As filed with the Securities and Exchange Commission on November 22, 1995
Registration File No. 33-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
GEOTEK COMMUNICATIONS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or organization)
22-2358635
(I.R.S. Employer Identification Number)
20 Craig Road
Montvale, New Jersey 07645
(201) 930-9305
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
Andrew Siegel, Esq.
General Counsel and Secretary
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
(201) 930-9305
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
------------------------------
With a copy to:
Wayne D. Bloch, Esq.
William W. Matthews, III, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
(215) 568-6060
------------------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
------------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_| ____________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. |_| ____________
<PAGE>
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. |_|
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
Form of Prospectus included herein also relates to the securities registered
under the Registrant's Registration Statement on Form S-3 (File No. 33-85296)
declared effective on June 27, 1995 and the Registrant's registration statement
on Form S-3 (File No. 33-62075) declared effective on September 8, 1995, is
intended for use in connection therewith, and constitutes a post-effective
amendment thereto.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================================================================
Proposed Maximum Amount of
Title Of Shares Amount to Be Proposed Maximum Aggregate Offering Registration
To Be Registered Registered Price Per Unit Price Fee
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<S> <C> <C> <C> <C>
Common Stock, par value 338,028(1) $7.00(2) $2,366,196.00(2) $815.93
$.01 per share shares
================================================================================================================================
</TABLE>
(1) In addition to the 338,028 shares of Common Stock registered hereunder
in respect of which a registration fee is payable in accordance with
the calculation set forth in this table, pursuant to Rule 429 under the
Securities Act of 1933, the Form of Prospectus included herein also
relates to the Common Stock and the Warrants to acquire Common Stock
previously registered under the Registrant's registration statements
on Form S-3 (File No. 33-85296 and File No. 33-62075) declared
effective on June 27, 1995 and September 8, 1995, respectively. A
registration fee was previously paid in connection with the filing of
each such prior Registration Statement to which the Form of Prospectus
included herein relates.
(2) Based on the closing sale price of the Registrant's Common Stock as
reported on The Nasdaq National Market ("NNM") on November 17, 1995.
Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
SUBJECT TO COMPLETION, DATED NOVEMBER 22, 1995
PROSPECTUS
GEOTEK COMMUNICATIONS, INC.
Issuance and Sale to Certain Selling Shareholders of up to $36,000,000
of Common Stock issuable upon conversion of Convertible Notes (the
"Note Shares"), Issuance and Sale of 1,000,000 Shares
of Common Stock issuable upon exercise of Warrants (the "Warrant
Shares"), Resale by Certain Selling Shareholders of the Note
Shares, the Warrant Shares and Warrants to Acquire the Warrant
Shares, Resale by Certain Selling Shareholders of 1,223,684
Shares of Common Stock issuable upon conversion of
Series M Cumulative Convertible Preferred Stock
And Resale by a Certain Selling Shareholder
of 338,028 Shares of Common Stock
This Prospectus concerns the issuance and sale to certain Selling
Shareholders (as described herein), from time to time, of up to an aggregate of
$36,000,000 of the common stock, par value $.01 per share (the "Common Stock"),
of Geotek Communications, Inc., a Delaware corporation ("Geotek" or the
"Company"), upon the conversion of senior secured convertible notes, due March
1998, in the aggregate principal amount of $36,000,000, issued by the Company to
certain Selling Shareholders on March 30, 1995 (the "March 1995 Notes"). The
March 1995 Notes are convertible into Common Stock in accordance with an
incremental conversion schedule beginning on September 30, 1995. See "Selling
Shareholders and Related Information." All shares of Common Stock issuable upon
conversion of the March 1995 Notes are hereinafter referred to as the "Note
Shares."
This Prospectus also concerns the issuance and sale to holders of the
Warrants (as hereinafter defined), from time to time, of up to an aggregate of
1,000,000 shares of Common Stock issuable upon exercise of such Warrants. All
shares of Common Stock issuable upon exercise of the Warrants are hereinafter
referred to as the "Warrant Shares."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of the Note Shares and the Warrant Shares.
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of Warrants issued by the Company to such
Selling Shareholders in connection with their purchase of the March 1995 Notes
and certain other notes issued by the Company on June 15, 1994 (the "June 1994
Notes"). The Warrants consist of 700,000 Common Stock purchase warrants issued
by the Company to such Selling Shareholders with an exercise price of $8.125 per
share of Common Stock (the "$8.125 Warrants") in connection with the sale of the
March 1995 Notes and 300,000 Common Stock purchase warrants issued by the
Company to such Selling Shareholders with an exercise price of $7.875 per share
of Common Stock (the "$7.875 Warrants") in connection with the sale of the June
1994 Notes. Each of the Warrants may be exercised, from time to time, at any
time during the period beginning on the date of issuance by the Company and
ending on the five-year anniversary thereof. The $8.125 Warrants and the $7.875
Warrants are hereinafter collectively referred to as the "Warrants."
This Prospectus also concerns the offer and sale by certain Selling
Shareholders, from time to time, of 1,223,684 shares of Common Stock issuable
upon the conversion of 1,162.5 shares of Series M Cumulative Convertible
Preferred Stock, par value $.01 per share (the "Series M Preferred Stock"). The
Series M Preferred Stock was issued by the Company to such Selling Shareholders
on June 1, 1995. Each share of Series M Preferred Stock is immediately
convertible into the number of shares of Common Stock as is determined by
dividing (i) the sum of the $10,000 stated value per share of Series M Preferred
Stock plus all unpaid dividends accrued and deemed to have accrued, if any, with
respect to such shares of Series M Preferred Stock through the last dividend
payment date by (ii) a conversion price of $9.50 per share, subject to certain
adjustments. See "Selling Shareholders and Related Information." Assuming there
are no accrued and unpaid dividends on the Series M Preferred Stock at the time
of conversion, the Series M Preferred Stock is convertible into an aggregate of
1,223,684 shares of Common Stock. The shares of Common Stock issuable upon
conversion of the Series M Preferred Stock are hereinafter referred to as the
"Series M Shares."
This Prospectus also concerns the resale by a certain Selling
Shareholder, from time to time, of 338,028 shares of Common Stock issued to such
Selling Shareholder on October 31, 1995 (the "RDC Offered Shares"). The Note
Shares, the Warrants Shares, the Series M Shares and the RDC Offered Shares are
hereinafter collectively referred to as the "Shares."
For information regarding the Selling Shareholders, see "Selling
Shareholders and Related Information."
The Company's Common Stock is listed on the NASDAQ National Market
("NNM") under the symbol "GOTK" and on the Pacific Stock Exchange ("PSE") under
the symbol "GEO." On November 17, 1995, the closing sale price for the Company's
Common Stock, as quoted on the NNM, was $7.00 per share.
It is presently anticipated that sales of Shares by the Selling
Shareholders hereunder will be effected, from time to time, (i) in ordinary
transactions on the PSE; (ii) through dealers or in ordinary broker transactions
on the NNM or otherwise; (iii) "at the market" to or through market makers or
into an existing market for the Shares; (iv) in other ways not involving market
makers or established trading markets, including direct sales to purchasers or
sales effected through agents; (v) through transactions in options (whether
exchange-listed or otherwise); or (vi) in combinations of any such methods of
sale. The Shares held by the Selling Shareholders will be sold at market prices
prevailing at the time of sale or at negotiated prices. There is currently no
established trading market for the Warrants, and it is uncertain whether
<PAGE>
there will ever be a trading market for the Warrants. It is not presently
anticipated that the Warrants will be listed for trading on the PSE, the NNM or
otherwise. As a result, it is presently anticipated that sales of Warrants by
the Selling Shareholders will be effected, from time-to-time, in ways not
involving market makers or established trading markets, including direct sales
to purchasers or sales effected through agents, at negotiated prices. If at any
time the Warrants are listed for trading on the PSE, the NNM or otherwise, sales
of the Warrants could be effected in the same manner in which sales of Shares
are effected. The Shares and Warrants held by the Selling Shareholders may also
be sold hereunder by brokers, dealers, banks or other persons or entities who
receive such Shares and Warrants as a pledgee of the Selling Shareholders. The
Selling Shareholders and brokers and dealers through whom sales of Shares or
Warrants may be effected may be deemed to be "underwriters," as defined under
the Securities Act of 1933 (the "Securities Act"), and any profits realized by
them in connection with the sale of the Shares or Warrants may be considered to
be underwriting compensation. Notwithstanding the registration of the offer and
sale of the Warrants and Warrant Shares to subsequent purchasers of the
Warrants, Selling Shareholders to whom the Warrants were initially issued by the
Company, whether or not affiliates of the Company, that acquire Warrant Shares
upon exercise of the Warrants shall be required to deliver this Prospectus in
accordance with the Securities Act in connection with any transaction involving
the resale of such Warrant Shares.
------------------------------------
THE SECURITIES OFFERED HEREBY ARE HIGHLY SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4 HEREOF.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
================================================================================================================================
Price Underwriting Discounts Proceeds to Proceeds to the
to Public and Commissions the Company Selling Shareholders
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share......... $(1)(2) $(1)(2) $0(3)(4) $(1)(5)
- --------------------------------------------------------------------------------------------------------------------------------
Total.............. $(1)(2) $(1)(2) $0(3)(4) $(1)(5)
================================================================================================================================
</TABLE>
(1) The Note Shares registered for issuance and sale hereunder will be
issued and sold to the Selling Shareholders upon conversion of the
March 1995 Notes at conversion prices equal to 87.5% of the weighted
average of the sales prices of Common Stock on the trading day next
preceding the date of conversion. The Warrant Shares registered for
issuance and sale hereunder will be issued and sold to holders of the
Warrants upon exercise of the Warrants at an exercise price of $8.125,
in the case of the $8.125 Warrants, and $7.875, in the case of the
$7.875 Warrants. It is anticipated that the Shares registered for
resale hereunder will be sold by the Selling Shareholders in market or
private transactions at prevailing prices, from time to time. It is
anticipated that the Warrants registered for resale hereunder will be
sold by the Selling Shareholders in transactions not involving
established trading markets at negotiated prices, from time to time.
(2) No underwriting discounts or commissions are payable in connection
with the issuance of the Note Shares or the Warrant Shares.
(3) Upon issuance of the Note Shares in connection with the conversion of
the March 1995 Notes, the principal amounts otherwise payable by the
Company under the March 1995 Notes, up to $36,000,000 in the aggregate,
will be satisfied. The aggregate gross proceeds to the Company from the
issuance and sale of the Warrant Shares will be $8,050,000.
(4) The Company will not receive any proceeds from the resale of Shares
or Warrants by the Selling Shareholders.
(5) The Company will pay all expenses of the offering of the Shares and
Warrants to which this Prospectus relates, other than, in connection
with the resales of Shares and Warrants by the Selling Shareholders,
any underwriting or broker-dealer discounts or commissions agreed to be
paid by the Selling Shareholders.
------------------------------------
The Date of this Prospectus is _________________, 1995
-2-
<PAGE>
ADDITIONAL INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices located at 7 World Trade Center, New York, NY 10048, and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed rates
from the Public Reference Section of the Commission, Washington, D.C. 20549. The
Company's Common Stock is listed on both the NNM and the PSE and such reports,
proxy statements and other information filed with the Commission should also be
available for inspection at the offices of the National Association of
Securities Dealers, Inc., Report Section, 1735 K Street, N.W., Washington, D.C.
20006, and at the PSE facilities located at 115 Sansome Street, San Francisco,
California.
The Company has filed with the Commission a registration statement on
Form S-3 under the Securities Act with respect to the securities offered hereby
(such registration statement, together with all exhibits thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus does not contain
all the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the
Commission. For further information with respect to the Company and the
securities offered hereby, reference is hereby made to the Registration
Statement. Statements contained in this Prospectus as to the contents of any
document filed with, or incorporated by reference in, the Registration Statement
are not necessarily complete, and in each instance are qualified in all respects
by such reference.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company incorporates by reference into this Prospectus the
documents listed below:
(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1994 (as amended on Form 10-K/A#1 filed on or about April 28, 1995,
Form 10-K/A#2 filed on or about May 26, 1995 and Form 10-K/A#3 filed on or about
September 26, 1995);
(2) The Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended March 31, 1995, June 30, 1995 (as amended by Form 10-Q/A filed on
or about September 26, 1995) and September 30, 1995;
(3) The Company's Current Reports on Form 8-K, dated June 18, 1993 (as
amended on Form 8-K/A filed on or about July 12, 1993), June 8, 1994 (as amended
on Form 8-K/A filed on or about June 27, 1995), July 5, 1994 (as amended on Form
8-K/A filed on or about September 14, 1994), August 2, 1994 (as amended on Form
8-K/A filed on or about October 13, 1994 and Form 8-K/A filed on or about May
25, 1995), February 27, 1995, May 26, 1995, July 6, 1995, July 31, 1995 and
August 24, 1995; and
(4) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A, dated December 15, 1992.
All reports and other documents filed by the Company pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date
of this Prospectus and prior to the filing of a post-effective amendment to the
Registration Statement which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold, shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of the filing of such reports and documents. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for all purposes to the extent that a statement contained herein or
in any other subsequently filed document which also is incorporated by reference
herein modifies or supersedes such statement. Any statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The Company hereby undertakes to provide, without charge, to each
person to whom a copy of this Prospectus has been delivered, upon the written or
oral request of such person, a copy of all documents incorporated by reference
in this Prospectus, other than exhibits to such documents unless such exhibits
are specifically
-3-
<PAGE>
incorporated by reference herein. Requests for such copies should be directed to
Corporate Secretary, Geotek Communications, Inc., 20 Craig Road, Montvale, New
Jersey 07645; telephone number (201) 930-9305.
The Company will furnish its shareholders with annual reports
containing audited financial statements and reports by independent accountants.
In addition, the Company will distribute unaudited quarterly reports to its
shareholders for the first three quarters of each fiscal year.
ADDRESS AND TELEPHONE NUMBER
The mailing address and telephone number of the Company's principal
executive offices are as follows:
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Telephone Number: (201) 930-9305
RISK FACTORS
The securities described herein involve a substantial degree of risk.
Prospective purchasers should carefully consider, among other things, the
following factors:
Commercial Implementation of GEONET(TM)
The Company's current business plan contemplates the commercial
implementation of GEONET in 36 target markets in the United States by the end of
1997. In each of these markets, the Company expects to gradually add subscribers
and increase its service offerings. The Company expects to continue to generate
negative cash flow in each of its target markets until it achieves an adequate
subscriber base in such market.
The successful and timely implementation of GEONET will depend upon a
number of factors, many of which are beyond the control of the Company,
including, but not limited to, the timely and cost-effective manufacture,
construction and integration of the system infrastructure and software, the
acquisition and control of additional radio spectrum, the procurement and
preparation of base station and remote sites, the receipt of all necessary
regulatory approvals, the establishment of effective sales and marketing
organizations and distribution channels and the need for substantial additional
financing. See "- Dependence on Third Party Providers," "- Need for Spectrum;
Need for Transmission Sites," "- Government Regulation" and "- Need for
Additional Financing." The failure or delay with respect to any of these items
could adversely affect the timing of the implementation of GEONET in one or more
of the Company's U.S. target markets, which could have a material adverse effect
on the Company.
The Company will make continuing hardware and software modifications to
GEONET prior to, during and after the system's commercial roll-out. For example,
the Company must integrate the initial GEONET data applications, which are
expected to be completed in the middle of 1996, with the initial GEONET voice
applications. Subsequent applications also will need to be integrated with
existing GEONET applications. There can be no assurance that the Company will be
able to satisfactorily complete such modifications and/or integration efforts,
or that they will be able to be completed in a manner that enables the Company
to offer its GEONET services on a profitable basis. A failure by the Company to
satisfactorily complete any such modifications or integration efforts or to
complete them on a cost-effective basis could have a material adverse effect on
the Company.
To date, no other wireless service provider has been successful at
providing the level of integrated voice and data services contemplated by the
Company. Accordingly, in implementing GEONET, the Company may encounter
unforeseen technical issues. In addition, each of the Company's U.S. target
markets is expected to present unique technical issues to the Company due to
differences in geography and the level of local development. Technical
difficulties in the operation and/or performance of GEONET also may be
experienced as additional subscribers are added to the system in a given market
or as the coverage area in any market is increased. There can be no assurance
that the Company will be able to adequately address any such issues in any given
market or that such issues will be able to be addressed in a cost-effective
manner. Any failure by the Company to adequately
-4-
<PAGE>
address such issues or to address them in a cost-effective manner could have a
material adverse effect on the Company.
Limited Operating History; Management of Growth
The Company entered the wireless communications industry in 1992 and,
therefore, has limited experience in developing, establishing and operating
wireless communications systems. To date, most of the Company's wireless
communications services experience has been in foreign markets and has involved
different technology than that to be employed by the Company in its U.S. target
markets. In addition, the Company's only experience to date in the United States
with respect to its digital wireless communications services has been testing
GEONET in Philadelphia and, beginning in August 1995, providing wireless
communication services to customers in Philadelphia. Prospective investors,
therefore, have limited historical financial information about the Company on
which to make a determination as to the prospects for the Company's U.S.
wireless communications operations or financial condition and as to an
investment in the Shares and Warrants offered hereby.
Although the Company has added experienced senior management and has
filled a substantial number of sales and field service positions during the last
year, the Company will need to rapidly and significantly increase the number of
technical, sales, management and administrative personnel that it employs as the
roll-out of GEONET progresses. The Company's success will depend upon its
ability to continue to attract, motivate, train and manage additional employees.
Management's ability to manage the Company's growth effectively also will
require it to significantly expand its operational, financial and management
systems. The failure of the Company to manage its growth effectively would have
a material adverse effect on the Company's future operations.
Need for Spectrum; Need for Transmission Sites
The Company will require additional spectrum to add capacity and to
service anticipated demand in certain of its target markets, including in
certain of its 1995 and 1996 markets. The Company also requires additional
spectrum to initiate services in certain of its 1997 target markets. Moreover, a
significant portion of the Company's existing radio spectrum in Philadelphia,
New York City, Washington, Chicago, Dallas, Miami and Houston is subject to
management agreements pursuant to which Motorola, Inc. ("Motorola") controls the
radio spectrum. The Company began service in Philadelphia in August 1995 and
intends to enter into several other of these markets in the Fall of 1995. The
Company cannot utilize this radio spectrum for GEONET services until such
management agreements are terminated. In November 1994, Motorola and NEXTEL
Communications, Inc. ("NEXTEL") entered into a consent decree with the federal
government pursuant to which NEXTEL and Motorola agreed, upon effectiveness of
the consent decree, to take steps to reduce their ownership and management of
radio spectrum in certain U.S. markets including each of the above-referenced
markets, so that they collectively own and/or manage no more than thirty 900 MHz
channels in such markets. The consent decree further provides that any Motorola
management agreements will be terminable at the sole option of the party owning
the license upon 120 days' notice to Motorola. The consent decree allows
Motorola to refuse to terminate such management agreements when Motorola and
NEXTEL together control (including by management agreement) thirty or fewer 900
MHz channels in the licensee's market (including the managed channels as to
which the termination of the agreement is being sought). The consent decree
became effective on July 25, 1995. The Company has notified Motorola of its
intent to terminate management agreements relating to certain channels owned by
the Company or to which the Company has rights.
Generally, these agreements relate to spectrum in smaller markets.
Certain agreements pursuant to which the Company has the right to acquire
spectrum are subject to regulatory approval. Although the Company believes that
such approval will be forthcoming prior to its expected roll-out in each such
market, there can be no assurance that such approvals will be received on a
timely basis or at all. The failure by the Company to obtain any such approvals
could have a material adverse effect on the Company.
The Company intends to acquire sufficient spectrum in each of its
target markets in which it does not have sufficient spectrum to initiate service
and to add additional capacity in certain of its other U.S. target markets. The
Federal Communications Commission (the "FCC") will auction spectrum commencing
in December 1995 in each market in which the Company desires to acquire
additional spectrum. Although the Company intends to bid on such spectrum to the
extent such spectrum is needed, there can be no assurance that the Company will
be the successful bidder for any radio spectrum auctioned by the FCC. In
addition, the Company cannot predict the cost of obtaining
-5-
<PAGE>
licenses for additional spectrum since such costs are determined by factors
beyond the Company's control, including but not limited to, the availability of
licenses and the number of competitors seeking to acquire licenses in any
particular market. Although the Company believes that it will be able to acquire
sufficient spectrum in each of its U.S. markets, there can be no assurance that
the Company will be able to make such acquisitions on a timely basis if at all
or that such acquisitions will be able to be made on commercially acceptable
terms. A failure by the Company to obtain sufficient radio spectrum on
commercially acceptable terms and/or on a timely basis could have a material
adverse effect on the Company. See "- Commercial Implementation of GEONET."
There are only a limited number of existing communications towers
capable of providing the Company with optimal coverage area for its radio
transmissions and that are capable of supporting the Company's transmission
equipment. In the event the Company cannot obtain leases for existing towers, it
may be required to purchase sites, obtain necessary permits and build such
towers, a process which the Company estimates could take up to one year to
complete for each tower. If the Company is required to build new towers, the
roll-out of GEONET in one or more target markets could be delayed, which could
have a material adverse effect on the Company.
Deficiency of Earnings; Net Losses; Substantial Indebtedness
On a consolidated basis, the Company experienced net losses from
continuing operations of $2.4 million, $50.4 million and $42.4 million for the
years ended December 31, 1992, December 31, 1993 and December 31, 1994,
respectively, and $47.4 million for the nine month period ended September 30,
1995. In addition, the Company had a deficiency of earnings before interest,
taxes, depreciation and amortization ("EBITDA") of $0.9 million, $15.2 million
and $34.2 million for the years ended December 31, 1992, December 31, 1993 and
December 31, 1994, respectively, and $30.6 million for the nine month period
ended September 30, 1995. The Company anticipates that its net operating losses
from operations and its EBITDA deficiency will increase significantly during the
roll-out of GEONET. There can be no assurance that the Company will ever operate
at profitable levels or have positive EBITDA. Until sufficient cash flow is
generated from operations, the Company will have to utilize its capital
resources or external sources of funding to satisfy its working capital needs.
The Company has significant indebtedness, a substantial portion of
which is represented by its 15% Senior Secured Discount Notes due 2005 which
have an aggregate principal amount at maturity of $227.7 million (the "Senior
Discount Notes"). Although no payments of interest or principal are due on the
Senior Discount Notes in the immediate future, the Company will have significant
debt service obligations beginning in July 2000. The Company also anticipates
seeking additional financing, which financing may impose additional and earlier
debt service obligations on the Company. See "-- Need for Additional Financing."
The degree to which the Company is leveraged may impair the ability of the
Company to obtain additional financing in the future for working capital,
capital expenditures, acquisitions or other general corporate purposes. In
addition, the Indenture governing the Senior Discount Notes (the "Indenture")
and certain documents executed in connection therewith impose significant
operating and financial restrictions on the Company, affecting, among other
things, the ability of the Company to incur indebtedness, make prepayments of
certain indebtedness, pay dividends, make investments, engage in transactions
with stockholders and affiliates, issue capital stock of its subsidiaries,
create liens, sell assets and engage in mergers and consolidations. Although the
Indenture and the related documents contain various exemptions that are
generally designed to allow the Company to operate its business without undue
restraint, these restrictions, in combination with the leveraged nature of the
Company, could limit the ability of the Company to effect future financings,
respond to changing market conditions and otherwise may restrict corporate
activities.
Need for Additional Financing
The Company's existing cash on hand and expected cash flow from
operations will not be sufficient to fund its full roll-out of GEONET. Based on
the Company's projected roll-out schedule in its 36 United States target markets
and its projected loading of subscribers in these markets, the Company estimates
that it will need at least an additional $250.0 million of financing to fund
GEONET's infrastructure costs as well as operating losses and working capital
needs. Additionally, the macrocellular architecture of Geonet will allow the
Company to adjust its aggregate cash expenditures by focusing its activities in
certain markets while reducing its planned investments in other markets.
The Company's need for additional financing will increase if the
Company experiences delays in the commercial implementation of GEONET, cost
overruns or unanticipated cash needs. Moreover, additional financing
-6-
<PAGE>
may be necessary to satisfy the terms of certain financing transactions,
including, but not limited to, possible mandatory redemption and repayment
obligations of the Company in connection with the Company's Preferred Stock.
Under certain circumstances, the Company may be required on October 31, 2000 to
redeem the Series H Preferred Stock for an aggregate price of $40.0 million
(plus any accrued but unpaid dividends). In lieu of paying such redemption price
in cash, the Company may satisfy this obligation by paying all or any portion of
the redemption price in shares of Common Stock. In such event, the number of
shares of Common Stock to be issued will be determined by multiplying the
redemption price to be paid in Common Stock by 150% and dividing the resulting
price by the market price of the Common Stock. In addition, in the event of
certain circumstances constituting a change in control of the Company, the
Company is obligated to offer to redeem the Series I Preferred Stock, Series K
Preferred Stock and Series L Preferred Stock for their aggregate stated value,
in each case approximately $10.0 million (plus accrued but unpaid dividends),
payable in cash or shares of Common Stock at the Company's option.
Pursuant to the terms of a Defeasance Security Agreement, dated July 6,
1995, the Company pledged to SC Fundamental Value Fund, L.P. and SC Fundamental
Value BVI, Ltd., each of which is a Selling Shareholder hereunder, $40.5
million, at maturity, of United States Treasury obligations to secure the
Company's obligations under the March 1995 Notes. The March 1995 Notes are
convertible into Common Stock beginning September 30, 1995 at a 12.5% discount
to the market price of the Common Stock on the date of conversion. To the extent
the March 1995 Notes are not converted into Common Stock, the Company's
financing needs will increase by an amount equal to the face value of the United
States Treasury obligations securing such Notes which would otherwise have been
released to the Company upon conversion.
Additional financing also may be required to fund acquisitions of
additional spectrum and businesses. The amount of additional funding required
will depend upon the timing of such expenditures, the availability of cash flow
from operations and, to the extent applicable, the availability of lease and
vendor financing. It is presently anticipated that additional financing, if
obtained, would be obtained from one or more sources, including, but not limited
to, equity or debt financing (whether through public or private offerings),
exercise of currently outstanding options and warrants, strategic partners,
joint ventures, vendor financing, leasing arrangements or a combination thereof.
There can be no assurance that additional financing will be available to the
Company on desirable terms or at all.
Competition
Although the Company believes that the quality, array and flexibility
of services to be offered by the Company through GEONET will meaningfully
differentiate such services from those offered by other wireless communications
providers in the Company's target markets, the Company will face significant
competition from such other providers. The Company expects to experience
competition for each type of service it intends to offer from existing dispatch,
cellular telephony, paging and public data service providers. In addition, the
Company expects to experience competition from manufacturers of Private Mobile
Radio ("PMR") equipment, which target existing private network operators and
Specialized Mobile Radio ("SMR") customers and urge them to build or upgrade
their own private networks rather than utilize SMR service providers. Many of
these providers and manufacturers are larger, more established, have more
experience in the telecommunications industry, have greater name recognition,
have larger sales staffs and/or have greater financial resources than the
Company.
NEXTEL has announced plans to construct a nationwide digital Enhanced
Specialized Mobile Radio ("ESMR") network and is offering services in several
cities. NEXTEL has also secured a significant number of 800 MHz SMR channels in
several of the largest U.S. markets. In addition, OneComm Corp. ("OneComm") has
constructed an ESMR network in several cities. Furthermore, several large SMR
providers are positioning themselves to compete for wireless voice and data
traffic and have announced plans to construct digital ESMR networks utilizing
equipment manufactured primarily by Motorola. These providers include Dial Page,
Inc. ("Dial Page") and Pittencrieff Communications, Inc. ("Pittencrieff").
Motorola has announced agreements to transfer its 800 MHz SMR licenses to
NEXTEL, OneComm and Dial Page in consideration for equity positions in these
companies. Motorola will remain the largest SMR service provider in the 900 MHz
band utilizing analog equipment. In addition, to the extent that Motorola is the
largest provider of PMR equipment, Motorola may be deemed to be an indirect
competitor of the Company. In 1994, NEXTEL announced plans to acquire OneComm
and Dial Page.
-7-
<PAGE>
The Company also may face competition from technologies and services
introduced in the future. In March 1995, the FCC completed auctions for Personal
Communications Services ("PCS") licenses in most telecommunication markets
within the United States. PCS could compete with services to be offered by the
Company. The FCC also may license additional spectrum for other wireless
services. It is also possible that satellite technology ultimately could be
developed to permit urban use equal to or superior to that available through SMR
systems, which would result in increased competition for the Company's services.
The commercialization or further development of any such technologies could have
a material adverse effect on the Company. See "- Rapid Technological Changes".
Many of the target customers for GEONET currently use other wireless
communications services. In order to be successful, the Company will need to
migrate a portion of its target customers from their existing services to those
provided by the Company over GEONET. The Company's ability to migrate its target
customers over to its services will be highly dependent on the perceived utility
of the Company's services to its target customers as compared to the services
currently utilized by such customers. Because there currently is no integrated
wireless communications network commercially available that is comparable to
that expected to be offered by the Company over GEONET, the extent of the demand
for the Company's wireless communication services cannot be predicted with any
degree of certainty. The demand for the Company's digital wireless
communications services also could be affected by other matters beyond its
control, such as the future cost of subscriber equipment, marketing and pricing
strategies of competitors and general economic conditions.
The Company also expects to experience competition for radio spectrum
from existing and future providers of wireless communications services. The
Company also expects to experience competition for communications tower space.
See "- Need for Spectrum; Need for Transmission Sites."
The Company also experiences competition for each of its products and
services other than GEONET in the markets in which it sells such products and
services. Such competition is expected to remain strong for the foreseeable
future.
Government Regulation
The licensing, construction, operation and acquisition of SMR systems
in the United States is regulated by the FCC under the Communications Act of
1934, as amended (the "Communications Act"). During 1994, the FCC initiated
several regulatory proceedings with wide-ranging implications for the wireless
telecommunications industry. A primary intent of these recent amendments was to
encourage competition among mobile communications service providers by removing
regulatory distinctions between common carriers such as cellular telephone
companies and private carriers such as SMR service providers. Although the
Company will not be required to comply with most of these regulatory changes
prior to 1996, the regulations may materially impact the Company's operations in
the future. For example, the Company will be required to provide services on a
"nondiscriminatory basis" and on terms that are not "unjust and unreasonable,"
as such terms are defined by the Communications Act. In addition, the FCC may,
in the future, require that the Company provide equal access to its wireless
services to other wireless and wireline communications providers and
interconnection to wireline and wireless entities. The FCC may, in the future,
specify by rule other common carrier regulations that would apply to commercial
mobile services providers such as the Company. Moreover, the FCC did not delay
the effective date of the applicability of its rules concerning foreign
investment in and management and/or participation in any entity holding an FCC
license. However, the FCC did provide a mechanism for newly re-classified
providers to petition for a waiver of these limitations. The Company filed a
petition to retain its foreign directors and officers, including certain
executive officers of the Company the loss of the services of which could
adversely affect the conduct of the Company's business. The Company's petition
was granted by the FCC, which permits the Company to retain its foreign
directors and officers until August 10, 1996. Thereafter, the Company's ability
to retain foreign directors and officers will be limited by current FCC
regulations. See "- Dependence on Key Personnel." These limitations may also
affect the Company's ability to secure foreign financing through the sale of
shares of Common Stock or Common Stock equivalents and to issue Common Stock in
the acquisition of foreign subsidiaries. The Company cannot predict the effect
of any of these regulations or any future regulation adopted by the FCC on the
Company's operations. Moreover, there has been little experience in the
interpretation and implementation of these regulations. Future interpretations
or practices with respect to such regulations could have a material adverse
effect on the Company.
-8-
<PAGE>
The Company has been granted a waiver to construct and activate certain
systems it has acquired. In the event the Company fails to construct or activate
such systems in accordance with the dates set forth in the waiver, the Company
could lose the waiver and lose all of the frequencies covered by such waiver
which have not been constructed or activated. The Company's waiver is currently
subject to a pending challenge that was filed by a third party with whom the
Company failed to negotiate a satisfactory management agreement. The Company
believes that this challenge is without merit and is vigorously opposing it. A
loss of the frequencies covered by such waiver that have not been constructed or
activated would have a material adverse effect on the Company.
The Company intends to acquire additional SMR licenses. There can be no
assurance that the Company will be successful in its efforts to negotiate the
acquisition of all licenses it seeks to acquire or in its efforts to obtain
regulatory approval thereof. In addition, there can be no assurance that any
licenses currently owned or acquired in the future by the Company will be
renewed. The failure of the Company to renew existing or future SMR licenses
could have a material adverse effect on the Company.
All of the equipment utilizing the Company's technology, to the extent
it is used to send or receive signals, must meet FCC criteria. Although GEONET
base stations have received such approval and the mobile subscriber units have
been designed to meet FCC standards, there can be no assurance that the
subscriber units will meet such criteria. A failure by the Company's subscriber
units or any of its other equipment to meet FCC standards could have a material
adverse effect on the Company.
Future changes in regulation or legislation affecting digital wireless
telecommunications service or the allocation by the FCC or Congress of
additional spectrum for services that compete with such service could adversely
affect the Company's business. See "- Competition."
Dependence on Third Party Providers
The Company's digital wireless telecommunications system is being
developed and commercialized by its subsidiary, PowerSpectrum, Ltd. ("PST").
However, the development by PST of the technology and systems is dependent in
large part upon the efforts of Rafael Armament Development Authority ("Rafael"),
a PST contractor, to adapt frequency hopping from a military to a commercial
application, to integrate the frequency hopping technology with other digital
technologies required for optimal commercial deployment of GEONET and, as
discussed below, for the cost-effective manufacture of the base station
hardware. In this regard, approximately 90 employees of Rafael are presently
engaged on a full-time subcontract basis in the development of FHMA. If Rafael
reduces its commitment to PST or continuing development efforts are not
successful, the Company's prospects could be materially adversely affected.
Neither the Company nor PST manufacture the system architecture,
hardware and mobile subscriber units necessary for the commercial implementation
of GEONET. Rafael has been contracted by PST to manufacture the system hardware
for GEONET. Third parties, including Mitsubishi Consumer Electronics America
("Mitsubishi"), Hughes Network Systems ("Hughes"), a unit of GM Hughes
Electronics, and Kenwood Corporation of Japan ("Kenwood"), will manufacture
subscriber units and certain other components of the system hardware for GEONET.
There can be no assurance that such third parties will deliver such equipment on
a timely basis or that the Company will be able to successfully integrate such
components and hardware in a cost effective system on a timely basis, if at all.
The Company has only a single manufacturing source for certain of the components
of the GEONET system hardware, including the base stations and subscriber units.
Although the Company believes that it can obtain all components necessary to
build GEONET from other sources, delays may be encountered in the event of a
component shortage because of the time it may take to identify substitute
sources and manufacture substitute components. A failure by the Company to
obtain hardware components on a timely basis or at satisfactory prices could
adversely affect the ability of the Company to roll-out and market GEONET, which
could have a material adverse effect on the Company. See "- Commercial
Implementation of GEONET."
The Company has entered into an agreement with IBM Corporation ("IBM")
to manage the construction of the GEONET stations and the installation of FHMA
equipment in the Company's U.S. target markets. A failure by IBM to manage the
preparation and construction of the Company's base stations and remote sites
could have a material adverse effect on the Company. See "- Commercial
Implementation of GEONET".
-9-
<PAGE>
Rapid Technological Changes
The telecommunications industry is subject to rapid and significant
changes in technology, which could lead to new products and services that
compete with those offered by the Company or could lower the cost of current
competing products and services to the point where the Company's products and
services could become non-competitive and the Company could be required to
reduce the prices of its services. While the Company is not aware of any
proposed changes that will materially affect the attractiveness of its product
and service offerings, the effect of technological changes on the businesses of
the Company cannot be predicted. In the future, the Company expects to
experience competition from new technologies such as ESMR networks, PCS and
possibly satellite technology, as well as from advances with respect to existing
technologies such as cellular, paging and mobile data transmission. See "-
Competition."
Dependence on Key Personnel
The success of the Company will depend greatly upon the active
participation and the experience of its management. The loss of the services of
Yaron Eitan, the Company's President and Chief Executive Officer, could
adversely affect the conduct of the Company's business. In addition, the
successful implementation of the Company's business plan will depend, to a large
extent, upon the ability of the Company's and its subsidiaries' engineers and
scientific personnel to perfect and improve upon existing and proposed products.
The loss of some or all of such personnel, or the inability of the Company to
attract additional personnel, or the inability of such persons to design such
systems or to continue product enhancement will directly inhibit the ability of
the Company to sell its products and services and to operate profitably.
Risks of International Business
The Company operates in and sells products and services to clients in
various countries and certain of its products and components are manufactured
abroad. The Company's research and development activities are reliant upon
foreign providers. Accordingly, the Company is subject to the risks inherent in
conducting business across national boundaries, including, but not limited to,
currency exchange rate fluctuations, international incidents, military
outbreaks, economic downturns, government instability, nationalization of
foreign assets, government protectionism and changes in governmental policy, any
of which risks could have a material adverse impact on the Company.
Influence by Significant Stockholders; Preemptive Rights
As of the date hereof, approximately 25% of the total voting power of
the Company's Common Stock (on a fully diluted basis, but without giving effect
to the exercise of the options held by Vanguard Cellular Systems, Inc.
("Vanguard")), were beneficially owned by the directors and executive officers
of the Company and their affiliates. Consequently, the Company's directors and
executive officers will be able to exert significant influence with respect to
all matters upon which stockholder approval is required.
Of the amounts discussed above, 5,916,514 shares, or 9.9% of the
Company's Common Stock are beneficially owned by a group of investors including
George Soros (the "Soros Group"), whose affiliate, Purnendu Chatterjee, is a
director of the Company. In addition, as of the date hereof, Vanguard
beneficially owned approximately 3.3 million shares or 6.1% of the Company's
outstanding Common Stock. However, assuming full exercise of the options held by
Vanguard as of such date, 8.6 million shares, or 14.5% of the Company's Common
Stock on a fully diluted basis, would be beneficially owned by Vanguard. With
respect to certain issuances of voting securities by the Company, Vanguard and
the Soros Group have the preemptive right to purchase voting securities of the
Company, at the same price and the same terms as the Company may offer to third
parties, in an amount sufficient to maintain Vanguard's or the Soros Group's
percentage interests, as applicable, in the voting securities of the Company on
a fully diluted basis.
Winston Churchill, the Chairman of the Board of the Company, Yaron
Eitan, the President and Chief Executive Officer of the Company, Evergreen
Canada-Israel Investment & Co., Ltd. ("Evergreen"), S-C Rig Investments-III,
L.P., the Soros Group's vehicle for investment in the Company ("S-C Rig"), and
Vanguard have agreed to vote their shares to elect a representative of each of
Evergreen, S-C Rig and Vanguard, respectively, to the Board of Directors of the
Company (although no representative of Evergreen currently is a member of the
Board
-10-
<PAGE>
of Directors). This obligation shall continue with respect to each of the
parties for so long as Vanguard, S-C Rig and Evergreen beneficially own at least
2,500,000, 2,500,000 and 1,000,000 shares of Common Stock, respectively. In the
event that the beneficial ownership of any such party drops below its designated
ownership level, then the agreement terminates with respect to such party only
and the agreement continues in full force and effect with respect to the
remaining parties thereto. Mr. Purnendu Chatterjee is the designated
representative of S-C Rig; and Mr. Haynes G. Griffin is the designated
representative of Vanguard. In addition, the Company has agreed, pursuant to an
agreement entered into in connection with the Company's acquisition of Metro Net
Systems, Inc. to use its best efforts to cause the election of Mr. Richard
Krants as a director of the Company through the 1996 fiscal year. The Company
has also agreed to use its best efforts to have Mr. Eitan elected as a member of
the Board of Directors during the term of his employment.
Transactions with Affiliates
During the period since its inception, the Company has undertaken a
wide variety of financing and merger/acquisition activity which has resulted in
its present corporate and financial structure. Included in such activity have
been transactions which have involved persons who now serve, or who did serve at
the time, as directors and officers of the Company or persons or entities
related to such persons. In every instance where such transactions have involved
any such persons or entities, the specific transaction has been approved
unanimously by directors of the Company, including all disinterested and outside
directors, with the affected parties abstaining. It is the Company's view that
each such transaction has been on terms no less favorable to the Company than
other similar transactions available to the Company with unaffiliated parties,
if available at all. In most of such instances, such transactions have been the
Company's only recourse to meet financing needs and/or business goals. Despite
the foregoing, prospective purchasers may wish to consider the circumstances in
which such transactions were made, the terms of such transactions and the
Company's possible alternative courses of action.
Patent Issues
The Company protects its proprietary information by way of
confidentiality and non-disclosure agreements with employees and third parties
who may have access to such information. The Company continually reviews its
technology developments in order to file patent applications and has filed
patent applications with respect to certain aspects of its FHMA(TM) frequency
hopping technology and GEONET in Israel and expects to file additional patent
applications in Israel and the United States. Generally, the Company intends to
file all patent applications in the United States and Israel and in such other
countries as it deems appropriate. There can be no assurance that such
applications will be granted. There can be no assurance that any patents issued
will afford meaningful protection against competitors with similar technology or
that any patents issued will not be challenged by third parties. There also can
be no assurance that others will not independently develop similar technologies,
duplicate the Company's technologies or design around the patented aspects of
any technologies developed by the Company. Many patents and patent applications
have been filed by third parties with respect to wireless communications
technology. The Company does not believe that its technology infringes on the
patent rights of third parties. However, there can be no assurance that certain
aspects of the Company's technology will not be challenged by the holders of
such patents or that the Company will not be required to license or otherwise
acquire from third parties the right to use certain technology. The failure to
overcome such challenges or obtain such licenses or rights could have a material
adverse effect on the Company's operations.
Dividends On Common Stock Not Likely
The Company has not declared or paid any cash dividends on its Common
Stock since commencing operations and does not anticipate paying any dividends
on its Common Stock in the foreseeable future. At present, the Company is
obligated to pay, for a five-year period following the issuance of the Series H
Preferred Stock, cumulative dividends of $2,000,000 per year on the Series H
Preferred Stock, in cash, and, for a five-year period following the issuance of
the Series I Preferred Stock and Series K Preferred Stock, respectively,
cumulative dividends equaling $700,000 per year on the Series I Preferred Stock
and $700,000 per year on the Series K Preferred Stock, in cash or shares of
Common Stock of the Company, before any cash dividends may be paid on its Common
Stock. In addition, the Company is presently obligated to pay cumulative annual
dividends of $750,000 per year on the Series L Preferred Stock, in cash or
additional shares of Series L Preferred Stock, and cumulative annual dividends
of $988,125 per year on the Series M Preferred Stock, in cash or shares of
Common Stock, before any cash dividends may be paid on its Common Stock. At
present, the Company is current in payment of all
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<PAGE>
required dividends on its outstanding preferred stock. In addition, the terms of
certain indebtedness of the Company prohibit, during the term of such
indebtedness, the declaration or payment of any dividend on the Company's Common
Stock (other than in shares of such Common Stock).
Shares of Common Stock Eligible for Sale; Dilution
The Company has in the past registered for offer and sale under the
Securities Act certain of the issued and outstanding shares of Common Stock and
certain of the shares of Common Stock issuable upon the exercise or conversion,
as applicable, of outstanding options, warrants and convertible securities held
by the Company's stockholders, including certain officers, directors, employees
and "affiliates" of the Company (as such term is defined pursuant to the
Exchange Act). The sale of such shares would have been subject to substantial
limitations in the absence of such registration. A substantial number of such
shares may still be held by the registered holders thereof and available for
resale under currently effective registration statements. In addition, certain
stockholders of the Company hold the right (subject to certain conditions) to
require that the Company register for offer and sale issued and outstanding
shares of Common Stock and/or shares of Common Stock issuable upon the exercise
or conversion, as applicable, of options, warrants and convertible securities.
Sales of substantial amounts of such shares could adversely affect the market
value of the Common Stock and, in the case of convertible securities, may effect
a dilution of the book value per share of Common Stock, depending upon the
timing of any such sales.
No Established Trading Market for Warrants
Investors in the Warrants should be aware that there is currently no
established trading market for the Warrants, and it is uncertain whether there
will ever be a trading market for the Warrants. It is not presently anticipated
that the Warrants will be listed on the PSE, the NNM or otherwise.
-12-
<PAGE>
SELLING SHAREHOLDERS
AND RELATED INFORMATION
On March 30, 1995, pursuant to a Note and Warrant Purchase Agreement
dated as of March 20, 1995, the Company consummated a private transaction
pursuant to which it issued and sold to The SC Fundamental Value Fund, L.P. and
SC Fundamental BVI, Ltd. (collectively, the "SC Investors"), each of which is a
Selling Shareholder hereunder, the March 1995 Notes and the $8.125 Warrants.
The aggregate gross proceeds to the Company from the issuance and sale of the
March 1995 Notes and the $8.125 Warrants was $36,000,000, less $25,000,000, plus
accrued and unpaid interest thereon, used by the Company to retire the June 1994
Notes. In connection with the issuance and sale of the June 1994 Notes to the SC
Investors, the Company issued to such Selling Shareholders the $7.875 Warrants.
The $8.125 Warrants and the $7.875 Warrants are collectively referred to as the
"Warrants." The shares of Common Stock issuable by the Company upon the exercise
of the Warrants are collectively referred to herein as the "Warrant Shares."
The March 1995 Notes bear interest at the rate of 14.75% per annum,
payable quarterly until maturity or earlier conversion. During each four month
period beginning September 30, 1995, February 1, 1996 and June 1, 1996, up to
$12,000,000 principal amount of the Notes (but no more than $250,000 on any one
day) may be converted, from time to time, by the Selling Shareholders into
shares of Common Stock at a conversion price equal to 87.5% of the weighted
average of the sale prices of the Common Stock on the trading day next preceding
the date of conversion. Pursuant to the terms of a Defeasance Security
Agreement, dated July 6, 1995, the Company pledged to the SC Investors $40.5
million, at maturity, of United States Treasuries (the "Defeasance Collateral")
to secure the Company's obligations under the March 1995 Notes, including the
repayment of the principal amount thereunder together with all accrued and
unpaid interest thereon through maturity. To the extent all or a portion of the
principal amount of the March 1995 Notes is converted into Common Stock, an
amount of the Defeasance Collateral otherwise payable in respect of such
converted principal, and any interest that would have thereafter accrued
thereon, will be released to the Company.
On June 1, 1995, the Company completed a private transaction pursuant
to which it issued and sold to BEA International Equity Portfolio ("BEA") and
the other investors listed beneath the reference to BEA in the table regarding
beneficial ownership of Common Stock set forth on Page 14 hereof, each of which
is a Selling Shareholder hereunder, 1,162.5 shares of Series M Preferred Stock.
The aggregate gross proceeds to the Company from the issuance and sale of the
Series M Preferred Stock was $11,625,000. The shares of Series M Preferred Stock
issued and sold to such Selling Shareholders are immediately convertible into
the number of shares of Common Stock as is determined by dividing (i) the sum of
the $10,000 stated value per share of Series M Preferred Stock plus all unpaid
dividends accrued and deemed to have accrued, if any, with respect to such
shares of Series M Preferred Stock through the last dividend payment date by
(ii) a conversion price of $9.50 per share, subject to certain adjustments.
On October 31, 1995, the Company completed a private transaction
pursuant to which it issued to RDC-Rafael Development Corporation Ltd. ("RDC"),
a Selling Shareholder hereunder, 2,138,028 shares of Common Stock, of which
338,028 shares are included in the securities offered by this Prospectus (the
"RDC Offered Shares"). In consideration of the issuance of the RDC Offered
Shares to RDC, the Company received aggregate gross proceeds of $3,000,000. The
remaining 1,800,000 shares issued to RDC (the "RDC Restricted Shares") were
issued by the Company in exchange for RDC's interest in the Company's
subsidiary, PST. RDC's interest in PST consisted of an approximately 38% equity
interest, an approximately 40% voting interest, and a perpetual capital note in
the principal amount of approximately $3,750,000. In connection with the
issuance of shares to RDC described above, PST granted an option to RDC to
acquire up to a 10% equity interest in PST upon the occurrence of certain
triggering events the result of which would be to reduce the Company's ownership
interest in PST to no more than a certain threshold percentage, initially, 90%.
The Company has been and continues to be, in large part, dependent upon the
efforts of Rafael in the development and commercialization of its digital
wireless telecommunications technology. Rafael continues to have a significant
interest in RDC. See "Risk Factors--Dependence on Third Party Providers."
The Selling Shareholders are listed below. Included below concerning
each Selling Shareholder beneficially owning Common Stock or Warrants, as
applicable, is (i) a table showing the total amount and percentage of the Common
Stock beneficially owned by such person, the amount subject to sale hereunder
and the resulting amount and percentage if all Shares offered hereby which are
owned by such person are sold, and (ii) a table showing the total amount and
percentage of the Warrants beneficially owned by such person, the amount subject
to sale hereunder, and the resulting amount and percentage if all Warrants
offered hereby which are owned by such person
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<PAGE>
are sold. None of the Selling Shareholders has held any position or office, or
had any other material relationship with the Company during the past three
years.
<TABLE>
<CAPTION>
Common Stock Pre-Offering(1) Post-Offering(2)
------------ --------------- -----------------
Total Total
Number Number
of Shares of Shares
Beneficially Percentage Shares Beneficially Percentage
Selling Shareholders Owned of Class (3) Offered Owned of Class(3)
- -------------------- ------------ ------------ ------- ------------ -----------
<S> <C> <C> <C> <C> <C>
The SC Fundamental Value 3,998,414(5)(6) 6.9% 3,998,414 0 0%
Fund, L.P.(4)
SC Fundamental Value BVI, 2,144,443(5)(7) 3.8% 2,144,443 0 0%
Ltd.(4)
RDC-Rafael Development 3,388,028(9) 6.3% 338,028 3,050,000 5.6%
Corporation Ltd.(8)
BEA International Equity 631,579(10) 1.21% 631,579 0 0%
Portfolio
The Emerging Markets 105,263(9) * 105,263 0 0%
Infrastructure Fund
The First Israel Fund 105,263(9) * 105,263 0 0%
The Emerging Markets 105,263(9) * 105,263 0 0%
Telecommunications Fund
CI Global Fund 105,263(9) * 105,263 0 0%
CI Emerging Markets Fund 105,263(9) * 105,263 0 0%
Alpha Atlas Holdings LLC 52,632(9) * 52,632 0 0%
International Equity Fund 13,158(9) * 13,158 0 0%
</TABLE>
* Less than 1%
(1) Beneficial ownership figures include all Common Stock represented by
shares of issued and outstanding Common Stock as well as shares of
Common Stock issuable upon exercise or conversion of outstanding
warrants, options and convertible securities, including shares of
Common Stock issuable upon conversion or exercise of the Series M
Preferred Stock, the March 1995 Notes and the Warrants. Assumes that
there are no accrued and unpaid dividends on the Series M Preferred
Stock at the time of conversion so that each share of Series M
Preferred Stock is convertible into approximately 1,053 Shares. Based
on information available to the Company, to the Company's knowledge,
except for RDC Development Corporation Ltd., none of the Selling
Shareholders beneficially owns any Common Stock other than the Shares
offered hereby. For information regarding the beneficial ownership of
the Warrants, see the table regarding beneficial ownership of the
Warrants set forth on Page 15 of this Prospectus.
(2) Assumes the sale of all Shares offered by this Prospectus by each
Selling Shareholder to third parties unaffiliated with the Selling
Shareholders.
(3) These percentages are calculated in accordance with Section 13(d) of
the Securities Exchange Act of 1934, as amended, and the rules
promulgated thereunder, without giving effect to the 60-day limitation
regarding conversion or exercise of convertible securities and
warrants.
(4) Both the general partner of The SC Fundamental Value Fund, L.P., SC
Fundamental, Inc., and the investment manager of SC Fundamental Value
BVI, Ltd., SC Fundamental BVI, Inc., are controlled by Messrs. Gary N.
Siegler and Peter M. Collery. Such individuals may be deemed to
beneficially own the
-14-
<PAGE>
Shares owned by the SC Investors. Messrs. Siegler and Collery
disclaim beneficial ownership of such Shares.
(5) Assumes the full conversion of the Notes in the aggregate principal
amount of $36,000,000 at a conversion price equal to 87.5% of the
weighted average of the sale prices of the Common Stock as reported on
the NNM on August 30, 1995 ($8.00 per share), or 5,142,857 shares of
Common Stock. The March 1995 Notes are convertible into Common Stock in
three increments of $12,000,000 each during the three four-month
periods beginning September 30, 1995, February 1, 1996 and June 1,
1996.
(6) Represents 3,337,714 Note Shares and 660,700 Warrant Shares.
(7) Represents 1,805,143 Note Shares and 339,300 Warrant Shares.
(8) RDC is controlled by DEP Technology Holdings Ltd. ("DEP"), a holding
company whose sole asset is its 50.1% interest in the outstanding
capital stock of RDC. DEP is one-third owned by each of PEC Israel
Economic Corporation ("PEC"), Discount Investment Corporation Ltd.
("DIC") and Elron Electronic Industries Ltd. ("Elron"). PEC owns 13.6%
of the outstanding shares of Elron and DIC owns 26.4% of the
outstanding shares of Elron. PEC and DIC are each controlled by IDB
Development Corporation Ltd., which in turn is controlled by IDB
Holding Corporation Ltd. ("IDB Holding"). Accordingly, each of such
corporations shares the power to vote and dispose of and may be deemed
to beneficially own the shares of Common Stock of the Company owned by
RDC. By reason of their interests in and relationships with IDB
Holding, Raphael Recanati and Jacob Recanati, who are brothers, and
their nephew and niece, Leon Recanati and Judith Yovel Recanati, who
are brother and sister, may be deemed to share the power to vote and
dispose of and to beneficially own the shares of Common Stock of the
Company beneficially owned by IDB Holding.
(9) Includes 338,028 RDC Offered Shares, 1,800,000 RDC Restricted Shares
and an additional 1,250,000 shares of Common Stock of the Company
beneficially owned by RDC. In addition to the shares of Common Stock of
the Company owned by RDC, Albar Finance and Leasing Ltd, a wholly-owned
subsidiary of DIC, owns 50,000 shares of Common Stock of the Company
and IDB Holding owns 23,200 shares of Common Stock of the Company. The
RDC Restricted Shares may not be sold until October 31, 1997.
(10) Assumes the full conversion of the Series M Preferred Stock.
<TABLE>
<CAPTION>
Warrants Pre-Offering(1) Post-Offering(2)
-------- --------------- ----------------
Total Total
Number of Number
Warrants of Warrants
Beneficially Percentage Warrants Beneficially Percentage
Selling Shareholders Owned of Class Offered Owned of Class
- -------------------- ------------ ---------- -------- ------------ ----------
<S> <C> <C> <C> <C> <C>
The SC Fundamental Value 660,700(4) 66.07% 660,700 0 0%
Fund, L.P.(3)
SC Fundamental Value BVI, 339,300(5) 33.93% 339,300 0 0%
Ltd. (3)
</TABLE>
(1) Beneficial ownership figures include the Warrants issued in connection
with the issuance of the March 1995 Notes and the June 1994 Notes, all
of which are owned by the Selling Shareholders. For information
regarding beneficial ownership of Common Stock, including the Warrant
Shares issuable upon exercise of the Warrants, see the table regarding
beneficial ownership of Common Stock beginning on Page 14 of this
Prospectus.
(2) Assumes the sale of all Warrants offered by this Prospectus by each
Selling Shareholder to third parties unaffiliated with the Selling
Shareholders.
-15-
<PAGE>
(3) Both the general partner of The SC Fundamental Value Fund, L.P., S.C.
Fundamental, Inc., and the investment manager of the SC Fundamental
Value BVI, Ltd., SC Fundamental BVI, Inc., are controlled by Messrs.
Gary N. Siegler and Peter M. Collery. Such individuals may be deemed
beneficially own the Warrants owned by the SC Investors. Messrs.
Siegler and Collery disclaim beneficial ownership of such Warrants.
(4) Consists of 206,400 $7.875 Warrants and 454,300 $8.125 Warrants.
(5) Consists of 93,600 $7.875 Warrants and 245,700 $8.125 Warrants.
LEGAL MATTERS
The validity of the Shares of Common Stock and Warrants offered hereby
will be passed upon by Klehr, Harrison, Harvey, Branzburg & Ellers,
Philadelphia, Pennsylvania. Such firm and certain partners of such firm
beneficially own, in the aggregate, 135,363 shares of the Company's Common
Stock.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994
and 1993 and the consolidated statements of operations, shareholders' equity,
and cash flows for the years ended December 31, 1994, 1993 and 1992,
incorporated by reference in this Prospectus, have been incorporated by
reference herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing. In such report, Coopers & Lybrand L.L.P. states, that
with respect to certain affiliated companies, their opinions are based upon the
reports of other independent accountants.
-16-
<PAGE>
No person is authorized to give any information or to make any representation
not contained or incorporated by reference in this Prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by the Company. Neither the delivery of this Prospectus nor any sale
made hereunder shall, under any circumstances, create any implication that there
has been no change in the facts set forth in this Prospectus or in the affairs
of the Company since the date hereof. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any securities other than
those to which it relates or an offer to sell or a solicitation of an offer to
buy any securities in any jurisdiction in which such offer or solicitation is
not authorized, or in which the person making such offer or solicitation is not
qualified to do so, or to any person to whom it is unlawful to make such an
offer or solicitation in such jurisdiction.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Additional Information........................... 3
Incorporation of Certain Information
by Reference................................... 3
Risk Factors..................................... 4
Selling Shareholders and Related
Information..................................... 13
Legal Matters.................................... 16
</TABLE>
GEOTEK COMMUNICATIONS, INC.
ISSUANCE AND SALE TO CERTAIN
SELLING SHAREHOLDERS OF UP TO
$36,000,000 OF COMMON STOCK ISSUABLE
UPON CONVERSION OF CONVERTIBLE
NOTES (THE "NOTE SHARES"), ISSUANCE
AND SALE OF 1,000,000 SHARES OF
COMMON STOCK ISSUABLE UPON
EXERCISE OF WARRANTS (THE
"WARRANT SHARES"), RESALE BY
CERTAIN SELLING SHAREHOLDERS OF
THE NOTE SHARES, THE WARRANT
SHARES AND WARRANTS TO ACQUIRE
THE WARRANT SHARES, RESALE BY
CERTAIN SELLING SHAREHOLDERS OF
1,223,684 SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF
SERIES M CUMULATIVE CONVERTIBLE
PREFERRED STOCK AND RESALE BY A
CERTAIN SELLING SHAREHOLDER OF
338,028 SHARES OF COMMON STOCK
PROSPECTUS
___________, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
Set forth below is an itemized statement of all expenses incurred or
to be incurred in connection with the issuance and distribution of the
securities to be registered:
<TABLE>
<S> <C>
Registration fee*............................................................. $ 815.93
Blue sky filing fees and expenses............................................. 1,000.00
Transfer agent and registration fee........................................... 1,000.00
Printing and mailing expenses................................................. 3,000.00
Legal fees and expenses....................................................... 10,000.00
Accounting fees and expenses.................................................. 5,000.00
Miscellaneous................................................................. 5,000.00
Total..................................................................... $25,813.93
---------
</TABLE>
-------------------
*Exact; all other fees and expenses are estimates.
Item 15. Indemnification of Directors and Officers.
A. The Delaware Corporation Law provides that, to the extent that any
director, officer, employee or agent of the Company has been successful on the
merits or otherwise in defense of any action, suit or proceeding, whether civil,
criminal, administrative or investigative (including an action by or in the
right of the Company) which he was a party to by reason of the fact that he is
or was a director, officer, employee or agent of the Company or is or was
serving at the request of the Company as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise,
the Company shall indemnify any such person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
B. In addition, the Company has the power to indemnify any of the
persons referred to above in connection with any such actions against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with any such actions, suit or
proceeding, if such person acted in good faith and in a manner he reasonably
believed to be or not opposed to the best interests of the Company, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
Notwithstanding the foregoing, in connection with any action or suit
by or in the right of the Company to procure a judgment in its favor, the
Company shall not make any indemnification as described above in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the Company unless or only to the extent that the Court of Chancery
(in the State of Delaware) or the court in which such action or suit was brought
shall determine, upon application, that, despite adjudication of liability but
in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.
C. The Company also has the power, under the Delaware Corporation Law,
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Company, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
other liability asserted against him and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Company would have the
power to indemnify him against such liability under the provisions of this
Section.
D. The indemnification provided by or allowable pursuant to the
Delaware Corporation Law shall or may, as applicable, continue as to a person
who has ceased to be a director, officer, employee or agent of the Company and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
II-1
<PAGE>
Item 16. Exhibits
The following documents are filed as a part of this Registration Statement.
(Exhibit numbers correspond to the exhibits required by Item 601 of Regulation
S-K for a Registration Statement on Form S-3.)
(a) Exhibits
<TABLE>
<CAPTION>
Exhibit No.
<S> <C>
2.1 Stock Purchase Agreement, dated as of November 1, 1993, by and between the Company and S-C
Rig Investments-III, L.P.(1)
2.2 Stock Purchase Agreement, dated as of December 29, 1993, by and between the Company and
Vanguard Cellular Systems, Inc. and its affiliates ("Vanguard"), regarding the sale of up to an
aggregate of 12.5 million shares of the Company's Common Stock.(2)
2.3 Notarial Deed and Share Purchase Agreement, dated May 26, 1994, by and between Preussag
Mobilfunk GmbH and Geotek Communications GmbH, a wholly-owned subsidiary of the
Company. (3)
2.4 Notarial Deed and Share Purchase Agreement, dated July 6, 1994, by and between Quante A.G.,
on the one hand, and Geotek Communications GmbH and Geotek Beteiligungs GmbH, wholly-
owned subsidiaries of the Company, on the other hand.(4)
2.5 Stock Purchase Agreement, dated as of April 6, 1995, by and between the Company and European
Gateway Acquisition Corp., regarding the sale of the Company's interest in Bogen Corporation
and Speech Design GmbH, as amended.(5)
*2.6 Stock Purchase Agreement, dated as of September 28, 1995, by and among the Company, Geotek
PST, Inc. and RDC-Rafael Development Corporation.
4.1 Restated Certificate of Incorporation of the Company, as amended.(6)
4.2 Certificate of Amendment of the Restated Certificate of Incorporation of the Company filed
February 26, 1993.(7)
4.3 Certificate of Amendment of the Restated Certificate of Incorporation of the Company filed
February 16, 1994.(6)
4.4 Certificate of Designation of Series H Cumulative Convertible Preferred Stock.(2)
4.5 Certificate of Designation of Series I Cumulative Convertible Preferred Stock.(6)
4.6 Certificate of Designation of Series K Cumulative Convertible Preferred Stock.(5)
4.7 Certificate of Designation of Series L Cumulative Convertible Preferred Stock.(8)
4.8 Certificate of Designation of Series M Cumulative Convertible Preferred Stock.(8)
4.9 By-Laws of the Company, as amended.(9)
4.10 1989 Employee Stock Option Plan, as amended, of the Company.(10)
4.11 1994 Employee Stock Option Plan of the Company.(11)
4.12 Note and Warrant Purchase Agreement, dated as of June 15, 1994, by and among Geotek
Communications, Inc., The SC Fundamental Value Fund, L.P. and SC Fundamental Value BVI,
Ltd.(12)
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
4.13 Pledge Agreement, dated as of June 15, 1994, by and among Geotek Communications, Inc.,
Geotek Acquisition Corp., Geotek Subsidiary Industries, Inc., Bogen Corporation, U.S.I. Venture
Corp. and SC Fundamental Inc., as agent for The SC Fundamental Value Fund, L.P. and SC
Fundamental Value BVI, Ltd.(12)
4.14 Senior Secured Note, dated June 20, 1994, from the Company in connection with the Note and
Warrant Purchase Agreement referenced in Exhibit 4.12 hereof.(12)
4.15 Senior Secured Note, dated June 20, 1994, from the Company in connection with the Note and
Warrant Purchase Agreement referenced in Exhibit 4.12 hereof.(12)
4.16 Warrant Certificate issued in connection with the Note and
Warrant Purchase Agreement referenced in Exhibit 4.12 hereof
dated June 20, 1994.(12)
4.17 Warrant Certificate issued in connection with the Note and
Warrant Purchase Agreement referenced in Exhibit 4.12 hereof
dated June 20, 1994.(12)
4.18 Note and Warrant Purchase Agreement, dated as of March 20, 1995, by and among the Company,
The SC Fundamental Value Fund, L.P. and SC Fundamental Value BVI, Ltd.(10)
4.19 Pledge Agreement, dated as of March 30, 1995, by and among the Company, certain of its
subsidiaries and SC Fundamental Inc., as agent for and on behalf of The SC Fundamental Value
Fund, L.P. and SC Fundamental Value BVI, Ltd.(10)
4.20 Senior Secured Convertible Note, dated March 30, 1995, from
the Company in connection with the Note and Warrant Purchase
Agreement referenced in Exhibit 4.18 hereof.(10)
4.21 Senior Secured Convertible Note, dated March 30, 1995, from
the Company in connection with the Note and Warrant Purchase
Agreement referenced in Exhibit 4.18 hereof.(10)
4.22 Warrant Certificate issued in connection with Note and Warrant Purchase Agreement referenced
in Exhibit 4.18 hereof dated March 30, 1995.(10)
4.23 Warrant Certificate issued in connection with Note and Warrant Purchase Agreement referenced
in Exhibit 4.18 hereof dated March 30, 1995.(10)
4.24 Purchase Agreement, dated as of June 29, 1995, by and between the Company and Smith Barney
Inc.(13)
4.25 Indenture, dated as of June 30, 1995, by and between the Company and IBJ Schroder Bank &
Trust Company, as Trustee.(13)
4.26 Notes Registration Rights Agreement, dated as of July 6, 1995, by and between the Company and
Smith Barney Inc.(13)
4.27 Pledge Agreement, dated as of July 6, 1995, by and between the Company and IBJ Schroder Bank
& Trust Company.(13)
4.28 Share Transfer Agreement, dated as of July 6, 1995, by and between the Company and IBJ
Schroder Bank & Trust Company.(13)
4.29 Charge Over Shares, dated as of July 6, 1995, by and between the Company and IBJ Schroder
Bank & Trust Company.(13)
4.30 Warrant Agreement, dated as of June 30, 1995, by and between the Company and IBJ Schroder
Bank & Trust Company.(13)
4.31 Warrant Share Registration Rights Agreement, dated as of July 6, 1995, by and between the
Company and Smith Barney Inc.(13)
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
4.32 Defeasance Security Agreement, dated as of July 6, 1995, by and among the Company, The SC
Fundamental Value Fund, L.P. and SC Fundamental Value BVI, Ltd. (13)
*5 Opinion of Klehr, Harrison, Harvey, Branzburg & Ellers.
10.1 Stockholders Voting Agreement, dated as of February 23, 1994, among the Company, Vanguard
Cellular Systems, Inc., S-C Rig Investments III, L.P., Evergreen Canada-Israel Investment &
Co., Ltd., Yaron Eitan and Winston Churchill.(6)
10.2 Asset Exchange Agreement, dated as of March 24, 1995, by and between the Company, Metro
Net Systems, Inc., NEXTEL Communications, Inc. and certain NEXTEL subsidiaries.(10)
10.3 FHMA(TM)Commercial Subscriber Unit Agreement, dated as of June 8, 1994, by and between the
Company and Mitsubishi Consumer Electronics America, Inc.(14)
10.4 FHMA(TM)Portable Subscriber Unit Agreement, dated as of May 19, 1995, by and between the
Company and Hughes Network Systems, Inc.(14)
*23.1 Consent of Coopers & Lybrand L.L.P. - Geotek Communications, Inc.
*23.2 Consent of Shachak & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak & Co. -
Oram Electric Industries Ltd.
*23.3 Consent of Touche Ross & Co. -
National Band Three Limited and predecessor companies
*23.4 Consent of KPMG -
Band Three Radio Limited
*23.5 Consent of Coopers & Lybrand GmbH -
Preussag Bundelfunk GmbH
*23.6 Consent of Dusseldorfer Treuhand-Gesellschaft Altenburg & Tewes AG -
DBF Bundelfunk GmbH & Co. Betriebs-KG
23.7 Consent of Klehr, Harrison, Harvey, Branzburg & Ellers (included in Exhibit 5)
24 Power of Attorney.(15)
</TABLE>
- ----------------------------
* Filed herewith.
II-4
<PAGE>
<TABLE>
<S> <C>
(1) Incorporated by reference to the Exhibits to the Company's Current
Report on Form 8-K with respect to events whose earliest date was
November 1, 1993.
(2) Incorporated by reference to the Exhibits to Amendment No. 1 to the Company's Registration Statement
on Form S-3 (Registration No. 33-72820) filed with the Commission on January 25, 1994.
(3) Incorporated by reference to the Exhibits to the Company's Current Report on Form 8-K dated July 5,
1994.
(4) Incorporated by reference to the Exhibits to the Company's Current Report on Form 8-K dated August 2,
1994.
(5) Incorporated by reference to the Exhibits to Amendment No. 1 to the Company's Registration Statement
on Form S-3 (Registration No. 33-85296) filed with the Commission on May 26, 1995.
(6) Incorporated by reference to the Exhibits to the Company's Annual Report on Form 10-K for the year
ended December 31, 1993.
(7) Incorporated by reference to the Exhibits to Post-Effective Amendment No. 2 to the Company's
Registration Statement on Form S-1 (Registration No. 33-42185) filed with the Commission on August 27,
1993.
(8) Incorporated by reference to the Exhibits to the Company's Current Report on Form 8-K dated May 26,
1995.
(9) Incorporated by reference to the Exhibits to the Company's Registration Statement on Form S-3
(Registration No. 33-64117) filed with the Commission on November 9, 1995.
(10) Incorporated by reference to the Exhibits to the Company's
Registration Statement on Form S-3 (Registration No. 33-72820) filed
with the Commission on December 10, 1993.
(11) Incorporated by reference to the Exhibits to the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
(12) Incorporated by reference to the Exhibits to the Company's Current Report on Form 8-K dated June 1,
1994.
(13) Incorporated by reference to the Exhibits to the Company's Current Report on Form 8-K dated July 6,
1995.
(14) Incorporated by reference to the Exhibits to the Company's Current
Report on Form 8-K dated June 8, 1994 (as amended on Form 8-K/A filed
on or about June 27, 1995).
(15) See Signature Page to this Registration Statement.
</TABLE>
II-5
<PAGE>
Item 17. Undertakings.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or
controlling-person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
of the registrant in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person of the registrant in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement;
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Montvale, New Jersey, on the 21st of November, 1995.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Yaron I. Eitan
---------------------------------
Yaron I. Eitan
President, Chief Executive Officer and Director
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Yaron Eitan, President, and Yoram
Bibring, Executive Vice President, and each of them, his true and lawful
attorney-in-fact and agent, with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
or all amendments, including any post-effective amendments, to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the above premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or either of them or his substitute or substitutes,
may lawfully do or cause to be done by virtue hereof.
This Power of Attorney may be executed in multiple counterparts, each
of which shall be deemed an original, but which taken together shall constitute
one instrument.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been duly signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
/s/ Winston J. Churchill Chairman of the Board; Director November 21, 1995
- -------------------------
Winston J. Churchill
/s/ Yaron I. Eitan President and Chief Executive Officer November 21, 1995
- -------------------------
Yaron I. Eitan (Principal Executive Officer); Director
/s/ Walter E. Auch Director November 21, 1995
- -------------------------
Walter E. Auch
/s/ George Calhoun Director November 21, 1995
- -------------------------
George Calhoun
/s/ Purnendu Chatterjee Director November 21, 1995
- -------------------------
Purnendu Chatterjee
/s/ Haynes G. Griffin Director November 21, 1995
- -------------------------
Haynes G. Griffin
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ Richard Krants Director November 21, 1995
- ------------------------
Richard Krants
/s/ Richard T. Liebhaber Director November 17, 1995
- ------------------------
Richard T. Liebhaber
/s/ Haim Rosen Director November 19, 1995
- ------------------------
Haim Rosen
/s/ Kevin W. Sharer Director November 20, 1995
- ------------------------
Kevin W. Sharer
/s/ William Spier Director November 21, 1995
- ------------------------
William Spier
/s/ Michael McCoy Chief Financial Officer (Principal November 21, 1995
- ------------------------
Michael McCoy Financial Officer)
/s/ Michael Carus Chief Accounting Officer (Principal November 21, 1995
- ------------------------
Michael Carus Accounting Officer)
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page No. in
Sequentially
Exhibit No. Numbered System
<S> <C> <C>
2.6 Stock Purchase Agreement, dated as of September 28, 1995,
by and among the Company, Geotek PST, Inc. and
RDC-Rafael Development Corporation
5 Opinion of Klehr, Harrison, Harvey, Branzburg & Ellers
23.1 Consent of Coopers & Lybrand - Geotek Communications, Inc.
23.2 Consent of Shachak & Co. -
PowerSpectrum Technology Ltd.
Consent of Shachak & Co. -
Oram Power Supplies (1990) Ltd.
Consent of Shachak & Co. -
Oram Electric Industries Ltd.
23.3 Consent of Touche Ross & Co. -
National Band Three Limited and predecessor companies
23.4 Consent of KPMG -
Band Three Radio Limited
23.5 Consent of Coopers & Lybrand GmbH -
Preussag Bundelfunk GmbH
23.6 Consent of Dusseldorfer Treuhand-Gesellschaft Altenburg & Tewes AG -
DBF Bundelfunk GmbH & Co. Betriebs-KG
</TABLE>
EXHIBIT 2.6
<PAGE>
===========================================
STOCK PURCHASE AGREEMENT
By and Among
GEOTEK COMMUNICATIONS, INC.,
GEOTEK PST, INC.
and
RDC-RAFAEL DEVELOPMENT CORPORATION LTD.
Dated as of
September 28, 1995
============================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C> <C> <C>
1. Purchase and Sale of Common Stock..................................................................... 1
1.1 Sale and Issuance............................................................................. 1
1.2 Closing....................................................................................... 2
2. Representations and Warranties of the Company......................................................... 2
3. Representations and Warranties of the Investor........................................................ 8
4. Conditions of Investor's Obligations at Closing....................................................... 10
5. Conditions of the Company's Obligations at Closing.................................................... 11
6. Limitations on Disposition............................................................................ 12
6.1 Securities Laws............................................................................... 12
6.2 Legends....................................................................................... 12
7. Registration Rights................................................................................... 12
7.1 Definitions................................................................................... 12
7.2 Registration.................................................................................. 13
7.3 Obligations of the Company.................................................................... 13
7.4 Furnish Information........................................................................... 14
7.5 Expenses of Registration...................................................................... 14
7.6 Indemnification and Contribution.............................................................. 14
7.7 Additional Registration Obligations........................................................... 16
8. Termination........................................................................................... 16
8.1 Termination by Mutual Written Consent......................................................... 16
8.2 Termination by the Company or the Investor.................................................... 16
8.3 Termination by the Investor................................................................... 17
8.4 Termination by the Company.................................................................... 17
9. Miscellaneous......................................................................................... 17
9.1 Survival of Warranties; Indemnity............................................................. 17
9.2 Successors and Assigns........................................................................ 18
9.3 Governing Law................................................................................. 18
9.4 Counterparts.................................................................................. 18
9.5 Captions and Headings......................................................................... 19
9.6 Notices....................................................................................... 19
9.7 Finder's Fee.................................................................................. 19
9.8 Amendments and Waivers........................................................................ 20
9.9 Reasonable Efforts............................................................................ 20
9.10 Severability.................................................................................. 20
9.11 Entire Agreement.............................................................................. 20
</TABLE>
i
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Table of Defined Terms
Exhibits
Exhibit A Assignment Agreement
Exhibit B Opinion of Company's Counsel
Exhibit C Opinion of Company's General Counsel
Exhibit D Opinion of PST's Counsel
Exhibit E Opinion of Investor's Counsel
Schedules
Schedule I Schedule of Exceptions
ii
<PAGE>
THE SECURITIES OF GEOTEK COMMUNICATIONS, INC. TO BE ISSUED HEREUNDER HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY OTHER JURISDICTION. SUCH
SECURITIES MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS
(AS DEFINED IN REGULATION S PROMULGATED UNDER THE SECURITIES ACT) IN THE ABSENCE
OF (I) A REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE RESALE OF SUCH
SECURITIES UNDER THE SECURITIES ACT OR (II) AN EXEMPTION FROM ALL APPLICABLE
REGISTRATION REQUIREMENTS.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is dated as of the 28th day of September,
1995, by and among GEOTEK COMMUNICATIONS, INC., a Delaware corporation (the
"Company"), GEOTEK PST, INC., a Delaware corporation ("GP") and RDC-RAFAEL
DEVELOPMENT CORPORATION LTD., a corporation organized under the laws of the
State of Israel (the "Investor").
WHEREAS, the Investor currently holds a debenture (the "Debenture")
issued to it by PowerSpectrum Technology Limited, a private company organized
under the laws of the State of Israel ("PST") which is convertible into 760,000
ordinary shares of PST (the "PST Ordinary Shares") and a perpetual capital note
to be issued by PST (the "PST Capital Note").
WHEREAS, the Investor also holds 400 management shares issued by PST
(the "PST Management Shares"). The PST Management Shares, together with the PST
Ordinary Shares and PST Capital Note, are collectively referred to as the "PST
Securities."
WHEREAS, the Investor currently has the right (without the requirement
of any consents or approvals), and has agreed, to convert the Debenture into the
PST Ordinary Shares and the PST Capital Note, and the Investor and the Company
have agreed that the Company, through GP, a wholly-owned subsidiary of the
Company, shall issue and sell to the Investor, in exchange for the PST
Securities, 1,800,000 shares of the Company's common stock, $.01 par value per
share (the "Common Stock").
WHEREAS, the Investor has also agreed to purchase from the Company, and
the Company has agreed to sell to the Investor, 338,028 shares of the Common
Stock for an aggregate purchase price of $3,000,000.
WHEREAS, all of the above transactions are to be effected on the terms
and conditions set forth below.
NOW, THEREFORE, the parties hereto agree as follows:
1. Purchase and Sale of Common Stock.
1.1 Sale and Issuance. Subject to the satisfaction of the
terms and conditions set forth in Sections 4 and 5 hereof, at the Closing, the
Company shall issue and sell to the Investor, and the Investor will purchase
from the Company, 2,138,028 shares of Common Stock, of which 1,800,000 shares
shall initially be issued by the Company to GP and then transferred
<PAGE>
by GP to the Investor. In consideration thereof, the Investor shall (i) transfer
to GP the PST Securities, and (ii) shall pay to the Company a purchase price of
$3,000,000 (the "Cash Purchase Price") payable by wire transfer of immediately
available funds to an account to be specified by the Company at least five day
priors to the Closing. The above-referenced transactions are hereinafter
collectively referred to as the "Transactions."
1.2 Closing. Subject to the satisfaction or waiver of the
conditions set forth in Sections 4 and 5 hereof, the closing of the Transactions
(the "Closing") shall take place at the offices of Zellermayer, Pelossof,
Advocates, Tel-Aviv, Israel or at such other place as may be agreed. The date
and time on which the Closing shall take place (the "Closing Date") shall be
determined as follows: The parties shall use their best efforts to cause the
Closing to take place at 10:00 a.m. Tel-Aviv time on October 12, 1995, provided
that either the Company or the Investor may postpone the Closing Date until
10:00 Tel-Aviv time on October 19, 1995 by giving written notice, on or before
October 10, 1996, to the other party that the applicable conditions cannot
practically be met by October 12, 1995. Further postponements to 10:00 a.m.
Tel-Aviv time on October 26 and October 31, 1995, respectively, can be effected
in accordance with the same procedure by giving such notice by October 17 and
October 24, 1995, respectively. The failure by a party to satisfy conditions to
Closing by October 31, 1995 shall constitute a breach of this Agreement thereby.
Notwithstanding the foregoing, if the Chief Scientist of the Ministry of
Industry and Trade of the State of Israel (the "Chief Scientist") has not given
his approval of the Transactions by October 31, 1995, the Closing shall take
place five business days after one party has notified the other that such
approval has been obtained, provided that no party shall be obligated to close
after November 30, 1995. No party shall be in breach of this Agreement as a
result of the failure to obtain such approval if such party made a good faith
attempt to obtain such approval.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, as of the date hereof and as of
the Closing, except as set forth in the Schedule of Exceptions attached hereto
as Schedule I (the "Schedule of Exceptions"):
(a) Organization and Qualification. Each of the Company and GP
is a corporation duly organized and validly existing under the laws of the State
of Delaware and has all requisite corporate power and authority to enter into
this and the other Transaction Documents (as hereinafter defined) and to
consummate the Transactions. PST is a private company duly organized and validly
existing under the laws of the State of Israel. The Company is duly qualified
and in good standing in each jurisdiction in which the property owned, leased or
operated by it or the nature of the business conducted by it makes such
qualification necessary and where the failure to be so qualified has or would
have a Material Adverse Effect (as defined below). The term "Material Adverse
Effect" means any change or effect that is or is reasonably likely to be
materially adverse to the business, results of operations, market value of the
Company's issued and outstanding capital stock, and/or financial condition of
the Company and/or the Subsidiaries (as defined below), taken as a whole.
(b) Subsidiaries. The Schedule of Exceptions sets forth each
Person (as defined below) in which the Company directly or indirectly owns any
of the capital stock or any partnership or other ownership interest (the
"Subsidiaries"). GP is a wholly-owned Subsidiary of the Company. Other than as
set forth on the Schedule of Exceptions, there are no outstanding
2
<PAGE>
preemptive rights, conversion rights, options, warrants or other rights or
agreements for the purchase or acquisition of any shares of the Subsidiaries.
The Subsidiaries were duly organized and are validly existing and in good
standing under the laws of the respective jurisdictions of their organization.
The Subsidiaries have not qualified to do business as foreign corporations in
any jurisdiction, and such qualification is not presently required in any
jurisdiction in which the failure so to qualify would have a Material Adverse
Effect.
(c) Capitalization. The Company's authorized capital consists
of 99,000,000 authorized shares of Common Stock, of which shares 51,537,849 were
issued and outstanding at August 31, 1995, and 4,000,000 authorized shares of
preferred stock, $.01 par value per share (the "Preferred Stock"), of which an
aggregate of 1,508,572.5 shares were issued and outstanding at July 31, 1995,
consisting of 444,445 shares of Series H Cumulative Convertible Preferred Stock,
20 shares of Series I Cumulative Convertible Preferred Stock, and 20 shares of
Series K Cumulative Convertible Preferred Stock, 1,062,925 shares of Series L
Cumulative Convertible Preferred Stock and 1,162.5 shares of Series M Cumulative
Convertible Preferred Stock.
Except as set forth on the Schedule of Exceptions, there are,
and at the Closing there will be, no other outstanding preemptive rights or
similar contractual or other rights to maintain any level of ownership of any
shares of capital stock of the Company nor any other conversion rights, options,
warrants or other rights or agreements for the purchase or acquisition from the
Company of any shares of its capital stock nor was the Company obligated, nor
will it be obligated, in any other manner to issue shares of capital stock or
other securities. Except as set forth in the Schedule of Exceptions, since July
31, 1995, the Company has not issued any shares of capital stock or other
securities other than upon conversion or exercise or otherwise as a result of
conversion rights, options, warrants and other rights or agreements for the
purchase of shares of its capital stock that were outstanding as of July 31,
1995.
(d) Authorization. All corporate action on the part of the
Company (and of GP and PST, to the extent applicable) necessary for the
authorization, execution and delivery of this Agreement, and the assignment
agreement by and between the Company and the Investor relating to the transfer
of the PST Securities in the form of Exhibit A attached hereto (the "Assignment
Agreement") (collectively, the "Transaction Documents") and the performance of
all obligations of the Company (and of GP and PST, to the extent applicable)
under the Transaction Documents has been taken. All corporate action on the part
of GP and the Company necessary for the authorization, issuance (or reservation
for issuance) and delivery of the Common Stock issuable hereunder will be taken
upon or prior to the Closing. Each of the Transaction Documents constitutes a
valid and legally binding obligation of the Company (and of GP and PST, to the
extent applicable), enforceable in accordance with its terms.
(e) Valid Issuance of Common Stock. When issued, transferred
and paid for pursuant hereto, the Common Stock issuable hereunder will (i) be
duly authorized and validly issued, fully paid and nonassessable and free and
clear of all liens, claims, charges, security interests, options, subscriptions,
calls, demands, obligations, warrants or other legal or equitable encumbrances
of whatever kind or nature or third party's rights whatsoever; and (ii)
constitute, as of the date hereof, 2.3% of the Company's outstanding Common
Stock on a fully diluted basis.
3
<PAGE>
(f) Organizational Documents and Corporate Records. The
Company has heretofore made available to the Investor true and complete copies
of the Certificate of Incorporation and Bylaws of the Company as in effect on
the date hereof. The minute books of the Company and its Subsidiaries, which
have been made available to the Investors for inspection, contain true and
complete records of all meetings and consents in lieu of meetings of the Board
of Directors and the stockholders or partners or other owners of the Company and
its Subsidiaries.
(g) Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority or other Person, including, without
limitation, the Federal Communications Commission (the "FCC"), on the part of
the Company or any of its Subsidiaries is required in connection with the
consummation of the Transactions, except as set forth in the Schedule of
Exceptions.
(h) Litigation. There is no action, suit, claim, demand,
proceeding or investigation (collectively, a "Claim") pending or, to the
Company's best knowledge, threatened against the Company or its Subsidiaries or
any of their respective properties which (i) questions the validity of the
Transaction Documents, or the right of the Company or PST to enter into the
Transaction Documents or to consummate the Transactions, or (ii) individually or
in the aggregate would reasonably be expected to have a Material Adverse Effect.
The Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. There are no Claims pending or, to
the best knowledge of the Company, threatened that would give rise to any right
of indemnification on the part of any director or officer of the Company or its
Subsidiaries, or the heirs, executors or administrators of such director or
officer, against the Company or its Subsidiaries.
(i) Compliance with Laws. Neither the Company nor any of its
Subsidiaries is or has been in violation of any applicable order, judgment,
injunction, award, decree or writ (collectively, "Orders"), or any applicable
law, statute, code, ordinance, regulation or other requirement (collectively
"Laws"), of any government or political subdivision thereof, or any agency or
instrumentality of any such government or political subdivision, or any court or
arbitrator (collectively, "Governmental Bodies") including, without limitation,
laws and regulations relating to the communications industry and environmental
laws, which violations either individually or in the aggregate could have a
Material Adverse Effect, and, to the knowledge of the Company, it has received
no written notice that any such violation has been alleged.
(j) Conflicting Instruments. The execution and delivery of
this Agreement does not, and the execution and delivery of the remaining
Transaction Documents will not, as of the date hereof and the Closing Date and
the consummation of the Transactions in compliance with the terms hereof and
thereof, will not, as of the Closing Date: (i) conflict with or result in any
violation of the corporation laws of the Company's, PST's or GP's jurisdiction
of incorporation or other applicable statutory requirements, or any provision of
the Company's, PST's or GP's Certificate of Incorporation, Bylaws, Articles of
Association and/or other applicable organizational documents, (ii) conflict
with, result in a violation or breach of, or constitute a default (or give rise
to any right of termination, revocation, cancellation or
4
<PAGE>
acceleration) under, any note, bond, mortgage, indenture, deed of trust,
license, lease, contract, commitment, agreement or arrangement to which the
Company (and/or Subsidiaries) or PST is a party or by which either of them is
bound, or by or to which any of their properties or assets may be bound or
subject, (iii) result in the creation or imposition of a lien on any properties
or assets owned or leased and operated by the Company (and/or Subsidiaries) or
PST, (iv) conflict with or result in a violation of any judgment, order, decree,
writ, injunction, statute, law, ordinance, rule or regulation applicable to the
Company or PST or any of their property or assets, or (v) violate or result in
the revocation, limitation or suspension of any Permits, as defined in
subsection (n) below, held by the Company (and/or Subsidiaries) or PST.
(k) Registration Rights. Except as provided in the Section 7
below or as described in the Schedule of Exceptions, the Company has not granted
or agreed to grant any registration rights under any applicable securities laws
to any individual, corporation, limited liability company, partnership,
association, trust or other entity or organization (each, a "Person").
(l) Intangible Property. The Schedule of Exceptions sets forth
a list of all patents, trademarks, copyrights, service marks and trade names
owned by the Company or its Subsidiaries, and all permits, grants and licenses
or other rights running to or from the Company or its Subsidiaries relating to
any of the foregoing. The Company and its Subsidiaries have the right to use (to
the Company's knowledge, free and clear of any claims or rights of others) all
trade secrets, know-how, processes, technology, blue prints and designs utilized
in or incident to their businesses as presently conducted. The Company and its
Subsidiaries have taken such action as was reasonably necessary to ensure that
they have not infringed any patent, copyrights, trademark, trade name or other
intangible rights of any other Person. Neither the Company nor its Subsidiaries
has received any written communications alleging that it has infringed any
patent, copyright, trademark, trade name or other intangible rights of any other
Person, and no proceedings in connection therewith have been instituted or are
pending. All Trade Secrets are protected against the use of such Trade Secrets
by other Persons to an extent and in an manner customary in the industries in
which the Company and its Subsidiaries operate. There is no present or, to the
knowledge of the Company, threatened use or encroachment of any Trade Secret.
The foregoing shall not derogate from any rights that the Company or PST may
have against the Investor, its affiliates or other Persons arising under prior
agreements or otherwise prior to the date hereof. The Company and its
Subsidiaries will have caused by the Closing in the case of employees at such
date and will, following Closing cause their respective future employees who use
trade secrets in the ordinary course of their employment to execute agreements
providing that such employees will hold in confidence and will not disclose to
other Persons in any way, or otherwise use in any way, trade secrets, products
of such Company or Subsidiaries, as the case may be, or other proprietary, trade
secret or confidential information. Such agreements will be, in respect of
employees at the Closing Date, in full force and effect as of the Closing Date.
(m) Tax Matters.
(i) The Company and its Subsidiaries have paid all
federal, state, local and foreign taxes (including, without limitation, to the
extent that such taxes exist and are applicable, income, profits, premium,
estimated, excise, sales, use, occupancy, gross receipts, franchise, ad valorem,
severance, capital levy, production, transfer, withholding, employment,
5
<PAGE>
unemployment compensation, payroll-related and property taxes, import duties and
other governmental charges and assessments), whether or not measured in whole or
in part by net income, and including deficiencies, interest, additions to tax or
interest, and penalties with respect thereto (hereinafter "Taxes" or,
individually, a "Tax"), required to be paid by any of them through the date
hereof, and shall timely pay all Taxes required (under the law and procedures of
the applicable taxing jurisdiction) to be paid by any of them before the Closing
(except to the extent such Taxes are reserved for on the combined balance sheet
of the Company and its Subsidiaries as of June 30, 1995 and with respect to
Taxes accruing after the date of such balance sheet that are similar in nature
and amount to those shown in such balance sheet). Neither the Company nor any
Subsidiary has any liability for Taxes subsequent to the date of its most recent
applicable tax return other than as arise in the ordinary course of business.
(ii) The Company and its Subsidiaries have timely filed
all reports, declarations, statements or other reports with respect to Taxes
("Tax Returns") required to be filed through the date hereof taking into account
any extensions permitted by law.
(iii) With respect to all Tax Returns of the Company and
its Subsidiaries, no extension of time is in force with respect to any date on
which any Tax Return was or is to be filed, and no waiver or agreement is in
force for the extension of time for the assessment or payment of any Tax.
(iv) There are no ongoing, pending or, to the Company's
best knowledge, threatened tax audits, assessments or litigation of (or relating
to) the Company or its Subsidiaries.
(n) Permits. The Company and its Subsidiaries have all
licenses, permits, orders or approvals of, and have made all required
registrations with, all Governmental Bodies that are material to the conduct of
the business of the Company or its Subsidiaries (collectively, "Permits"),
including, without limitation, all Permits relating to compliance with any
environmental laws, 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 the Company nor its
Subsidiaries have violated any of the terms thereof except where such violations
would not, individually or in the aggregate, have a Material Adverse Effect. The
Company, through its wholly owned Subsidiaries listed on Schedule 2(b) of the
Schedule of Exceptions, has acquired, or has entered into agreements to acquire,
licenses to operate Specialized Mobile Radio Systems (the "Systems") in the
Designated Filing Areas listed on Schedule 2(n) of the Schedule of Exceptions.
(o) Environmental Matters. (i) The operations of the Company
and its Subsidiaries comply and have complied with all applicable environmental
laws except where the failure to comply would not have a Material Adverse
Effect; (ii) the Company and its Subsidiaries have obtained all material
environmental, health and safety permits, licenses and approvals necessary for
its operations, all such permits, licenses and approvals are in effect, no
appeal is pending therefrom and no action to revoke the same is pending, and the
Company and each Subsidiary are in compliance with all material terms and
conditions thereof; and (iii) there has not been a release into the environment
of a hazardous substance in, on or under any real property, asset or facility
currently or previously owned, leased or operated by the Company or its
Subsidiaries, except where such release would not have a Material Adverse
Effect.
6
<PAGE>
(p) SEC Filings; Financial Statements. (a) The Company has
filed all forms, reports and documents required to be filed by it with the
Securities and Exchange Commission (the "SEC") since December 31, 1991, and has
heretofore made available to the Investors, in the form filed with the SEC
(excluding any exhibits thereto), (i) its Annual Reports on Form 10-K for the
fiscal years ended December 31, 1992, 1993 and 1994, respectively, (ii) all
proxy statements relating to the Company's meetings of stockholders (whether
annual or special) held since December 31, 1992, and (iii) all other forms,
reports and other registration statements filed by the Company with the SEC
since December 31, 1991 (the forms, reports and other documents referred to in
clauses (i), (ii) and (iii) above being referred to herein, collectively, as the
"SEC Reports"). The SEC Reports were prepared in accordance with the
requirements of the Securities Act of 1933, as amended (the "Securities Act"),
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as the
case may be, and the rules and regulations thereunder and did not at the time
they were filed contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated financial statements (including,
in each case, any notes thereto), contained in the SEC Reports filed by the
Company was prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and fairly and accurately present the financial
position, assets, liabilities, results of operations and cash flows of the
Company and its consolidated Subsidiaries as at the respective dates thereof and
for the respective periods indicated therein. Except and to the extent set forth
in the SEC Reports filed with the SEC prior to the date of this Agreement, the
Company and its Subsidiaries do not have any liability or obligation of any
nature (whether accrued, absolute, contingent or otherwise) other than
liabilities and obligations which would not, individually or in the aggregate,
have a Material Adverse Effect. There is no fact known to the Company that has
not been disclosed in the SEC Reports or in this Agreement, including the
Schedule of Exceptions, that is likely to have a Material Adverse Effect.
(q) Changes. Other than as set forth in the Schedule of
Exceptions, since June 30, 1995, there has not been, with respect to the
Company or any of its Subsidiaries:
(i) any damage, destruction or loss, whether or not
covered by insurance, which could reasonably be expected to have a Material
Adverse Effect;
(ii) any waiver by the Company or any of its Subsidiaries
of a valuable right or of a debt owed to it which could reasonably be expected
to have a Material Adverse Effect;
(iii) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or any of its
Subsidiaries, except in the ordinary course of business and which could not
reasonably be expected to have a Material Adverse Effect;
(iv) any change or amendment to a material contract or
arrangement by or to which the Company or any of its Subsidiaries or any of
their respective assets or properties are bound or subject which could
reasonably be expected to have a Material Adverse Effect;
7
<PAGE>
(v) any change by the Company in its accounting methods,
principles or priorities;
(vi) any material agreement entered into by the Company or
any of its Subsidiaries;
(vii) any sale, abandonment or other disposition of any of
its properties or assets except for inventory and equipment sold in the ordinary
course of business and the disposition of obsolete properties and assets; or
(viii) to the knowledge of the Company, any other event or
condition of any character which could reasonably be expected to have a Material
Adverse Effect.
(r) PST. The Company is fully aware of PST's financial,
business and other conditions and acknowledges that no representation or
warranty had been made by the Investor with respect to such matters nor has the
Company relied on any such representation or warranty in connection with the
Transactions.
(s) Accredited Investor; HSR Compliance. Each of the Company
and GP will, as of the Closing Date, be an "accredited Investor" within the
meaning of Rule 501 of Regulation D promulgated under the Securities Act, as
currently in effect. Assuming the accuracy of the Investor's representation in
Section 3(l), the Company is not required to make any filing under the HSR Act
(as defined below) in connection with the Transactions.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company, as of the date hereof, that:
(a) Organization and Qualification. The Investor is a
corporation duly organized and validly existing under the laws of the State of
Israel and at the Closing will have all requisite corporate power and authority
to enter into this Agreement and the other Transaction Documents and to
consummate the Transactions.
(b) Authorization. All corporate action on the part of the
Investor necessary for the authorization, execution and delivery of this
Agreement and the other Transaction Documents and the performance of all
obligations of the Investor under the Transaction Documents shall be taken upon
or prior to the Closing. Each of the Transaction Documents will constitute a
validly binding obligation of the Investor at the Closing, enforceable in
accordance with its terms.
(c) Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
governmental authority or other Person is required in connection with the
consummation of the Transactions by the Investor, except that a permit is
required from the Controller of Foreign Currency of the Bank of Israel.
(d) Litigation. There is no Claim pending or, to the
Investor's knowledge, threatened against the Investor which questions the
validity of the Transaction Documents, or the right of the Investor to enter
into the Transaction Documents or to consummate the Transactions.
8
<PAGE>
(e) Conflicting Instruments. The execution and delivery of
this Agreement does not, and the execution and delivery of the Transaction
Documents will not, as of the Closing Date, and the consummation of the
Transactions in compliance with the terms hereof and thereof, will not, as of
the Closing Date:
(i) conflict with or result in any violation of the Laws
of the Investor's jurisdiction of incorporation or other applicable statutory
requirements, or any provision of its organizational documents,
(ii) conflict with, result in a violation or breach of, or
constitute a default (or give rise to any right or termination, revocation,
cancellation or acceleration) under, any note, bond, mortgage, indenture, deed
of trust, license, lease, contract, commitment, agreement or arrangement to
which it is a party or by which it is bound, or by or to which any of its
properties or assets may be bound or subject,
(iii) result in the creation or imposition of a lien on
any properties or assets owned or leased and operated by the Investor, and
(iv) conflict with or result in a violation of any Order
or Law applicable to it or any of its property or assets.
(f) PST Securities. The Debenture shall be converted into the
PST Ordinary Shares and the PST Capital Note prior to the Closing. Other than
the PST Ordinary Shares, the PST Capital Note and the PST Management Shares, the
Investor has no direct or indirect interest or rights of any type in PST. The
Investor has good, marketable and unencumbered title to the PST Securities free
and clear of all liens, claims, voting agreements and rights of others, except
as provided in PST's Articles of Association or in the Joint Venture Agreement
dated May 14, 1992 among, inter alia, the Company and PowerSpectrum, Inc.
(g) Purchase Entirely for Own Account. This Agreement is made
with the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Common Stock to be issued hereunder will be acquired for the
Investor's own account, not as a nominee or agent, solely for investment
purposes and not with a view to the sale or distribution of any part thereof,
and that the Investor has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Investor further represents that it does not have any contract,
undertaking, agreement or arrangement with any Person to sell, transfer or grant
participation to such Person or to any third Person, with respect to any of the
Common Stock.
(h) Disclosure of Information. The Investor has had an
opportunity to ask questions and receive answers from the Company regarding the
Transactions, the Common Stock and the Company. The foregoing, however, does not
limit or modify the representations and warranties made by the Company in
Section 2 of this Agreement or the right of the Investor to rely thereon. The
Investor shall be entitled to rely upon any information contained in any filing,
press release or other publication made by the Company prior to Closing upon
which any purchaser of the Company's securities through a securities exchange is
entitled to rely.
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(i) Investment Experience. The Investor can bear the
economic risk of its investment in the Common Stock and the Investor has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of the investment in the Common Stock.
(j) Accredited Investor; Not U.S. Person. The Investor
will, as of the Closing Date, (i) be an "accredited investor" within the meaning
of Rule 501 of Regulation D promulgated under the Securities Act, as presently
in effect; and (ii) not be a "U.S. person" within the meaning of Rule 902 of
Regulation S promulgated under the Securities Act, as currently in effect.
(k) Unregistered Securities. The Investor understands that
the shares of Common Stock have not been registered under the Securities Act or
under any state securities laws, and that, under such laws, such securities may
not be resold in the United States or to a U.S. person without registration
under the Securities Act unless an exemption is available.
(l) HSR Compliance. The Investor's acquisition of Common
Stock hereunder is solely for the purpose of investment and, after giving effect
to such acquisition, the Investor (when aggregated with its ultimate parent
entity (as defined in the regulations promulgated under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act") and all entities
that such ultimate parent entity controls (as defined in the regulations
promulgated under the HSR Act)) directly or indirectly holds less than ten
percent of the outstanding voting securities (as defined in the regulations
promulgated under the HSR Act) of the Company.
4. Conditions of Investor's Obligations at Closing. The obligations
of the Investor under this Agreement are subject to the fulfillment at or
before the Closing of each of the following conditions, or their waiver by the
Investor in writing and in advance:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true at and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of the Closing.
(b) Performance. The Company shall have performed and complied
in all material respects with all agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
at or before the Closing.
(c) Compliance Certificate. The President and Chief Executive
Officer of the Company shall have delivered to the Investor at Closing a
certificate certifying that the conditions specified in Sections 4(a) and 4(b)
have been fulfilled.
(d) Delivery of Documents. The Investor shall have received
and the Company shall have delivered or caused to be delivered: (i) a certified
copy of the Certificate of Incorporation of the Company and all amendments
thereto; (ii) a copy of the By-Laws of the Company and all amendments thereto,
certified by the Secretary of the Company; (iii) incumbency certificates, board
resolutions and such other evidence of corporate authority and proceedings of
the Company, GP and PST for the transactions contemplated hereby and in
connection therewith as the Investor and its counsel shall reasonably request;
(iv) an opinion of counsel to the Company and GP in the form of Exhibit B; (v)
an opinion of the General Counsel
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to the Company as to certain telecommunications law matters in reasonably
satisfactory form relating to the matters set forth in Exhibit C attached
hereto; and (vi) an opinion of counsel to PST in the form of Exhibit D attached
hereto, with such changes as counsel to PST shall reasonably request. The
Investor may conclusively rely on such documents.
(e) Approvals and Consents. The Company shall have duly
obtained, received or effected (and all applicable waiting and termination
periods, if any, including any extensions thereof, under any applicable law,
statute, regulation or rule shall have expired or terminated) all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of, and shall have made all filings and effected all
notifications, registrations and qualifications with, all applicable
Governmental Bodies to the extent required to be obtained, received, effected or
filed by the Company for the issuance, sale and delivery of the shares of Common
Stock being issued at the Closing and the consummation of the Transactions.
(f) Share Certificates. The Investor shall have received
and the Company and GP, as applicable, shall have delivered or caused to be
delivered stock certificates evidencing the ownership of an aggregate of
2,138,028 shares of Common Stock.
5. Conditions of the Company's Obligations at Closing. The obligations
of the Company to the Investor under Section 1.1 of this Agreement are subject
to the fulfillment or waiver at or before the Closing of each of the following
conditions:
(a) Representations and Warranties. The representations and
warranties of the Investor contained in Section 3 shall be true at and as of the
Closing with the same effect as though such representations and warranties had
been made at and as of the date of the Closing.
(b) Performance. The Investor shall have performed and
complied in all material respects with all agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with at or before the Closing, including without limitation the
conversion of the Debenture into the PST Ordinary Shares and the PST Capital
Note.
(c) Compliance Certificate and Opinion. The President and
Chief Executive Officer of the Investor shall have delivered to the Company at
Closing a certificate certifying that the conditions specified in Sections 5(a)
and 5(b) have been fulfilled; and counsel to PST and the Investor shall have
delivered opinions in the form of Exhibits D and E, respectively, attached
hereto with such changes to Exhibit D as counsel to PST shall reasonably
request; provided that failure of counsel to PST to deliver such opinion shall
not constitute a breach of this Agreement by the Investor.
(d) Approvals and Consents. The Investor shall have duly
obtained, received or effected (and all applicable waiting and termination
periods, if any, including any extensions thereof, under any applicable law,
statute, regulation or rule shall have expired or terminated) all
authorizations, consents, approvals, licenses, franchises, permits and
certificates by or of, and shall have made all filings and effected all
notifications, registrations and qualifications with, all applicable
governmental and regulatory authorities to the extent required to be obtained,
received, effected or filed by the Investor for the consummation of the
Transactions.
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(e) Payment of Cash Purchase Price. The Investor shall have
paid the Cash Purchase Price in immediately available funds by wire transfer to
the account specified by the Company in accordance with Section 1.1 above.
(f) Assignment Agreement. The Investor shall have executed and
delivered the Assignment Agreement.
6. Limitations on Disposition.
6.1 Securities Laws. Without in any way limiting the covenants
set forth above, the Investor further agrees not to make any sale or disposition
of all or any portion of the Common Stock unless and until:
(i) There is then in effect a registration statement under
the Securities Act or the applicable law of any jurisdiction outside the United
States covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(ii) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with an opinion of
counsel, reasonably satisfactory to the Company, that such disposition is not in
violation of applicable securities laws.
(iii) Notwithstanding the foregoing, the Investor shall
not sell, transfer or otherwise dispose of the 1,800,000 shares of Common Stock
issued in exchange for the PST Securities for a period of two years from the
Closing Date without the Company's prior written consent; provided that, in the
case of transfers to Persons that control, are controlled by or are under common
control with, the Investor, such consent shall not be unreasonably withheld or
delayed, provided further that the transferee agrees to be bound by this
Agreement.
6.2 Legends. It is understood that the certificates evidencing
the Common Stock shall bear the following legend:
"These securities have not been registered under the United
States Securities Act of 1933, as amended (the "Securities Act"), or
the securities laws of any other jurisdiction. Such securities may not
be offered or sold in the United States or to U.S. persons (as defined
in Regulation S promulgated under the Securities Act) in the absence of
(i) a registration statement in effect with respect to the resale of
such securities under the Securities Act or (ii) an exemption from all
applicable registration requirements."
7. Registration Rights.
7.1 Definitions. For purposes of this Section 7:
(a) The term "register", "registered", and "registration"
refer to a registration effected by preparing and filing a registration
statement or similar document in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such registration statement or
document;
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(b) The term "Registrable Securities" means the 338,028 shares
of Common Stock to be issued to the Investor in consideration of the Cash
Purchase Price.
(c) The term "Holder" means the Investor.
7.2 Registration. The Company shall, as soon as practicable
after the Closing Date, but in no event more than 30 days after the Closing
Date, file a registration statement under the Securities Act with respect to the
resale of all of the Registrable Securities and shall use its good faith best
efforts to cause such registration statement to become effective within 60 days
after filing or earlier if practicable. The Company may include in such
registration statement securities held by third parties which are subject to
registration rights granted by the Company on or prior to the Closing Date.
7.3 Obligations of the Company. The Company shall, within the
time limits set forth in this Section 7, or if no specific time limit is
specified, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement
with respect to the Registrable Securities and use its best efforts to cause
such registration statement to become effective, and keep such registration
statement effective at all times for two years from the Closing Date or until
such earlier time as all securities registered thereby have been sold.
(b) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement, including but not limited to,
any amendments or supplements which must be prepared as a result of the
engagement of an underwriter by the Holder in the distribution of its
Registrable Securities.
(c) Furnish to the Holder such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Securities Act, and such other documents as it may
reasonably request in order to facilitate the disposition of Registrable
Securities owned by it.
(d) Use its best efforts to register and qualify the
securities covered by such registration statement under such other securities or
Blue Sky laws of such jurisdictions as shall be reasonably requested by the
Holder, provided that the Company shall not be required to qualify to do
business or to file a general consent to service of process in any such states
or jurisdictions.
(e) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form, with the managing underwriter of such offering. The Holder shall
also enter into and perform its obligations under such an agreement.
(f) Notify forthwith the Holder at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue
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statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing.
(g) In the case of an underwritten public offering, furnish,
on the date that such Registrable Securities are delivered to the underwriters
for sale in connection with a registration pursuant to this Section 7, (i) an
opinion, dated such date, of the counsel representing the Company for the
purposes of such registration, in such form and substance as is customarily
given to underwriters in an underwritten public offering, addressed to the
underwriters, and (ii) a letter, dated such date, from the independent certified
public accountants of the Company, in such form and substance as is customarily
given by independent certified public accountants to underwriters in an
underwritten public offering, addressed to the underwriters.
(h) Cause all Registrable Securities which are being
registered pursuant to this Section 7 to be included on the NASDAQ National
Market System or the then primary established securities market on which Common
Stock is then included.
7.4 Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action pursuant to this Section 7
with respect to the Registrable Securities that the Holder shall have furnished
to the Company such information regarding itself, the Registrable Securities
held by it, and the intended method of disposition of such securities as shall
be required to effect the registration of the Registrable Securities.
7.5 Expenses of Registration. All expenses (other than
underwriting discounts and commissions) incurred in connection with
registrations, filings or qualifications pursuant to this Section 7, including
without limitation all registration, filing and qualification fees, printers,
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the Holder shall be borne
by the Company.
7.6 Indemnification and Contribution. In connection with a
registration statement under this Section 7:
(a) To the extent permitted by law, the Company will indemnify
and hold harmless the Holder, any underwriter (as defined in the Securities Act)
and each person if any, who controls the Holder or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities (joint or several) to which they or any of them may
become subject under the Securities Act, the Exchange Act or any other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus (but only if such
is not corrected in the final prospectus) contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading (but only if such is not corrected in the final
prospectus), or (iii) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities under the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the
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Securities Act, the Exchange Act or any state securities law; and the Company
will pay to each the Holder, underwriter or controlling person, as incurred, any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that the indemnity agreement contained in this Section 7.6(a)
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld), nor shall the
Company be liable in any such case for any such loss, claim, damage, liability
or action to the extent that it arises out of or is based upon a violation which
occurs in reliance upon and in conformity with written information furnished
expressly for use in connection with such registration by the Holder,
underwriter or controlling person.
(b) To the extent permitted by law, the Holder will indemnify
and hold harmless the Company, each of its directors, each of its officers who
has signed the registration statement, each person, if any, who controls the
Company within the meaning of the Securities Act, any underwriter, and any
controlling person of any such underwriter, against any losses, claims, damages
or liabilities (joint or several) to which any of the foregoing persons may
become subject, under the Securities Act, the Exchange Act or other federal or
state law, insofar as such losses, claims, damages or liabilities (or actions in
respect thereto) arise out of or are based upon any Violation, in each case to
the extent (and only to the extent) that such Violation occurs in reliance upon
and in conformity with written information furnished by the Holder expressly for
use in connection with such registration; and the Holder will pay, as incurred,
any legal or other expenses reasonably incurred by any person intended to be
indemnified pursuant to this Section 7.6(b), in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the indemnity agreement contained in this Section 7.6(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder, which consent
shall not be unreasonably withheld; provided that in no event shall any
indemnity under this Section 7.6(b) exceed the net proceeds from the offering
received by the Holder.
(c) Promptly after receipt by an indemnified party under this
Section 7.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 7.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party who is
a named party in such action shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would, in the reasonable opinion of counsel to the
indemnifying party, be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
7.6, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 7.6. The indemnifying party shall not settle a
claim without the consent of
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the indemnified party which shall not be unreasonably withheld unless such
settlement includes monetary remedies only and includes the release of the
indemnified party of all liabilities related to such proceedings.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 7.6(a) is
applicable but for any reason is held to be unavailable from the Company or the
Holder, the Company and the Holder, as the case may be, shall contribute to the
aggregate losses, claims, damages and liabilities (including any investigation,
legal and other expenses incurred in connection with, and any amount paid in
settlement of, any action, suit or proceeding and/or any claims asserted) to
which the Company and the Holder may be subject in such proportion as is
appropriate to reflect the relative fault of the Company on the one hand, and
the Holder on the other, in connection with Violations which resulted in such
losses, claims, damages or liabilities. Notwithstanding the foregoing, the
Holder shall not be required to contribute any amount in excess of the net
proceeds received by the Holder from the Registrable Securities sold by the
Holder pursuant to the registration statement. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(e) The obligations of the Company and the Holder under this
Section 7.6 shall survive the completion of any offering of Registrable
Securities in a registration statement under this Section 7 or otherwise.
7.7 Additional Registration Obligations. In the event that (a)
the Investor is not legally permitted under United States securities laws to
sell the 765,000 shares of Common Stock with a restricted legend held by it
prior to the Closing Date pursuant to Rule 144 under the Securities Act (in
accordance with the volume limitations set forth therein) after such shares have
been held by the Investor for a period of two years, and/or (b) the Investor is
not legally permitted under United States securities laws to sell the 1,800,000
shares issued to in exchange for the PST Securities pursuant to Rule 144 under
the Securities Act (in accordance with the volume limitations set forth therein)
after such shares have been held for two years from the Closing Date, the
Company shall promptly after the end of the applicable two year period cause the
registration of the applicable shares for resale in accordance with the
preceding provisions of this Section 7.1 as if the applicable shares were
Registrable Securities; provided that the registration statement relating to
such shares shall be filed within 30 days after the later of (i) the end of the
applicable two year period and (ii) notice from the Investor requesting such
registration. The Company shall use its good faith best efforts to cause such
registration statement to become effective within 60 days after filing or
earlier if practicable.
8. Termination.
8.1 Termination by Mutual Written Consent. This Agreement
may be terminated and the transactions contemplated hereby may be abandoned, for
any reason, at any time prior to the Closing Date, by the mutual written consent
of the Company and the Investor.
8.2 Termination by the Company or the Investor. This
Agreement may be terminated and the transactions contemplated hereby may be
abandoned by action of the Company or Investor, if and to the extent that the
Closing shall not have occurred at or prior
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to 5:00 p.m., Tel-Aviv time, on October 31, 1995; provided that, if the approval
of the Chief Scientist has not been obtained by such date, this Agreement may
not be terminated prior to November 30, 1995; provided further that the right to
terminate this Agreement under this Section 8.2 shall not be available to any
party whose failure to fulfill any obligation under this Agreement has been the
cause of, or resulted in, the failure of the Closing Date to occur on or before
such date; or any court or governmental authority of competent jurisdiction
shall have issued an order, decree, writ or ruling or taken any other action, or
there shall be in effect any statute, rule or regulation, temporarily,
preliminarily or permanently restraining, enjoining or otherwise prohibiting the
consummation of the Transactions; provided, further, however, that a termination
in accordance with this Section 8.2 or Sections 8.3 or 8.4 shall not exclude
other remedies that may be available to the terminating party.
8.3 Termination by the Investor. Without limiting any
provision of Section 8.2, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned by action of the Investor if (a) the
Company shall have failed to comply in any material respect with any of the
covenants or agreements contained in this Agreement to be complied with or
performed by the Company at or prior to such date of termination, and the
Company shall not, within a reasonable period of time after notice of such
failure, have cured or commenced prompt and diligent measures which would
promptly cure such failure, (b) there shall have been a misrepresentation or
breach by the Company with respect to any representation or warranty made by it
in this Agreement and such misrepresentation or breach cannot be cured prior to
the Closing Date, or (c) the number of shares of Common Stock outstanding on a
fully diluted basis exceeds 100,000,000 as a result of an issuance that Investor
reasonably believes is likely to materially and adversely affect the market
value of the Common Stock it is to acquire hereunder.
8.4 Termination by the Company. Without limiting any provision
of Section 8.2, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned by action of the Company, at any time prior
to the Closing Date, if (a) the Investor shall have failed to comply in any
material respect with any of the covenants or agreements contained in this
Agreement to be complied with or performed by the Investor at or prior to such
date of termination and the Investor shall not, within a reasonable period of
time after notice of such failure, have cured or commenced prompt and diligent
measures which would promptly cure such failure, or (b) there shall have been a
misrepresentation or breach by the Investor with respect to any representation
or warranty made by the Investor in this Agreement and such misrepresentation or
breach cannot be cured prior to the Closing Date.
9. Miscellaneous.
9.1 Survival of Warranties; Indemnity. (a) The representations
and warranties of the Company and the Investor shall survive until the third
anniversary of the Closing Date, except that the representations and warranties
set forth in Sections 2(c), 2(d), 2(e), 2(m) and 3(f) shall survive until the
expiration of the applicable statute of limitations (or any extension thereof).
(b) Each party (the "Indemnitor") hereby indemnifies the other
party (the "Indemnitee") against and agrees to hold the other party harmless
from any and all damage, loss, liability and expense (including, without
limitation, reasonable expenses of investigation and
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attorneys' fees and expenses in connection with any action, suit or proceeding
brought against the Indemnitee) ("Losses") incurred or suffered by the
Indemnitee arising out of the inaccuracy of any of the representations or
warranties made by the Indemnitor to the extent such representation or warranty
has survived the closing as provided in Section 9.1(a) above. The Indemnitee
shall give prompt written notice to the Indemnitor of the assertion of any claim
for which indemnity may be sought hereunder, specifying with reasonable
particularity the basis therefor, together with any supporting information
reasonably requested by the Indemnitee, and the amount of the Loss. If any
amount is due by the Indemnitor to an Indemnitee pursuant to this Section
9.1(b), the Indemnitor will make such payment not later than 60 days after
receipt by the Indemnitor of the notice and information referred to above.
(c) The Indemnitee shall give prompt notice to the Indemnitor
of the commencement of any suit, action or proceeding against such Indemnitee in
respect of which indemnity may be sought hereunder. The Indemnitor may, at its
own expense, participate in and, upon notice to the Investor, assume the defense
of any such suit, action or proceeding; provided that (i) the Indemnitor's
counsel is reasonably satisfactory to the Indemnitee, and (ii) the Indemnitor
shall thereafter consult with the Indemnitee upon the Indemnitee's reasonable
request for such consultation from time to time with respect to such suit,
action or proceeding. If the Indemnitor assumes such defense, the Indemnitee
shall have the right (but not the duty) to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel employed by
the Indemnitor. The Indemnitor shall be liable for the fees and expenses of
counsel employed by the Indemnitee for any period during which the Indemnitor
has not assumed the defense thereof. Whether or not the Indemnitor chooses to
defend or prosecute any claim, all of the parties hereto shall cooperate in the
defense or prosecution thereof. The Indemnitor shall not be liable under this
Section 9.1 for any settlement effected without its consent or resulting from a
proceeding against the Indemnitee in which the Indemnitor was not permitted an
opportunity to participate, of any claim, litigation or proceeding in respect of
which indemnity may be sought hereunder unless (x) such settlement includes an
unconditional release of the Indemnitor from all liability on claims that are
the subject matter of such claim, litigation or proceeding, and (y) such
settlement shall not require that the Indemnitor incur any obligation (monetary
or otherwise) or forego any rights. The Indemnitor shall not effect any
settlement relating to a proceeding against the Indemnitee without the consent
of the Indemnitee (which consent shall not be unreasonably withheld), unless
such settlement includes money damages only and an unconditional release of the
Indemnitee from all Losses relating to such proceeding.
9.2 Successors and Assigns. The provisions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and
assigns of the parties hereto; provided that neither the Company nor the
Investor may assign any of its rights (including without limitation rights under
Section 7) or obligations hereunder without the prior written consent of the
other party. Nothing in this Agreement, express or implied, is intended to
confer upon any party other than the parties hereto or their respective
successors and permitted assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
9.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
its conflict of laws rules.
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9.4 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
9.5 Captions and Headings. The captions and headings used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
9.6 Notices. Unless otherwise provided, any notice or other
communication required or permitted to be given or effected under this Agreement
shall be in writing and shall be deemed effective upon personal or facsimile
delivery to the party to be notified or three business days after deposit with
an internationally recognized courier service, delivery fees prepaid, and
addressed to the party to be notified at the following respective addresses, or
at such other addresses as may be designated by written notice; provided that
any notice of change of address shall be deemed effective only upon receipt:
If to the Company or GP: Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attn: Y. Eitan, President and Chief
Executive Officer
Fax: (201) 930-9614
with a copy to: Klehr, Harrison, Harvey, Branzburg & Ellers
1401 Walnut Street
Philadelphia, PA 19102
Attn: Leonard M. Klehr, Esquire
Fax: (215) 568-6603
If to the Investor: RDC-Rafael Development Corporation Ltd.
P.O. Box 2250
Haifa, Israel
Attn: Mr. Reuven Kruppik
Fax: 011-972-3-566-0167
With a copy to: Zellermayer, Pelossof, Advocates
Europe House
37 Shaul Ha'Melech Boulevard
Tel-Aviv 64928 Israel
Attn: Michael Zellermayer, Adv.
Fax: 011-972-3-695-2884
Failure or delay in delivering a copy of any notice hereunder
to a person (other than a party) designated by a party for receiving a copy
shall not derogate from the effectiveness of the delivery of such notice to such
party.
9.7 Finder's Fee. The Company, on the one hand, and the
Investor, on the other hand, represents and warrants to the other party hereto
that neither it nor any of its
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officers, directors, general partners, agents, employees or affiliates, has
engaged or authorized any broker or finder to act, directly or indirectly, on
its behalf, in connection with the transactions contemplated by this Agreement,
or has consented to or acquiesced in anyone so acting, and it knows of no claim
by any other Person for compensation from it for so acting or of any basis for
such a claim. The provisions of this Section 9.7 shall survive any termination
of this Agreement.
9.8 Amendments and Waivers. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the Investor.
9.9 Reasonable Efforts. Subject to the terms and conditions of
this Agreement, each party will use all reasonable efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to consummate the
Closing of the Transactions, including, without limitation, using all reasonable
efforts to assist the other party in satisfying the conditions set forth in
Sections 4 and 5 hereof.
9.10 Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provisions shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
9.11 Entire Agreement. This Agreement, including the Exhibits
and Schedule hereto, collectively constitute the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, understandings and discussions between them, and all documents
delivered by or on behalf of the Company to the Investor and its agents and
representatives, with respect to such subject matter. The Exhibits and Schedule
of Exceptions hereto form an integral part of this Agreement.
20
<PAGE>
IN WITNESS WHEREOF, the parties, each by its duly authorized signatory,
have executed this Agreement as of the date first above-written.
GEOTEK COMMUNICATIONS, INC.
By: _/s/__________________________
Name: ___________________
Title:___________________
GEOTEK PST, INC.
By: _/s/__________________________
Name: ___________________
Title: __________________
RDC-RAFAEL DEVELOPMENT CORPORATION LTD.
By: _/s/__________________________
Name:____________________
Title: __________________
21
<PAGE>
TABLE OF DEFINED TERMS
<TABLE>
<CAPTION>
Term Section Where Defined
<S> <C>
"Accredited Investor" 3(j)
"Assignment Agreement" 2(d)
"Cash Purchase Price" 1.1
"Chief Scientist" 1.2
"Claim" 2(h)
"Closing" 1.2
"Common Stock" Preamble
"Company" Preamble
"Debenture" Preamble
"Exchange Act" 2(p)
"FCC" 2(g)
"Governmental Bodies" 2(i)
"Holder" 7.1(c)
"HSR Act" 3(l)
"Indemnitee" 8.1(b)
"Indemnitor" 8.1(b)
"Investor" Preamble
"Laws" 2(i)
"Losses" 8.1(b)
"Material Adverse Effect" 2(a)
"Orders" 2(i)
"PST" Preamble
<PAGE>
<CAPTION>
Term Section Where Defined
"PST Ordinary Shares" Preamble
"PST Capital Note" Preamble
"PST Management Shares Preamble
"PST Securities" Preamble
"Permits" 2(n)
"Person" 2(k)
"Preferred Stock" 2(c)
"Purchase Price" 1.1
"Register, Registered, Registration" 7.1(a)
"Registrable Securities" 7.1(b)
"Restricted Securities" 3(k)
"SEC" 2(p)
"SEC Reports" 2(p)
"Schedule of Exceptions" 2
"Securities Act" 2(p)
"Subsidiaries" 2(b)
"Systems" 2(n)
"Tax" or "Taxes" 2(m)(i)
"Tax Returns" 2(m)(ii)
"Transactions" 1.1
"Transaction Documents" 2(d)
</TABLE>
<PAGE>
EXHIBIT 5
<PAGE>
[KLEHR, HARRISON, HARVEY, BRANZBURG & ELLERS LETTERHEAD]
November 22, 1995
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Gentlemen:
We have acted as counsel to Geotek Communications, Inc., a Delaware
corporation (the "Company"), in connection with the preparation of the Company's
registration statement on Form S-3 filed with the Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the "Act")
on or about November 22, 1995 (the "Registration Statement"). The Registration
Statement relates to the resale by a certain shareholder of the Company of
338,028 shares of the Company's common stock, par value $.01 per share (the
"Common Stock") issued to such shareholder on October 31, 1995 pursuant to a
Stock Purchase Agreement, dated September 28, 1995, by and among the Company and
the other signatories thereto (the "Purchase Agreement").
We have examined and relied upon the original, or copies certified to our
satisfaction, of (i) the Amended and Restated Certificate of Incorporation
(including all Certificates of Designation filed in connection therewith) and
the By-Laws of the Company, as amended; (ii) the minutes and records of the
corporate proceedings with respect to the issuance of the shares of Common Stock
described above; and (iii) such other corporate documents, records and other
certificates as we have deemed necessary as a basis for the opinion hereinafter
set forth.
In our examination of the foregoing documents, we have assumed, without any
independent investigation or verification of any kind, (i) the genuineness of
all signatures on, and the authenticity and completeness of, all documents
submitted to us as originals; and (ii) the conformity to original documents and
completeness of all documents submitted to us as certified, conformed or
photostatic copies.
As to various questions of fact material to this opinion, we have relied, to
the extent we deemed reasonably appropriate, upon representations or
certificates of officers of the Company, without independent verification of
their accuracy.
<PAGE>
Geotek Communications, Inc.
November 22, 1995
Page 26
Based upon and subject to the foregoing and subject to the qualifications
contained below, we are of the opinion that the 338,028 shares of Common Stock
which are the subject of the Registration Statement have been duly authorized
and validly issued and are fully-paid and non-assessable.
We have made such examinations of the Delaware General Corporation Law as we
have deemed relevant for this opinion. We do not express any opinion as to the
laws of any state or jurisdiction other than the Delaware General Corporation
Law.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement. In
giving such consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the Act, or the Rules and
Regulations of the SEC promulgated thereunder.
Very truly yours,
EXHIBIT 23.1
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND L.L.P.]
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration Statement of
Geotek Communications, Inc. (the "Company") on Form S-3 of our report dated
March 30, 1995 (August 28, 1995 as to Note 19), on our audits of the
consolidated financial statements and consolidated financial statement schedule
of the Company as of December 31, 1994 and 1993, and for the years ended
December 31, 1994, 1993 and 1992, which report is included in the Company's
Annual Report on Form 10-K/A#3. Our report contains an emphasis of a matter
paragraph related to significant transactions with related parties in 1992. We
also consent to the reference to our firm under the caption "Experts" in this
Registration Statement.
COOPERS & LYBRAND L.L.P.
New York, New York
November 20, 1995
EXHIBIT 23.2
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of Geotek Communications, Inc. (the
"Company") on Form S-3 of our report, dated February 14, 1995, with respect to
the financial statements of PowerSpectrum Technology Ltd. ("PST") as of December
31, 1994 and 1993, and for the year ended December 31, 1994 and the fifteen
month period ended December 31, 1993, and of our report, dated January 17, 1993,
with respect to the financial statements of PST as of September 30, 1992, and
for the three month period then ended, which reports are included in the annual
report of the Company on Form 10-K, as amended, for the fiscal year ended
December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
November 20, 1995
Tel Aviv, Israel
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of Geotek Communications, Inc. (the
"Company") on Form S-3 of our report, dated February 24, 1993, with respect to
the financial statements of Oram Power Supplies (1990) Ltd. as of December 31,
1992 and for the year then ended, included in the annual report of the Company
on Form 10-K, as amended, for the fiscal year ended December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
November 20, 1995
Tel Aviv, Israel
<PAGE>
[LETTERHEAD OF SHACHAK & CO.]
CONSENT OF INDEPENDENT ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement of Geotek Communications, Inc. (the
"Company") on Form S-3 of our report, dated February 24, 1993, with respect to
the financial statements of Oram Electric Industries Ltd. as of December 31,
1992 and for the year then ended, included in the annual report of the Company
on Form 10-K, as amended, for the fiscal year ended December 31, 1994.
Shachak & Co.
Certified Public Accountants (Isr.)
November 20, 1995
Tel Aviv, Israel
EXHIBIT 23.3
<PAGE>
[LETTERHEAD OF TOUCHE ROSS & CO.]
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Geotek Communications, Inc. of (i) our report dated June 10, 1993
with respect to the financial statements of National Band Three Limited, (ii)
our report dated November 24, 1992 with respect to the financial statements of
GEC-Marconi Communications Networks Limited and (iii) our report dated January
27, 1993 with respect to the financial statements of Vodanet Limited, each
appearing in the Current Report on Form 8-K/A of Geotek Communications, Inc.,
dated June 18, 1993.
TOUCHE ROSS & CO.
London, England
November 21, 1995
EXHIBIT 23.4
<PAGE>
[LETTERHEAD OF KPMG]
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Band Three Radio Limited
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Geotek Communications, Inc. (the "Company") of our report dated 15
July 1991, relating to the Band Three Radio Limited statements of the net loss
and cash flows for the year ended 31 March 1991, which report was included in
the Current Report on Form 8-K/A of the Company, dated 18 June 1993.
KPMG
Reading, England
20 November 1995
EXHIBIT 23.5
<PAGE>
[LETTERHEAD OF COOPERS & LYBRAND GmbH]
CONSENT OF INDEPENDENT AUDITORS RELATING TO
PREUSSAG BUNDELFUNK GMBH, SALZGITTER/GERMANY
As independent auditors, we hereby consent to the incorporation by reference in
this Registration Statement of Geotek Communications, Inc. (the "Company") on
Form S-3 of our report, dated August 30, 1994, relating to the balance sheet of
Preussag Bundelfunk GmbH as of September 30, 1993 and the related statement of
operations, shareholders' equity and cash flow for the year then ended, which
report was included in the Current Report on Form 8-K of the Company, dated July
5, 1994, as amended.
Hannover,
November 21, 1995
Coopers & Lybrand GmbH
Wirtschaftsprufungsgesellschaft
EXHIBIT 23.6
<PAGE>
[LETTERHEAD OF ALTENBURG & TEWES AG]
Consent of Independent Accountants
We consent to the incorporation by reference in this Registration Statement on
Form S-3 of Geotek Communications, Inc. (the "Company") of our report dated
September 6, 1994, on our audit of the financial statements of DBF Bundelfunk
GmbH & Co. Betriebs-KG as of December 31, 1993, and for the year ended December
31, 1993, which report appears in the Company's Current Report on Form 8-K dated
August 2, 1994, as amended.
Wuppertal, November 20, 1995
ALTENBURG & TEWES AG
WIRTSCHAFTSPRUFUNGSGESELLSCHAFT
former
DUSSELDORFER TREUHAND-GESELLSCHAFT
ALTENBURG & TEWES AG
WIRTSCHAFTSPRUFUNGSGESELLSCHAFT
STEUERBERATUNGSGESELLSCHAFT
Berg Spielberg
Wirtschaftsprufer Wirtschaftsprufer
