1
EXHIBIT IV
[EXECUTION COPY]
VENDOR CREDIT FINANCING AGREEMENT
dated as of September 27, 1996
between
GEOTEK FINANCING CORPORATION, AS BORROWER,
GEOTEK COMMUNICATIONS, INC., AS GUARANTOR,
and
XXXXXX NETWORK SYSTEMS, INC., AS LENDER
2
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE ADVANCES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.1. The Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.2. Procedure for Making Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.3. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.4. [Intentionally Omitted] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.5. Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2.6. Interest on Overdue Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.7. Interest Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.8. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.9. Schedules to Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.10. Optional Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
2.11. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE III CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.1. Conditions to Initial Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.2. Conditions to Each Advance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3. Changes and Cancellations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IV REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.1. Corporate Existence and Standing . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
4.2. Authorization and Validity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.3. Compliance with Laws and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.4. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.5. Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.7. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.9. Accuracy and Completeness of Information . . . . . . . . . . . . . . . . . . . . . . . 23
4.10. Material Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.11. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4.12. Subordinated Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.13. Licenses and Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE V COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.1. Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.2. Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.3. Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
i
3
Page
----
5.4. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.5. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.6. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.7. Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.8. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.9. Restricted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.10. Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.11. Corporate Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.12. Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
5.13. Sale and Leaseback . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.14. Investments and Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.15. Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.16. Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.17. Asset Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.18. Rentals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.19. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.20. Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.21. Preservation of Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.22. Ownership of Borrower and Holdings . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.23. Compliance with other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.24. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
5.25. Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI GUARANTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.2. Guaranty Unconditional . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.3. Discharge Only Upon Payment In Full; Reinstatement In Certain Circumstances . . . . . 31
6.4. Waivers by the Guarantor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.5. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
6.6. Stay of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII DEFAULTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VIII ACCELERATION, REMEDIES, WAIVERS AND AMENDMENTS . . . . . . . . . . . . . . . . . . . . 35
8.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
8.2. Preservation of Rights; Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 35
ARTICLE IX GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.2. Survival of Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
9.3. Governmental Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ii
4
Page
----
9.4. New York Law; Submission to Jurisdiction; Waiver of Jury Trial; Service of Process . . 38
9.5. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.6. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.7. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.8. Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.9. Severability of Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
9.10. Confidentiality; Public Disclosures . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.11. Risk of Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.12. Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.13. Registration Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE X NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10.2. Change of Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE XI COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
iii
5
VENDOR CREDIT FINANCING AGREEMENT
THIS VENDOR CREDIT FINANCING AGREEMENT (this "Agreement") is
made as of the 27th day of September 1996, 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
("HNS" and, together with its successors and assigns, referred to collectively
as the "Lenders").
WHEREAS, the Borrower, HNS and the Guarantor have entered into
a Manufacturing Agreement of even date herewith (the "Manufacturing Agreement")
pursuant to which, among other things, HNS will manufacture and sell to the
Borrower certain FHMA base station equipment more fully described in Exhibit C
to the Manufacturing Agreement and any other base station equipment
manufactured by HNS pursuant to the Manufacturing Agreement (whether operating
in the 900 MHz range or otherwise) (collectively, "Base Station Equipment");
WHEREAS, the Borrower and Geotek desire that the Lenders
provide certain financing for the purchase by the Borrower from HNS of Base
Station Equipment; and
WHEREAS, the Lenders are willing to provide certain financing
to the Borrower for the purchase of Base Station Equipment on the terms and
conditions set forth herein.
NOW THEREFORE, the Borrower, Geotek and the Lenders hereby
agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Advance Cutoff Date" means June 30, 1999.
"Advance Date" means the Initial Advance Date and each
Subsequent Advance Date.
"Advance Period" means the period from and including the
Initial Advance Date through and including the Advance Cutoff Date.
"Advances" means the extensions of credit for the account of
the Borrower made by the Lenders pursuant to Article II and "Advance" means any
one of them.
6
"Affiliate" of a Person means any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with such Person. A Person shall be deemed to control another Person
if the controlling Person owns 10% or more (50% or more for purposes of Section
9.1(b) only) 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.
"Base Station Equipment" has the meaning given in the recitals
hereof.
"Base Station Equipment Invoice" has the meaning given in
Section 2.2.
"Base Station Equipment Purchase Order" has the meaning given
in Section 3.2.
"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.
"Change of Control" has the meaning given in the 1995
Indenture as in effect on the date hereof.
"Change of Control Date" has the meaning given in Section
2.5(b).
"Change of Control Offer" has the meaning given in Section
2.5(b).
"Change of Control Repayment Date" has the meaning given in
Section 2.5(b).
2
7
"Collateral" means any and all assets and rights and interests
in or to property of the Borrower pledged from time to time as security for the
Obligations, whether pursuant to the Security Agreement, the Pledge Agreement,
any other Collateral Document or otherwise.
"Collateral Agent" means HNS, in its capacity as collateral
agent for the Lenders, and any successor to HNS.
"Collateral Documents" means the Pledge Agreement, the
Security Agreement and any other document or instrument granting or purporting
to xxxxx x Xxxx on any property of the Borrower (or others) as security for the
Obligations.
"Commitment" of any Lender means the maximum face amount set
forth on the Note issued to such Lender hereunder.
"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.
"Consolidated Entity" means Geotek and each of its
Subsidiaries which would be consolidated with Geotek for purposes of financial
reporting.
"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.
"Costs" has the meaning given in Section 9.7.
"Default" means an event described in Article VII.
"Disclosure Letter" means the letter delivered by the Obligors
to the Lenders pursuant to Article IV hereof, which letter describes, on a
Section-by-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.
"Dollars" or "$" means lawful currency of the United States of
America.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
3
8
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Excess Interest" has the meaning given in Section 2.7.
"Facility Documents" means the Financing Documents, the
Warrants, the Manufacturing Agreement, the Sales Representation Agreement and
the Registration Rights Agreement.
"Federal Bankruptcy Code" means Xxxxx 00, Xxxxxx Xxxxxx Code,
as amended from time to time.
"FCC" means the United States 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.
"Financing Documents" means this Agreement, the Notes, the
Pledge Agreement, the Security Agreement and the other Collateral Documents (if
any).
"GAAP" means generally accepted accounting principles.
"Guaranteed Obligations" has the meaning given in Section 6.1.
"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.
"Holdings" means Geotek License Holdings, Inc., a Delaware
corporation and a wholly-owned subsidiary of the Borrower.
"Holdings Note" has the meaning given in the Loan Agreement.
"Xxxxxx 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 through one or more intermediaries, by
Xxxxxx Electronics Corporation.
"Indebtedness" of a Person means such Person's (i) obligations
for borrowed money, (ii) obligations representing the deferred purchase price
of property (other than
4
9
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.
"Indemnified Parties" has the meaning given in Section 9.7.
"Initial Advance" means the Advance to be made to the Borrower
on the Initial Advance Date.
"Initial Advance Date" means the Business Day on which the
Lenders make the first Advance to the Borrower hereunder, which date shall not
be prior to the date of first delivery of Base Station Equipment from HNS to
the Borrower pursuant to the Manufacturing Agreement.
"Initial Order Date" means the date on which the Borrower
submits to HNS its first Base Station Equipment Purchase Order pursuant to the
Manufacturing Agreement for the manufacture and delivery of Base Station
Equipment to be financed with an Advance pursuant to this Agreement.
"Interest Payment Date" means June 15 and December 15 of each
year until the Maturity 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.
"Landlord Waiver Location" has the meaning given in Section
3.2(iii)(c).
"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.
5
10
"Loan Agreement" means the Loan Agreement, dated as of
December 21, 1995, among HNS, the Borrower and Geotek, as such agreement may be
amended or otherwise modified from time to time.
"Loss" has the meaning given in Section 9.11.
"Majority Lenders" means, at any time, those Lenders owed or
holding more than fifty percent (50%) of the aggregate outstanding principal
amount of the Notes.
"Manufacturing Agreement" has the meaning given in the
recitals hereof.
"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 Financing Document or of the Collateral Agent or the Lenders to
enforce or collect any of the Obligations.
"Maturity Date" means December 1, 2003.
"Maximum Advance Amount" means $100,000,000 (which shall
include any and all interest added to principal pursuant to Section 2.3).
"Maximum Rate" has the meaning given in Section 2.7.
"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.
"1995 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.
"1996 Indenture" means that certain Indenture, dated as of
March 5, 1996, between Geotek, as Issuer, and The Bank of New York, as Trustee,
relating to Geotek's 12% Senior Subordinated Convertible Notes due 2001.
"Nonconforming Base Station Equipment" has the meaning given in
Section 3.3.
"Note" means any promissory note in substantially the form of
Exhibit A hereto, duly executed and delivered to any Lender by the Borrower
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from the Advances made by such
6
11
Lender or acquired by such Lender pursuant to Section 9.1 hereof, as the same
may be amended or otherwise modified or replaced from time to time, and "Notes"
means all of them.
"Obligations" means all unpaid principal of and accrued and
unpaid interest on the Notes, all accrued and unpaid fees and expenses and all
other obligations (monetary and other) of the Obligors to the Lenders and the
Collateral Agent arising under the Financing Documents.
"Obligors" means, collectively, the Borrower and Geotek, and
their respective successors and assigns, and "Obligor" means either of the
foregoing.
"Order Date" means each date on which the Borrower submits to
HNS a Base Station Equipment Purchase Order pursuant to the Manufacturing
Agreement for the manufacture and delivery of Base Station Equipment to be
financed with an Advance or Advances pursuant to this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
"Perfection Costs" has the meaning given in Section 9.7.
"Permitted Liens" means the following types of Liens:
(a) Liens for taxes, assessments or governmental charges or
claims either (i) not delinquent or (ii) being 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;
(c) statutory Liens of landlords and other Liens imposed by
law and Liens of carriers, warehousemen, mechanics, suppliers,
materialmen and repairmen incurred in the ordinary course of business
for sums not yet delinquent or being contested in good faith, if a
reserve or other appropriate provision, if any, as shall be required
by GAAP shall have been made in respect thereof;
(d) Liens in favor of customs and revenue authorities which
arise as a matter of law to secure payment of customs duties in
connection with the importation of Base Station Equipment (or
components thereof), which payments either are not yet delinquent or
are being contested in good faith, if a reserve or other appropriate
7
12
provision, if any, as shall be required by GAAP shall have been made in respect
thereof; and
(e) Liens created under the Security Agreement, the Pledge
Agreement and any other Collateral Document.
"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 an Amended and Restated Pledge
Agreement, dated as of the date hereof, between the Borrower and the Collateral
Agent, in substantially the form attached hereto as Exhibit B, as such
agreement may be amended or otherwise modified from time to time.
"PST means PowerSpectrum Technology Ltd.
"Prepayment Moratorium Period" has the meaning given in
Section 9.1(c).
"Prepayment Notice Period" has the meaning given in Section
9.1(c).
"Proportionate Share" means, with respect to any Lender, a
fraction (expressed as a percentage), the numerator of which shall be the
amount of such Lender's Commitment and the denominator of which shall be the
Maximum Advance Amount.
"Reacquired Base Station Equipment" has the meaning given in
Section 5.12(c).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, among the Borrower, the Guarantor and
HNS, in substantially the form attached hereto as Exhibit F, as such agreement
may be amended or otherwise modified from time to time.
"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.
"Repayment Amount" has the meaning given in Section 2.5(b).
"Replacement Communications Equipment" has the meaning given
in Section 5.12(c).
8
13
"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.
"Sales Representation Agreement" means the Sales
Representation Agreement of even date herewith between Geotek and HNS.
"S-C Rig Loan Agreement" means that certain Senior Loan
Agreement, dated April 4, 1996, between Geotek, as borrower, and S-C Rig
Investments-III, L.P., as lender.
"SEC" means the United States Securities and Exchange
Commission or any other regulatory body which succeeds to the functions of the
Securities and Exchange Commission.
"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.
"Security Agreement" means a Security Agreement, dated as of
the date hereof, between the Borrower and the Collateral Agent, in
substantially the form attached hereto as Exhibit C, as such agreement may be
amended or otherwise modified 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 Advance Date" means any date on which any Lender
makes an Advance to the Borrower hereunder, other than the Initial Advance
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.
"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.
9
14
"Unmatured Default" means an event which, but for the lapse of
time or the giving of notice, or both, would constitute a Default.
"Warrants" means the Warrants issued by Geotek to HNS in
connection herewith for the purchase of the Common Stock of Geotek, in
substantially the forms attached hereto as Exhibit D, as amended or otherwise
modified from time to time.
"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.
The foregoing definitions shall be equally applicable to both
the singular and plural forms of the defined terms.
ARTICLE II
THE ADVANCES
2.1. The Advances. Subject to the terms and conditions
set forth herein, commencing on the Initial Advance Date, each Lender severally
agrees to make Advances to the Borrower from time to time on any Business Day
during the Advance Period in an aggregate principal amount not to exceed its
Proportionate Share. The Advances shall be evidenced by the Notes and secured
by the Collateral.
2.2. Procedure for Making Advances. (a) Subject to
Article III, and except as provided in Section 2.2(b), each Advance shall be
deemed to have been made to the Borrower on the date on which HNS issues to the
Borrower (with a copy to the Lenders) an invoice (the "Base Station Equipment
Invoice") for Base Station Equipment which has been delivered to the Borrower
pursuant to the Manufacturing Agreement and shall be deemed to be in an amount
equal to the lesser of such Lender's Proportionate Share of (i) the "Balance
Due" on such invoice and (ii) ninety percent (90%) of the total purchase price
of the Base Station Equipment covered by such Base Station Equipment Invoice,
in each case exclusive of all sales, use or similar taxes, broker's fees and
shipping charges, if any. The amount of any Advance hereunder with respect to
any Base Station Equipment Invoice issued by HNS to the Borrower shall be
binding on the Borrower unless the Borrower disputes in writing the amount of
such invoice within 10 Business Days of receipt thereof; provided that the
Lenders' obligation to make any additional Advances hereunder shall be
suspended during the pendency of any dispute regarding the amount of any
Advance hereunder with respect to any Base Station Equipment Invoice. The
immediately preceding sentence is intended to ensure that the amount of any
Advances made hereunder are not subject to dispute and nothing herein shall
preclude the Borrower from making any claims against HNS under the
Manufacturing Agreement with respect to any invoice or any Base Station
Equipment covered thereby.
10
15
(b) Notwithstanding the foregoing, if on the Advance
Cutoff Date any Base Station Equipment ordered pursuant to the Manufacturing
Agreement and originally scheduled for delivery on or before the Advance Cutoff
Date has not yet been delivered to the Borrower (and no Advance for the
purchase price therefor has been made hereunder), the Lenders may (or shall, at
the request of the Borrower), subject to the dollar and percentage limitations
in Sections 2.1 and 2.2(a), make Advances on the Advance Cutoff Date with
respect to all or part of such Base Station Equipment as if such Base Station
Equipment had been delivered to the Borrower (and a Base Station Equipment
Invoice had been issued therefore) on the Advance Cutoff Date. The making of
Advances by the Lenders under this Section 2.2(b) shall not be deemed to be a
waiver by the Lenders of the conditions precedent to such Advances set forth in
Section 3.2, which conditions must be satisfied by the Borrower as if such
Advance were to be made on the delivery date set forth in the applicable Base
Station Equipment Purchase Order or HNS may refuse to deliver the Base Station
Equipment with respect to which such Advances were made until all such
conditions precedent are satisfied. In the event such conditions are not
satisfied on the delivery date for such Base Station Equipment, the Borrower
may purchase any such Base Station Equipment to which such failed conditions
relate by prepaying all or such portion of the Advances (together with accrued
interest thereon) as are attributable to such Base Station Equipment, and as
soon as practicable after such prepayment, HNS shall deliver to the Borrower
all of the Base Station Equipment it so refused to deliver under this Section
2.2(b).
(c) Immediately upon its making, HNS shall credit the
amount of any Advance against the amounts due under the applicable Base Station
Equipment Invoice, with the Borrower responsible for any remaining balance.
There shall be no cash disbursements of any Advances made pursuant to this
Agreement.
(d) Each Advance is subject to the fulfillment of the
conditions precedent set forth in Article III. Notwithstanding the immediately
preceding sentence (and except as provided in Section 2.2(b)), (i) each Lender
may (but is not obligated to), in the exercise of its sole discretion, make an
Advance despite the failure of the Borrower to fulfill all such conditions
precedent or (ii) with respect to the Borrower's failure to fulfill only the
condition precedent set forth in Section 3.2(vi), upon the request of the
Borrower each Lender shall make the applicable Advance despite the failure of
the Borrower to fulfill such condition precedent; provided that, in each case,
HNS shall retain possession of the Base Station Equipment to which such Advance
relates until such time as the Collateral Agent is satisfied that the Borrower
has fulfilled all such conditions precedent with respect to such Advance (other
than by virtue of HNS's possession of such Base Station Equipment). In the
event the Lenders so make an Advance pursuant to clause (ii) hereof and the
Borrower has not been able to satisfy the conditions precedent to such Advance
for a period of ten (10) days after the date of such Advance, the Borrower may,
no later than June 30, 1999, purchase all of the Base Station Equipment to
which such failed conditions relate by prepaying all or such portion of the
Advances (together with accrued interest thereon) as are attributable to such
Base Station Equipment, and as soon as practicable after such prepayment, HNS
shall deliver to the Borrower all of the Base Station Equipment being so
purchased. Any warehousing or other related costs, as well as the risk of
loss, with respect to such Base Station Equipment retained by HNS shall be
borne by the Borrower and the
11
16
Borrower shall indemnify HNS and the Lenders from and against any other loss,
cost or expense resulting therefrom.
(e) For the avoidance of doubt, unless otherwise
agreed in writing by the Lenders and the Borrower, no amounts other than the
actual purchase price of Base Station Equipment (as set forth in Exhibit E to
the Manufacturing Agreement), as adjusted from time to time pursuant to the
Manufacturing Agreement, will be financed by the Lenders hereunder (subject at
all times to the terms and conditions of this Agreement).
2.3. Interest. (a) Interest shall accrue on the unpaid
principal amount of each Advance at a fixed rate per annum equal to eleven
percent (11%) from the date of such Advance until the Maturity Date, and,
subject to Section 2.3(b), shall be payable in cash semi- annually in arrears
on (a) each Interest Payment Date occurring after the Initial Advance Date, and
(b) on the Maturity Date (or such earlier date as the aggregate outstanding
principal amount of the Advances is repaid in full pursuant to this Agreement).
All interest shall be computed for actual days elapsed on the basis of a year
consisting of 365 days (or 366 days, as appropriate). In computing interest on
any Advance, the Advance Date of such Advance shall be included and the date of
payment shall be excluded so long as such payment is received by the applicable
Lender at or before 12:00 p.m. (New York time) on the date when due.
(b) Notwithstanding the provisions of Section 2.3(a),
so long as no Default has occurred and is continuing, interest payable on any
Advance on any Interest Payment Date prior to June 30, 1999, shall not be
payable in cash on such Interest Payment Date and shall, on such Interest
Payment Date, be added to the outstanding principal balance of the Advances and
shall be payable as principal pursuant to Section 2.5.
2.4. [Intentionally Omitted].
2.5. Repayment. (a) Except as set forth in subsection (b)
hereof or in Sections 2.2(b), 2.2(d), 5.12 or 9.11, the Borrower shall repay
the aggregate principal amount of the Advances in ten equal installments, with
the first two installments being due on July 10, 1999, and December 15, 1999,
respectively, and the remaining installments being due on the expiration of
each six (6) month period after December 15, 1999 (i.e., June 15, 2000,
December 15, 2000, etc.). Once repaid, any amount of principal repaid may not
be reborrowed.
(b) (i) Upon the occurrence of a Change of Control
(the date of such occurrence, the "Change of Control Date"), the Borrower will
notify the Lenders in writing of such occurrence and shall make an offer to
repay (the "Change of Control Offer"), and shall repay, on a Business Day (the
"Change of Control Repayment Date") not more than 60 days following the Change
of Control Date (and in no event later than the date on which any other
Indebtedness of Geotek or its Subsidiaries is repaid as a result of such Change
of Control) up to the entire principal amount of all Notes then outstanding,
plus accrued and unpaid interest (and all other Obligations due hereunder and
under the other Financing Documents), if any, to the Change of Control
Repayment Date.
12
17
(ii) Notice of a Change of Control Offer shall be
mailed by the Borrower not later than the 30th day after the Change of Control
Date to the Lenders at their addresses for notices provided herein, with a copy
to the Collateral Agent. The Change of Control Offer shall remain open from
the time of mailing for at least 20 Business Days and until 5;00 p.m., New York
City time, on the Change of Control Repayment Date. The notice, which shall
govern the terms of the Change of Control Offer, shall state:
(1) that the Change of Control Offer is being
made pursuant to this Section 2.5(b) and that all Notes
validly tendered into the Change of Control Offer and not
withdrawn will be accepted for payment;
(2) the Change of Control Repayment Date and the
date on which the Change of Control Offer expires;
(3) that any Note (or portion thereof) not repaid
will continue to accrue interest in accordance with the terms
thereof;
(4) that, unless the Borrower shall default in
the payment of the Repayment Amount, any Note accepted for
payment pursuant to the Change of Control Offer shall cease to
accrue interest after the Change of Control Repayment Date;
(5) that Lenders electing to have Notes (or any
portion thereof) repaid must notify the Borrower no later than
5:00 p.m., New York City time, on the fifth Business Day
immediately preceding the Change of Control Repayment Date of
the principal amount of their respective Notes to be repaid,
as well as the amount of accrued but unpaid interest (and
other Obligations) allocable thereto.
(6) that Lenders electing to have Notes repaid
pursuant to a Change of Control Offer will be required to
return their Notes to the Borrower on the second Business Day
immediately following the date on which such Lender receives
full payment for its Note (including accrued and unpaid
interest) and its Proportionate Share of all other Obligations
due hereunder and under the other Financing Documents
(collectively, the "Repayment Amount") in immediately
available funds;
(7) that Lenders will be entitled to withdraw
their election if the Borrower receives, not later than 5:00
p.m., New York City time, on the third Business Day
immediately preceding the Change of Control Repayment Date, a
telex, facsimile transmission or letter setting forth the name
of the Lender and a statement that such Lender is withdrawing
its election to have its Note repaid to the extent set forth
in such letter; and
(8) information concerning the business of
Geotek, the most recent annual and quarterly reports of Geotek
filed with the SEC pursuant to the
13
18
Exchange Act (or, if the Company is not then permitted to file any
such reports with the SEC, the comparable reports prepared pursuant to
Section 4.07 of the 0000 Xxxxxxxxx), a description of material
developments in Geotek's business, information with respect to pro
forma historical financial information after giving effect to such
Change of Control and such other information concerning the
circumstances and relevant facts regarding such Change of Control
Offer as would be material to a Lender in connection with the decision
of such Lender as to whether or not it should accept the Change of
Control Offer.
(iii) On the Change of Control Repayment Date, the
Company shall repay to each Lender electing such repayment such Lender's
Repayment Amount in immediately available funds to the account specified for
payments to such Lender as provided herein.
2.6. Interest on Overdue Amounts. In the event that any
principal amount of any Advance or any interest, fees or other amounts payable
hereunder is not paid when due as provided herein (after accounting for any
applicable grace periods), the Borrower shall pay late payment interest on such
unpaid amount from the date such amount is due until the date such amount is
paid in full, payable on demand, at an interest rate per annum equal to sixteen
percent (16%).
2.7. Interest Laws. Notwithstanding any provision to the
contrary contained in this Agreement or the other Facility Documents, the
Borrower shall not be required to pay, and the Lenders shall not be permitted
to collect, any amount of interest in excess of the maximum amount of interest
permitted by applicable 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 Facility 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 any Lender may have received hereunder shall be, at such
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
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 Facility 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 such 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 Lenders
shall have received the amount of interest which the Lenders would have
received during such period on such Obligations had the rate of interest not
been limited to the Maximum Rate during such period.
14
19
2.8. Method of Payment. All payments of principal,
interest, expenses and other amounts hereunder shall be made by wire transfer
in immediately available funds to the Lenders 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.) (or, with respect to payments to be
made to any Lender other than HNS, such other account as such Lender may notify
the Borrower in writing at least three (3) Business Days prior to the scheduled
date for any such payment) by noon (New York time) on the date when due. If
any payment of principal of or interest on the Advances 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. Unless otherwise provided herein or in the other Financing Documents,
any payment of any principal or interest on the Notes, or of any of the other
Obligations, shall be allocated among the Lenders pro rata based upon their
respective Proportionate Shares.
2.9. Schedules to Notes. The Borrower hereby authorizes
each Lender to endorse on the Schedule annexed to its Note the principal amount
of all Advances made by such Lender to the Borrower as well as all additions to
principal pursuant to Section 2.3(b) and all payments and prepayments of
principal made pursuant to the terms 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.
2.10. Optional Prepayment. With respect only to those
Notes held by HNS or any of its Affiliates at the time of receiving the notice
of prepayment provided for in this Section 2.10 (or those Notes held by any
other Person at the time of receiving any such notice of prepayment prior to
the Advance Cutoff Date), the Borrower may, upon at least thirty (30) Business
Days' prior written notice to HNS or such Affiliate (or such other Person), as
applicable, stating the proposed date and aggregate principal amount of the
prepayment, and if such notice is given the Borrower shall, prepay the
outstanding aggregate principal on such Note, in whole or in part, together
with accrued interest to the date of such prepayment on the principal amount
prepaid; provided that (i) each partial prepayment shall be in an aggregate
principal amount not less than $10,000,000 (or such lesser amount as is then
outstanding) and shall be applied to principal installments in the inverse
order of their maturities; provided, further, that this shall not limit or
affect the rights of the Lender under Article VIII. Once prepaid, any amount
of principal prepaid may not be reborrowed. For the avoidance of doubt, except
as provided in Sections 2.2.(b), 2.2(d), 5.12 or 9.11, on and after July 1,
1999, any Note held by a Person other than HNS or its Affiliates which was
transferred to such Person in accordance with the terms hereof may not be
prepaid, in whole or in part, without the prior written consent of such Person,
unless such Note was transferred to such Person by HNS or its Affiliate
subsequent to receipt of the notice of prepayment provided for in this Section
2.10. Notwithstanding the foregoing, the Borrower shall have no right to
prepay any Note during any Prepayment Moratorium Period.
2.11. Obligations Absolute. (a) The Borrower's obligation
to pay all principal and interest on the Notes and all fees and expenses
hereunder and under the other
15
20
Financing Documents, and to perform all other obligations hereunder and
thereunder are absolute and unconditional and shall not be affected or reduced
by any circumstances, including, without limitation:
(i) any set-off, counterclaim, recoupment, defense, or
other right which the Borrower, Geotek or any of
their respective Affiliates may have against HNS, any
other Lender, the Collateral Agent or any other
Person for any reason whatsoever (whether in
connection with the transactions contemplated hereby
or by the other Facility Documents or otherwise),
including, without limitation, any breach by HNS of
any of its obligations under any of the Facility
Documents or the Loan Agreement;
(ii) any defect in the title, condition, design,
operation, or fitness for use of, or any damage to or
loss or destruction of, any of the Base Station
Equipment, any interruption or cessation in the use
of or possession thereof by, or the availability
thereof to the Borrower, its Affiliates or any other
Person for any reason whatsoever, whether arising out
of or related to an act or omission of any Lender or
any other Person;
(iii) the invalidity or unenforceability or lack of due
authorization or other infirmity of this Agreement or
any absence of right, power or authority of HNS, the
Borrower or Geotek or any other party to enter into
this Agreement or any of the other Facility
Documents, as the case may be;
(iv) any insolvency, bankruptcy, reorganization, or
similar proceedings by or against HNS, any other
Lender, the Collateral Agent, the Borrower, Geotek or
any other Person;
(v) any other circumstance or happening of any nature
whatsoever, whether or not similar to any of the
foregoing, it being the express intention of the
Lender, the Borrower and Geotek that all Obligations
payable hereunder shall be payable in all events.
(b) Nothing in this Agreement shall operate to excuse or
diminish the Borrower's obligation to pay HNS the full purchase price of any
Base Station Equipment ordered from HNS pursuant to the Manufacturing
Agreement.
ARTICLE III
CONDITIONS PRECEDENT
3.1. Conditions to Initial Advance. The Obligation of the
Lenders to make the Initial Advance hereunder is subject to the satisfaction of
the following conditions precedent:
16
21
(i) (a) On the date of execution of this Agreement, HNS shall
have received from the Borrower:
(1) an original of this Agreement (including all
Exhibits, Schedules and Annexes hereto), the Disclosure Letter, the
Security Agreement, the Pledge Agreement, the Warrants, the
Manufacturing Agreement, the Sales Representation Agreement and the
Registration Rights Agreement, duly-executed by each party hereto and
thereto, and all conditions precedent to the effectiveness of each
such document shall have been satisfied or waived in writing by the
Lenders;
(2) an incumbency certificate of each Obligor,
executed by the Secretary or an Assistant Secretary thereof, which
shall identify by name and title and bear the signature of the
officers of such Obligor authorized to sign the Facility Documents and
(in the case of the Borrower) to submit Base Station Equipment
Purchase Orders hereunder, upon which certificate the Lenders shall be
entitled to rely until informed of any change in writing by such
Obligor;
(3) (A) a copy of the Certificate of Incorporation of
each of the Obligors, together with all amendments thereto, certified
by the appropriate governmental officer in its jurisdiction of
incorporation and (B) 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;
(4) a copy of the By-Laws of each of the Obligors,
together with all amendments thereto, certified by the Secretary or an
Assistant Secretary of such Obligor;
(5) a copy, certified by the Secretary or an
Assistant Secretary of such Obligor, as applicable, of each Obligors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for the Lenders) authorizing the execution,
delivery and performance of the Facility Documents to be executed by
it and the transactions contemplated thereby; and
(6) a notice complying with the requirements set
forth in Section 3.2(i) of the Loan Agreement irrevocably obligating
the Borrower to borrow $24,500,000 from HNS thereunder on the Initial
Order Date (subject to satisfaction (or waiver by HNS) of the
conditions precedent to borrowing set forth therein).
(b) On the Initial Order Date, HNS shall have
received from the Borrower:
(1) a favorable opinion of counsel to the Obligors,
dated as of the date hereof, addressed to the Lenders, with respect to
matters of United States federal, New York and Delaware corporate law
customary in transactions of the type contemplated by this Agreement,
the Warrants and the Registration Rights Agreement, in substantially
the form attached hereto as Exhibit E;
17
22
(2) the Facility Set-Up Fee (as defined in the
Manufacturing Agreement), by wire transfer in immediately available
funds; and
(3) the Initial Order (as defined in the
Manufacturing Agreement) and the required downpayment in connection
therewith (by wire transfer in immediately available funds).
(ii) On the date of execution of this Agreement each Lender
shall have received its Note, duly executed by the Borrower.
3.2. Conditions to Each Advance. The Obligation of each
Lender to make each of its Advances hereunder is subject to the satisfaction of
the following conditions precedent:
(i) On the applicable Order Date, the Borrower shall have
furnished to HNS:
(a) a purchase order (a "Base Station Equipment
Purchase Order") conforming to the requirements of the Manufacturing
Agreement setting forth the Base Station Equipment to be financed
hereunder and providing for a delivery date conforming to the
requirements of the Manufacturing Agreement and in any event on or
prior to June 30, 1999;
(b) at the option of the Borrower (in order to take
advantage of the cancellation rights set forth in Section 3.3(a)), a
written certificate signed by the Chief Financial Officer of the
Borrower listing the country, state and county (or other applicable
local jurisdiction) in which each item of Base Station Equipment
subject to such Base Station Equipment Purchase Order will be first
installed for operation after delivery from HNS (with a copy of such
certificate to the Collateral Agent (if different from HNS)); and
(c) a nonrefundable cash payment of ten percent (10%)
(as adjusted prior to the applicable Advance Date to reflect Changes
made pursuant to and as defined in the Manufacturing Agreement) of the
aggregate purchase price for the Base Station Equipment covered by the
applicable Base Station Equipment Purchase Order. For the avoidance
of doubt, all such cash payments shall be retained by HNS as partial
payment for the Base Station Equipment covered by the applicable Base
Station Equipment Purchase Order and shall not reduce the unpaid
amount of the Obligations.
(ii) no later than forty-five (45) days before the delivery
date specified in the applicable Base Station Equipment Purchase Order, the
Borrower shall have furnished to HNS a written certificate signed by the Chief
Financial Officer of the Borrower (a) setting forth the aggregate amount of the
Advances requested by the Borrower in connection with such Base Station
Equipment Purchase Order (which designation shall be irrevocable) and (2)
stating that the aggregate amount of the Advances requested by the Borrower in
connection with the applicable Base Station Equipment Purchase Order, when
aggregated with all prior Advances, will not exceed the Maximum Advance Amount.
18
23
(iii) no later than forty-five (45) days before the delivery
date specified in the applicable Base Station Equipment Purchase Order, the
Borrower shall have furnished to the Collateral Agent, at the Borrower's
expense;
(a) (1) if the Borrower did not provide HNS on the
applicable Order Date with the information specified in Section
3.2(i)(b), a written certificate signed by the Chief Financial Officer
of the Borrower listing the country, state and county (or other
applicable local jurisdiction) in which each item of Base Station
Equipment subject to such Base Station Equipment Purchase Order will
be first installed for operation after delivery from HNS and (2)
duly-executed Uniform Commercial Code financing statements and/or
fixture filings (or the functional equivalent in jurisdictions not
subject to the Uniform Commercial Code) reasonably deemed necessary or
desirable by the Collateral Agent to perfect its security interest in
the Base Station Equipment to be sold to the Borrower pursuant to the
Manufacturing Agreement and the applicable Base Station Equipment
Purchase Order, in form suitable for filing in the appropriate filing
offices;
(b) the results of Uniform Commercial Code filing
searches (or the functional equivalent in jurisdictions not subject to
the Uniform Commercial Code) indicating that upon the sale of the
applicable Base Station Equipment to the Borrower and the first
installation for operation thereof, the Collateral Agent will have,
for its benefit and the ratable benefit of the Lenders, a first-
priority perfected security interest in such Base Station Equipment,
subject only to Permitted Liens;
(c) with respect to any Base Station Equipment to be
located on any real property the owner or mortgagee of which (by
statute, contract or otherwise) will have a Lien or other claim on
such Base Station Equipment that is prior in right to the Lien of the
Collateral Agent in such Base Station Equipment under the Security
Agreement and the rental and other payment obligations for which are
in the aggregate in excess of $10,000 per month (each, a "Landlord
Waiver Location"), instruments executed by such owner and/or
mortgagee, waiving or releasing such Lien or other claim, in suitable
form for recording in the appropriate recording office (except to the
extent that the aggregate purchase price of all Base Station Equipment
located at Landlord Waiver Locations and not subject to such waiver or
release does not exceed five percent (5%) of the aggregate purchase
price of all Base Station Equipment then subject to the Lien of the
Security Agreement); and
(d) if reasonably deemed necessary or desirable by
the Collateral Agent in its sole discretion, legal opinions (except as
to priority (unless, with respect to jurisdictions outside of the
United States, such opinions are customarily given in similar
circumstances)), search results, certificates from governmental
officials (United States or foreign) or other agreements, instruments
or documents providing comfort to the Collateral Agent that, upon
delivery to the Borrower (and thereafter until such security interest
is released in accordance with the terms hereof and of the Security
Agreement), the Collateral Agent will have, for its benefit and the
ratable benefit of the Lenders, a fully-enforceable first-priority
perfected security interest,
19
24
subject to no other Liens or claims of any Person (other than
Permitted Liens (except as provided in Section 3.2(iii)(c)), in each
item of Base Station Equipment subject to such Base Station Equipment
Purchase Order.
(iv) on the applicable Order Date the following statements
shall be true and correct (and the furnishing by the Borrower to HNS of the
applicable Base Station Equipment Purchase Order shall constitute a
representation and warranty by the Borrower to the Lenders that on such Order
Date such statements are true):
(a) the representations and warranties contained in
Article IV, in the Security Agreement and in the Pledge
Agreement are true and correct on and as of such Order Date,
before and after giving effect to the Advances contemplated by
the applicable Base Station Equipment Purchase Order, as
though made on and as of such date; and
(b) no Default or Unmatured Default has occurred and
is continuing as of such Order Date, before and after giving
effect to the making of the Advances contemplated by the
applicable Base Station Equipment Purchase Order.
(v) on the applicable Advance Date the following statements
shall be true and correct (and the acceptance by the Borrower of the applicable
Advances shall constitute a representation and warranty by the Borrower to the
Lenders that on such Advance Date such statements are true):
(a) the representations and warranties contained in
Article IV, in the Security Agreement and in the Pledge
Agreement are true and correct on and as of such Advance Date,
before and after giving effect to the making of such Advances,
as though made on and as of such date;
(b) no Default or Unmatured Default has occurred and
is continuing as of such Advance Date, after giving effect to
the making of such Advances; and
(c) the aggregate amount of the Advances to be made
to the Borrower on such Advance Date, when aggregated with all
prior Advances, will not exceed the Maximum Advance Amount.
(vi) On the applicable Advance Date, after giving effect to
the Advances to be made on such Advance Date and the delivery to the Borrower
of the Base Station Equipment covered by the applicable Base Station Equipment
Invoice, the Collateral Agent shall have (and shall continue to have, after the
applicable Advance Date and until such security interest is released in
accordance with the terms hereof and of the Security Agreement), for its
benefit and the ratable benefit of the Lenders, a fully-enforceable valid and
perfected first-priority security interest in all of the Collateral owned by
the Borrower on such Advance Date, including, without limitation, such Base
Station Equipment, subject to no other Liens or claims of any Person, other
than Permitted Liens (except as provided in Section 3.2(iii)(c)
20
25
and after giving effect to any express, written waivers by the Collateral Agent
of any perfection requirements hereunder).
3.3. Changes and Cancellations. (a) If on the applicable
Order Date the Borrower provided HNS with the information specified in Section
3.2(i)(b), and if within fifteen (15) Business Days of such Order Date the
Borrower and the Collateral Agent determine that the Borrower will not be able
to satisfy the condition precedent set forth in Section 3.2(iii)(c) with
respect to any portion of the Base Station Equipment covered by a Base Station
Equipment Purchase Order (the "Nonconforming Base Station Equipment"), the
Borrower shall, within five (5) Business Days thereafter, (1) cancel its order
with respect to such Nonconforming Base Station Equipment, (2) specify a new
location for such Nonconforming Base Station Equipment that will cause the
Borrower to satisfy the condition precedent set forth in Section 3.2(iii)(c) or
(3) inform HNS and the other Lenders that it will pay cash for such
Nonconforming Base Station Equipment, such payment to be made in accordance
with the terms of the Manufacturing Agreement and subject to HNS' customary
credit approval; provided, that the failure of the Borrower to notify HNS of
its selection of either (1), (2) or (3) above shall be deemed to be a selection
by the Borrower to pay cash for such Nonconforming Base Station Equipment no
later than the applicable delivery date.
(b) Adjustments to the purchase price of Base Station
Equipment to be financed hereunder (and corresponding adjustments to the
required 10% downpayment and the amount to be financed hereunder) shall be made
to account for any Changes made pursuant to and as defined in the Manufacturing
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Obligors represents and warrants to the Lenders
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 have such authority 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 Financing
Documents to which it is a party and to perform its obligations thereunder.
Each of the Financing Documents has been duly authorized, executed and
delivered by the applicable Obligor and constitutes a legal, valid and binding
obligation of the applicable Obligor,enforceable against the applicable Obligor
in accordance with its terms, except as such enforceability may be limited by
the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity (whether considered at law or in
equity).
21
26
4.3. Compliance with Laws and Contracts. Neither the
execution and delivery by each Obligor of the Financing Documents to which it
is a party, nor the consummation of the transactions therein contemplated, nor
compliance with the provisions thereof, nor the use of the Base Station
Equipment by Geotek or its Affiliates, 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, permit, 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 Financing
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 June 30, 1996 consolidated
financial statements of Geotek and its Subsidiaries heretofore delivered to HNS
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.
22
27
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 and Completeness of Information. No
information, schedule, exhibit or report furnished by Geotek to HNS in
connection with the negotiation of the Financing 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.
4.10. Material Agreements. None of the Subsidiaries of
Geotek 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, is
reasonably likely to 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 HNS 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. Compliance with Law. Neither Geotek nor any of its
Subsidiaries has violated or failed to comply with any law, rule, regulation,
order, writ, judgment, injunction, decree or award which could have a Material
Adverse Effect.
4.12. Subordinated Indebtedness. The Obligations are not
subordinate to any Indebtedness of the Obligors. The Borrower's Obligations
are senior (or, in the case of the Loan Agreement, pari passu) to all other
Indebtedness of the Borrower.
4.13. Licenses and Permits. Geotek and each of its
Subsidiaries have obtained and hold in full force and effect all licenses,
permits, orders or approvals of, and have made all required registrations with,
all state, federal and foreign government bodies that are material to the
conduct of the business of Geotek or its Subsidiaries (collectively,
"Permits"), except where the failure to have such Permits would not,
individually or in the aggregate, have a Material Adverse Effect. All such
Permits are in full force and effect and neither Geotek nor any of its
Subsidiaries have violated any of the terms thereof, except where the failure
to keep such Permits in full force and effect or where such violations would
not, individually or in the aggregate, have a Material Adverse Effect. Geotek
and any of its
23
28
Subsidiaries which hold or will hold 900 MHz Licenses are fully qualified to
hold 900 MHz Licenses.
ARTICLE V
COVENANTS
During the term of this Agreement, unless the Majority Lenders
shall otherwise consent in writing:
5.1. Reporting. Geotek will furnish to the Lenders
(a) Without duplication, copies of all reports,
certificates, documents and other information required to be delivered
to the trustee under the 1995 Indenture and the 0000 Xxxxxxxxx and to
the lender under the S-C Rig Loan Agreement (in each case, as in
effect on the date hereof and whether or not then in effect). The
copies of any such reports, certificates or documents that are
addressed to such trustee or lender shall be addressed to the Lenders.
(b) Within forty-five (45) Business 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.
(c) Within two hundred seventy (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) As soon as possible and in any event no later
than two (2) Business Days after the occurrence thereof, written
notice of the occurrence of a Change of Control.
(f) Such other information as any Lender may from
time to time reasonably request.
5.2. Notice of Default. Geotek will, and will cause each
of its Subsidiaries to, give prompt notice in writing to the Lenders of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which might have a Material Adverse Effect.
24
29
5.3. 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 (i) 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 900 MHz Licenses, (ii) the ownership of the Base
Station Equipment purchased from HNS under the Manufacturing Agreement and
(iii) the leasing or sale of Base Station Equipment in accordance with Section
5.12.
5.4. 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.
5.5. Insurance. Geotek will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on its respective Base Station Equipment and all their
other property in such amounts and covering such risks as is consistent with
sound business practice, and Geotek will furnish to the Lenders upon request
full information as to the insurance carried.
5.6. 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.
5.7. 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.
5.8. Inspection. Geotek will, and will cause each of its
Subsidiaries to, permit representatives and agents appointed by the Collateral
Agent or the Majority Lenders, 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 Collateral
Agent or the Majority Lenders may designate. Geotek may require as a condition
of any such inspection
25
30
and/or discussions that such representatives and agents enter into
confidentiality agreements customary in the asset-based lending field in form
and substance reasonably satisfactory to Geotek.
5.9. Restricted Payments. Prior to July 15, 2000, 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.
5.10. Indebtedness. The Borrower will not, nor will it
permit any of its Subsidiaries to, incur any Indebtedness other than (i) the
Advances (in the case of the Borrower), (ii) the Indebtedness of the Borrower
under the Loan Agreement, (iii) the Holdings Note (in the case of Holdings) and
(iv) the Guarantees by the Borrower and Holdings required to be provided under
the 1995 Indenture as in effect on the date hereof.
5.11. Corporate Changes. The Borrower will not, nor will
it permit any of its Subsidiaries to, merge or consolidate with or into any
other Person or otherwise alter or modify the Borrower's or any Subsidiary's
certificate or articles of incorporation or by-laws (unless such alteration or
modification would not have a Material Adverse Effect), corporate names,
mailing addresses, principal places of business, structure, status or
existence.
5.12. Sale of Assets. Subject to the second sentence of
this Section 5.12 and as contemplated by the proviso in the second sentence of
Section 5.13 of the Loan Agreement, 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.
The Borrower will not sell, assign, lease, convey or otherwise transfer any
interest in any of the Collateral, except that the Borrower may:
(i) sell any Base Station Equipment if:
(a) simultaneous with such sale, the Borrower repays
the remaining unpaid principal balance of the Advances in respect of
such Base Station Equipment (i.e., up to ninety percent (90%) of the
purchase price thereof) (together with all accrued and unpaid interest
thereon);
(b) such sale is made expressly subject to the
Collateral Agent's security interest in such Base Station Equipment
and the Collateral Agent is satisfied in its reasonable discretion
that following such sale the Collateral Agent will continue to have a
fully-enforceable, first-priority security interest in such
Collateral, subject to no other Liens or other claims of any Person
(other than Permitted Liens), it being understood that the Collateral
Agent may require the purchaser of such Base Station Equipment (and
its lenders, landlords and mortgagees) to enter into certain
26
31
agreements with the Borrower and/or the Collateral Agent in order to
satisfy the Collateral Agent hereunder; or
(c) the Borrower receives "fair value" for such Base
Station Equipment (as certified by the Chief Financial Officer of the
Borrower with respect to sales of Base Station Equipment the original
purchase price of which was less than $3,000,000, and as determined by
a reputable, experienced independent appraiser of wireless
communications equipment reasonably acceptable to the Collateral Agent
with respect to sales the original purchase price of which was equal
to or greater than $3,000,000 (it being agreed, however, that the
"fair value" of Base Station Equipment sold by the Borrower shall not
be less than (x) prior to first installation thereof, the original
purchase price thereof, as established pursuant to the Manufacturing
Agreement and (y) after first installation thereof, the net book value
thereof at the time of such sale)) in the form of cash in which the
Collateral Agent has a fully- enforceable, first-priority perfected
security interest (subject only to Permitted Liens not otherwise
waived or released hereunder) as security for the Obligations until
(1) used by the Borrower to (A) repay all or a portion of the Advances
or (B) purchase from HNS other wireless communications equipment
("Replacement Communications Equipment") in which the Collateral Agent
is granted a fully- enforceable, first-priority perfected security
interest (subject only to Permitted Liens not otherwise waived or
released hereunder) as security for the Obligations or (2) the Base
Station Equipment so sold is reacquired by the Borrower ("Reacquired
Base Station Equipment")and the Collateral Agent is granted a
fully-enforceable, first-priority perfected security interest therein
(subject only to Permitted Liens not otherwise waived or released
hereunder) (it being understood that the determination of the
enforceability, priority or perfection of any security interest
referred to in this clause (c) shall be made by the Collateral Agent
in its reasonable discretion and that the Collateral Agent may require
the Borrower to deliver a legal opinion of counsel reasonably
acceptable to the Collateral Agent with respect to such matters of
enforceability, priority (but only with respect to jurisdictions
outside of the United States where such opinions are customarily given
in similar circumstances) and perfection); and
(ii) lease any Base Station Equipment if:
(a) such lease is made expressly subject and
subordinate to the Collateral Agent's security interest in such Base
Station Equipment;
(b) such lease is on arms-length terms and at market
rates; and
(c) the Collateral Agent is satisfied in its
reasonable discretion that after the commencement of such lease the
Collateral Agent will continue to have a fully-enforceable,
first-priority security interest in such Collateral, subject to no
other Liens or other claims of any Person (other than Permitted
Liens), it being understood that the Collateral Agent may require the
lessee (and its lenders, landlords and mortgagees) of such Base
Station Equipment to enter into certain agreements with the
27
32
Borrower and/or the Collateral Agent in order to satisfy the
Collateral Agent hereunder.
For the avoidance of doubt, neither the Collateral Agent nor any of the Lenders
shall be responsible for any of the costs of fulfilling the requirements of
subsection 5.12(i)(b), 5.12(i)(c) or 5.12(ii).
5.13. 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.
5.14. 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 900 MHz
Licenses and related assets as provided in the Loan Agreement.
5.15. 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 1995 Indenture as in effect on the date hereof.
5.16. 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, except Permitted
Liens.
5.17. Asset Expenditures. The Borrower will not, nor will
it permit any of its Subsidiaries to, acquire any assets, other than the
acquisition (or reacquisition) by the Borrower or its Subsidiaries of Base
Station Equipment pursuant to the Manufacturing Agreement or hereto (including,
without limitation, Section 5.12(c)), as applicable, and the acquisition by
Holdings of the 900 MHz Licenses and related assets as provided in the Loan
Agreement.
5.18. Rentals. The Borrower will not, nor will it permit
any of its Subsidiaries to, create, incur or suffer to exist any obligations
for Rentals.
5.19. 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 (other than for the benefit of HNS).
28
33
5.20. Affiliates. The Borrower will not, nor will it
permit any of its Subsidiaries to, enter into any transaction with any
Affiliate, except as contemplated by this Agreement (including, without
limitation, Sections 5.12 and 5.17).
5.21. 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.
5.22. 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.
5.23. Compliance with other Agreements. Geotek shall, and
shall cause each of its Subsidiaries to, comply with all covenants,
restrictions and other agreements applicable to them in the 1995 Indenture, the
1996 Indenture and the S-C Rig Loan Agreement 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
Majority Lenders, such consent not to be unreasonably withheld).
5.24. Further Assurances. Geotek shall take, and shall
cause each of the Subsidiaries to take, all such further actions and execute
all such further documents and instruments as the Collateral Agent may at any
time reasonably determine to be necessary or desirable to further carry out and
consummate the transactions contemplated by the Financing Documents, to cause
the execution, delivery and performance of the Financing Documents to be duly
authorized and to perfect, protect and maintain the Liens (and the priority
status thereof) of the Collateral Agent on the Collateral.
5.25. Payments. Geotek will, and will cause its
Subsidiaries (and any other Person obligated thereon) to, pay when due all rent
or mortgage loan installments with respect to any Landlord Waiver Location,
except where such payments are being contested in good faith if a reserve or
other appropriate provision, if any, as shall be required by GAAP shall have
been made in respect thereof.
ARTICLE VI
GUARANTY
6.1. The Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to the Lenders and their respective
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 any Lender
may enforce this Guaranty up to the full amount guaranteed by the Guarantor
hereunder without proceeding against the Borrower or
29
34
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 2.8.
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 Facility Documents, by operation of law or otherwise;
(b) any modification or amendment of or supplement to
this Agreement, any Note or any of the other Facility Documents,
including, without limitation, any increase in the principal amount of
the Advances;
(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 any
Note;
(e) the existence of any claim, set-off or other
rights which the Guarantor may have at any time against the Borrower
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;
(f) any invalidity or unenforceability relating to or
against any Obligor for any reason of any of the Facility 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 Advances or any other amount payable by it under the Facility
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.
30
35
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. Prior to July 15, 2000, 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 Lenders and discharged, in full. On or after July
15, 2000, to the extent not expressly prohibited by the terms of the 1995
Indenture or the S-C Rig Loan Agreement (each as in effect on the date hereof),
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 Lenders and discharged, in
full. If any payment shall be made to the Guarantor on account of the
subrogation, contribution or reimbursement rights discussed in this Section 6.5
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 Lenders 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.
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 Collateral Agent or the Lenders
under or in connection with this Agreement, any Note, any other Financing
Document or any certificate or information
31
36
delivered in connection herewith or therewith shall be materially false as of
the date on which made.
7.2. (a) Nonpayment of principal of any Note within one (1)
day of when due, or (b) nonpayment of interest upon any Note or of any other
Obligations under any of the Financing Documents within five (5) days of notice
from any 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 V (except, with respect to a breach by the Borrower of
Section 5.25 only, if all overdue rent payments (not being contested in good
faith as provided in Section 5.25) with respect to all leases for all Landlord
Waiver Locations do not, in the aggregate, exceed at any time $50,000) 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 thirty (30) days of a senior officer of either
Obligor obtaining actual knowledge 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 any Note which is not remedied within ten (10)
days after written notice from the Collateral Agent.
7.5. Failure of Geotek or any of its Subsidiaries to pay any
Indebtedness in excess of $2,000,000 when due (including any applicable grace
periods); 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
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.
32
37
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 greater
than $1,000,000 worth of Collateral (as measured by the aggregate purchase
price thereof) or 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 Financing Documents for any reason, other
than a partial or full release in accordance with the terms thereof, ceases to
be in full force and effect or is declared to be null and void, or either
Obligor denies that it has any further liability under any Financing Document
to which it is party, or gives notice to such effect.
7.14. 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
33
38
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 900 MHz License owned by the
Borrower or any of its Subsidiaries 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 Majority Lenders
reasonably believe 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 HNS in excess of $2,000,000,
including, without limitation, with respect to any extension of trade credit by
HNS; 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 Collateral Agent does not have or ceases to have a
fully-enforceable valid and perfected first-priority security interest in the
Collateral (subject only to Permitted Liens (except as provided in Section
3.2(iii)(c)), in each case, for any reason other than the failure of the
Collateral Agent to take any reasonable action (other than involving the
payment of money) within its control and requested in writing by the Borrower
(and which is not otherwise the responsibility of the Borrower hereunder or
under the Collateral Documents).
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.
7.20. The breach by Geotek or any of its Subsidiaries of any
of the terms or provisions of any of the other Financing Documents and, where
such breach is reasonably capable of cure and provided such breach has not
otherwise caused a Material Adverse Effect, the failure of Geotek or such
Subsidiary to cure such breach within ten (10) days of becoming aware thereof.
7.21. The breach by the Borrower of its obligations to the
Lender under Section 5.3 of the Manufacturing Agreement.
34
39
7.22. Any court shall enjoin the manufacture, sale, lease,
use, repair, reconstruction, import or export of the Base Station Equipment by
Geotek, the Borrower or PST on the grounds of infringement of intellectual
property rights held by a third party.
ARTICLE VIII
ACCELERATION, REMEDIES, WAIVERS AND AMENDMENTS
8.1. Acceleration. If any Default described in Section
7.6 or 7.7 occurs, the obligation of the Lenders to make Advances hereunder
shall immediately and automatically terminate and the Obligations shall
immediately become due and payable, in each case without any election or action
on the part of the Lenders. If any other Default occurs, the Majority Lenders
may (i) declare the obligation of the Lenders to make Advances to be
terminated, whereupon the same shall forthwith terminate and (ii) 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. The Lenders'
remedies hereunder shall be in addition to any remedies available to the
Lenders or the Collateral Agent upon a Default under any of the other Financing
Documents or otherwise pursuant to applicable law. All remedies contained in
the Financing Documents or by law afforded shall be cumulative and all shall be
available to the Lenders and the Collateral Agent until the Obligations have
been paid in full. No individual Lender shall have any right to institute any
proceeding or pursue any remedy with respect to this Agreement, the Notes or
any other Financing Document (such right belonging to the Majority Lenders (or
the Collateral Agent, at the direction of the Majority Lenders)); provided,
however, that any Lender may institute a proceeding or pursue any remedy for
the enforcement of the payment of principal of, or accrued interest on, any
Note on or after the respective due dates set forth in such Note (or any
applicable prepayment date, if earlier), subject to applicable grace periods;
provided, further, that the foregoing shall not limit any right of HNS (in its
individual capacity and not as a Lender hereunder) to institute any proceeding
or pursue any remedy under the Manufacturing Agreement, the Sales
Representation Agreement or any other Facility Document (other than the
Financing Documents).
8.2. Preservation of Rights; Amendments and Waivers. No
delay or omission of the Lenders or the Collateral Agent to exercise any right
under the Facility 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 Financing Documents whatsoever
shall be valid unless in writing signed by the Majority Lenders, and then only
to the extent in such writing specifically set forth; provided that the consent
of all the Lenders is required to (i) increase the Maximum Advance Amount, (ii)
reduce the principal of, or interest on, the Notes, (iii) postpone any date
fixed for any payment in respect of principal of, or interest on, the Notes,
(iv) change the percentage of the
35
40
Commitments, or any minimum requirement necessary for the Lenders or the
Majority Lenders to take any action hereunder, (v) change the definition of
Majority Lenders or (vi) except as otherwise expressly provided in this
Agreement or the other Financing Documents, and other than in connection with
the sale or other disposition of any asset of the Borrower permitted under this
Agreement, release any Liens in favor of the Lenders on a material portion of
the Collateral; provided, further, that the consent of the Collateral Agent
shall be required for any amendment, waiver or consent affecting the rights or
duties of the Collateral Agent under any Financing Document, in addition to the
consent of the Majority Lenders or the Lenders otherwise required by this
Section.
ARTICLE IX
GENERAL PROVISIONS
9.1. Successors and Assigns. (a) The terms and provisions
of the Facility Documents shall be binding upon and inure to the benefit of the
Obligors, the Lenders, the Collateral Agent and their respective successors and
assigns.
(b) Subject to the Securities Act and applicable
state securities laws, the Lender may (i) on or prior to the Advance Cutoff
Date, (1) sell, assign or otherwise transfer the Note, subject to the terms
thereof (and its rights and obligations under the other Financing Documents),
in whole or in part, to (A) any Xxxxxx Subsidiary, (B) any other Affiliate of
the Lender (other than a competitor of Geotek engaged or, to the knowledge of
the Lender, planning to engage in the business of providing wireless voice or
data communications services to mobile customers or of providing equipment in
connection therewith) or, (C) with the prior written consent of Geotek, such
consent not to be unreasonably withheld, any other Person or (2) assign the
payments due under the Note to any bank or financial institution and (ii) after
the Advance Cutoff Date, sell, assign or otherwise transfer the Note, subject
to the terms thereof (and its rights and obligations under the other Financing
Documents), in whole or in part (but in parts representing no less than
$1,000,000 in principal amount), to any Person (other than a competitor of
Geotek engaged or, to the knowledge of the Lender, planning to engage in the
business of providing wireless voice or data communications services to mobile
customers or of providing equipment in connection therewith (except for Xxxxxx
Subsidiaries)). Notwithstanding the foregoing, after the occurrence and during
the continuance of a Default, the Lender may sell, assign or otherwise transfer
the Note (and its rights and obligations under the other Financing Documents)
to any Person without any restriction (other than as imposed by the Securities
Act and applicable state securities laws) or right of the Borrower to approve
or disapprove such transfer.
(c) Except upon the occurrence and during the
continuance of a Default, before HNS or any of its Affiliates may sell, assign
or otherwise transfer any Note pursuant to Section 9.1(b), it shall give the
Borrower written notice of its good faith intention to do so, whereupon the
Borrower shall have fifteen (15) days from the date of such notice
36
41
(the "Prepayment Notice Period") to notify HNS or such Affiliate in writing of
its intention to prepay such Note in its entirety (including any accrued and
unpaid interest and any other Obligations allocable thereto). If the Borrower
so chooses to prepay such Note, it shall do so within thirty (30) days of its
notice to HNS or such Affiliate of such intention to do so. If the Borrower
does not give HNS or such Affiliate notice of its intention to prepay such Note
during the Prepayment Notice Period, then HNS or such Affiliate may sell,
assign or otherwise transfer such Note or any portion thereof at any time
during the seventy-five (75) day period beginning on the day immediately
following the last day of the applicable Prepayment Notice Period without any
right of the Borrower to prepay such Note hereunder or under Section 2.10 (the
"Prepayment Moratorium Period"). If HNS or such Affiliate does not sell,
assign or otherwise transfer such Note or any portion thereof during the
Prepayment Moratorium Period, the Borrower's prepayment rights hereunder shall
revive with respect to any portion not sold, assigned or transferred until the
occurrence of another Prepayment Moratorium Period in accordance herewith.
(d) The Obligors authorize the Lenders to disclose to
any prospective purchaser, assignee or other transferee of an interest in the
Financing Documents the Financing Documents and any financial or other
information pertaining to the Financing Documents and the Advances known to the
Lenders 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 their respective businesses.
(e) Except as expressly set forth to the contrary in
Section 9.1(b), from and after the completion of any sale, assignment or other
transfer permitted hereunder, the purchaser, assignee or transferee shall have
all of the rights and obligations of a "Lender" hereunder and under the other
Financing Documents, to the extent of the interest sold, assigned or otherwise
transferred to such Person.
(f) In connection with any sale, assignment or other
transfer permitted hereunder, the Borrower and the Lenders agree to execute
such agreements, certificates, instruments or other documents, and to take such
other actions as the transferor or transferee Lender or the Borrower may
reasonably request (including, without limitation, the execution and delivery
by the Borrower of replacement Notes), to evidence such sale, assignment or
other transfer and to preserve the rights of the Lenders, such transferee and
the Borrower under the Notes and the other Financing Documents (including,
without limitation, their respective rights and the rights of the Collateral
Agent in the Collateral).
(g) The Obligors may not assign or otherwise transfer
any of their rights or obligations under any of the Facility Documents.
9.2. Survival of Representations. All representations and
warranties of the Obligors contained in any Financing Document shall survive
delivery of the Notes and the making of the Advances herein contemplated.
37
42
9.3. Governmental Regulation. Anything contained in any
Facility Document to the contrary notwithstanding, the Lenders shall not be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.4. 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
(AND APPELLATE COURTS FROM ANY THEREOF) FOR PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER FINANCING 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 THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 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 10.2.
9.5. Headings. Section headings in the Financing
Documents are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Financing Documents.
9.6. Entire Agreement. The Facility Documents embody the
entire agreement and understanding among the Obligors, the Lenders and the
Collateral Agent and supersede all prior agreements and understandings among
the Obligors, the Lenders and the Collateral Agent relating to the subject
matter thereof.
9.7. Expenses; Indemnification. The Obligors agree,
jointly and severally, to reimburse the Lenders and the Collateral Agent for
any out-of-pocket costs and expenses
38
43
(including reasonable fees and time charges of outside legal counsel to the
Collateral Agent) paid or incurred by the Lenders and the Collateral Agent in
connection with (i) obtaining (or confirming) the required perfection and
first-priority status of the Collateral Agent's security interest in the Base
Station Equipment ("Perfection Costs") and (ii) after the occurrence and during
the continuance of a Default, the collection and enforcement of the Financing
Documents. The Obligors further agree, jointly and severally, to indemnify the
Lenders, the Collateral Agent and their respective directors, officers,
employees, agents and attorneys (collectively, the "Indemnified Parties")
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation (or
preparation therefor (if litigation actually commences)) whether or not any
Indemnified Party is a party thereto, but excluding the costs of negotiating,
documenting and closing the financing transaction contemplated by this
Agreement (other than Perfection Costs)) (collectively, "Costs") which any of
them may pay or incur arising out of or relating to this Agreement, the other
Financing Documents, the transactions contemplated hereby or the direct or
indirect application or proposed application of the proceeds of the Advances;
provided, however, that with respect to any Costs incurred in connection with
any legal proceeding between an Indemnified Party and one or more of the
Obligors (solely as such Costs relate to the matter or matters in dispute
between an Obligor or the Obligors and such Indemnified Party and not to any
matters in dispute between such Indemnified Party and any third party), the
Obligors shall only be required to indemnify such Indemnified Party in the
event the Indemnified Party shall finally prevail in such proceeding (as
evidenced by a final judgment not subject to further appeal). The obligations
of the parties under this Section shall survive the termination of this
Agreement.
9.8. 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.
9.9. Severability of Provisions. Any provision in any
Financing 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 Financing Documents are
declared to be severable.
9.10. Confidentiality; Public Disclosures. Subject to the
parties' disclosure obligations under the Securities Act and the Exchange Act,
and unless otherwise permitted under Section 9.1(d) or 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
39
44
each party's attorneys, financial advisors and others in a confidential
relationship to such party.
9.11. Risk of Loss. The Borrower bears the risk of loss of
the Base Station Equipment financed hereunder. If any item of such Base
Station Equipment is lost, stolen, destroyed, damaged beyond repair or rendered
permanently unfit for use (each, a "Loss"), the Borrower shall immediately
notify the Lenders, and shall, no later than thirty (30) days from the date of
such Loss, pay to the Lenders the remaining unpaid principal balance of the
Advances in respect of such item (i.e., up to ninety percent (90%) of the
purchase price thereof), together with all amounts of interest and other
amounts due to the Lenders with respect to such item.
9.12. Setoff. To the extent that any amount is owing at
any time to Geotek by HNS pursuant to any of the Warrants for the payment of
the "Exercise Price" thereunder, HNS may satisfy such amount, in whole or in
part, by set-off against any amount then due and payable by either Obligor
hereunder (whether at the stated maturity, by acceleration or otherwise).
9.13. Registration Rights. The Notes shall be entitled to
the Registration Rights set forth in the Registration Rights Agreement. In
connection therewith, the parties hereto agree to any amendments to this
Agreement made pursuant to and as contemplated by Section 6(a) thereof.
ARTICLE X
NOTICES
10.1. Giving Notice. Any notice required or permitted to
be given under this Agreement may be, and shall be deemed, given when
personally delivered, or when deposited in the United States mail for overnight
delivery, postage prepaid, or when sent by facsimile transmission and
mechanical confirmation of a successful transmission has been received, or when
deposited with a reputable overnight delivery service, charges prepaid, in each
case addressed to the applicable Obligor or HNS at the addresses indicated
below their signatures to this Agreement or to any other Lender at the address
specified in writing by such Lender to the parties hereto. All notices to be
given to the Collateral Agent hereunder or under the other Financing Documents
shall, so long as HNS is the Collateral Agent, be delivered to the address for
notices to HNS set forth on the signature page hereto.
10.2. Change of Address. The Obligors, HNS, the Lenders
and the Collateral Agent may each change the address for service of notice upon
it by a notice in writing to the other parties hereto.
40
45
ARTICLE XI
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 HNS.
[SIGNATURE PAGE FOLLOWS]
41
46
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/ Xxxxxxx XxXxx
--------------------------------------------
Title: Chief Financial Officer
Address: c/o Geotek Communications, Inc.
00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Geotek (Guarantor):
GEOTEK COMMUNICATIONS, INC.
By: /s/ Xxxxxxx XxXxx
--------------------------------------------
Title: Chief Financial Officer
Address: 00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
HNS (Lender)
XXXXXX NETWORK SYSTEMS, INC.
By: /s/ Xxxxxxx Xxxx
--------------------------------------------
Title: Executive Vice President
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telecopy No.: (000) 000-0000
47
EXHIBIT A
FORM OF NOTE
THIS NOTE 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 VENDOR CREDIT FINANCING AGREEMENT,
DATED AS OF SEPTEMBER ___, 1996, A COPY OF WHICH MAY BE OBTAINED FROM GEOTEK
FINANCING CORPORATION AT ITS PRINCIPAL EXECUTIVE OFFICE.
GUARANTEED SECURED PROMISSORY NOTE
$[100,000,000] _____________, 1996
GEOTEK FINANCING CORPORATION, a Delaware corporation (the "Borrower"), promises
to pay to XXXXXX NETWORK SYSTEMS, INC. (the "Lender"), in immediately available
funds, the principal sum of [ONE HUNDRED MILLION] DOLLARS ($[100,000,000]), or
such lesser amount as may then constitute the aggregate unpaid principal amount
of the Advances made to the Borrower by the Lender pursuant to the Vendor
Credit Financing Agreement (as defined below), together with interest thereon
at the rates and on the dates specified in Section 2.3 of the Vendor Credit
Financing Agreement, dated as of September ___, 1996, 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 "Vendor Credit
Financing Agreement"). Capitalized terms used herein and not otherwise defined
herein are used with the meanings attributed to them in the Vendor Credit
Financing Agreement.
All interest shall be computed for actual days elapsed on the basis of a 365
(or 366, as appropriate)-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 Vendor
Credit Financing Agreement.
The Borrower hereby authorizes the Lender to endorse on the Schedule annexed to
this Note the principal amount of all Advances made by the Lender to the
Borrower under the Vendor Credit Financing Agreement as well as all repayments
of principal permitted thereunder and all additions to principal made pursuant
to Section 2.3(b) thereof; 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 Vendor Credit Financing Agreement or this Note.
48
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Vendor Credit Financing Agreement, to which Vendor Credit
Financing Agreement 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 subject to optional and mandatory prepayment as provided in the Vendor
Credit Financing Agreement.
This Note is secured pursuant to the terms of the Pledge Agreement and the
Security Agreement and the other Collateral Documents in existence from time to
time.
This Note is subject to the restrictions on transfer set forth in Section 9.1
of the Vendor Credit Financing Agreement and is entitled to the Registration
Rights set forth in Annex A attached to the Vendor Credit Financing Agreement.
The Borrower hereby waives presentment, demand, protest and notice of any kind.
No failure to exercise, and no delay in exercising any rights hereunder on the
part of the holder hereof shall operate as a waiver of such rights.
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: ___________________________
49
SCHEDULE OF BORROWINGS OF, ADDITIONS TO AND REPAYMENTS OF PRINCIPAL TO
GUARANTEED SECURED PROMISSORY NOTE
OF GEOTEK FINANCING CORPORATION
DATED ________________, 1996
Amount of
Amount of Addition to Amount Unpaid
Date Borrowing Principal Repaid Balance
----------------------------------------------------------------------------- ---------
50
EXHIBIT C
FORM OF
SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement") is made and entered
into as of September __, 1996 by GEOTEK FINANCING CORPORATION, a Delaware
corporation, having its principal office at c/o Geotek Communications, Inc., 00
Xxxxx Xxxx, Xxxxxxxx, XX 00000 (the "Borrower"), in favor of XXXXXX NETWORK
SYSTEMS, INC., a Delaware corporation, having an office at 00000 Xxxxxxx Xxxxxx
Xxxxx, Xxx Xxxxx, XX 00000 ("HNS"), for itself and as collateral agent for the
benefit of the Lenders (as defined below) (in such capacity, the "Collateral
Agent").
W I T N E S S E T H:
WHEREAS, the Borrower, Geotek Communications, Inc., as guarantor (the
"Guarantor") and HNS have entered into a Manufacturing Agreement of even date
herewith (as amended or otherwise modified from time to time, the
"Manufacturing Agreement") pursuant to which the Borrower will purchase from
HNS from time to time Base Station Equipment (as described therein);
WHEREAS, the Borrower, the Guarantor and HNS (together, with its
successors and assigns, referred to collectively as the "Lenders") have entered
into a Vendor Credit Financing Agreement of even date herewith (as amended or
otherwise modified from time to time, the "Financing Agreement") pursuant to
which the Lenders have agreed to make Advances (as defined therein) to the
Borrower as evidenced by the Notes (as defined therein) to finance the purchase
by the Borrower from HNS of Base Station Equipment pursuant to the
Manufacturing Agreement. Capitalized terms used herein and not otherwise
defined herein shall have the meanings given to such terms in the Financing
Agreement;
WHEREAS, the Lenders have required, as a condition to their entering into
the Financing Agreement, that the Borrower (i) grant to the Collateral Agent a
security interest in and to the Collateral (as defined herein) and (ii) execute
and deliver this Security Agreement in order to secure the payment and
performance by the Borrower of the Obligations.
AGREEMENT
NOW THEREFORE, in consideration of the premises and in order to induce HNS
to make the Advances under the Financing Agreement, the Borrower hereby agrees
with the Collateral Agent for its benefit and the ratable benefit of the
Lenders as follows:
SECTION 1. CREATION OF SECURITY INTEREST. The Borrower hereby grants
to the Collateral Agent for its benefit and the ratable benefit of the Lenders
a continuing security interest in all of the Borrower's right, title and
interest in and to the collateral described in
51
Section 2 hereof (the "Collateral") in order to secure the payment and
performance of all Obligations.
SECTION 2. COLLATERAL. The Collateral is:
(a) All Base Station Equipment (as defined in the Financing
Agreement) and other related equipment purchased by the Borrower from HNS
utilizing Advances under the Financing Agreement and all Replacement
Communications Equipment and Reacquired Base Station Equipment (each as defined
in the Financing Agreement), whether purchased on the date hereof or hereafter
at any time by the Borrower from HNS and wherever located, including, without
limitation, mobile radio infrastructure equipment (which includes, without
limitation, remote sector equipment, mini-sector equipment, microsites, sector
controllers, power amplifier racks, transceiver racks and antenna box final
assemblies (and any wiring, harnesses, incidental equipment and hardware
contained in such mobile radio infrastructure equipment)) to be used by the
Borrower, the Guarantor, and Geotek Affiliates (as defined in the Manufacturing
Agreement, "Geotek Affiliates") and their respective joint-venture partners and
participants for the provision of mobile wireless communications services
throughout the world or in any network in which the Guarantor or any Geotek
Affiliate owns an interest or for any other purpose;
(b) all cash substituted by the Borrower for Base Station Equipment
as Collateral hereunder pursuant to the provisions of Section 5.12(c) of the
Financing Agreement; and
(c) all products and proceeds of any of the foregoing including,
without limitation, (i) whatever is now or hereafter received by the Borrower
upon the sale, exchange, collection or other disposition of any item of
Collateral, whether such proceeds constitute inventory, accounts, accounts
receivable, general intangibles, instruments, securities (including, without
limitation, United States of America Treasury Bills), credits, claims, demands,
documents, letters of credit and letter of credit proceeds, chattel paper,
documents of title, certificates of title, certificates of deposit, warehouse
receipts, bills of lading, leases, deposit accounts, money, tax refund claims,
contract rights, goods, equipment, machinery or computers and related
equipment, (ii) any such items which are now or hereafter acquired by the
Borrower with any proceeds of Collateral hereunder and (iii) any insurance now
or hereafter payable by reason of loss or damage to any item of Collateral or
any proceeds thereof.
SECTION 3. THE BORROWER'S REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Collateral Agent and the Lenders as follows:
(a) Location of Chief Executive Office. The Borrower's chief
executive office is located at c/o Geotek Communications, Inc., 00 Xxxxx Xxxx,
Xxxxxxxx, XX 00000.
(b) Perfection and Priority of Security Interest. With respect to
Collateral constituting Base Station Equipment to be located in a jurisdiction
subject to the Uniform Commercial Code, upon (i) the delivery (or redelivery,
as contemplated by Section 5.12(c) of the Financing
2
52
Agreement) to the Borrower of such Collateral, (ii) the filing of Uniform
Commercial Code financing statements naming the Collateral Agent as secured
party and the Borrower as debtor with respect to such Collateral in the
appropriate filing office(s) in such jurisdiction, and (iii) if applicable,
compliance by the Collateral Agent with the provisions of Section 9-312(c) of
the applicable Uniform Commercial Code relating to notice to the holders of
conflicting security interests in the Collateral, if any (it being understood
by the Borrower that such conflicting security interests may not be permitted
hereunder or under the Financing Agreement and may result in an Event of
Default hereunder), the Collateral Agent shall have, for its benefit and the
ratable benefit of the Lenders, a fully-enforceable valid and perfected
first-priority security interest in such Collateral, securing the payment of
the Obligations.
(c) No Consents or Filings. Except for those obtained prior to the
date hereof, no authorization, approval, or other action by, and no notice to
or filing with, any governmental authority or regulatory body is required for
the grant of the security interest by the Borrower in the Collateral pursuant
to this Security Agreement or for the execution, delivery or performance of
this Security Agreement by the Borrower.
(d) Authority. The Borrower has full power and authority to enter
into this Security Agreement and to grant a security interest in the Collateral
as provided by this Security Agreement.
(e) Enforceable Obligation. This Security Agreement has been duly
authorized, executed and delivered by the Borrower and constitutes a legal,
valid and binding obligation of the Borrower, enforceable against the Borrower
in accordance with its terms, except as such enforceability may be limited by
the effect of any applicable bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium or other similar laws affecting creditors' rights
generally or general principles of equity (whether considered at law or in
equity).
(f) No Conflict, etc. The execution, delivery and performance of
this Security Agreement by the Borrower and the consummation of the
transactions contemplated hereby will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under, any
agreement, indenture, mortgage, deed of trust, equipment lease, instrument or
other document to which the Borrower, the Guarantor or any of their respective
Subsidiaries is a party.
(g) Purchase Money Security Interest. The security interest granted
to the Collateral Agent in Collateral comprised of Base Station Equipment
(other than Base Station Equipment sold and reacquired by the Borrower as
contemplated by Section 5.12(c) of the Financing Agreement) pursuant to this
Security Agreement constitutes a "purchase money security interest" as defined
in the Uniform Commercial Code in effect on the date hereof in the State of New
York (without giving effect to any disposition and reacquisition of such Base
Station Equipment as contemplated by Section 5.12 of the Financing Agreement.
3
53
SECTION 4. COVENANTS OF THE BORROWER. During the term of this
Security Agreement, unless the Collateral Agent shall otherwise consent in
writing:
(a) Adverse Claims. The Borrower will defend the Collateral against
all claims and demands of all persons at any time claiming the same or any
interest therein unless both the Collateral Agent and the Borrower determine
that the claim or demand is not material and that, consequently, such defense
would not be consistent with good business judgment. The Borrower will not
permit any notice of any Lien with respect to the Collateral or any portion
thereof to exist or be on file in any public office, except for Permitted Liens
not otherwise waived or released in connection with the Financing Agreement.
(b) Changes Affecting Collateral. The Borrower will not (i) change
the location of its chief executive office from that listed in Section 3(a)
hereof; (ii) move or permit movement of any Collateral from the county or other
jurisdiction specified by the Borrower pursuant to Section 3.2(i)(b) or
3.2(iii)(a), as applicable, of the Financing Agreement with respect to such
Collateral or (iii) voluntarily or involuntarily change its identity or
corporate structure, unless in each case the Borrower shall have given the
Collateral Agent thirty (30) days prior written notice thereof and shall have
in advance executed and caused to be filed and/or delivered to the Collateral
Agent any financing statements or other documents required by the Collateral
Agent to maintain its fully-enforceable valid and perfected first-priority
security interest in all Collateral in accordance with Section 4(c) hereof, all
in form and substance satisfactory to the Collateral Agent.
(c) Further Assurances. The Borrower will, promptly upon request by
the Collateral Agent, execute and deliver or procure any document, give any
notices, execute and file any financing statements, mortgages or other
documents, all in form and substance reasonably satisfactory to the Collateral
Agent, xxxx any chattel paper, deliver any chattel paper or instruments to the
Collateral Agent and take any other actions that are necessary or, in the
opinion of the Collateral Agent, desirable to perfect or continue the
perfection and the first-priority of the Collateral Agent's security interest
in the Collateral, to protect the Collateral against the rights, claims or
interests of third persons or to effect the purposes of this Security
Agreement. The Borrower will pay all actual out-of-pocket costs and expenses
incurred in connection with any of the foregoing.
(d) Liens; Dispositions. Without the prior written consent of the
Collateral Agent, the Borrower will not in any way hypothecate or create or
permit to exist any Lien, security interest, charge or encumbrance on or other
interest in the Collateral, except for Permitted Liens not otherwise waived or
released in connection with the Financing Agreement, and the Borrower will not
sell, transfer, assign, pledge, collaterally assign, exchange or otherwise
dispose of the Collateral, except as expressly permitted by the Financing
Agreement (including Section 5.12 thereof) and this Security Agreement. If the
proceeds of any such sale are notes, instruments, documents of title, letters
of credit or chattel paper, such proceeds shall be promptly delivered to the
Collateral Agent to be held as Collateral hereunder. If the Collateral, or any
part thereof, is sold, transferred, assigned, exchanged, or otherwise disposed
of in violation of these provisions, the security interest of the Collateral
Agent shall continue in such Collateral or part
4
54
thereof notwithstanding such sale, transfer, assignment, exchange or other
disposition, and the Borrower will hold the proceeds thereof in a separate
account for the benefit of the Collateral Agent and the Lenders. Following
such a sale, the Borrower will transfer such proceeds to the Collateral Agent
in kind.
(e) Contractual Obligations. Except as expressly contemplated by
the Financing Documents, the Borrower will not enter into any contractual
obligations which may restrict or inhibit the Collateral Agent's legal rights
to sell or otherwise dispose of the Collateral or any part thereof after the
occurrence of an Event of Default (as hereinafter defined).
(f) Protection of Security Interest. Upon the occurrence and during
the continuance of an Event of Default (as hereinafter defined), the Collateral
Agent shall have the right at any time to do any acts the Collateral Agent may
deem necessary to protect its security interest in the Collateral, including,
without limitation, the rights to pay, purchase, contest or compromise any
encumbrance, charge or Lien which, in the judgment of the Collateral Agent,
appears to be prior to or superior to the security interest granted hereunder,
and appear in and defend any action or proceeding purporting to affect its
security interest in, and/or the value of, the Collateral. Without limiting
the generality of Section 9.7 of the Financing Agreement, the Borrower hereby
agrees to reimburse the Collateral Agent for all payments made and expenses
incurred under this Security Agreement including fees, expenses and
disbursements of attorneys and paralegals (including the allocated costs of
inside counsel) acting for the Collateral Agent, including any of the foregoing
payments under or acts taken to protect its security interest in the
Collateral, which amounts shall be secured under this Security Agreement, and
agrees that it shall be bound by any payment made or act taken by the
Collateral Agent hereunder absent the Collateral Agent's gross negligence or
willful misconduct. The Collateral Agent shall have no obligation to make any
of the foregoing payments or perform any of the foregoing acts.
(g) Taxes. The Borrower shall pay and discharge all taxes,
assessments and charges or levies against the Collateral prior to delinquency
thereof, and shall keep the Collateral free of all unpaid taxes, assessments
and charges (other than to the extent such unpaid taxes, assessments and
charges constitute Permitted Liens).
(h) Insurance. The Borrower, at its own expense, shall have and
maintain, or cause to be maintained, insurance at all times with respect to all
Collateral against such risks and liabilities, with such carriers and in such
amounts as the Collateral Agent may reasonably require. Such insurance shall
be payable to the Collateral Agent and to the Borrower as their interests may
appear, shall include a loss payee endorsement, and shall not be subject to
cancellation or reduction in coverage without thirty (30) days' prior written
notice to the Collateral Agent. The Borrower shall supply evidence of such
insurance to the Collateral Agent upon request.
(i) Inspection. The Collateral Agent shall have, at all times, with
reasonable prior notice (except after the occurrence and during the continuance
of an Event of Default (as hereinafter defined), when no notice shall be
required, the right to enter into and upon any premises where any of the
Collateral or records with respect thereto are located for the purpose
5
55
of inspecting the same, performing an audit, making copies of records,
observing the use of any part of the Collateral, protecting the Collateral
Agent's security interest in the Collateral, or otherwise determining whether
the Borrower is in compliance with the terms of this Security Agreement.
(j) Priority. The Borrower, at its own expense, will provide the
Collateral Agent with all information, filings and other documentation and
cooperation necessary to enable the Collateral Agent to comply with the
provisions of Section 9-312 of the applicable Uniform Commercial Code in order
to preserve the priority of the Collateral Agent's purchase money security
interest in the Collateral against the holders of conflicting security
interests in such Collateral, if any, it being understood by the Borrower that
such conflicting security interests may not be permitted hereunder or under the
Financing Agreement and may result in an Event of Default hereunder.
SECTION 5. EVENTS OF DEFAULT. The occurrence of any Default (as
defined in the Financing Agreement) shall constitute an event of default
("Event of Default") under this Security Agreement.
SECTION 6. REMEDIES UPON AN EVENT OF DEFAULT.
Upon the occurrence and during the continuance of an Event of
Default, the Collateral Agent may, in addition to the remedies provided for in
Article VIII of the Financing Agreement, without notice to or demand upon the
Borrower, do any one or more of the following:
(a) Exercise any or all of the rights and remedies provided for by
the applicable Uniform Commercial Code, specifically including, without
limitation, the right to recover the fees and expenses incurred by the
Collateral Agent in the enforcement of this Security Agreement or in connection
with the Borrower's redemption of the Collateral, including fees, expenses and
disbursements of attorneys and paralegals (including the allocated costs of
inside counsel).
(b) Require the Borrower to assemble the Collateral or any part
thereof and make it available at one or more places as the Collateral Agent may
reasonably designate and to deliver possession of the Collateral or any part
thereof to the Collateral Agent, who shall have full right to enter upon any or
all of the Borrower's premises and property to exercise the Collateral Agent's
rights hereunder.
(c) Use, manage, operate and control the Collateral in order to
preserve such Collateral or its value, including, without limitation, the
rights to take possession of all of the Collateral, to exclude any third
parties, whether or not claiming under the Borrower, from the Borrower's
premises and property, to make repairs, replacements, alterations, additions
and improvements to the Collateral, and to dispose of all or any portion of the
Collateral in the ordinary course of the Borrower's business.
6
56
(d) Use (and assign or license such right to use), in connection
with any repair, replacement, alteration, addition, improvement, assembly, use,
sale or disposition of the Collateral, any intellectual property (including,
without limitation, patents, copyrights, trademarks and service marks) or other
technical knowledge or process used or utilized from time to time by the
Borrower or within the power of the Borrower to license or sublicense.
(e) Enforce one or more remedies hereunder, successively or
concurrently, and such action shall not operate to estop or prevent the
Collateral Agent from pursuing any other or further remedy which it may have,
and any repossession or retaking or sale of the Collateral pursuant to the
terms hereof shall not operate to release the Borrower from its obligations
hereunder.
(f) In connection with any public or private sale under the
applicable Uniform Commercial Code (or the equivalent with respect to a
jurisdiction not subject to the Uniform Commercial Code), the Collateral Agent
shall give the Borrower at least fifteen (15) days' prior written notice of the
time and place of any public sale of the Collateral or of the time after which
any private sale or other intended disposition thereof may be made, which shall
be deemed to be reasonable notice of such sale or other disposition. Such
notice may be given to the Borrower in accordance with the provisions of
Section 11.1 hereof.
(g) Proceed by an action or actions at law or in equity to foreclose
this Security Agreement and sell the Collateral, or any portion thereof,
pursuant to a judgment or decree of a court or courts of competent
jurisdiction.
(h) If the Collateral Agent recovers possession of all or any part
of the Collateral pursuant to a writ of possession or other judicial process,
whether prejudgment or otherwise, the Collateral Agent may thereafter retain,
sell or otherwise dispose of such Collateral in accordance with this Security
Agreement or the applicable Uniform Commercial Code, and following such
retention, sale or other disposition, the Collateral Agent may voluntarily
dismiss without prejudice the judicial action in which such writ of possession
or other judicial process was issued. The Borrower hereby consents to the
voluntary dismissal by the Collateral Agent of such judicial action, and the
Borrower further consents to the exoneration of any bond that the Collateral
Agent files in such action.
SECTION 7. NO ASSUMPTION OF DUTIES; REASONABLE CARE. The rights and
powers granted to the Collateral Agent hereunder are being granted in order to
preserve and protect the Collateral Agent's security interest in and to the
Collateral granted hereby and shall not be interpreted to, and shall not,
impose any duties on the Collateral Agent in connection therewith other than
such duties as may be imposed by Article 9 of the Uniform Commercial Code and
other applicable laws and not expressly and validly waived hereunder. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equal to that which the Collateral Agent
accords its own property, it being understood that the Collateral Agent shall
not have any responsibility for (i) ascertaining or taking action with respect
to any matters relative to any Collateral, whether or not the Collateral Agent
has or is deemed to have
7
57
knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against any parties with respect to any Collateral.
SECTION 8. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Borrower
hereunder, shall be absolute and unconditional irrespective of, and unaffected
by:
(a) any lack of validity or enforceability of any Facility Document;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations, or any other amendment or
waiver of or any consent to any departure from any Facility Document;
(c) any exchange, surrender, release or non-perfection of any other
collateral, or any release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Obligations; or
(d) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of the
Obligations or of this Security Agreement.
SECTION 9. DISTRIBUTION OF PROCEEDS UPON EVENT OF DEFAULT. Upon the
sale or other disposition of any Collateral pursuant to Section 6 hereof, the
proceeds of such sale or other disposition shall be applied by the Collateral
Agent in the following order of priority:
(a) first, to the reasonable out-of-pocket costs and expenses of the
Collateral Agent incurred in connection with the performance of its duties
under this Security Agreement;
(b) second, to the Lenders pro rata based on their respective
Proportionate Shares until payment in full of all Obligations; and
(c) third, delivered to the Borrower.
For the avoidance of doubt, none of the proceeds of such sale or
other disposition shall be distributed to the Lenders pursuant to Section 9(b)
hereof until the Collateral Agent has received full payment for all expenses
incurred by it in connection with the performance of its duties under this
Security Agreement and none of the proceeds of such sale or other disposition
shall be distributed to the Borrower under Section 9(c) hereof until all of the
Obligations have been paid in full.
SECTION 10. THE COLLATERAL AGENT AS THE LENDERS' CONTRACTUAL
REPRESENTATIVE.
SECTION 10.1. Appointment of Collateral Agent. Each Lender hereby
designates HNS as Collateral Agent to act as herein specified. Each Lender
hereby irrevocably authorizes the
8
58
Collateral Agent to take such action on its behalf under the provisions of this
Security Agreement and any other instruments and agreements referred to herein
and to exercise such powers and to perform such duties hereunder and thereunder
as are specifically delegated to or required of the Collateral Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto. The Collateral Agent shall hold all Collateral and proceeds from the
Collateral for the benefit of itself and the Lenders to be distributed as
provided herein. The Collateral Agent may perform any of its duties hereunder
by or through its agents or employees.
SECTION 10.2. Nature of Duties of Collateral Agent. The Collateral Agent
shall have no duties or responsibilities except those expressly set forth in
this Security Agreement. Neither the Collateral Agent nor any of its officers,
directors, employees or agents shall be liable to the Lenders for any action
taken or omitted by it as such hereunder or in connection herewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Collateral Agent shall be mechanical and administrative in nature, and the
Collateral Agent shall not have by reason of this Security Agreement a
fiduciary relationship in respect of any Lender.
SECTION 10.3. Lack of Reliance on Collateral Agent. The Collateral Agent
shall not be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this Security
Agreement, the Financing Agreement or the Notes or the existence or possible
existence of any Event of Default, unless any Lender specifically requests the
Collateral Agent to do so in writing.
SECTION 10.4. Certain Rights of the Collateral Agent. The Collateral
Agent shall have the right to request instructions from the Majority Lenders at
any time. If the Collateral Agent shall request instructions from the Majority
Lenders with respect to any act or action (including the failure to act) in
connection with this Security Agreement, the Collateral Agent shall be entitled
to refrain from such act or taking such action unless and until the Collateral
Agent shall have received instructions from the Majority Lenders, and the
Collateral Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender shall have any right of
action whatsoever against the Collateral Agent as a result of the Collateral
Agent acting or refraining from acting hereunder in accordance with the
instructions of the Majority Lenders.
SECTION 10.5. Reliance by Collateral Agent. The Collateral Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Collateral
Agent may consult with legal counsel (including counsel for the Borrower with
respect to matters concerning the Borrower), independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts.
SECTION 10.6. Indemnification of Collateral Agent. To the extent the
Collateral Agent is not reimbursed and indemnified by the Borrower, each Lender
will reimburse and indemnify
9
59
the Collateral Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including counsel fees and disbursements) or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder, in any way relating to or
arising out of this Security Agreement, provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Collateral Agent's gross negligence or willful misconduct.
SECTION 10.7. The Collateral Agent in its Individual Capacity . With
respect to its obligation as a Lender under this Security Agreement, the
Collateral Agent shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it was not performing the duties
specified herein; and the term "Lenders" or any similar term shall, unless the
context clearly otherwise indicates, include the Collateral Agent in its
individual capacity as a Lender. The Lenders acknowledge that HNS is the
seller of the Base Station Equipment to the Borrower and has engaged in certain
other business transactions with the Borrower and other Geotek Affiliates and
agree that the Collateral Agent may lend money to, acquire equity interests in,
and generally engage in any kind of financial advisory or other business with
the Borrower or any other Geotek Affiliate as if it were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Security Agreement and otherwise
without having to account for the same to the Lenders.
SECTION 10.8. Successor Collateral Agent.
(a) The Collateral Agent may, upon five (5) Business Days' notice to
the Lenders and the Borrower, resign at any time (effective upon the
appointment of a successor collateral agent pursuant to the provisions of
this Section 10.8) by giving written notice thereof to the Lenders and the
Borrower. Upon any such resignation, the Majority Lenders shall have the
right, upon five (5) days' notice and approval by the Borrower (which
approval shall not be unreasonably withheld), to appoint a successor
collateral agent. If no successor collateral agent (i) shall have been so
appointed by the Majority Lenders, and (ii) shall have accepted such
appointment, within thirty (30) days after the Collateral Agent's giving
of notice of resignation, then, upon five (5) days' notice, the Collateral
Agent may, on behalf of the Lenders, appoint a successor collateral agent.
(b) Upon the acceptance of any appointment as collateral agent
hereunder by a successor collateral agent, such successor collateral agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the Collateral Agent, all references in this
Security Agreement to "Collateral Agent" shall refer to such successor
collateral agent and the Collateral Agent shall be discharged from its
duties and obligations under this Security Agreement. After the
Collateral Agent's resignation hereunder as collateral agent, the
provisions of Section 10 hereof shall continue to inure to its benefit as
to any actions taken or omitted to be taken by it while it was Collateral
Agent under this Security Agreement.
10
60
(c) In the event of a material breach by the Collateral Agent of its
duties hereunder, the Collateral Agent may be removed by the Majority
Lenders for cause and the provisions of this Section 10.8 shall apply to
the appointment of a successor collateral agent.
SECTION 10.9. Collateral Matters.
(a) The Collateral Agent is hereby authorized on behalf of all of
the Lenders, without the necessity of any notice to or further consent
from any Lender, from time to time prior to an Event of Default, to take
any action with respect to any Collateral which may be necessary to
perfect and maintain perfected the security interest in and Liens upon the
Collateral.
(b) The Lenders hereby authorize the Collateral Agent to, and the
Collateral Agent shall, release any Lien granted to or held by the
Collateral Agent upon any Collateral (i) upon the payment and satisfaction
of all of the Obligations, (ii) constituting property being sold or
disposed of in conformance with the requirements of the Financing
Agreement and this Security Agreement (provided that the proceeds of such
sale are applied or pledged as required therein and herein) or (iii) if
approved, authorized or ratified in writing by the Majority Lenders. Upon
request by the Collateral Agent at any time, the Lenders will confirm in
writing the Collateral Agent's authority to release particular types or
items of Collateral pursuant to this Section 10.9.
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of the Financing Agreement or this
Security Agreement or consented to in writing by the Majority Lenders, and
upon at least five (5) Business Days' prior written request by the
Borrower, the Collateral Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary to evidence
the release of the Liens granted to the Collateral Agent for its benefit
and the benefit of the Lenders herein or pursuant hereto upon the
Collateral that was sold or transferred; provided that (i) the Collateral
Agent shall not be required to execute any such document on terms which,
in the Collateral Agent's opinion, would expose the Collateral Agent or
the Lenders to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty and (ii) such release shall not in any manner discharge, affect
or impair the Obligations or any Liens upon all interests retained by the
Borrower, including (without limitation) the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. In the event
of any sale or transfer of Collateral, or any foreclosure with respect to
any of the Collateral, the Collateral Agent shall be authorized to deduct
all of the expenses reasonably incurred by the Collateral Agent from the
proceeds of any such sale, transfer or foreclosure.
(d) The Collateral Agent shall have no obligation whatsoever to the
Lenders or to any other Person to assure that the Collateral exists or is
owned by the Borrower or is cared for, protected or insured or that the
Liens granted to the Collateral Agent herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising
11
61
at all or in any manner or under any duty of care, disclosure or fidelity
any of the rights, authorities and powers granted or available to the
Collateral Agent in this Section 10.9, it being understood and agreed that
in respect of the Collateral, or any act, omission or event related
thereto, the Collateral Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Collateral Agent's own
interest in the Collateral as one of the Lenders and that the Collateral
Agent shall have no duty or liability whatsoever to the Lenders, except
for its gross negligence or willful misconduct.
SECTION 10.10. Actions with Respect to Events of Default. The Collateral
Agent shall take such action with respect to an Event of Default as shall be
directed by the Majority Lenders; provided that until the Collateral Agent
shall have received such directions, the Collateral Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as it shall deem advisable and in the best
interests of the Lenders.
Any amendment or waiver of any provision of this Security Agreement
and any consent to any departure by the Borrower from any provision of this
Security Agreement shall be effected by the Collateral Agent pursuant to
Section 11.4 hereof and only upon the written authorization of the Majority
Lenders.
SECTION 10.11. Delivery of Information. The Collateral Agent shall not be
required to deliver to any Lender originals or copies of any documents,
instruments, notices, communications or other information received by the
Collateral Agent from the Borrower, the Majority Lenders, any Lender or any
other Person under or in connection with this Security Agreement except (i) as
specifically provided in this Security Agreement and (ii) as specifically
requested from time to time in writing by any Lender with respect to a specific
document, instrument, notice or other written communication received by and in
the possession of the Collateral Agent at the time of receipt of such request
and then only in accordance with such specific request.
SECTION 11. MISCELLANEOUS PROVISIONS.
SECTION 11.1. Notices. All notices, approvals, consents or other
communications required or desired to be given hereunder shall be in the form
and manner, and delivered to each of the parties hereto at their respective
addresses, set forth in Article X of the Financing Agreement or Article XI of
the Loan Agreement, as applicable.
SECTION 11.2. Headings. Section headings in this Security Agreement are
for convenience of reference only, and shall not govern the interpretation of
any of the provisions of this Security Agreement.
SECTION 11.3. Severability. Any provision in this Security Agreement
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
12
62
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of this Security
Agreement are declared to be severable.
SECTION 11.4. Amendments, Waivers and Consents. No delay or omission of
the Collateral Agent to exercise any right under this Security Agreement shall
impair such right or be construed to be a waiver of any Event of 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 this Security Agreement whatsoever shall be valid unless in
writing signed by the Collateral Agent, and then only to the extent in such
writing specifically set forth. All remedies contained in this Security
Agreement or by law afforded shall be cumulative and all shall be available to
the Collateral Agent, for the benefit of the Lenders, until the Obligations
have been paid in full.
SECTION 11.5. Interpretation of Agreement. Time is of the essence in
each provision of this Security Agreement of which time is an element. All
terms not defined herein or in the Financing Agreement shall have the meaning
set forth in the applicable Uniform Commercial Code, except where the context
otherwise requires. To the extent a term or provision of this Security
Agreement conflicts with the Financing Agreement and is not dealt with herein
with more specificity, the Financing Agreement shall control with respect to
the subject matter of such term or provision. Acceptance of or acquiescence in
a course of performance rendered under this Security Agreement shall not be
relevant in determining the meaning of this Security Agreement even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.
SECTION 11.6. Continuing Security Interest; Transfer of Notes. This
Security Agreement shall create a continuing security interest in the
Collateral and shall (i) remain in full force and effect until payment in full
of the Obligations, (ii) be binding upon the Borrower, its successors and
assigns, and (iii) inure to the benefit of the Collateral Agent, the Lenders
and their respective successors, transferees and assigns. Without limiting the
generality of clause (iii), above, any Lender may, except as limited by the
express terms of the Financing Agreement or the Notes, assign or otherwise
transfer any Note held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
such Lender herein or otherwise.
SECTION 11.7. Reinstatement. To the extent permitted by law, this
Security Agreement shall continue to be effective or be reinstated, as the case
may be, if at any time any amount received by the Collateral Agent or any
Lender in respect of the Obligations is rescinded or must otherwise be restored
or returned by such Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or upon the appointment of any
receiver, intervenor, conservator, trustee or similar official for the Borrower
or any substantial part of its assets, or otherwise, all as though such
payments had not been made.
SECTION 11.8. Survival of Provisions. All representations, warranties
and covenants of the Borrower contained herein shall survive the execution and
delivery of this Security
13
63
Agreement, and shall terminate only upon the full and final payment and
performance by the Borrower of the Obligations secured hereby.
SECTION 11.9. Power of Attorney. The Borrower hereby irrevocably
appoints and constitutes the Collateral Agent, or any Person or agent the
Collateral Agent may designate, as the Borrower's attorney-in-fact to exercise
all of the following powers upon the occurrence and during the continuance of
an Event of Default (as defined in Section 5 hereof): (i) collection of
proceeds of any Collateral; (ii) conveyance of any item of Collateral to any
purchaser thereof; (iii) giving of any notices or recording of any Liens
hereunder; (iv) making of any payments or taking any acts hereunder and (v)
paying or discharging taxes or Liens levied or placed upon or threatened
against the Collateral, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Collateral Agent in its
sole discretion, and such payments made by the Collateral Agent to become the
obligations of the Borrower to the Collateral Agent, due and payable
immediately without demand. The Collateral Agent's authority hereunder shall
include, without limitation, the authority to endorse and negotiate, for the
Collateral Agent's own account, any checks or instruments in the name of the
Borrower, execute and give receipt for any certificate of ownership or any
document, transfer title to any item of Collateral, sign the Borrower's name on
all financing statements or any other documents deemed necessary or appropriate
to preserve, protect or perfect the security interest in the Collateral and to
file the same, prepare, file and sign the Borrower's name on any notice of
Lien, and prepare, file and sign the Borrower's name on a proof of claim in
bankruptcy or similar document against any creditor of the Borrower, and to
take any other actions arising from or incident to the powers granted to the
Collateral Agent in this Security Agreement. This power of attorney is coupled
with an interest and is irrevocable by the Borrower.
SECTION 11.10. Authority of the Collateral Agent; Indemnification. The
Collateral Agent shall have and be entitled to exercise all powers hereunder
which are specifically granted to the Collateral Agent by the terms hereof,
together with such powers as are reasonably incident thereto. The Collateral
Agent may perform any of its duties hereunder or in connection with the
Collateral by or through agents or employees and shall be entitled to retain
counsel and to act in reliance upon the advice of counsel concerning all such
matters. Neither the Collateral Agent nor any Lender, nor any director,
officer, employee, attorney or agent of the Collateral Agent or any Lender
shall be liable to the Borrower for any action taken or omitted to be taken by
it or them hereunder, except for its or their own gross negligence or willful
misconduct, nor shall the Collateral Agent be responsible for the validity,
effectiveness or sufficiency of this Security Agreement or of any document or
security furnished pursuant hereto. The Collateral Agent and its directors,
officers, employees, attorneys and agents shall be entitled to rely on any
communication, instrument or document reasonably believed by it or them to be
genuine and correct and to have been signed or sent by the proper Person or
Persons. The Borrower agrees to indemnify and hold harmless the Collateral
Agent and its officers, directors, employees and agents from and against any
and all costs, expenses (including reasonable fees, expenses and disbursements
of attorneys and paralegals), claims and liabilities incurred by the Collateral
Agent (in its capacity as Collateral Agent) or such officers, directors,
employees and agents (in each case in their capacity as such) hereunder as a
result of the Borrower's actions, breach or assertion of a defense hereunder or
under the other Financing Documents, unless such claim or
14
64
liability shall be due to willful misconduct or gross negligence on the part of
the Collateral Agent or such Person, as applicable.
SECTION 11.11. Release; Termination of Agreement. Subject to the
provisions of Section 11.8 hereof, this Security Agreement shall terminate upon
full and final payment and performance of all the Obligations. At such time,
the Collateral Agent shall, at the request and expense of the Borrower,
promptly reassign and redeliver to the Borrower all of the Collateral hereunder
which has not been sold, disposed of, retained or applied by the Collateral
Agent, for its benefit and the benefit of the Lenders, in accordance with the
terms hereof. Such reassignment and redelivery shall be without warranty by or
recourse to the Collateral Agent, except as to the absence of any prior
assignments by the Collateral Agent of its interest in the Collateral, and
shall be at the expense of the Borrower.
SECTION 11.12. Counterparts. This Security Agreement may be executed in
any number of counterparts, all of which taken together shall constitute one
agreement, and any of the parties hereto may execute this Security Agreement by
signing any such counterpart.
SECTION 11.13. SUBMISSION TO JURISDICTION; WAIVERS. THE BORROWER AND THE
GUARANTOR EACH HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS SECURITY AGREEMENT, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE NON-EXCLUSIVE GENERAL
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE COURTS OF THE UNITED
STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS
FROM ANY THEREOF;
(b) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING MAY BE BROUGHT IN
SUCH COURTS AND WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT SUCH ACTION OR
PROCEEDING WAS BROUGHT IN AN INCONVENIENT FORUM AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(c) 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 BORROWER AT
ITS ADDRESS SET FORTH BELOW OR AT SUCH OTHER ADDRESS OF WHICH THE COLLATERAL
AGENT SHALL HAVE BEEN NOTIFIED PURSUANT HERETO;
(d) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE COLLATERAL AGENT OR ANY OF THE LENDERS TO COMMENCE LEGAL
PROCEEDINGS AGAINST THE BORROWER OR ITS PROPERTY IN ANY OTHER JURISDICTION;
15
65
(e) WAIVES ALL RIGHTS OF NOTICE AND HEARING OF ANY KIND PRIOR TO THE
EXERCISE BY THE COLLATERAL AGENT OR ANY OF THE LENDERS OF THEIR RIGHTS FROM AND
AFTER AN EVENT OF DEFAULT TO REPOSSESS THE COLLATERAL WITH JUDICIAL PROCESS OR
TO REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL. THE BORROWER WAIVES THE
POSTING OF ANY BOND OTHERWISE REQUIRED OF THE COLLATERAL AGENT OR ANY OF THE
LENDERS IN CONNECTION WITH ANY JUDICIAL PROCESS OR PROCEEDING TO OBTAIN
POSSESSION OF, REPLEVY, ATTACH OR LEVY UPON THE COLLATERAL, TO ENFORCE ANY
JUDGMENT OR OTHER SECURITY FOR THE OBLIGATIONS, TO ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER OR PRELIMINARY OR PERMANENT
INJUNCTION, THIS SECURITY AGREEMENT, OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN
THE BORROWER AND ANY SUCH PARTY.
(f) WAIVES THE RIGHT TO ASSERT ANY SETOFF, COUNTERCLAIM OR
CROSS-CLAIM IN RESPECT OF, AND ALL STATUTES OF LIMITATIONS WHICH MAY BE
RELEVANT TO, SUCH ACTION OR PROCEEDING; AND
(g) WAIVES DUE DILIGENCE, DEMAND, PRESENTMENT AND PROTEST AND ANY
NOTICES THEREOF AS WELL AS NOTICE OF NONPAYMENT.
SECTION 11.14. JURY TRIAL. THE BORROWER, THE COLLATERAL AGENT AND THE
LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
SECTION 11.15. GOVERNING LAW. THIS SECURITY 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.
[SIGNATURE PAGE FOLLOWS]
16
66
IN WITNESS WHEREOF, the undersigned has caused this Security
Agreement to be duly executed and delivered as of the day and year first above
written.
Borrower:
GEOTEK FINANCING CORPORATION
By:
--------------------------------------
Title:
-----------------------------------
Address: c/o Geotek Communications, Inc.
00 Xxxxx Xxxx
Xxxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Collateral Agent:
XXXXXX NETWORK SYSTEMS, INC.,
as Collateral Agent
By:
--------------------------------------
Title:
-----------------------------------
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telecopy No.: (000) 000-0000
With respect to Section 10 only:
Lender
XXXXXX NETWORK SYSTEMS, INC.
By:
--------------------------------------
Title:
-----------------------------------
Address: 00000 Xxxxxxx Xxxxxx Xxxxx
Xxx Xxxxx, XX 00000
Telecopy No.: (000) 000-0000
