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EXHIBIT II
[EXECUTION COPY]
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Agreement") is made as of the 21st day
of December, 1995, by and among GEOTEK FINANCING CORPORATION, a Delaware
corporation (the "Borrower"), GEOTEK COMMUNICATIONS, INC., a Delaware
corporation and the corporate parent of the Borrower ("Geotek" or the
"Guarantor") and XXXXXX NETWORK SYSTEMS, INC., a Delaware corporation (the
"Lender"). The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquired 900 MHz License Purchase Price" means, with respect to
any Acquired 900 MHz License (and related Third-Party 900 MHz License Assets, if
applicable), the full purchase price (whether in cash, stock or other form of
consideration) paid (or to be paid) by Holdings for such Acquired 900 MHz
License (and related Third-Party 900 MHz License Assets, if applicable). To the
extent that any portion of any Acquired 900 MHz License Purchase Price includes
consideration other than cash or stock, the value of such consideration shall be
determined in good faith by the Board of Directors of Geotek.
"Acquired 900 MHz Licenses" means the Auction 900 MHz Licenses
and the Third-Party 900 MHz Licenses.
"Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with Geotek or any of
its Subsidiaries. A Person shall be deemed to control another Person if the
controlling Person owns 10% or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agreement Accounting Principles" means GAAP in effect at the
time of the preparation of the financial statements referred to in Section 4.4,
applied in a manner consistent with that used in preparing such statements.
"Article" means an article of this Agreement unless another
document is specifically referenced.
"Auction 900 MHz Licenses" means the 900 MHz Licenses to be
purchased by Holdings from the FCC with the proceeds of the Loans.
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"Business Day" means a day on which banks are open for business
in New York, New York and Baltimore, Maryland.
"Capital Stock" means, with respect to any Person, any and all
shares, interests, participations, rights in or other equivalents (however
designated) of such Person's capital stock, and any rights (other than debt
securities convertible into capital stock), warrants or options exchangeable for
or convertible into such capital stock.
"Capitalized Lease" of a Person means any lease of property by
such Person as lessee which would be capitalized on a balance sheet of such
Person prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of
the obligations of such Person under Capitalized Leases which would be shown as
a liability on a balance sheet of such Person, prepared in accordance with
Agreement Accounting Principles.
"Collateral" means those assets of the Borrower in which the
Lender has been granted a security interest pursuant to the Pledge Agreement to
secure payment of the Obligations.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means, with respect to any person, any and all
shares, interests or other participations in, and other equivalents (however
designated and whether voting or nonvoting) of, such person's common stock,
whether outstanding on the date hereof or issued after the date hereof, and
includes, without limitation, all series and classes of such common stock, in
each case, to the extent that such series or class of common stock does not rank
prior, as to the payment of dividends or as to the distribution of assets upon
any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with Geotek or any Subsidiary, are treated as a
single employer under Section 414(b) or 414(c) of the Internal Revenue Code of
1986, as amended from time to time.
"Default" means an event described in Article VII.
"Disclosure Letter" means the letter delivered by the Obligors to
the Lender pursuant to Article IV hereof, which letter shall describe, on a
Section-by-
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Section basis, any exceptions to the representations and warranties set forth in
such Article, and which letter is expressly made a part hereof as if contained
herein.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Federal Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code, as
amended from time to time.
"FCC" means the Federal Communications Commission or any other
regulatory body which succeeds to the functions of the Federal Communications
Commission.
"FCC License" means any license, permit or authorization issued
by the FCC.
"Funding Cutoff Date" means June 30, 1996.
"Funding Date" means the Initial Funding Date and each Subsequent
Funding Date.
"GAAP" means generally accepted accounting principles.
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract and shall include, without
limitation, the contingent liability of such Person in connection with any
application for a Letter of Credit. When used as a verb, the words "guaranty"
and "guarantee" shall have correlative meanings.
"Holder" means the Lender and any other holder of Registrable
Securities to whom the Lender has properly transferred Registrable Securities in
accordance with the terms hereof.
"Holdings" means Geotek License Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Borrower.
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"Holdings Note" means a promissory note in substantially the form
of Exhibit C hereto, duly executed and delivered to the Borrower by Holdings in
the face principal amount of $24,500,000.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price of
property (other than accounts payable arising in the ordinary course of such
Person's business on terms customary in the trade), (iii) obligations, whether
or not assumed, secured by Liens on property now or hereafter owned or acquired
by such Person, (iv) obligations which are evidenced by notes, acceptances or
other similar instruments (including interest rate protection and other
derivative agreements), (v) Capitalized Lease Obligations and (vi) obligations
for which such Person is obligated pursuant to a Guaranty.
"Indenture" means that certain Indenture, dated as of June 30,
1995, between Geotek, as Issuer, and IBJ Xxxxxxxx Bank & Trust Company, as
Trustee, relating to Geotek's 15% Senior Secured Discount Notes due 2005.
"Initial Funding Date" means the Business Day on which the Lender
makes the first Loan to the Borrower hereunder, which date shall not be prior to
January 2, 1996, and, subject to the satisfaction of the conditions set forth in
Article III hereof, shall be selected by the Borrower.
"Initial Loan" means the Loan to be made to the Borrower on the
Initial Funding Date.
"Investment" of a Person means any loan, advance, extension of
credit (excluding accounts receivable arising in the ordinary course of
business), deposit account (other than deposit accounts used for the payment of
obligations in the ordinary course of business otherwise permitted hereunder) or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, notes, debentures or other
securities of any other Person made by such Person, excluding trade credit in
the ordinary course of business and investments paid for solely in nonredeemable
Capital Stock of such Person.
"Letter of Credit" of a Person means a letter of credit or
similar instrument which is issued upon the application of such Person, upon
which such Person is an account party or for which such Person is in any way
liable.
"Lien" of a Person means any security interest, mortgage, pledge,
hypothecation, assignment, lien (statutory or other), claim, charge,
encumbrance, title retention agreement, lessor's interest under a Capitalized
Lease or analogous instrument, in, of or on any property of such Person.
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"Loan Amount" shall mean the principal amount of any Loan made
hereunder.
"Loans" means the loans made by the Lender to the Borrower
hereunder and "Loan" means any of them.
"Loan Documents" means this Agreement, the Note, the Pledge
Agreement and any other document or agreement executed and delivered in
connection herewith.
"Material Adverse Effect" means (a) a material adverse effect
upon the business, operations, properties, assets, condition (financial or
otherwise) or prospects of either of the Obligors and their respective
Subsidiaries, taken as a whole or (b) the impairment in any material respect of
the ability of any of the Obligors to perform their respective obligations under
any Loan Document or of the Lender to enforce or collect any of the Obligations.
"Multiemployer Plan" means a Plan that is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA to Geotek or any member of the
Controlled Group is obligated to make contributions.
"900 MHz Licenses" means FCC Licenses to construct and operate
900 MHz Specialized Mobile Radio systems.
"NASD" means the National Association of Securities Dealers, Inc.
"Note" means a promissory note in substantially the form of
Exhibit A hereto, duly executed and delivered to the Lender by the Borrower in
the face principal amount of $24,500,000, including any amendment, modification,
renewal or replacement of such promissory note.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Note, all accrued and unpaid fees and expenses and all
other obligations (monetary and other) of the Obligors to the Lender arising
under the Loan Documents, including, without limitation, any indemnity
obligations under Annex B to this Agreement.
"Obligors" means, collectively, the Borrower and Geotek, and
their respective successors and assigns, and "Obligor" means either of the
foregoing.
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"Permitted Liens" means the following types of Liens:
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(a) Liens for taxes, assessments or governmental charges or
claims either (i) not delinquent or (ii) contested in good faith by
appropriate proceedings and as to which the Borrower or any of its
Subsidiaries shall have set aside on its books such reserves as may be
required pursuant to GAAP;
(b) judgment Liens not giving rise to a Default if such reserve
or other appropriate provision, if any, as shall be required by GAAP
shall have been made in respect thereof and any appropriate legal
proceedings which may have been duly initiated for the review of such
judgment shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; and
(c) Liens created under the Pledge Agreement.
"Person" means any corporation, natural person, firm, joint
venture, partnership, trust, unincorporated organization, enterprise, limited
liability company or other entity, government or any department or agency of any
government.
"Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code as to which Geotek or any Subsidiary may have any
liability.
"Pledge Agreement" means a Pledge Agreement, dated as of the date
hereof, between the Borrower and the Lender, substantially in the form attached
hereto as Exhibit B.
"Registrable Securities" means the Common Stock of Geotek issued
or issuable upon conversion of the Loans. As to any particular Registrable
Securities, once issued such securities shall cease to be Registrable Securities
when (A) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of in accordance with such registration statement, (B) they
shall have been distributed to the public pursuant to Rule 144 (or any successor
provision) under the Securities Act, (C) they shall have been otherwise
transferred, new certificates for them not bearing a legend restricting further
transfer shall have been delivered by Geotek and subsequent disposition of them
shall not require registration or qualification of them under the Securities Act
or any similar state law then in force, (D) they shall have ceased to be
outstanding, or (E) they are otherwise no longer Transfer Restricted Securities.
"Registration Expenses" means all expenses incident to Geotek's
performance of or compliance with Annex B hereof, including, without limitation,
all registration and filing fees, all fees and expenses of complying with
securities or blue sky laws, fees and other expenses associated with filings
with the NASD, all
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printing expenses, the fees and disbursements of counsel for Geotek and of its
independent public accountants, the expenses of any special audits made by such
accountants required by or incident to such performance and compliance, but not
including (a) fees and disbursements of counsel retained by the Holders, or (b)
underwriting discounts and commissions payable with respect to the Holders'
Registrable Securities.
"Regulation G" means Regulation G of the Board of Governors of
the Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by Persons other than banks,
brokers or dealers for the purpose of purchasing or carrying margin stock.
"Rentals" of a Person means the aggregate amounts payable by such
Person under any lease of real or personal property having an original term
(including any required renewals or any renewals at the option of the lessor or
lessee) of one year or more but does not include any amounts payable under
Capitalized Leases of such Person.
"Reportable Event" means a reportable event as defined in Section
4043 of ERISA and the regulations issued under such Section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code and of Section 302
of ERISA shall be a reportable event regardless of the issuance of any waiver in
accordance with Section 412(d) of the Internal Revenue Code.
"Section" means a numbered section of this Agreement, unless
another document is specifically referenced.
"Securities Act" means the Securities Act of 1933, as amended
from time to time.
"Single Employer Plan" means a Plan maintained by Geotek or any
member of the Controlled Group for employees of Geotek or any member of the
Controlled Group.
"Subsequent Funding Date" means each date on which the Lender
makes a Loan to the Borrower hereunder, after the Initial Funding Date.
"Subsidiary" means any corporation more than 50% of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by Geotek or by one or more Subsidiaries or by Geotek
and one or more Subsidiaries, or any similar business organization which is so
owned or controlled.
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"Third-Party 900 MHz License Assets" means assets relating to or
used in the operation of Specialized Mobile Radio systems under Third-Party 900
MHz Licenses to be acquired by Holdings with the proceeds of the Loans in
connection with the acquisition of such Third-Party 900 MHz Licenses.
"Third-Party 900 MHz Licenses" means 900 MHz Licenses (or 100% of
the equity interests in Persons whose sole assets are unencumbered 900 MHz
Licenses and related Third-Party 900 MHz License Assets (all of which shall be
free and clear of Liens)) for the Detroit and Los Angeles metropolitan markets
or for any of the thirty-seven (37) other metropolitan markets previously
publicly disclosed by Geotek as being markets in which Geotek or its
Subsidiaries currently holds 900 MHz Licenses, to be purchased by Holdings from
certain third parties (other than the FCC) with the proceeds of the Loans.
"Total Acquired 900 MHz License Purchase Price" means the
aggregate Acquired 900 MHz License Purchase Price paid (or to be paid) by
Holdings for all Acquired 900 MHz Licenses (and related Third-Party 900 MHz
License Assets, if any).
"Trading Day" means, with respect to a securities exchange or
automated quotation system, a day on which such exchange or system is open for
trading.
"Transfer Restricted Securities" means the Common Stock of Geotek
issuable upon conversion of the Loans, until such Common Stock (i) has been
effectively registered under the Securities Act and disposed of in accordance
with the registration statement covering it, (ii) is distributed to the public
pursuant to Rule 144, (iii) may be sold or transferred pursuant to Rule 144(k)
(or any similar provisions then in force) under the Securities Act or otherwise
or (iv) may be sold freely in full in any one three month period before Rule
144(k) is available.
"Unfunded Liabilities" means, on any date of determination, (a)
in the case of Single Employer Plans, all "unfunded benefit liabilities" as
defined in Section 4001(a)(18) of ERISA, and (b) in the case of Multiemployer
Plans, the liability of Geotek and its Subsidiaries if they were to incur a
complete or partial withdrawal from any Multiemployer Plan.
"Unmatured Default" means an event which, but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" means any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by Geotek or one or more Wholly-Owned Subsidiaries, or
by Geotek and one or more Wholly-Owned Subsidiaries, or any similar business
organization which is so owned or controlled.
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The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE LOANS
2.1. The Loans. Subject to the terms and conditions hereinafter
set forth, commencing on the Initial Funding Date, the Lender agrees to make one
or more (but not more than one on any day) Loans to the Borrower in the
aggregate principal amount of the lesser of (i) eighty percent (80%) of the
Total Acquired 900 MHz License Purchase Price and (ii) $24,500,000; provided
that at no time shall the aggregate amount of the principal amount of all Loans
outstanding be greater than eighty percent (80%) of the aggregate Acquired 900
MHz License Purchase Price of all Acquired 900 MHz Licenses (and related
Third-Party 900 MHz License Assets, if any) purchased by Holdings with the
proceeds of such Loans. The Loans shall be evidenced by the Note and secured by
the Collateral. The unpaid principal balance and any accrued but unpaid interest
owing on all Loans shall be payable in full on the second anniversary of the
Initial Funding Date (the "Maturity Date"). The Lender's obligation to make
Loans hereunder shall terminate on the Funding Cutoff Date.
2.2. Interest. Prior to the occurrence of a Default, the Loans
shall bear interest, payable quarterly in arrears on (a) the last day of each
calendar quarter hereafter commencing on the later of (i) March 31, 1996 and
(ii) the last day of the first calendar quarter ending after the Initial Funding
Date, and (b) on the Maturity Date, at a fixed rate per annum equal to twelve
percent (12%). From and after the occurrence of a Default, the Loans shall bear
interest, payable on demand, at a fixed rate per annum equal to eighteen percent
(18%). All interest shall be computed for actual days elapsed on the basis of a
360-day year. In computing interest on any Loan, the Funding Date of such Loan
shall be included and the date of payment shall be excluded so long as such
payment is received by the Lender at or before 12:00 p.m. (New York time) on the
date when due.
2.3. Interest Laws. Notwithstanding any provision to the contrary
contained in this Agreement or the other Loan Documents, the Borrower shall not
be required to pay, and the Lender shall not be permitted to collect, any amount
of interest in excess of the maximum amount of interest permitted by law
("Excess Interest"). If any Excess Interest is provided for or determined by a
court of competent jurisdiction to have been provided for in this Agreement or
in any of the other Loan Documents, then in such event: (1) the provisions of
this subsection shall govern and control; (2) the Borrower shall not be
obligated to pay any Excess Interest; (3) any Excess Interest that the Lender
may have received hereunder shall be, at the Lender's option, (a) applied as a
credit against the outstanding principal balance of the Obligations or accrued
and unpaid interest (not to exceed the maximum amount permitted by law), (b)
refunded to the payor thereof, or (c) any
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combination of the foregoing; (4) the interest rate(s) provided for herein shall
be automatically reduced to the maximum lawful rate allowed from time to time
under applicable law (the "Maximum Rate"), and this Agreement and the other Loan
Documents shall be deemed to have been, and shall be, reformed and modified to
reflect such reduction; and (5) the Borrower shall not have any action against
the Lender for any damages arising out of the payment or collection of any
Excess Interest. Notwithstanding the foregoing, if for any period of time
interest on any Obligations is calculated at the Maximum Rate rather than the
applicable rate under this Agreement, and thereafter such applicable rate
becomes less than the Maximum Rate, the rate of interest payable on such
Obligations shall remain at the Maximum Rate until the Lender shall have
received the amount of interest which the Lender would have received during such
period on such Obligations had the rate of interest not been limited to the
Maximum Rate during such period.
2.4. Method of Funding Loan. (a) If the proceeds of a Loan are to
be used concurrently with the making of such Loan to purchase any Auction 900
MHz Licenses, then not later than 12:00 noon (New York time) on the applicable
Funding Date, the Lender shall make available the applicable Loan Amount in
funds immediately available by wire-transferring such funds to the Borrower,
which shall promptly remit such funds to the FCC (or to Holdings for prompt
remittance to the FCC).
(b) If the proceeds of a Loan are to be used concurrently
with the making of such Loan to purchase any Third-Party 900 MHz Licenses and
related Third-Party 900 MHz License Assets, then not later than 12:00 noon (New
York time) on the applicable Funding Date, the Lender shall make available the
applicable Loan Amount in funds immediately available by wire-transferring such
funds to the Borrower, which shall promptly remit such funds to the seller of
such Licenses and Assets (or to Holdings for prompt remittance to such seller).
(c) If the proceeds of a Loan are to be used subsequent to
the applicable Funding Date to purchase any Acquired 900 MHz Licenses and, if
applicable, any related Third-Party 900 MHz License Assets, then not later than
12:00 noon (New York time) on the applicable Funding Date, the Lender shall make
available the applicable Loan Amount in funds immediately available by wire-
transferring such funds to an escrow account to be established by the Lender and
the Borrower with an escrow agent and subject to an escrow agreement reasonably
acceptable to the Lender and the Borrower (the "Escrow Account"). The Loan
Amount shall not be released from the Escrow Account until the Lender and the
Borrower certify to the Escrow Agent in writing that no Default or Unmatured
Default is then continuing and that such Loan Amount will be used concurrently
with its release from escrow to purchase one or more Acquired 900 MHz Licenses
and, if applicable, related Third-Party 900 MHz License Assets and such funds
shall be distributed by the Escrow Agent directly to the FCC or other
third-party seller, as applicable. Any funds remaining in the Escrow Account on
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the Maturity Date (or upon the occurrence of any Default), shall be immediately
returned to the Lender.
2.5. Method of Payment. All payments of principal, interest and
expenses hereunder shall be made by wire transfer in immediately available funds
to the Lender at the First National Bank of Xxxxxxxx, Xxxxxxxxx XX 00000, ABA#
000000000, Account No. 000-0000-0 (for the account of Xxxxxx Network Systems,
Inc.) by noon (New York time) on the date when due. If any payment of principal
of or interest on the Loan shall become due on a day which is not a Business
Day, such payment shall be made on the next succeeding Business Day and, in the
case of a principal payment, such extension of time shall be included in
computing interest in connection with such payment.
2.6. Schedule to Note. The Borrower hereby authorizes the Lender
to endorse on the Schedule annexed to the Note the principal amount of all Loans
made by the Lender to the Borrower as well as all reductions to the aggregate
principal amount of the Loans related to the conversion of such principal amount
to shares of Common Stock of Geotek as provided in Article IX hereof; provided,
that the failure to make any such notations on such Schedule (or any error in
such notation) shall not limit or otherwise affect the obligations of the
Borrower under this Agreement or the Note.
2.7. No Prepayment. The Borrower may not prepay the Loans, in
whole or in part, prior to the Maturity Date; provided that this shall not limit
or affect the rights of the Lender under Article VIII.
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions to Initial Loan. The Obligation of the Lender to
make the Initial Loan hereunder is subject to the satisfaction of the following
conditions:
(i) On the date of execution of this Agreement, the Lender shall
have received:
(a) an original of this Agreement (including all Exhibits
and Annexes thereto), the Disclosure Letter and the Pledge Agreement,
duly-executed by each party hereto and thereto;
(b) 100% of the outstanding Capital Stock of Holdings,
together with stock powers duly executed in blank, in each case pursuant
to the Pledge Agreement;
(c) an incumbency certificate of each Obligor and of
Holdings, executed by the Secretary or an Assistant Secretary thereof,
which shall
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identify by name and title and bear the signature of the officers of
such Obligor authorized to sign the Loan Documents and (in the case of
the Borrower) to make borrowings hereunder, upon which certificate the
Lender shall be entitled to rely until informed of any change in writing
by such Obligor;
(d) a copy of the Certificate of Incorporation of each of
the Obligors and of Holdings, together with all amendments thereto,
certified by the appropriate governmental officer in its jurisdiction of
incorporation;
(e) a copy of the By-Laws of each of the Obligors and of
Holdings, together with all amendments thereto, certified by the
Secretary or an Assistant Secretary of such Obligor;
(f) a copy, certified by the Secretary or an Assistant
Secretary of such Obligor or Holdings (as applicable), of each Obligor's
and Holding's resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for the Lender) authorizing the execution,
delivery and performance of the Loan Documents to be executed by it and
the transactions contemplated thereby; and
(ii) On the Initial Funding Date the Lender shall have received:
(a) the Note; and
(b) the Holdings Note, duly endorsed in blank.
(c) certificates of good standing for each of the Obligors
certified by the appropriate governmental officer in its jurisdiction of
incorporation and in the State of New Jersey;
(d) a written opinion of counsel to the Obligors and
Holdings, dated as of the Initial Funding Date, addressed to the Lender,
with respect to matters customary in transactions of the type
contemplated by this Agreement, in form and substance reasonably
satisfactory to the Lender and its counsel.
3.2. Conditions to Each Loan. The Obligation of the Lender to
make each Loan hereunder is subject to the satisfaction of the following
conditions:
(i) No less than three (3) Business Days prior to the applicable
Funding Date, the Borrower shall have furnished the Lender with a
written certificate signed by the Chief Financial Officer of the
Borrower,
(a) selecting the proposed Funding Date and the Loan
Amount, which selections shall be irrevocable;
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(b) specifying the Acquired 900 MHZ Licenses and, if
applicable, related Third-Party 900 MHz License Assets to be
purchased with the proceeds of the Loan and the Acquired 900 MHz
License Purchase Price applicable to such licenses and assets;
(c) if the Acquired 900 MHz Licenses to be acquired with
the proceeds of the Loan are Auction 900 MHz Licenses, attaching
evidence satisfactory to the Lender that either (1) such Auction
900 MHz Licenses will be issued by the FCC in the name of
Holdings immediately upon payment of the purchase price therefor
or (2) certifying that Geotek was the high bidder in the auction
for such licenses and has an obligation to pay a specified
purchase price therefor at a future date;
(d) if the Acquired 900 MHz Licenses to be acquired are
Third-Party 900 MHz Licenses, attaching either (1) evidence
satisfactory to the Lender that such Third-Party 900 MHz License
(and any related Third-Party 900 MHz License Assets) will be sold
and legally transferred to Holdings immediately upon payment of
the purchase price therefor or (2) a certified copy of the
duly-executed contract governing the purchase of such licenses
and assets and providing a good faith estimate of the closing
date for such purchase; and
(e) providing the Lender with appropriate wire-transfer
instructions.
(ii) on the applicable Funding Date the Borrower shall have
delivered to the Lender a certificate signed by the Chief Financial Officer of
the Borrower,
(a) certifying that no Default or Unmatured Default shall
have occurred and be continuing on such date after giving effect
to the making of the Loan by the Lender and that each of the
representations and warranties contained in Article IV is true
and correct as of such Funding Date; and
(b) certifying that each of the conditions set forth in
this Article III has been satisfied.
(iii) On the applicable Funding Date the Lender shall have a
valid and perfected first priority security interest (subject to Permitted
Liens) in all of the Collateral owned by the Borrower on the Funding Date.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Obligors represents and warrants to the Lender that,
except as otherwise set forth in the Disclosure Letter:
4.1. Corporate Existence and Standing. Each of Geotek and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted, except where the failure to so qualify would not have a
Material Adverse Effect.
4.2. Authorization and Validity. Each of the Obligors has the
corporate power and authority to execute and deliver the Loan Documents to which
it is a party and to perform its obligations thereunder. The execution and
delivery by the Obligors of the Loan Documents to which each is a party and the
performance of their obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents constitute legal, valid and
binding obligations of such Obligors enforceable against such Obligors in
accordance with their terms, except as enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
4.3. Compliance with Laws and Contracts. Neither the execution
and delivery by each Obligor of the Loan Documents to which it is a party, nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof, will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Geotek or any of its
Subsidiaries or Geotek's or any such Subsidiary's articles or certificate of
incorporation or by-laws or the provisions of any indenture, instrument or
agreement to which Geotek or any such Subsidiary is a party or is subject, or by
which it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any Lien in, of or on the
property of Geotek or any such Subsidiary pursuant to the terms of any such
indenture, instrument or agreement, except where such violation, conflict,
default or Lien would not have a Material Adverse Effect. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents
(except, with respect to enforceability of the remedies provided for in the
Pledge Agreement, the requirement to obtain FCC approval before effecting any
transfer of any FCC License).
4.4. Financial Statements. The September 30, 1995 consolidated
financial statements of Geotek and its Subsidiaries heretofore delivered to the
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Lender were prepared in accordance with GAAP in effect on the date such
statements were prepared and consistent with prior periods and fairly present
the consolidated financial condition and operations of Geotek and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.
4.5. Material Adverse Change. No material adverse change in the
business, condition (financial or otherwise), prospects or results of operations
of Geotek and its Subsidiaries (on a consolidated basis) has occurred since the
date of the financial statements referred to in Section 4.4.
4.6. Taxes. Geotek and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed prior to the date hereof and have paid all taxes due pursuant to said
returns or pursuant to any assessment received by Geotek or any such Subsidiary
(except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided), except, with respect only to Subsidiaries
of Geotek other than the Borrower and its Subsidiaries, where the failure to so
file or pay would not have a Material Adverse Effect. No tax liens have been
filed, and no claims are being asserted with respect to any such taxes, except,
with respect only to Subsidiaries of Geotek other than the Borrower and its
Subsidiaries, where such tax liens or claims would not have a Material Adverse
Effect. The charges, accruals and reserves on the books of Geotek and its
Subsidiaries in respect of any taxes or other governmental charges are adequate,
except, with respect only to Subsidiaries of Geotek other than the Borrower and
its Subsidiaries, where the failure to maintain adequate charges, accruals or
reserves would not have a Material Adverse Effect.
4.7. Litigation. There is no litigation or proceeding pending or,
to the knowledge of any of their officers, threatened against or affecting
Geotek or any of its Subsidiaries which might have a Material Adverse Effect.
4.8. ERISA. The Unfunded Liabilities of all Plans do not in the
aggregate exceed $100,000. Each Plan complies in all material respects with all
applicable requirements of law and regulations, and the minimum funding
requirements with respect to all Plans have been met, no Reportable Event has
occurred with respect to any Plan, no Lien in favor of the PBGC with respect to
any Plan has arisen or been recorded, neither Geotek nor any of its Subsidiaries
has withdrawn from any Plan or initiated steps to do so, and no steps have been
taken to terminate any Plan.
4.9. Accuracy of Information. No information, schedule, exhibit
or report furnished by Geotek to the Lender in connection with the negotiation
of the Loan Documents contained any material misstatement of fact or omitted to
state a material fact or any fact necessary to make the statements contained
therein not misleading.
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4.10. Material Agreements. None of Geotek, the Borrower or any of
the Borrower's Subsidiaries is a party to any agreement or instrument or subject
to any charter or other corporate restriction materially and adversely affecting
its business, properties or assets, operations or condition (financial or
otherwise). None of the Subsidiaries of Geotek, other than the Borrower and its
Subsidiaries, are party to any agreement or instrument or subject to any charter
or corporate restriction which, individually or when taken together with all
other such agreements, instruments or restrictions of all such Subsidiaries,
could have a Material Adverse Effect. Neither Geotek nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in (i) any agreement to which it
is a party, which default might have a Material Adverse Effect or (ii) any
agreement or instrument evidencing or governing Indebtedness of Geotek. The
Obligors have made available to the Lender copies of each agreement of Geotek
which (a) evidences Indebtedness of Geotek or (b) if Geotek were to default in
its obligations thereunder, might have a Material Adverse Effect.
4.11. Subordinated Indebtedness. The Obligations are not
subordinate to any Indebtedness of the Obligors. The Borrower's Obligations are
senior to all other Indebtedness of the Borrower. The Holdings Note is senior to
Holding's Guaranty of the notes issued under the Indenture.
4.12. 900 MHz Licenses. Geotek and any of its Subsidiaries which
hold or will hold 900 MHz Licenses (including Holdings) are fully qualified to
hold 900 MHz Licenses.
ARTICLE V
COVENANTS
During the term of this Agreement, unless the Lender shall
otherwise consent in writing:
5.1. Reporting. Geotek will furnish to the Lender
(a) Copies of all reports, certificates, documents and
other information required to be delivered to the trustee under the
Indenture pursuant to Sections 4.06 and 4.07 thereof (as in effect on
the date hereof and whether or not the Indenture is then in effect). The
copies of any such reports, certificates or documents that are addressed
to such trustee shall be addressed to the Lender.
(b) Within 45 days after the close of each fiscal quarter
of the Borrower, a compliance certificate signed by the chief financial
officer of the Borrower stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the
nature and status thereof.
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(c) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Plan, certified as correct
by an actuary enrolled under ERISA.
(d) As soon as possible and in any event within 10 days
after Geotek knows that any Reportable Event has occurred with respect
to any Plan or any Lien has been asserted by the PBGC or has arisen with
respect to any Plan, a statement, signed by the chief financial officer
of Geotek, describing said Reportable Event or Lien and the action which
Geotek proposes to take with respect thereto.
(e) No later than the first Business Day of each month
between the date hereof and the Funding Cutoff Date (the "Reporting
Period"), a written statement, based on the Borrower's good faith
estimate, of the total dollar amount of Loans that the Borrower
anticipates borrowing hereunder during each remaining month of the
Reporting Period. At any time that the Borrower shall discover that its
most recent statement made pursuant hereto is no longer accurate, the
Borrower shall provide the Lender with an amended statement of the
Borrower's revised estimate.
(f) Such other information as the Lender may from time to
time reasonably request.
5.2. Use of Proceeds. (a) The proceeds of the Loans (the "Loan
Proceeds") shall be re-loaned directly to Holdings, which loans will be
evidenced by the Holdings Note. The Borrower will cause Holdings to use the Loan
Proceeds solely as payment for the acquisition of Acquired 900 MHz Licenses (and
other 900 MHz Licenses (and related assets) acquired with the prior written
consent of the Lender, which consent may be withheld in the Lender's sole
discretion) and related Third-Party 900 MHZ License Assets. Geotek will not, nor
will it permit any of its Subsidiaries to, use any of the Loan Proceeds to
purchase or carry any "Margin Stock" (as defined in Regulation G).
(b) Subject to the limitations on Loans set forth in Section 2.1
hereof, to the extent proceeds of the Loans are available therefor, the Borrower
will cause Holdings to use the proceeds of the Loans for the purchase of any
Acquired 900 MHz Licenses (and related 900 MHz License Assets) before using any
unaffiliated third-party funds for such purchase. Notwithstanding the foregoing,
nothing in this Section 5.2(b) shall be deemed to give the Lender any right to
cause the Borrower to request the making of Loans after the Funding Cutoff Date.
5.3. Notice of Default. Geotek will, and will cause each of its
Subsidiaries to, give prompt notice in writing to the Lender of the occurrence
of any Default or Unmatured Default and of any other development, financial or
otherwise, which might have a Material Adverse Effect.
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5.4. Conduct of Business. Geotek will, and will cause each of its
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, except where the failure
to do so would not have a Material Adverse Effect. The Borrower will engage in
no business or transaction other than the holding of the capital stock of
Holdings and certain other Subsidiaries formed to hold certain assets to be used
directly for the provision of Specialized Mobile Radio services utilizing the
Acquired 900 MHz Licenses. The Borrower will ensure that Holdings engages in no
business or transaction other than the purchase and ownership of the Acquired
900 MHz Licenses (and other 900 MHz Licenses and related assets as permitted
under Section 5.2 hereof) and related Third-Party 900 MHz License Assets, if
any, and the entering into of license agreements with respect to such Acquired
900 MHz Licenses with other Subsidiaries of Geotek for such Subsidiaries' use in
providing Specialized Mobile Radio services (pursuant to a license agreement)
which does not otherwise cause a Default under this Agreement and which, by its
terms, provides that it is cancelable in full at the sole discretion of Holdings
upon a foreclosure by the Lender upon the Capital Stock of Holdings pledged to
the Lender pursuant to the Pledge Agreement or any other transfer of such
Capital Stock to the Lender or its designee). At least five (5) Business Days
prior to entering into any such license agreement, Geotek will cause Holdings to
deliver a copy thereof to the Lender.
5.5. Taxes. Geotek will, and will cause each of its Subsidiaries
to, pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits or property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
5.6. Insurance. Geotek will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all their property in such amounts and covering such
risks as is consistent with sound business practice, and Geotek will furnish to
the Lender upon request full information as to the insurance carried.
5.7. Compliance with Laws. Geotek will, and will cause each of
its Subsidiaries to, comply with (i) all laws, rules, regulations, orders,
writs, judgments, injunctions, decrees or awards to which it may be subject and
(ii) the terms of all FCC Licenses held by it, including any obligation to
construct facilities and place them in operation with a minimum number of sites
and/or customers by a specified date, except where the failure to do so would
not have a Material Adverse Effect.
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5.8. Maintenance of Properties. Geotek will, and will cause each
of its Subsidiaries to, do all things necessary to maintain, preserve, protect
and keep its properties in good repair, working order and condition, and make
all necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times,
except where the failure to do so would not have a Material Adverse Effect.
5.9. Inspection. Geotek will, and will cause each of its
Subsidiaries to, permit the Lender, by its representatives and agents, to
inspect any of the properties, licenses, corporate books and financial records
of Geotek and each such Subsidiary, to examine and make copies of the books of
accounts and other financial records of Geotek and each Subsidiary, and to
discuss the affairs, finances and accounts of Geotek and each Subsidiary with,
and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Lender may designate.
5.10. Restricted Payments. The Borrower will not, nor will it
permit any of its Subsidiaries to, (i) declare or pay any dividends on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except that any of the Borrower's Subsidiaries may declare and pay
dividends to the Borrower or to a Wholly-Owned Subsidiary of the Borrower or
(ii) directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Indebtedness.
5.11. Indebtedness. The Borrower will not, nor will it permit any
of its Subsidiaries to incur any Indebtedness other than the Loans (in the case
of the Borrower), the Holdings Note (in the case of Holdings) and the Guarantees
by the Borrower and Holdings required to be provided under the Indenture as in
effect on the date hereof.
5.12. Merger. The Borrower will not, nor will it permit any of
its Subsidiaries to, merge or consolidate with or into any other Person.
5.13. Sale of Assets. Subject to the proviso in the second
sentence of this Section 5.13, the Borrower will not, nor will it permit any of
its Subsidiaries to, lease, sell or otherwise dispose of all, or a substantial
portion of, its property, assets or business to any other Person except for
sales of inventory in the ordinary course of business. None of the Obligors will
sell, assign or convey any interest in any of the Collateral; provided that
Holdings may (a) enter into license agreements with respect to one or more of
the Acquired 900 MHz Licenses as provided herein and (b) with the prior written
consent of the Lender, which consent will not be unreasonably withheld, exchange
one or more of the Acquired 900 MHz Licenses (each, an "Old 900 MHZ License")
for other 900 MHz Licenses (each a "New 900 MHz License") which (i) meet all the
criteria set forth herein for Acquired 900 MHz Licenses (including geographic
restrictions) and (ii) after giving effect to such
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exchange, do not cause the Obligors or Holdings to be in default of any of their
obligations under the Loan Documents (including, without limitation, the other
provisions of this Article 5 and the loan-to-value limitations set forth in
Section 2.1).
5.14. Sale and Leaseback. The Borrower will not, nor will it
permit any of its Subsidiaries to, sell or transfer any property in order to
concurrently or subsequently lease as lessee such or similar property.
5.15. Investments and Acquisitions. The Borrower will not, nor
will it permit any of its Subsidiaries to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any new
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to acquire any going business or all or substantially all of the assets of
any Person or any division or business of a Person, whether through purchase of
assets, merger or otherwise, except existing Investments in Subsidiaries in
existence on the date hereof and the purchases of Acquired 900 MHz Licenses (and
other 900 MHz Licenses) and related Third-Party 900 MHz License Assets
contemplated hereby.
5.16. Guarantees. The Borrower will not, nor will it permit any
of its Subsidiaries to, make or suffer to exist any Guaranty (including, without
limitation, any Guaranty of the obligations of a Subsidiary of Geotek), other
than the Guarantees by the Borrower and Holdings required to be provided under
the Indenture as in effect on the date hereof.
5.17. Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the
property of the Borrower or any of its Subsidiaries (including, without
limitation, the Acquired 900 MHz Licenses), except Permitted Liens.
5.18. Fixed Asset Expenditures. The Borrower will not, nor will
it permit any of its Subsidiaries to, acquire any assets, other than the
acquisition by the Borrower of the Holdings Note and the acquisition by Holdings
of the Acquired 900 MHz Licenses (and related Third-Party 900 MHz License
Assets) and other acquisitions expressly permitted pursuant to Section 5.2
hereof.
5.19. Rentals. The Borrower will not, nor will it permit Holdings
to, create, incur or suffer to exist any obligations for Rentals.
5.20. Letters of Credit. The Borrower will not, nor will it
permit any of its Subsidiaries to, apply for or become liable with respect to
any Letter of Credit.
5.21. Affiliates. The Borrower will not, nor will it permit
Holdings to, enter into any transaction with any Affiliate, except as expressly
set forth in this
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Agreement (including, without limitation, the entering into of license
agreements with respect to one or more of the Acquired 900 MHz Licenses as
provided herein).
5.22. Preservation of Licenses. The Borrower will not, and will
not permit any of its Subsidiaries to, allow any FCC License held by it to lapse
or be revoked or suspended.
5.23. Ownership of Borrower and Holdings. The Borrower shall at
all times be a Wholly-Owned Subsidiary of Geotek and Holdings shall at all times
be a Wholly-Owned Subsidiary of the Borrower.
5.24. Compliance with Indenture. Geotek shall, and shall cause
each of its Subsidiaries to, comply with all covenants, restrictions and other
agreements applicable to them in the Indenture as in effect on the date hereof
(without giving effect to any amendments, waivers or other modifications thereof
or supplements thereto, unless otherwise consented to in writing by the Lender,
such consent not to be unreasonably withheld).
5.25. Auction 900 MHz Licenses. Promptly after the closing of the
current FCC auction of 900 MHz Licenses and Geotek learning of the 900 MHz
Licenses in respect of which it was the highest bidder, Geotek will so inform
the Lender.
5.26. Ownership of Acquired 900 MHz Licenses. All Acquired 900
MHz Licenses shall be issued in the name of, or transferred to, Holdings and not
transferred by Holdings to any other Person (except the entering into of license
agreements with respect to one or more of the Acquired 900 MHz Licenses as
provided herein).
5.27. Right to Cause Refinancing of Loans. In the event that at
any time on or after the date of execution of this Agreement and prior to
February 28, 1996, Geotek or any of its Subsidiaries shall enter into any
borrowing arrangement pursuant to which the person providing the funds (or its
Affiliates) obtains the right to purchase equity of Geotek (a "Subject Credit"),
the Lender, at its sole option, shall be entitled to cause Geotek (or the
Borrower) to refinance the Loans in an amount up to $24,500,000 plus, upon
agreement of Geotek and the Lender, an amount of reasonable fees and expenses
incurred by Geotek in connection with the refinancing) on the terms of the
Subject Credit. The Borrower will inform the Lender within one (1) Business Day
after Geotek or any of its Subsidiaries enters into any such Subject Credit. Any
amount of Loans not so refinanced shall remain outstanding subject to the terms
and conditions of this Agreement and the other Loan Documents.
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ARTICLE VI
GUARANTY
6.1. The Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to the Lender and its successors and
assigns the full and punctual payment and performance (whether at stated
maturity, upon acceleration or otherwise) of the Obligations, including all
reasonable costs of collection and enforcement thereof (including, without
limitation, all fees and disbursements of counsel) and interest thereon which
would be owing by the Borrower but for the effect of the Bankruptcy Code, 11
U.S.C. Section 101 et seq. (collectively, the "Guaranteed Obligations"). The
Guarantor understands, agrees and confirms that the Lender may enforce this
Guaranty up to the full amount guaranteed by the Guarantor hereunder without
proceeding against the Borrower or any other obligor, against the Collateral or
against any other guarantor under any other guarantee covering the Guaranteed
Obligations. All payments made by the Guarantor under this Guaranty shall be
paid at the place and in the manner specified in Section 2.5 of this Agreement.
6.2. Guaranty Unconditional. The obligations of the Guarantor
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(a) any extension, renewal, settlement, compromise, waiver
or release in respect of any obligation of any Obligor under any of the
Loan Documents, by operation of law or otherwise;
(b) any modification or amendment of or supplement to this
Agreement, the Note or any of the other Loan Documents, including,
without limitation, any increase in the principal amount of the Loans;
(c) any release, non-perfection or invalidity of any
direct or indirect security herefor or for, or any other guarantee of,
any of the Guaranteed Obligations;
(d) any change in the corporate existence, structure or
ownership of any of the Obligors, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting any of the Obligors
or any of their assets or any resulting release or discharge of any
obligation of any Obligor contained in this Agreement or the Note;
(e) the existence of any claim, set-off or other rights
which the Guarantor may have at any time against any Obligor or any
other Person, whether in connection herewith or with any unrelated
transactions, provided that nothing herein shall prevent the assertion
of any such claim by separate suit or compulsory counterclaim;
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(f) any invalidity or unenforceability relating to or
against any Obligor for any reason of any of the Loan Documents, or any
provision of applicable law or regulation purporting to prohibit the
payment by the Borrower of the principal of or interest on the Loans or
any other amount payable by it under the Loan Documents; or
(g) any other act or omission to act or delay of any kind
by any Obligor or any other Person or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of the Guarantor's obligations hereunder.
In addition, the obligations of the Guarantor hereunder are joint and several
with the obligations of each other guarantor or obligor in respect of the
Guaranteed Obligations.
6.3. Discharge Only Upon Payment In Full; Reinstatement In
Certain Circumstances. The Guarantor's obligations hereunder shall remain in
full force and effect until the Guaranteed Obligations shall have been paid in
full. If at any time any payment of any of the Guaranteed Obligations is
rescinded or must be otherwise restored or returned upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, the Guarantor's
obligations hereunder with respect to such payment shall be reinstated at such
time as though such payment had been due but not made at such time.
6.4. Waivers by the Guarantor. The Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and any notice not provided for
herein, as well as any requirement that at any time any action be taken by any
Person against the Borrower or any other Person.
6.5. Subrogation. The Guarantor shall not exercise any rights
which it may have acquired by way of subrogation under this Guaranty, by any
payment made hereunder or otherwise, nor shall the Guarantor seek any
reimbursement from the Borrower in respect of payments made by the Guarantor
hereunder, unless and until all of the Guaranteed Obligations shall have been
paid to the Lender and discharged, in full, and if any payment shall be made to
the Guarantor on account of such subrogation, contribution or reimbursement
rights at any time when the Guaranteed Obligations shall not have been paid and
discharged, in full, each and every amount so paid shall forthwith be paid to
the Lender to be credited and applied against the Guaranteed Obligations,
whether matured or unmatured.
6.6. Stay of Acceleration. In the event that acceleration of the
time for payment of any of the Guaranteed Obligations is stayed upon insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise subject
to acceleration under the terms of this Agreement and the Note shall nonetheless
be payable by the Guarantor forthwith on demand by the Lender.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on
behalf of either of the Obligors to the Lender under or in connection with this
Agreement, the Note, any other Loan Document or any certificate or information
delivered in connection herewith or therewith shall be materially false as of
the date on which made.
7.2. (a) Nonpayment of principal of the Note when due, or (b)
nonpayment of interest upon the Note or of any other Obligations under any of
the Loan Documents within five (5) days of notice from the Lender of such
nonpayment or, with respect to nonpayment of interest, if shorter, within eight
(8) days of when due.
7.3. The breach by either Obligor of any of the terms or
provisions of Article 5 and, where such breach is reasonably capable of cure and
provided such breach has not otherwise caused a Material Adverse Effect, the
failure of either Obligor to cure such breach within ten (10) days of becoming
aware thereof.
7.4. The breach by either Obligor (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement or the Note which is not remedied within ten (10)
days after written notice from the Lender.
7.5. Failure of Geotek or any of its Subsidiaries to pay any
Indebtedness in excess of $2,000,000 when due; or the default by Geotek or any
of its Subsidiaries in the performance of any term, provision or condition
contained in any agreement under which any Indebtedness in excess of $3,500,000
was created or is governed, the effect of which is to cause, or to permit the
holder or holders of such Indebtedness to cause, such Indebtedness to become due
prior to its stated maturity; or any Indebtedness in excess of $3,500,000 shall
be declared to be due and payable or required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity thereof.
7.6. Geotek, the Borrower or any of the Borrower's Subsidiaries
shall (a) have an order for relief entered with respect to it under the Federal
Bankruptcy Code, (b) not pay, or admit in writing its inability to pay, its
debts generally as they become due, (c) make an assignment for the benefit of
creditors, (d) apply for, seek, consent to, or acquiesce in, the appointment of
a receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial part of its property, (e) institute any proceeding seeking an
order for relief under the Federal
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Bankruptcy Code or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (f) take any corporate action to authorize or effect any of the foregoing
actions set forth in this Section 7.6, or (g) fail to contest in good faith any
appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of Geotek, the
Borrower or any of the Borrower's Subsidiaries, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for Geotek, the Borrower or
any of the Borrower's Subsidiaries or any substantial part of their respective
properties, or a proceeding described in Section 7.6(e) shall be instituted
against Geotek, the Borrower or any of the Borrower's Subsidiaries and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 consecutive days.
7.8. Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of all or any
substantial portion of the property of Geotek, the Borrower or any of the
Borrower's Subsidiaries.
7.9. Geotek, the Borrower or any of the Borrower's Subsidiaries
shall fail within 30 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $1,000,000 which is not stayed on
appeal or otherwise being appropriately contested in good faith.
7.10. The Unfunded Liabilities of all Plans shall exceed in the
aggregate $1,000,000, any Lien in favor of the PBGC with respect to any Plan
shall arise or be recorded, or any Reportable Event shall occur in connection
with any Plan.
7.11. Any Lien, levy or assessment is filed or recorded with
respect to or otherwise imposed upon all or any part of the Collateral by the
United States or any department or instrumentality thereof or by any state,
county, municipality or other governmental agency (other than Permitted Liens)
and such lien, levy or assessment is not stayed, vacated, paid or discharged
within ten (10) days.
7.12. Geotek, the Borrower or any of the Borrower's Subsidiaries
is enjoined, restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting all or any material part of
its business and such order continues for more than thirty (30) days.
7.13. Any of the Loan Documents for any reason, other than a
partial or full release in accordance with the terms thereof, ceases to be in
full force and
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effect or is declared to be null and void, or either Obligor denies that it has
any further liability under any Loan Documents to which it is party, or gives
notice to such effect.
7.14. Any material damage to, or loss, theft or destruction of,
any Collateral, whether or not insured, or any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty which
causes, for more than fifteen (15) consecutive days, the cessation or
substantial curtailment of revenue producing activities at any facility of
Geotek or any of its Subsidiaries if any such event or circumstance could have a
Material Adverse Effect.
7.15. The loss, suspension, revocation or amendment of, or
failure to renew, any FCC License now held or hereafter acquired by Geotek or
any of its Subsidiaries, if such loss, suspension, revocation, amendment or
failure to renew could have a Material Adverse Effect. For purposes of this
Section 7.15, the loss, suspension, revocation or failure to renew of any
Auction 900 MHz License or (once acquired by Holdings) any Third-Party 900 MHz
License, is deemed to have a Material Adverse Effect.
7.16. The FCC schedules or conducts a hearing with respect to, or
commences an action or proceeding seeking the termination, suspension,
revocation or material adverse amendment of, any FCC License now held or
hereafter acquired by Geotek or any of its Subsidiaries (other than a hearing
with respect to a pending competing application) and (i) the Lender reasonably
believes that the result thereof would be the termination, revocation,
suspension or material adverse amendment of such License and (ii) in the case of
any Subsidiary of Geotek other than the Borrower or any of the Borrower's
Subsidiaries, such termination, revocation, suspension or material adverse
amendment would have a Material Adverse Effect.
7.17. Geotek or any of its Subsidiaries defaults in the payment
of any other written obligation to the Lender in excess of $2,000,000,
including, without limitation, with respect to any extension of trade credit by
the Lender; provided that such default shall not be a Default if it is the
subject of a good-faith dispute for no longer than ninety (90) days.
7.18. The Lender does not have or ceases to have a valid and
perfected first priority security interest in the Collateral (subject to
Permitted Liens), in each case, for any reason other than the failure of the
Lender to take any action within its control.
7.19 Any judgment, order or ruling is entered, or partial or full
resolution is reached, with respect to any litigation or proceeding listed in
the Disclosure Letter (or any Schedule thereto), which judgment, order, ruling
or resolution could have a Material Adverse Effect.
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ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENT AND REMEDIES
8.1. Acceleration. If any Default described in Section 7.6 or 7.7
occurs, the Obligations shall immediately become due and payable without any
election or action on the part of the Lender. If any other Default occurs, the
Lender may declare the Obligations to be due and payable, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Obligors hereby
expressly waive.
8.2. Preservation of Rights. No delay or omission of the Lender
to exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein. Any single
or partial exercise of any such right shall not preclude other or further
exercise thereof or the exercise of any other right, and no waiver, amendment or
other variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lender, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Lender until the Obligations have been paid in full.
ARTICLE IX
CONVERSION
9.1 Conversion Privilege and Conversion Price. (a) Subject to and
upon compliance with the provisions of this Article, at the option of the
Lender, the outstanding principal amount of the Loans may be converted into
fully paid and nonassessable shares (calculated as to each conversion to the
nearest 1/100 of a share) of Common Stock of Geotek, at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall commence one hundred and eighty-one (181) days after the
Initial Funding Date and shall expire on the Maturity Date (the "Conversion
Period").
(b) The price per share (the "Conversion Price") at which
shares of Common Stock shall be delivered upon conversion shall be the lesser of
(i) ninety percent (90%) of the weighted average sales price of the Common Stock
of Geotek on the Trading Day next preceding the date of conversion (or over the
ten (10) Trading Days immediately preceding the date of conversion to the extent
(and only to the extent) the conversion relates to in excess of $300,000 of
Loans (to the extent of such excess) on the Trading Day next preceding the
Maturity Date) as reported by Bloomberg Financial Services or similar reporting
service and (ii) $9.75 (the "Maximum Conversion Price").
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9.2 Exercise of Conversion Privilege; Limitations on Exercise.
(a) During the Conversion Period, the entire outstanding
amount of the Loans shall be convertible into the Common Stock of Geotek as
provided herein; provided that no more than $150,000 of the Loans may be
converted into Common Stock of Geotek on any day, except that during the one
hundred twenty-one (121) Trading Days immediately preceding the Maturity Date,
up to $300,000 in principal amount of the Loans may be converted into Common
Stock of Geotek on any day.
(b) Notwithstanding the provisions of paragraph (a) above,
on the Trading Day next preceding the Maturity Date, the Lender may convert the
entire remaining principal balance of the Loans into shares of Common Stock of
Geotek; provided that the Lender agrees not to resell in excess of $300,000
worth of such Common Stock on any Trading Day.
(c) Notwithstanding the provisions of paragraph (a) above,
on any Trading Day during the Conversion Period the Lender shall have the right
to convert the entire remaining balance of the Loans into shares of Common Stock
of Geotek at the Maximum Conversion Price; provided that, with respect to any
such amount so converted on such day, the Lender agrees not to resell in excess
of $300,000 worth of such Common Stock on any Trading Day.
(d) Notwithstanding the foregoing, upon the occurrence and
during the continuance of a Default, up to the entire remaining amount of the
Loans may be converted by the Lender into shares of Common Stock of Geotek on
any day with no contractual restrictions on the ability of the Lender to resell
such Common Stock at any time; provided that, if the Lender chooses to so
convert the entire remaining amount of the Loans (or any Lesser amount in excess
of $300,000), the Borrower may, at its option, prior to the time set for such
conversion, prevent the Lender from so converting by paying the Lender in
immediately available funds (i) all outstanding principal and interest on the
Loans (and all other amounts then due under the Loan Agreement and the other
Loan Documents) and (ii) a dollar amount equal to the greater of (A) the number
of shares of Common Stock of Geotek which the Lender would otherwise be entitled
to receive upon such conversion but for the exercise by the Borrower of its
buyout option under this Section 9.2(d) multiplied by ten percent (10%) of the
weighted average sales price of shares of Common Stock of Geotek on the Trading
Day immediately preceding the date set for conversion and (B) the number of
shares of Common Stock of Geotek which the Lender would otherwise be entitled to
receive upon such conversion but for the exercise by the Borrower of its buyout
option under this Section 9.2(d) multiplied by the difference obtained by
subtracting the Maximum Conversion Price from the weighted average sales price
of shares of Common Stock of Geotek on the Trading Day immediately preceding the
date set
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for conversion. Such weighted average sales price shall be as reported by
Bloomberg Financial Services or similar reporting service. The amount payable
pursuant to clause (ii) of this Section 9.2(d) shall be payable, at the
Borrower's option, in cash or Common Stock of Geotek (at the per share valuation
described in such clause). Nothing in this paragraph (d) shall prevent the
Lender from converting any or all of the Loans pursuant to, and in the manner
provided for in, any other paragraph of this Section 9.2, even during the
continuance of a Default or from exercising any other remedies available to it
hereunder or under applicable law upon the occurrence and continuance of a
Default (including, without limitation, the right to accelerate the Loans and
foreclose upon the Collateral).
(e) The Lender shall exercise its conversion privilege on
any Trading Day during the Conversion Period (a "Conversion Date") by informing
Geotek and the Borrower in writing of the amount of Loans to be so converted
(the "Conversion Amount") and the Conversion Price. Conversion of such Loans
shall be deemed to have been effected on the Conversion Date and at such time
the rights of the Lender to receive principal payments or interest on the
Converted Amount shall cease and the person or persons in whose name or names
any certificate or certificates for shares of common stock shall be issuable
upon conversion of the Converted Amount (as designated by the Lender) shall be
deemed to have become the holder or holders of record of such shares. Geotek
shall, at the request of the Lender, either (i) cause a certificate or
certificates representing the converted shares of Common Stock of Geotek to be
issued and delivered to or at the direction of the Lender or (ii) cause the
issuance of the converted shares of Common Stock of Geotek in registered form
and the recording thereof in the book-entry system maintained by The Depositary
Trust Company, in either case within (3) three days of such request. If Geotek
breaches its obligation to deliver share certificates or cause book-entries
hereunder, such breach shall not be subject to any cure period otherwise
available under Article VII hereof and the Lender may, in addition to its other
remedies hereunder and at law, bring an action to enforce specific performance
of such obligation and, until such certificates are properly delivered or such
book-entries are properly made, as the case may be, the principal amount of the
Loans so converted shall be deemed reinstated with interest deemed to have been
accruing continuously notwithstanding such conversion.
(f) The Maximum Conversion Price shall be adjusted in
certain circumstances as provided in Annex A attached hereto and made a part
hereof.
(g) Until such time as the Lender has sold all shares of
Common Stock of Geotek which it has received or may receive pursuant to its
conversion rights hereunder, and subject to the other resale restrictions
contained in this Article IX, the Lender may not sell on any day more shares of
Geotek than it owns on such day (including shares in respect of which it has or
will properly exercise its
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conversion rights on such day). Nothing in this Section 9.2 shall restrict the
ability of the Lender to sell, assign or otherwise transfer the Note and its
rights and obligations under the other Loan Documents (including the right to
convert the Loans into shares of Common Stock of Geotek) in accordance with
Section 10.1 hereof.
9.3 Fractions of Shares. No fractional shares of Common Stock
shall be issued upon conversion of the Loans. Instead of any fractional share of
Common Stock which would otherwise by issuable upon conversion of any of the
Loans, Geotek shall pay a cash adjustment in respect of such fraction in an
amount equal to the same fraction of the closing price per share of the Common
Stock at the close of business on the day of conversion.
9.4 Notice of Certain Corporate Activities. In case:
(a) Geotek shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than exclusively in cash; or
(b) Geotek shall authorize the granting to all of the holders of
its Common Stock, pro rata, of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other rights
(excluding employee stock options); or
(c) of any reclassification of the Common Stock of Geotek (other
than a subdivision or combination of its outstanding shares of Common
Stock), or of any consolidation or merger to which Geotek is a party and
for which approval of any stockholders of Geotek is required, or of the
sale or transfer of all or substantially all of the assets of Geotek; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of Geotek; or
(e) Geotek or any Subsidiary of Geotek shall commence a tender
offer for all or a portion of Geotek's outstanding shares of Common
Stock (or shall amend any such tender offer);
then Geotek shall notify the Lender in accordance with Section 11.1 hereof, at
least 20 days (or 10 days in any case specified in clause (a), (b) or (e) above)
prior to the applicable record, effective or expiration date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or granting of rights or warrants,
or, if a record is not to be taken, the date as of which the holders of Common
Stock of record to be entitled to such dividend, distribution, rights or
warrants are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer,
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dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up, or (z) the date on which such
tender offer commenced, the date on which such tender offer is scheduled to
expire unless extended, the consideration offered and the other material terms
thereof (or the material terms of any amendment thereto).
9.5. Geotek to Reserve Common Stock. Geotek shall at all times
reserve and keep available, free from preemptive rights, out of its authorized
but unissued Common Stock, for the purpose of effecting the conversion of the
Loans, the full number of shares of Common Stock then issuable upon the
conversion of all outstanding Loans.
9.6. Taxes on Conversions. Geotek will pay any and all transfer
taxes that may be payable in respect of the issue or delivery of shares of
Common Stock on conversion of Loans pursuant hereto. Geotek shall not, however,
be required to pay any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in a name other
than that of the Lender, and no such issue or delivery shall be made unless and
until the Person requesting such issue has paid to Geotek the amount of any such
tax, or has established to the satisfaction of Geotek that such tax has been
paid.
9.7. Covenant as to Common Stock. Geotek covenants that all
shares of Common Stock which may be issued upon conversion of Loans will upon
issue be fully paid and nonassessable and, except as provided in Section 9.6,
Geotek will pay all transfer taxes, liens and charges with respect to the issue
thereof.
9.8. Provisions in Case of Consolidation, Merger or Sale of
Assets. In case of any consolidation of Geotek with, or merger of Geotek into,
any other Person, any merger of another Person into Geotek (other than a merger
which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of Geotek) or any sale or
transfer of all or substantially all of the assets of Geotek, the Person formed
by such consolidation or resulting from such merger or which acquires such
assets, as the case may be, shall grant to the Lender the right thereafter,
during the Conversion Period, to convert the Loans only into the kind and amount
of securities, cash and other property receivable, if any, upon such
consolidation, merger, sale or transfer by the Lender of the number of shares of
Common Stock of Geotek into which the Loans might have been converted
immediately prior to such consolidation, merger, sale or transfer assuming the
Lender failed to exercise its rights of election, if any, as to
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the kind or amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer. The Lender shall continue to enjoy
rights of adjustment with respect to the Maximum Conversion Price as nearly
equivalent as may be practicable to the adjustments provided for in Annex A. The
above provisions of this Section shall similarly apply to successive
consolidations, mergers, sales or transfers.
9.9. Registration Rights. The shares of Common Stock of Geotek
issued hereunder shall be entitled to the registration rights set forth in Annex
B attached hereto and made a part hereof.
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ARTICLE X
GENERAL PROVISIONS
10.1. Successors and Assigns. (a) The terms and provisions of the
Loan Documents shall be binding upon and inure to the benefit of the Obligors
and the Lender and their respective successors and assigns.
(b) Subject to the Securities Act and applicable state
securities laws, the Lender may sell, assign or otherwise transfer the Note,
subject to the terms thereof (and its rights and obligations under the other
Loan Documents), in whole or in part (but in parts representing no less than
$8,000,000 in principal amount), to any Person who is an "Accredited Investor"
(as defined in the Securities Act) other than (except after occurrence and
during the continuance of a Default, when no restrictions on sale, assignment or
transfer shall apply) a "hedge fund" or a competitor of Geotek engaged or, to
the knowledge of HNS, planning to engage in the business of providing wireless
voice or data communications services to mobile customers or of providing
equipment in connection therewith. Notwithstanding the foregoing, except upon
the prior occurrence and continuance of a Default, the Lender shall not sell,
assign or otherwise transfer any interest in the Note or the other Loan
Documents prior to March 31, 1996.
(c) In the event of any sale, assignment or other transfer
described in Section 10.1(b) (other than upon the occurrence and during the
continuance of a Default), the Lender will, at least five (5) Business Days
prior to such proposed sale, assignment or transfer, give written notice to the
Borrower of the Lender's intention to effect such transfer, setting forth the
manner and circumstances thereof and the proposed transferee and certifying that
the proposed transferee is an Accredited Investor and not a hedge fund or
competitor of Geotek as described above, which notice shall be accompanied by an
opinion of counsel reasonably satisfactory to the Borrower addressed to the
Borrower to the effect that such transfer may be effected without registration
under the Securities Act. No such transfer shall be permitted unless the
proposed transferee agrees in writing to be bound by the transfer restrictions
in this Section 10.1.
(d) The Obligors authorize the Lender to disclose to any
purchaser or prospective purchaser or other transferee of an interest in the
Loans any financial or other information pertaining to the Loans known to the
Lender and the Obligors agree to cooperate in providing such purchaser or
prospective purchaser with any publicly-filed or publicly-available information
about the Obligors or Holdings or their respective businesses.
(e) The Obligors may not assign or otherwise transfer any
of their rights or obligations under any of the Loan Documents.
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10.2. Survival of Representations. All representations and
warranties of the Obligors contained in any Loan Document shall survive delivery
of the Note and the making of the Loans herein contemplated.
10.3. Governmental Regulation. Anything contained in any Loan
Document to the contrary notwithstanding, the Lender shall not be obligated to
extend credit to the Borrower in violation of any limitation or prohibition
provided by any applicable statute or regulation.
10.4. Taxes. Any taxes (excluding income taxes) payable or ruled
payable by any federal or state authority in respect of the Loan Documents shall
be paid by the Obligors, together with interest and penalties, if any.
10.5. New York Law; Submission to Jurisdiction; Waiver of Jury
Trial; Service of Process. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY. EACH OBLIGOR AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE PREPAID, TO
THE APPLICABLE OBLIGOR AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES TO THIS
AGREEMENT OR AT SUCH OTHER ADDRESS OF WHICH THE LENDER SHALL HAVE BEEN NOTIFIED
PURSUANT TO SECTION 11.2 HEREOF.
10.6. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.7. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Obligors and the Lender and supersede all
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prior agreements and understandings among the Obligors and the Lender relating
to the subject matter thereof.
10.8. Expenses; Indemnification. The Obligors agree, jointly and
severally, to reimburse the Lender for any costs, internal charges and
out-of-pocket expenses (including fees, time charges and out-of-pocket expenses
of outside legal counsel to the Lender) paid or incurred by the Lender in
connection with the preparation, review, execution, and delivery of the Loan
Documents, subject to a maximum amount required to be reimbursed by the Obligors
to the Lender of $50,000. Notwithstanding the foregoing, after the occurrence
and during the continuance of a Default, the Obligors agree, jointly and
severally, to reimburse the Lender for any costs, internal charges and
out-of-pocket expenses (including reasonable fees and time charges of outside
legal counsel to the Lender) paid or incurred by the Lender in connection with
the collection and enforcement of the Loan Documents. The Obligors further
agree, jointly and severally, to indemnify the Lender, its directors, officers,
employees and attorneys against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without limitation, all expenses
of litigation or preparation therefor whether or not the Lender is a party
thereto) (collectively, "Costs") which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the Loan Proceeds; provided, however, that with respect to any
legal proceeding between the Lender and one or more of the Obligors, if the
Obligors shall finally prevail in such proceeding (as evidenced by a final
judgment not subject to further appeal), the Obligors shall not be obligated to
indemnify the Lender with respect to Costs incurred in connection with such
proceeding (as it relates solely to the matter or matters in dispute between the
Obligors and the Lender and not any dispute between the Lender and any third
party). The obligations of the Obligors under this Section shall survive the
termination of this Agreement.
10.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10. Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable, or
invalid without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
10.11. Confidentiality; Public Disclosures. Subject to Geotek's
disclosure obligations under the Securities Act and the Exchange Act, and unless
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otherwise required by law or order of a court, administrative agency or other
quasi-judicial body of competent jurisdiction, and then only after providing
prompt written notice of its intention to disclose, no party hereto shall issue
any press release or make any public statement relating to the transactions
evidenced by this Agreement or otherwise disclose this agreement to any third
party without the other parties' written approval (such approval not to be
unreasonably withheld), except that this Agreement may be disclosed to each
party's attorneys, financial advisors and others in a confidential relationship
to such party.
ARTICLE XI
NOTICES
11.1. Giving Notice. Any notice required or permitted to be given
under this Agreement may be, and shall be deemed, given when deposited in the
United States mail, postage prepaid, or by facsimile transmission when
mechanical confirmation of a successful transmission has been received, or by
telegraph or telex when delivered to the appropriate office for transmission,
charges prepaid, addressed to the applicable Obligor or the Lender at the
addresses indicated below their signatures to this Agreement.
11.2. Change of Address. The Obligors and the Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XII
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all
of which taken together shall constitute one agreement, and either of the
parties hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by each of the Obligors
and the Lender.
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IN WITNESS WHEREOF, the Borrower, Geotek and the Lender have
executed this Agreement as of the date first above written.
Borrower:
GEOTEK FINANCING CORPORATION
By: /s/ Xxxxx Xxxxx
-------------------------------------------------
Title: President
Address: c/o Geotek Communications, Inc.
00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Geotek:
GEOTEK COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxx
-------------------------------------------------
Title: President and Chief Executive Officer
Address: 00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Lender:
XXXXXX NETWORK SYSTEMS, INC.
By: /s/ Xxxx X. Xxxx
-------------------------------------------------
Title: Chairman and Chief Executive Officer
Address: 00000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
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ANNEX A TO LOAN AGREEMENT
Adjustment of Maximum Conversion Price
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ANNEX A TO LOAN AGREEMENT
Adjustment of Maximum Conversion Price
The Maximum Conversion Price, as defined in the Loan Agreement of which
this Annex A forms a part (the "Loan Agreement"), and the number of shares of
Common Stock of Geotek issuable upon the conversion of the Loans shall be
adjusted in certain instances as provided herein. Capitalized terms not
otherwise defined herein shall have the meanings given to them in the Loan
Agreement.
(a) Adjustment for Change in Capital Stock.
If Geotek:
(1) pays a dividend or makes a distribution on its Common Stock
in shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(3) combines its outstanding shares of Common Stock into a
smaller number of shares;
(4) makes a distribution on its Common Stock in shares of its
Capital Stock other than Common Stock or preferred stock; or
(5) issues by reclassification of its Common Stock any shares of
its Capital Stock;
then the Maximum Conversion Price in effect immediately prior to such action
shall be proportionately adjusted so that, upon conversion of the Loans, the
Lender may receive the aggregate number and kind of shares of Capital Stock of
Geotek which the Lender would have owned immediately following such action if
such Loans had been converted immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
If after an adjustment the Lender may receive upon conversion shares of
two or more classes of Capital Stock of Geotek, Geotek shall determine the
allocation of the adjusted Maximum Conversion Price between the classes of
Capital Stock. After such allocation, the exercise privilege and the Maximum
Conversion Price of each class of Capital Stock shall thereafter be subject to
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adjustment on terms comparable to those applicable to Common Stock this Annex A.
Such adjustment shall be made successively whenever any event listed
above shall occur.
(b) Adjustment for Rights Issue.
If Geotek distributes any rights, options or warrants to all holders of
its Common Stock entitling them for a period expiring within 60 days after the
record date mentioned below to purchase shares of Common Stock at a price per
share less than the current market price per share on that record date, the
Maximum Conversion Price shall be adjusted in accordance with the formula:
O + N x P
-----
E' = E x M
-------
O + N
where:
E'= the adjusted Maximum Conversion Price.
E = the current Maximum Conversion Price.
O = the number of shares of Common Stock outstanding on the record
date.
N = the number of additional shares of Common Stock offered pursuant
to such rights issuance.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock on the record
date.
The adjustment shall be made successively whenever any such rights,
options or warrants are issued and shall become effective immediately after the
record date for the determination of stockholders entitled to receive the
rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Maximum Conversion Price shall be immediately
readjusted to what it would have been if "N" in the above formula had been the
number of shares actually issued.
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41
(c) Adjustment for Other Distributions.
If Geotek distributes to all holders of its Common Stock any of its
assets (including but not limited to cash (other than as provided below)), debt
securities, or any rights or warrants to purchase debt securities, assets or
other securities of Geotek, the Maximum Conversion Price shall be adjusted in
accordance with the formula:
E' = E x M - F
-----
M
where:
E'= the adjusted Maximum Conversion Price.
E = the current Maximum Conversion Price.
M = the current market price per share of Common Stock on the record
date mentioned below.
F = the fair market value on the record date of the assets,
securities, rights or warrants applicable to one share of Common
Stock. The Board of Directors of Geotek shall determine the fair
market value, such determination to be evidenced by a board
resolution.
The adjustment shall be made successively whenever any such distribution
is made and shall become effective immediately after the record date for the
determination of stockholders entitled to receive the distribution.
This section (c) does not apply to (i) rights, options or warrants
referred to in section (b) of this Annex A or (ii) cash dividends or
distributions paid out of consolidated current or retained earnings.
(d) Current Market Price.
In sections (b) and (c) of this Annex A the current market price per
share of Common Stock on any date is the average of the Quoted Prices of the
Common Stock for 30 consecutive trading days commencing 45 trading days before
the date in question. The "Quoted Price" of the Common Stock is the last
reported sales price of the Common Stock as reported by NASDAQ, National Market
System, or if the Common Stock is listed on a securities exchange, the last
reported sales price of the Common Stock on such exchange which shall be for
consolidated trading if applicable to such exchange, or if neither so reported
or listed, the last reported bid price of the Common Stock. In the absence of
one or
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more such quotations, the Board of Directors of Geotek shall determine the
current market price on the basis of such quotations as it in good faith
considers appropriate, such determination to be evidenced by a board resolution.
(e) When De Minimis Adjustment May Be Deferred.
No adjustment in the Maximum Conversion Price need be made unless the
adjustment would require an increase or decrease of at least 1% in the Maximum
Conversion Price. Any adjustments that are not made shall be carried forward and
taken into account in any subsequent adjustment.
All calculations under this Annex A shall be made to the nearest cent or
to the nearest 1/100th of a share, as the case may be.
(f) When No Adjustment Required.
No adjustment need be made for a transaction referred to in sections
(a), (b) or (c) of this Annex A if the Lender is to participate in the
transaction on a basis and with notice that the Board of Directors of Geotek
determines to be fair and appropriate in light of the basis and notice on which
holders of Common Stock participate in the transaction, such determination to be
evidenced by a board resolution.
No adjustment need be made for rights to purchase Common Stock pursuant
to a company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value
of the Common Stock.
(g) Notice of Adjustment.
Whenever the Maximum Conversion Price is adjusted as herein provided,
Geotek shall notify the Lender in accordance with Section 11.1 of the Loan
Agreement that the Maximum Conversion Price has been adjusted and set forth in
such notice the adjusted Maximum Conversion Price and the facts upon which such
adjustment is based.
(h) Voluntary Reduction.
Geotek from time to time may reduce the Maximum Conversion Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided, however, that in no event
may the Maximum Conversion Price be less than the par value of a share of Common
Stock.
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Whenever the Maximum Conversion Price is reduced, Geotek shall mail to
the Lender a notice of the reduction. Geotek shall mail the notice at least 15
days before the date the reduced Maximum Conversion Price takes effect. The
notice shall state the reduced Maximum Conversion Price and the period it will
be in effect.
A reduction of the Maximum Conversion Price does not change or adjust
the Maximum Conversion Price otherwise in effect for purposes of sections (a),
(b) and (c) of this Annex A.
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ANNEX B TO LOAN AGREEMENT
Registration Rights
45
ANNEX B TO LOAN AGREEMENT
Registration Rights
The shares of Common Stock of Geotek issued upon conversion of the Loans
as set forth in the Loan Agreement of which this Annex B forms a part (the "Loan
Agreement"), shall be entitled to the registration rights provided herein with
respect to the resale thereof by the Holders (as hereinafter defined).
Capitalized terms not otherwise defined herein shall have the meanings given to
them in the Loan Agreement.
(A) Shelf Registration.
(1) Geotek shall file with the Commission, by June 30, 1996, a "shelf"
registration statement (a "Shelf Registration") with respect to all of the
Registrable Securities on an appropriate form pursuant to Rule 415 (or any
similar provision that may be adopted by the Commission) under the Securities
Act, which form shall be available for the sale of the Registrable Securities to
the public from time to time, and shall use its best efforts to cause the
Commission to declare such Shelf Registration effective for all of the
Registrable Securities on or prior to the first day of the Conversion Period.
(2) Geotek shall use its best efforts to keep the Shelf Registration
continuously effective and useable for resale of Registrable Securities until
the third anniversary of the Maturity Date or such shorter period that will
terminate when all the Registrable Securities covered by the Shelf Registration
have been sold pursuant to the terms of the Shelf Registration or are otherwise
no longer Registrable Securities.
Geotek further agrees to use its best efforts to prevent the happening
of any event that would cause the registration statement pursuant to this
Section A to contain a material misstatement or omission or to be not effective
and usable for resale of the Registrable Securities during the period that such
Registration Statement is required to be effective and usable.
(3) In the event that the registration statement (i) is not filed with
the Commission on or prior to the date specified for such filing in Section A(1)
hereof; (ii) has not been declared effective by the Commission pursuant to
Section A(1) hereof; or (iii) following the date such registration statement is
declared effective by the Commission, shall cease to be effective without being
restored to effectiveness by amendment or otherwise within 30 Business Days,
(each such event referred to in clauses (i) through (iii), a "Shelf Registration
Default") Geotek agrees to extend the period during which it shall use its best
efforts to keep the
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Shelf Registration effective, as provided in Section (A)(2) hereof, by the
number of days such Shelf Registration Default continues.
(B) Registration Expenses.
Geotek will pay all Registration Expenses in connection with each
registration of Registrable Securities.
(C) Registration Procedures.
(1) General Provisions. In connection with Geotek's registration
obligations set forth herein, Geotek will use its best efforts to effect such
registration to permit the sale of such Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
Geotek will as expeditiously as possible:
a. use its best efforts to keep such registration statement
continuously effective and provide all requisite financial statements
for the period specified in Section (A)(1) of this Annex B. Upon the
occurrence of any event that would cause any such registration statement
or the prospectus contained therein (A) to contain a material
misstatement or omission or (B) not to be effective and usable for
resale of Registrable Securities during the period required by this
Annex B, Geotek shall file promptly an appropriate amendment to such
registration statement or file appropriate documents that will be so
incorporated by reference, (1) in the case of clause (A), correcting any
such misstatement or omission, and (2) in the case of either clause (A)
or (B), use its best efforts to cause such amendment to be declared
effective and such registration statement and the related prospectus to
become usable for their intended purpose(s) as soon as practicable
thereafter;
b. prepare and file with the Commission such amendments and
post-effective amendments to the registration statement as may be
necessary to keep the registration statement effective for the period
set forth herein; cause the prospectus to be supplemented by any
required prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Securities Act and to comply fully with
Rule 424, as applicable, under the Securities Act in a timely manner;
and comply in all material respects with the provisions of the
Securities Act with respect to the disposition of all securities covered
by such registration statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such registration statement or supplement
to the prospectus; Geotek shall not be deemed to have used its best
efforts to keep a registration statement effective during the applicable
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47
period if it voluntarily takes any action that would result selling
Holders of the Registrable Securities covered thereby not being able to
sell such Registrable Securities during that period unless such action
is required or advisable under applicable law or the action is for a
valid business purpose in the interest of Geotek and its effect on the
registration statement is not the purpose of the action;
c. advise selling Holders promptly and, if requested by such
Persons, confirm such advice in writing, (1) when the prospectus or any
prospectus supplement or post-effective amendment has been filed, and,
with respect to any registration statement or any post-effective
amendment thereto, when the same has become effective, (2) of any
request by the Commission for amendments to the registration statement
or amendments or supplements to the prospectus or for additional
information relating thereto, (3) of the issuance by the Commission of
any stop order suspending the effectiveness of the registration
statement under the Securities Act or of the suspension by any state
securities commission of the qualification of the Registrable Securities
for offering or sale in any jurisdiction, or the initiation of any
proceeding for any of the preceding purposes, (4) of the existence of
any fact or the happening of any event that makes any statement of a
material fact made in the registration statement, the prospectus, any
amendment or supplement thereto or any document incorporated by
reference therein untrue, or that requires the making of any additions
to or changes in the registration statement in order to make the
statements therein not misleading, or that requires the making of any
additions to or changes in the prospectus in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading. If at any time the Commission shall issue any
stop order suspending the effectiveness of the registration statement,
or any state securities commission or other regulatory authority shall
issue an order suspending the qualification or exemption from
qualification of the Registrable Securities under state securities or
blue sky laws, Geotek shall use its best efforts to obtain the
withdrawal or lifting of such order at the earliest practicable time;
d. make available to each selling Holder named in any
registration statement or prospectus before filing with the Commission,
copies of any registration statement or any prospectus included therein
or any amendments or supplements to any such registration statement or
prospectus (including all documents incorporated by reference after the
initial filing of such registration statement), portions of which
relating to such Holders or their plan of distribution (the "Covered
Provisions") will be subject to the review and comment of such Holders
for a period of three Business Days, and Geotek will not file any such
registration statement or prospectus or any amendment or supplement to
any such registration
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statement or prospectus and will correct all of the Covered Provisions
to which the selling Holders covered by such registration statement
shall reasonably object within three Business Days after the receipt
thereof. A selling Holder shall be deemed to have reasonably objected to
such filing if such registration statement, amendment, prospectus or
supplement, as applicable, as proposed to be filed, if the Covered
Provision contains a material misstatement or omission or fails to
comply with the applicable requirements of the Securities Act;
e. promptly upon the filing of any document that is to be
incorporated by reference into a registration statement or prospectus,
make available copies of such document to the selling Holders, make
Geotek's representatives available for discussion of such document and
other customary due diligence matters, and include such information in
such document prior to the filing thereof as such selling Holders
reasonably may request;
f. make available at reasonable times for inspection by the
selling Holders and any attorney or accountant retained by such selling
Holders, all financial and other records, pertinent corporate documents
and properties of Geotek and cause Geotek's officers, directors and
employees to supply all information reasonably requested by any such
Holder, attorney or accountant in connection with such registration
statement or any post-effective amendment thereto subsequent to the
filing thereof and prior to its effectiveness; provided that any person
to whom information is provided under this clause f. agrees in writing
to maintain the confidentiality of such information to the extent such
information is not in the public domain;
g. if requested by any selling Holders, promptly include in any
registration statement or prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders may reasonably request to have included therein, including,
without limitation, information relating to the "Plan of Distribution"
of the Registrable Securities, the purchase price being paid therefor
and any other terms of the offering of the Registrable Securities to be
sold in such offering; and make all required filings of such prospectus
supplement or post-effective amendment as soon as practicable after
Geotek is notified of the matters to be included in such prospectus
supplement or post-effective amendment;
h. furnish to each selling Holder, without charge, at least one
copy of the registration statement, as first filed with the Commission,
and of each amendment thereto;
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i. deliver to each selling Holder, without charge, as many
copies of the prospectus (including each preliminary prospectus) and any
amendment or supplement thereto as such Persons reasonably may request;
Geotek hereby consents to the use of the prospectus and any amendment or
supplement thereto by each of the selling Holders in connection with the
offering and the sale of the Registrable Securities covered by the
prospectus or any amendment or supplement thereto;
j. In connection with the registration statement contemplated by
this Annex B, Geotek shall:
(i) furnish to each selling Holder, upon the
effectiveness of the registration statement:
(1) a certificate, dated the date of
effectiveness of the registration statement, signed by
(x) the President or any Vice President and (y) a
principal financial or accounting officer of Geotek,
confirming, as of the date thereof, the matters set forth
in Section 3.2(ii)(a) of the Loan Agreement and such
other matters as the Holders may reasonably request;
(2) an opinion, dated the date of effectiveness
of the registration statement, of counsel for Geotek,
covering (i) due authorization and enforceability of the
Loan Agreement, (ii) a statement to the effect that such
counsel has participated in conferences with officers and
other representatives of Geotek and representatives of
the independent public accountants for Geotek and have
considered the matters required to be stated therein and
the statements contained therein, although such counsel
has not independently verified the accuracy, completeness
or fairness of such statements; and that such counsel
advises that, on the basis of the foregoing (relying as
to materiality to a large extent upon facts provided to
such counsel by officers and other representatives of
Geotek and without independent check or verification), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable registration
statement, at the time such registration statement or any
post-effective amendment thereto became effective,
contained an untrue statement of a material fact or
omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, or that the prospectus contained in such
registration statement as of its date contained an untrue
statement of a material fact or omitted to state a
material fact necessary in
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order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading and (iii) such other matters of the type
customarily covered in opinions of counsel for an issuer
in connection with similar securities offerings, as may
reasonably be requested by such parties. Without
limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has
not independently verified, the accuracy, completeness
or fairness of the financial statements, notes and
schedules and other financial, statistical and
accounting data included in any registration statement
contemplated by this Annex B or the related prospectus;
and
(3) a customary comfort letter, dated as of the
date of effectiveness of the registration statement,
from Geotek's independent accountants, in the customary
form and covering matters of the type customarily
covered in such comfort letters; and
(ii) deliver such other documents and certificates as may
be reasonably requested by such parties to evidence compliance with
clause (i) above.
The above shall be done in connection with the filing of the
Shelf Registration and if at any time the representations and warranties
of Geotek contemplated in (i)(1) above cease to be true and correct,
Geotek shall so advise the selling Holders promptly and if requested by
such Persons, shall confirm such advice in writing;
k. prior to any public offering of Registrable Securities,
cooperate with the selling Holders and their respective counsel in
connection with the registration and qualification of the Registrable
Securities under the securities or blue sky laws of such jurisdictions
as the selling Holders may reasonably request and use its best efforts
to do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdiction of the Registrable Securities
covered by the applicable registration statement; provided, however,
that Geotek shall not be required to register or qualify as a foreign
corporation where it is not now so qualified or to take any action that
would subject it to service of process in suits or to taxation other
than as to matters and transactions relating to the registration
statement, in any jurisdiction where it is not now so subject;
l. in connection with any sale of Registrable Securities that
will result in such securities no longer being Transfer Restricted
Securities,
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cooperate with the selling Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be
sold and not bearing any restrictive legends; and to register such
Registrable Securities in such denominations and such names as the
Holders may request at least two Business Days prior to such sale of
Registrable Securities;
m. use its best efforts to cause the Registrable Securities
covered by the registration statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers thereof to consummate the disposition of
such Registrable Securities, subject to the proviso contained in clause
k. above;
n. if any fact or event contemplated by clause c.(4) above shall
exist or have occurred, prepare a supplement or post-effective amendment
to the registration statement or related prospectus or any document
incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Registrable
Securities, the prospectus will not contain an untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
o. provide a CUSIP number for all Registrable Securities not
later than the effective date of a registration statement covering such
Registrable Securities;
p. otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make generally available to
its security holders with regard to the registration statement, as soon
as practicable, but in any event within sixteen months of the
effectiveness of the registration statement, a consolidated earnings
statement meeting the requirements of Rule 158 under the Securities Act
(which need not be audited) covering a twelve-month period beginning
after the effective date of the registration statement (as such term is
defined in paragraph (c) of such Rule 158); and
q. cause all Registrable Securities covered by the registration
statement to be listed on each securities exchange on which similar
securities issued by Geotek are then listed if requested by the Holders
of a majority in aggregate principal amount of Registrable Securities.
(2) Restrictions on Holders. Each Holder agrees by acquisition of a
Registrable Security that, upon receipt of any notice from Geotek of the
existence of any fact of the kind described in Section (C)(1)(c)(4) hereof, such
Holder will
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forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement until such Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section (C)(1)(n) hereof, or
until it is advised in writing (the "Advice") by Geotek that the use of the
prospectus may be resumed, and has received copies of any additional or
supplemental filings that are incorporated by reference in the prospectus. If
so directed by Geotek, each Holder will deliver to Geotek (at Geotek's expense)
all copies, other than permanent file copies then in such Holder's possession,
of the prospectus covering such Registrable Securities that was current at the
time of receipt of such notice. In the event Geotek shall give any such notice,
the time period regarding the effectiveness of such registration statement set
forth in herein shall be extended by the number of days during the period from
and including the date of the giving of such notice pursuant to Section
(C)(1)(c)(4) hereof to and including the date when each selling Holder covered
by such registration statement shall have received the copies of the
supplemented or amended prospectus contemplated by Section (C)(1)(c)(4) hereof
or shall have received the Advice.
(D) Indemnification.
(1) Indemnification by Geotek. Geotek agrees to indemnify and hold
harmless each Holder, its officers, directors, employees and agents and each
person who controls such Holder within the meaning of either Section 15 of the
Securities Act or Section 20(a) of the Exchange Act (each such person being
sometimes hereinafter referred to as an "Indemnified Holder") from and against
all losses, claims, damages, liabilities and expenses (including reasonable
costs of investigation and legal expenses) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
registration statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages, liabilities or expenses arise out of or are based upon
any such untrue statement or omission or allegation thereof based upon
information relating to such Indemnified Holder and furnished in writing to
Geotek by such Indemnified Holder expressly for use therein. This indemnity will
be in addition to any liability which Geotek may otherwise have.
If any action or proceeding (including any governmental investigation or
inquiry) shall be brought or asserted against an Indemnified Holder in respect
of which indemnity may be sought from Geotek, such Indemnified Holder shall
promptly notify Geotek in writing, and Geotek shall assume the defense thereof,
including the employment of counsel reasonably satisfactory to such Indemnified
Holder and the payment of all expenses. Such Indemnified Holder shall have the
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right to employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Holder unless (a) Geotek has agreed to pay such fees
and expenses or (b) Geotek shall have failed to assume the defense of such
action or proceeding and has failed to employ counsel reasonably satisfactory to
such Indemnified Holder in any such action or proceeding or (c) the named
parties to any such action or proceeding (including any impleaded parties)
include both such Indemnified Holder and Geotek, and there are one or more legal
defenses available to such Indemnified Holder which are different from or
additional to those available to Geotek (in which case, if such Indemnified
Holder notifies Geotek in writing that it elects to employ separate counsel at
the expense of Geotek, Geotek shall not have the right to assume the defense of
such action or proceeding on behalf of such Indemnified Holder, it being
understood, however, that Geotek shall not, in connection with any one such
action or proceeding or separate but substantially similar or related actions or
proceedings in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys at any time for such Indemnified Holder
and any other Indemnified Holders, which firm shall be designated in writing by
such Indemnified Holders). Geotek shall not be liable for any settlement of any
such action or proceeding effected without its written consent, but if settled
with its written consent, or if there be a final judgment for the plaintiff in
any such action or proceeding, Geotek agrees to indemnify and hold harmless such
Indemnified Holders from and against any loss or liability by reason of such
settlement or judgment.
(2) Indemnification by Holder of Registrable Securities. Each Holder
agrees to indemnify and hold harmless Geotek, its directors and officers and
each person, if any, who controls Geotek within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act to the same extent
as the foregoing indemnity from Geotek to such Holders, but only with respect to
information relating to such Holders furnished in writing by such Holders
expressly for use in any registration statement or prospectus, or any amendment
or supplement thereto, or any preliminary prospectus. In case any action or
proceeding shall be brought against Geotek or its directors or officers or any
such controlling person, in respect of which indemnity may be sought against a
Holder, such Holder shall have the rights and duties given to Geotek and Geotek
or its directors or officers or such controlling person shall have the rights
and duties given to each Holder by the preceding paragraph. In no event shall
the liability of any Holder hereunder be greater in amount than the dollar
amount of the proceeds received by such Holder upon the sale of the Registrable
Securities giving rise to such indemnification obligation.
(3) Contribution. If the indemnification provided for in this Section
(D) is unavailable to an indemnified party under Section (D)(1) or Section
(D)(2) hereof
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(other than by reason of exceptions provided in those Sections) in respect of
any losses, claims, damages, liabilities or expenses referred to therein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative benefits received by Geotek
on the one hand and the Holders on the other hand from their sale of Registrable
Securities or if such allocation is not permitted by applicable law, the
relative fault of Geotek on the one hand and of the Indemnified Holder on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or expenses, as well as any other relevant
equitable considerations. The relative fault of Geotek on the one hand and of
the Indemnified Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by Geotek or by the Indemnified Holder and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in the
second paragraph of Section (D)(1), any legal or other fees or expenses
reasonably incurred by such party in connection with investigating or defending
any action or claim.
Geotek and each Holder agree that it would not be just and equitable if
contribution pursuant to this Section (D)(3) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section (D)(3), an Indemnified Holder
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Registrable Securities sold by such Indemnified
Holder or its affiliated Indemnified Holders and distributed to the public were
offered to the public exceeds the amount of any damages which such Indemnified
Holder, or its affiliated Indemnified Holder, has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
(E) Specific Performance
Geotek acknowledges that there would be no adequate remedy at law if it
fails to perform any of its obligations under this Annex B and the Holders may
be irreparably harmed by any such failure, and accordingly agrees that the
Holders, in addition to any other remedy to which such Holders may be entitled
at law or in
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equity, shall be entitled to compel specific performance of the obligations of
Geotek under this Annex B in accordance with the terms and conditions of this
Annex B, in any court of the United States or any State thereof having
jurisdiction. To the extent that Geotek's obligations under this Annex B are not
absolute but, rather, are subject to "best efforts" or similar provisions, the
right of the Lender to compel specific performance hereunder shall be a right to
compel Geotek to use such efforts as it has obligated itself to undertake
hereunder.
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EXHIBIT A
THIS NOTE AND THE SHARES OF COMMON STOCK OF GEOTEK COMMUNICATIONS, INC.,
ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED OR SOLD, UNLESS REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES
LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE AND THEN ONLY IN
COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH IN THE LOAN AGREEMENT,
DATED AS OF DECEMBER 21, 1995, A COPY OF WHICH MAY BE OBTAINED FROM GEOTEK
FINANCING CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE.
GUARANTEED SECURED CONVERTIBLE NOTE
$24,500,000 _____________, 1996
GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), promises
to pay to Xxxxxx Network Systems, Inc. (the "Lender"), in immediately available
funds, the principal sum of TWENTY-FOUR MILLION FIVE HUNDRED THOUSAND DOLLARS
($24,500,000), or such lesser amount as may then constitute the aggregate unpaid
principal amount of the Loans made to the Borrower by the Lender pursuant to the
Loan Agreement (as defined below), together with interest thereon at the rates
and on the dates specified in Section 2.2 of the Loan Agreement, dated as of
December 21, 1995, by and among the Borrower, the Lender and Geotek
Communications, Inc., as Guarantor (as the same may be amended, modified or
restated from time to time, the "Loan Agreement"). Capitalized terms used herein
and not otherwise defined herein are used with the meanings attributed to them
in the Loan Agreement.
All interest shall be computed for actual days elapsed on the basis of a 360-day
year.
The obligations of the Borrower under this Note have been unconditionally
guaranteed by the Guarantor, as more fully provided in Article VI of the Loan
Agreement.
Subject to and upon compliance with the terms of the Loan Agreement, the Lender,
at its option, at any time and from time to time before the Maturity Date, shall
have the right to convert the outstanding principal amount of this Note into
fully-paid and non-assessable shares of Common Stock of the Guarantor at the
Conversion Price, in such amounts and in the manner set forth in Article IX of
the Loan Agreement. The Maximum Conversion Price is subject to adjustment as
provided in the Loan Agreement.
The Borrower hereby authorizes the Lender to endorse on the Schedule annexed to
this Note the principal amount of all Loans made by the Lender to the Borrower
under
57
the Loan Agreement as well as the reductions to the aggregate principal amount
of this Note related to the conversion of such principal amount to shares of
Common Stock of the Guarantor; provided, that the failure to make any such
notations on such Schedule shall not limit or otherwise affect the obligations
of the Borrower under the Loan Agreement or this Note.
The Borrower shall have no right to prepay the Loans evidenced by this Note, in
whole or in part, prior to the Maturity Date.
This Note is the Note issued pursuant to, and is entitled to the benefits of,
the Loan Agreement, to which Loan Agreement, as it may be amended from time to
time, reference is hereby made for a statement of the terms and conditions under
which the Maturity Date of this Note may be accelerated.
This Note is secured pursuant to the terms of the Pledge Agreement.
This Note is subject to the restrictions on transfer set forth in Section 10.1
of the Loan Agreement.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AND NOT THE
LAW OF CONFLICTS) OF THE STATE OF NEW YORK.
GEOTEK FINANCING CORPORATION
By:_______________________________
Title: ___________________________
2
58
SCHEDULE OF BORROWINGS AND CONVERSIONS OF PRINCIPAL
TO
GUARANTEED SECURED CONVERTIBLE NOTE
OF GEOTEK FINANCING CORPORATION
DATED ________________, 1996
Amount of Amount of Principal
Date Borrowing Converted Unpaid Balance
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3
