10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 000-13865

SKYTERRA COMMUNICATIONS, INC.

(Exact name of registrant as specified in its charter)

Delaware	23-2368845
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
10802 Parkridge Boulevard, Reston, VA 20191	20191
(Address of principal executive offices)	(Zip Code)

(703) 390-1899

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer x	Accelerated filer o	Non-accelerated filer  o	Smaller reporting company o
		(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes  o   No  x

As of October 31, 2008 there were 48,086,578 shares of the Company’s voting common stock and 59,958,499 shares of the Company’s non-voting common stock outstanding.

SKYTERRA COMMUNICATIONS, INC.

INDEX

PART I – Financial Information		1
Item1.	Financial Statements	1
	Unaudited Consolidated Statements of Operations for the Three and Nine months Ended September 30, 2008 and 2007	1
	Unaudited Consolidated Balance Sheets as of September 30, 2008 and December 31, 2007	2
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Nine months Ended September 30, 2008	3
	Unaudited Condensed Consolidated Statements of Cash Flows for the Nine months Ended September 30, 2008 and 2007	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item3.	Quantitative and Qualitative Disclosures About Market Risk	51
Item4.	Controls and Procedures	52
PART II – Other Information		53
Item1.	Legal Proceedings	53
Item1A.	Risk Factors	53
Item2.	Unregistered Sales of Equity Securities and Use of Proceeds	55
Item3.	Defaults Upon Senior Securities	55
Item4.	Submission of Matters to a Vote of Security Holders	55
Item5.	Other Information	55
Item6.	Exhibits	56
	Signatures	58

1

PART I FINANCIAL INFORMATION

Item1. Financial Statements

SkyTerra Communications, Inc.

Consolidated Statements of Operations

(in thousands, except share and per share data)

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2008			2007			2008			2007
Revenues:
Services and related revenues	$	7,352		$	7,176		$	21,892		$	20,668
Equipment sales		1,867			1,669			4,252			3,952
Other revenues		231			264			706			761
Total revenues		9,450			9,109			26,850			25,381
Operating expenses:
Cost of equipment sold		1,549			1,331			3,451			3,204
Operations and cost of services (exclusive of depreciation and amortization)		9,474			6,145			23,082			17,449
Sales and marketing		1,668			2,149			6,412			5,235
Research and development (exclusive of depreciation and amortization)		3,937			2,841			11,191			7,048
General and administrative		9,833			7,196			25,727			21,658
Depreciation and amortization		8,268			7,793			24,546			21,728
Total operating expenses		34,729			27,455			94,409			76,322
Operating loss		(25,279	)		(18,346	)		(67,559	)		(50,941	)
Other income (expense):
Interest income		1,265			4,052			6,213			14,884
Interest expense		(8,633	)		(8,162	)		(29,980	)		(30,848	)
Impairment of investment in TerreStar Networks		(42,881	)		(22,520	)		(59,675	)		(22,520	)
Other income (expense), net		(1,578	)		(867	)		(715	)		(498	)
Loss before income taxes		(77,106	)		(45,843	)		(151,716	)		(89,923	)
Benefit from income taxes		298			204			758			97
Minority interest		157			739			443			3,305
Net loss	$	(76,651	)	$	(44,900	)	$	(150,515	)	$	(86,521	)
Basic and diluted loss per common share	$	(0.72	)	$	(0.44	)	$	(1.42	)	$	(0.87	)
Basic and diluted weighted average common shares outstanding		106,115,078			101,582,277			106,064,731			98,995,856

See accompanying notes.

2

SkyTerra Communications, Inc.

Consolidated Balance Sheets

(in thousands, except share and per share data)

(unaudited)

	September 30, 2008			December31, 2007
Assets
Current assets:
Cash and cash equivalents	$	52,959		$	127,905
Investments		96,454			97,764
Accounts receivable, net of allowance of $35 and $86, respectively		6,940			4,957
Inventory		1,336			2,531
Other current assets		6,258			3,811
Total current assets		163,947			236,968
Property and equipment, net		640,446			417,052
Intangible assets, net		531,300			539,057
Goodwill		11,871			12,435
Investment in TerreStar Networks		18,425			78,100
Other assets		13,293			11,423
Total assets	$	1,379,282		$	1,295,035
Liabilities and stockholders’ equity
Current liabilities:
Notes payable, current portion	$	574		$	15,745
Accrued interest on senior unsecured notes		7,745			—
Accounts payable		2,694			4,189
Accrued expenses		20,260			48,185
Deferred revenue, current portion		3,102			3,319
Other current liabilities		190			1,260
Total current liabilities		34,565			72,698
Senior secured discount notes, net		611,561			552,719
Senior unsecured notes, net of discount		134,263			—
Notes payable, net of current portion		60,940			36,302
Deferred revenue, net of current portion		15,259			16,333
Other long term liabilities		1,053			257
Total liabilities		857,641			678,309
Commitments and contingencies
Minority interest		129			508
Stockholders’ equity:
Common stock, $0.01 par value. Authorized 200,000,000 shares; 48,086,578 and 34,265,663 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		481			343
Non-voting common stock, $0.01 par value. Authorized 100,000,000 shares; 59,958,499 and 72,614,414 shares issued and outstanding at September 30, 2008 and December 31, 2007, respectively		600			726
Additional paid-in capital		1,008,265			952,520
Accumulated other comprehensive loss		(1,803	)		(1,855	)
Accumulated deficit		(486,031	)		(335,516	)
Total stockholders’ equity		521,512			616,218
Total liabilities and stockholders’ equity	$	1,379,282		$	1,295,035

See accompanying notes.

3

SkyTerra Communications, Inc.

Condensed Consolidated Statements of Stockholders’ Equity

(in thousands, except share data)

(unaudited)

	Common Stock				Non-voting Common Stock						Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital		Loss			Deficit			Equity
Balance, December 31, 2007		34,265,663	$	343		72,614,414		$	726		$	952,520	$	(1,855	)	$	(335,516	)	$	616,218
Exchange of MSV unit options for SkyTerra options		—		—		—			—			19,333		—			—			19,333
Issuance of warrants		—		—		—			—			27,216		—			—			27,216
Exercise of SkyTerra options		80,000		1		—			—			63		—			—			64
Equity-based compensation		1,085,000		11		—			—			9,133		—			—			9,144
Conversion of non-voting to voting common stock		12,655,915		126		(12,655,915	)		(126	)		—		—			—			—
Net loss		—		—		—			—			—		—			(150,515	)		(150,515	)
Foreign currency translation adjustment		—		—		—			—			—		52			—			52
Balance, September 30, 2008		48,086,578	$	481		59,958,499		$	600		$	1,008,265	$	(1,803	)	$	(486,031	)	$	521,512

See accompanying notes.

4

SkyTerra Communications, Inc.

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

			Nine months Ended September 30,
			2008			2007
Operating activities
Net loss	$	(150,515		)	$	(86,521	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash and working capital items		114,873				71,393
Net cash used in operating activities		(35,642		)		(15,128	)
Investing activities
Purchase of property and equipment		(152,304		)		(198,662	)
Restricted cash		(116		)		1,494
Purchase of investments		(215,879		)		(249,083	)
Maturity of investments		216,637				352,192
Cash received in BCE Exchange Transaction for assumed tax liabilities		—				37,000
Payments for assumed tax liabilities of entity acquired in BCE Exchange Transaction		(36,906		)		—
Net cash used in investing activities		(188,568		)		(57,059	)
Financing activities
Proceeds from issuance of Senior Unsecured Notes and Warrants		150,000				—
Principal payments on notes payable		(708		)		(183	)
Proceeds from issuance of notes payable		—				1,219
Proceeds from exercise of SkyTerra stock options		64				588
Proceeds from exercise of MSV unit options		—				564
Net cash provided by financing activities		149,356				2,188
Effect of exchange rates on cash and cash equivalents		(92		)		(183	)
Net decrease in cash and cash equivalents		(74,946		)		(70,182	)
Cash and cash equivalents, beginning of period		127,905				195,017
Cash and cash equivalents, end of period	$	52,959			$	124,835
Supplemental information
Cash paid for interest	$	2,940			$	302
Cash paid for income taxes	$	1,027			$	1,024

See accompanying notes.

5

SkyTerra Communications, Inc.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Organization and Basis of Presentation

All SkyTerra Communications, Inc. (SkyTerra or the Company) operating and development activity is performed through its 99.3% owned consolidated subsidiary Mobile Satellite Ventures LP (MSV). MSV holds a 46.6% effective interest in Mobile Satellite Ventures (Canada) Inc. (MSV Canada) through its 20% interest in MSV Canada and a 33.3% interest in Mobile Satellite Ventures Holdings (Canada) Inc., which is the parent company of MSV Canada. MSV has determined that it is the primary beneficiary of MSV Canada as a result of its obligation, by contract, to fund the operations of MSV Canada, and as a result of a rights and services agreement and a capacity lease agreement between MSV and MSV Canada. As such, and in accordance with FASB Interpretation No. 46, Variable Interest Entities (FIN 46), MSV Canada has been consolidated into the financial results of MSV. Although MSV Canada is Canadian owned and controlled within the meaning of the Telecommunications Act (Canada) and the Radiocommunication Regulations (Canada), references to the "Company" or MSV, include MSV Canada.

The Company currently offers a range of mobile satellite services using two geostationary satellites that support the delivery of data, voice, fax and dispatch radio services. The Company is developing an integrated satellite and terrestrial communications network to provide ubiquitous wireless broadband services, including internet access and voice services, in the United States and Canada. The Company plans to launch two new satellites, MSV-1 and MSV-2, that will serve as the core of this next generation network. The launch window for MSV-1 is expected to open in the fourth quarter of 2009, and continue through the first quarter of 2010.  The launch of MSV-1 is currently expected to occur in the first quarter of 2010.  The launch of MSV-2 is currently expected to occur in the second half of 2010.MSV is licensed by the United States and Canadian governments to operate both current and next generation satellite systems in the L-band spectrum which MSV has coordinated for its use. MSV holds an ancillary terrestrial component (ATC) authorization that will allow operation of a satellite/terrestrial hybrid network in the United States. Deployment of an ATC network has not yet begun, and development is in process. The Company’s spectrum footprint covers a total population of nearly 330 million.

The Company’s operations are subject to significant risks and uncertainties, including technological, competitive, financial, operational, and regulatory risks associated with the wireless communications business. The Company will require substantial additional capital resources to construct its next generation network.

The Company’s current operating assumptions and projections, which include the committed funding discussed below and reflect management’s best estimate of future revenue, operating expenses, and capital commitments, indicate that the Company’s current sources of liquidity (including the Harbinger financing discussed below) should be sufficient to fund operations through the third quarter of 2010. The Company’s ability to meet its projections, however, is subject to uncertainties, and there can be no assurance that the Company’s current projections will be accurate. Additional funds will be needed to complete the construction of the next generation network and fund operations beginning in the fourth quarter of 2010. Although the Company secured committed financing in July 2008, pursuant to an agreement with Harbinger (described in Note 6), Harbinger may not be required to fund the committed financing under certain circumstances, including upon the occurrence of an event that could be deemed a material adverse change. Pursuant to the terms of the agreement with Harbinger, committed funding of $500 million through the sale of four tranches of 16% Senior Unsecured Notes in total is expected to occur on the following dates:

• $150 million – January 2009

• $175 million – April 2009

• $75 million – July 2009

• $100 million – January 2010

The remaining cost of carrying out the Company’s business plan will be significant, and is significantly more than the Company’s currently available and committed resources. If the Company fails to obtain necessary financing on a timely basis, its satellite construction, launch, or other events necessary to conduct the Company’s business could be materially delayed, or its costs could materially increase; the Company could default on its commitments to its satellite construction or launch contractors, creditors or other third parties, leading to termination of construction or inability to launch the Company’s satellites; the Company may not be able to launch its next generation integrated network as planned and may have to discontinue operations or seek a purchaser for its satellite business or assets. MSV could lose its FCC or Industry Canada licenses or its international rights if it fails to achieve required performance milestones. The Company may not be able to continue as a going concern if it fails to obtain necessary financing on a timely basis.

6

           The U.S. and worldwide financial markets have recently experienced unprecedented volatility, particularly in the financial services sector. No assurance can be given that Harbinger will satisfy its funding commitments to the Company in a timely manner, or at all. If Harbinger does not satisfy its funding commitments, the Company may be unable to find alternative financing sources, particularly in light of the current turmoil in the U.S. and worldwide financial markets, and may not be able to continue as a going concern.

The terms of the Company’s current indebtedness and the Securities Purchase Agreement include significant limitations on additional debt, including amount, terms, access to security, duration, among other factors, and impose limitations on the structure of strategic transactions. In addition, the Master Agreement with Harbinger (see Note 6) prohibits, without the prior written consent of Harbinger, the Company’s issuance of common stock or securities to acquire the Company’s common stock in excess of five million shares, other than pursuant to the Company’s employee benefit plans, and the Company’s incurrence of indebtedness greater than $1.66 billion, excluding the 16% Senior Unsecured Notes and financing any debt with respect to the period after March 31, 2010.

In addition to the contractual limitations described above, there currently is little trading in shares of the Company’s common stock, which limits its ability to raise funding through public equity issuances. The recent turmoil in global credit markets and the weakening global economy could negatively impact the Company’s ability to access the capital markets and fund its operations if Harbinger does not satisfy its funding commitments. Furthermore, the Company may not be able to sell its 11.1% ownership stake in TerreStar Networks.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company, MSV, all wholly owned subsidiaries of the Company and MSV, and all variable interest entities for which the Company or MSV is the primary beneficiary. All intercompany accounts are eliminated upon consolidation. These unaudited condensed financial statements have been prepared by the Company in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. In the opinion of management, the accompanying condensed consolidated financial statements contain adjustments consisting only of those of a normal recurring nature, necessary for a fair presentation of the Company’s financial position, results of operations and cash flows at the dates and for the periods indicated. While the Company believes that the disclosures presented are adequate to make the information not misleading, these condensed consolidated financial statements should be read in conjunction with the Company’s financial statements and related notes for the year ended December 31, 2007.

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements requires the use of estimates and judgments that affect the reported amounts of assets, liabilities, equity, and disclosure of contingencies and the reported amounts of revenues and expenses during the reporting period. These estimates and judgments, particularly judgments with respect to the realizability of long-lived assets, including the realizability of the satellite base station capital investment, and estimates relating to the valuation of the investment in TerreStar Networks Inc. (TerreStar Networks), valuation of intangible assets, the useful lives of long-lived assets, the valuation and classification of investments, and the valuation of debt and warrants, among others, have a material impact on the financial statements. Actual results and outcomes could differ from these estimates and assumptions.

Fair Value Measurements

In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, Fair Value Measurements (SFAS No. 157). SFAS No. 157 defines fair value, establishes a framework and gives guidance regarding the methods used for measuring fair value, and expands disclosures about fair value measurements. In February 2008, the FASB released FASB Staff Position, (FSP) SFAS 157-2—Effective Date of FASB Statement No.157, which delays the effective date of SFAS No. 157 for all non-financial assets and non-financial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually) to fiscal years beginning after November 15, 2008. The Company adopted SFAS No. 157 during the first quarter of 2008, effective January 1, 2008.

7

          SFAS No. 157 clarifies that fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, SFAS No. 157 establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1 are observable inputs such as quoted prices in active markets; Level 2 are inputs other than the quoted prices in active markets that are observable either directly or indirectly; and Level 3 are unobservable inputs in which there is little or no market data, which require the Company to develop its own assumptions. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. On a recurring basis, the Company measures certain assets and liabilities at fair value, including certain of the Company’s available-for-sale investments, money market funds and foreign currency contracts. On a non-recurring basis, the Company measures other assets and liabilities at fair value, including the investment in TerreStar Networks, the senior unsecured notes, and the warrants associated with the senior unsecured notes.

In October 2008, the FASB issued FSP No. 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset is Not Active (FSP No. 157-3). FSP No. 157-3 clarifies the application of SFAS No. 157 in a market that is not active and provides an example to illustrate key considerations in determining the fair value of a financial asset when the market for that financial asset is not active. The provisions of FSP No. 157-3 were effective upon issuance and for financial statements not yet reported. The adoption of FSP No. 157-3 did not have a material impact on our consolidated financial statements.

The Company’s fair value measurements at September 30, 2008 using the framework of SFAS No. 157 were as follows (in thousands):

	Balance as of September 30, 2008			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Gains (losses)
Assets:
Cash equivalents	$	52,959		$	45,979		$	6,980	$	—	$	—
Investments		96,454			84,538			11,916		—		(1,600	)
Investment in TerreStar Networks		18,425			—			18,425		—		(59,675	)
Foreign currency contracts		(79	)		(79	)		—		—		(79	)
	$	167,759		$	130,438		$	37,321	$	—	$	(61,354	)

The Company accounted for the issuance of warrants, which were associated with the senior unsecured notes, in accordance with Accounting Principles Board Opinion (APB) No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, whereby the Company separately measured the fair value of the senior unsecured notes and the warrants and allocated the total proceeds of $150 million on a pro-rata basis to each. Based on these fair value determinations the allocation of the proceeds to the senior unsecured notes and warrants was $122.8 million and $27.2 million, respectively, on the closing date of January 7, 2008 (see Note 4).

The Company’s fair value measurements recorded during September 30, 2008 using the framework of SFAS No. 157 were as follows (in thousands):

	Fair Value at Measurement Date		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Gains (losses)
Liabilities:
Senior unsecured notes	$	127,500	$	—	$	127,500	$	—	$	—
Warrants		28,261		—		28,261	$	—		—
	$	155,761	$	—	$	155,761	$	—	$	—

8

Derivative Financial Instruments

The Company accounts for derivatives in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, which requires the recognition of all derivatives as either assets or liabilities measured at fair value with changes in fair value of derivatives reflected as current period income or loss unless the derivatives qualify as hedges of future cash flows. The Company has not followed hedge accounting for any derivative contracts during the nine month periods ended September 30, 2008 and 2007. As of September 30, 2008 the Company held foreign currency contracts with maturities of less than one year of $3.1 million, for which it has recognized a loss of $0.1 million during the three and nine months ended September 30, 2008. As of December 31, 2007 the Company held foreign currency contracts with maturities of less than one year of $1.8 million.

Investments

Investments include commercial paper, certificates of deposit, municipal bonds and securities issued by government agencies. The classification of investments is determined at the time of purchase and re-evaluated at each balance sheet date. The Company holds investments classified as “held-to-maturity” that are reported at amortized cost. The Company holds investments classified as “available-for-sale” that are reported at fair value, with changes in fair value reported within equity as a component of other comprehensive income. The Company holds no investments that are classified as “trading securities”. Interest income is recognized when earned. Realized gains and losses for marketable securities are derived using the specific identification method.

In the event that the amortized cost of an investment exceeds its fair value, the Company evaluates, among other factors, the duration and extent to which the fair value is less than cost, the financial health and business outlook for the investee, and the Company’s intent and ability to hold the investment. If a decline in fair value is considered to be other-than-temporary, the cost basis of the individual security is written down to fair value and included in results of operations.

During the three months ended September 30, 2008 the credit markets came under severe pressure from a confluence of events including the collapse of the sub-prime market, deterioration in the credit default swap market, the near-standstill of the commercial paper market, government control of Fannie Mae and Freddie Mac, the failure of Lehman Brothers, and government-led rescue efforts regarding Merrill Lynch, Wachovia, and AIG. In addition, extraordinary measures taken by U.S. and foreign governments to reestablish the credit markets, including the passage of a $700 billion bailout (including the $250 billion equity injection into financial institutions), have yet to restore fully functioning credit markets.

As a result of these market conditions, the Company made adjustments to its cash and investment position in an effort to reduce exposure to principal loss. Specifically, several securities were sold resulting in insignificant realized gains or losses on those securities during the three months ended September 30, 2008. The Company is now willing to dispose of certain other investments prior to maturity.  Accordingly, the Company now classifies these particular investments as “available for sale” and they are recorded at their estimated fair market value as of September 30, 2008.  No unrealized gain or loss was recognized upon reclassification, as the fair market value of these investments approximated their amortized cost.

As a result of the state of the U.S. credit markets, there was not an active market for certain investments held by the Company at September 30, 2008. The Company evaluated the fair market value of such holdings using relevant and available indicators in order to determine if any of the Company’s investments were “other-than-temporarily impaired”. In addition, the Company consulted and followed guidance provided by the SEC Office of the Chief Accountant and FASB Staff Clarifications issued on September 30, 2008. Among factors considered by the Company that were expressly included in such guidance were the following:

• Internal assumptions such as expected cash flows were used to measure fair value when relevant market data did not exist.

• Appropriate use of broker quotes. Broker quotes are not necessarily indicative of fair value in an illiquid market.

• Consideration that disorderly transactions are not indicative of fair value.

As result of the Company’s analysis it was determined that one commercial paper investment had become “other-than-temporarily impaired” in the amount of $1.6 million and was written down to its estimated fair value, with the impairment charge included in the statement of operations for the three months ended September 30, 2008.

9

Investment in TerreStar Networks

The Company owns 11.1% of TerreStar Networks (a consolidated subsidiary of TerreStar Corporation) that it accounts for under the cost method. The Company evaluates impairment of such investments in accordance with FSP No. 115-1/124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. Accordingly, the Company considers both triggering events and tangible evidence that investments are recoverable within a reasonable period of time, as well as its intent and ability to hold investments that may have become temporarily or otherwise impaired.

On September 12, 2008, the Company entered into a Transfer and Exchange Agreement with TerreStar Corporation. Pursuant to the agreement transferees (not the Company) will have the right until May 15, 2014 to exchange shares of TerreStar Networks for shares of TerreStar Corporation common stock at an exchange ratio of 4.37 shares of TerreStar Corporation common stock per TerreStar Networks share. Upon the first such exchange, the Company has agreed that it will transfer to TerreStar 3,136,428 shares of common stock of TerreStar Global Ltd., a majority-owned subsidiary of TerreStar Corporation, without additional consideration. The Agreement also provides for SkyTerra’s waiver of TerreStar Corporation’s obligation in the Exchange Agreement among SkyTerra, TerreStar and Motient Ventures Holding Inc., dated May 6, 2006, to use its commercially reasonable efforts to distribute 29,926,074 shares of non-voting common stock of SkyTerra (the “SkyTerra Shares”) to TerreStar Corporation’s stockholders. The carrying amount of TerreStar Global Ltd., which the Company has agreed to transfer to TerreStar without additional consideration under certain circumstances noted above, is zero.

In connection with the execution of the agreement, TerreStar Corporation transferred 23,626,074 SkyTerra Shares to funds affiliated with Harbinger and 6,300,000 SkyTerra Shares to other purchasers. Pursuant to the agreement, SkyTerra entered into letter agreements with each of the transferees of these SkyTerra Shares that provide for the exchange of their SkyTerra Shares for shares of voting common stock of SkyTerra on a one-for-one basis and for the registration of such shares for resale with the SEC. On September 16, 2008, the transferees other than Harbinger exchanged an aggregate of 6,300,000 SkyTerra Shares for an equal number of shares of SkyTerra voting common stock. Harbinger’s exchange in full of its SkyTerra Shares for shares of SkyTerra voting common stock is subject to the grant by the Federal Communications Commission of Harbinger’s pending application to acquire control of SkyTerra, and certain of Harbinger’s SkyTerra Shares are being held by a collateral agent until such time. Funds affiliated with Harbinger own a significant number of shares of SkyTerra voting common stock, as disclosed in Harbinger’s Report on Schedule 13D/A filed with the SEC on August 25, 2008.

During the three and nine months ended September 30, 2008, the observable quoted market price of TerreStar Corporation common stock decreased. The decline in TerreStar Corporation’s stock price indicated there may have been a decline in the fair value of the Company’s investment in TerreStar Networks.

Upon the adoption of SFAS No. 157, effective January 1, 2008, the Company evaluated the various methods under which it had previously estimated the fair value of its investment in TerreStar Networks. Based on this assessment, the Company determined that its market based valuation approach (Market Method) that utilizes observable quoted market inputs (Level 1 inputs) and observable other than quoted market inputs (Level 2 inputs), was at a higher level of the fair value hierarchy than other methods it had previously utilized. Accordingly, the Company used the Market Method to perform its assessment of impairment of the investment in TerreStar Networks at March 31, 2008, and June 30, 2008.

To perform its assessment of impairment as of September 30, 2008, the Company updated its approach in light of the Transfer and Exchange Agreement with TerreStar Corporation and the exchange ratio agreed upon that would allow exchange of TerreStar Networks shares for TerreStar Corporation shares that are publicly traded (Exchange Method). The Company now uses that exchange ratio and the quoted market price of TerreStar Corporation common stock to determine the fair value of the TerreStar Networks shares it owns. The Company believes the previously used Market Method is a lower level in the fair value hierarchy due to the Exchange Method’s direct, rather than indirect, link to the publicly traded securities of TerreStar Corporation.

At September 30, 2008, June 30, 2008, and March 31, 2008, the investment in TerreStar Networks valued under the methods described above was $18.4 million, $61.3 million and $69.7 million, respectively. Based on these valuations, the Company determined that the TerreStar Networks investment had become other than temporarily impaired at each balance sheet date. The investment was written down to fair value, resulting in a charge of $42.9 million and $59.7 million during the three and nine months ended September 30, 2008, respectively. There is no assurance that the proceeds from the ultimate disposition of this asset, if any, will be equal to or greater than the $18.4 million carrying amount recorded as of September 30, 2008.

The quoted market price of TerreStar Corporation common stock has continued to decline subsequent to September 30, 2008. The Company will evaluate the effect of the decline on the value of its investment in TerreStar Networks to determine if such decline is other-than-temporary in the fourth quarter of 2008.

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Revenue Recognition

The Company generates revenue through the sale of the following satellite based services: capacity, telephony, data, and dispatch. The Company also sells equipment for use by end users. The Company recognizes revenue when services are performed or delivery has occurred, evidence of an arrangement exists, the fee is fixed or determinable, and collection is probable.

Capacity is the supply of bandwidth and power to customers who implement and operate their own networks. Capacity revenue is recognized as the service is provided.

Telephony is the supply of voice service to end users. Telephony customers are acquired through retail dealers or resellers. Retail dealers receive activation fees and earn commissions on monthly end user access and usage revenues. Resellers are under contractual arrangements with the Company for their purchase of monthly access and usage, and they manage the arrangements with the end user. Telephony customers are charged activation fees, fixed monthly access fees and variable usage charges, generally charged by minute of usage, depending on voice plan chosen. Monthly network access revenue is recognized in the month of service to the end-user. Variable usage revenue is recognized during the period of end-user usage. Activation fees are deferred and recognized ratably over the customer’s contractual service term, generally one year.

Data service provides transmission in an “always-on” fashion. Common applications for data customers include fleet and load management, credit card verification, e-mail, vehicle position reporting, mobile computing, and data message broadcasting. Customers are acquired through resellers. Resellers are under contractual arrangements for their purchase of monthly access and usage from the Company, and manage the arrangements with the end-user. Data service revenue is recognized in the month of service.

Dispatch service provides the wide-area equivalent of “push-to-talk” two-way radio service among users in customer defined groups. Dispatch service facilitates team-based group operations and is highly suited for emergency communications. Customers are acquired through dealers and resellers. Resellers are under contractual arrangements for their purchase of monthly access from the Company, and manage the arrangements with the end-user. Dispatch users pay a fixed monthly access fee for virtually unlimited monthly usage; however, the fee varies with the coverage available. Dispatch service revenue is recognized in the month of service.

New and existing subscribers to the Company’s network can purchase from the Company a range of satellite handset configurations. Hardware generally includes handsets, antennas, and cables, and can be purchased in “kits” that include the hardware a customer would typically need to utilize the satellite services. Resellers may purchase equipment in advance for purposes of resale to their end-users. Equipment generally does not carry a right of return, and revenue is recognized upon transfer of title, which occurs at the time of shipment to the customer.

Capitalized Interest

Interest associated with the construction of the Company’s next generation satellites, launch rockets, and ground stations has been capitalized. Total and capitalized interest is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Capitalized interest	$	19,961	$	9,677	$	52,541		$	20,972
Interest expense		8,633		8,162		29,980			30,848
Total interest	$	28,594	$	17,839	$	82,521		$	51,820

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and for operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Valuation allowances are recorded against deferred tax assets when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the

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generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in evaluating whether it is more likely than not that deferred tax assets will be realized.

The Company adopted the provisions of FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes (FIN 48) on January 1, 2007. The adoption of FIN 48 did not impact the Company’s financial position or results of operations. The Company has concluded that there are no uncertain tax positions requiring recognition in its consolidated financial statements for any period through September 30, 2008. The Company’s policy is to recognize interest and penalties on its income tax matters in the income tax provision.

A valuation allowance has been recorded against substantially all of the Company’s deferred tax assets. The Company has recorded a deferred tax asset for MSV Canada as it intends to carryback losses expected in the current and in future years to obtain refunds of taxes paid in prior years.

The Company or one of its subsidiaries files income tax returns in the U.S. federal jurisdiction and in various states and in foreign jurisdictions, primarily Canada and its provinces. Because the Company’s 2006 U.S. federal income tax return used net operating loss carryforwards dating, in part, back to 1993, some elements of income tax returns back to 1993 are subject to examination. The Company is currently under audit for income taxes by the U.S. federal government and by one U.S. state. The Company does not expect the results of those audits to have a material impact on the Company’s financial position or results of operations.

Other Comprehensive Loss

Comprehensive loss is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. For the three months ended September 30, 2008 and 2007, comprehensive loss was $76.7 million and $45.1 million, respectively. For the nine months ended September 30, 2008 and 2007, comprehensive loss was $150.5 million and $86.9 million, respectively. The difference between net loss and comprehensive loss is due to foreign currency translation adjustments.

Loss Per Common Share

Basic loss per common share is computed by dividing net loss attributable to the common shareholders by the weighted average number of common shares outstanding for the period, excluding unvested restricted stock. Diluted loss per common share reflects the potential dilution for the exercise or conversion of securities into common stock. For the three and nine months ended September 30, 2008 and 2007, options, warrants, and unvested restricted stock aggregating 27,655,522, and 5,145,821 shares, respectively, were excluded from the computation of diluted net loss per common share as the effect would have been anti-dilutive.

Recent Pronouncements

In December 2007, the FASB issued Statement No. 141 (revised 2007), Business Combinations (SFAS No. 141R). SFAS No. 141R establishes principles and requirements for how an acquirer in a business combination (i) recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in the acquiree, (ii) recognizes and measures the goodwill acquired in a business combination or a gain from a bargain purchase, and (iii) determines what information to disclose to enable users of financial statements to evaluate the nature and financial effects of the business combination. SFAS No. 141R will be applied prospectively to business combinations that have an acquisition date on or after January 1, 2009. The impact of SFAS No. 141R on the Company’s consolidated financial statements will depend on the nature and size of acquisitions, if any, subsequent to the effective date.

In December 2007, the FASB issued Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51 (SFAS No. 160). SFAS No. 160 establishes accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. The presentation of a noncontrolling interest has been modified for both the income statement and balance sheet, as well as expanded disclosure requirements that clearly identify and distinguish between the interests of the parent’s owners and the interest of the noncontrolling owners of a subsidiary. The provisions of SFAS No. 160 are effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. The Company is in the process of evaluating the impact that SFAS No. 160 will have on its consolidated financial statements.

In March 2008, the FASB issued Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (SFAS No. 161). SFAS No. 161 amends SFAS No. 133 by improving financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their

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effects on an entity’s financial position, financial performance, and cash flows. The provisions of SFAS No. 161 are effective for fiscal years beginning after November 15, 2008 and interim periods within those fiscal years. The Company is in the process of evaluating the impact, if any, that SFAS No. 161 will have on its consolidated financial statements.

In April 2008, the FASB issued Staff Position (“FSP”) No. 142-3, Determination of the Useful Life of Intangible Assets (FSP No. 124-3). FSP No. 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142. The provisions of FSP No. 142-3 are effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. The Company is in the process of evaluating the impact, if any, that FSP No. 142-3 will have on its consolidated financial statements.

In June 2008, the FASB ratified EITF Issue No. 07-5, Determining Whether an Instrument (or an Embedded Feature) Is Indexed to an Entity’s Own Stock (EITF 07-5). EITF 07-5 provides that an entity should use a two step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. It also clarifies on the impact of foreign currency denominated strike prices and market-based employee stock option valuation instruments on the evaluation. EITF 07-5 is effective for fiscal years beginning after December 15, 2008. The Company is in the process of evaluating the impact, if any, that EITF 07-5 will have on its consolidated financial statements.

In June 2008, the FASB issued FSP EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (FSP EITF 03-6-1). FSP EITF 03-6-1 provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and shall be included in the computation of earnings per share pursuant to the two-class method. Upon adoption, a company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform with the provisions in FSP EITF 03-6-1. The Company’s unvested restricted stock is considered a participating security. FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, including interim periods within those fiscal years. The Company is in the process of evaluating the impact that FSP EITF 03-6-1 will have, if any, on its earnings per share amounts.

Reclassifications

Certain prior-year amounts related to next generation expenditures have been reclassified within operating expenses to conform to the current-year presentation.

3. Acquisition of Minority Interests and Option Exchange

On January 5, 2007, the Company acquired additional equity interests in MSV from BCE Inc. (BCE) (the BCE Exchange Transaction). On February 12, 2007 and November 30, 2007 the Company acquired additional equity interests in MSV from TerreStar Corporation. These transactions were accounted for under the purchase method of accounting and are described more fully in the Company’s annual report on Form 10-K for the year ended December 31, 2007. On August 6, 2008 the Company closed on an offer that had been made to all MSV option holders as of that date, to grant them new options under the SkyTerra Stock Option Plan, generally in exchange for surrender and termination of their MSV options (the “Option Exchange”). This transaction was accounted for under the purchase method of accounting as described more fully in Note 5.  The following unaudited pro forma information is presented as if the Company had completed all the above transactions as of January 1, 2007.

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The pro forma information is not necessarily indicative of what the results of operations would have been had the transactions taken place at such date or of the future results of operations (in thousands except per share information):

	Three months ended September 30, 2008			Three months ended September 30, 2007			Nine months ended September 30, 2008			Nine months ended September 30, 2007
Pro forma revenues, unaudited	$	9,450		$	9,109		$	26,850		$	25,381
Pro forma depreciation and amortization, unaudited		8,358			8,087			25,153			24,213
Pro forma operating loss, unaudited		(25,369	)		(18,640	)		(68,166	)		(53,426	)
Pro forma net loss, unaudited		(76,741	)		(46,031	)		(151,122	)		(92,655	)
Pro forma net loss per share – basic and diluted, unaudited	$	(0.72	)	$	(0.43	)	$	(1.42	)	$	(0.87	)

4. Debt

Debt consisted of the following (in thousands):

	September 30, 2008			December 31, 2007
Senior secured discount notes, net	$	611,561		$	552,719
Senior unsecured notes, net		134,263			—
Notes payable - vendor		60,940			50,765
Note payable		551			1,058
Note payable due to Telesat Canada		23			224
		807,338			604,766
Less: Current portion		(574	)		(15,745	)
Total debt	$	806,764		$	589,021

Senior Secured Discount Notes

In March 2006, MSV issued Senior Secured Discount Notes in an aggregate principal amount of $750 million due at maturity, generating gross proceeds of $436.2 million. Interest on the notes accretes from the issue date at a rate of 14% per annum, until they reach full principal amount at April 1, 2010. Following April 1, 2010, interest will be payable semi-annually in arrears in cash at a rate of 14% per annum, with the first such payment being due on October 1, 2010. The Senior Secured Discount Notes will mature on April 1, 2013.

The Senior Secured Discount Notes are secured by substantially all of MSV’s assets. Upon the occurrence of certain change of control events, each holder of Senior Secured Discount Notes may require the Issuers to repurchase all or a portion of its Senior Secured Discount Notes at a price of 101% of the accreted value, plus, after April 1, 2010, accrued interest. In April 2008, the beneficial owners of a majority in aggregate principal amount at maturity of the Senior Secured Discount Notes irrevocably waived compliance with any and all provisions of the Senior Secured Discount Notes that would, but for such waivers, require MSV to offer to repurchase or to repurchase any of the Senior Secured Discount Notes as the result of a change of control caused by the acquisition of beneficial ownership of voting or nonvoting common stock of SkyTerra by Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund L.P., Harbinger Capital Partners Fund I, L.P. (together Harbinger), or any of their affiliates (see Note 10). Such waivers do not apply to any change of control other than a change of control involving Harbinger or its affiliates.

The terms of the Senior Secured Discount Notes require MSV to comply with certain covenants that restrict some of the Company’s corporate activities, including MSV’s ability to incur additional debt, pay dividends, create liens, make investments, sell assets, make capital expenditures, repurchase equity or subordinated debt, and engage in specified transactions with affiliates. MSV may incur indebtedness beyond the specific baskets allowed under the Senior Secured Discount Notes, provided it maintains a leverage ratio (as defined) of 6 to 1. Noncompliance with any of the covenants without cure or waiver would constitute an event of default under the Senior Secured Discount Notes. An event of default resulting from a breach of a covenant may result, at the option of the note holders, in an acceleration of the principal and interest outstanding. The Senior Secured Discount Notes also contain other customary events of default (subject to specified grace periods), including defaults based on events of bankruptcy and insolvency, and nonpayment of principal, interest or fees when due. MSV was in compliance with the covenants of the Senior Secured Discount Notes as of September 30, 2008.

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      Senior Unsecured Notes

On January 7, 2008, Harbinger purchased $150 million of MSV’s Senior Unsecured Notes due 2013 (the Senior Unsecured Notes) and ten year warrants to purchase 9.1 million shares of the Company’s common stock, with an exercise price of $10 per share. The Senior Unsecured Notes bear interest at a rate of 16.5%, payable in cash or in-kind, at MSV’s option, until December 15, 2011, and thereafter payable in cash. The Senior Unsecured Notes mature on May 1, 2013. 

The Company accounted for the issuance of the warrants in accordance with APB No. 14, Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants, whereby the Company separately measured the fair value of the Senior Unsecured Notes and the warrants and allocated the total proceeds of $150 million on a pro-rata basis to each. The proceeds allocated to the warrants were credited to paid-in capital and the resulting discount from the face value of the Senior Unsecured Notes is amortized using the effective interest rate method over the term of the Senior Unsecured Notes. The fair value of the Senior Unsecured Notes of $127.5 million was estimated based on then-current yields of comparable securities (Level 2 inputs under SFAS No. 157). The fair value of the warrants of $28.3 million was estimated using the Black-Scholes option pricing model and the following assumptions: expected volatility of 58.4%, term of 10 years, risk free interest rate of 4.2%, and no dividend yield. Based on these fair value determinations, the allocation of the proceeds to the Senior Unsecured Notes and the warrants was $122.8 million and $27.2 million, respectively.

In June 2008, the Company made its scheduled interest payment “in-kind” on the Senior Unsecured Notes through the issuance of $10.9 million of additional Senior Unsecured Notes, which are included in the balance of Senior Unsecured Notes in the balance sheet as of September 30, 2008.

The Securities Purchase Agreement governing the Senior Unsecured Notes grants to Harbinger the right of first negotiation to discuss the issuance of additional equity securities by the Company in private placement financing transactions. Should the Company and Harbinger not agree on the terms for such a transaction, Harbinger has the right to maintain their percentage ownership interest through pro rata purchases of shares of common stock in issuances to third parties, subject to a number of exceptions. The Senior Unsecured Notes have subsidiary guarantees and covenants similar to those contained in the Senior Secured Discount Notes, with such modifications as appropriate to reflect the financial terms of the Senior Unsecured Notes. The Securities Purchase Agreement also contains more restrictive covenants regarding mergers, consolidation and transfer of assets and restricted payments. The more restrictive covenants, the right of first negotiation and the pre-emptive rights expire once Harbinger and their affiliates beneficially own less than 5% of the outstanding common stock of the Company or, if earlier, on December 31, 2011.

The terms of the Senior Unsecured Notes require MSV to comply with certain covenants that restrict some of MSV’s corporate activities, including MSV’s ability to incur additional debt, pay dividends, create liens, make investments, sell assets, make capital expenditures, repurchase equity or subordinated debt, and engage in specified transactions with affiliates. Noncompliance with any of the covenants without cure or waiver would constitute an event of default under the Senior Unsecured Notes. An event of default resulting from a breach of a covenant may result, at the option of the note holders, in an acceleration of the principal and interest outstanding. The Senior Unsecured Notes also contain other customary events of default (subject to specified grace periods), including defaults based on events of bankruptcy and insolvency, and nonpayment of principal, interest or fees when due. MSV was in compliance with the covenants of the Senior Unsecured Notes as of September 30, 2008.

Notes Payable – Vendor

MSV has financed$60.9 million of satellite vendor payments with secured vendor notes payable (Notes Payable - Vendor) that bear interest of LIBOR plus 400 basis points plus a 2% administrative fee. The Notes Payable - Vendor are secured by the satellites under construction.

On July 3, 2008, MSV entered into an agreement with Boeing to amend its existing contract with respect to its satellite system procurement. The amendment provides MSV with an additional $40 million of construction payment deferrals on the second satellite under the contract, with an interest rate of LIBOR plus 400 basis points. The original construction payment deferral was in the amount of $76 million. The amendment provides that the original deferrals and the additional deferrals associated with the construction payments will be due and payable upon the earlier of December 20, 2010 or ten days prior to shipment of the MSV-2 satellite, currently planned for the second half of 2010. Prior to the amendment, MSV was to have begun repayment of the original $76 million construction deferrals within one month of reaching the maximum available deferrals, previously estimated to occur

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in the fourth quarter of 2008, with final payment in the first quarter of 2010. The interest rate on the Notes Payable – Vendor was 7.5% as of September 30, 2008.

In exchange for the additional deferrals and deferral extension date, SkyTerra issued Boeing warrants exercisable for 626,002 shares of SkyTerra voting common stock with an exercise price of $10 per share, subject to certain anti-dilution adjustments, with an exercise period of 10 years, vesting on a proportional basis consistent with the drawdown against the additional deferral amounts. In addition, the delivery date for the MSV-2 satellite was extended by four months, to July 11, 2010, which is within the regulatory license milestone requirements. Finally, MSV agreed that in the event any liquidated damages would be due and payable by Boeing for late delivery of either satellite system, $19 million of any such liquidated damages that would have been earned back by Boeing over a more extended period, would be accelerated and able to be earned back by Boeing over a period of two and one-half years. As additional payment deferrals are taken, warrants that vest at that time will be accounted for pursuant to APB Opinion No. 14, “Accounting for Convertible Debt and Debt Issued with Stock Purchase Warrants.

Remaining future minimum payments as of September 30, 2008 related to the Company’s debt agreements, described above, are as follows for the years ended December 31 (in thousands):

2008	$	8,080
2009		34,844
2010		153,080
2011		146,380
2012		151,251
Thereafter		986,722
Total future payments		1,480,357

5. Equity Based Compensation Plans

SkyTerra Equity-Based Compensation Plans

SkyTerra maintains a long-term incentive plan, a nonqualified stock option plan, and an equity incentive plan, that allows for the granting of options and other equity-based awards. The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model. The expected term of option awards has been calculated as the midpoint between the vesting date and the end of the contractual term of the option as historical data for SkyTerra is not sufficient for purposes of estimating the expected term of new grants. The risk-free rate is based on U.S. Treasury yields for securities with similar terms. Volatility is calculated based on the trading prices of SkyTerra common stock.

Assumptions used in determining the fair value of SkyTerra options:

	Nine months ended September 30, 2008
Expected volatility	58%-61%
Expected term (years)	6
Expected dividends	0%
Risk free rate	2.6%-3.6%

As of September 30, 2008, the Company has outstanding awards of 1,910,000 restricted shares of common stock to executives and board members. Certain of those restricted shares contain vesting based on market conditions. The fair value of the restricted stock grants containing market conditions and deemed service periods were estimated using a Monte Carlo simulation model.

The total equity-based compensation expense related to the SkyTerra equity awards recognized during the nine months ended September 30, 2008 and 2007 was $4.8 million and $3.0 million, respectively, and $1.9 million and $1.0 million for the three months ended September 30, 2008 and 2007, respectively. As of September 30, 2008, the total unrecognized compensation related to SkyTerra equity-based compensation is $11.3 million, which is expected to be recognized over a weighted-average period of 1.8 years.

On February 22, 2008 the Boards of Directors of the Company and MSV GP approved a modification of certain outstanding options to purchase the Company’s common stock and MSV’s Limited Investor Units, respectively, that decreased the exercise prices of certain options to an exercise price equal to the then current fair market value of the underlying common stock and Limited Investor Units, respectively. As a result of this

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modification the Company recorded $0.1 and $2.4 million of additional compensation expense in the three and nine months ended September 30, 2008, respectively. This modification will result in the recognition of additional compensation expense in future periods totaling $0.6 million related to unvested options.

SkyTerra and MSV Unit Option Exchange

On August 6, 2008 the Company closed on an offer that had been made to all MSV option holders as of that date, to grant them new options under the SkyTerra Stock Option Plan, generally in exchange for surrender and termination of their MSV options (the “Option Exchange”). All participating U.S. MSV option holders received options in the Company’s plan at a ratio of 2.82 SkyTerra options for each MSV option terminated, with an exercise price equal to the exercise price of the MSV options terminated divided by 2.82. All participating Canadian MSV option holders received the right to exchange MSV options for SkyTerra options on the same terms in the future. Sale of all shares subject to the options received upon exchange is subject to restrictions until May 1, 2010, with certain exceptions that could result in earlier termination of the restrictions. Upon the release of these restrictions Canadian MSV option holders participating in the Option Exchange will have three business days to complete the exchange of their respective MSV options for SkyTerra options, or their MSV options will become unexercisable.

Upon consummation of the Option Exchange, 3.9 million MSV options held by U.S. MSV option holders were exchanged for 11.0 million SkyTerra options. Additionally, Canadian MSV option holders holding 0.6 million MSV options elected to participate in the Option Exchange, and received rights to receive 1.7 million SkyTerra options if they exchange their respective MSV options for SkyTerra options in the future.

The exchange of vested options held by U.S. MSV option holders that were outstanding at September 25, 2006, the date of the MSV Exchange Transaction, and had not been subsequently modified, have been accounted for under the purchase method of accounting.  The fair value of these SkyTerra options was determined using Monte Carlo simulations, and was estimated to be $19.3 million.

Options that were granted to MSV U.S. employees subsequent to September 25, 2006, or granted prior to September 25, 2006 and subsequently modified after that date, and exchanged on August 6, 2008, have been accounted for as modifications, pursuant to SFAS 123(R), Share-Based Payments. The rights granted to MSV Canadian employees in the Option Exchange have also been accounted for as modifications, pursuant to SFAS 123(R), Share-Based Payments as those option holders continue to hold and have the ability to exercise their respective MSV options. The Company determined that there was no incremental compensation cost as a result of these modifications, based on fair values determined by Monte Carlo simulations.

The $19.3 million purchase price was allocated to long-term assets on a pro-rata basis based on their relative fair values on August 6, 2008, the date of the Option Exchange, as follows:

•   $12.9 million to spectrum assets

•   $4.8 million to property and equipment

•   $1.5 million to intellectual property

•   $0.1 million to customer intangibles 

MSV Unit Option Incentive Plan

MSV maintains a unit option incentive plan (MSV Unit Option Incentive Plan), that allows for the granting of options and other unit based awards to employees and directors upon approval by MSV’s Board of Directors. The fair value of each option is estimated on the date of grant using the Black-Scholes option valuation model. The expected term of option awards has been calculated as the midpoint between the vesting date and the end of the contractual term of the option as historical data for MSV is not sufficient for purposes of estimating the expected term of new grants. The risk-free rate is based on U.S. Treasury yields for securities with similar terms. Volatility is calculated based on the trading prices of SkyTerra common stock.

The fair value of Limited Investor Units underlying the equity-based awards is an input to the determination of the fair value of equity-based awards. Beginning in 2008, MSV used a 2.82 exchange ratio between the observable market trading price of SkyTerra and MSV, to value a Limited Investor Unit, based on the ratio contemplated in the offer related to the Option Exchange, that was determined to be “value-for-value”, which commenced in March 2008. Prior to 2008, the Company utilized a market approach to estimate the fair value of Limited Investor Units at each date on which equity-based awards were granted, based on the observable trading stock price of SkyTerra common stock, adjusted to account for differences in volatility and liquidity.

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Assumptions used in determining the fair value of MSV unit options:

	Nine months ended September 30, 2008
Expected volatility	58%-59%
Expected term (years)	6
Expected dividends	0%
Risk free rate	2.1%-3.3%

The Company recognizes compensation expense on a straight-line basis over the requisite service period. The total equity-based compensation expense related to the MSV Unit Option Incentive Plan recognized during the nine months ended September 30, 2008 and 2007 was $4.5 million and $3.1 million, respectively, and $0.3 million and $1.3 million for the three months ended September 30, 2008 and 2007, respectively. The total equity-based compensation capitalized as system under construction related to the MSV Unit Option Incentive Plan during the nine months ended September 30, 2008 and 2007 was $0.4 million and $0.3 million, respectively. As of September 30, 2008, the total unrecognized compensation related to MSV equity-based compensation was $2.0 million, which will be recognized over a weighted-average period of 1.2 years.

Subsequent to the MSV Unit Option Exchange described above, there were 711,750 MSV unit options outstanding as of September 30, 2008. No further MSV Unit Option incentives are expected to be awarded in the future.

6. Material Agreements, Commitments and Contingencies

Securities Purchase Agreement

On July 25, 2008, SkyTerra, MSV, and MSV Finance Co. entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with affiliates of Harbinger, pursuant to which MSV and MSV Finance Co. will issue to Harbinger up to $500,000,000 aggregate principal amount of 16% Senior Unsecured Notes due July 1, 2013 (the “Notes”) in four tranches, with the first tranche available on January 6, 2009. In conjunction with the issuance of Notes pursuant to the Securities Purchase Agreement, SkyTerra will issue to Harbinger warrants to purchase up to an aggregate of 25,000,000 shares of voting or non-voting common stock of SkyTerra (at the option of the holder) at an exercise price of $0.01 per share of common stock. Harbinger’s purchase of these Notes is not conditioned upon the commencement or consummation of a business combination with Inmarsat, as described below. Harbinger may not be required to fund the committed financing under certain circumstances, including upon the occurrence of a material adverse change.

Master Support and Contribution Agreement; Stock Purchase Agreement

On July 25, 2008, the Company, MSV and Mobile Satellite Ventures Subsidiary LLC entered into a Master Contribution and Support Agreement (the “Master Agreement”) and certain other agreements with Harbinger and certain of its affiliates. The Master Agreement provides for the possible combination of SkyTerra and Inmarsat, subject to the receipt of required regulatory and antitrust clearances. SkyTerra and Harbinger expect the regulatory approval process, which includes approval from the U.S. Federal Communications Commission, other telecommunications approvals, and antitrust clearances to take approximately 12 to 18 months. Assuming an acceptable conclusion to the regulatory and competition approval process and Harbinger’s determination to proceed with the transaction, the proposed business combination with Inmarsat is expected to be structured as an offer by SkyTerra to acquire all issued and to be issued shares of Inmarsat not owned by Harbinger (the "Offer"), on terms to be determined by Harbinger and in accordance with the Master Agreement. Harbinger has not yet proposed the formal terms or structure of a possible Offer to SkyTerra or Inmarsat. Harbinger may terminate the Master Agreement at any time and is not obligated to proceed with any business combination transaction involving SkyTerra and Inmarsat.

If Harbinger decides to proceed with the Offer following the receipt of required regulatory approvals, Harbinger would arrange for committed equity and debt financing to fund the Offer. SkyTerra would undertake to use its best efforts to assist Harbinger in obtaining debt financing. To provide equity financing for the Offer, Harbinger may purchase newly issued shares of SkyTerra voting common stock for $2.4 billion in cash or such other amount as Harbinger may determine. The per share purchase price for the newly issued shares will be $10.00 per share subject to an adjustment ratchet relating to the successful Offer price paid for each Inmarsat share. If the Offer

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price for each Inmarsat share is greater or lower than 535 British Pence Sterling then the purchase price for the newly issued SkyTerra shares will increase or decrease proportionately (adjustment ratchet). The 535 British Pence Sterling per share and $10.00 per share prices are reference prices for the purposes of the Master Agreement and the arrangements between Harbinger and SkyTerra. The 535 British Pence Sterling per share does not constitute a term or reference price for the Offer. No Offer pricing discussion has taken place with the board of Inmarsat and no determination has been made by SkyTerra or Harbinger as to any appropriate Offer price. SkyTerra shareholders other than Harbinger may participate in the equity financing for the Offer through a rights offering of voting common stock up to $100 million.

If the Offer is completed Harbinger would contribute to SkyTerra 132 million ordinary shares in Inmarsat and $37.6 million in aggregate principal value of 1.75% convertible bonds issued by Inmarsat and due in 2017, in each case currently owned by Harbinger and its affiliates. In exchange for such contributions, SkyTerra would issue to Harbinger new shares of voting common stock at $10.00 per share subject to the adjustment ratchet. The issuance of new voting and non-voting shares of SkyTerra common stock will be subject to SkyTerra shareholder approval.

As of October 30, 2008 Harbinger owned approximately 28.8% of the issued and outstanding ordinary shares of Inmarsat, and approximately 49.4% of the issued and outstanding shares of voting stock of SkyTerra. Upon completion of the proposed business combination of SkyTerra and Inmarsat, it is expected that Harbinger would own in excess of 85.0% of the outstanding voting stock of the combined entity.

Boeing Contract

MSV has a fixed price contract with Boeing Satellite Systems, Inc. (Boeing) for the comprehensive design, development, construction, manufacturing, testing, and installation of a space-based next generation network, providing satellite launch support and other services related to mission operations and system training. The Company is constructing two satellites under this contract: MSV-1 and MSV-2. Each satellite is contracted to have a mission life of 15 years with performance incentives to be paid, if earned, upon reaching milestones during their operating life. Boeing has a first lien on each satellite and related work until title and risk of loss transfers to the Company upon launch.

If MSV were to elect to terminate the Boeing contract, the Company would be subject to termination charges, including repayment of outstanding payment deferrals, ranging from $204 million to $250 million, declining in mid-2009. Partial termination charges would range from $93 million to $117 million. Future minimum contractual payments exclude all potential performance incentives (which could total a maximum of $96.7 million), interest payments on performance incentives, deferred construction payments, and options.

Launch Contracts

In May 2007, MSV entered into fixed price contracts with ILS International Launch Services, Inc. and Sea Launch Company, LLC to launch the next generation satellites. The launch window for MSV-1 is expected to open in the fourth quarter of 2009, and continue through the first quarter of 2010.  The launch of MSV-1 is currently expected to occur in the first quarter of 2010.  The launch of MSV-2 is currently expected to occur in the second half of 2010. The aggregate cost for these services is $174.8 million. MSV may incur liquidated damages if the contracts are terminated by the Company. If MSV were to terminate the contracts after March 2009 it would not be obligated to make additional payments, and would receive back only a portion of its previously made payments. Through September 30, 2008, the Company has made payments totaling $24.3 million related to these contracts.

Qualcomm Satellite Enabled Mobile Chipsets

In September 2008, MSV, entered into a fifteen-year agreement with Qualcomm Incorporated (Qualcomm) for the provision by Qualcomm of satellite enabled mobile chipsets and satellite base station components built upon Qualcomm-adapted EV-DO technology to facilitate the development of L-band and S-band mobile devices and network systems. A broad range of Qualcomm chipsets, to be available on a mass-market basis, will include satellite and L-band capabilities. The Agreement contemplates that from September 12, 2008, through November 15, 2008, MSV and Qualcomm will complete the detailed specifications and approach for the technology development (the R&S Period). MSV has the right to terminate the Agreement at any time during the R&S Period without any further obligations.

The agreement with Qualcomm also contemplates that other operators (together with MSV, each an Operator) may enter into similar arrangements with Qualcomm. The termination by one Operator of its agreement with Qualcomm does not affect the agreement of any other Operator. The Company has been advised that ICO Satellite Services G.P. (ICO) has entered into a similar agreement with Qualcomm. Each Operator will fund a

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portion of the related non-recurring expenses (NRE) incurred in connection with the Agreements, which will result in a further sharing of NRE if and when additional Operators enter into similar agreements with Qualcomm.

The MSV portion of the NRE to be paid to Qualcomm is expected to be in an amount not to exceed $10 million, which amount will be reduced if other Operators enter into similar agreements with Qualcomm.

In connection with entering into the Qualcomm agreement, MSV and ICO have entered into a mutual non-assertion agreement with respect to relevant aspects of their respective patent portfolios as well as certain other related agreements to the Qualcomm development effort.

HNS Satellite Base Transceiver System

MSV has an agreement with Hughes Network Systems, LLC (HNS), a related party of the Apollo stockholders through direct stock ownership, which at the time of contract arrangement owned a substantial percentage of the Company’s outstanding voting common stock, and currently a related party to Harbinger, to purchase four satellite base transceiver subsystems (SBTS) utilizing air interface technology based on GMR-3G standards for a fixed price of $43.7 million. The SBTS integrate the satellites into the next generation network.

On September 12, 2008, the Company entered into a fifteen-year agreement with Qualcomm for the provision by Qualcomm of satellite enabled mobile chipsets and satellite base station components built upon Qualcomm-adapted EV-DO technology. The HNS SBTS are not compatible with the Qualcomm EV-DO standard. If the Company decides to build solely around EV-DO, $28.4 million in costs incurred as of September 30, 2008 and $15.3 million in remaining contractual commitments related HNS SBTS may become impaired.

The Company continues to be active in the evaluation of technology paths based on GMR-3G standards and continues to evaluate, both internally and externally, the viability, cost, and benefits of an arrangement based on GMR-3G standards. It is uncertain that an arrangement will be consummated pursuant to which the HNS SBTS will continue to confer future economic benefit to the Company.

Inmarsat Cooperation Agreement

In December 2007, to further organize large blocks of contiguous spectrum for the use of MSV, SkyTerra, and MSV Canada (together the MSV Parties), the MSV Parties and Inmarsat Global Limited (Inmarsat) entered into a Cooperation Agreement relating to the use of L-band spectrum for mobile satellite and ATC services in North America. The Cooperation Agreement addresses a number of regulatory, technology and spectrum coordination matters involving L-band spectrum.

Upon receipt of an investment of $100 million in MSV by a third party for general corporate purposes and election by the MSV Parties to trigger certain provisions, the MSV Parties will be able to expand their trials and deployments to a broadband ATC trial using wider spectrum bandwidths, on a specific designation of combined Inmarsat and MSV spectrum in a pre-agreed market. Simultaneously upon the election by the MSV Parties regarding such an investment, the Company is required to issue to Inmarsat $31.3 million of the Company’s common stock, valued in accordance with terms of the agreement.

Upon the occurrence of certain events, including regulatory approvals and coordination among other L-band operators, MSV and MSV Canada, would, over time, have the potential for coordinated access for up to 2 x 23 MHz (including large blocks of contiguous channels) through several phases.

Upon the occurrence of certain events, until September 1, 2011, the MSV Parties have the option (the Phase 1 Option), subject to certain conditions, to effect a transition to a modified band plan within an 18 to 30 month period. Such transition will include modification of certain of Inmarsat’s network and end user devises and a shift in frequencies between the MSV Parties and Inmarsat which would lead to additional spectrum contiguity and more relaxed operating rules for the Company. Over the transition period, the MSV Parties will be required to make payments to Inmarsat of $250 million in cash. Upon the commencement of Phase 1, the Company will issue to Inmarsat a number of shares of the Company’s common stock having a value of $31.3 million, valued in accordance with terms of the agreement. In accordance with the terms of the agreement, Inmarsat and the MSV Parties are in discussions as to whether the closing of the Senior Unsecured Notes will be designated by the MSV Parties as a triggering investment and, if so, what the valuation of the Company’s common stock would be in connection with the required stock issuance. Upon the completion of the transition of the spectrum in Phase 1, the Company will issue to Inmarsat a number of shares of the Company’s common stock having a value of $56.3 million based on the average closing price of the Company’s common stock for the prior forty five (45)-trading day period. The MSV Parties have the option to accelerate the transition timing by accelerating payment to Inmarsat of $50 million that would be credited towards the $250 million in cash payments.

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Subsequent to the exercise of the Phase 1 Option, between January 1, 2010 and January 1, 2013, the MSV Parties have the option (the Phase 2 Option) for Inmarsat to modify its North American operations in a manner that will make significant additional spectrum available to MSV at a cost of $115 million per year. If the MSV Parties do not exercise the Phase 2 Option, then between January 1, 2013 and January 1, 2015, Inmarsat would have the option to require the MSV Parties to exercise the Phase 2 Option on the same terms.

In consideration for the operational transition of spectrum to one or more of the band plans described above, the MSV Parties have agreed to allow Inmarsat continued use of loaned spectrum under dispute (subject to a potential dispute resolution process) and an additional loan of a lesser amount of spectrum.

Certain provisions in the Cooperation Agreement are subject to regulatory approvals. On March 26, 2008, the Administrations of Canada, the United Kingdom, and the United States of America exchanged letters accepting in part the Cooperation Agreement and effectively coordinating the current and next-generation satellite networks of the MSV Parties and Inmarsat, and have notified the ITU accordingly. Additional approvals are required, however, before coordination of the satellite networks, under all phases specified in the Cooperation Agreement, will be complete. There can be no assurance that such approvals or other necessary approvals will be received, or that the conditions necessary for the operation of certain other provisions of the Cooperation Agreement will be met.

During the three months ended September 30, 2008 the Company and Inmarsat exchanged certain spectrum rights. The Company has determined the non-monetary transactions did not result in significant changes to the expected cash flows to the Company, and therefore lack commercial substance as defined in APB No. 29, Accounting for Nonmonetary Transactions. As such no accounting was recorded for such exchanges.

Leases

Office facility leases may provide for escalations of rent or rent abatements and payment of pro rata portions of building operating expenses. The Company records rent expense using the straight-line method over the term of the lease agreement. MSV has non-cancelable operating leases that expire starting in December 2008.

Other Agreements

In September 2006, a minority stakeholder in SkyTerra’s MSV Investors, LLC subsidiary distributed to its shareholders all of its assets other than its interest in MSV Investors. Such shareholders indemnified the Company for any taxes imposed on the minority stakeholder for any taxable period or portion thereof ending on or prior to September 26, 2006, including all liabilities for taxes relating to the distribution of its assets as described above. On September 26, 2006, such shareholders paid the Company $7.5 million of cash to pay such taxes. To the extent that the tax liability is less than $7.5 million, the Company will refund the difference. If the former shareholders are unable to pay taxes that exceed the $7.5 million, the Company will be required to make such payments. During the fourth quarter of 2008, the Company is expected to make a refund to the former shareholders.

Prior to the BCE Exchange Transaction, TMI Delaware distributed to BCE and its affiliates all of the assets of TMI Delaware other than its limited partnership interests in MSV and its common stock of MSV GP. Under the terms of the exchange agreement between the Company and BCE, BCE has indemnified the Company for any taxes imposed on TMI Delaware for any taxable period or portion thereof ending on or prior to the closing of the BCE Exchange Transaction, including all liabilities for taxes relating to the distribution of its assets. At closing, BCE transferred $37.0 million of cash to TMI Delaware that the Company will use to pay such taxes. To the extent that the tax liability is less than $37.0 million, the Company will refund to BCE the difference. During the third quarter of 2008, TMI Delaware filed its income tax returns reflecting the BCE Exchange Transaction and made a payment to BCE in the amount of $7.2 million. Refunds of $1.8 million are expected from the Internal Revenue Service related to this tax return. Upon receipt of such refund, the Company will remit such refund to BCE.

In March 2008, MSV entered into an agreement with Telesat Canada for joint operational services for the MSV-1 and MSV-2 satellites, the development of operation and control software, and the provision of telemetry, tracking and control services once the satellites are in designated orbital positions.  Telesat Canada will provide these services through 2025 assuming the satellites reach full mission life. MSV is entitled to delay the start of services for up to one year due to launch delays without any impact to pricing. The Company has a contract with Telesat Canada for the provision of telemetry, tracking and control services to the Company for its existing satellites. Future minimum payments related to these agreements, reflected in the table below as satellite operational services, assume MSV-1 and MSV-2 reach their full mission life.

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Future minimum payments related to the Company’s commitments are as follows as of September 30, 2008 for the years ending December 31 (in thousands):

	Leases		Boeing (a)		HNS		Launch Services		Satellite Operational Services		Other		Total
2008	$	628	$	6,426	$	4,398	$	13,535	$	809	$	4,528	$	30,324
2009		2,008		86,411		10,946		98,316		2,884		4,206		204,771
2010		2,194		75,348		—		38,589		1,884		300		118,315
2011		615		—		—		—		1,434		158		2,207
2012		336		—		—		—		1,434		158		1,928
Thereafter		4,661		—		—		—		17,447		1,895		24,003
	$	10,442	$	168,185	$	15,344	$	150,440	$	25,892	$	11,245	$	381,548

(a)  Amounts exclude in-orbit incentives, and associated interest. Amounts also exclude payments to Boeing under vendor notes payable, as such amounts are included in the future payments related to debt.

Litigation and Claims

The Company is periodically a party to lawsuits and claims in the normal course of business. While the outcome of the lawsuits and claims against the Company cannot be predicted with certainty, management believes that the ultimate resolution of the matters will not have a material adverse effect on the financial position or results of operations of the Company.

Contingencies

From time to time, contingencies may arise in the ordinary course of business activities. The Company recognizes a liability for contingencies when it is probable that future expenditures will be made and expenditures can be reasonably estimated.

7. Income Taxes

SkyTerra and its eligible subsidiaries file a consolidated United States federal income tax return. As a limited partnership, MSV is not subject to income tax. SkyTerra is subject to income tax based on its share of MSV’s income or loss (99.3%). MSV’s Canadian subsidiary and MSV Canada are taxed as corporations in Canada.

The Company’s effective tax rate differs from the Federal statutory rate, due primarily to operating losses for which a valuation allowance has been recognized.

As of December 31, 2007, SkyTerra and the consolidated subsidiaries had unused net operating loss (NOL) carryforwards of $112.3 million expiring from 2020 through 2027. Utilization of U.S. NOL carryforwards may be subject to an annual limitation if the Company experiences an ownership change as defined by Section 382 of the Internal Revenue Code. On or about April 9, 2008, the Company is likely to have had such an ownership change. The Company is in the process of evaluating whether or not a change occurred and what the impact, if any, would be. Due to the Company’s full valuation allowance on its U.S. NOL carryforwards and other deferred tax assets, a limitation should not materially change the Company’s net deferred tax assets. Despite NOL carryforwards, the Company may have a future income tax liability due to alternative minimum tax or state or foreign tax requirements.

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8. Related Party Transactions

Prior to their spin-off in October 2007 by BCE (which holds a significant interest in the Company), Telesat and Infosat Communications were related parties through common ownership by BCE. Through common ownership by the Apollo Stockholders, the Company’s related parties also included HNS and Hughes Telematics, Inc. In April 2008, Harbinger acquired substantially all of Apollo’s interests in the Company.

Through common ownership by Harbinger, the Company’s related parties include Inmarsat, TerreStar Corporation, TerreStar Networks and HNS. The Company’s related parties also include LCC International Inc., which is controlled by a former limited partner and former member of MSV GP’s Board of Directors. Certain of MSV’s intellectual property was acquired by assignment from entities controlled by such former limited partner. In certain circumstances where the Company may generate royalties from licensing its ATC intellectual property to third parties, the Company may be required to share a portion of such royalty payments with such former limited partner and related entities. The following tables summarize related party transactions (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Income, including management fees	$	163	$	670	$	499		$	1,804
Expenses		75		598		1,085			2,550
Costs related to system under construction		4,430		4,300		15,344			8,599

	As of September 30, 2008		As of December 31, 2007
Due from related parties	$	183	$	617
Due to related parties		1,817		247

9. Segment Information

Operating segments are defined as components of an enterprise for which separate financial information is available and is evaluated on a regular basis by the chief operating decision makers in deciding how to allocate resources to an individual segment and in assessing performance of the segment.

The Company has three reporting segments: MSV next generation, MSV MSS, and SkyTerra corporate. The MSV next generation segment relates to activities to deploy a next generation satellite system. The MSV MSS segment relates to MSV’s provision of mobile satellite services that support the delivery of data, voice, fax and dispatch radio services using its existing in-orbit satellites. The SkyTerra Corporate segment relates to activities related to the publicly traded holding company. Substantially all of the Company’s recent capital expenditures relate to MSV next generation. Management reviews the assets and financial position of MSV next generation and MSV MSS on a combined basis as a significant portion of the Company’s assets are shared between these segments. Assets are not segregated between these segments, and management does not use asset information by these segments to evaluate segment performance.

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The following tables present certain financial information on the Company’s reportable segments for the three and nine months ended September 30, 2008 and 2007 (in thousands):  

	Three months ended September 30, 2008 In Thousands
	MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Eliminations		SkyTerra Consolidated
Revenues:
Services and related revenues	$	—		$	7,352	$	7,352		$	—		$	—	$	7,352
Equipment sales		—			1,867		1,867			—			—		1,867
Other revenues		—			231		231			—			—		231
Total revenues		—			9,450		9,450			—			—		9,450
Operating expenses:
Cost of equipment sold		—			1,549		1,549			—			—		1,549
Operations and cost of services (exclusive of depreciation and amortization)		5,392			4,082		9,474			—			—		9,474
Sales and marketing		812			856		1,668			—			—		1,668
Research and development (exclusive of depreciation and amortization)		3,937			—		3,937			—			—		3,937
General and administrative		3,007			1,512		4,519			5,314			—		9,833
Depreciation and amortization		7,610			658		8,268			—			—		8,268
Total operating expenses		20,758			8,657		29,415			5,314			—		34,729
Operating profit (loss)	$	(20,758	)	$	793	$	(19,965	)	$	(5,314	)	$	—	$	(25,279	)

	Three months ended September 30, 2007 In Thousands
	MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Eliminations		SkyTerra Consolidated
Revenues:
Services and related revenues	$	—		$	7,176	$	7,176		$	—		$	—	$	7,176
Equipment sales		—			1,669		1,669			—			—		1,669
Other revenues		—			264		264			—			—		264
Total revenues		—			9,109		9,109			—			—		9,109
Operating expenses:
Cost of equipment sold		—			1,331		1,331			—			—		1,331
Operations and cost of services (exclusive of depreciation and amortization)		2,186			3,959		6,145			—			—		6,145
Sales and marketing		1,267			882		2,149			—			—		2,149
Research and development (exclusive of depreciation and amortization)		2,841			—		2,841			—			—		2,841
General and administrative		3,519			1,950		5,469			1,727			—		7,196
Depreciation and amortization		7,156			637		7,793			—			—		7,793
Total operating expenses		16,969			8,759		25,728			1,727			—		27,455
Operating profit (loss)	$	(16,969	)	$	350	$	(16,619	)	$	(1,727	)	$	—	$	(18,346	)

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	Nine months ended September 30, 2008 In Thousands
	MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Eliminations		SkyTerra Consolidated
Revenues:
Services and related revenues	$	—		$	21,892	$	21,892		$	—		$	—	$	21,892
Equipment sales		—			4,252		4,252			—			—		4,252
Other revenues		—			706		706			—			—		706
Total revenues		—			26,850		26,850			—			—		26,850
Operating expenses:
Cost of equipment sold		—			3,451		3,451			—			—		3,451
Operations and cost of services (exclusive of depreciation and amortization)		11,014			12,068		23,082			—			—		23,082
Sales and marketing		3,510			2,902		6,412			—			—		6,412
Research and development (exclusive of depreciation and amortization)		11,191			—		11,191			—			—		11,191
General and administrative		10,766			5,439		16,205			9,522			—		25,727
Depreciation and amortization		22,596			1,950		24,546			—			—		24,546
Total operating expenses		59,077			25,810		84,887			9,522			—		94,409
Operating profit (loss)	$	(59,077	)	$	1,040	$	(58,037	)	$	(9,522	)	$	—	$	(67,559	)

	Nine months ended September 30, 2007 In Thousands
	MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Eliminations		SkyTerra Consolidated
Revenues:
Services and related revenues	$	—		$	20,668	$	20,668		$	—		$	—	$	20,668
Equipment sales		—			3,952		3,952			—			—		3,952
Other revenues		—			761		761			—			—		761
Total revenues		—			25,381		25,381			—			—		25,381
Operating expenses:
Cost of equipment sold		—			3,204		3,204			—			—		3,204
Operations and cost of services (exclusive of depreciation and amortization)		5,715			11,734		17,449			—			—		17,449
Sales and marketing		2,735			2,500		5,235			—			—		5,235
Research and development (exclusive of depreciation and amortization)		7,048			—		7,048			—			—		7,048
General and administrative		10,436			5,423		15,859			5,799			—		21,658
Depreciation and amortization		19,915			1,813		21,728			—			—		21,728
Total operating expenses		45,849			24,674		70,523			5,799			—		76,322
Operating profit (loss)	$	(45,849	)	$	707	$	(45,142	)	$	(5,799	)	$	—	$	(50,941	)

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The following tables present balance sheet information for the Company’s reportable segments as of September 30, 2008 and December 31, 2007 (in thousands):

	As of September 30, 2008
	Total MSV		SkyTerra		Eliminations			SkyTerra Consolidated
Total assets	$	1,365,753	$	48,958	$	(35,429	)	$	1,379,282
Senior secured discount notes, net		611,561		—		—			611,561
Senior unsecured notes, net		134,263		—		—			134,263
Notes payable		61,514		7,953		(7,953	)		61,514
Total liabilities		853,722		12,132		(8,213	)		857,641
Total equity		512,031		36,826		(27,345	)		521,512
	As of December 31, 2007
	Total MSV		SkyTerra		Eliminations			SkyTerra Consolidated
Total assets	$	1,180,248	$	119,960	$	(5,173	)	$	1,295,035
Senior secured discount notes, net		552,719		—		—			552,719
Notes payable		52,047		5,125		(5,125	)		52,047
Total liabilities		637,602		45,880		(5,173	)		678,309
Total equity		542,646		74,080		(508	)		616,218

10. Subsequent Events

Aaron Stone resigned from the Board of Directors of the Company, effective as of November 8, 2008. Mr. Stone is departing in light of his other professional responsibilities.

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Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion contains forward-looking statements within the meaning of Section27A of the Securities Act of 1933 and Section21E of the Securities Exchange Act of 1934 that involve risks and uncertainties, including statements regarding the Company’s capital needs, business strategy, expectations and intentions. The Company urges you to consider that statements that use the terms “believe,” “do not believe,” “anticipate,” “expect,” “plan,” “estimate,” “intend” and similar expressions are intended to identify forward-looking statements. These statements reflect the Company’s current views with respect to future events. The Company’s business is subject to numerous risks and uncertainties, including the risks described in the “Risk Factors” section of the Company’s annual report on Form 10-K for the year ended December 31, 2007. Accordingly, the Company’s actual results could differ materially from those anticipated in the forward-looking statements, including those set forth below under this “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report. Actual results will most likely differ from those reflected in these statements, and the differences could be substantial. The Company disclaims any obligation to publicly update these statements, or disclose any difference between the Company’s actual results and those reflected in these statements. The information constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

Overview

All SkyTerra Communications, Inc. (SkyTerra or the Company) operating and development activity is performed through its 99.3% owned consolidated subsidiary Mobile Satellite Ventures LP (MSV). MSV holds a 46.6% effective interest in Mobile Satellite Ventures (Canada) Inc. (MSV Canada) through its 20% interest in MSV Canada and a 33.3% interest in Mobile Satellite Ventures Holdings (Canada) Inc., which is the parent company of MSV Canada. MSV has determined that it is the primary beneficiary of MSV Canada as a result of its obligation, by contract, to fund the operations of MSV Canada, and as a result of a rights and services agreement and a capacity lease agreement between MSV and MSV Canada. As such, and in accordance with FASB Interpretation No. 46, Variable Interest Entities (FIN 46), MSV Canada has been consolidated into the financial results of MSV. Although MSV Canada is Canadian owned and controlled within the meaning of the Telecommunications Act (Canada) and the Radiocommunication Regulations (Canada), references to the "Company" or MSV, include MSV Canada.

The Company currently offers a range of mobile satellite services using two geostationary satellites that support the delivery of data, voice, fax and dispatch radio services. MSV is licensed by the United States and Canadian governments to operate both current and next generation satellite systems in the L-band spectrum which MSV has coordinated for its use. MSV holds an ancillary terrestrial component (ATC) authorization that will allow operation of a satellite/terrestrial hybrid network in the United States. Deployment of an ATC network has not yet begun, and development is in process. The Company’s spectrum footprint covers a total population of nearly 330 million.

The Company is developing a next generation integrated satellite and terrestrial communications network to provide ubiquitous wireless broadband services, including internet access and voice services, in the United States and Canada. As part of this network, the Company plans to allocate spectrum between satellite and terrestrial service. Using an all-IP, open architecture, the Company believes its network will provide significant advantages over existing wireless networks. Such potential advantages include higher data speeds, lower costs per bit and flexibility to support a range of custom IP applications and services. The Company was the first MSS provider to receive a license to operate an ATC network from the Federal Communications Commission (FCC). The ATC licenses permit the use of the Company’s L-band satellite frequencies, in a complementary tower based network, in the operation of an advanced, integrated network capable of providing wireless broadband on a fixed, portable and fully mobile basis. The Company plans to launch two new satellites that will serve as the core of this new network. The launch window for MSV-1 is expected to open in the fourth quarter of 2009, and continue through the first quarter of 2010.  The launch of MSV-1 is currently expected to occur in the first quarter of 2010.  The launch of MSV-2 is currently expected to occur in the second half of 2010.

The Company's satellite development efforts are at a stage where delays against construction plans can reasonably be expected to occur, generally as a result of delays in the construction of satellite components and integration of those components into the spacecrafts. In particular, delays experienced in the construction, integration, and testing of the reflector component of the satellites could result in a delay of the delivery of the satellites to the launch site, as compared to the Company’s current expectations. Presently, such a delay is not anticipated to affect the launch date of the satellites as some amount of flexibility is provided for in the Company’s construction and launch plans. There are no assurances that delays will not occur in this and other component construction, integration, and testing. Such delays could affect the planned launch date of the satellites. In the event

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of delays, certain liquidated damages may become due from Boeing. However, such amounts may not be adequate to compensate the Company for losses sustained by delays of satellite launch.

As part of the agreement to amend the satellite contract (see Note 6 to the Condensed Consolidated Financial Statements) MSV agreed to extend the delivery date of the MSV-2 satellite network by four months, to July 11, 2010. MSV also agreed that in the event any liquidated damages would be due and payable by Boeing for late delivery of either satellite system, $19 million of any such liquidated damages that would have been earned back by Boeing over a more extended period, would be accelerated and able to be earned back by Boeing over a period of two and one-half years.

The Company currently expects to offer a range of three broad services on its next generation network.  First, the Company will facilitate the transition of its current customers to the next generation services platform and will continue to support current generation communications ground segments and mobile data system network terminals, which it expects will generate revenue through at least the end of 2012.  Second, the Company plans to provide bandwidth and power to customers of the next generation system who will implement and operate their own networks, generating revenue after the launch of the next generation satellites which could continue until end of next generation system life.  No such bandwidth and power customers currently exist for the next generation system. Finally, the Company plans to provide next generation wireless coverage that will be accessible on conventional handsets that enable interoperable, feature-rich voice and high-speed data services.  Based on the integrated chipset development and production schedule required for such services, the Company does not currently expect to generate next generation wireless coverage revenues until some time after the next generation satellites have been launched and placed into service. The Company has made significant investments in technology to support its next generation network. To the extent that the Company changes its strategic direction, or otherwise changes its technology platform, material amounts of assets capitalized to date could become impaired if they no longer have expected future use.

The Company’s current business plan for the next generation network is a wholesale model whereby the Company’s strategic partners and other wholesale customers can use the network to provide differentiated broadband services to their subscribers. The Company believes its planned open network, in contrast to legacy networks currently operated by incumbent providers, will allow distribution and other strategic partners to have open network access and create a wide variety of custom applications and services for consumers. To address the opportunities and challenges inherent in the development of the Company’s next generation network, the Company continues to focus on initiatives related to:

• Monitoring of satellite and MSS ground-based network construction by the manufacturer.

• Development of the infrastructure and technologies required to operate MSS services upon launch of next generation space-based network.

• Continued coordination of L-band spectrum with other operators.

• Evaluating and managing development and construction timelines as new components of the next generation network are added (chipsets, air-interfaces) to ensure integration and cost-effectiveness.

• Arrangement of distribution partnerships for both MSS and ATC components of the next generation network.

• Development and evaluation of funding alternatives.

Corporate Activity

Qualcomm Satellite Enabled Mobile Chipsets

On September 12, 2008, MSV entered into a fifteen-year agreement with Qualcomm for the provision by Qualcomm of satellite enabled mobile chipsets and satellite base station components built upon Qualcomm-adapted EV-DO technology to facilitate the development of L-band and S-band mobile devices and network systems. A broad range of Qualcomm chipsets, to be available on a mass-market basis, will include satellite and L-band capabilities. The agreement contemplates that from September 12, 2008, through November 15, 2008, MSV and Qualcomm will complete the detailed specifications and approach for the technology development (the R&S Period). MSV has the right to terminate the Agreement at any time during the R&S Period without any further obligations.

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Securities Purchase Agreement

On July 25, 2008, SkyTerra, MSV, and MSV Finance Co. entered into a Securities Purchase Agreement (the "Securities Purchase Agreement") with affiliates of Harbinger, pursuant to which MSV and MSV Finance Co. will issue to Harbinger up to $500,000,000 aggregate principal amount of 16.0% Senior Unsecured Notes due July 1, 2013 (the “Notes”) in four tranches, with the first tranche available on January 6, 2009. In conjunction with the issuance of Notes pursuant to the Securities Purchase Agreement, SkyTerra will issue to Harbinger warrants to purchase up to an aggregate of 25,000,000 shares of voting or non-voting common stock of SkyTerra (at the option of the holder) at an exercise price of $0.01 per share of common stock. Harbinger’s purchase of these Notes is not conditioned upon the commencement or consummation of a business combination with Inmarsat, as described below. Harbinger may not be required to fund the committed financing under certain circumstances, including upon the occurrence of a material adverse change.

Master Support and Contribution Agreement; Stock Purchase Agreement

On July 25, 2008, the Company, MSV and Mobile Satellite Ventures Subsidiary LLC entered into a Master Contribution and Support Agreement (the “Master Agreement”) and certain other agreements with Harbinger and certain of its affiliates. The Master Agreement provides for the possible combination of SkyTerra and Inmarsat, subject to the receipt of required regulatory and antitrust clearances. SkyTerra and Harbinger expect the regulatory approval process, which includes approval from the U.S. Federal Communications Commission, other telecommunications approvals, and antitrust clearances to take approximately 12 to 18 months. Assuming an acceptable conclusion to the regulatory and competition approval process and Harbinger’s determination to proceed with the transaction, the proposed business combination with Inmarsat is expected to be structured as an offer by SkyTerra to acquire all issued and to be issued shares of Inmarsat not owned by Harbinger (the "Offer"), on terms to be determined by Harbinger and in accordance with the Master Agreement. Harbinger has not yet proposed the formal terms or structure of a possible Offer to SkyTerra or Inmarsat. Harbinger may terminate the Master Agreement at any time and is not obligated to proceed with any business combination transaction involving SkyTerra and Inmarsat.

If Harbinger decides to proceed with the Offer following the receipt of required regulatory approvals, Harbinger would arrange for committed equity and debt financing to fund the Offer. SkyTerra would undertake to use its best efforts to assist Harbinger in obtaining debt financing. To provide equity financing for the Offer, Harbinger may purchase newly issued shares of SkyTerra voting common stock for $2.4 billion in cash or such other amount as Harbinger may determine. The per share purchase price for the newly issued shares will be $10.00 per share subject to an adjustment ratchet relating to the successful Offer price paid for each Inmarsat share. If the Offer price for each Inmarsat share is greater or lower than 535 British Pence Sterling then the purchase price for the newly issued SkyTerra shares will increase or decrease proportionately (adjustment ratchet). The 535 British Pence Sterling per share and $10.00 per share prices are reference prices for the purposes of the Master Agreement and the arrangements between Harbinger and SkyTerra. The 535 British Pence Sterling per share does not constitute a term or reference price for the Offer. No Offer pricing discussion has taken place with the board of Inmarsat and no determination has been made by SkyTerra or Harbinger as to any appropriate Offer price. SkyTerra shareholders other than Harbinger may participate in the equity financing for the Offer through a rights offering of voting common stock up to $100 million.

If the Offer is completed Harbinger would contribute to SkyTerra 132 million ordinary shares in Inmarsat and $37.6 million in aggregate principal value of 1.75% convertible bonds issued by Inmarsat and due in 2017, in each case currently owned by Harbinger and its affiliates. In exchange for such contributions, SkyTerra would issue to Harbinger new shares of voting common stock at $10.00 per share subject to the adjustment ratchet. The issuance of new voting and non-voting shares of SkyTerra common stock will be subject to SkyTerra shareholder approval.

As of October 30, 2008 Harbinger owned approximately 28.8% of the issued and outstanding ordinary shares of Inmarsat, and approximately 49.4% of the issued and outstanding shares of voting stock of SkyTerra. Upon completion of the proposed business combination of SkyTerra and Inmarsat, it is expected that Harbinger would own in excess of 85.0% of the outstanding voting stock of the combined entity.

Boeing Deferred Payment Schedule

On July 3, 2008, MSV entered into an agreement with Boeing to amend its existing contract with respect to its satellite system procurement. The amendment provides for an additional $40 million of construction payment deferrals. The original construction payment deferral was in the amount of $76 million. The amendment provides that the original deferrals and the additional deferrals associated with the construction payments will be due and

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payable upon the earlier of December 20, 2010 or ten days prior to shipment of the MSV-2 satellite, currently planned for the second half of 2010.

SkyTerra and MSV Unit Option Exchange

On August 6, 2008 the Company closed on an offer that had been made to all MSV option holders as of that date, to grant them new options under the SkyTerra Stock Option Plan, generally in exchange for surrender and termination of their MSV options (the “Option Exchange”). All participating US MSV option holders received options in the Company’s plan at a ratio of 2.82 SkyTerra options for each MSV option terminated, with an exercise price equal to the exercise price of the MSV options terminated divided by 2.82. All participating Canadian MSV option holders received the right to exchange MSV options for SkyTerra options on the same terms in the future. Sale of all shares subject to the options received upon exchange is subject to restrictions until May 1, 2010, with certain exceptions that could result in earlier termination of the restrictions. Upon the release of these restrictions Canadian MSV option holders participating in the Option Exchange will have three business days to complete the exchange of their respective MSV options for SkyTerra options, or their MSV options will become unexercisable.

Upon consummation of the Option Exchange 3.9 million MSV options held by US MSV option holders were exchanged for 11.0 million SkyTerra options. Additionally, Canadian MSV option holders holding 0.6 million MSV options elected to participate in the Option Exchange, and received rights to receive 1.7 million SkyTerra options if they exchange their respective MSV options for SkyTerra options in the future.

Critical Accounting Policies

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of the Company’s consolidated financial statements requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities and equity 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. These estimates, particularly judgments with respect to the realizability of long-lived assets including of the cost of the satellite base station capital investment, and estimates relating to the valuation of the investment in TerreStar Networks, valuation of intangible assets, the useful lives of long-lived assets, the valuation and classification of investments, the valuation of the Senior Unsecured Notes and warrants, valuations relating to equity-based compensation, and judgments involved in evaluating impairment, among others, have a material impact on the Company’s financial statements. Actual results and outcomes could differ from these estimates and assumptions.

For a more detailed explanation of the judgments made in these areas and a discussion of the Company’s accounting estimates and policies, refer to “Critical Accounting Policies” included in Item 7 and “Summary of Significant Accounting Policies” (Note 2) to the Company’s consolidated financial statements beginning on page F-26 of the Annual Report on Form 10-K for the year ended December 31, 2007.

Fair Value Inputs

The Company adopted SFAS No. 157, Fair Value Measurements, as of January 1, 2008. See Note 2 to the Condensed Consolidated Financial Statements. Fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. 

Investments

Investments include commercial paper, certificates of deposit, municipal bonds and securities issued by government agencies. The classification of investments is determined at the time of purchase and re-evaluated at each balance sheet date. The Company holds investments classified as “held-to-maturity” that are reported at amortized cost. The Company holds investments classified as “available-for-sale” that are reported at fair value, with changes in fair value reported within equity as a component of other comprehensive income. The Company holds no investments that are classified as “trading securities”. Interest income is recognized when earned. Realized gains and losses for marketable securities are derived using the specific identification method.

In the event that the amortized cost of an investment exceeds its fair value, the Company evaluates, among other factors, the duration and extent to which the fair value is less than cost, the financial health and business outlook for the investee, and the Company’s intent and ability to hold the investment. If a decline in fair value is considered to be other-than-temporary, the cost basis of the individual security is written down to fair value and included in results of operations.

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During the three months ended September 30, 2008 the credit markets came under severe pressure from a confluence of events including the collapse of the sub-prime market, deterioration in the credit default swap market, the near-standstill of the commercial paper market, government control of Fannie Mae and Freddie Mac, the failure of Lehman Brothers, and government-led rescue efforts regarding Merrill Lynch, Wachovia, and AIG. In addition, extraordinary measures taken by U.S. and foreign governments to reestablish the credit markets, including the passage of a $700 billion bailout (including the $250 billion equity injection into financial institutions), have yet to restore fully functioning credit markets.

As a result of these market conditions, the Company made adjustments to its cash and investment position in an effort to reduce exposure to principal loss. Specifically, several securities were sold resulting in insignificant realized gains or losses on those securities during the three months ended September 30, 2008. The Company is now willing to dispose of certain other investments prior to maturity.  Accordingly, the Company now classifies these particular investments as “available for sale” and they are recorded at their estimated fair market value as of September 30, 2008.  No unrealized gain or loss was recognized upon reclassification, as the fair market value of these investments approximated their amortized cost.

As a result of the state of the U.S. credit markets, there was not an active market for certain investments held by the Company at September 30, 2008. The Company evaluated the fair market value of such holdings using relevant and available indicators in order to determine if any of the Company’s investments were “other-than-temporarily impaired”. In addition, the Company consulted and followed guidance provided by the SEC Office of the Chief Accountant and FASB Staff Clarifications issued on September 30, 2008. Among factors considered by the Company that were expressly included in such guidance were the following:

• Internal assumptions such as expected cash flows were used to measure fair value when relevant market data did not exist.

• Appropriate use of broker quotes. Broker quotes are not necessarily indicative of fair value in an illiquid market.

• Consideration that disorderly transactions are not indicative of fair value.

As result of the Company’s analysis it was determined that one commercial paper investment had become “other-than-temporarily impaired” in the amount of $1.6 million and was written down to its estimated fair value, with the impairment charge included in the statement of operations for the three months ended September 30, 2008.

Investment in TerreStar Networks

The Company owns 11.1% of TerreStar Networks (a consolidated subsidiary of TerreStar Corporation) that it accounts for under the cost method. The Company evaluates impairment of such investments in accordance with FSP No. 115-1/124-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments. Accordingly, the Company considers both triggering events and tangible evidence that investments are recoverable within a reasonable period of time, as well as its intent and ability to hold investments that may have become temporarily or otherwise impaired.

On September 12, 2008, the Company entered into a Transfer and Exchange Agreement with TerreStar Corporation. Pursuant to the agreement transferees (not the Company) will have the right until May 15, 2014 to exchange shares of TerreStar Networks for shares of TerreStar Corporation common stock at an exchange ratio of 4.37 shares of TerreStar Corporation common stock per TerreStar Networks share. Upon the first such exchange, the Company has agreed that it will transfer to TerreStar 3,136,428 shares of common stock of TerreStar Global Ltd., a majority-owned subsidiary of TerreStar Corporation, without additional consideration. The Agreement also provides for SkyTerra’s waiver of TerreStar Corporation’s obligation in the Exchange Agreement among SkyTerra, TerreStar and Motient Ventures Holding Inc., dated May 6, 2006, to use its commercially reasonable efforts to distribute 29,926,074 shares of non-voting common stock of SkyTerra (the “SkyTerra Shares”) to TerreStar Corporation’s stockholders. The carrying amount of TerreStar Global Ltd., which the Company has agreed to transfer to TerreStar without additional consideration under certain circumstances noted above, is zero.

In connection with the execution of the agreement, TerreStar Corporation transferred 23,626,074 SkyTerra Shares to funds affiliated with Harbinger and 6,300,000 SkyTerra Shares to other purchasers. Pursuant to the agreement, SkyTerra entered into letter agreements with each of the transferees of these SkyTerra Shares that provide for the exchange of their SkyTerra Shares for shares of voting common stock of SkyTerra on a one-for-one basis and for the registration of such shares for resale with the SEC. On September 16, 2008, the transferees other than Harbinger exchanged an aggregate of 6,300,000 SkyTerra Shares for an equal number of shares of SkyTerra voting common stock. Harbinger’s exchange in full of its SkyTerra Shares for shares of SkyTerra voting common stock is subject to the grant by the Federal Communications Commission of Harbinger’s pending application to

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acquire control of SkyTerra, and certain of Harbinger’s SkyTerra Shares are being held by a collateral agent until such time. Funds affiliated with Harbinger own a significant number of shares of SkyTerra voting common stock, as disclosed in Harbinger’s Report on Schedule 13D/A filed with the SEC on August 25, 2008.

During the three and nine months ended September 30, 2008, the observable quoted market price of TerreStar Corporation common stock decreased. The decline in TerreStar Corporation’s stock price indicated there may have been a decline in the fair value of the Company’s investment in TerreStar Networks.

Upon the adoption of SFAS No. 157, effective January 1, 2008, the Company evaluated the various methods under which it had previously estimated the fair value of its investment in TerreStar Networks. Based on this assessment, the Company determined that its market based valuation approach (Market Method) that utilizes observable quoted market inputs (Level 1 inputs) and observable other than quoted market inputs (Level 2 inputs), was at a higher level of the fair value hierarchy than other methods it had previously utilized. Accordingly, the Company used the Market Method to perform its assessment of impairment of the investment in TerreStar Networks at March 31, 2008, and June 30, 2008.

To perform its assessment of impairment as of September 30, 2008, the Company updated its approach in light of the Transfer and Exchange Agreement with TerreStar Corporation and the exchange ratio agreed upon that would allow exchange of TerreStar Networks shares for TerreStar Corporation shares that are publicly traded (Exchange Method). The Company believes the previously used Market Method is a lower level in the fair value hierarchy due to the Exchange Method’s direct, rather than indirect, link to the publicly traded securities of TerreStar Corporation.

At September 30, 2008, June 30, 2008, and March 31, 2008, the investment in TerreStar Networks valued under the methods described above was $18.4 million, $61.3 million and $69.7 million, respectively. Based on these valuations, the Company determined that the TerreStar Networks investment had become other than temporarily impaired at each balance sheet date. The investment was written down, resulting in a charge of $42.9 million and $59.7 million during the three and nine months ended September 30, 2008, respectively. There is no assurance that the proceeds from the ultimate disposition of this asset, if any, will be equal to or greater than the $18.4 million carrying amount recorded as of September 30, 2008.

The trading value of TerreStar Corporation common stock has continued to decline subsequent to September 30, 2008. The Company will evaluate the effect of the decline on the value of its investment in TerreStar Networks to determine if such decline is other-than-temporary in the fourth quarter of 2008.

Current Business

The Company’s significant operating activity, providing mobile satellite communication services, is performed through its consolidated subsidiary MSV. MSV provides service in the United States and Canada using two nearly identical satellites. End users of MSV’s mobile satellite services operate at sea, on land and in the air, and customers use various services including satellite bandwidth and power capacity, telephony, data, and dispatch services. MSV sells equipment for use on the network.

Comparison of the three and nine months ended September 30, 2008 and 2007

The following tables detail the Company’s consolidated financial results for the three and nine months ended September 30, 2008 and September 30, 2007 in the following segments: MSV Next Generation (research, development, and implementation of a next generation network), MSV MSS (current satellite services), and SkyTerra corporate activities.

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	Three months ended September 30, 2008 In Thousands
		MSV Next Generation			MSV MSS			Total MSV			SkyTerra Corporate			Elimination			SkyTerra Consolidated
Revenues:
Services and related revenues		$	—		$	7,352		$	7,352		$	—		$	—		$	7,352
Equipment sales			—			1,867			1,867			—			—			1,867
Other revenues			—			231			231			—			—			231
Total revenues			—			9,450			9,450			—			—			9,450
Operating expenses:
Cost of equipment sold			—			1,549			1,549			—			—			1,549
Operations and cost of services (exclusive of depreciation and amortization)			5,392			4,082			9,474			—			—			9,474
Sales and marketing			812			856			1,668			—			—			1,668
Research and development (exclusive of depreciation and amortization)			3,937			—			3,937			—			—			3,937
General and administrative			3,007			1,512			4,519			5,314			—			9,833
Depreciation and amortization			7,610			658			8,268			—			—			8,268
Total operating expenses			20,758			8,657			29,415			5,314			—			34,729
Operating profit (loss)			(20,758	)		793			(19,965	)		(5,314	)		—			(25,729	)
Other income (expense):
Interest income			1,303			—			1,303			46			(84	)		1,265
Interest expense			(8,633	)		—			(8,633	)		(84	)		84			(8,633	)
Impairment of investment in TerreStar Networks			—			—			—			(42,881	)		—			(42,881	)
Other income, net			(1,437	)		(167	)		(1,604	)		26			—			(1,578	)
Loss before provision for income taxes and minority interest			(29,525	)		626			(28,899	)		(48,207	)		—			(77,106	)
Benefit for income taxes			—			298			298			—			—			298
Minority interest			—			—			—			—			157			157
Net income (loss)		$	(29,525	)	$	924		$	(28,601	)	$	(48,207	)	$	157		$	(76,651	)

	Three months ended September 30, 2007 In Thousands
		MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Elimination			SkyTerra Consolidated
Revenues:
Services and related revenues		$	—		$	7,176	$	7,176		$	—		$	—		$	7,176
Equipment sales			—			1,669		1,669			—			—			1,669
Other revenues			—			264		264			—			—			264
Total revenues			—			9,109		9,109			—			—			9,109
Operating expenses:
Cost of equipment sold			—			1,331		1,331			—			—			1,331
Operations and cost of services (exclusive of depreciation and amortization)			2,186			3,959		6,145			—			—			6,145
Sales and marketing			1,267			882		2,149			—			—			2,149
Research and development (exclusive of depreciation and amortization)			2,841			—		2,841			—			—			2,841
General and administrative			3,519			1,950		5,469			1,727			—			7,196
Depreciation and amortization			7,156			637		7,793			—			—			7,793
Total operating expenses			16,969			8,759		25,728			1,727			—			27,455
Operating profit (loss)			(16,969	)		350		(16,619	)		(1,727	)		—			(18,346	)
Other income (expense):
Interest income			3,562			—		3,562			522			(32	)		4,052
Interest expense			(8,159	)		—		(8,159	)		(35	)		32			(8,162	)
Impairment of investment in TerreStar Networks			—			—		—			(22,520	)		—			(22,520	)
Other income, net			159			178		337			(1,204	)		—			(867	)
Loss before provision for income taxes and minority interest			(21,407	)		528		(20,879	)		(24,964	)		—			(45,843	)
Provision for income taxes			—			204		204			—			—			204
Minority interest			—			—		—			—			739			739
Net income (loss)		$	(21,407	)	$	732	$	(20,675	)	$	(24,964	)	$	739		$	(44,900	)

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	Nine months ended September 30, 2008 In Thousands
		MSV Next Generation			MSV MSS			Total MSV			SkyTerra Corporate			Elimination			SkyTerra Consolidated
Revenues:
Services and related revenues		$	—		$	21,892		$	21,892		$	—		$	—		$	21,892
Equipment sales			—			4,252			4,252			—			—			4,252
Other revenues			—			706			706			—			—			706
Total revenues			—			26,850			26,850			—			—			26,850
Operating expenses:
Cost of equipment sold			—			3,451			3,451			—			—			3,451
Operations and cost of services (exclusive of depreciation and amortization)			11,014			12,068			23,082			—			—			23,082
Sales and marketing			3,510			2,902			6,412			—			—			6,412
Research and development (exclusive of depreciation and amortization)			11,191			—			11,191			—			—			11,191
General and administrative			10,766			5,439			16,205			9,522			—			25,727
Depreciation and amortization			22,596			1,950			24,546			—			—			24,546
Total operating expenses			59,077			25,810			84,887			9,522			—			94,409
Operating profit (loss)			(59,077	)		1,040			(58,037	)		(9,522	)		—			(67,559	)
Other income (expense):
Interest income			5,944			—			5,944			480			(211	)		6,213
Interest expense			(29,980	)		—			(29,980	)		(211	)		211			(29,980	)
Impairment of investment in TerreStar Networks			—			—			—			(59,675	)		—			(59,675	)
Other income, net			(1,101	)		(144	)		(1,245	)		530			—			(715	)
Loss before provision for income taxes and minority interest			(84,214	)		896			(83,318	)		(68,398	)		—			(151,716	)
Benefit for income taxes			—			758			758			—			—			758
Minority interest			—			—			—			—			443			443
Net income (loss)		$	(84,214	)	$	1,654		$	(82,560	)	$	(68.398	)	$	443		$	(150,515	)

	Nine months ended September 30, 2007 In Thousands
		MSV Next Generation			MSV MSS		Total MSV			SkyTerra Corporate			Elimination			SkyTerra Consolidated
Revenues:
Services and related revenues		$	—		$	20,668	$	20,668		$	—		$	—		$	20,668
Equipment sales			—			3,952		3,952			—			—			3,952
Other revenues			—			761		761			—			—			761
Total revenues			—			25,381		25,381			—			—			25,381
Operating expenses:
Cost of equipment sold			—			3,204		3,204			—			—			3,204
Operations and cost of services (exclusive of depreciation and amortization)			5,715			11,734		17,449			—			—			17,449
Sales and marketing			2,735			2,500		5,235			—			—			5,235
Research and development (exclusive of depreciation and amortization)			7,048			—		7,048			—			—			7,048
General and administrative			10,436			5,423		15,859			5,799			—			21,658
Depreciation and amortization			19,915			1,813		21,728			—			—			21,728
Total operating expenses			45,849			24,674		70,523			5,799			—			76,322
Operating profit (loss)			(45,849	)		707		(45,142	)		(5,799	)		—			(50,941	)
Other income (expense):
Interest income			13,455			—		13,455			1,522			(93	)		14,884
Interest expense			(30,823	)		—		(30,823	)		(118	)		93			(30,848	)
Impairment of investment in TerreStar Networks			—			—		—			(22,520	)		—			(22,520	)
Other income, net			448			256		704			(1,202	)		—			(498	)
Loss before provision for income taxes and minority interest			(62,769	)		963		(61,806	)		(28,117	)		—			(89,923	)
Provision for income taxes			—			97		97			—			—			97
Minority interest			—			—		—			—			3,305			3,305
Net income (loss)		$	(62,769	)	$	1,060	$	(61,709	)	$	(28,117	)	$	3,305		$	(86,521	)

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Consolidated Results - Comparison of the three and nine months ended September 30, 2008 and 2007

Revenues and Cost of Equipment Sold

All revenues and cost of equipment sold are generated by the Company’s MSV MSS segment. See “MSV MSS - Comparison of the three and nine months ended September 30, 2008 and 2007”.

Operating Expenses

The table below sets forth the Company’s operating expenses (excluding cost of equipment sold) and percentage changes for the periods indicated (in thousands).

	Three months ended September 30,						Nine months ended September 30,
	2008		2007		% Change		2008		2007		% Change
Operations and cost of services (exclusive of depreciation and amortization)	$	9,474	$	6,145	54.2	%	$	23,082	$	17,449	32.3	%
Sales and marketing		1,668		2,149	(22.4	)%		6,412		5,235	22.5	%
Research and development (exclusive of depreciation and amortization)		3,937		2,841	38.6	%		11,191		7,048	58.8	%
General and administrative		9,833		7,196	36.6	%		25,727		21,658	18.8	%
Depreciation and amortization		8,268		7,793	6.1	%		24,546		21,728	13.0	%
Total operating expenses	$	33,180	$	26,124	27.0	%	$	90,958	$	73,118	24.4	%

Operations and Cost of Services

Operations and cost of services expenses include compensation costs of MSS operations employees and expenses related to the operation of the Company’s satellite network, new product engineering relating to next generation services, costs of telemetry, tracking, and control, and facility costs.

Operations and cost of services expenses increased during the three months ended September 30, 2008, as compared to the same period in 2007, with 85% of the increase due to costs associated with the engineering of chipsets for next generation network devices.

Operations and cost of services expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007, with 42% of the increase due to costs associated with the engineering of chipsets for next generation network devices, 27% of the increase due to increased staffing levels, resulting in higher employee related costs, and 13% of the increase due to increases in equity-based compensation primarily related to the February 2008 modifications to outstanding options.

Sales and Marketing

Sales and marketing expenses include the compensation of sales and marketing employees, and the cost of advertising, marketing and promotion.

Sales and marketing expenses decreased during the three months ended September 30, 2008, as compared to the same period in 2007 due primarily to decreased compensation costs and staffing.

Sales and marketing expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007, due to increased compensation costs in the first and second quarters of 2008, increases in equity-based compensation related to the February 2008 modifications to outstanding options, and costs related to the design of a prototype device (shell for purposes of look and feel design) for the next generation network. Those increases were offset by decreased compensation costs and staffing levels during the third quarter of 2008, and a reduction in consulting and professional fees related to market analysis costs incurred in the first quarter of 2007.

Research and Development

Research and development expenses include the compensation costs of employees working on next generation products and services, and other development costs of the next generation network. Research and development expenses increased during the three and nine months ended September 30, 2008, as compared to the same period in 2007, due primarily to increased third-party consulting expenses related to the development of operational and business support systems for the next generation network, and increased compensation costs and staffing levels.

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General and Administrative

General and administrative expenses include the compensation costs of finance, legal, human resources employees and other corporate costs.

General and administrative expenses increased during the three months ended September 30, 2008, as compared to the same period in 2007, due to professional and legal fees associated with the July 2008 HarbingerContribution and Support Agreement, offset by a $0.3 million reduction in equity-based compensation.

General and administrative expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007. The increase was primarily attributable to legal fees associated with the July 2008 HarbingerContribution and Support Agreement, and increased equity-based compensation increased due to the granting of restricted shares and options to certain executives and members of the Board of Directors, and the February 2008 modifications to outstanding options.

Depreciation and Amortization

Depreciation and amortization expenses consist of the depreciation of property and equipment and the amortization of intangible assets. Depreciation and amortization expenses increased during the three and nine months ended September 30, 2008, as compared to the same periods in 2007, due primarily to an increase in intangible assets resulting from the TerreStar Corporation Exchange Transactions that occurred in February and November 2007.

Other Income and Expenses

The following table sets forth other income and expenses for the periods indicated (in thousands):

	Three months ended September 30,								Nine months ended September 30,
	2008			2007			% Change		2008			2007			% Change
Interest income	$	1,265		$	4,052		(68.8	)%	$	6,213		$	14,884		(58.3	)%
Interest expense		(8,633	)		(8,162	)	5.8	%		(29,980	)		(30,848	)	(2.8	)%
Impairment of investment in TerreStar Networks		(42,881	)		(22,520	)	90.4	%		(59,675	)		(22,520	)	(165.0	)%
Other income		(1,578	)		(867	)	82.0	%		(715	)		(498	)	43.6	%
Benefit (provision) for income taxes		298			204		46.1	%		758			97		681.4	%
Minority interest		157			739		(78.8	)%		443			3,305		(86.6	)%
Total other expenses	$	(51,372	)	$	(26,554	)	93.5	%	$	(82,956	)	$	(35,580	)	(133.2	)%

Interest Income

Interest income is interest earned on cash, cash equivalents, restricted cash and short-term investments. Interest income decreased during the three and nine months ended September 30, 2008, as compared to the same periods in 2007 due to the decrease of cash, cash equivalents, and short-term investments, and a significant decrease in yields.

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Interest Expense

Interest expense is comprised of the amortization of the discount and debt issuance costs on Senior Secured Discount Notes, interest and amortization of the discount on the Senior Unsecured Notes, and interest incurred on Notes Payable - Vendor, offset by capitalized interest on the system under construction. Total and capitalized interest is as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Capitalized interest	$	19,961	$	9,677	$	52,541		$	20,972
Interest expense		8,633		8,162		29,980			30,848
Total interest	$	28,594	$	17,839	$	82,521		$	51,820

Interest expense increased during the three months ended September 30, 2008, as compared to the same period in 2007. Increased interest expense related to the Senior Unsecured Notes, Senior Secured Notes, and Notes Payable - Vendor of $6.9 million, $2.8 million, and $1.1 million, respectively, was offset by an increase in capitalized interest on the system under construction.

Total interest increased during the three months ended September 30, 2008, as compared to the same period in 2007, due to increased interest related to the Senior Unsecured Notes, Senior Secured Notes, and Notes Payable – Vendor of $6.9 million, $2.8 million, and $1.1 million, respectively.

Interest expense decreased during the nine months ended September 30, 2008, as compared to the same period in 2007. Increased interest expense related to the Senior Unsecured Notes, Senior Secured Notes, and Notes Payable – Vendor of $19.2 million, $8.1 million, and $3.4 million, respectively, was offset by an increase in capitalized interest on the system under construction.

Total interest increased during the nine months ended September 30, 2008, as compared to the same period in 2007, due to increased interest related to the Senior Unsecured Notes, Senior Secured Notes, and Notes Payable – Vendor of $19.2 million, $8.1 million, and $3.4 million, respectively.

Impairment of investment in TerreStar Networks

During the three and nine months ended September 30, 2008, the Company recorded a write-down of its investment in TerreStar Networks in the amount of $42.9 million and $59.7 million, respectively as the Company determined the TerreStar Networks investment had become other-than-temporarily impaired.

Benefit (Provision) for Income Taxes

The Company’s effective tax rate differs from the Federal statutory rate, due primarily to a full valuation allowance recorded against net operating losses generated in the periods presented.

Minority Interest

Minority interest represents the portion of MSV net losses attributable to minority interest holders. Minority interest decreased during the three and nine months ended September 30, 2008, as compared to the same periods in 2007 due to the Company’s acquisition of MSV interests resulting from the TerreStar Exchange Transactions that occurred in February and November 2007.

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Segment Results

MSV Next Generation - Comparison of the three and nine months ended September 30, 2008 and 2007

Operating Expenses

MSV Next Generation operations relate to the planning, development, and building of a next generation satellite system. The table below sets forth MSV Next Generation operating expenses and percentage change for the periods indicated (in thousands).

	Three months ended September 30,						Nine months ended September 30,
	2008		2007		% Change		2008		2007		% Change
Operations and cost of services (exclusive of depreciation and amortization)	$	5,392	$	2,186	146.7	%	$	11,014	$	5,715	92.7	%
Sales and marketing		812		1,267	(35.9	)%		3,510		2,735	28.3	%
Research and development (exclusive of depreciation and amortization)		3,937		2,841	38.6	%		11,191		7,048	58.8	%
General and administrative		3,007		3,519	(14.5	)%		10,766		10,436	3.2	%
Depreciation and amortization		7,610		7,156	6.3	%		22,596		19,915	13.5	%
Total operating expenses	$	20,758	$	16,969	22.3	%	$	59,077	$	45,849	28.9	%

Although many of the costs incurred are fixed in the short-term, other costs fluctuate based on underlying business or development activity. Operations expenses are dependent upon employee-related costs. Sales and marketing expenses are dependent on employee-related costs and the nature and extent of marketing and promotional activities. General and administrative expenses consist of employee-related and other costs related to corporate services, including finance, legal, and human resources.

Operations and Cost of Services

Operations and cost of services expenses include compensation costs of satellite operations employees related to activities to deploy a next generation satellite system, facility costs, and costs of new product and service development relating to next generation product offerings.

Operations expenses increased during the three months ended September 30, 2008, as compared to the same period in 2007, due to costs associated with the engineering of chipsets for next generation network devices.

Operations expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007, with 57% of the increase due to costs associated with the engineering of chipsets for next generation network devices, 21% of the increase due to increased staffing levels, 12% of the increase due to increases in equity-based compensation primarily related to the February 2008 modifications to outstanding options, and 10% related to engineering fees associated with software for the telemetry, tracking and control of the next generation satellites.

Sales and Marketing

Sales and marketing expenses include the compensation of sales and marketing employees, and the cost of advertising, marketing and promotion.

Sales and marketing expenses decreased during the three months ended September 30, 2008, as compared to the same period in 2007 due primarily to decreased compensation costs and staffing.

Sales and marketing expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007, due to increased compensation costs in the first and second quarters of 2008, increases in equity-based compensation related to the February 2008 modifications to outstanding options, and costs related to the mock-up of a prototype device (shell for purposes of look and feel design) for the next generation network. Those increases were offset by decreased compensation costs and staffing levels during the third quarter of 2008.

Research and Development

Research and development expenses include the compensation costs of employees working on next generation products and services, and other development costs of the next generation network. Research and development expenses increased during the three and nine months ended September 30, 2008, as compared to the same period in

38

2007, due primarily to increased third-party consulting expenses related to the development of operational and business support systems for the next generation network, and increased compensation costs and staffing levels.

General and Administrative

General and administrative expenses include the compensation costs of finance, legal, and human resources employees allocable to MSV Next Generation development.

General and administrative expenses decreased during the three months ended September 30, 2008, as compared to the same period in 2007, due primarily to a decrease in equity-based compensation as a result of reductions in the value of certain grants that are recorded at market value.

General and administrative expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007. Increases in legal and professional fees associated with the July 2008 HarbingerContribution and Support Agreement were partially offset by reductions in banking fees.

Depreciation and Amortization

Depreciation and amortization expenses consist of the depreciation of property and equipment and the amortization of intangible assets.

Depreciation and amortization expenses increased during the three and nine months ended September 30, 2008, as compared to the same periods in 2007, due primarily to an increase in intangible assets resulting from the TerreStar Corporation Exchange Transactions that occurred in February and November 2007.

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MSV MSS - Comparison of the three and nine months ended September 30, 2008 and 2007

MSV MSS relate to the provision of mobile satellite services that support the delivery of data, voice, fax and dispatch radio services using its existing in-orbit satellites.

Revenues

The following table sets forth MSV MSS revenues and percentage changes for the periods indicated (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2008		2007		% Change		2008		2007		% Change
Revenues
Capacity	$	3,008	$	3,096	(2.8	)%	$	9,400	$	9,169	2.5	%
Telephony		2,717		2,706	0.4	%		7,676		7,506	2.3	%
Data		921		733	25.6	%		2,720		2,084	30.5	%
Dispatch		706		641	10.1	%		2,096		1,909	9.8	%
Equipment		1,867		1,669	11.9	%		4,252		3,952	7.6	%
Other		231		264	(12.5	)%		706		761	(7.1	)%
Total revenues	$	9,450	$	9,109	3.7	%	$	26,850	$	25,381	5.8	%

Capacity

The Company provides bandwidth and power to certain customers who implement and operate their own networks. The specified bandwidth and power is generally customer dedicated once purchased and is not subject to other sale or preemption by MSV except for emergency purposes. Capacity customers generally operate under contractual arrangements ranging from short-term (month-to-month) to end of current satellite life in length. These contracts do not generally provide for annual increases or variable revenues. As such, capacity revenues for the three and nine months ended September 30, 2008, as compared to the same periods in 2007 have not fluctuated significantly.

Telephony

The Company provides voice service to end-users. Telephony customers are acquired through retail dealers or resellers. Retail dealers receive activation fees and earn commissions on monthly end user fixed access revenues and variable usage revenues. Resellers are under contractual arrangements for their purchase of monthly access and usage, and they manage the arrangements with the end user. Telephony customers are charged fixed monthly access fees and variable usage charges, generally charged by minute of usage, depending on voice plan chosen. A typical customer telephony plan requires monthly access fees that range from $25 to $175 that includes from zero to 2000 included airtime minutes. Each additional minute used is charged at a rate of $0.89 to $1.19. Monthly network access revenue is recognized in the month of service to the end-user. Variable usage revenue is recognized during the period of end-user usage. Activation fees are deferred and recognized ratably over the customer’s contractual service term, generally one year.

The following table sets forth telephony subscribers, quarterly subscriber changes, and average monthly revenue per subscriber unit (“ARPU”):

	Three and Nine months ended September 30,
	2008		ARPU		2007		ARPU		Change Subscribers		Change ARPU
Total subscribers, January 1	19,866				19,133				3.8	%
Additions	548				760				(27.9	)%
Deletions	(443	)			(444	)			(0.2	)%
Total subscribers, March 31	19,971		$	41.03	19,449		$	41.12	2.7	%	(0.2	)%
Additions	597				827				(27.8	)%
Deletions	(1,421	)			(711	)			99.9	%
Total subscribers, June 30	19,147		$	42.60	19,565		$	42.11	(2.1	)%	1.2	%
Additions	700				702				(0.3	)%
Deletions	(768	)			(605	)			26.9	%
Total subscribers, September 30	19,079		$	47.30	19,662		$	45.90	(3.0	)%	3.1	%

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Telephony revenues for the three months ended September 30, 2008, as compared to the same period in 2007, increased slightly due to an increase in ARPU.

Telephony revenues for the nine months ended September 30, 2008, as compared to the same period in 2007, increased slightly due to an increase in the average number of subscribers and ARPU.

Data

Data service provides transmission in an “always-on” fashion. Common applications for data customers include fleet and load management, credit card verification, e-mail, vehicle position reporting, mobile computing, and data message broadcasting. Customers are acquired through resellers. Resellers are under contractual arrangements for their purchase of monthly access and usage and manage the arrangements with the end user.

Data revenues for the three months ended September 30, 2008, as compared to the same period in 2007, increased due to an increase of 8.2% in the average number of subscribers and an increase of 15.9% in average monthly revenue per subscriber unit.

Data revenues for the nine months ended September 30, 2008, as compared to the same period in 2007, increased due to an increase of 9.9% in the average number of subscribers and an increase of 18.6% in average monthly revenue per subscriber unit.

Dispatch

Dispatch service provides the wide-area equivalent of “push-to-talk” two-way radio service among users in customer defined groups. Dispatch service facilitates team-based group operations and is highly suited for emergency communications. Customers are acquired through dealers and resellers. Resellers are under contractual arrangements for their purchase of monthly access from the Company, and manage the arrangements with the end user. Dispatch users pay a fixed monthly access fee for virtually unlimited monthly usage; however, the fee varies with the coverage available.

Dispatch revenues for the three and nine months ended September 30, 2008, as compared to the same periods in 2007 increased primarily due to an increase in the average number of subscribers.

Equipment

New and existing subscribers to the network can purchase a range of satellite handset configurations. Hardware generally includes handsets, antennas, and cables and can be purchased in “kits” that include all the hardware a customer would typically need to utilize the network. Resellers may purchase equipment in advance for purposes of resale to their end users. User equipment can be portable or be installed on trucks, ships, and airplanes or at a fixed location. Handsets are capable of standard voice and dispatch communication, and services such as call forwarding, call waiting, and conference calling. Other equipment is capable of file transfers, faxes and e-mail. Users must acquire equipment from the Company or its resellers to access its network. Capacity customers provide their own equipment to the end users of their networks.

The Company’s ability to generate equipment revenues is a function of the number of new and existing subscribers who purchase handsets and other accessories and the prices at which equipment is sold. Historically, equipment promotion and pricing has not been used to increase customer activations or improve retention.

Equipment sales during the three and nine months ended September 30, 2008, increased as compared to the same periods in 2007 due to increased sales of mobile terminals.

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Operating Expenses

The table below sets forth MSV MSS operating expenses and percentage changes for the periods indicated (in thousands).

	Three months ended September 30,						Nine months ended September 30,
	2008		2007		% Change		2008		2007		% Change
Cost of equipment sold	$	1,549	$	1,331	16.4	%	$	3,451	$	3,204	7.7	%
Operations and cost of services (exclusive of depreciation and amortization)		4,082		3,959	3.1	%		12,068		11,734	2.8	%
Sales and marketing		856		882	(2.9	)%		2,902		2,500	16.1	%
General and administrative		1,512		1,950	(22.5	)%		5,439		5,423	0.3	%
Depreciation and amortization		658		637	3.3	%		1,950		1,813	7.6	%
Total operating expenses	$	8,657	$	8,759	(1.2	)%	$	25,810	$	24,674	4.6	%

Although many of the costs incurred in the operation of the current network are fixed in the short-term, other costs will fluctuate based on underlying business activity. Operations expenses are dependent upon employee costs and the costs of monitoring the satellite, including telemetry, tracking, and control. Sales and marketing expenses are dependent on employee costs and the nature and extent of any marketing and promotional activities. General and administrative expenses consist of employee and other costs related to finance, legal, and human resources.

Cost of Equipment Sold

The cost of equipment sold is comprised of the cost of equipment purchased for resale. The Company does not manufacture any of its own equipment. Also included in cost of equipment sold are the costs of warehousing and warehousing services. Cost of equipment sold during the three and nine months ended September 30, 2008, as compared to the same periods in 2007 increased as a result of increased equipment sales.

Operations and Cost of Service

Operations and costs of service expenses include compensation costs of satellite operations employees, and other expenses related to the operation of the satellite wireless network, costs of telemetry, tracking, and control and facility costs. Operations and costs of service expenses during the three and nine months ended September 30, 2008, as compared to the same periods in 2007, did not fluctuate significantly.

Sales and Marketing

Sales and marketing costs include the compensation costs of sales and marketing employees, and the cost of advertising, marketing and promotion.

Sales and marketing expenses did not fluctuate significantly during the three months ended September 30, 2008, as compared to the same period in 2007.

Sales and marketing expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007, due primarily to increased compensation costs and increases in equity-based compensation related to the February 2008 modifications to outstanding options. Those increases were offset by a reduction in consulting and professional fees.

General and Administrative Expense

General and administrative expense includes the compensation costs of finance, legal, human resources and other corporate costs allocable to MSV MSS.

General and administrative expenses decreased during the three months ended September 30, 2008, as compared to the same period in 2007. Equity-based compensation declined primarily as a result of reductions in the value of certain grants that are recorded at market value. This reduction was offset by increased legal fees.

General and administrative expenses did not fluctuate significantly during the nine months ended September 30, 2008, as compared to the same period in 2007.

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Depreciation and Amortization Expense

Depreciation and amortization expense consists of the depreciation of property and equipment and the amortization of intangible assets. Depreciation and amortization expenses increased during the three and nine months ended September 30, 2008, as compared to the same periods in 2007, due primarily to the increase in intangible assets resulting from the TerreStar Corporation Exchange Transactions that occurred in February and November 2007.

43

SkyTerra Corporate - Comparison of the three and nine months ended September 30, 2008, and 2007

Operating Expenses

The table below sets forth SkyTerra Corporate operating expenses and percentage change for the periods indicated (in thousands).

	Three months ended September 30,						Nine months ended September 30,
	2008		2007		% Change		2008		2007		% Change
General and administrative	$	5,314	$	1,727	207.7	%	$	9,522	$	5,799	64.2	%

General and administrative expense includes the Company’s corporate costs, including legal, audit, tax, insurance, and compensation costs.

General and administrative expenses increased during the three months ended September 30, 2008, as compared to the same period in 2007. This increase was primarily attributable professional and legal fees associated with the July 2008 HarbingerContribution and Support Agreement. Equity-based compensation increased $0.5 million as a result of the issuance of stock options to certain members of the Board of Directors and the issuance of restricted stock to certain executives and members of the Board of Directors.

General and administrative expenses increased during the nine months ended September 30, 2008, as compared to the same period in 2007. The increase was primarily attributable to legal fees associated with the July 2008 HarbingerContribution and Support Agreement. Compensation costs increased $0.2 million and equity-based compensation costs increased $1.0 million as a result of the issuance of stock options to certain members of the Board of Directors and the issuance of restricted stock to certain executives and members of the Board of Directors.

Liquidity and Capital Resources

The Company’s principal sources of liquidity are cash, cash equivalents, short-term investments and accounts receivable. The Company’s primary cash needs are for working capital, capital expenditures and debt service. The Company’s ability to generate cash in the future is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control.

The Company has financed its operations to date through the private placement of debt and equity securities, and vendor financing. As of September 30, 2008, the Company has $149.4 million of cash and short-term investments. The outstanding discounted amount of MSV’s Senior Secured Discount Notes as of September 30, 2008 was $611.6 million ($750 million face amount at maturity). The outstanding discounted amount of MSV’s Senior Unsecured Notes as of September 30, 2008 was $134.3 million ($150 million face amount at maturity). Cash payment of interest on the Senior Secured Discount Notes will begin in April 2010, and cash payment of principal will be due in full in April 2013 (see “Senior Secured Discount Notes” below). The Senior Unsecured Notes bear interest at a rate of 16.5%, payable in cash or in-kind, at MSV’s option until December 15, 2011, and thereafter payable in cash (see “Senior Unsecured Notes” below).

The Company’s current operating assumptions and projections, which include the committed funding discussed below, and reflect management’s best estimate of future revenue, operating expenses, and capital commitments, indicate that the Company’s current sources of liquidity (including the Harbinger financing discussed below) should be sufficient to fund operations through the third quarter of 2010. The Company’s ability to meet its projections, however, is subject to uncertainties, and there can be no assurance that the Company’s current projections will be accurate. Additional funds will be needed to complete the construction of the next generation network and fund operations beginning in the fourth quarter of 2010. Although the Company secured committed financing in July 2008, pursuant to an agreement with Harbinger (described above under “Corporate Activity”), Harbinger may not be required to fund the committed financing under certain circumstances, including upon the occurrence of an event that could be deemed a material adverse change. Pursuant to the terms of the agreement with Harbinger, committed funding of $500 million through the sale of four tranches of 16% Senior Unsecured Notes in total is expected to occur on the following dates:

• $150 million – January 2009

• $175 million – April 2009

• $75 million – July 2009

• $100 million – January 2010

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The remaining cost of carrying out the Company’s business plan will be significant, and is significantly more than the Company’s currently available and committed resources. If the Company fails to obtain necessary financing on a timely basis, its satellite construction, launch, or other events necessary to conduct the Company’s business could be materially delayed, or its costs could materially increase; the Company could default on its commitments to its satellite construction or launch contractors, creditors or other third parties, leading to termination of construction or inability to launch the Company’s satellites; the Company may not be able to launch its next generation integrated network as planned and may have to discontinue operations or seek a purchaser for its satellite business or assets. MSV could lose its FCC or Industry Canada licenses or its international rights if it fails to achieve required performance milestones. The Company may not be able to continue as a going concern if it fails to obtain necessary financing on a timely basis.

The U.S. and worldwide financial markets have recently experienced unprecedented volatility, particularly in the financial services sector. No assurance can be given that Harbinger will satisfy its funding commitments to the Company in a timely manner, or at all. If Harbinger does not satisfy its funding commitments, the Company may be unable to find alternative financing sources, particularly in light of the current turmoil in the U.S. and worldwide financial markets, and may not be able to continue as a going concern.

The terms of the Company’s current indebtedness and the Securities Purchase Agreement include significant limitations on additional debt, including amount, terms, access to security, duration, among other factors, and impose limitations on the structure of strategic transactions. In addition, the Master Agreement with Harbinger prohibits, without the prior written consent of Harbinger, the Company’s issuance of common stock or securities to acquire the Company’s common stock in excess of five million shares, other than pursuant to the Company’s employee benefit plans, and the Company’s incurrence of indebtedness greater than $1.66 billion, excluding the 16% Senior Unsecured Notes and financing any debt with respect to the period after March 31, 2010.

In addition to the contractual limitations described above, there currently is little trading in shares of the Company’s common stock, which limits its ability to raise funding through public equity issuances. The recent turmoil in global credit markets and the weakening global economy could negatively impact the Company’s ability to access the capital markets and fund its operations if Harbinger does not satisfy its funding commitments. Furthermore, the Company may not be able to sell its 11.1% ownership stake in TerreStar Networks.

Capital Required for Next Generation Network

The Company estimates the remaining cost to develop and construct the satellite component of its next generation network, including the costs of the two satellites, their launch, launch insurance, and associated ground segment will be significant. The majority of these expenditures are governed by contractual commitments.

The Company will require significant additional funds to construct a terrestrial component of the network. The Company estimates the deployment of the terrestrial portion of the network could be a multi-billion dollar undertaking depending on the implementation of air interface technology, the number of markets deployed, the scope of the terrestrial build within each market and the service offering. Significant additional funding will be required to fund operations after the launch of the satellites.

The cost of building and deploying the satellites and terrestrial components of the next generation network could exceed current estimates. For example, if the Company elects to further defer payments under the satellite construction contract, modify design, and/or exercise certain options to buy additional satellites or other equipment or services, the costs for the satellite component of the network will increase, possibly significantly. The cost to develop devices could be greater, perhaps significantly, than current estimates, depending on the ability to attract distribution partners for both the satellite and terrestrial services. In addition, the magnitude of the terrestrial network capital requirement depends upon a number of factors including: choice of wireless technology; desired applications; the general pace of construction; and in the profits, or losses in the initially deployed markets. The Company may not have control over these factors as it works with various strategic and distribution partners who may have varying degrees of influence on these decisions in exchange for capital contributions and other commitments. In all scenarios, the Company will require significant additional capital beyond its current resources.

Other Significant Contractual Obligations

In May 2007, MSV entered into fixed price contracts with ILS International Launch Services, Inc. and Sea Launch Company, LLC to launch the next generation satellites. . The launch window for MSV-1 is expected to open in the fourth quarter of 2009, and continue through the first quarter of 2010.  The launch of MSV-1 is currently

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expected to occur in the first quarter of 2010.  The launch of MSV-2 is currently expected to occur in the second half of 2010. The aggregate base cost for these services is $174.8 million. If MSV were to terminate the contracts after March 2009 it would not be obligated to make additional payments, and would receive back only a portion of its previously made payments.

In October 2006, MSV entered into an agreement with Hughes Network Systems, LLC (HNS), then a related party of the Apollo stockholders, and currently a related party of Harbinger, to purchase four base transceiver subsystems and air interface technology based on GMR-3G technology for a fixed price of $43.0 million. The transceiver subsystems will integrate the satellite component of the next generation network.

In March 2008, MSV entered into an agreement with Telesat Canada for joint operational services for the MSV-1 and MSV-2 satellites including the development of software for operation and control, and the provision of telemetry, tracking and control services once in designated orbital positions.  Telesat Canada will provide these services through 2025 assuming the satellites reach full mission life. MSV is entitled to delay the start of services due to certain launch delays without any impact to pricing. The Company has a contract with Telesat Canada for the provision of telemetry, tracking and control services to the Company for its existing satellites. Future minimum payments related to these agreements, reflected in the table below as satellite operational services, assume MSV-1 and MSV-2 reach their full mission life.

In September 2008, MSV, entered into a fifteen-year agreement with Qualcomm Incorporated (Qualcomm) for the provision by Qualcomm of satellite enabled mobile chipsets and satellite base station components built upon Qualcomm-adapted EV-DO technology to facilitate the development of L-band and S-band mobile devices and network systems. A broad range of Qualcomm chipsets, to be available on a mass-market basis, will include satellite and L-band capabilities. The Agreement contemplates that from September 12, 2008, through November 15, 2008, MSV and Qualcomm shall complete the detailed specifications and approach for the technology development (the “R&S Period”). MSV has the right to terminate the Agreement at any time during the R&S Period without any further obligations.

The agreement with Qualcomm also contemplates that other operators (together with MSV, each an Operator) may enter into similar arrangements with Qualcomm. The termination by one Operator of its agreement with Qualcomm does not affect the agreement of any other Operator. The Company has been advised that ICO Satellite Services G.P. (ICO) has entered into a similar agreement with Qualcomm. Each Operator will fund a portion of the related non-recurring expenses (NRE) incurred in connection with the Agreements, which will result in a further sharing of NRE if and when additional Operators enter into similar agreements with Qualcomm.

The MSV portion of the NRE to be paid to Qualcomm is expected to be in an amount not to exceed $10 million, which amount will be reduced if other Operators enter into similar agreements with Qualcomm.

Vendor Financing

MSV has financed $60.9 million of satellite vendor payments with secured vendor notes payable (Notes Payable - Vendor) that bear interest of LIBOR plus 400 basis points combined with a 2% administrative fee. The Notes Payable - Vendor are secured by the satellites under construction.

On July 3, 2008, MSV entered into an agreement with Boeing to amend its existing contract with respect to its satellite system procurement. The amendment provides MSV with an additional $40 million of construction payment deferrals on the second satellite under the contract, with an interest rate of LIBOR plus 400 basis points. The original construction payment deferral was in the amount of $76 million. The amendment provides that the original deferrals and the additional deferrals associated with the construction payments will be due and payable upon the earlier of December 20, 2010 or ten days prior to shipment of the MSV-2 satellite, currently planned for the second half of 2010. Prior to the amendment, MSV was to have begun repayment of the original $76 million construction deferrals within one month of reaching the maximum available deferrals, previously estimated to occur in the fourth quarter of 2008, with final payment in the first quarter of 2010.

In exchange for the additional deferrals and deferral extension date, SkyTerra issued Boeing warrants exercisable for 626,002 shares of SkyTerra voting common stock with an exercise price of $10 per share, subject to certain anti-dilution adjustments, with an exercise period of 10 years, vesting on a proportional basis consistent with the drawdown against the additional deferral amounts. In addition, the delivery date for the MSV-2 satellite was extended by four months, to July 11, 2010, which is within the regulatory license milestone requirements. Finally, MSV agreed that in the event any liquidated damages would be due and payable by Boeing for late delivery of either satellite system, $19 million of any such liquidated damages that would have been earned back by Boeing over a

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more extended period, would be accelerated and able to be earned back by Boeing over a period of two and one-half years.

Senior Secured Discount Notes

In March 2006, MSV issued Senior Secured Discount Notes that generated proceeds of $436.2 million, with an aggregate principal amount of $750 million due at maturity. Interest on the notes accretes from the issue date at an annual rate of 14.0%, until they reach full principal amount at April 1, 2010 (the Senior Secured Discount Notes). All of MSV’s domestic subsidiaries jointly and severally guarantee the Senior Secured Discount Notes. MSV will be required to accrue and pay cash interest on the notes for all periods after April 1, 2010 at an annual rate of 14.0%, and cash interest payments will be payable in arrears semiannually on April 1 and October 1, commencing on October 1, 2010. The Senior Secured Discount Notes will mature on April 1, 2013. The Senior Secured Discount Notes are secured by substantially all of MSV’s assets.

The terms of the Senior Secured Discount Notes require MSV to comply with certain covenants that restrict some of MSV’s corporate activities, including MSV’s ability to incur additional debt, pay dividends, create liens, make investments, sell assets, make capital expenditures, repurchase equity or subordinated debt, and engage in specified transactions with affiliates. MSV may incur indebtedness beyond the specific baskets allowed under the Senior Secured Discount Notes, provided MSV maintains a leverage ratio (as defined) of 6 to 1. Noncompliance with any of the covenants without cure or waiver would constitute an event of default under the Senior Secured Discount Notes. An event of default resulting from a breach of a covenant may result, at the option of the note holders, in an acceleration of the principal and interest outstanding. The Senior Secured Discount Notes also contain other customary events of default (subject to specified grace periods), including defaults based on events of bankruptcy and insolvency, and nonpayment of principal, interest or fees when due. MSV was in compliance with the covenants of the Senior Secured Discount Notes as of September 30, 2008.

Senior Unsecured Notes

On January 7, 2008, Harbinger Capital Partners Master Fund I, Ltd., and Harbinger Capital Partners Special Situations Fund L.P. (together Harbinger), purchased $150 million of MSV’s Senior Unsecured Notes due 2013 (the “Senior Unsecured Notes”) and ten year warrants to purchase 9.1 million shares of the Company’s common stock, with an exercise price of $10 per share. The Senior Unsecured Notes bear interest at a rate of 16.5%, payable in cash or in-kind, at MSV’s option until December 15, 2011, and thereafter payable in cash. The Senior Unsecured Notes mature on May 1, 2013.

In June 2008, the Company made its scheduled interest payment on the Senior Unsecured Notes through the issuance of $10.9 million of additional Senior Unsecured Notes, which are included in the balance of Senior Unsecured Notes in the accompanying balance sheet as of September 30, 2008.

The Senior Unsecured Notes have subsidiary guarantees and covenants similar to those contained in the Senior Secured Discount Notes, with such modifications as appropriate to reflect the financial terms of the Senior Unsecured Notes. The Securities Purchase Agreement governing the Senior Unsecured Notes also contains more restrictive covenants regarding mergers, consolidation and transfer of assets and restricted payments. The more restrictive covenants, the right of first negotiation and the pre-emptive rights expire once Harbinger and their affiliates beneficially own less than 5% of the outstanding common stock of the Company or, if earlier, on December 31, 2011. The terms of the Senior Unsecured Notes require MSV to comply with certain covenants that restrict some of MSV’s corporate activities, including MSV’s ability to incur additional debt, pay dividends, create liens, make investments, sell assets, make capital expenditures, repurchase equity or subordinated debt, and engage in specified transactions with affiliates. Noncompliance with any of the covenants without cure or waiver would constitute an event of default under the Senior Unsecured Notes. An event of default resulting from a breach of a covenant may result, at the option of the note holders, in an acceleration of the principal and interest outstanding. The Senior Unsecured Notes also contain other customary events of default (subject to specified grace periods), including defaults based on events of bankruptcy and insolvency, and nonpayment of principal, interest or fees when due. MSV was in compliance with the covenants of the Senior Unsecured Notes as of September 30, 2008.

Inmarsat Cooperation Agreement

In December 2007, to further organize large blocks of contiguous spectrum for the use of MSV, SkyTerra, MSV and MSV Canada (together the MSV Parties) and Inmarsat Global Limited (Inmarsat) entered into a Cooperation Agreement relating to the use of L-band spectrum for mobile satellite and ATC services in North America. The Cooperation Agreement addresses a number of regulatory, technology and spectrum coordination matters involving L-band spectrum.

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Upon receipt of an investment of $100 million in MSV by a third party for general corporate purposes and election by the MSV Parties to trigger certain provisions, the MSV Parties will be able to expand its trials and deployments to a broadband ATC trial using wider spectrum bandwidths, on a specific designation of combined Inmarsat and MSV spectrum in a pre-agreed market. Simultaneously upon the election by the MSV Parties regarding such an investment, the Company is required to issue to Inmarsat $31.3 million of the Company’s common stock, valued in accordance with terms of the agreement.

Upon the occurrence of certain events, until September 1, 2011, the MSV Parties have the option (the Phase 1 Option), subject to certain conditions, to effect a transition to a modified band plan within an 18 to 30 month period. Such transition will include modification of certain of Inmarsat’s network and end user devises and a shift in frequencies between the MSV Parties and Inmarsat which would lead to additional spectrum contiguity and more relaxed operating rules for the Company. Over the transition period, the MSV Parties will be required to make payments to Inmarsat of $250 million in cash. Upon the commencement of Phase 1, the Company will issue to Inmarsat a number of shares of the Company’s common stock having a value of $31.3 million, valued in accordance with terms of the agreement. In accordance with the terms of the agreement, Inmarsat and the MSV Parties are in discussions as to whether the closing of the Senior Unsecured Notes will be designated by the MSV Parties as a triggering investment and, if so, what the valuation of the Company’s common stock would be in connection with the required stock issuance. Upon the completion of the transition of the spectrum in Phase 1, the Company will issue to Inmarsat a number of shares of the Company’s common stock having a value of $56.3 million based on the average closing price of the Company’s common stock for the prior forty five (45)-trading day period. The MSV Parties have the option to accelerate the transition timing by accelerating payment to Inmarsat of $50 million that would be credited towards the $250 million in cash payments.

Subsequent to the exercise of the Phase 1 Option, between January 1, 2010 and January 1, 2013, the MSV Parties have the option (the Phase 2 Option) for Inmarsat to modify its North American operations in a manner that will make additional spectrum available to MSV at a cost of $115 million per year, resulting in substantially more spectrum to the benefit of MSV Parties. If the Company does not exercise the Phase 2 Option, then between January 1, 2013 and January 1, 2015, Inmarsat would have the option to require the MSV Parties to exercise the Phase 2 Option on the same terms.

Future Financing Needs

The Company will need significant additional financing in the future. This additional financing may take the form of the issuance of bonds or other types of debt securities, the issuance of equity securities, loans under a credit facility or a combination of the foregoing. Debt or additional equity financing may not be available when needed, on favorable terms, or at all. Any debt financing the Company obtains may impose various restrictions and covenants on the Company which could limit its ability to respond to market conditions, provide for unanticipated capital investments or take advantage of business opportunities. The Company may also be subject to significant interest expense under the terms of any debt the Company incurs.

The Company continues dialogue with other MSS operators who operate systems in adjacent spectrum in the L-band with the objective of rearranging respective spectrum assignments to create contiguous blocks of spectrum, and in some instances enabling MSV to access additional spectrum for the benefit of MSV and its strategic partners. The consummation of agreements of this nature could result in significant time, effort and cost. The likelihood or timing of reaching such agreements is uncertain.

Off-balance Sheet Financing

The Company did not enter into any off-balance sheet financing arrangements, other than operating leases in the normal course of business, during the three and nine months ended September 30, 2008. As of September 30, 2008, the Company does not have any off-balance sheet financing arrangements that had or were reasonably likely to have a current or future impact on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

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Future Minimum Commitments

The Company leases office space, computers and other equipment under operating lease agreements. In addition to base rent, the Company is responsible for certain taxes, utilities and maintenance costs, and several leases include options for renewal or purchase. The Company’s various non-cancelable vendor arrangements (including satellite, launch vehicle, base transceiver subsystems and air interface technology construction), long-term and other debt arrangements, non-cancelable operating leases and agreements with initial terms of greater than one year are as follows as of September 30, 2008 for the years ending December 31 (in thousands):

	Leases		Boeing (a)		HNS		Launch Services		Satellite Operational Services		Debt		Other		Total
2008	$	628	$	6,426	$	4,398	$	13,535	$	809	$	8,080	$	4,528	$	38,404
2009		2,008		86,411		10,946		98,316		2,884		34,844		4,206		239,615
2010		2,194		75,348		—		38,589		1,884		153,080		300		271,395
2011		615		—		—		—		1,434		146,380		158		148,587
2012		336		—		—		—		1,434		151,251		158		153,179
Thereafter		4,661		—		—		—		17,447		986,722		1,895		1,010,725
	$	10,442	$	168,185	$	15,344	$	150,440	$	25,892	$	1,480,357	$	11,245	$	1,861,905

(a) Amounts exclude in-orbit incentives and associated interest. The amounts also exclude payments to Boeing under vendor notes payable, as such amounts are included in the future payments related to debt.

Cash Flow

Net Cash Used in Operating Activities. During the nine months ended September 30, 2008, as compared to the same period in 2007, net cash used in operating activities increased $22.4 million primarily due to increases in personnel, staffing and related costs, and increased expenses to develop the next generation network.

Net Cash Used in Investing Activities. During the nine months ended September 30, 2008, as compared to the same period in 2007, net cash used in investing increased due to sales and maturities of investments, and the payment of estimated taxes related to TMI Delaware in 2008, and an increase in the purchase of property and equipment.

Net Cash Provided by Financing Activities. During the nine months ended September 30, 2008, as compared to the same period in 2007, net cash provided by financing activities increased primarily as a result of proceeds from the issuance of the Senior Unsecured Notes of $150 million in 2008.

Related Parties

Prior to their spin-off in October by BCE (which holds a significant interest in the Company), Telesat and Infosat Communications were related parties through common ownership by BCE. Through common ownership by the Apollo Stockholders, the Company’s related parties also included HNS and Hughes Telematics, Inc. In April 2008, Harbinger acquired substantially all of Apollo’s interests in the Company.

Through common ownership by Harbinger, the Company’s related parties include Inmarsat, TerreStar Corporation, TerreStar Networks and HNS. The Company’s related parties also include LCC International Inc., which is controlled by a former limited partner and former member of MSV GP’s Board of Directors. Certain of MSV’s intellectual property was acquired by assignment from entities controlled by such former limited partner.

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In certain circumstances where the Company generates royalties from licensing its ATC intellectual property to third parties, the Company may be required to share a portion of such royalty payments with such former limited partner and related entities. The following tables summarize related party transactions (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2008		2007		2008		2007
Income, including management fees	$	163	$	670	$	499		$	1,804
Expenses		75		598		1,085			2,550
Costs related to system under construction		4,430		4,300		15,344			8,599

	As of September 30, 2008		As of December 31, 2007
Due from related parties	$	183	$	617
Due to related parties		1,817		247

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Item3.Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Rate Risk

The United States dollar is the functional currency for the Company’s consolidated financials. The functional currency of the Company’s Canadian subsidiary and two Canadian joint ventures is the Canadian dollar. The financial statements of these entities are translated to United States dollars using period end rates for assets and liabilities, and the weighted average rate for the period for all expenses and revenues. During the normal course of business, the Company is exposed to market risks associated with fluctuations in foreign currency exchange rates, primarily the Canadian dollar and the Euro. To reduce the impact of these risks on the Company’s earnings and to increase the predictability of cash flows, the Company uses natural offsets in receipts and disbursements within the applicable currency as the primary means of reducing the risk. When natural offsets are not sufficient, from time to time, the Company enters into certain derivative contracts to buy and sell foreign currencies.

The Company’s foreign currency management policy prohibits speculative trading and allows for derivative contracts to be entered into only when a future foreign currency requirement is identified. These contracts generally have durations of less than one year. The Company accounts for derivatives in accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended, which requires the recognition of all derivatives as either assets or liabilities measured at fair value with changes in fair value of derivatives reflected as current period income or loss unless the derivatives qualify as hedges of future cash flows. The Company has not elected hedge accounting for any derivative contracts during the nine month period ended September 30, 2008 and 2007, or at any other time over the past two years. As of September 30, 2008, the Company held contracts of $2.2 million. The Company recognized a loss of $0.1 million during the three and nine months ended September 30, 2008 related to such contracts.

Interest Rate Risk

Changes in interest rates affect the fair value of the Company’s fixed rate debt. The fair value of the Senior Secured Discount Notes at September 30, 2008 was $412.5 million. The fair value of the Senior Unsecured Notes at September 30, 2008 was $110.6 million. Based on securities outstanding at September 30, 2008, a 1% increase or decrease in interest rates, assuming similar terms and similar assessment of risk by the Company’s lenders, would change the estimated market value, of these securities, by $18.1 million and $18.9 million, respectively at September 30, 2008. The Company does not have cash flow exposure to changing interest rates on its Senior Secured Discount Notes or Senior Unsecured Notes because the interest rates for those securities are fixed. This sensitivity analysis provides only a limited, point-in-time view of the market risk sensitivity of certain of the Company’s financial instruments. The actual impact of future changes in market interest rates on Senior Secured Discount Notes and Senior Unsecured Notes may differ significantly from the impact shown in this analysis.

The Company has cash flow exposure to changing interest rates on its Vendor Notes because the interest rate for these securities is not fixed. As of September 30, 2008 the Company had $60.9 million outstanding under its Vendor Notes with interest rates tied to changes in the LIBOR rate. Based on balances outstanding at September 30, 2008, a 1% increase in interest rates, assuming repayment of the Vendor Note in accordance with scheduled maturities, could add $0.9 million to the Company’s annual interest payments.

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Item4. Controls and Procedures

(a) Disclosure Controls and Procedures. The Company’s management, with the participation of the Company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the Company’s chief executive officer and chief financial officer have concluded that, as of the end of such period, the Company’s disclosure controls and procedures are effective in recording, processing, summarizing and reporting, on a timely basis, information required to be disclosed by us in the reports that the Company files or submit under the Exchange Act.

(b) Changes in Internal Control Over Financial Reporting. There have not been any changes in the Company’s internal control over financial reporting during the three-month period ended September 30, 2008 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

 

Item1. Legal Proceedings

The Company is involved in various legal proceedings arising in the normal course of business. Although the outcomes of legal proceedings are inherently difficult to predict, the Company does not expect the resolution of any currently pending matters to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Item1A. Risk Factors

The following risk factors should be read in conjunction with the risk factors in our annual report on Form 10-K for the year ended December 31, 2007.

Failure to comply with FCC and Industry Canada rules and regulations could damage our business.

FCC and Industry Canada rules and regulations, and the terms of our satellite authorizations and ATC license from the FCC, require us to meet certain conditions, such as satellite construction and launch milestones, maintenance of satellite coverage of all fifty states, Puerto Rico, and the United States Virgin Islands and the provision of an integrated service offering. Non-compliance by us with these or other conditions, including other FCC or Industry Canada gating criteria, could result in fines, additional license conditions, license revocation, or other adverse FCC or Industry Canada actions.

In a September 2006 decision, the FCC granted MSV authority to slightly exceed the 25% indirect foreign ownership limit specified in the Communications Act. To comply with the amount of indirect foreign ownership approved by the FCC, we must monitor the extent to which our stock is owned or voted by non-U.S. citizens. The foreign ownership restrictions limit our ability to be owned by non-U.S. citizens absent prior FCC approval. Exceeding the amount of foreign ownership approved by the FCC in the September 2006 decision without securing prior approval from the FCC may subject MSV to fines, forfeitures, or revocation of our FCC licenses. In March 2007, we filed a Petition for Declaratory Ruling with the FCC seeking approval for MSV’s level of indirect foreign ownership. In October 2007, we provided additional information in response to the FCC’s request for further ownership information regarding certain investors. On November 6 and 26, 2007, we amended that filing. On January 25 and 29, 2008, we further amended our filing to provide updated ownership information and to respond to informal staff requests. On January 11, 2008, Harbinger tendered a petition to the FCC seeking expedited action on a declaratory ruling to permit Harbinger to raise their interest in the Company through open market share acquisitions to a level in excess of that previously approved by the FCC. That petition was amended on January 16, 2008, and MSV and the Company joined in the petition in a further amendment submitted on January 17, 2008. On January 29, 2008, Harbinger tendered to the FCC a petition seeking permanent authority to make the level of acquisitions specified in their January 11 petition. On March 7, 2008, the FCC issued an order granting the March 2007 and January 11, 2008 petitions. The grant of those petitions was without prejudice to any enforcement action by the FCC for the Company’s possible non-compliance with the foreign ownership rules prior to the grant. The FCC did not act on Harbinger’s January 29, 2008 request for permanent authority. We cannot predict when the FCC will do so or whether it will grant the request. There is also no assurance that foreign persons or entities have not acquired or will not acquire additional shares in the Company that may result in our exceeding the level of foreign ownership approved by the FCC.

If we fail to obtain additional financing necessary to develop and construct our next generation integrated network on a timely basis, or if our current financing sources do not provide the Company with previously committed funding and we are unable to obtain alternative financing, we may not be able to continue as a going concern.

The remaining cost of carrying out our business plan will be significant, and is significantly more than our currently available and committed resources. Our cost could be greater than our current estimates. For example, if we elect to defer payments under our satellite construction contract, and/or if we exercise certain options to buy additional satellites or other equipment or services, our costs for the satellite component of our network will increase, possibly significantly. The cost to develop devices could be greater, perhaps significantly, than our current estimates, depending on our ability to attract distribution partners in both the satellite and terrestrial spaces.

In addition, we will require significant funds to construct the terrestrial component of our integrated network. We plan to pursue, with a partner, a top 50 market terrestrial footprint and have estimated that the total deployment of the terrestrial portion of our network could be a multi-billion dollar undertaking depending on the implementation of air interface technology, the scope of the terrestrial build within each market and the targeted service offering (limited mobile, portable or fully mobile). The cost to build the terrestrial component of the network could be

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greater, perhaps significantly, than our current estimates, depending on changing costs of supplies, market conditions, and other factors over which we will have no control.

Our projections assume that a portion of the remaining costs associated with constructing the satellite and terrestrial components of our next generation integrated network will be borne in part by one or more technology and strategic partners. If we are not able to enter into agreements with third parties to cover such costs, or if such funding sources are not able to cover such costs, our funding requirements will be significantly greater than we currently anticipate. We have not entered into any such agreements, and entering into such agreements in the future is not assured.

In addition, a delay in the implementation of a satellite air interface technology could result in a reduction in our near-term revenue projections, which would increase our overall financing need. Likewise, implementation of an air interface technology that is not consistent with the strategic plans of potential telecommunications partners could adversely affect our ability to attract strategic capital and partnerships.

Pursuant to the Securities Purchase Agreement, Harbinger agreed to purchase up to $500 million in aggregate principal amount of the 16% Senior Unsecured Notes to fund the Company’s business plan through the third quarter of 2010. The 16% Senior Unsecured Notes will be issued to Harbinger in four tranches of $150.0 million, $175.0 million, $75.0 million and $100.0 million on January 6, 2009, April 1, 2009, July 1, 2009, and January 4, 2010, respectively. Under the Securities Purchase Agreement, we are required to satisfy certain conditions to funding prior to each funding date, including material compliance with our covenants under the Master Agreement, the absence of a material adverse effect (as defined in the Securities Purchase Agreement) and the accuracy of the representations and warranties made by us in the Securities Purchase Agreement. If we fail to satisfy any condition to funding, Harbinger will not be obligated to purchase the 16% Senior Unsecured Notes.

The U.S. and worldwide financial markets have recently experienced unprecedented volatility, particularly in the financial services sector. No assurance can be given that Harbinger will satisfy its obligations under the Securities Purchase Agreement and purchase the 16% Senior Unsecured Notes in a timely manner, or at all. If Harbinger does not satisfy its obligations to purchase the 16% Senior Unsecured Notes, we may be unable to find alternative financing sources, particularly in light of the current turmoil in the U.S. and worldwide financial markets.

The terms of our current indebtedness and the Securities Purchase Agreement include significant limitations on additional debt, including amount, terms, access to security, duration, among other factors, and impose limitations on the structure of strategic transactions. In addition, the Master Agreement prohibits, without the prior written consent of Harbinger, our issuance of Common Stock or securities to acquire our Common Stock in excess of five million shares, other than pursuant to our employee benefit plans, and our incurrence of indebtedness greater than $1.66 billion, excluding the 16% Senior Unsecured Notes and financing any debt with respect to the period after March 31, 2010.

In addition to the contractual limitations described above, there currently is little trading in shares of our common stock, which limits our ability to raise funding through public equity issuances. The recent turmoil in global credit markets and the weakening global economy could negatively impact our ability to access the capital markets and fund our operations if Harbinger does not purchase the 16% Senior Unsecured Notes. Furthermore, our ability to sell our 11.1% ownership stake in TerreStar Networks Inc., which represents a potential source of capital, on favorable terms, or at all, is not assured given recent capital market volatility and the overall decline in the stock price of its parent, TerreStar Corporation.

If we fail to obtain necessary additional financing on a timely basis, or if our current financing sources do not provide the Company with previously committed funding, our satellite construction, launch, or other events necessary to conduct our business could be materially delayed, or our costs could materially increase; we could default on our commitments to our satellite construction or launch contractors, creditors or other third parties, leading to termination of construction or inability to launch our satellites; we may not be able to launch our next generation integrated network as planned and may have to discontinue operations or seek a purchaser for our satellite business or assets. MSV could lose its FCC or Industry Canada licenses or its international rights if it fails to achieve required performance milestones. We may not be able to continue as a going concern if we fail to receive previously committed funding and we are unable to obtain alternative financing or if we fail to obtain additional necessary financing on a timely basis.

54

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 investors.

As of October 30, 2008, Harbinger and its affiliates collectively owned an aggregate of 23,452,480 shares of our Voting Common Stock, representing approximately 48.8% of our outstanding Voting Common Stock. In addition, as of October 30, 2008, Harbinger had the right to acquire (i) an additional 442,825 shares of Voting Common Stock, which shares are being held in escrow pursuant to the terms of Harbinger’s agreement with Apollo Investment Fund IV, L.P., Apollo Overseas Partners IV, L.P., AIF IV/RRRR LLC, AP/RM Acquisition LLC and ST/RRRR LLC, and (ii) an aggregate of approximately 12.5 million shares of Voting Common Stock upon exercise of warrants. Harbinger and its affiliates also beneficially own an aggregate of 29,946,362 shares of our Non-Voting Common Stock, representing approximately 49.9% of our outstanding Non-Voting Common Stock. Pursuant to the Master Agreement, Harbinger may acquire a significant number of shares of our common stock if our combination with Inmarsat is successful in order to fund such combination, or if the combination is not successful, pursuant to a shareholder rights offering. In addition, Motient Ventures Holdings, Inc. sold an aggregate of 7,906,737 shares of our Non-Voting Common Stock to Harbinger on September 12, 2008 and September 16, 2008, which are being held by a collateral agent pursuant to a pledge agreement pending the grant by the FCC of Harbinger’s pending application to acquire control of the Company. As of October 30, 2008, the shares held by the collateral agent represented 13.2% of the outstanding shares of our Non-Voting Common Stock.

The significant concentration of ownership of our common stock by Harbinger and its affiliates may adversely affect the trading price of our common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. Harbinger and its affiliates have the ability to exert substantial influence over all matters requiring approval by our stockholders, including the election and removal of directors, amendment of our certificate of incorporation, and any proposed merger, consolidation or sale of all or substantially all of our assets. If the proposed business combination of SkyTerra and Inmarsat is completed, it is expected that Harbinger would own an excess of 85% of the outstanding Voting Common Stock of the combined entity. In light of the foregoing, Harbinger can significantly influence the management of our business and affairs. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to investors. There can be no assurance that the interests of Harbinger are aligned with other holders of our common stock.

 

Item2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item3. Defaults Upon Senior Securities.

None.

 

Item4. Submission of Matters to a Vote of Security Holders.

None.

 

Item5. Other Information.

Aaron Stone resigned from the Board of Directors of the Company, effective as of November 8, 2008. Mr. Stone is departing in light of his other professional responsibilities.

55

 

Item6. Exhibits.

10.1	Master Contribution and Support Agreement, dated July 24, 2008, by and among Harbinger Capital Partners Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., Harbinger Capital Partners Fund I, L.P., Harbinger Co-Investment Fund, L.P., SkyTerra Communications, Inc., Mobile Satellite Ventures Subsidiary LLC, and Mobile Satellite Ventures L.P. (incorporated by reference to Exhibit 10.1 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.2	Stock Purchase Agreement, dated July 24, 2008, between SkyTerra Communications, Inc. and Harbinger Co-Investment Fund, L.P. (incorporated by reference to Exhibit 10.2 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.3	Securities Purchase Agreement, dated July 24, 2008, by and among Mobile Satellite Ventures LP, Mobile Satellite Ventures Finance Co., SkyTerra Communications, Inc., Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. (incorporated by reference to Exhibit 10.3 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.4	Form of Indenture (incorporated by reference to Exhibit 10.4 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.5	Form of Warrants (incorporated by reference to Exhibit 10.5 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.6	Registration Rights Agreement, dated July 24, 2008, by and among SkyTerra Communications, Inc., Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P. and Harbinger Capital Partners Fund I, L.P. (incorporated by reference to Exhibit 10.6 to SkyTerra's Current Report on Form 8-K filed on July 25, 2008).
10.7	Executive Severance Agreement between SkyTerra Communications, Inc. and Randy Segal (incorporated by reference to Exhibit 10.10 to SkyTerra’s Quarterly Report on Form 10-Q filed on August 5, 2008).
10.8	Amendment No. 1 to the 2006 SkyTerra Communications, Inc. Equity and Incentive Plan (incorporated by reference to Exhibit 10.11 to SkyTerra’s Quarterly Report on Form 10-Q filed on August 5, 2008).
10.9	Letter Agreement dated August 4, 2008, between SkyTerra and Drew Caplan regarding certain employment matters (incorporated by reference to Exhibit 10.12 to SkyTerra’s Quarterly Report on Form 10-Q filed on August 5, 2008).
10.10	Appendix A – Promissory Note (incorporated by reference to Exhibit 10.13 to SkyTerra’s Quarterly Report on Form 10-Q filed on August 5, 2008).
10.11	Appendix B - Drew Caplan Restricted Stock Agreement dated August 4, 2008 (incorporated by reference to Exhibit 10.14 to SkyTerra’s Quarterly Report on Form 10-Q filed on August 5, 2008).
10.12	Amendment No. 3 to Contract between Boeing Satellite Systems, Inc. and Mobile Satellite Ventures, LP for the MSV L-Bond Space-Based Network, dated August 1, 2008. *
10.13	Registration Rights Agreement, dated as of August 18, 2008, by and between SkyTerra Communications, Inc. and Boeing Satellite Systems, Inc.
10.14	Warrant to Purchase Shares of Voting Common Stock issued on August 18, 2008 to Boeing Satellite Systems, Inc.
10.15	Agreement for Transfer and Exchange between SkyTerra Communications, Inc. and TerreStar Corporation, dated as of September 12, 2008.
10.16	Registration Rights Agreement, dated as of September 15, 2008, by and between SkyTerra Communications, Inc. and Investors Listed on Schedule A thereto.
10.17	Letter Agreement between SkyTerra Communications, Inc. and affiliates of Harbinger Capital Partners, dated as of September 12, 2008.
10.18	Letter Agreement between SkyTerra Communications, Inc. and affiliates of Harbinger Capital Partners, dated as of September 16, 2008.
31.1	Certification of Alexander H. Good, Chief Executive Officer and President of the Company, required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Scott Macleod, Executive Vice President and Chief Financial Officer of the Company, required by Rule 13a-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

56

32.1	Certification of Alexander H. Good, Chief Executive Officer and President of the Company, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Scott Macleod, Executive Vice President and Chief Financial Officer of the Company, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*          Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of the agreement, including the redacted portions, has been filed separately with the Securities and Exchange Commission.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 10, 2008	By:	/s/ Alexander H. Good
		Alexander H. Good
		Chief Executive Officer and President
Date: November 10, 2008	By:	/s/ Scott Macleod
		Scott Macleod
		Executive Vice President and Chief Financial Officer

57

EX-10

CONTRACT NUMBER: MSV-ATC-01

AMENDMENT 3

AMENDED AND RESTATED CONTRACT

Between

Mobile Satellite Ventures LP

and

Boeing Satellite Systems, Inc.

for the

MSV L-Band Space-Based Network

(Original Contract dated 9 January 2006)

The attached Contract Amendment and the information contained therein are confidential and proprietary to MSV LP and Boeing Satellite Systems, Inc. and shall not be published or disclosed to any third party except as permitted by the Terms and Conditions of this Contract and except that MSV LP may disclose to MSV Canada.

PREAMBLE

THIS AMENDED AND RESTATED CONTRACT AMENDMENT 3 by and between Mobile Satellite Ventures LP, a limited partnership organized and existing under the laws of Delaware ("MSV" or “Customer”), and Boeing Satellite Systems, Inc., a corporation incorporated under the laws of Delaware (“Contractor”) (hereinafter referred to individually as “Party” and collectively as the “Parties”) is made effective this 1st day of August 2008.

RECITALS

WHEREAS, the Parties have heretofore entered the Contract for provision of three Satellite Based Networks (SBN); and,

WHEREAS, the Parties acknowledge that the full legal name for the contracting entity for Customer is Mobile Satellite Ventures LP, and that it executes documents and contracts by its General Partner, Mobile Satellite Ventures GP Inc.; and,

WHEREAS, the Parties entered into Amendment No. 1 to the Contract dated March 9, 2006; and,

WHEREAS, MSV, by its letter MSV-ATC-01-002 dated April 07, 2006, exercised its option pursuant to Article 2.2.10 to advance the program by three (3) months; and,

WHEREAS, at MSV’s request, Contractor, by letter[***REDACTED***], agreed to hold the termination liability amount for the MSV-SA SBN constant at [***REDACTED***] through [***REDACTED***]; and,

WHEREAS, the Parties entered into Amendment No. 2 to the Contract dated September 11, 2006, to administratively incorporate these changes into the Contract; and,

WHEREAS, the Parties have agreed to make certain additional administrative changes as set forth in this Amendment No. 3 to modify certain terms and conditions; and,

WHEREAS, the Parties have agreed to make certain additional changes to the Contract Exhibits as appended to this Amendment No. 3,

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and intending to be legally bound, the Parties agree as follows:

1) Revise the following Contract Articles:

a.	Revise Article 2.1.1.
b.	Revise Article 2.1.2.
c.	Revise Article 2.1.4.
d.	Revise Article 2.1.6.
e.	Revise Article 2.1.8.

3

f.	Revise Table 3-1.
g.	Revise Article 4 Price Table..
h.	Revise Article 4.1.1.
i.	Revise Article 5.1.
j.	Revise Article 5.7.
k.	Revise Article 5.8.
l.	Revise Article 5.9.
m.	Revise Article 12.1.5.
n.	Revise Article 17.1.
o.	Revise Article 18.5.
p.	Revise Article 22.1.1.

2) Replace in its entirety, Exhibit B “Technical Requirements for MSV L-Band Space Based Network Revision No.1 dated July 21, 2006” with Revision No. 2 of this Exhibit dated August 1, 2008.

3) Replace in its entirety, Exhibit D “Satellite Program Test Plan” with Revision No.1 of this Exhibit dated August 1, 2008.

4) Replace in its entirety, Exhibit F “Satellite Product Assurance Plan” with Revision No.1 of this Exhibit dated August 1, 2008.

5) Replace in its entirety, Exhibit H “Dynamic Satellite Simulator Specification” with Revision No.2 of this Exhibit dated 14 July 2008.

6) The fully revised Exhibits B, D, F, and H have been marked “[***REDACTED***]” and “August 1, 2008” in the upper right hand corner.

7) The conformed pages of the Contract Articles and the fully revised Exhibits B, D, F, and H are attached hereto and incorporated herein.

8) Other than as expressly set forth above, there is no modification to the Contract and all of the terms and conditions thereof remain in full force and effect.

9) The aforementioned contract exhibits incorporate changes from the following Contract Change Notices (CCNs): 1-11, 13-24, 26-29, 32-33.

3

IN WITNESS WHEREOF, the Parties have executed this Amended and Restated Contract No. [***REDACTED***] by their duly authorized representatives as of the date set forth in the Preamble.

BOEING SATELLITE SYSTEMS, INC.		MOBILE SATELLITE VENTURES LP
		by its General Partner Mobile Satellite
		Ventures GP Inc.
By:		By:
Name:	Patrice Gray Mitchell	Name:	Alexander H. Good
Title:	Sr. Contracts Manager	Title:	Vice Chairman and CEO

4

CONTENTS

PREAMBLE	2
RECITALS	2
PREAMBLE	3
RECITALS	3
ARTICLE 1 – DEFINITIONS	5
ARTICLE 2 – SCOPE OF WORK	13
ARTICLE 5 – PAYMENTS	23
ARTICLE 6 – CUSTOMER-FURNISHED ITEMS	27
ARTICLE 7 – COMPLIANCE WITH U.S. LAWS AND DIRECTIVES	28
ARTICLE 8 – INSPECTION AND ACCESS TO WORK IN PROCESS	30
ARTICLE 9 – SATELLITE PRE-SHIPMENT REVIEW (SPSR) AND OTHER PERFORMANCE REVIEWS	32
ARTICLE 10 – ACCEPTANCE	35
ARTICLE 11 – TRANSFER OF TITLE AND RISK OF LOSS	39
ARTICLE 12 – ORBITAL PERFORMANCE INCENTIVES	41
ARTICLE 13 – CORRECTIVE MEASURES IN SATELLITES AND OTHER DELIVERABLE ITEMS	43
ARTICLE 14 – WARRANTY	44
ARTICLE 15 – CHANGES	49
ARTICLE 16 – FORCE MAJEURE	51
ARTICLE 17 – MSV RESPONSIBILITIES	52
ARTICLE 18 – LIQUIDATED DAMAGES FOR LATE DELIVERY	53
ARTICLE 19 – INTELLECTUAL PROPERTY INDEMNITY	54
ARTICLE 20 – GENERAL INDEMNITY	55
ARTICLE 21 – TERMINATION FOR CONVENIENCE	57
ARTICLE 22 – TERMINATION FOR DEFAULT, EXCESSIVE FORCE MAJEURE	59
ARTICLE 23 – DISPUTE RESOLUTION	61
ARTICLE 24 – INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH	63
ARTICLE 25 – MAJOR SUBCONTRACTS	64
ARTICLE 26 – CONTRACTOR INSURANCE REQUIREMENTS	65
ARTICLE 27 – PERSONNEL AND KEY PERSONNEL	67
ARTICLE 28 – LIMITATION OF LIABILITY	68
ARTICLE 29 – DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION	69

5

ARTICLE 30 – INTELLECTUAL PROPERTY RIGHTS	71
ARTICLE 31 – PUBLIC RELEASE OF INFORMATION	73
ARTICLE 32 – NOTICES	74
ARTICLE 33 – RISK MANAGEMENT SERVICES	76
ARTICLE 34 – ORDER OF PRECEDENCE	77
ARTICLE 35 – GENERAL	78

1

PREAMBLE

THIS CONTRACT, made as of the 9^th day of January, 2006, by and between MSV LP, a limited partnership organized and existing under the laws of Delaware ("MSV" or “Customer”), and Boeing Satellite Systems, Inc., a corporation incorporated under the laws of Delaware (“Contractor”) (hereinafter referred to individually as “Party” and collectively as the “Parties”).

RECITALS

WHEREAS, MSV has been licensed by the U.S. Federal Communications Commission (“FCC”) to construct, launch and operate communications systems consisting of two geostationary satellites in the L-Band, terrestrial and space-based communications networks and user terminals to provide advanced communications services across the United States, Central America and portions of South America (the “U.S. and South American Mobile Satellite Services”),

WHEREAS, MSV’s joint venture partner Mobile Satellite Ventures (Canada) Inc. (“MSV Canada”) has been licensed by Industry Canada to construct, launch and operate communications systems consisting of one geostationary satellite in the L-Band, terrestrial and space-based communications networks and user terminals to provide advanced communications services across Canada (the “Canadian Mobile Satellite Services”) which for the purposes of this joint procurement, and together with the U.S. and South American Mobile Satellite Services, shall constitute the “Mobile Satellite Services”,

WHEREAS, the FCC and Industry Canada licenses are subject to FCC and Industry Canada milestones relating to construction, launch and operational date of the MSV Mobile Satellite Services Hybrid Network,

2

WHEREAS, MSV desires to procure two (2) Space-Based Networks as set out in the first recital and a third as set out in the second recital for the benefit of MSV Canada to be accepted post-Launch, Launch Support Services, Mission Operations Support Services, risk management insurance procurement support, Training services and other items and Services to the extent and subject to the terms and conditions set forth herein,

WHEREAS, Contractor is willing to furnish the Space-Based Networks, Launch Support Services, Mission Operations Support Services, risk management insurance procurement support, Training services and other items and Services to the extent of and subject to the terms and conditions set forth herein, in consideration of the price and other valid consideration,

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and intending to be legally bound, the Parties agree as follows:

3

ARTICLE 1 - DEFINITIONS

Capitalized terms used and not otherwise defined herein shall have the following meanings:

1.1 “Acceptance” shall be as provided in Article 10.

1.2 “Affiliate” means, with respect to an entity, any other entity Controlling or Controlled by or under common Control with such entity.

1.3 “Article” means any article or numbered paragraph thereof in the Contract terms and conditions.

1.4 “Ancillary Terrestrial Component” or “ATC” means any component of the Ancillary Terrestrial Network.

1.5 “Ancillary Terrestrial Network” or “ATN” means the portion of the Hybrid Network comprised of the L-band terrestrial network further described in Exhibit B, Technical Requirements for the MSV L-Band Space Based Network.

1.6 “Attachment(s)” means any and all attachment(s) that are attached hereto and incorporated herein (or are attached to any Exhibit and incorporated therein), as amended from time to time in accordance with the terms hereof.

1.7 “Background Intellectual Property” means Intellectual Property other than Foreground Intellectual Property.

1.8 “Bankruptcy Code” means Title 11 of the United States Code, as amended from time to time.

1.9 “Business Day” means any day other than the following: a Saturday, Sunday, and any other day on which national banks are authorized to be closed in New York City, New York.

1.10 “Calibration Earth Station”, “Calibration System” or “CES” means that portion of the Ground Segment that is utilized to calibrate the GBBF, as further described in Exhibit B, Technical Requirements for the MSV L-Band Space Based Network if required for the Space-Based Network to meet the Performance Specifications.

1.11 “Canadian Mobile Satellite Services” has the meaning set forth in the Recitals.

1.12 “Central Resource Manager” or “CRM” means the Customer-furnished system to be utilized to determine how the L-band carrier frequencies are allocated across the Hybrid Network to Satellite spot beams and ATC cells, as further described in Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.13 “Certificate of Completion” means MSV’s written notification to Contractor by counter-signature in the form of Annex 1 to Attachment A that indicates the successful completion of a Milestone or as described in 9.1.4 and 9.2.2.

1.14 “Commercially Reasonable Efforts,” whether or not capitalized, means standards, practices, methods and procedures conforming to applicable Law and that degree of effort, skill, diligence, prudence and foresight that reasonably would be expected from a commercial satellite contractor or commercial satellite owner or operator, as applicable.

1.15 “Component” means every unit, system and subsystem of the Space-Based Network and all other hardware and software required to be provided by Contractor hereunder.

4

1.16 “Contract” means the terms and conditions (“Preamble,” “Recitals” and the Articles) of this Contract, its Exhibits and its Attachment(s), as amended from time to time in accordance with the terms hereof.

1.17 “Contract Price” means the overall price for all Deliverable Items and services to be provided by Contractor under this Contract.

1.18 “Contractor” has the meaning set forth in the “Preamble” of this Contract and any successor or assignee permitted hereunder.

1.19 “Control” and its derivatives mean, with respect to an entity, the legal, beneficial, or equitable ownership, directly or indirectly, of fifty percent (50%) or more of the capital stock (or other ownership interest if not a corporation) of such entity ordinarily having voting rights or the power to direct the management policies of such entity, whether through the ownership of voting stock, by contract, or otherwise.

1.20 “Control and Management System” or “CMS” means the system to be utilized for Ground Segment resource management and control, as further described in Exhibit A, L-Band Space Based Network Statement of Work, and Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.21 “Daily Liquidated Damages Amount” has the meaning set forth in Article 18.2.

1.22 “Daily Rate” has the meaning set forth in Article 12.

1.23 “Deliverable Data” means the data and documentation required to be delivered to MSV as specified in Exhibit A, L-Band Space Based Network Statement of Work.

1.24 “Deliverable Item” means any of the items or services listed in Article 3.1 or as identified as a deliverable in Exhibit A, L-Band Space Based Network Statement of Work.

1.25 “Delivery” has the meaning set forth in Article 3.2.

1.26 “Delivery Schedule” means the schedule for delivery of specified Deliverable Items as set forth in Article 3.1.

1.27 “Dispute(s)” has the meaning set forth in Article 23.

1.28 “Dynamic Satellite Simulator” or “DSS” means the dynamic satellite simulator further described in Exhibit A, L-Band Space Based Network Statement of Work.

1.29 “Effective Date of Contract” or “EDC” means January 9, 2006.

1.30 “Exhibit(s)” means the exhibit(s) identified in Article 2.1 and attached hereto and incorporated herein.

1.31 “Export Licensed Items” has the meaning set forth in Article 7.2.

1.32 “Extended Life Incentives” has the meaning set forth in Article 12.1.4.

1.33 “FCC” means the Federal Communications Commission or any successor agency or governmental authority.

1.34 “Financing Agreements” means any and all documents and agreements evidencing and/or securing monies provided on a full or partial debt basis by any Financing Entity to MSV to fund the design, development, construction, procurement, maintenance, or operation of all or any material part of the Hybrid Network program.

5

1.35 “Financing Entity” means any entity (other than Contractor, or parties related to Contractor, or competitors of Contractor), e.g., commercial bank, merchant bank, investment bank, commercial finance organization, corporation, or partnership, which has been specifically identified in a written notification to Contractor, providing money on a full or partial debt basis to MSV to fund the design, development, construction, procurement, maintenance, or operation of all or any material part of the Hybrid Network.

1.36 “Firm Fixed Price” or “FFP” means the firm fixed price applicable to a Space-Based Network as set forth in Article 4, as applicable. References to “the Firm Fixed Price” mean MSV 1 SBN FFP, MSV 2 SBN FFP and/or MSV-SA FFP as applicable given the context.

1.37 “Force Majeure Event” has the meaning set forth in Article 16.

1.38 “Foreground Intellectual Property” means Intellectual Property conceived of and first reduced to practice in performance of this Contract and that is incorporated into, employed in, or required or for the use of, any Deliverable Item.

1.39 “Gateway” means the feeder link earth station portion of the Ground Segment.

1.40 “GBBF” or “Ground Based Beam Former” means the ground-based beam forming system further described in Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.41 “GBBF Intellectual Property” means any Intellectual Property that is incorporated into or employed in or required for the use of the GBBF equipment or CES equipment.

1.42 Reserved

1.43 “Ground Segment” means that portion of the Space-Based Network consisting of (i) the TT&C, (ii) the Gateways, (iii) GBBF, (iv) CMS and (v) Calibration Earth Stations (if required to meet the Performance Specifications) and associated terrestrial infrastructure described in Exhibit A, L-Band Space Based Network Statement of Work or Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.44 “Hybrid Network” means the network to be utilized by MSV and MSV Canada to provide the MSV Mobile Satellite Services, and that is comprised of the Space-Based Network, the Ancillary Terrestrial Network (“ATN”) system, and Mobile Terminals (“MTs”).

1.45 “Industry Canada” means the Canadian federal Department of Industry or any successor agency thereto.

1.46 “Initial Operations Period” means the two-year period following SBN Acceptance.

1.47 “In-Orbit Test” or “IOT” means in-orbit testing of the applicable SBN, as further described in Exhibit A, L-Band Space Based Network Statement of Work.

1.48 “Intellectual Property” means all designs, methods, concepts, layouts, software, inventions (whether or not patented or patentable), processes, technical data and documentation, technical information and drawings, and similar matter in which an Intellectual Property Right may subsist.

1.49 “Intellectual Property Claim” has the meaning set forth in Article 19.1.

1.50 “Intellectual Property Right(s)” means all common law and statutory proprietary rights, including patent, patent application, patent registration, copyright, trademark, service mark, trade secret, mask work rights, data rights and similar rights.

6

1.51 “Intentional Ignition” means, with respect to any Satellite, the start of the ignition process for the purpose of Launching such Satellite, which is the time at which the command signal is sent to the Launch Vehicle. This definition shall be modified to incorporate the definition of “intentional ignition” from the Launch Services Agreement applicable to Launch of the Satellite.

1.52 “Key Personnel” has the meaning set forth in Article 27.3.

1.53 “Late Payment Interest Rate” has the meaning set forth in Article 5.3.1.

1.54 “Launch” means, with respect to a Satellite, Intentional Ignition followed by lift-off. This definition shall be modified to incorporate the definition of "Launch" from the Launch Services Agreement applicable to the Launch of the Satellite.

1.55 “Launch Agency” means the provider of Launch Services responsible for conducting the Launch Services for a Satellite.

1.56 “Launch and In-Orbit Insurance Policy” means the launch and in-orbit insurance policy obtained by MSV with respect to the relevant Satellite.

1.57 “Launch Option” means MSV’s option to procure Launch Services from Contractor, as further described in Article 2.2.2.

1.58 “Launch Readiness Review” or “LRR” has the meaning set forth in Exhibit A.

1.59 “Launch Services” means those services, including the provision of a Launch Vehicle, to be provided by the Launch Agency for the Launch of a Satellite pursuant to the Launch Services Agreement or pursuant to the Launch Option, if elected by MSV.

1.60 “Launch Services Agreement”or “LSA” means the contract between MSV (or Contractor, if MSV elects the Launch Option) and the Launch Agency that provides for Launch Services for a Satellite, as such contract may be amended from time to time in accordance with its terms.

1.61 “Launch Site” means the location that will be used by the Launch Agency for purposes of launching a Satellite, except in the case of Sea Launch it shall mean the homeport located in Long Beach, CA.

1.62 “Launch Support” or “Launch Support Services” means those services specified in Exhibit A, L-Band Space Based Network Statement of Work, to be provided by Contractor in support of Launch Services.

1.63 “Launch Vehicle” means the launch vehicle used to provide Launch Services for a Satellite.

1.64 “Laws” means any laws, rules, regulations, codes, ordinances, injunctions, judgments, orders, ordinances, decrees, rulings, and changes thereunder, of any federal, state, local, provincial or municipal government of any country (and all agencies thereof).

1.65 “London Inter-Bank Offered Rate” or “LIBOR” means the rate per annum shown, on the third (3rd) London business day preceding the day of commencement of an interest calculation period, on page 3750 of the Dow Jones & Company Telerate screen or any successor page as the composite offered rate for London interbank deposits in an amount approximately equal to the amount on which the interest is to be applied for a three-month period (the “Rate Base”), as shown under the heading “USD” as of 11:00 a.m. (London Time); provided that in the event no such rate is shown, LIBOR shall be the rate per annum (rounded to the nearest 1/100th of one percent) based on the rates at which U.S. dollar deposits approximately equal in principal amount to the Rate Base and for a three-month period are displayed on page “LIBO” of the Reuters Monitor Money Rates

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Service or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks as of 11:00 a.m. (London time) (it being understood that if at least two such rates appear on such page, the rate will be the arithmetic mean of such displayed rates); provided that in the event fewer than two such rates are displayed, or if no such rate is relevant, LIBOR shall be the rate per annum equal to the rate offered by Credit Suisse, New York Branch, at approximately 11:00 a.m. (London Time) to prime banks in the London interbank market on deposits in U.S. dollars in an amount approximately equal in principal amount to the aggregate principal balance of the Rate Base for a three-month period.

1.66 “Losses” means all losses, liabilities, damages, royalty payments and claims, and all related costs and expenses (including reasonable legal fees and disbursements and costs of investigation, expert fees, litigation, settlement, judgment, interest, and penalties).

1.67 “Major Subcontract” means a subcontract related to the performance of this Contract that either (i) is identified in Article 25 or (ii) that is valued at $15,000,000 or more, including any subcontract that results from any decision by Contractor to outsource work to a subcontractor which was initially contemplated to be done “in-house”.

1.68 “Milestone” means a portion of the Work upon completion of which a payment is to be made in accordance with Exhibit I, MSV Space-Based Network Program Payment Plan and Termination Liability Amounts.

1.69 “Milestone Date” means the scheduled date for completion of a Milestone as set forth in the Delivery Schedule and/or applicable Payment Plan.

1.70 “Mission Operations Support Services” means the orbit-raising, in-orbit testing and related services specified in Exhibit A, L-Band Space Based Network Statement of Work, to be performed by Contractor for each Space-Based Network.

1.71 “Mobile Satellite Services” has the meaning set forth in the Recitals.

1.72 “Mobile Terminal” or “MT” means the hand-held device necessary for the end-user to utilize the Mobile Satellite Services.

1.73 “MSV” has the meaning set forth in the “Preamble” and any successor or assignee permitted hereunder.

1.74 “MSV 1” means the first Satellite for the Space-Based Network with the coverage throughout the North America Service Area to be provided under this Contract and that is authorized by the FCC.

1.75 “MSV 1 SBN FFP” means the Firm Fixed Price for the MSV 1 SBN and the associated Deliverable Items and services, as set forth in Article 4.1.2.

1.76 “MSV 2” means the second Satellite for the Space-Based Network with the coverage throughout the North America Service Area to be provided under this Contract and that is authorized by Industry Canada.

1.77 “MSV 2 SBN FFP” means the Firm Fixed Price for the MSV 2 SBN and the associated Deliverable Items and services, as set forth in Article 4.1.3.

1.78“MSV Canada” has the meaning set forth in the Recitals.

1.79 “MSV Delay” has the meaning set forth in Article 17.

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1.80 “MSV Mobile Satellite Services” has the meaning set forth in the Recitals.

1.81 “MSV-SA” means the Satellite for the Space-Based Network with the coverage throughout the South American Service Area to be provided under this Contract and that is authorized by the FCC.

1.82 “MSV-SA FFP” means the Firm Fixed Price for the MSV-SA and the associated Deliverable Items and services, as set forth in Article 4.1.1.

1.83 “North America Service Area” means the U.S., Canada, Mexico, Hawaii, Puerto Rico/U.S. Virgin Islands, the Caribbean, plus Central America and the northern portion of South America identified in Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.84 “Notice of Election” has the meaning set forth in Article 20.3.1.

1.85 “Notice of Non-Conformance” means a written notice from MSV to Contractor that the review of a Milestone demonstrates that the Milestone has not been successfully completed.

1.86 “North American SBN – 1” means the first SBN to be utilized to provide the Mobile Satellite Services to the North American Service Area and including MSV-1.

1.87 “North American SBN – 2” means the second SBN to be utilized to provide the Mobile Satellite Services to the North American Service Area and including MSV-2.

1.88 “Orbital Performance Incentive Commencement Date” has the meaning set forth in Article 12.2.2.

1.89 “Orbital Performance Incentive Period” means, with respect to any Space-Based Network, the period commencing on the day following Acceptance of such Space-Based Network and ending on the last day of the Satellite-Stated Life.

1.90 “Orbital Performance Incentives” or “OPI” means, with respect to any Space-Based Network, an amount specified in Exhibit J, Orbital Performance Incentives Payment Plan, that may be earned by Contractor based on in-orbit performance of such Space-Based Network as set forth in Article 12.

1.91 “Other Direct Costs” or “ODC” means the reasonable actual direct incremental costs incurred by Contractor for the performance of the applicable Work that are directly attributable to such Work as supported by relevant contemporaneous records, as determined in accordance with GAAP, plus any allocation of indirect costs, if any, in accordance with Boeing’s approved accounting practices.

1.92 “Party” or “Parties” means MSV, Contractor or both, as the context requires.

1.93 “Payment Plan” means the payment plan for the applicable Deliverable Item, as set forth in Exhibit I, MSV Space-Based Network Payment Plan and Termination Liability Amounts.

1.94 “Payment Plan Term” means the remaining payments due Contractor from the date of Termination through the date of the last payment due under the Contract.

1.95 “Percentage of Performance Earned” has the meaning set forth in Article 12.

1.96 “Performance Specification” means the applicable performance specification for a Space-Based Network or any Component thereof, as appropriate, in the context of the applicable clause, as such specification may be amended from time to time in accordance with the terms hereof.

1.97 “Permits” means all federal, state, county, local and foreign licenses, approvals, inspections, permits and certificates necessary for Contractor to perform its obligations under Contract, including all

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export and import Permits and all Permits related to the installation of the Ground Segment and the ground-based components of the Space Segment.

1.98 “PMO” means the MSV program management office to be designated by MSV.

1.99 “Product Assurance Program Plan” means the product assurance program plan attached as Exhibit F, Satellite Product Assurance Plan, with respect to the Satellite, and Exhibit G, Ground Segment Product Assurance Plan.

1.100 “Proprietary Information” has the meaning set forth in Article 29.

1.101 “Quarter” and all its variations means a calendar quarter.

1.102 “Related Entity” means any entity in which MSV is a minority shareholder.

1.102A“SA SBN Full Start” means the written authorization provided by MSV to Contractor to commence full construction start of the SA SBN in accordance with Article 2.5.

1.103 “Satellite” means any communications satellite that is to be manufactured by Contractor and to be delivered to MSV pursuant to this Contract. References to “the Satellite” means MSV 1, MSV 2 or MSV-SA, as applicable given the context.

1.104 “Satellite-Adapted Base Station Subsystem” or “S-BSS” means the Customer-furnished base station subsystem adapted for use with an L-band Satellite.

1.105 “Satellite Anomaly” means, with respect to any Satellite in orbit, a condition or occurrence that may have a material adverse impact on the Satellite Stated Life or performance of such Satellite.

1.106 “Satellite Maneuverable Life” means the number of years that a Satellite would have sufficient fuel to maintain east-west station-keeping to within +/-0.05 degrees of such Satellite’s designated orbital location measured from the end of IOT after allowing for de-orbiting.

1.107 “Satellite Pre-Shipment Review” or “SPSR” has the meaning set forth in Article 9.

1.108 “Satellite Stated Life” or “Satellite Mission Life” means, with respect to a Satellite, the contracted for life of fifteen (15) years for such Satellite as set forth in Exhibit B, Technical

1.109 “SBN Acceptance” means acceptance of each Space-Based Network in accordance with Article 10.

1.110 “SBN Earnback Amount” has the meaning set forth in Article 18.5.

1.111 “SBN Performance Specification” means, with respect to a Space-Based Network, the Performance Specification for such Space-Based Network set forth in Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.112 “SBN Program Test Plan” means the SBN program test plan comprised of Exhibit C, L-Band SBN System Test Plan, Exhibit D, Satellite Program Test Plan, and Exhibit E, Ground Segment Test Plan.

1.113 “Scheduled Launch” means the date identified in Article 3.3 as the Key Milestone for the Launch of such Satellite.

1.114 “Service Area” means both the North American Service Area and the South American Service Area.

1.115 “South American Mobile Satellite Services” has the meaning set forth in the Recitals.

1.116 “South American SBN” means the SBN to be utilized to provide the Mobile Satellite Services to the South American Service Area and including MSV-SA.

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1.117 “South American Service Area” means South America and a portion of Central America as further identified in Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.118 “Space-Based Network” or “SBN” means the portion of the Hybrid Network that is comprised of the Space Segment and Ground Segment, all as further described in the Exhibits. References to “the SBN” means the South American SBN (or MSV-SA if MSV does not exercise the Ground Segment option under Article 2.2.3), the North American SBN-1, or the North American SBN-2, as applicable given the context.

1.119 “Space Segment” means the portion of the Space-Based Network comprised of the Satellite, the DSS and encryption tools, as further described in Exhibit A, L-Band Space Based Network Statement of Work, and Exhibit B, Technical Requirements for MSV L-Band Space Based Network.

1.120 “Spare Part” means any spare part to be delivered under the spares plan to be provided in accordance with Article 14.2.3.

1.121 “Statement of Work” or “SOW” means the statement of work attached as Exhibit A, as such Exhibit may be amended from time to time in accordance with the terms hereof.

1.122 “Summary Space-Based Network Acceptance Test Report” includes the SBN Verification Report, SBN Acceptance End Item Data Package, and SBN Acceptance Certification as set forth in Exhibit A, L-Band Space Based Network Statement of Work.

1.123 “Contractor Competitor” means shall mean another satellite manufacturer.

1.124 “Taxes” means all U.S. and non-U.S. taxes, duties, fees, levies, bonds, charges, contributions, or any other such fiscal burden related to this Contract imposed by the U.S. Government or any other Government and any political subdivisions thereof, including state and local jurisdictions.

1.125 “Term” means EDC through twenty (20) years following SBN Acceptance of the last SBN to be delivered under this Contract.

1.126 “Terminated Ignition” means that, following the time when the electronic signal is sent to command the opening of any first stage propellant valves, the first stage engines of the Launch Vehicle are shut down for any reason before the hold down mechanism is released and the launch pad is declared safe by the Launch Agency. This definition shall be modified to incorporate the definition of “Terminated Ignition” from the Launch Services Agreement applicable to the Launch of the Satellite.

1.127 “Termination for Default” has the meaning set forth in Article 22.

1.128 “Total Loss” means with respect to the Satellite after Intentional Ignition: (i) the complete loss, destruction or operational failure of such Satellite, or (ii) a constructive total loss as defined in the Launch and In-Orbit Insurance Policy, if any, for such Satellite.

1.129 “Training” means the training specified in Exhibit A, L Band Space Based Network Statement of Work, to be provided by Contractor hereunder.

1.130 “TT&C” means the telemetry, tracking and control system for each Satellite.

1.131 “US Mobile Satellite Services” has the meaning set forth in the Recitals.

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1.132 “Virus” means any virus or code, device or routine (including, without limitation, time bombs, Trojan horses, back doors or drop dead devices) that would have the effect of disabling or otherwise shutting down all or any portion of any software.

1.133 “Warranty Period” has the meaning defined in Article 14.2.2.

1.134 “Work” means all design, development, construction, manufacturing, labor, and services, including tests to be performed, and any and all Deliverable Items, including Space Segment, Ground Segment, Deliverable Data, Mission Operations Support Services, Launch Support Services, Training, and equipment, materials, articles, matters, services, and things to be furnished and rights to be transferred to MSV under this Contract, or any subcontract entered into hereunder by Contractor.

1.135 “Work-in-Process and Finished Goods” means (i) all Deliverable Items (including any Space Segment and Ground Segment); (ii) all Components that have been incorporated into Deliverable Items; and (iii) all materials identified to this Contract in Contractor’s inventory management system.

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ARTICLE 2 - SCOPE OF WORK

2.1 Provision of Services and Materials

Contractor shall provide the necessary qualified personnel, equipment, material, services, facilities and know-how for the baseline program and options (as exercised) to:

(i) design, develop, provide, manufacture, transport, assemble, configure, install, test and deliver for MSV’s Acceptance, post-Launch, three (3) L-band Space-Based Networks, comprised of the Space Segment and Ground Segment (except that the SA-SBN Ground Segment is priced as a separate option to the Contract pursuant to Article 2.2.3 and except that Contractor shall not be required to perform any Work in connection with the SA-SBN until such time as there is a SA SBN Full Start pursuant to Article 2.5 below),

(ii) configure, integrate and test each Ground Segment, as applicable, with its corresponding Satellite,

(iii) design, develop and test a GBBF emulator with each Satellite at the Contractor’s facilities,

(iv) design, develop and test a satellite simulator to be used to test the GBBF for combined beam forming and adaptive interference nulling,

(v) design, develop and deliver a Dynamic Satellite Simulator (DSS),

(vi) design, develop, provide, transport, assemble, configure, install and test network infrastructure, including the design, development, provision, installation and integration of the communications network between and among the Ground Segment components,

(vii) procure and negotiate all long-haul interconnection circuit leases and service agreements on behalf of MSV, and provide, as a Deliverable Item, all customer-premises equipment (“CPE”) that is not supplied by the long-haul interconnection circuit service provider and for maintaining such CPE during the Initial Operations Period, except for the South American sites. If MSV exercises its option for the Ground Segment for the South American SBN, then once the South American sites have been selected, Contractor shall provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes,

(viii) perform and deliver all improvements to any facilities necessary to properly utilize the Ground Segment components as intended, including providing the antenna foundations, civil works, physical security, fencing and any environmental requirements necessary to meet manufacturer specifications and Exhibit B, Technical Requirements for MSV L-Band Space Based Network, except for the South American sites. If MSV exercises its option for the Ground Segment for the South American SBN, then once the South American sites have been selected, Contractor shall provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes. If MSV determines that Contractor shall not use existing facilities for the North American sites, Contractor shall also provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes,

(ix) operate and maintain the Ground Segment, as applicable, and associated networks during the Initial Operations Period,

(x) obtain all rights and real property leases necessary to build, operate and maintain the Ground Segments in accordance with the applicable specifications, and procure and negotiate all such rights and leases on behalf of MSV, except for the South American sites. If MSV exercises its option for the Ground Segment for the South American SBN, then once the South American sites have been selected, Contractor shall provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes. Contractor has also assumed that existing facilities will be used for the North American sites. If MSV determines that Contractor shall not use existing facilities for the North American sites, Contractor shall also provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes,

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(xi) identify, procure and maintain throughout the Term all applicable Permits, except for the South American sites. If MSV exercises its option for the Ground Segment for the South American SBN, once the South American sites have been selected, Contractor shall provide a proposal to MSV which shall be negotiated as a change to the Contract pursuant to Article 15, Changes,

(xii) provide Mission Operations Support Services, Launch Support Services, and Training,

(xiii) perform and provide the requirements of any option elected by MSV pursuant to Article 2.2,

(xiv) provide any services incidental to the proper performance and provision of the services in the Statement of Work (without increasing the scope of such services) and Deliverable Items, all in accordance with this Contract, including the following Exhibits, which are attached hereto (or incorporated by reference) and made a part hereof:

2.1.1 Exhibit A, L-Band Space Based Network Statement of Work, Revision No. 2 dated August 01, 2008

2.1.2 Exhibit B, Technical Requirements for MSV L-Band Space Based Network, Revision No. 2 dated August 01, 2008

2.1.3 Exhibit C, L-Band SBN System Test Plan

2.1.4 Exhibit D, Satellite Program Test Plan, Revision No. 1 dated August 01, 2008

2.1.5 Exhibit E, Ground Segment Test Plan

2.1.6 Exhibit F, Satellite Product Assurance Plan, Revision No. 1 dated August 01, 2008

2.1.7 Exhibit G, Ground Segment Product Assurance Plan

2.1.8 Exhibit H, Dynamic Satellite Simulator Specification, Revision No. 1 dated August 01, 2008

2.1.9 Exhibit I, MSV Space-Based Network Program Payment Plan and Termination Liability Amounts which is comprised of the following three (3) exhibits:

2.1.9.1 Exhibit I-1 MSV Space-Based Network Program Payment Plan – Billing Milestones, Revision No. 1 dated July 28, 2006

2.1.9.2 RESERVED (Exhibit I-2 deleted)

2.1.9.3 Exhibit I-3 MSV Termination Liability Amounts Schedule, Revision No. 1 dated July 21, 2006

2.1.10 Exhibit J, Orbital Performance Incentives Payment Plan

2.1.11 Exhibit K, Labor Rates

2.1.12 Exhibit L, Spares Equipment List

2.1.13 Exhibit M, ViaSat Certification Letter

2.1.15 Attachment A, Form of Invoice

2.1.16 Attachment B, Sample Review Certificate

Schedule 4.3 – Option Pricing

2.2 Options

2.2.1 Additional Satellite Options

Contractor hereby grants to MSV the option to purchase, for the price specified in Article 4.3, one (1) additional Satellite with the same design and specifications as MSV 1 or MSV 2, as elected by MSV, in form, fit and function, together with all Deliverable Items and Work associated with a Satellite under this Contract, to include without limitation the construction, testing, and associated ground-based Space Segment elements (excluding GBBFs, gateways or CESs); provided that MSV has not earlier terminated

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this Contract with respect to the procurement of the original Satellite associated with the Service Area applicable to the optional Satellite. Delivery for such additional Satellite shall be no later than twenty-nine (29) months after MSV notifies Contractor in writing of its intent to exercise such Satellite option, and shall be no earlier than five (5) months after the last Satellite has been delivered. This option shall remain valid until July 1, 2008; provided that MSV may require Contractor to extend the validity of this option as a change pursuant to Article 15. Upon request by MSV, Contractor shall provide a proposal for an additional SA Satellite after an SA SBN Full Start.

2.2.2 Launch Services Option

Upon request by MSV, Contractor shall obtain Launch Agency proposals for Launch Services to be provided to MSV. As part of the Launch Services, Contractor shall be responsible for all necessary work in the preparation and obtaining of regulatory, Launch and other permits required for Launching all Satellites for which MSV elects the Launch Services Option. If the Launch Services Option is elected, the Parties shall amend this Contract to reflect reasonable and customary provisions related to the provision of Launch Services.

2.2.3 SA SBN Ground Segment Option

To the extent that the SA SBN Full Start has commenced, Contractor hereby grants to MSV an option to include as part of this Contract, the purchase of, and require the Contractor to complete hereunder, the Ground Segment for the South American SBN. The SA Ground Segment includes four (4) gateways in the South American service area, including Feederlink Earth Stations, Ground Based Beam Former, Calibration Earth Stations and a Control Management System; a primary TT&C antenna located in North America, and a back-up TT&C system in the service area, but does not include infrastructure, e.g., any real property leases, facilities, civil works or permits. The price for such design modification, including all resulting Work and Deliverable Items, is set forth in Article 4.3. [***REDACTED***]

2.2.4 Reserved

2.2.5 Extended Hardware Warranty

For each SBN, Contractor hereby grants to MSV an option to purchase, for the price specified in Article 4.3, an annually renewable extended warranty for Ground Segment components and any ground-based Space Segment hardware, commencing after the end of the Initial Operations Period for such SBN. Such warranty shall be an extension of the warranty set forth in Articles 14.2.2 and 14.2.3. Ninety (90) days prior to the expiration of the then-current term of the warranty, Contractor shall notify MSV of the upcoming expiration date. MSV shall notify Contractor of its intent to renew the extended warranty at least thirty (30) days prior to the expiration of the then-current term of the warranty.

2.2.6 Extended Software Warranty

For each SBN, Contractor hereby grants to MSV an option to purchase, for the price specified in Article 4.3, an annually renewable software warranty for the software Deliverable Items (except to the extent such software is on the Satellite and is therefore inaccessible), commencing after the end of the Initial Operations Period for such SBN. Such warranty shall be an extension of the warranty set forth in Articles 14.2.2 and 14.2.4. Ninety (90) days prior to the expiration of the then-current term of the software warranty, Contractor shall notify MSV of the upcoming expiration date. MSV shall notify Contractor of its intent to renew the extended software warranty at least thirty (30) days prior to the expiration of the then-current term of such warranty.

2.2.7 Extended Ground Segment Operations and Maintenance

For each SBN, Contractor hereby grants to MSV an option to purchase, for the price specified in Article 4.3, annually renewable Ground Segment operations and maintenance services, as further described in Exhibit A, L-Band Space Based Network Statement of Work, commencing after the end of the Initial

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Operations Period for such SBN. One hundred and twenty (120) days prior to the expiration of the then-current term of the monitoring and maintenance services, Contractor shall notify MSV of the upcoming expiration date. MSV shall use commercially reasonable efforts to notify Contractor of its intent to renew the extended monitoring and maintenance services at least ninety (90) days prior to the expiration of the then-current term, but shall provide such notice in no event less than sixty (60) days prior to such expiration.

2.2.8 Storage

A.  Upon MSV’s request, which shall be no later than three (3) months prior to the expected shipment of each Satellite, Contractor shall provide storage of such Satellite and related ground hardware (as necessary) at the price set forth in Article 4.3 for less than one (1) year from its SPSR. MSV shall take preliminary acceptance of the Satellite(s) and the on-ground warranty shall commence upon conclusion of the SPSR. The pricing does not include shipment to another storage facility or storage at another facility.

B.  In the event MSV wishes to store the Satellite past one (1) year, the parties shall negotiate a change pursuant to Article 15, for MSV to pay Contractor reasonable storage costs (including the costs of a storage facility and insurance), and any related costs that increase the Contract Price or extend the delivery schedule. If the Satellite is to be launched within three (3) years after its SPSR, MSV shall take Final Acceptance in accordance with Article 10 and risk of loss and title shall pass to MSV in accordance with Article 11.1.

C. In the event a Satellite has been in such storage for three (3) years from its SPSR, or MSV decides prior to the end of such three (3) years not to launch such Satellite, the following shall apply:

(1) Contractor shall be entitled to receive within thirty (30) days after the earlier of, receipt of de-storage notification from MSV or the end of the three (3) year period, all payments due and owing, not otherwise paid to Contractor, including Orbital Performance Incentives, less all costs not incurred with respect to the Launch Support Services, In-Orbit Testing, and Mission Operation Support Services for such Satellite; and,

(2) Contractor shall promptly deliver to MSV, at MSV’s expense, such Satellite to a location specified by MSV (if other than a storage location selected in Paragraph B above); and

(3) Final Acceptance shall occur and title and risk of loss shall pass, with respect to any Satellite placed in storage after three (3) years from its SPSR or upon arrival of the Satellite to a different location specified by MSV, in which case, any and all taxes and duties in connection with such delivery and Final Acceptance shall be borne and paid by MSV.

2.2.9 Spares Option

For each SBN, Contractor hereby grants to MSV an option to purchase, for the price specified in Article 4.3, the Spares identified in Exhibit L, at any time prior to the later of the end of the Initial Operations Period, or any Ground Segment operations and maintenance extension.

2.2.10 [***REDACTED***]

2.2.11 Conversion Option

[***REDACTED***]

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2.3 Certain Ground Segment-Related Third Party Agreements

With respect to (i) the long-haul interconnection circuit leases and service agreements and (ii) the agreements pertaining to the rights and real property leases necessary to build, operate and maintain the Ground Segment in accordance with the applicable specifications, in each case to be negotiated by Contractor on behalf of MSV, all such agreements shall be subject to the prior review and approval of MSV, which approval shall not be unreasonably withheld or delayed. MSV (and/or MSV Canada) shall be the contracting party in each such agreement and shall be responsible for paying such third party service provider or lessor directly.

2.4 Coordination with MSV Hybrid Network

As part of the Services, Contractor agrees to coordinate and cooperate with other members of the MSV Hybrid Network program, including MSV Canada, and other members, agents, consultants, subcontractors, and third party suppliers, in order to accomplish the Work and to support the development and implementation of a fully functional MSV Hybrid Network. If at any time through such interaction Contractor becomes aware of any material information which differs from that provided to Contractor by MSV, Contractor shall promptly notify MSV in writing of any such differences.

2.5 SA SBN

(a)      Upon written authorization by MSV to Contractor specifying that Contractor is authorized to proceed with the SA SBN (“the Authorization”), the SA SBN shall be delivered as the third SBN under the Contract (“SA SBN Full Start”).

(b)      Contractor shall provide MSV with a proposal within five (5) days after execution of this Amendment No. 2 for revised prices and delivery schedules for the SA SBN for each quarter (3 month period) beginning August 9, 2006 through November 8, 2007 (the “SA SBN Proposal”) with a proposal validity date through November 8, 2007.

(c)      Within fourteen (14) days of MSV providing notice of its interest in, and a projected start date for proceeding with the SA SBN Full Start, Contractor shall provide a payment plan and termination liability schedules for the projected start date. Negotiations shall be conducted on a good faith basis between the parties in order to facilitate MSV providing the Authorization to proceed with the SA SBN Full Start for the projected start date.

(d)      If MSV does not provide Contractor with the Authorization on or before November 8, 2006, the SA SBN Full Start shall continue to be suspended and the proposed price shall be adjusted upwards by an amount specified in the SA SBN Proposal for each quarter (3 month period) beginning August 9, 2006 through November 8, 2007.

(e)      If MSV has not provided the Authorization by November 8, 2007, the Contract shall be deemed terminated for MSV’s convenience in part (in accordance with Article 21.2.1), as it relates only to the SA SBN.

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ARTICLE 3 - DELIVERABLE ITEMS AND DELIVERY SCHEDULE

3.1 Deliverable Items

Subject to the other terms and conditions of this Contract, the items to be delivered under this Contract are specified in the table below and Contractor shall deliver such items on or before the corresponding delivery dates and at locations specified in the table below (the “Delivery Schedule”).

Table 3-1. Delivery Schedule

Item Description Satellite Shipment Date Delivery Date (SBN Acceptance) Delivery Location

1	MSV-SA-SBN	[***REDACTED***].	TBD in accordance with Article 2.5.	In-orbit and at its respective Ground Segment Site, if ground segment option is exercised
2	MSV 1 SBN	[***REDACTED***]	October 11, 2009	In-orbit and at its respective Ground Segment Site
3	MSV 2 SBN	[***REDACTED***]	July 11, 2010	In-orbit and at its respective Ground Segment Site
4	Deliverable Data	N/A	Per SOW, Exhibit A	PMO
5	Training	N/A	Per SOW, Exhibit A	Per SOW, Exhibit A
6	Launch Support Services	N/A	Per SOW, Exhibit A	Per SOW, Exhibit A
7	Mission Operations Support Services	N/A	Per SOW, Exhibit A	Per SOW, Exhibit A

3.2 Delivery

“Delivery” of each Deliverable Item shall occur as follows:

A. Delivery of the SBN shall occur upon SBN Acceptance.

B. Delivery of all other Deliverable Items shall occur upon Acceptance of such item in accordance with Articles 10 or 11 as applicable.

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3.3 Key Milestones

Contractor shall achieve the following key Milestones on or before the date indicated below:

Key Milestone	Due Date: MSV-SA	Due Date: MSV 1	Due Date: MSV 2
Complete Satellite Technical Review # 1 (for MSV-SA & MSV 1)/ Submission of Final Design Specifications (for MSV 2)	TBD*	May 26, 2007	December 15, 2007
Commence Physical Construction	TBD*	May 26, 2008	N/A
Launch	TBD*	On or about January 26, 2010	On or about November 30, 2010
Operate Satellite in the Assigned Orbital Position	TBD*	May 26, 2010	March 31, 2011

*TBD in accordance with Article 2.5

[***REDACTED***]

3.4 Schedule Non-Compliance

If Contractor either fails to achieve, or MSV has a reasonable basis to believe that Contractor will fail to deliver a Deliverable Item in accordance with the Delivery Schedule, or fail to achieve a Milestone on the Milestone Date, Contractor shall develop and submit to MSV a recovery plan within ten (10) Business Days of MSV’s request, demonstrating its ability to complete its obligations in accordance with the Delivery Schedule or by Milestone Date, or shortly thereafter.

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ARTICLE 4 – PRICE

Description	MSV SA Termination Liability Amount*	MSV 1 SBN Amount	MSV 2 SBN Amount	MSV’s Portion of Gateway NRE**
Satellite Space-Based Network (SBN) Price		[***REDACTED***]	[***REDACTED***]
Orbital Performance Incentives		[***REDACTED***]	[***REDACTED***]
Orbital Slot Change		[***REDACTED***]*
Napa Gateway				[***REDACTED***]
Dallas Gateway				[***REDACTED***]
Ottawa Gateway***				[***REDACTED***]
Saskatoon Gateway				[***REDACTED***]
TOTAL FFP	[***REDACTED***]	[***REDACTED***]	[***REDACTED***]	[***REDACTED***]

*[***REDACTED***]

4.1.1. Firm Fixed Price (“FFP”) for MSV-SA

The price to be paid by MSV to Contractor for all Deliverable Items and Services associated with MSV-SA shall be a firm fixed price of [***REDACTED***] in accordance with Article 2.5(e).

4.1.2 FFP for MSV 1 SBN

The price to be paid by MSV to Contractor for all Deliverable Items and Services associated with MSV 1 SBN shall be a firm fixed price of [***REDACTED***] (the “MSV 1 SBN FFP”), based on launching the Satellite on Sea Launch, subject to Article 17.1(ii).

4.1.3 FFP for MSV 2 SBN

The price to be paid by MSV to Contractor for all Deliverable Items and Services associated with MSV 2 SBN shall be a firm fixed price of [***REDACTED***] (the “MSV 2 SBN FFP”), based on launching the Satellite on Sea Launch, subject to Article 17.1(ii).

4.2 Elements of the FFP

[***REDACTED***]

4.3 Pricing for Options

Pricing for the following options is set forth below:

Item	Description	Price
1	Launch Services Option – Launch Services	[***REDACTED***]

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2	Additional Satellite for the North American Service Area	[***REDACTED***]
3	Additional Satellite for the South American Service Area	[***REDACTED***].
4	Annually renewable extended hardware warranty commencing after the Initial Operations Period	As set forth in Table 1 of Schedule 4.3
5.	Annually renewable extended software warranty	As set forth in Table 2 of Schedule 4.3
6	Annually renewable extended Ground Segment Operations and Maintenance following the Initial Operations Period	As set forth in Table 3 of Schedule 4.3
7	Storage	Place Satellite into storage: [***REDACTED***] Remove Satellite from storage:[***REDACTED***] Retest Satellite: [***REDACTED***] Total Non-Recurring:[***REDACTED***] Monthly storage cost:                               [***REDACTED***]
8	[***REDACTED***]	[***REDACTED***]
9	Spares	As set forth in Table 4 of Schedule 4.3

4.4 Taxes

The Contract Price excludes, and MSV shall be responsible for Taxes assessed on the sale of Deliverable Items delivered to MSV and any Taxes assessed on the sale of installation and operation services performed in connection with the Deliverable Items. MSV and Contractor shall provide reasonable cooperation to each other to minimize such taxes, duties, assessments and fees, including tariffs, and shall modify the Contract if the parties agree that such modification is necessary and appropriate to achieve such minimization. All Taxes payable by MSV shall be separately stated on the invoice to which they correspond. The imposition of taxes, duties or other such fiscal burdens for which MSV is required to pay under this Contract, will be billed by Contractor to MSV for payment. MSV shall prepay any amounts to Contractor for taxes, duties or other such fiscal burdens, that Contractor is required by law to pay prior to Contractor’s paying the taxing authority. If prepayment is not practicable, Contractor shall invoice and MSV shall reimburse Contractor for such amounts within thirty (30) days of MSV’s receipt of Contractor’s invoice. In either instance MSV shall pay in an amount which leaves

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Contractor in the same economic position as if such payment of charges and reimbursement thereof had not been required.

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ARTICLE 5 - PAYMENTS

5.1 Payment Plan

With the exception of MSV’s portion of the Gateway NRE and the Orbital Slot Change prices, payments by MSV to Contractor of the Firm Fixed Price set forth in Article 4 and of the amounts for options, if any, exercised by MSV pursuant to this Contract shall be in accordance with Exhibit I, MSV Space-Based Network Payment Plan and Termination Liability Amounts, as applicable thereto. With regard to MSV’s portion of the Gateway NRE, payment(s) by MSV to Contractor shall be made no later than thirty (30) days after receipt by MSV of Contractor’s invoice(s) for same, with such invoices to be submitted to MSV on a schedule consistent with Contractor’s payments to the respective Gateway providers. With regard to the MSV 1 Orbital Slot Change price, payment by MSV to Contractor shall be made no later than thirty (30) days after receipt by MSV of Contractor’s invoice for same. Contractor shall invoice and MSV shall make calendar payments for the SA SBN up to the termination liability amount of [***REDACTED***] in accordance with the revised SA SBN payment plan (Exhibit I.1 Revision 1 “MSV Space-based Network Program Payment Plan – Billing Milestones”). It is also understood that payment for completion of any of the milestones events for MSV-1 and MSV-2 SBNs under this payment plan shall not require completion of any work in connection with the SA SBN.

5.2 Payment Conditions

5.2.1 Milestone Payments

The initial non-refundable payment of $1,000,000 for each SBN, due from MSV on EDC (the “Initial Payment”) shall be paid no later than five (5) Business Days following EDC. If MSV fails to pay the Initial Payment within such period, the Delivery Schedule shall be extended on a day-for-day basis for each day of non-payment. All other payments due from MSV upon the completion of a Milestone described in the Payment Plan shall be paid no later than thirty (30) days after receipt by MSV of an invoice and certification in the form attached hereto as Attachment A that the Milestone has been completed in accordance with the requirements of this Contract, together with the necessary or appropriate supporting data and documentation as required hereunder (and including a Certificate of Completion issued by MSV with respect to the Milestones identified in Articles 9.1.4, 9.2.2, and 9.3) or as MSV may reasonably request.

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5.2.2 Cumulative Payments

[***REDACTED***]

5.2.3 Non-Warranty Payments

All amounts payable to Contractor with respect to non-warranty work performed pursuant to Article 14.3 shall be paid no later than thirty (30) days after receipt of an invoice and certification in the form attached hereto as Attachment A that such non-warranty work has been completed and documented in accordance with the requirements of this Contract together with the necessary or appropriate supporting data and documentation as reasonably requested by MSV.

5.2.4 Obligation to Pay

If Contractor shall not have delivered any invoice or certification required hereunder within the time specified therefor, the relevant payment due from MSV shall be payable on or before thirty (30) days after MSV’s receipt of such invoice and certification.

5.3 Late Payment

5.3.1 Late Payment by MSV

In the event MSV fails to pay an undisputed amount within thirty (30) days after the due dates specified in Article 5.2, Contractor shall be entitled to interest at the fixed rate of eight percent (8%) per annum (the “Late Payment Interest Rate”) on the unpaid balance of the undisputed payment until such amount is paid.

5.3.2 Late Payment by Contractor

In the event Contractor fails to pay an undisputed amount to MSV when due, MSV shall be entitled to interest at the Late Payment Interest Rate on the unpaid balance of the undisputed payment until such amount is paid.

5.4 Invoices

Invoices required to be delivered by Contractor hereunder shall be submitted by facsimile or signed invoice by email in Adobe PDF format, and overnight courier to MSV (original plus one (1) copy, including supporting documentation and data) at the following address:

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MSV LP

Attn.: Michael Cannice

Director, Contracts Administration

10802 Parkridge Boulevard

Reston, VA 20191

Fax: (703) 390-2770

Email: mcannice@msvlp.com

or to such other address as MSV may specify in writing to Contractor.

5.5 Payment Bank

All payments made to Contractor hereunder shall be in U.S. currency and shall be made by electronic funds transfer to the following account: Bank of America, Concord, California, [***REDACTED***], or such other account or accounts as Contractor may specify in writing to MSV.

5.6 Set Off

In the event one Party has not paid the second Party any amount that is due and payable to the second Party under this Contract, such second Party shall have the right to set off such amount against payments due to the first Party under this Contract, provided any amount in Dispute shall not be considered eligible for set off while the Dispute is being resolved.

5.7 Deferral of Payments - “Original Construction Deferrals” up to $76,000,000

[***REDACTED***]

5.8 Deferral of Payments - “Additional Construction Deferrals” up to $40,000,000

A. In addition to the Original Construction Deferrals as described in Article 5.7, Contractor agrees to provide MSV with Additional Construction Deferrals associated with the MSV-1 SBN which shall [***REDACTED***] which can be applied to payments associated with the MSV-1 SBN at the rate of 100% of any payments due once MSV-1 SBN has reached the maximum amount provided under the Original Construction Deferrals above. Further, Contractor agrees to provide MSV with Additional Construction Deferrals associated with the MSV-2 SBN which shall total [***REDACTED***] which can be applied to payments associated with the MSV-2 SBN at the rate of 100% of any payments due once MSV-2 SBN has reached the maximum amount provided under the Original Construction Deferrals above. In no case shall the Additional Construction Deferrals provided by Contractor exceed a total principal amount of forty million dollars ($40,000,000).

B.       The Additional Construction Deferrals shall earn current interest at the rate of LIBOR + 4% (four percent) and interest is due and payable monthly as invoiced separately by Contractor to MSV. Payment of interest amounts shall be handled in the same way as other contractual payments, except that interest will apply during the thirty (30) day period invoice-to-payment cycle.

C.       For avoidance of doubt, no Guarantee Fee will apply to the Additional Construction Deferrals.

D. [***REDACTED***]

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E.        The Additional Construction Deferral repayment shall be in the form of a final balloon repayment which shall be due no later than 20 December 2010, or ten (10) days prior to the shipment of the MSV-2 Satellite, whichever occurs first. [***REDACTED***]

5.9 Grant of Warrant and Other Rights for Contractor

A.       In furtherance of Contractor’s agreeing to defer certain payments in accordance with Article 5.7 and 5.8, MSV shall provide to Contractor a Warrant to purchase 626,002 shares of SkyTerra Communications’ common stock at a strike price of Ten Dollars ($10.00) per share. The Warrant will have a ten-year life from the effective date of Contract Amendment 3 and will vest in and be exercisable by Contractor on a proportional basis consistent with MSV’s drawdown against the $40 Million of Additional Construction Deferrals outlined in the Warrant Agreement (attached hereto in Exhibit N) which shall be considered formally and automatically incorporated into this Contract upon Boeing’s execution.

B.        Furthermore, MSV agrees to establish quarterly financial reviews with Contractor’s Finance executives and will provide current financial information as well as progress with capital raising efforts until the full amount of any Original Construction Deferrals and Additional Construction Deferrals, including all accrued interest and applicable Guarantee Fees, are paid in full to Contractor.

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ARTICLE 6 - CUSTOMER-FURNISHED ITEMS

6.1 Communications Authorizations

Subject to Article 2.1(xi), MSV (and/or MSV Canada) shall be responsible, at its cost and expense, for preparing, coordinating and filing all applications, registrations, reports, licenses, permits and authorizations with the FCC and Industry Canada, if required to do so for the Launch and operation of each Satellite. Contractor shall provide such reasonable cooperation and support as may be reasonably requested by MSV (and/or MSV Canada through MSV) in support of MSV’s preparation, coordination and filing of such applications, registrations, reports, licenses, permits and authorizations. [***REDACTED***]

6.2 Radio Frequency Coordination

MSV and MSV Canada shall be responsible for the timely preparation and submission of all filings required by the International Telecommunication Union (or any successor agency thereto) and all relevant domestic communications regulatory authorities regarding radio frequency and orbital position coordination. Such filings shall be made in accordance with the Radio Regulations of the International Telecommunication Union (or any successor agency) and the laws and regulations of all domestic communications regulatory authorities having jurisdiction over MSV and MSV Canada. Contractor shall provide such reasonable cooperation and support as may be reasonably requested by MSV (and/or MSV Canada through MSV) in support of the preparation and submission of such filings. [***REDACTED***]

6.3 Late Delivery of MSV-Furnished Items or Services

The late delivery of MSV-furnished items or services as required under Article 17, MSV Responsibilities, or under Exhibit A, L-Band Space Based Network Statement of Work, individually or combined, shall be considered an event beyond the reasonable control of Contractor, and if such late delivery has a material adverse impact on Contractor’s costs, the Delivery Schedule or performance requirement, Contractor shall be entitled to an equitable adjustment in price, schedule, performance requirements and other terms of this Contract in accordance with Articles 15 and 17.

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ARTICLE 7 - COMPLIANCE WITH U.S. LAWS AND DIRECTIVES

7.1 General

Each Party shall, at its expense, perform its respective obligations hereunder in accordance with all applicable laws, rules, and regulations, and the conditions of all applicable governmental approvals, permits, or licenses. Without limiting the generality of the foregoing, neither Party shall, directly or indirectly, take any action that would cause the other Party to be in violation of U.S. anti-boycott laws under the U.S. Export Administration Act, the U.S. Internal Revenue Code, or any regulation thereunder. In its performance of this Contract, Contractor will not, directly or indirectly, make, offer, or agree to make or offer any loan, gift, donation, or other payment, whether in cash or in kind, for the benefit or at the direction of any candidate, committee, political party, government or its subdivision, or any individual elected, appointed, or otherwise designated as an employee or officer thereof, for the purpose of influencing any act or decision of such entity or individual or inducing such entity or individual to do or omit to do anything, in order to obtain or retain business or other benefits except as may be expressly permitted under the Foreign Corrupt Practices Act and the regulations promulgated thereunder.

7.2 Export Licensed Items

7.2.1 Contractor shall promptly apply for and use reasonable and diligent efforts to obtain U.S. and non-U. S. Government approvals, permits and licenses necessary for export or import of any Deliverable Items and Services and other technical data and equipment being furnished pursuant to or to be utilized in connection with this Contract (hereinafter in this Article referred to as "Export Licensed Items") including any such license requirements for delivery of technical data and defense services, as well as the MSV 2 ground equipment and services to MSV Canada and the MSV 2 Satellite to its orbital slot. MSV agrees to cooperate with Contractor in Contractor’s efforts to obtain any such approvals, permits and licenses, including providing Contractor with required information in MSV’s possession. Once the South American sites have been selected, the Parties shall negotiate a change to the Contract pursuant to Article 15, Changes, for the Work associated with obtaining such non-U.S. approvals, permits and licenses.

7.2.2 If, within a reasonable time, any foreign country or countries to which such Export Licensed Items are sought to be exported fails to grant an approval or license required for such export, or suspends or revokes a required approval or license subsequent to its grant, or grants a license subject to conditions, or if any foreign country or countries to which such Export Licensed Items are exported fails to grant an approval or license to utilize the Export Licensed Items for the purpose(s) for which exported, the non-impacted portions of this Contract shall, nevertheless, remain in full force and effect. In the event of such occurrence, within a reasonable time after Contractor has used commercially reasonable efforts to obtain such approval or license or re-instatement of such approval or license, the Parties shall negotiate an equitable adjustment to price, schedule and other terms of this Contract pursuant to Article 15, Changes.

7.3 Licenses and Other Approvals for MSV Personnel

Contractor, and its U.S. subcontractors, shall timely apply for and, once issued, maintain U.S. Government export licenses, agreements and other approvals that are required for “foreign person” personnel and/or representatives of MSV (including, but not limited to, foreign

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subsidiaries and related entities of MSV involved with the procurement) as well as MSV’s insurance providers and non-U.S. governmental authorities (as may be required under applicable law) to have access to Contractor facilities, hardware, software, Deliverable Data, other technical information or technical services in connection with the performance of this Contract. A “foreign person” shall be as defined in the International Traffic in Arms Regulations, 22 C.F.R. §120.16. MSV shall provide the reasonable cooperation and support necessary for Contractor to apply for and maintain such required U.S. export licenses, agreements and other approvals. MSV shall apply for, and once issued, maintain U.S. Government export licenses, agreements and other approvals to permit MSV to be present during any discussion or meetings where MSV’s foreign subsidiaries/related entities, insurance providers and/or non-U.S. governmental authorities may receive from or discuss with Contractor or any of its U.S. subcontractors export-controlled technical data. Contractor and its U.S. subcontractors shall provide the parties to such export licenses and agreements copies of the export licenses and agreements, including any U.S. government provisos related to same. Contractor shall, and shall ensure that its U.S. subcontractors shall, cooperate and provide MSV with information required to apply for and maintain MSV’s licenses and work with MSV on an appropriate export process in connection with the Work to be performed under this Contract, including the appropriate flow of information and exports.

7.4 Review of Applications

Contractor shall review with MSV any application Contractor makes to any government department, agency, or entity for any approval, permit, license, or agreement, as may be required for performance of the Work, prior to submission of such application. Contractor shall provide MSV a minimum of three (3) Business Days to review such application prior to submission to such governmental entity, and Contractor shall in good faith consider any comments and proposed revisions made by MSV for incorporation into such application.

7.5 Violation of Law

MSV shall not be responsible in any way for the consequences, direct or indirect, of any violation by the Contractor, its subcontractors, or their respective Affiliates of any law, rule or regulation of any country whatsoever. Except where MSV’s failure to comply with laws is a result of Contractor’s failure to comply with its obligations under this Contract, Contractor shall not be responsible in any way for the consequences, direct or indirect, of any violation by MSV, its subcontractors, or their respective Affiliates of any law, rule or regulation of any country whatsoever.

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ARTICLE 8 - INSPECTION AND ACCESS TO WORK IN PROCESS

8.1 General

Contractor represents and warrants that, subject to Article 7, the access to the Work and Work-in-process to be provided to MSV (and MSV Canada and their duly appointed consultants and agents) under this Contract is or shall be substantially similar to the access to the Work and Work-in-process Contractor provides to its other major commercial customers. In the event Contractor becomes aware that the access to the Work and Work-in-process provided under this Contract is otherwise, Contractor shall promptly remedy that situation.

8.2 Work-in-Process at Contractor’s Facility

Subject to Article 7 and compliance with Contractor’s normal and customary safety and security policies and procedures (as enforced by Contractor with respect to its own employees) of which MSV has received prior written notice (including a copy of such policies and procedures), MSV and MSV Canada’s personnel and their designated consultants and agents shall be allowed unescorted access to all Work being performed at Contractor’s facility for the Satellites and other Deliverable Items, for the purpose of observing the progress of such Work at all times. Subject to Article 7, MSV shall be provided ten (10) non-escort permanent badges and ten (10) escort badges to agreed work areas where the Work is being performed.

8.3 Work in Process at Subcontractors’ Facilities

Subject to Article 7, in the case of Contractor’s Major Subcontracts, Contractor shall require that each such subcontract contain a provision substantially similar to this Article 8 with respect to MSV’s access to the applicable subcontractor’s facilities and performance of the Work, including the provision of three (3) non-escort permanent badges and three (3) escort badges to agreed work areas where the Work is being performed. Subject to Article 7, with respect to non-Major Subcontracts, Contractor shall require that each such subcontract contain a provision permitting MSV, MSV Canada and their consultants and agents escorted access to the subcontractor’s facilities for purposes of observing the Work performed under such subcontract.

8.4 On-Site Facilities for MSV’s Personnel

For the purpose of monitoring the progress of the Work being performed by Contractor hereunder, Contractor shall provide office facilities at or proximate to Contractor’s plant for up to five (5) resident MSV and MSV Canada personnel (and/or their designated consultants and agents) through Acceptance of the last SBN ordered hereunder. The office facilities to be provided shall include a reasonable amount of office space, office furniture, local telephone service, reasonable long-distance telephone usage, internet access (at the same speed and quality available to Contractor personnel), electronic access to Contractor’s dedicated and secure Program Information Management System (PIMS), a web-based information management tool as described in Exhibit A, L-Band Space Based Network Statement of Work, access to copy machines, facsimile machines, meeting rooms, car parking facilities and, to the extent available, videoconference rooms, to enable MSV personnel to monitor the progress of Work under this Contract. In the case of Contractor’s Major Subcontracts, Contractor shall use commercially reasonable efforts to ensure that reasonable on-site office facilities, consistent with the specifications described above, are available for up to two (2) MSV personnel (and/or MSV’s designated consultants and agents) at (i) ViaSat’s facility, provided that such personnel are U.S.

30

Persons only, as defined by the U.S. International Traffic in Arms Regulations, and (ii) any other Major Subcontractor facilities where Contractor has a presence at such facilities of such Major Subcontractors. The parties agree that clause (i) of the previous sentence does not apply to Article 8.3.

8.5 Interference with Operations

MSV shall exercise its rights under this Article 8 in a manner that does not unreasonably interfere with Contractor’s or its subcontractors’ normal business operations or Contractor’s performance of its obligations under this Contract or any agreement between Contractor and its subcontractors.

8.6 Financing Entities

Subject to the provisions of Article 7, each Financing Entity shall have escorted access to the Work in the same manner and to the same extent as MSV consultants and agents under this Article 8, provided such entities sign confidentiality agreements no less stringent than the terms provided in Article 29.

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ARTICLE 9 - SATELLITE PRE-SHIPMENT REVIEW (SPSR) AND OTHER PERFORMANCE REVIEWS

9.1 Satellite Pre-Shipment Review (SPSR)

9.1.1 Contractor to Review Each Satellite Prior to Shipment

Contractor shall conduct a review of each Satellite prior to Contractor’s shipment of such Satellite to the Launch Site. This review shall be in accordance with the terms of this Article 9 and of Exhibit A, L-Band Space Based Network Statement of Work (a “Satellite Pre-Shipment Review” or “SPSR”).

9.1.2 Time, Place and Notice of SPSR

Contractor shall notify MSV in writing on or before thirty (30) days prior to the date that each Satellite shall be available for SPSR, which shall be the scheduled date for commencement of such SPSR. If MSV cannot commence such SPSR on such scheduled date, Contractor shall make reasonable efforts to accommodate MSV’s scheduling requirements. MSV, MSV Canada and their designated consultants and agents shall be permitted to attend and witness the SPSR.

9.1.3 Conduct and Purpose of SPSR

The SPSR shall be conducted in accordance with the terms of this Article 9 and Section 2.4.11 of Exhibit A, L-Band Space Based Network Statement of Work. If any non-conformity is discovered during SPSR, Contractor shall, within three (3) days after SPSR, provide MSV with the full details of such non-conformity, including Contractor’s opinion as to whether such non-conformity, if not corrected, would materially impact the operation and use of the Satellite. Such opinion is for MSV’s consideration only, and shall not be binding on MSV.

9.1.4 SPSR Results

Within three (3) days after completion of the SPSR for a Satellite, MSV shall submit to Contractor:

A. A Certificate of Completion if the result of the SPSR successfully demonstrates compliance with the requirements of Article 9 and Section 2.4.11 of Exhibit A, L-Band Space Based Network Statement of Work. Such Certificate of Completion may specify certain non-conformances which (i) the Parties agree will be fixed at the Launch Site prior to Intentional Ignition; (ii) MSV has agreed to waive irrevocably; or (iii) MSV has agreed to waive irrevocably, unless the Parties agree that such non-conformance(s) may be corrected prior to Intentional Ignition if time permits consistent with the Launch Schedule (in which case Contractor agrees to perform such correction(s)); or

B. A Notice of Non-Conformance if the SPSR discloses any failure to comply with the requirements of Article 9 or Section 2.4.11 of Exhibit A, L-Band Space Based Network Statement of Work. Such Notice of Non-Conformance shall identify the non-conforming requirements that require correction.

If Contractor receives a Certificate of Completion for the SPSR, Contractor shall prepare and transport such Satellite to the Launch Site and proceed with the Launch Readiness Review for such Satellite. If Contractor does not receive a Certificate of Completion, Contractor shall correct or repair each non-conformance with all deliberate speed and resubmit such Satellite for

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additional testing in accordance with applicable requirements of Exhibit C, L-Band SBN System Test Plan and Exhibit D, Satellite Program Test Plan, and conduct a second SPSR. Such additional testing and second SPSR shall be conducted to the extent relevant and necessary to demonstrate that the Satellite conforms to the requirements of Exhibit B, Technical Requirements for MSV L-Band Space Based Network, after which, MSV shall again notify Contractor under Article 9.1.4(A) or (B), as applicable.

9.2 Other Reviews

9.2.1 General

Contractor shall conduct all other applicable reviews in accordance with the applicable Exhibits. Contractor shall give MSV personnel at least seven (7) days prior written notice of each such review, unless otherwise specified in the applicable Exhibit.

9.2.2 Review Results

Within three (3) Business Days after completion of the applicable review, MSV shall submit to Contractor:

A. A Certificate of Completion if the results of the applicable review demonstrate compliance with the applicable requirements. Such Certificate of Completion may specify certain non-conformances which (i) the Parties agree will be fixed at the Launch Site prior to Intentional Ignition; (ii) MSV has agreed to waive irrevocably; or, (iii) MSV has agreed to waive irrevocably, unless the Parties agree that such non-conformance(s) may be corrected prior to Intentional Ignition if time permits consistent with the Launch Schedule (in which case Contractor agrees to perform such correction(s)).

B. A Notice of Non-Conformance if the performance review discloses any failure to comply with the applicable performance or review requirements. Such Notice of Non-Conformance shall identify the non-conforming requirements that require correction.

If Contractor does not receive a Certificate of Completion, Contractor shall correct or repair each non-conformance with all deliberate speed and resubmit such Deliverable Item for additional testing in accordance with applicable requirements, and conduct a second review. Such additional testing and second review shall be conducted to the extent relevant and necessary to demonstrate that the Deliverable Item conforms to the applicable requirements, after which, MSV shall again notify Contractor under Article 9.2.2(A) or (B), as applicable.

9.3 Launch Agency’s Launch Readiness Review

Contractor shall support the Launch Agency during the Launch Agency’s Launch Readiness Review. If any defect in the Satellite is discovered during the Launch Agency’s Launch Readiness Review, Contractor shall correct such defect at its own cost and expense.

9.4 Inspection Rights; Costs Borne by MSV

MSV, MSV Canada and their designated consultants and agents shall be permitted to attend and witness the tests and reviews set forth in this Article 9. MSV shall be responsible for all costs and expenses incurred by MSV, MSV Canada and their designated consultants and agents in the exercise of its inspection rights under this Article 9, including travel and living expenses.

9.5 Satellite Pre-Shipment Review Certification

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Contractor will confirm in writing, consistent with the form in Attachment B, prior to Launch (at the Satellite Pre-Shipment Review) that the Satellite fully conforms to the Contract and there are no defects in such Satellite (taking into account and providing a summary of waivers mutually agreed for such Satellite by the Parties in writing) and that any known defects, failures or anomalies in any Contractor manufactured satellite (either in-orbit or on ground) that may be applicable to such Satellite have been identified by Contractor to MSV and corrected on such Satellite, except where Contractor demonstrates such defect, failure or anomaly is not applicable to such Satellite. In the event the Satellite does not fully conform to the Contract, Contractor shall provide a summary of all deviations that exist and the corrective actions or recommended waivers Contractor intends to employ. Contractor shall provide to MSV (in writing) an updated certification to the above at the Launch Readiness Review. In addition, Contractor shall provide any other certifications, confirmations or other information with respect to the Satellite as reasonably required by MSV’s Launch and In-Orbit Insurance insurers and underwriters and shall take such other action as reasonably requested by MSV or any such insurers or underwriters that is necessary or advisable in order for MSV to obtain Launch and In-Orbit Insurance on reasonable and customary terms.

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ARTICLE 10 - ACCEPTANCE

10.1 Space-Based Network Final Acceptance

Final acceptance of the Space-Based Network shall occur upon successful completion of in-orbit SBN Acceptance testing in accordance with the SBN Program Test Plan.

10.2 SBN Acceptance Testing

10.2.1 Conduct and Purpose of SBN Acceptance Test

The SBN Acceptance Test shall be conducted in accordance with the terms of this Article 10 and the SBN Program Test Plan. The purpose of the SBN Acceptance Test with respect to each Space Segment and associated Ground Segment shall be to: (i) review test data and analyses for the SBN; (ii) demonstrate all testing has been completed in accordance with the SBN Program Test Plan; (iii) determine whether such SBN meets the requirements of Exhibit B, Technical Requirements for MSV L-Band Space Based Network; (iv) demonstrate that the Ground Segment is properly integrated into the Space-Based Network. If any non-conformity is discovered during the SBN Acceptance Test, Contractor shall include full details of such non-conformity in the Summary SBN Acceptance Test Report.

10.2.2 SBN Acceptance Test Review

Contractor shall: (i) submit the Summary Space-Based Network Acceptance Test Report at least 24 hours prior to conducting the SBN Acceptance Test review, and (ii) conduct the SBN Acceptance Test review within three (3) days of completing the SBN Acceptance Test, and (iii) provide MSV with a Certificate of Acceptance, all (i) – (iii) in accordance with Section 2.2.13 of Exhibit A, L-Band Space Based Network Statement of Work, the SBN Program Test Plan and this Article 10.

10.2.3 SBN Acceptance – Full Compliance

Within 24 hours after completion of the SBN Acceptance Test review, MSV shall submit to Contractor the Certificate of Acceptance signed by MSV if the results of the SBN Acceptance Test demonstrate that the Space-Based Network complies with the requirements of Article 10.2.1(i-iv) and the SBN Acceptance Test review and the contents of the Summary SBN Acceptance Test Report comply in all material respects with the requirements of Exhibit B, Technical Requirements for MSV L-Band Space Based Network. MSV shall not withhold SBN Acceptance for minor non-conformances. A minor non-conformance is one that is not likely to reduce the usability of the product for its intended purpose, in a non-trivial respect, or is a departure from established standards having little bearing on the effective use or operation of the product. SBN Acceptance does not include integration of the SBN with the S-BSS, the Satellite Operations Centers (SOCs), the CRM or the User Terminals.

10.2.4 Space-Based Network Non-Conformance

MSV shall submit a Notice of Non-Conformance to Contractor if the results of the SBN Acceptance Test demonstrate that the Space-Based Network does not comply with the requirements of Article 10.2.1(i-iv) or if the SBN Acceptance Test review and the contents of the Summary SBN Acceptance Test Report do not comply in all material respects with the requirements of Exhibit B, Technical Requirements for MSV L-Band Space Based Network. To the extent the non-conformity relates to the Ground Segment, or if the non-conformity of the

35

Satellite can be fixed remotely, Contractor shall promptly correct such deficiencies and resubmit such Space-Based Network for additional testing in accordance with applicable requirements of the SBN Program Test Plan and a second SBN Acceptance Test. Such additional testing and second SBN Acceptance Test shall be conducted to the extent relevant and necessary to demonstrate that the SBN conforms to the requirements specified in Article 10.2.1, after which, MSV shall again notify Contractor under Articles 10.2.3, 10.2.4, or 10.2.5, as applicable. If the sole non-conformity is that the SBN Acceptance Test demonstrates that the Satellite does not conform to Article 10.2.1(iii), Article 10.2.5 shall apply.

10.2.5 SBN Acceptance – Satellite Non-Compliance

If the results of the SBN Acceptance Test demonstrates compliance with Article 10.2.1(i), (ii), (iii) and (iv), except for Article 10.2.1(iii) solely with respect to the Satellite at or after Launch, MSV shall submit to Contractor the Certificate of Acceptance after Contractor has complied with its obligations in Article 13.1.3, and MSV shall not withhold SBN Acceptance, even in the event of a Total Loss or partial loss of the Satellite at or after Launch.

10.3 Post-Eclipse Report

In the event no solar eclipse occurs during the Space-Based Network Test, Contractor shall, at MSV’s request, and subject to making the Satellite and necessary MSV facilities available to Contractor, for the first solar eclipse following completion of Space-Based Network Test, conduct eclipse testing in accordance with the SBN Program Test Plan, and prepare and provide MSV an eclipse test report demonstrating such Satellite meets the applicable performance requirements during an eclipse. In the event the report shows non-compliance with the applicable performance requirements during an eclipse, there may be adjustments to the amounts Contractor may earn pursuant to Article 12.

10.4 Acceptance of Spare Parts

10.4.1 Inspection

With respect to each Spare Part, MSV shall perform acceptance inspection within ten (10) days after such Spare Part arrives at the location designated for Delivery thereof in Article 3.1. The purpose of the acceptance inspection shall be to determine whether each such Spare Part meets applicable Performance Specification requirements as of the date of such delivery, as such requirements may have been modified pursuant to Article 15, Changes.

10.4.2 Acceptance Inspection Results

Within fifteen (15) days after completion of acceptance inspection pursuant to this Article 10 for any Spare Part, MSV shall notify Contractor in writing of the results of such acceptance inspection. In the event that such acceptance inspection demonstrates conformity of such Spare Part to the requirements of the applicable Performance Specification, such Deliverable Item shall be accepted by MSV for all purposes hereunder (“Acceptance” with respect to a Spare Part), and MSV’s notice shall so state. In the event that such acceptance inspection discloses any non-conformance of such Spare Part to the applicable Performance Specification, MSV’s notice shall identify each such non-conformance (with reference to the applicable requirement of the Performance Specification deemed not met), and Contractor shall correct or repair such non-conformance and resubmit such Spare Part for a second acceptance inspection in accordance with this Article 10. Such second acceptance inspection shall be conducted by MSV to verify the Spare Part conforms to the requirements of the applicable Performance

36

Specification. If MSV fails to provide notice within the time specified, Acceptance shall be deemed to have occurred with respect to such Spare Part.

10.5 Deliverable Data

10.5.1 MSV Approval Required

Deliverable Data requiring MSV approval pursuant to Exhibit A, L-Band Space Based Network Statement of Work, shall be deemed accepted upon MSV’s issuance of a written approval of such Deliverable Data. MSV shall, within ten (10) days after delivery of such Deliverable Data to the location designated in Article 3.1, notify Contractor in writing that such Deliverable Data has been accepted in accordance with Exhibit A, L-Band Space Based Network Statement of Work, or that such Deliverable Data does not comply with the applicable requirements of Exhibit A, L-Band Space Based Network Statement of Work, identifying each such non-conformance (with reference to the applicable requirement of Exhibit A, L-Band Space Based Network Statement of Work, deemed not met). Contractor shall promptly correct any non-compliant aspect of such Deliverable Data identified in such notice from MSV, and re-submit it to MSV for a second acceptance inspection pursuant to this Article 10.5.1. The provisions of this Article 10.5.1 shall thereafter apply to the corrected Deliverable Data. If MSV fails to provide notice within the time specified, such Deliverable Data shall be deemed to be approved.

10.5.2 MSV Approval Not Required

Deliverable Data that does not require MSV approval pursuant to Exhibit A, L-Band Space Based Network Statement of Work, shall be deemed accepted upon delivery of such Deliverable Data to the location designated in Article 3.1 and in a condition that fully conforms to the provisions of this Contract, unless within ten (10) days of delivery, MSV notifies Contractor in writing that such Deliverable Data does not comply with the applicable requirements of the Statement of Work, identifying each such non-conformance (with reference to the applicable requirement of Exhibit A, L-Band Space Based Network Statement of Work deemed not met). Contractor shall promptly correct any non-compliant aspect of such Deliverable Data identified in such notice from MSV and re-submit it to MSV for a second acceptance inspection. The provisions of this Article 10.5.2 shall thereafter apply to the corrected Deliverable Data.

10.6 Training

Acceptance of Training, or any part thereof, required by Exhibit A, L-Band Space Based Network Statement of Work, shall occur upon Contractor furnishing Training, or such part thereof, to MSV in accordance with the Delivery Schedule and in a condition conforming to Exhibit A, L-Band Space Based Network Statement of Work. Any Training furnished to MSV shall be accompanied by written notice from Contractor specifying that portion of the Training being furnished. If such Training or part thereof is unacceptable, MSV shall notify Contractor in writing within fifteen (15) Business Days of completion of such Training or portion thereof, that the Training, or part thereof, does not conform to the requirements of the Exhibit A, L-Band Space Based Network Statement of Work, identifying each such non-conformance (with reference to the applicable requirement of Exhibit A, L-Band Space Based Network Statement of Work deemed not met). Contractor shall, at its cost and expense, promptly correct such non-conformance and shall notify MSV that the corrections have been made. The provisions of this Article 10.6 shall thereafter apply to the corrected Training. If MSV fails to provide notice

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within fifteen (15) Business Days of completion of Training or any part thereof, Acceptance shall be deemed to have occurred with respect to such Training or part thereof.

10.7 Other Services

Acceptance of other Services provided hereunder (e.g., Launch Support Services and Mission Operations Support Services), or any part thereof, shall occur upon Contractor furnishing such Services, or such part thereof, to MSV in accordance with the Delivery Schedule set forth in Article 3.1 and in a condition conforming to the requirements of this Contract, unless rejected by MSV in writing within ten (10) Business Days after the date MSV has knowledge of the non-conforming condition. To the extent feasible, any such Services furnished to MSV shall be accompanied by written notice from Contractor specifying that portion of the Services being furnished. If such Services or part thereof are unacceptable, MSV shall notify Contractor that the Services, or part thereof, do not conform to the requirements of Exhibit A, L-Band Space Based Network Statement of Work, identifying each such non-conformance (with reference to the applicable requirement of Exhibit A, L-Band Space Based Network Statement of Work deemed not met). Contractor shall promptly correct such non-conformance to the extent feasible and shall notify MSV that the corrections have been made. The provisions of this Article 10.7 shall thereafter apply to the corrected Services.

10.8 Inspection Rights; Costs Borne by MSV

MSV, MSV Canada and their designated consultants and agents shall be permitted to attend and witness the tests and reviews set forth in this Article 10. MSV shall be responsible for all costs and expenses incurred by MSV, MSV Canada and their designated consultants and agents in the exercise of its inspection rights under this Article 10, including travel and living expenses.

10.9 Warranty Obligations

In no event shall Contractor be released from any of its warranty obligations applicable to any Deliverable Item other than Satellites as set forth in Article 14 as a result of such Deliverable Item having been Accepted as set forth in this Article 10.

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ARTICLE 11 - TRANSFER OF TITLE AND RISK OF LOSS

11.1 Satellites

Title (free and clear of all Contractor-incurred and subcontractor-incurred liens and encumbrances of any kind) and risk of loss or damage to any Satellite to be delivered under this Contract shall pass from Contractor to MSV at the time of Intentional Ignition of the Launch Vehicle used for the Launch of such Satellite or, depending on the agreement with Launch Agency as selected by MSV, a similar point in time at which the Launch and In-Orbit Insurance Policy identifies as the time at which the risk of loss and damage is covered by the Launch and In-Orbit Insurance Policy; provided, however, in the event of a Terminated Ignition for a Satellite, title and risk of loss or damage to such Satellite shall revert to Contractor upon such Terminated Ignition and shall again pass to MSV upon the subsequent Intentional Ignition of the Launch Vehicle used for Launch of such Satellite. Prior to Launch of a Satellite, the Parties shall cooperate in good faith and agree to appropriate revisions to certain definitions (i.e., Intentional Ignition, Launch, Terminated Ignition, and other related provisions) as required to ensure that (1) risk of loss transfers from Contractor to MSV in a manner that does not result in a lack of insurance coverage for a Satellite at any time between the ground insurance to be provided by Contractor pursuant to Article 26 and the applicable coverage start date for any Launch and In-Orbit Insurance Policy and (2) Contractor is not responsible for loss or damage to a Satellite which manifests itself on such Satellite, as shown by way of example, by telemetry or lack thereof from such Satellite, at a point in time that is prior to Intentional Ignition but where such loss or damage is not covered by Contractor’s Ground Insurance because Contractor can no longer effect an abort to the Launch.

In the event of a Terminated Ignition, Contractor shall inspect the Satellite, if necessary or reasonably required, and provide MSV with a report on the condition of such Satellite along with a recommendation for repair or replacement, if any is required. Thereafter, MSV shall direct Contractor pursuant to Article 15.1 as to how to proceed with any required or desired repairs or storage, except where such Terminated Ignition results from an action on the part of the Contractor, in which case such repairs and storage shall be at Contractor’s expense.

In the event of a Terminated Ignition, after Contractor re-acquires title and risk of loss to the Satellite pursuant to this Article 11.1, the applicable provisions (in accordance with industry standards) of Article 9.1.4 shall apply except as to any damage to the Satellite that may have occurred as a result of the Intentional Ignition followed by Terminated Ignition, the costs of which shall be the responsibility of MSV.

11.2 Deliverable Items Other Than Satellites

Title (free and clear of all Contractor-incurred liens and subcontractor-incurred liens and encumbrances of any kind) and risk of loss of, or damage to, each Deliverable Item (other than Satellites), shall pass from Contractor to MSV upon Acceptance of such Deliverable Item (other than Satellites), pursuant to Articles 10.2 and 10.4. MSV’s rights in Deliverable Data are as set forth in Article 30.

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11.3 Security Interest

[***REDACTED***]

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ARTICLE 12 - ORBITAL PERFORMANCE INCENTIVES

12.1.1 IOT Threshold Requirements

[***REDACTED***]

12.1.2 Continuing Threshold Requirements

[***REDACTED***]

12.1.3 Daily Rate of Orbital Performance Incentives

[***REDACTED***].

12.1.4 Extended Life Orbital Performance Incentives

[***REDACTED***]

12.1.5 Liquidated Damages Earnback Incentives

[***REDACTED***]

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12.1.6 Temporary Outages

[***REDACTED***]

12.1.7 Total Loss of a Satellite

[***REDACTED***]

12.1.8 Losses Attributable to MSV

[***REDACTED***]

12.1.9 Access to In-Orbit Data and Measurements

[***REDACTED***].

12.2 Payment and Interest

12.2.1 Payment of Orbital Performance Incentives

[***REDACTED***]

12.2.2 Interest on Orbital Performance Incentives

[***REDACTED***]

12.3 Storage

[***REDACTED***].

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ARTICLE 13 - CORRECTIVE MEASURES IN SATELLITES AND OTHER DELIVERABLE ITEMS

13.1.1 Contractor shall advise Customer as soon as practicable by telephone and confirm in writing any event, circumstance, or development that materially threatens the quality of any Deliverable Items or component parts thereof, including any Satellite, or threatens the Delivery Schedule or Milestone Dates.

13.1.2 Without limiting the generality of the foregoing, if the data available from any commercial satellite manufactured by Contractor or from other satellites of a similar class shows that any Satellite contains a defect, Contractor shall promptly, at its own cost and expense, (i) inform Customer in writing of such defect and (ii) correct such defect in the Deliverable Item, notwithstanding that a payment may have been made in respect thereof, and regardless of prior reviews, inspections, approvals, or acceptances.

13.1.3 At Contractor’s cost and expense, Contractor shall use reasonable efforts to correct any such defect in any Launched Satellite delivered in-orbit hereunder, to the greatest extent that such defect may be corrected by on-ground means, including transmission by Contractor of commands to such Satellite(s), to eliminate or mitigate any adverse impact resulting from any such defect, to establish work-around solutions, or to otherwise resolve such defect. Contractor’s costs and expenses shall be limited to [***REDACTED***] in the aggregate per SBN for all such corrections. Contractor shall coordinate and consult with MSV concerning such on-ground resolution of defects in Launched Satellites.

13.1.4 Contractor shall fulfill the foregoing obligations at its own cost and expense, including all costs arising from charges for packaging, shipping, insurance, taxes, and other matters associated with the corrective measures, unless it is reasonably determined after investigation that MSV directly caused the defect in question, in which case MSV shall pay all such costs.

13.2 Satellite Anomalies

Contractor shall investigate any Satellite Anomaly in any Satellite arising during at a minimum the Satellite Stated Life of the Satellite, and for any period during which Contractor is entitled to earn performance incentives, and known to it or as notified in writing by MSV and shall undertake Satellite Anomaly resolution support Services in accordance with Exhibit A, L-Band Space Based Network Statement of Work. [***REDACTED***]

13.3 MSV Satellite Program Performance

In the event that the Hybrid Network does not provide the functionality and performance required by MSV, notwithstanding the absence of defects by Contractor in the Deliverable Items and Services, Contractor shall cooperate with MSV to implement, on an accelerated basis, adjustments and modifications to the design and production of the Deliverable Items, as feasible, to achieve the required functionality and performance in the most expeditious and cost-effective manner. The parties shall negotiate a change to the Contract pursuant to Article 15, Changes, for the performance of such activities.

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ARTICLE 14 - WARRANTY

14.1 Mutual Warranties of Organization; Good Standing, Qualification and Authorization

Each party represents and warrants that:

A. it is a corporation duly organized, validly existing and in good standing under the laws of Delaware (as Contractor’s representation only), and it is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware (as MSV’s representation only);

B. it has all requisite power and authority to own and operate its material properties and assets and to carry on its respective business as now conducted in all material respects;

C. it is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its performance under this Contract;

D. it has all requisite corporate or as applicable limited partnership power and authority to enter into this Contract and to carry out the transactions contemplated by this Contract;

E. the execution, delivery, and performance of this Contract and the consummation of the transactions contemplated by this Contract have been duly authorized by the requisite corporate action of Contractor and do not conflict with any other agreement or obligation to which it is a party or which binds its assets; and

F. this Contract is a valid and binding obligation of Contractor, enforceable in accordance with its terms.

14.2 Warranties for Deliverable Items

14.2.1 Satellites

Contractor warrants that, prior to Intentional Ignition, each Satellite to be delivered under this Contract shall be manufactured and will perform in conformity with Exhibit B, Technical Requirements for MSV L-Band Space Based Network, and be free from defects for three (3) years after the SPSR, or in the case of batteries, two (2) years after SPSR. After Intentional Ignition, unless and to the extent of a Terminated Ignition, Customer’s exclusive remedy for Satellite performance shall be limited to Contractor’s performance of its obligations under Article 13 and the withholding of Orbital Performance Incentive Payments in accordance with Article 12.

14.2.2 Deliverable Items of Hardware Other Than Satellites and all Software

Contractor warrants that each Deliverable Item of hardware other than the Satellites and all software delivered under this Contract shall be manufactured and developed in conformity with the Performance Specification applicable to such Deliverable Item and will be free from defects in materials and workmanship during the period commencing on the date of SBN Acceptance and ending on the second anniversary thereof (the “Warranty Period”).

A. During the period specified in Article 14.2.2 for any Deliverable Item of hardware other than a Satellite and all software, any non-conformance or defect discovered in such Deliverable

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Item and notified to Contractor shall be remedied by Contractor at Contractor’s expense by repair or replacement of the defective component (at Contractor’s election). For any such Deliverable Item, Contractor shall determine if correction, repair or replacement is required to be performed at Contractor’s plant. If required, MSV shall ship to Contractor’s designated facility any such Deliverable Item. Contractor shall be responsible for the cost of shipment (including transportation and transit insurance) of any such Deliverable Item to such facility, and the cost of packing and return shipment (including transportation and transit insurance) of any such Deliverable Item once repaired or replaced to MSV at the location designated by MSV. Risk of loss for such Deliverable Item shall transfer to Contractor upon delivery by MSV of such Deliverable Item to the shipping carrier by MSV, and risk of loss shall transfer to MSV for any such Deliverable Item once repaired or replaced pursuant to this Article 14.2.2(A) upon receipt thereof by MSV at the location designated by MSV. If returning a component for repair is not commercially practical, Contractor shall repair the defective component on site, at Contractor’s expense, including travel expenses. Contractor represents, warrants, and covenants that all equipment comprising the Deliverable Items shall be new, except to the extent that Contractor re-works, re-manufactures or replaces components or parts during the course of the program in accordance with Exhibit G and in accordance with Contractor’s quality assurance practices. Following the Initial Operations Period, Contractor shall, at MSV’s option and renewable on an annual basis, provide an extended warranty for the Ground Segment and/or components. If Contractor fails or is unable to repair or replace such non-conforming or defective component within a reasonable period of time after notification from MSV, MSV may, by contract or otherwise, repair or replace such non-conforming or defective component and Contractor shall be liable for the reasonable cost thereof.

B. Any item or any component corrected, repaired or replaced under warranty shall be warranted on the terms of this Article for the longer of ninety (90) days or the duration of the warranty of the original item or component.

C. If, during the Warranty Period, Contractor is required to repair a particular component or subassembly of the Ground Segment more than three (3) times in any rolling 12-month period, Contractor shall replace such defective component or subassembly in its entirety at no charge.

14.2.3 Spare Parts

Contractor shall provide MSV with a plan for maintaining Spare Parts, including a list of all mission-critical replacement level parts. Such plan shall take into account delivery times for limited source and long-lead items. MSV has the option to purchase the Spare Parts inventory in accordance with the list attached as Exhibit L pursuant to Article 2.2.9. If MSV purchases the Spare Parts inventory in Exhibit L, at the end of the Initial Operations Period, the Spare Parts inventory shall be fully-replenished by Contractor. Any Spare Part purchased shall be warranted in accordance with this Article for a period of one (1) year from the later of (i) the date of delivery to MSV or (ii) SBN Acceptance.

14.2.4 Software Warranty

Contractor shall deliver Software free of material defects. In addition to the general warranty set forth in Article 14.2.2, through the Initial Operations Period, Contractor shall correct material software errors and bugs, and provide any patches and updates to bring the software in conformance with Exhibit A, L-Band Space Based Network Statement of Work, and applicable Performance Specifications (collectively, “Software Corrections”), and Contractor shall make upgrades, enhancements and releases (collectively, "Software Updates") available to MSV at a commercially

45

reasonable price. Such Software Corrections and Software Updates shall be tested to bring the software in conformance with the Performance Specifications prior to release. Without limiting Contractor’s warranty obligations, to the extent that Contractor has been given the right within its agreements, Contractor shall pass through to MSV the benefits of any warranties to which Contractor is entitled to by virtue of Contractor’s purchase of ground software from the manufacturers, lessors or licensors of such items. Following the Initial Operations Period, Contractor shall, at MSV’s option, and renewable on an annual basis, perform software warranty services.

14.2.5 No Virus

Contractor represents and warrants that (i) it shall ensure that no Viruses are coded or introduced into the Work; (ii) it shall not introduce into the Work any code that would have the effect of disabling or otherwise shutting down all or any portion of the Work; and (iii) it shall not develop, or seek to gain access to the Work through, any special programming devices or methods, including trapdoors or backdoors, to bypass any MSV security measures protecting the Work. If a Virus is present in the Ground Segment at Acceptance, or upon delivery of an update or item replaced during the warranty period, or at any time during the Initial Operations Period, Contractor shall remove the Virus, assist MSV in reducing the effects of the Virus, and assist MSV with mitigating and restoring any such losses of operational efficiency or data that arise as a result of Virus, all at Contractor’s expense. In no event shall Contractor invoke any disabling code at any time, including upon expiration or termination of the Contract (in whole or in part) for any reason, without MSV’s prior written consent.

14.2.6 Training and Services

Contractor warrants that the Training and other Services it provides to MSV pursuant to this Contract will conform to the highest professional standards of the commercial aerospace and satellite communications industry practice for work similar in type, scope, and complexity to the Work.

14.2.7 Deliverable Data

All Deliverable Data shall be complete, correct and up to date, and shall otherwise conform with the requirements of this Contract.

14.2.9 Title

Contractor represents and warrants it shall provide good and salable in commerce title, free and clear of any liens, security interest, claims or any other encumbrances of any kind, at the time title passes to MSV pursuant to Article 11 (Title and Risk of Loss).

14.2.10 Intellectual Property

Contractor represents, to the best of its knowledge, that (i) it is either the owner of, or authorized to use and incorporate, any Intellectual Property utilized or incorporated in any Deliverable Item or the manufacture of any Deliverable Item; and (ii) neither the Work nor any Intellectual Property (other than MSV’s Intellectual Property) utilized or incorporated in any Deliverable Item or the manufacture of any Deliverable Item shall infringe any Intellectual Property Right of any third party, provided that Contractor makes no representations as to infringement with respect to any software or item that is (i) used or combined with any other software or other items not provided, recommended, or approved by Contractor, its suppliers or subcontractors, or (ii) modified by MSV for its subcontractors (other than Contractor) when, in

46

each case, the infringement would have not occurred but for such combination, use, or modification, unless such combination, use or modification was intended. As of EDC, Contractor is not aware of any claim or potential claim to the contrary by any third party. Customer shall not be required to pay any license fees or royalties apart from those included in the Firm Fixed Price for use of any Intellectual Property utilized or incorporated in any Deliverable Item or the manufacture of any Deliverable Item.

14.2.11 Expeditious Remediation

Contractor shall perform its obligation under this Article with respect to the SBNs in an expeditious manner so as to minimize any interruption or risk of interruption to the functioning of the Hybrid Network.

14.2.12 Pass-Through Warranties

In addition to the warranties set forth in this Article 14.2, to the extent Contractor has any rights or is the beneficiary of any warranties or representations from any third party with respect to any Deliverable Items, Contractor shall assign such rights and benefits to MSV; provided, however, if such assignment is prohibited under the agreement between Contractor and such third party, MSV shall be deemed to be a third party beneficiary of any such agreements.

14.2.13 Disclaimer

EXCEPT AND TO THE EXTENT EXPRESSLY PROVIDED IN THIS ARTICLE 14.2, CONTRACTOR HAS NOT MADE NOR DOES IT HEREBY MAKE ANY REPRESENTATION OR WARRANTY, WHETHER WRITTEN OR ORAL, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH REGARD TO ANY SATELLITE OR ANY OTHER DELIVERABLE ITEM.

14.3 Use Conditions Not Covered by Warranty

With respect to Deliverable Items of hardware other than the Satellites, the warranty under this Article 14 shall not apply to the extent a repair or parts replacement is required as a result of the unauthorized alteration or modification or with respect to defects resulting from MSV’s (or its designee’s) improper handling, storage, operation or installation, except, in all of the foregoing cases, when caused, authorized or directed by Contractor. The warranty provided pursuant to this Article 14 is conditioned upon Contractor being given access, if required, to Deliverable Items delivered at MSV’s facility in order to effect any repair or replacement thereof. [***REDACTED***]

14.4 Quality Assurance

Contractor shall maintain compliance with the ISO 9001 series approach to quality in the performance of all of its obligations under the Contract.

14.5 Post-Warranty Support

Contractor shall use commercially reasonable efforts to ensure that software support and spare parts may be procured for the Ground Segment and ground-based components of the Space Segment for the duration of its expected life. After the Initial Operations Period and at MSV’s request, Contractor shall sell additional spare parts (those not included in the then-current replenished spare parts inventory) to MSV and/or its Service Providers on commercially reasonable terms and prices.

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14.6 Source Code Escrow

To the extent that it has the right to do so, and to the extent that such source code is MSV specific, Contractor shall place such code version of software licensed to MSV and necessary for use in the operations and maintenance of the SBN in escrow, at MSV’s expense, for release to MSV (or its designee) upon the failure of Contractor to maintain and support the software as set forth in the Contract or in the event of the insolvency or bankruptcy of Contractor. Notwithstanding the foregoing, any Termination for Default, Termination for Convenience or any Breach shall not give rise to enabling MSV to access any such source code.

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ARTICLE 15 - CHANGES

15.1 Changes Requested by MSV

15.1.1 Scope

MSV may, in writing, request a change in the Work within the general scope of this Contract to:

A. Order work in addition to the Work provided for herein; or

B. Modify the whole or any part of the Work provided for herein; or

C. Direct stop Work, by one or more orders, up to an aggregate of eighteen (18) months.

15.1.2 Response to Change Request

1) Contractor shall respond in writing to any such requested change within thirty (30) days after receipt of such requested change, unless the change request is designated as “urgent” by MSV, in which case Contractor shall respond within seven (7) days after its receipt of such change request. In the case of a stop Work direction, Contractor shall stop Work immediately to the extent specified by MSV. If such change request causes an increase or decrease in the cost or the time required for completion of the Work to be provided, or otherwise affects any other provision of this Contract, such response shall provide a non-binding preliminary estimate of the impact of the change request on the Firm Fixed Price (including costs associated with processing of the change request), Delivery Schedule and other provisions of this Contract. Contractor shall use commercially reasonable efforts to propose and perform the changed Work in a manner that mitigates MSV’s costs and any Delivery Schedule delays. [***REDACTED***]

Changes required by the obsolescence of components of the Ground Segment prior to delivery shall be made by Contractor at Contractor’s cost and expense. If MSV desires to proceed with the change after receipt of Contractor’s preliminary estimate, MSV and Contractor shall cooperate and negotiate in good faith and agree in a timely manner to equitable adjustments in the Firm Fixed Price, Delivery Schedule and other affected provisions of this Contract, and this Contract shall be amended in writing accordingly in accordance with Article 35.5. In the event the Parties fail to agree on an adjustment (upward or downward) to the Firm Fixed Price, Delivery Schedule or other affected provisions of this Contract with respect to a requested change, then MSV may direct Contractor to proceed with the requested change, in which case, Contractor shall proceed with the directed change. The Parties shall continue to negotiate the adjustments to the Contract, and pending completion of such negotiations and as a condition for Contractor being obligated to proceed with the directed change, the Parties in good faith shall agree upon and establish a reasonable payment schedule adjustment to compensate Contractor for the Work performed pursuant to the directed change, which payment schedule shall be adjusted as part of the negotiated settlement for the directed change. [***REDACTED***].

15.1.3 Mitigation of Stop Work Costs

Contractor shall use commercially reasonable efforts to require its subcontractors with Major Subcontracts to agree to a stop Work provision that minimizes Contractor’s costs and is

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consistent with the terms of this Article 15.1. In the event of a stop Work, Contractor shall use commercially reasonable efforts to mitigate costs and shall cooperate in good faith with MSV in connection with actions taken by Contractor with respect to its subcontractors.

15.1.4 Tolling of Payments

Notwithstanding the foregoing, in the event MSV directs a stop Work, all payments due Contractor (except for payments due and payable prior to the date of the stop Work order) shall be tolled and shall not accrue for the duration of the stop Work order (up to the cumulative maximum period provided in Article 15.1.1 above). If after issuing a stop Work order, MSV directs Contractor to resume Work, the Delivery Schedule, Price and affected terms of this Contract shall be equitably adjusted due to such Work stoppage pursuant to Article 15.

15.1.5 Contractor Requested Changes

2) Any changes requested by Contractor during the performance of this Contract, including requested waivers and deviations (“Request for Deviation/Waiver” or “RDW”) and Contract Change Notices (“CCN”), within the general scope of this Contract, which will add or delete Work, affect the design of the SBNs, change the method of shipment or packing, or the place or time of Delivery, or will affect any other requirement of this Contract, shall be submitted in writing to MSV thirty (30) days prior to the proposed date of the change. If such Contractor requested change causes an increase or decrease in the total price or other terms of this Contract, Contractor shall submit a proposal to MSV supported by a detailed Cost Basis of Estimate (“BOE”). [***REDACTED***].

MSV shall notify Contractor in writing within fifteen (15) days after receipt of the requested change proposal, whether or not it agrees with and accepts such change. If the change request is designated as “urgent” by Contractor, or is a RDW or CCN, MSV shall respond within seven (7) days after its receipt of such change request. If MSV agrees with and accepts the Contractor requested change, Contractor shall proceed with the performance of the Contract as changed and an amendment to the Contract reflecting the change proposal, shall be issued. If MSV does not agree with such Contractor requested change, or if MSV fails to notify Contractor within the applicable time period, such change shall be deemed rejected. In the event the Parties are unable to reach agreement on such change, or price adjustment, if any, or both, or if the change is rejected, Contractor shall proceed with the performance of the Contract, as unchanged. [***REDACTED***]

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ARTICLE 16 - FORCE MAJEURE

16.1 Definition

Contractor shall not be responsible for late delivery due to a Force Majeure Event. A “Force Majeure Event” shall be any event beyond the reasonable control of Contractor or its suppliers and subcontractors and shall include, but not be limited to: (1) acts of God; (2) acts of a government (including the suspension, withdrawal, or non-renewal of export or import licenses essential to the performance of the Contract, provided that such suspension, withdrawal, or non-renewal is not caused by the failure of Contractor to properly execute its license application responsibilities and/or to comply with applicable law); (3) war and warlike events; (4) catastrophic weather conditions such as floods, tornadoes and typhoons; (5) fire, earthquakes, epidemics, quarantine restrictions; (6) strikes, lockouts and other industrial disputes; and (7) sabotage, riot and embargoes; provided written notice is given to MSV, in writing, within ten (10) Business Days after Contractor’s performance has been impacted by the occurrence of such Force Majeure Event and further provided such Force Majeure Event is not caused by the failure of Contractor or its suppliers or subcontractors to perform their obligations under this Contract. [***REDACTED***] Such notice to be provided by Contractor, as required by the preceding provisions, shall include a detailed description of the portion of the Work known to be affected by such delay. In coordination with MSV and subject to MSV’s prior written approval where reasonably appropriate under the circumstances, Contractor shall use best reasonable efforts to avoid or minimize and/or work around such delay through the implementation of any work-around plans, alternate sources, or other means Contractor may reasonably utilize to minimize a delay in performance of the Work. Contractor shall also provide MSV prompt written notice when the Force Majeure Event appears to have ended.

16.2 Force Majeure Dispute

In the event MSV disputes any Force Majeure Event, MSV shall inform Contractor in writing within ten (10) Business Days from the date of receipt of written notice of the event purportedly constituting the Force Majeure Event and, if the Parties have not resolved the Dispute within ten (10) Business Days of Contractor’s receipt of such written notice from MSV, the Dispute shall be resolved pursuant to Article 23.

16.3 Equitable Adjustments

Upon the occurrence of any Force Majeure Event that causes a delay in Contractor’s performance of its obligations hereunder, an equitable adjustment shall be negotiated in the Delivery Schedule and other portions of this Contract affected by the Force Majeure Event; provided, however, Contractor acknowledges and agrees, there shall be no adjustment to the Firm Fixed Price due to any Force Majeure Event.

16.4 Maximum Force Majeure

[***REDACTED***].

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ARTICLE 17 - MSV RESPONSIBILITIES

17.1 MSV Responsibilities

MSV shall be responsible for its obligations identified in these terms and conditions and in Exhibit A, L-Band Space Based Network Statement of Work. In addition, MSV shall:

(i) obtain launch and in-orbit insurance coverage prior to Launch for both the MSV 1 and MSV 2 Satellites consistent with MSV’s obligations under its existing High Yield debt indenture, including coverage of Contractor and its subcontractors’ operation of the Satellite through handover of the Satellite to MSV. MSV shall obtain from its insurers waivers of any subrogation rights against Contractor or its Affiliates or subcontractors, and shall provide evidence of such waivers to Contractor sixty (60) days prior to Launch of the Satellite and a certificate of such insurance coverage at Contractor’s request. MSV shall provide Contractor with the definitions of Total Loss and partial loss after it has purchased such insurance.

[***REDACTED***]

17.2 MSV’s Delay in Performance

If the performance of all or any part of the Work required of Contractor under this Contract is delayed or interrupted by MSV’s failure to perform its contractual obligations hereunder within the time specified in this Contract (“MSV Delay”), Contractor shall provide MSV written notice of such MSV Delay and the anticipated impact of the MSV Delay, prior to or as soon as reasonably practicable after Contractor’s performance has been impacted by a MSV Delay. Contractor shall be entitled to an equitable adjustment in the Firm Fixed Price and Delivery Schedule and terms affected, after the date such notice is given, by such failure to perform by MSV pursuant to Article 15, Changes. Any adjustment made pursuant to this Article 17 shall be formalized by the execution of an amendment to this Contract in accordance with Articles 15 and 35.5 wherein such adjustments shall be recorded. At MSV’s written request pursuant to Article 15, Contractor shall use best reasonable efforts to avoid or minimize and/or work around any delay resulting from such MSV Delay through the implementation of any work-around plans, alternate sources, or other means Contractor may utilize or expect to utilize to minimize a delay in performance of the Work.

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ARTICLE 18 - LIQUIDATED DAMAGES FOR LATE DELIVERY

18.1 Acknowledgement of MSV Losses

The Parties acknowledge and agree that failure to meet the Delivery Schedule specified in Article 3.1 and failure to achieve SBN Acceptance will cause substantial financial loss or damage being sustained by MSV. The Parties further acknowledge and agree that the following liquidated damages are believed to represent a genuine and reasonable estimate of all losses (including non-productive time and increased cost of money) that would be suffered by MSV by reason of any such delay (which losses would be difficult or impossible to calculate with certainty).

18.2 Liquidated Damages for Late SBN Acceptance

[***REDACTED***]

18.3 Offset

Any amounts due in accordance with this Article 18 shall be, at MSV’s election, either (i) credited to MSV against any outstanding or future invoices hereunder or (ii) paid by Contractor to MSV within thirty (30) days of issuance of an invoice from MSV.

18.4 Remedy

Such damages shall be MSV’s sole remedy and compensation for Contractor delays with respect to late delivery of a Satellite during the time period set forth above; provided, however, MSV retains all rights and remedies under Article 22 regarding termination for default and Article 22.3 regarding termination for excessive force majeure.

18.5 Paid Liquidated Damages Earnback

[***REDACTED***].

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ARTICLE 19 - INTELLECTUAL PROPERTY INDEMNITY

19.1 Indemnification

Contractor, at its own expense, shall defend, indemnify and hold harmless MSV and its Affiliates and their respective directors, officers, employees, shareholders, and agents, from and against any Losses based on, arising from or in connection with any third party claim, suit or allegation that the manufacture of any Deliverable Item or any part thereof or the intended use, lease or sale or offer for sale of any Deliverable Item or any part thereof infringes, in the intended service area, any third party Intellectual Property Right or embodies any misappropriated trade secret (each, an “Intellectual Property Claim”). [***REDACTED***]

19.2 Additional Measures

[***REDACTED***]

19.3 Combinations and Modifications

Contractor shall have no liability under this Article 19 for any Intellectual Property Claim arising solely from: (i) use of any Deliverable Item in combination with other items not provided by Contractor or its suppliers or subcontractors; or (ii) MSV’s modification of the Deliverable Item, except where such modification was made by or for MSV due to Contractor’s failure to perform a contractual obligation.

19.4 Sole Remedies

The remedies set forth in this Article 19 are MSV’s sole and exclusive remedies for or related to any Intellectual Property Claim.

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ARTICLE 20 - GENERAL INDEMNITY

20.1 Contractor’s Indemnity

Contractor, at its own expense, shall defend, indemnify and hold harmless MSV and its Affiliates and their respective directors, officers, employees, shareholders, and agents, from and against any Losses based on, arising from or in connection with any allegations by third parties regarding any of the following: (i) claims for injury to persons or real or tangible personal property damage, but only if and to the extent such Losses were caused by, or resulted from, a negligent act or omission or willful misconduct of Contractor or its employees, subcontractors, agents or representatives and (ii) Contractor’s breach of its obligations under Articles 7, 14, 26, and 29.

20.2 MSV’s Indemnity

MSV, at its own expense, shall defend, indemnify and hold harmless Contractor and its Affiliates, and their respective directors, officers, employees, shareholders and agents, from and against any Losses based on, arising from or in connection with any allegations by third parties regarding any of the following: (i) for claims for injury to persons or real or tangible personal property damage, but only if and to the extent such Losses were caused by, or resulted from, negligent acts or omissions or willful misconduct of MSV or its employees or representatives and (ii) MSV’s breach of its obligations under Articles 7, 26, and 29.

20.3 Conditions to Indemnification

The right to any indemnity set forth in this Contract shall be subject to the following conditions:

20.3.1 Notice

The Party seeking indemnification (the “Indemnified Party”) shall promptly advise the other Party (the “Indemnifying Party”) in writing of the filing of any suit or of any written or oral claim for which it seeks indemnification upon receipt thereof and shall provide the Indemnifying Party, at its written request, with copies of all documentation relevant to such suit or claim. Failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of its obligations under this Contract except to the extent it can demonstrate that it was prejudiced by such failure. Within fifteen (15) days following receipt of written notice from the Indemnified Party, but no later than a reasonable time before the date on which any response to a complaint or summons is due, the Indemnifying Party shall notify the Indemnified Party in writing if the Indemnifying Party elects to assume control of the defense or settlement of that claim (a “Notice of Election”).

20.3.2 Control of Action

If the Indemnifying Party delivers a Notice of Election relating to any claim within the required notice period, so long as it is actively defending such claim, the Indemnifying Party shall be entitled to have sole control over the defense and settlement of such claim; provided that (i) the Indemnified Party shall be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim; (ii) where the Indemnified Party is so represented, the Indemnifying Party shall keep counsel of the Indemnified Party informed of each step in the handling of any such claim; and (iii) the Indemnified Party shall provide, at the Indemnifying Party's request and expense, such assistance and information as is available to the Indemnified Party for the defense and settlement of such claim and (iv) the Indemnifying Party shall obtain the indemnified Party’s approval, which shall not be unreasonably withheld, before entering into any non-monetary settlement of such claim or ceasing to defend against such claim.

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20.3.3 Right of Indemnified Party to Defend/Settle

If the Indemnifying Party does not deliver a Notice of Election relating to any claim within the required notice period or fails actively to defend such claim, the Indemnified Party shall have the right to defend and/or settle the claim in such manner as it may deem appropriate, at the cost and expense of the Indemnifying Party. Provided that the Indemnified Party acts in good faith, it may settle such claim on any terms it considers appropriate under the circumstances without in any way affecting its right to be indemnified hereunder. The Indemnifying Party shall promptly reimburse the Indemnified Party for all such costs and expenses.

20.4 Waiver of Subrogation

Each Party shall obtain a waiver of subrogation and release of any right of recovery against the other Party and its Affiliates, contractors and subcontractors at any tier (including suppliers of any kind) and their respective directors, officers, employees, shareholders and agents, that are involved in the performance of this Contract from any insurer providing coverage for the risks such Party has agreed to indemnify against under this Article 20.

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ARTICLE 21 - TERMINATION FOR CONVENIENCE

21.1 Right to Terminate

MSV may terminate this Contract without cause, in whole or in part, by giving Contractor written notice; provided, however, MSV may not terminate this Contract as to a Satellite after the SPSR of such Satellite. In the event of such termination, Contractor will cease Work as directed in the termination notice.

21.2 Termination Liability

21.2.1 Termination in Whole or of an Entire SBN

[***REDACTED***]

21.2.2 Partial Termination of an SBN

In the event MSV terminates work under this Contract with respect to only a portion of an SBN (including the Space Segment portion, or one or more gateways related to a Ground Segment), pursuant to this Article 21.2.2 (“Termination in Part”) and is termination other than termination of an entire SBN (addressed in Article 21.2.1), such termination shall be treated as a change pursuant to Article 15.

21.2.4 Maximum Liability

[***REDACTED***].

21.2.5 Total Discharge

Payment of the amount payable by MSV to Contractor pursuant to Articles 21.2.1 or 21.2.2, as applicable, shall constitute a total discharge of MSV’s liability to Contractor for termination pursuant to this Article 21.

21.3 Disposition of Work

Upon payment by MSV to Contractor of the termination liability amounts due under Article 21.2, MSV may:

(i) require Contractor to transfer title and risk of loss to MSV to all or any part of the Deliverable Items terminated (including any associated Work-in-Process and Finished Goods) and Contractor shall, upon direction of MSV, protect and preserve property at MSV’s expense in the possession of Contractor or its subcontractors in which MSV has an interest and shall facilitate access to and possession by MSV of items comprising all or part of the Work terminated; or

(ii) require Contractor to make a reasonable, good faith effort to sell such items and to remit any sales proceeds to MSV less a deduction for actual costs of disposition reasonably incurred; provided that to the extent Contractor’s compliance with this Article 21.3(ii) requires governmental approvals and Contractor cannot, with the exercise of commercially reasonable efforts, procure such approvals, Contractor shall be excused from performing its obligations under this Article 21.3(ii).

21.4 Contractor Responsibilities

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In the event of a termination under this Article 21, Contractor shall take all commercially reasonable actions to mitigate its costs of termination and shall:

A. place no further orders or subcontracts for materials, services, or facilities to the extent they relate to the performance of the terminated Work;

B. terminate orders and subcontracts to the extent they relate to the performance of the terminated Work;

C. settle all outstanding liabilities and all claims arising out of such termination of orders and subcontracts for materials, services, or facilities; and

D. take such action as may be reasonably necessary for the protection and preservation of the property related to this Contract that is in the possession of Contractor or any subcontractor and in which MSV has or may acquire an interest.

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ARTICLE 22 - TERMINATION FOR DEFAULT, EXCESSIVE FORCE MAJEURE

22.1 MSV Right of Termination

22.1.1 Right to Terminate

[***REDACTED***].

22.1.2 Termination Liability

[***REDACTED***]

22.1.3 Contractor’s Reimbursement for MSV-Retained Work

[***REDACTED***]

22.1.4 Invalid Default Termination

If, after termination pursuant to this Article 22.1, it is finally determined pursuant to Article 23 or written agreement of MSV that Contractor was not in default under Article 22.1.1, or that the default was excusable under Articles 16 or 17, the rights and obligations of the Parties shall be the same as if the termination had occurred under Article 21.

22.1.5 No Termination Rights

In no event shall MSV have the right to terminate the Contract for default in whole after Acceptance of a SBN. Further, in no event shall MSV have the right to terminate the Contract for default for one of the SBNs if there is Total Loss or partial loss of the Satellite associated with the particular SBN at or after Launch of such Satellite.

22.2 Contractor Right of Termination

22.2.1 Right to Terminate

[***REDACTED***]

22.2.2 Termination Liability

In the event of termination pursuant to this Article 22.2, Contractor shall be paid as if such termination were for convenience pursuant to Article 21, plus any late payment interest due pursuant to Article 5.3. Payment of any amount by any Financing Entity on behalf of MSV shall relieve MSV from its obligation to make such payment in the corresponding amount. Payment of the total amounts (termination for convenience amounts plus interest on outstanding invoices) payable by MSV pursuant to this Article 22.2.2 shall constitute a total discharge of MSV’s liabilities to Contractor for termination pursuant to this Article 22.2.

22.2.3 Disposition of the Work

Upon completion of all payments to Contractor in accordance with Article 22.2.2, MSV may require Contractor to transfer title and risk of loss to MSV to such Deliverable Items, Work-in-Process and Finished Goods. In lieu of taking immediate possession of Deliverable Items, Work-in-Process and Finished Goods as provided in the preceding sentence, upon direction of MSV, Contractor shall protect and preserve Deliverable Items, Work-in-Process and Finished Goods at MSV’s expense and shall facilitate access to and possession by MSV to such Deliverable Items, Work-in-Process and Finished Goods. Alternatively, MSV may request Contractor to make a reasonable, good faith effort to sell such items and to remit any sales

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proceeds to MSV less a deduction for actual costs of disposition reasonably incurred. To the extent Contractor’s compliance with this Article 22.2.3 requires governmental approvals and Contractor cannot, with the exercise of commercially reasonable efforts, procure such approvals, Contractor shall be excused from performing its obligations under this Article 22.2.3. Contractor shall be entitled to retain possession and title to the Deliverable Items and Work-in-Process and Finished Goods in its possession unless and until all payments due Contractor are paid under the Contract as a result of the termination by Contractor. If MSV fails to pay the undisputed amounts due Contractor, after an additional sixty (60) days cure period, Contractor may use or dispose of Deliverable Items and Work-in- Process and Finished Goods in any manner Contractor may elect. In such case, the fair market value of any Deliverable Items, Work-in-Process and Finished Goods used or disposed of by Contractor shall be set-off against MSV’s termination liability under Article 22.2.2.

22.2.4 Contractor Responsibilities

In the event of a termination under this Article 22.2, Contractor shall comply with the requirements of Article 21.4.

22.3 Excessive Force Majeure

22.3.1 [***REDACTED***]

22.3.2 [***REDACTED***].

22.3.3 [***REDACTED***].

22.4 Termination Assistance

[***REDACTED***].

22.5 Limitation on Right to Terminate

Except as specified in this Contract, neither Party shall have any right to terminate or suspend this Contract.

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ARTICLE 23 - DISPUTE RESOLUTION

Any dispute, claim, or controversy between the Parties arising out of or relating to this Contract (“Dispute”), including any Dispute with respect to the interpretation, performance, termination, or breach of this Contract or any provision thereof shall be resolved as provided in this Article 23.

23.1 Informal Dispute Resolution

Prior to the initiation of formal Dispute resolution procedures, the Parties shall first attempt to resolve their Dispute informally, in a timely and cost-effective manner, as follows:

A. If, during the course of the Work, a Party believes it has a Dispute with the other Party, the disputing Party shall give written notice thereof, which notice will describe the Dispute and may recommend corrective action to be taken by the other Party. Contractor Program Manager shall promptly consult with MSV Contract Manager in an effort to reach an agreement to resolve the Dispute.

B. In the event agreement cannot be reached within ten (10) days of receipt of written notice, either Party may request the Dispute be escalated, and the respective positions of the Parties shall be forwarded to an executive level higher than that under (A) above for resolution of the Dispute.

C. In the event agreement cannot be reached within twenty (20) days of receipt of written notice, either Party may request the Dispute be escalated, and the respective positions of the Parties shall be forwarded to the Chief Executive Officer (CEO) of MSV and the Vice President, Boeing Satellite Systems, Inc. for resolution of the Dispute.

D. In the event agreement cannot be reached under paragraphs A – C of this Article 23.1 within a total of thirty (30) days after receipt of the written notice described in Article 23.1(A), such dispute shall, at the request of either Party, be referred to a mediator or mediation panel jointly selected by the Parties for mediation and conciliation. If the Parties are unable to agree on a mediator or mediation panel within five (5) days following such request, the provisions of Article 23.2 shall apply.

The mediation and conciliation shall be without prejudice and non-binding. Any evidence given or statements made in the course of the mediation and conciliation may not be used against a Party in any other proceedings.

The cost of mediation and conciliation shall be shared equally by the Parties. Each Party shall bear the cost of preparing and presenting its own case.

23.2 Litigation

If the Parties are unable to resolve the dispute as a result of such mediation and conciliation, or if neither Party desires to pursue mediation and conciliation, such dispute may be referred on the application of either Party for final determination in the United States District Court for the Southern District of New York, and the Parties hereby waive any objection to that venue and that court’s exercise of personal jurisdiction over the case; provided further that if, for any reason, such court does not have or refuses to exercise subject matter jurisdiction over the Dispute, then litigation as permitted herein may be brought in the Supreme Court for New York County. The Parties hereby irrevocably consent to the exercise of personal jurisdiction by the

61

state and federal courts in the State of New York concerning any Dispute between the Parties. If, for any reason, neither the state nor federal courts in New York will exercise jurisdiction over the Dispute, then litigation as permitted herein may be brought in any court of competent jurisdiction in the United States of America.

23.2.3 Choice of Laws

In resolving any Dispute the laws of the State of New York shall apply, without reference to its conflicts of laws rules, and shall take into account usages, customs and practices in the performance of contracts for the purchase and sale of commercial communications satellites.

23.2.4 Costs and Expenses

Each Party shall bear its own costs and expenses.

23.4 Continued Performance

Unless the Dispute involves a termination of the Contract under Articles 21 or 22.1: (i) pending final resolution of any Dispute, each Party shall, unless directed otherwise by the other Party in writing, perform all its obligations under this Contract to the extent undisputed and practical to do so, including the obligation to take all steps necessary during the tendency of the Dispute to ensure the Work will be performed within the time stipulated or within such extended time as may be allowed under this Contract; and (ii) failure to pay disputed amounts shall not excuse failure to so perform the Work.

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ARTICLE 24 - INTER-PARTY WAIVER OF LIABILITY FOR A LAUNCH

24.1 Launch Services Agreement Inter-Party Waiver of Liability

24.1.1 Inter-Party Waiver

Each Party hereby agrees to be bound by the no-fault, no-subrogation inter-party waiver of liability and related indemnity provisions required by the Launch Services Agreement with respect to each Launch and to cause their respective contractors and subcontractors at any tier (including suppliers of any kind) that are involved in the performance of Launch Support Services under this Contract and any other person having an interest in any Satellite (including non-consumer customers of MSV) to accede to such waiver and indemnity, which in every case shall include claims against the Launch Agency, either Party and their respective contractors and subcontractors at any tier (including suppliers of any kind) that are involved in the performance of this Contract. The Parties shall execute and deliver any instrument that may be reasonably required by the Launch Agency to evidence their respective agreements to be bound by such waivers.

24.1.2 Waiver of Subrogation

The Parties also shall obtain from their respective insurers, and shall require their respective contractors and subcontractors at any tier (including suppliers of any kind) that are involved in the performance of Launch Support Services under this Contract and any other person having an interest in any Satellite (including non-consumer customers of MSV to obtain from their respective insurers, an express waiver of such insurers' rights of subrogation with respect to any and all claims that have been waived pursuant to this Article 24.

24.2 Indemnity Related to the Inter-Party Waiver of Liability

Each Party shall indemnify against and hold harmless the other Party and its contractors and subcontractors at any tier (including suppliers of any kind) that are involved in the performance of this Contract, from and against any claim made by the Indemnifying Party or any of its contractors and subcontractors (including suppliers of any kind) that are involved in the performance of the Contract, or by any person having an interest in any Satellite (including non-consumer customers of MSV), or by insurer(s) identified in Article 24.1, resulting from the failure of the Indemnifying Party to waive any liability against, or to cause any other person the Indemnifying Party is obligated to cause to waive any liability against, the Launch Agency, the other Party or either of their contractors and subcontractors at any tier (including suppliers of any kind) involved in the performance of this Contract. The Parties shall execute and deliver any instrument that may be reasonably required by the Launch Agency to evidence their respective agreements to be bound by such indemnifications.

24.3 Survival of Obligations

The waiver, indemnification and hold harmless obligations provided in this Article 24 shall survive and remain in full force and effect, notwithstanding the expiration or termination of this Contract.

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ARTICLE 25 - MAJOR SUBCONTRACTS

25.1 Selection of Major Subcontractors

Selection of any Major Subcontractor, whether as an initial selection or as a replacement selection, shall be subject to MSV’s prior written approval. Contractor shall provide MSV with a copy of the full text of any Major Subcontract (including technical content but excluding price payment schedule, or other financial data) promptly upon execution thereof. The Major Subcontractors identified below are approved by MSV:

ViaSat	GBBF
[***REDACTED***]

MSV’s approval of any Major Subcontractor or subcontractor shall not relieve Contractor from any obligations or responsibilities under this Contract.

25.2 Step-In Payment Rights

Contractor shall notify MSV within five (5) business days of it becoming aware of the occurrence of an event that with or without the passage of time or the giving of notice, or both, would give rise to a right of termination or a right to receive damages or a payment of penalties under any of the Contractor’s Major Subcontracts that Contractor is not then disputing, in good faith, with such subcontractor (a “Default”). MSV shall have the right (but not the obligation) to cure any such Default, including by making any payment due thereunder. The Firm Fixed Price shall be reduced by the amount of the cost to cure such Default paid by MSV pursuant to the preceding sentence. Such reduction in the Firm Fixed Price shall be applied against and used to reduce the next payment due to Contractor under the Payment Plan (which shall be adjusted accordingly). No action on the part of MSV under this Article shall relieve Contractor from any obligations or responsibilities under this Contract or the Major Subcontract.

25.3 No Privity of Contract

Nothing in this Contract shall be construed as creating any contractual relationship between MSV and any subcontractor. Contractor is fully responsible to Customer for the acts or omissions of subcontractors and all persons used by Contractor or a subcontractor in connection with performance of the Work. Any failure by a subcontractor to meet its obligations to Contractor shall not constitute a basis for Force Majeure Event, except as provided in Article 16 (Force Majeure), and shall not relieve Contractor from meeting any of its obligations under this Contract.

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ARTICLE 26 - CONTRACTOR INSURANCE REQUIREMENTS

26.1 Insurance Requirements

26.1.1 Coverages

Contractor represents that it has procured and will maintain at all times during its performance of this Contract the following insurance coverages:

A. Ground insurance (“Property Insurance”) against all risks and loss or damage to SBN, and to any and all component parts thereof and all materials of whatever nature used or to be used in completing the Work, in an amount not less than the greater of (i) the replacement value of or (ii) the amounts paid by MSV with respect to, the SBN and component parts thereof and all materials of whatever nature used or to be used in completing the Work. Such insurance shall provide (i) coverage for removal of debris, and insuring the structures, machines, equipment, facilities, fixtures, and other properties constituting part of the Work, (ii) transit coverage, including ocean marine coverage (unless insured by the supplier), (iii) off-site coverage covering any key equipment, and (iv) off-site coverage covering any property or equipment not stored on the construction site. [***REDACTED***]

B. Public liability insurance until Launch of each Satellite covering Contractor and all its subcontractors with respect to their performance under this Contract and their liabilities to third parties. [***REDACTED***]Contractor shall maintain such insurance as to each Satellite until Launch of such Satellite.

C. Worker’s compensation insurance, including occupational illness or disease coverage, or other similar social insurance in accordance with the laws of any country, state, or territory exercising jurisdiction over the employee and employer’s liability insurance in an amount not less than [***REDACTED***] per occurrence. Contractor shall maintain such insurance until Acceptance of all Work, including remedial work, has occurred.

D. Comprehensive automobile liability insurance against liability claims for personal injury (including bodily injury and death) and property damage covering all owned, leased, non-owned, and hired vehicles used by Contractor in the performance of the Work. Such insurance shall be for an amount not less than [***REDACTED***] per occurrence for combined bodily injury and property damage. Contractor shall maintain such insurance until Acceptance of all Deliverable Items has occurred.

26.1.2 Additional Insured

MSV, MSV Canada and each Financing Entity shall be named as an additional insured under Contractor’s third-party liability coverages, provided that, with respect to each Financing Entity, such Financing Entity has an insurable interest recognized by the applicable insurance underwriters.

26.1.3 Insurers Rating

The insurers selected by Contractor to provide the insurance required by Article 26.1.1(A) shall have a rating at least as high as those insurers providing coverage on Contractor’s programs for its major commercial customers.

26.1.4 Evidence of Insurance

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Within ten days after EDC, and whenever requested by MSV, Contractor shall produce evidence that the insurance required by Article 26.1.1 has been effected and is being maintained. Contractor shall, at the written request of MSV, provide MSV with a certificate of insurance evidencing the procurement of all required insurance policies and thirty (30) days written notice prior to any modification that diminishes the insurance coverage required hereunder, cancellation, or non-renewal of such policies. If, after being requested in writing by MSV to do so, Contractor fails to produce evidence of compliance with Contractor’s insurance obligations within fourteen (14) days, MSV may effect and maintain the insurance and pay the premiums. The amount paid shall be a debt due from Contractor to MSV and may be offset against any payments due Contractor by MSV. MSV may, at reasonable times upon reasonable notice, inspect any insurance policy required hereunder at Contractor’s offices.

26.1.5 Claims

Contractor shall, as soon as practicable, inform MSV in writing of any occurrence with respect to the Work that may give rise to a claim under a policy of insurance required by Article 26.1.1(A) or (B) above. Contractor shall ensure that its subcontractors similarly inform MSV of any such occurrences through Contractor.

26.1.6 Waiver of Subrogation

Contractor shall require its insurers to waive all rights of subrogation against MSV and MSV’s Affiliates and their respective associates.

26.1.7 Warranty

Contractor warrants and covenants that the insurance coverages and deductibles to be obtained pursuant to this Article 26 are substantially comparable to those provided to Contractor’s major commercial customers.

26.2 Preparation of Claims

Each Party shall provide to the other Party any information in its possession (or otherwise available to it) that may reasonably be required to prepare, present, and substantiate an insurance claim at the other Party’s written request.

Each Party warrants and covenants that it will not intentionally withhold from the other Party any material information it has or will have concerning anomalies, failures, or non-conformances with or deviations from the requirements of this Contract.

Upon written request of a Party, subject to Article 7, the other Party will respond or permit the first Party to respond to any insurers in relation to all specific and reasonable questions relating to design, test, quality control, launch, and orbital information on the Satellite. In addition, in the event of a Launch and In-Orbit Insurance Policy claim, Contractor shall provide the support described in Article 33.2.

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ARTICLE 27 - PERSONNEL AND KEY PERSONNEL

27.1 Personnel Qualifications

Contractor shall ensure that its personnel (including subcontractor personnel) are fully qualified and have in place all the research, development, manufacturing, technological and management skills necessary to perform the Work. If MSV in good faith determines that the continued assignment of any Contractor personnel is not in MSV’s best interest, then MSV shall provide Contractor written notice to that effect requesting that such personnel be replaced. Promptly after receipt of such request, Contractor shall investigate the matters stated in the request and discuss its findings with MSV. If MSV still requests replacement of the personnel, the Contractor shall so replace such personnel with an individual satisfactory to MSVconsistent with the law and Contractor’s policies and procedures.

27.2 Minimizing Turn-Over Rate

[***REDACTED***]

27.3 Key Personnel Positions

Key personnel (“Key Personnel”) shall be the personnel filling the following or equivalent positions:

27.3.1 Contractor Program Director: [***REDACTED***]

27.3.2 Spacecraft Manager: [***REDACTED***]

27.3.3 Ground Segment Program Manager: [***REDACTED***]

27.3.4 System Engineering, Integration and Test Manager: [***REDACTED***]

27.3.5 Chief Engineer: [***REDACTED***]

27.4 Assignment of Key Personnel

27.4.1 Qualifications.

Contractor will assign individuals from within Contractor's organization to the Key Personnel positions to carry out the Work. Key Personnel will be familiar with programs similar to MSV’s program.

27.4.2 Review and Approval

[***REDACTED***].

27.4.3 Commitment to Program

[***REDACTED***]

27.5 Executive Quarterly Management Review Meetings

Contractor shall cause the Vice President of Boeing Satellite Systems, Inc. to attend the Quarterly Management Review meetings described in Exhibit A. MSV shall cause the Chief Operating Officer or higher officer to attend such meetings.

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ARTICLE 28 - LIMITATION OF LIABILITY

28.1 Acknowledgment

THE PARTIES TO THIS CONTRACT EXPRESSLY RECOGNIZE THAT COMMERCIAL SPACE VENTURES INVOLVE SUBSTANTIAL RISKS AND RECOGNIZE THE COMMERCIAL NEED TO DEFINE, APPORTION AND LIMIT CONTRACTUALLY ALL OF THE RISKS ASSOCIATED WITH THIS COMMERCIAL SPACE VENTURE. THE PAYMENTS AND OTHER REMEDIES EXPRESSLY SET FORTH IN THIS CONTRACT FULLY REFLECT THE PARTIES’ NEGOTIATIONS, INTENTIONS AND BARGAINED-FOR ALLOCATION OF THE RISKS ASSOCIATED WITH COMMERCIAL SPACE VENTURES.

28.2 Disclaimer

[***REDACTED***]

28.3 No Consequentials

[***REDACTED***].

28.4 Cap on Liability

[***REDACTED***].

28.5 Exceptions

[***REDACTED***].

28.6 Duty to Mitigate

Each Party shall have a duty to mitigate damages for which the other Party is responsible.

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ARTICLE 29 - DISCLOSURE AND HANDLING OF PROPRIETARY INFORMATION

29.1 Definition of Proprietary Information

29.1.1 Definition

For the purpose of this Contract, "Proprietary Information" means all confidential and proprietary information in whatever form transmitted, that is disclosed or made available by such Party (hereinafter referred to as the "disclosing party") to the other Party hereto (hereinafter referred to as the "receiving party") including, in the case of Contractor, Proprietary Information of Contractor’s subcontractors, and: (i) is identified as proprietary by means of a written legend thereon, or (ii) if disclosed orally, is identified as proprietary at the time of initial disclosure and then summarized in a written document, with the Proprietary Information specifically identified, that is supplied to the receiving party within thirty (30) days of initial disclosure. In the case of MSV, Proprietary Information also shall include, whether or not designated “Proprietary Information,” (i) correspondence under this Contract and (ii) all information concerning MSV (and/or its Affiliates) regarding its operations, affairs and businesses, its financial affairs, and its relations with its customers, employees and service providers (including business plans, customer lists, customer information, account information and consumer markets).

29.1.2 Exceptions

Proprietary Information shall not include any information disclosed by a Party that (i) is already known to the receiving party at the time of its disclosure, as evidenced by written records of the receiving party, without an obligation of confidentiality at the time of disclosure; (ii) is or becomes publicly known through no wrongful act of the receiving party; (iii) is independently developed by the receiving party as evidenced by written records of the receiving party; or (iv) is obtained by the receiving party from any third party without restriction and without breach of any confidentiality obligation by such third party.

29.2 Terms for Handling and Use of Proprietary Information

For a period of ten (10) years after the end of the Stated Satellite Life for the last SBN, the receiving party shall not disclose Proprietary Information that it obtains from the disclosing party to any person or entity except (i) its employees, Affiliates, Related Entities and MSV Canada and, in the case of MSV, its attorneys, advisors, officers, directors, agents and consultants who have a need to know, or (ii) any third party (but only the terms and conditions of this Contract and provided such entity is not a satellite manufacturer) in connection with any financing, insurance, transaction or other business relationship where, in both (i) and (ii) such person or entity has been informed of and has agreed in writing (or, in the case of employees, officers, directors or attorneys are otherwise subject to confidentiality obligations consistent with the obligations set forth herein) to abide by the receiving party’s obligations under this Article 29; and (iii) in the case of Contractor, Contractor’s subcontractors who have a need to know for performance of Work subject to confidentiality obligations consistent with the obligations set forth herein. The receiving party shall use not less than the same degree of care to avoid disclosure of such Proprietary Information as it uses for its own Proprietary Information of like importance; but in no event less than a reasonable degree of care. Proprietary Information shall be used only for the purpose of performing the obligations and exercising its rights under this Contract or as the disclosing party otherwise authorizes in writing.

29.3 Legally Required Disclosures

Notwithstanding the foregoing, in the event that the receiving party becomes legally compelled (including disclosures necessary or in good faith determined to be reasonably necessary under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended), to disclose Proprietary Information of the disclosing party, including this Contract or other

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supporting document(s), the receiving party shall, to the extent practicable under the circumstances, provide the disclosing party with written notice thereof so that the disclosing party may seek a protective order or other appropriate remedy, or to allow the disclosing party to redact such portions of the Proprietary Information as the disclosing party deems appropriate. In any such event, the receiving party will disclose only such information as is legally required, and will cooperate with the disclosing party (at the disclosing party’s expense) to obtain proprietary treatment for any Proprietary Information being disclosed.

29.4 Return of Confidential Information

Subject to MSV’s rights under Article 30, upon the request of the Party having proprietary rights to Proprietary Information, the other Party in possession of such Proprietary Information shall promptly return such Proprietary Information (and any copies, extracts, and summaries thereof) to the requesting Party, or, with the requesting Party's written consent, shall promptly destroy such materials (and any copies, extracts, and summaries thereof), except for one (1) copy which may be retained for legal archive purposes, and shall further provide the requesting Party with written confirmation of same; provided, however, where both Parties have proprietary rights in the same Proprietary Information, a Party shall not be required to return such information to the other Party.

29.5 No License

Except as expressly provided in this Contract, nothing in this Contract shall be construed as granting the receiving party whether by implication, estoppel, or otherwise, any license or any right to use any Proprietary Information received from the disclosing party, or use any patent, trademark, or copyright now or hereafter owned or controlled by the disclosing party.

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ARTICLE 30 - INTELLECTUAL PROPERTY RIGHTS

30.1 Ownership of IP and IP Rights

30.1.1 MSV’s Intellectual Property

A. Subject to the licenses granted in Article 30.2.2, all Background and Foreground Intellectual Property made, developed, or created solely by MSV (or by others, other than Contractor or any of its subcontractors, acting on behalf of MSV), and all Intellectual Property Rights therein, shall be the sole and exclusive property of MSV.

[***REDACTED***]

30.1.2 Contractor’s Intellectual Property

A. Subject to the licenses granted in Article 30.2.1, all Background Intellectual Property, developed or created by Contractor (or its subcontractors), and all Intellectual Property Rights therein, shall be the sole and exclusive property of Contractor.

[***REDACTED***]

C. Contractor agrees that the obligations set forth in Article 29.2, subject to the exceptions set forth in Article 29.1.2, shall apply to Contractor with respect to the handling and use of MSV-specific information contained in any Deliverable Data, Contract Exhibits and Attachments thereto, without regard to the time limitation set forth therein.

30.2 License Rights

30.2.1 Grant by Contractor

[***REDACTED***]

30.2.2 Grant by MSV

[***REDACTED***]

30.2.3 Subcontracts

Contractor shall, unless otherwise authorized or directed in writing by MSV, to the extent necessary to fulfill its obligations under this Article 30.2 hereof, use reasonable efforts to include in each Major Subcontract issued hereunder a license rights clause pursuant to which each such subcontractor will grant to MSV (through Contractor) license rights or ownership rights, as applicable, in Intellectual Property incorporated in Deliverable Items hereunder and which Intellectual Property is developed by such subcontractor, and all associated Intellectual Property Rights therein, to the same extent as the license or ownership rights granted by Contractor in this Article 30.2.

30.2.4 Reversion of Licenses [***REDACTED***].

30.3 No Limitation on Deliverable Items

This Article 30 shall not be construed as limiting any right of MSV or Contractor otherwise contained herein or at law with respect to injunctive relief (or any obligation of Contractor to grant MSV the right) with no payment of additional compensation to use, have used, deliver, lease, sell, or otherwise dispose of the Satellite or other Deliverable Item of hardware or any part thereof.

30.4 GBBF Foreground Intellectual Property

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[***REDACTED***]

30.5 Access to Work Product

During the term of this Contract, MSV may at any time request, and Contractor shall promptly provide access to any and all Work product created or performed by Contractor or its Major Subcontractors under this Contract including, but not limited to reports, designs, drawings, tests, results, bills of material, data, software and source code (excluding source code that is Contractor Ground Segment Background IP or that is included in the third party commercial off-the-shelf software). MSV shall bear all reasonable expenses associated with Contractor’s collection of work product in response to a request under this Article 30.5.

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ARTICLE 31 - PUBLIC RELEASE OF INFORMATION

31.1 Generally

Either Party intending to disclose publicly, whether through the issuance of news releases, articles, brochures, advertisements, prepared speeches or other information releases, information concerning this Contract or the Work shall obtain the prior written approval of the other Party with respect to the content and timing of such issuance.

31.2 Exceptions

The obligations set forth in Article 31.1 shall not apply to the following:

A. information that is publicly available from any governmental agency or that is or otherwise becomes publicly available without breach of this Contract; and

B. internal publications or releases which are clearly marked as not intended for the public at large.

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ARTICLE 32 - NOTICES

32.1 Written Notification

Each notice or correspondence required or permitted to be given or made hereunder shall be in writing (except where oral notice is specifically authorized) to the respective addresses, facsimile and telephone numbers and to the attention of the individuals set forth below, and any such notice or correspondence shall be deemed given on the earlier to occur of (i) actual receipt, irrespective of whether sent by post, facsimile transmission or signed letter emailed in Adobe PDF format (followed by mailing of the original copy), overnight courier or other method, and (ii) seven (7) days after mailing by registered or certified mail, return receipt requested, postage prepaid.

In the case of MSV:

MSV LP

10802 Parkridge Boulevard

Reston, VA 20191-2722

Attn: General Counsel

With a copy to:

MSV LP

10802 Parkridge Boulevard

Reston, VA 20191-2722

Attn: Michael Cannice

Director, Contract Administration

Telephone No.: 703-390-2700

Facsimile No.: 703-390-2770

Email: mcannice@msvlp.com

In the case of Contractor:

By U.S. mail:

Boeing Satellite Systems, Inc.

P.O. Box 92919

Los Angeles, CA 90009-2919

By Courier:

Boeing Satellite Systems, Inc.

901 N. Selby Street

El Segundo, CA 90245

In either case:

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Attention:	.Dennis R. Beeson, Sr. Contracts Manager,
	Mail Stop W-S50-X380
	Telephone: (310) 364-5729
	Facsimile: (310) 662-8586
	Email: dennis.beeson@boeing.com

32.2 Change of Address

Either Party may from time to time change its notice address or the persons to be notified by giving the other Party written notice (as provided above) of such new information and the date upon which such change shall become effective.

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ARTICLE 33 - RISK MANAGEMENT SERVICES

33.1 Insurance Procurement

Contractor shall provide customary and normal support to assist MSV in obtaining a Launch and In-Orbit Insurance Policy including (i) providing a comprehensive presentation package on the Satellite, suitable for presentation to the space insurance brokers and underwriters, (ii) supporting MSV with all necessary presentations (oral, written or otherwise), including attendance and participation in such presentations where requested by MSV, (iii) providing on a timely basis all reasonable and appropriate technical information, data and documentation, and (iv) providing documentation and answers to insurer and underwriter inquiries.

33.2 Claims Support

[***REDACTED***].

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ARTICLE 34 - ORDER OF PRECEDENCE

In the event of conflict among the terms of the Terms and Conditions of this Contract, the Exhibits and Appendix, the following order of decreasing precedence shall apply:

• Terms and Conditions

• Exhibit I: MSV Space-Based Network Program Payment Plan and Termination Liability Amounts

• Exhibit J: MSV Satellite Orbital Performance Incentive Payment Plan

• Exhibit K: Labor Rates

• Exhibit M: ViaSat Certification Letter

• Exhibit B: Technical Requirements for MSV L-Band Space Based Network

• Exhibit A: L-Band Space Based Network Statement of Work

• Exhibit C: L-Band SBN System Test Plan

• Exhibit D: Satellite Program Test Plan

• Exhibit E: Ground Segment Test Plan

• Exhibit F: Satellite Product Assurance Plan

• Exhibit G: Ground Segment Product Assurance Plan

• Exhibit H: Dynamic Satellite Simulator Specification

• Exhibit L: Spares Equipment List

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ARTICLE 35 - GENERAL

35.1 Assignment

35.1.1 General

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, conditioned or delayed.

35.1.2 By MSV

Notwithstanding the foregoing, MSV may assign or transfer this Contract or all or a portion of its rights, duties, or obligations hereunder to (i) any Related Entity or Affiliate of MSV provided that in the case of a transfer to a Related Entity or an Affiliate, the Related Entity has sufficient financial resources (independently or by way of guarantee) to fulfill its obligations under this Contract, provided that “sufficient financial resources” shall not be deemed to be greater than those possessed by MSV; (ii) any or all Financing Entities in connection with obtaining financing for the payment of Contractor’s invoices and any and all other fees, charges or expenses payable under this Contract under any Financing Agreement; and (iii) as part of any collateral pool in favor of other senior lenders providing financing to MSV or any of its Affiliates in connection with completion of the Hybrid Network, provided in any case the assignee, transferee, or successor to MSV has expressly assumed all of the assigned obligations of MSV and associated terms and conditions. Any such assignment or transfer shall not violate laws related to export or technology transfer. In the event that MSV desires to assign or transfer this Contract to a Contractor Competitor, the Parties shall cooperate in good faith to establish procedures to reasonably protect Contractor’s Intellectual Property and Confidential Information. Without limiting this Article 351.2, and notwithstanding anything to the contrary in Article 35.1.1 or this Article 35.1.2, MSV may, at any time, assign to MSV Canada, through separate agreement or by including MSV Canada as a party to this Agreement, one of the Satellites and/or SBNs selected by MSV and one of the optional Satellites and all or a portion of its rights, duties obligations and options related thereto; provided MSV LP shall remain secondarily liable.

35.1.3 By Contractor

Notwithstanding the foregoing, Contractor may assign or transfer this Contract or all of its rights, duties, or obligations hereunder to: (i) any Affiliate of Contractor, or (ii) any corporation in connection with the sale, transfer or assignment of all or substantially all of Contractor’s assets or capital stock, whether by way of merger, consolidation, or otherwise, subject to the following conditions: (A) in the case of a transfer to an Affiliate, and, in the reasonable discretion of MSV such Affiliate has the experience, resources, and personnel required to perform the Work in accordance with this Contract; (B) in the case of a transfer or assignment contemplated in clause (ii), immediately after giving effect to such transaction or series of related transactions, Contractor (or in the event Contractor is not the continuing person, the person or entity formed by such consolidation or into which Contractor is merged or to which its properties are transferred substantially as an entirety) (i) has sufficient financial resources to fulfill its obligations under this Contract, and (ii) the assignee or transferee has the experience, resources and personnel required to perform the Work in accordance with this Contract; and (C)

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the assignee, transferee, or successor to Contractor has expressly assumed all the obligations of Contractor and all terms and conditions applicable to Contractor under this Contract.

35.1.4 Security Interests

Either Party, upon prior written notice to the other Party, may grant security interests in its rights hereunder to lenders that provide financing for the performance by such Party of its obligations under this Contract or for the subject matter hereof. In the event that either Party is sold to or merged into another entity, its responsibilities under this Contract shall not be altered and the successor organization shall be liable for performance of such Party’s obligations under this Contract.

35.1.5 Void Assignment

Assignment of this Contract in violation of this Article 35 shall be void and of no effect.

35.2 Binding Effect

This Contract shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. Assignment of this Contract shall not relieve the assigning Party of any of its obligations nor confer upon the assigning Party any rights except as provided in this Contract.

35.3 Severability

If any provision of this Contract is declared or found to be illegal, unenforceable or void, the Parties shall negotiate in good faith to agree upon a substitute provision that is legal and enforceable and is as nearly as possible consistent with the intentions underlying the original provision. If the remainder of this Contract is not materially affected by such declaration or finding and is capable of substantial performance, then the remainder shall be enforced to the extent permitted by law.

35.4 Waiver of Breach of Contract

A waiver of any provision or any breach of a provision of this Contract shall not be binding upon either Party unless the waiver is in writing, signed by a duly authorized representative of the Party to be bound, as applicable, and such waiver shall not affect the rights of the Party not in breach with respect to any other or future breach. No course of conduct by a Party shall constitute a waiver of any provision or any breach of a provision of this Contract unless a written waiver is executed in accordance with the provisions of this Article 35.4.

35.5 Amendments

This Contract, including any and all its Attachments and Exhibits and Appendices, may not be modified except by written instrument signed by an authorized representative of each Party.

35.6 Captions

The captions contained herein are for purposes of convenience only and shall not affect the construction of this Contract.

35.7 Relationships of the Parties

It is expressly understood that Contractor and MSV intend by this Contract to establish the relationship of independent contractors only, and do not intend to undertake the relationship of principal and agent or to create a joint venture or partnership or any other relationship, other

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than that of independent contractors, between them or their respective successors in interests. Neither Contractor nor MSV shall have any authority to create or assume, in the name or on behalf of the other Party, any obligation, expressed or implied, or to act or purport to act as the agent or the legally empowered representative of the other Party, for any purpose whatsoever.

35.8 Standard of Conduct

Both Parties agree that all their actions in carrying out the provisions of this Contract shall be in compliance with applicable laws and regulations and neither Party will pay or accept bribes, kickbacks or other illegal payments, or engage in unlawful conduct.

35.9 Construction

This Contract, including all its Schedules, Attachments, Annexes, Exhibits and the Appendices have been drafted jointly by the Parties and in the event of any ambiguities in the language hereof, there shall be no inference drawn in favor of or against either Party.

35.10 Counterparts

This Contract may be signed in any number of counterparts with the same effect as if the signatures on each counterpart were upon the same instrument.

35.11 Applicable Law

This Contract shall be interpreted, construed and governed, and the rights of the Parties shall be determined, in all respects, according to the laws of the State of New York without reference to its conflicts of laws rules.

35.12 Survival

Termination or expiration of this Contract for any reason shall not release either Party from any liabilities or obligations set forth in this Contract that (i) the Parties have expressly agreed shall survive any such termination or expiration or (ii) remain to be performed or by their nature would be intended to be applicable following any such termination or expiration.

35.13 U.N. Convention on the International Sales of Goods

The U.N. Convention on the International Sales of Goods shall not apply or otherwise have any legal effect with respect to this Contract.

35.14 No Third-Party Beneficiaries

This Contract is entered into solely between, and may be enforced only by, MSV and Contractor and their permitted assigns, and this Contract shall not be deemed to create any rights in third parties or to create any obligations of a Party to any such third parties.

35.15 Lender Requirements

35.15.1 External Financing

The Parties recognize this Contract may be financed through external sources. Contractor shall provide to any Financing Entity any program information that such Financing Entity reasonably requires (subject to confidentiality agreements governing such program information).

35.15.2 Cooperation

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Contractor agrees to work cooperatively to negotiate and execute such documents as may be reasonably required to implement such financing to the extent such financing or document does not impose any material obligations not otherwise undertaken hereunder, require Contractor or its Affiliates to violate any contractual obligations or covenants it may have with third parties or adversely affect in any material respect Contractor’s interests under this Contract.

35.16 Alignment of Interests

[***REDACTED***]

35.17 Covenant of Good Faith

Each Party agrees that, in respect to dealings with the other Party under or in connection with this Contract, it shall act in good faith.

35.18 Entire Agreement

This Contract, including all its Attachments and Exhibits, represents the entire understanding and agreement between the Parties hereto with respect to the subject matter hereof, and supersedes all other prior agreements and negotiations with respect to the subject matter hereof.

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ATTACHMENT A – FORM OF INVOICE

[***REDACTED***]

82

ANNEX I TO ATTACHMENT A – FORM OF CONTRACTOR CERTIFICATE

[***REDACTED***]

[Date]

MSV LP

10802 Parkridge Boulevard

Reston, VA 20191-2722

Attention: Treasurer

[***REDACTED***]

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SCHEDULE I TO ANNEX I TO ATTACHMENT A

List of Exceptions:

Amendments to MSV Satellite Purchase Contract:

Exceptions Affecting Final Acceptance Date:

Exceptions Affecting Contractor’s Performance:

ATTACHMENT B – SAMPLE SATELLITE PRE-SHIPMENT READINESS REVIEW CERTIFICATION

[Insert Name of Satellite]

Satellite Pre-Shipment Readiness Review Certification

[Date]

MSV LP

10802 Parkridge Boulevard

Reston, VA 20191-2722

Attention: ___________

RE: Satellite Pre-Shipment Readiness Review Certification

[***REDACTED***]

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EX-10

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of August 18, 2008, is by and between Boeing Satellite Systems Inc., a Delaware corporation (“Boeing”), and SkyTerra Communications, Inc., a Delaware corporation (“SkyTerra”). Certain capitalized terms used herein are defined in Section 6 below.

RECITALS:

WHEREAS, pursuant to Amendment No. 3 to Contract #MSV-ATC-01, dated as of January 9, 2006, between Boeing and SkyTerra, as amended through the date hereof (the “Amendment”), SkyTerra will issue a warrant (the “Warrant”) to Boeing to purchase up to 626,002 shares (the “Warrant Shares”) of its voting common stock, par value $0.01 per share (the “Voting Common Stock”), subject to certain antidilution adjustments, on August 18, 2008; and

WHEREAS, in order to induce Boeing to enter into the Amendment, SkyTerra has agreed to provide certain registration rights to Boeing on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the receipt and sufficiency of which is hereby acknowledged the parties hereto hereby agree as follows:

Section 1. REGISTRATION UNDER THE SECURITIES ACT.

1.1 Registration.

(a)    SkyTerra shall use its reasonable best efforts to file with the Securities and Exchange Commission (the “SEC”) no later than October 17, 2008 (the “Filing Date”), a registration statement covering the resale of the Registrable Securities held by Holders for offerings to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (together with any amendments thereto, and including any documents incorporated by reference therein, the “Shelf Registration Statement”) for the purpose of registering such Registrable Securities under the Securities Act for resale by Holders. The Shelf Registration Statement shall state that, in accordance with Rule 416 under the Securities Act, it also covers such indeterminate number of additional Warrant Shares as may become issuable upon exercise of the Warrant to prevent dilution resulting from stock splits, stock dividends, or similar transactions. SkyTerra will cause the Shelf Registration Statement to comply with the applicable provisions of the Securities Act and the rules and regulations thereunder, and set forth a plan of distribution that is reasonably acceptable to Boeing (but does not need to include an underwritten offering). SkyTerra shall use its reasonable best efforts to have the Shelf Registration Statement declared effective by the SEC under the Securities Act, as soon as reasonably possible following the filing of the Shelf Registration Statement.

1

(b)    Upon written notice to the Holders, SkyTerra may postpone filing or effecting the Shelf Registration Statement for a reasonable period of time, but not exceeding seventy-five (75) days from the receipt of such notice, if (i) SkyTerra’s Board of Directors (the “Board”) shall determine that effecting the registration would adversely affect an offering of securities of SkyTerra the preparation of which had then been commenced, (ii) SkyTerra is in possession of material non-public information the disclosure of which would not be in the best interest of SkyTerra, or (iii) SkyTerra is prohibited from doing so under the Registration Rights Agreement among SkyTerra, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, LP, Harbinger Co-Investment Fund, L.P. and Harbinger Capital Partners Fund I, L.P. entered into on July 24, 2008 (“July 2008 Agreement”). In order to defer the filing of a Shelf Registration Statement pursuant to this Section 1.1(b), SkyTerra shall promptly (but in any event within ten days), upon determining to seek such deferral, deliver to each Holder a certificate signed by an executive officer of SkyTerra stating that SkyTerra is deferring such filing pursuant to this Section 1.1(b). A deferral of the filing of the Shelf Registration Statement pursuant to this Section 1.1(b) shall be lifted, and the Shelf Registration Statement shall be filed forthwith, if, in the case of a deferral pursuant to clause (i) of the preceding sentence, the offering of securities of SkyTerra is abandoned, or in the case of a deferral pursuant to clause (ii) of the preceding sentence, the material non-public information has been disclosed. If SkyTerra postpones the filing of the Shelf Registration Statement, it will promptly notify the Holders in writing when the events or circumstances permitting such postponement have ended and will file the Shelf Registration Statement within ten (10) Business Days after the events or circumstances permitting such postponement have ended, unless financial statements required for such Shelf Registration Statement are not then available, then as soon as reasonably practicable thereafter.

(c)    Nothing herein shall prevent SkyTerra from including any SkyTerra securities held by holders other than the Holders in any Shelf Registration Statement, including any “Registrable Shares” under the July 2008 Agreement, provided that, if the Holder has delivered all information reasonably requested by the Company pursuant to Section 1.3(b), all of the Registrable Securities hereunder are included in such Shelf Registration Statement. Boeing hereby consents to the inclusion of SkyTerra securities held by holders other than the Holders in any Shelf Registration Statement, including securities as to which any piggyback registration rights are attributable under the July 2008 Agreement or otherwise, provided that, if the Holder has delivered all information reasonably requested by the Company pursuant to Section 1.3(b), all of the Registrable Securities hereunder are included in such Shelf Registration Statement.

(d)    SkyTerra shall use its reasonable best efforts to keep the Shelf Registration Statement effective under the Securities Act (including through the filing of any required post-effective amendments) until the earliest to occur of such time as (i) the Holders have sold all of the Registrable Securities registered thereunder; (ii) the Registrable Securities may be sold without any limitation or requirement pursuant to Rule 144 under the Securities Act; (iii) the Registrable Securities have been sold pursuant to Rule 144 under the Securities Act; or (iv) there are no Registrable Securities outstanding.

(e)    SkyTerra represents and warrants that it currently meets the registrant eligibility and transaction requirements for the use of Form S-3 for the registration of the sale of the Warrant Shares by the Holders. SkyTerra agrees to use its reasonable best efforts

2

to cause SkyTerra to be eligible to use Form S-3 (or any similar form) for the registration of securities.

1.2RegistrationProcedures. Subject to the terms and conditions hereof, SkyTerra shall use its reasonable best efforts to effect the registration and the disposition of the Registrable Securities in accordance with the intended method of disposition thereof (which shall not in any case include any underwritten offering), and pursuant thereto SkyTerra shall:

(a)    subject to the terms set forth in Section 1.1(b) above, prepare and file with the SEC the Shelf Registration Statement (and any amendments, including any post-effective amendments or supplements to the Shelf Registration Statement SkyTerra deems to be necessary) and use its reasonable best efforts to cause the Shelf Registration Statement to become effective as soon as reasonably possible and to comply with the provisions of the Securities Act applicable to it; provided, that before filing the Shelf Registration Statement or Prospectus or any amendments or supplements thereto (other than filings made pursuant to the Exchange Act or exhibits to such registration statements), SkyTerra shall furnish to one counsel for the Holders copies of all such documents proposed to be filed, including documents incorporated by reference in the Shelf Registration Statement, so as to provide the Holders and their counsel with a reasonable opportunity to review and comment on such documents, and SkyTerra (i) will make such changes and additions thereto as reasonably requested by counsel to the Holders prior to filing the Shelf Registration Statement or amendment thereto or any Prospectus or any supplement thereto and (ii) if any Holder is a controlling person of SkyTerra, will include therein material relating to such Holder or the plan of distribution for the Registrable Securities registered thereunder, furnished to SkyTerra in writing, which, in the reasonable judgment of the applicable Holder, should be included;

(b)    promptly furnish to the Holders such number of copies of the Shelf Registration Statement, each amendment and supplement thereto, the Prospectus and such other documents as the Holders may reasonably request in order to facilitate the disposition of the Registrable Securities registered thereunder; provided, however, that SkyTerra shall have no obligation to furnish copies of a final Prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied by SkyTerra;

(c)    prepare and file with the SEC as soon as reasonably possible, such amendments and supplements to the Shelf Registration Statement and the Prospectus as may be necessary or advisable to keep the Shelf Registration Statement effective for the time period as specified in Section 1.1 in order to complete the disposition of the Registrable Securities covered by the Shelf Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Shelf Registration Statement during such period in accordance with the intended methods of disposition thereof as set forth in the Shelf Registration Statement;

(d)    use its reasonable best efforts to register or qualify the Registrable Securities no later than the time the applicable Registration Statement becomes effective, under all applicable securities or blue sky laws of such jurisdictions as the Holders reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the Registrable Securities (in accordance

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with the intended methods of disposition thereof as set forth in the Shelf Registration Statement) in such jurisdictions; provided that SkyTerra shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction;

(e)    promptly notify the Holders, (i) when a Prospectus relating thereto is required to be delivered under the Securities Act, (ii) when the Shelf Registration Statement or any post-effective amendment has become effective under the Securities Act, (iii) of any written request by the SEC for amendments or supplements to the Shelf Registration Statement or Prospectus, (iv) of the happening of any event as a result of which the Prospectus contains an untrue statement of a material fact or omits any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (whereupon the Holders shall immediately cease any offers, sales or other distribution of Registrable Securities registered thereunder), and, subject to 1.3(c), SkyTerra shall promptly prepare a supplement or amendment to such Prospectus so that, as thereafter used by the Holders for the resale of the Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (v) of the issuance of any stop order suspending the effectiveness of the Shelf Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any of the Registrable Securities included in the Shelf Registration Statement for sale or distribution in any jurisdiction;

(f)     in the event of the issuance of any stop order suspending the effectiveness of the Shelf Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any Registrable Securities included in the Shelf Registration Statement for sale or distribution in any jurisdiction, SkyTerra shall use its reasonable best efforts to promptly obtain the withdrawal of such order and shall prepare and file an amended or supplemented Prospectus, if required;

(g)    provide a transfer agent and registrar for all the Registrable Securities not later than the effective date of the Shelf Registration Statement;

(h)    use its reasonable best efforts to cause the Registrable Securities covered by the Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders to complete the disposition of the Registrable Securities covered by the Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Shelf Registration Statement during such period in accordance with the intended methods of disposition by the Holders thereof set forth in the Shelf Registration Statement;

(i)     make available for inspection by the Holders and any attorney, accountant or other agent retained by the Holders, at reasonable times and in a reasonable manner, all pertinent financial and other records, corporate documents and properties of SkyTerra, and cause SkyTerra’s officers, managers, employees and independent accountants to supply all information reasonably requested by the Holders and such attorneys, accountants or agents to conduct a reasonable investigation within the meaning of Section 11 of the Securities

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Act in connection with the disposition of the Registrable Securities pursuant to the Shelf Registration Statement; provided, that the foregoing investigation and information gathering shall he coordinated on behalf of such parties by one firm of counsel designated by and on behalf of such parties; and provided, further unless the disclosure of such information is necessary to avoid or correct a misstatement or omission in the Shelf Registration Statement or the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, SkyTerra shall not be required to provide any information under this subparagraph (i) if (1) SkyTerra believes, after consultation with counsel, that to do so would cause SkyTerra to forfeit an attorney-client privilege that is applicable to such information, or (2) if either (A) SkyTerra has requested and been granted from the SEC confidential treatment of such information contained in any filing with the SEC or documents provided supplementally or otherwise, or (B) SkyTerra reasonably determines in good faith that such information is confidential and so notifies the coordinating firm in writing, unless prior to furnishing any such information with respect to (1) or (2) the Holder of Registrable Securities requesting such information agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; and provided, further, that each Holder agrees that it will, upon learning that disclosure of any such information is sought in a court of competent jurisdiction, give notice to SkyTerra and allow SkyTerra, at such Holder’s expense, to undertake appropriate action and to prevent disclosure of the information deemed confidential;

(j)     if requested, make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of such registration statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act; and

(k)    reasonably cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (but not prior to such sale).

1.3 Other Procedural Matters.

(a)    SEC Correspondence. SkyTerra shall make available to the Holders promptly after the same is prepared and publicly distributed, filed with the SEC, or received by SkyTerra, one copy of the Shelf Registration Statement and any amendment thereto, each preliminary Prospectus and each amendment or supplement thereto (other than filings made pursuant to the Exchange Act or exhibits to such registration statements), each letter written by or on behalf of SkyTerra to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to the Shelf Registration Statement. SkyTerra will promptly respond to any and all comments received from the SEC, with a view towards causing the Shelf Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that the Shelf Registration Statement or any amendment thereto will not be subject to review.

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(b)    Each Holder shall furnish SkyTerra with any other information regarding such Holder and the disposition of the Registrable Securities, including without limitation the plan of distribution of the Registrable Securities, as SkyTerra reasonably determines, is required to be included in the Shelf Registration Statement.

(c)    Each Holder agrees that, upon notice from SkyTerra of the happening of any event as a result of which the Prospectus included in the Shelf Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until the Holder is advised in writing by SkyTerra that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 1.2 hereof; provided, however, that such postponement of sales of Registrable Securities by the Holders shall not in any event exceed (i) twenty (20) consecutive days or (ii) forty-five (45) days in the aggregate in any 12 month period. Each Holder agrees to keep confidential the existence of any Suspension Notice and, if disclosed to the Holders, the facts and circumstances giving rise thereto. If SkyTerra shall give the Holders any Suspension Notice, SkyTerra shall extend the period of time during which SkyTerra is required to maintain the Shelf Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such Suspension Notice to and including the date the Holders are advised by SkyTerra that the use of the Prospectus may be resumed. In any event, SkyTerra shall not be entitled to deliver more than a total of two (2) Suspension Notices in any 12 month period.

(d)    Neither SkyTerra nor the Holders shall permit any officer, manager, broker or any other person acting on behalf of SkyTerra to use any free writing Prospectus (as defined in Rule 405 under the Securities Act) in connection with the Shelf Registration Statement filed pursuant to this Agreement without the prior written consent of SkyTerra and the Holders.

1.4 Expenses.

(a)    Registration Expenses. All Registration Expenses shall be borne by SkyTerra.

(b)    Selling Expenses. All expenses incident to the Holders’ performance of or compliance with this Agreement, including, without limitation, all fees and expenses of counsel for the Holders, fees and expenses of any broker or dealer discounts or commissions attributable to the disposition of Registrable Securities, shall be borne solely by the Holders.

Section 2. LOCKUP AGREEMENT.

Each Holder hereby agrees to not effect any public sale or distribution (including any sales pursuant to Rule 144 under the Securities Act) of equity securities of SkyTerra, or any securities convertible into or exchangeable or exercisable for such securities, during the seven days prior to and the 90-day period beginning on the effective date of any underwritten registered public offering (or the filing of a Prospectus supplement to any effective shelf

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registration statement) of equity securities of SkyTerra or securities convertible or exchangeable into or exercisable for equity securities of SkyTerra, unless the underwriters managing the registered public offering otherwise consent in writing, and the Holders will deliver an undertaking to the managing underwriters (if requested) consistent with this covenant. The Holders shall not be obligated to comply with the provisions of this Section 2 more than two times in any 12-month period.

Section 3. INDEMNIFICATION.

3.1Indemnification by SkyTerra. SkyTerra agrees to indemnify, to the extent permitted by law, each Holder, its officers, directors, employees and Affiliates, and each Person who controls such Holder (within the meaning of the Securities Act), against all losses, claims, damages, liabilities, and expenses (including reasonable attorney’s fees and expenses) arising out of, or based on (i) any untrue or alleged untrue statement of material fact contained or incorporated by reference in the Shelf Registration Statement or any Prospectus (including any preliminary Prospectus) forming a part of the Shelf Registration Statement or any “issuer free writing prospectus” (as defined in Securities Act Rule 433), or any amendment thereof or supplement thereto; (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) any violation or alleged violation by SkyTerra of the Securities Act, the Exchange Act or applicable “blue sky” laws, except insofar as the same are made in reliance on and in conformity with any information furnished in writing to SkyTerra by the Holders expressly for use therein or by the failure of the Holders to deliver a copy of such registration statement or Prospectus or any amendments or supplements thereto as required by law after SkyTerra has furnished the Holders with a sufficient number of copies of the same.

3.2Indemnification by the Holder. In connection with the Shelf Registration Statement in which any Holder is participating, the Holder shall furnish to SkyTerra in writing such information as SkyTerra reasonably requests for use in connection with any such Shelf Registration Statement or Prospectus and, to the extent permitted by law, the Holder shall indemnify SkyTerra, its directors, officers, employees and Affiliates, and each Person who controls SkyTerra (within the meaning of the Securities Act), against any losses, claims, damages, liabilities, and expenses (including reasonable attorneys fees) arising out of or based on (i) any untrue or alleged untrue statement of material fact contained in the Shelf Registration Statement, or any Prospectus (including any preliminary Prospectus) forming a part of the Shelf Registration Statement or any “issuer free writing prospectus” (as defined in Securities Act Rule 433) forming a part of the Shelf Registration Statement, or any amendment thereof or supplement thereto; or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; providedalways, that such indemnification obligations arise only to the extent that any information so furnished in writing by the Holder contains such untrue statement or omits a material fact required to be stated therein necessary to make the statements therein not misleading; and provided, further, however, that the obligation of the Holder to indemnify SkyTerra hereunder shall be limited to the net proceeds to the Holder from the sale of the Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

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3.3Indemnification Procedures. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

3.4Investigation; Contribution. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, or controlling Person of such indemnified party and shall survive the transfer of the Registrable Securities. If the indemnification provided under Section 3.1 or Section 3.2 of this Agreement is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other 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 indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of any Holder for contribution pursuant to this Section 3.4 be greater than the amount for which such Holder would have been liable pursuant to Section 3.2 had indemnification been available and enforceable.

Section 4. RULE 144 TRANSACTIONS.

SkyTerra shall use reasonable best efforts to file with the SEC, on a timely basis, all annual, quarterly and other periodic reports required to be filed by it under Sections 13 and 15(d) of the Exchange Act, and the rules and regulations thereunder for so long as such disclosure is required to allow sales of Registrable Securities pursuant to Rule 144 under the Securities Act; provided, however, that the foregoing shall not be construed to require SkyTerra to prepare and file periodic reports if it is not required to do so under the Exchange Act. In the

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event of any proposed sale by any Holder of Registrable Securities pursuant to Rule 144 under the Securities Act or otherwise as provided herein, SkyTerra shall use its reasonable best efforts to cooperate with such Holder so as to enable such sales to be made in accordance with applicable laws, rules and regulations, the requirements of the transfer agent of SkyTerra, and the reasonable requirements of the broker through which the sales are proposed to be executed, and shall, upon written request, furnish unlegended certificates representing ownership of Registrable Securities sold thereby, such certificates to be furnished in such numbers and denominations as such Holder may reasonably request.

Section 5. TRANSFER OF REGISTRATION RIGHTS.

Any Holder may transfer all or any portion of its rights under this Agreement to any permitted transferee of Registrable Securities (such transferee a “Transferee”). Any transfer of registration rights pursuant to this Section 5 shall be effective upon receipt by SkyTerra of (i) written notice from such Holder stating the name and address of any Transferee and identifying the number of Registrable Securities with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred, and (ii) a written agreement from such Transferee (reasonably acceptable to SkyTerra) to be bound by the terms of this Agreement.

Section 6. Definitions

“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly or through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. The term “control” (including the correlative terms “controls,” “Controlled by,” and “under common Control with”) shall mean, with respect to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

“Agreement” has the meaning ascribed to it in the preamble.

“Amendment” has the meaning ascribed to it in the preamble.

“Board” has the meaning ascribed to it in Section 1.1(b) hereof.

“Boeing” has the meaning ascribed to it in the preamble.

“Business Day” means any day other than a Saturday, a Sunday or when commercial banks in New York, New York are not open for business.

“correspondence” has the meaning ascribed to it in Section 7.9.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any successor statute.

“Filing Date” has the meaning ascribed to it in Section 1.1(a).

“FINRA” means the Financial Industry Regulatory Authority.

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“Holders” means Boeing and each other holder of the Warrant or the Registrable Securities, together with their permitted successors and assigns.

“July 2008 Agreement” has the meaning ascribed to it in Section 1.1(b).

“Person” means any individual, firm, partnership, corporation, trust, joint venture, limited liability company, association, joint stock company, unincorporated organization, or any other entity or organization, including a governmental entity or any department, agency, or political subdivision thereof.

“Prospectus” mean the Prospectus included in the Shelf Registration Statement and any such Prospectus as amended or supplemented by any Prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities and by all other amendments and supplements to such Prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

“Registration Expenses” means all expenses incident to SkyTerra’s performance of or compliance with this Agreement, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, fees with respect to filings required to be made with the FINRA, printing expenses, messenger and delivery and mailing expenses, fees and disbursements of custodians, SkyTerra’s internal expenses (including without limitation all salaries and expenses of its officers and employees performing legal or accounting duties), and fees and disbursements of counsel for SkyTerra and all independent certified public accountants retained by SkyTerra and other Persons retained by SkyTerra.

“Registrable Securities” means all Warrant Shares and any Voting Common Stock which may be issued or distributed to a holder of a Warrant by way of stock dividend or stock split or other distribution, recapitalization or reclassification. Any particular Registrable Securities that are issued shall cease to be Registrable Securities when (i) a registration statement with respect to the sale by Holders of such securities shall have become effective under the Securities Act and such securities shall have been disposed of pursuant to such registration statement, (ii) such securities shall have been sold by Holders thereof pursuant to Rule 144 and/or Rule 145 (or any successor provision) under the Securities Act, (iii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by SkyTerra and subsequent disposition of such securities shall not require registration or qualification of such securities under the Securities Act, (iv) such securities shall have ceased to be outstanding, or (v) such securities may be sold without any limitation or requirement pursuant to Rule 144 under the Securities Act.

“SEC” has the meaning ascribed to it in Section 1.1(a).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any successor statute.

“Shelf Registration Statement”has the meaning ascribed to it in Section 1.1(a) hereof.

“SkyTerra” has the meaning ascribed to it in the preamble.

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“Suspension Notice” has the meaning ascribed to it in Section 1.3(c) hereof.

“Transferee”has the meaning ascribed to it in Section 5 hereof.

“Voting Common Stock” has the meaning ascribed to it in the recitals.

“Warrant”has the meaning ascribed to it in the recitals.

“Warrant Shares” has the meaning ascribed to it in the recitals.

Section 7. MISCELLANEOUS.

7.1Specific Performance. The parties hereto acknowledge and agree that in the event of any breach of this Agreement, the non-breaching parties would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto shall and do hereby waive the defense in any action for specific performance that a remedy at law would be adequate and that the parties hereto, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of this Agreement in any action instituted hereunder.

7.2Amendments and Waivers. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. No modification, amendment, or waiver of any provision of this Agreement shall be effective against any Holder or SkyTerra except by a written agreement signed by the Holders of a majority of the then-outstanding Registrable Securities and SkyTerra.

7.3Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not including, without limitation, any Person which is the successor to any Holder or SkyTerra.

7.4Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction or any foreign, federal, state, county, or local government or any other governmental, regulatory, or administrative agency or authority to be invalid, void, unenforceable, or against public policy for any reason, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

7.5Entire Agreement. Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements, or representations by or between the parties, written or oral, which may have related to the subject matter hereof in any way.

7.6Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and

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the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

7.7Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.

7.8Governing Law; Waiver of Jury Trial. THIS AGREEMENT AND THE VALIDITY AND PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW. THE PARTIES HERETO HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY FROM OR IN CONNECTION WITH THIS AGREEMENT SHALL BE LITIGATED ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN MANHATTAN IN THE STATE OF NEW YORK. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE FOREGOING COURTS AND CONSENT THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO EITHER OF SAID COURTS OR A JUDGE THEREOF MAY BE SERVED INSIDE OR OUTSIDE THE STATE OF NEW YORK BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH IN THIS AGREEMENT (AND SERVICE SO MADE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID) OR BY PERSONAL SERVICE OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

7.9Notices. Any notices, reports or other correspondence (hereinafter collectively referred to as “correspondence”) required or permitted to be given hereunder shall be given in writing and shall be deemed given three business days after the date sent by certified or registered mail (return receipt requested), one business day after the date sent by overnight courier or on the date given by telecopy (with confirmation of receipt) or delivered by hand, to the party to whom such correspondence is required or permitted to be given hereunder.

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To Boeing Satellite Systems Inc.

Boeing Satellite Systems Inc.

Box 92919, MC W-s50 X382

Los Angeles, California 90009

Attn: General Counsel

Facsimile: ___________________

with a copy (which shall not constitute notice) to:

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, Illinois 60601-6636

Facsimile: 312-861-2200

Attn: R. Scott Falk, P.C.

Robert M. Hayward, Esq.

To SkyTerra Communications, Inc.:

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Facsimile: (703) 390-6113

Attn: General Counsel

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Facsimile: (917) 777-2918

Attn: Gregory A. Fernicola, Esq.

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement on the day and year first above written.

SKYTERRA COMMUNICATIONS, INC.
By:
	Name: Randy Segal
	Title: Senior Vice President, General
	Counsel and Secretary

BOEING SATELLITE SYSTEMS INC.
By:
	Name:
	Title:

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1379738.07-New York Server 7A - MSW

EX-10

NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER AND THIS WARRANT.

Warrant No. 1

WARRANT

TO PURCHASE 626,002 SHARES OF COMMON STOCK

(SUBJECT TO ADJUSTMENT)

OF

SKYTERRA COMMUNICATIONS, INC.

THIS IS TO CERTIFY THAT BOEING SATELLITE SYSTEMS INC. (“Boeing”), or its registered assigns, is entitled, at any time prior to the Expiration Date (such term, and certain other capitalized terms used herein being hereinafter defined), to purchase from SKYTERRA COMMUNICATIONS, INC., a Delaware corporation (the “Company”), 626,002 shares of Voting Common Stock of the Company at a purchase price of $10.00 per share (the initial “Exercise Price”). The amount and kind of securities obtainable pursuant to the rights granted hereunder and the Exercise Price are subject to adjustment pursuant to Section 4 hereof.

1. DEFINITIONS

As used in this Warrant, the following terms have the respective meanings set forth below:

“Additional Construction Deferral” shall have the meaning given to such term in Contract #MSV-ATC-01, dated as of January 9, 2006, between Boeing and the Company, as amended through the date hereof.

“Affiliate” of any Person shall mean any other Person which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with such Person. The term “control” (including the terms “controlled by” and “under common control with”) as used with respect to any Person shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

“Appraised Value” per share of Common Stock as of a date specified herein shall mean the value of such a share as of such date as determined by an investment bank of nationally recognized standing selected by the Holder and reasonably acceptable to the Company. If the investment bank selected by the Holder is not reasonably acceptable to the Company, and the Company and the Holder cannot agree on a mutually acceptable investment bank, then the Company and the Holder shall each choose one such investment bank and the respective chosen firms shall jointly select a third investment bank, which shall make the determination. The Company shall pay the costs and fees of each such investment bank (including any such investment bank selected by the Holder), and the decision of the investment bank making such determination of Appraised Value shall be final and binding on the Company and all affected holders of Warrants or Warrant Stock. Such Appraised Value shall be determined as a pro rata portion of the value of the Company taken as a whole, based on the higher of (A) the value derived from a hypothetical sale of the entire Company as a going concern by a willing seller to a willing buyer (neither acting under any compulsion) and (B) the liquidation value of the entire Company. No discount shall be applied on account of (i) any Warrants or Warrant Stock representing a minority interest, (ii) any lack of liquidity of the Common Stock or the Warrant, (iii) the fact that the Warrants or Warrant Stock may constitute “restricted securities” for securities law purposes, (iv) the existence of any call option or (v) any other grounds.

“Boeing” shall have meaning set forth in the Preamble.

“Business Day” shall mean any day that is not a Saturday or Sunday or a day on which banks are required or permitted to be closed in the State of New York.

“Commission” shall mean the Securities and Exchange Commission or any other federal agency then administering the Securities Act and other federal securities laws.

“Commission Reports” shall mean the Company’s reports filed with the Commission pursuant to Section 13 of the Exchange Act since December 31, 2007, and the Company’s registration statements filed with the Commission pursuant to the Securities Act since December 31, 2007.

“Common Stock” shall mean the Voting Common Stock or the Non-Voting Common Stock, as constituted on the Original Issue Date, and any capital stock into which such Common Stock may thereafter be changed, and shall also include (i) capital stock of the Company of any other class (regardless of how denominated) issued to the holders of shares of any Common Stock upon any reclassification thereof which is also not preferred as to dividends or liquidation over any other class of stock of the Company and which is not subject to redemption, and (ii) shares of common stock of any successor or acquiring corporation received by or distributed to the holders of Common Stock of the Company in the circumstances contemplated by Section 4.3 hereof.

“Company” shall have the meaning set forth in the Preamble.

“Current Market Price” shall mean as of any specified date the average of the daily market price of one share of Voting Common Stock for the shorter of (x) the twenty (20) consecutive Business Days immediately preceding such date or (y) the period commencing on

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the Business Day next following the first public announcement by the Company of any event giving rise to an adjustment of the Exercise Price pursuant to Section 5 below and ending on such date. The “daily market price” of one share of Voting Common Stock for each such Business Day shall be: (i) if the Voting Common Stock is then listed on a national securities exchange, the last sale price of one share of Voting Common Stock, regular way, on such day on the principal stock exchange or market system on which such Voting Common Stock is then listed or admitted to trading, or, if no such sale takes place on such day, the average of the closing bid and asked prices for one share of Voting Common Stock on such day as reported on such stock exchange or market system, or (ii) if the Voting Common Stock is not then listed or admitted to trading on any national securities exchange but is traded over-the-counter, the average of the closing bid and asked prices for one share of Voting Common Stock as reported on the Electronic Bulletin Board or in the National Daily Quotation Sheets, as applicable.

“Designated Office” shall have the meaning set forth in Section 10 hereof.

“Encumbrance” shall mean any mortgage, pledge, hypothecation, claim, charge, security interest, encumbrance, adverse claim (within the meaning of Section 8-102 of the New York Uniform Commercial Code), option, lien, put or call right, right of first offer or refusal, proxy, voting right or other restrictions or limitations of any nature whatsoever in respect of any property or asset, whether or not filed, recorded or otherwise perfected under applicable Law.

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect from time to time.

“Excluded Stock” shall have the meaning set forth in Section 4.5(a) hereof.

“Exercise Date” shall have the meaning set forth in Section 2.1 hereof.

“Exercise Notice” shall have the meaning set forth in Section 2.1 hereof.

“Exercise Price” shall have the meaning set forth in the Preamble.

“Expiration Date” shall mean August 18, 2018.

“Fair Value” per share of Common Stock as of any specified date shall mean (A) if the Common Stock is publicly traded on such date, the Current Market Price per share, or (B) if the Common Stock is not publicly traded on such date, (1) the fair market value per share of Common Stock as determined in good faith by the Board of Directors of the Company and set forth in a written notice to the Holder or (2) if the Holder objects in writing to such price as determined by the Board of Directors within thirty (30) days after receiving notice of same, the Appraised Value per share as of such date. For the avoidance of doubt and notwithstanding the foregoing, the Fair Value per share of Voting Common Stock and Non-Voting Common Stock shall, at all times, be deemed to be the same. Fair Value with respect to property, services or other consideration shall be calculated in a similar manner.

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“FINRA” shall mean the Financial Industry Regulatory Authority, Inc. or any successor corporation thereto.

“GAAP” shall mean generally accepted accounting principles in the United States of America, as from time to time in effect.

“Governmental Authority” shall mean any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

“Harbinger” shall mean, collectively, Master Fund, Special Fund, Harbinger Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P.

“Holder” shall mean (a) with respect to this Warrant, the Person in whose name the Warrant set forth herein is registered on the books of the Company maintained for such purpose, and (b) with respect to any other Warrant or shares of Warrant Stock, the Person in whose name such Warrant or Warrant Stock is registered on the books of the Company maintained for such purpose.

“July 2008 SPA” shall mean the Securities Purchase Agreement, dated as of July 24, 2008, among the Company, MSVLP, Mobile Satellite Ventures Finance Co., Master Fund and Special Fund.

“Law” shall mean any constitution, treaty, statute, law, ordinance, regulation, rule, standard, code, rule of common law, order or other requirement or rule enacted or promulgated by any Governmental Authority.

“Majority Warrant Holders”, with respect to a given determination, shall mean the Holders of Warrants representing more than fifty percent (50%) of all Voting Common Stock issuable upon exercise of all outstanding Warrants.

“Master Contribution Agreement” shall mean the Master Contribution and Support Agreement, dated as of July 24, 2008, among the Company, MSVLP and Mobile Satellite Ventures Subsidiary LLC, and Harbinger.

“Master Fund” shall mean Harbinger Capital Partners Master Fund I, Ltd.

“Material Adverse Effect” shall mean any events, facts, changes or circumstances which would reasonably be expected to have a material adverse effect on the business, assets, liabilities, properties, operations, prospects or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole.

“Monthly Drawdown” shall have the meaning set forth in Section 2.1 hereof.

“MSVLP” shall mean Mobile Satellite Ventures LP.

“Non-Voting Common Stock” shall mean the non-voting common stock, par value $0.01 per share, of the Company.

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“Opinion of Counsel” shall mean a written opinion of outside counsel experienced in Securities Act matters reasonably acceptable to the Company.

“Original Issue Date” shall mean August 18, 2008.

“Original Warrant” shall mean the Warrant issued by the Company to Boeing Satellite Systems Inc. on the Original Issue Date to purchase 626,002 shares of Voting Common Stock.

“Outstanding” shall mean, when used with reference to Common Stock, at any date as of which the number of shares thereof is to be determined, all issued shares of Common Stock, whether Voting Common Stock or Non-Voting Common Stock, as the case may be, except shares then owned or held by or for the account of the Company or any Subsidiary, and shall include all shares issuable in respect of outstanding scrip or any certificates representing fractional interests in shares of Common Stock.

“Person” shall mean any individual, sole proprietorship, partnership, limited liability company, joint venture, trust, incorporated organization, association, corporation, institution, public benefit corporation, entity or government (whether federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body or department thereof).

“Registration Rights Agreement” shall mean the Registration Rights Agreement between Boeing and the Company dated as of the date hereof.

“Restricted Common Stock” shall mean shares of Common Stock which are, or which upon their issuance on the exercise of this Warrant would be, evidenced by a certificate bearing the restrictive legend set forth in Section 8.2(a) hereof.

“Rule 144” shall mean Rule 144 under the Securities Act.

“Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

“Special Fund” shall mean Harbinger Capital Partners Special Situations Fund, L.P.

“Subsidiary” shall mean any corporation, association or other business entity (i) at least 50% of the outstanding voting securities of which are at the time owned or controlled directly or indirectly by the Company; or (ii) with respect to which the Company possesses, directly or indirectly, the power to direct or cause the direction of the affairs or management of such person.

“Transfer” shall mean any disposition of any Warrant or Warrant Stock or of any interest therein, which would constitute a “sale” thereof or a transfer of a beneficial interest therein within the meaning of the Securities Act.

“Vested Warrant Shares” shall have the meaning set forth in Section 2.1 hereof.

“Voting Common Stock” shall mean the voting common stock, par value $0.01 per share, of the Company.

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“Warrant Price” shall mean an amount equal to (i) the number of shares of Voting Common Stock being purchased upon exercise of this Warrant pursuant to Section 2.1 hereof, multiplied by (ii) the Exercise Price as of the date of such exercise.

“Warrants” shall mean the Original Warrant and all warrants issued upon transfer, division or combination of, or in substitution for, such Original Warrant. All Warrants shall at all times be identical as to terms and conditions, except as to the number of shares of Voting Common Stock for which they may be exercised and their date of issuance.

“Warrant Stock” generally shall mean the shares of Voting Common Stock issued, issuable or both (as the context may require) upon the exercise of Warrants.

2. EXERCISE OF WARRANT

2.1 Manner of Exercise.

(a)       An aggregate of 626,002 shares of Voting Common Stock issuable pursuant to this Warrant shall become exercisable in direct proportion to the Company’s drawdowns of the Additional Construction Deferral upon delivery by the Company of a Vesting Notification Form appearing at the end of this Warrant as Annex A. The Company shall deliver a Vesting Notification Form to Boeing and any other Holder of this Warrant reasonably promptly following the end of any calendar month in which it draws down the Additional Construction Deferral (a “Monthly Drawdown”). The number of shares of Voting Common Stock issuable pursuant to this Warrant (the “Vested Warrant Shares”) that shall become exercisable upon delivery of a Vesting Notification Form shall be equal to the 626,002 shares of Voting Common Stock issuable pursuant to this Warrant multiplied by the amount of the Monthly Drawdown divided by the aggregate amount of the Additional Construction Deferral, rounded to the nearest whole number; provided, that in no event shall the number of Vested Warrant Shares exceed 626,002 shares of Voting Common Stock. Holders of this Warrant may, from time to time, exercise this Warrant, on any Business Day, for all or any part of the aggregate number of Vested Warrant Shares (less any shares of Voting Common Stock as to which this Warrant has previously been exercised) until 5:00 P.M., New York time, on the Expiration Date.

As an example of the foregoing paragraph to demonstrate the calculation referred to therein, if, in a given month, the Company makes two draw-downs of $10 million each, or $20 million in the aggregate, of the Additional Construction Deferral, the amount of which is $40 million in the aggregate, the Company would be obligated to deliver a Vesting Notification Form to Boeing and any other Holder of this Warrant reasonably promptly following the end of such month stating that an aggregate of 313,001 shares had become exercisable as Vested Warrant Shares, which number is equal to 626,002 shares of Voting Common Stock multiplied by $20 million divided by $40 million.

(b)       If this Warrant is held by more than one Holder, shares of Voting Common Stock shall become exercisable pursuant to this Warrant in accordance with Section 2.1(a) pro rata among such Holders based on the number of shares of Voting Common Stock attributable to each such Holder which are then issuable pursuant to this Warrant.

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(c)       In order to exercise this Warrant, in whole or in part, a Holder shall (i) deliver to the Company at its Designated Office a written notice of the Holder’s election to exercise this Warrant (an “Exercise Notice”), which Exercise Notice shall be irrevocable, together with this Warrant, and (ii) pay to the Company the Warrant Price (the date on which both such delivery and payment shall have first taken place being hereinafter sometimes referred to as the “Exercise Date”). Such Exercise Notice shall be in the form of the subscription form appearing at the end of this Warrant as Annex B, duly executed by the Holder or its duly authorized agent or attorney.

(d)       Upon receipt by the Company of such Exercise Notice, Warrant and payment, the Company shall, as promptly as practicable, and in any event within five (5) Business Days thereafter, execute (or cause to be executed) and deliver (or cause to be delivered) to the Holders a certificate or certificates representing the aggregate number of full shares of Voting Common Stock issuable upon such exercise, together with cash in lieu of any fraction of a share, as hereafter provided. The stock certificate or certificates so delivered shall be, to the extent possible, in such denomination or denominations as the exercising Holder shall reasonably request in the Exercise Notice and shall be registered in the name of the Holders or, subject to Section 8 below, such other name as shall be designated in the Exercise Notice. This Warrant shall be deemed to have been exercised and such certificate or certificates shall be deemed to have been issued, and the Holder or any other Person so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes, as of the Exercise Date.

(e)       Payment of the Warrant Price shall be made at the option of the exercising Holder by one or more of the following methods: (i) by delivery to the Company of a certified or official bank check in the amount of such Warrant Price payable to the order of the Company, or (ii) by instructing the Company to withhold a number of shares of Warrant Stock then issuable upon exercise of this Warrant with an aggregate Fair Value equal to such Warrant Price. In the event of any withholding of Warrant Stock pursuant to clause (ii) above where the number of shares whose Fair Value (as measured on the Exercise Date) is equal to the Warrant Price is not a whole number, the number of shares withheld by the Company shall be rounded up to the nearest whole share and the Company shall make a cash payment to the Holder based on the incremental fraction of a share being so withheld by the Company in an amount determined in accordance with Section 2.3 hereof. Notwithstanding any provision herein to the contrary, the Company shall not be required to register shares of Voting Common Stock in the name of any Person who acquired this Warrant (or part hereof) or any shares of Warrant Stock otherwise than in accordance with this Warrant.

(f)        If this Warrant shall have been exercised in part, the Company shall, at the time of delivery of the certificate or certificates representing the shares of Voting Common Stock being issued, deliver to the exercising Holder a new Warrant evidencing the rights of such Holder to purchase the unpurchased shares of Voting Common Stock called for by this Warrant. Such new Warrant shall in all other respects be identical to this Warrant.

(g) All Warrants delivered for exercise shall be canceled by the Company.

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2.2       Payment of Taxes. All shares of Warrant Stock issuable upon the exercise of this Warrant pursuant to the terms hereof shall be validly issued, fully paid and nonassessable, issued without violation of any preemptive or similar rights of any stockholder of the Company and free and clear of all Encumbrances (other than any created by actions of the Holders). The Company shall pay all expenses in connection with, and all taxes and other governmental charges that may be imposed with respect to, the issue or delivery thereof, unless such tax or charge is imposed by law upon the Holders. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any Transfer involved in the issue and delivery of shares of Warrant Stock issuable upon exercise of this Warrant in a name other than that of the Holder of the Warrants to be exercised, and no such issue or delivery shall be made unless and until the Person requesting such issue has paid to the Company the amount of any such tax, or has established to the satisfaction of the Company that such tax has been paid. The Company shall not be required to reimburse any Holder or any other Person for any income, withholding, franchise, or similar taxes or governmental charges (whether collected by withholding or otherwise and whether imposed on the gross amount of any payment or otherwise) paid by the Company or imposed on such Holder with respect to the exercise or issuance of the Warrant or issuance of any Warrant Stock or on or with respect to any payments made on or with respect to the Warrant or Warrant Stock.

2.3       Fractional Shares. The Company shall not be required to issue a fractional share of Voting Common Stock upon exercise of any Warrant. As to any fraction of a share that the Holder of one or more Warrants, the rights under which are exercised in the same transaction, would otherwise be entitled to purchase upon such exercise, the Company shall pay to such Holder an amount in cash equal to such fraction multiplied by the Fair Value of one share of Voting Common Stock on the Exercise Date.

2.4       Delivery of Shares or Cash. The Company shall deliver any shares of Common Stock in accordance with Section 2.1(d) or cash pursuant to Section 2.3 required to be delivered by it to the Holder based on the Fair Value per share of Common Stock. If the Holder objects in writing to a price determined by the Board of Directors of the Company as the Fair Value per share of Common Stock, thereby requiring the Company to obtain an Appraised Value per share of Common Stock, whether before or after the date of delivery of cash or shares provided for in the preceding sentence, then (i) if the Appraised Value is greater than the Fair Value per share of Common Stock, then the Company shall pay to the Holder the aggregate difference between the Appraised Value and the Fair Value to which the Holder is entitled promptly following the date on which the Appraised Value is determined, or (ii) if the Appraised Value is less than the Fair Value per share of Common Stock, then the Holder shall reimburse the Company for the aggregate difference between the Fair Value actually paid to it and the Appraised Value to which the Holder is entitled promptly following the date on which the Appraised Value per share of Common Stock is determined.

3. TRANSFER, DIVISION AND COMBINATION

3.1       Transfer. Subject to compliance with Section 8 hereof, each transfer of this Warrant and all rights hereunder, in whole or in part, shall be registered on the books of the Company to be maintained for such purpose, upon surrender of this Warrant at the Designated Office, together

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with a written assignment of this Warrant in the form of Annex C hereto duly executed by a Holder or its agent or attorney and funds sufficient to pay any transfer taxes described in Section 2.2 in connection with the making of such transfer. Upon such surrender and delivery and, if required, such payment, the Company shall, subject to Section 8, execute and deliver a new Warrant or Warrants in the name of the assignee or assignees and in the denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned and this Warrant shall promptly be cancelled. A Warrant, if properly assigned in compliance with Section 8, may be exercised by the new Holder for the purchase of shares of Voting Common Stock without having a new Warrant issued.

3.2       Division and Combination. Subject to compliance with the applicable provisions of this Warrant including, without limitation, Section 8, this Warrant may be divided or combined with other Warrants upon presentation hereof at the Designated Office, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with the applicable provisions of this Warrant as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice.

3.3       Expenses. The Company shall prepare, issue and deliver at its own expense any new Warrant or Warrants required to be issued under this Section 3 (other than pursuant to Section 2.2 and 3.1 hereof).

3.4       Maintenance of Books. The Company agrees to maintain, at the Designated Office, books for the registration and transfer of the Warrants.

4. ANTIDILUTION PROVISIONS

4.1       Upon Stock Dividends, Subdivisions or Splits. If, at any time after the Original Issue Date, the number of shares of Common Stock outstanding is increased by a stock dividend payable in shares of Common Stock or by a subdivision or split-up of shares of Common Stock, then, following the record date for the determination of holders of Common Stock entitled to receive such stock dividend, or to be affected by such subdivision or split-up, (a) the Exercise Price shall be decreased by multiplying the Exercise Price by a fraction, the numerator of which is the number of shares of Common Stock Outstanding immediately prior to such increase in Outstanding shares and the denominator of which is the number of shares of Common Stock Outstanding immediately after such increase in Outstanding shares, and (b) the number of shares issuable upon exercise of the Warrant shall be proportionately increased by multiplying the same by the inverse of such fraction. In no event shall the Exercise Price be less than the par value per share of Common Stock.

4.2       Upon Combinations or Reverse Stock Splits. If, at any time after the Original Issue Date, the number of shares of Common Stock Outstanding is decreased by a combination or reverse stock split of the Outstanding shares of Common Stock into a smaller number of shares of Common Stock, then, upon the record date to determine shares affected by such combination or reverse stock split, (a) the Exercise Price shall be increased by multiplying the Exercise Price by a fraction, the numerator of which is the number of shares of Common Stock Outstanding

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immediately prior to such decrease and the denominator of which is the number of shares of Common Stock Outstanding immediately after such decrease in Outstanding shares, and (b) the number of shares issuable upon exercise of the Warrant shall be proportionately decreased by multiplying the same by the inverse of such fraction.

4.3       Upon Reclassifications, Reorganizations, Consolidations or Mergers. In the event of any capital reorganization of the Company, any reclassification of the stock of the Company (other than a change in par value or from par value to no par value or from no par value to par value or as a result of a stock dividend or subdivision, split up or combination of shares), or any consolidation or merger of the Company with or into another Person (where the Company is not the surviving Person or where there is a change in or distribution with respect to the Common Stock), each Warrant shall after such reorganization, reclassification, consolidation, or merger be exercisable for the kind and number of shares of stock or other securities or property of the Company or of the successor Person resulting from such consolidation or surviving such merger, if any, to which the holder of the number of shares of Common Stock deliverable (immediately prior to the time of such reorganization, reclassification, consolidation or merger) upon exercise of such Warrant would have been entitled upon such reorganization, reclassification, consolidation or merger. The provisions of this Section 4.3 shall similarly apply to successive reorganizations, reclassifications, consolidations, or mergers. The Company shall not effect any such reorganization, reclassification, consolidation or merger unless, prior to the consummation thereof, the successor Person (if other than the Company) resulting from such reorganization, reclassification, consolidation or merger, shall assume, by written instrument, the obligation to deliver to the Holders of the Warrant such shares of stock, securities or assets, which, in accordance with the foregoing provisions, such Holders shall be entitled to receive upon such conversion.

4.4       Upon Issuance of Common Stock. If the Company shall, at any time or from time to time after the Original Issue Date, issue any shares of Common Stock, options to purchase or rights to subscribe for shares of Common Stock, securities by their terms convertible into or exchangeable for shares of Common Stock, or options to purchase or rights to subscribe for such convertible or exchangeable securities (other than Excluded Stock) for consideration per share less than the Exercise Price in effect immediately prior to the issuance of such Common Stock or securities, then the Exercise Price shall be lowered to a price equal to the price obtained by multiplying:

(a)       the Exercise Price in effect immediately prior to the issuance of such Common Stock, options, rights or securities by

(b)       a fraction of which (x) the numerator shall be the sum of (i) the number of shares of Common Stock Outstanding on a fully-diluted basis immediately prior to such issuance, and (ii) the number of additional shares of Common Stock which the aggregate consideration for the number of shares of Common Stock so offered would purchase at the Exercise Price in effect immediately prior to such issuance, and (y) the denominator shall be the number of shares of Common Stock Outstanding on a fully-diluted basis immediately after such issuance.

For purposes of this Section 4, (x) “fully diluted basis” shall be determined in accordance with the treasury stock method of computing fully diluted earnings per share in

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accordance with GAAP. Additionally, for the purposes of any adjustment of the Exercise Price pursuant to this Section 4.4, the following provisions shall be applicable:

(i)     In the case of the issuance of Common Stock for cash in a public offering or private placement, the consideration shall be deemed to be the amount of cash paid therefor before deducting therefrom any discounts, commissions or placement fees payable by the Company to any underwriter or placement agent in connection with the issuance and sale thereof.

(ii)    In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the Fair Value thereof.

(iii)   In the case of the issuance of options to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock (including convertible preferred stock), or options to purchase or rights to subscribe for such convertible or exchangeable securities (except for options to acquire Excluded Stock):

(A) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options or rights were issued and for a consideration equal to the consideration (determined in the manner provided in subparagraphs (i) and (ii) above), if any, received by the Company upon the issuance of such options or rights plus the additional consideration, if any, to be received by the Company upon the exercise of such options or rights (the consideration in each case to be determined in the manner provided in paragraphs (i) and (ii) above);

(B) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities (including convertible preferred stock) or upon the exercise of options to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities, options, or rights were issued and for

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a consideration equal to the consideration received by the Company for any such securities and related options or rights (excluding any cash received on account of accrued interest or accrued dividends), plus the additional consideration, if any, to be received by the Company upon the conversion or exchange of such securities or the exercise of any related options or rights (the consideration in each case to be determined in the manner provided in paragraphs (i) and (ii) above);

(C) on any change in the number of shares or exercise price of Common Stock deliverable upon exercise of any such options or rights or conversions of or exchanges for such securities, other than a change resulting from the anti-dilution provisions thereof, the Exercise Price shall forthwith be readjusted to such Exercise Price as would have been obtained had the adjustment made upon the issuance of such options, rights or securities not converted prior to such change or options or rights related to such securities not converted prior to such change been made upon the basis of such change;

(D) upon the expiration of any options to purchase or rights to subscribe for Common Stock which shall not have been exercised, the Exercise Price computed upon the original issue thereof (or upon the occurrence of a record date with respect thereto), and any subsequent adjustments based thereon, shall, upon such expiration, be recomputed as if the only additional shares of Common Stock issued were the shares of Common Stock, if any, actually issued upon the exercise of such options to purchase or rights to subscribe for Common Stock, and the consideration received therefor was the consideration actually received by the Company for the issue of the options to purchase or rights to subscribe for Common Stock that were exercised, plus the consideration actually received by the Company upon such exercise; and

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(E) no further adjustment of the Exercise Price adjusted upon the issuance of any such options, rights, convertible securities or exchangeable securities shall be made as a result of the actual issuance of Common Stock on the exercise of any such rights or options or any conversion or exchange of any such securities.

4.5 Exceptions.

(a)       Sections 4.2 – 4.4 shall not apply to: (i) any issuance of Common Stock upon exercise of any warrants or options outstanding on the Original Issue Date; (ii) securities issued pursuant to a strategic acquisition by the Company approved by the Board of Directors of the Company of any product, technology, know-how or business by merger, asset purchase, stock purchase or any other reorganization; provided, the Company is the surviving corporation after such transaction and where the aggregate Fair Value of the issuances pursuant to this clause does not exceed $100,000,000 from the Original Issue Date; (iii) securities issued in connection with any stock split, subdivision or stock dividend in respect of which the adjustment provided for in Section 4.1 applies; (iv) securities issued to employees or directors of the Company pursuant to an employee stock option plan or stock incentive plan approved by the Board of Directors (whether or not existing on the date hereof); (v) securities issued to a strategic partner as an equity incentive, if approved by the Board of Directors, where the primary purpose is not a financing and where the aggregate Fair Value of the issuances pursuant to this clause does not exceed $50,000,000 from the Original Issue Date; (vi) any issuance of Common Stock in exchange for, or in connection with the termination of, outstanding options to purchase limited partnership interests of MSVLP, as described in the Registration Statement on Form S-4 (File No. 333-144093), originally filed with the Securities and Exchange Commission on June 27, 2007 (the “S-4 Registration Statement”), or any issuance of Common Stock in exchange for, or in connection with the termination of, limited partnership interests of MSVLP or equity interests in the general partner of MSVLP (or any option or right to acquire such interests) outstanding on the date hereof, so long as such exchange or termination is based on the same exchange ratio referred to in the S-4 Registration Statement; or (vii) any issuance of warrants, Common Stock issued upon exercise of such warrants, rights to subscribe for shares of Common Stock, or securities by their terms convertible into or exchangeable for shares of Common Stock pursuant to the July 2008 SPA and the Master Contribution Agreement. Clauses (i) through (vii) above are referred to collectively as “Excluded Stock.”

(b)       Notwithstanding the foregoing, Boeing hereby waives any antidilution rights provided for in Section 4.4 (i) to the same extent that Harbinger has waived such antidilution rights pursuant to Section 16.18 of the Master Contribution Agreement, and (ii) to the extent of any future waiver by Master Fund or Special Fund or their permitted assigns of antidilution rights contained in warrants issued to Master Fund or Special Fund on January 4, 2008 to purchase an aggregate of 9,144,038 shares of Common Stock.

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5. NO IMPAIRMENT; REGULATORY COMPLIANCE AND COOPERATION; NOTICE OF EXPIRATION

(a)       The Company shall not by any action, including, without limitation, amending its charter documents or through any reorganization, reclassification, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other similar voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of the Holders against impairment. Without limiting the generality of the foregoing, the Company shall take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Voting Common Stock upon the exercise of this Warrant, free and clear of all Encumbrances (other than any created by actions of the Holders), and shall use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

(b)       The Company shall deliver to the Holder no more than 60 and no less than 30 days prior to the Expiration Date a written notice of such Expiration Date. If the Company fails to fulfill in a timely manner the notice obligation set forth in the prior sentence, it shall provide such notice as soon as possible thereafter.

6. RESERVATION AND AUTHORIZATION OF COMMON STOCK; REGISTRATION WITH OR APPROVAL OF ANY GOVERNMENTAL AUTHORITY

From and after the Original Issue Date, the Company shall at all times reserve and keep available for issuance upon the exercise of the Warrants such number of its authorized but unissued shares of Voting Common Stock as will be sufficient to permit the exercise in full of all outstanding Warrants. All shares of Voting Common Stock issuable pursuant to the terms hereof, when issued upon exercise of this Warrant with payment therefor in accordance with the terms hereof, shall be duly and validly issued and fully paid and nonassessable, not subject to preemptive rights and shall be free and clear of all Encumbrances (other than any Encumbrances created by actions of any Holder). Before taking any action that would result in an adjustment in the number of shares of Voting Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction over such action. Subject to the proviso in Section 2.1 (e) herein, if any shares of Voting Common Stock required to be reserved for issuance upon exercise of Warrants require registration or qualification with any governmental authority under any federal or state law (other than under the Securities Act or any state securities law) before such shares may be so issued, the Company will in good faith and as expeditiously as possible and at its expense endeavor to cause such shares to be duly registered.

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7. NOTICE OF CORPORATE ACTIONS; TAKING OF RECORD; TRANSFER BOOKS

7.1 Notices of Corporate Actions.

In case:

(a)       the Company shall take an action or an event shall occur, that would require an Exercise Price adjustment pursuant to Section 4; or

(b)       the Company shall grant to the holders of its Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class; or

(c)       of any reclassification of the Common Stock (other than a subdivision or combination of the Outstanding shares of Common Stock), or of any consolidation, merger or share exchange to which the Company is a party and for which approval of any stockholders of the Company is required, or of the sale or transfer of all or substantially all of the assets of the Company; or

(d)       of the voluntary or involuntary dissolution, liquidation or winding up of the Company; or

(e)       the Company or any Subsidiary shall commence a tender offer for all or a portion of the Outstanding shares of Common Stock (or shall amend any such tender offer to change the maximum number of shares being sought or the amount or type of consideration being offered therefor);

then the Company shall cause to be filed at each office or agency maintained for such purpose, and shall cause to be mailed to all Holders at their last addresses as they shall appear in the stock register, at least 10 days prior to the applicable record, effective or expiration date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution or granting of rights or warrants, or, if a record is not to be taken, the date as of which the holders of Common Stock of record who will be entitled to such dividend, distribution, rights or warrants are to be determined, (y) the date on which such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up is expected to become effective, and the date as of which it is expected that holders of Common Stock of record shall be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, share exchange, sale, transfer, dissolution, liquidation or winding up, or (z) the date on which such tender offer commenced, the date on which such tender offer is scheduled to expire unless extended, the consideration offered and the other material terms thereof (or the material terms of the amendment thereto). Such notice shall also set forth such facts with respect thereto as shall be reasonably necessary to indicate the effect of such action on the Exercise Price and the number and kind or class of shares or other securities or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon exercise of the Warrants. Neither the failure to give any such notice nor any defect therein shall affect the legality or validity of any action described in clauses (a) through (e) of this Section 7.1.

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7.2       Taking of Record. In the case of all dividends or other distributions by the Company to the holders of its Common Stock with respect to which any provision of any Section hereof refers to the taking of a record of such holders, the Company will in each such case take such a record as of the close of business on a Business Day.

7.3       Closing of Transfer Books. The Company shall not at any time, except upon dissolution, liquidation or winding up of the Company, close its stock transfer books or Warrant transfer books so as to result in preventing or delaying the exercise or transfer of any Warrant.

8. TRANSFER RESTRICTIONS

A Holder, by acceptance of this Warrant, agrees to be bound by the provisions of this Section 8.

8.1       Restrictions on Transfers. Subject to this Section 8.1, a Holder may transfer this Warrant or any shares of Restricted Common Stock or cause a portion of this Warrant to be transferred. Neither this Warrant, any portion hereof nor any shares of Restricted Common Stock issued upon the exercise hereof shall be transferred, sold, assigned, exchanged, mortgaged, pledged, hypothecated, or otherwise disposed of or encumbered without compliance with, and they are otherwise restricted by, the provisions of the Securities Act, the rules and regulations thereunder and this Warrant. Each certificate, if any, evidencing such shares of Restricted Common Stock issued upon any such Transfer, other than in a public offering pursuant to an effective registration statement, shall bear the restrictive legend set forth in Section 8.2(a), and each Warrant issued upon such Transfer shall bear the restrictive legend set forth in Section 8.2(b), unless the Holder delivers to the Company an Opinion of Counsel to the effect that such legend is not required for the purposes of compliance with the Securities Act. Holders of the Warrants or the Restricted Common Stock, as the case may be, shall not be entitled to Transfer such Warrants or such Restricted Common Stock except in accordance with this Section 8.1.

8.2 Restrictive Legends.

(a)       Except as otherwise provided in this Section 8, each certificate for Warrant Stock initially issued upon the exercise of this Warrant, each certificate for Warrant Stock issued to any subsequent transferee of any such certificate, shall be stamped or otherwise imprinted with two legends in substantially the following forms: “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT AND THE RULES AND REGULATIONS THEREUNDER.” “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE ENTITLED TO THE BENEFIT OF AND ARE SUBJECT TO CERTAIN OBLIGATIONS SET FORTH IN A CERTAIN WARRANT DATED AUGUST 18, 2008, ORIGINALLY ISSUED BY SKYTERRA COMMUNICATIONS, INC. (THE “WARRANT”) PURSUANT TO THE

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EXERCISE OF WHICH SUCH SHARES WERE ISSUED. A COPY OF THE WARRANT IS AVAILABLE AT THE EXECUTIVE OFFICES OF SKYTERRA COMMUNICATIONS, INC.”

(b)       Except as otherwise provided in this Section 8, each Warrant shall be stamped or otherwise imprinted with a legend in substantially the following form: “NEITHER THIS WARRANT NOR ANY OF THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAW. THE WARRANTS REPRESENTED BY THIS CERTIFICATE AND THE STOCK ISSUABLE UPON EXERCISE HEREOF MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, EXCHANGED, MORTGAGED, PLEDGED, HYPOTHECATED OF OTHERWISE DISPOSED OF OR ENCUMBERED WITHOUT COMPLIANCE WITH THE PROVISIONS OF, AND ARE OTHERWISE RESTRICTED BY THE PROVISIONS OF, THE ACT, THE RULES AND REGULATIONS THEREUNDER AND THIS WARRANT.”

8.3       Termination of Securities Law Restrictions. Notwithstanding the foregoing provisions of this Section 8, the restrictions imposed by Section 8.1 upon the transferability of the Warrants and the Restricted Common Stock and the legend requirements of Section 8.2 shall terminate as to any particular Warrant or shares of Restricted Common Stock when (a) such Warrant or shares of Restricted Common Stock shall have been sold pursuant to an effective registration statement filed with the Commission, or (b) the Company’s transfer agent shall have received from the Holder thereof or the Company an Opinion of Counsel to the effect that such Warrant or shares of Restricted Common Stock may be transferred pursuant to Rule 144 or another exemption from the registration requirements of the Securities Act. Whenever the restrictions imposed by Sections 8.1 and 8.2 shall terminate as to this Warrant, as hereinabove provided, the Holder hereof shall be entitled to receive from the Company, at the expense of the Company, a new Warrant bearing the following legend in place of the restrictive legend set forth in Section 8.2(b).

All Warrants issued upon registration of transfer, division or combination of, or in substitution for, any Warrant or Warrants entitled to bear such legend shall have a similar legend endorsed thereon. Whenever the restrictions imposed by this Section shall terminate as to any share of Restricted Common Stock, as hereinabove provided, the Holder thereof shall be entitled to receive from the Company, at the Company’s expense, a new certificate representing such Common Stock not bearing the restrictive legend set forth in Section 8.2(a).

8.4       Registration Rights. The Holder shall have all of the rights set forth in the Registration Rights Agreement.

9. LOSS OR MUTILATION

Upon receipt by the Company from any Holder of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of this Warrant and an indemnity reasonably satisfactory to it (it being understood that the written indemnification agreement of or affidavit of loss of the Holder, shall be a sufficient indemnity) and, in case of mutilation, upon surrender and cancellation hereof, the Company will execute and

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deliver in lieu hereof a new Warrant of like tenor to such Holder; provided, however, that, in the case of mutilation, no indemnity shall be required if this Warrant in identifiable form is surrendered to the Company for cancellation.

10. OFFICE OF THE COMPANY

As long as any of the Warrants remain outstanding, the Company shall maintain an office or agency, which may be the principal executive offices of the Company (the “Designated Office”), where the Warrants may be presented for exercise, registration of transfer, division or combination as provided in this Warrant. Such Designated Office shall initially be the office of the Company at 10802 Parkridge Boulevard, Reston, Virginia 20191. The Company may from time to time change the Designated Office to another office of the Company or its agent within the United States by notice given to all registered Holders at least ten (10) Business Days prior to the effective date of such change.

11. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company hereby makes the following representations and warranties to Boeing (but not to any subsequent Holder) as of the Original Issue Date (but not as of any date thereafter):

11.1     Corporate Status. The Company (a) has been duly organized, and is validly existing and in good standing under the Laws of the jurisdiction of its organization and has all requisite corporate power and authority to own its property and assets and to transact the business in which it is engaged, and (b) has duly qualified to do business and is in good standing in each jurisdiction where it is required to be so qualified or in good standing, except in the case of (b) where the failure to be so qualified or be in good standing would not reasonably be expected to have a Material Adverse Effect. The Company is not currently in violation of any of the provisions of its Certificate of Incorporation or By-laws, each as amended to date.

11.2     Corporate Power and Authority. All corporate action on the part of the Company necessary for the authorization, execution, delivery and performance of this Warrant and the Registration Rights Agreement and the consummation of the transactions contemplated herein and therein has been taken (other than the approval by the Company’s Board of Directors of the filing of a registration statement pursuant to the Registration Rights Agreement). When executed and delivered by the Company, each of this Warrant and the Registration Rights Agreement shall constitute the legal, valid and binding obligation of the Company and shall be enforceable against the Company in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general equitable principles. The Company has all requisite corporate power and authority to enter into this Warrant and the Registration Rights Agreement and to carry out and perform its obligations under the terms hereof and thereof.

11.3     No Violation. None of the execution, delivery and performance by the Company of this Warrant or the Registration Rights Agreement, or compliance with the terms and provisions hereof and thereof, (a) will contravene any applicable provision of any applicable Law, (b) will conflict with or result in any breach of, any of the terms, covenants, conditions or

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provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Encumbrance (other than those created by the Holder) upon any of the property or assets of the Company or any of its Subsidiaries pursuant to the terms of, any indenture, mortgage, deed of trust, agreement or other material instrument to which the Company or any of its Subsidiaries is a party or by which it or any of its property or assets are bound or to which it may be subject or result in the acceleration of any obligation of the Company, or (c) will violate any provision of the Certificate of Incorporation or By-laws of the Company or any of its Subsidiaries, each as amended to date, except, in the case of (a) and (b), where such breach or conflict would not reasonably be expected to have a Material Adverse Effect.

11.4     Approvals. Assuming the accuracy of Boeing’s representations and warranties set forth in Section 12 below, except (a) for any required filings and recordings which have been made and are in full force and effect, and (b) for applicable blue sky notice filings, no order, consent, approval, license, authorization or validation of, or filing, recording or registration with, or exemption by, any Person or Governmental Authority, is required to authorize or is required for or as a condition to (i) the execution and delivery of this Warrant and the Registration Rights Agreement or (ii) the legality, validity, binding effect or enforceability of this Warrant and the Registration Rights Agreement. The execution and delivery by the Company of this Warrant and the issuance of the Voting Common Stock issuable upon exercise of the Warrant do not require the consent or approval of the security holders of the Company or of any other Person.

11.5     Valid Issuance of the Common Stock. The shares of Voting Common Stock issuable upon exercise of the Warrant have been duly authorized by the Company and, when delivered in accordance with the terms of this Warrant, (a) will be validly issued, fully paid and nonasessable, (b) will not be subject to any preemptive rights or any other similar contractual rights of the stockholders of the Company or any other Person, and (c) will be delivered to Boeing free and clear of any Encumbrances which are imposed by the Company, or arise as a result of the Company’s action or omission. The Company has reserved from its duly authorized capital stock the number of shares of Voting Common Stock issuable upon the exercise in full of the Warrant.

11.6     Securities Laws. Assuming the accuracy of Boeing’s representations and warranties set forth in Section 12, the offer and issuance of this Warrant and the shares of Voting Common Stock issuable upon exercise of this Warrant are and are intended to be exempt from the registration requirements of the Securities Act pursuant to Section 4(2) thereof.

11.7     Conformity to Securities Act and Exchange Act; No Misstatement or Omission. As of its filing date or, if amended prior to the date of this Warrant, as of the date of the last such amendment prior to the Original Issue Date, each of the Commission Reports complied in all material respects with the applicable requirements of the Securities Act or the Exchange Act (as applicable) and the respective rules and regulations of the Commission thereunder, as in effect on the date so filed, and does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading. Since December 31, 2007, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the Commission pursuant to the

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reporting requirements of the Exchange Act. The financial statements and supporting schedules included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, as amended by the amendment to such Annual Report filed with the Commission on Form 10-K/A on April 29, 2008, and in the Company’s Quarterly Reports on Form 10-Q for the quarters ended March 30, 2008 and June 30, 2008 and in any other Commission Reports, in each case filed with the Commission, present fairly, in all material respects, the consolidated financial position of the Company as of the dates specified and the consolidated results of their operations and cash flows for the periods specified, in each case, in conformity with GAAP applied on a consistent basis during the periods involved, except as indicated therein or in the notes thereto.

12. REPRESENTATIONS AND WARRANTIES OF BOEING

Boeing hereby makes the following representations and warranties to the Company as of the Original Issue Date (but not as of any date thereafter):

12.1     Authorization. All corporate, partnership or limited liability company action on the part of Boeing necessary for the authorization, execution, delivery and performance of this Warrant and the Registration Rights Agreement and the consummation of the transactions contemplated herein and therein, has been taken. When executed and delivered by Boeing, each of this Warrant and the Registration Rights Agreement shall constitute the legal, valid and binding obligation of Boeing, and shall be enforceable against Boeing in accordance with its terms, except as such may be limited by bankruptcy, insolvency, reorganization or other laws affecting creditors’ rights generally and by general equitable principles. Boeing has all the requisite corporate power and authority to enter into each of this Warrant and the Registration Rights Agreement and to carry out and perform its obligations under the terms hereof and thereof.

12.2     Purchase Entirely for Own Account. Boeing is acquiring the Warrant for its own account for investment and not for the account of any other Person or with a view to any resale, fractionalization, division, or distribution thereof in a manner that would require registration thereof or the transactions contemplated hereby under the Securities Act, and Boeing does not presently have any reason to anticipate any change in its circumstances or other particular occasion or event which would cause it to sell the Warrant or the shares of Voting Common Stock underlying the Warrant other than in compliance with the requirements of the Securities Act. Boeing has no contract, undertaking, agreement, understanding or arrangement with any Person to sell, transfer, or pledge to any Person any part or all of the Warrant which Boeing is acquiring, or any interest therein, and has no present plans to enter into the same. The Warrant was not offered or sold to Boeing by means of any general solicitation or general advertisement.

12.3     Investor Status; Etc. Boeing certifies and represents to the Company that (i) it is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the Securities Act and was not organized for the purpose of acquiring the Warrant. Boeing has adequate means of providing for its current needs and personal contingencies, has no need now, and anticipates no need in the foreseeable future, to sell the Warrant, and currently has sufficient net worth and financial liquidity to afford a complete loss of its investment in the Company. Boeing has such knowledge and experience in financial and business matters so that Boeing is capable of evaluating the merits and risks of an investment in the Company and has made such

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evaluation. Boeing fully understands that the Warrant is a speculative investment which involve a high degree of risk of loss of Boeing’s entire investment. No Person or entity, other than the Company or its authorized representatives, has offered the Warrant to Boeing. Boeing is able to bear the economic risk of an investment in the Warrant.

12.4     Warrant Not Registered. Boeing understands that neither this Warrant nor the Warrant Stock issuable upon exercise of this Warrant has been registered under the Securities Act by reason of its issuance by the Company in a transaction exempt from the registration requirements of the Securities Act, and that this Warrant and the Warrant Stock must continue to be held by Boeing unless a subsequent disposition thereof is registered under the Securities Act or is exempt from such registration. Boeing understands that the exemptions from registration afforded by Rule 144 (the provisions of which are known to it) depend on the satisfaction of various conditions, and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts. Boeing has had an opportunity to ask questions of and receive answers from the management and authorized representatives of the Company, and to review any other relevant documents and records concerning the business of the Company and the terms and conditions of this investment, and that any such questions have been answered to Boeing’s satisfaction. Boeing understands that no federal or state agency has passed upon or made any recommendation or endorsement of an investment in this Warrant.

12.5     Reliance. Boeing acknowledges that the Company is relying on the representation and warranties of Boeing contained in this Section 12 and would not issue this Warrant in the absence of the representations and warranties made by Boeing contained in this Section 12.

13. MISCELLANEOUS

13.1     Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of the Company or the Holders shall operate as a waiver of such right or otherwise prejudice the rights, powers or remedies of such Person.

13.2     Notice Generally. Any notice, demand, request, consent, approval, declaration, delivery or communication hereunder to be made pursuant to the provisions of this Warrant shall be sufficiently given or made if in writing and either delivered in person with receipt acknowledged or sent by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

(a)       if to any Holder of this Warrant or of Warrant Stock issued upon the exercise hereof, at its last known address appearing on the books of the Company maintained for such purpose;

(b) if to the Company, at the Designated Office;

or at such other address as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration, delivery or other communication hereunder shall be deemed to have been duly given or served on the date on

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which personally delivered, with receipt acknowledged, or three (3) Business Days after the same shall have been deposited in the United States mail, or one (1) Business Day after the same shall have been sent by Federal Express or another recognized overnight courier service.

13.3     Limitation of Liability. No provision hereof, in the absence of affirmative action by the Holders to purchase shares of Common Stock, and no enumeration herein of the rights or privileges of the Holders hereof, shall give rise to any liability of such Holders to pay the Exercise Price for any Warrant Stock other than pursuant to an exercise of this Warrant or any liability as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

13.4     Remedies. Each Holder of Warrants and/or Warrant Stock, in addition to being entitled to exercise its rights granted by law, including recovery of damages, shall be entitled to specific performance of its rights provided under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees, in an action for specific performance, to waive the defense that a remedy at law would be adequate.

13.5     Successors and Assigns. Subject to the provisions of Sections 3.1 and 8.1, this Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the permitted successors and assigns of the Holders hereof. The provisions of this Warrant are intended to be for the benefit of all Holders from time to time of this Warrant and to the extent applicable, all Holders of shares of Warrant Stock issued upon the exercise hereof (including transferees), and shall be enforceable by any such Holder.

13.6     Amendment. This Warrant and all other Warrants may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holders, provided that no such Warrant may be modified or amended to reduce the number of shares of Voting Common Stock for which such Warrant is exercisable or to increase the price at which such shares may be purchased upon exercise of such Warrant (before giving effect to any adjustment as provided therein) without the written consent of the Holders thereof.

13.7     Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Warrant.

13.8     Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

13.9     GOVERNING LAW; JURISDICTION. IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS WARRANT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE. THE COMPANY HEREBY CONSENTS AND AGREES THAT THE STATE OR

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FEDERAL COURTS LOCATED IN NEW YORK, SHALL HAVE, EXCEPT AS SET FORTH BELOW, EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE COMPANY AND THE HOLDER OF THIS WARRANT PERTAINING TO THIS WARRANT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT, PROVIDED, THAT IT IS ACKNOWLEDGED THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK.

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IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed and its corporate seal to be impressed hereon and attested by its Secretary or an Assistant Secretary.

SKYTERRA COMMUNICATIONS, INC.
By:	/s/ Scott Macleod
	Name: Scott Macleod
	Title: Executive Vice President
	and Chief Financial Officer

[SEAL]
Attest:
By:
	Name: Randy Segal
	Title:  Senior Vice President,
	General Counsel and Secretary

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ANNEX A

VESTING NOTIFICATION FORM

[To be delivered by the Company upon Drawdown of Additional Construction Deferral]

_________________, 20_____

SkyTerra Communications, Inc. (the “Company”) hereby provides notice to Boeing Satellite Systems Inc. (“Boeing”) and any other registered owner of this Warrant of the Company’s drawdown or drawdowns under the “Additional Construction Deferral” pursuant to and as defined in Contract #MSV-ATC-01, dated as of January 9, 2006, between the Company and Boeing, as amended through the date hereof, in the aggregate amount of $_________________ (the “Drawdown”) during the month of _________________, 20_____.

Pursuant to Section 2.1(a) of this Warrant, _________________ shares (the “Vested Warrant Shares”) of voting common stock, par value $0.01 per share, of the Company (“Voting Common Stock”) issuable pursuant to this Warrant have become exercisable under the terms of this Warrant due to the Drawdown. The number of Vested Warrant Shares relative to the 626,002 shares of Voting Common Stock originally issuable pursuant to this Warrant is approximately equal to the amount of the Drawdown relative to the aggregate amount of the Additional Construction Deferral.

As of the date hereof, the registered owner of this Warrant is entitled to exercise this Warrant for an aggregate of _________________ shares of Voting Common Stock, including (i) the Vested Warrant Shares, and (ii) all shares of Voting Common Stock as to which this Warrant has previously become exercisable pursuant to Section 2.1(a) of this Warrant but which remain unexercised at the date hereof.

SKYTERRA COMMUNICATIONS, INC.

By:

Name:

Title:

ANNEX B

SUBSCRIPTION FORM

[To be executed only upon exercise of Warrant]

The undersigned registered owner of this Warrant irrevocably exercises this Warrant for the purchase of ______ shares of Voting Common Stock of SkyTerra Communications, Inc. and herewith makes payment therefor in _________________, all at the price and on the terms and conditions specified in this Warrant and requests that certificates for the shares of such Voting Common Stock hereby purchased (and any securities or other property issuable upon such exercise) be issued in the name of and delivered to _________________ whose address is _______________________________ and, if such shares of Voting Common Stock shall not include all of the shares of Voting Common Stock issuable as provided in this Warrant, that a new Warrant of like tenor and date for the balance of the shares of Voting Common Stock issuable hereunder be delivered to the undersigned.

Method of Payment of Exercise Price:

______________________________

_______________________________

(Name of Registered Owner)

_______________________________

(Signature of Registered Owner)

_______________________________

(Street Address)

_______________________________

(City) (State) (Zip Code)

NOTICE: The signature on this subscription must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever.

ANNEX C

ASSIGNMENT FORM

FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby sells, assigns and transfers unto the assignee named below all of the rights of the under signed under this Warrant, with respect to the number of shares of Voting Common Stock set forth below:

Name and Address of Assignee No. of Shares of Voting Common Stock

and does hereby irrevocably constitute and appoint ________ _____________ attorney-in-fact to register such transfer onto the books of SkyTerra Communications, Inc. maintained for the purpose, with full power of substitution in the premises.

Dated:	Print Name:
Signature:
	Witness:

NOTICE: The signature on this assignment must correspond with the name as written upon the face of the within Warrant in every particular, without alteration or enlargement or any change whatsoever.

EX-10

EXECUTION COPY

AGREEMENT FOR TRANSFER AND EXCHANGE

AGREEMENT FOR TRANSFER AND EXCHANGE (“Agreement”), dated as of September 12, 2008, between TERRESTAR CORPORATION, a Delaware corporation (“TerreStar”) and SKYTERRA COMMUNICATIONS, INC., a Delaware corporation (“SkyTerra” and, together with TerreStar, the “Parties”).

RECITALS

WHEREAS, Motient Ventures Holding Inc. (“MVH”), a Delaware corporation and indirect, wholly owned subsidiary of TerreStar, owns 29,926,074 shares (the “SkyTerra Shares”) of non-voting common stock, par value $0.01 per share, of SkyTerra;

WHEREAS, pursuant to an Exchange Agreement among TerreStar, MVH and SkyTerra, dated as of May 6, 2006(the “Exchange Agreement”), TerreStar is obligated to use its commercially reasonable efforts to distribute the SkyTerra Shares to the holders of TerreStar’s common stock;

WHEREAS, MSV Investors, LLC (“MSV Investors”), a Delaware limited liability company and indirect wholly owned subsidiary of SkyTerra, owns 4,216,270 shares (the “Networks Shares”) of common stock, par value $0.001 per share of TerreStar Networks, Inc., a Delaware corporation (“Networks”);

WHEREAS, MSV Investors Holdings, Inc. (“MSVIH”), a Delaware corporation and wholly owned subsidiary of SkyTerra, owns 3,136,428shares (the “TGL Shares”) of common stock, par value $0.01 per share, of TerreStar Global Ltd., a Bermuda corporation (“TGL”);

WHEREAS, pursuant to the Amended and Restated Stockholders Agreement of Networks, dated as of May 6, 2006 (the “Stockholders Agreement”), the ability of MSV Investors to sell or otherwise transfer the Networks Shares is limited;

WHEREAS,TerreStar desires that MVH be permitted and enabled to sell or otherwise Transfer the SkyTerra Shares, and SkyTerra desires that MSV Investors be permitted and enabled to sell or otherwise Transfer the Networks Shares and that the transferees thereof have the right, but not the obligation, to exchange Networks Shares for shares of common stock of TerreStar; and

WHEREAS, TerreStar desires to acquire from MSVIH the TGL Shares.

NOW THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I.

DEFINITIONS

Section 1.1 Certain Defined Terms. For purposes of this Agreement:

“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

“Agreement”has the meaning set forth in the preamble.

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York.

“control,” including the terms “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, as general partner or managing member, by contract or otherwise.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Agreement” has the meaning set forth in the recitals.

“Exchanged Shares” has the meaning set forth in Section 4.1.

“Governmental Authority” means any United States federal, state or local governmental, regulatory or administrative authority, agency or commission or any judicial or arbitral body.

“Harbinger” means Harbinger Capital Partners Master Fund I, Ltd., an exempted company organized under the laws of the Cayman Islands, and Harbinger Capital Partners Special Situations Fund, L.P., a Delaware limited partnership.

“Harbinger Letter Agreement” has the meaning set forth in Section 3.5.

“Holder” has the meaning set forth in Section 4.1(a).

“Holder Exchange Agreement” has the meaning set forth in Section 4.1.

“Indemnifiable Claim” means a claim brought by any stockholder of TerreStar (other than a holder of Exchanged Shares), in such capacity, against an Indemnified Party, arising out of or related to or in connection with the waiver contemplated by Section 3.1, and alleging in substance that such Indemnified Party is liable for harm to such stockholder consisting of such stockholder’s failure to receive SkyTerra Shares in a distribution from TerreStar as contemplated by the Exchange Agreement.

“Indemnified Party” has the meaning set forth in Section 6.1(a).

“Law” means any statute, law, ordinance, regulation, rule, code, injunction, judgment, decree or order of any Governmental Authority.

“Lien” means, with respect to any of the TGL Shares, any lien, mortgage, pledge, charge, security interest, proxy, voting agreement, voting trust or encumbrance of any kind in

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respect of the TGL Shares, whether or not filed, recorded or otherwise perfected under applicable law, and any agreement to give any security interest.

“Losses” has the meaning set forth in Section 6.1(a).

“MSV Investors” has the meaning set forth in the recitals.

“MSV” means Mobile Satellite Ventures LP, a Delaware limited partnership and indirect subsidiary of SkyTerra.

“MVH” has the meaning set forth in the recitals.

“MSVIH” has the meaning set forth in the recitals.

“Networks” has the meaning set forth in the recitals.

“Networks Shares” has the meaning set forth in the recitals.

“Organizational Documents” means as to any Person, the certificate of or articles of incorporation, certificate of limited partnership, certificate of formation, articles of organization, operating agreement, limited partnership agreement, limited liability company agreement, stockholders agreements or bylaws or other similar documents of such Person, as applicable.

“Other Investors” means Och Ziff Capital Management Group LLC, Solus Alternative Asset Management, Millenium Partners L.P., George Haywood and any Affiliate of any of the foregoing.

“Other Investors Letter Agreement” means the draft form of agreement attached hereto as Exhibit A.

“Party” and “Parties” has the meanings set forth in the preamble.

“Person” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.

“Securities Act” means the Securities Act of 1933, as amended.

“SkyTerra”has the meaning set forth in the preamble.

“SkyTerra Shares” has the meaning set forth in the recitals.

“Stockholders Agreement” has the meaning set forth in the recitals.

“TerreStar” has the meaning set forth in the preamble.

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“TerreStar Change of Control” means any event, occurrence or circumstance which is a “change of control” or “change in control” of TerreStar or of Networks within the meaning of (i) the Indenture, dated as of February 14, 2007, among Networks, as issuer, the guarantors party thereto and U.S. Bank National Association, as trustee, (ii) the Indenture, dated February 7, 2008, among Networks, as the issuer, TerreStar, certain subsidiaries of Networks and U.S. Bank National Association, as trustee, (iii) the Purchase Money Credit Agreement, dated February 5, 2008, among Networks, as the borrower, the guarantors party thereto from time to time and U.S. Bank National Association, as collateral agent, Harbinger and EchoStar Corporation, as lenders, (iv) the Series B Cumulative Convertible Preferred Stock of TerreStar or (v) the Series A Cumulative Convertible Preferred Stock of TerreStar.

“TGL Shares” has the meaning set forth in the recitals.

“Transfer” means to sell, assign, transfer, pledge, encumber, hypothecate, mortgage or otherwise dispose of, either voluntarily or involuntarily (or to enter into any contract, option or other arrangement or understanding to do any of the foregoing), but shall exclude any bona fide pledge to secure obligations to financial institutions.

“Transferee” shall mean any person to whom Networks Shares have been Transferred pursuant to Section 2.1.

ARTICLE II.

TRANSFERS OF NETWORKS SHARES

Section 2.1 Limitations on Transfers.

The following shall be the sole limitations on Transfers of Networks Shares by SkyTerra, its Subsidiaries and, solely by virtue of their entry into Joinder Agreements, Transferees of Networks Shares from and after the termination of the Stockholders Agreement in accordance with Section 2.3, and no other limitations shall apply by virtue of any other agreement between the Parties (for the avoidance of doubt, including Transfers prior to May 15, 2009):

(a)       SkyTerra, its Subsidiaries and, solely by virtue of their entry into Joinder Agreements, Transferees of Networks Shares shall not Transfer any Networks Shares, TerreStar shall have the right to decline to take action to permit the Transfer of Networks Shares, and Networks may prohibit any such proposed Transfer, if, but only to the extent of the transfer of the number of Networks Shares that, in the reasonable determination of TerreStar or Networks, following consultation with and the receipt of written advice of nationally recognized counsel, such Transfer, or exchange (or right to exchange) as contemplated in Section 4.1: (i) could cause Networks to be in violation of any material applicable state or federal laws or other material applicable legal requirement; (ii) would be to Harbinger or an Affiliate of Harbinger; or (iii) could cause a TerreStar Change of Control. Such restriction and right to decline to permit or to prohibit proposed Transfers shall not apply in the case of transactions pursuant to effective registration statements, Rule 144 promulgated under the Securities Act or tender offers.

(b)       TerreStar shall be entitled to delay any action to permit the Transfer of Networks Shares, and Networks may delay any such Transfer, to the extent that regulatory approval, notification or other submission or procedure is required as a condition to such

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Transfer (including Federal Communications Commission approvals (if required), and filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and applicable securities laws), until after such approval, notification or other submission or procedure has been obtained, submitted or completed, as reasonably determined by TerreStar and Networks.

(c)       Transfers of Networks Shares shall be in multiples of 1,000,000 Networks Shares (as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof), except that, if MSV Investors shall own fewer than such number of Networks Shares, it shall be permitted to Transfer all of its remaining Networks Shares.

(d)       No Transfer of Networks Shares shall be permitted unless such Transfer is not subject to, or is effected in compliance with an exemption from the registration requirements of, the Securities Act or is pursuant to an effective registration statement. The parties to the proposed Transfer shall provide to Networks such information as it reasonably requests to confirm the permissibility thereof.

(e)       No Transfer of Networks Shares shall occur until the Transferee has delivered to TerreStar a duly executed and fully completed Joinder Agreement in the form of Exhibit B.

Section 2.2      Confirmation Letter. Upon SkyTerra’s request, TerreStar shall, or shall cause Networks to, confirm (in writing if requested) to third parties the arrangements of this Article II.

Section 2.3      Stockholders Agreement. The Stockholders Agreement shall automatically terminate immediately prior to the effectiveness of the first Transfer of Networks Shares in accordance with this Article II.

ARTICLE III.

TRANSFERS OF SKYTERRA SHARES

Section 3.1      Transfers of SkyTerra Shares. SkyTerra hereby waives all obligations of TerreStar and its Affiliates to SkyTerra, under Sections 2.5(i) or 4.8 of the Exchange Agreement or otherwise, that TerreStar distribute SkyTerra Shares to TerreStar’s stockholders.

Section 3.2 Limitations on Transfers.

The following shall be the sole limitations on Transfers of SkyTerra Shares by TerreStar, its Subsidiaries and, solely by virtue of their entry into agreements pursuant to Section 3.2(d), transferees of SkyTerra Shares, and no other limitations shall apply by virtue of any other agreement between the Parties, but, for the avoidance of doubt, Transfers to Harbinger or the Other Investors completed within 30 days of the date hereof shall be exempt from these limitations:

(a)       TerreStar, its Subsidiaries and, solely by virtue of their entry into agreements pursuant to Section 3.2(d), Transferees of SkyTerra Shares shall not Transfer any SkyTerra Shares, SkyTerra shall have the right to decline to take action to permit the Transfer of

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SkyTerra Shares, and SkyTerra may prohibit any such proposed Transfer, if, in the reasonable determination of SkyTerra, such Transfer would cause SkyTerra to be in material violation of any applicable state or federal laws or other material applicable legal requirement.

(b)       SkyTerra shall be entitled to delay any action to permit the Transfer of SkyTerra Shares, and SkyTerra may delay any such Transfer, to the extent that regulatory approval, notification or other submission or procedure is required as a condition to such Transfer (including, but not limited to, Federal Communications Commission approvals (if required), and filings under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and applicable securities laws), until after such approval, notification or other submission or procedure has been obtained, submitted or completed, as reasonably determined by SkyTerra.

(c)       No Transfer of SkyTerra Shares shall be permitted unless such Transfer is not subject to, or is effected in compliance with an exemption from the registration requirements of, the Securities Act.

(d)       No Transfer of SkyTerra Shares may take effect earlier than the third Business Day after written notice thereof is given to SkyTerra, which notice shall be accompanied by an agreement to be bound by terms similar to the terms of Exhibit B and including similar information. The parties to the proposed Transfer shall provide to SkyTerra such information as it reasonably requests to confirm the permissibility thereof.

Section 3.3      Effect of Transfer of SkyTerra Shares. No Transferee of the SkyTerra Shares shall, on account of such transfer, be entitled to any rights created under any contractual arrangement entered into prior to the date hereof, including the Exchange Agreement. Each Party shall consider in good faith suggestions by the other for the termination of agreements between the Parties or their Affiliates, or provisions thereof, made impracticable or unnecessary by virtue of Transfers of the SkyTerra Shares or Networks Shares or the transactions contemplated by the Holder Exchange Agreements.

Section 3.4      Waiver Letter. Upon TerreStar’s request, SkyTerra shall confirm (in writing if necessary) to third parties the waiver contained in Section 3.1.

Section 3.5      Agreement with Harbinger. SkyTerra shall promptly enter into an agreement with Harbinger (the “Harbinger Letter Agreement”) substantially in the form of Exhibit C hereto.

ARTICLE IV.

EXCHANGE AND REGISTRATION

Section 4.1      Exchange and Registration Rights. From time to time from the date hereof until May 15, 2014, subject to Section 4.2, upon the request of Transferees of Networks Shares, TerreStar shall enter into one or more Exchange and Registration Agreements (each, a “Holder Exchange Agreement”) in the form of Exhibit D with such Transferees, pursuant to which, subject to the terms and conditions thereof, each such Networks Share shall be exchanged for 4.37 shares of common stock of TerreStar (“Exchanged Shares”) (subject to adjustment for

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stock splits, combinations, reclassifications and similar transactions) and the Transferees will be entitled to the registration and other rights as set forth therein.

Section 4.2      Transfer of TGL Shares. TerreStar shall not be obligated to consummate the closing under any Exchange and Registration Agreement unless SkyTerra shall have previously transferred, or caused MSVIH to transfer, in consideration thereof, all of the TGL Shares to TerreStar, or transfers or will or will cause MSVIH to transfer the TGL Shares at such closing, free and clear of all Liens, without additional consideration. Subject to the foregoing, nothing herein shall prevent or delay the Transfer by SkyTerra or MSVIH of any TGL Shares to any party at any time.

Section 4.3      Actions to Aid Exchange and Registration. Until the earlier of May 15, 2014, and the date when no further Networks Shares are eligible for exchange pursuant to Holder Exchange Agreements and no Exchanged Shares are eligible for registration under the Holder Exchange Agreements, TerreStar shall not (a) modify or permit the modification of the definitions referred to in the definition of “TerreStar Change of Control” in any manner adverse to the interests of the holders of Networks Shares or Exchanged Shares, (b) fail to use commercially reasonable efforts to comply with the “current public information” requirements of Rule 144(c) promulgated under the Securities Act, or (c) enter into any other agreement granting registration rights which could cause the registration under the Holder Exchange Agreements to become unavailable or which would have a higher priority.

ARTICLE V.

REPRESENTATIONS AND WARRANTIES

Section 5.1      Representation and Warranties of the Parties. Each Party represents and warrants to the other Party as follows:

(a)       Organization and Good Standing. Such Party is an entity duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has all requisite power and authority to consummate the transactions contemplated by this Agreement.

(b)       Authority. Such Party has all requisite power, authority and legal capacity to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement, and the Waiver Letter provided for in Section 3.4 in the case of SkyTerra, by such Party, the performance of such Party’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of such Party. This Agreement has been duly executed and delivered by such Party and, assuming the due authorization, execution and delivery of this Agreement by the other Party, constitutes a valid and binding obligation of such Party, enforceable against such Party in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

(c)       No Conflict; Consents. The execution and delivery by such Party of this Agreement does not, and the consummation of the transactions contemplated hereby will not

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(i) conflict with, violate or constitute a breach or default under the Organizational Documents of such Party or, in any material respect, any applicable agreement to which such Party is a party, or (ii) violate any judgment, order, decree or Law applicable to such Party. No consent, approval, authorization, order, filing, registration or qualification of or with any Governmental Authority or other Person is required to be obtained in connection with the execution and delivery of this Agreement by such Party or the performance of such Party’s obligations hereunder.

ARTICLE VI.

INDEMNIFICATION

Section 6.1 Indemnification.

(a)       Subject to the limitations of this Article VI, TerreStar shall indemnify and hold harmless SkyTerra and its officers, directors, employees, agents, successors, assigns and Affiliates (each, an “Indemnified Party”), against any losses, claims, damages, liabilities, actions, judgments, causes of action, costs or expenses (collectively, “Losses”), net of amounts actually received by the Indemnified Party in indemnification or insurance from third parties, incurred or suffered by the Indemnified Party as a result of or relating to any Indemnifiable Claim.

(b)       If an Indemnified Party receives notice from any third party with respect to, or otherwise becomes aware of, an Indemnifiable Claim, then the Indemnified Party shall promptly (but in any event no later than 5 days after receipt of such notice) notify TerreStar thereof in writing; provided, however, that no delay on the part of the Indemnified Party in so notifying TerreStar shall relieve TerreStar from any obligation under this Article VI unless (and then solely to the extent that) TerreStar is thereby prejudiced.

(c)       TerreStar shall have the right (except as otherwise provided herein) to assume the defense of the Indemnifiable Claim with counsel of its choice, at any time within 15 days after the Indemnified Party has given notice to TerreStar of the Indemnifiable Claim; provided, however, that the Indemnified Party may retain one separate counsel (i) at its sole cost and expense and participate in the defense of the Stockholders Claim, or (ii) if the Indemnified Party has reasonably concluded that a conflict exists between the Indemnified Party and TerreStar that would prevent the counsel selected by TerreStar from representing the Indemnified Party, or if the Indemnified Party has reasonably concluded that there may be material legal defenses available to it that are different from or additional to those available to TerreStar, in which case TerreStar will be responsible for the cost of expense of such separate counsel and TerreStar will not have the right to direct the defense of such action on behalf of the Indemnified Party.

(d)       TerreStar will not, without the prior written consent of the Indemnified Party (which consent will not be unreasonably withheld), consent to the entry of judgment or enter into any settlement or compromise in respect of which indemnification has been sought hereunder, unless such settlement or compromise includes an unconditional release of the Indemnified Party and each controlling person thereof from all liability arising out the Indemnifiable Claim. The Indemnified Parties will not be liable for any settlement of any action or claim effected in violation of the previous sentence. TerreStar will not be liable for any

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settlement of any action or claim effected without its written consent (which consent shall not be unreasonably withheld).

Section 6.2 Limitations.

(a)       In no event shall any Indemnified Party be entitled under this Article VI to recover any punitive, incidental, consequential, indirect, exemplary or other special damages, damages representing lost profits, revenue, income or opportunities, business interruption, or harm to reputation, or any similar amounts.

(b)       Indemnification pursuant to this Article VI shall be the sole and exclusive remedy of the Indemnified Parties against TerreStar and its employees, directors, officers, agents and other representatives in respect of any Indemnifiable Claim.

(c)       For the avoidance of doubt, the rights of the Indemnified Parties under Section 6.1 are personal to such Persons, may not be assigned (other than to successor corporations) and are not intended to benefit any other Person, including Transferees of Networks Shares.

ARTICLE VII.

GENERAL PROVISIONS

Section 7.1      Public Announcements. The Parties shall consult with each other before issuing, and provide each other the opportunity to review and comment upon, any press release or other public statement with respect to the transactions contemplated hereby, and shall not issue any such press release or make any such public statement prior to such consultation, except as may be required by applicable Law. Each Party shall be permitted to describe this Agreement and the transactions contemplated hereby in a Current Report on Form 8-K to be filed with or furnished to the Securities and Exchange Commission, but each Party shall provide a draft of such report to the other, with opportunity to provide comments, prior to such filing.

Section 7.2      Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party.

Section 7.3      Fees and Expenses. Each of the Parties acknowledges and agrees that such Party is responsible for bearing and paying its own legal fees and any other expenses incurred in connection with negotiating, executing and implementing this Agreement. Nothing in this Section 7.3 shall preclude a Party from making a claim for or recovering legal expenses incurred in connection with enforcement of its rights and remedies under this Agreement in a court of law or other legal proceeding, arbitration or mediation.

Section 7.4      Waiver. No failure or delay of either Party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties hereunder are cumulative and

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are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of either Party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

Section 7.5      Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon written confirmation of receipt by facsimile or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

(i) if to TerreStar, to:

TerreStar Corporation

12010 Sunset Hills Road

Reston, VA 20910

Attention: General Counsel

with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166

Attention: David M. Wilf

(ii) if to SkyTerra, to:

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, VA 20191

Attention: General Counsel

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, NY 10036

Attention: Gregory A. Fernicola and Michael J. Zeidel

Section 7.6      Interpretation. When a reference is made in this Agreement to a Section, Article or Exhibit such reference shall be to a Section, Article or Exhibit of this Agreement unless otherwise indicated. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this

10

Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified.

Section 7.7      Entire Agreement. This Agreement (including the Exhibits hereto) constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the Parties with respect to the subject matter hereof and thereof. This Agreement shall not be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby other than those expressly set forth herein or in any document required to be delivered hereunder, and none shall be deemed to exist or be inferred with respect to the subject matter hereof. Notwithstanding any oral agreement or course of action of the Parties or their representatives to the contrary, no Party to this Agreement shall be under any legal obligation to enter into this Agreement unless and until this Agreement shall have been executed and delivered by each of the Parties.

Section 7.8      No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties and their respective successors and permitted assigns, and other than the Indemnified Parties, any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

Section 7.9      Assignment; Successors. This Agreement will bind and inure to the benefit of the Parties and their respective successors, and permitted assigns. No Party will assign any rights or delegate any obligations hereunder without the consent of the other Parties. Except as otherwise expressly provided herein, nothing in this Agreement is intended to or will confer any rights or remedies on any Person other than the Parties and their respective successors and permitted assigns.

Section 7.10    Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the Parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement in the United States District Court for the Southern District of New York or the applicable New York state court located in New York County (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), this being in addition to any other remedy to which such Party is entitled at law or in equity. Each of the Parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any law to post security as a prerequisite to obtaining equitable relief.

Section 7.11    Governing Law; Consent to JurisdictionSection 7.12   . This Agreement shall be governed by and construed in accordance with the Law of the State of New York without regard to any applicable principles of conflicts of law.  Each Party agrees that, in connection with any legal suit or proceeding arising with respect to this Agreement, it shall submit to the non-exclusive jurisdiction of the United States District

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Court for the Southern District of New York or the applicable New York state court located in New York County and agrees to venue in such courts.

Section 7.13    Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

Section 7.14    Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 7.15    Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, TerreStar and SkyTerra have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

TERRESTAR CORPORATION
By:	/s/ Jeffrey W. Epstein
	Name: Jeffrey W. Epstein
	Title: President

SKYTERRA COMMUNICATIONS, INC.
By:	/s/ Scott Macleod
	Name: Scott Macleod
	Title: Executive Vice President and Chieft
	Financial Officer

[Signature Page to Agreement]

Exhibit A

Other Investors Letter Agreement

[Attached]

A-1

September 15, 2008

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Attention: General Counsel

Gentlemen:

Reference is made to that certain Stock Purchase Agreement (the “Stock Purchase Agreement”), dated as of September 15, 2008, by and among ? (“Investor”) and Motient Ventures Holding, Inc. (“Motient”), pursuant to which Investor will purchase from Motient ? shares (the “Purchased Shares”) of the non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”) of SkyTerra Communications, Inc. (the “Company”).

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Letter Agreement hereby agrees as follows:

1. Exchange of Shares.

a.         As soon as reasonably practicable following the Closing but not later than the third business day following the Closing, the Company will exchange all of the Purchased Shares for shares of the Company’s voting common stock, par value $0.01 per share (the “Voting Common Stock”) on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the “Exchanged Shares”). Upon surrender of certificates representing the shares of Non-Voting Common Stock that are being exchanged, the Company will issue to Investor certificates representing the appropriate number of shares of Voting Common Stock registered in the name of such Investor or such other Person as the Stockholder may designate. The shares of Voting Common Stock issuable upon exchange for the shares of Non-Voting Common Stock will have been duly authorized by the Company and, when delivered in accordance with the terms of this Letter Agreement and upon surrender of the Purchased Shares to the Company, will be validly issued, fully paid and nonassessable.

b.         The certificates representing the Voting Common Stock issued pursuant to Section 1(a) will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE

A-2

APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER, HAS BEEN DELIVERED TO THE ISSUER AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

2.         Registration Rights. The Company shall enter into a registration rights agreement with the Investor and the other investors (excluding Harbinger Capital Partners and its affiliates) purchasing an aggregate of 6,300,000 shares of Non-Voting Common Stock from Motient on the date hereof, with respect to the Exchanged Shares (excluding any shares of Non-Voting Common Stock) substantially in the form of the Registration Rights Agreement attached as Exhibit A hereto, and such registration rights shall not obligate the Company to consummate or assist in any underwritten offering.

3.         Company Consent. Based on the accuracy of the Investor’s representations and warranties contained herein, the Company hereby agrees and consents in all respects to the sale of the Purchased Shares to Investor on the date hereof.

4.         Company Representations and Warranties. The Company hereby represents and warrants to the Investor as follows:

a.         Authority. The Company has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Letter Agreement by the Company, the performance of the Company’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of the Company. This Letter Agreement has been duly executed and delivered by the Company and, assuming the due authorization, execution and delivery of this Letter Agreement by Investor, constitutes a valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

b.         No Conflict. The execution and delivery of this Letter Agreement and the exchange of the Purchased Shares by the Company for the Exchanged Shares pursuant to Section 1(a) will not violate any material contract of the Company, except as would not have a material adverse effect.

5.         Investor Representations and Warranties. Investor hereby represents and warrants to the Company as follows:

a.         Authority. Investor has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Letter Agreement by Investor, the performance of Investor’s obligations hereunder and the consummation of the transactions contemplated hereby have been

A-3

duly authorized by all necessary action of Investor. This Letter Agreement has been duly executed and delivered by Investor and, assuming the due authorization, execution and delivery of this Letter Agreement by the Company, constitutes a valid and binding obligation of Investor, enforceable against Investor in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

b.         Investment Intent. Investor agrees that the Exchanged Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933 (the “Securities Act”) and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. Investor is able to bear the economic risk of holding the Exchanged Shares for an indefinite period (including total loss of its investment), and (either alone or together with its representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment. Investor’s acquisition of the Exchanged Shares will not require any registration under the Securities Act.

c.         Investor’s Investigation and Reliance. Investor is a sophisticated purchaser and has made its own investigation, review and analysis regarding the Company and the Exchanged Shares. Investor is not relying on any statement, representation or warranty, oral or written, express or implied, made by the Company or its affiliates or representatives, except as expressly set forth in this Agreement.

d.         Government Approvals. Investor’s acquisition of the Exchanged Shares does not require the consent, approval, authorization or order of, or the filing, registration or qualification of Investor with, any governmental authority, except for those which have already been received or made. Investor’s acquisition of the Exchanged Shares does not require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and does not violate any rule or regulation of the Federal Communications Commission.

e.         No Conflict. The execution and delivery of this Letter Agreement and the exchange of the Purchased Shares by the Company for the Exchanged Shares pursuant to Section 1(a) will not violate any material contract of the Investor, except as would not have a material adverse effect.

f.         Company Stock Ownership. Immediately prior to Investor’s acquisition of the Purchased Shares from Motient, Investor owned ? shares of Non-Voting Common Stock and ? shares of Voting Common Stock. Investor is not a party to any agreement and has no understanding or arrangement other than the Stock Purchase Agreement and this Letter Agreement with respect to shares of the Company’s capital stock, voting rights thereupon, economic interest therein or purchases thereof.

g.         No Harbinger Affiliation. Investor is not a member or an affiliate of Harbinger Capital Partners or its affiliates.

6.         Investor Acknowledgement. The Investor hereby acknowledges that it has no rights under the Exchange Agreement among TerreStar Corporation (“TerreStar”), Motient and

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the Company, dated as of May 6, 2006, and that it shall not be entitled to any representation on the board of directors of the Company or any of its subsidiaries, including Mobile Satellite Ventures LP (“MSV”), or to any information rights with respect to the Company any of its subsidiaries, including MSV, to which TerreStar or its subsidiaries would otherwise be entitled pursuant to the such agreement.

This Letter Agreement constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and contemporaneous, arrangements, covenants, promises, conditions, undertakings, inducements, representations, warranties and negotiations, expressed or implied, oral or written, between the parties to this Letter Agreement, with respect to the subject matter hereof.

Each of the parties hereto shall, upon request of the other party, execute and deliver to the requesting party any additional documents and take such further actions (including delivering instructions to any depositary or securities intermediary) as the requesting party may deem to be necessary or desirable to effect the transactions contemplated hereunder or to ensure compliance with the terms hereof.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the domestic substantive law of any other jurisdiction.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Letter Agreement. Facsimile and electronic signatures on this Letter Agreement shall be deemed original signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of the date and year first above written.

By:

Acknowledged by:

SKYTERRA COMMUNICATIONS, INC.

By:

:

[SIGNATURE PAGE TO LETTER AGREEMENT] IMS_FOOTERDIVEND

Exhibit A

Form of Registration Rights Agreement

Exhibit B

Form of Joinder Agreement

[Attached]

[Transferee’s Address]

[Date]

TerreStar Networks, Inc.

TerreStar Corporation

12010 Sunset Hills Road

Reston, VA 20910

Re: Transfer of Networks Shares

Ladies and Gentlemen:

Reference is made to the Agreement for Transfer and Exchange, dated as of September o, 2008, between TerreStar Corporation and SkyTerra Communications, Inc. (the “Agreement”). Capitalized terms not defined herein have the meanings set forth in the Agreement.

The undersigned (“Transferee”) wishes to acquire o Networks Shares (the “Transferred Shares”) from o (“Transferor”; such Transfer, the “Current Transfer”). In order to induce Networks and TerreStar to permit the Current Transfer, Transferee hereby undertakes to be bound by Section 2.1 of the Agreement and not to Transfer any Networks Shares other than as permitted thereby.

Transferee represents and warrants to Networks and TerreStar as follows: (a) Transferee is a [] duly organized, validly existing and in good standing under the Laws of [

] and has all requisite power, authority to enter into this Joinder Agreement and to consummate the Current Transfer; (b) the execution and delivery of this Joinder Agreement by Transferee, the compliance by Transferee with the terms hereof, and the consummation of the Current Transfer have been duly authorized by all necessary action of Transferee; (c) this Joinder Agreement has been duly executed and delivered by Transferee and constitutes a valid and binding obligation of Transferee, enforceable against Transferee in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity; (d) the execution and delivery by Transferee of this Joinder Agreement and Transferee’s compliance with the terms hereof does not and will not (i) conflict with, violate or constitute a breach or default under the Organizational Documents of Transferee or any applicable material agreement to which Transferee is a party, or (ii) violate any material judgment, order, decree or Law applicable to Transferee, except in the case of (ii) or (iii) as would not have a material adverse effect on the Transferee; (e) no consent, approval, authorization, order, filing, registration or qualification of or with any Governmental Authority or other Person is required to be obtained by the Transferee in connection with the execution and delivery of this Joinder Agreement by Transferee, the performance of Transferee’s obligations hereunder or the consummation of the Current Transfer, other than [list applicable governmental approvals] with respect to the Current Transfer; (f) Transferee is not a member of Harbinger or an Affiliate of Harbinger; and (g) and Transferee and its Affiliates do not own, and have no rights to acquire, any securities of TerreStar or Networks having the right to vote, or securities convertible into or exchangeable for such securities, except [].

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Transferee agrees to supply TerreStar and Networks such information as they may reasonably request in order to confirm the accuracy of such representations and warranties.

Very truly yours,

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Exhibit C

Form of Letter Agreement with Harbinger

[Attached]

C-1

Execution Copy

Harbinger Capital Partners Master Fund I, Ltd.

Harbinger Capital Partners Special Situations Fund, L.P.

Harbinger Capital Partners Fund I, L.P.

Harbinger Co-Investment Fund, L.P.

555 Madison Avenue, 16th Floor

New York, New York 10022

September 16, 2008

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Attention: General Counsel

Gentlemen:

Reference is made to that certain Stock Purchase Agreement (the “Harbinger Purchase Agreement”), dated as of September 12, 2008, by and among Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master”), Harbinger Capital Partners Special Situations Fund, L.P. (“Harbinger Special” and, together with Harbinger Master, “Harbinger”) and Motient Ventures Holding Inc. (“Motient”), pursuant to which Harbinger will purchase from Motient 23,376,074 shares (the “Purchased Shares”) of the non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”) of SkyTerra Communications, Inc. (the “Company”).

Reference is also made to that certain Letter Agreement (the "Initial Letter Agreement"), dated as of September 12, 2008, by and among Harbinger and the Company, pursuant to which the Company (i) agreed to exchange the Purchased Shares for shares of Voting Common Stock (as hereinafter defined), (ii) agreed to amend the Registration Rights Agreements (as hereinafter defined) to include the Purchased Shares in the definition of 'Registrable Shares', and (iii) consented to the purchase of the Purchased Shares by Harbinger pursuant to the Harbinger Purchase Agreement.

Reference is also made to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated as of July 24, 2008 and as may be amended from time to time, by and among Harbinger Master, Harbinger Special, Harbinger Co-Investment Fund, L.P. (“Satellite Fund”), Harbinger Capital Partners Fund I, L.P. (“Capital Fund” and, collectively with Harbinger and Satellite Fund, the “Securityholders”) and the Company, pursuant to which the Company has granted the Securityholders certain registration rights with respect to certain securities issued or to be issued by the Company.

Further reference is made to that certain Exchange Agreement (the “Exchange Agreement”), dated as of May 6, 2006, by and among TerreStar Corporation (f/k/a Motient Corporation) (“TerreStar”), Motient and the Company pursuant to which the Company purchased from Motient 9,034,848.51 limited partnership units of Mobile Satellite Ventures, LP (“MSV”) and 1,572.11 shares of common stock of Mobile Satellite Ventures GP, Inc. in exchange for 25,478,273 shares of the Company’s Non-Voting Common Stock exchangeable in

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certain circumstances for an equal number of shares of the Company’s Voting Common Stock (as defined below).

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Letter Agreement hereby agrees as follows:

1.         Other Shares. Pursuant to Section 2.6 of the Harbinger Purchase Agreement, Harbinger has agreed to purchase from Motient an additional 250,000 shares (the "Additional Shares") of Non-Voting Common Stock. Such Additional Shares shall be held in escrow by the Collateral Agent (as hereinafter defined) for the benefit of Harbinger, pending receipt of the FCC Consent (as hereinafter defined). None of the Additional Shares are being exchanged for shares of Voting Common Stock on the date hereto.

2. Exchange of Shares.

(a)       At any time and from time to time after the date of this Letter Agreement, at the request of Harbinger or any Affiliate of Harbinger (each a "Harbinger Affiliate" and collectively with Harbinger, each a "Stockholder"), upon the certification of Harbinger or such Harbinger Affiliate to SkyTerra of the representation and warranty contained in Section 4(c) with respect to such entity as of such date, the Company will exchange all or part of the Additional Shares for shares of the Company's voting common stock, par value $0.01 per share (the "Voting Common Stock", and together with the Non-Voting Common Stock , the "Common Stock") on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the "Exchanged Shares").

In the event that Harbinger is unable to obtain the consent of the Federal Communications Commission ("FCC") authorizing Harbinger to own up to 100% of the Common Stock of the Company (the "FCC Consent"), which is required in order for Harbinger to take title to the Additional Shares, and the Collateral Agent (as hereinafter defined) in possession of such Additional Shares sells some or all of the Additional Shares to a third party (such third party, also a "Stockholder"), then the Company agrees that at any time and from time to time, at the request of such third party, the Company will exchange all or part of such Additional Shares for shares of Voting Common Stock on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) provided that such third party provides to SkyTerra a certification of the representations and warranties contained in Section 4 with respect to such third party as of such date. Upon surrender of certificates representing the shares of Non-Voting Common Stock that are being exchanged, the Company will issue to such Stockholder certificates representing the appropriate number of shares of Voting Common Stock registered in the name of such Stockholder or such other Person as the Stockholder may designate. The shares of Voting Common Stock issuable upon exchange for the shares of Non-Voting Common Stock will have been duly authorized by the Company and, when delivered in accordance with the terms of this Letter Agreement and upon surrender of the Additional Shares to the Company, will be validly issued, fully paid and nonassessable.

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For the purposes of this Letter Agreement, "Collateral Agent" shall mean Goldberg, Godles, Wiener & Wright .

(b)       The certificates representing the Voting Common Stock issued pursuant to Section 1(a) will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER, HAS BEEN DELIVERED TO THE ISSUER AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

(c)       If the issuance of shares of Voting Common Stock to any Stockholder pursuant to Section 1(a) would conflict with, violate or constitute a breach or default under FCC rules or regulations to which the Company or any of its subsidiaries is subject; violate any judgment, order, decree or law applicable to the Company or any of its subsidiaries; or delay or otherwise adversely impact any consent, approval, or filing of the Company or its subsidiaries with the FCC, then the Company shall issue the maximum number of shares of Voting Common Stock pursuant to Section 1(a) that can be issued without causing such conflict, violation, breach, delay or adverse impact, or without receipt of such consent or approval, or pursuant to such consent or approval.

3.         Registration Rights Agreement. As promptly as reasonably practicable, the Company and Harbinger shall take all actions necessary to amend the definition of “Registrable Shares” in the Registration Rights Agreement to include the Additional Shares to be purchased by Harbinger pursuant to the Harbinger Purchase Agreement. In the event that Harbinger is unable to obtain the FCC Consent, and the Collateral Agent sells some or all of the Additional Shares to a third party, the Company agrees, as promptly as reasonably practicable following such sale, to take all actions necessary to enter into a customary registration rights agreement with such third party, providing for a shelf resale registration statement with respect to such Additional Shares. Such agreement shall be in substantially the form of the registration rights agreement being entered into by the Company with investors purchasing an aggregate of 6,300,000 shares of the Company’s common stock from Motient pursuant to the Letter Agreements dated the date hereof (the “Other Investors Letter Agreement”), and such registration rights shall not obligate the Company to consummate or assist in any underwritten offering.

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4.         Company Consent. The Company hereby agrees and consents in all respects to the sale of the Additional Shares to Harbinger pursuant to the terms and conditions of the Harbinger Purchase Agreement as such agreement is in effect on the date hereof.

5.         Harbinger Representations and Warranties. Harbinger hereby represents and warrants to the Company as follows:

(a) Authority. Harbinger has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Letter Agreement by Harbinger, the performance of Harbinger’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of Harbinger. This Letter Agreement has been duly executed and delivered by Harbinger and, assuming the due authorization, execution and delivery of this Letter Agreement by the Company, constitutes a valid and binding obligation of Harbinger, enforceable against Harbinger in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

(b) Investment Intent. Harbinger agrees that the Additional Shares and the Exchanged Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933 (the “Securities Act”) and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. Harbinger is able to bear the economic risk of holding the Exchanged Shares for an indefinite period (including total loss of its investment), and (either alone or together with its representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares will not require any registration under the Securities Act.

(c) Government Approvals. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require the consent, approval, authorization or order of, or the filing, registration or qualification of Harbinger with, any governmental authority, except for those which have already been received or made. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and does not violate and rule or regulation of the FCC.

6.         Harbinger Acknowledgement. Harbinger hereby acknowledges that it has no rights under the Exchange Agreement (except to the extent it has any rights in its role as a stockholder of TerreStar), and that it shall not be entitled to any representation on the board of directors of the Company or any of its subsidiaries, including MSV, or to any information rights with respect to the Company any of its subsidiaries, including MSV, to which TerreStar or its subsidiaries would otherwise be entitled pursuant to the Exchange Agreement.

7.         No Material Adverse Effect. No suit, action, investigation or other proceeding or event arising out of, related to or in connection with any transactions contemplated by this Letter Agreement, the Exchange Agreement, the Initial Letter Agreement or the Other Investors Letter Agreements, including any claims or consequences relating to or resulting from such transactions, and no breach or violation of this Letter Agreement, the Exchange Agreement, the

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Initial Letter Agreement or the Other Investors Letter Agreements, shall be deemed to constitute a breach of, or form the basis for the termination of, or constitute or otherwise form the basis of a “Material Adverse Effect” under, either the Master Contribution and Support Agreement, dated July 24, 2008, among the Company, MSV, Mobile Satellite Ventures Subsidiary LLC, Harbinger, Harbinger Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P., or the Securities Purchase Agreement, dated as of July 24, 2008, among MSV, Mobile Satellite Ventures Finance Co., a Delaware corporation, and Harbinger.

This Letter Agreement, together with the Initial Letter Agreement, constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and contemporaneous, arrangements, covenants, promises, conditions, undertakings, inducements, representations, warranties and negotiations, expressed or implied, oral or written, between the parties to this Letter Agreement and the Initial Letter Agreement, with respect to the subject matter hereof.

Each of Harbinger and its affiliates, on the one hand, and the Company, on the other hand, shall, upon request of the other party, execute and deliver to the requesting party any additional documents and take such further actions (including delivering instructions to any depositary or securities intermediary) as the requesting party may deem to be necessary or desirable to effect the transactions contemplated hereunder or to ensure compliance with the terms hereof.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the domestic substantive law of any other jurisdiction.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Letter Agreement. Facsimile and electronic signatures on this Letter Agreement shall be deemed original signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of the date and year first above written.

HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD.
By:	Harbinger Capital Partners Offshore
	Manager, L.L.C., as investment Manager
By:
Name:
Title:

HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P.
By:	Harbinger Capital Partners Special Situations
	GP, LLC, as general partner
By:
Name:
Title:

[SIGNATURE PAGE TO LETTER AGREEMENT]

HARBINGER CAPITAL PARTNERS FUND I,
L.P.
By:	Harbinger Capital Partners GP, LLC, as
	General partner
By:

HARBINGER CO-INVESTMENT FUND, L.P.,
By:	Harbinger Co-Investment LP, LLC, as general partner
By:	HMC – New York, Inc., as managing member
By:
Name:
Title:

Acknowledged by:

SKYTERRA COMMUNICATIONS, INC.

By:

Name:

Title:

[SIGNATURE PAGE TO LETTER AGREEMENT]

Exhibit D

FORM OF EXCHANGE AND REGISTRATION AGREEMENT

EXCHANGE AND REGISTRATION AGREEMENT, dated as of [          ] (this “Agreement”), between TERRESTAR CORPORATION, a Delaware corporation (“TerreStar”) and [], a [] (“Holder” and, together with TerreStar, the “Parties”).

RECITALS

WHEREAS, TerreStar is a party to an Agreement for Transfer and Exchange (the “Transfer Agreement”), dated as of September 12, 2008, with SkyTerra Communications Inc., which, subject to the terms and conditions thereof, permits MSV Investors, LLC, a Delaware limited liability company, and its transferees to transfer the shares of common stock, par value $0.001 per share (“Networks Common Stock”), of TerreStar Networks, Inc., a Delaware corporation (“Networks”), owned by them, and in accordance with which Holder has acquired and now holds [] shares of Networks Common Stock (the “Networks Shares”).

WHEREAS, Holder desires to exchange the Networks Shares for shares of common stock, par value $0.01 per share, of TerreStar (“TerreStar Common Stock”), and to have the right to register for resale of the TerreStar Common Stock it will receive.

WHEREAS, subject to the terms thereof, the Transfer Agreement requires TerreStar to enter into this Agreement upon the request of Holder.

AGREEMENT

In consideration of the foregoing and the mutual covenants and agreements contained herein and in the Transfer Agreement, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE VIII.

DEFINITIONS

Section 8.1 Certain Defined Terms. For purposes of this Agreement:

“Affiliate” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first Person.

“Agreement” has the meaning set forth in the preamble.

“Appraised Value” per share of TerreStar Common Stock as of a date shall mean the value of such a share as of such date as determined by an investment bank of nationally recognized standing reasonably selected by the Investors and reasonably acceptable to TerreStar, except that, if the investment bank selected by the Investors is not reasonably acceptable to

D-1

TerreStar, and TerreStar and the Investors cannot agree on a mutually acceptable investment bank, then TerreStar and the Investors shall each choose one such investment bank and the respective chosen firms shall jointly select a third investment bank, which shall make the determination. The costs and fees of each such investment bank shall be shared equally between TerreStar, on the one hand, and the Investors affected by the determination, on the other hand, and the decision of the investment bank making such determination of Appraised Value shall be final and binding on TerreStar and all affected Investors. Appraised Value shall be determined as a pro rata portion of the value of TerreStar taken as a whole, based on the value derived from a hypothetical sale of TerreStar as a going concern by a willing seller to a willing buyer (neither acting under any compulsion), without any premium or discount on account of (i) any share(s) of TerreStar Common Stock representing a minority interest or contributing to a controlling interest, (ii) any lack of liquidity of TerreStar Common Stock, (iii) the fact that TerreStar Common Stock may constitute “restricted securities” for securities law purposes or (iv) the registration and other rights granted hereunder.

“Business Day” means any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by Law to be closed in The City of New York.

“Closing” has the meaning set forth in Section 9.2(a).

“Closing Date” has the meaning set forth in Section 9.2(a).

“control,” including the terms “controlled by” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, as trustee or executor, as general partner or managing member, by contract or otherwise.

“Current Market Price” shall mean, as of any specified date, (i) if the TerreStar Common Stock is then listed on a national securities exchange, the last sale price of one share of TerreStar Common Stock, regular way, on such day on the principal stock exchange or market system on which such TerreStar Common Stock is then listed or admitted to trading, or, if no such sale takes place on such day, the average of the closing bid and asked prices for one share of TerreStar Common Stock on such day as reported on such stock exchange or market system, or (ii) if the TerreStar Common Stock is not then listed or admitted to trading on any national securities exchange but is traded over-the-counter, the average of the closing bid and asked prices for one share of TerreStar Common Stock as reported on the Electronic Bulletin Board or in the National Daily Quotation Sheets, as applicable.

“Deferral Notice” has the meaning set forth in Section 6.2(b).

“Demand Period” has the meaning set forth in Section 6.1(a).

“Encumbrance” means any charge, claim, mortgage, lien, option, pledge or security interest, whether or not filed, recorded or otherwise perfected under applicable Law, or any proxy, voting agreement, voting trust, or other restriction of any kind (other than those created under applicable securities Laws).

“Exchange” has the meaning set forth in Section 2.2.

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“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Exchange Ratio” has the meaning set forth in Section 9.1.

“Fair Value” per share of TerreStar Common Stock as of any specified date shall mean (A) if the TerreStar Common Stock is publicly traded on such date, the Current Market Price per share, or (B) if the TerreStar Common Stock is not publicly traded on such date, (1) the fair market value per share of TerreStar Common Stock as determined in good faith by the Board of Directors of TerreStar and set forth in a written notice (including the reasoning and basis for such determination) to the Investors, or (2) if the any of the Investors objects in writing to such price as determined by the Board of Directors within thirty (30) days after receiving notice of same, the Appraised Value per share as of such date.

“Governmental Authority” means any United States or non-United States national, federal, state or local governmental, regulatory or administrative authority, agency or commission or any judicial or arbitral body.

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

“Inspector” has the meaning set forth in Section 6.1(e)(ii).

“Investors” means, collectively, Holder and the “Holders” under all Other Agreements.

“Investors Shares” means the Registrable Shares hereunder and the “Registrable Shares” under any Other Agreement.

“Law” means any statute, law, ordinance, regulation, rule, code, injunction, judgment, decree or order of any Governmental Authority.

“Lien” has the meaning set forth in the Transfer Agreement.

“Material Event” has the meaning set forth in Section 6.2(a)(iv).

“Networks” has the meaning set forth in the recitals.

“Networks Common Stock” means the shares of common stock, par value $0.001 per share, of Networks.

“Networks Shares” has the meaning set forth in the recitals.

“Nonregistration Day” means, with respect to any Registrable Share, without duplication, whether or not consecutive, any day (i) on which a Registration Request has previously been made, (ii) which is (A) more than 30 days after the Request Date, if no Registration Statement has been filed with respect to such Registrable Share, or (B) more than 90 days after such Request Date, if no Registration Statement is effective with respect to such Registrable Share, (iii) on which no Deferral Notice is in effect, (iv) which is not in a

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Registration Break, (v) on which the Registrable Share is not a Cut Back Security, (vi) on which the Registrable Share may not be sold free of volume limitations pursuant to Rule 144 under the Securities Act and (vii) on which the Registrable Share is not deemed to have been sold pursuant to the last sentence of Section 6.7.

“Notice and Questionnaire” means a written notice delivered to TerreStar containing substantially the information called for by the Form of Notice and Questionnaire attached hereto as Exhibit A.

“Organizational Documents” of any Person means such person’s certificate of incorporation, bylaws, limited liability company agreement, partnership agreement or comparable documents.

“Other Agreements” means agreements, other than this Agreement, substantially in the form of this Agreement and entered into pursuant to the Transfer Agreement.

“Other Registration End Date” means the “Registration End Date” under any Other Agreement.

“Parties” has the meaning set forth in the preamble.

“Person” means an individual, corporation, partnership, limited liability company, limited liability partnership, syndicate, person, trust, association, organization or other entity, including any Governmental Authority, and including any successor, by merger or otherwise, of any of the foregoing.

“Piggyback Cut Back Securities” has the meaning set forth in ?Section 6.3(b).

“Piggyback Registration Statement” has the meaning set forth in ?Section 6.3(a).

“Prior Registration Agreement” means a written agreement which was in effect on September 12, 2008, obligating TerreStar to register securities with the SEC, and as to which TerreStar is advised by its counsel that such agreement requires TerreStar to grant priority in registration to the parties thereto over the registration rights for Investors Shares granted in this Agreement and the Other Agreements.

“Prospectus” means the prospectus included in any Registration Statement, as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.

“Records” has the meaning set forth in Section 6.1(d)(ii).

“Registrable Shares” means each TerreStar Share, from the later of the Closing Date and May 15, 2009, provided, however, that a TerreStar Share shall cease to be a Registrable Share when such share (i) may be sold without limitation as to volume, manner of sale or current public information pursuant to Rule 144 under the Securities Act or any comparable or successor rule, except that, solely for the purpose of the right to participate in an Underwritten Offering, a

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TerreStar Share shall continue to be a Registrable Share after such time (but not beyond the time specified in clause (ii) of this definition) for a period equal to the time when a Registration Break or Deferral Notice was in effect during the time when such share was a Registrable Share; or (ii) is sold pursuant to an effective registration statement or pursuant to another transaction in which the buyer of such shares receives such shares without a restrictive legend.

“Registration Break” has the meaning set forth in Section 6.1(b).

“Registration End Date” has the meaning set forth in Section 6.1(a).

“Registration Expenses” has the meaning set forth in ?Section 6.6.

“Registration Request” has the meaning set forth in Section 6.1(a).

“Registration Statement” means a Shelf Registration Statement or a registration statement which includes TerreStar Shares pursuant to Section 6.3.

“Representatives” means, with respect to any Person, the officers, directors, employees, agents, accountants, advisors, bankers and other representatives of such Person.

“Request Date” has the meaning set forth in Section 6.1(a).

“Required Approvals” means [ ]. 1

“SEC” means the United States Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended.

“Shelf Registration Statement” has the meaning set forth in Section 6.1(a).

“Subsidiary” means, with respect to any Person, any other Person of which at least 50% of the outstanding voting securities or other voting equity interests are owned, directly or indirectly, by such first Person.

“TerreStar” has the meaning set forth in the preamble.

“TerreStar Change of Control” means any event, occurrence or circumstance which is a “change of control” or “change in control” of TerreStar or of Networks within the meaning of (i) the Indenture, dated as of February 14, 2007, among Networks, as issuer, the guarantors party thereto and U.S. Bank National Association, as trustee, (ii) the Indenture, dated February 7, 2008, among Networks, as the issuer, TerreStar, certain subsidiaries of Networks and U.S. Bank National Association, as trustee, (iii) the Purchase Money Credit Agreement, dated February 5, 2008, among Networks, as the borrower, the guarantors party thereto from time to time and U.S. Bank National Association, as collateral agent, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P. and EchoStar Corporation,

_________________________

¹ Any approvals required by either party to be listed.

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as lenders, (iv) the Series B Cumulative Convertible Preferred Stock of TerreStar or (v) the Series A Cumulative Convertible Preferred Stock of TerreStar, in each case as amended from time to time (subject to Section 4.3(a) of the Transfer Agreement).

“TerreStar Common Stock” has the meaning set forth in the recitals.

“TerreStar Shares” has the meaning set forth in Section 9.1.

“TGL Shares” has the meaning set forth in the Transfer Agreement.

“Transfer Agreement” has the meaning set forth in the recitals.

“Underwritten Offering” means an offering in which securities of TerreStar are sold to one or more underwriters (as defined in Section 2(a)(11) of the Securities Act) for resale to the public in which (a) members of senior management of TerreStar (including the chief executive officer and chief financial officer) fully cooperate with the underwriter(s) in connection therewith and make themselves available to participate in “road-show” and other customary marketing activities in such locations (domestic and foreign) as recommended by the underwriter(s) (including one-on-one meetings with prospective purchasers of the shares), (b) TerreStar prepares and files with the SEC a registration statement, or preliminary and final prospectus supplements to any Shelf Registration Statement, for use in connection therewith containing such additional information as reasonably requested by the underwriter(s) (in addition to the minimum amount of information required by law, rule or regulation), (c) TerreStar causes its counsel to issue opinions of counsel, and its independent registered public accountants to deliver letters, in form, substance and scope as are customary in such underwritten offerings, addressed and delivered to the underwriter(s) and the Investor(s). An offering shall not count as an Underwritten Offering if the Investors participating therein are not able to sell at least 50% of the Investors Shares included in such Underwritten Offering (excluding any shares which are Cut Back Securities or “Cut Back Securities” as defined in Other Agreements, which shall be treated as described in Section 6.1(d)).

ARTICLE IX.

EXCHANGE OF NETWORKS SHARES

Section 9.1      Exchange of the Networks Shares. Subject to the terms and conditions hereof, at the Closing, TerreStar shall acquire from Holder, and Holder shall transfer to TerreStar, the Networks Shares, in exchange for a number of shares of TerreStar Common Stock (the “TerreStar Shares”) which is the product of the number of Networks Shares transferred by Holder to TerreStar at the Closing and 4.37 (the “Exchange Ratio”). The Exchange Ratio shall be appropriately adjusted for any stock split, combination, reorganization, recapitalization, reclassification, stock dividend, stock distribution or similar event declared or effected with respect to the TerreStar Shares or the Networks Shares between the date of the Transfer Agreement and the Closing Date.

Section 9.2 Closing.

(a)       The closing (the “Closing”) of the exchange of the Networks Shares for the TerreStar Shares (the “Exchange”) shall be held at the offices of Gibson, Dunn & Crutcher

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LLP, at 200 Park Avenue, New York, NY 10166, at 10:00 A.M., New York City time on the second Business Day following the satisfaction or, to the extent permitted by applicable Law, waiver of all conditions to the obligations of the parties set forth in ARTICLE VII (other than such conditions as may, by their terms, only be satisfied at the Closing or on the Closing Date), or at such other place or at such other time or on such other date as TerreStar and Holder mutually may agree in writing. The day on which the Closing takes place is referred to as the “Closing Date.”

(b)       At the Closing, (i) Holder shall deliver or cause to be delivered to TerreStar certificates representing the Networks Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed, and (ii) TerreStar shall deliver or cause to be delivered to Holder certificates representing the TerreStar Shares. TerreStar shall cause Networks to return to Holder a certificate representing any shares of Networks Common Stock represented by the certificates delivered by Holder which are not Networks Shares.

Section 9.3      [Restrictions on Transfers. Until May 15, 2009, Holder shall not sell, assign, transfer, pledge, encumber, hypothecate, mortgage, sell forward, hedge, enter into any sort of derivative contract pertaining to or otherwise dispose of, either voluntarily or involuntarily, in whole or in part, directly or indirectly, but not including a pledge or mortgage in favor of a financial institution which is a bona fide lender, any of the TerreStar Shares, or enter into any contract, option or other agreement, arrangement or understanding to do any of the foregoing.] 2

Section 9.4      Restrictive Legend. The certificates representing the TerreStar Shares will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER [THE EXCHANGE AND REGISTRATION AGREEMENT, DATED AS OF [], BETWEEN TERRESTAR CORPORATION AND [

],] THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED (EXCEPT TO A FINANCIAL INSTITUTION) OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A, RULE 145 OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE COMPANY, HAS BEEN DELIVERED TO THE COMPANY AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

_________________________

² To be removed in agreements entered into after May 15, 2009.

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ARTICLE X.

REPRESENTATIONS AND WARRANTIES

OF TERRESTAR

TerreStar hereby represents and warrants to Holder as follows:

Section 10.1    Organization and Good Standing of TerreStar. TerreStar is a corporation duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has all requisite power and authority to issue and sell the TerreStar Shares and to consummate the Closing.

Section 10.2    Authority.TerreStar has all requisite corporate power, authority and legal capacity to enter into this Agreement and to consummate the Closing and to perform its other obligations contained herein. The execution and delivery of this Agreement by TerreStar, the performance of TerreStar’s obligations hereunder and the consummation of the Closing have been duly authorized by all necessary action of TerreStar. This Agreement has been duly executed and delivered by TerreStar, and, assuming the due authorization, execution and delivery of this Agreement by Holder, constitutes a valid and binding obligation of TerreStar, enforceable against TerreStar in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to enforcement of creditors’ rights generally and by general principles of equity.

Section 10.3    No Conflict; Consents. The execution and delivery by TerreStar of this Agreement does not, and, assuming the receipt of the Required Approvals, the consummation of the Closing will not (i) conflict with, violate or constitute a breach or default under the Organizational Documents of TerreStar or any agreement to which TerreStar is a party or to which any of the TerreStar Shares are subject, or (ii) violate any material judgment, order, decree or Law applicable to TerreStar. Except for the Required Approvals, no consent, approval, authorization, order, filing, registration or qualification of or with any Governmental Entity or other Person is required to be obtained in connection with the execution and delivery of this Agreement by TerreStar or the performance of TerreStar’s obligations hereunder.

Section 10.4    Shares. The TerreStar Shares have been duly authorized and, when delivered to Holder against the Networks Shares in accordance with this Agreement, will be validly issued, fully paid, non-assessable and free and clear of any Encumbrance. Upon delivery to Holder of certificates representing the TerreStar Shares at the Closing, Holder’s delivery to TerreStar of certificates for the Networks Shares at the Closing and registration of the TerreStar Shares and the Networks Shares in the names of Holder and TerreStar in the stock records of TerreStar and Networks, respectively, Holder shall acquire good, valid and marketable title to the TerreStar Shares, free and clear of any Encumbrance other than Encumbrances created by Holder.

Section 10.5    No Brokers. No agent, broker, investment banker, financial advisor or other Person is or shall be entitled, as a result of any action, agreement or commitment of TerreStar or any of its Affiliates, to any broker’s, finder’s, financial advisor’s or other similar fee or commission in connection with the Exchange.

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ARTICLE XI.

REPRESENTATIONS AND WARRANTIES OF HOLDER

Holder hereby represents and warrants to TerreStar as follows:

Section 11.1    Organization and Good Standing of Holder. Holder is a o duly organized, validly existing and in good standing under the Laws of the jurisdiction of its organization and has all requisite power and authority to own the Networks Shares and to consummate the Closing.

Section 11.2    Authority. Holder has all requisite power, authority and legal capacity to enter into this Agreement and to consummate the Closing and to perform its other obligations contained herein. The execution and delivery of this Agreement by Holder, the performance of Holder’s obligations hereunder and the consummation of the Closing have been duly authorized by all necessary action of Holder. This Agreement has been duly executed and delivered by Holder, and, assuming the due authorization, execution and delivery of this Agreement by TerreStar, constitutes a valid and binding obligation of Holder, enforceable against Holder in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar Laws relating to enforcement of creditors’ rights generally and by general principles of equity.

Section 11.3    No Conflict; Consents. The execution and delivery by Holder of this Agreement does not, and, assuming receipt of the Required Approvals, the consummation of the Closing will not (i) conflict with, violate or constitute a breach or default under the Organizational Documents of Holder or, in any material respect, any applicable agreement to which Holder is a party or to which any of the Network Shares or the TerreStar Shares are subject, or (ii) violate any judgment, order, decree or Law applicable to Holder. Except for the Required Approvals, no consent, approval, authorization, order, filing, registration or qualification of or with any Governmental Entity or other Person is required to be obtained in connection with the execution and delivery of this Agreement by Holder or the performance of Holder’s obligations hereunder.

Section 11.4    Shares. Holder is the record and beneficial owner of the Networks Shares, free and clear of any Encumbrance, except for any Encumbrance created by the Transfer Agreement or that otherwise will be extinguished by the Closing. Holder has the right, authority and power to sell, assign and transfer the Networks Shares to TerreStar. Upon delivery to TerreStar of certificates for the Networks Shares at the Closing, TerreStar’s delivery to Holder of certificates for the TerreStar Shares at the Closing and registration of the Networks Shares and the TerreStar Shares in the names of TerreStar and Holder in the stock records of Networks and Holder, respectively, TerreStar, assuming it shall have purchased the Networks Shares for value in good faith and without notice of any adverse claim, shall acquire good, valid and marketable title to the Networks Shares, free and clear of any Encumbrance other than Encumbrances created by TerreStar.

Section 11.5    Investment Intent. Holder is acquiring the TerreStar Shares either for its own account for investment purposes only and not with a view to any public distribution thereof or with any intention of selling, distributing or otherwise disposing of the Shares in a manner that

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would violate the registration requirements of the Securities Act. Holder agrees that the TerreStar Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act and any applicable state securities Laws, except pursuant to an exemption from such registration under the Securities Act and such Laws. Holder is able to bear the economic risk of holding the TerreStar Shares for an indefinite period (including total loss of its investment), and (either alone or together with its Representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment.

Section 11.6    Holder’s Investigation and Reliance. Holder is a sophisticated purchaser and has made its own investigation, review and analysis regarding TerreStar, Networks, the TerreStar Shares, the Networks Shares and the transactions contemplated hereby, which investigation, review and analysis were conducted by Holder together with expert advisors, if any, that it has engaged for such purpose. In deciding to participate in the transactions contemplated to be undertaken at the Closing, Holder is not relying on any statement, representation or warranty, oral or written, express or implied, made by TerreStar or its Affiliates or Representatives, except as expressly set forth in this Agreement or TerreStar’s filings with the SEC. Neither TerreStar nor any of its Affiliates or Representatives is making, directly or indirectly, any representation or warranty with respect to any estimates, projections or forecasts involving TerreStar and its Subsidiaries. Holder recognizes that TerreStar may be in possession of material nonpublic information regarding itself, Networks, the TerreStar Shares or the Networks Shares which TerreStar has not communicated to Holder. Holder is aware that TerreStar is relying on the truth of the representations and warranties contained in this Section 4.6. Nothing in this Section 11.6 is intended to modify or limit any of the representations or warranties of TerreStar set forth in Article III of this Agreement.

Section 11.7    TerreStar Change of Control. Holder is not Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, L.P., or an Affiliate of either. All information provided by Holder to TerreStar pursuant to Section 5.2 shall be true and correct.

ARTICLE XII.

COVENANTS

Section 12.1 Consents and Filings; Further Assurances.

(a)       TerreStar shall use commercially reasonable efforts, in cooperation with Holder, to take, or cause to be taken, all appropriate action to do, or cause to be done, all things necessary, proper or advisable under applicable Law or otherwise to consummate and make effective the Closing as promptly as practicable, including to (i) obtain from Governmental Authorities and other Persons all consents, approvals, authorizations, qualifications and orders as are necessary for the consummation of the Closing, including any Required Approvals, and (ii) promptly make all necessary filings, and thereafter make any other required submissions, with respect to this Agreement required under the HSR Act or any other applicable Law. Holder shall be free to use for such purposes such efforts as it deems appropriate. Any filing fees required in connection with any such filings shall be paid by the party required to pay such fees under applicable Law, except that any filing fees under the HSR Act shall be paid by Holder.

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(b)       Nothing in ?Section 5.2(a) shall require any Party to agree or consent to the taking or refraining from taking of any action or engaging in or refraining from any conduct, or agreeing to any restriction, condition or conduct, including the disposition of any asset.

Section 12.2    Information Regarding Holder. Holder shall supply to TerreStar such information as TerreStar shall reasonably request in order to confirm that (i) the Closing would not cause a TerreStar Change of Control and (ii) the Closing will not require any registration under the Securities Act.

ARTICLE XIII.

REGISTRATION OF THE TERRESTAR SHARES

Section 13.1 Registration Request.

(a)       From the later of the Closing Date and May 15, 2009, and until May 15, 2014, if requested in writing by one or more Investors, including Holder, with respect to, in the aggregate, not less than 4.37 million Investors Shares (as appropriately adjusted for any stock split, combination, reorganization, recapitalization, reclassification, stock dividend, stock distribution or similar event declared or effected with respect to the TerreStar Shares or the Networks Shares) (such request, a “Registration Request” and the date thereof, the “Request Date”), which shall include a completed Notice and Questionnaire, TerreStar shall as promptly as practicable but in any event no later than the 30^th day after the Request Date file with the SEC a shelf registration statement (the “Shelf Registration Statement”) providing for the registration of, and the sale on a continuous or delayed basis by Holder of, the Registrable Shares to which the Registration Request relates, pursuant to Rule 415 under the Securities Act or any similar rule that may be adopted by the SEC. TerreStar shall use commercially reasonable efforts to cause the Shelf Registration Statement to become or be declared effective under the Securities Act as promptly as practicable but in no event later than 90 days after the Request Date and to keep the Shelf Registration Statement continuously effective until the earlier of (i) the time when all TerreStar Shares included on such Shelf Registration Statement are no longer Registrable Shares and (ii) the time when a Registration Statement has been in effect with respect to the Registrable Shares for periods totaling 1 year, not counting toward such year (A) any periods when a Deferral Notice is in effect or (B) any Registration Break (such date, the “Registration End Date”). Commercially reasonable efforts shall be deemed to have been used notwithstanding an inability to have the Shelf Registration Statement declared or kept effective due to an inability to obtain the consent of TerreStar’s accountants if TerreStar acts in good faith and after the use of commercially reasonable efforts to obtain such consent by TerreStar.

(b)       TerreStar may, at its option, decline to make available a Shelf Registration Statement during the period starting on any Other Registration End Date and ending on the earlier of (i) 3 months following such Other Registration End Date and (ii) the date when TerreStar shall file with the SEC any registration statement with respect to any of its securities (such a period, a “Registration Break”). If the 30- or 90-day period following the Request Date referred to in Section 6.1(a) expires during a Registration Break, TerreStar’s applicable obligation under Section 6.1(a) following the end of such 30- or 90-day period shall commence immediately upon the end of the Registration Break; any period of time that has elapsed between a Request Date and the start of such Registration Break shall count toward the 30- or 90-day

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period referred to in Section 6.1(a). If a Registration Statement became effective and then ceased to be effective due to a Registration Break, TerreStar shall be obligated to use commercially reasonable efforts cause the applicable Registration Statement to become or be declared effective under the Securities Act by the end of the Registration Break.

(c)       TerreStar shall cause the Shelf Registration Statement and the related Prospectus and any amendment or supplement thereto, as of the effective date of the Shelf Registration Statement or such amendment or supplement, (i) to comply in all material respects with the applicable requirements of the Securities Act; and (ii) not to contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein (in the case of the Prospectus, in the light of the circumstances under which they were made) not misleading, and TerreStar shall furnish to Holder copies of any supplement or amendment upon the request of Holder prior to its being used or promptly following its filing with the SEC; provided, however, that TerreStar shall have no obligation to deliver to Holder copies of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on TerreStar’s website (except in such instances in which TerreStar is correcting a material misstatement in any Registration Statement or Prospectus with respect to Holder’s shares of TerreStar Common Stock pursuant to Sections 6.2(a)(iv) and (ix)). If the Shelf Registration Statement, as amended or supplemented from time to time, ceases to be effective for any reason prior to the Registration End Date, TerreStar shall use commercially reasonable efforts, subject to Section 6.2(b), to obtain the prompt withdrawal of any order suspending the effectiveness thereof.

(d)       In the event that the SEC requires TerreStar, or counsel for TerreStar in good faith (after consultation with the SEC) advises that the SEC would require TerreStar, to reduce the amount of TerreStar securities to be included in a Shelf Registration Statement in order to allow TerreStar to have such sales be treated as secondary sales with respect to such Shelf Registration Statement so that not all Investors Shares and other TerreStar securities entitled by binding agreements in effect on September 12, 2008 to be included in such Shelf Registration Statement may be so included, then, if Holder consents in writing to be named as an “underwriter” in such Shelf Registration Statement, TerreStar shall be obligated to include in such Shelf Registration Statement any Registrable Shares requested to be included therein by Holder, and comply with the requirements of Section 6.1(e); if Holder does not consent in writing to be named as an “underwriter” in such Shelf Registration Statement, then, TerreStar shall be obligated to include in such Shelf Registration Statement (which may be a subsequent Registration Statement if TerreStar needs to withdraw the initial Registration Statement and re-file a new Registration Statement in order to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales) only such limited portion of the securities otherwise entitled to be included in the Shelf Registration Statement as the SEC shall or would permit. Any Registrable Shares that are excluded in accordance with the foregoing terms are hereinafter referred to as “Cut Back Securities.” In the event there are Cut Back Securities, the right to be included in the Registration Statement shall be allocated first, to any persons entitled to register securities pursuant to Prior Registration Agreements, and second, among the Investors, pro rata based on the percentage of such securities requested to be included therein or as TerreStar and the Investors may otherwise agree. To the extent Cut Back Securities exist, at the option of the Investors, TerreStar shall use commercially reasonable efforts to take one or more of the following actions: (i) re-file such Shelf Registration Statement on Form S-1 in order to register

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any Cut Back Securities (and withdraw the initially filed Shelf Registration Statement or amend it, as required) if such re-filing will permit TerreStar to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales with respect to such Shelf Registration Statement; (ii) conduct one additional Underwritten Offering in addition to that provided for in Section 6.2(h) for all Investors who wish to participate therein on the terms set forth in Section 6.2(h); and (iii) register the Cut Back Securities in accordance with the provisions of this Section 6.1 and Section 6.2 promptly when eligible to do so under applicable federal securities Law, subject to the allocation set forth above, as TerreStar and its securities counsel reasonably determine (in consultation with the Investors and their securities counsel), in each case, unless the Cut Back Securities cease to be Registrable Shares.

(e)       If Holder elects to be named as an “underwriter” in any Shelf Registration Statement pursuant to Section 6.1(c), then TerreStar shall:

(i)        cooperate with any reasonable due diligence investigation undertaken by Holder, Holder’s counsel and any attorney, accountant or other agent retained by Holder in connection with the filing of the Shelf Registration Statement and the sale of Registrable Shares thereunder, including making available any documents and information reasonably requested by Holder and its Representatives and making available members of TerreStar’s senior management for discussions with Holder;

(ii)       make available for inspection by Holder, and any attorney, accountant or other agent retained by such Holder (collectively, the “Inspectors”), all financial and other records, pertinent corporate documents and properties of TerreStar and any of its subsidiaries (collectively, the “Records”) as shall be reasonably necessary to enable them to exercise their due diligence responsibility, and cause the officers, directors and employees of TerreStar to supply all information reasonably requested by any such Inspector in connection with any registration hereunder, provided, however, that (i) in connection with any such inspection, any such Inspectors shall cooperate to the extent reasonably practicable to minimize any disruption to the operation by TerreStar of its business, and (ii) Records and information obtained hereunder shall be used by such Inspectors only to exercise their due diligence responsibility; and

(iii)      use commercially reasonable efforts to furnish to Holder a signed counterpart, addressed to such Holder of (i) an opinion or opinions of counsel to TerreStar and (ii) a comfort letter or comfort letters from TerreStar’s independent public accountants pursuant to Statement on Auditing Standards No. 72, each in customary form and covering such matters of the type customarily covered by opinions or comfort letters, as the case may be, as each such Holder and the managing underwriter, if any, reasonably requests.

Section 13.2 Procedures.

(a) TerreStar shall:

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(i)        prepare and file with the SEC the Shelf Registration Statement on any form which may be utilized by TerreStar and which shall permit the disposition of the Registrable Shares covered by the Shelf Registration Statement in accordance with the intended method or methods thereof, as specified in writing by Holder, and use commercially reasonable efforts to cause the Shelf Registration Statement to become effective in accordance with Section 6.1(a);

(ii)       before filing the Shelf Registration Statement or Prospectus or any amendments or supplements thereto with the SEC, furnish to Holder copies of all such documents proposed to be filed and consider for inclusion in such document when so filed with the SEC such comments as Holder shall have proposed within 3 Business Days of the delivery of such copies to Holder; provided, that if Holder elects to be named as an “underwriter” in any Shelf Registration Statement pursuant to Section 6.1(c), then TerreStar shall be obligated to include Holder’s comments in such Shelf Registration Statement or Prospectus, except that TerreStar shall not be required to include such Holder’s comments in such Shelf Registration Statement or Prospectus that are not, in the reasonable advice of nationally-recognized counsel for TerreStar experienced in such matters, advisable;

(iii)      use commercially reasonable efforts to prepare and file with the SEC such amendments and post-effective amendments to the Shelf Registration Statement and file with the SEC any other required document as may be necessary to keep the Shelf Registration Statement continuously effective until the Registration End Date; cause the related Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act; and comply with the provisions of the Securities Act applicable to it with respect to the disposition of all Registrable Shares covered by the Shelf Registration Statement in accordance with the intended methods of disposition by Holder set forth in the Shelf Registration Statement as so amended or such Prospectus as so supplemented;

(iv)      promptly notify Holder (A) when the Shelf Registration Statement or the Prospectus included therein or any amendment or supplement to the Prospectus or post-effective amendment has been filed with the SEC, and, with respect to the Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any request, following the effectiveness of the Shelf Registration Statement, by the SEC or any other Governmental Authority for amendments or supplements to the Shelf Registration Statement or related Prospectus, (C) of the issuance by the SEC of any stop order suspending the effectiveness of the Shelf Registration Statement or the initiation or written threat of any proceedings for that purpose, (D) of the receipt by TerreStar of any notification with respect to the suspension of the qualification of the Registrable Shares for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose, (E) of the occurrence of (but not the nature of or details concerning) any event or the existence of any fact (a “Material Event”) as a result of which the Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue

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statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, (F) of the determination by TerreStar that a post-effective amendment to the Shelf Registration Statement will be filed with the SEC, which notice may, at the discretion of TerreStar (or as required pursuant to Section 6.2(b)), state that it constitutes a Deferral Notice, in which event the provisions of Section 6.2(b) shall apply or (G) at any time when a Prospectus is required to be delivered under the Securities Act, that the Shelf Registration Statement, Prospectus, Prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the rules and regulations of the SEC thereunder;

(v)       use commercially reasonable efforts to register or qualify, or cooperate with Holder and its counsel in connection with the registration or qualification of, such Registrable Shares for offer and sale under the securities or blue sky Laws of such jurisdictions as Holder reasonably requests in writing, to the extent required by Law, and do any and all other acts or things reasonably necessary or advisable to enable the offer and sale in such jurisdictions of such Registrable Shares; prior to any public offering of the Registrable Shares pursuant to the Shelf Registration Statement, subject to Section 6.2(b), use commercially reasonable efforts to keep each such registration or qualification (or exemption therefrom) effective until the Registration End Date in connection with Holder’s offer and sale of Registrable Shares pursuant to such registration or qualification (or exemption therefrom) and do any and all other acts or things reasonably necessary or advisable to enable the disposition in such jurisdictions of such Registrable Shares in the manner set forth in the Shelf Registration Statement and the related Prospectus, to the extent required by Law; provided, that TerreStar will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to general service of process or to taxation in any such jurisdiction where it is not then so subject;

(vi)      use commercially reasonable efforts to prevent the issuance of, and if issued, to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement or any post-effective amendment thereto, and to lift any suspension of the qualification of Registrable Shares for sale in any jurisdiction in which they have been qualified for sale, in each case at the earliest practicable date;

(vii)     if reasonably requested by Holder, promptly incorporate in a prospectus supplement or post-effective amendment to the Shelf Registration Statement such information that Holder shall, on the basis of advice of nationally-recognized counsel experienced in such matters, determine to be required to be included therein by applicable Law and make any required filings of such prospectus supplement or such post-effective amendment; provided, that TerreStar shall not be required to take any actions under this Section 6.2(a)(vii) that are not, in the reasonable advice of nationally-recognized counsel for TerreStar experienced in such matters, in compliance with applicable Law;

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(viii)    promptly furnish to Holder, upon its request and without charge, at least 1 conformed copy of the Shelf Registration Statement and any amendments thereto, including financial statements but excluding schedules, all documents incorporated or deemed to be incorporated therein by reference and all exhibits; provided, however, that TerreStar shall have no obligation to deliver to Holder a copy of any amendment consisting exclusively of an Exchange Act report or other Exchange Act filing otherwise publicly available on TerreStar’s website;

(ix)      while the Shelf Registration Statement is in effect, deliver to Holder in connection with any sale of Registrable Shares pursuant to the Shelf Registration Statement, upon its request and without charge, as many copies of the Prospectus relating to such Registrable Shares (including each preliminary prospectus) and any amendment or supplement thereto as Holder may reasonably request; and TerreStar hereby consents (except during such periods that a Deferral Notice is outstanding and has not been revoked) to the use of such Prospectus or each amendment or supplement thereto by Holder in connection with any offering and sale of the Registrable Shares covered by such Prospectus or any amendment or supplement thereto in the manner set forth therein; and

(x)       cooperate with Holder to facilitate the timely preparation and delivery of certificates representing Registrable Shares to be sold pursuant to the Shelf Registration Statement free of any restrictive legends and in such denominations and registered in such names as Holder may request in writing at least two business days prior to sales of Registrable Shares pursuant to the Shelf Registration Statement.

(b)       Upon (A) the issuance by the SEC of a stop order suspending the effectiveness of the Shelf Registration Statement or the initiation of proceedings with respect to the Shelf Registration Statement under section 8(d) or 8(e) of the Securities Act, (B) the occurrence of any event or the existence of any Material Event as a result of which the Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (C) a determination by TerreStar’s Board of Directors that, prior to the effective date of any Shelf Registration Statement, effecting the registration would adversely affect an offering of securities of TerreStar the preparation of which has then been commenced, or that TerreStar is in possession of material non-public information the disclosure of which would not be in the best interest of TerreStar, TerreStar will give notice to Holder that the availability of the Shelf Registration Statement is suspended for a period not to exceed 45 days (a “Deferral Notice”). Upon receipt of any Deferral Notice, Holder shall not sell any Registrable Shares pursuant to the Shelf Registration Statement until Holder’s receipt of copies of the supplemented or amended Prospectus provided for in clause (i) above, or until it is advised in writing by TerreStar that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. TerreStar will use commercially reasonable efforts to ensure that the use of the Prospectus may be resumed (x) in the case of clause (A) above, as promptly as practicable, (y) in the case of clause (B) above, as

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soon as, in the sole judgment of TerreStar, public disclosure of such Material Event would not be prejudicial to or contrary to the interests of TerreStar or, if necessary to avoid unreasonable burden or expense, as soon as practicable thereafter and (z) in the case of clause (C) above, as soon as, in the discretion of TerreStar, such suspension is no longer appropriate. TerreStar shall not issue in excess of 2 Deferral Notices in any 365 day period, and shall not issue any Deferral Notice within 60 days of any other Deferral Notice.

(c)       Upon receipt of a Deferral Notice, Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters acting on its behalf to discontinue) the disposition of Registrable Shares pursuant to the Shelf Registration Statement until Holder (i) shall have received copies of such amended or supplemented Prospectus and, if so directed by TerreStar, Holder shall deliver to TerreStar all copies, other than permanent file copies, then in Holder’s possession of the Prospectus covering such Registrable Shares at the time of receipt of such notice or (ii) shall have received notice from TerreStar that the disposition of Registrable Shares pursuant to the Shelf Registration Statement may continue.

(d)       TerreStar may require Holder to furnish to TerreStar such information regarding Holder and its intended method of distribution of such Registrable Shares as TerreStar may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act or other applicable Law. Holder shall notify TerreStar as promptly as practicable of any inaccuracy or change in information previously furnished by Holder to TerreStar or of the occurrence of any event in either case as a result of which any Prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding Holder or Holder’s intended method of disposition of such Registrable Shares or omits to state any material fact regarding Holder or Holder’s intended method of disposition of such Registrable Shares required to be stated therein or necessary to make the statements therein not misleading, and promptly to furnish to TerreStar any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to Holder or the disposition of such Registrable Shares, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading.

(e)       TerreStar shall comply with all applicable rules and regulations of the SEC and make generally available to its securityholders earning statements satisfying the provisions of section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than (i) 40 days after the end of any 12-month period (or 60 days after the end of any 12-month period if such period is a fiscal year) if TerreStar is at such time an “accelerated filer” and (ii) 45 days after the end of any 12-month period (or 90 days after the end of any 12-month period if such period is a fiscal year) if TerreStar is not an “accelerated filer” commencing on the first day of the first fiscal quarter of TerreStar commencing after the effective date of the Shelf Registration Statement, which statements shall cover said 12-month periods.

(f)        TerreStar shall use commercially reasonable efforts to provide such information as is required for any filings required to be made with FINRA.

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(g)       TerreStar shall enter into customary agreements and use commercially reasonable efforts to take all other necessary and lawful actions in connection therewith in order to expedite or facilitate disposition of the Registrable Shares.

(h)       If requested by Investors holding more than one-third of the then-outstanding Investors Shares, there shall be a single Underwritten Offering (for this Agreement and all Other Agreements together) for all Investors who wish to participate therein, apart from the one additional Underwritten Offering provided for in Section 6.1(d). The Underwritten Offering may be effected as a take-down off of any Shelf Registration Statement or, if unavailable, pursuant to the filing by TerreStar of a new Registration Statement or the combination of one or more Shelf Registration Statements. The Investor or Investors requesting the Underwritten Offering shall have the right to select the managing underwriter(s) to administer the Underwritten Offering, subject to the prior approval of TerreStar, which approval shall not be unreasonably withheld, conditioned or delayed. TerreStar agrees to enter into such agreements (including underwriting agreements in customary form), and take all such other actions as the Investor or the underwriter(s) reasonably request in order to expedite or facilitate the Underwritten Offering (including causing senior management and other Company personnel to cooperate with the Investors and the underwriter(s) in connection with performing due diligence). TerreStar shall pay for all Registration Expenses incident to such Underwritten Offering pursuant to Section 6.6, but not including any underwriting discounts or commissions incurred by the Investors in such Underwritten Offering. In the event there is a second Underwritten Offering pursuant to Section 6.1(d), or if an attempted Underwritten Offering is not counted as a result of the last sentence of the definition of such term, TerreStar shall not be obligated to permit the second or replacement Underwritten Offering until 9 months following the completion of the first or attempted Underwritten Offering.

Section 13.3 Piggyback Registration.

(a)       If, on any Nonregistration Day or during a Registration Break or any period during which a Deferral Notice is in effect, TerreStar desires to file any registration statement under the Securities Act for purposes of effecting an underwritten (i) primary public offering by TerreStar or (ii) public offering by another holder of TerreStar Common Stock (excluding, in each case, registration statements relating to any employee benefit plan or a corporate reorganization or other transaction covered by Rule 145 promulgated under the Securities Act, or a registration on any registration form which does not permit secondary sales), or providing for the registration of, and the sale on a continuous or delayed basis TerreStar Common Stock pursuant to Rule 415 under the Securities Act or any similar rule that may be adopted by the SEC, by TerreStar or another holder of TerreStar Common Stock (each, a “Piggyback Registration Statement”), TerreStar will provide at least 15 days prior notice to Holder and SkyTerra and will afford Holder an opportunity to include in such registration statement all or any part of the Registrable Shares. If Holder desires to include in any such registration statement all or any part of the Registrable Shares, Holder shall, within 10 days after receipt of such notice, so notify TerreStar, and in such notice shall inform TerreStar of the number of Registrable Shares such Holder wishes to include in such registration statement. If Holder decides not to include all of its Registrable Shares in any such registration statement thereafter filed by TerreStar, Holder shall nevertheless continue to have the right to include any Registrable Shares in any subsequent registration statement or registration statements as may be

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filed by TerreStar with respect to such offerings of its securities, all upon the terms and conditions set forth herein.

(b)       In the event that the SEC requires TerreStar, or counsel for TerreStar in good faith (after consultation with the SEC) advises that the SEC would require TerreStar to reduce the amount of TerreStar securities to be included in a Piggyback Registration Statement in order to allow TerreStar to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales with respect to such registration statement, then, if Holder consents in writing to be named as an “underwriter” in such registration statement, TerreStar shall be obligated to include in such registration statement any Registrable Shares requested to be included therein by Holder, and comply with the requirements of Section 6.1(e) (it being understood that TerreStar shall not be obligated to delay the securities offering pursuant to the Piggyback Registration Statement in order to permit the completion of the activities referred to in such Section); if Holder does not consent in writing to be named as an “underwriter” in such registration statement, then TerreStar shall be obligated to include in such registration statement (which may be a subsequent Registration Statement if TerreStar needs to withdraw the initial Registration Statement and re-file a new Registration Statement in order to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales) only such limited portion of the securities otherwise entitled to be included therein as the SEC shall or, based on the advice of TerreStar’s counsel, would permit. Any Registrable Shares that are excluded in accordance with the foregoing terms are hereinafter referred to as “Piggyback Cut Back Securities.” In the event there are Piggyback Cut Back Securities, the right to be included in the Registration Statement shall be allocated first, to the parties entitled to request that such registration statement be filed and any persons entitled to register securities pursuant to Prior Registration Agreements, and second, to the Investors, pro rata based on the percentage of such securities owned by them and requested to be included therein (or as may otherwise be agreed by TerreStar and the Investors).

(c)       In the event TerreStar gives notice under this Section 6.3, the right of Holder to include Registrable Shares to be included in a registration statement pursuant to this Section 6.3, if it is an underwritten offering, shall be conditioned upon Holder’s participation in such underwriting and the inclusion of the Registrable Shares in the underwriting to the extent provided herein. If Holder proposes to distribute Registrable Shares through such underwriting, it shall enter into an underwriting agreement in customary form with the managing underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Agreement, if the managing underwriters determine in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the managing underwriters may exclude shares (including Registrable Shares) from the registration and the underwriting, and the number of shares that may be included in the registration and the underwriting shall be allocated, first, to TerreStar and any persons entitled to register securities pursuant to Prior Registration Agreements and second, to Holder and other Investors on a pro rata basis (or as otherwise agreed by the Investors and TerreStar). If Holder disapproves of the terms of any such underwriting, Holder may elect to withdraw therefrom by notice to TerreStar and the underwriter, delivered at least 10 days prior to the effective date of the registration statement; provided, however, such 10-day deadline shall not apply if at the time of such withdrawal, Holder has learned of a material adverse change in the condition, business or prospects of TerreStar not known to Holder at the time of its request for such registration and has withdrawn

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its request for registration with reasonable promptness after learning of such material adverse change. Any Registrable Shares excluded or withdrawn from such underwriting shall be excluded and withdrawn from the registration.

Section 13.4    Holder’s Obligations. Holder shall not be entitled to sell any Registrable Shares pursuant to a Registration Statement or to receive a Prospectus relating thereto unless Holder has furnished TerreStar with a Notice and Questionnaire as required pursuant to Section 6.1 (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Holder shall promptly furnish to TerreStar all information required to be disclosed in order to make the information previously furnished to TerreStar by Holder not misleading and any other information regarding Holder and the distribution of such Registrable Shares as may be required to be disclosed in a Registration Statement under applicable Law or pursuant to SEC comments. Holder shall not sell any Registrable Shares pursuant to a Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof and, following termination of the effectiveness of the Registration Statement, shall notify TerreStar, within 10 Business Days of a request by TerreStar, of the amount of Registrable Shares sold pursuant to such Registration Statement and, in the absence of a response, TerreStar may assume that all of Registrable Shares were so sold.

Section 13.5    Holdback Agreements. To the extent requested in writing by a managing underwriter, if any, of any registration effected pursuant to Section 6.1 or 6.3 which includes Registrable Shares, Holder shall not sell, transfer, sell forward, hedge, enter into any sort of derivative contract pertaining to or otherwise or otherwise dispose of, including in any sale pursuant to Rule 144 under the Securities Act, any TerreStar Shares, or any other equity security of TerreStar or any security convertible into or exchangeable or exercisable for any equity security of TerreStar other than as part of such underwritten public offering during the time period reasonably requested by the managing underwriter, not to exceed 90 days, provided that all of the executive officers and directors of TerreStar enter into similar lock-up agreements of no shorter duration. For the avoidance of doubt, if Holder does not participate in such an underwritten offering, Holder will not be obligated to execute a lock-up agreement or otherwise be bound by these restrictions.

Section 13.6    Registration Expenses. TerreStar shall bear and pay or cause to be paid promptly upon request being made therefor all expenses incident to TerreStar’s performance of or compliance with this ARTICLE VI, including, but not limited to, (a) all SEC and any FINRA registration and filing fees and expenses, (b) all fees and expenses in connection with the qualification of the Registrable Shares for offering and sale under the securities and blue sky Laws referred to in Section 6.2(a)(v), including reasonable fees and disbursements of one counsel for the placement agent or underwriters, if any, in connection with such qualifications, (c) all expenses relating to the preparation, printing, distribution and reproduction of the Shelf Registration Statement, the related Prospectuses, each amendment or supplement to each of the foregoing, the certificates representing the Registrable Shares and all other documents relating hereto, (d) fees and expenses of the transfer agent for the TerreStar Common Stock, (e) fees, disbursements and expenses of counsel and independent certified public accountants of TerreStar (including the expenses of any reports required by the Securities Act or the rules and regulations thereunder to be included or incorporated by reference in the Shelf Registration Statements or “cold comfort” letters required by or incident to such performance and compliance) and (f) fees, expenses and disbursements of any other Persons, including special experts, retained by

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TerreStar in connection with such registration (collectively, the “Registration Expenses”). To the extent that any Registration Expenses are incurred, assumed or paid by Holder or any underwriter or placement agent therefor, TerreStar shall reimburse such Person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of a documented request therefor. Notwithstanding the foregoing, the Investors shall pay all underwriting discounts and commissions and placement agent fees and commissions attributable to the sale of Investors Shares and the fees and disbursements of advisors or experts retained by the Investors (severally or jointly), but TerreStar shall pay for the fees and expenses of one counsel for the Investors in any Underwritten Offering, not to exceed $150,000.

Section 13.7    Penalties. TerreStar shall pay to Holder, within 5 Business Days after the end of each calendar month in which a Nonregistration Day occurs (or, if the determination of the Fair Value of TerreStar Common Stock requires the determination of its Appraised Value, within 5 Business Days after such determination), an amount, in cash, equal to 0.25% multiplied by the Fair Value per share of TerreStar Common Stock on the last trading day of such month multiplied by the number of Nonregistration Days in such month multiplied by the weighted average number of Registrable Shares to which such Nonregistration Days relate divided by the number of calendar days in such month. Solely for the purposes of the calculation of this penalty (and not for any other purpose under this Agreement), if Holder becomes permitted to sell Registrable Shares pursuant to Rule 144, then the number of Registrable Shares shall be reduced on each day by the number which Holder could have sold pursuant to Rule 144 if, on each day when it was so eligible, it had sold a number of Registrable Shares equal to (a) the number of shares of TerreStar Common Stock permitted to be sold by it pursuant to Rule 144 multiplied by (b) the number of Registrable Shares then owned by Holder divided by (c) the total number of shares of TerreStar Common Stock then owned by Holder.

Section 13.8 Indemnification.

(a)       TerreStar shall indemnify and hold harmless Holder, the directors, officers, employees and Affiliates of Holder and each person who controls Holder within the meaning of either the Securities Act or the Exchange Act against any and all losses, claims, damages or liabilities, joint or several, to which they or any of them may become subject under the Securities Act, the Exchange Act or other applicable Law, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto, 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, in the case of any prospectus, in the light of the circumstances under which they were made, not misleading, and agrees to reimburse each such indemnified party, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that TerreStar will 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 any such untrue statement or alleged untrue statement or omission or alleged omission from any such document, in reliance upon and in conformity with information provided by any Investor in writing (whether in its Notice and Questionnaire or otherwise). This indemnity agreement will be in addition to any liability that TerreStar may otherwise have.

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(b)       Holder shall indemnify and hold harmless TerreStar, each of its directors, each of its officers, and each person, if any, who controls TerreStar within the meaning of either the Securities Act or the Exchange Act, against any and all losses, claims, damages or liabilities, joint or several, to which TerreStar may become subject under the Securities Act, the Exchange Act or other applicable Law, at common law or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement or any prospectus forming part thereof or in any amendment or supplement thereto, 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, in the case of any prospectus, in the light of the circumstances under which they were made, not misleading, but in each case only to the extent that the untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with any information furnished in writing to TerreStar by Holder for use in such Registration Statement or prospectus, and agrees to reimburse TerreStar, as incurred, for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such loss, claim, damage, liability or action; provided, however, that Holder shall not be liable for any indemnity claims hereunder in excess of the amount of net proceeds received by Holder from the sale of Registrable Shares pursuant to the Registration Statement. This indemnity agreement will be in addition to any liability which Holder may otherwise have.

(c)       Promptly after receipt by an indemnified party under this Section 6.8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 6.8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it has been materially prejudiced through the forfeiture by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b). If any action shall be brought against an indemnified party and it shall have notified the indemnifying party thereof, the indemnifying party shall be entitled to appoint counsel (including local counsel) of the indemnifying party’s choice at the indemnifying party’s expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel, other than local counsel if not appointed by the indemnifying party, retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party’s election to appoint counsel (including local counsel) to represent the indemnified party in an action, the indemnified party shall have the right to employ separate counsel (including local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the indemnified party would present such counsel with a conflict of interest; (ii) the actual or potential defendants in, or targets of, any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there may be legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party; (iii) the indemnifying party shall not have employed counsel reasonably satisfactory to the indemnified

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party to represent the indemnified party within a reasonable time after notice of the institution of such action; or (iv) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding and does not include an admission of fault, culpability or a failure to act, by or on behalf of such indemnified party.

(d)       The provisions of this Section 6.8 and Section 6.9 shall remain in full force and effect, regardless of any investigation made by or on behalf of Holder, TerreStar, or any of the indemnified Persons referred to in this Section 6.8 and Section 6.9, and shall survive the sale by Holder of TerreStar covered by a Registration Statement.

(e)       All fees, disbursements and other charges under this Section 6.8 will be reimbursed by the Indemnifying Party promptly as they are incurred.

Section 13.9    Contribution. If the indemnification provided for in Section 6.8 is unavailable or insufficient to hold harmless an indemnified party under Section 6.8(a) or 6.8(b), then each indemnifying party shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such loss, claim, damage or liability, or action in respect thereof, (i) in such proportion as shall be appropriate to reflect the relative benefits received by TerreStar from the offering and sale of the Registrable Shares, on the one hand, and Holder with respect to the sale by Holder of Registrable Shares, on the other, or (ii) if the allocation provided by clause (i) above is not permitted by applicable Law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of TerreStar and Holder on the other with respect to the statements or omissions that resulted in such loss, claim, damage or liability, or action in respect thereof, as well as any other relevant equitable considerations. The relative benefits received by TerreStar on the one hand and Holder on the other with respect to such offering and such sale shall be deemed to be in the same proportion as the total net proceeds from the offering of the Investors Shares (excluding discounts and commissions, but before deducting expenses) received by or on behalf of TerreStar, on the one hand, and the total net proceeds (excluding discounts and commissions, but before deducting expenses) received by Holder upon a resale of the Registrable Shares, on the other, bear to the total gross proceeds from the sale all Investors Shares pursuant to the Registration Statement in the offering of the Investors Shares from which the contribution claim arises. 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 TerreStar or information supplied by TerreStar on the one hand or to any information contained in the relevant Notice and Questionnaire supplied by Holder on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6.9 were to be determined by pro rata allocation or by any other method of allocation that does not take into

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account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, damage or liability, or action in respect thereof, referred to above in this Section 6.9 shall be deemed to include, for purposes of this Section 6.9, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending or preparing to defend any such action or claim. Notwithstanding the provisions of this Section 6.9, Holder shall not be required to contribute any amount in excess of the amount by which the total price at which the Registrable Shares sold by Holder to any purchaser exceeds the amount of any damages which Holder has otherwise paid or become liable to pay by reason of any 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.

Section 13.10  Transfer of Registration Rights. Holder may transfer or assign its registration rights under this Agreement to a transferee or assignee; provided, however, that upon or prior to such transfer or assignment TerreStar is provided: (a) written notice by Holder stating the name and address of such transferee or assignee and identifying the Registrable Shares with respect to which such registration rights are being transferred or assigned; and (b) a joinder agreement executed by such transferee or assignee pursuant to which such transferee or assignee agrees to be bound by the terms of this Agreement. Notwithstanding the foregoing, Holder may transfer or assign its rights under this Agreement to a transferee or assignee if such transferee or assignee is (i) an Affiliate, partner or retired partner of any Holder or (ii) any family member or trust for the benefit of Holder, if Holder is an individual. For the purposes of the definitions of “Registrable Share” and “Nonregistration Day,” at any time following any transfer or assignment of a TerreStar Share, such TerreStar Share shall be deemed to be permitted to be resold pursuant to Rule 144 under the Securities Act free of restrictions as to volume and manner of sale if either (i) such TerreStar Share may be so resold or (ii) such TerreStar Share would have been permitted to be so resold had such transfer or assignment not occurred.

ARTICLE XIV.

CONDITIONS TO CLOSING

Section 14.1    Conditions to Obligations of TerreStar. The obligations of TerreStar to consummate the Closing shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by TerreStar in its sole discretion:

(a)       Any waiting period (and any extension thereof) under the HSR Act applicable to the Closing shall have expired or shall have been terminated. All other material consents of, or registrations, declarations or filings with, any Governmental Authority legally required for the consummation of the Closing shall have been obtained or filed.

(b)       The representations and warranties of Holder contained in this Agreement, other than in Section 4.7, shall be true and correct in all material respects both when made and as of the Closing Date, or in the case of representations and warranties that are made as of a

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specified date, such representations and warranties shall be true and correct in all material respects as of such specified date. The representations and warranties of Holder contained in Section 4.7 shall be true and correct. Holder shall have in all material respects performed all obligations and agreements and complied with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing.

(c)       TerreStar shall have received a certificate of an officer of Holder as to the satisfaction of the condition set forth in Section 7.1(b).

(d)       The consummation of the Closing would not cause a TerreStar Change of Control, as reasonably determined by TerreStar.

(e)       If TerreStar is advised by its counsel that such counsel is unable to conclude that Holder is an “accredited investor” (as defined in Rule 501 promulgated under the Securities Act), TerreStar shall have received an opinion of counsel reasonably acceptable to TerreStar that the transactions to be conducted at the Closing will not require registration under the Securities Act.

(f)        TerreStar shall have received certificates representing the Networks Shares, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed.

(g)       TerreStar shall have received certificates representing all 3,136,428 of the TGL Shares, free and clear of all Liens, duly endorsed in blank or accompanied by stock powers duly endorsed in blank in proper form for transfer, with appropriate transfer stamps, if any, affixed.

Section 14.2    Conditions to Obligations of Holder. The obligations of Holder to consummate the Closing shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions, any of which may be waived in writing by Holder in its sole discretion:

(a)       Any waiting period (and any extension thereof) under the HSR Act applicable to the Closing shall have expired or shall have been terminated. All other material consents of, or registrations, declarations or filings with, any Governmental Authority legally required for the consummation of the Closing shall have been obtained or filed.

(b)       The representations and warranties of TerreStar contained in this Agreement shall be true and correct in all material respects both when made and as of the Closing Date, or in the case of representations and warranties that are made as of a specified date, such representations and warranties shall be true and correct as of such specified date. TerreStar shall have in all material respects performed all obligations and agreements and complied with all covenants and conditions required by this Agreement to be performed or complied with by it prior to or at the Closing.

(c)       Holder shall have received a certificate of an officer of TerreStar as to the satisfaction of the condition set forth in Section 7.2(b).

(d) Holder shall have received certificates representing the TerreStar Shares.

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ARTICLE XV.

TERMINATION

Section 15.1    Termination. This Agreement may be terminated at any time prior to the Closing:

(a) by mutual written consent of Holder and TerreStar;

(b)       (i) by TerreStar, if Holder breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 14.2, (B) cannot be cured and (C) has not been waived by TerreStar or (ii) by Holder, if TerreStar breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (A) would give rise to the failure of a condition set forth in Section 14.1, (B) cannot be cured and (C) has not been waived by Holder;

(c)       (i) by TerreStar, if any of the conditions set forth in Section 14.1 shall have become incapable of fulfillment or (ii) by Holder, if any of the conditions set forth in Section 14.2 shall have become incapable of fulfillment; provided, that the right to terminate this Agreement pursuant to this ?Section 8.1(c) shall not be available if the failure of the party so requesting termination to fulfill any obligation under this Agreement shall have been the cause of the failure of such condition to be satisfied on or prior to such date; or

(d)       by either TerreStar or Holder in the event that any Governmental Authority shall have issued an order, decree or ruling or taken any other action restraining, enjoining or otherwise prohibiting the transactions to occur at the Closing and such order, decree, ruling or other action shall have become final and nonappealable.

The party seeking to terminate this Agreement pursuant to this Section 15.1 shall give prompt written notice of such termination to the other party. No termination of this Agreement pursuant to this Section 8.1 shall affect the ability of Holder to enter into any subsequent Exchange and Registration Agreement with TerreStar.

Section 15.2    Effect of Termination. In the event of termination of this Agreement as provided in Section 15.1, this Agreement shall forthwith become void and there shall be no liability on the part of either party except (a) for the provisions of Section 6.8 relating to indemnification, Section 16.2 relating to fees and expenses, Section 7.5 relating to notices, Section 7.8 relating to third-party beneficiaries and this Section 15.2 and (b) that nothing herein shall relieve either party from liability for any breach of this Agreement or any agreement made as of the date hereof or subsequent thereto pursuant to this Agreement.

ARTICLE XVI.

GENERAL PROVISIONS

Section 16.1    Amendment and Modification. This Agreement may not be amended, modified or supplemented in any manner, whether by course of conduct or otherwise, except by

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an instrument in writing specifically designated as an amendment hereto, signed on behalf of each Party.

Section 16.2    Fees and Expenses. Except as provided in Sections 6.2(h), 6.6, 6.7 and 6.8, each of the Parties acknowledges and agrees that such Party is responsible for bearing and paying its own legal fees and any other expenses incurred in connection with negotiating, executing and implementing this Agreement. Nothing in this ?Section 9.2 shall preclude a Party from making a claim for or recovering legal expenses incurred in connection with enforcement of its rights and remedies under this Agreement in a court of law or other legal proceeding, arbitration or mediation.

Section 16.3    Waiver. No failure or delay of either Party in exercising any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right or power, or any abandonment or discontinuance of steps to enforce such right or power, or any course of conduct, preclude any other or further exercise thereof or the exercise of any other right or power. The rights and remedies of the Parties hereunder are cumulative and are not exclusive of any rights or remedies which they would otherwise have hereunder. Any agreement on the part of either Party to any such waiver shall be valid only if set forth in a written instrument executed and delivered by a duly authorized officer on behalf of such Party.

Section 16.4    Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (a) on the date of delivery if delivered personally, or if by facsimile, upon written confirmation of receipt by facsimile or otherwise, (b) on the first Business Day following the date of dispatch if delivered utilizing a next-day service by a recognized next-day courier or (c) on the earlier of confirmed receipt or the fifth Business Day following the date of mailing if delivered by registered or certified mail, return receipt requested, postage prepaid. All notices hereunder shall be delivered to the addresses set forth below, or pursuant to such other instructions as may be designated in writing by the Party to receive such notice:

(i) if to TerreStar, to:

TerreStar Corporation

12010 Sunset Hills Road

Reston, VA 20910

Attention: General Counsel

with a copy (which shall not constitute notice) to:

Gibson, Dunn & Crutcher LLP

200 Park Avenue

New York, NY 10166

Attention: David M. Wilf

(ii)	if to Holder, to:
Attention:

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Facsimile:

with a copy (which shall not constitute notice) to:

Attention:

Facsimile:

Section 16.5    Interpretation. When a reference is made in this Agreement to a Section, Article or Exhibit such reference shall be to a Section, Article or Exhibit of this Agreement unless otherwise indicated. All words used in this Agreement will be construed to be of such gender or number as the circumstances require. Any capitalized terms used in any Exhibit but not otherwise defined therein shall have the meaning as defined in this Agreement. All Exhibits annexed hereto or referred to herein are hereby incorporated in and made a part of this Agreement as if set forth herein. The word “including” and words of similar import when used in this Agreement will mean “including, without limitation,” unless otherwise specified.

Section 16.6    Entire Agreement. This Agreement (including the Exhibits hereto) constitute the entire agreement, and supersede all prior written agreements, arrangements, communications and understandings and all prior and contemporaneous oral agreements, arrangements, communications and understandings between the Parties with respect to the subject matter hereof and thereof. This Agreement shall not be deemed to contain or imply any restriction, covenant, representation, warranty, agreement or undertaking of any Party with respect to the transactions contemplated hereby other than those expressly set forth herein or in any document required to be delivered hereunder, and none shall be deemed to exist or be inferred with respect to the subject matter hereof.

Section 16.7    No Third-Party Beneficiaries. Nothing in this Agreement, express or implied, is intended to or shall confer upon any Person other than the Parties and their respective successors and permitted assigns any legal or equitable right, benefit or remedy of any nature under or by reason of this Agreement.

Section 16.8    Assignment; Successors. This Agreement will bind and inure to the benefit of the Parties and their respective successors, and permitted assigns. No Party will assign any rights or delegate any obligations hereunder without the consent of the other Parties, except pursuant to Section 6.10. Except as otherwise expressly provided herein, nothing in this Agreement is intended to or will confer any rights or remedies on any Person other than the Parties and their respective successors and permitted assigns and other than indemnified persons pursuant to Section 6.8.

Section 16.9    Enforcement. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. Accordingly, each of the Parties shall be entitled to specific performance of the terms hereof, including an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this

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Agreement in the United States District Court for the Southern District of New York or the applicable New York state court located in New York County (or, if such court lacks subject matter jurisdiction, in any appropriate New York State or federal court), this being in addition to any other remedy to which such Party is entitled at law or in equity. Each of the Parties hereby further waives (a) any defense in any action for specific performance that a remedy at law would be adequate and (b) any requirement under any Law to post security as a prerequisite to obtaining equitable relief.

Section 16.10  Governing Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the Law of the State of New York without regard to any applicable principles of conflicts of law. Each Party agrees that, in connection with any legal suit or proceeding arising with respect to this Agreement, it shall submit to the non-exclusive jurisdiction of the United States District Court for the Southern District of New York or the applicable New York state court located in New York County and agrees to venue in such courts.

Section 16.11  Severability. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable Law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable Law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or portion of any provision in such jurisdiction, and this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision or portion of any provision had never been contained herein.

Section 16.12  Waiver of Jury Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 16.13  Counterparts. This Agreement may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

[The remainder of this page is intentionally left blank.]

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IN WITNESS WHEREOF, TerreStar and Holder have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

TERRESTAR CORPORATION
By:
	Name:
	Title:

[HOLDER]
By:
	Name:
	Title:

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Exhibit A

Notice and Questionnaire

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EX-10

Execution Version

REGISTRATION RIGHTS AGREEMENT

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of September 15, 2008, is by and among the investors listed on Schedule A hereto (the “Investors”), and SkyTerra Communications, Inc., a Delaware corporation (“SkyTerra”). Certain capitalized terms used herein are defined in Section 5 below.

RECITALS:

WHEREAS, pursuant to the Stock Purchase Agreements (the “Stock Purchase Agreements”), each dated as of September 15, 2008, by and between each of the Investors and Motient Ventures Holding, Inc. (“Motient”), the Investors are purchasing from Motient an aggregate of 6,300,000 shares (the “Purchased Shares”) of non-voting common stock, par value $0.01 per share, of SkyTerra on the terms and subject to the conditions set forth in the Stock Purchase Agreements; and

WHEREAS, pursuant to Letter Agreements among SkyTerra and each of the Investors dated the date hereof (the “Letter Agreement”), SkyTerra has agreed to exchange all of the Purchased Shares for shares of SkyTerra’s voting common stock, par value $0.01 per share (the “Voting Common Stock”), on a one-for-one basis (as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the “Exchanged Shares”).

WHEREAS, pursuant to the Letter Agreements, SkyTerra has agreed to provide certain registration rights to the Investors on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements, representations, warranties and covenants herein contained, the receipt and sufficiency of which is hereby acknowledged the parties hereto hereby agree as follows:

Section 1. REGISTRATION UNDER THE SECURITIES ACT.

1.1 Registration.

(a)    SkyTerra shall use its reasonable best efforts to file with the Securities and Exchange Commission (the “SEC”) no later than 45 days from the date hereof (the “Filing Date”), a registration statement covering the resale of the Registrable Securities held by Holders for offerings to be made on a delayed or continuous basis pursuant to Rule 415 of the Securities Act (together with any amendments thereto, and including any documents

incorporated by reference therein, the “Shelf Registration Statement”) for the purpose of registering such Registrable Securities under the Securities Act for resale by Holders. SkyTerra will cause the Shelf Registration Statement to comply with the applicable provisions of the Securities Act and the rules and regulations thereunder, and set forth a plan of distribution that is reasonably acceptable to the Holders (including the ability to enter into hedging transactions but such plan of distribution does not need to include an underwritten offering). SkyTerra shall use its best efforts to have the Shelf Registration Statement declared effective by the SEC under the Securities Act, as soon as reasonably possible following the filing of the Shelf Registration Statement.

(b)    Upon written notice to the Holders, SkyTerra may postpone filing or effecting the Shelf Registration Statement for a reasonable period of time, but not exceeding seventy-five (75) days from the receipt of such notice, if (i) SkyTerra’s Board of Directors (the “Board”) shall determine that effecting the registration would adversely affect an offering of securities of SkyTerra the preparation of which had then been commenced, or (ii) SkyTerra is in possession of material non-public information the disclosure of which would not be in the best interest of SkyTerra. In order to defer the filing of a Shelf Registration Statement pursuant to this Section 1.1(b), SkyTerra shall promptly (but in any event within ten days), upon determining to seek such deferral, deliver to each Holder a certificate signed by an executive officer of SkyTerra stating that SkyTerra is deferring such filing pursuant to this Section 1.1(b). A deferral of the filing of the Shelf Registration Statement pursuant to this Section 1.1(b) shall be lifted, and the Shelf Registration Statement shall be filed forthwith, if, in the case of a deferral pursuant to clause (i) of the preceding sentence, the offering of securities of SkyTerra is abandoned, or in the case of a deferral pursuant to clause (ii) of the preceding sentence, the material non-public information has been disclosed. If SkyTerra postpones the filing of the Shelf Registration Statement, it will promptly notify the Holders in writing when the events or circumstances permitting such postponement have ended and will file the Shelf Registration Statement within ten (10) Business Days after the events or circumstances permitting such postponement have ended, unless financial statements required for such Shelf Registration Statement are not then available, then as soon as reasonably practicable thereafter.

(c)    Nothing herein shall prevent SkyTerra from including any SkyTerra securities held by holders other than the Holders in any Shelf Registration Statement, including any “Registrable Shares” under the Registration Rights Agreement among SkyTerra, Harbinger Capital Partners Master Fund I, Ltd., Harbinger Capital Partners Special Situations Fund, LP, Harbinger Co-Investment Fund, L.P. and Harbinger Capital Partners Fund I, L.P. entered into on July 24, 2008, provided that, if the Holders have delivered all information reasonably requested by SkyTerra pursuant to Section 1.3(b), all of the Registrable Securities hereunder are included in such Shelf Registration Statement. The Holders hereby consent to the inclusion of SkyTerra securities held by holders other than the Holders in any Shelf Registration Statement, including securities as to which any piggyback registration rights are attributable, provided that, if the Holder has delivered all information reasonably requested by the Company pursuant to Section 1.3(b), all of the Registrable Securities hereunder are included in such Shelf Registration Statement.

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(d)    SkyTerra shall use its reasonable best efforts to keep the Shelf Registration Statement effective under the Securities Act (including through the filing of any required post-effective amendments) until the earliest to occur of such time as (i) the Holders have sold all of the Registrable Securities registered thereunder; (ii) the Registrable Securities may be sold without any limitation or requirement pursuant to Rule 144 under the Securities Act; (iii) the Registrable Securities have been sold pursuant to Rule 144 under the Securities Act; or (iv) there are no Registrable Securities outstanding.

(e)    SkyTerra represents and warrants that it currently meets the registrant eligibility and transaction requirements for the use of Form S-3 for the registration of the sale of the Exchanged Shares by the Holders. SkyTerra agrees to use its reasonable best efforts to cause SkyTerra to be eligible to use Form S-3 (or any similar form) for the registration of securities.

(f)     In the event that the SEC requires SkyTerra, or counsel for SkyTerra in good faith advises that the SEC would require SkyTerra to reduce the number of Registrable Securities to be included in a Shelf Registration Statement in order to allow SkyTerra to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales with respect to such Shelf Registration Statement, then SkyTerra shall be obligated to include in such Shelf Registration Statement (which may be a subsequent Registration Statement if SkyTerra needs to withdraw the initial Registration Statement and re-file a new Registration Statement in order to rely on Rule 415 under the Securities Act and have such sales be treated as secondary sales) only such limited portion of the Registrable Securities as the SEC shall permit, allocated pro rata among the Investors and other holders of SkyTerra securities entitled to be included therein based on the percentage of such securities owned by them and requested to be included therein. Any Registrable Securities that are excluded in accordance with the foregoing terms are hereinafter referred to as “Cut Back Securities.” To the extent Cut Back Securities exist, as soon as may be permitted by the SEC, SkyTerra shall be required to file a Shelf Registration Statement covering the resale of the Cut Back Securities and shall use best efforts to cause such Registration Statement to be declared effective as promptly as practicable thereafter.

1.2RegistrationProcedures. Subject to the terms and conditions hereof, SkyTerra shall use its reasonable best efforts to effect the registration and the disposition of the Registrable Securities in accordance with the intended method of disposition thereof (which shall not in any case include any underwritten offering), and pursuant thereto SkyTerra shall:

(a)    subject to the terms set forth in Section 1.1(b) above, prepare and file with the SEC the Shelf Registration Statement (and any amendments, including any post-effective amendments or supplements to the Shelf Registration Statement SkyTerra deems to be necessary) and use its best efforts to cause the Shelf Registration Statement to become effective as soon as reasonably possible and to comply with the provisions of the Securities Act applicable to it; provided, that before filing the Shelf Registration Statement or Prospectus or any amendments or supplements thereto (other than filings made pursuant to the Exchange Act or exhibits to such registration statements), SkyTerra shall furnish to one counsel for the Holders

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copies of all such documents proposed to be filed, including documents incorporated by reference in the Shelf Registration Statement, so as to provide the Holders and their counsel with a reasonable opportunity to review and comment on such documents, and SkyTerra (i) will make such changes and additions thereto as reasonably requested by counsel to the Holders prior to filing the Shelf Registration Statement or amendment thereto or any Prospectus or any supplement thereto and (ii) if any Holder is a controlling person of SkyTerra, will include therein material relating to such Holder or the plan of distribution for the Registrable Securities registered thereunder, furnished to SkyTerra in writing, which, in the reasonable judgment of the applicable Holder, should be included;

(b)    promptly furnish to the Holders such number of copies of the Shelf Registration Statement, each amendment and supplement thereto, the Prospectus and such other documents as the Holders may reasonably request in order to facilitate the disposition of the Registrable Securities registered thereunder; provided, however, that SkyTerra shall have no obligation to furnish copies of a final Prospectus if the conditions of Rule 172(c) under the Securities Act are satisfied by SkyTerra and SkyTerra will use its reasonable best efforts to ensure that Rule 172 is available;

(c)    prepare and file with the SEC as soon as reasonably possible, such amendments and supplements to the Shelf Registration Statement and the Prospectus as may be necessary or advisable to keep the Shelf Registration Statement effective for the time period as specified in Section 1.1 in order to complete the disposition of the Registrable Securities covered by the Shelf Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Shelf Registration Statement during such period in accordance with the intended methods of disposition thereof as set forth in the Shelf Registration Statement;

(d)    use its reasonable best efforts to register or qualify the Registrable Securities no later than the time the applicable Registration Statement becomes effective, under all applicable securities or blue sky laws of such jurisdictions as the Holders reasonably request and do any and all other acts and things which may be reasonably necessary or advisable to enable the Holders to consummate the disposition of the Registrable Securities (in accordance with the intended methods of disposition thereof as set forth in the Shelf Registration Statement) in such jurisdictions; provided that SkyTerra shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subsection, (ii) subject itself to taxation in any such jurisdiction or (iii) consent to general service of process in any such jurisdiction;

(e)    promptly notify the Holders, (i) when a Prospectus relating thereto is required to be delivered under the Securities Act, (ii) when the Shelf Registration Statement or any post-effective amendment has become effective under the Securities Act, (iii) of any written request by the SEC for amendments or supplements to the Shelf Registration Statement or Prospectus, (iv) of the happening of any event as a result of which the Prospectus contains an untrue statement of a material fact or omits any fact necessary to make the statements therein, in

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light of the circumstances under which they were made, not misleading (whereupon the Holders shall immediately cease any offers, sales or other distribution of Registrable Securities registered thereunder), and, subject to 1.3(c), SkyTerra shall promptly prepare a supplement or amendment to such Prospectus so that, as thereafter used by the Holders for the resale of the Registrable Securities, such Prospectus shall not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (v) of the issuance of any stop order suspending the effectiveness of the Shelf Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any of the Registrable Securities included in the Shelf Registration Statement for sale or distribution in any jurisdiction, and (vi) of any pending proceeding against SkyTerra before the SEC under Section 8A of the Securities Act in connection with the offering of Registrable Securities;

(f)     in the event of the issuance of any stop order suspending the effectiveness of the Shelf Registration Statement, or of any order suspending or preventing the use of any related Prospectus or suspending the qualification of any Registrable Securities included in the Shelf Registration Statement for sale or distribution in any jurisdiction, SkyTerra shall use its reasonable best efforts to promptly obtain the withdrawal of such order and shall prepare and file an amended or supplemented Prospectus, if required;

(g)    provide a transfer agent and registrar for all the Registrable Securities not later than the effective date of the Shelf Registration Statement;

(h)    use its reasonable best efforts to cause the Registrable Securities covered by the Shelf Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the Holders to complete the disposition of the Registrable Securities covered by the Registration Statement and comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities covered by the Shelf Registration Statement during such period in accordance with the intended methods of disposition by the Holders thereof set forth in the Shelf Registration Statement;

(i)     make available for inspection by the Holders and any attorney, accountant or other agent retained by the Holders, at reasonable times and in a reasonable manner, all pertinent financial and other records, corporate documents and properties of SkyTerra, and cause SkyTerra’s officers, managers, employees and independent accountants to supply all information reasonably requested by the Holders and such attorneys, accountants or agents to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act in connection with the disposition of the Registrable Securities pursuant to the Shelf Registration Statement; provided, that the foregoing investigation and information gathering shall he coordinated on behalf of such parties by one firm of counsel designated by and on behalf of such parties; and provided, further unless the disclosure of such information is necessary to avoid or correct a misstatement or omission in the Shelf Registration Statement or the release of such information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, SkyTerra shall not be required to provide any information under this subparagraph (i)

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if (1) SkyTerra believes, after consultation with counsel, that to do so would cause SkyTerra to forfeit an attorney-client privilege that is applicable to such information, or (2) if either (A) SkyTerra has requested and been granted from the SEC confidential treatment of such information contained in any filing with the SEC or documents provided supplementally or otherwise, or (B) SkyTerra reasonably determines in good faith that such information is confidential and so notifies the coordinating firm in writing, unless prior to furnishing any such information with respect to (1) or (2) the Holder of Registrable Securities requesting such information agrees to enter into a confidentiality agreement in customary form and subject to customary exceptions; and provided, further, that each Holder agrees that it will, upon learning that disclosure of any such information is sought in a court of competent jurisdiction, give notice to SkyTerra and allow SkyTerra, at such Holder’s expense, to undertake appropriate action and to prevent disclosure of the information deemed confidential;

(j)     if requested, make generally available to its stockholders a consolidated earnings statement (which need not be audited) for the 12 months beginning after the effective date of such registration statement as soon as reasonably practicable after the end of such period, which earnings statement shall satisfy the requirements of an earning statement under Section 11(a) of the Securities Act; and

(k)    reasonably cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends (not prior to such sale but within three days following such sale).

1.3 Other Procedural Matters.

(a)    SEC Correspondence. SkyTerra shall make available to the Holders promptly after the same is prepared and publicly distributed, filed with the SEC, or received by SkyTerra, one copy of the Shelf Registration Statement and any amendment thereto, each preliminary Prospectus and each amendment or supplement thereto (other than filings made pursuant to the Exchange Act or exhibits to such registration statements), each letter written by or on behalf of SkyTerra to the SEC or the staff of the SEC (or other governmental agency or self-regulatory body or other body having jurisdiction, including any domestic or foreign securities exchange), in each case relating to the Shelf Registration Statement. SkyTerra will promptly respond to any and all comments received from the SEC, with a view towards causing the Shelf Registration Statement or any amendment thereto to be declared effective by the SEC as soon as reasonably practicable and shall file an acceleration request as soon as reasonably practicable following the resolution or clearance of all SEC comments or, if applicable, following notification by the SEC that the Shelf Registration Statement or any amendment thereto will not be subject to review.

(b)    Each Holder shall furnish SkyTerra with any other information regarding such Holder and the disposition of the Registrable Securities, including without

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limitation the plan of distribution of the Registrable Securities, as SkyTerra reasonably determines, is required to be included in the Shelf Registration Statement.

(c)    Each Holder agrees that, upon notice from SkyTerra of the happening of any event as a result of which the Prospectus included in the Shelf Registration Statement contains an untrue statement of a material fact or omits any material fact necessary to make the statements therein not misleading (a “Suspension Notice”), such Holder will forthwith discontinue disposition of Registrable Securities pursuant to the Shelf Registration Statement until the Holder is advised in writing by SkyTerra that the use of the Prospectus may be resumed and is furnished with a supplemented or amended Prospectus as contemplated by Section 1.2 hereof; provided, however, that such postponement of sales of Registrable Securities by the Holders shall not in any event exceed (i) twenty (20) consecutive days or (ii) forty-five (45) days in the aggregate in any 12 month period. Each Holder agrees to keep confidential the existence of any Suspension Notice and, if disclosed to the Holders, the facts and circumstances giving rise thereto. If SkyTerra shall give the Holders any Suspension Notice, SkyTerra shall extend the period of time during which SkyTerra is required to maintain the Shelf Registration Statement effective pursuant to this Agreement by the number of days during the period from and including the date of the giving of such Suspension Notice to and including the date the Holders are advised by SkyTerra that the use of the Prospectus may be resumed. In any event, SkyTerra shall not be entitled to deliver more than a total of two (2) Suspension Notices in any 12 month period.

(d)    Neither SkyTerra nor the Holders shall permit any officer, manager, broker or any other person acting on behalf of SkyTerra to use any free writing Prospectus (as defined in Rule 405 under the Securities Act) in connection with the Shelf Registration Statement filed pursuant to this Agreement without the prior written consent of SkyTerra and the Holders.

1.4 Expenses.

(a)    Registration Expenses. All Registration Expenses shall be borne by SkyTerra.

(b)    Selling Expenses. All expenses incident to the Holders’ performance of or compliance with this Agreement, including, without limitation, all fees and expenses of counsel for the Holders, fees and expenses of any broker or dealer discounts or commissions attributable to the disposition of Registrable Securities, shall be borne solely by the Holders.

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Section 2. INDEMNIFICATION.

2.1Indemnification by SkyTerra. SkyTerra agrees to indemnify, to the extent permitted by law, each Holder, its officers, directors, employees and Affiliates, and each Person who controls such Holder (within the meaning of the Securities Act), against all losses, claims, damages, liabilities, and expenses (including reasonable attorney’s fees and expenses) arising out of, or based on (i) any untrue or alleged untrue statement of material fact contained or incorporated by reference in the Shelf Registration Statement or any Prospectus (including any preliminary Prospectus) forming a part of the Shelf Registration Statement or any “issuer free writing prospectus” (as defined in Securities Act Rule 433), or any amendment thereof or supplement thereto; (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) any violation or alleged violation by SkyTerra of the Securities Act, the Exchange Act or applicable “blue sky” laws, except insofar as the same are made in reliance on and in conformity with any information furnished in writing to SkyTerra by the Holders expressly for use therein or by the failure of the Holders to deliver a copy of such registration statement or Prospectus or any amendments or supplements thereto as required by law after SkyTerra has furnished the Holders with a sufficient number of copies of the same.

2.2Indemnification by the Holder. In connection with the Shelf Registration Statement in which any Holder is participating, the Holder shall furnish to SkyTerra in writing such information as SkyTerra reasonably requests for use in connection with any such Shelf Registration Statement or Prospectus and, to the extent permitted by law, the Holder shall indemnify SkyTerra, its directors, officers, employees and Affiliates, and each Person who controls SkyTerra (within the meaning of the Securities Act), against any losses, claims, damages, liabilities, and expenses (including reasonable attorneys fees) arising out of or based on (i) any untrue or alleged untrue statement of material fact contained in the Shelf Registration Statement, or any Prospectus (including any preliminary Prospectus) forming a part of the Shelf Registration Statement or any “issuer free writing prospectus” (as defined in Securities Act Rule 433) forming a part of the Shelf Registration Statement, or any amendment thereof or supplement thereto; or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; providedalways, that such indemnification obligations arise only to the extent that any information so furnished in writing by the Holder contains such untrue statement or omits a material fact required to be stated therein necessary to make the statements therein not misleading; and provided, further, however, that the obligation of the Holder to indemnify SkyTerra hereunder shall be limited to the net proceeds to the Holder from the sale of the Holder’s Registrable Securities pursuant to the Shelf Registration Statement.

2.3Indemnification Procedures. Any Person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any Person’s right to indemnification hereunder to the extent such failure has not prejudiced the indemnifying party) and (ii) unless in such indemnified party’s reasonable

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judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld or delayed). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel (in addition to local counsel) for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party there may be one or more legal or equitable defenses available to such indemnified party that are in addition to or may conflict with those available to another indemnified party with respect to such claim. Failure to give prompt written notice shall not release the indemnifying party from its obligations hereunder.

2.4Investigation; Contribution. The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, or controlling Person of such indemnified party and shall survive the transfer of the Registrable Securities. If the indemnification provided under Section 2.1 or Section 2.2 of this Agreement is held by a court to be unavailable or unenforceable in respect of any losses, claims, damages, liabilities or expenses referred to herein, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified Person as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that result in such losses, claims, damages, liabilities or expenses as well as any other relevant equitable considerations. The relative fault of the indemnifying party on the one hand and of the indemnified Person on the other 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 indemnifying party or by the indemnified party, and by such party’s relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. In no event shall the liability of any Holder for contribution pursuant to this Section 2.4 be greater than the amount for which such Holder would have been liable pursuant to Section 2.2 had indemnification been available and enforceable.

Section 3. RULE 144 TRANSACTIONS.

SkyTerra shall use reasonable best efforts to file with the SEC, on a timely basis, all annual, quarterly and other periodic reports required to be filed by it under Sections 13 and 15(d) of the Exchange Act, and the rules and regulations thereunder for so long as such disclosure is required to allow sales of Registrable Securities pursuant to Rule 144 under the Securities Act; provided, however, that the foregoing shall not be construed to require SkyTerra to prepare and file periodic reports if it is not required to do so under the Exchange Act. In the event of any proposed sale by any Holder of Registrable Securities pursuant to Rule 144 under the Securities Act or otherwise as provided herein, SkyTerra shall use its reasonable best efforts

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to cooperate with such Holder so as to enable such sales to be made in accordance with applicable laws, rules and regulations, the requirements of the transfer agent of SkyTerra, and the reasonable requirements of the broker through which the sales are proposed to be executed, and shall, upon written request, furnish unlegended certificates representing ownership of Registrable Securities sold thereby, such certificates to be furnished in such numbers and denominations as such Holder may reasonably request.

Section 4. TRANSFER OF REGISTRATION RIGHTS.

Any Holder may transfer all or any portion of its rights under this Agreement to any permitted transferee of Registrable Securities (such transferee a “Transferee”). Any transfer of registration rights pursuant to this Section 4 shall be effective upon receipt by SkyTerra of (i) written notice from such Holder stating the name and address of any Transferee and identifying the number of Registrable Securities with respect to which the rights under this Agreement are being transferred and the nature of the rights so transferred, and (ii) a written agreement from such Transferee (reasonably acceptable to SkyTerra) to be bound by the terms of this Agreement.

Section 5. Definitions

“Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly or through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. The term “control” (including the correlative terms “controls,” “controlled by,” and “under common control with”) shall mean, with respect to any Person, the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.

“Agreement” has the meaning ascribed to it in the preamble.

“Board” has the meaning ascribed to it in Section 1.1(b) hereof.

“Business Day” means any day other than a Saturday, a Sunday or when commercial banks in New York, New York are not open for business.

“correspondence” has the meaning ascribed to it in Section 6.9.

“Cut Back Securities” has the meaningascribed to it in Section 1.1(f).

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, or any successor statute.

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“Exchanged Shares” has the meaning ascribed to it in the recitals.

“Filing Date” has the meaning ascribed to it in Section 1.1(a).

“FINRA” means the Financial Industry Regulatory Authority.

“Holders” means the Investors and each other holder of Registrable Securities, together with their permitted successors and assigns.

“Investors” has the meaning ascribed to it in the preamble.

“Motient” has the meaning ascribed to it in the recitals.

“Person” means any individual, firm, partnership, corporation, trust, joint venture, limited liability company, association, joint stock company, unincorporated organization, or any other entity or organization, including a governmental entity or any department, agency, or political subdivision thereof.

“Prospectus” mean the Prospectus included in the Shelf Registration Statement and any such Prospectus as amended or supplemented by any Prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities and by all other amendments and supplements to such Prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein.

“Purchased Shares” has the meaning ascribed to it in the recitals.

“Registration Expenses” means all expenses incident to SkyTerra’s performance of or compliance with this Agreement, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, fees with respect to filings required to be made with the FINRA, printing expenses, messenger and delivery and mailing expenses, fees and disbursements of custodians, SkyTerra’s internal expenses (including without limitation all salaries and expenses of its officers and employees performing legal or accounting duties), and fees and disbursements of counsel for SkyTerra and all independent certified public accountants retained by SkyTerra and other Persons retained by SkyTerra.

“Registrable Securities” means all Exchanged Shares and any Voting Common Stock which may be issued or distributed to a holder of Exchanged Shares by way of stock dividend or stock split or other distribution, recapitalization or reclassification. Any particular Registrable Securities that are issued shall cease to be Registrable Securities when (i) a

11

registration statement with respect to the sale by Holders of such securities shall have become effective under the Securities Act and such securities shall have been disposed of pursuant to such registration statement, (ii) such securities shall have been sold by Holders thereof pursuant to Rule 144 and/or Rule 145 (or any successor provision) under the Securities Act, (iii) such securities shall have been otherwise transferred, new certificates for such securities not bearing a legend restricting further transfer shall have been delivered by SkyTerra and subsequent disposition of such securities shall not require registration or qualification of such securities under the Securities Act, (iv) such securities shall have ceased to be outstanding, or (v) such securities may be sold without any limitation or requirement pursuant to Rule 144 under the Securities Act.

“SEC” has the meaning ascribed to it in Section 1.1(a).

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder, or any successor statute.

“Shelf Registration Statement”has the meaning ascribed to it in Section 1.1(a) hereof.

“SkyTerra” has the meaning ascribed to it in the preamble.

“Suspension Notice” has the meaning ascribed to it in Section 1.3(c) hereof.

“Transferee”has the meaning ascribed to it in Section 4 hereof.

“Voting Common Stock” has the meaning ascribed to it in the recitals.

Section 6. MISCELLANEOUS.

6.1Specific Performance. The parties hereto acknowledge and agree that in the event of any breach of this Agreement, the non-breaching parties would be irreparably harmed and could not be made whole by monetary damages. It is accordingly agreed that the parties hereto shall and do hereby waive the defense in any action for specific performance that a remedy at law would be adequate and that the parties hereto, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of this Agreement in any action instituted hereunder.

6.2Amendments and Waivers. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and

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shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. No modification, amendment, or waiver of any provision of this Agreement shall be effective against any Holder or SkyTerra except by a written agreement signed by the Holders of a majority of the then-outstanding Registrable Securities and SkyTerra.

6.3Successors and Assigns. All covenants and agreements in this Agreement by or on behalf of any of the parties hereto shall bind and inure to the benefit of the respective successors and permitted assigns of the parties hereto whether so expressed or not including, without limitation, any Person which is the successor to any Holder or SkyTerra.

6.4Severability. If any term, provision, covenant or restriction of this Agreement, or any part thereof, is held by a court of competent jurisdiction or any foreign, federal, state, county, or local government or any other governmental, regulatory, or administrative agency or authority to be invalid, void, unenforceable, or against public policy for any reason, the remainder of the terms, provisions, covenants, and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired, or invalidated.

6.5Entire Agreement. Except as otherwise expressly set forth herein, this document embodies the complete agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements, or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

6.6Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart.

6.7Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning of terms contained herein.

6.8Governing Law; Waiver of Jury Trial. THIS AGREEMENT AND THE VALIDITY AND PERFORMANCE OF THE TERMS HEREOF SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW OR CHOICE OF LAW. THE PARTIES HERETO HEREBY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING DIRECTLY OR INDIRECTLY FROM OR IN CONNECTION WITH THIS AGREEMENT SHALL BE LITIGATED ONLY IN THE STATE OR FEDERAL COURTS LOCATED IN MANHATTAN IN THE STATE OF NEW YORK. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HERETO CONSENT TO THE EXCLUSIVE JURISDICTION AND VENUE OF THE FOREGOING COURTS AND

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CONSENT THAT ANY PROCESS OR NOTICE OF MOTION OR OTHER APPLICATION TO EITHER OF SAID COURTS OR A JUDGE THEREOF MAY BE SERVED INSIDE OR OUTSIDE THE STATE OF NEW YORK BY REGISTERED MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO SUCH PARTY AT ITS ADDRESS SET FORTH IN THIS AGREEMENT (AND SERVICE SO MADE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME HAS BEEN POSTED AS AFORESAID) OR BY PERSONAL SERVICE OR IN SUCH OTHER MANNER AS MAY BE PERMISSIBLE UNDER THE RULES OF SAID COURTS. THE PARTIES HERETO HEREBY WAIVE ANY RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION PURSUANT TO THIS AGREEMENT.

6.9Notices. Any notices, reports or other correspondence (hereinafter collectively referred to as “correspondence”) required or permitted to be given hereunder shall be given in writing and shall be deemed given three business days after the date sent by certified or registered mail (return receipt requested), one business day after the date sent by overnight courier or on the date given by telecopy (with confirmation of receipt) or delivered by hand, to the party to whom such correspondence is required or permitted to be given hereunder.

To OZ Master Fund, Ltd., OZ Global Special Investments Master Fund, L.P., GPC LVII, LLC, Gordel Holdings Limited, and OZ Select Master Fund, Ltd.:

c/o Och-Ziff Capital Management Group

9 W. 57^th Street, 13^th Floor

New York, NY 10019

Facsimile: (212) 719-7482

Attn: General Counsel

To George Haywood IRA Rollover Account Ridge Clearing Cust:

c/o Tejas Securities Group, Inc.

8226 Bee Cave Road

Austin, TX 78746

Facsimile: (512) 330-9791

Attn: Morris D. Weiss

To Grandview LLC:

c/o Millennium Management LLC

666 Fifth Avenue, 8^th Floor

New York, NY 10103

Facsimile: (212) 841-4141

Attn: Terry Feeney / Lisa Halustick

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To Solus Core Opportunities Master Fund Ltd and Sola Ltd:

c/o Solus Alternative Asset Management LP

430 Park Avenue, 9^th Floor

New York, NY 10022

Facsimile: (212) 284-4338

Attn: Chief Legal Officer

To SkyTerra Communications, Inc.:

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Facsimile: (703) 390-6113

Attn: General Counsel

with a copy (which shall not constitute notice) to:

Skadden, Arps, Slate, Meagher & Flom LLP

Four Times Square

New York, New York 10036

Facsimile: (917) 777-2918

Attn: Gregory A. Fernicola, Esq.

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IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement on the day and year first above written.

SKYTERRA COMMUNICATIONS, INC.

By: _/s/ Scott Macleod________________

Name: Scott Macleod

Title: Executive Vice President and

Chief Financial Officer

OZ MASTER FUND, LTD.

By: _/s/ Joel Frank____________________

Name: Joel Frank

Title: Chief Financial Officer

OZ GLOBAL SPECIAL INVESTMENTS MASTER FUND, L.P.

By: _/s/ Joel Frank____________________

Name: Joel Frank

Title: Chief Financial Officer

GPC LVII, LLC

By: _/s/ Joel Frank____________________

Name: Joel Frank

Title: Chief Financial Officer

GORDEL HOLDINGS LIMITED

By: _/s/ Joel Frank____________________

Name: Joel Frank

Title: Chief Financial Officer

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OZ SELECT MASTER FUND, LTD.

By:_/s/_Joel Frank____________________

Name: Joel Frank

Title: Chief Financial Officer

GEORGE HAYWOOD IRA ROLLOVER ACCOUNT RIDGE CLEARING CUST

By:_/s/_Michael Farley_________________

Name: Michael Farley

Title: Ridge Clearing Custodian

GRANDVIEW LLC

By: Millennium Management LLC

By: _/s/ Terry Feeney__________________

Name: Terry Feeney

Title: Chief Operating Officer

SOLUS CORE OPPORTUNITIES MASTER FUND LTD

By:_/s/ Christopher Pucillo______________

Name: Christopher Pucillo

Title: Director

SOLA LTD.

By: _/s/ Christopher Pucillo_____________

Name: Christopher Pucillo

Title: Director

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656375.11-New York Server 3A - MSW

Schedule A

Investors

1. OZ Master Fund, Ltd.

2. OZ Global Special Investments Master Fund, L.P.

3. GPC LVII, LLC

4. Gordel Holdings Limited

5. OZ Select Master Fund, Ltd.

6. George Haywood IRA Rollover Account Ridge Clearing Cust

7. Grandview LLC

8. Solus Core Opportunities Master Fund Ltd

9. Sola Ltd

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EX-10

Execution Copy

Harbinger Capital Partners Master Fund I, Ltd.

Harbinger Capital Partners Special Situations Fund, L.P.

Harbinger Capital Partners Fund I, L.P.

Harbinger Co-Investment Fund, L.P.

555 Madison Avenue, 16th Floor

New York, New York 10022

September 12 2008

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Attention: General Counsel

Gentlemen:

Reference is made to that certain Stock Purchase Agreement (the “Harbinger Purchase Agreement”), dated as of September 12, 2008, by and among Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master”), Harbinger Capital Partners Special Situations Fund, L.P. (“Harbinger Special” and, together with Harbinger Master, “Harbinger”) and Motient Ventures Holding Inc. (“Motient”), pursuant to which Harbinger will purchase from Motient 23,376,074 shares (the “Purchased Shares”) of the non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”) of SkyTerra Communications, Inc. (the “Company”).

Reference is also made to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated as of July 24, 2008 and as may be amended from time to time, by and among Harbinger Master, Harbinger Special, Harbinger Co-Investment Fund, L.P. (“Satellite Fund”), Harbinger Capital Partners Fund I, L.P. (“Capital Fund” and, collectively with Harbinger and Satellite Fund, the “Securityholders”) and the Company, pursuant to which the Company has granted the Securityholders certain registration rights with respect to certain securities issued or to be issued by the Company.

Further reference is made to that certain Exchange Agreement (the “Exchange Agreement”), dated as of May 6, 2006, by and among TerreStar Corporation (f/k/a Motient Corporation) (“TerreStar”), Motient and the Company pursuant to which the Company purchased from Motient 9,034,848.51 limited partnership units of Mobile Satellite Ventures, LP (“MSV”) and 1,572.11 shares of common stock of Mobile Satellite Ventures GP, Inc. in exchange for 25,478,273 shares of the Company’s Non-Voting Common Stock exchangeable in certain circumstances for an equal number of shares of the Company’s Voting Common Stock (as defined below).

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Letter Agreement hereby agrees as follows:

1. Exchange of Shares.

1389616.05-New York Server 7A MSW - Draft September 10, 2008 - 8:32 PM

(a)       As soon as reasonably practicable following the Closing, the Company will exchange 67,701 of the Purchased Shares for shares of the Company’s voting common stock, par value $0.01 per share (the “Voting Common Stock”, and together with the Non-Voting Common Stock, the “Common Stock”) on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the “Exchanged Shares”). At any time and from time to time after the date of this Letter Agreement, at the request of Harbinger or any Affiliate of Harbinger (each a “Harbinger Affiliate” and, collectively with Harbinger, each a “Stockholder”), upon the certification of Harbinger or such Harbinger Affiliate to SkyTerra of the representation and warranty contained in Section 4(c) with respect to such entity as of such date, the Company will exchange all or part of the remaining Purchased Shares for shares of the Voting Common Stock on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof).

In the event that Harbinger is unable to obtain the consent of the Federal Communications Commission (“FCC”) authorizing Harbinger to own up to 100% of the Common Stock of the Company (the “FCC Consent”), which is required in order for Harbinger to take title to the Remaining Shares (as hereinafter defined), and the Collateral Agent (as hereinafter defined) in possession of such Remaining Shares sells some or all of the Remaining Shares to a third party (such third party, also a “Stockholder”), then the Company agrees that at any time and from time to time, at the request of such third party, the Company will exchange all or a part of such Remaining Shares for shares of Voting Common Stock on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) provided that such third party provides to SkyTerra a certification of the representations and warranties contained in Section 4 with respect to such third party as of such date. Upon surrender of certificates representing the shares of Non-Voting Common Stock that are being exchanged, the Company will issue to such Stockholder certificates representing the appropriate number of shares of Voting Common Stock registered in the name of such Stockholder or such other Person as the Stockholder may designate. The shares of Voting Common Stock issuable upon exchange for the shares of Non-Voting Common Stock will have been duly authorized by the Company and, when delivered in accordance with the terms of this Letter Agreement and upon surrender of the Purchased Shares to the Company, will be validly issued, fully paid and nonassessable.

For purposes of this Letter Agreement, (i) “Remaining Shares” shall mean 7,656,737 of the Purchased Shares, which shall be held in escrow by the Collateral Agent for the benefit of Harbinger, pending receipt of the FCC Consent, and (ii) “Collateral Agent” shall mean Goldberg, Godles, Wiener & Wright.

(b)       The certificates representing the Voting Common Stock issued pursuant to Section 1(a) will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE

2

SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER, HAS BEEN DELIVERED TO THE ISSUER AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

(c)       If the issuance of shares of Voting Common Stock to any Stockholder pursuant to Section 1(a) would conflict with, violate or constitute a breach or default under FCC rules or regulations to which the Company or any of its subsidiaries is subject; violate any judgment, order, decree or law applicable to the Company or any of its subsidiaries; or delay or otherwise adversely impact any consent, approval, or filing of the Company or its subsidiaries with the FCC, then the Company shall issue the maximum number of shares of Voting Common Stock pursuant to Section 1(a) that can be issued without causing such conflict, violation, breach, delay or adverse impact, or without receipt of such consent or approval, or pursuant to such consent or approval.

2.         Registration Rights Agreement. As promptly as reasonably practicable, the Company and Harbinger shall take all actions necessary to amend the definition of “Registrable Shares” in the Registration Rights Agreement to include the Purchased Shares to be purchased by Harbinger pursuant to the Harbinger Purchase Agreement. In the event that Harbinger is unable to obtain the FCC Consent, and the Collateral Agent sells some or all of the Remaining Shares to a third party, the Company agrees, as promptly as reasonably practicable following such sale, to take all actions necessary to enter into a customary registration rights agreement with such third party, providing for a shelf resale registration statement with respect to such Remaining Shares. Such agreement shall be in substantially the form of the registration rights agreement being entered into by the Company on the date hereof with investors purchasing an aggregate of 6,550,000 shares of the Company’s common stock from Motient pursuant to the Letter Agreement dated the date hereof (the “Other Investors Letter Agreement”), and such registration rights shall not obligate the Company to consummate or assist in any underwritten offering.

3.         Company Consent. The Company hereby agrees and consents in all respects to the sale of the Purchased Shares to Harbinger pursuant to the terms and conditions of the Harbinger Purchase Agreement as such agreement is in effect on the date hereof.

4.         Harbinger Representations and Warranties. Harbinger hereby represents and warrants to the Company as follows:

(a) Authority. Harbinger has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The

3

execution and delivery of this Letter Agreement by Harbinger, the performance of Harbinger’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of Harbinger. This Letter Agreement has been duly executed and delivered by Harbinger and, assuming the due authorization, execution and delivery of this Letter Agreement by the Company, constitutes a valid and binding obligation of Harbinger, enforceable against Harbinger in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

(b) Investment Intent. Harbinger agrees that the Exchanged Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933 (the “Securities Act”) and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. Harbinger is able to bear the economic risk of holding the Exchanged Shares for an indefinite period (including total loss of its investment), and (either alone or together with its representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment. Harbinger’s acquisition of the Exchanged Shares will not require any registration under the Securities Act.

(c) Government Approvals. Harbinger’s acquisition of the Exchanged Shares does not require the consent, approval, authorization or order of, or the filing, registration or qualification of Harbinger with, any governmental authority, except for those which have already been received or made. Harbinger’s acquisition of the Exchanged Shares does not require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and does not violate any rule or regulation of the FCC.

5.         Harbinger Acknowledgement. Harbinger hereby acknowledges that it has no rights under the Exchange Agreement (except to the extent it has any rights in its role as a stockholder of TerreStar), and that it shall not be entitled to any representation on the board of directors of the Company or any of its subsidiaries, including MSV, or to any information rights with respect to the Company any of its subsidiaries, including MSV, to which TerreStar or its subsidiaries would otherwise be entitled pursuant to the Exchange Agreement.

6.         No Material Adverse Effect. No suit, action, investigation or other proceeding or event arising out of, related to or in connection with any transactions contemplated by this Letter Agreement, the Exchange Agreement or the Other Investors Letter Agreement, including any claims or consequences relating to or resulting from such transactions, and no breach or violation of this Letter Agreement, the Exchange Agreement or the Other Investors Letter Agreement, shall be deemed to constitute a breach of, or form the basis for the termination of, or constitute or otherwise form the basis of a “Material Adverse Effect” under, either the Master Contribution and Support Agreement, dated July 24, 2008, among the Company, MSV, Mobile Satellite Ventures Subsidiary LLC, Harbinger, Harbinger Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P., or the Securities Purchase Agreement, dated as of July 24, 2008, among MSV, Mobile Satellite Ventures Finance Co., a Delaware corporation, and Harbinger.

This Letter Agreement constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and contemporaneous, arrangements, covenants, promises,

4

conditions, undertakings, inducements, representations, warranties and negotiations, expressed or implied, oral or written, between the parties to this Letter Agreement, with respect to the subject matter hereof.

Each of Harbinger and its affiliates, on the one hand, and the Company, on the other hand, shall, upon request of the other party, execute and deliver to the requesting party any additional documents and take such further actions (including delivering instructions to any depositary or securities intermediary) as the requesting party may deem to be necessary or desirable to effect the transactions contemplated hereunder or to ensure compliance with the terms hereof.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the domestic substantive law of any other jurisdiction.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Letter Agreement. Facsimile and electronic signatures on this Letter Agreement shall be deemed original signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of the date and year first above written.

HARBINGER CAPITAL PARTNERS

MASTER FUND I, LTD.

By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment Manager

By: /s/ William R. Lucas, Jr.______._____

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS SPECIAL

SITUATIONS FUND, L.P.

By: Harbinger Capital Partners Special Situations GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS FUND I, L.P.

By: Harbinger Capital Partners GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CO-INVESTMENT FUND, L.P.

By: Harbinger Co-Investment LP, LLC, as general partner

By: HMC – New York, Inc., as managing member

By: /s/ William R. Lucas, Jr.______________

Name: William R. Lucas, Jr.

Title: Executive Vice President

Acknowledged by:

SKYTERRA COMMUNICATIONS, INC.

By: /s/ Randy Segal_________________________

Name: Randy Segal

Title: Senior Vice President and General Counsel

[SIGNATURE PAGE TO LETTER AGREEMENT] IMS_FOOTERDIVEND

EX-10 8 dex10-18.htm LETTER AGREEMENT DATED AS OF SEPTEMBER 16, 2008

Execution Copy

Harbinger Capital Partners Master Fund I, Ltd.

Harbinger Capital Partners Special Situations Fund, L.P.

Harbinger Capital Partners Fund I, L.P.

Harbinger Co-Investment Fund, L.P.

555 Madison Avenue, 16th Floor

New York, New York 10022

September 16, 2008

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Attention: General Counsel

Gentlemen:

Reference is made to that certain Stock Purchase Agreement (the “Harbinger Purchase Agreement”), dated as of September 12, 2008, by and among Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master”), Harbinger Capital Partners Special Situations Fund, L.P. (“Harbinger Special” and, together with Harbinger Master, “Harbinger”) and Motient Ventures Holding Inc. (“Motient”), pursuant to which Harbinger purchased from Motient 23,376,074 shares (the “Purchased Shares”) of the non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”) of SkyTerra Communications, Inc. (the “Company”).

Reference is also made to that certain Letter Agreement (the “Initial Letter Agreement”), dated as of September 12, 2008, by and among Harbinger and the Company, pursuant to which the Company (i) agreed to exchange the Purchased Shares for shares of Voting Common Stock (as hereinafter defined), (ii) agreed to amend the Registration Rights Agreement (as hereinafter defined) to include the Purchased Shares in the definition of ‘Registrable Shares’, and (iii) consented to the purchase of the Purchased Shares by Harbinger pursuant to the Harbinger Purchase Agreement.

Reference is also made to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated as of July 24, 2008 and as may be amended from time to time, by and among Harbinger Master, Harbinger Special, Harbinger Co-Investment Fund, L.P. (“Satellite Fund”), Harbinger Capital Partners Fund I, L.P. (“Capital Fund” and, collectively with Harbinger and Satellite Fund, the “Securityholders”) and the Company, pursuant to which the Company has granted the Securityholders certain registration rights with respect to certain securities issued or to be issued by the Company.

Further reference is made to that certain Exchange Agreement (the “Exchange Agreement”), dated as of May 6, 2006, by and among TerreStar Corporation (f/k/a Motient Corporation) (“TerreStar”), Motient and the Company pursuant to which the Company purchased from Motient 9,034,848.51 limited partnership units of Mobile Satellite Ventures, LP (“MSV”) and 1,572.11 shares of common stock of Mobile Satellite Ventures GP, Inc. in exchange for 25,478,273 shares of the Company’s Non-Voting Common Stock exchangeable in

certain circumstances for an equal number of shares of the Company’s Voting Common Stock (as defined below).

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Letter Agreement hereby agrees as follows:

1.         Other Shares. Pursuant to Section 2.6 of the Harbinger Purchase Agreement, Harbinger has agreed to purchase from Motient an additional 250,000 shares (the “Additional Shares”) of Non-Voting Common Stock. Such Additional Shares shall be held in escrow by the Collateral Agent (as hereinafter defined) for the benefit of Harbinger, pending receipt of the FCC Consent (as hereinafter defined). None of the Additional Shares are being exchanged for shares of Voting Common Stock on the date hereof.

2. Exchange of Shares.

(a)       At any time and from time to time after the date of this Letter Agreement, at the request of Harbinger or any Affiliate of Harbinger (each a “Harbinger Affiliate” and, collectively with Harbinger, each a “Stockholder”), upon the certification of Harbinger or such Harbinger Affiliate to SkyTerra of the representation and warranty contained in Section 4(c) with respect to such entity as of such date, the Company will exchange all or part of the Additional Shares for shares of the Company’s voting common stock, par value $0.01 per share (the “Voting Common Stock”, and together with the Non-Voting Common Stock, the “Common Stock”) on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the “Exchanged Shares”).

In the event that Harbinger is unable to obtain the consent of the Federal Communications Commission (“FCC”) authorizing Harbinger to own up to 100% of the Common Stock of the Company (the “FCC Consent”), which is required in order for Harbinger to take title to the Additional Shares, and the Collateral Agent (as hereinafter defined) in possession of such Additional Shares sells some or all of the Additional Shares to a third party (such third party, also a “Stockholder”), then the Company agrees that at any time and from time to time, at the request of such third party, the Company will exchange all or a part of such Additional Shares for shares of Voting Common Stock on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) provided that such third party provides to SkyTerra a certification of the representations and warranties contained in Section 4 with respect to such third party as of such date. Upon surrender of certificates representing the shares of Non-Voting Common Stock that are being exchanged, the Company will issue to such Stockholder certificates representing the appropriate number of shares of Voting Common Stock registered in the name of such Stockholder or such other Person as the Stockholder may designate. The shares of Voting Common Stock issuable upon exchange for the shares of Non-Voting Common Stock will have been duly authorized by the Company and, when delivered in accordance with the terms of this Letter Agreement and upon surrender of the Additional Shares to the Company, will be validly issued, fully paid and nonassessable.

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For purposes of this Letter Agreement, “Collateral Agent” shall mean Goldberg, Godles, Wiener & Wright.

(b)       The certificates representing the Voting Common Stock issued pursuant to Section 1(a) will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER, HAS BEEN DELIVERED TO THE ISSUER AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

(c)       If the issuance of shares of Voting Common Stock to any Stockholder pursuant to Section 1(a) would conflict with, violate or constitute a breach or default under FCC rules or regulations to which the Company or any of its subsidiaries is subject; violate any judgment, order, decree or law applicable to the Company or any of its subsidiaries; or delay or otherwise adversely impact any consent, approval, or filing of the Company or its subsidiaries with the FCC, then the Company shall issue the maximum number of shares of Voting Common Stock pursuant to Section 1(a) that can be issued without causing such conflict, violation, breach, delay or adverse impact, or without receipt of such consent or approval, or pursuant to such consent or approval.

3.         Registration Rights Agreement. As promptly as reasonably practicable, the Company and Harbinger shall take all actions necessary to amend the definition of “Registrable Shares” in the Registration Rights Agreement to include the Additional Shares to be purchased by Harbinger pursuant to the Harbinger Purchase Agreement. In the event that Harbinger is unable to obtain the FCC Consent, and the Collateral Agent sells some or all of the Additional Shares to a third party, the Company agrees, as promptly as reasonably practicable following such sale, to take all actions necessary to enter into a customary registration rights agreement with such third party, providing for a shelf resale registration statement with respect to such Additional Shares. Such agreement shall be in substantially the form of the registration rights agreement being entered into by the Company with investors purchasing an aggregate of 6,300,000 shares of the Company’s common stock from Motient pursuant to the Letter Agreements dated the date hereof (the “Other Investors Letter Agreements”), and such registration rights shall not obligate the Company to consummate or assist in any underwritten offering.

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4.         Company Consent. The Company hereby agrees and consents in all respects to the sale of the Additional Shares to Harbinger pursuant to the terms and conditions of the Harbinger Purchase Agreement as such agreement is in effect on the date hereof.

5.         Harbinger Representations and Warranties. Harbinger hereby represents and warrants to the Company as follows:

(a) Authority. Harbinger has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Letter Agreement by Harbinger, the performance of Harbinger’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of Harbinger. This Letter Agreement has been duly executed and delivered by Harbinger and, assuming the due authorization, execution and delivery of this Letter Agreement by the Company, constitutes a valid and binding obligation of Harbinger, enforceable against Harbinger in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

(b) Investment Intent. Harbinger agrees that the Additional Shares and the Exchanged Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933 (the “Securities Act”) and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. Harbinger is able to bear the economic risk of holding the Exchanged Shares for an indefinite period (including total loss of its investment), and (either alone or together with its representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares will not require any registration under the Securities Act.

(c) Government Approvals. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require the consent, approval, authorization or order of, or the filing, registration or qualification of Harbinger with, any governmental authority, except for those which have already been received or made. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and does not violate any rule or regulation of the FCC.

6.         Harbinger Acknowledgement. Harbinger hereby acknowledges that it has no rights under the Exchange Agreement (except to the extent it has any rights in its role as a stockholder of TerreStar), and that it shall not be entitled to any representation on the board of directors of the Company or any of its subsidiaries, including MSV, or to any information rights with respect to the Company any of its subsidiaries, including MSV, to which TerreStar or its subsidiaries would otherwise be entitled pursuant to the Exchange Agreement.

7.         No Material Adverse Effect. No suit, action, investigation or other proceeding or event arising out of, related to or in connection with any transactions contemplated by this Letter Agreement, the Exchange Agreement, the Initial Letter Agreement or the Other Investors Letter

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Agreements, including any claims or consequences relating to or resulting from such transactions, and no breach or violation of this Letter Agreement, the Exchange Agreement, the Initial Letter Agreement or the Other Investors Letter Agreements, shall be deemed to constitute a breach of, or form the basis for the termination of, or constitute or otherwise form the basis of a “Material Adverse Effect” under, either the Master Contribution and Support Agreement, dated July 24, 2008, among the Company, MSV, Mobile Satellite Ventures Subsidiary LLC, Harbinger, Harbinger Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P., or the Securities Purchase Agreement, dated as of July 24, 2008, among MSV, Mobile Satellite Ventures Finance Co., a Delaware corporation, and Harbinger.

This Letter Agreement, together with the Initial Letter Agreement, constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and contemporaneous, arrangements, covenants, promises, conditions, undertakings, inducements, representations, warranties and negotiations, expressed or implied, oral or written, between the parties to this Letter Agreement and the Initial Letter Agreement, with respect to the subject matter hereof.

Each of Harbinger and its affiliates, on the one hand, and the Company, on the other hand, shall, upon request of the other party, execute and deliver to the requesting party any additional documents and take such further actions (including delivering instructions to any depositary or securities intermediary) as the requesting party may deem to be necessary or desirable to effect the transactions contemplated hereunder or to ensure compliance with the terms hereof.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the domestic substantive law of any other jurisdiction.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Letter Agreement. Facsimile and electronic signatures on this Letter Agreement shall be deemed original signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of the date and year first above written.

HARBINGER CAPITAL PARTNERS

MASTER FUND I, LTD.

By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment Manager

By: /s/ William R. Lucas, Jr.______._____

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS SPECIAL

SITUATIONS FUND, L.P.

By: Harbinger Capital Partners Special Situations GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS FUND I, L.P.

By: Harbinger Capital Partners GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CO-INVESTMENT FUND, L.P.

By: Harbinger Co-Investment LP, LLC, as general partner

By: HMC – New York, Inc., as managing member

By: /s/ William R. Lucas, Jr.______________

Name: William R. Lucas, Jr.

Title: Executive Vice President

Acknowledged by:

SKYTERRA COMMUNICATIONS, INC.

By: /s/ Randy Segal_________________________

Name: Randy Segal

Title: Senior Vice President and General Counsel

[SIGNATURE PAGE TO LETTER AGREEMENT] IMS_FOOTERDIVEND

EX-31 9 dex31-1.htm CERTIFICATION OF ALEXANDER H. GOOD, CHIEF EXECUTIVE OFFICER, SECTION 302

Exhibit 31.1

CERTIFICATIONS

I, Alexander H. Good, certify that:

1. I have reviewed this quarterly report on Form 10-Q (the “Report”) of SkyTerra Communications, Inc. (the “Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 10, 2008

/s/ Alexander H. Good

Alexander H. Good

Chief Executive Officer and President

EX-31 10 dex31-2.htm CERTIFICATION OF SCOTT MACLEOD, CHIEF FINANCIAL OFFICER, SECTION 302

Exhibit 31.2

CERTIFICATIONS

I, Scott Macleod, certify that:

1. I have reviewed this quarterly report on Form 10-Q (the “Report”) of SkyTerra Communications, Inc. (the “Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 10, 2008

/s/ Scott Macleod

Scott Macleod

Executive Vice President and Chief Financial Officer

EX-32 11 dex32-1.htm CERTIFICATION OF ALEXANDER H. GOOD, CHIEF EXECUTIVE OFFICER, SECTION 1350

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyTerra Communications, Inc. (the “Company”) for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alexander H. Good, Chief Executive Officer and President of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Alexander H. Good

Alexander H. Good

Chief Executive Officer and President

November 10, 2008

EX-32 12 dex32-2.htm CERTIFICATION OF SCOTT MACLEOD, CHIEF FINANCIAL OFFICER, SECTION 1350

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyTerra Communications, Inc. (the “Company”) for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Macleod, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott Macleod

Scott Macleod

Executive Vice President

and Chief Financial Officer

November 10, 2008

-----END PRIVACY-ENHANCED MESSAGE-----

EX-10

Execution Copy

Harbinger Capital Partners Master Fund I, Ltd.

Harbinger Capital Partners Special Situations Fund, L.P.

Harbinger Capital Partners Fund I, L.P.

Harbinger Co-Investment Fund, L.P.

555 Madison Avenue, 16th Floor

New York, New York 10022

September 16, 2008

SkyTerra Communications, Inc.

10802 Parkridge Boulevard

Reston, Virginia 20191

Attention: General Counsel

Gentlemen:

Reference is made to that certain Stock Purchase Agreement (the “Harbinger Purchase Agreement”), dated as of September 12, 2008, by and among Harbinger Capital Partners Master Fund I, Ltd. (“Harbinger Master”), Harbinger Capital Partners Special Situations Fund, L.P. (“Harbinger Special” and, together with Harbinger Master, “Harbinger”) and Motient Ventures Holding Inc. (“Motient”), pursuant to which Harbinger purchased from Motient 23,376,074 shares (the “Purchased Shares”) of the non-voting common stock, par value $0.01 per share (the “Non-Voting Common Stock”) of SkyTerra Communications, Inc. (the “Company”).

Reference is also made to that certain Letter Agreement (the “Initial Letter Agreement”), dated as of September 12, 2008, by and among Harbinger and the Company, pursuant to which the Company (i) agreed to exchange the Purchased Shares for shares of Voting Common Stock (as hereinafter defined), (ii) agreed to amend the Registration Rights Agreement (as hereinafter defined) to include the Purchased Shares in the definition of ‘Registrable Shares’, and (iii) consented to the purchase of the Purchased Shares by Harbinger pursuant to the Harbinger Purchase Agreement.

Reference is also made to that certain Registration Rights Agreement (the “Registration Rights Agreement”), dated as of July 24, 2008 and as may be amended from time to time, by and among Harbinger Master, Harbinger Special, Harbinger Co-Investment Fund, L.P. (“Satellite Fund”), Harbinger Capital Partners Fund I, L.P. (“Capital Fund” and, collectively with Harbinger and Satellite Fund, the “Securityholders”) and the Company, pursuant to which the Company has granted the Securityholders certain registration rights with respect to certain securities issued or to be issued by the Company.

Further reference is made to that certain Exchange Agreement (the “Exchange Agreement”), dated as of May 6, 2006, by and among TerreStar Corporation (f/k/a Motient Corporation) (“TerreStar”), Motient and the Company pursuant to which the Company purchased from Motient 9,034,848.51 limited partnership units of Mobile Satellite Ventures, LP (“MSV”) and 1,572.11 shares of common stock of Mobile Satellite Ventures GP, Inc. in exchange for 25,478,273 shares of the Company’s Non-Voting Common Stock exchangeable in

certain circumstances for an equal number of shares of the Company’s Voting Common Stock (as defined below).

In consideration of the mutual covenants and agreements contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Letter Agreement hereby agrees as follows:

1.         Other Shares. Pursuant to Section 2.6 of the Harbinger Purchase Agreement, Harbinger has agreed to purchase from Motient an additional 250,000 shares (the “Additional Shares”) of Non-Voting Common Stock. Such Additional Shares shall be held in escrow by the Collateral Agent (as hereinafter defined) for the benefit of Harbinger, pending receipt of the FCC Consent (as hereinafter defined). None of the Additional Shares are being exchanged for shares of Voting Common Stock on the date hereof.

2. Exchange of Shares.

(a)       At any time and from time to time after the date of this Letter Agreement, at the request of Harbinger or any Affiliate of Harbinger (each a “Harbinger Affiliate” and, collectively with Harbinger, each a “Stockholder”), upon the certification of Harbinger or such Harbinger Affiliate to SkyTerra of the representation and warranty contained in Section 4(c) with respect to such entity as of such date, the Company will exchange all or part of the Additional Shares for shares of the Company’s voting common stock, par value $0.01 per share (the “Voting Common Stock”, and together with the Non-Voting Common Stock, the “Common Stock”) on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) (the “Exchanged Shares”).

In the event that Harbinger is unable to obtain the consent of the Federal Communications Commission (“FCC”) authorizing Harbinger to own up to 100% of the Common Stock of the Company (the “FCC Consent”), which is required in order for Harbinger to take title to the Additional Shares, and the Collateral Agent (as hereinafter defined) in possession of such Additional Shares sells some or all of the Additional Shares to a third party (such third party, also a “Stockholder”), then the Company agrees that at any time and from time to time, at the request of such third party, the Company will exchange all or a part of such Additional Shares for shares of Voting Common Stock on a one-for-one basis (in each case as appropriately adjusted for any stock split, combination, capital reorganization, reclassification, stock dividend, stock distribution or similar event declared or effected after the date hereof) provided that such third party provides to SkyTerra a certification of the representations and warranties contained in Section 4 with respect to such third party as of such date. Upon surrender of certificates representing the shares of Non-Voting Common Stock that are being exchanged, the Company will issue to such Stockholder certificates representing the appropriate number of shares of Voting Common Stock registered in the name of such Stockholder or such other Person as the Stockholder may designate. The shares of Voting Common Stock issuable upon exchange for the shares of Non-Voting Common Stock will have been duly authorized by the Company and, when delivered in accordance with the terms of this Letter Agreement and upon surrender of the Additional Shares to the Company, will be validly issued, fully paid and nonassessable.

2

For purposes of this Letter Agreement, “Collateral Agent” shall mean Goldberg, Godles, Wiener & Wright.

(b)       The certificates representing the Voting Common Stock issued pursuant to Section 1(a) will bear the following legend:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF UNLESS (I)REGISTERED UNDER THE APPLICABLE SECURITIES LAWS, (II)SUCH TRANSACTION IS PURSUANT TO RULE144, RULE144A OR REGULATIONS UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (III)AN OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY TO THE ISSUER, HAS BEEN DELIVERED TO THE ISSUER AND SUCH OPINION STATES THAT THE SECURITIES MAY BE TRANSFERRED WITHOUT SUCH REGISTRATION.”

(c)       If the issuance of shares of Voting Common Stock to any Stockholder pursuant to Section 1(a) would conflict with, violate or constitute a breach or default under FCC rules or regulations to which the Company or any of its subsidiaries is subject; violate any judgment, order, decree or law applicable to the Company or any of its subsidiaries; or delay or otherwise adversely impact any consent, approval, or filing of the Company or its subsidiaries with the FCC, then the Company shall issue the maximum number of shares of Voting Common Stock pursuant to Section 1(a) that can be issued without causing such conflict, violation, breach, delay or adverse impact, or without receipt of such consent or approval, or pursuant to such consent or approval.

3.         Registration Rights Agreement. As promptly as reasonably practicable, the Company and Harbinger shall take all actions necessary to amend the definition of “Registrable Shares” in the Registration Rights Agreement to include the Additional Shares to be purchased by Harbinger pursuant to the Harbinger Purchase Agreement. In the event that Harbinger is unable to obtain the FCC Consent, and the Collateral Agent sells some or all of the Additional Shares to a third party, the Company agrees, as promptly as reasonably practicable following such sale, to take all actions necessary to enter into a customary registration rights agreement with such third party, providing for a shelf resale registration statement with respect to such Additional Shares. Such agreement shall be in substantially the form of the registration rights agreement being entered into by the Company with investors purchasing an aggregate of 6,300,000 shares of the Company’s common stock from Motient pursuant to the Letter Agreements dated the date hereof (the “Other Investors Letter Agreements”), and such registration rights shall not obligate the Company to consummate or assist in any underwritten offering.

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4.         Company Consent. The Company hereby agrees and consents in all respects to the sale of the Additional Shares to Harbinger pursuant to the terms and conditions of the Harbinger Purchase Agreement as such agreement is in effect on the date hereof.

5.         Harbinger Representations and Warranties. Harbinger hereby represents and warrants to the Company as follows:

(a) Authority. Harbinger has all requisite power, authority and legal capacity to enter into this Letter Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Letter Agreement by Harbinger, the performance of Harbinger’s obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all necessary action of Harbinger. This Letter Agreement has been duly executed and delivered by Harbinger and, assuming the due authorization, execution and delivery of this Letter Agreement by the Company, constitutes a valid and binding obligation of Harbinger, enforceable against Harbinger in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to enforcement of creditors’ rights generally and by general principles of equity.

(b) Investment Intent. Harbinger agrees that the Additional Shares and the Exchanged Shares may not be sold, transferred, offered for sale, pledged, hypothecated or otherwise disposed of without registration under the Securities Act of 1933 (the “Securities Act”) and any applicable state securities laws, except pursuant to an exemption from such registration under the Securities Act and such laws. Harbinger is able to bear the economic risk of holding the Exchanged Shares for an indefinite period (including total loss of its investment), and (either alone or together with its representatives) has sufficient knowledge and experience in financial and business matters so as to be capable of evaluating the merits and risk of its investment. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares will not require any registration under the Securities Act.

(c) Government Approvals. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require the consent, approval, authorization or order of, or the filing, registration or qualification of Harbinger with, any governmental authority, except for those which have already been received or made. Harbinger’s acquisition of the Additional Shares and the Exchanged Shares does not require a filing under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and does not violate any rule or regulation of the FCC.

6.         Harbinger Acknowledgement. Harbinger hereby acknowledges that it has no rights under the Exchange Agreement (except to the extent it has any rights in its role as a stockholder of TerreStar), and that it shall not be entitled to any representation on the board of directors of the Company or any of its subsidiaries, including MSV, or to any information rights with respect to the Company any of its subsidiaries, including MSV, to which TerreStar or its subsidiaries would otherwise be entitled pursuant to the Exchange Agreement.

7.         No Material Adverse Effect. No suit, action, investigation or other proceeding or event arising out of, related to or in connection with any transactions contemplated by this Letter Agreement, the Exchange Agreement, the Initial Letter Agreement or the Other Investors Letter

4

Agreements, including any claims or consequences relating to or resulting from such transactions, and no breach or violation of this Letter Agreement, the Exchange Agreement, the Initial Letter Agreement or the Other Investors Letter Agreements, shall be deemed to constitute a breach of, or form the basis for the termination of, or constitute or otherwise form the basis of a “Material Adverse Effect” under, either the Master Contribution and Support Agreement, dated July 24, 2008, among the Company, MSV, Mobile Satellite Ventures Subsidiary LLC, Harbinger, Harbinger Capital Partners Fund I, L.P. and Harbinger Co-Investment Fund, L.P., or the Securities Purchase Agreement, dated as of July 24, 2008, among MSV, Mobile Satellite Ventures Finance Co., a Delaware corporation, and Harbinger.

This Letter Agreement, together with the Initial Letter Agreement, constitutes the entire agreement among the parties hereto, and supersedes all prior agreements and contemporaneous, arrangements, covenants, promises, conditions, undertakings, inducements, representations, warranties and negotiations, expressed or implied, oral or written, between the parties to this Letter Agreement and the Initial Letter Agreement, with respect to the subject matter hereof.

Each of Harbinger and its affiliates, on the one hand, and the Company, on the other hand, shall, upon request of the other party, execute and deliver to the requesting party any additional documents and take such further actions (including delivering instructions to any depositary or securities intermediary) as the requesting party may deem to be necessary or desirable to effect the transactions contemplated hereunder or to ensure compliance with the terms hereof.

This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and performed in such state and without regard to the conflicts or choice of law provisions thereof that would give rise to the application of the domestic substantive law of any other jurisdiction.

This Letter Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Letter Agreement. Facsimile and electronic signatures on this Letter Agreement shall be deemed original signatures.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

5

IN WITNESS WHEREOF, the parties have duly executed this Letter Agreement as of the date and year first above written.

HARBINGER CAPITAL PARTNERS

MASTER FUND I, LTD.

By: Harbinger Capital Partners Offshore Manager, L.L.C., as investment Manager

By: /s/ William R. Lucas, Jr.______._____

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS SPECIAL

SITUATIONS FUND, L.P.

By: Harbinger Capital Partners Special Situations GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CAPITAL PARTNERS FUND I, L.P.

By: Harbinger Capital Partners GP, LLC, as general partner

By: /s/ William R. Lucas, Jr.___________

Name: William R. Lucas, Jr.

Title: Executive Vice President

HARBINGER CO-INVESTMENT FUND, L.P.

By: Harbinger Co-Investment LP, LLC, as general partner

By: HMC – New York, Inc., as managing member

By: /s/ William R. Lucas, Jr.______________

Name: William R. Lucas, Jr.

Title: Executive Vice President

Acknowledged by:

SKYTERRA COMMUNICATIONS, INC.

By: /s/ Randy Segal_________________________

Name: Randy Segal

Title: Senior Vice President and General Counsel

[SIGNATURE PAGE TO LETTER AGREEMENT] IMS_FOOTERDIVEND

EX-31

Exhibit 31.1

CERTIFICATIONS

I, Alexander H. Good, certify that:

1. I have reviewed this quarterly report on Form 10-Q (the “Report”) of SkyTerra Communications, Inc. (the “Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 10, 2008

/s/ Alexander H. Good

Alexander H. Good

Chief Executive Officer and President

EX-31

Exhibit 31.2

CERTIFICATIONS

I, Scott Macleod, certify that:

1. I have reviewed this quarterly report on Form 10-Q (the “Report”) of SkyTerra Communications, Inc. (the “Registrant”);

2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared;

(b) Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

(d) Disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: November 10, 2008

/s/ Scott Macleod

Scott Macleod

Executive Vice President and Chief Financial Officer

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyTerra Communications, Inc. (the “Company”) for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Alexander H. Good, Chief Executive Officer and President of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Alexander H. Good

Alexander H. Good

Chief Executive Officer and President

November 10, 2008

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of SkyTerra Communications, Inc. (the “Company”) for the period ended September 30, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott Macleod, Executive Vice President and Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott Macleod

Scott Macleod

Executive Vice President

and Chief Financial Officer

November 10, 2008