Document:

The following Form of Promissory  Note was executed by Rare  Telephony,  Inc. in
the  following  amounts  on the  following  dates  to  document  loans  from VDC
Communications, Inc. to Rare Telephony, Inc.:
<TABLE>
<CAPTION>

<S>                                        <C>
Date                                        Amount
----                                        ------

July 6, 2000                                $100,000

July 11, 2000                               $150,000

July 13, 2000                               $30,000

July 17, 2000                               $50,000

July 21, 2000                               $50,000

July 28, 2000                               $50,000

August 3, 2000                              $50,000

August 7, 2000                              $50,000

August 9, 2000                              $50,000

August 16, 2000                             $68,000

August 21, 2000                             $50,000

August 25, 2000                             $100,000

August 29, 2000                             $50,000

September 12, 2000                          $75,000
</TABLE>

                             FORM OF PROMISSORY NOTE
                             -----------------------

$
 ---------------                                                          , 2000
                                                           ----------------
                                                          Greenwich, Connecticut

FOR VALUE RECEIVED, the undersigned RARE TELEPHONY, INC., a Delaware corporation
(f/k/a Voice & Data Communications (Latin America), Inc.) ("Maker"), promises to
pay to the order of VDC Communications, Inc., a Delaware corporation ("Holder"),
which term shall  include any  subsequent  holder of this Note, at 75 Holly Hill
Lane,  Greenwich,  CT 06830 (or at such other place as Holder shall designate in
writing)  in  lawful  money of the  United  States  of  America,  the  aggregate

                                       1
<PAGE>

principal sum of       Thousand  Dollars ($     ), with interest  thereon at the
                -------                    -----
rate (the "Interest Rate") described below.

         1.   Interest Rate.  The Interest Rate shall be eight percent  (8%) per
              -------------
              annum.

         2.   Outstanding Principal Balance.  All references to the "Outstanding
              -----------------------------
              Principal  Balance" shall mean the amount of      Thousand Dollars
              ($        ), less any principal repaid.     ------
                --------

         3.   Payments.  This Note shall be payable in full on           ,  2001
              --------                                        -----------
              (the  "Maturity  Date")  when the  entire  Outstanding   Principal
              Balance,  and any accrued but unpaid  interest,  shall  be due and
              payable.

         4.   Application  of  Payments.  All  payments  on this Note  shall  be
              -------------------------
              applied first to the payment of accrued and unpaid  interest,  and
              then to the reduction of the Outstanding Principal Balance.

         5.   Prepayment  Right.  Maker  shall  have the right to prepay  at any
              -----------------
              time, in whole or in part, the Outstanding  Principal  Balance  of
              this Note, without premium or penalty.

         6.   Accelerated Maturity. Notwithstanding anything in this Note to the
              --------------------
              contrary  and  irrespective  of  the  Maturity  Date,  the  entire
              Outstanding  Principal  Balance and accrued  interest shall become
              immediately  due and  payable  upon the  earliest  to occur of the
              following (the "Accelerated  Maturity Date"):  (a) the sale of all
              or  substantially  all of the  assets of the  Maker or the  common
              stock of the Maker to a third  party;  or (b) the  issuance of the
              securities of Maker on the public market.

         7.   Modifications. From time to time, without affecting the obligation
              -------------
              of Maker to pay the Outstanding  Principal  Balance  or to observe
              the  covenants  of Maker  contained  herein,  and  without  giving
              notice to or obtaining  the consent of Maker,  Holder  may, at the
              option of Holder,  extend the time for payment of  the Outstanding
              Principal  Balance  or any  part  thereof,  reduce   the  payments
              hereunder,  release any person liable hereunder,  accept a renewal
              or extension of this Note, join in any extension or  subordination
              agreement,  release any security given  herefor,  take or  release
              security,  or agree in writing  with Maker to modify the  Interest
              Rate or any other provision of this Note.

         8.   Events  of  Default.  Time  is of the  essence  hereof.  Upon  the
              -------------------
              occurrence  of  any  of  the  following  events  (the  "Events  of
              Default"), payment of the entire Outstanding Principal Balance and
              accrued  interest of this Note shall, at the option of the Holder,
              be accelerated  and shall be immediately  due and payable  without
              notice or demand:

                                       2
<PAGE>

                  (a) Failure of Maker to pay the Outstanding  Principal Balance
                      and accrued interest in full on the Maturity  Date  or the
                      Accelerated Maturity Date; or
                  (b) All or the majority of the value of the assets of Maker is
                      seized or levied upon by writ of attachment,  garnishment,
                      execution  or  otherwise,  and such seizure or levy is not
                      released within thirty (30) calendar days thereafter; or
                  (c) Maker executes a general assignment for the benefit of its
                      creditors,  convenes any meeting of its creditors, becomes
                      insolvent,  admits in writings its insolvency or inability
                      to pay its debts,  or is unable to pay or is generally not
                      paying its debts as they become due; or
                  (d) A receiver,  trustee,  custodian  or agent is appointed to
                      take  possession  of all  or  any  substantial  portion of
                      Maker's assets; or
                  (e) Any case or proceeding is  voluntarily  commenced by Maker
                      under any provision of the federal  Bankruptcy Code or any
                      other   federal   or  state   law   relating   to   debtor
                      rehabilitation,  insolvency,  bankruptcy,  liquidation  or
                      reorganization,   or  any  such  case  or   proceeding  is
                      involuntarily  commenced  against  Maker and not dismissed
                      within thirty (30) calendar days thereafter; or
                  (f) Any representation made by Maker in this Note or in any of
                      the other  documents  delivered in  connection  therewith,
                      shall  have  been  untrue  or  incorrect  in any  material
                      respect when made.

         9.   Default Rate. In the event that Maker fails to pay the Outstanding
              ------------
              Principal Balance and all accrued interest in full on the Maturity
              Date  or the  Accelerated  Maturity  Date,  the  amount  past  due
              (including any acceleration of the Outstanding Principal Balance),
              and unpaid  shall  bear  interest  at an annual  rate equal to the
              lesser of (i) fifteen  percent  (15%),  or (ii) the maximum amount
              permitted by law (the "Default  Rate"),  computed from the date on
              which said amount was due and payable until paid.  The charging or
              collecting  of interest at the Default Rate shall not limit any of
              Holder's other rights or remedies under this Note.

         10.  Governing Law. Maker, and each endorser and cosigner of this Note,
              -------------
              acknowledges  and agrees that this Note is made and is intended to
              be  paid  and  performed  in the  State  of  Connecticut  and  the
              provisions hereof will be construed in accordance with the laws of
              the State of  Connecticut  and, to the extent that federal law may
              preempt the  applicability of state laws,  federal law. Maker, and
              each  endorser and  cosigner of this Note further  agree that upon
              the  occurrence of an Event of Default,  this Note may be enforced
              in  any  court  of   competent   jurisdiction   in  the  State  of
              Connecticut, and they do hereby submit to the jurisdiction of such
              courts regardless of their residence.

         11.  Remedies  Cumulative:  Waiver.  The remedies of Holder as provided
              -----------------------------
              herein  shall be  cumulative  and  concurrent,  and may be pursued
              singularly,  successively  or together,  in the sole discretion of
              Holder,  and may be exercised as often as occasion  therefor shall
              arise.  No act of  omission  or  commission  of Holder,  including

                                       3
<PAGE>

              specifically  any  failure  to  exercise  any  right,   remedy  or
              recourse,  shall be deemed to be a waiver or  release of the same;
              such  waiver or  release  to be  affected  only  through a written
              document   executed   by  Holder  and  then  only  to  the  extent
              specifically  recited therein.  Without limiting the generality of
              the preceding  sentence,  acceptance by Holder of any payment with
              knowledge of the  occurrence of an Event of Default by Maker shall
              not be deemed a waiver of such Event of Default, and acceptance by
              Holder of any  payment in an amount  less than the amount then due
              hereunder  shall be an acceptance on account only and shall not in
              any way affect the existence of an Event of Default  hereunder.  A
              waiver or release  with  reference  to any one event  shall not be
              construed  as  continuing,  as a bar to, or as a waiver or release
              of, any  subsequent  right,  remedy or recourse as to a subsequent
              event.

         12.  No Usury  Intended.  All  agreements  between Maker and Holder are
              ------------------
              expressly  limited so that in no contingency or event  whatsoever,
              whether by reason of: error of fact or law; payment, prepayment or
              advancement of the proceeds  hereof;  acceleration  of maturity of
              the Outstanding Principal Balance, or otherwise,  shall the amount
              paid  or  agreed  to  be  paid  to  Holder  hereof  for  the  use,
              forbearance  or retention  of the money to be advanced  hereunder,
              including  any charges  collected or made in  connection  with the
              indebtedness  evidenced  by this  Note  which  may be  treated  as
              interest under  applicable  law, if any,  exceed the maximum legal
              limit  (if any  such  limit is  applicable)  under  United  States
              federal law or state law (to the extent not  preempted  by federal
              law, if any), now or hereafter  governing the interest  payable in
              connection  with  such  agreements.  If,  from  any  circumstances
              whatsoever,  fulfillment  of any  provision  hereof  at  the  time
              performance  of  such   provision   shall  be  due  shall  involve
              transcending  the limit of  validity  (if any)  prescribed  by law
              which  a court  of  competent  jurisdiction  may  deem  applicable
              hereto,  then ipso facto,  the obligation to be fulfilled shall be
              reduced  to  the  limit  of  such   validity,   and  if  from  any
              circumstances,  Holder  shall ever  receive as  interest an amount
              which would  exceed the maximum  legal limit (if any such limit is
              applicable),  such amount which would be excessive  interest shall
              be applied to the reduction of the Outstanding  Principal  Balance
              due hereunder and not to the payment of interest or, if necessary,
              rebated  to  Maker.  This  provision  shall  control  every  other
              provision of all agreements between Maker and Holder.

         13.  Guaranty.  Not applicable.
              --------

         14.  Purpose of Loan.  Maker  certifies that the loan evidenced by this
              ---------------
              Note is obtained for business or commercial purposes and  that the
              proceeds  thereof   shall  not  be  used  for   personal,  family,
              household, or agricultural purposes.

         15.  Miscellaneous Provisions.
              ------------------------

              (a) Maker,  and each endorser and cosigner of this Note  expressly
                  grants to Holder  the right to  release or to agree not to sue
                  any other person, or to suspend the right to enforce this Note

                                       4
<PAGE>

                  against  such  other  person or to  otherwise  discharge  such
                  person;  and Maker, and each endorser and cosigner agrees that
                  the  exercise  of such rights by Holder will have no effect on
                  this  liability of any other person,  primarily or secondarily
                  liable  hereunder.  Maker,  and each  endorser and cosigner of
                  this Note  waives,  to the fullest  extent  permitted  by law,
                  demand for payment,  presentment for payment,  protest, notice
                  of protest, notice of dishonor,  notice of nonpayment,  notice
                  of acceleration of maturity, diligence in taking any action to
                  collect sums owing hereunder, any duty or obligation of Holder
                  to effect,  protect,  perfect,  retain or enforce any security
                  for  the  payment  of  this  Note or to  proceed  against  any
                  collateral before otherwise enforcing this Note, and the right
                  to plead as a defense to the  payment  hereof  any  statute of
                  limitations.

              (b) This Note and each payment of principal and interest hereunder
                  shall be paid when due without deduction or setoff of any kind
                  or nature whatsoever.

              (c) Maker  agrees to  reimburse  Holder for all costs,  including,
                  without limitation,  reasonable  attorneys' fees (including an
                  allocable  portion of  in-house  counsel  fees),  incurred  to
                  collect  this  Note  if  this  Note  is  not  paid  when  due,
                  including,  but not limited to,  attorneys' fees (including an
                  allocable  portion  of  in-house  counsel  fees)  incurred  in
                  connection  with any bankruptcy  proceedings  instituted by or
                  against Maker (including relief from stay litigation).

              (d) If any  provision  hereof is for any reason and to any extent,
                  invalid or  unenforceable,  then neither the  remainder of the
                  document  in  which  such  provision  is  contained,  nor  the
                  application  of the  provision to other  persons,  entities or
                  circumstances shall be affected thereby,  but instead shall be
                  enforceable to the maximum extent permitted by law.

              (e) This Note shall be a joint and  several  obligation  of Maker,
                  and of all endorsers and cosigners hereof and shall be binding
                  upon   them   and    their    respective    heirs,    personal
                  representatives, successors and assigns.

              (f) This Note may not be modified or amended orally, but only by a
                  modification  or  amendment  in  writing  signed by Holder and
                  Maker.

              (g) When the context and  construction so require,  all words used
                  in the  singular  herein  shall be deemed to have been used in
                  the plural and the  masculine  shall  include the feminine and
                  neuter and vice versa.  The word "person" as used herein shall
                  include   any   individual,    company,   firm,   association,
                  partnership,  corporation,  trust or other legal entity of any
                  kind whatsoever.

              (h) The headings of the  paragraphs  and sections of this Note are
                  for  convenience or reference only, are not to be considered a
                  part hereof and shall not limit or otherwise affect any of the
                  terms hereof.

                                       5
<PAGE>

              (i) In the event that at any time any  payment  received by Holder
                  hereunder  shall  be  deemed  by  final  order  of a court  of
                  competent  jurisdiction to have been a voidable  preference or
                  fraudulent  conveyance under the bankruptcy or insolvency laws
                  of the United States,  or shall  otherwise be deemed to be due
                  to any party other than Holder,  then, in any such event,  the
                  obligation to make such payment shall survive any cancellation
                  of this Note and/or  return  thereof to Maker and shall not be
                  discharged  or satisfied by any prior payment  thereof  and/or
                  cancellation  of this  Note,  but  shall  remain  a valid  and
                  binding  obligation  enforceable in accordance  with the terms
                  and  provisions  hereof,  and the amount of such payment shall
                  bear  interest at the Default Rate from the date of such final
                  order until repaid hereunder.

              (j) Maker  understands and agrees that Holder has no obligation to
                  loan additional  funds to Maker or its  subsidiaries  and that
                  any future loans made to Maker by Holder,  if any, shall be in
                  the sole discretion of Holder.

         IN WITNESS  WHEREOF Maker has executed this  Promissory  Note as of the
day and year first above written.

                                    "Maker"

                                    RARE  TELEPHONY,  INC. (f/k/a  Voice  & Data
                                    Communications  (Latin  America), Inc.)

                                    By:
                                       -----------------------------------------

                                    Its:
                                        ----------------------------------------

                                       6<PAGE>   1
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.

NO. W-2                                                   WARRANT TO PURCHASE
GRANT DATE:  DECEMBER 6, 1996                             SHARES OF COMMON STOCK

                              TELEDESIC CORPORATION

                        COMMON STOCK WARRANT CERTIFICATE

      For good and valuable consideration received, Teledesic Corporation, a
Delaware corporation (the "Company"), grants to __________ (the "Holder") the
right, subject to the terms of this Warrant, to purchase at any time and from
time to time during the period commencing December 6, 1996 and ending on the
Expiration Date, as defined below, at $1.6667(1) per share (the "Basic Exercise
Price"), up to 637,500(1) fully paid and nonassessable shares of Common Stock of
the Company. The Basic Exercise Price and the number of shares that may be
purchased are subject to adjustment under the terms of this Warrant.

1.    DEFINITIONS

      As used in this Warrant, unless the context otherwise requires:

      1.1 "Basic Exercise Price" means the price at which each Warrant Share may
be purchased upon exercise of this Warrant as stated in the first sentence of
this Warrant.

--------

(1)   As adjusted to reflect 3-for-1 stock split effected on January 22, 1997.

<PAGE>   2

      1.2 "Common Stock" means the Common Stock, $.001 par value, of the Company
existing on the Grant Date.

      1.3 "Exercise Date" means any date when this Warrant is exercised, in
whole or in part, in the manner indicated in Sections 2.1 and 2.2.

      1.4 "Exercise Price" means the Basic Exercise Price; provided, however,
that if an adjustment is required under Section 7 of this Warrant, then
"Exercise Price" means, after each such adjustment, the price at which each
Warrant Share may be purchased upon exercise of this Warrant immediately after
the last such adjustment.

      1.5 "Expiration Date" means 5:00 p.m., Seattle time, on December 5, 2016.

      1.6 "Grant Date" means the date this Warrant was first granted as stated
at the beginning of this Warrant.

      1.7 "Securities Act" means the Securities Act of 1933, as amended from
time to time, and all rules and regulations promulgated thereunder, or any act,
rules or regulations that replace the Securities Act or any such rules and
regulations.

      1.8 "Warrant" means this Common Stock Warrant and each subsequent Common
Stock Warrant, if any, for which this Warrant is exchanged.

      1.9 "Warrant Shares" means any shares of Common Stock or other securities
issued or subject to issuance upon exercise of this Warrant or upon exchange of
a Warrant Share for Warrant Shares of different denominations.

2.    DURATION AND EXERCISE OF WARRANT

      2.1 EXERCISE PERIOD

      Subject to the provisions of subparagraph 7.1(d) hereof, this Warrant may
be exercised at any time after the Grant Date and on or before the Expiration
Date. After the Expiration Date this Warrant shall become void, and all rights
to purchase Warrant Shares shall thereupon cease.

      2.2 METHOD OF EXERCISE

            (a) PROCEDURE FOR EXERCISE

      This Warrant may be exercised by the Holder, in whole or in part, by (i)
surrendering this Warrant to the Company, (ii) tendering to the Company payment
of the Exercise Price for the Warrant Shares for which exercise is made and
(iii) executing and delivering to the Company the attached Exercise Form. Upon

                                      -2-
<PAGE>   3
exercise, the Holder will be deemed to be the holder of record of the Warrant
Shares for which exercise is made, even though the transfer or registrar books
of the Company may then be closed or certificates representing such Warrant
Shares may not then be actually delivered to the Holder.

            (b) NET EXERCISE RIGHTS

      Notwithstanding the payment provisions set forth above, the Holder may
elect to receive Warrant Shares in an amount equal to the value (as determined
below) of this Warrant by surrender of this Warrant at the principal office of
the Company, together with notice of such election, in which case the Company
shall issue to the Holder the number of shares of Common Stock determined as
follows:

                        X = Y (A-B)
                            -------
                               A

Where:      X = the number of shares of Common Stock to be issued to the Holder
            Y = the number of Warrant Shares subject to this Warrant
            A = the Fair Market Value (as defined below) of one (1) Warrant
                Share
            B = the Exercise Price

      For purposes of the above calculation, the "Fair Market Value" of a
Warrant Share shall be determined in good faith by the Board of Directors of the
Company; provided, however, that if a public market for the Company's Common
Stock exists at the time of such exercise, then such Fair Market Value shall be
determined by the average of the closing bid and asked prices of the Company's
Common Stock as quoted in the Over-the-Counter Market Summary or the last
reported sale price of the Common Stock or the closing price quoted on the
Nasdaq National Market System or on any exchange on which such Common Stock is
then listed, whichever is applicable, for the five trading days prior to the
date of exercise of this Warrant. Notwithstanding the foregoing, in the event
this Warrant is exercised in connection with the Company's initial public
offering of Common Stock, the Fair Market Value per share shall be the per share
offering price to the public of the Company's initial public offering.

      2.3 CERTIFICATES

      Within a reasonable time but no more than 30 days after exercise,
certificates for such Warrant Shares shall be delivered to the Holder and,
unless this Warrant has expired, a Warrant representing the number of Warrant
Shares, if any, with respect to which this Warrant shall not have been
exercised, shall be issued to the Holder.

                                      -3-
<PAGE>   4
      2.4 SECURITIES ACT COMPLIANCE

      Unless the transfer of the Warrant Shares shall have been registered under
the Securities Act, as a condition of its delivery of the certificates for the
Warrant Shares, the Company may require the Holder (including the transferee of
the Warrant Shares in whose name the Warrant Shares are to be registered) to
deliver to the Company, in writing, representations regarding the purchaser's
sophistication, investment intent, acquisition for his or her own account and
such other matters as are reasonable and customary for purchasers of securities
in an unregistered private offering and the Company may place conspicuously upon
each certificate representing the Warrant Shares a legend substantially in the
following form, the terms of which are agreed to by the Holder (including such
transferee):

         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.

      2.5 TAXES

      The Company covenants and agrees that it will pay when due and payable any
and all taxes that may be payable in connection with the issuance of this
Warrant, or the issuance of any Warrant Shares upon the exercise of this
Warrant. The Company shall not, however, be required to pay any tax that may be
payable in respect of any subsequent transfer of this Warrant or of the Warrant
Shares.

3.    VALIDITY AND RESERVATION OF WARRANT SHARES

      The Company covenants that this Warrant and all shares of Common Stock
issued upon exercise of this Warrant will be validly issued, fully paid and
nonassessable. The Company agrees that as long as this Warrant may be exercised,
the Company will have authorized and reserved for issuance upon exercise of this
Warrant a sufficient number of Warrant Shares to provide for exercise in full.

                                      -4-
<PAGE>   5
4.    FRACTIONAL SHARES

      No fractional Warrant Share shall be issued upon the exercise of this
Warrant. With respect to any fraction of a Warrant Share otherwise issuable upon
any such exercise, the Company shall pay to the Holder an amount in cash equal
to such fraction multiplied by the Exercise Price.

5.    LIMITED RIGHTS OF THE WARRANT HOLDER

      The Holder shall not, solely by virtue of being the Holder of this
Warrant, have any of the rights of a holder of Common Stock of the Company,
either at law or in equity, until such Warrant shall have been exercised and the
Holder shall be deemed to be the holder of record of Warrant Shares as provided
in this Warrant, at which time the person or persons in whose name or names the
certificate or certificates for Warrant Shares being purchased are to be issued
shall be deemed the holder or holders of record of such shares for all purposes.

6.    EXCHANGE OR LOSS OF WARRANT

      6.1 EXCHANGE

      This Warrant is exchangeable, without expense to the Holder and upon
surrender hereof to the Company, for Warrants of different denominations
entitling the Holder to purchase Warrant Shares equal in total number and
identical in type to the Warrant Shares covered by this Warrant.

      6.2 LOSS, THEFT, DESTRUCTION OR MUTILATION

      Upon receipt by the Company of satisfactory evidence of the loss, theft,
destruction or mutilation of this Warrant and either (in the case of loss, theft
or destruction) reasonable indemnification or (in the case of mutilation) the
surrender of this Warrant for cancellation, the Company will execute and deliver
to the Holder, without charge, a new Warrant of like denomination. Any such new
Warrant executed and delivered shall constitute an additional obligation of the
Company, whether or not this Warrant, reportedly lost, stolen, destroyed or
mutilated, shall be at any time presented by anyone to the Company for exercise.

                                      -5-
<PAGE>   6
7.    ADJUSTMENT OF EXERCISE PRICE

      7.1 GENERAL

      If any of the following events shall occur at any time or from time to
time prior to the exercise in full or expiration of this Warrant, the following
adjustments shall be made in the Exercise Price, with the exceptions hereinafter
provided:

            (a) RECAPITALIZATION

      In case the Company effects a subdivision, combination, reclassification
or other recapitalization of its outstanding shares of Common Stock into a
greater or lesser number of shares of Common Stock, the Exercise Price in effect
immediately after such subdivision, combination, reclassification or other
recapitalization shall be proportionately decreased or increased, as the case
may be.

            (b) STOCK DIVIDENDS

      If the Company shall declare a dividend on its Common Stock payable in
stock or other securities of the Company or of any other corporation to the
holders of its Common Stock, the Holder shall, without additional cost, be
entitled to receive upon the exercise of this Warrant, in addition to the
Warrant Shares to which such Holder is otherwise entitled upon such exercise,
the number of shares of stock, or other securities that such Holder would have
been entitled to receive if such Holder had been a holder, on the record date
for such dividend, of the number of shares of Common Stock so purchased under
this Warrant.

            (c) MERGER OR CONSOLIDATION - NO CHANGE IN CONTROL

      In case of any merger, consolidation or reorganization of the Company with
or into one or more corporations that results in holders of the Company's voting
equity securities immediately prior to such event together owning a majority
interest of the voting equity securities of the surviving corporation
immediately following such event, the Holder, upon the exercise of this Warrant
after the record date for determination of stockholders entitled thereto, shall
receive, in lieu of or in addition to any shares of Common Stock of the Company,
the proportionate share of all stock, or other securities (appropriately
adjusted for any subsequent events of the issuer of such stock or securities
that are of the kind that would cause adjustment of the Exercise Price
hereunder) or other property issued, paid or delivered for or on all of the
Common Stock of the Company as would have been allocable to the Warrant Shares
so purchased under this Warrant had this Warrant been exercised immediately
prior to said record date.

                                      -6-
<PAGE>   7
            (d) MERGER OR CONSOLIDATION - CHANGE IN CONTROL

      In case of any merger, consolidation or reorganization of the Company with
or into one or more other corporations, that results in the holders of the
Company's voting equity securities immediately prior to such event owning
together less than a majority interest of the voting securities of the surviving
corporation immediately following such event, or in case of any sale, lease,
transfer or conveyance to another corporation of all or substantially all the
assets of the Company or proposed liquidation of the Company, then in any such
event the Holder shall be given notice of such proposed action at approximately
the same time and in substantially the same manner as the holders of the
Company's Common Stock. The Holder may attend the meeting of the Company's
shareholders at which such action is considered and voted upon. If the proposed
action is approved according to applicable law by the shareholders of all
corporations or other entities that are parties to the proposed action, the
Holder shall be so notified in writing by the Company by registered or certified
mail at least 10 business days before the effectiveness thereof. Notwithstanding
the period of exercisability stated on the face of this Warrant, this Warrant
shall become forever null and void to the extent not exercised on or before 5:00
p.m., Pacific time, on the tenth business day following the delivery of such
notice.

            (e) MINIMUM ADJUSTMENT NOT REQUIRED

      Anything in this Section 7.1 to the contrary notwithstanding, the Company
shall not be required, except as hereinafter provided, to make any adjustment of
the Exercise Price in any case in which the amount by which such Exercise Price
would be increased or reduced, in accordance with the foregoing provisions,
would be less than $.001, but in such a case, any adjustment that would
otherwise be required to be made will be carried forward and made at the time
and together with the next subsequent adjustment that, together with any and all
such adjustments so carried forward, shall amount to not less than $.001;
provided, however, that adjustments in the Exercise Price shall be required and
made in accordance with the provisions of this Section 7.1 (other than this
subparagraph) not later than such time as may be required in order to preserve
the tax-free nature of any distribution (within the meaning of Section 305 of
the United States Internal Revenue Code of 1986) to the Holder or the holders of
Common Stock. In the event of any subdivision, combination, reclassification or
other recapitalization of shares of Common Stock, said amount (as theretofore
decreased or increased) shall be proportionately decreased or increased.

      7.2 NUMBER OF WARRANT SHARES ADJUSTED

      After any adjustment of the Exercise Price pursuant to Section 7.1, the
number of Warrant Shares issuable at the new Exercise Price shall be adjusted to
the number

                                      -7-
<PAGE>   8
obtained by (i) multiplying the number of Warrant Shares issuable upon exercise
of this Warrant immediately before such adjustment by the Exercise Price in
effect immediately before such adjustment and (ii) dividing the product so
obtained by the new Exercise Price.

      7.3 NOTICE OF ADJUSTMENT

      Whenever events occur requiring the Exercise Price to be adjusted, the
Company shall promptly file with its Secretary or an Assistant Secretary at its
principal office and with its stock transfer agent, if any, a certificate of its
chief financial officer showing the adjusted Exercise Price, setting forth in
reasonable detail the acts requiring such adjustment, and stating such other
facts as shall be necessary to show the manner and figures used to compute such
adjustment. Such chief financial officer's certificate shall be made available
at all reasonable times for inspection by the Holder. Promptly after each such
adjustment, the Company shall mail a copy of such certificate by certified mail
to the Holder. The Company shall endorse on any Warrant executed and delivered
by the Company a description of each adjustment, if any, under this Section as
the result of events occurring before the execution and delivery of the Warrant.

      If, within 45 days of the mailing of such certificate, the Holder notifies
the Company in writing of his or her disagreement with the adjusted Exercise
Price contained in the Company certificate, then the Company will promptly
obtain a certificate of a firm of independent certified public accountants of
recognized standing selected by the Company's Board of Directors (who may be the
regular auditors of the Company) covering the same items required by the Company
certificate. The Company will promptly mail a copy of the accountants'
certificate to the Holder of this Warrant. The certificate of the firm of
independent public accountants will be conclusive evidence of the correctness of
the computations with respect to any adjustment of the Exercise Price.

8.    REGISTRATION RIGHTS

      The Warrant Shares issuable upon exercise of this Warrant shall be
entitled to the registration rights set forth in that certain Investors' Rights
Agreement dated as of March 16, 1994, as amended on November 16, 1994, December
15, 1995, May 13, 1996 and November 15, 1996, between the Company and the
parties listed on the signature pages thereto, and the holder hereof and the
Company hereby agree to be bound by all the provisions of such Agreement which
relate to registration rights, including, without limitation, the provisions of
Section 1 thereof, as if the holder hereof was a "Holder" of "Registrable
Securities" as those terms are defined in such Agreement.

                                      -8-
<PAGE>   9
9.    NOTICES TO HOLDER

      So long as this Warrant is outstanding, whenever the Company shall expect
to (i) pay any dividend or distribution upon the Common Stock, (ii) effect any
recapitalization, merger, consolidation, reorganization, transfer, sale, lease
or conveyance as referred to in Section 7, or (iii) be involved in any voluntary
or involuntary dissolution, liquidation or winding up of the Company, at least
10 days before the proposed action or any applicable record date, the Company
shall give the Holder written notice describing the proposed action and stating
the date on which (x) a record date is to be fixed for the purpose of such
dividend, distribution or right or (y) such recapitalization, merger,
consolidation, reorganization, transfer, sale, lease, conveyance, dissolution,
liquidation or winding up is to take place and when, if any date is to be fixed,
the record holders of Common Stock shall be entitled to exchange their shares of
Common Stock for securities or other property deliverable upon such
recapitalization, merger, consolidation, reorganization, transfer, sale, lease,
conveyance, dissolution, liquidation or winding up.

10.   MISCELLANEOUS

      10.1 SUCCESSORS AND ASSIGNS

      All the covenants and provisions of this Warrant that are by or for the
benefit of the Company or of the Holder shall bind and inure to the benefit of
their respective successors and assigns hereunder.

      10.2  NOTICE

      Notice or demand pursuant to this Warrant to be given or made by the
Holder to or on the Company shall be sufficiently given or made if sent by
registered or certified mail, postage prepaid, addressed, until another address
is designated in writing by the Company, as follows:

                  Teledesic Corporation
                  2300 Carillon Point
                  Kirkland, Washington  98033

      Any notice or demand authorized by this Warrant to be given or made by the
Company to or on the Holder shall be given to the Holder by registered or
certified mail, postage prepaid, addressed at his or her last known address as
it shall appear on the books of the Company, until another address is designated
in writing.

                                      -9-
<PAGE>   10
      10.3 APPLICABLE LAW

      The validity, interpretation and performance of this Warrant shall be
governed by the laws of the State of Washington.

      10.4 HEADINGS

      The Section headings herein are for convenience only and are not part of
this Warrant and shall not affect the interpretation thereof.

      10.5 AMENDMENT

      The terms of this Warrant may be amended only with the written consent of
the Company and the Holder of this Warrant.

                                       TELEDESIC CORPORATION

Dated: December 6, 1996                By
                                           -------------------------------------
                                           W. Russell Daggatt, President

                                      -10-
<PAGE>   11
                                  EXERCISE FORM

            (To be executed by the Warrant Holder in connection with
                the exercise of the Warrant in whole or in part)

TO:   TELEDESIC CORPORATION

The undersigned (______________________________________________________________)
                             Please insert Social Security or other
                                  identifying number of Holder

hereby irrevocably elects to exercise the right of purchase represented by the
within Warrant for, and to purchase thereunder, ___________ shares of Common
Stock provided for therein and

      [ ] tenders payment herewith to the order of Teledesic Corporation in the
      amount of $_____________.

      [ ] tenders the foregoing Warrant for cancellation to the extent necessary
      to effect payment therefor in accordance with the net exercise provisions
      of Section 2.2 of the Warrant.

The undersigned requests that certificates for such shares of Common Stock be
issued as follows:

Name: __________________________________________________________________________
Address: _______________________________________________________________________
Deliver to: ____________________________________________________________________
Address: _______________________________________________________________________

and, if said number of shares of Common Stock shall not be all the shares of
Common Stock purchasable hereunder, that a new Warrant for the balance remaining
of the Shares of Common Stock purchasable under the within Warrant be registered
in the name of, and delivered to, the undersigned at the address stated below.

Address: _______________________________________________________________________
Dated: _______________, 19___  Signature _______________________________________

                           Note: Signature must correspond with the name as
                           written upon the face of this Warrant in every
                           particular, without alteration or enlargement or any
                           change whatever.

                                      -11-

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