Exhibit 10.5

 

July 3, 2013

 

SHARE LENDING TERMINATION AGREEMENT

 

WHEREAS, Globalstar, Inc., as Lender, and Merrill Lynch International, as
Borrower, through Merrill Lynch, Pierce, Fenner & Smith Incorporated, as
Borrowing Agent, are parties to the Share Lending Agreement, dated as of April
10, 2008 (the “Original Share Lending Agreement”), containing terms and
conditions under which Borrower borrowed from Lender shares of its Common Stock
(as defined therein), as amended by Amendment No. 1 to the Share Lending
Agreement, dated as of December 18, 2008 (the Original Share Lending Agreement,
as so amended, the “Share Lending Agreement”);

 

WHEREAS, on June 13, 2013, Borrower notified Lender of Borrower’s termination of
Loans with respect to 6,186,325 Loaned Shares (the “Previously Terminated
Shares”); and

 

WHEREAS, in connection with any Cash Settlement of Loans, the parties are
required to agree on a methodology to determine the applicable Stock Price
pursuant to Section 4(f)(iii) of the Share Lending Agreement,

 

NOW THEREFORE, Lender and Borrower hereby agree as follows, on the terms, and
subject to the conditions, set forth herein:

 

1.           Definitions; Conflicts.

 

(a)          Terms used but not defined herein shall have the meanings given
thereto in the Share Lending Agreement.

 

(b)          To the extent of any conflict between this Share Lending
Termination Agreement (this “Termination Agreement”) and the Share Lending
Agreement, this Termination Agreement shall govern.

 

2.           Termination of Loans. Borrower hereby notifies Lender, pursuant to
Section 4(a) of the Share Lending Agreement, that Borrower is terminating Loans
with respect to 11,115,840 Loaned Shares (together with the Previously
Terminated Shares, the “Terminated Shares”) and designates the date hereof as
the Optional Termination Date therefor.

 

3.           Cash Settlement.

 

(a)          Lender hereby elects Cash Settlement with respect to 7,117,340 of
the Terminated Shares (the “Cash Settled Shares”), and Borrower hereby consents
to such election, in each case, pursuant to Section 4(f) of the Share Lending
Agreement.

 

 

 

 

(b)          For purposes of determining the Cash Settlement Amount with respect
to the Cash Settled Shares, the “Stock Price” shall be equal to the arithmetic
average of the Volume Weighted Average Prices of the Common Stock over the
period of 20 Trading Days beginning on, and including, July 9, 2013 (the
“Averaging Period”), subject to clause (c) below.

 

“Volume Weighted Average Price” has the meaning given in the Indenture, subject
to clause (c) below; provided that if such price is not reported by Bloomberg on
any scheduled Trading Day, the Volume Weighted Average Price for such scheduled
Trading Day shall be determined by agreement of Borrower and Lender, each acting
in good faith.

 

“Trading Day” means any day on which the OTCQB Marketplace is open for trading
during its regular trading session, and on which no Market Disruption Event
occurs, subject to clause (c) below.

 

“Market Disruption Event” has the meaning given in Section 6.3 of the 2002 ISDA
Equity Derivatives Definitions published by the International Swaps and
Derivatives Association (the “Equity Definitions”); provided that:

 

(1)         clause (a) of such Section is hereby amended by deleting the words
“during the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case
may be,” in sub-clause (ii) thereof;

 

(2)         clause (d) of such Section is hereby amended by deleting the
remainder of the provision following the term “Scheduled Closing Time” in the
fourth line thereof;

 

(3)         references in the Equity Definitions (A) to “Shares” shall be deemed
to refer to shares of Common Stock, (B) to the “Calculation Agent” shall be
deemed to refer to Borrower, acting in a commercially reasonable manner and in
good faith and (C) to the “Exchange” shall be deemed to refer to the OTCQB
Marketplace; and

 

(4)         no exchanges or quotation systems will be deemed to be “Related
Exchanges” (within the meaning given in the Equity Definitions).

 

(c)          Notwithstanding anything to the contrary herein, upon the
occurrence of a Market Disruption Event, Borrower may, in good faith and in a
commercially reasonable manner, determine that any scheduled Trading Day is a
Trading Day in part, in which case (i) the end of the Averaging Period may be
postponed, (ii) the Stock Price may be determined based on an appropriately
weighted average of Volume Weighted Average Prices over the Averaging Period
rather than an arithmetic average and (iii) the Volume Weighted Average Price
for such scheduled Trading Day may be determined, each as agreed to by Borrower
and Lender in good faith and taking into account the nature and duration of the
Market Disruption Event.

 

 

 

 

(d)          Borrower hereby designates the third Business Day following the end
of the Averaging Period to be the Cash Settlement Date with respect to the Cash
Settled Shares.

 

(e)          Lender shall provide to Borrower any information and take any other
action reasonably requested by Borrower to facilitate payment of the Cash
Settlement Amount with respect to the Cash Settled Shares.

 

4.           Physical Settlement. Notwithstanding anything to the contrary in
the Share Lending Agreement, in respect of the terminated Loans relating to a
number of Terminated Shares (the “Physically Settled Shares”) equal to the total
number of Terminated Shares less the number of Cash Settled Shares, Borrower
shall deliver such Physically Settled Shares to Lender on, or as soon as
reasonably practicable following, the date hereof. Lender shall provide to
Borrower any information and take any other action reasonably requested by
Borrower to facilitate such delivery. It shall be a condition precedent to the
payment of the Cash Settlement Amount that Lender shall have accepted delivery
of the Physically Settled Shares in accordance with this Section. The parties
agree that no Return Fee shall be payable with respect to the Physically Settled
Shares.

 

5.           Representations and Warranties. Each of Borrower and Lender
remakes, as of the date hereof, the representations and warranties set forth in
Section 7(a) of the Share Lending Agreement; provided that, for this purpose,
(1) references in such Section to “this Agreement” shall be deemed to refer to
this Termination Agreement and (2) the words “, to enter into the Loans
contemplated hereby” in clause (i) thereof shall be deemed to have been deleted.

 

6.           Termination of Share Lending Agreement; Release. Following the
payments and deliveries contemplated by this Termination Agreement and the
performance by each party of any other obligations hereunder, the Share Lending
Agreement shall terminate in full, and neither party shall have any further
obligations thereunder. Except with respect to the payments and deliveries
contemplated by this Termination Agreement and the performance of any other
obligations hereunder, each party hereby releases, acquits and discharges the
other party and its affiliates, officers, directors and employees from any and
all manner of losses, costs, damages, liabilities, deficiencies, actions, suits,
debts, controversies, judgments, demands, claims or causes of action that such
party has or may have, whether known or unknown, against such other party or any
affiliate, officer, director or employee thereof arising out of or in any way in
connection with the Share Lending Agreement or any transaction relating thereto,
notwithstanding anything in the Share Lending Agreement to the contrary.

 

 

 

 

7.           Governing Law. This Termination Agreement, and any claim,
controversy or dispute arising hereunder or relating hereto, shall be governed
by the laws of the State of New York, without regard to any choice of law
provisions that would require the application of the laws of a jurisdiction
other than New York.

 

8.           Counterparts. This Termination Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, with the same
effect as if all of the signatures thereto and hereto were upon the same
instrument.

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Termination Agreement to
be executed as of the date first above written.

 

GLOBALSTAR, INC.
as Lender   MERRILL LYNCH INTERNATIONAL
as Borrower       By: /s/ L. Barbee Ponder IV   By: /s/ Rajeev Patel   Name: L.
Barbee Ponder IV     Name: Rajeev Patel   Title: General Counsel & Vice
President Regulatory Affairs     Title: Managing Director

 

  MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Borrowing Agent       By: /s/ Richard B. Jessop     Name: Richard B. Jessop  
  Title: Managing Director