Document:

EX-10.1

   

  Exhibit 10.1

   

  EMPLOYMENT AGREEMENT

   

  THIS EMPLOYMENT AGREEMENT (this “Agreement”) is entered into by and between EngageSmart, Inc. (the “Company”) and Scott Semel (the “Executive”) as of March 1, 2022 (the “Effective Date”).

  WHEREAS, the Company wishes to employ Executive as Senior Vice President, General Counsel of the Company;

  WHEREAS, the Executive desires to provide services to the Company on the terms herein provided; and

  WHEREAS, the Company and the Executive desire to have the Agreement become effective as of the Effective Date.

  NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

  1.Employment Period. Subject to the provisions for earlier termination hereinafter provided, the Executive’s employment hereunder shall be for a term commencing on the Effective Date and ending on the third anniversary of the Effective Date (the “Initial Term”). The Initial Term shall automatically be extended for successive one year periods (each an “Extension Term” and, collectively with the Initial Term, the “Employment Period”) unless either party hereto gives notice of non-extension of the Employment Period to the other no later than ninety (90) days prior to the expiration of the then- applicable Initial Term or Extension Term. The Executive’s employment hereunder is terminable at will by the Company or by the Executive at any time (for any reason or for no reason), subject to the provisions of Section 4 hereof. For purposes of this Agreement and for the avoidance of doubt, notice by the Company of non-extension of the Employment Period shall not constitute a termination without Cause or Good Reason for the Executive to terminate his or her employment.

  2.Terms of Employment.

  a.Position and Duties.

  i.Role and Responsibilities. During the Employment Period, the Executive shall serve as Senior Vice President, General Counsel of the Company, and shall perform such employment duties as are usual and customary for such positions. The Executive shall report directly to the Chief Executive Officer of the Company (or his or her designee). At the Company’s request, the Executive shall serve the Company and/or its subsidiaries and affiliates in other capacities in addition to the foregoing, consistent with the Executive’s position. In the event that the Executive, during the Employment Period, serves in any one or more of such additional capacities, the Executive’s compensation shall not be increased beyond that specified in Section 2(b) hereof. In addition, in the event the Executive’s service in one or more of such additional capacities is terminated, the Executive’s compensation, as specified in Section 2(b) hereof, shall not be diminished or reduced in any manner as a result of such termination provided that the Executive otherwise remains employed under the terms of this Agreement.

  ii.Exclusivity. During the Employment Period, and excluding any periods of vacation and sick leave to which the Executive may be entitled, the Executive agrees to devote his full business time and attention to the business and affairs of the Company. Notwithstanding the foregoing, during the Employment Period, it shall not be a violation of this Agreement for the Executive to: (A) serve on boards, committees or similar bodies of charitable or nonprofit organizations, (B) fulfill limited teaching, 

   

  

   

  speaking and writing engagements, and (C) manage his personal investments, in each case, so long as such activities do not individually or in the aggregate materially interfere or conflict with the performance of the Executive’s duties and responsibilities under this Agreement; provided, that with respect to the activities in subclauses (A) and/or (B), the Executive receives prior written approval from the Chief Executive Officer.

  iii.Principal Location. During the Employment Period, the Executive shall perform the services required by this Agreement at the Company’s principal offices located in Braintree, Massachusetts (the “Principal Location”), except for travel to other locations as may be necessary to fulfill the Executive’s duties and responsibilities hereunder.

  b.Compensation, Benefits, Etc.

  i.Base Salary. During the Employment Period, the Executive shall receive a base salary (the “Base Salary”) of $325,000 per annum. The Base Salary shall be reviewed annually by the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board”) and may be increased from time to time by the Compensation Committee in its sole discretion. The Base Salary shall be paid in accordance with the Company’s normal payroll practices for executive salaries generally, but no less often than monthly. The Base Salary may be increased in the Compensation Committee’s discretion, but not reduced, and the term “Base Salary” as utilized in this Agreement shall refer to the Base Salary as so increased.

  ii.Annual Cash Bonus. In addition to the Base Salary, the Executive shall be eligible to earn, for each fiscal year of the Company ending during the Employment Period, a discretionary cash performance bonus (an “Annual Bonus”) under the Company’s bonus plan or program applicable to senior executives. The Executive’s target Annual Bonus shall be set at fifty percent (50%) of the Base Salary actually paid for such year (the “Target Bonus”). The actual amount of any Annual Bonus shall be determined by reference to the attainment of Company performance metrics and/or individual performance objectives, in each case, as determined by the Compensation Committee, and may be greater or less than the Target Bonus (or zero). Subject to Section 4(a)(i) hereof, payment of any Annual Bonus(es), to the extent any Annual Bonus(es) become payable, will be contingent upon the Executive’s continued employment through the applicable payment date, which shall occur on the date on which annual bonuses are paid generally to the Company’s senior executives.

  iii.Benefits. During the Employment Period, the Executive (and the Executive’s spouse and/or eligible dependents to the extent provided in the applicable plans and programs) shall be eligible to participate in and be covered under the health and welfare benefit plans and programs maintained by the Company for the benefit of its employees from time to time, pursuant to the terms of such plans and programs including any medical, life, hospitalization, dental, disability, accidental death and dismemberment and travel accident insurance plans and programs. During the Employment Period, the Company shall provide the Executive and the Executive’s eligible dependents with coverage under its group health plans. In addition, during the Employment Period, Executive shall be eligible to participate in any retirement, savings and other employee benefit plans and programs maintained from time to time by the Company for the benefit of its senior executive officers. Nothing contained in this Section 2(b)(iii) shall create or be deemed to create any obligation on the part of 

   

  

   

  the Company to adopt or maintain any health, welfare, retirement or other benefit plan or program at any time or to create any limitation on the Company’s ability to modify or terminate any such plan or program.

  iv.Expenses. During the Employment Period, the Executive shall be entitled to receive prompt reimbursement for all reasonable business expenses incurred by the Executive in accordance with the policies, practices and procedures of the Company provided to employees of the Company.

  v.Fringe Benefits. During the Employment Period, the Executive shall be eligible to receive such fringe benefits and perquisites as are provided by the Company to its employees from time to time, in accordance with the policies, practices and procedures of the Company, and shall receive such additional fringe benefits and perquisites as the Company may, in its discretion, from time-to-time provide.

  vi.Vacation. During the Employment Period, the Executive shall be entitled to time off in accordance with the plans, policies, programs and practices of the Company applicable to its employees in effect from time to time.

  3.Termination of Employment.

  a.Death or Disability. The Executive’s employment shall terminate automatically upon the Executive’s death during the Employment Period. Either the Company or the Executive may terminate the Executive’s employment in the event of the Executive’s Disability during the Employment Period. For purposes of this Agreement, “Disability” shall mean that the Executive has become entitled to receive benefits under an applicable Company long-term disability plan or, if no such plan covers the Executive, as determined in the reasonable discretion of the Board.

  b.Termination by the Company. The Company may terminate the Executive’s employment during the Employment Period for Cause or without Cause. For purposes of this Agreement, “Cause” shall have the meaning provided in the Company’s 2021 Incentive Award Plan.

  c.Termination by the Executive. The Executive’s employment may be terminated by the Executive for any reason, including with Good Reason or by the Executive without Good Reason. For purposes of this Agreement, “Good Reason” shall mean the occurrence of any one or more of the following events without the Executive’s prior written consent, unless the Company fully corrects the circumstances constituting Good Reason (provided such circumstances are capable of correction) as provided below:

  i.a material diminution in the Executive’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 2(a) hereof, excluding for this purpose any isolated, insubstantial or inadvertent actions not taken in bad faith and which are remedied by the Company promptly after receipt of notice thereof given by the Executive;

  ii.the Company’s material reduction of the Executive’s Base Salary, as the same may be increased from time to time;

  iii.a material change in the geographic location of the Principal Location which shall, in any event, include only a relocation of the Principal Location by more than twenty- five (25) miles from its existing location;

  iv.the Company’s material breach of this Agreement.

   

  

   

  Notwithstanding the foregoing, the Executive will not be deemed to have resigned for Good Reason unless (1) the Executive provides the Company with written notice setting forth in reasonable detail the facts and circumstances claimed by the Executive to constitute Good Reason within sixty (60) days after the date of the occurrence of any event that the Executive knows or should reasonably have known to constitute Good Reason, (2) the Company fails to cure such acts or omissions within thirty (30) days following its receipt of such notice, and (3) the effective date of the Executive’s termination for Good Reason occurs no later than sixty (60) days after the expiration of the Company’s cure period.

  d.Notice of Termination. Any termination by the Company for Cause, or by the Executive for Good Reason, shall be communicated by a Notice of Termination to the other parties hereto given in accordance with Section 10(b) hereof. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than thirty (30) days after the giving of such notice). The failure by the Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of the Executive or the Company, respectively, hereunder or preclude the Executive or the Company, respectively, from asserting such fact or circumstance in enforcing the Executive’s or the Company’s rights hereunder.

  e.Termination of Offices and Directorships; Return of Property. Upon termination of the Executive’s employment for any reason, unless otherwise specified in a written agreement between the Executive and the Company, the Executive shall be deemed to have resigned from all offices, directorships, and other employment positions if any, then held with the Company, and shall take all actions reasonably requested by the Company to effectuate the foregoing. In addition, upon the termination of the Executive’s employment for any reason, the Executive agrees to return to the Company all documents of the Company and its affiliates (and all copies thereof) and all other Company or Company affiliate property that the Executive has in his possession, custody or control. Such property includes, without limitation: (i) any materials of any kind that the Executive knows contain or embody any proprietary or confidential information of the Company or an affiliate of the Company (and all reproductions thereof), (ii) computers (including, but not limited to, laptop computers, desktop computers and similar devices) and other portable electronic devices (including, but not limited to, tablet computers), cellular phones/smartphones, credit cards, phone cards, entry cards, identification badges and keys, and (iii) any correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the customers, business plans, marketing strategies, products and/or processes of the Company or any of its affiliates and any information received from the Company or any of its affiliates regarding third parties.

  4.Obligations of the Company upon Termination. Upon a termination of the Executive’s employment for any reason, the Executive shall be paid, in a single lump-sum payment on the date of the Executive’s termination of employment, the aggregate amount of the Executive’s earned but unpaid Base Salary and accrued but unpaid vacation pay through the date of such termination (the “Accrued Obligations”).

   

  

   

  a.Without Cause or For Good Reason. If the Executive’s employment with the Company is terminated during the Employment Period (x) by the Company without Cause (other than by reason of the Executive’s Disability or due to the expiration of the Employment Period) or (y) by the Executive for Good Reason (in either case, a “Qualifying Termination”), then following the Executive’s Separation from Service (as defined below) (such date, the “Date of Termination”), in each case, subject to and conditioned upon compliance with Section 4(d) hereof, in addition to the Accrued Obligations:

  i.Cash Severance. The Company shall continue to pay to the Executive the Executive’s Base Salary in effect on the Date of Termination during the period beginning on the Date of Termination and ending on the six (6)-month anniversary of the Date of Termination in installments in accordance with the Company’s regular payroll practices as of the Date of Termination; provided that, notwithstanding the foregoing, if such termination of employment occurs within the period beginning one (1) month prior to a Change in Control, as defined in the Company’s 2021 Incentive Award Plan, as amended (and such Change in Control constitutes a “change in control event” as defined in Treasury Regulations Section 1.409A-3(i)(5)) and ending 12 months following such Change in Control (a “Change in Control Termination”), then in lieu of the foregoing payments set forth in this Section 4(a)(i), the Company shall pay to the Executive a single lump-sum amount equal to nine (9)-months of Executive’s Base Salary in effect on the Date of Termination on the sixtieth (60th) day after the Date of Termination, (B) a pro-rata Annual Bonus to which the Executive would have become entitled (if any) for the fiscal year of the Company during which the Date of Termination occurs, had the Executive remained employed through the payment date and paid at target, pro-rated based on the number of days during such fiscal year that the Executive was employed by the Company and payable in a single lump-sum payment on the date on which annual bonuses are paid to the Company’s senior executives generally for such year, but in no event later than March 15th of the calendar year immediately following the calendar year in which the Date of Termination occurs, with the actual date within such period determined by the Company in its sole discretion, and (C) notwithstanding anything to the contrary in any Company equity plan or any award agreement issued under any Company equity plan, full vesting acceleration of any Company equity awards that vest solely based on the passage of time and that are held by the Executive as of the Date of Termination.

  ii.COBRA. During the period commencing on the Date of Termination and ending on the six (6)-month anniversary of the Date of Termination (or, in the event of a Change in Control Termination, the nine (9)-month anniversary of the Date of Termination) (as applicable, the “COBRA Period”), subject to the Executive’s valid election to continue healthcare coverage under Section 4980B of the Internal Revenue Code and the regulations thereunder (together, the “Code”), the Company shall continue to provide the Executive and the Executive’s eligible dependents with coverage under its group health plans at the same levels and the same cost to the Executive as would have applied if the Executive’s employment had not been terminated based on the Executive’s elections in effect on the Date of Termination, provided, however, that (A) if any plan pursuant to which such benefits are provided is not, or ceases prior to the expiration of the period of continuation coverage to be, exempt from the application of Section 409A (as defined below) under Treasury Regulation Section 1.409A-1(a)(5), or (B) the Company is otherwise unable to continue to cover the Executive under its group health plans without incurring penalties (including without limitation, pursuant to Section 2716 of the Public Health Service Act or the Patient 

   

  

   

  Protection and Affordable Care Act), then, in either case, an amount equal to each remaining Company subsidy shall thereafter be paid to the Executive in substantially equal monthly installments over the continuation coverage period (or the remaining portion thereof).

  Notwithstanding the foregoing, it shall be a condition to the Executive’s right to receive the amounts provided for in Sections 4(a)(i), 4(a)(ii) and 4(a)(iii) hereof that the Executive execute and deliver to the Company an effective release of claims in substantially the form attached hereto as Exhibit A (the “Release”) within twenty-one (21) days (or, to the extent required by law, forty-five (45) days) following the Date of Termination and that the Executive not revoke such Release during any applicable revocation period.

  b.Death or Disability. Subject to Section 4(d) hereof, if the Executive incurs a Separation from Service by reason of the Executive’s death or Disability during the Employment Period, then in addition to the Accrued Obligations, all outstanding equity awards that vest based solely on the passage of time that are held by the Executive on the Date of Termination shall immediately become fully vested and, as applicable, exercisable.

  c.For Cause, Without Good Reason or Other Terminations. If the Company terminates the Executive’s employment for Cause, the Executive terminates the Executive’s employment without Good Reason, or the Executive’s employment terminates for any other reason not enumerated in Sections 4(a) or 4(b) hereof, in any case, during the Employment Period, or if the Executive’s employment with the Company is terminated due to the expiration of the Employment Period, then, in any case, the Company shall pay to the Executive the Accrued Obligations in cash within thirty (30) days after the Date of Termination (or by such earlier date as may be required by applicable law), and the Executive shall have no further rights hereunder.

  d.Six-Month Delay. Notwithstanding anything to the contrary in this Agreement, no compensation or benefits, including without limitation any severance payments or benefits payable under Section 4 hereof, shall be paid to the Executive during the six (6)-month period following the Executive’s “separation from service” from the Company (within the meaning of Section 409A, a “Separation from Service”) if the Company determines that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the payment of any such amounts is delayed as a result of the previous sentence, then on the first day of the seventh month following the date of Separation from Service (or such earlier date upon which such amount can be paid under Section 409A without resulting in a prohibited distribution, including as a result of the Executive’s death), the Company shall pay the Executive a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Executive during such period.

  e.Exclusive Benefits. Except as expressly provided in this Section 4 and subject to Section 5 hereof, the Executive shall not be entitled to any additional payments or benefits upon or in connection with the Executive’s termination of employment.

  5.Non-Exclusivity of Rights. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan, policy, practice or program of or any contract or agreement with the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program or contract or agreement except as explicitly modified by this Agreement.

   

  

   

  6.Confidential Information, Non-Competition and Non-Solicitation.

  a.The Executive shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company and its subsidiaries and affiliates, which shall have been obtained by the Executive in connection with the Executive’s employment by the Company and which shall not be or become public knowledge (other than by acts by the Executive or representatives of the Executive in violation of this Agreement). After termination of the Executive’s employment with the Company, the Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such information, knowledge or data, to anyone other than the Company and those designated by it; provided, however, that if the Executive receives actual notice that the Executive is or may be required by law or legal process to communicate or divulge any such information, knowledge or data, the Executive shall promptly so notify the Company.

  b.While employed by the Company and, for a period of twelve (12) months after the Date of Termination, the Executive shall not, at any time, directly or indirectly engage in, have any interest in (including, without limitation, through the investment of capital or lending of money or property), or manage, operate or otherwise render any services to, any person or entity (whether on his own or in association with others, as a principal, director, officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity) that engages in, or plans to be engaged in (either directly or through any subsidiary or affiliate thereof), services or products offered by the Company or any of its affiliates as of the Date of Termination that represent more than 1% of the Company’s annual revenue, or products or services that are actively being developed as part of the Company’s internal development efforts as of the Date of Termination (including, without limitation, through the investment of capital or lending of money or property), or that manages, operates or otherwise renders any services in connection with, such business (whether on his own or in association with others, as a principal, director, officer, employee, agent, representative, partner, member, security holder, consultant, advisor, independent contractor, owner, investor, participant or in any other capacity). Notwithstanding the foregoing, the Executive shall be permitted to acquire a passive stock or equity interest in such a person or entity; provided that such stock or other equity interest acquired is less than five percent (5%) of the outstanding interest in such person or entity.

  c.While employed by the Company and, for a period of twelve (12) months after the Date of Termination, the Executive shall not directly or indirectly solicit, induce, or encourage any employee or consultant of any member of the Company and its subsidiaries and affiliates to terminate their employment or other relationship with the Company and its subsidiaries and affiliates or to cease to render services to any member of the Company and its subsidiaries and affiliates and the Executive shall not initiate discussion with any such person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other individual or entity. During his employment with the Company and for a period of twelve (12) months after the Date of Termination, the Executive shall not solicit, induce, or encourage any customer, client, vendor, or other party doing business with any member of the Company and its subsidiaries and affiliates to terminate its relationship therewith or transfer its business from any member of the Company and its subsidiaries and affiliates and the Executive shall not initiate discussion with any such person for any such purpose or authorize or knowingly cooperate with the taking of any such actions by any other individual or entity.

   

  

   

  d.In recognition of the facts that irreparable injury will result to the Company in the event of a breach by the Executive of his obligations under Sections 7(a), (b) and (c) hereof, that monetary damages for such breach would not be readily calculable, and that the Company would not have an adequate remedy at law therefor, the Executive acknowledges, consents and agrees that in the event of such breach, or the threat thereof, the Company shall be entitled, in addition to any other legal remedies and damages available, to specific performance thereof and to temporary and permanent injunctive relief (without the necessity of posting a bond) to restrain the violation or threatened violation of such obligations by the Executive.

  7.Representations. The Executive hereby represents and warrants to the Company that (a) the Executive is entering into this Agreement voluntarily and that the performance of the Executive’s obligations hereunder will not violate any agreement between the Executive and any other person, firm, organization or other entity, and (b) the Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by the Executive’s entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement.

  8.Successors.

  a.This Agreement is personal to the Executive and, without the prior written consent of the Company, shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal representatives.

  b.This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

  c.The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

  9.Miscellaneous.

  a.Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect.

  b.Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

  If to the Executive: at the Executive’s most recent address on the records of the Company.

  If to the Company:

  EngageSmart, Inc.

  30Braintree Hill Office Park, Suite 101

  Braintree, Massachusetts 02184

  Attn: General Counsel

   

  

   

  with a copy to:

  Latham & Watkins LLP

  1271 Avenue of the Americas

  New York, NY 10020

  Attn: Bradd Williamson

  or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

  c.Sarbanes-Oxley Act of 2002. Notwithstanding anything herein to the contrary, if the Company determines, in its good faith judgment, that any transfer or deemed transfer of funds hereunder is likely to be construed as a personal loan prohibited by Section 13(k) of the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange Act”), then such transfer or deemed transfer shall not be made to the extent necessary or appropriate so as not to violate the Exchange Act and the rules and regulations promulgated thereunder.

  d.Section 409A of the Code.

  i.To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder (together, “Section 409A”). Notwithstanding any provision of this Agreement to the contrary, if the Company determines that any compensation or benefits payable under this Agreement may be subject to Section 409A, the Company shall work in good faith with the Executive to adopt such amendments to this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A, including without limitation, actions intended to (i) exempt the compensation and benefits payable under this Agreement from Section 409A, and/or (ii) comply with the requirements of Section 409A; provided, however, that this Section 10(d) shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so.

  ii.Any right to a series of installment payments pursuant to this Agreement is to be treated as a right to a series of separate payments. To the extent permitted under Section 409A, any separate payment or benefit under this Agreement or otherwise shall not be deemed “nonqualified deferred compensation” subject to Section 409A to the extent provided in the exceptions in Treasury Regulation Section 1.409A-1(b)(4), Section 1.409A-1(b)(9) or any other applicable exception or provision of Section 409A. Any payments subject to Section 409A that are subject to execution of a waiver and release which may be executed and/or revoked in a calendar year following the calendar year in which the payment event (such as termination of employment) occurs shall commence payment only in the calendar year in which the consideration period or, if applicable, release revocation period ends, as necessary to comply with Section 409A. All payments of nonqualified deferred compensation subject to Section 409A to be made upon a termination of employment under this Agreement may only be made upon Employee’s “separation from service” from the Company (within the meaning of Section 409A, a “Separation from Service”).

   

  

   

  iii.To the extent that any payments or reimbursements provided to the Executive under this Agreement are deemed to constitute compensation to the Executive to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such amounts shall be paid or reimbursed reasonably promptly, but not later than December 31 of the year following the year in which the expense was incurred. The amount of any such payments eligible for reimbursement in one year shall not affect the payments or expenses that are eligible for payment or reimbursement in any other taxable year, and the Executive’s right to such payments or reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

  e.Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

  f.Section 280G of the Code.

  i.Best Pay Provision. In the event that any payment or benefit received or to be received by the Executive pursuant to the terms of any plan, arrangement or agreement (including any payment or benefit received in connection with a change in ownership or control or the termination of the Executive’s employment) (all such payments and benefits being hereinafter referred to as the “Total Payments”) would be subject (in whole or part) to the excise tax (the “Excise Tax”) imposed under Section 4999 of the Code, then the Total Payments shall be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax but only if (i) the net amount of such Total Payments, as so reduced (after subtracting the amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (ii) the net amount of such Total Payments without such reduction (after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Executive would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments); provided, however, that this sentence shall not apply if, immediately before the change in ownership or control on which such Total Payments are contingent or otherwise relate, no stock in the Company is readily tradeable on an established securities market or otherwise (as determined in accordance with Treasury Reg. Section 1.280G-1 Q&A 6). Except to the extent that an alternative reduction order would result in a greater economic benefit to the Executive on an after-tax basis, the parties intend that the Total Payments shall be reduced in the following order: (w) reduction of any cash severance payments otherwise payable to the Executive that are exempt from Section 409A of the Code, (x) reduction of any other cash payments or benefits otherwise payable to the Executive that are exempt from Section 409A of the Code, but excluding any payment attributable to the acceleration of vesting or payment with respect to any equity award that is exempt from Section 409A of the Code, (y) reduction of any other payments or benefits otherwise payable to the Executive on a pro-rata basis or such other manner that complies with Section 409A of the Code, but excluding any payment attributable to the acceleration of vesting and payment with respect to any equity award that is exempt from Section 409A of the Code, and (z) reduction of any payments attributable to the acceleration of vesting or payment with respect to any equity award that is exempt from Section 409A of the Code; provided, in case of clauses (x), (y) and (z), that reduction of any payments or benefits attributable to the acceleration of vesting of equity awards shall be first 

   

  

   

  applied to equity awards with later vesting dates; provided, further, that, notwithstanding the foregoing, any such reduction shall be undertaken in a manner that complies with and does not result in the imposition of additional taxes on the Executive under Section 409A of the Code. The foregoing reductions shall be made in a manner that results in the maximum economic benefit to the Executive on an after-tax basis and, to the extent economically equivalent payments or benefits are subject to reduction, in a pro rata manner.

  ii.Determinations. All determinations regarding the application of this Section 10(f) shall be made by an independent accounting firm or consulting group with nationally recognized standing and substantial expertise and experience in performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax retained by the Company prior to the date of the applicable change in ownership or control (the “280G Firm”). For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, no portion of the Total Payments shall be taken into account which (x) does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, or (y) constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section 280G(b)(3) of the Code) allocable to such reasonable compensation, (ii) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the 280G Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. All determinations related to the calculations to be performed pursuant to this this Section 10(f) shall be done by the 280G Firm. The 280G Firm will be directed to submit its determination and detailed supporting calculations to both the Executive and the Company within fifteen (15) days after notification from either the Company or the Executive that the Executive may receive payments which may be “parachute payments.” The Executive and the Company will each provide the 280G Firm access to and copies of any books, records, and documents as may be reasonably requested by the 280G Firm, and otherwise cooperate with the 280G Firm in connection with the preparation and issuance of the determinations and calculations contemplated by this Agreement. The fees and expenses of the 280G Firm for its services in connection with the determinations and calculations contemplated by this Agreement will be borne solely by the Company.

  iii.Exception. Notwithstanding the foregoing, if any portion of the Total Payments would not be subject to the Excise Tax if the stockholder approval requirements of Section 280G(b)(5) of the Code are satisfied, subject to the Executive’s waiver of the rights to such portion of the Total Payments above the safe harbor threshold in accordance with and to the extent required by Section 280G of the Code with respect to any portion of the Total Payments that would otherwise be subject to excise tax imposed by Section 4999 of the Code (before giving effect to any reduction in the Total Payments contemplated above), the Company shall use its reasonable best efforts to cause such payments to be submitted for such approval prior to the event giving rise to such payments. To the extent the Company submits any payment or benefit payable to the Executive under this Agreement or otherwise to the Company’s stockholders for approval in accordance with Treasury Reg. Section 1.280G-1 Q&A 

   

  

   

  7, the foregoing provisions under this Section 10(f) shall not apply following such submission and such payments and benefits will be treated in accordance with the results of such vote, except that any reduction in, or waiver above the safe harbor threshold of, such payments or benefits required by such vote will be applied without any application of discretion by the Executive and in the order prescribed in Section 10(f)(i).

  g.Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

  h.No Waiver. The Executive’s or the Company’s failure to insist upon strict compliance with any provision of this Agreement or the failure to assert any right the Executive or the Company may have hereunder, including, without limitation, the right of the Executive to terminate employment for Good Reason pursuant to Section 3(c) hereof, shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

  i.Entire Agreement. As of the Effective Date, this Agreement constitutes the final, complete and exclusive agreement between the Executive and the Company with respect to the subject matter hereof and replaces and supersedes any and all other agreements, offers or promises, whether oral or written, by any member of the Company and its subsidiaries or affiliates, or representative thereof.

  j.Amendment. No amendment or other modification of this Agreement shall be effective unless made in writing and signed by the parties hereto.

  k.Counterparts. This Agreement and any agreement referenced herein may be executed simultaneously in two or more counterparts, each of which shall be deemed an original but which together shall constitute one and the same instrument.

   

   

  [SIGNATURES APPEAR ON FOLLOWING PAGE]

   

  

   

  IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the authorization from the Board, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

   

  ENGAGESMART, LLC

   

  By:/s/ Robert Bennett	 

  Name: Robert Bennett

  Title: Chief Executive Officer

   

  “EXECUTIVE"

   

  /s/ Scott Semel

  Scott Semel

   

  

   

  EXHIBIT A

  GENERAL RELEASE

  For valuable consideration, the receipt and adequacy of which are hereby acknowledged, the undersigned does hereby release and forever discharge the “Releasees” hereunder, consisting of EngageSmart, Inc., and its partners, subsidiaries, associates, affiliates, successors, heirs, assigns, agents, directors, officers, employees, representatives, lawyers, insurers, and all persons acting by, through, under or in concert with them, or any of them, of and from any and all manner of action or actions, cause or causes of action, in law or in equity, suits, debts, liens, contracts, agreements, promises, liability, claims, demands, damages, losses, costs, attorneys’ fees or expenses, of any nature whatsoever, known or unknown, fixed or contingent (hereinafter called “Claims”), which the undersigned now has or may hereafter have against the Releasees, or any of them, by reason of any matter, cause, or thing whatsoever from the beginning of time to the date hereof. The Claims released herein include, without limiting the generality of the foregoing, any Claims in any way arising out of, based upon, or related to the employment or termination of employment of the undersigned by the Releasees, or any of them; any alleged breach of any express or implied contract of employment; any alleged torts or other alleged legal restrictions on Releasees’ right to terminate the employment of the undersigned; and any alleged violation of any federal, state or local statute or ordinance including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination In Employment Act, and the Americans With Disabilities Act. Notwithstanding the foregoing, this general release (the “Release”) shall not operate to release any rights or claims of the undersigned (i) to payments or benefits under either Section 4(a) or 4(b) of that certain Employment Agreement, effective as of [ ● ], between EngageSmart, LLC and the undersigned (the “Employment Agreement”), whichever is applicable to the payments and benefits provided in exchange for this Release, (ii) to payments or benefits under any equity award agreement between the undersigned and the Company, (iii) with respect to Section 2(b)(iv) of the Employment Agreement, (iv) to accrued or vested benefits the undersigned may have, if any, as of the date hereof under any applicable plan, policy, practice, program, contract or agreement with the Company, (v) to any Claims, including claims for indemnification and/or advancement of expenses arising under any indemnification agreement between the undersigned and the Company or under the bylaws, certificate of incorporation or other similar governing document of the Company, (vi) to any Claims which cannot be waived by an employee under applicable law or (vii) with respect to the undersigned’s right to communicate directly with, cooperate with, or provide information to, any federal, state or local government regulator.

  [IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT OF 1990, THE UNDERSIGNED IS HEREBY ADVISED AS FOLLOWS:

  (a)THE EXECUTIVE HAS THE RIGHT TO CONSULT WITH AN ATTORNEY BEFORE SIGNING THIS RELEASE;

  (b)THE EXECUTIVE HAS TWENTY-ONE (21) DAYS TO CONSIDER THIS RELEASE BEFORE SIGNING IT; AND

  (c)THE EXECUTIVE HAS SEVEN (7) DAYS AFTER SIGNING THIS RELEASE TO REVOKE THIS RELEASE, AND THIS RELEASE WILL BECOME EFFECTIVE UPON THE EXPIRATION OF THAT REVOCATION PERIOD.]

  The undersigned represents and warrants that there has been no assignment or other transfer of any interest in any Claim which the Executive may have against Releasees, or any of them, and the undersigned agrees to indemnify and hold Releasees, and each of them, harmless from any liability, Claims, demands, damages, costs, expenses and attorneys’ fees incurred by Releasees, or any of them, as the result of any such assignment or transfer or any rights or Claims under any such assignment or transfer. It is the intention of the parties that this indemnity does not require payment as a condition precedent to recovery by the Releasees against the undersigned under this indemnity.

   

  

   

  Notwithstanding anything herein, the undersigned acknowledges and agrees that, pursuant to 18 USC Section 1833(b), the undersigned will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

  The undersigned agrees that if the Executive hereafter commences any suit arising out of, based upon, or relating to any of the Claims released hereunder or in any manner asserts against Releasees, or any of them, any of the Claims released hereunder, then the undersigned agrees to pay to Releasees, and each of them, in addition to any other damages caused to Releasees thereby, all attorneys’ fees incurred by Releasees in defending or otherwise responding to said suit or Claim.

  The undersigned further understands and agrees that neither the payment of any sum of money nor the execution of this Release shall constitute or be construed as an admission of any liability whatsoever by the Releasees, or any of them, who have consistently taken the position that they have no liability whatsoever to the undersigned.

  IN WITNESS WHEREOF, the undersigned has executed this Release this ______ day of ___________,______.

   

   

  		
	Date:
	Name:Document

Certain portions of this document have been omitted pursuant to Item 601(b)(10) of Regulation S-K and, where applicable, have been marked with “[*]” to indicate where omissions have been made.  The marked information has been omitted because it is (i) not material and (ii) would likely cause competitive harm to the registrant if publicly disclosed.  

Exhibit 10.1

1351 Holiday Square Boulevard, Covington, LA 70433 USA

 Satellite Procurement Agreement 
Between Globalstar and Macdonald, Dettwiler and Associates Corporation

This Satellite Procurement Agreement GINC-220210 is entered into by and between Globalstar, Inc., a Delaware corporation with offices at 1351 Holiday Square Boulevard, Covington, LA 70433, U.S.A. and Macdonald, Dettwiler and Associates Corporation, a Canadian corporation with offices at 21025 Trans-Canada Highway, Ste-Anne-De-Bellevue, Quebec, Canada H9X 3R2. The effective date of this Agreement is February 16, 2022 (the “Effective Date”).

Except as otherwise provided, capitalized terms are defined in Attachment 1 (Definitions).

Purpose

This Agreement contains the terms and conditions under which Contractor will design, produce, test, deliver, and support Satellites (and related equipment and services) for use as part of the Globalstar System which consists of a constellation of low Earth orbit Satellites [*] (collectively, the “Project”). The Parties may sign additional agreements that reference this Agreement to set forth terms and conditions specific to particular Deliverables or Services, including one or more statements of work (“SOWs”). Any Deliverables or Services that are not subject to an independent written agreement signed by the Parties shall be governed by this Agreement.

Terms and Conditions

Article 1. Deliverables, Services, and Performance

(A)          Satellites. This Agreement applies to low Earth orbiting communications satellites for use as part of the Globalstar System (the “Satellites”). Specifications for the Satellites include those set forth in Exhibits A and B and the testing requirements set forth in Exhibit C. The Delivery dates for the Satellites are set forth in Article 4(B) (Delivery Schedule).

(i)            Initial Satellites. The first seventeen (17) Satellites ordered by Globalstar shall be referred to as the “Initial Satellites.” The first Satellite shall be a proto-flight model (“PFM”) to be tested at qualification levels and acceptance duration as a PFM.

(ii)           Option for Additional Satellites. [*] 

(B)          Additional Deliverables and Services. In addition to the Satellites, the scope of this Agreement includes the following Deliverables and Services: [*]

(C)          Performance Commitment. Contractor shall develop, produce, test, deliver, and support the Deliverables and Services in accordance with the terms and conditions set forth in this Agreement (including all applicable exhibits and SOWs) and the Specifications by the dates designated herein and therein.

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Article 2. Resources and Personnel

(A)          [*]

(B)          [*]

(C)          Collaboration and Access. Contractor shall collaborate with Globalstar on all aspects of the Deliverables and Services and provide Globalstar access to any applicable resources and Contractor Personnel, including: (i) allowing Globalstar Personnel to participate fully in all aspects of the Deliverables and Services (excluding Contractor’s internal meetings); (ii) sharing all relevant documentation and data; and (iii) facilitating co-location of Contractor and Globalstar Personnel. 

(D)          Contractor Personnel. Contractor shall provide all Contractor Personnel necessary to meet its obligations under this Agreement. Contractor Personnel involved in the development of the Deliverables and the performance of the Services shall have all requisite skills, experience, and expertise to perform assigned tasks. Subject to Globalstar’s approval, which shall not be unreasonably withheld nor delayed, Contractor will designate a program manager who shall be responsible for oversight and management of the Deliverables and Services, including responding to Globalstar’s questions and issues relating to the Deliverables and Services. Globalstar may require Contractor Personnel to sign a written agreement with Contractor (with a copy of such agreement to be provided to Globalstar within a reasonable timeframe upon request from Globalstar) acknowledging and agreeing to comply with certain security and confidentiality requirements. Contractor represents that it has written agreements in place with each Contractor Personnel sufficient to enable Contractor to comply with all provisions of this Agreement.

(E)           Key Personnel and Program Manager. Contractor shall identify a key person for each of the positions set forth in the table below that shall be dedicated to working on the Deliverables and Services until the successful completion of Contractor’s obligations under this Agreement (collectively the “Key Personnel”). Key Personnel may be removed from performance of Services under this Agreement only with written approval of Globalstar, or due to circumstances outside the control of Contractor, and shall be replaced by Contractor (with Globalstar’s written approval which shall not be unreasonably withheld nor delayed) with Personnel of substantially equal qualifications and ability. [*]

(F)           Satellite Specialists. Contractor shall assign sufficient satellite specialists (including payload, thermal, AOCS, power, data handling, mission analysis) to support Globalstar for the early operations of the Satellites (Satellite acquisition, stabilization, initialization and orbit raising).

(G)          Subcontractors. Contractor may subcontract the performance of any of its obligations under this Agreement to an entity (a “Subcontractor”) provided that Contractor: (i) first obtains Globalstar’s written consent with respect to any Major Subcontractor (Globalstar shall have 15 days to reject or accept Contractor’s request and if Globalstar does not respond within the specified timeframe, then the Parties shall meet as soon as possible to discuss and resolve Contractor’s request); (ii) [*]

(H)          Related Entities. Related Entities of Contractor may provide Deliverables and perform Services under this Agreement, provided that each such Related Entity has been approved by Globalstar in writing (such approval not to be unreasonably withheld nor delayed) and has executed an agreement that requires it to comply with the terms of this Agreement. Contractor is not relieved of any of its obligations under this Agreement by virtue of a Related Entity performing the obligations under this Agreement. Contractor hereby guarantees the performance of the terms and conditions of this Agreement by such Related Entities. Any breach of this Agreement by a Related Entity is deemed to be a breach of this Agreement by Contractor.

(I)            [*]

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Article 3. Inspection and Acceptance

(A)          Inspection and Acceptance. Deliverables and Services (including interim and final Milestone Events) will be subject to inspection, test, and acceptance or rejection by Globalstar. Globalstar may, in Globalstar’s sole discretion, reject any Deliverable or Service that does not meet the Specifications or otherwise comply with the terms of this Agreement. Upon rejection of a Deliverable or Service, Contractor shall: (i) as soon as reasonably practicable but no later than 30 days after rejection, provide a plan acceptable to Globalstar to re-deliver the Deliverables or re-perform the Services; (ii) promptly correct any failure to comply with the terms of this Agreement in accordance with the agreed plan; and (iii) re-deliver the rejected Deliverable or re-perform the rejected Service as soon as practicable. Globalstar will accept or reject the re-delivery or re-performance in accordance with the foregoing procedure, until Globalstar either accepts or cancels the Deliverable or Service. Globalstar shall provide written notice to Contractor following its final acceptance of Deliverables and Services (“Final Acceptance”).

(B)          Satellite Inspection and Acceptance. Without limiting Article 3(A) (Inspection and Acceptance), each Satellite shall be subject to the inspection and acceptance terms set forth in this Article 3(B) (Satellite Inspection and Acceptance) in accordance with the Delivery Schedule.

(i)            Pre-Shipment Review. Contractor shall complete a pre-shipment review of each Satellite, which covers a summary of all the testing completed on the Satellite, and resolution of all non-conformances (if any) encountered during the production and testing of the Satellite, as set forth in Exhibit A (“PSR”). Following a successfully completed PSR for a Satellite, Contractor shall sign and provide to Globalstar a PSR acceptance certificate. Globalstar may either: (a) countersign the PSR acceptance certificate, which shall deem the Satellite “Available for Shipment,” and provide directions for shipment to a Launch Site, storage, or other destination; or (b) identify to Contractor the grounds for objecting to the PSR. A “successfully completed PSR” of a Satellite shall mean that: (1) the PSR complies with the provisions of Exhibits A and B; (2) [*]

(ii)           Post-Shipment Verification Review. Contractor shall conduct an inspection of each Satellite after delivery to the Launch Site, including as set forth in Exhibit A, to verify that the Satellite has not been degraded or experienced any damage during transportation from Contractor’s facility (“Post-Shipment Verification Review”). Thereafter, Contractor shall perform tests in accordance with the program test plan and relevant portions of Exhibit C, in the presence of Globalstar.

(iii)          Flight Readiness Review. Contractor shall conduct a flight readiness review of each Satellite, which establishes that the Satellite has successfully survived the transportation from the manufacturer’s facilities to the launch base, and passed all the launch base testing as set forth in Exhibit A (“Flight Readiness Review”), whereupon Contractor shall either certify Satellite compliance or notify Globalstar of those items which fail to meet the requirements of Exhibits A, B, and C. Upon satisfactory completion by Contractor of all requirements of Exhibits A, B, and C, mutually acceptable to Globalstar and Contractor, Contractor shall provide written notice of the completion of Flight Readiness Review. Following such notification, Contractor shall be authorized to proceed to the Launch Readiness Review.

(iv)          Launch Readiness Review. Contractor shall conduct a launch readiness review for each Satellite, which establishes that the Satellite has been successfully integrated on to the selected Launch Vehicle and passed all the safety requirements dictated by the Launch Service Provider as set forth in Exhibit A (“Launch Readiness Review”). Contractor shall either certify Satellite compliance or notify Globalstar of those items which fail to meet the requirements of Exhibits A, B, and C. Upon satisfactory completion by Contractor of all requirements of Exhibits A, B, and C, mutually acceptable to Globalstar and Contractor, Contractor shall provide written notice of the completion of Launch Readiness Review of each Satellite. Upon such notification, a Satellite shall be ready for launch unless, at any time prior to Intentional Ignition, Contractor shall notify Globalstar if a Satellite is not ready for launch. Upon such notification and prior to launch, Contractor shall remedy such deficiencies or satisfactorily complete other conditions acceptable to Globalstar.

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

(v)           Satellite Final Acceptance. Final Acceptance of a Satellite not being delivered into storage shall occur upon Intentional Ignition, except that in case of terminated launch as set forth in Article 4(D) (Title and Risk of Loss) where Final Acceptance shall be deemed not to have occurred. Final Acceptance of a Satellite held in storage shall be made upon the earlier of: (a) twelve (12) months following the date that the Satellite was placed in storage; or (b) upon Intentional Ignition. 

(C)          DSS Inspection and Acceptance. Without limiting Article 3(A) (Inspection and Acceptance), each DSS shall be subject to the inspection and acceptance terms set forth in this Article 3(C) (DSS Inspection and Acceptance).

(i)            Factory Acceptance Test. Contractor shall conduct a factory acceptance test review for each DSS at Contractor’s facilities, including as set forth in Exhibit A (“Factory Acceptance Test Review”). Upon successful completion of the Factory Acceptance Test Review, Contractor shall provide such certification to Globalstar. If Globalstar objects, it shall provide reasons for such objection to Contractor. Upon such notification by Globalstar or if the DSS does not successfully complete the Factory Acceptance Test Review, Contractor shall remedy the deficiencies and satisfactorily complete other conditions mutually acceptable to Globalstar and Contractor after which Contractor shall proceed to ship each DSS to the designated DSS installation site. Globalstar shall accept or reject the Factory Acceptance Test Review, in writing within ten business days of receiving the certificate from Contractor.

(ii)           Simulator Completion Review. Contractor shall conduct a verification of DSS performance in standalone mode, including as set forth in Exhibit A (“Simulator Completion Review”). Upon successful completion of the Simulator Completion Review, Contractor shall provide such certification to Globalstar. Globalstar shall notify Contractor of its acceptance or rejection of the Simulator Completion Review within 15 business days of receiving the certificate from Contractor. If Globalstar objects, it shall provide reasons for such objection to Contractor. Upon such notification by Globalstar or if the DSS does not successfully complete the Simulator Completion Review, Contractor shall remedy the deficiencies and satisfactorily complete other conditions mutually acceptable to Globalstar. Contractor and Globalstar shall, after the successful completion of the Simulator Completion Review, certify in writing on a form mutually agreed, that Final Acceptance of each DSS has occurred.

Article 4. Delivery and Delivery Schedule

(A)          Delivery. Contractor shall deliver the Deliverables and Services on time and to the correct location. Time is of the essence as to the delivery of the Deliverables and Services. Contractor shall promptly notify Globalstar as soon as it becomes aware of any delay or potential delay in delivery of the Deliverables or Services. If Contractor is unable to provide the Deliverables or Services in accordance with the Delivery Schedule for any reason, then Contractor shall, without limiting any other remedy Globalstar may have: (i) promptly notify Globalstar, specify the reason for such failure, provide a plan to rectify the same, and use all reasonable efforts to ensure no further delay or impact on the Delivery Schedule; and (ii) use best efforts to assign such additional resources and Contractor Personnel required to resolve the issue and to meet the required future dates.

(B)          Delivery Schedule. A high-level Delivery Schedule for the Satellites is set forth in the table below. Additional details for the applicable Milestone Events for Initial Satellites are set forth in Exhibit F. Delivery of a Satellite shall be deemed to have occurred at a successfully completed Pre-Shipment Review. Delivery of a DSS shall be deemed to have occurred upon successful completion of the Simulator Completion Review. [*]

(C)          Location of Delivery.

(i)            Satellites. Each Satellite which is Available for Shipment shall be transported, along with all associated Ground Support Equipment, at Contractor’s risk and expense (Delivered Duty Paid (DDP), Incoterms 2020), to the Launch Site selected for the launch of the respective Satellite, unless Globalstar directs Contractor to deliver the Satellite to storage in accordance with Article 10 (Satellite Storage). Notwithstanding the forgoing, Globalstar may direct Contractor to deliver the Satellite to the airport nearest to the Launch Site into the custody of the Launch Services Provider. If a Satellite requires repair after delivery to the Launch Site, all transportation from the Launch Site to the repair facility and back shall be at the expense of Contractor, except if the damage occurred between the time the Satellite arrived at the airport until it was delivered to the Launch Site in which case Globalstar shall be responsible for the repair/replacement costs (including transportation costs) of the Satellite. Contractor shall 
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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

be responsible at its risk and expense for removing or disposing of all Ground Support Equipment and remaining Satellite propellant, if any, used on or brought to the Launch Site from the Launch Site after completion of launches. 

(ii)           DSSs and Satellite Flight Computer Software. The DSSs and the Satellite Flight Computer Software shall be transported via electronic transmission in a manner acceptable to Globalstar, at Contractor’s risk and expense (Delivered Duty Paid (DDP), Incoterms 2020).

(iii)          The Parties agree that the price set forth in this Agreement assumes that the Satellites, DSSs, Dispensers, SOCC and Satellite Flight Computer Software will be transported by Contractor to a location in the United States or Canada. If Globalstar instructs Contractor to deliver any of them to a location outside the United States or Canada, Globalstar will pay Contractor reasonably and accurately documented actual costs (excluding allocations and overhead) incurred by Contractor in connection with the delivery outside United States or Canada that are incremental beyond the cost of delivery to a location within the United States or Canada (including but not limited to incremental transport costs, incremental transit insurance, incremental employment taxes, and any incremental duties and taxes applied at the delivery location). 

(D)          Title and Risk of Loss. Subject to Article 5(C) (Title and Risk of Loss for Stored Satellites): (i) title to and risk of loss for a Satellite shall pass from Contractor to Globalstar upon Intentional Ignition, except as provided in Article 10(C) (Title and Risk of Loss for Stored Satellites); and (ii) title to and risk of loss for DSSs and Satellite Flight Computer Software shall pass from Contractor to Globalstar upon Final Acceptance thereof. Contractor hereby agrees that following Intentional Ignition, should the launch sequence be successfully terminated prior to lift-off of the Launch Vehicle, then at the subsequent time the launch pad is declared safe by the Launch Services Provider, title, care, custody, control, and risk of loss to each applicable Satellite shall revert to Contractor. Notwithstanding the foregoing, the Parties agree that Contractor shall not be responsible for delays due to damage to a Satellite caused solely by the Launch Service Provider after delivery to the Launch Service Provider, provided that Contractor uses all reasonable efforts to minimize any such delays.

(E)           No Encumbrances. Contractor shall ensure title to the Satellites, Satellite Flight Computer Software, and DSSs shall pass to Globalstar free and clear of any claims, liens, encumbrances, and security interests of any nature. Contractor shall not grant to third parties any lien, encumbrance, or security interest of any nature on the Satellites, propellant on board the Satellites, Satellite Flight Computer Software, and DSSs.

Article 5. Price

The price for the Deliverables and Services is set forth in the table below. The Parties agree that such amount compensates Contractor in full to provide the Deliverables and Services under this Agreement. Exhibit F sets forth a detailed payment plan for the Initial Satellites. The Parties will agree in good faith to a payment plan for the Additional Satellites upon delivery of any Option Notice. Such payment plan shall require payments upon Milestone Events such that the percentage of payments over time shall be no more accelerated for the Additional Satellites as compared to the Initial Satellites per Exhibit F.

[*]

Article 6. Delivery Delay 

(A)          Delivery Delays. Contractor understands if Contractor does not successfully complete PSR for the Satellites in accordance with the Delivery Schedule (each a “Delivery Delay”), Globalstar may incur additional costs and damages, which damages are likely to be significant and that on-time Delivery of the first eight Satellites is particularly time-critical. Therefore, if there is a Delivery Delay, Contractor shall pay Globalstar the amounts set forth in Article 6(B) (Liquidated Damages for Delivery Delays) to compensate Globalstar for damages caused by each Delivery Delay (the “Liquidated Damages”). The Parties agree that the Liquidated Damages are a reasonable estimate of the above-described costs and damages, which are difficult to ascertain, and are not intended to address any other costs or damages for delays that exceed the highest number of days in the applicable table below. Except with respect to Delivery Delays not exceeding 180 days (for the first eight Satellites) or 240 days (for Satellites after the first eight Satellites), the Parties do not intend for this Section to limit Globalstar’s ability to seek damages or any other available remedies under the Agreement or any other related agreement between the Parties.

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

(B)          Liquidated Damages for Delivery Delays. 

[*]

Article 7. Payment

(A)          Cancellation. Globalstar may cancel all or part of the Deliverables or Services at any time by providing Contractor written notice.

(i)            [*]

(ii)           Costs Following Cancellation. Globalstar will not be responsible for any costs in connection with cancelled Deliverables or Services except for payment of (or Contractor shall refund Globalstar if such amount is negative) an amount equal to: [*]

(B)          Contractor Taxes. Except as otherwise stated herein, Contractor will pay all applicable taxes related to any compensation received under this Agreement, including all taxes associated with the performance of the Services in each country which Services are performed (whether by Contractor or the Subcontractors) or in any country outside the United Sates where the Satellite is placed in storage as set forth in with Article 10 (Satellite Storage). Such taxes shall be paid by Contractor when they become due in compliance with the regulations in force at that time and will not be invoiced to Globalstar under this Agreement. Globalstar will not make deductions from its payments to Contractor for taxes, insurance, bonds, or any other subscription of any kind. Globalstar shall pay all applicable taxes and duties associated with the import of the Deliverables to the delivery location.

(i)            Withholding Taxes. Where any taxation authority imposes any income tax on the payment for Deliverables or related services by Globalstar to Contractor and requires Globalstar to withhold such tax (“Withholding Tax”), Globalstar may deduct such Withholding Tax from the payment to Contractor and remit such Withholding Tax to the relevant taxing authority on behalf of Contractor. The determination of the applicability of a Withholding Tax is at Globalstar’s sole discretion. In the event a reduced Withholding Tax rate may apply on payments to Contractor, Contractor shall provide to Globalstar as soon as practicable all documentation necessary to demonstrate that Contractor is qualified for the reduced rate of Withholding Tax. If the necessary documentation is not provided in a timely fashion before payment, the reduced Withholding Tax rate will not apply and any payments to Contractor shall be subject to the full rate of Withholding Tax. Upon reasonable request by Contractor, Globalstar shall provide Contractor with tax receipts or other documentation evidencing the payment of such Withholding Tax when available.

(ii)           Documentation. Upon request, Contractor shall provide Globalstar with a validly executed U.S. Internal Revenue Service form to establish its U.S. or non-U.S. status or any other necessary tax documentation. A non-U.S. Contractor shall note, on each invoice issued to Globalstar under this Agreement, the amount of Deliverables produced or related services performed by Contractor within the United States, if any.

(C)          Currency. All amounts payable will be specified and paid in United States Dollars.

(D)          Costs. Except as otherwise expressly agreed upon by the Parties in writing, Contractor is solely responsible for costs incurred under this Agreement.

(E)           Set-Off and Recoupment. [*]

(F)           Failure to Pay. In the event Globalstar fails to pay a successful completed Milestone Events for Deliverables or Services for which there has been a Final Acceptance in accordance with this Agreement within the payment terms stated herein, and such breach is not cured within 30 days of written notice from Contractor, then the Parties shall promptly escalate the matter to senior officers and such senior officers shall use reasonable best efforts to resolve the matter as promptly as practicable. If such matter has not been resolved and the amount remains unpaid 60 days following such escalation, then Contractor may, at its sole discretion, elect by written notice to submit a Contractor Stop Work Order under the terms and conditions of Article 9 (Stop Work) of this Agreement, with no resumption required until such breach is cured. Upon delivery of the payment, Contractor shall resume the performance of the suspended activities and the Parties shall agree on an equitable adjustment to the Delivery 
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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Schedule to capture the impact resulting from the suspension. Should the Contractor Stop Work Order issued by Contractor pursuant to this paragraph exceed a cumulative period of 120 days without payment on the amount at issue being delivered to Contractor, then Contractor shall be entitled, at its sole discretion and at any time until such breach is cured, to terminate the Agreement and such termination shall be in accordance with Article 22 (B) (Termination for Convenience) as if Globalstar issued the termination notice.

(G)          [*]

Article 8. Deviations, Waivers, and Change Orders

(A)          Deviations and Waivers. Contractor shall not modify any delivered Deliverables (including the Satellites) without Globalstar’s prior written consent. Contractor shall not take any action to conceal, obscure, or facilitate any non-compliance with this Agreement. Should Contractor desire to deviate from the Specifications or other requirements of a specific Deliverable or Service, Contractor may request in writing a deviation or waiver (each a “RFD/RFW”), as set forth in Exhibit A. Globalstar may grant or deny each RFD/RFW in its sole discretion.

(B)          [*]

Article 9 Stop Work

(A)          Globalstar Stop Work Orders. Globalstar may, at any time, by written notice to Contractor (the “Globalstar Stop Work Order”), direct Contractor to suspend its performance under this Agreement in whole or in part for a maximum cumulative duration of 18 months. Any Globalstar Stop Work Order shall specify the date of suspension, the estimated duration of the suspension, and whether it is in whole or in part. Upon receiving any Globalstar Stop Work Order, Contractor shall promptly suspend its performance under this Agreement to the extent specified, and during the period of such suspension, shall properly care for and protect all work in progress and materials, supplies, and equipment Contractor has on hand for the performance of its obligations under this Agreement to which such Globalstar Stop Work Order relates. Upon receipt of the Globalstar Stop Work Order, Contractor shall promptly identify to Globalstar portions of the work that Globalstar may wish to continue in order to reduce the impact of the Globalstar Stop Work Order and Globalstar shall advise Contractor accordingly.

(B)          Resumption of Work or Termination for Globalstar Stop Work Orders. Globalstar may, at any time during the effectivity of a Globalstar Stop Work Order, either: (i) direct Contractor to resume the performance of its obligations under this Agreement in whole or in part by written notice to Contractor, and Contractor shall resume the performance of its obligations under this Agreement, provided the Delivery Schedule and the price as set forth in Article 5 (Price) for the affected Deliverables and Services is adjusted to account for the impact of the Globalstar Stop Work Order; or (ii) cancel any Deliverables or Services pursuant to Article 7(A) (Cancellation). With regards to adjustments to price, the price will be adjusted in accordance with Article 11(L) (Additional Services).

(C)          Contractor Stop Work Orders. Contractor may, by written notice to Globalstar (the “Contractor Stop Work Order”), suspend its performance under this Agreement if Contractor has the right to do so under Article 7(C)(ii) (Deferred Payments) or Article 7(H) (Failure to Pay). Any Contractor Stop Work Order shall specify the date of suspension. Upon delivering any Contractor Stop Work Order, Contractor shall promptly suspend its performance under this Agreement, and during the period of such suspension shall properly care for and protect all work in progress and materials, supplies, and equipment Contractor has on hand for the performance of its obligations under this Agreement.

(D)          Resumption of Work or Termination for Contractor Stop Work Orders. Upon satisfaction of Globalstar’s payment obligations under Article 7(C)(ii) (Deferred Payments) or Article 7(H) (Failure to Pay), Contractor shall immediately resume the performance of its obligations under this Agreement and the Delivery Schedule and the price as set forth in Article 5 (Price) for the affected Deliverables and Services shall be adjusted to account for the impact of the Contractor Stop Work Order. With regards to adjustments to price, the price will be adjusted in accordance with Article 11(L) (Additional Services).

Article 10. Satellite Storage

[*]
7
CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Article 11. Options

[*]

Article 12. Globalstar’s Undertakings

(A)          Launch Services. Globalstar will procure the Launch Services to perform the launch mission in accordance with one or more Launch Services Agreements with one or more Launch Services Providers. This procurement includes dispensers unless Globalstar exercises the option per Article 11(D) (Dispensers). Contractor will provide two High-Fidelity Mass Simulators and support the qualification of the dispenser including fit checks, coupled loads analysis, and other items needed for successful launch and separation of the Satellites. Subject to government requirements, Globalstar will use reasonable efforts to arrange with the Launch Services Provider to provide Contractor and its Subcontractors access to the Launch Sites, utilities, and services at the Launch Sites necessary to permit Contractor to: (i) support the launch schedule; (ii) conduct testing; and (iii) provide the Launch Support Services.

(B)          Access. Subject to government requirements, Globalstar will use reasonable efforts to provide access to Contractor and its Subcontractors at each of Globalstar’s SOCC facilities and to in-orbit test equipment, on a timely basis, as necessary to permit Contractor to: (i) deliver, install, and test the DSSs; and (ii) perform the MOSS. 

(C)          Permits. Globalstar shall be responsible for obtaining all necessary approvals, authorizations and/or licenses to launch, test, control, and operate the Satellites.

(D)          Notice. Contractor shall promptly notify Globalstar of any failure by Globalstar to perform any of its obligations under this Agreement which may cause Contractor to be delayed or to incur additional costs.

Article 13. Confidentiality

[*]

Article 14. Information, Access, and Audits

(A)          Supply Information. Contractor shall provide to Globalstar regular and detailed reports and data to enable Globalstar to monitor the development, testing, and production of the Deliverables, including the status of all work in progress, production and testing data, and any failure analysis (“Supply Information”). Contractor shall ensure that the Supply Information provided to Globalstar is complete and accurate and Contractor shall not conceal or obscure any quality issues with the Deliverables or changes to the manufacturing processes. Contractor shall ensure each Subcontractor provides any applicable Supply Information directly to Globalstar.

(B)          Progress Meetings, Presentations and Facility Access. In addition to any other meetings called for under the provisions of this Agreement, Contractor shall provide the Personnel, facilities, materials, and support to conduct the following meetings and presentations with Globalstar: (i) informal program manager meetings; (ii) informal project level technical review meetings; and (iii) management level presentations as deemed appropriate by Contractor or Globalstar’s management and subject to reasonable prior notice by Globalstar. Whenever Globalstar Personnel accesses Contractor’s facilities pursuant to this Agreement, such access shall be conducted in a way to minimize, to the extent reasonably practical, interference with Contractor’s normal work, and Globalstar Personnel shall comply with all applicable Contractor security and health and safety policies while at Contractor’s facilities. Additional details regarding Globalstar Personnel’s access of Contractor’s facilities may be set forth in one or more SOWs.

[*]

(i)            Prior to each visit, the Parties shall work together in good faith to coordinate the time in which access to the facilities will be made available to the Globalstar Personnel. (Note, Contractor’s security policies require that all visitors be escorted while at Contractor facility, as such access shall be conditional on Contractor 
8
CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Personnel being present). Contractor acknowledges and agrees that Globalstar intends to have one or more members (such number to be reasonably determined by Globalstar) of Globalstar Personnel onsite at Contractor’s facilities on an ongoing basis, and Contractor shall make office space and equipment reasonably available to Globalstar to facilitate the ability for these Personnel to work onsite at Contractor’s facilities.

(C)          Access to Work in Progress. Subject to any applicable conditions set forth in this Agreement, Contractor shall provide Globalstar access to Contractor’s or its Major Subcontractor’s facilities, records, and Personnel involved in the performance of Contractor’s obligations under this Agreement, including all work in progress and completed Deliverables, Technical Data and information, test data, documentation, testing and hardware, as further set forth in Exhibit A. Contractor shall make Contractor Personnel who are knowledgeable of the relevant records, processes, conditions, and facilities available during to Globalstar and ensure that any information and documentation provided are complete and accurate.

[*]

Article 15. Intellectual Property Rights

[*]

Article 16. Licenses for Export and Launch

(A)          Export of Licensed Items. This Agreement is subject to all applicable United States laws and regulations relating to the export of Licensed Items and to all applicable laws and regulations of the country or countries to which such Licensed Items are exported or are sought to be exported. Contractor shall obtain all approvals and licenses required by the laws and regulations of the United States and any other country or countries to which the Licensed Items are exported or are sought to be exported. Contractor shall fully comply with all requirements of any technical assistance agreement related to the substance of this Agreement, whether included as an Appendix hereto or not.

(B)          Failures to Obtain Export Approvals. If a government refuses to grant a required approval or license to export the Licensed Items, or to launch a Satellite, or revokes or suspends an approval or license subsequent to its grant, or grants a license or approval subject to conditions, then: (i) this Agreement shall, nevertheless, remain in full force and effect unless terminated in accordance with this Agreement; or (ii) the Delivery Schedule shall be equitably adjusted if and to the extent such refusal, revocation, suspension, or grant subject to conditions results from factors beyond Contractor’s reasonable control, and in spite of Contractor’s use of best efforts. Such refusal, revocation, suspension, or conditional license shall not affect the obligations of the Parties under this Agreement that are not directly affected by the refusal, revocation, suspension, or conditional license.

(C)          Technical Assistance Agreement. Contractor and Globalstar shall cooperate in completing all technical assistance agreements which will allow Globalstar to be directly involved in matters related to some or all Licensed Items, including Launch Services.

Article 17. Representations and Warranties

(A)          General. Contractor represents and warrants that: (i) Contractor has full power, authority and legal right to enter into this Agreement, Contractor has the right to grant the rights and licenses contained in this Agreement, and Contractor’s performance of this Agreement will not cause Contractor to breach any other written agreements to which it is a party or is bound; (ii) prior to delivery Contractor has full and warrantable title to the Deliverables, which will be delivered free and clear of liens and encumbrances; (iii) all specifications, reports, and other documentation provided by Contractor are complete and accurate; (iv) the Deliverables will not be misbranded or falsely labeled, advertised, or invoiced; (v) the Deliverables and the performance of any obligations under this Agreement do not infringe any Intellectual Property Rights of a third party and no fees or royalties shall be due from Globalstar with respect to use of such Deliverables; (vi) the Deliverables are new and comprised of new materials when delivered, and do not include materials that have previously been delivered to third parties; (vii) the Deliverables are safe for any use that is consistent with the Specifications or that is reasonably foreseeable; (viii) the Deliverables conform to the Specifications and are free from any defects; (ix) Contractor has, with respect to any third-party technology used in the Deliverables, obtained all necessary rights from the third party to permit 
9
CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Globalstar to use such technology in accordance with this Agreement, without payment of any royalties or other payments to such third party or any other restrictions (except for the payment of any applicable fees specified in Article 11 (Options)); (x) the Software does not contain any viruses, malware, or other harmful code; (xi) the Deliverables will not contain any Open Source Software unless Globalstar has given its prior written authorization otherwise; (xii) the Deliverables shall not be subject to any third party encumbrances, royalties, restrictions, or requirements, including, any versions of the GPL or LGPL (GNU General Public License or Lesser General Public License), open source license, or any other third party license requirements; and (xiii) the Deliverables shall be free of any and all viruses, Trojan horses, trap doors, and other harmful or limiting code.

(B)          Satellite Conformance Warranty. Notwithstanding Article 17(A)(viii) (General), Contractor represents and warrants that each Satellite will be free from material defects in materials and workmanship and will conform to the Specifications, including the requirements in Exhibit B until Intentional Ignition or five years after the Satellite is placed in storage, whichever occurs first. Notwithstanding the preceding sentence, after Intentional Ignition and during the service life of the Satellite, Contractor shall perform Anomaly Support as specified in Exhibit A, and in the event of any material defect, shall perform any repairs that can be affected from the ground and otherwise use best efforts to address the defect from the ground. In the event that any issues are discovered on any Satellite being tested in the factory or in the event of any industry alerts on any relevant parts that are discovered after a satellite has shipped but prior to launch, Contractor shall promptly notify Globalstar and fix the affected parts on all unlaunched Satellites. For clarity, Contractor’s obligations under this Article 17(B) (Satellite Conformance Warranty) do not extend to defects in software resulting from modifications or patches made primarily by Globalstar or for damage to a Satellite caused primarily by the Launch Service Provider.

(C)          Satellite Flight Computer Software Warranty. Notwithstanding Article 17(A)(viii) (General), Contractor represents and warrants that the Satellite Flight Computer Software will be free from material defects in materials and workmanship and will conform to the Specifications, including the requirements in Exhibit B. This warranty shall start upon the date of Final Acceptance and shall continue for a period of five years. The scope of this warranty is as set forth in Exhibit A. For clarity, Contractor’s obligations under this Article 17(C) (Satellite Flight Computer Software Warranty) do not extend to defects in software resulting from modifications or patches made primarily by Globalstar.

(D)          SOCC Software Warranty. Notwithstanding Article 17(A)(viii) (General) and subject to Globalstar exercising the option under Article 11(G), Contractor represents and warrants that the SOCC software will be free from material defects in materials and workmanship and will conform to the Specifications, including the requirements in Exhibit I. This warranty shall start upon the date of Final Acceptance and shall continue for a period of five years. For clarity, Contractor’s obligations under this Article 17(D) (SOCC Software Warranty) do not extend to defects in software resulting from modifications or patches made by Globalstar or a third party on behalf of Globalstar.

(E)           DSS Warranty. Notwithstanding Article 17(A)(viii) (General), Contractor represents and warrants that the DSS will be free from material defects in materials and workmanship and will conform to the Specifications, including the requirements in Exhibit E. This warranty shall start upon the date of Final Acceptance thereof and shall continue for a period of five years. For clarity, Contractor’s obligations under this Article 17(E) (DSS Warranty) do not extend to defects in software resulting from modifications or patches made primarily by Globalstar or for damage to the DSS caused by Globalstar.

(F)           Duty to Correct for R&W. Contractor shall, at any time during the respective warranty periods expressed in Article 17(B) (Satellite Conformance Warranty), Article 17(C) (Satellite Flight Computer Software Warranty), and Article 17(E) (DSS Warranty) and irrespective of prior inspections or acceptance, at Globalstar’s option and after consultation with Contractor: (i) correct or replace the Deliverables; (ii) re-perform the Services; or (iii) if correction, replacement, or re-performance is impractical, refund Globalstar or credit Globalstar for any amounts paid by Globalstar for the defective or nonconforming Deliverables or Services, and relieve Globalstar of any obligation to pay any amounts incurred but not yet paid for the defective Deliverables or Services or any related Deliverables or Services directly impacted by such defective Deliverables or Services.

(G)          Regular and Diligent Review. In addition to the rights, duties, and obligations of Contractor under other provisions of this Agreement, Contractor shall regularly and diligently review and assess the generic design of each Satellite and related equipment, and the performance data available from any Satellite which has been launched or is to be launched and the performance of any equipment (other than Satellites) supplied, operated, or installed or to be 
10
CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

so supplied, operated or installed by Contractor up to the time of launch for a Satellite. If such review and assessment shows that a defect exists which affects adversely or is reasonably likely to affect adversely in any material respect the operation or performance of a Satellite or other equipment, Contractor shall notify Globalstar of any changes required thereto and, upon the written agreement of Globalstar, take prompt and appropriate measures at Contractor’s sole cost to correct a Satellite and other equipment before launch, so as to eliminate the defect therefrom.

(H)          Limited Warranties. Notwithstanding any other provisions of this Agreement to the contrary, the warranties provided in this Agreement are in lieu of all other warranties, express or implied, including fitness for particular purpose or merchantability, whether arising from law, custom, or conduct, and the rights and remedies provided herein are exclusive and in lieu of any other rights and remedies with respect to the failure by Contractor to furnish deliverable items free from any defect in materials, workmanship, or conformance with specification requirements.

Article 18. Indemnification

[*]

(A)          Duty to Correct for IPR Claims. If a third party claims that the Deliverables infringe any Intellectual Property Rights, Contractor shall, in addition to its other obligations under this Article 18 (Indemnification), promptly notify Globalstar in writing of such claims and, at its own expense, exercise one or more of the following remedies in coordination with Globalstar and at a time and in a manner that will avoid material risks of delay in meeting the applicable Delivery dates and any risk of interruption of Globalstar’s business: (i) obtain for Globalstar, from such third party, rights with respect to the Deliverables to enable Contractor to perform its obligations under this Agreement; (ii) modify the Deliverables so they are non-infringing and in compliance with this Agreement; (iii) replace the Deliverables with non-infringing versions that comply with the requirements of this Agreement; or (iv) if Contractor is unable to comply with items (i), (ii) and (iii), at Globalstar’s request, accept the cancellation of infringing Deliverables and refund any amounts paid.

Article 19. Insurance

(A)          Insurance and Loss Prevention. Contractor shall, at no cost to Globalstar, maintain the following minimum insurance in full force and effect throughout the term of this Agreement: (i) public liability or general liability insurance and products liability insurance (either in combined form or in separate policies), including coverage for bodily injury and property damage, products liability, claims by one insured against another insured, and Contractor’s defense and indemnity obligations under this Agreement, with coverage of not less than $[*] combined single limit per occurrence and $[*] annual aggregate; (ii) automobile liability insurance in compliance with all statutory requirements for all owned, non-owned, and hired motor vehicles used in the performance of Contractor’s obligations under this Agreement; (iii) workers’ compensation or employer’s liability insurance in compliance with all statutory regulations in any country, state, territory, or province where any of the Services or Deliverables are provided, manufactured, or delivered; (iv) electronics errors and omissions insurance of $[*] Contractor’s liability for claims arising out of design specifications provided by Contractor; and (v) insurance with sufficient limits to cover Contractor’s liability for risk of loss or damage to Globalstar property (including Deliverables and work in progress) while in Contractor’s care, custody, or control, including while in or about Contractor’s and its Subcontractors’ premises, while at other premises which may be used or operated by Contractor for construction or storage purposes, and while in transit, or while at the Launch Site until Intentional Ignition for a Satellite. The amount of insurance shall be sufficient to cover the full replacement value of all Deliverables and Services. Upon request by Globalstar, Contractor will provide any certificates of insurance to Globalstar. Additionally, Contractor will add Globalstar as an additional insured under the “all risks” insurance as far as Globalstar’s interests may appear.

(B)          Insurance Applicability. The insurance coverage that Contractor is obligated to maintain pursuant to Article 19(A) (Insurance and Loss Prevention) must include either: (i) an indemnity to principals clause and either a blanket interest provision or a separate note as to the interests of Globalstar, all officers and directors of Globalstar, and any other party which Globalstar identified prior to the Effective Date as principals for liabilities and damages for which Contractor is obligated to provide indemnity to such parties pursuant to this Agreement; or (ii) Globalstar and any other party which Globalstar may reasonably designate as additional insureds as identified by Globalstar 
11
CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

prior to the Effective Date or mutually agreed by the Parties for liabilities arising out of the acts or omissions of Contractor, its employees, and agents in the performance of this Agreement. Any property insurance that Contractor maintains in accordance with the terms of the Agreement must include Globalstar as loss payees, as their interests may appear. The insurance described in this Article 19 (Insurance) shall be primary to and without a right of contribution from any insurance maintained by or otherwise afforded to Globalstar. The insurance may be issued with deductibles, which are consistent with Contractor’s current insurance policies. The amount of any loss up to the value of the deductible level, or not otherwise covered by the insurance, shall be borne by Contractor.

(C)          Maintenance of Insurance. Within a reasonable time after the Effective Date and after replacement or renewal of coverage, Contractor shall deliver to Globalstar standard evidence of the maintenance of the coverage required by this Article 19 (Insurance). In the event of cancellation of any required coverage, Contractor shall promptly replace such coverage so that no lapse in insurance occurs. 

(D)          Certificate of Compliance. Contractor shall provide to Globalstar, at least 24 hours prior to Intentional Ignition, a written statement containing the following: (i) the Satellites to be launched have passed qualification and acceptance tests, including the Flight Readiness Review, under this Agreement, subject to written waivers that have been issued and approved by Globalstar; and (ii) any and all known defects or anomalies observed on: (a) already launched or on ground similar satellites manufactured by Contractor; or (b) on the Satellites to be launched during their development, which came to Contractor’s knowledge prior to the Flight Readiness Review, have been recorded and investigated and that all required remedy measures have been implemented in accordance with the applicable quality procedures as far as applicable and in so far as they would adversely affect the performance of the Satellites to be launched, such information provided to Globalstar.

Article 20. Force Majeure

[*]

Article 21. Limitation of Liability

[*]

Article 22. Termination

(A)          Termination for Default.

(i)            Globalstar Right to Terminate for Default. Globalstar may terminate this Agreement at any time, upon written notice, if: (a) Contractor materially breaches any of its obligations under this Agreement (except Delivery Delays which are subject to subsection (b) below) and Contractor either: (i) fails to provide a recovery plan for material breach (which includes a specific time line for cure of the material breach) within 30 days after notice which is accepted by Globalstar in writing; or (ii) fails to successfully complete such recovery plan and cure such material breach within the time line set forth in the recovery plan; (b) any Delivery Delay exceeds 180 days (for the first 8 Satellites) or 240 days (for Satellites 9+) or Contractor fails to satisfactorily complete the Services such that it can be reasonably anticipated by Globalstar that a Delivery Delay will exceed 180 days (for the first 8 Satellites) or 240 days (for Satellites 9+); (c) Contractor becomes insolvent, makes an assignment for the benefit of creditors, or files or is the subject of a petition in bankruptcy; or (d) except as expressly permitted under the Agreement, Contractor stops the performance of any material part of its obligations under this Agreement and fails to provide written assurances that it is unequivocally able to comply with the terms of this Agreement and resumes performance within seven days.

[*]

(B)          Termination for Convenience. Globalstar may, for its convenience, terminate this Agreement in whole or in part by giving ten days written notice to Contractor. If Globalstar terminates this Agreement, any pending Deliverables or Services shall be deemed cancelled under Article 7(A) (Cancellation).

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

(C)          Survival. Upon termination of this Agreement, the provisions in this Agreement, which by their nature, should remain in effect beyond termination of this Agreement will survive until fulfilled, including Article 10 (Satellite Storage), Article 13 (Confidentiality), Article 15 (Intellectual Property Rights), Article 17 (Representations and Warranties), Article 18 (Indemnification), this Article 22 (Termination), and Article 23 (Miscellaneous).

Article 23. Miscellaneous

(A)          General Terms and Conditions. This Contract is subject to the general terms and conditions set forth in Attachment 2.

(B)          Complete Agreement. The Parties agree that this Agreement and any documents referenced herein, including attachments, exhibits, amendments, SOWs, or other written agreements under this Satellite Procurement Agreement, constitute the complete and exclusive agreement between them superseding all contemporaneous and prior agreements (written and oral) and all other communications between them relating to the subject matter of this Agreement. Neither of the Parties is to be bound by any conditions, definitions, warranties, understandings, or representations with respect to the subject matter of this Agreement other than as expressly provided in this Agreement or documents referenced in this Agreement. No oral explanation or oral information by Contractor or Globalstar shall alter the meaning or interpretation of this Agreement. The terms and conditions of this Agreement will prevail notwithstanding any different, conflicting, or additional terms and conditions that may appear in any acknowledgment, or other writing not expressly incorporated into this Agreement.

(C)          Precedence. In case of any inconsistencies among the articles of this Agreement and any of the exhibits, the following order of precedence shall apply:

[*]

[*]

(D)          Amendment. Except as expressly provided for in this Agreement or any SOW for Globalstar to make updates, no amendment to this Agreement shall be binding unless in writing signed by a duly authorized representative of both Parties.

Execution

Acknowledged and agreed by their duly authorized representatives.

Globalstar, Inc.                                                                  Macdonald, Dettwiler and Associates Corporation

By:     /s/ Timothy Taylor                                                By:         /s/ Mike Greenley

Name:       Timothy Taylor                                              Name:    Mike Greenley

Title:      VP Finance, Business               Title:       CEO
Operations and Strategy

Date:     2/21/22                                                               Date:       February 16, 2022

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

Attachment 1. Definitions

“Additional Satellites” is defined in Article 1(A)(ii) (Option for Additional Satellites).

“AEO” is defined in Attachment 2.

“Agreement” shall mean this Satellite Procurement Agreement between Globalstar and Contractor, including all exhibits and appendices referenced herein, and all amendments that may be made hereto and thereto.

“Anomaly Support” shall mean all anomaly support Services necessary to support the operation and maintenance of each Satellite following their launch, including as set forth in Exhibit A.

“Available for Shipment” is defined in Article 3(B)(i) (Pre-Shipment Review).

[*]

“Bill of Materials” is defined in Article 2(I) (Bill of Materials).

“CDR” is defined in Article 11(D) (Dispensers).

“Change Order” is defined in Article 8(B) (Change Orders).

“Change of Control Transaction” is defined in Attachment 2.

“CIETAC” is defined in Attachment 2.

“Commercialize” means to use, make, reproduce, sublicense, display, perform, modify, create derivative works, import, sell, offer to sell, distribute, advertise, and otherwise commercialize or exploit., and to have any of the foregoing done on behalf of Globalstar or Contractor (as applicable).

“Contractor” means Macdonald, Dettwiler and Associates Corporation and its Related Entities.

“Contractor Stop Work Order” is defined in Article 9(C) (Contractor Stop Work Orders).

“Covered Claims” is defined in Article 18(A) (Covered Claims).

“CTPAT” is defined in Attachment 2.

“Deferred Payment” is defined in Article 7(C)(ii) (Deferred Payments).

“Deferred Payment Date” is defined in Article 7(C)(ii) (Deferred Payments).

“Deliverables” means the tangible results of services performed by Contractor to be delivered to Globalstar as set forth in this Agreement, including the Satellites, the DSSs, and any other items set forth in forth in Article 1 (Deliverables, Service, and Performance), and any other items not identified in this Agreement that are delivered by Contractor to Globalstar in connection with the Agreement to the extent that such items are not covered under the terms and conditions of a separate written agreement signed by the Parties.

“Delivery” shall mean the delivery of Deliverables as set forth in Article 4 (Delivery and Delivery Schedule).

“Delivery Delay” is defined in Article 6(A) (Delivery Delays).

“Delivery Schedule” shall mean the most current version of the project schedule provided by Globalstar for Delivery of the Deliverables and the performance of the Services, including as set forth in Article 4 (Delivery and Delivery Schedule).

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

“Documentation” shall mean all documentation reasonably requested by Globalstar related to the Deliverables or Services, including as set forth in Exhibit A, or that Contractor has or may in the future prepare for the purpose of enabling development, operation, and maintenance of the Deliverables, and any updates thereto.

“DSS” shall mean all dynamic satellite simulator software (in executable form and source code form) necessary to design, produce, test, and deliver the Deliverables and all updated versions, including as set forth in Exhibit E.

[*]

“Effective Date” is defined in the Preamble.

“Feedback” means any ideas, suggestions, or recommendations provided by Contractor to Globalstar regarding the Specifications or any Globalstar products or services. 

“Factory Acceptance Test Review” is defined in Article 3(C)(i) (Factory Acceptance Test).

“Final Acceptance” is defined in Article 3(A) (Inspection and Acceptance).

“Flight Readiness Review” is defined in Article 3(B)(iii) (Flight Readiness Review).

“Force Majeure Event” is defined in Article 20(A) (Force Majeure Events).

“Globalstar” means Globalstar, Inc. and its Related Entities.

“Globalstar Stop Work Order” is defined in Article 9(A) (Globalstar Stop Work Orders).

“Globalstar System” shall mean the system consisting of the Satellites, Ground Control Network, network control centers and user terminals for the provision of communications services.

“Ground Control Network” shall mean the items to be provided by Globalstar composed of the following: (i) Satellite Control Network; (ii) the gateway RF terminals; and (iii) the Globalstar data network.

“Ground Support Equipment” or “GSE” shall mean all equipment used or necessary to permit the transportation, handling, integration, and test of the Satellite during factory validation testing and pre-Launch operations.

“High-Fidelity Mass Simulator” shall mean a non-flight hardware simulator for the purposes of developing the appropriate launch vehicle dispenser or adaptor mechanical and electrical interfaces, which is a form and fit replica of the Satellite, including the electrical harness required to interface with the Launch Vehicle dispenser or adaptor, but does not include the functionality of the Satellite. 

“ICC Rules” is defined in Attachment 2.

“Initial Satellites” is defined in Article 1(A)(i) (Initial Satellites).

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“Intentional Ignition” shall mean the moment in time, as indicated in the automatic sequence control equipment, when the intentional ignition of the first stage engine occurs. This definition will be adjusted as necessary to be consistent with the Launch Services Agreement.

“Key Personnel” is defined in Article 2(E) (Key Personnel and Program Manager).

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

“Launch Readiness Review” is defined in Article 3(B)(iv) (Launch Readiness Review).

“Launch Services” shall mean the services provided by a Launch Services Provider pursuant to a Launch Services Agreement.
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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

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“Launch Support Services” shall mean all launch support Services necessary to support the launch of each Satellite, including as set forth in Exhibit A.

“Launch Vehicle” shall mean each vehicle provided by the Launch Services Providers on which one or more Satellite are to be launched. A list of possible Launch Vehicles is included in Exhibit A.

“Licensed Items” shall mean any Deliverables being furnished pursuant to, or to be utilized in connection with, this Agreement which require the approval, permission, or license from a government with respect to export control laws of such government.

“Liquidated Damages” is defined in Article 6(A) (Delivery Delays).

“Major Subcontractor” means: (a) a Subcontractor for specific subsystems or components as set forth on Exhibit G; or (b) any direct or lower-tier subcontractor whose total cost under the Project exceeds $10,000,000. 

“Milestone Events” shall mean those milestones which are eligible for payment as set forth in the column entitled “Milestone Events” in Exhibit F.

“Mission Operations Support Services” or “MOSS” shall mean all mission operations support Services necessary to support the launch, operation, and maintenance of each Satellite, including as set forth in Exhibit A.

[*]

“Open Source Software” means any software or derivative thereof that is subject to: (i) a requirement that it is to be distributed or made available in source code; (ii) a requirement that any patents related to the software are either licensed to or may not be asserted against recipients of the software; (iii) a requirement to include licensor attribution; or (iv) any license meeting the Open Source Definition (as promulgated by the Open Source Initiative), the Free Software Definition (as promulgated by the Free Software Foundation, or any substantially similar license, including the GNU General Public License (GPL), Lesser/Library GPL (LGPL), the Mozilla Public License (MPL), the Apache License, the BSD license, or the MIT license.

“Option Notice” is defined in Article 1(A)(ii) (Option for Additional Satellites).

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

“PDR” is defined in Article 4(B) (Delivery Schedule).

“Personnel” of an entity means its respective officers, directors, agents, consultants, contractors, and employees of it or its affiliates.

“PFM” is defined in Article 1(A)(i) (Initial Satellites).

“Post-Shipment Verification Review” is defined in Article 3(B)(ii) (Post-Shipment Verification Review).

“Project” is defined in the Purpose.

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“Project IPR” is defined in Article 15(B) (Project IPR).

“PSR” is defined in Article 3(B)(i) (Pre-Shipment Review).
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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

“Related Entity” means any corporation, partnership, limited liability company, joint venture, association, trust, unincorporated organization, or other business entity that controls, is controlled by, or is under common control with an entity, where “control” means that the entity possesses, directly or indirectly, the power to direct or cause the direction of the management policies of the other entity, whether through ownership of voting securities, an interest in registered capital, by contract, or otherwise.

[*]

“RFD/RFW” is defined in Article 8(A) (Deviations and Waivers).

“Satellites” is defined in Article 1(A) (Satellites).

“Satellite Control Network” shall mean the items to be provided by Globalstar composed of the following: (i) Satellite Operations Control Centers (SOCCs) (Main, Development and Back Up SOCCs) (or as provided by Contractor in accordance with Article 11(G) (Satellite Operations Control Center (SOCC)); (ii) the Telemetry Command Units (TCUs); and (iii) the In Orbit Test Equipment (MCE and CMA), as set forth in Exhibit A.

“Satellite Flight Computer Software” shall mean the software (in executable form and source code form) that resides within the on-board computer and controls the distribution of commands and telemetry throughout the Satellites, including updated versions, to be delivered as set forth in Exhibit A.

“Services” shall mean the services to be performed by Contractor as set forth in this Agreement, including the design, development, construction, manufacturing, labor, services, testing, and other services of Contractor necessary to design, produce, test, and deliver the Deliverables in accordance with this Agreement, and any other services Contractor provides to Globalstar that are not covered under the terms and conditions of a separate written agreement signed by the Parties.

“Simulator Completion Review” is defined in Article 3(C)(ii) (Simulator Completion Review).

“Software” means all software related to the development, testing, use, and maintenance of the Deliverables, including drivers, firmware, test software, tools, development kits, and application programming interfaces.

“SOCC” is defined in Article 11(G) (Satellite Operations Control Center).

“SOW” is defined in the Purpose.

“Specifications” means the most current version of all specifications and requirements applicable to any Deliverable (including Satellites and DSSs), Service, or Software that Globalstar may provide from time to time (including the specifications and requirements set forth in the documents referenced in this Agreement (e.g., Exhibit A), the Delivery Schedule, and the Standards) and drawings or other descriptions provided by Contractor and approved in writing by Globalstar.

“Standards” shall mean the applicable version of any industry standard, regulatory requirement, or certification requirement generally followed in the provision of Deliverables or Services of the type provided under this Agreement, for the United States, European Union, and any other major market worldwide.

“Storage NTE” is defined in Article 10(B) (Price of Storage Services).

“Storage Plan” shall mean a plan for the storage of one or more Satellite at a site designated in the plan, as set forth in Exhibit A.

“Storage Services” is defined in Article 10(A) (Storage Services).

“Subcontractor” is defined in Article 2(G) (Subcontractors).

“Supply Information” is defined in Article 14(A) (Supply Information).

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

“System Integration and Testing Support” shall mean all system integration and testing support necessary to integrate the Satellites and other Deliverables into the overall Globalstar System, and the calibration and testing of the system, to ensure that the Satellites and other Deliverables operate within specification as part of the overall Globalstar System and interoperate successfully with other system elements, as set forth in Exhibit A and Exhibit I.

“Taxes” shall mean all present and future taxes, levies, and duties whatsoever, including custom duties, VAT, import taxes, sales taxes or charges, taxes, fees or duties of similar nature whatsoever.

“Technical Data” shall mean information which is required for the design, development, production, manufacture, assembly, operation, repair, testing, maintenance or modification of the Satellite and the DSS, including documentation.

“US Bankruptcy Code” is defined in Attachment 2.

“Withholding Tax” is defined in Article 7(D)(i) (Withholding Taxes).

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

1351 Holiday Square Boulevard, Covington, LA 70433 USA

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CONTRACT NUMBER GINC-220210

Globalstar Proprietary and Confidential

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