Document:

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                                                                  EXECUTION COPY

                      GLOBALSTAR TELECOMMUNICATIONS LIMITED

                             SUBSCRIPTION AGREEMENT

                                                              September 22, 2000

LORAL SPACE & COMMUNICATIONS LTD.
600 Third Avenue
New York, NY 10016

Ladies and Gentlemen:

     This letter is being written for the purpose of setting forth the basic
terms of the understandings between Globalstar Telecommunications Limited, a
Bermuda company (the "Company"), and you in connection with the purchase by you
and sale by the Company of shares of common stock, par value $1.00 per share, of
the Company (the "Common Stock") as set forth below.

     If you are in agreement with the terms and conditions set forth herein,
please sign the last page of one copy of this letter and return it to us,
whereupon this letter shall represent a legally binding agreement between us.
Please keep the other copy of this letter for your files.

1. PURCHASE AND SALE OF SHARES.
   ----------------------------

     (a) Purchase and Sale. Subject to the terms and conditions hereof, on the
Closing Date, as defined herein, the Company shall issue to you and you shall
purchase from the Company, the number of shares of Common Stock (collectively,
the "Securities") set forth on Schedule I hereto for the aggregate purchase
price in cash set forth on Schedule I hereto (the "Purchase Price"), which
Securities have been registered under the Securities Act.

Issuance. Such issuance and purchase shall be effected by the Company executing
and delivering to you duly executed certificates evidencing the Securities to be
subscribed by you, duly registered in your name against delivery by you to the
Company of the amounts set forth on Schedule I. Such payment shall be made by
you by wire transfer of immediately available funds to the following account:
Globalstar Telecommunications Limited, Bank of America, N.A., ABA No. 071 000
039, Account No. 8765162759 (or to such other account as the Company shall
designate in writing prior to the Closing Date).

     (b) Closing. The closing of the sale shall take place on September 29, 2000
or on such other date as the Company and you shall mutually agree (the "Closing
Date").

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2. WARRANTIES AND REPRESENTATIONS OF THE COMPANY
   ---------------------------------------------

     The Company represents and warrants that:

     (a) Incorporation. The Company has been duly incorporated as an exempted
company and is validly existing as an exempted company in good standing under
the laws of Bermuda.

     (b) Authority. The Board of Directors of the Company (the "Board") has
authorized the execution, delivery, and performance of this Agreement, and each
of the transactions contemplated hereby. No other company action is necessary to
authorize such execution, delivery and performance, and upon such execution and
delivery, this Agreement shall constitute a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms. The Board
has authorized the issuance and delivery of the Securities in accordance with
this Agreement.

     (c) Validity of Shares. The Securities to be issued and sold by the Company
pursuant to this Agreement, when issued in accordance with the provisions
hereof, will be validly issued, fully paid and nonassessable shares of the
Company, and no shareholder of the Company has any preemptive rights to
subscribe for any such Securities.

     (d) Consents. The creation, authorization, issuance, offer and sale of the
Securities do not require any consent, approval or authorization of, or filing,
registration or qualification with, any United States or Bermuda governmental
authority on the part of the Company (except as may be required under the
various state securities or Blue Sky laws) or the vote, consent or approval in
any manner of the holders of any security (as defined in Section 2(1) of the
Securities Act) of the Company as a condition to the execution and delivery of
this Agreement or the creation, authorization, issuance, offer and sale of the
Securities. The execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations hereunder will not violate (i) the
terms and conditions of the Memorandum of Association or the Bylaws of the
Company, or any material agreement to which the Company is a party or by which
it is bound or (ii) subject to the accuracy of your representations and
warranties contained in Section 3 hereof, any statute or any order, rule or
regulation of any court or governmental agency having jurisdiction over the
Company.

3. INVESTOR REPRESENTATIONS
   ------------------------

     You represent and warrant that:

     (a) Affiliate. You understand that by virtue of your past and current
investments in, and your relationship with, the Company, you may be considered
an "affiliate" of the Company under the United States securities law, and you
have discussed the implications of being deemed an "affiliate" of the Company
with your counsel (including any implications under Rule 144 under the
Securities Act).

     (b) Capacity. You have authorized the execution, delivery, and performance
of this Agreement and each of the transactions contemplated hereby. No other
action (whether corporate or otherwise) is necessary to authorize such
execution, delivery and performance, and

                                      -2-

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upon such execution and delivery, this Agreement shall constitute a valid and
binding obligation of you, enforceable against you in accordance with its terms.

     (c) Brokers. There are no claims for brokerage commissions or finder's fees
or similar compensation in connection with the transactions contemplated by this
Agreement based on any arrangement made by or on behalf of you.

4. COVENANTS OF THE PARTIES.
   -------------------------

     (a) Lockup. You hereby agree that, during a period of 90 days from the
Closing Date, you will not, directly or indirectly, (i) offer, pledge, sell,
sell short, contract to sell, sell any option or contract to purchase, purchase
any option or contract to sell, grant any option to purchase, or otherwise
dispose of or transfer any shares of Common Stock or any securities convertible
into or exchangeable or exercisable for Common Stock, whether now owned or
hereafter acquired by you or with respect to which you have or hereafter acquire
the power of disposition or (ii) enter into any swap or any other agreement or
any transaction that transfers, in whole or in part, directly or indirectly, the
economic consequence of ownership of Common Stock, whether any such swap or
transaction is to be settled by delivery of Common Stock or other securities, in
cash or otherwise.

     (b) Listing. The Company will use its reasonable best efforts to have the
Securities approved for quotation on the Nasdaq National Market on the Closing
Date or as soon as practicable thereafter.

5. INVESTOR CLOSING CONDITIONS
   ---------------------------

     The obligation of you to purchase and pay for the Securities on the Closing
Date, as provided in Section 1 hereof, shall be subject to the satisfaction,
prior thereto or concurrently therewith, of the following conditions:

     (a) Representations and Warranties. The Company's representations and
warranties contained in this Agreement shall be true and correct in all material
respects on and as of the Closing Date as though such representations and
warranties were made at and as of such date, except as otherwise affected by the
transactions contemplated hereby.

     (b) Officer's Certificate. You shall have received a certificate, dated the
Closing Date, signed by an authorized officer of the Company, certifying that
the conditions specified in the foregoing Section 5(a) have been fulfilled.

     (c) Injunction. There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.

     (d) Opinion. You shall have received from the Company's counsel, Appleby,
Spurling & Kempe, an opinion, dated the Closing Date, as to the legality of the
Securities.

                                      -3-

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6. COMPANY CLOSING CONDITIONS
   --------------------------

     The obligation of the Company to issue and deliver the Securities on the
Closing Date, as provided in Section 1 hereof, shall be subject to the
satisfaction, prior thereto or concurrently therewith, of the following
conditions:

     (a) Representations and Warranties. Your representations and warranties
contained in this Agreement shall be true and correct in all material respects
on and as of the Closing Date as though such representations and warranties were
made at and as of such date, except as otherwise affected by the transactions
contemplated hereby.

     (b) Officer's Certificate. The Company shall have received a certificate,
dated the Closing Date, signed by an authorized officer of your company,
certifying that the conditions specified in the foregoing Section 6(a) have been
fulfilled.

     (c) Injunction. There shall be no effective injunction, writ, preliminary
restraining order or any order of any nature issued by a court of competent
jurisdiction directing that the transactions provided for herein or any of them
not be consummated as herein provided.

7. INTERPRETATION OF THIS AGREEMENT
   --------------------------------

     (a) Terms Defined. As used in this Agreement, the following terms have the
respective meaning set forth below:

     Person: an individual, partnership, joint-stock company, corporation,
limited liability company, trust or unincorporated organization, and a
government or agency or political subdivision thereof.

     Securities Act: the Securities Act of 1933, as amended.

     Transfer: any sale, assignment, pledge, hypothecation, or other disposition
or encumbrance.

     (b) Directly or Indirectly. Where any provision in this Agreement refers to
action to be taken by any Person, or which such Person is prohibited from
taking, such provision shall be applicable whether such action is taken directly
or indirectly by such Person.

     (c) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed entirely within such State.

     (d) Section Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and shall not be deemed to
constitute a part thereof.

8. MISCELLANEOUS
   -------------

     (a) Notices. All communications under this Agreement shall be in writing
and shall be delivered by hand or facsimile or mailed by overnight courier or by
registered mail

                                      -4-

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or certified mail, postage prepaid:

     (i)  if to the Company, at 600 Third Avenue, New York, NY 10016, Attention:
          Avi Katz (Fax No.: (212) 338-5320, or at such other address or
          facsimile number as the Company may have furnished the other parties
          hereto in writing;

     (ii) if to you, at the address stated above, or at such other address or
          facsimile number as you may have furnished the Company in writing.

     (b) Any notice so addressed shall be deemed to be given: if delivered by
hand or facsimile, on the date of such delivery, if a business day, otherwise
the first business day thereafter; if mailed by courier, on the first business
day following the date of such mailing; and if mailed by registered or certified
mail, on the third business day after the date of such mailing.

     (c) Survival. All warranties, representations, and covenants made by you
and the Company herein or in any certificate or other instrument delivered by
one of you or the Company under this Agreement shall be considered to have been
relied upon by the Company or you, as the case may be, and shall survive all
deliveries to you of the Securities, or payment to the Company for such
Securities, regardless of any investigation made by the Company or one of you,
as the case may be, or on the Company's or your behalf. All statements in any
such certificate or other instrument shall constitute warranties and
representations by the Company hereunder.

     (d) Successors and Assigns; No Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and assigns of
each of the parties. No party shall assign any of its rights or obligations
hereunder without the prior written consent of the other party. Nothing in this
Agreement shall confer upon any Person not a party to this Agreement any rights
or remedies of any nature or kind whatsoever under or by reason of this
Agreement.

     (e) Entire Agreement; Amendment and Waiver. This Agreement (including any
exhibits and schedules hereto) constitutes the entire understandings of the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements or understandings with respect to the subject matter hereof among
such parties. This Agreement may be amended, and the observance of any term of
this Agreement may be waived, with (and only with) the written consent of the
Company and each of you.

     (f) Severability. In the event that any part or parts of this Agreement
shall be held illegal or unenforceable by any court or administrative body of
competent jurisdiction, such determination shall not affect the remaining
provisions of this Agreement which shall remain in full force and effect.

     (g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall be considered one and the same agreement.

                                      -5-

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     Please indicate your acceptance and approval of the foregoing in the space
provided below.

                                        GLOBALSTAR TELECOMMUNICATIONS LIMITED

                                        By: /s/ Avi Katz
                                            ------------------------------
                                            Name:  Avi Katz
                                            Title: Vice President and Secretary

ACCEPTED AND APPROVED
AS OF THE 22nd DAY OF
SEPTEMBER, 2000

LORAL SPACE & COMMUNICATIONS LTD.

By: /s/ Janet Yeung
    ------------------------------
    Name:  Janet Yeung
    Title: Vice President and Assistant Secretary

                                      -6-

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                                   SCHEDULE I

                             PURCHASE OF SECURITIES

Number of Shares                                                  Aggregate
of Common Stock                                                   Purchase Price
---------------                                                   --------------
1,120,187                                                         $12,000,000Exhibit 10(3)

                                      FIRST
                                    AMENDMENT
                                       TO
                         DEFERRED COMPENSATION AGREEMENT
                                       OF
                                   JOHN DALTON

This First  Amendment  to the  Deferred  Compensation  Agreement  between  FIRST
FEDERAL  SAVINGS  BANK OF MARION and JOHN  DALTON,  dated May 1,  1992,  for the
primary  purpose  of  clarifying  certain  aspects  of the death  benefit to Mr.
Dalton's  Beneficiary,  is hereby  adopted in accordance  with the provisions of
Section 14.1 of the Deferred Compensation Agreement as follows:

         SECTION 5.2 Death  Benefit  After  Commencement  of  Benefits  shall be
replaced with the following:

                  In the event of  Director's  death after the  commencement  of
                  Retirement  Benefits,  but prior to the completion of all such
                  payments due and owing hereunder, the Association shall pay to
                  Director's  Beneficiary  the unpaid  portion of the Retirement
                  Benefit  for the  remainder  of the one hundred  twenty  (120)
                  month  period.  In the event  Director  continues  in  service
                  beyond Normal  Retirement Date, upon Director's death, he will
                  be deemed  to have  commenced  his  Retirement  Benefits  (and
                  therefore  limited to a total of 120 monthly payments) even if
                  Director  has not  elected  to  begin  actual  receipt  of his
                  Deferred Compensation Benefit as specified in Section 4.3.

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         IN WITNESS WHEREOF, the parties have caused this Amendment to Agreement
to be executed this 19th day of May, 1994.

                                            /s/ John Dalton
                                            ------------------------------------
                                            John Dalton

                                            FIRST FEDERAL SAVINGS BANK OF MARION

                                            By:      /s/ Robert D. Burchard

                                                     Robert D. Burchard

                                            Title:     President

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