<PAGE>
EXHIBIT 10.7
================================================================================
CONVERTIBLE NOTE AND STOCK PURCHASE AGREEMENT
By and Among
ORBCOMM Inc.,
ORBCOMM LLC,
PCG Satellite Investments, LLC
and
MH Investors Orbcomm LLC
and, for purposes of Section 13.16 only,
CALPERS/PCG Corporate Partners, LLC
and, for purposes of Section 13.17 only,
MH Private Equity Fund LLC
Dated as of December 30, 2005
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S>
<C>
ARTICLE I
DEFINITIONS....................................................
1
ARTICLE II SALE AND TRANSFER OF NOTES AND
SHARES......................... 10
2.01
Sale and Purchase of
Convertible Notes and Shares............... 10
2.02
Convertible Note
Closing, Initial Share Closing and
Subsequent Closing..............................................
11
ARTICLE III REPRESENTATIONS AND
WARRANTIES............................... 12
3.01
Organization and Good
Standing.................................. 12
3.02
Capitalization; Title
to Shares and Structure................... 13
3.03
Subsidiaries and other
Investments.............................. 15
3.04
Due Authorization;
Enforceability............................... 16
3.05
No
Violation....................................................
16
3.06
Financial
Statements............................................ 16
3.07
Absence of Certain
Changes...................................... 17
3.08
Litigation......................................................
18
3.09
Compliance with Laws;
Permits................................... 18
3.10
Environmental
Matters........................................... 19
3.11
Taxes...........................................................
19
3.12
Employee Benefit and
Labor Matters.............................. 20
3.13
Real Property Owned or
Leased; Title to Assets.................. 21
3.14
Sufficiency and
Condition of Assets............................. 21
3.15
Material
Contracts..............................................
22
3.16
Insurance.......................................................
25
3.17
Intellectual
Property........................................... 25
3.18
Customers.......................................................
26
3.19
Disclosure......................................................
26
3.20
Transactions With
Affiliates.................................... 26
3.21
Brokers or
Finders.............................................. 26
3.22
Registration
Rights............................................. 27
3.23
Employee
Matters................................................
27
3.24
Side
Letters....................................................
27
3.25
FCC/Regulatory
Matters.......................................... 27
3.26
ITAR
Matters....................................................
29
3.27
Minute
Books....................................................
29
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE
INVESTORS............... 30
4.01
Organization and Good
Standing.................................. 30
4.02
Due Authorization;
Enforceability............................... 30
4.03
No
Violation....................................................
30
4.04
Investment
Intent............................................... 31
4.05
Brokers or
Finders.............................................. 31
4.06
Liability to
Co-Investors....................................... 31
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S>
<C>
ARTICLE V COVENANTS OF THE
COMPANY....................................... 32
5.01
Consents and
Approvals.......................................... 32
5.02
Notice of Certain
Events........................................ 32
5.03
Use of
Proceeds.................................................
32
5.04
FCC
Matters.....................................................
32
5.05
Further
Assurances..............................................
32
5.06
Conduct.........................................................
33
5.07
Delivery of Audited
2006 Financial Statements................... 33
5.08
Chief Operating
Officer......................................... 33
5.09
Directors and Officers
Insurance................................ 33
ARTICLE VI COVENANTS OF
INVESTORS........................................ 33
6.01
Cooperation by the
Investors.................................... 33
ARTICLE VII COVENANTS OF THE
PARTIES..................................... 33
7.01
Reasonable
Efforts.............................................. 33
7.02
Further
Assurances..............................................
34
7.03
Representation and
Warranties................................... 34
7.04
Public
Announcements............................................
35
7.05
Confidentiality.................................................
35
7.06
Supplements to
Disclosure Schedule.............................. 36
7.07
Application of Series
A Dividends............................... 36
ARTICLE VIII CONDITIONS TO THE OBLIGATIONS OF
COMPANY.................... 37
8.01
Representation,
Warranties and Covenants........................ 37
8.02
Governmental
Consents........................................... 37
8.03
No
Injunction...................................................
37
8.04
Other
Agreements................................................
37
8.05
No Qualified Public
Offering or Qualified Sale.................. 38
8.06
Change of
Control............................................... 38
ARTICLE IX CONDITIONS TO THE OBLIGATIONS OF INVESTORS WITH RESPECT
TO
THE INITIAL
CLOSING...................................................
38
9.01
Representations,
Warranties and Covenants....................... 38
9.02
Consents........................................................
38
9.03
No
Litigation...................................................
39
9.04
No
Prohibition..................................................
39
9.05
No Material Adverse
Change...................................... 39
9.06
Legal
Opinion...................................................
39
9.07
Management Rights
Letter........................................ 39
9.08
Board
Composition...............................................
39
9.09
Director's
Indemnification Agreement............................ 39
9.10
Amendment of
By-Laws............................................ 40
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S>
<C>
9.11
Effectiveness and
Amendment of Initial Tranche Series B
Preferred Stock Documents.......................................
40
9.12
Stockholder Approval
and Effectiveness of Amendments to
Transaction Documents...........................................
40
9.13
Convertible Noteholder
Approval................................. 40
9.14
Satcom
Acquisition..............................................
40
9.15
Stock Option
Plan............................................... 40
ARTICLE X CONDITIONS TO THE OBLIGATIONS OF THE INVESTORS WITH
RESPECT TO
THE SUBSEQUENT
CLOSING................................................
41
10.01
Representations, Warranties and Covenants.......................
41
10.02
Consents........................................................
41
10.03 No
Litigation...................................................
42
10.04 No
Prohibition..................................................
42
10.05 No
Material Adverse Change......................................
42
10.06 No
Qualified Public Offering or Qualified Sale..................
42
10.07 Legal
Opinion...................................................
42
10.08 Insolvency
Event................................................ 42
10.09 Change of
Control............................................... 42
10.10
Subscribers.....................................................
42
10.11 Net
Revenue.....................................................
42
10.12 2006
Financial Statements.......................................
42
ARTICLE XI INTENTIONALLY
DELETED......................................... 43
ARTICLE XII SURVIVAL AND
INDEMNIFICATION................................. 43
12.01 Survival
and Indemnification....................................
43
12.02
Limitations on Liability........................................
44
ARTICLE XIII MISCELLANEOUS
PROVISIONS.................................... 45
13.01 Fees and
Expenses...............................................
45
13.02
Notices.........................................................
45
13.03
Jurisdiction; Service of Process................................
46
13.04 Governing
Law................................................... 47
13.05
Waiver..........................................................
47
13.06 Entire
Agreement and Modification...............................
47
13.07 Amendment
and Waiver............................................ 47
13.08
Assignments, Successors, and No Third-Party Beneficiaries.......
47
13.09
Severability....................................................
48
13.10 Captions;
Currency.............................................. 48
13.11 Exhibits
and Schedules..........................................
48
13.12 Specific
Performance............................................
48
13.13
Interpretation..................................................
49
13.14 Time of
Essence.................................................
49
13.15
Counterparts....................................................
49
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S>
<C>
13.16 Limited
CALPERS/PCG Guaranty....................................
49
13.17 Limited MH
Guaranty............................................. 50
</TABLE>
iv
<PAGE>
CONVERTIBLE NOTE AND STOCK PURCHASE AGREEMENT
This Agreement is made and entered into as of December 30, 2005,
by
and among ORBCOMM Inc., a Delaware corporation (the "Company"),
ORBCOMM LLC, a
Delaware limited liability company, ("ORBCOMM LLC"), PCG Satellite
Investments,
LLC ("PCG") and MH Investors Orbcomm LLC ("MH") and, solely for
purposes of
Section 13.16 and Section 13.17, respectively, CALPERS/PCG
Corporate Partners,
LLC ("CALPERS/PCG") and MH Private Equity Fund LLC ("MH PEF"). Each
of PCG and
MH is referred to herein individually as an "Investor" and
collectively as the
"Investors".
RECITALS
A. The Company is a satellite-based telecommunications company
that
provides narrowband, two-way monitoring, tracking and messaging
services (the
"Business");
B. The Investors desire to purchase from the Company, and the
Company
desires to sell to the Investors, Convertible Notes which are
convertible into
the Company's Series B Preferred Stock and shares of Series B
Preferred Stock,
subject to the terms and conditions of this Agreement; and
C. In consideration of the mutual representations, warranties,
covenants and agreements, and upon the terms and subject to the
conditions
hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the following terms have the
meanings
specified or referred to in this Article I:
"Action" - any legal, administrative, arbitral, mediation or
other
alternative dispute resolution procedure or other action,
proceeding, claim,
inquiry or investigation before any court, arbitrator or other
Governmental
Entity.
"Affiliate" - with respect to a specified Person: (i) any Person
that
directly, or indirectly through one or more intermediaries,
controls, or is
controlled by, or is under common control with, the Person
specified or any
Affiliate of such Person, including, without limitation, any
partner, officer,
director, executor, trustee, member or employee of such Person and
any venture
capital or private equity fund now or hereafter existing which is
controlled by
or under common control with one or more general partners or shares
the same
management company with such Person. For purposes of this
definition, "control"
of a Person will mean the possession, directly or indirectly, of
the power to
direct or cause the direction of its management or policies,
whether through the
ownership of voting securities, by contract or otherwise.
"Agreement" - this Agreement, as the same may be amended, modified
or
supplemented from time to time in accordance with its terms.
<PAGE>
Convertible Note and Stock Purchase Agreement
"Books and Records" - with respect to a specified person, the books
of
account and other financial and corporate records and files
(including records
and files stored on computer disks or tapes or any other storage
medium) of such
person, including minute books, stock record books, books of
account, corporate
seals, written contracts and other documents, instruments and
papers.
"Business" - shall have the meanings given in the Recitals.
"Business Day" - any day other than a Saturday, Sunday or other day
on
which commercial banks located in New York City are authorized or
required to be
closed.
"Capitalization Table" - means the pro forma capitalization table
of
the Company, after giving effect to (i) the Initial Closing and
(ii) the
Subsequent Closing, set forth in Part 3.02(j) of the Disclosure
Schedule.
"CERCLA" - the Comprehensive Environmental Response, Compensation
and
Liability Act of 1980, as amended.
"Change-of-Control" means (i) sale, transfer or other disposition
of
all or substantially all of the assets and properties of the
Company to, or the
proposed entry into any merger or consolidation agreement with, any
third party,
whether in a single transaction or series of related transactions,
which results
in the holders of the outstanding voting power of the Company
immediately prior
to such transaction or series of transactions owning less than a
majority of the
outstanding voting securities in the continuing or surviving
company or entity
following such transaction or transactions or (ii) a sale, transfer
or exchange
of all of the Company's outstanding capital stock to a third party,
whether in a
single transaction or series of related transactions, for cash or,
in the case
of a stock-for-stock transaction, which results in the holders of
the
outstanding voting power of the Company immediately prior to such
transaction or
series of transactions owning less than a majority of the
outstanding voting
securities for the election of directors in the continuing or
surviving company
or entity following such transaction or transactions.
"Claim" - a written notice, asserting a breach of representation
or
warranty, covenant, agreement or other obligation contained in this
Agreement or
in any Transaction Document.
"Code" - the Internal Revenue Code of 1986, as amended.
"Common Stock" - common shares, par value $0.001 per share, of
the
Company.
"Common Stock Voting Agreement" - means the Second Amended and
Restated Common Stock Voting Agreement entered into among the
holders of the
Common Stock, in the form attached as Exhibit E.
"Communications Licenses" - means the licenses referenced on
Part
3.09(b) of the Disclosure Schedule.
"Communications Regulation" as defined in Section 7.01(b) of
the
Agreement.
2
<PAGE>
Convertible Note and Stock Purchase Agreement
"Company" - as defined in the preamble of this Agreement.
"Company's Intellectual Property" - as defined in Section 3.17(a)
of
the Agreement.
"Company Threshold" - as defined in Section 12.02(c) of this
Agreement.
"Confidential Information" - means information of any kind in
written,
documentary or other tangible form disclosed by one party to this
Agreement to
any other party to this Agreement clearly identified (whether with
a stamp,
legend or other marking or orally) as confidential at the time of
the
disclosure, including, but not limited to, (i) information of a
financial,
business, planning, marketing or technical nature, (ii) models,
tools, hardware
and software, and (iii) any documents, reports, memoranda, notes,
files or
analyses prepared by or on behalf of the receiving party that
contain, summarize
or are based upon any of the foregoing; provided, however, that
"Confidential
Information" shall not include information that: (i) is publicly
available prior
to the date of this Agreement; (ii) becomes publicly available
after the date of
this Agreement through no wrongful act of the receiving party;
(iii) is
furnished to others by the disclosing party without similar
restrictions on
their right to use or disclose; (iv) is rightfully known by the
receiving party
without any confidentiality restrictions at the time of receipt of
such
information from the disclosing party or becomes rightfully known
to the
receiving party without confidentiality restrictions from a source
other than
the disclosing party; or (v) is independently developed by the
receiving party
by persons who did not have access, directly or indirectly, to the
Confidential
Information.
"Confidentiality Agreements" - those certain agreements between
the
Company and an Investor, if any, regarding the provision of
Confidential
Information to each such Investor.
"Consents" - all consents, waivers, approvals, allowances,
authorizations, declarations, filings, recordings, registrations,
validations or
exemptions and notifications.
"Convertible Note Closing" - as defined in Section 2.02(a) of
this
Agreement.
"Convertible Noteholders" means the holders of the Convertible
Notes.
"Convertible Notes" means the 10% Convertible Promissory Notes of
the
Company due February 16, 2010 in the form of Exhibit I hereto
issued to the
purchasers identified on Schedule II hereto in the principal
amounts set forth
on Schedule II hereto.
"Damages" - all losses, Liabilities, claims, damages,
deficiencies,
obligations, fines, payments (including incidental and
consequential damages),
expenses (including costs of investigation and defense and
reasonable attorneys'
fees and expenses), actions, causes of action, assessments,
judgments or amounts
paid in settlement, whether or not involving a third party
claim.
"Disclosure Schedule" - the Disclosure Schedule delivered by
the
Company to the Investors concurrently with the execution and
delivery of this
Agreement, as supplemented or amended as provided herein.
3
<PAGE>
Convertible Note and Stock Purchase Agreement
"Encumbrance" - any charge, claim, "adverse claim" (as defined
in
Section 8-102(a)(1) of the New York Uniform Commercial Code),
community property
interest, condition, equitable interest, easement, encumbrance,
option, lien,
pledge, hypothecation, assignment, deposit arrangement, security
interest
(preference, priority or other security agreement or preferential
arrangement of
any kind), mortgage, deed of trust, retention of title agreement,
right of first
refusal, right of first offer, preemptive right, or other
restriction or
granting or any rights of any kind (including any restriction on,
or right
granted with respect to, the use, voting, transfer, receipt of
income or
exercise of any other attribute of ownership).
"Environmental Laws" - any and all applicable Laws and Permits
issued,
promulgated or entered into by any Governmental Entity relating to
the
environment, the protection or preservation of human health or
safety, including
the health and safety of employees, the preservation or reclamation
of natural
resources, or the management, Release or threatened Release of
Hazardous
Materials.
"ERISA" - the Employee Retirement Income Security Act of 1974,
as
amended.
"Facilities" - any buildings, plants or structures, owned, operated
or
leased by the Company and its Subsidiaries or located on any Real
Property.
"FCC" - means the United States Federal Communications
Commission.
"Financial Statements" - as defined in Section 3.06(a) of this
Agreement.
"Foreign Licenses" - as defined in Section 3.25(c) of this
Agreement.
"GAAP" - generally accepted accounting principles of the United
States
as in effect from time to time.
"Governmental Entity" - any: (i) federal, state, local, foreign
or
international government; (ii) court, arbitral or other tribunal or
governmental
or quasi-governmental authority of any nature (including any
governmental
agency, political subdivisions, instrumentalities, branch,
department, official,
or entity); or (iii) body exercising, or entitled to exercise,
any
administrative, executive, judicial, legislative, police,
regulatory, or taxing
authority or power of any nature pertaining to government.
"Guaranteed MH
Obligations" as defined in Section 13.17 of the
Agreement.
"Guaranteed PCG Obligations" as defined in Section 13.16 of the
Agreement.
"Hazardous Materials" - those hazardous materials, substances
or
wastes that are regulated by, or form the basis of liability under,
any
Environmental Law, including PCBs, pollutants, explosive or
regulated
radioactive materials or substances, hazardous wastes or chemicals,
petroleum
(including crude oil or any fraction thereof) or petroleum
distillates, asbestos
or asbestos containing materials, materials listed in 49 C.F.R.
Section 172.101
and materials defined as hazardous substances pursuant to Section
101(14) of
CERCLA.
"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act
of
1976.
4
<PAGE>
Convertible Note and Stock Purchase Agreement
"Indemnified Party" - as defined in Section 12.01(b) of the
Agreement.
"Initial Closing" - as defined in Section 2.02(a) of this
Agreement.
"Initial Closing Date" - as defined in Section 2.02(a) of this
Agreement.
"Initial Share Closing" as defined in Section 2.02(b) of this
Agreement.
"Initial Tranche Series B Preferred Stock" as defined in
Section
2.01(a) of this Agreement.
"Insolvency Event" means (i) the Company or any Material Subsidiary
of
the Company shall commence a voluntary case or other proceeding
seeking
liquidation, reorganization or other relief with respect to itself
or its debts
under any bankruptcy, insolvency or other similar law now or
hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or
other similar official of it or any substantial part of its
property, or shall
consent to any such relief or to the appointment of or taking
possession by any
such official in an involuntary case or other proceeding commenced
against it,
or shall make a general assignment for the benefit of creditors, or
shall fail
generally to pay its debts as they become due, or shall take any
corporate
action to authorize any of the foregoing; or (ii) an involuntary
case or other
proceeding shall be commenced against the Company or any Material
Subsidiary of
the Company (which shall not have been dismissed) seeking
liquidation,
reorganization or other relief with respect to it or its debts
under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or
seeking the appointment of a trustee, receiver, liquidator,
custodian or other
similar official of it or any substantial part of its property; or
(iii) an
order for relief shall be entered against the Company or any
Material Subsidiary
of the Company under the federal bankruptcy laws as now or
hereafter in effect.
"Insurance Policies" - as defined in Section 3.16 of this
Agreement.
"Intellectual Property" - all United States and foreign (a)
patents,
patent applications, patent disclosures and inventions and
discoveries which may
be patentable and improvements thereto, (b) registered and
unregistered
trademarks, service marks, logos, trade names and corporate names
and
registrations and applications for registration thereof, including
all marks
registered in the United States Patent and Trademark Office, (c)
copyrights in
both published and unpublished works and registrations and
applications for
registration thereof, (d) computer software, data and
documentation, (e) trade
secrets and confidential business information (including ideas,
formulas,
compositions, inventions (whether patentable or unpatentable and
whether or not
reduced to practice), know-how, manufacturing and production
processes and
techniques, research and development information, drawings,
specifications,
designs, plans, proposals, technical data, copyrightable works,
financial,
marketing and business data, pricing and cost information, business
and
marketing plans and customer and supplier lists and information)
(collectively,
"Trade Secrets") and (f) copies and tangible embodiments thereof
(in whatever
form or medium).
"Investors" - as defined in the preamble of this Agreement.
5
<PAGE>
Convertible Note and Stock Purchase Agreement
"IRS" - the United States Internal Revenue Service or any other
successor agency, and, to the extent relevant, the United States
Department of
the Treasury.
"ITAR" means International Traffic in Arms Regulation, 22
C.F.R.
Sections 120-130.
"Latest Audited Balance Sheet" - means the audited consolidated
balance sheet of the Company as of December 31, 2004 as set forth
on Part 3.06
of the Disclosure Schedule (after giving effect to the adjustments
set forth on
Part 3.06(b) of the Disclosure Schedule).
"Latest Balance Sheet" - means the unaudited consolidated
balance
sheet of the Company as of November 30, 2005 as set forth on Part
3.06 of the
Disclosure Schedule. For purposes of the representations and
warranties made on
and as of the Subsequent Closing Date, Latest Balance Sheet shall
mean the
consolidated balance sheet of the Company as of December 31, 2006
audited by an
independent accounting firm of recognized national standing (or, if
the Majority
Holders elect to waive the condition that the Latest Balance Sheet
be audited by
an independent accounting firm of recognized national standing
prior to the
Subsequent Closing, the unaudited balance sheet as of December 31,
2006)
provided in the updated Disclosure Schedule delivered pursuant to
Section 7.06
on the Subsequent Closing Date.
"Laws" - means all laws, principles of common law, statutes,
constitutions, treaties, rules, regulations, ordinances, codes,
rulings, Orders
and determinations of all Governmental Entities.
"Leased Property" - as defined in Section 3.13(a) of this
Agreement.
"Leases" - all leases, subleases, rights to occupy or use and
other
arrangements with respect to Real Property, including, in each
case, all
amendments, modifications and supplements thereto and waivers and
consents
thereunder.
"Liability" - all debts, liabilities and obligations whether known
or
unknown, asserted or unasserted, fixed, absolute or contingent,
matured or
unmatured, accrued or unaccrued, liquidated or unliquidated, due or
to become
due, whenever or however arising (including, whether arising out of
any contract
or tort based on negligence, strict liability or otherwise).
"Majority Holders" - means the Investors (or their assignees)
holding
a majority of shares of Series B Preferred Stock (or Common Stock
or other
securities issued upon conversion or exchange thereof) issued
pursuant to this
Agreement (including shares of Series B Preferred Stock issued upon
conversion
of Convertible Notes purchased hereunder).
"Material Adverse Change" means a material adverse change, or
any
development(s) that would, with the passage of time, reasonably be
expected to
result in a material adverse change (in each case, individually or
in the
aggregate with all such changes or developments), in the condition,
financial or
otherwise, business, assets, results of operations or prospects of
the Company
and its Subsidiaries, taken as a whole. Any determination as to
whether any
change or development is a Material Adverse Change shall only be
made after
taking into account all insurance coverages and indemnifications
(to the extent
the Company has received payment with respect thereto to which the
Company is
entitled and taking into account
6
<PAGE>
Convertible Note and Stock Purchase Agreement
the likelihood and timing of any payments (if any) to be received
under such
insurance coverages and/or indemnifications and the
creditworthiness of the
insurer and/or indemnitor).
"Material Adverse Effect" - When used in connection with the
Company
or its Subsidiaries, any change or effect that, individually or in
the aggregate
with any such other changes or effects, is materially adverse to
the condition,
financial or otherwise, business, assets, results of operations or
prospects of
the Company and its Subsidiaries taken as a whole which,
individually or in the
aggregate, results in a diminution in the value of the Series B
Preferred Stock
issued to the Investors on the Initial Closing Date in excess of
five hundred
thousand dollars ($500,000) (assuming, for this purpose that all
outstanding
shares of Series B Preferred Stock and Series A Preferred Stock
were converted
to Common Stock). Any determination as to whether any change or
effect has a
Material Adverse Effect shall only be made after taking into
account all
insurance coverages and indemnifications (to the extent the Company
has received
payment with respect thereto to which the Company is entitled and
taking into
account the likelihood and timing of any payments (if any) to be
received under
such insurance coverages and/or indemnifications and the
creditworthiness of the
insurer and/or indemnitor).
"Material Contract" - as defined in Section 3.15 of this
Agreement.
"Material Subsidiary" - means ORBCOMM LLC, ORBCOMM License
Corp.,
Stellar Communications Ltd. and any other Subsidiary of the Company
that would
constitute a "significant subsidiary" as defined in Rule 1-02(w) of
Regulation
S-X of the promulgated under the Securities Act (excluding Satcom
and ORBCOMM
Europe).
"Options" - all options to purchase Common Stock.
"ORBCOMM Europe" - ORBCOMM Europe, LLC, a Delaware limited
liability
company, and its Subsidiaries.
"ORBCOMM LLC" - ORBCOMM LLC, a Delaware limited liability
company.
"Order" - any award, decision, stipulation, injunction,
judgment,
order, ruling, subpoena, writ, decree or verdict entered, issued,
made or
rendered by any Governmental Entity.
"Owned Property" - as defined in Section 3.13 of this
Agreement.
"PCG Entities" - means collectively PCG Satellite Investments,
LLC,
CALPERS PCG Corporate Partners, LLC and any Affiliate(s) of either
of the
foregoing.
"Permit" - all licenses, permits, certificates, Consents or
other
authorizations, issued, granted, given or otherwise made available
by or under
the authority of any Governmental Entity or pursuant to any
Law.
"Permitted Encumbrances" - means (i) in respect of real
property,
Encumbrances consisting of zoning or planning restrictions,
easements,
covenants, Permits or other restrictions or limitations on the use
of real
property or irregularities in title thereto which do not materially
detract from
the value of, or impair the use of, such real property as currently
operated,
(ii) Encumbrances for Taxes, assessments or governmental charges or
levies on
property not yet due
7
<PAGE>
Convertible Note and Stock Purchase Agreement
and payable or which are being contested in good faith and for
which appropriate
reserves are maintained, (iii) Encumbrances of landlords,
carriers,
warehousemen, mechanics and other Encumbrances imposed by law and
incurred in
the ordinary course of business, (iv) for personal property,
Encumbrances for
purchase money obligations incurred in the ordinary course of
business
consistent with past practice, (v) Encumbrances set forth on any
section of Part
3.14 of the Disclosure Schedule and (vi) other Encumbrances (other
than
mortgages, deeds of trust, title retention agreements or similar
security
interests) which, individually or in the aggregate, would not
reasonably be
expected to have a Material Adverse Effect.
"Person" - any individual, sole proprietorship, firm,
corporation
(including any non-profit corporation and public benefit
corporation), general
or limited partnership, limited liability partnership, joint
venture, limited
liability company, estate, trust, association, organization, labor
union,
institution, entity or Governmental Entity, including any successor
(by merger
or otherwise) of such entity.
"Preferred Stock Voting Agreement" - means the Second Amended
and
Restated Preferred Stock Voting Agreement to be entered into among
the holders
of the Series A Preferred Stock and the Series B Preferred Stock,
in the form
attached hereto as Exhibit D.
"Purchase Price" - as defined in Section 2.01(b) of this
Agreement.
"Qualified Public Offering" - shall have the meaning set forth in
the
Restated Certificate.
"Qualified Sale" - shall have the meaning set forth in the
Restated
Certificate.
"Real Property" - as defined in Section 3.13 of this Agreement.
"Registration Rights Agreement" - the Second Amended and
Restated
Registrations Rights Agreement to be entered into between the
Company, certain
stockholders of the Company and the Investors in the form attached
hereto as
Exhibit B.
"Release" - defined in Section 101(22) of CERCLA.
"Representative" - with respect to a particular Person, any
director,
officer, employee, agent, consultant, advisor, or other
representative of such
Person, including legal counsel, accountants, and financial
advisors.
"Restated Certificate" - the Third Amended and Restated Certificate
of
Incorporation of the Company in the form attached hereto as Exhibit
A.
"Satcom" - Satcom International Group Plc, an English public
limited
company, and its Subsidiaries.
"Satellite and Ground Earth Station Assets" - as defined in
Section
3.14(a) of the Agreement.
"Securities Act" - the Securities Act of 1933, as amended.
8
<PAGE>
Convertible Note and Stock Purchase Agreement
"Securities Exchange Act" - the Securities Exchange Act of 1934,
as
amended.
"Series A Preferred Stock" - means the Series A Convertible
Redeemable
Preferred Stock, par value $0.001 per share of the Company.
"Series B Preferred Stock" - means the Series B Convertible
Redeemable
Preferred Stock, par value $0.001 per share, of the Company.
"Settlement" - as defined in Section 7.01(c) of the Agreement.
"Stockholders Agreement" - means the Second Amended and
Restated
Stockholders Agreement to be entered into among the Company, the
Investors and
other stockholders of the Company in the form attached hereto on
Exhibit C.
"Shares" - means shares of the Company's Series B Preferred
Stock.
"Subsequent Closing" - as defined in Section 2.02(c).
"Subsequent Closing Date" - as defined in Section 2.02(c).
"Subsequent Closing Termination Date" shall mean (i) March 12, 2007
if
the Company has delivered the 2006 Audited Financial Statements to
Investors on
or prior to February 15, 2007 or if the Majority Holders otherwise
waive the
condition in Section 10.12 prior to March 12, 2007, (ii) the date
that is 15
days after delivery by the Company of the 2006 Audited Financial
Statements to
Investors if such 2006 Audited Financial Statements are delivered
to Investors
after February 15, 2007 and the Majority Holders do not waive the
condition in
Section 10.12 or (iii) any date after March 12, 2007 designated by
the Majority
Holders prior to the date that is contemplated by clause (ii) if
the Majority
Holders waive the condition in Section 10.12 after March 12, 2007;
provided,
however, that the Majority Holders may, in their sole discretion,
designate any
date on or after April 30, 2007 as the Subsequent Closing
Termination Date
irrespective of whether the condition in Section 10.12 is waived
(it being
understood that if the Majority Holders designate a date pursuant
to this
proviso and the Company delivers the 2006 Audited Financial
Statements prior to
such date, the Subsequent Closing Termination Date shall be the
earlier of (a)
the date so designated and (b) 15 days after delivery of the 2006
Audited
Financial Statements).
"Subsidiary" - any corporation, limited liability company,
partnership, association or other business entity of which (i) if a
corporation,
a majority of the total voting power of shares of stock entitled
(without regard
to the occurrence of any contingency) to vote in the election of
directors,
managers or trustees thereof is at the time owned or controlled,
directly or
indirectly, by that Person or one or more of the other Subsidiaries
of that
Person or a combination thereof, or (ii) if a limited liability
company,
partnership, association or other business entity, a majority of
the partnership
or other similar ownership interest thereof is at the time owned or
controlled,
directly or indirectly, by any Person or one or more Subsidiaries
of the Person
or a combination thereof; for purposes hereof, a Person or Persons
shall be
deemed to have a majority ownership interest in a limited liability
company,
partnership, association, or other business entity if such Person
or Persons
shall be allocated a majority of limited liability company,
partnership,
association or other business entity gains or losses or shall be or
control
9
<PAGE>
Convertible Note and Stock Purchase Agreement
any managing member or general partner of such limited liability
company,
partnership, association or other business entity. For purposes of
this
Agreement (other than Section 3.06) Satcom International Group plc
and Orbcomm
Europe LLC shall be deemed to be Subsidiaries of the Company, but
only with
respect to matters, conditions, events or circumstances occurring
or arising
after October 7, 2005.
"Taxes" - all taxes, charges, duties, fees, levies or other
assessments, including, without limitation, income, excise,
property, sales,
use, gross receipts, recording, insurance, value added, profits,
license,
withholding, payroll, employment, net worth, capital gains,
transfer, stamp,
social security, environmental, occupation and franchise taxes,
imposed by any
Governmental Entity, and including any interest, penalties and
additions
attributable thereto.
"Third Party Licenses" as defined in Section 3.25(a) of this
Agreement.
"Threshold" - as defined in Section 12.02(b) of this Agreement.
"to the knowledge" - means the actual knowledge of the
executive
officers of a Person after reasonable inquiry.
"Transaction" or "Transactions" - means the transactions
contemplated
by this Agreement and the Transaction Documents, including, without
limitation,
the transactions contemplated by Section 2.01(a), (b) and (c).
"Transaction Documents" - means this Agreement, the Restated
Certificate, the Stockholders Agreement, Registration Rights
Agreement, the
Preferred Stock Voting Agreement, the Common Stock Voting
Agreement, the
Convertible Notes and any certificate, schedule, agreement or other
document
required to be delivered pursuant to this Agreement.
"Warrant" - means the warrants of the Company issued to the
purchasers
in connection with the issuance of the Convertible Notes.
ARTICLE II
SALE AND TRANSFER OF NOTES AND SHARES
2.01 Sale and Purchase of Convertible Notes and Shares.
(a) On the basis of the representations, warranties, covenants
and
agreements and subject to the satisfaction or waiver of the
conditions
set
forth in Articles VIII and IX of this Agreement, at the
Convertible
Note
Closing, the Company will sell to the Investors, and the
Investors
will
purchase from the Company, the Convertible Notes and Warrants in
the
form
set forth as Exhibit I and Exhibit I-A hereto in the principal
amounts
set
forth opposite such Investors name on Schedule I hereto. The
principal
amount of the Notes purchased shall be paid at the Convertible Note
Closing
in
cash. The Convertible Notes purchased on the Initial Closing Date
by the
Investors shall automatically convert into 136,476 shares of
Initial
Tranche Series B Preferred Stock immediately following the
Convertible Note
Closing pursuant to the terms of Section 6(c) of each Convertible
Note. The
Series B Preferred Stock issued pursuant to the automatic
conversion of the
Convertible
10
<PAGE>
Convertible Note and Stock Purchase Agreement
Notes as described in this Section 2.01(a) shall be the "Initial
Tranche
Series B Preferred Stock."
(b) On the basis of the representations, warranties, covenants
and
agreements and subject to the satisfaction or waiver of the
conditions
set
forth in Articles VIII and IX of this Agreement, at the Initial
Share
Closing, the Company will sell to the Investors, and the Investors
will
purchase from the Company, the number of Shares set forth opposite
such
Investor's name on Schedule I hereto under the heading "Initial
Closing" at
a
price of $4.03 per Share (the "Purchase Price"). The Purchase Price
shall
be
paid at the Initial Closing in cash.
(c) On the basis of the representations, warranties, covenants
and
agreements and subject to the satisfaction or waiver of the
conditions
set
forth in Articles VIII and X of this Agreement and subject to the
last
sentence of Section 2.02(c), unless otherwise agreed to by the
Company and
the
Majority Holders, at the Subsequent Closing, the Company will sell
to
the
Investors, and the Investors will purchase from the Company, the
number
of
Shares set forth opposite such Investor's name on Schedule I under
the
heading "Subsequent Closing" at the Purchase Price.
(d) The obligations of Investors to purchase Shares and
Convertible Notes allocated to them on Schedule I hereto are
several and
not
joint.
2.02 Convertible Note
Closing, Initial Share Closing and
Subsequent Closing.
(a) Convertible Note Closing. The closing of the transactions
contemplated by Section 2.01(a) of this Agreement and the
Transaction
Documents (the "Convertible Note Closing") will take place at the
offices
of
Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York City, at
10:00
a.m.
Eastern time, on December 30, 2005 subject to the satisfaction
or
waiver of all the conditions set forth in Articles VIII and IX
hereof or
such
other date, place or time agreed to by the Company and the
Majority
Holders (such date of the Convertible Note Closing being
hereinafter
referred to as the "Initial Closing Date"). The Company shall
deliver to
each
Investor a Convertible Note, a certificate representing Warrants
and a
certificate representing such shares as the Convertible Notes
purchased by
such
Investor convert in to, against payment of the purchase price
therefor
by
wire transfer of immediately available funds to such bank and
account
specified by the Company, cancellation of indebtedness (including
by way of
crediting the Transaction Expenses described in Section 13.01
against
payment of the purchase price), or any combination thereof.
(b) Initial Share Closing. The closing of the transactions
contemplated by Section 2.01(b) of this Agreement and the
Transaction
Documents (the "Initial Share Closing" and together with the
Convertible
Note
Closing, the "Initial Closing") will take place on the Initial
Closing
Date
immediately following the Convertible Note Closing. The Company
shall
deliver to each Investor a certificate representing the Shares
purchased by
such Investor against
payment of the purchase price therefor by wire
transfer of immediately available funds to such bank and account
specified
by
the Company, cancellation of indebtedness, or any combination
thereof.
11
<PAGE>
Convertible Note and Stock Purchase Agreement
(c) Subsequent Closing. Subject in all respects to the last
sentence of this paragraph, the subsequent closing (the
"Subsequent
Closing") of the transactions contemplated by this Agreement and
the
Transaction Documents will take place at the offices of Chadbourne
& Parke
LLP,
30 Rockefeller Plaza, New York City, at 10:00 a.m. Eastern time,
on
March 1, 2007 (or on a date designated by the Majority Holders
(upon no
less
than two (2) business days written notice to the Company) that is
on
or
prior to the Subsequent Closing Termination Date if the Audited
2006
Financial Statements have not been delivered to Investors prior to
February
15, 2007), subject to
the satisfaction or waiver of all conditions set
forth in Articles VIII and X hereof, or such other date, place or
time
agreed to by the Company and the Majority Holders (such date of the
Closing
being hereinafter referred to as the "Subsequent Closing Date").
The
Company shall deliver to each Investor a certificate representing
the
Shares such Investor is purchasing at the Subsequent Closing,
against
payment of the purchase price therefor by wire transfer of
immediately
available funds to such bank and account specified by the
Company,
cancellation of indebtedness, or any combination thereof.
Notwithstanding
any
of the foregoing, the obligation of the Investors to purchase
Shares
and
the Company's obligation to sell Shares under Section 2.01(c)
hereof
shall terminate in full (i) upon consummation of a Qualified Sale
or
Qualified Public Offering or (ii) on the Subsequent Closing
Termination
Date
(unless the Company and the Majority Holders agree otherwise) if
the
Subsequent Closing has not occurred on or by such date (provided
that the
Company's obligation to sell such Shares shall not terminate if
the
Subsequent Closing has not occurred as a result of a breach by the
Company
of
its obligations under this Agreement and an Investor's obligation
to
purchase such Shares shall not terminate if the Subsequent Closing
has not
occurred as a result of a breach by such Investor of its
obligations under
this
Agreement).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Company and ORBCOMM LLC hereby jointly and severally
represent and warrant to each of the Investors on each of the date
hereof,
the
Initial Closing Date and if the Subsequent Closing occurs, the
Subsequent Closing Date as follows:
3.01 Organization and Good Standing. The Company is a
corporation, duly incorporated, validly existing and in good
standing under
the
laws of its jurisdiction of incorporation, and has full power
and
authority to conduct its business in the manner in which it is
presently
being conducted, except where the failure to be so organized,
existing and
in
good standing or to have such power or authority would not have
a
Material Adverse Effect. The Company is duly qualified or licensed
to do
business and in good standing in each jurisdiction in which the
property
owned, leased or operated by it or the nature of the business
conducted by
it
makes such qualification or licensing necessary except in such
jurisdictions where the failure to be so qualified, licensed and in
good
standing, individually or in the aggregate, would not, individually
or in
the
aggregate, be reasonably expected to have a Material Adverse
Effect.
ORBCOMM LLC is a limited liability company, duly formed, validly
existing
and
in good standing under the laws of its jurisdiction of formation,
and
has
full power and authority to conduct its business in the manner in
which
it
is presently being conducted, except where the failure to be so
organized, existing and in good standing or to have such power or
authority
12
<PAGE>
Convertible Note and Stock Purchase Agreement
would not, individually or in the aggregate, be reasonably expected
to have a
Material Adverse Effect. ORBCOMM LLC is duly qualified or licensed
to do
business and in good standing in each jurisdiction in which the
property owned,
leased or operated by it or the nature of the business conducted by
it makes
such qualification or licensing necessary except in such
jurisdictions where the
failure to be so qualified, licensed and in good standing,
individually or in
the aggregate, would not, individually or in the aggregate, be
reasonably
expected to have a Material Adverse Effect. Part 3.01 of the
Disclosure Schedule
lists each jurisdiction in which the Company or ORBCOMM LLC is
qualified to do
business. True and complete copies of the Certificate of
Incorporation and
Bylaws, as amended to date, of the Company and the Certificate of
Formation and
Limited Liability Company Operating Agreement, as amended to date,
of ORBCOMM
LLC have previously been delivered or made available to the
Investors.
3.02 Capitalization; Title to Shares and Structure.
(a) As of the execution of this Agreement, the authorized
capital
stock of the Company consists of seventy five million (75,000,000)
shares
of
Common Stock and fifteen million (15,000,000) shares of Series
A
Preferred Stock. Immediately prior to the Initial Closing, eight
million
five
hundred thirty five thousand twenty six (8,535,026) shares of
Common
Stock and fourteen million fifty three thousand six hundred
eleven
(14,053,611) shares of Series A Preferred Stock were issued and
outstanding
all
of which were validly issued, fully paid and non-assessable.
Immediately prior to the Convertible Notes Closing, Convertible
Notes with
a
principal balance of twenty four million four hundred sixty nine
thousand
dollars ($24,469,000) were outstanding, which are convertible into
six
million seventy one thousand six hundred twenty two (6,071,687)
shares
(after eliminating fractional shares) of Initial Tranche Series B
Preferred
Stock. Schedule II hereto sets forth a true and accurate list of
all of the
Convertible Noteholders and the principal balance of the
Convertible Notes
held
by each Convertible Noteholder as of the date of this Agreement
and
prior to the Convertible Note Closing.
(b) Effective as of the Convertible Note Closing and prior to
the
Initial Share Closing, the authorized capital stock of the Company
shall
consist of 75,000,000 shares of Common Stock, 15,000,000 shares of
Series A
Preferred Stock and 13,000,000 shares of Initial Tranche Series B
Preferred
Stock. Effective as of the Convertible Note Closing and prior to
the
Initial Share Closing 8,535,026 shares of Common Stock, 14,053,611
shares
of
Series A Preferred Stock and 6,208,163 shares of Initial Tranche
Series
B
Preferred Stock shall be issued and outstanding, and no Convertible
Notes
or
Warrants shall be outstanding except for the subscription of Marble
Arch
Group Ltd. to purchase $250,000 of Convertible Notes, which shall
be
automatically converted into 62,034 shares of Series B Preferred
Stock upon
payment of the subscription.
(c) Effective as of the Initial Share Closing, the authorized
capital stock of the Company shall consist of 105,000,000 shares of
Common
Stock, 15,000,000 shares of Series A Preferred Stock and 30,000,000
shares
of
Series B Preferred Stock. Effective as of the Initial Share Closing
(i)
8,535,026 shares of Common Stock, 14,053,611 shares of Series A
Preferred
Stock and 17,629,999 shares of Series B Preferred Stock shall be
issued and
outstanding and an additional 62,034 shares of Series B Preferred
Stock
shall be reserved for issuance to Marble Arch Group Ltd. upon the
payment
of
the subscription price therefor, (ii)
13
<PAGE>
Convertible Note and Stock Purchase Agreement
10,297,767 shares of Series B Preferred Stock will be reserved for
issuance
to
the Investors upon the Subsequent Closing; (iii) 45,000,000 shares
of
Common Stock will be reserved for issuance upon conversion of the
Series A
Preferred Stock and the Series B Preferred Stock; (iv) 7,351,905
shares of
Common Stock will be reserved for issuance under the Company's
Stock Option
Plan, (v) 478,393 shares of Series A Preferred Stock shall be
reserved for
issuance upon the exercise of warrants to purchase Series A
Preferred Stock
and
2,876,993 shares of Common Stock shall be reserved for issuance
upon
exercise of warrants to purchase Common Stock.
(d) The authorized capital of ORBCOMM LLC consists of 8,486,901
common membership interest units all of which are owned by the
Company.
(e) Part 3.02(e) of the Disclosure Schedule contains a true and
complete list of the holders of the securities of the Company as of
the
date
of this Agreement, indicating each holder's name, the type and
amount
of
securities held, the exercise or conversion price, if any, and
the
redemption or repurchase price, if other than the nominal
amount.
(f) Except for (i) issuances of Shares pursuant to this
Agreement
and
(ii) as otherwise disclosed on Part 3.02(e) of the Disclosure
Schedule,
there are no outstanding options, warrants, rights (including
conversion or
preemptive rights and rights of first refusal), or agreements of
any kind
for
the purchase or acquisition from the Company of any of its
securities.
The
Company is not a party or subject to any agreement or
understanding,
and,
except as set forth in the Transaction Documents or as
otherwise
disclosed on Part 3.02(f) of the Disclosure Schedule, to the best
of the
Company's knowledge, there is no agreement or understanding between
any
persons that affects or relates to the voting or giving of written
consents
with
respect to any security or the voting by a director of the
Company.
The
Company is not subject to any obligation (i) to repurchase, redeem
or
otherwise acquire any shares of capital stock or securities
convertible
into
capital stock of the Company, or (ii) to vote or to dispose of
any
shares of capital stock of the Company or other equity securities
except
for
the sale of Shares pursuant to this Agreement or as set forth in
the
Transaction Documents.
(g) There are no options, warrants, convertible notes,
convertible securities or other rights to acquire interests of
ORBCOMM LLC
outstanding.
(h) All issued and outstanding shares of Common Stock, Series A
Preferred Stock,
Series B Preferred Stock and Convertible Notes of the
Company have been as of the date of this Agreement or will be as of
the
Initial Share Closing and the Subsequent Closing, duly authorized
and
validly issued, fully paid and nonassessable, and issued in
accordance with
the
registration or qualification provisions of the Securities Act and
any
relevant state securities laws or pursuant to valid exemptions
therefrom.
The
Shares being purchased by the Investors hereunder, and the
Shares
issuable to the Investors pursuant to the conversion of the
Convertible
Notes purchased by the Investors hereunder, when issued or sold,
and
delivered in accordance with the terms of this Agreement for
the
consideration expressed herein, will be duly authorized, validly
issued,
fully paid and nonassessable (assuming payment of the purchase
price
thereof), and will be free of restrictions on transfer
14
<PAGE>
Convertible Note and Stock Purchase Agreement
other than restrictions on transfer expressly stated in the
Transaction
Documents and under applicable state and federal securities laws.
The
Common Stock issuable upon conversion of the Shares will be as of
the
Initial Closing and the Subsequent Closing duly and validly
reserved for
issuance and, upon issuance in accordance with the terms of the
Restated
Certificate and upon payment therefor as provided in this
Agreement, will
be
duly authorized, validly issued, fully paid and nonassessable and
will
be
free of restrictions on transfer other than restrictions on
transfer
expressly stated in the Transaction Documents and under applicable
state
and
federal securities laws.
(i) Assuming each Investor's representations set forth in
Section
4.04
of this Agreement is true and correct, the offer, sale and issuance
of
the
Convertible Notes and Shares as contemplated by this Agreement
are
exempt from the
registration requirements of the Securities Act and the
qualification requirements of all applicable state securities laws,
and
neither the Company nor any authorized agent acting on its behalf
will take
any
action hereafter that would cause the loss of any such
exemption.
(j) The capitalization of the Company, (i) after giving effect
to
the
Initial Closing and (ii) after giving effect to the Subsequent
Closing,
is
set forth in the capitalization table set forth in Part 3.02(j) of
the
Disclosure Schedule (the "Capitalization Table"). Except as set
forth in
the
Capitalization Table, Part 3.02(e) of the Disclosure Schedule or in
the
Transaction Documents, there are no outstanding securities of the
Company
or
rights to acquire securities of the Company, including without
limitation any options, warrants, rights (including conversion
or
preemptive rights and rights of first refusal), or agreements of
any kind
for
the purchase or acquisition from the Company of any of its
securities.
(k) The Convertible Notes purchased on the Initial Closing Date
by
the Investors shall automatically convert into 136,476 shares of
Initial
Tranche Series B Preferred Stock immediately upon purchase pursuant
to
Section 6(c) of each Convertible Note. The other Convertible Notes
issued
by
the Company prior to the Initial Closing Date shall
automatically
convert into 6,071,687 shares of Initial Tranche Series B Stock
pursuant to
Section 6(c) of each Convertible Note on the Initial Closing Date.
The
Warrants shall automatically be terminated and cancelled upon
the
Convertible Note Closing pursuant to Section 10(b) thereof. The
exercise
price of each Series A Preferred Stock Warrant and each Common
Stock
Warrant as set forth in the column marked "Strike Price" on Part
3.02(e) of
the
Disclosure Schedule is the currently effective exercise price for
such
security and has not been amended, modified, adjusted (including
any
adjustment pursuant to anti-dilution provisions) or otherwise
changed.
3.03 Subsidiaries and other Investments. Part 3.03 of the
Disclosure Schedule contains a true and complete list of each
Subsidiary of the
Company and sets forth for each: (i) its name and jurisdiction of
incorporation
or organization; (ii) its authorized capital stock or share
capital; (iii) the
number of issued and outstanding shares of capital stock or share
capital; and
(iv) the holder or holders of record of such shares. All of the
issued and
outstanding membership interests of ORBCOMM LLC are owned of record
and
beneficially by the Company, free and clear of all Encumbrances.
Except as set
forth on Part 3.03 of the Disclosure Schedule, all of the issued
and outstanding
shares of capital stock of each Subsidiary of ORBCOMM LLC are owned
of record
and beneficially by ORBCOMM LLC, free and clear of
15
<PAGE>
Convertible Note and Stock Purchase Agreement
all Encumbrances. Except as set forth on Part 3.03 of the
Disclosure Schedule,
all of such shares are duly authorized, validly issued, fully paid
and
non-assessable and were not issued in violation of, and are not
subject to, any
preemptive rights. Except as disclosed in Part 3.03 of the
Disclosure Schedule,
neither the Company nor any Subsidiary of the Company owns
beneficially or
otherwise, directly or indirectly, any capital stock or other
securities or
other ownership interest of any Person. Neither the Company nor any
Subsidiary
of the Company has any obligation to provide any funds to or invest
additional
capital in any Person in which the Company or any Subsidiary of the
Company
holds capital stock.
3.04 Due Authorization; Enforceability. The Company has all
requisite power and authority (corporate or otherwise) to execute,
deliver and
perform this Agreement and each of the Transaction Documents to
which it is a
party and to consummate the Transactions. The execution, delivery
and
performance of this Agreement and the Transaction Documents and the
consummation
of the Transactions by the Company have been duly authorized by all
necessary or
appropriate action (corporate or otherwise) and no other
proceedings (corporate
or otherwise) are necessary to authorize this Agreement or the
Transaction
Documents or to consummate the Transaction. This Agreement and
those Transaction
Documents executed or delivered on or prior to the date of this
Agreement
constitute, and prior to the Initial Closing the remaining
Transaction Documents
required to be executed after the date of this Agreement will
constitute when
executed, the valid and legally binding obligations of the Company
(to the
extent each is a party) (assuming that this Agreement and the
Transaction
Documents constitute the valid and binding obligations of the
Investors)
enforceable against the Company, in accordance with their terms,
except as
enforceability may be limited by applicable (i) bankruptcy,
insolvency,
reorganization, moratorium and similar laws of general
applicability relating to
or affecting creditors' rights and (ii) Laws relating to the
availability of
specific performance, injunctive relief or other equitable
remedies.
3.05 No Violation. Except for filings, Consents and Permits as
are set forth in Part 3.05 of the Disclosure Schedule or that have
been obtained
prior to the Initial Closing, neither the execution, delivery or
performance of
this Agreement by the Company, nor the consummation by the Company
of the
Transactions, will, with or without the giving of notice or lapse
of time or
both: (a) violate, conflict with or result in any breach of any
provision of the
Certificate of Incorporation or By-laws or similar organizational
documents of
the Company or any of its Subsidiaries; (b) require any Permit of
any
Governmental Entity or violate, conflict with or constitute a
default under any
of the terms or requirements of any Permit that is held by the
Company or any of
its Subsidiaries; or (c) result in a violation or breach of, or
constitute a
default (or give rise to any rights of termination, amendment,
cancellation or
acceleration) under, any of the terms, conditions or provisions of
any contract
or instrument to which the Company or any of its Subsidiaries is a
party or any
of their respective assets is subject; (d) violate, conflict with
or result in
any breach of any Law applicable to (i) the Company or any of its
Subsidiaries;
or (e) create any Encumbrance on any assets of the Company or any
of its
Subsidiaries, except, in the case of clauses (b), (c), (d) and (e)
above, as
would not have a Material Adverse Effect.
3.06 Financial Statements.
(a) The Company will have delivered to the Investors prior to
the
date
of this Agreement true and correct copies of (i) an audited
consolidated balance sheet of
16
<PAGE>
Convertible Note and Stock Purchase Agreement
ORBCOMM LLC and its Subsidiaries as of December 31, in each of the
years
2002
and 2003, together with consolidated statements of income, and
changes
in
shareholders' equity, and cash flow for the years then ended,
including,
in
each case, the notes thereto and the reports of independent
certified
public accountants, (ii) an audited consolidated balance sheet of
the
Company and its Subsidiaries as of December 31, 2004, together
with
consolidated statements of income, and changes in shareholders'
equity and
cash
flow for the year then ended, including, in each case, the
notes
thereto and the reports of independent certified public accountants
and
(iii) an unaudited consolidated balance sheet of the Company and
its
Subsidiaries as of March 31, June 30, September 30 and November 30,
2005
(other than, in the case of November 30, 2005, Satcom), together
with
consolidated statements of income and changes in shareholders'
equity and
cash
flow, including notes thereto, if any for each such quarterly
period
(collectively, the "Financial Statements").
(b) The Financial Statements were prepared from and in
accordance
with
the Books and Records of the Company and its Subsidiaries
and/or
ORBCOMM LLC and its Subsidiaries, as the case may be, in accordance
with
GAAP
consistently applied (except as indicated in the notes thereto)
and
fairly present the financial condition, results of operations,
changes in
shareholder's equity and cash flow of the Company and its
Subsidiaries
and/or ORBCOMM LLC and its Subsidiaries, as the case may be, in
all
material respects as of and for the periods indicated or as of
the
respective dates set forth therein, subject, in the case of
interim
financial statements, to normal and recurring year-end adjustments
and, if
applicable, the absence of notes thereto and, except in the case of
all of
the
year ended audited Financial Statements, for the adjustments set
forth
in
Part 3.06(b) of the Disclosure Schedule (together with the
corresponding
adjustments to the notes thereto) and, in the case of the interim
financial
statements, for such adjustments as may be necessary to apply
adjustments
of a
substantially similar nature as are set forth in Part 3.06(b) of
the
Disclosure Schedule with respect to the year end audited
Financial
Statements to such interim financial statements and for the absence
of
consolidating Satcom International Group plc as of November 30,
2005. For
purposes of delivery
of this representation on the Subsequent Closing Date,
"Financial Statements" shall be deemed to refer to (i) the
audited
consolidated balance sheet of the Company and its Subsidiaries as
of
December 31, 2006 and as of December 31, 2005, together with
audited
consolidated statements of income, and changes in shareholders'
equity and
cash
flow for the years then ended, including, in each case, the
notes
thereto and the reports of independent certified public accountants
and
(ii)
the unaudited consolidated balance sheet of the Company and its
Subsidiaries dated as of March 31, June 30, September 30, and
December 31,
2006
together with consolidated statements of income and changes in
shareholders' equity and cash flow, including notes thereto, if any
for
each
such quarterly period.
(c) As of the date of this Agreement and the Subsequent Closing
Date, as applicable, the Company and its Subsidiaries do not have
any
Liabilities of a nature required by GAAP to be reflected on a
balance sheet
or
described in the footnotes thereto that were not adequately
reflected or
reserved for in the Latest Balance Sheet, except (i) as set forth
in the
Disclosure Schedule, (ii) for current liabilities incurred in the
ordinary
course of business consistent with past practice since the date of
the
Latest Balance Sheet or (iii) which, individually or in the
aggregate,
would not reasonably be expected to have a Material Adverse
Effect.
17
<PAGE>
Convertible Note and Stock Purchase Agreement
(d) The Company has delivered to the Investors true and correct
copies of the statutory financial statements of Satcom for the year
ended
December 31, 2004 filed with the applicable Governmental Entity in
the
United Kingdom in the ordinary course of business.
(e) On November 30, 2005, there were 111,362 billable
subscriber
communicators provisioned on the ORBCOMM system.
3.07 Absence of Certain Changes. Except as set forth in Part
3.07
of the Disclosure Schedule or as expressly permitted by this
Agreement or the
Transaction Documents, since the date of the Latest Balance Sheet,
the Company
and its Subsidiaries have been operated only in the ordinary course
of business
and the Company and its Subsidiaries have not suffered any Material
Adverse
Effect, and no condition or event, change or development has
occurred which,
individually or in the aggregate, would reasonably be expected to
have a
Material Adverse Effect. As of the date of this Agreement and the
Subsequent
Closing Date, as applicable, except (i) as set forth in the
Disclosure Schedule,
(ii) as reflected or reserved against on the Latest Balance Sheet
or (iii) for
current liabilities incurred in the ordinary course of business
consistent with
past practice since the date of the Latest Balance Sheet, the
Company has no
Liabilities that individually or in the aggregate, would reasonably
be expected
to have a Material Adverse Effect.
3.08 Litigation. None of the Company or any of its Subsidiaries
are subject to any Order that prevents any of them from entering
into this
Agreement or consummating the Transactions, or that materially
restricts the
right or ability of the Company or any of its Subsidiaries to carry
on their
business as now conducted or proposed to be conducted. Except as
set forth in
Part 3.08 of the Disclosure Schedule, none of the Company or any of
its
Subsidiaries, or any officer or director of any such entities is a
party to or
engaged in any Action, nor is there any Action, suit, proceeding,
or
investigation pending or, to the knowledge of the Company or any of
its
Subsidiaries, threatened against the Company or any of its
Subsidiaries, or any
officer or director of any such entities, which (i) questions the
validity of
this Agreement or any of the Transaction Documents, (ii) questions
the right of
the Company or any officer or director of any such entities to
enter into such
agreements, (iii) questions or restricts the ability of the
Company, any
Subsidiary, or any officer or director of any such entities to
consummate the
Transactions, or (iv) would reasonably be expected to result,
either
individually or in the aggregate, in a Material Adverse Effect or
in any
material impairment of the right or ability of the Company or any
of its
Subsidiaries, taken as a whole, to carry on their business as now
conducted or
proposed to be conducted. Except as set forth in Part 3.08 of the
Disclosure
Schedule, none of the Company, any Subsidiary of the Company, or
any officer or
director of any such entities is a party to, named in or subject
to, and none of
their assets are bound by, any order, writ, injunction, judgment,
or decree of
any court, government, agency, or instrumentality. Except as set
forth in Part
3.08 of the Disclosure Schedule, there is no action, suit,
proceeding or
investigation initiated by the Company or any Subsidiary of the
Company or any
officer or director of any such entities currently pending or that
the Company
or any of its Subsidiaries currently intends to initiate.
3.09 Compliance with Laws; Permits.
18
<PAGE>
Convertible Note and Stock Purchase Agreement
(a) Except as set forth in Part 3.09(a) of the Disclosure
Schedule, each of the Company and its Subsidiaries is, and has
been, in
compliance in all material respects with all Laws and Orders
applicable to
them
or to the conduct or operation of the Business or the ownership or
use
of
any of their respective assets, except for such violations or
non-compliance as would not individually or in the aggregate,
reasonably be
expected to have a
Material Adverse Effect. Except as set forth on Part
3.09(a) of the Disclosure Schedule, no investigation or review by
any
Governmental Entity with respect to the Company or any of its
Subsidiaries
is
pending or, to the knowledge of the Company or any of its
Subsidiaries,
threatened, nor has any Governmental Entity indicated an intention
to
conduct any such investigation or review.
(b) The Company and each of its Subsidiaries has or will have
as
of
the Initial Closing and the Subsequent Closing, as applicable,
all
Permits which are required in order to conduct the Business as
presently
conducted and as it will be conducted immediately following the
closing and
to
own and operate their respective properties and assets, except for
such
Permits which if not obtained or held, would not, individually or
in the
aggregate, reasonably be expected to have a Material Adverse
Effect. Part
3.09(b) of the Disclosure Schedule contains a complete and accurate
list of
material Permits held by the Company and its Subsidiaries. The
Company and
each
of its Subsidiaries is in compliance with each such Permit,
except
where the failure to comply would not, individually or in the
aggregate,
reasonably be expected to have a Material Adverse Effect.
(c) The Company is not required to register any class of its
securities under or pursuant to the Securities
