CONFIDENTIAL TREATMENT
Exhibit
10.2
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. 2
TO
BETWEEN
AND
XXXXXX
NETWORK SYSTEMS, LLC
FOR
RADIO
ACCESS NETWORK (RAN)
AND
USER TERMINAL SUBSYSTEM
XXXXXX
AND GLOBALSTAR CONFIDENTIAL AND PROPRIETARY
This
Amendment No. 2 ("Amendment") is entered into effective as of August 28, 2009
("Effective Date"), by and between Xxxxxx Network Systems, LLC, a limited
liability company organized under the laws of Delaware (hereinafter referred to
as the "Contractor") with its principal place of business at 00000 Xxxxxxxxxxx
Xxxx Xxxxxxxxxx, Xxxxxxxx 00000 XXX, and Globalstar, Inc., a company
incorporated under the laws of Delaware with its principal place of business at
000 Xxxxx Xxxxxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxxx 00000 (hereinafter referred
to as "Globalstar" or "Customer"). As used herein, Contractor and
Globalstar may be referred to individually as a "Party" and collectively as the
"Parties".
WHEREAS,
the Parties entered into Contract No. GINC-C-08-0390 for the delivery of the
Radio Access Network (RAN) and the User Terminal Subsystem (UTS)
("Contract");
WHEREAS,
the Parties entered into a Letter Agreement, dated September 22, 2008, for the
deferral of payment of certain Payment Milestones ("Deferred Payments") under
the Contract, subject to interest;
WHEREAS,
the Parties entered into Amendment No. 1, dated June 16, 2009, to the Contract
for the payment of the Deferred Payments with interest, the PDR Payment
Milestone and advance payments in the aggregate amount of $10,000,000 ("ADVANCE
PAYMENT");
WHEREAS,
Globalstar now seeks to extend the schedule of the RAN and UTS program by
fifteen (15) months and to revise certain payment milestones and program
milestones to reflect the revised program timeline;
NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, and intending to be legally bound hereby, the Parties agree to
amend the Contract as follows:
1. Exhibit
C, Pricing Schedule and Payment Plan (Revision B), dated June 16, 2009, shall be
deleted and replaced in its entirety by a new Exhibit C, Pricing Schedule and
Payment Plan (Revision C), dated August 28, 2009.
2. Payment
Milestones #6-13 shall be invoiced on the first day of the month of the
applicable Invoice Date.
3. The
program milestone schedule will be aligned with the payment milestone schedule,
and the Parties shall cooperate and work together in good faith to revise the
program milestones set forth in Tables 3-3 and 3-4 of Exhibit A, Statement of
Work (Revision A), dated May 1, 2008 ("Statement of Work")
accordingly. Within thirty (30) days of the Effective Date of this
Amendment, the Parties shall mutually agree on a revised program milestone
schedule and shall amend the Statement of Work to incorporate the revised agreed
program milestone schedule.
4. This
Amendment shall be governed by and interpreted according to the laws of the
state of New York.
5. This
Amendment may be signed in counterparts and each original counterpart shall be
deemed binding on each Party collectively and individually.
6. Except
as amended herein, all terms and conditions of the Contract shall remain in full
force and effect.
XXXXXX
AND GLOBALSTAR CONFIDENTIAL AND PROPRIETARY
IN WITNESS WHEREOF, the
Parties hereto have signed this Amendment in duplicate.
| GLOBALSTAR, INC. | XXXXXX NETWORK SYSTEMS, LLC | ||||
| BY: |
/s/ Xxxx Xxxxxx
|
BY: |
/s/ Xxxx Xxxxxxx
|
||
| Name: |
Xxxx
Xxxxxx
|
Name: |
Xxxx
Xxxxxxx
|
||
| Title: |
Contracts
Manager
|
Title: |
Senior
Counsel
|
||
| Date: |
August
28, 2009
|
Date: |
August
28, 2009
|
||
|
|
|
H36750
RADIO
ACCESS NETWORK (RAN)
AND
USER TERMINAL SUBSYSTEM (UTS)
EXHIBIT
C: PRICING SCHEDULE AND PAYMENT PLAN
Revision
C
August
28, 2009
REVISION
HISTORY
|
Revision
|
Issue
Date
|
Scope
|
|
A
|
05/1/2008
|
Contract
version
|
|
B
|
06/16/2009
|
Contract
amendment
|
|
C
|
08/28/2009
|
Contract
amendment
|
TABLE
OF CONTENTS
| SECTION | PAGE |
|
1.0 PRICE SCHEDULE
|
1-5
|
| 1.1 BASELINE RAN AND UTS | 1-5 |
| 1.2 OPTIONS | 1-6 |
| 1.3 TIME AND MATERIAL (T&M) RATE | 1-7 |
| 2.0 PAYMENT MILESTONES AND PLAN | 1-8 |
1.0 Price
schedule
1.1 BASELINE
RAN AND UTS
|
Line
Item
|
Supplies/Services
|
Price
(USD)
|
||||
|
NON-RECURRING
ENGINEERING (NRE)
|
$ | [ | *] | |||
| 1 |
[*]
|
|||||
|
|
|
$ | [ | *] | ||
|
2
|
Documentation
and Program Reviews
|
Included
|
||||
|
3
|
Operations
and Maintenance Training
|
$ | [ | *] | ||
|
4
|
RAN
and UTS NRE Additions
|
$ | [ | *] | ||
|
[*]
|
$ | [ | *] | |||
|
[*]
|
Included
|
|||||
|
[*]
|
Included
|
|||||
|
[*]
|
Included
|
|||||
|
[*]
|
$ | [ | *], | |||
|
[*]
|
Included
|
|||||
|
[*]
|
$ | [ | *] | |||
|
[*]
|
$ | [ | *] | |||
|
[*]
|
included
|
|||||
|
[*]
|
Included
|
|||||
|
RECURRING
|
$ | [ | *] | |||
|
5
|
Build,
delivery, installation, performance verification and testing of 9 RANs
(including first article)
|
$ | [ | *] | ||
| [*] | ||||||
|
Design,
build, delivery, installation, performance verification and testing of 9
RANs
|
$ | [ | *] | |||
|
Credit
for Customer performing Installation and Commissioning for RAN# 6, #7, #8
& #9 (Contractor to provide on-site supervision only for installation,
performance verification and testing)
|
$ | [ | *] | |||
|
6
|
Critical Spare Parts- located at
each RAN site
|
included
|
||||
|
7
|
Critical
Spare Parts- located at Customer Depot
|
$ | [ | *] | ||
|
8
|
Manufacture
and Deliver 250,000 Satellite Air Interface Chips
Includes
3rd parts software, Delivery EA-Works Foundry, Delivery as per agreed upon
delivery schedule
|
$ | [ | *] | ||
|
9
|
Expansion
of capacity-
from 120 VEC/480
Kbps to 200 VEC/800 Kbps in the
same FDM channel;
for all 9 RANs
|
$ | [ | *] | ||
|
Expansion
of capacity from 120 VEL480 Kbps. to 200 VEC:800 Kbps in the same FDM channel; Price per
RAN
|
$ | [ | *] | |||
|
TOTAL
CONTRACT PRICE
|
$ | [ | *] | |||
1.2 OPTIONS
|
OPTIONS
|
||||||
|
Line Item
|
Supplies/Services
|
Price
(USD)
|
||||
|
1
|
Unit
price for Additional RANs up to Quantity 25 (incl. 12 mo h/w
Warranty)
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
2
|
Animal
Extended Software Maintenance & Support (second year onwards) Includes
RAN and RTDM Software
Includes
1100 hours of engineering support (Ex-Works) per year Additional
engineering support available at T&M rates
Start
date as defined in Exhibit A, Independent of number of RANs SOW as per
Exhibit 0 (on-site support subject to T&M rates)
Total
Price per year
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
3
|
Annual
Extended Hardware Warranty-per
RAN Start date as defined in Exhibit A.
SOW
as per Exhibit 0 (on-site support excluded)
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
4
|
Bridge
Extended Hardware Warranty-per
RAN per month
Available
only in the first partial year of extended warranty-
period of each RAN Start Date as defined in Exhibit A
SOW
as per Exhibit D (on-site support excluded.)
Price
per RAN per month (Monthly rate derived by dividing the prevailing option
3 price by 12 at the time of election)
|
$ | [ | *] | ||
|
Option
Validity Period : concurrent with Option 3
|
||||||
|
5
|
Broadcast
Audio/Visual capability in the RAN
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
6
|
Expansion
of capacity from 200 VEC/800 Kbps to 875 VEC/3.5 Mbps in the same FDM
channel; Price per RAN
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
7
|
Expansion
of capacity from one FDM channel with 200 VEC1800 Kbps to two FDM
channels, 120 VEC/480 Kbps in second FDM channel; Both FDM channels
operate within the same 7.5 MHz of spectrum.
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
8
|
Expansion
of capacity from one FDM channel with 200 VEC/800 Kbps to two FDM
channels, 200 VEC/800 Kbps in each FDM channel; Both FDM channels operate
within the same 7.5 MHz of spectrum.
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
9
|
Expansion
of capacity-
from one FDM channel with 875 VEC/1.5 Mbps to two FDNI channels, 875
VEC/3.5 Mbps in each FDM channel; Both FDM channels operate within the
same 7.5 MHz spectrum.
|
$ | [ | *] | ||
|
Option
Validity Period : EDC [*]
|
||||||
|
10
|
1
Mb/s forward bearer capability in the Satellite Air Interface
Chip
|
|||||
|
NRE
|
$ | [ | *] | |||
|
Recurring
incremental cost per chip
|
$ | [ | *] | |||
|
Option
Validity Period : EDC [*]
|
||||||
|
11
|
Volume
tail Pricing for additional Satellite Air Interface Chips
|
|||||
|
Annual
quantity= 1 million
|
[ | *] | ||||
|
Annual
quantity= 2 million
|
[ | *] | ||||
|
Annual
quantity= 5 million
|
[ | *] | ||||
|
Option
Validity Period : EDC [*]
|
||||||
|
12
|
License of Satellite Air
Interface Chip Software and Firmware only for use in Customer's own
developed Chip one license per chip)
|
|||||
|
Annual
quantity = 250,000
|
[ | *] | ||||
|
Annual
quantity = 500,000
|
[ | *] | ||||
|
Annual
quantity =1 million+
|
[ | *] | ||||
|
Option
Validity Period : EDC [*]
|
||||||
TIME
AND MATERIAL (T&M) RATE
|
Time:
|
US$[*] per man-month
|
| Materials and Travel: | Contractor’s actual cost plus [*]% |
| Rate Validity Period: | EDC+ 36 months; thereafter adjusted for escalation, capped at [*]. |
2.0 PAYMENT
MILESTONES and plan
The
Payment Milestones and Plan is provided below.
|
Number
|
Project
Milestone
|
Invoice
Date
|
Source
of Advance
Payment
|
Regular
Payment
|
Total
|
|||||||||||
|
Design
Phase
|
||||||||||||||||
|
1
|
Effective
Date of Contract (EDC)
|
$[*] | ||||||||||||||
|
2
|
Kickoff
Review (KOR)
|
$[*] | ||||||||||||||
|
3
|
Progress
Payment
|
$[*] | ||||||||||||||
|
4
|
Preliminary
Design Review (PDR) complete
|
See
4.a
|
||||||||||||||
|
4a
|
Deferred
Payments
|
$[*] | ||||||||||||||
|
4b
|
Interest
on Deferred Payments
|
$[*] | ||||||||||||||
|
4c
|
ADVANCE
PAYMENT
|
$[*] | ||||||||||||||
|
5
|
RAN
Critical Design Review (CDR) complete
|
Aug-09
|
$[*] | |||||||||||||
|
6
|
Technical
Interchange Review meeting to review updated Technical Specifications
incorporating agreements from previous reviews.
|
Jan-10
|
($)[*]
|
$[*] | $[*] | |||||||||||
|
7
|
RAN-CN
IuPS interface control plane testing complete
|
Apr-10
|
($)[*]
|
$[*] | $[*] | |||||||||||
|
8
|
EMS
GUI and RNC Fault Management integration testing
complete
|
Jul-10
|
($)[*]
|
$[*] | $[*] | |||||||||||
|
9
|
Tape
out for SAIC
|
Oct-10
|
($)[*]
|
$[*] | $[*] | |||||||||||
|
Production
Phase
|
||||||||||||||||
|
10
|
Site
Surveys complete
|
Jan-11
|
$[*] | $[*] | ||||||||||||
|
11
|
Deliver
prototype chip to Customer’s UT Vendor
|
Apr-11
|
$[*] | $[*] | ||||||||||||
|
12
|
Deliver
sample pre-production chips to Customer’s UT Vendor
|
Jul-11
|
$[*] | $[*] | ||||||||||||
|
13
|
Material
order
|
Oct-11
|
$[*] | $[*] | ||||||||||||
|
Number
|
Project
Milestone
|
Invoice
Date
|
Source
of Advance
Payment
|
|
Regular
Payment
|
Total
|
||||||||||
|
14
|
Test
RAN & RAN#1 Shipment from Factory
|
Feb-12
|
$[*] | $[*] | ||||||||||||
|
15
|
Complete
RAN FAT
|
Apr-12
|
$[*] | $[*] | ||||||||||||
|
16
|
Complete
SySAT and Provisional Acceptance as per Exhibit
A
|
Jul-12
|
$[*] | $[*] | ||||||||||||
|
17
|
Complete
of RAN#3 in service (start of Customer’s commercial service in North
America with first 3 RANs)
|
Aug-12
|
$[*] | $[*] | ||||||||||||
|
18
|
Complete
OAT of RAN#4
|
Sep-12
|
$[*] | $[*] | ||||||||||||
|
19
|
Complete
OAT of RAN#5
|
Sep-12
|
$[*] | $[*] | ||||||||||||
|
20
|
Complete
OAT of RAN#6
|
Oct-12
|
$[*] | $[*] | ||||||||||||
|
21
|
Complete
OAT of RAN#7
|
Oct-12
|
$[*] | $[*] | ||||||||||||
|
22
|
Complete
OAT of RAN#8
|
Nov-12
|
$[*] | $[*] | ||||||||||||
|
23
|
Completion
of the Work (latter of 9th
RAN OAT and Final Acceptance as defined in Exhibit A, overall no later
than EDC+55 months)
|
Nov-12
|
$[*] | $[*] | ||||||||||||
|
SUBTOTAL
|
$[*] | |||||||||||||||
|
Manufacture
and Delivery of 250K Satellite Air Interface Chips (Item #8 in Section
1.1)
|
||||||||||||||||
|
Final
Delivery Payments ([*])
|
Apr-12
thru
Apr-13
|
$[*] | $[*] | |||||||||||||
|
TOTAL
|
$[*] | |||||||||||||||
The chip
prices quoted above are for delivery of the ordered quantity within one
year. Customer desires to gain the benefit of cumulative volume
pricing with deliveries over multiple years. Customer shall therefore
be entitled to participate with Contractor in the negotiation of the supply
contract terms with Contractor's supplier. In the event and to the
extent that Customer and Contractor are able jointly to successfully negotiate
supply contract terms which include more favorable volume pricing Contractor
will extend such terms to the Customer on back-to-back basis and the Contract
shall be amended accordingly.
