Exhibit 10.2

 

SHARE LENDING AGREEMENT

 

Dated as of April 10, 2008

 

Among

 

GLOBALSTAR, INC. (“Lender”),

 

and

 

MERRILL LYNCH INTERNATIONAL (“Borrower”), through MERRILL LYNCH, PIERCE,
FENNER & SMITH INCORPORATED, as agent for Borrower (“Borrowing Agent”).

 

This Agreement sets forth the terms and conditions under which Borrower may
borrow from Lender shares of its Common Stock.

 

The parties hereto agree as follows:

 

SECTION 1.  Certain Definitions.  The following capitalized terms shall have the
following meanings:

 

“Business Day” means a day, other than a Saturday or Sunday, on which
(i) regular trading occurs in the principal trading market for the Common Stock
and (ii) the Clearing Organization is open.

 

“Cash” means any coin or currency of the United States as at the time shall be
legal tender for payment of public and private debts.

 

“Clearing Organization” means The Depository Trust Company, or, if agreed to by
Borrower and Lender, a Securities Intermediary at which Borrower (or Borrowing
Agent) and Lender both maintain accounts.

 

“Closing Price” on any day means, with respect to the Common Stock (i) if the
Common Stock is listed or admitted to trading on a U.S. securities exchange
registered under the Exchange Act or is included in the OTC Bulletin Board
Service (operated by the Financial Industry Regulatory Authority, Inc.), the
last reported sale price, regular way, in the principal trading session on such
day on such market on which the Common Stock is then listed, admitted to trading
or included (or, if the day of determination is not a Business Day, the last
preceding Business Day) and (ii) if the Common Stock is not so listed or
admitted to trading or if the last reported sale price is not obtainable (even
if the Common Stock is listed, admitted to trading or included on such market),
the average of the bid prices for the Common Stock obtained from as many dealers
in the Common Stock (which may include Borrower or its affiliates), but not
exceeding three, as shall furnish bid prices to Borrower.

 

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“Common Stock” means shares of Common Stock, par value $0.0001 per share, of
Lender, or any other security into which the Common Stock shall be exchanged or
converted as the result of any merger, consolidation, other business
combination, reorganization, reclassification, recapitalization or other
corporate action (including, without limitation, a reorganization in
bankruptcy).

 

“Convertible Notes” means the $135,000,000 aggregate principal amount of 5.75%
Convertible Senior Notes due 2028 issued by Lender, or up to $150,000,000
aggregate principal amount to the extent the option to purchase additional
Convertible Notes (the “Option”) is exercised in full as set forth in the
underwriting agreement relating to the Convertible Notes.

 

“Convertible Notes Settlement Date” means April 15, 2008.

 

“Cutoff Time” means 10:00 a.m. in the jurisdiction of the Clearing Organization,
or such other time on a Business Day by which a transfer of Loaned Shares must
be made by Borrower or Lender to the other, as shall be determined in accordance
with market practice.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Guarantor” means Merrill Lynch & Co., Inc.

 

“Indenture” means the Indenture dated April 15, 2008, between Lender and U.S.
Bank, National Association, as trustee, as supplemented by a First Supplemental
Indenture dated April 15, 2008 pursuant to which the Convertible Notes are to be
issued, as such Indenture and supplement are in effect as of the Convertible
Notes Settlement Date.

 

“Lender’s Designated Account” means the securities account of Lender maintained
on the books of Borrower, as Securities Intermediary, and designated
“[                  ]” (account number [                  ]), established
simultaneously with the execution of this Agreement.

 

“Loan Availability Period” means the period beginning on the date hereof and
ending on the earlier of (i) the date as of which the entire principal amount of
Convertible Notes ceases to be outstanding, whether at maturity or as a result
of conversion, redemption, repurchase, cancellation or otherwise and (ii) the
date on which this Agreement shall terminate in accordance with the terms of
this Agreement.

 

“Loaned Shares” means shares of Common Stock initially transferred to Borrower
in a Loan hereunder until such Loan or portion thereof is terminated and a
corresponding number of Loaned Shares is transferred to Lender pursuant to this
Agreement; provided that in respect of any such share of Common Stock initially
transferred to Borrower by Lender and subsequently transferred by Borrower to
another transferee, “Loaned Shares” means an equivalent number of

 

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shares of identical Common Stock. If, as the result of a stock dividend, stock
split or reverse stock split, the number of outstanding shares of Common Stock
is increased or decreased, then the number of Loaned Shares under outstanding
Loans shall, effective as of the payment or delivery date of any such event, be
proportionately increased or decreased, as the case may be.  If any new or
different security (or two or more securities) or other property shall be
exchanged for the outstanding shares of Common Stock as the result of any
reorganization, merger, consolidation, reclassification, recapitalization or
other corporate action (including, without limitation, a reorganization in
bankruptcy), such new or different security (or such two or more securities
collectively) or other property shall, effective upon such exchange, be deemed
to become a Loaned Share in substitution for the former Loaned Share for which
such exchange is made, and in the same proportion for which such exchange is
made.  For purposes of return of Loaned Shares by Borrower or purchase or sale
of securities pursuant to Section 4 or Section 10, such term shall mean
securities of the same issuer, class and quantity as the Loaned Shares as
adjusted pursuant to the two preceding sentences.

 

“Maximum Number of Shares” means 36,144,570 shares of Common Stock, subject to
the following adjustments:

 

(a)           If, as the result of a stock dividend, stock split or reverse
stock split, the number of outstanding shares of Common Stock is increased or
decreased, the Maximum Number of Shares shall, effective as of the payment or
delivery date of any such event, be proportionally increased or decreased, as
the case may be.

 

(b)           If, pursuant to a merger, consolidation, other business
combination, reorganization, reclassification, recapitalization or other
corporate action (including, without limitation, a reorganization in
bankruptcy), the Common Stock is exchanged for, or converted into, cash,
securities or other property (the “Reference Property”):

 

(i)            if such Reference Property consists entirely of securities or
property other than cash (but including two or more securities or different
types of property), then, on the exchange or conversion date for any such event,
the Maximum Number of Shares shall be proportionally increased or decreased to
reflect the amount of securities or other property per share of Common Stock for
which an exchange or conversion was made (or, in the case of more than one type
of security or item of property, the Maximum Number of Shares shall be
apportioned and proportionally divided among each such type of security or
property); and

 

(ii)           if such Reference Property consists of a combination of cash and
securities or other property, then, on the exchange or conversion date for any
such event, the Maximum Number of Shares shall be adjusted as set forth under
clause (i) above as if such Reference Property did not include any cash, and
Borrower shall pay the cash amount as set forth in Section 4(d) hereof.

 

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(c)           If any Convertible Notes are tendered to Lender for conversion in
accordance with the terms of such Convertible Notes, the Maximum Number of
Shares shall, upon delivery to Borrower, within two Business Days of receipt by
Lender of a conversion notice, a notice setting forth the conversion settlement
date of such Convertible Notes, effective as of the final date Lender delivers
cash and/or shares of Common Stock in satisfaction of the related conversion
obligation, be reduced by a number of shares of Common Stock (rounded down to
the nearest whole share) equal to the product of the Maximum Number of Shares
immediately prior to such conversion and a fraction, the numerator of which is
the principal amount of Convertible Notes tendered for conversion and the
denominator of which is the principal amount of Convertible Notes outstanding as
of initial issuance (plus any amount of Convertible Notes issued pursuant to the
Option).

 

(d)           Notwithstanding the foregoing, if, at any time after the
Convertible Notes Settlement Date, the Maximum Number of Shares exceeds the
product of (i) the aggregate principal amount of Convertible Notes issued on
such Convertible Notes Settlement Date plus, as of any time prior to the
expiration of the Option, Convertible Notes issuable upon exercise of the
Option, divided by $1,000, and (ii) the Conversion Rate (as such term is used in
the Indenture), then, effective at such time, the Maximum Number of Shares shall
be reduced by such excess.

 

“Reference Property” has the meaning set forth in the definition of “Maximum
Number of Shares” above.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Intermediary” means a “securities intermediary” as defined by
Section 8-102(a)(14) of the UCC.

 

“UCC” means the Uniform Commercial Code, as in effect in the State of New York,
as in effect from time to time.  Any reference to particular sections of the UCC
shall be deemed to embrace successor renumbered provisions thereof.

 

SECTION 2.  Loans of Shares; Transfers of Loaned Shares.

 

(a)           Subject to the terms and conditions of this Agreement, Lender
hereby agrees to make available for borrowing by Borrower, at any time and from
time to time, during the Loan Availability Period, shares of Common Stock up to,
in the aggregate, the Maximum Number of Shares.

 

(b)           Subject to the terms and conditions of this Agreement, Borrower
may by written notice to Lender during the Loan Availability Period (a
“Borrowing Notice”), seek to initiate a transaction in which Lender will lend
Loaned Shares to Borrower through the issuance by Lender of such Loaned Shares
to Borrower upon the terms, and subject to the conditions, set forth in this
Agreement (each such issuance and loan, a “Loan”).  Each Loan shall be

 

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confirmed by a schedule and receipt listing the Loaned Shares provided by Lender
to Borrower (the “Confirmation”).  Such Confirmation shall constitute conclusive
evidence with respect to the Loan, including the number of shares of Common
Stock that are the subject of the Loan to which the Confirmation relates, unless
a written objection to the Confirmation specifying the reasons for the objection
is received by Lender from Borrower within five Business Days after the receipt
of the Confirmation to Borrower; provided that in no event shall the delivery of
the Confirmation or any such objection thereto delay the transfer of Loaned
Shares to which a Borrowing Notice relates pursuant to clause (d) below.

 

(c)           Notwithstanding anything to the contrary in this Agreement,
Borrower shall not be permitted to borrow or have any right to take delivery of,
or otherwise receive or be deemed to have received, any shares of Common Stock
hereunder to the extent (but only to the extent) that after such receipt of such
Common Stock (i) the “beneficial ownership” (within the meaning of
Section 13 (d) of the Exchange Act and the rules and regulations promulgated
thereunder) of Common Stock by Borrower or any affiliate of Borrower subject to
aggregation with Borrower under such Section 13(d) and such rules would exceed
9.9%, as determined by Borrower in its sole discretion, or (ii) Borrower would
be subject to Section 16(b) of the Exchange Act, as determined by Borrower in
its sole discretion, and any Loan hereunder shall be void and have no effect to
the extent (but only to the extent) that such “beneficial ownership” would be in
excess of 9.9% or Borrower would become subject to Section 16(b) of the Exchange
Act.  If any delivery owed to Borrower hereunder is not made, in whole or in
part, as a result of this provision, Lender’s obligation to make such delivery
shall not be extinguished and Lender shall make such delivery as promptly as
practicable after, but in no event later than one Business Day after, Borrower
gives notice to Lender that such delivery would not result in such “beneficial
ownership” being in excess of 9.9% or Borrower’s becoming subject to
Section 16(b) of the Exchange Act.  If, notwithstanding the foregoing, any
delivery of Common Stock is erroneously made to Borrower or Borrower otherwise
receives or is deemed to have received Common Stock in excess of the foregoing
limitation contrary to the first sentence of this clause (c), such Common Stock
shall remain the property of Lender and Borrower shall be deemed to hold the
same as bailee of Lender and shall have no voting, dispositive control or
pecuniary interest with respect thereto.

 

(d)           Lender shall transfer Loaned Shares to Borrower on or before the
Cutoff Time on the date specified in the Borrowing Notice for the commencement
of a Loan, which date shall not be earlier than the third Business Day following
receipt by Lender of the Borrowing Notice.  Delivery of the Loaned Shares to
Borrower shall be made in the manner set forth under Section 11 below.

 

SECTION 3.  Loan Fee.  Borrower agrees to pay Lender a single loan fee per Loan
(a “Loan Fee”) equal to $0.0001 per Loaned Share.  The Loan Fee shall be paid by
Borrower on or before the time of transfer of the Loaned Shares pursuant to
Section 2 (d) on a delivery-versus-payment basis through the facilities

 

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of the Clearing Organization. Lender agrees that the Loan Fee will constitute
consideration for the issuance of the Loaned Shares to be issued by Lender.

 

SECTION 4.  Loan Terminations.

 

(a)           Borrower may terminate all or any portion of a Loan on any
Business Day by giving written notice thereof to Lender and transferring the
corresponding number of Loaned Shares to Lender, without any consideration being
payable in respect thereof by Lender to Borrower.

 

(b)           All outstanding Loans, if any, shall terminate on the date this
Agreement terminates pursuant to Section 13 (the “Facility Termination Date”)
and all Loaned Shares under outstanding Loans shall be delivered by Borrower to
Lender, without any consideration being payable in respect thereof by Lender to
Borrower, no later than the fifth Business Day following the Facility
Termination Date.

 

(c)           Subject to Section 4(d), if on any date, the aggregate number of
Loaned Shares under outstanding Loans exceeds the Maximum Number of Shares, the
number of Loaned Shares in excess of the Maximum Number of Shares shall be
delivered by Borrower to Lender, without any consideration being payable in
respect thereof by Lender to Borrower.

 

(d)           If, pursuant to a merger, consolidation, other business
combination, reorganization, reclassification, recapitalization or other
corporate action (including, without limitation, a reorganization in
bankruptcy), the Common Stock is exchanged for, or converted into, Reference
Property, then:

 

(i)    if such Reference Property consists entirely of cash, all outstanding
Loans shall terminate on the date of effectiveness of any such exchange or
conversion and Borrower shall, on or prior to the fifth Business Day following
such effective date, pay, in full satisfaction of any obligation to return
Loaned Shares hereunder, cash in an amount equal to the product of (A) the
number of Loaned Shares outstanding immediately prior to such effective date and
(B) the amount of cash per share of Common Stock received by holders of Common
Stock in such event; and

 

(ii)   if such Reference Property consists of cash and securities or other
property, (A) no outstanding Loans shall terminate as a result of any such
event, (B) the amount of Loaned Shares and Maximum Number of Shares shall be
adjusted as set forth in their respective definitions, and (C) Borrower shall,
on the fifth Business Day following the effective date of any such exchange or
conversion, pay cash in an amount equal to the product of (1) the number of
Loaned Shares outstanding immediately prior to such effective date (without, for
the avoidance of doubt, giving effect to any adjustment) and (2) the amount of
cash per share of Common Stock received by holders of Common Stock in such
event.

 

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(e)           If, as a result of complying with this Section 4 as promptly as
reasonably practicable (but subject to applicable law, regulation or policy),
(i) the “beneficial ownership” (within the meaning of Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder) of Common
Stock by Borrower or any affiliate of Borrower subject to aggregation with
Borrower under such Section 13(d) and such rules would exceed 9.9%, as
determined by Borrower in its sole discretion, or (ii) Borrower would be subject
to Section 16(b) of the Exchange Act, as determined by Borrower in its sole
discretion, then Borrower shall be permitted to extend the date on which Loaned
Shares are due under this Section 4 for all or a portion of the corresponding
delivery obligation but in no event longer than such time to allow Borrower to
return such Loaned Shares, through one transaction or a series of transactions,
without causing such “beneficial ownership” to be in excess of 9.9% or Borrower
to become subject to Section 16(b) of the Exchange Act, as determined by
Borrower in its sole discretion.  In addition, if Borrower is unable to satisfy
its obligations to deliver any Common Stock under this Section 4 due to
illiquidity in the market for Common Stock, Borrower shall, upon prior written
notice to Lender, deliver such Common Stock as promptly as reasonably
practicable thereafter.

 

SECTION 5.  Distributions.

 

(a)           If Lender pays a cash dividend or makes a cash distribution in
respect of all of its outstanding Common Stock, Borrower shall pay to Lender,
within one Business Day after the payment of such dividend or distribution, an
amount in cash equal to the product of (i) the amount per share of such dividend
or distribution and (ii) the aggregate number of Loaned Shares under outstanding
Loans as of the record date of such dividend or distribution.

 

(b)           If Lender makes a distribution in respect of all of its
outstanding Common Stock in property or securities, including any options,
warrants, rights or privileges in respect of securities (other than a
distribution of Common Stock as to which the number of Loaned Shares shall be
adjusted pursuant to the definition of “Loaned Shares,” but including any
options, warrants, rights or privileges exercisable for, convertible into or
exchangeable for Common Stock) (a “Non-Cash Distribution”), then (i) Non-Cash
Distributions shall be treated as additional Loans of such Non-Cash Distribution
in an amount equal to the product of (x) the amount per share of Common Stock of
such Non-Cash Distribution and (y) the aggregate number of Loaned Shares under
outstanding Loans as of the record date of such dividend or distribution, and
(ii) the definition of “Loaned Share” shall be deemed to be modified to include
the per share of Common Stock kind and amount of such Non-Cash Distribution.

 

SECTION 6.  Rights in Respect of Loaned Shares.

 

Subject to the terms of this Agreement, and except as otherwise agreed by
Borrower and Lender, Borrower, insofar as it is the record owner of Loaned
Shares, shall have all of the incidents of ownership in respect of any such
Loaned

 

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Shares until such Loaned Shares are required to be delivered to Lender in
accordance with the terms of this Agreement, including the right to transfer the
Loaned Shares to others. Borrower agrees that it or any of its affiliates that
are the record owner of any Loaned Shares initially transferred to Borrower from
Lender as a Loan hereunder, prior to any sale thereof under a registration
statement by Borrower, will not vote or provide any consent or take any similar
action with respect to such Loaned Shares on any matter submitted to a vote of
Lender’s stockholders during the term of the Loan; provided, however that, for
the avoidance of doubt, this sentence shall only apply to Loaned Shares
transferred to Borrower that have not been offered and sold in a registered
public offering in accordance with the terms of the Underwriting Agreement dated
as of the date hereof among Borrower, Lender and Borrowing Agent or returned to
Lender in accordance with the terms of this Agreement.

 

SECTION 7.  Representations and Warranties.

 

(a)           Each of Borrower and Lender represents and warrants to the other
that:

 

(i)    it has full power to execute and deliver this Agreement, to enter into
the Loans contemplated hereby and to perform its obligations hereunder;

 

(ii)   it has taken all necessary action to authorize such execution, delivery
and performance;

 

(iii)  this Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms;

 

(iv)  the execution, delivery and performance of this Agreement does not and
will not violate, contravene, or constitute a default under, (A) its certificate
of incorporation, bylaws or other governing documents, (B) any laws, rules or
regulations of any governmental authority to which it is subject, (C) any
contracts, agreements or instrument to which it is a party or (D) any judgment,
injunction, order or decree by which it is bound, except, in the case of each of
clauses (C) and (D), for any such violation, contravention or default that would
not reasonably be expected to have a material adverse effect on the financial
condition, business, properties or results of operations of Lender and its
subsidiaries, or Borrower and its affiliates, as applicable, taken as a whole;
provided that any violation, contravention or default that would impact the
performance of any party’s obligations under this Agreement shall be deemed to
have a material adverse effect on the financial condition, business, properties
or results of operations of such party and not qualify for the exception to
clauses (C) and (D) described above; and

 

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(v)   this Agreement is not unsuitable for it in the light of such party’s
financial situation, investment objectives and needs and  it is entering into
this Agreement in reliance upon such tax, accounting, regulatory, legal and
financial advice as it deems necessary and not upon any view expressed by the
other or the Borrowing Agent.

 

(b)           Lender represents and warrants to Borrower, as of the date hereof,
and as of the date any Loaned Shares are transferred to Borrower in respect of
any Loan hereunder, that the Loaned Shares and all other outstanding shares of
Common Stock of Lender have been duly authorized and, upon the issuance and
delivery of the Loaned Shares to Borrower in accordance with the terms and
conditions hereof, and subject to the contemporaneous or prior receipt of the
applicable Loan Fee by Lender, the Loaned Shares will be duly authorized,
validly issued, fully paid non-assessable shares of Common Stock; and the
stockholders of Lender have no preemptive rights with respect to the Loaned
Shares.

 

(c)           Lender represents and warrants to Borrower, as of the date hereof,
and as of the date any Loaned Shares are transferred to Borrower in respect of
any Loan hereunder, that the outstanding shares of Common Stock are listed on
The NASDAQ Global Select Market (the “NASDAQ”) and the Loaned Shares have been
approved for listing on the NASDAQ, subject to official notice of issuance.

 

(d)           Lender represents and warrants to Borrower, as of the date hereof,
and as of the date any Loaned Shares are transferred to Borrower in respect of
any Loan hereunder, that Lender is not “insolvent” (as such term is defined
under Section 101 (32) of Title 11 of the United States Code (the “Bankruptcy
Code”) and any applicable state law) and Lender would be able to purchase the
Maximum Number of Shares in compliance with the laws of Lender’s jurisdiction of
organization.

 

(e)           The representations and warranties of Borrower and Lender under
this Section 7 shall remain in full force and effect at all times during the
term of this Agreement and shall survive the termination of this Agreement for
any reason.

 

SECTION 8.  Covenants.

 

(a)           Borrower covenants and agrees with Lender that it will not
transfer or dispose of any Loaned Shares transferred to Borrower by Lender as a
Loan hereunder of which it is the record owner except pursuant to a registration
statement that is effective under the Securities Act; provided that Borrower may
transfer any such Loaned Shares to any of its affiliates without a registration
statement so long as such affiliate transferee does not transfer or dispose of
such Loaned Shares to any non-affiliated transferee except pursuant to a
registration statement that is effective under the Securities Act.

 

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(b)           Lender agrees and acknowledges that Borrower has represented to
Lender that Borrower is a “financial institution” within the meaning of
Section 101(22) of the Bankruptcy Code.  The parties hereto further agree and
acknowledge (A) that this Agreement is intended to be  a “securities contract,”
as such term is defined in Section 741(7) of the Bankruptcy Code, with respect
to which each payment and delivery hereunder is a “settlement payment,” or
“margin payment,” as such terms are defined in Section 741 (8) and
Section 741(5) of the Bankruptcy Code, and  a “swap agreement,” as such term is
defined in Section 101 (53B) of the Bankruptcy Code, with respect to which each
payment and delivery hereunder is a “transfer,” as such term is defined in
Section 101(54) of the Bankruptcy Code, and (B) that Borrower is intended to be
entitled to the protections afforded by, among other sections, Sections
362(b)(6), 362(b)(17), 546(e), 546(g), 555 and 560 of the Bankruptcy Code.

 

(c)           Lender covenants and agrees that, on any day on which Lender
effects any repurchase of shares of Common Stock, Lender shall give Borrower a
written notice of the number of its outstanding shares of Common Stock (a
“Repurchase Notice”) if, following such repurchase, the number of outstanding
shares of Common Stock shall have decreased by more than 1.0% since the
immediately preceding Repurchase Notice (or, in the case of the first such
Repurchase Notice, the number of outstanding shares of Common Stock as of the
date hereof); provided that, as of any date, for purposes of calculating the
number of outstanding shares of Common Stock as of the date of the immediately
preceding Repurchase Notice, such number shall be adjusted as set forth in
clauses (a) and (b) of the definition of “Maximum Number of Shares” above, to
the same extent the number of shares of Common Stock are adjusted therein, and
only to the extent that any of the events listed in such clauses (a) and
(b) have occurred between the date of the immediately preceding Repurchase
Notice and such date.

 

(d)           Lender covenants and agrees that, unless otherwise agreed to by
Borrower in writing, Lender shall not, nor shall cause any other person to,
directly or indirectly, purchase shares of Common Stock such that, after giving
effect to such purchase, the aggregate number of Loaned Shares under outstanding
Loans shall be in excess of 25% of the number of outstanding shares of Common
Stock at such time.

 

(e)           Lender covenants and agrees that, on the date hereof, Lender shall
provide to Borrower a properly executed Internal Revenue Service Form W-9.

 

SECTION 9.  Events of Default.

 

(a)           All Loans, and any further obligation to make Loans under this
Agreement, may, at the option of Lender by a written notice to Borrower (which
option shall be deemed exercised, even if no notice is given, immediately upon
the occurrence of an event specified in either Section 9(a)(iii) or
Section 9(a)(iv) below), be terminated (i) immediately upon the occurrence of
any of the events

 

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set forth in Section 9(a)(iii) or Section 9(a)(iv) below and (ii) two Business
Days following such notice upon the occurrence of any of the other events set
forth below, (each, a “Borrower Default”):

 

(i)       Borrower fails to deliver Loaned Shares to Lender as required by
Section 4;

 

(ii)      Borrower fails to deliver or pay to Lender when due any cash,
securities or other property as required by Section 5;

 

(iii)     the filing by or on behalf of Borrower of a voluntary petition or an
answer seeking reorganization, arrangement, readjustment of its debts or for any
other relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution, winding-up or liquidation or
similar act or law, of any state, federal or other applicable foreign
jurisdictions, now or hereafter existing (“Bankruptcy Law”), or any action by
Borrower for, or consent or acquiescence to, the appointment of a receiver
trustee, custodian or similar official of Borrower, or of all or a substantial
part of its property; or the making by Borrower of a general assignment for the
benefit of creditors; or the admission by Borrower in writing of its inability
to pay its debts as they become due;

 

(iv)     the filing of any involuntary petition against Borrower in bankruptcy
or seeking reorganization, arrangement, readjustment of its debts or for any
other relief under any Bankruptcy Law and an order for relief by a court having
jurisdiction in the premises shall have been issued or entered therein; or any
other similar relief shall be granted under any applicable federal or state law
or law of any other applicable foreign jurisdictions; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers over
Borrower or over all or a part of its property shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian of
Borrower or of all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial part
of the property of Borrower; and continuance of any such event for 15
consecutive calendar days unless dismissed, bonded to the satisfaction of the
court having jurisdiction in the premises or discharged;

 

(v)      Borrower fails to provide any indemnity as required by Section 12;

 

(vi)     Borrower notifies Lender of its inability to or intention not to
perform Borrower’s obligations hereunder or otherwise disaffirms, rejects or
repudiates any of its obligations hereunder; or

 

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(vii)    any representation made by Borrower under this Agreement in connection
with any Loan or Loans hereunder shall be incorrect or untrue in any material
respect during the term of any Loan hereunder or Borrower fails to comply in any
material respect with any of its covenants under this Agreement.

 

(b)        All Loans, and any further obligation to make Loans under this
Agreement, may, at the option of Borrower by a written notice to Lender, be
terminated two Business Days following such notice by Borrower upon the
occurrence of any of the events set forth below (each, a “Lender Default,” and
any Lender Default or Borrower Default, a “Default”):

 

(i)    the filing by or on behalf of Lender of a voluntary petition or an answer
seeking reorganization, arrangement, readjustment of its debts or for any other
relief under any Bankruptcy Law, or any action by Lender for, or consent or
acquiescence to, the appointment of a receiver, trustee, custodian or similar
official of Lender, or of all or a substantial part of its property; or the
making by Lender of a general assignment for the benefit of creditors; or the
admission by Lender in writing of its inability to pay its debts as they become
due; or

 

(ii)    the filing of any involuntary petition against Lender in bankruptcy or
seeking reorganization, arrangement, readjustment of its debts or for any other
relief under any Bankruptcy Law and an order for relief by a court having
jurisdiction in the premises shall have been issued or entered therein; or any
other similar relief shall be granted under any applicable federal or state law
or law of any other applicable foreign jurisdictions; or a decree or order of a
court having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee or other officer having similar powers over
Lender or over all or a part of its property shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian of
Lender or of all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial part
of the property of Lender; and continuance of any such event for 45 consecutive
calendar days unless dismissed, bonded to the satisfaction of the court having
jurisdiction in the premises or discharged.

 

SECTION 10.  Lender’s Remedies.

 

(a)        Notwithstanding anything to the contrary herein, if Borrower is
required to return Loaned Shares pursuant to Section 4 and, on the date on which
Borrower is required to return Loaned Shares pursuant to Section 4, the purchase
of Common Stock by Borrower in an amount equal to all or any portion of the
number of Loaned Shares to be delivered to Lender shall (1) be prohibited by any
law, rules or regulation of any governmental authority to which it is or would
be subject, (2) violate, or would upon such purchase likely violate, any order
or

 

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prohibition of any court, tribunal or other governmental authority, (3) require
the prior consent of any court, tribunal or governmental authority prior to any
such repurchase or (4) subject Borrower, in the commercially reasonable judgment
of Borrower, to any liability or potential liability under any applicable
federal securities laws (other than Section 11 and Section 16(b) of the Exchange
Act or illiquidity in the market for Common Stock, in which events Section 4(e)
hereof shall govern) (each of (i), (ii), (iii) and (iv), a “Legal Obstacle”),
then, in each case, Borrower shall immediately notify Lender of the Legal
Obstacle and the basis therefor, whereupon Borrower’s obligation to deliver
Loaned Shares to Lender shall be suspended until such time as no Legal Obstacle
with respect to such obligations shall exist (a “Repayment Suspension”). 
Following the occurrence of and during the continuation of any Repayment
Suspension, Borrower shall use its reasonable best efforts to remove or cure the
Legal Obstacle as soon as practicable; provided that, Lender shall promptly
reimburse all costs and expenses (including legal counsel to Borrower) incurred
or, at Borrower’s election, provide reasonably adequate surety or guarantee for
any such costs and expenses that may be incurred by Borrower, in each case in
removing or curing such Legal Obstacle.  If Borrower is unable to remove or cure
the Legal Obstacle within a reasonable period of time under the circumstances,
Borrower shall pay to Lender, in lieu of the delivery of Loaned Shares otherwise
required to be delivered, an amount in immediately available funds (the
“Replacement Cash”) equal to the product of the Closing Price as of the Business
Day immediately preceding the date Borrower makes such payment and the number of
Loaned Shares otherwise required to be delivered.

 

(b)        If Borrower shall fail to deliver Loaned Shares to Lender on the due
date when any Loan is terminated under Section 4 or Borrower shall fail to pay
the Replacement Cash to Lender in accordance with Section 10(a) above (to the
extent Borrower is permitted and elects to pay Replacement Cash), then, in
either case, in addition to any other remedies available to Lender under this
Agreement or under applicable law, Lender shall have the right (without further
notice to Borrower) to purchase a like number of shares of Common Stock (and,
Non-Cash Distributions, if applicable pursuant to Section 5(b)) (“Replacement
Shares”) in the principal market for such securities in a commercially
reasonable manner (and Lender shall promptly notify Borrower of the aggregate
purchase price of the Replacement Shares upon the exercise of such right);
provided that Lender shall not be permitted to exercise its right to purchase
Replacement Shares if Borrower is delivering Loaned Shares to Lender in
accordance with Section 4(e), and provided further that if any Repayment
Suspension or failure to deliver shall exist and be continuing, Lender shall not
be permitted to exercise its right to purchase Replacement Shares unless
Borrower shall fail to deliver the Loaned Shares or pay the Replacement Cash to
Lender in accordance with Section 10(a) above.  To the extent Lender shall
exercise such right, Borrower’s obligation to return a like amount of Loaned
Shares or to pay the Replacement Cash, as applicable, shall terminate and
Borrower shall be liable to Lender for the purchase price of such Replacement
Shares (plus all other amounts, if any, due to Lender hereunder). 

 

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The purchase price of Replacement Shares purchased under this Section 10 shall
include broker’s fees and commissions and all other reasonable costs, fees and
expenses related to such purchase and sale.  If Lender exercises its rights
under this Section 10, Lender may elect in its sole discretion, in lieu of
purchasing all or a portion of the Replacement Shares, to be deemed to have made
such purchase of Replacement Shares for an amount equal to the Closing Price of
the Common Stock on the date Lender elects to exercise this remedy.  The parties
hereby agree that repurchase of the Replacement Shares in a manner intended to
allow Lender to avail itself of the safe harbor provided by Rule 10b-18 under
the Exchange Act shall be considered commercially reasonable.

 

SECTION 11.  Transfers.

 

(a)        All transfers of Loaned Shares to Borrower hereunder shall be made by
the crediting by a Clearing Organization of such financial assets to Borrower’s
“securities account” (within the meaning of Section 8-501 of the UCC) maintained
with such Clearing Organization.  All transfers of Loaned Shares to Lender
hereunder shall be made by the crediting of such Loaned Shares to Lender’s
Designated Account (whereupon, for the avoidance of doubt, such Loaned Shares
credited to Lender’s Designated Account shall become the property of Lender, and
Borrower shall have no voting, dispositive control or pecuniary interest with
respect thereto).  In every transfer of “financial assets” (within the meaning
of Section 8-102(a)(9) of the UCC) hereunder, the transferor shall take all
steps necessary (i) to effect a delivery of such financial assets to the
transferee under Section 8-301 of the UCC, or to cause the creation of a
security entitlement in favor of the transferee in such financial assets under
Section 8-501 of the UCC, (ii) to enable the transferee to obtain “control”
(within the meaning of Section 8-106 of the UCC), and (iii) to provide the
transferee with comparable rights under any similar law or regulation of any
other jurisdiction that is applicable to such transfer.

 

(b)        Except as otherwise provided herein, all transfers of cash hereunder
to Borrower or Lender shall be by wire transfer in immediately available, freely
transferable funds.

 

(c)        A transfer of securities or cash may be effected under this
Section 11 on any Business Day except (i) a Business Day on which the transferee
is closed for business at its address set forth in Section 16 or (ii) a Business
Day on which a Clearing Organization or wire transfer system is closed, if the
facilities of such Clearing Organization or wire transfer system are required to
effect such transfer.  Any transfer not effected because of this clause
(c) shall be made on the next following Business Day on which such transfer may
be made.

 

SECTION 12.  Indemnities.

 

(a)        Lender hereby agrees to indemnify and hold harmless Borrower and its
affiliates and its former, present and future directors, officers, employees and

 

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other agents and representatives from and against any and all liabilities,
judgments, claims, settlements, losses, damages, fees, liens, taxes, penalties,
obligations and expenses (including, without limitation, any losses relating to
Borrower’s market activities as a consequence of becoming, or of the risk of
becoming, subject to Section 16(b) of the Exchange Act, including, without
limitation, any forbearance from market activities or cessation of market
activities and any losses in connection therewith) incurred or suffered by any
such person or entity directly or indirectly arising from, by reason of, or in
connection with, (i) any breach by Lender of any of its representations or
warranties contained in Section 7 or (ii) any breach by Lender of any of its
covenants or agreements in this Agreement.

 

(b)        Borrower hereby agrees to indemnify and hold harmless Lender and its
affiliates and its former, present and future directors, officers, employees and
other agents and representatives from and against any and all liabilities,
judgments, claims, settlements, losses, damages, fees, liens, taxes, penalties,
obligations and expenses incurred or suffered by any such person or entity
directly or indirectly arising from, by reason of, or in connection with (i) any
breach by Borrower of any of its representations or warranties contained in
Section 7 or (ii) any breach by Borrower of any of its covenants or agreements
in this Agreement.

 

(c)        In case any claim or litigation which might give rise to any
obligation of a party under this Section 12 (each an “Indemnifying Party”) shall
come to the attention of the party seeking indemnification hereunder (the
“Indemnified Party”), the Indemnified Party shall promptly notify the
Indemnifying Party in writing of the existence and amount thereof; provided that
the failure of the Indemnified Party to give such notice shall not adversely
affect the right of the Indemnified Party to indemnification under this
Agreement, except to the extent the Indemnifying Party is materially prejudiced
thereby.  The Indemnifying Party shall promptly notify the Indemnified Party in
writing if it accepts such claim or litigation as being within its
indemnification obligations under this Section 12.  Such response shall be
delivered no later than 30 days after the initial notification from the
Indemnified Party; provided that, if the Indemnifying Party reasonably cannot
respond to such notice within 30 days, the Indemnifying Party shall respond to
the Indemnified Party as soon thereafter as reasonably possible.

 

(d)        An Indemnifying Party shall be entitled to participate in and, if
(i) in the judgment of the Indemnified Party such claim can properly be resolved
by money damages alone and the Indemnifying Party has the financial resources to
pay such damages and (ii) the Indemnifying Party admits that this indemnity
fully covers the claim or litigation, the Indemnifying Party shall be entitled
to direct the defense of any claim at its expense, but such defense shall be
conducted by legal counsel reasonably satisfactory to the Indemnified Party.  An
Indemnified Party shall not make any settlement of any claim or litigation under
this Section 12 without the written consent of the Indemnifying Party.

 

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SECTION 13.  Termination of Agreement.

 

(a)        This Agreement shall terminate upon the earliest of (i) the date as
of which Lender has notified Borrower in writing of its intention to terminate
this Agreement at any time after the entire principal amount of Convertible
Notes ceases to be outstanding and Lender has settled all payments or deliveries
in respect of such Convertible Notes (as such settlement may be extended
pursuant to market disruption events or otherwise pursuant to the Indenture),
whether as a result of conversion, redemption, repurchase, cancellation, at
maturity or otherwise, (ii) the written agreement of Lender and Borrower to so
terminate, (iii) the termination of the underwriting agreement relating to the
Convertible Notes without issuance of the Convertible Notes or the failure of
the initial offering of the Convertible Notes to close, in each case pursuant to
the terms of such underwriting agreement and the Indenture, (iv) the occurrence
of a Borrower Default, at the option of Lender, as set forth in Section 9(a) and
(v) the occurrence of a Lender Default, at the option of Borrower, as set forth
in Section 9(b).

 

(b)        Unless otherwise agreed in writing by Borrower and Lender, the
provisions of Section 12 shall survive the termination of this Agreement.

 

SECTION 14.  Delegation.

 

Neither party shall delegate its obligations under this Agreement without the
prior written consent of the other party, and any attempt to delegate
obligations arising under this Agreement without such consent shall be void;
provided that notwithstanding the foregoing and anything to the contrary herein,
Borrower may designate any person to deliver Loaned Shares to Lender when due in
accordance with this Agreement and to otherwise perform Borrower’s obligations
in respect of this Agreement and any such designee may assume such obligations. 
Borrower shall only be discharged of its obligations to Lender to the extent of
any such delivery or performance.

 

SECTION 15.  Transfer and Assignment.

 

Neither party shall transfer or assign its rights or obligations under this
Agreement without the prior written consent of the other party, and any attempt
to transfer or assign any rights or obligations arising under this Agreement
without such consent shall be void; provided that notwithstanding the foregoing
and anything to the contrary herein, Borrower shall have the right to assign its
rights and obligations under this Agreement to any of its affiliates and be
released from all of its obligations under this Agreement so long as the
guarantee executed and delivered by Guarantor in accordance with Section 19 (or
a replacement guarantee in substantially the same form) shall remain in full
force and effect.

 

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SECTION 16.  Notices.

 

(a)        All notices and other communications hereunder shall be in writing
and shall be deemed to have been duly given when received.

 

(b)        All such notices and other communications shall be directed to the
following address:

 

(i)                                   If to Borrower or Borrowing Agent to:

Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, NY 10080

 

(ii)                                If to Securities Intermediary to:

Merrill Lynch, Pierce, Fenner & Smith Incorporated
4 World Financial Center
New York, NY 10080

 

(iii)                            Globalstar, Inc.
461 South Milpitas Blvd.
Milpitas, California 95035
Attention:  Chief Financial Officer
Facsimile:  408-933-4949

 

(c)        In the case of any party, at such other address as may be designated
by written notice to the other parties.

 

SECTION 17.  Governing Law; Submission To Jurisdiction; Severability.

 

(a)        This Agreement shall be governed by and construed in accordance with
the laws of the State of New York, but excluding any choice of law provisions
that would require the application of the laws of a jurisdiction other than New
York.

 

(b)        EACH PARTY HERETO IRREVOCABLY AND UNCONDITIONALLY (A) SUBMITS TO THE
NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT
SITTING IN NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY SUCH COURT, SOLELY
FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING BROUGHT TO ENFORCE ITS
OBLIGATIONS HEREUNDER OR RELATING IN ANY WAY TO THIS AGREEMENT OR ANY LOAN
HEREUNDER AND (B) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, ANY
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT AND ANY RIGHT OF JURISDICTION ON ACCOUNT OF ITS PLACE OF
RESIDENCE OR DOMICILE.

 

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(c)        EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY RIGHT THAT IT
MAY HAVE TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

(d)        To the extent permitted by law, the unenforceability or invalidity of
any provision or provisions of this Agreement shall not render any other
provision or provisions herein contained unenforceable or invalid.

 

SECTION 18.  Counterparts.  This Agreement may be executed in any number of
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same agreement.

 

SECTION 19.  Parent Guarantee.

 

On or prior to the date of the transfer of Loaned Shares to Borrower in a Loan
pursuant to this Agreement, Merrill Lynch & Co., Inc., a Delaware corporation,
will execute a parent guarantee in favor of Lender substantially in the form of
Annex A hereto.

 

SECTION 20.  Amendments.

 

No amendment or modification in respect of this Agreement shall be effective
unless it shall be in writing and signed by the parties hereto.

 

SECTION 21.  Capacity of Borrowing Agent.

 

Borrowing Agent is acting in connection with this Agreement solely in its
capacity as Borrowing Agent for Lender and Borrower pursuant to instructions
from Borrower and Lender.  Borrowing Agent shall have no responsibility or
personal liability to Lender or Borrower arising from any failure by Lender or
Borrower to pay or perform any obligations hereunder, or to monitor or enforce
compliance by Lender or Borrower with any obligation hereunder.  Each of Lender
and Borrower agrees to proceed solely against the other to collect or recover
any securities or monies owing to it in connection with or as a result of this
Agreement.  Borrowing Agent shall otherwise have no liability in respect of this
Agreement, except for its gross negligence or willful misconduct in performing
its duties as Borrowing Agent.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Share Lending
Agreement as of the date and year first above written.

 

 

GLOBALSTAR, INC.

 

as Lender

 

MERRILL LYNCH
INTERNATIONAL
as Borrower

 

 

 

 

 

 

By:

/s/ FUAD AHMAD

 

By:

/s/ RAJEEV PATEL

 

Name:

Fuad Ahmad

 

 

Name:

Rajeev Patel

 

Title:

Vice President and

 

 

Title:

Authorized Signatory

 

 

Chief Financial

 

 

 

 

 

 

Officer

 

 

 

 

 

 

 

 

MERRILL LYNCH, PIERCE,

 

 

 

 

FENNER & SMITH

 

 

 

 

INCORPORATED

 

 

 

 

as Borrowing Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ ROBERT GENKINGER

 

 

 

 

 

Name:

Robert Genkinger

 

 

 

 

 

Title:

Director

 

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ANNEX A

 

Form of Parent’s Guarantee

 

GUARANTEE OF MERRILL LYNCH & CO., INC.

 

FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH &
CO., INC., a corporation duly organized and existing under the laws of the State
of Delaware (“ML & Co.”), hereby unconditionally guarantees to Globalstar, Inc.
(the “Company”), the due and punctual payment of any and all amounts payable by
Merrill Lynch International, a company organized under the laws of England and
Wales  (“ML”), under the terms of the Share Lending Agreement between the
Company, as Lender, ML, as Borrower, and Merrill Lynch, Pierce, Fenner & Smith
Incorporated, as Borrowing Agent, dated as of April 15, 2008 (the “Share Lending
Agreement”), including, in case of default, interest on any amount due, when and
as the same shall become due and payable, whether on the scheduled payment
dates, at maturity, upon declaration of termination or otherwise, according to
the terms thereof.  In case of the failure of ML punctually to make any such
payment, ML  & Co. hereby agrees to make such payment, or cause such payment to
be made, promptly upon demand made by the Company to ML & Co.; provided, however
that delay by the Company in giving such demand shall in no event affect ML &
Co.’s obligations under this Guarantee.  This Guarantee shall remain in full
force and effect or shall be reinstated (as the case may be) if at any time any
payment guaranteed hereunder, in whole or in part, is rescinded or must
otherwise be returned by the Company upon the insolvency, bankruptcy or
reorganization of ML or otherwise, all as though such payment had not been made.

 

ML & Co. hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Share Lending
Agreement; the absence of any action to enforce the same; any waiver or consent
by the Company concerning any provisions thereof; the rendering of any judgment
against ML or any action to enforce the same; or any other circumstances that
might otherwise constitute a legal or equitable discharge of a guarantor or a
defense of a guarantor.  ML & Co. covenants that this guarantee will not be
discharged except by complete payment of the amounts payable under the Share
Lending Agreement.  This Guarantee shall continue to be effective if ML merges
or consolidates with or into another entity, loses its separate legal identity
or ceases to exist.

 

ML & Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of ML; all demands whatsoever, except as noted in the
first paragraph hereof; and any right to require a proceeding first against ML.

 

ML & Co. hereby certifies and warrants that this Guarantee constitutes the valid
obligation of ML & Co.  and complies with all applicable laws.

 

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This Guarantee shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

This Guarantee becomes effective concurrent with the effectiveness of the Share
Lending Agreement, according to its terms.

 

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IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in its
corporate name by its duly authorized representative.

 

 

MERRILL LYNCH & CO., INC.

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

Date:

 

 

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