EXHIBIT 10.1

 

EQUITY COMMITMENT, RESTRUCTURING SUPPORT AND CONSENT AGREEMENT

 

This Equity Commitment, Restructuring Support and Consent Agreement (together
with the Annexes attached hereto, this “Agreement”), dated as of May 20, 2013
and effective as of the Effective Date (as defined below), is entered into by
and among (i) Globalstar, Inc. (“Globalstar” or the “Borrower”), (ii) the
undersigned domestic subsidiaries of Globalstar (each, a “Subsidiary Guarantor,”
and, together with Globalstar and its other subsidiaries and affiliates, the
“Company”), (iii) BNP Paribas, acting in its capacities as facility agent,
security agent and Chef de File (in such capacities, the “Agent”) under that
certain COFACE Facility Agreement, dated as of June 5, 2009 (as amended,
restated, supplemented and/or otherwise modified from time to time through the
date hereof, the “Facility Agreement”) among Globalstar, as borrower, BNP
Paribas, Société Générale, Natixis, Crédit Agricole Corporate and Investment
Bank, and Crédit Industriel et Commercial, as mandated lead arrangers, the
Agent, and certain banks and financial institutions party thereto, as lenders
(the “Lenders”), (iv) the Lenders, and (v) Thermo Funding Company LLC
(“Thermo”). Globalstar, the Subsidiary Guarantors, the Agent, the Lenders and
Thermo are referred to herein collectively as the “Parties,” and each
individually as a “Party.” All Parties other than the Company are referred to
herein collectively as the “Restructuring Support Parties.”

 

RECITALS

 

WHEREAS, pursuant to the Facility Agreement, the Lenders made the Loans and
certain other financial accommodations in favor of the Borrower;

 

WHEREAS, pursuant to the Guarantee Agreements, each of the Subsidiary Guarantors
guaranteed to the Security Agent for the benefit of the Finance Parties all of
the Obligations;

 

WHEREAS, pursuant to the Security Documents, the Borrower and each of the
Subsidiary Guarantors have pledged substantially all of their assets and
property to the Security Agent as security for repayment of the Obligations;

 

WHEREAS, the Borrower has issued those certain 5.75% Convertible Senior Notes
due 2028 (the “5.75% Notes”) pursuant to that certain Indenture (the “Original
Indenture”), dated as of April 15, 2008 between the Borrower, as issuer, and
U.S. Bank National Association, as trustee (in such capacity, the “Trustee”), as
supplemented by that certain First Supplemental Indenture (the “First
Supplemental Indenture,” and together with the Original Indenture, the
“Indenture”), dated as of April 15, 2008 between the Borrower, as issuer, and
the Trustee;

 

WHEREAS, certain Defaults and Events of Default under the Facility Agreement
have occurred and are continuing;

 

WHEREAS, the Borrower has stated that it will be unable to make the principal
payment required under the Facility Agreement to be made by it on the First
Repayment Date;

 

WHEREAS, the Borrower is obligated to purchase from the holders of the 5.75%
Notes (the “Noteholders”) substantially all of the 5.75% Notes in accordance
with Section 8.02 of the Indenture;

 

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WHEREAS, the Borrower has requested that the Lenders consent and agree to (i) an
Exchange Transaction (the “Exchange Transaction”) pursuant to which the Borrower
will restructure the 5.75% Notes (the “5.75% Notes Restructuring”) on the terms
set forth in the term sheet attached hereto as Annex I (the “5.75% Notes Term
Sheet”) and such other terms not inconsistent therewith as may be mutually
agreed by all parties to the final definitive documentation regarding the 5.75%
Notes Restructuring and (ii) a restructuring of the Obligations (a “COFACE
Facility Restructuring”) consistent with the initial restructuring terms set
forth on Annex II (the “Initial COFACE Restructuring Terms”) and such other
terms not inconsistent therewith as may be mutually agreed by the Borrower, the
Agent and the Lenders, and subject to approval by COFACE;

 

WHEREAS, the Lenders are willing to consent to the Exchange Transaction and use
commercially reasonable efforts to implement a COFACE Facility Restructuring, in
each case, on the terms and subject to the conditions set forth herein, and
subject in all cases to internal credit approval and COFACE approval and
definitive documentation, in all cases acceptable to the Lenders and COFACE in
all respects; and

 

WHEREAS, in connection with the Exchange Transaction and a COFACE Facility
Restructuring, the Company requires additional equity capital.

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants,
representations, warranties and agreements contained herein, the Parties,
intending to be legally bound, hereby agree as follows:

 

1.          Definitions. Capitalized terms used but not otherwise defined in
this Agreement shall have the meanings ascribed to such terms in the Facility
Agreement.

  

2.          Equity Commitments. Subject to the terms and conditions contained in
this Agreement, Thermo hereby agrees to make, or cause to be made, available (in
each case, in addition to the cash equity financing made available to the
Borrower under the Purchase Agreement (defined below)), and shall fund to the
Borrower, the cash equity financing (including for this purpose, convertible
subordinated debt, subordinated debt with warrants and similar equity-like
financial instruments which, in all cases, shall be subject to definitive
documentation, including, without limitation, subordination provisions,
acceptable to the Majority Lenders and COFACE) set forth in clauses (a), (b),
(c), (d), and (e) of this Section 2 (each, an “Equity Commitment” and together,
the “Equity Commitments”), in each case on the terms set forth in this Section
2:

 

(a)On the Effective Date and thereafter on the third Business Day of each week
until the earliest of (x) the closing of the COFACE Facility Restructuring, (y)
July 31, 2013 and (z) such other date on which this Agreement is terminated in
accordance with Section 6 hereof, an amount in cash equal to the excess, if any
(as determined in good faith by FTI Consulting, Inc.), as of the last Business
Day of the immediately preceding week, of (i) $4,000,000 over (ii) Globalstar’s
consolidated unrestricted cash balance (the “Initial Minimum Cash Commitment”),
which amount shall be in addition to the Effective Date Commitment (as defined
below), provided, that the Initial Minimum Cash Commitment shall not exceed
$20,000,000;

 

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(b)On or prior to the Effective Date, an aggregate amount of cash (which amount
shall be in addition to the Initial Minimum Cash Commitment) equal to
$25,000,000 (the “Effective Date Commitment”), which the Borrower hereby
acknowledges and agrees shall be the sole source of funding the Cash Payment (as
defined in the 5.75% Notes Term Sheet), and, to the extent the Effective Date
Commitment exceeds that amount, the balance of which shall be retained by the
Borrower for working capital and general corporate purposes;

 

(c)Contemporaneously with the closing of, and as a condition precedent to, the
consummation and effectiveness of a COFACE Facility Restructuring, an aggregate
amount of cash (which amount shall be in addition to the Effective Date
Commitment) equal to $20,000,000 less the aggregate amount of cash actually
received by the Borrower in connection with the Initial Minimum Cash Commitment
(the “2013 Closing Commitment”);

 

(d)Subject to the prior consummation and effectiveness of a COFACE Facility
Restructuring, and as a condition precedent (among others) to the execution and
delivery of the subordinated subsidiary guarantees described in Section 7 of the
5.75% Notes Term Sheet, on or prior to December 26, 2013, an aggregate amount of
cash (which amount shall be in addition to the Initial Minimum Cash Commitment,
the Effective Date Commitment, and the 2013 Closing Commitment) equal to
$20,000,000 (the “2013 Year-End Commitment”); and

 

(e)Subject to the prior consummation and effectiveness of a COFACE Facility
Restructuring, on or prior to December 31, 2014, an aggregate amount of cash
(which amount shall be in addition to the Effective Date Commitment, the Initial
Minimum Cash Commitment, the 2013 Closing Commitment, and the 2013 Year-End
Commitment) equal to $20,000,000 less the excess, if any, of (i) the amount of
cash actually received by the Borrower in connection with the Initial Minimum
Cash Commitment, the 2013 Closing Commitment, and the 2013 Year-End Commitment
over (ii) $40,000,000 (the “2014 Anticipated Equity Financing”).

 

For the avoidance of doubt, the amount of Thermo’s payments with respect to the
2013 Closing Commitment, 2013 Year-End Commitment, and the 2014 Anticipated
Equity Financing shall be reduced by the proceeds received by the Company from
any financing received by the Company pursuant to third party Equity
Commitments. Thermo hereby further agrees that, in connection with the execution
of any definitive documentation for a COFACE Facility Restructuring, it shall
execute and deliver all agreements, instruments, certificates, filings and other
documents necessary, or otherwise reasonably requested by the Borrower or the
Agent, to effect the Equity Commitments in accordance with the terms set forth
in this Section 2. Thermo hereby acknowledges and agrees that its obligation to
fund the Equity Commitments to the Borrower shall be irrevocable and subject
only to the conditions expressly set forth herein, provided that Thermo’s
obligation to provide the Effective Date Commitment is conditioned upon the
satisfaction or waiver in writing of all of the conditions set forth in Section
5 hereof and the closing of the Exchange Transaction as set forth herein.

 

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3.          Consent to Exchange Transaction. Subject to the terms and conditions
hereof, including, among other things, the Borrower’s acknowledgment and
agreement that the Cash Payment shall be made only from the proceeds of the
Effective Date Commitment, the Agent and the Lenders consent to the Exchange
Transaction, as set forth in the 5.75% Notes Term Sheet, subject to definitive
documentation to be delivered to and approved in writing by the Agent and the
Majority Lenders (such approval to be evidenced by the execution and delivery of
a signature page to this Agreement by the Agent and the Majority Lenders), which
documentation, in each case, shall (x) be identified in Annex III hereof (such
documentation, the “Disclosed Documents”) and (y)(i) be in all material respects
consistent with the 5.75% Notes Term Sheet or (ii) contain terms that are not
materially less favorable to the Borrower and each of the Subsidiary Guarantors
than those terms set forth in the 5.75% Notes Term Sheet, as determined by the
Majority Lenders in their commercially reasonable discretion (such determination
also to be evidenced by their execution of this Agreement), provided, that the
Agent and Lenders consent to the execution and delivery of the subordinated
subsidiary guarantees described in Section 7 of the 5.75% Notes Term Sheet, only
upon satisfaction of each of the following conditions: (i) the subordinated
subsidiary guarantees are executed on or after December 26, 2013, (ii) the
COFACE Facility Restructuring has been consummated, (iii) at the time such
guarantees are executed and delivered, Thermo is not in breach of any of its
obligations under Section 2 hereof, (iv) the Borrower shall have received the
cash equity financing attributable to the 2013 Closing Commitment and the 2013
Year-End Commitment, and (v) at the time such guarantees are executed and
delivered there has not occurred an Event of Default under Section 23.1 of the
Facility Agreement that is continuing. If any Subsidiary becomes a Subsidiary
Guarantor (as defined in the Facility Agreement) or a guarantor of any other
series of notes issued under the Original Indenture and any supplemental
indenture relating thereto, such Subsidiary may execute a joinder to the
subordinated subsidiary guaranty, subject to the other conditions in this
Section 3.

 

4.          COFACE Facility Restructuring. Without limiting the generality of
the foregoing, each of the Parties (including the Agent, but only upon the valid
direction of the Lenders and COFACE) shall (severally and not jointly) use
commercially reasonable efforts to take any and all necessary and appropriate
actions in furtherance of the consummation of a COFACE Facility Restructuring.
Such actions may include, among other things and as applicable: (i) consenting
to a COFACE Facility Restructuring, (ii) negotiating and executing any
definitive documentation for a COFACE Facility Restructuring, which shall
include the terms described on Annex II hereof (which documentation shall,
without limitation, include any additional documentation required by the
Majority Lenders and reasonably acceptable to the Borrower and Thermo to
evidence the commitment (which commitment shall be subject to the conditions
contained in Section 2 hereof but shall otherwise be unconditional) by Thermo
(or other third parties reasonably acceptable to the Majority Lenders) to pay to
the Borrower the 2013 Year-End Commitment and the 2014 Anticipated Equity
Financing by no later than December 26, 2013 and December 31, 2014,
respectively), and such other terms not inconsistent therewith as may be
mutually agreed by the Borrower, Thermo, the Agent and the Majority Lenders, and
(iii) obtaining any and all required regulatory and/or third party approvals
for, and making any necessary filings in connection with, a COFACE Facility
Restructuring (which approvals and filings may relate to, among other things,
any know-your-client or other similar regulatory requirements). Except as
expressly set forth in this Agreement, prior to the execution of definitive
documentation, nothing in this Agreement shall be construed as a waiver,
amendment or modification of the Facility Agreement or any of the other Finance
Documents, all of which are hereby reaffirmed and ratified in all respects, or a
waiver of any Default or Event of Default or any rights or remedies in
connection therewith under the Financing Documents or applicable law, all of
which are fully reserved.

 

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5.          Conditions Precedent; Effective Date. This Agreement shall become
effective on the date on which each of the conditions set forth in this Section
5 shall have been satisfied or waived in writing by the Party entitled to waive
such condition (such date, the “Effective Date”).

 

(a)Mutual Conditions to the Occurrence of the Effective Date. The effectiveness
of this Agreement is subject to the satisfaction (or waiver in writing by the
Agent and the Majority Lenders) of each of the following conditions:

 

i.Each Party shall have duly executed this Agreement;

 

ii.There shall exist no stay, injunction or other order issued by any
governmental authority, regulatory authority or court of competent jurisdiction
which prohibits the consummation of the transactions contemplated by this
Agreement;

 

iii.The Effective Date Commitment shall have been received by the Company in
cash;

 

iv.Cash used to fund the Cash Payment under the Exchange Transaction shall not
exceed the proceeds of the Effective Date Commitment received by the Borrower;

 

v.COFACE shall have delivered to the Agent, and not withdrawn, all of its
approvals required under, and in connection with the effectiveness of, this
Agreement; and

 

vi.The Company shall have paid to the Lenders all of the fees, costs and
expenses set forth in Section 9 hereof.

 

(b)Conditions of the Restructuring Support Parties to the Occurrence of the
Effective Date. The effectiveness of this Agreement is subject to the
satisfaction (or waiver in writing by the Agent and the Majority Lenders) of
each of the following further conditions:

 

i.Each of the representations and warranties of Globalstar and the Subsidiary
Guarantors contained in Section 10(c) hereof which (x) are not subject to a
materiality qualification shall be true and correct in all material respects and
(y) are subject to a materiality qualification shall be true and correct in all
respects;

 

ii.Each of the representations and warranties by Thermo contained in Sections
10(a) and 10(b) hereof which (x) are not subject to a materiality qualification
shall be true and correct in all material respects and (y) are subject to a
materiality qualification shall be true and correct in all respects; and

 

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iii.All of the agreements and covenants of Globalstar, the Subsidiary Guarantors
and Thermo to be performed prior to the Effective Date shall have been duly
performed in all material respects.

 

(c)Conditions of Globalstar, Thermo and the Subsidiary Guarantors to the
Occurrence of the Effective Date. The effectiveness of this Agreement against
Globalstar, Thermo and the Subsidiary Guarantors is subject to (unless waived in
writing by Globalstar and Thermo) each of the representations and warranties of
the Restructuring Support Parties (other than Thermo and the Subsidiary
Guarantors) contained in Section 10(a) hereof which (x) are not subject to a
materiality qualification being true and correct in all material respects and
(y) are subject to a materiality qualification being true and correct in all
respects.

 

(d)Frustration of Conditions to Effectiveness. No Party may rely on the failure
of any condition set forth in this Section 5 to be satisfied if such failure was
caused by such Party’s failure to act in good faith or such Party’s failure to
use its commercially reasonable efforts to cause all conditions to the
effectiveness of this Agreement to be satisfied.

 

6.          Termination. This Agreement may be terminated at any time, including
after the Effective Date, only as follows:

 

(a)by the written consent of all of the Parties;

 

(b)by the Lenders (so long as neither the Agent nor the Lenders are in breach of
any representation, warranty, covenant or other agreement contained herein at
the time of such termination as to have caused any of the conditions set forth
in Section 5 hereof not to be satisfied), upon written notice to all of the
Parties of the occurrence of any of the following events:

 

i.any Noteholder or group of Noteholders holding in the aggregate greater than
$5,000,000 in principal amount of the 5.75% Notes takes any legal action to
enforce their rights under the 5.75% Notes or the Indenture (each, an
“Enforcement Action”) and such action has continued for more than thirty (30)
days;

 

ii.the Exchange Transaction has not closed by May 31, 2013;

 

iii.the occurrence of any of the following (each, a “Bankruptcy Event”):

 

(x)          the Borrower or any of its Subsidiaries commences a voluntary case
or proceeding concerning itself, or an involuntary case or proceeding concerning
the Borrower or any of its Subsidiaries is commenced, under title 11 of the
United States Code (the “Bankruptcy Code”) or under other laws, domestic or
foreign, relating to bankruptcy, insolvency, reorganization, winding-up or
adjustment of debts or analogous proceedings; or

 

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(y)          the Borrower or any of its Subsidiaries applies for or consents to
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator, or the like, of itself or of a material part of its
property, domestic or foreign; or

 

(z)          the Borrower or any of its Subsidiaries makes a general assignment
for the benefit of creditors;

 

iv.COFACE withdraws or modifies its approval of this Agreement or of any of the
transactions contemplated hereby; or

 

v.a COFACE Facility Restructuring has not been consummated on or prior to June
28, 2013;

 

(c)by any Restructuring Support Party (other than Thermo) (so long as such
Restructuring Support Party is not in breach of any representation, warranty,
covenant or other agreement contained herein at the time of such termination as
to have caused any of the conditions set forth in Section 5 hereof not to be
satisfied) upon written notice to Globalstar and each other Restructuring
Support Party of the occurrence of any of the following events:

 

i.any material violation, breach or inaccuracy of any representation, warranty,
agreement or covenant of any other Party (the “Breaching Party”), which material
violation, breach or inaccuracy would cause any of the conditions set forth in
Section 5 hereof not to be satisfied, and such violation, breach or inaccuracy
has not been cured, to the extent curable, by the Breaching Party within fifteen
(15) days after receipt by the Breaching Party of written notice thereof; or

 

ii.any of Globalstar or the Subsidiary Guarantors discloses any material
information concerning itself or the Company that was not disclosed to the
Restructuring Support Parties prior to the Effective Date (the parties agree
that, only for purposes of this Section 6(c)(ii), all information set forth in
Globalstar’s filings with the U.S. Securities and Exchange Commission from
January 1, 2011 to the date of this Agreement or set forth in any written
report, certificate of other document delivered by Globalstar to the Agent
pursuant to the Facility Agreement shall be deemed to have been disclosed to the
Restructuring Support Parties), the existence or substance of which has a
material adverse effect on the Company’s ability to consummate the transactions
contemplated by this Agreement; or

 

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(d)by the Company or Thermo (so long as the Company or Thermo, as the case may
be, is not in breach of any representation, warranty, covenant or other
agreement contained herein at the time of such termination as to have caused any
of the conditions set forth in Section 5 hereof not to be satisfied) upon
written notice to each Restructuring Support Party of the occurrence of any
material violation, breach or inaccuracy of any representation, warranty,
agreement or covenant of any Restructuring Support Party, which material
violation, breach or inaccuracy would cause any of the conditions set forth in
Section 5 hereof not to be satisfied, and such violation, breach or inaccuracy
has not been cured, to the extent curable, by such Restructuring Support Party
within fifteen (15) days after receipt by such Restructuring Support Party of
written notice thereof.

 

7.          Effect of Termination. The earliest of: (i) the date on which this
Agreement is terminated in accordance with Section 6 hereof; (ii) the date on
which a COFACE Facility Restructuring is consummated; or (iii) June 28, 2013,
shall be referred to as the “Termination Date”. Upon the occurrence of the
Termination Date, termination of this Agreement shall be effective immediately
and all obligations hereunder (other than (x) the Company’s obligations under
Section 25 hereof and (y) all of the Lenders’ consents under Section 3 hereof,
except for the consent to the delivery of the subordinated subsidiary guarantees
described in Section 7 of the 5.75% Notes Term Sheet (the delivery of which
shall be governed by definitive documentation for a COFACE Facility
Restructuring and the terms of which shall include the conditions to delivery
thereof identical to those contained in Section 3 hereof and shall otherwise be
consistent with the terms hereof and the 5.75% Notes Term Sheet), each of which
obligations and consent shall survive the Termination Date) shall terminate,
each Party hereto shall be released from its commitments, undertakings and
agreements (except as otherwise expressly provided herein), and this Agreement
shall be of no further force and effect; provided, however, that any claim for
breach of this Agreement that arises or occurs prior to the Termination Date
shall survive such termination and all rights and remedies with respect to such
claims shall not be prejudiced in any way. For the avoidance of doubt, other
than in the event of the consummation of a COFACE Facility Restructuring, none
of the Lenders’ consents under Section 3 hereof to the delivery of the
subordinated subsidiary guarantees described in Section 7 of the 5.75% Notes
Term Sheet and none of Thermo’s commitments under Sections 2(a), (c), (d) or (e)
hereof shall survive the Termination Date.

 

8.          Covenants.

 

(a)Globalstar hereby agrees to deliver executed copies of the Disclosed
Documents, each certified as true and correct by a responsible officer of
Globalstar, within three (3) Business Days of the closing of the Exchange
Transaction.

 

(b)Each of Parties hereto hereby agrees to use its commercially reasonable
efforts to:

 

i.meet in person as a group with their advisors on or prior to May 24, 2013 at a
location to be determined by the Lenders to negotiate a term sheet that includes
all principal terms of a COFACE Facility Restructuring (a “Long-Form Term
Sheet”); and

 

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ii.agree in writing (subject to internal credit approval and COFACE approval) to
a Long-Form Term Sheet on or prior to June 6, 2013.

 

(c)Each of Thermo and Globalstar hereby agrees to provide the Agent prompt
written notice if, after the date hereof, James Monroe III, Thermo, Globalstar,
any Subsidiary Guarantor or any of their respective affiliates (directly,
indirectly or beneficially) (i) comes to own or control any of the 5.75% Notes
or any of the New Notes (as defined in the 5.75% Notes Term Sheet) or (ii)
becomes a party to any written agreement, “side-letter,” undertaking or
understanding relating to such person’s ownership of or control of any voting or
economic rights associated with the 5.75% Notes or the New Notes.

 

9.          Costs and Fees. The Company shall as promptly as practicable
reimburse the Agent and each Lender for all costs, fees and expenses incurred by
such Party related to the transactions contemplated hereby, including, without
limitation, counsel and advisor fees and expenses of White & Case LLP and FTI
Consulting, Inc.

 

10.        Representations and Warranties.

 

(a)Each of the Restructuring Support Parties hereby represents and warrants on a
several and not joint basis for itself and not any other person or entity that
the following statements are true, correct and complete as of the date hereof:

 

i.it has the requisite corporate or other organizational power and authority to
enter into this Agreement and to carry out the transactions contemplated by, and
perform its respective obligations under, this Agreement;

 

ii.the execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary corporate or
other organizational action on its part;

 

iii.the execution, delivery and performance by it of this Agreement does not and
shall not (i) violate any provision of law, rule or regulation applicable to it
or any of its affiliates, or its certificate of incorporation or bylaws or other
organizational documents or those of any of its affiliates or (ii) in the case
of Thermo, conflict with, result in a breach of, or constitute (with due notice
or lapse of time or both) a default under any material contractual obligation to
which it or any of its affiliates is a party;

 

iv.the execution, delivery, and performance by it of this Agreement does not and
shall not require any registration or filing with, the consent or approval of,
notice to, or any other action with any federal, state or other governmental
authority or regulatory body, other than the approval of COFACE in the case of
the Agent and the Lenders and required filings under the Securities Exchange Act
of 1934 by Thermo and its affiliates; and

 

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v.this Agreement is its legally valid and binding obligation, enforceable
against it in accordance with its terms.

 

(b)In addition to the foregoing, Thermo also hereby represents and warrants as
to itself that the following statements are true, correct and complete as of the
date hereof:

 

i.Thermo has, and on each date on which an Equity Commitment is contemplated
pursuant to Section 2 hereof Thermo will have sufficient cash available (through
existing credit agreements or otherwise) to enable it to make the Equity
Commitments in full;

 

ii.the obligations of Thermo under this Agreement (including, without
limitation, the Equity Commitments) shall not be contingent on the availability
of financing;

 

iii.Thermo is an “accredited investor” within the meaning of Rule 501 of
Regulation D under the Securities Act of 1933, with sufficient knowledge and
experience to evaluate properly the terms and conditions of the this Agreement,
and has been afforded the opportunity to discuss this Agreement and other
information concerning the Company with the Company’s representatives, and to
consult with its legal and financial advisors with respect to its investment
decision to execute this Agreement, and it has made its own analysis and
decision to enter into this Agreement and otherwise investigated this matter to
its full satisfaction and will not seek rescission or revocation of this
Agreement; and

 

iv.other than as disclosed on Annex III hereto, none of James Monroe III, Thermo
or any of their respective affiliates (directly, indirectly or beneficially) (i)
owns or controls any of the 5.75% Notes or (ii) is a party to any written
agreement, “side-letter,” undertaking or understanding relating to such person’s
ownership of or control of any voting or economic rights associated with the
5.75% Notes or the New Notes.

 

(c)Globalstar and each Subsidiary Guarantor hereby represent and warrant that
the following statements are true, correct and complete as of the date hereof:

 

i.it has the requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated by, and perform its
respective obligations under, this Agreement;

 

ii.the execution and delivery of this Agreement and the performance of its
obligations hereunder have been duly authorized by all necessary corporate or
other organizational action on its part;

 

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iii.the execution, delivery and performance by it of this Agreement does not and
shall not (i) violate any provision of law, rule or regulation applicable to it
or any of its affiliates, or its certificate of incorporation or bylaws or other
organizational documents or those of any of its affiliates, or (ii) conflict
with, result in a breach of, or constitute (with due notice or lapse of time or
both) a default under any material contractual obligation to which it or any of
its affiliates is a party;

 

iv.the execution, delivery, and performance by it of this Agreement does not and
shall not require any registration or filing with, the consent or approval of,
notice to, or any other action with any federal, state or other governmental
authority or regulatory body;

 

v.since April 1, 2013, no fact, condition, circumstance or event has occurred
that, individually or in the aggregate, has had or would reasonably be expected
to have, a material adverse effect on the business, results of operations,
assets or financial condition of the Company;

 

vi.neither Globalstar nor any Subsidiary Guarantor is aware of any Enforcement
Action having been commenced by any Noteholder or group of Noteholders holding
in the aggregate greater than $5,000,000 in principal amount of the 5.75% Notes;

 

vii.the Common Stock Purchase Agreement, dated as of December 28, 2012 (the
“Purchase Agreement”), between the Borrower and Terrapin Opportunities, L.P.
(“Terrapin”), has not been modified and remains in full force and effect, and
the Borrower is unaware of any breach thereof or default thereunder by either
party thereto;

 

viii.no Bankruptcy Event has occurred; and

 

ix.other than as disclosed on Annex III hereto, none of James Monroe III,
Globalstar, the Subsidiary Guarantors or any of their respective affiliates
(directly, indirectly or beneficially) (i) owns or controls any of the 5.75%
Notes or (ii) is a party to any written agreement, “side-letter,” undertaking or
understanding relating to such person’s ownership of or control of any voting or
economic rights associated with the 5.75% Notes or the New Notes.

 

11.          Survival of Agreement. Each of the Parties acknowledges and agrees
that this Agreement is being executed in connection with negotiations concerning
a possible financial restructuring of the Company, and, if a Bankruptcy Event
occurs, Globalstar and each Subsidiary Guarantor hereby waives any right to
assert that the termination of this Agreement is subject to the automatic stay
provisions of the Bankruptcy Code, and expressly stipulates and consents
hereunder to the prospective modification of the automatic stay provisions of
the Bankruptcy Code for purposes of terminating this Agreement, to the extent
that the applicable bankruptcy court determines that such relief is required.

 

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12.          Acknowledgment. Globalstar and each Subsidiary Guarantor hereby:

 

(a)reaffirms and admits the validity and enforceability of the Facility
Agreement and all other documents and agreements to which it and any
Restructuring Support Party are parties and all of its obligations thereunder,
without offset, defense or counterclaim; and

 

(b)represents and warrants that the Agent, on behalf of the Lenders, has a
valid, perfected, first priority security interest in all of the Collateral to
the extent contemplated in the Security Documents.

 

13.          Waiver. This Agreement is part of a proposed settlement of a
dispute among the Parties. Nothing herein shall be construed as a waiver by any
Party of any or all of such Party’s rights and the Parties expressly reserve any
and all of their respective rights. Pursuant to Federal Rule of Evidence 408 and
any other applicable rules of evidence, this Agreement and all negotiations
relating hereto shall not be admissible into evidence in any proceeding other
than a proceeding to enforce its terms.

 

14.          Relationship Among Parties. Notwithstanding anything herein to the
contrary, the duties and obligations of the Restructuring Support Parties under
this Agreement shall be several and not joint. No Restructuring Support Party
shall have any responsibility for any trading by any other entity by virtue of
this Agreement. No prior history, pattern or practice of sharing confidences
among or between Restructuring Support Parties shall in any way affect or negate
this understanding and agreement.

 

15.          Specific Performance. It is understood and agreed by the Parties
that money damages would be an insufficient remedy for any breach of this
Agreement by any Party and each non-breaching Party shall be entitled to
specific performance and injunctive or other equitable relief as a remedy of any
such breach, including, without limitation, an order any court of competent
jurisdiction requiring any Party to comply promptly with any of its obligations
hereunder.

 

16.          Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to such
state’s choice of law provisions which would require the application of the law
of any other jurisdiction. By its execution and delivery of this Agreement, each
of the Parties irrevocably and unconditionally agrees for itself that any legal
action, suit or proceeding against it with respect to any matter arising under
or arising out of or in connection with this Agreement or for recognition or
enforcement of any judgment rendered in any such action, suit or proceeding, may
be brought in the United States District Court for the Southern District of New
York, and by execution and delivery of this Agreement, each of the Parties
irrevocably accepts and submits itself to the exclusive jurisdiction of such
court, generally and unconditionally, with respect to any such action, suit or
proceeding.

 

12

 

 

17.          Waiver of Right to Trial by Jury. Each of the Parties waives any
right to have a jury participate in resolving any dispute, whether sounding in
contract, tort or otherwise, between any of them arising out of, connected with,
relating to or incidental to the relationship established between any of them in
connection with this Agreement. Instead, any disputes resolved in court shall be
resolved in a bench trial without a jury.

 

18.          Successors and Assigns. Except as otherwise provided in this
Agreement, this Agreement is intended to bind and inure to the benefit of each
of the Parties and each of their respective successors, assigns, heirs,
executors, administrators and representatives.

 

19.          No Third Party Beneficiaries. Unless expressly stated herein, this
Agreement shall be solely for the benefit of the Parties and no other person or
entity shall be a third party beneficiary of this Agreement.

 

20.          Notices. All notices (including, without limitation, any notice of
termination) and other communications from any Party hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered by
courier service, messenger, e-mail or facsimile to the other Parties at the
applicable addresses below, or such other addresses as may be furnished
hereafter by notice in writing to each Party:

 

(a)If to Globalstar or any Subsidiary Guarantor, to the address, e-mail address
or facsimile number set forth below:

 

Globalstar, Inc.

300 Holiday Square Boulevard

Covington, Louisiana 70433

United States of America

Attention: James Monroe III

 

with a copy to:

 

Skadden, Arps, Slate, Meagher & Flom LLP

155 N. Wacker Drive

Chicago, Illinois 60606

United States of America

Attention: George N. Panagakis and Ron E. Meisler

 

(b)If to Agent, to the address, e-mail address or facsimile number set forth
below:

 

BNP Paribas (as COFACE Agent)

16 boulevard des Italiens

75009 Paris

France

Attention: Jean Philippe Poirier and Emmanuel Galzy

 

with a copy to:

 

13

 

 

White & Case LLP

1155 Avenue of the Americas

New York, NY 10036

Attention: Scott Greissman and Michael Shepherd

 

(c)If to Thermo, to the address, e-mail address or facsimile number set forth
below:

 

Thermo Funding Company LLC

1735 19th Street #200

Denver, Colorado 80202

United States of America

Attention: James Monroe III

 

with a copy to:

 

Taft Stettinius & Hollister LLP

425 Walnut Street, Suite 1800

Cincinnati, Ohio 45202-3957

Attention: Gerald S. Greenberg

 

(d)If to a Lender or a transferee thereof, to the addresses, e-mail addresses or
facsimile numbers set forth below following the Lender’s or the transferee’s
signature, as the case may be, with a copy to the Agent.

 

21.          Entire Agreement. This Agreement, including the Annexes hereto,
constitutes the entire agreement of the Parties with respect to the subject
matter of this Agreement, and supersedes all other prior negotiations,
agreements and understandings, whether written or oral, among the Parties with
respect to the subject matter of this Agreement. The Annexes to this Agreement
are expressly incorporated herein and are made a part of this Agreement.

 

22.          Severability. The illegality, invalidity or unenforceability of any
provision of this Agreement under the law of any jurisdiction shall not affect
its legality, validity or enforceability under the law of any other jurisdiction
nor the legality, validity or enforceability of any other provision. Upon such
determination that any provision of this Agreement is illegal, invalid or
unenforceable, the Parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in an acceptable manner.

 

23.          Amendments. Except as otherwise provided herein, this Agreement may
not be modified, amended or supplemented without the prior written consent of
all Parties.

 

24.          Counterparts. This Agreement may be executed in one or more
counterparts, each of which, when so executed, shall constitute the same
instrument and the counterparts may be delivered by facsimile transmission or by
electronic mail in portable document format (.pdf).

 

14

 

 

25.          Public Disclosure. The Company shall submit to counsel to the Agent
and the Trustee all press releases and public filings relating to this Agreement
or the transactions contemplated hereby and thereby and any amendments thereof.
The Company shall not, without the consent of each of the Restructuring Support
Parties, (a) use the name of any Restructuring Support Party in any press
release without such Restructuring Support Party’s prior written consent or (b)
disclose (except to the extent that the same may already be public or such
disclosure is required under applicable law) to any person other than legal,
financial and tax advisors to the Company the principal amount or percentage of
any claims or interest held by the Restructuring Support Parties or any of their
subsidiaries or affiliates.

 

26.          Headings. The section headings of this Agreement are for
convenience of reference only and shall not, for any purpose, be deemed a part
of this Agreement.

 

27.          Interpretation. This Agreement is the product of negotiations among
the Parties, and the enforcement or interpretation hereof, is to be interpreted
in a neutral manner, and any presumption with regard to interpretation for or
against any Party by reason of that Party having drafted or caused to be drafted
this Agreement or any portion hereof, shall not be effective in regard to the
interpretation hereof.

 

28.          Finance Document. This Agreement shall constitute a Finance
Document. Other than as set out in this Agreement, each Finance Document shall
remain in full force and effect.

 

29.          Miscellaneous. The following provisions of the Facility Agreement
are incorporated into this Agreement, mutatis mutandis, as if set out in this
Agreement with references to “this Agreement” being construed as references to
this Agreement: clause 17 (Costs and Expenses). Any failure by the Borrower or
any of the Subsidiary Guarantors to comply with this Agreement shall constitute
an Event of Default pursuant to clause 23.3 (Other Obligations) of the Facility
Agreement (other than those obligations and/or provisions which if not complied
with would result in an Event of Default under another sub-clause 23 (Events of
Default) of the Facility Agreement). Other than in respect of each Finance
Party, a person who is not a party to this Agreement may not rely on it and the
terms of the Contracts (Rights of Third Parties) Act 1999 are excluded. Each
Finance Party reserves all other rights or remedies it may have now or in the
future.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

15

 

 

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

 

  Borrower       GLOBALSTAR, INC., as Borrower         By: /s/ James Monroe III
    Name: James Monroe III     Title:   Chief Executive Officer          
Subsidiary Guarantors       GSSI, LLC, as Subsidiary Guarantor         By: /s/
L. Barbee Ponder     Name: L. Barbee Ponder     Title:   Assistant Secretary    
      Globalstar Security Services, LLC, as Subsidiary Guarantor         By: /s/
Anthony J. Navarra     Name: Anthony J. Navarra     Title:   President          
Globalstar C, LLC, as Subsidiary Guarantor         By:  /s/ L. Barbee Ponder    
Name: L. Barbee Ponder     Title:   Assistant Secretary  

 

 

 

 

  Globalstar USA, LLC, as Subsidiary Guarantor         By: /s/ L. Barbee Ponder
    Name: L. Barbee Ponder     Title:   Assistant Secretary           Globalstar
Leasing LLC, as Subsidiary Guarantor         By: /s/ L. Barbee Ponder    
Name: L. Barbee Ponder     Title:   Assistant Secretary           spot LLC, as
Subsidiary Guarantor         By: /s/ L. Barbee Ponder     Name: L. Barbee Ponder
    Title:   Assistant Secretary           GLOBALSTAR BROADBAND SERVICES INC.,
as Subsidiary Guarantor         By:  /s/ Richard S. Roberts     Name: Richard S.
Roberts     Title:   Assistant Secretary           GLOBALSTAR MEDIA LLC, as
Subsidiary Guarantor         By: /s/ Richard S. Roberts     Name: Richard S.
Roberts     Title:   Assistant Secretary  

 

 

 

 

  ATSS Canada, Inc., as Subsidiary Guarantor         By:  /s/ L. Barbee Ponder  
  Name: L. Barbee Ponder     Title:   Assistant Secretary           Globalstar
Brazil Holdings, L.P., as Subsidiary Guarantor         By:  /s/ L. Barbee Ponder
    Name: L. Barbee Ponder     Title:   Assistant Secretary           gcl
licensee llc, as Subsidiary Guarantor         By: /s/ L. Barbee Ponder    
Name: L. Barbee Ponder     Title:   Assistant Secretary           gusa licensee
llc, as Subsidiary Guarantor         By: /s/ L. Barbee Ponder     Name: L.
Barbee Ponder     Title:   Assistant Secretary           Globalstar Licensee
LLC, as Subsidiary Guarantor         By: /s/ L. Barbee Ponder     Name: L.
Barbee Ponder     Title:   Assistant Secretary  

 

 

 

 

  COFACE Agent       BNP PARIBAS, as COFACE Agent         By: /s/ Jean Philippe
Poirier     Name: Jean Philippe Poirer     Title:   Export Finance           By:
/s/ Claudia Belli     Name: Claudia Belli     Title:   Export Finance  

 

 

 

 

  Lenders           BNP PARIBAS, as Lender         By: /s/ Jean Philippe Poirier
    Name: Jean Philippe Poirer     Title:   Export Finance           By: /s/
Claudia Belli     Name: Claudia Belli     Title:   Export Finance          
crÉdit agricole corporate and investment bank, as Lender         By:  /s/
Jean-Luc Ransac     Name: Jean-Luc Ransac     Title:   Authorized Signatory    
      Crédit Industriel et Commercial, as Lender         By: /s/ Thomas Giroud  
  Name: Thomas Giroud     Title:   A.V.P.           By: /s/ Jacques-Philippe
Menville     Name: Jacques-Philippe Menville     Title:   S.V.P.          
NATIXIS, as Lender         By:  /s/ David Bonnefoy     Name: David Bonnefoy    
Title:   Managing Director Structuring SEF           By: /s/ Matthieu Jamin  

 

 

 

 

  Name: Matthieu Jamin     Title:   Associate Director SEF           SOCIÉTE
GÉNÉRALE, as Lender         By: /s/ Nicolas Buisine     Name: Nicolas Buisine  
  Title:   Vice President, TMT Finance           Thermo           THERMO FUNDING
COMPANY LLC         By: /s/ James Monroe III     Name: James Monroe III    
Title:   Manager  

 

 

 

 

ANNEX I

 

5.75% Notes Term Sheet

 

 

 

 

5.75% Convertible Senior Notes due 2028

 

This sets forth the principal terms of a proposed transaction in which
Globalstar, Inc. (“Globalstar” or the “Company”) will offer to exchange cash and
a newly issued series of Convertible Senior Notes (the “New Notes”) for the
5.75% Convertible Senior Notes (the “Notes”) issued by Globalstar, and is
presented to certain of the holders (the “Holders”) of the Notes for discussion
purposes only. This is not an offer by the Company to purchase or exchange any
of the Notes, and the Company is not soliciting the Holders’ consent to any
amendments to the indenture governing the Notes. Any binding proposal will be
set forth in writing and identified as such. This proposal may be amended or
withdrawn by the Company at any time in its sole discretion. This proposal
remains subject in all respects to any necessary consents of the lenders under
that certain COFACE Facility Agreement among Globalstar, as Borrower, BNP
Paribas, Societe Generale, Natixis, Crédit Agricole Corporate and Investment
Bank and Credit Industriel et Commercial, as Mandated Lead Arrangers, BNP
Paribas, as Security Agent and COFACE Agent (the “COFACE Agent”), and the Banks
and Financial Institutions listed in Schedule 1 thereto as Original Lenders (as
amended, restated, or otherwise modified from time to time, the “Facility
Agreement”). The transaction would be further conditioned upon participation by
holders of a minimum of 91% in principal amount of the Notes put to the Company.
Any election by the Company to pay cash instead of equity or to exercise the
December 2013 Call Right (as defined below), shall each be subject to the prior
and explicit written approval of the Majority Lenders (as defined in the
Facility Agreement).

 

The below proposed new terms represent the principal proposed terms of the
exchange transaction and the New Notes (except as modified the New Notes will
have the same terms as the Notes); additional terms of the New Notes will need
to be negotiated. The parties will also need to discuss the structure of the
transaction.

 

Proposed New Terms

 

1.   Removal of Put Option  

The Holders currently have the right to require Globalstar to purchase for cash
all or any portion of the Notes on each of April 1, 2013, April 1, 2018 and
April 1, 2023. Globalstar proposes that the supplemental indenture governing the
New Notes will eliminate the April 1, 2013 put date. The April 1, 2018 and April
1, 2023 put dates shall remain as will the final maturity date of April 1, 2028.

 

The Company’s right to call (redeem) the New Notes under Section 4.01 of the new
supplemental indenture shall apply solely (a) on December 10, 2013 (the
“December 2013 Call Right”), if and only if the 30-day trailing volume weighted
average price of the common stock on November 29, 2013 is less than $0.20,
adjusted for any extraordinary events (e.g., a stock split or a reverse stock
split), which redemption would trigger the make-whole payment set forth below,
and (b) from and after April 1, 2018. To exercise the December 2013 Call Right,
the Company must issue a call notice on or prior to the close of business on
December 2, 2013.

 

2.   Cash Payment   Exchanging holders shall receive a pro rata cash paydown of
20.6606% of their existing Notes plus cash in an amount equal to all accrued and
unpaid interest on the existing Notes.

 

-1-

 

 

3.   Conversion Rate / Conversion Price  

The current base conversion rate for the Notes is 166.1820 shares of common
stock per $1,000 principal amount of the Notes, equivalent to a base conversion
price of approximately $6.02 per share.

 

From the date of the effectiveness of the new supplemental indenture until April
1, 2014, the base conversion price of the New Notes will be $0.80 (as it may be
lowered by anti-dilution or other provisions, the “New Conversion Price”).

 

From April 1, 2014 until April 1, 2015, the New Conversion Price will be lowered
to a 10% discount to the 30-day trailing volume weighted average price of the
common stock on April 1, 2014, if such discounted price is lower than the New
Conversion Price. If not, the New Conversion Price will remain in effect.

 

From April 1, 2015 until the final maturity date of April 1, 2028, the New
Conversion Price will be lowered to a 10% discount to the 30-day trailing volume
weighted average price of the common stock on April 1, 2015, if such discounted
price is lower than the New Conversion Price. If not, the New Conversion Price
will remain in effect.

 

Additionally, if such discounted price is lower than the New Conversion Price on
April 1, 2014, on that date Globalstar will provide additional consideration to
the New Note holders in the amount of 25% of the principal amount outstanding of
the New Notes on that date payable in equity, or cash (such form to be
determined at the Company’s option) which will not reduce the principal amount
outstanding. Any equity included in this consideration will be priced equal to
the 30-day trailing volume weighted average price of the common stock on April
1, 2014.

 

4.   Make-Whole Premium  

The make-whole language in the supplemental indenture governing the New Notes
will apply if a fundamental change occurs at any time on or before April 1,
2028.

 

The indenture will also contain a make-whole provision effective upon (x) the
exercise by the Company of its December 2013 Call Right, which call, if
exercised, would trigger a make-whole premium equal to 32 percent in cash, less
interest paid, or (y) conversion, in which case, the make-whole premium would be
based on 3 years’ worth of interest (including both cash and PIK interest as set
forth herein) from the date of issuance of the New Notes less interest paid,
which amount shall be payable (a) upon a call, in cash or (b) upon conversion,
in common stock based on the 30-day trailing volume weighted average price
immediately prior to conversion; provided that this make-whole shall not apply
to conversions within the first 12 months after closing of the exchange or
conversions in accordance with the equitization of the New Notes provision
below.

 

5.   Interest Rate  

The New Notes will receive interest at a rate of 8.00%, with 5.75% paid in cash
and a PIK interest component of 2.25%.

 

-2-

 

 

6.   Equitization of New Notes  

During the 20-business day period immediately following the 30-day period
immediately following closing, Globalstar will offer each holder the opportunity
to exchange up to 15% of the New Notes held by each holder for, at Globalstar’s
option (and Globalstar shall inform the holders of the New Notes of its choice
at closing), either (x) cash or (y) shares of common stock at a price per share
equal to the lower of (i) the trailing volume weighted average price of the
common stock during the 30-day period immediately following closing or (ii)
$0.50.

 

During the 20-business day period immediately following the nine month
anniversary of the closing, Globalstar will offer each holder the opportunity to
exchange up to an additional 15% of the New Notes held by each holder for, at
Globalstar’s option (and Globalstar shall inform the holders of the New Notes of
its choice prior to the start of the 30-day period referred to below), either
(x) cash or (y) shares of common stock at a price per share equal to the lower
of (i) the trailing volume weighted average price of the common stock during the
30-day period immediately prior to such 20-business day period set forth above
or (ii) $0.50.

 

7.   Guarantees  

No later than December 31, 2013, any direct or indirect subsidiaries of
Globalstar that provide guarantees under the COFACE facility or any other series
of notes will guarantee Globalstar’s obligations under the New Notes, in form
and substance (including with respect to intercreditor and subordination
provisions) satisfactory to the COFACE Lenders. Due to Globalstar’s inability to
grant such guarantees upon the closing of a restructured COFACE Facility
Agreement, the holders of the New Notes will receive (without reduction in
principal of the New Notes) common stock equal to 3% of the current (i.e. 4/15)
principal amount outstanding of the Notes based on the Equity Issuance Price (as
defined below) at the closing of the exchange. Notwithstanding any disbursement
of common stock as described in the preceding sentence, such holders shall
continue to be entitled to receive guarantees as described in the first sentence
above.

 

8.   Anti-dilution Protections  

Globalstar will grant anti-dilution protections to holders of the New Notes, in
addition to those currently provided in the Notes, substantially similar to
those provided with respect to the 8.0% Convertible Senior Unsecured Notes, as
set forth in section 9.04(b) of the Second Supplemental Indenture, other than
with respect to any securities issued in connection with the Additional Thermo
Equity Investment.

 

-3-

 

 

9.   Equity Issuance  

Consenting holders will receive at closing (without reduction in principal of
the New Notes) common stock equal to 8% of the current principal amount
outstanding of the Notes based on the lower of (i) the trailing volume weighted
average price of the common stock during the 30-day period preceding closing or
(ii) $0.32 (the “Equity Issuance Price”).

 

10.   Alternative to Second Lien Position  

The Company was unable to obtain consent for the New Notes to receive a “silent
second” lien on all of the assets that secure the COFACE facility. Therefore, at
the Company’s option either the Equity Issuance shall increase to an equity
issuance of 13% or the amount of outstanding New Notes after closing shall be
increased by 5% at closing. In lieu of the original agreement on a springing
lien, if any second (or junior first) lien is granted in connection with any
future financings by the Company, other than a restructuring of the COFACE
facility, provided that neither Thermo, Jay Monroe nor one of their affiliates
participates in such COFACE restructuring, (i) upon the first such financing,
holders of the New Notes will receive (without reduction in principal of the New
Notes) common stock equal to 5% of the current (i.e. 4/15) principal amount
outstanding of the Notes based on the then-current 30-day VWAP and (ii) if the
financing is before April 1, 2018 and Thermo, Jay Monroe or one of their
affiliates participates in any such financings, the exchanging Holders
(regardless of whether they continue to hold New Notes) shall receive the right
to participate in up to 50% of the amount of indebtedness proposed to be issued
or sold to Thermo, Jay Monroe or their affiliates, in any such financings,
offered on a pro rata basis to such Holders based on their proportionate
ownership of the New Notes (as among themselves) as of closing.

 

11.   Additional Thermo Equity Investment  

At closing, Thermo shall make an additional common equity investment of no less
than $25 million at a price equal to $0.32 per share (which $25 million shall
include any investment made to satisfy the Company’s obligations hereunder).

 

12.   Payment of Professional Advisors  

On March 22, 2013, the Company will pay $236,606.82, representing a portion of
the accrued fees and expenses of Akin Gump. On or prior to close of business on
April 5th, 2013, the Company will pay any remaining accrued fees and expenses of
Akin Gump incurred through March 31, 2013. Upon entry into forbearance
agreement, Globalstar will enter into an amendment to the currently existing
engagement agreement to pay Akin Gump’s fee and expenses incurred from April 1,
2013 forward. This amended engagement agreement will include a reasonable
retainer sized for the work expected to be accomplished during the month of
April to document and close on the terms of this term sheet.

 

13.   Other   The new supplemental indenture shall contain customary 9.9%
conversion blocker language.

 

-4-

 

 

ANNEX II

 

Initial COFACE Restructuring Terms

 

 

 

  

Initial COFACE Restructuring Terms

 

This sets forth certain proposed modifications to the indebtedness of
Globalstar, Inc. (“Globalstar” or the “Borrower,” and together with its
subsidiaries and affiliates, the “Company”) under that certain COFACE Facility
Agreement dated as of 5 June 2009 (as amended, restated, supplemented and/or
otherwise modified from time to time, the “Facility Agreement”), among, inter
alia, Globalstar, as borrower, certain financial institutions and banks party
thereto, as lenders (the “Lenders”), and BNP Paribas, as COFACE Agent and
Security Agent (in such capacities, the “Agent”). Capitalized terms used herein
and not defined herein shall have the meanings given them either in the Equity
Commitment, Restructuring Support and Consent Agreement, dated as of May 20,
2013 (together with the Annexes thereto, the “Restructuring Agreement”), or in
the Facility Agreement.

 

Any agreement to restructure the outstanding loans and other obligations under
the Facility Agreement or under any other documents evidencing Globalstar’s
indebtedness shall only exist upon execution of definitive documentation,
receipt by each of the Lenders and COFACE of internal credit approval, consent
by the Lenders and COFACE, and satisfaction of the conditions precedent to
effectiveness as stated therein.

 

The proposed COFACE Facility Restructuring will provide for the amendment and
restatement of the Facility Agreement on the following terms and on certain
other terms required by the Lenders and agreed to by the Company:

 

Scheduled Minimum Principal Repayments:  

The Repayment Schedule will be replaced by a new repayment schedule set forth in
Schedule 1 hereto (the “New Repayment Schedule”), which sets forth the amount of
the minimum required principal payments and the amount payable on the Final
Maturity Date, subject to possible adjustment based on the COFACE premium amount
and payment schedule.

 

Interest Rate:  

Applicable Margin in respect of each Facility will increase:
(i) by 50 basis points as of the Closing (defined below); and
(ii) beginning on June 1, 2017 and continuing until the Final Maturity Date, by
an additional 50 basis points on the first Payment Date to occur after June 1 of
each year.

 

Restructuring Fee:   2.5% of the outstanding amount of the Loans at closing of
the COFACE Restructuring Facility (the “Closing”) (which shall be fully earned
at such Closing and nonrefundable when paid), which Restructuring Fee shall be
paid 40% at such Closing and 60% shall be paid on December 31, 2017.

 

-1-

 

 

 

Conditions Precedent:   Conditions precedent to consummation of a COFACE
Facility Restructuring, consistent with transactions of the type, and including,
among other things:           (i)    delivery of a final business plan and
financial projections in form and substance satisfactory to the Agent and the
Lenders and agreed to by the Company, which plan shall incorporate the
projections attached as Schedule 2 hereto (the “Projections”) and shall also
demonstrate the Company’s ability (assuming the timely receipt of Equity Linked
Securities (as defined below)) to fully fund operations and repay all
indebtedness, and identify all sources of additional funding (including the
Projections, the “Agreed Business Plan”);           (ii)   no modification shall
have been made to the terms of the 8% Convertible Senior Unsecured Notes due
2021 or the 5% Convertible Senior Unsecured Notes due 2019;           (iii)  all
documentation, certificates and closing deliverables typical for transactions of
this type (including all legal opinions reasonably required by the Lenders), in
form and substance reasonably satisfactory to the Lenders; perfection of liens
on and security interests in all Collateral to the extent provided in the
Security Documents;1           (iv)  all internal Lender credit approvals, and
COFACE approval, of the proposed COFACE Facility Restructuring including, to the
extent required, all documentation, certificates and closing deliverables
related thereto;           (v)   on or before the consummation of a COFACE
Facility Restructuring, the Company receives from third parties reasonably
acceptable to the Lenders (which may, but need not include, Thermo and Terrapin)
at least $45,000,000 from cash equity financing (including for this purpose,
convertible subordinated debt, subordinated debt with warrants and similar
equity-like financial instruments which, in all cases, shall be subject to
definitive documentation, including, without limitation, subordination
provisions, acceptable to the Majority Lenders and COFACE (collectively, “Equity
Linked Securities”)), of which at least $25,000,000 shall be on account of the
Effective Date Commitment and at least $20,000,000 shall be on account of the
2013 Closing Commitment;

 

 

 

1 Subject to delivery of updated schedules. Additional collateral may be
required.

 

-2-

 

 

    (vi)  on or before the consummation of a COFACE Facility Restructuring, the
Company receives a commitment by Thermo (or other third parties reasonably
acceptable to the Majority Lenders), which commitment shall be subject to the
conditions contained in Section 2 of the Restructuring Agreement and shall
otherwise be unconditional, to contribute to the Borrower the 2013 Year-End
Commitment and the 2014 Anticipated Equity Financing by no later than December
26, 2013 and December 31, 2014, respectively;           (vii) closing of a
restructuring of the approximately $71.8 million of issued and outstanding 5.75%
Notes on the terms and conditions set forth in the 5.75% Notes Term Sheet
attached as an exhibit to the Restructuring Agreement, and otherwise reasonably
acceptable to the Agent and the Majority Lenders in all respects with respect to
terms not covered expressly in the 5.75% Notes Term Sheet;             (viii)
payment of all fees and expenses of the Agent and the Lenders associated with
the preparation, due diligence, documentation, administration and Closing of the
Restructuring, including payment in cash of all fees and expenses of the Agent
and the Lenders, and their professionals and advisors, including, without
limitation, the fees and expenses of White & Case LLP and FTI Consulting, Inc.;
subject to COFACE approval, to the extent a new or modified COFACE Insurance
Policy is required, payment of any portion of any new COFACE Insurance Premium
then owing, if any;           (ix)  there is no pending Enforcement Action
brought by any Noteholder or group of Noteholders holding in the aggregate
greater than $5,000,000 in principal amount of the 5.75% Notes; and          
(x) other conditions precedent to be agreed by the Lenders and the Company.

 

-3-

 

 

Mandatory Prepayments:   The following mandatory prepayments of principal will
be required, in addition to the scheduled minimum principal repayments set forth
in the New Repayment Schedule:           (i)       Cash Sweep – Excess Cash
Flows:  mandatory prepayment of 50% of Excess Cash Flow calculated as of the
six-month period ending on the last day of each June and December of each year
(commencing December 31, 2013) and paid no later than forty-five (45) days after
the last day of each period ending in June of a year and seventy-five (75) days
after the last day of each period ending in December of a year according to the
definition of “Excess Cash Flow” as set forth on Schedule 3.           (ii)     
Cash Sweep – Spectrum Cash Flow:  mandatory prepayment of 75% of any Spectrum
Cash Flow (as defined below); provided that if the Excess Cash Flow is negative
for the period in which such Spectrum Cash Flow is determined, then the
mandatory prepayment shall be reduced to the greater of (a) Available Cash (as
defined below) or     (b) 75% of Spectrum Cash Flow less the Applicable Negative
Excess Cash Flow (as defined below).             “Available Cash” shall be
defined as the sum of (1) Globalstar’s consolidated unrestricted cash balance at
the beginning of the period less the minimum Liquidity threshold (i.e.,
$4,000,000), (2) Spectrum Cash Flow for the period, and (3) Excess Cash Flow for
the period.           “Applicable Negative Excess Cash Flow” shall be defined
as: (a) for all Payment Periods except for the Second-Half 2017 Period (as
defined below), the lesser of the absolute value of the Excess Cash Flow, if
negative, or $10,000,000; or (b) for the Second-Half 2017 Period, the lesser of
the absolute value of the Excess Cash Flow, if negative, or $25,000,000.        
  “Second-Half 2017 Period” shall be defined as the second Payment Period to
commence in the calendar year of 2017.

 

-4-

 

 

    “Spectrum Cash Flow” shall be defined to include any cash received from
monetizing the Company’s spectrum rights, including, but not limited to, upfront
payments, operating lease payments, and any other payments to the Borrower
associated with the commercial use of the Spectrum by third parties less (i) any
capital or operating expenses incurred (or reasonably expected to be incurred)
by the Company in direct connection with such Spectrum Cash Flow and (ii) any
payments received by the Company under such Spectrum Cash Flow which are to be
“passed through” to any third party; provided that all such deductions (e.g.,
deducted expenses incurred and “passed through” payments) must be directly
related to the corresponding monetization of spectrum rights, must be approved
in good faith by the Majority Lenders in the exercise of their commercially
reasonable judgment and must not have been deducted from the calculation of
Excess Cash Flow (i.e., no double counting); provided further that, mandatory
prepayments resulting from a Spectrum Sale (defined below) shall be governed by
Section 7.6 of the Facility Agreement (as modified as described in clause (iii)
below).           Payment shall be made within forty-five (45) days after the
last day of each Payment Period ending in June of a year and seventy-five (75)
days after the last day of each Payment Period ending in December of a year.    
      (iii)     Cash Sweep – Spectrum Sale:  mandatory prepayment of 100% of any
Net Cash Proceeds from any sale of title (legal or equitable) to any of the
Company’s spectrum rights (a “Spectrum Sale”).           Payment shall be made
within three (3) Business Days of receipt of funds by the Borrower; provided
that the Lenders’ lien on such title shall not be released until the mandatory
prepayment is made.             (iv)      Cash Sweep – Equity Issuance and Debt
Issuance:  if the Company raises more than $145,000,000 in the aggregate of Net
Cash Proceeds from any Equity Issuances or Debt Issuances (exclusive of any cash
received resulting from the Equity Commitments and $19,500,000 received pursuant
to the Purchase Agreement), then mandatory prepayment of (x) 50% of any Net Cash
Proceeds from any additional Equity Issuances (including for this purpose,
Equity Linked Securities) and (y) 75% of any Net Cash Proceeds from any
additional Debt Issuances.

 

-5-

 

 

    Any mandatory prepayment on account of: (x) an Equity Issuance shall be made
within three (3) Business Days of the closing of such capital raise; and (y) a
Debt Issuance shall be made simultaneously with the closing of such capital
raise.           (v)      Cash Sweep – Asset Disposition:  modified to (x)
reduce basket in Section 7.6(b)(i) of the Facility Agreement to $50,000 (from
$500,000) and (y) require all Net Cash Proceeds earmarked for purchase of
replacement assets in accordance with Section 7.6(b)(ii) of the Facility
Agreement to be deposited, prior to any expenditure, in a bank account which is
pledged as collateral to the Agent and used only in accordance with the Agreed
Business Plan, and require the Company to at such time deliver to the Agent a
certificate signed by a responsible officer explaining the intended use of such
Net Cash Proceeds.           (vi)     Other:  other existing mandatory
prepayments as set forth in the Facility Agreement.       Financial Covenants:  
Consistent with the financial covenants set forth in the Facility Agreement and
each reset at levels providing a cushion of 20% to the Agreed Business Plan,
except that:           (i)    the language in Section 20.1 (Maximum Covenant
Capital Expenditures) shall be revised to indicate that the Borrower and its
Subsidiaries on a Consolidated basis will not permit the aggregate amount of all
Covenant Capital Expenditures for the period from July 1, 2013 to December 31,
2013 and for Fiscal Years 2014 through 2018 to exceed the $152,984,099, and the
Parties agree that the definitive documentation for a COFACE Facility
Restructuring shall indicate the maximum Covenant Capital Expenditures permitted
in each such Fiscal Year;           (ii)   the language in Section 20.2 of the
Facility Agreement (Minimum Liquidity) shall be revised to provide that “At all
times, the Company shall maintain a minimum Liquidity of  four million Dollars
(US$4,000,000).”;

 

-6-

 

 

    (iii) the table in Section 20.3 of the Facility Agreement (Adjusted
Consolidated EBITDA) shall be replaced with a new table set forth in Schedule 4
hereto;           (iv)  the definition of “Adjusted Consolidated EBITDA” shall
be revised to exclude the proceeds of Spectrum Cash Flow (except to the extent
that such proceeds are replacing revenue that was otherwise projected in the
Agreed Business Plan but which was not earned due to a change in the Company’s
strategy and only if such exception is approved in writing by the Majority
Lenders) and to indicate any other changes as agreed by the Agent, the Majority
Lenders and the Borrower prior to the execution of definitive documentation for
a COFACE Facility Restructuring; and           (v)  the language in Section 20.5
of the Facility Agreement (Net Debt to Adjusted Consolidated EBITDA) and all
other covenants and undertakings related to EBITDA not specified herein shall be
revised on terms agreed upon by the Company, the Agent and the Majority Lenders.
      Change of Control:  

Modification of the definitions of “Borrower Change of Control” and “Thermo
Change of Control” to increase the percentages indicated in clause (i) therein
to 51%.

 

All other Change of Control provisions will be unchanged.

      Additional Consideration:   Additional consideration to be provided to the
Lenders in form and on terms agreed to by the Lenders and the Company.        
Representations, Warranties and Covenants:   In addition to bringing down all
representations, warranties and covenants (in the Facility Agreement and the
Restructuring Agreement), the Borrower will be required to represent and warrant
as to: (i) the subordination of all obligations owed to the holders of 8%
Convertible Senior Unsecured Notes due 2021 or the 5% Convertible Senior
Unsecured Notes due 2019 to repayment in full of the restructured COFACE
Facility on the terms set forth in the relevant documentation; and (ii) the
continuing enforceability of the obligations of Terrapin under the Purchase
Agreement.

 

-7-

 

 

Additional Event of Default:   It shall be an additional Event of Default if
there is a material, known, contingent liability related to a litigation the
payment of which is not contemplated in the Agreed Business Plan, which
liability is reduced to final judgment and decreed to be payable by the
Borrower, and the payment of which would result in a material adverse change to
the Borrower’s cash flows.       Equity Cure:   The Company will be provided
unlimited equity cure rights for financial covenant defaults arising on or prior
to June 30, 2017 (including any financial covenant measured as at such date);
provided that each equity cure payment shall be in a minimum amount of $10
million.

 

[Additional terms to be included after negotiation.]

 

-8-

 

 

Schedule 1

NEW REPAYMENT SCHEDULE

 

($ in millions)      New Repayment Schedule      Repayment  Repayment  
Repayment   Cumulative   Cumulative  Date  %   $   %   $  Jun-13   -    -    -  
 -  Dec-13   -    -    -    -  Jun-14   -    -    -    -  Dec-14   0.7%  $4.0  
 0.7%  $4.0  Jun-15   0.6%   3.2    1.2%   7.3  Dec-15   0.6%   3.2    1.8% 
 10.5  Jun-16   2.8%   16.4    4.6%   26.9  Dec-16   2.8%   16.4    7.4%   43.3 
Jun-17   3.7%   21.7    11.1%   65.0  Dec-17   9.2%   54.1    20.3%   119.1 
Jun-18   6.6%   38.9    27.0%   158.0  Dec-18   6.6%   38.9    33.6%   197.0 
Jun-19   8.1%   47.4    41.7%   244.4  Dec-19   8.1%   47.4    49.8%   291.8 
Jun-20   50.2%   294.5    100.0%   586.3      100%  $586.3    100.0%  $586.3 

 

 

 

 

Schedule 2

PROJECTIONS

 

($ in millions)                                             Agreed Business
Plan  2013E   2014E   2015E   2016E   2017E   2018E   2019E   2020E   2021E  
2022E   2023E  Revenue:                                                       
Service Revenue  $65.6   $83.5   $102.8   $124.6   $145.8   $165.0   $181.7  
$196.1   $207.8   $216.7   $223.4  Equipment Revenue   19.9    31.5    39.0  
 44.9    49.6    53.0    56.3    59.6    61.0    62.7    64.7  Total Revenue 
 85.5    114.9    141.8    169.5    195.3    218.0    238.0    255.7    268.9  
 279.4    288.1  Operating Expenses:                                         
              Cost of Subscriber Equipment   (13.3)   (20.7)   (25.8)   (29.6) 
 (32.5)   (34.7)   (36.6)   (38.6)   (39.2)   (40.0)   (41.0) Other Operating
Expenses   (61.7)   (66.7)   (68.6)   (72.4)   (76.0)   (79.2)   (82.2) 
 (85.2)   (88.1)   (90.7)   (93.3) Total Operating Expenses   (75.0)   (87.4) 
 (94.4)   (102.0)   (108.5)   (113.8)   (118.9)   (123.7)   (127.4)   (130.7) 
 (134.3) Adjustments   1.5    2.5    3.0    3.6    4.2    4.7    5.1    5.5  
 5.8    6.0    6.2  Adjusted EBITDA  $12.0   $30.0   $50.5   $71.2   $91.1  
$108.8   $124.2   $137.4   $147.3   $154.7   $160.0  Change in Working Capital 
 9.2    10.3    9.7    1.4    0.1    0.3    0.3    0.8    0.8    0.6    1.8 
Thales Termination Charge   -    -    -    -    -    -    -    -    -    -    - 
Total Other Cash Flows   (3.7)   0.0    0.0    0.0    0.0    0.0    0.0    0.2  
 (0.1)   (0.3)   0.3  Operating Cash Flows  $17.4   $40.3   $60.2   $72.5  
$91.2   $109.2   $124.6   $138.4   $148.0   $155.0   $162.2 

 

 

 

  

Schedule 3

EXCESS CASH FLOW DEFINITION

 

“Excess Cash Flow” means, for any period of determination, the sum of the
following determined on a Consolidated basis, without duplication, for the
Borrower and its Subsidiaries in accordance with GAAP:

 

(a)Adjusted Consolidated EBITDA for such period;

 

(b)          minus (to the extent not already deducted in the calculation of
Adjusted Consolidated EBITDA),

 

(i)cash taxes and Consolidated Interest Expense paid in cash for such period;

 

(ii)all scheduled principal payments made in respect of Financial Indebtedness
during such period;

 

(iii)all Covenant Capital Expenditures made during such period (except to the
extent funded directly through the incurrence of Financial Indebtedness or
equity contributions or investments);

 

(iv)any increase in Working Capital during such period;

 

(v)any amount applied to fund any scheduled cash reserve required under the
Finance Documents, including the DSA Required Balance, the DSRA Required Balance
and the CNRA Required Balance in such period;

 

(vi)voluntary, mandatory and other non-scheduled principal payments with respect
to any Loans or other Financial Indebtedness in such period (except for any
mandatory payments made pursuant to the Cash Sweep provisions and any payments
that constitute or with the passage of time or giving of notice or both would
constitute a Default or Event of Default under the Facility Agreement);

 

(vii)to the extent included in Adjusted Consolidated EBITDA, Spectrum Cash Flow,
any spectrum lease payments, and any other monetization of the Company’s
spectrum rights;

 

(viii)any cash payments in respect of the [Restructuring Fee and COFACE
Insurance Premium]1;

 

(ix)any cash payments during such period in respect of any Exceptional Items;

 

 

 

1 Subject to agreement on definition.

 

 

 

  

(x)Transaction Costs during such period (solely to the extent added back to net
income in the calculation of Adjusted Consolidated EBITDA);

 

(xi)any non-cash income recognized during such period;

 

(xii)any cash utilized during such period in respect of amounts expensed in a
prior period;

 

(xiii)any non-cash extraordinary losses and any losses on foreign currency
transactions; and

 

(xiv)the portion of the purchase price and other reasonable acquisition related
costs paid during such period to make Permitted Acquisitions and investments,
except to the extent financed with proceeds of Financial Indebtedness, equity
issuances or insurance or casualty payments,

 

(c)           plus (to the extent not already added in the calculation of
Adjusted Consolidated EBITDA and without double counting):

 

(i)any decreases in Working Capital during such period;

 

(ii)any amount received as a result of decreasing cash reserves required under
the Finance Documents, including the DSA Required Balance, the DSRA Required
Balance and the CNRA Required Balance in such period;

 

(iii)any cash receipts in respect of Exceptional Items.

 

(iv)any cash income whereby cash is received but the recognition of GAAP income
is deferred during such period to another period;

 

(v)any expense recognized during such period in respect of amounts paid in a
prior period;

 

(vi)any cash received during such period in respect of extraordinary gains and
any gains on foreign currency transactions;

 

“Exceptional Items” means any material items of an unusual or non-recurring
nature which represent gains or losses including those arising on:

 

(a)the restructuring of the activities of an entity and reversals of any
provisions for the cost of restructuring;

 

(b)disposals, revaluations, write downs or impairment of non-current assets or
any reversal of any write down or impairment;

 

(c)disposals of assets associated with discontinued operations; and

  

(d)other exceptional terms reasonably determined by the COFACE Agent in good
faith.

 

 

 

  

Schedule 4

ADJUSTED CONSOLIDATED EBITDA COVENANT

 

Column 1 - Relevant Period  Column 2 - Amount  Relevant Period commecing on 1
July 2013 and expiring 31 December 2013  USD $5,633,301         Relevant Period
commecing on 1 January 2014 and expiring 30 June 2014  USD $9,852,348        
Relevant Period commecing on 1 July 2014 and expiring 31 December 2014  USD
$14,134,926         Relevant Period commecing on 1 January 2015 and expiring 30
June 2015  USD $18,135,368         Relevant Period commecing on 1 July 2015 and
expiring 31 December 2015  USD $22,229,855         Relevant Period commecing on
1 January 2016 and expiring 30 June 2016  USD $26,390,799         Relevant
Period commecing on 1 July 2016 and expiring 31 December 2016  USD $30,529,591 
       Relevant Period commecing on 1 January 2017 and expiring 30 June 2017 
USD $34,432,072         Relevant Period commecing on 1 July 2017 and expiring 31
December 2017  USD $38,413,322         Relevant Period commecing on 1 January
2018 and expiring 30 June 2018  USD $41,759,161         Relevant Period
commecing on 1 July 2018 and expiring 31 December 2018  USD $45,316,803 

 

 

 

 

ANNEX III

 

Definitive Documents and Other Agreements

  

 

 

 

DOCUMENT LIST

Exchange of 5.75% Convertible Senior Notes due 2028 of Globalstar, Inc.

 

Document     1.   Term Sheet 2.   Exchange Agreement 3.   Noteholders’ Schedule
to Exchange Agreement 4.   Fourth Supplemental Indenture 5.   Form of Note 6.  
Taft Opinion 7.   Forbearance Agreement 8.   First Amendment to Forbearance
Agreement 9.   Second Amendment to Forbearance Agreement 10.   Third Amendment
to Forbearance Agreement 11.   Fourth Amendment to Forbearance Agreement 12.  
Fifth Amendment to Forbearance Agreement 13.   Form of Guaranty Agreement 14.  
Equity Commitment, Restructuring Support and Consent Agreement 15.   Thermo
Common Stock Purchase Agreement 16.   Agency Agreement 17.   Note Purchase
Agreement 18.   Exchange Agreement Side Letter 19.   Optional Redemption Notice