View:
Download DOC
Download PDF
Download XLS

QuickLinks -- Click here to rapidly navigate through this document

As filed with the Securities and Exchange Commission on October 17, 2006

Registration No. 333-135809

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

AMENDMENT NO. 4
to
FORM S-1

REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933

GLOBALSTAR, INC.
(Exact name of Registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)		 4899
(Primary Standard Industrial
Classification Code Number)		 41-2116508
(I.R.S. Employer
Identification Number)

461 South Milpitas Blvd.
Milpitas, California 95035
Telephone (408) 933-4000

(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)

Fuad Ahmad
Vice President and Chief Financial Officer
Globalstar, Inc.
461 South Milpitas Blvd.
Milpitas, California 95035
(408) 933-4000
(Name, address, including zip code, and telephone number, including area code, of agent for service)

With copies to:

Gerald S. Greenberg
Taft, Stettinius & Hollister LLP
425 Walnut Street, Suite 1800
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205		 Edward P. Tolley III
Kenneth B. Wallach
Simpson Thacher & Bartlett LLP
425 Lexington Avenue
New York, New York 10017
Telephone: (212) 455-2000
Facsimile: (212) 455-2502

            Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

            If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:  o

            If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o

            If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  o

            If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:  o

            If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.  o

            The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

PROSPECTUS   SUBJECT TO COMPLETION. DATED OCTOBER 17, 2006.    

6,500,000 Shares

GRAPHIC

GLOBALSTAR, INC.
Common Stock

          This is Globalstar, Inc.'s initial public offering. We are offering 6,500,000 shares of common stock. We expect the initial public offering price of our common stock to be between $16.00 and $18.00 per share.

          Prior to this offering, there has been no public market for our common stock. We have filed an application for our common stock to be listed on the NASDAQ Global Market under the symbol "GSAT."

          Investing in our common stock involves risks. See "Risk Factors" beginning on page 13.

 
   Per Share
   Total
Public Offering Price   $            $                
Underwriting Discounts and Commissions   $            $                
Proceeds to us   $            $                

          Delivery of the shares of common stock will be made on or about                        , 2006.

          Neither the Securities and Exchange Commission, any state securities commission, nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

          We have granted the underwriters an option to purchase a maximum of 975,000 additional shares of our common stock to cover over-allotments of shares, exercisable at any time until 30 days after the date of this prospectus.

Wachovia Securities   JPMorgan

Jefferies & Company

The date of this prospectus is                        , 2006.

 

 

Northern Hemisphere Globaistar Ground Station Primary Globaistar Service Area Extended Globaistar Service Area (Customers may have single satellite coverage and experience a weaker signal) Area (Customers may Fringe Globaistar Service experience weak or sporadic signals) Anticipated Future Coverage Area (No existing service. See “Business” and “Risk Factors”) Southern Hemisphere Bosque Alegre, Argentina Avezzano, Italy Florida, USA Dubbo, Australia Yeo Ju, Korea Alaska, USA Mount Isa, Australia San Martin, Mexico Cabo Rojo, Puerto Rico Meekatharra, Australia Lurin, Peru Aussaguel, France Manaus, Brazil Khabarovsk, Russia Edo Miranda, Venezuela Presideflte Prudente, Brazil Moscow, Russia Ontario, Canada Petrolina, Brazil Novosibirsk, Russia Alberta, Canada Texas, USA Beijing, China Ogulbey, Turkey Managua, Nicaragua Coverage may vary. Map denotes coverage for voice and Direct Dial-Up data calls only.

 


TABLE OF CONTENTS

 
   Page
Prospectus Summary   1
Risk Factors   13
Special Note Regarding Forward-Looking Statements   31
Use of Proceeds   32
Dividend Policy and Restrictions   33
Capitalization   34
Dilution   36
Selected Historical Consolidated Financial Data   38
Management's Discussion and Analysis of Financial Condition and Results of Operations   42
Business   73
Company History   94
Regulation   96
Management   100
Principal Stockholders   109
Certain Relationships and Related Party Transactions   110
Description of Capital Stock   115
Shares Eligible for Future Sale   119
Underwriting   121
Legal Matters   123
Experts   123
Changes In and Disagreements with Accountants on Accounting and Financial Disclosures   123
Where You Can Find Additional Information   123
Index to Consolidated Financial Statements   F-1

          This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy, any securities offered hereby in any jurisdiction where, or to any person to whom, it is unlawful to make such offer or solicitation. The information contained in this prospectus speaks only as of the date of this prospectus unless the information specifically indicates that another date applies. No dealer, salesperson or other person has been authorized to give any information or to make any representations other than those contained in this prospectus in connection with the offer contained herein and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither the delivery of this prospectus nor any sales made hereunder shall under any circumstances create an implication that there has been no change in our affairs or that of our subsidiaries since the date hereof.

i


PROSPECTUS SUMMARY

          This summary highlights information contained elsewhere in this prospectus that we consider important to investors. You should read the entire prospectus carefully, including the "Risk Factors" section and our consolidated financial statements and the related notes appearing at the end of this prospectus, before making an investment decision.

          "We," "us," "our," "successor," and the "company" refer to Globalstar, Inc., the issuer of the common stock offered by this prospectus, which was previously named New Operating Globalstar LLC and Globalstar LLC, and its subsidiaries. "Old Globalstar" and "Predecessor" refer to Globalstar, L.P., a Delaware limited partnership that developed and operated our business from its formation in 1993 until our acquisition of its business and assets on December 5, 2003.


Our Business

          We are a leading provider of mobile voice and data communications services via satellite, with an estimated 10.2% share of global subscribers in the mobile satellite services industry in 2005. By providing wireless services where terrestrial wireless and wireline networks do not, we seek to address our customers' increasing desire for connectivity and reliable service at all times and locations. Using 43 in-orbit satellites and 25 ground stations, which we refer to as gateways, we offer voice and data communications services in over 120 countries. Sixteen of these gateways are operated by unaffiliated companies, which we refer to as independent gateway operators and which purchase communications services from us on a wholesale basis for resale to their customers.

          We currently provide the following telecommunications services:

          We hold licenses to operate a wireless communications network via satellite over 27.85 MHz, comprised of two blocks of contiguous global radio frequencies. We refer to our licensed radio frequencies as our "spectrum." We are also licensed by the U.S. Federal Communications Commission, or the FCC, to provide an ancillary terrestrial component, known as ATC services, in combination with our existing communication services.

          Our services are available only with equipment designed to work on our network. The equipment we offer to our customers consists principally of:


          At June 30, 2006, we served approximately 236,500 subscribers. We added approximately 54,000 and 41,000 net subscribers in the year ended December 31, 2005 and in the six months ended June 30, 2006, respectively. We count "subscribers" based on the number of devices that are subject to agreements which entitle them to use our voice or data communication services rather than the number of persons or entities who own or lease those devices.

1

          Our satellite constellation was launched in the late 1990s. We intend to launch eight spare satellites in 2007 to supplement those currently in orbit. We believe that, as supplemented, our constellation will continue to provide commercially acceptable service at least into 2010.

          We are currently in the process of designing and procuring our second-generation satellite constellation, which we expect to deploy beginning in 2009 to extend the life of our network until approximately 2025. See "—Recent Developments."

          The following table shows our revenue, net income (including for the first six months of 2006 an income tax benefit of $21.4 million related to our election to be taxed as a C corporation), average monthly revenue per user (measured by the number of devices in service) for retail subscribers (retail subscribers exclude those we serve through independent gateway operators and Simplex service subscribers), cost per gross addition (our cost of obtaining a new subscriber) and average monthly customer turnover ("churn rate") for the periods indicated. See Notes 5, 6, 7 and 9 to "—Summary Historical Consolidated Financial and Other Data."

 
   Year Ended
December 31,
   Six Months
Ended June 30,
 
   2004
   2005
   2005
   2006
 
    
    
   (Unaudited)
Revenue   $ 84.4 million   $ 127.1 million   $ 50.3 million   $ 68.7 million
Net income   $ 0.4 million   $ 18.7 million   $ 2.9 million   $ 21.7 million
Average monthly revenue per user   $ 67.93   $ 68.10   $ 66.88   $ 57.52
Cost per gross addition   $ 230   $ 248   $ 334   $ 248
Average monthly churn rate percentage     1.51     1.27     1.08     1.09

          We and Old Globalstar incurred net losses aggregating $266.4 million for the year December 31, 2003. At August 16, 2006, our outstanding indebtedness was $18.7 million, consisting principally of revolving credit loans under our credit agreement. If we had borrowed the remainder of the committed funds under our credit agreement, our indebtedness would have been $151.4 million. Upon completion of this offering, James Monroe III, our chairman and chief executive officer, will be the beneficial owner of approximately 58% of our outstanding common stock and will be able to control the election of all of the members of our board of directors and the vote on substantially all other matters.


Industry

          We compete in the mobile satellite services sector of the global communications industry. Mobile satellite services operators provide voice and data services using a network of satellites and ground facilities. Mobile satellite services are usually complementary to, and interconnected with, other forms of terrestrial communications services and infrastructure and are intended to respond to users' desires for connectivity at all times and locations. Customers typically use satellite voice and data communications in situations where existing terrestrial wireline and wireless communications networks are impaired or do not exist.

          Over the past two decades, the global mobile satellite services market has experienced significant growth. Communications industry sectors that are relevant to our business include:

2

          We obtained the industry, market and competitive position data throughout this prospectus from our own internal estimates and research as well as from industry and general publications and from research, surveys and studies conducted by third parties, including Gartner, Inc., Northern Sky Research, LLC, Telecom, Media and Finance Associates, Inc., and Frost & Sullivan. Old Globalstar paid Frost & Sullivan $13,400 to prepare its report, which was published in 2002. Copies of these reports are now publicly available from Gartner, Northern Sky Research, Telecom, Media and Finance Associates and Frost & Sullivan upon payment of a nominal fee. Industry publications, studies and surveys generally state that they have been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.


Competitive Strengths

          We believe that our competitive strengths position us to enhance our growth and profitability:

          Key Markets.    We focus on selected underserved public and private sector markets and on customers in these markets that generate high average revenue per user and, therefore, higher revenue growth for our company. Our largest markets are government (including federal, state and local agencies), public safety and disaster relief; recreation and personal; maritime and fishing; and business, financial and insurance.

          Service and Product Offerings.    We believe we are able to retain our current customers and attract new customers because of our pricing plans and the voice quality of our network. We offer pricing plans with rates as low as $0.14 per minute.

          Distribution Network.    Our distribution network, which includes a large network of dealers, agents and resellers, provides broad coverage of our diverse target subscriber base in over 120 countries. We sell our services directly in over 25 countries and on a wholesale basis in over 60 additional countries.

          Existing Global Satellite Communications Network.    Our constellation of low earth orbit satellites and terrestrial gateways has been in commercial operation since 2000 and serves as the backbone of our communications network. We believe our existing network is capable of handling the expected growth in demand for our services.

          Broad, Contiguous Spectrum Holdings.    We believe our broad contiguous spectrum holdings, which can support advanced wireless technologies, give us a competitive advantage for our existing services and will enable us to deploy an ATC network cost effectively.

          ATC Services Capability.    Our current satellites and gateways are capable of supporting ATC services and, therefore, in combination with a terrestrial network, we will be able to provide services where satellite services generally do not function, such as urban areas and inside buildings. We believe this capability will allow us to be among the first to introduce these services, potentially as soon as 2007.

          International Spectrum Licenses.    We have access to our spectrum globally, while most of our competitors only have access to spectrum frequencies regionally. This will afford us economies of scale when introducing ATC and other new mobile communications services.

          Strategic Relationship with QUALCOMM.    We are the only satellite network operator currently using the patented QUALCOMM Incorporated CDMA technology, which permits the dynamic selection of the strongest signal available and produces a higher audio quality than our principal competitor's technology.

          Experienced Management Team.    Our senior management team combines experts in wireless and wireline communications with pioneers in the fields of satellite engineering and satellite operations. Our senior satellite managers have 22 to 43 years of experience in satellite engineering and satellite operations.

3


Our senior communications managers have 12 to 18 years of experience in the telecommunications industry.


Our Growth Strategy

          Our goal is to be the leading global provider of mobile voice and data communications solutions via satellite. We intend to achieve this objective by:

          Continuing Rapid and Profitable Growth of Our Subscriber Base.    We intend to continue to increase our penetration of the growing mobile satellite services market and our market share of key markets by continuing to provide competitive service and product offerings and utilizing our existing distribution network.

          Improving Our Profitability by Consolidating Our International Distribution Chain. Over the past four years, we have acquired five independent gateway operators in strategic geographic regions. We believe that our independent gateway operator consolidation strategy will better position us to market our services directly to multinational customers requiring a global communications provider and will increase our overall profitability by allowing us to sell most of our services directly to subscribers at retail prices.

          Expanding Our Coverage and Upgrading Our Service Offerings.    We intend to continue to increase the quality and availability of our services by selectively adding gateways to our network. We also plan to enhance our network to handle broadband data, faster transmission speeds and new hybrid applications.

          Developing Next-Generation Devices.    In late 2006, we expect to begin selling a broad range of more technologically advanced satellite phones and data products that will be significantly smaller in size, lighter in weight and less expensive than existing mobile satellite services equipment and will be designed to meet our customers' evolving service needs, which we believe will stimulate additional demand for our services.

          Exploring Opportunities to Maximize the Value of Our Spectrum.    We expect the market for wireless applications to continue to grow, and we are exploring relationships with a range of communications and media companies to enable us to be among the first in our industry to utilize our spectrum and ATC license for wireless voice, data and video applications.

          Exploiting Our International Spectrum.    Regulatory authorities outside of the United States are reviewing ATC-like rulings. We believe we are well positioned to advocate for the adoption of rules and regulations that would allow us to use our spectrum for ATC-like services around the world.


Company History

          Our network, originally owned by Old Globalstar, was designed, built and launched in the late 1990s by a technology partnership led by Loral Space and Communications and QUALCOMM. On February 15, 2002, Old Globalstar and three of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. In 2004, Thermo Capital Partners L.L.P., which owns and operates companies in diverse business sectors and is referred to in this prospectus, together with its affiliates, as Thermo, became our principal owner, and we completed the acquisition of the business and assets of Old Globalstar. We refer to this transaction as the "Reorganization."

          We were formed as a Delaware limited liability company in November 2003, and were converted into a Delaware corporation on March 17, 2006. Unless we specifically state otherwise, all information in this prospectus is presented as if we were a corporation throughout the relevant periods.

          Our executive offices are located at 461 South Milpitas Boulevard, Milpitas, California 95035, and our telephone number is (408) 933-4000. We maintain a website at www.globalstar.com. Information contained on this website does not constitute part of this prospectus.

4



Recent Developments

          On August 16, 2006, we entered into an amended and restated credit agreement, which was subsequently amended on September 29, 2006, providing for $150.0 million of borrowings in the form of a five-year term loan and a four-year revolving credit facility. As of June 30, 2006, our outstanding borrowings under the credit agreement were $15.0 million. As of the date of this prospectus, our outstanding borrowings under the credit agreement are approximately $33.3 million. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement." The credit agreement also permits us to incur additional term loans on an equally and ratably secured, pari passu, basis in an aggregate amount of up to $150.0 million. We have not received any commitments for these additional term loans.

          In connection with our credit agreement, we entered into an irrevocable standby stock purchase agreement with Thermo Funding Company LLC, an affiliate of Thermo, pursuant to which Thermo Funding Company agreed to purchase on or before December 31, 2011 up to 12,371,136 shares of our common stock at approximately $16.17 per share, an aggregate purchase price of approximately $200.0 million, under certain circumstances, including as may be necessary to enable us to comply with the minimum liquidity and forward fixed charge coverage ratio tests in our credit agreement, to cure defaults in payment of regularly scheduled principal or interest under our credit agreement and to enable us to meet the milestone tests in our credit agreement for receipt of proceeds from the sale of our common stock. Thermo Funding Company also has the right to purchase this common stock at any time during the term of the standby stock purchase agreement at the same price of approximately $16.17 per share, without regard to any future increase in the trading price of our common stock. Thermo Funding Company secured its obligations under the standby stock purchase agreement by placing in escrow cash and marketable securities with a value equal to 105% of its commitment. Pursuant to the standby stock purchase agreement, on June 30, 2006, Thermo Funding Company purchased 927,840 shares of our common stock for $15.0 million. After the completion of this offering, as required by the pre-emptive rights provisions contained in our certificate of incorporation as in effect prior to this offering, we intend to offer stockholders of the company as of June 15, 2006 who are accredited investors (as defined under the Securities Act) the opportunity to participate in the transaction contemplated by the standby stock purchase agreement with Thermo Funding Company on a pro rata basis on substantially the same terms as Thermo Funding Company. For example, such stockholders would have the right to purchase common stock at any time during the term of the standby stock purchase agreement at the same price of approximately $16.17 per share, without regard to any future increase in the trading price of our common stock. Holders of 2,203,662 shares of our common stock have waived their right to participate in the pre-emptive rights offering. The remaining stockholders eligible to participate in this offering may subscribe to purchase up to 785,328 additional shares of our common stock, for an aggregate purchase price of approximately $12.7 million. See "Certain Relationships and Related Party Transactions—Irrevocable Standby Stock Purchase Agreement."

          Any shares purchased by Thermo pursuant to the irrevocable standby stock purchase agreement or by other stockholders as a result of the pre-emptive rights offering will be subject to the 180-day lock-up period described under "Shares Eligible for Future Sale—Lock-Up Agreements."

          On October 17, 2006, we and Loral agreed to settle the litigation described under "Business—Legal Proceedings." We will pay $0.5 million in cash to Loral to settle the litigation and to acquire from Loral its 25% interest in our 75%-owned subsidiary, Government Services, LLC. We also are in discussions with Loral regarding the purchase of three gateways and associated licenses owned by Loral in Brazil. We currently expect to pay $6.5 million worth of our common stock to purchase the Brazil assets through a legal structure yet to be determined. No agreement has been reached at this time, and we cannot assure you if or when the discussions will be concluded successfully.

5


          On October 5, 2006, we entered into an Authorization to Proceed with Alcatel Alenia Space France pursuant to which we authorized Alcatel to engage in preparation for the construction of our second-generation satellite constellation, including conducting a program readiness review and developing program milestones. We have agreed to pay Alcatel approximately €7.7 million (approximately $9.8 million at €1 = $1.27, which was the exchange rate as of October 5, 2006) for this work.

          The Authorization to Proceed also provides that we and Alcatel will negotiate a contract for Alcatel to construct 48 low earth orbit satellites in two batches (the first of 25 and the second of 23 satellites) for our second-generation satellite constellation and to provide launch-related and operations support services. We do not expect the contract to include launching and insuring the satellites, for which we will contract separately with other providers. We expect the total contract price to be approximately €622.6 million (approximately $791.1 million at the above exchange rate), including approximately €40.2 million (approximately $51.1 million) of launch-related and operations support services relating to the project, plus up to approximately €1.2 million (approximately $1.5 million) per satellite (€27.9 million (approximately $35.4 million) in the aggregate for the entire second batch of 23 satellites) to the extent that we do not elect by July 1, 2008 to accelerate delivery of some or all of the second batch. We expect that payments will begin in the fourth quarter of 2006 and extend into the fourth quarter of 2013 if we do not elect to accelerate delivery. In addition, we expect $190.0 million of the contract payments to be denominated in dollars instead of Euros and, therefore, not subject to currency risk. We also have agreed to negotiate with Alcatel with respect to a possible bonus payment based on factors to be determined in the negotiations. We expect that the approximately €7.7 million to be paid pursuant to the Authorization to Proceed will be credited against payments under the definitive contract when and if we execute it.

          The contract terms described in the preceding paragraph are not binding and are subject to further negotiation. The Authorization to Proceed will terminate on the earlier of the signing of a definitive contract and November 15, 2006. We cannot assure you that we will be able to execute a binding contract with Alcatel on the preceding terms or at all.

6


The Offering

Shares of common stock offered by Globalstar, Inc.   6,500,000 shares, which would constitute approximately 9% of our outstanding common stock after this offering, assuming no exercise of the underwriters' over-allotment option.

Shares of common stock to be outstanding after this offering
 
69,375,494 shares.

Over-allotment option
 
975,000 shares.

Use of proceeds
 
We estimate that the net proceeds from this offering, after deducting underwriting discounts and estimated offering expenses, will be approximately $100.0 million, assuming the shares are offered at $17.00 per share, which is the mid-point of the estimated offering price range set forth on the cover page of this prospectus. Except for funding a $685,848 dividend to Thermo as described in "Dividend Policy and Restrictions," we intend to use the entire net proceeds from this offering to fund in part the procurement and launch of our second-generation satellite constellation and related upgrades to our gateways and other ground facilities. We estimate that the cost to procure and launch these satellites and upgrade these facilities will be approximately $1.0 billion to $1.2 billion. We intend to fund the balance of those costs principally from borrowings of the delayed draw term loans under our credit agreement and cash generated by our business. We intend to use any net proceeds we receive from any shares sold pursuant to the underwriters' over-allotment option for the same purpose. See "Use of Proceeds" and "Dividend Policy and Restrictions."

Dividend policy
 
Other than the distribution to Thermo referred to above and the six-for-one stock split described below, we do not presently anticipate paying any dividends on our common stock. Our credit agreement currently prohibits the payment of other cash dividends.

NASDAQ Global Market symbol
 
"GSAT."

          Unless we specifically state otherwise, all information in this prospectus:

7


Risk Factors

          Investing in our common stock involves substantial risk. You should carefully consider all of the information set forth in this prospectus and, in particular, you should evaluate the specific factors set forth under "Risk Factors" before deciding whether to invest in our common stock.

8


Summary Historical Consolidated Financial and Other Data

          The following table presents our summary historical consolidated financial information and other data for the period from January 1, 2003 through December 4, 2003, the period from December 5, 2003 through December 31, 2003, the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006, and as of December 31, 2003, 2004 and 2005 and June 30, 2006. Our summary historical consolidated financial information for the period from January 1, 2003 to December 4, 2003 (Predecessor), the period from December 5, 2003 to December 31, 2003 (Successor), the years ended December 31, 2004 and 2005 (Successor), and as of December 31, 2004 and 2005, has been derived from our audited consolidated financial statements which are included in this prospectus. Our summary historical consolidated financial information for the six months ended June 30, 2005 and 2006, and as of June 30, 2006, is derived from our unaudited consolidated financial statements which also are included in this prospectus. In the opinion of management, the unaudited financial information includes all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation of this information. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the entire year.

          The column in the following table entitled "Predecessor" contains financial information with respect to the business and operations of Old Globalstar for periods prior to December 5, 2003, the date on which we obtained control of its assets.

          For all periods presented ended on or before December 31, 2005, we and Predecessor operated as a limited partnership or limited liability company and were not subject to U.S. federal and certain state income taxes. Our historical income tax expense consisted only of certain foreign, state and local income taxes. On January 1, 2006, we elected to become subject to U.S. federal and certain state and local income taxes applicable to C corporations. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes" and Note 13 to our consolidated financial statements.

          You should read the summary historical consolidated financial and other data set forth below together with our consolidated financial statements and the related notes, "Selected Historical Consolidated Financial Data" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," all included elsewhere in this prospectus. The summary historical consolidated financial information and other data set forth below are not necessarily indicative of the results of future operations.

9

 
    
   Successor
  
 
   Predecessor
  
 
    
   Year Ended
December 31,
   Six Months Ended
June 30,
  
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
  
 
   2004
   2005
   2005
   2006
  
 
    
    
    
    
   (unaudited)

  
 
   (Dollars in thousands, except for per share data, average monthly
revenue per user, average monthly churn rate and cost per gross addition)

  
Statement of Operations Data:                                      
Revenue:                                      
  Service revenue   $ 40,048   $ 2,387   $ 57,927   $ 81,472   $ 34,965   $ 42,202  
  Subscriber equipment sales(1)     16,295     1,470     26,441     45,675     15,360     26,539  
   
 
 
 
 
 
 
Total revenue     56,343     3,857     84,368     127,147     50,325     68,741  
   
 
 
 
 
 
 
Operating Expenses:                                      
  Cost of services (exclusive of depreciation and amortization shown separately below)     26,629     1,931     25,208     25,432     13,780     13,888  
  Cost of subscriber equipment sales(2)     12,881     635     23,399     38,742     12,216     25,769  
  Marketing, general and administrative     28,814     4,950     32,151     37,945     16,626     20,691  
  Restructuring     5,381     690     5,078     —     —     —  
  Depreciation and amortization     31,473     125     1,959     3,044     1,240     2,698  
  Impairment of assets     211,854     —     114     114     39     —  
   
 
 
 
 
 
 
Total operating expenses     317,032     8,331     87,909     105,277     43,901     63,046  
   
 
 
 
 
 
 
Operating Income (Loss)     (260,689 )   (4,474 )   (3,541 )   21,870     6,424     5,695  
  Interest income     7     7     58     242     62     366  
  Interest expense(3)     (1,513 )   (131 )   (1,382 )   (269 )   (194 )   (108 )
  Other     485     44     921     (622 )   (538 )   (1,760 )
   
 
 
 
 
 
 
Total other income (expense)     (1,021 )   (80 )   (403 )   (649 )   (670 )   (1,502 )
Income (loss) before income taxes     (261,710 )   (4,554 )   (3,944 )   21,221     5,754     4,193  
Income tax expense (benefit)     170     (37 )   (4,314 )   2,502     2,898     (17,459 )
   
 
 
 
 
 
 
Net Income (Loss)   $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
   
 
 
 
 
 
 
Earnings (Loss) Per Share Data(4):                                      
  Earnings (loss) per common share—basic     N/A   $ (0.08 ) $ 0.01   $ 0.30   $ 0.05   $ 0.35  
  Earnings (loss) per common share—diluted     N/A   $ (0.08 ) $ 0.01   $ 0.30   $ 0.05   $ 0.35  
  Weighted average shares—basic     N/A     60,000,000     60,463,917     61,855,668     61,855,668     61,957,906  
  Weighted average shares—diluted     N/A     60,000,000     60,463,917     61,955,874     61,955,874     62,287,618  
  Pro forma (unaudited) earnings (loss) per share—diluted (including all shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares subject to the pre-emptive rights offering)     N/A   $ (0.06 ) $ 0.01   $ 0.25   $ 0.04   $ 0.29  
  Pro forma (unaudited) weighted average shares—diluted (including all shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares subject to the pre-emptive rights offering)     N/A     73,156,464     73,620,381     75,112,338     75,112,338     75,433,830  
Pro Forma C Corporation Data(5) (unaudited):                                      
  Historical income before income taxes     N/A     N/A     N/A   $ 21,221   $ 5,754     N/A  
  Pro forma income tax expense     N/A     N/A     N/A     6,931     3,656     N/A  
                     
 
       
  Pro forma income     N/A     N/A     N/A   $ 14,290   $ 2,098     N/A  
                     
 
       
  Pro forma earnings per share—basic     N/A     N/A     N/A   $ 0.23   $ 0.03     N/A  
  Pro forma earnings per share—diluted     N/A     N/A     N/A   $ 0.23   $ 0.03     N/A  
  Weighted average shares—basic     N/A     N/A     N/A     61,855,668     61,855,668     N/A  
  Weighted average shares—diluted     N/A     N/A     N/A     61,955,874     61,955,874     N/A  
Other Data (for the period) (unaudited):                                
Average monthly revenue per user(6)                                
  Retail   $ 69.66   $ 62.90   $ 67.93   $ 68.10   $ 66.88   $ 57.52  
  Independent gateway operators     12.32     9.72     9.66     10.70     9.09     8.38  
  Simplex     N/A     N/A     9.22     6.64     6.09     4.51  
Number of subscribers     105,571     109,503     141,450     195,968     158,071     236,515  
Average monthly churn rate(7)     0.84 %   1.18 %   1.51 %   1.27 %   1.08 %   1.09 %
EBITDA(8)   $ (228,731 ) $ (4,305 ) $ (661 ) $ 24,292   $ 7,126   $ 6,633  
Capital expenditures   $ 1,058   $ 10   $ 4,015   $ 9,885   $ 2,740   $ 42,480  
Cost per gross addition(9)   $ 262   $ 200   $ 230   $ 248   $ 334   $ 248  

10

 
   As of
December 31,
2003
   As of
December 31,
2004
   As of
December 31,
2005
   As of
June 30,
2006
 
    
    
    
   (unaudited)
 
   (In thousands)
Balance Sheet Data:                        
Cash and cash equivalents   $ 20,026   $ 13,330   $ 20,270   $ 21,074
Total assets   $ 48,214   $ 63,897   $ 113,545   $ 196,232
Long-term debt(10)   $ 3,426,338   $ 3,278   $ 631   $ 15,504
Redeemable common stock   $ —   $ —   $ —   $ 5,198
Ownership equity (deficit)   $ (3,415,195 ) $ 40,421   $ 71,430   $ 109,200
(1)
Includes related party sales of $440 for the year ended December 31, 2005.

(2)
Includes costs of related party sales of $314 for the year ended December 31, 2005.

(3)
Includes related party amounts of $337 (January 1, 2003 - December 4, 2003), $131 (December 5, 2003 - December 31, 2003), $1,324 (year ended December 31, 2004), $176 (year ended December 31, 2005), and $117 and $0 (six months ended June 30, 2005 and 2006, respectively).

(4)
Basic and diluted earnings (loss) per share have been calculated in accordance with the Securities and Exchange Commission rules for initial public offerings which require that the weighted average shares calculation give retroactive effect to any changes in our capital structure. Therefore, weighted average shares for purposes of the basic and diluted earnings per share calculation have been adjusted to reflect the six-for-one stock split we expect to effect immediately prior to this offering. Weighted average shares for purposes of the pro forma diluted per share calculations have also been adjusted to reflect the sale of all of the shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares of common stock pursuant to our pre-emptive rights offering as if such sales occurred on December 5, 2003.

(5)
Prior to January 1, 2006, we and Predecessor were treated as a partnership for federal income tax purposes. A partnership passes through essentially all taxable income and losses to its partners or members and does not pay federal income taxes at the partnership level. Historical income tax expense consists mainly of foreign, state and local income taxes. On January 1, 2006, we elected to be taxed as a C corporation. For comparative purposes, we have included a pro forma provision for income taxes assuming we (or Predecessor) had been taxed as a C corporation for the year ended December 31, 2005 and the six months ended June 30, 2006. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes" and Note 13 to our consolidated financial statements.

(6)
Average monthly revenue per user measures service revenues per month divided by the average number of subscribers during that month. Average monthly revenue per user as so defined may not be similar to average monthly revenue per user as defined by other companies in our industry, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that average monthly revenue per user provides useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high value customers.

(7)
We define churn rate as the aggregate number of our retail subscribers (excluding Simplex customers and customers of the independent gateway operators) who cancel service during a month, divided by the average number of retail subscribers during the month. Others in our industry may calculate churn rate differently. Churn rate is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that churn rate provides useful information concerning customer satisfaction with our services and products.

(8)
EBITDA represents earnings before interest, income taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to GAAP measurements, such as net income, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.

11


The following is a reconciliation of EBITDA to net income (loss):

 
    
   Successor
  
 
   Predecessor
  
 
    
   Year Ended
December 31,
   Six Months
Ended June 30,
  
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
  
 
   2004
   2005
   2005
   2006
  
 
   (In thousands)

  
Net income (loss)   $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
Interest expense (income), net     1,506     124     1,324     27     132     (258 )
Income tax expense (benefit)(a)     170     (37 )   (4,314 )   2,502     2,898     (17,459 )
Depreciation and amortization     31,473     125     1,959     3,044     1,240     2,698  
   
 
 
 
 
 
 
EBITDA   $ (228,731 ) $ (4,305 ) $ (661 ) $ 24,292   $ 7,126   $ 6,633  
   
 
 
 
 
 
 

The following table provides supplemental information as to unusual and other items that are reflected in EBITDA:

 
    
   Successor
 
   Predecessor
 
    
   Year Ended
December 31,
   Six Months
Ended June 30,
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
 
   2004
   2005
   2005
   2006
 
   (In thousands)
Satellite failures(a)   $ 2,527     —   $ 114   $ 114   $ 39   —
ELSACOM settlement(b)   $ 744     —     —     —     —   —
Pension adjustment(c)   $ 941     —     —     —     —   —
UT writeoff recovery(d)   $ (103 )   —     —     —     —   —
Asset impairment(e)   $ 211,854     —     —     —     —   —
Restructuring (other)(f)   $ 5,381   $ 690   $ 5,078     —     —   —
(9)
We define cost per gross addition as total sales and marketing costs and agent and internal salesperson commissions in a given period relating to retail customers divided by the total number of retail subscriber activations over the same period. Cost per gross addition is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that cost per gross addition provides useful information concerning the cost of increasing our number of subscribers.

(10)
Includes liabilities subject to compromise as of December 31, 2003 in the amount of $3,421,967.

12


RISK FACTORS

          An investment in our common stock involves risks. You should carefully consider the risks described below, together with the other information in this prospectus, before you make a decision to purchase our common stock.

Risks Relating to Our Business

Implementation of our business plan depends on increased demand for wireless communications services via satellite, both for our existing services and products and for new services and products. If this increased demand does not occur, our revenues and profitability may not increase as we expect.

          Demand for wireless communication services via satellite may not grow, or may even shrink, either generally or in particular geographic markets, for particular types of services, or during particular time periods. A lack of demand could impair our ability to sell our services and to develop and successfully market new services, could exert downward pressure on prices, or both. This, in turn, could decrease our revenues and profitability and our ability to increase our revenues and profitability over time.

          If we can integrate ATC services with our existing business, we will be able to use the spectrum currently licensed to us to provide telecommunications through both our satellite and ground station system and through a terrestrial-based cellular system. If successful, this will allow us to address a broader market for our products and services by allowing us to provide communications services where satellite-based service is impractical, such as in urban areas and inside buildings, thereby increasing our revenue and profitability and the value of our licenses. However, neither we nor any other company has yet successfully integrated ATC services with satellite services, and we may be unable to do so. If we fail to do so, we will not obtain the benefits described above and any investment we make in developing ATC services will be lost.

          The success of our business plan, including the integration of ATC services within our existing business, will depend on a number of factors, including:

13

We depend in large part on the efforts of third parties for the retail sale of our services and products. The inability of these third parties to sell our services and products successfully may decrease our revenue and profitability.

          For the year ended December 31, 2005, approximately 90% of our U.S. revenue and almost 100% of our non-U.S. revenue was derived from products and services sold through independent agents, dealers and resellers, including, outside the United States, independent gateway operators. If these third parties are unable to continue to improve their ability to market our products and services successfully, our revenue and profitability may decrease.

We depend on independent gateway operators to market our services in important regions around the world. If the independent gateway operators are unable to do this successfully, we will not be able to grow our business in those areas as rapidly as we expect.

          Although we derive most of our revenue from retail sales to end users in the United States, Canada, a portion of Western Europe, Central America and the northern portion of South America, either directly or through agents, dealers and resellers, we depend on independent gateway operators to purchase, install, operate and maintain gateway equipment, to sell phones and data user terminals, and to market our services in other regions where these independent gateway operators hold exclusive or non-exclusive rights. Not all of the independent gateway operators have been successful and, in some regions, they have not initiated service or sold as much usage as originally anticipated. Some of the independent gateway operators are not earning revenues sufficient to fund their operating costs. Although we have implemented a strategy for the acquisition of certain independent gateway operators when circumstances permit, we may not be able to continue to implement this strategy on favorable terms and may not be able to realize the additional efficiencies that we anticipate from this strategy. In some regions it is impracticable to consolidate the independent gateway operators either because local regulatory requirements or business or cultural norms do not permit consolidation, because the expected revenue increase from consolidation would be insufficient to justify the transaction, or because the independent gateway operator will not sell at a price acceptable to us. In those regions, our revenue and profits may be adversely affected if those independent gateway operators do not fulfill their own business plans to increase substantially their sales of services and products.

We currently are unable to offer service in important regions of the world due to the absence of gateways in those areas, which is limiting our growth and our ability to compete.

          Our objective is to establish a worldwide service network, either directly or through independent gateway operators, but to date we have been unable to do so in certain areas of the world and we may not succeed in doing so in the future. We have been unable to find capable independent gateway operators for several important regions and countries, including Central and South Africa, India, Malaysia and Indonesia, the Philippines and certain other parts of Southeast Asia. In addition to the lack of global service availability, cost-effective roaming is not yet available in certain countries because the independent gateway operators have been unable to reach business arrangements with one another. This could reduce overall demand for our products and services and undermine our value for potential users who require service in these areas.

Rapid and significant technological changes in the satellite communications industry may impair our competitive position and require us to make significant additional capital expenditures.

          The hardware and software utilized in operating our gateways were designed and manufactured over 10 years ago and portions are becoming obsolete. As they continue to age, they may become less reliable and will be more difficult and expensive to service. Although we maintain inventories of spare parts, it nonetheless may be difficult or impossible to obtain all necessary replacement parts for the hardware. Our business plan contemplates updating or replacing this hardware and software, but we may not be

14


successful in these efforts, and the cost may exceed our estimates. We may face competition in the future from companies using new technologies and new satellite systems. The space and communications industries are subject to rapid advances and innovations in technology. New technology could render our system obsolete or less competitive by satisfying consumer demand in more attractive ways or through the introduction of incompatible standards. Particular technological developments that could adversely affect us include the deployment by our competitors of new satellites with greater power, greater flexibility, greater efficiency or greater capabilities, as well as continuing improvements in terrestrial wireless technologies. For us to keep up with technological changes and remain competitive, we may need to make significant capital expenditures. Customer acceptance of the services and products that we offer will continually be affected by technology-based differences in our product and service offerings. New technologies may be protected by patents or other intellectual property laws and therefore may not be available to us.

Our satellites have a limited life and may fail prematurely, which would cause our network to be compromised and materially and adversely affect our business, prospects and profitability.

          Since the first Old Globalstar satellites were launched in 1998, nine have failed in orbit, and others may fail in the future. In-orbit failure may result from various causes, including component failure, loss of power or fuel, inability to control positioning of the satellite, solar or other astronomical events, including solar radiation and flares, and space debris. As our constellation has aged, the quality of our satellites' signals has diminished, and may continue to diminish, adversely affecting the reliability of our service, which could adversely affect our results of operations, cash flow and financial condition. Although we do not incur any direct cash costs related to the failure of a satellite, if a satellite fails, we record an impairment charge reflecting its net book value.

          We have been advised by our customers and others of temporary intermittent losses of signal cutting off calls in progress or preventing completions of calls when made. If these problems increase, they could affect adversely our business and our ability to complete our business plan.

          Other factors that could affect the useful lives of our satellites include the quality of construction, gradual degradation of solar panels and the durability of components. Radiation induced failure of satellite components may result in damage to or loss of a satellite before the end of its expected life. As a result, fewer than 43 of our in-orbit satellites may be fully functioning at any time.

          Old Globalstar launched our first-generation constellation beginning in 1998 and ending in 2000. Eight of our nine satellite failures have been attributed to a common anomaly in the satellite communications subsystem S-band antenna. This anomaly has occurred in 16 of our other satellites, a majority of which have been or are in the process of being returned to service. In part as a response to this anomaly, we reduced our operating constellation structure from a "Walker" 48 (six satellites in each of eight planes) to a "Walker" 40 (five satellites in each of eight planes). A majority of our satellites also have experienced other anomalies which have not yet severely impacted services to customers but which may in the future limit the capacity of our existing network. We may be required in the future to make further changes to the structure of our constellation to maintain or improve its performance or to accommodate the launch of our eight spare satellites. Any such changes will require FCC approval. In addition, from time to time we may reposition our satellites within the constellation in order to optimize our service, which could result in degraded service during the repositioning period.

          Although there are some remote tools we use to remedy certain types of problems affecting the performance of our satellites, the physical repair of satellites in space is not feasible. We do not insure our satellites against in-orbit failures, whether such failures are caused by internal or external factors.

15


If we are unable to deploy our second-generation satellite constellation before our current satellite constellation ceases to provide commercially viable service, we will incur a decline in revenues and profitability.

          We expect that our current satellite constellation will provide commercially viable service into 2010 and plan to deploy our second-generation satellite constellation beginning in 2009. If we are unable for any reason, including manufacturing or launch delays, launch failures, delays in receiving regulatory approvals or insufficient funds, to deploy our second-generation constellation before our current constellation ceases to provide commercially viable service, we are likely to lose subscribers, and will incur a decline in revenues and profitability as our ability to provide commercially viable service declines.

A natural disaster could diminish our ability to provide communications service.

          Natural disasters could damage or destroy our ground stations resulting in a disruption of service to our customers. We currently have the technology to safeguard our antennas and protect our ground stations during natural disasters such as a hurricane, but the collateral effects of such disasters such as flooding may impair the functioning of our ground equipment. During the Gulf Coast hurricane activity in 2005, the operations at our gateway located in Sebring, Florida were impaired temporarily, causing a temporary degradation of the service level in the affected area. If a future natural disaster impairs or destroys any of our ground facilities, we may be unable to provide service to our customers in the affected area for a period of time.

          In addition, even if our gateways are not affected by natural disasters, our service could be disrupted if a natural disaster damages the public switch telephone network or our ability to connect to the public switch telephone network.

We may not be able to launch our satellites successfully. Loss of a satellite during launch could delay or impair our ability to offer our services or reduce our revenues, and launch insurance, even if it is available, will not cover fully this risk.

          We intend to insure the launch of our eight spare satellites to supplement our existing low earth orbit constellation, but we do not, and do not intend to, insure our existing satellites during their remaining in-orbit operational lives. We anticipate our eight spare satellites will be launched on two rockets, each carrying four satellites. Launch insurance currently costs approximately 5% to 10% of the insured value of the satellite (including launch costs), but may vary depending on market conditions and the safety record of the launch vehicle. Even if a lost satellite is fully insured, acquiring a replacement satellite may be difficult and time consuming. Furthermore, the insurance does not cover lost revenue.

          We expect any launch failure insurance policies that we obtain to include specified exclusions, deductibles and material change limitations. Typically, these insurance policies exclude coverage for damage arising from acts of war, lasers, and other similar potential risks for which exclusions are customary in the industry at the time the policy is written.

          If launch insurance rates were to rise substantially, our future launch costs would increase. In addition, in light of increasing costs, the scope of insurance exclusions and limitations on the nature of the losses for which we can obtain insurance, or other business reasons, we may conclude that it does not make business sense to obtain third-party insurance and may decide to pursue other strategies for mitigating the risk of a satellite launch failure, such as purchasing additional spare satellites or obtaining relaunch guaranties from the launch provider. It is also possible that insurance could become unavailable, either generally or for a specific launch vehicle, or that new insurance could be subject to broader exclusions on coverage, in which event we would bear the risk of launch failures.

16


Our business plan includes exploiting our ATC license by combining ATC services with our existing business. If we are unable to accomplish this effectively, our anticipated future revenues and profitability will be reduced and we will lose our investment in developing ATC services.

          We plan to integrate ATC services with our existing satellite services and products, initially using our existing communications network, while developing a second-generation satellite network and upgrading our existing ground facilities. To date, neither we nor any other company has developed an integrated commercial network combining satellite services with ATC services, and we may be unable to do so.

          Northern Sky Research estimates that development of a terrestrial network to provide ATC services could cost $2.5 to $3.0 billion in the United States alone. Therefore, full exploitation of our ATC opportunity probably will require us to form partnerships, service contracts or other joint venture arrangements with other telecommunications or spectrum-based service providers. We may not be able to establish such arrangements at all or on favorable terms and, if such arrangements are established, the other parties may not fulfill their obligations. If we are unable to form a suitable partnership or enter into a service contract or joint venture agreement, we may not be able to realize our plan to offer ATC services, which would limit our ability to expand our business and reduce our revenues and profitability. In addition, in such event we will lose any resources we have invested in developing ATC services, which may be substantial.

ATC spectrum access is limited by regulatory and technological factors. If we are unable to work within these limitations, our anticipated future revenues and profitability will be reduced, and we could lose all or much of our investment in developing ATC services.

          We have been granted authority to use a finite quantity of radio spectrum for ATC services. Our ATC license currently is limited to 11 MHz, i.e., 5.5 MHz of spectrum in each of the L and S bands. Any ATC use of more than 11 MHz of spectrum would require a change in or waiver of FCC rules. No such change may occur and we may not receive any such waiver. In addition, our authority to provide ATC services is contingent on our continuing to offer satellite services to our customers. Accordingly, we must continue to provide communication between our satellites and the gateways when we commence providing ATC services through our network. If we are not able to manage our satellite and ATC spectrum use dynamically and efficiently, we may not be able to realize the full value of our ATC license.

          The FCC rules governing ATC are relatively new and are subject to interpretation. These rules require ATC service providers to demonstrate that their mobile satellite and ATC services constitute an "integrated service offering." The FCC has indicated that one means of meeting this requirement is through the use of dual-mode mobile satellite services/ATC handset phones. Although we believe we can obtain and sell dual-mode mobile satellite services/ATC handset phones that will comply with the ATC rules, the scope of ATC services that we will be permitted and required to provide under our existing FCC license is unclear and we may be required to seek amendments to our ATC license to execute our business plan. The development and operation of our ATC system may also infringe on unknown and unidentified intellectual property rights of other persons, which could require us to modify our business plan, thereby increasing our development costs and slowing our time to market. If we are unable to meet the regulatory requirements applicable to ATC services or develop or acquire the required technology, we may not be able to realize our plan to offer ATC services, which would decrease our revenues and profitability.

If the FCC were to reduce our existing spectrum allocation or impose additional spectrum-sharing requirements on us, our services and operations could be adversely affected.

          Under the FCC's plan for mobile satellite services in our frequency bands, we must share frequencies in the United States with other licensed mobile satellite services operators. To date, there are no other authorized CDMA-based mobile satellite services operators and we do not believe anyone is requesting

17


such an authorization. In July 2004, the FCC released new rules which require us to share 3.1 MHz of the 1610.25 to 1621.35 MHz portion of our uplink band with Iridium and the 2496 to 2500 MHz portion of our downlink band with operators providing broadband radio service. The FCC also asked for comment on whether Iridium should be allowed to share the 1616 to 1618.25 MHz portion of the 1.6 GHz band. Although we have continued to contest vigorously any proposed additional sharing of our spectrum, we may not retain exclusive use of all of our existing spectrum. If we are required to share additional frequency bands or if Iridium or an operator of a CDMA system uses these frequencies, it may cause interference with our signal and decrease the value of our spectrum.

Spectrum values historically have been volatile, which could cause the value of our company to fluctuate.

          Our business plan is evolving and it may include forming strategic partnerships to maximize value for our spectrum, network assets and combined service offerings in the United States and internationally. Values that we may be able to realize from such partnerships will depend in part on the value ascribed to our spectrum. Valuations of spectrum in other frequency bands historically have been volatile, and we cannot predict at what amount a future partner may be willing to value our spectrum and other assets. In addition, to the extent that the FCC takes action that makes additional spectrum available or promotes the more flexible use or greater availability (e.g., via spectrum leasing or new spectrum sales) of existing satellite or terrestrial spectrum allocations, the availability of such additional spectrum could reduce the value of our spectrum authorizations, the value of our business and the price of our common stock.

We could lose market share and revenues as a result of increasing competition from companies in the wireless communications industry, including other satellite operators, and from the extension of land-based communication services.

          We face intense competition in all of our markets, which could result in a loss of customers and lower revenues and make it more difficult for us to enter new markets.

          There are currently five other satellite operators providing services similar to ours on a global or regional basis: Iridium L.L.C., Inmarsat, Mobile Satellite Ventures, Thuraya Satellite Communications Company and Asian Cellular Satellites. In addition, ICO Global Communications Company and TMI/TerreStar plan to launch their new satellite systems within the next few years. The provision of satellite-based products and services is subject to downward price pressure when the capacity exceeds demand.

          In April 2001, Iridium, our principal worldwide mobile satellite competitor, exited bankruptcy and resumed commercial service in competition with us. Iridium has a long-term contract from the United States Department of Defense. ICO Global Communications raised additional funding during 2005 to fund the construction of its 2 GHz satellite system and is expected to complete its system and compete with us in the future. TMI/TerreStar also holds a 2 GHz satellite license and is constructing a system that may compete with us in the future. In addition, we may face competition from new competitors or new technologies, which may materially adversely affect our business plan. With so many companies targeting many of the same customers, we may not be able to retain successfully our existing customers and attract new customers and as a result may not grow our customer base and revenue as much as we expect.

          In addition to our satellite-based competitors, terrestrial wireless voice and data service providers are expanding into rural and remote areas and providing the same general types of services and products that we provide through our satellite-based system. Many of these companies have greater resources, wider name recognition and newer technologies than we do. Industry consolidation could adversely affect us by increasing the scale or scope of our competitors and thereby making it more difficult for us to compete.

          Although satellite communications services and ground-based communications services are not perfect substitutes, the two compete in certain markets and for certain services. Consumers generally perceive wireless voice communication products and services as cheaper and more convenient than satellite-based ones.

18


          Additionally, the extension of terrestrial telecommunications services to regions previously underserved or not served by wireline or wireless services may reduce demand for our service in those regions. These land-based telecommunications services have been built more quickly than we anticipated; therefore, demand for our products and services may decline in these areas more rapidly than we assumed in formulating our business plan. This development has led, in part, to our efforts to identify and sell into geographically remote and certain vertical markets and further the deployment of user terminals and data products. If we are unable to attract new customers in these regions, our customer base may decrease, which could have a material adverse effect on our business prospects, financial condition and results of operations.

The loss of customers, particularly our large customers, may reduce our future revenues.

          We may lose customers due to competition, consolidation, regulatory developments, business developments affecting our customers or their customers, or for other reasons. Our top 10 customers for the year ended December 31, 2005 accounted for, in the aggregate, approximately 20% of our total revenues of $127.1 million. For the year ended December 31, 2005, revenues from our largest customer were $5.0 million, or 4% of our total revenues. If we fail to maintain our relationships with our major customers, if we lose them and fail to replace them with other similar customers, or if we experience reduced demand from our major customers, it could result in a significant reduction in our profitability through the loss of revenues and the requirement to record additional costs to the extent that amounts due from these customers are considered uncollectible. More generally, our customers may fail to renew or may cancel their service contracts with us, which could negatively affect future revenues and profitability.

          Our customers include multiple agencies of the U.S. government. Aggregate sales to U.S. government agencies constituted approximately 15% and 16% of our revenue for the year ended December 31, 2005 and the six months ended June 30, 2006, respectively. Government sales are made pursuant to individual purchase orders placed from time to time by the governmental agencies and are not related to long-term contracts. U.S. government agencies may terminate their business with us at any time without penalty.

We may need additional capital to maintain our network and to pursue future growth opportunities. If we fail to obtain sufficient capital, we will not be able to complete our business plan.

          Our business plan calls for the launch of spare and new satellites, upgrading our ground stations, phones and data terminals and entering into joint ventures to develop ATC and other international services and products. We believe the net proceeds from this offering, together with cash on hand, cash generated from our operations and cash available under our credit agreement and irrevocable standby stock purchase agreement, will be sufficient to enable us to implement our business plan. If we are wrong, we may not be able to obtain in a timely manner sufficient funds to develop and launch such satellites, upgrade our ground component or develop our ATC services and products. If we do not generate the amount of cash we expect from our operations or do not receive the net proceeds from this offering or the entire remaining commitment from the irrevocable standby stock purchase agreement with Thermo Funding Company, we will not be able to complete our current business plan, and will be required to revise the plan to one that can be accomplished with our available capital, which could make us less competitive and reduce our future revenue and profitability.

Our business is subject to extensive government regulation, which mandates how we may operate our business and may increase our cost of providing services, slow our expansion into new markets and subject our services to additional competitive pressures.

          Our ownership and operation of wireless communication systems are subject to significant regulation in the United States by the FCC and in foreign jurisdictions by similar local authorities. The rules and regulations of the FCC or these foreign authorities may change and not continue to permit our operations as presently conducted or as we plan to conduct such operations. For example, as described under

19


"Regulation," the FCC cancelled and has refused, to date, to reinstate our license for spectrum in the 2 GHz band. In addition, several terrestrial wireless companies are attempting to convince the FCC to modify adversely our license for spectrum in the S-band (2496-2500 MHz).

          Failure to provide services in accordance with the terms of our licenses or failure to operate our satellites or ground stations as required by our licenses and applicable government regulations could result in the imposition of government sanctions on us, up to and including cancellation of our licenses.

          Our system must be authorized in each of the markets in which we or the independent gateway operators provide service. We and the independent gateway operators may not be able to obtain or retain all regulatory approvals needed for operations. For example, the company with which Old Globalstar contracted to establish an independent gateway operation in South Africa was unable to obtain an operating license from the Republic of South Africa and abandoned the business in 2001. Regulatory changes, such as those resulting from judicial decisions or adoption of treaties, legislation or regulation in countries where we operate or intend to operate, may also significantly affect our business. Because regulations in each country are different, we may not be aware if some of the independent gateway operators and/or persons with which we or they do business do not hold the requisite licenses and approvals.

          Our current regulatory approvals could now be, or could become, insufficient in the view of foreign regulatory authorities, any additional necessary approvals may not be granted on a timely basis, or at all, in all jurisdictions in which we wish to offer services, and applicable restrictions in those jurisdictions could become unduly burdensome.

          Our operations are subject to certain regulations of the United States State Department's Office of Defense Trade Controls (i.e., the export of satellites and related technical data), United States Treasury Department's Office of Foreign Assets Control (i.e., financial transactions) and the United States Commerce Department's Bureau of Industry and Security (i.e., our gateways and phones). These regulations may limit or delay our ability to operate in a particular country. As new laws and regulations are issued, we may be required to modify our business plans or operations. If we fail to comply with these regulations in any country, we could be subject to sanctions that could affect, materially and adversely, our ability to operate in that country. Failure to obtain the authorizations necessary to use our assigned radio frequency spectrum and to distribute our products in certain countries could have a material adverse effect on our ability to generate revenue and on our overall competitive position.

If we do not develop, acquire and maintain proprietary information and intellectual property rights, it could limit the growth of our business and reduce our market share.

          Our business depends on technical knowledge, and we believe that our future success is based, in part, on our ability to keep up with new technological developments and incorporate them in our products and services. We own or have the right to use certain of our work products, inventions, designs, software, systems and similar know-how. Although we have taken diligent steps to protect that information, the information may be disclosed to others or others may independently develop similar information, systems and know-how. Protection of our information, systems and know-how may result in litigation, the cost of which could be substantial. Third parties may assert claims that our products or services infringe on their proprietary rights. Any such claims, if made, may prevent or limit our sales of products or services or increase our costs of sales. Although no third party has filed a lawsuit or asserted a written claim against us for allegedly infringing on its proprietary rights, such claims could be made in the future.

          Much of the software we require to support critical gateway operations and customer service functions, including billing, is licensed from third parties, including QUALCOMM and Space Systems/Loral Inc., and was developed or customized specifically for our use. If the third party licensors were to cease to support and service the software, or the licenses were to no longer be available on commercially reasonable terms, it may be difficult, expensive or impossible to obtain such services from alternative

20


vendors. Replacing such software could be difficult, time consuming and expensive, and might require us to obtain substitute technology with lower quality or performance standards or at a greater cost.

We face special risks by doing business in developing markets, including currency and expropriation risks, which could increase our costs or reduce our revenues in these areas.

          Although our most economically important geographic markets currently are the United States and Canada, we have substantial markets for our mobile satellite services in developing countries or regions that are underserved by existing telecommunications systems, such as rural Venezuela and Central America. Developing countries are more likely than industrialized countries to experience market, currency and interest rate fluctuations and may have higher inflation. In addition, these countries present risks relating to government policy, price, wage and exchange controls, social instability, expropriation and other adverse economic, political and diplomatic conditions.

          Although a majority of our revenues are received in U.S. dollars, and our independent gateway operators are required to pay us in U.S. dollars, limited availability of U.S. currency in some local markets or governmental controls on the export of currency may prevent an independent gateway operator from making payments in U.S. dollars or delay the availability of payment due to foreign bank currency processing and approval. In addition, exchange rate fluctuations may affect our ability to control the prices charged for the independent gateway operators' services.

Fluctuations in currency exchange rates may adversely impact our financial results.

          Our operations involve transactions in a variety of currencies. Sales denominated in foreign currencies primarily involve the Canadian dollar and the Euro. Our contract for the launch of our eight spare satellites is denominated in Euros. Accordingly, our operating results may be significantly affected by fluctuations in the exchange rates for these currencies. Approximately 43%, 45%, 38% and 34% of our total sales were to customers in Canada and Europe during 2003, 2004, 2005 and the first six months of 2006, respectively. Our results of operations for the six months ended June 30, 2006 reflected a loss of $1.8 million on foreign currency transactions. We may be unable to offset unfavorable currency movements as they adversely effect our revenue and expenses. Our inability to do so could have a substantial negative impact on our operating results and cash flows. We anticipate that our obligations for the procurement and launch of our next-generation satellite constellation also will be denominated principally in Euros. If this occurs, our exposure to fluctuations in currency exchange rates will be substantially larger.

If we become subject to unanticipated foreign tax liabilities, it could materially increase our costs.

          We operate in various foreign tax jurisdictions. We believe that we have complied in all material respects with our obligations to pay taxes in these jurisdictions. However, our position is subject to review and possible challenge by the taxing authorities of these jurisdictions. If the applicable taxing authorities were to challenge successfully our current tax positions, or if there were changes in the manner in which we conduct our activities, we could become subject to material unanticipated tax liabilities. We may also become subject to additional tax liabilities as a result of changes in tax laws, which could in certain circumstances have retroactive effect.

We rely on a limited number of key vendors for timely supply of equipment and services. If our key vendors fail to provide equipment and services to us, we may face difficulties in finding alternative sources and may not be able to operate our business successfully.

          We depend on QUALCOMM for gateway hardware and software, and also as the exclusive manufacturer of phones using the IS-41 CDMA North American standard, which incorporates QUALCOMM proprietary technology. Ericsson OMC Limited and Telit, which until 2000 manufactured

21


phones and other products for us, have discontinued manufacturing these products, and QUALCOMM may choose to terminate its business relationship with us when its current contractual obligations are completed in approximately four years. If QUALCOMM terminates this relationship, we may not be able to find a replacement supplier. Although the QUALCOMM relationship might be replaced, there could be a substantial period of time in which our products are not available and any new relationship may involve a significantly different cost structure, development schedule and delivery times.

          We depend on Axonn LLC to produce and sell the data modems through which we provide our Simplex service. These devices incorporate Axonn proprietary technology. As a sole supplier, if Axonn were to cease producing and selling these data modems, we would be unable to grow our Simplex services as currently anticipated. We have no long-term contract with Axonn for the production and sale of these data modems.

          Space Systems/Loral has completed production of our eight spare satellites, all of which are being prepared for launch in 2007. Those satellites were acquired by Old Globalstar in 2003, as part of a settlement with Loral, and are now owned by us. We are currently engaged in litigation with an affiliate of Loral as described under "Business—Legal Proceedings." We are dependent on third parties to test, prepare for launch and provide certain services in support of the launch of our spare satellites. We have contracted with Starsem to launch these satellites in 2007. We expect the cost of testing and launching these eight spare satellites (including launch insurance) to be approximately $110 million.

          On October 5, 2006, we entered into an Authorization to Proceed with Alcatel Alenia Space France which contemplates that Alcatel will construct 48 low earth orbit satellites for our second-generation satellite constellation. See "Prospectus Summary—Recent Developments." If we enter into a definitive agreement with Alcatel as contemplated by the Authorization to Proceed, we will depend on Alcatel to construct these satellites.

Wireless devices may pose health and safety risks and, as a result, we may be subject to new regulations, demand for our services may decrease and we could face liability based on alleged health risks.

          There has been adverse publicity concerning alleged health risks associated with radio frequency transmissions from portable hand-held telephones that have transmitting antennae. Lawsuits have been filed against participants in the wireless industry alleging various adverse health consequences, including cancer, as a result of wireless phone usage. The U.S. Supreme Court recently declined to review a lower federal court's decision remanding for trial in state courts several cases alleging such injuries. Our subsidiary, Globalstar USA, LLC, was a defendant in a similar case in a Georgia state court. Vodafone Americas, Inc. conducted our defense pursuant to a prior indemnification obligation. The plaintiff, on behalf of cellular consumers in Georgia, claimed that defendants (cell phone manufacturers and operators) knew that their cell phone products emitted radio frequency radiation that posed future health risks. Based on the defendants' failure to warn of such risks and alleged breaches of warranty, plaintiff sought a variety of monetary damages as well as headsets for each cell phone consumer in Georgia. In March 2005, the case was consolidated with four other cases in the United States District Court in Maryland. On January 30, 2006, because of the consolidation, the plaintiff voluntarily dismissed the Georgia state court case.

          Although we do not believe that there is valid scientific evidence that use of our phones poses a health risk, courts or governmental agencies could find otherwise. Any such finding could reduce our revenues and profitability and expose us and other wireless providers to litigation, which, even if not successful, could be costly to defend.

          If consumers' health concerns over radio frequency emissions increase, they may be discouraged from using wireless handsets. Further, government authorities might increase regulation of wireless handsets as a result of these health concerns. The actual or perceived risk of radio frequency emissions

22


could reduce our subscriber growth rate, reduce the number of our subscribers or impair our ability to obtain future financing.

Pursuing strategic transactions may cause us to incur additional risks.

          We may pursue acquisitions, joint ventures or other strategic transactions on an opportunistic basis, although no such transactions that would be financially significant to us are probable at this time. We may face costs and risks arising from any such transactions, including integrating a new business into our business or managing a joint venture. These may include legal, organizational, financial and other costs and risks.

          In addition, if we were to choose to engage in any major business combination or similar strategic transaction, we may require significant external financing in connection with the transaction. Depending on market conditions, investor perceptions of us and other factors, we may not be able to obtain capital on acceptable terms, in acceptable amounts or at appropriate times to implement any such transaction. Any such financing, if obtained, may further dilute our existing stockholders.

Our indebtedness could impair our ability to react to changes in our business and may limit our ability to use debt to fund future capital needs.

          Our indebtedness could adversely affect our financial condition. If our credit agreement had been in effect and the $150.0 million in committed facilities fully drawn at June 30, 2006, our indebtedness would have been $151.4 million. This would have resulted in annual interest expense of approximately $16.7 million, assuming an interest rate of 11.0%. Our indebtedness could:

          Furthermore, if an event of default were to occur with respect to our credit agreement or other indebtedness, our creditors could accelerate the maturity of our indebtedness. Our indebtedness under our credit agreement is secured by a lien on substantially all of our assets and the assets of our domestic subsidiaries and the lenders could foreclose on these assets to repay the indebtedness.

23

          Our ability to make scheduled payments on or to refinance indebtedness obligations depends on our financial condition and operating performance, which are subject to prevailing economic and competitive conditions and to certain financial, business and other factors beyond our control. We may not be able to maintain a level of cash flows from operating activities sufficient to permit us to pay the principal, premium, if any, and interest on our indebtedness. If our cash flows and capital resources are insufficient to fund our debt service obligations, we could face substantial liquidity problems and could be forced to sell assets, seek additional capital or seek to restructure or refinance our indebtedness. These alternative measures may not be successful or feasible. Our credit agreement restricts our ability to sell assets. Even if we could consummate those sales, the proceeds that we realize from them may not be adequate to meet any debt service obligations then due.

We will be able to incur additional indebtedness or other obligations in the future, which would exacerbate the risks discussed above.

          Our credit agreement permits us to incur, in addition to the $150.0 million of revolving credit and delayed draw term loans that the lenders have committed to advance under the credit agreement, other indebtedness under certain conditions, including up to $150.0 million of additional equally and ratably secured, pari passu, term loans, up to $200.0 million of unsecured debt and up to $25.0 million of purchase money indebtedness or capitalized leases. We may incur this additional indebtedness only if no event of default under our credit agreement then exists, if we are in pro forma compliance with all of the financial covenants of our credit agreement, and if, after giving effect thereto, our consolidated total leverage ratio does not exceed 5.5 to 1.0. Our credit agreement also permits us to incur obligations that do not constitute "indebtedness" as defined in the credit agreement, including obligations to satellite vendors that are not evidenced by a note and not secured by assets other than those purchased with such obligations. To the extent additional debt or other obligations are added to our currently anticipated debt levels, the substantial indebtedness risks described above would increase.

          We may not be able to generate sufficient cash to service all of our indebtedness and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.

Restrictive covenants in our credit agreement impose restrictions that may limit our operating and financial flexibility.

          Our credit agreement contains a number of significant restrictions and covenants that limit our ability to:

24

          Complying with these restrictive covenants, as well as those that may be contained in any agreements governing future indebtedness, may impair our ability to finance our operations or capital needs or to take advantage of other favorable business opportunities. Our ability to comply with these restrictive covenants will depend on our future performance, which may be affected by events beyond our control. If we violate any of these covenants and are unable to obtain waivers, we would be in default under the agreement and payment of the indebtedness could be accelerated. The acceleration of our indebtedness under one agreement may permit acceleration of indebtedness under other agreements that contain cross-default or cross-acceleration provisions. If our indebtedness is accelerated, we may not be able to repay our indebtedness or borrow sufficient funds to refinance it. Even if we are able to obtain new financing, it may not be on commercially reasonable terms or on terms that are acceptable to us. If our indebtedness is in default for any reason, our business, financial condition and results of operations could be materially and adversely affected. In addition, complying with these covenants may also cause us to take actions that are not favorable to holders of the common stock and may make it more difficult for us to successfully execute our business plan and compete against companies who are not subject to such restrictions.

If we are unable to address successfully the material weakness in our internal controls, or our other control deficiencies, our ability to report our financial results on a timely and accurate basis and to comply with disclosure and other requirements may be adversely affected; public reporting obligations will put significant demands on our financial, operational and management resources.

          We are not currently required to comply with Section 404 of the Sarbanes-Oxley Act of 2002, and are therefore not required to make an assessment of the effectiveness of our internal controls over financial reporting for that purpose. However, in connection with its audit of our 2005 consolidated financial statements, our independent registered public accounting firm, Crowe Chizek and Company LLP, identified a material weakness in our processes, procedures and controls related to our failure to eliminate inter-company profit from sales of inventory and surplus or spare fixed assets related to gateway equipment to our subsidiaries, and informed members of our senior management and our board of directors that these processes, procedures and controls were not adequate to ensure that our financial statements were prepared in accordance with generally accepted accounting principles. A material weakness is defined as a significant deficiency, or a combination of significant deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected. We failed to eliminate approximately $0.9 million in inter-company profit resulting from these sales in our initial preparation of our 2005 financial statements. This control deficiency could have resulted in an overstatement of our earnings for 2005 that would not have been prevented or detected. Accordingly, our management concluded that this deficiency in internal control over financial reporting was a material weakness.

          We have corrected this error in our year-end adjustments in connection with finalizing the financial statements included in this prospectus. We intend to implement additional controls to verify that all future inter-company profits are captured and tracked properly and eliminated in the consolidation.

          In connection with their audit of our 2005 financial statements, Crowe Chizek also advised our management and board of directors that it had identified other significant deficiencies in our internal controls. A significant deficiency is defined as a control deficiency, or a combination of control deficiencies, that adversely affects a company's ability to initiate, authorize, record, process, or report external financial data reliably in accordance with generally accepted accounting principles such that there is more than a remote likelihood that a misstatement of the company's annual or interim financial statements that is more than inconsequential will not be prevented or detected. Crowe Chizek recommended that we consider taking remedial actions, including hiring additional accounting resources in our significantly understaffed corporate accounting department, establishing a monthly close checklist and timetable, reviewing and supervising manual journal entries, historical estimates and consistency of

25


accounting policies, segregating duties in our accounts payable department, reviewing calculations of allowance for doubtful accounts and inventory and warranty reserves, and simplifying and automating our reporting process, particularly in the consolidation of our foreign subsidiaries' financial information. We have begun to implement these recommendations. We have implemented additional management oversight over inter-company transactions and additional controls with respect to reconciliation of inter-company balances at quarter-end. We also intend to hire additional staff to address further our deficiencies in that area. The remediation process is ongoing. We expect to incur additional costs associated with being a public company going forward. Although significant, we do not expect these additional costs to be material to our operations. We intend to pay for these additional costs from our working capital generated by our continuing operations.

          We will continue to monitor the effectiveness of these and other processes, procedures and controls and will make any further changes management determines appropriate, including to effect compliance with Section 404 of the Sarbanes-Oxley Act of 2002 at or before December 31, 2007, the date by which we are required to comply with it.

          Any material weakness or other deficiencies in our control systems may affect our ability to comply with SEC reporting requirements and NASDAQ Global Market listing standards or cause our financial statements to contain material misstatements, which could negatively affect the market price and trading liquidity of our common stock, cause investors to lose confidence in our reported financial information, as well as subject us to civil or criminal investigations and penalties.

Our pre-emptive rights offering, which we intend to consummate after the completion of this offering, is not in strict compliance with the technical requirements of our prior certificate of incorporation.

          Our certificate of incorporation as in effect when we entered into the irrevocable standby stock purchase agreement with Thermo Funding Company provided that stockholders who are accredited investors (as defined under the Securities Act) were entitled to pre-emptive rights with respect to the transaction with Thermo Funding Company. After the completion of this offering, we intend to offer stockholders of the company as of June 15, 2006 who are accredited investors the opportunity to participate in the transaction contemplated by the irrevocable standby stock purchase agreement with Thermo Funding Company on a pro rata basis on substantially the same terms as Thermo Funding Company. Some of our stockholders could allege that the offering does not comply fully with the terms of our prior certificate of incorporation. Although we believe any variance from the requirements of our former certificate of incorporation is immaterial and that we have valid reasons for delaying the pre-emptive rights offering until after this offering, a court may not agree with our position if these stockholders allege that we have violated their pre-emptive rights. In that case, we can not predict the type of remedy the court could award such stockholders.

We expect that the pre-emptive rights offering, which we are required to make to our existing stockholders, will not be completed until after the completion of this offering; the pre-emptive rights offering, which may be done on either a private or a registered basis, may negatively affect the trading price of our stock.

          Because of legal and other procedural issues, we do not expect to be able to complete the pre-emptive rights offering described above until after the offering described in this prospectus is completed and our stock has begun trading publicly on the NASDAQ Global Market. Further, the pre-emptive rights offering may have to be made pursuant to a registration statement filed with, and potentially reviewed by, the Securities and Exchange Commission. After giving effect to waivers that we have already received, up to 785,328 shares of our common stock may be purchased if the pre-emptive rights offering is fully subscribed. Such shares may be purchased at approximately $16.17 per share, regardless of any future increase in the trading price of our common stock. Although any shares purchased or subscribed for in the pre-emptive rights offering will be subject to the 180-day lock-up period described under "Shares

26


Eligible for Future Sale—Lock-Up Agreements," the timing and set-price nature of the pre-emptive rights offering may negatively affect the trading price of our common stock. Additionally, because existing stockholders who commit to participate in the pre-emptive rights offering have the right to purchase their committed shares at any time during the term of the irrevocable standby stock purchase agreement, any future purchases at $16.17 may also affect the trading price of our common stock at the time of purchase.

Risks Related to this Offering

We do not expect to pay dividends on our common stock in the foreseeable future.

          Except for a one-time payment of $685,848 to Thermo as described under "Dividend Policy and Restrictions," we do not expect to pay cash dividends on our common stock, including the common stock issued in this offering. Any future dividend payments are within the absolute discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock. Our credit agreement currently prohibits the payment of other cash dividends. See "Dividend Policy and Restrictions."

There is no existing market for our common stock, and one may not develop to provide you with adequate liquidity.

          Prior to this offering, there has not been a public market for our common stock. We have applied to list our common stock on the NASDAQ Global Market. However, we cannot predict the extent to which investor interest in our company will lead to the development of a trading market on the NASDAQ Global Market or otherwise or how liquid that market might become. If an active trading market does not develop, you may have difficulty selling any of our common stock that you buy. The initial public offering price for the shares was determined by negotiations between us and the representatives of the underwriters based on numerous factors that we discuss in the "Underwriting" section of this prospectus and may not be indicative of prices that will prevail in the open market following this offering.

          Consequently, you may not be able to sell our common stock at prices equal to or greater than the price you paid in this offering.

The market price of our common stock may be volatile, which could cause the value of your investment to decline.

          The trading price of our common stock may be subject to wide fluctuations. Factors affecting the trading price of our common stock may include:

27

          The trading price of our common stock might also decline in reaction to events that affect other companies in our industry even if these events do not directly affect us. You may be unable to resell your shares of our common stock at or above the initial public offering price.

Future sales of shares of our common stock by existing stockholders in the public market, or the possibility or perception of these sales, could cause our stock price to decline.

          The market price of our common stock could decline as a result of sales of a large number of shares of common stock in the market after this offering or the perception that such sales could occur. These sales, or the possibility that significant sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate. We, Thermo, QUALCOMM Incorporated and our directors and executive officers have agreed with the underwriters not to sell, dispose of or hedge any shares of our common stock or securities convertible into or exchangeable for shares of our common stock, subject to specified exceptions, during the period from the date of this prospectus continuing through the date that is 180 days after the date of this prospectus, except with the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. Any of our other stockholders who agree to purchase shares in our subsequent pre-emptive rights offering will be subject to the same restrictions. In addition, Columbia Ventures Corporation and Loral Skynet Corporation have entered into similar agreements with respect to 70% of the shares beneficially owned by each of them. See "Underwriting." Our other stockholders, who own an aggregate of approximately 20% of our common stock on the date of this prospectus, are not subject to these restrictions and may sell their shares immediately after this offering to the extent permitted by law.

          Upon the closing of this offering, we will have 69,375,494 shares of common stock outstanding, assuming no exercise of the underwriters' option to purchase additional shares, no issuance of the remaining shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company or any shares to our other stockholders in our pre-emptive rights offering and no issuance of shares pursuant to our 2006 Equity Incentive Plan. Of the outstanding shares, all of the shares sold in this offering, as well as 10,648,434 unrestricted shares already outstanding that were issued in the Reorganization and are not held by our "affiliates," as defined under Rule 144 of the Securities Act, will be freely tradable without restriction or further registration under the Securities Act. Any shares owned by our "affiliates" may be sold only in compliance with the limitations of that Rule. The remaining 52,227,060 outstanding shares of common stock will be deemed "restricted securities" as that term is defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144.

The book value of shares of common stock purchased in this offering will be immediately diluted and may be subject to additional dilution in the future.

          The initial public offering price per share of our common stock is substantially higher than the net tangible book value per share of our outstanding common stock. Accordingly, if you purchase common stock in this offering, you will suffer immediate and substantial dilution of your investment. If, as of June 30, 2006, we had issued and sold 6,500,000 shares of common stock at an assumed initial public offering price of $17.00 per share (the mid-point of the initial public offering price range indicated on the cover of this prospectus), you would have incurred immediate dilution of $13.96 in the net tangible book value per share. This dilution would have been $12.10 if we assume issuance of all of the common stock subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and $11.99 if we also assume the issuance of all 785,328 of the shares subject to our pre-emptive rights offering. Any issuance of shares pursuant to our 2006 Equity Incentive Plan will result in further dilution.

28


Provisions in our charter documents and credit agreement and provisions of Delaware law may discourage takeovers, which could affect the rights of holders of our common stock.

          Provisions of Delaware law and our amended and restated certificate of incorporation, amended and restated bylaws and our credit agreement could hamper a third party's acquisition of us or discourage a third party from attempting to acquire control of us. These provisions include:

          We also are subject to Section 203 of the Delaware General Corporation Law, which, subject to certain exceptions, prohibits us from engaging in any business combination with any interested stockholder, as defined in that section, for a period of three years following the date on which that stockholder became an interested stockholder.

          These provisions also could make it more difficult for you and our other stockholders to elect directors and take other corporate actions, and could limit the price that investors might be willing to pay in the future for shares of our common stock.

We are controlled by Thermo, whose interests may conflict with yours.

          Upon completion of this offering, Thermo will own approximately 58% of our outstanding common stock. If Thermo were to purchase all of the common stock it has agreed to purchase in the irrevocable standby stock purchase agreement, its ownership would increase to approximately 64%. Thermo will be able to control the election of all of the members of our board of directors and the vote on substantially all other matters, including significant corporate transactions such as the approval of a merger or other transaction involving our sale.

29


          Thermo is controlled by James Monroe III, our chairman and chief executive officer. Through Thermo, Mr. Monroe holds equity interests in, and serves as an executive officer or director of, a diverse group of privately-owned businesses not otherwise related to us. Although Mr. Monroe receives no compensation from us, he has advised us that he intends to devote whatever portion of his time is necessary to perform his duties as our chairman and chief executive officer. We do reimburse Thermo and Mr. Monroe for certain expenses they incur in connection with our business. See "Management—Executive Compensation" and "Certain Relationships and Related Party Transactions—Services Provided by Thermo."

          The interests of Thermo may conflict with the interests of our other stockholders. Thermo may take actions it believes will benefit its equity investment in us even though such actions might not be in your best interests as a holder of our common stock.

As a "controlled company," as defined in the NASDAQ Marketplace Rules, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements.

          Upon completion of this offering, Thermo will own common stock representing more than a majority of the voting power in election of our directors. As a result, we will be considered a "controlled company" within the meaning of the corporate governance standards in the NASDAQ Marketplace Rules. Under these rules, a "controlled company" may elect not to comply with certain corporate governance requirements, including (1) the requirement that a majority of its board of directors consist of independent directors, (2) the requirement that it have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities and (3) the requirement that it have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities. Following this offering, we intend to elect to be treated as a controlled company and thus utilize these exemptions. As a result, we will not have a majority of independent directors nor will we have compensation and nominating/corporate governance committees consisting entirely of independent directors. Accordingly, you will not have the same protection afforded to stockholders of companies that are subject to all of the NASDAQ Marketplace corporate governance requirements.

30


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

          Certain statements in this prospectus are not historical facts and are "forward-looking statements" within the meaning of the U.S. federal securities laws. Words such as "believes," "expects," "estimates," "may," "intends," "should" or "anticipates" and similar expressions or their negatives identify forward-looking statements.

          Forward-looking statements, such as the statements regarding our ability to develop and expand our business, our ability to manage costs, our ability to exploit and respond to technological innovation, the effects of laws and regulations (including tax laws and regulations) and legal and regulatory changes, the opportunities for strategic business combinations and the effects of consolidation in our industry on us and our competitors, our anticipated future revenues, our anticipated capital spending (including for future satellite procurements and launches), our anticipated financial resources, our expectations about the future operational performance of our satellites (including their projected operational lives), the expected strength of and growth prospects for our existing customers and the markets that we serve, and other statements contained in this prospectus regarding matters that are not historical facts, involve predictions. These and similar statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements or industry results to be materially different from any future results, performance or achievements expressed or implied by the statements. These risks and uncertainties include, among other things:

          We caution you that the foregoing list of important factors is not exclusive. These risks and uncertainties could cause actual results to vary materially from future results indicated, expressed or implied in any forward-looking statements. In addition, in light of these risks and uncertainties, the matters referred to in the forward-looking statements contained in this prospectus may not in fact occur. We undertake no obligation to update or revise publicly any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

31


USE OF PROCEEDS

          We estimate that the net proceeds from the sale of the 6,500,000 shares of common stock offered by this prospectus will be approximately $100.0 million, assuming an initial public offering price of $17.00 per share (the mid-point of the estimated price range shown on the cover page of this prospectus) and after deducting estimated underwriting discounts and commissions and estimated offering expenses aggregating approximately $10.5 million that are payable by us.

          Except for funding a $685,848 dividend to Thermo as described under "Dividend Policy and Restrictions," we intend to use the entire net proceeds from this offering to fund in part the procurement and launch of our second-generation satellite constellation and related upgrades to our gateways and other ground facilities. We estimate that the cost to procure and launch these satellites and upgrade these facilities will be approximately $1.0 billion to $1.2 billion between now and 2014. We intend to fund the balance of those costs principally from $100 million of proceeds from the delayed draw term loans under our credit agreement, the remaining proceeds of sales of our common stock under Thermo Funding Company's irrevocable standby stock purchase agreement and approximately $600 million to $800 million in cash generated by our business. Although we expect our cash flow will be sufficient to pay these costs when due, if our future revenues or profitability are substantially below our expectations or the conditions requiring Thermo Funding Company to purchase the stock do not occur and Thermo Funding Company does not elect to purchase the stock during the term of the irrevocable standby stock purchase agreement, we will require additional financing, which may be difficult or expensive to obtain, or we will have to modify our plans.

          We intend to use the net proceeds from any shares sold pursuant to the underwriters' over-allotment option for the same purpose.

          An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold in this offering, assuming no change in the assumed initial public offering price per share, would increase (decrease) the net proceeds from this offering by $15.8 million. A $0.25 increase (decrease) in the assumed public offering price per share of the common stock (the mid-point of the range on the cover page of this prospectus) would increase (decrease) the net proceeds that we receive in this offering by approximately $1.5 million, after deducting underwriting discounts and other fees and expenses payable by us, assuming the number of shares being offered, as set forth on the cover page of this prospectus, does not change. In the event of such a decrease in net proceeds, we will need to seek the balance of the funds from additional cash generated by our business or from additional financing sources.

          We intend to invest the net proceeds from this offering in short-term, interest-bearing marketable securities until they are required for the purpose described above.

32


DIVIDEND POLICY AND RESTRICTIONS

          The operating agreement of Globalstar LLC required that we distribute $685,848 to Thermo at the time of our conversion to a Delaware corporation, which occurred on March 17, 2006. This amount represents a deferred payment of interest that accrued from December 6, 2003 to April 14, 2004 on loans made by Thermo to us that were converted to equity on April 14, 2004. In connection with the negotiation of our credit agreement, Thermo agreed to defer receipt of this payment until we complete this offering. Accordingly, as permitted by our credit agreement, we will distribute the $685,848 to Thermo immediately upon completion of this offering. Otherwise, we have not declared or paid dividends on our common stock in the past, and we do not presently anticipate doing so in the future. Any future determination as to the declaration and payment of dividends will be at the discretion of our board of directors and will depend on then-existing conditions, including our financial condition, results of operations, contractual restrictions, capital requirements, business prospects and any other factors our board of directors may deem relevant. Our credit agreement currently prohibits the payment of other cash dividends on our common stock. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreement."

33


CAPITALIZATION

          The following table sets forth our cash and cash equivalents and capitalization as of June 30, 2006 (1) on an actual basis (adjusted to reflect the filing of our amended and restated certificate of incorporation, the six-for-one split of our common stock and the conversion of our three series of common stock into one class of common stock to be effective immediately prior to this offering), (2) on an as-adjusted basis after giving effect to:

(3) on an as further adjusted basis after giving effect to the foregoing adjustments and the following additional adjustments:

34

          You should read this information in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Selected Historical Consolidated Financial Data" and the audited consolidated financial statements and related notes included elsewhere in this prospectus.

 
   As of June 30, 2006
  
 
   Actual
   As Adjusted
   As Further
Adjusted
  
 
   (Dollars in thousands)

  
Cash and cash equivalents   $ 21,074   $ 121,061   $ 441,061  
   
 
 
 
Debt:                    
  Revolving loans under credit agreement(1)   $ 15,000   $ 15,000   $ 50,000  
  Term loans under credit agreement     —     —     100,000  
  Other long-term debt     504     504     504  
   
 
 
 
    Total long-term debt(2)     15,504     15,504     150,504  
Redeemable common stock, par value $0.0001 per share, 91,986 shares issued and outstanding     5,198     —     —  

Stockholders' equity:
 
 
 
 
 
 
 
 
 
 
  Preferred stock, par value $0.0001 per share, 100,000,000 shares authorized, actual, as adjusted and as further adjusted, no shares issued and outstanding     —     —     —  
  Common stock, par value $0.0001 per share, 800,000,000 shares authorized, 62,783,508 shares issued and outstanding, actual, 69,375,494 shares issued and outstanding, as adjusted, and 80,818,790 shares issued and outstanding, as further adjusted(3)     6     7     8  
  Additional paid-in capital     87,694     192,878     377,877  
  Accumulated other comprehensive loss     (152 )   (152 )   (152 )
  Retained earnings     21,652     21,652     21,652  
   
 
 
 
    Total stockholders' equity     109,200     214,385     399,385  
   
 
 
 
Total capitalization   $ 129,902   $ 229,889   $ 549,889  
   
 
 
 
(1)
Actual and as adjusted excludes the remaining $35.0 million at June 30, 2006 available under the revolving credit facility of our credit agreement.

(2)
Excludes $0.9 million of short-term indebtedness.

(3)
To the extent we change the number of shares of common stock we sell in this offering from the shares we expect to sell or we change the initial public offering price from the $17.00 per share assumed initial offering price, or any combination of these events occurs, our net proceeds from this offering and as adjusted additional paid-in capital may increase or decrease. A $0.25 increase (decrease) in the assumed initial public offering price per share of the common stock, assuming no change in the number of shares of common stock to be sold, would increase (decrease) the net proceeds that we receive in this offering and our as adjusted additional paid-in capital by $1.5 million and an increase (decrease) of 1,000,000 shares from the expected number of shares to be sold in this offering, assuming no change in the assumed initial public offering price per share, would increase (decrease) each of the net proceeds from this offering and our as adjusted additional paid-in capital by approximately $15.8 million.

35


DILUTION

          Dilution is the amount by which the offering price paid by the purchasers of the common stock to be sold in this offering will exceed the net tangible book value per share of common stock after the offering. The net tangible book value per share presented below is equal to the amount of our total tangible assets (total assets less intangible assets of $4.1 million) less total liabilities as of June 30, 2006, divided by the number of shares of our common stock outstanding as of that date. As of June 30, 2006, we had a net tangible book value of $110.3 million, or $1.75 per share (as adjusted to reflect a six-for-one stock split to be effective immediately prior to this offering).

          On a pro forma basis, after giving effect to the stock split and:

our pro forma net tangible book value as of June 30, 2006 would have been $210.7 million, or $3.04 per share of common stock.

          This represents an immediate increase in net tangible book value of $1.29 per share to existing stockholders and an immediate dilution in net tangible book value of $13.96 per share to new investors purchasing shares of common stock in this offering. The following table illustrates this dilution on a per share basis:

Initial public offering price per share         $ 17.00
  Net tangible book value per share at June 30, 2006   $ 1.75      
  Increase in net tangible book value per share attributable to new investors     1.29      
   
     
Pro forma net tangible book value per share after the offering           3.04
         
Dilution per share to new investors         $ 13.96
         

          Assuming the underwriters exercise their over-allotment option in full, existing shareholders would have an immediate increase in adjusted tangible book value of $1.46 per share and investors in this offering would have an immediate dilution of $13.79 per share.

          A $0.25 increase (decrease) in the initial public offering price from the assumed initial public offering price of $17.00 per share would decrease (increase) our net tangible book value after giving effect to this offering by approximately $1.5 million, our pro forma net tangible book value per share after giving effect to the offering by $.02 per share and the dilution in net tangible book value per share to new investors in this offering by $.02 per share, after deducting the estimated underwriting discounts and commissions and estimated aggregate offering expenses payable by us and assuming no other change to the number of shares offered by us as set forth on the cover page of this prospectus. An increase (decrease) of 1,000,000 shares from the expected number of shares to be sold in the offering, assuming no change in the initial public offering price from the price assumed above, would decrease (increase) our net tangible book value after giving effect to this offering by approximately $15.8 million, decrease (increase) our pro forma net tangible book value per share after giving effect to this offering by $.18 per share, and increase (decrease) the dilution in net tangible book value per share to new investors in this offering by $.18 per share, after deducting the estimated underwriting discounts and commissions and estimated aggregate offering expenses payable by us.

36


          The following table summarizes, on the same pro forma basis as of June 30, 2006, the total number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by the existing stockholders and by new investors purchasing shares in this offering:

 
   Shares Purchased
   Total Consideration
    
 
   Average Price
Per Share
 
   Number
   Percent
   Amount
   Percent
Existing stockholders   62,875,494   91 % $ 58,000,000   34 % $ 0.92
New investors   6,500,000   9     110,500,000   66     17.00
   
 
 
 
     
  Total   69,375,494   100 % $ 168,500,000   100 % $ 2.43
   
 
 
 
     

          The following table summarizes the foregoing information assuming, in addition, the issuance of all remaining shares of common stock subject to the irrevocable standby stock purchase agreement with Thermo Funding Company.

 
   Shares Purchased
   Total Consideration
    
 
   Average Price
Per Share
 
   Number
   Percent
   Amount
   Percent
Existing stockholders(1)   74,318,790   92 % $ 243,000,000   69 % $ 3.27
New investors   6,500,000   8     110,500,000   31     17.00
   
 
 
 
     
  Total   80,818,790   100 % $ 353,500,000   100 % $ 4.37
   
 
 
 
     
(1)
If our other stockholders who have not waived their pre-emptive rights elect to purchase all 785,328 shares of common stock which they could purchase as a result of our pre-emptive rights offering, the table would appear as follows:

 
   Shares Purchased
   Total Consideration
    
 
   Average Price
Per Share
 
   Number
   Percent
   Amount
   Percent
Existing stockholders   75,104,118   92 % $ 255,696,162   70 % $ 3.40
New investors   6,500,000   8     110,500,000   30     17.00
   
 
 
 
     
  Total   81,604,118   100 % $ 366,196,162   100 % $ 4.49
   
 
 
 
     

          Upon completion of the offering, we expect to issue an aggregate of approximately 265,000 restricted shares of our common stock as a bonus to substantially all of our employees. See "Management—Equity Incentive Plan." These issuances will result in further dilution to new investors. To the extent that we grant additional stock awards in the future, there may be further dilution to new investors.

37


SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

          The following table presents our selected historical consolidated financial information and other data for the years ended December 31, 2001 and 2002, for the period from January 1, 2003 through December 4, 2003, for the period from December 5, 2003 through December 31, 2003, for the years ended December 31, 2004 and 2005 and for the six months ended June 30, 2005 and 2006, and as of December 31, 2001, 2002, 2003, 2004 and 2005 and June 30, 2006. The selected historical consolidated financial data of Old Globalstar (Predecessor) for the years ended December 31, 2001 and 2002 and as of December 31, 2001 and 2002 has been derived from Old Globalstar's consolidated financial statements, which are not included in this prospectus. Our selected historical consolidated financial data as of December 31, 2003 has been derived from our audited consolidated balance sheet as of that date, which is not included in this prospectus. Our selected historical consolidated financial data for the period from January 1, 2003 to December 4, 2003 (Predecessor), the period from December 5, 2003 to December 31, 2003 (Successor), and the years ended December 31, 2004 and 2005, and as of December 31, 2004 and 2005, has been derived from our audited consolidated financial statements, which are included in this prospectus. Our selected historical consolidated financial data for the six months ended June 30, 2005 and 2006, and as of June 30, 2006, is derived from our unaudited consolidated financial statements, which also are included in this prospectus. In the opinion of management, the unaudited financial information includes all adjustments, consisting of only normal recurring adjustments, considered necessary for a fair presentation of this information. The results of operations for interim periods are not necessarily indicative of the results that may be expected for the entire year.

          The columns in the following tables entitled "Predecessor" contain financial information with respect to the business and operations of Old Globalstar for periods prior to December 5, 2003, the date on which we obtained control of its assets.

          You should read the selected historical consolidated financial data set forth below together with our consolidated financial statements and the related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations," all included elsewhere in this prospectus. The selected historical consolidated financial data set forth below are not necessarily indicative of the results of future operations.

38

 
   Predecessor
   Successor
  
 
   Year Ended
December 31,
    
    
   Year Ended
December 31,
    
    
  
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
   Six Months Ended June 30,
  
 
   2001
   2002
   2004
   2005
   2005
   2006
  
 
   (unaudited)

    
    
    
    
   (unaudited)

  
 
   (Dollars in thousands, except per share data, average monthly revenue per user, average monthly churn rate and cost per gross addition)

  
Statement of Operations Data:                                                  
Revenue:                                                  
  Service revenue   $ 6,252   $ 17,182   $ 40,048   $ 2,387   $ 57,927   $ 81,472   $ 34,965   $ 42,202  
  Subscriber equipment sales(1)     152     7,457     16,295     1,470     26,441     45,675     15,360     26,539  
   
 
 
 
 
 
 
 
 
Total revenue     6,404     24,639     56,343     3,857     84,368     127,147     50,325     68,741  
   
 
 
 
 
 
 
 
 
Operating Expenses:                                                  
  Cost of services (exclusive of depreciation and amortization shown separately below)     56,074     26,379     26,629     1,931     25,208     25,432     13,780     13,888  
  Cost of subscriber equipment sales(2)     130     5,650     12,881     635     23,399     38,742     12,216     25,769  
  Marketing, general and administrative     101,392     39,104     28,814     4,950     32,151     37,945     16,626     20,691  
  Restructuring     12,035     7,694     5,381     690     5,078     —     —     —  
  Launch termination costs     —     18,379     —     —     —     —     —     —  
  Depreciation and amortization     35,554     30,904     31,473     125     1,959     3,044     1,240     2,698  
  Impairment of assets     —     —     211,854     —     114     114     39     —  
   
 
 
 
 
 
 
 
 
Total operating expenses     205,185     128,110     317,032     8,331     87,909     105,277     43,901     63,046  
   
 
 
 
 
 
 
 
 
Operating Income (Loss)     (198,781 )   (103,471 )   (260,689 )   (4,474 )   (3,541 )   21,870     6,424     5,695  
  Interest income     4,513     101     7     7     58     242     62     366  
  Interest expense(3)     (381,170 )   (46,523 )   (1,513 )   (131 )   (1,382 )   (269 )   (194 )   (108 )
  Other     —     —     485     44     921     (622 )   (538 )   (1,760 )
   
 
 
 
 
 
 
 
 
Total other income (expense)     (376,657 )   (46,422 )   (1,021 )   (80 )   (403 )   (649 )   (670 )   (1,502 )
Income (loss) before income taxes     (575,438 )   (149,893 )   (261,710 )   (4,554 )   (3,944 )   21,221     5,754     4,193  
Income tax expense (benefit)     73     66     170     (37 )   (4,314 )   2,502     2,898     (17,459 )
   
 
 
 
 
 
 
 
 
Net Income (Loss)   $ (575,511 ) $ (149,959 ) $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
   
 
 
 
 
 
 
 
 
Earnings (Loss) Per Share Data(4):                                                  
  Earnings (loss) per common share—basic     N/A     N/A     N/A   $ (0.08 ) $ 0.01   $ 0.30   $ 0.05   $ 0.35  
  Earnings (loss) per common share—diluted     N/A     N/A     N/A   $ (0.08 ) $ 0.01   $ 0.30   $ 0.05   $ 0.35  
  Weighted average shares—basic     N/A     N/A     N/A     60,000,000     60,463,917     61,855,668     61,855,668     61,957,906  
  Weighted average shares—diluted     N/A     N/A     N/A     60,000,000     60,463,917     61,955,874     61,955,874     62,287,618  
  Pro forma (unaudited) earnings (loss) per share—diluted (including all shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares subject to the pre-emptive rights offering)     N/A     N/A     N/A   $ (0.06 ) $ 0.01   $ 0.25   $ 0.04   $ 0.29  
  Pro forma (unaudited) weighted average shares—diluted (including all shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares subject to the pre-emptive rights offering)     N/A     N/A     N/A     73,156,464     73,620,381     75,112,338     75,112,338     75,443,830  
                                                   

39

Pro Forma C Corporation Data(5) (unaudited):                                                  
  Historical income before                                                  
    income taxes     N/A     N/A     N/A     N/A     N/A   $ 21,221   $ 5,754     N/A  
  Pro forma income tax expense (benefit)     N/A     N/A     N/A     N/A     N/A     6,931     3,656     N/A  
                                 
 
       
  Pro forma net earnings     N/A     N/A     N/A     N/A     N/A   $ 14,290   $ 2,098     N/A  
                                 
 
       
  Pro forma net earnings per share—basic     N/A     N/A     N/A     N/A     N/A   $ 0.23   $ 0.03     N/A  
  Pro forma net earnings per share—diluted     N/A     N/A     N/A     N/A     N/A   $ 0.23   $ 0.03     N/A  
  Weighted average shares—basic     N/A     N/A     N/A     N/A     N/A     61,855,668     61,855,668     N/A  
  Weighted average shares—diluted     N/A     N/A     N/A     N/A     N/A     61,955,874     61,955,874     N/A  
Other Data (for the period) (unaudited):                                                  
Average monthly revenue per user(6)                                                  
  Retail     N/A     N/A   $ 69.66   $ 62.90   $ 67.93   $ 68.10   $ 66.88   $ 57.52  
  Independent gateway operators     N/A     N/A     12.32     9.72     9.66     10.70     9.09     8.38  
  Simplex     N/A     N/A     N/A     N/A     9.22     6.64     6.09     4.51  
Number of subscribers     N/A     N/A     105,571     109,503     141,450     195,968     158,071     236,515  
Average monthly churn rate(7)     N/A     N/A     0.84 %   1.18 %   1.51 %   1.27 %   1.08 %   1.09 %
EBITDA(8)     N/A     N/A   $ (228,731 ) $ (4,305 ) $ (661 ) $ 24,292   $ 7,126   $ 6,633  
Capital expenditures     N/A     N/A   $ 1,058   $ 10   $ 4,015   $ 9,885   $ 2,740   $ 42,480  
Cost per gross addition(9)     N/A     N/A   $ 262   $ 200   $ 230   $ 248   $ 334   $ 248  
 
   Predecessor
   Successor
Balance Sheet Data:
   As of
December 31,
2001
   As of
December 31,
2002
   As of
December 31,
2003
   As of
December 31,
2004
   As of
December 31,
2005
   As of
June 30,
2006
 
   (unaudited)

    
    
    
   (unaudited)
 
   (In thousands)
Cash and cash equivalents   $ 55,265   $ 15,248   $ 20,026   $ 13,330   $ 20,270   $ 21,074
Total assets   $ 456,391   $ 294,374   $ 48,214   $ 63,897   $ 113,545   $ 196,232
Long-term debt(10)   $ 363,828   $ 3,425,921   $ 3,426,338   $ 3,278   $ 631   $ 15,504
Redeemable common stock   $ —   $ —   $ —   $ —   $ —   $ 5,198
Ownership equity (deficit)   $ (2,997,753 ) $ (3,150,598 ) $ (3,415,195 ) $ 40,421   $ 71,430   $ 109,200
(1)
Includes related party sales of $440 for the year ended December 31, 2005.

(2)
Includes costs of related party sales of $314 for the year ended December 31, 2005.

(3)
Includes related party amounts of $337 (January 1, 2003 - December 4, 2003), $131 (December 5, 2003 - December 31, 2003), $1,324 (year ended December 31, 2004), $176 (year ended December 31, 2005) and $117 and $0 (six months ended June 30, 2005 and 2006, respectively).

(4)
Basic and diluted earnings (loss) per share have been calculated in accordance with the SEC rules for initial public offerings. These rules require that the weighted average share calculation give retroactive effect to any changes in our capital structure. Therefore, weighted average shares for purposes of the basic and diluted earnings per share calculation has been adjusted to reflect the six-for-one stock split we expect to effect immediately prior to this offering and the issuance of the 6,500,000 shares of our common stock being offered hereby. Weighted average shares for purposes of the pro forma diluted per share calculations have also been adjusted to reflect the sale of all of the shares subject to the irrevocable standby stock purchase agreement with Thermo Funding Company and 785,328 shares of common stock pursuant to our pre-emptive rights offering as if such sales occurred on December 5, 2003.

(5)
Prior to January 1, 2006, we and Predecessor were treated as a partnership for federal income tax purposes. A partnership passes through essentially all taxable income and losses to its partners or members and does not pay federal income taxes at the partnership level. Historical income tax expense consists mainly of foreign, state and local income taxes. On January 1, 2006, we elected to be taxed as a C corporation. For comparative purposes, we have included a pro forma provision for income taxes assuming we (or Predecessor) had been taxed as a C corporation for the year ended December 31, 2005 and the six months ended June 30, 2005. See "Management's Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies and Estimates—Income Taxes" and Note 13 to our consolidated financial statements.

40

(6)
Average monthly revenue per user measures service revenues per month divided by the average number of subscribers during that month. Average monthly revenue per user as so defined may not be similar to average monthly revenue per user as defined by other companies in our industry, is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that average monthly revenue per user provides useful information concerning the appeal of our rate plans and service offerings and our performance in attracting and retaining high value customers.

(7)
We define churn rate as the aggregate number of our retail subscribers (excluding Simplex customers and customers of the independent gateway operators) who cancel service during a month, divided by the average number of retail subscribers during the month. Others in our industry may calculate churn rate differently. Churn rate is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that churn rate provides useful information concerning customer satisfaction with our services and products.

(8)
EBITDA represents earnings before interest, income taxes, depreciation and amortization. EBITDA does not represent and should not be considered as an alternative to GAAP measurements, such as net income, and our calculations thereof may not be comparable to similarly entitled measures reported by other companies.


We use EBITDA as the primary measurement of our operating performance because, by eliminating interest, taxes and the non-cash items of depreciation and amortization, we believe it best reflects changes across time in our performance, including the effects of pricing, cost control and other operational decisions. Our management uses EBITDA for planning purposes, including the preparation of our annual operating budget. We believe that EBITDA also is useful to investors because it is frequently used by securities analysts, investors and other interested parties in their evaluation of companies in industries similar to ours. As indicated, EBITDA does not include interest expense on borrowed money or depreciation expense on our capital assets or the payment of taxes, which are necessary elements of our operations. Because EBITDA does not account for these expenses, its utility as a measure of our operating performance has material limitations. Because of these limitations, management does not view EBITDA in isolation and also uses other measures, such as net income, revenues and operating profit, to measure operating performance.


The following is a reconciliation of EBITDA to net income (loss):

 
   Predecessor
   Successor
  
 
   Year Ended December 31,
    
    
   Year Ended December 31,
   Six Months Ended June 30,
  
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
  
 
   2001
   2002
   2004
   2005
   2005
   2006
  
 
   (In thousands)

  
Net income (loss)   $ (575,511 ) $ (149,959 ) $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
Interest expense (income), net     376,657     46,422     1,506     124     1,324     27     132     (258 )
Income tax expense (benefit)(a)     73     66     170     (37 )   (4,314 )   2,502     2,898     (17,459 )
Depreciation and amortization     35,554     30,904     31,473     125     1,959     3,044     1,240     2,698  
   
 
 
 
 
 
 
 
 
EBITDA   $ (163,227 ) $ (72,567 ) $ (228,731 ) $ (4,305 ) $ (661 ) $ 24,292   $ 7,126   $ 6,633  
   
 
 
 
 
 
 
 
 

The following table provides supplemental information as to unusual and other items that are reflected in EBITDA:

 
   Predecessor
   Successor
 
    
    
   Year Ended
December 31,
   Six Months Ended
June 30,
 
   January 1
through
December 4,
2003
   December 5
through
December 31,
2003
 
   2004
   2005
   2005
   2006
 
   (In thousands)
Satellite failures(a)   $ 2,527     —   $ 114   $ 114   $ 39   —
ELSACOM settlement(b)   $ 744     —     —     —     —   —
Pension adjustment(c)   $ 941     —     —     —     —   —
UT writeoff recovery(d)   $ (103 )   —     —     —     —   —
Asset impairment(e)   $ 211,854     —     —     —     —   —
Restructuring (other)(f)   $ 5,381   $ 690   $ 5,078     —     —   —
(9)
We define cost per gross addition as total sales and marketing costs and agent and internal salesperson commissions in a given period relating to retail customers divided by the total number of retail subscriber activations over the same period. Cost per gross addition is not a measurement under GAAP and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that cost per gross addition provides useful information concerning the cost of increasing our number of subscribers.

(10)
Includes liabilities subject to compromise as of December 31, 2002 and 2003 in the amount of $3,425,921 and $3,421,967, respectively.

41


MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

          You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our audited and unaudited consolidated financial statements and the related notes appearing elsewhere in this prospectus. In doing so, you should keep in mind that the discussion, except for the six months ended June 30, 2006, relates to periods prior to the formation of Globalstar, Inc., that it includes discussions of the financial condition and results of operations of Globalstar LLC and its predecessor Old Globalstar and that, in that connection, it relates in part to periods prior to the consummation of the Reorganization.

Overview

          We are a leading provider of mobile voice and data communication services via satellite. Our communications platform extends telecommunications beyond the boundaries of terrestrial wireline and wireless telecommunications networks to serve our customer's desire for connectivity and reliable service at all times and locations. Using 43 in-orbit satellites and 25 ground stations, which we call gateways, we offer voice and data communications services to government agencies, businesses and other customers in over 120 countries.

          As described under "Company History," on February 15, 2002, Old Globalstar and three of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. We were formed in Delaware in November 2003 for the purpose of acquiring substantially all the assets of Old Globalstar and its subsidiaries. With Bankruptcy Court approval, we acquired Old Globalstar's assets and assumed certain of its liabilities in a two-step transaction, with the first step completed on December 5, 2003, and the second step on April 14, 2004. On January 1, 2006, we elected to be taxed as a C corporation, and on March 17, 2006, we converted from a Delaware limited liability company to a Delaware corporation.

          Management determined that operational control of our business passed to us with the completion of the first step of the acquisition on December 5, 2003. Accordingly, Old Globalstar's results of operations, financial position and cash flows prior to December 5, 2003 are presented as "Predecessor" or "Predecessor Period(s)." The results of operations, financial position and cash flows thereafter are collectively presented as "Successor" or "Successor Period(s)." The acquisition was accounted for using the purchase method of accounting.

          Material Trends and Uncertainties.    Our satellite communications business, by providing critical, reliable mobile communications to our subscribers, serves principally the following markets: government, public safety and disaster relief; recreation and personal; maritime and fishing; business, financial and insurance; natural resources, mining and forestry; oil and gas; construction; utilities; and transportation. Both our industry and our own subscriber base have been growing rapidly as a result of:

In addition, our industry as a whole has benefited from the improved financial condition of most industry participants following their financial reorganizations or conversions to private ownership.

42


          Nonetheless, we face a number of challenges and uncertainties, including:

43

          Service Revenues.    We earn revenues primarily from the sale of satellite communications services to direct customers, resellers and independent gateway operators. These services include mobile and fixed voice and data services and asset tracking and monitoring services. We generated approximately 70%, 69%, 64% and 61% of our consolidated revenues from the sale of our satellite communication services in 2003, 2004, 2005 and the first six months of 2006, respectively. The decrease in service revenue as a percentage of total revenue has resulted primarily from a substantial increase in product sales. Additionally, beginning in 2005 we significantly increased sales of our Liberty Plans for which payment is received in advance but revenue is recognized based on usage, thereby increasing our deferred revenue due to the prepaid nature of the Plans while decreasing our current recognized revenue. These sales should result in higher service revenue in future periods. In 2005, we also experienced increasing demand for our services driven by increased awareness of the need for reliable communication services in the wake of Hurricanes Katrina, Rita and Wilma and the Asian tsunami. As of December 31, 2005 and June 30, 2006, we served approximately 196,000 and 236,500 subscribers, respectively, which represented 39% and 50% increases over our subscribers at December 31, 2004 and June 30, 2005, respectively. Although the majority of our subscribers utilize our network principally for voice communication services, an increasing portion of our revenue is derived from the sale of high and low speed data services, including our Simplex one-way data transmission service. Simplex is especially useful for remotely tracking the location of a subscriber's remote assets, such as shipping containers. As a result of the above-mentioned factors and our marketing efforts, our subscriber base has continued to grow. Accordingly, our service revenue during the year ended December 31, 2005 and the six months ended June 30, 2006 increased by 41% and 21% over the year ended December 31, 2004 and the six months ended June 30, 2005, respectively.

          Subscriber Equipment Sales Revenue.    We also sell related voice and data equipment to our customers. We generated approximately 30%, 31%, 36% and 39% of our consolidated revenues from subscriber equipment sales in 2003, 2004, 2005 and the first six months of 2006, respectively. As a percentage of our revenue, equipment sales increased faster than our service revenues in 2005 and the first six months of 2006 primarily as a result of significant customer growth in our major markets and the Liberty Plan effect described above. Our subscriber equipment sales revenue increased by 73% for each of the year ended December 31, 2005 and the six months ended June 30, 2006 compared to 2004 and the first six months of 2005, respectively. We believe that these increases in equipment sales revenue were the result of better marketing efforts, heightened awareness of emergency preparedness and increased knowledge by our customers of the competitive pricing of our product offerings. We price our subscriber equipment sales to maintain an overall positive margin on these sales rather than using the sales as "loss leaders" to promote the sale of our services.

44


          The table below sets forth amounts and percentages of our revenue by type of service and equipment sales for the years ended December 31, 2003, 2004 and 2005 and the six months ended June 30, 2005 and 2006.

 
   Year Ended
December 31,
2003 Combined(1)
   Year Ended
December 31, 2004
   Year Ended
December 31, 2005
   Six Months Ended
June 30, 2005
   Six Months Ended
June 30, 2006
  
 
   Revenue
   % of
Total Revenue
   Revenue
   % of
Total
Revenue
   Revenue
   % of
Total
Revenue
   Revenue
   % of
Total
Revenue
   Revenue
   % of
Total
Revenue
  
 
   (Dollars in thousands)

  
Service Revenue:                                                    
  Mobile (voice and data)   $ 30,453   51 % $ 43,661   52 % $ 60,092   47 % $ 25,975   52 % $ 31,930   46 %
  Fixed (voice and data)     2,903   5     5,315   6     6,637   5     2,922   6     3,805   6  
  Satellite data modems (data)     683   1     770   1     1,240   1     554   1     678   1  
  Asset tracking and monitoring     19   0     208   0     945   1     250   0     727   1  
  Independent gateway operators     6,820   11     7,089   8     9,098   7     3,661   7     3,892   6  
  Other(2)     1,557   3     884   1     3,460   3     1,603   3     1,170   2  
   
 
 
 
 
 
 
 
 
 
 
    Subtotal     42,435   70     57,927   69     81,472   64     34,965   69     42,202   61  
   
 
 
 
 
 
 
 
 
 
 
Subscriber Equipment Sales:                                                    
  Mobile equipment     11,580   19     12,611   15     23,662   19     7,162   14     12,965   19  
  Fixed equipment     1,425   2     4,551   5     5,278   4     1,967   4     3,115   5  
  Data equipment     —   0     560   1     1,085   1     381   1     1,198   2  
  Accessories/misc.     4,760   8     8,719   10     15,650   12     5,850   12     9,261   13  
   
 
 
 
 
 
 
 
 
 
 
    Subtotal     17,765   30     26,441   31     45,675   36     15,360   31     26,539   39  
   
 
 
 
 
 
 
 
 
 
 
Total Revenue   $ 60,200   100 % $ 84,368   100 % $ 127,147   100 % $ 50,325   100 % $ 68,741   100 %
   
 
 
 
 
 
 
 
 
 
 
(1)
In order to provide a comparison for purposes of the discussion of our results of operations for the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006, the results of Old Globalstar for the period from January 1, 2003 to December 4, 2003 and the results of our company for the period from December 5, 2003 to December 31, 2003 are presented on a combined basis for the year ended December 31, 2003. Although we have provided these results in order to provide a comparison for purposes of the discussion of the periods presented, this presentation is not in accordance with GAAP and the periods presented are not comparable due to the change in basis of assets that resulted from the application of the purchase method of accounting in connection with the Reorganization. Revenues and operating expenses of the Predecessor and the Successor entities are comparable in nature, however, the write down of assets due to the Reorganization reduced post-Reorganization depreciation expense and resulted in a one-time charge to the Predecessor. Because we and Old Globalstar are different reporting entities, this information should be considered as supplemental information only.

(2)
Includes activation fees and engineering service revenue.

          Operating Expenses.    Our operating expenses are comprised principally of:


          Due to the fixed nature of our network costs, our cost of services has been fairly consistent over the past three fiscal years. Our increased sales and number of subscribers have caused increases both in our cost of subscriber equipment and in our marketing, general and administrative expenses. As we continue

45

to grow our subscriber base, we expect these costs to continue to increase. Customer acquisition costs have ranged from $230 to $257 per gross addition over the last three fiscal years. We expect to experience growth in general and administrative costs associated with increased revenue, such as bad debt allowance, human resources and collections, as well as costs associated with being a public company including Sarbanes-Oxley related compliance costs. We anticipate these compliance costs will be approximately $1.0 to $1.5 million in 2007. We expect the rate of growth of these costs to be substantially lower than the growth rate of our revenue. Acquisition of new fixed assets, especially gateways acquired from independent gateway operators and new gateways built by us, has increased our depreciation and amortization expense.

          Compensation Expense.    As a result of our planned issuance of approximately 265,000 shares of restricted stock under our 2006 Equity Incentive Plan as a bonus to substantially all of our employees upon completion of this offering, we will incur a pre-tax non-cash charge of approximately $1.1 million in the fourth quarter of 2006 and approximately $3.4 million will be amortized over the shares' three-year vesting period. See "Management—Equity Incentive Plan." In 2005 we accrued $1.6 million with respect to our executive incentive compensation plan. See "Management—Executive Incentive Compensation Plan."

          Operating Income (Loss).    Our operating income (loss) grew from an operating loss of $3.5 million for the year ended December 31, 2004, to operating income of $21.9 million for the year ended December 31, 2005. Our operating income grew between 2004 and 2005 due principally to increased revenue which resulted from growth in our number of subscribers from approximately 141,500 to 196,000. Our operating income for the six months ended June 30, 2006 was $5.7 million compared to $6.4 million for the same period in 2005, a decrease of $0.7 million, or 11.3%. This $0.7 million decrease was a result of slightly lower margins on equipment sales in the first six months of 2006, the Liberty Plan effect on recognition of service revenue described above, and customer acquisition costs related to a 24,000 increase in wholesale and retail subscribers compared to the first six months of 2005. Our operating income margin, which is operating income or loss divided by total revenue, was 17.2% for the year ended December 31, 2005. Our operating income margin for the six months ended June 30, 2006 was 8.3% compared to 12.8% for the same period in 2005. Due to the fixed cost nature of our network, our operating income margin is particularly sensitive to increases in costs of subscriber equipment and customer acquisition costs.

          Deferred Financing Costs.    At June 30, 2006, we had recorded $3.6 million of deferred financing costs relating to our credit agreement. These costs will be amortized over the term of the credit agreement. In addition, as of June 30, 2006, we had incurred deferred transaction costs related to our initial public offering of $0.5 million.

Independent Gateway Acquisition Strategy

          Currently 16 of the gateways in our network are owned and operated by unaffiliated companies, which we call independent gateway operators, some of whom operate more than one gateway. Some of these independent gateway operators have been unable to grow their businesses adequately due in part to limited resources. Old Globalstar initially developed the independent gateway strategy to establish operations in multiple territories with reduced demands on its capital. In addition, for political or other reasons, there are territories in which it is impractical for us to operate directly. We sell services to the independent gateway operators on a wholesale basis and they resell them to their customers on a retail basis.

          We have acquired, and intend to continue to pursue the acquisition of, independent gateway operators when we believe we can do so on favorable terms. We believe that these acquisitions can enhance our results of operations in three respects. First, we believe that, with our greater financial and technical resources, we can grow our subscriber base and revenue faster than some of the independent gateway operators. Second, we realize greater margin on retail sales to individual subscribers than we do

46


on wholesale sales to independent gateway operators. Third, we believe expanding the territory we serve directly will better position us to market our services directly to multinational customers who require a global communications provider. However, acquisitions of independent gateway operators do require us to commit capital for acquisition of their assets, as well as management resources and working capital to support the gateway operations, and therefore increase our risk in operating in these territories directly rather than through the independent gateway operators. In addition, operating the acquired gateways increases our marketing, general and administrative expenses. Our credit agreement limits to $25.0 million the aggregate amount we may invest in foreign acquisitions without the consent of our lenders.

          Prior to the Reorganization, Old Globalstar acquired three independent gateway operators in the United States, Canada and Western Europe for minimal costs. In February 2005, we purchased the Venezuela gateway for $1.6 million in cash to be paid over four years. Effective January 1, 2006, we acquired the Central American gateway and other real property assets for $5.2 million, paid principally in shares of our common stock. Because independent gateway operations vary in size and value, we are unable to predict the timing or cost of further acquisions.

Performance Indicators

          Our management reviews and analyzes several key performance indicators in order to manage our business and assess the quality of and potential variability of our earnings and cash flows. These key performance indicators include:


Seasonality

          Our results of operations are subject to seasonal usage changes. April through October are typically our peak months for service revenues and equipment sales. Government customers in North America tend to use our services during summer months, often in support of relief activities after events such as hurricanes, forest fires and other natural disasters.

Critical Accounting Policies and Estimates

          The preparation of our consolidated financial statements requires us to make estimates and judgments that affect our revenues and expenses for the periods reported and the reported amounts of our assets and liabilities, including contingent assets and liabilities, as of the date of the financial statements. We evaluate our estimates and judgments, including those related to revenue recognition, inventory, long-lived assets, income taxes and pension obligations, on an on-going basis. We base our estimates and judgments on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from our estimates under different assumptions or conditions. We believe the following accounting policies are most important to understanding our financial results and condition and require complex or subjective judgments and estimates.

47


Revenue Recognition

          Customer activation fees are deferred and recognized over four to five year periods, which approximates the estimated average life of the customer relationship. We periodically evaluate the estimated customer relationship life. Historically, changes in the estimated life have not been material to our financial statements.

          Monthly access fees billed to retail customers and resellers, representing the minimum monthly charge for each line of service based on its associated rate plan, are billed on the first day of each monthly bill cycle. Airtime minute fees in excess of the monthly access fees are billed in arrears on the first day of each monthly billing cycle. To the extent that billing cycles fall during the course of a given month and a portion of the monthly services has not been delivered at month end, fees are prorated and fees associated with the undelivered portion of a given month are deferred.

          We also provide certain engineering services to assist customers in developing new technologies related to our system. The revenues associated with these services are recorded when the services are rendered, and the expenses are recorded when incurred. During the year ended December 31, 2005 and the first six months of 2006, we recorded engineering services revenues of $3.5 million and $1.1 million, respectively, and related costs of $1.7 million and $0.9 million. Engineering services revenues and cost of services were not significant in 2003 and 2004.

          Our Liberty Plans were introduced in August 2004 and grew substantially in 2005 and 2006. These Plans require users to pre-pay usage charges for an entire 12-month period, which results in the deferral of certain of our revenues. Under our revenue recognition policy for Liberty Plans, we defer revenue until the earlier of when the minutes are used or when these minutes expire. Any unused minutes are recognized as revenue at the end of the 12-month period. Most of our customers have not used all the minutes that are available to them or have not used them at the pace anticipated, which, with the rapid acceptance of our Liberty Plans, has caused us to defer increasingly large amounts of service revenue. At June 30, 2006, our deferred revenue aggregated approximately $21.8 million. Accordingly, we expect significant revenues from 2005 and 2006 purchases of Liberty Plans to be recognized during the remainder of 2006 and in 2007 as the minutes are used or expire.

          We own and operate our satellite constellation and earn a portion of our revenues through the sale of airtime minutes on a wholesale basis to the independent gateway operators. Revenue from services provided to independent gateway operators is recognized based upon airtime minutes used by customers of independent gateway operators and contractual fee arrangements. Where collection is uncertain, revenue is recognized when cash payment is received.

          Subscriber equipment revenue represents the sale of fixed and mobile user terminals and accessories. Revenue is recognized upon shipment provided title and risk of loss have passed to the customer, persuasive evidence of an arrangement exists, the fee is fixed and determinable and collection is probable.

          In December 2002, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables." EITF Issue No. 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. In some arrangements, the different revenue-generating activities (deliveries) are sufficiently separable and there exists sufficient evidence of their fair values to account separately for some or all of the deliveries (that is, there are separate units of accounting). In other arrangements, some or all of the deliveries are not independently functional, or there is not sufficient evidence of their fair values to account for them separately. EITF Issue No. 00-21 addresses when, and if so, how an arrangement involving multiple deliverables should be divided into separate units of accounting. EITF Issue No. 00-21 does not change otherwise applicable revenue recognition criteria.

48


Inventory

          Inventory consists of purchased products, including fixed and mobile user terminals, accessories and gateway spare parts. Prior to December 5, 2003, inventory was stated at the lower of cost or market. Inventory acquired on December 5, 2003 was stated at fair value at the date of our acquisition of the assets of Old Globalstar and subsequent inventory transactions are stated at the lower of cost or market. At the end of each quarter, product sales and returns from the previous twelve months are reviewed and any excess and obsolete inventory is written off. Cost is computed using the first-in, first-out (FIFO) method. Inventory allowances for inventories with a lower market value or that are slow moving are recorded in the period of determination.

Globalstar System, Property and Equipment

          Our Globalstar System assets include costs for the design, manufacture, test, and launch of a constellation of low earth orbit satellites, including in-orbit spare satellites, which we refer to as the space segment, and primary and backup terrestrial control centers and gateways, which we refer to as the ground segment.

          Loss from an in-orbit failure of a satellite is recognized as an expense in the period it is determined that the satellite is not recoverable.

          The carrying value of the Globalstar System is reviewed for impairment whenever events or changes in circumstances indicate that the recorded value of the space segment and ground segment, taken as a whole, may not be recoverable. We look to current and future undiscounted cash flows, excluding financing costs, as primary indicators of recoverability. If an impairment is determined to exist, any related impairment loss is calculated based on fair value.

          Property and equipment was stated at historical cost, less accumulated depreciation and impairment charges until December 5, 2003, when the assets were acquired by us and recorded based on our allocation of acquisition cost. Because the acquisition cost of these assets was substantially below their historic cost or replacement cost, current depreciation and amortization costs have been reduced substantially for GAAP purposes, thereby increasing net income or decreasing net loss. As we increase our capital expenditures, especially to procure and launch our second-generation satellite constellation, we expect GAAP depreciation to increase substantially. Depreciation is provided using the straight-line method over the estimated useful lives. For this purpose, we have estimated that our satellites have an estimated useful life of 10 years from commencement of service, or through December 31, 2009. To verify the life of our satellites, we commissioned a report by an independent consultant to assess the health and life of our current constellation. Leasehold improvements are amortized on a straight-line basis over the shorter of the estimated useful life of the improvement or the term of the lease, generally five years. We perform ongoing evaluations of the estimated useful lives of our property and equipment for depreciation purposes. The estimated useful lives are determined and continually evaluated based on the period over which services are expected to be rendered by the asset. Maintenance and repair items are expensed as incurred.

Income Taxes

          Until January 1, 2006, we were treated as a partnership for U.S. tax purposes. Generally, our taxable income or loss, deductions and credits were passed through to our members. We did have some corporate subsidiaries that required a tax provision or benefit using the asset and liability method of accounting for income taxes as prescribed by Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS No. 109). Effective January 1, 2006, we elected to be taxed as a C corporation in the United States. When an enterprise changes its tax status from non-taxable to taxable, under SFAS No. 109 the effect of recognizing deferred tax assets and liabilities is included in income from continuing operations in the period of change. As a result, we recognized a gross deferred tax asset of $204.2 million

49


and a gross deferred tax liability of $0.1 million on January 1, 2006. SFAS No. 109 also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, we take into account various factors including the expected level of future taxable income and available tax planning strategies. Accordingly, we also determined that it was more likely than not that we would not recognize the entire deferred tax asset; therefore, we established a valuation allowance of $182.7 million, resulting in recognition of a net deferred tax benefit of $21.4 million. We will continue to monitor the situation to ensure that, if and when we are more likely than not to be able to utilize more of the deferred tax asset, we will be able to reduce the valuation allowance accordingly.

          As of December 31, 2004 and 2005, our corporate subsidiaries had gross deferred tax assets of approximately $10.6 million and $7.6 million, respectively. Valuation reserves of $5.9 million and $5.2 million at December 31, 2004 and 2005, respectively, reflect concerns about our ability to generate sufficient income in those corporate subsidiaries to utilize the deferred tax assets. The amount of the deferred tax asset considered realizable could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.

          We have substantially more basis in our U.S. assets for net tax purposes than we do for book purposes. We estimate that as of January 1, 2006, the tax basis of our net assets was approximately $497.8 million in excess of our book basis. Assuming an average U.S. tax rate of 41%, depreciation of these net assets could reduce our income taxes payable by approximately $204.1 million in the future. The $497.8 million represents the historical cost of the net assets purchased by Old Globalstar net of any tax depreciation or amortization taken to date. When we purchased Old Globalstar in 2004, the acquisition was treated as a purchase of assets under GAAP. For tax purposes, the transaction was treated as a contribution of assets to a partnership and resulted in a carryover of tax basis.

Spare Satellites and Launch Costs

          Old Globalstar purchased eight additional satellites in 1998 for $148.0 million (including performance incentives of up to $16.0 million) to serve as on-ground spares. Costs of $147.0 million (including a portion of the performance incentives) were previously recognized for these spare satellites. Prior to 2002, Old Globalstar recorded an impairment of these costs, and at December 31, 2002 they were carried at $24.2 million. All eight satellites have been completed, and are being readied for launch. Depreciation of these assets will not begin until the satellites are placed in service. As of December 31, 2004 and 2005, these assets were recorded at $0.9 million and $3.0 million, respectively, of which $0.9 million was based on our allocation of the Reorganization cost on December 5, 2003. We expect to launch these satellites during 2007.

Pension Obligations

          We have various company-sponsored retirement plans covering certain current and past U.S.-based employees. Until June 1, 2004, substantially all of Old and New Globalstar's employees and retirees who participated and/or met the vesting criteria for the plan were participants in the Retirement Plan of Space Systems/Loral, Inc. (the "Loral Plan"), a defined benefit pension plan. The accrual of benefits in the Old Globalstar segment of the Loral Plan was curtailed, or frozen, by the administrator of the Loral Plan as of October 23, 2003. Prior to October 23, 2003, benefits for the Loral Plan were generally based upon compensation, length of service with the company and age of the participant. On June 1, 2004, the assets and frozen pension obligations of the segment attributable to our employees were transferred into a new Globalstar Retirement Plan (the "Globalstar Plan"). The Globalstar Plan remains frozen and participants are not currently accruing benefits beyond those accrued as of October 23, 2003. Our funding policy is to fund the Globalstar Plan in accordance with the Internal Revenue Code and regulations.

50


          We account for our defined benefit pension and life insurance benefit plans in accordance with Statement of Financial Accounting Standards No. 87, Employers' Accounting for Pensions and SFAS No. 106, Employer's Accounting for Postretirement Benefits Other than Pensions, which require that amounts recognized in financial statements be determined on an actuarial basis. Pension benefits associated with these plans are generally based primarily on each participant's years of service, compensation, and age at retirement or termination. Two critical assumptions, the discount rate and the expected return on plan assets, are important elements of expense and liability measurement. See Note 12 to the Consolidated Financial Statements for additional discussion of actuarial assumptions used in determining the pension liability and expense. We utilize the services of a third party to perform these actuarial calculations.

          We determine the discount rate used to measure plan liabilities as of the December 31 measurement date for the U.S. pension plan. The discount rate reflects the current rate at which the associated liabilities could be effectively settled at the end of the year. In estimating this rate, we look at rates of return on fixed-income investments of similar duration to the liabilities in the plan that receive high, investment grade ratings by recognized ratings agencies. Using these methodologies, we determined a discount rate of 5.5% to be appropriate as of December 31, 2005, which is a reduction of 0.25 percentage points from the rate used as of December 31, 2004. An increase of 1.0% in the discount rate would have decreased our plan liabilities as of December 31, 2005 by $1.6 million and a decrease of 1.0% could have increased our plan liabilities by $2.0 million.

          A significant element in determining our pension expense in accordance with SFAS No. 87 is the expected return on plan assets, which is based on historical results for similar allocations among asset classes. For the U.S. pension plan, our assumption for the expected return on plan assets was 7.5% for 2005. See Note 12 to the Consolidated Financial Statements for information on how this rate is determined. An increase (decrease) of 1.0% in the expected return on plan assets would have decreased (increased) our pension expense for 2005 by less than $0.1 million.

          The difference between the expected return and the actual return on plan assets is deferred and, under certain circumstances, amortized over future years of service. Therefore, the net deferral of past asset gains (losses) ultimately affects future pension expense. This is also true of changes to actuarial assumptions. As of December 31, 2005, we had net unrecognized pension actuarial losses of $2.6 million. These amounts represent potential future pension and postretirement expenses that would be amortized over average future service periods.

          For the year ended December 31, 2005, we recognized total pre-tax pension expense (after settlements, curtailments and special termination benefits) of $0.2 million, up from less than $0.1 million in 2004. Pension expense (before settlements, curtailments and special termination benefits) is anticipated to be approximately $0.1 million in 2006.

51

Results of Operations

Comparison of Results of Operations for the Six Months Ended June 30, 2005 and 2006

Statements of Operations
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
   % Change
  
 
   (In thousands)

    
  
Revenue:                  
  Service revenue   $ 34,965   $ 42,202   20.7  
  Subscriber equipment sales     15,360     26,539   72.8  
   
 
     
    Total Revenue     50,325     68,741   36.6  
   
 
     
Operating Expenses:                  
  Cost of services (exclusive of depreciation and amortization shown separately below)     13,780     13,888   0.8  
  Cost of subscriber equipment sales     12,216     25,769   110.9  
  Marketing, general and administrative     16,626     20,691   24.4  
  Depreciation and amortization     1,240     2,698   117.6  
  Impairment of assets     39     —   (100.0 )
   
 
     
    Total Operating Expenses     43,901     63,046   43.6  
   
 
     
Operating Income     6,424     5,695   (11.3 )
Interest income     62     366   490.3  
Interest expense(1)     (194 )   (108 ) (44.3 )
Other expense     (538 )   (1,760 ) 227.1  
   
 
     
Income Before Income Taxes     5,754     4,193   (27.1 )
Income tax expense (benefit)     2,898     (17,459 ) NA  
   
 
     
Net Income   $ 2,856   $ 21,652   658.1  
   
 
     
(1)
Includes related party amount of $117 for the six months ended June 30, 2005 and $0 for the six months ended June 30, 2006.

          Revenue.    Total revenue increased by $18.4 million, or approximately 36.6%, to $68.7 million for the six months ended June 30, 2006, from $50.3 million for the six months ended June 30, 2005, due principally to continued growth in our core markets in North America, increased subscribers, and stronger performance by the independent gateway operators. Total revenue growth in the six months ended June 30, 2006 also benefited from our sale of over 3,000 fixed units to our independent gateway operator in China for $0.7 million and our sale of three Simplex appliqués (switching equipment) for $1.3 million. Our average retail revenue per user during the six months ended June 30, 2006 decreased by 14.0% to $57.52 from $66.88 for the six months ended June 30, 2005. This decline resulted from the rapid acceptance of our Liberty Plans, which were introduced broadly in April 2005 and which require subscribers to pre-pay for a year of service. Liberty Plans reduce current period revenue because revenue is not recognized until minutes are used or expire. Unused minutes are recognized as revenue at the expiration of a Plan. Subscribers generally do not use all of the minutes for which they have prepaid. Accordingly, we expect an increase in our average retail revenue per user in later periods as the minutes related to Liberty Plans sold in prior periods are used or expire. Average monthly subscriber churn was unchanged at 1.1% for the six months ended June 30, 2006 compared to the six months ended June 30, 2005.

52


          Service Revenue.    Service revenue increased $7.2 million, or approximately 20.7%, to $42.2 million for the six months ended June 30, 2006, from $35.0 million for the six months ended June 30, 2005. This increase was driven by our 50% subscriber growth over the prior period and increased usage of minutes related to the higher number of subscribers. Simplex subscribers grew from approximately 11,000 at June 30, 2005 to approximately 41,000 at June 30, 2006. This growth in Simplex subscribers was due to an expanded availability of products and marketing efforts by our data sales group.

          Subscriber Equipment Sales.    Subscriber equipment sales increased by $11.2 million, or approximately 72.8%, to $26.5 million for the six months ended June 30, 2006, from $15.4 million for the six months ended June 30, 2005. This increase was driven by growth in the number of our subscribers and the desire of agents and resellers to stock up on inventory before the 2006 hurricane season in response to product shortages experienced by them during the 2005 hurricane season. Subscriber equipment sales for the six months ended June 30, 2006 included the sales of fixed units and Simplex appliqués described above.

          Operating Expenses.    Total operating expenses increased $19.1 million, or approximately 43.6%, to $63.0 million for the six months ended June 30, 2006, from $43.9 million for the six months ended June 30, 2005. This increase was due primarily to higher cost of subscriber equipment and marketing, general and administrative expenses, as well as increased depreciation and amortization.

          Cost of Services.    Our cost of services remained generally flat, with only a slight increase of $0.1 million, or approximately 0.8%, to $13.9 million for the six months ended June 30, 2006, from $13.8 million for the six months ended June 30, 2005. Our cost of services is comprised primarily of network operating costs, which are generally fixed in nature. There were some increases to our headcount and telecommunication costs associated with having more subscribers and usage. However, these were partially offset by reimbursement of $1.8 million from our independent gateway operators for their portion of the costs associated with maintaining the gateway network software and hardware. Maintenance costs related to all 25 gateways are paid by us and then divided equally among all gateway operators. As independent gateway operators reimburse us for their portion, we record this as an expense reduction.

          Cost of Subscriber Equipment Sales.    Cost of subscriber equipment sales increased $13.6 million, or approximately 110.9%, to $25.8 million for the six months ended June 30, 2006, from $12.2 million for the six months ended June 30, 2005. This increase was due in part to the costs of the fixed units and Simplex appliqués described above. Costs of subscriber equipment sales increased at a faster rate than subscriber equipment sales as we exhausted our inventory of lower priced equipment purchased from QUALCOMM.

          Marketing, General and Administrative.    Marketing, general and administrative expenses increased $4.1 million, or approximately 24.4%, to $20.7 million for the six months ended June 30, 2006, from $16.6 million for the six months ended June 30, 2005. This increase was due primarily to increased sales and marketing efforts. Although our cost per gross addition dropped to $248 for the six months ended June 30, 2006 from $334 for the six months ended June 30, 2005, our overall sales and marketing expenses grew as a result of adding approximately 41,000 subscribers in the six months ended June 30, 2006 compared to the approximately 17,000 we added in the first six months of 2005. Our cost per gross addition includes expenses incurred for advertising, marketing support, and direct customer acquisition costs. We also increased our headcount in the sales and marketing area and support staff for the six months ended June 30, 2006. In addition, our marketing and general administration costs in the six months ended June 30, 2006 increased by approximately $0.9 million as a result of consolidating the Central American independent gateway operation.

          Depreciation and Amortization.    Depreciation and amortization expense increased $1.5 million, or 117.6%, to $2.7 million for the six months ended June 30, 2006, from $1.2 million for the six months ended June 30, 2005. This increase was due primarily to the depreciation associated with our Sebring,

53


Florida gateway, which became operational in July 2005. We also acquired an additional gateway in Central America. These acquisitions resulted in additional depreciation expense of $0.9 million for the six months ended June 30, 2006.

          Operating Income.    Operating income decreased $0.7 million, or approximately 11.3%, to $5.7 million for the six months ended June 30, 2006, from $6.4 million for the six months ended June 30, 2005. The decrease was due to reductions in equipment margins, as our total equipment revenue increased 72.8% while our cost of subscriber equipment sales increased 110.9%. In addition, as discussed above, we added substantially more new subscribers during the six months ended June 30, 2006 than during the first six months of 2005, which had the short-term effect of lowering current period margins because all subscriber acquisition costs are expensed in the current period.

          Interest Income.    Interest income increased to $0.4 million for the six months ended June 30, 2006 from $0.1 million in the first six months of 2005. This increase was due to increased cash balances on hand and higher yields on those balances.

          Interest Expense.    Interest expense decreased by $0.1 million, to $0.1 million for the six months ended June 30, 2006 from $0.2 million for the six months ended June 30, 2005. This decrease was due to a settlement with Loral effective July 31, 2005 which eliminated a note payable to Loral.

          Other Income (Expense).    Other income (expense) generally consists of foreign exchange transaction gains and losses. We recorded $1.8 million in foreign exchange losses in the six months ended June 30, 2006 compared to $0.5 million for the first six months of 2005. These losses related primarily to the performance of the U.S. dollar against the Canadian dollar and the Euro. Also, during the first six months of 2006 we engaged in a large Euro denominated transaction related to the scheduled 2007 launch of our spare satellites which we did not have in the first six months of 2005.

          Income Tax Expense (Benefit).    During the six months ended June 30, 2005, our domestic entities were treated as a partnership for U.S. income tax purposes and thus we did not have a tax provision for the domestic entities. We recognized a deferred tax expense of $2.5 million in foreign subsidiaries for that period. On January 1, 2006, we elected to be taxed as a C corporation for U.S. income tax purposes. The change in tax status resulted in the domestic entities recognizing a net deferred tax benefit of $21.4 million related to the establishment of deferred tax assets and liabilities. This $21.4 million deferred tax benefit was partially offset by $3.9 million of deferred and current income tax expense related to year to date operating income in the United States and Canada.

          Net Income.    Our net income increased $18.8 million to $21.7 million for the six months ended June 30, 2006, from $2.9 million for the six months ended June 30, 2005. This increase resulted in large part from our income tax benefit. Excluding the income tax benefit, our net income for the six months ended June 30, 2006, would have been $0.3 million. If we had been taxed as a C corporation for the six months ended June 30, 2005, our net income for that period would have been $2.1 million.

54

Comparison of Results of Operations for the Years Ended December 31, 2004 and 2005

Statements of Operations
   Year
Ended
December 31,
2004
   Year
Ended
December 31,
2005
   % Change
  
 
   (In thousands)

    
  
Revenue:                  
  Service revenue   $ 57,927   $ 81,472   40.6  
  Subscriber equipment sales(1)     26,441     45,675   72.7  
   
 
     
    Total Revenue     84,368     127,147   50.7  
   
 
     
Operating Expenses:                  
  Cost of services (exclusive of depreciation and amortization shown separately below)     25,208     25,432   0.9  
  Cost of subscriber equipment sales (2)     23,399     38,742   65.6  
  Marketing, general and administrative     32,151     37,945   18.0  
  Restructuring     5,078     —   (100.0 )
  Depreciation and amortization     1,959     3,044   55.4  
  Impairment of assets     114     114   —  
   
 
     
    Total Operating Expenses     87,909     105,277   19.8  
   
 
     
Operating Income (Loss)     (3,541 )   21,870   N/A  
Interest income     58     242   317.2  
Interest expense(3)     (1,382 )   (269 ) (80.5 )
Other income (expense)     921     (622 ) N/A  
   
 
     
Income (Loss) Before Income Taxes     (3,944 )   21,221   N/A  
Income tax expense (benefit)     (4,314 )   2,502   N/A  
   
 
     
Net Income   $ 370   $ 18,719   4,959.2  
   
 
     
(1)
Includes related party amount of $440 for the year ended December 31, 2005.

(2)
Includes related party amount of $314 for the year ended December 31, 2005.

(3)
Includes related party amounts of $1,324 for the year ended December 31, 2004 and $176 for the year ended December 31, 2005.

          Revenue.    Total revenue increased by $42.8 million, or approximately 50.7%, to $127.1 million for the year ended December 31, 2005 from $84.4 million for the year ended December 31, 2004, due principally to the growth of overall demand for our services, which resulted in increases in both our service revenue and subscriber equipment sales. At December 31, 2004, we had approximately 141,000 subscribers; by December 31, 2005, our number of subscribers had increased by 39.0% to approximately 196,000. Our average retail revenue per user during 2005 increased to $68.10 from $67.93 in 2004. This modest increase was the result of our continued effort to target customers who provide high average retail revenue per user. Average monthly subscriber churn for the year ended December 31, 2005 dropped to 1.3% compared to 1.5% for the year ended December 31, 2004. The primary reason for this decline was a one-time review of our billing system in April 2004 following our emergence from the Reorganization, which caused the average monthly churn for 2004 to be unusually high.

          Service Revenue.    Service revenue increased $23.5 million, or approximately 40.6%, to $81.5 million for the year ended December 31, 2005 from $57.9 million in 2004. This growth was driven by increased demand for our mobile voice services by governmental agencies and substantial customer growth in all other markets. Our new pricing plans, which proved to be more attractive to customers than prior plans,

55


and the need for emergency communications capabilities during 2005's natural disasters contributed to this growth. We also continued to maintain a stable average revenue per user and low churn rate, compared to the prior period, both of which we believe contributed to our overall revenue growth.

          Our Liberty Plans were introduced in August 2004 and grew substantially in 2005. These Plans allow users to pre-pay usage charges for an entire 12-month period, which results in deferral of revenue until the minutes are used or expire. Any unused minutes are recognized as revenue at the end of the 12-month period. Most of our customers have not used all the minutes that are available to them or have not used them at the pace anticipated, which, with the rapid acceptance of our Liberty Plans, has caused us to defer increasingly large amounts of service revenue. Accordingly, we expect significant revenue from 2005 and 2006 purchases of Liberty Plans to be recognized in 2006 and 2007 as the minutes are used or expire.

          Subscriber Equipment Sales.    Subscriber equipment sales increased by $19.2 million, or approximately 72.7%, to $45.7 million for the year ended December 31, 2005 from $26.4 million for 2004. Increased subscriber equipment sales were driven by the increase in our subscriber base, which resulted from more attractive pricing plans and the need for emergency communications during natural disasters in 2005. As a percentage of our revenue, subscriber equipment sales increased faster than our service revenue primarily as a result of significant growth in the acceptance of our Liberty Plans, which were introduced in August 2004 but whose popularity increased significantly in the latter half of 2005. The effect of our Liberty Plans and revenue recognition policies is to cause service revenues to lag behind equipment sales revenue related to the same subscriber.

          Operating Expenses.    Total operating expenses increased $17.4 million, or approximately 19.8%, to $105.3 million for the year ended December 31, 2005, from $87.9 million for 2004. This increase was due primarily to higher cost of subscriber equipment and increased marketing, general and administrative expenses related to the addition of approximately 55,000 subscribers, which was partially offset by our not incurring any restructuring charges in 2005.

          Cost of Services.    Our cost of services for the year ended December 31, 2005 increased by $0.2 million, or approximately 0.9%, to $25.4 million from $25.2 million for 2004. These costs generally remain flat due to the fixed nature of our network operating costs.

          Cost of Subscriber Equipment Sales.    Cost of subscriber equipment sales increased by $15.3 million, or approximately 65.6%, to $38.7 million in the year ended December 31, 2005 from $23.4 million in 2004, primarily as a result of increased equipment sales due to continued improvement in demand for our products and related services in all markets and to selling lower cost QUALCOMM mobile units in 2004. These units were acquired throughout 2004 at a substantially lower cost than the units acquired from QUALCOMM in 2005.

          Marketing, General and Administrative.    Marketing, general and administrative expenses for the year ended December 31, 2005 increased by $5.8 million, or approximately 18.0%, to $37.9 million compared to $32.2 million for 2004. Our cost per gross addition increased $18 to $248 for the year ended December 31, 2005 from $230 for the year ended December 31, 2004. This increase resulted from our adding additional sales and marketing personnel and increased marketing efforts following our emergence from the Reorganization. We also incurred increased legal expenses relating principally to litigation settlements. In addition, our marketing and general administration costs increased by approximately $1.4 million as a result of consolidating the Venezuelan independent gateway operation.

          Restructuring.    For the year ended December 31, 2005, we recorded no restructuring expense. We recorded $5.1 million in 2004 for restructuring obligations relating to Old Globalstar which we assumed in the Reorganization. These restructuring expenses in 2004 consisted of employee retention payments, success fees related to the restructuring of Old Globalstar and related legal fees. We no longer have any restructuring obligations.

56


          Depreciation and Amortization.    Depreciation and amortization expense increased $1.1 million, or 55.4%, to $3.0 million for the year ended December 31, 2005, from $2.0 million for 2004. This increase related to the Sebring, Florida gateway, which we placed in service in July 2005, and the purchase of the Venezuelan independent gateway operator.

          Impairment of Assets.    We recorded impairment charges of $0.1 million for satellite failures in each of the years ended December 31, 2004 and 2005.

          Operating Income (Loss).    Operating income increased $25.4 million, to $21.9 million for the year ended December 31, 2005, compared to an operating loss of $3.5 million for 2004. The increase was due primarily to increased subscribers and resulting service revenue and subscriber equipment sales and to not incurring any restructuring expense in 2005, as described above. The growth in marketing, general and administrative expenses was more than offset by increased service revenue and subscriber equipment sales. Additionally, our increased ability to collect reimbursable costs from the independent gateway operators contributed to improved financial performance as it reduced our operating costs.

          Interest Income.    Interest income increased by $0.2 million, or 317.2%, to approximately $0.2 million in the year ended December 31, 2005 from less than $0.1 million in 2004. This increase reflected increased cash balances on hand and higher yields on those balances.

          Interest Expense.    Interest expense decreased by $1.1 million to $0.3 million in the year ended December 31, 2005 from $1.4 million in 2004. This decrease resulted from lower levels of indebtedness in 2005.

          Other Income (Expense).    Other income (expense) decreased by $1.5 million to an expense of $0.6 million in 2005 from income of $0.9 million in 2004. This decrease resulted from less than favorable exchange rates between the U.S. dollar and the Euro.

          Income Tax Expense (Benefit).    For the years ended 2004 and 2005, we were a partnership for United States tax purposes and thus did not have a tax provision for the entities located domestically. For the year ended December 31, 2004, we determined that $4.8 million of the deferred tax assets in our Canadian subsidiary was "more likely than not" going to be recognized. As a result, we reversed a corresponding amount of the valuation allowance at year end, resulting in a net income tax benefit of $4.3 million. For the year ended December 31, 2005, we determined that the remaining $4.2 million deferred tax asset in our Canadian subsidiary also was "more likely than not" going to be recognized and reversed all remaining valuation allowance, and we utilized the deferred tax assets previously recognized, resulting in a net income tax expense of $2.5 million.

          Net Income.    Our net income increased $18.3 million to $18.7 million for the year ended December 31, 2005, compared to net income of $0.4 million for 2004, as a result of robust revenue growth and recognition of the deferred tax assets described above. If we had been taxed as a C corporation in 2005, our net income would have been $14.3 million.

57


Comparison of Results of Operations for the Years Ended December 31, 2003 and 2004

Statements of Operations
   Year Ended
December 31,
2003
Combined(1)
   Year Ended
December 31,
2004
   % Change
  
 
   (In thousands)

    
  
Revenue:                  
  Service revenue   $ 42,435   $ 57,927   36.5  
  Subscriber equipment sales     17,765     26,441   48.8  
   
 
     
    Total Revenue     60,200     84,368   40.1  
   
 
     

Operating Expenses:
 
 
 
 
 
 
 
 
 
  Cost of services (exclusive of depreciation and amortization shown separately below)     28,560     25,208   (11.7 )
  Cost of subscriber equipment sales     13,516     23,399   73.1  
  Marketing, general and administrative     33,764     32,151   (4.8 )
  Restructuring     6,071     5,078   (16.4 )
  Depreciation and amortization     31,598     1,959   (93.8 )
  Impairment of assets     211,854     114   (99.9 )
   
 
     
    Total Operating Expenses     325,363     87,909   (73.0 )
   
 
     

Operating Loss
 
 
(265,163
)
 
(3,541
)
(98.7
)
Interest income     14     58   314.3  
Interest expense(2)     (1,644 )   (1,382 ) (15.9 )
Other income     529     921   74.1  
   
 
     
(Loss) Before Income Taxes     (266,264 )   (3,944 ) (98.5 )
Income tax expense (benefit)     133     (4,314 ) N/A  
   
 
     
Net Income (Loss)   $ (266,397 ) $ 370   N/A  
   
 
     
(1)
In order to provide a comparison for purposes of the discussion of our results of operations for the years ended December 31, 2003 and 2004, the results of Old Globalstar for the period from January 1, 2003 to December 4, 2003 and the results of our company for the period from December 5, 2003 to December 31, 2003 are presented on a combined basis for the year ended December 31, 2003. Although we have provided these results in order to provide a comparison for purposes of the discussion of the periods presented, this presentation is not in accordance with GAAP and the periods presented are not comparable due to the change in basis of assets that resulted from the application of the purchase method of accounting in connection with the Reorganization. Revenues and operating expenses of the Predecessor and the Successor entities are comparable in nature, however, the write down of assets due to the Reorganization reduced post-Reorganization depreciation expense and resulted in a one-time charge to the Predecessor. Because we and Old Globalstar are different reporting entities, this information should be considered as supplemental information only.

(2)
Includes related party amounts of $468 and $1,324 for the years ended December 31, 2003 and December 31, 2004, respectively.

          Revenue.    Total revenue increased $24.2 million, or approximately 40.1%, to $84.4 million for the year ended December 31, 2004 from $60.2 million for the prior year. This growth was due to an approximately 32,000 increase in our subscriber base as a result of our emergence from the Reorganization, which increased consumer confidence in our network and our ability to commit additional resources to our sales and marketing efforts. Our average retail revenue per user for the year ended December 31, 2004 decreased to $67.93 from $69.05 for the year ended December 31, 2003. Average

58


monthly subscriber churn increased 0.6% to 1.5% for the year ended December 31, 2004 from 0.9% for the year ended December 31, 2003. The primary reason for this increase in our churn rate was a one-time review of our billing system in April 2004, following our emergence from the Reorganization, which caused the average monthly churn for 2004 to be unusually high.

          Service Revenue.    Service revenue for the year ended December 31, 2004 increased $15.5 million, or approximately 36.5%, to $57.9 million from $42.4 million for 2003. This increase was due primarily to increased demand for our mobile voice services as reflected in continued rapid growth in our subscriber base and acceptance of our higher priced plans.

          Subscriber Equipment Sales.    Subscriber equipment sales increased by $8.7 million, or approximately 48.8%, to $26.4 million for the year ended December 31, 2004, compared to $17.8 million for 2003. The increase was due primarily to an increase in sales of accessories. Demand for our services and equipment was also stimulated by the completion of the Reorganization, which resulted in greater awareness of our products and services in the marketplace.

          Operating Expenses.    Total operating expenses decreased $237.5 million to $87.9 million, or approximately 73.0%, for the year ended December 31, 2004, compared to $325.4 million for 2003. This decrease was primarily a result of not having a significant impairment charge for 2004. In December 2003, Old Globalstar recorded a $211.9 million impairment of assets. This charge was the result of the purchase price allocation of our acquisition of the assets and certain of the liabilities of Old Globalstar.

          Cost of Services.    Cost of services decreased by $3.4 million, or approximately 11.7%, to $25.2 million for the year ended December 31, 2004, compared to $28.6 million for 2003. Cost of services is comprised primarily of network operation costs. These costs are fixed in nature and do not fluctuate significantly with service revenue. In 2003, we recorded a one-time expense of $2.5 million relating to a satellite failure, which made the expenses for 2003 unusually high. Without that expense, the variance in costs of services between the years ended December 31, 2004 and 2003 would have been only 3.4%.

          Cost of Subscriber Equipment Sales.    Cost of subscriber equipment sales increased by $9.9 million, or approximately 73.1%, to $23.4 million for the year ended December 31, 2004, compared to $13.5 million for 2003. This increase was the result of increased sales of our equipment in 2004 and higher equipment costs relative to 2003 because of higher priced inventory purchases in 2004.

          Marketing, General and Administrative.    Marketing, general and administrative expenses decreased by $1.6 million, or approximately 4.8%, to $32.2 million for the year ended December 31, 2004, compared to $33.8 million for 2003. This decrease in marketing, general, and administrative expenses was primarily the result of moving to a smaller, less expensive headquarters in April 2004 and reducing headcount upon emergence from restructuring. Our cost per gross addition decreased $27 to $230 for the year ended December 31, 2004 from $257 for the year ended December 31, 2003. As we continued to upgrade our sales and marketing activities in 2004, the resulting growth in subscribers caused our cost per gross addition to decline.

          Restructuring.    Restructuring costs decreased $1.0 million, or approximately 16.4%, to $5.1 million for the year ended December 31, 2004 compared to $6.1 million for 2003. This decrease reflected the winding down of the restructuring process in 2004 after the Reorganization.

          Depreciation and Amortization.    Depreciation and amortization expense decreased $29.6 million, or approximately 93.8%, to $2.0 million for the year ended December 31, 2004 from $31.6 million for 2003. Depreciation expense for the periods is not comparable as these periods represent Predecessor and Successor entities with different book values of assets. This decrease was the result of a lower depreciable book basis of our fixed assets following the December 2003 impairment charge described below.

59


          Impairment of Assets.    As a result of our acquisition of the assets and assumption of certain liabilities of Old Globalstar in the Reorganization, it became necessary for Old Globalstar to treat certain assets as impaired after we allocated the purchase price. Old Globalstar recorded an impairment charge of $211.9 million in December 2003, immediately preceding the Reorganization. The vast majority of the assets that were impaired related to satellites and ground facilities. Due to this impairment charge, the carrying value of these assets on our balance sheet was reduced, resulting in substantially lower depreciation charges in future periods. In 2004, we experienced a satellite failure that resulted in a $0.1 million impairment charge.

          Operating Income (Loss).    We decreased our operating loss by $261.6 million to a loss of $3.5 million for the year ended December 31, 2004, from a loss of $265.2 million for the year ended December 31, 2003. This decrease was due primarily to the absence in 2004 of the $211.9 million asset impairment charge in 2003 that resulted from our acquisition of the assets and certain of the liabilities of Old Globalstar. The impairment charge also resulted in lower depreciation and amortization expense. In addition, our revenue increased by 40.1% in 2004 due to growth in our subscribers.

          Interest Expense.    Interest expense decreased by $0.3 million to $1.4 million in the year ended December 31, 2004, compared to $1.6 million in 2003. This decrease resulted from incurring less debtor-in-possession financing in 2004.

          Other Income (Expense).    Other income increased by $0.4 million, or 74.1%, to $0.9 million in the year ended December 31, 2004, compared to $0.5 million in 2003. This increase resulted from favorable exchange rates in Canada and Europe.

          Income Tax Expense (Benefit).    For the years ended 2003 and 2004, we were a partnership for United States tax purposes and thus did not have a tax provision for the entities located domestically. For the year ended December 31, 2004, we determined that $4.8 million of the deferred tax assets in our Canadian subsidiary was "more likely than not" going to be recognized. As a result, we reversed a corresponding amount of the valuation allowance at year-end. Income tax expense of $0.1 million for 2003 relates to foreign taxes paid.

          Net Income (Loss).    Our net income increased by $266.8 million to $0.4 million of income for the year ended December 31, 2004, compared to a net loss of $266.4 million for 2003. The results for 2003 were impacted by the $211.9 million asset impairment charge in December 2003. After eliminating the effects of this charge, our net income grew substantially due to sustained revenue growth in all areas of our business.

60

Liquidity and Capital Resources

          The following table shows our cash flows from operating, investing and financing activities for the years ended December 31, 2003, 2004 and 2005 and the six months ended June 30, 2005 and 2006:

Statements of Cash Flows
   Year Ended
December 31,
2003
Combined(1)
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
  
 
   (In thousands)

  
Net cash from operating activities   $ (20,372 ) $ (4,849 ) $ 13,694   $ 1,383   $ 3,230  
Net cash from investing activities     927     (4,015 )   (10,141 )   (3,182 )   (42,671 )
Net cash from financing activities     24,187     2,000     2,899     4,146     40,119  
Effect of exchange rate changes on cash     —     168     488     244     126  
   
 
 
 
 
 
  Net Increase (Decrease) in Cash and Cash Equivalents   $ 4,742   $ (6,696 ) $ 6,940   $ 2,591   $ 804  
   
 
 
 
 
 
(1)
In order to provide a comparison for purposes of the discussion of our results of operations for the years ended December 31, 2003 and 2004, the results of Old Globalstar for the period from January 1, 2003 to December 4, 2003 and the results of our company for the period from December 5, 2003 to December 31, 2003 are presented on a combined basis for the year ended December 31, 2003. Although we have provided these results in order to provide a comparison for purposes of the discussion of the periods presented, this presentation is not in accordance with GAAP and the periods presented are not comparable due to the change in basis of assets that resulted from the application of the purchase method of accounting in connection with the Reorganization. Revenues and operating expenses of the Predecessor and the Successor entities are comparable in nature, however, the write down of assets due to the Reorganization reduced post-Reorganization depreciation expense and resulted in a one-time charge to the Predecessor. Because we and Old Globalstar are different reporting entities, this information should be considered as supplemental information only.

          Our principal sources of liquidity are our credit agreement and the irrevocable standby stock purchase agreement discussed below, our existing cash and internally generated cash flow from operations.

          Our principal short-term liquidity needs are to fund our working capital ($30.7 million at June 30, 2006, which our management believes is sufficient for our present requirements), to pay amounts due within 12 months for the launch of our eight spare satellites (approximately $57 million) and to make any initial payments to procure our second-generation satellite constellation and upgrade our gateways and other ground facilities, in a total amount not yet determined, but which will include approximately $9.8 million payable to Alcatel under the Authorization to Proceed as described in "Prospectus Summary—Recent Developments." During 2006, we also expect to contribute an aggregate of $2.1 million to our pension plan. We expect to fund these requirements with cash on hand ($21.1 million at June 30, 2006), cash flow from operations ($3.2 million for the six months ended June 30, 2006), proceeds from the sale of our common stock to Thermo Funding Company (whose remaining commitment under the standby stock purchase agreement at June 30, 2006 was $185 million), and borrowings under the revolving credit facility of our credit agreement (of which $35.0 million was undrawn at June 30, 2006).

          Our principal long-term liquidity needs are to fund our working capital, including any growth in working capital required by growth in our business, to pay the costs of procuring and deploying our second-generation satellite constellation and upgrading our gateways and other ground facilities, which we expect to aggregate $1.0 to $1.2 billion between now and 2014, and to fund the cash requirements of our independent gateway operator acquisition strategy, in an amount not determinable at this time. We expect to fund our long-term capital needs with the proceeds from this offering, the $100.0 million delayed draw term loans and the revolving credit facility under our credit agreement, the remaining funds available from sales of our common stock under Thermo Funding Company's standby stock purchase agreement and, most importantly, $600 million to $800 million of cash from our operations.

          To the extent additional funds are necessary to meet our long-term liquidity needs, we anticipate that they will be obtained through the incurrence of additional indebtedness, additional equity financings or a combination of these potential sources of funds.

61


          Although we believe that these sources will provide sufficient liquidity for us to meet our long-term liquidity requirements, our liquidity and our ability to fund these needs will depend to a significant extent on our future financial performance, which will be subject in part to general economic, financial, regulatory and other factors that are beyond our control, including trends in our industry and technology discussed elsewhere in this prospectus. In addition to these general economic and industry factors, the principal factors determining whether our cash flows will be sufficient to meet our long-term liquidity requirements will be our ability to continue to provide attractive and competitive services and products, maintain the health of our current satellite constellation until we can deploy our second-generation satellite constellation, increase our number of subscribers and average revenue per user, control our costs, and maintain our margins and profitability. If those factors change significantly or other unexpected factors adversely affect us, our business may not generate sufficient cash flow from operations and future financings may not be available on terms acceptable to us or at all to meet our liquidity needs.

          We derive additional liquidity from our Liberty Plans, which provide for payment in advance of a full year of services. Revenue is recognized as the services are provided or the contract expires. As a result, cash flow from the sale of Liberty Plans precedes recognition of the associated revenues.

          In assessing our liquidity, management reviews and analyzes our current cash on-hand, the average number of days our accounts receivable are outstanding, the contractual rates that we have established with our vendors, inventory turns, foreign exchange rates, capital expenditure commitments and income tax rates.

Net Cash from Operating Activities

          Net cash provided by operating activities for the six-month period ended June 30, 2006 increased to $3.2 million from $1.4 million for the six month period ended June 30, 2005. This increase was attributable primarily to increased sales activity and rapid inventory turnover.

          Net cash provided by operating activities for the year ended December 31, 2005 was $13.7 million compared to $4.8 million used in operating activities in 2004. This increase in cash from operations of $18.5 million was attributable mainly to substantial revenue growth driven by our increased subscriber base, better operating margins and the absence of restructuring costs in 2005.

          Net cash used in operating activities for the year ended December 31, 2004 decreased to $4.8 million from $20.4 million for 2003. The increase in cash provided by operations of $15.6 million was attributable mainly to substantial revenue growth, reduced operating expenses upon our emergence from the Reorganization and lower restructuring costs, partially offset by higher accounts receivable at year-end.

Net Cash from Investing Activities

          Cash used in investing activities was $42.7 million for the six months ended June 30, 2006, compared to $3.2 million for the same period in 2005. This increase was the result of capital expenditures for the launch of our spare satellites as well as for the construction of our new gateways in Florida and Alaska. The investment in the acquisition of independent gateway operations decreased from $0.4 million for the six-month period ended June 30, 2005 to $0.2 million for the same period in 2006 due to reduced acquisition activities. During the first six months of 2006, we also procured services related to the launch of our spare satellites in the amount of $38.7 million. The expenditures on property, plant and equipment increased by $1.1 million to $3.8 million for the six-month period ended June 30, 2006 from $2.7 million for the comparable period in 2005 due primarily to construction activity on the Alaskan gateway and information system upgrades.

          Cash used in investing activities for the year ended December 31, 2005 increased $6.1 million to $10.1 million from $4.0 million in 2004. This increase was due to capital expenditures relating to our Florida and Alaska gateways and procuring services for the test and launch of our eight spare satellites.

62


          Cash used in investing activities for the year ended December 31, 2004 increased $4.9 million to $4.0 million as compared to cash flows provided by investing activities of $0.9 million for 2003. This increase was primarily due to capital expenditures for relocating our facilities and the commencement of construction of our gateway in Florida. The positive amount in 2003 was the result of payment received from ELSACOM (one of the independent gateway operators) for a past due production gateway receivable in the amount of $2.2 million that was classified as a long-term asset. This amount was partially offset by miscellaneous capital expenditures related to maintaining our network.

Net Cash from Financing Activities

          Net cash provided by financing activities for the six-month period ended June 30, 2006 increased by $36.0 million to $40.1 million from $4.1 million provided by financing activities the same period in 2005. The increase was the result of drawing $15.0 million of the revolving credit facility under our credit agreement, receipt of $13.0 million from Thermo representing its remaining equity commitment in connection with the Reorganization, and receipt of $15.0 million from Thermo Funding Company for equity purchased pursuant to its irrevocable standby stock purchase agreement.

          Net cash provided by financing activities for the year ended December 31, 2005 increased by $0.9 million to $2.9 million from $2.0 million in 2004. This increase was due to proceeds from subscriptions receivable exceeding payments on notes payable.

          Net cash provided by financing activities for the year ended December 31, 2004 decreased by $22.2 million to $2.0 million from $24.2 million in 2003. This decrease was the result of less reliance on debtor-in-possession financing from Thermo or other sources due to rapidly improving operating results. In 2004, proceeds from both term loans and the sale of membership interests increased, but were offset by a $10.0 million repayment of term loans.

Capital Expenditures

          Our capital expenditures consist primarily of upgrading our satellite constellation and gateways and other ground facilities. In 2004, we began construction of a new gateway in Sebring, Florida to provide additional coverage to the Caribbean and the Gulf Coast region. The gateway became operational in July 2005. In 2005, we began construction of a new gateway in Wasilla, Alaska to cover the Alaskan territory and part of the Bering Sea. The Alaska gateway went into operation in July 2006. These gateways cost $2.9 million and $4.8 million (excluding $0.8 million for the purchase of real property), respectively. In 2005, we also commenced capital expenditures for the launch of our eight spare satellites. The majority of the capital expenditures for this purpose will occur in 2006 and 2007. Through June 30, 2006, we had accrued or paid $53.0 million for this launch. The total expected cost for the launch of the spare satellites is approximately $110.0 million. In the fourth quarter of 2006, we expect to enter into a contract for our second-generation satellite constellation. We intend to use the proceeds from this offering, cash flows from our operations, available liquidity from Thermo Funding Company's irrevocable standby stock purchase agreement and funding available from our credit agreement to fund our capital expenditures.

Cash Position and Indebtedness

          As of June 30, 2006, our total cash and cash equivalents were $21.1 million and we had total indebtedness of $16.4 million, compared to total cash and cash equivalents and total indebtedness at June 30, 2005 of $15.9 million and $5.4 million, respectively. As of June 30, 2006, as adjusted to give effect to this offering (assuming no exercise of the underwriters' option to purchase additional shares), our total cash and cash equivalents and total indebtedness would have been $121.1 million and $16.4 million, respectively. As of June 30, 2006, as further adjusted to give effect to the borrowing of the then remaining $35.0 million of our revolving credit facility and the entire $100.0 million delayed draw term loan under our credit agreement and the issuance of all common stock subject to the irrevocable standby stock

63


purchase agreement with Thermo Funding Company, our total cash and cash equivalents and total indebtedness would have been $441.1 million and $151.4 million, respectively. We would not receive the entire remaining $185.0 million of proceeds of the sale of common stock subject to the irrevocable standby stock purchase agreement with Thermo Funding Company if the conditions requiring Thermo Funding Company to purchase the stock do not occur during the term of the agreement and Thermo Funding Company does not elect to purchase the stock voluntarily. See "—Irrevocable Standby Stock Purchase Agreement."

Credit Agreement

          On April 24, 2006, we entered into a credit agreement providing for $200.0 million in the form of a five-year $150.0 million term loan and a four-year $50.0 million revolving credit facility with Wachovia Investment Holdings, LLC, as administrative agent. The term loan, which was not funded, included a $50.0 million delayed draw portion which could be drawn after the term loan was funded and prior to June 30, 2008, but only if we had received net cash proceeds of $100.0 million from sales of our common stock after April 24, 2006 and prior to the date of drawing (including sales pursuant to the standby stock purchase agreement). The credit agreement provided that the term loan would bear interest at LIBOR plus 4.0% or the prime rate plus 3.0% and revolving credit loans would bear interest at LIBOR plus 3.25% to 4.0%, or the prime rate plus 2.25% to 3.0%. The loans could be prepaid without penalty at any time. Our indebtedness under the credit agreement was guaranteed by our principal domestic subsidiaries and secured by a first lien on our and their property (subject to limitations on the grant of security interests on FCC licenses under applicable law). The credit agreement contained customary representations and warranties, covenants and conditions to borrowing, including financial covenants and covenants limiting our ability to dispose of assets, change our business, merge, make acquisitions or capital expenditures or incur vendor financing obligations, indebtedness or liens, pay dividends, make investments or engage in certain transactions with affiliates. The credit agreement was amended as of June 16, June 23, June 30, July 28, and August 10, 2006 to extend the term loan funding deadline and related dates.

          The credit agreement replaced a loan and security agreement with the Union Bank of California that we entered into on December 14, 2005 and that provided for revolving credit loans of up to $15.0 million, which loans were secured by the personal property of our company and of our domestic subsidiaries. We did not borrow any funds under this agreement, which we terminated on April 19, 2006.

          On August 16, 2006, we entered into an amended and restated credit agreement with Wachovia Investment Holdings, LLC, as administrative agent and swingline lender, and Wachovia Bank, National Association, as issuing lender, which was subsequently amended on September 29, 2006. The amended and restated credit agreement provides for a $50.0 million revolving credit facility and a $100.0 million delayed draw term loan facility. The delayed draw term loan may be drawn after January 1, 2008 and prior to August 16, 2009, but only if we have received aggregate net cash proceeds of $200.0 million from sales after April 24, 2006 of our common stock (including sales pursuant to the irrevocable standby stock purchase agreement) prior to the draw date and if, after giving effect to the delayed draw term loan and thereafter at the end of each quarter while the delayed draw term loan is outstanding, our consolidated senior secured leverage ratio does not exceed 3.5 to 1.0. The delayed draw term loan facility will be reduced in an amount equal to the sum of 50% of the net proceeds of any sales of our common stock (other than sales pursuant to the irrevocable standby stock purchase agreement or the parallel offering to our other stockholders who are accredited investors and net proceeds of up to $100.0 million from any other issuance of our common stock after August 16, 2006, and up to $40 million additional proceeds from this offering), 100% of the proceeds of any additional term loans under the facility (described below) that we incur prior to the draw of the delayed draw term loan, and 50% of the proceeds of certain permitted unsecured debt financing that we incur prior to the draw of the delayed draw term loan. If drawn, the delayed draw term loan will be subject to prepayment in an amount equal to the sum of 50% of the net proceeds of such sales of common stock and 50% of the net proceeds of certain additional

64


indebtedness, including any such additional term loans, that we incur subsequent to such draw. Other customary prepayment provisions also apply. In addition to the $150.0 million revolving and delayed draw term loan facilities, the amended and restated credit agreement permits us to incur additional term loans on an equally and ratably secured, pari passu, basis in an aggregate amount of up to $150.0 million (plus the amount of any reduction in the delayed draw term loan facility or prepayment of the delayed draw term loan described above resulting from sales of common stock or any additional term loans) from the lenders under the credit agreement or other banks, financial institutions or investment funds approved by us and the administrative agent. We have not received any commitments for these additional term loans. These additional term loans may be incurred only if no event of default then exists, if we are in pro-forma compliance with all of the financial covenants of the credit agreement, and if, after giving effect thereto, our consolidated total leverage ratio does not exceed 5.5 to 1.0.

          As under the initial Wachovia credit facility described above, all revolving credit loans will mature on June 30, 2010 and all term loans will mature on June 30, 2011. Revolving credit loans will bear interest at LIBOR plus 4.25% to 4.75% or the greater of the prime rate or Federal Funds rate plus 3.25% to 3.75%. The delayed draw term loan will bear interest at LIBOR plus 6.0% or the greater of the prime rate or Federal Funds rate plus 5.0%, and the delayed draw term loan facility bears an annual commitment fee of 2.0% until drawn or terminated. Additional term loans will bear interest at rates to be negotiated. The loans may be prepaid without penalty at any time.

          The amended and restated credit agreement is guaranteed and secured in the same manner as, and contains other representations, warranties, covenants and conditions essentially identical to those of, the initial Wachovia credit agreement described above.

          In particular, the amended and restated credit agreement requires that:


Fiscal Year
   Maximum Amount
 
   (In millions)
2006   $ 232.0
2007   $ 132.0
2008   $ 132.0
2009   $ 243.0
2010   $ 133.0
2011   $ 158.0

65


          The amended and restated credit agreement provides that we will not, with certain immaterial exceptions:

66

          We are currently in compliance with the capital expenditure, liquidity and forward fixed charge coverage ratio tests described above and the other restrictive covenants of our amended and restated credit agreement.

          The amended and restated credit agreement specifies a number of events of default, including:

          Upon any event of default, the lenders may accelerate the maturity of all indebtedness under the amended and restated credit agreement and foreclose on the liens described above.

Irrevocable Standby Stock Purchase Agreement

          In connection with the execution of the initial Wachovia credit agreement, we entered into an irrevocable standby stock purchase agreement with Thermo Funding Company pursuant to which it agreed to purchase under certain circumstances up to $200.0 million of our Series A common stock at a price of $97.00 per share. The price per share has been adjusted to approximately $16.17 in connection with our six-for-one stock split, will not be further adjusted as a result of this offering and will remain at approximately $16.17 per share without regard to any future increase in the trading price of our common stock. Our board of directors determined that the price per share represented the fair market value of our common stock on the date of the agreement. Thermo Funding Company's obligation to purchase these

67


shares is secured by the escrow of cash and marketable securities in an amount equal to 105% of its unfunded commitment, initially $210.0 million. We would not receive the entire remaining $185.0 million of proceeds of the sale of common stock subject to the irrevocable standby stock purchase agreement with Thermo Funding Company if the conditions requiring Thermo Funding Company to purchase the stock do not occur during the term of the agreement and Thermo Funding Company does not elect to purchase the stock voluntarily.

          Pursuant to the agreement, Thermo Funding Company will be required to purchase shares of our common stock (in minimum amounts of $5.0 million) as may be necessary:

          Thermo Funding Company may elect at any time to purchase any unpurchased stock at approximately $16.17 per share subject to its obligations under the irrevocable standby stock purchase agreement. The agreement terminates on the earliest of December 31, 2011, our payment in full of all obligations under the credit agreement or Thermo Funding Company's purchase of all of the stock subject to its obligations under the agreement. Pursuant to the agreement, on June 30, 2006, Thermo Funding Company purchased 927,840 shares of our common stock for an aggregate purchase price of approximately $15.0 million.

          After completion of this offering, as required by the pre-emptive rights provisions contained in our certificate of incorporation as in effect prior to this offering, we intend to offer our stockholders as of June 15, 2006 who are accredited investors (as defined under the Securities Act) the opportunity to participate in the transactions contemplated by the irrevocable standby stock purchase agreement with Thermo Funding Company on a pro rata basis on substantially the same terms as Thermo Funding Company, except that these stockholders will not be subject to the escrow requirements described above. These stockholders, excluding stockholders who have waived their pre-emptive rights, will be entitled to purchase, and upon entering into the commitment may elect to purchase at any time thereafter, up to 785,328 additional shares of our common stock at approximately $16.17 per share in the pre-emptive rights offering.

          We plan to use the proceeds from our amended and restated credit agreement and the irrevocable standby stock purchase agreement, cash generated by our business and proceeds from other equity sales or debt financings to fund the procurement and launch of our second-generation satellite constellation, upgrades to our gateways and other ground facilities and the launch of eight spare satellites to augment our current constellation, as well as for general corporate purposes.

Contractual Obligations and Commitments

          During 2004, 2005 and the six months ended June 30, 2006, we purchased $25.7 million, $49.3 million and $35.6 million, respectively, of mobile phones, services and other equipment under various commercial agreements with QUALCOMM. At June 30, 2006, we had a remaining commitment to purchase $123.1 million of equipment from QUALCOMM, which included $18.7 million of inventory advances. We believe the long-term equipment contract with QUALCOMM is necessary to obtain the best possible pricing for the development and purchase of our second-generation of handsets and accessories. Based on our long-term growth predictions, we do not anticipate there will be a significant excess of equipment in the next few years. Also, we do not anticipate any obsolescence issues with unsold equipment prior to 2009. The satellite handset technology/innovation does not change as rapidly as a more standardized consumer product such as cellular phones and accessories. Our current handset has been

68


unchanged and in service since our inception of commercial service six years ago, and demand for it still remains strong. Our second-generation handset will be smaller and contain more features; accordingly, we anticipate that demand for it also will be strong over a multi-year period. We expect to fund this remaining commitment from our working capital and funds generated by our operations. We do not intend to use any of the net proceeds from this offering for this purpose. See "Certain Relationships and Related Party Transactions—Loral and QUALCOMM Settlements" and "—Purchases from QUALCOMM."

          On June 1, 2004, we entered into a master services agreement with Space Systems/Loral, Inc. providing for various services related to preparing our eight spare satellites for launch. Specific services provided under the agreement are governed by individual task orders whereby we agree on who will be responsible for providing services and authorize funding for each project. We make payments to Space Systems/Loral when invoices are received. As of June 30, 2006, we had authorized Space Systems/Loral, Inc. to spend up to approximately $19.1 million related to this agreement and related task orders, and approximately $4.9 million of those charges have been incurred. The agreement renews annually for up to 10 years unless terminated earlier. We may terminate the agreement upon 30-days notice and any task order upon 10-days notice. Upon termination, we must pay for any costs related to services performed through termination and the 10-day transition period thereafter. Those costs may not exceed the amount previously authorized by us. We and Space Systems/Loral may terminate the agreement upon any uncured material breach of the terms of the agreement or any task order. We are currently engaged in litigation with an affiliate of Loral as described under "Business—Legal Proceedings."

          On September 19, 2005, we executed a contract with Starsem providing for Starsem to launch our eight spare satellites in two launches of four satellites each. The contract also provides for a compatibility and feasibility study and certain post-launch services. Currently, the launches are scheduled to occur in the first half of 2007. We and Starsem have the right to postpone and reschedule the launches. Prolonged delays could cause us to pay additional fees to Starsem if we postpone. If Starsem postpones, we may be eligible to defer payments. Starsem is providing general liability insurance at no cost to us covering third party injuries caused by our activities or by Starsem and our respective associates at the launch site, and for any property loss or bodily injury caused by the launch vehicle, our satellites or any components for a limited period of time. As of June 30, 2006, we had incurred approximately $47.5 million in obligations to Starsem under the contract. Full payment under the contract will be made in Euros by April 2007. We will be subject to interest charges at a bank base rate plus three percent for any late payments. If we do not cure non-payments after notice, Starsem may reschedule a launch and ultimately terminate the agreement. If Starsem terminates the agreement, Starsem may keep certain termination fee amounts. We have the right to terminate the agreement for any reason, but terminations not for cause are subject to a termination fee. We estimate that the total cost of completing, testing and launching our eight spare satellites (including launch insurance) will be approximately $110.0 million, including payments to Starsem.

          Pursuant to a memorandum dated as of June 1, 2005, we agreed to provide supplemental incentive compensation to certain of our executive officers in the form of cash bonuses which, upon the fulfillment of certain conditions, may aggregate up to $30.0 million. In 2005 we accrued $1.6 million in compensation expense with respect to this plan. See "Management—Executive Incentive Compensation Plan."

          Pursuant to our agreement for the purchase of our Central American gateway, we are obligated either to redeem our common stock issued in the transaction for $5.2 million in cash or to issue additional shares of our common stock or cash to the sellers if the value of our common stock issued in the transaction is less than $5.2 million on a designated date. See Note 17 to our Consolidated Financial Statements "Six Months 2006 Events (Unaudited)—Globalstar Americas Telecommunications, LTD."

69


          Long-term obligations at June 30, 2006, assuming the borrowing of $100.0 million in delayed draw term loans under our credit agreement, are as follows:

Payments due by period:

Contractual Obligations:
   Less
than
1 Year
   1-3
Years
   3-5
Years
   More Than
5 Years
   Total
 
   (In thousands)
Long-term debt obligations(1)(2)   $ 1,365   $ 2,964   $ 112,500   $ —   $ 116,829
Operating lease obligations     1,107     2,014     505     827     4,453
Purchase obligations     90,422     75,438     —     —     165,860
Pension obligations     1,370     2,739     —     —     4,109
   
 
 
 
 
  Total   $ 94,264   $ 83,155   $ 113,005   $ 827   $ 291,251
   
 
 
 
 
(1)
Does not include interest on debt obligations. Substantially all of our debt bears interest at a floating rate and, accordingly, we are unable to predict interest costs in future years. In addition, future interest costs will depend on the outstanding balance from time to time of the revolving credit facility under our credit agreement and the date on which we borrow the delayed draw term loan. See "Credit Agreement" above.

(2)
All of the indebtedness under our credit agreement may be accelerated by the lenders upon an event of default. See "—Liquidity and Capital Resources—Credit Agreement." Events of default under the credit agreement include default under a hedging agreement where the termination value exceeds $1.0 million and default under other indebtedness with a principal amount exceeding $5.0 million. Currently, we have no other indebtedness exceeding $5.0 million.

Distribution to Thermo

          The operating agreement of Globalstar LLC required that we distribute $685,848 to Thermo at the time of our conversion to a Delaware corporation, which occurred on March 17, 2006. This amount represents a deferred payment of interest that accrued from December 6, 2003 to April 14, 2004 on loans made by Thermo to us that were converted to equity on April 14, 2004. In connection with the negotiation of our credit agreement, Thermo agreed to defer receipt of this payment until we complete this offering. Accordingly, as permitted by our credit agreement, we will distribute the $685,848 to Thermo immediately upon completion of this offering.

Quantitative and Qualitative Disclosure Regarding Market Risk

          Our services and products are sold, distributed or available in over 120 countries. Our international sales are made primarily in U.S. dollars, Canadian dollars and Euros. In some cases insufficient supplies of U.S. currency require us to accept payment in other foreign currencies. We reduce our currency exchange risk from revenues in currencies other than the U.S. dollar by requiring payment in U.S. dollars whenever possible and purchasing foreign currencies on the spot market when rates are favorable. We currently do not purchase hedging instruments to hedge foreign currencies. However, our credit agreement requires us to do so on terms reasonably acceptable to the administrative agent not later than 90 days after the end of any quarter in which more than 25% of our revenue is originally denominated in a single currency other than U.S. or Canadian dollars.

          As discussed in "Contractual Obligations and Commitments," we have entered into a contract with Starsem to launch our eight spare satellites. Our obligations under the Starsem contract are denominated in Euros. As discussed in "Prospectus Summary—Recent Developments," we have entered into an

70


Authorization to Proceed with Alcatel Alenia Space France for certain items in preparation for the construction of our second-generation satellite constellation. This payment is denominated in Euros.

          Our interest rate risk arises from our variable rate debt under our credit agreement, under which loans bear interest at a floating rate based on the U.S. prime rate or LIBOR. Assuming that we borrowed the entire $150.0 million in revolving and term debt available under our credit agreement, and without giving effect to the hedging arrangement described in the next sentence, a 1.0% change in interest rates would result in a change to interest expense of approximately $1.5 million annually. To hedge a portion of our interest rate risk, we have entered into a five-year swap agreement with respect to a $100.0 million notional amount at a fixed rate of 5.64%.

Off-Balance Sheet Transactions

          We have no material off-balance sheet transactions.

Recently Issued Accounting Pronouncements

          In November 2004, the Financial Accounting Standards Board (the "FASB") issued Statement of Financing Accounting Standard ("SFAS") No. 151, Inventory Costs, which amended the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs and wasted material (spoilage). This statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. We will adopt SFAS No. 151 effective January 1, 2007. We have determined that the adoption of the statement will not have a material effect on our financial statements.

          In December 2004, the FASB issued SFAS No. 153, Exchanges of Nonmonetary Assets an amendment of APB Opinion No. 29. This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This Statement is effective for nonmonetary exchanges occurring in the fiscal periods beginning after June 15, 2005. We have completed our evaluation of SFAS No. 153 and have determined that it does not have a material effect on our financial statements.

          In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based Payment ("SFAS No. 123R"). This Statement requires companies to record compensation expense for all share based awards granted subsequent to the adoption of SFAS No. 123R. In addition, SFAS No. 123R requires the recording of compensation expense for the unvested portion of previously granted awards that remain outstanding at the date of adoption. We adopted SFAS No. 123R effective January 1, 2006 and do not expect the adoption to have a material effect on our financial statements.

          In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47, Accounting for Conditional Asset Retirement Obligations ("FIN No. 47"), which is effective no later than the end of fiscal years ending after December 15, 2005. FIN No. 47 clarifies the term conditional asset retirement obligation as used in SFAS No. 143, Accounting for Asset Retirement Obligations ("SFAS No. 143"). Conditional asset retirement obligation refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. We do not expect the adoption of FIN No. 47 to have a material effect on our financial statements.

          In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections ("SFAS No. 154"). This Statement requires retrospective application to prior periods' financial statements of

71


voluntary changes in accounting principles unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS No. 154 makes a distinction between "retrospective application" of an accounting principle and the "restatement" of financial statements to reflect the correction of an error. SFAS No. 154 replaces Accounting Principles Bulletin ("APB") No. 20, Accounting Changes ("APB No. 20"), and SFAS No. 3, Reporting Accounting Changes in Interim Financial Statements. APB No. 20 previously required that most voluntary changes in accounting principle be recognized by including the cumulative effect of changing to the new accounting principle in the net income of the period of the change. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. We do not expect the adoption of SFAS No. 154 to have a material effect on our financial statements.

          In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 (Accounting for Derivative Instruments and Hedging Activities) and No. 140 (Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities), which permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. In addition, SFAS No. 155 establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation under the requirements of Statement No. 133. This Statement will be effective for all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006. We will adopt this Statement effective January 1, 2007. Based on our current evaluation of this Statement, we do not expect the adoption of SFAS No. 155 to have a material effect on our financial statements.

          In March 2006, the FASB issued SFAS No. 156, Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140. This Statement amends FASB Statement No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, with respect to the accounting for separately recognized servicing assets and servicing liabilities. This Statement clarifies when servicing rights should be separately accounted for, requires companies to account for separately recognized servicing rights initially at fair value, and gives companies the option of subsequently accounting for those servicing rights at either fair value or under the amortization method. This Statement will be effective as of the beginning of an entity's first fiscal year that begins after September 15, 2006. We will adopt this Statement effective January 1, 2007. Based on our current evaluation of this Statement, we do not expect the adoption of SFAS No. 156 to have a material effect on our financial statements.

72


BUSINESS

Overview

          We are a leading provider of mobile voice and data communications services via satellite. Based on information provided by Northern Sky Research as to the size of the global market, in 2005 we had an estimated 10.2% share of global subscribers in the mobile satellite services industry. By providing wireless services where terrestrial wireless and wireline networks do not, we seek to address the increasing desire by customers for connectivity and reliable service at all times and locations. Using 43 in-orbit satellites and 25 ground stations, which we refer to as gateways, we offer voice and data communications services to government agencies, businesses and other customers in over 120 countries. Sixteen of these gateways are operated by unaffiliated companies, which we refer to as independent gateway operators, that purchase communications services from us on a wholesale basis for resale to their customers.

          At June 30, 2006, we served approximately 236,500 subscribers, which represented a 50% increase since June 30, 2005. We believe the heightened demand for reliable communications services, particularly in the wake of the September 11, 2001 terrorist attacks, the December 2004 Asian tsunami and the U.S. Gulf Coast hurricane activity in 2004 and 2005, will continue to drive our strong growth in sales of both voice and data services. We have a diverse customer base, including the government (including federal, state and local agencies), public safety and disaster relief; recreation and personal; maritime and fishing; business, financial and insurance; natural resources, mining and forestry; oil and gas; construction; utilities; and transportation sectors, which we refer to as our vertical markets. According to Gartner, we are one of the two key mobile satellite services providers whose networks can deliver voice and data communication services over most of the world's landmass.

          We believe that our distribution network provides broad coverage over our target customer base. We utilize a large network of dealers and agents, including over 850 in territories we serve directly. We also use resellers, including independent gateway operators, to sell the full range of our voice and data products and services, including our Simplex one-way data transmission services, in markets where we do not market directly.

          For the year ended December 31, 2005 and the six months ended June 30, 2006, our average monthly revenue per user was $68.10 and $57.52 for retail subscribers, respectively, compared to $67.93 and $66.88 for 2004 and the six months ended June 30, 2005. For both the year ended December 31, 2005 and the six months ended June 30, 2006, our cost per gross addition (our cost of obtaining a new subscriber) was approximately $248, compared to $230 and $334 for 2004 and the six months ended June 30, 2005.

          We believe that we offer our customers higher quality voice and data services at a lower price than our principal mobile satellite services competitors. We also believe that the quality and price of our services have contributed to our low average monthly customer turnover, or churn rate, of approximately 1.3% during the year ended December 31, 2005 and 1.1% for the six months ended June 30, 2006 compared to the average monthly churn rate for the top four U.S. wireless carriers of approximately 2.1% for 2005.

          We hold licenses to operate a wireless communications network via satellites over 27.85 MHz, comprised of two blocks of contiguous global radio frequencies. We believe our large blocks of spectrum will permit us to capitalize on existing and emerging wireless and broadcast applications globally.

          We are licensed by the FCC to provide ATC services in combination with our existing communication services. Currently, our ATC license permits us to use 11 MHz of our licensed spectrum to combine our satellite-based communications network with a terrestrial cellular-like network. This will enable us to address a broader market for our services and products by providing services where satellite services generally do not function, such as urban areas and inside buildings. We have applied to the FCC for authority to provide ATC services over the full 27.85 MHz of our spectrum. Our current network is

73


capable of supporting ATC services. We are currently evaluating products and selectively exploring opportunities with targeted media, technology and communications companies to develop further the potential of our ATC-licensed spectrum. In addition, regulatory authorities outside of the United States are reviewing ATC-like rulings, and we are beginning to explore selectively capitalizing on these rulings. We expect to be among the first to offer ATC services commercially, potentially as soon as late 2007.

          We are currently in the process of designing and procuring our second-generation satellite constellation, which we expect will extend the life of our network until approximately 2025. On October 5, 2006, we entered into an Authorization to Proceed with Alcatel Alenia Space France pursuant to which we authorized Alcatel to engage in preparation for the construction of our second-generation satellite constellation and agreed to enter into negotiations with Alcatel for it to construct 48 low earth orbit satellites. See "Prospectus Summary—Recent Developments." We believe that our second-generation satellites will improve our ability to support new applications and services, including higher-speed data rates and internet access, video and audio broadcasting, remote file transfer and virtual private networking. We expect these services to be available on a broad range of new customer devices that will be significantly smaller in size, lighter in weight and less expensive than existing mobile satellite services equipment. We believe this expanded service portfolio and advanced equipment offering will significantly expand the target market for our services.

          We recorded $127.1 million and $68.7 million in revenue and $18.7 million and $21.7 million in net income during the year ended December 31, 2005 and the six months ended June 30, 2006, respectively, compared to $84.4 million and $50.3 million in revenue and $0.4 million and $2.9 million in net income for the year ended December 31, 2004 and the six months ended June 30, 2005, respectively. Net income for the first six months of 2006 included an income tax benefit of $21.4 million relating to the establishment of deferred tax assets and liabilities upon our election in January 2006 to be taxed as a C corporation.

Industry

          We compete in the mobile satellite services sector of the global communications industry. Mobile satellite services operators provide voice and data services using a network of satellites and ground facilities. Mobile satellite services are usually complementary to, and interconnected with, other forms of terrestrial communications services and infrastructure and are intended to respond to users' desires for connectivity at all times and locations. Customers typically use satellite voice and data communications in situations where existing terrestrial wireline and wireless communications networks are impaired or do not exist. Further, many regions of the world benefit from satellite networks, such as rural and developing areas that lack developed wireless or wireline networks, ocean regions, and regions affected by political conflicts and natural disasters. Northern Sky Research stated in a 2006 report that, "the MSS industry has proven to be invaluable in supporting disaster preparedness and recovery activities, military applications, and other critical civil requirements that require rapidly deployable, reliable and ubiquitous communication services."

          Worldwide, government organizations, military and intelligence agencies, natural disaster aid associations, event-driven response agencies and corporate security teams depend on mobile and fixed voice and data communications services on a regular basis. Businesses with global operating scope require reliable communications services when operating in remote locations around the world. Mobile satellite services users span the forestry, maritime, government, oil and gas, mining, leisure, emergency services, construction and transportation sectors, among others. Many existing customers increasingly view satellite communications services as critical to their daily operations.

          Over the past two decades, the global mobile satellite services market has experienced significant growth. According to a Gartner report published in November 2005, satellite phones are increasingly the technology of choice for first responders, military, businesses, governments and non-governmental

74


agencies. Furthermore, Gartner has predicted that wireline and wireless carriers will increasingly consider augmenting their communication portfolios by aligning themselves with mobile satellite service providers.

          Increasingly, better-tailored, improved-technology products and services are creating new channels of demand for mobile satellite services. Growth in demand for mobile satellite voice services is driven by the declining cost of these services, the diminishing size and lower costs of the handsets, as well as heightened demand by governments, businesses and individuals for ubiquitous global voice coverage. Growth in mobile satellite data services is driven by the rollout of new applications requiring higher bandwidth, as well as low cost data collection and asset tracking devices.

          Northern Sky Research has predicted that as service costs continue to decline in our industry, average revenue per user will continue to increase due to increased usage. Furthermore, Northern Sky Research expects units in service in our industry to exhibit a cumulative annual growth rate of 34.2% through 2010, resulting in a 17.9% cumulative annual growth rate in retail revenue.

          Communications industry sectors that are relevant to our business include:

          Within the major satellite sectors, fixed satellite services and mobile satellite services operators differ significantly from each other. Fixed satellite services providers, such as Intelsat, Eutelsat and SES Global, and very small aperture terminals companies, such as Hughes Networks and Gilat Satellite Networks, are characterized by large, often stationary or "fixed," ground terminals that send and receive high-bandwidth signals to and from the satellite network for video and high speed data customers and international telephone markets. On the other hand, mobile satellite services providers, such as our company, Inmarsat and Iridium, focus more on voice and data services (including data services which track the location of remote assets such as shipping containers), where mobility or small sized terminals are essential. As mobile satellite terminals begin to offer higher bandwidth to support a wider range of applications, we expect mobile satellite services operators will increasingly compete with fixed satellite services operators.

          According to Gartner, a low earth orbit system, such as the systems we and Iridium currently operate, causes less transmission delay than a geosynchronous system due to the shorter distance signals have to travel and permits the use of smaller devices such as handheld phones.

          Currently, our principal mobile satellite services global competitors are Inmarsat and Iridium. United Kingdom-based Inmarsat owns and operates a geostationary satellite network and U.S.-based Iridium owns and operates a low earth orbit satellite network. Inmarsat provides communications services, such as telephony, fax, video, email and high-speed data services. Iridium offers narrow-band data, fax and voice communications services. We also compete with several regional mobile satellite services providers that operate geostationary satellites, such as Thuraya, principally in the Middle East and Africa; Mobile Satellite Ventures and Mobile Satellite Ventures Canada in the Americas; and Asian Cellular Satellites in Asia.

75


Competitive Strengths

          We believe that our competitive strengths position us to enhance our growth and profitability:

          Key Markets.    We focus on selected underserved public and private sector markets and on customers in these markets that generate high average revenue per user and, therefore, higher revenue growth for our company. Our top revenue-generating markets are government (including federal, state and local agencies), public safety and disaster relief; recreation and personal; maritime and fishing; and business, financial and insurance.

          Service and Product Offerings.    We believe we are able to retain our current customers and attract new customers because our pricing plans, which offer rates as low as $0.14 per minute, are the lowest in the mobile satellite services industry and our voice services provide the best audio quality in our industry. A report published by Frost & Sullivan in 2002 concluded that our voice services provide audio quality that is superior to that of our principal mobile satellite services competitor and approach that of a good quality cellular call. We believe the voice and data products that we expect to introduce in 2006 and 2007 will be cheaper, lighter and better performing than those previously available to mobile satellite services customers and will be equal to or better than those offered by our competitors. We believe our high quality and low cost services and products offer us a competitive advantage in retaining our current customers and attracting new customers in our vertical markets.

          Distribution Network.    Our distribution network provides broad coverage of our target subscriber base in over 120 countries. We utilize a large network of dealers, agents and resellers and a direct sales force to sell the full range of our voice and data products. In addition, we have a direct sales force, consisting of specialists in our key vertical markets, which sells our services and products, including customized data solutions, to government agencies and other key customers. We also offer an internet-based distribution channel at www.globalstar.com. We sell our services directly in over 25 countries and on a wholesale basis to independent gateway operators who resell our services in over 60 countries.

          Existing Global Satellite Communications Network.    Our constellation of low earth orbit satellites and terrestrial gateways has been in commercial operation since 2000 and serves as the backbone of our communications network. Gartner has described our satellite constellation as "simple, yet proven technology." We believe our existing network is capable of handling the expected growth in demand for our services, as evidenced by our ability to handle increased usage of over 500% in the areas affected by Hurricane Katrina while terrestrial communications networks were impaired. We plan to supplement our constellation by launching our eight spare satellites during 2007.

          Broad, Contiguous Spectrum Holdings.    We hold licenses to operate a wireless communications network via satellites over 27.85 MHz in two blocks of contiguous global spectrum. Our spectrum can efficiently support advanced wireless technologies because it is located near the personal communications services, or PCS, bands. As a result, we should be able to deploy cost effectively the terrestrial component of an ATC network by purchasing and slightly modifying inexpensive, off-the-shelf base station equipment and related wireless equipment.

          ATC Services Capability.    We believe the ability of our current satellites and ground stations to support ATC services will allow us to be among the first to introduce these services. Our current satellite constellation is capable of integrating with and supporting the provision of ATC services to our customers. We are currently in discussions with several parties to exploit our ATC capabilities. Competitors will be able to implement ATC services on a commercial scale only after they launch new satellites and build ground facilities designed specifically to inter-operate with their satellite services.

          International Spectrum Licenses.    We have access to our 27.85 MHz of 1.6 and 2.4 GHz frequencies globally, while most of our competitors only have access to spectrum frequencies regionally. In addition to mobile satellite services, our coverage in over 120 countries with operating licenses held directly by us or

76


by independent gateway operators affords us economies of scale when introducing ATC and other new mobile communications services.

          Strategic Relationship with QUALCOMM.    We are the only satellite network operator currently using the patented QUALCOMM Incorporated CDMA technology, which permits the dynamic selection of the strongest signal available and produces a higher audio quality than our principal competitor's technology. In May 2005, we signed an agreement with QUALCOMM for the manufacture of a complete array of next-generation products, including phones, data modems, car kits and accessories designed for our network. These phones and modems will be smaller, lighter and more feature-rich communications devices than those currently available, and we will offer them at affordable prices. The first of these new products is scheduled to be available beginning in the second half of 2006.

          Experienced Management Team.    Our senior management team combines experts in wireless and wireline communications with pioneers in the fields of satellite engineering and operations. Our senior satellite managers have 22 to 43 years of experience in satellite engineering and operations. Our senior communications managers have 12 to 18 years of experience in the telecommunications industry.

Our Growth Strategy

          Our goal is to be the leading global provider of mobile voice and data communications solutions via satellite. We intend to achieve this objective by:

          Continuing Rapid and Profitable Growth of Our Subscriber Base.    In 2005, we added approximately 54,000 net subscribers, a 39% growth rate over the number of subscribers at the end of 2004. We intend to continue to increase our penetration of the growing mobile satellite services market and our market share of key vertical markets by continuing to provide compelling service and product offerings and utilizing our strong distribution network. In particular, we intend to target the first responder, natural resources and local, state and federal government customers (including homeland security) segments in the United States, Canada and elsewhere. In Europe, we have increased our direct sales effort by hiring several experienced direct sales professionals to manage diverse territories throughout the region. We believe that continuous innovation in our service plans, including "bundled plans" that pool minutes between multiple phones and pricing plans customized for seasonal users, promotes revenue growth and that these new service offerings, together with lower prices for our services and products, will increase our market penetration. In Venezuela, Colombia and Central America, we see significant opportunities to expand our presence in rural telephony, oil and gas and other markets. Northern Sky Research has predicted that total units in-service in our industry will increase from 3.3 million in 2006 to 16.6 million in 2010 and that retail service revenues will increase from $1.8 billion in 2006 to $8.6 billion in 2010. Northern Sky Research has further predicted that the North American region, which accounts for the majority of our revenue, will account for large shares of worldwide market until 2009 and after 2009 will lead all regions worldwide, accounting for 28% of overall revenue.

          Improving Our Profitability by Consolidating Our International Distribution Chain.    Over the past four years, we have acquired five independent gateway operators in strategic geographic regions. We believe that our independent gateway operator consolidation strategy will better position us to market our services directly to multinational customers requiring a global communications provider. We also believe that our consolidation strategy will increase our overall profitability because it allows us to sell most of our services directly to subscribers at retail prices, thus substantially increasing our average revenue per user, compared with selling on a wholesale basis to independent gateway operators.

          Expanding Our Coverage and Upgrading Our Service Offerings.    We intend to continue to increase the quality and availability of our services by selectively adding gateways to our network. In the second quarter of 2006, we commenced operations at a gateway in Wasilla, Alaska to improve coverage in Alaska, the Yukon Territory, Canada and the Northeast Pacific fishing grounds. We have established a subsidiary

77

to initiate service in South Africa using a gateway that was constructed in 2000 but never placed in service. Beginning in 2009, we intend to deploy a second-generation satellite constellation and upgrade our existing ground facilities to handle broadband data, faster transmission speeds and new hybrid applications.

          Developing Next-Generation Devices.    In late 2006, we expect to begin selling more technologically advanced satellite phones and data products tailored to meet our customers' evolving service needs and to stimulate additional demand for our services. These new products will have a range of functions common to many popular wireless products. We are also planning to introduce in 2006 and 2007 innovative duplex and simplex data devices that can be used for asset tracking and that are remotely programmable and equipped to monitor a range of variables. We believe that, in each case, the size and weight of our phones and data devices has been reduced while their durability and battery life has been improved. We expect that these advanced devices will stimulate additional demand for our services.

          Exploring Opportunities to Maximize the Value of Our Spectrum.    We expect the market for wireless applications to continue to grow along with the development of new products capable of transmitting new forms of media and data. We are exploring relationships with a range of communications and media companies to enable us to be among the first in our industry to utilize our spectrum and ATC license for wireless voice, data and video applications. Once an ATC network is fully deployed, end-users will be able to utilize both satellite and terrestrial technologies to complete calls and send or receive data.

          Exploiting Our International Spectrum.    As a result of our authorization to use our assigned frequencies globally, we believe we are well positioned to advocate for the adoption of rules and regulations that would allow us to use our spectrum for ATC-like services around the world. We have already begun this effort in Canada and Europe. We also believe that the location of our spectrum will allow us to tailor our service and product offerings to customers based on their specific needs and location.

Sales and Marketing

          We sell our products and services through a variety of retail and wholesale channels. Our sales and marketing efforts are tailored to each of our geographic regions and targeted vertical markets. Unlike the cellular industry, we do not conduct costly mass consumer marketing campaigns. Rather, our sales professionals target specific commercial vertical markets and customers with face-to-face meetings, product trials, advertising in publications for those markets and direct mailings. We also focus a large amount of our marketing activity on tradeshows. In 2005, we, our dealers and our resellers attended approximately 200 different tradeshows in North America and Europe, where we sponsored booths and demonstrated our products.

          Our distribution managers are responsible for conducting direct sales with key accounts and for managing agent, dealer and reseller relationships in assigned territories. They conduct direct sales with key customers and manage over 850 dealers and agents, with many of the agents and dealers having multiple points of sale. We maintain a sales force presence throughout the United States, including an office in Washington, D.C. dedicated to government-based sales. We also distribute our services and products indirectly through approximately 20 major resellers and value added resellers in the United States and 10 independent gateway operators that employ their own salespeople to sell the full range of our voice and data products and services in over 60 countries. Wholesale sales to independent gateway operators represented approximately 7% of our service revenue for the year ended December 31, 2005 and approximately 6% of our service revenue for the six months ended June 30, 2006. No agent, dealer or reseller represented more than 5% of our revenue for the year ended December 31, 2005 or the six months ended June 30, 2006.

78


          Our typical dealer is a communications services equipment retailer. We offer competitive service and equipment commissions to our network of dealers to encourage increased sales. Since the Reorganization, we have terminated our relationship with numerous underperforming dealers and agents and replaced them with better performing new dealers and agents. We believe our more stringent dealer and agent requirements and our incentive programs position us to continue to experience growing dealer and agent sales due to a better-trained, focused and motivated sales network.

          In addition to sales through our distribution managers, agents, dealers and resellers, customers can place orders through our website at www.globalstar.com or by calling our customer sales office at (877) 728-7466. To encourage internet sales, our website includes special promotional offers that are unavailable elsewhere. We believe that, as awareness of our services grows and our brand name becomes more recognizable, we will experience an increase in our direct internet and phone order sales. Because we do not need to pay an agent commission or sell our services at reduced margins, our internet and phone sales channels are the most profitable. Our website and call center provide a user-friendly interface with consumers looking for a simple transaction or customer support.

          The reseller channel is comprised primarily of communications equipment companies and commercial communications equipment rental companies who retain and bill clients directly, outside of our account maintenance system. Many of our resellers specialize in niche vertical markets where high-use customers are concentrated. We have productive sales arrangements with major resellers to market our services, including some value added resellers who integrate our products into their proprietary end products or applications. Some of our resellers offer our services and products through rental and leasing arrangements.

          Outside of the United States and Canada, the majority of our retail sales are conducted through resellers and independent gateway operators. In 2006, we implemented a new direct sales and marketing program in Europe to bolster our growth in the region and further our strategy of direct contact with customers. Accordingly, we hired several experienced salespeople in Europe who have distribution manager-type responsibilities in each of their assigned territories. We believe that our investment in our European distribution channel and effort to transfer existing customers to our direct sales network will enhance our ability to rapidly grow our subscriber base overseas. We also plan to enter new European territories where our network can provide service but where we have not previously marketed our services and products and to target previously underserved vertical markets in Europe. We are implementing similar changes in the territories served by the gateways we acquired from independent gateway operators in Venezuela and Central America.

          Our wholesale operations primarily encompass bulk sales of wholesale minutes to the independent gateway operators around the globe. These independent gateway operators maintain their own subscriber bases that are exclusive to us and promote their own service plans. The independent gateway operator system has allowed us to expand in regions that hold significant growth potential but are harder to serve without sufficient operational scale or where local regulatory requirements or business or cultural norms do not permit us to operate directly. Our wholesale efforts also include our Simplex and duplex data tracking devices.

79

          Set forth below is a list of independent gateway operators as of June 30, 2006:

Location
   Gateway
   Independent Gateway Operators
Argentina   Bosque Alegre   TE.SA.M Argentina
Australia   Dubbo   Globalstar Australia PTY Limited
Australia   Mount Isa   Globalstar Australia PTY Limited
Australia   Meekatharra   Globalstar Australia PTY Limited
Brazil   Manaus   Globalstar do Brasil
Brazil   Presidente Prudente   Globalstar do Brasil
Brazil   Petrolina   Globalstar do Brasil
China   Beijing   China Spacecom
Italy   Avezzano   Elsacom N.V.
Korea   Yeo Ju   Dacom
Mexico   San Martin   Globalstar de Mexico
Peru   Lurin   TE.SA.M Peru
Russia   Khabarovsk   GlobalTel
Russia   Moscow   GlobalTel
Russia   Novosibirsk   GlobalTel
Turkey   Ogulbey   Globalstar Avrasya

          We do not own or control these independent gateway operators nor do we operate their gateways. We operate directly gateways in the United States, Canada, Venezuela, Nicaragua, Puerto Rico and France. See "Business—Properties."

Services and Products

          Our principal services are satellite communications services, including mobile and fixed voice and data services and asset tracking and monitoring services. We introduced our asset tracking and monitoring services in late 2003, and demand for these services has grown rapidly since then. Sales of our services combined accounted for approximately 64% and 61% of our total revenues for the year ended December 31, 2005 and the six months ended June 30, 2006, respectively. We also sell the related voice and data equipment to our customers, which accounted for approximately 36% and 39% of our total revenues for the year ended December 31, 2005 and the six months ended June 30, 2006, respectively.

Our Services

          We offer our mobile voice and data services to customers via numerous monthly plans at price levels that vary depending upon expected usage. Except for Simplex services, subscribers under these plans typically pay an initial activation fee to the agent or dealer, as well as a monthly usage fee to us that entitles the customer to a fixed number of minutes in addition to services such as voicemail, call forwarding, short messaging, email, data compression and internet access. We receive both an activation fee and monthly fee for Simplex services. Extra fees may apply for non-voice services, roaming charges and long-distance calls.

          We regularly innovate our service offerings. In August 2004, as part of our strategy to offer "bundled minutes" for heavy use customers, we introduced our Liberty Plans, which allow mobile voice and data users to pay an up-front, annual fee for a certain number of minutes to be used at any time within a one-year period, thus providing flexibility for seasonal and sporadic users. All unused minutes expire at the end of the one-year period. If subscribers use all of their minutes before the end of the one-year period, they may purchase an additional year's worth of minutes or can pay for additional minutes at a somewhat higher "overage" rate. We believe that our mobile voice customers are drawn to

80


our Liberty Plans because of their ability to eliminate monthly overage charges given their unpredictable communications needs. We have seen rapid market acceptance of our Liberty Plans and expect they will continue to be an attractive service offering for customers in many of our vertical markets. These plans also eliminate the need for monthly billings, reduce collection costs and enhance our cash flow.

          We provide fixed voice and data services in rural villages, at remote industrial, commercial and residential sites and on ships at sea, among other places. Fixed voice and data satellite communications services are in many cases an attractive alternative to mobile satellite communications services in situations where multiple users will access the service within a defined geographic area and cellular or ground phone service is not available. Our fixed units also may be mounted on vehicles, barges and construction equipment and benefit from the ability to have higher gain antennas. Our fixed voice and data service plans are similar to our mobile voice and data plans and offer similar flexibility. In addition to offering monthly service plans, our fixed phones can be configured as pay phones (installed at a central location, for example, in a rural village) that accept tokens, debit cards, prepaid usage cards, or credit cards.

          Set forth below is a comparison of certain retail rate plans that we currently offer to mobile, fixed and data terminal customers in North America and Europe:

Service
   U.S.
   Canada(1)
   Europe(2)
Low Monthly Plan     Freedom 50     Latitude 50     Voyager 75
  bundled minutes:     50/mo     50/mo     75/mo
  monthly charge:   $ 50.00   $ 45.00   $ 63.50
  implied minute rate:   $ 1.00   $ 0.89   $ 0.85
  additional minute rate:   $ 0.99   $ 1.06   $ 1.91
High Monthly Plan     Freedom 4000     Latitude 4000     Voyager 800
  bundled minutes:     4,000/mo     4,000/mo     800/mo
  monthly charge:   $ 550.00   $ 579.00   $ 317.50
  implied minute rate:   $ 0.14   $ 0.14   $ 0.41
  additional minute rate:   $ 0.49   $ 0.44   $ 0.64
Low Liberty Plan     Liberty 600     Enterprise 600     Liberty 1000
  bundled minutes:     600/yr     600/yr     1,000/yr
  annual charge:   $ 600.00   $ 534.00   $ 762.00
  implied minute rate:   $ 1.00   $ 0.89   $ 0.76
  additional minute rate:   $ 0.99   $ 1.06   $ 1.14
High Liberty Plan     Liberty 48000     Enterprise 48000     Liberty 5000
  bundled minutes:     48,000/yr     48,000/yr     5,000/yr
  annual charge:   $ 6,600.00   $ 6,942.00   $ 2,286.00
  implied minute rate:   $ 0.14   $ 0.14   $ 0.46
  additional minute rate:   $ 0.49   $ 0.44   $ 0.89
Home Area (bundled minutes)     U.S. and Caribbean     Canada     23 Euro Countries
(1)
CAD$ converted to USD$ using $0.89 conversion rate as of October 5, 2006.

(2)
EUR€ converted to USD$ using $1.27 conversion rate as of October 5, 2006.

          In addition to data utilization through fixed and mobile services described above, we also offer data-only services. Our system is well-suited to handle duplex data transmission. Duplex devices have two-way transmission capabilities; for asset-tracking applications, this enables the customer to control

81

directly their remote assets and perform more complicated monitoring activities. We offer asynchronous and packet data service in all of our territories. Customers can use our products to access the internet, corporate virtual private networks and other customer specific data centers. Satellite data modems are sold principally through integrators and value added resellers, who developed innovative end-market solutions, such as the Safety Star product, designed to address lone worker safety concerns, and the Skyhawk product, designed for maritime use. Our satellite data modems can be activated under any one of our current pricing plans. Satellite data modems are a fast growing product group that provide solutions that are accessible in every region we serve. The revenue that flows from these products provides an important and growing source of recurring service revenue and subscriber equipment sales for us.

          Additionally, we offer a data acceleration and compression service to the satellite data modem market. This service increases web-browsing, email and other data transmission speeds without any special equipment or hardware.

          Our asset tracking and remote monitoring service, which we refer to as our Simplex service, is designed to address the market need for a small and cost-effective solution for sending data (such as location) from assets in remote locations to a central monitoring station. Simplex is a one-way burst data transmission to our network from a Simplex telemetry unit, which may be located, for example, on a container in transit. At the heart of the Simplex service is an application server, which is located at a gateway. This server receives and collates messages from all Simplex telemetry units received on our satellite network. Simplex transmitting devices consist of a Simplex telemetry unit, an application specific sensor, a battery (with up to a seven-year life depending on the number of transmissions) and optional global positioning functionality. The small size of the units makes them attractive for use in applications such as tracking asset shipments, monitoring unattended remote assets, trailer tracking and mobile security. Our Simplex service was introduced in 2003. As of June 30, 2006, there were approximately 41,000 Simplex subscribers, representing approximately 287% growth over Simplex subscribers as of June 30, 2005. Current users include various governmental agencies, including FEMA, the U.S. Army and the Mexican Ministry of Education, as well as commercial and other entities such as General Electric, Dell and The Salvation Army.

          Customers are able to realize an efficiency advantage from tracking assets on a single system as opposed to several regional systems. Simplex services are currently available from equipment installed into gateways in North America, Europe, Venezuela, Turkey, Korea, Australia, Peru and Russia. We plan to roll out two additional application servers in 2006 to cover what we view as additional major geographic markets for this service. We sell our Simplex services through value added resellers. Value added resellers purchase the services directly from us by subscribing to various pricing options offered by us to address various applications for this service and resell them to the end user. We receive a monthly subscription service fee and a one-time activation fee for each activated Simplex device.

Our Products

          Our services are available for use only with equipment designed to work on our network, which is typically sold to users in conjunction with an initial service plan. Our mobile phones, similar to ordinary cellular phones, are simple to use. Further, we expect that our new mobile phones from QUALCOMM will be among the smallest, lightest and least-expensive satellite phones available.

          Currently, QUALCOMM manufactures all of our mobile phones and most of our accessories. QUALCOMM currently offers GSP-1600 tri-mode units that work on AMPS (the North American analog cellular standard) and CDMA digital cellular networks, as well as on our satellite system. We anticipate

82

that our inventory of GSP-1600s will be depleted later in 2006 or in 2007 as we begin sales of GSP-1700 phones.

          Our fixed phones are manufactured by QUALCOMM and Ericsson. We buy GSP-2900s from QUALCOMM and have a substantial inventory of Ericsson EF-200s to meet customers' demands. Ericsson does not plan to manufacture any additional EF-200s.

          In May 2005, we entered into an agreement with QUALCOMM to manufacture next-generation mobile devices. Under this agreement, QUALCOMM agreed to supply us with what we project will be a supply of advanced mobile phone units and accessories and advanced data products sufficient to supply our expected demand through 2009. In the second half of 2006, we will begin offering the new satellite-only GSP-1700 phone, which will be an update to the currently offered GSP-1600. The new phones will include a user-friendly color LCD screen and a rugged, water resistant case available in multiple colors. The phones are expected to be a significant improvement over earlier-generation equipment, and we believe that the advantages will drive increased adoption from prospective users as well as increased revenue from our existing subscribers.

          In addition to our principal products described above, we offer a large selection of related accessories for our line of phones, including car kits, cigarette lighter adapters, wall chargers, travel chargers and remote antennas. Under our agreement with QUALCOMM, they also will produce for us second generation car kits and other accessories. We believe that sales of these high-margin accessories, especially of car kits, also drive additional product usage, which in turn results in higher service revenue.

          In addition to traditional satellite handsets, we sell multiple specialized products designed to address the specific needs of certain attractive end-user markets including the emergency response, maritime and aviation markets. These products include:

          Emergency Response.    The recently developed Globalstar Emergency Management Communications System (GEMCOMS) is comprised of five of our fixed phones conveniently mounted in a container that allows for quick deployment, set-up and operation in an emergency situation. The GEMCOMS can operate as a standalone unit (allowing up to five simultaneous Globalstar phone calls) or be combined with a small and relatively inexpensive "picocell" to provide an almost instantaneous local cellular capability in areas where the infrastructure has been damaged or destroyed. GEMCOMs operate like stand- alone cellular phone sites. Prototypes of this system were made available to FEMA for use in support of the disaster relief efforts for Hurricanes Katrina, Rita and Wilma.

          Maritime.    We provide mobile satellite services specialized for the maritime market through equipment manufactured and sold by SeaTel Wavecall. SeaTel Wavecall currently produces two maritime products: the Wavecall 3000 and the Wavecall MCM3. The Wavecall 3000 provides a voice and data capability for maritime users with up to 9.6 Kbps (with compressed speeds of up to 38.4 Kbps) data throughput while the MCM3 provides voice and data with a throughput of up to 28.8 Kbps (with compressed speeds of up to 144 Kbps). The omni directional antenna (available on all our products) and small physical package provides a significant savings in both equipment and airtime costs compared to competitive systems. Key users of the WaveCall 3000 include the United States Coast Guard and commercial fishermen. In addition, we are developing our own maritime fixed product for initial sales in the second half of 2006.

          Aviation.    Our aviation products are specially designed for use in helicopters, waterbombers, U.S. and Canadian Coast Guard surveillance and rescue, commercial, general aviation and transport aircraft. Our products are small and lightweight relative to competitive products and are both FAA certified and flight test proven. We have worked with two major companies in the airline industry to identify the service features and necessary regulatory requirements to provide a wireless in-cabin voice and data service to passengers. Our products are sold by avionic companies, including Sagem Avionics, Geneva Aerospace and Northern Airborne Technologies, to customers including the U.S. Army and Air Force.

83


          The satellite data modem model GSP-1620 duplex data device developed and manufactured by QUALCOMM provides packet data and data processing capability over our network. The satellite data modem model GSP-1620 has compressed speeds of up to 38.4 Kbps and is highly programmable to meet multiple applications.

          GSM Picocell System.    We expect to offer a proprietary picocell product in 2007. The system will allow for global standards for mobile communications, or GSM, cellular service in remote areas by backhauling signaling and voice services over our network through a picocell unit. Picocells will be available in any of the four GSM frequencies. The service will have terrestrial, maritime and aviation applications and given our user testing we expect to see strong initial demand from our target markets, including remote emergency response organizations, off-shore petroleum operators and cruise ships.

          Multi-Channel Modem.    In the first half of 2006, we introduced our multi-channel modem to the market. We offer the new multi-channel modem with either four or eight modem boards and a single remote antenna which facilitates data rates up to 76.8 Kbps (with compressed speeds of between 144 and 256 Kbps). We expect this product to be attractive to corporate customers requiring downloads of data at higher speeds and to surveillance and security companies that require simultaneous voice and data applications, such as video security monitoring and telephone service from remote locations. Additionally, the U.S. government is testing this product to determine its suitability for security monitoring and transmission of video images from fixed and mobile platforms. The relative benefits are that (1) a high rate data service is available from the network via a relatively small electronics package at our low usage rates and (2) the product allows simultaneous voice and data availability at higher than a single 9.6 Kbps data rate.

          QUALCOMM GSP-1720 Satellite Data Modem.    We expect to introduce the GSP-1720 modem in the first quarter of 2007. This will be a new satellite data modem board with multiple antenna configurations and an enlarged set of commands for modem control and will be smaller, less expensive and easier to operate than our current product. We expect this new board will be attractive to integrators because it will have more user interfaces that are easily programmable, which will make it easier for value added resellers to integrate the satellite modem processing with the specific application (e.g., monitoring and controlling oil and gas pumps, monitoring and controlling electric power plants and more economically facilitating security and control monitoring of remote facilities).

Customers

          The specialized needs of our global customers span many markets. Our system is able to offer our customers cost-effective communications solutions in areas underserved or unserved by existing telecommunications infrastructures. Although traditional users of wireless telephony and broadband data services have access to these services in developed locations, our targeted customers often operate or live in remote or under-developed regions where these services are not readily available or are not provided on a reliable basis.

          Our markets include government, public safety and disaster relief; recreation and personal; maritime and fishing; business, financial and insurance; natural resources, mining and forestry; oil and gas; construction; utilities; and transportation. We focus our attention on obtaining customers who will be long-term users of our services and products and who will generate high average revenue per user. The following is a discussion of these markets.

          Government, Public Safety and Disaster Relief.    In the United States and Canada, our customers in the government, public safety and disaster relief sector represent one of our largest and most critical

84

markets, and constituted 24% of our total subscribers in those regions at December 31, 2005. We conduct business with many major federal, state, provincial and local government agencies, including, in the United States, the Department of Homeland Security, FBI, Department of Defense, NASA and every branch of the U.S. Military, as well as state and local governments, police departments, hospitals and first response teams. In Canada, we conduct business with the Royal Canadian Mounted Police and with many additional federal and provincial agencies. Relief agencies such as the Red Cross, the Salvation Army and FEMA generate significant demand for both our voice and data products, especially during the late summer months in anticipation of the hurricane season in North America. Our Simplex service facilitates tracking and managing the distribution of movable hard assets such as generators, trucks, trailers and relief supplies to disaster areas, while our fixed and mobile voice terminals enable relief workers and victims to communicate in areas where terrestrial service is no longer operational. We provide customized communications solutions to various departments of the U.S. government, enabling them to monitor logistics status, position reporting and vehicle tracking and performance status, as well as two-way voice communications services. Expansion of our government business both in the United States and throughout the rest of the world represents a significant growth opportunity, and we expect that our relationships with various government agencies will bolster our leadership position in the mobile satellite services industry. Aggregate sales to all U.S. government agencies constituted approximately 15% and 16% of our revenue for 2005 and the six months ended June 30, 2006, respectively, U.S. government agencies may terminate their business with us at any time without penalty. Substantially all of our business with U.S. governmental agencies is pursuant to individual purchase orders with various agencies. We did not have any contract backlog at June 30, 2006.

          Recreation and Personal.    Outdoor enthusiasts, hunters, international leisure travelers, recreational fishermen, backpackers, commercial outfitters, remote lodge owners and nature tour groups use our services for recreational and personal leisure activities and constituted 20% of our U.S. and Canadian customers at December 31, 2005. Our network coverage extends beyond shorelines and provides recreational sailors and recreational fishermen an affordable satellite communications solution. Hunters, hikers and backpackers carry our mobile phones with them to maintain a reliable communications link with the outside world, report emergencies and check voicemail and email.

          Maritime and Fishing.    Customers in all phases of the maritime industry, including commercial fishing, workboat, transport and recreational maritime, use our services for their primary fleet and ship-to-shore communications and constituted 12% of our U.S. and Canadian customers at December 31, 2005. Commercial fishing customers use voice services as their primary communications to coordinate fishing locations with other boats in their fleet and for ship-to-shore communications to arrange docking times or order parts, check landing prices and manage onshore operations. In addition, they use data services for weather and oceanic conditions, which are key to improving their fishing productivity and communicating with government fisheries departments. Commercial fishing users are located primarily in the Pacific Northwest and northern Atlantic fishing regions. Marine transport customers use voice services as their primary ship-to-shore communications while they transport oil from Valdez, Alaska. Additionally, there is a strong demand for voice and data services throughout the Gulf of Mexico for boats servicing offshore oil rigs and for workboats traveling offshore and up the Mississippi River.

          Business, Financial and Insurance.    We provide critical primary and back-up communications services to a variety of users in the financial services industry, which constituted 8% of our U.S. and Canadian customers at December 31, 2005. For example, insurance adjustors use our devices while working in remote locations or surveying disaster areas where traditional communications infrastructure is not available or no longer functioning. We also provide back-up communications to financial institutions, banks and investment houses. In addition, a number of customers buy our equipment for their employees who routinely travel to remote or overseas locations.

85


          Natural Resources, Mining and Forestry.    Natural resources, mining and forestry customers rely on our communications services to conduct their businesses. These customers constituted 5% of our U.S. and Canadian customers at December 31, 2005. Forestry workers in the field utilize our mobile communications services to patrol remote areas. Timber harvesting workers use mobile voice services to scout sites, coordinate logistics and monitor operations. A significant portion of forestry work occurs in mountainous areas in the northwestern United States and western Canada that lack either wireless or wireline communications networks. Similarly, mining companies use our mobile services to survey new mining opportunities and conduct operations in remote geographies that are not served by cellular communications networks. Once a mine is in operation, our customers tend to install fixed communications terminals that provide essential voice and data service to the mine. Miners use our devices to communicate with other miners, remain in touch with central business hubs and report emergencies.

          Oil and Gas.    Oil and gas companies are typically our highest average revenue per user customers as they require satellite-based communications to carry out their routine business. They constituted 5% of our U.S. and Canadian customers at December 31, 2005. Oil and gas companies equip their engineers with our equipment for scouting new drilling opportunities and for conducting routine operations in remote areas. There is an essential need for reliable communication to manage effectively oil, gas and energy extraction operations, which results in very high usage levels for those companies. Moreover, off-shore drilling platforms and oil tankers are equipped with our terminals capable of sending and receiving data and voice transmissions.

          Construction.    Construction companies, which constituted 3% of our U.S. and Canadian customers at December 31, 2005, use our mobile voice phones primarily for constructing new facilities in rural areas. Contractors rely on our mobile devices to maintain contact with sub-contractors, suppliers and architects. Until a remote construction site is connected to a local telecommunications network, our phones often serve as the sole form of communication for site workers. Within the construction industry, drilling and cement companies represent a large customer base. Due to the hazardous nature of construction work, maintaining a reliable communications link at remote construction and drilling sites is critical in the event of an accident or other emergency.

          Utilities.    Utility customers, which constituted 3% of our U.S. and Canadian customers at December 31, 2005, use our services for both normal and emergency operations. For normal operations, our data modems connect on-truck laptops with headquarters to manage work orders and maintain field operations control. During emergencies, our voice services are used to coordinate crew deployment to restore utility services or to keep remote field workers in touch after an accident.

          Transportation.    Customers in the transportation industry, which constituted 2% of our U.S. and Canadian customers at December 31, 2005, use our Simplex services to monitor the location of their vehicles, trailers and assets, such as containers, and use our duplex data and voice products to facilitate two-way voice and data communications with drivers. Long distance drivers need reliable communication with both dispatchers and their destinations to coordinate changing business needs, and our satellite network provides continuous communications coverage while they are in transit.

Our Spectrum

          We hold licenses to operate a wireless communications network via satellite over 27.85 MHz in two blocks of contiguous global radio frequency spectrum. Access to this spectrum enables us to design satellites, network and terrestrial infrastructure enhancements cost effectively because the products and services can be deployed and sold worldwide. This broad spectrum assignment enhances our ability to capitalize on existing and emerging wireless and broadcast applications.

86


          Because most of the desirable spectrum near the PCS bands has already been allocated by the FCC or will be auctioned by the FCC by January 2008, we believe there are limited options for new spectrum allocations. Utilization of existing spectrum is growing quickly. Our spectrum location near the PCS bands should allow us to deploy cost effectively the terrestrial component of an ATC network by leveraging existing terrestrial wireless infrastructures. Further, we believe the ability of our current network to support ATC services will allow us to introduce new services and capabilities before our competitors.

          The FCC has allocated a total of 40 MHz of spectrum at 2 GHz for mobile satellite services. This augments the mobile satellite services spectrum at 1.6 and 2.4 GHz (licensed to us and Iridium) and 1.5 and 1.6 GHz (licensed to Mobile Satellite Ventures, Inmarsat and several foreign operators). In 2001, we received a license to use a portion of this 2 GHz spectrum. In February 2003, the FCC's International Bureau cancelled our authorization based upon our alleged inability to meet future construction milestones and, in June 2004, the FCC affirmed this cancellation. We have asked for reconsideration of the cancellation. In December 2005, the FCC assigned all of the 40 MHz of available spectrum to TMI/TerreStar and ICO Global Communications, although the order granting this was made specifically subject to the outcome of our request for reconsideration. In addition to petitioning for reinstatement of our 2 GHz license, in a separate proceeding we also have challenged the assignment of all of the spectrum to TMI/TerreStar and ICO Global Communications as unlawful and contrary to well-established FCC policy. Although we believe strongly that our 2 GHz license should be reinstated and assigned to us, our existing operations, our plans for the introduction of ATC services and our deployment of a second-generation satellite constellation will not be adversely impacted if we are unsuccessful in obtaining this 2 GHz spectrum license. If we succeed in obtaining reinstatement of the 2 GHz license, it will provide additional spectrum for the future growth of our services.

Domestic and Foreign Revenue

          We supply services and products to a number of foreign customers. Although most of our sales are denominated in U.S. dollars, we are exposed to currency risk for sales in Canada and Europe. For information on our revenue from sales to foreign and domestic customers, see Note 14 to our consolidated financial statements contained in this prospectus.

Our Network

          Our satellite network includes 43 in-orbit low earth orbit satellites, including in-orbit spares temporarily placed into service and satellites that are temporarily out of service but are considered restorable. The design of our orbital planes and the positioning of our ground stations ensure that generally at least two satellites, and often more, are visible to subscribers from any point on the earth's surface between 70o north latitude to 70o south latitude, covering most of the world's population. All of our satellites are virtually identical in design and manufacture, and each satellite contributes equally to the constellation performance, which allows satellite diversity for mitigation of service gaps from individual satellite outages. Our constellation currently orbits in a 40-satellite configuration known as a "Walker pattern" orbital geometry. Each satellite has a high degree of on-board subsystem redundancy, an on-board fault detection system and isolation and recovery for safe and quick risk mitigation. Our ability to reconfigure the orbital location of each satellite provides us with operating flexibility and continuity of service. The design of our space and ground control system facilitates the real time intervention and management of the satellite constellation and service upgrades via hardware and software enhancements.

          Our satellites communicate with our network of 25 gateways, each of which serves an area of approximately 700,000 to 1,000,000 square miles. Each of our gateways has multiple antennas that communicate with our satellites and pass calls seamlessly between antenna beams and satellites as the satellites traverse the gateways, thereby reflecting the signals from our users' terminals to our gateways. Once a satellite acquires a signal from an end-user, the user is authenticated by the serving gateway and

87


then the voice or data channel is established to complete the call to the public switched telephone network, to a cellular or another wireless network, or, in the case of a Simplex data call, to the internet.

          We believe that our terrestrial gateways provide a number of advantages over the in-orbit switching used by Iridium, including better call quality and convenient regionalized local phone numbers for inbound calling. We also believe that our network's design, which relies on terrestrial gateways rather than in-orbit switching, enables faster and more cost-effective system maintenance and upgrades because the system's software and much of its hardware is based on the ground. Our multiple gateways allow us to reconfigure our system quickly to extend another gateway's coverage to make up some or all of the coverage of a disabled gateway or to handle increased call capacity resulting from surges in demand.

          Our network uses QUALCOMM's patented CDMA technology to permit dynamic selection of the strongest available signals. Patented receivers in our handsets track the pilot channel or signaling channel as well as three additional communications channels simultaneously. Compared to other satellite and network architectures, we offer superior call clarity, virtually no discernable delay and a low incidence of dropped calls. The worldwide call success rate average for all of our users varies between 79% and 82%. Our system architecture provides full frequency re-use. This maximizes diversity (which maximizes quality) and maximizes capacity as the assigned spectrum can be reused in every satellite beam in every satellite. Our network also works with Internet protocol data for reliable transmission of IP messages. We have a long-standing relationship with QUALCOMM for the manufacture of our phone handsets, data terminals, gateway hardware and equipment.

          Although our network is CDMA-based, it is configured so that we can also support one or more other air interfaces that we select in the future. For example, we have developed a non-CDMA technology to offer Simplex data services. Because our satellites are essentially "mirrors in the sky," and all of our network's switches and hardware are located on the ground, we can easily and relatively inexpensively modify our ground hardware and software to use other wave forms to meet customer demands for new and innovative services and products. At this time, we are developing several inexpensive additional products and services which will operate in this manner.

          We believe our in-space constellation will provide a commercially acceptable quality of service into 2010. We have eight spare satellites which are being prepared for launch during 2007 to augment our constellation. We plan to place the eight satellites into a constellation configuration which seeks to optimize our service at that time. We have entered into a launch service agreement with Starsem for two launches, with the launches of the spare satellites scheduled for March and May, 2007.

          In addition to our eight spare satellites, we own spare parts for our gateways. We have in storage 28 complete and 3 partial antennas and 8 complete and 3 partial gateways. We selectively replace parts as necessary, and anticipate that this supply will sufficiently serve all of our gateway needs throughout the expected life of our existing satellite constellation.

          Due to the nature of our satellite constellation, we do not carry in-orbit insurance on our current satellite constellation. We plan on insuring the launch of each of our eight spare satellites. Prior to launching these satellites, we will evaluate all the launch insurance options available to us. We do not plan on insuring the spare satellites once they are safely in orbit. See "Risk Factors—Risks Relating to Our Business—We may not be able to launch our satellites successfully. Loss of a satellite during launch could delay or impair our ability to offer our services or reduce our revenues, and launch insurance, even if it is available, will not cover fully this risk." for an additional discussion of insurance related considerations.

          We make no warranties to our subscribers as to the availability of our services and we do not believe we would have any liability to our subscribers in the event of a failure of our network to provide communication services (other than possibly for the refund of unused portions of prepaid service plans).

          On October 5, 2006, we entered into an Authorization to Proceed with Alcatel Alenia Space France pursuant to which we authorized Alcatel to engage in preparation for the construction of our

88


second-generation satellite constellation and agreed to enter into negotiations with Alcatel for it to construct 48 low earth orbit satellites. See "Prospectus Summary—Recent Developments."

Satellite Constellation Operations

          Old Globalstar started commercial service in 2000 with a 48-satellite constellation, four in-orbit spare satellites and eight spare satellites in storage. In response to satellite failures and anomalies, we reconfigured the satellite constellation in mid-2003 from a 48-satellite constellation to a 40-satellite constellation with in-orbit spares. We have maintained the eight orbital planes but now have five service satellites per plane. This constellation transition was achieved with no impact to the service coverage area and with only a modest reduction in the deliverable call capacity of the constellation. Due to continued satellite diversity within the constellation (more than one satellite in view), call quality and call success rates, and thus the customer's experience, were largely unaffected.

          We monitor the health of our satellites for quick identification of "out-of-family" conditions. Our control phones located at selected gateways, which are placed in clear line of sight to the sky, make three-minute calls every 10 minutes and are used to recognize and pinpoint problems quickly if they occur on the system. These phones have a call success rate of over 98%. We recently hired an independent third party consultant to conduct a survey on the health of our satellites. The report confirmed that the constellation should provide a commercially acceptable quality of service into 2010, assuming the spare satellites are launched during 2007, no major new anomalies are detected and those anomalies currently known are controlled satisfactorily.

          From time to time, individual satellites in our constellation experience operating problems that may result in a temporary satellite outage, but due to satellite diversity within our constellation, the individual satellite outages typically do not negatively affect our customers' use of our system.

          Old Globalstar experienced its first satellite failure in March 2001. Eight other satellites have failed subsequently. Eight of these nine failures have been attributed to a common anomaly in the satellite communication subsystem S-band antenna. We have subsequently learned how to control and mitigate this type of anomaly. The other satellite loss was attributed to a unique and typically non-fatal anomaly where successful recovery was precluded by degraded performance of the satellite command receiver subassembly.

          We have categorized three types of anomalies among the satellites in our constellation that, if they materialize throughout the satellite constellation, have the potential for a significant operational impact. These include an electrical short, frequently temporary, in the communications S-band antenna that provides the forward link between the satellite and the user; degraded performance and potentially an eventual failure of the command receivers used for satellite command and control; and degraded performance over time of the solid-state power amplifiers of the S-band communications antenna.

          Although we have implemented procedures for minimizing the impact of these individual satellite events to the overall performance of our satellite constellation, we also are taking steps to improve our in-orbit sparing to extend the life of the constellation. In addition to increasing in-orbit sparing through the reconfiguration of the constellation in 2003, we will further replenish our constellation by launching our eight spare satellites during 2007. By adjusting the constellation in advance of our spare satellite launch, we will seek to provide the best service quality for our customers. We have executed contracts for post-storage testing of the satellites, re-procurement of new cells for the flight batteries and launch services. We plan to construct and launch a replacement satellite constellation prior to the end of the useful life of this constellation. See "Prospectus Summary—Recent Developments."

89


Ancillary Terrestrial Component (ATC)

Background

          In February 2003, the FCC adopted rules that permit satellite service providers to establish ATC networks. ATC authorization enables the integration of a satellite-based service with terrestrial wireless services, resulting in a hybrid mobile satellite services/ATC network designed to provide advanced services and broad coverage throughout the United States. The ATC network would extend our services to urban areas and inside buildings where satellite services currently are impractical. We believe we are at the forefront of ATC development and are actively working to be among the first market entrants. For a description of the FCC's ATC rules and our authorization to provide ATC services, see "Regulation—United States FCC Regulation—ATC."

          The equipment used for ATC is very much like the equipment used in cellular and PCS networks. In demonstrations in New York and Washington D.C. in July 2002, we used a picocell device to permit our satellite phones, operating at our frequencies, to be used both indoors (where satellite service is unavailable) through the modified PICO cell and outdoors through our satellites and ground stations. This demonstrated our ability to make and receive ATC calls using our mobile satellite services spectrum under the authority of an FCC experimental license.

          ATC frequencies are designated in previously satellite-only bands at 1.5 GHz, 1.6 GHz, 2 GHz and 2.5 GHz. On January 20, 2006, we were granted authorization by the FCC to operate an ATC network initially over 11 MHz of our spectrum, divided into 5.5 MHz in the L-band and 5.5 MHz in the S-band. We have filed with the FCC for ATC authorization for all 27.85 MHz of our spectrum. Outside the United States, other countries are actively considering implementing regulations to facilitate ATC services. We are committed to pursuing ATC licenses in those jurisdictions as regulations are implemented and new revenue opportunities are presented.

          In keeping with the FCC's decision, ATC services must be complementary or ancillary to mobile satellite services in an "integrated service offering," which can be achieved by using "dual-mode" handsets capable of transmitting and receiving mobile satellite services and ATC signals. Further, user subscriptions that include ATC services must also include mobile satellite subscription services. Because of these requirements, the number of potential early stage competitors in providing ATC services is limited, as only mobile satellite services operators who are offering commercial services can provide ATC services. At the time we commence ATC operations, we must meet all of the FCC's authorization requirements, including an in-orbit spare requirement.

ATC Opportunities

          We believe we are uniquely positioned to benefit from the development of our ATC license given our existing in-orbit satellite fleet and ground stations. Unlike several of our competitors, our existing constellation and ground stations are technically capable of accommodating ATC operations. Even with high-bit rate applications, we believe that our network and spectrum are sufficient to meet the demanding requirements of the current and next generation of wireless services.

          We could offer the following terrestrial services, among others, with ATC:

90

          We are considering a range of options for rollout of our ATC services. We are exploring selective opportunities with a variety of media and communications companies to capture the full potential of our spectrum and ATC license.

          Northern Sky Research has predicted that the ATC services market will account for 29% of in-service mobile satellite units and 16% of industry retail revenues by the end of 2010.

Competition

          The global communications industry is highly competitive. We currently face substantial competition from other service providers that offer a range of mobile and fixed communications options. Our most direct competition comes from other global mobile satellite services providers. Our two largest global competitors are Inmarsat and Iridium. We compete primarily on the basis of coverage, quality, portability and pricing of services and products.

          Inmarsat has been a provider of global communications services since 1982. Inmarsat owns and operates a fleet of geostationary satellites. Due to its geostationary system, Inmarsat's coverage area extends and covers most bodies of water more completely than we do. Accordingly, Inmarsat is the leading provider of satellite communications services to the maritime sector. Inmarsat also offers global land-based and aeronautical communications services. Inmarsat generally does not sell directly to customers. Rather, it markets its products and services principally through a variety of distributors, including Stratos Global Corporation, Telenor Satellite Services, the France Telecom Group, KDDI Corporation and The SingTel Group, who, in most cases, sell to additional downstream entities who sell to the ultimate customer. We compete with Inmarsat in several key areas, particularly in our maritime markets. We believe that the size and functionality of our mobile handsets and data devices are superior to Inmarsat's fixed units, which tend to be significantly bulkier and more cumbersome to operate. In addition, our products generally are substantially less expensive than those of Inmarsat.

          Iridium owns and operates a fleet of low earth orbit satellites that is similar to our network of satellites. Iridium entered into bankruptcy protection in March 2000 and was out of service from March 2000 to January 2001. Since Iridium emerged from bankruptcy in 2001, we have faced increased competition from Iridium in some of our target markets. Iridium provides data and voice services at rates of up to 2.4 Kbps, which is approximately 25% of our uncompressed speed.

          We compete with regional mobile satellite communications services in several markets. In these cases, the majority of our competitors' customers require regional, not global, mobile voice and data services, so our competitors present a viable alternative to our services. All of these competitors operate geostationary satellites. Our regional mobile satellite services competitors currently include Thuraya, principally in the Middle East and Africa; Asian Cellular Satellites in Asia; Mobile Satellite Ventures and Mobile Satellite Ventures Canada in the Americas; and Optus MobileSat in Australia.

          In some of our markets, such as rural telephony, we compete directly or indirectly with very small aperture terminal operators that offer communications services through private networks using very small aperture terminals or hybrid systems to target business users. Very small aperture terminal operators have become increasingly competitive due to technological advances that have resulted in smaller, more flexible and cheaper terminals.

          We compete indirectly with terrestrial wireline (landline) and wireless communications networks. We provide service in areas that are inadequately covered by these ground systems. To the extent that terrestrial communications companies invest in underdeveloped areas, we will face increased competition in those areas. We believe that local telephone companies currently are reluctant to invest in new switches and landlines to expand their networks in rural and remote areas due to high costs and to decreasing demand and line loss associated with wireless telephony. Many of the underdeveloped areas are sparsely populated so it would be difficult to generate the necessary returns on the capital expenditures required to

91


build terrestrial wireless networks in such areas. We believe that our solutions offer a cost-effective and reliable alternative to ground-based wireline and wireless systems and that continued growth and utilization will allow us to further lower costs to consumers.

          Our industry has significant barriers to entry, including the cost and difficulty associated with obtaining spectrum licenses and successfully building and launching a satellite network. In addition to cost, there is a significant amount of lead-time associated with obtaining the required licenses, building the satellite constellation and synchronizing the network technology. We will continue to face competition from Inmarsat and Iridium and other businesses that have developed global mobile satellite communications services in particular regions. We will also face competition from incipient ATC services providers who are currently designing a core satellite operating business and a terrestrial component around their spectrum holdings.

Employees

          As of June 30, 2006, we had 316 full-time employees and six part-time employees, none of whom is subject to any collective bargaining agreement. We consider our employee relations to be good.

Properties

          Our principal headquarters are located in Milpitas, California, where we currently lease 42,000 square feet of office space. We also own or lease the facilities described in the following table:

Location
   Country
   Sq Feet
   Facility Use
   Owned/Leased
El Dorado Hills, California   USA   11,000   Back-Up Control Center   Leased
Mississauga, Ontario   Canada   13,627   Canada Office   Leased
Milpitas, California   USA   42,000   Corporate Office   Leased
Dublin   Ireland   1,700   Europe Office   Leased
Landover, Maryland   USA   1,810   Sales Office   Leased
Bogotá   Colombia   500   Sales Office   Leased
Caracas   Venezuela   2,200   Venezuela Office   Leased
Panama City   Panama   1,141   GAT Office   Leased
Guatemala City   Guatemala   699   Sales Office   Leased
Tegucigalpa   Honduras   377   Sales Office   Leased
Managua   Nicaragua   452   Sales Office   Leased
Clifton, Texas   USA   10,000   Gateway   Owned
Sebring, Florida   USA   9,000   Gateway   Leased
Barrio of Las Palmas, Cabo Rojo   Puerto Rico   6,000   Gateway   Owned
Aussaguel   France   4,600   Gateway   Leased
Los Velasquex, Edo Miranda   Venezuela   9,700   Gateway   Owned
Wasilla, Alaska   USA   5,000   Gateway   Owned
Smith Falls, Ontario   Canada   6,500   Gateway   Owned
High River, Alberta   Canada   6,500   Gateway   Owned
Managua   Nicaragua   10,857   Gateway   Owned

Intellectual Property

          At June 30, 2006, we held 77 U.S. patents with 13 additional U.S. patents pending and 16 foreign patents with 13 additional foreign patents pending. These patents cover many aspects of our satellite system, our global network and our user terminals. In recent years, we have reduced our foreign filings and allowed some previously-granted foreign patents to lapse based on (a) the significance of the patent, (b) our assessment of the likelihood that someone would infringe in the foreign country, and (c) the probability that we could or would enforce the patent in light of the expense of filing and maintaining the

92


foreign patent which, in some countries, is quite substantial. We continue to maintain all of our important patents in the United States, Canada and Europe.

Legal Proceedings

          From time to time, we are involved in various litigation matters involving ordinary and routine claims incidental to our business. Management currently believes that the outcome of these proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations or financial conditions. We are involved in certain litigation matters as discussed below.

          On May 26, 2005, Loral/QUALCOMM Satellite Services, L.P., et al. ("Loral"), filed a motion for an order in its Delaware bankruptcy case under Rule 2004 seeking to compel us and certain affiliates and individuals to produce documents and appear for oral examination regarding our management of Government Services, LLC ("GSLLC"), our subsidiary formed to engage in certain sales to the U.S. government in which Loral holds a 25% minority interest. We responded and instituted a proceeding in the same court for declaratory judgment as to the parties' rights under a settlement agreement approved by that court on April 14, 2003. Loral's motion was denied. Loral filed a counterclaim in the declaratory judgment proceeding alleging a breach of the settlement agreement and of fiduciary duty by the managers of GSLLC. Loral and we have exchanged documents requested in discovery. We believe that Loral's allegations are without merit; however, if Loral prevails in the declaratory judgment proceeding, we could be ordered to pay Loral an unspecified amount of compensation and/or damages. We have notified our insurance carrier of the case, and the insurance carrier has reserved all rights. We and Loral have agreed to settle this litigation. See "Prospectus Summary—Recent Developments."

          On January 13, 2006, Elsacom N.V., an independent gateway operator whose territories include portions of Central and Eastern Europe and North Africa, served us with a notice of arbitration pursuant to a dispute resolution provision in its Satellite Services Agreement. The dispute stems from our decision in fall 2005 to realign coverage of the two gateways serving Western and Central Europe. Elsacom has not specified the amount of damages that it is seeking. Elsacom asserts that the realignment diminishes its rights under its Satellite Services Agreement. We disagree and intend to defend our decision vigorously. The arbitration is scheduled to be held in January 2007.

93


COMPANY HISTORY

          We may be viewed as the successor to Old Globalstar, which was a Delaware limited partnership formed on November 19, 1993 by Loral and QUALCOMM. Eight other general or limited partners were admitted to the partnership in 1995.

          On February 15, 2002 (the "Petition Date"), Old Globalstar and three of its subsidiaries filed voluntary petitions under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. Old Globalstar and its debtor subsidiaries remained in possession of their assets and properties and continued to operate their businesses as debtors-in-possession.

          On November 17, 2003, Old Globalstar, Thermo and the Official Committee of Unsecured Creditors of Globalstar, L.P. (the "Creditors' Committee") executed a term sheet regarding the acquisition of the Globalstar business by Thermo. On December 2, 2003, the Bankruptcy Court entered an order authorizing the transaction contemplated by the term sheet. On December 5, 2003, Old Globalstar, the Creditors' Committee and Thermo entered into an asset contribution agreement pursuant to which Old Globalstar agreed to transfer its assets to us and Thermo agreed to contribute and loan funds to us, each in exchange for our membership units.

          In connection with the negotiation of the asset contribution agreement, Old Globalstar and the Creditors' Committee required that we agree to the inclusion of provisions in our limited liability agreement providing for the right of the former creditors of Old Globalstar who became members of our company to elect two of our directors, the rights offering described below, pre-emptive and piggyback rights for the minority owners, restrictions on transactions with Thermo or other extraordinary transactions, our obligation to register our common stock under the Securities Exchange Act of 1934 (the "Exchange Act") by October 13, 2006, and other protections for the former creditors of Old Globalstar when they became our minority owners. Other than with respect to the rights offering and other provisions which had expired or been fulfilled, we were required to include these provisions in our certificate of incorporation when we became a Delaware corporation in March 2006.

          Old Globalstar submitted its Disclosure Statement and Fourth Amended Joint Plan to the Bankruptcy Court on May 3, 2004. The Bankruptcy Court confirmed the Plan on June 17, 2004, and the Plan became effective on June 29, 2004 (the "Effective Date"). On the Effective Date, pursuant to the Plan, all partnership interests in Old Globalstar were cancelled without consideration, Old Globalstar's then 18.75% membership interest in us was distributed to its unsecured creditors and Old Globalstar was dissolved. Globalstar Capital Corporation, a former subsidiary of Old Globalstar, remains as a debtor entity responsible for the resolution of claims against Old Globalstar and the wind up of Old Globalstar. We do not have any continuing financial commitment related to the wind up.

          Under the Plan and the asset contribution agreement, the holders of allowed claims were provided the right to purchase additional membership units in us in a rights offering, which was completed on October 12, 2004. The rights offering was divided into two series. The Series A rights allowed holders in the aggregate to purchase 15.12% of our membership units for $8.0 million. The Series B rights allowed holders in the aggregate to purchase 2.50% of our membership units for $4.0 million. The Series A rights were fully subscribed resulting in the issuance of 1,512,000 of our membership units to unsecured creditors of Old Globalstar at a price of $8.0 million. The Series B rights were partially subscribed resulting in the issuance of an additional 46,782 membership units at a price of $749,000. We then redeemed at the same price an equal number of membership units owned by Thermo.

          In April 2004, we agreed to purchase mobile phones from QUALCOMM. Effective October 2004, we and QUALCOMM agreed to restate the terms of this transaction. Under the restated agreement, QUALCOMM provided the mobile phones and various accessories to us in exchange for $1,875,000 and 309,278 membership units with a fair value of approximately $5.3 million.

94


          During the course of its financial restructuring, Old Globalstar developed a business plan predicated on the infusion of capital and the consolidation of certain independent gateway operators. Since 2002, we have consolidated five independent gateway operators, which we believe has brought additional efficiencies to the operation of the Globalstar System and has improved our service and product offerings in North America, Europe, Central America and northern South America. In December 2001, we acquired a 50.1% ownership interest in the Canadian independent gateway operator operations from Vodafone Americas, Inc., which had a joint venture with Loral to be the exclusive Globalstar service provider in Canada. We subsequently acquired the remaining 49.9% ownership interest in the Canadian independent gateway operator from Loral in July 2003 as part of a settlement. In 2002, we consolidated Globalstar USA and Globalstar Caribbean Ltd. (then owned by Vodafone), and acquired a gateway and related assets in France from TE.SA.M., a joint venture of France Telecom, an independent gateway operator serving Western Europe. Most recently, we consolidated our Venezuelan and Central American gateway operations. The acquisition of the Venezuelan gateway from local owners who had acquired it from TE.SA.M. was completed in February 2005, and in January 2006, we acquired all of the stock of various entities which own and operate the independent gateway operator serving Central America. In furtherance of this consolidation strategy, we also have restructured our business relationships with other independent gateway operators and continue to explore additional independent gateway operator acquisitions.

          On January 1, 2006, we elected to be taxed as a C corporation. Effective March 17, 2006, we converted from a Delaware limited liability company into a Delaware corporation. In the conversion, all membership units held by Thermo became shares of Series C common stock, all membership units held by QUALCOMM became shares of Series B common stock and all other membership units became shares of Series A common stock.

          On October 13, 2006, our stockholders approved our amended and restated certificate of incorporation and amended and restated bylaws. These amended and restated governance documents, which will become effective immediately prior to the effective date of the registration statement of which this prospectus is a part, will convert each share of our common stock of each series into one share of a single series of common stock, divide our board of directors into three classes with staggered terms and effect other changes in our corporate governance. We anticipate that, immediately prior to this offering, our board of directors will approve a stock dividend effecting a six-for-one split of our common stock. See "Description of Capital Stock—Amendment and Restatement of Certificate of Incorporation and Bylaws" and "—Anti-Takeover Effects of Certain Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws and of Delaware General Corporation Law."

95


REGULATION

United States FCC Regulation

          Our satellite constellation and four U.S. gateways are licensed by the FCC. Our system is sometimes called a "Big LEO" (for "low earth orbit") system.

          We hold regulatory authorization for two pairs of frequencies on our current system: user links (from the user to the satellites, and vice versa) in the 1610 - 1621.35 and 2483.5 - 2500 MHz bands and feeder links (from the gateways to the satellites, and vice versa) in the 5091 - - 5250 and 6875 - 7055 MHz bands. The FCC authorizes the operation of our satellite constellation and gateways and mobile phones in the United States. Gateways outside the United States are licensed by the respective national authorities.

          Our subsidiary, GUSA Licensee LLC ("GUSA") is authorized by the FCC to distribute mobile and fixed subscriber terminals and to operate gateways in the United States. GUSA holds a license for a gateway in Texas and has applications pending for gateways in Florida and Alaska. In July 2005, the FCC granted GUSA special temporary authority to operate the Florida gateway for 60 days; the FCC repeatedly has renewed this authority for additional 60-day terms. In May 2006, GUSA obtained similar temporary authority to operate the Alaska gateway. We anticipate that the FCC will continue to renew these special temporary authority approvals for the Florida and Alaska gateways until it acts on GUSA's pending applications for permanent authority. Another subsidiary, GCL Licensee LLC ("GCL"), holds an FCC license to operate a gateway in Puerto Rico. GCL is also subject to regulation by the Puerto Rican regulatory agency.

          In January 2006, the FCC granted our application to add an ATC service to our existing mobile satellite services. ATC authorization enables the integration of a satellite-based service with terrestrial wireless services, resulting in a hybrid mobile satellite services/ATC network designed to provide advanced services and ubiquitous coverage throughout the United States. The FCC regulates mobile satellite services operators' ability to provide ATC-related services, and our authorization is predicated on compliance with and achievement of various "gating criteria" adopted by the FCC in February 2003 and summarized below.

          In March 2005, we filed an application to implement this authority and to provide ATC services. On January 20, 2006, the FCC authorized us to provide ATC services using 11 MHz of our spectrum, 5.5 MHz in our L-band and 5.5 MHz in our S-band. In June 2006 we petitioned the FCC to authorize us to use all of our remaining spectrum for ATC services. Based upon the February 2003 FCC order adopting the ATC rules, we anticipate that the FCC will authorize us to use more of our spectrum for ATC service.

96


          On July 17, 2001, the FCC granted us and seven other applicants authorizations to construct, launch and operate mobile satellite services systems in the 2 GHz mobile satellite services band, subject to strict milestone requirements. In the case of foreign-licensed applicants, the FCC "reserved" spectrum but required the foreign applicants to meet the same milestones as the domestic applicants. The FCC originally allocated 70 MHz (two 35 MHz paired blocks) of spectrum for this mobile satellite service but later reduced the allocation to 40 MHz (two 20 MHz paired blocks), reallocating 30 MHz to terrestrial wireless services. Each applicant received a base allocation of 3.5 MHz of paired spectrum with the opportunity to gain additional spectrum upon launch of its system. Systems were required to be constructed in compliance with certain milestones, the first of which was executing a non-contingent contract by July 17, 2002 for the construction of a system. We believe that we met this first milestone by entering into a non-contingent contract with Space Systems/Loral on July 16, 2002. Although we had not yet reached subsequent milestone dates, we requested the FCC to grant certain waivers of later milestones. On January 30, 2003, the FCC's International Bureau denied our waivers and declared our 2 GHz license to be null and void. In June 2004, the FCC declined to reverse that decision, and we requested reconsideration, which request remains pending. Subsequently, all but two of the other licensees (TMI/TerreStar, a Canadian company licensed by Industry Canada, and ICO Global Communications, a company licensed in the U.K.) either surrendered their licenses or had them canceled. In June 2005, the FCC requested public comment on whether it should divide the remaining 40 MHz of mobile satellite services spectrum between the two remaining foreign licensees, reallocate some of the spectrum to other uses or accept new applications. We argued that the FCC should retain all of the spectrum for mobile satellite services, reinstate our canceled 2 GHz license, and grant each of us, TMI/TerreStar and ICO Global Communications one-third of the 40 MHz.

          On December 9, 2005, the FCC decided to retain a 40 MHz allocation for mobile satellite services but to reserve it all for TMI/TerreStar and ICO Global Communication, both of which are non-U.S. corporations, although the reservation was made expressly subject to the outcome of our request for reconsideration of the invalidation of our 2 GHz license. We believe that this action by the FCC reserving all of the spectrum for two companies is inconsistent with the facts and law and have petitioned the FCC to reconsider its decision. The FCC has not yet acted on our petition. If the FCC adheres to this decision, we expect to pursue our available legal remedies, including appealing the FCC's decision to the U.S. Court of Appeals. Any appeal is not likely to be decided before 2007. We do not believe that our existing operations or plans for the introduction of ATC services or for a second-generation satellite constellation will be adversely impacted if the 2 GHz license is not reinstated; however, reinstatement would increase our value and potential revenues and profitability.

          In July 2004, the FCC issued a decision requiring us and Iridium to share the 1618.25 - 1621.35 MHz portion of our 1610 - 1621.35 MHz band. We share this portion of the band with Iridium on a "co-primary" basis for uplink usage, but we retain priority and are "primary" with respect to the downlink usage in this band. Previously, Iridium had exclusive access to 1621.35 - 1626.5 MHz, and, except for the requirement to protect certain radio astronomy operations, we had exclusive access to 1610 - 1621.35 MHz. We have requested reconsideration of certain portions of this decision, including the specific frequencies that must be shared with Iridium and the technical requirements that will govern the sharing. The FCC has not yet acted on our request. Iridium has sought to extend the sharing over an additional 2.25 MHz of our spectrum, which we have vigorously opposed. We do not expect the FCC to grant Iridium's request for more shared spectrum, in part because Iridium is not using the portion of our spectrum in which it already has sharing rights.

          Also in the July 2004 decision, the FCC stated it expects us and Iridium to reach a mutually acceptable coordination agreement. In the same decision, the FCC required us to share the 2496 - 2500

97


MHz portion of our downlink spectrum with certain Broadband Radio Service fixed wireless licensees and with about 100 "grandfathered" Broadcast Auxiliary Service licensees. We expect the latter to be relocated out of the band by about 2009. Although we and others requested reconsideration of certain of the rules that will govern our sharing with these Broadband Radio Service and Broadcast Auxiliary Service licensees, the FCC affirmed this portion of its decision in an order issued in April 2006. Certain parties have filed further requests with the FCC for reconsideration of this decision, which we have opposed. In addition, on July 21, 2006, Sprint Nextel Corporation ("Sprint Nextel") one of the largest Broadband Radio Service licensees, filed an appeal of the FCC's decision to relocate them to the 2496-2500 MHz band with the U.S. Court of Appeals for the D.C. Circuit. On August 28, 2006, the FCC filed a motion to hold the case in abeyance, which Sprint Nextel has opposed. Although we have filed a motion to intervene in the case, it is unclear whether, and if so, to what extent a court decision in favor of Sprint Nextel would have an impact on our spectrum rights.

International Coordination

          Our system operates in frequencies which were allocated on an international basis for mobile satellite services user links and mobile satellite services feeder links. We are required to engage in international coordination procedures with other proposed mobile satellite services systems under the aegis of the International Telecommunications Union. We believe that we have met all of our obligations to coordinate our system.

National Regulation of Service Providers

          In order to operate gateways, the independent gateway operators and our affiliates in each country are required to obtain a license from that country's telecommunications regulatory authority. In addition, the gateway operator must enter into appropriate interconnection and financial settlement agreements with local and interexchange telecommunications providers. All 25 gateways operated by us and the independent gateway operators are licensed. An independent gateway operator in South Africa, Vodacom, was unable to secure a license to activate and operate the gateway in that country and turned the gateway over to Telkom, the South African telephone company, in settlement of debts. We have initiated efforts to reestablish the business in South Africa through our own subsidiary and to obtain an operating license.

          Our subscriber equipment generally must be type certified in countries in which it is sold or leased. The manufacturers of the equipment and our affiliates or the independent gateway operators are jointly responsible for securing type certification. Thus far, our equipment has received type certification in each country in which that certification was required.

United States International Traffic in Arms Regulations

          The United States International Traffic in Arms regulations under the United States Arms Export Control Act authorize the President of the United States to control the export and import of articles and services that can be used in the production of arms. The President has delegated this authority to the U.S. Department of State, Directorate of Defense Trade Controls. Among other things, these regulations limit the ability to export certain articles and related technical data to certain nations. Some information involved in the performance of our operations falls within the scope of these regulations. As a result, we may have to obtain an export authorization or restrict access to that information by international companies that are our vendors or service providers. We have received and expect to continue to receive export licenses for our telemetry and control equipment located outside the United States and for providing technical data to potential launch contractors and developers of our next generation of satellites.

98


Environmental Matters

          We are subject to various laws and regulations relating to the protection of the environment and human health and safety (including those governing the management, storage and disposal of hazardous materials). Some of our operations require continuous power supply, and, as a result, current and past operations at our teleport and other technical facilities include fuel storage and batteries for back-up generators. As an owner or operator of property and in connection with current and historical operations at some of our sites, we could incur significant costs, including cleanup costs, fines, sanctions and third-party claims, as a result of violations of or liabilities under environmental laws and regulations.

99


MANAGEMENT

          Set forth below is certain information concerning our directors and executive officers.

Name
   Age*
   Position(s)
James Monroe III   51   Chairman of the Board, Chief Executive Officer
Peter J. Dalton   62   Director
James F. Lynch   49   Director
Richard S. Roberts   61   Director and Secretary
Anthony J. Navarra   58   President, Global Operations
Fuad Ahmad   36   Vice President and Chief Financial Officer
Megan L. Fitzgerald   46   Senior Vice President, Strategic Initiatives and Space Operations
Dennis C. Allen   55   Senior Vice President of Sales and Marketing
Steven F. Bell   42   Senior Vice President of International Sales, Marketing and Customer Care
Robert D. Miller   42   Senior Vice President of Engineering and Ground Operations
William F. Adler   60   Vice President—Legal and Regulatory Affairs
Paul A. Monte   47   Vice President—Engineering and Product Development
*
As of August 1, 2006.

          James Monroe III has served as a director since December 2003 and as Chairman of the Board of Directors since the Reorganization in April 2004. He was elected Chief Executive Officer in January 2005. Since 1984, Mr. Monroe has been the majority owner of a diverse group of privately owned businesses that operate in the fields of telecommunications, real estate, power generation, industrial equipment distribution, financial services and leasing services and that are sometimes referred to collectively in this prospectus as "Thermo." Thermo controls directly or indirectly Globalstar Holdings LLC, Globalstar Satellite, L.P., and Thermo Funding Company LLC.

          Peter J. Dalton has been a director of the company since January 2004. He has served as chief executive officer of Dalton Partners, Inc., a turnaround management firm, since January 1989. As chief executive officer of Dalton Partners, Inc., Mr. Dalton also has served as chief executive officer and a director of a number of its clients. From November 2001 to September 2004, Mr. Dalton served as chief executive officer of Clickhome Reality, Inc., a discount real estate and mortgage company. Mr. Dalton served as a director and chief financial officer of Wood Associates, a distributor of promotional items from May 2000 to October 2001.

          James F. Lynch has served as a director since December 2003. He has been Managing Director of Thermo Capital Partners, L.L.C. since October 2001. Mr. Lynch has also served as Chairman of Xspedius Communications LLC, a competitive local telephone exchange carrier which is a Thermo affiliate, since January 2005 and served as Chief Executive Officer of Xspedius from August 2005 to March 2006. Prior to joining Thermo Capital Partners, Mr. Lynch was a Managing Director of Bear Stearns & Co., an investment banking and brokerage firm. Mr. Lynch is also a limited partner of Globalstar Satellite, L.P.

          Richard S. Roberts has served as a Vice President and General Counsel of Thermo Development Inc. since June 2002. Prior to that he was a partner of Taft, Stettinius & Hollister LLP, a law firm located in Cincinnati, Ohio, for over 20 years. He has also served as Secretary of the company since the Reorganization in April 2004. Mr. Roberts is also a limited partner of Globalstar Satellite, L.P.

          Anthony J. Navarra was a director from December 2003 until September 2004. He served as President of Old Globalstar and the company from September 1999 to December 2004 and has served as President, Global Operations of the company since January 2005. He has been a director of Iloop Mobile, Inc., a mobile application software company, since September 2005.

100


          Fuad Ahmad has served as Vice President and Chief Financial Officer of the company since June 2005. From June 1999 to May 2005, he served as Finance Director of Old Globalstar and the company, where he was involved in the initial fundraising activities related to building and launching the Globalstar system. He joined the company in June 1996 as Finance Manager. Prior to that time, he was employed by Transworld Telecommunications, Inc., a private equity financed firm engaged in acquiring telecommunications companies in the United States.

          Megan L. Fitzgerald has served as Senior Vice President, Strategic Initiatives and Space Operations of the company since April 2004. From February 2002 to April 2004, Ms. Fitzgerald served as acting Senior Vice President, Operations and Engineering of Old Globalstar. Ms. Fitzgerald served as Senior Vice President, Operations of Old Globalstar from November 2000 to February 2002, as Senior Vice President, Space Operations of Old Globalstar from May 1999 to November 2000 and in various other capacities since June 1994.

          Dennis C. Allen has served as Senior Vice President of Sales and Marketing since June 2004 when he joined the company from Xspedius Communications LLC, where he served as Executive Vice President of Sales from January 2003 to May 2004. Prior to joining Xspedius Communications, Mr. Allen served as Executive Vice President of Sales of a predecessor competitive local exchange company from January 2002 to December 2002. From May 1998 to December 2001, Mr. Allen served as Executive Vice President of Network Telephones, a competitive local telephone exchange providing voice and data products to small and medium sized businesses.

          Steven F. Bell has served as Senior Vice President of International Sales, Marketing and Customer Care of the company since April 2004 and as General Manager of Globalstar Canada, a subsidiary of our company, since July 2003. From June 1999 to July 2003, Mr. Bell served as Director of Sales and Marketing of Globalstar Canada.

          Robert D. Miller has served as Senior Vice President of Engineering and Ground Operations of the company since April 2004. Mr. Miller joined the company from Unibill, Inc., a full service billing vendor for the telecommunications industry, where he served as Senior Vice President and Chief Technology Officer from May 2003 to April 2004. From September 2002 to May 2003, Mr. Miller served as Vice President of Integration & Quality Assurance of Xspedius Communications LLC. Mr. Miller served as Chief Technology Officer of Xspedius, LLC, a predecessor to Xspedius Communications, from September 2001 to September 2002, and as its Vice President of Advanced Services from August 1998 to September 2001.

          William F. Adler has served as Vice President—Legal and Regulatory Affairs of the company since April 2004 when he joined the company from Old Globalstar, where he served as Vice President—Legal & Regulatory Affairs from January 1996 to April 2004. Prior to joining Old Globalstar in 1996, Mr. Adler was a partner in a communications law firm located in Washington, D.C. and served in executive capacities at Pacific Telesis Group and the FCC.

          Paul A. Monte has served as Vice President—Engineering and Product Development since September 2005. From 1997 to September 2005, he served the company and Old Globalstar as Director of Systems Engineering.

          Mr. Navarra, Ms. Fitzgerald and Mr. Adler served as officers or directors of Old Globalstar and certain of its subsidiaries, both prior to and during their bankruptcy proceedings, and Mr. Navarra and Mr. Adler continue to serve as directors or executive officers of a subsidiary of Old Globalstar.

          Each officer serves at the discretion of our board of directors and holds office until his or her successor is elected and qualified or until his or her earlier resignation or removal. There are no family relationships among any of our directors or executive officers.

101


Board of Directors

          Our amended and restated bylaws, which will become effective immediately prior to this offering, provide for a board of directors of seven persons. Our board of directors currently consists of four members, and we intend to elect three new directors to the board following the completion of this offering to fill these vacancies.

          Under the amended and restated bylaws, our board of directors will be divided into three classes, with staggered three-year terms. The initial terms of the directors of each class will expire at the annual meetings of stockholders to be held in 2007 (Class A), 2008 (Class B) and 2009 (Class C). At each annual meeting of stockholders, one class of directors will be elected for a full term of three years to succeed that class of directors whose terms are expiring. The directors will be classified as follows:

          Class A—Mr. Roberts;

          Class B—Mr. Lynch; and

          Class C—Messrs. Dalton and Monroe.

          Upon completion of this offering, Thermo and its affiliates will hold shares representing approximately 58% of the voting power of the company. See "Principal Stockholders." As a result, we will be a "controlled company" for purposes of the NASDAQ Marketplace Rules and will not be required to have a majority of independent directors on the board or to comply with the requirements for compensation and nominating/governance committees. We will, however, be subject to all other NASDAQ Marketplace Rules corporate governance requirements, including those applicable to audit committees.

          Our board of directors has determined that Mr. Dalton is an independent director as defined in Rule 10A-3 under the Exchange Act and in the NASDAQ Stock Market listing requirements. Mr. Dalton has no relationships with our company other than in his capacity as a director.

          We expect to pay certain of our independent directors a fee for each board and committee meeting attended. We have not yet determined these amounts. We may pay disparate fees for chairing or serving on certain committees and may grant awards to our independent directors under our 2006 Equity Incentive Plan. Mr. Dalton currently receives $2,500 per board meeting and has an option to purchase 120,000 shares of our common stock at a price of $2.67 per share.

Committees of the Board of Directors

          Our board of directors has an audit committee, a nominating and governance committee and a compensation committee. The board has adopted a written charter for each of these committees that will be available on our website after the completion of this offering. We currently expect that, at a minimum, the audit committee will meet quarterly, the nominating and governance committee will meet annually and the compensation committee will meet semi-annually.

Audit Committee

          Upon completion of this offering, our audit committee will be comprised of Messrs. Monroe, Lynch and Dalton. The board has determined that Mr. Dalton is an independent director. We are required by Rule 10A-3 under the Exchange Act and by the NASDAQ Marketplace Rules to have an audit committee composed entirely of at least three independent directors within one year of this offering. Following the offering, Mr. Dalton will be designated as the audit committee financial expert, as defined by Item 401(h) of Regulation S-K of the Exchange Act. The principal duties of the audit committee will be to:

102

Nominating and Governance Committee

          Our nominating and governance committee after this offering will be comprised of Messrs. Monroe, Lynch and Roberts. The principal duties of the nominating and governance committee will be to:


Compensation Committee

          Our compensation committee after this offering will be comprised of Messrs. Monroe, Lynch and Roberts. The principal duties of the compensation committee will be to:

Executive Compensation

          We intend to establish compensation plans for our executive officers that will link compensation with the performance of our company and to review periodically our compensation programs to ensure that they are competitive. The following table summarizes, for 2005, the annual compensation of our Chief Executive Officer and our five other most highly compensated executive officers (collectively, the "named executive officers") for services to our company and its subsidiaries in all capacities.

103


Summary Compensation Table

 
    
    
    
   Long-term Compensation
    
    
  
 
   Annual Compensation
    
    
  
 
    
   Securities
Underlying
Options/
SARs
    
    
  
Name and Principal Position
   Salary
   Bonus
   Other Annual
Compensation(1)
   Restricted
Stock
Awards
   LTIP
Payouts
   All Other
Compensation
  

James Monroe III,
Chief Executive Officer(2)
 
 
—
 
 
—
 
—
 
—
 
—
 
—
 
 
—
 

Anthony J. Navarra,
President, Global Operations
 
$
337,440
 
$
12,500
 
—
 
—
 
—
 
—
 
$
6,538
(3)

Megan C. Fitzgerald,
Senior Vice President, Strategic Initiatives and Space Operations
 
$
208,850
 
$
50,000
 
—
 
—
 
—
 
—
 
$
2,089
(4)

Steven F. Bell,
Senior Vice President of International Sales, Marketing and Customer Care
 
$
194,865
 
$
37,500
 
—
 
—
 
—
 
—
 
 
—
 

Dennis C. Allen,
Senior Vice President, Sales and Marketing
 
$
200,000
 
$
25,000
 
—
 
—
 
—
 
—
 
 
—
 

Robert D. Miller,
Senior Vice President, Ground Operations and Engineering
 
$
200,000
 
$
25,000
 
—
 
—
 
—
 
—
 
 
—
 
(1)
None, other than perquisites that did not exceed 10% of salary and bonus for any named executive officer.

(2)
Mr. Monroe receives no compensation from us, and we do not intend to compensate him for his services in the future. We accrue $6,875 per month as compensation expense for Mr. Monroe, which amount is reflected in marketing, general and administrative expenses and as an additional capital contribution by Thermo to our equity. No stock is issued in exchange for this capital contribution. We do reimburse Thermo and Mr. Monroe for expenses incurred by him in connection with performing his services for us, including temporary living expenses while at our offices or traveling on our business, but generally we do not reimburse him for his air travel expenses. Reimbursements to Thermo for Mr. Monroe's expenses aggregated $28,000 for the year ended December 31, 2005 and $11,000 for the six months ended June 30, 2006.

(3)
Consists of premiums on life insurance for the benefit of Mr. Navarra ($4,788) and matching contributions to 401(k) Plan ($1,750).

(4)
Consists of matching contributions to 401(k) Plan.

Equity Incentive Plan

          Our 2006 Equity Incentive Plan was approved by our board of directors and a majority of our stockholders on July 12, 2006 and will become effective upon the registration of our common stock under the Securities Act or the Exchange Act.

          Purpose.    The Equity Incentive Plan is intended to make available incentives that will assist us in attracting, retaining and motivating employees, directors and consultants whose contributions are essential

104


to our success. We may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares and performance units.

          Administration.    The compensation committee of our board of directors will administer the Plan, although the board or compensation committee may delegate to one or more of our officers authority, subject to limitations specified by the Plan and the board or committee, to grant awards to service providers who are neither our officers nor directors. Subject to the provisions of the Plan, the administrator will determine in its discretion the persons to whom and the times at which awards are granted, the types and sizes of such awards, and all of their terms and conditions. All awards must be evidenced by a written agreement between us and the participant. The administrator may amend, cancel or renew any award, waive any restrictions or conditions applicable to any award, and accelerate, or otherwise modify the vesting of any award. The administrator has the authority to construe and interpret the terms of the Plan and awards granted under it.

          Shares Subject to Equity Incentive Plan.    A total of 1,200,000 shares of our common stock are initially authorized and reserved for issuance under the Equity Incentive Plan. This number will automatically increase on January 1, 2007, and each subsequent anniversary through 2016, by an amount equal to the lesser of (a) 2% of the number of shares of stock issued and outstanding on the immediately preceding December 31, or (b) an amount determined by the board. The board of directors may elect to reduce, but not increase without obtaining stockholder approval, the number of additional shares authorized in any year. Appropriate adjustments will be made in the number of authorized shares and other numerical limits in the Plan and in outstanding awards to prevent dilution or enlargement of participants' rights in the event of a stock split or other change in our capital structure. Shares subject to awards which expire or are cancelled or forfeited will again become available for issuance under the Plan. The shares available will not be reduced by awards settled in cash or by shares withheld to satisfy tax withholding obligations. Only the net number of shares issued upon the exercise of stock appreciation rights or options exercised by tender of previously owned shares will be deducted from the shares available under the Plan.

          Eligibility.    Awards may be granted under the Plan to our employees, including officers, directors, or consultants or those of any present or future parent or subsidiary corporation or other affiliated entity. Although we may grant incentive stock options only to employees, we may grant nonstatutory stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares and performance units to any eligible participant.

          Stock Options.    The administrator may grant nonstatutory stock options, "incentive stock options" within the meaning of Section 422 of the Internal Revenue Code, or any combination of these. The exercise price for each option may not be less than the fair market value of a share of our common stock on the date of grant. The term of all options may not exceed 10 years. Options vest and become exercisable at such times or upon such events and subject to such terms, conditions, performance criteria or restrictions as specified by the administrator. Unless a longer period is provided by the administrator, an option generally will remain exercisable for three months following the participant's termination of service, except that if service terminates as a result of the participant's death or disability, the option generally will remain exercisable for twelve months, but in any event not beyond the expiration of its term. An option held by a participant whose service is terminated for cause will immediately cease to be exercisable. No options have been issued under the Plan.

          Stock Appreciation Rights.    A stock appreciation right gives a participant the right to receive the appreciation in the fair market value of our common stock between the date of grant of the award and the date of its exercise. We may pay the appreciation either in cash or in shares of our common stock. We may make this payment in a lump sum, or we may defer payment in accordance with the terms of the participant's award agreement. The administrator may grant stock appreciation rights under the Plan

105


in tandem with a related stock option or as a freestanding award. A tandem stock appreciation right is exercisable only at the time and to the same extent that the related option is exercisable, and its exercise causes the related option to be canceled. Freestanding stock appreciation rights vest and become exercisable at the times and on the terms established by the administrator. The maximum term of any stock appreciation right granted under the Equity Incentive Plan is 10 years. No stock appreciation rights have been issued under the Plan.

          Stock Awards.    The administrator may grant stock awards under the Plan either in the form of a restricted stock purchase right, giving a participant an immediate right to purchase our common stock, or in the form of a restricted stock bonus, for which the participant furnishes consideration in the form of services to us. The administrator determines the purchase price payable under restricted stock purchase awards, which may be less than the then current fair market value of our common stock. Stock awards may be subject to vesting conditions based on such service or performance criteria as the administrator specifies, and the shares acquired may not be transferred by the participant until vested. Unless otherwise determined by the administrator, a participant will forfeit any unvested shares upon voluntary or involuntary termination of service for any reason, including death or disability. A participant will also be required to sell to the Company at cost, if requested, any unvested restricted shares acquired via purchase right. Participants holding stock awards will have the right to vote the shares and to receive any dividends paid, except that dividends or other distributions paid in shares will be subject to the same restrictions as the original award.

          Restricted Stock Units.    Restricted stock units granted under the Plan represent a right to receive shares of our common stock at a future date determined in accordance with the participant's award agreement. The administrator, in its discretion, may provide for settlement of any restricted stock unit by payment to the participant in cash of an amount equal to the fair market value on the payment date of the shares of stock issuable to the participant. No monetary payment is required for receipt of restricted stock units or the shares issued in settlement of the award, the consideration for which is furnished in the form of the participant's services to us. The administrator may grant restricted stock unit awards subject to the attainment of performance goals similar to those described below in connection with performance shares and performance units, or may make the awards subject to vesting conditions similar to those applicable to stock awards. Participants have no voting rights or rights to receive cash dividends with respect to restricted stock unit awards until shares of common stock are issued in settlement of such awards. However, the administrator may grant restricted stock units that entitle their holders to receive dividend equivalents, which are rights to receive additional restricted stock units for a number of shares whose value is equal to any cash dividends we pay. Unless otherwise determined by the administrator, a participant will forfeit any unvested restricted stock units upon voluntary or involuntary termination of service for any reason, including death or disability. No restricted stock units have been issued under the Plan.

          Performance Shares and Performance Units.    The administrator may grant performance shares and performance units under the Plan, which are awards that will result in a payment to a participant only if specified performance goals are achieved during a specified performance period. Performance share awards are denominated in shares of our common stock, while performance unit awards are denominated in dollars. In granting a performance share or unit award, the administrator establishes the applicable performance goals based on one or more measures of business performance enumerated in the Plan, such as revenue, gross margin, net income, free cash flow, return on capital or market share. To the extent earned, performance share and unit awards may be settled in cash, shares of our common stock, including restricted stock, or any combination of these. Payments may be made in lump sum or on a deferred basis. If payments are to be made on a deferred basis, the administrator may provide for the payment of dividend equivalents or interest during the deferral period. Unless otherwise determined by the administrator, if a participant's service terminates due to death or disability prior to completion of the applicable performance period, the final award value is determined at the end of the period on the basis

106

of the performance goals attained during the entire period, but payment is prorated for the portion of the period during which the participant remained in service. Except as otherwise provided by the Plan, if a participant's service terminates for any other reason, the participant's performance shares or units are forfeited. No performance shares or performance units have been issued under the Plan.

          Change in Control.    In the event of a change in control of our company as described in the Plan, the acquiring or successor entity may assume or continue awards outstanding under the Plan or substitute substantially equivalent awards. Any awards which are not assumed or continued in connection with a change in control or exercised or settled prior to the change in control will terminate effective as of the time of the change in control. The administrator may provide for the acceleration of vesting of any or all outstanding awards upon such terms and to such extent as it determines. The Plan also authorizes the administrator, in its discretion and without the consent of any participant, to cancel each or any outstanding award denominated in shares of stock upon a change in control in exchange for a payment to the participant with respect to each vested share (or unvested share, if so determined) subject to the cancelled award of an amount equal to the excess of the consideration to be paid per share of common stock in the change in control transaction over the exercise or purchase price per share under the award.

          Amendment and Termination.    The Plan will continue in effect until its terminated by the administrator, provided, however, that all awards will be granted, if at all, within 10 years of the effective date of the Plan. The administrator may amend, suspend or terminate the Plan at any time, provided that without stockholder approval, the plan cannot be amended to increase the number of shares authorized, change the class of persons eligible to receive incentive stock options or effect any other change that would require stockholder approval under any applicable law or listing rule. Amendment, suspension or termination of the Plan will not adversely affect any outstanding award without the consent of the participant, unless such amendment, suspension or termination is necessary to comply with applicable law, regulation or rule.

          Expected Awards.    No stock awards currently have been issued under the Plan. However, promptly after the completion of this offering, we expect to grant restricted stock bonus awards for an aggregate of approximately 265,000 shares of our common stock under the Plan to substantially all of our employees. As a result of these grants, we will take a pre-tax non-cash charge of approximately $4.5 million; $1.1 million of that amount will be recognized in the fourth quarter of 2006 and the balance will be amortized over the following three years. The shares subject to these restricted stock bonus awards will vest 25% upon grant. The remaining 75% of the shares will vest not later than the third anniversary of the date of grant provided that the participant is still employed by us at such time. Shares that remain unvested at the time of service termination will be forfeited to us.

Executive Incentive Compensation Plan

          Our President of Global Operations, Chief Financial Officer and four senior Vice Presidents participate in a plan under which they may become entitled to receive supplemental incentive compensation payments in cash in each of January 2007, 2008 and 2009. Participants in this plan and the terms of this plan were determined and approved by our board of directors; none of the participants in this plan is a director. Payments under this plan will be a percentage of the amount by which the equity value of Thermo's investment in us at valuation dates in October 2006, 2007 and 2008 exceeds three times the amount that Thermo had invested or agreed to invest in us prior to 2006. In order to receive benefits under this plan, a participant must be employed by us on the applicable payment date, subject to certain exceptions for involuntary termination, death and disability, and fulfill individual performance criteria. The individual performance criteria are objective in nature, differ for each participant, and relate to our business functions or operations that the participant supervises. Generally, the criteria require specific and measurable improvements in those functions or operations. Total benefits under this plan are capped at $30 million. Individual benefits are subject to caps on aggregate and annual benefits.

107


          The following table sets forth certain information with respect to awards under this executive incentive compensation plan in 2005. No payments under this plan were made in 2005 or will be made in 2006.

Long-Term Incentive Plans—Awards in Last Fiscal Year

 
    
    
   Estimated Future Payouts Under
Non-Stock Price-Based Plans
 
   Number of
Shares,
Units or
Other Rights
   Performance or
other Period
until Maturation
or Payout
Name
  Threshold
   Target
   Maximum
James Monroe III   —   —   —   —     —
Anthony J. Navarra   —   2004-2008   —   —   $ 5,000,000
Megan L. Fitzgerald   —   2004-2008   —   —   $ 5,000,000
Steven F. Bell   —   2004-2008   —   —   $ 5,000,000
Dennis C. Allen   —   2004-2008   —   —   $ 5,000,000
Robert D. Miller   —   2004-2008   —   —   $ 5,000,000

          We accrued $1.6 million in compensation expense for the year ended December 31, 2005 with respect to the executive incentive compensation plan.

Pension Plan

          Mr. Navarra and Ms. Fitzgerald are entitled to benefits under a defined benefit pension plan originally maintained by Space Systems/Loral for employees of Old Globalstar, among others. The accrual of benefits in the Old Globalstar segment of this plan was curtailed, or frozen, as of October 23, 2003. On June 1, 2004, the assets and frozen pension obligations of the Old Globalstar segment of the plan were transferred to a new Globalstar Retirement Plan, which remains frozen. We continue to fund the plan in accordance with Internal Revenue Code requirements, but participants are not currently accruing benefits beyond those accrued at October 23, 2003. The estimated annual benefits payable upon retirement at normal retirement age to Mr. Navarra and Ms. Fitzgerald are $35,349 and $26,560, respectively.

108


PRINCIPAL STOCKHOLDERS

          The following table and accompanying footnotes set forth information regarding the beneficial ownership of our common stock by (1) each person who is known by us to own beneficially more than 5% of our common stock, (2) each director and named executive officer, and (3) all of our directors and executive officers as a group.

          Beneficial ownership of shares is determined under the rules of the SEC and generally includes any shares over which a person exercises sole or shared voting or investment power.

          The number of shares and percentages of beneficial ownership prior to the offering set forth below are based on 10,479,249 shares of our common stock issued and outstanding as of September 1, 2006 and before giving effect to the six-for-one stock split we expect to effect immediately prior to this offering.

          Unless otherwise indicated below, the address for each person in the following table is care of Globalstar, Inc., 461 South Milpitas Blvd., Milpitas, California 95035.

 
    
    
   Shares Beneficially Owned
After this Offering
 
    
    
   Assuming the
Underwriters'
Option is
Not Exercised
   Assuming the
Underwriters'
Option is
Exercised in Full
 
   Shares Beneficially
Owned Prior to
this Offering
Beneficial Owner
  Number
   Percent
   Number
   Percent
   Number
   Percent
Globalstar Holdings, LLC(1)   6,440,125   61.46   38,640,750   55.70   38,640,750   54.93
Thermo Funding Company LLC(1)(2)   2,061,856   16.65   12,371,136   15.31   12,371,136   15.12
Columbia Ventures Corporation(3)   1,004,936   9.59   6,029,616   8.69   6,029,616   8.57
QUALCOMM Incorporated(4)   692,400   6.61   4,154,400   5.99   4,154,400   5.91
Globalstar Satellite, LP   103,093   *   618,558   *   618,558   *
James Monroe III(1)(5)   8,605,074   69.47   51,630,444   63.88   51,630,444   63.12
Peter J. Dalton(6)   20,000   *   120,000   *   120,000   *
James F. Lynch   —   —   —   —   —   —
Richard S. Roberts   —   —   —   —   —   —
Anthony J. Navarra   10,000   *   60,000   *   60,000   *
Megan L. Fitzgerald   —   —   —   —   —   —
Steven F. Bell   1,000   *   6,000   *   6,000   *
Dennis C. Allen   10,000   *   60,000   *   60,000   *
Robert D. Miller   —   —   —   —   —   —
All directors and executive officers as a group (12 persons)   8,646,074   69.80   51,876,444   64.19   51,876,444   63.42
*
Less than 1%

(1)
The address of Mr. Monroe, Globalstar Holdings, LLC and Thermo Funding Company LLC is 1735 Nineteenth Street, Denver, CO 80202.

(2)
Consists of 154,640 (927,840 shares post-split) shares of common stock which are owned of record by Thermo Funding Company LLC and 1,907,216 shares (11,443,296 shares post-split) which are subject to the terms of the irrevocable standby stock purchase agreement. See "Certain Relationships and Related Party Transactions—Irrevocable Standby Stock Purchase Agreement."

(3)
Based on information provided by Columbia Ventures Corporation as to its beneficial ownership. Some shares beneficially owned by Columbia Ventures Corporation are held in record name by Bank of America Securities LLC. Bank of America Securities disclaims beneficial ownership of these shares. The address of Columbia Ventures Corporation is 203 SE Park Place Drive #270, Vancouver, WA 98684. Columbia Ventures Corporation has advised us that Mr. Kenneth Peterson is the beneficial owner of the shares held by Columbia Ventures Corporation.

(4)
The address of QUALCOMM Incorporated is 601 S. Figueroa Street, Los Angeles, CA 90017.

(5)
Mr. Monroe controls, either directly or indirectly, each of Globalstar Satellite LP, Globalstar Holdings, LLC and Thermo Funding Company LLC and, therefore, is deemed the beneficial owner of the shares held by such entities.

(6)
Consists of 20,000 shares (120,000 shares post-split) of common stock that may be acquired upon the exercise of a currently exercisable stock option.

109


CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

          The Thermo Transaction.    As described under "Company History," we were formed as a Delaware limited liability company in November 2003 for the purpose of acquiring substantially all the assets of Old Globalstar and its subsidiaries in a Chapter 11 bankruptcy proceeding. We acquired the Old Globalstar assets and assumed certain liabilities pursuant to an asset contribution agreement among Thermo, Old Globalstar and the Creditor's Committee representing Old Globalstar's unsecured creditors. The Thermo Transaction was accomplished in a two stage process. The first stage, which was completed on December 5, 2003, included Thermo's commitment to make a total investment in the company of $43.0 million, subject to certain conditions, including the completion of the second stage. In the first stage, Thermo contributed $1.8 million in cash in exchange for a 14.8% member interest. Old Globalstar contributed certain non-regulated assets and certain operating liabilities (excluding liabilities subject to compromise) in exchange for an 85.2% member interest. Thermo purchased and restated Old Globalstar's existing $20.0 million debtor-in-possession financing, plus accrued interest of $765,000, and the parties executed a management agreement. Under the management agreement, operational control of the business, as well as certain ownership rights and risks, was transferred to Thermo and us, to the extent permitted by applicable law.

          The second stage, which was completed on April 14, 2004, included the transfer to us from Old Globalstar of assets requiring FCC approval and the conversion of $18.0 million due to Thermo under the debtor-in-possession financing (consisting of $10.8 million of the total indebtedness outstanding after the stage one transactions, $1.6 million that was drawn in December 2003, $5.0 million that was drawn from February to March 2004 and $685,848 in accrued interest) into membership units.

          Thermo Investments.    Following the closing of the Thermo Transaction, we were owned directly and indirectly 81.3% by Thermo and 18.7% by Old Globalstar. Thermo had invested approximately $18.8 million and had a remaining commitment of $24.2 million. Thermo invested an additional $7.0 million through equity contributions in 2004, an additional $4.2 million in April 2005 and an additional $13.0 million in March 2006. No additional equity interests were issued in exchange for these contributions. In connection with our March 2006 conversion to a Delaware corporation, we expect to make a special distribution of $685,848 to Thermo when permitted by our credit agreement. See "Dividend Policy and Restrictions."

          Dissolution of Old Globalstar.    Old Globalstar was dissolved on June 29, 2004, and its 18.7% minority member interest (represented by 1,875,000 membership units) was distributed to unsecured creditors (represented on our predecessor's balance sheet by the approximately $3.4 billion of "liabilities subject to compromise"), including Loral and QUALCOMM.

          The Rights Offering.    The holders of allowed claims were provided the right to purchase additional membership units in us in a rights offering that was completed on October 12, 2004. The rights offering was divided into two series. The proceeds of the rights offering were used to redeem an equivalent number of membership units from Thermo.

          Services Provided by Thermo.    For the years ended December 31, 2004 and 2005 and the six months ended June 30, 2006, we recorded approximately $116,000, $76,000 and $20,000, respectively, for general and administrative expenses incurred by Thermo on our behalf and for services provided to us by officers of Thermo. No such expenses were recorded in 2003. We and Thermo have an informal understanding that we will reimburse Thermo and Mr. Monroe for expenses incurred by him in connection with his services to us; including temporary living expenses while at our offices or traveling on our business, but generally excluding air travel expenses. None of these costs are, or are expected to become, material to us.

          Pursuant to an Equipment Sales Agreement and a Lease Management Agreement, each dated as of August 1, 2005, we have agreed to sell our products and provide administrative services to Star Leasing LLC, which is owned indirectly by Mr. Monroe. Star Leasing may purchase products from us at our sales

110


agent's suggested retail price as set forth from time to time in our equipment order forms. Star Leasing will pay the purchase price of the products in cash and then lease the products to unrelated third parties. All sales to Star Leasing will be final and non-returnable, except for defective products. Under the Lease Management Agreement, we will provide Star Leasing with billing, collection, customer care, equipment reporting and other support services in managing Star Leasing's lease agreements. Star Leasing will pay us a monthly administration fee for these services in an amount ranging up to approximately $10,000 based on the number of products Star Leasing has purchased. The agreements' terms vary from one to five years. During 2005 and the six months ended June 30, 2006, we did not bill Star Leasing for any products under the Equipment Sales Agreement.

          Redemption of Interests in Globalstar Leasing LLC.    Our subsidiary Globalstar Leasing LLC leases certain telecommunications equipment to us. From December 4, 2003 to January 1, 2005 each of Thermo Development, Inc. and James F. Lynch owned a 1% interest in Globalstar Leasing, which they acquired for an investment of $50,000 each. On January 1, 2005, Globalstar Leasing paid each of them $50,000 to redeem their minority interests.

          Irrevocable Standby Stock Purchase Agreement.    In April 2006, in connection with the execution of our credit agreement, Thermo Funding Company LLC entered into an irrevocable standby stock purchase agreement with us and Wachovia Investment Holdings, LLC, as administrative agent under our credit agreement, pursuant to which Thermo Funding Company agreed to purchase up to 2,061,856 shares of our common stock at a price of $97 per share (12,317,136 shares of common stock at approximately $16.17 per share on a post-split basis), being, in each case, approximately $200.0 million in the aggregate. The purchase price will remain at approximately $16.17 per share without regard to any future increase in the trading price of our common stock. Our board of directors determined that the price per share represented the fair market value of our common stock on the date of the agreement. Thermo Funding Company secured its obligations under the agreement by depositing in escrow cash and marketable securities with a fair market value equal to 105% of the undrawn commitment under the agreement, initially $210.0 million.

          Pursuant to the agreement, Thermo Funding Company will be required to purchase shares of our Series A common stock (in minimum amounts of $5.0 million) as may be necessary:

          Pursuant to the agreement, on June 30, 2006, Thermo Funding Company purchased 927,840 shares of our common stock for approximately $15.0 million.

          Thermo Funding Company may elect to purchase any unpurchased common stock at approximately $16.17 per share subject to the irrevocable standby stock purchase agreement at any time. The agreement terminates on the earliest of December 31, 2011, our payment in full of all obligations under the credit agreement or Thermo Funding Company's purchase of all of the common stock subject to the agreement.

          After completion of this offering, as required by the pre-emptive rights provisions contained in our certificate of incorporation as in effect prior to this offering, we intend to offer our stockholders as of June 15, 2006 who were accredited investors (as defined under the Securities Act) the opportunity to participate in the transactions contemplated by the standby stock purchase agreement with Thermo Funding Company on a pro rata basis on substantially the same terms as Thermo Funding Company except that these stockholders will not be subject to the escrow arrangements described above. For

111


example, they would have the right to purchase common stock at any time during the term of the standby stock purchase agreement at the same price of approximately $16.17 per share, without regard to any future increase in the trading price of our common stock. These stockholders, excluding stockholders who have waived their pre-emptive rights, will be entitled to purchase, and upon entering into the commitment may elect to purchase at any time thereafter, up to 785,328 shares of common stock, for an aggregate purchase price of approximately $12.7 million.

          Loral and QUALCOMM Settlements.    On March 14, 2003, Loral, the Creditors' Committee and Old Globalstar signed a term sheet outlining the terms and conditions of a comprehensive settlement of certain contested matters and a release of the claims against Loral (the "Loral Settlement"). The Bankruptcy Court approved the Loral Settlement on April 14, 2003. The parties executed a definitive agreement reflecting the terms of the Loral Settlement as of April 8, 2003, and closed the various interrelated transactions on July 10, 2003. Pursuant to the definitive settlement agreement, as of the closing, among other things: (1) Old Globalstar received title to eight spare satellites; (2) certain agreements under which Loral held exclusive rights to provide Old Globalstar services to certain defense, national security and other government agencies and in the aviation market were terminated and a new joint venture, Government Services, L.L.C., owned 75% by Old Globalstar and 25% by Loral was formed to pursue business opportunities with those governmental agencies; (3) Old Globalstar received Loral's interests in the Canadian Globalstar service provider operations (49.9% interest representing 17,758,485 common shares valued at CD$25,000); (4) certain financial obligations of Loral-affiliated service providers ($5.5 million) due to Old Globalstar were settled through deduction in debt obligations owed by Globalstar Canada Co. ($5.5 million) to Loral and $4.4 million of other financial obligations between Old Globalstar and Loral were restructured; (5) Old Globalstar received the unused portion of advance prepayments ($2.2 million) made by it under its 2GHz satellite contract with Space Systems/Loral, Inc., an affiliate of Loral, as reduced by certain financial obligations of Old Globalstar to Loral ($109,000); (6) Loral's designated individuals resigned from Old Globalstar's General Partners Committee, and officers of Old Globalstar were appointed as members of the General Partners Committee; and (7) Old Globalstar and its subsidiaries and Loral and its subsidiaries and affiliates provided mutual releases of claims and Old Globalstar and its subsidiaries released any claims against the members of the Committee.

          As a result of the Loral Settlement, we had a restructured note payable to Loral in the amount of approximately $4.0 million with interest at 6% per annum due in equal quarterly installments of $364,000 plus interest from June 2005 through March 2008.

          On July 31, 2005, the notes payable and accrued interest to Loral totaled approximately $4.0 million. Pursuant to an agreement reached with Loral effective July 31, 2005, this amount was settled in exchange for (a) the offset of an $818,000 receivable due to us; (b) cash of $500,000 paid by us; (c) the issuance by us to Loral of three credit memos of $300,000, $500,000 and $1,809,000 to be used for purchase by Loral of equipment and air time; and (d) the forgiveness of $100,000 by Loral (recorded as other income). As of December 31, 2005 and June 30, 2006, the credit memos for $300,000 and $500,000 had open purchase commitments placed against the remaining balances of approximately $24,000 and $408,000, respectively, and $24,000 and approximately $0, respectively. Approximately $635,000 and $1,366,000 of the $1,809,000 credit memo had been utilized as of December 31, 2005 and June 30, 2006, respectively. This credit memo is expected to expire in October 2006. As of December 31, 2005 and June 30, 2006, respectively, unused credit memos totaling approximately $1,606,000 and $467,000 were classified as deferred revenue on our balance sheets.

          On April 13, 2004, we, Old Globalstar, certain subsidiaries of both Globalstar entities, the Creditors' Committee, Thermo and QUALCOMM entered into a Settlement Agreement and Release (the "QUALCOMM Settlement"). Under the terms of the QUALCOMM Settlement: QUALCOMM's unsecured claim against the estate of Old Globalstar was agreed to be liquidated at a value of approximately $661.3 million; it was agreed that QUALCOMM's unsecured claim would receive pari passu treatment consistent with other unsecured claims against Old Globalstar; all existing agreements between Globalstar

112


entities and QUALCOMM, with certain minor exceptions for in process items, were terminated with no further rights or obligations; and Old Globalstar and QUALCOMM exchanged broad releases of further liability. Also on April 13, 2004, QUALCOMM and we entered into a series of new commercial agreements which defined, among other items, the terms under which we would continue to have a royalty free right to use certain QUALCOMM intellectual property and would continue to purchase products and engineering services from QUALCOMM.

          Purchases from QUALCOMM.    On July 9, 2004, we issued a QUALCOMM purchase order under the terms of the April 13, 2004 commercial agreements with QUALCOMM for QUALCOMM GSP-1600 mobile phones at a price of $26.0 million. Consistent with the terms of those agreements, we paid $6.5 million (25%) against this purchase order in 2004; the remaining 75% was paid upon the delivery of each unit. Delivery of the units by QUALCOMM commenced in January 2005 and was completed by December 31, 2005. We and QUALCOMM subsequently agreed to certain credits and discounts. Under the terms of these commercial agreements, we have continued to place production orders with QUALCOMM for fixed user terminals, car kits and accessory items on an as-required basis. QUALCOMM has provided customary warranties for most of these products under these commercial agreements.

          During 2005, we issued separate purchase orders pursuant to amendments of the agreement to QUALCOMM for additional phone equipment and accessories under the terms of the April agreements that aggregated to a total commitment balance of approximately $158.0 million. Approximately $107.0 million of the $158.0 million consists of the new generation of phones and fixed user terminals, car kits and accessories, for which deliveries will commence in October 2006 and are expected to continue through 2009. The remaining $51.0 million consists of phones and accessories relating to GSP-1600 phone purchases. At June 30, 2006, 67% of the $51.0 million order for GSP-1600 phones and accessories had been fulfilled and the remainder is expected to be fulfilled by the end of 2006.

          Within the terms of the commercial agreements, we paid QUALCOMM approximately 15% to 25% of the total order as advances for inventory. As of December 31, 2004 and 2005, and June 30, 2006, total advances to QUALCOMM for inventory were $8.8 million, $13.5 million and $18.7 million, respectively. Under the new agreements, we did not receive any additional discounts from QUALCOMM.

          The total orders placed with QUALCOMM as of June 30, 2006 were approximately $186.3 million, with outstanding commitment balances of approximately $123.1 million, which includes $18.7 million of inventory advances. Any late payments are subject to a 1% late charge per month.

          The commercial agreements and related purchase orders currently in force may be terminated by us or QUALCOMM if the other party breaches the agreement by disclosing confidential information, by engaging in unauthorized sale of the products, or by dissolving, liquidating or discontinuing its business. If we cancel an order or QUALCOMM terminates the agreement due to our default, we must pay a termination fee based on QUALCOMM's expenses for producing the product. We also are subject to a restocking fee if we cancel a purchase order.

          In September 2005, QUALCOMM entered into a buyback arrangement with us whereby we delivered several hundred GSP-1600 phones and contracted to provide service to QUALCOMM's customers. Revenue recognized for equipment during 2005 under this arrangement was approximately $440,000 with a related cost of subscriber equipment of $314,000. Related service billings of $595,000 were recorded to deferred service revenue in September 2005. No revenue was recognized for equipment under this arrangement in the six months ended June 30, 2006. Revenue from service billings are recognized based on actual usage.

113


          Total purchases from affiliates are as follows:

 
    
   Successor
 
   Predecessor
 
   December 5 Through December 31, 2003
    
    
    
 
   January 1 Through December 4, 2003
   Year Ended December 31, 2004
   Year Ended December 31, 2005
   Six Months
Ended
June 30, 2006
 
    
   (In thousands)
QUALCOMM   $ 18,586   $ 1,425   $ 25,708   $ 49,310   $ 35,641
Space Systems/Loral     337     26     —     —     4,514
Loral     649     50     —     —     —
GCC(1)     2,479     —     —     —     —
Other affiliates     489     37     32     73     19
   
 
 
 
 
  Total(2)   $ 22,540   $ 1,538   $ 25,740   $ 49,383   $ 40,174
   
 
 
 
 
(1)
Represents Globalstar Canada purchases through May 5, 2003, the date of the Globalstar Canada acquisition.

(2)
All of these entities, except QUALCOMM, ceased to be considered affiliates as of April 2004.

          Total usage revenues from affiliates were $2.1 million, $0.2 million, $1.3 million, $1.2 million and $0.5 million for the Predecessor Period 2003, the Successor Period 2003, 2004, 2005, and the six months ended June 30, 2006, respectively. Total equipment revenue from affiliates was zero for 2003 and approximately $0.5 million, $4.2 million and $1.8 million for the years ended December 31, 2004, and 2005 and the six months ended June 30, 2006, respectively. Columbia Ventures Corporation owns 50% of Globalstar Australia PTY Limited, the independent gateway operator in Australia. In 2004, 2005 and the six months ended June 30, 2006, our sales of services and equipment to Globalstar Australia were $1.0 million, $5.0 million and $2.2 million, respectively. All of such sales were made on substantially the same terms as those applicable to other independent gateway operators.

114


DESCRIPTION OF CAPITAL STOCK

          As described under "Company History," until March 17, 2006, we operated as a Delaware limited liability company. As such the rights of our members were governed by the Delaware Limited Liability Company Act and the provisions of our limited liability company agreement which reflected various negotiations and agreements among Thermo, the creditors of Old Globalstar and others. The limited liability company agreement expressly permitted our conversion into a Delaware corporation provided that various provisions of the limited liability company agreement, including those dealing with election of directors, voting rights, preemptive rights and "tag along" rights, were incorporated into our certificate of incorporation. On March 17, 2006, we converted into a Delaware corporation. Our certificate of incorporation authorized the issuance of three series of common stock consisting of 300 million shares of Series A common stock, 20 million shares of Series B common stock and 480 million shares of Series C common stock. Each series of common stock had equivalent dividend and liquidation rights, but differing voting rights with respect to the election of directors, amendments to the certificate of incorporation and approval of certain transactions. Thermo held all of the Series C common stock, which entitled it to elect a majority of our directors. As required by our limited liability company agreement, our certificate of incorporation also restricted transfer of our common stock without approval of our board, granted all stockholders who were accredited investors pre-emptive rights to purchase shares of common stock if we issued additional shares of common stock, subject to certain exceptions, and entitled minority stockholders to participate in certain sales of a majority interest in our stock. The certificate also required that our stock be registered under the Exchange Act by October 13, 2006.

Amendment and Restatement of Certificate of Incorporation and Bylaws

          In October 2006, our stockholders adopted an amended and restated certificate of incorporation and amended and restated bylaws which will become effective immediately prior to this offering. Pursuant to our amended and restated certificate of incorporation:

Except where the text or context indicates otherwise, all descriptions of our capital stock in this prospectus reference the certificate of incorporation and bylaws as amended and restated. The following summary of the material terms and provisions of our capital stock after completion of the offering is qualified in its entirety by reference to the forms of our amended and restated certificate of incorporation and bylaws, copies of which have been filed as exhibits to the registration statement of which this prospectus is a part and which also may be obtained upon request. See "Where You Can Find Additional Information."

          We anticipate that upon the filing of our amended and restated certificate of incorporation and immediately prior to this offering, our board of directors will declare a stock dividend effecting a six-for-one split of our common stock.

115


Common Stock

          General.    We are authorized to issue 800 million shares of common stock, par value $0.0001 per share. All outstanding shares of common stock are, and all shares of common stock to be outstanding upon completion of the offering will be, fully-paid and nonassessable. As of September 1, 2006, we had 172 stockholders of record.

          Dividends.    Subject to preferences that may be granted to holders of any preferred stock and restrictions under our credit agreement, the holders of our common stock will be entitled to dividends as may be declared from time to time by the board of directors from funds available therefor. See "Dividend Policy and Restrictions."

          Voting Rights.    Each share of common stock entitles its holder to one vote on all matters to be voted on by the stockholders. Our certificate of incorporation does not provide for cumulative voting in the election of directors. Generally, all matters to be voted on by the stockholders must be approved by a majority or, in the case of the election of directors, by a plurality, of the votes present in person or by proxy and entitled to vote.

          Preemptive Rights.    Holders of common stock do not have preemptive rights with respect to the issuance and sale by the company of additional shares of common stock or other equity securities of the company.

          Liquidation Rights.    Upon dissolution, liquidation or winding-up, the holders of shares of common stock will be entitled to receive our assets available for distribution proportionate to their pro rata ownership of the outstanding shares of common stock.

Preferred Stock

          Our board of directors has the authority, without further action of our stockholders, to issue up to 100 million shares of preferred stock, par value $0.0001 per share, in one or more series, to determine the number of shares constituting and the designation of each series and to fix the powers, preferences, rights and qualifications, limitations or restrictions thereof, which may include dividend rights, conversion rights, voting rights, terms of redemption, and liquidation preferences. The issuance of preferred stock could adversely affect the holders of common stock. The potential issuance of preferred stock may discourage bids for shares of our common stock at a premium over the market price of our common stock, may adversely affect the market price of shares of our common stock and may discourage, delay or prevent a change of control.

          No shares of our preferred stock are outstanding. We have no current plans to issue any shares of preferred stock.

Anti-takeover Effects of Certain Provisions of Our Amended and Restated Certificate of Incorporation and Bylaws and of Delaware General Corporation Law

          The provisions of the Delaware General Corporation Law and our amended and restated certificate of incorporation and bylaws summarized below may have the effect of discouraging, delaying or preventing a hostile takeover, including one that might result in a premium being paid over the market price of our common stock, and discouraging, delaying or preventing changes in the control or management of our company.

116


          Following the completion of this offering, our certificate of incorporation and bylaws will provide that:

          The anti-takeover and other provisions of our certificate of incorporation and by-laws could discourage potential acquisition proposals and could delay or prevent a change in control. These provisions are intended to enhance the likelihood of continuity and stability in the composition of the board of directors and in the policies formulated by the board of directors and to discourage certain types of transactions that may involve an actual or threatened change of control. These provisions are designed to reduce our vulnerability to an unsolicited acquisition proposal. The provisions also are intended to discourage certain tactics that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers for our shares and, as a consequence, they also may inhibit fluctuations in the market price of our shares that could result from actual or rumored takeover attempts. Such provisions also may have the effect of preventing changes in our management.

          We will be subject to Section 203 of the Delaware General Corporation Law regulating corporate takeovers, which prohibits a Delaware corporation from engaging in any business combination with an "interested stockholder" for three years after the person becomes an interested stockholder unless:

117

          Except as otherwise specified in Section 203, an "interested stockholder" is defined to include (a) any person that is the owner of 15% or more of the outstanding voting securities of the corporation, or is an affiliate or associate of the corporation and was the owner of 15% or more of the outstanding voting stock of the corporation at any time within three years immediately prior to the date of determination and (b) the affiliates and associates of any such person. Thermo will not be an "interested stockholder" because it acquired more than 15% of our outstanding stock prior to the completion of this offering.

          For purposes of Section 203, the term "business combinations" includes mergers, consolidations, asset sales or other transactions that result in a financial benefit to the interested stockholder and transactions that would increase the interested stockholder's proportionate share ownership of our company.

          Under some circumstances, Section 203 makes it more difficult for an interested stockholder to effect various business combinations with us. Although our stockholders have the right to exclude us from the restrictions imposed by Section 203, they have not done so. Section 203 may encourage companies interested in acquiring us to negotiate in advance with the board of directors, because the requirement stated above regarding stockholder approval would be avoided if a majority of the directors approves, prior to the time the party became an interested stockholder, either the business combination or the transaction which results in the stockholder becoming an interested stockholder.

Listing

          We have applied to list our common stock on the NASDAQ Global Market under the trading symbol "GSAT".

Transfer Agent and Registrar

          Upon completion of this offering, the transfer agent and registrar for our common stock will be Computershare Investor Services LLC.

118


SHARES ELIGIBLE FOR FUTURE SALE

          Prior to this offering, there has not been any public market for our common stock, and we cannot predict what effect, if any, market sales of shares of common stock or the availability of shares of common stock for sale will have on the market price of our common stock. Sales of substantial amounts of common stock in the public market, or the perception that such sales could occur, could materially and adversely affect the market price of our common stock and could impair our future ability to raise capital through the sale of our equity or equity-related securities at a time and price that we deem appropriate.

          Upon the closing of this offering, we will have 69,375,494 shares of common stock outstanding, assuming no exercise of the underwriters' option to purchase additional shares. Of the outstanding shares, all of the shares sold in this offering, as well as 10,648,434 unrestricted shares already outstanding which were issued in the Reorganization and not held by our "affiliates," will be freely tradable without restriction or further registration under the Securities Act. Any shares owned by our "affiliates," as defined under Rule 144 of the Securities Act, may be sold only in compliance with the limitations of that Rule. The remaining 52,227,060 outstanding shares of common stock will be deemed "restricted securities" as that term is defined under Rule 144. Restricted securities may be sold in the public market only if registered or if they qualify for an exemption from registration under Rule 144, which is summarized below.

          Subject to the lock-up agreements described below and the volume limitations and other conditions under Rule 144, the 52,227,060 restricted shares described above will be available for sale in the public market under exemptions from registration requirements.

          Although none of our stockholders currently has any registration rights for their common stock, we may enter into registration rights arrangements in the future.

Rule 144

          In general, under Rule 144 as currently in effect, a person (or persons whose shares are required to be aggregated), including an affiliate, who has beneficially owned shares of our common stock for at least one year is entitled to sell in any three-month period a number of shares that does not exceed the greater of:

          Sales under Rule 144 are also subject to manner of sale provisions and notice requirements and to the availability of current public information about us.

Rule 144(k)

          In addition, a person who is not deemed to have been an affiliate of ours at any time during the 90 days preceding a sale and who has beneficially owned the shares proposed to be sold for at least two years is entitled to sell those shares under Rule 144(k) without regard to the manner of sale, public information, volume limitation or notice requirements of Rule 144. To the extent that our affiliates sell their shares, other than pursuant to Rule 144 or a registration statement, the purchaser's holding period for the purpose of effecting a sale under Rule 144 commences on the date of transfer from the affiliate. At September 1, 2006, 43,413,708 shares of our common stock are eligible for resale under Rule 144(k).

119


Lock-Up Agreements

          We, Thermo, QUALCOMM Incorporated and our directors and executive officers have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of our and their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the underwriters. Any of our other stockholders who agree to purchase shares in our subsequent pre-emptive rights offering will be subject to the same restrictions. In addition, Columbia Ventures Corporation and Loral Skynet Corporation have entered into similar agreements with respect to 70% of the shares beneficially owned by each of them. The underwriters have advised us that they have no current intent or arrangement to release any of the shares subject to the lock-up agreements prior to the expiration of the lock-up period. The underwriters do not have any pre-established conditions to waiving the terms of the lock-up agreements. Any determination to release any shares subject to the lock-up agreements would be based on a number of factors at the time of determination, including but not necessarily limited to the market price of the common stock, the liquidity of the trading market for the common stock, general market conditions, the number of shares proposed to be sold and the timing, purpose and terms of the proposed sale. There are no contractually specified conditions for the waiver of lock-up restrictions and any waiver is at the sole discretion of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. There are 49,935,206 shares of our common stock held by Thermo, Columbia Ventures Corporation, QUALCOMM Incorporated, Loral Skynet Corporation and our directors and executive officers subject to the lock-up agreements. Our remaining stockholders, who own approximately 20% of our common stock in the aggregate, are not subject to such restrictions and may sell their shares immediately after this offering.

          The 180-day restricted period described in the preceding paragraph will be extended if:

in which case the restrictions described in the preceding paragraph will continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the announcement of the material news or material event.

120


UNDERWRITING

          We and the underwriters named below have entered into an underwriting agreement with respect to the shares being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of shares indicated in the following table. Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. are acting as joint bookrunners and representatives of the underwriters.

Underwriters
   Number of
Shares
Wachovia Capital Markets, LLC    
J.P. Morgan Securities Inc.    
Jefferies & Company, Inc.    
   
  Total   6,500,000
   

          The underwriters are committed to take and pay for all of the shares being offered, if any are taken, other than the shares covered by the option described below unless and until this option is exercised.

          If the underwriters sell more shares than the total number set forth in the table above, the underwriters have an option to buy up to an additional 975,000 shares from us to cover such sales. They may exercise that option for 30 days. If any shares are purchased pursuant to this option, the underwriters will severally purchase shares in approximately the same proportion as set forth in the table above.

          The following table shows the per share and total underwriting discounts and commissions to be paid to the underwriters by us. Such amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase 975,000 additional shares.

Paid by Us
   No Exercise
   Full Exercise
Per Share   $     $  
Total   $     $  

          Shares sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any shares sold by the underwriters to securities dealers may be resold at a discount of up to $            per share from the initial public offering price. Any such securities dealers may resell any shares purchased from the underwriters to certain other brokers or dealers at a discount of up to $            per share from the initial public offering price. If all the shares are not sold at the initial public offering price, the representatives may change the offering price and the other selling terms.

          We, Thermo, QUALCOMM Incorporated and our directors and executive officers have agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of our and their common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the underwriters. Any of our other stockholders who agree to purchase shares in our subsequent pre-emptive rights offering will be subject to the same restrictions. In addition, Columbia Ventures Corporation and Loral Skynet Corporation have entered into similar agreements with respect to 70% of the shares beneficially owned by each of them. The underwriters have advised us that they have no current intent or arrangement to release any of the shares subject to the lock-up agreements prior to the expiration of the lock-up period. There are no contractually specified conditions for the waiver of lock-up restrictions and any waiver is at the sole discretion of the underwriters. Our other stockholders, who own approximately 20% of our common stock in the aggregate, are not subject to such restrictions and may sell their shares immediately after this offering.

121


          Prior to the offering, there has been no public market for the shares. The initial public offering price will be negotiated among us and the underwriters' representative. Among the factors to be considered in determining the initial public offering price of the shares, in addition to prevailing market conditions, will be the company's historical performance, estimates of the business potential and earnings prospects of the company, an assessment of the company's management and the consideration of the above factors in relation to market valuation of companies in related businesses.

          We have applied to list the common stock on the NASDAQ Global Market under the symbol "GSAT." In order to meet one of the requirements for listing the common stock on the NASDAQ Global Market, the underwriters have undertaken to sell lots of 100 or more shares to a minimum of 2,000 beneficial holders.

          In connection with the offering, the underwriters may purchase and sell shares of common stock in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of shares than they are required to purchase in the offering. "Covered" short sales are sales made in an amount not greater than the underwriters' option to purchase additional shares from the company in the offering. The underwriters may close out any covered short position by either exercising their option to purchase additional shares or purchasing shares in the open market. In determining the source of shares to close out the covered short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase additional shares pursuant to the option granted to them. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the common stock in the open market after pricing that could adversely affect investors who purchase in the offering. Stabilizing transactions consist of various bids for or purchases of common stock made by the underwriters in the open market prior to the completion of the offering.

          The underwriters may also impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased shares sold by or for the account of such underwriter in stabilizing or short covering transactions.

          Purchases to cover a short position and stabilizing transactions may have the effect of preventing or retarding a decline in the market price of the company's stock and, together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the common stock. As a result, the price of the common stock may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the NASDAQ Global Market, in the over-the-counter market or otherwise.

          The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of shares offered.

          We estimate that our share of the total expenses of the offering, excluding underwriting discounts and commissions, will be approximately $2.8 million.

          We have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the Securities Act of 1933.

          Certain of the underwriters and their respective affiliates have, from time to time, performed, and may in the future perform, various financial advisory and investment banking services for us, for which they received or will receive customary fees and expenses. Wachovia Investment Holdings, LLC, is a lender and the administrative agent under our credit agreement. Affiliates of J.P. Morgan Securities Inc. and Jefferies & Company, Inc. are lenders under our credit agreement.

122


LEGAL MATTERS

          The validity of the issuance of the shares of common stock to be sold in this offering will be passed upon for us by Taft, Stettinius & Hollister LLP, Cincinnati, Ohio. Certain other legal matters will be passed upon for the underwriters by Simpson Thacher & Bartlett LLP, New York, New York.


EXPERTS

          The financial statements of Globalstar, Inc. as of and for the year ended December 31, 2005 included elsewhere in this prospectus have been audited by Crowe Chizek and Company LLP, independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon its authority as experts in accounting and auditing.

          The audited consolidated financial statements of Globalstar, Inc. (formerly known as Globalstar LLC) and subsidiaries (Successor Company) as of December 31, 2004, for the year then ended and for the period from December 5, 2003 to December 31, 2003, and the consolidated financial statements of Globalstar, L.P. and subsidiaries (Predecessor Company) for the period January 1, 2003 to December 4, 2003 included in this prospectus have been audited by GHP Horwath, P.C., an independent registered public accounting firm, for the periods and to the extent set forth in their report appearing in this prospectus. Their report describes that the consolidated financial statements of the Successor Company are presented on a different basis from those of the Predecessor Company and, therefore, are not comparable in all respects, and describes that the Predecessor Company's plan of reorganization was confirmed in 2004 and the Predecessor Company was dissolved. Such financial statements have been so included in reliance upon the report of such firm given upon the firm's authority as an expert in auditing and accounting.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURES

          On February 23, 2006, we engaged Crowe Chizek and Company LLP to serve as our independent registered public accountants in lieu of GHP Horwath, P.C., who had previously served in that capacity. We initiated this change with the approval of our board of directors.

          The report of GHP Horwath on our financial statements for the fiscal year ended December 31, 2004 contained no adverse opinion or disclaimer of opinion and was not qualified or modified as to any uncertainty, audit scope or accounting principles. During our two most recent fiscal years and any subsequent interim period preceding this change in accountants there were no disagreements with GHP Horwath on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of GHP Horwath, would have caused it to make reference to the subject matter of the disagreement in connection with its report on the financial statements for such periods.

          During 2004 and 2005 and through February 22, 2006, there were no reportable events as defined in Regulation S-K, Item 304(a)(1)(v).

          During 2004 and 2005 and through February 22, 2006, we did not consult with Crowe Chizek with respect to the application of accounting principles to a specified transaction, either contemplated or proposed, or the type of audit opinion that might be rendered on our financial statements, or any matter that was either the subject of a disagreement or a reportable event.


WHERE YOU CAN FIND ADDITIONAL INFORMATION

          We have filed with the SEC a registration statement on Form S-1 under the Securities Act with respect to the issuance of shares of our common stock being offered. This prospectus, which forms a part of the registration statement, does not contain all of the information set forth in the registration

123


statement. For further information with respect to us and the shares of our common stock, you should refer to the registration statement and its exhibits. Statements contained in this prospectus as to the contents of any contract, agreement or other document are not necessarily complete and you should refer to the exhibits attached to the registration statement for copies of the actual contract, agreement or other document.

          Upon the closing of the offering, we will be subject to the informational requirements of the Exchange Act and will file annual, quarterly and current reports, proxy statements and other information with the SEC. You can read our SEC filings, including the registration statement, over the internet at the SEC's website at www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.

          You may obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operations of the public reference facilities.

124


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 
   Page
Audited and unaudited consolidated financial statements of Globalstar, Inc.    

Report of Crowe Chizek and Company LLP, independent registered public accounting firm
 
F-2

Report of GHP Horwath, P.C., independent registered public accounting firm
 
F-3

Consolidated balance sheets at December 31, 2004 and 2005 (audited) and June 30, 2006 (unaudited)
 
F-4

Consolidated statements of operations for the periods from January 1, 2003 through December 4, 2003 and December 5, 2003 through December 31, 2003 (audited), the years ended December 31, 2004 and 2005 (audited) and the six months ended June 30, 2005 and 2006 (unaudited)
 
F-5

Consolidated statements of comprehensive income (loss) for the periods from January 1, 2003 through December 4, 2003 and December 5, 2003 through December 31, 2003 (audited), the years ended December 31, 2004 and 2005 (audited) and the six months ended June 30, 2005 and 2006 (unaudited)
 
F-6

Consolidated statements of ownership equity (deficit) for the periods from January 1, 2003 through December 4, 2003 and December 5, 2003 through December 31, 2003 (audited), the years ended December 31, 2004 and 2005 (audited) and the six months ended June 30, 2006 (unaudited)
 
F-7

Consolidated statements of cash flows for the periods from January 1, 2003 through December 4, 2003 and December 5, 2003 through December 31, 2003 (audited), the years ended December 31, 2004 and 2005 (audited) and the six months ended June 30, 2005 and 2006 (unaudited)
 
F-9

Notes to consolidated financial statements
 
F-11

F-1

          The accompanying consolidated financial statements of Globalstar, Inc. have been adjusted as of December 5, 2003 to give effect to a six-for-one stock split of the common stock which is to be effected in connection with the Company's planned initial public offering. The following opinion is in the form which will be signed by Crowe Chizek and Company LLP upon consummation of such stock split, which is described in Note 19 to the accompanying consolidated financial statements and assuming that, from May 15, 2006 to the date of such stock split, no other events have occurred that would affect the accompanying consolidated financial statements or notes thereto.

/s/ CROWE CHIZEK AND COMPANY LLP


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Globalstar, Inc.

          We have audited the accompanying consolidated balance sheet of Globalstar, Inc. as of December 31, 2005 and the related consolidated statements of operations, comprehensive income (loss), ownership equity (deficit), and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

          We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

          In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Globalstar, Inc. as of December 31, 2005 and the results of its operations and its cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America.

Oak Brook, Illinois
May 15, 2006, except for Note 19
which is as of                        

F-2

          The accompanying consolidated financial statements of Globalstar, Inc. have been adjusted as of December 5, 2003 to give effect to a six-for-one stock split of the common stock which is to be effected in connection with the Company's planned initial public offering. The following opinion is in the form which will be signed by GHP Horwath, P.C. upon consummation of such stock split, which is described in Note 19 to the accompanying consolidated financial statements and assuming that, from April 13, 2005 to the date of such stock split, no other events have occurred that would affect the accompanying consolidated financial statements or notes thereto.

/s/ GHP HORWARTH, P.C.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors
Globalstar, Inc.

          We have audited the accompanying consolidated balance sheet of Globalstar, Inc. (formerly known as Globalstar LLC) and subsidiaries (Successor Company) (Note 1) as of December 31, 2004 and the related consolidated statements of operations, comprehensive income (loss), ownership equity (deficit) and cash flows for the year ended December 31, 2004 and the period December 5, 2003 to December 31, 2003 (Successor Company Period); and we have audited the consolidated statements of operations, comprehensive income (loss), ownership equity (deficit) and cash flows of Globalstar, L.P. and subsidiaries (Predecessor Company) (Note 1) for the period January 1, 2003 to December 4, 2003 (Predecessor Company Period). These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

          We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

          In our opinion, the aforementioned consolidated financial statements present fairly, in all material respects, the financial position of Globalstar, Inc. and its subsidiaries as of December 31, 2004 and the results of their operations and their cash flows for the year ended December 31, 2004 and the Successor Company Period and the results of operations and cash flows of Globalstar, L.P. and its subsidiaries for the Predecessor Company Period in conformity with accounting principles generally accepted in the United States of America.

          As discussed in Note 1 to the consolidated financial statements, on December 5, 2003, the Predecessor Company was effectively acquired through a series of transactions. The consolidated financial statements of the Successor Company reflect the impact of adjustments to present the fair values of assets acquired and liabilities assumed under the purchase method of accounting. As a result, the consolidated financial statements of the Successor Company are presented on a different basis from those of the Predecessor Company and, therefore, are not comparable in all respects.

          As also discussed in Note 1 to the consolidated financial statements, the Predecessor Company previously filed for reorganization under Chapter 11 of the Federal Bankruptcy Code and in June 2004 the Predecessor Company's plan of reorganization under Chapter 11 was confirmed. Under the Plan, the remaining debt of the Predecessor Company was discharged and the Predecessor Company was dissolved.

Denver, Colorado
April 13, 2005, except for Note 12 as to which the date is May 12, 2006
and Note 19 as to which the date is                        

F-3


GLOBALSTAR, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 
   Successor
  
 
   December 31,
2004
   December 31,
2005
   June 30,
2006
  
 
    
    
   (Unaudited)

  
ASSETS                    

Current assets:
 
 
 
 
 
 
 
 
 
 
  Cash and cash equivalents   $ 13,330   $ 20,270   $ 21,074  
  Accounts receivable, net of allowance of $1,187 (2004), $1,774 (2005), and $2,270 (2006)     9,314     21,652     23,392  
  Inventory     7,687     17,620     26,319  
  Advances for inventory     8,826     13,516     18,724  
  Subscription receivable     4,235     13,000     —  
  Deferred tax assets     —     2,398     1,832  
  Prepaid expenses and other current assets     1,687     1,750     2,138  
   
 
 
 
    Total current assets     45,079     90,206     93,479  
   
 
 
 
Property and equipment:                    
  Globalstar System, net     8,583     10,717     18,536  
  Spare satellites and launch costs     946     3,012     53,035  
  Other property and equipment, net     3,251     7,531     7,430  
   
 
 
 
      12,780     21,260     79,001  
   
 
 
 

Other assets:
 
 
 
 
 
 
 
 
 
 
  Gateway receivables, net of allowance of $10,784 (2004), $10,784 (2005), and $4,944 (2006)     1,000     1,000     —  
  Deferred tax assets     4,777     —     19,050  
  Other assets, net     261     1,079     4,702  
   
 
 
 
    Total assets   $ 63,897   $ 113,545   $ 196,232  
   
 
 
 
 
LIABILITIES AND OWNERSHIP EQUITY
 
 
 
 
 
 
 
 
 
 
Current liabilities:                    
  Notes payable, current portion   $ 1,093   $ 293   $ 866  
  Accounts payable     1,419     4,193     16,619  
  Accrued expenses     8,056     11,484     16,316  
  Payables to affiliates     1,316     2,959     7,224  
  Deferred revenue     4,295     17,212     21,793  
   
 
 
 
    Total current liabilities     16,179     36,141     62,818  
   
 
 
 

Borrowings under revolving credit facility
 
 
—
 
 
—
 
 
15,000
 
Notes payable, net of current portion     3,278     631     504  
Employee benefit obligations     4,019     2,997     3,062  
Other non-current liabilities     —     2,346     450  
   
 
 
 
    Total non-current liabilities     7,297     5,974     19,016  
   
 
 
 

Redeemable Series A common stock; 91,986 shares issued and outstanding at June 30, 2006
 
 
—
 
 
—
 
 
5,198
 

Ownership equity:
 
 
 
 
 
 
 
 
 
 
  Common stock, Series A, $0.0001 par value; 300,000,000 shares authorized, 19,369,800 shares issued and outstanding at June 30, 2006     —     —     2  
  Common stock, Series B, $0.0001 par value; 20,000,000 shares authorized, 4,154,400 shares issued and outstanding at June 30, 2006     —     —     —  
  Common stock, Series C, $0.0001 par value; 480,000,000 shares authorized, 39,259,308 shares issued and outstanding at June 30, 2006     —     —     4  
  Additional paid-in capital     —     —     87,694  
  Member interests     54,487     73,314     —  
  Subscription receivable     (13,000 )   —     —  
  Accumulated other comprehensive loss     (1,066 )   (1,884 )   (152 )
  Retained earnings     —     —     21,652  
   
 
 
 
    Total ownership equity     40,421     71,430     109,200  
   
 
 
 
     
Total liabilities and ownership equity
 
$
63,897
 
$
113,545
 
$
196,232
 
   
 
 
 

See notes to consolidated financial statements.

F-4


GLOBALSTAR, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share data)

 
   Predecessor
   Successor
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
  
 
    
    
    
    
   (Unaudited)

  
Revenue:                                      
  Service revenue   $ 40,048   $ 2,387   $ 57,927   $ 81,472   $ 34,965   $ 42,202  
  Subscriber equipment sales     16,295     1,470     26,441     45,675     15,360     26,539  
   
 
 
 
 
 
 
    Total revenue     56,343     3,857     84,368     127,147     50,325     68,741  
   
 
 
 
 
 
 
Operating expenses:                                      
  Cost of services (exclusive of depreciation and amortization shown separately below)     26,629     1,931     25,208     25,432     13,780     13,888  
  Cost of subscriber equipment sales     12,881     635     23,399     38,742     12,216     25,769  
  Marketing, general, and administrative     28,814     4,950     32,151     37,945     16,626     20,691  
  Restructuring     5,381     690     5,078     —     —     —  
  Depreciation and amortization     31,473     125     1,959     3,044     1,240     2,698  
  Impairment of assets     211,854     —     114     114     39     —  
   
 
 
 
 
 
 
    Total operating expenses     317,032     8,331     87,909     105,277     43,901     63,046  
   
 
 
 
 
 
 
Operating income (loss)     (260,689 )   (4,474 )   (3,541 )   21,870     6,424     5,695  
   
 
 
 
 
 
 
Other income (expense):                                      
  Interest income     7     7     58     242     62     366  
  Interest expense     (1,513 )   (131 )   (1,382 )   (269 )   (194 )   (108 )
  Other     485     44     921     (622 )   (538 )   (1,760 )
   
 
 
 
 
 
 
    Total other income (expense)     (1,021 )   (80 )   (403 )   (649 )   (670 )   (1,502 )
   
 
 
 
 
 
 
Income (loss) before income taxes     (261,710 )   (4,554 )   (3,944 )   21,221     5,754     4,193  
Income tax expense (benefit)     170     (37 )   (4,314 )   2,502     2,898     (17,459 )
   
 
 
 
 
 
 
Net income (loss)   $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
   
 
 
 
 
 
 
Earnings (loss) per common share:                                      
  Basic     N/A   $ (0.08 ) $ 0.01   $ 0.30   $ 0.05   $ 0.35  
  Diluted     N/A     (0.08 )   0.01     0.30     0.05     0.35  
Weighted-average shares outstanding:                                      
  Basic     N/A     60,000,000     60,463,917     61,855,668     61,855,668     61,957,906  
  Diluted     N/A     60,000,000     60,463,917     61,955,874     61,955,874     62,287,618  
Pro forma C Corporation data (unaudited):                                      
  Historical income before income taxes     N/A     N/A     N/A   $ 21,221   $ 5,754     N/A  
  Pro forma income tax expense     N/A     N/A     N/A     6,931     3,656     N/A  
                     
 
       
  Pro forma net income     N/A     N/A     N/A   $ 14,290   $ 2,098     N/A  
                     
 
       
  Pro forma earnings per common share:                                      
    Basic     N/A     N/A     N/A   $ 0.23   $ 0.03     N/A  
    Diluted     N/A     N/A     N/A     0.23     0.03     N/A  

F-5


GLOBALSTAR, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

 
   Predecessor
   Successor
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
 
    
    
    
    
   (Unaudited)
Net income (loss)   $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652
Other comprehensive income (loss):                                    
  Minimum pension liability adjustment     —     —     (1,234 )   (1,356 )   (678 )   —
  Net foreign currency translation adjustment     —     —     168     538     (266 )   1,732
   
 
 
 
 
 
      Total comprehensive income (loss)   $ (261,880 ) $ (4,517 ) $ (696 ) $ 17,901   $ 1,912   $ 23,384
   
 
 
 
 
 

See notes to consolidated financial statements.

F-6


GLOBALSTAR, INC.

CONSOLIDATED STATEMENTS OF OWNERSHIP EQUITY (DEFICIT)

(In thousands, except share data)

 
   Successor
   Predecessor
    
  
 
   Member
Interest
Units
Common
Shares
   Common Stock
Amount
   Additional
Paid-In
Capital
   Member
Interests
Amount
   Subscription
Receivable
   Accumulated
Other
Compre-
hensive
Loss
   Retained
Earnings
   Partners'
Deficit
   Total
  
Predecessor:                                                
Balances—January 1, 2003                                     $ (3,150,598 ) $ (3,150,598 )
Net loss—period from January 1, 2003 through December 4, 2003                                       (261,880 )   (261,880 )
                                     
 
 
Balances—December 4, 2003                                     $ (3,412,478 ) $ (3,412,478 )
                                     
 
 
Successor:                                                
Beginning Old Globalstar balances—December 5, 2003               $ —   $ —   $ —       $ (3,412,478 ) $ (3,412,478 )
Contribution of certain Old Globalstar net assets to New Globalstar   51,000,000             9,900     —     —         (9,900 )   —  
Initial cash contribution—December 5, 2003   9,000,000             1,800     —     —         —     1,800  
Net loss—period from December 5, 2003 through December 31, 2003                 (3,716 )   —     —         (801 )   (4,517 )
   
         
 
 
     
 
 
Balances—December 31, 2003   60,000,000             7,984     —     —         (3,423,179 )   (3,415,195 )
   
                                           
Member Interests Series A—18,441,960                                                
Member Interests Series B—2,298,732                                                
Member Interests Series C—39,259,308                                                
Conversion of liabilities subject to compromise to New Globalstar member interests, including New Globalstar's assumption of liabilities of $1,416                 (1,416 )   —     —         3,423,179     3,421,763  
Member interests issued in exchange for:                                                
  Cash                 7,000     —     —         —     7,000  
  Term loans, related party                 17,950     —     —         —     17,950  
  Inventory (issuance of Series B member interests)   1,855,668             5,325     —     —         —     5,325  
  Subscription receivable, including $4,235 received in April 2005                 17,235     (13,000 )   —         —     4,235  

Series A and B rights offering:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Member interests issued to current members in exchange for cash                 8,749     —     —         —     8,749  
  Member interests redeemed from Thermo in exchange for cash                 (8,749 )   —     —         —     (8,749 )
Contribution of services                 39     —     —         —     39  
Other comprehensive loss                 —     —     (1,066 )       —     (1,066 )
Net income                 370     —     —         —     370  
   
         
 
 
     
 
 
Balances—December 31, 2004   61,855,668             54,487     (13,000 )   (1,066 )       —     40,421  
   
                                           
Member Interests Series A—18,441,960                                                
Member Interests Series B—4,154,400                                                
Member Interests Series C—39,259,308                                                

F-7

GLOBALSTAR, INC.
CONSOLIDATED STATEMENTS OF OWNERSHIP EQUITY (DEFICIT) (Continued)
(In thousands, except share data)

 
   Successor
   Predecessor
    
  
 
   Member
Interest
Units
Common
Shares
   Common Stock
Amount
   Additional
Paid-In
Capital
   Member
Interests
Amount
   Subscription
Receivable
   Accumulated
Other
Compre-
hensive
Loss
   Retained
Earnings
   Partners'
Deficit
   Total
  
Contribution of services                   $ 145   $ —   $ —         $ —   $ 145  
Redemption of minority interests                     (100 )   —     —           —     (100 )
Contributions                     63     —     —           —     63  
Reclassification of subscription receivable (received in March 2006)                     —     13,000     —           —     13,000  
Other comprehensive loss                     —     —     (818 )         —     (818 )
Net income                     18,719     —     —           —     18,719  
   
             
 
 
       
 
 
Balances—December 31, 2005   61,855,668                 73,314     —     (1,884 )         —     71,430  
   
                                                 
Member interests Series A—18,441,960                                                      
Member interests Series B—4,154,400                                                      
Member interests Series C—39,259,308                                                      
Recapitalization (unaudited)       $ 6   $ 73,308     (73,314 )   —     —   $ —     —     —  
Distribution payable to member (unaudited)         —     (686 )   —     —     —     —     —     (686 )
Contribution of services (unaudited)         —     72     —     —     —     —     —     72  
Issuance of common stock in connection with Thermo agreement (unaudited)   927,840           15,000     —     —     —     —     —     15,000  
Other comprehensive income (loss) (unaudited)         —     —     —     —     1,732     —     —     1,732  
Net income (unaudited)         —     —     —     —     —     21,652     —     21,652  
   
 
 
 
 
 
 
 
 
 
Balances—June 30, 2006 (unaudited)   62,783,508   $ 6   $ 87,694   $ —   $ —   $ (152 ) $ 21,652   $ —   $ 109,200  
   
 
 
 
 
 
 
 
 
 
  Conversion of membership interests into common stock:                                                      
Member Interests Series A   (18,533,946 )                                                
   
                                                 
Member Interests Series B   (4,154,400 )                                                
   
                                                 
Member Interests Series C   (39,259,308 )                                                
   
                                                 
Common Stock Series A   18,533,946                                                  
   
                                                 
Common Stock Series B   4,154,400                                                  
   
                                                 
Common Stock Series C   39,259,308                                                  
   
                                                 

See notes to consolidated financial statements.

F-8


GLOBALSTAR, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

 
   Predecessor
   Successor
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
  
 
    
    
    
    
   (Unaudited)

  
Cash flows from operating activities:                                      
  Net income (loss)   $ (261,880 ) $ (4,517 ) $ 370   $ 18,719   $ 2,856   $ 21,652  
  Adjustments to reconcile net income (loss) to net cash from operating activities:                                      
  Deferred income taxes     —     —     (4,777 )   2,422     2,547     (18,500 )
  Depreciation and amortization     31,473     125     1,959     3,044     1,240     2,698  
  Disposal of fixed assets     21     —     —     —           1  
  Provision for gateway receivables     (104 )   —     (71 )   —     —     —  
  Provision for bad debts     492     46     859     998     297     662  
  Contribution of services     —     —     39     145     72     72  
  Impairment of assets     214,360     —     114     114     39     —  
  Other non-cash gains     —     —     —     (100 )   —     —  
  Changes in operating assets and liabilities, net of acquisitions:                                      
    Accounts receivable     (3,231 )   (602 )   (5,637 )   (15,915 )   (3,791 )   (1,248 )
    Inventory     (3,021 )   293     3,187     (9,634 )   (6,033 )   (7,841 )
    Advances for inventory     (2,875 )   469     (5,401 )   (4,688 )   (7,096 )   (5,504 )
    Prepaid expenses and other current assets     3,714     349     676     (32 )   (1,030 )   (326 )
    Other assets     211     68     (14 )   (293 )   17     (467 )
    Receivables from affiliates     —     —     —     —     (538 )   —  
    Accounts payable     690     (93 )   (1,340 )   3,044     (80 )   603  
    Payables to affiliates     1,760     213     374     1,643     9,741     3,988  
    Accrued expenses and employee benefit obligations     (410 )   2,543     2,417     2,088     (1,053 )   4,869  
    Other non-current liabilities     —     —     —     1,896     1,298     (2,093 )
    Deferred revenue     (1,244 )   778     2,396     10,243     2,897     4,664  
   
 
 
 
 
 
 
      Net cash from operating activities     (20,044 )   (328 )   (4,849 )   13,694     1,383     3,230  
   
 
 
 
 
 
 
Cash flows from investing activities:                                      
  Spare satellites and launch costs     —     —     (88 )   (2,066 )   (60 )   (38,730 )
  Cash receipts for production gateways and user terminals     2,207     —     —     —     —     —  
  Property and equipment additions     (1,058 )   (10 )   (3,927 )   (7,819 )   (2,680 )   (3,750 )
  Proceeds from sale of property and equipment     —     —     —     86     —     —  
  Payment for business acquisitions     (212 )   —     —     (342 )   (442 )   (191 )
   
 
 
 
 
 
 
      Net cash from investing activities     937     (10 )   (4,015 )   (10,141 )   (3,182 )   (42,671 )
   
 
 
 
 
 
 
Cash flows from financing activities:                                      
  Proceeds from term loans     30,914     1,622     5,000     —     —     —  
  Borrowings under revolving credit
facility		     —     —     —     —     —     15,000  
  Repayment of term loans     (10,149 )   —     (10,000 )   —     —     —  
  Proceeds from subscription receivable     —     —     —     4,235     4,235     13,000  
  Principal payments on notes payable     —     —     —     (1,251 )   —     —  
  Deferred transaction cost payments     —     —     —     (48 )   —     (2,881 )
  Redemption of member interests     —     —     (8,749 )   (100 )   (100 )   —  
  Proceeds related to Series A and B rights offering     —     —     8,749     —     —     —  
  Proceeds from issuance of membership interests     —     1,800     7,000     63     11     —  
  Proceeds from issuance of Series A common stock     —     —     —     —     —     15,000  
   
 
 
 
 
 
 
      Net cash from financing activities     20,765     3,422     2,000     2,899     4,146     40,119  
   
 
 
 
 
 
 

F-9

 
   Predecessor
   Successor
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
 
    
    
    
    
   (Unaudited)
Effect of exchange rate changes on cash   $ —   $ —   $ 168   $ 488   $ 244   $ 126
   
 
 
 
 
 
Net increase (decrease) in cash and cash equivalents     1,658     3,084     (6,696 )   6,940     2,591     804
Cash and cash equivalents, beginning of period     15,284     16,942     20,026     13,330     13,330     20,270
   
 
 
 
 
 
Cash and cash equivalents, end of period   $ 16,942   $ 20,026   $ 13,330   $ 20,270   $ 15,921   $ 21,074
   
 
 
 
 
 
Supplemental disclosure of cash flow information:                                    
  Cash paid for:                                    
    Interest   $ 149         $ 710   $ 289   $ 147   $ 16
   
       
 
 
 
    Income taxes               $ 207   $ 184   $ 178   $ 58
               
 
 
 
Supplemental disclosure of noncash financing and investing activities:                                    
  Noncash transactions:                                    
    Fair value of assets acquired   $ 8,124                              
    Cash paid     (376 )                            
   
                             
    Liabilities assumed   $ 7,748                              
   
                             
  Receivables offset by accounts payable and notes payable   $ 1,806   $ 92   $ 1,932   $ 2,675            
   
 
 
 
           
  Reduction in liabilities subject to compromise upon settlements with Loral Space Communications, Ltd and Elsacom SpA   $ 3,954                              
   
                             
  Terms loans converted to member interests               $ 17,950                  
               
                 
  Inventory acquired in exchange for member interests               $ 5,325                  
               
                 
  Reclassification of subscription receivable               $ 4,235   $ 13,000            
               
 
           
  Dissolvement of predecessor company:                                    
    Conversion of liability subject to compromise to New Globalstar Member Interests               $ 3,423,179                  
    Assumption of liabilities                 (1,416 )                
               
                 
                $ 3,421,763                  
               
                 
  Accrued launch costs                                 $ 11,293
                                 
  Distribution payable to member                                 $ 686
                                 
  Issuance of Series A redeemable common stock in conjunction with acquisition                                 $ 5,198
                                 

F-10


GLOBALSTAR, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.    ORGANIZATION AND BASIS OF ACCOUNTING

        Globalstar, Inc. (Note 17) ("Globalstar" or "Globalstar LLC" or "New Globalstar" or the "Company") was initially formed in November 2003 as New Operating Globalstar LLC, a Delaware limited liability company, for the purpose of acquiring substantially all the assets of Globalstar, L.P. ("Old Globalstar") and its subsidiaries in a Chapter 11 bankruptcy proceeding. Globalstar acquired the Old Globalstar assets and assumed certain liabilities pursuant to an Asset Contribution Agreement among Thermo Capital Partners, L.L.C. and its affiliates (collectively referred to as "Thermo"), New Globalstar, Old Globalstar and Old Globalstar's unsecured creditors. The asset acquisition (the "Thermo Transaction") was accomplished in a two stage closing process. The total value of the Thermo Transaction was $52.9 million, which consisted of Thermo's investment of $43.0 million for an 81.25% ownership of New Globalstar and the exchange of an 18.75% interest in New Globalstar for the net assets of Old Globalstar valued at $9.9 million. The first stage was completed on December 5, 2003 pursuant to an order of the bankruptcy court dated December 2, 2003. The first stage included:

          The second stage was completed on April 14, 2004. The second stage included:

          Following the closing of the Thermo Transaction, the Company was directly and indirectly owned 81.25% by Thermo and 18.75% by Old Globalstar. Thermo's 81.25% ownership interest is represented by its $43.0 million commitment. At the completion of the second stage, Thermo had invested approximately $18.8 million and had a remaining commitment of $24.2 million. Thermo invested an additional $7.0 million through equity contributions in 2004, an additional $4.2 million in April 2005, and the remaining $13.0 million was invested by Thermo in March 2006. At December 31, 2004, the $4.2 million received in April 2005 was classified as a current asset, subscription receivable. At December 31, 2005, the $13.0 million received in March 2006 was classified as a current asset, subscription receivable.

          Thermo is a private equity firm, headquartered in Denver, Colorado, with investments in the telecommunications, industrial distribution, real estate and energy sectors.

F-11


          Old Globalstar's First Modified Fourth Amended Joint Plan under Chapter 11 of the Bankruptcy Code (the "Plan") became effective on June 29, 2004. Pursuant to this Plan, Old Globalstar was dissolved and its 18.75% minority ownership share (represented by 11,250,000 membership interest units) in New Globalstar was distributed to its unsecured creditors (represented by the approximately $3.4 billion of "liabilities subject to compromise"), including the founders of Old Globalstar, Loral Space and Communications, Ltd. ("Loral") and QUALCOMM Incorporated ("QUALCOMM").

          Under Old Globalstar's Plan, the holders of allowed claims were provided the right to purchase membership units in New Globalstar from Thermo in a rights offering which was completed on October 12, 2004. The rights offering was divided into two series. The Series A rights allowed holders to purchase an aggregate 15.12% membership interest in New Globalstar for $8.0 million. The Series B rights allowed holders to purchase an aggregate 2.5% membership interest in New Globalstar for $4.0 million. The Series A rights offering was fully subscribed, resulting in the issuance of 9,072,000 membership interest units to unsecured creditors of Old Globalstar at a price of $8.0 million. The Series B rights offering was partially subscribed, resulting in the issuance of an additional 280,692 membership interest units at a price of $749,000. In accordance with the Plan, the Company redeemed an equal number of units held by Thermo in exchange for a payment of $8,749,000.

          In April 2004, the Company agreed to purchase 22,500 mobile phones from QUALCOMM. Effective October 2004, the Company and QUALCOMM restated the terms of this transaction so that QUALCOMM provided the 22,500 mobile phones and various accessories to Globalstar in exchange for $1,875,000 and 1,855,668 membership interest units in Globalstar with a fair value of $5.3 million.

          In April 2004, certain management employees of the Company, as an incentive, were given the right to purchase up to 360,000 membership units directly from Thermo at a price equivalent to Thermo's April 2004 investment. As of January 2005, a total of 138,000 units had been purchased from Thermo and transferred to such employees. The remaining rights expired at that time. The intrinsic value of these rights was zero. The fair value of these rights using the minimum value method (risk free interest of 1.5%, expected life of nine months, no expected dividends, and zero volatility) was not significant.

          After the above transactions and the 2004 Thermo equity transactions, Globalstar's membership interests at December 31, 2004 and 2005 were as follows:

 
   Membership Interest Units as of December 31, 2004
   %
   Membership Interest Units as of December 31, 2005
   %
  
Thermo   39,397,308   63.69 % 39,259,308   63.47 %
Qualcomm   4,154,400   6.72 % 4,154,400   6.72 %
Others   18,303,960   29.59 % 18,441,960   29.81 %
   
 
 
 
 
Total   61,855,668   100.00 % 61,855,668   100.00 %
   
 
 
 
 

          Management has determined that operational control of the Globalstar business passed to New Globalstar with the completion of the first stage of the Thermo Transaction on December 5, 2003. Accordingly, Old Globalstar's results of operations and cash flows prior to December 5, 2003 are presented as the "Predecessor" or "Predecessor Period." The results of operations, financial position and cash flows

F-12


of New Globalstar and Globalstar, L.P. thereafter are collectively presented as the "Successor," and periods after December 5, 2003 are referred to as "Successor Period(s)." The Thermo Transaction has been accounted for using the purchase method of accounting.

          The following summarizes the assets acquired, liabilities assumed and the allocation of the acquisition cost (in thousands):

 
   December 5, 2003
Current assets   $ 35,986
Other assets     12,257
   
  Total assets     48,243
   
Current liabilities     32,100
Long term liabilities     6,243
   
  Total liabilities     38,343
   
  Net assets acquired   $ 9,900
   

New Globalstar

          The New Globalstar operating agreement provides that the term of the Company shall continue until the sale of substantially all of the Company's assets or certain other defined events. Each member's liability is limited to its contributions. Generally net profits, net losses and distributions are allocated to members in proportion to their respective membership interests.

          As of December 31, 2005, Globalstar's operating subsidiaries included Globalstar USA, LLC, Globalstar Canada Satellite Co., Globalstar Europe Satellite Services, Ltd, and Globalstar de Venezuela, which provide satellite services in the United States, Canada, Europe, and South America, respectively. In addition, the Company and its subsidiaries own and operate the Globalstar System including satellites and gateways (Note 3).

Old Globalstar

          Old Globalstar was a limited partnership, formed in Delaware in November 1993. General partners were jointly and severally liable for the recourse debt and other recourse obligations of Old Globalstar to the extent Old Globalstar was unable to pay such debts. Limited partners' liability was limited to their contributions.

F-13


          The following table summarizes the partnership deficit of Old Globalstar:

 
   Predecessor December 4, 2003
   Successor December 31, 2003
  
 
   (In thousands)

  
Redeemable Preferred Partnership Interests (RPPI):              
  8% Series A (4,356,295 outstanding at December 4 and 31, 2003, each unit convertible into .53085 ordinary partnership interests)   $ —   $ —  
  9% Series B (389,500 outstanding at December 4 and 31, 2003; each unit convertible into .47562 ordinary partnership interests)     —     —  
Ordinary general partnership interests (4,910,604 interests outstanding at December 4 and 31, 2003)     (3,376,073 )   (3,386,774 )
Ordinary limited partnership interests (19,937,500 interests outstanding at December 4 and 31, 2003)     (239,740 )   (239,740 )
Warrants     203,335     203,335  
   
 
 
    $ (3,412,478 ) $ (3,423,179 )
   
 
 

          During the year ended December 31, 2003, no 8% or 9% RPPIs were converted to ordinary partnership interests. As described in Note 2, effective June 29, 2004, all partnership interests in Old Globalstar were cancelled without consideration.

          Officers and employees of Old Globalstar were eligible to participate in the Company's general partner's 1994 Stock Option Plan. No options were granted and no compensation expense was recorded during the years ended December 31, 2003 and 2004. At December 31, 2003, there were 5,408,567 options outstanding.

          Prior to 2003, Old Globalstar issued warrants in connection with the issuance of certain senior notes, service provider arrangements, and Globalstar construction contracts. These warrants were recorded at fair value at the date of issuance. No warrants were issued during the years ended December 31, 2003 or 2004.

          In connection with the Plan, the outstanding stock options and warrants were effectively cancelled and there are no remaining contingent equity issuances with regard to Old Globalstar. Pro forma compensation expense disclosures for Old Globalstar for the period from January 1, 2003 through December 4, 2003 have been omitted because such amounts would not be significant to 2003 operating results and the related stock options and warrants were not exercisable for membership interest units of New Globalstar.

          Globalstar Telecommunications Limited ("GTL"), an entity whose sole business was acting as one of two general partners of Old Globalstar, was a publicly traded entity. Old Globalstar was a voluntary filer with the Securities and Exchange Commission. In January 2004, Old Globalstar filed a Form 15 with the Securities and Exchange Commission to suspend its reporting under the Securities Exchange Act of 1934.

F-14


2.    BUSINESS

        Globalstar owns and operates a satellite constellation that forms the backbone of a global telecommunications network designed to serve virtually every populated area of the world. Globalstar's worldwide, low earth orbit ("LEO") satellite-based digital telecommunications system (the "Globalstar System"), which uses QUALCOMM's patented CDMA technology, provides mobile and fixed telephone service to customers who live, work or travel beyond the reach of terrestrially based communications networks. The Globalstar System has been providing satellite based wireless communications services since 1999. The Globalstar System's coverage is designed to enable its service providers to extend telecommunications services to people who lack basic telephone service and to enhance wireless communications in areas underserved or not served by cellular systems, providing a telecommunications solution in parts of the world where the build-out of terrestrial systems is not economically justified.

          On February 15, 2002 (the "Petition Date"), Old Globalstar and three of its subsidiaries filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court ("Bankruptcy Court") for the District of Delaware. Old Globalstar and its debtor subsidiaries remained in possession of their assets and properties and continued to operate their businesses as debtors-in-possession.

          Under Chapter 11, substantially all unsecured liabilities as of the Petition Date were subject to compromise or other treatment under a plan of reorganization, which was required to be approved and confirmed by the Bankruptcy Court. For financial reporting purposes, those liabilities and obligations whose treatment and satisfaction were dependent on the outcome of the Chapter 11 case were segregated in the consolidated balance sheet as liabilities subject to compromise. Generally, all actions to enforce or otherwise require repayment of Old Globalstar's pre-petition liabilities were stayed under the Bankruptcy Code while Old Globalstar continued its business operations as a debtor-in-possession.

          During the course of its financial restructuring, Old Globalstar developed a business plan, which was predicated on an infusion of funds and assumed the consolidation of certain Globalstar service provider operations into Globalstar. Several of the acquisitions contemplated in the business plan have been completed (Notes 4 and 17). The Company believes that its consolidation strategy has brought additional efficiencies to the operation of the Globalstar System and allowed for increased consistency in product and service offerings in the Americas and Europe. In addition, Globalstar has revised its business relationships with its independent service providers and continues to explore the possible acquisition of additional Globalstar service provider operations.

          Under auction procedures approved by the Bankruptcy Court, in April 2003 ICO Global Communications (Holdings) Limited ("ICO"), one of the three qualified investors that participated in the auction, was ultimately selected as the bidder proposing the highest and best offer for Old Globalstar's assets. Old Globalstar and ICO subsequently entered into an investment agreement (the "ICO Investment Agreement"), and Old Globalstar and an affiliate of ICO subsequently entered into a $35.0 million secured, super priority debtor-in-possession credit agreement (the "ICO DIP Facility") as of May 19, 2003. A portion of the ICO DIP Facility was used to repay $10.0 million borrowed under previous debtor-in-possession financing that had been provided by a consortium of lenders, including representatives of the Old Globalstar Official Committee of Unsecured Creditors (the "Creditors' Committee").

          In October 2003, ICO informed Old Globalstar that it believed that unspecified conditions to the closing of the ICO Investment Agreement would not be satisfied and therefore consented to Old Globalstar reopening discussions with other potential investors. On November 17, 2003, Old Globalstar, Thermo and the Creditors' Committee executed a term sheet regarding a proposed transaction. On December 2, 2003,

F-15


the Bankruptcy Court entered an order authorizing the Thermo Transaction. On December 5, 2003, Old Globalstar, the Creditors' Committee and Thermo entered into the Asset Contribution Agreement.

          Old Globalstar submitted its Disclosure Statement and Fourth Amended Joint Plan to the Bankruptcy Court on May 3, 2004. The Bankruptcy Court confirmed the Plan on June 17, 2004, and the Plan became effective June 29, 2004 (the "Effective Date"). Pursuant to the Plan, on the Effective Date, all partnership interests in Old Globalstar were cancelled without consideration, Old Globalstar's membership interests in Globalstar were distributed to its unsecured creditors and Old Globalstar was dissolved. Globalstar Capital Corporation, a former subsidiary of Old Globalstar, remains as a debtor entity responsible for the resolution of claims against Old Globalstar and the wind up of Old Globalstar. New Globalstar does not have any continuing financial commitment related to the wind up.

          On March 25, 2003, Old Globalstar entered into a settlement and release agreement with Elsacom SpA ("Elsacom") and a gateway asset purchase agreement (collectively the "Elsacom Settlement") with a wholly owned subsidiary of Elsacom. Elsacom is the primary Globalstar service provider in Central and Eastern Europe, the operator of the gateway located in Avezzano, Italy and, through its affiliate, Globalstar Northern Europe, the former operator of the gateway located in Karkkila, Finland. Under the terms of the Elsacom Settlement, Old Globalstar received cash payments totaling $2.2 million, in two installments, in March 2003 and June 2003 and the release of all past payment obligations, including certain pre-petition liabilities, due to Elsacom in exchange for liquidation of the gateway contract payments due to Old Globalstar from Elsacom. Additionally, Old Globalstar retained title to the gateway equipment installed in Finland. Old Globalstar dismantled the Finland gateway and placed the removable parts, which contain most of the gateway's electronics, into storage for future deployment.

          On March 14, 2003, Loral, the Creditors' Committee and Old Globalstar signed a term sheet outlining the terms and conditions of a comprehensive settlement of certain contested matters and a release of the claims against Loral (the "Loral Settlement"). Also on March 14, 2003, Old Globalstar and the Creditors' Committee filed a joint motion with the Bankruptcy Court under Bankruptcy Rule 9019 for an order approving the Loral Settlement. The Bankruptcy Court approved the Loral Settlement on April 14, 2003. The parties executed a definitive agreement reflecting the terms of the Loral Settlement as of April 8, 2003, and closed the various interrelated transactions on July 10, 2003. Pursuant to the definitive settlement agreement, as of the closing, among other things: (1) Old Globalstar received title to eight spare satellites; (2) certain agreements under which Loral held exclusive rights to provide Old Globalstar services to certain defense, national security and other government agencies and in the aviation market were terminated and a new joint venture owned 75% by Old Globalstar and 25% by Loral was formed to pursue business opportunities with those governmental agencies ($300,000 and $100,000 of Government Services, LLC ("GSLLC") accounts payable were converted to equity, respectively); (3) Old Globalstar received Loral's interests in the Canadian Globalstar service provider operations (49.9% interest representing 17,758,485 common shares valued at CD$25,000); (4) certain financial obligations of Loral-affiliated service providers ($5.5 million) due to Old Globalstar were settled through deduction in debt obligations owed by Globalstar Canada Co. ($5.5 million) to Loral and $4.4 million of other financial obligations between Old Globalstar and Loral were restructured; (5) Old Globalstar received the unused portion of advance prepayments ($2.2 million) made by it under its 2GHz satellite contract with Space Systems/Loral, Inc. ("SS/L"), an affiliate of Loral, as reduced by certain financial obligations of Old Globalstar to Loral ($109,000); (6) Loral's designated individuals resigned from Old Globalstar's General Partners Committee, and officers of Old Globalstar were appointed as members of the General Partners Committee; and (7) Old Globalstar and its subsidiaries and Loral and its subsidiaries and affiliates

F-16


provided mutual releases of claims and Old Globalstar and its subsidiaries released any claims against the members of the Committee.

          On April 13, 2004, Globalstar, Old Globalstar, certain subsidiaries of both Globalstar entities, the Creditors' Committee, Thermo and QUALCOMM entered into a Settlement Agreement and Release (the "QUALCOMM Settlement"). Under the terms of the QUALCOMM Settlement: QUALCOMM's unsecured claim against the estate of Old Globalstar was liquidated at a value of approximately $661.3 million; QUALCOMM's unsecured claim received pari passu treatment consistent with other unsecured claims against Old Globalstar; all existing agreements between Globalstar entities and QUALCOMM, with certain minor exceptions for in process items, were terminated with no further rights or obligations; and Old Globalstar and QUALCOMM exchanged broad releases of further liability. Also on April 13, 2004, QUALCOMM and Globalstar entered into a series of new commercial agreements which defined, among other items, the terms under which Globalstar would continue to have a royalty free right to use certain QUALCOMM intellectual property and would continue to purchase products and engineering services from QUALCOMM.

          Globalstar is dependent on QUALCOMM for gateway hardware and software, and also as the exclusive manufacturer of phones using the IS-41 CDMA North American standard. Ericsson OCM Limited ("Ericsson") and Telit, which until 2000 manufactured phones and other products for the Company, have discontinued manufacturing these products, and there is no assurance that QUALCOMM will not choose to terminate its business relationship with Globalstar. Management believes that its relationship with QUALCOMM is strong; however, if necessary, this relationship can be replaced. If the relationship were to be replaced, there may be a substantial period of time in which products would not be available or a new relationship may involve a significantly different cost structure.

          SS/L completed production of seven of the eight spare satellites. All eight are in storage in California. Title to those satellites was transferred to Old Globalstar effective July 10, 2003, and was subsequently transferred to New Globalstar as part of the Asset Contribution Agreement. Globalstar is dependent on SS/L to complete construction of the eighth satellite if Globalstar determines that the eighth satellite must be launched. There can be no assurance that SS/L will remain a going concern or will retain the capability to complete the eighth satellite.

3.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pre-petition Debt

          As a result of the Chapter 11 filing, no principal or interest payments were made on unsecured pre-petition debt. Interest expense on pre-petition debt was not paid during the bankruptcy proceeding and was not an allowed claim.

Use of Estimates in Preparation of Financial Statements

          The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from estimates.

F-17


Principles of Consolidation

          The consolidated financial statements include the accounts of Globalstar, its wholly owned subsidiaries and its 75% owned subsidiary, Government Services, L.L.C. All significant intercompany transactions and balances have been eliminated in the consolidation.

          Prior to 2005, one subsidiary was 98% owned by Globalstar and 2% owned by minority interests (Thermo). Minority interest amounts were not significant. During 2005, a $100,000 payment was made to redeem the 2% minority interest.

Interim Financial Information

          The interim financial information as of June 30, 2006 and for the six months ended June 30, 2005 and 2006 is unaudited. In the opinion of management, such information includes all adjustments, consisting of normal recurring adjustments, that are necessary for a fair presentation of the Company's consolidated financial position, results of operations, and cash flows for such periods. Operating results for the six months ended June 30, 2006 are not necessarily indicative of the results to be expected for the full year or any future period.

Cash and Cash Equivalents

          Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less.

Financial Instruments

          Except for the payables to affiliates and the note payable to Loral (Note 7), the carrying amounts of financial instruments approximate fair value due to the short maturities of these instruments. The fair value of the payables to affiliates and the note payable to Loral are not practicable to estimate based on the related party nature of the underlying transactions. The Company has no material off-balance sheet financial instruments.

Accounts Receivable

          Accounts receivable are uncollateralized and consist primarily of on-going service revenue and equipment receivables. Management reviews accounts receivable on a periodic basis to determine if any receivables will potentially be uncollectible. Accounts receivable balances that are determined likely to be uncollectible are included in the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

F-18


          The following is a summary of the activity in the allowance for doubtful accounts (in thousands):

 
   Predecessor
   Successor
    
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2006
  
 
    
    
    
    
   (unaudited)

  
Balance at beginning of period   $ 2,046   $ 1,127   $ 1,173   $ 1,187   $ 1,774  
Provision, net of recoveries     492     46     859     998     662  
Write-offs     (1,411 )   —     (845 )   (411 )   (166 )
   
 
 
 
 
 
Balance at end of period   $ 1,127   $ 1,173   $ 1,187   $ 1,774   $ 2,270  
   
 
 
 
 
 

Inventory

          Inventory consists of purchased products, including fixed and mobile user terminals, accessories and gateway spare parts. Inventory acquired on December 5, 2003 is stated at fair value at the date of the Thermo Transaction and subsequent transactions are stated at the lower of cost or market. Inventory prior to December 5, 2003 was stated at the lower of cost or market. Cost is computed using the first-in, first-out (FIFO) method which determines the acquisition cost on a FIFO basis. Inventory allowances are recorded for inventories with a lower market value or which are slow moving. Unsaleable inventory is written off.

Property and Equipment

          Property and equipment is stated at acquisition cost, less accumulated depreciation and impairment. Depreciation is provided using the straight-line method over the estimated useful lives of the respective assets, as follows:

Globalstar System:    
  Space segment   Up to periods of 10 years from commencement of service
  Ground segment   Up to periods of 10 years from commencement of service

Furniture, fixtures & equipment
 
3 to 10 years

Leasehold improvements
 
Shorter of lease term or the estimated useful lives of the improvements, generally 5 years

          The Globalstar System includes costs for the design, manufacture, test, and launch of a constellation of low earth orbit satellites, including in-orbit spare satellites (the "Space Segment"), and primary and backup control centers and gateways (the "Ground Segment").

F-19

        Losses from in-orbit failures of satellites are recorded in the period it is determined that the satellite is not recoverable.

          The carrying value of the Globalstar System is reviewed for impairment whenever events or changes in circumstances indicate that the recorded value of the Space Segment and Ground Segment, taken as a whole, may not be recoverable. Globalstar looks to current and future undiscounted cash flows, excluding financing costs, as primary indicators of recoverability. If impairment is determined to exist, any related impairment loss is calculated based on fair value.

          Following a launch failure in September 1998, Old Globalstar decided to purchase eight additional satellites for $148.0 million (including performance incentives of up to $16.0 million) to serve as on-ground spares. Costs of $147.0 million (including a portion of the performance incentives) were previously recognized for these spare satellites. Prior to 2002, Old Globalstar recorded an impairment of these costs, and at December 31, 2002 they were carried at $24.2 million. Seven of the eight have been completed, and all eight are in storage in California. Depreciation of these assets will not begin until the satellites are placed in service. As of December 31, 2004, these assets were recorded at $946,000, of which $858,000 was based on the Company's allocation of the Thermo Transaction acquisition cost. During the year ended December 31, 2005 and the six months ended June 30, 2006, the Company incurred additional costs of approximately $2.1 million and $50.0 million (unaudited), respectively, in preparation for the future launch of these satellites.

Gateway Receivables

          Old Globalstar entered into an agreement with QUALCOMM for the manufacture, deployment and maintenance of gateways. Old Globalstar, in turn, invoiced the service providers for the contract costs plus a markup. The net receivables were $1.0 million at December 31, 2004 and 2005 and zero (unaudited) at June 30, 2006.

          As of December 31, 2005, the Company was in negotiation for the purchase of a service provider jointly owned by Globalstar Americas Holding (GAH), Globalstar Americas Telecommunications (GAT), and Astral Technologies Investment Limited (Astral), collectively, the GA Companies (Note 17).

Deferred Transaction Costs

          These costs represent costs incurred in obtaining long-term credit facilities and expenses related to the Company's proposed initial public offering of its common stock (IPO). These costs are classified as long-term other assets and will be amortized as additional interest expense over the term of the credit facilities or netted against equity proceeds. As of December 31, 2005 and June 30, 2006, the Company had gross deferred offering costs related to the credit facilities of $524,000 and $3,583,000 (unaudited) and the IPO of $200,000 and $507,000 (unaudited), respectively. Approximately $46,000 (unaudited) was recorded as interest expense for the six months ended June 30, 2006.

Asset Retirement Obligation

          In accordance with Statement of Financial Accounting Standards ("SFAS") No. 143, "Accounting for Asset Retirement Obligations," the Company capitalized, as part of the carrying amount, the estimated costs associated with the retirement of two gateways owned by the Company. As of December 31, 2005, the Company had accrued $450,000 for asset retirement obligations. The Company believes this estimate

F-20


will be sufficient to satisfy the Company's obligation under leases to remove the gateway equipment and restore the sites to their original condition.

Revenue Recognition and Deferred Revenues

          Customer activation fees are deferred and recognized over four to five year periods, which approximates the estimated average life of the customer relationship. The Company periodically evaluates the estimated customer relationship life. Historically, changes in the estimated life have not been material to the Company's financial statements.

          Monthly access fees billed to retail customers and resellers, representing the minimum monthly charge for each line of service based on its associated rate plan, are billed on the first day of each monthly bill cycle. Airtime minute fees in excess of the monthly access fees are billed in arrears on the first day of each monthly bill cycle. To the extent that bill cycles fall during the course of a given month and a portion of the monthly services have not been delivered at month end, fees are prorated and fees associated with the undelivered portion of a given month are deferred. Under the Company's Liberty Plans, customers prepay for the minutes purchased. Revenue is deferred until the minutes are used or the prepaid time period expires. Unused minutes are accumulated until they expire, usually one year after activation.

          Globalstar also provides certain engineering services to assist customers in developing new technologies related to the Globalstar System. The revenues associated with these services are recorded when the services are rendered and the expenses are recorded when incurred. During 2005, the Company recorded engineering services revenues of $3.5 million and related costs of $1.7 million. Engineering services revenues and cost of services were not significant in 2003 and 2004. Engineering service revenues and related costs were $1.1 million (unaudited) and $0.9 million (unaudited), respectively for the six months ended June 30, 2006.

          Globalstar owns and operates the Globalstar satellite constellation and earns a portion of its revenues through the sale of airtime minutes on a wholesale basis to independent service providers. Revenue from sales to service providers is recognized based upon airtime minutes processed and contractual fee arrangements.

          Airtime revenue is also earned from third party service providers that use the Globalstar System. Prior to December 31, 2005, airtime revenue related to certain of these service providers was recognized on a cash basis due to concerns about the collectibility of the underlying receivables. These revenues were not material to total revenue. As of December 31, 2005, based on Management's review of the payment history of service provider receivables, the revenue recognition was changed from the cash basis to an accrual basis. If any receivable is deemed likely to be uncollectible, the receivable is accounted for in the allowance for doubtful accounts.

          Subscriber equipment revenue represents the sale of fixed, mobile user terminals and accessories. Revenue is recognized upon shipment provided title and risk of loss have passed to the customer, persuasive evidence of an arrangement exists, the fee is fixed and determinable and collection is probable.

          In December 2002, the Emerging Issues Task Force ("EITF") reached a consensus on EITF Issue No. 00-21, "Revenue Arrangements with Multiple Deliverables." EITF Issue No. 00-21 addresses certain aspects of the accounting by a vendor for arrangements under which it will perform multiple revenue-generating activities. In some arrangements, the different revenue-generating activities (deliveries) are

F-21


sufficiently separable and there exists sufficient evidence of their fair values to separately account for some or all of the deliveries (that is, there are separate units of accounting). In other arrangements, some or all of the deliveries are not independently functional, or there is not sufficient evidence of their fair values to account for them separately. EITF Issue No. 00-21 addresses when, and if so, how an arrangement involving multiple deliverables should be divided into separate units of accounting. EITF Issue No. 00-21 does not change otherwise applicable revenue recognition criteria.

Research and Development Expenses

          Research and development costs were $1.4 million and $52,000 for the Predecessor and Successor Periods in 2003, respectively, and $2.0 million and $2.4 million for the years ended December 31, 2004 and 2005, respectively and $1.1 million (unaudited) for the six months ended June 30, 2006, and are expensed as incurred as part of marketing, general and administrative expenses.

Foreign Currency

          Foreign currency assets and liabilities are remeasured into U.S. dollars at current exchange rates and revenue and expenses are translated at the average exchange rates in effect during each period. For the years ended December 31, 2004 and 2005 and six months ended June 30, 2005 and 2006, the foreign currency translation adjustments were $168,000, $538,000, $(266,000) (unaudited) and $1,732,000 (unaudited), respectively.

          Foreign currency transaction gains and losses are included in net income (loss). Foreign currency transaction gains and losses are classified as other income or expense on the statement of operations.

Income Taxes

          Until January 1, 2006, Globalstar was treated as a partnership for U.S. tax purposes (Notes 13 and 17). Generally, taxable income or loss, deductions and credits of the Company were passed through to its members. Globalstar does have some corporate subsidiaries that require a tax provision or benefit using the asset and liability method of accounting for income taxes as prescribed by SFAS No. 109, "Accounting for Income Taxes." As of December 31, 2004 and 2005, the corporate subsidiaries had gross deferred tax assets of approximately $10.6 million and $7.6 million, respectively. A valuation reserve has been set up to reserve $5.9 million and $5.2 million as of December 31, 2004 and 2005, respectively, due to concerns about the Company's ability to generate sufficient income in those corporate subsidiaries to be able to utilize the deferred tax assets

          Effective January 1, 2006, Globalstar and its U.S. operating subsidiaries elected to be taxed as a corporation in the United States and began accounting for these entities under SFAS 109.

          Old Globalstar was organized as a Delaware limited partnership with various corporate subsidiaries. Generally, taxable income or loss, deductions and credits of the partnership were passed through to its partners.

Stock-Based Compensation

          The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees," ("APB No. 25") and related interpretations in accounting for its employee

F-22


stock options. Under APB No. 25, no compensation expense is recognized if the exercise price of the Company's stock options equals or exceeds the fair value of the underlying stock at the date of grant.

          Pro forma information regarding net income (loss) is required by SFAS No. 123, "Accounting for Stock-Based Compensation," which also requires that the information be determined as if the Company has accounted for its employee stock options granted under the fair value method. Effective January 1, 2005, the Company promised one of its board members the option to purchase up to 120,000 shares at a price of approximately $2.67 per share (as adjusted for a six-for-one stock split). The Company has included these options within its diluted earnings per share computations for all periods in which such options are outstanding. The Company has not disclosed the pro forma information as the pro forma effect is not significant.

Earnings Per Share

          The Company applies the provisions of SFAS No. 128, "Earnings Per Share," which requires companies to present basic and diluted earnings per share. Basic earnings per share is computed based on the weighted-average number of common shares outstanding during the period. Common stock equivalents are included in the calculation of diluted earnings per share only when the effect of their inclusion would be dilutive. The effect of common stock equivalents has been excluded from the calculation of diluted earnings per share for the Predecessor and Successor Periods in 2003 because they were anti-dilutive. For the year ended December 31, 2005 and the six months ended June 30, 2006 (unaudited), weighted average shares outstanding for diluted earnings per share includes the effects of the 120,000 stock options promised to a board member in January 2005. For the six months ended June 30, 2006 (unaudited), weighted average shares outstanding for diluted earnings per share includes the effects of the 120,000 stock options which the Company agreed to grant to a new board member during the first quarter of 2005 and shares of common stock that are contingently issuable to the former stockholders of the GA Companies (Note 17).

          The following table sets forth the computations of basic and diluted earnings (loss) per share (in thousands, except per share data):

 
   December 5, Through December 31, 2003
   Year Ended December 31, 2004
 
  
Income (Loss)
(Numerator)
   Weighted Average
Shares Outstanding
(Denominator)
   Per-Share
Amount
   Income (Loss)
(Numerator)
   Weighted Average
Shares Outstanding
(Denominator)
   Per-Share
Amount
Basic earnings (loss) per common share                                
  Net income (loss)   $ (4,517 ) 60,000,000   $ (0.08 ) $ 370   60,463,917   $ 0.01
   
 
 
 
 
 
Effect of Dilutive Securities                                
  Stock options to director     —   —           —   —      
  Globalstar Americas Telecommunications ("GAT") acquisition     —   —           —   —      
   
 
       
 
     
Diluted earnings (loss) per common share   $ (4,517 ) 60,000,000   $ (0.08 ) $ 370   60,463,917   $ 0.01
   
 
 
 
 
 

F-23

 
   Year Ended December 31, 2005
   Six Months Ended June 30, 2005 (unaudited)
 
   Income (Loss)
(Numerator)
   Weighted Average
Shares Outstanding
(Denominator)
   Per-Share
Amount
   Income (Loss)
(Numerator)
   Weighted Average
Shares Outstanding
(Denominator)
  
Per-Share
Amount
Basic earnings (loss) per common share                                
  Net income (loss)   $ 18,719   61,855,668   $ 0.30   $ 2,856   61,855,668   $ 0.05
   
 
 
 
 
 
Effect of Dilutive Securities                                
  Stock options to director     —   100,206           —   100,206      
  GAT acquisition     —   —           —   —      
   
 
       
 
     
Diluted earnings (loss) per common share   $ 18,719   61,955,874   $ 0.30   $ 2,856   61,955,874   $ 0.05
   
 
 
 
 
 
 
   Six Months Ended June 30, 2006 (unaudited)
 
  
Income(Loss)
(Numerator)
   Weighted Average
Shares Outstanding
(Denominator)
   Per-Share
Amount
Basic earnings (loss) per common share                
  Net income (loss)   $ 21,652   61,957,906   $ 0.35
   
 
 
Effect of Dilutive Securities                
  Stock options to director     —   100,206      
  GAT acquisition     —   229,506      
   
 
     
Diluted earnings (loss) per common share   $ 21,652   62,287,618   $ 0.35
   
 
 

Pro Forma Net Income and Pro Forma Earnings Per Share (Unaudited)

          Pro forma net income and pro forma earnings per share for the year ended December 31, 2005 and the six months ended June 30, 2005 has been calculated as if the Company had been a C corporation for federal income tax purposes (Note 17).

Recently Issued Accounting Pronouncements

          In November 2004, Financial Accounting Standards Board ("FASB") issued SFAS No. 151, "Inventory Costs," which amends the guidance in ARB No. 43, Chapter 4, Inventory Pricing, to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (spoilage). This Statement requires that those items be recognized as current-period charges regardless of whether they meet the criterion of "so abnormal." In addition, this Statement requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The provisions of this Statement are effective for inventory costs incurred during fiscal years beginning after June 15, 2005. The Company has completed its evaluation of SFAS No. 151 and has determined that the Statement will not have a material effect on its consolidated financial statements.

          In December 2004, the FASB issued SFAS No. 153, "Exchanges of Nonmonetary Assets an amendment of APB Opinion No. 29." This Statement amends Opinion 29 to eliminate the exception for nonmonetary exchanges of similar productive assets and replaces it with a general exception for exchanges

F-24


of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. This Statement is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. The Company has completed its evaluation of SFAS No. 153 and has determined that the Statement does not have a material effect on its consolidated financial statements.

          In December 2004, the FASB issued SFAS No. 123 (revised 2004), "Share-Based Payment" ("SFAS No. 123R"). This Statement requires companies to record compensation expense for all share-based awards granted subsequent to the adoption of SFAS No. 123R. In addition, SFAS No. 123R requires the recording of compensation expense for the unvested portion of previously granted awards that remain outstanding at the date of adoption. The Company will adopt SFAS No. 123R effective January 1, 2006 and does not expect the adoption to have a material effect on its consolidated financial position or results of operations.

          In March 2005, the FASB issued FASB Interpretation ("FIN") No. 47, "Accounting for Conditional Asset Retirement Obligations" ("FIN No. 47"), which is effective no later than the end of fiscal years ending after December 15, 2005. FIN No. 47 clarifies the term conditional asset retirement obligation as used in SFAS No. 143, "Accounting for Asset Retirement Obligations." Conditional asset retirement obligation refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. The Company does not expect the adoption of FIN No. 47 to have a material effect on its consolidated financial position or results of operations.

          In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections" ("SFAS No. 154"). This Statement requires retrospective application to prior periods' financial statements of voluntary changes in accounting principles unless it is impracticable to determine either the period-specific effects or the cumulative effect of the change. SFAS No. 154 makes a distinction between "retrospective application" of an accounting principle and the "restatement" of financial statements to reflect the correction of an error. SFAS No. 154 replaces Accounting Principles Bulletin ("APB") No. 20, "Accounting Changes" ("APB No. 20"), and SFAS No. 3, "Reporting Accounting Changes in Interim Financial Statements." APB No. 20 previously required that most voluntary changes in accounting principle be recognized by including the cumulative effect of changing to the new accounting principle in the net income of the period of the change. SFAS No. 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of SFAS No. 154 to have a material effect on its consolidated financial position or results of operations.

          In February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid Financial Instruments—an amendment of FASB Statements No. 133 (Accounting for Derivative Instruments and Hedging Activities) and No. 140 (Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities)" ("SFAS No. 155"), which permits fair value remeasurement for any hybrid financial instrument that contains an embedded derivative that otherwise would require bifurcation. In addition, SFAS No. 155 establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation under the requirements of Statement No. 133. SFAS No. 155 will be effective for all financial instruments acquired or issued after the beginning of an entity's first fiscal year that begins after September 15, 2006. The Company will adopt SFAS No. 155 effective

F-25


January 1, 2007. The Company does not expect the adoption of SFAS No. 155 to have a material effect on its consolidated financial position or results of operations.

          In March 2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial Assets—an amendment of FASB Statement No. 140" ("SFAS No. 156"). SFAS No. 156 amends FASB Statement No. 140, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," with respect to the accounting for separately recognized servicing assets and servicing liabilities. SFAS No. 156 clarifies when servicing rights should be separately accounted for, requires companies to account for separately recognized servicing rights initially at fair value, and gives companies the option of subsequently accounting for those servicing rights at either fair value or under the amortization method. SFAS No. 156 will be effective as of the beginning of an entity's first fiscal year that begins after September 15, 2006. The Company will adopt SFAS No. 156 effective January 1, 2007. The Company does not expect the adoption of SFAS No. 156 to have a material effect on its consolidated financial position or results of operations.

4.    ACQUISITIONS

Globalstar Canada Satellite Co. ("GCSC")

          Prior to 2003, Old Globalstar controlled 50.1% of GCSC, the Company's Canadian satellite service provider. In connection with the Loral Settlement described in Note 2, Old Globalstar acquired Loral's 49.9% minority interest in July 2003.

          Prior to 2003, Old Globalstar owned 33.33% of Globalstar Canada Holding Co. ("GCHC"). Pursuant to Old Globalstar's new business plan, on May 6, 2003, Old Globalstar acquired the remaining 66.67% of the outstanding common stock of GCHC. As a result of this stock purchase, Old Globalstar indirectly owned 100% of Globalstar Canada Co. ("GCC"). The acquisition costs were $376,000, including legal fees. This transaction, combined with Old Globalstar's acquisition of GCSC, provided Old Globalstar with 100% ownership of the Canadian service provider operations. GCC and GCHC were amalgamated into GCSC on November 1, 2004. The following table summarizes the estimated values of the assets acquired and liabilities assumed with the acquisition (in thousands):

 
   May 6, 2003
Current assets   $ 333
Receivables from affiliates     6,510
Fixed assets     1,281
   
  Total assets acquired     8,124
   
Current liabilities     7,748
   
  Total liabilities assumed     7,748
   
Net assets acquired   $ 376
   

          The results of operations of GCC have been included in the consolidated financial statements from the date of acquisition. The Company's pro forma results of operations assuming the transaction had been completed on January 1, 2003 are not determinable.

F-26


Globalstar de Venezuela, C.A. ("GdeV")

          Pursuant to Globalstar's continuing consolidation strategy, on February 4, 2005, GdeV, a recently formed indirect (through GCSC) subsidiary of Globalstar, executed a series of agreements to acquire the mobile satellite services business assets of TE.SA.M. de Venezuela, C.A. ("TESAM"), the Globalstar service provider in Venezuela, at a cost of $1.6 million. This asset purchase is expected to be completed in two stages. The first stage, which transferred certain nonregulated assets, including the land where the Venezuelan gateway is located, was completed upon the execution of the agreements.

          The second stage of the transaction, which would transfer regulated assets including the gateway equipment, will be completed after the Venezuelan regulatory consents are obtained. Management has determined that operational control passed to New Globalstar with the completion of the first stage of the transaction in February 2005. Regulatory approval is expected in 2006. Pursuant to the purchase agreements, GdeV paid approximately $342,000 upon execution of the agreements. The $1,250,000 balance of the purchase price is payable in sixteen quarterly installments of $78,125 (interest imputed at 7.0% resulting in a discount of approximately $250,000). Only the first two of these sixteen quarterly installments were required in advance of Venezuelan regulatory approvals. Principal payments to be made in 2006, 2007, 2008, and 2009 are $309,735, $277,644, $297,596, and $77,682, respectively.

          The following table summarizes the Company's allocation of the estimated values of the assets acquired and liabilities assumed in the acquisition (in thousands):

 
   February 4, 2005
Current assets   $ 82
Property and equipment     1,314
   
  Total assets acquired     1,396
   
Current liabilities     367
Long-term debt     687
   
  Total liabilities assumed     1,054
   
Net assets acquired   $ 342
   

          The results of operations of GdeV have been included in the Company's consolidated financial statements from the date of acquisition. The Company's pro forma results of operations assuming the transaction had been completed on January 1, 2004 are not determinable.

F-27


5.    PROPERTY AND EQUIPMENT

        Property and equipment consist of the following (in thousands):

 
   December 31,
2004
   December 31,
2005
   June 30,
2006
  
 
    
    
   (unaudited)

  
Globalstar System:                    
  Space segment   $ 6,124   $ 5,832   $ 5,832  
  Ground segment     6,720     11,427     20,806  
Spare satellites and launch costs     946     3,012     53,035  
Construction in progress     1,223     3,654     1,382  
Land     269     1,070     2,591  
Leasehold improvements     1,110     1,363     1,376  
Building     —     84     484  
Furniture and office equipment     4,959     6,624     7,672  
   
 
 
 
      21,351     33,066     93,178  
Accumulated depreciation     (8,571 )   (11,806 )   (14,177 )
   
 
 
 
    $ 12,780   $ 21,260   $ 79,001  
   
 
 
 

          Property and equipment consists of an in-orbit satellite constellation, ground equipment, and support equipment located in various countries around the world. During the years ended December 31, 2005 and 2004, the Company recorded impairment charges of $114,000 and $114,000, respectively, related to satellite failures. There were no satellite failures during the six months ended June 30, 2006 (unaudited). During the 2003 Predecessor Period, Old Globalstar recorded an impairment charge of $2.5 million (classified as an operating expense) related to the space segment resulting from a satellite failure and recorded a $211.9 million impairment charge (classified as impairment of assets) related to the Globalstar System, including space segment, ground segment, replacement satellites, unsold production gateways, and other related assets. This charge resulted from a reduction in the estimated fair values of these assets as indicated by the acquisition cost of the Thermo Transaction. During 2004, the Company began construction of a gateway located in Florida. Construction was completed in July 2005 with a cost of $2.9 million. During 2005, the Company began construction of a gateway located in Alaska. Through December 31, 2005, actual costs incurred were approximately $3.3 million. The Alaska gateway construction was completed by June 30, 2006 for a total cost of $4.8 million (unaudited).

6.    TERM LOANS

        On March 6, 2003, the Bankruptcy Court approved $10.0 million in debtor-in-possession financing provided by a consortium of lenders, including two members of the Creditors' Committee. Funds totaling $10.0 million were drawn, including the final draw of $2.0 million made on May 8, 2003. On May 27, 2003, the $10.0 million debtor-in-possession financing was retired with proceeds drawn from the ICO DIP Facility at a total cost of $10.4 million, including repayment of the $10.0 million principal balance, accrued interest of $149,000, the funding of the lender's legal expense of $12,000 and $250,000 placed into an escrow account to fund the lenders' commitment fee.

          The ICO DIP Facility provided access to $35.0 million that could be borrowed in increments of $1.0 million with no more than one borrowing allowed in any calendar month. The funding provided

F-28


under the ICO DIP Facility was limited to $20.0 million until certain conditions had been satisfied. The terms of the ICO DIP Facility provided ICO with a security interest in substantially all the assets of Old Globalstar and its debtor subsidiaries, exclusive of $15.0 million cash reserved to fund a liquidation of Old Globalstar if it were to become necessary. Three borrowings, totaling $20.0 million, were executed as of December 5, 2003. Interest accrued on the loans at 8% per annum. The maturity date of the ICO DIP Facility was the earlier of the closing of the ICO transaction or December 31, 2003.

          In December 2003, Thermo and Globalstar entered into a new debtor-in-possession financing agreement (the "Thermo DIP Facility"). The Thermo DIP Facility provided Globalstar with access to up to $43.0 million, subject to certain conditions. Interest accrued on the Thermo DIP Facility at 8% per annum. On December 5, 2003, Thermo purchased from ICO all of ICO's rights under the ICO DIP Facility for consideration of $10.0 million in cash plus accrued interest of $765,000 and a promissory note issued by Thermo for $10.0 million. Subsequent to December 5, 2003, an additional $1.6 million was drawn on the Thermo DIP Facility and an additional $5.0 million was drawn from February to March 2004. In connection with the second stage of the Thermo Transaction in April 2004, $17.9 million of the Thermo DIP Facility (including accrued interest) was converted to New Globalstar membership interests. The remaining $10.0 million principal and $524,000 accrued interest due under the Thermo DIP Facility was paid in full in December 2004. Interest expense on the Thermo DIP Facility for the Successor Period in 2003 and for the year ended December 31, 2004 was $123,000 and $1,087,000, respectively.

7.    NOTE PAYABLE TO LORAL

        As a result of the Loral Settlement described in Note 2, the Company had a restructured note payable to Loral in the amount of approximately $4.0 million with interest at 6% per annum due in equal quarterly installments of $364,000 plus interest from June 2005 through March 2008.

          On July 31, 2005, the note payable and accrued interest to Loral totaled approximately $4.0 million. Pursuant to an agreement reached with Loral effective July 31, 2005, this amount was settled in exchange for a) the offset of an $818,000 receivable due to Globalstar; b) cash of $500,000 paid by Globalstar; c) the issuance of three credit memos by Globalstar of $300,000, $500,000 and $1,809,000 by Globalstar to Loral to be used for future purchases of equipment and air time payments; and d) the forgiveness of $100,000 by Loral (recorded as other income). As of December 31, 2005 and June 30, 2006, the credit memos for $300,000 and $500,000 had open purchase commitments placed against the remaining balances of approximately $24,000 and $408,000 (unaudited), respectively, and $24,000 and approximately $0 (unaudited), respectively. Approximately $635,000 and $1,366,000 (unaudited) of the $1,809,000 credit memo had been utilized as of December 31, 2005 and June 3o, 2006, respectively. This credit memo is expected to expire in October 2006. As of December 31, 2005, unused credit memos totaling approximately $1,606,000 were classified as deferred revenue on the accompanying consolidated balance sheet. As of June 30, 2006 unused credit memos total $467,000 (unaudited).

          Interest expense on the note payable to Loral for the Predecessor and Successor periods in 2003 and the years ended December 31, 2004 and 2005 was $337,000, $8,000, $237,000 and $176,000, respectively.

F-29


8.    ACCRUED EXPENSES

        Accrued expenses consist of the following (in thousands):

 
   December 31,
2004
   December 31,
2005
   June 30,
2006
 
    
    
   (unaudited)
Accrued compensation and benefits   $ 1,838   $ 1,926   $ 4,802
Accrued professional fees     1,420     582     475
Accrued property and other taxes     598     1,253     2,492
Accrued commissions     529     673     777
Customer deposits     444     1,055     1,695
Accrued pension cost—current portion     300     2,138     350
Other accrued expenses     2,927     3,857     5,725
   
 
 
    $ 8,056   $ 11,484   $ 16,316
   
 
 

          Other accrued expenses primarily include warranty reserve, outsourced logistics services, storage, maintenance, and roaming charges.

          Warranty terms extend from 90 days on equipment accessories to one year for fixed and mobile user terminals. Warranties are accounted for in accordance with SFAS No. 5, "Accounting for Contingencies," such that an accrual is made when it is estimable and probable that a loss has been incurred based on historical experience. Warranty costs are accrued based on historical trends in warranty charges as a percentage of gross product shipments. A provision for estimated future warranty costs is recorded as cost of sales when products are shipped. The resulting accrual is reviewed regularly and periodically adjusted to reflect changes in warranty cost estimates. The following is a summary of the activity in the warranty reserve account (in thousands):

 
   Predecessor
   Successor
    
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended June 30,
2006
  
 
    
    
    
    
   (unaudited)

  
Balance at beginning of period   $ 250   $ 302   $ 319   $ 568   $ 977  
Provision     206     17     306     1,031     720  
Utilization     (154 )   —     (57 )   (622 )   (409 )
   
 
 
 
 
 
Balance at end of period   $ 302   $ 319   $ 568   $ 977   $ 1,288  
   
 
 
 
 
 

9.    LINE OF CREDIT

        On December 14, 2005, the Company entered into a Loan and Security Agreement with Union Bank of California, N.A. providing for revolving credit loans of up to $15.0 million. The agreement provided for interest at either a base rate equal to the higher of the Federal Funds rate plus 0.5% or the bank's reference rate or a LIBOR based rate equal to the LIBOR rate for the relevant period plus 2.25%. All loans

F-30


under the loan agreement matured no later than December 31, 2007. The loans could be prepaid without penalty at any time. The Company's indebtedness under the loan agreement was guaranteed by its principal subsidiaries and was secured by a first lien on our and their personal property.

          The loan agreement contained covenants limiting the Company's ability to dispose of assets, change its business, merge, make acquisitions, incur indebtedness or liens, pay dividends, make investments or engage in certain transactions with affiliates. Additionally, the agreement contained covenants requiring Globalstar to maintain certain financial and operating covenants and others that restrict distributions.

          The Company never borrowed any funds under this loan agreement. On April 19, 2006, the Company terminated the Loan and Security Agreement with Union Bank in preparation for entering into a Credit Agreement with Wachovia Investment Holdings, LLC on April 24, 2006 (Note 18).

10.    PAYABLES TO AFFILIATES

        Payables to affiliates relate to normal purchase transactions and are comprised of the following (in thousands):

 
   December 31,
2004
   December 31,
2005
   June 30,
2006
 
    
    
   (unaudited)
QUALCOMM   $ 1,200   $ 2,758   $ 6,374
Thermo Capital Partners     116     201     850
   
 
 
    $ 1,316   $ 2,959   $ 7,224
   
 
 

          Thermo incurs certain general and administrative expenses on behalf of the Company, which are charged to the Company. For the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006, total expenses were approximately $116,000, $76,000, $51,008 (unaudited), and $20,000 (unaudited), respectively. For the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006, the Company also recorded $39,000, $145,000, $72,000 (unaudited), and $72,000 (unaudited), respectively, of expenses related to services provided by officers of Thermo and accounted for as a contribution to capital. The Thermo expense charges are based on actual amounts incurred or upon allocated employee time. Management believes the allocations are reasonable.

11.    RESTRUCTURING

        Beginning in 2001, Old Globalstar implemented a number of initiatives designed to reduce its cost of operations and restructure the Company's finances. These initiatives included reductions in Old Globalstar's workforce, the development of financial restructuring plans, negotiations with Old Globalstar's significant creditors, and the initiation of Old Globalstar's Chapter 11 case on February 15, 2002.

          Restructuring was completed during 2004 and the Company did not have any restructuring charges for the year ended December 31, 2005 or the six months ended June 30, 2006 (unaudited). For the

F-31


Predecessor and Successor Periods of 2003 and the year ended December 31, 2004, restructuring and reorganization charges were as follows (in thousands):

 
   Predecessor
   Successor
  
 
   January 1
Through
December 4,
2003
   December 5
Through
December 31,
2003
   Year Ended
December 31,
2004
  
Globalstar advisory fees   $ 3,308   $ 299   $ 2,555  
Creditor advisory fees     1,406     177     458  
Employee separation costs     —     —     823  
Other restructuring costs     739     220     1,268  
   
 
 
 
  Total     5,453     696     5,104  
Less: interest income     (72 )   (6 )   (26 )
   
 
 
 
Net restructuring costs   $ 5,381   $ 690   $ 5,078  
   
 
 
 

          Globalstar Advisory Fees—Old Globalstar retained financial advisors, restructuring counsel and other advisors to assist in the development of its financial restructuring plans, discussions with its various creditor groups and preparation for its Chapter 11 bankruptcy petition.

          Creditor Advisory Fees—At Old Globalstar's expense, Old Globalstar's informal committee of bondholders and later the Creditors' Committee retained financial advisors and restructuring counsel. Old Globalstar discontinued paying the informal committee's expenses upon formation of the Creditors' Committee.

          Employee Separation Costs—These costs represent severance and related obligations in relation to Old Globalstar's reduction in workforce implemented through 2004.

          All restructuring expenditures were paid in 2004 except approximately $1.5 million that remained in Old Globalstar's accounts at December 31, 2004. As of December 31, 2005, Old Globalstar retained approximately $623,000 in cash related to its restructuring plans and wind up costs. This cash is not reflected on the Company's accompanying consolidated balance sheets as of December 31, 2004 and 2005 and June 30, 2006 (unaudited). Old Globalstar management believes that the remaining cash will be adequate to pay Old Globalstar's restructuring liabilities and wind up costs.

12.    PENSIONS AND OTHER EMPLOYEE BENEFITS

Pensions

          Until June 1, 2004, substantially all Old and New Globalstar employees and retirees who participated and/or met the vesting criteria for the plan were participants in the Retirement Plan of Space Systems/Loral (the "Loral Plan"), a defined benefit pension plan. The accrual of benefits in the Old Globalstar segment of the Loral Plan was curtailed, or frozen, by the administrator of the Loral Plan as of October 23, 2003. Prior to October 23, 2003, benefits for the Loral Plan were generally based upon contributions, length of service with the Company and age of the participant. On June 1, 2004, the assets and frozen pension obligations of the Globalstar Segment of the Loral Plan were transferred into a new Globalstar Retirement Plan (the "Globalstar Plan"). The Globalstar Plan remains frozen and participants are

F-32


not currently accruing benefits beyond those accrued as of October 23, 2003. Globalstar's funding policy is to fund the Globalstar Plan in accordance with the Internal Revenue Code and regulations.

          Components of the net periodic benefit cost of the Company's contributory defined benefit pension plan for the years ended December 31, were as follows (in thousands):

 
   2003
   2004
   2005
  
Service cost   $ 408   $ —   $ —  
Interest cost     762     696     734  
Expected return on plan assets     (645 )   (665 )   (599 )
Amortization of transition obligation     (34 )   —     —  
Actuarial loss, net     108     —     52  
Curtailment loss     (100 )   —     —  
   
 
 
 
Net periodic benefit cost   $ 499   $ 31   $ 187  
   
 
 
 

          As of the measurement date (December 31), the status of the Company's defined benefit pension plan was as follows (in thousands):

 
   2004
   2005
  
Change in benefit obligation, beginning of year   $ 11,184   $ 12,310  
Interest cost     696     734  
Actuarial loss     996     1,283  
Benefits paid     (566 )   (662 )
   
 
 
Change in benefit obligation, end of year   $ 12,310   $ 13,665  
   
 
 
Change in plan assets, beginning of year   $ 8,130   $ 7,991  
Actual return on plan assets     427     474  
Employer contributions     —     727  
Benefits paid     (566 )   (662 )
   
 
 
Funded status, end of year   $ 7,991   $ 8,530  
   
 
 
Fair value of plan assets less benefit obligation   $ (4,319 ) $ (5,135 )
Unrecognized net actuarial loss     1,234     2,590  
   
 
 
Net amount recognized   $ (3,085 ) $ (2,545 )
   
 
 
Amounts recognized on the balance sheet consist of:              
Accrued pension liability   $ (4,319 ) $ (5,135 )
Accumulated other comprehensive loss     1,234     2,590  
   
 
 
Net amount recognized   $ (3,085 ) $ (2,545 )
   
 
 

          The assumptions used to determine the benefit obligations at December 31 were as follows:

 
   2004
   2005
  
Discount rate   5.75 % 5.50 %
Rate of compensation increase   N/A   N/A  

F-33

          The principal actuarial assumptions to determine net period benefit cost for the years ended December 31 were as follows:

 
   2003
   2004
   2005
  
Discount rate   6.25 % 6.25 % 5.75 %
Expected rate of return on plan assets   8.50 % 8.50 % 7.50 %
Rate of compensation increase   4.25 % N/A   N/A  

          The assumptions, investment policies and strategies for the Globalstar Plan are determined by the Globalstar Plan Committee. Prior to June 1, 2004, the assumptions, investment policies and strategies for the Globalstar segment of the Loral Plan were determined by the Loral Plan Committee. The expected long-term rate of return on pension plan assets is selected by taking into account the expected duration of the projected benefit obligation for the plans, the asset mix of the plans and the fact that the plan assets are actively managed to mitigate risk.

          The defined benefit pension plan asset allocation as of the measurement date (December 31) and the target asset allocation, presented as a percentage of total plan assets were as follows:

 
   2004
   2005
   Target Allocation
Debt securities   39 % 46 % 35%-50%
Equity securities   58 % 52 % 50%-60%
Other investments   3 % 2 % 0%-5%
   
 
   
Total   100 % 100 %  
   
 
   

          The benefit payments to retirees are expected to be paid as follows (in thousands):

Years Ending December 31,      
2006   $ 725
2007     718
2008     724
2009     735
2010     747
2011-2015     3,987

          In 2005, the Company contributed $727,000 to the Globalstar Plan. For the six months ended June 30, 2006, the Company contributed approximately $1,283,000 (unaudited) to the Globalstar Plan. The Company expects to contribute a total of approximately $2,138,000 to the Globalstar Plan in 2006. Due to delays in the transition of the Loral Plan to the Globalstar Plan and the payment schedules under applicable pension laws, some amounts related to 2005 obligations are being made during 2006.

Other Benefits

          Old Globalstar reimbursed Loral for the cost of Old Globalstar retirees' participation in the Loral retiree medical plan through May 2004. Old Globalstar withheld $63,000 claimed as due in a dispute with Loral over the pension plan. New Globalstar has not assumed liabilities related to the Loral retiree medical

F-34


plan. Old Globalstar's liabilities related to the Loral retiree medical plan have been included in the liabilities subject to compromise. Subsequent to May 2004, New Globalstar did not bear any cost associated with the participation of Old Globalstar's retirees in the Loral retiree medical plan.

          New Globalstar has not maintained its own plan to provide medical benefits for its retirees, although some Old Globalstar retirees have continued to be covered under the Loral Retiree Medical Plan sponsored by Loral. Retirees of Old Globalstar and New Globalstar participate in an Employee Term Life Insurance Plan offered by New Globalstar. New Globalstar continues to offer this plan to current retirees. Furthermore, New Globalstar reserves the right to terminate its employee or retiree benefit programs at any time and, accordingly, has not obligated itself to provide any such benefits for any specified period of time.

          Eligible retirees of New Globalstar participating in the Loral Supplemental Executive Retirement Plan will remain in such plan. New Globalstar will not offer a comparable plan to these former employees of Old Globalstar. New Globalstar does not bear any cost related to the participation of certain Old Globalstar employees in the Loral Supplemental Executive Retirement Plan.

Other Employee Plans

          Old Globalstar and the Company established various other employee benefit plans. These included Old Globalstar's employee stock option plan that was cancelled in 2004 (Note 1), an employee incentive program, an employee savings plan (described below) and other employee/management incentive compensation plans. The employee/management compensation plans are based upon annual performance measures and other criteria. The total expense related to these plans for the Predecessor and Successor Periods in 2003 were $1.7 million and $0.4 million, respectively, and for the years ended December 31, 2004 and 2005 were $0.9 million and $2.0 million, respectively.

          On August 1, 2001, Old Globalstar adopted a defined contribution employee savings plan, or "401(k)," which provided that Old Globalstar would match the contributions of participating employees up to a designated level. Prior to August 1, 2001, Old Globalstar's employees participated in the Loral 401(k) plan. This plan was continued by New Globalstar. Under this plan, the matching contributions were approximately $390,000, $237,000, $112,000 and $121,000 (unaudited) for 2003, 2004, 2005 and the six months ended June 30, 2006, respectively. As a cost reduction measure, Company matching of employee contributions was suspended in July 2004, but was reintroduced at a reduced level in January 2005.

13.    TAXES

        Prior to January 1, 2006, the Company and its U.S. operating subsidiaries were treated as partnerships for U.S. tax purposes. Generally, taxable income or loss, deductions and credits of the partnership were passed through to its partners. The Company does have significant foreign corporate subsidiaries that are taxable in their respective countries. There is also foreign withholding tax that is withheld on various income payments made to the Company.

          Effective January 1, 2006, the Company elected to be taxed as a C corporation in the United States. Under SFAS No. 109, when an enterprise changes its tax status from non-taxable to taxable, the effect of recognizing deferred tax assets and liabilities is included in income from continuing operations in the period of change. As a result, the Company recognized a gross deferred tax asset of $204.2 million (unaudited) and a gross deferred tax liability of $0.1 million (unaudited) on January 1, 2006. SFAS No. 109

F-35


also requires that deferred tax assets be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax asset will not be realized. In evaluating the need for a valuation allowance, the Company takes into account various factors including the expected level of future taxable income and available tax planning strategies. Accordingly, the Company also determined that it was more likely than not that it would not recognize the entire deferred tax asset; therefore, the Company established a valuation allowance of $182.7 million (unaudited), resulting in recognition of a net deferred tax benefit of $21.4 million (unaudited).

          The foreign subsidiaries have traditionally had large deferred tax assets. The Company regularly reviews its deferred tax assets for recoverability taking into consideration such factors as historical financial results, projected future taxable income and the expected timing of the reversals of existing temporary differences. SFAS No. 109 requires the Company to record a valuation allowance when it is "more likely than not that some portion or all of the deferred tax assets will not be realized." It further states "forming a conclusion that a valuation allowance is not needed is difficult when there is negative evidence such as cumulative losses in recent years." Since the purchase of the Canadian entities and until December 31, 2004, the Company maintained a 100% valuation allowance equal to the deferred tax assets after considering deferred tax assets that can be realized through offsets, if any, to existing taxable temporary differences.

          Based upon the Canadian subsidiaries' results of operations since December 31, 2001, and their expected profitability in 2005, the Company concluded, effective December 31, 2004, that it was more likely than not that approximately $4.8 million of its net deferred tax assets would be realized. As a result, in accordance with SFAS No. 109, this amount of the valuation allowance applied to such net deferred tax assets was reversed in the fourth quarter of 2004. Reversal of the valuation allowance resulted in a non-cash income tax benefit in the fourth quarter of 2004 totaling $4.8 million. This benefit represented the Company's estimated realizable deferred tax assets, excluding those deferred tax assets that resulted from the ongoing Canadian operation in 2005. At December 31, 2004, the Company's valuation allowance of approximately $5.9 million represented management's estimate at that time of net operating loss carryforwards both in the Canadian subsidiaries and other foreign subsidiaries which management did not believe were more likely than not to be utilized before the losses would expire unused.

          Based upon the Canadian subsidiaries' results of operations for the year ended December 31, 2005 and their expected profitability in 2006, the Company concluded that it was more likely than not that all of the remaining Canadian net deferred tax assets will be realized. As a result, in accordance with SFAS No. 109, the valuation allowance applied to such net deferred tax assets was reversed in the third quarter of 2005. Reversal of the valuation allowance resulted in a non-cash income tax benefit in the third quarter of 2005 totaling $4.2 million. The Company also recorded a deferred tax expense of $6.6 million related to the reversal of certain temporary differences, resulting in a net deferred tax expense of approximately $2.4 million.

F-36


          The components of income tax expense (benefit) were as follows:

 
   Predecessor
   Successor
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
  
 
    
    
    
    
   (Unaudited)

  
Current:                                      
  Federal tax (benefit)   $ —   $ (37 ) $ —   $ —   $ —   $ —  
  State tax     —     —     15     74     52     23  
  Foreign tax     170     —     448     6     299     1,018  
   
 
 
 
 
 
 
    Total     170     (37 )   463     80     351     1,041  

Deferred:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Federal and state tax (benefit)     —     —     —     —     —     (20,322 )
  Foreign tax (benefit)     —     —     (4,777 )   2,422     2,547     1,822  
   
 
 
 
 
 
 
    Total     —     —     (4,777 )   2,422     2,547     (18,500 )
   
 
 
 
 
 
 
Income tax expense (benefit)   $ 170   $ (37 ) $ (4,314 ) $ 2,502   $ 2,898   $ (17,459 )
   
 
 
 
 
 
 

          U.S. and foreign components of income (loss) before income taxes are presented below (in thousands):

 
   Predecessor
   Successor
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
U.S. income (loss)   $ (263,745 ) $ (3,023 ) $ (11,688 ) $ 12,736
Foreign income (loss)     2,035     (1,531 )   7,744     8,485
   
 
 
 
Total income (loss) before income taxes   $ (261,710 ) $ (4,554 ) $ (3,944 ) $ 21,221
   
 
 
 

          The components of net deferred income tax assets as of December 31, were as follows (in thousands):

 
   2004
   2005
  
Federal and foreign net operating loss and credit carryforwards   $ 7,585   $ 5,833  
Property and equipment     2,269     177  
Accruals and reserves     176     343  
Basis in subsidiaries     597     1,222  
   
 
 
Gross deferred tax asset     10,627     7,575  
Valuation allowance     (5,850 )   (5,177 )
   
 
 
  Net deferred income tax assets   $ 4,777   $ 2,398  
   
 
 

F-37

          As of December 31, 2005, the foreign subsidiaries have cumulative foreign and U.S net operating loss carryforwards for income tax reporting purposes of approximately $37.0 million. The net operating loss carryforwards expire on various dates from 2009 to 2024.

          The actual provision for income taxes differs from the statutory U.S. federal income tax rate as follows (in thousands):

 
   Predecessor
   Successor
  
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
  
Provision at U.S. statutory rate of 35%   $ (91,599 ) $ (1,594 ) $ (1,381 ) $ 7,427  
Nontaxable partnership interest     92,765     1,623     4,042     (4,561 )
State income taxes, net of federal benefit     —     —     15     74  
Change in valuation allowance and utilization of deferred tax assets     (2,293 )   (176 )   (4,777 )   (2,326 )
Effect of foreign income tax at various rates     1,532     118     (2,460 )   1,669  
Other     (235 )   (8 )   247     219  
   
 
 
 
 
  Total   $ 170   $ (37 ) $ (4,314 ) $ 2,502  
   
 
 
 
 

14.    GEOGRAPHIC INFORMATION

        The revenue by geographic location is presented net of eliminations for intercompany sales, and is as follows (in thousands):

 
   Predecessor
   Successor
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
 
    
    
    
    
   (Unaudited)
Service:                                    
  United States   $ 15,466   $ 1,015   $ 24,623   $ 37,254   $ 16,009   $ 19,760
  Canada     16,666     773     24,328     32,819     14,182     16,535
  Europe     4,299     323     5,173     5,648     2,480     2,762
  Central and South America     1,480     127     2,266     3,221     1,249     2,065
  Others     2,137     149     1,537     2,530     1,045     1,080
   
 
 
 
 
 
    Total service revenue     40,048     2,387     57,927     81,472     34,965     42,202

Subscriber equipment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  United States     9,515     730     14,470     24,715     6,139     12,577
  Canada     6,467     703     10,040     12,730     7,022     4,950
  Europe     313     37     1,931     4,371     1,795     3,290
  Central and South America     —     —     —     1,395     95     2,205
  Others     —     —     —     2,464     309     3,517
   
 
 
 
 
 
    Total subscriber equipment revenue     16,295     1,470     26,441     45,675     15,360     26,539
   
 
 
 
 
 
      Total revenue   $ 56,343   $ 3,857   $ 84,368   $ 127,147   $ 50,325   $ 68,741
   
 
 
 
 
 

F-38

          The long-lived assets (property and equipment and additional spare satellites) by geographic location are as follows (in thousands):

 
   December 31,
2004
   December 31,
2005
Long-lived assets:            
  United States   $ 10,862   $ 18,187
  Canada     912     561
  Europe     750     958
  Carribean     256     201
  Central and South America     —     1,353
   
 
    Total long-lived assets   $ 12,780   $ 21,260
   
 

15.    OTHER RELATED PARTY TRANSACTIONS

        Old Globalstar had a number of transactions with QUALCOMM, Loral and other affiliates. Such transactions were negotiated on an arms-length basis and Old Globalstar believed that the arrangements were no less favorable to Old Globalstar than could be obtained from unaffiliated parties. QUALCOMM and Loral's ownership interest in New Globalstar was substantially diluted upon closing of the Thermo Transaction and the settlement transactions disclosed in Note 2. After the Thermo equity transactions, the A and B rights transactions, and the subsequent QUALCOMM transaction, Loral's ownership interest in New Globalstar is less than 5% and QUALCOMM's ownership interest is approximately 6.72% as of December 31, 2005.

          On July 17, 2001, the FCC granted Old Globalstar and seven other applicants authorizations to construct, launch and operate MSS systems in the 2 GHz band, subject to strict milestone requirements. Old Globalstar entered into a non-contingent contract with SS/L for the construction of a second generation Globalstar satellite system that would operate in the 2 GHz band on July 16, 2002. On January 30, 2003, the FCC's International Bureau declared Old Globalstar's 2 GHz license to be null and void. As a result of this regulatory action on January 31, 2003, Old Globalstar instructed SS/L to stop work on the contract and requested repayment of the balance of the payment that had not been spent. SS/L did repay the balance and agreed to maintain the stop-work status of the project. In June 2004, the FCC affirmed the Bureau's decision, and Globalstar has requested reconsideration. Globalstar believes that this action by the FCC is inconsistent with the facts and the law and will ultimately be reversed.

          Subsidiaries of Loral have formed joint ventures with partners, which have executed service provider agreements granting the joint ventures exclusive rights to provide Globalstar service to users in Brazil, Mexico, and Russia. Founding service provider agreements were entered into with certain of Old Globalstar's limited partners for specific countries. These agreements were rejected in Old Globalstar's Chapter 11 Plan. The service providers continue to provide Globalstar service and several have negotiated new Satellite Services Agreements with Globalstar.

          On July 9, 2004, Globalstar issued a purchase order to QUALCOMM under the terms of previously executed commercial agreements for 40,000 QUALCOMM GSP-1600 mobile phones at a price of $26.0 million. Consistent with the terms of the commercial agreements, Globalstar paid $6.5 million (25%) against this purchase order in 2004; the remaining 75% was due upon the delivery of each unit. Delivery

F-39


of these units by QUALCOMM commenced in January 2005. The Company and QUALCOMM subsequently agreed to certain credits and discounts. As of December 31, 2005, the contract was 100% fulfilled. Also, under the terms of the commercial agreements, Globalstar has continued to place production orders with QUALCOMM for fixed user terminals, car kits and accessory items on an as required basis.

          During 2005, Globalstar issued separate purchase orders for additional phone equipment and accessories under the terms of previously executed commercial agreements to QUALCOMM that aggregate to a total commitment balance of approximately $158.0 million. Approximately $107.0 million of the $158.0 million consists of the new generation of phones and fixed user terminals, car kits and accessories which will start to be delivered in September 2006. The remaining $51.0 million consists of phones and accessories under the original commercial agreement. At June 30, 2006, 67% (unaudited) of the $51.0 million order for GSP-1600 phones and accessories, had been fulfilled and the remainder is expected to be fulfilled by the end of 2006.

          Within the terms of the commercial agreements, the Company paid Qualcomm approximately 15% to 25% of the total order as advances for inventory. As of December 31, 2004 and 2005 and June 30, 2006, total advances to QUALCOMM for inventory were $8.8 million, $13.5 million and $18.7 million (unaudited), respectively. Under the new agreements, Globalstar did not receive any additional discounts from QUALCOMM.

          The total orders placed with QUALCOMM as of December 31, 2005 and June 30, 2006 were approximately $182.1 million and $186.3 million (unaudited) with an outstanding commitment balance of approximately $136.0 million and $123.1 million (unaudited), respectively.

          In September 2005, QUALCOMM entered into a buyback arrangement with Globalstar whereby Globalstar delivered several hundred GSP-1600 phones and contracted to provide service to QUALCOMM's customers. Revenue recognized for equipment during 2005 under this arrangement was approximately $440,000 with a related cost of subscriber equipment of $314,000. Related service billings of $595,000 were recorded to deferred service revenue. Revenue from service billings are recognized based on actual usage.

F-40


Purchases from Affiliates

          Total purchases from affiliates are as follows (in thousands):

 
   Predecessor
   Successor
 
   January 1,
Through
December 4,
2003
   December 5,
Through
December 31,
2003
   Year Ended
December 31,
2004
   Year Ended
December 31,
2005
   Six Months
Ended
June 30,
2005
   Six Months
Ended
June 30,
2006
 
    
    
    
    
   (Unaudited)
QUALCOMM   $ 18,586   $ 1,425   $ 25,708   $ 49,310   $ 26,270   $ 35,641
SS/L     337     26     —     —     —     4,514
Loral     649     50     —     —     —     —
GCC(1)     2,479     —     —     —     —     —
Other affiliates     489     37     32     73     50     19
   
 
 
 
 
 
  Total(2)   $ 22,540   $ 1,538   $ 25,740   $ 49,383   $ 26,320   $ 40,174
   
 
 
 
 
 
(1)
Represents GCC purchases through May 5, 2003, the date of the GCC acquisition.

(2)
All of these entities, except QUALCOMM, ceased to be considered affiliates as of April 2004.

Revenue from Affiliates

          Total usage revenues from affiliates for the Predecessor and Successor Periods in 2003, the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006 were $2.1 million, $0.2 million, $1.3 million, $1.2 million, $0.4 million (unaudited) and $0.5 million (unaudited), respectively. Total equipment revenue from affiliates for the Predecessor and Successor Periods in 2003 was zero and for the years ended December 31, 2004 and 2005 and the six months ended June 30, 2005 and 2006 were $0.5 million, $4.2 million, $1.9 million (unaudited) and $1.8 million (unaudited), respectively.

16.    COMMITMENTS AND CONTINGENCIES

Future Minimum Lease Obligations

          Globalstar currently has several leases for facilities throughout the United States and around the world, including California, Florida, Washington D.C., Texas, Canada, Ireland, France, Venezuela, and Colombia. The leases expire on various dates through August 2015. The following table presents the future minimum lease payments (in thousands):

Years Ending December 31,
    
2006   $ 1,312
2007     903
2008     916
2009     522
2010     248
Thereafter     1,208
   
Total minimum lease payments   $ 5,109
   

F-41

          Rent expense for the Predecessor and Successor Periods in 2003 and the years ended December 31, 2004 and 2005 were approximately $3.6 million, $0.2 million, $2.1 million, and $1.5 million, respectively. Rent expense for the six months ended June 30, 2006 was $0.7 million (unaudited).

Litigation

          From time to time, the Company is involved in various litigation matters involving ordinary and routine claims incidental to our business. Management currently believes that the outcome of these proceedings, either individually or in the aggregate, will not have a material adverse effect on the Company's business, results of operations or financial condition. The Company is involved in certain litigation matters as discussed below.

          Advanced Metering and Technologies Inc. ("AMT") filed with the Bankruptcy Court on April 24, 2003 a motion asking the Bankruptcy Court to reconsider its approval of the Loral Settlement. The Bankruptcy Court denied AMT's motion for reconsideration on May 30, 2003, and thereafter on June 9, 2003, AMT filed a notice of appeal of the Bankruptcy Court's order approving the Loral Settlement. Globalstar believes that AMT's appeal is without merit and will ultimately be denied, although no assurance can be given in this regard or as to what relief, if any, might be granted in the event AMT were to be successful on appeal.

          In December 2004, a female employee of Globalstar lodged a complaint of sexual harassment against a male employee. Both the complainant and the defendant filed Notices of Right to sue with the California Department of Fair Employment & Housing ("DFEH"). The Company, with the assistance of outside counsel, investigated and took certain remedial actions; however, the complainant declined to withdraw her DFEH notices. On June 2, 2005, the complainant filed a complaint against Globalstar and the male employee in Santa Clara County Superior Court seeking compensatory and punitive damages in an unspecified amount. Globalstar's insurer, XL Specialty, notified Globalstar that the Company's defense is covered by Globalstar's employee practices insurance and assigned its counsel to defend the Company. The defendant male employee has joined in the defense. The policy has a $100,000 per claim retention amount, which the litigation has exceeded. The parties unsuccessfully attempted to mediate in August 2005.

          On May 26, 2005, Loral/QUALCOMM Satellite Services, L.P., et al. ("Loral"), filed a motion for an order in its Delaware bankruptcy case under Rule 2004 seeking to compel Globalstar and certain affiliates and individuals to produce documents and appear for oral examination. Globalstar answered and filed a motion in the same court for declaratory judgment. Loral's motion was denied, and the declaratory judgment proceeding remains pending. The matter involves Globalstar's management of Government Services, LLC ("GSLLC"), in which Loral holds a 25 percent minority interest, and alleged breach of fiduciary duty by the directors of GSLLC. Loral and Globalstar have exchanged documents requested in discovery and depositions are scheduled for March 2006. Globalstar and its counsel believe that Loral's allegations are without merit; however, if Loral prevails on the declaratory judgment motion, then Globalstar could be ordered to pay Loral an unspecified amount of compensation and/or damages. Globalstar has filed a motion for partial summary judgment which, if granted, would substantially narrow Globalstar's potential liability. Globalstar has notified its insurance carrier of the case, and the insurance carrier has reserved all rights. Accordingly, Globalstar does not yet know whether any damages awarded would be covered by insurance. The parties have been meeting to assess the value of the business and potentially settle the matter.

F-42


Launch Costs

          On September 19, 2005, Globalstar executed a contract for approximately 59.0 million Euros ($72.0 million at December 31, 2005) for two launches of four satellites each. The contract also provides for a compatibility and feasibility study. As of December 31, 2005, Globalstar had made payments of approximately $122,000. Globalstar has authorized the vendor to proceed with both launches. Total payments under the contract will be paid by April 2007 and will be recorded as an increase to spare satellites and launch costs as such amounts are invoiced or become due under the terms of the contract.

Arbitration

          On January 13, 2006, Elsacom N.V., an independent gateway operator whose territories include portions of Central and Eastern Europe and North Africa, served us with a notice of arbitration pursuant to a dispute resolution provision in its Satellite Services Agreement. The dispute stems from our decision in Fall 2005 to realign coverage of the two gateways serving Western and Central Europe. Elsacom has not specified the amount of damages that it is seeking. Elsacom asserts that the realignment diminishes its rights under its Satellite Services Agreement. We disagree and intend to defend our decision vigorously. The arbitration is scheduled to be held in January 2007.

17.    SIX MONTHS 2006 EVENTS (UNAUDITED)

Globalstar Americas Telecommunications, LTD

          Effective January 1, 2006, the Company consummated an agreement dated December 30, 2005 to purchase all of the issued and outstanding stock of Globalstar Americas Holding (GAH), Globalstar Americas Telecommunications (GAT), and Astral Technologies Investment Limited (Astral), collectively, the "GA Companies." The GA Companies own assets, contract rights, and licenses necessary and sufficient to operate a satellite communications business in Panama, Costa Rica, Nicaragua, Honduras, El Salvador, Guatemala, and Belize (collectively, the "Territory"). The Company believes the purchase of the GA Companies will further enhance Globalstar's presence and coverage in the South America region and consolidation efforts. The stipulated purchase price for the GA Companies is $5,250,500 payable substantially 100% in Globalstar membership units or common stock. At the time of closing of the purchase of the GA Companies, the selling stockholders received 91,986 units (subsequently converted into the same number of shares of Series A redeemable common stock as explained in "Incorporation in 2006" below) of the Company. The acquisition agreement provides that if by the earlier of November 15, 2006 or 15 trading days after the redeemable common stock becomes marketable following either an initial public offering or registration pursuant to Section 12 of the Exchange Act, the per share market value of the Company's stock multiplied by the number of shares that the selling stockholders received does not equal or exceed $5.2 million, then the Company is obligated either to redeem the stock issued to the selling stockholders for $5.2 million, or pay the selling stockholders the difference between $5.2 million and the market value of the stock received on the earlier of the two dates described above. If the stock is trading at that time, the Company has the further option of paying the difference in cash or in stock valued as of the date of delivery. Accordingly, if the market value of the common stock on the earlier of those dates is $17.00 per share (the mid-point of the expected price range for the Company's initial public offering) the Company will be required either to redeem the shares issued in the transaction for $5.2 million in cash or issue approximately $3.6 million in cash or additional shares of common stock to the selling stockholders. If the Company fails either to complete its initial public offering or to register its common stock pursuant

F-43


to Section 12 and the Company does not redeem the stock for $5.2 million, the selling stockholders may rescind the transaction.

          The following table summarizes the Company's preliminary allocation of the estimated values of the assets acquired and liabilities assumed in the acquisition (in thousands):

 
   January 1, 2006
Current assets   $ 329
Property and equipment     6,655
Intangible assets     100
   
  Total assets acquired     7,084
   
Current liabilities     409
Long-term debt     287
   
  Total liabilities assumed     696
   
Net assets acquired   $ 6,388
   

          The results of operations of the GA Companies have been included in the Company's consolidated financial statements from January 1, 2006. The Company's pro forma results of operations assuming the transaction had been completed on January 1, 2005 are not material.

Incorporation in 2006

          Prior to 2006, the Company and its U.S. operating subsidiaries were limited liability companies that were treated as partnerships for U.S. tax purposes. Generally, taxable income or loss, deductions and credits of the partnership are passed through to its partners. In preparation for raising financing and meeting commitments to register Globalstar shares of common stock under the Securities Exchange Act of 1934 no later than October 2006, Globalstar elected to be taxed as a C corporation effective January 1, 2006. Effective March 17, 2006, Globalstar was converted from a limited liability company into a corporation under Delaware law. On that date, the Company's 61,947,654 issued and outstanding membership units were automatically converted into a like number of shares of common stock, its Third Amended and Restated Limited Liability Company Agreement was replaced by a Certificate of Incorporation and by Bylaws, the number of shares of stock it was authorized to issued was increased from 20,000,000 to 800,000,000, and its name was changed to Globalstar, Inc. In connection with its conversion into a corporation, the Company established three classes of $0.0001 par value common stock, Series A (300,000,000 shares authorized); Series B (20,000,000 shares authorized); and Series C (480,000,000 shares authorized). All classes of common stock have identical rights and privileges except with respect to their rights to elect directors. Series A holders can elect two directors, Series B holders can elect one director, and Series C holders can elect up to five directors. Under the applicable Delaware statute, all assets and liabilities of the limited liability company became the property of and were deemed to be assumed by the corporation.

          On January 1, 2006, Globalstar, Inc. and its U.S. operating subsidiaries began to account for income taxes pursuant to SFAS No. 109, "Accounting for Income Taxes." As a result, the Company established gross deferred tax assets and liabilities of $204.2 million and $0.1 million, respectively. The Company then reviewed these deferred tax assets for recoverability taking into consideration such factors as historical financial results, projected future taxable income and the expected timing of the reversals of existing

F-44


temporary differences. Based on management's review of these factors, the Company recorded a $182.7 million valuation allowance against its newly established gross deferred tax assets. As a result, the Company recorded a $21.4 million deferred tax benefit on January 1, 2006 related to its election to be taxed as a C corporation. Management is continuing to assess the recoverability of its gross deferred tax assets, which may result in a future adjustment to its valuation allowance.

          Pursuant to the operating agreement of Globalstar, in connection with its conversion to a Delaware corporation, Globalstar was obligated to distribute $685,848 to Thermo. This amount has been reflected as a payable to affiliates on the Company's June 30, 2006 unaudited consolidated balance sheet. This amount represents a deferred payment of interest that accrued from December 6, 2003 to April 14, 2004 on loans made by Thermo to Globalstar that were converted to equity on April 14, 2004.

Globalstar Financing Transaction

          On April 24, 2006, the Company entered into a credit agreement with Wachovia Investment Holdings, LLC, providing for a term loan, a delayed draw term loan, and a revolving credit facility totaling $200.0 million. The credit agreement was amended as of June 16, June 23 and June 30, 2006 to extend the term loan funding deadline and related dates, and to postpone the effect of certain financial covenants until the term loan is funded. The revolving credit facility will bear interest at either a base rate equal to the higher of the Federal Funds Rate plus 0.5% or the prime rate or the bank's reference rate plus an applicable margin of 2.25% to 3.0% or a LIBOR based rate equal to the LIBOR rate for the relevant period plus an applicable margin of 3.25% to 4.0% per annum. The applicable margin will depend on the applicable leverage ratio, as defined in the agreement. With respect to the term loan and delayed draw term loan, the interest rate margin will be equal to 4.00% per annum for LIBOR rate loans and 3.00% per annum for base rate loans. The term loan, delayed draw term loan and the revolving credit facility are subject to a commitment fee of 0.50%, 0.50% to 2.0% (as defined in the agreement), and 0.375% to 0.50%, respectively. These rates are subject to change pending completion of syndication efforts. All loans under the agreement mature not later than June 30, 2011. The loans are not subject to a prepayment penalty. The Company's indebtedness under the agreement is guaranteed by its principal domestic subsidiaries and is secured by a first lien on its and their property. The agreement contains covenants limiting the Company's ability to dispose of assets, change its business, merge, make acquisitions, incur indebtedness or liens, pay dividends, make investments or engage in certain transactions with its affiliates. Additionally, the agreement contains covenants requiring Globalstar to maintain certain financial and operating covenants and others that restrict capital expenditures.

          As required by the lender under the credit agreement as a condition to extending credit, the Company also executed an agreement with an affiliate of Thermo to provide Globalstar up to an additional $200.0 million of equity via an irrevocable standby purchase commitment. The irrevocable standby purchase commitment allows the Company to put up to 12,371,136 shares of its Series A common stock to Thermo Funding Company LLC at a predetermined price of approximately $16.17 per share when the Company requires additional liquidity. Thermo Funding Company may also elect to purchase the shares at any time. Minority stockholders in Globalstar who are accredited investors will be provided an opportunity to participate in the equity financing. On June 30, 2006, Thermo Funding Company purchased 927,840 shares of Series A common stock for an aggregate purchase price of $15,000,080.

          On August 16, 2006, we amended and restated the credit agreement. Among other changes, the amended and restated credit agreement reduced the committed amount of the credit facility to

F-45


$150.0 million, consisting of a $50.0 million revolving credit facility and a $100.0 million delayed draw term loan. See "Note 18. Subsequent Events (unaudited)—Amended and Restated Credit Agreement."

Litigation Settlement

          On June 26, 2006, the litigation related to the employee sexual harassment claim was settled by agreement among the plaintiff, the individual defendant, the Company and its insurer. The settlement amount was not material and was paid to the plaintiff on July 12, 2006.

18.    SUBSEQUENT EVENTS (UNAUDITED)

Equity Incentive Plan

          On July 12, 2006, the Company's board of directors adopted and a majority of our stockholders approved an Equity Incentive Plan ("Equity Plan") which will become effective upon the registration of its common stock under the Securities Act of 1933 or the Securities Exchange Act of 1934. The purpose of the Equity Plan is to make available incentives that will assist the Company in attracting, retaining and motivating employees, directors and consultants whose contributions are essential to its success. The Company may provide these incentives through the grant of stock options, stock appreciation rights, restricted stock purchase rights, restricted stock bonuses, restricted stock units, performance shares or performance units. The Plan will be administered by the compensation committee of the board of directors. The compensation committee has authorized no grants under the Plan.

          In January 2005, the Company discussed the issuance of 120,000 options to Peter Dalton prior to his joining the board. These options were issued in July 2006 (Note 3).

Amended and Restated Credit Agreement

          On August 16, 2006, the Company entered into an amended and restated credit agreement with Wachovia Investment Holdings, LLC, as administrative agent and swingline lender, and Wachovia Bank, National Association, as issuing lender, which was subsequently amended on September 29, 2006. The amended and restated credit agreement provides for a $50.0 million revolving credit facility and a $100.0 million delayed draw term loan facility. The delayed draw term loan may be drawn after January 1, 2008 and prior to August 16, 2009, but only if the Company has received aggregate net cash proceeds of $200.0 million from sales after April 24, 2006 of the Company's common stock (including sales pursuant to the irrevocable standby stock purchase agreement) prior to the draw date and if, after giving effect to the delayed draw term loan and thereafter at the end of each quarter while the delayed draw term loan is outstanding, the Company's consolidated senior secured leverage ratio does not exceed 3.5 to 1.0. The delayed draw term loan facility will be reduced in an amount equal to the sum of 50% of the net proceeds of any sales of the Company's common stock (other than sales pursuant to the irrevocable standby stock purchase agreement or the parallel offering to the Company's other stockholders who are accredited investors and net proceeds of up to $100.0 million from any other issuance of the Company's common stock after August 16, 2006), 100% of the proceeds of any additional term loans under the facility (described below) that the Company incurs prior to the draw of the delayed draw term loan, and 50% of the proceeds of certain permitted unsecured debt financing that the Company incurs prior to the draw of the delayed draw term loan. If drawn, the delayed draw term loan will be subject to prepayment in an amount equal to the sum of 50% of the net proceeds of such sales of common stock and 50% of the net proceeds of certain additional indebtedness, including any such additional term loans, that the

F-46


Company incurs subsequent to such draw. Other customary prepayment provisions also apply. In addition to the $50.0 million revolving and $100.0 million delayed draw term loan facilities, the amended and restated credit agreement permits the Company to incur additional term loans on an equally and ratably secured, pari passu basis in an aggregate amount of up to $150.0 million (plus the amount of any reduction in the delayed draw term loan facility or prepayment of the delayed draw term loan described above resulting from sales of common stock or any additional term loans) from the lenders under the credit agreement or other banks, financial institutions or investment funds approved by the Company and the administrative agent. The Company has not received any commitments for these additional term loans. These additional term loans may be incurred only if no event of default then exists, if the Company is in pro-forma compliance with all of the financial covenants of the credit agreement, and if, after giving effect thereto, the Company's consolidated total leverage ratio does not exceed 5.5 to 1.0.

          As under the initial Wachovia credit facility described in Note 17, all revolving credit loans will mature on June 30, 2010 and all term loans will mature on June 30, 2011. Revolving credit loans will bear interest at LIBOR plus 4.25% to 4.75% or the greater of the prime rate or Federal Funds rate plus 3.25% to 3.75%. The delayed draw term loan will bear interest at LIBOR plus 6.0% or the greater of the prime rate or Federal Funds rate plus 5.0%, and the delayed draw term loan facility bears an annual commitment fee of 2.0% until drawn or terminated. Additional term loans will bear interest at rates to be negotiated. The loans may be prepaid without penalty at any time.

          The amended and restated credit agreement is guaranteed and secured in the same manner as, and contains other representations, warranties, covenants and conditions essentially identical to those of, the initial Wachovia credit agreement described in Note 17.

19.    PROPOSED STOCK SPLIT

        The Company's board of directors intends to authorize a six-for-one stock split (in the form of a five shares for one share stock dividend) immediately prior to the Company's initial public offering. All references to shares of common stock and membership interests and their respective per-unit amounts in these consolidated financial statements and notes to consolidated financial statements have been restated to reflect the effect of this proposed stock split on a retroactive basis as if it had occurred on December 5, 2003.

F-47

GRAPHIC

6,500,000 Shares
Common Stock

PROSPECTUS
           , 2006

Wachovia Securities
JPMorgan
Jefferies & Company

          Until                        , 2006 (25 days after the date of this prospectus) all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to the dealers' obligation to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.


PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

          The following table sets forth the costs and expenses payable in connection with the distribution of the securities being registered. All amounts are estimated except the Securities and Exchange Commission registration fee and the NASD filing fee.

Securities and Exchange Commission registration fee   $14,397
NASD filing fee   13,955
NASDAQ Global Market listing fees   100,000
Printing and engraving expenses   125,000
Blue Sky fees and expenses   25,000
Legal fees   850,000
Accounting fees   750,000
Registrar and transfer agent fees   50,000
Director and officer liability insurance premium   750,000
Miscellaneous expenses   100,000
   
  Total   $2,778,352
   

Item 14. Indemnification of Directors and Officers.

          The registrant's certificate of incorporation provides that, to the fullest extent provided from time to time by Delaware law, the registrant (a) shall indemnify its directors and officers against judgments, fines, penalties, amounts paid in settlement and expenses incurred by them in connection with actions, suits, proceedings or claims arising out of their service to the registrant and, upon receipt of certain undertakings, shall advance expenses to them in connection with such matters and (b) may maintain insurance or make other financial arrangements on behalf of its directors and officers for any liability and expenses incurred by them, whether or not the registrant has authority to indemnify them against such liability and expenses. No arrangement made by the registrant may provide protection for a person judged liable for intentional misconduct, fraud or a knowing violation of law, unless advancement of expenses or indemnification is ordered by a court.

          The registrant intends to maintain directors' and officers' liability insurance insuring its directors and executive officers against certain liabilities arising out of their service as such to the registrant.

Item 15. Recent Sales of Unregistered Securities.

          The registrant has issued unregistered securities in the transactions described below. The number of securities issued and the per-share and per-unit prices, have not been adjusted for the six-for-one stock split and the conversion of our three series of common stock into one class of common stock to be effected immediately prior to this offering described in the prospectus included in this registration statement.

          On December 5, 2003, the registrant (then named "New Operating Globalstar LLC" or "Globalstar LLC" prior to its conversion to a Delaware corporation), pursuant to an Asset Contribution Agreement dated as of December 5, 2003 among itself, Thermo Capital Partners LLC, Globalstar Holdings LLC, Globalstar Leasing LLC, Globalstar, L.P. ("Old Globalstar") and certain subsidiaries of Old Globalstar, issued to Globalstar Holdings LLC a 91.23% membership interest in exchange for $1,000,000 in cash and assets valued at $9,400,000 and issued to Globalstar Satellite LP (then named "Thermo Satellite LP") an 8.77% membership interest in exchange for $1,000,000 in cash. At that time, Old Globalstar owned a 93.4%

II-1


membership interest in Globalstar Holdings LLC and an affiliate of Thermo Capital Partners, L.L.C. owned the remaining 6.6% membership interest. Globalstar Satellite LP was controlled by an affiliate of Thermo Capital Partners, L.L.C. Globalstar Holdings LLC had acquired the assets from Old Globalstar as a capital contribution. The issuance of these membership interests in Globalstar LLC was exempt from registration pursuant to Section 4(2) of the Securities Act of 1933 as a transaction not involving a public offering.

          On April 14, 2004, pursuant to the Asset Contribution Agreement described above, Globalstar Satellite LP converted $16,600,000 principal amount of outstanding debt of the registrant into capital, contributed or agreed to contribute a total of $24,235,357 in cash to the registrant, and transferred an 18.75% membership interest in the registrant to Old Globalstar and its subsidiaries. Simultaneously, Globalstar Holdings LLC contributed cash and certain assets to the registrant. After such transactions, the registrant was owned as follows:

Globalstar Holdings LLC   19.66 %
Globalstar Satellite LP   61.59 %
Old Globalstar and subsidiaries   18.75 %

These transactions were exempt from registration pursuant to Section 4(2) of the Securities Act as transactions not involving a public offering.

          On June 29, 2004, Old Globalstar was dissolved pursuant to its First Modified Fourth Amended Joint Plan under Chapter 11 of the Bankruptcy Code and its 18.75% interest (represented by 1,875,000 membership units) was distributed to its unsecured creditors. This transaction was exempt from registration pursuant to Section 1145 of the Bankruptcy Code because the transaction was authorized by a plan of liquidition approved by the bankruptcy court.

          Pursuant to a rights offering completed on October 12, 2004, the registrant sold 1,512,000 membership units to unsecured creditors of Old Globalstar at a price of $8,000,000 in cash and an additional 46,782 membership units to certain of such creditors at a price of $749,000 in cash. Such sales were required by Old Globalstar's bankruptcy plan and were exempt from registration pursuant to Section 1145(a)(2) of the Bankruptcy Code because the transaction was authorized by a plan of liquidition approved by the bankruptcy court.

          In October 2004, the registrant and QUALCOMM Incorporated agreed that QUALCOMM would provide mobile phones and various accessories valued at $7,200,000 to the registrant in exchange for $1,875,000 in cash and 309,278 membership units. The issuance of these membership units was exempt from registration under Section 4(2) of the Securities Act as a transaction not involving a public offering. QUALCOMM Incorporated was not affiliated with the registrant prior to this transaction.

          Effective January 1, 2006, the registrant purchased the stock of three companies which owned and operated a satellite communications business in Central America. These companies also owned five acres of real property in Nicaragua not used directly in the telecommunications business. At the time of the closing, the selling stockholders received 15,331 units (subsequently converted into the same number of shares of Series A common stock in connection with the registrant's conversion to a corporation) of the registrant with a value of approximately $5.2 million. The acquisition agreement provides that if by the earlier of November 15, 2006 or 15 trading days after the common stock becomes marketable following either an initial public offering or registration pursuant to Section 12 of the Exchange Act, the per share market value of the registrant's stock multiplied by the number of shares that the selling stockholders received does not equal or exceed $5.2 million, then the registrant is obligated either to redeem the stock issued to the selling stockholders for $5.2 million, or pay the selling stockholders the difference between $5.2 million and the market value of the stock received on the earlier of the two dates described above. If the stock is trading at that time, the registrant has the further option of paying the difference in cash or in stock valued as of the date of delivery. If the registrant fails either to complete its initial public offering or to register its common stock pursuant to Section 12, and the registrant does not redeem the stock for

II-2


$5.2 million, the selling stockholders may rescind the transaction. The issuance of this common stock was exempt from registration under Section 4(2) of the Securities Act as a transaction not involving a public offering. The owners of the three companies who received the registrant's stock represented that they were sophisticated individuals, were acquiring the stock for investment and not for resale, had received adequate information concerning the registrant and were able to bear the risk of investing in the registrant's stock. All such individuals reside outside the United States and none is affiliated with the registrant.

          On March 17, 2006, the registrant was converted into a Delaware corporation named Globalstar, Inc. In connection with the conversion, all outstanding membership units of the registrant were converted into shares of common stock. The issuance of this common stock was exempt from registration under Section 2(3) of the Securities Act because it did not involve any sale of securities or any investment decision. The conversion was approved by the board of managers of the registrant (without a vote of the members of the registrant) under authority granted to the board of managers in the registrant's operating agreement. The members had no right to approve, reject or opt out of the conversion, made no investment decision and provided no additional consideration with respect to the conversion.

          On April 24, 2006, the registrant entered into an irrevocable standby stock purchase agreement with Thermo Funding Company LLC, an affiliate of the registrant, pursuant to which the latter agreed to purchase up to 2,061,896 shares of common stock at a price of $97 per share. Thermo Funding Company purchased 154,640 of such shares on June 30, 2006 for an aggregate purchase price of $15,000,080. The standby stock purchase agreement was required by the lender as a condition to entering into the registrant's credit agreement. The sale of these shares was exempt from registration under Section 4(2) of the Securities Act.

          On April 20, 2005, the registrant's board of directors approved the grant to Peter Dalton, an independent director, of an option to purchase 20,000 shares of common stock at a price of $16 per share. The option had been promised to Mr. Dalton (who joined the board in early January 2005) during the first quarter of 2005 by the registrant's Chairman, Chief Executive Officer and controlling member. The issuance of this option was, and the sale of any shares pursuant to its exercise will be, exempt from registration under Section 4(2) of the Securities Act. Mr. Dalton is a sophisticated investor, will acquire the stock for investment, has access to sufficient information concerning the registrant and is able to bear the risk of his investment. Mr. Dalton is not affiliated with the registrant other than in his capacity as a member of the registrant's board of directors.

          Except for the securities issued pursuant to Section 1145 of the Bankruptcy Code, the above-referenced securities are deemed to be restricted securities for the purposes of the Securities Act. No underwriters were involved in connection with the sale of any of the above securities.

Item 16. Exhibits and Financial Statement Schedules.


          A list of exhibits filed with this registration statement on Form S-1 is set forth in the Exhibit Index and is incorporated in this Item 16(a) by reference.

          All financial statement schedules have been omitted because the required disclosures appear in the audited financial statements included in this registration statement.

II-3


Item 17. Undertakings.

          *(f) The undersigned registrant hereby undertakes to provide to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriter to permit prompt delivery to each purchaser.

          *(h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

          *(i) The undersigned registrant hereby undertakes that:

*
Paragraph references correspond to those of Items 512 of Regulation S-K.

II-4


SIGNATURES

          Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Milpitas, California as of October 16, 2006.

    GLOBALSTAR, INC.

 
 
By:
 
/s/  Fuad Ahmad      
    Name:  Fuad Ahmad
Title:    Vice President and Chief Financial Officer

          Pursuant to the requirements of the Securities Act of 1933, this Amendment to the Registration Statement has been signed by the following persons in the capacities indicated as of October 16, 2006.

Signature
   Title

 
 
 

*
James Monroe III
 
Chairman of the Board, Chief Executive Officer
and Director
(Principal Executive Officer)

/s/  Fuad Ahmad      
*Fuad Ahmad
 
Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)

*
Peter J. Dalton
 
Director

*
James F. Lynch
 
Director

*
*Richard S. Roberts
 
Director

*By:
 
/s/  Fuad Ahmad      
Fuad Ahmad, as attorney-in-fact
 
 
 
 

II-5


EXHIBIT INDEX

Exhibit
Number
   Description
1.1   Form of Underwriting Agreement
3.1**   Form of Amended and Restated Certificate of Incorporation of Globalstar, Inc.
3.2**   Form of Amended and Restated Bylaws of Globalstar, Inc.
5.1*   Opinion of Taft, Stettinius & Hollister LLP
10.1**   Amended and Restated Credit Agreement dated as of August 16, 2006 among Globalstar, Inc., the lenders referred to therein, and Wachovia Investment Holdings, LLC, as Administrative Agent.
10.2   Second Amended and Restated Irrevocable Standby Stock Purchase Agreement dated as of August 25, 2006 among Globalstar, Inc., Wachovia Investment Holdings, LLC and Thermo Funding Company LLC, as amended through October 13, 2006.
10.3**   Escrow Agreement dated as of April 24, 2006 among Thermo Funding Company LLC, Globalstar, Inc., Wachovia Bank and UBS AG, New York Branch, as Escrow Agent.
10.4**   Globalstar, Inc. 2006 Equity Incentive Plan.
10.5+   Launch Services Agreement by and between Globalstar LLC and Starsem dated September 21, 2005.
10.6+   Satellite Products Supply Agreement by and between QUALCOMM Incorporated and New Operating Globalstar LLC dated as of April 13, 2004.
10.7+   Amendment Number 1 to Satellite Products Supply Agreement dated as of May 25, 2005.
10.8+   Amendment Number 2 to Satellite Products Supply Agreement dated as of May 25, 2005.
10.9+   Amendment Number 3 to Satellite Products Supply Agreement dated as of September 30, 2005.
10.10+   Globalstar Companies Designated Executive Incentive Compensation Memorandum dated as of June 1, 2005, effective as of November 1, 2004.
10.11**   Asset Contribution Agreement by and among Globalstar, L.P., New Operating Globalstar LLC, Thermo Capital Partners LLC and certain of their affiliates dated as of December 5, 2003.
10.12+   Agreement for Sale of Globalstar Satellite Mobile Phones entered into as of April 13, 2004 by and between QUALCOMM Incorporated and New Operating Globalstar LLC.
10.13+   First Amendment to Agreement for Sale of Globalstar Satellite Mobile Phones entered into as of October 5, 2004 by and between QUALCOMM Incorporated and Globalstar LLC.
10.14+   Contract between Globalstar Canada Satellite Co. and Richardson Electronics, Ltd. dated April 17, 2006.
10.15+   Master Agreement between Globalstar LLC and Space Systems/Loral, Inc. for Professional Services effective as of June 1, 2004.
10.16**   Amendment dated as of September 29, 2006 to Amended and Restated Credit Agreement dated as of August 16, 2006.
10.17   Authorization to Proceed letter to Alcatel Alenia Space France dated October 4, 2006.
16.1**   Letter from GHP Horwath, P.C. pursuant to Item 601(b)(16) of Regulation S-K.
21.1**   Subsidiaries of Globalstar, Inc.
23.1*   Consent of Crowe Chizek and Company LLP
23.2*   Consent of GHP Horwath, P.C.
23.3*   Consent of Taft, Stettinius & Hollister LLP (included in Exhibit 5.1)
24.1**   Power of Attorney
*
To be filed by amendment.

**
Previously filed.

+
Portions of the exhibit have been omitted pursuant to a request for confidential treatment filed with the Commission. The omitted portions of the exhibit have been filed with the Commission.



QuickLinks

TABLE OF CONTENTS
PROSPECTUS SUMMARY
Our Business
Industry
Competitive Strengths
Our Growth Strategy
Company History
Recent Developments
The Offering
Risk Factors
Summary Historical Consolidated Financial and Other Data
RISK FACTORS
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
USE OF PROCEEDS
DIVIDEND POLICY AND RESTRICTIONS
CAPITALIZATION
DILUTION
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
COMPANY HISTORY
REGULATION
MANAGEMENT
PRINCIPAL STOCKHOLDERS
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
DESCRIPTION OF CAPITAL STOCK
SHARES ELIGIBLE FOR FUTURE SALE
UNDERWRITING
LEGAL MATTERS
EXPERTS
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
WHERE YOU CAN FIND ADDITIONAL INFORMATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
GLOBALSTAR, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
GLOBALSTAR, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data)
GLOBALSTAR, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (In thousands)
GLOBALSTAR, INC. CONSOLIDATED STATEMENTS OF OWNERSHIP EQUITY (DEFICIT) (In thousands, except share data)
GLOBALSTAR, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
GLOBALSTAR, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
EXHIBIT INDEX

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 1.1


Globalstar, Inc.

Common Stock

Underwriting Agreement

                         , 2006

Wachovia Capital Markets, LLC
J.P. Morgan Securities Inc.
    As representatives of the several Underwriters
      named in Schedule I hereto,
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288

Ladies and Gentlemen:

        Globalstar, Inc., a Delaware corporation (the "Company"), proposes, subject to the terms and conditions stated herein, to issue and sell to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate of 6,500,000 shares (the "Firm Shares") and, at the election of the Underwriters, up to 975,000 additional shares (the "Optional Shares") of Common Stock ("Stock") of the Company (the Firm Shares and the Optional Shares that the Underwriters elect to purchase pursuant to Section 2 hereof being collectively called the "Shares").

        1.     The Company represents and warrants to, and agrees with, each of the Underwriters that:

2

3

4

        2.     Subject to the terms and conditions herein set forth, (a) the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at a purchase price per share of $[    ], the number of Firm Shares set forth opposite the name of such Underwriter in Schedule I hereto and (b) in the event and to the extent that the Underwriters shall exercise the election to purchase Optional Shares as provided below, the Company agrees to issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from the Company, at the purchase price per share set forth in clause (a) of this Section 2, that portion of the number of Optional Shares as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional shares) determined by multiplying such number of Optional Shares by a fraction, the numerator of which is the maximum number of Optional Shares which such Underwriter is entitled to purchase as set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Shares that all of the Underwriters are entitled to purchase hereunder.

        The Company hereby grants to the Underwriters the right to purchase at their election up to 975,000 Optional Shares, at the purchase price per share set forth in the paragraph above, for the sole purpose of covering sales of shares in excess of the number of Firm Shares, provided that the purchase price per Optional Share shall be reduced by an amount per share equal to any dividends or distributions declared by the Company and payable on the Firm Shares but not payable on the Optional Shares. Any such election to purchase Optional Shares may be exercised only by written notice from you to the Company, given within a period of 30 calendar days after the date of this Agreement, setting forth the aggregate number of Optional Shares to be purchased and the date on which such Optional Shares are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 4 hereof) or, unless you and the Company otherwise agree in writing, earlier than two or later than ten business days after the date of such notice.

        3.     Upon the authorization by you of the release of the Firm Shares, the several Underwriters propose to offer the Firm Shares for sale upon the terms and conditions set forth in the Prospectus.

5


        4.     (a) The Shares to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in such names as Wachovia Capital Markets, LLC may request upon at least 24 hours' prior notice to the Company shall be delivered by or on behalf of the Company to Wachovia Capital Markets, LLC, through the facilities of the Depository Trust Company ("DTC"), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by the Company to Wachovia Capital Markets, LLC at least 24 hours in advance. The Company will cause the certificates representing the Shares to be made available for checking and packaging at least 24 hours prior to the Time of Delivery (as defined below) with respect thereto at the office of DTC or its designated custodian (the "Designated Office"). The time and date of such delivery and payment shall be, with respect to the Firm Shares, 9:30 a.m., New York City time, on [                 ], 2006 or such other time and date as Wachovia Capital Markets, LLC and the Company may agree upon in writing, and, with respect to the Optional Shares, 9:30 a.m., New York time, on the date specified by Wachovia Capital Markets, LLC in the written notice given by Wachovia Capital Markets, LLC of the Underwriters' election to purchase such Optional Shares, or such other time and date as Wachovia Capital Markets, LLC and the Company may agree upon in writing. Such time and date for delivery of the Firm Shares is herein called the "First Time of Delivery", such time and date for delivery of the Optional Shares, if not the First Time of Delivery, is herein called the "Second Time of Delivery", and each such time and date for delivery is herein called a "Time of Delivery".

        (b)   The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 8 hereof, including the cross receipt for the Shares and any additional documents requested by the Underwriters pursuant to Section 8(n) hereof, will be delivered at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York, NY 10017 (the "Closing Location"), and the Shares will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 4:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 4, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York City are generally authorized or obligated by law or executive order to close.

        5.     The Company agrees with each of the Underwriters:

6

7

8

        6.     (a) The Company represents and agrees that, without the prior consent of Wachovia Capital Markets, LLC, it has not made and will not make any offer relating to the Shares that would constitute a "free writing prospectus" as defined in Rule 405 under the Act; each Underwriter represents and agrees that, without the prior consent of the Company and Wachovia Capital Markets, LLC, it has not made and will not make any offer relating to the Shares that would constitute a free writing prospectus; any such free writing prospectus the use of which has been consented to by the Company and Wachovia Capital Markets, LLC is listed on Schedule II(a) hereto;

        (b)   The Company has complied and will comply with the requirements of Rule 433 under the Act applicable to any Issuer Free Writing Prospectus, including timely filing with the Commission or retention where required and legending; and the Company represents that it has satisfied and agrees that it will satisfy the conditions under Rule 433 under the Act to avoid a requirement to file with the Commission any electronic road show;

        (c)   The Company agrees that if at any time following issuance of an Issuer Free Writing Prospectus any event occurred or occurs as a result of which such Issuer Free Writing Prospectus would conflict with the information in the Registration Statement, the Pricing Prospectus or the Prospectus or would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing, not misleading, the Company will give prompt notice thereof to Wachovia Capital Markets, LLC and, if requested by Wachovia Capital Markets, LLC, will prepare and furnish without charge to each Underwriter an Issuer Free Writing Prospectus or other document which will correct such conflict, statement or omission; provided, however, that this representation and warranty shall not apply to any statements or omissions in an Issuer Free Writing Prospectus made in reliance upon and in conformity with information furnished in writing to the Company by an Underwriter through Wachovia Capital Markets, LLC expressly for use therein.

        7.     The Company covenants and agrees with the several Underwriters that the Company will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the Company's counsel and accountants in connection with the registration of the Shares under the Act and all other expenses in connection with the preparation, printing, reproduction and filing of the Registration Statement, any Preliminary Prospectus, any Issuer Free Writing Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Shares; (iii) all expenses in connection with the qualification of the Shares for offering and sale under state securities laws as provided in Section 5(b) hereof, including the fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey (iv) all fees and expenses in connection with listing the Shares on NASDAQ; (v) the filing fees incident to, and the fees and disbursements of counsel for the Underwriters in connection with, any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Shares; (vi) the cost of preparing stock certificates; (vii) the cost and charges of any transfer agent or registrar; and (viii) all other costs

9


and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 9 and 12 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Shares by them, and any advertising expenses connected with any offers they may make.

        8.     The obligations of the Underwriters hereunder, as to the Shares to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company herein are, at and as of such Time of Delivery, true and correct, the condition that the Company shall have performed all of its obligations hereunder theretofore to be performed, and the following additional conditions:

10

11

12

13

        9.     (a) The Company will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, any Issuer Free Writing Prospectus or any "issuer information" filed or required to be filed pursuant to Rule 433(d) under the Act, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that the Company shall not be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by any Underwriter through Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. expressly for use therein, which information consists solely of the information contained in Section 9(e) hereof.

        (b)   Each Underwriter will indemnify and hold harmless the Company against any losses, claims, damages or liabilities to which the Company may become subject, under the Act or otherwise, insofar

14


as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus or the Prospectus, or any amendment or supplement thereto, or any Issuer Free Writing Prospectus, in reliance upon and in conformity with written information furnished to the Company by such Underwriter through Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. expressly for use therein, which information consists solely of the information contained in Section 9(e) hereof; and will reimburse the Company for any legal or other expenses reasonably incurred by the Company in connection with investigating or defending any such action or claim as such expenses are incurred.

        (c)   Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party of the commencement thereof, the indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party.

        (d)   If the indemnification provided for in this Section 9 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Shares. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering

15


(before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Underwriters on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Shares underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.

        (e)   The Underwriters confirm and the Company acknowledges that the statements with respect to the offering of the Shares by the Underwriters set forth in the fifth paragraph (other than the first sentence thereof), the ninth paragraph, the tenth paragraph, the eleventh paragraph and the twelfth paragraph in the section captioned "Underwriting" in any Preliminary Prospectus, the Pricing Prospectus and the Prospectus constitute the only information furnished in writing by or on behalf of the Underwriters for inclusion in the Registration Statement, any Preliminary Prospectus, the Pricing Prospectus, any Issuer Free Writing Prospectus or in any amendment or supplement thereto.

        (f)    The obligations of the Company under this Section 9 shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and employee of any Underwriter and to each person, if any, who controls any Underwriter within the meaning of the Act and each broker-dealer affiliate of any Underwriter; and the obligations of the Underwriters under this Section 9 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and employee of the Company (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act.

        10.   (a) If any Underwriter shall default in its obligation to purchase the Shares which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Shares on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of thirty-six hours within which to procure another party or other parties satisfactory to you to purchase such Shares on such terms. In the event that, within the respective prescribed periods, you notify the Company that you have so arranged for the purchase of such Shares, or the Company notifies you that it has so arranged for the purchase of such Shares, you or the Company shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements,

16


and the Company agrees to file promptly any amendments or supplements to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Shares.

        (b)   If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Shares which such Underwriter agreed to purchase hereunder) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

        (c)   If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by you and the Company as provided in subsection (a) above, the aggregate number of such Shares which remains unpurchased exceeds one-eleventh of the aggregate number of all the Shares to be purchased at such Time of Delivery, or if the Company shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Shares of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company to sell the Optional Shares) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company, except for the expenses to be borne by the Company and the Underwriters as provided in Section 7 hereof and the indemnity and contribution agreements in Section 9 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default.

        11.   The respective indemnities, agreements, representations, warranties and other statements of the Company and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter or any controlling person of any Underwriter, or the Company, or any officer or director or controlling person of the Company, and shall survive delivery of and payment for the Shares.

        12.   If this Agreement shall be terminated pursuant to Section 10 hereof, the Company shall not then be under any liability to any Underwriter except as provided in Sections 7 and 9 hereof; but, if for any other reason, any Shares are not delivered by or on behalf of the Company as provided herein, the Company will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Shares not so delivered, but the Company shall then be under no further liability to any Underwriter except as provided in Sections 7 and 9 hereof.

        13.   In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly.

        All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives in care of Wachovia Capital Markets, LLC, One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, Attention: [            ]; and if to the Company shall be delivered or sent by mail, telex or facsimile transmission to the address of the Company set forth in the Registration Statement, Attention: Secretary; provided, however, that any notice to an Underwriter

17


pursuant to Section 9(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company by you upon request; provided, however, that notices under subsection 5(e) shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives at Wachovia Capital Markets, LLC, One Wachovia Center, 301 South College Street, Charlotte, North Carolina 28288, Attention: [            ]. Any such statements, requests, notices or agreements shall take effect upon receipt thereof.

        14.   This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company and, to the extent provided in Sections 9 and 11 hereof, the officers and directors of the Company and each person who controls the Company or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Shares from any Underwriter shall be deemed a successor or assign by reason merely of such purchase.

        15.   Time shall be of the essence of this Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business.

        16.   The Company acknowledges and agrees that (i) the purchase and sale of the Shares pursuant to this Agreement is an arm's-length commercial transaction between the Company, on the one hand, and the several Underwriters, on the other, (ii) in connection therewith and with the process leading to such transaction each Underwriter is acting solely as a principal and not the agent or fiduciary of the Company, (iii) no Underwriter has assumed an advisory or fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby or the process leading thereto (irrespective of whether such Underwriter has advised or is currently advising the Company on other matters) or any other obligation to the Company except the obligations expressly set forth in this Agreement and (iv) the Company has consulted its own legal and financial advisors to the extent it deemed appropriate. The Company agrees that it will not claim that the Underwriters, or any of them, has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to the Company, in connection with such transaction or the process leading thereto.

        17.   This Agreement supersedes all prior agreements and understandings (whether written or oral) between the Company and the Underwriters, or any of them, with respect to the subject matter hereof.

        18.   This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

        19.   The Company and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby.

        20.   This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument.

        21.   Notwithstanding anything herein to the contrary, the Company is authorized to disclose to any persons the U.S. federal and state income tax treatment and tax structure of the potential transaction and all materials of any kind (including tax opinions and other tax analyses) provided to the Company relating to that treatment and structure, without the Underwriters imposing any limitation of any kind. However, any information relating to the tax treatment and tax structure shall remain confidential (and the foregoing sentence shall not apply) to the extent necessary to enable any person to comply with securities laws. For this purpose, "tax structure" is limited to any facts that may be relevant to that treatment.

18

        If the foregoing is in accordance with your understanding, please sign and return to us one for the Company and each of the Representatives plus one for each counsel counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement between each of the Underwriters and the Company. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof.

    Very truly yours,

 
 
Globalstar, Inc.

 
 
By:
 
     
Name:
Title:
Accepted as of the date hereof:  

Wachovia Capital Markets, LLC
 

By:
 
 
 
   
Name:
Title:		  

J.P. Morgan Securities Inc.
 

By:
 
 
 
   
Name:
Title:		  

19


SCHEDULE I

Underwriter
   Total Number of
Firm Shares to
be Purchased
   Number of
Optional
Shares to be
Purchased if
Maximum
Option
Exercised
Wachovia Capital Markets, LLC        
J.P. Morgan Securities Inc.        
Jefferies & Company, Inc.        
   
 
  Total   6,500,000   975,000
   
 


SCHEDULE II


SCHEDULE III

James Monroe III
Peter J. Dalton
James F. Lynch
Richard S. Roberts
Anthony J. Navarra
Fuad Ahmad
Megan L. Fitzgerald
Dennis C. Allen
Steven F. Bell
Robert D. Miller
William F. Adler
Paul A. Monte

ANNEX I


FORM OF LOCK-UP AGREEMENT

Globalstar, Inc.

Lock-Up Agreement

October    , 2006

Wachovia Capital Markets, LLC
J.P. Morgan Securities Inc.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288

Ladies and Gentlemen:

        The undersigned understands that you, as representatives (the "Representatives"), propose to enter into an Underwriting Agreement (the "Underwriting Agreement") on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the "Underwriters"), with Globalstar, Inc., a Delaware corporation (the "Company"), providing for a public offering (the "Offering") of the Common Stock of the Company (the "Shares") pursuant to a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission (the "SEC").

        In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 180 days after the date of the final Prospectus covering the public offering of the Shares (such 180-day period, the "Lock-Up Period"), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Undersigned's Shares").

        In addition, the undersigned agrees that, without the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc., it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock of the Company or any security convertible into or exercisable or exchangeable for the shares of Common Stock of the Company nor will it, during the Lock-Up Period, publicly disclose the intention to do any of the activities prohibited by this Lock-Up Agreement.

        The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. In addition, the foregoing restriction is expressly agreed to preclude the undersigned from entering into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Undersigned's Shares.


        Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to this paragraph) has expired.

        Notwithstanding the foregoing, the undersigned may transfer the Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. on behalf of the Underwriters. For purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is not a natural person, this Lock-Up Agreement shall not apply to the transfer by the undersigned of the Undersigned's Shares to an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition for value. Notwithstanding the preceding three sentences, no such transfer shall be permitted pursuant thereto unless (1) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the Lock-Up Period) and (2) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition. The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned's Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the Undersigned's Shares except in compliance with the foregoing restrictions.

        It is understood that, if the Company notifies you in writing that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective on or before December 15, 2006, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, the undersigned will be released from its obligations under this Lock-Up Agreement.

        The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors, and assigns.

        This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

  Very truly yours,

 
  Exact Name of Shareholder

 
  Authorized Signature

 
  Title

ANNEX II


FORM OF LOCK-UP AGREEMENT

Globalstar, Inc.

Lock-Up Agreement

October    , 2006

Wachovia Capital Markets, LLC
J.P. Morgan Securities Inc.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288

Re:
Globalstar, Inc.—Lock-Up Agreement

Ladies and Gentlemen:

        The undersigned understands that you, as representatives (the "Representatives"), propose to enter into an Underwriting Agreement (the "Underwriting Agreement") on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the "Underwriters"), with Globalstar, Inc., a Delaware corporation (the "Company"), providing for a public offering (the "Offering") of the Common Stock of the Company (the "Shares") pursuant to a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission (the "SEC").

        In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 180 days after the date of the final Prospectus covering the public offering of the Shares (such 180-day period, the "Lock-Up Period"), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC, except as described below.

        Columbia Ventures Corporation hereby represents and warrants that, as of the date of this letter, it beneficially owns 1,004,936 shares of the Company's Common Stock, of which 105,116 shares are held of record by Columbia Ventures Corporation and 899,820 shares are held of record by Bank of America Securities LLC (collectively, the "CVC Shares"). During the Lock-Up Period, Columbia Ventures Corporation may dispose of up to 30% of the CVC Shares, without restriction pursuant to this Lock-Up Agreement. The remaining 70% of the CVC Shares are referred to herein as the "Undersigned's Shares." The undersigned agrees that any such dispositions shall be made from the shares held of record by Bank of America Securities LLC upon instructions from Columbia Ventures Corporation.

        In addition, the undersigned agrees that, without the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc., it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock of the Company or any security convertible into or exercisable or exchangeable for the shares of Common Stock of the Company nor will it, during the Lock-Up Period, publicly disclose the intention to do any of the activities prohibited by this Lock-Up Agreement.


        The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. In addition, the foregoing restriction is expressly agreed to preclude the undersigned from entering into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Undersigned's Shares.

        Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to this paragraph) has expired.

        Notwithstanding the foregoing, the undersigned may transfer the Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. on behalf of the Underwriters. For purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is not a natural person, this Lock-Up Agreement shall not apply to the transfer by the undersigned of the Undersigned's Shares to an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition for value. Notwithstanding the preceding three sentences, no such transfer shall be permitted pursuant thereto unless (1) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the Lock-Up Period) and (2) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition. The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned's Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the Undersigned's Shares except in compliance with the foregoing restrictions.


        It is understood that, if the Company notifies you in writing that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective on or before December 15, 2006, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, the undersigned will be automatically released from its obligations under this Lock-Up Agreement.

        The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors, and assigns.

        This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.


 
 
Very truly yours,

 
 
    Exact Name of Beneficial Shareholder

 
 
    Authorized Signature

 
 
    Name

 
 
    Title

 
 
    Exact Name of Beneficial Shareholder

 
 
    Authorized Signature

 
 
    Title

ANNEX III


FORM OF LOCK-UP AGREEMENT

Globalstar, Inc.

Lock-Up Agreement

October    , 2006

Wachovia Capital Markets, LLC
J.P. Morgan Securities Inc.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288

Ladies and Gentlemen:

        The undersigned understands that you, as representatives (the "Representatives"), propose to enter into an Underwriting Agreement (the "Underwriting Agreement") on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the "Underwriters"), with Globalstar, Inc., a Delaware corporation (the "Company"), providing for a public offering (the "Offering") of the Common Stock of the Company (the "Shares") pursuant to a Registration Statement on Form S-1 to be filed with the Securities and Exchange Commission (the "SEC").

        In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 180 days after the date of the final Prospectus covering the public offering of the Shares (such 180-day period, the "Lock-Up Period"), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock of the Company, or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Undersigned's Shares").

        In addition, the undersigned agrees that, without the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc., it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock of the Company or any security convertible into or exercisable or exchangeable for the shares of Common Stock of the Company nor will it, during the Lock-Up Period, publicly disclose the intention to do any of the activities prohibited by this Lock-Up Agreement.

        The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. In addition, the foregoing restriction is expressly agreed to preclude the undersigned from entering into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Undersigned's Shares.


        Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to this paragraph) has expired.

        Notwithstanding the foregoing, the undersigned may transfer the Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. on behalf of the Underwriters. For purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is not a natural person, this Lock-Up Agreement shall not apply to the transfer by the undersigned of the Undersigned's Shares to an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition for value. Notwithstanding the preceding three sentences, no such transfer shall be permitted pursuant thereto unless (1) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the Lock-Up Period) and (2) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition. The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned's Shares, free and clear of all liens, encumbrances, and claims whatsoever. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the Undersigned's Shares except in compliance with the foregoing restrictions.

        It is understood that, if the Company notifies you in writing that it does not intend to proceed with the Offering, if the Underwriting Agreement does not become effective on or before December 15, 2006, or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, the undersigned will be released from its obligations under this Lock-Up Agreement.

        The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors, and assigns.

        This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.


 
Very truly yours,

 
  Exact Name of Beneficial Shareholder

 
  Authorized Signature

 
  Name

 
  Title

ANNEX IV


FORM OF LOCK-UP AGREEMENT

Globalstar, Inc.

Lock-Up Agreement

October    , 2006

Wachovia Capital Markets, LLC
J.P. Morgan Securities Inc.
c/o Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288

Ladies and Gentlemen:

        The undersigned understands that you, as representatives (the "Representatives"), propose to enter into an Underwriting Agreement (the "Underwriting Agreement") on behalf of the several Underwriters named in Schedule I to such agreement (collectively, the "Underwriters"), with Globalstar, Inc., a Delaware corporation (the "Company"), providing for a public offering (the "Offering") of the Common Stock of the Company (the "Shares") pursuant to a Registration Statement on Form S-1 filed with the Securities and Exchange Commission (the "SEC").

        In consideration of the agreement by the Underwriters to offer and sell the Shares, and of other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the undersigned agrees that, during the period beginning from the date hereof and continuing to and including the date 180 days after the date of the final Prospectus covering the public offering of the Shares (such 180-day period, the "Lock-Up Period"), the undersigned will not offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale or otherwise dispose of any shares of Common Stock of the Company (excluding any shares received in connection with the sale of the three independent gateway operators in Brazil operated by Globalstar do Brasil), or any options or warrants to purchase any shares of Common Stock of the Company, or any securities convertible into, exchangeable for or that represent the right to receive shares of Common Stock of the Company, whether now owned or hereinafter acquired, owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the SEC (collectively the "Undersigned's Shares").

        In addition, the undersigned agrees that, without the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc., it will not, during the Lock-Up Period, make any demand for the registration of the Undersigned's Shares, nor will it, during the Lock-Up Period, publicly disclose the intention to do any of the activities prohibited by this Lock-Up Agreement.

        The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned's Shares even if such Shares would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include without limitation any short sale or any purchase, sale or grant of any right (including without limitation any put or call option) with respect to any of the Undersigned's Shares or with respect to any security that includes, relates to, or derives any significant part of its value from such Shares. In addition, the foregoing restriction is expressly agreed to preclude the undersigned from entering into any swap or other derivatives transaction that transfers to another, in whole or in part, any of the economic benefits or risks of ownership of the Undersigned's Shares.


        Notwithstanding the foregoing, if (1) during the last 17 days of the Lock-Up Period, the Company issues an earnings release or material news or a material event relating to the Company occurs or (2) prior to the expiration of the Lock-Up Period, the Company announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then the restrictions imposed by this letter shall continue to apply until the expiration of the 18-day period beginning on the date of the issuance of the earnings release or the occurrence of the material news or material event. The undersigned hereby further agrees that, prior to engaging in any transaction or taking any other action that is subject to the terms of this Lock-Up Agreement during the period from the date of this Lock-Up Agreement to and including the 34th day following the expiration of the Lock-Up Period, it will give notice thereof to the Company and will not consummate such transaction or take any such action unless it has received written confirmation from the Company that the Lock-Up Period (as such may have been extended pursuant to this paragraph) has expired. The Company shall respond to any such request within one business day.

        Notwithstanding the foregoing, the undersigned may transfer the Undersigned's Shares (i) as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound in writing by the restrictions set forth herein, (ii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound in writing by the restrictions set forth herein, and provided further that any such transfer shall not involve a disposition for value, or (iii) with the prior written consent of Wachovia Capital Markets, LLC and J.P. Morgan Securities Inc. on behalf of the Underwriters. For purposes of this Lock-Up Agreement, "immediate family" shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. In addition, notwithstanding the foregoing, if the undersigned is not a natural person, this Lock-Up Agreement shall not apply to the transfer by the undersigned of the Undersigned's Shares to an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the undersigned; provided, however, that in any such case, it shall be a condition to the transfer that the transferee execute an agreement stating that the transferee is receiving and holding such capital stock subject to the provisions of this Lock-Up Agreement and there shall be no further transfer of such capital stock except in accordance with this Lock-Up Agreement, and provided further that any such transfer shall not involve a disposition for value. Notwithstanding the preceding three sentences, no such transfer shall be permitted pursuant thereto unless (1) no filing by any party (donor, donee, transferor or transferee) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), shall be required or shall be voluntarily made in connection with such transfer or distribution (other than a filing on a Form 5, Schedule 13D or Schedule 13G (or 13D-A or 13G-A) made after the expiration of the Lock-Up Period) and (2) each party (donor, donee, transferor or transferee) shall not be required by law (including without limitation the disclosure requirements of the Securities Act of 1933, as amended, and the Exchange Act) to make, and shall agree to not voluntarily make, any public announcement of the transfer or disposition. The undersigned now has, and, except as contemplated by clause (i), (ii), or (iii) above, for the duration of this Lock-Up Agreement will have, good and marketable title to the Undersigned's Shares, free and clear of all liens, encumbrances, and claims whatsoever, except for such liens, encumbrances and claims as may exist pursuant to the Indenture, dated as of November 21, 2005, by and among Loral Skynet Corporation, the Guarantors from time to time parties thereto, and The Bank of New York, as trustee and as collateral agent, relating to the 14% Senior Secured Cash/PIK Notes due 2015, and the Security Agreement, dated as of November 21, 2005, by and among Loral Skynet Corporation, the Subsidiary Grantors parties thereto, the Additional Grantors parties thereto, and The Bank of New York, as collateral agent and as trustee. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company's transfer agent and registrar against the transfer of the Undersigned's Shares except in compliance with the foregoing restrictions.

        It is understood that, (a) if the Company notifies you in writing that it does not intend to proceed with the Offering, (b) if the Underwriting Agreement does not become effective on or before December 15, 2006, (c) if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares, (d) if any of James Monroe III, Thermo Funding Company LLC, Columbia Ventures Corporation or


QUALCOMM Incorporated has been released from its obligations under its lock-up agreement with the Company or (e) if the Company, prior to the expiration of the Lock-Up Period, registers under the Securities Act any shares of Common Stock of any stockholder or files for registration of any such shares (other than on a Form S-8), the undersigned will be released from its obligations under this Lock-Up Agreement.

        The undersigned understands that the Company and the Underwriters are relying upon this Lock-Up Agreement in proceeding toward consummation of the offering. The undersigned further understands that this Lock-Up Agreement is irrevocable and shall be binding upon the undersigned's heirs, legal representatives, successors, and assigns.

        This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement. Any obligations of the undersigned shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.


 
Very truly yours,

 
  Exact Name of Beneficial Shareholder

 
  Authorized Signature

 
  Name

 
  Title



QuickLinks

Globalstar, Inc. Common Stock Underwriting Agreement
SCHEDULE I
SCHEDULE II
SCHEDULE III
FORM OF LOCK-UP AGREEMENT Globalstar, Inc. Lock-Up Agreement October , 2006
FORM OF LOCK-UP AGREEMENT Globalstar, Inc. Lock-Up Agreement October , 2006
FORM OF LOCK-UP AGREEMENT Globalstar, Inc. Lock-Up Agreement October , 2006
FORM OF LOCK-UP AGREEMENT Globalstar, Inc. Lock-Up Agreement October , 2006

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.2


SECOND AMENDED AND RESTATED IRREVOCABLE
STANDBY STOCK PURCHASE AGREEMENT
(as amended through October 13, 2006)

        This Second Amended and Restated Irrevocable Standby Stock Purchase Agreement ("Agreement") is entered into as of August 25, 2006 among Globalstar, Inc. ("Globalstar"), the Administrative Agent (as defined below) and Thermo Funding Company LLC ("Thermo").

        WHEREAS, Globalstar and certain of its subsidiaries have entered into an amended and restated credit agreement dated as of August 16, 2006 (which amended and restated a prior credit agreement among certain of the parties dated as of April 24, 2006, as further amended, restated, refinanced, replaced, supplemented or otherwise modified, the "Credit Agreement") by and among the lenders party thereto (the "Lenders") and Wachovia Investment Holdings, LLC, as administrative agent for the lenders (the "Administrative Agent") and swingline lender, and Wachovia Bank, National Association, as issuing lender;

        WHEREAS, Globalstar, the Administrative Agent and Thermo entered into an Irrevocable Standby Stock Purchase Agreement dated as of April 24, 2006 as a condition to the consummation of the transaction contemplated by the Credit Agreement;

        WHEREAS, the Irrevocable Standby Stock Purchase Agreement was amended and restated as of July 18, 2006;

        WHEREAS, Thermo is willing, upon the terms and conditions set forth in this Agreement, to purchase Common Stock from Globalstar;

        WHEREAS, the parties wish to further amend and restate the Irrevocable Standby Stock Purchase Agreement as previously amended;

        NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, Globalstar and Thermo hereby agree as follows:


ARTICLE I.
DEFINITIONS

        1.1   Incorporation of Certain Definitions by Reference.    All capitalized terms used in this Agreement without definition shall have the respective meanings assigned to them in the Credit Agreement.

        1.2   Definitions.    As used in this Agreement, the following terms shall have the following meanings:

        "Business Day" means each day that is not a Saturday, Sunday or other day on which banking institutions in New York, New York are authorized or required by law to close.

        "Commitment" means the remaining dollar amount which Thermo is required to invest in Purchased Shares pursuant to this Agreement.

        "Common Stock" means Globalstar's Series A common stock, par value $0.0001 per share, or any shares of common stock into which such Series A common stock are changed.

        "Current Stockholders" means holders of Globalstar's Series A common stock, Series B common stock or Series C common stock as of the date hereof who are accredited investors as defined in Rule 501(a) under the Securities Act of 1933, as amended.


        "Effective Registration" means a registration statement under the Securities Act that has been declared effective by the Securities and Exchange Commission and with respect to which no "stop order" has been issued.

        "Existing Shares" means any shares of Globalstar's Series A common stock, Series B common stock or Series C common stock held as of the date hereof by Thermo and each Current Stockholder which executes a separate stock purchase agreement pursuant to Section 2.5 of this Agreement or its Affiliates or any shares of common stock into which such Series A common stock, Series B common stock or Series C common stock are changed.

        "Funding Account" means account number 200032011311 of Globalstar at Wachovia Bank, National Association.

        "Initial Public Offering" means the first bona fide public offering of the Common Stock registered with the Securities and Exchange Commission, other than any such offering registered on a registration statement on Form S-4 or Form S-8.

        "Losses" means any and all losses, claims, damages, liabilities, settlement costs and expenses, including, without limitation, costs of preparation and reasonable attorneys' fees.

        "Public Sale" means any sale of Securities to the public pursuant to a public offering registered under the Securities Act or to the public through a broker or market-maker pursuant to the provisions of Rule 144 (or any successor rule) under the Securities Act.

        "SEC" means the United States Securities and Exchange Commission.


ARTICLE II.
THE COMMITMENT

        2.1   Commitment to Purchase.    Subject to the terms and conditions of this Agreement, Thermo hereby irrevocably and unconditionally agrees from time to time during the period commencing on April 24, 2006 and ending on the earliest of (a) December 31, 2011, (b) the date on which the Commitment has been reduced to zero pursuant to Section 2.2(a), and (c) the date on which all of the Obligations have been indefeasibly paid in full and the Credit Agreement and all commitments of the Lenders thereunder have been terminated (the "Commitment Period"), to purchase up to 2,061,856 shares of Common Stock at a price of $97.00 per share (the "Purchase Price") for an aggregate Purchase Price of $200,000,000. The number of shares and Purchase Price shall be adjusted proportionately to reflect any split or combination of the Common Stock or any stock dividend on the Common Stock. Any shares of Common Stock purchased pursuant to this Agreement are referred to herein as "Purchased Shares." On June 30, 2006, Thermo purchased 154,640 shares of Common Stock pursuant to the Irrevocable Standby Stock Purchase Agreement as in effect on that date; as a result thereof, on the date hereof the remaining Commitment is 1,907,216 shares of Common Stock to be purchased at an aggregate Purchase Price of $184,999,952.

        2.2   Reduction and Termination of Commitment.

                a.     Upon any purchase by Thermo of Purchased Shares pursuant to this Agreement, the Commitment shall automatically be reduced on a dollar for dollar basis by the amount paid by Thermo for such Purchased Shares.

                b.     The Commitment shall automatically be reduced to zero at the end of the Commitment Period.

                c.     At such time as the Commitment has been terminated or reduced to zero in accordance with the terms hereof, the Administrative Agent shall assign to Thermo all of the Administrative Agent's

2


rights under the Escrow Agreement (as defined below), except for any rights to indemnity or reimbursement thereunder.

        2.3   Obligation to Purchase.

                a.     Pursuant to Section 10.3 of the Credit Agreement, Globalstar is required, at all times during the term of the Credit Agreement, to maintain a minimum Liquidity of $25,000,000. Globalstar shall promptly (and in any event within five (5) Business Days after any Responsible Officer obtains knowledge thereof) provide written notice to the Administrative Agent (with a copy to Thermo) of any breach of Section 10.3 of the Credit Agreement other than any such breach which results solely from an acceleration of the Loans and the Reimbursement Obligations pursuant to Section 12.2(a) of the Credit Agreement and the exercise by the Administrative Agent of remedies which result in the payment (by set-off or otherwise) of cash, cash equivalents or marketable securities of Globalstar or any of its Subsidiaries for application to, or the reduction of, such accelerated Loans and/or Reimbursement Obligations (such notice, a "Notice of Liquidity Default"). Upon receipt of any Notice of Liquidity Default, Thermo shall purchase a number of shares of Common Stock with a purchase price equal to the greater of (x) the amount necessary to enable Globalstar to achieve a minimum Liquidity of $25,000,000 and (y) $5,000,000.

                b.     Pursuant to Section 10.4 of the Credit Agreement, Globalstar is required to maintain, as of the end of any fiscal quarter, a Forward Fixed Charge Coverage Ratio of at least 1.0 to 1.0. Pursuant to Section 8.2(c) of the Credit Agreement, Globalstar is required to deliver a Forward Fixed Charge Coverage Ratio Certificate on the first Business Day of the second fiscal month of each of fiscal quarter of Globalstar. Furthermore, pursuant to Section 8.2(a) of the Credit Agreement, Globalstar is required to deliver an Officer's Certificate at each time quarterly and annual financial statements are provided to the Administrative Agent. Globalstar hereby agrees to provide a copy of each Forward Fixed Charge Coverage Certificate and each Officer's Compliance Certificate to Thermo simultaneously with delivery to the Administrative Agent. Upon receipt of any Forward Fixed Charge Coverage Ratio Certificate or Officer's Compliance Certificate showing a Forward Fixed Charge Coverage Ratio of less than 1.0 to 1.0, Thermo shall purchase a number of shares of Common Stock with a purchase price equal to the greater of (x) the Forward Fixed Charge Coverage Ratio Cure Amount and (y) $5,000,000.

                c.     If a payment default has occurred and is continuing under Section 12.1(a) or 12.1(b) of the Credit Agreement with respect to any regularly scheduled payment of principal or interest (a "Payment Default"), Thermo shall purchase a number of shares of Common Stock with a purchase price equal to the greater of (x) the amount of such Payment Default and (y) $5,000,000.

                d.     If Globalstar has not (i) received aggregate Net Cash Proceeds from Equity Issuances of Common Stock (including any Equity Issuance pursuant to this Agreement) after April 24, 2006 and prior to November 16, 2006 of at least $100,000,000 or (ii) performed in full its obligations under Section 9.16(a) of the Credit Agreement, Thermo shall purchase a number of shares of Common Stock with a purchase price equal to the greater of (x) the amount by which $100,000,000 exceeds such Net Cash Proceeds received by Globalstar and (y) $5,000,000.

                e.     If Globalstar has not received aggregate Net Cash Proceeds from Equity Issuances of Common Stock (including any Equity Issuance pursuant to this Agreement) after April 24, 2006 and prior to July 1, 2008 of at least $100,000,000, Thermo shall purchase a number of shares of Common Stock with a purchase price equal to the greater of (x) the amount by which $100,000,000 exceeds such Net Cash Proceeds received by Globalstar and (y) $5,000,000.

                f.      If Globalstar has not received aggregate Net Cash Proceeds from Equity Issuances of Common Stock (including any Equity Issuance pursuant to this Agreement) after April 24, 2006 and prior to January 1, 2010 of at least $200,000,000, Thermo shall purchase a number of shares of

3

Common Stock with a purchase price equal to the greater of (x) the amount by which $200,000,000 exceeds such Net Cash Proceeds received by Globalstar and (y) $5,000,000.

                g.     Notwithstanding any other provision of this Agreement, in no event shall Thermo be required to purchase more than an aggregate of $200,000,000 of Common Stock pursuant to this Agreement, including the Common Stock purchased by Thermo on June 30, 2006.

                h.     If Thermo is required to purchase shares of Common Stock pursuant to Section 2.3(a),(b), (c), (d), (e) or (f), within one (1) Business Day of the determination thereof, Globalstar shall give written notice (a "Call Notice") to Thermo setting forth the number of shares of Common Stock which Thermo must purchase (a "Call").

                i.      If Globalstar fails to give a Call Notice as required by Section 2.3(h) or fails to deliver a Notice of Liquidity Default, a Forward Fixed Charge Coverage Ratio Certificate or an Officer's Compliance Certificate as required by the terms hereof, the Administrative Agent may deliver such Call Notice, Notice of Liquidity Default, Forward Fixed Charge Coverage Ratio Certificate or Officer's Compliance Certificate, as applicable. The amount of the Call specified by the Administrative Agent shall be presumptively correct, absent manifest error. In preparing any such Notice of Liquidity Default, Forward Fixed Charge Coverage Ratio Certificate or Officer's Compliance Certificate, or calculating the amount of any such Call, the Administrative Agent shall deem the aggregate amount of unrestricted cash, cash equivalents and readily marketable securities of the Credit Parties to be $0 and Globalstar shall not receive any credit for net cash proceeds from Equity Issuances of Common Stock made after the date hereof, unless in either case the Administrative Agent has satisfactory written evidence of such amount of unrestricted cash, cash equivalents and readily marketable securities or Equity Issuance on or prior to the date that is two (2) Business Days prior to the date of such Notice of Liquidity Default, Forward Fixed Charge Coverage Ratio Certificate, Officer's Compliance Certificate or Call, as applicable.

                j.      If Thermo receives a Call Notice (regardless of whether such Call Notice has been delivered by Globalstar or the Administrative Agent), Thermo hereby irrevocably and unconditionally agrees that it shall purchase shares of Common Stock in the amount set forth in the Call Notice and shall transfer immediately available funds to Globalstar by payment to the Funding Account in an amount equal to the Purchase Price for such Purchased Shares within five (5) Business Days.

                k.     If Thermo fails to pay the Purchase Price to Globalstar by payment to the Funding Account in immediately available funds within five (5) Business Days of delivery of the Call Notice, Globalstar or the Administrative Agent may give notice of a claim in such amount under the Escrow Agreement among Thermo, Globalstar, the Administrative Agent, and UBS AG, as Escrow Agent (the "Escrow Agent"), dated as of April 24, 2006 (the "Escrow Agreement"). Payment by the Escrow Agent shall not be deemed to waive any claim Thermo may have against Globalstar or the Administrative Agent for breach of this Agreement by Globalstar in connection with such Claim or otherwise; provided that the Administrative Agent shall have no liability to any party for actions taken hereunder in good faith.

                l.      If Thermo pays the Purchase Price to Globalstar by payment to the Funding Account in immediately available funds within five (5) Business Days of delivery of the Call Notice, Globalstar shall promptly notify the Escrow Agent that Thermo may withdraw escrowed funds or securities in an amount equal to the Purchase Price, subject to the limitations in the Escrow Agreement.

                m.    Upon receipt of the Purchase Price from Thermo or the Escrow Agent, Globalstar shall deliver promptly to Thermo the certificates for the Purchased Shares which Thermo is then purchasing, duly executed on behalf of Globalstar and registered in the name of Thermo or its designee, or other evidence of ownership if the Common Stock is uncertificated.

4


                n.     The failure of Globalstar to give a notice of a claim under the Escrow Agreement will not constitute an election of remedies or limit Globalstar in any manner in the enforcement of any other remedies that may be available to it.

        2.4   Thermo Option to Purchase.    Upon 10 Business Days' written notice by Thermo to Globalstar given by Thermo at any time during the Commitment Period, Thermo may elect to purchase any or all of the Common Stock subject to the Commitment by paying to the Funding Account the Purchase Price therefor in immediately available funds. Upon such payment, Globalstar shall deliver promptly to Thermo the certificates for the Purchased Shares which Thermo is then purchasing, duly executed on behalf of Globalstar and registered in the name of Thermo or its designee, or other evidence of ownership if the Common Stock is uncertificated, and Thermo may withdraw escrowed funds or securities in an amount equal to the Purchase Price, subject to the limitations in the Escrow Agreement.

        2.5   Current Stockholder Option to Purchase.    As promptly as practicable after the date of this Agreement, Globalstar shall notify the Current Stockholders of this Agreement and shall offer the Current Stockholders the option to purchase Common Stock pro rata on substantially the same terms and conditions as Thermo hereunder, with such variations as may be approved by Globalstar (the "Pro Rata Offering"). Current Stockholders shall have twenty (20) days to elect to exercise such option by executing and delivering to Thermo and Globalstar a separate stock purchase agreement in form and substance satisfactory to Thermo and Globalstar and agreeing to pay to the Funding Account as and when required by such agreement the Purchase Price for the Purchased Shares. Purchases by a Current Stockholder pursuant to the Pro Rata Offering will not reduce Thermo's Commitment.

        2.6   Restriction on Sales or Purchases.    Globalstar, Thermo, or any Current Stockholder shall not sell or purchase the Purchased Shares at any time when it would be prohibited by applicable federal or state securities laws. Any Purchased Shares acquired pursuant to this Agreement are subject to the restrictions on transfer under: (a) Article VI of this Agreement, (b) Globalstar's Certificate of Incorporation, and (c) any applicable laws. The Existing Shares of Thermo or any Current Stockholder which executes a joinder to this Agreement or a separate stock purchase agreement pursuant to Section 2.5 of this Agreement also are subject to the restrictions on transfer under Article VI of this Agreement.


ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF GLOBALSTAR

        Globalstar represents and warrants to Thermo as follows:

        3.1   Authority; Valid and Binding Agreements.    Globalstar and each of its Subsidiaries has all requisite power and authority, as applicable, to (i) own, lease, operate and encumber its properties and assets, and to carry on its respective business as presently conducted and as presently proposed to be conducted, (ii) execute and deliver this Agreement and the Escrow Agreement, (iii) issue and sell the Common Stock subject to the Commitment, and (iv) consummate the other transactions contemplated hereby and thereby. The execution, delivery and performance by Globalstar of this Agreement and the Escrow Agreement and the filing of all documents, certificates and instruments to be executed by Globalstar in connection therewith and the authorization, issuance (or reservation for issuance, as the case may be), sale and delivery of the Securities have been duly authorized by all requisite corporate action on the part of Globalstar, its board of directors and its stockholders. This Agreement and the Escrow Agreement, when each is duly executed and delivered by Globalstar, will constitute legal, valid and binding obligations of Globalstar, enforceable against Globalstar in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and general equitable principles whether in a proceeding in equity or at law.

5


        3.2   Securities.

                a.     As of the date hereof, Globalstar's authorized capital stock consists of 800 million shares of common stock, of which 300 million are shares of Common Stock, 20 million are shares of Series B Common Stock and 480 million are shares of Series C Common Stock.

                b.     Shares of duly authorized but unissued Common Stock equal to the maximum number of shares of Common Stock issuable under this Agreement will be reserved for issuance hereunder.

                c.     The outstanding shares of capital stock of Globalstar are duly authorized, validly issued, fully paid and non-assessable and are not subject to any preemptive or subscription rights except as described in Exhibit 3.2. The Purchased Shares, when issued in accordance with this Agreement, will be duly authorized, validly issued, fully paid and nonassessable.

                d.     All of the Purchased Shares, when issued and delivered in accordance with this Agreement, will be free and clear of any Liens, stock transfer, stamp, documentary and similar taxes (excluding any taxes on the income or gain of Thermo) and other charges, and Thermo will have good title thereto.

                e.     Assuming that the representations and warranties of Thermo set forth in Section 4.2 and Section 4.3 are true and complete, the offer, sale and issuance of the Purchased Shares as contemplated by this Agreement are exempt from the registration requirements of the Securities Act, and neither Globalstar nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. Globalstar is not required to make or obtain any filings, registrations, qualifications, notifications or consents or approvals of or with any Governmental Authority (including, without limitation, under the Securities Act, the Exchange Act or the Investment Company Act) in connection therewith except under state securities or "blue sky" laws, which, if required, have been made or obtained.

        3.3   Valid Issuance.    The Purchased Shares, when issued in accordance with this Agreement, will be free of restrictions on transfer other than restrictions on transfer under Globalstar's Certificate of Incorporation or Article VI hereof, under applicable state and federal securities laws or as described in the Exhibit 3.3, and will not have been issued in violation of, and will not be subject to, any preemptive or subscription rights, except as described in Exhibit 3.3.


ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF THERMO

        Thermo hereby represents and warrants to Globalstar as follows:

        4.1   Organization and Authority.    Thermo is duly organized and validly existing as a limited liability company in good standing under the laws of Colorado. Thermo has all requisite power and authority to enter into this Agreement and the Escrow Agreement and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Thermo of this Agreement and the Escrow Agreement and the consummation by Thermo of the transactions contemplated hereby and thereby have been duly authorized. This Agreement and the Escrow Agreement, when each is duly executed and delivered by Thermo will constitute legal, valid and binding obligations of Thermo, enforceable against Thermo in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and general equitable principles whether in a proceeding in equity or at law.

        4.2   Securities Act.    Thermo is acquiring the Purchased Shares for its own account for investment only and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted under the Securities Act; provided, however, that, except as provided in Article VI hereof, by making the representations herein, Thermo does not agree to hold any Common

6


Stock for any minimum or other specific term and reserves the right to dispose of the Common Stock at any time in accordance with or pursuant to a registration statement or an exemption under the Securities Act.

        4.3   Accredited Investor.    Thermo is an "accredited investor" as such term is defined in Regulation D under the Securities Act.

        4.4   Transfer or Resale.    Thermo understands that: (i) the Purchased Shares have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) Thermo shall have delivered to Globalstar an opinion of a counsel (selected by Thermo and reasonably acceptable to Globalstar), in a form reasonably acceptable to Globalstar, to the effect that the Purchased Shares may be offered for sale, sold, assigned or transferred pursuant to an exemption from registration, or (C) Thermo provides Globalstar with assurance (reasonably acceptable to Globalstar) that the Purchased Shares can be sold, assigned or transferred pursuant to Rule 144; (ii) any sale of the Purchased Shares made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale of the Purchased Shares under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; (iii) neither Globalstar nor any other Person is under any obligation to register the Purchased Shares under the Securities Act or any state securities laws or to comply with the terms and conditions of any exemption thereunder; and (iv) transfer of the Common Stock is further restricted under Article VI hereof and Globalstar's Certificate of Incorporation.

        4.5   Legends.    Thermo understands that the certificates or other instruments representing the Purchased Shares, except as set forth below, shall bear any legend as required by the "blue sky" laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

7

                The legend set forth above shall be removed and Globalstar shall issue a certificate without such legend to the holder of the Purchased Shares upon which it is stamped, unless otherwise required by state securities laws, (i) in connection with a sale, assignment or other transfer pursuant to a registration statement that is effective under the Securities Act, (ii) in connection with a sale, assignment or other transfer where such holder provides Globalstar with an opinion of a counsel selected by Thermo, in a form reasonably acceptable to Globalstar, to the effect that such sale, assignment or transfer of the Common Stock may be made without registration under the applicable requirements of the Securities Act and once sold, assigned or transferred, no further restrictive legend is required, or (iii) such holder provides Globalstar with reasonable assurance that the Common Stock can be sold, assigned or transferred pursuant to Rule 144(k) promulgated under the Securities Act.

        4.6   Experience.    Thermo is experienced in evaluating and investing in companies such as Globalstar. Thermo has substantial experience in investing in and evaluating private placement transactions of securities in companies similar to Globalstar and is capable of evaluating the risks and merits of its investment in Globalstar and has the capacity to protect its own interests.

        4.7   Receipt of Information.    Thermo understands that the Purchased Shares are subject to the terms of Globalstar's Certificate of Incorporation, a copy of which has been made available to Thermo. Thermo has had an opportunity to ask questions and receive answers from Globalstar regarding the terms and conditions of this investment and the business, management and financial affairs of Globalstar and has availed itself of such opportunity to the extent that Thermo deemed necessary to make an informed investment decision. The foregoing, however, does not limit or modify the representations and warranties of Globalstar in Article III of this Agreement or the right of Thermo to rely thereon.


ARTICLE V.
COVENANTS

        5.1   Listing.    Upon and after the occurrence of an Initial Public Offering, Globalstar shall use reasonable commercial efforts to promptly secure the listing of all of the Purchased Shares upon each national securities exchange and automated quotation system, if any, upon which the Common Stock is then listed (subject to official notice of issuance) and to maintain any such listing from time to time. Globalstar shall pay all fees and expenses in connection with satisfying its obligations under this Section 5.1. Notwithstanding any other provision of this Agreement, neither Globalstar nor any of its Subsidiaries shall have any liability to Thermo for any failure to obtain or maintain any listing of the Purchased Shares if the reason for such non-listing or delisting is not within Globalstar's control.

        5.2   Transfer Agent / Registrar Instructions.    If Thermo provides Globalstar with an opinion of counsel pursuant to Section 4.4, Globalstar shall permit the transfer of the Purchased Shares which are the subject of such opinion and promptly instruct its transfer agent / registrar to issue one or more certificates or, as the case may be, credit shares to one or more balance accounts at DTC, in such name and in such denominations as specified by Thermo.

8


ARTICLE VI.
RESTRICTIONS

        6.1   Restrictions on Sale or Hedging of the Purchased Shares and Existing Shares.    Thermo agrees that, during the period commencing on the date 31 days after Globalstar files a registration statement for an Initial Public Offering (including without limitation, the Registration Statement on Form S-1 (No. 333-135809) filed on July 17, 2006) and ending on the 180th day following the consummation of an Initial Public Offering (the "Lock-Up Period"), Thermo will not, without the prior written consent of Globalstar (i) directly or indirectly, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of any Purchased Shares or Existing Shares, or (ii) enter into any swap or any other agreement or any transaction that hedges or transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of the Purchased Shares or Existing Shares (the "Hedge Lockup"), whether any such transaction or swap described in clause (i), or (ii) above is to be settled by delivery of Common Stock, in cash or otherwise. Other than pursuant to the Hedge Lockup, the foregoing shall in no way restrict the ability of Thermo to freely transfer the Purchased Shares or the Existing Shares in accordance with applicable law and Globalstar's Certificate of Incorporation.

                Notwithstanding the foregoing, Thermo may transfer the Purchased Shares or the Existing Shares (i) as a bona fide gift or gifts, (ii) to any affiliate (as defined in Regulation C under the Securities Act) of Thermo, (iii) to any member of Thermo provided, however, that it shall be a condition to such transfer that the transferee above) execute an agreement stating that such transferee is receiving and holding such Purchased Shares or Existing Shares subject to the provisions of this Section 6.1 and shall remain subject to the restrictions in this Section 6.1, and provided further that any such transfer shall not involve a disposition for value. Globalstar agrees that if the terms of any lock-up agreement between the underwriters of an Effective Registration and any securityholders, executive officers or directors are more favorable from the perspective of such securityholder, executive officer or director than those contained in this Section 6.1, than this Section 6.1 shall be deemed amended to incorporate such terms. Further, to the extent that, during the Lock-Up Period, either (i) Globalstar releases Thermo from the restrictions of this Section 6.1 or (ii) the underwriters of any Effective Registration release securityholders with respect to which they are party to a lock-up agreement from such securityholders' obligations thereunder in full or in part, then the holders of outstanding Purchased Shares at such time shall automatically be released in all respects from their obligations related to the Purchased Shares and the Existing Shares under this Section 6.1.

                Notwithstanding anything to the contrary contained herein (including, without limitation, this Section 6.1), if (i) during the last 17 days of the Lock-Up Period, Globalstar releases earnings results or announces material news or a material event or (ii) prior to the expiration of the Lock-Up Period, Globalstar announces that it will release earnings results during the 15-day period following the last day of the Lock-Up Period, then in each such case the Lock-Up Period will be automatically extended until the expiration of the 18-day period beginning on the date of release of the earnings results or the announcement of the material news or material event, as applicable, unless Globalstar waives, in writing, such extension.


ARTICLE VII.
INDEMNIFICATION

        7.1   Indemnification.    Notwithstanding any termination of this Agreement, Globalstar agrees to indemnify, defend and hold harmless Thermo, the Administrative Agent and their respective Affiliates and controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and each of their respective officers, managers, members, partners, directors, stockholders, employees, representatives and agents (all such Persons and entities being collectively

9

referred to as the "Indemnified Parties") to the fullest extent permitted by applicable law from and against any and all Losses (including any diminution in value of the Common Stock), demands, actions, causes of action, assessments, damages, liabilities, costs or expenses, including, without limitation interest, penalties, fines, fees, deficiencies, claims of damage, court and arbitration costs and fees and disbursements of attorneys, accountants, consultants and other experts as and when incurred or sustained by any Indemnified Party (collectively, "Indemnified Claims") as a result of or arising from (a) any misrepresentation or breach of any representation or warranty made by Globalstar in this Agreement, (b) any breach of any covenant, agreement or obligation of Globalstar or the Administrative Agent contained in this Agreement, other than Indemnified Claims resulting solely from the gross negligence or willful misconduct of such Indemnified Party or Indemnified Claims solely brought against an Indemnified Party by any investor in such Indemnified Party, or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement. The rights accorded to Indemnified Parties under this Section 7.1 shall be in addition to any rights and remedies that any Indemnified Party may have at law or in equity, by separate agreement or otherwise.

        7.2   Conduct of Indemnification Proceedings.    Promptly after receipt by an Indemnified Party of notice of any Indemnified Claim or the commencement of any action or proceeding involving an Indemnified Claim under this Article VII, such Indemnified Party shall, if a claim in respect thereof is to be made against the Person from whom the indemnity is sought (the "Indemnifying Party") pursuant to Article VII, (i) notify the Indemnifying Party in writing of the Indemnified Claim or the commencement of such action or proceeding; provided, that the failure of any Indemnified Party to provide such notice shall not relieve the Indemnifying Party of its obligations under this Article VII, except to the extent the Indemnifying Party is materially and actually prejudiced thereby and shall not relieve the Indemnifying Party from any liability which it may have to any Indemnified Party otherwise than under this Article VII, and (ii) permit such Indemnifying Party to assume the defense of such claim with counsel reasonably satisfactory to the Indemnified Party; provided, however, that any Indemnified Party shall have the right to employ separate counsel and to participate in the defense of such claim, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party unless (A) the Indemnifying Party has agreed in writing to pay such fees and expenses, (B) the Indemnifying Party shall have failed to assume the defense of such claim and employ counsel reasonably satisfactory to such Indemnified Party within 15 days after receiving notice from such Indemnified Party that the Indemnified Party believes it has failed to do so, (C) in the reasonable judgment of any such Indemnified Party, based upon advice of counsel, a conflict of interest may exist between such Indemnified Party and the Indemnifying Party with respect to such claims (in which case, if the Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense of such claim on behalf of such Indemnified Party) or (D) such Indemnified Party is a defendant in an action or proceeding which is also brought against the Indemnifying Party and reasonably shall have concluded that there may be one or more legal defenses available to such Indemnified Party which are not available to the Indemnifying Party. No Indemnifying Party shall be liable for any settlement of any such claim or action effected without its written consent, which consent shall not be unreasonably withheld. In addition, without the consent of the Indemnified Party (which consent shall not be unreasonably withheld), no Indemnifying Party shall be permitted to consent to entry of any judgment with respect to, or to effect the settlement or compromise of any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the Indemnified Party is an actual or potential party to such action or claim), unless such settlement, compromise or judgment (1) includes an unconditional release of the Indemnified Party from all liability arising out of such action or claim, (2) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Party,

10


and (3) does not provide for any action on the part of any party other than the payment of money damages which is to be paid in full by the Indemnifying Party.

        7.3   Contribution.    If the indemnification provided for in Section 7.1 from the Indemnifying Party for any reason is unavailable to (other than by reason of exceptions provided therein), or is insufficient to hold harmless, an Indemnified Party hereunder in respect of any Indemnified Claim, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall contribute to the amount paid or payable by such Indemnified Party as a result of such Indemnified Claim in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party, on the one hand, and the Indemnified Party, on the other hand, in connection with the actions which resulted in such Indemnified Claim, as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. If, however, the foregoing allocation is not permitted by applicable law, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party in such proportion as is appropriate to reflect not only such relative faults but also the relative benefits of the Indemnifying Party and the Indemnified Party as well as any other relevant equitable considerations.

        The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 7.3 were determined by pro rata allocation or by any other method of allocation which does not take into account the equitable considerations referred to in the immediately preceding paragraph. The amount paid or payable by a party as a result of any Indemnified Claim referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth in Section 7.3, any legal or other fees, costs or expenses reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

        7.4   Other Indemnification.    The indemnity agreements contained herein shall be in addition to any other rights to indemnification or contribution which any Indemnified Party may have pursuant to law or contract.

        7.5   Indemnification Payments.    The indemnification and contribution required by this Article VII shall be made by periodic payments of the amount thereof during the course of any investigation or defense, as and when bills are received or any expense, loss, damage or liability is incurred; provided that if a final nonappealable determination is made that the party receiving such expense payments was not entitled to such payments pursuant to the provisions of this Article VII, then the party receiving such expense payments shall return such expense payments to the party that made such payments.


ARTICLE VIII.
MISCELLANEOUS

        8.1   Governing Law; Jurisdiction; Jury Trial.    All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any

11

suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

        8.2   Notices.    Any notices, consents, waivers or other communications required or permitted to be given hereunder must be in writing and will be deemed to have been delivered (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile, (iii) three days after being sent by U.S. certified mail, return receipt requested, or (iv) one Business Day after deposit with a nationally recognized overnight delivery service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

12

                Each party shall provide five (5) days' prior written notice to the other party of any change in address or facsimile number. If a notice provided for hereunder is delivered via facsimile, such notice shall be valid only if an original hard copy is delivered within 24 hours of the time such facsimile is delivered. Written confirmation of receipt (i) given by the recipient of such notice, consent, waiver or other communication, (ii) mechanically or electronically generated by the sender's facsimile machine containing the time, date, recipient facsimile number and an image of the first page of such transmission or (iii) provided by a courier or overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance with clause (i), (ii) or (iii) above, respectively.

        8.3   Replacement of Securities.    If any certificate or instrument evidencing any Purchased Shares is mutilated, lost, stolen or destroyed, Globalstar shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to Globalstar of such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such replacement Purchased Shares.

        8.4   Counterparts.    This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile signature.

        8.5   Headings.    The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

        8.6   Severability.    If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

        8.7   Irrevocability; Entire Agreement; Amendments.    Once executed and delivered, this Agreement shall be irrevocable by Thermo. This Agreement supersedes all other prior oral or written agreements between Thermo, Globalstar, their respective Affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement contains the entire understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither Globalstar nor Thermo makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended, waived, terminated or otherwise modified other than by an instrument in writing signed by Globalstar and Thermo, and, so long as there are any outstanding loans or commitments under the Credit Agreement, the consent of the Administrative Agent. Any amendment to this Agreement made in conformity with the provisions of this Section 8.7 shall be binding on all parties. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No consideration shall

13


be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement. Globalstar has not, directly or indirectly, made any agreements with Thermo relating to the terms or conditions of the transactions contemplated by this Agreement except as set forth in this Agreement.

        8.8   Successors and Assigns.    No party may assign this Agreement or any rights or obligations hereunder without the prior written consent of the other party, except that (i) Thermo may assign, in its sole discretion, any or all of its rights and interests, but not its obligations, under this Agreement to any of its Affiliates or to any transferee of Common Stock, other than a transferee who shall acquire such Common Stock in a Public Sale and (ii) Globalstar may grant a security interest in this agreement and its rights hereunder to the Administrative Agent to secure the obligations of Globalstar under the Credit Agreement. Subject to the preceding, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns.

        8.9   No Third Party Beneficiaries.    This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person.

        8.10   Survival.    The representations and warranties of Globalstar and Thermo contained in Article III and Article IV and the agreements and covenants set forth in Article V, Article VI, and Article VII shall survive this Agreement.

        8.11   Further Assurances.    Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

        8.12   No Strict Construction.    The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

        8.13   Remedies.    Any Person having any rights under any provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by law. Furthermore, Thermo recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to Globalstar. Thermo therefore agrees that Globalstar shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security.

        8.14   Payment Set Aside.    To the extent that Globalstar makes a payment or payments to Thermo pursuant to this Agreement or Thermo enforces or exercises its rights hereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to Globalstar, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

[SIGNATURE PAGE TO FOLLOW]

14

        IN WITNESS WHEREOF, the parties have caused their respective signature page to this Second Amended and Restated Irrevocable Standby Stock Purchase Agreement to be duly executed as of the date first written above.

    GLOBALSTAR, INC.

 
 
By:
/s/ Fuad Ahmad
      Name: Fuad Ahmad
Title: Vice President and CFO

 
 
THERMO FUNDING COMPANY LLC

 
 
By:
/s/ James Monroe III
      Name: James Monroe III
Title: Manager

 
 
WACHOVIA INVESTMENT HOLDINGS, LLC
As Administrative Agent

 
 
By:
/s/ Franklin M. Wessinger
      Name: Franklin M. Wessinger
Title: Managing Director

15



QuickLinks

SECOND AMENDED AND RESTATED IRREVOCABLE STANDBY STOCK PURCHASE AGREEMENT (as amended through October 13, 2006)
ARTICLE I. DEFINITIONS
ARTICLE II. THE COMMITMENT
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF GLOBALSTAR
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THERMO
ARTICLE V. COVENANTS
ARTICLE VI. RESTRICTIONS
ARTICLE VII. INDEMNIFICATION
ARTICLE VIII. MISCELLANEOUS

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.5


CONFIDENTIAL TREATMENT

Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the Securities and Exchange Commission pursuant to Rule 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


STARSEM LAUNCH SERVICES

AGREEMENT FOR THE LAUNCH
OF THE
GLOBALSTAR LLC SPARE SATELLITES
BY THE
SOYUZ LAUNCH SYSTEM

ONE FIRM AND ONE OPTIONAL LAUNCH SERVICES

DISTRIBUTION LIST

COMPANY
   Name
   Direction—Department
STARSEM       DE
        DT

 
 
 
 
DC

 
 
 
 
DF
GLOBALSTAR        

CHANGES

Issue
   Date
   Changes description
01   09/01/05   Issue 1—Initial release of the document

2

SIGNATURES FOR APPROVAL

GLOBALSTAR Signature
Name: P. ROSATI
Position: Contracts Manager
Date: 21 September 2005
Signature: /s/  PAUL ROSATI      		   Name: M. FITZGERALD
Position: Senior Vice-President Strategic
               Initiatives and Space Operations
Date: 21 September 2005
Signature: /s/  MEGAN FITZGERALD      

   

STARSEM
Written by:
   Verified by:
Name: C. TRASSY
Position: Legal Counsel
Date: 15 September 2005
Signature: /s/  C. TRASSY      		   Name: M. GROSHEITSCH
Position: Vice President—Missions
Date: 15 September 2005
Signature: /s/  M. GROSHEITSCH      

Quality:
 
Approved by:
Name: J-Y MOALIC
Position: Quality Manager
Date: 15 September 2005
Signature: /s/  J-Y MOALIC      		   Name: C. RISING
Position: Deputy Vice-President
Sales and Marketing
Date: 15 September 2005
Signature: /s/  CARL D. RISING      

3

LAUNCH SERVICES AGREEMENT

This Launch Services Agreement is entered into

BY AND BETWEEN

GLOBALSTAR LLC a Delaware limited liability company with principal offices located at 461 South Milpitas Blvd, Milpitas, CA 95035, U.S.A. hereinafter referred to as "GLLC",

ON THE ONE HAND,

AND

STARSEM, a company organized under the laws of France with principal offices located at 2, rue François Truffaut, 91042 Evry Cedex, France, hereinafter referred to as "STARSEM",

ON THE OTHER HAND,

4

CONTENTS

SECTION A
TERMS AND CONDITIONS

 
  
   Pages
ARTICLE 1 DEFINITIONS   7

ARTICLE 2
SUBJECT OF THE AGREEMENT
 
10

ARTICLE 3
CONTRACTUAL DOCUMENTS
 
10

ARTICLE 4
STARSEM SERVICES
 
11

ARTICLE 5
GLLC'S TECHNICAL COMMITMENTS
 
11

ARTICLE 6
LAUNCH SCHEDULE
 
12

ARTICLE 7
COORDINATION BETWEEN STARSEM AND GLLC
 
12

ARTICLE 8
REMUNERATION
 
13

ARTICLE 9
PRICE ESCALATION FORMULA
 
14

ARTICLE 10
PAYMENT FOR SERVICES
 
14

ARTICLE 11
LAUNCH SCHEDULE ADJUSTMENT
 
16

ARTICLE 12
RIGHT OF OWNERSHIP AND CUSTODY
 
18

ARTICLE 13
LAUNCH RISK GUARANTEE
 
19

ARTICLE 14
ALLOCATION OF POTENTIAL LIABILITIES AND RISKS
 
20

ARTICLE 15
INSURANCE
 
23

ARTICLE 16
OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION/ CONFIDENTIALITY / PUBLIC STATEMENTS
 
23

ARTICLE 17
PERMITS AND AUTHORIZATIONS
 
24

ARTICLE 18
TERMINATION BY GLLC
 
25

ARTICLE 19
TERMINATION BY STARSEM
 
26

ARTICLE 20
MISCELLANEOUS
 
27

ARTICLE 21
APPLICABLE LAW
 
28

ARTICLE 22
ARBITRATION
 
28

ARTICLE 23
EFFECTIVE DATE
 
28

SECTION B
APPENDICES

APPENDIX 1 STATEMENT OF WORK (SOW)—ST-GLS-SOW-01

APPENDIX 2
INTERFACE CONTROL DOCUMENT (ICD)—ST-GLS-ICD-01

5

SECTION A

TERMS AND CONDITIONS

6

ARTICLE 1    DEFINITIONS

        In this Agreement the terms set forth hereafter shall have the meaning given in this ARTICLE:

        For the purpose of the definition of Third Party and ARTICLE 14:

7

8

9

ARTICLE 2    SUBJECT OF THE AGREEMENT

        The subject of this Agreement is the performance of ONE (1) Firm Launch Services and of ONE (1) Optional Launch Services to launch the Satellite(s) supplied by GLLC at the Launch Site for the purpose of accomplishing the Launch Mission(s) in accordance with the terms and conditions of this Agreement.

ARTICLE 3    CONTRACTUAL DOCUMENTS

        3.1.    This Agreement consists of the following documents which are contractually binding between the Parties:

        3.2.    All of the Agreement documents shall be read so as to be consistent to the extent practical. In the event of any inconsistency between the above documents, the Terms and Conditions shall prevail over the Appendix 1 (SOW), and Appendix 1 (SOW) shall prevail over Appendix 2 (ICD) and Appendix 2 shall prevail over Soyuz User's Manual (ST-GTD-SUM-01—Issue 3) as modified by the Technical Note ST-GTD-NTE-01.

10


ARTICLE 4    STARSEM SERVICES

        4.1.    STARSEM shall perform the following services under the terms and conditions defined herein:

Firm Launch Services
 
   Launch Vehicle Configuration(*)
    
Firm
Launch
   Satellites
to be
Launched
  Soyuz 3-Stage
   Fairing
   Dispenser
1   Soyuz FG   S / SL   "IKAR-modified"   4
*
As defined in Appendix 1 and Appendix 2.
Optional Launch Services
 
   Launch Vehicle Configuration(*)
    
Optional
Launch
   Satellites
to be
Launched
  Soyuz 3-Stage
   Fairing
   Dispenser
2   Soyuz FG   S / SL   "IKAR-modified"   4
*
As defined in Appendix 1 and Appendix 2.

        4.2.    Launch Services, with the exception of Post-Launch Services, shall be deemed to be accomplished by STARSEM at the point of Satellite(s) separation and STARSEM shall not assume any further liability for said Launch Services, except as expressly provided in this Agreement. In the event that, for any reason whatsoever, a Launch Attempt occurs, STARSEM shall postpone the Launch in accordance with the conditions set forth in ARTICLE 11 of this Agreement.

        4.3.    STARSEM warrants that all data deliverables shall conform with the requirements of this Agreement and, all services shall be performed in a skillful and workmanlike manner and shall conform with the requirements of this Agreement and the highest professional industrial standards.

ARTICLE 5    GLLC'S TECHNICAL COMMITMENTS

        GLLC undertakes to fulfill the technical commitments set forth in this Agreement and Appendix 1 and Appendix 2, including, without any limitation, delivery of the technical information and delivery of the Satellite(s) to the Launch Site within time limits which are consistent with the Launch schedules set forth under this Agreement and in Appendix 1.

        GLLC shall promptly notify STARSEM in writing of any event that reasonably may cause a delay in the Launch schedules.

11


ARTICLE 6    LAUNCH SCHEDULE

        6.1.    Launch schedule.

        The anticipated Launch schedule for GLLC Firm and Optional Launches is the following:

Launch
Number
   Anticipated Launch Period
   Preliminary
Launch Period
Determined at:
   Launch Period
Finalized at:
Firm Launch   Launch Period = 1 March - 31 May, 2007   T0   T1

Optional Launch
 
01 June - 31 August 2007 or 01 September - 30 November 2007
 
T0
 
TOL

        STARSEM and GLLC recognize that the above Launch Periods are indicative only and shall be determined between the Parties in accordance with Paragraph 6.2 hereunder.

        6.2.    Determination of Launch Vehicle Configuration, Launch Period, Launch Slot, scheduled Launch Day and Launch Time.

ARTICLE 7    COORDINATION BETWEEN STARSEM AND GLLC

        7.1.    GLLC and STARSEM shall each designate a project Mission Manager no later than ONE (1) month following EDC.

        7.2.    All communication between the Parties concerning the Agreement and its implementation shall be made exclusively through the Mission Managers at the addresses of the Parties set forth in the Agreement.

        7.3.    The task of the Mission Managers shall be to supervise and to co-ordinate the performance of the Launch Services and of the respective technical commitments of the Parties within the Launch schedules set forth in this Agreement.

12

        7.4.    The Mission Managers shall be endowed upon their appointment by each of the Parties with sufficient powers to enable them to resolve any technical issues that may arise during the performance of this Agreement, as well as any other questions arising from its day-to-day management. Should the Mission Managers have unresolved technical issues, such issues will be escalated to the respective signatories of the SOW.

        7.5.    Either Party may replace its Mission Manager by informing the other Party in writing of such action and indicating the effective date of designation. Such notification shall be signed by an official of the respective Party who is authorized to amend this Agreement, and shall become part of this Agreement when received by the other Party.

        7.6.    STARSEM shall invite GLLC to participate in the reviews concerning the Launch Services or the Launch Vehicle(s) as defined in Appendix 1. The associated documentation shall be made available at least TEN (10) calendar days prior to the date of such reviews.

ARTICLE 8    REMUNERATION

        8.1.    The remuneration of STARSEM for the provision of the Launch Services set forth herein is as follows:

        The following table provides prices in Euro for Soyuz Firm Launch Services.

 
   Launch Vehicle Configuration(*)
    
Firm
Launch
   Launch
Services
Price (Euro)
  Soyuz 3-Stage
   Fairing
   Dispenser
1   Soyuz FG   S / SL   "IKAR-modified"   [*]
*
As defined in Appendix 1 and Appendix 2.

        The Launch Services prices indicated in the proceeding Table are inclusive of the following Preliminary Payments.

        The following table provides prices in Euro for Soyuz Optional Launch Services.

 
   Launch Vehicle Configuration(*)
    
Optional
Launch
Alternative
   Launch
Services
Price (Euro)
  Soyuz 3-Stage
   Fairing
   Dispenser
1   Soyuz FG   S / SL   "IKAR-modified"   [*]
*
As defined in Appendix 1 and Appendix 2.

        8.2    Additional Services

        The remuneration of STARSEM for the provision of any selected Additional Services shall be per the prices provided in Appendix 6 to the SOW.

        8.3    STARSEM shall pay all taxes and other duties of any French tax authority or the authority of any country where work is performed by STARSEM and/or its suppliers.

13


ARTICLE 9    PRICE ESCALATION FORMULA

        9.1.    Firm Launch Services.

        Should GLLC finalize a Launch Period with L1 established more than 6 months later than L0, the price identified in Article 8 "Remuneration" shall be subject to an adjustment of [*]% per month, calculated from L0 to L1.

        9.2.    Optional Launch Services.

        Should GLLC exercise the option and finalize a Launch Period with OL1 established more than 6 months later than OL0, the price identified in Article 8 "Remuneration" shall be subject to an adjustment of [*]% per month, calculated from OL0 to OL1.

ARTICLE 10    PAYMENT FOR SERVICES

        10.1.    Payment Plan.

 
    
   Preliminary Payments (Euro)
Due Date of Payment
For
Firm Launch
Services
   Launch Services
Payments*
(Euro)
   Compatibility /
Feasibility
Study
   Long-Lead
Items
Dispenser
[1(a)]
EDC            
T0 - L0 - 17 months            

L0 - 15 months
 
[*]
 
[*]
 
[*]

T1 = L1 - 12 months
 
 
 
 
 
 

L1 - 9 months
 
 
 
 
 
 

L1 - 6 months
 
 
 
 
 
 

L1 - 3 months
 
 
 
 
 
 

L
 
 
 
 
 
 
(*)
Launch Services Payments are calculated as a percentage of the applicable Launch Services price minus the Preliminary Payments billed to date (defined in ARTICLE 8).
T0
= Authority to Proceed with the Feasibility/Compatibility Study and Procurement of Long Lead Items. (Pending approval/activation of required U.S. ITAR licenses.)

T1
= Authority to Proceed with the Firm Launch Services or, with the Firm Launch Services and the Optional Launch Services.

L0
= First day of the Launch Period, initially agreed upon at T0

L1
= First day of the Launch Period agreed upon at T1

L
= The actual Launch Day.

14

Due Date of Payment
For Optional
Launch Services
   Payments(*) - Launch
Services - (Euro)
Option Exercised    
TOL = OL1 - 12 months   [*]
OL1 - 9 months    
OL1 - 6 months    
OL1 - 3 months    
OL    
(*)
Launch Services Payments are calculated as a percentage of the applicable Launch Services price defined in ARTICLE 8).

TOL = Authority to Proceed with the Optional Launch Services.

OL0 = First day of the Optional Launch Period, initially agreed upon at T0

OL1 = First day of the Optional Launch Period, agreed upon at TOL

OL = The actual Launch Day of the Optional Launch

        10.2.    Payment for Additional Services.

        Payment for Additional Services ordered by GLLC and associated payment plans will be provided through specific agreements detailed in Contract Change Notices (CCN). Prices for usual Additional Services are detailed in Appendix 6 to the SOW..

        10.3.    Payments terms

15

        10.4.    Late Payment.

        In the event of late payment, GLLC shall pay STARSEM interest on such late payment at the Base Rate per annum from the due date of payment up to and including the date of payment. The computation of interest for late payments shall be based on a year of 360 days.

        During any period of non-payment in excess of THIRTY (30) days, STARSEM shall be entitled to reschedule the considered Launch under Sub-paragraph 11.3.5 of ARTICLE 11 of this Agreement and to suspend any and all of its activities in preparation for the considered Launch, provided that STARSEM shall have notified GLLC of its failure to comply with its payment obligation at least FIFTEEN (15) days prior to such suspension and rescheduling.

        Any non-payment period in excess of SIXTY (60) days shall constitute GLLC's material breach of this Agreement, and STARSEM shall be entitled to terminate the concerned Launch Services pursuant to the provisions of ARTICLE 19.

        10.5.    Waiver of Deferral, Withholding or Set-off.

        Under this Article 10 and unless otherwise specified in this Agreement, GLLC irrevocably waives any right to defer, withhold or set-off by counterclaim or other legal or equitable claim or otherwise all or any part of any payment under this Agreement for any reason whatsoever. All payments due under this Agreement shall be made in their entirety and on the dates specified in this Agreement.

ARTICLE 11    LAUNCH SCHEDULE ADJUSTMENT

        11.1.    Each postponement of a Launch Period, a Launch Slot, a Launch Day or a Launch Time for whatever reason, shall be governed solely by the terms and conditions provided in this ARTICLE 11. The Parties hereto expressly waive, renounce, and exclude any and all rights and remedies that may arise at law or in equity with respect to postponements that are not stated in this ARTICLE 11 or elsewhere in this Agreement.

        11.2.    Postponements requested by GLLC.

16

        11.3.    Launch postponement by STARSEM.

17

ARTICLE 12    RIGHT OF OWNERSHIP AND CUSTODY

        12.1.    The obligations of STARSEM under this Agreement are strictly limited to the Launch Services, and GLLC acknowledges and agrees that at no time shall it have any right of ownership of, any other right in, or title to, the property that STARSEM shall use in connection with the Launch Services, or shall place at GLLC's disposal for the purpose of this Agreement, including, without limitation, the Launch Vehicles and the Launch Site. Said property shall at all times be considered to be the sole property of STARSEM.

        12.2.    STARSEM acknowledges and agrees that at no time shall it have any right of ownership, or any other right in, or title to, the property that GLLC shall use for the procurement of Launch Services and the interface test(s), including, without limitation, the Satellites and all equipment, devices and software to be provided by GLLC at the Launch Site in order to prepare the Satellites for Launch. Said property shall at all times be considered to be the sole property of GLLC.

        12.3.    At all times during the performance by the Parties of this Agreement, each Party shall be deemed to have full custody and possession of its own property.

18

ARTICLE 13    LAUNCH RISK GUARANTEE

        GLLC shall have the possibility to purchase a Soyuz Launch Risk Guarantee (LRG) Option, for any Launch Services performed under this Agreement. If this option is exercised, in the event of a Launch Failure, STARSEM shall provide a Reflight as described below. The option shall be exercised before L*- 5 months and exact terms of the policy shall be settled at that time.

        13.1.    Reflight.    

19

        13.2.    Should GLLC exercise the Reflight (LRG Option) as defined in Paragraph 13.1 above on particular Launch Services, GLLC shall have the possibility to purchase a Launch Risk Guarantee for the subsequent Launch Services; any and all other rights and remedies of GLLC being excluded whatever their nature.

ARTICLE 14    ALLOCATION OF POTENTIAL LIABILITIES AND RISKS

        14.1.    Allocation of risks for damages caused by one Party and/or its Associates to the other Party and/or its Associates, except as provided in this Agreement and/or in the case of gross negligence or willful misconduct,:

20

        14.2.    Indemnification.    

        Each Party shall take all necessary and reasonable steps to foreclose claims for loss, damage or bodily injury (including death) by any participant involved in the Launch Services activities. Each Party shall require its Associate(s) to agree to a no-fault, no-subrogation, inter-party waiver of liability and indemnity for loss, damage or bodily injury (including death) that its Associates sustain, identical to the Parties' respective undertakings under ARTICLE 14 of this Agreement.

        14.3.    Liability for damages suffered by Third Parties.    

21

        14.4.    Infringement of Industrial property rights of Third Parties.    

22

ARTICLE 15    INSURANCE

        15.1.    Third Parties Liability Insurance.    

        15.2.    Risk to the Satellite(s).    

        The Parties to this Agreement are aware that the use of Launch Vehicles involves a degree of risk to the Satellite(s). The Parties have made a deliberate, knowing allocation between them of that risk, it being their intent that GLLC, its Insurers, and Associates shall bear the risk of loss of the Satellite(s).

ARTICLE 16    OWNERSHIP OF DOCUMENTS AND WRITTEN INFORMATION/ CONFIDENTIALITY / PUBLIC STATEMENTS

        16.1.    Title to all documents, data and written information furnished to GLLC by STARSEM or its Associates during the implementation of this Agreement shall remain exclusively with STARSEM or said Associates.

        16.2.    Title to all documents, data and written information furnished to STARSEM by GLLC or its Associates during the implementation of this Agreement shall remain exclusively with GLLC or said Associates.

        16.3.    Each Party shall use the documents, data and written information supplied to it by the other Party or the other Party's Associates solely to implement and perform this Agreement and related activities.

        16.4.    To the extent necessary for the implementation of this Agreement, and in accordance with sub-paragraph 20.8, each Party shall be entitled to divulge to its own Associates the documents, data and written information received from the other Party or from the other Party's Associates in connection herewith, provided that such receiving Parties have first agreed to be bound by the nondisclosure and use restrictions of this Agreement.

        16.5.    Subject to the provisions of Paragraph 16.4 of ARTICLE 16 of this Agreement, neither Party shall divulge any document, data or written information which it receives from the other Party or the other Party's Associates, but shall protect all such documents, data and written information which is marked with an appropriate and valid proprietary legend from unauthorized disclosure except as provided herein, in the same manner as the receiving Party protects its own confidential information, provided, however, that each Party shall have the right to use and duplicate such documents, data and written information subject to the nondisclosure requirements and use restrictions provided herein.

        If the information disclosed by one Party to the other Party or by or to their respective Associates is deemed confidential by the disclosing Party or Associate and is verbal, not written, such verbal

23


confidential information shall be identified prior to disclosure as confidential and, after acceptance by and disclosure to the receiving Party, shall be reduced to writing promptly, labeled confidential, but in no event later than TWENTY (20) days thereafter, and delivered to the receiving Party in accordance with this Paragraph.

        16.6.    The obligation of the Parties to keep secret and confidential the documents and written information shall not apply to those documents and written information that:

        16.7.    The provisions of this ARTICLE 16 shall survive the completion of performance of Launch Services under this Agreement and shall remain valid, in full force and effect for a period of 5 years after the term of this Agreement for whatever reason until said documents, data and written information become part of the public domain.

        Each Party shall however be entitled to destroy documents, data and written information received from the other Party, or to return these documents, data or such written information to the other Party, at any time after Launch.

        16.8.    The Parties understand that all exchange of data and information involving GLLC, STARSEM and any and all Associates pursuant to this Agreement shall be in accordance with all national laws, rules and regulations, as applicable regarding exportation and re-exportation of technical data, including but not limited to the United States Department of State International Traffic in Arms Regulations (ITAR), the corresponding regulations of France and Russia, and the export control regulations of the United States, France and Russia. STARSEM shall inform GLLC of any specific regulations applicable to GLLC under French and / or Russian law.

        16.9.    The present Agreement and each part thereof shall be considered to be confidential by both Parties. Any disclosure of the same by one Party shall require the prior written approval of the other Party, except when disclosed to Associates or Clients. Approval shall not be unreasonably withheld or delayed.

        Each Party shall obtain the prior written approval of the other Party concerning the content and timing of news releases, articles, brochures, advertisements, speeches, and other information releases concerning the work performed or to be performed hereunder by either Party and/or its Associates.

ARTICLE 17    PERMITS AND AUTHORIZATIONS

        17.1.    The obligations of STARSEM are limited to the obligations set forth in this Agreement. GLLC shall be required to obtain all permits, authorizations, or notices of non-opposition from all national or international, public or private authorities having jurisdiction over the Satellite(s), its/their components and/or any part thereof and the Satellite(s) Mission.

24

        17.2.    GLLC and its Associates shall also be obliged to obtain all required government permits and authorizations regarding the transfer of the Satellite(s) and its/their Ancillary Equipment from the country of origin to the Launch Site, and the availability and use of Satellite(s)'s ground stations. STARSEM shall inform GLLC of any specifically required government permits and authorizations and shall assist GLLC in obtaining such documentation.

        17.3.    STARSEM agrees to assist and support GLLC and its Associates, free of charge, with any administrative matters with Russian and Kazakhstan governmental entities with respect to the importation into Russia and/or the Republic of Kazakhstan of the Satellite(s) and all equipment, devices and software to be provided by GLLC on the Launch Site in order to prepare the Satellite(s) for Launch, and related to their preservation and possible repatriation.

        17.4.    STARSEM shall assist and support GLLC and its Associates, free of charge, with any administrative matters with Russian and Kazakhstan governmental entities with respect to the entry, stay, and departure of GLLC and its Associates.

ARTICLE 18    TERMINATION BY GLLC

        18.1.    GLLC shall have the right to terminate the procurement of any particular Firm Launch Services or Optional Launch Services under this Agreement at any time prior to the Launch concerned, in accordance with the provisions of this ARTICLE. GLLC's right shall cover termination situations for reasons of convenience as well as those of delay or impossibility of performance in which one of the Parties may find themselves. Notice of termination shall be given by registered letter with acknowledgement of receipt.

        18.2.    Termination by GLLC for GLLC's convenience.    

Effective Date of Termination of
the Firm Launch Services
   Percentage of the
Terminated Firm Launch Services
Payments Billed to Date
   Percentage of the
Preliminary Payments
Billed to Date
Between EDC and on or before L0 - 12 months   [*]   [*]
Between L* - 12 and on or before L* - 9 months        
Between L* - 9 and on or before L*        
After L* - 6 months        

25

Effective Date of Termination of the
Optional Launch Services
   Percentage of the Terminated
Optional Launch Services Price
On or before TOL    
Between OL* - 12 and on or before OL* - 9 months   [*]
Between OL* - 9 and on or before OL* - 6 months    
After OL* - 6 months    

        18.3.    Termination by GLLC for cause.    

        In the event that the aggregate of all postponements by STARSEM under Sub-paragraph 11.3.1. of this Agreement should result in STARSEM delaying GLLC's considered Launch under this Agreement by more than SIX (6) months, GLLC shall have the right, within THIRTY (30) days of STARSEM's corresponding notice of postponement, to terminate the procurement of the considered Launch Services, in which case STARSEM shall refund to GLLC all payments made by GLLC for said Launch Services, within THIRTY (30) days of receipt by STARSEM of the relevant termination notice. In such an event, GLLC may be liable only for the payment of the Additional Services performed or committed by STARSEM and any late payment interest due at the effective date of termination as specified in Sub-paragraph 18.2.2 above.

        However, postponements resulting from (i) Events of Force Majeure; and/or (ii) any damage caused by GLLC and/or its Associates to the property of STARSEM and/or the property of its Associates; and/or (iii) any bodily injury (including death) caused by GLLC and/or its Associates to STARSEM and/or its Associates shall not be taken into account for the computation of the above six (6) month period.

        The rights and remedies of GLLC provided in this Agreement shall be the exclusive remedies of GLLC in the event of default or breach by STARSEM of this Agreement.

ARTICLE 19    TERMINATION BY STARSEM

        19.1.    In the event that GLLC fails to comply with its payment obligations pursuant to the payment schedule and other payment dates set forth in this Agreement, and does not pay within SEVEN (7) calendar days after the date of receipt of a written notice to that effect issued after expiry of the total NINETY (90) days period referred to in Paragraph 10.4 of ARTICLE 10, or, without prejudice to the provisions in ARTICLE 11, if the aggregate of all postponements requested by GLLC under Paragraph 11.2. of this Agreement should result in GLLC delaying a considered Launch under this Agreement by more than SIX (6) months, STARSEM shall be entitled to terminate the considered Launch Services by registered letter with acknowledgement of receipt.

        19.2.    In the event of such Termination, STARSEM shall be entitled to retain and to claim, as liquidated damages and not as penalty, the termination fees and amounts set out in Paragraph 18.2 of the Agreement.

        19.3.    In the event that GLLC does not proceed to T1, assigning a L1 date for the Firm Launch within 18 months following T0, STARSEM shall be entitled to terminate this Agreement and to retain and to claim; as liquidated damages a termination fee of FIVE percent (5%) of the Launch Services Price defined in Paragraph 8.

26

        19.4.    The rights and remedies of STARSEM provided in this Agreement shall be the exclusive remedies of STARSEM in the event of a default or breach by GLLC of this Agreement.

ARTICLE 20    MISCELLANEOUS

        20.1.    Working language.

        Any communication by one Party to the other shall be made in English.

        All communications on the Launch Site between STARSEM or its Associates and GLLC's personnel and/or that of its Associates, shall be made in English.

        20.2.    Notices.

        Unless expressly provided otherwise under this Agreement, all communications and notices to be given by one Party to the other in connection with this Agreement shall be in writing and in the language of this Agreement and shall be sent by registered mail, and if transmitted by telecopier or telegram, shall be confirmed by registered letter to the following addresses (or to such address as a Party may designate by written notice to the other Party):

STARSEM   GLLC

STARSEM
2 rue François Truffaut
91042 Evry Cedex
France
 
GLOBALSTAR LLC
461 South Milpitas Blvd
Milpitas, CA 95035
U.S.A

Attention: Cécile TRASSY
Telephone:+33 1 69 87 0122
Fax: +33 1 60 78 31 99
 
Attention: Paul ROSATI
Telephone:+1 408 933 4156
Fax: +1408 933 4943

        20.3.    Waiver.

        Waiver on the part of either STARSEM or GLLC of any term, provision, or condition of this Agreement shall only be valid if made in writing and accepted by the other Party. Said acceptance shall not obligate the Party in question to waive its rights in connection with any other previous or subsequent breaches of this Agreement.

        20.4.    Headings.

        The headings and sub-headings used in this Agreement are provided solely for convenience of reference, and shall not prevail over the content of the ARTICLES of this Agreement.

        20.5.    Assignment.

        Neither Party shall be entitled to assign all or part of its rights and obligations under this Agreement without the prior written consent of the other Party. Such consent may not be unreasonably withheld or withdrawn.

        Notwithstanding the foregoing, both Parties shall have the right subject to prior written notice to be received by the other Party THIRTY (30) calendar days in advance, to assign all its rights, title and interest on and to this Agreement to a wholly-owned subsidiary, or to a qualified successor in case of merger, consolidation or reorganization or transfer of all of its assets without the other Party's prior consent, provided such successor shall not be a competitor to or comprise among its significant shareholders a competitor to the other Party.

27


        20.6.    Entire Agreement and Modifications.

        The Agreement constitutes the entire understanding between the Parties with respect to its subject and supersedes all prior and contemporaneous discussions between them. Neither Party shall be bound by the conditions, warranties, definitions, statements, or documents previous to the execution of this Agreement, unless this Agreement makes express reference thereto. Any actions and/or undertakings subsequent to the execution of this Agreement shall be made in writing and signed by duly authorized representatives of each of the Parties and shall expressly state that it is such an amendment or modification.

        20.7.    Registration of GLLC's Satellite(s).

        In accordance with the Convention on Registration of Objects Launched into Outer Space of U.N.O., GLLC shall be responsible to obtain registration of the Satellite(s).

        20.8.    Publicity / Communication.

        Any publicity, news release (including communication of any sort with the press whether direct or indirect, written or oral), public announcement or advertisement to be released by GLLC in connection with the Satellite(s) Launch(es) activities shall quote STARSEM as the Launch Services provider.

ARTICLE 21    APPLICABLE LAW

        This Agreement shall govern the relationship between the Parties as to the subject of this Agreement. To the extent the Parties have failed to address any question arising hereunder, or in the event of the need for any interpretation of any term of this Agreement, English law shall be applied to this Agreement.

ARTICLE 22    ARBITRATION

        In the event of disputes arising in connection with this Agreement, the Parties undertake to use their best efforts to reach an amicable settlement. If an amicable settlement cannot be achieved, the dispute shall be referred to the respective Chief Executive Officer of STARSEM and of GLLC, who will use their best efforts to reach an agreement acceptable to both Parties. Should an amicable settlement fail, the dispute(s) shall be finally settled under the rules of Conciliation and Arbitration of the International Chamber of Commerce (I.C.C.) in Geneva by THREE (3) arbitrators appointed in accordance with the then existing rules of the I.C.C. The Arbitration shall be conducted in the English language. The award of the Arbitrators shall be final and binding, and the execution thereof may be entered in any court having jurisdiction.

ARTICLE 23    EFFECTIVE DATE

        This Agreement shall take effect after signature by the two Parties.

Executed in Paris on the 19th of September, 2005, in TWO (2) originals.

STARSEM   GLOBALSTAR LLC

/s/  J-Y LE GALL      
 
/s/  K. ROSE      

J-Y LE GALL
 
K. ROSE

Chief Executive Officer
 
Director of Contracts

28



QuickLinks

CONFIDENTIAL TREATMENT
STARSEM LAUNCH SERVICES AGREEMENT FOR THE LAUNCH OF THE GLOBALSTAR LLC SPARE SATELLITES BY THE SOYUZ LAUNCH SYSTEM ONE FIRM AND ONE OPTIONAL LAUNCH SERVICES

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.6


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


QUALCOMM Incorporated
QUALCOMM Globalstar Satellite Products Supply Agreement
Agreement No. 04-QC/NOG-PRODSUP-001

This QUALCOMM Globalstar Satellite Products Supply Agreement ("Agreement") is entered into as of April 13, 2004 (the "Effective Date"), by and between QUALCOMM Incorporated, a Delaware corporation, ("QUALCOMM") with offices located at 5775 Morehouse Drive, San Diego, CA 92121, and New Operating Globalstar LLC, a Delaware limited liability company ("Buyer"), with offices located at 3110 Zanker Road, San Jose, CA 95134, with respect to the following facts:

        Whereas Buyer desires to purchase from QUALCOMM, and QUALCOMM desires to sell to Buyer, Product(s) for resale to Buyer's customers from time to time under Purchase Orders in accordance with this Agreement.


AGREEMENT

        NOW, THEREFORE, the parties, in consideration of the mutual promises set forth herein, agree as follows:

1.    DEFINITIONS.    Capitalized terms not defined herein shall have the meaning set forth in the QUALCOMM Supply Terms & Conditions (the "Supply Terms"), a copy of which is attached hereto as Exhibit A and incorporated herein as fully as if set forth in its entirety herein:

2.    AGREEMENT.    This Agreement, including the Supply Terms, shall apply to each and every P.O. for Product(s) issued to QUALCOMM by Buyer during the Term. Buyer may resell Product(s) and sublicense Software pursuant to the terms of this Agreement, provided that Buyer and such Distributors shall include with each Product sold or distributed a copy of the Documentation provided by QUALCOMM for such Product(s).

3.    PRICE.    The price of Product(s) shall be as set forth on Exhibits B and C hereto.

4.    LEVEL 1 SERVICE FOR TRI-MODE PORTABLE PHONES.    Buyer shall, directly or pursuant to arrangements with one (1) or more dealers in the region(s) in which the Tri-Mode Portable Phones are to be distributed, undertake such steps as are necessary and appropriate to handle Level 1 Service for the Tri-Mode Portable Phones; such Level 1 Service to be at no cost to QUALCOMM. As applicable, Level 1 Service includes the following (and any other service that is authorized in writing by QUALCOMM): replace batteries, replace cellular antennas and replace SIM card, if any. All such Level 1 Service will be performed in accordance with QUALCOMM's written instructions.

5.    TRAINING.    Subject to the availability of QUALCOMM personnel and upon written request of Buyer to QUALCOMM, QUALCOMM may provide training support to Buyer at QUALCOMM's then current standard rates at QUALCOMM's San Diego, CA facilities. Such training may consist of information regarding Product features, Level 1 Service repair procedures, and other topics as agreed to between the parties.

6.    ADDITIONAL TERMS APPLICABLE TO SATELLITE DATA MODEMS.

        6.1.    Packet Data License Required; Airtime.    Satellite Data Modems may be distributed, sold and used for (a) asynchronous data applications, and (b) Packet Data Service only on Gateways which are covered by a valid packet data software license with QUALCOMM. Buyer and its Distributors shall be responsible for obtaining Globalstar airtime and rates for the use of Satellite Data Modems.

2


        6.2.    Product Modification Restrictions.    Satellite Data Modems may be modified only as set forth in Exhibit D in the column marked "Supply Agreement," and consultation with QUALCOMM's engineering staff is required as noted thereon. Such consultation shall be provided at QUALCOMM's San Diego facility, subject to staff availability and payment at the Commercial Rates. Modifications set forth in Exhibit D in the column marked "Integration Agreement" may only be performed by an Integrator pursuant to the terms of an Integration Agreement, and any other modifications, including, without limitation, those listed in the column entitled "Not Approved" may not be performed by or on behalf of Buyer or any third party.

        6.3.    Environmental Protection.    Buyer acknowledges that the Satellite Data Modem is a circuit board module requiring environmental protection. These environmental elements include, but are not limited to, temperature variation, humidity, condensation, lightning strikes, electromagnetic radiation, corrosive agents, ESD, particulates, direct impacts, mechanical shocks and vibrations, and as such, requires Buyer or its Distributors to provide environmental protection for the Satellite Data Modem. QUALCOMM shall have no liability for Buyer's (or any subsequent purchaser's) failure to sell, distribute or use any Satellite Data Modem in such a manner that provides it an adequate enclosure or other sufficient environmental protection capabilities therefor.

        6.4.    Violation of Section is Basis for Termination.    Failure to abide by Sections 6.2 and 6.3 hereof will invalidate all of QUALCOMM's obligations under Section 10 (Warranty) and Section 15 (Indemnification) set forth in the Supply Terms, and shall be grounds for immediate termination by QUALCOMM of this Agreement and cancellation of any outstanding purchase orders, or quantities remaining thereunder, for Satellite Data Modems.

7.    ENTIRE AGREEMENT.    This Agreement, including the Supply Terms and other Exhibits attached hereto, constitutes the complete agreement between the parties relating to the subject matter hereof, and supersedes any prior or contemporaneous agreements or representations affecting such subject matter.

8.    ORDER OF PRECEDENCE.    In the event of conflict between the Supply Terms and the balance of this Agreement, including the other Exhibits hereto, the Agreement shall govern.

9.    THIRD PARTY ARRANGEMENTS.    At the written request of Buyer, QUALCOMM shall offer to any Gateway Affiliate(s) an agreement in the same form as this Agreement, provided that QUALCOMM shall have the right to include such payment terms, restrictions on the use of QUALCOMM confidential and proprietary information and restrictions on assignment as deemed appropriate by QUALCOMM in its sole discretion, which terms and restrictions may be less favorable to such Gateway Affiliate(s).

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

QUALCOMM Incorporated   New Operating Globalstar, L.L.C.

By:
 
/s/ Scott J. Becker
 
By:
 
/s/ William F. Adler
Name:   Scott J. Becker   Name:   William F. Adler
Title:   Sr. Vice President & General Manager
QUALCOMM Wireless Systems Division		   Title:   VP Legal and Regulatory

3


EXHIBIT A

QUALCOMM Supply Terms & Conditions

December 2, 2003

The terms and conditions set forth herein (the "Supply Terms") shall apply to all arrangements for the order, purchase, sale and delivery of QUALCOMM products for use in the Globalstar System, except and to the extent the agreement covering the sale thereof ("Supply Agreement") provides otherwise, and a copy hereof shall be attached to each such Supply Agreement.

1.    DEFINITIONS.    The following capitalized terms shall have the meanings set forth below:

2

2.    PURCHASE OF PRODUCT(S).    These Supply Terms are an integral part of the Supply Agreement to which they are attached and such Supply Agreement shall apply to each and every P.O. issued thereunder unless the parties expressly agree in writing that such Supply Agreement, these Supply Terms, or a particular provision thereof, does not apply, and each such P. O. shall be subject thereto. Subject to the following sentence, each P.O. accepted by QUALCOMM in writing and the applicable Supply Agreement, including these Supply Terms, shall constitute the entire agreement between Buyer and QUALCOMM with respect to the purchase, sale and delivery of the Product(s) described in such P.O. Any terms or conditions stated by QUALCOMM in any invoice or by Buyer in any P.O., acknowledgment, or otherwise, that are different from, or in addition to, such Supply Agreement, shall be of no force and effect, and no course of dealing, usage of trade, or course of performance shall be relevant to explain or modify any term expressed in the Supply Agreement.

3.
ORDERS.

        3.1    P.O. Placement by Buyer.    From time to time during the Term, Buyer may purchase Product(s) in the quantities and at the prices set forth in the applicable Supply Agreement by submitting to QUALCOMM, Attn: Wireless Systems Division Contracts Department, a P.O. stating the quantities of Product(s) which Buyer desires to purchase, method of shipment, ship-to address, invoice address, name and contract number of the applicable Supply Agreement, and the requested delivery date(s).

        3.2    P.O. Acceptance/Rejection by QUALCOMM.    QUALCOMM is not obligated to accept any P.O. from Buyer and a P.O. becomes a part of the applicable Supply Agreement in accordance with Section 2 above only after such P.O. is accepted in writing by QUALCOMM. If any P.O. is rejected by QUALCOMM, QUALCOMM will advise Buyer in writing the reasons therefor.

Buyer acknowledges that if quantities of Product(s) or components therefor are limited, orders will be accepted and filled on a "first ordered" basis.

Buyer further understands and acknowledges that QUALCOMM may reject a P.O. if Buyer's account with QUALCOMM is in arrears or if Buyer is in default under the applicable Supply Agreement.

        3.3    Cancellation of P.O. by Buyer.    If approved by QUALCOMM, Buyer may cancel any portion of an accepted P.O. covering Product(s) in QUALCOMM's inventory at the time such P.O. was accepted by QUALCOMM, subject to payment of a restocking fee calculated as [*] of the Product price (without application of any discount) relating to the cancelled portion of the P.O. If cancellation is of Products manufactured to order, Termination Charges will apply unless QUALCOMM chooses to build and retain such Products, and associated components, for inventory, in which case the restocking fee of [*] applies.

4.
RIGHT TO RESELL/OBLIGATIONS AS RESELLER.

        4.1    Appointment as Reseller.    This is a non-exclusive agreement. Buyer may resell Product(s) and sublicense Software to Distributors for further resale and sublicense pursuant to a written document containing terms and conditions equivalent to those set forth in the applicable Supply Agreement, including these Supply Terms. Buyer shall undertake all reasonable commercial efforts to enforce such terms and conditions, including termination of further sales to any Distributor which breaches such terms and conditions, and in the event such breach continues, Buyer shall, at QUALCOMM's request, assign to QUALCOMM the right to enforce any such terms and conditions.

        4.2    Customer Support.    Buyer shall bear full responsibility for providing customer support in a manner which, at a minimum, meets all legal requirements in the jurisdiction where it resells Product(s).

5.    CONFIRMATION OF TESTING.    QUALCOMM shall provide to Buyer with each delivery of Product written confirmation in QUALCOMM's standard format that the Product(s) have passed each

3


of the manufacturing and/or quality tests and been provisioned, in each case, as appropriate to such Product(s).

6.
DELIVERY; RISK OF LOSS.

        6.1    Delivery Terms.    All deliveries of Product(s) shall be made FCA (INCOTERMS 2000) to the FCA Point, and Buyer shall pay all shipping charges directly to carrier. In the absence of written shipping instructions from Buyer, QUALCOMM will select the carrier and so notify Buyer.

        6.2    Title and Risk of Loss.    Title to Product(s) (except Software, which is licensed) sold to Buyer and risk of loss or damage to Product(s) shall pass to Buyer upon QUALCOMM's delivery of such Product to the FCA Point.

        6.3    Rescheduling of Deliveries.    Deliveries may be rescheduled upon thirty (30) days written notice to other party. Delays greater than sixty (60) days shall entitle QUALCOMM to invoice and be paid as if delivery had been made when scheduled, provided QUALCOMM was prepared to ship on such date. At the request of Buyer, QUALCOMM will use reasonable commercial efforts to expedite shipments.

7.    RESTRICTED EXPORT.    Buyer acknowledges that all Products and all proprietary data, knowhow, software or other data or information ("Information") obtained from QUALCOMM are subject to United States (US) Government export control laws and accordingly their use, export and re-export, may be restricted or prohibited. Buyer, therefore, agrees not to directly or indirectly export, re-export, or cause to be exported or re-exported, any such Products, Information, or any direct product thereof, to any destination or entity prohibited or restricted under US law, unless it shall have first obtained prior written consent of the US Department of Commerce (or other applicable agency of the US Government, either in writing or as provided by applicable regulation, as the same may be amended from time to time), a copy of such consent to be provided to QUALCOMM prior to export by Buyer. Buyer agrees that no Products or Information received from QUALCOMM will be directly employed in missile technology, sensitive nuclear, or chemical biological weapons end uses or in any manner transferred to any party for any such end use. This requirement shall survive any termination or expiration of the Supply Agreement.

8.    INSPECTION; ACCEPTANCE.    Buyer shall inspect and either accept or reject Product(s) within thirty (30) days after the date of delivery to the FCA Point. If Buyer fails to effectively reject any Product in a written document delivered to QUALCOMM stating the reasons therefor within such period, Buyer shall be deemed conclusively to have accepted such Product and thereafter, Buyer's remedy for Product defects shall be limited to the applicable warranty described in Section 10. Product(s) properly rejected by Buyer in accordance with this Section 8 shall be returned in accordance with the RMA Procedures, and all shipping charges for the return and replacement of rejected Product(s), exclusive of duties and taxes, shall be paid by QUALCOMM. Any Product(s) rejected by Buyer which are determined to be NTF shall be subject to the NTF procedures set forth below.

9.
PRICE; PAYMENT TERMS.

        9.1    Price.    The price of Product(s) delivered, including any applicable discounts, shall be as set forth in the applicable Supply Agreement. All amounts stated are in U.S. Dollars. QUALCOMM's prices do not include any applicable sales, use, excise, value-added and/or withholding taxes, customs duties, fees, freight, insurance and delivery charges, or any other taxes, fees or charges. All taxes, fees, customs duties and other charges imposed in connection with the sale and delivery of Product(s) shall be timely paid directly by Buyer. In the event QUALCOMM is legally required to and actually pays any such taxes, fees, customs duties or charges, Buyer shall reimburse QUALCOMM therefor within thirty (30) days of QUALCOMM's invoice date.

4


Buyer shall have the right to request that QUALCOMM aggregate, for the purpose of qualifying for volume pricing and/or discounts, P.O.s placed by Buyer and P.O.s placed by Gateway Affiliates, Distributors, and other customers of Buyer.

        9.2    Payment Terms.    QUALCOMM's payment terms are twenty-five percent (25%) due following P.O. placement and prior to delivery, and seventy-five percent (75%) within thirty (30) days after FCA delivery, unless otherwise agreed to in writing by QUALCOMM. QUALCOMM will invoice Buyer 25% of the purchase price within one (1) business day of the P.O. acceptance date, and 75% of the purchase price within one (1) business day of the date QUALCOMM delivers to the FCA Point, on a NET 30 basis.

        9.3    Change in Payment Terms.    In the event that Buyer fails to make payments on a timely basis, QUALCOMM shall have the right to condition further deliveries under open P.O.s, and/or acceptance of additional P.O.s on Buyers payment of the full price for Product(s) covered thereby prior to delivery.

        9.4    Late Payments and Charges.    Buyer shall pay to QUALCOMM a late charge on any undisputed past due amounts at the rate of one percent (1.0%) per month or part thereof or the maximum amount permitted by law, whichever is less.

        9.5    Disputed Charges.    In the event that Buyer disputes an amount invoiced by QUALCOMM, Buyer shall promptly notify QUALCOMM in writing of the basis for such dispute, and shall pay the undisputed portion of such invoice as set forth herein.

        9.6    Payment Method.    Payment shall be made via wire transfer, unless otherwise agreed to in writing by QUALCOMM. Payment shall be in U.S. Dollars (USD) by Buyer in favor of QUALCOMM at the bank location set forth below, or such other bank location as QUALCOMM may from time to time designate in writing:

10.
WARRANTIES.

        10.1    Hardware.    QUALCOMM warrants only to Buyer that the Product(s) (excluding the Software contained therein) will (a) be free from defects in material and workmanship under normal use as permitted hereunder and (b) conform to QUALCOMM's specification for said Product(s) for the Warranty Period. QUALCOMM's entire liability and Buyer's sole remedy for breach of the above warranty shall be the return of the allegedly defective Product(s) to QUALCOMM or QUALCOMM's designated service center at Buyer's sole expense, all in accordance with the RMA Procedures, within thirty (30) days of the identification of the defect.

        10.2    Software.    QUALCOMM warrants that the Software contained in the Product(s) will be free from material programming errors that substantially impair the intended operation thereof for the Warranty Period. In the event of a breach of the above warranty that is reproducible by QUALCOMM, QUALCOMM shall use reasonable commercial efforts to provide a software work-around or correction.

        10.3    Services.    QUALCOMM warrants that any services performed pursuant to any Supply Agreement will be performed in a professional and workmanlike manner.

        10.4    Exclusions.    No warranty, express or implied, shall extend to any Software or any Product(s) which has been subjected to misuse, neglect, accident, or improper storage or installation or which has

5


been repaired, modified, or altered by anyone other than QUALCOMM or QUALCOMM's authorized representative. In addition, unless approved in writing by QUALCOMM as described in Section 11 hereof, the warranty does not extend to any Product(s) which are attached to or used with accessories, batteries, connectors, cabling or other items not provided by QUALCOMM. Product(s) are not specifically warranted to be appropriate for incorporation and use in any other product or for any use prohibited in the applicable Documentation or Supply Agreement. Buyer hereby acknowledges and agrees that it has not relied on any representations or warranties other than those expressly set forth herein. QUALCOMM MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO PRODUCT(S) OR SOFTWARE, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT, OR ANY EXPRESS OR IMPLIED WARRANTY ARISING OUT OF TRADE USAGE OR OUT OF A COURSE OF DEALING OR COURSE OF PERFORMANCE.

        10.5    Warranty Process.    In the event of an alleged defect of Product(s) covered by warranty, Buyer shall obtain an RMA Number and return the Product(s) in accordance with the RMA Procedures within thirty (30) days after the issuance of the RMA Number. If Product(s) returned by Buyer in accordance with the RMA Procedures are determined by QUALCOMM to be defective and covered by warranty, QUALCOMM shall use reasonable commercial efforts to, within thirty (30) days of receipt of Product(s), at its option, repair or replace such Product and ship such Product to Buyer at QUALCOMM's expense (excluding taxes and customs duties imposed in connection with the return of Product(s) if applicable) or, if QUALCOMM determines that it is unable to repair or replace such Product, QUALCOMM shall credit to Buyer's account the amount of the unit purchase price paid therefor. QUALCOMM shall have the right to ship as a replacement a Factory Refurbished Unit. QUALCOMM's obligation to effect the warranty remedy set forth herein shall be subject to Buyer's shipment of defective Product(s) in strict accordance with the RMA Procedures.

        10.6    "No Trouble Found" or "NTF".    If Buyer's levels of NTF returns are reasonably determined by QUALCOMM to be excessive, Buyer shall be notified and thereafter billed the sum of sixty dollars (US$60) per occurrence for the NTF evaluation. Buyer shall pay for shipping to and from QUALCOMM for all NTF units.

        10.7    Returned Product(s) Not Covered by Warranty.    In the event Product(s) not covered by warranty can be economically repaired, QUALCOMM shall contact Buyer for authorization to repair and provide an estimate of the costs therefor, based on the Repair Prices plus an evaluation fee of sixty (US$60). If authorized by Buyer, QUALCOMM shall attempt to repair such Product(s) within the estimate and return same to Buyer at Buyer's cost. Buyer shall pay for such repair upon invoice from QUALCOMM. If QUALCOMM is unable to repair non-warranted Product(s), or Buyer does not authorize repair, QUALCOMM will return same to Buyer at Buyer's cost or scrap the same without liability to Buyer.

11.    PRODUCT USES AND RESTRICTIONS.    Buyer shall, and shall require its Distributors and other customers to market, distribute, sell and use the Product(s) and sublicense and use the Software solely in accordance with and for the purposes contemplated in the applicable Documentation and Supply Agreement. No data only Product(s) shall be marketed or sold for any Reserved Service, nor may any Product be incorporated into any other product developed, marketed, produced, sold or permitted to be used for or in any Reserved Service or, unless otherwise provided in an Integration Agreement executed by QUALCOMM and a product integrator approved by QUALCOMM, for Aviation applications (other than QUALCOMM's Globalstar Aviation Communications Kit, MCN #65-C1748-X).

        11.1    In the event that any third party item(s) not provided by QUALCOMM will be used in conjunction with the Products, prior to any such use or incorporation, Customer or third party must provide QUALCOMM all such items for analysis and testing by QUALCOMM at Buyer's expense.

6


Such analysis and/or testing shall be repeated by QUALCOMM at its sole option, at Buyer's expense, if problems occur and/or if changes are made once the item(s) have been analyzed and tested by QUALCOMM.

12.    RESTRICTIONS ON USE OF TRADEMARKS AND LOGOS.    In order that each party may protect its trademarks, trade names, corporate slogans, corporate logo, goodwill and product designations, no party, without the express written consent of the other, shall have the right to use any such marks, names, slogans or designations of the other party, in the sales, lease or advertising of any products or on any product container, component part, business forms, sales, advertising and promotional materials or other business supplies or material, whether in writing, orally or otherwise, except as expressly agreed by the parties. Nothing in this Section shall restrict Buyer from distributing Product(s) with the Marks.

13.    NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS IMPLIED.    The sale to Buyer of Product(s) does not convey to Buyer any intellectual property rights in such Product(s) or any Software, including but not limited to any rights under any patent, trademark, copyright, or trade secret other than as set forth in Section 14. Neither the sale of Product(s), the license of Software nor any provision in any Supply Agreement shall be construed to grant to Buyer, either expressly, by implication or by way of estoppel, any license under any patents or other intellectual property rights of QUALCOMM or its licensors covering or relating to any other product or invention or any combination of Products or software with any other product.

14.    SOFTWARE LICENSE.    Product(s) sold hereunder may contain or be accompanied by Software and, except as otherwise expressly provided herein, all references to "Product(s)" herein shall be deemed to include the accompanying Software, provided that nothing herein shall be construed as the sale of, or passage of title in, any Software or any other intellectual property embedded in the Product to Buyer. QUALCOMM hereby grants to Buyer a non-exclusive, worldwide license to sublicense the Software and to use the Software (in object form only) solely as included and intended to be used in the Products purchased by Buyer from QUALCOMM and for use only in the manner which QUALCOMM intends the Software to be used, for the duration of the useful life of such Product(s) and subject to the terms and conditions of the applicable Supply Agreement. Buyer shall not and shall not permit any third party to, without the prior written consent of QUALCOMM: (i) alter, modify, translate, or adapt any Software or create any derivative works based thereon; (ii) copy any Software; (iii) assign, sublicense or otherwise transfer the Software in whole or in part, except as permitted herein; (iv) use the Software except as specifically contemplated in the applicable Supply Agreement; or (v) disclose the Software to any third party. The entire right, title and interest in the Software shall remain with QUALCOMM, and Buyer shall not remove any copyright notices or other legends from the Software or any accompanying documentation. Buyer may reproduce and distribute any Documentation provided by QUALCOMM for distribution with the Product, in whole or in part, for purposes related to the operation, maintenance, marketing or sale thereof.

Buyer may sublicense to its Distributors the right to further sublicense to bona fide end user customers the right to use the Software only as incorporated in the Product, subject to terms at least as protective of QUALCOMM's rights therein as the provisions of the applicable Supply Agreement and such right shall survive termination or expiration of such Supply Agreement and last for the duration of the useful life of the Product. If Buyer, and Buyer's Distributors, do not take reasonable steps to enforce their rights under such software sublicense agreements, Buyer shall take all reasonable steps necessary to ensure that the right to enforce such software sublicense agreements is transferred and assigned to QUALCOMM.

Buyer shall use the Products and Software contained therein or furnished by QUALCOMM solely in accordance with and for the purposes specifically contemplated in the terms of the applicable Supply Agreement. Buyer shall not, and shall not permit any third party to, directly or indirectly, alter, modify,

7


translate, or adapt any Product or Software contained therein or create any derivative works based thereon, disassemble, decompose, reverse engineer, or analyze the physical construction of, any of the Products or Software or any component thereof for any purpose.

15.
INDEMNIFICATION.

        15.1    Misuse.    Buyer shall indemnify, defend and hold harmless QUALCOMM, its Affiliates, and their directors, officers, agents and employees against any and all losses, claims, demands, damages and expenses (including reasonable attorneys' fees) arising out of (i) any misuse or modification of the Product(s) sold hereunder, (ii) any unauthorized or unlawful use or distribution of the Product(s) sold hereunder, (iii) any breach of the Non-Disclosure Agreement described in Section 18 hereof, or (iv) any unlawful acts or omissions by Buyer or its Service Providers, or military and aviation application customers, including any nonpayment of taxes, duties or other assessments relating to the transactions contemplated by the applicable Supply Agreement. If a military or aviation application customer is deemed by QUALCOMM to be a viable indemnifier based on various factors, including without limitation, its capitalization, financial status, and the nature of the product/application, and such customer is willing to indemnify QUALCOMM to the same extent as required in this Section 15.1, QUALCOMM will accept a written indemnification directly from such customer with respect to such customer for the product/application specified in lieu of the indemnification by Buyer for acts or omissions by such customer. For purposes of this Section 15.1, "misuse" shall mean any use of the Product(s) other than as prescribed in this Agreement.

        15.2    Third-Party Claims.    QUALCOMM shall indemnify, defend and hold harmless Buyer, its Affiliates, and their directors, officers, agents and employees against any losses, claims, demands, damages and expenses (including reasonable attorneys' fees) brought or raised in any jurisdiction in the United States or Canada, arising out of or related to any incident of personal injury or property damage which the Product, when used in accordance with the Documentation, has directly or indirectly caused or is alleged to have caused, in whole or in part. Buyer shall indemnify, defend and hold harmless QUALCOMM, its Affiliates, and their directors, officers, agents and employees against any losses, claims, demands, damages and expenses (including reasonable attorneys' fees) arising out of or related to any incident of personal injury or property damage which Buyer's products, for reasons other than the presence of the Product(s), has caused or is alleged to have caused, in whole or in part.

        15.3    By Buyer—Infringement.    Buyer shall indemnify, defend, and hold harmless QUALCOMM, its Affiliates, and their directors, officers, agents and employees, from and against all suits and claims for infringements or violations (or alleged infringements or violations) of any United States patent, trademark, copyright, trade secret or other intellectual property rights of any third party: (i) caused by Buyer's modification of any Product(s) or caused by the modification of any Product(s); or (ii) arising from any markings, logos or features other than the Marks. If a military or aviation application customer is deemed by QUALCOMM to be a viable indemnifier based on various factors, including without limitation, its capitalization, financial status, and the nature of the product/application, and such customer is willing to indemnify QUALCOMM to the same extent as required in this Section 15.3, QUALCOMM will accept a written indemnification directly from such customer with respect to such customer for the product/application specified in lieu of the indemnification by Buyer for acts or omissions by such customer.

        15.4    Procedure for Indemnification.    With respect to indemnification pursuant to Section 15.1, 15.2 or 15.3, (i) the indemnified party shall give the indemnifying party prompt written notice of any claim or action for which the indemnified party is claiming indemnification hereunder; (ii) the indemnifying party shall be given the opportunity to control the defense or settlement of each such claim or action; and (iii) the indemnified party shall cooperate with, and provide reasonable information and assistance to, the indemnifying party in the defense and/or settlement of each such claim or action at the indemnifying party's expense, provided that failure to comply with (i), (ii) and

8


(iii) shall not affect the indemnifying party's obligation hereunder unless and to the extent the indemnifying party is materially prejudiced thereby. The indemnifying party shall pay all sums, including without limitation reasonable attorneys' fees, damages, losses, liabilities, expenses, and other costs, that by final judgment or decree, or in settlement of any suit or claim to such indemnifying party agrees, may be assigned against the indemnified party, its Affiliates, directors, officers, managers, members, agents, and employees on account of the claim indemnified against.

        15.5    By QUALCOMM—Infringement.    QUALCOMM shall indemnify, defend, and hold harmless Buyer, its Affiliates, and their directors, officers, agents and employees, from and against all suits and claims that the Product(s) infringes or violates (or allegedly infringes or violates) any United States patent, trademark, copyright, trade secret or other intellectual property rights of any third party. QUALCOMM agrees that it will pay all sums, including, without limitation, reasonable attorneys' fees, damages, losses, liabilities, expenses and other costs, which, by final judgment or decree, or in settlement of any suit or claim to which QUALCOMM agrees, may be assessed against Buyer, its Affiliates, directors, officers, agents, employees, on account of the foregoing, provided that: (a) QUALCOMM is given prompt written notice of such claim or action; (b) QUALCOMM is given the opportunity to control the defense or settlement of such claim or action; and (c) Buyer will cooperate with QUALCOMM to provide reasonable information and assistance in the defense and/or settlement of any such claim.

16.    TERMINATION FOR CAUSE.    The occurrence of any of the following shall constitute a material default and breach of the applicable Supply Agreement and shall allow the non-defaulting party to terminate such Supply Agreement and any outstanding Purchase Orders or portions thereof after the expiration of the applicable period of cure, if any;

In the event of termination by Customer due to QUALCOMM breach that remains uncured, QUALCOMM shall stop work as directed in the termination notice and use best efforts to mitigate expenditures.

If termination is by QUALCOMM, Buyer shall pay QUALCOMM the Product price for the delivered units and the applicable cancellation fees set forth in Section 3.3 hereof. If termination is by Buyer, Buyer shall pay QUALCOMM the Product price for the delivered units, plus QUALCOMM's costs to supplier(s) for part(s) ordered by QUALCOMM that cannot be cancelled or returned for refund. In that event, those part(s) for which QUALCOMM receives full payment from Buyer shall be delivered to Buyer, subject to any licensing requirements.

17.    LIMITATION OF LIABILITY.    IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER, NOR SHALL QUALCOMM BE LIABLE TO BUYER'S DISTRIBUTORS OR CUSTOMERS, FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO ANY LOST PROFITS, LOST SAVINGS, OR OTHER INCIDENTAL DAMAGES, ARISING OUT OF THE SUPPLY AGREEMENT

9


INCLUDING BUT NOT LIMITED TO, THE USE OR INABILITY TO USE, OR THE DELIVERY OR FAILURE TO DELIVER, ANY PRODUCT(S) OR ANY SOFTWARE, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION OF LIABILITY SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF WHETHER A PARTY'S REMEDIES HEREUNDER ARE DETERMINED TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE. FURTHER, THE ENTIRE LIABILITY OF EITHER PARTY, AND THE SOLE AND EXCLUSIVE REMEDY OF ANY PARTY, FOR ANY CLAIM OR CAUSE OF ACTION ARISING HEREUNDER (WHETHER IN CONTRACT, TORT, OR OTHERWISE) SHALL NOT EXCEED THE PURCHASE PRICE FOR THE PRODUCT WHICH IS THE SUBJECT OF SUCH CLAIM OR CAUSE OF ACTION.

18.    RESTRICTIONS ON DISCLOSURE AND USE.    The terms of the Mutual Non-Disclosure Agreement between Buyer and QUALCOMM, Attachment 1, shall govern the exchange of all confidential and/or proprietary information between the parties under the applicable Supply Agreement.

19.
COMPLIANCE WITH LAWS; PERMITS.

        19.1    Compliance with Laws.    Each party shall comply with all applicable required U.S. laws, regulations and codes, in the performance of the applicable Supply Agreement. Nothing contained in any Supply Agreement shall require or permit Buyer or QUALCOMM to do any act inconsistent with the requirements of: (a) the regulations of the United States Department of Commerce; or (b) the foreign assets controls or foreign transactions controls regulations of the United States Treasury Department; or (c) of any similar United States law, regulation or executive order; or (d) any applicable law or regulation, as the same may be in effect from time to time. Buyer will comply with all laws and regulations of the United States of America applicable to its activities under the applicable Supply Agreement, including but not limited to U.S. Export Administration Regulations. Further, Buyer shall comply with the laws of all countries in which Buyer imports any Products in the importation, marketing, sale, distribution, warranty and use thereof. Each party shall indemnify the other party and its officers, directors, employees and permitted assigns and successors against any losses, damages, claims, demands, suits, liabilities, penalties and expenses, (including reasonable attorneys' fees) that may be sustained by reason of such party's failure to comply with this Section 19.

        19.2    Licenses and Permits.    QUALCOMM warrants that the Phone(s), Car Kit(s), and the Satellite Data Modems have been type-certified by the U.S. Federal Communications Commission. Buyer and its Distributors shall be solely responsible for obtaining all other permits, certifications and approvals required by law or regulation, including any such permits, certifications and approvals, or any other governmental approval that may be required to market, manufacture, sell or distribute the Product(s). At Buyer's request, QUALCOMM shall reasonably assist Buyer at Buyer's expense.

20.    INSURANCE.    Buyer and Buyer's Distributors shall at all times, at their own cost and expense, carry and maintain the insurance coverage required by law and commercially standard in the jurisdiction(s) and industry(ies) where any Product may be sold. Buyer shall provide a certificate of insurance to QUALCOMM upon request and shall require its insurer(s) to advise QUALCOMM in writing within sixty (60) days prior to any changes or cancellations being made to such policy(ies).

21.    PARTY RELATIONSHIP.    It is expressly understood that the parties intend and establish only the relationship of independent contractors. No party shall have any authority to create or assume in the name of or on behalf of the other party any obligation, express or implied, to act or to purport to act as the agent or legally empowered representative of the other party for any purpose whatsoever.

22.    ASSIGNMENT.    Neither the Supply Agreement nor any rights, duties or interest herein, shall be assigned, transferred, pledged or hypothecated or otherwise conveyed by either party without other party's prior written consent, which shall not be unreasonably delayed or withheld. Notwithstanding,

10


after December 31, 2006 and upon notice to Buyer, QUALCOMM may transfer the Supply Agreement in connection with any transfer or sale by QUALCOMM to a third party without consent (other than a direct competitor of Buyer) of its Globalstar-related business, so long as such third party acquires or arranges for sufficient resources to perform its obligations thereunder. For purposes of this Section 22, "assignment" shall be deemed to include any transaction or series of transactions which results in an aggregate change in ownership or control of fifty percent (50%) or more of the Buyer. Any assignment or delegation in contravention of this Section shall be void.

23.    DISPUTE RESOLUTION.

        23.1    Good Faith Negotiations.    The parties shall attempt to resolve by good faith and diligent negotiation any dispute, controversy or claim between them arising out of or relating to the Supply Agreement, or the breach, termination or invalidity thereof. If such negotiations are not initiated within thirty (30) days of one party's request to the other for negotiations and/or concluded within sixty (60) days after initiation, either party may initiate legal proceedings in accordance with this Section.

        23.2    Applicable Law: Jurisdiction.    The Supply Agreement shall be construed and the rights of the parties shall be determined, in all respects, according to the laws of the State of California (USA), without giving effect to the principles of conflicts of law thereof. The Supply Agreement shall not be governed by the provisions of the 1980 United Nations Conventions on Contracts for the International Sale of Goods. The parties hereto expressly consent and submit to the exclusive jurisdiction of the courts of California for the adjudication or disposition of any claim, action or dispute arising out of the Supply Agreement. The prevailing party thereto will be entitled to recover its expenses including, without limitation, reasonable attorney's fees.

        23.3    Admissibility.    ALL DISCUSSIONS AND DOCUMENTS PREPARED PURSUANT TO ANY ATTEMPT TO RESOLVE A DISPUTE UNDER THIS PROVISION ARE CONFIDENTIAL AND FOR SETTLEMENT PURPOSES ONLY AND SHALL NOT BE ADMITTED IN ANY COURT OR OTHER FORUM AS AN ADMISSION OR OTHERWISE AGAINST A PARTY FOR ANY PURPOSE.

24.    FORCE MAJEURE.    Neither party shall be in default or liable for any loss or damage resulting from delays in performance or from failure to perform hereunder due to any causes beyond its reasonable control, which causes include but are not limited to acts of God or the public enemy; riots or insurrections; war; fire; strikes and other labor difficulties (whether or not the party is in a position to concede to such demands) embargoes; judicial action; lack of or inability to obtain necessary labor, materials, energy, components or machinery; and acts of civil or military authorities. Should an event of Force Majeure occur, the party so affected shall give prompt written notice to the other party of such cause and its effect on its ability to perform under the applicable Supply Agreement. If the event of Force Majeure is not resolved and performance reinstated within one hundred twenty (120) days after notice thereof, either party may terminate such Supply Agreement, without further obligation to the other with respect to the unperformed obligation and without the application of any Termination Charges.

25.    NOTICES.    All notices, requests, demands, consents, agreements and other communications required or permitted to be given under this Supply Agreement shall be in writing and shall be mailed to the Party to whom notice is to be given, by first class mail, postage prepaid or sent by, facsimile and electronically confirmed, or via delivery service, properly addressed as set forth below. Notice shall be

11


deemed received upon the earlier of actual receipt or (i) one (1) business day after confirmed facsimile or delivery or (ii) five (5) business days after deposit into the U.S. mail.

QUALCOMM Incorporated
5775 Morehouse Drive
San Diego, CA 92121-1714		   New Operating Globalstar, L.L.C.
3110 Zanker Road
San Jose, California
Attn.: Director of Contracts   Attn: /s/ Kelly Rose
QUALCOMM Wireless Systems Division   Facsimile: (408) 933-4943
Facsimile: (858) 651-6045   Copy:     
with a copy to:   Facsimile:     

Division Counsel, Wireless Systems
Facsimile No.: (858) 658-1558

Addresses and facsimile numbers can be changed by providing notice to the other party in accordance with this Section.

26.    ENGLISH LANGUAGE.    All negotiations, correspondence, and documents whatsoever shall be in the English language. In any case where text exists in more than one language, the English text shall govern.

27.    MISCELLANEOUS PROVISIONS.    The supply of Products by QUALCOMM is on a nonexclusive basis. No addition to or modification of any Supply Agreement shall be effective unless made in writing and signed by the respective representatives of QUALCOMM and Buyer. Any delay or failure to enforce at any time any provision of any Supply Agreement shall not constitute a waiver of the right thereafter to enforce each and every provision thereof. If any of the provisions of any Supply Agreement is determined to be invalid, illegal, or otherwise unenforceable, the remaining provisions shall remain in full force and effect. The parties' rights and obligations which by their sense and context are intended to survive any termination or expiration of any Supply Agreement, including these Supply Terms, shall so survive.

********

IN WITNESS WHEREOF, the parties have executed this Agreement on the date set forth above.

New Operating Globalstar, L.L.C.,
a Delaware limited liability company		   QUALCOMM Incorporated,
a Delaware corporation

By:
/s/ William F. Adler
 
By:
/s/ Scott J. Becker
Print Name: William F. Adler   Print Name: Scott J. Becker
Title: VP Legal and Regulatory   Title: Sr. Vice President & General Manager
QUALCOMM Wireless Systems Division

12


Attachment 1


MUTUAL NON-DISCLOSURE AGREEMENT


OMITTED

13


Attachment 2


QUALCOMM INCORPORATED

OUT-OF-WARRANTY HARDWARE REPAIR PRICING
GLOBALSTAR PRODUCTS
(Prices Effective Through December 31, 2004)

Product
   Out-of-Warranty Repair Unit Pricing (U.S. $)
GSP-1600 Tri-Mode Portable Phone    
• Replace Digital Board (MCN 20-81705-1)    
   
• Replace RF Board (MCN 20-81707)    
   
• Light Repair-Antenna Replacement    
   
• Light Repair-Filter Replacement   [*]
   
GSP-2800 Fixed Phone (Base)    
   
GSP-2900 Fixed Phone (Enhanced)    
   
GSP-1620 Satellite Data Modem (CCA Only/Excludes Antenna)    
Phone Product Accessories (Includes Car Kit)   Not Repaired
No Trouble Found (NTF)/ Repair Evaluation Fee   $60 Per Occurrence

14


Attachment 3


RMA (Return Material Authorization) Procedures
for QUALCOMM Globalstar Products

Prior to Requesting an RMA

1.    Buyer personnel must be registered with QUALCOMM Customer Service to submit a request for RMA. To obtain registration status, Buyer must email QUALCOMM Customer Service at gstechsupport@qualcomm.com. (A list of authorized personnel that can obtain RMAs from QUALCOMM should be provided in advance, if possible, by Buyer).

2.    Buyer personnel will receive an email confirmation that they have been authorized to submit RMAs.

RMA Procedure

1.    Buyer should REQUEST an RMA from QUALCOMM using one of the following methods:

Or

2.    The QUALCOMM Customer Service Representative will log the information into QUALCOMM's call tracking software system, which automatically assigns a case number for the RMA request. Please note, this is not the RMA number. The RMA number will be assigned if all warranty criteria have been met. Please include a description of the problem and the RMA documentation with the part(s) to be repaired.

3.    Buyer will RECEIVE a confirmation and case number for the RMA request from QUALCOMM Customer Service via email.

4.    Buyer will RECEIVE an RMA number, shipping instructions, and RMA confirmation documents from QUALCOMM Customer Service via email or fax.

5.    Buyer must package the RMA part(s) for shipment for safe arrival at QUALCOMM, including the following:

15

6.    Buyer must SHIP the RMA part(s) per QUALCOMM shipping instructions indicated on the RMA documentation.

Please refer to the applicable contract agreement with QUALCOMM to determine the responsible party and schedule for payment of associated shipping costs (i.e., customs clearance, freight costs, and associated duties and taxes) required for transport or parts(s) to and from QUALCOMM; and for Repair Evaluation Fees and Repair Fees.

7.    For tracking purposes, Buyer must OBTAIN the Airway Bill (AWB) number from the freight forwarder and email both the AWB number and the associated RMA number to QUALCOMM Customer Service at status.rma@qualcomm.com shipment.

8.    QUALCOMM will notify Buyer of estimated ship schedule for repaired part(s) via email.

9.    Buyer should CONFIRM the receipt of the repaired product(s) and validate the functionality of the part(s) by sending email to status.rma@qualcomm.com.

10.    Upon receipt of Buyer's confirmation, QUALCOMM will close the Case and the RMA. If confirmation has not been received in thirty (30) days from date of shipment, QUALCOMM will close the case and the RMA accordingly.

This Procedure may change from time to time in QUALCOMM's sole discretion. Buyer should contact QUALCOMM for questions.

16


Attachment 4


AGREEMENT FOR REPAIR OF OUT-OF-WARRANTY
GLOBALSTAR HARDWARE
(CDMA Gateway Equipment, Satellite Phone Products, Satellite Data Modems)
AGREEMENT No.                              

This Agreement for Repair of Out-of-Warranty Globalstar Hardware ("Agreement") is entered into as of April     , 2004 ("Effective Date") by and between QUALCOMM Incorporated ("QUALCOMM"), a Delaware U.S.A. corporation having offices at 5775 Morehouse Drive, CA 92121, and a                         , a                          ("Customer"), with offices located at and each may be referred to as "party" and collectively as "parties" to this Agreement.

1.0    Term.    The term of this Agreement shall be for one (1) year from the Effective Date. During the term, all QUALCOMM repairs for out-of-warranty hardware shall be governed by this Agreement.

2.0    Repairs.    QUALCOMM will perform reasonable repairs based on the availability of QUALCOMM's personnel and component parts. Customer will be notified if QUALCOMM deems any part not repairable, and Customer may request to purchase a replacement part at that time (to be sold subject to availability and under a separate agreement).

3.0    Return Material Authorization (RMA).    All returns shall be handled in accordance with QUALCOMM's RMA Procedures. For each repair requested during the term and for Customer's return of any part(s) for repair, Customer shall request an RMA Number.

Any unauthorized part received by QUALCOMM will be returned at the Customer's sole expense. If RMA number is issued by QUALCOMM and QUALCOMM fails to receive Customer's defective part within thirty (30) days of issuance of the RMA number, QUALCOMM reserves the right to cancel the RMA upon written notice to Customer, and retain any monies received by the Customer for said repair. Customer may cancel an RMA prior to Customer's shipment of part(s) upon written notice to QUALCOMM. Upon receipt of Customer's notice, QUALCOMM will cancel the associated RMA number. Information in the form of Exhibit A hereto will be required prior to each repair.

4.0    Price.    QUALCOMM's repair prices do not include shipping, duties or taxes. For all out-of-warranty repairs, Customer agrees to pay all shipping, duties and taxes associated with the return of part(s) to QUALCOMM, and associated with the repaired part(s) being returned to Customer. To the extent reasonably possible, QUALCOMM will publish current repair prices on QUALCOMM's Customer Service website. In certain cases, QUALCOMM will provide an estimated repair price upon Customer's return of the part and QUALCOMM's evaluation of necessary repair.

5.0    Payment.    All payments shall be made in U.S. Dollars. Unless otherwise agreed to by QUALCOMM, Repair Evaluation Fee(s) must be received prior to QUALCOMM's issuance of an RMA and evaluation of a part. Payment terms for out-of-warranty repairs are twenty five percent (25%) of the estimated repair price due prior to QUALCOMM's issuance of an RMA number and Customer's shipment of the part(s), and seventy five percent (75%) of the actual repair price due within thirty (30) days after QUALCOMM's delivery to the FCA Point (i.e., QUALCOMM's dock). QUALCOMM will invoice on a NET 30 basis. Payments shall reference this Agreement number and must be made by credit card based on Customer information below or via wire transfer to the bank location set forth below, or such other bank location as QUALCOMM may from time to time designate in writing:

Bank of America
San Francisco, California
ABA# 121-000-358
Int. S.W.I.F.T. No. [*]
Account [*].

17

Customer shall pay to QUALCOMM a late charge on any undisputed past due amounts at the rate of one percent (1%) per month or part thereof or the maximum amount permitted by law, whichever is less. In the event Customer disputes an amount invoiced by QUALCOMM, Customer shall promptly notify QUALCOMM in writing the basis for such dispute, and shall pay the undisputed portion of such invoice as set for therein.

6.0    Delivery.    Estimated lead times for QUALCOMM repairs will be provided to Customer upon request. Delivery terms are FCA, QUALCOMM's dock, San Diego, California (the "FCA Point"). QUALCOMM will notify Customer in writing when the repaired part(s) is available for pick up (the "Notification Date"). If Customer fails to pick up the repaired part(s) following thirty (30) days after the Notification Date, QUALCOMM will invoice, and Customer will be responsible, for payment of daily storage fees at QUALCOMM's then-current rate until such time as the repaired part(s) is picked up by Customer.

7.0    Warranty.    Customer has twenty (20) days from Customer's receipt of a repaired part to notify QUALCOMM that the part is non-working (and in no case can a notification be received later than forty five (45) days from the Notification Date). Otherwise, Customer shall be deemed to have accepted the part(s) "AS IS, and without warranty of any kind." If a returned part is non-working, Customer will provide QUALCOMM a detailed explanation of the problem, and photographs if available, when obtaining an RMA number from QUALCOMM. If upon QUALCOMM's reasonable evaluation it is determined that the part remains defective or otherwise non-working as a direct result of QUALCOMM's actions (or the actions of its suppliers), QUALCOMM will repair the part at QUALCOMM's expense and ship the part back to Customer at QUALCOMM's expense (except for duties and taxes which will be the responsibility of Customer). THE WARRANTY IN THIS SECTION 7.0 IS IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR IMPLIED, WHETHER ARISING FROM LAW, CUSTOM, OR CONDUCT AND 1S CUSTOMER'S SOLE REMEDY RELATED TO QUALCOMM'S REPAIR OF A PRODUCT.

8.0    Termination for Cause.    Either party may terminate this Agreement for material default by the other party of an obligation, condition or covenant of this Agreement, which, if curable, is not cured within thirty (30) days of the date after the other party notifies the defaulting party of such default.

9.0    Agreement/Governing Law.    Customer's Purchase Order and/or terms and conditions do not apply. This Agreement, and the RMA Procedures, are the complete agreement between the parties regarding the subject matter and this Agreement shall be construed according to the laws of the State of California without giving effect to the principles of conflicts of law thereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

New Operating Globalstar LLC   QUALCOMM Incorporated

By:
 
/s/ William F. Adler
 
By:
 
/s/ Scott J. Becker
Name:   William F. Adler   Name:   Scott J. Becker
Title:   VP Legal and Regulatory   Title:   Sr. Vice President and General Manager

18


Exhibit A

MCN or Part #
   Part Name
   Quantity
   Serial #
   Repair Price (in
US $)*
                $  
                $  
                $  
                      
            TOTAL REPAIR PRICE,
EXCLUDING SHIPPING,
TAXES & DUTIES		   $  

* Repair price is per QUALCOMM's Website or as quoted in writing by QUALCOMM.

Complete Description of Problem:     

    

    

    

CUSTOMER CREDIT CARD INFORMATION AND AUTHORIZATION:
 

Credit Card Type:
    
 
Number:     
  
Expiration Date:     
  
Name on Credit Card:     
  
Customer's Signature:     
  

For credit card payments, Customer will include pertinent information above. Customer's signature is authorization for QUALCOMM to charge the prices stated on this Agreement to Customer's credit card.

19

SHIP TO ADDRESS FOR REPAIRED PART(S):  

    
 

    
 

    
 

SHIPPING INFORMATION (if Customer requests QUALCOMM's shipment of repaired part(s) in lieu of Customer pickup):

Freight Forwarder:
    
 
Freight Account #     
  
Ship Method:     
  

20


Attachment 5


QUALCOMM Commercial Rates

QUALCOMM's Labor Rates are as follows:

Labor Category
   Hourly Rate (in U.S. $)
Sr. Principal Engineer   $490
Principal Engineer   $350
Project Manager   $246
Systems/Sr. Engineer   $215
Hardware/Software Engineer   $215
Administration   $168
Associate Engineer/Sr. Field Engineer   $167
Sr. Technician/Sr. Field Technician   $158
Field Engineer   $158
Field Technician/Technician   $115
Admin Support   $99

Travel costs and materials are not included in the above Labor Rates. As needed, they will be separately quoted by QUALCOMM.

QUALCOMM Labor Rates are established at a corporate level and adjusted annually. Current Labor Rates above are effective through December 31, 2004.

21


EXHIBIT B

ACCESSORIES

QUALCOMM's prices are current as of the Effective Date and subject to change upon notice to Buyer. Limited to quantities in Inventory; current estimates below. (Additional quantities of some items not in retail packaging may also be available for purchase).

Item
   Product Line
   Product
Number
   Price
   Inv
   Model
Number
   MCN Description
1.   Cigarette Lighter Adapter, Kit   CLA-1600       0   CXCLA0511   KIT, GS PORTABLE UT, CLA, PROD, RETAIL
     
2.   Data Cable, Kit   GDC-1100       0   XCDTA0512   KIT, TR-MODE DATA, GS, MDL CXDTA0512
     
3.   Data Cable, Tri Mode   GDC-1200       2042   CXDTA055   CABLE ASSY, DATA, PRODUCTION
     
4.   UT Diagnostic Monitor UTDM   GDM-2000   [*]   16   CXMST005   KIT, COMMERCIAL, UTDM
     
5.   Protective Case, Kit   GPC-1000       9   CXLCC0511   KIT,GS PORTABLE UT,PROTECTIVE CASE,PROD,RETAIL
     
6.   Leather Pouch, Kit   GPC-1100       0   CXLCC0521   LEATHER POUCH KIT
     
7.   Leather Case, Russia   GPC-1200       200   CXLCC051   CASE, LEATHER, PHONE, GLOBALSTAR PORTABLE (RUSSIA)
     
8.   Universal Travel Charger, Kit   GSP-1210       1786   CXTVL0511   KIT, GS PORTABLE UT, UNIVERSAL TRAVEL CHARGER,PROD
     
9.   Argentina Travel Charger, Kit   GSP-1211       36   CXTVL0521   KIT, UTC, ARGENTINE, GS PORT UT, CXTVL0521
     
10.   China Travel Charger, Kit   GSP-1212       0   CXTVL0531   KIT, UTC, CHINA, GS PORTABLE UT, CXTVL0531
     
11.   North American Wall Charger, Kit   GSP-1220       671   CXDTC0511   KIT,GS PORT UT,STD CHARGER, N. AMERICAN, PROD RETAIL
     
12.   EURO Wall Charger, Kit   GSP-1225       0   CXDTC0521   KIT, GS PORT UT, STD CHARGER, EURO VERSION, PROD
     
13.   Argentina Wall Charger, Kit   GSP-1230       0   CXDTC0531   KIT, STD CHARGER, ARGENTINE, CXDTC0531
     
14.   China AC Wall Charger   GSP-1231       10,000   CXDTC054   AC WALL CHARGER, PORTABLE UT,CHINA, GLOBALSTAR
     
15.   Antenna Replacement Kit   GSP-1650       333   CMANT0521   KIT, GS ANTENNA, FULL REPLACEMENT
     
16.   UT Program Support Tool   GST-1900       3   CSPST005   KIT,GS WWT,USER TERMINAL PROGRAM SUPPORT TOOL
     
17.   PST Cable Kit   GST-1910       7   CXHDW005   KIT, CABLE, PST, GS
Car Kit Accessories
18.   Carkit Handset, Kit   GCK-0008       233   CXCKT0521   KIT, HANDSET, CARKIT, GS
     
19.   Carkit ODU RF Cable   CV90-82105-C91       1535       CABLE ASSY, ODU TX RX
     
20.   Carkit Headset   GCK-0016   [*]   1,262   CXCKT064   HEATSET,SOAP ON ROPE STYLE EARPHONE-MIC
     
21.   Carkit Headset Adapter   GCK-0017       1,209   CXCKT056   ADAPTER, HEADSET, GS CARKIT
     
22.   Carkit Headset, Kit   GCK-0018       16   CXCKT0531   KIT, HEADSET, CARKIT, GS
Fixed Accessories
22.   Fixed Battery Kit   GBB-1000       147   CXBAT0541   KIT, BATTERY, FIXED UT, GS
     
23.   Fixed UT Power Supply Kit   GPO-1000   [*]   0   CXPRS0511   KIT, POWER SUPPLY, FIXED UT, GS

22


EXHIBIT C

PRODUCT PRICING

Price list and Quantities are valid for Product(s) ordered within twelve (12) months of the Effective Date for delivery within twenty-four (24) months of the Effective Date.

Price list and minimum/maximum quantities for orders placed in months thirteen (13) through twenty-four (24) is TBD.

PRODUCT
   UNIT PRICE (in
U.S. $)
   Minimum Quantity
   Maximum Quantity
Tri-Mode Portable Phone   [*]   10,000   40,000
     
Fixed Phone (Enhanced)       7000*   7000*
     
Fixed Phone (Base)       7000*   7000*
     
Car Kit       5000   20,000
Satellite Data Modems   [*] with DRA Antenna/
[*] without DRA Antenna		   10,000   25,000

* Minimum/Maximum is Fixed Enhanced and Base Combined.

Unit price and maximum quantities are subject to component end of life issues.

Orders below the Minimum Quantity are subject to unit price adjustment.

23


EXHIBIT D


MODIFICATIONS

The following Categories of Modifications to the QUALCOMM Globalstar Satellite Data Modem, GSP-1620 require Buyer to sign QUALCOMM's Product Supply Agreement or Integration Agreement, as indicated below. Modifications indicating "Not Approved" are not authorized by QUALCOMM.

 
 
   Modification Category
   Supply
Agreement
   Integration
Agreement
   Not Approved
  
 
1   Add Enclosure and Mounting       X      
 
2   Power Source Hook Up (DB-25)   X          
 
3   Surge Protection Implementation (e.g., fusing)   X          
 
4   Change Cable and Cable Lengths       X *    
 
5   RF Modification (excluding RF Module)       X *    
 
6   Use in Proximity of GPS Installation   X *        
 
7   Antenna Change (i.e., other than DRA)       X *    
 
8   Hook Up to Interface (user serial standard RS232)   X          
 
9   Software Change (including interface Operation System Source Code)           X  
 
10   Hardware Modification           X  
 
11   Develop Maritime Application       X *    
 
12   Develop Explosive Environment Application           X  
 
13   Develop Aviation Application       X *    
 
14   Develop ATC Application       X *    
 
15   Grounding   X          
 
16   Tandem Connection (i.e., ganging)   X *        
 
17   Use of DB-9 UTDM SW to Access SDM's Port (e.g., use of commands)           X *
 
18   Any other Modification, Category or Application not listed above to be reviewed by QUALCOMM on a case-by-case basis              
 

* Requires QUALCOMM Engineering Consultation.

24


EXHIBIT E


Integration Agreement


Agreement No.                              

This QUALCOMM Integration Agreement ("Agreement") is entered into as of                         , 200     ("Effective Date") by and between QUALCOMM Incorporated, a Delaware corporation, ("QUALCOMM") with offices located at 5775 Morehouse Drive, San Diego, CA 92121, and                         , a                         , ("Integrator"), with offices located at                         , with respect to the following facts:

RECITALS

A.    Integrator has purchased Satellite Data Modems (the "Product(s)") from QUALCOMM pursuant to the terms of QUALCOMM's Supply Agreement and Supply Terms, or from Globalstar.

B.    Integrator possesses expertise in the design, development, manufacture and certification of wireless telecommunications products.

C.    Integrator wishes to incorporate the Product(s) into an Integrated Product for use in an Application (all as defined below) for resale to Customers and bona fide end users.

D.    Integrator understands that, the Product(s) were not developed by QUALCOMM for incorporation into the Integrated Product and/or intended for use in the Application, and therefore, as a requirement for developing, designing, manufacturing, marketing, selling, distributing or using any Product(s) for any Application, Integrator is required to execute this Agreement.

E.    The Product(s) may be modified only as set forth in this Agreement, including Attachment 3, subject to the restrictions set forth therein.

AGREEMENT

NOW, THEREFORE, the parties, in consideration of the mutual promises set forth herein, agree as follows:

1.    DEFINITIONS.    The following capitalized terms shall have the meanings set forth below:

25

2.    PRODUCT MODIFICATION RESTRICTIONS.    Satellite Data Modems may be modified pursuant to this Agreement only as set forth in Attachment 3, columns marked "Supply Agreement" and/or "Integration Agreement." Other modifications, including without limitation those marked "Not Approved" in Attachment 3 are prohibited. Consultation with QUALCOMM's engineering staff is required as noted thereon. Such consultation shall be provided at QUALCOMM's San Diego, CA facility, subject to staff availability and Commercial Rates.

3.    PRODUCT USES AND RESTRICTIONS.

3.1    Restriction on Use of Products.    The Product shall not be marketed or sold for any Reserved Service, nor may any Product be incorporated into any Integrated Product which is developed, marketed, produced, sold or permitted to be used for or in any Reserved Service. Integrator shall not directly or indirectly market, provide, sell or distribute the Product(s) for Reserved Services or for any application other than as stated herein.

3.2    Sale only as Incorporated in Integrated Product.    It is acknowledged and agreed that Product(s) must be incorporated into the Integrated Product(s) and may not be resold or used for any other purpose by Integrator other than as a part of and included within the Integrated Product solely for use in the Application and in accordance with the provisions of this Agreement.

Integrator shall not directly or indirectly, (i) market, provide, sell or distribute, or cause to be marketed, provided, sold or distributed, any or all of the Integrated Products other than for the Application and/or (ii) market, resell or distribute the Product(s) except as incorporated in the

26


Integrated Products as permitted hereunder or as may be otherwise authorized in writing by QUALCOMM. Integrator shall be responsible to arrange for airtime and rates therefor on the appropriate Gateway.

3.3    Environmental Protection.    Integrator acknowledges that the Product(s) require environmental protection. These environmental elements include, but are not limited to, temperature variation, humidity, condensation, lightning strikes, electromagnetic radiation, corrosive agents, ESD, particulates, direct impacts, mechanical shocks and vibrations, and as such, requires Integrator to be responsible for the environmental protection for the Product. QUALCOMM shall have no liability for Integrator's failure to design or to develop the Integrated Product in such a manner that fails to provide it an adequate enclosure or other sufficient environmental protection capabilities for the Product.

3.4    Conformance with Specifications.    Integrator agrees to assure that its incorporation of the Product(s) into the Integrated Product will not cause the Product(s) to deviate from the Radio Frequency (RF) performance specifications thereof. This would include, but is not limited to, changing or modifying the antenna, antenna cable as specified in the product documentation, antenna connectors, or any hardware or software components of the Product as provided by QUALCOMM. QUALCOMM reserves the right to test the Integrated Product before operation, if deemed necessary, in QUALCOMM's laboratory or other designated laboratory, to ensure that the Integrated Product conforms to the performance specifications of the Product(s) and continues to meet Globalstar System certification.

3.5    Product Documentation.    Integrator agrees that all Integrated Products sold by Integrator, or Integrator's resellers, distributors or agents (hereafter "Customers") to a bona fide end user will include adequate instructions for operation and use and safety information, including, without limitation such instructions and/or safety information as are required by law or regulation. For the purposes hereof, "bona fide end user" means any person who is purchasing the Integrated Product without the intent to resell such Integrated Product.

4.    LICENSES AND PERMITS.    The Product is certified by the FCC for its intended use. Integrator shall be solely responsible for obtaining all permits, certifications, and approvals required by law or regulation, including permits, certifications and approvals, or any other governmental approval that may be required to distribute, market, sell, operate and use the Integrated Product to include, without limitation, FCC and FAA certifications as applicable. QUALCOMM will reasonably assist Integrator, subject to availability of QUALCOMM's staff and at QUALCOMM's then-current Commercial Rates, in certification efforts.

5.    RESTRICTED EXPORT.    Integrator acknowledges that all Product(s) and all proprietary data, know-how, software or other data or information ("Information") obtained from QUALCOMM are subject to United States (US) Government export control laws and accordingly their use, export and reexport, may be restricted or prohibited. Integrator, therefore, agrees not to directly or indirectly export, re-export, or cause to be exported or re-exported, any such Product(s), Information, or any direct product thereof, to any destination or entity prohibited or restricted under US law, unless it shall have first obtained prior written consent of the US Department of Commerce (or other applicable agency of the US Government, either in writing or as provided by applicable regulation, as the same may be amended from time to time), a copy of such consent to be provided to QUALCOMM prior to export by Integrator. Integrator agrees that no Product(s) or Information received from QUALCOMM will be directly employed in missile technology, sensitive nuclear, or chemical biological weapons end uses or in any manner transferred to any party for any such end use. This requirement shall survive any termination or expiration of this Agreement.

27


6.    WARRANTIES.

6.1    No Product Warranty.    NO WARRANTY is provided with the Product(s) as they are being used by Integrator for purposes for which they are not intended. Subject to the availability of QUALCOMM staff, QUALCOMM will use reasonable commercial efforts to test and repair Products at QUALCOMM's then-current repair prices. Integrator will be responsible for all shipping costs associated with the return of the Products to QUALCOMM, and back to Integrator, to include without limitation, insurance, taxes and duties. Integrator must follow the RMA Procedures for all such returns.

6.2    Service Warranty.    QUALCOMM hereby warrants that services performed hereunder will be performed in a workmanlike manner consistent with industry standards for such service.

Integrator hereby acknowledges and agrees that it has not relied on any representations or warranties other than those expressly set forth herein. QUALCOMM MAKES NO OTHER WARRANTIES, EXPRESS OR IMPLIED, WITH RESPECT TO THE PRODUCTS, SOFTWARE, OR SERVICES, INCLUDING BUT NOT LIMITED TO ANY WARRANTY OF MERCHANTABILTTY OR FITNESS FOR A PARTICULAR PURPOSE OR AGAINST INFRINGEMENT, OR ANY EXPRESS OR IMPLIED WARRANTY ARISING OUT OF TRADE USAGE OR OUT OF A COURSE OF DEALING OR COURSE OF PERFORMANCE.

7.    NO TRANSFER OF INTELLECTUAL PROPERTY RIGHTS IMPLIED.    There is no conveyance to Integrator of any intellectual property rights in such Products or any software contained therein, including but not limited to any rights under any patent, trademark, copyright, or trade secret other than as set forth in Section 8. No provision of this Agreement including, without limitation, the license of any software, shall be construed to grant to Integrator, either expressly, by implication or by way of estoppel, any license under any patents or other intellectual property rights of QUALCOMM or its licensors covering or relating to any other product or invention or any combination of Products or software with any other product.

8.    SOFTWARE LICENSE.    Products may contain or be accompanied by software in executable code form ("Software") and, except as otherwise expressly provided herein, all references to "Product(s)" herein shall be deemed to include the accompanying Software, provided that nothing herein shall be construed as the sale of, or passage of title in, any Software or any other intellectual property embedded in the Product to Integrator. QUALCOMM hereby grants to Integrator a non-exclusive license to use the Software (in object form only) solely as included and intended to be used in the Products and for use only in the manner which QUALCOMM intends the Software to be used, for the duration of the useful life of such Products and subject to the terms and conditions herein. Integrator shall not, and shall not authorize any third party to, without the prior written consent of QUALCOMM: (i) alter, modify, translate, or adapt any Software or create any derivative works based thereon; (ii) copy any Software; (iii) assign, sublicense or otherwise transfer the Software in whole or in part, except as permitted herein; (iv) use the Software except as specifically contemplated herein; or (v) disclose the Software to any third party. The entire right, title and interest in the Software shall remain with QUALCOMM, and Integrator shall not remove any copyright notices or other legends from the Software or any accompanying documentation. Integrator may reproduce and distribute any user documentation provided by QUALCOMM for the Product, in whole or in part, for purposes related to the operation, maintenance, marketing or sale of Integrated Products; provided that QUALCOMM shall have the right to review and approve such documentation in writing prior to Integrator's use.

Integrator may, and may allow Customers to, sublicense to bona fide end user customers the right to use the Software only as incorporated in the Integrated Product, subject to written terms at least as protective of QUALCOMM's rights therein as the provisions of this Agreement and such right shall survive termination of this Agreement and last for the duration of the useful life of the Integrated Product. If Integrator, and Customers, do not take reasonable steps to enforce its/their rights under

28


such software sublicense agreements, Integrator and Customers shall take all reasonable steps necessary to ensure that the right to enforce such software sublicense agreements is transferred and assigned to QUALCOMM.

Integrator shall use the Products and Software contained therein or furnished by QUALCOMM solely in accordance with and for the purposes specifically contemplated in the terms of this Agreement. Integrator shall not, directly or indirectly, alter, modify, translate, or adapt any Product or Software contained therein or create any derivative works based thereon, disassemble, decompose, reverse engineer, or analyze the physical construction of, any of the Products or Software or any component thereof for any purpose.

9.    NO USE OF TRADEMARKS AND LOGOS.    In order that each party may protect its trademarks, trade names, corporate slogans, corporate logo, goodwill and product designations, no party, without the express written consent of the other, shall have the right to use any such marks, names, slogans or designations of the other party, in the sales, lease or advertising of any products or on any product container, component part, business forms, sales, advertising and promotional materials or other business supplies or material, whether in writing, orally or otherwise, except as agreed to in writing by the parties.

10.    INDEMNIFICATION AND INSURANCE.

10.1    Misuse.    Integrator shall indemnify, defend and hold harmless QUALCOMM, its affiliates, and their directors, officers, agents and employees against any and all losses, claims, demands, damages and expenses (including attorneys' fees) arising out of or related to Integrator's (including its affiliates and their employees, agents, independent contractors or customers) misuse and/or modification of the Product, or use of any Product in combination with any other items, whether or not furnished by QUALCOMM, even if such use is the necessary, inherent and/or intended use of the Product.

10.2    Tort and/or Product Liability Claims.    Integrator shall indemnify, defend and hold harmless QUALCOMM, its affiliates, and their directors, officers, agents and employees against any all losses, claims, demands, damages and expenses (including attorneys' fees) arising out of or related to any incident of personal injury or property damage in which the Product, or Integrated Product, or any combination thereof, is alleged to have caused, in whole or in part, such damage or injury.

10.3    Infringement.    Integrator shall indemnify, defend, and hold harmless QUALCOMM, its affiliates, and their directors, officers, agents and employees, from and against all suits and claims for infringements or violations of any patent, trademark, copyright, trade secret or other intellectual property rights of any third party (i) caused directly by Integrator's (or by an affiliate's or agent's if done on behalf of or at the direction of Integrator) modification, use or maintenance of any Product, (ii) arising from the incorporation of the Product(s) into the Integrated Product, or (iii) arising from any markings, logos or features used or specifically requested by Integrator in writing. Integrator agrees that it will pay all sums, including, without limitation, attorneys' fees, damages, losses, liabilities, expenses and other costs, which, by final judgment or decree, or in settlement of any suit or claim to which Integrator agrees, may be assessed against QUALCOMM, its affiliates, directors, officers, agents, employees, on account of the foregoing, provided that:

        (a)    Integrator will be given written notification, promptly after QUALCOMM becomes aware of such claim, of any such infringement or violation and of any suits or claims brought or threatened against QUALCOMM or Integrator of which QUALCOMM has actual knowledge;

        (b)    Integrator is given full authority to assume control of the defense (including appeals) thereof through its own counsel at its sole expense and will have the right to settle any suits or claims without the consent of QUALCOMM; provided that Integrator shall have no right to agree to injunctive relief against QUALCOMM or to any relief involving QUALCOMM's rights to sell Products and provided

29


further, that Integrator will notify QUALCOMM of any proposed settlement prior to Integrator's acceptance of such settlement; and

        (c)    QUALCOMM will cooperate with Integrator in the defense of such suit or claims and provide Integrator, at Integrator's expense, such assistance as Integrator may reasonably require in connection therewith.

10.4    Insurance.    Integrator and Integrator's Customers shall at all times, at their own cost and expense, carry and maintain the insurance coverage required by law and commercially standard in the jurisdiction(s) and industry(ies) where the Integrated Product may be sold, and shall provide certificates of insurance to QUALCOMM upon request and shall require its insurers to advise QUALCOMM in writing within sixty (60) days prior to any changes or cancellation being made to such policies.

11.    LIMITATION OF LIABILITY.    IN NO EVENT SHALL QUALCOMM BE LIABLE TO INTEGRATOR, OR INTEGRATOR'S CUSTOMERS, FOR ANY INCIDENTAL, INDIRECT, CONSEQUENTIAL OR SPECIAL DAMAGES, INCLUDING BUT NOT LIMITED TO ANY LOST PROFITS, LOST SAVINGS, OR OTHER INCIDENTAL DAMAGES, ARISING OUT OF THE USE OR INABILITY TO USE, OR THE DELIVERY OR FAILURE TO DELIVER, ANY OF THE PRODUCTS OR ANY SOFTWARE, EVEN IF QUALCOMM HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THE FOREGOING LIMITATION OF LIABILITY SHALL REMAIN IN FULL FORCE AND EFFECT REGARDLESS OF WHETHER BUYER'S REMEDIES HEREUNDER ARE DETERMINED TO HAVE FAILED OF THEIR ESSENTIAL PURPOSE. FURTHER, THE ENTIRE LIABILITY OF QUALCOMM, AND THE SOLE AND EXCLUSIVE REMEDY OF INTEGRATOR OR ANY THIRD PARTY, FOR ANY CLAIM OR CAUSE OF ACTION ARISING HEREUNDER (WHETHER IN CONTRACT, TORT, OR OTHERWISE) SHALL NOT EXCEED FIVE THOUSAND DOLLARS U.S. ($5000.00).

12.    RESTRICTIONS ON DISCLOSURE AND USE.    The terms of the Mutual Non-Disclosure Agreement, the form of which is attached hereto as Attachment 4 and which shall be executed by Integrator and QUALCOMM, shall govern the exchange of all confidential and/or proprietary information between the parties under this Agreement.

13.    COMPLIANCE WITH LAWS.    Each party shall comply with all applicable required U.S. laws, regulations and codes, including the procurement of permits and licenses when needed, in the performance of this Agreement. Nothing contained in this Addendum shall require or permit Integrator or QUALCOMM to do any act inconsistent with the requirements of: (a) the regulations of the United States Department of Commerce; or (b) the foreign assets controls or foreign transactions controls regulations of the United States Treasury Department; or (c) of any similar United States law, regulation or executive order; or (d) any applicable law or regulation, as the same may be in effect from time to time. Integrator will comply with all laws and regulations of the United States of America applicable to its activities under this Addendum, including but not limited to U.S. Export Administration Regulations. Further, Integrator shall comply with the laws of all countries in which Buyer imports any Products in the importation, marketing, sale, distribution, warranty and use thereof. Each party shall indemnify the other party and its officers, directors, employees and permitted assigns and successors against any losses, damages, claims, demands, suits, liabilities, penalties and expenses, (including reasonable attorneys' fees) that may be sustained by reason of such party's failure to comply with such laws, regulations and codes.

14.    TERMINATION FOR CAUSE.    In addition to the other termination rights set forth herein, the occurrence of any of the following shall constitute a material default and breach of this Agreement and shall allow the non-defaulting party-to terminate this Agreement after the expiration of the applicable period of cure, if any;

30


QUALCOMM shall also have the right to terminate this Agreement if any other agreement between QUALCOMM and Integrator is terminated by QUALCOMM due to Integrator's breach thereof.

If termination is by QUALCOMM, Integrator shall pay QUALCOMM all amounts due up to the termination date; QUALCOMM will invoice on a NET 30 basis. Use of all Confidential Information of the other party shall immediately cease and shall, within twenty (20) days of the termination date, be returned to the owning party. As of the date of termination, Integrator shall have no right to develop, manufacture, market and/or distribute the Product(s) as part of the Integrated Product.

15.    ASSIGNMENT.    Except as specified in this Section 15, neither this Agreement nor any rights, duties or interest herein, shall be assigned, transferred, pledged or hypothecated or otherwise conveyed by Integrator without QUALCOMM's prior written consent which shall not be unreasonably delayed or withheld. For purposes of this Section, "assignment" shall be deemed to include any transaction or series of transactions which results in an aggregate change in ownership or control of more than fifty percent (50%) of Integrator. Any attempted assignment or delegation in contravention hereof shall be void.

16.    APPLICABLE LAW; JURISDICTION.    This Agreement shall be construed and the rights of the parties shall be determined, in all respects, according to the laws of the State of California (USA), without giving effect to the principles of conflicts of law thereof. This Agreement shall not be governed by the provisions of the 1980 United Nations Conventions on Contracts for the International Sale of Goods. The parties hereto expressly consent and submit to the exclusive jurisdiction of the courts of California for the adjudication or disposition of any claim, action or dispute arising out of this Agreement. The prevailing party will be entitled to recover its expenses including, without limitation, reasonable attorney's fees.

17.    DISPUTE RESOLUTION.

17.1    Good Faith Negotiations.    The parties shall attempt to resolve by good faith and diligent negotiation any dispute, controversy or claim between them arising out of or relating to this Agreement, or the breach, termination or invalidity thereof. If such negotiations are not initiated within thirty (30) days of one party's request to the other for negotiations and/or concluded within forty-five (45) days after initiation, either party may seek legal remedies.

17.2    Admissibility.    ALL DISCUSSIONS AND DOCUMENTS PREPARED PURSUANT TO ANY ATTEMPT TO RESOLVE A DISPUTE UNDER THIS PROVISION ARE CONFIDENTIAL AND FOR SETTLEMENT PURPOSES ONLY AND SHALL NOT BE ADMITTED IN ANY COURT OR OTHER FORUM AS AN ADMISSION OR OTHERWISE AGAINST A PARTY FOR ANY PURPOSE.

31


18.    NOTICES.    All notices, requests, demands, consents, agreements and other communications required or permitted to be given under this Agreement shall be in writing and shall be mailed to the party to whom notice is to be given, by first class mail, postage prepaid or sent by facsimile and electronically confirmed, or via delivery service, properly addressed as set forth below. Notice shall be deemed received upon the earlier of actual receipt or: (i) one (1) business day after facsimile or delivery; or (ii) five (5) business days after deposit into the mail.

For QUALCOMM:   For Integrator:

QUALCOMM Incorporated
Wireless Systems Division
5775 Morehouse Drive
San Diego, CA 92121-1714
Facsimile No.: (858) 651-6045
Attn.: Sr. Director, Contracts
 
    
    
    
    
    
    
Copy: QWS Division Counsel
Facsimile No.: (858) 658-1558		    

Addresses, facsimile numbers and telephone numbers can be changed by providing notice to the other party in accordance with this Section.

19.    PARTY RELATIONSHIP.    It is expressly understood that the parties intend by this Agreement to establish the relationship of independent contractors. No party shall have any authority to create or assume in the name of or on behalf of the other party any obligation, express or implied, to act or to purport to act as the agent or legally empowered representative of the other party hereto for any purpose whatsoever.

20.    ENTIRE AGREEMENT.    This Agreement, including Exhibits attached hereto, constitutes the complete agreement between the parties relating to the subject matter hereof, and supersedes any prior or contemporaneous agreements or representations affecting such subject matter.

21.    MISCELLANEOUS PROVISIONS.    This Agreement is a nonexclusive agreement. No addition to or modification of this Agreement shall be effective unless made in writing and signed by the respective representatives of QUALCOMM and Integrator. Any delay or failure to enforce at any time any provision of this Agreement shall not constitute a waiver of the right thereafter to enforce each and every provision thereof. If any of the provisions of this Agreement is determined to be invalid, illegal, or otherwise unenforceable, the remaining provisions shall remain in full force and effect. The parties' rights and obligations which by their sense and context are intended to survive any termination or expiration of this Agreement shall so survive.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Effective Date.

QUALCOMM Incorporated       

By:
    
 
By:
    

Name:
    
 
Name:
    

Title:
    
 
Title:
    

32


Attachment 1


QUALCOMM COMMERCIAL RATES

QUALCOMM's Labor Rates are as follows:

Labor Category
   Hourly Rate (in U.S. $)
Sr. Principal Engineer   $490
Principal Engineer   $350
Project Manager   $246
Systems/Sr. Engineer   $215
Hardware/Software Engineer   $215
Administration   $168
Associate Engineer/Sr. Field Engineer   $167
Sr. Technician/Sr. Field Technician   $158
Field Engineer   $158
Field Technician/Technician   $115
Admin Support   $99

Travel costs and materials are not included in the above Labor Rates. As needed, they will be separately quoted by QUALCOMM.

QUALCOMM Labor Rates are established at a corporate level and adjusted annually. Current Labor Rates above are effective through December 31, 2004.

33


Attachment 2


INTEGRATOR'S APPLICATION AND INTEGRATED PRODUCT

1.  Integrator's Application is:

    
    
 (to be completed by Integrator prior to Agreement signing).

2.  Integrator's Integrated Product is:

    
    
 (to be completed by Integrator prior to Agreement signing).

3.  Modifications that will be made to the Product for the Integrated Product are:

    
    
 (to be completed by Integrator prior to Agreement signing).

This Attachment may only be amended by written agreement of QUALCOMM.

34


Attachment 3


MODIFICATIONS

The following Categories of Modifications to the QUALCOMM Globalstar Satellite Data Modem, GSP1620 require Buyer to sign QUALCOMM's Product Supply and/or Integration Agreement, as indicated below. Modifications indicating "Not Approved" are not authorized by QUALCOMM. No other modifications are permitted.

 
   Modification Category
   Supply
Agreement
   Integration
Agreement
   Not Approved
1   Add Enclosure and Mounting       X    
2   Power Source Hook Up (DB-15)   X        
3   Surge Protection Implementation (e.g., fusing)   X        
4   Change Cable and Cable Lengths       X *  
5   RF Modification (excluding RF Module)       X *  
6   Use in Proximity of GPS Installation   X *      
7   Antenna Change (i.e., other than DRA)       X *  
8   Hook Up to Interface (user serial standard RS232)   X        
9   Software Change (including interface Operation System Source Code)           X
10   Hardware Modification           X
11   Develop Maritime Application       X *  
12   Develop Explosive Environment Application           X
13   Develop Aviation Application       X *  
14   Develop ATC Application       X *  
15   Grounding   X        
16   Tandem Connection (i.e., ganging)   X *      
17   Use of DB-9 UTDM SW to Access SDM's Port (e.g., use of commands)       X *  
18   Any other Modification, Category or Application not listed above to be reviewed by QUALCOMM on a case-by-case basis            

* Requires QUALCOMM Engineering Consultation.

35


Attachment 4


MUTUAL NON-DISCLOSURE AGREEMENT


OMITTED

36


Attachment 5


RMA (Return Material Authorization) Procedures
for QUALCOMM Globalstar Products

Prior to Requesting an RMA

        1.     Buyer personnel must be registered with QUALCOMM Customer Service to submit a request for RMA. To obtain registration status, Buyer must email QUALCOMM Customer Service at gstechsupport@qualcomm.com. (A list of authorized personnel that can obtain RMAs from QUALCOMM should be provided in advance, if possible, by Buyer).

        2.     Buyer personnel will receive an email confirmation that they have been authorized to submit RMAs.

RMA Procedure

        1.     Buyer should REQUEST an RMA from QUALCOMM using one of the following methods:

Or

        2.     The QUALCOMM Customer Service Representative will log the information into QUALCOMM's call tracking software system, which automatically assigns a case number for the RMA request. Please note, this is not the RMA number. The RMA number will be assigned if all warranty criteria have been met. Please include a description of the problem and the RMA documentation with the part(s) to be repaired.

        3.     Buyer will RECEIVE a confirmation and case number for the RMA request from QUALCOMM Customer Service via email.

        4.     Buyer will RECEIVE an RMA number, shipping instructions, and RMA confirmation documents from QUALCOMM Customer Service via email or fax.

        5.     Buyer must package the RMA part(s) for shipment for safe arrival at QUALCOMM, including the following:

37

        6.     Buyer must SHIP the RMA part(s) per QUALCOMM shipping instructions indicated on the RMA documentation.

Please refer to the applicable contract agreement with QUALCOMM to determine the responsible party and schedule for payment of associated shipping costs (i.e., customs clearance, freight costs, and associated duties and taxes) required for transport or parts(s) to and from QUALCOMM; and for Repair Evaluation Fees and Repair Fees.

        7.     For tracking purposes, Buyer must OBTAIN the Airway Bill (AWB) number from the freight forwarder and email both the AWB number and the associated RMA number to QUALCOMM Customer Service at status.rma@qualcomm.com shipment.

        8.     QUALCOMM will notify Buyer of estimated ship schedule for repaired part(s) via email.

        9.     Buyer should CONFIRM the receipt of the repaired product(s) and validate the functionality of the part (i) by sending email to status.rma@qualcomm.com.

        10.   Upon receipt of Buyer's confirmation, QUALCOMM will close the Case and the RMA. If confirmation has not been received in thirty (30) days from date of shipment, QUALCOMM will close the case and the RMA accordingly.

This Procedure may change from time to time in QUALCOMM's sole discretion. Buyer should contact QUALCOMM for questions.

38


Attachment 6

AGREEMENT FOR REPAIR OF OUT-OF-WARRANTY
GLOBALSTAR HARDWARE
(CDMA Gateway Equipment, Satellite Phone Products, Satellite Data Modems)
AGREEMENT No.                              

This Agreement for Repair of Out-of-Warranty Globalstar Hardware ("Agreement") is entered into as of                         , 2004 ("Effective Date") by and between QUALCOMM Incorporated ("QUALCOMM"), a Delaware U.S.A. corporation having offices at 5775 Morehouse Drive, CA 92121, and                         , a                          ("Customer"), with offices located at                         , and each may be referred to as "party" and collectively as "parties" to this Agreement.

1.0    Term.    The term of this Agreement shall be for one (1) year from the Effective Date. During the term, all QUALCOMM repairs for out-of-warranty hardware shall be governed by this Agreement.

2.0    Repairs.    QUALCOMM will perform reasonable repairs based on the availability of QUALCOMM's personnel and component parts. Customer will be notified if QUALCOMM deems any part not repairable, and Customer may request to purchase a replacement part at that time (to be sold subject to availability and under a separate agreement).

3.0    Return Material Authorization (RMA).    All returns shall be handled in accordance with QUALCOMM's RMA Procedures. For each repair requested during the term and for Customer's return of any part(s) for repair, Customer shall request an RMA Number.

Any unauthorized part received by QUALCOMM will be returned at the Customer's sole expense. If RMA number is issued by QUALCOMM and QUALCOMM fails to receive Customer's defective part within thirty (30) days of issuance of the RMA number, QUALCOMM reserves the right to cancel the RMA upon written notice to Customer, and retain any monies received by the Customer for said repair. Customer may cancel an RMA prior to Customer's shipment of part(s) upon written notice to QUALCOMM. Upon receipt of Customer's notice, QUALCOMM will cancel the associated RMA number. Information in the form of Exhibit A hereto will be required prior to each repair.

4.0    Price.    QUALCOMM's repair prices do not include shipping, duties or taxes. For all out-of-warranty repairs, Customer agrees to pay all shipping, duties and taxes associated with the return of part(s) to QUALCOMM, and associated with the repaired part(s) being returned to Customer. To the extent reasonably possible, QUALCOMM will publish current repair prices on QUALCOMM's Customer Service website. In certain cases, QUALCOMM will provide an estimated repair price upon Customer's return of the part and QUALCOMM's evaluation of necessary repair.

5.0    Payment.    All payments shall be made in U.S. Dollars. Unless otherwise agreed to by QUALCOMM, Repair Evaluation Fee(s) must be received prior to QUALCOMM's issuance of an RMA and evaluation of a part. Payment terms for out-of-warranty repairs are twenty five percent (25%) of the estimated repair price due prior to QUALCOMM's issuance of an RMA number and Customer's shipment of the part(s), and seventy five percent (75%) of the actual repair price due within thirty (30) days after QUALCOMM's delivery to the FCA Point (i.e., QUALCOMM's dock). QUALCOMM will invoice on a NET 30 basis. Payments shall reference this Agreement number and must be made by credit card based on Customer information below or via wire transfer to the bank location set forth below, or such other bank location as QUALCOMM may from time to time designate in writing:

39

Customer shall pay to QUALCOMM a late charge on any undisputed past due amounts at the rate of one percent (1%) per month or part thereof or the maximum amount permitted by law, whichever is less. In the event Customer disputes an amount invoiced by QUALCOMM, Customer shall promptly notify QUALCOMM in writing the basis for such dispute, and shall pay the undisputed portion of such invoice as set for therein.

6.0    Delivery.    Estimated lead times for QUALCOMM repairs will be provided to Customer upon request. Delivery terms are FCA, QUALCOMM's dock, San Diego, California (the "FCA Point"). QUALCOMM will notify Customer in writing when the repaired part(s) is available for pick up (the "Notification Date"). If Customer fails to pick up the repaired part(s) following thirty (30) days after the Notification Date, QUALCOMM will invoice, and Customer will be responsible, for payment of daily storage fees at QUALCOMM's then-current rate until such time as the repaired part(s) is picked up by Customer.

7.0    Warranty.    Customer has twenty (20) days from Customer's receipt of a repaired part to notify QUALCOMM that the part is non-working (and in no case can a notification be received later than forty five (45) days from the Notification Date. Otherwise, Customer shall be deemed to have accepted the part(s) "AS IS, and without warranty of any kind." If a returned part is non-working, Customer will provide QUALCOMM a detailed explanation of the problem, and photographs if available, when obtaining an RMA number from QUALCOMM. If upon QUALCOMM's reasonable evaluation it is determined that the part remains defective or otherwise non-working as a direct result of QUALCOMM's actions (or the actions of its suppliers), QUALCOMM will repair the part at QUALCOMM's expense and ship the part back to Customer at QUALCOMM's expense (except for duties and taxes which will be the responsibility of Customer). THE WARRANTY IN THIS SECTION 6.0 IS IN LIEU OF ALL OTHER WARRANTIES EXPRESSED OR IMPLIED, WHETHER ARISING FROM LAW, CUSTOM, OR CONDUCT AND IS CUSTOMER'S SOLE REMEDY RELATED TO QUALCOMM'S REPAIR OF A PRODUCT.

8.0    Termination for Cause.    Either party may terminate this Agreement for material default by the other party of an obligation, condition or covenant of this Agreement, which, if curable, is not cured within thirty (30) days of the date after the other party notifies the defaulting party of such default.

9.0    Agreement/Governing Law.    Customer's Purchase Order and/or terms and conditions do not apply. This Agreement, and the RMA Procedures, are the complete agreement between the parties regarding the subject matter and this Agreement shall be construed according to the laws of the State of California without giving effect to the principles of conflicts of law thereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.

    
   QUALCOMM Incorporated

By:
    
 
By:
    

Name:
    
 
Name:
    

Title:
    
 
Title:
    

40


Exhibit A

MCN or Part #
   Part Name
   Quantity
   Serial #
   Repair Price (in
US $)*
                $  
                $  
                $  
                      
            TOTAL REPAIR PRICE,
EXCLUDING SHIPPING,
TAXES & DUTIES		   $  

* Repair price is per QUALCOMM's Website or as quoted in writing by QUALCOMM.

Complete Description of Problem:     

    

    

    

CUSTOMER CREDIT CARD INFORMATION AND AUTHORIZATION:
 

Credit Card Type:
    
 
Number:     
  
Expiration Date:     
  
Name on Credit Card:     
  
Customer's Signature:     
  

For credit card payments, Customer will include pertinent information above. Customer's signature is authorization for QUALCOMM to charge the prices stated on this Agreement to Customer's credit card.

41

SHIP TO ADDRESS FOR REPAIRED PART(S):  

    
 

    
 

    
 

SHIPPING INFORMATION (if Customer requests QUALCOMM's shipment of repaired part(s) in lieu of Customer pickup):

Freight Forwarder:
    
 
Freight Account #     
  
Ship Method:     
  

42



QuickLinks

CONFIDENTIAL TREATMENT
QUALCOMM Incorporated QUALCOMM Globalstar Satellite Products Supply Agreement Agreement No. 04-QC/NOG-PRODSUP-001
AGREEMENT
EXHIBIT A
QUALCOMM Supply Terms & Conditions December 2, 2003
Attachment 1
MUTUAL NON-DISCLOSURE AGREEMENT
OMITTED
QUALCOMM INCORPORATED OUT-OF-WARRANTY HARDWARE REPAIR PRICING GLOBALSTAR PRODUCTS (Prices Effective Through December 31, 2004)
RMA (Return Material Authorization) Procedures for QUALCOMM Globalstar Products
AGREEMENT FOR REPAIR OF OUT-OF-WARRANTY GLOBALSTAR HARDWARE (CDMA Gateway Equipment, Satellite Phone Products, Satellite Data Modems) AGREEMENT No.
Exhibit A
QUALCOMM Commercial Rates
EXHIBIT B
ACCESSORIES
EXHIBIT C
PRODUCT PRICING
EXHIBIT D
MODIFICATIONS
EXHIBIT E
Integration Agreement
Agreement No.
QUALCOMM COMMERCIAL RATES
INTEGRATOR'S APPLICATION AND INTEGRATED PRODUCT
MODIFICATIONS
MUTUAL NON-DISCLOSURE AGREEMENT
OMITTED
RMA (Return Material Authorization) Procedures for QUALCOMM Globalstar Products

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.7


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


Amendment No. 1
To
QUALCOMM Globalstar Satellite Products Supply Agreement
Agreement No. 04-QC/NOG-PRODSUP-001
(NOG-C-04-0137)

        This Amendment No. 1 ("Amendment") is effective as of 25 May, 2005 ("Amendment Effective Date") by and between QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") and Globalstar LLC, a limited liability company ("Buyer"), with respect to the following facts:

RECITALS

        A.    QUALCOMM and Buyer executed the QUALCOMM Globalstar Satellite Products Supply Agreement No. 04-QC/NOG-PRODSUP-001 dated April 13, 2004 (the "Agreement"), pursuant to which QUALCOMM agreed to sell to Buyer, and Buyer agreed to purchase Globalstar products from time to time for resale to customers under such Supply Terms and Conditions.

        B.    Buyer has previously notified QUALCOMM of a name change from New Operating Globalstar LLC to Globalstar LLC.

        C.    QUALCOMM will modify the Globalstar GSP-1600 Tri-Mode Satellite Phone ("GSP-1600") to replace the LCD and will make available a limited quantity thereof to Globalstar for resale to its customers for use on the Globalstar System as further described in this Amendment, provided that Buyer submits a Purchase Order for products in the quantities, pricing and delivery schedule set forth on Attachment 1(a) to this Amendment, concurrent with the execution of this Amendment, and makes payments as required on Attachment 2 to this Amendment.

        D.    By this Amendment, QUALCOMM and Buyer agree to amend the Agreement to add additional products and modify certain terms and conditions, as of the Amendment Effective Date, as further described herein.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereby modify the Agreement as set forth herein.

        1.    Definitions Section.    The Definitions Section is hereby amended as follows:

1

        2.     Section 10, Delivery Schedule is hereby added as follows:

        3.     Section 11, Special Warranty Terms for GSP-1600 is hereby added as follows:

        4.     Section 12, Limited Quantities is hereby added as follows:

2

        5.     Section 13, Payment Terms is hereby added as follows:

        6.     Section 14, Term Extension is hereby added as follows:

        EFFECTIVENESS.    Except as modified by this Amendment No. 1 as of the date set forth above, the Agreement shall remain in full force and effect. No modification, amendment or other change may be made to this Amendment No. 1 or any part thereof unless reduced to writing and executed by authorized representatives of both parties.

        IN WITNESS THEREOF, the parties have executed this Amendment No.1 as of the date set forth above.

QUALCOMM Incorporated   Globalstar LLC

By:
 
/s/  SCOTT J. BECKER      
 
By:
 
/s/  JAMES MONROE III      

Name:
 
Scott J. Becker
 
Name:
 
James Monroe III

Title:
 
Sr. Vice President and General Manager,
QUALCOMM Wireless Systems Division
 
Title:
 
CEO

3

Attachment 1
To Amendment No. 1
Pricing and Quantities for GSP-1600 Purchase Order

Product
   Pricing
   Quantity
   Extended Price
GSP-1600 Portable Phone   [*]   25,000   [*]
GCK-1410 Car Kit       24,000    
GSP-2900 Fixed Phone       5,000    
Wall Charger       3,700    
Travel Charger       3,000    
Cigarette Lighter Adapter       37,000    
Data Kit       18,500    

4

Attachment No. 1(a)
to Amendment No. 1
Delivery Schedule For Current Product

 
   Description
   GCK-
1410
Car Kit
   Enhanced
Fixed
Phone
   Wall
Chargers
   Travel
Chargers
   CLA
   Data
Kit
   GSP-
1600
    Quantity   24,000   5,000   3,700   3,000   37,000   18,500   25,000

 
 
Month
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6/1/05   1                            
7/21/05   2   500                        
8/25/05   3   500                        
9/30/05   4   0       740   600   3,700   1,850    
10/31/05   5   1920       740   600   3,700   1,850    
11/30/05   6   1920   400   740   600   3,700   1,850    
12/31/05   7   1920   400   740   600   3,700   1,850    
1/31/06   8   1920   400   740   600   3,700   1,850    
2/28/06   9   2400   400           3,700   1,850   1600
3/31/06   10   1920   500           3,700   1,850   3200
4/30/06   11   1920   400           3,700   1,850   3600
5/31/06   12   2400   500           3,700   1,850   3600
6/30/06   13   1920   500           3,700   1,850   5000
7/31/06   14   1920   500                   4000
8/31/06   15   1920   500                   4000
9/30/06   16   920   500                    
10/31/06   17                            
11/30/06   18                            
12/31/06   19                            

5

Attachment 2
To Amendment No. 1
Payment Terms Applicable to GSP-1600 Purchase Order

        [*] of GSP-1600 Purchase Order value invoiced at Amendment No. 1 signing and due NET 5 business days from QUALCOMM's invoice date.

        [*] of GSP-1600 Purchase Order value invoiced six (6) months after the Effective Date; payment NET 30 days from date of QUALCOMM invoice.

        [*] of product price invoiced upon delivery of each unit to the FCA Point; payment NET 30 days from date of QUALCOMM invoice.

        If any product ordered under this Amendment is delivered within six months after the Effective Date, 92.5% of the price of such product price shall be invoiced upon delivery to the FCA Point; payment NET 30 days from date of QUALCOMM's invoice.

6



QuickLinks

CONFIDENTIAL TREATMENT
Amendment No. 1 To QUALCOMM Globalstar Satellite Products Supply Agreement Agreement No. 04-QC/NOG-PRODSUP-001 (NOG-C-04-0137)

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.8


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


Amendment No. 2
To
QUALCOMM Globalstar Satellite Products Supply Agreement
Agreement No. 04-QC/NOG-PRODSUP-001
(NOG-C-04-0137)

        This Amendment No. 2 ("Amendment") is effective as of 25 May, 2005 ("Amendment Effective Date") by and between QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") and Globalstar LLC, a limited liability company ("Buyer"), with respect to the following facts:

RECITALS

        A.    QUALCOMM and Buyer executed the QUALCOMM Globalstar Satellite Products Supply Agreement No. 04-QC/NOG-PRODSUP-001 (NOG-C-04-0147) dated April 13, 2004, as amended by Amendment No. 1 dated May 25, 2005 (the "Agreement"), pursuant to which QUALCOMM agreed to sell to Buyer, and Buyer agreed to purchase Globalstar products from time to time for resale to customers under the terms thereof.

        B.    QUALCOMM will manufacture and deliver next generation Globalstar products including the GSP-1700 Globalstar Single-Mode Portable Phone, GSP-1720 Globalstar Satellite Data and Voice Module, GCK-1700 Car Kit and various accessories ("New Products") provided that Buyer submits the Purchase Order For New Products concurrently with the execution of this Amendment.

        C.    By this Amendment, QUALCOMM and Buyer agree to amend and modify the Agreement to add the New Products and modify certain terms and conditions as further described herein.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereby modify the Agreement as set forth herein.

        1.    Definitions Section.    The Definitions Section is amended as follows:

1

2

        2.    Section 4. Level 1 Service for Tri-Mode Portable Phones.    Section 4 is deleted in its entirety and replaced with the following.

        3.     Section 15, Accessory Specification Changes, is hereby added as follows:

        4.     Section 16, Documentation, is hereby added as follows:

3

        5.     Section 17, Additional Terms Applicable to the Satellite Data and Voice Module is hereby added as follows:

4

        6.     Section 18, Right of Purchase is added as follows:

        7.     Section 19, Additional Terms Applicable to New Product Order is hereby added as follows:

        8.     Section 20, Additional Terms for Termination for Cause shall be added as follows:

5

6

        10.   Section 21, Delivery Schedule For New Products is hereby added as follows:

Number of Calendar Days
Delay for delivery of the
GSP-1700 or GCK-1700
Car Kit
   Late
Delivery
Charge
0-58   [*]
59-88   [*]
89-118   [*]
119-148   [*]

        11.   Section 22, Special Warranty Terms for GSP-1700 and GCK-1700 Car Kit are hereby added as follows:

7

        12.   Section 23, Program and Test Tools, is hereby added as follows:

        13.   Section 24, Certification is hereby added as follows:

        14.   Section 25, Status Meetings and Production Readiness Reviews is hereby added as follows:

8

        15.   Section 26. GCK-1700 Car Kit and SDVM Antenna is hereby added as follows:

        16.   Section 27, Antenna Delivery is hereby added as follows:

9

        17.   Section 28, Buyer Logo is hereby added as follows:

        18.   Section 29, Indemnification by Buyer- Antennas is hereby added as follows:

        19.   Section 30, Term Extension is hereby added as follows:

        20.   Exhibits.

        EFFECTIVENESS.    Except as modified by this Amendment No. 2, the Agreement shall remain in full force and effect. No modification, amendment or other change may be made to this Amendment No. 2 or any part thereof unless reduced to writing and executed by authorized representatives of both parties.

        IN WITNESS THEREOF, the parties have executed this Amendment No. 2 as of the Amendment Effective Date.

QUALCOMM Incorporated   Globalstar LLC

By:
/s/  SCOTT J. BECKER      
 
By:
/s/  JAMES MONROE III      

Name:
Scott J. Becker
 
Name:
James Monroe III

Title:
Sr. Vice President and General Manager
 
Title:
CEO

10

Attachment 1
To Amendment No. 2
Pricing and Quantities for Purchase Order For New Products

Product/Accessory
   Unit Price
   Quantity
   Extended Price
GSP-1700 Phone       180,000    
GCK-1700 Car Kit/Docking Kit   [*]   60,000   [*]
GSP-1720 Satellite Data and Voice Module       20,000    
Wall Charger       10,000    
Travel Charger       8,000    
Cigarette Lighter Adapter       100,000    

11

Attachment 1(a)
To Amendment No. 2
Delivery Schedule For New Products

Attached

12


ATTACHMENT NO. 1(a) TO AMENDMENT NO. 2
DELIVERY SCHEDULE FOR NEW PRODUCTS

 
   Description

   New Mobile
Phone

   New Car Kit

   SDVM

   New Wall
Chargers

   New Travel
Chargers

   New
CLA
    Quantity                        
    Unit Shipments                        
                   
                                
                                
                                
[*]   [*]
                                
                                
                                
                                

13

Attachment 2
To Amendment No. 2
Payment Terms Applicable to Purchase Order For New Products

        [*] of Purchase Order For New Products invoiced at Amendment No. 2 signing and due NET 5 business days from QUALCOMM's invoice date.

        [*] of Purchase Order For New Products value invoiced ten (10) months after Amendment No. 2 signing; payment NET 30 days from date of QUALCOMM invoice.

        [*] of product price invoiced upon delivery of each unit; payment NET 30 days from date of QUALCOMM invoice.

14

Attachment 3
To Amendment No. 2
Termination Charges Applicable to Purchase Order For New Products

Termination Date
   Amount Due
QUALCOMM
1   On or before August 19, 2005    
2   On or before November 30, 2005   [*]
3   On or before February 24, 2006    
4   On or before May 26, 2006    
5   On or before August 18, 2006    

15

Attachment 4
To Amendment No. 2
GSP-1700 Product Specification

16

Attachment 5
To Amendment No. 2
GCK-1700 Product Specification

17

Attachment 6
To Amendment No. 2
GSP-1720 Product Specification

18

Attachment 7
To Amendment No. 2
Exhibit D-1
Modifications

        The following Categories of Modifications to the QUALCOMM Globalstar Satellite Data and Voice Module, GSP-1720 require Buyer or its Integrator to sign QUALCOMM's Product Supply and/or Integration Agreement, as indicated below. Modifications indicating "Not Approved" are not authorized by QUALCOMM. No other modifications are permitted.

Modification Category
   Supply
Agreement
   Integration
Agreement
   Not Approved
1   Add Enclosure and Mounting   X        
2   Power Source Hook Up (DB-25)   X        
3   Surge Protection Implementation (e.g., fusing)   X        
4   Change Cable and Cable Lengths   X        
5   RF Modification (excluding RF Module)       X*    
6   Use in Proximity of GPS Installation   X*        
7   Antenna Change (i.e., other than approved/certified configurations)       X*    
8   Hook Up to Interface (user serial standard RS232)   X        
9   Software Change (including Interface Operation System Source Code)           X
10   Hardware Modification           X
11   Develop Maritime Application   **X        
12   Develop Explosive Environment Application           X
13   Develop Aviation Application       ***X    
15   Grounding   X        
16   Tandem Connection (i.e., ganging)   X*        
17   Use of DB-9 UTDM SW to Access SDVM's Port (e.g., use of commands)       X*    
18   Any other Modification, Category or Application not listed above to be reviewed by QUALCOMM on a case-by-case basis            
*
Requires QUALCOMM Engineering Consultation.

**
The SDVM has not been tested and/or certified by QUALCOMM for use in Maritime Applications.

***
Following engineering consultation with QUALCOMM, at QUALCOMM's sole discretion, QUALCOMM may issue a letter to third party that qualifies them for Supply Agreement only. The SDVM is not DO-160 or FCC certified for use in Aviation applications as of the Amendment Effective Date.

19

Attachment 8
To Amendment No. 2
QUALCOMM's Commercial Rates

        QUALCOMM's Labor Rates are as follows:

Labor Category
   Hourly Rate
(in U.S. $)
Subject Matter Expert   $ 582.00
Sr. Principal Engineer   $ 420.00
Principal Engineer   $ 307.00
SW/HW/Sys/Test Engineer   $ 238.00
Associate Engineer   $ 175.00
IT Engineer   $ 202.00
Technician   $ 111.00
Field Engineer   $ 138.00
Program Manager   $ 288.00
Sr. Administration   $ 292.00
Administration   $ 164.00
Admin. support   $ 99.00

        Travel costs and materials are not included in the above Labor Rates. As needed, they will be separately quoted by QUALCOMM.

        QUALCOMM Labor Rates are established at a corporate level and adjusted annually. Current Labor Rates above are effective from February 1, 2005 through January 31, 2006.

20



QuickLinks

CONFIDENTIAL TREATMENT
Amendment No. 2 To QUALCOMM Globalstar Satellite Products Supply Agreement Agreement No. 04-QC/NOG-PRODSUP-001 (NOG-C-04-0137)
ATTACHMENT NO. 1(a) TO AMENDMENT NO. 2 DELIVERY SCHEDULE FOR NEW PRODUCTS

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.9


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


Amendment No. 3
To
QUALCOMM Globalstar Satellite Products Supply Agreement
Agreement No. 04-QC/NOG-PRODSUP-001
(NOG-C-04-0137)

        This Amendment No. 3 ("Amendment") is effective as of 30 September, 2005 ("Amendment Effective Date") by and between QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM") and Globalstar LLC, a limited liability company ("Buyer"), with respect to the following facts:

RECITALS

        A.    QUALCOMM and Buyer executed the QUALCOMM Globalstar Satellite Products Supply Agreement No. 04-QC/NOG-PRODSUP-001 dated April 13, 2004, as amended (the "Agreement"), pursuant to which QUALCOMM agreed to sell to Buyer, and Buyer agreed to purchase Globalstar products from time to time for resale to customers under such Supply Terms and Conditions.

        B.    QUALCOMM and Buyer executed Amendment No. 1 dated May 25, 2005 to the QUALCOMM Globalstar Satellite Products Supply Agreement No. 04-QC/NOG-PRODSUP-001 dated April 13, 2004, pursuant to which QUALCOMM agreed to modify the Globalstar GSP-1600 Tri-Mode Satellite Phone to replace the LCD ("GSP-1600") and make available a limited quantity of GSP-1600s and other Globalstar products to Globalstar for resale to its customers.

        C.    QUALCOMM and Buyer executed Amendment No. 2 dated May 25, 2005 to the QUALCOMM Globalstar Satellite Products Supply Agreement No. 04-QC/NOD-PRODSUP-001 dated April 15, 2004, pursuant to which QUALCOMM agreed to manufacture and deliver New Products to make available for sale to Globalstar for resale to its customers.

        D.    Buyer desires to purchase and QUALCOMM agrees to sell to Buyer additional GSP-1600s and other Globalstar products, provided that Buyer submits noncanceleable Purchase Orders for such products in the quantities, pricing and delivery schedule set forth on Attachments 1 and 2 of this Amendment and Buyer makes payments as required on Attachment 3 to this Amendment.

        E.    By this Amendment, QUALCOMM and Buyer agree to amend the Agreement to add additional products and modify certain terms and conditions, as of the Amendment Effective Date, as further described herein.

AGREEMENT

        NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the parties hereby modify the Agreement as set forth herein.

1


        1.    Definitions Section.    The Definitions Section is hereby amended to add the following definition:

        2.     Section 10(a), Delivery Schedule for Additional GAP Products is hereby added as follows:

        3.     Section 13(a). Payment Terms for Additional GAP Product Purchase Orders is hereby added as follows:

        EFFECTIVENESS.    Except as modified by this Amendment No. 3 as of the date set forth above, the Agreement shall remain in full force and effect. No modification, amendment or other change may be made to this Amendment No. 3 or any part thereof unless reduced to writing and executed by authorized representatives of both parties.

        IN WITNESS THEREOF, the parties have executed this Amendment No. 3 as of the date set forth above.

QUALCOMM Incorporated   Globalstar LLC

By:
 
/s/  MEG COMITO      
 
By:
 
/s/  KELLY L. ROSE      

Name:
 
Meg Comito
 
Name:
 
Kelly L. Rose

Title:
 
Sr. Manager, Contracts
 
Title:
 
Director, Contracts

2

Attachment 1
To Amendment No. 3
Pricing and Quantities for Additional GAP Products Purchase Orders

Product
   Pricing
   Quantity
   Extended Price
GSP-1600 Portable Phone       10,000    
GCK-1410 Car Kit       6,000    
GSP-2900 Fixed Phone (Enhanced)   [*]   500   [*]
GSP-1220 Wall Charger       500    
Cigarette Lighter Adapter       7,500    
Privacy Handsets       5,000    

3

Attachment No. 2
to Amendment No. 3
Delivery Schedule For Products Ordered under Additional GAP Products Purchase Orders

Description
   GCK-1410
Car Kit
   Enhanced
Fixed
Phone—
GSP-2900
   Wall
Chargers
GSP-1220
   CLA
(1600)
   GSP-1600
Portable
Phone
   Privacy
Handset
GCK-0008
12/30/05                       240
1/30/06   480                   960
2/28/06   960                   960
3/31/06   960       500           960
4/30/06   960                   960
5/31/06   960                   920
6/30/06   1440           2,000   1,000    
7/31/06   240           4,000   4,000    
8/31/06               1,500   4,000    
9/30/06                   1,000    
10/31/06       400                
11/30/06       100                
   
 
 
 
 
 
  Total   6,000   500   500   7,500   10,000   5,000
   
 
 
 
 
 

4

Attachment 3
To Amendment No. 3
Payment Terms Applicable to Additional GAP Products Purchase Orders

        [*] of total Additional GAP Products Purchase Orders value invoiced at Amendment No. 3 signing and due NET 5 business days from QUALCOMM's invoice date.

        [*] of total Additional GAP Products Purchase Order value invoiced six (6) months after the Effective Date; payment NET 30 days from date of QUALCOMM invoice.

        [*] of product price invoiced upon delivery of each unit to the FCA Point; payment NET 30 days from date of QUALCOMM invoice.

        If any product ordered under this Amendment is delivered within six (6) months after the Effective Date, 92.5% of the price of such product price shall be invoiced upon delivery to the FCA Point; payment NET 30 days from date of QUALCOMM's invoice.

5



QuickLinks

CONFIDENTIAL TREATMENT
Amendment No. 3 To QUALCOMM Globalstar Satellite Products Supply Agreement Agreement No. 04-QC/NOG-PRODSUP-001 (NOG-C-04-0137)

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.10


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


GLOBALSTAR COMPANIES

DESIGNATED EXECUTIVE INCENTIVE
COMPENSATION MEMORANDUM

This is a Memorandum of Agreement ("Memorandum") entered into by GLOBALSTAR LLC (together with its post-Conversion [defined below] successor, hereinafter individually and collectively "Globalstar"), with the following employee: FUAD AHMAD ("Participant" and collectively with ANTHONY J. NAVARRA, MEGAN FITZGERALD, ROBERT MILLER, DENNIS ALLEN, and STEVEN BELL, one of the "Participants").

This Memorandum sets forth the terms and conditions of a supplemental executive incentive compensation program (the "Plan") that Globalstar has made available severally to each of the Participants. The Memorandum is an integration and complete restatement of all prior documents and discussions between and among Globalstar and any or all of the Participants concerning the Plan, and completely supersedes and replaces any such prior documents and discussions. The undersigned Participant acknowledges that his opportunity to become a Participant in the Plan has arisen because of his succession to responsibilities formerly discharged on behalf of Globalstar by [*], whose status as a Participant terminated on May 31, 2004, and that the undersigned Participant's entitlement under the Plan varies from the entitlement of other Participants as expressly set forth in Sections 11 (iii) and 11 (v), below. This Plan does not otherwise modify or affect any Participant's terms and conditions of employment by Globalstar. Anything in this Memorandum to the contrary notwithstanding, the Plan does not, expressly or by implication, create a contract for, or any assurance of, a fixed or minimum duration of employment by any of the Participants with Globalstar. Each Participant acknowledges and agrees that all agreements and understandings in this Memorandum are expressly made subject to Globalstar's at-will employment policy, as well as all other applicable terms and conditions of the Globalstar Personnel Policies and Procedures Manual.

The understandings and agreements in this Memorandum are personal to the named Participants and do not attach to, nor will they become an incident of, any Participant's office.

I.    PRINCIPLES

II.    DEFINITIONS

Capitalized terms used in this Memorandum but not defined elsewhere, either in this Memorandum or in the Operating Agreement (defined below), have the meanings ascribed to them below; provided, however, that in the event of conflict the definition in this Memorandum shall prevail:

2

3

III.    THE PLAN

4

5

6

7

GENERAL PROVISIONS

8

9


Illustrative Schedule to Incentive Compensation Memorandum

Effective as of November 1, 2004

ASSUMES $50,000,000 THERMO INVESTMENT

Valuation
Date
   Thermo
Equity
Value*
   Floor
Valuation
   Compensatable
Value
   Indicated
Payment
   Annual
Payment
Limitation
   Actual
Cumulative
Payments
Oct. 06   $ 175,000,000   $ 150,000,000   $ 25,000,000   $ 500,000   $ 500,000   $ 500,000
Oct. 07     175,000,000     150,000,000     25,000,000     0     750,000     500,000
Oct. 07     212,500,000     150,000,000     65,500,000     750,000     750,000     1,250,000
Oct. 08     400,000,000     150,000,000     250,000,000     4,500,000     4,500,000     5,000,000
Oct. 08     400,000,000     150,000,000     250,000,000     3,750,000     3,750,000     5,000,000

ASSUMES $44,000,000 THERMO INVESTMENT

Valuation
Date
   Thermo
Equity
Value*
   Floor
Valuation
   Compensatable
Value
   Indicated
Payment
   Annual
Payment
Limitation
   Actual
Cumulative
Payments
Oct. 06   $ 157,000,000   $ 132,000,000   $ 25,000,000   $ 500,000   $ 500,000   $ 500,000
Oct. 07     194,500,000     132,000,000     62,500,000     750,000     750,000     1,250,000
Oct. 08     194,500,000     132,000,000     62,500,000     0     3,750,000     1,250,000
Oct. 08     382,000,000     132,000,000     250,000,000     3,750,000     3,750,000     5,000,000

ASSUMES $31,000,000 THERMO INVESTMENT

Valuation
Date
   Thermo
Equity
Value*
   Floor
Valuation
   Compensatable
Value
   Indicated
Payment
   Annual
Payment
Limitation
   Actual
Cumulative
Payments
Oct. 06   $ 118,000,000   $ 93,000,000   $ 25,000,000   $ 500,000   $ 500,000   $ 500,000
Oct. 07     155,000,000     93,000,000   $ 62,500,000     750,000     750,000     1,250,000
Oct. 08     218,000,000     93,000,000     125,000,000     1,250,000     3,750,000     2,500,000
Oct. 08     343,000,000     93,000,000     250,000,000     3,750,000     3,750,000     5,000,000

General Note:
The hypothetical fact patterns illustrated in this schedule are for illustrative purposes only and furnish no basis for any express or implied promise to pay Incentive Compensation, or of employment for any minimum duration for any Participant.
*
Includes value of consideration received from previous arms length transfers.

10


ATTACHMENT 1

Vesting Schedule

For additional clarification, amounts due under this Designated Executive Incentive Compensation Memorandum are limited to the following:

11


ATTACHMENT 2

Participant Responsibilities

As part of each year's budget cycle, the CEO of Globalstar shall establish employment performance criteria for each Participant which that Participant must attain as of the next succeeding Valuation Date in order to retain eligibility. Each Participant shall receive periodic written statements of that Participant's criteria.

12



QuickLinks

CONFIDENTIAL TREATMENT
GLOBALSTAR COMPANIES DESIGNATED EXECUTIVE INCENTIVE COMPENSATION MEMORANDUM
Illustrative Schedule to Incentive Compensation Memorandum Effective as of November 1, 2004
ATTACHMENT 1 Vesting Schedule
ATTACHMENT 2 Participant Responsibilities

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.12


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


QUALCOMM Incorporated
Agreement for Sale of Globalstar Satellite Mobile Phones


Agreement No. 04-QC/NOG-MOBILES-001

This Agreement for Sale of Globalstar Satellite Mobile Phones ("Agreement") is entered into as of April 13, 2004 (the "Effective Date") by and between QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM"), with offices located at 5775 Morehouse Drive, San Diego, CA 92121-1121 and New Operating Globalstar LLC, a Delaware limited liability corporation ("Buyer"), with offices located at 3110 Zanker Road, San Jose, CA 95134, with respect to the following facts:

A.    Buyer has acquired from Globalstar and affiliated entities substantially all the assets utilized in the Globalstar business.

B.    QUALCOMM is willing to deliver to Buyer a certain quantity of the Product from its inventory as further described herein and in accordance with the delivery schedule (the "Schedule") as set forth in this Agreement.

NOW, THEREFORE, the parties, in consideration of the mutual promises set forth herein, agree as follows:

1.    DEFINITIONS.    Capitalized terms not defined herein shall have the meanings set forth in the QUALCOMM Supply Terms and Conditions (the "Supply Terms"), a copy of which is attached hereto as Exhibit A and incorporated herein as fully as if set forth in its entirety herein:

"Product" or "Product(s)" means the Globalstar GSP-1600 Tri-Mode Portable Phone, generically provisioned and tested by QUALCOMM, and Documentation, without a SIM card, battery, spares or any accessories, delivered in standard bulk packaging, consisting of individual bag/box units in master pack containers, and accompanied by retail packaging materials in bulk.

"Schedule" means the delivery schedule attached hereto as Exhibit B.

"SIM Card(s)" means subscriber information module card(s).

"Term" shall commence on the Effective Date and continue for one (1) year unless terminated as provided herein.

2.    DELIVERY; LIMITED TO INVENTORY.    QUALCOMM shall deliver twenty two thousand five hundred (22,500) units of Product, which represents QUALCOMM's inventory of Product as of the Effective Date, which are new and in working order, less (i) three thousand (3000) such units to be retained by QUALCOMM for FRU and warranty purposes and (ii) any additional such units needed to fulfill any orders therefore received and accepted by QUALCOMM prior to the Effective Date. Delivery shall be in accordance with the Schedule and Supply Terms, provided that the following provisions of the Supply Terms shall not apply to this Agreement and the Product(s) delivered hereunder: Section 3 (Orders); Section 8 (Inspection; Acceptance). Upon thirty (30) days written notice, Buyer may request (a) a change in the delivery location or (b) a change in delivery quantities, provided that any significant increase in quantities to be delivered shall be subject to QUALCOMM's ability to expedite provisioning, testing and preparation of such additional quantities for shipment. All deliveries of Product(s) required hereunder are limited to QUALCOMM's inventory, and in the event all or a portion of such inventory is destroyed, stolen or damaged without fault of QUALCOMM,


deliveries shall be decremented accordingly. In any event, QUALCOMM shall not be obligated hereunder to manufacture or otherwise acquire units of Product not in inventory.

3.    PRICE.    The price for Product(s) shall be [*] per unit.

4.    LEVEL 1 SERVICE CENTER.    Buyer shall perform Level 1 Service for the Product(s) in accordance with QUALCOMM's written instructions. Level 1 Service includes the following (and any other service that is authorized in writing by QUALCOMM): battery installation and replacement, cellular antenna replacement, and SIM card installation and replacement, if any.

5.    WARRANTY.    The Warranty Period for the Product(s) shall be ninety (90) days following QUALCOMM's delivery of the Product(s) to the FCA Point. Notwithstanding anything set forth in the Supply Terms, the Warranty Period applicable to any warranty replacements shall be the greater of (a) the time remaining on the Warranty Period for the returned Product(s), or (b) thirty (30) days after delivery of the repaired or replaced Product(s) to FCA Point.

6.    ENTIRE AGREEMENT.    This Agreement, including the Supply Terns and other Exhibits attached hereto, constitutes the complete agreement between the parties relating to the subject matter hereof, and supersedes any prior or contemporaneous agreements or representations affecting such subject matter.

7.    ORDER OF PRECEDENCE.    In the event of conflict between the Supply Terms and the balance of this Agreement, including the other Exhibits hereto, the Agreement shall govern.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.

QUALCOMM Incorporated   New Operating Globalstar, L.L.C.

By:
/s/ Scott J. Becker
 
By:
/s/ William F. Adler

Name:
Scott J. Becker
 
Name:
William F. Adler
Title: Sr. Vice President & General Manager
QUALCOMM Wireless Systems Division		   Title: VP Legal & Regulatory


EXHIBIT A


QUALCOMM Supply Terms & Conditions


December 2, 2003

NOTE: EXHIBIT A, OMITTED HERE, IS IDENTICAL TO EXHIBIT A ATTACHED TO MASTER AGREEMENT ENTITLED

"QUALCOMM Globastar Satellite Products Supply Agreement, dated April 13, 2004
Agreement No. 04-QC/NOG/NOG-PRODSUP-001/NOG-C-04-0137"


EXHIBIT B


DELIVERY SCHEDULE


(TO BE AGREED TO IN WRITING BETWEEN QUALCOMM AND NOG
NO LATER THAN THIRTY (30) DAYS FOLLOWING THE EFFECTIVE DATE)



QuickLinks

CONFIDENTIAL TREATMENT
QUALCOMM Incorporated Agreement for Sale of Globalstar Satellite Mobile Phones
Agreement No. 04-QC/NOG-MOBILES-001
EXHIBIT A
QUALCOMM Supply Terms & Conditions
December 2, 2003
EXHIBIT B
DELIVERY SCHEDULE
(TO BE AGREED TO IN WRITING BETWEEN QUALCOMM AND NOG NO LATER THAN THIRTY (30) DAYS FOLLOWING THE EFFECTIVE DATE)

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.13


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


First Amendment to
Agreement for Sale of Globalstar Satellite Mobile Phones
Agreement No. 04-QC/NOG-MOBILES-001/GLLC-C-04-0137
between
QUALCOMM Incorporated and Globalstar LLC

This First Amendment (the "First Amendment") to Agreement for Sale of Globalstar Satellite Mobile Phones dated April 13, 2004 ("Agreement") is entered into as of October 5, 2004 (the "Amendment Date") by and between QUALCOMM Incorporated, a Delaware corporation ("QUALCOMM"), with offices located at 5775 Morehouse Drive, San Diego, CA 92121-1121 and Globalstar LLC, a Delaware limited liability company, formerly known as New Operating Globalstar LLC ("Buyer"), with offices located at 461 S. Milpitas Blvd., Milpitas, CA 95305, with respect to the following facts:

A.    Buyer has acquired from Globalstar, L.P. and affiliated entities substantially all the assets utilized in the Globalstar business.

B.    Under the terms of the Agreement discussed above, QUALCOMM has contracted to deliver 22,500 Tri-Mode Portable Phones per the terms thereof, a certain number of which have been delivered as discussed below.

C.    QUALCOMM is willing to deliver to Buyer the remainder of the Tri-Mode Portable Phones to be sold thereunder (the "Remaining Products") in accordance with the terms of the Agreement as amended hereby and the delivery schedule (the "Schedule") attached as Exhibit B hereto.

D.    Buyer seeks to obtain the Remaining Products and accessories from QUALCOMM in exchange for an equity interest in Globalstar LLC as further described in this First Amendment and the related agreements described herein.

E.    Buyer further seeks to obtain additional remaining Tri-Mode Portable Phones in QUALCOMM's inventory, retained by QUALCOMM for FRU, warranty and/or other purposes as more fully described in this Amendment (the "Additional Phones").

NOW, THEREFORE, in consideration of the promises and the mutual covenants and obligations hereinafter set forth, the parties hereby agree as follows (with capitalized terms used herein and not otherwise defined having the meanings set forth in the Agreement):

1.    Section 2.    DELIVERY; LIMITED TO INVENTORY is hereby revised to add the following:

"2.1    Deliveries Prior to Amendment Date.    As of the Amendment Date, QUALCOMM has delivered fifteen thousand (15,000) units of the Product to Buyer.

2.2    Remaining Product.    Subject to Section 3 below, QUALCOMM shall deliver the Remaining Products to Buyer in accordance with the Schedule.

2.3    Accessories.    Subject to Section 3 below, QUALCOMM shall deliver any Accessories identified on Exhibit C hereto which remain in QUALCOMM's inventory as of the Amendment Date (the "Accessories"), on a mutually agreed to date within thirty (30) days of the Amendment Date.

2.4    Additional Warranted Phones.    Subject to Section 3.3 below, thirty (30) days following QUALCOMM's completion of its warranty obligations for the Remaining Products under the Agreement, QUALCOMM shall provide Buyer with a written notice regarding the total number of Additional Phones QUALCOMM has in its inventory that are new and have been tested by


QUALCOMM to be in good working order. Buyer shall be afforded a right of first offer to place one (1) order to purchase any or all such Additional Phones other than a reasonable number thereof, as determined in QUALCOMM's sole discretion, to provide a warranty for all such Additional Phones (the "Additional Warranted Phones"). Such offer shall be irrevocable for thirty (30) days from the date of QUALCOMM's notice, after which, if Buyer shall not have accepted by placing such order, or shall have ordered less than all of the offered Additional Warranted Phones, QUALCOMM may sell, to any customer, any Additional Warranted Phones not ordered by Buyer for a value equal to or exceeding the price offered to Buyer. The Additional Warranted Phones shall include a ninety (90) day warranty period following QUALCOMM's delivery to the FCA Point. The Parties agree that the total number of Additional Warranted Phones QUALCOMM may provide under the Section 2.4 in exchange for equity interest pursuant to Section 3.3 shall not exceed seven thousand five hundred (7,500).

2.5    Additional Un-Warranted Phones.    Provided Buyer has purchased all of the Additional Warranted Phones offered by QUALCOMM pursuant to Section 2.4 hereof, following the delivery of the Additional Warranted Phones and expiration of the warranty obligations related thereto, should QUALCOMM have any Tri-Mode Portable Phones remaining in its inventory, Buyer shall be afforded a right of first offer to place one (1) order to purchase any or all such Tri-Mode Portable Phones (the "Additional Un-Warranted Phones") at a price Not-to-Exceed [*]. Such offer shall be irrevocable for thirty (30) days from the date of QUALCOMM's notice and shall provide the opportunity for buyer to observe at Buyer's expense, QUALCOMM's standard radiated testing process for the Additional Un-Warranted Phones prior to QUALCOMM's delivery thereof, after which, if Buyer shall not have accepted by placing such order, or shall have ordered less than all of the offered Additional Un-Warranted Phones, QUALCOMM may sell, to any customer, any Additional Un-Warranted Phones not ordered by Buyer for a value equal to or exceeding the price offered to Buyer. The Additional Un-Warranted Phones are provided without warranty of any kind, and payment for such Additional Un-Warranted Phones is twenty-five percent (25%) due following P.O. placement and prior to delivery, and seventy-five percent (75%) within thirty (30) days after FCA delivery, payable in cash or by use of a credit memo issued by QUALCOMM to Buyer, on a NET 30 basis. Any repairs needed for the Additional Un-Warranted Phones will be at QUALCOMM's then current, standard repair prices and are subject to the availability of parts.

Nothing set forth herein shall require QUALCOMM to perform additional work or testing beyond QUALCOMM's normal procedures used for the 22,500 Tri-Mode Portable Phones in order to fulfill the requirement in Sections 2.4 and 2.5.

All Additional Phones are delivered "AS IS" and without warranty of any kind, and payment for Additional Phones is twenty-five percent (25%) due following P.O. placement and prior to delivery, and seventy-five percent (75%) within thirty (30) days after FCA delivery, payable on a NET 30 basis. Any repairs needed for the Additional Phones will be at QUALCOMM's then current, standard repair prices.

2.    Section 3.    PRICE AND PAYMENT TERMS is hereby replaced in its entirety with the following:

"3.1    Price Paid for Product Deliveries Prior to Amendment Date.    The price for each unit to be delivered is [*]. As of the Amendment Date, Buyer has paid QUALCOMM a total of four million two hundred thousand dollars ($4,200,000.00) (the "Credit Amount") consisting of full payment for [*] units delivered prior to the Amendment Date totaling four million dollars ($4,000,000.00), and the required twenty five percent (25%) down-payment for [*] units delivered prior to the Amendment Date totaling two hundred thousand dollars ($200,000.00) and no payment for [*] units delivered prior to the Amendment Date. If Buyer has paid QUALCOMM all amounts due from Buyer and its affiliates under agreements with QUALCOMM and Purchase Orders issued thereunder, QUALCOMM will provide, at Buyer's option (i) a cash reimbursement of the amount received in excess of one million eight hundred thousand seventy five dollars (US$1,875,000.00) due for the 22,500 Tri-Mode Portable Phones; or (ii) a credit memo against Buyer's future receivables within ten (10) business days of Buyer's written notice requesting either (i) or (ii).


3.2    Equity Interest.

Effective as of the date the Third Amended and Restated Limited Liability Company Agreement of Buyer is approved and becomes effective in accordance with its terms, in substantially the form of Exhibit D attached hereto ("LLC Agreement") and in exchange for:

(1)    a membership interest in Globalstar LLC aggregating 309,278 units (equating to three percent (3.0%) of the total equity of Globalstar LLC), calculated pursuant to the applicable provisions of the Debtors' Fourth Amended Joint Plan under Chapter 11 of the Bankruptcy Code, effective June 29, 2004; and

(2)    QUALCOMM's receipt of payments by Buyer pursuant to the terms of this First Amendment in the aggregate amount of one million eight hundred thousand seventy five dollars (US$1,875,000.00) (payments previously made by Buyer to QUALCOMM pursuant to Section 3.1 will be counted towards the $1,875,000 amount),

then, QUALCOMM will provide to Buyer:

(A)    the Remaining Products as further described in this First Amendment;

(B)    the Accessories;

(C)    a credit memo or reimbursement check in the amount of the excess of the Credit Amount over one million eight hundred thousand seventy-five dollars (US$1,875,000) pursuant to Section 3.1 hereto.

Until such time as Buyer has satisfied the requirements of Section 3.2 (1) above, Buyer shall continue to pay QUALCOMM [*] cash per unit of Product delivered in accordance with the following payment terms pursuant to the Agreement: twenty-five percent (25%) due following P.O. placement and prior to delivery, and seventy-five percent (75%) within thirty (30) days after FCA delivery, payable on a NET 30 basis.

3.3    Additional Equity Interest.

Effective upon:

(1)    Buyer's issuance of additional membership interests in Globalstar LLC of 13.75 Units for each Additional Warranted Phone to be delivered by QUALCOMM pursuant to Section 2.4 above (this member interest together with the membership interest described in Section 3.2(1) above are referred to collectively herein as the "Equity Interest") and

(2)    QUALCOMM's receipt of a cash payment by Globalstar LLC for an amount equal to [*] for each Additional Warranted Phone to be delivered by QUALCOMM pursuant to Section 2.4 above,

Then, QUALCOMM will provide to Buyer:

(A)    the Additional Warranted Phones as further described in Section 2.4 to be delivered on a mutually agreed to date within thirty (30) days upon completion of Section 3.3 (1) and (2) hereto.

The parties acknowledge that no portion of the Equity Interest shall be certificated, and upon each such issuance Buyer shall provide QUALCOMM with reasonably satisfactory evidence that QUALCOMM is the record owner of the Units constituting the Equity Interest.

3.    In connection with the issuance of the Equity Interest to QUALCOMM, QUALCOMM hereby represents and warrants to Buyer as follows:

        QUALCOMM is acquiring the Equity Interest for its own account and not on behalf of any other person, and only for the purpose of holding for investment and not with a view to any further distribution thereof. No other person is participating with, or providing or otherwise arranging funds, or credit for QUALCOMM in respect to the acquisition of the Equity Interest. Except as contemplated by the LLC Agreement, QUALCOMM has no agreement, arrangement, or understanding for transfer of any part of the Equity Interest to any other person. QUALCOMM (a) has such knowledge and experience in financial and business matters to be able to evaluate the merits and risks of its investment in the Equity Interest, and (b) is able to bear the economic risk of the investment in the


Equity Interest and to hold the same for purposes of investment, and (c) is an "accredited investor" within the meaning of Regulation D under the Securities Act of 1933, as amended. QUALCOMM is aware that no market exists for the resale of the Equity Interest.

4.    Except as amended by this First Amendment, the terms and conditions of the Agreement remain in full force and effect.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Amendment Date.

QUALCOMM Incorporated   Globalstar LLC

By:
/s/ Scott J. Becker
 
By:
/s/ Anthony J. Navarra

Name:
Scott J. Becker
 
Name:
Anthony J. Navarra
Title: Sr. Vice President & General Manager
QUALCOMM Wireless Systems Division		   Title: President

Attachments:
Exhibit A-None
Exhibit B-Delivery Schedule
Exhibit C-List of Accessories
Exhibit D-Third Amended and Restated Limited Liability Company Agreement


EXHIBIT B
DELIVERY SCHEDULE
for Tri-Mode Portable Phones

QUANTITY
   DELIVERY DATE
1000   May 1, 2004-Complete
1000   May 18, 2004-Complete
1000   June 3, 2004-Complete
350*   June 8, 2004-Complete
650   June 10, 2004-Complete
1000   June 17, 2004-Complete
2000   July 1, 2004-Complete
1750   July 15, 2004-Complete
250*   July 15, 2004-Complete
1600   July 29, 2004-Complete
400*   July 29, 2004-Complete
1500   August 12, 2004-Complete
900   August 25, 2004-Complete
350*   August 25, 2004-Complete
1250   September 16, 2004-Complete
400*   September 30, 2004
850   September 30, 2004
1250   October 14, 2004
1250   October 28, 2004
1250   November 11, 2004
1250   November 30, 2004
1250   December 16, 2004
TOTAL 22,500    

* To be provisioned for and picked up by Globalstar Australia.

All other Phones to be provisioned for and picked up by Globalstar Canada.


EXHIBIT C
LIST OF ACCESSORIES

As of September 17, 2004, the total value of the Inventory is $652,343.
(Depletion may occur based on orders received through the Amendment Date.)

Item
   Product Line
   Product
Number
   Inv
   Price (US)
   Model
Number
   MCN Description
1   Data Cable, Kit   GDC-1100   7       65-82263-3   KIT, TRI-MODE DATA, GS, MDL CXDTA0512
     
2   Data Cable, Tri Mode   GDC-1200   342       CV90-81024-1   CABLE ASSY, DATA, PRODUCTION
     
3   UT Diagnostic Monitor UTDM   GDM-2000   13       64-C1005-7   KIT,COMMERCIAL,UTDM
     
4   Protective Case, Kit   GPC-1000   9       65-81319-2   KIT,GS PORTABLE UT,PROTECTIVE CASE,PROD,RETAIL
     
5   Protective Case       7,647       CV90-81053-2   CASE, LEATHER, PHONE, GLOBALSTAR PORTABLE
     
6   Leather Pouch       4,050   [*]   CV90-81702-2   POUCH, LEATHER, PHONE, GLOBALSTAR PORTABLE
     
7   Leather Case, Russia   GPC-1200   200       CV90-81053-3   CASE, LEATHER, PHONE, GLOBALSTAR PORTABLE(RUSSIA)
     
8   Universal Travel Charger, Kit   GSP-1210   1,686       65-81313-2   KIT, GS PORTABLE UT, UNIVERSAL TRAVEL CHARGER, PROD
     
9   Argentina Travel Charger, Kit   GSP-1211   36       65-82233-1   KIT,UTC,ARGENTINE,GS PORT UT,CXTVL0521
     
10   Argentina Travel Charger       200       CV90-70794-3   ARGENTINA TRAVEL CHARGER
     
11   Argentina Wall Charger       1,000       CV90-70793-5   AC WALL CHARGER,ARGENTINE
     
12   China AC Wall Charger   GSP-1231   10,000       CV90-70793-6   AC WALL CHARGER,PORTABLE UT,CHINA,GLOBALSTAR
     
13   UT Program Support Tool   GST-1900   8       64-C1005-4   KIT,GS WWT,USER TERMINAL PROGRAM SUPPORT TOOL
     
14   PST Cable kit   GST-1910   7       65-82460-1   KIT, CABLE,PST, GS
     
15   Fixed PST Cable       2,666       CV90-81467M3   CBL,DM/PST EIA-561 ANLG FXD PH (5 COND.)
     
16   Carkit Headset   GCK-0016   1,250       330-25507-0000   HEADSET,SOAP ON ROPE STYLE EARPHONE-MIC
     
17   Carkit Headset Adapter   GCK-0017   1,189   [*]   CV90-81218-1   ADAPTER, HEADSET, GS CARKIT
     
18   Carkit Headset, Kit   GCK-0018   16       65-81698-1   KIT, HEADSET, CARKIT, GS
     
19           1,250       330-25507-0000   HEADSET, SOAP ON ROPE STYLE EARPHONE-MIC


EXHIBIT D

Third Amended and Restated Limited Liability Company Agreement
Of
Globalstar LLC

Formerly Known as New Operating Globalstar LLC

SUPERCEDED BY CERTIFICATE OF INCORPORATION
OF GLOBALSTAR, INC.



QuickLinks

CONFIDENTIAL TREATMENT
First Amendment to Agreement for Sale of Globalstar Satellite Mobile Phones Agreement No. 04-QC/NOG-MOBILES-001/GLLC-C-04-0137 between QUALCOMM Incorporated and Globalstar LLC
EXHIBIT B DELIVERY SCHEDULE for Tri-Mode Portable Phones
EXHIBIT C LIST OF ACCESSORIES
As of September 17, 2004, the total value of the Inventory is $652,343. (Depletion may occur based on orders received through the Amendment Date.)
EXHIBIT D
Third Amended and Restated Limited Liability Company Agreement Of Globalstar LLC Formerly Known as New Operating Globalstar LLC

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.14


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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.

Globalstar Canada Satellite Co.      
115 Matheson Blvd. West, Suite 100
Mississauga, Ontario L5R 3L1 CANADA
Tel: (905) 712-6673; Fax (905) 890-2175		  
CONTRACT

The following numbers must appear on all related correspondence, shipping papers, and invoices:
CONTRACT NUMBER NO: GCSC-C-06-0001
 
 
 

To:
Richardson Electronics, Ltd.
("Seller")
2410 Vantage Drive
Elgin, IL 60123 USA
 
From:
Globalstar Canada Satellite Co.
("Buyer")
115 Matheson Blvd. West, Suite 100
Mississauga, Ontario L5R 3L1
CANADA
CONTRACT DATE
   DELIVERY (INCOTERM)
   SHIPPING METHOD
   CARRIER
   SHIP TO
April 17, 2006   FOB Point of Shipment   Seller's Choice   Seller's Choice   To be confirmed by
Buyer
ITEM
   QUANTITY
   DESCRIPTION OF WORK
   UNIT PRICE
(USD)
   EXT. PRICE
(USD)
1A   8   Seller shall manufacture and deliver Globalstar Antennas   See   See
1B   Lot   ("Products") in accordance with the Contract Documents   Additional   Additional
2A   60,000   listed on Page 2.   Pages   Pages
2B   Lot            
3   Lot   This Contract supersedes Authorization To Proceed Letter        
        PJR0106-002, Revision 2, dated 6 February 2006.        

 
 
 
 
The Work to be performed under this Contract shall
Commence on 8 February 2006. The Contract Completion
Date for all deliveries is 31 July 2009.
 
 
 
 

 
 
 
 
See Continuation Pages.
 
 
 
 
FIRM FIXED PRICE CONTRACT (PURCHASE PRICE)   TOTAL   $10,520,055

TERMS AND CONDITIONS: Per attached Terms and Conditions of Sale dated 10 March 2006.

1

Authorized by:
GLOBALSTAR CANADA SATELLITE CO.		   Accepted by:
RICHARDSON ELECTRONICS, LTD.

By:
/s/ Kelly L. Rose
 
By:
/s/ Greg Peloquin
Name: Kelly L. Rose
   Name: Greg Peloquin
Title: Director, Contracts
   Title: Exec. VP & General Manager of RF & Wireless
Date: 21 Apr. 06
   Date: 4/20/06

(A)    The Contract Documents are as follows:

(1)    Outdoor Antenna Unit (ODU) and Passive Antenna Statement of Work, GS-05-1073, Version 1.0, dated 29 November 2005; and

(2)    Globalstar Outdoor Unit Specification, GS-05-1068, Version 1.0, dated 29 November 2005

(B)    This is a Firm Fixed-Price Contract:

Line
Item
   Description
   Quantity
   Unit Price
(USD)
   Extended Price
(USD)
   Delivery Schedule
1A   Prototype ODU                
    Passive Patch   2   [*]   [*]   May 5, 2006

 
 
Passive Quadrifilar
 
2
 
 
 
 
 
May 26, 2006

 
 
Active Patch
 
2
 
 
 
 
 
May 5, 2006

 
 
Active Quadrifilar
 
2
 
 
 
 
 
May 26, 2006
1B   Test Data   Lot   NSP   NSP   10 Weeks ARO

2
Line
Item
   Description
   Quantity
   Unit Price
(USD)
   Extended Price
(USD)
   Delivery Schedule
2A   90 Units                

 
 
• Patch Active
 
30
 
[*]
 
[*]
 
90 Units
    • Patch Passive   5           14 Weeks
    • Quadrifilar Active   30           after approval of
    • Quadrifilar Passive   5           4 prototypes
    • Quadrifilar Maritime
  Active		   15            
    • Quadrifilar Maritime
  Passive		   5            

 
 
59,910 Units
 
 
 
 
 
 
 
 

 
 
• Patch Active
 
22,770
 
 
 
 
 
Production
    • Patch Passive   1,195           6 Weeks
    • Quadrifilar Active   22,170           after approval of
    • Quadrifilar Passive   1,615           90 units
    • Quadrifilar Maritime
  Active		   11,985            
    • Quadrifilar Maritime
  Passive		   175            
2B   Monthly Test Data on Production Samples   Lot   NSP   NSP   Initial Production, then monthly thereafter
3   NRE   Lot   [*]   [*]    
OPTION   Option—Follow on Units, pricing good to 30 June 2007                

3
Line
Item
   Description
   Quantity
   Unit Price
(USD)
   Extended Price
(USD)
   Delivery Schedule
    • Patch Active   TBD   [*]   TBD   In accordance with
    • Patch Passive   TBD       TBD   Contract Production
    • Quadrifilar Active   TBD       TBD   Delivery Schedule
    • Quadrifilar Passive   TBD       TBD    
    • Quadrifilar Maritime
  Active		   TBD       TBD    
    • Quadrifilar Maritime
  Passive		   TBD
 
Quantity availability is subject to manufacturing capacity at time of order		       TBD   Delivery availability is subject to manufacturing capacity and lead time at time of order

NSP = Not Specifically Priced

The parties anticipate that the Production Delivery Schedule will commence 6 weeks after approval of the 90 initial units and Seller will use commercially reasonable efforts to meet the following Minimum Monthly Deliveries:

Antenna Type
   Minimum Monthly
Deliveries
(units)
   Maximum Monthly
Deliveries *
(units)
Active Patch   912   1186
Passive Patch   48   62
Active Quadrifilar   888   1154
Passive Quadrifilar   65   85
Active Marine Quadrifilar   480   624
Passive Marine Quadrifilar   10   13

* unless a higher quantity is mutually agreed to in advance

Seller shall submit to Buyer a confirmed Production Delivery Schedule by month and year no later than thirty (30) days after Contract Date.

This Contract is fully funded.

With regard to Line Item 3, NRE, Buyer made an advance payment of [*] under the Authorization To Proceed which Seller acknowledges receiving. The balance of [*] is payable within 30 days of receipt of Seller's invoice which Buyer acknowledges authorizing Seller to submit.

TOTAL FIRM FIXED-PRICE                             US$10,520,055

4

10 March 2006


TERMS AND CONDITIONS OF SALE

(1)    EXCLUSIVITY OF TERMS

The terms and conditions set forth herein together with those appearing on the face hereof or attachments hereto shall constitute the complete and exclusive statement of all terms and conditions of the Contract between the Seller and the Buyer.

(2)    ACCEPTANCE OF CONTRACT

This Contract shall be subject to acceptance by the Seller only at the Seller's corporate headquarters and by the Buyer only at the Buyer's corporate headquarters.

(3)    PACKAGING, DELIVERY AND SHIPMENT TERMS

The Products supplied by the Seller shall be shipped FOB point of shipment. Delivery shall occur at the time the Product has been delivered at the FOB point. Seller shall be responsible for packaging the Products and choosing shipping method and carrier. Prices are quoted exclusive of transportation, insurance and taxes, including without limitation, any taxes whatsoever that might be levied after the Product is delivered due to the Seller's security interest in the Products. Prices do not include license fees, customs fees, duties or any other charges related thereto. The Buyer will pay any and all shipping charges, premiums, taxes, fees, duties, documentation, handling and other charges related thereto and shall hold the Seller harmless therefrom; provided that if Seller, in its sole discretion, chooses to make any such payment, Buyer will reimburse Seller, in full, upon demand. Buyer shall provide "Ship To" addresses and instructions to Seller. Shipping costs shall be billed to Buyer's account to be identified by Buyer.

(4)    ACCEPTANCE AND DELIVERY OF SHIPPED PRODUCT

Seller shall provide to Buyer pertinent Test Data from production samples that demonstrate conformance with the requirements of the Acceptance Test Procedure and the Specification. Buyer shall notify Seller of acceptance or rejection of Test Data within 5 working days. Upon receipt of notification of acceptance of Test Data, Seller may ship Product.

(5)    PERFORMANCE

Seller shall not be liable for any incidental or consequential damages due to delay of shipment or for any incremental cost incurred by Buyer in the obtaining of replacement goods. Time is of the essence will not apply to this Contract. The Buyer agrees to accept and pay for partial shipments.

(6)    SECURITY AGREEMENT

It is agreed by Buyer and Seller that as to the Products which are the subject of this Contract and all accessions thereto and proceeds thereof, a purchase money security interest shall attach with the Seller as a secured party, and with respect to the Products which are resold in any form by the Buyer, Seller shall be the assignee of any security interest which the Buyer retains or obtains in such Products until the Buyer has made payment in full therefor in accordance with the terms hereof. Payment terms under this Contract are net 30 days in accordance with Article 16 of this Contract. Buyer shall be in default if it fails to make any payment as provided for herein or if bankruptcy, receivership or insolvency proceedings are instituted by or against the Buyer or if the Buyer makes any assignment for the benefit of its creditors. Upon Buyer's default, Seller shall have all of the rights and remedies of a secured creditor, as well as those of a seller of goods under the Uniform Commercial Code, and other applicable law, including, but not limited to, the "right to take possession" of the Products herein furnished. Seller may remedy any default and may waive any default without waiving the default remedied or without waiving any prior or subsequent default. Buyer agrees to cooperate fully and assist the Seller in perfecting and/or continuing the Seller's security interest and to execute such documents and accomplish such filings and/or recordings thereof as the Seller may deem necessary for the

5

protection of the Seller's interest in the Products herein furnished. The making of this contract of sale by the Buyer and the Seller shall constitute their signing of this security agreement.

(7)    ASSIGNMENT

This Contract may not be assigned, either in whole or in part, by either party without the express written approval of the other party (which approval shall not be unreasonably withheld or delayed); provided however, this clause does not restrict the Seller from utilizing subsidiaries or other divisions of its company in the manufacture of the Products.

(8)    WARRANTY

The Seller warrants that for a period of twelve (12) months from delivery of the Product, such Product will be free from defects in materials and workmanship and will conform to the applicable specifications, drawings and samples. At the option of Seller, Buyer's remedy under warranty shall be a no charge repair or replacement with a compliant Product. WITH THE EXCEPTION OF THE ROHS, WEEE AND PACKAGING DIRECTIVES WARRANTY, THIS WARRANTY IS EXPRESSLY IN LIEU OF AND EXCLUDES ALL OTHER WARRANTIES, EXPRESS AND/OR IMPLIED, AND ALL OTHER OBLIGATIONS OR LIABILITIES ON THE PART OF THE SELLER, UNLESS SUCH OTHER WARRANTIES, OBLIGATIONS OR LIABILITIES ARE EXPRESSLY AGREED TO IN WRITING BY THE SELLER.

The following criteria must be met by the Buyer prior to the Seller's consideration of any warranty claim. The specific Product must still be within the warranty period. The Buyer may contact the Seller to clarify the exact warranty period as discussed above. The Buyer must obtain a Return Material Authorization (RMA) number from the Seller in advance of the return of the Product. These warranty claims must include the product type, reason for the return and any pertinent serial numbers. The Buyer is responsible for all transportation charges and risk for the returned Product to Seller and must see that the Product is packaged correctly. The Seller is responsible for all transportation charges and risk for the returned Product to Buyer for which warranty remedies were provided. Product submitted for warranty repair and determined not to be defective, shall be returned to Buyer at Buyer's expense.

(9)    ROHS, WEEE AND PACKAGING DIRECTIVES

Requirements, Warranty and Indemnity

Buyer has determined that it has a duty to comply with certain environmental standards required by:

(1)
Directive 2002/95/EC of the European Parliament and of the Council of 27 January 2003 on the restriction of the use of certain hazardous substances in electrical and electronic equipment (the "ROHS Directive");

(2)
Directive 2002/96/EC of the European Parliament and of the Council of 27 January 2003 on waste electrical and electronic equipment (the "WEEE Directive"); and

(3)
Directive 94/62/EC of the European Parliament and of the Council of 20 December 1994 on packaging and packaging waste (the "Packaging Directive").

Buyer requires that all Product delivered under this Contract must comply with the above Directives, including any amendments by Commission Decision, Joint Declaration of EU authorities and Directive 2003/108/EC of 8 December 2003 as well as any statute or statutory provision or subordinate legislation introduced or modified from time to time to implement such Directives into EU Member State Law (the "EU Directives").

Seller agrees to manufacture and deliver Product in full compliance with the EU Directives.

Seller represents, warrants and certifies to Buyer that the Product fully complies with and is correctly marked and labeled in accordance with the EU Directives. Seller must provide Buyer with a declaration of such compliance for the Product as well as a Material Composition Declaration. Any Product that is determined to be noncompliant by proper EU national authorities is considered a defective product.

6


Seller shall immediately, at the sole option of Buyer, either (i) give full refund to Buyer of the purchase price of any defective product or (ii) at no charge to Buyer repair or replace any defective product with a compliant product.

Seller shall defend, indemnify, release and hold harmless Buyer and its Affiliates, directors, officers, employee benefit plans, shareholders, and employees or any of them from any and all third party claims and resulting costs, demands, fines, liabilities, loss penalties, arising out of or as a result of a breach of this clause.

Additional Information

In accordance with the ROHS Directive, no Product may contain 0.1% wt or more of the following substances: lead, hexavalent chromium, mercury, polybrominated biphenyls (PBBs) and polybrominated diphenyl ethers (PBDEs) or 0.01% wt or more of cadmium.

Seller must take all reasonable steps and exercise all due diligence needed to comply with the ROHS Directive, including without limitation, utilizing only ROHS-compliant subcontractors, auditing of subcontractors for compliance, establishing quality assurance processes and procedures for compliance, and maintaining proper documentation of compliance. At the earliest opportunity but in any case no later than shipment of the first 90 production units, Seller shall provide Buyer with (a) Certificate of Compliance with EU Directives (ROHS, WEEE and Packaging); and (b) Material Composition Declarations from suppliers in accordance with Forms IPC-1752-1 v1.0 and IPC-1752-2 v1.0.

Seller must take all reasonable steps to comply with the WEEE Directive information and product marking requirements, where applicable, including a symbol of the crossed-out wheelie bin, with a horizontal bar underneath signifying that the Product has been manufactured after the WEEE Directive came into force, and a marking properly identifying Buyer as the producer of the Product, as instructed by Buyer.

Upon request, Seller will furnish to Buyer, as soon as reasonably practical but in any event within 15 business days of such request, any information and assistance as Buyer, in its reasonable opinion, requires to comply with Buyer's obligations under the EU Directives, including without limitation, the following:

Seller should keep records for traceability and compliance documentation purposes for at least five (5) years.

(10)    INTELLECTUAL PROPERTY RIGHTS INDEMNITY

Seller, at its own expense, shall defend, indemnify and hold the Buyer, Buyer's agent or affiliate, or Buyer's customer harmless against any third party claim or suit and resulting in damages or other judgment rendered against the Buyer based on an allegation that the manufacture of any Product delivered under this Contract or the normal intended use, lease or sale of any such Product infringes any U.S. or foreign letters patent, copyright, trade mark, trade secret or other intellectual property right, provided that the Buyer promptly notifies the Seller in writing of any such claim or suit and gives the Seller authority and such assistance and information as is available to the Buyer for the defense of such claim or suit. Seller will pay all claims, royalties, settlements, judgments and reasonable attorney's fees but Seller will not be responsible for any compromise made without Seller's written consent. If a Product's use is enjoined due to infringement, or if in the opinion of Seller the Product is or is likely to

7

become the subject of a valid claim or infringement, Seller, at its own election and expense, may: (a) procure for Buyer, Buyer's agent or affiliate, or Buyer's customer the right to continue using such Product; (b) modify or replace such Product so that Buyer, Buyer's agent or affiliate, or Buyer's customer has a noninfringing Product that provides equivalent performance; or if (a) and (b) are not reasonably feasible, remove such Product and accept its return, promptly granting Buyer, Buyer's agent or affiliate, or Buyer's customer a full refund less depreciation on a straightline method over 5 years.

(11)    LIMITATION OF LIABILITY

EXCEPT FOR SELLER'S INDEMNIFICATION OBLIGATION UNDER SECTION 9, SELLER'S AGGREGATE LIABILITY SHALL NOT EXCEED THE PAYMENT RECEIVED BY THE SELLER FROM BUYER FOR THE APPLICABLE PRODUCT(S) WHICH IS/ARE THE SUBJECT OF THE CLAIM OR DISPUTE. FOR SELLER'S INDEMNIFICATION OBLIGATION UNDER SECTION 9, SELLER'S AGGREGATE LIABILITY, IN ANY BUYER CLAIM, SHALL NOT EXCEED THE PURCHASE PRICE OF THIS CONTRACT, INCLUDING ALL AGREED UPON CHANGE ORDERS, PROVIDED THAT BUYER IS NOT IN BREACH OF ITS PAYMENT OBLIGATIONS UNDER THIS CONTRACT. BUYER'S LIABILITY IS LIMITED TO THE PURCHASE PRICE OF THIS CONTRACT, INCLUDING ALL AGREED UPON CHANGE ORDERS, TO THE EXTENT SUCH LIMITATION IS ALLOWED BY LAW.

IN NO EVENT WILL EITHER PARTY, NOR ITS AFFILIATES, EMPLOYEES, DIRECTORS, OFFICERS, AGENTS, OR SUPPLIERS BE LIABLE TO THE OTHER FOR INCIDENTAL OR CONSEQUENTIAL DAMAGES.

(12)    APPLICABLE LAW

This Contract shall be construed, interpreted and enforced in accordance with, and the respective rights and obligations of the parties shall be governed by, the laws of the State of Illinois.

(13)    DISPUTES RESOLUTION

Each party agrees that any dispute between the parties arising between the parties out of or in relation to this Contract or for the breach thereof which the parties are unable to resolve within a reasonable time period will first be submitted in writing to a designated senior executive of both Seller and Buyer who will meet and confer in an effort to resolve such dispute. Any decisions of the executives will be final and binding on the parties. In the event the executives are unable to resolve any dispute within 30 days after submission to them, or in the event either party refuses to designate an executive within 10 days following demand, either party may refer such dispute to arbitration in accordance with this clause. Such dispute shall be resolved in accordance with the then current Rules of the American Arbitration Association by three independent arbitrators experienced in the area of wireless telecommunications. Such arbitrators shall be selected by mutual agreement of the parties, or failing such agreement, each party shall select one arbitrator and the two selected arbitrators shall mutually agree upon the selection of a third arbitrator. The location of the arbitration shall be in Chicago, Illinois USA. The parties shall bear the costs of such arbitration equally and the prevailing party in any arbitration shall be entitled to reasonable attorneys' fees in addition to any other award ordered by the arbitrators (and shall not be subject to Section 11). Nothing in this clause will prevent a party from seeking injunctive relief against the other party from any judicial or administrative authority pending the resolution of a dispute or controversy by arbitration.

(14)    RIGHTS IN INTELLECTUAL PROPERTY (IP), SALE OF PRODUCTS AND ROYALTIES

Seller maintains all rights to its pre-existing IP, including the pre-existing IP of its suppliers (Pre-existing IP). Seller obtains rights in all newly created IP, including all derivative works (Development IP).

For the term (from Contract Date until the final delivery of Product) of this Contract, as long as Buyer is not breaching this Contract, Seller grants Buyer an exclusive, perpetual, irrevocable, worldwide, royalty free license ("Exclusive License") to use Pre-existing IP and Development IP solely in connection with the use, sale or repair of Products; provided that, nothing in this paragraph shall limit

8


Seller's rights to use Pre-existing IP in its sole discretion without any obligation to Buyer as long as such use is not in connection with the Products (except as provided in this section). If Buyer pays for 60,000 units as provided for under the Contract, the Exclusive License shall continue for an additional 7 year period, after which the Exclusive License shall revert to a Non-exclusive License upon 90 days written notice by Seller to Buyer.

Buyer grants back to Seller a sublicense to sell Products to third parties during the term of this Contract, upon Buyer prior approval on a case by case basis, provided that Seller will pay Buyer a royalty of [*] on the sale of each Product.

Buyer grants back to Seller a sublicense to sell Products to third parties outside the term of this Contract for as long as Buyer maintains an Exclusive License upon Buyer prior approval on a case by case basis, provided that Seller will pay Buyer a royalty on the sale of each Product, such royalty to be negotiated in good faith on a case by case basis.

(15)    MOST FAVORED CUSTOMER PRICING

During the term of this Contract and one year thereafter, Seller agrees that Buyer shall receive "Most Favored Customer Pricing" with respect to the Products. Specifically, Seller shall not provide other customers (excluding the Federal and/or State governments of the U.S. and including all local and foreign governments) ordering like quantities of Products on like terms with more favorable pricing (net of NRE and royalty adjustments) for newly manufactured Products without offering Buyer the same benefit on price and terms. Buyer shall have the right to audit this provision no more than once each contract year and such audit shall be limit to the prior 12 month period. Audits shall be on reasonable notice during business hours.

(16)    INVOICES AND PAYMENTS

Invoices shall be in U.S. dollars and contain the following information:

—    Contract Number

—    Line Item Number

—    Item Description

—    Quantities, Unit Price and Extended Totals

—    Proof of Delivery

Payment shall be in U.S. dollars within thirty (30) days of Buyer's receipt of a properly submitted and correct invoice. Invoices shall be issued upon shipment of Products. Seller shall be entitled to collect interest of 1% per month on any amount remaining unpaid 60 days after delivery.

The Seller shall submit invoices to Buyer for deliverable Product, no more frequently than monthly, in accordance with the terms of this Contract. Seller shall submit invoices to the following:

(17)    TAXES

The payments to Seller under this Contract shall be net any taxes, export or import duties, charges or remittances fees levied by any government agency against either Seller or Buyer. All said taxes, if applicable, in conjunction with this Contract shall be paid by Buyer.

9

(18)    CHANGE ORDERS

Buyer may at any time, by contract amendment issued to Seller ("Change Order"), make changes within the general scope of this Contract in any one or more of the following: (a) drawings, designs, specifications or scope of work; or (b) delivery schedule, method of shipping or packing or other administrative item. Should any such change increase or decrease the cost of, or the time required for performance of this Contract, an equitable adjustment may be required and must be agreed to by both Parties prior to the change being implemented. Seller shall use reasonable efforts to avoid unnecessary costs resulting from the Change Order. However, nothing in this clause shall excuse the Seller from proceeding with the Contract as changed by Buyer.

(19)    TERMINATION FOR CONVENIENCE

Buyer may terminate this Contract, in whole or in part, without cause, upon thirty (30) days written notice to Seller. Upon receipt of any such termination notice, Seller shall, to the extent and at the times specified by Buyer, stop all work on this Contract and cause its subcontractors and suppliers to stop all work that is terminated. Seller shall proceed promptly to comply with Buyer's directions without awaiting settlement or payment of Seller's termination claim. Within twenty (20) calendar days from such termination, Seller may submit to Buyer a claim with the final statement of charges. Seller shall be entitled to reimbursement for all incurred and unreimbursed Non-Recurring Engineering Expenses (NRE), all finished goods, all work in progress and raw materials, component parts, all non-cancelable orders with its suppliers or goods in transit, subject to the mitigation requirements herein. Payment shall be made to Seller within 30 days of submission of its claim if Buyer decides to waive audit or within 30 days of completion of Buyer audit. In no event will the calculation of charges exceed the price of this Contract or conflict with the terms of this Contract with respect to adjustments. Seller shall use its best efforts to reasonably assess open orders, raw materials, work in process and sub-assemblies to determine whether or not such items can reasonably be used by Seller for the manufacture of other products commensurate with its then current business or be diverted for any other reasonable purpose commensurate with its then current business. Seller shall use commercially reasonable efforts to mitigate costs, subject to Buyer's election to take delivery of any materials or goods, and reduce its final statement of charges by the value of such usable items. Buyer shall have no obligation with respect to items lost, damaged, stolen or destroyed prior to delivery to Buyer. Buyer reserves the right to verify Seller's claims and Seller shall make available to Buyer, upon its request, all relevant books, receipts, and records for inspection and audit; provided that any such audit must be completed within 90 days of termination. This clause shall be applicable only to a termination for convenience by Buyer, without any default on Seller's part, and shall not affect or impair any right of Buyer to terminate this Contract upon Seller's default in the performance hereof. Nothing in this clause shall be construed to limit Buyer's legal and equitable rights.

(20)    TERMINATION FOR DEFAULT

Should either party fail to materially perform any of its obligations under this Contract for a period of 30 calendar days after receipt of written notice of material default (which shall describe the material default in sufficient detail) from the non-defaulting party, the non-defaulting party may terminate this Contract, or any license or service hereunder that is the subject of such default, immediately upon delivery of written notice to the defaulting party of its election to do so. In addition to other material defaults specified in this Contract, the following are deemed material defaults: (a) an assignment by a party for the benefit of creditors; (b) appointment of a receiver of a party's property used in its performance of this Contract; (c) Seller's insolvency; (d) any assignment contrary to the Assignment clause herein; (e) unlawful, fraudulent or deceptive acts or practices or criminal misconduct by Seller or its employees relevant to Seller's performance; or (f) Seller or any principal owner, director or senior officer of Seller is convicted of or pleads no contest to any felony involving moral turpitude.

In addition, in Buyer's sole discretion, Buyer may, by written notice to Seller and Seller's failure to cure within a cure period of 45 days (unless such longer period is mutually agreed by the parties as

10


reasonable under the circumstances), terminate this Contract in whole or part if Seller fails to: (a) make delivery of the Products or perform the Services within the time specified and such delay has a material impact on Buyer, or any extension by written change order or amendment; or (b) replace or correct defective Products in accordance with this Contract; or (c) cure a material default of any other provisions of this Contract; or (d) make progress as to endanger performance in accordance with these terms. Upon receipt of any such termination notice, Seller shall, to the extent and at the times specified by Buyer, stop all work on this Contract and cause its subcontractors and suppliers to stop all work that is terminated. Notwithstanding other conditions stated in this Contract, if Seller defaults in the performance of the terms of this Contract in any material manner which remains uncured after proper notice thereof, then Seller, without further cost to Buyer, grants to Buyer an irrevocable, perpetual, worldwide, non-exclusive, royalty free right and license to use, sell, manufacture, and cause to be manufactured or printed any and all Products embodying any and all inventions, discoveries and works of authorship made, conceived or actually reduced to practice in connection with the performance of this Contract. Seller shall promptly provide to Buyer the applicable templates, and other information related to the Development IP necessary for Buyer to carry out these terms.

In the event of termination due to Seller's default pursuant to this clause, Seller shall be entitled only to payment for Products shipped under this Contract prior to the effective termination date and for incurred but unpaid NRE fees (assuming Seller has begun Line Item 2 Production Deliveries). With respect to Seller's subcontracts, all financial responsibility related to such subcontracts, including without limitation, non-cancelable parts, parts in transit, raw material, work in process and incurred but unpaid NRE, shall be borne by Seller; provided that, Buyer agrees to discuss, in good faith, assuming all or a part of such financial responsibility with Seller's subcontractors and such decision shall be at Buyer's sole and absolute discretion. Similarly, the parties agree to discuss in good faith Buyer's continuing need for Seller's raw material and work in process, and such decision to purchase all or part of such raw material and/or work in process shall be at Buyer's sole and absolute discretion. If all or a portion of this Contract is terminated by Buyer pursuant to this clause, Buyer in addition to any other rights provided here or by law, may require Seller to transfer title and deliver to Buyer, in the manner and to the extent directed by Buyer, any completed or partially completed goods and/or services, but at no price greater than the Contract price or reduced by adjustment in accordance with this Contract. Seller's obligations to carry out Buyer's directions as to delivery, protection, and preservation shall not be contingent upon prior agreement as to such agreed amount. Buyer is not obligated to pay Seller for any defaulted items under this Contract and any advance payments for defaulted items will be refunded to Buyer. Nothing in this clause shall be construed to limit Buyer's legal and equitable rights and remedies.

If Seller terminates the agreement for Buyer's material default, Seller shall be entitled to such reimbursement as described in Section 20 and the Exclusive License provided under Section 14 shall automatically revert to a Non-exclusive License.

(21)    SEVERABILITY

If any part provision or clause of the terms and conditions of sale, or the application thereof to any person or circumstances, is held invalid, void or unenforceable, such holding shall not affect and shall leave valid all other parts, provisions, clauses or applications of the terms and conditions remaining, and to this end the terms and conditions shall be treated as severable.

(22)    PUBLIC RELEASE OF INFORMATION

Within a reasonable time prior to the issuance of news releases, articles, brochures, advertisements, prepared speeches, and other such information releases (except regulatory disclosures required by the U.S. Securities and Exchange Commission) concerning the work performed hereunder, the party desiring to release such information shall obtain the written approval of the other party concerning the content and timing of such releases. Approval will not be unreasonably delayed or denied. The parties

11

anticipate the issuance of press releases in connection with the execution of the Contract, which press release shall be mutually agreed to between the parties.

(23)    NOTICES

Any notices or correspondence required or desired to be given or made hereunder shall be in writing and shall be effective when delivered to an authorized recipient party at the address indicated below:

BUYER:   Globalstar Canada Satellite Co.
In care of:
Globalstar, Inc.
461 South Milpitas Blvd.
Milpitas, CA 95035 USA
    Attention: Paul Rosati
Contracts Manager
Phone:    (408) 933-4156
E-mail:   paul.rosati@globalstar.com
Fax:        (408) 933-4943

SELLER:
 
Richardson Electronics, Ltd.
40W267 Keslinger Road,
P.O. Box 393
LaFox, IL 60147
    Attention: General Counsel
Phone:    (630) 208-2441
E-mail:   Generalcounsel@rell.com
Fax:        (630) 208-2950

(24)    FORCE MAJEURE

Seller shall not be liable to Buyer for any failure to perform or delay in performance of its obligations hereunder caused by an act of God; outbreak of hostilities; riot, civil disturbance, acts of terrorism, blockades, sabotage, or war; fire, explosion, flood, storm, earthquake, epidemic, or accident; theft, malicious damage, strike, lock-out or industrial action of any kind; transportation or communication conditions; curtailment or failure to obtain electrical or other energy supplies; curtailment or termination of franchises or other supplier agreements, or shipments or deliveries of products from suppliers; supplier or Buyer caused delays; inability to obtain labor, materials, products, or manufacturing facilities; compliance with any law, regulation, or order, whether valid or invalid, acts of any government body or instrumentality thereof.

12



QuickLinks

CONFIDENTIAL TREATMENT
TERMS AND CONDITIONS OF SALE

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.15

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 406 under the Securities Act of 1933. Such Portions are marked "[*]" in this document; they have been filed separately with the Commission.


MASTER AGREEMENT

between

GLOBALSTAR LLC

And

SPACE SYSTEMS/LORAL,  INC.

for

PROFESSIONAL SERVICES

Contract No. GLLC-C-04-0146


TABLE OF CONTENTS

ARTICLE 1. DEFINITION OF TERMS   2
ARTICLE 2. TERM OF AGREEMENT   2
ARTICLE 3. PRICE   2
ARTICLE 4. SCOPE OF AGREEMENT   2
ARTICLE 5. INVOICES AND PAYMENTS   3
ARTICLE 6. INDEPENDENT CONTRACTOR   4
ARTICLE 7. TAXES   4
ARTICLE 8. RECORDS AND AUDITS   4
ARTICLE 9. TERMINATION   4
ARTICLE 10. INDEMNIFICATION   5
ARTICLE 11. INSURANCE   6
ARTICLE 12. DELIVERABLES   6
ARTICLE 13. DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION   8
ARTICLE 14. ASSIGNMENT AND DELEGATION   9
ARTICLE 15. NOTICES   9
ARTICLE 16. COMPLIANCE WITH LAWS   9
ARTICLE 17. WAIVERS AND AMENDMENTS   9
ARTICLE 18. ORDER OF PRECEDENCE   9
ARTICLE 19. GOVERNING LAW   10
ARTICLE 20. SEVERABILITY   10
ARTICLE 21. SURVIVAL   10
ARTICLE 22. ENTIRE AGREEMENT   10
ARTICLE 23. NO SOLICITATION OF EMPLOYMENT   10
ARTICLE 24. FORCE MAJEURE   10
ARTICLE 25. DISPUTE RESOLUTION   11
ARTICLE 26. EXPORT CONTROL   11
ARTICLE 27. LIMITATION OF LIABILITY   11
ARTICLE 28. WARRANTY   12

EXHIBIT A — TASK ORDER FOR PROFESSIONAL SERVICES
 
14
EXHIBIT B — CONTRACTOR'S SCHEDULE OF RATES   16

1

        This Agreement is effective as of June 1, 2004, ("Effective Date") and is between Globalstar LLC, a Delaware limited liability company with offices at 461 South Milpitas Blvd., Milpitas, California 95035 USA (hereinafter referred to as "GLLC" or the "Purchaser") and Space Systems/Loral, Inc, a Delaware Corporation with offices at 3825 Fabian Way, Palo Alto, CA 94303-4604, (hereinafter referred to as "Contractor"; collectively the "Parties, or singularly the "Party") for the purpose of providing certain services as defined herein (the "Services") as GLLC may from time to time request. In connection with such Services, the Parties intending to be legally bound, agree as follows:


Article 1.    Definition of Terms


Article 2.    Master Agreement/Term of Agreement


Article 3.    Price


Article 4.    Scope of Agreement

2


Article 5.    Invoices and Payments

3


Article 6.    Independent Contractor


Article 7.    Taxes


Article 8.    Records and Audits


Article 9.    Termination

4


Article 10.    Indemnification

5


Article 11.    Insurance


Article 12.    Deliverables, Title and Acceptance

6


Article 13.    Disclosure and Handling of Proprietary Information

7


Article 14.    Assignment and Delegation


Article 15.    Notices

TO: Space Systems/Loral, Inc.
("Contractor")
3825 Fabian Way
Palo Alto, CA 94303
ATTN: Contracts Depart.		   TO: Globalstar LLC
("Purchaser")
461 South Milpitas Blvd.
Milpitas, CA 95035
ATTN: Contracts Dept.


Article 16.    Compliance with Laws


Article 17.    Waivers and Amendments


Article 18.    Order of Precedence

8


Article 19.    Governing Law


Article 20.    Severability


Article 21.    Survival


Article 22.    Entire Agreement


Article 23.    No Solicitation of Employment


Article 24.    Force Majeure

9


Article 25.    Dispute Resolution


Article 26.    Export Control


Article 27.    Limitation of Liability

10


Article 28.    Warranty

11

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives who have the authority to bind the parties to the terms of this Agreement.

Agreed and Accepted:      

SPACE SYSTEMS/LORAL, INC.
("Contractor")
 
GLOBALSTAR LLC
("Purchaser")

BY:
/s/ RON HALEY
 
BY:
/s/ KELLY L. ROSE
NAME: RON HALEY   NAME: KELLY L. ROSE
TITLE: CFO   TITLE: Director, Contracts

12


EXHIBIT A—TASK ORDER FOR PROFESSIONAL SERVICES

MASTER AGREEMENT NO.

TASK ORDER NO.

DATE:

CONTRACTOR COMPANY:

ADDRESS:

    

ATTN:

PROJECT:

GLLC requests Contractor to provide the Services described below subject to the terms and conditions of set forth herein and in accordance with the provisions of the Master Agreement listed above for Contractor Professional Services, dated                          by and between GLOBALSTAR LLC ("GLLC") and Contractor ("Contractor").

1.
Contractor's personnel who will perform Services:






2.
Description of Services (include specifics on Deliverables, timetable for Deliverables and attach supporting documents, as necessary):








3.
Location for Services:


4.
The Effective Date of this Task Order begins on                          and shall expire                          or when USD$                         in Services (which includes              in reimbursable expenses) have accrued, whichever occurs first.

5.
Reports to be furnished by Contractor:





13

6.
Compensation shall be:

a)
For Contractor Professional Services (excluding reimbursable expenses) and materials







7.
Special terms applicable to this Task Order: (e.g. Title Transfer, Rick of Loss, Warranty Period)





Except as stated or modified herein, the terms of the Master Agreement under which this Task Order is issued shall be applicable hereto as if fully set forth herein.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives who have the authority to bond the parties to the terms of this Agreement.

Agreed and Accepted:      

SPACE SYSTEMS/LORAL, INC.
"CONTRACTOR"
 
GLOBALSTAR LLC
"PURCHASER"

BY:
    
 
BY:
    
NAME:     
   NAME:     
TITLE:     
   TITLE:     

14


EXHIBIT B—CONTRACTOR'S SCHEDULE OF RATES

(as applicable)

Title
   Rate/Hour
Engineer   $ 130
Senior Engineer   $ 160
Engineering Specialist   $ 200
Technician   $ 100
Administrative Support   $ 110
Management   $ 245

15


AMENDMENT NUMBER 2
TO
THE MASTER AGREEMENT
BETWEEN
GLOBALSTAR, INC.
AND
SPACE SYSTEMS/LORAL, INC.
FOR
PROFESSIONAL SERVICES

This Amendment Number (No.) 2 is entered into as of the first day of June 2006, between Space Systems/Loral, Inc., a Delaware corporation with offices at 3825 Fabian Way, Palo Alto, California 94303 (hereinafter referred to as "SS/L" or "Contractor") and Globalstar, Inc., a Delaware corporation with offices at 461 South Milpitas Blvd., Milpitas, CA 95035 USA (hereinafter referred to as "Globalstar" or "Purchaser"; collectively the "Parties" or singularly the "Party").

WHEREAS, Contractor and Globalstar LLC executed the Master Agreement for Professional Services No. GLLC-C-04-0146 effective June 1, 2004 (the "Contract"); and

WHEREAS, Globalstar LLC converted from a Delaware limited liability company to a Delaware corporation named "Globalstar, Inc." effective 17 March 2006; and

WHEREAS, the Parties executed Amendment No. 1 to the Contract to adjust the hourly charge rates for use during the twelve month period ending May 31, 2006, and desire to adjust the Contract to reflect the hourly charge rates for the period beginning on June 1, 2006 and ending on May 31, 2007.

NOW THEREFORE, for valid consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree to: substitute Globalstar, Inc. for Globalstar LLC, for all purposes under this Contract; to adjust the charge rates for the next twelve month period ending on May 31, 2007; and to make such further and consistent modifications as follows:

A.
MODIFIED PROVISIONS

1.
DELETE "EXHIBIT B REVISION 1—CONTRACTOR'S SCHEDULE OF RATES FOR THE PERIOD JUNE 1, 2005 THROUGH MAY 31, 2006" in its entirety and INSERT IN LIEU THEREOF "EXHIBIT B REVISION 2—CONTRACTOR'S SCHEDULE OF RATES FOR THE PERIOD JUNE 1, 2006 THROUGH MAY 31, 2007" as attached to this Amendment No 2.

B.
The Parties agree that Globalstar LLC be released from all further liability and obligation under this Contract and shall relinquish all rights herein to Globalstar, Inc., who agrees to be a substituted party for Globalstar LLC and to bound by all the terms and conditions of this Contract as if an original signatory party. Any actions taken or performance received hereunder by Globalstar LLC shall be deemed as actions taken and performance received by Globalstar, Inc. Further Globalstar, Inc. agrees to be bound by all actions taken by Globalstar LLC hereunder as if actions taken by Globalstar, Inc.

C.
Except as expressly modified herein, all terms, conditions, obligations and covenants of the Contract shall remain and continue in full force and effect unless otherwise defined in this Amendment No. 2, capitalized terms contained herein shall have the same meaning as in the Contract.

D.
Counterparts.    This Amendment No. 2 may be executed in a number of identical counterparts. If so executed, each of such counterparts is to be deemed an original for all purposes and all such counterparts shall collectively constitute one agreement, but in making proof of this Second

1

2

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 to the Contract as of the day and year first above written.

CONTRACTOR        

Space Systems/Loral, Inc.
 
 
 
 

By:
/s/ R.A. HALEY
 
 
 
 
  Name: R.A. HALEY        
  Title: Senior Vice President &
Chief Financial Officer		        

PURCHASER:
 
 
 
 

Globalstar, Inc.
 
Globalstar LLC

By:
/s/ PAUL ROSATI
 
By:
/s/ PAUL ROSATI
  Name: PAUL ROSATI     Name: PAUL ROSATI
  Title: Contracts Manager     Title: Contracts Manager

3


EXHIBIT B REVISION 2


CONTRACTOR'S SCHEDULE OF RATES FOR

THE PERIOD JUNE 1, 2006 THROUGH MAY 31, 2007

(as applicable)

Title
   Rate/Hour
Engineer   $ 140
Senior Engineer   $ 173
Engineering Specialist   $ 216
Technician   $ 108
Administrative Support   $ 119
Management   $ 265

4



QuickLinks

MASTER AGREEMENT between GLOBALSTAR LLC And SPACE SYSTEMS/LORAL, INC. for PROFESSIONAL SERVICES
TABLE OF CONTENTS
EXHIBIT A—TASK ORDER FOR PROFESSIONAL SERVICES
EXHIBIT B—CONTRACTOR'S SCHEDULE OF RATES (as applicable)
AMENDMENT NUMBER 2 TO THE MASTER AGREEMENT BETWEEN GLOBALSTAR, INC. AND SPACE SYSTEMS/LORAL, INC. FOR PROFESSIONAL SERVICES
EXHIBIT B REVISION 2
CONTRACTOR'S SCHEDULE OF RATES FOR THE PERIOD JUNE 1, 2006 THROUGH MAY 31, 2007 (as applicable)

QuickLinks -- Click here to rapidly navigate through this document


Exhibit 10.17

[GLOBALSTAR LETTERHEAD]

4 October 2006

Alcatel Alenia Space France
12, rue de la Baume
75008 Paris, France

Attention: Pascale Sourisse

SUBJECT: Authorization To Proceed
Re Construction of the Globalstar Second Generation Satellite Constellation — LEO Solution
Annex: (A) Regular Payment and Delivery Schedule
Annex: (B) Accelerated Payment and Delivery Schedule
Annex: (C) Aggressively Accelerated Payment and Delivery Schedule

Dear Pascale:

Globalstar, Inc. ("Globalstar") appreciates the discussions and proposals so far exchanged with Alcatel Alenia Space France ("Alcatel") with respect to the Construction of the Globalstar Second Generation Satellite Constellation — LEO Solution. Globalstar hopes upon further negotiation to be able to enter into a definitive contract with Alcatel to procure 48 LEO satellites (the "Contract"). In the interest of meeting program schedules as discussed by the parties, Globalstar hereby issues to Alcatel this Authorization to Proceed ("ATP") to commence a portion of the work consistent with the detail and understandings as set forth herein.

Upon written acceptance of this ATP, Alcatel is authorized to proceed as follows:

1)    Scope of Work

Alcatel shall proceed, during the effective period of this ATP, to (a) prepare for and conduct a Program Readiness Review ("PRR") at its facility, which it shall complete within approximately one (1) month after the effective date of this ATP but in any event by 15 November 2006, consistent with Section 5.2 of the Statement of Work last exchanged between the parties 9 August 2006 (SOW) and the Globalstar II LEO Satellite Requirements Document GS-06-1128 (version 2.6) — 3474-05-0016R(4) Globalstar 2 LEO requirements_08082006, (b) the creation and definition of proposed work milestones to permit the parties, should they enter into the Contract, to be able to agree on specific payment schedules based upon work progress, and (c) such other preparation work (in particular at subcontractors' level) as Alcatel believes can reasonably be performed in order to maintain the schedules agreed to in Section 5 below. Alcatel shall provide all the items for the PRR as outlined in Section 4.6 of the SOW, entitled Program Readiness Review Data Package.

2)    Type of Contract

The parties agree that this ATP is limited to the scope of work set forth in Section 1 and payment set forth in Section 4. It is specifically acknowledged that this ATP does not contain all of the final terms and provisions that will be set forth in the Contract, which will be negotiated in good faith between the parties based upon conditions which would be agreed upon during such negotiations, and if agreed upon would become effective and supersede this ATP as set forth in Article 3. Nothing in this ATP binds either Globalstar or Alcatel to enter into the Contract, if such terms and provisions cannot be finally negotiated.

3)    Effectiveness

This ATP will become effective on the date that Alcatel countersigns below and the Payment has been credited on Alcatel's bank account as indicated on the invoice, and unless terminated earlier pursuant to Section 6, this ATP shall remain in effect until the sooner of (a) the date of entry into force of the Contract or (b) 15 November 2006. If the Contract has not entered into force prior to the end of this ATP, then, unless extended in writing by the parties, this ATP shall terminate and Alcatel shall be entitled to keep the full amount of the Payment.

4)    Payment

Under this ATP and within five (5) working days of receipt of this ATP executed by Alcatel and an invoice from Alcatel, Globalstar shall make payment to Alcatel in the amount of EUR 7,727,975 (the "Payment"). Alcatel shall use the Payment to engage in the scope of work set forth in Section 1. Globalstar's maximum liability under this ATP is the Payment, unless such amount is increased in a writing signed by Globalstar and Alcatel.

5)    Concepts of Negotiations

Globalstar and Alcatel agree to continue to negotiate in good faith the terms and provisions of the Contract, with the understanding that the terms and provisions of such Contract shall not be binding unless and until the Contract has entered into force. To date the parties have agreed upon the concepts set forth in this Section 5, including the delivery dates and payment schedules included in the attached Annexes; no terms of the Contract shall be binding on the parties, however, unless and until the Contract has entered into force.

(a)    The Contract would be for the manufacture and delivery of 48 satellites and related services. Globalstar would contract with its own provider of launch services, with Alcatel providing launch support services and operations support services (the "Services"). The Services are included in the pricing set forth in the attached Annexes.

(b)    The Contract would provide for work to be done in three phases. Phase 1 would include non-recurring engineering and manufacture of a Proto Flight Model satellite (PFM), Phase 2 would include the manufacture and delivery of 24 satellites with Services therefore, and Phase 3 would include the manufacture and delivery of 23 satellites with Services therefore as well as delivery and Services for the PFM.

(c)    Unless the scheduling of Phase 3 were accelerated as set forth in Subsection 5(f) below, Globalstar would make payments to Alcatel under the Contract as set forth in Annex A attached hereto, with an initial payment of EUR 19,319,938 made at signing of the Contract (less the ATP Payment as stated in Subsection 5(g) below), and quarterly payments made thereafter, all as more specifically set forth on Annex A. All payments by Globalstar other than the initial payment set forth in Subsection 5(g) below would be made no later than thirty days after receipt of invoice, each invoice to be issued at the beginning of each quarter. Annex A and all timing concepts set forth in this Section 5 are based upon the assumption that the parties would agree to the Contract by 15 November 2006, and that the effective date of the Contract would be as of 1 October 2006.

(d)    The parties have agreed that the price of Services that would be performed by Alcatel under all phases of the Contract would be EUR 40,185,471 roughly spread equally between Phase 2 and Phase 3, and not subject to any price adjustments. In addition to the price of the Services, the price-per-satellite for the satellites that would be delivered in Phases 1, 2, and 3 if there were no hiatus in production (as set forth in Subsection 5(f) below and Annexes B and C referenced therein) would be EUR 12,132,921. The price-per-satellite for the satellites that would be delivered during Phase 3 with a hiatus in production as set forth in Annex A would be increased to reflect Alcatel's actual increased costs

2


incurred as a result of stopping and starting production prior to Phase 3, not to exceed EUR 1,213,292 per satellite. Therefore the total Contract price would be EUR 40,185,471 plus EUR 582,380,208 (48 × EUR 12,132,921) plus up to EUR 27,905,716) (i.e. 23 × EUR 1,213,292) for the increased price of the 23 satellites in Phase 3.

(e)    Assuming the payment schedule were to proceed in accordance with Annex A, delivery dates would be as set forth on Annex A.

(f)    Globalstar would have the option to accelerate Phase 3 of the Contract in accordance with this Subsection 5(f). On or before 1 July 2008, Globalstar could elect to give notice that it desired to accelerate the delivery of all or some portion of the satellites in Phase 3.

In such case if delivery of all of the satellites in Phase 3 were to be accelerated so that there was no hiatus in production of satellites by Alcatel (e.g., if Alcatel's entire production schedule for Phase 3 were moved forward twenty-one months, as set forth in Annex B attached hereto or even more aggressively as set forth in Annex C attached hereto), the total Contract price would be EUR 622,565,679.

If delivery were accelerated for some but less than all of the satellites in Phase 3, or for less than the twenty-one month hiatus in production, the price reduction would be prorated based upon the number of satellites accelerated and the timing of their delivery.

(g)    If the parties were to enter into the Contract, the amount Globalstar would pay to Alcatel pursuant to Section 4 of this ATP would be credited against the initial payment of EUR 19,319,938 that would be paid within five (5) working days of the signing by both parties of the Contract and receipt by Globalstar of the invoice therefore.

(h)    The parties agree that up to EUR 146,831,530 of the Contract price as set forth in Subsections 5(d) and (f) shall be invoiced in Euros but payable by Globalstar to Alcatel in US Dollars based on the fixed EUR/US$ exchange rate of 1 Euro = US$ 1.2940. This amount will therefore not be subject to increase or decrease due to changes in exchange rates between the Euro and the US Dollar. Globalstar will from time to time evaluate at its sole discretion its preferred timing during phase 1 and 2 for the invoicing by Alcatel of such portion of the price payable in USD. All other payments and prices set forth in the Contract will be invoiced by and paid to Alcatel in Euros.

(i)    Globalstar could terminate the Contract at any time and for any reason by giving a notice of termination to Alcatel effective six (6) months following the date of such notice. Globalstar would owe Alcatel all payments due pursuant to Annex A (as attached or as accelerated pursuant to Subsection 5(f)) up to the effective date of termination. This would be the full extent of Globalstar's termination liability to Alcatel. The parties agree that an adequate form of security for Globalstar's payments under the Contract (in case of payment default by Globalstar and/or in case of stop-work and/or termination) would need to be negotiated and agreed upon. It is also understood that any such security arrangement will include, among others, a stop-work mechanism and the adequate guarantee to cover Contractor's cost of termination.

6)    Termination or Expiration of ATP

If this ATP shall terminate for any reason in accordance with Section 3 or otherwise, Alcatel and Globalstar shall have no continuing obligation to the other under, or in respect of, this ATP, except for (a) the terms set forth in Sections 7 and 8, and (b) the confidentiality obligations under the Mutual Nondisclosure Agreement dated 5 October 2004 ("MNDA").

Except as may be set forth in Section 7, Alcatel shall deliver to Globalstar all title in any and all work-in-progress performed by Alcatel under this ATP that has been paid for by Globalstar and all intellectual property rights associated to such work-in-progress shall remain with Alcatel with

3


Globalstar being granted an irrevocable, worldwide, non exclusive and royalty free right to use for its own purpose, and Globalstar shall retain all rights, title and interest in any and all effort or work-in-progress, if any, performed or developed by Globalstar under this ATP.

7)    Rights in Intellectual Property

Alcatel and Globalstar are parties to the MNDA, which shall continue in full force and not be affected by this ATP. The parties do not anticipate that during the short effective period of this ATP there will be any intellectual property developed by either party. The parties agree that the ownership and rights relating to any intellectual property, if any, developed during the effective period of this ATP shall be controlled by the Contract, if such Contract should be entered into.

8)    Governing Law — Disputes

This ATP shall be interpreted, construed and governed, in all respects, according to the laws of the State of New York, U.S.A., without regard to its conflict of laws rules.

Any dispute or disagreement arising between the parties in connection with any interpretation of any provision of the ATP, or the compliance or non-compliance therewith, or the validity or enforceability thereof, or any other dispute under any Article hereof which is not settled to the mutual satisfaction of the parties within thirty (30) Days (or such longer period as may be mutually agreed) from the date that either party informs the other in writing that such dispute or disagreement exists, shall be settled by arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules and the Supplementary Procedures for Large, Complex Disputes in effect on the date that such notice is given, except as otherwise specified herein. Arbitration seat shall be New York.

In no event shall either Party be liable to the other Party for incidental, indirect, consequential, punitive or special damages (including any loss of profit, loss of use or any other similar loss) whether arising in contract, tort, strict liability or under any other theory of liability.

9)    Assignment

Neither party shall assign its rights or obligations under this ATP, either in whole or in part, without the express written consent of the other party.

10)  Entire Agreement and Amendment

This ATP constitutes the entire understanding and agreement between the parties with respect to the subject matter hereof, and supersedes all prior or contemporaneous negotiations, understandings and agreements with respect to the subject matter hereof, except for the MNDA. The terms of this ATP may be modified only by an agreement in writing signed by the parties.

4

Please acknowledge your receipt and acceptance of this ATP by signing this letter and returning it to Globalstar. Globalstar appreciates your continued support of our requirements.

Sincerely,  

GLOBALSTAR, INC.
 

/s/  JAMES MONROE III      
By: James Monroe III
Title: Chairman and CEO
Date: October 4, 2006
 

ALCATEL ALENIA SPACE FRANCE
 

/s/  PASCALE SOURISSE      
By: Pascale Sourisse
Title: President and CEO
Date: October 5, 2006
 

5



QuickLinks