OPTION AGREEMENT
 
This Option Agreement (the “Agreement”), dated as of May 25, 2011 (the
“Effective Date”), is by and among Global Telesat Corp. (the “Company”), Growth
Enterprise Fund, S.A. (“Seller”) and World Surveillance Group Inc. (“WSGI”).
 
Introduction
 
Simultaneously with the date hereof, the Company, Seller, David Phipps, and WSGI
entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”)
pursuant to which WSGI acquired all of the outstanding shares of capital stock
of the Company.
 
The Stock Purchase Agreement contemplates the consummation of this Agreement.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
 
1.     Definitions.  The following terms, as used herein, have the following
meanings:
 
“Affiliate” means, with respect to any person or entity, any person or entity
directly or indirectly controlling, controlled by, or under common control with
such person or entity.

“Assets” means those assets of the Company listed on Exhibit A to this
Agreement.

“Bankruptcy Event” means the occurrence of any of the following

(i) if WSGI shall consent to the appointment of a receiver, trustee or
liquidator of itself or of a substantial part of its property, or shall make a
general assignment for the benefit of creditors, or shall file a voluntary
petition in bankruptcy, or an answer seeking reorganization in a proceeding
under any bankruptcy law (as now or hereafter in effect) or an answer admitting
the material allegations of a petition filed against WSGI in any such
proceeding, or shall by voluntary petition, answer or consent, seek relief under
the provisions of any other now existing or future bankruptcy or other similar
law providing for the reorganization or winding up of corporations,  or shall,
in a petition in bankruptcy filed against it or them be adjudicated a bankrupt,
or WSGI or its directors or a majority of its stockholders shall vote to
completely dissolve or liquidate WSGI; or

(ii) if an involuntary petition shall be filed against WSGI seeking relief
against WSGI under any now existing or future bankruptcy, insolvency or other
similar law providing for the reorganization or winding up of corporations, and
such petition shall not be stayed or vacated or set aside within ninety (90)
days from the filing thereof; or
 
(iii) if a court of competent jurisdiction shall enter an order, judgment or
decree appointing, without consent of WSGI, a receiver, trustee or liquidator of
WSGI or of all or any substantial part of the property of WSGI, or approving a
petition filed against WSGI seeking a reorganization or arrangement of WSGI
under the Federal bankruptcy laws or any other applicable law or statute of the
United States of America or any State thereof; and such order, judgment or
decree shall not be stayed or vacated or set aside within ninety (90) days from
the date of the entry thereof.
 
 
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“Independent Valuation Firm” means an independent accounting firm of nationally
recognized standing reasonably satisfactory to the Company, Seller and
WSGI  (who shall not have any relationship with any of the Company, Seller or
WSGI).
 
“Purchase Price” means a price equal to the product of the fair market value of
an Asset on the date of the Bankruptcy Event as determined by the Independent
Valuation Firm and set forth in the Report multiplied by eighty percent (80%).
 
“Term” means the period commencing on the Effective Date and terminating on the
date that is eighteen (18) months from the Effective Date.
 
2.           Option.  During the Term, WSGI shall provide prompt written notice
of a Bankruptcy Event to Seller and the Company.  During the Term, Seller or a
designee of Seller (subject to Section 7 hereof) shall have the exclusive right
and option to purchase all or any portion of the Assets for the aggregate
Purchase Price (the “Option”) at any time within one hundred twenty (120) days
of a Bankruptcy Event (the “Option Period”).

3.           Indication of Interest.  Seller may submit an indication of
interest in exercising this Option by providing a written indication of interest
notice (“Interest Notice”) to the Company and WSGI at their respective principal
executive offices as set forth in Section 10 hereof within thirty (30) days of a
Bankruptcy Event signed by Seller and indicating that Seller is interested in
exercising this Option.

4.           Determination of Purchase Price.  Within ten (10) days of the
receipt of the Interest Notice, the Company and WSGI will engage an Independent
Valuation Firm, reasonably satisfactory to the Seller, to value the Assets.
Promptly, but in no event later than thirty (30) days after such selection, the
Independent Valuation Firm shall determine the fair market value of the Assets
and shall deliver to the Company, WSGI and the Seller, as promptly as
practicable, a report setting forth its determination of such fair market value
of each of the Assets (the “Report”).  The Report and its determination of fair
market value of the Assets shall be final and binding upon the Parties hereto
absent fraud, intentional misconduct or gross negligence.  The reasonable costs
and expenses of the Independent Valuation Firm shall be shared equally by WSGI
and the Company, on the one hand, and Seller, on the other hand.  The Company
and WSGI hereto agree that they will, and agree to cause their respective
employees, officers, directors, agents, and representatives to, cooperate and
provide reasonable assistance in the valuation of the Assets, including without
limitation, the making available to the extent necessary of books, records, work
papers and personnel.

 
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5.           Exercise of Option.  No later than thirty (30) days after the
delivery of the Report, Seller may exercise the Option by submitting a written
option exercise notice exercising this Option (“Exercise Notice”) to the Company
and WSGI at their respective principal executive offices as set forth in Section
10 hereof.  Such Exercise Notice shall (a) be signed by Seller, (b) state
Seller’s election to exercise this Option, (c) identify the Assets for which it
is being exercised, and (d) identify the aggregate Purchase Price for the Assets
to be purchased. In the event that Seller exercises its Option as provided for
in this Agreement, the Company agrees to sell and Seller agrees to buy the
Assets indicated in such Exercise Notice within ten (10) days of the Company’s
receipt of the Exercise Notice, the closing of which shall occur on a date to be
mutually agreed upon by Seller and the Company. Seller, WSGI and the Company
agree to execute all such documents, certificates and instruments and to do and
take all such actions as shall be reasonably necessary to effect the purchase
and sale of the Assets indicated in any Exercise Notice.  In the event the
Seller does not exercise the Option during the Option Period, the Option and
this Agreement shall terminate and have no further force or effect and no party
to this Agreement shall have any other liability, obligation or duty pursuant to
this Agreement.

6.           Payment of Purchase Price.  The aggregate Purchase Price shall be
paid by Seller at the closing of the purchase and sale of the Assets and may be
paid by Seller to the Company by wire transfer of immediately available funds to
an account designated by the Company or by a cash or a certified or bank check
payable to the order of the Company.

7.           Option Not Transferable.  This Option is not transferable,
assignable or otherwise disposable except to an Affiliate of Seller.

8.           Representations and Warranties.  The Company, WSGI and Seller
hereby represent and warrant to each other as follows:

8.1.           All action on the part of the Company, WSGI and Seller necessary
for the authorization, execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby, has been taken and
this Agreement constitutes a valid and legally binding obligation of the
Company, WSGI and Seller, as applicable, enforceable in accordance with its
terms, except as the same may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other laws affecting generally the enforcement of
creditors' rights and by general principles of equity.

8.2.           The authorization, execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, will
not result in any violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, a breach or default under any
provision of any instrument, judgment, order, writ, decree or agreement to which
the Company, WSGI and Seller, as applicable, is a party or by which it is bound.

8.3.           There is no action, suit, proceeding, or investigation pending,
or to the knowledge of the Company, WSGI and Seller, as applicable, currently
threatened against the Company, WSGI and Seller, as applicable, in any way
relating to the validity of this Agreement or the right of the Company, WSGI and
Seller, as applicable, to enter into or to perform under this Agreement or
consummate the transactions contemplated hereby.

9.           Enforceability.  This Agreement shall be interpreted in such a
manner as to be effective and valid under applicable law, but if any provision
hereof shall be determined to be prohibited or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating or nullifying the remainder of such provision or any other
provisions of this Agreement.
 
 
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10.           Notices.  Any notice, demand or other communication given pursuant
to this Agreement shall be in writing and shall be personally delivered, sent by
nationally recognized overnight courier or express mail, or mailed by first
class certified or registered mail, postage prepaid, return receipt requested,
or otherwise actually delivered, receipt acknowledged, as follows: (a) if to the
Seller to 51 Lyon Ridge Road, Katonah, NY 10536 Attn: David Phipps, telecopy:
914-232-0647, (b) if to the Company or WSGI by physical or courier delivery:
State Road 405, Building M6-306A, Room 1400, Kennedy Space Center, FL 32815, or
if by mail delivery, to Mail Code: SWC, Kennedy Space Center, FL 32899,
Attention: General Counsel, telecopy: 321-452-8965 or (c) at such other address
as may have been furnished by any party hereto in writing to the other parties
in accordance with the provisions of this Section 10.
 
11.           Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, without regard to
the conflict of laws provisions thereof. The Company, WSGI and Seller hereby
submit to the jurisdiction of the courts of the State of Florida and of the
United States located in Brevard County of Florida and each agrees not to raise
and waive any objection to or defense based on the venue of any such court or
forum non conveniens.
 
12.           Amendments and Waivers.  This Agreement may be amended or modified
only by a written instrument signed by the Company, WSGI and Seller.  No waiver
of this Agreement or any provision hereof shall be binding upon the party
against whom enforcement of such waiver is sought unless it is made in writing
and signed by or on behalf of such party.  The waiver of a breach of any
provision of this Agreement shall not be construed as a waiver or a continuing
waiver of the same or any subsequent breach of any provision of this
Agreement.  No delay or omission in exercising any right under this Agreement
shall operate as a waiver of that or any other right.
 
13.           Binding Effect.  This Agreement shall be binding on and inure to
the benefit of the parties hereto and their respective heirs, executors and
administrators, successors and permitted assigns.
 
14.           Entire Agreement.  This Agreement constitutes the final sole and
entire agreement of the parties with respect to the matters set forth herein and
replaces and supersedes all other agreements and understandings relating hereto.
 
15.           Counterparts.  This Agreement may be executed in any number of
counterparts, including counterpart signature pages or counterpart facsimile
signature pages, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement shall
become effective when each party hereto shall have received a counterpart hereof
signed by the other party hereto, and any one of which may be delivered by
facsimile.
 
 
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16.           Captions.  The captions of the Sections of this Agreement are for
convenience of reference only and in no way define, limit or affect the scope or
substance of any section of this Agreement.
 
[Remainder of Page Intentionally Left Blank]
 
 
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This Agreement has been executed and delivered as of the date first above
written.
 
GLOBAL TELESAT CORP.
 
By:
   
Name:  David Phipps
 
Title:  Chief Executive Officer
   
WORLD SURVEILLANCE GROUP INC.
 
By:
   
Name:  Glenn D. Estrella
 
Title:  President and CEO
 
GROWTH ENTERPRISE FUND, S.A.
 
By:
   
Name:  David Phipps
 
Title:  Managing Director

 
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Exhibit A
 
Assets
 
Appliques:

Appliqué 1 - Turkey
Appliqué 2 - Novosibirsk, Russia
Appliqué 3 - Venezuela
Appliqué 4 - Australia
Appliqué 5 - R&D
Appliqué 6 - Korea
Appliqué 7 - Peru
Appliqué 8 - Mexico
Appliqué 9 - Easton Spare

 

Contracts:
 

Agreement (Contract No. GINC-C-11-0520) dated February 10, 2011 between the
Company and Globalstar Inc.

Amendment Agreement dated August 16, 2006 between the Company and Globalstar
Inc.

Amendment Agreement dated February 21, 2008 between the Company and Globalstar
Inc.

Purchase Agreement dated February 21, 2008 between the Company and Globalstar
Inc.

Amendment No. 2 dated December 21, 2006 between the Company and Globalstar Inc.

Agreement dated May 4, 2005 between the Company and Globalstar Inc.
 
 
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