<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 9)*
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)
June 20, 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 /X/. (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.
* Initial filing with respect to Winston Partners II LDC, Winston Partners II
LLC, Chatterjee Advisors LLC and Chatterjee Management Company.
Continued on following page(s)
Page 1 of 107 Pages
Exhibit Index: Page 18
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 2 of 107 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. / /
b. /x/
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 10,580,449
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 10,580,449
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10,580,449
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
15.54%
14 Type of Reporting Person*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 3 of 107 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. / /
b. /x/
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 10,580,449
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 10,580,449
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10,580,449
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
15.54%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 4 of 107 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS II LDC
2 Check the Appropriate Box If a Member of a Group*
a. / /
b. /x/
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 100,838
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 100,838
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
100,838
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
.18%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 5 of 107 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
WINSTON PARTNERS II LLC
2 Check the Appropriate Box If a Member of a Group*
a. / /
b. /x/
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 50,298
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 50,298
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
50,298
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
.09%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 6 of 107 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE ADVISORS LLC
2 Check the Appropriate Box If a Member of a Group*
a. / /
b. /x/
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 151,136
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 151,136
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
151,136
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
.26%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 7 of 107 Pages
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
CHATTERJEE MANAGEMENT COMPANY
2 Check the Appropriate Box If a Member of a Group*
a. / /
b. /x/
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 151,136
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 151,136
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
151,136
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
.26%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP No. 373654102 Page 8 of 107 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. / /
b. /x/
3 SEC Use Only
4 Source of Funds*
PF; 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
United States
7 Sole Voting Power
Number of 10,951,585
Shares
Beneficially 8 Shared Voting Power
Owned By 0
Each
Reporting 9 Sole Dispositive Power
Person 10,951,585
With
10 Shared Dispositive Power
0
11 Aggregate Amount Beneficially Owned by Each Reporting Person
10,951,585
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
/ /
13 Percent of Class Represented By Amount in Row (11)
16.00%
14 Type of Reporting Person*
IN; IA
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
Page 9 of 107 Pages
This Amendment No. 9 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 subsequent amendments thereto (collectively, the "Initial Statement"). This
Amendment No. 9 is being filed to report the subscription for and purchase of
Units (as defined herein) of the Issuer by S-C Rig Investments-III, L.P.,
Winston Partners II LDC and Winston Partners II LLC pursuant to the Subscription
Agreement (as defined herein). As more fully set forth herein, this statement
constitutes an initial statement for several additional Reporting Persons (as
defined herein) which, as a result of the transactions reported herein, may be
deemed to be the beneficial owners of Shares. 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 2. Identity and Background.
This statement is being filed on behalf of:
(i) S-C Rig Investments-III, L.P. ("S-C Rig III");
(ii) S-C Rig Co. (the "General Partner");
(iii) Winston Partners II LDC ("Winston LDC");
(iv) Winston Partners II LLC ("Winston LLC");
(v) Chatterjee Advisors LLC ("Chatterjee Advisors");
(vi) Chatterjee Management Company ("Chatterjee Management"); and
(vii) Purnendu Chatterjee ("Dr. Chatterjee"), in his individual capacity,
in his capacity as president, sole director and sole shareholder of
the General Partner and in his capacity as the person ultimately in
control of each of Chatterjee Advisors and Chatterjee Management.
(collectively, the "Reporting Persons"). This statement constitutes an
initial filing with respect to Winston LDC, Winston LLC, Chatterjee Advisors and
Chatterjee Management.
The Reporting Persons
S-C Rig III and the General Partner
S-C Rig III is a Delaware limited partnership organized pursuant to the
terms of a limited partnership agreement dated April 27, 1993. S-C Rig III has
its and principal office at 888 Seventh Avenue, 30th Floor, New York, New York
10106. The sole business of S-C Rig III is to make investments.
<PAGE>
Page 10 of 107 Pages
The sole general partner of S-C Rig III is S-C Rig Co., a Delaware
corporation, with its principal place of business at 888 Seventh Avenue, 30th
Floor, New York, New York 10106. The principal business of the General Partner
is to act as general partner of S-C Rig III and certain other investment limited
partnerships. Dr. Chatterjee is the president, sole director and sole
shareholder of the General Partner.
Tivadar Charitable Lead Trust dated September 30, 1982 ("Tivadar") and PMCC
Acquisition Corp. ("PMCC") are the sole limited partners of S-C Rig III. Tivadar
is a charitable lead trust created by Mr. George Soros, as grantor, on September
30, 1982 for the benefit of charitable donees and members of his family. Mr.
Michael C. Neus serves as the sole trustee for Tivadar, which is governed by the
laws of the State of New York.
The principal occupation of Mr. Soros, a United States citizen, is as an
investment manager. Mr. Soros conducts his business through Soros Fund
Management ("SFM"), of which he is sole proprietor. SFM has its principal office
at 888 Seventh Avenue, 33rd Floor, New York, New York 10106. Mr. Neus, a United
States citizen, is principally engaged in the practice of law in his capacity as
Assistant General Counsel of SFM. The principal place of business of Tivadar is
in the State of New Jersey.
PMCC is a Delaware corporation with its principal place of business at 888
Seventh Avenue, 30th Floor, New York, New York 10106. Dr. Chatterjee is the
president, sole director and sole shareholder of PMCC. The sole business of PMCC
is to make investments.
During the past five years, none of S-C Rig III, the General Partner, Mr.
Soros, Michael C. Neus, PMCC and Tivadar has been: (a) convicted in a criminal
proceeding; or (b) a party to any civil proceeding as a result of which any of
them has been subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Previous 13D filings made with respect to the Issuer have listed Tivadar as
a Reporting Person. Tivadar is no longer deemed a Reporting Person hereunder by
virtue of the fact that it has no voting or dispositive power over the
securities held for the account of S-C Rig III.
Winston LDC, Winston LLC, Chatterjee Advisors and Chatterjee Management
Winston LDC is a Cayman Islands exempted limited duration company with its
principal office at Kaya Flamboyan 9, Curacao, Netherlands Antilles. Winston LDC
was organized as the operating unit of Winston Partners II Offshore Ltd., an
open-end investment company incorporated in the British Virgin Islands (the
"Fund"). The Fund invests all of its assets in Winston LDC, and is the largest
shareholder in Winston LDC. Chatterjee Advisors, Chatterjee Fund Investors LDC
(an affiliate of Chatterjee Advisors) and certain non-U.S. employees of
Chatterjee Management are also shareholders of Winston LDC. The sole business of
Winston LDC is investing in securities.
Winston LLC is a limited liability company formed under the laws of the
State of Delaware with its principal office at 888 Seventh Avenue, 30th Floor,
New York, New York 10106. Chatterjee Advisors, Chatterjee Fund Investors LDC
(an affiliate of Chatterjee Advisors) and certain U.S. employees of Chatterjee
Management are also shareholders of Winston LLC. The sole business of Winston
LLC is investing in securities.
Chatterjee Advisors, a Delaware limited liability company that is managed
and controlled by Dr. Chatterjee, serves as the manager, and is responsible for
supervising the operations, of each of Winston LDC and Winston LLC. The
principal office of Chatterjee Advisors is located at 888 Seventh Avenue, 30th
Floor, New York, New York 10106. Chatterjee Management, a Delaware corporation
that is managed and controlled
<PAGE>
Page 11 of 107 Pages
by Dr. Chatterjee, serves as investment advisor to each of Winston LDC and
Winston LLC pursuant to investment management contracts between Chatterjee
Management, Chatterjee Advisors and each of Winston LDC and Winston LLC. As
such, Chatterjee Management has full discretion and authority to make
investments in securities (including the June Warrants and Series N Shares, as
such terms are defined below) on behalf of each of Winston LDC and Winston LLC.
The principal office of Chatterjee Management is located at 888 Seventh Avenue,
30th Floor, New York, New York 10106.
Chatterjee Advisors, by virtue of its ability to terminate its contractual
relationship with Chatterjee Management within 60 days, and Chatterjee
Management, by virtue of its authority to make investments on behalf of Winston
LDC and Winston LLC, may each be deemed to have (or have the ability to acquire)
voting and dispositive power over securities held for the accounts of Winston
LDC and Winston LLC and therefore may each be deemed to be the beneficial owner
of securities (including the June Warrants and Series N Shares, as such terms
are defined below) held for the account of each of Winston LDC and Winston LLC
for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended
(the "Act").
During the past five years, none of Winston LDC, Winston LLC, Chatterjee
Advisors and Chatterjee Management has been: (a) convicted in a criminal
proceeding; or (b) a party to any civil proceeding as a result of which any of
them has been subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violation with respect to such laws.
Dr. Chatterjee
The principal occupation of Dr. Chatterjee, a United States citizen, is as
an investment manager. Dr. Chatterjee has his principal place of business at 888
Seventh Avenue, 30th Floor, New York, New York 10106. Pursuant to regulations
promulgated under Section 13(d) of the Act, Dr. Chatterjee may be deemed to be
the beneficial owner of securities held for the account of S-C Rig III (as
president, sole director and sole shareholder of the General Partner), Winston
LDC (as the person ultimately in control of Chatterjee Advisors and Chatterjee
Management) and Winston LLC (as the person ultimately in control of Chatterjee
Advisors and Chatterjee Management).
On January 13, 1993, the Securities and Exchange Commission (the
"Commission") filed a civil complaint in the United States District Court for
the District of Massachusetts against certain defendants, including Dr.
Chatterjee, wherein the Commission alleged that Dr. Chatterjee engaged in
conduct in violation of, or aided and abetted certain alleged violations of,
Sections 10(b) and 14(e) of the Act and certain rules promulgated thereunder.
Dr. Chatterjee settled the Commission's action on the same date it was filed
without admitting or denying the allegations of the complaint. Dr. Chatterjee
consented to the entry of a Final Judgment restraining and enjoining him from,
inter alia, violating, or aiding and abetting violations of, Sections 10(b) and
14(e) of the Act and the rules promulgated thereunder. Dr. Chatterjee also
agreed to pay a civil penalty of $643,855. During the past five years, Dr.
Chatterjee, has not been convicted in any criminal proceeding.
Item 3. Source and Amount of Funds or Other Consideration.
On June 14, 1996, each of S-C Rig III, Winston LDC and Winston LLC entered
into a subscription agreement (the "Subscription Agreement") with the Issuer, a
copy of which is attached hereto as Exhibit M and incorporated herein by
reference in response to this Item 3. Pursuant to the terms of the Subscription
Agreement,
<PAGE>
Page 12 of 107 Pages
each of S-C Rig III, Winston LDC and Winston LLC agreed to purchase, subject to
the fulfillment of certain conditions, 3,750 units, 834 units and 416 units (the
"Units"), respectively, from the Issuer for a subscription price of $1,000 per
Unit, or an aggregate purchase price of $3,750,000, $834,000 and $416,000,
respectively. Each Unit consists of one share of the Issuer's Series N
Cumulative Preferred Stock, $.01 par value per share (the "Series N Shares") and
warrants (the "June Warrants") to purchase 30 Shares at an initial price of
$11.00 per share, subject to adjustment in certain circumstances. The June
Warrants expire on June 20, 2001. On June 20, 1996, all of the conditions to the
obligation of each of S-C Rig III, Winston LDC and Winston LLC to purchase the
Units were fulfilled and on that same date each purchased the Units pursuant to
the Subscription Agreement.
S-C Rig III obtained the funds for payment of the subscription price from
its partners. To the best of S-C Rig III's knowledge, such partners obtained
their funds from working capital or personal funds. Winston LDC and Winston LLC
obtained the funds for payment of the subscription price from their shareholders
and members, respectively. To the best of Winston LDC's and Winston LLC's
knowledge, such shareholders and members obtained their funds from working
capital or personal funds.
Item 4. Purpose of Transaction.
Each of S-C Rig III, Winston LDC and Winston LLC entered into the
Subscription Agreement with the Issuer for investment purposes.
The Series N Shares were issued pursuant to the terms set forth in the
Certificate of Designation attached as Exhibit A to the Subscription Agreement
(the "Series N Certificate of Designation"). The Series N Certificate of
Designation confers on holders of the Series N Shares the rights provided for
therein. The stated value of the Series N Shares is $1,000 per share, with a
cumulative preferred dividend of 10% of the stated value to be paid in Shares.
The Series N Shares are redeemable upon the occurrence of certain events and
convertible at the option of the holder thereof. The Series N Shares held for
the accounts of S-C Rig III, Winston LDC and Winston LLC are initially
convertible into 340,909 Shares, 75,818 Shares and 37,818 Shares, respectively.
Pursuant to the Series N Certificate of Designation, so long as the Series
N Shares are outstanding, if dividends on the Series N Shares shall have been in
arrears and not paid in full with respect to two quarterly dividend payment
dates, or if the Issuer fails to redeem the Series N Shares on the redemption
date therefor, the number of directors constituting the Board shall
automatically be increased by one, and the holders of the Series N Shares shall
have the exclusive right to elect the additional director.
The June Warrants will be issued pursuant to the Subscription Agreement.
The form of each of the June Warrants is attached as Exhibit B to the
Subscription Agreement. The June Warrants are exercisable on or after June 20,
1996 and expire on June 20, 2001. Each June Warrant entitles the holder thereof
to purchase the number of Shares provided therein at $11.00 per share. The June
Warrants will entitle S-C Rig III, Winston LDC and Winston LLC to purchase
112,500 Shares, 25,020 Shares and 12,480 Shares, respectively.
S-C Rig III, Winston LDC, Winston LLC and their affiliates intend to review
from time to time the Issuer's business affairs and financial position. Based on
such evaluation and review, as well as general economic and industry conditions
existing at the time, S-C Rig III, Winston LDC, Winston LLC and their affiliates
may
<PAGE>
Page 13 of 107 Pages
consider from time to time alternative courses of action. Such action may
include, subject to the receipt of all necessary regulatory approvals, the
acquisition of additional securities of the Issuer through open market
purchases, privately negotiated transactions, tender offer, exchange offer or
otherwise. Alternatively, and subject to the terms of the 1993 Stock Purchase
Agreement, the 1994 Stock Purchase Agreement and the Subscription Agreement,
such actions may involve the sale of all or a portion of the securities
currently held for the account of S-C Rig III, Winston LDC and Winston LLC, or
the Shares issuable upon conversion or exercise of such securities, in the open
market, in privately negotiated transactions, through a public offering or
otherwise.
Except as set forth above and except as contemplated by the agreements
described herein, neither 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.
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 10,580,449 (approximately 15.54% 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 held for its
account). 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, (iii) 621,000 Shares issuable upon the exercise of the 621,000
Warrants, (iv) 4,210,526 issuable upon exercise of the April Warrant, (v)
340,909 Shares issuable upon conversion of the Series N Shares held for the
account of S-C Rig III, and (vi) 112,500 issuable upon exercise of the June
Warrants held for the account of S-C Rig III.
(ii) The aggregate number of Shares of which Winston LDC may be deemed
a beneficial owner is 100,838 (approximately .18% of the total number of Shares
which would be outstanding assuming the exercise or conversion of all
convertible securities held for the account of Winston LDC). This number
consists of (i) 75,818 Shares issuable upon conversion of the Series N Shares
held for its account, and (ii) 25,020 Shares issuable upon exercise of the June
Warrants held for its account.
(iii) The aggregate number of Shares of which Winston LLC may be deemed
a beneficial owner is 50,298 (approximately .09% of the total number of Shares
which would be outstanding assuming the exercise or conversion of all
convertible securities held for the account of Winston LLC). This number
consists of (i) 37,818 Shares issuable upon conversion of the Series N Shares
held for its account, and (ii) 12,480 Shares issuable upon exercise of the June
Warrants held for its account.
(iv) The aggregate number of Shares of which each of Chatterjee
Advisors and Chatterjee Management may be deemed a beneficial owner is 151,136
(approximately .26% of the total number of Shares which would be outstanding
assuming the exercise or conversion of all convertible securities held for the
accounts of Winston LDC and Winston LLC). This number consists of (i) 100,838
Shares which Winston LDC may be deemed to own beneficially, and (ii) 50,298
Shares which Winston LLC may be deemed to own beneficially.
<PAGE>
Page 14 of 107 Pages
(v) The aggregate number of Shares of which Dr. Chatterjee may be
deemed a beneficial owner is 10,951,585 (approximately 16.00% 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) 10,580,449 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, (iii) 200,000 Shares issuable
upon exercise of the options held by XTEC and (iv) 151,136 Shares which
Chatterjee Advisors and Chatterjee Management may be deemed to own
beneficially.
(b) (i) S-C Rig III has sole power to vote and dispose of the Series H
Shares, the Series I Shares, the Series N Shares and warrants held for its
account and any Shares issued upon conversion or exercise of the aforementioned.
Such powers will be exercised by Dr. Chatterjee, in his capacity as the
President, sole director and sole shareholder of the General Partner.
(ii) Dr. Chatterjee may be deemed to have the sole power to vote and
dispose of the 220,000 Shares issuable upon exercise of the 20,000 options held
directly by him and the 200,000 options held by XTEC.
(iii) Each of Winston LDC and Winston LLC has sole power to vote and
dispose of the Series N Shares and June Warrants held for its account and any
Shares issued upon conversion or exercise of any of the aforementioned. Such
powers will be exercised by Dr. Chatterjee, in his capacity as the person
ultimately in control of both Chatterjee Advisors and Chatterjee Management.
(c) Other than as set forth herein, no transactions in the securities of
the Issuer have been effected since June 7, 1996, the filing the most recent
amendment to this Schedule 13D by the Reporting Persons or, to the best of their
knowledge, any other individuals identified in response to Item 2.
(d) (i) Other than the partners of S-C Rig III, no other individuals or
entities have the right to participate in the receipt of dividends from, or
proceeds for the sale of, the securities described herein as being held for the
account of S-C Rig III.
(ii) Dr. Chatterjee has the right to receive dividends from, or
proceeds for the sale of, the 20,000 options described herein as being held
directly by him.
(iii) The shareholders of XTEC have the right to receive dividends
from, or proceeds for the sale of, the 200,000 options described herein as
being held by XTEC.
(iv) Other than the shareholders of each of Winston LDC and Winston
LLC, no other individuals or entities have the right to participate in the
receipt of dividends from, or proceeds for the sale of, the securities described
herein as being held for the account each of Winston LDC and Winston LLC.
(e) Not Applicable.
<PAGE>
Page 15 of 107 Pages
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
Except for the Subscription Agreement attached hereto as Exhibit M and
incorporated herein by reference in response to this Item 6 and except for the
agreements described in the Initial Statement, 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.
(a) Subscription Agreement dated as of June 14, 1996 by and between Geotek
Communications, Inc. and each of S-C Rig Investments-III, L.P., Winston Partners
II LDC and Winston Partners II LLC.
(b) Joint Filing Agreement, dated as of June 26, 1996, by and among S-C Rig
Investments-III, L.P., S-C Rig Co., Winston Partners II LDC, Winston Partners II
LLC, Chatterjee Advisors LLC, Chatterjee Management Company and Purnendu
Chatterjee.
<PAGE>
Page 16 of 107 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.
June 26, 1996 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG CO., its General Partner
By: /s/ Peter Hurwitz
------------------------------
Peter Hurwitz
Vice President
June 26, 1996 S-C RIG CO.
By: /s/ Peter Hurwitz
---------------------------------
Peter Hurwitz
Vice President
June 26, 1996 WINSTON PARTNERS II LDC
By: /s/ Kieran Conroy / Wiekert Weber
---------------------------------
Curacao Corporation Company N.V.
Sole Director
June 26, 1996 WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC, its Manager
By: /s/ Peter Hurwitz
------------------------------
Peter Hurwitz
Manager
<PAGE>
Page 17 of 107 Pages
June 26, 1996 CHATTERJEE ADVISORS LLC
By: /s/ Peter Hurwitz
---------------------------------
Peter Hurwitz
Manager
June 26, 1996 CHATTERJEE MANAGEMENT COMPANY
By: /s/ Peter Hurwitz
---------------------------------
Peter Hurwitz
Vice President
June 26, 1996 PURNENDU CHATTERJEE
By: /s/ Peter Hurwitz
---------------------------------
Peter Hurwitz
Attorney-in-Fact
<PAGE>
Page 18 of 107 Pages
INDEX OF EXHIBITS
EXHIBIT PAGE
- ------- ----
M Subscription Agreement dated as of June 14, 1996 by and 19
between Geotek Communications, Inc. and each of S-C Rig
Investments-III, L.P., Winston Partners II LDC and Winston
Partners II LLC.
N Joint Filing Agreement, dated as of June 26, 1996, by and 106
among S-C Rig Investments-III, L.P., S-C Rig Co., Winston
Partners II LDC, Winston Partners II LLC, Chatterjee
Advisors LLC, Chatterjee Management Company and Purnendu
Chatterjee.
Page 19 of 107 Pages
EXHIBIT M
<PAGE>
Page 20 of 107 Pages
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT, by and between Geotek Communications, Inc., a
Delaware corporation (the "Company"), and the subscriber whose name and
signature appear on the signature page hereof ("Subscriber") is made as of June
__, 1996.
In consideration of the mutual covenants and agreements contained herein,
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
ARTICLE 1. Subscription for Units
1.1 Subscription. Subscriber hereby subscribes for such number of units
("Units") as set forth above such Subscriber's name on the signature page hereof
(the "Subscription"). Each Unit consisting of (i) one (1) share (the "Preferred
Shares") of the Company's Series N Cumulative Convertible Preferred Stock, $.01
par value per share ("Series N Preferred Stock") and (ii) a warrant ("Warrant")
to purchase thirty (30) shares of the Company's common stock, par value $.01 per
share ("Common Stock"). The Subscriber understands that the subscription price
is one thousand dollars ($1000.00) per Unit. A description of the designations,
powers, preferences and rights of the Series N Preferred Stock is set forth in
the Certificate of Designation of the Series N Preferred Stock, a copy of which
is attached hereto as Exhibit A (the "Certificate of Designation"). The terms of
the Warrant are set forth in the form of Warrant attached hereto as Exhibit B.
1.2 Payment of Capital Contribution. On the Closing Date (as defined
herein), the Subscriber shall deliver, by certified check or wire transfer, the
amount of one thousand dollars ($1000.00) per Unit subscribed, being the
Subscriber's full Subscription hereunder as set forth on the signature page
hereof, and the Company shall deliver to the Subscriber a certificate
representing the number of Preferred Shares and such number of Warrants
subscribed to and accepted pursuant hereto.
1.3 Conditions to Acceptance of Subscription. The Subscriber acknowledges
that the Company is offering (the "Offering") for sale from time to time, solely
to "accredited investors" (as defined herein), a minimum of forty-five thousand
(45,000) Units and a maximum of fifty-five thousand (55,000) Units to be
subscribed for on or prior to June 15, 1996, at the subscription price of one
thousand dollars ($1000.00) per Unit. Purchasers of Units in the Offering are
referred to herein as "Investors."
1.4 Closing. Subject to the satisfaction or waiver of the conditions set
forth herein, the closing of the purchase and sale of the Units (the "Closing")
shall take place at the offices
<PAGE>
Page 21 of 107 Pages
of Klehr, Harrison, Harvey, Branzburg & Ellers, 1401 Walnut Street,
Philadelphia, Pennsylvania 19102 at 10:00 A.M., on June 20, 1996 (the "Closing
Date") or at such other place and time and date as may be mutually agreed;
provided, however, that in the event a subscriber in the Offering is required to
file a premerger notification under the HSR Act (as defined herein), the Closing
Date shall be extended to the third business day following the expiration or
earlier termination of the waiting period with respect to such filing.
ARTICLE 2. Representations and Agreements of the Subscriber
2.1 Receipt of Materials. The Subscriber hereby acknowledges receipt of
copies of the Company's (i) Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 (excluding exhibits), (ii) Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1996, (iii) proxy statement (as supplemented,
the "Proxy Statement") relating to the Company's 1996 annual meeting of
stockholders, (iv) all Current Reports on Form 8-K filed since December 31, 1995
and (v) registration statement on Form S-3 (Reg. No. 333-02849) (the "S-3")
filed with the Securities and Exchange Commission (the "SEC") on April 25, 1996.
All such documents being referred to herein as the "Materials".
2.2 Agreement Not To Sell Securities. The Subscriber hereby acknowledges,
understands and agrees that:
(a) Except as provided in Article 4 hereof, the Units, Preferred
Shares, Warrants and shares of Common Stock issuable (A) upon conversion of, and
as a dividend on, the Preferred Shares in accordance with the provisions of the
Certificate of Designation (collectively, the "Conversion Shares") and (B) upon
exercise of the Warrants in accordance with the terms and provisions of the
Warrants (the "Warrant Shares" and collectively with the Conversion Shares, the
"Common Shares" and collectively with the Units, Preferred Shares and Warrants,
the "Securities") have not been and are not being registered under the
Securities Act or any state securities laws, and may not be transferred unless
(X) subsequently registered thereunder, or (Y) the Subscriber shall have
delivered to the Company an opinion of counsel (which opinion and counsel shall
be reasonably acceptable to the Company) to the effect that the Securities to be
sold or transferred may be sold or transferred pursuant to an exemption from
such registration, or (Z) sold pursuant to Rule 144 promulgated under the
Securities Act (or a successor rule).
(b) The Preferred Shares, Warrants and, until such time as the
Common Shares have been sold pursuant to a registration statement pursuant to
the Securities Act or otherwise sold by Subscriber pursuant to Rule 144 under
the Securities Act (or any successor rule thereto), the certificates for the
Common Shares, may bear a restrictive legend in substantially the following form
(and a stop-transfer order may be placed against transfer of the certificates
for such securities):
-2-
<PAGE>
Page 22 of 107 Pages
"The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended. The securities may not be
sold, transferred or assigned in the absence of an effective registration
statement for the securities under said Act, or an opinion of counsel, in
form, substance and scope reasonably acceptable to the Company, that
registration is not required under said Act or unless sold pursuant to
Rule 144 under said Act."
2.3 Acknowledgments. The Subscriber hereby acknowledges, understands and
agrees that:
(a) No Federal or state agency has made any findings or
determination as to the fairness of the Offering of the Units for public
investment, or any recommendation or endorsement of the Units. The Subscriber
acknowledges that the Units are being purchased for its own account, not as a
nominee or agent, for investment and not for distribution or resale of any part
thereof to others. The Subscriber acknowledges that the Company has made
available at a reasonable time prior to its investment the opportunity to ask
questions and receive answers concerning the terms and conditions of the
Offering and to obtain any additional information which the Company possesses or
can acquire without unreasonable effort or expense that is necessary to evaluate
an investment in the Company or to verify the accuracy of the information set
forth in the Materials.
(b) None of the Securities have been registered under the Securities
Act and the Subscriber must bear the economic risk of the investment
indefinitely (subject to the rights set forth in Article 4 hereof) because none
of the Securities may be sold except in accordance with Section 2.2 above and
Article 4 hereof.
(c) The Securities are subject to the particular investment
restrictions and conditions established by various states and the Subscriber
shall comply with the restrictions and conditions which are applicable in the
Subscriber's state of residence.
(d) Arnhold and S. Bleichroeder, Inc. (the "Placement Agent") has
acted as placement agent on behalf of the Company with respect to the Offering.
As compensation for its services, the Company has agreed to pay the Placement
Agent a fee equal to three percent (3.0%) of the gross proceeds of the Offering,
payable upon consummation of the Offering.
2.4 Representation and Warranties. Subscriber hereby further severally
represents and warrants that:
(a) The Subscriber understands that there is no established market
for the Preferred Shares or Warrants and that no public market for the Preferred
Shares or Warrants is currently foreseeable.
-3-
<PAGE>
Page 23 of 107 Pages
(b) The Subscriber is acquiring the Units for its own account for
investment purposes only and not with a view to the resale or distribution
thereof.
(c) The Subscriber has not and will not, directly or indirectly,
offer, sell, transfer, assign, exchange or otherwise dispose of all or any part
of the Units, except in accordance with the provisions of this Subscription
Agreement, the Certificate of Designation or the Warrants, as applicable, as
long as such documents remain in effect.
(d) The Subscriber is acquiring the Units without having relied upon
any offering literature or prospectus other than the Materials. The Subscriber
has such knowledge and experience in financial, business and tax matters that
the Subscriber is capable of evaluating the merits and risks relating to the
Subscriber's investment in the Securities and making an investment decision with
respect to the Company.
(e) To the full satisfaction of the Subscriber, the Subscriber has
been given the opportunity to obtain information and documents relating to the
Company and to ask questions of and receive answers from representatives of the
Company concerning the Company and the investment in the Securities.
(f) The Subscriber has adequately analyzed the risks of an
investment in the Securities and it has determined that the Securities are a
suitable investment for the Subscriber and that the Subscriber is able at this
time, and in the foreseeable future, to bear the economic risk of a total loss
of its investment in the Company.
(g) The Subscriber is aware that there are substantial risks
attendant to an investment in the Securities, including those summarized under
"Risk Factors" in the S-3.
(h) The Subscriber is an "accredited investor" within the meaning of
Rule 501 of Regulation D of the Act as presently in effect and is purchasing the
Securities for its own account. The Subscriber has not been formed for the
specific purpose of acquiring the Securities.
(i) The Subscriber understands that the Units, Preferred Shares and
Warrants are being offered and sold to it in reliance upon specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying upon the truth and accuracy of, and the
Subscriber's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Subscriber set forth herein in order
Page 24 of 107 Pages
to determine the availability of such exemptions and the eligibility of the
Subscriber to acquire the Units, Preferred Shares and Warrants. Subscriber
hereby agrees to indemnify and hold harmless the Company, the Placement Agent
and all Persons deemed to be in control of any of the foregoing from and against
any and all damage, loss, liability and expense (including, without limitation,
reasonable expenses of investigation and attorneys' fees and expenses in
connection with any action, suit or proceeding brought against the Company)
incurred or suffered by the Company out of the inaccuracy of any of the
representations or warranties made by the Subscriber in this Article 2. All such
representations shall survive the delivery of the Materials
-4-
<PAGE>
and the purchase by the Subscriber of any Securities until the second
anniversary of the Closing Date. The Company shall give prompt written notice to
the Subscriber of the assertion of any claim for which indemnity may be sought
hereunder, specifying with reasonable particularity the basis therefor, together
with any supporting information reasonably requested by the Subscriber, and the
amount of the damage, loss, liability or expense. If any amount is due by the
Subscriber to the Company pursuant to this paragraph, the Subscriber will make
such payment not later than 60 days after receipt by the Subscriber of notice of
the amount due.
The foregoing representations and warranties and all other
information which the Subscriber has provided to the Company concerning itself
and its financial condition are true and accurate as of the date hereof and
shall be true and accurate as of the date of Closing. If in any respect such
representations, warranties or information shall not be true and accurate at any
time prior to the Closing, the Subscriber will give written notice of such fact
to the Company specifying which representations, warranties or information are
not true and accurate and the reasons therefor.
2.5 Transferability. Without the Company's consent, the Subscriber agrees
not to transfer or assign this Subscription Agreement or any interest herein and
not to sell or assign the Securities except in accordance with all applicable
laws.
2.6 Execution Authorized. If this Subscription Agreement is executed on
behalf of a corporation, partnership, trust or other entity, the execution of
this Subscription Agreement in connection with the purchase of the Units has
been duly authorized, and this Subscription Agreement is binding upon such
corporation, partnership, trust or other entity.
2.7 HSR Act Compliance. For purposes of complying with any applicable
provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), the Subscriber or the Company (as the case may be)
agrees to provide promptly to the other, upon the other's written request, all
reasonable requested information regarding itself which is necessary for the
Page 25 of 107 Pages
requesting party to file any notifications or other information with the United
States Justice Department or Federal Trade Commission pursuant to the HSR Act.
In the event Subscriber is required to file a premerger notification under the
HSR Act with respect to the transactions contemplated hereby, the Subscriber and
the Company shall promptly prepare and make all such required filings and shall
request early termination of the waiting period with respect thereto.
ARTICLE 3. Representations and Warranties of the Company
The Company hereby represents and warrants to Subscriber that, as of the
date hereof and as of the Closing Date, except as set forth in the Schedule of
Exceptions attached hereto as Schedule 1 (the "Schedule of Exceptions"):
-5-
<PAGE>
3.1 Organization and Qualification. The Company is a corporation duly
organized and validly existing under the laws of the State of Delaware and has
all requisite corporate power and authority to enter into this Subscription
Agreement and the Warrant and to consummate the transactions contemplated hereby
and thereby. The Company is duly qualified and in good standing in each
jurisdiction in which the property owned, leased or operated by it or the nature
of the business conducted by it makes such qualification necessary and where the
failure to be so qualified has or would be reasonably expected to have a
Material Adverse Effect (as defined below). The term "Material Adverse Effect"
means any change or effect that is or is reasonably likely to be materially
adverse to the business, results of operations or financial condition or
prospects of the Company and the Subsidiaries (as defined below), taken as a
whole.
3.2 Subsidiaries. The Schedule of Exceptions sets forth each Person in
which the Company directly or indirectly owns any of the capital stock or any
partnership or other ownership interest (the "Subsidiaries"). Other than as set
forth on the Schedule of Exceptions, there are no outstanding preemptive rights,
conversion rights, options, warrants or other rights or agreements for the
purchase or acquisition of any shares of the Subsidiaries. The Subsidiaries were
duly organized and are validly existing and in good standing under the laws of
the jurisdiction of their organization. The Subsidiaries have not qualified to
do business as foreign corporations in any jurisdiction, and such qualification
is not presently required in any jurisdiction in which the failure so to qualify
would have a Material Adverse Effect.
3.3 Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of (i) 135,000,000 shares of Common Stock of which
57,933,433 shares were issued and outstanding, 4,145,136 shares were reserved
for issuance pursuant to the Company's stock option plans and 48,171,535 other
shares were reserved for issuance pursuant to securities (other than the
Page 26 of 107 Pages
Preferred Shares and the Warrants) exercisable for, or convertible into or
exchangeable for any shares of Common Stock as of June 10, 1996 and (ii)
4,000,000 authorized shares of preferred stock, $.01 par value per share
("Preferred Stock"), of which an aggregate of 1,508,573.5 shares were issued and
outstanding as of the date hereof, consisting of 444,445 shares of Series H
Cumulative Convertible Preferred Stock which is convertible into 4,444,450
shares of Common Stock, 20 shares of Series I Cumulative Convertible Preferred
Stock which is convertible into 851,064 shares of Common Stock, 20 shares of
Series K Cumulative Convertible Preferred Stock which is convertible into
851,050 shares of Common Stock, 1,062,926 shares of Series L Cumulative
Convertible Preferred Stock which is convertible into 1,062,926 shares of Common
Stock and 1,162.5 shares of Series M Cumulative Convertible Preferred Stock
which is convertible into 1,223,684 shares of Common Stock (the amount of Common
Stock set forth above into which the shares of Preferred Stock are convertible
assumes that at the time of conversion of such Preferred Stock there are no
accrued or unpaid dividends thereon). In addition, pursuant to waivers granted
by certain stockholders of the Company, as of May 14, 1996, the Company had not
reserved for issuance an aggregate of 11,646,026 shares of Common Stock issuable
in connection with four unrelated transactions set forth under "Proposal II" in
the Proxy Statement. Upon the effective date of the amendment to the Company's
Certificate of Incorporation to increase the Company's authorized shares of
Common Stock to 135,000,000 (the "Amendment"), the Company reserved all such
11,646,026 shares of Common Stock for issuance.
-6-
<PAGE>
Except as set forth on the Schedule of Exceptions, since April 4, 1996 the
Company has not issued any Common Stock or any securities exercisable for,
convertible into or exchangeable for any shares of Common Stock.
Except as set forth on the Schedule of Exceptions, there were, and
on the Closing Date there will be, 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.
3.4 Authorization.(i) All corporate action on the part of the Company
necessary for the authorization, execution and delivery of this Agreement, the
Warrants and the performance of all obligations of the Company under this
Agreement and the Warrants has been taken and (ii) all corporate action on the
part of the Company necessary for the authorization, issuance (and reservation
for issuance) and delivery of the (A) Preferred Shares on the terms set forth in
the Certificate of Designation, (B) the Warrants and (C) the Common Shares will
have been taken as of the Closing. This Agreement and the Warrants issuable
hereunder constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms.
3.5 Valid Issuance of Preferred Shares and Common Shares; Reservation of
Shares. When issued and paid for pursuant hereto, the Preferred Shares will be
Page 27 of 107 Pages
duly and validly issued, fully paid and nonassessable. Upon issuance, the Common
Shares shall be duly authorized and, upon conversion of, or issuance as a
dividend on, the Preferred Shares and upon the proper exercise of the Warrants,
as applicable, the Common Shares shall be validly issued, fully paid and
non-assessable and free from all taxes, liens (imposed through the actions or
failure to act of the Company) and charges with respect to the issue thereof and
shall not be subject to preemptive rights or other similar rights of
stockholders of the Company. The outstanding shares of Common Stock are all duly
and validly authorized and issued, fully paid and nonassessable.
The Company shall at all times have authorized, and reserved for the
purpose of issuance, a sufficient number of shares of Common Stock to provide
for (i) the full conversion of the outstanding Preferred Shares and issuance of
the Conversion Shares in connection therewith and for the payment of dividends
payable thereon for the following year at the then current Market Price (as
defined in the Certificate of Designation), (ii) the full exercise of the
Warrants and the issuance of the Warrant Shares in connection therewith (based
on the exercise price of the Warrants in effect from time to time) and (iii) the
payment of dividends payable on the Company's Series I Cumulative Convertible
Preferred Stock, Series K Cumulative Convertible Preferred Stock and Series L
Cumulative Convertible Preferred Stock for the following year at the then
current market price (as determined in the respective Certificates of
Designation for such preferred stock) so as to ensure the Company's ability to
pay dividends on the Series N Preferred Stock (subject to the limitations
contained in Section 170 of the Delaware General Corporate Law ("DGCL")). The
Company shall not reduce the number of shares of Common Stock reserved for
issuance upon conversion of the Preferred Shares and for the payment of
dividends thereon and the full exercise of the Warrants without the consent of
holders of Series N Preferred Stock and Warrants entitling them to purchase a
majority of the shares of Common Stock issuable upon conversion and exercise
thereof.
-7-
<PAGE>
3.6 Organizational Documents and Corporate Records. The Company has
heretofore made available to Subscriber true and complete copies of the Restated
Certificate of Incorporation and Bylaws of the Company as in effect on the date
hereof. The minute books of the Company, which have been made available to
Subscriber for inspection, contain true and complete records of all meetings
(other than the minutes for the meetings at which the transactions contemplated
hereby were considered for which minutes have not been finalized) and consents
in lieu of meeting of the Board of Directors and the stockholders of the Company
since January 1, 1992.
3.7 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
governmental authority, including without limitation the Federal Communications
Page 28 of 107 Pages
Commission, on the part of the Company or any of its Subsidiaries is required in
connection with the consummation of the transactions contemplated by this
Agreement, the Certificate of Designation and the Warrant, except for (i) the
applicable pre-merger notification requirements, if any, of the HSR Act, and
(ii) where the failure to comply with any such requirement would not have a
Material Adverse Effect.
3.8 Litigation. There is no action, suit, claim, proceeding or
investigation (collectively, a "Claim") pending or, to the Company's knowledge,
threatened against the Company or its Subsidiaries or any of their respective
properties which (i) questions the validity of this Agreement, or the right of
the Company to enter into this Agreement or to consummate the transactions
contemplated hereby, (ii) relates to the Company's capital structure or (iii)
individually or in the aggregate would have a Material Adverse Effect. The
Company is not a party or subject to the provisions of any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect. There are no Claims pending or, to
the knowledge of the Company, threatened that would give rise to any right of
indemnification on the part of any director or officer of the Company or its
Subsidiaries, or the heirs, executors or administrators of such director or
officer, against the Company or its Subsidiaries.
3.9 Compliance with Laws. Neither the Company nor any of its Subsidiaries
is or has been in violation of any applicable order, judgment, injunction,
award, decree or writ (collectively, "Orders"), or any applicable law, statute,
code, ordinance, regulation or other requirement (collectively "Laws"), of any
government or political subdivision thereof, or any agency or instrumentality of
any such government or political subdivision, or any court or arbitrator
(collectively, "Governmental Bodies") including, without limitation, laws and
regulations relating to the communications industry and environmental laws,
which violations either individually or in the aggregate would have a Material
Adverse Effect. The Company has not received any written notice that any such
violation has been alleged.
3.10 Conflicting instruments. The execution and delivery of this Agreement
and the Warrant does not, and the consummation of the transactions contemplated
hereby in compliance with the terms hereof (including the full performance and
compliance by the Company of all the terms of the Series N Preferred Stock) will
not as of the date hereof and the Closing Date: (i)
-8-
<PAGE>
conflict with or result in any violation of the laws of its jurisdiction of
incorporation or other applicable statutory requirements, or any provision of
its articles of association or other applicable organizational documents, (ii)
conflict with, result in a violation or breach of, or constitute a default (or
give rise to any right of termination, revocation, cancellation or acceleration)
Page 29 of 107 Pages
under, any note, bond, mortgage, indenture, deed of trust, license, lease,
contract, commitment, agreement or arrangement to which it is a party or by
which it is bound, or by or to which any of its properties or assets may be
bound or subject, (iii) result in the creation or imposition of a lien on any
properties or assets owned or leased and operated by the Company or any of its
Subsidiaries, (iv) conflict with or result in a violation of any judgment,
order, decree, writ, injunction, statute, law, ordinance, rule or regulation
applicable to it or any of its property or assets, or (v) violate or result in
the revocation or suspension of any Permit (as defined in Section 3.14 herein)
held by the Company or any of its Subsidiaries.
3.11 Registration Rights. Except as provided in Article 4 of this
Agreement or as described in the Schedule of Exceptions, the Company has not
granted or agreed to grant any registration rights under any applicable
securities laws to any individual, corporation, limited liability company,
partnership, association, trust or other entity or organization (each, a
"Person").
3.12 Intangible Property. The Schedule of Exceptions sets forth a list of
all patents, trademarks, copyrights, service marks and trade names owned by the
Company or its Subsidiaries, and all permits, grants and licenses or other
rights running to or from the Company or its Subsidiaries relating to any of the
foregoing. The Company and its Subsidiaries have the right to use (to the
Company's knowledge, free and clear of any claims or rights of others) all trade
secrets, know-how, processes, technology, blue prints and designs utilized in or
incident to their businesses as presently conducted ("Trade Secrets") together
with the intangible property listed on Exhibit 3.12, the "Intangible Property").
The Company and its Subsidiaries have taken such action as was reasonably
necessary to ensure that they have not infringed any patent, copyright,
trademark, trade name or other intangible rights of any other Person. Neither
the Company nor its Subsidiaries has received any written communication alleging
that it has infringed any patent, copyright, trademark, trade name or other
intangible rights of any other Person, and no proceedings in connection
therewith have been instituted or are pending. All Trade Secrets are protected
against the use of such Trade Secrets by other Persons to an extent and in a
manner customary in the industries in which the Company and its Subsidiaries
operate. There is no present or, to the knowledge of the Company, threatened use
or encroachment of any Trade Secret. The Company knows of no material violation
or infringement by others of the rights of the Company or its Subsidiaries with
respect to any Intangible Property.
3.13 Tax Matters.
(a) The Company and its Subsidiaries have paid all taxes (including,
without limitation, to the extent that such taxes exist and are applicable,
income, profits, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll-related and property
taxes, import duties and other governmental charges and assessments), whether or
-9-
<PAGE>
Page 30 of 107 Pages
not measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto
(hereinafter "Taxes" or individually, a "Tax"), required to be paid by any of
them through the date hereof and shall timely pay all Taxes required (under the
law and procedures of the applicable taxing jurisdiction) to be paid by any of
them before the Closing (except to the extent such Taxes are reserved for on the
combined balance sheet of the Company and its Subsidiaries as of December 31,
1995 and with respect to Taxes accruing after the date of such balance sheet
that are similar in nature and amount to those shown in such balance sheet).
Neither the Company nor any Subsidiary has any liability for Taxes subsequent to
the date of its most recent applicable tax return other than as arise in the
ordinary course of business and consistent with past practice.
(b) The Company and its Subsidiaries have timely filed all reports,
declarations, statements or other reports with respect to Taxes ("Tax Returns")
required to be filed through the date hereof taking into account any extensions
permitted by law or practice.
(c) With respect to all Tax Returns of the Company and its
Subsidiaries, no extension of time is in force with respect to any date on which
Tax Return was or is to be filed, and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax.
(d) There are no ongoing, pending or, to the Company's knowledge,
threatened Tax audits, investigations or reviews of the Company or its
Subsidiaries.
3.14 Permits. The Company and its Subsidiaries have all licenses, permits,
orders or approvals of, and have made all required registrations with, all state
and federal government bodies that are material to the conduct of the business
of the Company or its Subsidiaries (collectively, "Permits"), including, without
limitation, all Permits relating to compliance with any environment laws, except
where the failure to have such Permits would not, individually or in the
aggregate, have a Material Adverse Effect. All such Permits are in full force
and effect and neither the Company nor its Subsidiaries have violated any of the
terms thereof except where the failure to keep such permits in full force and
effect or where such violations would not, individually or in the aggregate,
have a Material Adverse Effect.
3.15 Environmental Matters. (a) The operations of the Company and its
Subsidiaries comply and have complied with all applicable environmental laws
except where the failure to comply would not have a Material Adverse Effect; (b)
the Company and its Subsidiaries have obtained all material environmental,
health and safety permits, licenses and approvals necessary for its operations,
all such permits, licenses and approvals are in effect, no appeal is pending
therefrom and no action to revoke the same is pending, and the Company and each
Subsidiary are in compliance with all material terms and conditions thereof; and
(c) there has not been a release into the environment of a hazardous substance
in, on or under any real property, asset or facility currently or previously
owned, leased or operated by the Company or its Subsidiaries.
Page 31 of 107 Pages
-10-
<PAGE>
3.16 SEC Filings; Financial Statements. The Company has filed all forms,
reports and documents required to be filed by it with the Securities and
Exchange Commission (the "SEC") since December 31, 1994, and has heretofore made
available to each Subscriber, in the form filed with the SEC (excluding any
exhibits thereto) each of the Materials. The Materials were prepared in
accordance with the requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and the Exchange Act, as the case may be, and the rules and
regulations thereunder and did not at the time they were filed and as of the
date hereof contain any untrue statement of a material fact or omit to state a
material fact required to be stated herein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each of the consolidated financial statements (including,
in each case, any notes thereto), contained in the Materials filed by the
Company was prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto) and each fairly presented the financial
position, results of operations and cash flows and change in stockholders'
equity of the Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments which
were not and are not expected, individually or in the aggregate, to be material
in amount). Except and to the extent set forth in the Materials filed with the
SEC prior to the date of this Agreement, the Company and its Subsidiaries do not
have any liability or obligation of any nature (whether accrued, absolute,
contingent or otherwise) other than liabilities and obligations which would not,
individually or in the aggregate, have a Material Adverse Effect.
3.17 Changes. Other than as set forth in the Schedule of Exceptions, since
March 31, 1996, there has not been, with respect to the Company or any of its
Subsidiaries:
(a) any agreement (whether in principle or definitive) to issue any
equity or debt security;
(b) any damage, destruction or loss, whether or not covered by
insurance, which could reasonably be expected to have a Material Adverse Effect;
(c) any waiver by the Company or any of its Subsidiaries of a
valuable right or of a debt owed to it which could reasonably be expected to
have a Material Adverse Effect;
(d) any satisfaction or discharge of any lien, claim or encumbrance
or payment of any obligation by the Company or any of its Subsidiaries, except
in the ordinary course of business and which could not reasonably be expected to
Page 32 of 107 Pages
have a Material Adverse Effect;
(e) any change or amendment to a material contract or arrangement by
or to which the Company or any of its Subsidiaries or any of their respective
assets or properties are bound or subject which could reasonably be expected to
have a Material Adverse Effect;
(f) any change by the Company in its accounting methods, principles
or priorities;
-11-
<PAGE>
(g) any material agreement entered into by the Company or any of its
Subsidiaries;
(h) any sale, abandonment or other disposition of any of its
properties or assets except for inventory and equipment sold in the ordinary
course of business and the disposition of obsolete properties and assets;
(i) to the knowledge of the Company, any other event or condition of
any character which could reasonably be expected to have a Material Adverse
Effect; or
(j) any declaration of dividends on the Common Stock.
Notwithstanding the above, the Company shall provide written notice
to Subscriber of any material change to the Company's business, operations or
financial condition which occurs prior to the Closing Date.
3.18 [Intentionally Omitted]
3.19 Conflicts. The entering into the Subscription Agreement and the
Warrant and the filing with the Secretary of State of the State of Delaware of
the Certificate of Designation will not conflict with (i) the Company's Restated
Certificate of Incorporation or Bylaws, or (ii) any material indenture, note,
bond, debt, or other material agreement to which the Company is bound or its
property is subject.
3.20 Use of Proceeds. The proceeds from the Offering will be used by the
Company for general corporate purposes (including, without limitation, working
capital and dividend and interest obligations), capital expenditures in
connection with its wireless communications systems in the United States and
international markets, and pursuit of United States and international wireless
communications opportunities.
ARTICLE 4. Registration Rights
Page 33 of 107 Pages
4.1 Definitions. For purposes of this Article 4:
(a) The term "register", "registered", and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Securities Act, and the declaration or
ordering of effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means the Common Shares and
any shares of Common Stock or other securities subsequently issued with respect
to such Common Shares (by stock split, stock dividend or otherwise); and
-12-
<PAGE>
(c) The term "Holder" means any Person owning or having the right to
acquire Registrable Securities.
4.2 Registration.
(a) The Company shall use its good faith best efforts to cause a
registration statement ("Registration Statement") under the Securities Act with
respect to all of the Registrable Securities to become effective on or before
September 30, 1996 (the "Registration Date").
(i) If the Company fails to cause the Registration Statement
to become effective on or before the Registration Date, then, upon each Dividend
Payment Date (as defined in the Certificate of Designation) following the
Registration Date, the Company shall make a cash payment to each holder of
Registrable Securities in an amount equal to the Stated Value of the Preferred
Shares held by such holder multiplied by the Registration Default Rate (as
defined below) for the period beginning on the day following the later of the
Registration Date and the immediately preceding Dividend Payment Date (if any)
and ending on the Dividend Payment Date upon which such payment is being made.
No payments shall be made hereunder to a holder of Registrable Securities with
respect to any period of time following either the date the Registration
Statement becomes effective or the expiration of the Effectiveness Period (as
defined herein).
(ii) If the Registration Statement is declared effective and
thereafter ceases to be effective or thereafter the prospectus which is a part
thereof cannot be used (other than because of an action or failure to act on the
part of a Holder) for a period of more than 60 consecutive days (the sixtieth
day in any such period is referred to herein as the "Suspension Date"), then,
upon each Dividend Payment Date following the Suspension Date, the Company shall
make a cash payment to each holder of Registrable Securities in an amount equal
to the Stated Value of the Preferred Shares held by such holder multiplied by
the Registration Default Rate for the period beginning on the day following the
later of the Suspension Date and the immediately preceding Dividend Payment Date
Page 34 of 107 Pages
and ending on the Dividend Payment Date upon which such payment is being made.
No payments shall be made hereunder to a holder of Registrable Securities with
respect to any period of time following either the date the Registration
Statement may then be used to sell Registrable Securities or the expiration of
the Effectiveness Period.
(iii) For purposes of this Section 4, "Registration Default
Rate" shall mean 0.50% per annum for the first 90 day period immediately
following the Registration Date (in the case of a failure under clause (i) of
this Section 4.2(a)) or the first 60 day period immediately following the
Suspension Date (in the case of a suspension under clause (ii) of this Section
4.2(a)) and shall increase by an additional 0.25% per annum at the beginning of
each subsequent 90 day period in the case of a failure under clause (i) or at
the beginning of each subsequent 60 day period in the case of a suspension under
clause (ii); provided, however, that in no event shall the Registration Default
Rate exceed 1.0%.
-13-
<PAGE>
(iv) All payments required to be made to holders of
Registrable Securities under this Section 4.2(a) shall be in addition to any
dividends to which such holder is otherwise entitled under the Certificate of
Designation.
(b) Neither the Company nor any other Person other than the Holders
shall be entitled to include shares in a registration made under Section 4.2(a)
without the prior written consent of the Holders of a majority of the
Registrable Securities included in such registration. Notwithstanding the
foregoing, the Company may include in such registration securities held by third
parties which are subject to registration rights granted by the Company on or
prior to May 28, 1996.
(c) If (but without any obligation to do so) the Company proposes at
any time to register any shares of its capital stock or other securities under
the Securities Act for itself or for other stockholders of the Company (other
than a registration relating solely to the sale of securities to participants in
a stock plan of the Company, or a registration on any form which does not
include substantially the same information, other than information related to
the selling shareholders or their plan of distribution, as would be required to
be included in a registration statement covering the sale of the Registrable
Securities), which registration shall involve an underwritten offering, the
Company shall, at such time, promptly give each Holder written notice of such
registration. Upon the written request of each Holder given within twenty (20)
days after mailing of such notice by the Company, the Company shall, subject to
the provisions of Section 4.2(d), cause to be registered under the Securities
Act, and to be included in such underwritten offering, all of the Registrable
Securities then outstanding which each such Holder has requested to be so
Page 35 of 107 Pages
registered. The right of a Holder to have Registrable Securities then
outstanding included in registrations contemplated by this Section 4.2(c) (i)
shall continue for a period of three years from the date of the Closing and (ii)
shall not be transferable (other than to a single transferee of all of such
Holder's Registrable Securities, and to subsequent such single transferees).
(d) In connection with any offering involving an underwriting of
shares as contemplated by Section 4.2(c), the Company shall not be required
under this Section 4.2(d) to include any of the Holders' Registrable Securities
then outstanding in such underwriting unless they accept the customary and
reasonable terms of the underwriting as agreed upon between the Company and the
underwriters selected by it, and then only in such quantity as will not, in the
opinion of the underwriters, jeopardize the success of the offering. If the
total amount of Registrable Securities then outstanding requested to be included
in such offering exceeds the amount of securities that the underwriters believe
in their sole discretion to jeopardize the success of the offering, then Holders
may include in the offering only that number of such Registrable Securities then
outstanding which the underwriters believe will not jeopardize the success of
the offering (the securities so included to be apportioned first among the other
stockholders of the Company with rights as of May 21, 1996 to include Common
Stock in such underwriting ("Other Holders") and then pro rata among the Holders
according to the total amount of Registrable Securities entitled to be included
therein owned by each Holder or in such other proportions as shall mutually be
agreed to by the Holders); provided, however, that no Registrable Securities
-14-
<PAGE>
shall be excluded from any such offering if any securities other than those sold
for the account of the Company, Holders and Other Holders are to be included in
such offering. Notwithstanding the foregoing provisions of Section 4.2(c) and
Section 4.2(d), if the registration contemplated by Section 4.2(c) is initiated
in response to the exercise of demand registration rights of Vanguard Cellular
Systems, Inc. ("Vanguard") and/or Toronto Dominion Investments, Inc. ("TDI") or
their successors, the Holders shall not have the right to require the exclusion
from such registration of any securities owned by Vanguard and/or TDI (or their
successors). In such circumstances, any exclusion shall be accomplished among
the Holders and Other Holders (other than Vanguard, TDI and their successors) in
accordance with the order of priority and otherwise as set forth above.
4.3 Obligations of the Company. Whenever required under this Article 4 to
effect the registration of any Registrable Securities, the Company shall, within
the time limits set forth in this Article 4, or if no specific time limit is
specified, as expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to such Registrable Securities and use its best efforts to cause such
registration statement to become effective, and thereafter keep such
registration statement effective at all times until the third anniversary of the
Page 36 of 107 Pages
Closing Date (the "Effectiveness Period"), or until such earlier time as all
securities registered thereby have been sold; provided, however, that the
Company shall keep such registration statement thereafter effective with respect
to any Registerable Securities which were or are paid as dividends on the
Preferred Shares (the "Dividend Shares") until the earlier of (i) such date that
all such Dividend Shares have been sold, (ii) such date that is six months
following the last dividend payment on the Preferred Shares and (iii) such date
that all such Dividend Shares are, or upon issuance will be, eligible for resale
under Rule 144 under the Securities Act and provided, further, that the Company
shall use all commercially reasonable efforts to keep such registration
statement thereafter effective with respect to any Registrable Securities issued
or issuable upon exercise of the Warrants until the earlier of (x) such date
that all such Registrable Securities have been sold pursuant to such
registration statement and (y) the fifth anniversary of the Closing Date.
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
registration statement, including but not limited to, any amendments or
supplements which must be prepared as a result of the engagement of an
underwriter by a Holder in the distribution of its Registrable Securities
pursuant to Sections 4.2(a) of this Agreement.
(c) Furnish to the Holders such numbers of copies of a prospectus,
including a preliminary prospectus, in conformity with the requirements of the
Securities Act, and such other documents as they may reasonably request in order
to facilitate the disposition of Registrable Securities owned by them.
-15-
<PAGE>
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders,
provided that the Company shall not be required to qualify to do business or to
file a general consent to service of process in any such states or
jurisdictions.
(e) In the event of any underwritten public offering, enter into and
perform its obligations under an underwriting agreement, in usual and customary
form, with the managing underwriter of such offering. Each Holder participating
in such underwriting shall also enter into and perform its obligations under
such an agreement.
(f) Notify each Holder of Registrable Securities covered by such
registration statement at any time when a prospectus relating thereto is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
Page 37 of 107 Pages
then in effect, includes an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances then
existing.
(g) In the case of an underwritten public offering, furnish, on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Article 4, (i) an opinion,
dated such date, of the counsel representing the Company for the purposes of
such registration, in such form and substance as is customarily given to
underwriters in an underwritten public offering, addressed to the underwriters
and the Holders, and (ii) a letter, dated such date, from the independent
certified public accountants of the Company, in such form and substance as is
customarily given by independent certified public accountants to underwriters in
an underwritten public offering, addressed to the underwriters and the Holders.
4.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Article 4 with
respect to the Registrable Securities of any selling Holder that such Holder
shall have furnished to the Company such information regarding itself, the
Registrable Securities held by it, and the intended method of disposition of
such securities as shall be required to effect the registration of such Holder's
Registrable Securities.
4.5 Expenses of Registration. All expenses (other than underwriting
discounts and commissions) incurred in connection with registrations, filings or
qualifications pursuant to this Article 4, including without limitation all
registration, filing and qualification fees, printers, and accounting fees, fees
and disbursements of counsel for the Company, and the reasonable fees and
disbursements of one counsel for the selling Holders shall be borne by the
Company; provided, however, in the event the Company includes in any
registration statement shares for sale for its own account, it shall pay the pro
rata portion of any underwriting discounts and commission attributable to such
securities for its own account.
-16-
<PAGE>
4.6 Indemnification and Contribution. In connection with a registration
statement under this Article 4:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, any underwriter (as defined in the Securities Act)
and each Person if any, who controls such Holder or underwriter within the
meaning of the Securities Act or the Exchange Act against any losses, claims,
damages or liabilities (joint or several) to which they or any of them may
become subject under the Securities Act, the Exchange Act or any other federal
or state law, insofar as such losses, claims, damages or liabilities (or actions
Page 38 of 107 Pages
in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus (but only if such
is not corrected in the final prospectus) contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary to make the statements
therein not misleading (but only if such is not corrected in the final
prospectus), or (iii) any violation or alleged violation by the Company in
connection with the registration of Registrable Securities under the Securities
Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange Act or any state securities
law; and the Company will pay to each such Holder, underwriter or controlling
Person, as incurred, any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 4.6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld),
nor shall the Company be liable to any such Holder, underwriter or controlling
person in any such case for any such loss, claim, damage, liability or action to
the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling Person.
(b) To the extent permitted by law, each selling Holder will
indemnify and hold harmless the Company, each of its directors, each of its
officers who has signed the registration statement, each Person, if any, who
controls the Company within the meaning of the Securities Act, any underwriter,
any other Holder selling securities in such registration statement and any
controlling Person of any such underwriter or other Holder, against any losses,
claims, damages or liabilities (joint or several) to which any of the foregoing
Persons may become subject, under the Securities Act, the Exchange Act or other
federal or state law, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will pay, as incurred, any legal or other expenses reasonably incurred by
any Person intended to be indemnified pursuant to this Section 4.6(b), in
connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement contained
in this Section 4.6(b) shall not apply
-17-
<PAGE>
to amounts paid in settlement of any such loss, claim, damage, liability or
Page 39 of 107 Pages
action if such settlement is effected without the consent of the Holder, which
consent shall not be unreasonably withheld; provided that in no event shall any
indemnity under this Section 4.6(b) exceed the net proceeds from the offering
received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 4.6 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 4.6, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party who is
a named party in such action shall have the right to retain its own counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would, in the reasonable opinion of counsel to the
indemnifying party, be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
4.6(a) and 4.6(b), but the omission so to deliver written notice to the
indemnifying party will not relieve it of any liability (including contribution
pursuant to Section 4.6(d) hereof) that it may have to any indemnified party
other than this Section 4.6.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in Section 4.6(a) is
applicable but for any reason is held to be unavailable from the Company with
respect to all Holders or any Holder, the Company and the Holder or Holders, as
the case may be, shall contribute to the aggregate losses, claims, damages and
liabilities (including any investigation, legal and other expenses incurred in
connection with, and any amount paid in settlement of, any action, suit or
proceeding or any claims asserted) to which the Company and one or more of the
Holders may be subject in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand, and the Holder or Holders on the
other, in connection with statements or omissions which resulted in such losses,
claims, damages or liabilities. Notwithstanding the foregoing, no Holder shall
be required to contribute any amount in excess of the net proceeds received by
such Holder from the Registrable Securities sold by such Holder pursuant to the
registration statement. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. Each Person, if any, who controls a Holder within the meaning
of the Securities Act shall have the same rights to contribution as such Holder.
(e) The obligations of the Company and Holders under this Section
4.6 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Article 4 or otherwise.
Page 40 of 107 Pages
-18-
<PAGE>
4.7 Amendment of Registration Rights. Any provision of this Article 4 may
be amended or the observance thereof may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of the Company and the Holders of a majority of the Registrable
Securities then outstanding. An amendment or waiver effected in accordance with
this Section shall be binding upon each Holder of Registrable Securities then
outstanding, each future Holder of all such securities, and the Company.
ARTICLE 5. Conditions of Subscriber's Obligations at Closing.
The obligations of the Subscriber under Section 1.1 of this Subscription
Agreement are subject to the fulfillment at or before the Closing of each of the
following conditions, or their waiver by Subscribers subscribing for 66 2/3% of
the Units offered in the Offering:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Article 3 shall be true at and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of the Closing Date.
(b) Performance. The Company shall have performed and complied in
all material respects with all agreements, obligations and conditions contained
in this Subscription Agreement that are required to be performed or complied
with at or before the Closing Date.
(c) Since the date of this Subscription Agreement, there shall have
been no change, occurrence of circumstances affecting the business, results of
operations or financial condition, stockholders' equity or prospects of the
Company having or reasonably likely to have a Material Adverse Effect.
(d) [Intentionally Omitted]
(e) Compliance Certificate. The President of the Company shall have
delivered to the Subscriber at the Closing a certificate certifying that the
conditions specified in Sections 5(a), 5(b), 5(c) and 5(d) have been fulfilled.
(f) Restated Certificate of Incorporation. Prior to the Closing
Date, the Company's stockholders shall have approved the Amendment and the
Amendment shall have been filed with, and accepted by, the Secretary of State of
the State of Delaware in accordance with the DGCL, as evidenced by the certified
copy of the Restated Certificate of Incorporation of the Company to be delivered
at Closing pursuant to Section 5(h) hereof.
(g) Certificate of Designation. Prior to the Closing Date, the
Certificate of Designation shall have been filed with, and accepted by, the
Page 41 of 107 Pages
Secretary of State of the State of Delaware in accordance with the DGCL.
-19-
<PAGE>
(h) Delivery of Documents. The Subscriber shall have received: (i) a
certified copy of the Restated Certificate of Incorporation of the Company
certified by the Secretary of State of the State of Delaware; (ii) a copy of the
By-Laws of the Company certified by the Secretary of the Company and (iii)
incumbency certificates, board resolutions and such other evidence of corporate
authority for the transactions contemplated hereby as the Subscriber and its
counsel shall reasonably request.
(i) Approvals and Consents. The Company (and, if applicable the
Investors) shall have duly obtained, received or effected (and all applicable
waiting and termination periods, if any, including any extensions thereof, under
any applicable law, statute, regulation or rule, including, without limitation,
the applicable waiting period, if any, under the HSR Act, shall have expired or
terminated) all authorizations, consents, approvals, licenses, franchises,
permits and certificates by or of, and shall have made all filings and effected
all notifications, registrations and qualifications with, all federal, state,
local and foreign governmental and regulatory authorities to the extent required
to be obtained, received, effected or filed by the Company for the issuance,
sale and delivery of the Units being issued and sold at the Closing and the
consummation of the transactions contemplated hereby.
(j) Delivery of Share Certificates and Warrants. The Subscriber
shall have received duly executed stock certificates of the Company evidencing
the ownership of the Preferred Shares being purchased by Subscriber hereunder
and warrant certificates duly executed by the Company with respect to the
Warrants being purchased by Subscriber hereunder.
(k) Opinions of Counsel to the Company. The Subscriber shall have
received favorable opinions from Robert Vecsler, General Counsel for the Company
and from Klehr, Harrison, Harvey, Branzburg & Ellers, corporate counsel to the
Company ("Klehr Harrison"), dated as of the Closing Date as to the matters to
which Klehr, Harrison and the General Counsel for the Company opined in the
Company's sale of its 12% Senior Subordinated Convertible Notes due 2001 (with
appropriate adjustments for the nature of the securities being sold hereunder).
In addition, the opinion from Robert Vecsler shall include those matters set
forth in (i) the first sentence of paragraph 6 and (ii) paragraph 8 of the
opinion delivered to Vanguard Cellular Systems, Inc. ("Vanguard") in connection
with the closing of those transactions contemplated by that certain Stock
Purchase Agreement dated December 29, 1993 by and between the Company and
Vanguard.
ARTICLE 6. Conditions of the Company's Obligations at Closing.
Page 42 of 107 Pages
The obligations of the Company to the Subscriber under Section 1.1 of this
Agreement are subject to the fulfillment or waiver at or before the Closing of
each of the following conditions:
(a) Representations and Warranties. The representations and
warranties of Subscriber contained in Article 2 shall be true at and as of the
Closing Date with the same effect as though such representations and warranties
had been made at and as of the Closing Date.
-20-
<PAGE>
(b) Payment of Purchase Price. The Subscriber shall have paid in
check or by wire transfer to the accounts specified by the Company the purchase
price specified in Section 1.1.
(c) HSR Act. In the event Subscriber is required to file a
notification under the HSR Act, the applicable waiting period, if any, under the
HSR Act shall have expired or have been earlier terminated.
(d) Restated Certificate of Incorporation. Prior to the Closing
Date, the Company's stockholders shall have approved the Amendment. In this
regard, the Company agrees to use its best efforts to obtain such stockholder
approval.
(e) Minimum Subscription. A minimum of 45,000 Units shall be sold at
Closing to the Renaissance Fund LDC, the Charles Bronfman Family Trust and their
Permitted Assignees (as defined in the subscription agreement executed by such
subscribers).
ARTICLE 7. Termination.
7.1 Termination by Mutual Written Consent. This Subscription Agreement may
be terminated and the transactions contemplated hereby may be abandoned, for any
reason, at any time prior to the Closing Date, by the mutual written consent of
the Company and Subscriber.
7.2 Termination by the Company or the Subscriber. This Subscription
Agreement may be terminated and the transactions contemplated hereby abandoned
by action of the Company or Subscriber if and to the extent that (a) the Closing
shall not have occurred at or prior to the later of (i) 5:00 p.m. on the Closing
Date and (ii) the sixtieth day following any required filing of any premerger
notification under the HSR Act by a Subscriber as contemplated by Section 2.7
hereof or after substantial compliance with any request for additional
information which may have been issued, whichever is later (or such time as
agreed to by the parties pursuant to Section 1.4); provided, however, that the
right to terminate this Subscription Agreement under this Section 7.2 shall not
be available to any party whose failure to fulfill any obligation under this
Page 43 of 107 Pages
Subscription Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before the Closing Date; or (b) any court or governmental
authority of competent jurisdiction shall have issued an order, decree, writ or
ruling or taken any other action, or there shall be in effect any statute, rule
or regulation, temporarily, preliminarily or permanently restraining, enjoining
or otherwise prohibiting the purchase of the Units hereunder, or the
consummation of the transactions contemplated by this Subscription Agreement.
7.3 Termination by Subscriber. This Subscription Agreement may be
terminated and the transactions contemplated hereby may be abandoned by action
of Subscriber, if (a) the Company shall have failed to comply in any material
respect with any of the covenants or agreements contained in this Subscription
Agreement to be complied with or performed by the Company at or prior to such
date of termination, and the Company shall not, within a reasonable period of
time after notice of such failure, have cured or commenced prompt and diligent
-21-
<PAGE>
measures which would promptly cure such failure, (b) there shall have been a
misrepresentation or breach by the Company with respect to any representation or
warranty made by it in this Subscription Agreement and such misrepresentation or
breach cannot be cured prior to the Closing Date, or (c) there shall have
occurred and be continuing any condition, event or development having, or
reasonably likely to have, a Material Adverse Effect.
ARTICLE 8. Miscellaneous
8.1 Survival of Warranties; Indemnity. (a) The representations and
warranties of the Company set forth in Article 3 hereof shall survive until the
later of the second anniversary of the Closing Date or the date first upon which
the Investors collectively no longer retain beneficial ownership of at least 50%
of the Preferred Shares (or shares of Common Stock into which the Preferred
Shares are convertible) except that (x) the representations and warranties set
forth in Section 3.13 and claims based on allegations of common law fraud with
respect to Sections 3.16 and 3.18 shall survive until the expiration of the
applicable statute of limitations (or any extension thereof), and (y) the
representations and warranties set forth in Sections 3.1, 3.3, 3.4, 3.5, the
first sentence of Section 3.6 and clause (i) of Section 3.10 shall survive
indefinitely. The survival of the representations and warranties set forth in
Article 3 shall in no way be affected by any investigation of the subject matter
thereof made by or on behalf of the Subscriber or the Company.
(b) The Company hereby indemnifies Subscriber against and agrees to
hold Subscriber harmless from any and all damage, loss, liability and expense
(including, without limitation, reasonable expenses of investigation and
attorneys' fees and expenses in connection with any action, suit or proceeding
brought against Subscriber) ("Losses") incurred or suffered by Subscriber
arising out of the inaccuracy of any of the representations or warranties made
Page 44 of 107 Pages
by the Company in Article 3 hereof to the extent such representation or warranty
has survived the closing as provided in Section 8.1(a) above and to the extent
that such Losses to all the Investors are in the aggregate greater than $20,000
(including out-of-pocket expenses) and less than the aggregate Stated Value of
the Preferred Shares sold in the Offering plus out-of-pocket expenses. A
Subscriber shall give prompt written notice to the Company of the assertion of
any claim for which indemnity may be sought hereunder, specifying with
reasonable particularity the basis therefor, together with any supporting
information reasonably requested by the Company, and the amount of the Loss. If
any amount is due by the Company to the Subscriber pursuant to this Section
8.1(b), the Company will make such payment not later than 60 days after notice
of the amount due.
(c) Subscriber shall give prompt notice to the Company of the
commencement of any suit, action or proceeding against the Subscriber in respect
of which indemnity may be sought hereunder. The Company may, at its own expense,
participate in and, upon notice to the Subscriber, assume the defense of any
such suit, action or proceeding; provided, that (i) the Company's counsel is
reasonably satisfactory to Investors holding a majority of the Preferred Shares
entitled to indemnification with respect to the subject action, suit or
proceeding, and (ii)
-22-
<PAGE>
the Company shall thereafter consult with Subscriber upon Subscriber's
reasonable request for such consultation from time to time with respect to such
suit, action or proceeding. If the Company assumes such defense, Subscriber
shall have the right (but not the duty) to participate in the defense thereof
and to employ counsel, at its own expense, separate from the counsel employed by
the Company. The Company shall be liable for the fees and expenses of one
counsel employed by all Investors entitled to indemnification hereunder with
respect to the subject action, suit or proceeding for any period during which
the Company has not assumed the defense thereof. Whether or not the Company
chooses to defend or prosecute any claim, all of the parties hereto shall
cooperate in the defense or prosecution thereof. The Company shall not be liable
under this Section 8.1 for any settlement effected without its consent or
resulting from a proceeding against Subscriber in which the Company was not
permitted an opportunity to participate, of any claim, litigation or proceeding
in respect of which indemnity may be sought hereunder unless (x) such settlement
includes an unconditional release of the Company from all liability on claims
that are the subject matter of such claim, litigation or proceeding, and (y)
such settlement shall not require that the Company incur any obligation
(monetary or otherwise) or forego any rights. The Company shall not effect any
settlement relating to a proceeding against Subscriber without the consent of
Subscriber (which consent shall not be unreasonably withheld), unless such
settlement includes (as to Subscriber) money damages only and an unconditional
release of Subscriber from all Losses relating to such proceeding.
Page 45 of 107 Pages
8.2 Definition of Terms. All pronouns and any variations thereof used
herein shall be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the Person or Persons may require.
8.3 Governing Law. This Subscription Agreement shall be governed by the
laws of the State of Delaware applicable to contracts made and wholly performed
in that jurisdiction.
8.4 Notices. All notices or other communications hereunder shall be in
writing and shall be delivered by hand or mailed by registered or certified
mail, return receipt requested, to the Subscriber at the address provided below
and the Company at its principal executive offices located at 20 Craig Road,
Montvale, New Jersey 07645, Attention: Robert Vecsler, Esquire, General Counsel
and Secretary. The Company and the Subscriber may change their addresses for
notices by written notice to each other, as required.
8.5 Expenses. Each party hereto shall be responsible for the payment of
its own expenses incurred in connection with the negotiation, preparation,
execution, delivery and performance of this Subscription Agreement and the other
agreements, including without limitation the Warrants, to be executed in
connection herewith.
8.6 THE UNITS, PREFERRED SHARES AND WARRANTS OFFERED HEREBY HAVE NOT BEEN
APPROVED OR DISAPPROVED BY, OR REGISTERED WITH, THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE, NOR HAS THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON
-23-
Page 46 of 107 Pages
<PAGE>
THE ACCURACY OR ADEQUACY OF THIS SUBSCRIPTION AGREEMENT. ANY REPRESENTATION TO
THE CONTRARY IS UNLAWFUL.
-24-
Page 47 of 107 Pages
<PAGE>
Number of Units Subscribed for: 3750
Total Cost of Units Subscribed for: $3,750,000
S-C RIG INVESTMENTS - III, L.P.
By:________________________________ DATE: ___________, 1996
Name:
Title:
GEOTEK COMMUNICATIONS, INC.
By:_________________________________ DATE: ___________, 1996
Name:
Title:
Page 48 of 107 Pages
<PAGE>
Number of Units Subscribed for: 834
Total Cost of Units Subscribed for: $834,000
WINSTON PARTNERS II LDC
By:________________________________ DATE: ___________, 1996
Name:
Title:
GEOTEK COMMUNICATIONS, INC.
By:_________________________________ DATE: ___________, 1996
Name:
Title:
Page 49 of 107 Pages
<PAGE>
Number of Units Subscribed for: 416
Total Cost of Units Subscribed for: $416,000
WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC, its Manager
By:________________________________ DATE: ___________, 1996
Name:
Title:
GEOTEK COMMUNICATIONS, INC.
By:_________________________________ DATE: ___________, 1996
Name:
Title:
Page 50 of 107 Pages
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE __, 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
_________________________________, a ______________________, or permitted
registered assigns (the "Warrantholder" or "Warrantholders"), the right to
subscribe for and purchase from the Company, at a purchase price of $11.00 per
share (the "Exercise Price"), at any time and from time to time after the date
hereof (the "Initial Exercise Date"), and to and including 5:00 P.M. New York
City time on June __, 2001 (the "Expiration Date"), _________________________
__________________ (_________) shares, as such number of shares may be adjusted
from time to time (the "Warrant Shares"), of the Company's Common Stock, par
value $.01 per share (the "Common Stock"), subject to the provisions and upon
the terms and conditions herein set forth. The Exercise Price and the number of
Warrant Shares are subject to adjustment from time to time as provided in
Section 6. This warrant constitutes part of a duly authorized issue of warrants
expiring June __, 2001, which warrants are hereinafter referred to collectively
as the "Warrants".
<PAGE>
SECTION 1. Exercise of Warrant; Limitation on Exercise; Payment of Taxes.
1.1 Exercise of Warrant.
Page 51 of 107 Pages
(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 issuance of the Warrant Shares 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 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
-2-
<PAGE>
Page 52 of 107 Pages
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.
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 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.
Page 53 of 107 Pages
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
-3-
<PAGE>
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 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;
Page 54 of 107 Pages
(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.
-4-
<PAGE>
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.
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
Page 55 of 107 Pages
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
-5-
<PAGE>
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;
(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
Page 56 of 107 Pages
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.
-6-
<PAGE>
(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 (as defined below) 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
---------
O + N
Page 57 of 107 Pages
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:
-7-
<PAGE>
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.
F = the fair market value on the record date of the assets,
Page 58 of 107 Pages
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.
-8-
<PAGE>
P = the aggregate consideration received for the issuance of
such additional shares.
Page 59 of 107 Pages
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, 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:
-9-
<PAGE>
Page 60 of 107 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,
(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
-10-
<PAGE>
Page 61 of 107 Pages
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 or exchangeable for Common Stock) tendered
Page 62 of 107 Pages
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
-11-
<PAGE>
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 (reduced in each case to
reflect any dividend for the period during which the Common Stock is traded on
an ex-dividend basis). 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:
Page 63 of 107 Pages
(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;
(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
-12-
<PAGE>
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 (as defined
below) of the Company (determined by reference to the sum of the percentages of
Total Market Capitalization of the Company attributable to each such transaction
Page 64 of 107 Pages
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 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.
-13-
<PAGE>
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
Page 65 of 107 Pages
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 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.
-14-
<PAGE>
(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 (other than the Company and entities controlled by the Company)
that hold Warrants entitling them to purchase more than 50% of the Warrant
Shares held by all holders other than the Company and entities controlled by the
Company (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
Page 66 of 107 Pages
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'
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
-15-
<PAGE>
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)
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
Page 67 of 107 Pages
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.
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 Warrantholders
that hold Warrants entitling them to purchase at least 66 2/3% of the Warrant
Shares entitled to be purchased by all 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.
-16-
<PAGE>
7.6 Notices. All demands, requests, notices and other communications
Page 68 of 107 Pages
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 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
Page 69 of 107 Pages
-17-
<PAGE>
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.
-18-
<PAGE>
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:_______________________________________
Name:
Title:
Dated: June ___, 1996
Page 70 of 107 Pages
-19-
<PAGE>
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.
-20-
Page 71 of 107 Pages
<PAGE>
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.
-21-
Page 72 of 107 Pages
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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
Renaissance Fund LDC, or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), three hundred thousand (300,000) shares, as such number of shares may be
adjusted from time to time (the "Warrant Shares"), of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), subject to the provisions
and upon the terms and conditions herein set forth. The Exercise Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 6. This warrant constitutes part of a duly authorized issue of
warrants expiring June 20, 2001, which warrants are hereinafter referred to
collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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"),
Page 73 of 107 Pages
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, JUNE 20, 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 Todd
Investments Limited or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), two hundred ninety-five thousand five hundred sixty (295,560) shares, as
such number of shares may be adjusted from time to time (the "Warrant Shares"),
of the Company's Common Stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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.
Page 74 of 107 Pages
VOID AFTER 5:00 P.M., NEW YORK, NEW YORK TIME, JUNE 20, 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 Stockton
Partners L.P. or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), four thousand four hundred forty (4,440) shares, as such number of
shares may be adjusted from time to time (the "Warrant Shares"), of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 2001
***************************************
Page 75 of 107 Pages
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 Charles
Bronfman Family Trust or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), two hundred seventy thousand (270,000) shares, as such number of shares
may be adjusted from time to time (the "Warrant Shares"), of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), subject to the
provisions and upon the terms and conditions herein set forth. The Exercise
Price and the number of Warrant Shares are subject to adjustment from time to
time as provided in Section 6. This warrant constitutes part of a duly
authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 2001
***************************************
WARRANT
to
Page 76 of 107 Pages
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 The
Kolber Trust or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), ninety thousand (90,000) shares, as such number of shares may be
adjusted from time to time (the "Warrant Shares"), of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), subject to the provisions
and upon the terms and conditions herein set forth. The Exercise Price and the
number of Warrant Shares are subject to adjustment from time to time as provided
in Section 6. This warrant constitutes part of a duly authorized issue of
warrants expiring June 20, 2001, which warrants are hereinafter referred to
collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 2001
***************************************
WARRANT
to
PURCHASE COMMON STOCK
of
Page 77 of 107 Pages
GEOTEK COMMUNICATIONS, INC.
***************************************
This certifies that, for good and valuable consideration, Geotek
Communications, Inc., a Delaware corporation (the "Company"), grants to
Continental Casualty Company or permitted registered assigns (the
"Warrantholder" or "Warrantholders"), the right to subscribe for and purchase
from the Company, at a purchase price of $11.00 per share (the "Exercise
Price"), at any time and from time to time after the date hereof (the "Initial
Exercise Date"), and to and including 5:00 P.M. New York City time on June 20,
2001 (the "Expiration Date"), one hundred thirty thousand seven hundred seventy
(130,770) shares, as such number of shares may be adjusted from time to time
(the "Warrant Shares"), of the Company's Common Stock, par value $.01 per share
(the "Common Stock"), subject to the provisions and upon the terms and
conditions herein set forth. The Exercise Price and the number of Warrant Shares
are subject to adjustment from time to time as provided in Section 6. This
warrant constitutes part of a duly authorized issue of warrants expiring June
20, 2001, which warrants are hereinafter referred to collectively as the
"Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 2001
***************************************
WARRANT
to
PURCHASE COMMON STOCK
of
GEOTEK COMMUNICATIONS, INC.
Page 78 of 107 Pages
***************************************
This certifies that, for good and valuable consideration, Geotek
Communications, Inc., a Delaware corporation (the "Company"), grants Goldman,
Sachs & Co. to or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), one hundred thirty thousand seven hundred seventy (130,770) shares, as
such number of shares may be adjusted from time to time (the "Warrant Shares"),
of the Company's Common Stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants"
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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.
Page 79 of 107 Pages
Daniel Abraham or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), sixty-five thousand three hundred seventy (65,370) shares, as such
number of shares may be adjusted from time to time (the "Warrant Shares"), of
the Company's Common Stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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 Arnold
and S. Bleichroeder, Inc. or permitted registered assigns (the "Warrantholder"
or "Warrantholders"), the right to subscribe for and purchase from the Company,
at a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
Page 80 of 107 Pages
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), one hundred seventeen thousand seven hundred twenty (117,720) shares, as
such number of shares may be adjusted from time to time (the "Warrant Shares"),
of the Company's Common Stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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 The
Emerging Markets Infrastructure Fund Inc. or permitted registered assigns (the
"Warrantholder" or "Warrantholders"), the right to subscribe for and purchase
from the Company, at a purchase price of $11.00 per share (the "Exercise
Price"), at any time and from time to time after the date hereof (the "Initial
Exercise Date"), and to and including 5:00 P.M. New York City time on June 20,
2001 (the "Expiration Date"), forty-seven thousand five hundred twenty (47,520)
shares, as such number of shares may be adjusted from time to time (the "Warrant
Shares"), of the Company's Common Stock, par value $.01 per share (the "Common
Page 81 of 107 Pages
Stock"), subject to the provisions and upon the terms and conditions herein set
forth. The Exercise Price and the number of Warrant Shares are subject to
adjustment from time to time as provided in Section 6. This warrant constitutes
part of a duly authorized issue of warrants expiring June 20, 2001, which
warrants are hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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 The
First Israel Fund Inc. or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), seventeen thousand eight hundred fifty (17,850) shares, as such number
of shares may be adjusted from time to time (the "Warrant Shares"), of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth. The
Exercise Price and the number of Warrant Shares are subject to adjustment from
time to time as provided in Section 6. This warrant constitutes part of a duly
authorized issue of warrants expiring June 20, 2001, which warrants are
Page 82 of 107 Pages
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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 PEC
Israel Economic Corporation or permitted registered assigns (the "Warrantholder"
or "Warrantholders"), the right to subscribe for and purchase from the Company,
at a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), thirty thousand (30,000) shares, as such number of shares may be
adjusted from time to time (the "Warrant Shares"), of the Company's Common
Stock, par value $.01 per share (the "Common Stock"), subject to the provisions
and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
Page 83 of 107 Pages
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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. or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), one hundred twelve thousand five hundred (112,500) shares, as such
number of shares may be adjusted from time to time (the "Warrant Shares"), of
the Company's Common Stock, par value $.01 per share (the "Common Stock"),
subject to the provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
Page 84 of 107 Pages
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, 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, JUNE 20, 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 Winston
Partners II LDC or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), twenty-five thousand twenty (25,020) shares, as such number of shares
may be adjusted from time to time (the "Warrant Shares"), of the Company's
Common Stock, par value $.01 per share (the "Common Stock"), subject to the
provisions and upon the terms and conditions herein set forth.
The Exercise Price and the number of Warrant Shares are subject to adjustment
from time to time as provided in Section 6. This warrant constitutes part of a
duly authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
<PAGE>
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF NOR ANY
INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE OFFERED, SOLD, OR IN ANY
Page 85 of 107 Pages
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, JUNE 20, 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 Winston
Partners II LLC or permitted registered assigns (the "Warrantholder" or
"Warrantholders"), the right to subscribe for and purchase from the Company, at
a purchase price of $11.00 per share (the "Exercise Price"), at any time and
from time to time after the date hereof (the "Initial Exercise Date"), and to
and including 5:00 P.M. New York City time on June 20, 2001 (the "Expiration
Date"), twelve thousand four hundred eighty (12,480) shares, as such number of
shares may be adjusted from time to time (the "Warrant Shares"), of the
Company's Common Stock, par value $.01 per share (the "Common Stock"), subject
to the provisions and upon the terms and conditions herein set forth. The
Exercise Price and the number of Warrant Shares are subject to adjustment from
time to time as provided in Section 6. This warrant constitutes part of a duly
authorized issue of warrants expiring June 20, 2001, which warrants are
hereinafter referred to collectively as the "Warrants".
Page 86 of 107 Pages
<PAGE>
CERTIFICATE OF DESIGNATION
of
SERIES N CUMULATIVE CONVERTIBLE PREFERRED STOCK
of
GEOTEK COMMUNICATIONS, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
Geotek Communications, Inc., a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Corporation"), hereby
certifies that the following resolutions were adopted by the Board of Directors
of the Corporation pursuant to authority of the Board of Directors as required
by Section 151 of the Delaware General Corporation Law:
RESOLVED, that pursuant to the authority granted to and vested in the Board
of Directors of this Corporation (the "Board of Directors" or the "Board") in
accordance with the provisions of its Restated Certificate of Incorporation, the
Board of Directors hereby creates a series of the Corporation's previously
authorized Preferred Stock, par value $.01 per share (the "Preferred Stock"),
and hereby states the designation and number of shares, and fixes the relative
rights, preferences, privileges, powers and restrictions thereof as follows:
Series N Cumulative Convertible Preferred Stock:
I. Designation and Amount
The designation of this series, which consists of fifty-five thousand
(55,000) shares of Preferred Stock, is Series N Cumulative Convertible Preferred
Stock (the "Series N Preferred Stock") and the stated value shall be one
thousand dollars ($1000.00) per share (the "Stated Value"). The number of shares
of the Series N Preferred Stock may be decreased from time to time by a
resolution or resolutions of the Board of Directors; provided, however, that no
such amendment shall reduce the number of shares of the Series N Preferred Stock
to a number less than the aggregate number of shares of the Series N Preferred
Stock then outstanding.
<PAGE>
Notwithstanding any other provision in this Certificate of Designation, the
Page 87 of 107 Pages
Corporation shall not be required to issue fractional shares of Series N
Preferred Stock.
II. Rank
All Series N Preferred Stock shall rank (i) prior to the Corporation's
common stock, par value $.01 per share (the "Common Stock"); (ii) junior to the
Corporation's Series H Cumulative Convertible Preferred Stock, Series I
Cumulative Convertible Preferred Stock (the "Series I Stock"), Series K
Cumulative Convertible Preferred Stock, Series L Cumulative Convertible
Preferred Stock and Series M Cumulative Convertible Preferred Stock and (iii)
unless the holders of Series N Preferred Stock shall otherwise consent pursuant
to Article VIII.B, prior to any other class or series of the Corporation's
capital stock, both as to payment of dividends and as to distribution of assets
upon liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
III. Dividends
A. The holders of shares of Series N Preferred Stock shall be entitled
to receive dividends, payable in shares of Common Stock as set forth below, at
the rate (the "Dividend Rate") of ten percent (10.0%) per annum, from and after
the date of issuance of such shares, which dividends shall be payable (subject
to the limitations contained in Article IX) in equal quarterly installments on
March 31, June 30, September 30 and December 31 each year, commencing September
30, 1996 (each such date, regardless of whether any dividends have been paid or
declared and set aside for payment on such date, being a "Dividend Payment
Date"), to holders of record as they appear on the stock books on such record
dates as are fixed by the Board of Directors, but only when, as and if declared
by the Board of Directors out of funds at the time legally available for the
payment of dividends. For purposes of calculation of such dividends, the Series
N Preferred Stock shall be valued at the Stated Value. The Corporation shall pay
such dividends by issuing to each holder shares of Common Stock that have an
aggregate Market Value (as defined below) equal to the amount of the dividends
payable to such holder on the applicable Dividend Payment Date. For purposes of
this paragraph, the aggregate "Market Value" of the Common Stock with respect to
any Dividend Payment Date shall mean the average of the Closing Prices (as
defined in subparagraph (b) of Article VI.B) of the shares of Common Stock for
the thirty (30) consecutive Trading Days (as defined in subparagraph (b) of
Article VI.B) commencing forty-five (45) Trading Days prior to the Dividend
Payment Date. Such dividends shall begin to accrue on outstanding shares of
Series N Preferred Stock from the date of issuance and shall be deemed to accrue
from day to day whether or not earned or declared until paid; provided, however,
that dividends accrued or deemed to have accrued for any period longer or
shorter than a three-month period between Dividend Payment Dates shall be
computed based on the actual number of days elapsed in the period for which such
dividends are payable. Dividends on the Series N Preferred Stock shall be
cumulative, and from and after any Dividend Payment Date on which any dividend
that has accrued and is payable or been deemed to have accrued and is payable
through such date has not been paid in full, the amount of such unpaid dividends
(the "Dividend Arrearage"), valued at
-2-
<PAGE>
Page 88 of 107 Pages
the full such amount, shall accrue dividends at an annual rate equal to 15% per
annum. Such dividends in respect of any Dividend Arrearage shall be deemed to
accrue from day to day whether or not earned or declared until the Dividend
Arrearage is paid, shall be calculated as of each successive Dividend Payment
Date and shall constitute an additional Dividend Arrearage from and after any
Dividend Payment Date to the extent not paid on such Dividend Payment Date.
References in any Article herein to dividends that have accrued or that have
been deemed to accrue shall include the amount, if any, of any Dividend
Arrearage together with any dividends accrued or deemed to have accrued on such
Dividend Arrearage pursuant to the immediately preceding two sentences.
Dividends on account of any Dividend Arrearage may be declared and paid at any
time, in whole or in part, without reference to any regular Dividend Payment
Date, to holders of record on such date as may be fixed by the Board of
Directors of the Corporation.
B. No dividends or other distributions, other than dividends or other
distributions payable solely in shares of capital stock of the Corporation which
are junior to the Series N Preferred Stock and liquidating distributions which
are subject to the provisions of Article IV, shall be declared, paid or set
aside for payment on, and no purchase, redemption or other acquisition shall be
made of, any shares of capital stock of the Corporation (other than any class or
series of Preferred Stock that, in accordance with Article II hereof, ranks
senior to the Series N Preferred Stock), unless and until all accrued and unpaid
dividends on the Series N Preferred Stock, including the full dividend for the
then current quarterly dividend period and all outstanding Dividend Arrearages
and accrued and unpaid dividends thereon, shall have been declared and paid or a
sum sufficient for the payment thereof set aside for such purposes.
C. Any reference to "distribution" contained in this Article III shall
not be deemed to include any stock dividend or distributions made in connection
with any liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary.
D. In the event any holder of Series N Preferred Stock shall be
entitled to a fractional share of Common Stock on account of dividends on the
Series N Preferred Stock, such fractional shares shall be disregarded and the
number of shares of Common Stock issuable on account of such dividend shall be
the next higher number of shares.
E. A holder of shares of Series N Preferred Stock shall not be
entitled to receive any dividends or other distributions with respect to any
share of Series N Preferred Stock except as provided herein and shall have no
right to receive dividends with respect to any such share of Series N Preferred
Stock (i) after a conversion of such share of Series N Preferred Stock pursuant
to Article VII or (ii) after any Mandatory Conversion Date with respect to such
share of Series N Preferred Stock; provided, however, that dividends on such
share of Series N Preferred Stock (other than a Dividend Arrearage converted
into Common Stock pursuant to Article VI) shall accrue and be payable on such
share of Series N Preferred Stock through and including any redemption thereof
Page 89 of 107 Pages
pursuant to Article V or conversion thereof pursuant to Article VI or VII.
-3-
<PAGE>
IV. Liquidation Preference
A. If the Corporation shall commence a voluntary case under the
Federal bankruptcy laws or any other applicable Federal or State bankruptcy,
insolvency or similar law, or consent to the entry of an order for relief in an
involuntary case under any law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar official) of the
Corporation or of substantially all of its property, or make an assignment for
the benefit of its creditors, or if a decree or order for relief in respect of
the Corporation shall be entered by a court having jurisdiction in the premises
in an involuntary case under the Federal bankruptcy laws or any other applicable
Federal or State bankruptcy, insolvency or similar law resulting in the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Corporation or of substantially
all of its property, or ordering the winding up or liquidation of its affairs,
and any such decree or order shall be unstayed and in effect for a period of 60
consecutive days and, on account of any such event (a "Liquidation Event"), the
Corporation shall liquidate, dissolve or wind up, or if the Corporation shall
otherwise liquidate, dissolve or wind up, no distribution shall be made to the
holders of any shares of capital stock of the Corporation (other than any class
or series of Preferred Stock that, in accordance with Article II hereof, ranks
senior to the Series N Preferred Stock) upon liquidation, dissolution or winding
up unless prior thereto, the holders of shares of Series N Preferred Stock,
subject to Article VI, shall have received the Liquidation Preference (as
defined in Article IV.C) with respect to each share. If upon the occurrence of a
Liquidation Event, the assets and funds available for distribution among the
holders of the Series N Preferred Stock shall be insufficient to permit the
payment to such holders of the preferential amounts payable thereon, then the
entire assets and funds legally available for distribution to the Series N
Preferred Stock shall be distributed ratably among such shares.
B. Neither the consolidation, merger or other business combination of
the Corporation with or into any other Person (as defined below) or Persons nor
the sale of all or substantially all the assets of the Corporation shall be
deemed to be a liquidation, dissolution or winding up of the Corporation for
purposes of this Article IV. "Person" shall mean any individual, corporation,
limited liability company, partnership, association, trust or other entity or
organization.
C. For purposes hereof, the "Liquidation Preference" with respect to a
share of the Series N Preferred Stock shall mean an amount equal to the unpaid
dividends accrued or deemed to have accrued thereon to the date of final
distribution to the holder thereof, whether or not declared, plus an amount
equal to the Stated Value.
Page 90 of 107 Pages
V. Redemption
A. Subject to the limitations set forth in this Article V, in the
event of a Change of Control (as defined in Article V.E), the Corporation shall
redeem (the "Redemption") the shares of Series N Preferred Stock held by
Electing Holders (as defined in Article V.B) in accordance with the provisions
of this Article V. The Redemption shall be made as of a date
-4-
<PAGE>
(the "Redemption Date") specified by the Corporation not later than the later of
(i) the date of the Change of Control; or (ii) 60 days after the Corporation
first received written notice of the Change of Control. The redemption price
payable upon a Redemption shall be paid in cash or shares of Common Stock (or,
in the case of a Change of Control in which the Corporation is not the surviving
entity, in the common equity of the successor entity) or a combination thereof,
at the Corporation's option, in accordance with Article V.D and shall be in an
amount per share of Series N Preferred Stock (the "Redemption Price") equal to
the sum of (i) the Stated Value and (ii) an amount equal to all unpaid dividends
accrued or deemed to have accrued with respect to such share of Series N
Preferred Stock to the Redemption Date or the date of actual payment of the
Redemption Price, whichever is later. If the Redemption Price is not paid in
full within 30 days after the Redemption Date (unless such delay results from
the need for approval or other action by governmental bodies or other Persons
which approval or other action is sought by the Corporation with reasonable
diligence any unpaid Redemption Price shall accrue interest at the greater of
(x) 15% per annum or (y) the interest rate per annum at which deposits in United
States dollars are offered by the principal office of Citibank in London,
England, to prime banks in the London interbank market at 11:00 a.m. (London
time) during the period covered plus 6% per annum from the Redemption Date until
the date of payment, and such interest shall be compounded daily and the
Redemption Price shall be deemed to include all such accrued and unpaid
interest.
B. Not more than 60 nor fewer than 15 Trading Days prior to the
Redemption Date, notice by first class mail, postage prepaid, shall be sent to
the holders of record of the shares of Series N Preferred Stock eligible to be
redeemed, addressed to such stockholders at their last addresses as shown by the
records of the Corporation. Such notice shall (i) notify such holders of their
right to elect redemption, subject to the applicable provisions of this Article
V; (ii) state the amount and form or forms of consideration to be paid; and
(iii) provide a summary of other relevant details of the transaction. The right
of each holder to elect redemption shall terminate unless notice of such
election from such holder is received by the Corporation not later than 10
Trading Days prior to the Redemption Date. Holders who elect redemption in
accordance with the foregoing are referred to herein as the "Electing Holders."
Page 91 of 107 Pages
C. The Corporation shall, on or prior to the Redemption Date, but not
earlier than 45 days prior to the Redemption Date, deposit with its transfer
agent or other redemption agent in the United States selected by the Board of
Directors, as a trust fund, cash and/or shares of Common Stock (or, in the case
of a Change of Control in which the Corporation is not the surviving entity,
common equity of the successor entity) sufficient in amount to pay the
Redemption Price in full on all outstanding shares of Series N Preferred Stock
held by Electing Holders with irrevocable instructions and authority to such
transfer agent or other redemption agent to give or complete the notice of
redemption thereof and to pay to the applicable holders (as evidenced by a list
of such holders certified by an officer of the Corporation) the Redemption Price
upon surrender of their respective share certificates. Such deposit shall be
deemed to constitute full payment for such shares to their holders, and from and
after the date of such deposit all rights of the holders of the shares of Series
N Preferred Stock that are to be redeemed, as stockholders of the Corporation
with respect to such shares, except the right to
-5-
<PAGE>
receive the Redemption Price without interest or any dividends thereon, upon the
surrender of their respective certificates, and except any right as provided in
Article VI to convert their shares into Common Stock or other property or
securities prior to the date fixed for redemption, shall cease and terminate. In
case an Electing Holder of any shares of Series N Preferred Stock called for
redemption shall not, within one year after such deposit, claim the cash
deposited for redemption thereof, such transfer agent or other redemption agent
shall, upon demand, pay over to the Corporation the balance so deposited.
Thereupon, such transfer agent or other redemption agent shall be relieved of
all responsibility to the holder thereof and the sole right of such holder, with
respect to shares to be redeemed, shall be as general creditors of the
Corporation. To the extent that shares of Series N Preferred Stock called for
redemption are converted into Common Stock (or other property or securities
pursuant to Article VI hereof) prior to the date fixed for redemption, the
amount deposited by the Corporation for the redemption of such shares shall
immediately be returned to the Corporation. Any interest accrued on any funds so
deposited shall belong to the Corporation, and shall be paid to it from time to
time on demand.
D. In the event that the Corporation exercises its option to pay the
Redemption Price in whole or in part in shares of Common Stock, the number of
shares of Common Stock to be issued per share of Series N Preferred Stock shall
be determined by dividing the Redemption Price by the Market Value (as defined
below) of a share of Common Stock. For purposes of this subparagraph, the
"Market Value" of a share of Common Stock shall mean the average of the 20
highest Closing Prices of the shares of Common Stock during the period of 30
consecutive Trading Days ending on the Trading Day immediately prior to the
Redemption Date. To the extent the Redemption Price in a Change of Control
Redemption is paid in common equity of a successor entity, the amount of such
Page 92 of 107 Pages
common equity shall be determined by the Board of Directors applying the
principles of this Article V.D to the extent practicable.
E. Solely for purposes of this Article V, the following terms shall
have the following meanings:
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock and any and all equity, beneficial or
ownership interests in, or participations or other equivalents in, any
partnership, association, joint venture or other business entity.
"Change of Control" means an event or series of events by which (i) (A) any
"person" or "group" (as such terms are defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 and Rule 13d-5 under the Exchange
Act), directly or indirectly, of more than 50% of the total voting power of the
then outstanding Voting Stock of the Corporation or (B) the Corporation
consolidates with, or merges with or into, another Person or sells, assigns,
conveys, transfers, leases or otherwise disposes of all or substantially all of
its assets to any Person, or any Person consolidates with, or merges with or
into, the Corporation, if, immediately thereafter, the Persons who, immediately
prior to such transaction, beneficially owned the Voting Stock of the
Corporation, own, in the aggregate, less than 50% of the total voting power of
the Voting Stock
-6-
<PAGE>
of the surviving or transferee Person; provided, however, that no Change of
Control will be deemed to occur pursuant to this clause (i) (x) if the Person is
a corporation with outstanding debt securities having a maturity at original
issuance of at least one year and if such debt securities are rated Investment
Grade by S&P or Moody's for a period of at least 90 consecutive days, beginning
on the date of such event (which period will be extended up to 90 additional
days for as long as the rating of such debt securities is under publicly
announced consideration for possible downgrading by the applicable rating
agency), or (y) if the Person is a corporation (1) that is not, and does not
have any outstanding debt securities that are, rated by S&P, Moody's or any
other rating agency of national standing at any time during a period of 90
consecutive days beginning on the date of such event (which period will be
extended up to an additional 90 days for as long as any such rating agency has
publicly announced that such corporation or debt thereof will be rated), unless
after such date but during such period debt securities of such corporation
having a maturity at original issuance of at least one year are rated Investment
Grade by S&P or Moody's and remain so rated for the remainder of the period
referred to in clause (x) above and (2) that, when determined as of the Trading
Day immediately before the Trading Day immediately after the date of such event,
has Total Common Equity of at least $10 billion (provided that, solely for the
Page 93 of 107 Pages
purpose of calculating Total Common Equity as of such later Trading Day, the
average Closing Price of Common Stock of the such Person will be deemed to equal
the Closing Price of such Common Stock on such later Trading Day, subject to the
last sentence of the definition of "Total Common Equity"); or (ii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Corporation (together with any
directors who are members of the Board of Directors on the date of the initial
issuance of shares of Series N Preferred Stock and any new directors whose
election by such Board of Directors or whose nomination for election by the
stockholders of the Corporation was approved by a vote of 66 2/3% of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Corporation then in office.
"Closing Price" shall have the meaning set forth in subparagraph (b) of
Article VI.B.
"Common Stock" of any Person means Capital Stock of such Person that does
not rank prior, as to the payment of dividends or as to the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of such Person, to shares of Capital Stock of any other class of such Person.
"Investment Grade" means a rating of at least BBB-, in the case of S&P, or
Baa3, in the case of Moody's.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"S&P" means Standard & Poor's Corporation and its successors.
"Trading Day" shall have the meaning set forth in subparagraph (b) of
Article VI.B.
-7-
<PAGE>
"Total Common Equity" of any Person means, as of any day of determination
(and as modified for purposes of the definition of "Change of Control"), the
product of (i) the aggregate number of outstanding primary shares of Common
Stock of such Person on such day (which shall not include any options or
warrants on, or securities convertible or exchangeable into, shares of Common
Stock of such Person) and (ii) the average Closing Price of such Common Stock
over the 20 consecutive Trading Days immediately preceding 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 (ii) of the preceding sentence shall be determined
by the Board of Directors of the Corporation in good faith and evidenced by a
written opinion as to such value issued by an investment banking firm of
recognized national standing.
Page 94 of 107 Pages
"Voting Stock" of any Person means Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person.
VI. Conversion at the Option of the Holder
A. Subject to all applicable state and federal laws, rules and
regulations ("Applicable Law") and the limitations contained in Article IX, each
holder of shares of Series N Preferred Stock may, at its option at any time and
from time to time, upon surrender of the certificates therefor, convert any or
all of its shares of Series N Preferred Stock into Common Stock as follows. Each
share of Series N Preferred Stock shall be convertible into such number of fully
paid and nonassessable shares of Common Stock as is determined by dividing (i)
the sum of the Stated Value and the Dividend Arrearage, if any, with respect to
such share through the date of conversion, but no later, by (ii) the then
effective Conversion Price (as defined below). The "Conversion Price" initially
shall be eleven dollars ($11.00) per share of Common Stock and shall be subject
to adjustment from time to time as provided in connection with the antidilution
adjustments set forth in Article VI.B.
B. The Conversion Price shall be subject to adjustment from time to
time as follows:
(a) In case the Corporation shall (i) declare a dividend or make
a distribution on the outstanding shares of its Common Stock in shares of its
Common Stock, (ii) subdivide its outstanding shares of Common Stock into a
greater number of shares, or (iii) combine its outstanding shares of Common
Stock into a smaller number of shares, the Conversion Price in effect at the
time of the record date for such dividend or distribution or the effective date
of such subdivision or combination shall be proportionately adjusted so that the
holder of any shares of Series N Preferred Stock surrendered for conversion
after such time shall be entitled to receive the aggregate number of shares of
Common Stock which the holder would have owned or been entitled to receive had
such shares of Series N Preferred Stock been converted immediately prior to such
record date or effective date and the resulting Common Stock had been subject to
such dividend, distribution, subdivision or combination. Any shares of Common
Stock issuable in payment of a dividend shall be deemed to have been issued
-8-
<PAGE>
immediately prior to the time of the record date for such dividend for purposes
of calculating the number of outstanding shares of Common Stock under
subparagraphs (b) and (c) below. Such adjustment shall be made successively
whenever any event specified above shall occur.
(b) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of shares of Common Stock
entitling them to subscribe for or purchase shares of Common Stock (or
Page 95 of 107 Pages
securities convertible into shares of Common Stock) at a price per share (or
having a Conversion Price per share) less than the average of the Closing Prices
(as defined below) of the Common Stock for the twenty (20) consecutive Trading
Days (as defined below) ending five (5) Trading Days prior to the record date
(the "Conversion Average Closing Price"), the Conversion Price shall be adjusted
immediately thereafter so that it shall equal the price determined by
multiplying the Conversion Price in effect immediately prior thereto by a
fraction, the numerator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of Common Stock that
the aggregate offering price of the total number of shares of such Common Stock
so offered (or the aggregate initial conversion price of the convertible
securities so offered) would purchase on such record date at the Conversion
Average Closing Price, and the denominator of which shall be the number of
shares of Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or purchase (or into
which the convertible securities so offered are initially convertible). Shares
of Common Stock owned by or held for the account of the Corporation shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed. In the event
and to the extent that such rights, options, warrants or convertible securities
are not so issued, the Conversion Price then in effect shall be readjusted to
the Conversion Price which would then be in effect if such record date had not
been fixed. The "Closing Price" for each day shall be the last reported sales
price regular way on that day or, in case no such reported sale takes place on
such day, the reported closing bid price regular way, in either case as reported
in the principal consolidated transaction reporting system for the principal
United States national securities exchange or the Nasdaq Stock Market's National
Market ("NASDAQ") on which the Common Stock is admitted to trading or listed, or
if not so listed or admitted to trading, the last quoted bid price or, if not
quoted, the average of the high bid and the low asked prices in the
over-the-counter market as reported by NASDAQ or such other system then in use
(reduced in each case to reflect any dividend for the period during which the
Common Stock is traded on an ex-dividend basis). If the Common Stock is not
publicly held or so listed or traded, the "Closing Price" shall mean the fair
value per share as determined in good faith by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors certified by the Secretary or an Assistant Secretary of the
Corporation. A "Trading Day" shall be any day on which the principal national
securities exchange (or NASDAQ) on which the Common Stock is admitted to trading
or listed is open or, if the Common Stock is not so admitted to trading or so
listed, any day except Saturday, Sunday, a legal holiday or any day on which
banking institutions in the City of New York are obligated or authorized to
close.
-9-
<PAGE>
(c) The Conversion Price of shares of Series N Preferred Stock
shall be adjusted in the event that the Corporation shall fix a record date for
Page 96 of 107 Pages
the making of a distribution to all holders of shares of Common Stock of (i)
shares of any class of capital stock other than Common Stock, (ii) evidences of
its indebtedness, (iii) assets (excluding regular cash dividends at rates in
effect from time to time, and excluding dividends or distributions referred to
in subparagraph (a) above) or (iv) rights, options or warrants (excluding those
referred to in subparagraph (b) above). In such case, the Conversion Price in
effect immediately thereafter shall be determined by multiplying the Conversion
Price in effect immediately prior thereto by a fraction, the numerator of which
shall be the total number of shares of Common Stock outstanding on such record
date multiplied by the average of the Closing Prices of the Common Stock for the
twenty (20) consecutive Trading Days ending five (5) Trading Days prior to such
record date, less the fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors certified by the Secretary or an Assistant
Secretary of the Corporation) of said shares or evidences of indebtedness or
assets or rights, options or warrants so distributed, and the denominator of
which shall be the total number of shares of Common Stock outstanding on such
record date multiplied by the average of the Closing Prices of the Common Stock
for the twenty (20) consecutive Trading Days ending five (5) Trading Days prior
to such record date. Such adjustment shall be made successively whenever such a
record date is fixed. In the event that such distribution is not so made, the
Conversion Price then in effect shall be readjusted to the Conversion Price
which would then be in effect if such record date had not been fixed.
(d) In any case in which this Article VI.B shall require that an
adjustment become effective immediately after a record date for an event, the
Corporation may defer until the occurrence of such event by (i) issuing to the
holder of any shares of Series N Preferred Stock converted after such record
date and before the occurrence of such event the additional shares of Common
Stock issuable upon such conversion by reason of the adjustment required by such
event over and above the shares of Common Stock issuable upon such conversion
before giving effect to such adjustment and (ii) paying to such holder any
amount in cash in lieu of a fractional share pursuant to Article VI.C; provided,
however, that the Corporation shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's rights to receive such
additional shares of Common Stock and such cash, upon the occurrence of the
event requiring such adjustment.
(e) All calculations under this Article VI.B shall be made to the
nearest cent or to the nearest one one-hundredth of a share of Common Stock as
the case may be.
C. No fractional shares of Common Stock or other securities, if any,
or scrip representing fractional shares of Common Stock or other securities, if
any, shall be issued upon the conversion of any share or shares of Series N
Preferred Stock. If the conversion of a share or shares of Series N Preferred
Stock results in a fraction of Common Stock or other securities, an amount equal
to such fraction multiplied by the Closing Price of the Common Stock or other
securities, if any, on the Trading Day prior to the conversion shall be paid to
such holder in cash
-10-
Page 97 of 107 Pages
<PAGE>
by the Corporation. The "Closing Price" for other securities shall be determined
in the same manner and with the same effect as the "Closing Price" for the
Common Stock as defined in Article VI.B.(b).
D. The right of the holders of shares of Series N Preferred Stock to
convert their shares shall be exercised by surrendering for such purpose to the
Corporation or its agent, as provided above, certificates representing shares to
be converted, duly endorsed in blank or accompanied by proper instruments of
transfer. The Corporation shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery
upon conversion of shares of Common Stock or other securities or property in a
name other than that of the registered holder of the shares of the Series N
Preferred Stock being converted.
E. A number of shares of the authorized but unissued Common Stock
sufficient to provide for the conversion of the Series N Preferred Stock
outstanding at the then current Conversion Price and to provide for the payment
of dividends payable thereon during the present and following year at the then
current Market Price shall at all times be reserved by the Corporation, free
from preemptive rights, subject to the provisions of the next succeeding
paragraph. If the Corporation shall issue any securities or make any change in
its capital structure which would change the number of shares of Common Stock
into which each share of the Series N Preferred Stock shall be convertible at
the then current Conversion Price, the Corporation shall at the same time also
make proper provision so that thereafter there shall be a sufficient number of
shares of Common Stock authorized and reserved, free from preemptive rights, for
conversion of the outstanding Series N Preferred Stock on the new basis and for
the payment of dividends to the extent set forth above.
F. In case of (i) any reclassification or change of the outstanding
shares of Common Stock (other than a change in par value, or from par value to
no par value, or from no par value to par value, or as a result of a subdivision
or combination), (ii) any consolidation or merger of the Corporation with any
other corporation (other than a merger in which the Corporation is the surviving
or continuing corporation and its outstanding capital stock is unchanged), (iii)
any sale or transfer of all or substantially all of the assets of the
Corporation or (iv) any share exchange pursuant to which all of the outstanding
shares of Common Stock are converted into other securities or property, the
Corporation shall in each such case make appropriate provision or cause
appropriate provision to be made so that the holders of shares of Series N
Preferred Stock then outstanding shall have the right thereafter to convert each
such share of Series N Preferred Stock into the kind and amount of other
securities and property receivable upon such reclassification, consolidation,
merger, sale, transfer or share exchange by a holder of the number of shares of
Common Stock into which each such share of Series N Preferred Stock might have
been converted immediately prior to such reclassification, consolidation,
merger, sale, transfer or share exchange. To the extent that as a result of any
such reclassification, consolidation, merger, sale, transfer or share exchange
the Series N Preferred Stock becomes convertible into a new common stock of the
Page 98 of 107 Pages
Corporation or the common stock of any other corporation involved in a merger
with the Corporation, the
-11-
<PAGE>
Corporation shall make appropriate provision or cause appropriate provision to
be made so that the Conversion Price with respect to such new common stock shall
be subject to further adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to Common Stock
contained in this Article VI. If in connection with any such reclassification,
consolidation, merger, sale, transfer or share exchange, each holder of shares
of Common Stock is entitled to elect to receive alternative forms of
consideration upon completion of such transaction, the Corporation shall provide
or cause to be provided to each holder of Series N Preferred Stock upon
conversion thereof the shares of capital stock or other securities or property
receivable by a holder of Common Stock who failed to make an election with
respect to the form of consideration receivable in such transaction. The
Corporation shall not effect any such transaction unless the provisions of this
paragraph have been complied with. The above provisions shall similarly apply to
successive reclassifications, consolidations, mergers, sales, transfers or share
exchanges.
G. Upon the surrender of certificates representing shares of Series N
Preferred Stock in accordance with the terms hereof, the person converting shall
be deemed to be the holder of record at such time of the shares of Common Stock
and other securities or property issuable on such conversion and all rights with
respect to the shares of Series N Preferred Stock surrendered shall forthwith
terminate except the right to receive the shares of Common Stock or other
securities or property issuable on such conversion. Except as otherwise provided
in Article VI.B, no adjustment in the Conversion Price shall be made at the time
of conversion in respect of distributions or dividends theretofore declared and
paid or payable on the Common Stock.
H. Upon the occurrence of each adjustment or readjustment of the
Conversion Price pursuant to this Article VI, the Corporation, at its expense,
shall promptly compute such adjustment or readjustment in accordance with the
terms hereof and prepare and furnish to each holder of Series N Preferred Stock
a certificate setting forth such adjustment or readjustment and showing in
detail the facts upon which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any time of any holder of Series
N Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the
Conversion Price at the time in effect and (iii) the number of shares of Common
Stock and the amount, if any, of other securities or property which at the time
would be received upon conversion of a share of Series N Preferred Stock.
VII. Mandatory Conversion
Page 99 of 107 Pages
From and after that date which is twenty-four (24) months following the
issuance of the Series N Preferred Stock, the Company may, in its sole
discretion, require the conversion of all, but not less than all, of the then
outstanding Series N Preferred Stock on a Mandatory Conversion Date following a
Mandatory Conversion Calculation Period. "Mandatory Conversion Calculation
Period" shall be any period during which for twenty consecutive Trading Days,
the Closing Price of the Common Stock equaled or exceeded the Mandatory
Conversion Price. The initial Mandatory Conversion Price shall be equal to
seventeen dollars and seventy-
-12-
<PAGE>
five cents ($17.75). The Mandatory Conversion Price shall be subject to
equitable adjustment in accordance with the antidilution provisions set forth in
Article VI.B and Article VI.F to the same extent as the Conversion Price is
subject to adjustment. At any time during the ten (10) Business Day period
immediately following the conclusion of a Mandatory Conversion Calculation
Period in respect of which the Company determines to convert the Series N
Preferred Stock pursuant to this Article VII, the Company shall cause to be
mailed to all holders of Series N Preferred Stock at their last address
reflected on the Company's books and records a notice notifying such holders
that the Company has exercised its conversion right pursuant to this Article
VII. Such notice shall set forth the date fixed for such conversion (the
"Mandatory Conversion Date"), which shall be a date not less than ten (10) nor
more than thirty (30) Business Days following the conclusion of such Mandatory
Conversion Calculation Period, the applicable conversion price and the
procedures applicable to such conversion (as may reasonably be determined by the
Company; provided, however, that a holder of Series N Preferred Stock may, by
providing written notice of such election to the Corporation at least five (5)
business days prior to the Mandatory Conversion Date, delay a Mandatory
Conversion Date with respect to any of its shares of Series N Preferred Stock if
the Common Stock issuable upon conversion of and in respect to dividends on such
Series N Preferred Stock is not, and until such date as the Common Stock
issuable upon conversion of and in respect to dividends on such Series N
Preferred Stock is, either (i) registered for resale under the Securities Act of
1933, as amended (the "Securities Act") or (ii) permitted to be sold pursuant to
Rule 144 under the Securities Act and, with respect to any nonaffiliate of the
Corporation, without any restriction applicable to such holder as to the number
of shares of such Common Stock which can be sold pursuant to such rule. In the
event of any delay of a Mandatory Conversion Date pursuant to the proviso
contained in the immediately preceding sentence, the Corporation may not cause a
mandatory redemption of the Series N Preferred Stock under this Article VII
until the occurrence of an additional Mandatory Conversion Period and then only
if the Company again complies with the terms of this Article VII.
VIII. Voting Rights
In addition to any voting rights provided by law, the holders of shares of
Series N Preferred Stock shall have the following rights:
Page 100 of 107 Pages
A. So long as the Series N Preferred Stock is outstanding, each share
of Series N Preferred Stock shall entitle the holder thereof to vote on all
matters voted on by holders of the capital stock of the Corporation into which
such share of Series N Preferred Stock is convertible, voting together as a
single class with the other shares entitled to vote, at all meetings of the
stockholders of the Corporation. With respect to any such vote, each share of
Series N Preferred Stock shall entitle the holder thereof to cast the number of
votes equal to the number of votes which could be cast in such vote by a holder
of the shares of capital stock of the Corporation into which such share of
Series N Preferred Stock is convertible on the record date for such vote.
-13-
<PAGE>
B. The affirmative vote of the holders of at least sixty-six and
two-thirds percent (66 2/3%) of the voting power represented by the outstanding
shares of Series N Preferred Stock, voting separately as a single class, shall
be necessary to (i) increase the authorized number of shares of, or issue beyond
the number of shares issued in that certain offering of Series N Preferred Stock
to close on or about June 20, 1996 (including on conversion or exchange of any
convertible or exchangeable securities or by reclassification), any shares of,
Series N Preferred Stock, (ii) authorize, adopt or approve an amendment to the
Restated Certificate of Incorporation of the Corporation that would either (A)
increase or decrease the aggregate number (or par value) of authorized shares of
Series N Preferred Stock, (B) alter or change the powers, preferences or special
rights of any shares of capital stock so as to affect the shares of Series N
Preferred Stock adversely or (C) increase the rate or period of time at or for
which dividends accrue on the Corporation's Series H Cumulative Convertible
Preferred Stock, (iii) allow the Corporation to purchase any shares of Series N
Preferred Stock when dividends on the Series N Preferred Stock are in arrears,
or (iv) issue any shares of capital stock of the Corporation which is senior to
the Series N Preferred Stock (either as to dividends or upon liquidation) (other
than shares of the Corporation's Series L Cumulative Convertible Preferred Stock
in order to pay dividends on the Series L Cumulative Convertible Preferred Stock
pursuant to Article III.B of the Certificate of Designation for such preferred
stock). The affirmative vote of holders of at least 66 2/3% of the voting power
represented by the outstanding shares of Series N Preferred Stock, voting
separately as a class, shall be necessary to issue any additional shares of
Series N Preferred Stock.
C. If on any date, (i) dividends or distributions payable on the
Series N Preferred Stock shall have been in arrears and not paid in full with
respect to two Dividend Payment Dates, or (ii) the Corporation shall have failed
to satisfy its obligation to redeem shares of Series N Preferred Stock pursuant
to Article V, then the number of directors constituting the Board of Directors
shall, without further action, be increased by one and the holders of shares of
Series N Preferred Stock shall have, in addition to the other voting rights as
set forth herein, the exclusive right, voting separately as a single class, to
Page 101 of 107 Pages
elect the director of the Corporation to fill such newly created directorship,
the remaining directors of the Corporation to be elected by the other classes of
stock entitled to vote therefor (including the Series N Preferred Stock in
accordance with Article VIII.A), at each meeting of stockholders held for the
purpose of electing directors. Such additional director shall continue as a
director and such additional voting rights shall continue until such time as (A)
all dividends payable on the Series N Preferred Stock shall have been paid in
full and (B) any redemption obligation provided in Article V which has become
due shall have been satisfied or all necessary funds shall have been set aside
for payment, as the case may be, at which time such additional director shall
cease to be a director and such additional voting rights of the holders of
Series N Preferred Stock shall terminate subject to revesting in the event of
each and every subsequent event of the character indicated above.
D. (i) The rights of holders of shares of Series N Preferred Stock to
take any actions as provided in Paragraphs B and C of this Article VIII may be
exercised at any annual meeting of stockholders or any special meeting of
stockholders or holders of Series N Preferred
-14-
<PAGE>
Stock held for such purposes as hereinafter provided or at any adjournment
thereof, or by the written consent, delivered to the Secretary of the
Corporation, of the holders of the minimum number of shares of Series N
Preferred Stock required to take such action.
So long as such right to vote continues (and unless such right has been
exercised by written consent of the minimum number of shares required to take
such action), the Chairman of the Board of the Corporation may call, and upon
the written request addressed to the Secretary of the Corporation at the
principal office of the Corporation of holders of record of twenty percent (20%)
of the voting power represented by the outstanding shares of Series N Preferred
Stock, shall call a special meeting of the holders of shares entitled to vote as
provided herein. Such meeting shall be held within thirty (30) days after
delivery of such request to the Secretary, at the place and upon the notice
provided by law and in the Bylaws of the Corporation for the holding of meetings
of stockholders.
(ii) At each meeting of stockholders at which the holders of shares of
Series N Preferred Stock shall have the right, voting separately as a single
class, to elect a director of the Corporation as provided in this Article VIII
or to take any action, the presence in person or by proxy of the holders of
record of one-third of the voting power represented by the total number of
shares of Series N Preferred Stock voting separately as a single class then
outstanding and entitled to vote on the matter shall be necessary and sufficient
to constitute a quorum. At any such meeting or at any adjournment thereof:
(A) the absence of a quorum of the holders of shares of Series N
Preferred Stock shall not prevent the election of directors, other than any
Page 102 of 107 Pages
director to be elected by the holders of Series N Preferred Stock and the
absence of a quorum of the holders of shares of any other class or series
of capital stock shall not prevent the election of a director to be elected
by the holders of shares of Series N Preferred Stock or the taking of any
action as provided in this Article VIII; and
(B) in the absence of a quorum of the holders of shares of Series N
Preferred Stock, the holders of a majority of the voting power represented
by such shares present in person or by proxy shall have the power to
adjourn the meeting as to the actions to be taken by the holders of shares
of Series N Preferred Stock from time to time and place to place without
notice other than announcement at the meeting until a quorum shall be
present.
For the taking of any action as provided in Paragraphs B and C of this
Section VIII by the holders of shares of Series N Preferred Stock, each such
holder shall have the right to cast such number of votes as may be cast by the
holder of the number of shares of Common Stock into which such Series N
Preferred Stock is convertible as of any record date fixed for such purpose or,
if no such date is fixed, at the close of business on the Trading Day next
preceding the day on which notice is given, or if notice is waived, at the close
of business on the Trading Day next preceding the day on which the meeting is
held.
-15-
<PAGE>
E. Any director elected by the holders of shares of Series N Preferred
Stock, as provided in Paragraph C of this Article VIII shall, unless his term
shall expire earlier or be terminated in accordance with such Article VIII.C,
hold office until the annual meeting of stockholders next succeeding his
election or until his successor, if any, is elected and qualified.
In case any vacancy shall occur with respect to the director
elected by the holders of shares of Series N Preferred Stock, as provided in
Article VIII.C, such vacancy may be filled for the unexpired portion of the term
by vote of the holders of Series N Preferred Stock then outstanding and entitled
to vote for such directors, acting by written consent as herein provided, or at
a special meeting of such holders called as provided herein.
Any director elected by the holders of shares of Series N
Preferred Stock voting separately as a single class may be removed from office
with or without cause by the vote or written consent of the holders of at least
a majority of the voting power represented by the outstanding shares of Series N
Preferred Stock. A special meeting of the holders of shares of Series N
Preferred Stock may be called in accordance with the procedures set forth in
subparagraph (i) of this Article VIII.E.
F. Except as otherwise required by law, the holders of shares of
Page 103 of 107 Pages
Series N Preferred Stock shall have no voting rights except as set forth in this
Article VIII.
IX. Withholding Taxes.
A. In the case of any holder of shares of Series N Preferred Stock
that is a Foreign Person (as defined below), such Foreign Person shall, no later
than one (1) business day prior to payment of any distribution in respect of the
Series N Preferred Stock payable in Common Stock, including without limitation,
dividends payable in Common Stock pursuant to Article III, deposit (the "Initial
Deposit") with the Corporation an amount of cash sufficient to enable the
Corporation to satisfy its withholding tax obligations (if any) (the
"Withholding Tax") with respect to any such distribution; provided, however,
that the provisions of this Article IX shall not apply to, and the Corporation
shall be solely responsible for the payment of, any Withholding Tax with respect
to dividends related to the fiscal year ended 1996. The amount of the Initial
Deposit shall equal the amount that would be necessary to enable the Corporation
to satisfy its withholding obligation at the applicable statutory withholding
rate (or at a reduced withholding rate if the Corporation has received from such
Foreign Person such certificates, documents or other evidence satisfactory to it
or as otherwise may be required under the Internal Revenue Code of 1986, as
amended, or treasury regulations promulgated thereunder, establishing that such
distributions either are not subject to United States Federal withholding tax or
are subject to tax at a rate reduced by an appropriate tax treaty (such evidence
is collectively referred to herein as "Reduced Withholding Evidence")) as if the
Common Stock being so distributed were valued at the Closing Price for such
Common Stock on the third business day (the "Initial Deposit Notification Date")
immediately preceding the scheduled date for the distribution to which such
Withholding Tax relates. Prior to the Initial Deposit Notification Date
-16-
<PAGE>
with respect to a distribution, the Corporation shall notify each holder that is
a Foreign Person of the number of shares which such holder shall receive in such
distribution and remind such holder of its obligations under this Article IX. If
the Corporation shall determine in advance that no Withholding Tax shall be
payable with respect to a distribution on the Series N Preferred Stock, the
Corporation shall so notify each holder that is a Foreign Person no later than
the Initial Deposit Notification Date and no payment shall be due hereunder with
respect to such distribution. In the event that a holder of Shares of Series N
Preferred Stock fails to make an Initial Deposit required to be made under this
Article IX.A, the Corporation shall not be required to deliver to such holder
the share certificates representing the dividends to which such Initial Deposit
relates until such time as such holder remits the applicable payment to the
Corporation. In the event the actual Withholding Tax with respect to any
distribution differs from the amount of the Initial Deposit, the Corporation (in
the case of any excess Initial Deposit) or the holder (in the case of any
Initial Deposit deficiency (an "Initial Deposit Deficiency")) shall, no later
Page 104 of 107 Pages
than the fifth business day following the date of such distribution, pay such
difference to the other. The Corporation shall not be required to deliver to any
holder the share certificates representing the dividends with respect to, or
effectuate any conversions of, any Series N Preferred Stock held by a holder at
any time that such holder has failed to pay any Initial Deposit Deficiency
(including, without limitation, any deficiency caused by a failure to make an
Initial Deposit) due and payable hereunder unless the amount of such Initial
Deposit Deficiency is then subject to a good faith dispute between the
Corporation and the holder.
B. For purposes of this Article IX, the term Foreign Person means a
person other than (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or of any state or political subdivision thereof, or
(iii) an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
-17-
Page 105 of 107 Pages
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf
of the Corporation by its President this ___ day of June, 1996.
GEOTEK COMMUNICATIONS, INC.
By: ___________________________
Yaron I. Eitan, President
-18-
Page 106 of 107 Pages
<PAGE>
EXHIBIT N
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D with
respect to the Common Stock of Geotek Communications, Inc., dated June 26, 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.
June 26, 1996 S-C RIG INVESTMENTS-III, L.P.
By: S-C RIG CO., its General Partner
By: /s/ Peter Hurwitz
------------------------------
Peter Hurwitz
Vice President
June 26, 1996 S-C RIG CO.
By: /s/ Peter Hurwitz
---------------------------------
Peter Hurwitz
Vice President
June 26, 1996 WINSTON PARTNERS II LDC
By: /s/ Kieran Conroy / Wiekert Weber
---------------------------------
Curacao Corporation Company N.V.
Sole Director
June 26, 1996 WINSTON PARTNERS II LLC
By: Chatterjee Advisors LLC, its Manager
By: /s/ Peter Hurwitz
------------------------------
Peter Hurwitz
Manager
Page 107 of 107 Pages
<PAGE>
June 26, 1996 CHATTERJEE ADVISORS LLC
By: /s/ Peter Hurwitz
-----------------------------
Peter Hurwitz
Manager
June 26, 1996 CHATTERJEE MANAGEMENT COMPANY
By: /s/ Peter Hurwitz
-----------------------------
Peter Hurwitz
Manager
June 26, 1996 PURNENDU CHATTERJEE
By: /s/ Peter A. Hurwitz
-----------------------------
Peter A. Hurwitz
Attorney-in-Fact
