756502--2/26/2010--SKYTERRA_COMMUNICATIONS

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Risks Associated with Our Next Generation Business Plan Failure of the Harbinger Merger to close could damage the Company s business. If we fail to obtain additional financing we may not be able to continue as a going concern. Our substantial debt obligations could impair our liquidity and financial condition The market for our planned service is new and unproven and the success of our next generation business will depend on market acceptance. We will depend on one or more third parties to incorporate our next generation technology into their consumer offerings, and such third parties may not be successful or effective in their use of our next generation technology. Failure to develop and supply end-user devices to customers in a timely manner will negatively impact our revenues. We will depend on one or more third party contractors to construct the terrestrial base station component of our next generation integrated network. Current customers may migrate away from our current generation service offerings in advance of the availability of next generation devices and services. Current customers may elect to not migrate to our next generation devices and services when such devices and services become available. Our integrated wireless network will depend on the development and integration of complex technologies in a satellite configuration that might not work. Our next generation satellites are subject to possible construction and delivery delays, the occurrence of which could materially and adversely affect our business. Our satellites could be damaged or destroyed during launch or deployment, fail to achieve their designated orbital location after launch or experience significant launch delays. Satellites have a limited useful life and premature failure of our satellites could damage our business. Limitations on our spectrum and services are included in current arrangements with partners and further limitations may be included in future arrangements with these and other partners. Damage to our satellites may not be fully covered by insurance. Delays in deployment of our terrestrial network due to limited tower availability, local zoning approvals or adequate telecommunications transport capacity would negatively impact our revenues. Our planned terrestrial network or other ground facilities could be damaged by natural catastrophes or man-made disasters. We may be unable to achieve our business and financial objectives because the communications industry is highly competitive. We and our partners must continue to identify, develop and market innovative products or enhance existing products on a timely basis to maintain our competitive position. Economic downturns or declines in consumer spending could negatively affect our results of operations and our access to capital. We may not be able to protect our proprietary information and intellectual property rights, which could limit the growth of our business and impact our ability to compete. Third parties may claim that our products or services infringe their intellectual property rights, which may cause us to pay unexpected litigation costs or damages, or prevent us from making, using, or selling our products. Our business could be harmed if we cannot attract and retain key personnel. Regulatory Risks Associated with Our Business We may not be able to coordinate successfully with other L-band satellite system operators to access and use the full amount of L-band spectrum we currently believe we will be able to utilize. We may not be able to secure the return of certain spectrum we loaned to Inmarsat. Our service may cause or be subject to interference, and we may have to limit our services to avoid harmful interference We need additional regulatory approvals before we can operate ATC. A 2002 decision could be construed to limit a portion of our operations to using no more than 20 MHz of L-band spectrum. Failure to comply with FCC and Industry Canada rules and regulations could damage our business. We may not be able to obtain the necessary regulatory consents for transfer of control of the Company to Harbinger or for a business combination between SkyTerra and Inmarsat. If the supply of available mobile licensed spectrum increases, the value of our spectrum assets may decrease. Technical challenges or regulatory requirements may limit the attractiveness of our spectrum for providing mobile services. Our ability to offer a primarily fixed service may be limited by the policies of the FCC. We may face difficulties in obtaining regulatory approvals for provision of telecommunications services and may face changes in regulation, each of which could adversely affect our operations. Export control and embargo laws may preclude us from obtaining necessary satellites, parts or data or providing certain services in the future. Our contractual relationship with potential partners that may operate ATC facilities in our next generation integrated network must comply with FCC and Industry Canada rules that require ATC to be integrated with the satellite service and require us, as a license holder, to control ATC operations. Rules relating to Canadian ownership and control of SkyTerra Canada are subject to interpretation and change. Risks Relating to Our Common Stock Generally Fluctuations in our operating results could adversely affect the trading price of our common stock. The price of our common stock has been volatile. Our common stock is quoted on the OTC Bulletin Board, which limits the liquidity and could negatively affect the value of our common stock. We do not intend to pay dividends on shares of our common stock in the foreseeable future. The issuance of preferred stock or additional common stock may adversely affect our stockholders. Anti-takeover provisions could make a third-party acquisition of our company difficult. Compliance with changing regulation of corporate governance and public disclosure may result in additional expenses. Harbinger and its affiliates beneficially own a significant portion of our outstanding shares of voting common stock and a significant portion of our outstanding shares of non-voting common stock. Harbinger and its affiliates can take actions that may be adverse to the interests of other stockholders. Shares eligible for future sale could cause the price of our voting common stock to decline. Regulatory Approvals Relating to Harbinger Merger EV-DO Satellite Enabled Mobile Chipsets and Base Transceiver Subsystems GMR1-3G Satellite Enabled Mobile Chipsets and Base Transceiver Subsystems Operator Participation in Satellite Enabled Mobile Chipsets and Base Transceiver Subsystems Possible Merger and Acquisition of Inmarsat Critical Accounting Policies and Estimates Comparison of the years ended December 31 2009, 2008 and 2007 Other Income, Other Expenses and Extraordinary Gain Capital Required for Next Generation Satellite-Based and Terrestrial Network Contractual Obligations and Known Future Cash Requirements Net Cash Used in Operating Activities. Net Cash Used in Investing Activities. Net Cash Provided by Financing Activities. TerreStar Networks and TerreStar Corporation Foreign Currency Exchange Rate Risk Evaluation of Disclosure Controls and Procedures Management s Report on Internal Control Over Financial Reporting Changes in Internal Control Over Financial Reporting Section 16(a) Beneficial Ownership Reporting Compliance What Our Compensation Program is Designed to Reward Elements of Our Compensation Plan and How They Relate to Our Compensation Objectives How the Company Chose Amounts for Each Element and Grant Policies Compensation Committee Interlocks and Insider Participation Marc Montagner and Gary Epstein 2009 Grants of Plan-Based Awards Outstanding Equity Awards at Fiscal Year End 2009 Option Exercises and Stock Vested 2009 Pension Plan/Nonqualified Deferred Compensation Plan Potential Payments upon Termination or Change in Control Restricted Stock Awards for Messrs. Good and Macleod Randy Segal Former Senior Vice President, General Counsel and Secretary Marc Montagner and Gary Epstein Risk Taking Assessment of Compensation Policies

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756502--2/26/2010--SKYTERRA_COMMUNICATIONS_INC