EXHIBIT Q
CONVERTIBLE SECURITIES SUBSCRIPTION AGREEMENT
This Convertible Securities Subscription Agreement (the "Agreement") has been
executed by the undersigned (the "Subscriber") in connection with the sale of
certain shares of Series P Convertible Preferred Stock, $.01 par value, and an
initial Designated Price (as defined in the Certificate of Designation with
respect thereto) of $50,000 per share (the "Preferred Stock"), of Geotek
Communications, Inc., a Delaware corporation (the "Company"), convertible into
shares of Common Stock, $.01 par value (the "Common Stock"), of the Company. The
rights and preferences of the Preferred Stock, including the terms on which the
Preferred Stock may be converted into Common Stock and the terms of certain
warrants issuable in connection with the Company's redemption of the Preferred
Stock, are set forth in the Certificate of Designation attached hereto as
Exhibit A (the "Certificate of Designation") which shall have been executed,
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acknowledged, filed, recorded and become effective in accordance with the
General Corporation Law of the State of Delaware prior to the acceptance by the
Company of this Agreement. The terms of certain warrants (collectively with the
warrants issuable in connection with the Company's redemption of the Preferred
Stock, the "Warrants") issuable in connection with the issuance of the Preferred
Stock are set forth in Exhibit A-1 attached hereto. The solicitation of this
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Agreement and, if accepted by the Company, the offer and sale of Preferred Stock
and Warrants, are being made in reliance upon the provisions of Regulation D
("Regulation D") promulgated by the Securities and Exchange Commission ("SEC")
under the United States Securities Act of 1933, as amended (the "Securities
Act"), or under the provisions of Section 4(2) of the Securities Act. The
Preferred Stock, the Warrants and the Common Stock issuable upon conversion or
exercise thereof are sometimes collectively referred to in this Agreement as the
"Securities." The Common Stock issuable upon conversion of the Preferred Stock
and upon exercise of the Warrants is sometimes referred to as the "Underlying
Stock." The Subscriber wishes to subscribe for the number of shares of Preferred
Stock and at the aggregate purchase price set forth in Section 13 and in
accordance with the other terms and conditions of this Agreement, the
Certificate of Designation and the Registration Rights Agreement attached hereto
as Exhibit B. In consideration of the mutual promises, representations,
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warranties and conditions set forth herein, and intending to be legally bound
hereby, the Company and the Subscriber agree as follows:
1. Agreement to Subscribe; the Subscriber
1.1 Purchase and Issuance of Preferred Stock and Warrants. The Subscriber
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hereby subscribes for the number of shares of Preferred Stock and
Warrants at the aggregate purchase price set forth in Section 13. The
Page 29 of 81 Pages
closing of the purchase of such shares of Preferred Stock and Warrants
(the "Closing") shall occur on January 23, 1997 or such other date as
the Company and the Subscriber shall agree (the "Closing Date") and
shall be deemed to have occurred when (i) a copy of the Certificate of
Designation as filed and certified by the Secretary of State of the
State of Delaware has been delivered to the Subscriber, (ii) this
Agreement and the Registration Rights Agreement have been executed and
delivered by both the Subscriber and the Company, (iii) the purchase
price has been delivered by the Subscriber to the Company (in same day
funds via wire transfer pursuant to instructions previously delivered
for such purpose), and (iv) certificates representing the shares of
Preferred Stock and Warrants subscribed for hereby have been delivered
by the Company to Subscriber.
1.2 Nature of the Subscriber. The Subscriber is purchasing the Preferred
-------------------------
Stock for its own account and the Subscriber represents and warrants
that it is an "Accredited Investor" as that term is defined in Rule
501 of Regulation D.
1.3 Conditions Precedent to the Obligation of the Company to Issue and
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Sell the Preferred Stock and Warrants. The obligation hereunder of the
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Company to issue and/or sell the Preferred Stock and Warrants to the
Subscriber is subject to the satisfaction, at or before the Closing,
of each of the conditions set forth below. These conditions are for
the Company's sole benefit and may be waived by the Company at any
time in its sole discretion.
(a) Accuracy of the Subscriber's Representations and Warranties. The
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representations and warranties of the Subscriber shall be true
and correct as of the date when made and as of the Closing Date
as though made at each such time.
(b) Performance by the Subscriber. The Subscriber shall have
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performed, satisfied and complied in all respects with all
covenants, agreements and conditions required by this Agreement
to be performed, satisfied or complied with by the Subscriber at
or prior to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
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decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any stock exchange, interdealer
quotation system or other self-regulatory organization with
jurisdiction over the Company or its securities which prohibits
or adversely affects any of the transactions contemplated by this
Page 30 of 81 Pages
Agreement, nor shall any proceeding have been commenced which may
have the effect of prohibiting or adversely affecting any of the
transactions contemplated by this Agreement.
(d) Side Letter Agreement. The Company and the Subscriber shall have
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entered into a letter agreement in substantially the form
attached hereto as Exhibit C concerning block trade sales, short
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sale transactions and certain other matters.
1.4 Conditions Precedent to the Obligation of the Subscriber to Purchase
the Preferred Stock and Warrants. The obligation of the Subscriber
hereunder to purchase the Preferred Stock from the Company is subject
to the satisfaction, at or before the Closing, of each of the
conditions set forth below. These conditions are for the Subscriber's
sole benefit and may be waived by the Subscriber at any time in its
sole discretion.
(a) Accuracy of the Company's Representations and Warranties. The
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representations and warranties of the Company shall be true and
correct as of the date when made and as of the Closing Date as
though made at each such time.
(b) Performance by the Company. The Company shall have performed,
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satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement to be
performed, satisfied or complied with by the Company at or prior
to the Closing.
(c) No Injunction. No statute, rule, regulation, executive order,
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decree, ruling or injunction shall have been enacted, entered,
promulgated or endorsed by any court or governmental authority of
competent jurisdiction which prohibits or adversely affects any
of the transactions contemplated by this Agreement, nor shall any
proceeding have been commenced which may have the effect of
prohibiting or adversely affecting any of the transactions
contemplated by this Agreement.
(d) Adverse Changes. Since September 30, 1996, no event which had or
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is likely to have a Material Adverse Effect (as defined in
Section 3.5 below) on the Company has occurred.
(e) No Suspension of Trading in or Delisting of Common Stock. Trading
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in the Common Stock shall not have been suspended by the SEC or
Page 31 of 81 Pages
the Nasdaq National Market ("Nasdaq" or the "Exchange") and the
Common Stock shall not have been delisted from the Exchange.
(f) Legal Opinion. The Company shall have delivered to the Subscriber
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the opinion of Messrs. Klehr, Harrison, Xxxxxx, Xxxxxxxxx &
Xxxxxx, independent counsel to the Company, in substantially the
form attached hereto as Exhibit D.
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(g) Officer's Certificate. The Company shall have delivered to the
----------------------
Subscriber a certificate in form and substance reasonably
satisfactory to the Subscriber, executed by an executive officer
of the Company, to the effect that all the conditions to the
Closing shall have been satisfied as of the Closing Date.
(h) Filing of the Certificate of Designation. The Certificate of
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Designation, conforming to the terms of this Agreement, shall
have been duly filed with the Secretary of State of the State of
Delaware and a certified copy thereof shall have been delivered
to the Subscriber.
(i) Registration Rights Agreement. The Company and the Subscriber
-------------------------------
shall have entered into the Registration Rights Agreement in the
form attached as Exhibit B.
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2. Representations and Warranties of Subscriber
The Subscriber represents and warrants to the Company that:
2.1 No Government Recommendation or Approval. The Subscriber understands
-----------------------------------------
that no United States federal or state agency or similar agency of any
other country, has passed upon or made any recommendation or
endorsement of the Company or the offering of the Securities.
2.2 Intent. The Subscriber is purchasing the Securities for its own
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account and not with a view towards distribution in violation of
securities laws, and the Subscriber has no present arrangement
(whether or not legally binding) at any time to sell the Securities to
or through any person or entity; provided, however, that by making the
representations herein, the Subscriber does not agree to hold the
Securities for any minimum or other specific term and reserves the
right to dispose of the Securities at any time in accordance with
Page 32 of 81 Pages
federal and state securities laws applicable to such disposition. The
Subscriber has been advised of or is aware of the provisions of Rule
144 promulgated under the Securities Act.
2.3 Sophisticated Investor. The Subscriber is a sophisticated investor (as
----------------------
defined in Rule 506(b)(2)(ii) of Regulation D) and an accredited
investor (as defined in Rule 501 of Regulation D), and has such
experience in business and financial matters that it is capable of
evaluating the merits and risks of an investment in the Securities.
The Subscriber acknowledges that the Securities are speculative and
involve a high degree of risk. The Subscriber understands that there
is no established market for the Preferred Stock or the Warrants and
that no public market therefor is foreseen.
2.4 Independent Investigation. The Subscriber, in making its decision to
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purchase the Securities subscribed for hereunder, has relied upon an
independent investigation made by it and/or its representatives and
has not relied on any information or representations made by third
parties or on any oral or written representations or assurances from
the Company or any representative or agent of the Company, other than
as set forth in this Agreement, in the public filings of the Company
and in the documents described below. Prior to the date hereof, the
Subscriber has been furnished with and has reviewed the Company's
Annual Report on Form 10- K for the period ended December 31, 1995
(the "1995 Form 10-K") sent to the Company's shareholders and all
documents filed by the Company with the SEC since December 31, 1995,
pursuant to sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (excluding
preliminary proxy statement filings) (such documents are collectively
referred to in this Agreement as the "Exchange Act Reports"),
including, without limitation, the Company's Reports on Form 10-Q for
the periods ended March 31, 1996, June 30, 1996 and September 30,
1996, as filed with the SEC on May 10, 1996, August 14, 1996 and
November 14, 1996, respectively, and a copy of the Company's
Registration Statement on Form S-3 declared effective by the SEC on
September 30, 1996. The Subscriber has had a reasonable opportunity to
ask questions of and receive answers from the Company concerning the
Company and the offering of the Securities contemplated hereby.
2.5 Authority. This Agreement has been duly authorized and validly
executed and delivered by the Subscriber and is a valid and binding
agreement enforceable against the Subscriber in accordance with its
terms, subject to general principles of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.
Page 33 of 81 Pages
2.6 No Legal Advice From Company. The Subscriber acknowledges that it has
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had the opportunity to review this Agreement and the transactions
contemplated by this Agreement with its own legal counsel and tax
advisors. The Subscriber is relying solely on such counsel and
advisors and not on any statements or representations of the Company
or any of its representatives or agents for legal, tax or investment
advice with respect to this investment.
2.7 No Broker. The Subscriber has taken no action which would give rise to
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any claim by any person for brokerage commission, finder's fees or
similar payments by the Company relating to this Agreement or the
transactions contemplated hereby.
2.8 [Intentionally Omitted]
2.9 Reliance on Representations and Warranties. The Subscriber understands
------------------------------------------
that the Securities are being offered and sold to it in reliance on
specific provisions of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and
understandings of the Subscriber set forth in this Agreement in order
to determine the applicability of such provisions.
2.10 Transfer or Resale. The Subscriber understands that (i) except as
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provided in the Registration Rights Agreement, the Securities have not
been and are not being registered under the Securities Act or any
state securities laws, and may not be transferred unless (a)
subsequently registered thereunder or (b) the Subscriber shall have
delivered to the Company an opinion of counsel (which opinion and
counsel shall be reasonably acceptable to the Company) to the effect
that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration; (ii) any
sale of such Securities made in reliance on Rule 144 promulgated under
the Securities Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of
such Securities under circumstances in which the seller (or the person
through whom the sale is made) may be deemed to be an underwriter (as
that term is defined in the Securities Act) may require compliance
with some other exemption under the Securities Act or the rules and
regulations of the SEC thereunder; and (iii) neither the Company nor
any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder (in each
case, other than pursuant to the Registration Rights Agreement).
Page 34 of 81 Pages
2.11 Legends. The Subscriber understands that the Preferred Shares,
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Warrants and, until such time as the Underlying Stock has been
registered under the Securities Act, as contemplated by the
Registration Rights Agreement or otherwise may be sold by the
Subscriber pursuant to Rule 144 under the Securities Act (or any
successor rule thereto) without any restriction as to the number of
securities acquired hereunder that can then be immediately sold, the
certificates for the Underlying Stock, may bear a restrictive legend
in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for such Securities):
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended. The
securities have been acquired for investment and may not be sold,
transferred or assigned in the absence of an effective registration
statement for the securities under said Act, or an opinion of counsel,
in form, substance and scope reasonably acceptable to the Company,
that registration is not required under said Act."
The legend set forth above shall be removed and the Company shall
issue a certificate without such legend to the holder of any Security upon which
it is stamped, if, unless otherwise required by state securities laws, (a) the
sale of such Security is registered under the Securities Act or (b) such holder
provides the Company with an opinion of counsel, in form, substance and scope
reasonably acceptable to the Company, to the effect that a public sale or
transfer of such Security may be made without registration under the Securities
Act or (c) such holder provides the Company with reasonable assurances that such
Security can be sold pursuant to Rule 144 under the Securities Act (or a
successor rule thereto) without any restriction as to the number of Securities
acquired as of a particular date that can then be immediately sold. The
Subscriber agrees to sell all Securities, including those represented by a
certificate(s) from which the legend has been removed, in compliance with
applicable securities law. In the event the above legend is removed from any
Security, the Company may, upon reasonable advance notice to the Subscriber,
require that the above legend be placed on any Security that cannot then be sold
pursuant to an effective registration statement or Rule 144 under the Securities
Act (or any successor rule thereto) without any restriction as to the number of
securities acquired hereunder that can then be immediately sold.
3. Representations and Warranties of the Company
The Company represents and warrants to the Subscriber that:
Page 35 of 81 Pages
3.1 Company Status. The Company has registered its Common Stock pursuant
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to Section 12(b) or 12(g) of the Exchange Act, is in full compliance
with all reporting requirements of the Exchange Act, and the Company
has maintained all requirements for the continued listing of its
Common Stock, and such Common Stock is currently listed on the
Exchange, which Exchange is the principal market for the Company's
Common Stock.
3.2 Current Public Information. The Exchange Act Reports are the only
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filings made by the Company since December 31, 1995 pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act.
3.3 No General Solicitation in Regard to this Transaction. Neither the
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Company nor any of its affiliates nor any distributor or any person
acting on its or their behalf has conducted any general solicitation
(as that term is used in Regulation D) with respect to any of the
Securities, nor have they made any offers or sales of any security or
solicited any offers to buy any security under circumstances that
would require the registration of the Securities under the Securities
Act.
3.4 Capitalization; Valid Issuance of Preferred Stock and Common Stock.
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The Company has an authorized capitalization set forth on Schedule
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3.4. Except as set forth on Schedule 3.4, no shares of Preferred Stock
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or options, warrants or other securities convertible or exercisable
into Common Stock have been issued or are outstanding. The Company has
issued and outstanding that number of shares of Common Stock and
preferred stock of various series, as set forth on Schedule 3.4, and
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all such shares have been duly and validly authorized and issued, are
fully paid and non-assessable; prior to the Closing Date, the
authorized capitalization shall include the Securities; upon issuance
of the Securities, the Securities will be duly and validly issued,
fully paid and non-assessable; the Underlying Stock, when issued and
delivered in accordance with the terms of the Certificate of
Designation, will be duly and validly issued, fully paid and
non-assessable; and, except as set forth on Schedule 3.4 hereto, the
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holders of outstanding capital stock of the Company are not and shall
not be entitled to preemptive or other rights afforded by the Company
to subscribe for the Securities or the Underlying Stock. As of the
Closing Date, the Company shall have duly filed the Certificate of
Designation, and all of the rights, preferences and privileges of the
Preferred Stock shall be as set forth in the Certificate of
Designation, a copy of which, certified by the Secretary of State of
the State of Delaware, shall be delivered to the Subscriber on or
before the Closing Date.
Page 36 of 81 Pages
3.5 Organization and Qualification. The Company is a corporation duly
--------------------------------
incorporated and existing in good standing under the laws of the State
of Delaware and has the requisite corporate power to own its
properties and to carry on its business as now being conducted. The
Company does not have any subsidiaries, except as set forth on
Schedule 3.5. The Company is duly qualified to do business as a
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foreign corporation and is in good standing in every jurisdiction in
which the nature of the business conducted or property owned by it
makes such qualification necessary other than those in which the
failure so to qualify would not have a Material Adverse Effect.
"Material Adverse Effect" means any material adverse effect on the
business, operations, properties, prospects of the entity taken as a
whole, or the consolidated financial condition of the entity with
respect to which such term is used, or with respect to any other
entity controlled by such entity, and/or any condition or situation
which would prohibit or otherwise interfere with the ability of the
entity with respect to which said term is used to enter into or
perform its obligations under this Agreement, the Certificate of
Designation or the Registration Rights Agreement.
3.6 Authorization; Enforcement. (i) The Company has the requisite
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corporate power and authority to enter into and perform this Agreement
and the Registration Rights Agreement and to issue the Securities
subject to the limitations and conditions contained in and otherwise
in accordance with the terms hereof and of the Certificate of
Designation, the Warrants and the Side Letter, (ii) the execution and
delivery of this Agreement by the Company and the consummation by it
of the transactions contemplated hereby including, without limitation,
the issuance of the Underlying Stock (based on the conversion price in
effect on the date hereof), have been duly authorized by all necessary
corporate action, and no further consent or authorization of the
Company or its Board of Directors or stockholders is required, (iii)
this Agreement and the Registration Rights Agreement have been duly
executed and delivered by the Company, and (iv) this Agreement and the
Registration Rights Agreement constitute the valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except (x) as such enforceability may be
limited by applicable bankruptcy, insolvency, or similar laws relating
to, or affecting generally the enforcement of, creditors' rights and
remedies or by other equitable principles of general application and
(y) as rights to indemnity or contribution may be limited by federal
and state securities laws and public policy considerations.
3.7. Corporate Documents. The Company has furnished or made available to
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the Subscriber true and correct copies of the Company's Certificate of
Page 37 of 81 Pages
Incorporation as in effect on the date hereof (the "Certificate"), and
the Company's By-Laws, as in effect on the date hereof (the
"By-Laws").
3.8 No Conflicts. The execution, delivery and performance of this
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Agreement and the Registration Rights Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby
and thereby including, without limitation, the issuance of any of the
Securities or the Underlying Stock (based on the conversion price in
effect on the date hereof), do not and will not (i) result in a
violation of the Certificate or By-Laws or (ii) conflict with, or
constitute a default (or an event which, with notice or lapse of time
or both, would become a default) under, or give to others any rights
of termination, amendment, acceleration or cancellation of, any
agreement, indenture or instrument to which the Company or any of its
subsidiaries is a party, or result in a violation of any federal
state, local or foreign law, rule, regulation, order, judgment or
decree (including Federal and state securities laws and regulations)
applicable to the Company or any of its subsidiaries or by which any
property or asset of the Company or any of its subsidiaries is bound
or affected (except for such conflicts, defaults, terminations,
amendments, accelerations, cancellations and violations as would not,
individually or in the aggregate, have a Material Adverse Effect);
provided that, for purposes of such representation as to Federal,
state, local or foreign law, rule or regulation, no representation is
made herein with respect to any of the same applicable solely to the
Subscriber and not to the Company. The business of the Company is not
being conducted in violation of any law, ordinance or regulations of
any governmental entity, except for possible violations which either
singly or in the aggregate do not and will not have a Material Adverse
Effect. The Company is not required under Federal, state or local law,
rule or regulation in the United States to obtain any consent which
has not been obtained, or authorization or order of, or make any
filing or registration with, any court or governmental agency in order
for it to execute, deliver or perform any of its obligations under
this Agreement or issue and sell the Securities in accordance with the
terms hereof and thereof (other than any SEC, Nasdaq or state
securities filings in connection with this offering which may be
required to be made by the Company subsequent to the Closing, and any
registration statement which may be filed pursuant hereto); provided
that, for purposes of the representation made in this sentence, the
Company is assuming and relying upon the accuracy of the relevant
representations and agreements of the Subscriber and/or its principals
herein.
3.9 Exchange Act Reports. The Company has delivered or made available to
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the Subscriber true and complete copies of the Exchange Act Reports
Page 38 of 81 Pages
(including, without limitation, proxy information and solicitation
materials). As of their respective dates, the Exchange Act Reports
complied in all material respects with the requirements of the
Exchange Act and rules and regulations of the SEC promulgated
thereunder and other federal, state and local laws, rules and
regulations applicable to such Exchange Act Reports, and none of the
Exchange Art Reports contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the Exchange Act
Reports comply as to form in all material respects with applicable
accounting requirements and the published rules and regulations of the
SEC or other applicable rules and regulations with respect thereto.
Such financial statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
during the periods involved (except (i) as may be otherwise indicated
in such financial statements or the notes thereto or (ii) in the case
of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the Company
as of the dates thereof and the results of operations and cash flows
for the periods then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
3.10 No Material Adverse Change. Since September 30, 1996, the end of the
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period for which the most recent Quarterly Report of the Company on
Form 10-Q was filed with the SEC, a copy of which is included in the
Exchange Act Reports, no Material Adverse Effect has occurred or
exists with respect to the Company or its subsidiaries.
3.11 No Undisclosed Liabilities. The Company and its subsidiaries have no
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liabilities or obligations not disclosed in the Exchange Act Reports,
other than those incurred in the ordinary course of the Company's or
its subsidiaries' respective businesses since September 30, 1996 and
which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company and its subsidiaries taken as a
whole.
3.12 No Integrated Offering. Neither the Company, nor any of its
-------------------------
affiliates, nor any person acting on its or their behalf has, directly
or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that would require
registration of the Securities under the Securities Act.
Page 39 of 81 Pages
3.13 Broker. The Company has taken no action which would give rise to any
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claim by any person for brokerage commission, finder's fees or similar
payments by the Subscriber relating to this Agreement or the
transactions contemplated hereby.
3.14 Acknowledgment of Dilution. The number of shares of Underlying Stock
---------------------------
issuable upon conversion of the Series P Preferred Stock will increase
substantially in certain circumstances, including the circumstance
wherein the trading price of the Common Stock declines. The Company
acknowledges that its obligation to issue Underlying Stock upon
conversion of the Preferred Stock in accordance with the Certificate
of Designation is absolute and unconditional, regardless of the
dilution that such issuance may have on the ownership interests of
other stockholders, but is nevertheless subject to the terms and
conditions of general application imposed upon the Company by
governmental decrees and by the Exchange.
4. Covenants of the Company
4.1 Registration Rights. The Company shall, at the Closing, enter into a
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Registration Rights Agreement with the Subscriber in substantially the
form annexed hereto as Exhibit B.
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4.2 Reservation of Common Stock. The Company has reserved four million
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(4,000,000) shares of Common Stock and the Company shall continue to
reserve and keep available at all times, free of preemptive rights and
subject to such legal limits and rules of exchanges on which the
Common Stock may be traded, shares of Common Stock for the purpose of
enabling the Company to satisfy any obligation to issue shares of its
Common Stock upon conversion of the Series P Preferred Stock and
exercise of the outstanding Warrants; provided, however, that from and
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after the date of the Company's annual shareholders' meeting in
calendar year 1997, the number of shares so reserved shall at no time
be less two hundred percent (200%) of that number of shares of the
Company's Common Stock for which Preferred Stock and Warrants are then
convertible or exercisable, as equitably adjusted pursuant to any
stock splits, split ups, recapitalization or reorganization of shares
of Common Stock. The number of shares so reserved may be reduced by
the number of shares actually delivered pursuant to conversion of
Series P Preferred Stock; provided that in no event shall the number
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of shares so reserved be less than the maximum number required to
satisfy remaining conversion rights on the unconverted Series P
Preferred Stock.
4.3 Listing of Underlying Stock. The Company hereby agrees, promptly
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following the Closing of the transaction contemplated by this
Page 40 of 81 Pages
Agreement, to take such action to cause the Underlying Stock to be
listed on the Exchange as promptly as possible but no later than
ninety (90) days following the Closing. The Company further agrees
that, if the Company applies to have the Common Stock traded on any
principal stock exchange, it will include in such application the
Underlying Stock and will take such other action as is necessary or
desirable to cause the Underlying Stock to be listed on such exchange
as promptly as possible.
4.4 Exchange Act Registration. For so long as the Company is in existence
-------------------------
and Preferred Stock remains outstanding, the Company will cause its
Common Stock to continue to be registered under Section 12(g) or 12(b)
of the Exchange Act, will comply in all respects with its reporting
and filing obligations under said Act and will not take any action or
file any document (whether or not permitted by said Act or the rules
thereunder) to terminate or suspend such registration or to terminate
or suspend its reporting and filing obligations under said Act. The
Company will take all action necessary to continue the listing and
trading of its Common Stock on the Exchange and will comply in all
respects with the Company's reporting, filing and other obligations
under the by-laws or rules of the Exchange; provided, however, that
the Company may terminate such listing at any time so long as the
Company's Common Stock is then listed on either the American Stock
Exchange or the New York Stock Exchange.
4.5 Corporate Existence. The Company will take all steps necessary to
--------------------
preserve and continue the corporate existence of the Company;
provided, however, that this sentence shall not limit the Company's
ability to engage in any bona fide corporate transaction or
reorganization otherwise consistent with this Agreement.
5. [Intentionally Omitted]
6. Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York without regard to principles of
conflicts of law or choice of law, except for matters arising under
the Securities Act or the Exchange Act, which matters shall be
construed and interpreted in accordance with such Acts. The Company
hereby agrees that all actions or proceedings arising directly or
indirectly from or in connection with this Agreement shall, at the
Subscriber's sole option, be litigated only in the Supreme Court of
the State of New York or the United States District Court for the
Southern District of New York located in New York County, New York.
Page 41 of 81 Pages
The Company consents to the jurisdiction and venue of the foregoing
courts and consents that any process or notice of motion or other
application to either of said courts or a judge thereof may be served
inside or outside the State of New York or the Southern District of
New York by registered mail, return receipt requested, directed to the
Company at its address set forth in this Agreement (and service so
made shall be deemed complete five (5) days after the same has been
posted as aforesaid) or by personal service or in such other manner as
may be permissible under the rules of said court.
7. Assignment; Entire Agreement; Amendment
(a) Neither this Agreement nor any obligations of the Company
hereunder may be assigned by the Company to any other person or
entity. The provisions of this Agreement shall inure to the
benefit of, and be enforceable by, any transferee of any of the
Securities with respect to the Securities held by such person.
(b) This Agreement, the Warrants, the Certificate of Designation, the
Registration Rights Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof
and thereof, and supersedes all prior agreements (including,
without limitation, that certain letter agreement dated December
31, 1996 between the Company and S-C Rig Investments-III, L.P.,
Winston Partners II LLC and Winston Partners II LDC),
understandings and negotiations, both written and oral, between
the parties with respect to the subject matter of this Agreement.
No party shall be liable or bound to any other party in any
manner by any warranties, representations or covenants except as
specifically set forth in this Agreement or therein. Except as
expressly provided in this Agreement, neither this Agreement nor
any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or
termination is sought.
8. Publicity
The Company agrees that it will not disclose, and will not include in
any public announcement, the name of the Subscriber without its
consent, unless and until such disclosure is required by law or
applicable regulation, and then only to the extent of such
requirement.
Page 42 of 81 Pages
9. Notices, Etc.; Expenses; Indemnity
(a) Any notice, demand or request required or permitted to be given
by either the Company or the Subscriber pursuant to the terms of
this Agreement shall be in writing and shall be deemed given when
delivered personally or by facsimile, with a hard copy to follow
by two day courier addressed to the parties at the addresses of
the parties set forth at the end of this Agreement or such other
address as a party may request by notifying the other in writing.
Copies of all notices to the Subscriber shall be sent to its
designee or representative.
(b) Each party shall indemnify the other against any loss, cost or
damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty,
covenant or agreement in this Agreement.
10. Counterparts
This Agreement may be executed in any number of counterparts each of
which shall be enforceable against the parties actually executing such
counterparts, and all of which together shall constitute one
instrument.
11. Survival; Severability; Specific Performance
The representations, warranties, covenants and agreements of the
parties hereto shall survive the Closing for a period of four (4)
years (except for the covenants contained in Sections 4.2, 4.3, 4.4
and 4.5 which shall survive indefinitely). In the event that any
provision of this Agreement becomes or is declared by a court of
competent jurisdiction to be illegal, unenforceable or void, this
Agreement shall continue in full force and effect without said
provision. Notwithstanding anything in this Agreement, the Warrants,
the Registration Rights Agreement or the Certificate of Designation to
the contrary, nothing shall limit the Subscriber's right to pursue any
and all available remedies, whether at law or at equity (including,
without limitation, specific performance), in connection therewith.
12. Title and Subtitles
The titles and subtitles used in this Agreement are used for
convenience only and are not to be considered in construing or
interpreting this Agreement.
Page 43 of 81 Pages
13. Amount; Delivery
The undersigned hereby subscribes for ___________ shares of Preferred
Stock and Warrants to purchase _________shares of Common Stock pays
herewith funds in the amount of ______________________.
The Company hereby delivers to the undersigned the Preferred Stock
purchased by the Subscriber, together with such Warrants, if any,
which the undersigned is acquiring upon initial issuance of the
Preferred Stock.
Page 44 of 81 Pages
Name of Subscriber:
By:
---------------------------------------
Name:
Title:
Date of Subscription: January 23, 1997
----------------
Place of Execution: New York, New York
------------------
Place of Organization or Citizenship:
--------------------------------------------
Place of Residency and/or Principal
Place of Business:
(Telephone):
-------------------------------
(Fax):
-------------------------------------
Registration Instructions:
-----------------
(Name)(Please Print):
----------------------
Page 45 of 81 Pages
THIS SUBSCRIPTION IS ACCEPTED BY THE COMPANY ON THE 23rd DAY OF JANUARY, 1997.
GEOTEK COMMUNICATIONS, INC.
By:
---------------------------------------
--------------------------------------------
Name:
Title:
