Document:

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                                                                    EXHIBIT 10.1

                                    GUARANTY

     THIS GUARANTY, dated as of May 5, 2000 (this "GUARANTY"), is made by LORAL
SPACE & COMMUNICATIONS LTD., a Bermuda company ("GUARANTOR"), in favor of
QUALCOMM INCORPORATED, a Delaware corporation ("QUALCOMM"), as agent (in such
capacity, "AGENT") for the several lenders ("LENDERS") from time to time parties
to the Credit Agreement, dated as of the date hereof (as amended, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
GLOBALSTAR, L.P., a Delaware limited partnership ("BORROWER"), Lenders, and
QUALCOMM, as a Vendor, and Agent.

                              W I T N E S S E T H:

     WHEREAS, pursuant to the Credit Agreement, Lenders have severally agreed to
make Loans to Borrower upon the terms and subject to the conditions set forth
therein;

     WHEREAS, it is a condition precedent to the obligation of Lenders to make
their respective Loans to Borrower under the Credit Agreement that Guarantor
shall have executed and delivered this Guaranty to Agent for the ratable benefit
of Lenders; and

     WHEREAS, as a result of entering into this Guaranty, Guarantor will derive
substantial direct and indirect benefit.

     NOW, THEREFORE, in consideration of the premises and to induce Agent and
Lenders to enter into the Credit Agreement and to induce Lenders to make their
respective Loans to Borrower under the Credit Agreement, Guarantor hereby agrees
with Agent, for the ratable benefit of Lenders, as follows:

     1.   DEFINED TERMS.

         (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement. As used herein, the following terms shall have the following
meanings:

         "BANKRUPTCY LAW": Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.

         "BOARD OF DIRECTORS": the board of directors of Guarantor.

         "CHANGE OF CONTROL": an event or series of events as a result of which
(i) any "person" (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT")), is or becomes
the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange
Act) of shares entitling the holder thereof to cast more than 35% of the votes
for the election of directors of Guarantor, or (ii) at any time, Continuing
Directors do not constitute a majority of the Board of Directors if, in either
case (i) or (ii), the lowest rating that has most recently been announced
thereafter for any class of non-credit

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enhanced long-term senior unsecured debt of Guarantor by either Moody's
Investors Service, Inc. or Standard & Poor's, a division of The McGraw-Hill
Companies, Inc. is lower than such rating immediately prior thereto.

         "COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
which is under common control with Guarantor within the meaning of Section 4001
of ERISA or is part of a group which includes Guarantor and which is treated as
a single employer under Section 414 of the Code.

         "CONTINUING DIRECTOR": the directors of Guarantor on the Closing Date
and each other director, if, in each case, such other director's nomination for
election to the Board of Directors is recommended by at least a majority of the
then Continuing Directors.

         "CUSTODIAN": any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.

         "DEFAULT": any of the events specified in Section 13 whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

         "ENVIRONMENTAL LAWS": any and all foreign, federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees
or requirements of any Governmental Authority regulating, relating to or
imposing liability or standards of conduct concerning environmental protection
matters, including without limitation, Hazardous Materials, as now or may at any
time hereafter be in effect.

         "ERISA": the Employment Retirement Income Securities Act of 1974, as
amended.

         "EVENT OF DEFAULT": any of the events specified in Section 13, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

         "FCC": the Federal Communications Commission.

         "GLOBALSTAR BANK AGREEMENT GUARANTEE": the Guarantee and Collateral
Agreement, dated as of August 5, 1999, made by SatCom and Loral Satellite in
favor of Bank of America, National Association, as collateral agent for the
several Lenders named therein, and all exhibits and schedules thereto, and,
except as may be stated to the contrary herein, as the same may be amended,
restated, supplemented or otherwise modified from time to time.

         "GUARANTEED AMOUNT:" as defined in Section 2(a).

         "GUARANTEED OBLIGATIONS:" as defined in Section 2(b).

         "HAZARDOUS MATERIALS": any hazardous materials, hazardous wastes,
hazardous constituents, hazardous or toxic substances, and petroleum products
(including crude oil or any fraction thereof), defined or regulated as such in
or under any Environmental Law.

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         "INSOLVENCY OR INSOLVENT": at any particular time, the condition that a
Multiemployer Plan is insolvent within the meaning of Section 4245 of ERISA.

         "LORAL INDENTURE": Indenture, dated as of January 15, 1999, between
Guarantor, as Issuer, and The Bank of New York, as Trustee, as amended or, if
such indenture is not at any date of determination then effective, as such
indenture was in effect on the date of termination or defeasance of such
indenture.

         "LORAL SATELLITE": Loral Satellite, Inc., a Delaware corporation.

         "LORAL SPACECOM": Loral SpaceCom Corporation, a Delaware corporation.

         "MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
business, assets, property or condition (financial or otherwise) of Guarantor
and its Subsidiaries, taken as a whole, (b) the ability of Guarantor to perform
its obligations under this Guaranty or any other Credit Document or (c) the
validity or enforceability of any of the Credit Documents or the material rights
or remedies of Agent or Lenders hereunder or thereunder.

         "MULTIEMPLOYER PLAN": a plan which is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.

         "PBGC": the Pension Benefit Guarantee Corporation.

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

         "REORGANIZATION": at a particular time, the condition that a
Multiemployer Plan is in organization within the meaning of Section 4241 of
ERISA.

         "REPORTABLE EVENT": any of the events set forth in Section 4043(b) of
ERISA or the regulations thereunder, other than those events as to which the
third day notice period is waived under subsections .27, .28, .29, .30, .31,
 .32, .33. .34 or .35 of PBGC Reg. Section 4043.

         "RESPONSIBLE OFFICER": the Chairman, the President or any Vice
President of Guarantor.

         "SATCOM": Loral SatCom Ltd., a Bermuda company.

         "SIGNIFICANT SUBSIDIARY": any Subsidiary that would be a "significant
subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated by
the Commission, as such Regulation is in effect on the date hereof, using a
percentage of 5% for such calculations instead of the percentage set forth
therein.

         "SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV of ERISA
but which is not a Multiemployer Plan.

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         (b) The words "HEREOF," "HEREIN" and "HEREUNDER" and words of similar
import when used in this Guaranty shall refer to this Guaranty as a whole and
not to any particular provision of this Guaranty, and section and paragraph
references are to this Guaranty unless otherwise specified.

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

         (d) For purposes of this Guaranty, the term "LENDER" shall include any
Affiliate of a lender which has entered into a Hedge Agreement with Borrower if
such Hedge Agreement is designated by Borrower as a Hedge Agreement for purposes
of this Guaranty and the term "CREDIT DOCUMENT" shall include any such Hedge
Agreement.

     2.   GUARANTY.

         (a) UNCONDITIONAL GUARANTY. Guarantor hereby severally,
unconditionally, absolutely and irrevocably guarantees to Agent, for the ratable
benefit of Agent, Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment when due (whether at
stated maturity, by acceleration or otherwise) of an amount, if any, at any time
of determination (such amount is referred to herein as the "GUARANTEED AMOUNT")
equal to 50% of the excess, if any, as of the most recent Measurement Date, of
(x) the principal amount outstanding under the Credit Agreement (excluding
deemed capitalized interest of $31,115,827.71, as of the date hereof, and
additional interest capitalized pursuant to SECTION 2.5 of the Credit Agreement)
over (y) the principal amount outstanding under the Globalstar Bank Agreement
(excluding capitalized interest, if any). A Measurement Date shall occur on June
30 and December 31 of each year.

         (b) EXPENSES UNDER THIS GUARANTY. Guarantor also agrees to pay on
demand from time to time all expenses of Lenders or Agent (including, without
limitation, all fees, costs and disbursements of any law firm or other external
counsel) related or incidental to the collection of the Guaranteed Amount. The
Guaranteed Amount and all other obligations and covenants to be performed by
Guarantor under this Guaranty are collectively referred to herein as the
"GUARANTEED OBLIGATIONS." This Guaranty shall remain in full force and effect
until the Obligations are paid in full and the Tranche A Commitments and Tranche
B Commitments are terminated, notwithstanding that from time to time prior
thereto there may be no Obligations or the Guaranteed Amount may be zero.

         (c) GUARANTEED OBLIGATIONS UNAFFECTED. No payment or payments made by
Borrower, Guarantor or any other Person, or received or collected by Agent or
any Lender from Borrower or any other Person by virtue of any action or
proceeding or any setoff or appropriation or application, at any time or from
time to time, in reduction of or in payment of the Obligations shall be deemed
to modify, reduce, release or otherwise affect the liability of Guarantor
hereunder which liability shall continue, notwithstanding any such payment or
payments, until the Guaranteed Obligations are paid in full and the Credit
Agreement is terminated pursuant to its terms.

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         (d) JOINT AND SEVERAL LIABILITY. Guarantor and its successors and
assigns shall be jointly and severally liable for the payment of the Guaranteed
Obligations notwithstanding any relationship or contract of co-obligation by or
among Guarantor and its successors and assigns.

         (e) ACCELERATION OF THE GUARANTEED AMOUNT. Upon the occurrence and
during the continuance of an Event of Default (as defined in this Agreement),
then and in any such event all or any part of the Guaranteed Amount may, at the
option of the Requisite Lenders and as provided in the Credit Agreement, and
without demand, notice or legal process of any kind, be declared, and
immediately shall become, due and payable.

         (f) NOTICE OF PAYMENT UNDER GUARANTY; APPLICATION OF PAYMENTS.
Guarantor agrees that whenever, at any time, or from time to time, it shall make
any payment to Agent or any Lender on account of its liability hereunder, it
will notify such Person (and, if such Person is not Agent, Guarantor will also
notify Agent) in writing that such payment is made under this Guaranty for such
purpose. Agent, Lenders and Guarantor agrees that all payments in respect of the
Guaranteed Amount made by Guarantor pursuant to this Guaranty will be applied to
reduce the aggregate principal amount outstanding under the Credit Agreement,
and the payments will be applied in the inverse order of maturity of the
scheduled principal payments thereunder.

         (g) SUBORDINATION. Any indebtedness or other obligation of Borrower or
its Subsidiaries now or hereafter held by or owing to Guarantor under this
Guaranty is hereby subordinated in time and right of payment to all obligations
of Borrower to any or all of Agent and Lenders under the Credit Agreement and
the other Credit Documents. No amendment to subsection 2.5 of the Credit
Agreement and no amendment to the Credit Agreement which increases the amount of
any of the Commitments or which extends the Tranche B Commitment Period or the
final maturity date of any of the Loans shall be effective as to Guarantor
without its prior written consent.

     3. RIGHT OF SET-OFF. Each of Agent and each Lender is hereby irrevocably
authorized at any time and from time to time to the extent permitted by law
without notice to Guarantor, any such notice being expressly waived by
Guarantor, to set off and appropriate and apply any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by Agent or such Lender to or for the credit or the account of Guarantor,
or any part thereof in such amounts as Agent or such Lender may elect, against
or on account of the obligations and liabilities of Guarantor to Agent or such
Lender hereunder and claims of every nature and description of Agent or such
Lender against Guarantor, in any currency, whether arising hereunder, under the
Credit Agreement, any Note, any Credit Document or otherwise, as Agent or such
Lender may elect, whether or not Agent or such Lender has made any demand for
payment and although such obligations, liabilities and claims may be contingent
or unmatured. Agent and each Lender shall notify Guarantor promptly of any such
set-off and the application made by Agent or such Lender, as the case may be, of
the proceeds thereof; provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights

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of Agent and each Lender under this paragraph are in addition to other rights
and remedies (including, without limitation, other rights of set-off) which
Agent or such Lender may have.

     4. NO SUBROGATION. Notwithstanding any payment or payments made by
Guarantor hereunder, or any set-off or application of funds of Guarantor by
Agent or any Lender, Guarantor shall not be entitled to be subrogated to any of
the rights of Agent or any Lender against Borrower or against any collateral
security or Guaranty or right of set-off held by Agent or any Lender for the
payment of the Guaranteed Obligations, nor shall Guarantor seek or be entitled
to seek any contribution or reimbursement from Borrower in respect of payments
made by Guarantor hereunder, until all amounts owing to Agent and Lenders by
Borrower on account of the Guaranteed Obligations are paid in full and the
Tranche A Commitments and the Tranche B Commitments are terminated. If any
amount shall be paid to Guarantor on account of such subrogation rights at any
time when all of the Guaranteed Obligations shall not have been paid in full,
such amount shall be held by Guarantor in trust for Agent and Lenders,
segregated from other funds of Guarantor, and shall, forthwith upon receipt by
Guarantor, be turned over to Agent in the exact form received by Guarantor (duly
indorsed by Guarantor to Agent, if required), to be applied against the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
Credit Agreement.

     5. AMENDMENTS, ETC. WITH RESPECT TO THE OBLIGATIONS; WAIVER OF RIGHTS.
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against Guarantor, and without notice to or further assent
by Guarantor, any demand for payment of any of the Obligations made by Agent or
any Lender may be rescinded by Agent or by such Lender, and any of the
Obligations continued, and the Obligations, or the liability of any other Person
upon or for any part thereof, or any collateral security or Guaranty therefor or
right of set-off with respect thereto, may from time to time, in whole or in
part, be renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by Agent or any Lender, and the Credit Agreement, the
Commitments thereunder, any Notes, and the other Credit Documents and any other
documents executed and delivered in connection therewith may be amended,
modified, extended, supplemented or terminated, in whole or in part, as Agent
(or the Requisite Lenders) may deem advisable from time to time, and any
collateral security, Guaranty or right of offset at any time held by Agent or
any Lender for the payment of the Obligations may be sold, exchanged, waived,
surrendered or released. Neither Agent nor any Lender shall have any obligation
to protect, secure, perfect or insure any Lien at any time held by it as
security for the Obligations or for this Guaranty or any property subject
thereto. When making any demand hereunder against Guarantor, Agent or any Lender
may, but shall be under no obligation to, make a similar demand on Borrower, and
any failure by Agent, or any Lender to make any such demand or to collect any
payments from Borrower or any release of Borrower shall not relieve Guarantor of
its obligations or liabilities hereunder, and shall not impair or affect the
rights and remedies, express or implied, or as a matter of law, of Agent or any
Lender against Guarantor. For the purposes hereof "DEMAND" shall include the
commencement and continuance of any legal proceedings.

     6. GUARANTY ABSOLUTE AND UNCONDITIONAL. Guarantor waives any and all notice
of the creation, renewal, extension or accrual of any of the Obligations and
notice of or proof of reliance by Agent or any Lender upon this Guaranty or
acceptance of this Guaranty; the Obligations, and any of them, shall
conclusively be deemed to have been created, contracted or

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incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty; and all dealings between Borrower and Guarantor, on the one hand, and
Agent and Lenders, on the other, shall likewise be conclusively presumed to have
been had or consummated in reliance upon this Guaranty. Guarantor waives
diligence, presentment, protest, demand for payment and notice of default or
nonpayment to or upon Borrower with respect to the Obligations. This Guaranty
shall be construed as a continuing, absolute and unconditional guarantee of
payment without regard to:

         (a) the validity, regularity or enforceability of the Credit Agreement,
any Note, or any other Credit Document, any of the Obligations or any other
collateral security therefor or Guaranty or right of offset with respect thereto
at any time or from time to time held by Agent or any Lender;

         (b) any defense, set-off or counterclaim (other than a defense of
payment or performance or release as a result of the termination of this
Guaranty in accordance with its terms) which may at any time be available to or
be asserted by Borrower against Agent or any Lender; or

         (c) any other circumstance whatsoever (with or without notice to or
knowledge of Borrower or Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of Borrower for the Obligations, or
of Guarantor under this Guaranty, in bankruptcy or in any other instance. When
pursuing its rights and remedies hereunder against Guarantor, Agent and any
Lender may, but shall be under no obligation to, pursue such rights and remedies
as it may have against Borrower or any other Person or against any collateral
security or Guaranty for the Obligations or any right of offset with respect
thereto, and any failure by Agent or any Lender to pursue such other rights or
remedies or to collect any payments from Borrower or any such other Person or to
realize upon any such collateral security or guarantee or to exercise any such
right of offset, or any release of Borrower or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve
Guarantor of any liability hereunder, and shall not impair or affect the rights
and remedies, whether express, implied or available as a matter of law, of Agent
or any Lender against Guarantor. This Guaranty shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
Guarantor and its successors and assigns thereof, and shall inure to the benefit
of Agent and Lenders, and their respective successors, indorsees, transferees
and assigns, until all the Obligations and the other obligations of Guarantor
under this Guaranty shall have been satisfied by payment in full and the Tranche
A Commitments and the Tranche B Commitments shall be terminated, and
notwithstanding that from time to time during the term of the Credit Agreement
Borrower may be free from any Obligations. Guarantor shall not be released from
its obligations under this Guaranty because of the failure of any Subsidiary
Guarantor under the Subsidiary Guaranty to perform its obligations thereunder.

     7. EFFECTIVENESS; REINSTATEMENT. Application of the terms and conditions,
covenants and Events of Default contained in this Guaranty shall be suspended
during such time or times the Guaranteed Amount is zero. This Guaranty shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Guaranteed Obligations is rescinded
or must otherwise be restored or returned by Agent or any Lender upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of Borrower

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or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, Borrower or any substantial
part of its property, or otherwise, all as though such payments had not been
made.

     8. PAYMENTS. Guarantor hereby agrees that the Guaranteed Obligations will
be paid without set-off or counterclaim in U.S. Dollars to Agent at Agent's
Payment Office, and to any Lender at its Domestic Lending Office.

     9. REPRESENTATIONS AND WARRANTIES. In order to induce Lenders to make the
Loans pursuant to the Credit Agreement, Guarantor hereby represents and warrants
to Agent and to each Lender as of the date of this Agreement that except as
disclosed in its filings with the Securities and Exchange Commission:

         (a) FINANCIAL CONDITION. The audited financial statements of Guarantor
on a consolidated basis at December 31, 1999, copies of which have been filed
with the Securities Exchange Commission, and present fairly the financial
condition and results of operations of Guarantor as at such date.

         (b) NO CHANGE. Since December 31, 1999:

               (i) there has been no change in the business, operations,
property or financial or other condition of Guarantor that has or could
reasonably be expected to have a Material Adverse Effect; and

               (ii) no dividends or other distributions have been declared, paid
or made upon any shares of common stock of Guarantor nor have any shares of
common stock of Guarantor been redeemed, retired, purchased or otherwise
acquired for value by Guarantor.

         (c) CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Guarantor and each of its
Subsidiaries (i) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization, (ii) has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (iii) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification, except to the extent that the failure to be so
qualified could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (iv) is in compliance with all Requirements of Law except to
the extent that the failure to comply therewith could not, in the aggregate,
reasonably be expected to have a Material Adverse Effect.

         (d) CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Guarantor
has the corporate power and authority and the legal right to make, deliver and
perform this Guaranty and has taken all necessary corporate action to authorize
the execution, delivery and performance of this Guaranty. Except as set forth on
Schedule 9(d), no consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of this Guaranty,
none other than those which have been obtained or made and are in full force and
effect. This Guaranty has been duly executed and delivered by Guarantor. This
Guaranty constitutes a legal,

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valid and binding obligation of Guarantor enforceable against Guarantor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).

         (e) NO LEGAL BAR. The execution, delivery and performance of this
Guaranty will not violate any Requirement of Law or any Contractual Obligation
applicable to Guarantor or any of its Subsidiaries, and will not result in, or
require, the creation or imposition of any Lien on any of its properties or
revenues pursuant to any Requirement of Law or Contractual Obligation.

         (f) NO MATERIAL LITIGATION. No litigation, investigation or proceeding
of or before any arbitrator or Governmental Authority is pending or, to the
knowledge of Guarantor, threatened by or against Guarantor or any of its
Subsidiaries or against any of its or their respective properties or revenues
(i) with respect to this Guaranty or any of the transactions contemplated hereby
or thereby, or (ii) which could reasonably be expected to have a Material
Adverse Effect.

         (g) NO DEFAULT. Guarantor is not in default under or with respect to
any Contractual Obligation in any respect which could reasonably be expected to
have a Material Adverse Effect.

         (h) OWNERSHIP OF PROPERTY. Guarantor has good record and marketable
title in fee simple to or valid leasehold interests in all its real property,
and good title to all its other property.

         (i) TAXES. Guarantor has filed or caused to be filed all tax returns
which to the knowledge of Guarantor are required to be filed and has paid all
taxes shown to be due and payable on said returns or on any assessments made
against it or any of its property and all other taxes, fees or other charges
imposed on it or any of its property by any Governmental Authority (other than
those the amount or validity of which is currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of Guarantor, as the case may be, and other
than those the non-payment of which could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect); and no federal income tax liens
have been filed and, to the knowledge of Guarantor, no claims are being asserted
with respect to any such taxes, fees or other charges, except any such claims
which could not reasonably be expected to have a Material Adverse Effect.

         (j) FEDERAL REGULATIONS. Guarantor is not engaged in the business of
extending credit for the purpose of "purchasing" or "carrying" "margin stock"
within the respective meanings of each of the quoted terms under Regulation U of
the Board of Governors of the Federal Reserve System as now and from time to
time hereafter in effect.

         (k) ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or

                                       9.
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deemed made with respect to any Plan which has resulted or could reasonably be
expected to result in a liability to Guarantor in excess of $1,000,000, and each
Plan has complied in all material respects with the applicable provisions of
ERISA and the Code. No termination of a Single Employer Plan has occurred, and
no Lien in favor of the PBGC or a Plan has arisen, during such five-year period.
The present value of all accrued benefits under each Single Employer Plan (based
on those assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made or deemed
made, exceed, by more than $1,000,000, the value of the assets of such Plan
allocable to such accrued benefits. Neither Guarantor nor any Commonly
Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and neither Guarantor nor any Commonly Controlled Entity
would become subject to any liability under ERISA if Guarantor or any such
Commonly Controlled Entity were to withdraw completely from all Multiemployer
Plans as of the valuation date most closely preceding the date on which this
representation is made or deemed made, where such liability could, in the
aggregate, reasonably be expected to have a Material Adverse Effect. No such
Multiemployer Plan is in Reorganization or Insolvent.

         (l) INVESTMENT COMPANY ACT; OTHER REGULATIONS. Guarantor is not an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended. Guarantor
is not subject to regulation under any federal or state statute or regulation
which limits its ability to incur Indebtedness.

         (m) SUBSIDIARIES. Guarantor has no Subsidiaries as of the Closing Date
required to be disclosed in its 1999 Annual Report on Form 10-K.

         (n) FULL DISCLOSURE. All information heretofore furnished by Guarantor
to Agent or any Lender for purposes of or in connection with this Guaranty or
any transaction contemplated hereby is, and all such information hereafter
furnished by Guarantor to Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is stated or
certified.

     10. AFFIRMATIVE COVENANTS. Guarantor hereby agrees that, so long as this
Guaranty remains in effect or any amount is owing to any Lender or Agent
hereunder, it shall (and, in the case of the covenants set forth in Sections
10(c), (d) and (e), it shall cause its Subsidiaries to):

         (a) FINANCIAL STATEMENTS. Furnish to Agent:

               (i) all quarterly and annual financial information that would be
required to be contained in a filing with the Securities and Exchange Commission
on Forms 10-Q and 10-K (or any successor forms) if Guarantor were required to
file such Forms, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition and
results of operations of Guarantor and its Subsidiaries and, with respect to the
annual information only, a report on the annual financial statements by the
Issuer's certified independent accountants; and

                                      10.
<PAGE>   11

               (ii) all current reports that would be required to be filed with
the Commission on Form 8 - K (or any successor form) if Guarantor were required
to file such reports.

         (b) PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
material obligations of whatever nature including, without limitation, taxes,
except when the amount or validity thereof is currently being contested in good
faith by appropriate proceedings and reserves in conformity with GAAP with
respect thereto have been provided on the books of Guarantor or its
Subsidiaries, as the case may be.

         (c) CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Preserve, renew
and keep in full force and effect its corporate existence and maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business and comply in all material respects with all material
Contractual Obligations (other than judgments, Indebtedness and Contingent
Obligations, which shall be beyond the scope of this Section) and material
Requirements of Law (except for Environmental Laws, which shall be governed by
Section 11(j) of the Globalstar Bank Agreement Guarantee), except as otherwise
expressly permitted by this Guaranty.

         (d) MAINTENANCE OF PROPERTY; INSURANCE. Keep all property useful and
necessary in its business in good working order and condition; maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks, but including
in any event public liability, product liability and business interruption, as
are usually insured against in the same general area by companies engaged in the
same or a similar business; and furnish to each Lender, upon written request,
full information as to the insurance carried.

         (e) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities.

         (f) NOTICES. Promptly give notice (to be confirmed promptly in writing)
to Agent and each Lender:

               (i) of any (x) default or event of default under any Contractual
Obligation of Guarantor or any of its Subsidiaries or (y) litigation,
investigation or proceeding which may exist at any time between Guarantor or any
of its Subsidiaries and any Governmental Authority, which in either case, if not
cured or if adversely determined, as the case may be, could reasonably be
expected to have a Material Adverse Effect;

               (ii) of any litigation or proceeding affecting Guarantor or any
of its Subsidiaries in which the amount involved is $25,000,000 or more and not
covered by insurance; or in which injunctive or similar relief is sought and
which could reasonably be expected to have a Material Adverse Effect;

                                      11.
<PAGE>   12

               (iii) as soon as possible and in any event within 30 days after
Guarantor knows or has reason to know of the following events: (i) the
occurrence or expected occurrence of any Reportable Event with respect to any
Plan which could reasonably be expected to result in any liability to Guarantor
or any Subsidiary in excess of $25,000,000 or any withdrawal from, or the
termination, Reorganization or Insolvency of, any Multiemployer Plan, or (ii)
the institution of proceedings or the taking or expected taking of any other
action by the PBGC or Guarantor or any Commonly Controlled Entity with respect
to the withdrawal from, or the terminating, Reorganization or Insolvency of, any
Plan. Guarantor shall deliver to Agent and each Lender a certificate of the
chief financial officer of such Guarantor setting forth the details thereof and
the action that Guarantor or Commonly Controlled Entity proposes to take with
respect thereto; and

               (iv) of the occurrence of any event having or which could
reasonably be expected to have a Material Adverse Effect. Each notice pursuant
to this Section shall be accompanied by a statement of a Responsible Officer
setting forth details of the occurrence referred to therein and stating what
action, if any, Guarantor proposes to take with respect thereto.

     11. ADDITIONAL COVENANTS APPLICABLE WHEN LORAL INDENTURE NOT IN EFFECT.
Upon such time as the Loral Indenture has been terminated and the covenants set
forth therein are not effective, then the financial covenants set forth in
SECTIONS 4.04, 4.05, 4.06, 4.07(i), 4.08, 4.10, 4.11, and 5.01 of the Loral
Indenture effective as of the date hereof will be deemed to become part of this
Guaranty, and shall remain, effective. For the purposes of this SECTION 12,
capitalized terms used in each such section of the Loral Indenture shall have
the meanings given to such terms in the Loral Indenture, provided, however, that
for purposes of this SECTION 11: (i) any reference to the term "Issuer" shall be
deemed to be a reference to Guarantor; (ii) any reference to the term "Trustee"
shall be deemed to be a reference to Agent; and (iii) any reference to an
"Unrestricted Subsidiary or "Unrestricted Subsidiaries" shall be deemed to refer
to Subsidiaries of Guarantor that were Unrestricted Subsidiaries under the Loral
Indenture immediately prior to its termination.

     12. EVENTS OF DEFAULT. Upon the occurrence of any of the following events:

         (a) Any representation or warranty made or deemed made by or on behalf
of Guarantor herein or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Guaranty shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or

         (b) Guarantor shall default in the observance or performance of any
agreement contained in SECTION 11 and such default shall continue unremedied for
a period exceeding 60 days; or

         (c) Guarantor shall default in the observance or performance of any
other agreement contained in this Guaranty, and such default shall continue
unremedied for a period of 30 days; or

         (d) Guarantor shall:

                                      12.
<PAGE>   13

               (i) default in any payment of principal of or interest on any
Indebtedness or in the payment of any Contingent Obligation in respect of
Indebtedness, beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness or Contingent Obligation was created and
(I) in each case, the aggregate principal amount of all such Indebtedness equals
or exceeds $25,000,000 and (II) with respect to a default in the payment of
interest by Guarantor or Loral SpaceCom, the effect of such default is to cause,
or permit the holder or holders of such Indebtedness or beneficiary or
beneficiaries of such Contingent Obligation (or a trustee or agent on behalf of
such holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to its
stated maturity or such Contingent Obligation to become payable; or

               (ii) default in the observance or performance of any other
agreement or condition referred to in clause (i) above of any such Indebtedness
or such Contingent Obligation referred to in clause (i) above, the effect of
which default or other event or condition is to cause, or to permit the holder
or holders of such Indebtedness or beneficiary or beneficiaries of such
Contingent Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity or such
Contingent Obligation to become payable; or

         (e) Guarantor or any Significant Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:

               (i) commences a voluntary case;

               (ii) consents to the entry of an order for relief against it in
an involuntary case;

               (iii) consents to an appointment of a Custodian of it or for any
substantial part of its property; or

               (iv) makes a general assignment for the benefit of its creditors;

               or takes any comparable action under any foreign laws relating to
insolvency; or

         (f) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:

               (i) is for relief against Guarantor or any Significant Subsidiary
in an involuntary case;

               (ii) appoints a Custodian of the Guarantor or any significant
Subsidiary or for any substantial part of its property; or

               (iii) orders the winding up or liquidation of Guarantor or any
Significant Subsidiary or any similar relief is granted under any foreign laws
and the order or decree remains unstayed and in effect for 60 days.

                                      13.
<PAGE>   14

         (g) Any judgment or decree for the payments thereunder of money in
excess of $25,000,000 or its foreign currency equivalent at the time is entered
against Guarantor or any of its Subsidiaries, remains outstanding for a period
of 60 days following the entry of such judgment or decree and is not discharged,
waived or the execution thereof stayed.

         (h) This Guaranty shall cease, except as provided in SECTION 7, for any
reason, to be in full force and effect, or any Credit Party or any Affiliate of
any Credit Party shall so assert; or

         (i) A Change of Control shall occur; or

         (j) The acceleration of any indebtedness under the Loral Indenture; or

         (k) The sixty-first (61st) day after the occurrence of an Event of
Default under the Loral Indenture other than under Section 6.01(1) thereof; or

         (l) the thirty-first (31st) day after the occurrence of an Event of
Default under Section 6.01(1) of the Loral Indenture.

then, and in any such event, an Event of Default shall have occurred.

     13. AUTHORITY OF AGENT. Guarantor acknowledges that the rights and
responsibilities of Agent under this Guaranty with respect to any action taken
by Agent or the exercise or non-exercise by Agent of any option, right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Guaranty shall, as between Agent and Lenders, be governed by the
Credit Agreement and by such other agreements with respect thereto as may exist
from time to time among them, but, as between Agent and Guarantor, Agent shall
be conclusively presumed to be acting as agent for Lenders with full and valid
authority so to act or refrain from acting, and Guarantor shall not be under any
obligation, or entitlement, to make any inquiry respecting such authority.

     14. NOTICES. All notices, requests and demands to or upon Agent, any Lender
or Guarantor to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made when delivered by hand or if given by mail, when deposited in the
mails by certified mail, return receipt requested, or if by telex, fax or
similar electronic transfer, when sent and receipt has been confirmed, addressed
as follows:

         (a) if to Agent or any Lender, at its address or transmission number
for notices provided in Section 8.2 of the Credit Agreement; and

         (b) if to Guarantor, at its address or transmission number for notices
set forth under its signature below. Agent, each Lender and Guarantor may change
its address and transmission numbers for notices by notice in the manner
provided in this Section.

     15. SEVERABILITY. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any

                                      14.
<PAGE>   15

such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.

     16. INTEGRATION. This Guaranty and the other Credit Documents represent the
agreement of the Credit Parties, Agent and Lenders with respect to the subject
matter hereof, and there are no promises, undertakings, representations or
warranties by Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.

     17. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES.

         (a) Subject to subsection 8.1 of the Credit Agreement, none of the
terms or provisions of this Guaranty may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by Guarantor and
Agent.

         (b) Neither Agent nor any Lender shall by any act (except by a written
instrument pursuant to Section 18(a) hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of Agent or any Lender, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which Agent or
such Lender would otherwise have on any future occasion.

     (C) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

     18. SECTION HEADINGS. The section headings used in this Guaranty are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

     19. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon the
successors and assigns of Guarantor and shall inure to the benefit of Agent and
Lenders and their successors and assigns. Guarantor may not transfer any of its
rights or obligations under this Guaranty without the written consent of each
Lender.

     20. GOVERNING LAW. This Guaranty shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

     21. SUBMISSION TO JURISDICTION; WAIVERS. Guarantor hereby irrevocably and
unconditionally:

         (a) submits for itself and its property in any legal action or
proceeding relating to this Guaranty and the other Credit Documents to which it
is a party, or for recognition and enforcement of any judgement in respect
thereof, to the non-exclusive general jurisdiction of the

                                      15.
<PAGE>   16

Courts of the State of California, the courts of the United States of America
for the Southern District of California, and appellate courts from any thereof;

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

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

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

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

     22. ACKNOWLEDGMENTS. Guarantor hereby acknowledges that:

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

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

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

     23. WAIVERS OF JURY TRIAL. GUARANTOR, AGENT AND LENDERS HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS GUARANTY OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

     24. REGULATORY APPROVALS.

         (a) Any provision contained herein to the contrary notwithstanding,
upon the occurrence and during the continuation of an Event of Default, this
Agreement, the other Credit Documents and the transactions contemplated hereby
and thereby:

               (i) do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of any Credit Parties

                                      16.
<PAGE>   17

by Lenders, or control, affirmative or negative, or direct or indirect, by
Lenders over the management or any other aspect of the operation of Guarantor,
which ownership and control remain exclusively and at all times in Guarantor;
and

               (ii) do not and will not constitute the transfer, assignment, or
disposition in any manner, voluntarily or involuntarily, directly or indirectly,
of any license, permit, certificate or authorization at any time issued to
Guarantor by the FCC, any other federal, state or local regulatory or
governmental bodies applicable to or having jurisdiction over Guarantor or any
Governmental Authority, or the transfer of control of Guarantor within the
meaning of the Federal Communications Act of 1934, as amended, and the
respective rules and regulations thereunder and thereof, any other federal or
state laws, rules and regulations of other operating municipality regulatory or
governmental bodies applicable to or having jurisdiction over Guarantor as well
as pursuant to the terms of any franchise, license or similar operating right
held by Guarantor.

                                      17.
<PAGE>   18

     IN WITNESS WHEREOF, the undersigned have caused this Guaranty to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written.

LORAL SPACE & COMMUNICATIONS LTD.

/s/ Richard J. Townsend
Name:  Richard J. Townsend
Title:  Senior Vice President and CFO

Address for Notices: c/o Loral SpaceCom Corporation
600 Third Avenue New York, New York 10016
Attn: General Counsel
Fax: 212-338-5320

QUALCOMM INCORPORATED,
as Agent for Lenders

/s/ Anthony S. Thornley
Name:  Anthony S. Thornely
Title: Executive Vice President and CFO<PAGE>   1

                             STOCK OPTION AGREEMENT

       STOCK OPTION AGREEMENT (the "Agreement"), dated as of April 26, 2000
between Financial Performance Corporation, a New York corporation (the
"Company"), having an address at 777 Third Avenue, 30th Floor, New York, New
York 10017 and Edward T. Stolarski, residing at 40 Hackberry Hill Road, Weston,
Connecticut 06883 ("Grantee").

       In consideration of Grantee's employment by the Company in accordance
with a certain employment agreement, dated as of April 25, 2000, between the
Company and the Grantee, the Company hereby grants to the Grantee, a
nonqualified stock option (the "Option") to purchase from time to time all or a
portion of an aggregate of 300,000 shares of the Company's common stock, $.01
par value per share (the "Shares"), subject to and upon the terms set forth
herein. This Option is a nonqualified Stock Option which is not intended to be
an "incentive stock option" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

       To evidence the Option and to set forth its terms, the Company and the
Grantee agree as follows:

       1.     Confirmation of Grant. The Company hereby evidences and confirms
its grant of the Option to the Grantee on the date of this Agreement.

       2.     Number of Shares. This Option shall be for an aggregate of 300,000
Shares.

       3.     Exercise Price. The exercise price shall be $6.38 per share, which
amount equals the closing sale price of the Company's common stock as quoted on
the OTC Bulletin Board as of the close of business on April 25, 2000.

       4.     Term and Vesting of Option. Subject to the terms of this
Agreement, the Option shall expire five years from the date hereof and shall
vest and be exercisable as follows: all or a portion of 150,000 Shares (in whole
shares) of the Option from April 27, 2001 to the expiration of the Option; and,
all or any portion of 150,000 Shares (in whole shares) of the Option from April
27, 2002 to the expiration of the Option; provided, however, that any portion of
the Option shall be exercisable in denominations of 25,000 Shares or more.

       5.     Exercise of Options. The Option may be exercised by written notice
to the Chief Executive Officer of the Company at the Company's principal office.
Such notice shall state the election to exercise the Option and the number of
shares in respect of which it shall be exercised, and shall be signed by the
Grantee or his "Permitted Assigns," in accordance with Paragraph 6 below. In the
event that the Option shall be exercised pursuant to paragraph 6 hereof by any
person other than the Grantee, such notice shall be accompanied by appropriate
proof of the right of such person to exercise the Option, as may be reasonably
required by the Company and its counsel. The notice of exercise shall be
accompanied by payment of the full purchase price of the Shares being purchased
in cash or cash equivalents. The Grantee shall have the right to instruct the
Company to

<PAGE>   2

withhold a portion of the Option shares to meet the obligations for
tax withholding upon exercise of the Option or pay cash to satisfy such tax
withholding obligations. The certificate or certificates for the shares as to
which the Option shall have been so exercised shall be registered in the name of
the Grantee or his Permitted Assigns and shall be delivered, as provided above,
to or upon the written order of the person or persons exercising the Option as
soon as practicable (except as otherwise provided below in this paragraph 5)
after the due and proper exercise of the Option. The holder of the Option shall
not have any rights of a stockholder with respect to the shares covered by the
Option unless and until the certificate or certificates for such shares shall
have been issued and delivered. It is expressly understood that, notwithstanding
anything contained in this Agreement to the contrary, (1) the time for the
delivery of the certificate or certificates of Common Stock may be postponed by
the Company for such period as may be required by the Company to comply with any
listing requirements of any national securities exchange or to comply with any
applicable State or Federal law, and (2) the Company shall not be obligated to
sell, issue or deliver any shares as to which the option or any part thereof
shall have been exercised unless such shares are at that time effectively
registered or exempt from registration under the Securities Act of 1933, as
amended. All shares that shall be purchased upon the exercise of the Option as
provided herein shall be fully paid and non-assessable. The Company has reserved
for issuance out of the authorized capital stock of the Company a number of
shares of the Company's common stock equal to the number of shares of the
Company's common stock issuable upon the exercise of the Option.

       6.     Nontransferability. The Option shall not be assignable or
transferable other than to a member of the immediate family of Grantee or to
trustees of a trust, the beneficiaries of which are members of the Grantee's
immediate family, or by will or the laws of descent and distribution. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof shall be null and void and without
effect.

       7.     Termination of Employment. In the event the employment of the
Grantee with the Company is terminated by the Company for Cause (as such term is
defined in the Employment Letter, dated April 25, 2000, between the Company and
the Grantee), all rights to purchase shares pursuant to the Option shall
forthwith cease and terminate. In the event the employment of the Grantee with
the Company is terminated by the Company without Cause, the rights to exercise
the Option shall accelerate and the Grantee shall have the right for a period of
three months after the termination of his employment, to exercise all of the
shares subject to the Option. In the event the employment of the Grantee with
the Company is terminated by the Grantee, all rights to purchase shares pursuant
to the Option shall forthwith cease and terminate, except that for a period of
three months after the termination of his employment, the Grantee shall have the
right to exercise the Option with respect to those shares which he had a right
to purchase as of the date of termination. If such termination results from
physical disability, then the right to exercise the Option shall accelerate and
the Grantee shall have the right to exercise the Option in full for a period of
twelve (12) months after the date of the date of his termination of employment
or until the expiration date of the Option, if sooner. Notwithstanding anything
contained herein to the contrary, if the Grantee terminates his employment as a
result of a Change in Control of the Company (as defined below), all options not
otherwise vested pursuant to this agreement, shall immediately vest and be
exercisable upon such termination. Change in Control of the Company shall occur
at any time that Jeffrey S. Silverman shall no longer be Chairman of the Company
and the majority of the members

<PAGE>   3

of the Board of Directors shall consist of individuals who were not directors of
the Company on the first annual meeting of shareholders subsequent to the date
hereof.

       8.     Death of Grantee. In the event of the death of the Grantee while
he is in the employ of the Company, the Option or unexercised portion thereof
shall be exercisable in full at any time prior to the expiration date of the
Option, in accordance with the terms of the Option, but only by the person or
persons to whom such Grantee's rights under the Option shall pass by the
Grantee's will or by laws of descent and distribution of the state of his
domicile at the time of his death.

       9.     Adjustments. In the event of any merger, reorganization,
consolidation, sale of substantially all assets, recapitalization,
reclassification, Common Stock dividend (in excess of 5% thereon), Common Stock
split, spin-off, split-up, split-off, distribution of assets or other change in
corporate structure affecting the Common Stock after the date hereof, an
appropriate substitution or adjustment shall be made in the number of shares
subject to the Option and to the exercise price; provided, however, that such
adjustment shall not increase the aggregate value of the Option, no fractional
shares shall be issued, and the aggregate exercise price shall be appropriately
reduced on account of any fractional shares. Without limiting the foregoing, in
case of any consolidation or merger of the Company with or into another
corporation (other than a merger with a subsidiary in which the Company is the
continuing corporation and which does not result in any reclassification,
capital reorganization or other change of the outstanding Shares issuable upon
exercise of the Option) or in case of the sale, transfer or other disposition of
all or substantially all of the assets of the Company, then the Grantee shall be
entitled to receive upon exercise of the Option such number of shares of capital
stock or other securities or property upon, or as a result of, such transaction
that the Grantee would have been entitled to receive had the Option been
exercised immediately prior to such transaction.

       10.    No Limitation on Rights of the Company. The grant of this Option
shall not in any way affect the right or power of the Company to make
adjustments, reclassifications, or changes in its capital or business structure
or to merge, consolidate, dissolve, liquidate, sell, or transfer all or any part
of its business or assets.

       11.    Rights as a Shareholder. The Grantee shall have the rights of a
shareholder with respect to the Shares covered by the Option only upon becoming
the holder of record of those Shares.

       12.    No Obligation to Exercise Option. The granting of the Option shall
impose no obligation upon the Grantee to exercise the Option.

       13.    Governing Law. Except to the extent preempted by Federal law, this
Agreement shall be construed and enforced in accordance with, and governed by,
the laws of the State of New York without regard to any rules regarding
conflicts of law.

<PAGE>   4

       IN WITNESS WHEREOF, the Company and the Grantee have duly executed this
Stock Option Agreement as of the date first above written.

                                     FINANCIAL PERFORMANCE CORPORATION

                                     By: /s/    Jeffrey S. Silverman
                                         ------------------------------------
                                         Name:  Jeffrey S. Silverman
                                         Title: Chief Executive Officer

                                         /s/     Edward T. Stolarski
                                         ------------------------------------
                                                 Edward T. Stolarski

<PAGE>   5

                        FINANCIAL PERFORMANCE CORPORATION
                                777 THIRD AVENUE
                                 THIRTIETH FLOOR
                               NEW YORK, NY 10017

                                 April 25, 2000

Mr. Edward T. Stolarski
40 Hackberry Hill Road
Weston, CT  06883

Dear Mr. Stolarski:

       We are pleased to extend to you an offer to be employed as a principal
executive officer of Financial Performance Corporation (the "Company") upon the
terms and conditions herein set forth. This offer shall remain open until May 1,
2000 and is contingent upon your acceptance of this offer by returning a signed
copy of this letter to us no later than May 1, 2000.

       1.     We have agreed to employ you as an Executive Vice President of the
Company and you have agreed to serve as such for a term commencing on May 15,
2000 (the "Effective Date") and ending on May 14, 2002, unless sooner terminated
or extended as herein provided (the "Term"). The Term shall be automatically
extended by one year, unless either party provides the other with written
notice, not later than ninety days prior to the expiration of the Term, of its
election not to extend the Term. Thereafter, the Term shall be automatically
extended by additional one year periods, unless either party provides the other
with written notice, not later than ninety days prior to the expiration of the
Term, as extended, of its election not to extend the Term.

       2.     As Executive Vice President of the Company, you shall perform such
duties as shall be requested of you from time to time by the Board of Directors.
You shall be nominated, and you agree to serve, for no additional compensation,
as a member of the Board of Directors. You further agree to serve as an officer
or director of any of the current or future subsidiaries of the Company, as the
Board of Directors shall request, without additional compensation.

       3.     You shall receive a salary of $250,000 per year to be paid in
accordance with the Company's normal payroll practices. In addition, you shall
be eligible to receive an annual cash bonus based upon your performance and the
performance of the Company, as determined by the

<PAGE>   6

Mr. Edward Stolarski
April 25, 2000
Page 2

Board of Directors in their sole discretion; provided, however, that you shall
receive a guaranteed minimum bonus of $150,000 for each year of the Term payable
in accordance with the Company's policies. You may also, at the discretion of
the Board of Directors, participate in any of the Company's incentive
compensation plans and to receive bonus awards or commissions based on such
plans subject to your attainment of performance goals set by the Board of
Directors; provided, however, during the Term, you shall receive incentive
performance commissions, payable at the Company's discretion in either cash or
common stock of the Company (provided, however, that in the event the Company is
in a cash positive position, up to $250,000 shall be payable, at your
discretion, in cash), upon the closing of any equity or debt (not including debt
refinancings) raised by the Company or any of its subsidiaries, assuming that
you participated in structuring and closing the transaction, determined in
accordance with the following formula: between $2.5 million and $5 million, a
total of $100,000; and, above $5 million, 5% of the total equity or debt raised,
net of reasonable and customary expenses. Further, during the Term, the Company
shall provide you with an automobile, the exact model of which shall be either a
Mercedes E class, BMW 5 Series or equivalent model mutually agreed to between
you and the Company, at the Company's full cost and expense. We also agree, at
your option, to either reimburse you for any expenses incurred by you for
payment of COBRA, term life and disability premiums during the Term, or provide
you with healthcare, term life and disability benefits as provided to other
senior executives of the Company.

       4.     During each year of the Term, you shall be entitled to a total of
four weeks vacation taken in accordance with the Company's policies.

       5.     The Company shall pay for or reimburse you for all reasonable
expenses actually incurred by or paid by you during the Term in the performance
of your services under this agreement, upon presentation of expense statements
or vouchers or such other supporting information as the Company customarily may
require of its officers.

       6.     In consideration of your signing and the delivery of this
Agreement, we have agreed to grant to you an initial bonus consisting of an
option to purchase 100,000 shares of the Company's Common Stock, in accordance
with the Form of Option attached hereto as Exhibit A.

       7.     As further consideration, we have agreed to grant to you an option
to purchase 300,000 shares of the Company's Common Stock, in accordance with the
Form of Option attached hereto as Exhibit B.

       8.     During the time that you are employed by the Company and for a
period of twenty-four months thereafter, you agree that you will not, in any
manner, be engaged directly or indirectly, within the United States of America,
its territories and possessions (or for such lesser period of time or for such
lesser geographical areas as may be determined by a Court of law or equity to be
a reasonable limitation on your competitive activities) as an employee, partner,
officer, director,

<PAGE>   7

Mr. Edward Stolarski
April 25, 2000
Page 3

representative, consultant, agent or stockholder of any company in direct
competition with the Company or any of its subsidiaries; provided, however,
nothing shall prohibit you from owning up to 5% of the outstanding securities of
any such company; and, provided further, however, that nothing herein shall be
deemed to prohibit you from being employed or working in the financial services
business.

       9.     (a) You agree that all information pertaining to the business of
the Company, its subsidiaries and affiliates, and their respective officers,
directors, employees, agents, shareholders and customers (excluding publicly
available information) constitutes a valuable and confidential asset of the
Company. Such information includes, without limitation, information related to
trade secrets, business plans, product designs, statistical data and
compilations, sourcing contacts and financial information of the Company. You
shall hold all such information in trust and confidence for the Company, its
subsidiaries and affiliates, and shall not use or disclose any such information
to any person, firm, corporation or other entity, except as may be required
pursuant to the order of a court of competent jurisdiction, and shall be liable
for damages incurred by the Company as a result of disclosure of such
information by you for any purpose other than the Company's business, either
during your employment or after your employment terminates for whatever reason.

              (b) During the Term of this Agreement and continuing for a period
of twenty-four months after the expiration or termination of this Agreement and
the Term, you agree that you shall not, directly or indirectly, individually or
on behalf of other persons, solicit, aid or induce any employee of the Company,
its subsidiaries or affiliates to leave their employment with the Company or
such subsidiaries or affiliates in order to accept employment with or render
services to or with another person, firm, corporation or other entity, or assist
or aid any other person, firm, corporation or entity in identifying or hiring
such employees.

       10.    Subject to the other terms and conditions herein, your employment
under this Agreement shall terminate upon the expiration of the Term or, if
earlier, upon the earliest to occur of any of the following events or in
accordance with the other provisions of this paragraph:

              (a) If, in the written opinion of a qualified physician selected
by the Company and reasonably approved by you, you shall become unable to
perform your duties hereunder due to physical or mental illness, and you have
failed, because of such illness, to render, for 120 days out of any 180-day
period, services of the character contemplated by this Agreement, the Company
may terminate your employment upon written notice to you. In such event or in
the event of your death during the Term, you shall be entitled to receive your
base salary at the rate provided in paragraph 3 to the end of the calendar month
in which termination occurs and the minimum annual bonus payable to you in
accordance with paragraph 3 for the year of the Term in which termination
occurs.

<PAGE>   8

Mr. Edward Stolarski
April 25, 2000
Page 4

              (b) The Company may terminate your employment at any time for
Cause, upon written notice to you. As used in this Agreement, "Cause" shall mean
(i) the willful failure by you to substantially perform your duties hereunder
(other than any such failure resulting from your incapacity due to physical or
mental illness); (ii) any act of fraud, misappropriation, dishonesty,
embezzlement or similar conduct against the Company; (iii) conviction of a
felony or any crime involving moral turpitude; or (iv) gross negligence by you
in the performance of your duties hereunder.

       If your employment is terminated by the Company for any reason other than
as set forth in paragraphs 10(a) and (b) above, the Company shall continue to
pay to you the salary, the minimum guaranteed bonus and healthcare, term life,
disability and automobile benefits that you would have otherwise received during
the Term had your employment not otherwise been terminated. If you terminate
your employment as a result of a Change in Control of the Company (as defined
below), the Company shall pay to you, in one lump sum payment within 30 days
after the Change of Control, the salary and the minimum guaranteed bonus,
together with compensation for lost benefits (which are limited to healthcare,
term life, disability and automobile) through the remainder of the Term, that
you would have otherwise received during the Term had your employment not
otherwise been terminated and, in addition, all options not otherwise vested
pursuant to the Form of Option attached hereto as Exhibit B, shall immediately
vest and be exercisable upon such termination. Change in Control of the Company
shall occur at any time that Jeffrey S. Silverman shall no longer be Chairman of
the Company and the majority of the members of the Board of Directors shall
consist of individuals who were not directors of the Company on the first annual
meeting of shareholders subsequent to the date hereof.

       11.    By accepting the terms contained herein, you acknowledge and
represent that you are not bound by any restriction, covenant or other agreement
that would prohibit or otherwise restrict your employment with the Company.

       12.    This Agreement may be modified only by an instrument in writing
signed by each of us. This Agreement and your employment hereunder shall be
construed in accordance with the laws of the State of New York, applicable to
contracts to be performed entirely within New York State.

       13.    Any notice to be given hereunder shall be in writing and delivered
personally or by certified mail, postage prepaid, return receipt requested,
addressed to the appropriate party at the address indicated above.

<PAGE>   9

Mr. Edward Stolarski
April 25, 2000
Page 5

       Kindly sign a copy of this letter indicating your agreement with respect
hereto.

                                       Very truly yours,

                                       FINANCIAL PERFORMANCE CORPORATION

                                       By: /s/
                                          ---------------------------------
ACCEPTED AND AGREED TO:

/s/ Edward T. Stolarski
---------------------------
    Edward T. Stolarski

Date: April 26, 2000
     -----------------------

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