In Treacherous Financial Markets &An Unstable Economy

Here is how Near Earth can help…

A Leading Provider of Investment Banking and Advisory Services

to Companies and Investors in the

Satellite, Media, Telecom Sectors

December 2008

380 Lexington Ave. 17th Floor, New York, NY 10168, Tel: (212) 551-7960

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“I skate to where the puck is going to be, not where it has been.”

- Wayne Gretzky

The world has changed…

Where is the puck going?How will it get there?

How will you outmaneuver your competitor?And when you get to the puck, what next?

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…the value of good advice has notNot all banks are in transition

• Wall Street institutions departed from traditional investment banking long ago– Institutions focused on proprietary trading, hedge fund management,

and principal activities

• For “boutique” firms such as Near Earth, business profile is vastly different– Advisory focus (without conflicts)– Highly targeted industry coverage– Work with entrepreneurs, small- and mid-sized companies, and other

institutions

• We are not only better equipped but also take pride in offering well-balanced advisory services to better serve our clients’ needs– And at more reasonable rates

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What should you be doing?

Step 1: Understand the intrinsic value of your Company relative to the market

– Know your competitive landscape and likely changes

– Know your customer base and likely behavior in a down-market

Step 2: Keep abreast of financial markets

– Know your financing options in any scenario

– Know your competitors and customers’ financing options

Step 3: Keep abreast of the M&A environment

– Develop a strategy to use M&A to grow, restructure, or exit

– Know who is selling and who is buying, and at what terms

Step 4: Be prepared to act quickly

We can help!

Review (and continuously update) your strategic and financial alternatives…Are you a buyer or a seller?

State of the Financial Markets&

Economy

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Financial Markets Turmoil

• Liquidity crunch is effecting all businesses in all industries and all geographies

– In the past year, major global equity market indices have lost 30-70% of value

– Only 6 VC-backed IPOs in 2008, 5 of these in Q1

– VC and PE firms focusing on existing portfolio holdings, and struggling to raise new funds

– Corporate credit markets substantially more expensive, if not frozen

– Banks and finance companies in transition

– Hedge fund industry diminishing rapidly due to losses and LP redemptions

• Limited access to capital expected to ripple into economic fundamentals

– Capital expenditures and expansion projects to slow with constrained liquidity

– Corporate defaults and restructurings to rise with limited refinancing sources

– Economists projecting global economic downturn lasting for 18-36 months

Liquidity freeze has extended beyond sub-prime mortgages and structured credit Broad economic repercussions felt worldwide & with lasting consequences

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Financial Markets TurmoilIn the past year, major global equity market indices have lost 30-70% of value

Source: Bloomberg and MSCI Barra

The MSCI World Index is a free-float weighted equity index. It was developed with a base value of 100 as of December 31 1969. MXWO includes developed world markets, and does not include emerging markets.

-46% YTDMSCI World Index (as of 12/1/08)

U.S. and International Stock Indexes(as of 12/1/08) YTDIndex Country Current % ChangeDJIA U.S. 8,149 -37.5%S&P 500 U.S. 816 -43.6%Nasdaq Composite U.S. 1,398 -46.4%S&P/ TSX Comp Canada 9,271 -33.0%IPC All-Share Mexico 20,535 -30.5%Sao Paulo Bovespa Brazil 36,596 -42.7%Shanghai Composite China 1,871 -64.4%Hang Seng Hong Kong 13,888 -50.1%Tokyo Nikkei 300 Japan 170 -43.7%Kospi South Korea 1,076 -43.3%Bombay Sensex India 9,093 -55.2%CAC 40 France 3,263 -41.9%DAX Germany 4,669 -42.1%RTS Index Russia 658 -71.3%FTSE 100 U.K. 4,288 -33.6%Industry Stock Indexes(as of 12/1/08) YTDIndex Country Current % ChangeDow Jones U.S. Telecom U.S. 107 -36.2%Dow Jones U.S. Technology U.S. 330 -44.6%Dow Jones U.S. Internet U.S. 198 -55.9%

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Financial Markets TurmoilOur sectors of interest have not been immune

Components of the satellite index components are highlighted to the right

Near Earth Indices (Year-to-Date)

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Jan-08

Feb-08

Mar-08

Apr-08

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Jun-08

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Satellite Trad'l Media Telecom New Media NASDAQ

Near Earth Sectors of Interest(as of 12/1/08) YTDTicker Company Current % Change

TelecomISYS Integral Systems Inc. $21.13 86.2%ETL.PA Eutelsat Communications $20.54 0.9%SESG.PA SES Global S.A. $17.11 -4.9%CMTL Comtech Telecommunications $45.13 -16.1%VZ Verizon Communications, Inc. $30.51 -25.4%T AT&T $26.93 -31.1%ORB Orbital Sciences $16.00 -34.4%CDV COM DEV International $2.26 -36.3%AMT American Tower $25.43 -38.3%VSAT ViaSat Inc. $19.01 -43.9%SATS EchoStar Corp. $15.88 -51.3%GCOM Globecomm Systems Inc. $4.85 -58.1%SBAC SBA Communications $13.55 -59.1%CCI Crown Castle $12.75 -68.2%HUGH Hughes Communications, Inc. $15.45 -70.8%GILT Gilat Satellite Networks $2.22 -78.2%LORL Loral Space & Comm. Inc. $6.04 -82.3%S Sprint Nextel Corporation $2.15 -83.5%

Traditional MediaCMCSA Comcast Corporation $15.45 -11.8%DTV DirecTV Group Inc. $19.39 -13.9%TWC Time Warner Cable Inc. $19.43 -29.3%BSY British Sky Broadcasting $24.01 -48.0%WPO Washington Post $354.25 -54.5%CXR Cox Radio Inc. $5.06 -57.4%NYT New York Times $6.97 -58.3%MCCC Mediacom Communications Corp $2.10 -60.2%SBGI Sinclair Broadcast Group $2.73 -63.9%DISH Dish Network Corp $10.10 -68.5%ROIA Radio One Inc. $0.57 -75.7%MNI The McClatchy Company $1.85 -83.5%CHTR Charter Communications Inc. $0.16 -86.0%CMLS Cumulus Media Inc. $0.79 -89.9%TVL LIN TV Corp. $1.19 -90.0%EMMS Emmis Communications Corp. $0.30 -91.5%ETM Entercom Communications $0.96 -92.2%SIRI Sirius XM Radio $0.17 -94.4%

New MediaRNWK Real Network Inc. $3.34 -44.0%MSFT Microsoft Corporation $18.61 -46.2%AAPL Apple Inc. $88.93 -54.4%YHOO Yahoo! Inc. $10.74 -54.7%GOOG Google Inc. $265.99 -61.2%IACI Interactive Corporation $13.96 -63.0%ERTS Electronic Arts Inc. $17.77 -68.7%

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Chart: Green VC & Near Earth LLC / Data Source: Thomson Reuters & National Venture Capital Association Includes all companies with at least one U.S. VC investor that trade on U.S. exchanges, regardless of domicile

Venture-BackedLiquidity Events: IPOs

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19

8

2018

25

12

31

5

0 1

0

5

10

15

20

25

30

35

1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08

Financial Markets TurmoilVC and PE firms focusing on existing portfolio holdings

Only 6 VC-backed IPOs in 2008, 5 of these in Q1

Fundraising and Investing by Venture Funds ('06-Present)

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45

50

55

60

65

70

75

80

85

90

1Q'06 2Q'06 3Q'06 4Q'06 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08

# of

Fun

ds R

aise

d

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

Am

ount

Inve

sted

($,M

)

Number of Funds Raised Amount Invested

Source: Thomson Reuters, PwC & National Venture Capital Association

VC firms struggling to raise new funds, and amount invested beginning to slow

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Financial Markets TurmoilCorporate credit markets substantially more expensive, if not frozen

• Spread between investment grade/high-yield corporate debt and treasuries remains relatively high

(LQD) iShares: iBoxx $IG Corp: ETF tracking U.S. investment grade corporate bond market

(IEF) iShares: Lehman 7-10 Trs: ETF tracking Lehman Brothers 7-10 Year Treasury Index

9/15: Lehman collapse and Merrill deal with BofA announced

(HYG) iShares: iBoxx $HY Corp: ETF tracking U.S. high yield corporate bond market

(IEF) iShares: Lehman 7-10 Trs: ETF tracking Lehman Brothers 7-10 Year Treasury Index

Investment Grade Corporate Debt High Yield Corporate Debt

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Strategic M&A Trends

• A number of strategic buyers have substantial cash and equivalents balances for potential acquisitions (e.g. Apple, Google, Intel, Microsoft)

• Deals are cheaper with financial-sponsor LBOs no longer propping up prices

• Add revenue streams and profit (especially in slowing economy) more cheaply/quickly than organic growth strategy

• Industry consolidation and competitor elimination opportunity

• Likely to get more aggressive as evidence of market bottom solidifies

• Public companies largely still not buying back own stock, even after steep devaluation (may indicate lingering doubts about rebound)

(2003-Present) Source: MergerMarket

Strategic acquirers with liquidity are looking for reasonably priced targets

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Strategic M&A Trends

• Relative value of cash vs. stock may favor using stock for deals

– Preserving cash balances in uncertain economy is top priority for many

• According to Moody's Investors Service, a record $1.6 trillion in cash sits on the books of non-financial U.S. companies, $600 billion more than five years ago

– Some acquirers will prefer to use stock as M&A currency for strategic deals

– Sellers with structural flexibility and revenue/profit platforms will get deals done

– Many deals will involve stock, cash, seller paper and some form of earn-out

According to a McKinsey study of 200 global companies in an economic downturn, an effective acquisition strategy

creates significant value for shareholders

Long-term Industry Trends

&

Opportunities

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Distribution: Convergence

• Network convergence– Triple play set the stage for broadband-mobile integration– Convergence of voice, video and data on mobile and IP platforms

• EchoStar acquires Sling Media, DVB-SH trial with Alcatel-Lucent, creates Sling.com– Fixed mobile convergence (e.g. Wi-Fi enabled smartphones, femtocell)

• AT&T acquires Wi-Fi provider, Wayport• Mobile operators motivated to use “nomadic” methods to offload traffic to fixed backhaul networks

(e.g. Free Wi-Fi at Starbucks)

• Device convergence– Fighting for a piece of the “digital home”

• Functionality of customer premise equipment (e.g. DVR, AppleTV, home networking, etc.)• Media players and user interface (e.g. iTunes/iPod, Mac mini, Amazon Kindle, etc.)• Role of gaming platforms as video players, other roles (e.g. Xbox, Nintendo Wii, etc.)

– Mobile networking, applications and interoperability• Time-shifted communication (e.g. mobile IM vs. SMS)• Open standards (e.g. Google Android)• Expanded handset applications – mobile TV, transaction payments

– Digital signage (dynamic, increasingly interactive) replacing traditional billboards

Rapid evolution of consumer tastes and technological capabilities arecontinuously changing the landscape and business requirements

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Distribution: Infrastructure

• Continued improvements in bandwidth and transport efficiency– Need both high bandwidth and high quality broadband networks

• Multi-service broadband networks need end-to-end quality of service• Support applications (e.g. streaming video, VoIP, e-commerce, Enterprise Resource

Planning (ERP))• New modulation and compression standards (e.g. DVB-S-2, MPEG-4, VP8, etc.)• Emergence of switched digital video, home networking standards

– Varying needs for delay, bandwidth, packet loss, and availability• Broadcast (TV and Radio) vs. Unicast (IP) distribution• Interactive, onDemand and HD media are bandwidth hogs (e.g. HDTV over IPTV)• ERP solutions benefit from wide area network (WAN) optimization• Content delivery networks for streaming video

• Continued explosion of video content (both SD and HD) worldwide– Broadcast video still far more efficiently distributed via satellite– Fixed satellite service companies enjoying strong cash flows and good multi-year backlogs– In the developed world, DBS/Direct-to-home (DTH) added massive HD offerings to compete

• In emerging markets, DTH expanding rapidly

Infrastructure capabilities and capacity need to keep pace

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Distribution: Mobility

• Use of licensed and unlicensed spectrum is broadening– Recent spectrum auctions surpassed expectations– FCC approved use of TV broadcast spectrum “white spaces”

• Opens up possibility of vast new and innovative wireless products and services– Spectral efficiency and interference mitigation are key

Seamless mobile connectivity and global roaming more and more evident.Wireless broadband coverage continue to get filled by increasingly capable networks

Non-rural terrestrial markets

3G/3.5G, WiFi, WiMax

Rural terrestrial and emerging markets

Cellular backhaul via satellite

Marine and aerial markets

Mobile satellite services (MSS)

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Distribution: Computing

• Cloud computing offers various technology capabilities ranging from infrastructure to software “as a service”

• Web developers, software vendors, large enterprises, small businesses, and many consumers are increasingly using these services to meet their computing needs

Processing and hosting quality evolving withcustomer trends and infrastructure solutions

…as a Service

Cloud Computing Landscape

…and many more

Source: Wikipedia & Near Earth LLC

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Content: Convergence

• Platform convergence– Arrangements between media, entertainment, Internet, cable and wireless companies

to extend the reach of content across a number of platforms• CBS acquires SignStorey, CNET and Last.fm• Comcast acquires DailyCandy

– Traditional content on digital platforms• Christian Science Monitor will be online only• Google offering digital books online• Amazon’s Kindle Device

• User-generated content, once seen as displacing professional content, is now losing viewership and revenue share to professional content

– YouTube partners with CBS, MGM and Lionsgate– Internet publishing groups in the blogosphere (e.g. Gawker Media)– Social networking in the enterprise (e.g. LinkedIn)

Nature of media (both traditional and new) forced to evolve, assimilate and combine

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Content: Proliferation

• Quantity and fragmentation of content• Unlimited choices for the consumer creates

confusion in the marketplace– “Long-tail” and niche content in all aspects of

media (e.g. digital music libraries, news sources, books, video, artists, publishers, etc.)

– Majority of revenues still derived from “head”or popular content

– Professional content more valuable than user-generated

• Low barriers initially create level playing field• Progressively a small set of companies dominates –

branded aggregators address customer confusion– Google (search)– Amazon (online retail)– iTunes (digital music)– Hulu (branded video)

Differentiation increasingly challenging inan environment of low barriers and very large numbers

Sample: Digital music landscape

Source: Near Earth LLC

Satellite(DARS, DMB)

Fixed broadband

Terrestrialbroadcast

Internet radio

Subscription services

Aggregation services

Traditional radio

Satellite radio

HD radio

Cellular/WiFi/WiMAX

Audio Services Distribution Method

Digital download /On Demand services

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Content: Interactivity

• Interactivity and interaction

– User feedback and comments

– Bookmarking and sharing (e.g. del.icio.us, digg, flickr, etc.)

– Micro-communication with “followers” (e.g. Twitter, Tumblr, etc.)

– Integration with social sites

• Customization and filtering

– Screening and aggregation (e.g. RSS, Friendfeed, etc.)

– Personalization (e.g. Pandora, Slacker, etc.)

• Targeting

– Location based services (e.g. 3-D and street view maps, GPS, local services, etc.)

• Mash-up with geographic, spatial and user-generated information

Interactivity features deepen and broaden the relationship with the audience

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Content: Monetization

Subscription models

(need: fee justification)• “Freemium”

– Offer free content to all at low marginal cost

– Convert small percentage to premium

– Small percent of large number is large

– Greater importance of scale

• Enterprise

– Initial consumer acceptance has opened up enterprise opportunities

– Enterprise customer easier to monetize

– Greater importance of sophistication and privacy in enterprise

New media business models required to mature and demonstrate profit potential

Advertising models

(need: measurement, ROI, stickiness, relevance)• Online ad networks vs. direct sales

– Pricing dynamics related to supply and demand and commoditization of inventory

– Ability to aggregate remnant inventory into relevant platforms for advertisers

– Embedded advertising without ruining consumer experience (video, audio, widgets, roll-over, etc.)

• Data mining and utilization

– Sale of anonymous user data (e.g. spending behavior) to marketers and researchers

• Out of home

– Ability for digital signage to show ROI on large capital expenditures

How we can help

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Near Earth Advantage

• Unmatched industry expertise

• Deep industry and investor relationships

• Blend of banking and research backgrounds

• Dedication and client focus of a boutique

• Added depth of Near Earth Advisory Board

We help our clients succeed!

We pride ourselves on our industry expertiseand providing our clients with quality advice

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Customized Advisory Services

• Business plans and industry studies– New ventures or strategies– Project assessment– Roll-up initiatives– Financing support

• Strategic and financial advisory services– Competitive overview– SWOT analysis– Industry direction– Corporate finance options and strategies

• Leveraging the unique profile of Near Earth’s professional team, which includes a mix of banking, equity research and specific industry experience

• Near Earth has successfully completed advisory assignments with numerous institutional investors and large corporations

We work flexibly with companies and investors to address individual needs

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Standard Advisory Packages

Any one study: $20,000 - $40,000

Any two studies: $30,000 - $60,000

Any three studies: $40,000 - $80,000

M&A Review

Analyze buy-side and sell-side opportunities

and make recommendations

Capital Structure Review

Analyze capitalization structureand make recommendations

Valuation Review

Analyze company/asset and market economics to create financial valuation

In addition to customized solutions, we also offerproject specific packages listed below

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Investment Banking Services

• Full range of mergers & acquisition, corporate finance, and private placement services– Emerging as well as established companies in our sectors of specialization

• Transactional experience of professional team includes:– Structuring– Underwriting– Placement– Advisory– Agency and principal roles– All stages of business cycle

• More than 50 years and $30 billion in aggregate transactional expertise

We work with our clients to execute strategic and financial initiativesof almost any size

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About Us

• MBA, Georgetown• BS, Santa Clara

• Satellite/ New Media / Telecom

• Corporate Finance, M&A and Valuations

• 3 years: Design Engineer, Space Systems/Loral

• Business Ops, Intelsat• 2 years: Telecom / IT

Systems Integrator

• 3 years

Kuni

Takahashi

Education

Industry / Product Experience

Finance Experience

• MM, University of British Columbia

• BEng, McGill University

• MBA, Fordham• BA, Cornell

• MBA, UCLA Anderson• MS, University of

Maryland• BS, University of

Rochester

• MBA, MIT Sloan School• BS, MIT

• Satellite/ Aerospace/ Telecom

• Research and analysis• Quantitative Analytics

• New Media/ Digital Content/ Traditional Media/ Towers

• Debt & Equity private placements

• M&A advisory• Public issuances• Sr. Credit underwriting

• Wireless/ Cable/ Satellite/ Tech

• Research analysis• PIPEs banking• 11 years satellite engineer

at Boeing, Hughes, General Dynamics

• Satellite/ Media/ Telecom

• Co-founder/MD of satellite banking

• Corporate Finance and M&A

• Sr. Research Engineer, Lockheed

• 1 year• Divine Capital Markets

• 18 years• BMO Capital Markets,

Bentley Associates• Over $10 billion in

transactions

• 7 years• Ladenburg Thalmann,

National Securities

• 21 years• DLJ, CSFB• Raised over $15 billion

Ian

Fichtenbaum

Dan

Ramsden

John

Stone

Hoyt

Davidson

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World Class Advisory Board

• Christopher Baugh (Wireless Telecom and Satellite, President, NSR)

• Susan J. Irwin (Telecom Market Research, President, Irwin Communications)

• Bruce Wendt (Communications Towers, SteelTree Partners, formerly led M&A for AAT Communications Corp.)

• Ted Bolton, PhD (Radio and New Media, President, Bolton Research)

• Gary Hatch (Cable, IPTV, and DBS, President, ATCi Corporation)

• Stuart Jacob (New and Traditional Media, Entertainment, President, Programming and Creative Services, CBS Outernet)

• Robert Maccini (New Media and Radio, COO, Ando Media LLC and Net Radio Sales, LLC)

• Jimmy Schaeffler (New Media, DBS and Satellite Radio, CEO, The Carmel Group)

• Terry Hart, PhD (Fixed Satellite Services (FSS), former President of Loral SkyNet)

• Bruce Haymes (FSS and Digital Media, Senior Vice President and Product Leader, Digital Media, The Nielsen Company; former VP strategic development, PanAmSat)

• Ramin Khadem (Mobile Satellite Services (MSS), former CFO, Inmarsat)

• Jeremy L. Rose (Satellite Networking, Principal, Comsys)

• Peggy Slye (Satellite, Director Space & Telecom, Futron Corp.)

TelecomMediaSatellite

29

Additional Information

www.nearearthllc.com

Please visit our website for additional credentials and track record information,and access to our industry and capital markets publications

Hoyt Davidsonhoyt@nearearthllc.com

(212) 551-7960

John Stonejohn@nearearthllc.com

(646) 290-7796

Dan Ramsdendan@nearearthllc.com

(646) 843-9799

Kuni Takahashi kuni@nearearthllc.com

(646) 843-9806

Ian Fichtenbaum ian@nearearthllc.com

(646) 290-7794

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IMPORTANT DISCLOSURES AND INFORMATION ABOUT THE USE OF THIS DOCUMENT:

Near Earth, LLC ("Near Earth") has published this report solely for informational purposes. The report is aimed at institutional investors and investment professionals, and satellite, media and telecom industry professionals. This report is not to be construed as a recommendation or solicitation to buy or sell securities. The report was written without regard for the investment objectives, financial situation, or particular needs of any specific recipient, and it should not be regarded by recipients as a substitute for the exercise of their own judgment. The content contained herein is based on information obtained from sources believed to be reliable, but is not guaranteed as being accurate, nor is it a complete statement or summary of any of the markets or developments mentioned.

The authors of this report are employees of Near Earth, LLC, which is a member of FINRA. The opinions expressed in this report accurately reflect the personal views of the authors but do not necessarily reflect the opinions of New Earth itself or its other officers, directors, or employees.

The portions of this report produced by non-Near Earth employees are provided simply as an accommodation to readers. Near Earth is under no obligation to confirm the accuracy of statements written by others and reproduced within this report.

Near Earth and/or its directors, officers and employees may have, or have had, interests in the securities or other investment opportunities related to the companies or industries discussed herein. Employees and/or directors of Near Earth may serve or have served as officers or directors of companies mentioned in the report. Near Earth does, and seeks to do, business with companies mentioned in this report. As a result, Near Earth may have conflicts of interest that could affect the objectivity of this report.

This report is subject to change without notice and Near Earth assumes no responsibility to update or keep current the information contained herein.

Near Earth accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this report.

No part of this report may be reproduced or distributed in any manner, via the Internet or otherwise, without the specific written permission of Near Earth. Near Earth accepts no liability whatsoever for the actions of third parties in this respect.