Exhibit 10.3
CONVERSION
AGREEMENT
This Conversion Agreement (“
Agreement ”) is entered into as of June 19, 2009
between THERMO FUNDING COMPANY LLC , a Colorado limited
liability company (“ Thermo ”), and
GLOBALSTAR, INC. , a Delaware corporation (the “
Company ”).
WHEREAS , the Company and Thermo have determined that it
is in their mutual best interests for Thermo to convert all of the
debt of the Company owed to Thermo under the Second Amended and
Restated Credit Agreement dated as of December 17, 2007, as
amended (the “ Thermo Debt ”) into Series A
Convertible Preferred Stock (“ Preferred Stock
”).
WHEREAS , upon the recommendation of the Thermo
Transactions Special Committee, the Board of Directors has approved
conversion of the Thermo Debt, on the terms set forth in this
Agreement.
NOW, THEREFORE
, in consideration of the premises
and of the mutual covenants and agreements hereinafter set forth
and for other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledged, the parties do
hereby agree as follows:
1.
Sale of Stock in Exchange for
Reduction of Debt . Subject to the terms
and conditions of this Agreement, Thermo agrees to exchange the
Thermo Debt (the “ Transaction ”) for one share of
Series A Convertible Preferred Stock (the “
Share ”) convertible into
common equity as provided in the Certificate of Designation to be
filed with the Secretary of State of Delaware.
2.
Consideration . As consideration for
the Transaction and the agreements set forth herein, the following
shall occur at the Closing (as defined below):
(a)
Thermo shall
credit to the Company by reduction in outstanding principal and
interest under the Thermo revolving and term credit facility, the
sum of $180,176,520.30 in U.S. Dollars (the “
Exchange Price ”); and
(b)
The Company shall
deliver to Thermo a stock certificate for the Share.
3.
Closing . The closing of the
Transaction (the “ Closing ”) contemplated by
this Agreement shall take place at 9:00 a.m. Eastern Daylight
Time on June 19, 2009 at the offices of the Company in
Milpitas, California, or such other date, time and place as the
parties may agree.
4.
Maximum Shares; Stockholder
Approval. Thermo acknowledges
that its conversion rights for the Preferred Stock limits the
amount of voting stock it may hold. Upon written notice to
the Company, the Company will use its reasonable efforts to obtain
Board of Director and stockholder approval to issue a nonvoting
class of common stock with the same rights as the existing class of
common
stock on the date hereof,
except with regard to voting rights that would have an adverse
effect on the Company. The Company also undertakes to use its
reasonable efforts to obtain stockholder approval of the
Transaction as required by Nasdaq Listing Rules.
5.
Representations and Warranties of
the Company . The Company
represents and warrants to Thermo, with respect to the Transaction
as of the Closing Date, as follows:
(a)
Organization
and Authority . The Company has all
requisite power and authority to enter into this Agreement and to
consummate the Transaction. The Company is duly organized and
validly existing under the laws of the State of Delaware. The
execution and delivery by the Company of this Agreement and the
consummation by the Company of the Transaction has been duly
authorized. This Agreement, when duly executed and delivered
by the Company will constitute a legal, valid, and binding
obligation of the Company, enforceable against it 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 Company, (ii) violate any law,
rule, regulation, provision of any judicial or administrative
order, award, judgment or decree applicable to the Company or the
Share, 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 Company is bound or
to which the Company or the Share are subject.
(c)
Title.
Upon delivery of
the certificate or certificates representing the Share, Thermo will
obtain good, valid and transferable title to the Share free and
clear of all liens, claims and encumbrances whatsoever.
(d)
Share.
The
Company is issuing the Share pursuant 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 compensatio
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