Document:

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                                                                    EXHIBIT 10.1

                                 iSKY.NET, INC.
                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

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                                TABLE OF CONTENTS

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                                                                                                              PAGE(S)
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<S>               <C>                                                                                          <C>
SECTION 1.        GENERAL........................................................................................2
         1.1.     DEFINITIONS....................................................................................2

SECTION 2.        REGISTRATION; RESTRICTIONS ON TRANSFER.........................................................4
         2.1.     RESTRICTIONS ON TRANSFER.......................................................................4
         2.2.     DEMAND REGISTRATION............................................................................5
         2.3.     PIGGYBACK REGISTRATIONS........................................................................6
         2.4.     FORM S-3 REGISTRATION..........................................................................7
         2.5.     EXPENSES OF REGISTRATION.......................................................................8
         2.6.     OBLIGATIONS OF THE COMPANY.....................................................................9
         2.7.     TERMINATION OF REGISTRATION RIGHTS............................................................10
         2.8.     DELAY OF REGISTRATION; FURNISHING INFORMATION.................................................10
         2.9.     INDEMNIFICATION...............................................................................11
         2.10.    ASSIGNMENT OF REGISTRATION RIGHTS.............................................................13
         2.11.    LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS..................................................13
         2.12.    "MARKET STAND-OFF" AGREEMENT..................................................................13
         2.13.    RULE 144 REPORTING............................................................................14

SECTION 3.        COVENANTS OF THE COMPANY......................................................................14
         3.1.     BASIC FINANCIAL INFORMATION AND REPORTING.....................................................14
         3.2.     MATERIAL CHANGES AND LITIGATION...............................................................15
         3.3.     INSPECTION RIGHTS.............................................................................15
         3.4.     CONFIDENTIALITY OF RECORDS....................................................................15
         3.5.     RESERVATION OF COMMON STOCK...................................................................16
         3.6.     TERMINATION OF COVENANTS......................................................................16

SECTION 4.        RIGHT OF FIRST OFFER..........................................................................16
         4.1.     SUBSEQUENT OFFERINGS..........................................................................16
         4.2.     EXERCISE OF RIGHTS............................................................................17
         4.3.     ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS................................................17
         4.4.     TERMINATION OF RIGHT OF FIRST OFFER...........................................................17
         4.5.     TRANSFER OF RIGHT OF FIRST OFFER..............................................................17
         4.6.     EXCLUDED SECURITIES...........................................................................17

SECTION 5.        CONFIDENTIAL INFORMATION......................................................................18
         5.1.     PROTECTION OF CONFIDENTIAL INFORMATION........................................................18
         5.2.     DISCLOSURE OF TERMS...........................................................................19

SECTION 6.        MISCELLANEOUS.................................................................................19
         6.1.     GOVERNING LAW.................................................................................19
         6.2.     SURVIVAL......................................................................................19
         6.3.     SUCCESSORS AND ASSIGNS........................................................................19
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         <S>      <C>                                                                                          <C>
         6.4.     SEVERABILITY..................................................................................19
         6.5.     AMENDMENT AND WAIVER..........................................................................19
         6.6.     DELAYS OR OMISSIONS...........................................................................20
         6.7.     NOTICES.......................................................................................20
         6.8.     ATTORNEYS' FEES...............................................................................20
         6.9.     ENTIRE AGREEMENT; TERMINATION OF STOCK RIGHTS AGREEMENT AND TRW AGREEMENT.....................20
         6.10.    TITLES AND SUBTITLES..........................................................................20
         6.11.    COUNTERPARTS..................................................................................20
</TABLE>

EXHIBITS

Exhibit A   --   Schedule of Investors

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                                 iSKY.NET, INC.
                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

         THIS AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT (this "AGREEMENT")
is entered into as of the 19th day of October, 1999, by and among iSky.net,
Inc., a Delaware corporation (the "COMPANY"), and the investors listed on
EXHIBIT A hereto, each of which is referred to herein individually as an
"INVESTOR" and all of which are referred to herein collectively as the
"INVESTORS."

         Reference is hereby made to (1) that certain Investor Rights Agreement,
dated as of May 26, 1999, by and among the Company and the other parties
signatory thereto (the "INVESTOR RIGHTS AGREEMENT") and (2) that certain
Securities Purchase Agreement, dated as of October 19, 1999, by and among the
Company and the Purchasers (as defined therein) signatory thereto (the
"SECURITIES PURCHASE AGREEMENT"). Capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Securities Purchase Agreement.

         This Agreement shall be dated as of, and shall become effective on, the
date of the Second Closing as defined in the Securities Purchase Agreement (the
"EFFECTIVE DATE"). Prior to the Effective Date, the Investor Rights Agreement
shall remain in full force and effect. From and after the Effective Date, (1)
this Agreement shall supercede and replace the Investor Rights Agreement in its
entirety and (2) the Investor Rights Agreement shall no longer be of any force
and/or effect.

         Notwithstanding anything herein to the contrary, if Liberty KASTR
Corp., a Purchaser, timely delivers a Notice Not to Close to the Company, then
Liberty shall cease to be an Investor for all purposes hereunder retroactive to
the date of the First Closing as if Liberty had never executed and delivered
this Agreement at the First Closing.

                                    RECITALS

         WHEREAS, at the First Closing the Purchasers will make certain loans to
the Company (the "LOANS"); and

          WHEREAS, at the Second Closing, (a) the entire amount of the Loan held
by each Purchaser (other than Purchasers who have timely delivered Notices Not
to Close to the Company) shall be converted into the Preferred Shares set forth
opposite each Purchaser's name on Schedule II to the Securities Purchase
Agreement and (b) the Company shall sell and issue to the Purchasers (other than
Purchasers who have timely delivered Notices Not to Close to the Company), and
the Purchasers (other than Purchasers who have timely delivered Notices Not to
Close to the Company) shall purchase from the Company, the Additional Preferred
Shares set forth opposite each Purchaser's name on Schedule II to the Securities
Purchase Agreement, all on the terms and subject to the conditions set forth in
the Securities Purchase Agreement; and

         WHEREAS, the First Closing is occurring on the date this Agreement is
executed; and

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         WHEREAS, the Second Closing is scheduled to occur as set forth in
Section 4.2 of the Securities Purchase Agreement; and

         WHEREAS, it is a condition to the Purchasers' and the Company's
obligations at the First Closing that the parties hereto execute and deliver
this Agreement at the First Closing; provided, however that this Agreement shall
not be dated and become effective unless and until the Second Closing occurs;
and

         WHEREAS, in order to induce the Company and the Purchasers to enter
into the Securities Purchase Agreement and to consummate the transactions
contemplated therein, the Investors and the Company wish to amend and restate
the Investor Rights Agreement in its entirety to include the Purchasers as
parties hereto and so that this Agreement shall govern the rights of all the
Investors with respect to all matters previously governed by the Investor Rights
Agreement, including, but not limited to, the registration of the Company's
Common Stock ("COMMON STOCK") issuable upon conversion of the Shares (as defined
below) held by the Investors and certain other matters as set forth herein.

         NOW, THEREFORE, in consideration of the mutual promises,
representations, warranties, covenants and conditions set forth in this
Agreement and in the Securities Purchase Agreement, the Investors and the
Company hereby agree that the Investor Rights Agreement shall be amended and
restated in its entirety by this Agreement, and the parties hereto further agree
as follows:

SECTION 1.    GENERAL

         1.1. DEFINITIONS. As used in this Agreement the following terms shall
have the following respective meanings:

         "AFFILIATE" of a Holder means an entity which is controlled by,
controls or is under common control with such Holder. "CONTROL" shall be
presumed to exist where an entity holds the direct or indirect control of
thirty-five percent (35%) or more of the voting rights in such entity.

         "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

         "FORM S-3" means such form under the Securities Act as in effect on the
date hereof or any successor registration form under the Securities Act
subsequently adopted by the SEC which permits inclusion or incorporation of
substantial information by reference to other documents filed by the Company
with the SEC.

         "HOLDER" means any person that is a party to this Agreement and that
owns of record Shares or Registrable Securities that have not been sold to the
public or any assignee of record of such Registrable Securities in accordance
with Section 2.10 hereof.

         "INITIAL OFFERING" means the Company's first firm commitment
underwritten public offering of its Common Stock registered under the Securities
Act, the public offering price of which was not less than $15,000,000.00 in the
aggregate (prior to underwriters' discounts and

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expenses), with a price per share of at least $4.00 (subject to appropriate
adjustments for stock splits, stock dividends, combinations or other
recapitalizations).

         "MAJOR INVESTOR" means each Investor who holds at least three million
(3,000,000) shares (as adjusted) of Series A Preferred Stock, at least one
hundred sixty-seven thousand one hundred twenty-five (167,125) shares (as
adjusted) of Series B Preferred Stock, or at least one million (1,000,000)
shares (as adjusted) of Series C Preferred Stock.

         "PURCHASER" means each of the Purchasers signatory to the Securities
Purchase Agreement.

         "REGISTER," "REGISTERED," AND "REGISTRATION" refer to a registration
effected by preparing and filing a registration statement in compliance with the
Securities Act, and the declaration or ordering of effectiveness of such
registration statement or document.

         "REGISTRABLE SECURITIES" means (i) Common Stock issued or issuable upon
conversion of the Shares; and (ii) any Common Stock issued as (or issuable upon
the conversion or exercise of any warrant, right or other security which is
issued as) a dividend or other distribution with respect to, or in exchange for
or in replacement of, such above-described securities. Notwithstanding the
foregoing, Registrable Securities shall not include any securities sold by a
person to the public either pursuant to a registration statement or Rule 144 or
sold in a private transaction in which the transferor's rights under Section 2
of this Agreement are not assigned.

         "REGISTRABLE SECURITIES THEN OUTSTANDING" shall be the number of shares
determined by calculating the total number of shares of Common Stock that are
Registrable Securities and either (1) are then issued and outstanding or (2) are
issuable pursuant to then exercisable or convertible securities.

         "REGISTRATION EXPENSES" shall mean all expenses incurred by the Company
in complying with Sections 2.2, 2.3 and 2.4 hereof, including, without
limitation, all registration and filing fees, printing expenses, fees and
disbursements of counsel for the Company, blue sky fees and expenses and the
expense of any special audits incident to or required by any such registration
(but excluding (i) the compensation of regular employees of the Company which
shall be paid in any event by the Company, (ii) underwriting discounts relating
to the Registrable Securities and (iii) commissions relating to the Registrable
Securities), as well as the reasonable fees and disbursements of a single
special counsel for the Holders.

         "RULE 144" shall mean Rule 144 promulgated by the SEC pursuant to the
Securities Act, as it may be amended from time to time, or any successor rule or
regulation.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SELLING EXPENSES" shall mean all underwriting discounts and selling
commissions applicable to the sale.

         "SERIES A PREFERRED STOCK" shall mean the Company's Series A Preferred
Stock.

         "SERIES B PREFERRED STOCK" shall mean the Company's Series B Preferred
Stock.

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         "SERIES C PREFERRED STOCK" shall mean the Company's Series C Preferred
Stock.

         "SHARES" shall mean all of the Series A Preferred Stock, Series B
Preferred Stock, and Series C Preferred Stock owned by any Holder.

         "SEC" OR "COMMISSION" means the Securities and Exchange Commission.

SECTION 2.REGISTRATION; RESTRICTIONS ON TRANSFER

         2.1. RESTRICTIONS ON TRANSFER.

              (a) Each Holder agrees not to make any disposition of all or any
portion of the Shares or Registrable Securities unless and until:

                  (i) There is then in effect a registration statement under the
Securities Act covering such proposed disposition and such disposition is made
in accordance with such registration statement; or

                  (ii) (A) The transferee has agreed in writing to be bound by
the terms of this Agreement, (B) such Holder shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (C) if
reasonably requested by the Company, such Holder shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration of such shares under the
Securities Act; provided, however, that it is agreed that the Company will not
require opinions of counsel for transactions made pursuant to Rule 144 except in
unusual circumstances.

              (b) In addition to the requirements of paragraph (a) above, prior
to any disposition of all or any portion of the Shares or Registrable
Securities, the Company shall have received any consents or approvals of the
Federal Communications Commission as, in the reasonable opinion of special
regulatory counsel to the Company, may be necessary prior to effectuating such
disposition and all other governmental regulatory requirements shall have been
satisfied.

              (c) Notwithstanding the provisions of paragraph (a) above, no such
registration statement or opinion of counsel shall be necessary for a transfer
by a Holder which is (i) a partnership to or among its partners or former
partners in accordance with partnership interests, (ii) a corporation to an
Affiliate or to its shareholders in accordance with their interest in the
corporation, (iii) a limited liability company to its members or former members
in accordance with their interest in the limited liability company, or (iv) to
the Holder's family member or trust for the benefit of an individual Holder,
provided each transferee agrees in writing to be subject to the terms of this
Agreement to the same extent as if he were an original Holder hereunder.

              (d) Each certificate representing Shares or Registrable Securities
shall (unless otherwise permitted by the provisions of this Agreement) be
stamped or otherwise imprinted with a legend substantially similar to the
following (in addition to any legend required under applicable state securities
laws or as provided elsewhere in this Agreement):

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               THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
               THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT") AND MAY NOT BE
               OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
               HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR UNLESS
               THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY
               SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
               REGISTRATION IS NOT REQUIRED.

              (e) The Company shall be obligated to reissue promptly unlegended
certificates at the request of any Holder if the Holder shall have obtained an
opinion of counsel (which counsel may be counsel to the Company) reasonably
acceptable to the Company to the effect that the securities proposed to be
disposed of may lawfully be so disposed of without registration, qualification
or legend.

              (f) Any legend endorsed on an instrument pursuant to applicable
state securities laws and the stop-transfer instructions with respect to such
securities shall be removed upon receipt by the Company of an order of the
appropriate blue sky authority authorizing such removal.

        2.2.  DEMAND REGISTRATION.

              (a) Subject to the conditions of this Section 2.2, if the Company
shall receive a written request from the Holders of more than a majority of the
Registrable Securities then outstanding (the "INITIATING HOLDERS") that the
Company file a registration statement under the Securities Act covering the
registration of Registrable Securities having an aggregate offering price to the
public in excess of $5,000,000 (a "QUALIFIED PUBLIC OFFERING"), then the Company
shall, within thirty (30) days of the receipt thereof, give written notice of
such request to all Holders, and subject to the limitations of this Section 2.2,
use its best efforts to effect, as soon as practicable, the registration under
the Securities Act of all Registrable Securities that the Holders request to be
registered.

              (b) If the Initiating Holders intend to distribute the Registrable
Securities covered by their request by means of an underwriting, they shall so
advise the Company as a part of their request made pursuant to this Section 2.2
and the Company shall include such information in the written notice referred to
in Section 2.2(a). In such event, the right of any Holder to include its
Registrable Securities in such registration shall be conditioned upon such
Holder's participation in such underwriting and the inclusion of such Holder's
Registrable Securities in the underwriting (unless otherwise mutually agreed by
a majority in interest of the Initiating Holders and such Holder) to the extent
provided herein. All Holders proposing to distribute their securities through
such underwriting shall enter into an underwriting agreement in customary form
with the underwriter or underwriters selected for such underwriting by a
majority in interest of the Initiating Holders (which underwriter or
underwriters shall be reasonably acceptable to the Company). Notwithstanding any
other provision of this Section 2.2, if the underwriter advises the Company that
marketing factors require a limitation of the number of securities to be

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underwritten (including Registrable Securities) then the Company shall so advise
all Holders of Registrable Securities which would otherwise be underwritten
pursuant hereto, and the number of shares that may be included in the
underwriting shall be allocated to the Holders of such Registrable Securities on
a pro rata basis based on the number of Registrable Securities held by all such
Holders (including the Initiating Holders); provided, however, that the number
of shares of Registrable Securities to be included in such underwriting shall
not be reduced unless all other securities are first entirely excluded from the
underwriting. Any Registrable Securities excluded or withdrawn from such
underwriting shall be withdrawn from the registration.

              (c) The Company shall not be required to effect a registration
pursuant to this Section 2.2:

                  (i) prior to May 26, 2004 (except that this period shall be
reduced to match any shorter demand registration period granted by the Company
to any other party and shall be reduced to the date that is one hundred eighty
(180) days after the effective date of a registration statement in connection
with the Initial Offering); or

                  (ii) after the Company has effected two (2) registrations
pursuant to this Section 2.2, and such registrations have been declared or
ordered effective; or

                  (iii) during the period starting with the date of filing of,
and ending on the date one hundred eighty (180) days following the effective
date of the registration statement pertaining to the Initial Offering; provided
that the Company makes reasonable good faith efforts to cause such registration
statement to become effective; or

                  (iv) if within thirty (30) days of receipt of a written
request from Initiating Holders pursuant to Section 2.2(a), the Company gives
notice to the Holders of the Company's intention to make its Initial Offering
within ninety (90) days; or

                  (v) if the Company shall furnish to Holders requesting a
registration statement pursuant to this Section 2.2, a certificate signed by the
Chairman of the Board stating that in the good faith judgment of the Company's
Board of Directors (the "BOARD OF DIRECTORS"), it would be seriously detrimental
to the Company and its stockholders for such registration statement to be
effected at such time, in which event the Company shall have the right to defer
such filing for a period of not more than ninety (90) days after receipt of the
request of the Initiating Holders; provided that such right to delay a request
shall be exercised by the Company not more than once in any twelve (12) month
period.

         2.3. PIGGYBACK REGISTRATIONS. The Company shall notify all Holders of
Registrable Securities in writing at least thirty (30) days prior to the filing
of any registration statement under the Securities Act for purposes of a public
offering of securities of the Company (including, but not limited to,
registration statements relating to secondary offerings of securities of the
Company, but excluding registration statements relating to employee benefit
plans or with respect to corporate reorganizations or other transactions under
Rule 145 of the Securities Act) and will afford each such Holder an opportunity
to include in such registration statement all or part of such Registrable
Securities held by such Holder. Each Holder desiring to include in any such
registration statement all or any part of the Registrable Securities held by it
shall, within

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fifteen (15) days after the above-described notice from the Company, so notify
the Company in writing. Such notice shall state the intended method of
disposition of the Registrable Securities by such Holder. The Company shall,
subject to the provisions of Sections 2.3(a) and (b) below, cause to be
registered under the Securities Act all of the Registrable Securities that each
such Holder has requested to be registered. If a Holder decides not to include
all of its Registrable Securities in any registration statement thereafter filed
by the Company, such Holder shall nevertheless continue to have the right to
include any Registrable Securities in any subsequent registration statement or
registration statements as may be filed by the Company with respect to offerings
of its securities, all upon the terms and conditions set forth herein.

              (a) UNDERWRITING. If the registration statement under which the
Company gives notice under this Section 2.3 is for an underwritten offering, the
Company shall so advise the Holders of Registrable Securities at the time of the
Company's notice described above in this Section 2.3. In such event, the right
of any such Holder to be included in a registration pursuant to this Section 2.3
shall be conditioned upon such Holder's participation in such underwriting and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable
Securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such
underwriting by the Company. Notwithstanding any other provision of this
Agreement, if the underwriter determines in good faith that marketing factors
require a limitation of the number of shares to be underwritten, the number of
shares that may be included in the underwriting shall be allocated, first, to
the Company; second, to the Holders on a pro rata basis based on the total
number of Registrable Securities held by the Holders; and third, to any
stockholder of the Company (other than a Holder) on a pro rata basis. In no
event shall the amount of securities of the selling Holders included in the
registration be reduced below thirty percent (30%) of the total amount of
securities included in such registration, unless such offering is the Initial
Offering and such registration does not include shares of any other selling
stockholders, in which event any or all of the Registrable Securities of the
Holders may be excluded in accordance with the immediately preceding sentence.
In no event will shares of any other selling stockholder be included in such
registration which would reduce the number of shares which may be included by
Holders without the written consent of Holders of not less than a majority of
the Registrable Securities proposed to be sold in the offering.

              (b) RIGHT TO TERMINATE REGISTRATION. The Company shall have the
right to terminate or withdraw any registration initiated by it under this
Section 2.3 prior to the effectiveness of such registration whether or not any
Holder has elected to include securities in such registration. The Registration
Expenses of such withdrawn registration shall be borne by the Company in
accordance with Section 2.5 hereof.

         2.4. FORM S-3 REGISTRATION. In case the Company shall receive from any
Holder or Holders of at least twenty percent (20%) of the Registrable Securities
a written request or requests that the Company effect a registration on Form S-3
or any similar short-form registration statement and any related qualification
or compliance with respect to all or a part of the Registrable Securities owned
by such Holder or Holders, the Company will:

              (a) promptly give written notice of the proposed registration, and
any related qualification or compliance, to all other Holders; and

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              (b) as soon as practicable, effect such registration and all such
qualifications and compliances as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Holder's or
Holders' Registrable Securities as are specified in such request, together with
all or such portion of the Registrable Securities of any other Holder or Holders
joining in such request as are specified in a written request given within
fifteen (15) days after receipt of such written notice from the Company;
provided, however, that the Company shall not be obligated to effect any such
registration, qualification or compliance pursuant to this Section 2.4:

                  (i) if Form S-3 (or any successor or similar form) is not
available for such offering by the Holders, or

                  (ii) if the Holders, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) at an aggregate
price to the public of less than $1,000,000, or

                  (iii) if the Company has effected two registrations on Form
S-3 (or any similar short-form registration) in the twelve month period
immediately preceding the request, or

                  (iv) if the Company shall furnish to the Holders a certificate
signed by the Chairman of the Board of Directors stating that in the good faith
judgment of the Board of Directors, it would be seriously detrimental to the
Company and its stockholders for such Form S-3 registration to be effected at
such time, in which event the Company shall have the right to defer the filing
of the Form S-3 registration statement for a period of not more than ninety (90)
days after receipt of the request of the Holder or Holders under this Section
2.4: provided, that such right to delay a request shall be exercised by the
Company not more than once in any twelve (12) month period, or

                  (v) in any particular jurisdiction in which the Company would
be required to qualify to do business or to execute a general consent to service
of process in effecting such registration, qualification or compliance.

              (c) Subject to the foregoing, the Company shall file a Form S-3
registration statement covering the Registrable Securities and other securities
so requested to be registered as soon as practicable after receipt of the
request or requests of the Holders. Registrations effected pursuant to this
Section 2.4 shall not be counted as demands for registration pursuant to Section
2.2 hereof.

         2.5. EXPENSES OF REGISTRATION.

              (a) All Registration Expenses incurred in connection with the
first two (2) registrations by the Holders pursuant to Section 2.2 shall be
borne by the Company.

              (b) All Registration Expenses incurred in connection with the
registrations by the Holders pursuant to Sections 2.3 and 2.4 shall be borne by
the Company.

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              (c) All Selling Expenses incurred in connection with any
registrations hereunder, shall be borne by the Holders of the securities so
registered pro rata on the basis of the number of shares so registered.

              (d) The Company shall not be required to pay for expenses of any
registration proceeding begun pursuant to Section 2.2 or 2.4, the request of
which has been subsequently withdrawn by the Initiating Holders unless the
withdrawal of the registration results from either (i) intentional actions by
the Company outside the normal course of business or (ii) the discovery of
material adverse information concerning the Company that is not known by the
Initiating Holders at the time of such request, or unless, in the case of a
registration pursuant to Section 2.2 hereof, a majority of the Registrable
Securities to be registered agree to forfeit one (1) of their demand
registrations under Section 2.2 hereof.

         2.6. OBLIGATIONS OF THE COMPANY. Whenever required to effect the
registration of any Registrable Securities, the Company shall, as expeditiously
as reasonably possible:

              (a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use all reasonable efforts to cause
such registration statement to become effective, and, upon the request of the
Holders of a majority of the Registrable Securities registered thereunder, keep
such registration statement effective for up to ninety (90) days or, if earlier,
until the Holder or Holders have completed the distribution related thereto,
provided, however, that such ninety (90) day period shall be extended for a
period of time equal to the period the Holder refrains from selling any
securities included in such registration at the request of an underwriter of
Common Stock.

              (b) Prepare and file with the SEC such amendments and supplements
to such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement.

              (c) Furnish to the Holders such number of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.

              (d) Use all reasonable efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holders, provided that the Company shall not be required in connection therewith
or as a condition thereto to qualify to do business or to file a general consent
to service of process in any such states or jurisdictions.

              (e) In the event of any underwritten public offering, enter into
and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter(s) of such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.

              (f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the

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Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as then in effect, includes an untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.

              (g) Cause all such Registrable Securities registered hereunder to
be listed on each securities exchange on which similar securities issued by the
Company are then listed.

              (h) Provide a transfer agent and registrar for all Registrable
Securities registered hereunder and a CUSIP number for all such Registrable
Securities, in each case not later than the effective date of such registration.

              (i) Furnish, at the request of a majority in interest of the
Holders participating in the registration, on the date that such Registrable
Securities are delivered to the underwriters for sale, if such securities are
being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated as of such date, of
the counsel representing the Company for the purposes of such registration, in
form and substance as is customarily given to underwriters in an underwritten
public offering and reasonably satisfactory to a majority in interest of the
Holders requesting registration, addressed to the underwriters, if any, and to
the Holders requesting registration of Registrable Securities and (ii) a letter
dated as of such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering and
reasonably satisfactory to a majority in interest of the Holders requesting
registration, addressed to the underwriters, if any, and if permitted by
applicable accounting standards, to the Holders requesting registration of
Registrable Securities.

         2.7. TERMINATION OF REGISTRATION RIGHTS. All registration rights
granted under this Section 2 shall terminate and be of no further force and
effect three (3) years after the date of the Initial Offering. In addition, a
Holder's registration rights shall expire if both of the following conditions
occur: (i) the Company has completed its Initial Offering and is subject to the
provisions of the Exchange Act and (ii) all Registrable Securities held by and
issuable to such Holder may be sold under Rule 144 during any ninety (90) day
period.

         2.8. DELAY OF REGISTRATION; FURNISHING INFORMATION.

              (a) No Holder shall have any right to obtain or seek an injunction
restraining or otherwise delaying any such registration as the result of any
controversy that might arise with respect to the interpretation or
implementation of this Section 2.

              (b) It shall be a condition precedent to the obligations of the
Company to take any action pursuant to Section 2.2, 2.3 or 2.4 that the selling
Holders shall furnish to the Company such information regarding themselves, the
Registrable Securities held by them and the intended method of disposition of
such securities as shall be required to effect the registration of their
Registrable Securities.

              (c) The Company shall have no obligation with respect to any
registration requested pursuant to Section 2.2 or Section 2.4 if, due to the
operation of subsection 2.8(b), the

                                       10
<PAGE>   14

number of shares or the anticipated aggregate offering price of the Registrable
Securities to be included in the registration does not equal or exceed the
number of shares or the anticipated aggregate offering price required to
originally trigger the Company's obligation to initiate such registration as
specified in Section 2.2 or Section 2.4, whichever is applicable.

         2.9. INDEMNIFICATION. In the event any Registrable Securities are
included in a registration statement under Sections 2.2, 2.3 or 2.4:

              (a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the partners, officers, directors and legal counsel
of each Holder, any underwriter (as defined in the Securities Act) for such
Holder and each person, if any, who controls such Holder or underwriter within
the meaning of the Securities Act or the Exchange Act, against any losses,
claims, damages, or liabilities (joint or several) to which they may become
subject under the Securities Act, the Exchange Act or other federal or state
law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following statements,
omissions or violations (collectively a "VIOLATION") by the Company: (i) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(iii) any violation or alleged violation by the Company of the Securities Act,
the Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with the offering covered by such registration statement; and the
Company will reimburse each such Holder, partner, officer or director,
underwriter or controlling person for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided however, that the indemnity
agreement contained in this subsection 2.9(a) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, which consent shall
not be unreasonably withheld, nor shall the Company be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon a Violation which occurs in reliance upon and in
conformity with written information furnished expressly for use in connection
with such registration by such Holder, partner, officer, underwriter or
controlling person of such Holder.

              (b) To the extent permitted by law, each selling Holder will, if
Registrable Securities held by such Holder are included in the securities as to
which such registration qualifications or compliance is being effected,
indemnify and hold harmless the Company, each of its directors, its officers,
and legal counsel and each person, if any, who controls the Company within the
meaning of the Securities Act, any underwriter and any other Holder selling
securities under such registration statement or any of such other Holder's
partners, directors or officers or any person who controls such Holder, against
any losses, claims, damages or liabilities (joint or several) to which the
Company or any such director, officer, controlling person, underwriter or other
such Holder, or partner, director, officer or controlling person of such other
Holder may become subject under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation

                                       11
<PAGE>   15

occurs in reliance upon and in conformity with written information furnished by
such Holder under an instrument duly executed by such Holder and stated to be
specifically for use in connection with such registration; and each such Holder
will reimburse any legal or other expenses reasonably incurred by the Company or
any such director, officer, controlling person, underwriter or other Holder, or
partner, officer, director or controlling person of such other Holder in
connection with investigating or defending any such loss, claim, damage,
liability or action if it is judicially determined that there was such a
Violation; provided, however, that the indemnity agreement contained in this
subsection 2.9(b) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Holder, which consent shall not be unreasonably withheld;
provided further, that in no event shall any indemnity under this Section 2.9
exceed the net proceeds from the offering received by such Holder.

              (c) Promptly after receipt by an indemnified party under this
Section 2.9 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 2.9, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall relieve such indemnifying party of any
liability to the indemnified party under this Section 2.9 only if such failure
is materially prejudicial to the indemnifying party's ability to defend such
action, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 2.9.

              (d) If the indemnification provided for in this Section 2.9 is
held by a court of competent jurisdiction to be unavailable to an indemnified
party with respect to any losses, claims, damages or liabilities referred to
herein, the indemnifying party, in lieu of indemnifying such indemnified party
thereunder, shall to the extent permitted by applicable law contribute to the
amount paid or payable by such indemnified party as a result of such loss,
claim, damage or liability in such proportion as is appropriate to reflect the
relative fault of the indemnifying party on the one hand and of the indemnified
party on the other in connection with the Violation(s) that resulted in such
loss, claim, damage or liability, as well as any other relevant equitable
considerations. The relative fault of the indemnifying party and of the
indemnified party shall be determined by a court of law by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission; provided, that in no event shall any contribution by a
Holder hereunder exceed the proceeds from the offering received by such Holder.

                                       12
<PAGE>   16

              (e) The obligations of the Company and Holders under this Section
2.9 shall survive completion of any offering of Registrable Securities in a
registration statement. No Indemnifying Party, in the defense of any such claim
or litigation, shall, except with the consent of each Indemnified Party, consent
to entry of any judgment or enter into any settlement which does not include as
an unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect to such claim or
litigation.

         2.10. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the
Company to register Registrable Securities pursuant to this Section 2 may be
assigned by a Holder to a transferee or assignee of Registrable Securities which
(i) is an Affiliate, subsidiary, parent, general partner, limited partner or
retired partner of a Holder, (ii) is a Holder's family member or trust for the
benefit of an individual Holder, or (iii) acquires at least three million one
hundred sixty-seven thousand one hundred twenty-five (3,167,125) shares of
Registrable Securities (as adjusted for stock splits and combinations);
provided, however, (A) the transferor shall, within ten (10) days after such
transfer, furnish to the Company written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned and (B) such transferee shall agree in
writing to be subject to all terms, conditions and restrictions set forth in
this Agreement. For the purposes of determining the number of shares of
Registrable Securities held by a transferee or assignee, the holdings of
transferees and assignees of a partnership who are partners or retired partners
of such partnership (including spouses and ancestors, lineal descendants, and
siblings of such partners or spouses who acquire Registrable Securities by gift,
will, or intestate succession) shall be aggregated together with the
partnership; provided that all assignees and transferees who would not qualify
individually for assignment of registration rights shall have a single
attorney-in-fact for the purpose of exercising any rights, receiving notices, or
taking any action under this Section 2.

         2.11. LIMITATION ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written consent
of the Holders of a majority of the outstanding Registrable Securities, enter
into any agreement with any holder or prospective holder of any securities of
the Company which would allow such holder or prospective holder (a) to include
such securities in any registration filed under Section 2.2, 2.3 or 2.4 hereof,
unless under the terms of such agreement, such holder or prospective holder may
include such securities in any such registration only to the extent that the
inclusion of his securities will not reduce the amount of the Registrable
Securities of the Holders which is included, or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the earlier of either of the dates set forth in Section 2.2
hereof or within one hundred eighty (180) days of the effective date of any
registration effected pursuant to Section 2.2 hereof.

         2.12. "MARKET STAND-OFF" AGREEMENT. If requested by the Company or the
representative of the underwriters of Common Stock (or other securities) of the
Company, each Holder shall not sell or otherwise transfer or dispose of any
Common Stock (or other securities) of the Company held by such Holder (other
than those included in the registration) for a period specified by the
representative of the underwriters not to exceed one hundred eighty (180) days
following the effective date of a registration statement of the Company filed
under the Securities Act in connection with the Initial Offering and not to
exceed one hundred twenty (120) days following the effective date of each
registration statement following the Initial Offering,

                                       13
<PAGE>   17

provided that all officers and directors of the Company and all other persons
with registration rights (whether or not pursuant to this Agreement) enter into
similar agreements.

         The obligations described in this Section 2.12 shall not apply to a
registration relating solely to employee benefit plans on Form S-1 or Form S-8
or similar forms that may be promulgated in the future, or a registration
relating solely to a Commission Rule 145 transaction on Form S-4 or similar
forms that may be promulgated in the future. The Company may impose
stop-transfer instructions with respect to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the end of the periods
referenced in the preceding paragraph.

         2.13 RULE 144 REPORTING. With a view to making available to the Holders
the benefits of certain rules and regulations of the SEC which may permit the
sale of the Registrable Securities to the public without registration, the
Company agrees to use its best efforts to:

              (a) Make and keep public information available, as those terms are
understood and defined in SEC Rule 144 or any similar or analogous rule
promulgated under the Securities Act, at all times after the closing of the
first registered sale of the Company's securities, and file with the SEC, in a
timely manner, all reports and other documents required of the Company under the
Exchange Act; and

              (b) So long as a Holder owns any Registrable Securities, furnish
to such Holder forthwith upon request: a written statement by the Company as to
its compliance with the reporting requirements of Rule 144, and of the Exchange
Act (at any time after it has become subject to such reporting requirements); a
copy of the most recent annual or quarterly report of the Company; and such
other reports and documents as a Holder may reasonably request in availing
itself of any rule or regulation of the SEC allowing it to sell any such
securities without registration.

SECTION 3.    COVENANTS OF THE COMPANY

         3.1. BASIC FINANCIAL INFORMATION AND REPORTING.

              (a) The Company will maintain true books and records of account in
which full and correct entries will be made of all its business transactions
pursuant to a system of accounting established and administered in accordance
with generally accepted accounting principles consistently applied, and will set
aside on its books all such proper accruals and reserves as shall be required
under generally accepted accounting principles consistently applied.

              (b) As soon as practicable after the end of each fiscal year of
the Company and until the closing of the Initial Offering, and in any event
within one hundred twenty (120) days thereafter, the Company will furnish each
Major Investor a consolidated balance sheet of the Company, as at the end of
such fiscal year, a consolidated statement of income of the Company for such
year, a consolidated statement of cash flows of the Company for such year and a
statement of stockholders' equity as of the end of such year, all prepared in
accordance with generally accepted accounting principles consistently applied
and setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail.

                                       14
<PAGE>   18

              (c) The Company will also furnish each Major Investor, as soon as
practicable after the end of the first, second and third quarterly accounting
periods in each fiscal year of the Company, and in any event within sixty (60)
days thereafter, a consolidated balance sheet of the Company as of the end of
each such quarterly period, a consolidated statement of income for such
quarterly period, a consolidated statement of cash flows of the Company for such
quarterly period and for the current fiscal year to date and a statement of
stockholders' equity as of the end of such quarterly period, prepared in
accordance with generally accepted accounting principles, with the exception
that no notes need be attached to such statements and year-end audit adjustments
may not have been made.

              (d) The Company will also furnish each Major Investor (i) at least
thirty (30) days prior to the beginning of each fiscal year, an annual budget
and operating plans for such fiscal year and (ii) within thirty (30) days after
the end of each month, an unaudited balance sheet and statements of income and
cash flow, prepared in accordance with generally accepted accounting principles,
with the exception that no notes need be attached to such statements and
year-end audit adjustments may not have been made, which also set forth
applicable budget figures and variances from budget.

         3.2. MATERIAL CHANGES AND LITIGATION. The Company shall notify each
Major Investor as soon as practicable, and in any event within fourteen (14)
days of becoming aware thereof, of (i) any litigation or governmental proceeding
or investigation ("LITIGATION") pending or, to the knowledge of the Company,
threatened against the Company (but excluding governmental proceedings affecting
the satellite industry in general), if such Litigation, if adversely determined,
could materially adversely affect the present or presently proposed business,
properties, assets, liabilities or prospects of the Company, or (ii) any
Litigation pending or, to the knowledge of the Company, threatened against any
officer of the Company, if such Litigation, if adversely determined, could
materially adversely affect the present or presently proposed business, assets,
properties, assets, liabilities or prospects of the Company, or (iii) the
occurrence of any other event which, if adversely determined, could materially
adversely affect, the present or presently proposed business, assets,
properties, assets, liabilities or prospects of the Company (but excluding
governmental proceedings affecting the satellite industry in general).

         3.3. INSPECTION RIGHTS. Each Major Investor shall have the right, upon
written notice given not less than three business days prior to a proposed
visit, to visit and inspect any of the properties of the Company or any of its
subsidiaries, and to discuss the affairs, finances and accounts of the Company
or any of its subsidiaries with its officers, and to review such information as
is reasonably requested all at such reasonable times and as often as may be
reasonably requested; provided, however, that the Company shall not be obligated
under this Section 3.3 with respect to a competitor of the Company or with
respect to information which the Board of Directors determines in good faith is
confidential and should not, therefore, be disclosed.

         3.4. CONFIDENTIALITY OF RECORDS. Each Investor agrees to use, and to
use its best efforts to insure that its authorized representatives use, the same
degree of care as such Investor uses to protect its own confidential information
to keep confidential any information furnished to it which the Company
identifies as being confidential or proprietary (so long as such information is
not in the public domain), except that such Investor may disclose such
proprietary or

                                       15
<PAGE>   19

confidential information to any partner, subsidiary or parent of such Investor
for the purpose of evaluating its investment in the Company as long as such
partner, subsidiary or parent is advised of the confidentiality provisions of
this Section 3.4.

         3.5. RESERVATION OF COMMON STOCK. The Company will at all times reserve
and keep available, solely for issuance and delivery upon the conversion of the
Shares, all Common Stock issuable from time to time upon such conversion.

         3.6. TERMINATION OF COVENANTS. All covenants of the Company contained
in Section 3 of this Agreement shall expire and terminate as to each Investor on
the effective date of the registration statement pertaining to the Initial
Offering.

SECTION 4.    RIGHT OF FIRST OFFER.

         4.1. SUBSEQUENT OFFERINGS. Each Major Investor shall have a right of
first offer to purchase its pro rata share of all Equity Securities, as defined
below, that the Company may, from time to time, propose to sell and issue after
the date of this Agreement, other than the Equity Securities excluded by Section
4.6 hereof; provided, that prior to the consummation of any such purchase
transaction, the Company shall have obtained any required approvals of the
Federal Communications Commission or other applicable governmental agencies.
Each Investor's pro rata share is equal to the ratio of (A) the number of shares
of Common Stock (including all shares of Common Stock issued or issuable upon
conversion of the Shares) of which such Investor is deemed to be a holder
immediately prior to the issuance of such Equity Securities to (B) the total
number of shares of outstanding Common Stock (including all shares of Common
Stock issued or issuable upon conversion of the Shares or upon the exercise of
any outstanding warrants or options or other securities convertible into Common
Stock) immediately prior to the issuance of the Equity Securities. The term
"EQUITY SECURITIES" shall mean (i) any Common Stock, Preferred Stock or other
security of the Company, (ii) any security convertible, with or without
consideration, into any Common Stock, Preferred Stock or other security of the
Company (including any option to purchase such a convertible security), (iii)
any security carrying any warrant or right to subscribe to or purchase any
Common Stock, Preferred Stock or other security of the Company or (iv) any such
warrant or right. An Investor shall be entitled to apportion the right of first
offer hereby granted it among itself, its partners, and its affiliates in such
proportions as it deems appropriate.

                                       16
<PAGE>   20

         4.2. EXERCISE OF RIGHTS. If the Company proposes to issue any Equity
Securities, it shall give each Major Investor written notice of its intention,
describing the number and type of Equity Securities, the price and the terms and
conditions upon which the Company proposes to issue the same. Each Major
Investor shall have fifteen (15) days from its receipt of such notice to agree
to purchase up to its pro rata share of the Equity Securities for the price and
upon the terms and conditions specified in the notice by giving written notice
to the Company and stating therein the quantity of the Equity Securities to be
purchased. Notwithstanding the foregoing, the Company shall not be required to
offer or sell such Equity Securities to any Investor who would cause the Company
to be in violation of applicable federal securities laws by virtue of such offer
or sale.

         4.3. ISSUANCE OF EQUITY SECURITIES TO OTHER PERSONS. If the Major
Investors fail to exercise in full the right of first offer, the Company shall
have ninety (90) days thereafter to sell the Equity Securities in respect of
which the Major Investor's rights were not exercised, at a price and upon
general terms and conditions materially no more favorable to the purchasers
thereof than specified in the Company's notice to the Major Investors pursuant
to Section 4.2 hereof. If the Company has not sold such Equity Securities within
ninety (90) days of the notice provided pursuant to Section 4.2, the Company
shall not thereafter issue or sell any Equity Securities, without first offering
such securities to the Major Investors in the manner provided above.

         4.4. TERMINATION OF RIGHT OF FIRST OFFER. The right of first offer
established by this Section 4 shall terminate upon the closing of the Initial
Offering.

         4.5. TRANSFER OF RIGHT OF FIRST OFFER. The right of first offer of each
Major Investor under this Section 4 may be transferred to the same parties,
subject to the same restrictions as any transfer of registration rights pursuant
to Section 2.10.

         4.6. EXCLUDED SECURITIES. The right of first offer established by this
Section 4 shall have no application to any of the following Equity Securities:

              (a) (i) up to an aggregate amount of 10,000,000 shares of Common
Stock (and/or options, warrants or other Common Stock purchase rights issued
pursuant to such options, warrants or other rights) issued or to be issued to
employees, officers or directors of, or consultants or advisors to the Company
or any subsidiary, pursuant to stock purchase or stock option plans or other
arrangements that are approved by the Board of Directors, or (ii) stock or
options of any class or series issued pursuant to the Amended and Restated Stock
Option Agreements dated as of May 26, 1999 by and between the Company and each
of Thomas E. Moore, David M. Brown, Michelle Kuska, Andrew Sundelin, Jeffrey
Weaver, Paul Froelich and Thomas Elliot;

              (b) any Equity Securities issued for consideration other than cash
pursuant to a merger, consolidation, acquisition or similar business
combination;

              (c) shares of Common Stock issued in connection with any stock
split, stock dividend or recapitalization by the Company;

                                       17
<PAGE>   21

              (d) the issuance of securities pursuant to the conversion or
exercise of convertible or exercisable securities outstanding on the date hereof
or with respect to which the right of first offer has previously been offered;

              (e) the issuance of securities in connection debt financings,
credit agreements or issuance of debt securities (including the issuance of
options, warrants or other rights to acquire securities of the Company to
underwriters in connection with the placement of such debt securities) upon the
express approval of the Board of Directors;

              (f) any Equity Securities issued pursuant to any equipment leasing
arrangement, the sale by the Company of capacity on a satellite owned or
controlled by the Company or their Affiliates upon the express approval of the
Board of Directors; and

              (g) any Equity Securities that are issued by the Company pursuant
to a registration statement filed under the Securities Act.

SECTION 5.    CONFIDENTIAL INFORMATION.

         5.1. PROTECTION OF CONFIDENTIAL INFORMATION. Confidential or
proprietary information disclosed by any party under this Agreement, as well as,
the terms of this Agreement, shall be considered confidential information (the
"CONFIDENTIAL INFORMATION") and shall not be disclosed by the Company or any
other party to this Agreement to any third party, subject to Section 5.2 below.
Notwithstanding the preceding sentence, no party hereto shall be prohibited by
this Section 5 from disclosing its own Confidential Information (other than the
terms of this Agreement). The term "CONFIDENTIAL INFORMATION" shall not be
deemed to include information which: (a) is now, or hereafter becomes, through
no act or failure to act on the part of the receiving party, generally known or
available; (b) is known by the receiving party at the time of receiving such
information as evidenced by its records; (c) is hereafter furnished to the
receiving party by a third party, as a matter of right and without restriction
on disclosure; (d) is independently developed by the receiving party without any
breach of this Agreement; or (e) is the subject of a written permission to
disclose provided by the disclosing party to the receiving party. Each party
shall immediately notify the other parties of any information that comes to its
attention which might indicate that there has been a loss of confidentiality
with respect to the Confidential Information protected by this Section 5. In the
event that the Company or any other party is requested or becomes legally
compelled (by statute or regulation or by oral questions, interrogatories,
request for information or documents, subpoena, criminal or civil investigative
demand or similar process, including without limitation, in connection with any
public or private offering of the Company's capital stock) to disclose any of
the Confidential Information, such party (the "DISCLOSING PARTY") shall provide
the other party (the "NON-DISCLOSING PARTY") with prompt written notice of that
fact and shall seek (with the cooperation and reasonable efforts of the
Non-Disclosing Party) a protective order, confidential treatment or other
appropriate remedy. In such event, the Disclosing Party shall furnish only that
portion of the Confidential Information which is legally required and shall
exercise reasonable efforts to obtain reliable assurance that confidential
treatment will be accorded the Confidential Information to the extent reasonably
requested by the Non-Disclosing Party. The provisions of this Section 5.1 shall
be in addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto with respect to the
transaction contemplated hereby. Any party to this

                                       18
<PAGE>   22

Agreement may disclose Confidential Information as necessary to establish rights
or enforce obligations under this Agreement, but only to the extent that any
such disclosure is necessary.

         5.2. DISCLOSURE OF TERMS. Notwithstanding the provisions of Section 5.1
above, the Company and each of the Investors may disclose the existence of this
Agreement and the general terms hereof solely to the Company's and each
Investor's investors, investment bankers, lenders, accountants, legal counsel,
business partners, and bona fide prospective investors, employees, lenders and
business partners, in each case only where such persons or entities are under
confidentiality obligations to the Company or the Investor, as applicable.

SECTION 6.    MISCELLANEOUS.

         6.1. GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of Colorado as applied to agreements among Colorado
residents entered into and to be performed entirely within Colorado.

         6.2. SURVIVAL. The representations, warranties, covenants, and
agreements made herein shall survive any investigation made by any Holder and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.

         6.3. SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors, and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of Registrable Securities from time to time;
provided, however, that prior to the receipt by the Company of adequate written
notice of the transfer of any Registrable Securities specifying the full name
and address of the transferee, the Company may deem and treat the person listed
as the holder of such shares in its records as the absolute owner and holder of
such shares for all purposes, including the payment of dividends or any
redemption price.

         6.4. SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal, or unenforceable, the validity, legality, and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.

         6.5. AMENDMENT AND WAIVER. Except as otherwise expressly provided
herein, this Agreement may be amended or modified and the observance of any term
of this Agreement may be waived (either generally or in a particular instance
and either retroactively or prospectively) only upon the written consent of the
Company and the holders of at least fifty-eight percent (58%) of the Registrable
Securities; provided that no such amendment or waiver shall adversely affect any
holder in a manner in which the other holders are not adversely affected in a
manner that is proportionate to the number of Registrable Securities held
without the consent of such holder. Each Investor acknowledges and agrees that
any amendment or waiver effected in accordance with this Section 6.5 shall be
binding upon all holders of Registrable Securities then

                                       19
<PAGE>   23

outstanding, each future holder of all such Registrable Securities, and the
Company, whether or not such holder in fact consented to such amendment or
waiver.

         6.6. DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power, or remedy accruing to any Holder, upon any breach,
default or noncompliance of the Company under this Agreement shall impair any
such right, power, or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance, or any acquiescence therein, or of any
similar breach, default or noncompliance thereafter occurring. All remedies,
either under this Agreement, by law, or otherwise afforded to Holders, shall be
cumulative and not alternative.

         6.7. NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified, (ii) when sent by confirmed facsimile transmission if sent
during normal business hours of the recipient; if not, then on the next business
day, (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
party to be notified at the address as set forth on the signature pages hereof
or Exhibit A hereto or at such other address as such party may designate by ten
(10) days advance written notice to the other parties hereto.

         6.8. ATTORNEYS' FEES. In the event that any dispute among the parties
to this Agreement should result in litigation, the prevailing party in such
dispute shall be entitled to recover from the losing party all fees, costs and
expenses of enforcing any right of such prevailing party under or with respect
to this Agreement, including without limitation, such reasonable fees and
expenses of attorneys and accountants, which shall include, without limitation,
all fees, costs and expenses of appeals.

         6.9. ENTIRE AGREEMENT. This Agreement (including the Schedules and
Exhibits to this Agreement, if any) constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all prior agreements and understandings with
respect to the subject matter hereof.

         6.10. TITLES AND SUBTITLES. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.

         6.11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

         6.12. INTRODUCTORY PARAGRAPHS AND RECITALS. The introductory paragraphs
hereof and the Recitals contained herein are hereby incorporated as substantive
provisions of this Agreement and are intended by the parties to be given full
force and effect as such.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       20
<PAGE>   24

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the First Closing (as defined in the Securities Purchase
Agreement) and this Agreement is dated and effective as of the Effective Date.

COMPANY:

iSKY.NET, INC.

By: /s/ DAVID M. BROWN
   ----------------------------------------
Its: Vice President
    ---------------------------------------
9137 E. Mineral Circle
Englewood, CO 80112

INVESTORS:

KPCB HOLDINGS, INC., as nominee

By: /s/ RUSSELL SIEGELMAN
   ----------------------------------------
Its: Senior Vice President
2750 Sand Hill Road
Menlo Park, CA 94025

TELEVERDE COMMUNICATIONS, L.P.

By: TELEVERDE COMMUNICATIONS, CORP.,
    general partner

By: /s/ DAVID M. DRUCKER
   ----------------------------------------
Its: President
    ---------------------------------------
2727 Bryant Street, Suite 430
Denver, CO 80211

DIRECTCOM NETWORKS, INC.

By: /s/ TOBY DEWEESE
   ----------------------------------------
Its: V.P. Corp. Dev.
    ----------------------------------------
7140 South Lewis Avenue
Tulsa, OK  74136-5422

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   25

TRW, INC.

By: /s/ T.W. HANNEMANN
    --------------------------------------
Its: Executive Vice President
     -------------------------------------

    --------------------------------------

    --------------------------------------

BROBECK, PHLEGER & HARRISON LLP

By: /s/ MICHAEL S. KAGNOFF
    --------------------------------------
Its: Partner
     -------------------------------------

    --------------------------------------

    --------------------------------------

UMB BANK AS TRUSTEE OF THE BROBECK,
PHLEGER & HARRISON RETIREMENT SAVINGS
PLAN FBO JOHN A. DENNISTON

By: /s/ JANET K. LEE
    --------------------------------------
Its: Asst. Vice President
     -------------------------------------

------------------------------------------

------------------------------------------

/s/ JOHN A. DENNISTON
------------------------------------------
John A. Denniston

------------------------------------------

------------------------------------------

LIBERTY KASTR CORP.

By: /s/ Gary S. Howard
   ---------------------------------------
Its: Executive Vice President
    --------------------------------------

9197 S. Peoria Street
Englewood, CO 80112

       [SIGNATURE PAGE TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   26

                                    EXHIBIT A
                              SCHEDULE OF INVESTORS

KPCB Holdings, Inc.
Televerde Communications L.P.
DirectCom Networks, Inc.
TRW, Inc.
Brobeck, Phleger & Harrison LLP
UMB Bank as Trustee of the Brobeck,
Phleger & Harrison LLP Retirement Savings
Plan FBO John A. Denniston
Liberty KASTR Corp.
John A. Denniston

                                       A-1
<PAGE>   27

By signature below, David M. Drucker and Penny S. Drucker hereby agree to be
bound by the terms and conditions of the AMENDED AND RESTATED INVESTOR RIGHTS
AGREEMENT dated October 19, 1999, a copy of which each signatory below hereby
acknowledges receipt, by and among iSKY, Inc. (formerly known as iSKY.net, Inc.)
and KPCB Holdings, Inc., Televerde Communications, L.P., DirectCom Networks,
Inc., TRW, Inc., Brobeck, Phleger & Harrison LLP, UMB Bank as Trustee of the
Brobeck Phleger & Harrison LLP Retirement Savings Plan FBO John A. Denniston,
Liberty KASTR Corp., and John A. Denniston.

Dated this 1st day of February, 2000.

                                                /s/ David M. Drucker
                                                --------------------------------
                                                David M. Drucker

                                                /s/ Penny S. Drucker
                                                --------------------------------
                                                Penny S. Drucker

<PAGE>   28

By signature below, the following parties hereby agree to be bound by the terms
and conditions of the AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT dated
October 19, 1999, a copy of which each signatory below hereby acknowledges
receipt, by and among iSKY, Inc. (formerly known as iSKY.net, Inc.) and KPCB
Holdings, Inc., Televerde Communications, L.P., DirectCom Networks, Inc., TRW,
Inc., Brobeck, Phleger & Harrison LLP, UMB Bank as Trustee of the Brobeck
Phleger & Harrison LLP Retirement Savings Plan FBO John A.

Denniston, Liberty KASTR Corp., and John A. Denniston.

Dated this 1st day of February, 2000.

SEGALOFF GROUP, LLC                             JOSHUA M. DAVID TRUST

By: /s/ Walter S. Segaloff by                   By: /s/ E.D. David
   ------------------------------                  -----------------------------
E.D. David his attorney in fact                 E.D. David, Trustee
---------------------------------
E.D. David, Attorney in Fact for
Walter S. Segaloff

SEGALOFF AND SONS JOINT VENTURE                 GREGORY B. DAVID TRUST

By: /s/ Walter S. Segaloff by                   By: /s/ E.D. David
   ------------------------------                  -----------------------------
E.D. David his attorney in fact                 E.D. David, Trustee
---------------------------------
E.D. David, Attorney in Fact for
Walter S. Segaloff

HASHEM PROVIDES, LLC                            SEGALOFF FAMILY, L.P.

By: /s/ E.D. David                              By: /s/ Walter S. Segaloff by
   ------------------------------                  -----------------------------
E.D. David, Manager                             E.D. David his attorney in fact
                                                -------------------------------
                                                E.D. David, Attorney-in-Fact for
                                                Walter S. Segaloff

PETER M. SEGALOFF FAMILY TRUST                  WALTER S. SEGALOFF TRUSTEE OF
                                                THE WALTER S. SEGALOFF REVOCABLE
                                                TRUST

By: /s/ E.D. David                              By: /s/ Walter S. Segaloff by
   ------------------------------                  -----------------------------
E.D. David, Trustee                             E.D. David, his attorney in fact
                                                --------------------------------
                                                E.D. David, Trustee

DAVID S. SEGALOFF FAMILY TRUST

By: /s/ E.D. David                              /s/ E.D. David
   ------------------------------               --------------------------------
E.D. David, Trustee                             E.D. DAVID, INDIVIDUALLY

J. WILLIAM DAVID TRUST

By: /s/ E.D. David
---------------------------------
E.D. David, Trustee

<PAGE>   29

By signature below, the following parties hereby agree to be bound by the terms
and conditions of the AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT dated
October 19, 1999, a copy of which each signatory below hereby acknowledges
receipt, by and among iSKY, Inc. (formerly known as iSKY.net, Inc.) and KPCB
Holdings, Inc., Televerde Communications, L.P., DirectCom Networks, Inc., TRW,
Inc., Brobeck, Phleger & Harrison LLP, UMB Bank as Trustee of the Brobeck
Phleger & Harrison LLP Retirement Savings Plan FBO John A. Denniston, Liberty
KASTR Corp., and John A. Denniston.

Dated this 1st day of February, 2000.

                                             BRIAN DEEVY

                                             By: /s/ Robert Allison
                                                --------------------------------
                                                Robert Allison, Attorney-in-Fact

                                             BRAD R. BUSSE

                                             By: /s/ Robert Allison
                                                --------------------------------
                                                Robert Allison, Attorney-in-Fact

BEVERLY A. DAVID                            TIMOTHY DAVID

By:  /s/ Robert Allison                     By: /s/ Robert Allison
   -------------------------                   ---------------------------------
   Robert Allison, Attorney-in-fact            Robert Allison, Attorney-in-Fact

                                            RHODES FAMILY TRUST

                                            By: /s/ Robert Allison
                                               ---------------------------------
                                               Robert Allison, Attorney-in-Fact

                                            LAZZERI FAMILY TRUST

                                            By: /s/ Robert Allison
                                               ---------------------------------
                                               Robert Allison, Attorney-in-Fact

                                            DAVID A. TOLLIVER

                                            By: /s/ Robert Allison
                                               ---------------------------------
                                               Robert Allison, Attorney-in-Fact

                                            By: /s/ Robert Allison
                                               ---------------------------------
                                               ROBERT ALLISON, INDIVIDUALLY

<PAGE>   30

   By signature below, Liberty Satellite, LLC hereby agrees to be bound by the
   terms and conditions of the AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
   dated October 19, 1999, as the same may have been amended, or may be amended
   from time to time, in accordance with its terms, a copy of which Liberty
   Satellite, LLC hereby acknowledges receipt, by and among iSKY, Inc. (formerly
   known as iSKY.net, Inc.) and the stockholders of iSky, Inc. signatory
   thereto.

   Dated this 16th day of March, 2000.

                                          LIBERTY SATELLITE, LLC

                                          BY:  TSAT HOLDING 1, INC.,
                                               as the Managing Member

                                          By: /s/ Kenneth G. Carroll
                                             -----------------------------------
                                          Name: Kenneth G. Carroll
                                               ---------------------------------
                                          Title: CFO
                                                --------------------------------
<PAGE>   31

                               FIRST AMENDMENT TO

                 AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT

         THIS AMENDMENT TO THE AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT
DATED FEBRUARY 2, 2000 (this "Amendment") is made as of the 16th day of March ,
2000, by and among iSKY, Inc., a Delaware corporation (f/k/a iSKY.net, Inc. the
"COMPANY") and each of the parties signatory hereto (the "SIGNATORY PARTIES").

                                    RECITALS

         1. On May 26, 1999, the Company (formerly known as KaSTAR Satellite
Communications Corporation) entered into an Investor Rights Agreement with KPCB
Holdings; Inc.; Televerde Communications, L.P.; DirectCom Networks, Inc.; TRW
Inc.; Brobeck, Phleger & Harrison LLP; UMB Bank as Trustee of the Brobeck,
Phleger & Harrison LLP Retirement Savings Plan FBO John A. Denniston; and John
A. Denniston (the "Investor Rights Agreement"). 2. On October 19, 1999, the
Company (then known as iSKY.net, Inc.), entered into an Amended and Restated
Investor Rights Agreement with KPCB Holdings, Inc., Televerde Communications,
L.P., DirectCom Networks, Inc., TRW Inc.; Brobeck, Phleger & Harrison LLP; UMB
Bank as Trustee of the Brobeck, Phleger & Harrison LLP Retirement Savings Plan
FBO John A. Denniston; Liberty KASTR Corp., and John A. Denniston (the
"Agreement"). The Amended and Restated Investor Rights Agreement superceded the
Investor Rights Agreement.

         3. On February 1, 2000, the Agreement was executed by shareholders who
had acquired an equity interest in the Company subsequent to October 19, 1999.
The additional parties to the Agreement are: David Drucker and Penny Drucker
(the "Drucker Group"); Segaloff Group, LLC; Segaloff and Sons Joint Venture;
Hashem Provides, LLC; Joshua M. David Trust; Gregory B. David Trust; Segaloff
Family, L.P.; Peter M. Segaloff Family Trust; David S. Segaloff Family Trust; J.
William David Trust; Walter S. Segaloff Revocable Trust; and E.D. David (the
"Segaloff Group"); Robert Allison; Brian Deevy; Brad R. Busse; Beverly A. David;
Timothy David; Rhodes Family Trust; Lazzeri Family Trust; David A. Tolliver (the
"Deevy Group").

         4. The Company and the Signatory Parties desire to amend the Agreement
as set forth below.

                                   AGREEMENT

         In consideration of the mutual promises and covenants contained herein,
and other good and valuable consideration, the sufficiency and receipt of which
are hereby acknowledged, the Company and the Signatory Parties agree as follows:

         1. DEFINITIONS. The following definitions hereby are added to Section
1.1 of the Agreement, or amended and restated in their entirety (as
appropriate):

              a. "MAJOR INVESTOR" means each Investor who holds at least three
million (3,000,000) shares (as adjusted) of Series A Preferred Stock, at least
one hundred sixty-seven

<PAGE>   32

thousand one hundred twenty-five (167,125) shares (as adjusted) of Series B
Preferred Stock, at least one million (1,000,000) shares (as adjusted) of Series
C Preferred Stock, at least ten million (10,000,000) shares (as adjusted) of
Series D Preferred Stock, at least ten million (10,000,000) shares (as adjusted)
of Series E Preferred Stock, or at least ten million (10,000,000) shares (as
adjusted) of Series F Preferred Stock.

              b. "SERIES D PREFERRED STOCK" shall mean the Company's Series D
Non Voting Preferred Stock.

              c. "SERIES E PREFERRED STOCK" shall mean the Company's Series E
Preferred Stock.

              d. "SERIES F PREFERRED STOCK" shall mean the Company's Series F
Preferred Stock.

              e. "SHARES" shall mean all of the Series A Preferred Stock, Series
B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E
Preferred Stock and Series F Preferred Stock (or any warrant convertible into
any of the foregoing or into Common Stock) owned by any Holder.

         2. WAIVER OF RIGHTS UNDER SECTION 4. The undersigned for themselves and
for all Major Investors, hereby waive any and all rights to acquire any Equity
Securities pursuant to Section 4 of the Agreement in connection with the
issuance by the Company of a warrant to purchase 7,200,000 shares of the Series
F Stock to EchoStar Communications Corporation.

         3. SECTION 2.4. Section 2.4 of the Agreement is amended as follows:

              a. The first sentence is amended and restated in its entirety as
follows: "In case the Company shall receive from any Holder a written request or
requests that the Company effect a registration on Form S-3 or any similar
short-form registration statement and any related qualification or compliance
with respect to all or a part of the Registrable Securities owned by such Holder
or Holders, the Company will:"

              b. Section 2.4(b)(ii) is amended and rested in its entirety as
follows: (ii) if the Holders, together with the holders of any other securities
of the Company entitled to inclusion in such registration, propose to sell
Registrable Securities and such other securities (if any) at an aggregate price
to the public of less than $5,000,000, or"

         4. SECTION 2.7 Section 2.7 of the Agreement is amended and restated in
its entirety as follows:

              "2.7 TERMINATION OF REGISTRATION RIGHTS. All registration rights
              granted under this Section 2 shall terminate and be of no further
              force and effect three (3) years after the date of the Initial
              Offering; provided, however, that no such rights shall terminate
              (x) with respect to any Registrable Security issuable pursuant to
              a warrant until such Registrable Security shall have been issued
              for at least one year, or (y) with respect to Shares held by
              Telesat Canada until one year after the date on which such Shares
              are no longer subject to the restriction on transfer pursuant to
              that certain Share Purchase Agreement between the Company and
              Telesat Canada. In addition, a Holder's

                                      -2-
<PAGE>   33

              registration rights shall expire if both of the following
              conditions occur: (i) the Company has completed its Initial
              Offering and is subject to the provisions of the Exchange Act and
              (ii) all Registrable Securities held by and issuable to such
              Holder may be sold under Rule 144 during any ninety (90) day
              period.

         5. EFFECTIVENESS OF AMENDMENT. Pursuant to Section 6.5 of the
Agreement, this Amendment and the waivers contained herein shall be binding upon
the Company and all holders of Registrable Securities (regardless of whether
such holder executes this Amendment) upon the execution of this Amendment by the
Company and the holders of at least fifty-eight percent (58%) of the Registrable
Securities.

                                      -3-
<PAGE>   34

         IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the day and year first above written.

                                         ISKY, INC.

                                         By: /s/ David M. Brown
                                             ---------------------------------
                                             David M. Brown, Vice President
                                             Address: 9137 East Mineral Circle,
                                                      Suite 140
                                                      Englewood, CO 80112

                                         ECHOSTAR SATELLITE CORPORATION

                                         By: /s/ Charles E. Ergen
                                             ---------------------------------
                                             Charles E. Ergen
                                         Its: Chief Executive Officer
                                         Address: 5701 South Santa Fe Drive
                                                  Littleton, Colorado 80120

                                         TELESAT CANADA

                                         By: /s/ Jennifer Perkins and Paul Bush
                                             ---------------------------------
                                         Its: Secretary, Vice President
                                              Corporate Development
                                         Address: 1601 Telesat Court
                                                  Gloucester, Ontario Canada
                                                  K1B5P4

                                         KPCB HOLDINGS, INC., AS NOMINEE

                                         By: /s/ Russell Siegelman
                                             ---------------------------------
                                             Russell Siegelman,
                                             Senior Vice President
                                         Address: 2750 Sand Hill Road
                                                  Menlo Park, CA 94025

                                         DIRECTCOM NETWORKS, INC.

                                         By: /s/ Toby DeWeese
                                             ---------------------------------
                                         Its: Vice President
                                         Address: 7140 South Lewis Avenue
                                                  Tulsa, Oklahoma 74136-5422

[SIGNATURE PAGE TO AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   35

                                         TRW, INC.

                                         By: /s/ Wesley Bush
                                             ---------------------------------
                                         Its: Vice President
                                         Address:
                                                 -----------------------------

                                                 -----------------------------

                                         BROBECK, PHLEGER & HARRISON LLP

                                         By:
                                         Its: /s/ MICHAEL S. KAGNOFF
                                              --------------------------------
                                         Address:
                                                 -----------------------------

                                                 -----------------------------

                                         SALOMON SMITH BARNEY AS IRA ROLLOVER
                                         CUST FOR JOHN A. DENNISTON

                                         By: /s/ WILLIAM STEPANEK
                                             ---------------------------------
                                         Its: Assistant Branch Manager
                                         Address:
                                                 -----------------------------

                                                 -----------------------------

                                         /s/ John A. Denniston
                                         -------------------------------------
                                         JOHN A. DENNISTON
                                         Address:
                                                 -----------------------------

                                                 -----------------------------

                                         LIBERTY KASTR CORP.

                                         By:
                                            ----------------------------------
                                         Its:
                                             ---------------------------------
                                         Address: 9197 South Peoria Street
                                                  Englewood, Colorado  80112

[SIGNATURE PAGE TO AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   36

                                         RUSSELL SIEGELMAN, AS VOTING TRUSTEE,
                                         UNDER VOTING TRUST AGREEMENT, DATED AS
                                         OF MAY 26, 1999:

                                         /s/ Russell Siegelman
                                         -------------------------------------
                                         Russell Siegelman
                                         Address: 2750 Sand Hill Road
                                                  Menlo Park, CA 94025

DAVID M. DRUCKER                         PENNY S. DRUCKER

/s/ David M. Drucker                     /s/ Penny S. Drucker
-----------------------------------      -------------------------------------
David M. Drucker                         Penny S. Drucker
Address: 9137 E. Mineral Cir. #140       Address: 9137 E. Mineral Cir., #140
         Englewood, CO  80112                     Englewood, CO  80112

SEGALOFF GROUP, LLC                      JOSHUA M. DAVID TRUST

By: /s/ Walter S. Segaloff               By: /s/ E.D. David
   --------------------------------         ----------------------------------
   Walter S. Segaloff                       E.D. David, Trustee
Address: 10858 Warwick Blvd., Ste. A        Address: 301 Hiden Blvd., #200
         Newport News, VA  23601                     Newport News, VA  23606

SEGALOFF AND SONS JOINT VENTURE          GREGORY B. DAVID TRUST

By: /s/ Walter S. Segaloff               By: /s/ E.D. David
   --------------------------------         ----------------------------------
   Walter S. Segaloff                       E.D. David, Trustee
Address: 10858 Warwick Blvd., Ste. A     Address: 301 Hiden Blvd., #200
         Newport News, VA  23601                  Newport News, VA  23606

HASHEM PROVIDES, LLC                     SEGALOFF FAMILY, L.P.

                                         By: WSS GP, Inc., general partner

By: /s/ E.D. David                       By: /s/ Walter S. Segaloff
   --------------------------------         ----------------------------------
   E.D. David, Manager                      Walter S. Segaloff
Address: 301 Hiden Blvd., #200           Address: 10858 Warwick Blvd., Ste. A
         Newport News, VA  23606                  Newport News, VA  23601

[SIGNATURE PAGE TO AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   37

PETER M. SEGALOFF FAMILY TRUST           WALTER S. SEGALOFF TRUSTEE OF THE
                                         WALTER S. SEGALOFF REVOCABLE TRUST

By: /s/ E.D. David                       By: /s/ Walter S. Segaloff
   --------------------------------         ----------------------------------
   E.D. David, Trustee                      Walter S. Segaloff
Address: 301 Hiden Blvd., #200           Address: 10858 Warwick Blvd., Ste. A
         Newport News, VA  23661                  Newport News, VA  23601

DAVID S. SEGALOFF FAMILY TRUST           E.D. DAVID, INDIVIDUALLY

By: /s/ E.D. David                       /s/ E.D. David
   --------------------------------      -------------------------------------
   E.D. David, Trustee                   E.D. David, individually
Address: 301 Hiden Blvd, #200            Address: 300 Hiden Blvd., #200
         Newport News, VA  23606                  Newport News, VA, 23606

J. WILLIAM DAVID TRUST

BY: /s/ E.D. David
   --------------------------------
   E.D. David, Trustee
Address: 301 Hiden Blvd., #200
         Newport News, VA  23606

[SIGNATURE PAGE TO AMENDMENT TO AMENDED AND RESTATED INVESTOR RIGHTS AGREEMENT]

<PAGE>   38

BRIAN DEEVY, INDIVIDUALLY

By: /s/ Brian Deevey
   --------------------------------
   Brian Deevy

ROBERT ALLISON                           BRAD R. BUSSE

By: /s/ Brian Deevey                     By: /s/ Brian Deevey
   --------------------------------         ----------------------------------
   Brian Deevy, Attorney-in-Fact            Brian Deevy, Attorney-in-Fact
Address:                                 Address:
        ---------------------------              -----------------------------

        ---------------------------              -----------------------------

BEVERLY A. DAVID                         TIMOTHY DAVID

By: /s/ Brian Deevey                     By: /s/ Brian Deevey
   --------------------------------         ----------------------------------
   Brian Deevy, Attorney-in-Fact            Brian Deevy, Attorney-in-Fact
Address:                                 Address:
        ---------------------------              -----------------------------

        ---------------------------              -----------------------------

RHODES FAMILY TRUST                      LAZZERI FAMILY TRUST

By: /s/ Brian Deevey                     By: /s/ Brian Deevey
   --------------------------------         ----------------------------------
   Brian Deevy, Attorney-in-Fact            Brian Deevy, Attorney-in-Fact
Address:                                 Address:
        ---------------------------              -----------------------------

        ---------------------------              -----------------------------

DAVID A. TOLLIVER

By: /s/ Brian Deevey
   --------------------------------
   Brian Deevy, Attorney-in-Fact
Address:
        ---------------------------

        ---------------------------

 [SIGNATURE PAGE TO AMENDMENT TO SECOND AMENDED AND RESTATED VOTING AGREEMENT]<PAGE>   1
                                                                    EXHIBIT 10.3

                      KASTAR SATELLITE COMMUNICATIONS CORP.

                            SERIES A AND B PREFERRED

                            STOCK PURCHASE AGREEMENT

                                  MAY 26, 1999

<PAGE>   2

                                TABLE OF CONTENTS
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                           <C>
1.       Purchase and Sale of Stock............................................................1
         1.1      Sale and Issuance of Series A and B Preferred Stock..........................1
         1.2      First and Second Closings....................................................1

2.       Representations and Warranties of the Company.........................................2
         2.1      Organization, Good Standing and Qualification................................2
         2.2      Capitalization and Voting Rights.............................................2
         2.3      Subsidiaries.................................................................3
         2.4      Authorization................................................................4
         2.5      Valid Issuance of Preferred and Common Stock.................................4
         2.6      Governmental Consents........................................................5
         2.7      Offering.....................................................................5
         2.8      Litigation...................................................................5
         2.9      Proprietary Information Agreements...........................................6
         2.10     Patents and Trademarks.......................................................6
         2.11     Compliance with Other Instruments............................................6
         2.12     Agreements; Action...........................................................7
         2.13     Related-Party Transactions...................................................8
         2.14     Financial Statements.........................................................8
         2.15     Changes......................................................................9
         2.16     Tax Returns..................................................................9
         2.17     Permits.....................................................................10
         2.18     Environmental and Safety Laws...............................................10
         2.19     Disclosure..................................................................10
         2.20     Modification of FCC Authorization...........................................10
         2.21     Business Plan...............................................................11
         2.22     Registration Rights.........................................................11
         2.23     Corporate Documents; Minute Books...........................................11
         2.24     Title to Property and Assets................................................11
         2.25     Insurance...................................................................12
         2.26     Employee Benefit Plans......................................................12
         2.27     Labor Agreements and Actions................................................12
         2.28     Net Operating Loss Carryforward.............................................12
         2.29     Qualified Small Business Stock..............................................12
         2.30     Year 2000 Compliance........................................................13
         2.31     Eligibility to Hold Preferred Stock.........................................13

3.       Representations and Warranties of the Investors......................................13
         3.1      Authorization...............................................................13
         3.2      Purchase Entirely for Own Account...........................................14
         3.3      Disclosure of Information...................................................14
         3.4      Investment Experience.......................................................14
         3.5      Accredited Investor.........................................................14
</TABLE>

                                       i.
<PAGE>   3

                          TABLE OF CONTENTS (Continued)
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                           <C>
         3.6      Restricted Securities.......................................................14
         3.7      Further Limitations on Disposition..........................................15
         3.8      Legends.....................................................................15
         3.9      Tax Advisors................................................................16
         3.10     Eligibility to Hold Preferred Stock.........................................16

4.       California Commissioner of Corporations..............................................16
         4.1      Corporate Securities Law....................................................16

5.       Conditions of Investor's Obligations at Closings.....................................16
         5.1      First Closing Conditions....................................................16
         5.2      Second Closing Conditions...................................................19

6.       Conditions of the Company's Obligations at Closings..................................20
         6.1      Representations and Warranties..............................................20
         6.2      Payment of Purchase Price...................................................20
         6.3      Qualifications..............................................................20
         6.4      Investor Rights Agreement...................................................20
         6.5      Voting Agreement............................................................20
         6.6      Right of First Offer Agreement..............................................21
         6.7      Televerde Voting Trust Agreement............................................21
         6.8      Kleiner Voting Trust.  Kleiner shall have executed and delivered the
                  Kleiner Voting Trust in substantially the form attached as Exhibit N........21

7.       Indemnification......................................................................21

8.       Miscellaneous........................................................................21
         8.1      Survival....................................................................21
         8.2      Successors and Assigns......................................................22
         8.3      Governing Law...............................................................22
         8.4      Titles and Subtitles........................................................22
         8.5      Notices.....................................................................22
         8.6      Finder's Fee................................................................22
         8.7      Expenses....................................................................22
         8.8      Amendments and Waivers......................................................23
         8.9      Effect of Amendment or Waiver...............................................23
         8.10     Severability................................................................23
         8.11     Aggregation of Stock........................................................23
         8.12     Entire Agreement............................................................23
         8.13     Counterparts................................................................24
         8.14     Attorneys' Fees.............................................................24

SCHEDULE A        Schedule of Investors
SCHEDULE B        Schedule of Exceptions
EXHIBIT A         Certificate of Incorporation
</TABLE>

                                       ii.
<PAGE>   4

                          TABLE OF CONTENTS (Continued)
<TABLE>
<CAPTION>
                                                                                             Page
                                                                                             ----
<S>                                                                                          <C>
EXHIBIT B         Investor Rights Agreement
EXHIBIT C         List of Stockholders
EXHIBIT D         Opinion of Counsel for the Company for First Closing
                  (Brownstein, Hyatt & Farber, P.C.)
EXHIBIT E         Opinion of Counsel for the Company for First Closing
                  (Rini, Coran & Lancellotta, P.C.)
EXHIBIT F         Opinion of Counsel for the Company for First Closing
                  (Harris, Wiltshire & Grannis LLP)
EXHIBIT G         Voting Agreement
EXHIBIT H         Right of First Offer Agreement
EXHIBIT I         Televerde Voting Trust Agreement
EXHIBIT J         Stock Purchase Agreement (Televerde Sale)
EXHIBIT K         Form of Indemnification Agreement
EXHIBIT L         Opinion of Counsel for the Company for Second Closing
                  (Brownstein, Hyatt & Farber, P.C.)
EXHIBIT M         Opinion of Counsel for the Company for Second Closing
                  (Rini, Coran & Lancellotta, P.C.)
EXHIBIT N         Kleiner Voting Trust
</TABLE>

                                      iii.
<PAGE>   5

                SERIES A AND B PREFERRED STOCK PURCHASE AGREEMENT

                  THIS SERIES A AND B PREFERRED STOCK PURCHASE AGREEMENT is made
on the 26th day of May, 1999, by and among KaSTAR Satellite Communications
Corp., a Delaware corporation (the "Company"), and the investors listed on
Schedule A hereto (each, an "Investor" and collectively, the "Investors").

                  THE PARTIES HEREBY AGREE AS FOLLOWS:

                  1. Purchase and Sale of Stock.

                  1.1 Sale and Issuance of Series A and B Preferred Stock.

                  (a) Subject to the terms and conditions of this Agreement,
each Investor listed under the heading "First Closing" on Schedule A hereto
agrees, severally, to purchase at the First Closing and the Company agrees to
sell and issue to each Investor at the First Closing, that number of shares of
the Company's Series A Preferred Stock set forth opposite each Investor's name
on Schedule A hereto for the purchase price set forth thereon.

                  (b) Subject to the terms and conditions of this Agreement,
each Investor listed under the heading "Second Closing" on Schedule A hereto
agrees, severally, to purchase at the Second Closing and the Company agrees to
sell and issue to each Investor at the Second Closing, that number of shares of
the Company's Series B Preferred Stock set forth opposite each Investor's name
on Schedule A hereto for the purchase price set forth thereon.

                  (c) In connection with the transactions contemplated hereby,
KPCB Holdings, Inc. ("Kleiner") is purchasing 8,328,750 shares of the Company's
Series A Preferred Stock from Televerde Communications L.P. ("Televerde")
pursuant to that certain Stock Purchase Agreement (the "Televerde Purchase
Agreement") dated as of the date hereof among Televerde, Kleiner, David Drucker
and Walter Segaloff. In order to induce Kleiner to consummate the transactions
contemplated by this Agreement and the Televerde Purchase Agreement, the Company
has agreed that the representations in Section 2 below are being made to Kleiner
both in connection with the transactions contemplated by this Agreement and the
Televerde Purchase Agreement.

                  1.2 First and Second Closings.

                  (a) The purchase and sale of the Series A Preferred Stock to
the Investors listed under the heading "First Closing" shall take place at the
offices of Brobeck, Phleger & Harrison LLP, 550 West "C" Street, Suite 1200, San
Diego, California 92101, at 10:00 A.M., on May 26, 1999, or at such other time
and place as the Company and Investors acquiring in the aggregate more than half
the shares of Series A Preferred Stock sold pursuant hereto mutually agree upon
orally or in writing (which time and place are designated as the " First
Closing").

                  (b) The purchase and sale of the Series B Preferred Stock to
the Investors listed under the heading "Second Closing" shall take place at the
offices of

<PAGE>   6
Brobeck, Phleger & Harrison LLP, 550 West "C" Street, Suite 1200, San Diego,
California 92101, at 10:00 A.M. on a date no later than ten (10) days following
the date on which (i) the Company receives the Federal Communications
Commission's (the "FCC") approval of the transfer of control of the Company from
Televerde to the Company's stockholders generally (in form and substance
reasonably acceptable to the Investors and special counsel for the Investors)
(the "FCC Approval") and (ii) the conditions set forth in Section 5.2 are
satisfied, or at such other time and place as the Company and Investors
acquiring the shares of Series B Preferred Stock sold pursuant hereto mutually
agree upon orally or in writing (which time and place are designated as the
"Second Closing"). The Company shall use reasonable efforts to obtain the FCC
Approval promptly after the First Closing.

                  (c) At each Closing, the Company shall deliver to each
Investor a certificate representing the Series A Preferred Stock or Series B
Preferred Stock, as the case may be, that such Investor is purchasing against
payment of the purchase price therefor by check or wire transfer.

                  2. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Investor (in connection with both the
transactions contemplated hereby and by the Televerde Purchase Agreement) that,
except as set forth on a Schedule of Exceptions (the "Schedule of Exceptions")
furnished to each Investor and special counsel for the Investors prior to
execution hereof and attached hereto as Schedule B, which exceptions shall be
deemed to be representations and warranties as if made hereunder:

                  2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Company is duly qualified to transact
business and is in good standing in each jurisdiction in which the failure to so
qualify would have a material adverse effect on its business or properties. The
Company has provided special counsel to the Investors a certified copy of the
Company's Certificate of Incorporation (the "Certificate"), including all
amendments thereto, as in effect on the date hereof.

                  2.2 Capitalization and Voting Rights. The authorized capital
of the Company, after giving effect to the First Closing, consists of:

                  (a) Preferred Stock. 81,116,645 shares of Preferred Stock, par
value $.001 (the "Preferred Stock"), of which (i) 79,277,580 shares have been
designated Series A Preferred Stock (the "Series A Preferred Stock"), of which
72,043,500 shares are issued and outstanding, 8,328,750 shares of which will be
sold pursuant to the Televerde Purchase Agreement and up to 6,921,250 shares of
which will be sold pursuant to this Agreement at the First Closing and (ii)
1,839,065 shares have been designated Series B Preferred Stock (the "Series B
Preferred Stock"), up to 835,625 shares of which will be sold pursuant to this
Agreement at the Second Closing. The rights, privileges and preferences of the
Preferred Stock will be as stated in the Company's Certificate.

                  (b) Common Stock. 95,431,348 shares of common stock, par value
$.001 ("Common Stock"), of which no shares are issued and outstanding.

                                       2
<PAGE>   7

                  (c) The outstanding shares of Series A Preferred Stock are
owned by the stockholders and in the numbers specified in Exhibit C hereto
immediately prior to the First Closing.

                  (d) The outstanding shares of Series A Preferred Stock are all
duly and validly authorized and issued, fully paid and nonassessable, and were
issued in compliance with all applicable state and federal laws concerning the
issuance of securities.

                  (e) Except for (i) the conversion privileges of the Series A
Preferred Stock, (ii) the right of certain Investors to acquire shares of Series
B Preferred Stock hereunder and the conversion privileges of the Series B
Preferred Stock, (iii) the rights provided in Section 4 of that certain Investor
Rights Agreement dated as of the date hereof among the Company and the Investors
listed on Exhibit A thereto (the "Investor Rights Agreement") and (iv) currently
outstanding options to purchase 7,234,079 shares of Series A Preferred Stock
granted to employees pursuant to the Company's Stock Option Plan (the "Option
Plan"), there are not outstanding any options, warrants, rights (including
conversion or preemptive rights) or agreements for the purchase or acquisition
from the Company of any shares of its capital stock. In addition to the
aforementioned options, the Company has reserved an additional 14,314,703 shares
of its Common Stock for purchase upon exercise of options to be granted in the
future under the Option Plan. The Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to any security
or by a director of the Company.

                  2.3 Subsidiaries. (a) The Schedule of Exceptions sets forth
(i) the name of each corporation, partnership, limited liability company or
other entity in which the company has, directly or indirectly, an equity
interest representing 50% or more of the capital stock thereof or other equity
interests therein (individually, a "Subsidiary" and, collectively, the
"Subsidiaries"); (ii) the number and type of outstanding equity securities of
each Subsidiary and a list of the holders thereof; (iii) the jurisdiction of
organization of each Subsidiary; (iv) the names of the officers and directors,
or managers and members, of each Subsidiary; and (v) the jurisdictions in which
each Subsidiary is qualified or holds licenses to do business as a foreign
corporation.

                  (b) Each Subsidiary is duly organized, validly existing and in
good standing under the laws of its state of organization. Each Subsidiary is
duly qualified to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a material adverse effect on its
business or properties. The Company has provided special counsel to the
Investors with a certified copy of the charter documents of each subsidiary,
including all amendments thereto, as in effect on the date hereof.

                  (c) The Company owns 100% of the outstanding equity interests
of each of KaSTAR 109.2 Acquisition, LLC, a Colorado limited liability company
and KaSTAR 73 Acquisition, LLC, a Colorado limited liability company.

                  2.4 Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this

                                       3
<PAGE>   8

Agreement, the Investor Rights Agreement, that certain Voting Agreement dated as
of the date hereof among the Company, Televerde, DirectCom Networks, Inc.
("DirectCom") and Kleiner (the "Voting Agreement"), that certain Voting Trust
Agreement dated as of the date hereof among the Company, Russell Siegelman and
Televerde (the "Televerde Voting Trust Agreement") and that certain Right of
First Offer and Co-Sale Agreement dated as of the date hereof among the Company,
Kleiner, Televerde and DirectCom (the "Right of First Offer Agreement"), the
performance of all obligations of the Company hereunder and thereunder, and the
authorization (or reservation for issuance), sale and issuance of the Series A
Preferred Stock and Series B Preferred Stock being sold hereunder and the Common
Stock issuable upon conversion of the Series A Preferred Stock and Series B
Preferred Stock has been taken or will be taken prior to the First Closing. This
Agreement, the Investor Rights Agreement, the Voting Agreement, the Televerde
Voting Trust Agreement and the Right of First Offer Agreement constitute valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) to the extent the indemnification provisions
contained in the Investor Rights Agreement may be limited by applicable federal
or state securities laws.

                  2.5 Valid Issuance of Preferred and Common Stock. The Series A
Preferred Stock and Series B Preferred Stock that is being purchased by the
Investors hereunder, when issued, sold and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and will be free of restrictions on
transfer, other than restrictions on transfer under this Agreement and the
Investor Rights Agreement and under applicable state and federal securities
laws. The Series A Preferred Stock that is being purchased by Kleiner under the
Televerde Purchase Agreement, when issued, sold and delivered in accordance with
the terms thereof for the consideration expressed therein will be duly and
validly issued, fully paid and nonassessable and, to the knowledge of the
Company, will be free of restrictions on transfer, other than restrictions on
transfer under the Televerde Purchase Agreement and the Investor Rights
Agreement and under applicable state and federal securities laws. The Common
Stock issuable upon conversion of the Series A Preferred Stock and the Series B
Preferred Stock purchased under this Agreement has been duly and validly
reserved for issuance and, upon issuance in accordance with the terms of the
Certificate, will be duly and validly issued, fully paid and nonassessable and
will be free of restrictions on transfer, other than restrictions on transfer
under this Agreement and the Investor Rights Agreement and under applicable
state and federal securities laws. The Common Stock issuable upon conversion of
the Series A Preferred Stock purchased under the Televerde Agreement has been
duly and validly reserved for issuance and, upon issuance in accordance with the
terms of the Certificate, will be duly and validly issued, fully paid and
nonassessable and, to the knowledge of the Company, will be free of restrictions
on transfer, other than restrictions on transfer under the Televerde Purchase
Agreement and the Investor Rights Agreement and under applicable state and
federal securities laws.

                  2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any foreign, federal, state or local governmental authority on the
part of the Company or any Subsidiary is required in connection with the
consummation of the transactions contemplated by this Agreement, except

                                       4
<PAGE>   9

for: (i) the filing of a Notice of Transaction pursuant to Section 25102(f) of
the California Corporate Securities Law of 1968, as amended, and the rules
thereunder (the "Law"), which filing will be effected within the time prescribed
by law, (ii) such other filings required pursuant to applicable federal and
state securities laws and blue sky laws, which filings will be effected within
the required statutory period and (iii) the FCC Approval prior to the Second
Closing as contemplated by Section 1.2(b).

                  2.7 Offering. Subject in part to the truth and accuracy of
each Investor's representations set forth in Section 3 of this Agreement, the
offer, sale and issuance of the Series A Preferred Stock and Series B Preferred
Stock as contemplated by this Agreement are exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), and the
qualification or registration requirements of the Law or other applicable blue
sky laws. Neither the Company nor any authorized agent acting on its behalf will
take any action hereafter that would cause the loss of such exemptions.

                  2.8 Litigation. There is no action, suit, proceeding or
investigation pending, or to the Company's knowledge, currently threatened
against the Company or any Subsidiary that questions the validity of this
Agreement or the right of the Company to enter into such agreement or to
consummate the transactions contemplated hereby, or that might result, either
individually or in the aggregate, in any material adverse changes in the
business, assets or condition of the Company or any Subsidiary, financially or
otherwise, or any change in the current equity ownership of the Company or any
Subsidiary (other than governmental proceedings affecting the satellite industry
in general). Except for the Company's FCC authorizations and other orders of the
FCC, all of which are generally publicly available (and all of the material
provisions of which are publicly available), neither the Company nor any
Subsidiary is a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality. There is no FCC rule, regulation or order currently in effect
that, to the Company's knowledge, would result in or require a material adverse
change in the business or operations of the Company. There is no action, suit,
proceeding or investigation initiated by the Company or any Subsidiary currently
pending or that the Company or any Subsidiary intends to initiate.

                  2.9 Proprietary Information Agreements. Each employee, officer
and consultant of the Company (other than outside counsel and accountants to the
Company) or any Subsidiary has executed a Proprietary Information and Inventions
Agreement, copies of which have been provided to special counsel to the
Investors. Neither the Company nor any Subsidiary, after reasonable
investigation, is aware that any of its employees, officers or consultants are
in violation thereof, and the Company will use its reasonable efforts to prevent
any such violation.

                  2.10 Patents and Trademarks. To its knowledge, the Company and
each Subsidiary possesses all patents, patent rights, trademarks, trademark
rights, service marks, service mark rights, trade names, trade name rights and
copyrights (collectively, the "Intellectual Property") necessary for its
business without any conflict with or infringement of the valid rights of others
and the lack of which could materially and adversely affect the operations or
condition, financial or otherwise, of the Company or any Subsidiary, and neither
the Company nor any Subsidiary has received any notice of infringement upon or
conflict with the asserted rights of

                                       5
<PAGE>   10

others. The Company and each Subsidiary has a valuable body of trade secrets,
including know-how, concepts, computer programs and other technical data (the
"Proprietary Information") for the development, manufacture and sale of its
products. To its knowledge, the Company and each Subsidiary has the right to use
the Proprietary Information free and clear of any rights, liens, encumbrances or
claims of others, except that the possibility exists that other persons may have
independently developed trade secrets or technical information similar or
identical to those of the Company or any Subsidiary. Neither the Company nor any
Subsidiary is aware of any such independent development nor of any
misappropriation of its Proprietary Information. Neither the Company nor any
Subsidiary is aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her best efforts to promote
the interests of the Company or any Subsidiary or that would conflict with the
Company's or any Subsidiary's business. The Company does not believe it is or
will be necessary to utilize any inventions of any of its or any of its
Subsidiary's employees (or people it currently intends to hire) made prior to
their employment by the Company or any Subsidiary.

                  2.11 Compliance with Other Instruments. Neither the Company
nor any Subsidiary is in violation in any material respect of any provision of
its Certificate or Bylaws, or Articles of Organization or Operating Agreement,
as the case may be, nor, to its knowledge, in any material respect of any
instrument, judgment, order, writ, decree, authorization, license or contract,
statute, rule or regulation to which the Company or any Subsidiary is subject
and a violation of which would have a material adverse effect on the condition,
financial or otherwise, or operations of the Company or any Subsidiary. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby, except as provided in Section 1.2(b) in
connection with the FCC Approval, will not result in any such violation, or be
in conflict with or constitute, with or without the passage of time and giving
of notice, either a default under any such provision or an event that results in
the creation of any lien, charge or encumbrance upon any assets of the Company
or any Subsidiary or the suspension, revocation, impairment, forfeiture or
nonrenewal of any material permit, license, authorization or approval applicable
to the Company or any Subsidiary, or its business or operations or any of its
assets or properties.

                  2.12 Agreements; Action.

                  (a) Except for agreements explicitly contemplated hereby,
there are no agreements, understandings or proposed transactions between the
Company or any Subsidiary and any of its officers, directors, affiliates or any
affiliate thereof.

                  (b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company or any Subsidiary is a party or by which it is bound that may
involve (i) obligations (contingent or otherwise) of, or payments to the Company
or any Subsidiary, in excess of $10,000, other than obligations of, or payments
to, the Company or any Subsidiary arising from purchase or sale agreements
entered into in the ordinary course of business, (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from the Company or any
Subsidiary, (iii) provisions restricting or affecting the development,
manufacture or distribution of the Company's or any Subsidiary's

                                       6
<PAGE>   11

products or services, or (iv) indemnification by the Company or any Subsidiary
with respect to infringements of proprietary rights, other than indemnification
obligations arising from purchase or sale agreements entered into in the
ordinary course of business).

                  (c) Neither the Company nor any Subsidiary has (i) declared or
paid any dividends or authorized or made any distribution upon or with respect
to any class or series of its capital stock or other equity interests, (ii)
incurred any indebtedness for money borrowed or any other liabilities
individually in excess of $10,000 or, in the case of indebtedness and/or
liabilities individually less than $10,000, in excess of $50,000 in the
aggregate, (iii) made any loans or advances to any person, other than ordinary
advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than the sale of its inventory in the
ordinary course of business.

                  (d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.

                  (e) Neither the Company nor any Subsidiary has engaged in the
past three (3) months in any discussion (i) with any representative of any
corporation or corporations regarding the consolidation or merger of the Company
or any Subsidiary with or into any such corporation or corporations, (ii) with
any corporation, partnership, association or other business entity or any
individual regarding the sale, conveyance or disposition of all or substantially
all of the assets of the Company or any Subsidiary or a transaction or series of
related transactions in which more than fifty percent (50%) of the voting power
of the Company or any Subsidiary is disposed of, or (iii) regarding any other
form of acquisition, liquidation, dissolution or winding up of the Company or
any Subsidiary.

                  (f) All of the contracts, agreements and instruments set forth
on the Schedule of Exceptions pursuant to this Section 2.12 are valid, binding
and enforceable in accordance with their respective terms. The Company has
performed all material obligations required to be performed by it and is not in
default under or in breach of nor in receipt of any claim of default or breach
under any contract, agreement or instrument and the Company does not have any
present expectation or intention of not fully performing all such obligations.
No event has occurred which with the passage of time or the giving of notice or
both would result in a default, breach or event of noncompliance by the Company
under any contract, agreement or instrument. The Company has no knowledge of any
breach or anticipated breach by the other parties to any contract, agreement,
instrument or commitment.

                  (g) The special counsel to the Investors has been supplied
with a true and correct copy of each of the written instruments, plans,
contracts and agreements and an accurate description of each of the oral
arrangements, contracts and agreements that are referred to on the Schedule of
Exceptions pursuant to this Section 2.12, together with all amendments, waivers
or other changes thereto.

                                       7
<PAGE>   12

                  2.13 Related-Party Transactions. No employee, officer or
director of the Company or any Subsidiary or member of his or her immediate
family is indebted to the Company or any Subsidiary, nor is the Company or any
Subsidiary indebted (or committed to make loans or extend or guarantee credit)
to any of them. To the best of the Company's knowledge, none of such persons has
any direct or indirect ownership interest in any firm or corporation with which
the Company or any Subsidiary is affiliated or with which the Company or any
Subsidiary has a business relationship, or any firm or corporation that competes
with the Company or any Subsidiary, except that employees, officers or directors
of the Company or any Subsidiary and members of their immediate families may own
stock in publicly traded companies that may compete with the Company. No member
of the immediate family of any officer or director of the Company or any
Subsidiary is directly or indirectly interested in any material contract with
the Company or any Subsidiary.

                  2.14 Financial Statements. The Company has delivered to each
Investor its unaudited financial statements (balance sheet and statement of
operations, statement of stockholders' equity and statement of cash flows,
including notes thereto) at December 31, 1998 and for the fiscal year then
ended, and its unaudited financial statements (balance sheet and statement of
operations) as, at and for the three (3) month period ended March 31, 1999 (the
"Financial Statements"). The Financial Statements have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods indicated and with each other, except that
unaudited Financial Statements may not contain all footnotes required by
generally accepted accounting principles. The Financial Statements fairly
present the financial condition and operating results of the Company and any
Subsidiaries as of the dates, and for the periods, indicated therein, subject in
the case of unaudited Financial Statements to normal year-end audit adjustments.
Except as set forth in the Financial Statements, neither the Company nor any
Subsidiary has any material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to December
31, 1998 and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected in the Financial Statements, which, in both cases,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company or any Subsidiary. Except as disclosed in the
Financial Statements, neither the Company nor any Subsidiary is a guarantor or
indemnitor of any indebtedness of any other person, firm or corporation. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with generally accepted accounting
principles.

                  2.15 Changes. Since December 31, 1998 there has not been:

                  (a) any change in the assets, liabilities, financial condition
or operating results of the Company or any Subsidiary from that reflected in the
Financial Statements, except changes in the ordinary course of business that
have not been, in the aggregate, materially adverse;

                  (b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results or business of the Company or any Subsidiary;

                                       8
<PAGE>   13

                  (c) any waiver by the Company or any Subsidiary of a valuable
right or of a material debt owed to it;

                  (d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or any Subsidiary,
except in the ordinary course of business and that is not material to the
assets, properties, financial condition, operating results or business of the
Company or any Subsidiary;

                  (e) any material change or amendment to a material contract or
arrangement by which the Company or any Subsidiary or any of its assets or
properties is bound or subject;

                  (f) any material change in any compensation arrangement or
agreement with any employee; or

                  (g) any agreement or commitment by the Company or any
Subsidiary to do any of the things described in this Section 2.15.

                  2.16 Tax Returns. The Company and each Subsidiary have timely
filed all tax returns (federal, state and local) required to be filed by it and
all Taxes (as defined below), assessments or other governmental charges imposed
upon the Company or any Subsidiary, or upon any of the assets, income or
franchises of the Company or any Subsidiary, have been timely paid or, if not
yet payable, are adequately accrued on the Company's books and records. Neither
the Company nor any Subsidiary has been advised that any of its returns have
been or are being audited. "Tax" or "Taxes" means any federal, state, local or
foreign income, gross receipts, license, payroll, employment, excise, severance,
stamp, occupation, premium, property, windfall, profits, environmental, customs,
capital stock, franchise, employees' income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative or add-on minimum or
other similar tax, governmental fee, governmental assessment or governmental
charge of any kind whatsoever, including any interest, penalties or addition to
Tax or additional amounts with respect to the foregoing.

                  2.17 Permits. The Company and each Subsidiary has all
franchises, permits, licenses, certifications, authorizations and any similar
authority (including, without limitation, all authorizations from the FCC)
necessary for the conduct of its business, the lack of which could materially
and adversely affect the business, properties or financial condition of the
Company or any Subsidiary (other than additional authorizations described in the
order granting the Company's FCC authorizations and that are the subject of
pending rule-making proceedings affecting the satellite industry in general).
Neither the Company nor any Subsidiary is in default in any material respect
under any of such franchises, permits, licenses, certifications, authorizations
or other similar authority. The Company and each Subsidiary has timely filed all
reports, tariffs and other documents required to be filed with the FCC as a
condition of the Company's authorization to construct, launch and operate
geostationary Ka-band satellites, and the FCC has not established for the
Company or any Subsidiary an implementation milestone schedule concerning the
construction, launch or operation of the Company's proposed satellites or other
condition or requirement of such authorization. There is no FCC rule or
contractual provision by which the Company is bound, compliance with which is
required as of the date

                                       9
<PAGE>   14

hereof, that materially jeopardizes the Company's planned launch for the
Company's proposed satellites.

                  2.18 Environmental and Safety Laws. To its knowledge, neither
the Company nor any Subsidiary is in violation of any applicable statute, law or
regulation relating to the environment or occupational health and safety, and to
its knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law or regulation.

                  2.19 Disclosure. The Company has fully provided each Investor
with all the information that such Investor has requested for deciding whether
to purchase the Series A Preferred Stock and Series B Preferred Stock and all
information that the Company believes is reasonably necessary to enable such
Investor to make such decision. Neither this Agreement (including all the
exhibits and schedules hereto) nor any other statements or certificates made or
delivered in connection herewith, taken as a whole, contains any untrue
statement of a material fact or omits to state a material fact necessary to make
the statements herein or therein not misleading in light of the circumstances
under which they were made.

                  2.20 Modification of FCC Authorization. No modification or
amendment of, or other change in, the Company's FCC authorization is necessary
for the Company to provide the communications services set forth in the Business
Plan (defined in Section 2.21). The absence of any modification or amendment of,
or other change in, the Company's FCC authorization will not result in or
require a material adverse change in the business or operations of the Company.

                  2.21 Business Plan. The Business Plan dated April 1999,
previously delivered to each Investor (the "Business Plan") has been prepared in
good faith by the Company and, taken as a whole, does not, to the Company's
knowledge, contain any untrue statement of a material fact nor does it omit to
state a material fact necessary to make the statements made therein not
misleading, except that with respect to projections contained in the Business
Plan, the Company represents only that such projections were prepared in good
faith and that the Company reasonably believes there is a reasonable basis for
such projections.

                  2.22 Registration Rights. Except as provided in the Investor
Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.

                  2.23 Corporate Documents; Minute Books. Except for amendments
necessary to satisfy representations and warranties or conditions contained
herein (the forms of which amendments have been approved by the Investors), the
Certificate and Bylaws of the Company, and the Articles of Organization and
Operating Agreement of each Subsidiary, are in the form previously provided to
special counsel for the Investors. The minute books of the Company provided to
special counsel to the Investors contain a complete summary of all meetings of
directors and stockholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material respects,
and the records of each Subsidiary provided to special counsel for the Investors
contain a complete summary of all meetings of any managers and members since the
time of organization and reflect all transactions referred to in such records
accurately in all material respects.

                                       10
<PAGE>   15

                  2.24 Title to Property and Assets. The property and assets of
the Company and each Subsidiary are owned by the Company or the Subsidiary, as
the case may be, free and clear of all mortgages, liens, loans and encumbrances,
except (i) as reflected in the Financial Statements, (ii) for statutory liens
for the payment of current taxes that are not yet delinquent, (iii) for liens,
encumbrances and security interests that arise in the ordinary course of
business and minor defects in title, none of which, individually or in the
aggregate, materially impair the Company's or any Subsidiary's ownership or use
of such property or assets and (iv) that the authorizations granted by the FCC
to the Company to construct, launch and operate Ka-band geostationary satellites
at 109.2 W.L. and 73 W.L. do not confer upon the Company any property rights in
such orbital locations or spectrum frequencies but do grant the Company
authority to use such orbital locations to the full extent granted by the
authorizations. With respect to the property and assets it leases, the Company
and each Subsidiary is in material compliance with such leases and, to its
knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances, subject to clauses (i)-(iii).

                  2.25 Insurance. The Company has fire and casualty insurance
policies with such coverages in amounts (subject to reasonable deductibles)
customary for companies similarly situated.

                  2.26 Employee Benefit Plans. Neither the Company nor any
Subsidiary has any Employee Benefit Plan as defined in the Employee Retirement
Income Security Act of 1974.

                  2.27 Labor Agreements and Actions. Neither the Company nor any
Subsidiary is bound by or subject to (and none of its assets or properties is
bound by or subject to) any written or oral, express or implied, contract,
commitment or arrangement with any labor union, and no labor union has requested
or, to the Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company or any Subsidiary. There is no strike
or other labor dispute involving the Company or any Subsidiary pending, or to
the Company's knowledge, threatened, that could have a material adverse effect
on the assets, properties, financial condition, operating results or business of
the Company or any Subsidiary, nor is the Company aware of any labor
organization activity involving its employees. The Company is not aware that any
officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company or any Subsidiary, nor does the
Company or any Subsidiary have a present intention to terminate the employment
of any of the foregoing. The employment of each officer and employee of the
Company or any Subsidiary is terminable at the will of the Company or the
Subsidiary, as the case may be. Neither the Company nor any Subsidiary is a
party to or bound by any currently effective employment contract, deferred
compensation agreement, bonus plan, incentive plan, profit sharing plan,
retirement agreement or other employee compensation agreement. To its knowledge,
the Company and each Subsidiary has complied in all material respects with all
applicable state and federal equal employment opportunity and other laws related
to employment.

                  2.28 Net Operating Loss Carryforward. The information
contained in the Schedule of Exceptions or otherwise provided to counsel for the
Investors regarding the application of Section 382 of the Code to the Company's
federal net operating loss carryforward is true and correct to the Company's
knowledge.

                                       11
<PAGE>   16

                  2.29 Qualified Small Business Stock. As of the Closing, the
Series A Preferred Stock will meet each of the requirements for qualification as
"qualified small business stock" within the meaning of Section 1202 of the Code.

                  2.30 Year 2000 Compliance. To its knowledge, all of the
Company's and any Subsidiary's internal computer systems are Year 2000
Compliant, except that neither the Company nor any Subsidiary makes such
representation with respect to off-the-shelf software that is used in the
Company's or any Subsidiary's internal computer systems the failure or
malfunctioning of which would not have a material adverse effect on the Company
or any Subsidiary. To its knowledge, neither the Company nor any Subsidiary is
relying on the products or services of any third party whose systems are not
Year 2000 Compliant where the failure to so comply would reasonably be expected
to have a material adverse effect on the Company or any Subsidiary. Except as
set forth in the Schedule of Exceptions, neither the Company nor any Subsidiary
has made any other representations or warranties that any product or service
sold, licensed, rendered or otherwise provided by the Company or any Subsidiary
is Year 2000 Compliant. For purposes of this Agreement, "Year 2000 Compliant"
shall mean that such products and data and information systems and any such
data, information or other files or software it uses, individually and in
combination, completely and accurately record, store, process, calculate and
present data involving dates before, on or after January 1, 2000; specifically:
(i) no value for a current date will cause any interruption in operation; (ii)
date-based functionality will behave consistently when dealing with dates
before, on or after January 1, 2000; (iii) no abnormal endings or incorrect
results will be produced when working with dates before, on or after January 1,
2000; (iv) in all interfaces and data storage, the century will be specified
explicitly and will be unambiguously derived; and (v) year 2000 will be
recognized as a leap year.

                  2.31 Eligibility to Hold Preferred Stock. The Company is not
aware of any fact which, upon consummation of the transactions contemplated
hereby, would: (a) make any of its current stockholders ineligible or
unqualified to hold shares of the Company's Series A Preferred Stock under any
material statute, law, rule, regulation, instrument, order, judgment, writ,
decree or contract, including but not limited to the Communications Act of 1934,
as amended, and the rules and regulations of the FCC (other than the FCC
Approval required in connection with the Second Closing, as contemplated by
Section 1.2(b)); or (b) render the Company ineligible or unqualified to hold the
authorizations granted to it by the FCC or, in the Company's reasonable
judgment, jeopardize the Company's ability to hold such authorizations as a
result of foreign ownership, criminal convictions or other ground for
forfeiture, cancellation or revocation under the rules and regulations of the
FCC or the imposition of a monetary forfeiture.

                  3. Representations and Warranties of the Investors. Each
Investor hereby represents, warrants and covenants that:

                  3.1 Authorization. Such Investor has full power and authority
to enter into this Agreement, the Investor Rights Agreement, the Voting
Agreement and the Right of First Offer Agreement and each such agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms.

                                       12
<PAGE>   17

                  3.2 Purchase Entirely for Own Account. This Agreement is made
with such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Series A Preferred Stock and Series B Preferred Stock
to be received by such Investor and the Common Stock issuable upon conversion
thereof (collectively, the "Securities") will be acquired for investment for
such Investor's own account, not as a nominee or agent, and not with a view to
the resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to any of the Securities.

                  3.3 Disclosure of Information. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series A Preferred Stock and Series B Preferred Stock.
Such Investor further represents that it has had an opportunity to ask questions
and receive answers from the Company regarding the terms and conditions of the
offering of the Series A Preferred Stock and Series B Preferred Stock and the
business, properties, prospects and financial condition of the Company. Except
to the extent that an Investor has actual knowledge that any representations or
warranties of the Company are untrue, the foregoing does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of such Investor to rely thereon.

                  3.4 Investment Experience. Such Investor is an investor in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series A
Preferred Stock and Series B Preferred Stock. If other than an individual, such
Investor also represents it has not been organized for the purpose of acquiring
the Series A Preferred Stock and Series B Preferred Stock.

                  3.5 Accredited Investor. Such Investor is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.

                  3.6 Restricted Securities. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Series A Preferred Stock and Series B
Preferred Stock (or the Common Stock issued on conversion thereof) or an
available exemption from registration under the Act, the Series A Preferred
Stock and Series B Preferred Stock (and any Common Stock issued on conversion
thereof) must be held indefinitely. In this connection, such Investor represents
that it is familiar with SEC Rule 144, as presently in effect, and understands
the resale limitations imposed thereby and by the Act, including without
limitation, the fact that the Investors may not be able to sell the Series A
Preferred Stock and Series B Preferred Stock (or the Common Stock issued on
conversion thereof) pursuant to Rule 144 unless current

                                       13
<PAGE>   18

information about the Company is available to the public. Such information is
not now available and the Company has no present plans to make such information
available.

                  3.7 Further Limitations on Disposition. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 and the Investor Rights Agreement, and:

                  (a) There is then in effect a registration statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or

                  (b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act.

                  (c) Notwithstanding the provisions of subsections (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by an Investor that is a partnership to a partner of such
partnership or a retired partner of such partnership who retires after the date
hereof, or to the estate of any such partner or retired partner or the transfer
by gift, will or intestate succession of any partner to his or her spouse or to
the siblings, lineal descendants or ancestors of such partner or his or her
spouse, if the transferee agrees in writing to be subject to the terms hereof to
the same extent as if he or she were an original Investor hereunder.

                  3.8 Legends. It is understood that the certificates evidencing
the Securities may bear the following legend:

                  "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."

                  3.9 Tax Advisors. Such Investor has reviewed with such
Investor's own tax advisors the federal, state and local tax consequences of
this investment, where applicable, and the transactions contemplated by this
Agreement. Each such Investor is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that each such Investor (and not the Company) shall be responsible
for such Investor's own tax liability that may arise as a result of this
investment or the transactions contemplated by this Agreement.

                  3.10 Eligibility to Hold Preferred Stock. Each Investor is not
aware of any fact which, upon consummation of the transactions contemplated
hereby, would: (a) make such Investor ineligible or unqualified to hold the
Series A Preferred Stock and/or Series B Preferred Stock under any material
statute, law, rule, regulation, instrument, order, judgment, writ, decree

                                       14
<PAGE>   19

or contract, including but not limited to the Communications Act of 1934, as
amended, and the rules and regulations of the FCC (other than the FCC Approval
required in connection with the Second Closing, as contemplated by Section
1.2(b)); or (b) render the Company ineligible or unqualified to hold the
authorizations granted to it by the FCC or, in the Investors' reasonable
judgment, jeopardize the Company's ability to hold such authorizations as a
result of foreign ownership, criminal convictions or other ground for
forfeiture, cancellation, revocation under the rules and regulations of the FCC
or the imposition of a monetary forfeiture, provided that no Investor is
required by this Section to make any representations as to the citizenship,
character or proportionate stock ownership of any other Investor.

                  4. California Commissioner of Corporations.

                  4.1 Corporate Securities Law. THE SALE OF THE SECURITIES THAT
ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER
OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES
OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO
EXEMPT.

                  5. Conditions of Investor's Obligations at Closings.

                  5.1 First Closing Conditions.

                  The obligations of each Investor under subsection 1.1(a) of
this Agreement are subject to the fulfillment on or before the First Closing of
each of the following conditions, the waiver of which shall not be effective
against any Investor who does not consent in writing thereto:

                  (a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true in all material
respects on and as of the First Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.

                  (b) Performance. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the First
Closing.

                  (c) Compliance Certificate. The President of the Company shall
deliver to each Investor at the First Closing a certificate stating that the
conditions specified in Sections 5.1(a) and 5.1(b) have been fulfilled.

                  (d) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in

                                       15
<PAGE>   20

connection with the lawful issuance and sale of the Securities pursuant to this
Agreement shall be duly obtained and effective as of the First Closing.

                  (e) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the First
Closing, and all documents incident thereto shall be reasonably satisfactory in
form and substance to Investors' special counsel, and they shall have received
all such counterpart original and certified or other copies of such documents as
they may reasonably request.

                  (f) Proprietary Information. Each employee of and consultant
(excluding outside counsel and auditors) to the Company shall have entered into
a Proprietary Information and Inventions Agreement in the form previously
provided to special counsel for the Investors.

                  (g) Bylaws. The Bylaws of the Company shall provide that the
Board of Directors of the Company shall consist of five (5) persons, which
number shall not be changed by an Amendment to the Certificate or the Bylaws
without the consent of sixty-three percent (63%) of the Series A Preferred Stock
and Series B Preferred Stock, voting together as a single class.

                  (h) Board of Directors. The Company shall have taken all
necessary corporate action such that immediately following the Closing, the
directors of the Company shall be Thomas Moore, Peter Segaloff, David Drucker,
Russell Siegelman and Peter Boylan (collectively, the "Directors").

                  (i) Opinion of Company Counsel. Each Investor shall have
received from Brownstein Hyatt & Farber, P.C., counsel for the Company, an
opinion, dated as of the First Closing, in the form attached as Exhibit D, from
Rini, Coran & Lancellotta, P.C., counsel for the Company, an opinion dated as of
the First Closing, in the form attached as Exhibit E and from Harris, Wiltshire
& Grannis LLP, counsel for the Company, an opinion dated as of the First
Closing, in the form attached as Exhibit F.

                  (j) Investor Rights Agreement. The Company, DirectCom,
Televerde and TRW, Inc. shall have executed and delivered the Investor Rights
Agreement in substantially the form attached as Exhibit B.

                  (k) Voting Agreement. The Company, Televerde and DirectCom
shall have executed and delivered the Voting Agreement in substantially the form
attached as Exhibit G.

                  (l) Right of First Offer Agreement. The Company, Televerde and
DirectCom shall have executed and delivered the Right of First Offer Agreement
in substantially the form attached as Exhibit H.

                  (m) Televerde Voting Trust Agreement. The Company and
Televerde shall have executed and delivered the Televerde Voting Trust Agreement
in substantially the form attached as Exhibit I.

                  (n) Pay-Off of DirectCom Loans. The Investors shall have
received, in form and substance satisfactory to the Investors and special
counsel for the Investors, evidence of

                                       16
<PAGE>   21

payment in full of all outstanding indebtedness owed to DirectCom by the
Company, Televerde and any affiliates of Televerde (other than David Drucker and
@Contact, LLC) and the release of all security interests arising under that
certain Security Agreement dated August 21, 1998 among the Company, DirectCom,
Televerde and certain other parties (other than security interests with respect
to David Drucker and @Contact, LLC pursuant to that certain First Amendment to
Security Agreement dated as of the date hereof).

                  (o) Televerde Stock Purchase. Televerde, David Drucker and
Walter Segaloff shall have executed and delivered that certain Stock Purchase
Agreement among Televerde, David Drucker, Walter Segaloff and the investors
listed on Schedule A thereto, in substantially the form attached as Exhibit J.

                  (p) Indemnification Agreements. The Company and each of the
Directors shall have executed and delivered Indemnification Agreements, in
substantially the form attached as Exhibit K.

                  (q) Ladybug Buy-Out. The Company shall have purchased all of
the issued and outstanding capital stock of Ladybug Mountain PCS Corp., a
Colorado corporation ("Ladybug").

                  5.2 Second Closing Conditions. The obligations of each
Investor under subsection 1.1(b) of this Agreement are subject to the
fulfillment on or before the Second Closing of each of the following conditions,
the waiver of which shall not be effective against any Investor who does not
consent in writing thereto:

                  (a) Representations and Warranties. The representations and
warranties of the Company contained in Sections 2.1, 2.4, 2.5, 2.6, 2.7, 2.11,
2.17 and 2.20 shall be true in all material respects on and as of the Second
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.

                  (b) Performance. The Company shall have performed and complied
with all agreements, obligations and conditions in all material respects
contained in this Agreement that are required to be performed or complied with
by it on or before the Second Closing.

                  (c) Compliance Certificate. The President of the Company shall
deliver to each Investor at the Second Closing a certificate stating that the
conditions specified in Sections 5.2(a) and 5.2(b) have been fulfilled.

                  (d) Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of the Second Closing.

                  (e) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Second
Closing, and all documents incident thereto shall be reasonably satisfactory in
form and substance to Investors' special counsel, and they shall have received
all such counterpart original and certified or other copies of such documents as
they may reasonably request.

                                       17
<PAGE>   22

                  (f) Opinion of Company Counsel. Each Investor shall have
received from Brownstein, Hyatt & Farber, P.C., counsel for the Company, an
opinion, dated as of the Second Closing, in the form attached as Exhibit L, and
from Rini, Coran & Lancellotta, P.C., counsel for the Company, an opinion dated
as of the Second Closing, in the form attached as Exhibit M.

                  (g) FCC Approval. Each Investor shall have received evidence
of the Company's receipt of the FCC Approval (in form and substance reasonably
acceptable to the Investors and special counsel for the Investors).

                  (h) Kleiner Voting Trust. The Company and Thomas E. Moore
shall have executed and delivered that certain Voting Trust Agreement in
substantially the form attached as Exhibit N (the "Kleiner Voting Trust").

                  6. Conditions of the Company's Obligations at Closings. The
obligations of the Company to each Investor under this Agreement are subject to
the fulfillment on or before each of the First Closing and the Second Closing,
as the case may be, of each of the following conditions by that Investor:

                  6.1 Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true in all material
respects on and as of each of the First Closing and the Second Closing, as the
case may be, with the same effect as though such representations and warranties
had been made on and as of such Closing.

                  6.2 Payment of Purchase Price. The Investors shall have
delivered the aggregate purchase price specified in Schedule A hereto with
respect to the applicable Closing.

                  6.3 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful issuance and sale
of the Securities pursuant to this Agreement shall be duly obtained and
effective as of each of the First Closing and the Second Closing, as the case
may be.

                  6.4 Investor Rights Agreement. Each Investor shall have
executed and delivered the Investor Rights Agreement in substantially the form
attached as Exhibit B.

                  6.5 Voting Agreement. Kleiner shall have executed and
delivered the Voting Agreement in substantially the form attached as Exhibit G.

                  6.6 Right of First Offer Agreement. Kleiner shall have
executed and delivered the Right of First Offer Agreement in substantially the
form attached as Exhibit H.

                  6.7 Televerde Voting Trust Agreement. Kleiner shall have
executed and delivered the Televerde Voting Trust Agreement in substantially the
form attached as Exhibit I.

                  6.8 Kleiner Voting Trust. Kleiner shall have executed and
delivered the Kleiner Voting Trust in substantially the form attached as
Exhibit N.

                                       18
<PAGE>   23

                  7. Indemnification. The Company shall indemnify, defend and
hold harmless Kleiner and its affiliates, and each of their officers, directors,
partners, employees, agents, successors and assigns from and against any and all
costs, losses, liabilities (whether known or unknown, whether asserted, or
unasserted, whether absolute or contingent, whether accrued or unaccrued,
whether liquidated or unliquidated, and whether due or to become due), damages,
lawsuits, deficiencies, claims and expenses, including without limitation,
interest, penalties, costs, attorneys' fees and all amounts paid in
investigation, defense or settlement of any of the foregoing (collectively, the
"Damages"), incurred in connection with, arising out of, resulting from or
incident to any claim or action asserted by Ladybug Mountain PCS Corp.
("Ladybug"), or by any present or former shareholder or creditor of Ladybug,
against the Company and/or Kleiner. In addition, if the Company shall make any
payment or advance any consideration to a third party that is in any way
attributable to any liabilities, debts, losses or obligations of Ladybug, then
the Company shall simultaneously pay to Kleiner an amount equal to the product
of the value of the payment or consideration advanced to the third party
multiplied by a fraction, the numerator of which is the number of Company shares
owned by Kleiner and its affiliates on such date (including all shares of Common
Stock issued or issuable upon the exercise of any outstanding warrants or
options or other securities convertible into Common Stock), and the denominator
of which is the issued and outstanding shares of the Company's capital stock on
such date (including all shares of Common Stock issued or issuable upon the
exercise of any outstanding warrants or options or other securities convertible
into Common Stock).

                  8. Miscellaneous.

                  8.1 Survival. The warranties, representations and covenants of
the Company and Investors contained in or made pursuant to this Agreement shall
survive the execution and delivery of this Agreement and each of the First
Closing and the Second Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the
Investors or the Company.

                  8.2 Successors and Assigns. Except as expressly set forth
herein, no party hereto shall assign any of its rights or obligations hereunder
without the prior written consent of each other party hereto, which consent
shall not be unreasonably withheld, conditioned or delayed. Subject to the
foregoing, the terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective successors and assigns of the parties
(including transferees of any Securities). Nothing in this Agreement, express or
implied, is intended to confer upon any party, other than the parties hereto or
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

                  8.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of Colorado as applied to agreements among
Colorado residents entered into and to be performed entirely within Colorado.

                  8.4 Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.

                                       19
<PAGE>   24

                  8.5 Notices. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (i) upon personal delivery
to the party to be notified, (ii) when sent by confirmed telex or facsimile if
sent during normal business hours of the recipient, if not, then on the next
business day; (iii) five days after having been sent by registered or certified
mail, return receipt requested, postage prepaid; or (iv) one day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
address as set forth on the signature page hereof or at such other address as
such party may designate by ten days advance written notice to the other parties
hereto.

                  8.6 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. Each Investor agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finders' fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Investor or any of its officers, partners,
employees or representatives is responsible. The Company agrees to indemnify and
hold harmless each Investor from any liability for any commission or
compensation in the nature of a finders' fee (and the costs and expenses of
defending against such liability or asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.

                  8.7 Expenses. Irrespective of whether either the First Closing
or the Second Closing is effected, the Company shall pay all costs and expenses
that it incurs with respect to the negotiation, execution, delivery and
performance of this Agreement. If the First Closing is effected, the Company
shall, at the First Closing, reimburse the reasonable fees and out of pocket
expenses of special counsel for all Investors, which in the aggregate shall not
exceed $32,500. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the Investor Rights Agreement, the Voting
Agreement, the Televerde Voting Trust Agreement, the Right of First Offer
Agreement or the Certificate, the prevailing party shall be entitled to
reasonable attorney's fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled.

                  8.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
at least two-thirds of the Common Stock not previously sold to the public that
is issued or issuable upon conversion of the Series A Preferred Stock and the
Series B Preferred Stock sold to the Investors pursuant to this Agreement. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon each holder of any securities purchased under this Agreement at the time
outstanding (including securities into which such securities are convertible),
each future holder of all such securities and the Company.

                  8.9 Effect of Amendment or Waiver. Each Investor acknowledges
that by the operation of Section 8.8 hereof the holders of two-thirds of the
Common Stock not previously sold to the public that is issued or issuable upon
conversion of the Series A Preferred Stock and Series B Preferred Stock sold to
the Investors pursuant to this Agreement will have the power to diminish or
eliminate all rights of such Investor under this Agreement.

                                       20
<PAGE>   25

                  8.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.

                  8.11 Aggregation of Stock. All shares of the Series A
Preferred Stock, Series B Preferred Stock or Common Stock, issued upon
conversion thereof held or acquired by affiliated entities or persons shall be
aggregated together for the purpose of determining the availability of any
rights under this Agreement.

                  8.12 Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.

                  8.13 Counterparts. This Agreement 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.

                  8.14 Attorneys' Fees. In the event that any dispute among the
parties to this Agreement should result in litigation, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       21
<PAGE>   26

                  IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.

                                           KASTAR SATELLITE COMMUNICATIONS CORP.

                                           By:  /s/ David M. Brown
                                                --------------------------------

                                           Its: Vice President
                                                --------------------------------

                               Address:    9137 East Mineral Circle, Suite 140
                                           Englewood, CO 80112

                                           INVESTORS:

                                           KPCB Holdings, Inc., as nominee

                                           By:  /s/ RUSSELL SIEGELMAN
                                                --------------------------------

                                           Its: Senior Vice President

                               Address:    2750 Sand Hill Road
                                           Menlo Park, CA  94025

                                           Brobeck, Phleger & Harrison LLP

                                           By:  /s/ John A. Denniston
                                                --------------------------------

                                           Its: Partner
                                                --------------------------------

                               Address:    550 West "C" Street, Suite 1300
                                           San Diego, CA 92101

      [SIGNATURE PAGE TO SERIES A AND B PREFERRED STOCK PURCHASE AGREEMENT]

                                       22
<PAGE>   27

                                           UMB Bank, Trustee of the Brobeck,
                                           Phleger & Harrison LLP Retirement
                                           Savings Plan FBO John A. Denniston

                                           By:  /s/ Dale E. McAllister
                                                --------------------------------

                                           Its: Assistant Vice President
                                                --------------------------------

                               Address:    1010 Grand Avenue, P.O. Box 417692
                                           Kansas City, MO  64141-0692

                                           /s/ John A. Denniston
                                           -------------------------------------
                                           John A. Denniston

                               Address:    550 West "C" Street, Suite 1300
                                           San Diego, CA  92101

      [SIGNATURE PAGE TO SERIES A AND B PREFERRED STOCK PURCHASE AGREEMENT]

                                       23
<PAGE>   28

                                   SCHEDULE A

                              Schedule of Investors

<TABLE>
<CAPTION>
                                           NUMBER OF SHARES      AGGREGATE PURCHASE PRICE
                                           ----------------      ------------------------
<S>                                        <C>                   <C>
FIRST CLOSING

KPCB Holdings, Inc.                            6,671,250                $6,671,250*
                                            Series A Shares

Brobeck, Phleger & Harrison LLP                 75,000                    $75,000
                                            Series A Shares

John A. Denniston                               100,000                  $100,000
                                            Series A Shares

UMB Bank, Trustee of the Brobeck,               75,000                    $75,000
Phleger & Harrison LLP Retirement           Series A Shares
Savings Plan FBO John A. Denniston

SECOND CLOSING

KPCB Holdings, Inc.                             835,625                $1,749,798.75
                                            Series B Shares
</TABLE>

*$1,671,250 of the purchase price to be paid by KPCB Holdings, Inc. to the
Company will be paid directly to Televerde Communications L.P. ("Televerde") in
satisfaction of amounts owed to Televerde by the Company in connection with the
purchase of the outstanding shares of Ladybug Mountain PCS Corp.

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