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