Exhibit 10.3


 


CONVERSION AGREEMENT


 


This Conversion Agreement (“Agreement”) is entered into as of June 19,
2009 between THERMO FUNDING COMPANY LLC,
a Colorado limited liability company (“Thermo”),
and GLOBALSTAR, INC., a Delaware
corporation (the “Company”).


 


WHEREAS, the Company
and Thermo have determined that it is in their mutual best interests for Thermo
to convert all of the debt of the Company owed to Thermo under the Second
Amended and Restated Credit Agreement dated as of December 17, 2007, as
amended (the “Thermo Debt”) into Series A
Convertible Preferred Stock (“Preferred Stock”).


 


WHEREAS, upon the
recommendation of the Thermo Transactions Special Committee, the Board of
Directors has approved conversion of the Thermo Debt, on the terms set forth in
this Agreement.


 


NOW,
THEREFORE, in consideration of the premises and of the mutual
covenants and agreements hereinafter set forth and for other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties do hereby agree as follows:


 


1.                                       Sale of Stock in Exchange for Reduction of Debt.  Subject to the terms and conditions of this
Agreement, Thermo agrees to exchange the Thermo Debt (the “Transaction”) for one share of Series A
Convertible Preferred Stock (the “Share”)
convertible into common equity as provided in the Certificate of Designation to
be filed with the Secretary of State of Delaware.


 


2.                                       Consideration.  As
consideration for the Transaction and the agreements set forth herein, the
following shall occur at the Closing (as defined below):


 


(a)                                  Thermo shall credit
to the Company by reduction in outstanding principal and interest under the
Thermo revolving and term credit facility, the sum of $180,176,520.30 in U.S.
Dollars (the “Exchange Price”); and


 


(b)                                 The Company shall
deliver to Thermo a stock certificate for the Share.


 


3.                                       Closing.  The closing
of the Transaction (the “Closing”)
contemplated by this Agreement shall take place at 9:00 a.m. Eastern
Daylight Time on June 19, 2009 at the offices of the Company in Milpitas,
California, or such other date, time and place as the parties may agree.


 


4.                                       Maximum Shares; Stockholder Approval.  Thermo acknowledges that its conversion
rights for the Preferred Stock limits the amount of voting stock it may hold.  Upon written notice to the Company, the
Company will use its reasonable efforts to obtain Board of Director and
stockholder approval to issue a nonvoting class of common stock with the same
rights as the existing class of common 


 

















 


stock on the date hereof, except with regard
to voting rights that would have an adverse effect on the Company.  The Company also undertakes to use its
reasonable efforts to obtain stockholder approval of the Transaction as
required by Nasdaq Listing Rules.


 


5.                                       Representations and Warranties of the Company.  The Company represents and warrants to Thermo,
with respect to the Transaction as of the Closing Date, as follows:


 


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


 


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


 


(c)                                 Title.  Upon delivery of the
certificate or certificates representing the Share, Thermo will obtain good, valid
and transferable title to the Share free and clear of all liens, claims and
encumbrances whatsoever.


 


(d)                                Share.  The Company is issuing the Share pursuant an
exemption from registration under Section 4(2) of the Securities Act
of 1933 (the “Securities Act”).


 


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


 


(f)                                    Acknowledgement.  The Company acknowledges that Thermo has not
made any representations or warranties to it except to the extent of the
representations and warranties of Thermo in this Agreement.


 


6.                                      Representations and Warranties of Thermo.  Thermo hereby represents and warrants to the
Company as follows:


 


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


 


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


 


(c)                                      Securities
Act.  Thermo is acquiring the Share
for its own account for investment only and not with a present view towards the
public sale or distribution thereof, except pursuant to sales registered or
exempted under the Securities Act.


 


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


 


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


 


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


 


(g)                                 Acknowledgement.  Thermo acknowledges that the Company has not
made any representations or warranties to it except to the extent of the
representations and warranties of the Company in this Agreement.


 


7.                                       Condition Subsequent.  If the initial funding to the Company under
the COFACE Facility Agreement dated as of June 5, 2009 does not occur by [June 30],
2009, the parties agree that the Transaction shall be deemed void and status
quo ente 


 


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to immediately prior to the Transaction.  The Company shall take all actions to affect
this Section 7 and pay all costs and fees related to this condition.


 


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


 


9.                                       Survival.  The
representations and warranties of Thermo and the Company contained in Sections 5
and 6 and the covenant in Section 7 shall survive this Agreement.


 


10.                                Successors and Assigns.  No party may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party.  Subject to the preceding, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties hereto and their respective successors and assigns.


 


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


 


12.                                Entire Agreement; Amendments.  This Agreement super-sedes all other prior
oral or written agreements between Thermo, the Company, and their respective
affiliates and persons acting on their behalf with respect to the matters
discussed herein, and this Agreement contains the entire understanding of the
parties with respect to the matters covered herein and, except as specifically
set forth herein, neither Thermo nor the Company makes any representation,
warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may be amended,
waived, terminated or otherwise modified other than by an instrument in writing
signed by Thermo and the Company.  Any
amendment to this Agreement made in conformity with the provisions of this Section 11
shall be binding on all parties.  No
provision hereof may be waived other than by an instrument in writing signed by
the party against whom enforcement is sought.


 


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


 


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


 


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


 


Signatures are on the
following page.


 


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


 


	
   

  	
  THERMO
  FUNDING COMPANY LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  James Monroe III

  
	
   

  	
  Printed
  Name: James Monroe III

  
	
   

  	
  Title:
  Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  GLOBALSTAR,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Fuad Ahmad

  
	
   

  	
  Printed Name: Fuad
  Ahmad

  
	
   

  	
  Title: Senior Vice President and CFO

  



 


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