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.


 


PURCHASE AGREEMENT


 


BETWEEN


 


ERICSSON FEDERAL INC.


 


AND


 


GLOBALSTAR, INC.


 


FOR


 


GLOBALSTAR’S
SECOND GENERATION GATEWAY


CORE
NETWORK DEVELOPMENT


 


CONTRACT NUMBER GINC-C-08-0400


 


1

















 


Contents


 


	
  1. Scope of
  Agreement

  	
  3

  
	
  2. Order of Precedence

  	
  4

  
	
  3. Options

  	
  4

  
	
  4. Term

  	
  5

  
	
  5. Statement of Work

  	
  5

  
	
  6. Performance
  Schedule

  	
  6

  
	
  7. Acceptance

  	
  6

  
	
  8. Access to
  Work in Progress

  	
  7

  
	
  9.
  Delivery, Title and Risk of Loss

  	
  8

  
	
  10. Prices and Fees

  	
  8

  
	
  11.
  Out-of-Pocket Expenses

  	
  9

  
	
  12. Taxes and Duties

  	
  9

  
	
  13. Invoicing
  and Payment

  	
  9

  
	
  14.
  Intellectual Property Rights

  	
  10

  
	
  15. Intellectual Property Rights Indemnity

  	
  12

  
	
  16. Indemnification and Insurance

  	
  14

  
	
  17. Globalstar-Furnished Facilities

  	
  15

  
	
  18. Warranty

  	
  15

  
	
  19.
  Confidentiality

  	
  16

  
	
  20.
  Limitation of Liability

  	
  17

  
	
  21.
  Termination for Cause

  	
  18

  
	
  22. Termination for Convenience/ Stop Work Orders

  	
  18

  
	
  23. Government Authorizations

  	
  19

  
	
  24. Restriction of Hazardous Substances (“ROHS”);
  Waste Electrical and Electronic Equipment (“WEEE”); and Packaging and
  Packaging Waste

  	
  21

  
	
  25.
  Assignment of Agreement

  	
  22

  
	
  26. Key
  Personnel

  	
  22

  
	
  27. Communication and Authority

  	
  23

  
	
  28.
  Dispute Resolution

  	
  24

  
	
  29. Changes

  	
  24

  
	
  30. Public Release of Information

  	
  26

  
	
  31.
  Force Majeure

  	
  27

  
	
  32.
  Relationship

  	
  27

  
	
  33.
  Miscellaneous

  	
  27

  



 


2

















 


PURCHASE AGREEMENT


 


THIS PURCHASE AGREEMENT,
GINC-C-08-0400 (this “Agreement”), effective as of October 1, 2008 (the “Effective
Date of Contract” or “EDC”), is entered into by and between Ericsson Federal
Inc., a Delaware corporation (“Ericsson”), with a place of business at 1595
Spring Hill Rd., Vienna, VA 22182 and Globalstar, Inc., a Delaware
corporation (“Globalstar”) with its principal place of business at 461 South
Milpitas Boulevard, Milpitas, California 95035 (each a “party” and collectively
the “parties”).


 


WHEREAS, Globalstar desires to retain a qualified supplier to provide
Products and Services with respect to Globalstar’s Second Generation Gateway
Core Network Development; and


 


WHEREAS, Globalstar and Ericsson have agreed that the business
structure established pursuant to this Agreement will achieve the objectives
contemplated by the parties in establishing the terms and conditions upon which
Ericsson will provide to Globalstar, and Globalstar will purchase from
Ericsson, those certain specified Products and Services.


 


NOW, THEREFORE, Ericsson and Globalstar hereby agree as follows:


 


1. Scope
of Agreement


 


Subject
to the terms and conditions of this Agreement and payment of $22,651,151 in
accordance with the Payment Milestones set forth in Exhibit C, Payment
Milestones, Ericsson agrees to deliver to Globalstar the Products and Services
listed in the attached Exhibit A, Pricing Schedule, as further set forth
in Exhibit D, Statement of Work and defined in Exhibit E, Statement
of Compliance.


 


The
following Exhibits are incorporated into this Agreement and made a part hereof:


 


	
  Exhibit A

  	
   

  	
  Pricing
  Schedule

  
	
  Exhibit B

  	
   

  	
  Termination
  Liability Schedule

  
	
  Exhibit C

  	
   

  	
  Payment
  Milestones

  
	
  Exhibit D

  	
   

  	
  Statement
  of Work for Globalstar 2nd Generation Gateway Core Network Development

  
	
  Exhibit E

  	
   

  	
  Statement
  of Compliance

  
	
  Exhibit F

  	
   

  	
  Expansion
  Pricing and Options

  
	
  Exhibit G

  	
   

  	
  Statement
  of Work for Expansion Products (as agreed to by the parties)

  
	
  Exhibit H

  	
   

  	
  Spares
  List

  
	
  Exhibit I

  	
   

  	
  Definitions

  
	
  Exhibit J

  	
   

  	
  Globalstar
  Travel Policy

  



 


3

















 


2. Order
of Precedence


 


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


 


Agreement
Articles of this document


 


Exhibit I
– Definitions


Exhibit D
– Statement of Work for Globalstar 2nd Generation Gateway Core Network Development


Exhibit G
– Statement of Work for Expansion Products (as agreed to by the parties)


Exhibit J
– Globalstar Travel Policy


Exhibit E
– Statement of Compliance


Exhibit A
– Pricing Schedule


Exhibit F
– Expansion Pricing and Options


Exhibit B
– Termination Liability Schedule


Exhibit C
– Payment Milestones


Exhibit H
– Spares List


 


3. Options


 


Globalstar shall have the
unilateral right to exercise any option as set forth in Exhibit F,
Expansion Pricing and Options. 
Globalstar may exercise such option by providing written notice to
Ericsson no later that the expiration of the Option Validity Period which is
hereby defined to be the expiration of the term of this Agreement as set forth
in Article 4, Term. The option price is firm fixed price for the duration
of the Initial Term of this Agreement. 
If an option is exercised or an order for an optional item is placed
after the Initial Term of this Agreement, 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 Agreement through the written Change
Request process set forth in Article 29, Changes.  Each Contract Change Notice shall include
updates, as required, to the Exhibits of the Agreement.  Globalstar shall provide a forecast to
Ericsson 3 months in advance of exercise of any option.  Delivery of Products under any exercised
option is 8 weeks after exercise of option, provided Ericsson has received the
forecast 3 months in advance as referenced above.


 


For
the sake of clarification, Globalstar shall have the option to extend the
Customer Support as described in Exhibit F – Expansion Pricing and
Options, and consistent with Section 5 of Exhibit D, Statement of
Work for an additional three (3) years in one three year increment at the
option prices as set forth in Exhibit F – Expansion Pricing and Options.
Support may be provided in additional three year increments subject to the
mutual agreement of the parties. 
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



 


4

















 


being
extended.  Payments for such extensions
shall be invoiced quarterly in advance of each quarterly period starting at the
beginning of the extension period with payment due in accordance with Article 13,
Invoicing and Payments.


 


4. Term


 


The Initial Term of this Agreement will commence at EDC and will
continue for a period of five (5) years, unless sooner terminated in
accordance with the provisions hereof. 
This Agreement will automatically extend for successive one (1) year
periods unless sooner terminated in accordance with the provisions hereof.


 


5.
Statement of Work


 


(A) Under
this Agreement, Ericsson shall deliver “Work” as set forth below:


 


(a)  Products as set forth in Exhibit A – Pricing Schedule


(i)   Hardware (including
third party hardware);


(ii)  Software (software executable code and firmware, including
same from third parties)


(iii) Documentation (technical data, manuals, drawings and
documents, including same from third parties); and


 


(b)  Services (including Customer Support).


 


(B) Additional
Products and Services set forth in Exhibit F - Expansion Pricing and
Options, may be provided by Ericsson to Globalstar in accordance with a
Statement of Work mutually agreed to by Ericsson and Globalstar from time to
time during the term of this Agreement (“Statement of Work for Expansion
Products”). Each such Statement of Work for Expansion Products will, at a
minimum, include the following:


 


(a)           A reference to this Agreement, which
reference will be deemed to incorporate all applicable provisions of this Agreement.


 


(b)           The date as of which the Statement of Work
for Expansion Products will be effective, and, if applicable, the term or
period of time during which Ericsson will provide the applicable Products and
Services to Globalstar pursuant to that Statement of Work for Expansion
Products.


 


(c)           A description of the Products and Services to
be provided by Ericsson to Globalstar pursuant to the Statement of Work for
Expansion Products, including, but not limited to, the deliverables to be
provided as part of the applicable Products and Services pursuant to that
Statement of Work.


 


(d)           The amounts payable to Ericsson by Globalstar for the Products and
Services to be provided under the applicable Statement of Work for Expansion
Products.


 


5

















 


(e)           Additional payment milestones and termination liabilities for the
Expansion Products provided under that Statement of Work for Expansion Products
that are not otherwise set forth in this Agreement.


 


No Statement of Work
for Expansion Products will become effective until a formal amendment to the
Agreement, incorporating such Statement of Work into this Agreement, has been
executed by an authorized representative of both Ericsson and Globalstar.


 


In
the event of any express conflict or inconsistency between the provisions of
this Agreement and the provisions of any Statement of Work for Expansion
Products, the provisions of this Agreement will control with respect to the
interpretation of that Statement of Work.


 


6.
Performance Schedule


 


The
Work, as defined in Article 5, Statement of Work, and as set forth in Exhibit D,
Statement of Work, shall be performed in accordance with the schedule detailed
in Exhibit D, Statement of Work, and Exhibit E, Statement of
Compliance.  Such schedule shall be
adjusted on an equitable basis pursuant to the Change procedure set out in Article 29,
Changes of this Agreement in respect of (i) any delays attributable to any
events of excusable delay referenced in Article 31, Force Majeure, of this
Agreement or (ii) delays by Globalstar in acting or performing as required
under this Agreement including any delay or failure to furnish the required
equipment, services or property pursuant to Section 4 of Exhibit D,  Statement of Work, of this Agreement


 


7.
Acceptance


 


A.            All deliverable Work specified in Exhibit D,
Statement of Work, and all Payment Milestones as defined is Exhibit C,
Payment Milestones, shall be subject to acceptance of such Work by Globalstar
in accordance with this Article 7.


 


Postponement of acceptance by Globalstar due
to any deficiencies not attributable to Ericsson will be deemed acceptance of
such Milestone.


 


B.            Installation/ Delivery Acceptance


 


   Upon installation of the
applicable Products for the lab and sites 1-3 and upon delivery of the
applicable Products for sites 4-9, Ericsson will conduct acceptance testing in
accordance with the procedures and requirements set forth in Exhibit D –
Statement of Work and Exhibit E – Statement of Compliance to demonstrate
that such Products operate in material conformance with the applicable
specifications in accordance with the applicable acceptance test plan and
acceptance criteria as mutually agreed upon 60 days prior to the commencement
of the installation. Upon successful completion of the applicable acceptance
testing, Ericsson will provide Globalstar with a Certificate of 


 


6

















 


Acceptance for such installation. Within ten (10) business
days following its receipt of the Certificate of Acceptance, Globalstar will
either (i) sign and return to Ericsson the Certificate of Acceptance,
confirming Globalstar ‘s
acceptance of such installation, or (ii) notify Ericsson in writing of
Globalstar’s rejection of such installation, together with the specific
deficiencies constituting the grounds for such rejection; provided that either (1) Globalstar ‘s failure to so provide Ericsson with such
written notification of rejection within such 10-business-day period, or (2) Globalstar’s
commercial use of such Products, or a portion thereof, will constitute
acceptance of such installation. Only service-affecting deficiencies shall be
grounds for delay of the applicable acceptance of such installation. Prior to
or upon Globalstar’s acceptance of the installation, Globalstar may provide Ericsson with a written punchlist
of the non-conformities of such installed Product (the “Punchlist”). Within
fifteen (15) days following the acceptance of such Product, Globalstar may update such Punchlist by adding the
non-conformities of the Product identified by Globalstar after the acceptance. Ericsson shall promptly
correct the non-conformities identified in the Punchlist. Upon Ericsson’s
successful correction of such non-conformities, Ericsson shall submit to
Globalstar, and Globalstar shall
sign, a certificate verifying that no further Punchlist items remain
unresolved.


 


C.            Payment
Milestone Acceptance


 


Acceptance of Payment Milestones as defined in Exhibit C
– Payment Milestones, to the extent they are not included in 7 B above, shall
occur upon successful completion of the Payment Milestone in accordance with
the acceptance criteria as mutually agreed upon 60 days prior to the defined
completion date of each
Payment Milestone. Upon successful
completion of the applicable acceptance criteria, Ericsson will provide Globalstar with a Certificate of Acceptance for each
such Payment Milestone. Within ten (10) business days following its
receipt of the Certificate of Acceptance, Globalstar will either (i) sign and return to
Ericsson the Certificate of Acceptance, confirming Globalstar ‘s acceptance of such Milestone, or (ii) notify
Ericsson in writing of Globalstar’s rejection of the Milestone, together with
the specific deficiencies constituting the grounds for such rejection; provided
that either (1) Globalstar ‘s failure to so provide Ericsson with such written notification of
rejection within such 10-business-day period, or (2) Globalstar’s
commercial use of the deliverables, or a portion thereof, will constitute
acceptance of the Payment Milestone. Prior to or upon Globalstar’s acceptance
of the Payment Milestone, Globalstar may provide Ericsson with a written punchlist of the non-conformities
(the “Punchlist”). Within fifteen (15) days following the acceptance of the
Payment Milestone, Globalstar may update such Punchlist by adding the non-conformities of the Payment
Milestone identified by Globalstar after the acceptance. Ericsson shall promptly correct the
non-conformities identified in the Punchlist. Upon Ericsson’s successful
correction of such non-conformities, Ericsson shall submit to Globalstar, and
Globalstar shall sign, a
certificate verifying that no further Punchlist items remain unresolved.


 


8. Access
to Work in Progress


 


A.            Globalstar shall have the right, at all reasonable
times during the performance of this Agreement, and at Globalstar’s sole
expense, to monitor the Work in progress


 


7

















 


at
the plants of Ericsson, provided that Globalstar gives reasonable notice to
Ericsson.  Visits shall be on a
non-interfering basis subject to Ericsson’s standard security and
confidentiality procedures.


 


B.            To the extent necessary to implement this
Article, and with the consent of any affected subcontractors, Ericsson shall
pass through the provisions hereof into all subcontracts with suppliers of
critical path items.


 


C.            In no event shall
Ericsson be liable if Globalstar’s monitoring delays or otherwise prevents the
performance, delivery or acceptance of Ericsson Work under this Agreement.


 


9.
Delivery, Title and Risk of Loss


 


Except
as the parties may otherwise agree to, Ericsson shall deliver the Product
according to INCOTERMS 2000, Delivery Duty Unpaid named place of destination
and according to the agreed upon delivery schedule.  ‘Delivery Duty Unpaid’ (named place of
destination) means that Ericsson delivers the Products to Globalstar, not
cleared for import, and not unloaded from any arriving means of transport at
the ‘named place of destination’. 
Ericsson has to bear the costs and risks involved in the bringing the
Products thereto, other than, where applicable, any ‘duty’ (which term includes
the responsibility for and the risks of carrying out of customs formalities,
and the payment of formalities, customs duties, taxes and other charges) for
import in the country of destination. 
Such ‘duty’ has to be borne by Globalstar as well as any costs and risks
caused by Globalstar’s failure to clear the Products for import in time.
Ericsson will make reasonable commercial efforts to minimize the number of
shipments to each site.


 


Title
and risk of loss or damage to the Products will pass to Globalstar upon
Ericsson’s delivery to the named place of destination.  Notwithstanding the foregoing, Globalstar
hereby grants to Ericsson a lien on and a security interest (which, to the
fullest extent permitted by law, shall be deemed to be a purchase money
security interest) in and to each such Product and any and all proceeds thereof
to secure the payment in full of the purchase price for such Product.  Globalstar agrees to cooperate with Ericsson
to create, preserve, perfect or validate such lien and security interest in any
jurisdiction, and Ericsson may at any time file a copy of this Agreement as a
financing statement with any filing office in any jurisdiction.


 


10. Prices
and Fees


 


The
Total Purchase Price shall be a firm fixed-price Twenty Two Million Six Hundred
Fifty One Thousand One Hundred Fifty One United States Dollars (US$22,651,151)
for the Work which may be amended from time to time in accordance with this
Agreement.  For the sake of
clarification, there is an additional time and materials component of the Work.
The commitment for the Total Purchase Price listed in Exhibit A, Payment
Milestones, shall arise upon execution of this Agreement by the parties,
without 


 


8

















 


the
need to issue any purchase order or other similar documentation in connection
herewith. The commitment for the purchase price of any Expansion Products to be
listed in a Statement of Work for Expansion Products shall arise upon execution
by an authorized representative of both Ericsson and Globalstar of an amendment
incorporating such Statement of Work into this Agreement.


 


11.
Out-of-Pocket Expenses


 


With regard to any mutually approved time-and-materials Work, Globalstar
will pay or reimburse Ericsson for any reasonable out-of-pocket expenses, such
as travel and associated expenses, reasonably incurred by Ericsson in
connection with the performance of this Agreement so long as Ericsson requests
and estimates the magnitude of such expenses and receives Globalstar approval
in advance. All travel must be consistent with Exhibit J, Globalstar
Travel Policy, and invoiced as direct “pass through” actual and reasonable
costs with no loading for indirect costs or profit.


 


12. 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 delivery of any Product or Service and by reason of the
supply of any Globalstar equipment or other Globalstar property to
Ericsson.  Globalstar will pay and discharge,
either directly to the governmental agency or as billed by Ericsson, the
foregoing taxes, duties and charges.


 


13.
Invoicing and Payment


 


A.            The Total Purchase Price referred to in Article 10,
Prices and Fees, shall be paid by Globalstar in accordance with Exhibit A,
Pricing Schedule, and Exhibit C, Payment Milestones, and with the terms of
this Article.


 


B.            With respect to each amount specified in Exhibit C,
Payment Milestones, Ericsson shall submit an invoice to Globalstar when the
relevant milestone has been completed and accepted per the Acceptance procedure
in Article 7.


 


C.            Globalstar shall pay each invoice for Payment
Milestones within 30 days of receiving each invoice after having provided
Ericsson with a signed Certificate of Acceptance or within 30 days of the date
of deemed Acceptance per Article 7. Globalstar shall pay each invoice for
time and material within 30 days of receiving such invoice.


 


9

















 


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


 


Account
of Ericsson Federal Inc.


[*]


 


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,
destined to Ericsson’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 Ericsson and payment for an
early completion of a milestone is subject to Globalstar’s prior written
approval.


 


14.  Intellectual Property Rights


 


A.            Definitions


 


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


 


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


 


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


 


(3)           “Core Network System” or “CN” 
means the core network system and other network deliverables being
developed and provided by Ericsson pursuant to this Agreement.


 


(4)           “Globalstar System” means the system including satellites, CN, Radio
Access Network (RAN), ground control network, network control centers,


 


10
















 


Remote
Terminal Diagnostic Monitor and User Terminals operated by Globalstar to
provide low earth orbit satellite based wireless telecommunication services
worldwide.


 


(5)           “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 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.


 


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


 


B.            Ownership of Intellectual Property Rights


 


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


 


(2)  All Ericsson Foreground IP shall be exclusively owned by
Ericsson, its suppliers or licensors.


 


C.            License Rights Granted by Ericsson


 


Subject
to fulfillment by Globalstar of its obligations under this Agreement, Ericsson
hereby grants to Globalstar a worldwide, non-exclusive, perpetual, irrevocable,
non-transferable, non-assignable, fully paid-up license to use, duplicate
(Documentation and Software (for archival and backup purposes only)) and
disclose the Ericsson Background IP and the Ericsson Foreground IP associated
with the CN solely for the purposes of the use, operation and maintenance of
the Globalstar System.  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 above. For the
sake of clarification, Globalstar shall use the Software solely on or with a
single unit or arrangement of Hardware for which the Software was delivered.


 


11

















 


D.            Other Right and License Considerations


 


(1) This Agreement applies to all updates, upgrades,
maintenance releases, revisions and enhancements for the
Software which Ericsson may supply to Globalstar from time to time.


 


(2) Globalstar may make one copy of
any Software for backup and archival purposes if the copy contains all of the
Ericsson proprietary notices contained in the original Software.  Globalstar may make multiple copies of any
Documentation if such copies contain all of the Ericsson proprietary notices contained
in the original Documentation.


 


(3) Globalstar shall not directly
or indirectly: (a) modify, copy (except as allowed for backup and archival
purposes), transmit, alter, merge, decompile, disassemble, reverse engineer or
adapt any portion of the Software; (b) encumber, time-share, rent or lease
the rights granted herein; (c) manufacture, adapt, create derivative works
of, localize, port or otherwise modify any Software; or (d) disclose or
otherwise make available the Software to any third party, without Ericsson’s
prior written consent, except as permitted in Article 14 C (1) above.  For the sake of clarification, Globalstar
shall have the right to utilize the open interfaces of the CN to add
functionality or features (e.g., HLR/HSS and application servers) to the CN.


 


(4)  Except
as expressly set forth in this Agreement, no right or license is either granted
or implied by either party to the other with respect to any technical or
business information, or with respect to rights in any patents, trademarks,
copyrights, trade secrets, mask work protection rights, and other intellectual
property.


 


(5)  In the event Ericsson fails to
continue to offer or make available to Globalstar the 2G/3G roaming solution,
as defined in Exhibit E, Statement of Compliance, then Ericsson agrees to
grant Globalstar the right to use the design and engineering documentation
created for Globalstar hereunder for the purposes of supporting, creating
and/or modifying the 2G/3G roaming solution. 
For clarification purposes, the rights granted herein do not apply to
software or hardware that is not produced by Ericsson.


 


15.  Intellectual Property Rights Indemnity


 


A.            Ericsson
shall, at its own expense, (i) indemnify and defend Globalstar in any
claim or legal action in the United States, alleging that the use, sale or offer
for sale of any Product provided by Ericsson to Globalstar hereunder or any
portion thereof, directly infringes any patent, trademark or copyright of any
third party (“Infringement Claim”); and (ii) pay any settlement reached or
final award, including reasonable attorney’s fees, for infringement. As a
condition of such defense or payment, Globalstar is required to (i) give
Ericsson prompt written notice of any Infringement Claim; (ii) provide
Ericsson with the sole control of the defense and/or settlement of the
Infringement Claim; (iii) cooperate fully with Ericsson in such defense or
settlement.  Globalstar may, at its own
expense, 


 


12

















 


participate
fully in the defense of any such Infringement Claim. For the sake of
clarification, the foregoing applies to Infringement Claims involving Ericsson
Background IP and Ericsson Foreground IP.


 


B.            In the event Ericsson becomes aware of a
potential Infringement Claim, Ericsson shall use its reasonable best efforts to
avoid an interruption of Globalstar service and may (or in the case of an award
of an injunction, shall) at its sole option and expense:  (i) procure for Globalstar the right to
continue using the alleged infringing Product(s); (ii) replace or modify
the alleged infringing Product(s) with an equivalent product(s) so
that Globalstar’ use is non-infringing; or (iii) if the remedies under the
foregoing clauses (i) and (ii) are not commercially feasible, require
Globalstar to return the affected portion of the Product(s) and refund to
Globalstar the depreciated value (as carried on the Globalstar’ books) of such
Product(s).


 


C.            Ericsson has no obligation or liability in
respect to any Infringement Claim in the event that the affected Product: (i) is
manufactured, designed or supplied by Ericsson in accordance with any design or
special instruction furnished by Globalstar where such forms the basis of the
Infringement Claim; (ii) is used by Globalstar in a manner or for a
purpose not contemplated by this Agreement or Ericsson’s Product documentation;
(iii) is used by Globalstar in combination with other products or
applications not provided by Ericsson under this Agreement, including any
software developed by Globalstar through the permitted use of Products, provided
that the Infringement Claim arises from such combination or the use thereof; or
(iv) is modified by Globalstar, provided the Infringement Claim arises
from such modification (“Other Claims”). If Globalstar continues use of the
affected Product notwithstanding Ericsson’s request to replace or modify
pursuant to Article 15(B) (ii) or its requirement to return
pursuant to Article 15(B) (iii), Ericsson shall not be liable for
such use.  Globalstar shall indemnify
Ericsson against all liability and costs of defense, including reasonable
attorneys’ fees, for any and all claims against Ericsson for infringement based
upon any of the foregoing.


 


D.            THE PROVISIONS OF THIS ARTICLE 15 CONSTITUTE
THE EXCLUSIVE RECOURSE OF EACH PARTY AND THE ENTIRE OBLIGATION AND LIABILITY OF
EACH PARTY WITH RESPECT TO ANY CLAIM FOR INFRINGEMENT OF INTELLECTUAL PROPERTY
RIGHTS.


 


E.             Ericsson agrees that the provisions of this Article shall
apply to any Product modified by Ericsson pursuant to Paragraph 15 B (ii) of
this Article.


 


F.             Globalstar will indemnify Ericsson 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
Ericsson in defense of such lawsuit if Globalstar does not undertake the
defense thereof.


 


13

















 


16.  Indemnification and Insurance


 


A.            Ericsson 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 tangible personal property and injuries,
including death, to all persons, including but not limited to employees or
agents of Ericsson, its subcontractors and the Globalstar Indemnitees, and to
all other persons, arising from any occurrence to the extent caused by any
negligent act or omission or willful misconduct of Ericsson, its subcontractors
or any of them.


 


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


 


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


 


B.            Globalstar shall indemnify and hold harmless
Ericsson, and its subsidiaries and affiliates, its subcontractors, their
respective officers, employees, agents, servants and assignees, or any of them
(collectively “Ericsson 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 Ericsson 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 Ericsson 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 Products after
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 Ericsson 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 Ericsson Indemnitees shall
provide to Globalstar such reasonable cooperation and assistance as Globalstar
may request to perform its obligations hereunder.


 


14

















 


C.            Ericsson 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, Ericsson will provide a Certificate of Insurance to Globalstar.


 


17.
Globalstar-Furnished Facilities


 


With
respect to any facilities provided by Globalstar or any of its other
contractors pursuant to Exhibit D, Statement of Work, and Exhibit E -
Statement of Compliance, whether for installation of the items to be delivered
by Ericsson under this Agreement or for any other purpose, Ericsson shall
exercise all reasonable care to ensure that such facilities are suitable for
the purpose intended.


 


18.
Warranty


 


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


 


(1) 
All deliverable Hardware shall be in new or like new condition when first
delivered to Globalstar and free from any defects in materials, workmanship and
design; and


 


(2) 
All deliverable Work shall conform to the requirements specified in this
Agreement, including Exhibit D, Statement of Work  and Exhibit E, Statement of Compliance.


 


B.            Ericsson warrants that each Product provided by Ericsson to
Globalstar hereunder will, during the applicable warranty period, perform
materially in accordance with the applicable specifications.  The warranty period is: (i) twelve (12) months for the hardware
components of the Product, commencing upon delivery of the Product, (ii) three
(3) months for software and firmware components of the Product (including
subsequent releases of the software) commencing upon delivery of the software
or firmware, or (iii) twelve (12) months for services, commencing upon the
date the Service is performed.  If
notified by Globalstar of any Product’s failure to perform materially in
accordance with the applicable specifications within the applicable warranty
period, Ericsson shall, at its election and expense, repair or replace any such
defective Product.  Such repair or
replacement includes material, labor and services, and shall be Globalstar’s
sole and exclusive remedy and Ericsson’s sole and exclusive obligation in the
event this warranty is breached.  EXCEPT
AS OTHERWISE EXPRESSLY PROVIDED HEREIN, THERE ARE NO, AND ERICSSON HEREBY
DISCLAIMS ALL, OTHER WARRANTIES, WHETHER IMPLIED, EXPRESS OR STATUTORY, WITH
RESPECT TO THE PRODUCTS AND SERVICES PROVIDED TO CUSTOMER HEREUNDER, INCLUDING
WITHOUT LIMITATION WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE.


 


15

















 


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


 


 In
the event an on-site intervention is needed (e.g., fault cannot be located
remotely by Ericsson or failure of a non-replaceable unit), Ericsson shall,
upon request, provide on-site support at Globalstar’s additional cost on a
time-and-materials basis at the hourly labor rates set forth in Exhibit F,
Expansion Pricing and Options.


 


All
return of defective or non-conforming Work to Ericsson shall follow Ericsson’s
Return Material Authorization (RMA) process.


 


D.            Any corrections or replacements made pursuant
to this Article shall be subject to Article 9, Delivery, Title and
Risk of Loss.  With respect to any part
or 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 part or 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.             Notwithstanding the foregoing, Ericsson 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,
Ericsson may, at its sole discretion and without liability to Ericsson, in
addition to demanding that Globalstar fulfills all payment obligations
contained herein:  (i) reject Work
sent for repairs; or (ii) hold any Work sent for repairs until Globalstar
fulfills all payment obligations contained herein.  None of the foregoing options elected by
Ericsson shall result in an increase in the duration of the warranty period.


 


19.
Confidentiality


 


A.                  Each
party shall during the term of this Agreement 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 Agreement
disclosed to it by the 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 Agreement.  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) 


 


16

















 


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 Agreement, subject to the nondisclosure and use
restrictions provided herein.


 


B.                  Article 14,
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 Agreement;


 


(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 Ericsson or Globalstar, which fact can be shown
by competent evidence; or


 


(4) 
Globalstar or Ericsson 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.


 


20.
Limitation of Liability


 


In any event and
notwithstanding anything contained within this Agreement, Ericsson’s liability
in contract, equity, tort (including negligence or breach of statutory duty) or
otherwise arising by reason of, or in conjunction with, this Agreement (except
in relation to death or personal injury or intellectual property rights
indemnity) shall not exceed the price or fees then already paid by Globalstar
to Ericsson for the Products or Services that give rise to such liability.


 


IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR ANY
SPECIAL, EXEMPLARY, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN CONNECTION
WITH THIS AGREEMENT, HOWEVER CAUSED AND REGARDLESS OF WHETHER BASED ON ACTION
OR CLAIM IN CONTRACT, EQUITY, INDEMNITY, TORT (INCLUDING NEGLIGENCE), INTENDED
CONDUCT, STRICT LIABILITY OR OTHERWISE, EVEN IF SUCH DAMAGES ARE FORESEEABLE.


 


17

















 


21.
Termination for Cause


 


A.            Either party shall have the right to
terminate this Agreement, 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.


 


If
such termination for cause occurs, upon payment by Globalstar to Ericsson 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 Ericsson shall be liable for any reasonable cover
costs for such Work up to a maximum of [*] of the remaining unpaid amounts due
under this Agreement.  In addition,
Ericsson 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 Ericsson’s labor rate specified in Exhibit F, Expansion Pricing
and Options).


 


B.            If Globalstar issues a Termination Notice to
Ericsson pursuant to this Article and it is subsequently determined that
Ericsson 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 22,
Termination for Convenience/Stop Work Orders, unless the parties mutually agree
to reinstate the Agreement.


 


22.
Termination for Convenience/ Stop Work Orders


 


A.            Globalstar may terminate this Agreement, in
whole or in part, for Globalstar’s convenience, at any time prior to
completion, upon thirty (30) days written notice to Ericsson.  In such case, Ericsson 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, Globalstar agrees to pay termination fees as set forth in Exhibit B,
Termination Liability Schedule.


 


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


 


18

















 


D.            Stop Work Orders


 


(1)   Globalstar
may, at any time, upon reasonable prior written notice to Ericsson (“the Stop
Work Order”), direct Ericsson 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, Ericsson 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 hardware
Ericsson has on hand for performance of the Work.


 


(2)   Globalstar
may, at any time during the stop Work, either (a) direct Ericsson to
resume performance of the Work by written notice to Ericsson, and Ericsson
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
Ericsson to recommence performance, (y) other affected provisions of the
Agreement shall be adjusted, and (z) Ericsson is compensated for its Work
stoppage costs as defined in Paragraph (3) below; or (b) terminate
the Agreement for convenience in accordance with the foregoing provisions of
this Article in which case the costs incurred by Ericsson 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.


 


(3)   The Total
Purchase Price of this Agreement shall be equitably adjusted to compensate
Ericsson for actual costs reasonably incurred by Ericsson or its subcontractors
as a result of such suspension and resumption of Work plus a markup of
[*].  Ericsson 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 Ericsson to resume Work, Globalstar shall be deemed to have
terminated the Agreement for convenience under the foregoing provisions of this
Article and the applicable termination charges shall apply.


 


23.   Government Authorizations


 


A.            Site Licenses


 


Globalstar shall be responsible for obtaining and
complying with all national authorizations or licenses as may be required to
introduce the Product at the sites. 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 


 


19

















 


all costs of such licenses, permits and authorizations
and all costs and expenses incurred in obtaining and maintaining them.  Globalstar’s obligation to pay Ericsson 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 Agreement and the subsequent delivery of Products and Services under this
Agreement will be subject to all applicable export controls imposed or
administered by the U. S. Government. 
The parties 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 (cumulatively, “Export Laws”).


 


(2)   Performance by Ericsson under this Agreement
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)   Ericsson shall submit requests for commodity
classifications for the Products, including any 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, Ericsson shall submit requests
for authorization to use license exceptions. 
Globalstar shall cooperate with Ericsson to obtain such commodity
classifications and authorizations, including providing Ericsson with any
required information in Globalstar’s possession.  Ericsson 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 Ericsson, and shall be at Globalstar’s own risk.  Ericsson 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)   To the extent a U.S. export license is
required for any deliverable Products, Ericsson will apply for the required
U.S. export license and will export such deliverable Products in accordance
with the export license as approved by BIS.


 


20
















 


(6)   Notwithstanding any other provision of this
Agreement, Globalstar shall not use, distribute, transfer or transmit the
Products (even if incorporated into other items) provided to it by Ericsson
under this Agreement except in compliance with Export Laws.  Globalstar shall not, directly or indirectly,
export or re-export the Products to any country without the appropriate export
authorization, as specified in the Export Laws. 
The obligations stated herein shall survive the expiration, cancellation
or termination of this Agreement or any other related agreement or
contract.  If requested by Ericsson, Globalstar also agrees to sign written
assurances and other export-related documents as may be required for Ericsson
to comply with the Export Laws.


 


24.  Restriction of Hazardous Substances (“ROHS”);  Waste Electrical and Electronic Equipment (“WEEE”);
and Packaging and Packaging Waste


 


A.   Deliverable
Hardware 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”); 
Directive 2002/96/EC of the European Parliament and of the Council of 27
January 2003 on waste electrical and electronic equipment (the “WEEE
Directive”);  and Directive 94/62/EC of
the European Parliament and of the Council of 20 December 1994 on
packaging and packaging waste (the “Packaging 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 Directives into EU Member State Law.


 


B.   Ericsson 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 deliverable Hardware,
Ericsson shall provide Globalstar with (a) Certificate of Compliance with
the ROHS Directive, the WEEE Directive and the Packaging Directive;  and (b) Material Composition
Declarations from suppliers in accordance with Forms IPC-1752-1 v1.0 and
IPC-1752-2 v1.0 or approved updates. 
Ericsson shall keep records for traceability and compliance
documentation purposes for at least five (5) years.


 


C.   Ericsson
shall take commercially reasonable steps to comply with the WEEE Directive
information and product marking requirements, where applicable, including a
symbol of the crossed-out wheelie bin, with a horizontal bar underneath
signifying that the Hardware has been manufactured after the WEEE Directive
came into force, and a marking properly identifying Ericsson as the producer of
the Hardware, as instructed by Globalstar.


 


21

















 


D.   Upon request, Ericsson 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, the WEEE Directive and the Packaging 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 Hardware;


(b)         Hardware or component design;


(c)          marking and labeling Hardware; 
and


(d)         EU audit requests of Globalstar.


 


25.  Assignment of Agreement


 


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 Agreement, except to a wholly-owned
subsidiary of such party or except in the event of a sale of all or
substantially all of a party’s assets (which assignment or delegation shall not
relieve the assignor or delegator of liability).  In case of assignment by Globalstar,
Globalstar shall demonstrate to Ericsson’s satisfaction that its successor or
assignee possesses the financial resources to fulfill Globalstar’s obligations
under this Agreement.  Upon such
assignment, the assignee shall assume all rights and obligations of the
assignor existing under this Agreement at the time of such assignment.  This Article shall not preclude the
granting of a security interest by a party to a lender.


 


26.  Key Personnel


 


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


 


	
  Position

  	
   

  	
  Name

  
	
  Program Manager

  	
   

  	
  [*]

  
	
  System Integration and
  Services

  	
   

  	
  [*]

  



 


B.            Key Personnel shall not be removed from
performance of the Work under this Agreement 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 Ericsson 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 


 


22

















 


relieve
Ericsson of any of its obligations under this Agreement or of its
responsibility for any acts or omissions of its personnel.


 


27.  Communication and Authority


 


A.            [*] is assigned as Globalstar’s Program
Manager with authority to issue technical direction within the scope of this
Agreement.  [*] is assigned as Ericsson’s
Program Manager with authority to accept such direction.  Notwithstanding Article 26(A), Key
Personnel, the foregoing Program Managers are authorized (i) to initial
the Exhibits and any modifications thereto (except Exhibit A - Pricing
Schedule and Exhibit F - Expansion Pricing and Options), 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):


 


[*]


 


All
technical correspondence to Globalstar will be addressed to:


 


[*]


 


All notices to Ericsson required to be sent pursuant to Article 15,
Intellectual property Rights Indemnification, Article 19, Confidentiality,
Article 21, Termination for Cause and Article 22, Termination for
Convenience/ Stop Work Orders, shall be addressed to:


 


[*]


 


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


 


[*]


 


All
program and technical correspondence to Ericsson will be addressed to the
Program Manager.


 


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 Paragraph D of this Article.


 


D.            Except as provided in Paragraph C of this
Article, 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 


 


23

















 


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.


 


28.
Dispute Resolution


 


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 thirty (30) days of entering into
negotiations, either party may refer such dispute to arbitration as set forth
below.


 


Any
disputes arising under or relating to this Agreement shall be resolved in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association.  Arbitration
shall be held in the City of Denver, Colorado, or such other place as the
parties may agree and shall include an award of attorneys’ fees (and the amount
of such fees) to the prevailing party. 
The arbitration shall be conducted by one arbitrator whose selection
shall be based upon mutual agreement of the Parties.  The arbitrator’s award shall be final and
binding, and judgment thereon may be entered in any court having jurisdiction
over the party against which enforcement is sought; provided that any such
award rendered by the arbitrators shall be strictly in conformance to and in
accordance with the terms and conditions of this Agreement, including without
limitation the limitation of liability provisions contained herein.  Other than those matters involving injunctive
relief as a remedy or any action necessary to enforce the award of the arbitrators,
the parties agree that the provisions of this Section are a complete
defense to any suit, action or other proceedings instituted in any court or
before any administrative tribunal with respect to any dispute or controversy
arising under or relating to this Agreement. 
Nothing in this Section shall prevent either party from exercising
its rights to terminate this Agreement as specified herein.  The provisions of this Section shall
survive the expiration or termination of this Agreement for any reason.


 


29.
Changes


 


A.            At any time during this Agreement, Globalstar
may request changes in the Work, so long as such changes are within the general
scope of the Agreement.  Ericsson 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 27, Communication and
Authority.  If any other conduct by the
responsible officer or any other representative of Globalstar is construed by
Ericsson as possibly constituting a change request or an interpretation of the
Agreement requirements inconsistent with Ericsson’s understanding of those
requirements, Ericsson shall promptly notify Globalstar and request
clarification.


 


24

















 


C.            Within thirty (30) days after receiving a
change request from Globalstar, Ericsson shall submit to Globalstar a written
proposal in accordance with the requirements of Paragraph D of this
Article.  On a case-by-case basis,
Ericsson may request a longer period to prepare the proposal.  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 Ericsson, the proposal 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 Agreement.  Where appropriate, the proposal shall also
suggest any revised language for the Agreement, including any of its Exhibits,
which would be necessary to implement the change.


 


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


 


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


 


(1) To the extent that such materials have
resale, reuse, or salvage value to Ericsson 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
proposal, and after any negotiations with respect to the adjustments claimed by
Ericsson, 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
Agreement, the parties shall execute a formal amendment to the Agreement and
Ericsson shall proceed with implementation as agreed; or


 


(b)         Globalstar and Ericsson may agree to proceed
with implementation of a change prior to execution of a formal amendment,
subject to any adjustments subsequently agreed or awarded.


 


25

















 


30. Public
Release of Information


 


Each
party agrees to submit to the other party all press releases and other
publicity matters wherein the other party’s names or marks are mentioned or
language from which the connection of said names or marks therewith may be
inferred or implied. Each party agrees not to publish such press releases or
publicity matters without the other party’s prior written approval.


 


A.            During the term of this Agreement, 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 Agreement, 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 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 Agreement 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 Agreement,
which press releases shall be subject to approval by both parties prior to
release.


 


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31. Force
Majeure


 


Each party will be excused from performance hereunder (except for payment
obligation) for any period and to the extent that it is prevented from such
performance, in whole or in part, as a result of delays caused by the other
party or an act of God, natural disaster, war, civil disturbance, court order,
labor dispute, or other cause beyond its reasonable control and which it could
not have prevented by reasonable precautions, including failures or
fluctuations in electrical power, heat, light, air conditioning or
telecommunications equipment, and such non-performance will not be a default
hereunder or a ground for termination hereof.


 


32.
Relationship


 


The
relationship between Globalstar and Ericsson is that of independent
contractor.  This Agreement does not
create any employer-employee, agency, joint venture, or partnership
relationship between Globalstar and Ericsson.


 


33.
Miscellaneous


 


This
Agreement shall be governed by the laws of the State of Colorado, other than
the choice of law rules. The provisions of this Agreement shall be severable,
and if any provisions shall be held unenforceable the remaining provisions
shall remain in full force and effect. 
Expiration or termination of this Agreement for any reason shall not
release either party from any liability or obligation set forth in this Agreement
which (i) the parties have expressly agreed will survive any such
expiration or termination, or (ii) remain to be performed or by their
nature would be intended to be applicable following such expiration or
termination.  This Agreement, each
Statement of Work (or purchase order submitted by Globalstar and accepted by
Ericsson), and all Exhibits attached hereto or thereto, each of which is hereby
incorporated herein or therein, as applicable, for all purposes, constitute the
entire agreement between Ericsson and Globalstar with respect to the subject
matter hereof and thereof, and there are no understandings or agreements
relative hereto or thereto that are not fully expressed herein or therein. Any
other terms or conditions included in any quotes, acknowledgements, bills of
lading, purchase orders, invoices or other forms utilized or exchanged by the
parties hereto that are in addition to or in conflict with those set forth in
this Agreement or the applicable Statement of Work will be of no force or effect
and will not be incorporated herein or be binding unless specifically and
expressly agreed to in writing by both parties. 
No change, waiver or discharge will be valid unless in writing signed by
an authorized representative of the party against whom such change, waiver or
discharge is sought to be enforced.


 


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IN
WITNESS WHEREOF, the parties to this Agreement have caused their authorized
representatives to execute this Agreement as of the Effective Date.


 


 


	
  ERICSSON FEDERAL INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Douglas C. Smith

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  Douglas
  C. Smith

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  President,
  Ericsson Federal

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GLOBALSTAR, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Thomas M. Colby

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed
  Name:

  	
  Thomas
  M. Colby

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief
  Operating Officer

  	
   

  	
   

  
							



 


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