1
EXHIBIT III
AMENDMENT NO. 1 TO LOAN AGREEMENT
DATED AS OF DECEMBER 21,1995
BETWEEN
GEOTEK FINANCING CORPORATION, AS BORROWER
GEOTEK COMMUNICATIONS, INC., AS GUARANTOR AND
XXXXXX NETWORK SYSTEMS, INC., AS LENDER
THIS AMENDMENT NO. 1 TO LOAN AGREEMENT (this "Amendment") is made as
of the 27th day of September, 1996, by and among GEOTEK FINANCING CORPORATION, a
Delaware Corporation ("Borrower"), GEOTEK COMMUNICATIONS, INC., a Delaware
Corporation and the corporate parent of Borrower ("Geotek") and XXXXXX NETWORK
SYSTEMS, INC., a Delaware corporation (the "Lender").
BACKGROUND:
A. The parties hereto entered into a Loan Agreement as of the 21st day of
December, 1995 (the "Loan Agreement") and, simultaneous with the execution of
this Amendment, are entering into a Vendor Credit Financing Agreement (the
"Credit Agreement").
B. As an inducement to the parties hereto to enter into the Credit
Agreement and the other Facility Documents (as defined in the Credit Agreement),
the parties have agreed to amend certain provisions of the Loan Agreement as set
forth herein.
AGREEMENT:
1. Definitions.
(a) As used herein. the following terms shall have the
following meanings and such definitions shall be added in the appropriate place
in Article I of the Loan Agreement:
"CONVERSION SHARES" means shares of Common Stock issued upon
conversion of the Note and upon exercise of the Warrants.
"CREDIT AGREEMENT" means that certain Vendor Credit Financing
Agreement dated as of September 27, 1996 by and among Borrower. Geotek and
Lender.
"MAXIMUM SALES AMOUNT" means the greater of (i) a number of
shares of Common Stock, with an aggregate market value (based on the Quoted
Price of Geotek's Common Stock on the Trading Day immediately preceding the sale
or transfer for which the determination is being made) equal to $500,000 and
(ii) such number of shares which is equal to 5% of the average daily trading
volume of Geotek's Common Stock on the primary interdealer quotation system or
national
2
securities exchange on which the Common Stock is traded for the thirty (30)
Trading Day period immediately preceding the date of the sale or transfer.
"QUOTED PRICE" means the last reported sales price of the Common
Stock on any national securities exchange on which the Common Stock is listed
which shall be for consolidated trading if applicable to such exchange, or if
not so listed, the last reported bid price of the Common Stock.
"WARRANTS" means the warrants issued by Geotek to the Lender in
connection with the Credit Agreement, as such Warrants may be amended or
otherwise modified from time to time.
The definition of Permitted Liens contained in the Loan Agreement shall
be deleted and replaced with the definition of Permitted Liens contained in the
Credit Agreement and the definition of "Pledge Agreement" shall be amended and
restated in its entirety to read as follows:
"Pledge Agreement" means the Amended and Restated Borrower
Pledge Agreement between the Borrower and Lender, dated as of
September 27, 1996, substantially in the form attached as
Exhibit B to the Credit Agreement.
All other capitalized terms used herein and not otherwise defined,
shall have the respective meanings set forth in the Loan Agreement.
(b) The Funding Cutoff Date shall be amended to mean October 4,
1996.
2. Section 9.1(a) of the Loan Agreement is amended and restated
in its entirety to read as follows:
(a) Subject to and upon compliance with the provisions of this
Article IX, 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 immediately on the Initial Funding Date
and shall expire on the Maturity Date (the "Conversion Period").
3. Sections 9.2(a)-(c) of the Loan Agreement are amended and
restated in their entirety to read as follows:
(a) (i) At all times prior to October 1, 1996, Lender and its
Affiliates may only convert the Loans to the extent that the Conversion
Shares issuable upon such conversion does not exceed 10,000 shares of
Common Stock per Trading Day.
(ii) During the portion of the Conversion Period occurring
on or
-2-
3
after October 1, 1996, Lender and its Affiliates may only convert up to
$500,000 of the Loans into Conversion Shares on any Trading Day;
provided, however, that the Lender and its Affiliates may convert the
entire remaining principal balance of the Loans into Conversion Shares
on the Trading Day next preceding the Maturity Date.
(b) Notwithstanding the provisions of paragraph (a) above, on
any Trading Day during the Conversion Period, the Lender and its
Affiliates may convert the entire remaining balance of the Loans into
Conversion Shares at the Maximum Conversion Price thereunder; provided
that, the Lender and its Affiliates thereafter comply with Section (c)
hereof.
(c) Notwithstanding the provisions of paragraph (a) and (b)
hereof, so long as Lender or any of its Affiliates owns any Conversion
Shares neither Lender nor any of its Affiliates shall sell or otherwise
transfer (other than sales or transfers between Lender and one or more
of its Affiliates or between Lender's Affiliates) (i) greater than
10,000 Conversion Shares on any Trading Day occurring prior to October
1, 1996 or (ii) on any Trading Day occurring on or after October 1,
1996, greater than such number of Conversion Shares as is equal to the
Maximum Sales Amount. All sales and transfers by Lender and its
Affiliates on a Trading Day shall be aggregated for the purpose of
determining whether the Lender and its Affiliates have complied with
this Section.
4. Section 9.2(d) of the Loan Agreement is amended by replacing
"$300,000" with "the Maximum Sales Amount".
5. Section 2.4(a) of the Loan Agreement is amended and restated in
its entirety to read as follows:
(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 or are to be used to reimburse the Borrower
for the prior purchase of 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 in the case of Loans the proceeds of
which are to be used concurrently with purchase of any
Auction 900 MHz Licenses, shall promptly remit such
funds to the FCC (or to Holdings for prompt remittance
to the FCC).
and the definition of Auction 900 MHz Licenses is amended to mean any 900 MHz
Licenses purchased or to be purchased by Holdings from the FCC with the proceeds
of the Loans (whether
-3-
4
such proceeds are provided to Borrower before or after the purchase).
6. Section 3.2(i)(c) of the Loan Agreement is amended by adding at
the end thereof: "or (3) such Auction 900 MHz Licenses are then held by Holdings
(including copies of all such 900MHz Licenses)."
7. The penultimate sentence of Section 5.4 of the Loan Agreement is
amended by adding at the end thereof: "and other than transactions contemplated
by Section 5.13(b) of the Loan Agreement and Section 5.3 of the Credit
Agreement."
8. Section 5.11 of the Loan Agreement is amended and restated in
its entirety as follows:
Indebtedness. The Borrower will not, nor will it permit any of
its Subsidiaries to incur any Indebtedness other than (a) the
Loans, (b) Advances under the Credit Agreement, (c) the Holdings
Note (in the case of Holdings) and (d) the Guarantees by the
Borrower and Holdings required to be provided under the
Indenture as in effect on the date hereof.
9. Section 5.18 of the Loan Agreement is amended by adding at the
end thereof: "or pursuant to Section 5.17 of the Credit Agreement."
10. Section 5.20 of the Loan Agreement is amended by adding at the
end thereof: "other than Letters of Credit for the benefit of Xxxxxx Network
Systems, Inc."
11. Section 5.21 of the Loan Agreement is amended by adding at the
end thereof: "or in the Credit Agreement."
12. Section 5.26 of the Loan Agreement is amended and restated in
its entirety as follows:
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 as contemplated by Section 5.13 hereof).
13. The last sentence of Section 10.1(b) of the Loan Agreement is
amended and restated in its entirety to read as follows:
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 September 30, 1997, provided, however, that
nothing contained in this Section 10.1(b) shall prevent Lender
from converting the Note or selling Conversion Shares prior to
September
-4-
5
30, 1997 or thereafter as provided by and subject to the
limitations contained in Article IX.
14. Borrower agrees, no later than the day of execution of the
Credit Agreement, to deliver to Lender a notice which complies with the
requirements set forth in Section 3.2(i) (which notice shall be irrevocable) of
the Loan Agreement with respect to a Loan Amount equal to $24,500,000 and to
otherwise satisfy (unless waived by Lender) the conditions precedent set forth
in Article III of the Loan Agreement.
15. Except as expressly supplemented and/or modified herein, the
terms of the Loan Agreement shall continue in full force and effect.
[SIGNATURE PAGE FOLLOWS]
-5-
6
IN WITNESS WHEREOF, the Borrower, Geotek and Lender have executed this
Amendment as of this 27 day of September, 1996.
Borrower:
GEOTEK FINANCING CORPORATION
By: /s/ XXXXXXX XXXXX
------------------------------------
Name: Xxxxxxx XxXxx
Title: Chief Financial Officer
Geotek:
GEOTEK COMMUNICATIONS, INC.
By: /s/ XXXXXXX XXXXX
------------------------------------
Name: Xxxxxxx XxXxx
Title: Chief Financial Officer
Lender:
XXXXXX NETWORK SYSTEMS, INC.
By: /s/ XXXXXXX XXXX
------------------------------------
Name: Xxxxxxx Xxxx
Title: Executive Vice President
-6-
