Exhibit 10.3

 

Portions of this exhibit have been omitted pursuant to a request for
confidential treatment filed with the Securities and Exchange Commission
pursuant to Rule 24b-2 under the Securities Exchange Act of 1934. Such portions
are marked “[*]” in this document; they have been filed separately with the
Commission.

 

January 30. 2013

 

Globalstar Inc

Att: Paul Monte

461 SO Milpitas Blvd

Milpitas, CA 95035

 

Subject: Globalstar requested payment delays and "temporary hold" - Third
Extension Dear

 

Paul,

 

In response to your third request to defer outstanding and accumulated payments
for the Globalstar CN Program, your contract number GINC-C-08-0400 (the
"Agreement"), this letter acknowledges the agreement by Ericsson to defer the
payments for achieved and upcoming Payment Milestones as defined in the
Agreement and in the letter agreement PJR0311-002 dated March 7, 2011 and
subsequent letter agreements on this subject. Specifically this deferral
consists of:

 

$347,658 CDR ($929,520 less September 2012 payment of $581,862 = $347,658)

 

$0 down payment Supplementary Services contracted in Dec 2011 ($130,375 less
July 2012 payment of $130,375 = $0)

 

$0 Delivery Milpitas lab HW ($1,500,000 less March 2012 payment of $650,000 less
July 2012 payment of $781,862 less September 2012 payment of $68,138 = $0.)

 

$0 for amendment 5 — Genband /Server Delta Lab ($12.763 less July 2012 payment
of $12,763 = $0)

 

$347,658 Total owed Feb 23rd 2012

 

$2,100,000 for Clifton HW Install Complete, delivered in March, 2012 $0 for lab
rental ($25,000 less July

 

2012 payment of $25,000 = $0) $110,305 Nigeria Lab Testing Complete

 

Total additional owed before June 28th 2012: $2,210,305

 

In addition to the above, Globalstar also owes 5 quarterly support payments for
BSCS

Support as follows:

January 31, 2012: [*]

April 30. 2012: [*}

July 31, 2012: [*]

October 31, 2012: [*]

January 31, 2013: [*]

 

 

 

 

Total deferral: $2,726,713

 

Subject to your consent as indicated below, Ericsson Inc. ("Ericsson") would
agree as follows:

 

a)Assuming the Payment Milestone is completed and invoiced, Globalstar shall pay
any unpaid milestone payments in Exhibit C and C-1 of the Agreement (referred to
as "Deferred Payments") upon the earlier of the completion of a third party
source of financing or June 151, 2013. Upon such payment, Globalstar and
Ericsson will use good faith efforts to come to a mutual agreement on a revised
milestone payment schedule and amend Exhibits C and C1 of the Agreement.

 

b)In consideration for agreeing to the Deferred Payments, Globalstar shall pay
six and a half percent (6.5%) per annum interest on the Deferred Payments.
Interest shall begin to accrue after the 3151 day of acceptance of the
completion of any Payment Milestone and shall be paid at the same time as the
Deferred Payment is made.

 

c)For any material event, such as change of ownership, bankruptcy filing,
material investment, shareholder or ownership changes affecting control (i.e.
the ownership and/or ability to vote more than 50% of the total shares), breach
of obligations, failure to pay debts, and the like, the Deferred Payments become
due and payable immediately.

 

d)Due to delays by Globalstar in delivering necessary Customer Furnished
Equipment for the Core Network Program (both as defined in the Agreement), the
only work that will be performed by Ericsson between now and when the project is
resumed under a new mutually agreed milestone schedule (the "Temporary Hold
Period") will be the completion of the following agreed punch list items for the
Milpitas lab:

 

1. Loading and testing of the QoS patch in the SGSN including any necessary
software reinstallation of software in the SGSN planned for Q1 2013

 

Should Globalstar require installation (including upgrading the software on all
boxes to the same version that is on the Milpitas lab), and integration of the
Clifton Site 1 during the Temporary Hold Period, Ericsson will initiate such
work within 4 weeks of Globalstar satisfying the following 3 requirements:

 

1.   Globalstar notifies Ericsson that the site is ready for integration
including completion of Globalstar's agreed deliverables such as Power; and

2.   Ericsson's receipt of a written request for the integration work; and

3.   Ericsson receives a cash payment of the contracted fee of [*] for the
integration project plus a contract amendment for the [*] fee for providing and
integrating the software upgrades to the Clifton site to the same level as is
present in the Milpitas lab. The [*] cash payment amount will be deducted from
the future payment milestone "SAT sites 1-3" and Exhibit C will be updated
accordingly.

 

 

 

 

e)Globalstar understands and agrees that the above "temporary hold" will cause a
delay to the Core Network Program, and that Ericsson cannot guarantee a
day-for-day schedule delay nor can Ericsson commit to re-staffing the project
with the same individuals as have been assigned to-date when the Core Network
Program resumes as these individuals may have been assigned to other long term
Ericsson projects. Ericsson will use commercially reasonable efforts to limit
any such delay caused by such "temporary hold" to a period of time equal to the
length of the Temporary Hold Period plus four months. Ericsson will not be
obligated to perform any work until the project is resumed and a new milestone
schedule is agreed. Upon Ericsson's resumption of work, Globalstar agrees to pay
Ericsson a project re-setup fee of $250,000.00.

 

Globalstar and Ericsson agree that the delays in the Core Network Program have
created issues regarding the obsolescence of certain program features
(specifically 1. HPA including "NRSPCA on offer"; 2. Push-to-Talk; and 3.
Sigcomp). Upon the signing of this letter agreement, Globalstar and Ericsson
agree to continue the good faith technical discussions agreed to in the letter
agreement dated March 8, 2012 relating to HPA and "NRSPCA on offer". Globalstar
agrees to forego the requirements for Push-To-Talk and Sigcomp previously
committed to and Ericsson agrees to credit Globalstar for the elimination of
these requirements. Globalstar and Ericsson will use good faith efforts to come
to mutual agreement on the technical solution for HPA and "NRSPCA on offer" at
the conclusion of such discussions. However, Ericsson will not commit to deliver
the agreed solution on a particular schedule due to the delays in payment as
outlined in a) above. Globalstar and Ericsson agree to enter into good faith
commercial discussions upon Ericsson's receipt of all monies due in this letter
agreement regarding the ordering and delivery of the revised HPA and "NRSPCA on
offer" functionality and any commercial impacts following Ericsson's receipt of
the Deferred Payments. At that time, Globalstar and Ericsson will execute a
contract amendment reflecting the agreed solution for HPA and "NRSPCA on offer"
and the elimination of Push-To-Talk and Sigcomp. Should the parties be unable to
agree on the above technical solution by August 31, 2013 then either Globalstar
or Ericsson may choose to terminate the Agreement. Thereafter, provided that all
amounts due under this letter agreement have been paid, neither party will have
any liability whatsoever under the Agreement.

 

f)This letter agreement will become effective upon GlobeIstar's signature below
and Globalstar's payment to Ericsson of $200,000 paid as follows: $100,000 on or
before February11. 2013 and $100,000 on or before February 28, 2013. The first
payment of $100,000, when paid, will be used to reduce the balance for the
Nigeria Lab Testing Complete from $110,305 to $10,305. The second $100,000 will
be applied as follows: $10,305 will be used to eliminate the remaining $10,305
for the Nigeria Lab Testing Complete and $89,695 will be used to reduce the
balance for CDR from $347,658 to $257,963. The letter agreement between the
parties dated July 17, 2012 is hereby superseded by this letter agreement.

 

g)Globalstar requests the following payment modifications:

 

1.          If Globalstar has not paid Ericsson the amount due. together with
interest and

any other amounts owing under the Agreement as of June 1st 2013, Globalstar may
terminate the Agreement for convenience by delivering such written notice of the
termination and agreeing to make a final payment of $10,000,000 ("Final
Payment") to Ericsson.

2.          If Globaistar cancels the Agreement for convenience on June 1st,
2013, then Globalstar shall make the Final Payment either: (a) in cash not later
than June 15, 2013 or (b) subject to paragraph 4 below, in Globalstar common
stock (OTC: GSAT, the "GSAT Stock") not later than June 15, 2013. Globalstar
shall provide written notice of such its request to pay in cash or GSAT Stock on
June 1St, 2013.

 

 

 

 

3.          If payment is to be made in GSAT Stock, such GSAT Stock shall be
registered and freely tradable, free and clear of any liens, encumbrances or
other restrictions. The number of shares delivered by Globalstar to Ericsson
shall be equal to the Final Payment plus 5%, divided by the volume weighted
average price of GSAT for the 20 trading days immediately prior to (but not
including) the date of delivery of such shares. If Globalstar requests to make
the Final Payment in GSAT Stock, Ericsson shall have the option (exercisable by
written notice delivered on or before June 10, 2013) either to accept such GSAT
Stock (including the additional 5% mentioned in the above paragraph) or to
receive the Final Payment in cash from the sale of such GSAT stock by Globalstar
and/or from other sources who will then remit the full amount of the Final
Payment. Under no circumstance would Globalstar remit less than the total Final
Payment amount.

 

h) Except as modified hereby, the terms and conditions of the Agreement will
continue on in full force and effect.

 

If Globalstar concurs with the foregoing, please execute a copy of this letter
and return it to my attention at Ericsson.

 

  Sincerely,         /s/  Johan Westerberg   ERICSSON INC.   Johan Westerberg  
Vice President Eastern Region

 

 

 

 

Agreed and accepted by Ericsson Inc and Globalstar Inc:

 

Ericsson Inc.   Globalstar Inc         /s/  Johan R. Westerberg     /s/  David
Milla Name:  Johan R. Westerberg   Name:  David Milla Title:  Vice President
Sales   Title:  Director – Contracts Date:  February 13, 2013   Date:  February
11, 2013