Amendment No. 9 To QUALCOMM Globalstar Satellite Products Supply Agreement Agreement No. 04-QC/NOG-PRODSUP-001 (NOG-C-04-0137)
Exhibit
10.5
CONFIDENTIAL
TREATMENT
Portions
of this exhibit have been omitted pursuant to a request for confidential
treatment filed with the Securities and Exchange Commission pursuant to
Rule 24b-2 under the Securities Exchange Act of 1934. Such Portions
are marked “[*]” in this document; they have been filed separately with the
Commission.
Amendment
No. 9
To
Agreement
No. 04-QC/NOG-PRODSUP-001
(NOG-C-04-0137)
This
Amendment No. 9 (“Amendment”) is effective as of February 24, 2010
(“Amendment Effective Date”) by and between XXXXXXXX Xxxxxxxxxxxx, a
Delaware corporation (“Qualcomm”) and Globalstar, Inc., a Delaware
corporation (“Buyer”), and Globalstar Canada Satellite
Company (“GCSC”) a Nova Scotia Corporation and wholly owned subsidiary of
Buyer, with respect to the below stated facts.
This
Amendment must be signed by February 24, 2010; otherwise, this Amendment offer
is no longer valid.
RECITALS
A. Qualcomm
and Buyer executed the Qualcomm Globalstar Satellite Products Supply Agreement
No. 04-QC/NOG-PRODSUP-001 dated April 13, 2004, as amended (the “Agreement”),
pursuant to which Qualcomm agreed to sell to Buyer, and Buyer agreed to
purchase, Globalstar products from time to time for resale to customers under
such Supply Terms and Conditions.
B.
Qualcomm and Buyer executed Amendment No. 1 dated May 25, 2005 to the
Agreement, pursuant to which Qualcomm agreed to modify the Globalstar GSP-1600
Tri-Mode Satellite Phone to replace the LCD (“GSP-1600”) and make available a
limited quantity of GSP-1600s and other Globalstar products to Globalstar for
resale to its customers.
C.
Qualcomm and Buyer executed Amendment No. 2 dated May 25, 2005 to the
Agreement, pursuant to which QUALCOMM agreed to manufacture, sell and deliver
New Products to Globalstar for resale to its customers.
D.
Qualcomm and Buyer executed Amendment No. 3 dated September 30, 2005 to the
Agreement pursuant to which Qualcomm agreed to sell to Buyer additional
GSP-1600s and other Globalstar products for resale to its
customers.
E. Qualcomm
and Buyer executed Amendment No. 4 dated August 15, 2006 pursuant to which Buyer
agreed to undertake to performance of the final packaging of the GCK-1700 Car
Kit and SDVM, including procurement of such packaging materials and antenna(s),
and accordingly, (i) Buyer will no longer be required to deliver production
GCK-1700 Car Kit and/or SDVM Antennas and applicable documentation to Qualcomm
as set forth in Section 27 of the Agreement, and (ii) QUALCOMM will deliver
GCK-1700 Car Kits and SDVMs, without antennas, as provided for in Section 26 of
the Agreement.
F.
Qualcomm, Buyer and GCSC executed the Assignment and Performance Guarantee
Agreement No. 06-QC/Globalstar-AA-001 GINC-C-06-0306 dated October 11, 2006 by
which Globalstar assigned its rights, title and interests in and to Amendment 2
to the Agreement, including all rights and obligations arising under Purchase
Orders issued pursuant to Amendment 2 to GCSC.
G.
Qualcomm, Buyer and GCSC executed Amendment No. 5, pursuant to which the parties
agreed to further extend the Term and revise the Delivery Schedule and pricing
terms for New Products and other terms and set forth therein.
H.
Qualcomm, Buyer and GCSC executed Amendment No. 6 pursuant to which the parties
agreed to amend the Agreement to provide for indemnification for Qualcomm as it
relates to the use of any non-conforming battery with the GSP-1700
handset.
I.
Qualcomm, Buyer and GCSC executed Amendment No. 7 pursuant to which the parties
revised the delivery schedule of New Products to reflect a suspension in
deliveries for a period of eighteen (18) months with deliveries scheduled to
resume in April, 2010.
J.
Qualcomm, Buyer and GCSC executed Amendment No. 8 pursuant to which the parties
revised the delivery schedule of New Products to reflect a suspension in
deliveries for an additional period of six (6) months with deliveries scheduled
to resume in October, 2010.
K. Buyer
and Qualcomm have agreed subject to certain terms and conditions set forth
herein, to again extend the term and to revise the delivery schedule of New
Products to reflect an extension of the suspension in deliveries for an additional eight (8) months
with deliveries scheduled to resume in June 2011 as set forth in the Fifth
Revised Delivery Schedule, attached hereto as Exhibit A. Buyer and Qualcomm have
further agreed that the provisions concerning resumption of the New Products
Delivery Schedule and associated pricing conditions for resumption are also
modified accordingly as set forth herein.
By this
Amendment, Qualcomm, Buyer and GCSC agree to further amend the Agreement as set
forth below.
AGREEMENT
NOW,
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, and intending to be legally bound hereby, the parties hereby modify
the Agreement as set forth herein.
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1.
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Xxxxxxx
00, Xxxx Xxxxxxxxx, is hereby modified as
follows:
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“30. Term
Extension. The Term of the Agreement is hereby extended
thirteen (13) additional months from February 28, 2012 to March
28, 2013, unless otherwise terminated as provided for in this Amendment
No. 9 and the Agreement.”
2. Section
32. Special
Provisions for Suspended New Products Delivery Schedule is hereby
modified as follows:
“32.1
Suspended
New Products Delivery Schedule. As of the Amendment Effective Date, the
delivery schedule as set forth in Attachment 1(a) to Amendment No. 2, as amended
in Amendments No. 5, 7, and 8 is further amended to reflect a suspension of
deliveries of an additional
eight (8) months, for a total of a thirty two (32) month suspension for
delivery for New Products as reflected in the Exhibit A hereto (“Fifth
Revised Delivery Schedule”).
32.2
Resumption
of New Products Delivery Schedule. As a condition of further suspending
deliveries as set forth herein, Buyer must now provide written notification to
Qualcomm no later
than September 1, 2010 (in lieu now of January 29, 2010) of either (i) its desire to
resume taking deliveries of and making payment for the New Products as set forth
in the Fifth
Revised Delivery Schedule or (ii) provide notice of discontinuation as
set forth in Section 32.3 below. All units of the remaining New
Products must be included in Buyer’s selection of (i).
32.3 Fifth
Revised Delivery Schedule Pricing. Both parties acknowledge
and agree that due to the delivery suspension, the pricing of the New Products
may increase due to parts obsolescence, supplier issues and other manufacturing
costs associated with re-start-up costs. If Qualcomm determines that the costs
to re-start and manufacture the New Products will increase, Buyer agrees to pay
an increase in the current GSP-1700 price of no more than [*] per GSP-1700 for
the remaining delivery quantity. Qualcomm’s proposal will separately price, for
Globalstar’s acceptance and funding, an engineering effort to redesign the board
to replace the end of life flash, and any other effort required to replace other
end of life components.
Qualcomm
will provide written notice to Buyer of any increase in price for the GSP-1700
by
August 16, 2010 (in lieu now of January 14, 2010). If the price
increase is greater than [*] per GSP-1700, Buyer can either (A) accept the
increase in price (“Option A”), or (B) terminate the Agreement for
discontinuance and must (i) purchase all available Finished Goods for all New
Products in inventory at the current price (“Finished Goods” is defined as all
New Products in inventory at the -10 level or above), and (ii) purchase all
components or any other parts on order and purchased by Qualcomm in support of
the current delivery schedule at Qualcomm’s cost; and (iii) negotiate in good
faith a license and license fee and ASIC Supply Agreement from Qualcomm to allow
a third party manufacturer to manufacture the New Products on behalf of Buyer,
all as set forth in Section 32.4.2 (collectively “Option B”). Buyer’s
selection of Option A includes Buyer’s acceptance to fund any engineering
efforts required for to redesign the board to replace the end of life flash and
such efforts for other end of life components. Buyer must provide
written notice of either Option A or Option B no later
than September 1, 2010 (in lieu now
of January 29, 2010) otherwise Qualcomm shall have the right
to terminate the Agreement as set forth in Section 32.4.1 below.
32.4
Additional
Termination Provisions
32.4.1 By
Qualcomm. In addition to the termination provisions and rights set
forth in the Agreement, Buyer’s failure to confirm in writing its
agreement to either (i) resume taking all outstanding deliveries of the New
Products as set forth in the Fifth
Revised Delivery Schedule, (ii) timely selection of Option A, or Option
B, or (iii) Buyer’s failure to comply with the terms of this
Agreement, including (a) failure to make timely payments for all outstanding
invoices, (b) failure to make timely payments for all New Products and parts or
components purchased by Qualcomm in support of the current delivery schedule in
inventory or committed to by Qualcomm with suppliers that cannot be canceled at
the time of termination, or (c), failure to enter into a License Agreement for a
third party manufacturer within ninety (90) days of Agreement
termination, shall constitute a material default under this Agreement and
Qualcomm shall deliver written notice of its intent to terminate for breach. If
a material default is not cured within thirty (30) calendar days after the date
of notice, or if Qualcomm, in its sole discretion, determines it cannot support
resumption of the delivery schedule due to resource availability, costs or any
other business reason, Qualcomm shall have the right to (1) terminate the
Agreement, and (2) cancel any undelivered portions of the Purchase Order for New
Products, subject to all termination rights set forth in the Agreement,
including but not limited to Termination Charges defined in Section 1, and
Sections 3.3 and 16 of the Supply Terms and other termination fees set forth in
Section 20.1, as amended in Amendment No. 5 and (3) immediately terminate the
Master Ordering Agreement, including all Task Orders for Hotline/Help Desk
Support unless earlier terminated by the parties, upon written notice to
Buyer.
32.4.2 Discontinuation
By Buyer. In the event Qualcomm determines that the price of
the GSP-1700 will increase more than [*] per phone as a result of the cost
analysis by Qualcomm, Buyer may discontinue this Agreement subject to the
following conditions:
1. Buyer
agrees to take delivery within forty five (45) days of termination, and to pay
within ninety (90) days of termination the following:
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·
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All
available Finished Goods for all New Products in inventory at the time of
termination at the New Product current
price.
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·
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All
components and parts purchased by Qualcomm in support of the current
delivery schedule that are in inventory or committed to with a supplier
that can not be canceled, at Qualcomm’s cost, plus any cancellation or
other fees, including restocking fees imposed by suppliers due as a result
of termination.
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2. Buyer
and Qualcomm will negotiate in good faith a technology license and an ASIC
Supply Agreement to enable a third-party manufacturer to manufacture and sell
phones on behalf of Buyer. The License must be executed within ninety
(90) days of the date of termination.
3. Attachment.
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A.
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Attachment. Attachment
No. 1(a) to Amendment No. 2, Revised Delivery Schedule for New Products as
amended in Amendments No. 5, 7 and 8 is further amended to reflect the
suspension of all New Product deliveries for
a total of thirty two (32) months, beginning with the October 2008
delivery. Deliveries of New Products will resume June
2011 as provided for in this Exhibit A, Fifth
Revised Delivery Schedule.
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4. Exhibit
A, Qualcomm Supply Terms and
Conditions is hereby revised as follows:
Section
9.7, Payment
Offset remains unchanged and is as follows:
“9.7 Payment
Offset. Any payments made by Buyer and/or GCSC to Qualcomm,
pre-paid or otherwise, may be used by Qualcomm to offset any outstanding amounts
owed by Buyer and/or GCSC to Qualcomm, under this Agreement or any other
agreement. Notwithstanding Qualcomm’s right to offset in this section, Buyer
and/or GCSC must continue to make all payments in a timely manner as required
under this agreement. ”
EFFECTIVENESS. Except
as modified by this Amendment No.9 as of the Amendment Effective Date, the
Agreement shall remain in full force and effect. No modification,
amendment or other change may be made to this Amendment No. 9 or any part
thereof unless reduced to writing and executed by authorized representatives of
both parties.
IN
WITNESS THEREOF, the parties have executed this Amendment No. 9 as of the
Amendment Effective Date.
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XXXXXXXX
Xxxxxxxxxxxx
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By:
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/s/ Xxxxx X. Xxxxxx
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By:
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/s/ Xxxx Xxxxx
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Name:
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Xxxxx X. Xxxxxx
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Name:
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Xxxx Xxxxx
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Title:
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Sr. Vice President, Finance
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Title:
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CFO
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Qualcomm Enterprise
Services
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Globalstar
Canada Satellite Company
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By:
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/s/ Xxxx Xxxxx
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Name:
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Xxxx Xxxxx
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Title:
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Treasurer
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EXHIBIT
A
Fifth
Revised Delivery Schedule for New Products
October
2008 – February 2013
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Schedule Ship Date
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GSP-1700
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GIK-1700
Car Kit
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GSP-1720
SDVM
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Car Power
Adapter
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[*]
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