<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 7)*
GEOTEK COMMUNICATIONS, INC.
---------------------------------------------
(Name of Issuer)
Common Stock, $.01 Par Value
---------------------------------------------
(Title of Class of Securities)
373654102
--------------------
(CUSIP Number)
Stephen M. Vine, Esq.
Akin, Gump, Strauss, Hauer & Feld, L.L.P.
399 Park Avenue
New York, New York 10022
(212) 872-1000
---------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
April 4, 1996
-------------------------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with the statement / /. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d- 1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter disclosure
provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Continued on following page(s)
Page 1 of 52 Pages
Exhibit Index: Page 8
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SCHEDULE 13D
CUSIP NO. 373654102 PAGE 2 OF 52 PAGES
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
S-C RIG INVESTMENTS-III, L.P.
2 Check the Appropriate Box If a Member of a Group*
a. /X/
b. / /
3 SEC Use Only
4 Source of Funds*
WC
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 5,916,514
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 5,916,514
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
5,916,514
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* / /
13 Percent of Class Represented By Amount in Row (11)
9.40%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
SCHEDULE 13D
CUSIP NO. 373654102 PAGE 3 OF 52 PAGES
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
S-C RIG CO.
2 Check the Appropriate Box If a Member of a Group*
a. /X/
b. / /
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) / /
6 Citizenship or Place of Organization
Delaware
7 Sole Voting Power
Number of 5,916,514
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 5,916,514
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
5,916,514
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* / /
13 Percent of Class Represented By Amount in Row (11)
9.40%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
SCHEDULE 13D
CUSIP NO. 373654102 PAGE 4 OF 52 PAGES
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
PURNENDU CHATTERJEE
2 Check the Appropriate Box If a Member of a Group*
a. /X/
b. / /
3 SEC Use Only
4 Source of Funds*
PF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) / /
6 Citizenship or Place of Organization
United States
7 Sole Voting Power
Number of 6,136,514
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 6,136,514
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
6,136,514
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain
Shares* / /
13 Percent of Class Represented By Amount in Row (11)
9.75%
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 5
PAGE 5 OF 52 PAGES
This Amendment No. 7 to Schedule 13D relates to the shares of common
stock, $0.01 par value (the "Shares"), of Geotek Communications, Inc. (the
"Issuer") and amends the initial statement on Schedule 13D, dated November 9,
1993, and all prior amendments thereto (collectively, the "Initial Statement").
This Amendment No. 7 is being filed to report the extension by S-C Rig
Investments-III, L.P. ("S-C Rig III") of credit to the Issuer in the amount of
$40,000,000 pursuant to the 1996 Senior Loan Agreement (as such is defined
herein). Capitalized terms used herein but not defined herein shall have the
meanings ascribed to them in the Initial Statement. The information set forth
in the Initial Statement is amended as set forth herein.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As of April 4, 1996, the Issuer and S-C Rig III entered into a loan
agreement (the "1996 Senior Loan Agreement"), a copy of which is attached as
Exhibit J hereto. Pursuant to the terms of the 1996 Senior Loan Agreement, on
April 4, 1996, S-C Rig III agreed to make loans to the Issuer in a minimum
principal amount with regard to each loan of US$5,000,000 to or for the benefit
of the Issuer, through the use of a credit facility (the "Credit Facility"), up
to an aggregate principal amount of US$40,000,000. S-C Rig III has agreed to
expend up to an aggregate of $40,000,000 to fund the Credit Facility. S-C Rig
III will obtain the funds for the Credit Facility from its partners. Such
partners would obtain the funds from working capital or personal funds.
In consideration for the Credit Facility, on April 4, 1996, S-C Rig III
received from the Issuer a warrant (the "April Warrant") to purchase 4,210,526
Shares at an exercise price of $9.50 per Share (the amount and exercise price
of which may be adjusted from time to time as set forth in the April Warrant).
ITEM 4. PURPOSE OF TRANSACTION.
S-C Rig III entered into the 1996 Senior Loan Agreement with the Issuer
for investment purposes.
The April Warrant was issued on the terms set forth in the form
attached as Exhibit K hereto. The April Warrant confers on holders of the April
Warrant the rights provided for therein. The April Warrant will initially be
convertible into 4,210,526 Shares, for a period beginning on the date (the
"Initial Exercise Date") on which the Issuer amends its Articles of
Incorporation to increase the number of Shares authorized in order to allow for
the reservation of the full number of Shares issuable upon exercise of the April
Warrant and ending on April 4, 2001. In the event the Initial Exercise Date does
not occur on or prior to July 31, 1996, the 1996 Senior Loan Agreement and the
April Warrant shall automatically be terminated, S-C Rig III shall no longer
have any rights under the April Warrant and the Credit Facility shall be
terminated.
None of the Reporting Persons, nor, to the best of their knowledge, any
of the other individuals identified in response to Item 2, has any plans or
proposals which relate to or would result in any of the transactions described
in subparagraphs (a) through (j) of Item 4 of Schedule 13D. The Reporting
Persons reserve the right to acquire additional securities of the Issuer, to
dispose of such securities at any time or to formulate other purposes, plans or
proposals regarding the Issuer or any of its securities, to the extent deemed
advisable in light of general investment and trading policies, market
conditions or other factors.
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PAGE 6 OF 52 PAGES
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) (i) The aggregate number of Shares of which each of S-C Rig III and
S-C Rig Co. may be deemed a beneficial owner is 5,916,514 (approximately 9.40%
of the total number of Shares which would be outstanding assuming the exercise
or conversion by S-C Rig III of all of the convertible securities that it
holds). This number consists of (i) 4,444,450 Shares issuable upon conversion of
the Series H shares, (ii) 851,064 Shares issuable upon conversion of the Series
I Shares and (iii) 621,000 Shares issuable upon the exercise of the 621,000
Warrants.
Shares issuable upon exercise of the April Warrant are not reported
herein as being beneficially owned by the Reporting Persons because the ability
to exercise such warrant is contingent on shareholder approval of the increase
in number of authorized Shares.
(ii) The aggregate number of Shares of which Dr. Chatterjee may be
deemed a beneficial owner is 6,136,514 (approximately 9.75% of the total number
of Shares which would be outstanding assuming the exercise or conversion of all
convertible securities of which Dr. Chatterjee may be deemed the beneficial
owner). This number consists of (i) the 5,916,514 Shares which S-C Rig III may
be deemed to own beneficially, (ii) 20,000 Shares issuable upon exercise of the
options held directly by Dr. Chatterjee and (iii) 200,000 Shares issuable upon
exercise of the options held by XTEC.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
Except as set forth above and as described in previous filings, the
Reporting Persons do not have any contracts, arrangements, understandings or
relationships with respect to any securities of the Issuer.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
(h) Power of Attorney, dated May 31, 1995, granted by Purnendu Chatterjee
in favor of Peter Hurwitz (filed as Exhibit H to Amendment No. 6 to the Initial
Statement and incorporated herein by reference).
(j) 1996 Senior Loan Agreement dated as of April 4, 1996 between Geotek
Communications, Inc. and S-C Rig Investments-III, L.P.
(k) Form of the April Warrant issued by Geotek Communications, Inc. to S-C
Rig Investments-III, L.P.
(l) Joint Filing Agreement, dated as of April 11, 1996, by and among S-C
Rig Investments-III, L.P., S-C Rig Co. and Purnendu Chatterjee.
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PAGE 7 OF 52 PAGES
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
April 11, 1996 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG Co.
General Partner
By: /s/ Peter Hurwitz
---------------------------
Peter Hurwitz
Vice President
April 11, 1996 S-C RIG Co.
By: /s/ Peter Hurwitz
---------------------------
Peter Hurwitz
Vice President
April 11, 1996 PURNENDU CHATTERJEE
By: /s/ Peter Hurwitz
---------------------------
Peter Hurwitz
Attorney-in-Fact
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PAGE 8 OF 52 PAGES
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT PAGE
<S> <C> <C>
H Power of Attorney, dated May 31, 1995, granted by
Purnendu Chatterjee in favor of Peter Hurwitz (filed as
Exhibit H to Amendment No. 6 to the Initial Statement and
incorporated herein by reference)
J 1996 Senior Loan Agreement dated as of April 4, 1996 between
Geotek Communications, Inc. and S-C Rig Investments-III, L.P. 9
K Form of the April Warrant issued by Geotek Communications,
Inc. to S-C Rig Investments-III, L.P. 30
L Joint Filing Agreement, dated as of April 11, 1996,
by and among S-C Rig Investments-III, L.P., S-C Rig Co. and
Purnendu Chatterjee 52
</TABLE>
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PAGE 9 OF 52 PAGES
EXHIBIT J
SENIOR LOAN AGREEMENT
THIS SENIOR LOAN AGREEMENT (this "Agreement") is made this 4th day of
April, 1996, by and between GEOTEK COMMUNICATIONS, INC., a Delaware corporation
(the "Borrower") and S-C Rig Investments-III, L.P., a Delaware limited
partnership (the "Lender"). The parties hereto, intending to be legally bound
hereby, covenant and agree as follows:
BACKGROUND
The Borrower has requested the Lender to extend credit in order to
enable the Borrower, under the terms and subject to the conditions set forth in
this Agreement, to borrow up to the sum of Forty Million Dollars
($40,000,000.00) (the "Credit Facility"). Accordingly, the Borrower and the
Lender, intending to be legally bound, covenant and agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
I.1 "Affiliate" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Borrower or
any of its Subsidiaries. A Person shall be deemed to control another Person if
the controlling Person owns 10% or more of any class of voting securities of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
I.2 "Agreement Accounting Principles" means GAAP in effect at the time of
the preparation of the financial statements referred to in Section 4.4, applied
in a manner consistent with that used in preparing such statements.
I.3 "Article" means an article of this Agreement unless another document is
specifically referenced.
I.4 "Business Day" means a day on which banks are open for business in New
York, New York.
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PAGE 10 OF 52 PAGES
I.5 "Capital Stock" means, with respect to any Person, any and all shares,
interests, participations, rights in or other equivalents (however designated)
of such Person's capital stock, and any rights (other than debt securities
convertible into capital stock), warrants or options exchangeable for or
convertible into such capital stock.
I.6 "Commitment" means the obligation of the Lender to make the Loans
available to the Borrower in the maximum principal amount of Forty Million
Dollars ($40,000,000.00).
I.7 "Commitment Period" means the period commencing on the date hereof and
ending on the Funding Cutoff Date.
I.8 "Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any Subsidiary, are treated
as a single employer under Section 414(b) or 414(c) of the Internal Revenue Code
of 1986, as amended from time to time.
I.9 "Default" means an event which with the giving of notice or the passage
of time, or both, would constitute an Event of Default.
I.10 "Disclosure Letter" means the letter delivered by the Borrower to the
Lender pursuant to Article IV hereof, which letter shall describe, on a
Section-by-Section basis, any exceptions to the representations and warranties
set forth in such Article.
I.11 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
I.12 "Event of Default" means each of the events set forth in Article VI.
I.13 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time.
I.14 "Federal Bankruptcy Code" means Title 11, United States Code, as
amended from time to time.
I.15 "Funding Cutoff Date" means the earlier of (i) April 4, 1998 or (ii)
the date on which the Commitment is otherwise terminated in accordance with the
terms hereof.
I.16 "Funding Date" means the Initial Funding Date and each Subsequent
Funding Date.
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PAGE 11 OF 52 PAGES
I.17 "GAAP" means generally accepted accounting principles in the United
States of America, consistently applied.
I.18 "Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person or otherwise assures any creditor of
such other Person against loss, including, without limitation, any comfort
letter, operating agreement or take-or-pay contract and shall include, without
limitation, the contingent liability of such Person in connection with any
application for a Letter of Credit. When used as a verb, the words "guaranty"
and "guarantee" shall have correlative meanings.
I.19 "Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
property (other than accounts payable arising in the ordinary course of such
Person's business on terms customary in the trade), (iii) obligations, whether
or not assumed, secured by Liens on property now or hereafter owned or acquired
by such Person, (iv) obligations which are evidenced by notes, acceptances or
other similar instruments (including interest rate protection and other
derivative agreements), (v) Capitalized Lease Obligations and (vi) obligations
for which such Person is obligated pursuant to a Guaranty.
I.20 "Initial Funding Date" means the Business Day on which the Lender
makes the first Loan to the Borrower hereunder.
I.21 "Initial Loan" means the Loan to be made to the Borrower on the
Initial Funding Date.
I.22 "Investment" of a Person means any loan, advance, extension of credit
(excluding accounts receivable arising in the ordinary course of business),
deposit account (other than deposit accounts used for the payment of obligations
in the ordinary course of business otherwise permitted hereunder) or
contribution of capital by such Person to any other Person or any investment in,
or purchase or other acquisition of, the stock, notes, debentures or other
securities of any other Person made by such Person, excluding trade credit in
the ordinary course of business and investments paid for solely in nonredeemable
Capital Stock of such Person.
I.23 "Lien" of a Person means any security interest, mortgage, pledge,
hypothecation, assignment, lien (statutory or other), claim, charge,
encumbrance, title retention agreement, lessor's interest under a Capitalized
Lease or analogous instrument, in, of or on any property of such Person.
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PAGE 12 OF 52 PAGES
I.24 "Loan Amount" shall mean the principal amount of any Loan made
hereunder.
I.25 "Loans" means the loans made by the Lender to the Borrower hereunder
and "Loan" means any of them.
I.26 "Loan Documents" means this Agreement, the Note, the Warrant and any
other document or agreement executed and delivered in connection herewith,
together with all amendments and modifications thereof.
I.27 "Material Adverse Effect" means (a) a material adverse effect upon the
business, operations, properties, assets, condition (financial or otherwise) or
prospects of the Borrower or the Borrower and its subsidiaries taken as a whole
(in the case of Borrower) or Lender (in the case of Lender), or (b) the
impairment in any material respect of the ability of the Borrower or Lender (as
the case may be) to perform its obligations under any Loan Document.
I.28 "Multiemployer Plan" means a Plan that is a "multiemployer plan" as
defined in Section 4001(a)(3) of ERISA to the Borrower or any member of the
Controlled Group is obligated to make contributions.
I.29 "1995 Indenture" means that certain Indenture, dated as of June 30,
1995, between Borrower, as Issuer, and IBJ Schroder Bank & Trust Company, a New
York banking company, as Trustee, relating to Borrower's 15% Senior Secured
Discount Notes due 2005.
I.30 "1996 Indenture" means that certain Indenture, dated as of March 5,
1996, between the Borrower, as Issuer, and The Bank of New York, as Trustee,
relating to the Borrower's 12% Senior Subordinated Convertible Notes Due 2001.
I.31 "1993 Stock Purchase Agreement" means that certain Stock Purchase
Agreement, dated as of November 1, 1993, between the Borrower and Lender.
I.32 "1994 Stock Purchase Agreement" means that certain Stock Purchase
Agreement, dated as of September 28, 1994, between the Borrower and Lender.
I.33 "1995 Warrant Agreement" means that certain Warrant Agreement, dated
as of June 30, 1995 between the Borrower and IBJ Schroder Bank & Trust Company.
I.34 "Note" means a promissory note in substantially the form of Exhibit A
hereto, duly executed and delivered to the Lender by the Borrower in the face
principal amount of Forty Million Dollars ($40,000,000.00), including any
amendment, modification, renewal or replacement of such promissory note.
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I.35 "Obligations" means all unpaid principal of and accrued and unpaid
interest hereunder and under the Note, all fees, expenses and indemnities, and
all other obligations (monetary and other) of the Borrower to the Lender arising
under any of the Loan Documents.
I.36 "PBGC" means the Pension Benefit Guaranty Corporation and its
successors and assigns.
I.37 "Person" means any corporation, natural person, firm, joint venture,
partnership, trust, unincorporated organization, enterprise, limited liability
company or other entity, government or any department or agency of any
government.
I.38 "Plan" means an employee pension benefit plan which is covered by
Title IV of ERISA or subject to the minimum funding standards under Section 412
of the Internal Revenue Code as to which the Borrower or any Subsidiary may have
any liability.
I.39 "Preferred Shares" means the preferred shares of capital stock of the
Borrower issued pursuant to the 1993 Stock Purchase Agreement and the 1994 Stock
Purchase Agreement.
I.40 "Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation or official interpretation of said Board of
Governors relating to the extension of credit by Persons other than banks,
brokers or dealers for the purpose of purchasing or carrying margin stock.
I.41 "Related Agreements" means the 1995 Indenture, the 1995 Warrant
Agreement, the 1996 Indenture, the 1993 Stock Purchase Agreement and the 1994
Stock Purchase Agreement, the Preferred Shares, and all pledge and security
documents executed pursuant to any of such agreements.
I.42 "Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such Section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided that a failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code and of Section 302
of ERISA shall be a reportable event regardless of the issuance of any waiver in
accordance with Section 412(d) of the Internal Revenue Code.
I.43 "Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
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I.44 "Securities Act" means the Securities Act of 1933, as amended from
time to time.
I.45 "Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
I.46 "Subsequent Funding Date" means each date on which the Lender makes a
Loan to the Borrower hereunder, after the Initial Funding Date.
I.47 "Subsidiary" means any corporation more than 50% of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Borrower or by one or more Subsidiaries or by the Borrower
and one or more Subsidiaries, or any similar business organization which is so
owned or controlled.
I.48 "Unfunded Liabilities" means, on any date of determination, (a) in the
case of Single Employer Plans, all "unfunded benefit liabilities" as defined in
Section 4001(a)(18) of ERISA, and (b) in the case of Multiemployer Plans, the
liability of the Borrower and its Subsidiaries if they were to incur a complete
or partial withdrawal from any Multiemployer Plan.
1.50 "Warrant" means that certain Warrant to Purchase Common Stock of even
date herewith pursuant to which the Lender shall have the right to purchase up
to 4,210,526 (subject to adjustment as therein provided) shares of common stock
of the Borrower.
1.51 "Wholly-Owned Subsidiary" means any Subsidiary all of the outstanding
voting securities of which shall at the time be owned or controlled, directly or
indirectly, by the Borrower or one or more Wholly-Owned Subsidiaries, or by the
Borrower and one or more Wholly-Owned Subsidiaries, or any similar business
organization which is so owned or controlled.
The foregoing definitions shall be equally applicable to both the singular
and plural forms of the defined terms.
ARTICLE II
THE LOANS
II.1 The Loans. Subject to the terms an conditions hereinafter set forth,
during the Commitment Period, the Lender agrees to make one or more Loans, in a
minimum principal amount with respect to each Loan of US Five Million
($5,000,000.00) Dollars, to or for the benefit of the Borrower in the aggregate
principal amount of Forty Million ($40,000,000.00)
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PAGE 15 OF 52 PAGES
Dollars. The Loans shall be evidenced by the Note. The unpaid principal balance
and any accrued but unpaid interest owing on all Loans shall be payable in full
on the earliest of (i) April 4, 2002, (ii) the fourth anniversary of the date on
which the last Loan is made hereunder, or (iii) the date on which the Loans are
accelerated pursuant to Section 7.1 hereof (such earliest date, the "Maturity
Date"). The Lender's Commitment shall terminate on the Funding Cutoff Date.
Subject to the foregoing and the conditions precedent set forth at Section 3.2
of this Agreement, the Borrower may borrow and prepay without penalty or premium
(but with the payment of all accrued and unpaid interest on the prepaid amount)
up to the aggregate principal sum of Forty Million ($40,000,000.00) Dollars or
any lesser sum; provided, however, that there shall be no reborrowings of Loans
prepaid and, with respect to such amounts, the Commitment shall be permanently
reduced.
II.2 Interest. Prior to the occurrence of an Event of Default, the Loans
shall bear interest, payable semiannually in arrears on each March 31 and
September 30 hereafter, commencing on September 30, 1996, at a fixed rate per
annum equal to ten percent (10%). All interest shall be computed for actual days
elapsed on the basis of a year of 365 or 366 days. In computing interest on any
Loan, the Funding Date of such Loan shall be included and the date of payment
shall be excluded so long as such payment is received by the Lender at or before
2:00 p.m. (New York City time) on the date when due.
II.3 Method of Funding Loan. Proceeds of Loans shall be made available to
the Borrower by wire transfer in immediately available funds to the Borrower at
such place as the Company may hereafter designate in writing to Lender by 2:00
p.m. (New York City time) on the Funding Date for such Loans.
II.4 Method of Payment. All payments of principal, interest and expenses
hereunder shall be made by wire transfer in immediately available funds to the
Lender at such place as the Lender may hereafter designate in writing to
Borrower by 2:00 p.m. (New York City time) on the date when due. If any payment
of principal of or interest on the Loans shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and such extension of time shall be included in computing interest in connection
with such payment.
II.5 Schedule to Note. The Borrower hereby authorizes the Lender to endorse
on the Schedule annexed to the Note the principal amount and date of borrowing
of all Loans made by the Lender to the Borrower, which endorsement shall
constitute prima facie evidence of the information recorded, absent manifest
error; provided, that the failure to make any such notations on such Schedule
(or any error in such notation) shall not limit or otherwise affect the
obligations of the Borrower under this Agreement or the Note.
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PAGE 16 OF 52 PAGES
II.6 Prepayment. The Borrower may prepay the Loans, in whole or in part, at
any time and from time to time, without penalty or premium, but each prepayment
shall be accompanied by accrued interest on the amount prepaid.
II.7 Taxes and Expenses.
(a) All payments made by the Borrower in respect of principal of,
and interest on, all Loans and all other amounts payable hereunder in and under
the other Loan Documents or otherwise will be made without set-off, counterclaim
or other defense and will be made free and clear of, and without deduction or
withholding for, any present or future taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein and all interest, penalties or similar liabilities with respect thereto,
excluding taxes imposed on or measured by the net income or overall gross
receipts of Lender and franchise taxes imposed on Lender, by the United States
or any jurisdiction under the laws of which Lender is organized or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, duties, fees,
assessments or other charges are collectively, the ATaxes@). The Borrower shall
pay on demand all stamp, documentary and other similar duties and taxes, if any,
to which any Loan Document from time to time may be subject or give rise. If the
Borrower is required by applicable law to make any deduction or withholding on
any payment as described above in respect of Taxes or otherwise, the Borrower
shall (i) promptly notify the Lender of such occurrence; (ii) pay to the
relevant taxation or other authorities the full amount of the deduction or
withholding within the time allowed; (iii) furnish to the Lender within thirty
(30) days of such payment, an official receipt from such authorities for all
amounts so deducted or withheld; and (iv) pay to the Lender an additional amount
so that the Lender receives on the due date of such payment the full amount the
Lender would have received had no such deduction or withholding taken place.
The Borrower will indemnify and hold harmless the Lender, and
reimburse the Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by the Lender.
(b) The Borrower agrees to pay on demand all of the Lender's
reasonable costs and expenses, including, without limitation, reasonable
attorneys' fees, in connection with the preparation and negotiation of this
Agreement and the other Loan Documents (not to exceed $20,000), and the
collection of any sums due to the Lender and the enforcement, protection or
perfection of its rights or interests hereunder and under the other Loan
Documents.
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ARTICLE III
CONDITIONS PRECEDENT
III.1 Conditions to Initial Loan. The Obligation of the Lender to
make the Initial Loan hereunder is subject to the satisfaction of the following
conditions:
III.1.1 On the date of execution of this Agreement, the Lender
shall have received:
(a) an original of this Agreement (including all Exhibits
and Annexes thereto), the Note and the Disclosure Letter, duly executed by each
party hereto and thereto;
(b) an incumbency certificate of the Borrower, executed by
the Secretary or an Assistant Secretary thereof, which shall identify by name
and title and bear the signature of the officers of the Borrower authorized to
sign the Loan Documents and to make borrowings hereunder, upon which certificate
the Lender shall be entitled to rely until informed of any change in writing by
the Borrower;
(c) a copy of the Certificate of Incorporation of the
Borrower, together with all amendments thereto, certified by the appropriate
governmental officer in its jurisdiction of incorporation;
(d) a copy of the By-Laws of the Borrower, together with
all amendments thereto, certified by the Secretary or an Assistant Secretary of
the Borrower;
(e) a copy, certified by the Secretary or an Assistant
Secretary of the Borrower, of the Borrower's resolutions authorizing the
execution, delivery and performance of the Loan Documents to be executed by it
and the transactions contemplated thereby; and
(f) the Warrant, duly executed by the Borrower.
III.1.2 On the Initial Funding Date the Lender shall have
received:
(a) a certificate of good standing for the Borrower
certified by the appropriate governmental officer in its jurisdiction of
incorporation;
(b) an opinion from counsel to the Borrower substantially
in the form attached as Exhibit A hereto;
(c) evidence of the amendment by the Borrower of its
articles of incorporation to increase the number of authorized shares of the
Borrower's Common Stock, par value $.01 per share (the "Common Stock") to allow
for the reservation of the full number
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of Warrant Shares (as such term is defined in the Warrant) initially issuable
upon exercise of the Warrant; and
(d) evidence of the acceptance of the agent for service of
process specified in Section 8.8(c).
(e) a certificate from the Secretary or an Assistant
Secretary of the Borrower, dated as of the Initial Funding Date, certifying that
(I) except as set forth in this new certificate, all statements set forth in the
certificate delivered to Lender pursuant to Section 3.1.1(b) are true and
correct as of the Initial Funding Date and (ii) all documents delivered to
Lender pursuant to Sections 3.1.1(c), (d) and (e) are in full force and effect
and have not been modified or amended except as set forth in those documents
attached to such certificate.
III.2 Conditions to Each Loan. The Obligation of the Lender to make
each Loan hereunder is subject to the satisfaction of the following conditions:
III.2.1 No less than two (2) Business Days prior to the
applicable Funding Date, the Borrower shall have furnished the Lender with a
written certificate signed by the Chief Financial Officer of the Borrower,
(a) selecting the proposed Funding Date and the Loan
Amount; and
(b) providing the Lender with appropriate wire-transfer
instructions.
III.2.2 On the applicable Funding Date the Borrower shall have
delivered to the Lender:
(a) a certificate signed by the Chief Financial Officer of
the Borrower (1) certifying that no Default or Event of Default shall have
occurred and be continuing on such date after giving effect to the making of the
Loan by the Lender and that each of the representations and warranties contained
in Article IV is true and correct as of such Funding Date; and (2) certifying
that each of the conditions set forth in this Article III has been satisfied;
and
(b) a facility fee in the amount of three (3%) percent of
the Loan Amount, which fee may, at the written request of the Borrower, be
deducted from the proceeds of the Loan advanced to the Borrower on such date.
<PAGE> 11
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES
IV.1 The Borrower's Representations and Warranties.
The Borrower represents and warrants to the Lender that, except
as otherwise set forth in the Disclosure Letter on the date hereof and on each
Funding Date:
(a) Corporate Existence and Standing. The Borrower is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted,
except where the failure to so qualify would not have a Material Adverse Effect.
(b) Authorization and Validity. The Borrower has the corporate
power and authority to execute and deliver the Loan Documents and to perform its
obligations thereunder. The execution and delivery by the Borrower of the Loan
Documents and the performance of its obligations thereunder have been duly
authorized by all proper corporate proceedings. The Obligations constitute the
legal, valid and binding obligations of the Borrower, enforceable in accordance
with their respective terms. Upon each Funding Date, the full number of Warrant
Shares (as defined in the Warrant) to be initially issuable upon exercise of the
Warrant, will have been properly reserved by the Borrower and, upon exercise of
the Warrant, all such Warrant Shares shall be duly and validly issued and shall
constitute fully paid and non-assessable shares of Common Stock of the Borrower.
(c) Capitalization. As of the date of this Agreement, Borrower's
authorized capital consists of 99,000,000 authorized shares of Common Stock, of
which 56,666,981 shares were issued and outstanding at March 19, 1996, and
4,000,000 authorized shares of preferred stock, $.01 par value per share, of
which an aggregate of 1,508,573.5 shares were issued and outstanding at March
19, 1996, consisting of 444,445 shares of the Borrower's Series H Cumulative
Convertible Preferred Stock; 20 shares of each of the Borrower's Series I
Cumulative Convertible Preferred Stock and Series K Cumulative Convertible
Preferred Stock; 1,062,926 shares of the Borrower's Series L Cumulative
Convertible Preferred Stock and 1,162.5 shares of the Borrower's Series M
Cumulative Convertible Preferred Stock.
Except as set forth on the Disclosure Letter, there are no other
outstanding preemptive rights, conversion rights, options, warrants or other
rights or agreements for the purchase or acquisition from the Company of any
shares of its capital stock as of the date of this Agreement.
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(d) Compliance with Laws and Contracts. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof,
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or its articles or certificate of
incorporation or by-laws or the provisions of any indenture, instrument or
agreement to which the Borrower is a party or is subject, or by which it, or its
property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the property of
the Borrower pursuant to the terms of any such indenture, instrument or
agreement including, without limitation, the Related Documents, except where
such violation, conflict, default or Lien would not have a Material Adverse
Effect. To the best of the Borrower's knowledge (after due inquiry), no order,
consent, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents; provided, however, that Borrower makes no representations with
respect to any required notifications under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, or the rules and regulations promulgated
thereunder (collectively, the "HSR Act"). The Borrower is not in default of its
obligations under any Related Document, and no Default or Event of Default has
occurred or is continuing.
(e) Financial Statements. The December 31, 1995 consolidated
financial statements of the Borrower and its Subsidiaries heretofore delivered
to the Lender were prepared in accordance with GAAP in effect on the date such
statements were prepared and consistent with prior periods and fairly present
the consolidated financial condition and operations of the Borrower and its
Subsidiaries at such date and the consolidated results of their operations for
the period then ended.
(f) Material Adverse Effect. Except as disclosed in the Draft
10-K ( as hereinafter defined), no Material Adverse Effect has occurred since
the date of the financial statements referred to in Section 4.1(e), or as of the
date (if later) of the most recent financial statements delivered to the Lender
pursuant to Section 5.1(a).
(g) Taxes. Each of the Borrower and its Subsidiaries has filed
all United States federal tax returns and all other tax returns which are
required to be filed prior to the date hereof and has paid all taxes due
pursuant to said returns or pursuant to any assessment received by the Borrower
or such Subsidiary (except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided), except where the
failure to so file or pay would not have a Material Adverse Effect. No Liens
have been filed by any tax authorities, and no claims are being asserted with
respect to any such taxes, except where such tax liens or claims would not have
a Material Adverse Effect. The charges, accruals and
<PAGE> 13
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reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate in accordance with GAAP.
(h) Litigation. There is no litigation or proceeding pending or,
to the knowledge of any of its officers, threatened against or affecting the
Borrower or any Subsidiary, which might have a Material Adverse Effect.
(i) ERISA. The Unfunded Liabilities of all Plans do not in the
aggregate exceed One Hundred Thousand ($100,000.00) Dollars. Each Plan complies
in all material respects with all applicable requirements of law and
regulations, and the minimum funding requirements with respect to all Plans have
been met, no Reportable Event has occurred with respect to any Plan, no Lien in
favor of the PBGC with respect to any Plan has arisen or been recorded, neither
the Borrower nor any of its Subsidiaries has withdrawn from any Plan or
initiated steps to do so, and no steps have been taken to terminate any Plan.
(j) Accuracy of Information. No information, schedule, exhibit or
report furnished by the Borrower to the Lender in connection with the
negotiation of the Loan Documents contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.
(k) Subordinated Indebtedness. The Obligations are not
subordinate to any Indebtedness of the Borrower and rank pari passu with all
other senior unsecured Indebtedness of the Borrower.
IV.2 The Lender's Warranties and Representations.
(a) Existence and Standing. The Lender is a trust duly
organized and validly existing under the laws of its jurisdiction of formation.
(b) Authorization and Validity. The Lender has the trust, power
and authority to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by the
Lender of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized in accordance with the trust
agreement pursuant to which it has been created.
(c) Compliance with Laws and Contracts. Neither the execution and
delivery by the Lender of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof,
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Lender or its certificate of limited partnership,
limited partnership agreement or other organizational documents or the
provisions of any indenture, instrument or agreement to which the Lender is
<PAGE> 14
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a party or is subject, or by which it, or its property, is bound, or conflict
with or constitute a default thereunder except where such violation, conflict or
default would not have a Material Adverse Effect. To the best of the Lender's
knowledge after due inquiry (except under the HSR Act with respect to the
exercise of the Warrants), no order, consent, approval, license, authorization,
or validation of, or filing (including, without limitation, under the HSR Act),
recording or registration with, or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with the execution, delivery and performance of, or the
legality, validity, binding effect or enforceability of, any of the Loan
Documents.
(d) Investment Representations.
(i) Purchase Entirely for One's Own Account. The Warrants
being acquired hereunder by Lender are being acquired by Lender for investment,
for Lender's own account and not with a view to the resale or distribution of
any part thereof or of the Warrant Shares and Lender has no present intention of
selling, granting any participation in, or otherwise distributing or disposing
of any of such Warrants or any of the Warrant Shares, subject always to the
limitation that the disposition of Lender's property shall be within its sole
discretion and control.
(ii) Disclosure of Information. Lender has had an
opportunity to review the draft form of Borrower's Annual Report on Form 10-K
(the "Draft 10-K"), which draft was distributed to Borrower's directors on March
25, 1996, and has been afforded the opportunity to request from Borrower and to
review, and has received, all additional information considered by it to be
necessary to verify the accuracy of, or to supplement, the information contained
therein. Lender also has had the opportunity to ask questions of and receive
answers from Borrower regarding Borrower, its operations and activities, and the
terms and conditions of the Warrants.
(iii) Investment Experience. Lender is an "accredited
investor" within the meaning of Rule 501(a)(7) of Regulation D under the
Securities Act and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment and has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of its investment in the Warrants.
(iv) Restricted Securities. Lender understands that the
Warrants and Warrant Shares are "restricted securities" under the federal
securities laws and that under such laws and applicable regulations the Warrants
and Warrant Shares may not be resold in the absence of registration under the
Securities Act or an exemption from such registration. In this connection,
subject to applicable registration rights contained in the Warrants, Lender
represents and warrants that it is familiar with Rule 144 under the Securities
Act, as presently
<PAGE> 15
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in effect, and understands the resale limitations imposed by such Rule and by
the Securities Act.
ARTICLE V
COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing:
V.1 Reporting. The Borrower will furnish to the Lender
(a) Without duplication, copies of all reports, certificates,
documents and other information required to be delivered to each trustee under
the 1995 Indenture and the 1996 Indenture (as in effect on the date hereof and
whether or not the Indenture is then in effect);
(b) Immediately upon obtaining knowledge thereof, notice of any
Default or Event of Default; and
(c) Such other information as the Lender may from time to time
reasonably request.
V.2 No Margin Stock. The Borrower will not, nor will it permit any of its
Subsidiaries to, use any of the Loan Proceeds to purchase or carry any Margin
Stock (as defined in Regulation G).
V.3 Conduct of Business. The Borrower will, and will cause each of its
Subsidiaries to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted, except where the failure
to do so would not have a Material Adverse Effect.
V.4 Taxes. The Borrower will, and will cause each of its Subsidiaries to,
pay when due all taxes, assessments and governmental charges and levies upon it
or its income, profits or property, except those which are being contested in
good faith by appropriate proceedings and with respect to which adequate
reserves have been set aside.
V.5 Insurance. The Borrower will, and will cause each of its Subsidiaries
to, maintain with financially sound and reputable insurance companies insurance
on all their property in
<PAGE> 16
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such amounts and covering such risks as is consistent with sound business
practice, and the Borrower will furnish to the Lender upon request full
information as to the insurance carried.
V.6 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject, except
where the failure to do so would not have a Material Adverse Effect.
V.7 Maintenance of Properties. The Borrower will, and will cause each of
its Subsidiaries to, do all things necessary to maintain, preserve, protect and
keep its properties in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times,
except where the failure to do so would not have a Material Adverse Effect.
V.8 Inspection. The Borrower will permit the Lender, by its representatives
and agents, to inspect any of the properties, licenses, corporate books and
financial records of the Borrower, to examine and make copies of the books of
accounts and other financial records of the Borrower and its Subsidiaries, and
to discuss the affairs, finances and accounts of the Borrower with, and to be
advised as to the same by, their respective officers at such reasonable times
and intervals on reasonable written notice to the Borrower.
V.9 Compliance with Related Documents. The Borrower shall, and shall cause
each of its Subsidiaries to, comply with all covenants, restrictions and other
agreements applicable to them in each of the 1995 Indenture, the 1996 Indenture,
the 1993 Stock Purchase Agreement and the 1994 Stock Purchase Agreement as in
effect on the date hereof (without giving effect to any amendments, waivers or
other modifications thereof or supplements thereto).
ARTICLE VI
EVENTS OF DEFAULT
The occurrence of any one or more of the following events shall constitute
an Event of Default:
VI.1 Any representation or warranty made by the Borrower to the Lender
under or in connection with this Agreement, the Note, any other Loan Document or
any certificate or information delivered in connection herewith or therewith
shall be materially false as of the date on which made or deemed made.
<PAGE> 17
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VI.2 The Borrower shall not have made payment of (a) principal of the Loans
when due, or (b) interest on the Loans or of any other Obligations under any of
the Loan Documents within ten (10) days after the same shall have become due and
payable, whether on the scheduled due date therefor or upon acceleration
thereof, or otherwise.
VI.3 The breach by the Borrower of any of the terms or provisions of
Article 5 and, where such breach is capable of cure in the reasonable judgment
of the Lender and provided such breach has not otherwise caused a Material
Adverse Effect, the failure of the Borrower to cure such breach within thirty
(30) days of notice from the Lender of such breach.
VI.4 The breach by the Borrower (other than a breach which constitutes a
Default under Section 6.1, 6.2 or 6.3) of any of the terms or provisions of this
Agreement, the Note or any of the Loan Documents which is not remedied within
thirty (30) days after written notice from the Lender.
VI.5 The occurrence of any of the events specified as an AEvent of Default@
in Section 6.01 of either of the 1995 Indenture (other than an Event of Default
under Section 6.01(c) thereof which is caused by a failure to perform or observe
any term, covenant or agreement contained in the Pledge Agreements (as defined
in the 1995 Indenture)) or the 1996 Indenture (as in effect on the date hereof
and whether or not such Agreements are then in effect) whether or not there has
been a formal declaration by the relevant trustee or bondholders of the same,
and whether or not the Indebtedness thereunder has been accelerated.
ARTICLE VII
REMEDIES, WAIVERS AND AMENDMENT
VII.1 Consequences of Default.
(a) If an Event of Default (other than an Event of Default
described in Section 6.5 (relating to an AEvent of Default@ set forth in Section
6.01(f) or (g) of the 1995 Indenture or the 1996 Indenture (a "Bankruptcy
Default")) shall occur and be continuing beyond any grace period permitted
therefor as set forth above, the Lender by notice to the Borrower may (i)
declare the entire amount of the Loan together with accrued interest and other
sums payable hereunder and under the other Loan Documents in respect of the Loan
to be immediately due and payable and/or (ii) terminate the Commitment and its
obligation to make additional Loans.
(b) If a Bankruptcy Default shall occur and be continuing beyond
any grace period permitted therefor as set forth above, (i) then and in every
such case the entire amount of the Loan together with accrued interest and other
sums payable hereunder and under the
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other Loan Documents shall without further act become immediately due and
payable and (ii) the Commitment shall be automatically terminated, without the
requirement of any further action or notice to the Borrower.
(c) In the event that the Loan shall be declared or become due
and payable by acceleration as provided above, the Loan, accrued interest
thereon and all sums payable hereunder and under the other Loan Documents shall
(upon the giving of such notice by the Lender in the case of an Event of Default
other than a Bankruptcy Default) become immediately due and payable without
presentment, demand, protest or notice of any kind other than the notice
specifically required by Section, 7.1(a), all other notice being expressly
waived by the Borrower.
VII.2 Preservation of Rights. No delay or omission of the Lender to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or Event of Default or an acquiescence
therein. Any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in writing signed by the
Lender, and then only to the extent in such writing specifically set forth. All
remedies contained in the Loan Documents or by law afforded shall be cumulative
and all shall be available to the Lender until the Obligations have been paid in
full.
ARTICLE VIII
GENERAL PROVISIONS
VIII.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lender and their respective successors and assigns. The Borrower may not assign
any of its rights or obligations hereunder without the prior written consent of
the Lender.
VIII.2 Survival of Representations. All representations and warranties of
the Borrower contained in any Loan Document shall survive delivery of the Note
and the making of the Loans herein contemplated.
VIII.3 Headings. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
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VIII.4 Entire Agreement. The Loan Documents embody the entire agreement and
understanding among the Lender and the Lender and supersede all prior agreements
and understandings among the Lender and the Lender relating to the subject
matter thereof.
VIII.5 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
VIII.6 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
VIII.7 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
either of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by each
of the Borrower and the Lender.
VIII.8 Choice of Law; Jurisdiction.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO SUCH STATE'S INTERNAL CONFLICTS OF LAWS
PRINCIPLES.
(b) Jurisdiction. With respect to any suit, action or proceeding
relating to this Agreement or any of the Loan Documents, the Borrower
irrevocably (i) submits to the non-exclusive jurisdiction of the courts in the
State of New York and the United States District Court located in the Borough of
Manhattan in New York City; and (ii) waives any objection which it may have at
any time to the laying of venue of any such suit, action or proceeding brought
in any such court, waives any claim that any such suit, action or proceeding has
been brought in an inconvenient forum and further waives the right to object
with respect to any such suit, action or proceeding that such court does not
have any jurisdiction over it.
Nothing contained in this Section 8.8 shall limit or impair the
right of the Lender to institute any suit, action, motion or proceeding in any
other court of competent jurisdiction, nor shall the taking of any suit, action
or proceeding in one or more jurisdictions preclude the taking of proceedings in
any other jurisdiction, whether concurrently or not.
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(c) Service of Process. The Borrower irrevocably appoints the
following process agent to receive, for it and on its behalf, service of process
in any suit, action or proceeding relating to this Agreement: CT Corporation
System, 1633 Broadway, New York, New York 10019. If for any reason the
Borrower's process agent is unable to act as such, the Borrower will promptly
notify the Lender and within thirty (30) days appoint a substitute process agent
acceptable to the Lender. Nothing in this Agreement will affect the right of the
Lender to serve process in any other manner permitted by law.
VIII.9 WAIVER OF JURY TRIAL. THE BORROWER HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER FACILITY DOCUMENTS.
VIII.10 Registration Rights. Borrower has previously granted the Lender
certain registration rights with respect to Borrower's Common Stock which it now
owns or hereafter acquires pursuant to the 1993 Stock Purchase Agreement and the
1994 Stock Purchase Agreement. Borrower acknowledges that the Warrant Shares
actually issued and issuable pursuant to the Warrants shall constitute
"Registrable Securities" for purposes of the Stock Purchase Agreements and
Lender shall be entitled to the rights set forth in Section 6 of each of the
Stock Purchase Agreements with respect to such Warrant Shares.
ARTICLE IX
NOTICES
IX.1 Giving Notice. Any notice required or permitted to be given under this
Agreement may be, and shall be deemed, given when deposited in the United States
mail, postage prepaid, or by facsimile transmission when delivered to the
appropriate office for transmission, charges prepaid, addressed to the Borrower
or the Lender at the addresses indicated below their signatures to this
Agreement. Copies of all notices to the Lender shall be delivered to Soros Fund
Management, 888 Seventh Avenue, New York, New York 10106, Attention: Michael C.
Neus, Esquire.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IX.2 Change of Address. The Borrower and the Lender may each change the
address for service of notice upon it by a notice in writing to the other
parties hereto.
IN WITNESS WHEREOF, the Borrower and the Lender have executed this
Agreement as of the date first above written.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Michael McCoy
------------------------------
Title: Chief Financial Officer
---------------------------
Address: 20 Craig Road
Montvale, NJ 07645
Telecopy No.: (201) 930-9614
S-C RIG INVESTMENTS - III, L.P.
By: S-C RIG Co.
General Partner
By: /s/ Peter Hurwitz
---------------------------
Peter Hurwitz
Vice President
Address: c/o The Chatterjee Group
888 Seventh Avenue
New York, NY 10106
Attn: Peter Hurwitz, Esquire
Telecopy No.: (212) 489-2005
<PAGE> 1
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EXHIBIT K
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED
OF IN THE UNITED STATES EXCEPT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), ANY APPLICABLE STATE SECURITIES LAWS AND THE
TERMS AND CONDITIONS HEREOF. THE HOLDER OF THIS WARRANT AND THE SECURITIES
ISSUABLE UPON EXERCISE HEREOF ARE SUBJECT TO THE RESTRICTIONS HEREIN SET FORTH.
VOID AFTER 5:00 P.M., NEW YORK, NEW YORK TIME, APRIL 4, 2001
***************************************
WARRANT
to
PURCHASE COMMON STOCK
of
GEOTEK COMMUNICATIONS, INC.
***************************************
This certifies that, for good and valuable consideration, Geotek
Communications, Inc., a Delaware corporation (the "Company"), grants to S-C Rig
Investments - III, L.P., a Delaware limited partnership, or permitted registered
assigns (the "Warrantholder" or "Warrantholders"), the right to subscribe for
and purchase from the Company, at a purchase price of $9.50 per share (the
"Exercise Price"), at any time and from time to time after such date (the
"Initial Exercise Date") that the Company amends its articles of incorporation
to increase the number of authorized shares of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), to allow for the reservation of the
full number of Warrant Shares (as defined below) initially issuable upon
exercise of this Warrant, and to and including 5:00 P.M. New York City time on
April 4, 2001 (the "Expiration Date"), Four Million Two Hundred Ten Thousand
Five Hundred and Twenty-six (4,210,526) shares, as such number of shares may be
adjusted from time to time (the
<PAGE> 2
PAGE 31 OF 52 PAGES
"Warrant Shares"), of the Common Stock, subject to the provisions and upon the
terms and conditions herein set forth. Notwithstanding anything herein to the
contrary, in the event the Initial Exercise Date does not occur on or prior to
July 31, 1996, this Warrant shall automatically be terminated and Warrantholder
shall have no rights hereunder. The Exercise Price and the number of Warrant
Shares are subject to adjustment from time to time as provided in Section 6.
SECTION 1. EXERCISE OF WARRANT; LIMITATION ON EXERCISE; PAYMENT OF
TAXES.
1.1 Exercise of Warrant.
(a) Subject to Section 1.2 hereof, the Warrantholder may
exercise this Warrant, in whole or in part at any time and from time to time
after the Initial Exercise Date, by presentation and surrender of this Warrant
to the Company at its principal executive offices or at the office of its stock
transfer agent, if any, with the Subscription Form annexed hereto duly executed
and accompanied by cash payment of the full Exercise Price for each Warrant
Share to be purchased.
(b) Upon receipt of this Warrant, with the Subscription Form
duly executed and accompanied by payment of the aggregate Exercise Price for the
Warrant Shares for which this Warrant is then being exercised, the Company shall
cause to be issued certificates for the total number of whole shares of Common
Stock for which this Warrant is being exercised (adjusted to reflect the effect
of the antidilution provisions contained in Section 6 hereof, if any, and as
provided in Sections 5 and 7.8 hereof) in such denominations as are requested
for delivery to the Warrantholder, and the Company shall thereupon deliver such
certificates to the Warrantholder. The stock certificates so delivered shall be
in such denominations as may be specified by the Warrantholder and shall be
issued in the name of the Warrantholder or, if permitted by Section 5 and in
accordance with the provisions thereof, such other name as shall be designated
in the Subscription Form. The Warrantholder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Warrantholder. If at the time this Warrant is
exercised, a registration statement is not in effect to register under the
Securities Act the Warrant Shares issuable upon exercise of this Warrant, the
Company may require the Warrantholder to make such customary representations and
deliver such customary opinions of counsel, and may place such customary legends
on certificates representing the Warrant Shares, as may be reasonably required
in the opinion of counsel to the Company to permit the Warrant Shares to be
issued without such registration.
(c) If this Warrant shall have been exercised only in part,
the Company shall, at the time of delivery of the certificates for the Warrant
Shares, deliver to the
<PAGE> 3
PAGE 32 OF 52 PAGES
Warrantholder a new Warrant evidencing the rights to purchase the remaining
Warrant Shares, which new Warrant shall in all other respects be identical with
this Warrant. No adjustments or payments shall be made on or in respect of
Warrant Shares issuable on the exercise of this Warrant for any regular cash
dividends paid or payable to holders of record of Common Stock prior to the date
as of which the Warrantholder shall be deemed to be the record holder of such
Warrant Shares.
1.2 Limitation on Exercise. If this Warrant is not exercised prior to
5:00 P.M. on the Expiration Date (or the next succeeding Business Day, if the
Expiration Date is a Saturday, Sunday or a day on which the New York Stock
Exchange is authorized to close or on which the Company is otherwise closed for
business (a "Nonbusiness Day"), this Warrant, or any new Warrant issued pursuant
to Section 1.1, shall cease to be exercisable and shall become void and all
rights of the Warrantholder hereunder shall cease. This Warrant shall not be
exercisable and no Warrant Shares shall be issued hereunder prior to 9:00 a.m.
New York City time on the Initial Exercise Date. In addition, this Warrant shall
not be exercisable at any time that the lender under that certain Senior Loan
Agreement dated as of the date hereof by and between the Company and the initial
holder of this Warrant (the "Loan Agreement") shall be in material breach of its
obligations thereunder or at any time after a permissible termination of the
Loan Agreement resulting directly from a material breach by such lender
thereunder.
1.3 Payment of Exercise Price. Payment of the Exercise Price pursuant
to Section 1.1(a) shall be made to the Company in cash; by certified or official
bank check payable in United States dollars to the order of the Company; or by
any combination of the foregoing.
1.4 Payment of Taxes. The issuance of certificates for Warrant Shares
shall be made without charge to the Warrantholder for any stock transfer or
other issuance tax in respect thereto; provided, however, that the Warrantholder
shall be required to pay any and all taxes which may be payable in respect to
any transfer involved in the issuance and delivery of any certificates for
Warrant Shares in a name other than that of the then Warrantholder as reflected
upon the books of the Company.
SECTION 2. RESERVATION AND LISTING OF SHARES, ETC.
All Warrant Shares which are issued upon the exercise of the
rights represented by this Warrant shall, upon issuance and payment of the
Exercise Price, be validly issued, fully paid and nonassessable without any
preemptive rights, and free from all taxes, liens, security interests, charges
and other encumbrances with respect to the issue thereof other than taxes in
respect of any transfer occurring contemporaneously with such issue. During the
period within which this Warrant may be exercised, the Company shall at all
times have authorized and reserved, and keep available and free from preemptive
rights, and free from all taxes, liens, security interests, charges and other
encumbrances with respect to the issue thereof, a sufficient number of shares of
Common Stock to provide for the
<PAGE> 4
PAGE 33 OF 52 PAGES
exercise of this Warrant, and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect the exercise
of this Warrant, in addition to such other remedies as shall be available to a
Warrantholder, the Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes. In addition, prior to the issuance of any Warrant Shares, the Company
shall at its expense procure the listing of the Warrant Shares (or any other
issues of capital stock issuable upon the exercise of this Warrant if such other
class of capital stock is then so listed) which shall be issued upon exercise of
this Warrant (subject to official notice of issuance) as then may be required on
all stock exchanges or interdealer quotation systems on which the Common Stock
is then listed and shall maintain such listing if and so long as any shares of
the same class shall be listed on such stock exchanges or interdealer quotation
systems. The Company shall, from time to time, take all such action as may be
required to assure that the par value per share of the Warrant Shares is at all
times equal to or less than the then effective Exercise Price.
SECTION 3. EXCHANGE, LOSS OR DESTRUCTION OF WARRANT.
If permitted by Section 5 and in accordance with the
provisions thereof, upon surrender of this Warrant to the Company with a duly
executed instrument of assignment and funds sufficient to pay any transfer tax,
the Company shall, without charge, execute and deliver a new Warrant of like
tenor in the name of the assignee named in such instrument of assignment and
this Warrant shall promptly be canceled. Upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction or mutilation of
this Warrant, and, in the case of loss, theft or destruction, of such bond or
indemnification as the Company may reasonably require, and, in the case of such
mutilation, upon surrender and cancellation of this Warrant, the Company will
execute and deliver a new Warrant of like tenor. The term "Warrant" as used
herein includes any Warrants issued in substitution or exchange of this Warrant.
SECTION 4. OWNERSHIP OF WARRANT; CERTAIN RIGHTS OF WARRANTHOLDERS.
(a) The Company may deem and treat the person in whose name
this Warrant is registered as the holder and owner hereof (notwithstanding any
notations of ownership or writing hereon made by anyone other than the Company)
for all purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer as provided in
subsection 1.1, Section 3 or Section 5.
(b) Nothing contained in this Warrant shall be construed as
conferring upon the Warrantholder or its transferees the right to vote or to
receive dividends or to consent or to receive notice as a stockholder in respect
of any meeting of stockholders for the election of directors of the Company or
of any other matter, or any rights whatsoever as stockholders of the Company.
The Company shall give notice to the Warrantholder by registered mail if
<PAGE> 5
PAGE 34 OF 52 PAGES
at any time prior to the expiration or exercise in full of the Warrants, any of
the following events shall occur:
(i) the Company shall authorize the payment of any
dividend payable in any securities upon shares of Common Stock or authorize the
making of any distribution (other than a regular cash dividend paid out of net
profits legally available therefor) to all holders of Common Stock;
(ii) the Company shall authorize the issuance to all
holders of Common Stock of any additional shares of Common Stock or securities
that are convertible into or exercisable for shares of Common Stock ("Common
Stock Equivalents") or of rights, options or warrants to subscribe for or
purchase Common Stock or Common Stock Equivalents or of any other subscription
rights, options or warrants;
(iii) a dissolution, liquidation or winding up of the
Company; or
(iv) a capital reorganization or reclassification of the
Common Stock (other than a subdivision or combination of the outstanding Common
Stock and other than a change in the par value of the Common Stock) or any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the continuing
corporation and that does not result in any reclassification or change of Common
Stock outstanding) or in the case of any sale or conveyance to another
corporation of the property of the Company as an entirety or substantially as an
entirety or a tender offer or exchange offer for shares of Common Stock.
Such giving of notice shall be initiated at least 20 days
prior to the date fixed as a record date or effective date or the date of
closing of the Company's stock transfer books for the determination of the
stockholders entitled to such dividend, distribution, issuance or subscription
rights, or for the determination of the stockholders entitled to vote on such
proposed merger, consolidation, sale, conveyance, dissolution, liquidation or
winding up or to participate in such tender or exchange offer. Such notice shall
specify (A) the date as of which the holders of record of shares of Common Stock
to be entitled to receive any such rights, options, warrants or distribution are
to be determined, or (B) the initial expiration date set forth in any tender
offer or exchange offer for shares of Common Stock or any securities convertible
into or exchangeable for Common Stock, or (C) the date on which any such
reorganization, reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up is expected to become effective or
consummated, and the date as of which it is expected that holders of record of
shares for securities or other property, if any, deliverable upon such
reorganization, reclassification, consolidation, merger, sale, conveyance,
dissolution, liquidation or winding up. Failure to provide such notice shall not
affect the validity of any action taken in connection with such dividend,
distribution, issuance or subscription rights, or proposed merger,
consolidation, sale, conveyance, tender offer, exchange offer, dissolution,
liquidation or winding up.
<PAGE> 6
PAGE 35 OF 52 PAGES
SECTION 5. SPLIT-UP, COMBINATION, EXCHANGE AND TRANSFER OF WARRANTS.
(a) Subject to the provisions of Section 5(b), this Warrant
may be split up, combined or exchanged for another Warrant or Warrants
containing the same terms to purchase a like aggregate number of Warrant Shares.
If the Warrantholder desires to split up, combine or exchange this Warrant, he,
she or it shall make such request in writing delivered to the Company and shall
surrender to the Company this Warrant and any other Warrants to be so split up,
combined or exchanged. Upon any such surrender for a split up, combination or
exchange, the Company shall execute and deliver to the person entitled thereto a
Warrant or Warrants, as the case may be, as so requested. The Company shall not
be required to effect any split up, combination or exchange which will result in
the issuance of a warrant entitling the Warrantholder to purchase upon exercise
a fraction of a share of Common Stock or a fractional Warrant. The Company may
require such Warrantholder to pay a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any split up,
combination or exchange of Warrants.
(b) Neither this Warrant not the Warrant Shares may be
transferred, disposed of or encumbered (any such action, a "Transfer") except in
accordance with and subject to the provisions of the Securities Act, any
applicable state securities laws and the rules and regulations promulgated
thereunder. If at the time of a Transfer, a registration statement is not in
effect to register this Warrant or the Warrant Shares, the Company may require
the Warrantholder to make such customary representations and deliver such
customary opinions of counsel, and may place such customary legends on
certificates representing this Warrant, as may be reasonably required in the
opinion of counsel to the Company to permit a Transfer without such
registration.
SECTION 6. ADJUSTMENTS OF EXERCISE PRICE AND NUMBER OF WARRANT
SHARES ISSUABLE. The Exercise Price and the number of Warrant Shares issuable
upon the exercise of this Warrant are subject to adjustment from time to time
upon the occurrence of the events enumerated in this Section 6. For purposes of
this Section 6, "Common Stock" means the Common Stock and any other capital
stock of the Company, however designated, for which the Warrants may be
exercisable.
(a) Adjustment for Change in Capital Stock.
If the Company:
(i) pays a dividend or makes a distribution on its
Common Stock in shares of its Common Stock;
(ii) subdivides its outstanding shares of Common Stock
into a greater number of shares;
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(iii) combines its outstanding shares of Common Stock
into a smaller number of shares;
(iv) makes a distribution on its Common Stock in
shares of its capital stock other than Common Stock; or
(v) issues by reclassification of its Common Stock
any shares of its capital stock,
then the Exercise Price and the number and kind of shares of capital stock of
the Company issuable upon the exercise of this Warrant (as in effect immediately
prior to such action) shall be proportionately adjusted so that the
Warrantholder may receive, upon exercise of this Warrant, the aggregate number
and kind of shares of capital stock of the Company which he would have owned
immediately following such action if this Warrant had been exercised immediately
prior to such action.
The adjustment shall become effective immediately after the
record date, subject to subsection (n) of this Section 6, in the case of a
dividend or distribution and immediately after the effective date in the case of
a subdivision, combination or reclassification.
If after an adjustment, a Warrantholder shall be entitled to
receive shares of two or more classes or series of capital stock of the Company
upon exercise of this Warrant, the Company shall determine the allocation of the
adjusted Exercise Price between the classes or series of capital stock. After
such allocation, the exercise privilege and the Exercise Price of each class or
series of capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock in this Section 6.
Such adjustment shall be made successively whenever any event
listed above shall occur.
(b) Adjustment for Rights Issue. If the Company distributes
any rights, options or warrants to all holders of its Common Stock entitling
them for a period expiring within 60 days after the record date mentioned below
to purchase shares of Common Stock or securities convertible into or exercisable
or exchangeable for shares of Common Stock at a price per share less than the
current market price per share (including, in the case of securities convertible
into or exercisable or exchangeable for shares of Common Stock, the
consideration payable for such convertible, exercisable or exchangeable security
and the minimum consideration per share payable upon the conversion, exercise or
exchange of such security into or for Common Stock) on that record date, the
Exercise Price shall be adjusted in accordance with the following formula:
O + N x P
-----
E' = E x M
---------
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PAGE 37 OF 52 PAGES
O + N
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding on the
record date.
N = the number of additional shares of Common Stock offered.
P = the offering price per share of the additional shares.
M = the current market price per share of Common Stock
on the record date.
The adjustment shall be made successively whenever any such
rights, options or warrants are issued and shall become effective immediately
after the record date for the determination of stockholders entitled to receive
the rights, options or warrants. If at the end of the period during which such
rights, options or warrants are exercisable, not all rights, options or warrants
shall have been exercised, the Exercise Price shall be immediately readjusted to
what it would have been if "N" in the above formula had been the number of
shares actually issued.
(c) Adjustment for Other Distributions. If the Company distributes
to all holders of its Common Stock any of its assets or debt securities or any
rights or warrants to purchase debt securities, assets or other securities of
the Company, the Exercise Price shall be adjusted in accordance with the
following formula:
E' = E x M - F
-----
M
where:
E'= the adjusted Exercise Price.
E = the current Exercise Price.
M = the current market price per share of Common Stock
on the record date mentioned in the immediately
succeeding paragraph.
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PAGE 38 OF 52 PAGES
F = the fair market value on the record date of the
assets, securities, rights or warrants applicable to
one share of Common Stock. The Board of Directors
shall determine the fair market value.
The adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of stockholders entitled to receive the distribution.
This subsection (c) does not apply to:
(i) rights, options or warrants referred to in subsection
(b) of this Section 6, or
(ii) cash dividends or cash distributions paid out of
consolidated current or retained earnings as shown on the books of the Company
prepared in accordance with generally accepted accounting principles other than
any Extraordinary Cash Dividend (as defined below). An "Extraordinary Cash
Dividend" shall be that portion, if any, of the aggregate amount of all cash
dividends paid in any fiscal year which exceeds $25 million. In all cases, the
Company shall give the Warrant holders at least 30 days notice of a record date
for any dividend payment on its Common Stock.
(d) Adjustment for Common Stock Issue. If the Company issues
shares of Common Stock for a consideration per share less than the current
market price per share on the date the Company fixes the offering price of such
additional shares, the Exercise Price shall be adjusted in accordance with the
formula:
P
-
E' = E x O + M
------
A
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such additional shares.
P = the aggregate consideration received for the
ssuance of such additional shares.
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M = the current market price per share on the date the
Company fixes the offering price of such additional
shares.
A = the number of shares outstanding immediately after
the issuance of such additional shares.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
This subsection (d) does not apply to:
(i) any of the transactions described in subsections (a),
(b) and (c) of this Section 6,
(ii) the conversion, exercise or exchange of securities
convertible or exchangeable for Common Stock,
(iii) Common Stock issuable upon the exercise of rights or
warrants issued to the holders of Common Stock,
(iv) Common Stock issued to shareholders of any person which
merges into the Company in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
(v) Common Stock issued in a bona fide public offering
pursuant to a firm commitment underwriting, or
(vi) Common Stock issued in a bona fide private placement
through a placement agent which is a member firm of the National Association of
Securities Dealers, Inc. (except to the extent that any discount from the
current market price attributable to restrictions on transferability of the
Common Stock, as determined in good faith by the Board of Directors and
described in a Board resolution which shall be filed with the Warrant Agent,
shall exceed 20%).
(e) Adjustment for Convertible Securities Issue. If the
Company issues any securities convertible into or exercisable or exchangeable
for Common Stock (other than securities issued in transactions described in
subsections (a), (b) and (c) of this Section 6) for a consideration per share
(including the minimum consideration per share payable upon conversion, exercise
or exchange of any securities convertible into or exercisable or exchangeable
for Common Stock) of Common Stock initially deliverable upon conversion,
exercise or exchange of such securities less than the current market price per
share on the date the Company fixes the offering price of such securities, the
Exercise Price shall be adjusted in accordance with this formula:
<PAGE> 11
PAGE 40 OF 52 PAGES
P
-
E' = E x O + M
-----
O + D
where:
E'= the adjusted Exercise Price.
E = the then current Exercise Price.
O = the number of shares outstanding immediately prior
to the issuance of such securities.
P = the aggregate consideration received for the issuance of
such securities.
M = the current market price per share on the date the
Company fixes the offering price of such securities.
D = the maximum number of shares deliverable upon
conversion or exercise of or in exchange for such
securities at the initial conversion, exercise or
exchange rate.
The adjustment shall be made successively whenever any such
issuance is made, and shall become effective immediately after such issuance.
If all of the Common Stock deliverable upon conversion,
exercise or exchange of such securities has not been issued when such securities
are no longer outstanding, then the Exercise Price shall promptly be readjusted
to the Exercise Price which would then be in effect had the adjustment upon the
issuance of such securities been made on the basis of the actual number of
shares of Common Stock issued upon conversion, exercise or exchange of such
securities.
This subsection (e) does not apply to:
(i) convertible, exercisable or exchangeable securities
issued to shareholders of any person which merges into the Company, or with a
subsidiary of the Company, in proportion to their stock holdings of such person
immediately prior to such merger, upon such merger,
(ii) convertible, exercisable or exchangeable securities
issued in a bona fide public offering pursuant to a firm commitment underwriting
or pursuant to agreements in effect on the date of issuance of this Warrant,
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(iii) convertible, exercisable or exchangeable securities
issued in a bona fide private placement through a placement agent which is a
member firm of the National Association of Securities Dealers, Inc. (except to
the extent that any discount from the current market price attributable to
restrictions on transferability of Common Stock issuable upon conversion, as
determined in good faith by the Board of Directors and described in a Board
resolution which shall be filed with the Trustee, shall exceed 20% of the then
current market price) or
(iv) stock options issued to the Company's directors,
officers or employees.
(f) Adjustment for Tender or Exchange Offer. If the Company or any
Subsidiary of the Company consummates a tender or exchange offer for all or any
portion of the Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock, to the extent that the cash and value of any
other consideration included in such payment per share of Common Stock
(determined on an as-converted basis in the case of any such convertible,
exercisable or exchangeable securities so tendered or exchanged) exceeds the
average of the Quoted Prices (as defined in subsection (g) of this Section 6) of
the Common Stock for the five consecutive trading days (the "Adjustment Period")
commencing on the first trading day (such trading day, the "First Trading Day")
immediately following the last time tenders or exchanges may be made pursuant to
such tender or exchange offer (the "Expiration Time"), the Exercise Price shall
be adjusted in accordance with this formula:
E' = E x O x M
-----------
P + (A x M)
E'= the adjusted Exercise Price.
E = the current Exercise Price.
O = the number of shares of Common Stock outstanding
immediately prior to the Expiration Time, including,
in the case of any tender or exchange offer in
respect of securities convertible into or exercisable
or exchangeable for Common Stock, any shares of
Common Stock issuable upon the conversion, exercise
or exchange of such securities.
M = the average of the Quoted Prices (as defined in
subsection (g) of this Section 6) of the Common Stock
for the Adjustment Period.
P = the aggregate cash consideration and the fair
market value of any non-cash consideration payable to
stockholders based on the number of shares of Common
Stock (or securities convertible into or exercisable
<PAGE> 13
PAGE 42 OF 52 PAGES
or exchangeable for Common Stock) tendered or
exchanged (and not withdrawn) in connection with the
tender or exchange offer and accepted by the Company.
The Board of Directors shall determine the fair
market value of any non-cash consideration.
A = the number of shares of Common Stock outstanding at the
time of acceptance by the Company of any shares of Common
Stock (or securities convertible into or exercisable or
exchangeable for Common Stock) so tendered or exchanged and
accepted by the Company, including, in the case of any
tender or exchange offer in respect of securities
convertible into or exercisable or exchangeable for Common
Stock, any shares of Common Stock issuable upon the
conversion, exercise or exchange of such securities.
The adjustment shall be made successively whenever any such
tender or exchange offer is made. To the extent a Warrant holder exercises such
holder's Warrant(s) prior to the conclusion of the Adjustment Period, any
adjustment in the number of Warrant Shares issuable upon exercise of such
Warrant(s) shall be for the benefit of the holder of record of such Warrant(s)
at the close of trading on the First Trading Day.
This subsection (f) does not apply to redemptions of securities
pursuant to redemption provisions contained in the certificate of designation
pertaining to such securities in effect at the time such securities were issued,
whether such redemptions are optional or mandatory.
(g) Current Market Price. In subsections (b), (c), (d) and (e)
of this Section 6, the current market price per share of Common Stock on any
date is the average of the Quoted Prices of the Common Stock for 30 consecutive
trading days commencing 45 trading days before the date in question. The "Quoted
Price" of the Common Stock is the last reported sales price of the Common Stock
on any national securities exchange on which the Common Stock is listed which
shall be for consolidated trading if applicable to such exchange, or if not so
listed, the last reported bid price of the Common Stock. In the absence of one
or more such quotations, the Board of Directors of the Company shall determine
the current market price on such basis as it in good faith considers
appropriate.
(h) Consideration Received. For purposes of any computation
respecting consideration received pursuant to subsections (d) and (e) of this
Section 6, the following shall apply:
(i) in the case of the issuance of shares of Common
Stock for cash, the consideration shall be the amount of such cash, provided
that in no case shall any deduction be made for any commissions, discounts or
other expenses incurred by the Company for any underwriting of the issue or
otherwise in connection therewith;
<PAGE> 14
PAGE 43 OF 52 PAGES
(ii) in the case of the issuance of shares of Common
Stock for a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair market value thereof as
determined in good faith by the Company's Board of Directors (irrespective of
the accounting treatment thereof), whose determination shall be conclusive and
described in a Board resolution; and
(iii) in the case of the issuance of securities
convertible into or exercisable or exchangeable for shares, the aggregate
consideration received therefor shall be deemed to be the consideration
received by the Company for the issuance of such securities plus the additional
minimum consideration, if any, to be received by the Company upon the
conversion, exercise or exchange thereof (the consideration in each case to be
determined in the same manner as provided in clauses (i) and (ii) of this
subsection).
(i) When De Minimis Adjustment May Be Deferred. No adjustment
in the Exercise Price need be made unless the adjustment would require an
increase or decrease of at least 1% in the Exercise Price. Any adjustments that
are not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Section 6 shall be made to the nearest
cent or to the nearest 1/100th of a share, as the case may be.
(j) When No Adjustment Required. No adjustment need be made for a
transaction referred to in subsections (a), (b),(c), (d), (e) or (f) of this
Section 6 if Warrant holders are to participate in the transaction on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Common Stock
participate in the transaction.
No adjustment need be made for (i) a transaction referred to in
subsections (b), (d) or (e) of this Section 6 if the below market portion of
such issuances, taken together with the below market portions all other
issuances and with the above market portions of all tender or exchange offers
described in clause (ii) of this paragraph made on and after the date of this
Agreement, is less than 2.0% of the Total Market Capitalization of the Company
(determined by reference to the sum of the percentages of Total Market
Capitalization of the Company attributable to each such transaction on the date
thereof) and (ii) a transaction referred to in subsection (f) of this Section 6
if the above market portion of such tender or exchange offers, taken together
with the above market portions of all other tender or exchange offers and with
the below market portions of all issuances described in clause (i) of this
paragraph made on or after the date of this Agreement, is less than 2.0% of the
Total Market Capitalization of the Company (determined by reference to the sum
of the percentages of Total Market Capitalization of the Company attributable to
each such transaction on the date thereof). For purposes of this Agreement, the
Total Market Capitalization of the Company shall mean as of any day of
determination, the sum of (a) the consolidated indebtedness of the Company and
its subsidiaries on such day plus (b) the
<PAGE> 15
PAGE 44 OF 52 PAGES
product of (i) the Company's aggregate number of outstanding primary shares of
Common Stock on such day (which shall not include any options or warrants on, or
securities convertible or exchangeable into, shares of Common Stock other than,
any shares of preferred stock of the Company, that, as of the day of
determination, cannot, pursuant to the terms thereof as in effect on the date of
this Warrant, be required to be redeemed by the Company in cash), and (ii) the
average closing price of such Common Stock over the 20 consecutive trading days
immediately preceding such day, plus (c) the liquidation value of any
outstanding shares of preferred stock of the Company on such day. If no such
closing price exists with respect to shares of any such class, the value of such
shares for purposes of clause (b) for the preceding sentence shall be determined
by the Company's Board of Directors in good faith.
No adjustment need be made for a change in the par value, or from
par value to no par value, or from no par value to par value, of the Common
Stock.
To the extent the Warrants become convertible into cash, no
adjustment need be made thereafter as to the cash. Interest will not accrue on
the cash.
(k) Voluntary Reduction. The Company from time to time may, as
the Board of Directors deems appropriate, reduce the Exercise Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period; provided that in no event may the
Exercise Price be less than the par value of a share of Common Stock.
Whenever the Exercise Price is reduced, the Company shall mail
to Warrant holders a notice of the reduction. The Company shall mail the notice
at least 15 days before the date the reduced Exercise Price takes effect. The
notice shall state the reduced Exercise Price and the period it will be in
effect.
A voluntary reduction of the Exercise Price pursuant to this
Section 6(k), other than a reduction which the Company has irrevocably committed
will be in effect for so long as any Warrants are outstanding, does not change
or adjust the Exercise Price otherwise in effect for purposes of subsections
(a), (b), (c), (d), (e) and (f) of this Section 6.
(l) Reorganization of the Company.
(i) If the Company consolidates or merges with or into,
or transfers or leases all or substantially all its assets to, any person, upon
consummation of such transaction this Warrant shall automatically become
exercisable for the kind and amount of securities, cash or other assets which
the holder of a Warrant would have owned immediately after the consolidation,
merger, transfer or lease if the holder had exercised the Warrant immediately
before the effective date of the transaction. Concurrently with the consummation
of such transaction, the corporation formed by or surviving any such
consolidation or merger if other
<PAGE> 16
PAGE 45 OF 52 PAGES
than the Company, or the person to which such sale or conveyance shall have been
made (any such person, the "Successor Entity"), shall enter into a supplemental
agreement so providing and further providing for adjustments which shall be as
nearly equivalent as may be practical to the adjustments provided for in this
Section 6. The Successor Entity shall mail to the Warrant holder a notice
describing the supplemental agreement. If the issuer of securities deliverable
upon exercise of this Warrant under the supplemental agreement is an affiliate
of the formed, surviving, transferee or lessee corporation, that issuer shall
join in the supplemental agreement.
(ii) If this subsection (l) applies, subsections (a),
(b), (c), (d), (e) and (f) of this Section 6 do not apply.
(m) Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to subsection (a), (c),
(d), (e), (f), (g), (h) or (j) of this Section 6 may be challenged in good faith
by Warrantholders that hold Warrants entitling them to purchase at least 50% of
the Warrant Shares (the "Majority Warrantholders") by providing the Company
written notice of such challenge within ten (10) business days of the Company
providing Warrantholders notice of such determination. Any such challenge shall
be resolved by an investment banking firm selected by the Company and reasonably
acceptable to the Majority Warrantholders, which resolution shall be conclusive
and binding on the Company and the Warrantholders.
(n) When Issuance or Payment May Be Deferred. In any case in which
this Section 6 shall require that an adjustment in the Exercise Price be made
effective as of or immediately after a record date for a specified event, the
Company may elect to defer until the occurrence of such event (i) issuing to the
holder of any Warrant exercised after such record date the Warrant Shares and
other capital stock of the Company, if any, issuable upon such exercise over and
above the Warrant Shares and other capital stock of the Company, if any,
issuable upon such exercise on the basis of the Exercise Price prior to such
adjustment and (ii) paying to such holder any amount in cash in lieu of a
fractional share pursuant to Section 7.8 hereof; provided that the Company shall
deliver to such holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional Warrant Shares, other capital
stock and cash upon the occurrence of the event requiring such adjustment.
(o) Adjustment in Number of Shares. Upon each adjustment of the
Exercise Price pursuant to this Section 6, this Warrant shall thereafter
evidence the right to receive upon payment of the adjusted Exercise Price that
number of shares of Common Stock (calculated to the nearest hundredth) obtained
from the following formula:
N' = N x E
---
E'
<PAGE> 17
PAGE 46 OF 52 PAGES
where:
N'= the adjusted number of Warrant Shares issuable upon
exercise of a Warrant by payment of the adjusted
Exercise Price.
N = the number of Warrant Shares previously issuable
upon exercise of this Warrant by payment of the
Exercise Price prior to adjustment.
E'= the adjusted Exercise Price.
E = the Exercise Price prior to adjustment.
(p) Certificate as to Adjustments. Upon the occurrence of each
adjustment or readjustment of the Exercise Price or number of Warrant Shares
issuable upon exercise hereof pursuant to this Section 6, the Company, at its
expense, shall promptly compute such adjustment or readjustment in accordance
with the terms hereof and prepare and furnish to each Warrantholder a
certificate prepared by the Company (or by a firm of independent public
accountants of recognized standing selected by the Board of Directors of the
Company (who may be the regular auditors of the Company) if such accountants are
required to deliver a similar certificate pursuant to Section 18(a) of that
certain Warrant Agreement dated as of June 30, 1995 by and between the Company
and IBJ Schroder Bank & Trust Company, as Warrant Agent) setting forth such
adjustment or readjustment and showing in reasonable detail the method of
calculation and the facts upon which such adjustment or readjustment is based.
The Company shall, upon the written request at any time of any Warrantholder,
furnish or cause to be furnished to such holder a like certificate setting forth
(i) such adjustment and readjustment, (ii) the Exercise Price at the time in
effect, and (iii) the number of shares of Common Stock and the amount, if any,
of other property which at the time would be received upon the exercise of this
Warrant.
SECTION 7. MISCELLANEOUS.
7.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to this Warrant
and Warrant Shares.
7.2 Binding Effects; Benefits. This Warrant shall inure to the benefit
of and shall be binding upon the Company, the Warrantholder and holders of
Warrant Shares and their respective heirs, legal representatives, successors and
assigns. Nothing in this Warrant, expressed or implied, is intended to or shall
confer on any person other than the Company, the Warrantholder and holders of
Warrant Shares, or their respective heirs, legal representatives, successors or
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Warrant or the Warrant Shares.
<PAGE> 18
PAGE 47 OF 52 PAGES
7.3 Amendments and Waivers. This Warrant may not be modified or
amended except by an instrument in writing signed by the Company and the
Majority Warrantholders. The Company, any Warrantholder or holders of Warrant
Shares may, by an instrument in writing, waive compliance by the other party
with any term or provision of this Warrant on the part of such other party
hereto to be performed or complied with. The waiver by any such party of a
breach of any term or provision of this Warrant shall not be construed as a
waiver of any subsequent breach.
7.4 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
7.5 Further Assurances. Each of the Company, the Warrantholders and
holders of Warrant Shares shall do and perform all such further acts and things
(including, without limitation, any required filings under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended) and execute and deliver all such
other certificates, instruments and/or documents (including without limitation,
such proxies and/or powers of attorney as may be necessary or appropriate) as
any party hereto may, at any time and from time to time, reasonably request in
connection with the performance of any of the provisions of this Warrant.
7.6 Notices. All demands, requests, notices and other communications
required or permitted to be given under this Warrant shall be in writing and
shall be deemed to have been duly given if delivered personally or sent by
United States certified or registered first class mail, postage prepaid, to the
parties hereto at the following addresses or at such other address as any party
hereto shall hereafter specify by notice to the other party hereto:
(a) if to the Company, addressed to:
Geotek Communications, Inc.
20 Craig Road
Montvale, New Jersey 07645
Attention: President
(b) if to any Warrantholder or holder of Warrant Shares,
addressed to the address of such person appearing on the books of the
Company.
Except as otherwise provided herein, all such demands, requests,
notices and other communications shall be deemed to have been received on the
date of personal delivery thereof or on the third business day after the
mailing thereof.
7.7 Separability. Any term or provision of this Warrant which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of
<PAGE> 19
PAGE 48 OF 52 PAGES
such invalidity or unenforceability without rendering invalid or unenforceable
any other term or provision of this Warrant or affecting the validity or
enforceability of any of the terms or provisions of this Warrant in any other
jurisdiction.
7.8 Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant. With
respect to any fraction of a share called for upon any exercise hereof, the
Company shall pay to the Warrantholder an amount in cash equal to such fraction
multiplied by the current market price (as determined as of the date of
exercise, and with reference to the applicable trading market, in accordance
with Section 1.1(a)(ii)) of a share of such stock as of the date of such
exercise.
7.9 Rights of the Holder. The Warrantholder shall not, solely by
virtue of this Warrant, be entitled to any rights of a stockholder of the
Company, either at law or in equity.
7.10 Governing Law; Jurisdiction.
(a) This Warrant shall be governed by and construed in
accordance with the laws of the State of New York, without regard to such
State's internal conflicts of laws principles.
(b) Jurisdiction. With respect to any suit, action or preceding
relating to this Warrant, the Company irrevocably (i) submits to the
non-exclusive jurisdiction of the courts in the State of New York and the United
States District court located in the Borough of Manhattan in New York City; and
(ii) waives any objection which it may have at any time to the laying of venue
of any such suit, action or proceeding brought in any such court, waives any
claim that any such suit, action or proceeding has been brought in an
inconvenient forum and further waives the right to object with respect to any
such suit, action or proceeding that such court does not have any jurisdiction
over it.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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PAGE 49 OF 52 PAGES
Nothing contained in this Section 7.10 shall limit or impair
the right of a Warrantholder to institute any suit, action, motion or proceeding
in any other court of competent jurisdiction, nor shall the taking of any suit,
action or proceeding in one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction, whether concurrently or not.
(c) Service of Process. The Company irrevocably appoints the
following process agent to receive, for it and on its behalf, service of process
in any suit, action or proceeding relating to this Warrant: CT Corporation
System, 1633 Broadway, New York, New York 10019. If for any reason the Company's
process agent is unable to act as such, the Company will promptly notify the
Warrantholders and within thirty (30) days appoint a substitute process agent
acceptable to the Majority Warrantholders. Nothing in this Agreement will affect
the right of a Warrantholder to serve process in any other manner permitted by
law.
IN WITNESS WHEREOF, the Company has caused this Warrant to be
signed by its duly authorized officer.
GEOTEK COMMUNICATIONS, INC.
By: /s/ Michael McCoy
-------------------------------------
Name: Michael McCoy
Title: Chief Financial Officer
Dated: April 4, 1996
<PAGE> 21
PAGE 50 OF 52 PAGES
ASSIGNMENT
(To be executed only upon assignment of Warrant Certificate)
For value received, ____________________ hereby sells, assigns
and transfers unto _____________________ the within Warrant Certificate,
together with all right, title and interest therein, and does hereby irrevocably
constitute and appoint _________________ attorney, to transfer said Warrant
Certificate on the books of the within-named Company with respect to the number
of Warrants set forth below, with full power of substitution in the premises:
Name(s) of
Assignee(s) Address No. of Warrant Shares
And if said number of Warrants shall not be all the Warrants represented by the
Warrant Certificate, a new Warrant Certificate is to be issued in the name of
said undersigned for the balance remaining of the Warrants represented by said
Warrant Certificate.
Dated: ________________, 19___
____________________________________________
Note: The above signature should correspond
exactly with the name on the face of
this Warrant Certificate.
<PAGE> 22
PAGE 51 OF 52 PAGES
SUBSCRIPTION FORM
(TO BE EXECUTED UPON EXERCISE OF WARRANT
PURSUANT TO SECTION 1.1(A))
The undersigned hereby irrevocably elects to exercise the right of
purchase represented by the within Warrant Certificate for, and to purchase
thereunder, shares of Common Stock, as provided for therein, and delivers
payment in full of the Exercise Price in the amount of $ __________ as follows:
Cash $ __________
Certified or Official bank check $ __________
Please issue a certificate or certificates for such Common Stock
in the name of, and pay any cash for any fractional share to:
Name: ______________________________________
Address: ______________________________________
______________________________________
______________________________________
Social Security No.: ______________________________________
(Please Print Name, Address and Social Security
No.)
Signature: ______________________________________
NOTE: The above signature should
correspond exactly with the name
on the first page of this Warrant
Certificate or with the name of
the assignee appearing in the
assignment form delivered
herewith.
And if said number of shares shall not be all the shares
purchasable under the within Warrant Certificate, a new Warrant Certificate is
to be issued in the name of said undersigned for the balance remaining of the
shares purchasable thereunder rounded up to the next higher number of shares.
<PAGE> 1
PAGE 52 OF 52 PAGES
EXHIBIT L
The undersigned hereby agree that the statement on Schedule 13D with
respect to the Common Stock of Geotek Communications, Inc., dated April 11, 1996
is, and any amendments thereto signed by each of the undersigned shall be, filed
on behalf of us pursuant to and in accordance with the provisions of Rule
13d-1(f) under the Securities Exchange Act of 1934.
Date: April 11, 1996 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG Co.
General Partner
By: /s/ Peter Hurwitz
-----------------------------------
Peter Hurwitz
Vice President
Date: April 11, 1996 S-C RIG Co.
By: /s/ Peter Hurwitz
-----------------------------------
Peter Hurwitz
Vice President
Date: April 11, 1996 PURNENDU CHATTERJEE
By: /s/ Peter Hurwitz
-----------------------------------
Peter A. Hurwitz
Attorney-in-Fact
