**Exhibit 10.4**

 

**CONTINGENT EQUITY AGREEMENT**

 

This Contingent EquityAgreement (“**Agreement**”) is enteredinto as of June 19, 2009 between **THERMOFUNDING COMPANY LLC**, a Colorado limited liability company (“**Thermo**”), and **GLOBALSTAR, INC.**, a Delaware corporation (the “**Company**”).

 

**WHEREAS**, on June 5,2009, the Company entered into a facility agreement with a syndicate of banksfor a secured loan facility being used to fund primarily the Company’ssecond-generation satellite constellation (the “**Facility Agreement**”);

 

**WHEREAS**, Thermo hasagreed to deposit $60 million in the Contingent Equity Account to fulfill oneof the conditions precedent to funding the Facility Agreement; and

 

**WHEREAS**, upon therecommendation of the Thermo Transactions Special Committee, the Board ofDirectors has approved certain payments to Thermo.

 

**NOW,THEREFORE**, in consideration of the promises and of the mutualcovenants and agreements hereinafter set forth and for other good and valuableconsideration, the receipt and legal sufficiency of which are herebyacknowledged, the parties do hereby agree as follows:

 

**1.****                                     ****CertainDefinitions.**

 

**“Closing Price”** means, for any trading day, the closingprice of the Common Stock on the primary trading market for the Common Stock.

 

**“Common Equity”** means the Common Stock and the Nonvoting CommonStock.

 

**“Common Stock”** means the Company’s common stock, par value$0.0001 per share.

 

“**Nonvoting Common Stock**” means any class of nonvoting commonstock of the company approved by the Board of Director of the Corporation andfor which stockholder approval is obtained, and any securities into which suchnonvoting common stock may hereafter be reclassified.

 

**“Securities”**means the Common Equity and the Warrants.

 

**“Warrants”** means warrants to purchase the Common Stock at anexercise price of $0.01 per share, in a form reasonably satisfactory to Thermo.

 

**2.****                                      ****Other Definitions. **Unless otherwise definedherein, capitalized terms will have the meaning set forth in the AccountsAgreement dated 5 June 2009 

 

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betweenthe Company, Thermo and BNP Paribas, as Security Agent, the COFACE Agent andthe Offshore Account Bank.

 

**3.****                                      ****ContingentEquity Facility. **Thermo herebyagrees to provide to the Company, on the terms and conditions described herein,a contingent equity facility (the “**Contingent Equity Facility**”)of $60,000,000, which Contingent Equity Facility may be drawn upon by theCompany for the purposes and subject to the limitations set forth in thisAgreement.

 

**4.****                                     ****FundingObligations.**

 

(a) If,at any time after the date of this Agreement until the Contingent EquityRelease Date, Thermo receives a Contingent Equity Funding Notice indicatingthat it is required to advance funds from the Thermo Contingent Equity Accountto the Collection Account in accordance with Section 6.3 of the AccountsAgreement, Thermo shall promptly advance such funds.

 

(b) Thermohereby consents to any advance of funds from the Thermo Contingent EquityAccount into the Collection Account initiated by the COFACE Agent in accordancewith Paragraph (d) of Section 6.3 of the Accounts Agreement.

 

(c) Anyadvance made from the Thermo Contingent Equity Account to the CollectionAccount pursuant to paragraph (a) or (b) of this Section 3 isreferred to herein as a “Thermo Advance.”

 

**5.****                                     ****Issuanceof Common Equity.**

 

(a) Inconsideration for, and simultaneously with, the funding of each Thermo Advance,the Company shall issue to Thermo a number of shares Common Equity of equal tothe amount of such Thermo Advance dividedby 80% of the trailing15-day average Closing Price immediately preceding such Thermo Advance.

 

(b) Exceptas provided in paragraph (c) of this Section 5, all shares CommonEquity delivered in consideration for a Thermo Advance shall be shares ofCommon Stock.

 

(c) Tothe extent the issuance of Common Stock pursuant to this Section 5 wouldresult in Thermo or its affiliates individually or as a group acquiringbeneficial ownership of voting stock representing more than 69.9% of the totalvoting power of all outstanding voting stock of the Company, the Company willdeliver Nonvoting Common Stock in lieu of Common Stock.

 

(d) Theshares of Common Equity to be issued to Thermo shall be delivered to Thermo freeand clear of any encumbrances. In connection with any such issuance of CommonEquity, the Company shall deliver a stock certificate representing the sharesof Common Equity to be issued to Thermo. The Company shall at all times reserveand keep available out of its authorized but unissued shares of Common Equity,for the purpose of complying with the terms of this Agreement, such number ofits duly authorized shares of Common Equity as shall be sufficient to effectthe terms of this Agreement.

 

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**6.****                                     ****Terminationof Contingent Equity Facility.** The Contingent EquityFacility and all Funding Obligations hereunder shall terminate upon expirationof the Funding Term; provided, that, the Contingent Equity Facility and allFunding Obligations hereunder shall earlier terminate in the event that aChange of Control (as defined in the Amended Charter) shall occur. Upontermination of the Contingent Equity Facility, Thermo shall have no obligationto provide any additional capital to the Company.

 

**7.****                                     ****Loan Fee.**

 

## (a) In consideration of Thermo’s fundingof the Contingent Equity Account, the Company will pay to Thermo, uponexecution of this Agreement and annually thereafter, a loan fee in the amountof 10% of the outstanding amount of the Contingent Equity Facility (“**Outstanding Amount**”) delivered in the formof a number of Warrants calculated as described in this section (the “**Loan Fee**”).

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## (b) The number of Warrants delivered asthe Loan Fee shall be equal to the Outstanding Amount divided by theWarrant Price.  The Warrants shall bedelivered within 10 days of calculation of the Loan Fee.

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## (c) The Warrant Price shall initially beequal to $1.37 and shall be adjusted as set forth in this Section 7.

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## (d) If on either or both of the secondand third anniversaries of the date of this Agreement the initial Warrant Priceis more than the Closing Price of the Common Stock on such date, the WarrantPrice shall be adjusted to equal the higher of (i) the Closing Price onsuch date or (ii) $0.20.

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## (e) If on the last day of any year, thefair market value of the Warrants received in consideration of Loan Fees forsuch year is lower than the fair market value of such Warrants at the time theywere delivered, the Company shall deliver additional Warrants with a fair marketvalue equal to such difference to Thermo. All calculations of fair market value shall be based on the ClosingPrice.  If the Closing Price is less than$0.20, the Company shall pay Thermo cash for any of the difference in fairmarket value below $0.20 if permitted under the Facility Agreement.  If not permitted such amounts shall beaccrued and added to the Outstanding Amount.

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## (f) If the Company at any time on orafter the date hereof the Company subdivides the outstanding Common Stock(whether by stock split, stock dividend or otherwise) into a greater number ofshares, the Warrant Price shall be proportionately reduced.

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**8.****                                     ****Representationsand Warranties.**

 

(1) TheCompany hereby represents, warrants and certifies to Thermo  that each of the following representationsand warranties with respect to itself is true and correct:

 

## (a)*                                 **Organizationand Authority*.  The Companyhas all requisite power and authority to enter into this Agreement and toconsummate the Transaction.  The Companyis duly organized and validly existing under the laws of the State of 

 

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## Delaware.  The execution anddelivery by the Company of this Agreement and the consummation by the Companyof the Transaction has been duly authorized. This Agreement, when duly executed and delivered by the Company willconstitute a legal, valid, and binding obligation of the Company, enforceableagainst it in accordance with its terms, except as the enforcement thereof maybe limited by bankruptcy, insolvency, fraudulent conveyance, reorganization,moratorium, or similar laws affecting the enforcement of creditors’ rightsgenerally and general equitable principles whether in a proceeding in equity orat law.

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## (b)                                *Noncontravention.*  The execution and delivery of this Agreement,the consummation of the Transaction and the fulfillment of and compliance withthe terms and conditions hereof do not and will not with the passing of time orgiving of notice (i) result in a violation of the organizational documentsof the Company, (ii) violate any law, rule, regulation, provision of anyjudicial or administrative order, award, judgment or decree applicable to theCompany or the Securities, or (iii) conflict with, result in a breach ofor right to cancel or constitute a default under any agreement or instrument towhich the Company is a party, by which the Company is bound or to which theCompany or the Securities are subject.

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## (c)                                 *Title. *Upon delivery of thecertificate or certificates representing any Security, Thermo will obtain good,valid and transferable title to such Security free and clear of all liens,claims and encumbrances whatsoever.

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## (e)                                 *Broker. *No officer, director,employee or third party shall be entitled to receive any brokerage commissionsor similar compensation in connection with the Transaction contemplated by thisAgreement based on any arrangement or agreement made by or on behalf of theCompany.

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## (f)                                    *Acknowledgement*.  The Company acknowledges that Thermo has notmade any representations or warranties to it except to the extent of therepresentations and warranties of Thermo in this Agreement.

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(2) Thermohereby represents, warrants and certifies to the Company that each of thefollowing representations and warranties with respect to itself is true andcorrect:

 

## (a)                                  *Organizationand Authority*.  Thermo hasall requisite power and authority to enter into this Agreement and toconsummate the Transactions contemplated hereby.  Thermo is duly organized or formed and validlyexisting as a limited liability company, and in good standing under the laws ofthe State of Colorado.  The execution anddelivery by Thermo of this Agreement and the consummation by Thermo of theTransaction have been duly authorized. This Agreement, when duly executed and delivered by Thermo will constitutea legal, valid and binding obligation of Thermo, enforceable against Thermo inaccordance with its terms, except as the enforcement thereof may be limited bybankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium orsimilar laws affecting the enforcement of creditors’ rights generally andgeneral equitable principles whether in a proceeding in equity or at law.

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## (b)*                                **Noncontravention.*  The execution and delivery of this Agreement,the consummation of the Transaction and the fulfillment of and compliance withthe terms and conditions hereof do not and will not with the passing of time or

 

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## giving of notice (i) result in a violation of the organizationaldocuments of Thermo, (ii) violate any law, rule, regulation, provision ofany judicial or administrative order, award, judgment or decree applicable toThermo, or (ii) conflict with, result in a breach of or right to cancel orconstitute a default under any agreement or instrument to which Thermo is aparty, by which Thermo is bound or to which Thermo is subject.

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## (c)*                                     **SecuritiesAct*.  Thermo is acquiring theSecurities for its own account for investment only and not with a present viewtowards the public sale or distribution thereof, except pursuant to salesregistered or exempted under the Securities Act.

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## (d)                                    *Thermo’sQualifications*.  Thermo isan “accredited investor” as such term is defined in Regulation D under theSecurities Act.

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## (e)                                  *Transferor Resale*.  Thermounderstands that the Securities have not been and are not being registeredunder the Securities Act or any state securities laws and may not be offeredfor sale, sold, assigned or transferred without registration under theSecurities Act or an exemption therefrom, and that the grounds for exemption ofthe Transaction is Section 4(2) of the Securities Act.  Thermo understands that a legend restrictingtransfer except in compliance with the Securities Act will be reflected on thecertificates or records representing the Securities.

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## (f)                                    *StockholderApproval*.  Thermounderstands that neither the Warrants may be exercised nor the Common Equitymay be issued until receipt of any necessary approval by a majority of thestockholders of the Company in accordance with applicable Nasdaq Listing Rules orthe Delaware General Corporation Law.

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## (g)                                 *Acknowledgement*.  Thermo acknowledges that the Company has notmade any representations or warranties to it except to the extent of therepresentations and warranties of the Company in this Agreement.

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**9.****                                     ****Notices.**  All notices, requests, consents and othercommunications hereunder shall be in writing and shall be delivered in person,mailed by certified or registered mail, return receipt requested, or sent bytelecopier or telex, addressed as follows:

 

(a) ifto the Company:

Globalstar, Inc.

461S. Milpitas Blvd.

Milpitas,CA 95035

Attn:  Chief Financial Officer

Phone:  (408) 933-4000

Facsimile:  (408) 933-4949

(b) ifto Thermo:

ThermoFunding Company LLC

1735Nineteenth Street

Denver,CO 80202

Attention:  Manager

 

or,in any such case, at such other address or addresses as shall have beenfurnished in writing by such party to the others.

 

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# **10.****                               ****Successors and Assigns**.  No party may assign this Agreement or anyrights or obligations hereunder without the prior written consent of the otherparty.  Subject to the preceding, thisAgreement shall be binding upon, inure to the benefit of and be enforceable bythe parties hereto and their respective successors and assigns.

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# **11.****                               ****Severability**.  If anyprovision of this Agreement is prohibited by law or otherwise determined to beinvalid or unenforceable by a court of competent jurisdiction, the provisionthat would otherwise be prohibited, invalid or unenforceable shall be deemedamended to apply to the broadest extent that it would be valid and enforceable,and the invalidity or unenforceability of such provision shall not affect thevalidity of the remaining provisions of this Agreement so long as this Agreementas so modified continues to express, without material change, the originalintentions of the parties as to the subject matter hereof and the prohibitednature, invalidity or unenforceability of the provision(s) in questiondoes not substantially impair the respective expectations or reciprocalobligations of the parties or the practical realization of the benefits thatwould otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace theprohibited, invalid or unenforceable provision(s) with a validprovision(s), the effect of which comes as close as possible to that of theprohibited, invalid or unenforceable provision(s).

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# **12.****                               ****Entire Agreement; Amendments**.  This Agreement supersedes all other priororal or written agreements between Thermo, the Company, and their respectiveaffiliates and persons acting on their behalf with respect to the mattersdiscussed herein, and this Agreement contains the entire understanding of theparties with respect to the matters covered herein and, except as specificallyset forth herein, neither Thermo nor the Company makes any representation,warranty, covenant or undertaking with respect to such matters.  No provision of this Agreement may beamended, waived, terminated or otherwise modified other than by an instrumentin writing signed by Thermo and the Company. Any amendment to this Agreement made in conformity with the provisionsof this Section 11 shall be binding on all parties.  No provision hereof may be waived other thanby an instrument in writing signed by the party against whom enforcement issought.

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**13.****                                   ****FurtherAssurances.** The parties shall execute and deliver such furtherinstruments and perform such further acts as may reasonably be required tocarry out the purposes of this Agreement.

 

# **14.****                               ****Binding Effect**.  ThisAgreement shall be binding upon and inure to the benefit of the parties heretoand the respective successors, legal representatives and assigns of each.

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# **15.****                               ****Counterparts**.  ThisAgreement may be executed in counterparts, each of which shall be deemed anoriginal, but all of which together shall be deemed one and the sameinstrument.

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# **16.****                               ****Applicable Law.**  ThisAgreement shall be governed by the laws of the State of New York, withoutregard to the choice of law rules thereof.

 

***Signatures are on the following page.***

 

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**IN WITNESS WHEREOF**, thisAgreement has been duly executed by each of the parties hereto as of the datefirst above written.

 
|   | **THERMO  FUNDING COMPANY LLC**      |
|--------|--------------------------------------|
|   |                                 |   |
|   |                                 |   |
|   | By:                                  | /s/  James Monroe III |
|   | Printed  Name: James Monroe III      |
|   | Title:  Manager                      |
|   |                                 |
|   | ** **                           |
|   | **GLOBALSTAR,  INC.**                |
|   |                                 |
|   |                                 |
|   | By:                                  | /s/  Fuad Ahmad |
|   | Printed Name: Fuad  Ahmad            |
|   | Title: Senior Vice President and CFO |

 

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