Elektrobit Oyj - Company Announcement

EB (ELEKTROBIT CORPORATION) HAS INITIATED LEGAL PROCEEDINGS AGAINST ITS CUSTOMER TERRESTAR CORPORATION SEEKING TO COLLECT RECEIVABLES IN THE AMOUNT OF APPROXIMATELY USD 25.8 MILLION

STOCK EXCHANGE RELEASE

Free for publication on November 20, 2010, at 12:30 a.m. (CET+1)

EB (ELEKTROBIT CORPORATION) HAS INITIATED LEGAL PROCEEDINGS AGAINST ITS CUSTOMER
TERRESTAR CORPORATION SEEKING TO COLLECT RECEIVABLES IN THE AMOUNT OF
APPROXIMATELY USD 25.8 MILLION

EB's  (Elektrobit Corporation)  subsidiary Elektrobit  Inc. has  filed a lawsuit
against  its customer TerreStar Corporation (TerreStar)  in the Supreme Court of
the  State of  New York  seeking payment  of its  outstanding receivables in the
amount of approximately USD 25.8 million from TerreStar.

The  claim is based on a guarantee issued by TerreStar for EB's receivables from
TerreStar's   majority-owned   subsidiary  TerreStar  Networks  Inc.  (TerreStar
Networks)  that has filed a voluntary  petition for reorganization under Chapter
11 of the United States Bankruptcy Code, as informed by EB on October 20, 2010.
Further,  the  claim  is  also  based TerreStar's direct contractual obligations
towards  EB. At the  moment, EB's receivables  from TerreStar Networks amount to
approximately  USD  25.9 million  (EUR  19.0 million  as  per  exchange  rate of
November 18, 2010).

The  lawsuit  filed  by  EB  is  not  expected  to  affect  EB's  rights  in the
reorganization  proceedings initiated  by TerreStar  Networks. The court filings
relating to such proceedings continue to contain limited information on how EB's
receivables   will   be   treated   in  the  reorganization,  but  the  plan  of
reorganization  filed by TerreStar Networks  and its affiliated debtors suggests
that  payment of EB's receivables may take the form of newly issued common stock
and  rights to purchase newly issued preferred stock in the reorganized debtors.
The  plan  of  reorganization  is  subject  to court and creditor approval under
United States bankruptcy law.

Currently,  TerreStar is not part of the reorganization proceedings initiated by
TerreStar  Networks. According to  court filings relating  to the reorganization
proceedings,  it is contemplated  by TerreStar Networks  that TerreStar (and its
subsidiary  TerreStar Holdings Inc.) will file their own voluntary petitions for
reorganization under Chapter 11 of the United States Bankruptcy Code in the near
term.   It is EB's understanding that  if TerreStar did file for reorganization,
the  legal proceedings brought by EB against TerreStar would be stayed under the
United States bankruptcy law.

Based  on information currently available to EB, the above legal proceedings and
TerreStar  Networks'  reorganization  proceedings  so  far  will not affect EB's
earlier  assessments on the effects of the reorganization proceedings and nor do
they affect the outlook for EB's profit and financial position. EB has disclosed
assessments on the effects of the proceedings and information on the effects and
outlook  for EB's profit  and financial position  on October 25, 2010 and in the
January-September  2010 interim report of October 28, 2010. It is possible that,
based  on later information related to TerreStar Network's reorganization and/or
any  possible filings for reorganization by TerreStar,  this view may need to be
reconsidered.



Oulu, November 20, 2010
EB, Elektrobit Corporation
Jukka Harju
Chief Executive Officer

Further information:

Jukka Harju
Chief Executive Officer
Tel +358 40 344 5466

For  further  information  on  TerreStar  and  TerreStar  Networks,  please  see
www.terrestar.com and www.TerreStarInfo.com.

Distribution:

NASDAQ OMX Helsinki
Principal media


EB, Elektrobit Corporation
EB  develops  advanced  technology  and  transforms  it  into enriching end user
experiences.   EB  specializes  in  demanding  embedded  software  and  hardware
solutions  for the automotive industry  and wireless technologies. The company's
net sales for the year 2009 totaled EUR 153.8 million. Elektrobit Corporation is
listed on the NASDAQ OMX Helsinki.www.elektrobit.com






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