The contracts were formalized during a signing ceremony attended by top representatives of the manufacturers and Globalstar service providers at Globalstar's headquarters in San Jose, California. These agreements establish relationships between the phone manufacturers and the Globalstar service providers, enabling them to order products to meet their market demand.

``These groundbreaking contracts will ensure that Globalstar's service providers will have a variety of phone products for their subscribers when we enter into commercial service in early 1999,'' said Mr. Bernard L. Schwartz, chairman and chief executive officer of Loral Space & Communications, Globalstar's largest equity partner.

Globalstar awarded Qualcomm some $117 million in contracts for the manufacture of both handheld and fixed Globalstar satellite telephones. Qualcomm will manufacture Globalstar tri-mode handsets that will operate as a cellular phone within terrestrial CDMA and AMPS cellular networks, and as Globalstar satellite phones when out of terrestrial cellular coverage. This contract includes the delivery of car and vehicle kits that will allow hands-free operation from within a vehicle. Qualcomm will also manufacture a variety of fixed Globalstar satellite phone products. These phone units will provide service in areas previously deemed too costly for traditional land-based telephone or cellular services. Fixed satellite telephones will be located in phone booths or calling centers located in rural communities, and at remote business operations, such as oil rigs, utility sites or mining facilities.

Ericsson OMC, Ltd., a subsidiary of Ericsson Telecommunications, received contracts totaling $204 million for the manufacture of hand-held Globalstar dual-mode satellite phones that will support both GSM cellular services and the Globalstar mode of operations. The handset contract includes the delivery of car and vehicle kits that will allow hands-free operation from within a vehicle. Ericsson will also manufacture a variety of fixed Globalstar phone products.

Globalstar awarded Telital, contracts totaling $32 million for the manufacture of hand-held Globalstar dual-mode satellite phones that will support both GSM cellular services and the Globalstar mode of operations. The handset contract also includes the delivery of car and vehicle kits that will allow hands-free operation from within vehicles. Telital plans to unveil a series of hand-held satellite phones to meet the needs of a variety of potential users.

The $2.7 billion Globalstar system, comprised of 48 low-earth-orbit (LEO) satellites and a global network of ground stations, will allow people around the world to make or receive calls using hand-held, vehicle-mounted and fixed-site terminals. Globalstar will also provide data transmission, messaging, facsimile and position location services. The first four Globalstar satellites were successfully launched on February 14, 1998. The next launch of four satellites, also from Cape Canaveral, is scheduled for April 23, 1998, and Globalstar expects to launch a total of 44 satellites into orbit by the end of the year.

Globalstar now has service provider agreements in over 100 countries, covering 81% of Globalstar's business plan. Four Globalstar gateways have been fully completed and are being used to control and test the satellite system. Facility construction has been completed at six other sites, and site work and construction is under way at 20 more gateway sites around the world.

Some subscribers will use portable phones, similar to today's cellular phones, with dual- mode capability so subscribers can switch from conventional cellular telephony to satellite telephony as required. Subscribers in rural and remote areas may make or receive calls through fixed-site telephones, similar either to phone booths or ordinary residential and business telephones. Globalstar phones will communicate through a Globalstar satellite to a gateway--or ground station -- that in turn will connect calls into the existing terrestrial telecommunications network.