCH SUIT OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR
IN ANY OTHER LAWFUL MANNER.

                  15. Counterparts. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
<PAGE>   36
                  Please confirm, by signing and returning to us two
counterparts of this Agreement, that you are acting on behalf of yourselves and
the several Initial Purchasers and that the foregoing correctly sets forth the
Agreement among the Company and the several Initial Purchasers.

                                             Very truly yours,

                                             LORAL SPACE & COMMUNICATIONS LTD.,

                                             By: /s/ Avi Katz
                                             ------------------------------
                                             Name:
                                             Title:

Confirmed and accepted as of the date first above mentioned:

LEHMAN BROTHERS INC.
BANC OF AMERICA SECURITIES LLC
BEAR, STEARNS & CO. INC.
ING BARINGS LLC
C.E. UNTERBERG, TOWBIN
CREDIT LYONNAIS SECURITIES (USA) INC.
SG COWEN SECURITIES CORPORATION

By:   LEHMAN BROTHERS INC.,

By: /s/ Larry S. Wieseneck
----------------------------------
Authorized Representative
<PAGE>   37
                                                                      SCHEDULE I

<TABLE>
<CAPTION>
                           Initial Purchasers                                      Number of Firm
                                                                                  Securities to be
                                                                                      Purchased
                                                                                  ----------------
<S>                                                                                   <C>
Lehman Brothers Inc.....................................................              2,800,000

Banc of America Securities LLC..........................................              2,000,000

Bear, Stearns & Co. Inc.................................................              2,000,000

ING Barings LLC.........................................................                400,000

C.E. Unterberg, Towbin..................................................                400,000

Credit Lyonnais Securities (USA) Inc....................................                200,000

SG Cowen Securities Corporation.........................................                200,000
                                                                                      =========

                               Total.............                                     8,000,000
</TABLE>
<PAGE>   38
                                                                       EXHIBIT A

Offers and Sales by the Initial Purchasers

                  The Preferred Stock and the Common Stock issuable upon
conversion thereof (collectively, the "Securities") have not been registered
under the Securities Act and may not be offered or sold within the United States
or to United States persons (as such terms are defined under the Securities Act)
except pursuant to an exemption from, or in a transaction not subject to the
registration requirements of the Securities Act. Accordingly, in the United
States, the Securities are being offered hereby only to "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) in reliance on the
exemption from the registration requirements of the Securities Act provided by
Rule 144A. Prospective investors are hereby notified that sellers of the
Securities may be relying on the exemption from the provisions of Section 5 of
the Securities Act provided by Rule 144A thereunder.

Investor Representations and Restrictions on Resale

                  Each purchaser of Securities that is purchasing in a sale made
in reliance on Rule 144A will be deemed to have represented and agreed as
follows (terms used in this paragraph that are defined in Rule 144A are used
herein as defined therein):

                  (1) The purchaser is a qualified institutional buyer and is
         aware that the sale to it is being made in reliance on Rule 144A, and
         such qualified institutional buyer is acquiring such Securities for its
         own account or for the account of another qualified institutional
         buyer; or if the Securities are to be purchased for one or more
         accounts ("investor accounts") for which it is acting as fiduciary or
         agent, each such account is a qualified institutional buyer on like
         basis.

                  (2) The purchaser understands that the Securities are being
         offered in a transaction not involving any public offering in the
         United States within the meaning of the Securities Act, that the
         Securities have not been registered under the Securities Act and that
         (A) the Securities may be offered, resold, pledged or otherwise
         transferred only (i) to a person who the seller reasonably believes is
         a qualified institutional buyer in a transaction meeting the
         requirements of Rule 144A, in a transaction meeting the requirements of
         Rule 144 under the Securities Act or in accordance with another
         exemption from the registration requirements of the Securities Act (and
         based upon an opinion of counsel if the Company so requests), (ii) to
         the Company, (iii) pursuant to an effective registration statement or
         (iv) in an offshore transaction meeting the requirements of Rule 904 of
         Regulation S and, in each case, in accordance with any applicable
         securities laws of any State of the United States or any other
         applicable jurisdiction and (B) the purchaser will, and each subsequent
         holder is required to, notify any subsequent purchaser from it of the
         resale restrictions set forth in (A) above.
<PAGE>   39
                                                                               2

                  (3) The purchaser understands that the certificates evidencing
         the Securities will, unless otherwise agreed by the Company and the
         holder thereof, bear a legend substantially to the following effect:

                  "THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS
                  ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
                  UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933
                  (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY MAY
                  NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE
                  OF SUCH REGISTRATION OR ANY APPLICABLE EXEMPTION THEREFROM.
                  EACH PURCHASER OF THE SECURITY EVIDENCED HEREBY IS HEREBY
                  NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM
                  THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
                  RULE 144A THEREUNDER. THE HOLDER OF THE SECURITY EVIDENCED
                  HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH
                  SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY
                  (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A
                  QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER
                  THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
                  OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF
                  RULE 144 UNDER THE SECURITIES ACT, OR (c) IN ACCORDANCE WITH
                  ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
                  SECURITIES ACT (AND, IN THE CASE OF CLAUSE (c), BASED UPON AN
                  OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), (2) TO THE
                  COMPANY, (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
                  OR (4) OUTSIDE THE UNITED STATES IN A TRANSACTION MEETING THE
                  REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT AND, IN EACH
                  CASE, IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
                  STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
                  JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
                  HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
                  SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH
                  IN (A) ABOVE."

                  (4) The purchaser acknowledges that none of the Company, the
         Initial Purchasers or any person representing the Company or the
         Initial Purchasers has made any representation to it with respect to
         the Company or the offering or sale of the Securities, other than the
         information contained in the Offering
<PAGE>   40
                                                                               3

         Memorandum dated February 14, 2000 prepared in connection with the sale
         of Securities, which has been delivered to it and upon which it is
         relying in making its investment decision with respect to the
         Securities. The purchaser has access to such financial and other
         information concerning the Company and the Securities as it has deemed
         necessary in connection with its decision to purchase the Securities,
         including an opportunity to ask questions of and request information
         from the Company and the Initial Purchasers.

                  (5) The purchaser acknowledges that the Company, the Initial
         Purchasers and others will rely upon the truth and accuracy of the
         foregoing acknowledgments, representations and agreements and agrees
         that, if any of the foregoing acknowledgments, representations or
         agreements deemed to have been made by it are no longer accurate, it
         shall promptly notify the Initial Purchasers. If such purchaser is
         acquiring the Securities as a fiduciary or agent for one or more
         investor accounts, such purchaser represents that it has sole
         investment discretion with respect to each such account and that it has
         full power to make the foregoing acknowledgments, representations and
         agreements on behalf of each such account.

                  The Securities may not be sold or transferred to, and each
purchaser, by its purchase of the Securities shall be deemed to have represented
and covenanted that it is not acquiring the Securities for or on behalf of, and
will not transfer the Securities to, any pension or welfare plan (as defined in
Section 3 of the Employee Retirement Income Security Act of 1974; 'ERISA')
except that such a purchase for or on behalf of a pension or welfare plan shall
be permitted:

                  (1) to the extent such purchase is made by or on behalf of a
         bank collective investment fund maintained by the purchaser in which no
         plan (together with any other plans maintained by the same employer or
         employee organization) has an interest in excess of 10% of the total
         assets in such collective investment fund and the conditions of Section
         III of Prohibited Transaction Class Exemption 91-38 issued by the
         Department of Labor are satisfied;

                  (2) to the extent such purchase is made by or on behalf of an
         insurance company pooled separate account maintained by the purchaser
         in which, at any time while the Securities are outstanding, no plan
         (together with any other plans maintained by the same employer or
         employee organization) has an interest in excess of 10% of the total of
         all assets in such pooled separate account and the conditions of
         Section III of Prohibited Transaction Class Exemption 90-1 issued by
         the Department of Labor are satisfied;

                  (3) to the extent such purchase is made on behalf of a plan by
         (i) an investment advisor registered under the Investment Advisers Act
         of 1940 that had as of the last day of its most recent fiscal year
         total assets under its management
<PAGE>   41
                                                                               4

         and control in excess of $50.0 million and had stockholders' or
         partners' equity in excess of $0.75 million as shown in its most recent
         balance sheet prepared in accordance with generally accepted accounting
         principles, or (ii) a bank as defined in Section 202 (a)(2) of the
         Investment Advisers Act of 1940 with equity capital in excess of $1.0
         million as of the last day of its most recent fiscal year, or (iii) an
         insurance company which is qualified under the laws of more than one
         state to manage, acquire or dispose of any assets of a plan, which
         insurance company has as of the last day of its most recent fiscal
         year, net worth in excess of $1.0 million and which is subject to
         supervision and examination by state authority having super-vision over
         insurance companies and, in any case, such investment adviser, bank or
         insurance company is otherwise a qualified professional asset manager,
         as such term is used in Prohibited Transaction Class Exemption 84-14
         issued by the Department of Labor, and the assets of such plan when
         combined with the assets of other plans established or maintained by
         the employer (or affiliate thereof) or employee organization and
         managed by such investment advisor, bank or insurance company, and the
         conditions of Section I of such exemption are otherwise satisfied;

                  (4) to the extent that assets used to acquire the Securities
         are assets of an insurance company general account and the purchase of
         the Securities is exempt under the provisions of Prohibited
         Transactions Exemption 95-60 issued by the Department of Labor;

                  (5) to the extent such plan is a governmental plan (as defined
         in Section 3 of ERISA) which is not subject to the provisions of Title
         I of ERISA of Section 401 of the Internal Revenue Code; or

                  (6) to the extent such purchase is made on behalf of a plan by
         an in-house asset manager and the conditions of Part I of Prohibited
         Transactions Class Exemption 96-23 issued by the Department of Labor
         are satisfied.

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