ex10_4.htm



  
    Exhibit
      10.4

      


      EMPLOYMENT
        AGREEMENT

      


       

      This
        Employment Agreement (this “Agreement”)
        is dated as of this 15th
        day of
January, 2008, by and between TerreStar
        Networks Inc., a Delaware corporation (hereinafter referred to as the “Company”),
        and Dennis Matheson (the
“Executive”).

       

      WHEREAS,
        the Company and the Executive entered into that
        certain employment agreement dated as of May 1, 2007, as amended (the
“Predecessor
        Agreement”), which expires by its terms on
        January 15, 2008; and

       

      WHEREAS,
        the Company and the Executive wish to continue
        the Executive’s employment with the Company following the expiration of the
        Predecessor Agreement under the terms and conditions set forth
        herein.

       

      CONSEQUENTLY,
        in consideration of the mutual
        covenants herein contained and of the mutual benefits herein provided, the
        Company and the Executive agree as follows:

       

      1.           
        Representations and
        Warranties.

       

      (a)           
        The Executive represents and warrants to the Company that the Executive is
        not
        bound by any restrictive covenants and has no prior or other obligations
        or
        commitments of any kind that would in any way prevent, restrict, hinder or
        interfere with Executive’s acceptance of continued employment or the performance
        of all duties and services hereunder to the fullest extent of the Executive’s ability and
        knowledge.  The Executive agrees to indemnify and hold harmless the
        Company for any liability the Company may incur as the result of the existence
        of any such covenants, obligations or commitments.

       

      (b)           
        The Company acknowledges and agrees that nothing herein shall be deemed to
        terminate, modify, alter or eliminate any compensation, benefits or related
        rights Executive already earned or in which he became fully vested (without
        any
        contingency that would result in the loss of such rights, compensation or
        benefits) in connection with his employment with the Company prior to the
        execution of this Agreement, including but not limited to any vesting in
        or
        contributions made to any pension funds, 401(k) plans, vested stock options
        or
        restricted stock or other equity interest in the Company.

       

      2.           
        Term of
        Employment.  The Company will continue to employ the Executive
        and the Executive accepts continued employment by the Company on the terms
        and
        conditions herein contained for the period (the “Employment
        Period”) provided
        in Section 5 of
        this Agreement.

       

      3.           
        Duties and Functions.

       

      (a)           
        (i)            The
        Executive shall be employed as Chief Technology Officer of the Company and
        shall
        oversee, direct and manage the technology matters of the Company. The Executive
        shall report directly to the Chief Executive Officer of the Company (the
“CEO”).


      
        
          
          

        

        
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      (ii)           
        The Executive agrees to undertake the duties and responsibilities inherent
        in
        the position of Chief Technology Officer, which may encompass different or
        additional duties as may, from time to time, be assigned by the CEO, and
        the
        duties and responsibilities undertaken by the Executive may be altered or
        modified from time to time by the CEO. The Executive agrees to abide by the
        rules, regulations, instructions, personnel practices and policies of the
        Company and any change thereof which may be adopted at any time by the
        Company.

       

      (b)           
        During the Employment Period, the Executive will devote his full time and
        efforts to the business of the Company and, except as expressly provided
        herein,
        will not engage in consulting work or any trade or business for his own account
        or for or on behalf of any other person, firm or corporation that competes,
        conflicts or interferes with the performance of his duties hereunder in any
        way.
        The Executive may engage in non-competitive business or charitable activities
        for reasonable periods of time each month so long as such activities do not
        interfere with the Executive’s responsibilities
        under this
        Employment Agreement.  The Company acknowledges that the Executive
        currently serves on the board of directors of the companies and organizations
        listed on Schedule
        A attached hereto (the “Other
        Company Board Obligations”) and that the Other Company Board Obligations
        do not violate the terms of this Agreement.  The Executive
        acknowledges that he does not reasonably expect that such Other Company Board
        Obligations will violate the terms of this Agreement during the Executive’s
        employment with the Company.  The Company acknowledges that, in
        addition to the Other Company Board Obligations, from time to time, the
        Executive may be asked to serve on the board of directors of other companies
        or
        organizations.  The Company and the Executive agree that, subject to
        the prior written approval of the Company, which shall not be unreasonably
        withheld, the Company shall permit the Executive to serve on the boards of
        up to
        two public companies and not more than four (4) boards in total at any one
        time
        (including the Other Company Board Obligations); provided, however,
        that, with
        respect to the Other Company Board Obligations and any additional board
        positions maintained by the Executive, such services (i) do not materially
        interfere with or materially affect the Executive’s service to the Company, (ii)
        do not otherwise create a situation where a conflict of interest or ethical
        concerns are likely to be created and (iii) are not for companies or
        organizations that compete directly with the Company’s business as then
        conducted.

       

      4.           
        Compensation.

       

      (a)           
        Base
        Salary:

       

      (i)           
        As compensation for his services hereunder, during the Executive’s employment as
        Chief Technology Officer, the Company agrees to pay the Executive a base
        salary
        at the rate of Three Hundred Sixty-Four Thousand ($364,000) per annum (the
        “Base
        Salary”), payable in accordance with the Company’s normal
        payroll schedule, or
        on such other periodic basis as may be mutually agreed upon by the Company
        and
        the Executive.  The Company may withhold from any
        amounts payable
        under this Agreement such federal, state or local taxes as shall be required
        to
        be withheld pursuant to any applicable law or regulation.


      
        
          
          

        

        
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      (ii)           
        At the end of calendar year 2008 and at the
        end of each subsequent calendar year thereafter, the Executive’s salary shall be
        reviewed in accordance with corporate policy in effect at the time and
        contributions made by the Executive to the Company during such calendar year
        subject to the provisions of Section 5 of this
        Agreement.

       

      (b)           
        Bonus:  The
        Executive shall be eligible to receive an annual cash bonus award (the “Annual Bonus”), which shall
        be based on a target of Sixty percent (60%) of the Executive’s then current
Base Salary (the “Target
        Annual Bonus”).  The Annual Bonus is not guaranteed and is
        contingent upon the Executive and the Company achieving deliverables or goals
        agreed to by the Executive and the CEO or compensation committee of the
        Board (the “Compensation
        Committee”).  Any Annual Bonus shall be
        determined by the Board or the Compensation
        Committee. 
        There will be an opportunity for the Executive to earn more than the Target
        Annual Bonus based upon Executive’s success in meeting identified performance
        targets during the relevant time period.  The Target Annual Bonus shall be paid, if
        at all, by no
        later than the fifteenth (15th) day of the third (3rd) month after the close
        of
        the fiscal year with respect to which the Target Bonus Award is
        payable. For
        purposes of this Agreement, the Executive’s Base Salary and Annual Bonus shall
        be referred to collectively as the “Total Cash
        Compensation.”

       

      (c)           
        Participation
        in
        Equity Incentive Program:  The Executive will be eligible to
        participate in the 2006 TerreStar
        Corporation Equity Incentive Stock Plan, as the same may be amended from
        time to
        time, and such other equity or
        long-term incentive
        programs that
        the Company has established or may, from time to time, establish for its
        employees or service providers (each, a “Plan”
        and, collectively, the “Plans”).  The
        terms and conditions governing eligibility for, entitlement to, and
        participation under any Plan shall be governed by such Plan and any other
        documents or agreements to be executed by the Executive or the Company in
        accordance therewith.

       

      (d)           
        Other
        Expenses:  In addition to the compensation described in this
Section
        5, the
        Company agrees to pay and reimburse the Executive during his employment for
        all
        reasonable, ordinary and necessary, properly vouchered, client-related business
        or entertainment expenses incurred in the performance of his services hereunder
        in accordance with Company policy in effect from time to time; provided, however,
        that the
        amount available to the Executive for such travel, entertainment and other
        expenses may require advance approval by the Chief Financial Officer or such
        other executive officer of the Company pursuant to the Company’s policy then in
        effect.  The Executive shall submit vouchers and receipts for all
        expenses for which reimbursement is sought.

       

      (e)           
        Vacation:  During
        each calendar year, the Executive shall be entitled to the standard amount
        of
        vacation provided by the Company for senior level executives.

       

      (f)           
        Fringe
        Benefits:  In addition to his compensation provided by the
        foregoing, the Executive shall be entitled to the benefits available generally
        to Company employees pursuant to Company programs, including, by way of
        illustration, personal leave, paid holidays, sick leave, profit-sharing,
        retirement, disability, dental, vision, group sickness, accident or
        health
        insurance programs of the Company which may now or, if not terminated, shall
        hereafter be in effect, or in any other or additional such programs which
        may be
        established by the Company, as and to the extent any such programs are or
        may
        from time to time be in effect, as determined by the Company and the terms
        hereof, subject to the applicable terms and
        conditions of the benefit plans in effect at that time.  Nothing
        herein shall affect the Company’s ability to modify, alter, terminate or
        otherwise change any benefit plan it has in effect at any given time, to
        the
        extent permitted by law.


      
        
          
          

        

        
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      5.           
        Employment Period; Termination.

       

      (a)           
        Commencement.  The
        Executive’s employment under this Agreement shall commence on January 1, 2008 (the
“Commencement
        Date”), and shall continue thereafter until this Agreement expires on
        December 31, 2008 or the Executive’s
        employment is terminated by either party pursuant to the terms of this
        Agreement.  The parties acknowledge that, for purposes of seniority,
        benefits entitlement, vacation awards, and vesting in any pension/retirement
        programs, the Executive’s initial employment date with the Company shall be the
        relevant date for calculating his eligibility for and entitlement to any
        such
        programs, rather than the Commencement Date.

       

      (b)           
        Employment
        Period.  The Employment Period shall commence on the
        Commencement Date and shall continue until the earlier of: (i) the close
        of
        business on the first anniversary of the Commencement Date (the “Expiration
        Date”) (with the period from the Commencement Date through the Expiration
        Date being referred to herein the “Initial
        Term”); and (ii) the termination of the Executive’s employment pursuant
        to the terms of this Section
        5.  The Initial Term may be renewed or extended for any
        additional period or periods after the Initial Term (each, a “Renewal
        Term”) if the Executive and the Company mutually consent to such renewal
        or extension at any time on or prior to the Expiration Date or the last day of the expiring
        Renewal
        Term, as applicable.  The Initial
        Term
        plus any Renewal Terms shall be included in the “Employment
        Period.”

       

      (c)           
        Termination By
        Executive Without Good Reason.  Notwithstanding the provisions
        of Sections
        5(a) and 5(b)
        of this
        Agreement, the Executive may terminate the employment relationship at any
        time
        for any reason by giving the Company written notice at least forty-five (45)
        days prior to the effective date of termination.  The Company, at its
        election, may (i) require the Executive to continue to perform his duties
        hereunder for the full forty-five (45) day notice period, or (ii) terminate
        the
        Executive’s employment at any time during such 45-day notice period (but any
        such termination by the Company shall not be deemed to be a termination of
        the
        Executive’s employment without Cause).  Unless otherwise provided by
        this Section 5,
        all compensation and benefits paid by the Company to the Executive shall
        cease
        upon his last day of employment.  The Executive acknowledges and
        agrees that the non-compete restrictions set forth in the Company’s
        Confidentiality, Non-competition, and Proprietary Rights Agreement or such
        other
        similar agreement by which the Executive is bound containing similar obligations
        (the “Confidentiality
        Agreement”) will remain in full force and effect for the twelve (12)
        month period subsequent to his termination pursuant to this Section
        5(c).  Furthermore, the obligations imposed on the Executive
        with respect to confidentiality, non-disclosure and assignment
        of rights to inventions or developments in this Agreement, any Confidentiality
        Agreement or any other similar agreement executed by the parties shall continue,
        notwithstanding the termination of the employment relationship between the
        parties.  Executive shall be entitled to receive any accrued but
        unpaid salary and bonuses declared and
        communicated to the Executive but not yet
        paid as of
        the effective date of his termination (other than
        such amounts as are subject to a deferred compensation arrangement)
        (collectively, net after deferrals, “Accrued
        Current Compensation”), and to be
        reimbursed in accordance with applicable Company policy for any reimbursable
        expenses that have not been reimbursed prior to such
        termination.


      
        
          
          

        

        
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      (d)           
        Termination By
        Company
        For Cause.  If the Executive's employment is terminated for
“Cause,” the Executive will not be entitled to and the Company shall not be
        obligated to pay any compensation or benefits of any type following the
        effective date of termination, but the Executive shall be entitled to receive
        any Accrued Current Compensation, and to be
        reimbursed in accordance with Company policy for any reimbursable expenses
        remaining due and owing that have not been reimbursed prior to his
        termination.  As used in this Agreement, the term “Cause” shall mean a
        termination for (i) the conviction of the Executive of, or the entry of a
        pleading of guilty or nolocontendere
        by the Executive
        to, any crime involving moral turpitude or any felony or fraud (which includes
        any acts of embezzlement or misappropriation of funds) or any material violation
        of the Sarbanes-Oxley Act of 2002; (ii) serious dereliction of a fiduciary
        obligation or duty of loyalty owed to the Company; (iii)  a refusal to
        substantially perform the Executive's duties hereunder or to comply with
        the
        policies and practices of the Company, except in the event that the Executive
        becomes permanently disabled as set forth in Section 5(f) of this
        Agreement; or (iv) Executive’s material breach of this
        Agreement.  Anything herein to the contrary notwithstanding, the
        Company shall give the Executive written notice prior to terminating the
        Executive's employment based upon a material breach of this Agreement (clause
        (iv) above), setting forth the exact nature of any alleged breach and the
        conduct required to cure such breach.  The Executive shall have
        forty-five (45) days from the giving of such notice within which to cure
        the
        breach.  The Executive acknowledges and agrees that the non-compete
        restrictions set forth in the Confidentiality Agreement will remain in full
        force and effect for the twelve (12) month period subsequent to his termination
        pursuant to this Section
        5(d).  Furthermore, the obligations imposed on the Executive
        with respect to confidentiality, non-disclosure and assignment of rights
        to
        inventions or developments in this Agreement, any Confidentiality Agreement
        or
        any other agreement executed by the parties shall continue, notwithstanding
        the
        termination of the employment relationship between the parties.

       

      (e)           
        Termination By
        Company
        Without Cause.  The Company may terminate the Executive without
        Cause by delivering written notice to the Executive at least forty-five (45)
        days prior to the effective date of such termination.

       

      (i)           
        If the Executive's employment is terminated by the Company without Cause,
        then,
        subject to the terms and conditions set forth in this Section 5(e), the
        Executive shall be entitled to receive an
        aggregate amount equal to one (1) times the
        Executive’s then current annual Total Cash Compensation as severance pay. This
        severance pay shall be paid
        in substantially equal monthly installments (or
        such other frequency consistent with the Company’s payroll practice then in
        effect for active employees at the executive level) over a period of twelve
        (12)
        months, commencing no later than thirty (30) days after the Executive’s
        employment is terminated by the Company without Cause, except as otherwise
        provided in this Agreement.  In addition,
        to
        the extent that the Executive qualifies for, complies with the requirements
        of
        and otherwise remains eligible for continuation of his health care insurance
        benefits under COBRA, and payment of COBRA premiums is permitted under
        applicable laws and regulations, the Company shall pay the COBRA premiums
        until
        the earlier of (A) such time as the Executive obtains alternative employment
        and
        becomes eligible for health insurance through his new employer and (B) eighteen
        (18) months following the date of his termination.  For purposes of
        determining severance pursuant to this Section 5(e)(i), the
        Total Cash Compensation shall be calculated based on the Executive’s current
        Base Salary as of the effective date of his termination, and the full Target
        Annual Bonus for the relevant year.  Further, the Executive shall be entitled to
        receive any
        Accrued Current Compensation, and to be reimbursed in accordance with Company
        policy for any reimbursable expenses remaining due and owing that have not
        been
        reimbursed prior to his termination.


      
        
          
          

        

        
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      (ii)           
        In addition to the Executive’s severance calculated in accordance with Section 5(e)(i),
if
        the Executive's employment is terminated by the
        Company without Cause,
the
        vesting period shall be
        accelerated for all of Executive’s unvested
        options, shares of restricted stock, or other rights to purchase equity
        securities of the Company (collectively, the “Award
        Shares”) awarded to Executive pursuant to any Plan, such that any then-unvested
        Award Shares awarded
        to Executive shall become fully vested effective immediately prior to the
        effective date of Executive’s termination of employment.

       

      (iii)           
        The Executive acknowledges and agrees that the non-compete restrictions set
        forth in the Confidentiality Agreement will remain in full force and effect
        for
        the twelve (12) month period subsequent to his termination pursuant to this
        Section
        5(e).  Furthermore, the obligations imposed on Executive with
        respect to confidentiality, non-disclosure and assignment of rights to
        inventions or developments in this Agreement, any Confidentiality Agreement
        or
        any other agreement executed by the parties shall continue, notwithstanding
        the
        termination of the employment relationship between the parties.

       

      (iv)           
        The severance pay, COBRA premium payment and accelerated vesting of Award
        Shares
        to be provided under this Section 5(e) are
        referred to herein collectively as the “Termination
        Compensation.”  The
        Executive
        shall not be entitled to any Termination Compensation unless (i) the Executive
        complies with all surviving provisions of any Confidentiality Agreement by
        which
        the Executive is bound, and (ii) the Executive executes and delivers to the
        Company after a notice of termination and
        on or before the last date on which the severance
        pay is scheduled to commence, a mutual
        release in form and
        substance acceptable to the Company by which the Executive releases the Company
        from any obligations and liabilities of any type whatsoever under this
        Agreement, except for the Company's obligations with respect to the Termination
        Compensation, which release shall not affect the Executive’s right to
        indemnification, if any, for actions taken within the scope of his
        employment.  Notwithstanding anything herein to the contrary, no
        Termination Compensation shall be paid or otherwise provided
        until all applicable revocation periods have fully expired, and the mutual
        release becomes fully and finally enforceable.  The parties hereto
        acknowledge that the Termination Compensation to be provided under this Section 5(e)(iv) is
        to be provided in part in consideration for the above-specified
        release.


      
        
          
          

        

        
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      (v)           
        Except as otherwise provided under Section
        11, the Termination Compensation described
        in this
Section 5(e) is
        intended to supersede any other severance payment provided by any Company
        policy, plan or practice.  Therefore, the Executive shall be
        disqualified from receiving any severance payment under any other Company
        severance policy, plan or practice.

      


      (f)           
        Termination for
        Executive’s Permanent Disability.  To the extent permissible
        under applicable law, in the event the Executive becomes permanently disabled
        during employment with the Company, the Company may terminate Executive’s
        employment under this Agreement by giving forty-five (45) days prior written
        notice to the Executive of its intent to terminate, and unless the Executive
        resumes performance of the duties set forth in Section 3 within
        forty-five (45) days of the date of the notice, Executive’s employment under
        this Agreement shall terminate at the end of such forty-five (45) day
        period.  If the Executive’s employment is terminated pursuant to this
Section 5(f),
        he shall be entitled to receive any Accrued
        Current Compensation, an aggregate amount equal
        to one-half
        of his then-current annual Total Cash Compensation as severance pay, and reimbursement in
        accordance with Company
        policy for any reimbursable expenses remaining
        due and owing that have not been reimbursed prior to his
        termination.  For purposes of determining severance pursuant to this
Section
        5(f), the Total Cash Compensation shall
        be
        calculated based on the Executive’s current Base Salary as of the effective date
        of his termination, and the full Target Annual Bonus for the relevant
        year.  This severance pay shall
        be paid in substantially equal monthly
        installments (or such other frequency consistent with the Company’s payroll
        practice then in effect for active employees at the executive level) over
        a
        period of twelve (12) months, commencing no later than thirty (30) days after
        the Executive’s employment is terminated because he becomes permanently
        disabled, except as otherwise provided in this Agreement, and shall be
        offset by amounts paid to the Executive under any disability insurance policy
        maintained or provided by the Company on the Executive.  If
        the Executive’s employment is terminated pursuant to
        this Section
        5(f), the vesting period shall be
        accelerated for all of Executive’s Award Shares awarded to Executive pursuant to
        any Plan, such that any then-unvested Award Shares awarded to Executive shall
        become fully vested effective immediately prior to the effective date of
        Executive’s termination of employment.  For the purposes
        of this Agreement, “permanently
        disabled” means the
        inability, due to physical or mental ill health, to perform the essential
        functions of the Executive's job, with a reasonable accommodation, if
        applicable, for ninety (90) days during any
        one year of employment irrespective of whether such days are
        consecutive.  The Executive acknowledges and agrees that the
        non-compete restrictions set forth in any Confidentiality Agreement will
        remain
        in full force and effect for the twelve (12) month period subsequent to his
        termination pursuant to this Section
        5(f).  Furthermore, the obligations imposed on the Executive
        with respect to confidentiality, non-disclosure and assignment of rights
        to
        inventions or developments in this Agreement, any Confidentiality Agreement
        or
        any other agreement executed by the parties
        shall continue, notwithstanding the termination of the employment relationship
        between the parties.


      
        
          
          

        

        
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      (g)           
        Termination Due
        To
        Executive’s Death.  Executive’s employment under this Agreement
        will terminate immediately upon the Executive's death, and the Company shall
        not
        have any further liability or obligation to the Executive, his executors,
        heirs,
        assigns or any other person claiming under or through his estate, except
        that
        the Executive’s estate shall receive any Accrued
        Current Compensation,
and the Company
        shall provide severance pay to the Executive’s estate in
        an amount equal to one-half of his then-current annual Total Cash
        Compensation. For
        purposes of determining severance pursuant to this
Section
        5(g), the Total Cash Compensation shall
        be
        calculated based on the Executive’s current Base Salary as of the effective date
        of his death, and the full Target Annual Bonus for the relevant year.  Any severance
        pay shall
        be paid
        in a lump sum within ninety (90) days after the
        Executive’s death. If the
        Executive’s
        employment is
        terminated upon his death, the vesting period shall
        be accelerated for all of Executive’s Award Shares awarded to Executive pursuant
        to any Plan, such that any then-unvested Award Shares awarded to Executive
        shall
        become fully vested effective as of his date of death and shall be exercisable
        thereafter in accordance with the terms of the applicable award
        agreement.  At the Company’s discretion, the Company shall have the
        option to provide for payment of the cash severance pay called for under
        this
Section
        5(g) by means of a life insurance policy
        owned by the Company on the Executive’s life, and the Executive agrees to take
        all steps reasonably necessary to fulfill any underwriting requirements in
        order
        for the Company to obtain such life insurance policy.  Any death
        benefit payment from such policy to the Executive’s estate or designated
        beneficiary shall offset, and not be paid in duplication of, the cash severance
        amount described in this Section
        5(g).

      


      (h)           
        Termination by
        Executive for “Good Reason”.

       

                      
        (i)           
        Subject to the
        provisions of this Section
        5(h),
the
        Executive shall have the right to terminate his employment under this
        Agreement for Good Reason.

       

                      
        (ii)           For purposes of
        this Agreement, “Good
        Reason” means the occurrence of any of the following without
        the Executive’s consent:

       

       (1)
        the Company’s willful material breach of any provision of this
        Agreement;

       

       (2)
        any material adverse change in the Executive’s compensation, position, authority, duties
        or
        responsibilities, or any other action by the Company (other than a change
because the
        Executive becomes
        permanently disabled or as an
        accommodation under the Americans With Disabilities Act) which results in:
        a
        diminution in any material respect in Executive’s position, authority, duties,
        responsibilities or base compensation,
        which diminution continues in time over at least thirty (30) days, such that
        it
        constitutes an effective demotion (provided, however,
        that, for
        the avoidance of doubt, no diminution of title, position, duties or
        responsibilities shall be deemed to occur solely because the Company becomes
        a
        division, unit or subsidiary of another corporation or entity or because
        there
        has been a change in the reporting hierarchy incident thereto involving the
        Executive), excluding for this purpose material adverse changes
        made due to the Executive’s termination for Cause or termination by the
        Executive without Good Reason;

       

      
         (3)
          relocation of the Company’s headquarters
          and/or the Executive’s regular work address to a location which requires the
          Executive to travel more than fifty (50) miles from the Executive’s residence
          (provided that it shall not qualify as “Good Reason” if the Company moves its
          headquarters within the Washington, D.C. Metropolitan Area -- i.e., anywhere
          within thirty (30) miles of Capitol Hill -- even if the new headquarters
          location is more than fifty (50) miles from Executive’s residence); or

      


      
        
          
          

        

        
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      (4)
        any other action or inaction that constitutes a
        material breach by the Company of this Agreement;

       

      provided, however,
        that it
        shall not constitute Good Reason unless the Executive shall have provided
        the
        Company with written notice of the Company’s alleged actions constituting Good
        Reason (which notice shall specify in reasonable detail the particulars of
        such
        actions constituting Good Reason) within thirty
        (30) days after the initial existence of any such alleged actions and the
        Company has not cured any such alleged actions constituting Good Reason or
        substantially commenced its effort to cure such breach within thirty
        (30) days of the Company’s receipt of such written
        notice;
        provided further, that a termination by the Executive
        for Good Reason shall not be deemed to have occurred unless the termination
        occurs within two (2) years after the initial existence of any of the conditions
        specified in this Section
        5(h)(ii). Notwithstanding
        the
        foregoing, in order to avoid any confusion, any consolidation, merger or other corporate
        restructuring of or between the Company and TerreStar Corporation (“TS Corp”) (including
        but not
        limited to any transaction or series of transactions that results in TS Corp becoming
        the sole
        shareholder of the Company, or that results in TS
        Corp and the
        Company being merged into one another), or any change in the reporting hierarchy
        incident thereto involving the Executive, shall not trigger “Good Reason” as
        long as Executive’s duties, responsibilities and compensation are not materially
        altered in an adverse manner with respect to the Company, regardless of whether
        the Company remains an independent corporate entity, or becomes a part of,
        or a
        unit, division or subsidiary of, TS
        Corp or any
        related company.

       

                 
        (iii)             
A termination for Good Reason shall be treated for all severance purposes
        as a
        Termination without Cause, and the Executive shall be entitled to receive all of the payments
        identified in Section
        5(e), subject to the terms and conditions
        of Section
        5(e), and Executive’s
        Award Shares
        in the Company or TS
        Corp, as applicable, shall be accelerated
        consistent with Section 5(e)(ii);
provided,
however,
        that in
        connection with a termination for Good Reason, the Executive shall be entitled
        to exercise stock options in accordance with the terms of the Plan and any
        applicable agreements governing such stock options.  The Executive
        acknowledges and agrees that the non-compete restrictions set forth in any
        Confidentiality Agreement will remain in full force and effect for the twelve
        (12) month period subsequent to his termination pursuant to this Section
        5(h).  Furthermore, the obligations imposed on the Executive
        with respect to confidentiality, non-disclosure and assignment of rights
        to
        inventions or developments in this Agreement, any Confidentiality Agreement
        or
        any other agreement executed by the parties shall continue, notwithstanding
        the
        termination of the employment relationship between the parties.


      
        
          
          

        

        
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      (i)           
        Expiration of
        the
        Agreement.  If this Agreement expires at the end of the Initial
        Term as a result of the Company not renewing or extending the Employment
        Period
        for a Renewal Term where the Executive was willing
        and able to execute a new contract providing terms and conditions substantially
        similar to those in the expiring contract and to continue performing such
        services, then upon the Executive’s termination of employment at or after
        such expiration
        of the
        Agreement, subject to the terms and conditions set forth in Section 5(e),
        the
        Executive shall be entitled to receive severance
        pay equivalent to nine (9) months of Total Cash Compensation.  The amount payable pursuant to the
        immediately preceding sentence shall be paid in substantially equal monthly
        installments (or such other frequency consistent with the Company’s payroll
        practice then in effect for active employees at the executive level) over
        a
        period of twelve (12) months, commencing no later than thirty (30) days after
        the Executive’s employment is terminated, except as otherwise provided in this
        Agreement.  For purposes of determining severance pay pursuant to this
Section
        5(i), the Total Cash Compensation shall
        be
        calculated based on the Executive’s current Base Salary as of the effective date
        of his termination, and the full Target Annual Bonus for the relevant
        year.  In addition, if the Executive’s employment terminates at or
        after the expiration of the Agreement under the conditions described in this
        Section
        5(i), to the extent that the Executive
        qualifies for, complies with the requirements of and otherwise remains eligible
        for continuation of his health care insurance benefits under COBRA, and payment
        of COBRA premiums is permitted under applicable laws and regulations, the
        Company shall pay the COBRA premiums until the earlier of (A) such time as
        the
        Executive obtains alternative employment and becomes eligible for health
        insurance through his new employer and (B) eighteen (18) months following
        the
        date of his termination.  Further, upon the Executive’s termination of
        employment at or after the expiration of this Agreement, the Executive shall
        be
        entitled to receive any Accrued Current Compensation, and to be reimbursed
        in
        accordance with Company policy for any reimbursable expenses remaining due
        and
        owing that have not been reimbursed prior to his termination.  The
        Executive acknowledges and agrees that the non-compete restrictions set forth
        in
        any Confidentiality Agreement will remain in full force and effect for the
        twelve (12) month period subsequent to his termination of employment on or
        after
        the expiration of this Agreement.  Furthermore, the obligations
        imposed on the Executive with respect to confidentiality, non-disclosure
        and
        assignment of rights to inventions or developments in this Agreement, any
        Confidentiality Agreement or any other agreement executed by the parties
        shall
        continue, notwithstanding the termination of the employment relationship
        between
        the parties.

       

      6.           
        Company Property. All
        correspondence,
        records, documents, software, promotional materials, and other Company property,
        including all copies, which come into the Executive's possession by, through
        or
        in the course of his employment, regardless of the source and whether created
        by
        the Executive, are the sole and exclusive property of the Company, and
        immediately upon the termination of the Executive's employment, or at any
        time
        the Company shall request, the Executive shall return to the Company all
        such
        property of the Company, without retaining any copies, summaries or excerpts
        of
        any kind or in any format whatsoever.  The Executive further agrees
        that should he discover any Company property or Confidential Information
        (as
        hereinafter defined) in his possession after the return of such property
        has
        been requested, the Executive agrees to return it promptly to the Company
        without retaining copies, summaries or excerpts of any kind or in any format
        whatsoever.


      
        
          
          

        

        
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      7.           
        Non-Competition;
        Non-Solicitation.  Executive acknowledges and agrees that, as a
        condition of his employment under this Agreement, he shall be required to
        execute a copy of a Confidentiality Agreement to the extent that he has not
        already done so, and he shall be bound by the terms and conditions of that
        Confidentiality Agreement, including those provisions addressing non-competition
        and non-solicitation of customers and employees, which shall continue in
        full
        force and effect throughout the course of his employment and shall survive
        the
        termination of this Agreement and the Executive’s employment with the Company
        for any reason.  The Executive acknowledges that he has received a
        copy of the Company’s Confidentiality Agreement and he fully understands its
        terms.  The Confidentiality Agreement, as well as all of the terms and
        obligations imposed on the Executive therein, is incorporated into this
        Agreement in their entirety by reference.  It shall not be a defense
        to any action seeking to enforce the terms of the Confidentiality Agreement
        that
        the Executive has failed to execute a copy of the Confidentiality
        Agreement.  The existence of a claim, charge, or cause of action by
        the Executive against the Company under this Agreement or otherwise shall
        not
        constitute a defense to the enforcement by the Company of the foregoing
        restrictive covenants contained in the Confidentiality Agreement, but such
        claim, charge, or cause of action shall be litigated separately.

       

      8.           
        Protection of Confidential
        Information. The Executive
        agrees
        that all information, whether or not in writing, relating to the business,
        technical or financial affairs of the Company and that is generally understood
        in the industry as being confidential and/or proprietary information, is
        the
        exclusive property of the Company.  The Executive agrees to hold in a
        fiduciary capacity for the sole benefit of the Company all secret, confidential
        or proprietary information, knowledge, data, or trade secret (“Confidential
        Information”) relating to the
        Company or any of its affiliates or their respective clients, which Confidential
        Information shall have been obtained during his employment with the
        Company.  The Executive acknowledges and agrees that, as a condition
        of his employment under this Agreement, he is and shall remain bound by the
        terms and conditions of the Confidentiality Agreement, including those
        provisions addressing the confidentiality and non-disclosure of Company
        Confidential Information, and those provisions, and he obligations they impose
        on the Executive shall continue in full force and effect throughout the course
        of his employment and shall survive the termination of this Agreement and
        the
        Executive’s employment with the Company for any reason.  The Executive
        agrees that he will not at any time, either during the Term of this Agreement
        or
        after its termination, disclose to anyone any Confidential Information, or
        utilize such Confidential Information for his own benefit, or for the benefit
        of
        third parties without written approval by an officer of the
        Company.  The Executive further agrees that all documents, memoranda,
        notes, records, data, schematics, sketches, computer programs, presentations,
        prototypes, or written, photographic, magnetic or other documents or tangible
        objects developed, created or compiled by him or made available to him at
        any
        time during his employment concerning the business of the Company and/or
        its
        clients, including any copies of such materials, shall be the property of
        the
        Company and shall be delivered to the Company on the termination of his
        employment, or at any other time upon request of the Company, and he shall
        not
        retain any such materials or copies of such materials subsequent to the
        termination of his employment for any reason.

       

      9.           
        Intellectual
        Property.  The
        Executive
        acknowledges and agrees that he is and shall at all times remain bound by
        the
        terms and conditions of the Confidentiality Agreement during
        the course of his employment with the Company and thereafter, including those
        provisions addressing his obligations to the Company with respect to
        intellectual property belonging to the Company.  These obligations
        shall continue in full force and effect throughout the course of his employment
        and shall survive the termination of this Agreement and the Executive’s
        employment with the Company for any reason.


      
        
          
          

        

        
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            11
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      10.           Injunctive
        Relief.  The Executive acknowledges that he understands that,
        in the event of a breach or threatened breach of this Agreement by the Executive
        (including the terms of the Confidentiality Agreement expressly incorporated
        herein by reference), the Company may suffer irreparable harm and will therefore
        be entitled to injunctive relief, without prior notice to the Executive and
        without the posting of a bond or other guarantee, to enforce this
        Agreement.  This provision is not a waiver of any other rights which
        the Company may have under this Agreement, including the right to recover
        attorneys’ fees and costs to cover the expenses it incurs in seeking to enforce
        this Agreement, as well as to any other
        remedies available to it, including money damages.

      


      11.           Change
        of Control
        Benefits.

      


      (a)           
        In the event that, at any time during the Executive’s employment under this
        Agreement, the Company and/or TS Corp
        experiences a Change of Control (as hereinafter defined) and Executive
        experiences a Change of Control Position Modification (as hereinafter
        defined) in
        connection with such Change of Control then,
        provided that Executive shall have executed a release in form and substance
        acceptable to the Company, and subject to the other terms and conditions
        contained in this Agreement, the Executive shall be entitled to receive a
        lump
        sum payment in an amount equal to two (2)
        times
        the Executive’s then current annual Total Cash Compensation as
        severance pay, in recognition of his
        contributions leading up to the Change of Control.  Such
        lump sum payment shall be reduced by the gross
        amount of severance, if any, received by the Executive pursuant to Section
        5 of this Agreement prior to the date
        of payment under
        this Section
        11.  For purposes of determining
        severance pursuant to this Section
        11(a), the Total Cash Compensation shall
        be calculated based
        on the Executive’s current Base Salary as of the effective date of his
        termination (without giving effect to any reduction in Base Salary which
        gave
        rise to the Good Reason termination, if applicable), and the full Target
        Annual
        Bonus for the relevant year.  This severance pay shall be paid no
        later than thirty (30) days after the effective date of the Change of Control or,
        if later, the Change of Control Position Modification,
        except as otherwise specified under Section
        11(c).  In
        addition, vesting in
        all of Executive’s unvested Award Shares shall be
        accelerated such that Executive’s then unvested
        Award Shares
        shall become vested immediately prior to the effective date of Executive’s
        termination, subject to the terms and conditions of the applicable Plan and
        other agreements.  In addition, to the
        extent that the Executive qualifies for, complies with the requirements of
        and
        otherwise remains eligible for continuation of his health care insurance
        benefits under COBRA, and payment of COBRA premiums is permitted under
        applicable laws and regulations, the Company shall pay the COBRA premiums
        until
        the earlier of (A) such time as the Executive obtains alternative employment
        and
        becomes eligible for health insurance through his new employer and (B) eighteen
        (18) months following the date of his termination.  The severance
provisions
        under this Section
        11shall supersede, and not be in duplication
        of, the
        severance provisions contained in Section
        5(e), except
        as otherwise specified under Section
        11(c).
        


        (b)           
          For purposes of this Agreement, the following terms shall have the following
          meanings:

        


        (i)           
          “Affiliate”
          shall mean, with respect to any Person, any other Person that controls,
          is
          controlled by or is under common control with the first
          Person.

      


      
        
          
          

        

        
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      (ii)           
        “Change
        of Control” shall mean the earliest to
        occur of any
        of the following events,
        construed in accordance with Section 409A of the
        Internal Revenue Code of 1986, as amended, and the Treasury guidance promulgated
        thereunder (the “Code”): 

       

      (A)           
        any “person” (as defined in Section 3(a)(9) of the Exchange Act, and as modified
        in Section 13(d) and 14(d) of the Exchange Act), other than (1)
        Parent or any
        of its Subsidiaries, (2) any employee benefit plan of Parent or any of its
        Subsidiaries, (3) any Affiliate of
        Parent or any of its Subsidiaries, (4) a
        company owned, directly or indirectly, by stockholders of Parent in
        substantially the same proportions as their ownership of Parent or (5) an
        underwriter temporarily holding securities pursuant to an offering of such
        securities, or more than one person acting as a
        group, acquires ownership of securities
        of
        Parent or
        of the Company that, together with securities held by
        such person or group, constitutes more than
        50% of the
        shares of voting stock of Parent or of the Company
then outstanding (for
        the avoidance of
        doubt, the consummation of any merger, reorganization, business combination or
        consolidation of Parent or one of its Subsidiaries (including the Company)
        with
        or into any other entity, other than a merger, reorganization, business
        combination or consolidation which would result in the holders of the voting
        securities of Parent or the Company outstanding
        immediately
        prior thereto holding securities which represent immediately after such merger,
        reorganization, business combination or consolidation more than 50% of the
        combined voting power of the voting securities of Parent or the Company or the surviving
        company or the
        parent of such surviving company, may constitute
        a Change of Control under this Section
        11(b)(ii)(A));

       

      (B)                      
        the consummation of a sale or disposition by Parent or the Company of
        all or substantially
        all of Parent’s or the Company’s
assets that,
        immediately after such sale or
        disposition, results in Parent or the Company no longer owning more than
        80% of
        the total gross fair market value of the assets of Parent or the Company
        as
        applicable, but excluding any
        sale or disposition if the holders of the
        voting securities of Parent or
        the Company outstanding immediately prior
        thereto hold securities immediately thereafter which represent more than
        50% of
        the combined voting power of the voting securities of the acquiror, or parent
        of
        the acquiror, of such assets;

       

      (C)                      
        individuals who, as of the beginning of any twelve
        (12) month period,
constitute
        the Board of
        Directors of the Parent or the Company
        (each, an“Incumbent Board”) cease for any
        reason to constitute at least a majority of such Board within
        such twelve (12) month period; provided,
        however, that any individual becoming a director whose election to the Board of
        Directors of the Parent or the Company was approved
        by a vote
        of at least a majority of the directors then comprising the applicable
        Incumbent Board shall be considered as
        though such individual were a member of the Incumbent Board, but excluding,
        for
        this purpose, any such individual whose initial assumption of office occurs
        as a
        result of an election contest with respect to the election or removal of
        directors or other solicitation of proxies or consents by or on behalf of
        a
        person other than the Board of Directors of the
        Parent or the Company; provided further, that a change to the membership
        of the current Board of the Parent or
        the Company
        or any portion thereof as a result of or in connection with any consolidation,
        merger or other corporate restructuring of or between the Company and TS Corp (or the consolidation of the boards
        of
        directors of TS Corp and the Company as a
        result of such consolidation, merger or other corporate restructuring) shall
        not
        constitute a Change of Control for purposes of this Agreement.


      
        
          
          

        

        
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      (iii)           
        “Change
        of Control Position Modification” shall mean that, coincident with or within three (3) months after
        a Change of Control, Executive’s employment with the Company is terminated by the Company or its successor without
        Cause (as
        defined in Section
        5(d) above) or Executive terminates his employment with
        the Company or its successor with Good Reason (as
        defined in Section
        5(h) above). For
        the avoidance of
        doubt, no diminution of title, position, duties or responsibilities shall
        be
        deemed to occur solely because the Company has experienced a Change of Control
        or has been merged into or becomes a division, unit or subsidiary of another
        corporation or entity or because there has been a change in the reporting
        hierarchy incident thereto involving the Executive. A
        Change of Control Position Modification shall also be
        deemed to have occurred coincident with the Change of Control if the Executive’s
        employment with the Company had been terminated by the Company without Cause
        within the three- (3-) month period prior to the date on which the Change
        of
        Control occurred, and if it is reasonably demonstrated by the Executive to
        the
        Board that such termination of employment either was at the request of a
        third
        party who had taken steps reasonably calculated to effect the Change of Control
        or otherwise arose in connection with or in anticipation of the Change of
        Control.  Any determination by the Board in this regard shall be made
        in good faith taking into account all facts and circumstances surrounding
        the
        termination of employment.  In any event, a Change
        of Control Position
        Modification shall not be deemed to have occurred unless (a) the
        Executive shall have
        provided the Company with written notice of the Company’s alleged actions
        constituting a Change of Control Position Modification (which notice shall
        specify in reasonable detail the particulars of such actions) within
        thirty (30) days after the initial existence of
        any such alleged actions, and the Company has not cured any such alleged
        actions or substantially commenced its effort to cure such breach within
thirty (30)
        days of the Company’s receipt of such written notice,
        and (b) the termination occurs within six (6) months
        after the initial existence of any one of the conditions specified in this
        Section
        11(b)(3) upon which the termination is
        based.

      

        (iv)           
          “control”,
          “controlled
          by” and “under
          common control with”, as used with respect to any Person, means the
          possession, directly or indirectly, through one or more intermediaries
          or
          otherwise, of the power to direct or cause the direction of the management
          or
          policies of such Person, whether through the ownership of voting securities,
          contractually or in any other manner whatsoever.

        


        (v)           
          “Exchange
          Act” means the Securities Exchange Act of 1934, as amended from time
          to
          time.

      


      
        
          
          

        

        
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            14
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      (vi)            
        “Parent”
        means TS Corp (including
        its successor
        through any internal reorganization) or, in case TS Corp is not the ultimate parent of the
        Company, the entity that is the ultimate
        parent corporation of the Company.

      


      (vii)           
        “Person”
        means any individual, firm, corporation, limited liability company, partnership,
        sole proprietorship, trust or other legally cognizable entity.

      


      (viii)           “Subsidiary”
        with respect to any specified Person, means:

      


        
        (A)            any
        corporation, association or other business entity of which more than 50%
        of the
        total voting power of shares of capital stock entitled (without regard to
        the
        occurrence of any contingency and after giving effect to any voting agreement
        or
        stockholders’ agreement that effectively transfers voting power) to vote in the
        election of directors, managers or trustees of the corporation, association
        or
        other business entity is at the time owned or controlled, directly or
        indirectly, by that Person or one or more of the other Subsidiaries of that
        Person (or a combination thereof); and

      


        
        (B)            any
        partnership (1) the sole general partner or the managing general partner
        of
        which is such Person or a Subsidiary (as defined in clause (A))
        of such
        Person or (2) the only general partners of which are that Person or one or
        more
        Subsidiaries (as defined in clause (A))
        of that Person (or any combination
        thereof).

       

      (c)           
        In the event that Executive suffers a Change
        of
        Control Position Modification that results in his termination of employment
        prior to the date that the Change of Control occurs, then, provided that
        Executive shall have executed a release in form and substance acceptable
        to the
        Company, and subject to the other terms and conditions contained in this
        Agreement, the Executive shall receive such benefits to which he is entitled
        under Section
        5
of this Agreement absent the occurrence
        a
        Change of Control.  Notwithstanding the preceding sentence, within
        thirty (30) days after the effective date of the Change of Control, Executive
        shall cease receiving further severance pay payments under Section
        5and shall receive the balance of the
        benefits (without
        interest) to which he is entitled under Section
        11(a).  For the avoidance of doubt, the benefits
        provided under this Section
        11shall not be made in duplication of
        any benefits
        provided under Section
        5of this Agreement.

      

        12.          
          Excise Tax on Parachute Payments

        


        (a)           
          The Executive shall bear all expense of, and be solely responsible for,
          all
          federal, state, local or foreign taxes due with respect to any payment
          received
          hereunder, including, without limitation, any excise tax imposed by Section
          4999
          of the Code; provided, however, that
          any payment or
          benefit received or to be received by the Executive in connection with
          a Change
          of Control or the termination of the Executive’s employment (whether payable
          pursuant to the terms of this Agreement (“Contract
          Payments”)
          or any other plan, arrangements or agreement with the Company or any affiliate
          (collectively with the Contract Payments, the “Total
          Payments”))
          shall be reduced to the extent necessary so that no portion thereof shall
          be
          subject to the excise tax imposed by Section 4999 of the Code but only
          if, by
          reason of such reduction, the net after-tax benefit received by the Executive
          shall exceed the net after-tax benefit that would be received by the Executive
          if no such reduction was made.

      


      
        
          
          

        

        
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            15
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      (b)           
        For purposes of this Section 12, “net
        after-tax benefit” shall mean (i) the total of all payments and the value of all
        benefits which the Executive receives or is then entitled to receive from
        the
        Company that would constitute “excess parachute payments” within the meaning of
        Section 280G of the Code, less (ii) the amount of all federal, state and
        local
        income taxes payable with respect to the foregoing calculated at the maximum
        marginal income tax rate for each year in which the foregoing shall be paid
        to
        the Executive (based on the rate in effect for such year as set forth in
        the
        Code as in effect at the time of the first payment of the foregoing), less
        (iii)
        the amount of excise taxes imposed with respect to the payments and benefits
        described in (i) above by Section 4999 of the Code.

      


      (c)           
        The foregoing determination shall be made by a nationally recognized accounting
        firm (the “Accounting
        Firm”) selected by the Company and
        reasonably acceptable to the Executive (which may be, but will not be required
        to be, the Company’s independent auditors).  The Accounting Firm shall
        submit its determination and detailed supporting calculations to both the
        Executive and the Company within fifteen (15) days after receipt of a notice
        from either the Company or the Executive that the Executive may receive payments
        which may be “parachute payments.”  If
        the Accounting Firm determines
        that a reduction is required by this Section 12, the
        Executive, in the Executive’s discretion, may determine which of the Total
        Payments shall be reduced to the extent necessary so that no portion of the
        Total Payments shall be subject to the excise tax imposed by Section 4999
        of the
        Code, and the Company shall pay such reduced amount to the Executive; provided
        that, if the Executive does not make such determination within ten (10) business
        days after the receipt of the calculations made by the Accounting Firm, the
        Company shall elect which and how much of the Total Payments shall be eliminated
        or reduced consistent with the requirements of this Section 12 and shall
        notify the Executive promptly of such election.

      


      (d)           
        The Executive and the Company shall each provide the Accounting Firm access
        to
        and copies of any books, records, and documents in the possession of the
        Executive or the Company, as the case may be, reasonably requested by the
        Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
        with the preparation and issuance of the determinations and calculations
        contemplated by this Section
        12.  The fees and expenses of the Accounting
        Firm for its services in connection with the determinations and calculations
        contemplated by this Section 12 shall
        be
        borne by the Company.

       

      
        13.           Publicity.  Except
          as otherwise required by law, including but not limited to the disclosure
          obligations imposed on public companies under the federal and/or state
          securities laws, neither party shall issue, without consent of the other
          party,
          any press release or make any public announcement with respect to this
          Agreement
          or the employment relationship between them.  Following the date of
          this Agreement and regardless of any dispute that may arise in the future,
          the
          Executive and the Company jointly and mutually agree that they will not
          disparage, criticize or make statements that are negative, detrimental
          or
          injurious to the other to any individual, company or client, including
          within
          the Company.

      


      
        
          
          

        

        
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      14.           
        Non-disparagement.  The
        Executive shall not, while executive is employed by the Company or at any
        time
        thereafter, directly, or through any other personal entity, make any public
        or
        private statements that are disparaging of the Company, its business or its
        employees, officers, directors, or stockholders.  The Company agrees
        to refrain from any public statements after the Executive’s employment with the
        Company ceases that are disparaging to the Executive.  The Company’s
        obligations under this section extend only to then current officers and members
        of the board, and only for so long as those individuals are officers or
        directors of the Company.

      


      15.           
        Binding
        Agreement.  This Agreement shall be binding upon and inure to
        the benefit of the parties hereto, their heirs, personal representatives,
        successors and assigns.  In the event the Company is acquired, is a
        non surviving party in a merger, or transfers substantially all of its assets,
        this Agreement shall not be terminated and the transferee or surviving company
        shall be bound by the provisions of this Agreement.  The parties
        understand that the obligations of the Executive are personal and may not
        be
        assigned by him.

       

      16.           
        Entire
        Agreement.  This Agreement contains the entire understanding of
        the Executive and the Company with respect to employment of the Executive
        and
        supersedes the
        Predecessor Agreement and any and all
        prior
        understandings, written or oral, except for the Confidentiality Agreement,
        the
        Plans and agreements that have been executed or are to be executed in connection
        with any Award Shares or other equity interests awarded to the Executive
        during
        the course of his employment; provided, however,
        that any provisions of this Agreement with respect to the vesting of, lapse
        of
        restrictions upon, or exercise of Award Shares that are more favorable to
        the
        Executive than the provisions set forth in the applicable award agreements
        shall
        be controlling and shall be treated by the parties as an amendment of such
        award
        agreements.  This Agreement
        may not be amended, waived, discharged or terminated orally, but only by
        an
        instrument in writing, specifically identified as an amendment to this
        Agreement, and signed by all parties.  By entering into this
        Agreement, the Executive certifies and acknowledges that he has carefully
        read
        all of the provisions of this Agreement and that he voluntarily and knowingly
        enters into said Agreement.

       

      17.           
        Severability.  Any
        provision of this Agreement which is prohibited or unenforceable in any
        jurisdiction shall, as to such jurisdiction, be deemed severable from the
        remainder of this Agreement, and the remaining provisions contained in this
        Agreement shall be construed
        to preserve to the maximum permissible extent the intent and purposes of
        this
        Agreement.
         

        18.           
          Tax
          Consequences.  Company will have no obligation to any Person
          entitled to the benefits of this Agreement with respect to any tax obligation
          any such Person incurs as a result of or attributable to this Agreement,
          including all supplemental agreements and employee benefits plans incorporated
          by reference therein, or arising from any payments made or to be made under
          this
          Agreement or thereunder.

      


      
        
          
          

        

        
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      19.           
        Governing Law and Submission
        to
        Jurisdiction.  This Agreement shall be governed by, and
        construed and enforced in accordance with, the laws of the Commonwealth of
        Virginia, without giving effect to the principles of conflicts of law
        thereof.

       

      20.           
        Notices.  Any
        notice provided for in this Agreement shall be provided in
        writing.  Notices shall be effective from the date of service, if
        served personally on the party to whom notice is to be given, or on the second
        day after mailing, if mailed by first class mail, postage
        prepaid.  Notices shall be properly addressed to the parties at their
        respective addresses or to such other address as either party may later specify
        by notice to the other.

       

      21.           
        ARBITRATION.  The
        parties agree that, except as discussed in this Agreement, any controversy,
        claim or dispute arising out of or relating to this Agreement or
        the breach thereof,
        or arising out of or relating to the employment of the Executive, or the
        termination thereof, including any statutory or common law claims under federal,
        state, or local law, including all laws prohibiting discrimination in the
        workplace, shall be resolved by arbitration before a single arbitrator in
        Fairfax County, Virginia in accordance with the Employment Dispute Resolution
        Rules of the American Arbitration Association.  The parties agree that
        any award rendered by the arbitrator shall be final and binding, and that
        judgment upon the award may be entered in any court having jurisdiction
        thereof.  The parties further acknowledge and agree that, due to the
        nature of the confidential information, trade secrets, and intellectual property
        belonging to the Company and its affiliates
        to which the Executive has or will be given
        access, and the likelihood of significant harm that the Company and
        its affiliates would suffer in the event that
        such information was disclosed to third parties, nothing in this paragraph
        shall
        preclude the Company from going to court to seek injunctive relief to prevent
        the Executive from violating the obligations established in Sections 7 through
        9
        of this Agreement.
This
        agreement to arbitrate
        does not include claims that, by law, may not be subject to mandatory
        arbitration.

       

      22.           
        Indemnification.

       

       (a)           
        Corporate
        Acts.  In his/her capacity as a director, manager, officer, or
        employee of the Company or serving or having served any other entity as a
        director, manager, officer, or the Executive at the Company’s request, the
        Executive shall be indemnified and held harmless by the Company to the fullest
        extent allowed by law, the Company’s charter and by-laws, from and against any
        and all losses, claims, damages, liabilities, expenses (including legal fees
        and
        expenses), judgments, fines, settlements and other amounts arising from any
        and
        all claims, demands, actions, suits or proceedings, civil, criminal,
        administrative or investigative, in which the Executive may be involved,
        or
        threatened to be involved, as a party or otherwise by reason
        of
        the Executive’s status, which relate to or arise out of the Company, their
        assets, business or affairs, if in each of the foregoing cases, (i) the
        Executive acted in good faith and in a manner the Executive believed to be
        in,
        or not opposed to, the best interests of the Company, and, with respect to
        any
        criminal proceeding, had no reasonable cause to believe the Executive’s conduct
        was unlawful, and (ii) the Executive’s conduct did not constitute gross
        negligence or willful or wanton misconduct (and the Company shall also advance
        expenses as incurred to the fullest extent permitted under applicable law,
        provided the Executive provides an undertaking to repay advances if it is
        ultimately determined that Executive is not entitled to indemnification).
        The
        Company shall advance all expenses incurred by the Executive in connection
        with
        the investigation, defense, settlement or appeal of any civil or criminal
        action
        or proceeding referenced in this Section 22, including
        but not necessarily limited to legal counsel, expert witnesses or other
        litigation-related expenses.  The Executive shall be entitled to
        coverage under the Company’s directors and officers liability insurance policy
        in effect at any time in the future to no lesser extent than any other officers
        or directors of the Company.  After the Executive is no longer
        employed by the Company, the Company shall keep in effect the provisions
        of this
Section 22,
        which provision shall not be amended except as required by applicable law
        or
        except to make changes permitted by law that would enlarge the right of
        indemnification of the Executive.  Notwithstanding anything herein to
        the contrary, the provisions of this Section 22 shall
        survive the termination of this Agreement and the termination of the Employment
        Period for any reason.


      
        
          
          

        

        
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            18
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      (b)           
        Personal
        Guarantees.  The Company shall indemnify and hold harmless the
        Executive for any liability incurred by him/her by reason of his/her execution
        of any personal guarantee for the Company’s benefit (including but not limited
        to personal guarantees in connection with office or equipment leases, commercial
        loans or promissory notes).

       

      (c)           
        The indemnification provision of this Section 22 shall
        be
        in addition to any other liability the Company otherwise may have to the
        Executive to indemnify him for his conduct in connection with his efforts
        on the
        Company’s behalf.

       

      23. Section
        409A Safe
        Harbor.

       

      (a)           
        This Agreement is intended to comply with,
        or
        otherwise be exempt from, Section 409A of the Code.

       

      (b)           
        This Company shall undertake to administer,
        interpret, and construe this Agreement in a manner that does not result in
        the
        imposition on the Executive of any additional tax, penalty, or interest under
        Section 409A of the Code.

       

      (c)           
        If the Company determines in good faith that
        any
        provision of this Agreement would cause the Executive to incur an additional
        tax, penalty, or interest under Section 409A of the Code, theCompany and the Executive agree that
        they will execute
        any and all amendments to this Agreement permitted under applicable law as
        they mutually agree in good faith may be necessary to
        ensure compliance with the distribution provisions of Section 409A of the
        Code
        or as otherwise needed to ensure that this Agreement complies with Section
        409A.

       

      (d)           
        The preceding provisions, however, shall not
        be
        construed as a guarantee by the Company of any particular tax effect to the
        Executive under this Agreement.  The Company shall not be liable to
        the Executive for any payment made under this Agreement, at the direction
        or
        with the consent of the Executive, that is determined to result in an additional
        tax, penalty, or interest under Section 409A of the Code, nor for reporting
        in
        good faith any payment made under this Agreement as an amount includible
        in
        gross income under Section 409A of the Code.

       

      (e)           
        For purposes of Section 409A of the Code,
        the
        right to a series of installment payments under this Agreement shall be treated
        as a right to a series of separate payments.

      

        
          
            
            

          

          
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              19
              -

            
              

            

          

          
            
            

          

        

      

       

      (f)           
        With respect to any reimbursement of expenses
        of,
        or any provision of in-kind benefits to, the Executive, as specified under
        this
        Agreement, such reimbursement of expenses or provision of in-kind benefits
        shall
        be subject to the following conditions: (i) the expenses eligible for
        reimbursement or the amount of in-kind benefits provided in one taxable year
        shall not affect the expenses eligible for reimbursement or the amount of
        in-kind benefits provided in any other taxable year, except for any medical
        reimbursement arrangement providing for the reimbursement of expenses referred
        to in Section 105(b) of the Code; (ii) the reimbursement of an eligible expense
        shall be made no later than the end of the year after the year in which such
        expense was incurred; and (iii) the right to reimbursement or in-kind benefits
        shall not be subject to liquidation or exchange for another
        benefit.

       

      (g)           
        “Termination of employment,” or words of similar
        import, as used in this Agreement, means for purposes of Section 409A of
        the
        Code the date as of which the Company and the Executive reasonably anticipate
        that no further services will be performed by the Executive and shall be
        construed as the date that the Executive first incurs a “separation from
        service” for purposes of Section 409A of the Code.

       

      (h)           
        If a payment obligation under this Agreement
        arises on account of the Executive’s separation from service while the Executive
        is a “specified employee” (as defined under Section 409A of the Code and
        determined in good faith by the Compensation Committee), any payment of
“deferred compensation” (as defined under Treasury Regulation Section
        1.409A-1(b)(1), after giving effect to the exemptions in Treasury Regulation
        Sections 1.409A-1(b)(3) through (b)(12)) shall accrue without interest and
        shall
        be made within 15 days after the end of the six-month period beginning on
        the
        date of such separation from service or, if earlier, within 15 days after
        the
        appointment of the personal representative or executor of the Executive’s estate
        following his death.

       

      24.           Miscellaneous.

       

      (a)           
        No delay or omission by the Company in exercising any right under this Agreement
        shall operate as a waiver of that or any other right. A waiver or consent
        given
        by the Company on any one occasion shall be effective only in that instance
        and
        shall not be construed as a bar or waiver of any right on any other
        occasion.

       

      (b)           
        The captions of the sections of this Agreement are for convenience of reference
        only and in no way define, limit or affect the scope or substance of any
        section
        of this Agreement.


       

      (c)           
        The language in all parts of this Agreement will be construed, in all cases,
        according to its fair meaning, and not for or against either party hereto.
        The
        parties acknowledge that each party and its counsel have reviewed and revised
        this Agreement and that the normal rule of construction to the effect that
        any
        ambiguities are to be resolved against the drafting party will not be employed
        in the interpretation of this Agreement.

       

      (d)           
        The obligations of Company under this Agreement, including its obligation
        to pay
        the compensation provided for in this Agreement, are contingent upon the
        Executive’s performance of the Executive’s obligations under this
        Agreement.

       

       

      [Signature
        Page
        Follows]

       

      

        
          
            
            

          

          
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              20
              -

            
              

            

          

          
            
            

          

        

      

       

      IN
        WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
        be duly
        executed and delivered, by its authorized officers or individually, on the
        date
        first set forth above in the opening paragraph of this Agreement.

       

      
         

        
          
            	 	TerreStar
                    Networks
                    Inc.	 
	 	 	 	 
	 	 	 	 
	 	
                    By:
                      

                  	/s/	Robert
                    H. Brumley	 
	 	 	 	Robert
                    H. Brumley	 
	 	Its:	 	President
                    and CEO	 
	 	 	 	 	 
	 	 	 	 	 
	 	Dennis
                    Matheson	 
	 	 	 	 	 
	 	
                    By:
                      

                  	/s/	Dennis
                    Matheson	 
	 	 	 	Dennis
                    Matheson	 
	 	Executive