Master Development and Licensing Agreement

Exhibit 10.3

Pursuant to 17 CFR 240.24-b, confidential information has been omitted in places

marked “[***]” and has been filed separately with the Securities and Exchange

Commission pursuant to a Confidential Treatment Application filed with the

Commission

Statement of Work #         

Commercial PDA Phone Specification Phase

1. INTRODUCTION

This Statement of Work # (“SOW”) is made this 19th day of December 2008 by and between Elektrobit Inc. (“Elektrobit” or “EB”) and TerreStar Network Inc. (“TerreStar” or “TSN”) for the Commercial ATC/SAT PDA phone development specification phase (milestones M0-M1) activities, and is covered by Master Development and Licensing Agreement between Elektrobit and TerreStar dated August 10, 2007, as amended (“Agreement”). Capitalized terms that are not otherwise defined in this SOW have the meaning defined in the Agreement.

2. PROJECT OVERVIEW

The main objective of the Commercial PDA Phone program (“StarCom Program”) is to design, develop and test the PDA phone based on the StarGate reference design. The primary target of the program is to support ramp-up of TerreStar’s Commercial PDA operations, drive network usage and create revenue with a compelling handheld device.

The scope of the Commercial PDA phone Program is to implement a commercial ATC/SAT product with an agreed feature-set and sufficient supply capability, targeted initially for the AT&T sales channel. Current plan is to implement supply capacity for [***] units. More investment for mechanical parts and production tools are needed in order to increase the capacity beyond [***] units. Lead time for the invested items are typically [***] months.

StarGate FF#1rev2 prototype is used as reference design for the development. Production is planned to be done by Flextronics in Malaysia (in order to minimize costs and risks, especially considering the time schedule and volumes). There is [***] month post/product engineering phase after production ramp-up.

This SOW covers the items for the specification phase (milestones M0 – M1) of the Commercial PDA phone development. The inputs for the activities are defined in section TerreStar Furnished items, tasks in Work Packages and outputs in EB deliveries. The work packages are as follows:

WP1: Features and requirements clarification

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This work package includes planning and specification development to be performed by EB during the Commercial Phone program specification phase (M0-M1) for the following activities:

[***]

TerreStar is controlling the overall product requirement process with EB support.

WP2: User experience, user interface (UI) and Industrial design (ID) clarification

This work package includes Product Management and User Experience related tasks. Stargate/TerreStar Business/PDA Phase 1 PD (Product Description) has been modified to fulfill reference design requirements.

User Experience in Stargate

Current Stargate ID has been designed to fulfill Stargate product requirements and the look & feel specified by TSN. As phone features and requirements are revised, EB will update the ID accordingly.

Maintaining the project target schedule for the ID update will require that no major changes be made; the mechanics concept and product outer dimensions will not be changed. Keypad, product colors and other minimal decoration changesmay be made.

The Stargate UI has been specified to serve the TSN service offering. As Commercial Phone features and requirements are revised, EB will update the UI accordingly.

EB will use the existing UI-specifications as the baseline for development of the Commercial PDA. If new UI requirements are developed, EB and TSN will jointly review and specify any additional changes to the UI to be incorporated into the Commercial PDA.

WP3: Essential intellectual property rights (IPR) and Commercial license.

[***]

WP4: Program, HW and SW design specifications (including development for critical phone features e.g. security)

EB will perform the following main tasks during the specification phase (M0-M1):

Program Plans :

[***]

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[***]

Hardware (HW) – Plans and Specifications

[***]

HW – Deferred tasks from Stargate project (activities for the features which are critical to proceed according to the planned Commercial PDA phone program schedule):

[***]

Software (SW) – Plans and Specifications

[***]

SW – Deferred tasks from Stargate project (activities for the features which are critical to proceed according to the planned Commercial PDA phone program schedule)

[***]

WP5: Verification and validation specification including operator testing

EB will perform test planning and extensive testing for the Commercial PDA Phone during specification phase (M0-M1). EB will perform the following activities:

[***]

WP6: Operations, Logistics, Sourcing and After Sales .

At a minimum, EB will perform the following planning and specification tasks:

[***]

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3. PERIOD OF PERFORMANCE

Based on the planned schedule the period of performance for work to be performed by EB under this SOW is approximately [***] months, starting [***] and ending [***].

4. SCHEDULE

The following table includes the target schedule for Commercial PDA phone development.

Commercial PDA Phone development program target milestone schedule

This statement of work is covering the specification phase (M0-M1) of the program. New SOW is needed for further development after specification phase.

5. TERRESTAR FURNISHED ITEMS

The following table list Terrestar Furnished Items to Elektrobit which originate from Program Parties or 3 ^rd Parties.

Commercial PDA Phone program specification phase Terrestar Furnished Items: