RESTRICTED STOCK UNIT GRANT NOTICE

This Restricted Stock Unit Grant Notice (this “Grant Notice”) is executed and
delivered this 30th day of December 2005 (the “Effective Date”), by HyperSpace
Communications, Inc., a Colorado corporation (the “Company”) to Adam Lerner
(“Grantee”).

R E C I T A L S

A.            The Company and Grantee entered into two Restricted Stock Unit
Agreements dated July 25, 2005 under which Grantee was issued 167,260 restricted
stock units (the “Existing Restricted Stock Units”) under the HyperSpace
Communications, Inc. 2004 Equity Incentive Plan (the “Plan”).

B.             On December 1, 2005, the Company issued its Offer to Exchange
Restricted Stock Units (the “Exchange Offer”) under which the Company offered to
exchange the Existing Restricted Stock Units for an equal number of new
restricted stock units (the “Replacement Restricted Stock Units).

C.             In response to the Exchange Offer, Grantee has provided the
Company with an election to as amend and restate 167,260 Existing Restricted
Stock Units into an equal number Replacement Restricted Stock Units. It is
intended that the securities granted to Grantee hereunder be subject to the
Plan.

D.             The board of directors of the Company (the “Board”) has
authorized the granting of the Replacement Restricted Stock Units under the Plan
to Grantee, pursuant to the terms set forth in the Exchange Offer and this Grant
Notice.

E.             Capitalized terms used but not otherwise defined herein shall
have the meanings given to such terms in the Plan.

GRANT

 

1.              Grant. The Company hereby grants to Grantee 167,260 Replacement
Restricted Stock Units (the “Granted Units”), which are convertible into shares
of Common Stock of the Company (the “Shares”), on the terms and subject to the
conditions of this Grant Notice and the Plan.

2.

Vesting of Granted Units.

(a)              Vesting Schedule. 153,322 of the Granted Units are vested as of
the date hereof. The remaining Granted Units will vest on July 25, 2006, subject
to the forfeiture provisions of Section 2(b) below.

Any Granted Unit which is vested or shall vest in accordance with this Section
2(a) shall be a “Vested Unit.”

(b)              The Granted Units have or shall vest as set forth in Section
2(a) provided that, with respect to Granted Units that are not vested as of the
date hereof, Grantee is employed by the Company, any of its subsidiaries or any
business unit thereof or any successor thereto on the vesting date (i.e. July
25, 2006) ; provided, however, that in the event (i) Grantee’s employment is
terminated by the Company or any of its subsidiaries without Good Cause (as
defined below), (ii) by Grantee by reason of retirement, so long as Grantee is
65 years or older, or (iii) is terminated due to Grantee’s death or Disability
(as defined below), the Granted Units shall continue to vest as if Grantee were
still employed by the Company. Accordingly, subject to the foregoing, in the
event that Grantee’s status as an employee with the Company, any of its
subsidiaries or any business unit thereof ceases for whatever reason (other than
as described in clauses (i)-(iii) in the preceding sentence), any Granted Units
which, as of the date of such

 

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termination are not Vested Units, shall be deemed canceled and forfeited.
Notwithstanding the foregoing, the Board, in its sole discretion, may determine
that any Granted Units held by Grantee which, as of the date of termination are
not Vested Units, shall be vested upon Grantee’s cessation of employment with
the Company, any of its subsidiaries or any business unit thereof. (c) For
purposes of Section 2(b),

(i)     “Disability” shall mean permanent and total disability within the
meaning of Section 22(e)(3) of the Code.

 

(ii)    “Good Cause” shall mean with respect to the termination of Grantee’s
employment by or other relationship with the Company, the occurrence of any one
or more of the following events as determined by the Board in its sole
discretion: (i) Grantee’s conviction of, or the entry of a pleading of guilty or
nolo contendere by Grantee to, a felony or crime involving moral turpitude, (ii)
Grantee’s material failure to perform Grantee’s duties required under Grantee’s
employment by or other relationship to the Company (it being agreed that failure
of the Company to achieve operating results or similar poor performance of the
Company shall not, in and of itself, be deemed a failure to perform Grantee’s
duties), material failure to comply with the Company’s standard policies and
procedures generally applicable to persons in Grantee’s relation to the Company,
or failure to comply with any provision of any agreement with respect to
Grantee’s services, (iii) a willful act by Grantee as a result of which Grantee
receives an improper personal benefit at the expense of the Company, (iv) an act
of fraud or dishonesty committed by Grantee against the Company, or (v) any
other misconduct by Grantee that is materially injurious to the business or
reputation of the Company. For purposes of this definition, the term “Company”
shall include any particular subsidiary, business unit or division of the
Company with respect to which Grantee performs Grantee’s duties and any
successor to any such subsidiary, business unit or division.

 

3.

Conversion of Vested Units; Issuance of Stock Certificates.

(a)               Vested Units shall automatically be converted into Shares on a
one-for-one basis (subject to any adjustments required by Section 5 hereof) on
the following schedule: (i) 50% on February 15, 2007, and (i) 50% on May 15,
2007; provided, however, that Vested Units will immediately convert to Shares
upon the occurrence of a Company Transaction.

(b)               Upon conversion of any Vested Units into Shares, the Company
shall issue in the name of Grantee duly executed certificates evidencing such
Shares, which certificates shall be endorsed with the legends set forth in
Section 4(b) below.

4.

Investment Intent; Legends.

(a)               None of the Granted Units or Shares or any beneficial interest
therein shall be sold, transferred, assigned, pledged, encumbered or otherwise
disposed of in any way (including, without limitation, by operation of law)
unless and until (i) such Granted Units or Shares or such beneficial interest,
as the case may be, proposed to be sold, transferred, assigned, pledged,
encumbered or otherwise disposed of are registered pursuant to an effective
registration statement filed with the Securities and Exchange Commission
pursuant to the Act or (ii) if required by the Company, the Company shall have
received an opinion, in form and substance satisfactory to the Company, from the
Company’s legal counsel to the effect that the sale, transfer, assignment,
pledge, encumbrance or other disposition of such Granted Units or Shares or such
beneficial interest, as the case may be, does not require registration under the
Act or any applicable state securities laws.

(b)               If at the time of issuance of the Shares (i) the Shares are
not registered pursuant to an effective registration statement filed with the
Securities and Exchange Commission pursuant to the Act or (ii) Grantee cannot
provide the Company with an opinion, in form and substance satisfactory to the
Company, from the Company’s legal counsel to the effect that the Shares do not
require registration under the Act or any applicable state securities laws, each
certificate or certificates representing the Shares shall have endorsed upon
them a legend substantially as follows:

 

 

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“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED EXCEPT IN COMPLIANCE WITH SUCH ACT AND ALL APPLICABLE
STATE SECURITIES LAWS.”

 

(c)               Grantee understands and agrees that neither the Company nor
any agent of the Company shall be under any obligation to recognize any transfer
of any of the Granted Units or Shares if, in the opinion of counsel for the
Company, such transfer would result in violation by the Company of any federal
or state law with respect to the offering, issuance or sale of securities.

 

5.        Adjustments. Pursuant to Section 12 of the Plan, the number or kind of
shares issuable upon conversion of Vested Units (as provided for in Section 2
hereof) is subject to adjustment in the event of certain stock splits, stock
dividends, recapitalizations, reorganizations or similar capital adjustments and
in connection with certain mergers, consolidations and asset sales.

6.        Compliance With Securities Law. Grantee agrees to cooperate with the
Company in taking any and all action which may be deemed necessary or desirable
to ensure such compliance including, without limitation, the entering into such
written representations, warranties and agreements as the Company may reasonably
request.

7.

Tax Consequences.

(a)               Issue, Transfer Taxes and Other Expenses. The Company shall
pay any and all original issue and stock transfer taxes that may be imposed on
the issuance of the Granted Units or the Shares, together with any and all other
fees and expenses necessarily incurred by the Company in connection therewith.

(b)               Withholding Taxes. It is understood by the parties hereto that
the issuance of the Shares to Grantee may be deemed compensatory in purpose and
in effect and that, as a result, Grantee may be obligated to advance to the
Company amounts sufficient to pay withholding taxes in respect of such Shares at
the time Grantee becomes subject to Federal and state income taxation with
respect to the receipt of such Shares. In the event that such withholding tax
obligations arise, the parties hereby agree that the Company shall have no
obligation to pay such withholding taxes, that payment of such withholding taxes
shall be the exclusive obligation of Grantee and that the Company shall be
entitled to withhold amounts from other sources of compensation otherwise due to
Grantee by the Company for purposes of satisfying such withholding taxes if and
to the extent that such withholding taxes have not been otherwise paid or
satisfied by Grantee in accordance with Section 10 of the Plan. Grantee agrees
on his behalf, and on behalf of his successors and assigns, to indemnify the
Company with respect to any withholding tax payment that the Company is required
to make that arises from the issuance and/or sale of any of the Granted Units or
Shares to Grantee.

8.        Relationship to Plan. The Granted Units are subject to and shall be
governed by the terms of the Plan, the terms and provisions of which are hereby
incorporated by reference; provided, however, that the definitions “Cause,”
“Disability” and “Good Reason” contained in Section 2 of the Plan and Sections
13.1-13.3 and Section 14 of the Plan shall be inapplicable to the Granted Units
and this Grant Notice. Subject to the foregoing, in the event of a conflict
between any provision of this Grant Notice and the Plan, the terms of the Plan
shall control. Grantee agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board (or any committee of the Board to
which administration of the Plan may be delegated) upon any questions arising
under the Plan.

9.        Rights as a Stockholder. Neither Grantee nor any legal representative,
heir or legatee of Grantee shall have any rights as a stockholder with respect
to any Units or any Shares until the date of the issuance of a stock certificate
to Grantee or such representative, heir or legatee for such Shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 12.1 through 12.6 of the Plan.

 

 

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10.      No Rights to Existing Status. Nothing contained in this Grant Notice or
in the Plan shall confer on Grantee any right to continue his or her existing
status as a an employee of the Company or any of its subsidiaries or shall limit
the ability of the Company or any of its subsidiaries to terminate, with or
without cause, in its sole discretion, Grantee’s status as an employee of the
Company or such subsidiary.

11.      Notices. Any notice under this Grant Notice shall be in writing and
shall be deemed to have been duly given (i) on the date of personal service,
(ii) on the third business day after mailing, if the document is mailed by
registered mail, (iii) one day after being sent by professional or overnight
courier or messenger service guaranteeing one-day delivery, with receipt
confirmed by the courier, or (iv) on the date of transmission if sent by
facsimile or other means of electronic transmission, with receipt confirmed. Any
such notice shall be delivered or addressed (x) to Grantee at the address set
forth below or at the most recent address specified by Grantee through written
notice under this provision and (y) to the Company at the Company’s principal
executive office. Failure to conform to the requirements of this Section shall
not defeat the effectiveness of notice actually received by the addressee.

12.      Further Assurances. The parties agree to execute such further
instruments and to take such further action as may reasonably be necessary to
carry out the intent of this Grant Notice.

13.      Amendment. This Grant Notice may only be amended by both the written
Grant Notice of the Company and Grantee; provided, however, that this Grant
Notice may be amended by the Company without the consent of Grantee solely to
the extent necessary to comply with regulations issued by the Internal Revenue
Service relating to Code Section 409A.

14.      Successors and Assigns. Except as otherwise expressly provided herein,
the terms of this Grant Notice shall be binding upon and shall inure to the
benefit of the heirs, successors and assigns of the parties and their heirs,
successors and assigns.

15.      Severability. In the event any one or more of the provisions of this
Grant Notice should be held invalid, illegal or unenforceable in any respect in
any jurisdiction, such provision or provisions shall be automatically deemed
amended, but only to the extent necessary to render such provision or provisions
valid, legal and enforceable in such jurisdiction, and the validity, legality
and enforceability of the remaining provisions of this Grant Notice shall not in
any way be affected or impaired thereby.

16.      Entire Agreement. This Grant Notice, together with the Plan constitute
the entire agreement between the parties hereto with respect to the subject
matter of this Grant Notice and supersede all prior agreements, understandings
and discussions, whether written or oral, with respect thereto.

17.      Governing Law. This Grant Notice shall be construed in accordance with
and governed by the laws of the State of Colorado.

18.      Counterparts. This Grant Notice may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

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The Company executed this Restricted Stock Unit Grant Notice as of the day and
year first above written.

“THE COMPANY”

HYPERSPACE COMMUNICATIONS, INC.

By:         /s/ John P Yeros

Title:      Chief Executive Officer

 

 

 

Grantee Contact Information

 

Name: Adam Lerner

 

Address: 762 RIVER PARK LN

BOISE, ID 83706

 

 

 

 

 

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