**Exhibit 10.2**

 

CONFIDENTIALTREATMENT

 

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

 

 

**AMENDED AND RESTATED CONTRACT**

 

 

**BETWEEN**

 

 

**GLOBALSTAR, INC.**

 

 

**AND**

 

 

**THALES ALENIA SPACE FRANCE**

 

 

**FOR THE CONSTRUCTION OF**

**THE GLOBALSTAR SATELLITE**

**FOR THE SECOND GENERATION CONSTELLATION**

 

 

**CONTRACT NUMBER GINC-C-06- 0300**

 

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**TABLE OF CONTENTS**

 
| **Article**           | ** **                                                         | **Page** |
|-----------------------|--------------------------------------------------------------------|----------|
|                  |                                                               |     |   |
| 1.                    | Definitions                                                        |     | 4 |
| 2.                    | Scope and Exhibits                                                 |     | 10 |
| 3.                    | Purchaser’s Undertakings                                      |     | 13 |
| 4.                    | Total Price                                                        |     | 14 |
| 5.                    | Bonus Payments                                                     |     | 16 |
| 6.                    | Delivery and Delivery Schedule                                     |     | 19 |
| 7.                    | Payment                                                            |     | 20 |
| 8.                    | Inspection and Acceptance                                          |     | 24 |
| 9.                    | Title and Risk of Loss                                             |     | 26 |
| 10.                   | Access to Work in Progress                                         |     | 27 |
| 11.                   | Progress Meeting,  Presentations and Reports                       |     | 28 |
| 12.                   | Intellectual Property  Rights                                      |     | 28 |
| 13.                   | Public Release of  Information                                     |     | 29 |
| 14.                   | Confidentiality                                                    |     | 30 |
| 15.                   | Intellectual Property  Rights Indemnity                            |     | 30 |
| 16.                   | Limitation of Liability                                            |     | 31 |
| 17.                   | Excusable Delays                                                   |     | 33 |
| 18.                   | Liquidated Damages for Late Delivery / Early  Delivery Incentives  |     | 34 |
| 19.                   | Request For Deviation  (RFD)/Request For Waivers (RFW) and Changes |     | 38 |
| 20.                   | Termination for Default                                            |     | 39 |
| 21.    | Termination for  Convenience                                       |     | 40 |
| 22.                   | Stop Work                                                          |     | 41 |
| 23.                   | Arbitration                                                        |     | 45 |
| 24.                   | Warranty                                                           |     | 46 |
| 25.                   | Communication and  Authority                                       |     | 48 |
| 26.                   | Spacecraft for Phase 3                                             |     | 50 |
| 27.                   | Licenses for Export and  Launch                                    |     | 52 |
| 28.                   | Spacecraft Storage                                                 |     | 53 |
| 29.                   | Options                                                            |     | 54 |
| 30.                   | Key Personnel                                                      |     | 56 |
| 31.                   | Indemnification and  Insurance                                     |     | 56 |
| 32.                   | Effective Date of Contract                                         |     | 58 |
| 33.                   | Representations                                                    |     | 59 |
| 34.                   | General Provisions                                                 |     | 59 |

 

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This Amended and Restated Contract dated as of June 3, 2009, madebetween **Thales Alenia Space France (formerlyknown as Alcatel Alenia Space France)**, a company organized under thelaws of France and having its registered office at 26, avenue Jean-FrançoisChampollion, 31100 Toulouse, France (“Contractor”) and **Globalstar, Inc.**, a Delaware corporationwith offices at 461 South Milpitas Blvd., Milpitas, California 95035, U.S.A. (“Purchaser”).

 

**Recitals**

 

*Whereas,* the Purchaser and theContractor entered into a Contract for the procurement of forty eight (48)satellites and other Deliverable Items and related services for theConstruction of the Globalstar Satellites for the Second GenerationConstellation, dated November 30, 2006 ; and

 

*Whereas*, the Parties havemodified the Contract through Amendments 1, 2, 3, 4, 5, 6, 7 and 8 ; and

 

*Whereas*, the Parties wish toamend and restate the entire Contract as previously amended, including theterms and conditions; and

 

*Whereas*, the Partiesfurther wish to agree to other changes to the Contract to incorporate (a) IncreasePower Beam Step 1 as described in the ATP Ref PJR-0808-005 signed on 19th August, 2008 between the Parties and Step 2 asdescribed in the ATP Ref PJR-0908-001 signed on 17th September,2008 between the Parties, (b) Phase 1&2 and Phase 3 updated line itempricing distribution; (c) Procurement of Phase 3 Long Lead Items for 6Spacecraft (d) alternate Phase 3 delivery schemes and associated SecurityInstrument ; and

 

*Whereas*, the Partiesfurther wish to modify certain provisions of the Contract and its Exhibits andAppendices as a result of such agreement.

 

*Now therefore*, the Parties hereto, inconsideration of the mutual covenants herein expressed, agree with each otheras follows:

 

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**Terms and Conditions**

 

#### **Article 1.**  Definitions

 

Asused in this Contract, the following terms have the meanings indicated :

 

“AnomalySupport” shall mean the support provided by Contractor to Purchaser for thefirst year after the date of the first successful launch of Spacecraft, asdescribed in greater detail in Exhibit A.

 

“AuthorizationTo Proceed” or “ATP” shall mean the document executed by Purchaser andContractor dated October 4th, 2006, as amended from time to time, authorizing Contractor to proceedwith certain Work prior to entry into force of this Contract.

 

“Availablefor Shipment” means that a Satellite has successfully undergone a Pre-ShipmentReview in accordance with section 5.8 of Exhibit A and has been declared readyto be shipped either to the Launch Site or to the storage location as set forthin Article 29.

 

“BackgroundIP” shall mean Intellectual Property developed and owned by Contractor prior toentering into this Contract or outside the scope of this Contract which will beutilized or incorporated by Contractor into any Deliverable Item under thisContract.

 

“Batch”shall mean each group of Spacecraft to be installed on the same Launch Vehicledispenser and to be launched on such Launch Vehicle.

 

“BonusPayments” shall mean the payments which may be made pursuant to the provisionsof Article 5.

 

“BusinessDay” means a day which Purchaser and Contractor are both open for business,other than a Saturday, Sunday or other day on which commercial banks in NewYork City, France, or the State of California are authorized or required by lawto close.

 

“Contract”or “Amended and Restated Contract” shall mean the Contract entered into betweenPurchaser and Contractor, including all Exhibits and Appendices referenced herein,and all amendments that may be made hereto and thereto.

 

“Contractor” shall mean Thales AleniaSpace France.

 

“ContractorIndemnitees” shall have the meaning ascribed to it in Article 31(B).

 

“Day”shall mean, whether or not capitalized, a calendar day.

 

“DeliverableItems” shall mean those items set forth in Article 2(C).

 

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“Delivery”shall mean the delivery of Deliverable Items as set forth in Article 6.

 

“DeliverySchedule” shall mean the timetables for Delivery of the Deliverable Items asset forth in Article 6.

 

“Documentation”shall mean the documentation to be supplied by Contractor to Purchaser aslisted in Exhibit A.

 

“DSS”shall mean Dynamic Satellite Simulator software in executable form, includingupdated versions, as described in Exhibit E.

 

“Early Delivery ED2” shallmean the scheme of Batch early delivery which may be achieved under Phase 2 asset forth in Early Delivery ED2 Scope of Work ref 200331862W Issue 01.

 

“Early DeliveryIncentives” shall mean the amount of incentives to be paid by the Purchaser tothe Contractor in case some Schedule Saving is achieved by the Contractor inthe frame of Early Delivery ED2 Scope of Work implementation.

 

“EDC” shall mean October1, 2006.

 

“EDC2” shallmean the effective date of this Amended and Restated Contract as set forth in Article32.

 

“EscrowAccount” shall mean theescrow account opened by Purchaser with the Escrow Agent pursuant to the EscrowAgreement, as set forth in Article 7(I).

 

“Escrow Agent” shall meanSociété Générale, Société Anonyme with registered capital of [576.285.895.00EUR], having its registered office in 29 Boulevard Haussmann, Paris, France.

 

“Escrow Agreement” shallmean the escrow agreement entered into by and between the Parties and theEscrow Agent on December 21st, 2006 asamended.

 

“Export Credit Facility”means the agreement between the Purchaser and the Lender pursuant to whichPurchaser obtains a loan backed by the COFACE from such Lender for the purposeof financing a portion of this Contract.

 

“FactoryAcceptance Test Review” shall have the meaning set forth in section 5.16 of ExhibitA.

 

“FinalAcceptance” shall be as described in Article 8(A) with respect to Spacecraftand as described in Article 8(B) with respect to DSSs.

 

“FlightReadiness Review” or “FRR” shall mean the review described in section 5.10 of ExhibitA.

 

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“ForegroundIP” shall mean Intellectual Property developed, conceived or first actuallyreduced to practice by the Contractor in the performance of Work under thisContract.

 

“GlobalstarSystem” shall mean the system consisting of the Satellites, Ground ControlNetwork, network control centers and user terminals for the provision ofcommunications services.

 

“GroundControl Network” shall mean the items to be provided by Purchaser composed ofthe following : (i) Satellite Control Network, (ii) the gateway RF terminals and (iii) theGlobalstar data network.

 

“GroundSupport Equipment” or “GSE” shall mean all equipment used or necessary topermit the transportation, handling, integration and test of the Spacecraftduring factory validation testing and pre-Launch operations.

 

“IntellectualProperty” or “IP” shall mean all intellectual property, including withoutlimitation, inventions, patents, copyrights, trade secrets, DSS, Satellite OBPESoftware, Documentation including Technical Data, discoveries, technicalknow-how, techniques, procedures, methods, designs, improvements orinnovations.

 

“IntentionalIgnition” shall mean thetime designated by ARIANESPACE, during the launch sequence when the command toignite is intentionally sent to any one of the motors of the Launch Vehicle forthe purpose of a Launch following a planned countdown.

 

“InterestRate” shall mean the One Month EURIBOR as established by the European FinancialMarkets Association (ACI) and European Banking Federation (EBF) and aspublished on their joint website athttp://www.euribor.org/html/content/euribor_data.html on the payment due dateplus [*] basis points (such one-month EURIBOR rate to “float” by beingre-determined on the first day of each calendar month).

 

“Key Person” shall have the meaningascribed to it in Article 30(A).

 

“KeyPersonnel” shall have the meaning ascribed to it in Article 30(A).

 

“Launch”shall mean the Intentional Ignition ofthe Launch Vehicle followed by Lift-off.

 

“Launch Date” shall mean each datescheduled for Launch of one or more Satellites.

 

“Launch ED2 Objective Dates”shall mean target dates for Batch Launch as set forth in Early Delivery ED2Scope of Work ref 200331862W Issue 01.

 

“Launch ED2 ScheduleSaving” shall mean the actual number of days of advanced launch for each Batchcalculated by taking into account the difference between Nominal Schedule LaunchDate and actual Launch Date for each Batch under Early Delivery ED2 scheme.

 

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“LaunchInsurance” means, with respect to the Satellites, insurance that covers suchSatellites from the period beginning at Intentional Ignition, at coveragelevels determined at sole discretion of Purchaser.

 

“LaunchReadiness Review” or “LRR” shall mean the review described in section 5.11 of ExhibitA.

 

“LaunchServices” shall mean the services provided by a Launch Services Providerpursuant to a Launch Services Agreement.

 

“LaunchServices Agreement” shall mean each agreement between a Launch ServicesProvider and Purchaser for the launch of one or more Spacecraft.

 

“LaunchServices Provider” shall mean each company with whom Purchaser contracts forthe launch of one or more Spacecraft.

 

“LaunchSite” shall mean each launch facility provided by a Launch Services Provider,including all buildings and testing, storage and other facilities thereon.

 

“LaunchSupport Services” shall mean the services Contractor shall provide pursuant tothis Contract in support of the launch of the Spacecraft, as more fully setforth in section 3.4 of Exhibit A.

 

“Launch Vehicle” shall mean each vehicleprovided by the Launch Services Providers on which one or more Spacecraft areto be launched. The list of possible Launch Vehicles is included in section 1.1of Exhibit A.

 

“Lender” means BNP Paribas, a French companychartered as a bank under the laws of France that shall make a loan toPurchaser and being the leader and arranger of a pool of commercial bank.

 

“LicensedItems” shall mean any Deliverable Items being furnished pursuant to, or to beutilized in connection with, this Contract which require the approval,permission or license from a government with respect to export control laws ofsuch government.

 

“Lift-Off”shall mean the disconnection of thelift-off plug if such event follows Intentional Ignition.

 

“LongLead Items” or “LLI” shall mean the items to be procured in advance for themanufacture of Phase 3 Spacecraft as set forth in Article 26.

 

“MilestoneEvents” shall mean those milestones which are eligible for payment as set forthin the column entitled “Milestone Events” in Exhibit F1, F2 or F3, asapplicable.

 

“MissionOperations Support Services” or “MOSS” shall mean the services Contractor shallprovide pursuant to this Contract as more fully set forth in section 3.5 of ExhibitA.

 

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Asthe Contractor has been awarded a contract for delivery of the SatelliteControl Network (Ref GINC-C-07-0320), and according to Article 3.5 of Exhibit A,Contractor shall not perform the additional work as set forth in Annex D of ExhibitA.

 

“Nominal Schedule LaunchDates” shall mean dates of launch foreseen for the different Batches under thisContract as set forth in the Table in Article 18.2.

 

“Party”or “Parties” shall mean one or both of Contractor and Purchaser.

 

“Phase” shall mean each of the phasesaccording to which the Contract shall be performed as set forth in Article 2(D)and Exhibit F.

 

“PreliminaryDesign Review” or “PDR” shall mean the review described in section 5.4.1 of ExhibitA.

 

“Pre-ShipmentReview” or “PSR” shall mean the review described in section 5.8 of Exhibit A.

 

“Pre-ShipmentReview Acceptance Certificate” shall mean the certification as set forth in Article8, provided by Contractor to Purchaser upon successful completion of aPre-Shipment Review.

 

“ProgramReadiness Review” or “PRR” shall mean the review described in section 5.2 of ExhibitA.

 

“Proto-FlightModel Spacecraft” or “PFM” shall mean the Spacecraft which shall be tested at qualification levels and acceptance durationas a proto flight model.

 

“PSR ED2 Objective Dates”shall mean PSR target dates for the different Batches as set forth in EarlyDelivery ED2 Scope of Work ref 200331862W Issue 01.

 

“PSR ED2 ScheduleSaving” shall mean the actual number of days of advanced delivery for the lastsatellite of each Batch calculated by taking into account the difference betweenDelivery Date and the actual date PSR ED2 is achieved for the last satellite ofeach Batch.

 

“Purchaser” shall mean Globalstar, Inc.

 

“PurchaserIndemnitees” shall have the meaning ascribed to it in Article 31(A).

 

“PurchaserResidents” shall mean the employees or representatives of Purchaser located inthe Contractor’s facilities for the purpose of technical management of theContract.

 

“RegularDelivery” shall mean the delivery of the Spacecraft to be delivered under Phase3 as set forth in Exhibit F.

 

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“Required Delivery Date(s)” shall mean each date of PSR required forthe different Batches under this Contract as set forth in the Table in Article 18.1(B).

 

“Satellite”or “Spacecraft” shall mean any spacecraft to be constructed and deliveredpursuant to this Contract, as generally described in Exhibit A and Exhibit B.

 

“SatelliteControl Network” shall mean the items to be provided by Purchaser composed ofthe following : (i) SatelliteOperations Control Centers (SOCCs) (Main, Development and Back Up SOCCs), (ii) theTelemetry Command Units (TCUs) and (iii) the In Orbit Test Equipment (MCE andCMA), as set forth in section 6.5 of Exhibit A.

 

“SatelliteOBPE Software” shall mean the software in executable form and source code form,including updated versions, to be delivered as set forth in section 3.1 of ExhibitA.

 

“SatellitePost-Shipment Verification Review” shall mean a visual inspection by Contractorof a Satellite after delivery to the Launch Site, to verify that the Satellitehas not been degraded during transportation from Contractor’s facility, as setforth in section 5.9 of Exhibit A.

 

“SecurityAmounts” shall mean, in the frame of Phase 3, the amounts as per Exhibit F tobe deposited on the Escrow Account or any other Security Instrument agreed betweenthe Parties pending the different Phase 3 schedule options from Article 26selected by the Purchaser.

 

“SecurityInstrument” shall mean the financial security mechanism to be agreed in theform and substance between the Parties and to be set by the Purchaser prior toContractor’s performance on Phase 3 activities as set forth in Article 26 (D).

 

“SimulatorCompletion Review” shall mean verification of a DSS performance in stand-alonemode, similar to the Factory Acceptance Test Review, but after installation atPurchaser’s designated DSS installation site, as set forth in section 1.1 andsection 5.16 of Exhibit A.

 

“StopWork Order” shall mean a written order from Purchaser to Contractor requestingthat Contractor cease, and cause Subcontractors (as applicable) to cease,performance of all or part of the Work for the period specified in such order,as such period may be extended in accordance with the Contract, as set forth inArticle 22(A).

 

“StoragePlan” shall mean a plan for the storage of one or more Spacecraft at a sitedesignated in the plan, as set forth in section 3.6.1 of Exhibit A.

 

“Subcontractors”shall mean all subcontractors of Contractor at any tier.

 

“TechnicalData” shall mean information which is required for the design, development, production,manufacture, assembly, operation, repair, testing, maintenance or modificationof the Spacecraft and the DSS, including documentation.

 

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“TotalPrice” shall mean the firm fixed price payable for the Work as defined in Article4(A).

 

“USDollar” or “USD” shall mean a dollar of United States currency.

 

“WIP”shall mean all Work in progress.

 

“Work”shall mean all design, development, construction, manufacturing, labor,services, and acts of Contractor, including tests to be performed, requiredunder Exhibit A (except section 6 thereof), and including all equipment,materials, articles, matters, services and things to be furnished by Contractorunder this Contract.

 

**Article 2. Scope and Exhibits**

 

(A)                  Contractor shall provide the necessarypersonnel, material, services and facilities to perform the Work in accordancewith the provisions of this Contract, including the Exhibits and Appendiceslisted below, which are attached hereto or incorporated by reference and made apart hereof, and to make delivery to Purchaser in accordance with the DeliverySchedule as provided in Article 6.

 
| Exhibit A  | GBS2 Space Segment  Globalstar Statement of Work                                                                                                                                                                                                                                                                                                                       |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|       | Ref GS-06-1130 dated  October 1, 2006 — Issue 01 amended by Early Delivery ED2 Scope of Work Ref  2003 318 62 W Issue 01; amended by Satellite Mass Simulator Change Proposal  Ref 200329592G Rev1;  amended by Latch  Valve OFF Command Change Proposal Ref TAS-08-DCI-37; and amended by Increase  Power Beam document Ref.100181703F-EN dated August 2008 |
| Exhibit B  | Globalstar II LEO  Satellite Performance Specification                                                                                                                                                                                                                                                                                                                 |
|       | Ref 200221417A issue 7                                                                                                                                                                                                                                                                                                                                                 |
| Exhibit C  | Satellite Program Test Plan                                                                                                                                                                                                                                                                                                                                            |
|       | Ref 200221933 issue 4                                                                                                                                                                                                                                                                                                                                                  |
| Exhibit D  | Globalstar 2 Product  Assurance Plan                                                                                                                                                                                                                                                                                                                                   |
|       | Ref 200217065 S, Version 03 dated November 24, 2006                                                                                                                                                                                                                                                                                                                    |
| Exhibit E  | Globalstar Dynamic  Satellite Simulator Requirements Specification                                                                                                                                                                                                                                                                                                     |
|       | Ref 3474-05-0023 Rev 1_V2, dated November 20,  2006                                                                                                                                                                                                                                                                                                                    |
| Exhibit F  | Payment Plans                                                                                                                                                                                                                                                                                                                                                          |
| Exhibit G  | Form of Escrow Agreement                                                                                                                                                                                                                                                                                                                                               |
| Exhibit H  | Bonus Payments Criteria (EBITDA  and satisfactory operation)                                                                                                                                                                                                                                                                                                           |
| Exhibit I  | Globalstar Patent  Portfolio                                                                                                                                                                                                                                                                                                                                           |
|       |                                                                                                                                                                                                                                                                                                                                                                   |
| Appendix 1 | Mutual Nondisclosure  Agreement between Globalstar, Inc and Thales Alenia Space France (formerly  Alcatel Alenia Space France), dated November 2nd 2006.                                                                                                                                                                                                          |
| Appendix 2 | Technical Assistance  Agreement (DTC Case TA 3474-05) and subsequent amendments.                                                                                                                                                                                                                                                                                       |

 

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| Appendix 3 | Technical Assistance  Agreements for Launch Services(DTC CaseTA0645-07) and subsequent amendments. |
|------------|----------------------------------------------------------------------------------------------------|

 

(B)                    In case of any inconsistencies among thearticles of this Contract and any of the Exhibits, the following order ofprecedence shall apply :

 

Appendix2

Termsand Conditions of Contract

Allother Appendices

 
| Exhibit F | Payment Plans                                                                                                                                                                                                                                                                                                               |
|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Exhibit A | GBS2 Space Segment Globalstar  Statement of Work                                                                                                                                                                                                                                                                            |
|      | Ref GS-06-1130 dated  October 1, 2006 — Issue 01 amended by Early Delivery ED2 Scope of Work Ref  2003 318 62 W Issue 01; amended by Satellite Mass Simulator Change Proposal  Ref 200329592G Rev1; amended by Latch Valve OFF Command Change Proposal Ref  TAS-08-DCI-37, and amended by Increase Power Beam document |
|      | Ref.100181703F-EN dated  August 2008                                                                                                                                                                                                                                                                                        |
| Exhibit B | Globalstar II LEO  Satellite Performance Specification                                                                                                                                                                                                                                                                      |
|      | Ref 200221417A issue 7                                                                                                                                                                                                                                                                                                      |
| Exhibit C | Satellite Program Test  Plan                                                                                                                                                                                                                                                                                                |
|      | Ref 200221933 issue 4                                                                                                                                                                                                                                                                                                       |
| Exhibit D | Globalstar 2 Product  Assurance Plan                                                                                                                                                                                                                                                                                        |
|      | Ref 200217065  S, Version 03 dated November 24, 2006                                                                                                                                                                                                                                                                        |
| Exhibit E | Globalstar Dynamic  Satellite Simulator Requirements Document                                                                                                                                                                                                                                                               |
|      | Ref 3474-05-0023 Rev 1_V2, dated November 20, 2006                                                                                                                                                                                                                                                                          |
| Exhibit G | Form of Escrow Agreement                                                                                                                                                                                                                                                                                                    |
| Exhibit H | Bonus Payments Criteria  (EBITDA and satisfactory operation)                                                                                                                                                                                                                                                                |
| Exhibit I | Globalstar Patent  Portfolio                                                                                                                                                                                                                                                                                                |

 

(C)                   The scope of this Contractis the design, production, testing, and delivery of the equipment and services,as summarized in this Article 2(C), and represents a firm commitment byContractor and a firm order by Purchaser for all equipment and services. Thefollowing constitute the Deliverable Items :

 

(i)                         Forty eight(48) low earth-orbiting communications Spacecraft, one of which shall be a PFM.The Spacecraft shall be manufactured to meet all requirements of this Contract(including Exhibits A and B), tested in accordance with Exhibit C, deliveredand processed at the selected Launch Site, or delivered to storage at Purchaser’sdirection, in accordance with Article 29.

 

(ii)                      Two (2) DSSs,as described in Exhibit E.

 

(iii)                   Launch Support Services forthe Spacecraft, including launch vehicle integration, as generally described insection 3.4 of Exhibit A.

 

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(iv)                    Mission Operations SupportServices (including training of Purchaser’s personnel and in-orbit testing ofthe Spacecraft), as described in section 3.5 of Exhibit A. As the Contractorhas been awarded a contract for delivery of the Satellite Control Network (RefGINC-C-07-0320), and according to Article 3.5 of Exhibit A, Contractor shallnot perform the additional work as set forth in Annex D of Exhibit A.

 

(v)                        Anomaly Supportas described in section 3.5.4 of Exhibit A.

 

(vi)                     Documentation as describedin section 4 of Exhibit A.

 

(vii)                  Satellite OBPE Software forthe Spacecraft as described in section 3.1 of Exhibit A.

 

(viii)               On-boardpropellant for each Spacecraft.

 

(ix)                       One (1) SatelliteMass Simulator as described in Change Proposal Ref 200329592G Rev1

 

Inaddition to delivering the Deliverable Items set forth herein, Contractor willprovide all Ground Support Equipment, which shall be used by Contractor andremain its property.

 

(D)                     The Work shallbe performed pursuant to the following Phases :

 

(i)                           Phase 1 and 2 includenon-recurring engineering and manufacture of a PFM and the manufacture anddelivery of twenty-four (24) Spacecraft with associated Launch Support Servicesand MOSS, Long Lead Items (“LLI”) for the anticipation of the advanced deliveryof six (6) Spacecraft from Phase 3 ; and

 

(ii)                        Phase 3 includes themanufacture and delivery of twenty-three (23) Spacecraft and the PFM withassociated Launch Support Services. For the first successful launch ofSatellites delivered under Phase 3 , Contractor shall assign satellitespecialists (including payload, thermal, AOCS, power, data handling, missionanalysis) to support Purchaser for the early operations (spacecraftacquisition, stabilization, initialization and orbit raising).

 

Inanticipation of advancing delivery of six (6) Spacecraft of Phase 3, theParties agree that the Contractor shall procure the LLI upon EDC2. Purchaser’swritten notification for the completion of the manufacturing and testing of thesix (6) Spacecraft shall be as set forth in Article 26.

 

Inaddition, the Purchaser shall have the option to request to the Contractor inwriting the postponement of delivery of either all twenty three (23) Spacecraftof Phase 3 or the balance of seventeen (17) Spacecraft of Phase 3. Theconditions for such postponement shall be as set forth in Article 26.

 

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**Article 3. Purchaser’s Undertakings**

 

(A)                    Purchaser’s undertakings are contained inor identified in this Contract and Exhibit A. In particular, Purchaser shall perform the following :

 

(i)                           Purchaser willprocure the Launch Services to perform the launch mission including theSatellite(s) dispenser in accordance with one or more Launch ServicesAgreements with one or more Launch Services Providers. As promptly aspracticable, and in any event no later than three (3) months after PDR as setforth in section 3.4.2 of Exhibit A, Purchaser will designate in writing toContractor the selected Launch Services Provider(s) (with a maximum of two(2)), the Launch Sites and the targeted launch periods. Purchaser will alsopromptly notify Contractor in the event of any changes in any launch scheduleafter Purchaser learns of such changes. Purchaser shall use its reasonable bestefforts to cause each selected Launch Services Provider to name Contractor andits Subcontractors as additional insureds under each such Launch ServicesProvider’s launch risk third-party liability insurance policy.

 

(ii)                        Purchaser willfurnish to Contractor decryptor cards and documentation for each Spacecraft asset forth in section 6.3 of Exhibit A. The decryptor cards and documentation shall betransported at Purchaser’s risk and expense Delivered Duty Unpaid, Incoterms2000, to the place and at the date as set forth in section 6.3 of Exhibit A.Any defect on such items or part thereof delivered by Purchaser to Contractorshall be corrected or replaced at Purchaser’s expense and any costs incurred byContractor as a result of such defect and documented to Purchaser shall beborne by Purchaser.

 

(iii)                     Purchaser shall provide, atPurchaser’s Satellite Operations Control Center (“SOCC”) facilities, two (2) computersand a Satellite OBPE Software development workstation to host the software forthe DSS as set forth in section 6.6 of Exhibit A.

 

(iv)                    Subject to governmentrequirements, Purchaser will arrange with the Launch Services Provider toprovide to Contractor and its Subcontractors free of charge access to theLaunch Sites, utilities (including without limitation power, phone and datalines) and services (including without limitation transportation) at the LaunchSites necessary to permit Contractor to (i) support the launch schedule; (ii) conducttesting and (iii) provide the Launch Support Services.

 

(v)                       Subject togovernment requirements, Purchaser will provide access to Contractor and itsSubcontractors at each of Purchaser’s SOCC facilities and In Orbit TestEquipment, on a timely basis, as necessary to permit Contractor to (i) deliver,install and test the DSSs, and (ii) perform the MOSS.

 

(vi)                    Purchaser shall obtainLaunch Insurance prior to Launch, at coverage levels to be determined at thesole discretion of Purchaser. In addition, Purchaser shall obtain from itsinsurer providing Launch Insurance waivers of any subrogation rights againstContractor or its Subcontractors, and shall provide evidence of such waivers toContractor sixty (60) Days prior to the launch of any Satellite and shallprovide Contractor a certificate of such insurance coverage at Contractor’srequest.

 

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(vii)                 Purchaser shall beresponsible for obtaining all necessary approvals, authorizations and/orlicenses to launch, test,control and operate the Satellites.

 

(viii)              Purchaser shall beresponsible for providing in a timely manner the Satellite Control Network asset forth in Exhibit A.

 

(B)                    Contractor shall promptly notify Purchaser of anyfailure by Purchaser toperform any of its obligations under this Contract which may cause Contractor to bedelayed, to incur additional costs, or both. In addition, Purchaser shall promptly notifyContractor in writing of any event which may delay or prevent the performanceby Purchaser ofany of its obligations under this Contract which may cause Contractor to bedelayed, to incur additional costs, or both.

 

Any failure by Purchaserto perform any of its obligations under this Contract which causesContractor to be delayed, to incur additional costs, or both, shall cause (i) incase of delay, an extension of the Delivery Schedule to reflect the actualdelay incurred by Contractor in the performance of the Work as a result of suchfailure (such delay to be documented to Purchaser) and (ii) in case of additional costs, payment toContractor by Purchaser of reasonable costs incurred by Contractor as a resultof such failure (such costs to be documented to Purchaser).

 

**Article 4.  Total Price**

 

(A)                  Purchaser shall pay toContractor for the Work to be performed the Total Price as set forth in the Tablebelow in accordance with the payment plans as set forth in Exhibit F, as suchTotal Price may be adjusted in accordance with the provisions of this Contract.

 

The Total Price shallbe deemed to include all transportation and insurance charges for delivery ofeach Deliverable Item as set forth in Article 6 and Exhibit A.

 

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| **Item**   | ** ** | **Description**                                                                                                       | ** ** | **Price in Euro for  Regular Delivery** | ** ** |
|------------|------------|-----------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|
| 1          |       | Spacecraft for Phase 1 and Phase 2 (See Pricing  Details) *                                                           |       | 452,781,326                             |       |
| 1Bis       |       | Rebalancing  ̈Phase 1&2  and Phase 3 distribution (with payment postponed to Phase 3) (See Pricing Details)** |       | 3,864,000                               |       |
|       |       | Sub-total Phase 1 & 2                                                                                             |       | 456,645,326                             |       |
| 2          |       | Spacecraft for Phase 3 (See Pricing Details)***                                                                       |       | 222,240,232                             |       |
| ** ** | ** ** | **Total  Price**                                                                                                      | ** ** | **678,885,558**                         | ** ** |

 

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(*)Pricing Details:

[*]

 

(**)Pricing Details:

[*]

 

(****) Note that pricing forLaunch Support Services as defined in Exhibit A assumed the performance ofseven (7) launch campaigns with up to two (2) of the four (4) candidate LaunchVehicles. Upon Purchaser’s selection of the Launch Vehicles and number oflaunch campaigns required, Contractor shall review the Launch Support Servicespricing and notify Purchaser of any revised pricing including basis of estimatefor the pricing difference.

 

(B)                      In addition tothe Total Price that Purchaser shall pay in accordance with Article 4(A),Purchaser shall also be responsible for paying all custom duties, VAT, importtaxes, sales taxes or charges, taxes, fees or duties of similar naturewhatsoever levied in the U.S.A. or any political division thereof or in thecountry where the Launch Site is located or the services under this Contractare performed (except for services rendered in France or Italy or by theSubcontractors in their countries) or in the country where the Spacecraft isplaced in storage as set forth in Article 29.

 

Such payments will be made by Purchaser in compliance with theregulations in force at that time and will not be deducted from any payment ofprice called for pursuant to Article 4(A) of this Contract. Purchaser shallreimburse Contractor for any payment to be made by Purchaser pursuant to this Article4(B) but made by Contractor within thirty (30) Days of receipt by Purchaser ofthe electronic invoice with all relevant documentation evidencing liability forand payment of such tax, fees or duties.

 

(C)                      All payments byPurchaser pursuant to this Contract shall be made without deduction or offsetof any income taxes, withholding or similar taxes, if any, of any naturewhatsoever levied by Purchaser’s country, any political division thereof or anyother country where the Work is performed or by the country from which paymentis made, unless Purchaser shall be compelled to make such deduction bygovernment regulation, in which case Purchaser shall pay, within thirty (30)Days of receipt by Purchaser of the relating electronic invoice, any additionalamount necessary in order that the net amount of payments received by theContractor shall be equal to the amount of payments agreed to be paid pursuantto this Contract.

 

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(D)                     Contractorshall be entirely responsible for all present and future taxes, levies andduties whatsoever imposed under this Contract in (i) France and (ii) any of theSubcontractors’ countries (including Italy), to the extent relating to theperformance of the Work, which taxes shall be paid by the Contractor or theSubcontractors when they become due.

 

**Article 5. Bonus Payments**

 

(A)                    Purchaserand Contractor agree that, at the end of the first quarter of the calendar yearfollowing the later to occur of the delivery of forty-eight (48) Spacecraft andthe successful launch of the twenty-fourth Spacecraft (the “Bonus Payment StartDate”), and continuing for a period of up to fifteen (15) years thereafter,Contractor shall annually be eligible to receive from Purchaser a Bonus Paymentpayable in arrears and determined as set forth in this Article 5. The total ofsuch Bonus Payments shall not be more than Seventy-Five Million (75,000,000) USDollars.

 

(B)                      Purchaser shall provide to Contractor, by the end of thefirst quarter of each year following the date of PSR of the twenty-fourth (24th) Spacecraft, a written statement of Bonus Payment amount andeligibility comprising of Cumulative EBITDA as defined below, status ofsatisfactory operation of the Spacecraft and timeliness of delivery ofSpacecraft. Payment of Bonus Payments shall be due and payable within thirty(30) Days after the date of receipt by Purchaser of the emailed invoice fromContractor.

 

(C)                  Bonus Payments shall only be made to the extent that thefinancial performance of Purchaser’s business for the period from January 1,2007 to December 31 of each year is equal to or better than the financialprojections for the business for the same period of time as set forth in ExhibitH1. Financial performance shall be measured in accordance with GAAP, using theearnings before interest, taxes, depreciation and amortization of Purchaser forthe total periods in question (“Cumulative EBITDA”).  The annual Bonus Payment shall be furtherlimited and conditioned as a result of (a) the failure of Satellites to bedelivered on time or to meet the requirements of Exhibit B (as set forth in Article5(E) and Article 5(F) below) and (b) the failure of Satellites to operatesuccessfully in orbit (as set forth in Article 5(E) and Article 5(F) below).

 

(i)                           No Bonus Payment shall be made to Contractor wheneverPurchaser’s Cumulative EBITDA for the period from January 1, 2007 to December 31of the year for which payment of a Bonus Payment would be due is less than theprojected Cumulative EBITDA for the identical period as set forth on Exhibit H1.

 

(ii)                        Whenever Purchaser’s Cumulative EBITDA for the period from January1, 2007 to December 31 of the year for which payment of a Bonus Payment wouldbe due is equal to or greater than the projected Cumulative EBITDA for theidentical period, Purchaser shall make the maximum Bonus Payment permissiblepursuant to the terms of this Article 5. Each year Purchaser’s CumulativeEBITDA exceeds the projected

 

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Cumulative EBITDA for theidentical period and the conditions of Article 5(E) and Article 5(F) are met,the annual Bonus Payment of [*] US Dollars shall be paid.

 

(iii)                     For so long as Purchaser may be obligated to pay Bonus Paymentsto Contractor pursuant to this Article 5, Purchaser shall calculate CumulativeEBITDA using the same methodology as is used in Exhibit H1. Nothing in this Article5 shall prohibit Purchaser from changing its accounting methodology for otherpurposes, so long as Purchaser is able and does continue to use the samemethodology to calculate Cumulative EBITDA.

 

(D)                     In each of the fifteen (15) years that a Bonus Payment may bemade, as well as during the years prior to the Bonus Payment Start Date whenContractor may earn the right to receive Bonus Payment after the Bonus PaymentStart Date, [*] of each such payment or earned right shall be furtherconditioned upon the delivery schedule as set forth in paragraphs (E)(i) and(F)(i) of this Article 5, and [*] of each such payment or earned right shall befurther conditioned upon satisfactory operation of Satellites as set forth inparagraphs (E)(ii) and (F)(ii) of this Article 5.

 

(E)                       Each year after the delivery of the first twenty-four (24) ofSatellites and prior to the Bonus Payment Start Date, Contractor shall earn theright to receive a Bonus Payment to be calculated in accordance with this Article5(E). Such Bonus Payments shall not be paid by Purchaser until the firstpayment date after the Bonus Payment Start Date. The Bonus Payment earned foreach year after the delivery of the first twenty-four (24) Satellites until theBonus Payment Start Date shall be paid at the same time in addition to thefirst annual Bonus Payment to be paid pursuant to this Article 5(E).

 

(i)                           The [*] portion of such Bonus Payment related to timelydelivery shall be earned for each Batch of Spacecraft delivered thirty (30)Days or less after the scheduled PSR date for the last Spacecraft of thatBatch. Calculation of the Bonus Payment payable for each year of this periodshall be equal to [*] US Dollars times the number of Spacecrafts delivered ineach Batch through the year for which the calculation of the Bonus Paymentearned is made.

 

(ii)                        The remaining [*] portion of the Bonus Payment shall beearned for each Satellite operating satisfactorily in space accordingto the criteria defined in Exhibit H2.Calculation of the Bonus Payment payable for each year of this period shall bemade by multiplying [*] US Dollars times the number of Satellites operatingsuccessfully as of December 31 of each year for which the calculation is beingmade.

 

(F)                       During the period from the Bonus Payment Start Date to theend of the fifteen (15) year thereafter, Contractor shall be entitled toreceive annual Bonus Payments to be calculated in accordance with this Article 5(F).

 

(i)                           The [*] portion of the annual Bonus Payments related totimely delivery shall be calculated by multiplying [*] US Dollars times thenumber of Spacecraft delivered before or within at least thirty (30) Days afterits scheduled PSR date. The amount shall

 

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be the portion of eachannual Bonus Payment related to timely delivery for each year during thisperiod.

 

(ii)                        The remaining [*] portion of the annual Bonus Payments shallbe earned if the number of satisfactorily operating satellites is equal to orgreater than the number given in Table 1 for a given year for a given DeliverySchedule.  Satellites are deemed to besatisfactorily operating if the criteria defined in Exhibit H2 are met.If the number of satisfactorily operating satellites is less than the numbergiven in Table 1 for a given year but greater than or equal to forty (40), areduced Bonus Payment may be made.

 

For each satellite less than the number in Table 1,the Bonus Payment portion shall be reduced by [*] as long as the total numberof operating satellites is greater than or equal to forty (40). For example, in2020 if there are only forty-two (42) satisfactorily operating satellites, only[*] of the possible [*] portion of the annual Bonus Payment shall be paid; ifforty-one (41) satisfactorily operating satellites, only [*] of the possible[*] portion of the annual Bonus Payment shall be paid; if forty (40) satisfactorilyoperating satellites, only [*] of the possible [*] portion of the annual BonusPayment shall be paid; however, if only thirty-nine (39) satisfactorilyoperating satellites, no portion of the possible [*] portion of the annualBonus Payment shall be paid.

 

Table 1

Minimum Number ofOperating Satellites In a Given Year for Regular Delivery Schedule

 
| ** ** | ** ** | **Regular  Delivery** |
|------------|------------|-----------------------|
| 2011       |       |                  |
| 2012       |       |                  |
| 2013       |       | 46                    |
| 2014       |       | 46                    |
| 2015       |       | 46                    |
| 2016       |       | 45                    |
| 2017       |       | 45                    |
| 2018       |       | 44                    |
| 2019       |       | 44                    |
| 2020       |       | 43                    |
| 2021       |       | 43                    |
| 2022       |       | 42                    |
| 2023       |       | 42                    |
| 2024       |       | 41                    |
| 2025       |       | 40                    |
| 2026       |       | 12                    |
| 2027       |       | 4                     |

 

(G)                      For the purpose of this Article 5, a Spacecraft placed instorage pursuant to Article 29 or a Spacecraft which is a total loss as aresult of a launch failure shall be deemed to

 

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beoperating in orbit satisfactorily. In addition, the conditions of Articles 5(E)(i)and 5(F)(i) relating to late delivery shall apply to a Spacecraft put intostorage.

 

(H)                               Should the Purchaser decideto exercise the option to postpone the delivery of Spacecraft from Phase 3 asset forth in Article 26 or the total number of Spacecraft to be delivered underthe Contract be less than 48, then the Parties agree, in good faith, to adjustaccordingly the present Article 5 for purpose of Bonus Payment on anappropriate basis.

 

**Article 6. Delivery and Delivery Schedule**

 

(A)                  The Delivery Schedule isidentified in the Table below. Delivery of a Spacecraft (other than Spacecraftdelivered for storage as directed by Purchaser in accordance with Article 29)shall be deemed to have occurred at Pre-Shipment Review. Delivery of a DSS shall bedeemed to have occurred upon completion of the Simulator Completion Review. Delivery of Satellite MassSimulator shall be deemed to have occurred upon Mass Simulator Delivery ReviewBoard.

 
| **Item** | ** ** | **Description**             | ** ** | **Delivery Date or  Date of Performance** | ** ** | **Delivery Place**                |
|----------|------------|-----------------------------|------------|-------------------------------------------|------------|-----------------------------------|
| 1        |       | Spacecraft                  |       | Per Exhibit F                             |       | Contractor’s facilities      |
| 2        |       | Satellite Propellant        |       | Per Exhibit A                             |       | Per Article 6(C)                  |
| 3        |       | DSS                         |       | Per Exhibit A                             |       | Milpitas, CA  El Dorado Hills, CA |
| 4        |       | Satellite OBPE Software     |       | Per Exhibit A                             |       | Milpitas, CA                      |
| 5        |       | Launch Support Services     |       | Per Exhibit A                             |       | Launch Site                       |
| 6        |       | MOSS                        |       | Per Exhibit A                             |       | Milpitas, CA                      |
| 7        |       | Documentation               |       | Per Exhibit A                             |       | Milpitas, CA                      |
| 8        |       | Satellite Mass Simulator(*) |       | Sept 01, 2009                             |       | France, Arianespace (Bordeaux)    |

 

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(*) At the end of the tests, thePurchaser shall ship back to Contractor’s facility in Cannes the satellite masssimulator with its container for destruction purposes. The satellite masssimulator will therefore be delivered on a temporary basis. Cost for theshipping back to Cannes shall be paid by the Contractor.

 

(B)                    The delivery dates for Spacecraft to bedelivered under Phase 3 shall be made pursuant to the Regular Delivery as setforth in Exhibit F and the payment plan shall be the one corresponding to theRegular Delivery as set forth in Exhibit F.

 

(C)                    Each Spacecraft which isAvailable for Shipment shall be transported along with associated GroundSupport Equipment at Contractor’s risk and expense Delivered Duty Unpaid,Incoterms 2000, to the airport nearest to the Launch Site selected for thelaunch of the respective Spacecraft, unless Purchaser directs Contractor todeliver the Spacecraft to storage in accordance with Article 29.

 

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Thepropellant shall be transported at Contractor’s risk and expense Delivered DutyUnpaid, Incoterms 2000, to the harbour agreed with the Launch Service Provider.The Launch Service Provider shall be responsible at its own costs to transport (i)the Spacecraft from the airport to the Launch Site, (ii) the propellant fromthe harbour to the Launch Site, and (iii) the Satellites and the propellantwithin the Launch Site.

 

Ifthe Spacecraft requires repair after delivery to the Launch Site, alltransportation from the Launch Site to the repair facility and back shall be atthe expense of Contractor. Contractor shall be responsible at its risk andexpense for removing or disposing all of its Ground Support Equipment andremaining Satellite propellant, if any, used on or brought to the Launch Sitefrom the Launch Site after completion of launches.

 

TheDSSs, the Satellite OBPE Software and the Satellite Mass Simulator shall betransported at Contractor’s risk and expense Delivered Duty Unpaid, Incoterms2000, to the required destination as specified in the Table above.

 

(D)                   The Contractor shall promptly notify Purchaser inwriting of any event which may delay or prevent the performance by Contractor ofany of its obligations under this Contract.

 

**Article 7. Payment**

 

(A)                    Payment terms shall be inaccordance with this Article 7 and Exhibit F to this Contract. Purchaser shallpay all invoices (excluding the Amended and Restated Contract down payment)within thirty (30) Days after the date of receipt of an emailed invoiceconfirmed electronically. Purchaser shall have the right to draw down from theEscrow Fund to make payments if the Balance of the Escrow Fund is greater thanthe Deposit Requirement for the then current Quarter or if the Parties mutuallyagree to a draw down.

 

(i)                           Starting January1, 2007 and until the Contract is paid in full, Contractor shall on the firstDay of each quarter provide Purchaser with one (1) original of the invoice forthe total amount of payments due during that quarter, including both calendarpayments and payments for Milestone Events, in accordance with Exhibit F. Sothere is no misunderstanding, the Parties agree that the invoice for andpayment of the first payment (fourth quarter of 2006) shall be handled as setforth in Article 32.

 

(ii)                        Beginning with the quarter that starts April 1, 2007, Contractor shalldeliver to Purchaser, along with each quarterly invoice, supportingdocumentation confirming completion of the Milestone Events which were to havebeen achieved during the quarter prior to the quarter in which the invoice isdelivered.

 

(iii)                      Notwithstandingparagraph (i) and (ii) above, beginning with the period that starts July 1,2008 and ending beginning of the first yearly quarter following EDC2,Contractor shall invoice Purchasermonthly payments in accordance with Exhibit F. Contractor shall provide supporting documentation confirming completionof Milestone

 

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Eventswhich were to have been achieved during the previous quarter with first monthlyinvoice of the following quarter.

 

(B)                      Should Contractor fail toachieve during a given quarter one or more Milestone Events for which paymenthas already been made, then Contractor shall deduct the amount relating to eachsuch unachieved Milestone Event from the invoice Contractor delivers at thebeginning of the following quarter.

 

Except as set forth in thepreceding sentence, any delay in the achievement of a particular MilestoneEvent will have no impact on the amount invoiced at the beginning of thesubsequent quarter.  Any amount deductedin accordance with this Article 7(B) will be re-invoiced with supportingdocumentation submitted with the invoice for the quarter following completionof such Milestone Event, and Purchaser shall make payment to Contractor inaccordance with such invoice after such completion.

 

(i)                           If after five (5) Business Days from thedate of receipt of an invoice, Purchaser has not notified Contractor of adispute of the invoice, stating the reason for such dispute, then all MilestoneEvents scheduled to occur during the preceding quarter shall be deemedcomplete, and payment shall be due and payable within thirty (30) Days ofreceipt of the emailed invoice. For purposes of Exhibit F, a Milestone Eventshall be deemed to have been completed by Contractor when all requirementsassociated with the particular Milestone Event shall have been completed inaccordance with the provisions of the Contract.

 

(ii)                        If Purchaser disputes only part of a MilestoneEvent, then Purchaser shall pay to the Contractor the amount corresponding tothe undisputed portion of such Milestone Event.

 

The Parties agree to negotiate in good faith thesettlement of the disputed portion and the agreed upon amount shall be paid byPurchaser after such settlement. No dispute with respect to the payment of anyamount under this Contract shall relieve the disputing Party of its obligationto pay all other amounts due and owing under this Contract. The Parties agreethat in no event shall there be a dispute about a calendar payment, and that adispute over a Milestone Event payment shall not relieve Purchaser of itsobligation to make subsequent payments.

 

(C)                    RESERVED

 

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(D)                   Contractor may, from time to time, submitan invoice requesting partial payment for a partially completed MilestoneEvent. If Purchaser, in Purchaser’s reasonable judgment, determines suchpartial payment to be appropriate under the circumstances, then Purchaser shallmake such partial payment, and the remainder of the Milestone Event paymentshall be paid at such time as the Milestone Event is completed.

 

(E)                 In the event that Contractorachieves any Milestone Event in advance of the scheduled achievement dateprovided for in Exhibit F and provided that the cumulative amount of paymentsshall not exceed the schedule set forth in Exhibit F, then, subject toPurchaser’s agreement, the Contractor shall be entitled to invoice thePurchaser for such achieved Milestone Event. Purchaser shall pay for any suchMilestone Event, subject to having received the required supportingdocumentation.

 

Inthe case where the Contractor would achieve Schedule Saving in the frame of theimplementation of Early Delivery ED2, the Contractor shall be entitled toinvoice the Purchaser for Early Delivery Incentives. In this case, payments mayexceed the cumulative amount of payments set forth in Exhibit F.

 

Shouldthe Purchaser decide to advance the delivery of 6 Spacecraft from Phase 3 asset forth in Article 26 or to postpone the delivery of Phase 3 Spacecraft asset forth in Article 26, the payments shall be set forth as illustrated in ExhibitF2 or F3 respectively.

 

(F)                     Unless otherwise agreed inwriting by the Party entitled to payment, all transfers of funds in accordancewith this Contract from one Party to the other Party shall be sent to thereceiving Party by wire transfer of immediately available funds to thefollowing bank accounts :

 

**ThalesAlenia Space France**

 

For payments in Euros:

Thales Alenia Space France

Société Générale Toulouse

Address : Innopole Voie 8 - BP 500 – 31316 Labège Cedex, France

Swift Code : [*]

Account n° [*]

 

For payments in USDollars :

Thales Alenia SpaceFrance

ABN AMRO BANK

New-York Branch

Address : 55 East 52Street, New York, New York 10055,U.S.A.

Swift Code : [*]

Routing Number [*]

Account n° [*]

 

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**Globalstar,Inc.**

 
| For payments in US Dollars : |
|------------------------------|
| Account Name:                | Collection Account |
| Bank Name:                   | Union Bank of California |
|                         | [*] |
| A/C:                         | Globalstar, Inc. [*] |
| Account Number:              | [*] |
| Bank Address:                | IS&AM, Domestic Custody |
|                         | 350 California Street, 6th Floor |
|                         | San Francisco, CA 94104 U.S.A. |
| Swift Details:               | [*] |

 

or such otheraccount as the relevant Party may specify from time to time in writing.

 

Anypayment due by Purchaser shall be deemed to have been made when the Contractor’sbank account has been credited of the amount of such payment.

 

If any payment wouldotherwise be due under this Contract on any Day that is not a Business Day,such payment shall be due on the succeeding Business Day.

 

(G)                    Payments required to be madeby either Party to this Contract and not received within the due date plus ten (10)Days shall bear interest at the Interest Rate for each Day from the tenth (10th) Day following the due dateuntil the date of actual payment. Such interest due pursuant to this Article 7(G)will be included in the next quarterly invoice. In the event the Contractorelects to draw from the Escrow Account as set forth in Article 22(B), then theprovisions of this Article 7(G) shall not apply.

 

(H)                     The Contractor shall sendone (1) copy of each invoice to Purchaser by email to [*] with confirming emailto [*]and, as applicable, one (1) copy in parallel to the Lender.

 

The Contractor may request status of paymentby calling [*] in Accounts Payable at [*].

 

The address reference to be put on theinvoice is :

Globalstar, Inc.

461South Milpitas Boulevard

Milpitas,California 95035, U.S.A.

 

TheContractor may send one (1) hard copy of each invoice to Purchaser at addressreferenced above to the attention of [*].

 

I)                            Until EDC2, invoices from the Contractor shallbe paid through direct bank transfers from Purchaser to Contractor.

 

As of EDC2, for the payment of the balance of thePrice for Phase 1 and 2 and LLI for 6 Spacecraft from Phase 3), Purchaser hasentered into an Export Credit Facility. As a 

 

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result thereof, all invoices from the Contractorissued after EDC2 shall be paid to the Contractor according to the payment planin Exhibit F and through drawings under the Export Credit Facility. Suchdrawings under the Export Credit Facility shall be made against presentation bythe Contractor to the Lender of the documents required under the Contract dulyapproved by the Purchaser.

 

At EDC2, the Parties have agreed that the balance offunds in the Escrow Account shall be released and returned to the Purchaser.

 

AfterEDC2, any deviations to the foregoing payment provisions shall be mutuallyagreed upon by the Parties.

 

J)                           ALLPAYMENTS TO BE MADE ACCORDING TO EXHIBIT F FOR THE BALANCE OF PHASE 1&2AFTER EDC2 SHALL BE INVOICED IN EUROS BY THE CONTRACTOR AND PAID IN UNITEDSTATES DOLLARS USING THE EXCHANGE RATE STIPULATED IN THE EXPORT CREDIT FACILITYAGREEMENT.

 

**Article 8. Inspection and Acceptance**

 

Contractor shallperform the following tests and reviews:

 

(A)                  Spacecraft

 

(i)                       Each Spacecraftshall undergo a Pre-Shipment Review, as described in section 5.8 of Exhibit A. Purchaser shall notify Contractor of itsacceptance or objection of the Pre-Shipment Review within one (1) Day followingperformance of the PSR. Failure of Purchaser to so notify Contractor shall bedeemed to constitute acceptance of said PSR. Upon successful completionof the Pre-Shipment Review (i.e. Pre-Shipment Review complies with the provisions of section 5.8 of ExhibitA), the Parties shall sign a Pre-Shipment Review Acceptance Certificate. IfPurchaser objects, it shall provide detailed reasons for such objection toContractor within two (2) Days of performance of such Pre-Shipment Review.

 

Contractor shall thenproceed to resolve the reason for the objection and upon resolution the Partiesshall sign the Pre-Shipment Review Acceptance Certificate. After completion ofthe PSR, the Spacecraft shall be deemed Available for Shipment and Purchaserwill provide to Contractor shipment directions.

 

(ii)                    Upon arrival of a Spacecraftat the Launch Site, Contractor shall promptly conduct a Satellite Post-ShipmentVerification Review for each Spacecraft. Thereafter, Contractor shall performtests in accordance with the Launch Site Test Plan and relevant portions of ExhibitC, in the presence of Purchaser unless Purchaser advises Contractor that suchtests can be performed in its absence.

 

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(iii)                 Contractor shall then conduct a FlightReadiness Review as set forth in section 5.10 of Exhibit A, whereuponContractor shall either certify Spacecraft compliance or notify Purchaser ofthose items which fail to meet the requirements of Exhibits B and C.  Upon Contractor certification of Spacecraftcompliance, or upon satisfactory completion by Contractor of other conditionssufficient to remedy those items that failed to meet the requirements ofExhibits B and C, mutually acceptable to Purchaser and Contractor, FRR shall bedeemed successfully completed and Contractor shall be authorized to proceed tothe Launch Readiness Review.

 

(iv)                Each Spacecraft shall undergo a LRR, asdescribed in section 5.11 of Exhibit A. If the LRR complies with the provisions of section 5.11 ofExhibit A,Purchaser shall notify Contractor of its acceptance of the LRR followingcompletion. Upon such notification, a Spacecraft shall be readyfor launch unless, at any time prior to Intentional Ignition, Contractor shallnotify Purchaser if a Spacecraft is not ready for launch.  Upon such notification and prior to launch,Contractor shall remedy such particulars or satisfactorily complete otherconditions mutually acceptable to Purchaser and Contractor.

 

(v)              FinalAcceptance of a Spacecraft not being delivered into storage shall occur uponIntentional Ignition, except that in case of occurrence of an event as setforth in Article 9(C), Final Acceptance shall be deemed not to haveoccurred. Final Acceptance of a Spacecraft being delivered into storage shallbe made upon delivery of the Spacecraft to the storage site, in accordance withthe provisions of Article 29.

 

(B)                      DSSs

 

(i)                       Contractor shall conduct a FactoryAcceptance Test Review on the DSSs at Contractor’s facilities. Upon successfulcompletion of the Factory Acceptance Test Review, Contractor shall so certifyto Purchaser. Purchaser shall have two (2) Days from receipt of suchcertification to notify Contractor in writing of those particulars which do notmeet the requirements of the Contract.

 

Uponsuch notification by Purchaser, Contractor shall remedy such particulars orsatisfactorily complete other conditions mutually acceptable to Purchaser andContractor after which Contractor shall proceed to ship each DSS to the designatedDSS site. If Purchaser does not so notify Contractor within two (2) Days,Contractor shall proceed to ship each DSS to the designated DSS site.

 

(ii)                    A Simulator Completion Review shall beconducted following full and complete installation and testing of the DSS atthe designated DSS Site in accordance with Exhibit A.  Contractor and Purchaser shall, within two (2) Daysafter the successful completion of Simulator Completion Review, certify inwriting on a form, mutually agreed, that Final Acceptance of the DSSs hasoccurred. If Purchaser fails to reject or certify acceptance within such two (2) Daysafter the successful completion of Simulator Completion Review, FinalAcceptance of the DSSs shall be deemed to have occurred.

 

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(iii)                 If a DSS is non-conforming to thespecifications defined in Exhibit E, Purchaser shall so notify Contractor(with detailed reasons for such non-compliance given in the notification), andsuch non-compliance shall be corrected by Contractor.  Upon such correction, followed by a deltaSimulator Completion Review, if necessary, acceptable to Purchaser, FinalAcceptance shall be deemed to have occurred.

 

(C)                    Uponcompletion of a Milestone Event other than for PSRs as set forth in Article 8(A), Contractor shall issue and send to Purchaser a Milestone Event acceptancecertificate. Purchaser shall notify Contractor of its acceptance or rejectionof a Milestone Event within five (5) Business Days from the date ofreceipt of the Milestone Event acceptance certificate, failing which suchMilestone Event shall be deemed successfully completed. In case of acceptance,the Parties shall sign the Milestone Event acceptance certificate. In case ofrejection, Purchaser shall state in writing the reasons for such rejection andContractor shall implement necessary corrective measures. After such correctionto the satisfaction of Purchaser, such Milestone Event shall be deemedsuccessfully completed and the Parties shall sign the Milestone Eventacceptance certificate.

 

**Article 9.  Title and Risk of Loss**

 

(A)                  Subject to theprovisions of this Contract :

 

(i)                         title to andrisk of loss for a Spacecraft and propellant on board such Spacecraft shallpass from Contractorto Purchaser upon Intentional Ignition, except as provided in Articles 9(C) and 9(E).

 

(ii)                      risk of lossfor DSSs shall pass from Contractor to Purchaser upon Delivery to the place setforth in Article 6. Title to DSS shall pass from Contractor to Purchaserupon Final Acceptance thereof.

 

(iii)                 risk of lossand title to for the Satellite OBPE Software shall pass from Contractor toPurchaser upon Delivery to the place set forth in Article 6.

 

(iv)                risk of lossand title to for the Satellite Mass Simulator shall pass from Contractor toPurchaser upon Delivery to the place set forth in Article 6.

 

Any loss or damage to such items prior to Purchaser’s assumption ofrisk of loss shall be at Contractor’s risk, unless such loss or damage iscaused by the negligent acts or omissions or wilful misconduct of Purchaser.

 

(B)                    Title toSpacecraft, propellant on board the Spacecraft, Satellite OBPE Software, DSSsand Satellite Mass Simulator shall pass to Purchaser free and clear of anyclaims, liens, encumbrances and security interests of any nature. Contractorshall not grant to third parties any lien, encumbrance or security interest ofany nature on Spacecraft, 

 

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propellant on board the Spacecraft, Satellite OBPE Software, DSSs andSatellite Mass Simulator.

 

(C)                    Contractorhereby agrees following Intentional Ignition, should the launch sequence besuccessfully terminated prior to lift-off of the Launch Vehicle, then at thesubsequent time the launch pad is declared safe by the Launch Services Provider,title, care, custody and control and risk of loss to Spacecraft and propellantshall revert to Contractor.  In the eventof such an occurrence, Contractor shall be paid by Purchaser for additionaldocumented costs, if any, incurred by Contractor in relation to additionalpremium due directly as the result of an extension by it of any insurancepolicy it may have relating to the Spacecraft.****This paragraph may be adjusted as necessary to be consistent withthe Launch Services Agreement and the Launch Insurance policy.

 

(D)                   Should thesubsequent launch following an aborted launch as set forth in Article 9(C) above,be delayed through no fault of Contractor, and any Spacecraft has to be removedfrom the Launch Vehicle and has to be returned to Contractor’s facility or adesignated storage site at Launch Site, all costs resulting from extension ofthe period for the launch campaign (including costs associated with on-orbitsupport personnel already deployed to other locations) shipping costs, costsfor re-testing and restoring the Spacecraft to flight-worthy condition,off-site storage charges (if any) and insurance coverage for return to theLaunch Site and subsequent launch will be at Purchaser’s expense, as determinedpursuant to Article 19(C).

 

(E)                     In the event a Spacecraft isplaced in storage as set forth in Article 29(A), title and risk of loss tosuch Spacecraft shall pass to Purchaser upon both completion of the tasksspecified for placement into storage as required by the Storage Plan andpayment to Contractor of all outstanding amounts as set forth in Exhibit Fless an amount of [*] Euros per Spacecraft stored corresponding to the portionof the Launch Support Services and MOSS not yet performed. This amount will be paid toContractor at the time of removal of the Spacecraft from storage.

 

Prior to storage, Contractor shall file (orshall cause a Subcontractor to file), on behalf of Purchaser and at Purchaser’sexpense, necessary application with custom authorities for the issuance of anactive job processing, or any other adequate instrument, with respect to astored Spacecraft in order to get an exemption of taxes and duties.

 

**Article 10.  Access to Work in Progress**

 

(A)                  Subject toapplicable government regulations, Contractor shall afford Purchaser access toall WIP, including without limitation Technical Data and information, testdata, documentation (not containing cost information), testing and hardware,being performed at Contractor’s facilities pursuant to this Contract during theperiod of Contract performance as set forth in section 1.5 of Exhibit A,provided that such access does not unreasonably interfere with such WIP or anyother work.

 

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(B)                    Contractorshall afford Purchaser access to WIP being performed pursuant to this Contractin Subcontractor’s facilities to the extent Contractor obtains such access,subject to the right of Contractor to accompany Purchaser on any such visit andsubject further to the execution by Purchaser of such non-disclosure or similaragreements as may be required by Subcontractors. Contractor shall use its bestefforts to obtain access to the WIP being performed in Subcontractor’sfacilities.

 

**Article 11.  Progress Meeting, Presentations and Reports**

 

(A)                  In addition toany other meetings called for under the provisions of this Contract, Contractorshall provide the personnel, facilities, materials and support to conduct thefollowing meetings and presentations with Purchaser, provided that suchmeetings and presentations do not unreasonably interfere with Contractor’sperformance: (i) informal Program Manager meetings ; (ii) informalproject level technical review meetings ; and (iii) management levelpresentations as deemed appropriate by Contractor or Purchaser’s management andsubject to reasonable prior notice by Purchaser.

 

(B)                    Contractorshall deliver to Purchaser all reports as described in Exhibit A. TheParties agree to utilize a secure, electronic-based system for delivery ofreports and documents (which may include exceptions on its use for certaindocuments).

 

**Article 12.  Intellectual Property Rights**

 

(A)                  Purchaser shallprotect all Intellectual Property to which Purchaser has a right of accesspursuant to Article 10, or that is or may be disclosed by Contractor toPurchaser, from disclosure to third parties in the same manner in whichPurchaser protects its own IP, in accordance with and subject to Article 14.

 

(B)                    Notwithstandingany other provision of this Contract, the ownership in and title to BackgroundIP delivered to Purchaser by Contractor in accordance with this Contract shallremain in Contractor or its licensors. Contractor hereby grants to Purchaser a fully paid up, non-exclusive,perpetual, irrevocable (except as set forth herein), world-wide andnon-transferable (except as part of a sale of the business or by operation oflaw) license (with right to sublicense to third parties) to use, duplicate,adapt, make derivatives and disclose its Background IP (and its relateddocumentation) and other Deliverable Items for the use, operation, enhancementand maintenance of the Globalstar System pursuant to this Contract and theexisting Globalstar network.

 

(C)                    Title to all Foreground IP shall remainwith Contractor, provided, that Contractor shall not use or have, or permitothers to use, Foreground IP related to the payload of the Spacecraft for thepurpose of engaging in business activity that would be in direct competitionwith the Globalstar System. Contractor hereby grants to Purchaser a fully paid up, non-exclusive,perpetual, irrevocable (except as set forth herein), world-wide and non-transferable (except aspart of a sale of the business or by operation of law) license 

 

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(with right to sublicense to third parties) to use, duplicate, adapt,make derivatives and disclose its Foreground IP (and its related documentation)and other Deliverable Items for the use, operation, enhancement and maintenanceof the Globalstar System pursuant to this Contract, the existing Globalstarnetwork and future similar contracts and such Globalstar network as it willexist under such future similar contracts.

 

(D)                   Purchaserhereby grants to Contractor a fully paid up, non-exclusive, perpetual,irrevocable (except as set forth herein), world-wide and non-transferable(except as part of a sale of the business or by operation of law) license (withright to disclose to Subcontractors who are signatories of the TAA as set forthin Appendix 2) to use, adapt and disclose the patents identified as being “granted”as set forth in Exhibit I for the purpose of performance of the Work underthis Contract. In addition, Contractor reserves the right to request andreceive copies of Technical Data which are owned by Purchaser for use for theperformance of the Work.  Purchasergrants to Contractor a license to use such Technical Data under the same typeof license as Purchaser grants to Contractor in this Article 12(D),subject to the TAA.

 

**Article 13.  Public Release of Information**

 

(A)                  During the termof 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, preparedspeeches, company reports or other information releases related to the workperformed hereunder, including the denial or confirmation thereof, without theother Party’s prior written consent.

 

(B)                    Notwithstandingthe foregoing, it is understood by the Parties that Contractor is authorized torelease information relative to the Work as may be required to notify its othercustomers as to satellite performance issues, provided that such informationshall contain no identification of Purchaser or Purchaser’s designation ofWork, subject to government requirements.

 

(C)                    Nothingcontained herein or in the Mutual Nondisclosure Agreement between Purchaser andContractor, dated November 2, 2006 shall be deemed to prohibit eitherParty from disclosing this Contract, in whole or in part, or informationrelating thereto (i) as may be required by the rules and regulationsof a government agency with jurisdiction over the disclosing Party or a stockexchange on which the disclosing Party’s shares are then listed, (ii) asmay be required by a subpoena or other legal process (iii) in any actionto enforce its rights under this Agreement, (iv) to its lenders underappropriate assurances of confidentiality for the benefit of the disclosingParty or (v) to its auditors, attorneys and other professional advisors inthe ordinary course, provided that such auditors, attorney and advisors havecontractual or professional obligations to maintain the confidentiality of thedisclosed material. The disclosing Party shall use reasonable commercialefforts to disclose only such information as it believes in good faith it islegally required to disclose pursuant to clauses (i) or (ii), above, andwill seek, to the 

 

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extent reasonably available under applicablerules, to obtain confidential treatment for any information either Partyreasonably considers trade secrets and that is required to be disclosed. To theextent practicable, the disclosing Party shall provide the other Party with areasonable opportunity in advance of disclosure to request redactions ordeletions of specific terms and provisions of the Contract and shallaccommodate those requests to the extent reasonably consistent with applicableconfidential treatment rules.

 

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

 

**Article 14.  Confidentiality**

 

The Parties agree that all exchanges of proprietary information shallbe governed by the Mutual Nondisclosure Agreement between Purchaser andContractor, dated November 2, 2006 as set forth in Appendix 1, as suchAgreement may be amended.

 

**Article 15.  Intellectual Property Rights Indemnity**

 

(A)                  Contractorshall indemnify, defend and hold harmless Purchaser and its affiliates andtheir respective directors, officers, agents and employees, against any claims,damages, losses, costs (including attorneys’ fees) incurred in connection withany claim, suit, or proceeding asserted or filed against Purchaser relating toinfringement of any patent, copyright, trade secret, trademark or otherproprietary right based on the laws of the United States and EU, or a countrywhere Contractor or any Subcontractor is located (except that suchindemnification shall not apply to any patent identified as being “granted” asset forth in Exhibit I), by any Spacecraft, Mass Simulator or DSS to bedelivered hereunder, or any part thereof or arising out of Contractor’sperformance of its obligations under the Contract.  Purchaser shall notify Contractor promptly inwriting of any such claim, suit or proceeding, and give Contractor proper andfull information, of which it is aware, and reasonable assistance to settleand/or to defend any such claim, suit, or proceeding. At its option andexpense, Purchaser may participate in the defense of such claim, suit orproceeding with counsel of its own choosing. In addition, the indemnificationshall also apply if in the reasonable opinion of Contractor’s outsideintellectual property counsel, any Spacecraft, Mass Simulator or DSS to bedelivered hereunder or any part thereof may become the subject of any claim,suit, or proceeding for infringement of any such patent, copyright, tradesecret, trademark or other proprietary right.

 

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(B)                    In case of sucha claim as set forth in Article 15(A), Contractor shall, at its option andexpense, either (i) procure for Purchaser the right under such patent,copyright, trade secret, trademark or other proprietary right, to use, lease,or sell, as appropriate, such Spacecraft, Mass Simulator or DSS, or partthereof, or (ii) replace or modify such Spacecraft, Mass Simulator or DSS,or part thereof, so that it becomes non-infringing but continues to meet therequirements of the Contract.

 

(C)                    Contractorshall have no liability for and the provisions of Article 15(A) shallnot apply for any infringement arising from (i) the combination of suchSpacecraft, Mass Simulator or DSS, part thereof or process practiced thereinwith any other Spacecraft or DSS or part not furnished to Purchaser byContractor unless such Spacecraft, Mass Simulator or DSS, part or processfurnished by Contractor contributorily infringes, or (ii) the modificationof such Spacecraft, Mass Simulator or DSS, part thereof or process practicedtherein, unless such modification was made or authorized by Contractor, or (iii) theuse of any patent identified as being “granted” as set forth in Exhibit I.

 

(D)                   Contractor’stotal liability to Purchaser under this Article 15 shall not exceed [*]%of the Total Price. This Article 15 states the entire obligation ofContractor and the exclusive remedy of Purchaser, with respect to any allegedpatent, copyright, trade secret or trademark infringement by such product orpart or process.

 

**Article 16.  Limitation of Liability**

 

(A)                  THE PARTIES EXPRESSLY RECOGNIZE THATCOMMERCIAL SPACE VENTURES INVOLVE SUBSTANTIAL RISKS AND RECOGNIZE THECOMMERCIAL NEED TO DEFINE, APPORTION AND LIMIT CONTRACTUALLY ALL OF THE RISKSASSOCIATED WITH THIS COMMERCIAL SPACE VENTURE. THE PAYMENTS AND OTHER REMEDIES EXPRESSLY SET FORTH IN THIS CONTRACTFULLY REFLECT THE PARTIES’ NEGOTIATIONS, INTENTIONS AND BARGAINED-FORALLOCATION OF THE RISKS ASSOCIATED WITH COMMERCIAL SPACE VENTURES.

 

EXCEPT AS SPECIFICALLY PROVIDED IN THIS CONTRACT,CONTRACTOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, WITHRESPECT TO THE CONTRACT OR THE PERFORMANCE OF THE CONTRACTOR OR THE WORKHEREUNDER, WHETHER ARISING AT LAW OR IN EQUITY AND ALL SUCH WARRANTIES ANDREPRESENTATIONS, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY ARE, TO THE EXTENTPERMITTED BY LAW, EXCLUDED.

 

(B)                    IN NO EVENTSHALL CONTRACTOR OR ITS SUBCONTRACTORS BE LIABLE TO PURCHASER FOR INCIDENTAL,INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (INCLUDING ANY LOSS OFPROFIT OR ANY OTHER SIMILAR LOSS) WHETHER ARISING IN CONTRACT, TORT, STRICTLIABILITY, OR UNDER ANY OTHER THEORY OF LIABILITY

 

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RESULTING FROM ANY BREACH OF THIS CONTRACT OR WITH RESPECT TO ANYDEFECT, NON-CONFORMANCE OR DEFICIENCY IN ANY INFORMATION, INSTRUCTIONS,SERVICES OR OTHER THINGS PROVIDED PURSUANT TO THIS CONTRACT.  THE FOREGOING EXCLUSION SHALL APPLY WHETHEROR NOT FORESEEABLE OR EVEN IF CONTRACTOR HAS BEEN ADVISED OF THE POSSIBILITY OFSUCH DAMAGES.  SPECIFICALLY, BUT WITHOUTLIMITATION TO THE FOREGOING, CONTRACTOR AND ITS SUBCONTRACTORS SHALL NOT BELIABLE TO PURCHASER FOR ANY SUCH DAMAGES RESULTING FROM ANY LOSS OR DESTRUCTIONOF A SPACECRAFT OR FAILURE OF A SPACECRAFT OR ITS SUBSYSTEMS TO OPERATESATISFACTORILY.

 

(C)                    IN NO EVENTSHALL PURCHASER BE LIABLE TO CONTRACTOR OR ITS SUBCONTRACTORS FOR INCIDENTAL,INDIRECT, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES (INCLUDING ANY LOSS OFPROFIT OR ANY OTHER SIMILAR LOSS) WHETHER ARISING IN CONTRACT, TORT, STRICTLIABILITY, OR UNDER ANY OTHER THEORY OF LIABILITY RESULTING FROM ANY BREACH OFTHIS CONTRACT.  THE FOREGOING EXCLUSIONSHALL APPLY WHETHER OR NOT FORESEEABLE OR EVEN IF PURCHASER HAS BEEN ADVISED OFTHE POSSIBILITY OF SUCH DAMAGES.

 

(D)                   PURCHASER ANDCONTRACTOR SHALL BE BOUND TO THE FLOW-DOWN REQUIREMENTS OF THE LAUNCH SERVICESAGREEMENT APPLICABLE TO CONTRACTOR REGARDING ALLOCATIONS OF RISK, WAIVERS OFSUBROGATION, INDEMNIFICATIONS AND INTER-PARTY WAIVERS OF LIABILITY INVOLVED INLAUNCH OPERATIONS.  SUCH FLOW-DOWN SHALLBE INCLUDED IN AN AMENDMENT TO THIS CONTRACT TO BE ENTERED INTO AND CONFIRMEDBETWEEN THE PARTIES PRIOR TO THE COMMENCEMENT OF LAUNCH SUPPORT SERVICES.

 

(E)                     PURCHASERAGREES TO ENTER INTO AGREEMENTS WITH THE LAUNCH SERVICES PROVIDER TO DISCLAIMANY LIABILITY OF CONTRACTOR TO THE LAUNCH SERVICES PROVIDER FOR INCIDENTAL,INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES. PURCHASER ALSO AGREES TO CAUSE ITSLAUNCH RISK INSURERS TO WAIVE ALL RIGHTS OF SUBROGATION AGAINST CONTRACTOR ANDSUBCONTRACTORS.

 

(F)                       BOTHPARTIES’ SOLE AND EXCLUSIVE REMEDIES AND OBLIGATIONS FOR ANY BREACH OF THISCONTRACT OR WITH RESPECT TO ANY DEFECT, NON-CONFORMANCE OR DEFICIENCY IN ANYINFORMATION, INSTRUCTIONS, GOODS, SERVICES OR OTHER THINGS PROVIDED PURSUANT TOTHIS CONTRACT ARE LIMITED TO THOSE SET FORTH IN THIS CONTRACT, AND ALL OTHERREMEDIES OR RECOURSE AGAINST THE OTHER PARTY OF ANY KIND ARE EXPRESSLYDISCLAIMED AND FOREVER WAIVED.

 

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(G)                      NOTWITHSTANDINGANY OTHER LANGUAGE IN THIS CONTRACT TO THE CONTRARY, CONTRACTOR’S TOTALLIABILITY TO PURCHASER SHALL NOT EXCEED [*] OF THE TOTAL PRICE. NOTWITHSTANDINGANY OTHER LANGUAGE IN THIS CONTRACT TO THE CONTRARY, PURCHASER’S TOTALLIABILITY TO CONTRACTOR SHALL NOT EXCEED THE TOTAL PRICE LESS ANY PAYMENTSMADE.

 

**Article 17.  Excusable Delays**

 

(A)                  Any delay or failure in the performance of a Party’sobligations under this Contract (other than payment obligations) shall beexcused, and such Party will not be liable for, or be in default for, suchdelay or non-performance, if the cause of the delay or non-performance is, inwhole or in part, beyond such Party’s reasonable control and without thenegligence of such Party (or its Subcontractors at any tier).

 

Purchaser acknowledges that followingthe end of an excusable delay event, Contractor shall resume full performanceas soon as commercially practicable after the end of an excusable delay event,and the schedule of performance shall be deemed modified to reflect suchrecommencement of performance. Payments obligations of Purchaser shall besuspended only for the portion of Contractor’s performance of Work affected bythe excusable delay.

 

(B)                    Excusable delaysshall be conclusively deemed to include, but are not limited to Acts of God orof the public enemy; acts or omissions of governmental bodies, including theFCC, in their sovereign capacities or contractual capacities (including theinability to obtain and/or the suspension, withdrawal, or non-renewal of exportor import licenses required for the performance of the Contract); acts of war(declared or undeclared), fires, earthquakes, floods, other unusually severeweather conditions such as hurricanes, tornadoes and typhoons, epidemics,quarantine restrictions, strikes, component or parts alerts**,** labor and other industrial disputes,terrorist acts and freight embargoes sabotage, riots, theft; introduction ofmalicious code; failures or interruptions in essential services or equipment(e.g., electrical power, telecommunications, fuels, water); embargoes and othertransportation failures.

 

(C)                    The Party whoseperformance is delayed under Section 17(A) shall give notice inwriting to the other Party within seven (7) Business Days after anexcusable delay shall have occurred or such notifying Party knows of anexcusable delay, whichever is later. Notwithstanding the foregoing, a Party’s failure to provide such noticeshall not prevent such an event from qualifying as an excusable delay, exceptto the extent the failure to so notify prejudices the other Party’s ability tomitigate the impact of the delay or non performance.  Such notice shall also be given at thetermination of the excusable delay. The delivery requirements shall only beextended, upon mutual agreement of the Parties, by such period of time as isjustified by the evidence forwarded in the notice, but in any event not lessthan one (1) Day for one (1) Day of excusable delay.

 

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(D)                   Should excusable delays total,or be likely to total, six (6) consecutive months or more, Purchaser, at itsoption, may terminate this Contract with respect to unlaunched Spacecraft bywritten notice to Contractor and the conditions of Article 21 shall apply.Purchaser’s right to terminate pursuant to this Article 17(D) shall not applyto the extent that excusable delays do not affect Contractor’s ability toperform (*i.e.*, such excusabledelays affect Purchaser only).

 

**Article 18. Liquidated Damages for Late Delivery / Early Delivery Incentives**

 

18.1               **Liquidated Damages for Late Delivery**

 

(A)                  Contractorunderstands that delays in Delivery of Satellites required herein may causePurchaser to incur additional cost, loss of revenues and other damages, whichdamages are difficult to estimate but the Parties acknowledge are likely to besignificant.  Accordingly, the Partiesagree to fixed and liquidated damages for late Delivery of Satellites whichdamages are intended to be compensatory, not a penalty and are in lieu ofactual damages incurred by the Purchaser.

 

(B)                      TheRequired Delivery Dates for Spacecraft under this Contract are set forth belowby the following spacecraft groups :

 

| **Satellites Completed PSR**                        | ** ** | **Date of  PSR  (Regular)** |
|-----------------------------------------------------|------------|-----------------------------|
| TOTAL: **7** Satellites  (FM 2,3,4,5,6,7,8)         |       | March  27, 2010             |
| TOTAL:  **13** Satellites  (FM 9,10,11,12,13,14)    |       | May  12, 2010               |
| TOTAL:**19**  Satellites  (FM 15,16,17,18,19,20)    |       | June 23, 2010               |
| TOTAL:  **24** Satellites  (FM 21,22,23,24,25)      |       | July  28, 2010              |
| TOTAL: **31** Satellites  (FM 26,27,28,29,30,31,32) |       | May  25, 2012               |
| TOTAL: **37** Satellites  (FM 33,34,35,36,37,38)    |       | Nov 21, 2012                |
| TOTAL:  **43**Satellites  (FM 39,40,41,42,43,44)    |       | May  20, 2013               |
| TOTAL:  **48** Satellites  (FM 45,46,47,48,PFM1)    |       | Sept  17, 2013              |

 

For the avoidance of doubt, the Satellite groupingspecified in the above table shall be independent of FM numbers.

 

Forthe avoidance of doubt, the PSR ED2 Objective dates as per Early Delivery ED2Scope of Work shall not be taken into account for the calculation of LiquidatedDamages for Late Delivery as per Article 18.1.

 

The Parties agree that they will negotiate in good faith to create aTable, to substitute for the above Table, reflecting the actual number ofSpacecraft per Batch (the first Batch to

 

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include appropriate spare Spacecraft(s)) in alignment with Purchaser’sselected Launch Services Agreement commitments for the numbers of Spacecraftper launch.

 

(C)                      In the event Contractor has notsuccessfully completed PSR for the last Spacecraft of each group as set forthin the Table in Article 18.1(B) on or before the Two Hundred Forty Second (242nd) Day (Two Hundred Seventy Second (272nd) Day for the first group) after each respective dateset forth in such Table, then for each Day thereafter that the PSR of suchSpacecraft has not been successfully completed beyond such Two Hundred FortySecond (242nd) Days period (Two Hundred Seventy Second(272nd) Days period for the first group) untilcompletion of the PSR for the last Spacecraft of each group, Contractor agreesto pay Purchaser, as liquidated damages, the following amount :

 
| **Maximum liquidated  damages per Spacecraft**                                          | ** ** | **Regular Delivery** | ** ** |
|-----------------------------------------------------------------------------------------|------------|----------------------|------------|
|                                                                                    |       |                 |       |
| Phase 2 — First Batch Maximum liquidated damages per Spacecraft  per Day |       | [*] Euros            |       |
| Phase 2 — First Batch****Maximum aggregate  liquidated damages per Spacecraft      |       | [*] Euros            |       |
| Phase 2 — other BatchesMaximum  liquidated damages per Spacecraft per Day          |       | [*]  Euros           |       |
| Phase 2 — other BatchesMaximum  aggregate liquidated damages per Spacecraft        |       | [*] Euros            |       |
| Phase 3 — all BatchesMaximum  liquidated damages per Spacecraft and per Day        |       | [*]  Euros           |       |
| Phase 3 — all BatchesMaximum  aggregate liquidated damages per Spacecraft          |       | [*] Euros            |       |
| **TOTAL**                                                                               | ** ** | **[*] Euros**        | ** ** |

 

Forthe sake of clarification, the liquidated damages to be paid for a group shallbe calculated by multiplying the appropriate amount set forth in the Tableabove for liquidated damages per Spacecraft per Day, times the number ofSatellites in the associated Batch (i.e. 6 Satellites), times the number ofDays’ delay after the grace period as set forth above.

 

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In the event of occurrence of an unforeseen technical event which isdemonstrated by Contractor to be the cause of delays on subsequent Spacecraftdeliveries, Contractor and Purchaser shall endeavour, in good faith, to definethe best solution allowing to minimize the impacts of Spacecraft delivery forPurchaser and the cumulative amount of liquidated damages for Contractor.

 

The maximum payment to Purchaser for liquidated damages under this Article18.1 for each Satellite shall be limited as defined in the Table above. Themaximum overall aggregate payment to Purchaser for liquidated damages underthis Article 18.1 shall be limited as defined in the Table above.

 

(D)                     Paymentof liquidated damages due to Purchaser shall be made within thirty (30) Daysafter receipt of an emailed invoice by Contractor from Purchaser.

 

(E)                       Delaysin delivery shall be excused and the delivery date(s) shall be extended, asappropriate, to reflect thefollowing conditions :

 

(i)                           if delay in PSR is due to any causereferred to in Article 17 ; or

 

(ii)                        in the event the TRB of the PFM is notsuccessfully completed, then as a result thereof Contractor shall not be liablefor liquidated damages for each Spacecraft for which PSR has been successfullycompleted prior to the time of such TRB completion ; or

 

(iii)                     the execution of a Stop Work pursuant to Article 22which results in an extension of the Delivery Schedule ; or

 

(iv)                    if the delay is due to a cause or causes attributableto the Purchaser ; or

 

(v)                       if Purchaser elects to store a Spacecraftas set forth in Article 29 which election was not based on Contractor’s delay ;or

 

(vi)                    if a concurrentdelay exists which prevents Purchaser from commencing launch of the Satellitesthat are independent of Contractor’s obligation pursuant to this Contract (i.e.the launch is delayed for reasons not attributable to the Satellites).

 

(F)                       The liquidated damages set forth hereinreflect the mutual agreement of the Parties as fair and reasonable compensationfor a delay in Delivery.

 

18.2               **Early Delivery Incentives**

 

In the frame of implementation of the Early DeliveryED2 Scope of Work, Purchaser and Contractor agree that, in case schedule savingis totally or partially achieved, Early Delivery Incentives shall be paid byPurchaser to Contractor according to the following process :

 

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For each Batch, the Contractor shall be entitled toearn [*]% of the Early Delivery Incentives based on PSR ED2 Schedule Saving, asapplicable, and [*]% of the Early Delivery Incentives based on Launch ED2Schedule Saving.

 

The amount of Early Delivery Incentives payable tothe Contractor shall be calculated on a Prorata Temporis basis taking intoaccount the actual number of Days of PSR ED2 Schedule Saving, andLaunch ED2 Schedule Saving divided by the PSR Schedule Saving Days for [*]%Incentives as identified in the Table below for each Batch.

 

ThisEarly Delivery Incentives amount shall be paid within thirty (30) Days afterreceipt by the Purchaser of the corresponding invoice from the Contractor.

 

The amount of PSR ED2 Early Delivery Incentives to bepaid by the Purchaser shall not exceed [*]Euro ([*] Euro) per Batch.

 

The amount of Launch ED2 Early Delivery Incentives tobe paid by the Purchaser shall not exceed[*]Euro ([*] Euro) per Batch.

 

**Table PSR ED2 Early DeliveryIncentives**

 
| ** **               | ** ** | **Required Delivery  Dates for Regular  Schedule as per  Article 18.1 (B)** | ** ** | **PSR ED2  Objective Dates** | ** ** | **PSR Schedule  Saving Days for  [*]% Incentives** | ** ** | **Maximum  Incentives amount  (in Euro)** | ** ** |
|--------------------------|------------|-----------------------------------------------------------------------------|------------|------------------------------|------------|----------------------------------------------------|------------|-------------------------------------------|------------|
|                     |       |                                                                        |       |                         |       |                                               |       |                                      |       |
| Batch 1 FM 2 to  FM7*    |       | March 14, 2010                                                              |       | Feb 2, 2010                  |       | 40                                                 |       | [*]                                       |       |
| Batch 2 FM 8 to  FM13*   |       | May 5, 2010                                                                 |       | March 28, 2010               |       | 38                                                 |       | [*]                                       |       |
| Batch 3 FM 14 to  FM19*  |       | June 16, 2010                                                               |       | May 9, 2010                  |       | 38                                                 |       | [*]                                       |       |
| Batch 4 FM 20 to  FM 25* |       | July 28, 2010                                                               |       | June 30, 2010                |       | 28                                                 |       | [*]                                       |       |

 

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(*****)For the avoidance of doubt a Batch shall be comprised of six (6) Spacecraftindependently of FM numbers specified in the above table.

 

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**Table Launch ED2 Early DeliveryIncentives**

** **
| ** **               | ** ** | **Nominal  Scheduled Launch  Dates** | ** ** | **Launch ED2  Objective Dates** | ** ** | **Launch Schedule  Saving Days  for [*]%  Incentives** | ** ** | **Maximum  Incentives amount  (in Euro)** | ** ** |
|--------------------------|------------|--------------------------------------|------------|---------------------------------|------------|--------------------------------------------------------|------------|-------------------------------------------|------------|
|                     |       |                                 |       |                            |       |                                                   |       |                                      |       |
| Batch 1 FM 2 to  FM7*    |       | May 23, 2010                         |       | April 13, 2010                  |       | 40                                                     |       | [*]                                       |       |
| Batch 2 FM 8 to  FM13*   |       | Aug 21, 2010                         |       | July 12, 2010                   |       | 40                                                     |       | [*]                                       |       |
| Batch 3 FM 14 to  FM19*  |       | Oct 21, 2010                         |       | Sept 11, 2010                   |       | 40                                                     |       | [*]                                       |       |
| Batch 4 FM 20 to  FM 25* |       | Dec 21, 2010                         |       | Nov 11, 2010                    |       | 40                                                     |       | [*]                                       |       |

 

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(*****)For the avoidance of doubt a Batch shall be comprised of six (6) Spacecraftindependently of FM numbers specified in the above table.

 

**Article 19. Request For Deviation (RFD)/Request For Waivers (RFW)**

**and Changes**

 

(A)                    Should Contractor desire todeviate from the requirements of a specific item of the Work, it shall submitto Purchaser an RFD/RFW, as set forth in section 2.9.2 of Exhibit A.

 

Contractor shall submit RFD/RFWs to thePurchaser promptly as and when they occur. Before Purchaser shall grant a deviation or waiver, it may negotiate ingood faith with Contractor a mutually acceptable consideration therefor.

 

(B)                    Purchaser may from time totime between the EDC and completion of this Contract, by written change orderissued by Purchaser, make changes within the general scope of this Contractregarding the Spacecraft or DSSs, the services or in any drawings, designs,specifications, methods of shipment or packing, quantities of items, places ofdelivery, additional Work, or the omission of Work. Procedures for implementingsuch changes may be similar to RFD/RFWs submitted by Contractor pursuant to Article19(A), with the Parties negotiating the terms of the change order, includingthe price therefor, before the change order becomes effective, or Purchaser mayissue the change order without such negotiation, as set forth in Article 19(C).

 

(C)                    If any change order causesan increase or decrease in the costs of, or the time required for, Contractor’sobligations under this Contract, and the Parties do not negotiate such termsbefore the change order becomes effective, in accordance with Article 19(B), anequitable adjustment in the price or Delivery Schedule or both shall thereafterbe negotiated by the Parties and this Contract shall be modified in writingaccordingly provided that Contractor shall begin the work related to the changeif and when Contractor has received from Purchaser a financial commitmentacceptable to Contractor to begin such work. Any claim for adjustment underthis Article shall be deemed waived unless asserted in writing (with the amountof the claim) within forty-five (45) Days from the date of receipt byContractor of the change order.

 

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**Article 20. Termination for Default**

 

(A)                    Purchaser may, by written notice toContractor, issue a written notice of Default (the “Default Notice”) toContractor, if :

 

(i)                           there is a material breach by Contractorin the technical compliance during the PFM Payload assembly, integration andtest, in accordance with the Contract ; or

 

(ii)                        there is a material breach by Contractorin the technical compliance during the PFM Spacecraft assembly, integration andtest, in accordance with the Contract ; or

 

(iii)                     as to each PSR date set forth in Article 18.1(B),Contractor fails to satisfactorily complete the required PSR twelve (12) monthsplus 182 Days after such date for the last Satellite of the first Batch andnine (9) months plus 182 Days after such date for the last Satellite of thesubsequent Batches.

 

After Purchaser issues aDefault Notice in connection with any of the circumstances in Article 20(A)(i) or(ii), Contractor shall within ninety (90) Days of such notice submit toPurchaser a plan (“Plan”) for remedying such Default. If the Plan demonstratesto the mutual agreement of the Parties that the PSR for the last Satellite ofthe first Batch of Satellites to be launched will be completed withinthe time specified in Article 18.1(B) plus twelve (12) months plus 182 Days,then such Plan shall be implemented by Contractor and the Delivery Scheduleshall be adjusted as the Parties shall mutually agree. Contractor may also suggest a Plan thatdoes not result in the PSR for the last Satellite of the first Batch beingcompleted within the time specified in Article 18.1(B) plus twelve (12) monthsplus 182 Days, provided that Purchaser shall in its sole discretion eitheraccept or reject such a Plan by written notice sent to Contractor within ten (10)Business Days. In case of rejection, Purchaser may terminate the Contract bywritten notice of termination as set forth in Article 20(B).

 

(B)                      IfPurchaser gives Contractor a Default Notice and Contractor fails to respond towithin the time period (if any) specified above in Article 20(A), Purchaser mayterminate this Contract upon notice (the “Termination Notice”) to Contractorand without further period for cure.

 

In the event of a termination pursuant to this Article 20(B), then, ondemand from Purchaser, Contractor will refund all payments made by Purchaserless any amounts due under Article 18.1. Except as provided in Article 9(C), norefund shall be made with respect to Spacecraft already launched at the time oftermination and for Spacecraft or DSSs for which Final Acceptance has occurredat the time of termination.  Contractorshall make this refund within thirty (30) Days of receipt of Purchaser’swritten notice of termination of this Contract. In the event that Purchaser demands the refund as described above, thensuch refund shall be Purchaser’s sole and exclusive remedy for suchtermination.

 

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Contractor shall keep title andownership to all terminated WIP. Purchaser shall take all reasonable necessaryaction for the protection and preservation of the Work in possession ofPurchaser in which Contractor has an interest under this Contract, andPurchaser shall deliver to Contractor such work in its possession at Contractor’sexpense.

 

(C)                      If, after notice of termination under theprovisions of this Article, it is determined that Contractor was not in defaultunder the provisions of this Article or that the delay was excusable under theprovisions of Article 17, the rights and obligations of the Parties shall bethe same as if notice of termination had been issued pursuant to Article 21.

 

(D)                     So there is no misunderstanding,it is agreed that Purchaser shall not be entitled to terminate the Contract fordefault with respect to any Deliverable Item after delivery of such DeliverableItem. In addition, termination of the Contract shall not affect Contractor’sobligations as set forth in the Contract with respect to Spacecraft and otherDeliverable Items already delivered.

 

#### **Article 21.  Termination for Convenience**

#### ** **

(A)                  Purchaser, by written noticeto Contractor to be effective six (6) months following the date of such notice,may terminate this Contract in whole or in part for its convenience inaccordance with the terms of this Article 21. In such case, Contractor shallimmediately stop Work as directed in the termination notice and make itsreasonable best efforts to mitigate costs.

 

(B)                      In case of termination for convenience,Contractor shall be entitled to be paid the lesser of (i) all actual costs,direct and indirect, incurred by Contractor (Value Added Tax payable by Contractor on such costs as a result of such terminationshall be documented to Purchaser, added to such costs and paid by Purchaser) for all Work performed plus actualtermination costs incurred by Contractor and its Subcontractors and to receive,in addition, an amount representing [*] profit, before taxes, on such costsless amounts previously paid by Purchaser to Contractor pursuant to thisContract or (ii) the maximum aggregate payments to be made as set forth in ExhibitF for the two (2) quarters following the date of notice as set forth in Article21(A). The costs will include the impact (either gain or loss) of cancellationof hedging in place at the time of termination with respect to the portion ofthe Total Price referred to in Article 7(C) for which corresponding paymentshave not been received from Purchaser. A claim for such costs shall besubmitted by Contractor to Purchaser within sixty (60) Days from the date ofnotice of termination. The Parties shall agree upon the final terminationcharges to be paid to Contractor within thirty (30) Days after the date ofsubmission by Contractor of its claim.

 

(C)                    Purchaser shall payContractor the termination charges within thirty (30) Days following the dateof receipt of an invoice from Contractor. Final payment shall be the amount ofthe total termination charges less amounts previously paid by Purchaser toContractor pursuant to this Contract.  Inthe event the amount of these credits exceeds the amount of the totaltermination charges, Contractor will refund the excess to Purchaser withinthirty (30) Days following the date of receipt of an invoice from Purchaser.

 

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Subjectto the prior approval of Purchaser and subject to restrictions that may be imposed underapplicable Governmental authorizations, title to all WIP shalltransfer to Purchaser after payment. The license granted to Purchaser under Article12 shall continue for the period of use of any Deliverable Items notterminated.

 

Ifrequested by Purchaser and to the extent reasonably practicable, Contractorshall use commercially reasonable efforts to re-sell or re-use on otherprograms all WIP (or parts thereof) for the benefit of Purchaser.  In such case, the fair market value of suchWIP that Contractor re-uses or re-sells, as negotiated in good faith by theParties, less the reasonable and demonstrable costs of storage and thereasonable costs incurred by Contractor for reusing and/or reselling suchitems, shall be deducted from the termination charges or added to thetermination credit.

 

(D)                   Notwithstandingthe provisions of this Article 21, Purchaser shall not be entitled to terminatethe Contract for convenience with respect to a Spacecraft after its IntentionalIgnition.

 

#### **Article 22.  Stop Work**

 

(A)                  Stop Work by Purchaser

 

(i)                         Purchaser may, at any time, by writtennotice to Contractor (“the Stop Work Order”), direct Contractor to suspendperformance of the Work for a maximum cumulative duration of six (6) ( monthsand with a maximum number of suspensions of two (2). Notwithstanding the foregoing,the Parties agree that from EDC2 and going forward, only one (1) suspension isallowed for a maximum duration of two (2) months.  Said Stop Work Order shall specify the dateof suspension and the estimated duration of the suspension. Upon receiving anysuch Stop Work Order, Contractor shall promptly suspend further performance ofthe Work to the extent specified, and during the period of such suspensionshall properly care for and protect all WIP and materials, supplies, andequipment Contractor has on hand for performance of the Work.

 

(ii)                      Purchaser may,at any time during the stop Work, either (a) direct Contractor to resumeperformance of the Work by written notice to Contractor, and Contractor shallresume diligent performance of the Work, provided that (x) the DeliverySchedule is adjusted to reflect the stop Work and the time required byContractor to recommence performance, (y) other affected provisions of theContract shall be adjusted, and (z) Contractor is compensated for its costs asdefined in Article 22(A)(iii) below; or (b) terminate the Contract pursuant to Article21, in which case the costs incurred by Contractor and its Subcontractors as aresult of the stop Work as defined in Article 22(A)(iii) shall be added to thetermination charges to be paid pursuant to Article 21.

 

(iii)                   Contractorshall be compensated for any additional, direct, out-of-pocket costs reasonablyincurred by Contractor or the Subcontractors as a result of such suspension andresumption of Work. Contractor shall invoice Purchaser for such costs, andPurchaser

 

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shallpay such invoice within thirty (30) Days from the date of invoice. Invoiceswill not be issued more frequently than one (1) per month during a stop Work.

 

(B)                    Stop Work by Contractor inrelation with Phase 1 and 2 activities.

 

(i)                         In the eventPurchaser fails to make any payment in due time as required pursuant to thisContract, Contractor shall notify Purchaser in writing of such failure. If suchfailure is not cured by Purchaser within thirty (30) Days after the date ofsuch notification made by Contractor, Contractor shall be entitled toimmediately stop the Work under the Contract.

 

If Purchaser cures the payment failure on or before thirty (30) Daysfrom the date Contractor has stopped the Work as defined above, Contractorshall resume any Work suspended as reasonably and promptly as possible providedthat (a) Purchaser has paid to Contractor all costs and expenses incurred as aresult of the stop Work hereunder and (b) the schedule of the Contract shall beadjusted (provided such schedule adjustment shall not be less than one Day foreach Day of Work stoppage).

 

(ii)                      If Purchaserfails to cure the payment failure within thirty (30) Days from the dateContractor has stopped the Work as defined above, Contractor shall be entitledto immediately terminate the Contract by written notice sent to Purchaser andthe provisions of Article 22(B)(iv) shall apply.

 

(iii)                   In the event Purchaser fails to perform anymaterial obligations (other than those expressed in Article 22(B)(i) and Article22(B)(ii)), Contractor shall notify Purchaser in writing of such failure. Ifsuch failure is not cured by Purchaser within thirty (30) Days after the dateof such notification made by Contractor, Contractor shall be entitled toimmediately stop the Work under this Contract.

 

If Purchaser fails to cure the material breach within thirty (30) Daysfrom the date Contractor has stopped the Work as defined above, Contractorshall be entitled to immediately terminate the Contract by written notice sentto Purchaser and the provisions of Article 22(B)(iv) shall apply.

 

If Purchaser cures the material breach on or before thirty (30) Daysfrom the date Contractor has stopped the Work as defined above, Contractorshall resume any Work suspended as reasonably and promptly as possible providedthat (a) Purchaser has paid to Contractor all costs and expenses incurred as aresult of the stop Work hereunder and (b) the schedule of the Contract shall beadjusted (provided such schedule adjustment shall not be less than one Day foreach Day of Work stoppage).

 

(iv)                    In the event of termination of theContract by Contractor pursuant to this Article 22(B), Purchaser shall beliable to Contractor for the charges payable pursuant to Article 21(B) whichshall include all costs and expenses incurred as a result of the stop Workhereunder, but in no event to exceed the maximum aggregate payments to be madeas set forth in Exhibit F for two (2) quarters following the date oftermination notice.

 

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(v)                       In the event of abankruptcy filing by or against Purchaser, and the occurrence of apost-bankruptcy default by Purchaser including, but not limited to, a defaultunder Article 34(F), Purchaser consents to a modification of the stays ofproceedings to permit the Contractor to exercise such rights and remedies asmay be available to it under the Contract or applicable law, including, but notlimited to, the right to suspend performance, terminate the Contract andexercise rights under other agreements with the Purchaser.

 

Further, Purchaserconsents that any preliminary hearing on a request under U.S. Bankruptcy Codesection 362(d) (or under any successor statute or rule) by Contractor for amodification of the stays of proceedings (a “Modification of the Stays Motion”)shall be combined with a final hearing so that such hearing may be concludednot less than thirty (30) days after the filing of the Contractors’Modification of the Stays Motion.

 

Purchaseracknowledges that the provisions of this Article 22(b)(v) are critical elementsof the transaction to Contractor. The Parties have consulted legal counselexperienced in such issues, and agree that a provision of this type isbeneficial in these circumstances.

 

(C)                   Stop Work by Contractor in relation with Phase 3activities.

 

(i)                         In the event Purchaser fails tomake any payment in relation with Phase 3 Spacecraft in due time as requiredpursuant to this Contract, Contractor shall notify Purchaser in writing of suchfailure. If such failure is not cured by Purchaser within ten (10) Days afterthe date of such notification made by Contractor, Contractor shall be entitledto draw immediately the unpaid amount from the Escrow Account, provided suchEscrow Account is the implementation for the Security Instrument as set forthin Article 26 (D).

 

In such case, Purchasershall replenish the Escrow Account so that the amount of suchEscrowAccount shall equal the amounts (“Security Amounts”)  as identified and set forth in the securityamounts column in Exhibit F. In the event Purchaser fails to replenish theEscrow Account within thirty (30) Days from the date of notification of thefailure made by Contractor as defined above, Contractor shall be entitled toimmediately stop the Work under this Contract.

 

If Purchaser fails toreplenish the Escrow Account within thirty (30) Days from the date Contractorhas stopped the Work as defined above, Contractor shall be entitled toimmediately terminate the Contract by written notice sent to Purchaser and theprovisions of Article 22(B)(iv) shall apply.

 

If Purchaser replenishesthe Escrow Account on or before thirty (30) Days from the date Contractor hasstopped the Work as defined above, Contractor shall resume any Work suspendedas reasonably and promptly as possible provided that (a) Purchaser has paid toContractor all costs and expenses incurred as a result of the stop Workhereunder and (b) the schedule of the Contract shall be adjusted (provided suchscheduleadjustment shall not be less than one Day for each Day of Workstoppage).

 

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(ii)                      In the event Purchaser fails atany time during the performance of the Contract to maintain the requiredSecurity Amounts for the Escrow Account as set forth in Exhibit (F).  Contractor shall notify Purchaser in writingof such failure. If such failure is not cured by Purchaser within thirty (30)Days after the date of such notification made by Contractor, Contractor shallbe entitled to immediately stop the Work under this Contract.

 

If Purchaser fails toreplenish the Escrow Account within thirty (30) Days from the date Contractorhas stopped the Work as defined above, Contractor shall be entitled toimmediately terminate the Contract by written notice sent to Purchaser and theprovisions of Article 22(C)(iv) shall apply.

 

If Purchaser replenishesthe Escrow Account on or before thirty (30) Days from the date Contractor hasstopped the Work as defined above, Contractor shall resume any Work suspendedas reasonably and promptly as possible provided that (a) Purchaser has paid toContractor all costs and expenses incurred as a result of the stop Workhereunder and (b) the schedule of the Contract shall be adjusted (provided suchschedule adjustment shall not be less than one Day for each Day of Workstoppage).

 

Should the Parties agree to enterin a Security Instrument other than the Escrow Account, then this Article 22 (C)shall be adjusted in accordance with such agreed to Security Instrument.

 

(iii)                   In the event Purchaser fails toperform any material obligations (other than those expressed in Article 22(C)(i)and Article 22(C)(ii)), Contractor shall notify Purchaser in writing of suchfailure. If such failure is not cured by Purchaser within thirty (30) Daysafter the date of such notification made by Contractor, Contractor shall beentitled to immediately stop the Work under this Contract.

 

If Purchaser fails to curethe material breach within thirty (30) Days from the date Contractor hasstopped the Work as defined above, Contractor shall be entitled to immediatelyterminate the Contract by written notice sent to Purchaser and the provisionsof Article 22(C)(iv) shall apply.

 

If Purchaser cures thematerial breach on or before thirty (30) Days from the date Contractor hasstopped the Work as defined above, Contractor shall resume any Work suspendedas reasonably and promptly as possible provided that (a) Purchaser has paid toContractor all costs and expenses incurred as a result of the stop Workhereunder and (b) the schedule of the Contract shall be adjusted (provided suchschedule adjustment shall not be less than one Day for each Day of Workstoppage).

 

(iv)                    In the event of termination ofthe Contract by Contractor pursuant to this Article 22(C), Purchaser shall beliable to Contractor for the charges payable pursuant to Article 21(B) whichshall includeall costs and expenses incurred as a result of the stopWork hereunder, but in no event to exceed the maximum aggregate payments to bemade as set forth in Exhibit F for two (2) quarters following the date oftermination notice.

 

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Contractor shall be entitled to draw immediatelysuch amounts under the Escrow Account within thirty (30) Days after the date oftermination. In case the amounts drawn under the Escrow Account do not coverthe full amount due and payable to Contractor, Purchaser shall pay the balanceto Contractor.

 

(v)                         In theevent of a bankruptcy filing by or against Purchaser, and the occurrence of apost-bankruptcy default by Purchaser including, but not limited to, a defaultunder Article 34(F), Purchaser consents to a modification of the stays ofproceedings to permit the Contractor to exercise such rights and remedies asmay be available to it under the Contract or applicable law, including, but notlimited to, the right to suspend performance, terminate the Contract andexercise rights under other agreements with the Purchaser.

 

Further, Purchaser consents that any preliminaryhearing on a request under U.S. Bankruptcy Code section 362(d) (or under anysuccessor statute or rule) by Contractor for a modification of the stays ofproceedings (a “Modification of the Stays Motion”) shall be combined with afinal hearing so that such hearing may be concluded not less than thirty (30)days after the filing of the Contractors’ Modification of the Stays Motion.

 

Purchaser acknowledges that the provisions of this Article22(C)(v) are critical elements of the transaction to Contractor. The Partieshave consulted legal counsel experienced in such issues, and agree that aprovision of this type is beneficial in these circumstances.

 

**Article 23. Arbitration**

 

(A)                  Any dispute or disagreementarising between the Parties in connection with any interpretation of anyprovision of the Contract, or the compliance or non-compliance therewith, orthe validity or enforceability thereof, or any other dispute under any Article hereofwhich is not settled to the mutual satisfaction of the Parties within thirty(30) Days (or such longer period as may be mutually agreed) from the date thateither Party informs the other in writing that such dispute or disagreementexists, shall be settled by arbitration administered by the AmericanArbitration Association under its Commercial Arbitration Rules and the SupplementaryProcedures for Large, Complex Disputes in effect on the date that such noticeis given, except as otherwise specified herein.

 

(B)                    The Party which demands arbitration ofthe controversy shall in writing specify the matter to be submitted to arbitration,and at the same time, choose and nominate an arbitrator; thereupon, withinfifteen (15) Days after receipt of such written notice, the other Party shallin writing choose and nominate a second arbitrator.

 

The two arbitrators so chosen shall forthwithselect a third arbitrator, giving written notice to both Parties of the choiceso made and fixing a time and place in New York City, at which both Parties mayappear and be heard with respect to such controversy.  In case the two arbitrators shall fail toagree upon a third arbitrator within a period of seven (7) Days, or if for anyother reason there shall be a lapse in the naming of an arbitrator or

 

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arbitrators, or in the filling of avacancy, or in the failure or refusal of any arbitrator or arbitrators toattend or fulfill his or their duties, then upon application by either Party tothe controversy, arbitrators shall be named by the American ArbitrationAssociation in accordance with its Arbitration Rules.

 

The arbitrators shall control discoveryas they shall determine is appropriate in the circumstances, taking intoaccount the needs of the Parties and the desirability of having the discoverytake place in an expeditious and cost-effective manner. Any discovery shall belimited to information directly relevant to the controversy or claim inarbitration and shall be concluded within ninety (90) Days after thearbitrators are appointed, unless good cause for an extension of such deadlineis shown.

 

(C)                    The arbitrators shall notalter or modify the terms and conditions of this Contract but shall considerthe pertinent facts and circumstances and be guided by the terms and conditionsof this Contract.  If a solution is notfound in the terms and conditions of this Contract, the arbitrators shall beguided by the substantive laws of the State of New York, excluding all conflictof law rules.  The arbitration award madeshall be final and binding upon the Parties, their successors and assignees,and judgment may be entered thereon, upon the application of either Party, byany court having jurisdiction. Each Party shall bear the cost of preparing andpresenting its case including its own attorneys’ fees; and the cost ofarbitration, including the fees and expenses of the arbitrator or arbitrators,will be shared equally by the Parties.

 

(D)                   The relief that may beawarded by the arbitrators under any arbitration arising from this Contract maynot exceed actual compensatory damages. In no event may the arbitrators award punitive damages or otherwisedisregard the limitations of liability set forth in this Contract.

 

**Article 24. Warranty**

 

(A)                  Contractor warrants thateach Spacecraft shall be free from material defects in materials andworkmanship and will conform to the requirements in Exhibit B. This warrantyshall start upon the date of the Pre-Shipment Review and shall run for a periodof one (1) year, or until Intentional Ignition, whichever is earlier.

 

In case of storagepursuant to Article 29(A), the warranty will be extended for a period of two (2)years or up to the Intentional Ignition of the stored Spacecraft, whicheveroccurs earlier. After Intentional Ignition, the obligations of Contractor incase of defects identified on a Spacecraft shall be limited to the performanceof the Anomaly Support.

 

(B)                    Contractor warrants that theSatellite OBPE Software shall be free from material defects in materials andworkmanship and will conform to the requirements in Exhibit B. This warrantyshall start upon the date of Intentional Ignition of the first successfullaunch and shall run for a period of one (1) year. The scope of this warrantyis as set forth in Exhibit A.

 

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(C)                    Subject to the provisions ofArticle 16, Contractor warrants that the DSS shall be free from materialdefects in materials and workmanship and will conform to the requirements in ExhibitE. This warranty shall start upon the date of Final Acceptance thereof andshall run for a period of two (2) years.

 

(D)                   Without waiver of its rightto terminate this Contract for default, Purchaser shall have the right, at anytime during the period of this warranty and irrespective of prior inspectionsor acceptance, to require that any Deliverable Item not conforming to thematerial requirements of the Contract by written notice sent to Contractor(detailing to which extent the Contract requirements are not met) be correctedor replaced, at Contractor’s expense and option.

 

(E)                     The remedy under this Article24 shall not apply, as far as the DSS and the Satellite OBPE Software areconcerned, if repair or parts replacement is required because of accident,unusual physical or electrical stress, negligence, misuse, failure ofenvironmental control prescribed in operations and maintenance manuals, repairor alterations by Purchaser, its officers, directors, employees, consultants,representatives or agents, or causes other than ordinary use. Furthermore, the warranty is contingentupon Contractor being given access to delivered Deliverable Items in order toeffect any correction or replacement.

 

(F)                     In addition to the rights,duties and obligations of Contractor under other provisions of this Contract,Contractor shall regularly and diligently review and assess the generic designof each Spacecraft and related equipment, and the performance data availablefrom any Spacecraft which has been launched or is to be launched and theperformance of any equipment (other than Spacecraft) supplied, operated orinstalled or to be so supplied, operated or installed by Contractor up to thetime of launch for a Spacecraft.  If suchreview and assessment shows that a material defect exists which affectsadversely or is reasonably likely to affect adversely the operation or performanceof a Spacecraft or other equipment, Contractor shall notify Purchaser of anychanges required thereto and, upon the written agreement of Purchaser, takeprompt and appropriate measures at Contractor’s sole cost to correct aSpacecraft and other equipment before launch, so as to eliminate the defecttherefrom.

 

Purchaser shall provide to Contractor for the purposeof the investigation all available data and information related to theoperation of the Spacecraft in orbit. In the event that correctivemeasures taken pursuant to this Article 24 cause a delay, such delay shall betreated like an excusable delay and there shall be an equitable adjustment tothe schedule and other terms for performance for the affected Work.

 

(G)                    Purchaser authorizesContractor to disclose material deficiencies about Spacecraft to third parties(customers, consultants and insurers) if problems are discovered either duringproduction or on orbit and if such problems are likely to affect otherspacecrafts. This disclosure is subject to US export control restrictions andexecution of a

 

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confidentiality agreementand shall not identify Globalstar System, unless Purchaser otherwise agrees.

 

(H)                   EXCEPT AS IS OTHERWISEEXPRESSLY PROVIDED IN THIS CONTRACT, NO OTHER WARRANTIES, WHETHER STATUTORY,EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THOSE OF MERCHANTABILITY ANDFITNESS FOR ANY PARTICULAR PURPOSE, SHALL APPLY TO THE GOODS AND SERVICESHEREUNDER AND THE REMEDIES PROVIDED HEREIN ARE THE SOLE REMEDIES FOR FAILURE BYCONTRACTOR TO FURNISH WORK THAT IS FREE FROM DEFECTS IN MATERIAL OR WORKMANSHIPAND CONFORMANCE WITH REQUIREMENTS AS SET FORTH IN THIS ARTICLE 24. IN NO EVENTSHALL CONTRACTOR BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE ORSPECIAL DAMAGES. ALL OTHER WARRANTIES OR CONDITIONS IMPLIED BY ANY OTHERSTATUTORY ENACTMENT OR RULE OF LAW WHATSOEVER ARE EXPRESSLY EXCLUDED ANDDISCLAIMED.

 

#### **Article 25.  Communication and Authority**

#### ** **

(A)                    [*] is assigned as Purchaser’s Program Manager with authorityto issue technical direction within the scope of this Contract.  [*] is assigned as Contractor’s ProgramManager with authority to accept such direction.  Notwithstanding Article 25(A), the foregoingProgram Managers are authorized (i) to initial the Exhibits and anymodifications thereto (except Exhibit F), and (ii) to execute the waivers oftechnical compliance with the specifications in the Exhibits.

 

(B)                    All contractualcorrespondence to Purchaser will be addressed to (with copy to the ProgramManager) :

 

[*]

Globalstar,Inc.

461South Milpitas Blvd.

Milpitas,California 95035, U.S.A.

Email: [*]

 

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All technical correspondence to Purchaserwill be addressed to :

 

[*]

Globalstar, Inc.

461 SouthMilpitas Blvd.

Milpitas, California 95035, U.S.A.

Email: [*]

 

Allcontractual correspondence to Contractor will be addressed to (with copy to theProgram Manager) :

 

[*]

Thales Alenia Space France

100, Boulevard du midi - B.P 99

06156 Cannes la Bocca Cedex — France

Email: [*]

 

Alltechnical correspondence to Contractor will be addressed to :

 

[*]

Thales Alenia Space France

100 Boulevard du midi - B.P 99

06156 Cannes la Bocca Cedex — France

Email: [*]

 

(C)                    In a time criticalsituation, such as in the case of failures or suspected failures oftransponders or other operational or technical matters requiring immediateattention, notice may be given by telephone. Any notice given verbally will beconfirmed in writing as soon as practicable thereafter in accordance with Article25(D).

 

(D)                   Except as provided in Article25(C), all notices, demands, reports, orders and requests hereunder by oneParty to the other shall be in writing and deemed to be duly given on the sameBusiness Day if sent by electronic means (*i.e.*,electronic mail) or delivered by hand during the receiving Party’s regularbusiness hours, or on the date of actual receipt if sent by pre-paid overnight,registered or certified mail.

 

(E)                     The Parties agree tocooperate in implementing the use of electronic signatures, provided that suchuse is consistent with applicable law.

 

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#### **Article 26.  Spacecraft for Phase 3**

#### ** **

(A)                  Phase 3 Delivery - Advanced Schedule of six (6) Spacecraft.

 

Upon EDC2, the Contractor shall proceed withthe procurement of Long Lead Items (LLI) for advancement of six (6) Spacecraftunder Phase 3.

 

The Purchaser may notify Contractor in writingto proceed with the completion of the manufacture and test of the six (6) Spacecraft(“the Completion Notice”) at any time between May 1st, 2010 (“the Earliest Call-Up Date”) and September 1st 2010 (“theLatest Call-Up Date”), unless Purchaser elects to postpone the RequiredDelivery Dates as set forth in Article26(C) below. The PSR Date for the sixth (6th) Spacecraft of the Batch shall occur within twenty(20) months after the date of the Completion Notice.

 

If on the Latest Call-Up Date the Purchaser hasnot issued the Completion Notice for the Regular Delivery Schedule as per Article26 (B) below, and has not elected to postpone the Required Delivery Dates as set forth in Article 26(C) below, then the Contractshall be deemed terminated by Purchaser for convenience in relation to the six (6)Spacecraft under Phase 3 and the provisions of Article 21 shall apply, unlessotherwise agreed by the Parties.  In suchcase, the payment amount of [*]Euro ([*] Euro) referred to in Article 4 Item1Bis shall be due in addition to the termination cost referred to in Article 21of the Contract and payable within 1 week after receipt of the correspondinginvoice.

 

As a condition of Contractor’s acceptance ofthe Completion Notice, the Purchaser shall have established the appropriateSecurity Instrument as set forth in (D) below.

 

(B)                    Phase 3 Delivery — RegularDelivery

 

(i) In order to maintain the RegularDelivery of the seventeen (17) Spacecraft for which LLI have not been orderedby Contractor, Purchaser shall ensure that the agreed to Security Instrument isin place on February 1, 2010 as a condition for Contractor’s start ofactivities for manufacture and test of such seventeen (17) Spacecraft inaccordance with the Contract, unless Purchaser elects to postpone the Required Delivery Dates asset forth in Article 26(C) below.

 

If on February 1, 2010 the Purchaserhas not put in place the agreed to Security Instrument as a condition forContractor’s start of activities for manufacture and test of the seventeen (17)Spacecraft in accordance with the Contract and has not elected to postpone theRequired Delivery Dates of the seventeen (17) Spacecraft under Phase 3 as setforth in Article 26(C) below, then the Contract shall be deemed terminated byPurchaser for convenience in relation to the seventeen (17) Spacecraft underPhase 3 and the provisions of Article 21 shall apply.

 

(ii) If by September 1, 2010 thePurchaser has not issued the Completion Notice as provided for in Article 26(A),then in order to maintain the Regular Delivery of the six

 

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(6) Spacecraft of Phase 3 for which LLI have been ordered,Purchaser shall ensure that the agreed to Security Instrument is in place on September1, 2010 as a condition for Contractor’s start of activities for manufacture andtest of the six (6) Spacecraft in accordance with the Contract, unlessPurchaser elects to postpone the Required Delivery Dates asset forth in Article 26(C) below.

 

If by September 1, 2010 thePurchaser has not issued the Completion Notice as provided for in Article 26(A), and the Security Instrument in order to maintain the Regular Schedule isnot in place and the Purchaser does not elect to postpone the Required DeliveryDates as set forth in Article 26 (C) below, then the Contract shall be deemed terminated by Purchaser for convenience inrelation to the six (6) Spacecraft under Phase 3 and the provisions of Article 21shall apply.  In such case, the paymentamount of [*]Euro ([*] Euro) referred to in Article 4 Item 1Bis shall be due inaddition to the termination cost referred to in Article 21 of the Contract andpayable within 1 week after receipt of the corresponding invoice.

 

(C)                    Phase 3 Delivery - Postponement Option

 

Purchaser may elect to postpone the RequiredDelivery Dates for Spacecraft under Phase 3 by Thirteen months (13) months uponwritten notice to Contractor to be received on or before the date as follows:

 

(i)                                     No later than February1, 2010 for the postponement of the Required Delivery Dates of the seventeen(17) Spacecraft under Phase 3;  and

 

(ii)                                  No later than September 1, 2010 for thepostponement of the Required Delivery Dates of the six (6) Spacecraft underPhase 3 for which LLI have been      procured.

 

In the event of a thirteen month postponement,the agreed to Security Instrument shall be in place by March 5, 2011 for thepostponement of 26(C) (i) and by October 1, 2011 for the postponement of 26 (C)(ii).

 

In the event of the aforementionedpostponement in Article 26(C)(i) or (ii), the price for Spacecraft, Launch Support Services and MOSS under Phase 3shall be increased as by

 

(a)          [*]percent([*]%) per quarter:  if the postponementsin both Article 26(C)(i) and (ii) are elected for all twenty-three (23)Spacecraft under Phase 3;  and

 

(b)         [*]percent([*]%) per quarter:  if the postponementin Article 26(C)(i) only is elected for the seventeen (17) Spacecraft underPhase 3.

 

For the sake of clarification, there will beno price increase for Spacecraft, Launch Support Services and MOSS under Phase3 if the Purchaser issues the Completion Notice for the advanced six (6) Spacecraftunder Phase 3 and maintains the Regular Delivery of the remaining seventeen(17) Spacecraft under Phase 3.

 

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For a postponement period greater thanthirteen (13) months but not to exceed eighteen (18) months from the RegularDelivery Schedule (the “Maximum Postponement Period”) (subject to nonobsolescence of parts, materials and qualification processes ), or forpostponement of Spacecraft quantities other than stated above, the Parties shallnegotiate in good faith the appropriate equitable adjustment in price andschedule.

 

The Parties acknowledge that should Purchaserelect to postpone the six (6) Spacecraft under 26 (C) (ii), then the 17Spacecraft under 26 (C) (i) cannot maintain the Regular Delivery Schedule and should the Purchaser electto postpone the delivery of the 17 Spacecraft under 26 (C) (i), then thePostponement Period shall, as a minimum, correspond to the one elected for thesix (6) Spacecraft under 26 (C) (ii).

 

The Security Instrument date for apostponement period greater than thirteen (13) months shall be calculated basedon March 5, 2011 plus the actual additional postponement period greater thanthirteen (13) months. This calculation shall apply to postponement of Spacecraftunder 26 (C) (i) and/or 26 (C) (ii).

 

However, if the Security Instrument is not inplace for Phase 3 Spacecraft by the required date set forth in 26 (C) correspondingto the elected postponement period, then the Contract shall be deemed terminated by Purchaser for convenience inrelation to the remaining Spacecraft under Phase 3 and the provisions of Article21 shall apply.

 

(D)                   Security Instrument forPhase 3 Delivery

 

Asa condition for Contractor’s performance for Phase 3 delivery in accordance witheither (A), (B) or (C) above, the Parties agree that a certain SecurityInstrument in a form and substance to be mutually agreed at least thirty (30)days prior to the date(s) Purchaser elects to implement regarding the Phase 3delivery as set forth in each of the above subparagraphs. The need for aSecurity Instrument and/or a Security Amount shall take into considerationPurchaser’s funds available resulting from launch insurance proceeds availablefor the funding of Phase 3 delivery. Failing such mutual agreement, the Security Instrument, by default,shall be as follows:  On a quarterlybasis, Purchaser shall deposit into the Escrow Account the Security Amounts asidentified and set forth in Exhibit F.

 

**Article 27. Licenses for Export and Launch**

 

(A)                  This Contract is subject toall applicable United States laws and regulations relating to the export ofLicensed Items and to all applicable laws and regulations of the country orcountries to which such Licensed Items are exported or are sought to be exported.  Contractor and Purchaser shall fully complywith all requirements of any Technical Assistance Agreement related to thesubstance of this Contract, whether included as an Appendix hereto or not.

 

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(B)                    Without limiting the scopeof Article 27(A), Contractor shall use its reasonable best efforts to obtainall approvals and licenses required by the laws and regulations of the countryor countries to which the Licensed Items are exported or are sought to beexported. Purchaser shall use its reasonable best efforts to obtain all USgovernment approvals and licenses to export Licensed Items.

 

(C)                    If a government refuses to grant arequired approval or license to export the Licensed Items, or to launch a Spacecraft,or revokes or suspends an approval or license subsequent to its grant, orgrants a license or approval subject to conditions, then (i) this Contractshall, nevertheless, remain in full force and effect unless terminated forconvenience pursuant to Article 21, and (ii) the Delivery Schedule shall beadjusted on a day-for-day basis for each day that Contractor is impacted bysuch action or inaction of the United States government.  Such government action or inaction shall notmodify in any way the rights and obligations of the Parties under this Contractexcept to relieve Contractor of any obligations which cannot be performedwithout such an approval or license.

 

(D)                   The Parties confirm thattheir performance of, and obligations under, this Contract is in all matterssubject to the provisions of this Article 27, notwithstanding that (i) otherArticles (including without limitation those paragraphs in Articles 8 and 9)and Exhibits may not specifically reference Article 27, and (ii) other Articlesand Exhibits may state that they are subject to compliance with other Articlesof this Contract.

 

(E)                     Contractor and Purchasershall cooperate in amending as necessary the existing Technical AssistanceAgreement set forth in Appendix 2 and in the establishment of Appendix 3, whichwill allow Purchaser to be directly involved in matters related to some or allLicensed Items.

 

**Article 28. Spacecraft Storage**

 

(A)                  In the event of a delay orfailure to launch which is attributable to Contractor, Contractor, at itsexpense, shall provide for all transportation, storage (if needed), testing andrefurbishment and any Work and expense of maintenance to prevent deteriorationof a Spacecraft required before and until such time as a rescheduled launch canreasonably be effected.

 

(B)                      If Purchaser has not secured a firmlaunch commitment for Spacecraft having completed PSR, then Purchaser shalldirect Contractor to store such Spacecraft and the provisions of Article 29(A) andof the Storage Plan shall apply.

 

(C)                    Title and risk of loss for aSpacecraft to be stored in accordance with this Article 28 shall remain with,and the associated cost of insurance shall be borne by Contractor.

 

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#### **Article 29.  Options**

#### ** **

(A)                    Option for extended storage

 

(i)                         If, for anyreason other than the fault of Contractor, Purchaser so requests of Contractor,after successful completion of Pre-Shipment Review, Contractor shall place aSpacecraft in storage, in accordance with a Storage Plan, for a maximum periodof twelve (12) years. Unless otherwise set forth in the Storage Plan, title andrisk of loss for a Spacecraft in storage in accordance with this Article 29(A)(i)shall pass to Purchaser in accordance with Article 9. In addition, Purchaser shallbe responsible for all transportation costs in transit, (a) from Contractor’sfacility to storage, (b) if necessary, from the storage site to a refurbishmentsite, and (c) if applicable, from the Launch Site to the storage site andreturn.  Assuming a storage locationwithin a 150-mile radius of Contractor’s facility, Contractor shall beresponsible for all transportation costs from the storage site, or therefurbishment site if applicable, to the Launch Site and for the risk of lossand the expense of any insurance to cover such risk while in transit.

 

(ii)                    If storage of a Spacecraftis effected pursuant to Article 29(A), upon the request of Purchaser,Contractor shall provide periodic testing, necessary equipment, andenvironmental maintenance suitable for prevention of deterioration to theSpacecraft during the period of storage. Unless such environmental services areprovided by Contractor, any deterioration to a Spacecraft while in storageshall be at Purchaser’s risk and shall be corrected at Purchaser’s expense. Ifsuch services are provided by Contractor, correction of such deteriorationshall be at Contractor’s expense.

 

(iii)                     The price for storageactivities will be negotiated in good faith between the Parties upon requestfrom Purchaser.

 

(iv)                    If, at any time afterstorage effected pursuant to Article 29(A) begins, Purchaser elects to launch astored Spacecraft, Contractor shall inspect, test and refurbish as necessarysuch Spacecraft to a launch-ready condition and arrange for transit to the LaunchSite as directed by Purchaser.  The pricefor such activities will be negotiated in good faith between the Parties.

 

(v)                     If theSpacecraft is placed in storage pursuant to Article 29(A), then the provisionsof Article 18.1 and Article 20 shall no longer apply with respect to suchSpacecraft.

 

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(B)                    Additional Spacecraft

 

Purchasershall have the option to order from Contractor up to eighteen (18) additionalrecurring Spacecraft under the following conditions :

 

(i)                           Each order shall be for aminimum of six (6) additional Spacecraft.

 

(ii)                          If the order is exercised onor before July 1, 2008, then the firm fixed price for each additionalSpacecraft shall be [*]  Euros.

 

(iii)                       If the order is exercised on or after July2, 2008 for delivery of Satellites before December 31, 2013, then the firmfixed price for each additional Spacecraft shall be [*] Euros.

 

(iv)                      If the order is exercised after July 2,2008 for delivery after December 31, 2013, then the firm fixed price for eachadditional Spacecraft shall be [*] Euros plus a [*]% annual increase for eachyear after 2013.

 

(v)                       The Delivery schedule for each additional Spacecraftordered on or before April 1, 2013 (under the Regular Delivery) shall be :

 

· the first Spacecraft ordered will be deliveredtwenty two (22) months after the date of receipt of the order by Contractor ;and

 

· the subsequent Spacecraft will be delivered ata rate of one (1) per month after the first one of that Batch (the minimum sizeof the order being of 6 to 8 satellites per Batch).

 

The Delivery schedule for each additional Spacecraftordered after April 1, 2013 (under the Regular Delivery) shall be :

 

· the first Spacecraft ordered will be delivered thirty (30) months afterthe date of receipt of the order by Contractor ; and

 

· the subsequent Spacecraft will be delivered at a rate of one (1) per monthafter the first one of that Batch (the minimum size of the order being of 6 to8 satellites per Batch).

 

In any case, in case of obsolescence of components,Contractor reserves the right to renegotiate in good faith with Purchaser theprice and schedule for these additional satellites.

 

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(C)                    Satellite OBPE Software enhancement

 

Purchaser shall have the option to order fromContractor OBPE Software enhancement activities to be defined on a case-by-casebasis. The scope and price for such activities will be negotiated in goodfaith between the Parties on time and material basis.

 

(D)                   Extended Anomaly Support

 

Purchaser shall have the option to order fromContractor extended Anomaly Support activities to be defined on a case-by-casebasis. The scope and price for such activities will be negotiated in goodfaith between the Parties on time and material basis.

 

**Article 30. ****KeyPersonnel**

 

(A)                  At EDC, Contractor shallidentify the Key Personnel for the following positions to perform the servicesand staff the Work, working dedicated until successful completion of the Workperformed hereunder (individually a “Key Person” and collectively the “KeyPersonnel”).  No person can serve therole of more than one Key Person.

 

| **Position**    | ** ** | **Name** |
|-----------------|------------|----------|
| Program Manager |       | [*]      |

 

(B)                    Key Personnel shall not beremoved from performance of the Work under this Contract unless replaced withpersonnel of substantially equal qualifications and ability.  Purchaser shall have the right to review thequalifications of any proposed replacements. If Purchaser deems, in its reasonable judgment, the proposedreplacements to be unsuitable, Purchaser may require Contractor to offeralternative candidates.  Notwithstandingits role in reviewing Key Personnel and their replacements, Purchaser shallhave no supervisory control over their performance, and nothing in this Articleshall relieve Contractor of any of its obligations under this Contract, or ofits responsibility for any acts or omissions of its personnel.

 

**Article 31. Indemnification and Insurance**

 

(A)                  Contractor shall indemnifyand hold harmless Purchaser, and its subsidiaries and affiliates, and itssubcontractors (if any), their respective officers, employees, agents, servantsand assignees, or any of them (collectively “Purchaser Indemnitees”), from anydirect or indirect loss, damage, liability and expense (including reasonableattorneys fees), on account of loss or damage to property and injuries,including death, to all persons, including but not limited to employees oragents of Contractor, the Subcontractors and the Purchaser Indemnitees, and toall other persons, arising from any occurrence caused by any negligent act oromission or willful misconduct of Contractor, the Subcontractors or any ofthem.

 

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AtContractor’s expense, Contractor shall defend any suits or other proceedingsbrought against the Purchaser Indemnitees on account thereof, and shall pay allexpenses and satisfy all judgments which may be incurred by or rendered againstthem, or any of them, in connection therewith.

 

Contractorshall have the right to settle any claim or litigation against which itindemnifies hereunder. Further, the Purchaser Indemnitees shall provide toContractor such reasonable cooperation and assistance as Contractor may requestto perform its obligations hereunder.

 

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

 

In addition, Purchaser shall waive any claim againstand shall indemnify and hold harmless Contractor Indemnitees from any direct orindirect loss, damage (including damage to property and injuries, includingdeath), liability and expense incurred by any third party and arising from use,operation or performance of the DSSs, the Satellite OBPE Software and anySpacecraft after Intentional Ignition, including as a result of modification orimprovements made by Purchaser.

 

Purchaser shall, at Purchaser’s expense,defend any suits brought against the Contractor Indemnitees referred to aboveand shall pay all expenses and satisfy all judgments which may be incurred byor rendered against them, or any of them, in connection therewith.  Purchaser shall have the right to settle anyclaim or litigation against which it indemnifies hereunder. Further, theContractor Indemnitees shall provide to Purchaser such reasonable cooperationand assistance as Purchaser may request to perform its obligations hereunder.

 

(C)                      Contractorshall, at its own expense, provide and maintain insurance which shall cover allWIP (including all Purchaser’s property while in Contractor’s custody) againstphysical loss or damage on an “all risks” property insurance basis, includingcoverage for the perils of flood or earthquake while in or about Contractor’sand its Subcontractors’ premises, while at other premises which may be used oroperated by Contractor for construction or storage purposes, and while intransit, or while at the Launch Site until Intentional Ignition for a Satelliteor upon placing a Satellite into storage.

 

Theamount of insurance shall be sufficient to cover the full replacement value ofall Work. Upon request by Purchaser, Contractor will provide certificate ofinsurance to Purchaser. Additionally, Contractor will add Purchaser as anadditional insured under the All Risks insurance as far as Purchaser’sinterests may appear.

 

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Theinsurance may be issued with deductibles, which are consistent with Contractor’scurrent insurance policies.  The amountof any loss up to the value of the deductible level, or not otherwise coveredby the insurance, shall be borne by Contractor.

 

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

 

(D)                     Contractor shall provide to Purchaser,prior to Intentional Ignition, a written statement containing the following :

 

· the Satellitesto be launched have passed qualification and acceptance tests, including theFRR, under the Contract, subject to written waivers that have been issued andapproved by Purchaser ; and

 

#### **·**any and all known defects or anomalies observed on (i) already launchedor on ground similar satellites manufactured by Contractor, or (ii) on theSatellites to be launched during their development, which came to Contractor’sknowledge prior to the Flight Readiness Review, have been recorded andinvestigated and that all required remedy measures have been implemented inaccordance with the applicable quality procedures as far as applicable and inso far as they would adversely affect the performance of the Satellites to belaunched, such information provided to Purchaser.

#### ** **

**Article32. ****EffectiveDate of Contract**

 

(A)                    This Amended and Restated Contract shallenter into force when all of the following conditions are fulfilled :

 

(i)                                     signature of theAmended and Restated Contract by both Parties ; and

(ii)                                  signature of the Export Credit Facility between Purchaser and Lender for the financing forPhase 1, Phase 2 (including LLI for 6 Spacecraft from Phase 3) has occurred asnotified by the Purchaser to the Contractor in writing.

 

N.B.:

(1) All of the above conditions must becompleted No Later Than June 5, 2009 in order to preserve the Terms andConditions as set forth in this Amended and Restated Contract.  Therefore, time is of the essence.

 

(2) For convenience, all dates in this Amendedand Restated Contract were based upon an assumed EDC2 of June 5, 2009, meaningthat the first draw down under the Export Credit Facility referred to hereabove has occurred prior to that date. However, should the first draw down occur later than June 5th, 2009, then all dates in this Amended and RestatedContract shall be postponed accordingly by the

 

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number of days elapsed between June 5th, 2009and actual date of the first draw down.

 

#### **Article 33.  Representations**

#### ** **

(A)                  Contractor represents,covenants and warrants that :

 

(i)                         Contractor’sexecution of and performance under this Contract will not result in a breachof, or constitute a default under, any contract, instrument or other agreementto which Contractor is a party or is bound; and

 

(ii)                      Contractor has full power, authority and legal right toexecute, deliver and perform this Contract, that the execution, delivery andperformance by Contractor of this Contract have been duly authorized by allnecessary action on the part of Contractor and do not require any furtherapproval or consent of any person or entity (whether governmental orotherwise), and that once executed by Contractor this Contract shall constitutea legal, valid and binding obligation of Contractor enforceable againstContractor in accordance with its terms.

 

(B)                      Purchaser represents, covenants and warrants that :

 

(i)                           Purchaser hasfull power, authority and legal right to execute, deliver and perform thisContract, that the execution, delivery and performance by Purchaser of thisContract have been duly authorized by all necessary action on the part ofPurchaser and do not require any further approval or consent of any person orentity (whether governmental or otherwise), and that once executed by Purchaserthis Contract shall constitute a legal, valid and binding obligation ofPurchaser enforceable against Purchaser in accordance with its terms.

 

(ii)                        Purchaser’sexecution of and performance under this Contract does not result in a breachof, or constitute a default under, any contract, instrument or other agreementto which Purchaser is a party or is bound.

 

#### **Article 34. **GeneralProvisions

#### ** **

(A)                  Each Party hereby agreesthat it will not, without the prior written approval of the other Party (suchapproval not to be unreasonably withheld or unduly delayed), assign or delegateany of their rights, duties, and obligations under this Contract, except to awholly-owned subsidiary of such Party (which assignment or delegation shall notrelieve the assignor or delegator of liability). In case of assignment by Purchaser, Purchaser shalldemonstrate to Contractor’s satisfaction that its successor or assignee possesses thefinancial resources to fulfill Purchaser’s obligations under this Contract.Upon such assignment, theassignee shall assume all rights and obligations of the assignor existing

 

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underthis Contract at the time of such assignment. This Article 34(A) shall notpreclude the granting of a security interest by a Party to a lender.

 

(B)                    Nothing contained in thisContract shall be deemed or construed by the Parties or by any third party tocreate any rights, obligations or interests in third parties, or to create therelationship of principal and agent, partnership or joint venture or any otherfiduciary relationship or association between the Parties and the rights andobligations of the Parties shall be limited to those expressly set forthherein.

 

(C)                    No failure on the part ofeither Party to notify the other Party of any noncompliance hereunder, and nofailure on the part of either Party to exercise its rights hereunder, shallprejudice any remedy for any subsequent noncompliance with any term orcondition of this Contract and shall be limited to the particular instance andshall not operate or be deemed to waive any future breaches or noncompliancewith any term or condition.  Except asotherwise expressly provided herein, all remedies and rights hereunder shall beexclusive and in lieu of all other rights and remedies available by law or inequity.

 

(D)                   The Parties shall complywith the United States Foreign Corrupt Practices Act, the OECD AntibriberyConvention and all other laws of any country dealing with improper or illegalpayments, gifts or gratuities. Contractor agrees not to pay, promise to pay orauthorize the payment of any money or anything of value, directly or indirectlyto any person for the purpose of illegally or improperly inducing a decision orobtaining or retaining business in connection with this Contract.

 

(E)                     This Contract (including allExhibits and Appendices) constitutes the entire agreement between the Partiesand supersedes all prior understandings, commitments and representationsbetween the Parties with respect to the subject matter hereof. In particular,this Contract supersedes the ATP entered into by and between the Parties. TheWork performed by Contractor pursuant to the ATP and any amounts paid by thePurchaser to Contractor under the ATP are considered as Work performed andcosts incurred and paid in the performance of this Contract.

 

TheEscrow Agreement is separate and independent from this Contract. The Parties donot intend for this Contract and the Escrow Agreement to constitute a singleagreement.

 

ThisContract may not be amended or modified and none of its provisions may bewaived, except by a writing signed by an authorized representative of the Partyagainst which the amendment, modification or waiver is sought to be enforced.

 

Inthe event any one or more of the provisions of this Contract shall for anyreason be held to be invalid or unenforceable, the remaining provisions of thisContract shall be unimpaired, and the invalid or unenforceable provision shallbe replaced by a provision which, being valid and enforceable, comes closest tothe intention of the Parties underlying the invalid or unenforceableprovisions. The Parties shall negotiate in good faith to attempt to agree uponany such replacement provision.

 

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Theparagraph headings herein shall not be considered in interpreting the text ofthis Contract.

 

Alloral and written communications between the Parties shall be conducted inEnglish.

 

ThisContract shall be governed by and interpreted in accordance with the laws ofthe State of New York, U.S.A., excluding its conflict of laws rules. The U.N.Convention on Contracts for the International Sales of Goods is not applicableto this Contract.

 

(F)                       In viewof a number of factors, including the substantial payments to Subcontractorsthat Contractor will be making in connection with its performance under thisContract, the Parties acknowledge and agree that if Purchaser should become adebtor in a case under the United States Bankruptcy Code, Contractor would beseverely and irreparably damaged unless Purchaser continues uninterrupted andtimely performance of its obligations under the Contract and promptly assumesor rejects this Contract.  In continuingto perform this Contract following a bankruptcy filing by the Purchaser,Contractor would incur millions of Euros of expense (including commitments toSubcontractors) that Contractor could avoid incurring through terminationclauses if the Contract ultimately is to be rejected in a bankruptcyproceeding. Accordingly, if Purchaser should become a debtor in a case (the “BankruptcyCase”) under the United States Bankruptcy Code, Purchaser shall, within thirty(30) days after the commencement of the Bankruptcy Case, (i) promptly adviseContractor of such, (ii) file a motion (the “Motion”) with the bankruptcy courtpresiding over the Bankruptcy Case seeking an order approving Purchaser’sassumption or rejection of this Contract within such thirty day period, and (iii)obtain a final and non-appealable order (the “Order”) approving the assumptionor rejection of this Contract. Purchaser agrees that it shall not, without theprior written consent of Contractor, withdraw the Motion or adjourn any hearingon the Motion.  Purchaser further agreesthat it will promptly take and diligently pursue any and all actions necessaryand/or appropriate, including such actions as may be reasonably requested byContractor, to obtain the Order within the thirty (30) day period set forthabove.  In the event Purchaser does not file the Motion and obtain the Orderwithin thirty (30) days after the commencement of the Bankruptcy Case, Contractorshall, in addition to any other rights and/or remedies it has or may have, beentitled to stop the Work under this Contract. Following such Work stoppage, if Purchaser still has not filed the Motion and obtained the Order withinthirty (30) days after Contractor has stopped the Work then, Contractorshall be entitled to terminate the Contract by written notice sent to Purchaserand the provisions of Article 22(B)(iv) shall apply.

 

Purchaser acknowledges that theprovisions of this Article 34(F) arecritical elements of the transaction to Contractor. The Parties have consultedlegal counsel experienced in such issues, and agree that a provision of thistype is beneficial in these circumstances.

 

(G)                      Purchaseragrees to give to Contractor access to its financial information and to provideto Contractor an update, via teleconference call as frequently as requested byContractor, of measures implemented or anticipated to secure full financing ofthe constellation.

 

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**Execution**

 

*In witness whereof*, the Parties have dulyexecuted this Contract.

 

 
| **Globalstar,  Inc.** |   | **Thales  Alenia Space France** |
|-----------------------|--------|---------------------------------|

 

 
| By:               | /s/ Anthony J. Navarra |   | By:               | /s/ Blaise Jaeger                |
|-------------------|------------------------|--------|-------------------|----------------------------------|
|              |                   |   |              |                             |
| Name:   | Anthony J. Navarra     |   | Name:   | Blaise JAEGER                    |
|              |                   |   |              |                             |
| Title:            | President              |   | Title:            | EVP and General Manager, Telecom |
|              |                   |   |              |                             |
| Date:             | June 2, 2009           |   | Date:             | June 3, 2009                     |

 

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