CONFORMED COPY
CREDIT AGREEMENT
dated as of June 29, 1998
between
GEOTEK COMMUNICATIONS, INC.
and GEOTEK USA, INC., as
Debtors and Debtors-in-Possession
and
S-C RIG INVESTMENTS III, L.P.
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS.......................................1
1.1 Definitions...........................................................1
1.2 Accounting Principles.................................................9
ARTICLE 2 THE CREDITS.........................................................9
2.1 The Commitments......................................................9
2.2 Borrowings...........................................................9
2.3 Changes of Commitments..............................................10
2.4 Fees................................................................10
2.5 Use of Proceeds.....................................................10
2.6 Notes...............................................................11
2.7 Optional Prepayments................................................11
2.8 Mandatory Prepayments and Reductions of Commitments.................11
ARTICLE 3 PAYMENTS OF PRINCIPAL AND INTEREST.................................12
3.1 Amortization........................................................12
3.2 Interest............................................................12
ARTICLE 4 PAYMENTS; COMPUTATIONS; ETC. ......................................13
4.1 Payments............................................................13
4.2 Computations........................................................13
4.3 Minimum Amounts.....................................................13
4.4 Certain Notices.....................................................13
ARTICLE 5 SECURITY: ADMINISTRATION PRIORITY ................................14
5.1 Grant of Lien and Security Interest.................................14
5.2 Administrative Priority.............................................15
5.3 Grants, Rights and Remedies Cumulative..............................15
5.4 No Filings Required.................................................16
5.5 Survival............................................................16
ARTICLE 6 CONDITIONS PRECEDENT ..............................................17
6.1 Conditions Precedent................................................17
6.2 Additional Conditions Precedent.....................................21
6.3 Certification.......................................................22
ARTICLE 7 REPRESENTATIONS AND WARRANTIES ....................................22
7.1 Incorporation, Good Standing and Due Qualification..................22
7.2 Corporate Power and Authority; No Conflicts.........................22
7.3 Legally Enforceable Agreements......................................23
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7.4 Litigation..........................................................23
7.5 True and Complete Disclosure........................................23
7.6 Ownership and Liens.................................................24
7.7 Taxes...............................................................24
7.8 ERISA...............................................................24
7.9 Subsidiaries........................................................24
7.10 Credit Arrangements................................................25
7.11 Licenses and Permits...............................................25
7.12 No Default on Outstanding Judgments or Orders......................25
7.13 Labor Disputes and Acts of God.....................................25
7.14 Insurance..........................................................25
7.15 Governmental Regulation............................................25
7.16 Administrative Priority; Lien Priority.............................26
7.17 Bankruptcy Court Orders............................................26
ARTICLE 8 AFFIRMATIVE COVENANTS .............................................26
8.1 Maintenance of Existence............................................26
8.2 Conduct of Business.................................................26
8.3 Maintenance of Properties and Executory Contracts and Leases........27
8.4 Maintenance of Records..............................................27
8.5 Maintenance of Insurance............................................27
8.6 Compliance with Laws................................................27
8.7 Right of Inspection.................................................27
8.8 Reporting Requirements..............................................28
8.9 Further Assurances..................................................29
8.10 Due Diligence.......................................................30
8.11 Fiduciary Out.......................................................30
8.12 Chapter 11 Plan Process.............................................30
ARTICLE 9 NEGATIVE COVENANTS 30
9.1 Debt................................................................30
9.2 Liens...............................................................30
9.3 Bankruptcy Court Orders; Administrative Priority;
Lien Priority; Payment of Claims.................................31
9.4 Dividends...........................................................32
9.5 Mergers, Etc........................................................32
9.6 Sale of Assets......................................................32
9.7 Investments and Acquisitions........................................32
9.8 Other Payments......................................................33
9.9 Fiscal Year.........................................................33
9.10 Press Releases......................................................33
ARTICLE 10 EVENTS OF DEFAULT ................................................33
10.1 Events of Default..................................................33
10.2 Consequences of an Event of Default................................35
10.3 Certain Remedies...................................................36
ARTICLE 11 MISCELLANEOUS ...................................................37
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11.1 Amendments and Waivers.............................................37
11.2 Binding Effect.....................................................37
11.3 The Lender as Party in Interest....................................37
11.4 Expenses and Indemnities...........................................37
11.5 Assignment; Participation..........................................38
11.6 Notices............................................................39
11.7 Table of Contents; Headings........................................39
11.8 Severability.......................................................39
11.9 Counterparts.......................................................39
11.10 Integration.......................................................39
11.11 Governing Law.....................................................39
11.12 Waiver of Jury Trial..............................................39
EXHIBITS
Exhibit A-1 - Tranche A Note
Exhibit A-2 - Tranche B Note
Exhibit B - Security and Pledge Agreement
Exhibit C - Budget
Exhibit D - Final Order
Exhibit E - Term Sheet
SCHEDULES
Schedule I - Subsidiaries and Investments
Schedule II - Credit Arrangements
Schedule III - Licenses and Consents
Schedule IV - Insurance
Schedule V - Out-of-the-Ordinary-Course Subsidiaries
Schedule VI - Liens
Schedule VII - Litigation
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CREDIT AGREEMENT dated as of June 29, 1998 by and between GEOTEK
COMMUNICATIONS, INC., a corporation organized under the laws of Delaware and a
debtor and debtor-in-possession, and GEOTEK USA, INC., a corporation organized
under the laws of Delaware and a debtor and debtor-in-possession (together, the
"Borrowers"), and S-C RIG INVESTMENTS III, L.P., a Delaware limited partnership
(the "Lender").
The Borrowers filed voluntary petitions for relief under chapter 11 of
title 11 of the United States Code on June 29, 1998 (the "Petition Date"). The
Borrowers have requested the Lender to provide the Borrowers with a $10,000,000
loan facility available in two tranches to facilitate the prompt documentation
and confirmation of a plan of reorganization and to provide working capital to
fund the Borrowers= business operations in accordance with the Budget (defined
below), and, subject to the terms and conditions set forth herein, the Lender
has agreed to provide such facility.
NOW THEREFORE, the parties hereto hereby agree, effective upon the
Effective Date (as hereinafter defined), as follows:
ARTICLE I.
DEFINITIONS; ACCOUNTING TERMS
A. Definitions. As used in this Agreement the following terms have the
following meanings (terms defined in the singular to have a correlative meaning
when used in the plural and vice versa):
"Acquisition" shall mean any transaction, or any series of related
transactions, consummated after the date of this Agreement, by which any of the
Borrowers and/or any of their Subsidiaries (in one transaction or as the most
recent transaction in a series of transactions) directly or indirectly acquires
(a) the business of, or all or substantially all of the assets of, any firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise, or (b) ownership or control of any corporation, partnership, joint
venture or joint adventure.
"Agreement" means this Credit Agreement, as amended or supplemented from
time to time. References to Articles, Sections, Exhibits, Schedules and the like
refer to the Articles, Sections, Exhibits, Schedules and the like of this
Agreement unless otherwise indicated.
"Banking Day" means any day other than a day on which commercial banks are
not authorized or required to close in New York City.
"Bankruptcy Code" shall mean title 11 of the United States Code, as
amended.
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"Bankruptcy Court" shall mean the United States Bankruptcy Court for the
District of Delaware or such other court having original jurisdiction over the
Chapter 11 Cases.
"Borrowers" shall have the meaning assigned to such term in the preamble
hereto.
"Borrowing" means a borrowing hereunder of a Loan.
"Breakup Fee" shall have the meaning given such term in the Term Sheet.
"Budget" shall mean the itemized budget for the Borrowers attached hereto
as Exhibit C for the period commencing on or about the Effective Date and ending
on or about the Termination Date, as the same may be amended, modified or
supplemented from time to time with the Lender's consent.
"Capital Expenditures" means, for any period, the Dollar amount of gross
expenditures (including Capital Lease Obligations) made for fixed assets, real
property, plant and equipment, and all renewals, improvements and replacements
thereto (but not repairs thereof) incurred during such period.
"Capital Lease Obligations" shall mean, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP and, for purposes of this Agreement, the amount
of such obligations shall be the capitalized amount thereof, determined in
accordance with GAAP.
"Carve-Out Expenses" shall mean (i) amounts payable pursuant to 28 U.S.C.
' 1930(a)(6) and (ii) allowed fees and expenses of professionals retained in the
Chapter 11 Cases pursuant to sections 327 and 1103 of the Bankruptcy Code up to
but not exceeding $500,000 in the aggregate (inclusive of any holdbacks, but
excluding any unused retainers established prior to the date hereof); provided,
that such amounts shall not be used for attacking Lender, its claims or
interests, the Loans or the Chapter 11 Plan.
"Chapter 11 Cases" shall mean the Borrowers' cases under chapter 11 of the
Bankruptcy Code pending in the Bankruptcy Court.
"Chapter 11 Plan" means the chapter 11 plan of reorganization for the
Borrowers as described in the Term Sheet.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" shall have the meaning assigned to such term in the Security
and Pledge Agreement and in Section 5.1 of this Agreement.
"Commitments" shall mean the Tranche A Commitment and the
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Tranche B Commitment.
"Consolidated Subsidiary" means any Subsidiary, whose accounts are or are
required to be consolidated with the accounts of the Borrowers in accordance
with GAAP.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrowers, are treated as a single
employer under section 414(b) or 414(c) of the Code.
"Crisis Manager" shall have the meaning set forth in Section 6.1(a)(xi)
hereof.
"Debt" of any Person shall mean, at any date (without duplication): (a)
all obligations of such Person for borrowed money or evidenced by bonds,
debentures, notes or other similar instruments; (b) all obligations of such
Person to pay the deferred purchase price of property or services, except trade
accounts payable arising in the ordinary course of business of such Person,
provided the same are not overdue in a material amount or are being contested in
good faith; (c) all Capital Lease Obligations of such Person; (d) all Debt of
others secured by a Lien on any asset of such Person, whether or not such Debt
is assumed by such Persons; (e) all Debt of others Guaranteed by such person;
(f) all obligations of such Person in respect of letters of credit, acceptances
or surety or other similar bonds, whether contingent or otherwise; and (g)
obligations in respect of any Interest Rate Protection Agreement.
"Default" means any event which with the giving of notice or lapse of
time, or both, would become an Event of Default.
"Definitive Plan Documents" shall mean the definitive documentation with
respect to the operative documents contemplated by the Chapter 11 Plan,
including, without limitation, the documentation pertaining to the proposed
rights offering in connection therewith and the new securities to be issued on
the effective date thereunder. "Disclosure Statement" means the disclosure
statement for the Chapter 11 Plan under section 1125 of the Bankruptcy Code.
"Disposition" means any sale, assignment, lease, transfer or other
disposition of any Collateral (whether now owned or hereafter acquired),
including under a Plan of Reorganization and the PageNet Agreement, by the
Borrowers or any of their Subsidiaries to any Person.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Due Diligence" shall mean the financial, business, operational and legal
due diligence (a) of Lender and its advisors of the Borrowers and their
Subsidiaries for purposes of the Loans, including with respect to the
Collateral, and (b) of Lender and their respective advisors with respect to
Borrowers' business plan and the Chapter 11
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Plan.
"Effective Date" shall have the meaning attributed thereto in Section 6.1
hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
section 414(b) of the Code) as the Borrowers or is under common control (within
the meaning of section 414(c) of the Code) with the Borrowers.
"Event of Default" has the meaning given such term in Section 10.1 hereof.
"Facility Documents" means this Agreement, the Notes and the Security
Documents.
"Fiduciary Out" shall have the meaning given such term in the Term Sheet.
"Final Order" shall mean an order of the Bankruptcy Court, in form and
substance satisfactory to the Lender and its counsel, finally approving this
Agreement and the extensions of credit made and to be made by the Lender in
accordance with this Agreement in substantially the form of Exhibit D hereto, as
the same may be amended, modified or supplemented from time to time with the
express written joinder or consent of the Lender.
"Foreign Collateral" shall have the meaning attributed thereto in Section
5.5(c) hereof.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time.
"HNS" means Xxxxxx Network Systems, Inc. and its affiliates.
"Industrial Wireless Agreement" shall have the meaning assigned to such
term in Section 5.1 hereof.
"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"Interim Order" shall mean an order of the Bankruptcy Court, in form and
substance satisfactory to the Lender and its counsel, approving this Agreement
and all or
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a portion of the extension of credit to be made by the Lender in accordance with
this Agreement on an interim basis, and finding, among other things, that the
applicable Loans are in good faith and otherwise satisfy section 364(e) of the
Bankruptcy Code as the same may be amended, modified or supplemented from time
to time with the express written joinder or consent of the Lender.
"Investment" in any Person shall mean: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of such Person; and (b) any deposit with, or advance, loan or other extension of
credit to, such Person (but excluding any advance, loan or extension of credit
having a term not exceeding 90 days representing the purchase price of inventory
or supplies sold by such Person or the cost of services provided by such Person
in the ordinary course of business, or any deposit made prior to the Petition
Date).
"Lender" shall have the meaning assigned to such term in the preamble
hereto.
"Lien" means any lien (statutory or otherwise), security interest,
mortgage, deed of trust, priority, pledge, charge, conditional sale, title
retention agreement, financing lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
"Loans" means the Tranche A Loans and the Tranche B Loans.
"May Industrial Wireless Agreement" shall have the meaning assigned to
such term in Section 5.1 hereof. "Multiemployer Plan" means a Plan defined as
such in section 3(37) of ERISA to which contributions have been made by the
Borrowers or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Notes" shall mean, collectively, the Tranche A Note and the Tranche B
Note.
"Obligations" shall mean all indebtedness, obligations and liabilities of
the Borrowers to the Lender incurred under or related to this Agreement, the
Notes or any other Facility Document, whether such indebtedness, obligations or
liabilities are direct or indirect, secured or unsecured, joint or several,
absolute or contingent, due or to become due, whether for payment or
performance, now existing or hereafter arising, including the principal amount
of Loans outstanding, together with interest thereon, and all expenses, fees and
indemnities hereunder or under any other Facility Document, including amounts
due under Section 11.4 hereof and similar agreements contained in the other
Facility Documents, from time to time arising under or in connection with or
evidenced or secured by this Agreement, the Notes, or any other Facility
Document.
"PageNet Agreement" has the meaning given such term in Section 5.1 hereof.
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"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Permitted Investments" of any Person shall mean: (a) direct obligations
of the United States of America, or of any agency thereof, or obligations
guaranteed as to principal and interest by the United States of America or any
agency thereof, in either case maturing not more than 90 days from the date of
acquisition thereof; (b) certificates of deposit issued by any Lender or trust
company organized under the laws of the United States of America or any state
and having capital, surplus and undivided profits of at least $500,000,000,
maturing not more than 90 days from the date of acquisition thereof; (c)
commercial paper rated A-1 or better or P-1 by Standard & Poor's Corporation or
Xxxxx'x Investors Services, Inc., respectively, maturing not more than 90 days
from the date of acquisition thereof; (d) post-petition deposits under section
366 of the Bankruptcy Code; and (e) Investments outstanding on the Petition Date
and listed on Schedule I hereto.
"Permitted Liens" shall mean the Liens described in clause (b) of Section
9.2 hereof.
"Person" means an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, governmental authority or other entity of whatever nature.
"Petition Date" shall have the meaning assigned to such term in the
preamble hereto.
"Plan" means any employee benefit or other plan established or maintained,
or to which contributions have been made, by the Borrowers or any ERISA
Affiliate and which is covered by Title IV of ERISA or to which section 412 of
the Code applies.
"Plan of Reorganization" shall mean any chapter 11 plan for the Borrowers.
"Pledged Interests" shall have the meaning assigned to such term in the
Security and Pledge Agreement.
"Post-Default Rate" shall mean, in respect of any principal of any
Obligation or any other amount under this Agreement or any Note that is not paid
when due (whether at stated maturity, by acceleration, by optional or mandatory
prepayment or otherwise), a rate per annum during the period from and including
the due date to but excluding the date on which such amount is paid in full
equal to 14%.
"Security and Pledge Agreement" shall mean a Security and Pledge Agreement
executed by the Borrowers and any wholly-owned direct or indirect Subsidiary of
the Borrowers that is granting Lender a Lien on any Collateral thereunder, in
favor of the Lender, substantially in the form of Exhibit B hereto and covering
the Collateral as identified therein, as the same shall be amended, modified and
supplemented
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and in effect from time to time.
"Security Documents" shall mean, collectively, the Security and Pledge
Agreement, all Uniform Commercial Code financing statements required by this
Agreement or the Security and Pledge Agreement which have been or will be filed
with respect to the security interests in personal property and fixtures created
pursuant thereto, and all additional security agreements, mortgages or Uniform
Commercial Code financing statements heretofore or hereafter delivered or filed,
as the case may be, by the Borrowers and any direct or indirect Subsidiary of
the Borrowers that is granting Lender a Lien on any of the Collateral pursuant
to the terms of this Agreement or the Security and Pledge Agreement.
"Subsequent Advance Date" shall have the meaning assigned to such term in
Section 6.1(b) hereof.
"Subsidiary" means, as to any Person, any corporation or other entity of
which at least a majority of the securities or other ownership interests having
ordinary voting power (absolutely or contingently) for the election of directors
or other persons performing similar functions are at the time owned directly or
indirectly by such Person. "Term Sheet" shall mean a term sheet in substantially
the form of Exhibit E hereto setting forth the terms and conditions of the
Chapter 11 Plan, as the same may be amended, modified and supplemented from time
to time with the express written consent of the Lender.
"Termination Date" shall mean the earlier of (a) October 15, 1998, (b) the
effective date of a Plan of Reorganization, and (c) the occurrence of an Event
of Default.
"Termination Event" shall mean (a) a "Reportable Event" described in
section 4043 of ERISA and the regulations issued thereunder (other than a
"Reportable Event" not subject to the provision for 30-day notice to the PBGC
under such regulations), or (b) the withdrawal of the Borrowers or any member of
the Controlled Group from a Plan during a plan year in which it was a
"substantial employer" as defined in section 4001(a)(2) of ERISA, or (c) the
filing of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under section 4041 of ERISA, or (d) the institution
of proceedings to terminate a Plan by the PBGC, or (e) any other event or
condition which might constitute grounds under section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Third Party Transaction" shall have the meaning given such term in the
Term Sheet.
"Tranche A Commitment" shall mean the obligation of the Lender to make
Loans to the Borrowers in an aggregate principal amount not to exceed
$7,000,000.
"Tranche A Loans" shall mean the Loans provided for in Section 2.1(a)
hereof.
"Tranche A Note" shall mean the promissory grid note provided for by
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Section 2.6(a) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case, as the same shall be modified and supplemented
and in effect from time to time.
"Tranche B Commitment" shall mean the obligation of the Lender to make
Loans to the Borrowers in an aggregate principal amount not to exceed
$10,000,000 minus the amount of any Tranche A Loans actually extended to the
Borrowers.
"Tranche B Loans" shall mean the Loans provided for in Section 2.1(b)
hereof.
"Tranche B Note" shall mean the promissory grid note provided for in
Section 2.6(b) hereof and all promissory notes delivered in substitution or
exchange therefor, in each case, as the same shall be modified and supplemented
and in effect from time to time.
"Unfunded Vested Liabilities" means, with respect to any Plan, the amount
(if any) by which the present value of all vested benefits under the Plan
exceeds the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA for calculating the potential liability of the Borrowers
or any ERISA Affiliate to the PBGC or the Plan under Title IV of ERISA.
B. Accounting Principles. Except as otherwise provided in this Agreement,
all computations and determinations as to accounting or financial matters and
all financial statements to be delivered hereunder shall be made and prepared in
accordance with GAAP and all accounting and financial terms shall have the
meanings ascribed to such terms by GAAP.
ARTICLE II.
THE CREDITS
A. The Commitments.
(a) Subject to the terms and conditions set forth herein, the Lender
agrees to make one or more multiple draw Tranche A Loans to the Borrowers
from time to time during the period from June 29, 1998 in an aggregate
principal amount not to exceed the Tranche A Commitment. Tranche A Loans
once repaid or prepaid may not be reborrowed.
(b) Subject to the terms and conditions set forth herein, the Lender
agrees to make one or more multiple draw Tranche B Loans to the Borrowers
from time to time during the period from the Subsequent Advance Date
through the Termination Date in an aggregate principal amount not to
exceed the Tranche B Commitment. Tranche B Loans once repaid or prepaid
may not be reborrowed.
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(c) Notwithstanding anything herein to the contrary, the Lender
shall have no obligation to make Loans hereunder in excess of the amounts
authorized by the Interim Order or the Final Order, as the case may be, in
the Chapter 11 Cases, and any reference herein to the amount of any
Commitments shall be automatically reduced to the amounts so authorized.
B. Borrowings. The Borrowers shall give the Lender notice of each
Borrowing of Loans hereunder as provided in Section 4.4 hereof. On the date
specified for each Borrowing hereunder, the Lender shall, subject to the terms
and conditions of this Agreement, make available the amount of such Borrowing to
the Borrowers by depositing the same, in immediately available funds, in an
account of the Borrowers designated for such purpose from time to time by the
Borrowers.
C. Changes of Commitments.
(a) The Commitments shall be automatically reduced to zero on the
Termination Date.
(b) The Borrowers shall have the right at any time or from time to
time (i) so long as no Loans are outstanding, to terminate the Commitments
and (ii) to reduce the unused amount of the Commitments; provided that (x)
the Borrowers shall give notice of each such termination or reduction as
provided in Section 4.4 hereof and (y) each partial reduction shall be in
an amount at least equal to $100,000 or in multiples of $10,000 in excess
thereof.
(c) The Commitments once terminated or reduced may not be
reinstated.
D. Fees. In addition to the amounts provided in Section 11.4 hereof and
any similar provisions in the other Facility Documents, the Borrowers shall be
obligated to pay Lender a facility fee of $150,000, which amount shall be paid
by means of Lender=s deduction thereof from the first Tranche A Loan.
E. Use of Proceeds. The Borrowers hereby covenant, represent and warrant
that the proceeds of the Loans made to them will be used solely to fund the
Borrowers' continued ordinary course operations and working capital needs, in
each case solely in accordance with the Budget (without limitation, in Permitted
Investments) and to facilitate, among other things, the conduct and completion
of Due Diligence and the prompt documentation, filing and approval or
confirmation, as the case may be, of the Disclosure Statement, the Chapter 11
Plan and the Definitive Plan Documents within the times specified in this
Agreement. Without limiting the foregoing, the Borrowers may not, and shall not
permit any of their Subsidiaries to, use the Proceeds of any Loan to make
Acquisitions or Investments, including any partnership or joint venture payment,
or for attacking the Lender, its claims or interests, the Loans or the Chapter
11 Plan; provided that the proceeds of the Loans may be used to make ordinary
course payments (as provided in the Budget) in respect of Anam
Telecommunications, Geotek Argentina, S.A., GMSI, Inc. and Geotek Technologies
Israel (1992) Ltd.
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F. Notes.
(a) The Tranche A Loans made by the Lender hereunder shall be
evidenced by a single promissory note of the Borrowers in substantially
the form of Exhibit A-1 hereto, dated as of the date hereof, payable to
the Lender in a principal amount equal to the amount of the Tranche A
Commitment as originally in effect and otherwise duly completed. The date
and amount of each Tranche A Loan made by the Lender to the Borrowers, and
all payments and prepayments made on account of the principal thereof,
shall be recorded by the Lender on its books and, prior to any transfer of
the Tranche A Note, endorsed by the Lender on the schedule attached to
such Tranche A Note or any continuation thereof; provided, however, that
any failure by the Lender to make any such notation shall not affect the
obligations of the Borrowers hereunder or under such Tranche A Note in
respect of such obligations.
(b) The Tranche B Loans made by the Lender hereunder shall be
evidenced by a single promissory note of the Borrowers in substantially
the form of Exhibit A-2 hereto, dated as of the date hereof, payable to
the Lender in a principal amount equal to the amount of the Tranche B
Commitment as originally in effect and otherwise duly completed. The date
and amount of each Tranche B Loan made by the Lender to the Borrowers, and
all payments and prepayments made on account of the principal thereof,
shall be recorded by the Lender on its books and, prior to any transfer of
the Tranche B Note, endorsed by the Lender on the schedule attached to
such Tranche B Note or any continuation thereof; provided, however, that
any failure by the Lender to make any such notation shall not affect the
obligations of the Borrowers hereunder or under such Tranche B Note in
respect of such obligations.
G. Optional Prepayments. Subject to Section 4.3 hereof, the Borrowers
shall have the right to prepay the Obligations, at any time or from time to
time, provided the Borrowers shall give the Lender notice of each such
prepayment as provided in Section 4.4 hereof (and, upon the date specified in
any such notice of prepayment, the amount to be prepaid shall become due and
payable hereunder).
H. Mandatory Prepayments and Reductions of Commitments.
(a) Sale of Assets, Etc.. Without limiting the obligation of the
Borrowers to obtain the consent of the Lender pursuant to Section 9.6
hereof to any Disposition not otherwise permitted hereunder, the Borrowers
will prepay, to the extent of such Disposition proceeds, the Obligations
outstanding, and the Commitments shall be automatically reduced, upon the
closing of any Disposition to the extent of such Disposition proceeds,
including, without limitation, in the case of each of the following
Dispositions: the PageNet Agreement.
(b) Exceeding Commitments. If at any time the Loans outstanding
hereunder exceed the Commitments then available, then the Borrowers shall
immediately repay the Loans in the amount of such excess.
ARTICLE III.
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PAYMENTS OF PRINCIPAL AND INTEREST
A. Amortization.
(a) To the extent not due and payable earlier pursuant to the terms
of this Agreement, the entire unpaid principal amount of each of the Loans
shall be due and payable on the Termination Date.
B. Interest.
(a) The Borrowers hereby promise to pay to the Lender interest on
the unpaid principal amount of each Loan, for the period from and
including the date of such Loan to but excluding the date such Loan shall
be paid in full, at a rate per annum equal to 12%.
(b) Notwithstanding the foregoing, the Borrowers hereby promise to
pay to the Lender interest on the Loans at the Post-Default Rate (i) upon
the occurrence and during the continuance of an Event of Default hereunder
and (ii) on any principal of any Loan and on any other Obligation of the
Borrowers which shall not be paid in full when due (whether at stated
maturity, by acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof to but excluding the date
the same is paid in full.
(c) Accrued interest on the Loans shall be payable monthly on last
Banking Day of each calendar month.
(d) Notwithstanding anything herein to the contrary, interest
payable at the Post-Default Rate shall be payable in cash from time to
time on demand.
ARTICLE IV.
PAYMENTS; COMPUTATIONS; ETC.
A. Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrowers to the
Lender under this Agreement, the Notes and the other Facility Documents
shall be made in Dollars, in immediately available funds, without
deduction, set-off or counterclaim, into an account in accordance with the
following wire instructions: Bank of New York, aba #000000000 credit to
Xxxxxxx & X. Xxxxxxxxxxxx Account #8540905100, for further credit to
Account # 33-00713, S-C Rig Investments III, L.P. (or such other account
designated by the Lender from time to time) not later than 1:00 p.m. New
York time on the date on which such payment shall become due (each such
payment made after such time on such due date to be deemed to have been
made on the next succeeding Banking Day).
11
(b) The Borrowers shall, at the time of making any payment or
prepayment under this Agreement or any Note, specify to the Lender the
Obligations or other amounts payable by the Borrowers hereunder to which
such payment is to be applied (and in the event that the Borrowers fail to
so specify, or if an Event of Default has occurred and is continuing, the
Lender may apply the amount of such payment received by it in such manner
as it may determine to be appropriate).
(c) If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Banking Day, such date shall
be extended to the next succeeding Banking Day, and interest shall be
payable for any principal so extended for the period of such extension.
B. Computations. Interest hereunder shall be computed on the basis of a
year of 360 days.
C. Minimum Amounts. Each Borrowing hereunder or optional partial
prepayment of principal of the Loans shall be in an amount at least equal to
$100,000 or in multiples of $10,000 in excess thereof.
D. Certain Notices. Notices by the Borrowers to the Lender of terminations
or reductions of the Commitments, of Borrowings and of optional prepayments of
the Obligations shall be irrevocable and shall be effective only if received by
the Lender not later than 12:00 noon New York time (or, in the case of the
Tranche A Loan, 5:00 p.m. New York time) on the number of Banking Days prior to
the date of the relevant termination, reduction, borrowing or prepayment
specified below:
Notice Number of Banking
Days Prior
Termination or reduction of
Commitments 2
Borrowing or prepayment of Loans 1
Each such notice of termination or reduction shall specify the amount and type
of the Commitment to be terminated or reduced. Each notice of optional
prepayment shall specify the amount and type of Loan to be prepaid, and each
such notice of Borrowing shall specify the type of Loan to be borrowed (subject
to Section 4.3 hereof) and the date of borrowing or optional prepayment (which
shall be a Banking Day).
ARTICLE V.
SECURITY: ADMINISTRATION PRIORITY
X. Xxxxx of Lien and Security Interest.
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(a) Pursuant to this Agreement and the Security Documents, the
Borrowers hereby assign, pledge, transfer, grant, confirm and set over
unto the Lender, and hereby grant and create in favor of the Lender, and
shall cause each of their wholly-owned, direct and indirect Subsidiaries
simultaneously to assign, pledge, transfer, grant, confirm and set over
unto the Lender, and simultaneously grant and create in favor of the
Lender, a security interest in and to, the Collateral, consisting of all
assets not subject to any existing Lien that is not a Permitted Lien of
the Borrowers and their wholly-owned, direct and indirect Subsidiaries
(without limitation excluding any licenses owned by or stock of Geotek
U.S. Networks, Inc., Geotek License Holdings, Inc. and XxxXxxxxxx
Communications, Inc.), including, without limitation, (i) to the extent
grantable, the rights in respect of each of the Borrowers= Subsidiaries=
68 Special Mobile Radio licenses described on Annex 1 to the Security and
Pledge Agreement (as to such 68 licenses, the "Pledged SMR Licenses"),
(ii) the Borrowers' interest in and claims against each of Anam
Telecommunications, Geotek Argentina, S.A., and, to the extent grantable,
GMSI, Inc., and any direct or indirect wholly-owned Subsidiary of a
Borrower that holds a Pledged SMR License, (iii) all rights of the
Borrowers to receive the consideration under and/or to the proceeds of (x)
that certain SMR Frequency Exchange Agreement with Paging Network of
America, Inc. ("PageNet") dated March 14, 1997 (the "PageNet Agreement"),
with the exception of the New York MTA license assigned by PageNet to
Geotek U.S. Networks, Inc., and (y) that certain Purchase Agreement dated
April 3, 1998 by and between Geotek Communications, Inc., Gelico, Inc. and
Industrial Wireless Technologies, Inc. ("Industrial Wireless Agreement"),
and (iv) to the extent grantable, all unencumbered accounts, chattel
paper, contracts, documents, equipment, general intangibles, instruments
and equipment of the Borrowers and their wholly- owned, direct and
indirect Subsidiaries, with the exception of the Purchase Agreement among
Geotek Communications, Inc., Geotek US Networks, Inc. and Industrial
Wireless Technologies, Inc., dated May 26, 1998 (the "May Industrial
Wireless Agreement") and in each case, not constituting "Excluded
Property" under the Security and Pledge Agreement and subject to any
existing Liens with the exception of Permitted Liens, together with (v)
all proceeds, rents, products and profits of any and all of the foregoing,
all as described in the Security Documents.
(b) The liens and security interests in favor of the Lender referred
to in Section 5.1(a) hereof and under the Security Documents shall be
valid and perfected liens and security interests, prior to all other Liens
and interests, other than Permitted Liens, and shall have a second
priority, with respect to such Collateral, junior only to the Permitted
Liens thereon; provided that the liens and security interests in favor of
the Lender referred to in Section 5.1(a) hereof and under the Security
Documents shall be subject to the Carve-Out Expenses. All liens and
security interests in favor of the Lender hereunder and under the Security
Agreements and their priority shall remain in effect until the Commitments
have been terminated and all Obligations have been irrevocably repaid in
cash in full.
B. Administrative Priority. The Borrowers hereby agree that the
Obligations of the Borrowers shall constitute allowed administrative expenses in
the Chapter 11 Cases having super-priority status under section 364(c)(1) of the
Bankruptcy Code over all other administrative expenses and unsecured claims
against the Borrowers now existing or hereafter arising of any kind or nature
whatsoever, including without
13
limitation all administrative expenses, charges and claims of the kind specified
in sections 503(b), 506(c), 726(b) and 507(b) of the Bankruptcy Code, subject,
as to priority, only to Carve-Out Expenses.
C. Grants, Rights and Remedies Cumulative. The liens and security
interests granted pursuant to Section 5.1(a) hereof and the Security Documents
and the administrative priority granted pursuant to Section 5.2 hereof may be
independently granted by the Facility Documents, the Interim Order, the Final
Order and by other agreements hereafter entered into. This Agreement, the other
Facility Documents, the Interim Order, the Final Order and such other agreements
hereinafter entered into supplement each other, and the grants, priorities,
rights and remedies of the Lender hereunder and thereunder are cumulative.
D. No Filings Required. The liens and security interests referred to in
Section 5.1(a) hereof and in the other Facility Documents shall be deemed valid
and perfected by entry of the Interim Order or the Final Order, as the case may
be, whichever occurs first. The Lender shall not be required to file any
financing statements, notices of Lien, mortgages or similar instruments in any
jurisdiction or filing office, or to take possession of any Collateral or to
take any other action in order to validate or perfect the liens and security
interests granted by or pursuant to this Agreement, the Interim Order or the
Final Order, as the case may be, or any other Facility Document. If the Lender
shall, in its sole discretion, from time to time choose to file such financing
statements, notices of Lien, mortgages or similar instruments, take possession
of any Collateral, or take any other action to validate or perfect any such
security interests or liens, all such documents shall be deemed to have been
filed or recorded at the time and on the date of entry of the Interim Order or,
if no Interim Order is obtained, the Final Order, and the Borrowers consent to
the modification of the automatic stay under section 362 of the Bankruptcy Code
to permit the Lender to file such financing statements, notices of Lien or
similar instruments, take possession of any collateral, or take any other action
to validate or perfect any such security interests or Liens.
E. Survival. The liens, security interests, lien priorities,
administrative priorities and other rights and remedies granted to the Lender
pursuant to this Agreement and the other Facility Documents (specifically
including but not limited to the existence, perfection and priority of the liens
and security interests provided herein and therein, and the administrative
priority provided above and therein) shall not be modified, altered, primed or
impaired (including by the grant of a junior Lien on any Collateral) in any
manner by any other financing or extension of credit or incurrence of Debt by
the Borrowers (pursuant to section 364 of the Bankruptcy Code or otherwise), or
by any dismissal or conversion of the Chapter 11 Cases, or, with respect to any
Loans then outstanding, any modification, amendment or reversal or stay of the
Interim Order or the Final Order, as the case may be, or by any other act or
omission whatsoever. Without limitation, notwithstanding any such order,
financing, extension, incurrence, dismissal, conversion, act of omission:
(a) except for the Carve-Out Expenses, no costs or expenses of
administration which have been or may be incurred in the Chapter 11 Cases
or any conversion of the same or in any other proceedings related thereto,
and no priority claims,
14
are or will be prior to or on a parity with any claim of the Lender
against the Borrowers in respect of any Obligation;
(b) the liens and security interests in favor of the Lender set
forth in Section 5.1(a) hereof and in the Facility Documents shall
constitute valid and perfected first priority Liens and security
interests, subject only to the Permitted Liens to which such liens and
security interests hereunder shall be subordinate and junior, and shall be
prior to all other Liens and security interests, now existing or hereafter
arising, in favor of any other creditor or any other Person whatsoever;
provided that all such liens and security interests of the Lender set
forth in Section 5.1(a) hereof any in the Facility Documents shall be
subject to the Carve-Out Expenses; and
(c) the liens and security interests in favor of the Lender set
forth in Section 5.1(a) hereof and in the Facility Documents shall be
valid and perfected without the necessity that the Lender file financing
statements, notices of lien, mortgages or otherwise perfect its Liens and
security interests under applicable nonbankruptcy law except for such
Collateral as is or may hereafter be located outside of the territorial
limits of the United States of America ("Foreign Collateral") to the
extent that the same may not be subject to the jurisdiction of the
Bankruptcy Court. Borrowers shall take all steps required to perfect
Lender's security interest in the Foreign Collateral under applicable
non-bankruptcy law as promptly as practicable, but in no event later than
July 8, 1998.
ARTICLE VI.
CONDITIONS PRECEDENT
A. Conditions Precedent.
(a) Tranche A Loans. The obligation of the Lender to make Tranche A
Loans available hereunder shall occur on the date (the "Effective Date")
on or after June 29, 1998 that the Lender shall have received each of the
following, in form and substance satisfactory to the Lender and its
counsel:
(i) the Notes duly executed by the Borrowers;
(ii) the Security and Pledge Agreement duly executed by the
Borrowers and any Subsidiary of the Borrowers with an interest in
the Collateral, together with such financing statements executed by
the Borrowers and such Subsidiaries which in the opinion of the
Lender are desirable to perfect the liens and security interests
created hereby and by the Security and Pledge Agreement;
15
(iii) the stock certificates evidencing the Pledged Interests,
accompanied by undated stock powers duly executed in blank; provided
that stock certificates evidencing Foreign Collateral shall be
received by Lender as promptly as practicable;
(iv) evidence that either the Interim Order or the Final
Order, as the case may be, shall have been entered by the Bankruptcy
Court approving the Commitments (or such lesser amount as shall be
acceptable to the Lender in its sole discretion), and each such
Order shall be in full force and effect and shall not have been
reversed, stayed, modified or amended;
(v) a copy of the charter, as amended and in effect, of each
of the Borrowers and of each of the "Domestic Issuers" under Annex
2A of the Security and Pledge Agreement, certified as of recent date
by the Secretary of State of the State of Delaware, or, in the case
of each Domestic Issuer which is not a Delaware entity, by an
officer of the state of such Subsidiary=s incorporation or
organization, and a certificate from such Secretary of State or
officer dated as of recent date as to the good standing of and
charter documents filed by the Borrowers and such Subsidiary;
(vi) a certificate from the Secretary of each of the Borrowers
and of any Subsidiary of the Borrowers that is a party to any
Facility Document, dated the Effective Date, certifying (A) that the
attached are true and complete copies of the by-laws of the
Borrowers and such Subsidiary as amended and in effect at all times
from the date on which the resolutions referred to in clause (B)
were adopted to and including the date of such certificate, (B) that
attached thereto is a true and complete copy of resolutions duly
adopted by the Board of Directors of each of the Borrowers and of
any Subsidiary of the Borrowers that is a party to any Facility
Document, authorizing the execution, delivery and performance of
this Agreement and the other Facility Documents to which the
Borrowers or such Subsidiary is a party and the extensions of credit
hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
charter of each of the Borrowers and such Subsidiary that is a party
to any Facility Document has not been amended since the date of the
certification thereto furnished pursuant to clause (v) above, and
(D) as to the incumbency and specimen signature of each officer of
the Borrowers and Subsidiary executing the Facility Documents;
(vii) a certificate of an officer of each of the Borrowers and
of any Subsidiary of the Borrowers that is a party to a Facility
Document as to the incumbency and specimen signature of the
Secretary of the Borrowers and such Subsidiary;
(viii) a certificate of a duly authorized officer of each of
the Borrowers, dated the Effective Date, stating that (A) the
representations and warranties in Article 7 of this Agreement and in
the other Facility Documents are true and correct on such date as
though made on and as of such date as to such entity, (B) no event
has occurred and is continuing which constitutes a Default or an
Event of Default hereunder and (C) from the date of execution of the
Term Sheet through the Effective Date, no material adverse change in
the assets, business, operations or financial condition of the
Borrowers has occurred or become known since the Petition Date,
except as disclosed in writing by the Borrowers to the Lender prior
to the Effective Date, except as resulting from the commencement of
the Chapter 11 Cases, and a certificate of a duly authorized
16
officer of any Subsidiary of the Borrowers that is a party to a
Facility Document, dated the Effective Date, stating that (A) the
representations and warranties in the Security and Pledge Agreement
are true and correct on such date as though made on and as of such
date as to such entity and (B) from the date of execution of the
Term Sheet through the Effective Date, no material adverse change in
the assets, business, operations or financial condition of any
Subsidiary of the Borrowers has occurred or become known since the
Petition Date, except as disclosed in writing by such Subsidiary of
the Borrowers to the Lender prior to the Effective Date, except as
resulting from the commencement of the Chapter 11 Cases;
(ix) the liens and security interests in favor of the Lender
pursuant hereto and the Security and Pledge Agreement shall be valid
and perfected first priority liens prior (except for Permitted Liens
to which such Liens and security interests are subordinate and
junior) to all other Liens in or on the Collateral intended to be
subject thereto, subject to the Carve-Out Expenses;
(x) the Term Sheet executed and delivered by the Borrowers and
the Borrowers' active pursuit of confirmation of the Chapter 11
Plan;
(xi) on or before June 29, 1998, the Borrowers and Lender
shall have agreed upon the identity of, and the Borrowers shall have
agreed to retain a crisis manager and a restructuring and
reorganization financial advisor and/or other consultants to the
Borrowers (collectively, "Crisis Manager") to perform, subject to
applicable fiduciary duties and the boards of directors of the
Borrowers, all postpetition functions of the Borrowers' chief
executive officer, adherence to the Budget, consolidation of
operations, facilitation of Due Diligence in respect of the Chapter
11 Plan and the business plan, and preparation of a revised business
plan (the parties agree (A) upon Zolfo Xxxxxx Management, LLC (per
Xxxxxxx XxXxxxxx and Xxxxxx Xxxxxxx), assisted with respect to the
Business Plan by Renaissance Worldwide, Inc., as Crisis Manager and
(B) that the Borrowers shall not dismiss or replace the Crisis
Manager without obtaining Bankruptcy Court approval and, if
terminated without cause, without having agreed with the Lender on a
replacement Crisis Manager; provided, however, that if the Borrowers
dismiss the Crisis Manager for cause, they agree to replace the
Crisis Manager as soon as reasonably practicable with another Crisis
Manager acceptable to the Lender);
(xii) commencing on June 26, 1998, the Borrowers shall
facilitate and cooperate with the Due Diligence of Lender in respect
of the Chapter 11 Plan and the business plan;
(xiii) evidence that all fees, retainers and expenses required
by this Agreement to be paid on or before the Effective Date shall
have been paid in full (or shall have been authorized by the Interim
Order or the Final Order, as the case may be);
(xiv) the Lender shall otherwise be satisfied in all
17
material respects (in its sole determination) with the results of
its Due Diligence, which Due Diligence shall be completed on or
before June 29, 1998; and
(xv) such other approvals, opinions or documents as the Lender
may reasonably request.
(b) Tranche B Loans. The obligation of the Lender to make Tranche B
Loans available hereunder shall occur on the date (the "Subsequent Advance
Date") on or after August 10, 1998 that the Lender shall have received
each of the following, in form and substance satisfactory to the Lender
and its counsel:
(i) evidence that the Effective Date shall have occurred;
(ii) evidence that the Final Order shall be in full force and
effect approving the Commitments (or such lesser amount as shall be
acceptable to the Lender in its sole discretion) and shall not have
been reversed, stayed, modified or amended;
(iii) the Bankruptcy Court shall have scheduled the hearing on
approval of the Disclosure Statement under section 1125 of the
Bankruptcy Code to occur no later than August 15, 1998;
(iv) the Borrowers shall be actively pursuing Bankruptcy Court
approval of the Disclosure Statement and confirmation of the Chapter
11 Plan on or before September 22, 1998;
(v) certificates from a duly authorized officer of each of the
Borrowers and any of the Borrowers' Subsidiaries, as applicable, of
the type referred to in clauses (a)(viii) and (a)(ix) above, dated
the Subsequent Advance Date and such certificates are true and
accurate in all material respects; and
(vi) the Borrowers shall be continuing to facilitate and
cooperate with the Due Diligence described in clause (a)(xii) above;
and
(vii) the Borrowers shall not have dismissed or replaced the
Crisis Manager referred to in clause (a)(xi) above without obtaining
Bankruptcy Court approval and, if terminated without cause, without
having agreed with the Lender on a replacement Crisis Manager;
provided, however, that if the Borrowers dismiss the Crisis Manager
for cause, they agree to replace the Crisis Manager as soon as
reasonably practicable with another Crisis Manager acceptable to the
Lender.
B. Additional Conditions Precedent. The obligation of the Lender to make
any Loan hereunder is subject to the further conditions precedent that on the
date of any Borrowing of a Loan the following statements shall be true:
(a) the representations and warranties made by the Borrowers
18
in Article 7 hereunder and in each of the other Facility Documents are
true and correct in all material respects on and as of the date of such
Borrowing as though made on and as of such date;
(b) No Default or Event of Default has occurred and is continuing,
or would result from such Borrowing;
(c) On the date of such Borrowing, the Interim Order or the Final
Order, as the case may be, shall be in full force and effect and shall not
have been reversed, stayed, modified or amended. Unless the Lender shall
have joined in or expressly consented in writing to the same, there shall
be no motion of the Borrowers pending: (i) to reverse, modify or amend the
Interim Order or the Final Order, as the case may be, or (ii) to permit
any administrative expense or unsecured claim against the Borrowers, now
existing or hereafter arising, of any kind or nature whatsoever, to have
administrative priority equal or superior to the priority of the Lender in
respect of the Obligations, except for Carve-Out Expenses, or (iii) to
grant or permit the granting of a Lien on any Collateral;
(d) The aggregate unpaid principal amount of the Loans shall not
exceed, and after giving effect to the requested Borrowing will not
exceed, the Commitments then available; and
(e) Up to fourteen days in advance of the date of a Borrowing, the
Borrower may request a Borrowing, the amount of which shall not exceed the
Borrowers' anticipated ordinary course expenses as set forth in the Budget
for the fourteen day period following the date of such Borrowing (i.e. two
weeks in advance). In the event there is a dispute between the parties as
to whether the Borrowers are in compliance with the Budget, the Lender
shall continue to fund Loans into a segregated account of the Borrowers
that may not be drawn upon except pursuant to an order of the Bankruptcy
Court or an agreement of the parties hereto. Without limiting any other
provision of this Agreement, Lender shall inform the Borrower, either
orally or in writing within 3 business days of a request for Borrowing
whether the Borrowers are in compliance with the Budget.
C. Certification. Each notice of a Borrowing shall be accompanied by a
certificate of a duly authorized officer of each of the Borrowers certifying
that the statements contained in Section 6.2 are true and correct both on the
date of such notice and, unless the Borrowers otherwise notify the Lender prior
to such Borrowing, as of the date of such Borrowing.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
The Borrowers hereby represent and warrant that upon the occurrence of the
Effective Date (in each case where there is a reference to a Subsidiary in this
Article 7, such reference shall be limited to the Borrowers= direct and indirect
wholly-owned Subsidiaries):
19
A. Incorporation, Good Standing and Due Qualification. Each of the
Borrowers and their Subsidiaries (a) except as disclosed in Schedule III, is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization; (b) has the requisite corporate power
and has all material governmental licenses, authorizations, consents and
approval necessary to own its assets, except as disclosed in Schedule III
hereto, and carry on the business in which it is now engaged or proposed to be
engaged; and (c) except as disclosed in Schedule III hereto is duly qualified to
do business in all jurisdictions in which the nature of the business conducted
by the Borrowers and their Subsidiaries makes such qualification necessary and
where failure to so qualify would have a material adverse effect on its
business, financial condition or operations.
B. Corporate Power and Authority; No Conflicts. The execution, delivery
and performance by the Borrowers (and their Subsidiaries, as applicable) of the
Facility Documents to which they are a party, the grant by the Borrowers (and
their Subsidiaries, as applicable) and the perfection of the security interests
purported to be granted in favor of the Lender hereunder and under the Security
Documents, and the exercise by the Lender of any rights and remedies hereunder
or under the other Facility Documents have been duly authorized by all necessary
corporate action and do not and will not: (a) contravene any provision of its
(or their) charter or bylaws; (b) violate any provision of, or require any
filing, registration, consent or approval under, any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to the Borrowers or any of their Subsidiaries or
affiliates (other than entry of the Interim Order or the Final Order, as the
case may be, and as otherwise provided under Section 10.3 hereof); (c) result in
a breach of or constitute a default or require any consent under any indenture
or loan or credit agreement or any other agreement, lease or instrument to which
the Borrowers are a party or by which they or their properties may be bound or
affected except as provided by the Bankruptcy Code and the Interim Order or
Final Order; (d) result in, or require, the creation or imposition of any Lien
(other than as provided hereunder and under the Security Documents), upon or
with respect to any of the properties now owned or hereafter acquired by the
Borrowers except as provided by the Bankruptcy Code and the Interim Order or the
Final Order; or (e) cause the Borrowers (or any Subsidiary or affiliate, as the
case may be, of the Borrowers) to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument except as provided by the
Bankruptcy Code and the Interim Order and Final Order.
C. Legally Enforceable Agreements. Each Facility Document is, or when
delivered under this Agreement will be, a legal, valid and binding obligation of
the Borrowers (and is Subsidiaries, as applicable) enforceable against the
Borrowers, and such Subsidiaries, in accordance with its terms.
D. Litigation. Other than the Chapter 11 Cases and as set forth in
Schedule VII hereto, there are no actions, suits or proceedings pending or, to
the knowledge of the Borrowers, threatened, against or affecting the Borrowers
or any of their Subsidiaries or any of their respective properties before any
court, governmental
20
agency or arbitrator, which may, in any one case or in the aggregate, materially
adversely affect the financial condition, operations, properties or business of
the Borrowers or any such Subsidiary or the ability of the Borrowers to perform
their obligations under the Facility Documents.
E. True and Complete Disclosure. No financial statement, information,
exhibit or report furnished by the Borrowers to the Lender in connection with
this Agreement, including the audited financial statements of the Borrowers for
the fiscal year ended December 31, 1997, contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statements contained therein not materially misleading. All written information
furnished heretofore or hereafter by the Borrowers to the Lender in connection
with this Agreement or the other Facility Documents and the transactions
contemplated hereby and thereby shall not contain a material misstatement of
fact or omit to state a material fact or any fact necessary to make such
information not materially misleading, shall or will be prepared in accordance
with GAAP and do or will present fairly the financial condition of the entities
covered thereby and the results of operations ended thereby, or (in the case of
projections or pro forma financial information) based on reasonable estimates,
on the date as of which such information is stated or certified. Since the
Petition Date, there has been no material adverse change in the condition
(financial or otherwise), business, operations or prospects of the Borrowers or
any of their Subsidiaries, except as disclosed in writing to the Lender prior to
the date hereof, other than as caused by the commencement of the Chapter 11
Cases.
F. Ownership and Liens. Each of the Borrowers and its Subsidiaries has
title to, or valid leasehold interests in, all of its properties and assets,
real and personal, including the properties, assets and leasehold interests
reflected in the financial statements referred to in Section 7.5 hereof (other
than any properties or assets disposed of in the ordinary course of business),
and none of the properties and assets owned by the Borrowers or any of its
Subsidiaries and none of its leasehold interests is subject to any Lien, except
as permitted under Section 9.2 hereof.
G. Taxes. Each of the Borrowers and its Subsidiaries has filed all tax
returns (federal, state and local) required to be filed and has paid all taxes,
assessments and governmental charges and levies thereon to be due, including
interest and penalties, except as prohibited by the Bankruptcy Code.
H. ERISA. Neither the Borrowers nor any ERISA Affiliate maintains or has
an obligation to contribute to any Plan or any Multiemployer Plan. Neither of
the Borrowers nor any ERISA Affiliate nor any fiduciary of any Plan which is not
a Multiemployer Plan (i) has engaged in a nonexempt prohibited transaction
described in section 406 of ERISA or 4975 of the Code or (ii) has taken or
failed to take any action which would constitute or result in a Termination
Event which in each case would have a material adverse effect on the condition
(financial or otherwise), business, operation or prospects of the Borrowers or
any of their Subsidiaries. Neither of the Borrowers nor any ERISA Affiliate has
engaged in a transaction within the meaning of Section 4069 of ERISA which would
have a material adverse effect on the condition (financial or otherwise),
business, operation or prospects of the Borrowers or any of their Subsidiaries.
21
Neither of the Borrowers nor any ERISA Affiliate has incurred any liability to
the PBGC which remains outstanding other than the payments of premiums, and
there are no premium payments which have become due which are unpaid. Neither of
the Borrowers nor any ERISA Affiliate has made a complete or partial withdrawal
under Section 4203 or 4205 of ERISA from a Multiemployer Plan in either case
which would have a material adverse effect on the condition (financial or
otherwise), business, operation or prospects of the Borrowers or any of their
Subsidiaries. There are no pending, or to the knowledge of the Borrowers or any
ERISA Affiliate, threatened claims, actions, proceedings or lawsuits (other than
claims for benefits in the normal course) asserted or instituted against (i) any
Plan or its assets, (ii) any fiduciary with respect to any Plan, or (iii) the
Borrowers or any ERISA Affiliate with respect to any Plan.
I. Subsidiaries. Schedule I hereto is a complete and correct description
of the name, jurisdiction of incorporation and ownership of the outstanding
capital stock of each Subsidiary of the Borrowers or any of their Subsidiaries
and any Investments of the Borrowers or any of their Subsidiaries in existence
on the date hereof. All shares of such stock or other equity or ownership
interests owned by the Borrowers or one or more of their Subsidiaries, as
indicated in such Schedule, are, except as indicated on the attachment to such
Schedule, owned free and clear of all Liens, security interests and other
charges and encumbrances.
J. Credit Arrangements. Schedule II hereto contains a complete and correct
list of all material credit agreements, indentures, purchase agreements,
guaranties, Capital Lease Obligations and other investments, agreements and
arrangements providing for or relating to extensions of credit (including
agreements and arrangements for the issuance of letters of credit or for
acceptance financing) in respect of which the Borrowers or any of their
Subsidiaries is in any manner directly or contingently obligated; and the
maximum principal or face amounts of the credit in question, and the amount
outstanding thereunder, are correctly stated as at the Petition Date, and all
Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule.
K. Licenses and Permits. Except as disclosed in Schedule III, the
Borrowers and each of their Subsidiaries have obtained all material licenses,
permits, authorizations or other forms of permission which under federal, state
and local laws are necessary or advisable to operate its businesses (including,
without limitation, copyrights, trademarks, patents, the SMR Licenses and other
licenses to use tangible or intangible property and similar rights) in the
manner contemplated by the Borrowers or such Subsidiary as of the date of this
Agreement, and neither the Borrowers nor any of its Subsidiaries is in violation
of any valid rights of others with respect to any of the foregoing, other than
as of a result of the Chapter 11 Cases.
L. No Default on Outstanding Judgments or Orders. Each of the Borrowers
has satisfied all judgments against it and neither the Borrowers nor any of
their Subsidiaries is in default with respect to any judgment, writ, injunction,
decree, rule or regulation of any court, arbitrator or federal, state, municipal
or other governmental authority, commission, board, bureau, agency or
instrumentality, domestic or foreign, other than as of a result of the Chapter
11 Cases.
22
M. Labor Disputes and Acts of God. Neither the business nor the properties
of the Borrowers or of any of their Subsidiaries have been affected by any fire,
explosion, accident, strike, lockout or other labor dispute, storm, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance), which has had or could have a material adverse affect on
the business, properties or operations of the Borrowers or any such Subsidiary.
N. Insurance. The Borrowers maintain with financially sound and reputable
insurers adequate insurance with respect to its property and business and those
of its Subsidiaries. Schedule IV hereto sets forth a list of all insurance
currently maintained by the Borrowers and its Subsidiaries.
O. Governmental Regulation. Neither the Borrowers nor any of their
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Investment Company Act of 1940, the Federal Power Act or any
statute or regulation limiting its ability to incur indebtedness for money
borrowed as contemplated hereby.
P. Administrative Priority; Lien Priority.
(a) The Obligations of the Borrowers will constitute allowed
administrative expenses in the Chapter 11 Cases having priority over all
other administrative expenses and unsecured claims against the Borrowers,
now existing or hereafter arising, of any kind or nature whatsoever,
including without limitation all other administrative expenses, charges or
claims of the kind specified in sections 503(b), 506(c), 507(b) and 723(b)
of the Bankruptcy Code, subject, as to priority, only to Carve-Out
Expenses.
(b) The Obligations of the Borrowers will be secured by a valid and
perfected first Lien on and security interest in all of the Collateral,
subject only to the Permitted Liens to which such Liens and security
interests shall be junior and subordinate, and subject further to the
Carve-Out Expenses.
Q. Bankruptcy Court Orders. Each of the Interim Order or the Final Order
and any other order approving the Fiduciary Out, as the case may be, is in full
force and effect, and has not been reversed, stayed, modified or amended.
ARTICLE VIII.
AFFIRMATIVE COVENANTS
So long as any Note shall remain unpaid, each of the Borrowers and any
Subsidiary granting Lender a Lien on Collateral shall:
A. Maintenance of Existence. Except for the Subsidiaries identified on
Schedule III and Schedule V, preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence and good standing
in the jurisdiction of its organization, and qualify and remain qualified, and
cause each of its Subsidiaries to
23
qualify and remain qualified, as a foreign corporation in each jurisdiction in
which such qualification is required.
B. Conduct of Business. (a) Except for the Subsidiaries identified on
Schedule V, continue, and cause each of its Subsidiaries to continue, to engage
in an efficient and economical manner in a business of the same general type as
conducted by it on the date of this Agreement, (b) except as disclosed on
Schedule III, obtain, and cause each of its Subsidiaries to obtain, from time to
time all licenses, permits, authorizations or other forms of permission which
under federal, state and local laws are necessary or advisable for operating and
maintaining the conduct of the business of the Borrowers and their Subsidiaries
(including, without limitation, copyrights, trademarks, patents and licenses to
use tangible or intangible property and similar rights, and (c) use its best
efforts, and cause each of its Subsidiaries to use its best efforts, in each
case consistent with the Budget to preserve and protect the value of the
Collateral.
C. Maintenance of Properties and Executory Contracts and Leases. Except
for the Subsidiaries identified on Schedule V, maintain, keep and preserve, and
cause each of its Subsidiaries to maintain, keep and preserve, all of its
properties (tangible and intangible) including leased property, necessary or
useful in the proper conduct of its business in good working order and
condition, ordinary wear and tear excepted, and shall use its best efforts to
ensure that all leases and executory contracts necessary or useful in the
Borrowers' or any of such Subsidiaries' business or operations remain in full
force and effect (without, however, the assumption thereof under section 365 of
the Bankruptcy Code), except to the extent otherwise consented to by the Lender.
D. Maintenance of Records. Keep, and cause each of its Subsidiaries to
keep, adequate records and books of account, in which complete entries will be
made in accordance with GAAP, reflecting all financial transactions of the
Borrowers and its Subsidiaries.
E. Maintenance of Insurance. Maintain, and cause each of its Subsidiaries
to maintain, insurance including insurance against bodily injury and property
damage with respect to the Collateral with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in the same or a similar business and
similarly situated, which insurance may provide for reasonable deductibility
from coverage thereof. As soon as practicable following the Effective Date and
from time to time thereafter, the Borrowers shall cause the Lender to be named
as loss payee as its interests may appear under any such insurance policies
respecting the Collateral in effect from time to time.
F. Compliance with Laws. Comply, and cause each of its Subsidiaries to
comply, in all respects with all applicable laws, rules, regulations and orders,
such compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments and governmental charges imposed upon it or
upon its property, subject to the limitations and requirements of the Bankruptcy
Code.
G. Right of Inspection. At any reasonable time and from time to time, and
without undue disruption to the Borrowers= business, permit the Lender or any
agent
24
or representative thereof, to examine and make copies and abstracts from the
records and books of account of, and visit the properties of, the Borrowers and
any of their Subsidiaries, and to discuss the affairs, finances and accounts of
the Borrowers and any such Subsidiary with any of their respective officers and
directors and the Borrowers' independent accountants.
H. Reporting Requirements. Furnish to the Lender:
(a) (i) as soon as available and in any event within 60 days after
the end of each fiscal year of the Borrowers, the following financial
statements and (ii) as soon as available and in any event within 90 days
after the end of each fiscal year of the Borrowers, the following
financial statements accompanied by an opinion thereon acceptable to the
Lender by an independent accountant of national standing selected by the
Borrowers and acceptable to the Lender: a consolidated balance sheet of
the Borrowers and their Consolidated Subsidiaries as of the end of such
fiscal year and a consolidated income statement and statement of cash flow
and statement of changes in stockholders' equity of the Borrowers and
their Consolidated Subsidiaries for such fiscal year, all in reasonable
detail and stating in comparative form the respective consolidated figures
for the corresponding date and period in the prior fiscal year and all
prepared in accordance with GAAP;
(b) as soon as available and in any event within 7 days after the
end of each month of each fiscal year of the Borrowers, a consolidated
balance sheet of the Borrowers and their Consolidated Subsidiaries as of
the end of such month and a consolidated income statement and statement of
cash flow and statement of changes in stockholders' equity, of the
Borrowers and their Consolidated Subsidiaries for the period commencing at
the end of the previous fiscal year and ending with the end of such month,
all in reasonable detail and stating in comparative form the respective
consolidated figures for the corresponding date and period in the previous
fiscal year and all prepared in accordance with GAAP and certified by
either the chief financial officer or the chief accounting officer of the
Borrowers (subject to year-end adjustments);
(c) on or before June 26, 1998, financial and cash flow projections,
in form and substance satisfactory to the Lender, which may be the Budget,
for the period ending September 25, 1998, with weekly (provided by the
close of business each Monday) compliance updates showing actual sources
and uses and line item and backup compliance with the Budget for the prior
week;
(d) promptly upon receipt by Borrowers, but in any event no later
than 24 hours thereafter, copies of all consultants' reports, investment
bankers' reports, accountants' management letters, business plans and
similar documents. The Borrowers shall not be obligated to provide copies
of any such documents, however, which are subject to any privilege and as
to which disclosure to the Lender would cause such privilege to be waived,
but if the Borrowers claim that any document is so privileged, they shall
promptly provide the Lender with a letter describing the document and
stating the basis for such claim of privilege;
(e) copies of all proposed pleadings, motions, applications,
25
financial information and other papers and documents to be filed or
received by the Borrowers in the Chapter 11 Cases pertaining to the Loans,
the Disclosure Statement or the Chapter 11 Plan, with sufficient time to
permit review by Lender;
(f) promptly upon their becoming available, but in any event no
later than 24 hours thereafter, copies of all (i) reports, financial
statements or other information delivered by the Borrowers to their
shareholders generally or to the members of any creditors' committee
appointed in the Chapter 11 Cases, (ii) reports, proxy statements,
financial statements and other information generally distributed by the
Borrowers to their creditors or the financial community in general and
(iii) audit or other reports submitted to the Borrowers by independent
accountants in connection with any annual, interim or special audit of the
Borrowers;
(g) promptly upon becoming aware of any Event of Default or Default,
notice thereof, together with a written statement of the chief financial
officer or the chief accounting officer of the Borrowers setting forth the
details thereof and any action with respect thereto taken or contemplated
to be taken by the Borrowers;
(h) promptly upon becoming aware thereof, but in any event no later
than 24 hours after Borrowers learn of such event, notice of any event
which the Borrowers believe in good faith is reasonably likely to have, or
actually has had, a material effect on the condition (financial or
otherwise), business, operation or prospects of the Borrowers or any of
their Subsidiaries;
(i) promptly upon Borrowers becoming aware of such proceedings,
notice of all legal and arbitral proceedings, and of all proceedings by or
before any governmental or regulatory authority or agency, and any
material development in respect of such legal or other proceedings,
against or affecting the Borrowers or any of their Subsidiaries; and
(j) such other information and in such form as the Lender may
reasonably request, such as ad hoc intra-week or daily requests for the
Borrowers' line item cash position, cash flow forecasts or current
payables or balance sheet information from time to time.
I. Further Assurances. Execute, acknowledge, deliver, record, file,
register, perform and do any and all such further acts, deeds, conveyances,
security agreements, assignments, estoppel certificates, financing statements,
assurances and other instruments as the Lender may reasonably request from time
to time in order (a) to carry out more effectively the purposes of this
Agreement or any other Facility Document, (b) to subject to valid and perfected
first priority liens and security interests all Collateral (subject, as to
priority, to the Permitted Liens), (c) to perfect and maintain the validity,
effectiveness and priority of any of the Facility Documents and the Liens and
security interests intended to be created thereby, and (d) to better assure,
convey, grant, assign, transfer, preserve, protect and confirm unto the Lender
the rights granted or now or hereafter intended to be granted to the Lender
under any Facility Document. The assurances contemplated by this Section 8.9
shall be given under applicable nonbankruptcy law as well as the Bankruptcy
Code, it being the intention of the parties
26
that the Lender may request assurances under applicable nonbankruptcy law, and
such request shall be complied with (if otherwise made in good faith by the
Lender) whether or not the Interim Order or the Final Order is in force and
whether or not dismissal of the Chapter 11 Cases or any other action by the
Bankruptcy Court is imminent, likely or threatened.
J. Due Diligence. Reasonably facilitate and cooperate with all Due
Diligence, commencing June 26, 1998.
K. Fiduciary Out. On or before July 10, 1998, the Borrowers shall have
filed an application for approval of the Fiduciary Out.
L. Chapter 11 Plan Process. Prepare and file the Chapter 11 Plan and
Disclosure Statement on or before July 15, 1998, schedule the hearing on the
Disclosure Statement under section 1125 of the Bankruptcy Code and on the
Fiduciary Out to occur on or before August 15, 1998 and actively pursue
Bankruptcy Court approval of the Disclosure Statement and the Fiduciary Out, and
actively pursue and obtain confirmation of the Chapter 11 Plan on or before
September 22, 1998.
ARTICLE IX.
NEGATIVE COVENANTS
So long as any Note shall remain unpaid, each of the Borrowers shall not:
A. Debt. Create, incur, assume or suffer to exist, or permit any of its
direct or indirect wholly-owned Subsidiaries to create, incur, assume or suffer
to exist any Debt, except (a) Debt of the Borrowers under this Agreement and the
Notes; and (b) Debt of the Borrowers existing as of the Petition Date.
B. Liens. Create, incur, assume or suffer to exist, or permit any of its
direct or indirect wholly-owned Subsidiaries to create, incur, assume or suffer
to exist, any Lien, upon or with respect to any of its properties, now owned or
hereafter acquired, except:
(a) Liens provided for under the Security Documents and as set forth
on Schedule VI hereto;
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or if due and payable if they are being
contested in good faith by appropriate proceedings and for which
appropriate reserves are maintained;
(c) Liens imposed by law, such as mechanics=, materialmen's,
landlords=, warehousemen's and carriers= Liens, and other similar Liens,
securing obligations incurred in the ordinary course of business which are
not past due for more than 30 days, or which are being contested in good
faith by appropriate proceedings and for which appropriate reserves have
been established, or which are effectively stayed;
27
(d) Liens under workmen's compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges or liens granted to secure the
Borrowers' obligations under letters of credit issued to secure the
performance of bids, tenders, contracts (other than contracts for the
payment of money), leases (permitted under the terms of this Agreement),
public or statutory obligations, surety, stay, appeal, indemnity,
performance or other similar bonds, or other similar obligations arising
in the ordinary course of business;
(f) judgment and other similar Liens arising in connection with
court proceedings; provided that the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings and for
which appropriate reserves have been established;
(g) easements, rights-of-way, restrictions and other similar
encumbrances which, in the aggregate, do not materially interfere with the
occupation, use and enjoyment by the Borrowers or any such Subsidiary of
the property or assets encumbered thereby in the normal course of its
business or materially impair the value of the property subject thereto;
and
(h) Non-avoidable Liens in existence on the Petition Date.
C. Bankruptcy Court Orders; Administrative Priority; Lien Priority;
Payment of Claims.
(a) Seek, consent to or suffer to exist any modification, stay,
vacation or amendment of the Interim Order or the Final Order, as the case
may be, except for modifications and amendments agreed to by the Lender.
(b) Seek, consent to or suffer to exist a priority for any
administrative expense or unsecured claim against the Borrowers (now
existing or hereafter arising of any kind or nature whatsoever, including
without limitation any administrative expenses, charges or claims of the
kind specified in sections 503(b), 506(c), 507(b) and 723(b) of the
Bankruptcy Code) equal or superior to the priority of the Lender in
respect of the Obligations, except for the Carve-Out Expenses.
(c) Suffer to exist any Lien on the Collateral having a priority
equal or superior to the Liens and security interests in favor of the
Lender in respect of the Obligations, except for Permitted Liens, and
subject to the Carve-Out Expenses.
D. Dividends. Declare or pay any dividends, purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter
outstanding, or make any distribution of assets to its stockholders as such
whether in cash, assets or in obligations of the Borrowers, or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption or retirement of any
28
shares of its capital stock, or make any other distribution by reduction of
capital or otherwise in respect of any of its shares of its capital stock or
permit any of its Subsidiaries to purchase or otherwise acquire for value any
shares of its capital stock or stock of the Borrowers or another such
Subsidiary.
E. Mergers, Etc. Subject to the Fiduciary Out, merge or consolidate with,
or sell, assign, lease or otherwise dispose of (whether in one transaction or in
a series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to, any Person, or acquire all or substantially all
of the assets or the business of any Person (or enter into any agreement to do
any of the foregoing), or permit any of its Subsidiaries to do so, except that:
(a) any such Subsidiary may merge into or transfer assets to the Borrowers and
(b) any Subsidiary may merge into or consolidate with or transfer assets to any
other Subsidiary.
F. Sale of Assets. Subject to the Fiduciary Out, convey, sell, lease,
transfer or otherwise dispose of, or permit any of its direct or indirect
wholly-owned or controlled Subsidiaries to do the foregoing (other than to the
Borrowers), in one transaction or a series of transactions, whether voluntarily
or involuntarily, any part of its business or property, whether now owned or
hereafter acquired except (a) property disposed of in the ordinary course of
business and on ordinary business terms, (b) (so long as no Default or Event of
Default has occurred and is continuing) the Disposition of assets or property no
longer used or useful in the conduct of its business, (c) property disposed of
in accordance with, and as specifically contemplated by, the Budget, or (d)
pursuant to the PageNet Agreement, the Industrial Wireless Agreement, and the
May Industrial Wireless Agreement.
G. Investments and Acquisitions. Make any Acquisition or make or permit to
remain outstanding any Investments, or permit any of its direct or indirect
wholly-owned Subsidiaries to do the foregoing, other than Permitted Investments.
H. Other Payments. Make any payment of principal or interest or otherwise
on account of any Debt or trade payable incurred by it prior to the Petition
Date, provided that such payments may be made if contained in the Budget and, if
necessary, approved by the Bankruptcy Court, or as required by the Bankruptcy
Court upon motion by a third party.
I. Fiscal Year. Permit its fiscal year to end on a day other than December
31, (or if such day is not a Banking Day, the next preceding Banking Day) or
apply to the Bankruptcy Court for authority to do so.
J. Press Releases. Without the Lender's prior approval, (not to be in
unreasonably withheld) issue any press release or similar public announcement in
which the Lender or any affiliate of the Lender is mentioned, except as required
by law or regulation or pursuant to an order of any court, governmental
authority or official.
ARTICLE X.
29
EVENTS OF DEFAULT
A. Events of Default. Any of the following events shall be an "Event of
Default":
(a) the Borrowers shall: (i) fail to pay the principal of any Note
as and when due and payable; or (ii) fail to pay interest on the Notes or
any fee or other amount due hereunder as and when due and payable and such
failure shall continue unremedied for three Banking Days; or
(b) any representation or warranty made or deemed made by any of the
Borrowers or a Subsidiary of Borrowers in this Agreement or in any other
Facility Document to which it is a party or which is contained in any
certificate, document, opinion, financial or other statement furnished at
any time under or in connection with any Facility Document shall prove to
have been incorrect in any material respect on or as of the date made or
deemed made; or
(c) an order with respect to the Chapter 11 Cases shall be entered
by the Bankruptcy Court, or any of the Borrowers shall file an application
for an order with respect to the Chapter 11 Cases (i) appointing a trustee
in any such Chapter 11 Cases or (ii) appointing an examiner in any such
Chapter 11 Cases with the authority to perform duties of a trustee (other
than the duties solely of an examiner) in respect of any of the estates of
the Borrowers or the operation of the business of the Borrowers; or
(d) an order with respect to the Chapter 11 Cases shall be entered
by the Bankruptcy Court dismissing any of the Chapter 11 Cases or
converting any of the Chapter 11 Cases to a chapter 7 case; or
(e) an order shall be entered by the Bankruptcy Court confirming a
Plan of Reorganization in the Chapter 11 Cases, or a Plan of
Reorganization shall be filed which does not contain a provision for
termination of the Commitments and payment in full in cash of all
Obligations of the Borrowers hereunder and under the other Facility
Documents on or before the effective date of such plan or which is not
otherwise satisfactory in all material respects to the Lender; or
(f) an order with respect to any of the Chapter 11 Cases shall be
entered by the Bankruptcy Court without the express prior written consent
of the Lender (i) to revoke, reverse, stay, modify, supplement or amend
the Interim Order or the Final Order or any of the Facility Documents,
(ii) approving the incurrence by any of the Borrowers of any Debt not
contemplated hereunder, (iii) to permit any administrative expense or any
claim (now existing or hereafter arising, of any kind or nature
whatsoever) to have administrative priority equal or superior to the
priority of the Lender in respect of the Obligations, except for Carve-Out
Expenses, (iv) to grant or permit the grant of a Lien on the Collateral or
(v) which terminates or results in the rejection of any material lease or
executory contract used or useful in the operation of the Borrowers'
business or operations; or
(g) an order shall be entered by the Bankruptcy Court that is not
stayed pending appeal granting relief from the automatic stay to any
creditor of any of
30
the Borrowers with respect to any claim secured by any asset or assets of
the Borrowers having book value equal to or exceeding $100,000 in the
aggregate; provided, however, that it shall not be an Event of Default if
relief from the automatic stay is lifted solely for the purpose of
allowing such creditor to determine the liquidated amount of its claim
against any of the Borrowers; or
(h) an application for any of the orders described in clauses (c),
(d), (e), (f) or (g) above shall be made (i) by a Person other than any of
the Borrowers and such application is not contested by the Borrowers in
good faith or the relief requested is granted in an order that is not
stayed pending appeal or (ii) by any of the Borrowers; or
(i) any judgment or order shall be entered against any of the
Borrowers or any of their direct or indirect wholly-owned Subsidiaries or
any other event shall occur or condition exist which does or could
reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), business, operation or prospects of any of the
Borrowers or any of their direct or indirect wholly-owned Subsidiaries,
and there shall be a period of ten consecutive days during which a stay or
enforcement of such judgment or order shall not be in effect; or
(j) the Security Documents shall at any time after their execution
and delivery and for any reason cease: (A) to create a valid and perfected
security interest and Lien in and to the property purported to be subject
thereto having the priority specified in the Security Documents; or (B) to
be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any of the
Borrowers, or any of the Borrowers shall deny it has any further liability
or obligation under any such agreement, or any of the Borrowers shall fail
to perform any of its obligations thereunder; or
(k) any material license, permit or other authorization by any
federal, state or local government or any lease relating to the Collateral
which, in each case, is necessary for the use or operation (whether or not
leased or owned by any of the Borrowers or any of their direct or indirect
wholly-owned Subsidiaries on the date hereof) in the conduct of the
businesses engaged in by any of the Borrowers or any of their direct or
indirect wholly-owned Subsidiaries on the date hereof shall be revoked or
canceled or otherwise terminated; or
(l) the later of the date (i) any of the Borrowers shall cease to
have the exclusive right to file a Plan of Reorganization in the Chapter
11 Cases; or (ii) a third party shall file a competing Plan of
Reorganization; or
(m) any Termination Event with respect to a Plan shall have
occurred, and, 5 days after notice thereof shall have been given to any of
the Borrowers by the Lender, (i) such Termination Event (if correctable)
shall not have been corrected and (ii) the then Unfunded Vested
Liabilities of such Plan exceed $100,000 (or in the case of a Termination
Event involving the withdrawal of a "substantial employer" (as defined in
Section 4001(a)(2) of ERISA), the withdrawing employer's proportionate
share of such excess shall exceed such amount), or any of the Borrowers or
any member of the Controlled Group as employer under a Multiemployer Plan
shall have made a complete or
31
partial withdrawal from such Multiemployer Plan and the Plan sponsor of
such Multiemployer Plan shall have notified such withdrawing employer that
such employer has incurred a withdrawal liability in an amount exceeding
$100,000; or
(n) any of the Borrowers shall: (i) fail to perform or observe any
other term, covenant or agreement on its part to be performed or observed
in any business Facility Document and such failure shall continue
unremedied for 5 Banking Days after notice thereof; or (ii) fail to comply
with any of the terms or provisions of the Interim Order or the Final
Order.
B. Consequences of an Event of Default. If an Event of Default shall occur
and so long as it shall continue or, the Lender may, without further application
to the Bankruptcy Court, by notice to the Borrowers,
(a) declare the Commitments terminated, whereupon the Commitments
will terminate immediately and any fees hereunder shall be immediately due
and payable without further order of or application to the Bankruptcy
Court, presentment, demand, protest or further notice of any kind, all of
which are hereby expressly waived, and an action therefor shall
immediately accrue; or
(b) declare the unpaid principal amount of the Notes, interest
accrued thereon, and all other amounts owing by the Borrowers hereunder or
under the Notes to be immediately due and payable without further order of
or application to the Bankruptcy Court, presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived, and
an action therefor shall immediately accrue.
C. Certain Remedies. If an Event of Default has occurred and is
continuing, the Lender may, on seven Banking Days' prior notice to the Borrowers
and any official committee appointed in the Chapter 11 Cases, exercise all
rights and remedies which the Lender may have hereunder or under any other
Facility Document, the Interim Order, the Final Order or at law (including but
not limited to the Bankruptcy Code and the Uniform Commercial Code) or in equity
or otherwise, without regard to the automatic stay provided for in section 362
of the Bankruptcy Code with respect to the Borrowers or any of its property or
any of the Collateral. Within such seven Banking Days, the Borrowers or any
other party-in-interest may seek a hearing before the Bankruptcy Court on the
sole issue of whether an Event of Default has, in fact, occurred, and the Lender
shall refrain from enforcing any of its remedies hereunder until the Bankruptcy
Court has ruled in respect thereof or an agreement has otherwise been reached.
Unless the Bankruptcy Court shall order that no Event of Default has occurred,
the automatic stay under section 362 of the Bankruptcy Code shall be vacated
with respect to the Collateral, and the Lender shall be free to exercise all of
its rights with respect to the Collateral, subject to the rights of the holders
of Permitted Liens, without further approval of the Bankruptcy Court. All
proceeds in respect thereof shall be applied by the Lender to reduce the
Obligations in the Lender's sole discretion, and the Borrowers shall remain
liable for any deficiencies. With respect to any lease or executory contract
constituting part of the Collateral, the Lender shall have the right to cause
the Borrowers to assume and assign such lease or executory contract to the
Lender or its designee, although nothing herein shall be construed to limit the
rights of the counter-party to such
32
lease or executory contract to adequate assurance and cure payments under
section 365 of the Bankruptcy Code or to impose any obligation on the Lender to
make any such adequate assurance or cure payments. Any proceeds received by the
Borrowers in connection with the assumption and assignment of any executory
contract or lease shall be proceeds of the Collateral and immediately remitted
to the Lender to reduce the Obligations then outstanding. All such remedies
shall be cumulative and not exclusive. No failure on the part of the Lender to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
ARTICLE XI.
MISCELLANEOUS
A. Amendments and Waivers. The Borrowers and the Lender may from time to
time enter into agreements amending, modifying or supplementing this Agreement,
the Notes or any other Facility Documents, and the Lender may from time to time
grant waivers or consents to a departure from the due performance of the
obligations of the Borrowers hereunder or thereunder. Any such agreement, waiver
or consent must be in writing and shall be effective only to the extent
specifically set forth in such writing. In the case of any such waiver or
consent relating to any provision hereof, any Event of Default so waived or
consented to shall be deemed to be cured and not continuing, but no such waiver
or consent shall extend to any other or subsequent Event of Default or impair
any right consequent thereto.
B. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the Lender, the Borrowers and their respective successors and assigns
(including, except for the right to request Loans, any trustee or examiner or
other person with expanded powers succeeding to the rights of the Borrowers or
pursuant to any conversion to a case under chapter 7 of the Bankruptcy Code).
C. The Lender as Party in Interest. The Borrowers hereby stipulate and
agree that the Lender is and shall remain a party in interest in the Chapter 11
Cases and shall have the right to participate, object and be heard in any motion
or proceeding in connection therewith (including but not limited to objections
to use of proceeds of the Loans, to the payment of professional fees and
expenses or the amount thereof, to sales or other transactions outside the
ordinary course of business or to assumption or rejection of any executory
contract or lease).
D. Expenses and Indemnities.
(a) The Borrowers shall reimburse the Lender on demand for all
reasonable costs, expenses, and charges (including, without limitation,
fees and charges of external consultants to and legal counsel for the
Lender and specifically attributable internal legal and consultant
expenses) incurred by the Lender in connection with (i) the negotiation,
preparation, performance or enforcement of this Agreement, any
33
term sheet or commitment letter related thereto, the Notes and the other
Facility Documents, and (ii) the Due Diligence of Lender; provided,
however, that such reimbursable sum shall not exceed $250,000 in the
aggregate. The Lender shall provide the Bankruptcy Court, the Borrowers,
the United States Trustee and any official committee appointed in the
Chapter 11 Cases with periodic statements (as frequently as monthly)
showing the nature, amount and any balance due in respect of any such fees
and expenses incurred by the Lender in accordance herewith. The balance of
any such fees and expenses shall be paid by the Borrowers within thirty
days after receipt unless a party in interest shall have filed a formal
objection thereto with the Bankruptcy Court within such thirty day period.
Thereafter, if the parties are unable to reach agreement in respect
thereof, a hearing before the Bankruptcy Court solely on the issue of the
reasonableness of such fees and expenses will be held.
(b) The Borrowers agree to indemnify the Lender and its directors,
officers, partners, employees, representatives, attorneys and agents from,
and hold each of them harmless against, any and all losses, liabilities,
claims, damages or expenses incurred by any of them arising out of or by
reason of any investigation or litigation or other proceedings (including
any threatened investigation or litigation or other proceedings) relating
to any actual or proposed use by the Borrowers or any Subsidiary of the
proceeds of the Loans, or its role with respect to the Chapter 11 Plan,
including, without limitation, the reasonable fees and disbursements of
counsel incurred in connection with any such investigation or litigation
or other proceedings (but excluding any such losses, liabilities, claims,
damages or expenses incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified).
(c) The obligations of the Borrowers under this Section 11.4 shall survive
the repayment of the Obligations and the termination of the Commitments. E.
Assignment; Participation. This Agreement shall be binding
upon, and shall inure to the benefit of, the Borrowers and the Lender and their
respective successors and assigns, except that the Borrowers may not assign or
transfer its rights or obligations hereunder. The Lender may assign, or sell
participations in, all or any part of the Obligations (including all or a
portion of its Commitment) owing to the Lender to another Lender or other
entity, in which event (a) in the case of an assignment, upon notice thereof by
the Lender to the Borrowers, the assignee shall have, to the extent of such
assignment (unless otherwise provided therein), the same rights, benefits and
obligations as it would have if it were the Lender hereunder; and (b) in the
case of a participation, the participant shall have no rights under the Facility
Documents. The agreement executed by the Lender in favor of the participant
shall not give the participant the right to require the Lender to take or omit
to take any action hereunder except action directly relating to (i) the
extension of a payment date with respect to any portion of the principal of or
interest on any amount outstanding hereunder allocated to such participant, (ii)
the reduction of the principal amount outstanding hereunder or (iii) the
reduction of the rate of interest payable on such amount or any amount of fees
payable hereunder to a rate or amount, as the case may be, below that which the
participant is entitled to receive under its agreement with the Lender. The
Lender may furnish any information concerning the Borrowers in the possession of
the Lender from time to time to assignees and participants (including
prospective assignees and participants); provided that the Lender shall require
any such prospective assignee or such participant (prospective or otherwise) to
agree in
34
writing to maintain the confidentiality of such information.
F. Notices. Unless the party to be notified otherwise notifies the other
party in writing as provided in this Section, and except as otherwise provided
in this Agreement, notices shall be given to the Lender and to the Borrowers by
telecopier or by overnight courier or by personal delivery addressed to such
party at its address on the signature page of this Agreement.
G. Table of Contents; Headings. Any table of contents and the headings and
captions hereunder are for convenience only and shall not affect the
interpretation or construction of this Agreement.
H. Severability. The provisions of this Agreement are intended to be
severable. If for any reason any provision of this Agreement shall be held
invalid or unenforceable in whole or in part in any jurisdiction, such provision
shall, as to such jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without in any manner affecting the validity or
enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
I. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Agreement by signing any such
counterpart.
J. Integration. The Facility Documents set forth the entire agreement
between the parties hereto relating to the transactions contemplated thereby and
supersede any prior oral or written statements or agreements with respect to
such transactions.
K. Governing Law. This Agreement shall be governed by, and interpreted and
construed in accordance with, the internal laws of the State of New York
applicable to contracts made and performed entirely within the State of New
York, except to the extent governed by the Bankruptcy Code.
L. Waiver of Jury Trial. BY ITS EXECUTION AND DELIVERY OF THIS AGREEMENT
THE BORROWERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVE ANY RIGHTS
THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION AGAINST THE
LENDER, ANY PARTICIPANT, ASSIGNEE OR INDEMNIFIED PARTY, BASED HEREON OR ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OTHER
FACILITY DOCUMENT, ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR
ACTIONS OF THE LENDER OR THE BORROWERS IN CONNECTION HEREWITH OR THEREWITH. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER TO ENTER INTO THIS AGREEMENT.
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
GEOTEK COMMUNICATIONS, INC.
By /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: CFO
Address for Notices:
Geotek Communications, Inc.
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Attn: General Counsel
GEOTEK USA, INC.
By /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: CFO
Address for Notices:
Geotek USA, Inc.
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
Attn: General Counsel
With a copy to:
Xxxx, Scholer, Fierman, Xxxx
& Handler, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxx, Esq.
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
S-C RIG INVESTMENTS III, L.P., by
S-C Rig Co., its general partner
36
By /s/ Xxxxx Xxxxxxx
---------------------------------------
Title: Vice President
Address for Notices:
S-C Rig Investments III, L.P.
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxx Fund Management LLC
000 Xxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxx
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
-and-
Xxxx, Weiss, Rifkind, Xxxxxxx
& Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Drain, Esq.
Telephone: (000) 000-0000
Telecopy No.: (000) 000-0000
37
EXHIBIT A-1
PROMISSORY NOTE
$7,000,000 June 29, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, GEOTEK COMMUNICATIONS, INC., a Delaware corporation
and a debtor and debtor-in-possession and GEOTEK USA, INC., a Delaware
corporation and a debtor and debtor-in-possession (together, the "Borrowers"),
hereby promise to pay to S-C RIG INVESTMENTS III, L.P. (the "Lender"), at its
principal office at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
the principal sum of SEVEN MILLION DOLLARS (or such lesser amount as shall equal
the aggregate unpaid principal amount of all Tranche A Loans made by the Lender
to the Borrowers under the Credit Agreement (defined below)), in lawful money of
the United States of America and in immediately available funds, on the dates
and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Tranche A Loan, at such
office, in like money and funds, for the period commencing on the date of such
Tranche A Loan until such Tranche A Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The date and amount of each Tranche A Loan made by the Lender to the
Borrowers, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Tranche A
Note, endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrowers to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Tranche A Loans made by the Lender.
This Note is the Tranche A Note referred to in the Credit Agreement dated
as of June 29, 1998 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") between the Borrowers and the Lender, and
evidences the Tranche A Loans made by the Lender thereunder. Terms used but not
defined in this Tranche A Note have the respective meanings assigned to them in
the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Tranche A Note upon the occurrence of certain events and for prepayments of the
Tranche A Loans upon the terms and conditions specified therein.
Except as permitted by Section 11.5 of the Credit Agreement, this Tranche
A Note may not be assigned by the Lender to any other Person.
Tranche A Note
-2-
This Tranche A Note shall be governed by, and construed in accordance
with, the law of the State of New York.
GEOTEK COMMUNICATIONS, INC.
By_____________________________________
Title:
GEOTEK USA, INC.
By_______________________________
Title:
Tranche A Note
-3-
SCHEDULE OF LOANS
This Tranche A Note evidences the Tranche A Loans made under the
within-described Credit Agreement to the Borrowers, on the dates and in the
principal amounts set forth below, subject to the payments and prepayments of
principal set forth below:
Date Principal
of Amount
Principal of Amount
Loan Notation Paid or Unpaid
Made by Loan Prepaid Amount
------- ---- ------- ------
Tranche A Note
EXHIBIT A-2
PROMISSORY NOTE
$_________ June 29, 0000
Xxx Xxxx, Xxx Xxxx
FOR VALUE RECEIVED, GEOTEK COMMUNICATIONS, INC., a Delaware corporation
and a debtor and debtor-in-possession and GEOTEK USA, INC., a Delaware
corporation and a debtor and debtor-in-possession (together, the "Borrowers"),
hereby promise to pay to S-C RIG INVESTMENTS III, L.P. (the "Lender"), at its
principal office at 000 Xxxxxxx Xxxxxx, Xxxxx 0000, Xxx Xxxx, Xxx Xxxx 00000,
the principal sum of (or such lesser amount as shall equal the aggregate unpaid
principal amount of all Tranche B Loans made by the Lender to the Borrowers
under the Credit Agreement (defined below)), in lawful money of the United
States of America and in immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to pay interest on the
unpaid principal amount of each such Tranche B Loan, at such office, in like
money and funds, for the period commencing on the date of such Tranche B Loan
until such Tranche B Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.
The date and amount of each Tranche B Loan made by the Lender to the
Borrowers, and each payment made on account of the principal thereof, shall be
recorded by the Lender on its books and, prior to any transfer of this Tranche B
Note, endorsed by the Lender on the schedule attached hereto or any continuation
thereof, provided that the failure of the Lender to make any such recordation or
endorsement shall not affect the obligations of the Borrowers to make a payment
when due of any amount owing under the Credit Agreement or hereunder in respect
of the Tranche B Loans made by the Lender.
This Note is the Tranche B Note referred to in the Credit Agreement dated
as of June 29, 1998 (as modified and supplemented and in effect from time to
time, the "Credit Agreement") between the Borrowers and the Lender, and
evidences the Tranche B Loans made by the Lender thereunder. Terms used but not
defined in this Tranche B Note have the respective meanings assigned to them in
the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of this
Tranche B Note upon the occurrence of certain events and for prepayments of the
Tranche B Loans upon the terms and conditions specified therein.
Except as permitted by Section 11.5 of the Credit Agreement, this Tranche
B Note may not be assigned by the Lender to any other Person.
Tranche B Note
-2-
This Tranche B Note shall be governed by, and construed in accordance
with, the law of the State of New York.
GEOTEK COMMUNICATIONS, INC.
By_____________________________________
Title:
GEOTEK USA, INC.
By_______________________________
Title:
Tranche B Note
-3-
SCHEDULE OF LOANS
This Tranche B Note evidences the Tranche B Loans made under the
within-described Credit Agreement to the Borrowers, on the dates and in the
principal amounts set forth below, subject to the payments and prepayments of
principal set forth below:
Date Principal
of Amount
Principal of Amount
Loan Notation Paid or Unpaid
Made by Loan Prepaid Amount
------- ---- ------- ------
Tranche B Note
Exhibit B
CONFORMED COPY
SECURITY AND PLEDGE AGREEMENT
dated as of June 29, 1998
between
GEOTEK COMMUNICATIONS, INC.,
GEOTEK USA, INC. and SUBSIDIARIES, as
Debtors and Debtors-in-Possession
and
S-C RIG INVESTMENTS III, L.P.
Table of Contents
Page
----
ARTICLE 1 DEFINITIONS..........................................................1
Section 1.1 Definitions...............................................1
ARTICLE 2 COLLATERAL...........................................................4
Section 2.1 Security Interest in the Collateral.......................4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES.......................................7
Section 3.1 Representations and Warranties............................7
ARTICLE 4 CASH PROCEEDS OF COLLATERAL..........................................8
Section 4.1 Collateral Account........................................8
Section 4.2 Proceeds of Collateral....................................8
ARTICLE 5 FURTHER ASSURANCES; REMEDIES.........................................9
Section 5.1 Further Assurances; Remedies..............................9
(a) Delivery and Other Perfection...........................9
(b) Preservation of Rights.................................10
(c) Special Provisions Relating to Certain Collateral......10
(d) Events of Default, Etc.................................11
(e) FCC Approval...........................................12
Section 5.2 Deficiency.............................................12
Section 5.3 Removals, Etc..........................................12
Section 5.4 Application of Proceeds................................13
Section 5.5 Attorney-in-Fact.......................................13
Section 5.6 Perfection.............................................13
Section 5.7 Termination............................................13
Section 5.8 Expenses and Indemnities...............................13
Section 5.9 Further Assurances.....................................14
Section 5.10 Releases...............................................14
Section 5.11 Other Financing Statements and Liens...................14
ARTICLE 6 MISCELLANEOUS.......................................................15
Section 6.1 No Waiver..............................................15
Section 6.2 Notices................................................15
Section 6.3 Amendments, Etc........................................15
Section 6.4 Successors and Assigns.................................15
Section 6.5 Captions...............................................15
Section 6.6 Counterparts...........................................15
Section 6.7 Governing Law..........................................15
Section 6.8 Severability...........................................15
ANNEXES
Annex 1 List of SMR Licenses
Annex 2A Pledged Issuer Interests
Annex 2B Pledged Investment Interests
Annex 3 Locations
SECURITY AND PLEDGE AGREEMENT
SECURITY AND PLEDGE AGREEMENT, dated as of June 29, 1998 by and among
GEOTEK COMMUNICATIONS, INC., a Delaware corporation and a debtor and
debtor-in-possession, GEOTEK USA, INC., a Delaware corporation and a debtor and
debtor-in-possession (together the "Borrowers") and their direct and indirect
wholly-owned SUBSIDIARIES signatories hereto, who are also debtors and
debtors-in-possession (the "Subsidiaries;" collectively with the Borrowers, the
"Pledgors") and S-C RIG INVESTMENTS III, L.P., a Delaware limited partnership
(the "Lender").
W I T N E S S E T H:
WHEREAS, the Borrowers and the Lender have entered into a Credit Agreement
(as amended and in effect from time to time, the "Credit Agreement"), dated as
of June 29, 1998, pursuant to which the Lender has agreed to provide the
Borrowers with a $10,000,000 working capital loan facility available in two
tranches, upon the terms and subject to the conditions set forth therein;
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement that the Pledgors shall have executed and delivered to the Lender a
Security and Pledge Agreement in substantially the form hereof;
NOW THEREFORE, in consideration of the premises and the agreements herein
and in order to induce the Lender to make the Loan, the Pledgors hereby agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Definitions. All terms used in this Agreement that are not
otherwise defined shall have the meanings assigned to such terms in the Credit
Agreement. As used in this Agreement, the following terms shall have the
respective meanings indicated below, such meanings to be applicable equally to
both the singular and plural forms of the terms defined:
"Account" shall mean any "account" as such term is defined in section
9-106 of the UCC, now owned or hereafter acquired by any Pledgor and, in any
event, includes, without limitation, (i) all accounts receivable, book debts and
other forms of obligations (other than forms of obligations evidenced by Chattel
Paper, Documents or Instruments) now owned or hereafter received or acquired by
or belonging or owing to any Pledgor (including, without limitation, under any
trade name, style or division
2
thereof) whether arising out of goods sold or services rendered by any Pledgor
or from any other transaction, whether or not the same involves the sale of
goods or services by a Pledgor (including, without limitation, any such
obligation which might be characterized as an account or contract right under
the UCC), (ii) all of the rights of any Pledgor in, to and under all purchase
orders or receipts now owned or hereafter acquired by it for goods or services,
and all rights of any Pledgor to any goods represented by any of the foregoing
(including, without limitation, unpaid seller=s rights of rescission, replevin,
reclamation and stoppage in transit and rights to returned, reclaimed or
repossessed goods), (iii) all moneys due or to become due to any Pledgor under
all contracts for the sale of goods or the performance of services or both by
any Pledgor (whether or not yet earned by performance on the part of any Pledgor
or in connection with any other transaction), now in existence or hereafter
occurring, including, without limitation, the right to receive the proceeds of
said purchase orders and contracts, and (iv) all collateral security and
guarantees of any kind given by any Person with respect to any of the foregoing.
"Agreement" shall mean this Security and Pledge Agreement, as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Chattel Paper" means any "chattel paper," as such term is defined in
section 9-105(1)(b) of the UCC, now owned or hereafter acquired by any Pledgor.
"Collateral" shall have the meaning assigned to that term under Section
2.1 hereof.
"Collateral Account" shall have the meaning assigned to that term in
Section 4.1 hereof.
"Contracts" shall mean all contracts, undertakings or other agreements
(other than Chattel Paper, Documents or Instruments) in or under which any
Pledgor may now or hereafter have any right, title or interest, any agreement
relating to the terms of payment or the terms of performance thereof.
"Documents" shall mean any "document," as such term is defined in section
9-105(1)(f) of the UCC, now owned or hereafter acquired by any Pledgor.
"Domestic Issuers" shall mean, collectively, the direct and indirect
Subsidiaries of the Borrowers so identified on Annex 2A hereto and any other
corporation that becomes a direct or indirect Subsidiary of the Borrowers at any
time after the date of this Agreement.
"Equipment" shall mean any "equipment," as such term is defined in section
9-109(2) of the UCC, now owned or hereafter acquired by any Pledgor and, in any
event, includes, without limitation, all machinery, equipment, furnishings,
fixtures,
3
vehicles, computers and other electronic data-processing and office equipment
now owned or hereafter acquired by any Pledgor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
AFCC@ shall mean the U.S. Federal Communications Commission.
"Foreign Issuers" shall mean, collectively, the direct and indirect
Subsidiaries of the Borrowers so identified on Annex 2B hereto.
"General Intangibles" means any "general intangibles," as such term is
defined in section 9-106 of the UCC, now owned or hereafter acquired by any
Pledgor and, in any event, includes, without limitation, to the extent grantable
by applicable law, any SMR Licenses granted to a Pledgor or under which any
Pledgor has any rights, as the same may from time to time be amended,
supplemented, or otherwise modified, including, without limitation, (i) all
rights of any Pledgor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all right of any Pledgor to damages arising
thereunder and (iii) all rights of any Pledgor to perform and to exercise all
remedies thereunder, all customer lists, trademarks, patents, rights in
intellectual property, licenses, permits, copyrights, trade secrets, proprietary
or confidential information, inventions (whether patented or patentable or not)
and technical information, procedures, designs, knowledge, know-how, software,
data bases, data, skill, expertise, experience, processes, models, drawings,
materials and records, goodwill, rights of indemnification and all right, title
and interest which any Pledgor may now or hereafter have in or under any
Contract, now owned or hereafter acquired by any Pledgor.
"Governmental Authority" shall mean (i) any government or political
subdivision thereof, whether foreign or domestic, national, state, county,
municipal or regional or any other government authority, (ii) any agency or
other instrumentality of any such government, political subdivision or other
governmental entity (including any central bank or comparable agency), (iii) any
court, arbitral tribunal or arbitrator and (iv) any non-governmental regulating
body, to the extent that the rules, regulations or orders of such body have the
force of law.
"Instrument" means any "instrument," as such term is defined in section
9-105(1)(i) of the UCC, now owned or hereafter acquired by any Pledgor other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Interests Collateral" shall have the meaning assigned to such term in
Section 2.1(e) hereof.
"Inventory" means any "inventory," as such term is defined in section
9-109(4) of the UCC, now owned or hereafter acquired by any Pledgor, and
4
wherever located, and, in any event, includes, without limitation, all
inventory, merchandise, goods and other personal property now owned or hereafter
acquired by any Pledgor which are held for sale or lease or are furnished or are
to be furnished under a contract of service or which constitute raw materials,
work in process or materials used or consumed or to be used or consumed in the
business of any Pledgor, or the processing, packaging, delivery or shipping of
the same, and all finished goods.
"Issuers" shall mean, collectively, the Subsidiaries of the Borrowers
identified on Annex 2A and B hereto and any other corporation that becomes a
direct or indirect Subsidiary of the Borrowers at any time after the date of
this Agreement.
"Pledged Interests" shall have the meaning assigned to such term in
Section 2.1(c) hereof.
"SMR Licenses" shall have the meaning assigned to such term under Section
2.1(a) hereof.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York; provided, however, in the event that, by reason
of mandatory provisions of law, any or all of the attachment, perfection or
priority of the Lender=s Lien and security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, the term "UCC" shall mean the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definition related to such provisions.
ARTICLE 2
COLLATERAL
Section 2.1 Security Interest in the Collateral. As collateral security
for the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the Obligations, the Pledgors hereby pledge, grant
and assign to the Lender a Lien and security interest in all right, title and
interest of the Pledgors in the following property, whether now owned by the
Pledgors or hereafter acquired, and whether now existing or hereafter coming
into existence (all being collectively referred to herein as "Collateral"):
(a) all grantable rights of the Pledgors in and to the special mobile
radio licenses identified in Annex 1 hereto (the "SMR Licenses"), including any
replacement licenses under the PageNet Agreement described in clause (f) hereto;
(b) the shares of capital stock or equity or ownership interests of each
Issuer represented by the certificates identified in Annex 2A hereto and all
other shares of
5
capital stock or equity or ownership interests of whatever class of each Issuer,
now or hereafter owned by the Pledgors, in each case, together with the
certificates representing the same (collectively, the "Issuer Interests");
(c) the shares of capital stock or equity or ownership interests of Anam
Telecommunications, Geotek Argentina, S.A. and, to the extent grantable, GMSI,
Inc. represented by the certificates identified in Annex 2B hereto and all other
shares of capital stock or equity or ownership interests of whatever class of
each of those entities, now or hereafter owned by the Pledgors, in each case,
together with the certificates representing the same (collectively, the
"Investment Interests;" together with the Issuer Interests, the "Pledged
Interests");
(d) all shares, securities, moneys or property representing a dividend on
any of the Pledged Interests, or representing a distribution or return of
capital upon or in respect of the Pledged Interests, or resulting from a
split-up, revision, reclassification or other like change of the Pledged
Interests or otherwise received in exchange therefor, and any subscription
warrants, rights or options issued to the holders of, or otherwise in respect
of, the Pledged Interests;
(e) without affecting the obligations of the Pledgors under any provision
prohibiting such action hereunder or under the Credit Agreement, in the event of
any consolidation or merger in which an Issuer is not the surviving business
entity, all shares of each class of the capital stock or equity or ownership
interests of the successor business entity (unless such successor business
entity is one of the Borrowers) formed by or resulting from such consolidation
or merger (the Pledged Interests, together with all other certificates, shares,
securities, properties or moneys as may from time to time be pledged hereunder
pursuant to clause (a) or (b) above and this clause (e) being herein
collectively called the "Interests Collateral");
(f) all rights of any of the Borrowers under and/or to the proceeds of (a)
that certain SMR Frequency Exchange Agreement dated March 14, 1997 by and
between Paging Network of America, Inc. ("PageNet") and Geotek Communications,
Inc. (the APageNet Agreement@) with the exception of the New York MTA license
assigned by PageNet to Geotek US Networks, Inc. and (b) that certain Purchase
Agreement dated April 3, 1998 by and between Geotek Communications, Inc.,
Gelico, Inc. and Industrial Wireless Technologies, Inc.;
(g) the balance from time to time in the Collateral Account;
(h) to the extent grantable all assets of the Pledgors not subject to any
existing Lien, including, without limitation:
(i) all Accounts;
(ii) all Chattel Paper;
6
(iii) all Contracts, including each Contract and other agreement of
the Subsidiaries relating to the sale or other disposition of Inventory or
Equipment, with the exception of the May Industrial Wireless Agreement, as
defined in the Credit Agreement;
(iv) all Documents;
(v) all Equipment;
(vi) all Instruments;
(vii) all Inventory; and
(viii) all proceeds, products, offspring, accessions, rents,
profits, income, benefits, substitutions and replacements of and to any of
the property of the Pledgors described in the preceding clauses of this
Section 2 (including, without limitation, any proceeds of insurance
thereon and all causes of action, claims and warranties now or hereafter
held by the Pledgors in respect of any of the items listed above) and, to
the extent related to any property described in said clauses or such
proceeds, products and accessions, all books, correspondence, credit
files, records, invoices and other papers, including without limitation
all tapes, cards, computer runs and other papers and documents in the
possession or under the control of the Pledgors or any computer bureau or
service company from time to time acting for the Pledgors;
but excluding any right, title and interest of the Pledgors in, to or under any
Collateral (the "Excluded Property"), to the extent the security interest
created hereby or an assignment as security of all or part of the Pledgors=
right, title or interest in, to or under such Excluded Property would breach,
violate or cause a default (which would not be excused or permissible under the
relevant provisions of the Bankruptcy Code or by entry of the Final Order or
Interim Order, as the case may be) under any agreement or Contract, to which any
of the Pledgors is a party or by which it is bound relating to such Excluded
Property (it being understood, however, that the proceeds of Excluded Property
shall not be excluded from the Collateral except to the extent such a breach,
violation or default would arise from the inclusion of such proceeds in the
Collateral (which would not be excused or permissible under the relevant
provision of the Bankruptcy Code)). Without limiting the Borrowers= obligations
under the Credit Agreement with respect to such matters, the foregoing grant of
a security interest in and of itself shall not be deemed (i) to constitute,
require or prevent the assumption of any obligation in the Chapter 11 Cases or
(ii) to prohibit the rejection of any obligation in the Chapter 11 Cases.
Anything herein contained to the contrary notwithstanding, the Pledgors shall
remain liable under any agreements or Contracts, referred to in this Section 2
and to perform all of their respective obligations thereunder, all in accordance
with the respective terms and provisions thereof,
7
but subject to the relevant provisions of the Bankruptcy Code, and the Lender
shall have no obligation or liability under any of the aforementioned agreements
or Contracts by reason of or arising out of the foregoing grant, nor shall
Lender be required or obligated in any manner to perform or fulfill any
obligation of the Pledgors pursuant thereto, or to make any payment, or to
present or file any claim, or to take any action to collect or enforce the
payment of any amounts which may have been assigned to Lender or to which it may
be entitled at any time. However, the Lender shall, at its option, have the
right, but not the obligation, to cure any defaults under any such agreements or
Contracts being assumed and/or assumed and assigned to the Lender or its
designee in connection with the exercise of its remedies hereunder and under
Section 10.3 of the Credit Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties. Each of the Pledgors
represents and warrants to the Lender as of the date hereof as follows:
(a) It is (or will be at the time the Lien created hereby attaches) and
will continue to be until all of the Obligations have been satisfied in full the
sole legal, beneficial and record owner of the Collateral in which it purports
to grant a security interest pursuant to Section 2 hereof and no Lien exists or
will exist upon such Collateral at any time (and no right or option to acquire
the same exists in favor of any other Person), except for the Liens and security
interests in favor of the Lender created or provided for herein, and in the
Credit Agreement and the Liens permitted under Section 9.2 of the Credit
Agreement, which Liens and security interests constitute first priority
perfected Liens and security interests in and to all of such Collateral. There
is no financing statement naming any of the Pledgors as debtor (or similar
documents or instrument of registration under the law of any jurisdiction) now
on file or registered in any public office covering any interest of the Pledgors
in any Collateral.
(b) This Agreement creates a valid first priority security interest in
favor of the Lender in the Collateral, as security for the Obligations. Upon
entry of the Interim Order or Final Order, as the case may be, such security
interest is, or in the case of Collateral in which any of the Pledgors obtains
rights after the date hereof, will be, a perfected first priority security
interest. Upon entry of the Interim Order or Final Order, as the case may be,
all action necessary or desirable to perfect and protect such security interest
has been duly taken.
(c) The Pledged Interests represented by the certificates identified in
Annex 2A and B hereto are, and all other Interests Collateral in which the
Pledgors shall hereafter grant a security interest pursuant to Section 2 hereof
will be, duly authorized, validly issued, fully paid and non-assessable and none
of such Pledged Interests is or will be subject to any restriction under the
charter or by-laws of the Issuer and none of the
8
Pledged Interests represented by the certificates identified in Annex 2A hereto
is or will be subject to any contractual restriction, including any restrictions
upon the transfer of such Pledged Interests.
(d) Annex 2A and B hereto correctly identify, as at the date hereof, the
Issuers of such Pledged Interests, and, in respect of the Domestic Issuers, the
respective class and par value of the shares or interests comprising such
Pledged Interests, the respective number of shares or interests (and registered
owners thereof) represented by each such certificate and the percentage
represented thereby of the total issued and outstanding shares or interests of
capital stock or interests of such class of stock or interests of such Issuers,
and, in respect of the Foreign Issuers, the respective class of the shares or
interests comprising such Pledged Interests and the percentage represented
thereby of the total issued and outstanding shares or interests of capital stock
or interests of such class of stock or interests of such Issuers.
(e) The chief executive office of the Borrowers is located at 000 Xxxxxxxx
Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000.
(f) Each of the Domestic Issuers Identified on Annex 2A hereto has no Debt
other than indebtedness incurred in acquiring the SMR Licenses identified in
Annex 1 hereto (with the exception of such Domestic Issuers= guaranty of the
Senior Secured Notes dated June 30, 1995).
ARTICLE 4
CASH PROCEEDS OF COLLATERAL
Section 4.1 Collateral Account. At Lender's option, there may be
established a cash collateral account (the "Collateral Account") in the name and
under the control of the Lender into which there may be deposited from time to
time the cash proceeds of any of the Collateral (including proceeds of insurance
thereon) and any additional amounts deposited by the Pledgors from time to time
as collateral security for the Obligations. The balance from time to time in the
Collateral Account shall constitute part of the Collateral hereunder and shall
not constitute payment of the Obligations until applied in accordance with the
terms of the Credit Agreement.
Section 4.2 Proceeds of Collateral. Each of the Pledgors agrees that, at
any time after the occurrence and during the continuance of an Event of Default,
if the proceeds of any Collateral hereunder shall be received by it, the
Pledgors shall, upon the request of the Lender, as promptly as possible deposit
such proceeds into the Collateral Account. Until so deposited, all such proceeds
shall be held in trust by the Pledgors for and as the property of the Lender and
shall not be commingled with any other funds or property of the Pledgors.
9
ARTICLE 5
FURTHER ASSURANCES; REMEDIES
Section 5.1 Further Assurances; Remedies. In furtherance of the grant of
the security and pledge interest pursuant to Section 2 hereof, the Pledgors
hereby agree with the Lender as follows:
(a) Delivery and Other Perfection. The Pledgors shall:
(1) if any of the shares, securities, interests, moneys or property
required to be pledged by the Pledgors under Section 2.1 hereof are
received by the Pledgors, forthwith either (i) transfer and deliver to the
Lender such shares or securities or interests so received by the Pledgors
(together with the certificates for any such shares and securities or
interests duly endorsed in blank or accompanied by undated stock powers
duly executed in blank), all of which thereafter shall be held by the
Lender, pursuant to the terms of this Agreement, as part of the Collateral
or (ii) take such other action as the Lender shall deem necessary or
reasonably appropriate to duly record the Lien created hereunder in such
shares, securities, interests, moneys or property in Section 2.1 herein;
(2) deliver and pledge to the Lender any and all Instruments,
endorsed and/or accompanied by such instruments of assignment and transfer
in such form and substance as the Lender may request provided that so long
as no Default shall have occurred and be continuing, the Pledgors may
retain for collection in the ordinary course any Instruments received by
the Pledgors in the ordinary course of business and the Lender shall,
promptly upon request of any of the Pledgors make appropriate arrangements
for making any other Instrument pledged by the Pledgors available to the
Pledgors for purposes of presentation, collection or renewal (any such
arrangement to be effected, to the extent deemed appropriate by the
Lender, against trust receipt or like document);
(3) give, execute, deliver, file and/or record any financing
statement, notice, instrument, document, agreement or other papers that
may be necessary or desirable (in the reasonable judgment of the Lender)
to create, preserve, perfect or validate the security interest granted
pursuant hereto or to enable the Lender to exercise and enforce its rights
hereunder with respect to such security and pledge interest, including,
without limitation, causing any or all of the Interests Collateral to be
transferred into the name of the Lender or its nominee;
(4) keep full and accurate books and records relating to the
Collateral, and stamp or otherwise xxxx such books and records in such
manner as the Lender may reasonably require in order to reflect the
security interests granted by this Agreement; and
10
(5) permit representatives of the Lender, upon reasonable notice, at
any time during normal business hours to inspect and make abstracts from
its books and records pertaining to the Collateral, and permit
representatives of the Lender to be present at the Pledgors= place(s) of
business to receive copies of all communications and remittances relating
to the Collateral, and forward copies of any notices or communications
received by the Pledgors with respect to the Collateral, all in such
manner as the Lender may reasonably require without undue disruption to
Pledgors= business.
(b) Preservation of Rights. The Lender shall not be required to take steps
necessary to preserve any rights against prior parties to any of the Collateral.
(c) Special Provisions Relating to Certain Collateral.
(1) Interests Collateral.
(A) The Pledgors will cause the Interests Collateral to
include all of the capital stock or ownership interests of the
Pledgors in each Issuer.
(B) So long as no Event of Default shall have occurred and be
continuing, the Pledgors shall have the right to exercise all
voting, consensual and other powers of ownership pertaining to the
Interests Collateral for all purposes not inconsistent with the
terms of this Agreement and the other Facility Documents, provided
that the Pledgors agree that it will not vote the Interests
Collateral in any manner that is inconsistent with the terms of this
Agreement or any other Facility Document, and the Lender shall
execute and deliver to the Pledgors or cause to be executed and
delivered to the Pledgors all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without
recourse, as the Pledgors may reasonably request for the purpose of
enabling the Pledgors to exercise the rights and powers which they
are entitled to exercise pursuant to this Section 5.1(c).
(C) The Issuers shall not and Borrowers shall not permit any
Domestic Issuer to incur, create or assume any Debt or incur any
liabilities without the express consent of the Lender.
(2) Equipment. The Pledgors shall, upon the request of the Lender,
deliver to the Lender originals of the certificates of title or ownership
for all Equipment covered by a certificate of title owned by the Pledgors
with the Lender listed as lienholder, and take such other action as the
Lender shall deem appropriate to perfect the security interest created
hereunder in all such Equipment.
11
(d) Events of Default, Etc. During any period during which an Event of
Default shall have occurred and be continuing, but subject to the provisions of
Section 5.1(e) hereof and Section 10.3 of the Credit Agreement:
(1) each Pledgor shall, at the request of the Lender, assemble the
Collateral owned by it at such place or places, reasonably convenient to
both the Lender and the Pledgors, designated in the Lender's request;
(2) the Lender may make any reasonable compromise or settlement
deemed desirable with respect to any of the Collateral and may extend the
time of payment, arrange for payment in installments, or otherwise modify
the terms of, any of the Collateral;
(3) the Lender shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform Commercial
Code (whether or not said Code is in effect in the jurisdiction where the
rights and remedies are asserted) and such additional rights and remedies
to which a secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be asserted,
including, without limitation, the right, to the maximum extent permitted
by law, to exercise all voting, consensual and other powers of ownership
pertaining to the Collateral as if the Lender were the sole and absolute
owner thereof (and the Pledgors agree to take all such action as may be
appropriate to give effect to such right);
(4) the Lender in its discretion may, in its name or in the name of
the Borrowers or otherwise, demand, xxx for, collect or receive any money
or property at any time payable or receivable on account of or in exchange
for any of the Collateral, but shall be under no obligation to do so;
(5) foreclose on this Agreement and the security interests created
thereby, and sell, lease, assign or otherwise dispose of all or any part
of the Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of the Lender or
any of its agents in a public or private sale; and/or
(6) with respect to all unexpired leases and executory contracts
(within the meaning of the Bankruptcy Code), the Lender shall, without
application to or order of the Bankruptcy Court, have the exclusive right,
upon the occurrence and during the continuance of an Event of Default, to
direct the disposition, subject to the rights and remedies enforceable by
or available to parties, other than the Pledgors (including rights under
section 365 of the Bankruptcy Code), with respect to such property, of the
Pledgors= right, title and interest in and to any such property, including
directing the Pledgors to seek any consent necessary to dispose of such
property or assume and assign such property
12
to the Lender or its designee. The proceeds from any such disposition
shall be applied in accordance with the terms of the Credit Agreement.
(e) FCC Approval. Any action by the Lender permitted pursuant to Section
5.1(d) hereof that may reasonably result in the transfer to the Lender or any
other entity of direct or indirect ownership or control of any entity holding
any SMR Licenses shall be subject to, and shall not be undertaken without, the
prior approval of the FCC. In the event that the Lender determines, by notice to
the Pledgor holding such SMR Licenses, to take any such action, such Pledgor
shall, in consultation with the Lender, use such Pledgor=s best efforts to
obtain timely FCC approval for such transfer of ownership or control, including,
but not limited to, preparing, executing and filing all necessary FCC
applications, defending such applications against any petitions to deny or other
adverse pleadings filed with the FCC, and promptly providing any documents or
other information requested by the FCC in connection with such applications. The
Lender shall have the right to prepare and file, on behalf of any such Pledgor,
all applications and documents necessary to obtain FCC approval of such
transfer, and in the event that the Lender chooses to exercise this right, the
Pledgor holding the relevant SMR Licenses shall timely provide the Lender with
all information and assistance requested by the Lender that is, in the sole
discretion of the Lender, necessary for the Lender to make such filings, and
shall reimburse the Lender for all legal and administrative costs incurred in
the filing of such applications and in the diligent prosecution of such
applications at the FCC.
Section 5.2 Deficiency. If the proceeds of sale, collection or other
realization of or upon the Collateral pursuant to Section 5.1(d) hereof are
insufficient to cover the costs and expenses of such realization and the payment
in full of the Obligations, the Pledgors shall remain liable for any deficiency.
Section 5.3 Removals, Etc. Without at least 30 days' prior written notice
to the Lender, the Pledgors shall not maintain any of their books and records
with respect to the Collateral at any office or maintain its principal place of
business at any place, to be located anywhere, other than at one of the
locations identified in Annex 3 hereto under its name or in transit from one of
such locations to another or (ii) change its name, or the name under which it
does business, from the name shown on the signature pages hereto.
Section 5.4 Application of Proceeds. Except as otherwise herein expressly
provided, the proceeds of any collection, sale or other realization of all or
any part of the Collateral of the Pledgors under Section 5.1(d) hereof, and any
other cash of the Pledgors at the time held by the Lender under and in
accordance with Section 4 hereof or this Section 5, shall be applied by the
Lender to reduce the Obligation then outstanding in accordance with the terms of
the Credit Agreement.
As used in this Section 5, "proceeds" of Collateral shall mean cash,
13
securities and other property realized in respect of, and distributions in kind
of, Collateral, including any thereof received under any reorganization,
liquidation or adjustment of debt of the Borrowers or any Issuer of any of the
Collateral.
Section 5.5 Attorney-in-Fact. Without limiting any rights or powers
granted by this Agreement to the Lender while no Event of Default has occurred
and is continuing, upon the occurrence and during the continuance of any Event
of Default, the Lender is hereby appointed the attorney-in-fact of the Pledgors
for the purpose of carrying out the provisions of this Section 5 and taking any
action and executing any instruments which the Lender may deem necessary or
reasonably advisable to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an interest.
Section 5.6 Perfection. Prior to or concurrently with the execution and
delivery of this Agreement, the Pledgors shall (a) file such financing
statements and other documents in such offices as the Lender may request to
perfect the security interests granted by Section 2.1 hereof and (b) deliver to
the Lender all certificates identified in Annex 2A and B hereto, accompanied by
undated stock powers duly executed in blank.
Section 5.7 Termination. When all the Obligations shall have been paid in
full and the Commitments of the Lender under the Credit Agreement shall have
expired or been terminated, this Agreement shall terminate, and the Lender shall
forthwith cause to be assigned, transferred and delivered, against receipt but
without any recourse, warranty or representation whatsoever, any remaining
Collateral and money received in respect thereof, to or on the order of the
Pledgors and to be released and canceled all licenses and rights referred to in
Section 5.6(b) hereof. The Lender shall also execute and deliver to the Pledgors
upon such termination such Uniform Commercial Code termination statements and
such other documentation as shall be reasonably requested by the Pledgors to
effect the termination and release of the Lien of this Agreement on the
Collateral.
Section 5.8 Expenses and Indemnities.
(a) The Pledgors agree to reimburse the Lender for all reasonable
out-of-pocket expenses of the Lender (including, without limitation, the
reasonable fees and expenses of outside and internal legal counsel) of, or
incident to (i) any Event of Default and (ii) any enforcement or collection
proceeding resulting therefrom, including, without limitation, (A) performance
by the Lender of any obligations of the Pledgors in respect of the Collateral
that the Pledgors have failed or refused to perform, (B) any actual or attempted
sale, or any exchange, enforcement, collection, compromise or settlement in
respect of any of the Collateral, and for the care of the Collateral and
defending or asserting rights and claims of the Lender in respect thereof, by
litigation or otherwise, including expenses of insurance, (C) judicial or
regulatory proceedings and (D) the enforcement of this Section 5, and all such
expenses shall be Obligations to the Lender
14
secured under Section 2 hereof.
(b) The Pledgors agree to indemnify the Lender from and against any and
all claims, losses and liabilities (including, without limitation, the
reasonable fees, client charges and other expenses of the Lender's outside and
internal counsel) growing out of or resulting from this Agreement or the
enforcement of any of the terms hereof (including, without limitation, the sale
of Collateral pursuant to a public or private offering and each and every
document produced in furtherance thereof), except claims, losses or liabilities
resulting solely and directly from the Lender's gross negligence or willful
misconduct.
Section 5.9 Further Assurances. The Pledgors agree that, from time to time
upon the written request of the Lender, the Pledgors will execute and deliver
such further documents and do such other acts and things as the Lender may
reasonably request in order fully to effect the purposes of this Agreement.
Section 5.10 Releases. Without limiting the obligations of the Pledgors
hereunder and under the Credit Agreement, upon the sale, assignment, transfer or
other disposition of any property effected in accordance with the Credit
Agreement, the Lender shall, at the Borrowers= expense, execute and deliver to
the Pledgors such Uniform Commercial Code termination statements and such other
documentation as shall be reasonably requested by the Pledgors to effect the
termination and release of the Lien of this Agreement on such property.
Section 5.11 Other Financing Statements and Liens. Except as otherwise
permitted under Section 9.2 of the Credit Agreement and except for precautionary
financing statements filed with respect to operating leases (as defined in
accordance with GAAP) entered into by the Pledgors, the Pledgors shall not file
or suffer to be on file, or authorize or permit to be filed or to be on file, in
any jurisdiction, any financing statement or like instrument with respect to the
Collateral in which the Lender is not named as the sole secured party.
ARTICLE 6
MISCELLANEOUS
Section 6.1 No Waiver. No failure on the part of the Lender or any agent
of the Lender to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Lender or any
agent of the Lender of any right, power or remedy hereunder preclude any other
or further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
15
Section 6.2 Notices. All notices, requests, consents and demands hereunder
shall be made in the manner and at the addresses set forth in Section 11.6 of
the Credit Agreement.
Section 6.3 Amendments, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by the
Pledgors and the Lender. Any such amendment or waiver shall be binding upon the
Lender and the Pledgors.
Section 6.4 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the respective successors and assigns of the
Pledgors and the Lender (provided that the Pledgors shall not assign or transfer
its rights hereunder without the prior written consent of the Lender).
Section 6.5 Captions. The captions and section headings appearing herein
are included solely for convenience of reference and are not intended to affect
the interpretation of any provision of this Agreement.
Section 6.6 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
Section 6.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal law of the State of New York, without
regard to choice of law principles thereof.
Section 6.8 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by law,
(i) the other provisions hereof shall remain in full force and effect in such
jurisdiction and shall be liberally construed in favor of the Lender order to
carry out the intentions of the parties hereto as nearly as may be possible and
(ii) the invalidity or unenforceability of any provision hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have caused this Security and
Pledge Agreement to be duly executed and delivered as of the day and year first
above written.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
16
Title: CFO
GEOTEK USA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
ANSA COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
CLW COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
CUMULOUS HOLDING CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GELICO, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GELICO OF CHICAGO, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
17
GENERAL PHOTONICS HOLDING
CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOPOWER, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK ACQUISITION CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK AMERICA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK ASIA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK DATA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
18
GEOTEK FINANCING CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK GMBH HOLDING
CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK INTERNATIONAL
NETWORKS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK HOLDINGS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF ATLANTA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF BOSTON, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
19
GEOTEK OF CHICAGO, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF DALLAS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF HOUSTON, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF MIAMI, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF NEW YORK, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF ORLANDO, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
20
GEOTEK OF PHILADELPHIA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF TAMPA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK OF WASHINGTON, D.C.,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK SERVICES, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK SUBSIDIARY INDUSTRIES,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
GEOTEK TECHNOLOGIES, INC.
21
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
LASER ACQUISITION CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
METRO NET SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
M.I.S. HOLDINGS ACQUISITION
CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
MOBILE MESSAGE SERVICE OF
TEXAS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
OAKHILL COMMUNICATIONS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
XXXX USA, INC.
22
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
PATLEX INTERNATIONAL
CORPORATION
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
PATLEX OF DELAWARE, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM MICROWAVE,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF ATLANTA,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF BOSTON, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF BUFFALO,
INC.
23
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF CHARLOTTE,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF CHICAGO,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF CINCINNATI,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF D.C., INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF DALLAS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF DENVER, INC.
24
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF GREENSBORO,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF HARTFORD,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF
INDIANAPOLIS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
25
POWERSPECTRUM OF
JACKSONVILLE, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF KANSAS CITY,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF MEMPHIS,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF MIAMI, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF
MINNEAPOLIS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF NASHVILLE,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
26
Title: CFO
POWERSPECTRUM OF NEW YORK
CITY, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF ORLANDO,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF
PHILADELPHIA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF PHOENIX,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF ROCHESTER,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF SALT LAKE
27
CITY, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF
SAN FRANCISCO, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF SEATTLE,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF TAMPA,
INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
RESHEF USA, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
U.S.I. VENTURE CORP.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
POWERSPECTRUM OF
28
NEW ORLEANS, INC.
By: /s/ Xxxx X. Xxxxxx
------------------------------
Title: CFO
[This page intentionally left blank]
29
S-C RIG INVESTMENTS III, L.P., by
S-C Rig Co., its general partner
By: /s/ Xxxxx Xxxxxxx
-----------------------------
Title: Vice President
Exhibit D
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
)
In re: ) Chapter 11
)
GEOTEK COMMUNICATIONS, INC., et al., ) Case Nos. 98-1375
) through 98-1447 (PJW)
Debtors. )
) (Jointly Administered)
)
FINAL ORDER AUTHORIZING DEBTORS TO
OBTAIN POSTPETITION FINANCING PURSUANT TO
SECTIONS 364(c)(1), 364(c)(2) AND 364(c)(3) OF THE
BANKRUPTCY CODE AND BANKRUPTCY RULES 4001(c) AND 9014
Upon the Motion (the "Motion") dated June 26, 1998 of Geotek
Communications, Inc. and Geotek USA, Inc., debtors and debtors in possession
(the "Debtors"), seeking an order of this Court pursuant to sections 364(c)(1),
364(c)(2), and 364(c)(3) of title 11 of the United States Code, 11 U.S.C.
ss.101, et seq. (the "Bankruptcy Code"), and Rules 4001(c) and 9014 of the
Federal Rules of Bankruptcy Procedure (the "Bankruptcy Rules"), (1) authorizing
the execution, delivery and performance by the Debtors of a Credit Agreement (as
amended, the "Credit Agreement"), dated as of June 29, 1998, entered into
between the Debtors and S-C Rig Investments III, L.P. ("S-C Rig"), and the other
Facility Documents, as defined therein (capitalized terms used herein and not
otherwise defined herein shall have the meanings given to such terms in the
Credit Agreement), including the related Security and Pledge Agreement, and (2)
authorizing the
31
Debtors to obtain postpetition financing up to the principal amount of
$10,000,000 (x) with priority pursuant to section 364(c)(1) of the Bankruptcy
Code over any and all administrative expenses of the kind specified in sections
503(b) and 507(b) of the Bankruptcy Code, with the exception of Carve-Out
Expenses, and (y) to be secured pursuant to section 364(c)(2) of the Bankruptcy
Code by a perfected first priority senior security interest in and Lien upon all
of the Collateral, comprising all of the property, real and personal, tangible
and intangible, of the Debtors' and their wholly-owned subsidiaries' estates
under section 541 of the Bankruptcy Code that was not subject to a Lien on the
Petition Date, with the exception of Permitted Liens, in which case the Lien
thereon of S-C Rig pursuant to section 364(c)(3) of the Bankruptcy Code shall be
a second priority security interest, junior only to such Permitted Liens, and
subject, in each case, to the Carve-Out Expenses; and pursuant to Bankruptcy
Rule 4001(c)(1), notice of the Motion having been given to, inter alia, all
Persons entitled to notice under section 364(c) of the Bankruptcy Code and
Bankruptcy Rule 4001(c), all Persons filing a notice of appearance under
Bankruptcy Rule 2002, Xxxxxxx Xxxxx Global Allocation Fund, Inc., Xxxxxxx Xxxxx
Equity/Convertible Series (Global Allocation Portfolio), Xxxxxx Network Systems
and the United States Trustee for this District; and upon the record of the
hearing held on July 23, 1998 and upon all of the pleadings filed with the Court
and all of the proceedings had before the Court, and after due deliberation and
consideration and sufficient cause appearing therefor;
It is FOUND, DETERMINED, ORDERED AND ADJUDGED, that:
1. This Court has core jurisdiction over these proceedings and the parties
and property affected hereby pursuant to 28 U.S.C. ss.157(b) and 1334.
2
2. The Motion shall be, and hereby is, granted, and any objections thereto
are hereby overruled.
3. The Debtors have an immediate need to obtain financing (i) to permit
the orderly continuation of their business and to preserve their property, (ii)
to satisfy other working capital needs, and (iii) to pursue the confirmation of
a chapter 11 plan of reorganization.
4. The Debtors are unable to obtain adequate unsecured credit allowable
under section 503(b)(1) of the Bankruptcy Code as an administrative expense. The
Debtors are also unable to obtain credit secured by security interests or Liens
junior to the security interests and Liens proposed to be granted to S-C Rig in
the Collateral, with the exception of the Permitted Liens, pursuant to sections
364(c)(2) or (3) of the Bankruptcy Code. Financing in the amount provided by the
Credit Agreement is unavailable to the Debtors without the Debtors granting to
S-C Rig (i) pursuant to section 364(c)(1) of the Bankruptcy Code, allowed claims
with respect to all indebtedness and Obligations of the Debtors under the Credit
Agreement, the Notes and Security and Pledge Agreement related thereto, having
priority over any and all administrative expenses, claims or charges of the kind
specified in sections 503(b), 506(c) and 507(b) of the Bankruptcy Code, with the
exception of Carve-Out Expenses (comprising (x) amounts payable pursuant to 28
U.S.C. ss.1930(a) and (y) allowed fees and expenses of professionals retained in
the Chapter 11 Cases pursuant to sections 327 and 1103 of the Bankruptcy Code up
to, but not exceeding $500,000 in the aggregate (inclusive of any holdbacks, but
excluding any unused retainers established prior to the Petition Date); provided
that such Carve-Out Expenses shall not be used for attacking S-C Rig, its claims
3
or interests, the Chapter 11 Plan or the Loans), and (ii) pursuant to section
364(c)(2) of the Bankruptcy Code, security for such Obligations by the granting
of a first priority senior security interest in and Lien upon all of the
Collateral with the exception of Collateral securing any Permitted Lien, in
which case the security interest in and Lien of S-C Rig upon such Collateral
shall pursuant to section 364(c)(3) of the Bankruptcy Code be a second priority
security interest, junior only to such Permitted Lien, and subject in each case
to the Carve-Out Expenses. The ability of the Debtors to obtain sufficient
working capital and liquidity through the incurrence of indebtedness for
borrowed money and other financial accommodations is vital to the Debtors. The
preservation and maintenance of the value of the Debtors and their estates is
integral to the Debtors' reorganization efforts pursuant to the provisions of
chapter 11 of the Bankruptcy Code.
5. It appearing that the Credit Agreement and other Facility Documents,
including the Security and Pledge Agreement, have been negotiated in good faith
and at arm's-length between the Debtors and S-C Rig, any credit extended and
Loans made to the Debtors by S-C Rig pursuant to the Credit Agreement shall be
deemed to have been extended by S-C Rig in good faith, including as that term is
used in section 364(e) of the Bankruptcy Code. The Liens, security interests and
priorities created or authorized in this Order are entitled to the benefits and
protection of section 364(e) of the Bankruptcy Code.
6. The Debtors are immediately authorized to borrow under the Credit
Agreement up to an aggregate of $10,000,000, inclusive of prior borrowings, for
the purposes and upon all of the terms and conditions provided for by the Credit
Agreement.
4
7. The Debtors are expressly authorized to execute and deliver, among
other documents, the Credit Agreement, the Security and Pledge Agreement and the
Notes in substantially the form of the exhibits attached to the Motion, as well
as any other Facility Documents, and the transactions embodied therein are
approved, and the Debtors are authorized and directed to execute, deliver and
perform and do all acts that may be required in connection therewith. Upon
execution and delivery of the Credit Agreement and other Facility Documents, the
Credit Agreement and the other Facility Documents shall constitute valid and
binding obligations of the Debtors, enforceable against the Debtors in
accordance with other terms.
8. The Commitments of S-C Rig to extend Loans under the Credit Agreement
are expressly subject to the terms and conditions provided for in the Credit
Agreement.
9. For all of the Debtors' Obligations and indebtedness arising under the
Credit Agreement and the other Facility Documents, S-C Rig hereby is granted
pursuant to section 364(c)(1) of the Bankruptcy Code an allowed claim having
priority over any and all administrative expenses, charges and claims of the
kind specified in sections 503(b), 506(c) and 507(b) of the Bankruptcy Code,
with the exception of Carve-Out Expenses (comprising (x) amounts payable
pursuant to 28 U.S.C. ss.1930(a), and (y) allowed fees and expenses of
professionals retained in the Chapter 11 Cases pursuant to sections 327 and 1103
of the Bankruptcy Code up to, but not exceeding $500,000 in the aggregate
(inclusive of any holdbacks, but excluding any unused retainers established
prior to the Petition Date); provided that such Carve-Out Expenses shall not be
used for attacking S-C Rig, its claims or interests, the Chapter 11 Plan or the
Loans). No other
5
claim having a priority superior to or pari passu with that granted by this
Order to S-C Rig shall be granted while any amount under the Credit Agreement is
unpaid or the Commitments remain outstanding.
10. No costs or expenses of administration of the Chapter 11 Cases or any
future proceeding or case which may result therefrom, including in any
superseding chapter 7 case, shall be charged against the Collateral, pursuant to
section 506(c) of the Bankruptcy Code or otherwise, without the prior written
consent of S-C Rig, and no such consent shall be implied from any action,
inaction, or acquiescence by S-C Rig.
11. As security for all of the Debtors' Obligations and indebtedness
arising under the Credit Agreement and the other Facility Documents, S-C Rig
hereby is granted (effective immediately and without the necessity of the
execution by the Debtors or any of the other Pledgors under the Security and
Pledge Agreement of security agreements or otherwise), pursuant to section
364(c)(2) of the Bankruptcy Code, a first priority perfected senior security
interest in and Lien upon all of the Collateral (comprising all of the property,
real and personal, tangible and intangible, of the Debtors' and their
wholly-owned subsidiaries' estates under section 541 of the Bankruptcy Code that
was not subject to a Lien on the Petition Date, with the exception of Permitted
Liens, but excluding (i) such property as specifically excluded from the
description of "Collateral" in Section 5.1(a) of the Credit Agreement, (ii) the
common stock of Geotek Technologies Israel (1992) Limited ("GTIL"), and (iii)
the Debtors' rights under (a) the Technology License dated July 2, 1992 among
Xxxxxx Armament Development Authority ("Xxxxxx"), Galram Technologies
Industries, Limited ("Galram") and the predecessor of GTIL, (b) the Joint
Venture Agreement dated May 14, 1992, as amended, among Xxxxxx,
6
Galram and the predecessor of Geotek Communications, Inc., and (c) the
Exploitation Agreement dated July 2, 1992 between the predecessor of GTIL and
the predecessor of Geotek USA, Inc.), together with the proceeds thereof and the
earnings thereon, such security interests and Liens described in this paragraph
being senior in all respects to any and all post-Petition Date Liens, if any,
which encumber such Collateral, with the exception of Collateral securing any
Permitted Lien, in which case the security interest in and Lien of S-C Rig upon
such Collateral shall pursuant to section 364(c)(3) of the Bankruptcy Code be a
second priority security interest, junior only to such Permitted Lien; provided
that the security interests and liens of S-C Rig hereunder and under the Credit
Agreement and the other Facility Documents shall be subject to the Carve-Out
Expenses. The security interests and Liens granted to S-C Rig hereunder (i)
shall not be (x) subject to any Lien or security interest which is avoided and
preserved for the benefit of the Debtors' estates under section 551 of the
Bankruptcy Code or otherwise or (y) subordinated to or made pari passu with any
other Lien or security interest under section 364(d) of the Bankruptcy Code or
otherwise, except as provided above with respect to Permitted Liens, and (ii)
are deemed valid, perfected and enforceable Liens and security interests at all
times from and after the date of entry of this Order, without regard to whether
such Liens and security interests are perfected under applicable non-bankruptcy
law.
12. The security interests and Liens granted to S-C Rig pursuant to this
Order shall be valid and perfected without the requirement that S-C Rig or any
other Person file or record financing statements, notices of Lien or similar
instruments in any jurisdiction or take any other action.
7
13. The Debtors shall use the amounts borrowed under the Credit Agreement
only for the purposes permitted thereunder.
14. The Debtors are authorized to do and perform all acts, to make,
execute and deliver all instruments and documents and to pay all fees which may
be reasonably required or necessary for the Debtors' performance under the
Credit Agreement and the other Facility Documents, including, without
limitation: (i) execution of any notes and security agreement in connection with
the Credit Agreement and (ii) the non-refundable payment to S-C Rig of the
Facility Fee and such other costs and expenses as may be due from time to time
including, without limitation, reasonable attorneys' fees and disbursements, as
provided in the Facility Documents.
15. Subject only to the provisions of Section 10.3 of the Credit
Agreement, the automatic stay under section 362 of the Bankruptcy Code hereby is
vacated and modified to the extent necessary so as to permit S-C Rig to
exercise, upon the occurrence of an Event of Default (as defined in the Credit
Agreement), all rights and remedies provided for in the Facility Documents.
Notwithstanding any other provision of the Credit Agreement or this Order, S-C
Rig shall have no obligation to make any Loans upon the occurrence of an Event
of Default.
16. The Credit Agreement, the other Facility Documents and the provisions
of this Order shall be binding upon S-C Rig, the Debtors and their estates, and
any Person asserting a Lien, claim or interest in any of the Collateral, and
their respective successors and assigns (including any trustee hereinafter
appointed or elected for the estates of any of the Debtors) and shall inure to
the benefit of S-C Rig and the Debtors and (except with respect to any trustee
hereinafter appointed or elected for the estate of
8
any Debtor) their respective successors and assigns.
17. The provisions of this Order shall be effective upon entry of this
Order by the Clerk of the Court. All actions taken pursuant to this Order, and
the terms of this Order, shall survive the entry of, and shall govern with
respect to any conflict with, any order that may be entered confirming a Plan of
Reorganization of any of the Debtors or that may be entered converting any of
the Chapter 11 Cases to chapter 7 cases, subject to applicable provisions of the
Bankruptcy Code. The terms and provisions of this Order as well as the Liens and
security interests and all rights of S-C Rig and all Obligations of the Debtors
created or arising pursuant to this Order shall continue in these Chapter 11
Cases and any superseding proceedings under the Bankruptcy Code, and such Liens
and security interests shall maintain their priority as provided by this Order
until all Obligations are satisfied by payment in full and are thereby
discharged. So long as amounts are outstanding under the Credit Agreement and
the other Facility Documents, the Obligations of the Debtors under the Credit
Agreement and the other Facility Documents shall not be discharged by the entry
of an order confirming a plan of reorganization in any of these Chapter 11 Cases
and, pursuant to section 1141(d)(4) of the Bankruptcy Code, the Debtors have
waived such discharge.
18. To the extent any of the terms and conditions of the Credit Agreement
or the other Facility Documents are in conflict with the terms of this Order,
the provisions of this Order shall control.
20. The Debtors and S-C Rig have acknowledged that (i) the Debtors would
be in default under Section 10.1(e) of the Credit Agreement only if a plan is
confirmed or filed by the Debtors which does not contain a provision for
termination of
9
the Commitment (as defined in the Credit Agreement) and payment in full in cash
of all Obligations of the Debtors under the Credit Agreement and the other
Facility Documents on or before the effective date of such plan, and (ii) the
Debtors have the right under Section 8.12 of the Credit Agreement to propose a
plan which varies from the terms of the Term Sheet (as defined in the Credit
Agreement). The parties reserve all rights with respect to the Fiduciary Out and
the Breakup Fee.
19. The notice given by the Debtors of the Motion constitutes sufficient
notice under the circumstances of the Motion and complies with this Court's
Interim Order Authorizing Debtors to Obtain Postpetition Financing, dated June
29, 1998.
Dated: Wilmington, Delaware
July __, 1998
______________________________
UNITED STATES BANKRUPTCY JUDGE
10
Exhibit E
CONFORMED COPY
Summary Term Sheet for
Debtor in Possession Financing Agreement
and Plan of Reorganization
The following is a summary of terms, subject to the negotiation and execution of
definitive documentation and the other conditions set forth herein, for a $10
million debtor in possession financing facility and a related chapter 11 plan of
reorganization for the Debtors (defined below), proposed by S-C Rig Investments
III, L.P. and the Debtors. It is for discussion purposes only and does not
constitute a commitment to lend or otherwise alter any agreements or rights of
S-C Rig Investments III, L.P. or any of its affiliates with or against Geotek
Communications, Inc., Geotek USA, Inc. or any other person or entity, all of
which rights and agreements are expressly reserved.
Borrower: Geotek Communications, Inc. ("Geotek") and Geotek
USA, Inc. (together, the "Debtors")
Lender: S-C Rig Investments III, L.P. and/or an affiliate or
assignee thereof (the "Lender" or "S-C Rig III")
DIP Facility: Working capital facility to provide requirements for
Debtors' continued operations (as provided in Budget
(defined below) and certified to Lender, in advance
of making loans, by a responsible officer of
Geotek), with the goal of funding such operations
through the confirmation of the Chapter 11 Plan,
defined below ("DIP Facility")
Amount of DIP Facility: Up to $10,000,000 available as follows:
$7,000,000 initial availability to be made on or
before June 29, 1998 ("Initial DIP Facility"),
provided Debtors shall have filed this Term Sheet
with the Bankruptcy Court and be actively pursuing
confirmation of the Chapter 11 Plan (defined below),
and up to $3,000,000 to be made on or after August
10, 1998, provided Debtors shall have filed the
Chapter 11 Plan and related disclosure statement,
the hearing on such disclosure statement is
scheduled for on or before August 15, 1998 and the
Debtors are actively pursuing approval of the
Fiduciary Out, as defined below, and confirmation of
the Plan, subject in each case to such conditions
precedent to advances and subsequent advances as are
customarily found in DIP facilities, including
absence of an event of default or termination event,
including as
described herein.
Interest: 12 percent per annum; after an event of default, 14
percent per annum. Interest shall be payable monthly
in arrears, based on a 360 day year.
Fees: Facility fee of $150,000, plus reimbursement of all
of Lender's expenses (including, without limitation,
expenses of counsel and other consultants retained
by Lender and allocable portion of in-house
personnel) attributable to negotiation,
documentation and monitoring and enforcement of DIP
Facility, to be paid from DIP Facility proceeds or
otherwise as provided herein.
Maturity: Borrowings under the DIP Facility are to be repaid
in full on the date which is the earlier of (a)
October 15, 1998, (b) the occurrence of an event of
default, or (c) the effective date of a chapter 11
plan for the Debtors.
Collateral and
Superpriority Claim: All amounts outstanding under DIP Facility,
including all fees in respect thereof, shall be
secured by first lien (subject to the Carve Out,
defined below) on all unencumbered assets of the
Debtors and their wholly-owned direct and indirect
subsidiaries under section 364(d) of the Bankruptcy
Code (without limitation, excluding any licenses
owned by or stock of Geotek U.S. Networks, Inc.,
Geotek License Holdings, Inc. and XxxXxxxxxx
Communications, Inc.), including assignable rights
in respect of 68 SMR licenses (and stock in
subsidiary(ies) holding licenses), rights under SMR
Frequency Exchange Agreement with Paging Network of
America, Inc. ("PageNet Agreement"), rights under
April 3, 1998 Purchase Agreement with Industrial
Wireless Technologies, Inc., interests in Anam
Telecommunications, Geotek Argentina, S.A., and, to
the extent grantable, GMSI, Inc., inventory and
equipment of the Debtors' subsidiaries, and proceeds
of each of the foregoing. Upon either (a) event of
default or (b) termination of the DIP Facility, the
automatic stay shall be lifted without further
action on the part of Lender (other than seven days'
prior notice to the Debtors and any official
committee) to permit Lender to foreclose on or take
other action with respect to the collateral;
provided that the Debtors and any official committee
shall have such seven days to attempt to prevent
such lifting of the automatic stay on the sole basis
that such event of default or termination event has
not occurred. All liens shall be automatically
perfected
pursuant to bankruptcy court order; however, the
automatic stay shall be modified to permit other
perfection at Lender's option.
In addition, Lender shall have an allowed
superpriority claim for such amounts under sections
364(c)(1) and 503(b) of the Bankruptcy Code over
expenses of the kind specified in sections 503(b),
506(c), 507(b) and 726(b) of the Bankruptcy Code,
other than with respect to fees of U.S. trustee and
bankruptcy court-approved professional fees, not to
exceed $500,000 ("Carve Out").
Conditions of DIP
Facility Including
Interim DIP Facility: Entry by Lender and Debtors on or before June 29,
1998 into definitive documentation in form and
substance satisfactory to Lender and its counsel
("Definitive DIP Documentation"), including a form
of budget (the "Budget") acceptable to the Lender
for Debtors' operations during the term of the DIP
Facility. The Definitive DIP Documentation shall
contain such conditions, representations and
warranties and covenants as are customarily found in
DIP facilities and additional provisions appropriate
in Lender's judgment for this transaction,
including:
1. Satisfactory completion (in Lender's sole
determination) on or before June 29, 1998 of
financial, business, operational and legal
due diligence in Debtors with respect to DIP
Facility), including as to collateral.
2. Entry on or before June 29, 1998 of an order
of the bankruptcy court ("Interim Order") in
form and substance satisfactory to Lender and
its counsel, including a finding that Interim
DIP Facility is in good faith and otherwise
complies with section 364(e) of the
Bankruptcy Code, authorizing and approving:
(a) Interim DIP Facility
(b) Reimbursement of all of Lender's
fees and expenses, as described
above.
(c) Debtors' agreement to provide
Lender with notice of any event or
occurrence having a material effect
on the business, conditions or
prospects, financial or otherwise,
of the Debtors' business, as
promptly as practicable, but in any
event within 24 hours of
the Debtors' receipt of such
information
(d) The date of the final hearing on
the DIP Facility
3. Entry on or before July 13, 1998, of an order
of the bankruptcy court ("Final Order") in
form and substance satisfactory to Lender and
its counsel, including (a) a finding that DIP
Facility is in good faith and otherwise
complies with section 364(e) of the
Bankruptcy Code, authorizing and approving
the DIP Facility.
4. On or before June 29, 1998, Geotek shall have
retained a crisis manager, restructuring and
reorganization financial advisor and/or other
consultants to the Debtors, from alternatives
agreed upon by the Lender and Geotek, to
perform, among other duties, all postpetition
CEO functions, adherence to Budget,
consolidation of operations, facilitation of
Lender's due diligence for Chapter 11 Plan,
described herein, and preparation of revised
Business Plan (collectively, "Crisis
Manager"). The parties agree upon Zolfo
Xxxxxx Management, LLC (per Xxxxxxx XxXxxxxx
and Xxxxxx Xxxxxxx), assisted with respect to
development of the Business Plan by
Renaissance Worldwide, Inc., as Crisis
Manager.
5. Commencing on or before June 26, 1998, Debtor
shall facilitate and cooperate with
financial, business, operational and legal
due diligence by Lender and its advisors in
the Debtors.
6. Debtors shall provide Lender and its counsel
with copies of all proposed pleadings and
orders in the bankruptcy case(s) pertaining
to the DIP Facility and/or the Chapter 11
Plan, with sufficient time to permit review
and comment by Lender. The Debtors shall not
issue any press release in which Lender or
any affiliate or agent of Lender is mentioned
without Lender's prior review and approval.
Events of
Default/Termination
Events: Such events of default as are customarily found in
DIP facilities and others appropriate in Lender's
judgment, including:
7. Non-payment when due of amounts due under
DIP Facility.
8. Material breach of any covenant contained in
Definitive DIP Documentation, including
material breach of Budget.
9. Dismissal of bankruptcy case, any conversion
to chapter 7, appointment of a bankruptcy
trustee or an examiner or other person with
expanded powers (with the exception of the
Crisis Manager), termination of the Debtors'
exclusive right to file a plan or
reorganization, or the incurrence of other
indebtedness under section 364 of the
Bankruptcy Code.
10. Any stay or modification of the Interim Order
or the Final Order.
11. Debtors' failure to prepare a chapter 11 plan
in substantial conformity with Chapter 11
Plan described below (preferably with key
creditors' agreement) or to file such plan
and related disclosure statement on or before
July 15, 1998.
12. Failure to schedule hearing on bankruptcy
court approval of disclosure statement for
Chapter 11 Plan on or before August 15, 1998.
13. Chapter 11 Plan not confirmed by September
22, 1998.
14. The filing of a chapter 11 plan or a motion
for approval of an agreement that does not
provide for the payment of the DIP Facility
or that is otherwise not in substantial
conformity with Chapter 11 Plan.
Governing Law: Internal law of the State of New York
Chapter 11 Plan
("Chapter 11 Plan") To be proposed by Geotek and S-C Rig III for Geotek,
and subsidiaries to the extent the addition of such
subsidiaries is mutually agreed to by S-C Rig III
and Geotek (together, the "Debtors"). 1/
Classes and
Proposed Treatment Administrative Expenses (including DIP Facility) and
Priority Claims: Payment in full in cash on
effective
----------
1/ Rather than reorganize certain subsidiaries, assets of such subsidiaries
in S-C Rig III's discretion that are necessary to the continued operation
of the Debtors' business as a going concern may be purchased by
Reorganized Geotek.
date or as otherwise permitted by Bankruptcy Code.
Senior Secured Bonds: ($150 million plus accrued
interest): New Senior Secured Notes, due January 1,
2007. Interest at 12%, PIK to January 1, 2003;
thereafter current pay. Collateral: current
collateral plus currently unencumbered SMR licenses
not subject to PageNet Agreement and exclusive of
cash receivable under PageNet Agreement (provided
further that Reorganized Geotek may use up to $26
million of restricted cash collateral for working
capital purposes). In addition, holders of New
Senior Secured Notes shall receive 1% of the New
Common Stock of Reorganized Geotek.
HNS Obligations: ($24.6 million plus accrued
interest on Convertible Secured Note and $15.4
million line of credit): New $24.6 million Secured
Note, due January 1, 2007. Use of $11 million of
prior Advances under PSU Agreement to be discussed.
Interest at 12%, PIK to January 1, 2003; thereafter,
current pay. Collateral: current collateral. Any
remaining obligations under $15.4 million line of
credit: New Secured Note, due January 1, 2008.
Interest, 13% PIK to January 1, 2004; thereafter
current pay. Collateral: current collateral, subject
to adjustment upon release of $26 million restricted
New Senior Secured Notes' cash collateral.
S-C Rig III ($40 million): New Senior Notes, due
January 1, 2008. Interest, 13% PIK to January 1,
2004; thereafter, current pay. Negative pledge on
all assets; first lien on unencumbered former DIP
Facility collateral and "passive" second lien on New
Senior Secured Notes collateral.
Raphael: Reorganized Geotek to assume Technology
Agreements with such modifications as are reasonably
acceptable to S-C Rig III. In addition, Raphael
shall receive 3.3% of the New Common Stock of
Reorganized Geotek.
Other Non-subordinated Geotek Unsecured Claims: ($20
million):
Senior Subordinated Convertible Notes and Other
Subordinated Claims ($75 million):
All Other Unsecured Claims (Non-Geotek Obligations)
($54 million):
In the case of each of the foregoing, a package of
New Notes and Reorganized Geotek Common Stock,
reasonably reflecting the rights of each class, to
be discussed.
Preferred Stock: 4.5% of the New Common Stock of
Reorganized Geotek, as follows:
Series H: 2.4%
All Junior Series: 2.1%
Geotek Common Stock: 0.5% of the New Common Stock of
Reorganized Geotek.
Non-consensual
Confirmation The Chapter 11 Plan proponents also reserve the
right to modify the Chapter 11 Plan to permit
confirmation under section 1129(b) of the Bankruptcy
Code.
Rights Offering: S-C Rig III or an affiliate shall underwrite a $20
million rights offering, effective upon the Chapter
11 Plan's effective date, for 80% of the New Common
Stock of Reorganized Geotek.2/ S-C Rig III - or such
affiliate shall have the right to purchase up to $10
million of such shares on the same terms and
conditions as the other participants in the rights
offering. Eligible participants in rights offering
(on pro rata basis of amount subscribed, if offering
is oversubscribed) shall be all creditors and
shareholders of Geotek as of Chapter 11 Plan record
date. S-C Rig III or such affiliate shall have the
right to nominate a majority of the board of
directors of Reorganized Geotek until the earlier of
the date that it owns less than 40% of the New
Common Stock and the third anniversary of the
completion of the rights offering. Each participant
in the rights offering shall receive its pro rata
share of warrants to purchase, at the rights
offering price (a) up to $20 million of additional
shares of Reorganized Geotek Common Stock within two
years after the conclusion of the rights offering
and (b) up to an additional $20 million shares of
Reorganized Geotek Common Stock up to four years
after the conclusion of the rights offering.
Filing and Hearing
Dates: Chapter 11 Plan and related disclosure statement to
be
----------
2/ Subject to tax analysis regarding preservation of any necessary net
operating loss carryforwards.
filed on or before July 15, 1998. Disclosure
Statement hearing to be scheduled for on or before
August 15, 1998. Chapter 11 Plan to be confirmed on
or before September 22, 1998.
Conditions to
Rights Offering: Satisfactory completion by S-C Rig III (in its sole
determination) on or before September 15, 1998 of
due diligence with respect to Debtors' financial,
business, operational and legal condition and
prospects, including, without limitation:
1. Reasonably allowable non-subordinated claims
against Geotek not in excess of $265,000,000.
2. Title to license, intellectual property,
etc., including with respect to Raphael.
3. Satisfactory ongoing relationships of
Reorganized Debtors with HNS, IBM and
Raphael.
4. Registration rights agreement for New Common
Stock of Reorganized Geotek on reasonable
terms and conditions.
5. Debtors' projected cash needs and uses, after
extension of DIP Facility, and without
application of any encumbered cash, shall not
exceed $10,000,000 through October 2, 1998.
6. Satisfactory means to assume executory
contracts that are reasonably necessary for
Reorganized Debtors.
7. Going concern valuation of Debtors under
Chapter 11 Plan exceeds (in reasonable
determination of S-C Rig III) liquidation
value of Debtors.
Completion by Geotek on or before August 3, 1998 of
revised going-concern Business Plan reasonably
satisfactory to S-C Rig III.
No material averse change in Debtors' business,
financial condition, operations or property from and
after June 29, 1998.
Adherence by Debtors to DIP Facility Budget and
otherwise no event of default/termination event
under DIP Facility.
Fiduciary Out and
Breakup Fee Geotek acknowledges that Lender is committing
substantial time and resources to the Chapter 11
Plan
process, which will be proceeding over a short
period. Lender acknowledges Geotek's fiduciary
duties in connection therewith. In furtherance of
the foregoing, the parties agree that the Debtors
shall be free to respond to (including assisting in
due diligence, subject to appropriate
confidentiality restrictions), inquiries or offers
by third parties, and to negotiate and accept such
offers, to acquire all or a substantial portion of
the Debtors' assets or businesses and/or to finance
a chapter 11 plan, and to provide prompt notice of
the proposed Chapter 11 Plan and this Term Sheet to
all parties previously contacted by the Debtors or
their advisors or who had previously expressed an
interest in such a transaction ("Third Party
Transaction"); provided that (a) S-C Rig III shall
be paid $600,000 from the proceeds of any Third
Party Transaction upon the closing thereof unless
S-C Rig III shall have materially breached this Term
Sheet ("Breakup Fee") and (b) the Debtors shall not
accept a Third Party Transaction that results in an
investment to acquire equity in Reorganized Debtors
that is less than $20 million plus 7.5% of the
enterprise value for reorganized Debtors, or a
comparable purchase price, under the Chapter 11
Plan. Nothing in the foregoing sentence shall
preclude the Debtors from engaging in negotiations
with any party in interest regarding the terms and
conditions of any Chapter 11 Plan. The foregoing in
its totality shall be referred to as the "Fiduciary
Out."
For the avoidance of doubt, assuming the following
hypothetical facts, a Third Party Transaction would
have to exceed the amounts of the second two columns
in the following example to meet the Fiduciary Out.
Court determined "Reorganized" Equity Investment 7.5%
Enterprise Value Lender Debt ----------------- ----
---------------- -------------
$330M $275M $20M 24.75M
Agreed to as of the
29th day of June, 1998
S-C Rig Investments III, L.P., by Geotek Communications, Inc.
S-C Rig Co., its general partner
/s/ Xxxxx Xxxxxxx /s/ Xxxx X. Xxxxxx
------------------------------ ----------------------------
Name: Xxxxx Xxxxxxx Name: Xxxx X. Xxxxxx
Title: Vice President Title: CFO
Geotek USA, Inc.
/s/ Xxxx X. Xxxxxx
----------------------------
Name: Xxxx X. Xxxxxx
Title: CFO
