Terrestar 8-K Regulation FD Disclosure

May 2007

Safe Harbor

“SafeHarbor” Statementunder thePrivateSecuritiesLitigationReform Act of1995:

Thispresentationincludes“forwardlookingstatements.” Allstatements other thanstatements ofhistorical factsincluded in thispresentationregarding theprospects of ourindustry and ourprospects,plans,financialposition andbusinessstrategy, mayconstituteforwardlookingstatements.Thesestatements arebased on thebeliefs andassumptions of ourmanagement and on theinformationcurrentlyavailable to ourmanagement at the time of suchstatements.Forwardlookingstatementsgenerally can beidentified by thewords“believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates”orsimilarexpressions thatindicatefutureevents andtrends.Although webelieve that theexpectationsreflected intheseforward-lookingstatements arereasonable,theseexpectations may notprove to becorrect.Importantfactors that couldcauseactualresults todiffermaterially from ourexpectations aredisclosed in thepreliminaryofferingmemorandum. Allsubsequentwritten and oralforward-lookingstatementsattributable to us orpersonsacting on ourbehalf areexpresslyqualified in theirentirety by thecautionarystatementsincluded in thisdocument. Factors, risks anduncertainties that couldcauseactualoutcomes andresults to bemateriallydifferent fromthoseprojectedinclude, but are notlimited to, ourability toobtainfinancing,obtain andmaintainregulatoryapprovals,generatesufficient cashflows,develop ouruniversalchipsetarchitecture,achievemarketacceptance for ourservices,develop ournetwork andgeneratetechnologicalinnovations.

Theforward-lookingstatements in thispresentation aremade only as of the date of thispresentation.Weundertake noobligation toupdate orrevise theforward-lookingstatements,whether as aresult of newinformation,futureevents orotherwise.

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MarketOpportunity and Business
Overview

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TerreStar/MotientOverview

l	TerreStar plans to develop, build and operate an all IP-based integrated satellite and ancillary terrestrial component (“ATC”) mobile communications network
	- -	TerreStar has rights to use 20 MHz of ATC eligible MSS S-band spectrum
	- -	The network will provide seamless, ubiquitous mobile communication services throughout the U.S. and Canada
l	TerreStar plans to address growing government, enterprise and consumer demand for wireless mobile voice and data services
	- -	Focus on government’s need for reliable emergency communications system
	- -	Market the services on a wholesale basis as a “carrier’s carrier”
l	Motient Corporation (Ticker: “MNCP”) ownership of TerreStar is approximately 86%
	- -	Motient also beneficially owns 44.4 million shares of SkyTerra
	- -	In February 2007, TerreStar issued $500 Senior Secured PIK Notes to fund satellite, network construction and operations
	- -	New management teams and Boards at Motient and TerreStar in place

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TerreStar’sStrategy

l	Secure The License
	- -	“Smart” Build
	- -	FCC Milestones
l	De-Risk the Business
	- -	Management
	- -	Technology
	- -	Vendors
	- -	Prudent Capital Plan
l	Pre-Subscribe the Service
l	Broaden Exit/Partner Opportunities

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Key Highlights

20 MHz of Spectrum	ATC eligible S-band spectrum in the 2 GHz range in U.S. and Canada Adjacent to PCS spectrum used by national wireless carriers Significant underlying value based on recent FCC AWS Auction 66
Advanced Network & Technology	All IP-enabled next generation network Seamlessly integrated satellite and terrestrial system Prioritization of service capability in case of disaster or emergencies Universal chipsetTMarchitecture
Strong Strategic Relationships	Cooperative Research and Development Agreement with U.S.federal government in place Vendor relationships for construction and launch of satellite, buildout ofground segment, and development of universal chipsetTMarchitecture
Large Market Opportunity	High demand for wireless services — $163B¹revenue opportunity by 2010 Governments’ heightened focus on public safety and Homeland Security Enterprises expanding wireless applications to improve operations
Scalable Business Model	Wholesale / “carrier’s carrier” operating strategy Buildout in several key markets based on customer demand

¹Based on IDCResearch,March 2006

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EmergencyPreparedness will DriveGovernmentDemand

Spurred by 9/11 and Hurricane Katrina, government at all levels is investing significantly in improving communications systems Need for uninterrupted, interoperable network connectivity during emergencies “...cellular and wireless technology as a whole is increasingly more applicable and critical to our operations.” Louisiana Homeland Security & Emergency Preparedness
	Source: In-Stat Telecom Trends and Expenditures: U.S. Government Nov 2006
	Source: Frost and Sullivan, 2005

TerreStar will seek agovernmentanchortenant for itsnetwork

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Agreement in Place with FederalGovernment

l	Cooperative Research and Development Agreement (“CRADA”) signed between U.S. Defense Information Systems Agency (“DISA”) and TerreStar in October 2006 to develop a North American emergency response communications network
l	Positions TerreStar as a collaborator with the government to develop required services and become the only qualified provider to a variety of public safety and defense users
	- -	2-year agreement
	- -	Third-party participation by mutual agreement only
	- -	Information exchanged is classified, proprietary and FOIA exempt
	- -	Authorized security clearances for 15 personnel
l	CRADA intended to provide government requirements upon which procurement will be based
	- -	Ensure continuity of government communications in event of a disaster
	- -	Provide backup platform for command and control of federal, state and local officials

“Bothcollaboratorsexpect... toeventuallydevelop products that willmutuallybenefit theGovernment and thecollaborator”

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Illustrative“Take-or-Pay”Model forGovernmentService

Governmentcontractwould de-riskbusinessmodel andenabletheoffering ofwholesaleservices on acompetitive basis

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Significant CommercialMarketOpportunity

Telematics and Logistics	Provide a wide range of functions to numerous industries, includingAuto, Retail, Manufacturing and Machine-to-Machine communications Enhance efficiency of operations, logistics and distribution networks Developing consumer telematics and security solutions with ADT
Serving the Underserved	Provide wireless access to RLECs to deliver new wireless services tothe 40 million US households deemed underserved Potential for bundled mobile and fixed wireless alternatives
Wireless Service Providers	Extending service capability of incumbent service providers Address coverage and network constraints New network alternative for MVNOs
Internet/ Media Companies	Provide platform to deliver mobile video and data services Increasing usage of data-intensive applications (video games, mobile) Additional source of advertising revenue
Corporate Networks	Provide backup support for corporate networks Secured high-speed wireless communications such as VPN Increasing wireless usage due to mobile workforces

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All-IPEnabledSeamlessly-IntegratedSatelliteandTerrestrialNetwork

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SignificantProgress inNetwork Development

	l	TerreStar-1 to be launched on Arianespace vehicle
		-	Most powerful two-way commercial communications geostationary satellite
		-	Beam coverage: continental United States, Canada, Puerto Rico, Hawaii and Alaska
		-	Capable of generating approximately 500 simultaneous spot beams
	l	TerreStar-2 (spare) construction underway
	l	2 satellite gateways being developed by Loral / Hughes
	l	ATC portfolio — global IP license

 

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AttractiveMobile Unit FormFactor

TerreStar’stechnology will allowclients toenjoycomparable handset formfactors tothose used in thewirelessindustry

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AttractiveSpectrumPosition

• Two contiguous and cleared 10 MHz blocks in 2 GHz MSS S-band
• All ATC-eligible
• Ubiquitous coverage in U.S. and Canada
• Adjacent to PCS and AWS operators
• Significant underlying value

MobileWirelessSpectrumFrequencies(MHz)

• TerreStar’s spectrum is equivalent in nature to AWS and PCS spectrum

• The satellite network and universal chipset^TMare incrementalcomponents to the MSS/ATC architecture

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U.S. andCanadianRegulatory Timeline

Event	Requirements	Timeline	Comments
Two 10 MHz Blocks of Spectrum Reservation Awarded	Completed	12/05	Subject to launch and operational capability of satellite
Two 10 MHz Blocks of Spectrum Reservation Perfected	Launch TerreStar-1	11/07	Satellite must be launchedinto assigned orbital location
	Entire System Operational	11/08	Demonstrates system functionality
Application for ATCauthorization	Order TerreStar-2	Completed 08/06	Gating item for ATCauthorization
	ATC ApplicationSubmitted	1stHalf 2007	Provides ability to operateintegrated satellite andterrestrial network
	ATC Approval Granted	2ndHalf 2008	Gating criteria include:
			•Full U.S. coverage, including Alaska, and Hawaii
			•Spare satellite
			•Integrated ground/satellite system

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ExperiencedManagementTeam in Place

 

	Name	Title	Years ofExperience2	Prior Experience
	Robert	President & CEO	25+	Pegasus Global; Deutsche Telekom; Bell Atlantic; Department of Commerce
	Brumley1
	Neil	CFO	30+	Primus Telecommunications; MCI; Overseas Telecommunications
	Hazard1
	Jeffrey	General Counsel & Secretary	11+	Capital One Financial; Piper Rudnick, LLP; Kutak Rock, LLP; SEC
	Epstein1
	Michael Reedy	COO	15+	Pegasus Global; Cambrian Communications; Bechtel
	Dennis	CTO	25+	Motient; Bell Northern Research
	Matheson
	Doug Sobieski	CMO	25+	XO Communications; Nextlink Communications
	Charlene King	SVP, Commercial Programs	25+	SkyTerra Communications, Iridium
	Robert Siegel	EVP, Corporate Development and M&A	15+	Jefferies & Co.; CIBC; Prudential Securities
	1Corporate officers of both Motient and TerreStar
	2Years of functional experience

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FinancingOverview

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Corporate Structure

 

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High Yield Offering Summary

Issuer:	l	TerreStar Networks Inc.
Issue:	l	Senior Secured PIK Notes
Coupon	l	15%
Coupon Payment	l	Accretes for 4 years
Gross Proceeds:	l	$500 million
Distribution:	l	144A for life
Maturity:	l	7 years
Optional Redemption:	l	Non-Call
Security:	l	Substantially all assets and stock of the Issuer and FCC license subsidiary
Use of proceeds:	l	To fund the buildout of the integrated satellite and terrestrial network and repay existing debt
Guarantors:	l	All future domestic subsidiaries and TerreStar Canada entities

 

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Balance Sheet Summary

($ millions)
		March 31, 2007
Cash and Cash Equivalents	$	343
Escrow for TerreStar-1 construction		13
Total Cash		356
Senior Secured PIK notes due 2014		500
Accrued Interest		9
Total Debt	$	509
Preferred Equity		409
Common Equity		355
Total Stockholders' Equity	$	764
Total Capitalization	$	1,273

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Funding Requirements

$ millions	April - December 2007
Satellite construction TerreStar 1 & 2 (Loral)		$	90
TerreStar-1 launch (Arianespace)			40
TerreStar-1 launch insurance			40-50
GBBF earth stations (Loral/Hughes)			15
Satellite ground network, handset and terrestrial			165-185
Operating and R&D expenses			100
Total		$	450-480

Additional Near-Term CapitalResources	Liquidity from SKYT shares Vendor financing capacity Potential equity/debt offerings
Remaining Network Buildout	Approximately $100mm of additional contractual obligations in 2008-2009 primarily related to TerreStar-2 $40-60mm per market for buildout of ATC network commencing 2008  - Initial strategy is to launch in several key markets

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SubstantialUnderlyingSpectrumValue

     Implied spectrum value of over $4 billion²based on AWS-Auction 66 REAG market values

Source: WallStreetResearch
¹Based on FCCdetermined value of $4.8billion. Assumes 290million US POPs
²Based on $0.65/MHz POP ofaverage D, E, and FAuction 66 REAGvalues, 330million POPs, and 20 MHz ofspectrum

 

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Key Highlights

• 20 MHz of ATC eligible S-band spectrum in U.S. and Canada
   
• Large government and commercial markets opportunity
   
• Advanced next generation network and technology
   
• Strong strategic relationships
   
• Scalable business model

 

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