Exhibit 10.1


 


CONFIDENTIAL TREATMENT


 


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.


 


	
  

  	
   

   

   

  

  



 


 


H37813


 


CONTRACT


 


BETWEEN


 


GLOBALSTAR, INC.


 


AND


 


HUGHES NETWORK SYSTEMS, LLC


 


FOR


 


RADIO ACCESS NETWORK (RAN)


AND USER TERMINAL
SUBSYSTEM


 


 


CONTRACT NUMBER GINC-C-08-0390


 

















 


TABLE OF CONTENTS


 


	
  SECTION

  	
   

  	
   

  	
  PAGE

  
	
   

  	
   

  	
   

  
	
  ARTICLE 1.

  	
  SCOPE OF WORK

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2.

  	
  DELIVERY BY CONTRACTOR

  	
  1

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3.

  	
  PERFORMANCE SCHEDULE

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4.

  	
  PRICE

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5.

  	
  INSPECTION AND ACCEPTANCE

  	
  2

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6.

  	
  TAXES AND DUTIES

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE 7.

  	
  PAYMENT TERMS

  	
  4

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8.

  	
  CONTRACTOR DELIVERABLES,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  TITLE AND ASSUMPTION OF RISK

  	
  5

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9.

  	
  WARRANTY AND SUPPORT

  	
  6

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10.

  	
  ACCESS TO WORK IN PROGRESS

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11.

  	
  INTELLECTUAL PROPERTY RIGHTS

  	
  8

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12.

  	
  RESTRICTION OF HAZARDOUS SUBSTANCES (“ROHS”)

  	
  11

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13.

  	
  INTELLECTUAL PROPERTY RIGHTS INDEMNITY

  	
  12

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14.

  	
  INDEMNIFICATION AND INSURANCE

  	
  13

  
	
   

  	
   

  	
   

  
	
  ARTICLE 15.

  	
  GLOBALSTAR-FURNISHED PROPERTY AND FACILITIES

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16.

  	
  CONFIDENTIALITY

  	
  15

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17.

  	
  PUBLIC RELEASE OF INFORMATION

  	
  16

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18.

  	
  TERMINATION FOR CAUSE

  	
  17

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19.

  	
  TERMINATION FOR CONVENIENCE/STOP WORK ORDERS

  	
  18

  
	
   

  	
   

  	
   

  
	
  ARTICLE 20.

  	
  EXCUSABLE DELAY

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 21.

  	
  NOT USED

  	
  20

  
	
   

  	
   

  	
   

  
	
  ARTICLE 22.

  	
  GOVERNMENTAL AUTHORIZATIONS

  	
  21

  
	
   

  	
   

  	
   

  
	
  ARTICLE 23.

  	
  APPLICABLE LAW

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 24.

  	
  DISPUTE RESOLUTION

  	
  23

  
	
   

  	
   

  	
   

  
	
  ARTICLE 25.

  	
  CHANGES

  	
  24

  



 


i

















 


	
  ARTICLE 26.

  	
  ASSIGNMENT OF CONTRACT

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 27.

  	
  KEY PERSONNEL

  	
  26

  
	
   

  	
   

  	
   

  
	
  ARTICLE 28.

  	
  COMMUNICATION AND AUTHORITY

  	
  27

  
	
   

  	
   

  	
   

  
	
  ARTICLE 29.

  	
  ORDER OF PRECEDENCE

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 30.

  	
  OPTIONS

  	
  28

  
	
   

  	
   

  	
   

  
	
  ARTICLE 31.

  	
  LIMITATION OF LIABILITY

  	
  29

  
	
   

  	
   

  	
   

  
	
  ARTICLE 32.

  	
  ENTIRE AGREEMENT

  	
  29

  



 


HUGHES AND GLOBALSTAR
CONFIDENTIAL AND PROPRIETARY


 


ii

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


This
is a Contract between Hughes Network Systems LLC, a limited liability company
organized under the laws of Delaware (hereinafter referred to as the “Contractor”)
with its principal place of business at 11717 Exploration Lane Germantown,
Maryland 20876 USA, and Globalstar, Inc., a company incorporated under the
laws of Delaware with its principal place of business at 461 South Milpitas
Boulevard, Milpitas, California 95035 (hereinafter referred to as “Globalstar”
or “Customer”).  As used herein,
Contractor and Globalstar may each be referred to individually as a “Party” and
collectively as the “Parties”.


 


The
effective date of this Contract (“EDC”) is 1 May 2008.


 


Article 1.               Scope of Work


 


A.           The Contractor shall deliver the Radio Access
Network (RAN) and the User Terminal Subsystem comprised of the Satellite Air
Interface Chip and the Remote Terminal Diagnostic Monitor in accordance with
all the requirements of this Contract, including Exhibit A hereto,
entitled Statement of Work,  Exhibit B1
hereto, entitled System Technical Specification, Exhibit B2
hereto, entitled Gateway Technical Specification, Exhibit B3
hereto, entitled User Terminal (UT) Subsystem Technical Specification, Exhibit C
entitled Pricing Schedule and Payment Plan, Exhibit D
entitled Hardware Warranty and Software
Maintenance Services and the Contract Articles of this
document.  (Exhibits B1, B2 and B3 are
collectively referred to herein as “Exhibit B, Technical
Specifications”).


 


B.             The Contract, including all Exhibits hereto,
sets out the requirements to be performed by Contractor to implement the RAN
and UT Subsystem, hereinafter referred to as “the Work”.


 


Article 2.               Delivery by Contractor


 


A.           The items to be delivered by Contractor
pursuant to this Contract shall be as described in Exhibit A hereto,
entitled Statement of Work, according to INCOTERMS 2000, Ex Works Contractor’s
facilities at Germantown, Maryland, USA.


 


B.             The delivery location shall be as defined in Exhibit A
hereto, entitled Statement of Work and all deliverable items shall be delivered
in accordance with Article 3 hereto, entitled Performance Schedule in
accordance with Exhibit A hereto, entitled Statement of Work and Exhibit B
hereto, entitled Technical Specifications.


 


C.             Any change to the delivery locations
specified in Exhibit A hereto, entitled Statement of Work and Exhibit B
hereto, entitled Technical Specifications shall constitute a contract change in
accordance with Article 25 hereto, entitled Changes.


 


HUGHES
AND GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


1





















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


Article 3.               Performance Schedule


 


The
Work, as defined in Article 1 hereto, entitled Scope of Work and as set
out in Exhibit A hereto, entitled Statement of Work shall be performed in
accordance with the schedule detailed in Exhibit A hereto, entitled
Statement of Work and Exhibit B hereto, entitled Technical
Specifications.  Such schedule shall be
adjusted on an equitable basis in respect of any delays attributable to any
events of excusable delay referenced in Article 20 of this Contract or delays
by Globalstar in acting or performing as required under this Contract including
any delay or failure to furnish the required equipment or property pursuant to Article 15
of this Contract or any delay by Globalstar in making the non-Contractor
provided elements of the Globalstar System (as defined in Article 11),
including the satellites, available for testing as required by this Contract.


 


Article 4.               Price


 


The
total Contract Value shall be a firm fixed-price One Hundred Million Eight
Hundred Eleven Thousand Two Hundred Twenty ($100,811,220) United States Dollars
for the Work which may be amended from time to time in accordance with this
Contract.  The pricing details and
payment plan are set forth in Exhibit C hereto, entitled  Pricing Schedule and Payment Plan.


 


Article 5.               Inspection and Acceptance


 


A.           All deliverable items specified in
Paragraph A of Article 2 hereof, entitled Delivery by Contractor, and
Contractor’s entitlement to the price specified in Article 4 hereof,
entitled Price, shall be subject to inspection and acceptance of such items by
Globalstar in accordance with this Article 5 and the relevant sections
of  Exhibit A, entitled Statement of
Work.


 


B.             Inspection and acceptance testing shall be in
accordance with the procedures and requirements specified in Exhibit A
hereto, entitled Statement of Work and Exhibit B hereto, entitled
Technical Specifications.  If the Work
fails to pass the relevant acceptance test Contractor shall reperform the Work
or repair or replace any deliverable item as is necessary to correct the
problem at which time the relevant acceptance test shall be repeated.  The foregoing process shall be repeated as
necessary until the relevant acceptance test has been successfully completed in
accordance with Section 6 of Exhibit A hereto, entitled Statement of
Work.  Upon completion of the relevant
acceptance test Contractor shall provide Globalstar with a written acceptance
test report in accordance with Section 6 of Exhibit A hereto,
entitled Statement of Work.  Globalstar
shall notify Contractor of its acceptance or rejection of the relevant Work
within fifteen (15) working days after delivery or, if applicable, upon
completion of the relevant acceptance test report.  In the event that no such notice is received
by Contractor from Globalstar within said fifteen (15) working day period, such
Work shall be deemed to be accepted by Globalstar.


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


2

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


C.             Provisional Acceptance of RAN.  Provisional Acceptance shall occur upon
successful completion of SySAT testing in accordance with Section 6.5 of Exhibit A
hereto, entitled Statement of Work. 
Provisional Acceptance shall be deemed to occur if either (i) no
confirmation that SySAT testing is successfully completed is received by
Contractor from Globalstar within fifteen (15) working days of receipt by
Globalstar of the test report or (ii) at any time prior to the completion
of SYSAT testing Globalstar puts the relevant deliverables into commercial
service.


 


D.    Final
Acceptance of RAN.  Promptly after
Provisional Acceptance, the Contractor and Globalstar shall mutually generate
and agree to a punch list of items required to fix any faults or bugs which
would prevent the RAN from entering commercial service.  Globalstar may add RAN related punch list
items during its own pre-commercial service system testing commencing after
SySAT upon mutual agreement with Contractor. 
The Contractor shall then work to close out and document all such punch
list items as expeditiously as possible. 
Once such punch list items are resolved and documented, Globalstar shall
review and either accept or comment on these punch list items within fifteen
(15) working days.  Final Acceptance
shall occur upon confirmation by Globalstar of closure of all punch list
items.  Final Acceptance shall be deemed
to occur if either (i) no rejection or confirmation is received by
Contractor from Globalstar within said fifteen (15) working day period or (ii) Globalstar
puts the relevant deliverables into commercial service.  Faults or bugs that do not rise to the level
of punch list items shall be promptly resolved by Contractor pursuant to the
warranty provisions of this Contract.


 


E.              Provisional Acceptance of User Terminal
Subsystem.  Provisional Acceptance shall
occur upon successful completion of User Subsystem Acceptance testing in
accordance with Section 6.6.2 of Exhibit A hereto, entitled Statement
of Work.  Provisional Acceptance shall be
deemed to occur if either (i) no confirmation that User Subsystem
Acceptance testing is successfully completed is received by Contractor from
Globalstar within fifteen (15) working days of receipt by Globalstar of the
test report or (ii) at any time prior to the completion of User Subsystem
Acceptance testing Globalstar puts the relevant deliverables into commercial
service.


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


3
















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


F.              Final Acceptance of User Terminal Subsystem.  Promptly after Provisional Acceptance, the
Contractor and Globalstar shall mutually generate and agree to a punch list of
items required to fix any faults or bugs which would prevent the Satellite Air
Interface Chip from being released into production.  Additionally the Contractor and Globalstar
shall mutually generate and agree to a punch list of items required to fix any
faults or bugs which would prevent the RTDM from being usable by
Globalstar.  The Contractor shall then
work to close out and document all such punch list items as expeditiously as
possible.  Once such punch list items are
resolved and documented, Globalstar shall review and either accept or comment
on these punch list items within fifteen (15) working days.  Final Acceptance shall occur upon
confirmation by Globalstar of closure of all punch list items.  Final Acceptance shall be deemed to occur if
either (i) no rejection or confirmation is received by Contractor from
Globalstar within said fifteen (15) working day period or (ii) Globalstar
puts the relevant deliverables into commercial service.  Faults or bugs that do not rise to the level
of punch list items shall be promptly resolved by Contractor pursuant to the
warranty provisions of this Contract.


 


Article 6.                                            Taxes and Duties


 


Globalstar
shall be responsible for all sales and use taxes and export or import duties or
value-added taxes or similar charges under any present or future national,
federal, state, or local laws which may arise and which become due by reason of
the performance of the Work under this Contract or any Subcontract hereunder
and by reason of the supply of any Globalstar equipment or other Globalstar
property to Contractor.  Globalstar will
pay and discharge, either directly to the governmental agency or as billed by
Contractor, the foregoing taxes, duties and charges.


 


Article 7.                                            Payment Terms


 


A.           The price
referred to in Article 4 hereof, entitled Price, shall be paid by
Globalstar in accordance with Exhibit C hereto, entitled Pricing Schedule
and Payment Plan, and with the terms of this Article.


 


B.            With respect to each amount
specified in Exhibit C hereto entitled Pricing Schedule and Payment Plan,
Contractor shall submit an invoice to Globalstar when the relevant milestone
has been completed.  Each invoice shall
contain or be accompanied by a written certification from Contractor that the
milestone event has been completed.


 


C.            Globalstar shall pay each
amount within thirty (30) days after Globalstar receives the invoice and
certification referred to in paragraph B of this Article 7 provided,
however, that if Globalstar reasonably concludes that the requirements for such
milestone event (as set forth herein) have not been fulfilled, then Globalstar
shall so notify Contractor in writing, including a description of Globalstar’s
basis for asserting that the milestone event has not been fulfilled.  In such event the 


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


4

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


applicable
payment shall not be made until within thirty (30) days after Globalstar has
determined that the requirements for such milestone event have been fulfilled.


 


Unless
otherwise notified in writing by Contractor, all transfers of funds to
Contractor in accordance with this Contract shall be sent by wire transfer to
the following bank account:


 


[*]


 


D.            All invoices
shall be submitted by email to [*] with email copy to Globalstar employees to
be identified at a later date.


 


E.              Any payment due from
Globalstar shall be deemed to have been paid when the funds are disbursed from
Globalstar’s bank into Contractor’s bank account referenced above.  If any payment is due on any day that is not
a business day, such payment shall be due on the succeeding business day.  A late payment charge, at an annual rate of
[*], will be applied to any payment not received by the due date thereof.


 


F.              Invoicing by Contractor and
payment for an early completion of a milestone is subject to Globalstar’s prior
written approval.


 


Article 8.                                            Contractor Deliverables, Title and
Assumption of Risk


 


A.           Title to all
deliverable items specified in Paragraph A of Article 2 hereof, entitled
Delivery by Contractor, shall pass to Globalstar upon delivery Ex Works.  The Contractor warrants to Globalstar that it
has and will deliver good title to all such deliverable items, free from any
claim, lien, pledge, mortgage, security interest, or other encumbrances,
including, but not by way of limitation, those arising out of the performance
of the Work.


 


B.            With respect to each such
deliverable item, the risk of loss or damage shall be borne by Contractor up to
the time of delivery into Globalstar’s custody pursuant to Article 2
hereof, entitled Delivery by Contractor. 
After such delivery, Globalstar shall bear the risk of loss or damage,
save for any loss or damage caused by Contractor or any of its subcontractors.


 


C.            Notwithstanding the passing
of title or documents and reports, Globalstar’s rights to use the information
contained therein shall be subject to Article 11 hereof, entitled
Intellectual Property Rights.


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


5

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


Article 9.                                            Warranty and Support


 


A.           Notwithstanding
any prior inspection or acceptance by Globalstar, Contractor warrants that:


 


(1)          All deliverable equipment
specified in Paragraph A of Article 2 hereof, entitled Delivery by
Contractor, shall be in new or like new condition when first delivered to
Globalstar and free from any defects in materials, workmanship and design;


 


(2)          All services shall be
performed in a skillful and workmanlike manner consistent with the best
practices of the industry; and


 


(3)          Deliverable items, including
hardware, software, firmware, services and documentation shall conform to the
requirements specified in this Contract, including Exhibit A entitled
Statement of Work  and Exhibit B entitled  Technical
Specifications.


 


B.            Exhibit D hereto
contains a detailed SOW with regard to the hardware warranty and software
maintenance services.  The hardware
warranty and software maintenance services obligations provided herein shall
run, unless extended in accordance with Article 30 hereof, for the
relevant periods specified in Section 10 of Exhibit A hereto entitled
Statement of Work.


 


C.            In the event of defective or
non-conforming Work, whether equipment, services, software, reports or
otherwise, Globalstar shall notify Contractor in writing that the Work is
non-conforming.  Such notice may be given
after commencement of the warranty period specified below.  In either case, the notice shall identify
those particulars in which the Work fails to conform. Globalstar shall have the
following remedies:


 


(1)          Globalstar may require
Contractor to correct or replace the defective or non-conforming Work at
Contractor’s expense.  The decision
whether the non-conforming Work is to be corrected or replaced shall be at
Contractor’s option.  If Contractor does
not correct or replace the Work within a reasonable period after notification
from Globalstar, or if Contractor fails to do so effectively, Globalstar may
have the correction or replacement undertaken by a third party, in which case
Contractor shall reimburse Globalstar for all direct reprocurement costs
reasonably and actually incurred by Globalstar.


 


(2)          Globalstar may elect not to
have the defective or non-conforming Work corrected or replaced, in which case
the Parties shall in good faith negotiate an equitable reduction in the price
and, to the extent Globalstar has already made payments in excess of the
reduced price, Contractor shall promptly refund that amount.


 


Transportation
and insurance costs for defective parts returned to the Contractor shall be at
Globalstar’s charge and transportation and insurance costs for parts replaced
or repaired by the Contractor shall be at Contractor’s charge.


 


In
the event an on-site intervention is needed (e.g., fault cannot be located
remotely by the Contractor or failure of a non-replaceable unit), the
Contractor shall upon request provide on-site support at Globalstar’s
additional cost in accordance with the time and 


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


6

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


materials
pricing set forth in Exhibit C hereto entitled Pricing Schedule and
Payment Plan.


 


D.    Any corrections
or replacements made pursuant to this Article 9 shall be subject to Article 8
hereof, entitled Contractor Deliverables, Title and Assumption of Risk.  With respect to any component that is
corrected or replaced, the warranty period specified in this Article shall
be suspended from the date of notification of the defect by Globalstar and
shall recommence upon the date of satisfactory completion of the correction or
replacement for the unexpired portion of the warranty period.  Where such correction or replacement renders
the Work or any part thereof non-functional, the warranty period shall be
similarly extended for the Work or any part thereof.  Notwithstanding the foregoing, any component
that is corrected or replaced shall have a warranty period that is the greater
of three (3) months or the unexpired portion of the warranty period.


 


E.     The rights and
remedies of Globalstar provided in this Article 9 shall be in addition to,
and without prejudice to, or forfeiture of, any other rights and remedies
Globalstar may have under this Contract (including, but not limited, to any
warranty and maintenance plan) or at law or equity.


 


F.     Except as
specifically set forth in this Contract, Contractor neither makes nor assumes
any liability under any warranties (whether express, implied, or statutory) on
or with respect to Contractor deliverables and services to be provided under
this Contract, including, without limitation, any implied conditions or
warranties of merchantability or fitness for a particular purpose.


 


G.    Notwithstanding
the foregoing, Contractor shall not be obligated to provide the warranty
services set forth herein if Globalstar has not satisfied all payment
obligations due and outstanding as of the date of any claim by Globalstar under
the above warranty.  If Globalstar has
due but unpaid obligations, Contractor may, at its sole discretion and without
liability to Contractor, in addition to demanding that Globalstar fulfills all
payment obligations contained herein:  (i) demand
full payment for any repairs of Work covered by the warranty at Contractor’s
standard out-of-warranty rates;  (ii) reject
Work sent for repairs;  or (iii) hold
any Work sent for repairs until Globalstar fulfills all payment obligations
contained herein.  None of the foregoing
options elected by Contractor shall result in an increase in the duration of
the warranty period.


 


Article 10.                                     Access to Work in Progress


 


A.    To the extent
necessary to implement this Article, Contractor shall pass through the
provisions hereof into all subcontracts with suppliers of critical path items.


 


B.    The Contractor
shall provide for design and progress review meetings with Globalstar, and
submit reports and documentation, in accordance with Exhibit A 


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


7

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


hereto,
entitled Statement of Work and Exhibit B hereto, entitled Technical
Specifications.


 


C.            Globalstar shall have the
right, at all reasonable times during the performance of this Contract, to
monitor the Work in progress at the plants of Contractor, provided that Globalstar
gives reasonable notice to Contractor. 
Visits shall be on a non-interfering basis subject to Contractor’s
standard security and confidentiality procedures.


 


Article 11.                                     Intellectual Property Rights


 


A.           Definitions


 


As
used in this Contract, the following terms shall have the definitions
indicated:


 


(1)         “Contractor Background IP”
means all IP owned or controlled by Contractor as of EDC, and all IP conceived
or developed by Contractor after EDC (other than in performance under this
Contract), which is incorporated in or necessary for the use (as provided for
herein) of the deliverable items being provided pursuant to this Contract.


 


(2)         “Contractor Foreground IP”
means all IP conceived or developed by or on behalf of Contractor arising from
Contractor’s performance under this Contract, which is incorporated in or
necessary for the use of  (as provided
for herein) the deliverable items being provided pursuant to this Contract.


 


(3)         “Gateway System” means the
Radio Access Network and other network deliverables (other than the Satellite
Air Interface Chips) being developed and provided by Contractor pursuant to
this Contract.


 


(4)         “Globalstar IP” means all IP
owned or controlled by Globalstar identified, without limitation, as being “granted”
as set forth in Exhibit E hereto entitled Globalstar Patent Portfolio, and
all IP conceived and developed by Globalstar after EDC, the use of which is
necessary for Contractor’s performance under this Contract.


 


(5)         “Globalstar System” means
the system including satellites, Gateway System, ground control network,
network control centers and User Terminals operated by Globalstar to provide
low earth orbit satellite based wireless telecommunication services worldwide.


 


(6)      “Intellectual Property” or “IP”
means all information, data and technology (including all ideas, discoveries,
inventions, methods, techniques and processes, designs, improvements and
innovations, all specifications, requirements, software and other works of
authorship (including documentation such as manuals, drawings and documents),
and all know-how), whether or not patentable and whether or not reduced to
practice, and all associated rights in and to any patents and patent
applications, copyrights and trade secrets, and all other intellectual and industrial



 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


8

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


H37813
(3/08)


 


property
rights and all forms of protection of any similar nature (including all such
rights in software) which may subsist in any part of the world for the full
term of such rights including any extension to the term of such rights.


 


(7)         “Joint IP” means all IP
conceived and developed through material contributions by both Contractor and
Globalstar in performance under this Contract.


 


(8)         “User Terminal” means a
mobile satellite terminal used for subscriber communication over the Globalstar
satellite network.


 


(9)         “Satellite Air Interface
Chip(s)” means the chip(s) being developed by Contractor pursuant to this
Contract that will make up the satellite baseband portion of the User Terminal.


 


B.             Ownership of
Intellectual Property Rights


 


(1)          All Contractor Background IP shall remain the sole
and exclusive property of Contractor.


 


(2)          All Globalstar IP shall remain and be the sole and
exclusive property of Globalstar.


 


(3)          All Contractor Foreground IP
shall be exclusively owned by Contractor.


 


(4)          All Joint IP shall be
jointly owned by the Parties. Joint ownership shall mean each Party having an
equal, undivided interest in and to the Joint IP, without any obligation of
notice or accounting to the other Party.


 


C.             License Rights


 


(1)          Grant by Contractor:  Subject to fulfillment by Globalstar of its
obligations under this Contract, Contractor hereby grants to Globalstar a
worldwide, non-exclusive, perpetual, irrevocable, non-transferable,
non-assignable, fully paid-up license to use, duplicate (technical data,
software in executable form and documentation) and disclose:  (i) the Contractor Background IP and the
Contractor Foreground IP associated with the Gateway System solely for the
purposes of the use, operation and maintenance of the Globalstar System and (ii) the
Contractor Background IP and the Contractor Foreground IP associated with the
Satellite Air Interface Chips solely for the purposes of the incorporation of
the Satellite Air Interface Chips into User Terminals, and the manufacture,
use, sale, offer for sale, importation, maintenance and support of User Terminals
(provided such User Terminals include Satellite Air Interface Chips provided by
or on behalf of Contractor pursuant to this Contract).  The foregoing license rights include the
right of Globalstar to sublicense to third parties and to contract with a third
party for the purposes set forth in items (i) and (ii) above.


 


(2)          Grant by Globalstar:  Globalstar hereby grants to Contractor a
worldwide, non-exclusive, perpetual, irrevocable, non-transferrable,
non-assignable,


 


HUGHES AND
GLOBALSTAR CONFIDENTIAL AND PROPRIETARY


 


9

















 


Contract
for Radio Access Network (RAN) and User Terminal Subsystem


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(3/08)


 


non-sublicensable,
fully paid-up right and license to use and have used the Globalstar IP for the
sole and exclusive purpose of performing under this Contract.


 


(3)          Satellite Air Interface Chip Software and Firmware
License Option:  If  Globalstar exercises the Satellite Air
Interface Chip Software and Firmware License Option referenced in Exhibit C,
in consideration of  the payment by
Globalstar of the license fees referenced below and subject to Globalstar being
not in breach of Contract, Contractor shall grant to Globalstar a worldwide,
non-exclusive, perpetual, irrevocable (except in the event Globalstar fails to
pay the license fees referenced below), non-transferable, non-assignable right
and license to use the Satellite Air Interface Chip software and firmware and
Interface Documentation developed by Contractor under this Contract on an “as
is” basis solely for the purpose of incorporating such Satellite Air Interface
Chip software and firmware in a third party designed and manufactured satellite
air interface chip.  For the purposes
hereof “Interface Documentation” shall mean all documents necessary for incorporating
the Satellite Air Interface Chip software and firmware in a third party
designed and manufactured satellite air interface chip.  Contractor and Globalstar shall enter into a
separate mutually agreed license agreement in the event this option is
exercised.  Such license agreement shall
be consistent with the terms of this Contract and shall include, without
limitation, customary provisions relating to reporting, record keeping and
audit rights.  The applicable license
fees are specified in Exhibit C. 
This license grant shall become revocable if Globalstar fails to pay the
license fees as required under this Contract. 
For the avoidance of doubt,


 


(i)                                    such license
shall only relate to Satellite Air Interface Chip software or firmware or
Interface Documentation developed by Contractor hereunder and shall not include
any rights to any third party commercial off the shelf software or firmware
such as any operating system employed in the Satellite Air Interface Chip
(including, without limitation, VxWorks); 
and


 


(ii)                                 the foregoing
license rights include the right of Globalstar to sublicense to third parties
and to contract with a third party solely for the purpose of incorporating the
Satellite Air Interface Chip software and firmware in a third party designed
and manufactured satellite air interface chip.


 


D.            Escrow


 


(1)         Promptly upon Final Acceptance and subject to the
Contractor having the rights to the source code,
Contractor shall place copies of the source code for all software provided with
or incorporated in the RAN and UT Subsystem (“Escrow Materials”) with a third
party escrow agent (“Escrow Agent”), subject to the terms and conditions of an
escrow service agreement between Globalstar, Contractor and the Escrow Agent
(the “Escrow Services Agreement”) to be negotiated and entered into in good
faith between Globalstar, Contractor and the Escrow Agent.


 


(2)          Release of the Escrow Materials to Globalstar shall
be subject to the terms and conditions of the Escrow Services Agreement, and
subject to the occurrence of 


 


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certain
agreed upon release conditions to be set forth therein (including the failure
of Contractor to maintain and support the software pursuant to any maintenance
and support obligations of Contractor under this Contract, the insolvency or
bankruptcy of Contractor, or termination of this Contract by Globalstar for
Contractor default in accordance with Article 18).


 


(3)          In the event of the undisputed occurrence of one or
more of the release conditions to be set forth in the Escrow Services
Agreement, Globalstar is hereby granted a perpetual, irrevocable, worldwide,
non-exclusive, non-transferrable, fully paid-up license to use the Escrow
Materials and the associated Contractor Background IP and Contractor Foreground
IP for the sole purposes of the continued maintenance and support of the
Gateway System (including the right to contract with a third party for such
purposes).


 


(4)         Globalstar may select the
escrow agent of its choice, subject to the written approval of Contractor,
which shall not be unreasonably withheld, and Globalstar shall be responsible
for all fees of the Escrow Agent under the Escrow Services Agreement.


 


Article 12.                                     Restriction of Hazardous Substances (“ROHS”)


 


A.           Deliverable
Satellite Air Interface Chips shall comply with environmental standards
required by Directive 2002/95/EC of the European Parliament and of the Council
of 27 January 2003 on the restriction of the use of certain hazardous
substances in electrical and electronic equipment (the “ROHS Directive”)
including any amendments by Commission Decision, Joint Declaration of EU authorities
and Directive 2003/108/EC of 8 December 2003 as well as any statute or
statutory provision or subordinate legislation introduced or modified from time
to time to implement such Directive into EU Member State Law.


 


B.            Contractor shall take all
reasonable steps and exercise all due diligence needed to comply  with the ROHS Directive, including without
limitation, utilizing only ROHS-compliant subcontractors, auditing of
subcontractors for compliance, establishing quality assurance processes and
procedures for compliance, and maintaining proper documentation of
compliance.  At the earliest opportunity
but in any case no later than shipment of the first Satellite Air Interface
Chip, Contractor shall provide Globalstar with (a) Certificate of
Compliance with the ROHS Directive;  and (b) Material
Composition Declarations from suppliers in accordance with Forms IPC-1752-1
v1.0 and IPC-1752-2 v1.0.  Contractor
shall keep records for traceability and compliance documentation purposes for
at least five (5) years.


 


C.             Any Satellite
Air Interface Chip that is determined to be noncompliant by proper EU national
authorities is considered a defective product. 
Contractor shall immediately, at the sole option of Globalstar, either (i) give
full refund to Globalstar of the purchase price of any defective product or (ii) at
no charge to Globalstar repair or replace any defective product with a
compliant product.


 


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D.           Contractor shall defend,
indemnify, release and hold harmless Globalstar from any and all third party
claims and resulting costs, demands, fines, liabilities, loss penalties,
arising out of or as a result of a breach of this clause.


 


E.             Upon request, Contractor
will furnish to Globalstar, as soon as reasonably practical but in any event
within 15 business days of such request, any information and assistance as
Globalstar, in its reasonable opinion, requires to comply with Globalstar’s
obligations under the ROHS Directive, including without limitation, the
following:


 


(a)          information or evidence of
compliance as may from time to time be required by any EU Member State Government
relating to the Satellite Air Interface Chips;


(b)         Product or component
design;  and


(c)          EU audit requests of Buyer


 


Article 13.            Intellectual Property Rights
Indemnity


 


A.          This Article 13 shall
apply solely with respect to all claims that the intellectual property rights
of a third party are infringed by the manufacture, sale, offer for sale, or use
of any item delivered by Contractor pursuant to this Contract.  For the sake of clarity, this applies to
claims that Contractor Background IP or Contractor Foreground IP infringes the
intellectual property rights of a third party.


 


B.            The Contractor hereby
indemnifies and agrees to defend, at its own expense, any claim against
Globalstar and to pay any royalties and other costs associated with the
settlement of such claim and any damages and costs awarded as a result of any
legal proceedings based on such claim. 
This obligation shall be contingent upon Globalstar giving Contractor
prompt written notice of such claim, all necessary authority to defend or settle
the claim on its behalf and reasonable cooperation and assistance and such
relevant information as is available to it.


 


C.             If, as a result
of any claim to which this Article 13 applies, the manufacture or delivery
of any item or service to be delivered or otherwise provided pursuant to this
Contract is enjoined, or the sale or use of any item delivered under this
Contract is enjoined after delivery, Contractor agrees to do the following in
the order stated:


 


(1)         To use reasonable efforts,
to include where necessary the payment of commercial royalty, to negotiate a
license or other agreement with the claimant to resolve the alleged
infringement; or


 


(2)         where applicable, to modify
the item or substitute a suitable item so that the modified or substituted item
is not subject to the enjoinment; or if (1) and (2) cannot be
effected by Contractor’s reasonable and diligent efforts,


 


(3)          repurchase enjoined items at their then current
value of Globalstar’s audited accounts.


 


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D.           The Contractor agrees that
the provisions of this Article 13 shall apply to any item modified by Contractor
pursuant to this Article 13.C(2).


 


E.             Notwithstanding the above,
Contractor will not be liable for any such indemnity and defense obligations
for infringement claims arising from (i) Contractor’s compliance with
Globalstar’s designs, requirements or specifications, where such designs, requirements or specifications form the basis for
the infringement claim (as opposed to an infringement claim arising primarily
from Contractor’s chosen implementation), or (ii) use of any
non-infringing item provided by Contractor in combination with products not
supplied by Contractor, or (iii) the modification by Globalstar or a third
party of any item provided by Contractor (excluding a modification made by or
on behalf of Contractor), where the infringement claim would have been avoided
but for such modification, or (iv) infringement of Intellectual Property
Rights owned or controlled by Qualcomm, Inc. (such claims being
collectively referred to herein as “Other Claims”).  Globalstar will indemnify Contractor from any
and all damages and costs (including settlement costs) finally awarded or
agreed upon for infringement of any United States patent or copyright in any
lawsuit resulting from Other Claims, and for reasonable expenses incurred by
Contractor in defense of such lawsuit if Globalstar does not undertake the
defense thereof.


 


F.             This indemnity is in lieu of
any other liability, whether or not based on indemnity or warranty, express or
implied, with respect to intellectual property claims.


 


Article 14.            Indemnification and Insurance


 


A.          Contractor shall indemnify
and hold harmless Globalstar, and its subsidiaries and affiliates, and its
subcontractors (if any), their respective officers, employees, agents, servants
and assignees, or any of them (collectively “Globalstar Indemnitees”), from any
direct or indirect loss, damage, liability and expense (including reasonable
attorneys fees), on account of loss or damage to property and injuries,
including death, to all persons, including but not limited to employees or agents
of Contractor, its subcontractors and the Globalstar Indemnitees, and to all
other persons, arising from any occurrence caused by any negligent act or
omission or willful misconduct of Contractor, the subcontractors or any of
them.


 


(1)  At Contractor’s expense, Contractor
shall defend any suits or other proceedings brought against the Globalstar
Indemnitees on account thereof, and shall pay all expenses and satisfy all
judgments which may be incurred by or rendered against them, or any of them, in
connection therewith.


 


(2)  Contractor shall have the right to
settle any claim or litigation against which it indemnifies hereunder.  Further, the Globalstar Indemnitees shall
provide to Contractor such reasonable cooperation and assistance as Contractor
may request to perform its obligations hereunder.


 


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B.             Globalstar
shall indemnify and hold harmless Contractor, and its subsidiaries and
affiliates, its Subcontractors, their respective officers, employees, agents,
servants and assignees, or any of them (collectively “Contractor Indemnitees”),
from any direct or indirect loss, damage (including damage to property and injuries,
including death), liability and expense (including reasonable
attorneys fees) incurred by any third party (including employees or agents of Globalstar
and Contractor Indemnitees) and arising from any occurrence
caused by any negligent act or omission or willful misconduct of Globalstar, its officers, employees,
agents, consultants, servants and assignees.


 


(1)  In addition, Globalstar shall waive any claim against and
shall indemnify and hold harmless Contractor Indemnitees from any direct or
indirect loss, damage (including damage to property and injuries, including
death), liability and expense incurred by any third party and arising from use,
operation or performance of the deliverable items after Final Acceptance,
including as a result of modification or improvements made by Globalstar.


 


(2)  Globalstar shall, at Globalstar’s
expense, defend any suits brought against the Contractor Indemnitees referred
to above and shall pay all expenses and satisfy all judgments which may be
incurred by or rendered against them, or any of them, in connection
therewith.  Globalstar shall have the
right to settle any claim or litigation against which it indemnifies hereunder.  Further, the Contractor Indemnitees shall provide
to Globalstar such reasonable cooperation and assistance as Globalstar may
request to perform its obligations hereunder.


 


C.            Contractor shall, at its own
expense, provide and maintain insurance which shall cover all Work in Process
(including all Globalstar’s property while in Contractor’s custody) against
physical loss or damage on an “all risks” property insurance basis, including
coverage for the perils of flood or earthquake while in or about Contractor’s
and its subcontractors’ premises, while at other premises which may be used or
operated by Contractor for construction purposes.


 


(1)  The amount of insurance shall be
sufficient to cover the full replacement value of all Work. Upon request by
Globalstar, Contractor will provide certificate of insurance to
Globalstar.  Additionally, Contractor
will add Globalstar as an additional insured under the All Risks insurance as
far as Globalstar’s interests may appear.


 


(2)  The insurance may be issued with
deductibles, which are consistent with Contractor’s current insurance
policies.  The amount of any loss up to
the value of the deductible level, or not otherwise covered by the insurance,
shall be borne by Contractor.


 


In
addition, Contractor shall, at its own expense, provide and maintain a
Commercial General Liability Insurance Policy (“CGL Policy”) which shall cover
property damage and injuries, including death, caused to third parties.  Upon written request by Globalstar,
Contractor will provide a certificate of insurance to Globalstar.  Contractor
shall use its reasonable best efforts to add Globalstar as additional insured
under such CGL Policy.


 


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Article 15.            Globalstar-Furnished Property and
Facilities


 


A.          With respect to all
equipment or other property furnished to Contractor by Globalstar pursuant to Exhibit A
hereto, entitled Statement of Work and Exhibit B hereto, entitled
Technical Specifications, the following terms and conditions shall apply:


 


(1)         The Contractor shall
exercise all reasonable care to ensure that such property is suitable for the
purpose intended in connection with the performance of the Work under this
Contract.  If Contractor is not so
satisfied, it shall give Globalstar written notice to that effect as soon as
possible.


 


(2)         The Contractor shall ensure
that such property is used solely in the performance of this Contract.


 


(3)         Title to such property shall
at all times remain with Globalstar, and Contractor shall ensure that no claim,
lien, pledge, mortgage, security interest, or other encumbrance attaches to
such property as a result of any act or omission of Contractor or its
subcontractors.


 


(4)         The Contractor shall return
such property to Globalstar when it is no longer required in connection with
the performance of any Work under this Contract, or in the event of termination
of this Contract.  The costs associated
with returning the property shall be borne by Globalstar.


 


(5)         The Contractor shall bear
the risk of loss of or damage to such property from the time that it arrives on
the premises of Contractor or any of its subcontractors and for so long as it
remains in their custody, save for any loss or damage caused by Globalstar or
its agents or representatives.  When the
property is returned to Globalstar pursuant to Paragraph A(4) of this
Article 15, the risk of loss or damage while in transit shall be borne by
Globalstar.


 


B.            With respect to any
facilities provided by Globalstar or any of its other contractors pursuant to Exhibit A
hereto, entitled Statement of Work and Exhibit B hereto, entitled
Technical Specifications, whether for installation of the items to be delivered
by Contractor under this Contract or for any other purpose, Contractor shall
exercise all reasonable care to ensure that such facilities are suitable for
the purpose intended.


 


Article 16.            Confidentiality


 


A.           Each Party
shall during the term of this Contract and for a period of five (5) years
thereafter, keep secret and confidential all know-how or other business,
technical or commercial information, in connection with this Contract disclosed
to it by the 


 


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other
Party or otherwise belonging to the other Party (and shall ensure that any
employees or subcontractors are similarly bound) and shall not disclose the
same to any person save to the extent necessary to perform its obligations in
accordance with the terms of this Contract. 
All such information shall be identified as confidential at the time it
is so supplied or shall be such that should reasonably have been understood by
the receiving Party (based on the circumstances of disclosure or the nature of
the information itself) to be proprietary and confidential to the disclosing
Party.  For the sake of clarity, each
Party shall have the right to use, duplicate and disclose, as permitted under
this Article, the other Party’s confidential information as required to fulfill
the Party’s requirements under this Contract, subject to the nondisclosure and
use restrictions provided herein.


 


B.            Article 11 hereto,
entitled Intellectual Property Rights shall take precedence over the provisions
of this Article to the extent that there is any inconsistency.


 


C.             The foregoing
provisions of this Article shall not apply to know-how and information
which:


 


(1)          is or becomes public knowledge without breach of
this Contract;


 


(2)          is already known to the receiving Party at the time
of its disclosure by the disclosing Party and was not otherwise acquired by the
receiving Party from the disclosing Party under any obligations of confidence;


 


(3)          is independently developed by Contractor or
Globalstar, which fact can be shown by competent evidence; or


 


(4)          Globalstar or Contractor is compelled by legal
process or government regulation or order to disclose, provided that the
disclosing Party is given prompt notice of any proposed release of information
under this sub-clause and that the disclosing Party be given ample opportunity
to engage in legal action to resist and/or restrict any such disclosure.


 


Article 17.            Public Release of Information


 


A.           During the term
of this Contract, neither Party, nor its affiliates, subcontractors, employees,
agents and consultants, shall release items of publicity of any kind including,
without limitation, news releases, articles, brochures, advertisements,
prepared speeches, company reports or other information releases related to the
Work performed hereunder, including the denial or confirmation thereof, without
the other Party’s prior written consent.


 


B.             Nothing
contained herein shall be deemed to prohibit either Party from disclosing this
Contract, in whole or in part, or information relating thereto (i) as may
be required by the rules and regulations of a government agency with
jurisdiction over the disclosing Party or a stock exchange on which the
disclosing Party’s shares are 


 


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then
listed, (ii) as may be required by a subpoena or other legal process (iii) in
any action to enforce its rights under this Agreement, (iv) to its lenders
under appropriate assurances of confidentiality for the benefit of the
disclosing Party or (v) to its auditors, attorneys and other professional
advisors in the ordinary course, provided that such auditors, attorney and
advisors have contractual or professional obligations to maintain the
confidentiality of the disclosed material. 
The disclosing Party shall use reasonable commercial efforts to disclose
only such information as it believes in good faith it is legally required to
disclose pursuant to clauses (i) or (ii), above, and will seek, to the
extent reasonably available under applicable rules, to obtain confidential treatment
for any information either Party reasonably considers trade secrets and that is
required to be disclosed.  To the extent
practicable, the disclosing Party shall provide the other Party with a
reasonable opportunity in advance of disclosure to request redactions or
deletions of specific terms and provisions of the Contract and shall
accommodate those requests to the extent reasonably consistent with applicable
confidential treatment rules.


 


C.             Within a
reasonable time prior to a proposed issuance of news releases, articles,
brochures, advertisements, prepared speeches, and other such information
releases concerning the Work performed hereunder, the Party desiring to release
such information shall  request the written
approval of the other Party concerning the content and timing of such
releases.  The Parties anticipate the
issuance of press releases in connection with the execution of the Contract,
which press releases shall be subject to approval by both Parties prior to
release.


 


Article 18.            Termination for Cause


 


A.           Either Party
shall have the right to terminate this Contract, in whole or in part, by notice
(the “Termination Notice”) in writing to the other Party in the event that:


 


(1)         the other Party defaults in
the performance  of any of its material
obligations hereunder and (in the case of a remediable breach) fails to make
significant progress in resolving same within sixty (60) working days (the “Cure
Period”) of being requested by written notice (the “Default Notice”) to do so;
or


 


(2)         the other Party becomes
insolvent or the subject of proceedings under any law relating to bankruptcy or
the relief of debtors or admits its inability to pay its debts as they become
due.


 


The Termination Notice will be effective immediately
without further period for cure.


 


In
the event Globalstar terminates Contractor pursuant to this Article prior
to completion of Preliminary Design Review, then, on demand from Globalstar,
Contractor will refund all payments pertinent to the terminated Work made by
Globalstar less any liquidated damages (if applicable) pertinent to the
terminated Work paid by Contractor. 
Contractor shall make this refund within thirty (30) days of receipt of
Globalstar’s Termination Notice.  Such
refund shall be Globalstar’s sole and exclusive remedy for such termination.


 


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Alternatively
to the above paragraph or if such termination for cause occurs after completion
of Preliminary Design Review, upon payment by Globalstar to Contractor of all
amounts owing up to the date of the Termination Notice Globalstar may elect to
take over the completion of the terminated work either itself or via a third
party in which case Contractor shall be liable for any reasonable cover costs
for such work.  Under this scenario,
Contractor shall promptly provide to Globalstar access and custody to the work
in process, the applicable templates and other information related to
Contractor Foreground IP and all the License Rights granted by Contractor under
Article 11 hereof, entitled Intellectual Property Rights, necessary for
Globalstar to proceed under this scenario. 
In addition, Contractor shall provide up to twelve (12) months of
termination assistance to Globalstar or its designee at Globalstar’s request
and reasonable expense (not to exceed Contractor’s time and materials rate
specified in Exhibit C hereto).


 


B.             If Globalstar
issues a Termination Notice to Contractor pursuant to this Article 18 and
it is subsequently determined that Contractor was not in breach, the rights and
obligations of the Parties shall be the same as if Globalstar had terminated
for convenience pursuant to Article 19 hereof, entitled Termination for
Convenience, unless the Parties mutually agree to reinstate the Contract.


 


Article 19.            Termination for Convenience/Stop
Work Orders


 


A.           Globalstar may
terminate this Contract, in whole or in part, for Globalstar’s convenience, at
any time prior to completion, upon thirty (30) days written notice to the
Contractor.  In such case, Contractor
shall immediately stop Work as directed in the termination notice and make its
reasonable best efforts to mitigate costs.


 


B.             In the event of
such termination by Globalstar, the termination charges shall be determined by
good faith negotiations between Globalstar and Contractor or, if agreement
cannot be reached, pursuant to Article 24 hereof, entitled Dispute
Resolution.  In making such
determination, the following principles shall be applied:


 


(1)          The total termination charges shall not exceed the
sum of:


 


(a)          Direct and indirect costs (including overhead but
excluding any profit element) reasonably incurred by Contractor in connection
with the performance of the Work prior to termination, other than those costs
referred to in Paragraph B(1)(c) of this Article 19.  Such costs shall be determined [*].


 


(b)         A profit element representing [*] of the costs in
Paragraph B(1)(a), of this Article 19.


 


(c)          Reasonable costs incurred by Contractor in
settlement with subcontractors and suppliers as a result of Globalstar’s
termination.  With respect to any
proposed 


 


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settlement
involving an amount in excess of [*], Contractor shall advise Globalstar, and
shall not enter into any binding settlement until Globalstar has approved the
proposal, or until thirty (30) days have elapsed from the date when such advice
was furnished to Globalstar, whichever first occurs.


 


C.            The termination charges
determined pursuant to Paragraph B of this Article 19 shall be
reduced by the following:


 


(1)          Any amounts previously paid by Globalstar to
Contractor with respect to the performance of the Work prior to
termination.  To the extent such amounts
previously paid by Globalstar exceed the termination charges due, Contractor
shall refund the difference to Globalstar.


 


(2)          Amounts representing the resale, reuse, or salvage
value to Contractor, or to its subcontractors and suppliers, of items that
Globalstar has not taken possession of.


 


D.           In no event will the
calculation of charges exceed the total Contract Value or conflict with the
terms of this Contract with respect to adjustments.


 


E.             Title to items that
Globalstar has taken possession of shall transfer to Globalstar after payment.


 


F.             Stop Work Orders


 


(1)         Globalstar may, at any time,
upon reasonable prior written notice to Contractor (“the Stop Work Order”),
direct Contractor to suspend performance of the Work for a maximum cumulative
duration of six (6) months and with a maximum number of suspensions of two
(2).  Said Stop Work Order shall specify
the date of suspension and the estimated duration of the suspension.  Upon receiving any such Stop Work Order,
Contractor shall promptly suspend further performance of the Work to the extent
specified, and during the period of such suspension shall properly care for and
protect all Work in Process and materials, supplies, and equipment Contractor
has on hand for performance of the Work.


 


(2)         Globalstar may, at any time
during the stop Work, either (a) direct Contractor to resume performance
of the Work by written notice to Contractor, and Contractor shall resume
diligent performance of the Work, provided that (x) the Delivery Schedule
is adjusted to reflect the stop Work and the time required by Contractor to
recommence performance, (y) other affected provisions of the Contract
shall be adjusted, and (z) Contractor is compensated for its Work stoppage costs
as defined in Article 19F(3) below; or (b) terminate the
Contract for convenience in accordance with the foregoing provisions of this Article 19
in which case the costs incurred by Contractor and its subcontractors as a
result of the stop Work as defined below shall be added to the termination
charges to be paid pursuant to the foregoing provisions of this Article 19.


 


(3)        The Contract Value shall be
equitably adjusted to compensate Contractor for actual costs reasonably
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suspension
and resumption of Work plus a markup of [*]. 
Contractor shall invoice Globalstar for such costs, and Globalstar shall
pay such invoice within thirty (30) Days from the date of invoice.  Invoices will not be issued more frequently
than one (1) per month during a stop Work. 
If after a period of 6 months from receipt of a Stop Work Order,
Globalstar does not direct Contractor to resume Work, Globalstar shall be
deemed to have terminated the Contract for convenience under the foregoing
provisions of this Article 19 and the applicable termination charges shall
apply.


 


Article 20.            Excusable Delay


 


Contractor
will be excused for delays or interruptions in the provision of Work and shall
have no liability as a result thereof when such delays or interruptions (i) are
caused by Globalstar, or (ii) are otherwise beyond the reasonable control
of Contractor, including but not limited to war (whether or not actually
declared), sabotage, insurrection, rebellion, riot or other act of civil
disobedience, act of a public enemy, failure of or delay in transportation, any
governmental act, judicial action, labor dispute, shortage of labor, fuel raw
material or machinery, fire, accident, explosion, epidemic, quarantine, storm,
flood, earthquake, or other Acts of God (“Force Majeure”).  The Parties specifically agree that rain,
snow or other ordinary weather conditions (excluding tornadoes, hurricanes, and
other major storms) do not constitute Force Majeure conditions.  If any such contingency occurs, Contractor
may allocate resources among Contractor’ customers as it deems appropriate and
the delivery requirements of this Agreement will be amended accordingly.


 


Article 21.            NOT
USED.


 


Article 22.            Governmental Authorizations


 


A.           Gateway
Licenses


 


Globalstar shall be responsible for obtaining and
complying with all national authorizations or licenses as may be required to
introduce the RAN in its Gateways.  This
includes, but is not limited to, obtaining and maintaining any license,
permits, and/or other authorizations of any kind required for installation,
maintenance, testing, or operation of the Work, or any portion thereof,
including services related thereto. Globalstar shall pay all costs of such
licenses, permits and authorizations and all costs and expenses incurred in
obtaining and maintaining them. Globalstar’s obligation to pay Contractor shall
not in any manner be waived by delay or failure to secure or renew, or by the
cancellation of, any required licenses, permits or authorizations.


 


B.             Export
Control Regulations


 


(1)          It is expressly agreed that the execution of this
Contract and the subsequent delivery of the Contractor deliverables will be
subject to all applicable export controls imposed or administered by the U. S.
Government including but not limited to the export of equipment, software and
technical data (including services).  The
Parties 


 


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shall
comply with all applicable U.S. export control laws and regulations and with
all applicable administrative acts of the U.S. Government pursuant to such laws
and regulations.


 


(2)          Performance by Contractor under this Contract is
subject to appropriate authorization by the U.S. Government as may be required,
including receipt and continued effectiveness of any export
privileges/licenses.


 


(3)          For work in the U.S. involving U.S. persons (defined
as U.S. citizens and U.S. lawful permanent residents), export licenses or other
export authorizations will not be required.


 


(4)          Contractor shall submit requests for commodity
classifications for the RAN and UT Subsystem hardware, software, firmware,
technical data and encryption algorithms as may be required under the Export
Administration Regulations (“EAR”) of the U.S. Department of Commerce, Bureau
of Industry and Security (“BIS”).  As
applicable, Contractor shall submit requests for authorization to use license
exceptions.  Globalstar shall cooperate
with Contractor to obtain such commodity classifications and authorizations,
including providing Contractor with any required information in Globalstar’s
possession.  Contractor agrees to provide
copies of such requests and the formal determination (including, as applicable,
identification of all Export Classification Control Numbers (“ECCNs”) and all
cases of No License Required (“NLR”) and License Exception) of BIS to Globalstar.  Once BIS has issued a formal determination,
any use of such classifications and/or license exceptions by Globalstar shall
be without recourse to Contractor, and shall be at Globalstar’s own risk.  Contractor assumes no liability for any
damages whether direct, consequential, incidental, or otherwise, that may be
suffered by Globalstar as a result of Globalstar’s using or relying upon such
classifications or license exceptions for any purpose whatsoever.


 


(5)          If any Contractor deliverable technical data or
software contains export-controlled encryption algorithms or other export
controlled technology, Contractor will so notify Globalstar by affixing a
proper and prominent legend reflecting same on the medium containing such
technical data or software (e.g., CD-ROM or document).  Any such deliverable will be delivered by
Contractor only directly to Globalstar, notwithstanding any other delivery
requirements in this Contract.


 


(6)          To the extent a U.S. export license is required for
RAN and UT Subsystem hardware, software, firmware, or technical data
deliverables, Hughes will apply for the required U.S. export license and will
export such deliverables in accordance with the export license as approved by
BIS.


 


(7)          Globalstar agrees and acknowledges that Contractor
will not supply either directly or indirectly through third party sales
channels or otherwise, any equipment or services (i) to any Non-US
military organization or intelligence organization; (ii) which will be
used for any military or intelligence applications, whether pursuant to a dual
civilian/military or intelligence application or otherwise; or (iii) which
will otherwise


 


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be located on or
used in support of any military or intelligence installation or base.  Globalstar further agrees and acknowledges
that such prohibition shall apply to any purchase and sale or resale of
Contractor supplied goods (including third party goods), Contractor supplied
information or Contractor equipment or services under this or any other
agreement that Contractor may enter into with Globalstar in the future.  Globalstar agrees to inform Contractor in the
event that Globalstar becomes aware that the supply or delivery of Contractor
equipment by Contractor, Globalstar or any third party would be in
contravention of the aforementioned prohibition.  In the event that Contractor has reason to
believe that any of the foregoing prohibitions have not been fully complied
with, Contractor may immediately terminate this Contract, or any other
agreement or contract it has entered into with Globalstar without penalty or
cost.  Contractor shall additionally
require a similar prohibition to be clearly set forth in any contract or
agreement which the Parties may enter into now or in the future.  Notwithstanding the foregoing, Globalstar is
not prohibited from using Contractor supplied products, services, and data to
provide telecommunication services (including telephone and internet access) to
any of its users/end customers of any type.


 


(8)          Notwithstanding any other provision of this
Contract, Globalstar shall not use, distribute, transfer or transmit any
products, software or technical data (even if incorporated into other products)
provided to it by Contractor under this Contract except in compliance with all
applicable export laws and regulations. 
Globalstar shall not, directly or indirectly export or re-export the
following items to any country without the appropriate export authorization, as
specified in the applicable export laws: (a) software or technical data
disclosed or provided to Globalstar by Contractor or (b) the direct
product of such software or technical data. 
The obligations stated herein shall survive the expiration, cancellation
or termination of this Contract or any other related agreement/contract.


 


Article 23.            Applicable Law


 


This
Contract shall be governed by and interpreted according to the laws of the
state of New York, excluding the choice of laws rules thereof.


 


Article 24.            Dispute Resolution


 


A.           Negotiation


 


The
Parties shall attempt to resolve any dispute, controversy or difference that
may arise between them through good faith negotiations.  In the event the Parties fail to reach
resolution of such dispute within sixty (60) days of entering into
negotiations, either Party may refer such dispute to arbitration pursuant to
the provisions of Section B, below. 
Notwithstanding the foregoing, the Parties may elect to waive
applicability of this section if:


 


(1)          Both Parties agree in writing that the nature of
their dispute is such that it cannot be resolved through negotiations; or


 


(2)          if a Party shall suffer irrevocable harm by such
delay.


 


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B.            Arbitration


 


All
disputes relating to this Contract shall be settled by arbitration administered
by the American Arbitration Association (“AAA”) under its Commercial
Arbitration Rules and the Supplementary Procedures for Large, Complex
Disputes (“AAA Rules”) in effect at the time of arbitration.  The arbitration shall be in accordance with
the following guidelines except to the extent the Parties to arbitration shall
agree otherwise:


 


(1)              The place of arbitration
shall be Washington, D.C., U.S.A.  To the
extent the AAA Rules are not applicable, or are insufficient to fully
resolve any dispute under this Contract, the arbitrator shall apply Maryland
law to the extent necessary to resolve any dispute.


 


(2)              The arbitration shall be
conducted by one arbitrator.  If the
Parties fail to mutually agree on an arbitrator within sixty (60) days of the
commencement of the arbitration, any Party may refer such selection to the AAA.


 


(3)              The proceeding shall be
conducted and transcribed in English. 
Any document submitted in a language other than English shall be
accompanied by an English translation.


 


(4)              All testimony and evidence
related to confidential information or trade secrets shall be safeguarded and
maintained as confidential, with access to such evidence to be only on a
need-to-know basis and subject to all reasonable precautions so as not to
jeopardize the confidential information of any Party.


 


(5)              The Parties hereby accept
jurisdiction of the arbitrator over the Parties and over the subject matter of
the dispute.


 


(6)              The arbitration award shall
be binding and any court having jurisdiction over the Parties or their assets
may enforce judgment upon the arbitration award.


 


(7)              The arbitrator shall award
the prevailing party its attorneys’ fees and costs, arbitration administrative
fees, panel member fees and costs, and any other costs associated with the
arbitration.


 


(8)              The parties agree that
notification of any proceedings, reports, communications or any other document
shall be sent as set forth in Article 28 of this Contract.


 


(9)              The arbitrator may only
award damages as provided for under the terms of this Contract and in no event
may punitive or special damages be awarded.


 


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(10)        The arbitrator shall have
the exclusive right to determine the arbitrability of any disputes.


 


(11)        In the event of any conflict
between the AAA Rules and any provision of this Contract, this Contract
shall prevail.


 


C.            Continuation of Performance


 


During
the arbitration, the Parties shall continue to perform their obligations under
this Contract to the extent such performance is not precluded by the subject
matter of the dispute.


 


Article 25.            Changes


 


A.          At any time during this
Contract, Globalstar may request changes in the Work, so long as such changes
are within the general scope of the Contract. 
The Contractor may also propose changes for consideration by Globalstar.


 


B.            A change request from
Globalstar must be identified as such, must be made or confirmed in writing,
and must be signed by the responsible officer identified in Article 28
hereof, entitled Communication and Authority. 
If any other conduct by the responsible officer or any other
representative of Globalstar is construed by Contractor as possibly
constituting a change request or an interpretation of the Contract requirements
inconsistent with Contractor’s understanding of those requirements, Contractor
shall promptly notify Globalstar and request clarification.


 


C.            Within thirty (30) days
after receiving a change request from Globalstar, Contractor shall submit to
Globalstar a written contract change notice in accordance with the requirements
of Paragraph D of this Article.  On
a case-by-case basis, Contractor may request a longer period to prepare the
contract change notice.  Globalstar shall
not unreasonably withhold its consent to a request for such a longer period,
taking into account the nature of the change request, but Globalstar may also
take into account the impact of such an extension on the performance schedule.


 


D.           Whether submitted in
response to a change request initiated by Globalstar, or initiated by
Contractor, the contract change notice shall itemize, in a reasonable format
specified by Globalstar, any impact that the change would have on the technical
requirements, price, performance schedule, or other terms and conditions of
this Contract.  Where appropriate, the
contract change notice shall also suggest any revised language for the
Contract, including any of its Exhibits, that would be necessary to implement
the change.


 


E.             Any claim by Contractor for
adjustment of the technical requirements, price, performance schedule, or other
terms and conditions of this Contract, attributable to a change, shall be
deemed waived unless asserted in the contract change notice.


 


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F.             If the cost of any materials
that would be made obsolete as a result of a change is included in Contractor’s
claim for adjustment:


 


(1)         To the extent that such
materials have resale, reuse, or salvage value to Contractor or its
subcontractors or suppliers, Globalstar shall be entitled to a credit.


 


(2)         If such materials have no
such resale, reuse, or salvage value, Globalstar shall have the right to
prescribe their manner of disposition.


 


G.            After Globalstar receives a
sufficiently detailed contract change notice, and after any negotiations with
respect to the adjustments claimed by Contractor, the following outcomes are
possible:


 


(1)         Globalstar may decide not to
proceed with implementation of the change.


 


(2)         Globalstar may decide to
implement the change, in which case:


 


(a)          If the Parties have reached agreement about the
adjustments to be made in the Contract, Contractor shall proceed with
implementation as agreed.


 


(b)         If the Parties are unable to reach such an
agreement, the provisions of Article 24 hereof, entitled Dispute
Resolution, shall apply.


 


(c)          Pending any negotiations and/or arbitration,
Globalstar may direct Contractor to proceed with implementation of the change,
subject to any adjustments subsequently agreed or awarded.


 


H.           Globalstar may also direct
Contractor to proceed with implementation of a change prior to preparation of a
complete contract change notice, subject to any adjustments subsequently agreed
or awarded.


 


I.                Globalstar’s right to direct
Contractor to proceed with implementation of a change pursuant to
Paragraph G(2)(c) or H of this Article 25 shall be subject to
Contractor’s ability to do so, taking into account the resources, facilities,
supplies, and services available to it, and may also be subject to a stipulated
financial limit.


 


Article 26.            Assignment of Contract


 


Each Party hereby agrees that it will not, without the prior written
approval of the other Party (such approval not to be unreasonably withheld or
unduly delayed), assign or delegate any of their rights, duties, and
obligations under this Contract, except to a wholly-owned subsidiary of such
Party (which assignment or delegation shall not relieve the assignor or
delegator of liability).  In case of
assignment by Globalstar, Globalstar shall demonstrate to Contractor’s
satisfaction that its successor or assignee possesses the financial resources
to fulfill Globalstar’s obligations under this Contract.  Upon such assignment, the assignee shall
assume all rights and obligations 


 


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of the assignor existing under this Contract at the time of such
assignment.  This Article shall not
preclude the granting of a security interest by a Party to a lender.


 


Article 27.            Key Personnel


 


A.           No later than
KOR, Contractor shall identify the Key Personnel for the following positions to
perform the services and staff the Work, working until successful completion of
the Work performed hereunder (individually a “Key Person” and collectively the “Key
Personnel”).


 


	
  Position

  	
   

  	
  Name

  
	
  Principal RAN System
  Architect

  	
   

  	
  TBD

  
	
  Principal Radio Channel System (RCS) Architect

  	
   

  	
  TBD

  
	
  Principal Radio Network Control (RNC) Architect

  	
   

  	
  TBD

  



 


B.            Key Personnel shall not be
removed from performance of the Work under this Contract unless replaced with
personnel of substantially equal qualifications and ability.  Globalstar shall have the right to review the
qualifications of any proposed replacements. 
If Globalstar deems, in its reasonable judgment, the proposed
replacements to be unsuitable, Globalstar may require Contractor to offer
alternative candidates.  Notwithstanding
its role in reviewing Key Personnel and their replacements, Globalstar shall
have no supervisory control over their performance and nothing in this Article shall
relieve Contractor of any of its obligations under this Contract or of its
responsibility for any acts or omissions of its personnel.


 


Article 28.            Communication and Authority


 


A.           [*] is assigned
as Globalstar’s Program Manager with authority to issue technical direction
within the scope of this Contract.  [*]
is assigned as Contractor’s Program Manager with authority to accept such
direction.  Notwithstanding Article 27(A),
the foregoing Program Managers are authorized (i) to initial the Exhibits
and any modifications thereto (except Exhibit C), and (ii) to execute
the waivers of technical compliance with the specifications in the Exhibits.


 


B.            All contractual
correspondence to Globalstar will be addressed to (with copy to the Program
Manager):


 


	
  [*]

  
	
  Globalstar, Inc.

  
	
  461
  South Milpitas Blvd.

  
	
  Milpitas,
  CA 95035

  
	
  [*]

  



 


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All
technical correspondence to Globalstar will be addressed to:


 


[*]


Globalstar, Inc.


461 South Milpitas Blvd.


Milpitas, CA  95035


[*]


 


All contractual correspondence to Contractor will be
addressed to (with copy to the Program Manager):


 


[*]


Hughes
Network Systems, LLC


11717
Exploration Lane


Germantown,
MD  20876


[*]


 


All technical correspondence to Contractor will be
addressed to:


 


[*]


Hughes
Network Systems, LLC


11717
Exploration Lane


Germantown,
MD  20876


[*]


 


C.             In a time
critical situation, such as operational or technical matters requiring
immediate attention, notice may be given by telephone.  Any notice given verbally will be confirmed
in writing as soon as practicable thereafter in accordance with Article 28(D).


 


D.            Except as
provided in Article 28(C), all notices, demands, reports, orders and
requests hereunder by one Party to the other shall be in writing and deemed to
be duly given on the same business day if sent by electronic means (i.e., electronic mail) or delivered
by hand during the receiving Party’s regular business hours, or on the date of
actual receipt if sent by pre-paid overnight, registered or certified mail.


 


E.             The Parties agree to
cooperate in implementing the use of electronic signatures, provided that such
use is consistent with applicable law.


 


Article 29.            Order of Precedence


 


Should
any ambiguity or conflict arise between any Exhibit hereto and the
Contract Articles of this document, such ambiguity or conflict shall be
resolved by following order of precedence as set forth below:


 


Contract
Articles of this document


Exhibit A
Statement of Work


 


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Exhibit B1
System Technical Specification


Exhibit B2
Gateway Technical Specification


Exhibit B3
User Terminal Subsystem Technical Specification


Exhibit C
Pricing Schedule and Payment Plan


Exhibit D
Hardware Warranty and Software Maintenance Services


Exhibit E Globalstar Patent Portfolio


 


Article 30.            Options


 


Globalstar shall have the
unilateral right to exercise any option as set forth in Exhibit C hereto
entitled Pricing Schedule and Payment Plan. 
Globalstar may exercise such option by providing written notice to
Contractor no later that the expiration of the Option Validity Period.  The option price is firm fixed-price for the
duration of the Option Validity Period. 
If an option is exercised or an order for an optional item is placed
after the expiry of the Option Validity Period up to the 10th anniversary of
EDC, the price for such item shall be subject to escalation to be capped at [*]  per annum. 
Following the tenth (10th) anniversary of EDC the
availability of any optional items hereunder will be subject to mutually agreed
terms and conditions. Such exercised options or orders will be incorporated
into the Contract through the written Contract Change Notice process set forth
in Article 25 hereof.  Each Contract
Change Notice shall include updates, as required, to the Exhibits A, B and C to
the Contract.


 


For
the sake of clarification, Globalstar shall have the option to extend the
Hardware Warranty and Software Maintenance and Support Services as described in
Exhibit D and consistent with Section 10 of Exhibit A on a year
to year basis for up to an additional fifteen (15) years at the option prices
as set forth in Exhibit C. 
Globalstar shall deliver written notice of its election to implement
such extensions not less than 90 days prior to the end of the applicable period
being extended.  Payments for such
extensions shall be invoiced quarterly starting at the beginning of the
extension period with payment due in accordance with Article 7 hereof.


 


Article 31.            Limitation of Liability


 


A.           In any event
and not withstanding anything contained within this Contract, Contractor’s
liability in contract, tort (including negligence or breach of statutory duty)
or otherwise arising by reason of, or in connection with, this Contract (except
in relation to death or personal injury, intellectual property indemnity in
accordance with Article 13 hereto, titled Intellectual Property Right
Indemnity) shall be limited to the Contract Value in respect of any and all
incidents arising in aggregate under this Contract.


 


B.             IN NO EVENT
WILL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR SPECIAL, COLLATERAL,
PUNITIVE, EXEMPLARY, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING
WITHOUT LIMITATION, LOSS OF GOODWILL, LOSS OF PROFITS OR REVENUES, LOSS OF
SAVING, LOSS OF USE, INTERRUPTIONS OF BUSINESS, AND CLAIMS OF CUSTOMERS)
WHETHER SUCH DAMAGES OCCUR PRIOR OR SUBSEQUENT TO, OR ARE ALLEGED AS A RESULT
OF, TORTIOUS CONDUCT OR BREACH OF ANY OF 


 


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THE
PROVISIONS OF THIS CONTRACT, EVEN IF GLOBALSTAR OR CONTRACTOR HAS BEEN ADVISED
OF THE POSSIBILITY OF SUCH DAMAGES.


 


Article 32.            Entire Agreement


 


This
Contract constitutes the entire agreement between the Parties with respect to
the subject matter hereof, and supersedes all prior or contemporaneous
correspondence, representations, proposals, negotiations, understandings, or
agreements of the Parties, whether oral or written.  The Parties also hereby acknowledge that there
are no collateral contracts between them with respect to the subject matter
hereof. This Contract may be signed in counterparts and each original
counterpart shall be deemed binding on each Party collectively and
individually.


 


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IN
WITNESS WHEREOF, the Parties hereto have signed this Contract in
duplicate.


 


	
  GLOBALSTAR,
  INC.

  	
   

  	
  HUGHES
  NETWORK SYSTEMS, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  BY:  

  	
   

  	
   

  	
  BY:  

  	
   

  
	
  /s/
  Anthony J. Navarra

  	
   

  	
  /s/
  Vinod Jain

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  Anthony J. Navarra

  	
   

  	
  Name:
  Vinod Jain

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:
  President

  	
   

  	
  Title:
  Assistant Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:
  14 May 2008

  	
   

  	
  Date:
  14 May 2008

  
					



 


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