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STOCK PURCHASE AGREEMENT
REVISED 9/29/99
TELEDESIC CORPORATION
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made as of
__________, ____, by and between Teledesic Corporation, a Delaware corporation
(the "Corporation"), and __________________________________, a resident of
_______________, the holder of a stock option ("Optionee") under the
Corporation's [ ] Restated 1994 Stock Option/Stock Issuance Plan (the "Plan")
[ ] 1996 Restated California Stock Option/Stock Issuance Plan (the "Plan").
All capitalized terms in this Agreement shall have the meaning assigned
to them in this Agreement, the attached Appendix A or the Plan.
A. EXERCISE OF OPTION
1. EXERCISE
Optionee hereby purchases ____________ shares of Common Stock as set
forth below (the "Purchased Shares") pursuant to the option(s) (the "Option")
granted to Optionee on the date(s) set forth below under the Plan at the
exercise price(s) set forth below (the "Exercise Price"):
# of Shares in # of
Grant Date Total Option Grant ISO/NSO Purchased Shares Exercise Price
---------- ------------------ ------- ---------------- --------------
_______________ ________________ ISO [ ] NSO [ ] ________________ _____________
_______________ ________________ ISO [ ] NSO [ ] ________________ _____________
_______________ ________________ ISO [ ] NSO [ ] ________________ _____________
_______________ ________________ ISO [ ] NSO [ ] ________________ _____________
_______________ ________________ ISO [ ] NSO [ ] ________________ _____________
2. PAYMENT
Concurrently with the delivery of this Agreement to the Corporate
Secretary, Optionee shall pay the Exercise Price for the Purchased Shares in
accordance with the provisions of the Option Agreement and shall deliver
whatever additional documents may be required by the Option Agreement as a
condition for exercise with respect to the Purchased Shares.
3. STOCKHOLDER RIGHTS
Until such time as the Corporation actually exercises its First Refusal
Right (as defined in Section D.1 hereof) under this Agreement, Optionee (or any
successor in interest) shall have all the rights of a stockholder (including
voting, dividend and liquidation rights) with respect to the Purchased Shares,
subject, however, to the transfer restrictions of Section C hereof.
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B. SECURITIES LAW COMPLIANCE
1. EXEMPTION FROM REGISTRATION/RESTRICTED SECURITIES
Optionee hereby represents and warrants as follows:
(a) Optionee is aware that the Purchased Shares have not been registered
under the Securities Act or any state securities laws, pursuant to
exemption(s) from registration. Optionee understands that the
reliance by the Corporation on such exemption(s) is predicated in
part upon the truth and accuracy of the statements by Optionee in
this Agreement;
(b) Optionee understands that because the Purchased Shares have not been
registered under the Securities Act, Optionee must continue to bear
the economic risk of the investment for an indefinite time. Optionee
further understands that the Purchased Shares cannot be sold unless
the Purchased Shares are subsequently registered or an exemption
from registration is available and that Rule 144 of the SEC issued
under the Securities Act is not presently available to exempt the
resale of the Purchased Shares from the registration requirements of
the Securities Act;
(c) Optionee has been furnished with the Plan, the Plan Summary,
Additional Information Regarding Risk Factors, Financial Statements
of the Corporation, and all other information that Optionee deems
necessary to evaluate the merits and risks of the purchase of the
Purchased Shares;
(d) Optionee has had the opportunity to ask questions and receive
answers concerning the information received about the Purchased
Shares and the Corporation and has been given the opportunity to
obtain any additional information the Optionee deems necessary to
verify the accuracy of any information obtained concerning the
Purchased Shares and the Corporation. Optionee understands that such
discussions, as well as any written information issued by the
Corporation, were intended to describe the aspects of the
Corporation's business and prospects which the Company believes to
be material, but were not necessarily a thorough or exhaustive
description;
(e) Optionee hereby represents and warrants that Optionee is purchasing
the Purchased Shares for Optionee's own account for investment and
not with a view to the sale or distribution of all or any part
thereof, and no one other than the Optionee has any beneficial
interest in the Purchased Shares.
2. DISPOSITION OF SHARES
Optionee hereby agrees that Optionee shall make no disposition of the
Purchased Shares (other than a permitted transfer under Section C.1 hereof)
unless and until there is compliance with all of the following requirements:
(a) Optionee shall have provided the Corporation with a written
summary of the terms and conditions of the proposed disposition.
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(b) Optionee shall have complied with all requirements of this
Agreement applicable to the disposition of the Purchased Shares.
(c) Optionee shall have provided the Corporation with written
assurances, in form and substance satisfactory to the Corporation, that
(i) the proposed disposition does not require registration of the
Purchased Shares under the Securities Act or (ii) all appropriate action
necessary for compliance with the registration requirements of the
Securities Act or of any exemption from registration available under the
Securities Act (including Rule 144) has been taken.
The Corporation shall not be required to (i) transfer on its books any
Purchased Shares that have been sold or transferred in violation of the
provisions of this Agreement or (ii) treat as the owner of the Purchased Shares,
or otherwise accord voting, dividend or liquidation rights to, any transferee to
whom the Purchased Shares have been transferred in contravention of this
Agreement.
3. RESTRICTIVE LEGENDS
The stock certificates for the Purchased Shares shall be endorsed with
restrictive legends, including one or more of the following legends:
(a) "The securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or
applicable state law, and no interest therein may be sold, distributed,
assigned, offered, pledged or otherwise transferred unless (i) there is
an effective registration statement under the Act and applicable state
securities laws covering any such transaction involving said securities,
(ii) this corporation receives an opinion of legal counsel for the
holder of these securities satisfactory to this corporation stating that
such transaction is exempt from registration or (iii) this corporation
otherwise satisfies itself that such transaction is exempt from
registration.
(b) "The shares represented by this certificate may not be sold,
assigned, transferred, encumbered, or in any manner disposed of except
in conformity with the terms of a written agreement dated ________, 19__
between the Corporation and the registered holder of the shares (or the
predecessor in interest to the shares). Such agreement grants certain
rights of first refusal to the Corporation (or its assignees) upon the
sale, assignment, transfer, encumbrance or other disposition of the
shares. A copy of such agreement is maintained at the Corporation's
principal corporate offices."
C. TRANSFER RESTRICTIONS
1. RESTRICTION ON TRANSFER
Purchased Shares shall not be transferred, assigned, encumbered or
otherwise made the subject of disposition in contravention of the First Refusal
Right under Section D hereof or the market standoff provisions of Section C.3
hereof. Such restrictions on transfer, however, shall not apply to (a) a
gratuitous transfer of the Purchased Shares, provided, and only if, Optionee
obtains the Corporation's prior written consent to such transfer, (b) a transfer
of title to the
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Purchased Shares effected pursuant to Optionee's will or the laws of intestate
succession, or (c) a transfer to the Corporation in pledge as security for any
purchase-money indebtedness incurred by Optionee in connection with the
acquisition of the Purchased Shares.
2. TRANSFEREE OBLIGATIONS
Each person (other than the Corporation) to whom the Purchased Shares
are transferred by means of one of the permitted transfers specified in Section
C.1 hereof must, as a condition precedent to the validity of such transfer,
acknowledge in writing to the Corporation that such person is bound by the
provisions of this Agreement and that the transferred shares are subject to (a)
the First Refusal Right granted hereunder and (b) the market standoff provisions
of Section C.3 hereof, to the same extent such shares would be so subject if
retained by Optionee.
3. MARKET STANDOFF
(a) In connection with any underwritten public offering by the
Corporation of its equity securities pursuant to an effective registration
statement filed under the Securities Act, including the Corporation's initial
public offering, Owner shall not sell, make any short sale of, loan,
hypothecate, pledge, grant any option for the purchase of, or otherwise dispose
or transfer for value or otherwise agree to engage in any of the foregoing
transactions with respect to, any Purchased Shares without the prior written
consent of the Corporation or its underwriters. Such limitations shall be in
effect for such period of time from and after the effective date of the final
prospectus for the offering as may be requested by the Corporation or such
underwriters; provided, however, that in no event shall such period exceed one
hundred eighty (180) days. The limitations of this Section C.3 shall in all
events terminate two (2) years after the effective date of the Corporation's
initial public offering.
(b) Owner shall be subject to the market standoff provisions of
this Section C.3, provided, and only if and to the same extent, that the
officers and directors of the Corporation are also subject to similar
arrangements.
(c) In the event of any stock split, stock dividend,
recapitalization, combination of shares, exchange of shares or other change
affecting the Corporation's outstanding Common Stock effected as a class without
the Corporation's receipt of consideration, then any new, substituted or
additional securities distributed with respect to the Purchased Shares shall be
immediately subject to the provisions of this Section C.3 to the same extent the
Purchased Shares are at such time covered by such provisions.
(d) In order to enforce the limitations of this Section C.3, the
Corporation may impose stop-transfer instructions with respect to the Purchased
Shares until the end of the applicable standoff period.
D. RIGHT OF FIRST REFUSAL
1. GRANT
The Corporation is hereby granted the right of first refusal (the "First
Refusal Right"), exercisable in connection with any proposed transfer of the
Purchased Shares. For purposes of
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this Section D, the term "transfer" shall include any sale, assignment, pledge,
encumbrance or other disposition of the Purchased Shares intended to be made by
Owner, but shall not include any of the permitted transfers under Section C.1
hereof.
2. NOTICE OF INTENDED DISPOSITION
In the event any Owner of the Purchased Shares desires to accept a bona
fide third-party offer for the transfer of any or all of such shares (the
Purchased Shares subject to such offer to be hereinafter called the "Target
Shares"), Owner shall promptly (a) deliver to the Corporate Secretary written
notice (the "Disposition Notice") of the terms and conditions of the offer,
including the purchase price and the identity of the third-party offeror, and
(b) provide satisfactory proof that the disposition of the Target Shares to such
third-party offeror would not be in contravention of the provisions set forth in
Sections B and C hereof.
3. EXERCISE OF RIGHT
The Corporation (or its assignees) shall, for a period of twenty-five
(25) days following receipt of the Disposition Notice, have the right to
repurchase any or all of the Target Shares subject to the Disposition Notice
upon the same terms and conditions as those specified therein or upon such other
terms and conditions (not materially different from those specified in the
Disposition Notice) to which Owner consents. Such right shall be exercisable by
delivery of written notice (the "Exercise Notice") to Owner prior to the
expiration of the twenty-five (25) day exercise period. If such right is
exercised with respect to all the Target Shares, then the Corporation (or its
assignees) shall effect the repurchase of such shares, including payment of the
purchase price, not more than five (5) business days after delivery of the
Exercise Notice, at which time Owner shall deliver to the Corporation the
certificates representing the Target Shares to be repurchased, each certificate
to be properly endorsed for transfer.
Should the purchase price specified in the Disposition Notice be payable
in property other than cash or evidences of indebtedness, the Corporation (or
its assignees) shall have the right to pay the purchase price in the form of
cash equal in amount to the value of such property. If Owner and the Corporation
(or its assignees) cannot agree on such cash value within ten (10) days after
the Corporation's receipt of the Disposition Notice, the valuation shall be made
by an appraiser of recognized standing selected by Owner and the Corporation (or
its assignees) or, if they cannot agree on an appraiser within twenty (20) days
after the Corporation's receipt of the Disposition Notice, each shall select an
appraiser of recognized standing and the two (2) appraisers shall designate a
third appraiser of recognized standing, whose appraisal shall determine such
value. The cost of such appraisal shall be shared equally by Owner and the
Corporation. The closing shall then be held on the later of (a) the fifth
business day following delivery of the Exercise Notice and (b) the fifth
business day after such cash valuation shall have been made.
4. NONEXERCISE OF RIGHT
In the event the Exercise Notice is not given to Owner within
twenty-five (25) days following the date of the Corporation's receipt of the
Disposition Notice, Owner shall have a period of thirty (30) days thereafter in
which to sell or otherwise dispose of the Target Shares to the third-party
offeror identified in the Disposition Notice upon terms and conditions
(including
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the purchase price) no more favorable to such third-party offeror than those
specified in the Disposition Notice; provided, however, that any such sale or
disposition must not be effected in contravention of the provisions of Section B
hereof. The third-party offeror shall acquire the Target Shares free and clear
of the First Refusal Right hereunder, but the acquired shares shall remain
subject to (a) the securities law restrictions of Section B.1 hereof and (b) the
market stand-off provisions of Section C.3. In the event Owner does not effect
such sale or disposition of the Target Shares within the specified thirty (30)
day period, the First Refusal Right shall continue to be applicable to any
subsequent disposition of the Target Shares by Owner until such right lapses in
accordance with Section D.7 hereof.
5. PARTIAL EXERCISE OF RIGHT
In the event the Corporation (or its assignees) makes a timely exercise
of the First Refusal Right with respect to a portion, but not all, of the Target
Shares specified in the Disposition Notice, Owner shall have the option,
exercisable by written notice to the Corporation delivered within five (5) days
after Owner's receipt of the Exercise Notice, to effect the sale of the Target
Shares pursuant to either of the following alternatives:
(a) sale or other disposition of all the Target Shares to the
third-party offeror identified in the Disposition Notice, but in full
compliance with the requirements of Section D.4 hereof, as if the
Corporation did not exercise the First Refusal Right hereunder; or
(b) sale to the Corporation (or its assignees) of the portion of
the Target Shares that the Corporation (or its assignees) has elected to
purchase, such sale to be effected in substantial conformity with the
provisions of Section D.3 hereof.
Failure of Owner to deliver timely notification to the Corporation under
this Section D.5 shall be deemed to be an election by Owner to sell the Target
Shares pursuant to alternative (a) above.
6. RECAPITALIZATION/REORGANIZATION
(a) In the event any stock split, stock dividend, spinoff,
recapitalization, combination of shares, exchange of shares or other transaction
affecting the outstanding Common Stock as a class is effected without the
Corporation's receipt of consideration, any new, substituted or additional
securities or other property that is by reason of such transaction distributed
with respect to the Purchased Shares shall be immediately subject to the First
Refusal Right hereunder, but only to the extent the Purchased Shares are at the
time covered by such right.
(b) In the event of a Reorganization, the First Refusal Right
shall remain in full force and effect and shall apply to the new capital stock
or other property received in exchange for the Purchased Shares in consummation
of the Reorganization, but only to the extent the Purchased Shares are at the
time covered by such right.
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7. LAPSE
The First Refusal Right under this Section D shall lapse and cease to
have effect upon the earliest to occur of (a) the first date on which shares of
the Common Stock are held of record by more than five hundred (500) persons, (b)
a determination is made by the Board that a public market exists for the
outstanding shares of Common Stock, and (c) a firm commitment underwritten
public offering, pursuant to an effective registration statement under the
Securities Act, covering the offer and sale of the Common Stock in the aggregate
amount of at least ten million dollars ($10,000,000). The market standoff
provisions of Section C.3 hereof shall, however, continue to remain in full
force and effect following the lapse of the First Refusal Right hereunder.
E. GENERAL PROVISIONS
1. ASSIGNMENT
The Corporation may assign its First Refusal Right to any person or
entity selected by the Board, including, without limitation, one or more
stockholders of the Corporation.
2. NO EMPLOYMENT OR SERVICE CONTRACT
Nothing in this Agreement or in the Plan shall confer upon Optionee any
right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation (or any
Parent or Subsidiary) or Optionee, which rights are hereby expressly reserved by
each, to terminate Optionee's Service at any time for any reason whatsoever,
with or without cause.
3. NOTICES
Any notice required in connection with (a) the First Refusal Right or
(b) the disposition of any Purchased Shares covered thereby shall be given in
writing and shall be deemed effective upon personal delivery or upon deposit in
the U.S. mail, registered or certified, postage prepaid and addressed to the
party entitled to such notice at the address indicated below such party's
signature line on this Agreement or at such other address as such party may
designate by ten (10) days' advance written notice under this Section E.3 to all
other parties to this Agreement.
4. NO WAIVER
The failure of the Corporation (or its assignees) in any instance to
exercise the First Refusal Right shall not constitute a waiver of any other
rights of first refusal that may subsequently arise under the provisions of this
Agreement or any other agreement between the Corporation and Optionee. No waiver
of any breach or condition of this Agreement shall be deemed to be a waiver of
any other or subsequent breach or condition, whether of like or different
nature.
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5. CANCELLATION OF SHARES
If the Corporation (or its assignees) shall make available, at the time
and place and in the amount and form provided in this Agreement, the
consideration for the Purchased Shares to be repurchased in accordance with the
provisions of this Agreement, then, from and after such time, the person from
whom such shares are to be repurchased shall no longer have any rights as a
holder of such shares (other than the right to receive payment of such
consideration in accordance with this Agreement). Such shares shall be deemed
purchased in accordance with the applicable provisions hereof, and the
Corporation (or its assignees) shall be deemed the owner and holder of such
shares, whether or not the certificates therefor have been delivered as required
by this Agreement.
F. MISCELLANEOUS PROVISIONS
1. OPTIONEE UNDERTAKING
Optionee hereby agrees to take whatever additional action and execute
whatever additional documents the Corporation may deem necessary or advisable in
order to carry out or effect one or more of the obligations or restrictions
imposed on either Optionee or the Purchased Shares pursuant to the express
provisions of this Agreement.
2. AGREEMENT IS ENTIRE CONTRACT
This Agreement constitutes the entire contract between the parties
hereto with regard to the subject matter hereof. This Agreement is made pursuant
to the provisions of the Plan and shall in all respects be construed in
conformity with the express terms and provisions of the Plan.
3. SUCCESSORS AND ASSIGNS
The provisions of this Agreement shall inure to the benefit of, and be
binding upon, the Corporation and its successors and assigns and Optionee and
Optionee's legal representatives, heirs, legatees, distributees, assigns and
transferees by operation of law, whether or not any such person shall have
become a party to this Agreement and agreed in writing to join herein and be
bound by the terms and conditions hereof.
4. GOVERNING LAW
The parties submit to the exclusive jurisdiction and venue of the
federal or state courts of Washington, County of King, to resolve issues that
may arise out of or relate to this Agreement and the Plan or the same subject
matter. This Agreement and the Plan shall be governed by the laws of the State
of Washington, excluding any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Agreement and the
Plan to the substantive law of another jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and year first indicated above.
TELEDESIC CORPORATION
By:
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Title:
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OPTIONEE:
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Name:
--------------------------------
Address:
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Social Security/Taxpayer
I.D. Number
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APPENDIX
DEFINITIONS
A. BOARD shall mean the Corporation's Board of Directors.
B. COMMON STOCK shall mean the Corporation's Class A Common Stock.
C. EXCHANGE ACT shall mean the Securities Exchange Act of 1934, as
amended.
D. OPTION AGREEMENT shall mean the agreement or agreements between the
Corporation and Optionee evidencing the Option.
E. OWNER shall mean Optionee and all subsequent holders of the Purchased
Shares who derive their chain of ownership through a permitted transfer from
Optionee in accordance with Section C.1 of this Agreement.
F. PARENT shall mean any corporation (other than the Corporation) in an
unbroken chain of corporations ending with the Corporation, provided each
corporation in the unbroken chain (other than the Corporation) owns, at the time
of the determination, stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
G. REORGANIZATION shall mean any of the following transactions:
(i) a merger or consolidation in which the Corporation is not
the surviving entity,
(ii) a sale, transfer or other disposition of all or
substantially all of the Corporation's assets,
(iii) a reverse merger in which the Corporation is the surviving
entity but in which the Corporation's outstanding voting securities are
transferred in whole or in part to a person or persons other than those
who held such securities immediately prior to the merger, or
(iv) any transaction effected primarily to change the state in
which the Corporation is incorporated or to create a holding company
structure.
H. SEC shall mean the Securities and Exchange Commission.
I. SECURITIES ACT shall mean the Securities Act of 1933, as amended.
J. SERVICE shall mean the provision of services to the Corporation or
any Parent or Subsidiary by an individual in the capacity of an employee,
subject to the control and direction of the employer entity as to both the work
to be performed and the manner and method of performance, a nonemployee member
of the Board or a consultant or independent contractor.
K. SUBSIDIARY shall mean each corporation (other than the Corporation)
in an unbroken chain of corporations beginning with the Corporation, provided
each such corporations in the unbroken chain (other than the last corporation)
owns, at the time of the determination, stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.