Judge Shelley Chapman approved the carrier's request following a Wednesday, June 13, hearing.

While the agreement allows LightSquared to fund its operations and reorganization, it contains numerous restrictions and concessions. LightSquared has butted heads with secured creditors of its LightSquared LP unit while seeking permission to use the cash. The matter was originally scheduled for consideration on Monday. Chapman continued cash collateral until Tuesday, but adjourned morning and afternoon hearings before considering the motion on Wednesday.

The telecom faces the double challenge of developing a wireless broadband network and convincing the Federal Communications Commission that it should be allowed to provide the service despite concerns about interference with GPS systems. The company has explored exchanging its licenses for other spectrum that would not affect GPS.

The LP group has argued that LightSquared could deplete its cash by trying in vain to win over the Commission.

The group holds nearly $1.1 billion of $1.7 billion in secured loans at the LP subsidiary. Its members include Appaloosa Management LP, Capital Research and Management Co., Cyrus Capital Partners LP, Fortress Investment Group LLC, Knighthead Capital Management LLC, Redwood Capital Management LLC, Silver Point Capital LP and Solus Alternative Asset Management LP.

Under the cash collateral agreement, the Reston, Va., debtor would pay a committee of lenders with debts against the LightSquared LP unit $6.25 million per month. The funds would cover fees for the group's advisers, White & Case LLP and Blackstone Group LP, and the remainder would be applied toward interest.

The group had sought $8.5 million per month.

LightSquared also must adhere to a budget limiting its operational, capital and restructuring expenses.

The debtor has some flexibility with its operating expenses, which includes lobbying and FCC-related costs. It can exceed the op-ex budget, as long as it does not go more than 15% above the limit for any two months.

The proposal contains restrictions that would trigger a default under such conditions as the appointment of an examiner with expanded powers to do more than monitor the debtor.

If faced with a default, LightSquared would have five days to bring an emergency motion. Chapman questioned the conditions of an examiner's appointment that would qualify as a default during the hearing. The judge said she did not want "to give anyone a weapon" and did not want frequent motions throughout the case to terminate LightSquared's exclusivity or to revoke cash collateral. Chapman also said that she might require the LP creditors to provide more information about their holdings, citing disclosures by a group of preferred shareholders represented by Skadden, Arps, Slate, Meagher & Flom LLP.