GLOBALSTAR TELECOMMUNICATIONS LTD, 424B3, 1997-05-07

GLOBALSTAR TELECOMMUNICATIONS LTD
424B3, 1997-05-07
RADIOTELEPHONE COMMUNICATIONS

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PROSPECTUS

3,047,796 SHARES OF COMMON STOCK

GLOBALSTAR TELECOMMUNICATIONS LIMITED
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All of the 3,047,796 shares of Common Stock, par value $1.00 per share (the
"Common Stock"), of Globalstar Telecommunications Limited (the "Company" or
"GTL") offered hereby (the "Offering") are offered by the Selling Shareholders
(as defined herein). Such shares (the "Shares") were acquired by the Selling
Shareholders upon exercise of certain warrants (the "Guaranty Warrants") issued
to them in connection with their guaranties of a $250 million credit agreement
for Globalstar, L.P. ("Globalstar"). GTL is a general partner in Globalstar. See
"Background of the Offering."

The Shares offered hereby may be sold from time to time to purchasers
directly by the Selling Shareholders. Alternatively, the Selling Shareholders
may from time to time offer the Shares to or through underwriters, broker-
dealers or agents, who may receive compensation in the form of underwriting
discounts, concessions or commissions from the Selling Shareholders or the
purchasers of Shares, for whom they may act as agent. The Shares offered hereby
may be sold from time to time in one or more transactions at fixed prices, at
prevailing market prices at the time of sale, at varying prices determined at
the time of sale or at negotiated prices. Such prices will be determined by the
Selling Shareholders or by agreement between the Selling Shareholders and
underwriters and dealers who may receive fees or commissions in connection
therewith. The sale of the Shares may be effected in transactions (which may
involve crosses or block transactions) (i) on any national securities exchange
or quotation service on which the Common Stock may be listed or quoted at the
time of sale, (ii) in the over-the-counter market, (iii) in transactions
otherwise than on such exchanges or in the over-the-counter market or (iv)
through the writing of options. At the time a particular offering of Shares is
made, a Prospectus Supplement, if required, will be distributed which will set
forth the aggregate amount and type of Shares being offered and the terms of the
offering, including the name or names of any underwriters, broker-dealers or
agents, any discounts, commissions and other terms constituting compensation
from the Selling Shareholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers. GTL will not receive any of the
proceeds from the sale of the Shares offered hereby, but GTL did receive
approximately $110.9 million from the Selling Shareholders and other holders of
the Guaranty Warrants upon their exercise of such warrants. See "Selling
Shareholders" and "Plan of Distribution."

The Common Stock is listed on the Nasdaq National Market (the "NNM") under
the symbol "GSTRF." On May 5, 1997, the last reported sale price of the Common
Stock on the NNM was $53 1/2 per share.

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PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS DISCUSSED
UNDER "RISK FACTORS" BEGINNING ON PAGE 3.

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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

MAY 6, 1997
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Note: On April 8, 1997, GTL's Board of Directors voted to effect a 2-for-1
stock split of the Common Stock in the form of a stock dividend (the "Stock
Split"), such dividend to be paid on May 28, 1997 to stockholders of record on
May 12, 1997. Unless otherwise indicated, information contained herein regarding
the number of outstanding partnership interests of Globalstar or shares of
Common Stock of GTL and the beneficial ownership thereof does not give effect to
the Stock Split. Certain capitalized terms used herein are defined in the
Glossary.

AVAILABLE INFORMATION

GTL is subject to the informational requirements of the Exchange Act and in
accordance therewith files reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information filed by
GTL can be inspected and copied at public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549; Seven World Trade
Center, 13th Floor, New York, New York 10048; and Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material can be obtained
from the Public Reference Section of the Commission, Washington, D.C. 20549 at
prescribed rates. The Commission maintains a Web site at http://www.sec.gov that
contains reports, proxy and information statements and other information
regarding GTL. The Common Stock is quoted on the NNM, and copies of the reports,
proxy statements and other information filed by GTL with the Commission may also
be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.

GTL has filed with the Commission a Registration Statement on Form S-3
(together with all exhibits and amendments, the "Registration Statement") under
the Securities Act, with respect to the securities offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto, certain portions of which are
omitted as permitted by the rules and regulations of the Commission. For further
information with respect to GTL and the securities offered hereby, reference is
made to the Registration Statement, including the exhibits and schedules. The
Registration Statement may be inspected, without charge, at the Commission's
principal office at 450 Fifth Street, NW, Washington, D.C. 20549, and also at
the regional offices of the Commission listed above. Copies of such material may
also be obtained from the Commission upon the payment of prescribed rates.

Statements contained in the Prospectus as to any contracts, agreements or
other documents filed as an exhibit to the Registration Statement are not
necessarily complete, and in each instance reference is hereby made to the copy
of such contract, agreement or other document filed as an exhibit to the
Registration Statement for a full statement of the provisions thereof, and each
such statement in the Prospectus is qualified in all respects by such reference.

INCORPORATION BY REFERENCE

The following documents have been filed by GTL with the Commission pursuant
to the Exchange Act and are hereby incorporated by reference into this
Prospectus:

(a) GTL's Annual Report on Form 10-K for the year ended December 31,
1996 (the "Form 10-K");

(b) GTL's Proxy Statement relating to the 1997 Annual Meeting of
Stockholders;

(d) the description of GTL's Common Stock contained in GTL's
Registration Statement on Form 8-A filed under the Exchange Act and any
amendments or reports filed for the purpose of updating such description.

All documents filed by GTL pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of the offering of the Common Stock offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing

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such documents (provided, however, that the information referred to in item
402(a)(8) of Regulation S-K of the Commission shall not be deemed specifically
incorporated by reference herein).

Any statement contained herein or in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
(or in the applicable Prospectus Supplement) or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement as modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

GTL will provide without charge to each person, including any beneficial
owner, to whom a copy of this Prospectus has been delivered, upon the written or
oral request of any such person, a copy of any or all of the documents
incorporated by reference in this Prospectus (other than exhibits and schedules
thereto, unless such exhibits or schedules are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
oral requests for copies of these documents should be directed to Globalstar
Telecommunications Limited, Cedar House, 41 Cedar Avenue, Hamilton HM12,
Bermuda, Attention: Secretary (Telephone (441) 295-2244).

FORWARD-LOOKING STATEMENTS

The statements contained or incorporated by reference in this Prospectus
that are not historical facts are "forward-looking statements" (as such term is
defined in the Private Securities Litigation Reform Act of 1995), which can be
identified by the use of forward-looking terminology such as "believes",
"expects", "may", "will", "should", or "anticipates" or the negative thereof or
other variations thereon or comparable terminology, or by discussions of
strategy that involve risks and uncertainties. From time to time, GTL, Loral, a
subsidiary of which is the managing general partner of Globalstar, and
Globalstar or their representatives have made or may make forward-looking
statements, orally or in writing. Furthermore, such forward-looking statements
may be included in, but are not limited to, various filings made by GTL, Loral
or Globalstar with the Commission, or press releases or oral statements made by
or with the approval of an authorized executive officer of GTL, Loral or
Globalstar.

Management wishes to caution the reader that these forward-looking
statements, such as the statements regarding Globalstar's planned timetable for
launching and operating the Globalstar System, the extent of the market
opportunity for Globalstar's services and products presented by the growing
demand for telecommunications services worldwide, its anticipation of enabling
local service providers to extend low-cost, high-quality telecommunications
services to millions of people, its anticipated future revenues and capital
expenditures and other statements contained or incorporated by reference in this
Prospectus regarding matters that are not historical facts involve predictions.
No assurance can be given that the future results will be achieved; actual
events or results may differ materially as a result of risks facing Globalstar.
Such risks include, but are not limited to, problems related to technical
development and launch of the Globalstar System, the competitive environment in
which the system will operate, doing business in developing markets, obtaining
the necessary financing while being substantially leveraged, obtaining any
required U.S. and foreign government authorizations, licenses and permits, all
in a timely manner, at reasonable costs and on satisfactory terms and
conditions, as well as regulatory, legislative and judicial developments that
could cause actual results to vary materially from the future results indicated,
expressed or implied, in such forward-looking statements. See "Risk Factors."

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RECENT DEVELOPMENTS

Globalstar is building and preparing to launch and operate a low-earth
orbit satellite-based telecommunications system (the "Globalstar System"). As of
May 6, 1997, each of the elements of the Globalstar System -- space and ground
segments, digital communications technology, user terminal supply, service
provider arrangements and licensing -- is on schedule to begin launching
satellites in the second half of 1997, to commence commercial operations in the
second half of 1998 and to have a full constellation of 48 satellites
operational in the first quarter of 1999.

Space Segment. The first Globalstar satellite has been
fully-assembled and is now in pre-flight testing, and another four
satellites are currently being assembled. Production is proceeding for the
remaining satellites to meet the scheduled operations date. Three different
launch providers have signed definitive agreements for the launch of the
Globalstar satellite constellation, providing a variety of launch options
and considerable launch flexibility. Mission operations preparations and
launch vehicle production and dispenser development are on schedule.

Ground Segment. The first four Globalstar gateways, which are
currently in advanced development and are to be located in Australia,
France, South Korea and the United States, are currently under
construction. These gateways will support Globalstar's data network,
monitor the initial launch and orbital placement of Globalstar's first
satellites, and serve as prototypes for production gateways that will
support Globalstar service. In addition, Globalstar's satellite operations
control center facility has been completed.

Digital Communications Technology. Qualcomm's CDMA technology has now
been successfully deployed in South Korea, Hong Kong and cities in the
United States supporting terrestrial personal communications services and
digital cellular service, and its CDMA implementation for Globalstar has
been successfully demonstrated in a simulated satellite environment. This
demonstration validated Globalstar's encoding, modulation, control
software, time and frequency distribution and up/down links between
satellites and handsets.

User Terminal Supply. Qualcomm/Sony and two other manufacturers,
Ericsson and TELITAL, are developing Globalstar's user terminals and
production orders are expected to be issued in the second half of 1997.

Service Providers. Globalstar and its partners have been seeking
alliances with service providers throughout the world and have entered into
a number of agreements in specific territories. Globalstar believes that
these relationships with in-country service providers will facilitate the
granting of local regulatory approvals -- particularly where the service
provider and the licensing authority are one and the same -- as well as
provide local marketing and technical expertise.

Licensing. In January 1995, the FCC granted authority for the
construction, launch and operation of the Globalstar System and assigned
spectrum for its user links. Later that year, the 1995 World
Radiocommunication Conference allocated feeder link spectrum on an
international basis for MSS systems such as Globalstar, and in November
1996 the FCC authorized Globalstar's feeder links.

Globalstar's current budget for the cost for the design, construction and
deployment of the Globalstar System, including working capital, cash interest on
anticipated borrowings and operating expenses is approximately $2.5 billion.
Globalstar has recently added enhanced capabilities and additional test
requirements and has experienced cost growth in the development of the ground
system, the final cost impact of which is under assessment. Globalstar, however,
does not expect such cost growth to increase the budget for the project by more
than five percent. Globalstar has raised or received commitments for
approximately $2.0 billion in equity, debt and vendor financing.

Globalstar has also agreed to purchase from SS/L eight additional spare
satellites at a cost estimated at $175 million. Globalstar also intends,
together with its strategic partners, to jointly finance the procurement of 37
gateways for resale to service providers, thereby accelerating the deployment of
gateways around the world prior to the date on which Globalstar expects to
commence initial operations via a 40-satellite constellation. Globalstar has
agreed to finance approximately $80 million of the cost of these gateways and
expects to recover its cost from the resale of these gateways to service
providers.
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BACKGROUND OF THE OFFERING

On December 15, 1995, Globalstar entered into the Credit Agreement
providing for a $250 million credit facility, which was guaranteed by certain
Globalstar strategic partners. In connection with such guaranties and a guaranty
support provided by Loral, GTL issued to these parties Guaranty Warrants to
purchase 4,185,318 shares of GTL common stock. In connection with the issuance
of the Guaranty Warrants, GTL received (i) rights to acquire 4,185,318 ordinary
partnership interests in Globalstar and (ii) rights to purchase an additional
1,131,168 ordinary partnership interests, on terms and conditions generally
similar to those of the Guaranty Warrants.

Shortly thereafter, Globalstar and GTL entered into an agreement pursuant
to which GTL and Globalstar agreed that upon the exercise of any Guaranty
Warrant, GTL would purchase from Globalstar, and Globalstar would sell to GTL, a
number of ordinary partnership interests equal to the number of shares of Common
Stock issuable upon such exercise for a purchase price equal to the exercise
price of the Guaranty Warrant.

Pursuant to an agreement among GTL, LQSS and the holders of the Guaranty
Warrants, GTL and LQSS accelerated the vesting and exercisability of the
Guaranty Warrants to purchase 4,185,318 shares of Common Stock, at $26.50 per
share, and the holders of the Guaranty Warrants exercised such warrants. GTL
used the proceeds of such exercise, of approximately $110.9 million, to purchase
a like number of general partnership interests in Globalstar. The Selling
Shareholders may from time to time offer the Shares they obtained upon exercise
of their respective Guaranty Warrants for sale as provided under "Plan of
Distribution." GTL will not receive any proceeds from the sale of the Shares by
the Selling Shareholders. See "Selling Shareholders" and "Plan of Distribution."

In addition, in order to enable the GTL shareholders to benefit directly
from the appreciation in the value of the 1,131,168 Partnership Warrants that
were not exercised with the proceeds from the exercise of the Guaranty Warrants
(which appreciation is reflected by the difference between the recent market
price of the Common Stock and the exercise price of the Partnership Warrants)
and to enable GTL to obtain the funds necessary for it to exercise such
Partnership Warrants, GTL distributed Rights to the holders of its Common Stock
to subscribe for and purchase 1,131,168 shares of Common Stock for a price of
$26.50 per share. GTL received approximately $30 million in proceeds from the
exercise of the Rights.

As a result of the exercise of the Guaranty Warrants and the Rights, GTL
received proceeds of approximately $140.9 million, which it used to exercise the
Partnership Warrants to purchase 5,316,486 Globalstar partnership interests at
$26.50 per interest. Globalstar will use such proceeds to continue the
construction and deployment of the Globalstar System.

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RISK FACTORS

Investors should consider the following risk factors and the risk factors
set forth in GTL's Form 10-K under "Certain Factors that May Affect Future
Results," which report is incorporated herein by reference, in addition to the
other information contained in this Prospectus, in evaluating whether to
purchase the Securities.

Controlling Person. Globalstar is managed by a committee, a majority of
whose members are Loral designated. The independent representatives on the
committee, however, have the right to pass upon certain matters before any
decision to submit them to a vote of the partners and will have certain
authority over the employment of senior officers of Globalstar.

Change of Control of GTL and Reduction in Interest; Investment Company Act
Considerations. If there is (i) a change of control of GTL when GTL owns less
than 50% of the Globalstar partnership interests outstanding or (ii) a sale or
other disposition of partnership interests by which the equity interest of GTL
in Globalstar is reduced to less than 5%, which has not been approved by LQSS or
by the partners of Globalstar, GTL will become a limited partner in Globalstar
and will no longer appoint representatives to serve on the General Partners'
committee. Certain other governance rights granted to GTL under Globalstar's
partnership agreement will also be revoked, and GTL will enjoy only the rights
of a limited partner in Globalstar. If GTL were to cease participation in the
management of Globalstar, which would result if GTL were to undergo a change of
control or a reduction in interest, its interest in Globalstar could be deemed
an "investment security" for purposes of the Investment Company Act. In general,
an entity is an "investment company" if, it owns investment securities having a
value exceeding 40% of the value of its total assets (exclusive of U.S.
government securities and cash items). GTL's sole asset is its partnership
interest in Globalstar. A determination that such investment was an investment
security could result in GTL's being deemed to be an investment company under
the Act and subject to its registration and other requirements. In order to
register, GTL might be required to reincorporate in the U.S. and would be
subject to U.S. tax on its worldwide income, subject to any applicable foreign
tax credits. Globalstar intends to conduct its operations so as to avoid
becoming an investment company under that Act.

No Dividends; Holding Company Structure; General Partner Liability. GTL
has not paid any dividends on its Common Stock, and Globalstar has not made any
distributions on its ordinary partnership interests to its partners. Except for
interest payments by GTL on GTL's CPEOs and distribution payments by Globalstar
on the Preferred Partnership Interests in Globalstar acquired by GTL in
connection with its issuance of the CPEOs, GTL and Globalstar do not anticipate
any such dividends or distributions before Globalstar's Full Constellation Date
and positive cash flow, which is not expected before 1999. GTL may not pay
dividends on its Common Stock while interest arrearages remain outstanding on
its CPEOs. GTL's sole asset is its partnership interest in Globalstar. GTL has
no independent means of generating revenues. Globalstar will pay GTL's operating
expenses related to Globalstar; such expenses are not expected to be material.
As a general partner of Globalstar, GTL is jointly and severally liable with the
other general partner for its obligations to the extent Globalstar is unable to
pay. To the extent permitted by law and agreements relating to indebtedness,
Globalstar intends to distribute to its partners, including GTL, its net cash
received from operations, less amounts required to repay outstanding
indebtedness, pay distributions on the Preferred Partnership Interests, satisfy
other liabilities and fund capital expenditures and contingencies (including
funds required for design, construction and deployment of the second-generation
satellite constellation). GTL intends to promptly distribute as dividends on its
Common Stock the distributions made by Globalstar, less any amounts required for
taxes, liabilities and contingencies.

Rights of Shareholders under Bermuda Law. GTL is incorporated under the
laws of the Islands of Bermuda. Principles of law relating to such matters as
the validity of corporate procedures, the fiduciary duties of GTL's management,
directors and controlling shareholders, and the rights of its shareholders are
governed by Bermuda law and GTL's Memorandum of Association and Bye-Laws. Such
principles may differ from those that would apply if GTL were incorporated in
the United States. There is uncertainty as to whether the courts of Bermuda
would enforce (i) United States court judgments obtained against GTL or its
officers and

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directors resident in foreign countries predicated upon the civil liability
provisions of United States securities laws or (ii) in original actions brought
in Bermuda, liabilities against GTL or such persons predicated upon United
States securities laws.

Tax Considerations. Special U.S. tax rules apply to U.S. taxpayers who own
stock in a "passive foreign investment company." Although GTL believes that it
will not become a PFIC, there is a risk that in the future it could. Then a U.S.
shareholder would be subject at his election either to (i) a current tax on
undistributed earnings or (ii) a tax deferral charge on certain distributions
and on gains from a sale of shares of the Common Stock (which will be taxed as
ordinary income).

GTL expects that a significant portion of its income will not be subject to
tax by the United States, Bermuda or by the countries from which it derives
income. However, the extent to which certain foreign jurisdictions may require
GTL to pay tax or to make payments in lieu of tax cannot be determined in
advance. See "-- Change of Control of GTL and Reduction in Interest; Investment
Company Act Considerations" and "Taxation."

Shares Eligible for Future Sale. On May 6, 1997, GTL had outstanding
15,316,486 shares of Common Stock. In addition, (i) 5,030,834 shares of Common
Stock are issuable upon conversion of GTL's CPEOs, (ii) 1,032,250 shares of
Common Stock will be issuable upon exercise of the warrants issued as a
component of the 500,000 units issued on February 19, 1997, consisting of
$500,000,000 11 3/8% Senior Notes due 2004 of Globalstar and its subsidiary,
Globalstar Capital Corporation, and warrants to purchase 1,032,250 shares of
Common Stock, (iii) 37,000,000 shares of Common Stock (subject to adjustment
upon conversion of the CPEOs) will be issuable upon exercise by the other
partners in Globalstar of their rights to exchange their ordinary partnership
interests for shares of Common Stock and (iv) 625,000 shares of Common Stock are
reserved for issuance under a stock option plan. All the above share numbers are
subject to a 2-for-1 adjustment upon the consummation of the Stock Split. Sales
of substantial amounts of Common Stock in the public market or the perception
that such sales could occur, could adversely affect the market price of the
Common Stock.

Volatility. The market price of the Common Stock has been volatile. In
particular, the trading prices of the common stock of many technology companies
have reflected extreme price and volume fluctuations, which have at times been
unrelated to operating performance. Factors such as announcements of
fluctuations in Globalstar's or its competitors' operating results and market
conditions for growth stocks or technology stocks in general could have a
significant impact on the future trading price of the Common Stock. In
particular, the trading price of the Common Stock could be subject to
significant fluctuations in response to variations in Globalstar's prospects and
operating results which could be affected by delays in the design, construction,
deployment, customer acceptance and commercial operation of the Globalstar
System, delays in obtaining service providers or regulatory approvals in
particular countries, launch failures, general conditions in the
telecommunications industry, regulation, international events, changes in
interest rates and other factors. Such factors may have an adverse effect on the
trading price of the Common Stock from time to time.

Dilution. Globalstar expects to fund its remaining capital requirements
from a combination of sources including debt issuance (which may include an
equity component), exercise of warrants, financial support from the partners,
service provider payments, service revenues from operations, payments from the
sale of gateways and Globalstar Phones. Globalstar may, subject to certain
preemptive and approval rights of its other partners, sell equity interests
(either directly or through the issuance of warrants, or convertible debt
securities), diluting the percentage ownership in Globalstar represented by the
Shares. Issuing additional partnership interests to new or existing partners
would dilute the ownership of other partners. The issuance of additional
partnership interests at prices lower than the price at which GTL may purchase
them would further dilute GTL. Ordinary partnership interests in Globalstar are
convertible, over a period of years following the date on which Globalstar
commences operations via a 48-satellite constellation and after at least two
consecutive reported fiscal quarters of positive net income, into Common Stock,
subject to certain restrictions, on a one-for-one basis, subject to adjustment.

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TAXATION

This discussion of certain tax considerations is based upon applicable
laws, treaties, regulations and interpretations thereof as currently in effect,
and is limited to persons who hold the Common Stock as a "capital asset" within
the meaning of Section 1221 of the Code. This discussion does not address the
consequences to holders of the Guaranty Warrants of the exercise of such
warrants in exchange for the Shares. This discussion does not consider all
aspects of taxation which may be relevant to a particular investor and which may
depend upon the investor's particular circumstances.

Prospective investors should consult with their own professional advisors
about the tax consequences to them of an investment in the Company under the
laws of the jurisdictions in which they are subject to taxation.

The following discussion of U.S. tax laws is based upon the opinion of
Willkie Farr & Gallagher, special U.S. counsel to the Company. The summary of
certain Bermuda tax consequences is based upon the opinion of Appleby, Spurling
& Kempe, Bermuda counsel to the Company.

CERTAIN UNITED STATES TAX CONSIDERATIONS

Taxation of the Company. The Company is a foreign corporation established
for the sole purpose of acquiring and holding a partnership interest in
Globalstar, a Delaware limited partnership. The Company's tax consequences will
result from its status as a partner in Globalstar. As a partnership, Globalstar
itself will not be subject to federal income taxation. Generally, its partners
will be taxed as if they directly expended their share of Globalstar
expenditures and directly realized their share of Globalstar income. The Company
expects, based on Globalstar's description of its proposed activities, that most
of the Company's income will be from sources outside the United States and that
such income will not be effectively connected with the conduct of a trade or
business within the United States ("Foreign Income"). Thus, there generally will
be no U.S. taxes on the Company's share of Globalstar's Foreign Income.

The Company will be subject to U.S. tax at regular U.S. federal, state and
local corporate rates on the Company's share of Globalstar's income which is
effectively connected with the conduct of a trade or business in the United
States ("U.S. Income"), and will be required to file federal, state and local
income tax returns with respect to such U.S. Income. Globalstar is obligated to
provide the information required for the Company to prepare its federal, state
and local income tax returns. Globalstar intends to make pro rata cash
distributions, to the extent of available funds, to all partners until the
non-U.S. partners, such as the Company, have been distributed an amount
sufficient to enable them to pay the federal, state and local income taxes on
their share of Globalstar's U.S. Income. This requirement to distribute to
non-U.S. partners for federal income taxes may be satisfied by a withholding tax
payment made by Globalstar to the U.S. Treasury. The amount withheld may exceed
the amount of the Company's federal income tax liability and the Company would
then be entitled to seek a refund from the U.S. Treasury for the excess amount.
In addition to the regular U.S. taxes, the Company will be subject to a United
States branch profits tax (currently 30%) on actual or deemed withdrawals of its
share of Globalstar's U.S. Income.

Taxation of Non-U.S. Investors in the Company. The Company expects that
most of its income will be from sources outside the United States and will not
be effectively connected with a U.S. trade or business. Thus, a non-U.S.
resident alien individual, a non-U.S. corporation, a non-U.S. trust or a
non-U.S. estate will not be subject to U.S. federal taxation on distributions
received from the Company unless those distributions are effectively connected
with the conduct by the investor of a trade or business in the United States. In
addition, such a non-U.S. investor will not be subject to U.S. federal taxation
on gains realized by the investor on a sale or exchange of shares of Common
Stock unless the sale of such shares is attributable to an office or fixed place
of business maintained by the investor in the United States. The determination
of whether an investor is engaged in the conduct of a trade or business in the
United States or whether the sale of an investor's shares of Common Stock is
attributable to an office or fixed place of business of the investor in the
United States depends on the facts and circumstances of each investor's case.
Each prospective investor should consult with his own tax advisor to determine
whether his distributions or gains will be subject to U.S. federal taxation.

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Taxation of United States Investors in the Company. Special rules apply to
the taxation of a "passive foreign investment company". A PFIC is a foreign
corporation (i) 75% or more of whose income is passive or (ii) 50% or more of
whose assets produce or are held to produce passive income. The Company believes
that it has not been and will not become a PFIC. In particular, the Company
expects to earn, through Globalstar, sufficient active business income to avoid
PFIC status. However, Globalstar may earn passive income such as interest on
working capital and royalties on certain intangibles. Furthermore, the extent
and timing of Globalstar's active business income cannot be predicted with
certainty.

If the Company is or were to become a PFIC, a U.S. shareholder would be
subject to a tax-deferral charge on gains on a sale of shares of Common Stock
and on certain "excess distributions" received from the Company, and such gains
and excess distributions will be taxable at ordinary income rates, unless the
shareholder makes the QEF election described below. The amount of the charges
will depend, in part, on the period during which the shareholders held their
shares of Common Stock.

If a shareholder makes the qualified electing fund ("QEF") election
provided in Section 1295 of the Code, the shareholder will be required to
include its pro rata share of the Company's ordinary earnings and net capital
gain in income for tax purposes for each taxable year (regardless of when or
whether cash attributable to such income is actually distributed to such
shareholder by the Company). If the shareholder makes a QEF election, the
tax-deferral charge and ordinary income rules described in the preceding
paragraph will not apply. Actual distributions out of amounts so included in
income will not be taxable to the shareholder. A shareholder's tax basis in its
shares of Common Stock will be increased by the amount so included and decreased
by the amount of nontaxable distributions.

The QEF election is effective only if certain required information is made
available by the Company to the IRS. In the event the Company is characterized
as a PFIC for federal income tax purposes, the Company will undertake to comply
with the IRS information requirements necessary to permit shareholders to make
the election, and provide to each U.S. shareholder information needed for the
determination of such shareholder's pro rata share of the Company's ordinary
earnings and net capital gain.

BERMUDA TAX CONSIDERATIONS

At the present time, there is no Bermuda income or profits tax, withholding
tax, capital gains tax, capital transfer tax, estate duty or inheritance tax
payable by a Bermuda company or its shareholders, other than shareholders
ordinarily resident in Bermuda. The Company has obtained an assurance from the
Minister of Finance under the Exempted Undertakings Tax Protection Act 1966
that, in the event that any legislation is enacted in Bermuda imposing any tax
computed on profits or income, or computed on any capital asset, gain or
appreciation, or any tax in the nature of estate duty or inheritance tax, such
tax shall not until March 28, 2016 be applicable to the Company or to any of its
operations or to the shares, debentures or other obligations of the Company
except insofar as such tax applies to persons ordinarily resident in Bermuda and
holding such shares, debentures or other obligations of the Company or any land
leased or let to the Company. Therefore, there will be no Bermuda tax
consequences with respect to the sale or exchange of the Common Stock or with
respect to distributions in respect of the Common Stock. As an exempted company,
the Company is liable to pay in Bermuda a registration fee based upon its
authorized share capital and the premium on its issued shares.

TAX CONSIDERATIONS IN OTHER JURISDICTIONS

Based upon its review of current tax laws, including applicable
international tax treaties of certain countries that Globalstar believes to be
among its significant potential markets, the Company expects that a significant
portion of its worldwide income will not be subject to tax by the United States,
Bermuda or by the countries from which it derives its income. However, to the
extent that Globalstar bears a higher foreign tax because any particular partner
(including GTL) is not subject to United States tax on its share of Globalstar's
foreign income, the additional foreign tax will be specifically allocated to
such partner and will reduce amounts distributed to such partner by Globalstar.

6
<PAGE> 10

SELLING SHAREHOLDERS

The following table sets forth as of May 6, 1997, the respective number of
shares of Common Stock to be beneficially owned by each of Lockheed Martin
Tactical Systems, Inc., Qualcomm China, Inc. (f/k/a Qualcomm Limited Partner,
Inc.) and DASA Globalstar Limited Partner, Inc. (collectively, the "Selling
Shareholders") prior to the Offering, all of which Shares are expected to be
sold in connection with the Offering, together with the number of shares to be
beneficially owned after the Offering. See "Plan of Distribution."

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE OWNED AFTER THE
OFFERING SHARES TO BE OFFERING
------------------- SOLD IN THE -------------------
NAME NUMBER PERCENT OFFERING NUMBER PERCENT
- -------------------------------------------- --------- ------- --------------- --------- -------
<S> <C> <C> <C> <C> <C>
Lockheed Martin Tactical
Systems, Inc.............................. 2,511,190 16.4% 2,511,190 0 0%
Qualcomm China, Inc......................... 367,131 2.4 367,131 0 0
DASA Globalstar Limited
Partner, Inc.............................. 169,475 1.1 169,475 0 0
-------- ---- --------- --------- ----
Total....................................... 3,047,796 19.9% 3,047,796 0 0%
======== ==== ========= ========= ====
</TABLE>

GTL has registered the Shares by means of the Registration Statement
pursuant to Rule 415 of the Securities Act of which this Prospectus forms a
part, in fulfillment of its obligations under the Warrant Acceleration and
Registration Rights Agreement. GTL has agreed to cause the Registration
Statement of which this Prospectus forms a part to be declared and to remain
effective until the earlier of the date on which all the Shares have been sold
or December 31, 1997, subject to extension under certain circumstances. The
information concerning the Selling Shareholders may change from time to time. If
required, such changes will be set forth in Prospectus Supplements.

The following summarizes the material relationships between the Selling
Shareholders and GTL and its affiliates.

Qualcomm Agreement. Globalstar and Qualcomm have entered into an agreement
providing for the design, development, manufacture, installation, testing and
maintenance by Qualcomm of four gateways, two ground operations control centers
and 100 pre-production Globalstar Phones (the "Qualcomm Segment"). A portion of
the GOCC is being developed and manufactured by Globalstar. The contract is a
cost-plus-fee contract that provides for payment to Qualcomm of a 12% fee, along
with reimbursement for costs incurred in performing such contract, such as
labor, material, travel, license fees, royalties and general administrative
expenses. The contract also includes a cost sharing arrangement for certain
technologies being developed by Qualcomm.

Except for the intellectual property contained in certain software relating
to the public switched networks and the GOCCs (excluding any software or
technical data contained in Qualcomm's CDMA technology) which will be owned by
Globalstar, Qualcomm retains all intellectual property in the Qualcomm Segment.
However, Qualcomm has granted Globalstar an exclusive license to use its CDMA
technology for MSS commercial applications.

Globalstar has granted to Qualcomm an irrevocable, non-exclusive, worldwide
perpetual license to intellectual property owned by Globalstar in the Qualcomm
Segment and developed pursuant to the Qualcomm agreement. Qualcomm may, pursuant
to such grant, use the intellectual property for applications other than the
Globalstar System provided that Qualcomm may not for a period of three years
after its withdrawal as a strategic partner or prior to the third anniversary of
the Full Constellation Date, whichever is earlier, engage in any business
activity that would be in competition with the Globalstar System. The grant of
intellectual property to Qualcomm described above is generally royalty free.
Under certain specified circumstances, however, Qualcomm will be required to pay
a 3% royalty fee on such intellectual property.

Qualcomm has agreed to grant at least one vendor a nonexclusive worldwide
license to use Qualcomm's intellectual property to manufacture and sell gateways
to Globalstar's service providers. The foregoing licenses

7
<PAGE> 11

will be granted by Qualcomm to one or more such vendors on reasonable terms and
conditions, which will in any event not provide for royalty fees in excess of 7%
of a gateway's sales price (not including the approximately $400,000 in
recoupment expenses payable to Globalstar). Qualcomm has granted a license to
manufacture Globalstar Phones to each of Ericsson and TELITAL and has also
agreed to grant similar licenses to at least one additional qualified
manufacturer to enable it to manufacture and sell the Globalstar Phones to
service providers. On March 23, 1994, a letter agreement was entered into among
Qualcomm, Globalstar and Hyundai pursuant to which Hyundai may elect to become a
licensee authorized to manufacture and sell Globalstar Phones to service
providers. Should Hyundai so elect, it would, for a five-year period following
Globalstar's In-Service Date, be the exclusive licensee authorized to
manufacture and sell such units in South and North Korea.

Globalstar will receive a payment of approximately $400,000 on each
installed gateway sold to a Globalstar service provider. Globalstar will also
receive up to $10 on each Globalstar Phone, which will be payable until
Globalstar's funding of that design has been recovered.

The agreement provides for liquidated damages to Globalstar in the event
Qualcomm fails to supply the Qualcomm Segment at the times specified in the
contract. Liquidated damages of approximately $29,000 are payable by Qualcomm
for each day of delay, subject to an overall cap of approximately $11 million.
Such liquidated damages are Globalstar's exclusive remedies in the face of any
delay by Qualcomm in the delivery of the Qualcomm Segment or for any other
events of default specified in the agreement. Qualcomm's obligation to license
the intellectual property necessary to manufacture gateways and Globalstar
Phones to Globalstar or a third-party manufacturer will continue even upon a
default or breach by Qualcomm under the agreement. Termination by Globalstar of
this agreement will result in termination fees, which may be substantial.

Gateway Program. Globalstar, Qualcomm and the service provider partners
intend to jointly finance the procurement of 37 gateways for resale to service
providers, thereby accelerating the deployment of gateways around the world
prior to the In-Service Date. Globalstar has agreed to finance approximately $80
million of the cost of this program, which cost it expects to recover from such
resales.

Qualcomm Support Agreement. A support agreement was entered into among
Qualcomm, Loral and Globalstar pursuant to which Qualcomm agreed to (i) assist
Globalstar and SS/L with Globalstar's system design, (ii) support Globalstar and
Loral with respect to various regulatory matters, including the FCC application
and (iii) assist Globalstar and Loral in their marketing efforts with respect to
Globalstar. As compensation for its efforts, Qualcomm would be paid an amount
equal to the costs incurred in rendering such support and assistance.

Contract for the Development of Satellite Operations Control
Centers. Globalstar has entered into an agreement with a subsidiary of Lockheed
Martin for the development and delivery of two SOCCs and 33 Telemetry and
Command units for the Globalstar System. This contract is a cost-plus-fee
contract with a maximum price of $25.1 million which includes a fee of 12% under
the contract, 6% of which would be payable at the time the costs are incurred
with the remainder payable upon achievement of certain milestones. Globalstar
will own any intellectual property produced under the contract.

Contract for S-Band Beam Forming Network Engineering Model. Globalstar
entered into an agreement with a subsidiary of Lockheed Martin for an S-Band
Beam Forming Network Engineering Model. The contract is a firm fixed-price
contract for approximately $463,000.

OmniTRACS Services Agreement. Globalstar has granted Qualcomm the
worldwide exclusive right to utilize the Globalstar System to provide
OmniTRACS-like services, including certain data-messaging and
position-determination services offered by Qualcomm, primarily to fleets of
motor vehicles and rail cars and/or vessels and supervisory control and data
acquisition services. Qualcomm will utilize the Globalstar System in particular
territories to provide its OmniTRACS-like services if the Globalstar service
provider in such region or country offers pricing that is the most favorable
rate charged by it for a comparable service and that is at least as favorable as
the pricing then charged to Qualcomm for geostationary satellite capacity in the
United States. In the event Qualcomm and the service provider fail to reach an
agreement with respect to

8
<PAGE> 12

such access, Globalstar has agreed to provide Qualcomm with access to the
Globalstar System at Globalstar's most favorable rates. To the extent consistent
with Qualcomm's prior commitments, Qualcomm has also agreed to offer each
Globalstar service provider certain rights of first refusal to participate with
Qualcomm in the provision of OmniTRACS-like services using the Globalstar System
in the service provider's territory.

Office Leases. Globalstar currently leases office space from Lockheed
Martin at a cost of approximately $72,000 per month. This space is leased
pursuant to an agreement that expires in August 2000 (with an option to extend
for two additional five year periods).

Conflicts of Interest. The Globalstar partnership agreement provides that
Globalstar cannot enter into any agreement involving amounts in excess of
$1,000,000 with any partner, any strategic partner (including any direct or
indirect corporate parent of such partner or strategic partner), any Alliance
Partner or any of their respective affiliates unless the terms and conditions of
such transaction have been first approved by a vote of the disinterested
partners.

Guaranty Fee and Warrants. On December 15, 1995, Globalstar entered into
the Credit Agreement providing for a $250 million credit facility, which was
guaranteed by certain Globalstar strategic partners. In connection with such
guaranties and a guaranty support provided by Loral, GTL issued to these parties
Guaranty Warrants to purchase 4,185,318 shares of GTL common stock. In
connection with the issuance of the Guaranty Warrants, GTL received (i) rights
to acquire 4,185,318 ordinary partnership interests in Globalstar and (ii)
rights to purchase an additional 1,131,168 ordinary partnership interests, on
terms and conditions generally similar to those of the Guaranty Warrants.

Globalstar Managing Partner's Allocation and Distribution. Commencing on
the In-Service Date, Globalstar will make distributions to LQSS equal to 2.5% of
Globalstar's revenues up to $500 million plus 3.5% of revenues in excess of $500
million. Loral and Qualcomm ultimately will receive 80% and 20% of such
distribution, respectively. Should Globalstar incur a net loss in any year
following commencement of operations, the distribution for that year will be
reduced by 50% and Globalstar will be reimbursed for managing partner's
allocations, if any, made in any prior quarter of such year, sufficient to
reduce the

9
<PAGE> 13

managing partner's allocation for such year by 50%. Any managing partner's
allocation may be deferred (with interest at 4% per annum) in any quarter in
which Globalstar would report negative cash flow from operations if the managing
partner's allocation were made.

LQSS has a right to a preferred allocation of gross operating revenue until
such allocated revenue cumulatively equals LQSS's distributions payable (whether
or not deferred for a shortfall in cash flow from operations). To the extent
that distributions exceed such allocated profit, they will be charged against
LQSS's capital account and will not be allocated among the Globalstar partners
as a Globalstar expense.

Lockheed Martin's Relationship with Loral. As a result of a merger between
Loral Corporation and a subsidiary of Lockheed Martin, Lockheed Martin holds
Series A Preferred Stock of Loral representing an approximate 17% fully-diluted
equity interest in Loral. Loral and an affiliate of Lockheed Martin are parties
to a Shareholders Agreement which, among other matters, regulates the voting
rights of Lockheed Martin and its affiliates and limits their ability to acquire
additional voting securities or assets of, or solicit proxies or make a public
announcement of a proposal of any extraordinary transaction with respect to
Loral. The Shareholders Agreement also provides that under certain circumstances
and subject to certain conditions, Lockheed Martin and its affiliates may
require Loral to register under the Securities Act any Loral securities held by
them.

Agreements with DASA. Daimler-Benz Aerospace A.G. ("DASA") is an affiliate
of DASA Globalstar Limited Partner, Inc. In March 1997, Loral purchased DASA's
12 1/4% interest in SS/L in exchange for $93.5 million in cash. Pursuant to a
Stockholders Agreement among Loral, SS/L, DASA, Aerospatiale SNI
("Aerospatiale"), Alcatel Espace ("Alcatel") and Finmeccanica S.p.A.
("Finmeccanica"), DASA was entitled to appoint one representative to the SS/L
Board of Directors, and DASA, when acting together with at least one other of
Aerospatiale, Alcatel or Finmeccanica, had certain limited veto rights regarding
SS/L's corporate decisions. In addition, DASA, was a party to an Operational
Agreement with SS/L, Aerospatiale, Alcatel and Finmeccanica, which regulates
certain matters relating to the submission of bids for space program contracts
and the subsequent allocation of contracting duties among the parties. Due to
the consummation of Loral's purchase of DASA's interest in SS/L, DASA's rights
under the Stockholders Agreement and Operational Agreement have terminated.
Loral and DASA have formed a partnership to act as the exclusive Globalstar
service provider in Brazil.

PLAN OF DISTRIBUTION

The Shares offered hereby may be sold from time to time in one or more
transactions at fixed prices, at prevailing market prices at the time of sale,
at varying prices determined at the time of sale or at negotiated prices. Such
prices will be determined by the Selling Shareholders or by agreement between
the Selling Shareholders and underwriters and dealers who may receive fees or
commissions in connection therewith. The sale of the Shares may be effected in
transactions (which may involve crosses or block transactions) (i) on any
national securities exchange or quotation service on which the Common Stock may
be listed or quoted at the time of sale, (ii) in the over-the-counter market,
(iii) in transactions otherwise than on such exchanges or in the
over-the-counter market or (iv) through the writing of options. At the time a
particular offering of Shares is made, a Prospectus Supplement, if required,
will be distributed which will set forth the aggregate amount and type of Shares
being offered and the terms of the offering, including the name or names of any
underwriters, broker-dealers or agents, any discounts, commissions and other
terms constituting compensation

10
<PAGE> 14

from the Selling Shareholders and any discounts, commissions or concessions
allowed or reallowed or paid to broker-dealers.

The outstanding Common Stock currently trades, and the Common Stock
representing the Shares will trade, on the NNM under the symbol GSTRF.

To comply with the securities laws of certain jurisdictions, if applicable,
the Shares will be offered or sold in such jurisdictions only through registered
or licensed brokers or dealers. In addition, in certain jurisdictions the Shares
may not be offered or sold (unless they have been registered or qualified for
sale) in such jurisdictions or an exemption from registration or qualification
is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Common Stock may not simultaneously engage in
market-making activities with respect to such securities for a period of two
business days prior to the commencement of such distribution. In addition to and
without limiting the foregoing, each Selling Shareholder and any other person
participating in a distribution will be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-6 and 10b-7, which provisions may limit the timing of
purchases and sales of any of the Shares by the Selling Shareholders or any such
other person. All of the foregoing may affect the marketability of the Common
Stock and brokers' and dealers' ability to engage in market-making activities
with respect to these securities.

Pursuant to the Warrant Acceleration and Registration Rights Agreement with
respect to the Shares, all expenses of the registration of the Shares will be
paid by Globalstar, including, without limitation, Commission filing fees and
expenses of compliance with state securities or "blue sky" laws, provided,
however, that the Selling Shareholders will pay all underwriting discounts,
selling commissions and related fees, if any. The Selling Shareholders and the
Company have agreed to indemnify each other against certain liabilities,
including certain liabilities arising under the Securities Act, or will be
entitled to contribution in connection therewith.

This offering will terminate upon the earlier of (i) the date on which all
Shares have been disposed of by the Selling Shareholders or (ii) December 31,
1997 (subject to extension under certain circumstances).

LEGAL OPINIONS

Certain United States tax matters described under "Taxation" have been
passed upon for GTL by Willkie Farr & Gallagher, New York, New York, general
counsel to GTL. Certain Bermuda tax matters described under "Taxation" and the
validity of the Shares offered hereby have been passed upon for GTL by Appleby,
Spurling & Kempe, Hamilton, Bermuda. As of May 6, 1997, partners and counsel in
Willkie Farr & Gallagher beneficially owned 25,000 shares of the Common Stock.
Mr. Robert B. Hodes is of counsel to the law firm of Willkie Farr & Gallagher,
and a Director of GTL and Loral and a member of the Audit and Executive
Committees of the Boards of Directors of both GTL and Loral.

EXPERTS

The financial statements of GTL and Globalstar incorporated in this
Prospectus by reference from GTL's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996 have been audited by Deloitte & Touche LLP as
stated in their reports, which are incorporated herein by reference, and have
been so incorporated in reliance on the reports of said firm given upon their
authority as experts in auditing and accounting.

11
<PAGE> 15

GLOSSARY OF TERMS

CDMA -- see Code Division Multiple Access.

CPEOs -- GTL's outstanding 6 1/2% Convertible Preferred Equivalent Obligations
due 2006.

CODE -- the Internal Revenue Code of 1986, as amended.

CODE DIVISION MULTIPLE ACCESS (CDMA) -- a digital transmission system that
superimposes audio signals or data onto a specified coded address waveform. CDMA
allows a large number of wireless users simultaneously to access a single radio
frequency band without interference. As each wireless telephone gains access,
its gateway assigns it a unique sequence of frequency shifts that serve as a
code to distinguish that particular telephone call from others on the air.

COMMISSION -- the Securities and Exchange Commission.

COMMON STOCK -- common stock, par value $1.00 per share, of GTL.

CREDIT AGREEMENT -- Agreement by and between Globalstar and a bank syndicate for
a $250 million credit facility expiring December 15, 2000.

ERICSSON -- L.M. Ericsson, parent of Orbitel.

EXCHANGE ACT -- the Securities and Exchange Act of 1934, as amended.

FCC -- see Federal Communications Commission.

FEDERAL COMMUNICATIONS COMMISSION (FCC) -- regulatory agency established by the
Communications Act, charged with regulating all electrical and radio
communications within the United States.

FULL CONSTELLATION DATE -- the date on which Globalstar commences full
operations via a 48-satellite constellation, which is expected to occur by the
end of 1998.

GOCC -- see Ground Operations Control Center.

GTL -- Globalstar Telecommunications Limited, a Bermuda company quoted on the
NNM, which acts as one of two general partners of Globalstar.

GENERAL PARTNERS -- GTL and LQSS.

GLOBALSTAR(TM) -- Globalstar, L.P., a Delaware limited partnership that is
building and preparing to launch an MSS system comprised of 56 low-earth orbit
satellites designed to provide worldwide wireless telephony and other services.
"Globalstar" is a trademark of Globalstar, L.P.

GLOBALSTAR PHONES -- hand-held and vehicle-mounted units similar to today's
cellular telephones and fixed telephones similar to ordinary wireline telephones
through which Globalstar users will make and receive calls.

GLOBALSTAR SERVICE -- the transmission and/or reception of voice, data,
messaging, facsimile, paging, position, location or other information through
the Globalstar System using the service providers' gateways.

GLOBALSTAR SYSTEM -- a low-earth orbit satellite-based telecommunications system
proposed by Globalstar to operate in the MSS Above 1 GHz Service frequencies.

GROUND OPERATIONS CONTROL CENTER (GOCC) -- regional Globalstar
telecommunications control centers designed to communicate and coordinate
information on resource availability, time of day, frequency assignments, and
connectivity and sequence schedules to the pathways and SOCCs which comprise the
Globalstar ground segment.

GROUND SEGMENT -- the ground-based portion of the Globalstar System. The ground
segment consists of the SOCCs, the GOCCs, the gateways, telemetry and command
units located at selected gateways, and the Globalstar Data Network which
interconnects all of the ground-based elements.

GUARANTY WARRANTS -- Warrants to purchase 4,185,318 shares of Common Stock, at a
price of $26.50 per share, issued by GTL to DASA, Loral, Lockheed Martin,
Qualcomm and SS/L.

G-1
<PAGE> 16

IN-SERVICE DATE -- the date on which Globalstar expects to commence initial
commercial operations via a 32-satellite constellation.

LQSS -- see Loral/Qualcomm Satellite Services, L.P.

LOCKHEED MARTIN -- Lockheed Martin Corporation, a Maryland corporation, and its
subsidiaries and affiliates.

LORAL -- Loral Space & Communications Ltd., a Bermuda company. Loral is a
principal founder of Globalstar and, through a subsidiary, its managing partner.

LORAL/QUALCOMM SATELLITE SERVICES, L.P. (LQSS) -- a Delaware limited partnership
which is the managing general partner of Globalstar.

MSS -- see Mobile Satellite Services.

MOBILE SATELLITE SERVICES (MSS) -- services transmitted via satellites to
provide mobile telephone, fixed telephone, paging, messaging, facsimile, data
and position location services directly to users.

NNM -- Nasdaq National Market.

OMNITRACS -- an international satellite-based truck fleet and position location
service, owned and operated by Qualcomm.

PFIC -- a passive foreign investment company within the meaning of the Code.

PARTNERSHIP WARRANTS -- the rights to purchase 5,316,486 Globalstar partnership
interests, at a price of $26.50 each, upon the exercise of the Guaranty Warrants
and of the Rights.

PREFERRED PARTNERSHIP INTERESTS -- Interests in Globalstar acquired by GTL in
connection with its issuance of CPEOs.

QUALCOMM -- QUALCOMM Incorporated, a Delaware corporation, and its subsidiaries
and affiliates. Qualcomm, a leader in CDMA technology, has successfully
implemented CDMA in multi-user cellular communications applications and owns and
operates OmniTRACS, an international satellite-based truck fleet and position
location service.

SOCCs -- see Satellite Operations Control Center.

SS/L -- Space Systems/Loral, Inc., a Delaware corporation, in which Loral holds
a 75.5% equity interest, is a leading manufacturer of commercial communications
satellites. Loral expects shortly to increase this interest to 100%.

SATELLITE OPERATIONS CONTROL CENTER (SOCC) -- monitors and controls the
satellite after it is launched. There are no antennas or radio frequency
equipment located at the SOCC. Radio frequency links to and from the satellite
are via telemetry and command units that are physically located at selected
gateways. The SOCC coordinates with other elements of the Globalstar ground
segments.

SECURITIES ACT -- the Securities Act of 1933, as amended.

SERVICE (OR GLOBALSTAR SERVICE) -- the transmission and reception of voice,
data, messaging, paging, position, location or other information through the
Globalstar System using a service provider's gateway(s).

SERVICE PROVIDER -- Globalstar's partners and other entities that will act as
local intermediaries between Globalstar and the subscribers. Service providers
will build and own the gateways, obtain the necessary regulatory approvals and
market and distribute Globalstar service in their respective markets.

SPACE SEGMENT -- the space-based portion of the Globalstar System.

STRATEGIC PARTNER -- Globalstar's direct and indirect partners which will play
key roles in the design, construction, operation and marketing of the Globalstar
System.

G-2
<PAGE> 17

TELITAL -- TELITAL S.r.L., a private company organized under the laws of Italy,
which designs, develops and produces telephony products for European and
international markets.

WARRANT ACCELERATION AND REGISTRATION RIGHTS AGREEMENT -- the agreement by and
among GTL, LQSS and the Warrant Holders pursuant to which GTL and LQSS agreed to
accelerate the vesting and exercisability of the Guaranty Warrants.

References to corporate entities include their subsidiaries unless
otherwise specified.

G-3
<PAGE> 18

======================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING
COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY GTL, THE
SELLING SHAREHOLDERS OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, THE
SHARES IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF GTL OR
GLOBALSTAR SINCE THE DATE HEREOF.

------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
<S> <C>
Available Information................. i
Incorporation by Reference............ i
Forward-looking Statements............ ii
Recent Developments................... 1
Background of the Offering............ 2
Risk Factors.......................... 3
Taxation.............................. 5
Selling Shareholders.................. 7
Plan of Distribution.................. 10
Legal Opinions........................ 11
Experts............................... 11
Glossary of Terms..................... G-1
</TABLE>

======================================================

GLOBALSTAR
TELECOMMUNICATIONS LIMITED

3,047,796 Shares
of Common Stock

---------------------------

PROSPECTUS
May 6, 1997
---------------------------
======================================================