Exhibit 10.1

 

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.

 

June 1, 2013

 

Globalstar Inc

Att: Paul Monte

461 S. Milpitas Blvd

Milpitas, CA 95035

 

Subject: Globalstar requested payment delays and "temporary hold" - Fourth
Extension Dear Paul,

 

In response to your fourth 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:

 

$257,963 CDR (Critical Design Review) ($929,520 less September 2012 payment of
$581,862 less February 28 payment of $89,695 = $257,963)

 

$257,963Total owed Feb 23'd 2012

 

[*]

 

Total additional owed before June 28th 2012: $ 2,100,000.

 

In addition to the above, Globalstar also owes 6 quarterly support payments for
BSCS Support as follows:

[*]

 

For a total BSCS Support owed of $202,500

 

Total deferral: $2,560,463

 

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 28, 2013 ( unless extended pursuant to
paragraph h) hereof). 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 315t 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 Q2 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 $603,273 for the
integration project plus a contract amendment for the $95,000 fee for providing
and integrating the software upgrades to the Clifton site to the same level as
is present in the Milpitas lab. The $603,273 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 September 30, 2013 (or December 1, 2013
should the Automatic Extension referred to in paragraph G occur) 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 Globalstar's signature below.
The letter agreement between the parties dated January 30, 2013 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 28, 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 Globalstar cancels the Agreement for convenience on June 28,
2013, then Globalstar shall make the Final Payment either: (a) in cash not later
than July 15, 2013 or (b) subject to paragraph 4 below, in Globalstar common
stock (OTC: GSAT, the "GSAT Stock") not later than July 15, 2013. Globalstar
shall provide written notice of such its request to pay in cash or GSAT Stock on
June 28, 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 July 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)On or before June 20, 2013, Globalstar may notify Ericsson that it requires a
fifth payment extension to September 1, 2013 ("The Automatic Extension"). Upon
such notification, Globalstar will submit a payment of $100,000 to be received
by wire in Ericsson's account on or before June 24, 2013. Such extension, for a
period of sixty one (61) days beyond the dates outlined in paragraph g above,
will be automatically granted by Ericsson upon receipt in Ericsson's account of
the $100,000 by wire transfer on or before June 24. This payment will be used to
reduce the then current balance of $257,963 for CDR. Should this payment not be
received on or before June 24, 2013, the Agreement will be automatically
terminated. Upon such termination, Globalstar would be required to either pay
the Deferred Payments and amounts set forth in paragraph a) and b) above in
final settlement of the Agreement, or chose the termination for convenience
option as outlined in paragraph g) above. Thereafter, upon fulfilling the
obligations required by either such option, neither party will have any
liability whatsoever under the Agreement.

 

 

 

  

i) 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
Signature   Signature Johan R. Westerberg   David Milla Name   Name Vice
President   Director - Contracts Title   Title 6/20/2013   6/17/2013 Date   Date