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,
excep
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