Exhibit 10.5


 


LOAN AGREEMENT


 


Loan
Agreement dated as of 25 June 2009, between Globalstar, Inc., a
Delaware corporation (the “Borrower”),
and Thermo Funding Company LLC, a Colorado limited liability company (the “Lender”).


 


Recitals:


 


1.                                       The Borrower is
party to the COFACE Facility Agreement dated 5 June 2009 (the “COFACE
Agreement”), between, among others, the Borrower, BNP Paribas
as the Security Agent and the COFACE Agent (“Paribas”) and the
lenders thereunder, pursuant to which the Borrower will borrow up to
$586,342,000.


 


2.                                       It is a
condition precedent to any borrowings under the COFACE Agreement that the
Borrower establish an account with Paribas under the Accounts Agreement (as
defined in the COFACE Agreement) entitled the Debt Service Reserve Account (the
“DSRA”) with an initial 
balance of $46,773,000 million in cash and guarantee obligations.


 


3.                                       Thales Alenia
Space France (“Thales”) has entered into a
Guarantee dated as of 5 June 2009 (the “Guarantee”), pursuant to
which, under certain circumstances, Thales will pay up to $12.5 million to the
Borrower for deposit in the DSRA.


 


4.                                       To induce
Thales to enter into the Guarantee, the Lender has entered into a Reimbursement
Agreement dated 5 June 2009 (the “Reimbursement Agreement”), with
Thales.


 


5.                                       The Lender has
entered into a Cash Contribution Agreement with Arianespace   dated on or about the date hereof and with
Hughes Network Systems LLC (“Hughes”) dated 17 June 2009
(together the “Contribution Agreements”), pursuant to
which the Lender may borrow up to $10 million from each of Arianespace and
Hughes.


 


6.                                       The Lender has
agreed to lend an additional $5 million to Borrower to complete the funding of
the DSRA.


 


The Borrower and the Lender
hereby agree as follows:


 


1.                                       Loans.


 


a.                                                                                       On the date
hereof, (i) the Lender is borrowing, in aggregate, $20,000,000 from
Arianespace and Hughes pursuant to the Contribution Agreements and (ii) the
Borrower is borrowing an additional $5 million directly from Lender.


 


b.                                                                                      On the date
hereof, the Lender has directed Arianespace and Hughes to advance such funds
directly to the Borrower for deposit in the DSRA and the Lender has deposited
$5 million in the DSRA.  Such funds shall
be deemed to be a loan by the Lender to the Borrower.


 


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c.                                                                                       If at any time
Thales makes any payment to the Borrower pursuant to the Guarantee, the amount
of such payment shall be deemed to be an additional loan from the Lender to the
Borrower.


 


d.                                                                                      Any loans made
or deemed to be made by the Lender to the Borrower pursuant to 1(b) or
1(c), together with all accrued and unpaid interest capitalized pursuant to
2(b), are referred to in this Agreement as the “Loans.”


 


e.                                                                                       The Loans shall
not be evidenced by a note.


 


2.                                       Interest.


 


a.                                                                                       Interest on the
outstanding principal amount of the Loans shall accrue at the rate of 12% per
annum, payable monthly in arrears on the last day of each month.


 


b.                                                                                      Interest
accruing on the Loans as provided in 2(a) shall not be payable in cash but
shall be capitalized and added to the outstanding principal amount of the
Loans.


 


3.                                       Payments.


 


a.                                                                                       The Borrower
shall make cash payments to the Lender with respect to the Loans when and as
permitted by Clauses 5.2(b)(i) or 9.3(b) of the Accounts Agreement or
Clause 7.3(a) or 7.4(a) of the COFACE Agreement.


 


b.                                                                                      The Loans shall
become immediately due and payable in full upon:


 


(i)                                     any Borrower
Change in Control (as defined in the COFACE Agreement) or


 


(ii)                                  any
acceleration of the maturity of the loans under the COFACE Agreement,


 


provided that the Lender
will not take any action to recover any sum due in accordance with this clause
3b. unless permitted by and in accordance with the Subordination Deed.


 


c.                                                                                       Unless
previously paid, the Loans shall be due and payable six months after all
obligations under the COFACE Agreement have been paid in full.


 


4.                                       Subordination. All obligations of the Borrower to the Lender
under this Agreement are subordinated to the Borrower’s obligations under the
COFACE Agreement and are subject to the provisions of the Subordination Deed
between the Borrower, the Lender, BNP Paribas, as COFACE Agent, and BNP
Paribas, as Security Agent, dated 22 June 2009, a copy of which is
attached hereto as Exhibit A. 
The Subordination Deed is for the benefit of and enforceable by the
lenders under the COFACE Agreement provided
that the Lender may not require the Borrower to do anything under
this Agreement which is inconsistent with the 


 


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obligations of the parties to the Subordination Deed or seek any
remedies for the failure of the Borrower to do anything under this Agreement
that is inconsistent with the Borrower’s obligations under the Subordination
Deed or the other Finance Documents (as such term is defined in the COFACE
Agreement).


 


5.                                       Warrant. As additional consideration for the Lender
entering into this Agreement and making the Loans, on the date hereof the
Borrower is issuing to the Lender a warrant (the “Warrant”) in the form
attached hereto as Exhibit B.


 


6.                                       Representations and Warranties of the Borrower.  The Borrower represents and warrants to the
Lender, with respect to the transactions contemplated hereby (collectively, the
“Transaction”) as of the date hereof, as follows:


 


a.                                       Organization
and Authority. The Borrower has all requisite power and authority
to enter into this Agreement and to consummate the Transaction. The Borrower is
duly incorporated and validly existing under the laws of the State of
Delaware.  The execution and delivery by
the Borrower of this Agreement and the Warrant and the consummation by the
Borrower of the Transaction have been duly authorized. This Agreement and the
Warrant, when duly executed and delivered by the Borrower, will constitute a
legal, valid, and binding obligations of the Borrower, enforceable against it
in accordance with their respective terms, except as the enforcement hereof may
be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium, or similar laws affecting the enforcement of creditors’ rights
generally and general equitable principles whether in a proceeding in equity or
at law.


 


b.                                                                                      Noncontravention. The execution
and delivery of this Agreement and the Warrant, the consummation of the
Transaction and the fulfillment of and compliance with the terms and conditions
hereof and thereof do not and will not with the passing of time or giving of
notice (i) result in a violation of the organizational documents of the
Borrower, (ii) violate any law, rule, regulation, provision of any
judicial or administrative order, award, judgment or decree applicable to the
Borrower, or (iii) conflict with, result in a breach of or right to cancel
or constitute a default under any agreement, or instrument to which the Company
is a party, by which the Borrower is bound or to which the Borrower is subject.


 


c.                                                                                       Title.  Upon exercise of the Warrant in accordance
with its terms, the Lender will obtain good, valid and transferable title to
the shares subject to the Warrant (the “Warrant Shares”) free and clear of all
liens, claims and encumbrances whatsoever, and all of the Warrant Shares when
issued will be validly authorized, duly issued and outstanding, fully paid and
non-assessable.


 


d.                                                                                      Shares.  The Borrower is issuing the Warrant and any
Warrant Shares pursuant to an exemption from registration under Section 4(2) of
the Securities Act of 1933 (the “Securities Act”).


 


e.                                                                                       Broker.  No officer, director, employee or third party
shall be entitled to receive any brokerage commissions or similar compensation
in connection with the Transaction contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Borrower.


 


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f.                                                                                         Acknowledgement.  The Borrower acknowledges that the Lender has
not made any representations or warranties to it except to the extent of the
representations and warranties of the Lender in this Agreement.


 


7.                                       Representations and Warranties of the Lender.  The Lender hereby represents and warrants to the Borrower as
follows:


 


a.                                                                                       Organization and Authority.  The Lender has all requisite power and
authority to enter this Agreement and to consummate the Transactions
contemplated hereby.  The Lender is duly
organized or formed and validly existing as a limited liability company and in
good standing  under the laws of the
State of Colorado. The execution and delivery by the Lender of this Agreement
and the consummation by the Lender of the Transaction have been duly
authorized. This Agreement, when duly executed and delivered by the Lender will
constitute a legal, valid and binding obligation of the Lender in accordance
with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and general equitable
principles whether in a proceeding in equity or at law.


 


b.                                                                                      Noncontravention. The execution
and delivery of this Agreement, the consummation of the Transaction and the
fulfillment of and compliance with the terms and conditions hereof do not and
will not with the passing of time or giving of notice (i) result in a
violation of the organizational documents of the Lender, (ii) violate any
law, rule, regulation, provision of any judicial or administrative order,
award, judgment or decree applicable to the Lender or (iii) conflict with,
result in a breach of or right to cancel or constitute a default under any
agreement or instrument to which the Lender is a party, by which the Lender is
bound or to which the Lender is subject.


 


c.                                                                                       Securities  Act. 
The Lender is acquiring the Warrant and any Warrant Shares for its own
account for investment only and not with any view towards the public sale or
distribution thereof, except pursuant to sales registered or exempted under the
Securities Act.


 


d.                                                                                      Lender’s
Qualifications. The Lender is an “accredited investor” as such
term is defined in Regulation D under the Securities Act of 1933 (the “Securities
Act”).


 


e.                                                                                       Transfer
or Resale.  The Lender
understands that the Warrant and any Warrant Shares have not been and are not
being registered under the Securities Act or any state securities laws and may
not be offered for sale, sold, assigned or transferred without registration
under the Securities Act or an exemption therefrom, and that the for exemption
of the Transaction is Section 4(2) of the Securities Act. The Lender
understands that a legend restricting transfer except in compliance with the
Securities  Act will be reflected on the
certificates or records representing the Warrant and any Warrant Shares.


 


f.                                                                                         Broker.  No officer, director, employee or third party
shall be entitled to receive any brokerage commissions or similar compensation
in connection with the Transaction contemplated by this Agreement based on any
arrangement or agreement made by or on behalf of the Lender.


 


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g.                                                                                      Acknowledgements.  The Lender acknowledges that the Borrower has
not made any representations or warranties to it except to the extent of the
representations and warranties of the Borrower in this Agreement.


 


8.                                       Reporting.  Each party
is responsible for making and shall make its own required reports with the
Securities and Exchange Commission and NASDAQ regarding the Transaction.


 


9.                                       Survival. The representations
and warranties of the Lender and the Borrower contained in Sections 6 and 7 and
the covenant in Section 8 shall survive this Agreement.


 


10.                                 Successors
and Assigns.  Neither
party may assign this Agreement or its rights or obligations hereunder without
the prior written consent of the other party. Subject to the preceding, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.


 


11.                                 Severability.  If any
provision of this Agreement is prohibited by law or otherwise determined to be
invalid or unenforceable by a court of competent jurisdiction, the provision
that would otherwise be prohibited, invalid or unenforceable shall be deemed
amended to apply to the broadest extent that it would be valid and enforceable,
and the invalidity or unenforceability of such provision shall not affect the
validity of the remaining provisions of this Agreement so long as this
Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter hereof and the
prohibited nature, invalidity or unenforceability of the provision(s) in
question does not substantially impair the respective expectations or
reciprocal obligations of the parties or the practical realization of the
benefits that would otherwise be conferred upon the parties. The parties will
endeavor in good faith negotiations to replace the prohibited, invalid or
unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable
provision(s).


 


12.                                 Entire
Agreement; Amendment.  This
Agreement supersedes all other prior oral or written agreements between the
Lender, the Borrower, and their respective affiliates and persons acting on
their behalf with respect to the matters discussed herein, and, except as
specifically set forth herein, neither the Lender nor the Borrower makes any
representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this Agreement
may be amended, waived, terminated or otherwise modified other than by an
instrument in writing signed by the Lender and the Borrower. Any amendment to
this Agreement made in conformity with the provisions of this Section 12
shall be binding on all parties.  No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is subject.


 


13.                                 Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and the respective
successors, legal representatives and assigns of each.


 


14.                                 Counterparts.   This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which together
shall be deemed one and the same instrument.


 


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15.                                 Applicable
Law.  This Agreement shall be
governed by the laws of the State of Delaware, without regard to the choice of
law rules thereof.


 


Signatures are on the
following pages.


 


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IN WITNESS WHEREOF, this Agreement has been
duly executed by each of the parties hereto as of the date first above written.


 


 


	
   

  	
  THERMO
  FUNDING COMPANY LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  James Monroe III

  
	
   

  	
  Printed
  Name: James Monroe III

  
	
   

  	
  Title:
  Manager

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GLOBALSTAR,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Fuad Ahmad

  
	
   

  	
  Printed
  Name: Fuad Ahmad

  
	
   

  	
  Title: Senior Vice President and CFO

  



 


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